Winterton's Australian federal constitutional law : commentary and materials [Fourth edition.] 9780455239729, 045523972X

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WINTERTON’S AUSTRALIAN FEDERAL CONSTITUTIONAL LAW Commentary and Materials

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WINTERTON’S AUSTRALIAN FEDERAL CONSTITUTIONAL LAW Commentary and Materials

General Editor

PETER A GERANGELOS BA LLB (Syd); LLM, PhD (UNSW) Professor of Constitutional Law, The University of Sydney

NICHOLAS ARONEY BA (UNSW); LLB, LLM (UQ); PhD (Monash) Professor of Constitutional Law, TC Beirne School of Law, The University of Queensland

SIMON EVANS BSc LLB (Syd); PhD (Cambridge) Professor, Melbourne Law School, The University of Melbourne Pro Vice-Chancellor (International), The University of Melbourne

SARAH MURRAY BA LLB (UWA); PhD (Monash) Associate Professor, School of Law, The University of Western Australia

PATRICK EMERTON BA LLB, MA (Melb) PhD (Monash) Associate Professor, Faculty of Law, Monash University

ADRIENNE STONE BA, LLB (UNSW) JSD (Columbia) Kathleen Fitzpatrick Australian Laureate Fellow Professor, Director of the Centre for Comparative Constitutional Studies Melbourne Law School, The University of Melbourne

FOURTH EDITION

LAWBOOK CO. 2017

Published in Sydney by Thomson Reuters (Professional) Australia Limited ABN 64 058 914 668 19 Harris Street, Pyrmont, NSW First edition (Winterton, Lee, Glass, Thomson) Second edition (Winterton, Lee, Glass, Thomson, Gerangelos) Third edition (Gerangelos, Lee, Aroney, Evans, Murray, Emerton)

1999 2007 2013

National Library of Australia Cataloguing-in-Publication entry Winterton, George, 1946–2008, author. Winterton’s Australian federal constitutional law: commentary and materials / Peter A Gerangelos, Nicholas Aroney, Sarah Murray, Simon Evans, Patrick Emerton, Adrienne Stone. Fourth ed. ISBN: 9780455239729 (pbk.) Includes bibliography references and index. Constitutional law — Australia. Constitutional history--Australia. 342.94 © 2017 Thomson Reuters (Professional) Australia Limited This publication is copyright. Other than for the purposes of and subject to the conditions prescribed under the Copyright Act, no part of it may in any form or by any means (electronic, mechanical, microcopying, photocopying, recording or otherwise) be reproduced, stored in a retrieval system or transmitted without prior written permission. Inquiries should be addressed to the publishers. All legislative material herein is reproduced by permission but does not purport to be the official or authorised version. It is subject to Commonwealth of Australia copyright. The Copyright Act 1968 permits certain reproduction and publication of Commonwealth legislation. In particular, s 182A of the Act enables a complete copy to be made by or on behalf of a particular person. For reproduction or publication beyond that permitted by the Act, permission should be sought in writing. Requests should be submitted online at www.ag.gov.au/cca, faxed to (02) 6250 5989 or mailed to Commonwealth Copyright Administration, Attorney-General’s Department, Robert Garran Offices, National Circuit, Barton ACT 2600. Editor: Zoe Haynes Product Developer: Lucas Frederick Publisher: Robert Wilson Printed by Ligare Pty Ltd, Riverwood, NSW

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FOREWORD The Hon Stephen Gageler AC Justice of the High Court of Australia Constitutional law, Sir Robert Menzies remarked, is “a unique mixture of history, statutory interpretation, and some political philosophy” (Menzies, Afternoon Light (1967), p 320). The colonial statesmen who framed the Australian Constitution in the final decade of the 19th century were conversant in political philosophy and experienced in the practical workings of government. All of them had participated in responsible government in the form in which that institution had emerged in the Australian Colonies in the preceding four decades, and many of them had a well-informed appreciation of the successes and failures which had occurred over the same period within the federal systems of the United States and Canada. The Constitution of the “indissoluble Federal Commonwealth under the Crown” which they framed, and to which the Australian people agreed before it was enacted into law by the Imperial Parliament, was a considered blend of constitutional traditions, peculiarly adapted by Australians to Australian conditions. The Australian Constitution as it so emerged at the beginning of the 20th century was a blueprint for a system of national government which would afterwards develop its own distinctively Australian identity. The young Robert Garran, then secretary to the drafting committee of the Australasian National Convention, soon to become the first Secretary of Commonwealth Attorney-General’s Department and later to become the first Commonwealth Solicitor-General, wrote of it in The Coming Commonwealth (1897), p 185, that “the Constitution is much, it must not be supposed that it is everything”. He explained: It is, in itself, merely the means to an end; merely the dead mechanical framework of national unity. The life and soul of the union must be breathed into it by the people themselves. When a Constitution has been framed and adopted, the work of Australian union will have been begun, not finished. The nation will be a nation, not of clauses and sub-clauses, but of men and women; and the destiny of Australia will rest with the Australian people rather than with the Australian Constitution. The work now in hand – the making of a Constitution – is great and important; but it is the beginning not the end. To study Australian constitutional law in the 21st century is to study the history of our nation from its inception. It is to do so through the lens of the real controversies which have from time to time divided the nation or significant sections of the nation and which have fallen for ultimate resolution in real-time by the High Court, an institution which Sir Owen Dixon noted “has always administered the law as a living instrument and not as an abstract study” (Dixon, Jesting Pilate (2nd ed, 1997), p 254) and which has changed in its make-up and outlook as the make-up and outlook of the nation has changed. It is to recognise that the structure of our national government as that structure now appears cannot be found merely in the clauses and sub-clauses of the Constitution. Constitutional law is to be found also in the outcomes of numerous forensic contests over more than a century of social and economic change and is the product of the ideas of many minds – ideas that have been forged, honed, tested and sometimes abandoned in the course of those contests. Australian constitutional law, as the late George Winterton from whom this casebook takes its name well recognised, is a subject to which teaching by the case method is therefore particularly well adapted. According to the preface of the first edition, George Winterton’s aim, and that of his original co-authors HP Lee, Arthur Glass and James Thomson, was “to analyse judicial reasoning, probe the ambit of principle and note the relevant political context through substantial commentary, notes, questions and references to literature” in a book which “deliberately eschews any ideological perspective”. That aim has been maintained, and has been admirably realised, throughout successive editions of the book. The present edition, co-authored by Nicholas Aroney, Patrick Emerton, Simon Evans, Peter Gerangelos, Sarah Murray and Adrienne Stone, is no exception. v

Winterton’s Australian Federal Constitutional Law

This edition, the fourth, continues a tradition of open-ended academic inquiry and of academic excellence. Within topics chosen and arranged with evident regard for their practical importance and doctrinal unity, major themes are allowed to emerge though the cases themselves. Strengths and weaknesses of competing views are drawn out by the commentary and questions. Secondary references have been abstracted and are helpful, but have been kept to a strategic minimum. Primacy has appropriately been given to the primary sources. The changing authorship of Winteron’s Australian Federal Constitution Law, its changing content and its essential thematic unity through successive editions, are a metaphor for the subject-matter with which it deals, sensitively and thoroughly but without pretence of ever being able to do so definitively.

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PREFACE This book is intended primarily for teaching purposes. It therefore endeavours to cover the cases and materials in virtually any Australian Federal Constitutional Law course and Public Law course, without much excess. To this end, several additions and amendments have been made to the previous edition. This has been done by way of updating existing cases and materials more accurately to reflect the current state of the law. The book has also enhanced the restructure undertaken in the previous edition. The underlying philosophy of this book remains that of its original authors, the late George Winterton, HP Lee, Arthur Glass and James Thomson. As the original authors put it, this book aims: to cover the essential topics in some detail because in-depth analysis ensures greater insight into constitutional principle, judicial reasoning and overall assessment of the work of the High Court. The book deliberately eschews any ideological perspective. It seeks to analyse judicial reasoning, probe the ambit of principle and note the relevant political context through substantial commentary, notes, questions and references to literature. Although intended primarily for students, the work is addressed to a wider audience, especially in the commentary and notes, and in the extensive Bibliography, included to assist advanced students, scholars, judges, lawyers and other researchers. Since the last edition of this book, there have been some changes to the team of authors. Adrienne Stone has taken over the responsibility for Chapter 11 on Implied Rights and Freedoms from Emeritus Professor HP Lee (Monash University). Patrick Emerton has added Chapter 6 on External Affairs and Defence to his author responsibilities, also taking over from Professor Lee. The primary responsibility for the chapters in this book are therefore as follows: • Nicholas Aroney: Chapters 1, 12 and 14; • Patrick Emerton: Chapter 6 and the section on s 51(xxxi) in Chapter 10; • Simon Evans: Chapter 3; • Peter Gerangelos: Chapters 4, 5, 7, 9 and 13; • Peter Gerangelos and Sarah Murray: Chapter 2; • Sarah Murray: Chapters 8 and 10; • Adrienne Stone: Chapter 11. The authors wish to express their gratitude to Emeritus Professor HP Lee of Monash University for his very considerable efforts as an author of this book in its previous editions. Professor Lee was an original author with the late George Winterton, the Professor of Constitutional Law in the University of Sydney, and continued as one until the third edition. His considerable efforts in the establishment of this casebook, the excellence of his intellectual input into its substantive content, his influence in establishing its ethos of detailed examination of the cases and the law and its non-ideological perspective is hereby acknowledged. The present General Editor also acknowledges Professor Lee’s most considerable efforts in supporting the editorial work and general organisation of this work. His encouragement and support is deeply appreciated. Professor Winterton sadly passed away after the publication of the second edition. By way of acknowledgement of his inspiration for the development of this book, and his guiding influence over its underlying philosophy, method and rationale, as well as his very considerable efforts in its publication, the Winterton name continues to appear in the title of this work: Winterton’s Australian Federal Constitutional Law: Commentary and Materials. We would like to acknowledge also the very considerable efforts of those who provided us with research assistance in both the substantive text and the bibliography, in particular Sarah Bradbury and vii

Winterton’s Australian Federal Constitutional Law

Joshua Quinn-Watson. The General Editor would like to acknowledge in particular the extensive efforts of Sarah Bradbury who assisted in the editing of this book, further research assistance, literature review and overall general editorial support. He would also like to acknowledge the Dean of the University of Sydney Law School, Professor Joellen Riley, for her support, encouragement and forbearance while the final (very time-consuming) editing and completion of the work was being undertaken. We acknowledge the very considerable support and encouragement of Mrs Rosalind Winterton, Dr Peter Winterton and the Winterton Family, as well as that of each of our respective families. We are particularly indebted to Lucas Frederick of Thomson Reuters without whose encouragement, support, patience and guidance this fourth edition might not have been completed. We are also indebted to the editorial team at Thomson Reuters for their patient and efficient work to ensure a smooth completion. Their work, and the work of all persons at Thomson Reuters who assisted them, is much appreciated. We endorse Professor Gerald Gunther’s assessment, in the ninth edition of his excellent casebook, that “constitutional law is an important, serious, endlessly intriguing and constantly enjoyable subject”. If readers of this book find at least one of those adjectives apposite, our labours will not have been entirely in vain. PETER A GERANGELOS NICHOLAS T ARONEY SARAH MURRAY SIMON EVANS PATRICK EMERTON ADRIENNE STONE May 2017

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TABLE OF CONTENTS Foreword ............................................................................................................................................... v Preface ............................................................................................................................................ vii Table of Cases .................................................................................................................................. xi Table of Statutes .......................................................................................................................... xxxv

Part I: Introduction Chapter 1: Constitutional Fundamentals ................................................................ 3 Chapter 2: States ....................................................................................................... 69

Part II: The Executive Power of the Commonwealth Chapter 3: The Executive Power of the Commonwealth and the Executive Branch .................................................................................................. 189

Part III: The Legislative Power of the Commonwealth Chapter 4: Inconsistency ........................................................................................ 319 Chapter 5: Commerce and Corporations ............................................................. 369 Chapter 6: External Affairs and Defence ............................................................. 491 Chapter 7: Commonwealth Financial Powers ..................................................... 555 Chapter 8: Freedom of Interstate Commerce ..................................................... 653 Chapter 9: Excise Duties ......................................................................................... 695 Chapter 10: Express Rights and Freedoms .......................................................... 737 Chapter 11: Implications from Representative Government: Implied Rights and Freedoms ......................................................................... 825 Chapter 12: Intergovernmental Immunities ....................................................... 957

Part IV: The Judicial Power of the Commonwealth Chapter 13: The Separation of Judicial Power .................................................. 1049

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Part V: Constitutional Interpretation Chapter 14: Constitutional Interpretation ........................................................ 1191 Appendix A: Justices of the High Court of Australia (Indicating the line of succession) ........ 1285 Appendix B: Justices of the High Court of Australia (with biographical details) .................... 1287 Index ..................................................................... .................................................................. 1293

The bibliography for this book is available from the Thomson Reuters estore at: www.thomsonreuters.com.au.

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TABLE OF CASES [Where an extract from a case is reproduced, the paragraph number at which the extract appears is in bolded type.] A A v Hayden (1984) 156 CLR 532; [1984] HCA 67 ........................... 3.30, 3.80, 3.340, 3.370, 12.380 A-G (Ex rel Lumley) v TS Gill & Son P/L [1972] VLR 22 ........................................................... 13.370 AAP Case (1975) 134 CLR 338 ........................................................................... 3.290, 3.350, 3.370 ACT Revenue, Commissioner for v Kithock Pty Ltd (2000) 102 FCR 42 ....................................... 9.80 ACTV (1992) 177 CLR 106 ................................................................. 11.60, 11.180, 11.210, 11.300 AMS v AIF (1999) 199 CLR 160 ................................................................................................ 8.170 ANA Case (1945) 71 CLR 29 ....................................................................................................... 8.30 APLA Ltd v Legal Services Commissioner (NSW) (2005) 224 CLR 322; 79 ALJR 1620 ....... 4.80, 8.140, 8.170, 11.170, 11.300 Abebe v Commonwealth (1999) 197 CLR 510 ....................................................................... 13.290 Abitibi Power & Paper Co Ltd v Montreal Trust Co [1943] AC 536 ............................................ 6.210 Acton v Blundell (1843) 12 M & W 324 [152 ER 1223] ........................................................... 10.110 Actors and Announcers Equity Association v Fontana Films Pty Ltd (1982) 150 CLR 169 ......... 5.390, 5.410, 5.430, 7.150, 12.380, 13.140, 14.690, 14.700 Adams v United States; Ex rel McCann (317 US 269 ............................................................... 10.280 Adelaide Company of Jehovah’s Witnesses Inc v Commonwealth (1943) 67 CLR 116 .............. 6.210, 10.340, 10.370, 14.780 Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 ................................................. 2.670 Air Caledonie International v Commonwealth (1988) 165 CLR 462 .... 7.10, 7.30, 7.50, 7.60, 7.150, 7.160 Airlines of NSW Case (No 1) (1964) 113 CLR 1 ........................................................................... 4.30 Airlines of NSW Pty Ltd v New South Wales (No 2) (1965) 113 CLR 54 ............. 4.160, 4.240, 5.140, 5.160, 6.90, 6.110, 6.135, 6.140, 6.150 Airservices Australia v Canadian Airlines International Ltd (2000) 202 CLR 133 ...... 3.230, 7.40, 7.50, 7.80, 7.160 Airlines Case see Australian National Airways Pty Ltd v Commonwealth Akar v Attorney-General (Sierra Leone) [1970] AC 853 .............................................................. 4.350 Al-Kateb v Godwin (2004) 219 CLR 562 ............................. 3.150, 13.180, 13.190, 13.530, 14.580 Alberta Government Telephone v Canadian Radio-television and Telecommunications (1989) 61 DLR (4th) 193 ..................................................................................................... 12.50 Alcock v Chief Constable of South Yorkshire Police [1992] 1 AC 310 ....................................... 11.150 Alexander’s Case (1918) 25 CLR 434 ......................................................................... 13.140, 13.250 Alexandra Private Geriatric Hospital Pty Ltd v Commonwealth (1987) 162 CLR 271 ............... 14.740 Allders International Pty Ltd v Commissioner of State Revenue (Vic) (1996) 186 CLR 630 ........ 7.220, 7.230, 12.380 Allen v Flood [1898] AC 1 ....................................................................................................... 10.110 Alqudsi v The Queen (2016) 90 AJLR 711 ............................................................................... 10.290 Amalgamated Society of Engineers v Adelaide Steamship Co Ltd (1920) 28 CLR 129; [1920] HCA 54 .......... 1.130, 3.370, 4.30, 5.130, 5.460, 5.470, 5.550, 6.90, 6.110, 7.130, 7.230, 11.30, 11.210, 12.30, 12.120, 12.200, 12.290, 12.380, 14.30 Ambard v Attorney-General for Trinidad and Tobago [1936] AC 322 ...................................... 14.740 American Trucking Associations, Inc v Smith 496 US 167 (1990) .............................................. 9.140 Anderson’s Pty Ltd v Victoria (1964) 111 CLR 353 .................................................. 9.50, 9.80, 9.110 Andrews v Howell (1941) 65 CLR 255 ........................................................................... 6.110, 6.210 Andrus v Allard 444 US 51 ...................................................................................................... 10.120 Animal Defenders International v United Kingdom (2013) 57 EHRR 21 ................................... 11.180 Ansett Transport Industries (Operations) Pty Ltd v Commonwealth (1977) 139 CLR 54 ........... 3.370, 8.40, 13.320 Ansett Transport Industries (Operations) Pty Ltd v Wardley (1980) 142 CLR 237 .......... 4.170, 4.180, 4.240 Appeal Relating to the Jurisdiction of the ICAO Council [1972] ICJ Rep 46 ................................ 6.150 xi

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Arthur Reginald Perera v The King [1951] AC 482 .................................................................. 14.740 Arts Heritage and Environment, Minister for v Peko-Wallsend Ltd (1987) 15 FCR 274 ............... 3.210 Asiatic Steam Navigation Co Ltd v Commonwealth (1965) 96 CLR 397 ................................. 12.400 Assistant Commissioner Condon v Pompano Pty Ltd (2013) 252 CLR 38 ......... 2.690, 2.720, 13.440 Associated Dominions Assurance Case (1953) 89 CLR 78 ........................................................ 13.370 Association Ltd v Commonwealth (1993) 176 CLR 480 .......................................................... 10.120 Atlantic Smoke Shops Ltd v Conlon [1943] AC 550 .................................................................... 9.80 Attorney-General v De Keyser’s Royal Hotel Ltd [1920] AC 508 .......................... 3.120, 3.130, 3.150 Attorney-General v Jonathan Cape Ltd; Attorney-General v Times Newspapers [1976] QB 752 ...................................................................................................................................... 3.210 Attorney-General v Stewart (1817) 2 Mer 143; 35 ER 895 ...................................................... 14.530 Attorney-General v Times Newspapers ([1974] AC 273 ............................................................. 11.30 Attorney-General v Wilts United Dairies Ltd (1920) 37 TLR 884 ....................................... 3.30, 3.280 Attorney-General (Alberta) v Attorney-General (Canada) (1939) AC 117 ................................... 7.290 Attorney-General (British Columbia) v Kingcome Navigation Company (1934) AC 45 ................ 9.60 Attorney-General (Canada) v Cain (1906) AC 542 ......................................................... 3.120, 3.150 Attorney-General (Canada) v Lavell [1974] SCR 1349 ............................................................... 2.260 Attorney-General (Cth) v Alinta Ltd (2008) 233 CLR 542 .......................................................... 13.70 Attorney-General (Cth) v Breckler (1999) 197 CLR 83 .............................................................. 13.50 Attorney-General (Cth) v Colonial Sugar Refining Co Ltd (1913) 17 CLR 644; [1914] AC 237 .... 3.370, 12.120 Attorney-General (Cth) v Schmidt (1961) 105 CLR 361 .................................... 5.460, 10.50, 13.290 Attorney-General (Cth) v The Queen (The Boilermakers’ Case) (1957) 95 CLR 529; [1957] AC 288 ................................................................................................................ 13.260, 13.320 Attorney-General (Cth); Ex rel McKinlay v Commonwealth (1975) 135 CLR 1 .............. 11.30, 11.60, 11.180, 11.200, 11.210, 11.230, 11.250, 10.320, 14.550, 14.560 Attorney-General (NSW) v Brewery Employees Union of NSW (Union Label Case) (1908) 6 CLR 469 ........................................................................................ 10.120, 12.80, 14.630, 14.640 Attorney-General (NSW) v Butterworth & Co (Aust) Ltd (1938) 38 SR (NSW) 195 .................... 3.140 Attorney-General (NSW) v Collector of Customs (Steel Rails Case) (1908) 5 CLR 818 ............. 12.110 Attorney-General (NSW) v Homebush Flour Mills Ltd (1937) 56 CLR 390 ............ 7.60, 7.120, 7.360, 9.120 Attorney-General (NSW) v Trethowan (1931) 44 CLR 394 ......... 2.180, 2.210, 2.220, 2.230, 2.330, 2.360, 7.10 Attorney-General (NSW) v Williams (1913) 13 SR (NSW) 295 ................................................... 3.210 Attorney-General (NT) v Chaffey (2007) 231 CLR 651 ................................................. 10.90, 10.110 Attorney-General (NT) v Emmerson (2014) 253 CLR 393 .............................. 2.570, 10.150, 13.450 Attorney-General (NT) v Minister for Aboriginal Affairs (1989) 90 ALR 59 .................................... 4.10 Attorney-General (Ontario) v Attorney-General (Canada) [1912] AC 571 ................................ 12.120 Attorney-General (Qld) v Attorney-General (Cth) (1915) 20 CLR 148 .......................... 7.290, 12.120 Attorney-General (Qld) v Fardon [2003] QCA 416 .................................................................... 2.560 Attorney-General (Qld) v Lawrence [2013] QCA 364 ................................................................ 2.720 Attorney-General (Quebec) v Queen Insurance Co (1878) 3 App Cas 1090 ............................ 14.710 Attorney-General (SA) v Corporation of the City of Adelaide (2013) 87 ALJR 289; 295 ALR 197; [2013] HCA 3 ................................................................................................ 10.150, 11.300 Attorney-General (Vic) v Commonwealth (1962) 107 CLR 529 ............................................... 14.700 Attorney-General (Vic) v Commonwealth (1935) 52 CLR 533 ................................................... 6.210 Attorney-General (Vic) v Commonwealth (1945) 71 CLR 237 ........................... 3.290, 3.370, 12.380 Attorney-General (Vic) (Ex rel Black) v Commonwealth (The DOGS Case) (1981) 146 CLR 559 ............................................... 7.330, 7.390, 7.400, 10.250, 10.300, 10.320, 11.30, 11.210 Attorney-General (Vic); Ex rel Dale v Commonwealth (Pharmaceutical Benefits Case) (1945) 71 CLR 237 ......................................................................................... 3.310, 3.320, 3.370, 3.400 Attorney-General (Vic) v The Commonwealth (1935) 52 CLR 533; [1935] HCA 31 ..................... 3.30 Attorney-General (WA) v Australian National Airlines Commission (Western Australian Airlines Case) (1976) 138 CLR 492 ...................................................... 5.50, 5.160, 5.170, 5.560, 14.740 Attorney-General (WA) v Marquet (2003) 217 CLR 545 ................................... 2.290, 2.330, 13.190 Auckland Harbour Board v The King [1924] AC 318 ...................................................... 3.280, 3.300 Austin v Commonwealth (2003) 215 CLR 185 ................ 5.460, 5.470, 7.210, 7.220, 7.230, 12.190, 12.260 Austin v Michigan Chamber of Commerce 494 US 652 .......................................................... 11.180 xii

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Australia v Canadian Airlines International Ltd (1999) 202 CLR 133 ........................................ 10.150 Australian Agricultural Co v Federated Engine-Drivers and Firemen’s Association of Australasia (1913) 17 CLR 261 ........................................................................................... 11.210 Australian Boot Trade Employees’ Federation v Whybrow and Co (1910) 11 CLR 311 ............. 14.740 Australian Broadcasting Commission v Industrial Court (SA) (1977) 138 CLR 399 .................... 4.220 Australian Building Construction Employees’ and Builders Labourers’ Federation v Commonwealth (1986) 161 CLR 88 ....................................................... 13.430, 13.510, 13.520 Australian Capital Television Pty Ltd v Commonwealth (1992) 177 CLR 106 ..... 1.210, 1.470, 8.160, 11.20, 11.30, 11.40, 11.60, 11.110, 11.130, 11.150, 11.180, 11.210, 11.280, 11.300, 12.210, 12.380, 13.290, 14.60, 14.180, 14.190, 14.570, 14.750, 14.780 Australian Communications and Media Authority v Today FM (Sydney) Pty Ltd (2015) 255 CLR 352 .............................................................................................................................. 13.80 Australian Communist Party v Commonwealth (1951) 83 CLR 1 ........... 1.360, 1.410, 3.100, 3.120, 3.210, 3.320, 5.390, 6.50, 6.210, 6.220, 6.230, 13.190, 2.330, 13.370, 14.400, 14.720 Australian Competition and Consumer Commission v Baxter Healthcare Pty Ltd (2007) 232 CLR 1 .................................................................................................................................. 3.100 Australian Conservation Foundation Inc v Commonwealth of Australia (1980) 28 ALR 257 ..... 10.320 Australian Consolidated Press Ltd v Uren (1966) 117 CLR 185 .................................................. 11.30 Australian Education Union v General Manager of Fair Work Australia (2012) 246 CLR 117; 286 ALR 625 ........................................................................................................ 13.450, 13.510 Australian Education Union, Re; Ex parte Victoria (1995) 184 CLR 188 ......... 7.210, 12.130, 12.220, 12.240, 12.380 Australian Insurance Staffs’ Federation v The Accident Underwriters’ Association (1923) 33 CLR 517 ............................................................................................................................. 14.620 Australian Mutual Provident Society v Goulden (1986) 160 CLR 330 ....................................... 4.270 Australian National Airways Pty Ltd v Commonwealth (1945) 71 CLR 29 .............. 5.40, 5.80, 5.160, 5.460, 5.550, 6.90, 8.20, 11.30, 11.60, 11.210 Australian National Airways Pty Ltd v Commonwealth (No 2) (1945) 71 CLR 115 ..................... 5.360 Australian Postal Commission v Dao (1985) 3 NSWLR 565 ..................................................... 12.380 Australian Railways Union v Victorian Railways Commissioners (1930) 44 CLR 319 ................ 12.170, 12.260, 12.280 Australian Tape Manufacturers Association Ltd v Commonwealth (1993) 176 CLR 480 .... 7.10, 7.60, 7.80, 7.160, 10.120, 10.130, 10.140, 10.170 Australian Textiles Pty Ltd v Commonwealth (1945) 71 CLR 161 .............................................. 6.110 Australian Woollen Mills Pty Ltd v Commonwealth [(1954) 92 CLR 424; [1954] HCA 20 ........... 3.370

B BHP Billiton v Schultz (2004) 221 CLR 400 ............................................................................... 2.490 Bailey v Drexel Furniture Co (1922) 259 US 20 ......................................................................... 7.130 Baker v Carr [1962] USSC 48; 369 US 186 (7 Law Ed 2d 663) (1962) ..................................... 14.560 Baker v The Queen (2004) 223 CLR 513; 78 ALJR 1483 .............. 2.570, 2.590, 2.640, 5.460, 13.450 Baldwin 436 US 371 (1978) ................................................................................................... 10.440 Bank Mellat v HM Treasury (No 2) [2014] AC 700 .................................................................. 11.180 Bank Mellat [2013] UKSC 39 .................................................................................................. 11.170 Bank Nationalisation Case see Commonwealth v Bank of New South Wales ....................................... Bank of NSW v Commonwealth (1948) 76 CLR 1 ........ 3.40, 3.50, 5.60, 5.340, 5.390, 5.430, 5.460, 5.520, 5.550, 6.90, 6.110, 7.130, 7.400, 8.10, 8.30, 10.50, 10.70, 10.80, 10.120, 10.140, 10.150, 11.30, 12.190, 12.220, 14.740, 14.780 Barcelo v Electrolytic Zinc Co of Australasia Ltd (1932) 48 CLR 391 .......................................... 2.460 Barcelona Traction Case [1970] ICJR 3 ........................................................................................ 6.90 Bardolph (1934) 52 CLR 455 ......................................................................................... 3.370, 3.380 Barley Marketing Board (NSW) v Norman (1990) 171 CLR 182 ..................................... 8.100, 9.120 Barton v Commonwealth (1974) 131 CLR 477 .................. 3.30, 3.120, 3.140, 3.340, 3.150, 12.380 Bartter’s Farms Pty Ltd v Todd (1978) 139 CLR 499 .................................................................... 8.40 Bass v Permanent Trustee Co Ltd (1999) 198 CLR 334 ................................................ 3.100, 13.540 Bath v Alston Holdings Pty Ltd (1988) 165 CLR 411 .................................... 8.50, 8.60, 8.100, 9.120 Baxter v Ah Way (1909) 8 CLR 626 ................................................................... 3.440, 13.10, 13.290 Baxter v Commissioners of Taxation (NSW) (1907) 4 CLR 1087 .......... 1.130, 3.150, 12.110, 13.110, 14.60 xiii

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Bayside City Council v Telstra Corporation Ltd (2004) 216 CLR 595 ............... 4.430, 12.190, 12.270 Beal v Marrickville Margarine Pty Ltd (1966) 114 CLR 283 ............................................... 5.180, 8.40 Behrooz v Department of Immigration (2004) 219 CLR 486 ................................................... 13.200 Bell v Stewart; R v Fletcher; Ex parte Kisch (1935) 52 CLR 248 ................................................ 14.740 Bell Group NV (in liq) v Western Australia (2016) 331 ALR 408 ................................................. 4.440 Benne v Commonwealth (2007) 231 CLR 91 .......................................................................... 11.230 Bennett v President, Human Rights and Equal Opportunity Commission (2003) 134 FCR 334 ...................................................................................................................................... 3.180 Betfair Pty Ltd v Racing New South Wales (2012) 249 CLR 217 .................................... 8.140, 8.150 Betfair Pty Ltd v Western Australia (2008) 234 CLR 418 .................................. 8.120, 11.150, 11.300 Bienke v Minister for Primary Industries and Energy (1996) 63 FCR 567 ................................. 10.120 Birmingham City Council v Equal Opportunities Commission ([1989] AC 1155 ...................... 10.440 Bivens v Six Unknown Named Agents of Federal Bureau of Narcotics 403 US 388 (1971) ....... 11.110 Blackley v Devondale Cream (Vic) Pty Ltd (1968) 117 CLR 253 ...................................... 4.240, 4.430 Boilermakers’ Case (HC) see R v Kirby; Ex Parte Boilermakers’ Society of Australia .............................. Boilermakers’ Case (PC) see Attorney-General (Cth) v The Queen ...................................................... Bolton v Madsen (1963) 110 CLR 264 ......................................................... 9.80, 9.90, 9.120, 9.130 Bolton, Re; Ex parte Beane (1987) 162 CLR 514 ............................................... 3.150, 11.30, 11.130 Bonser v La Macchia (1969) 122 CLR 177 ................................................................................ 2.480 Booth v Williams (1909) 9 SR (NSW) 421 ................................................................................. 3.120 Boral Besser Masonry Ltd v Australian Competition and Consumer Commission (2003) 215 CLR 473 ............................................................................................................................... 8.120 Botany Municipal Council v Federal Airports Corporation (1992) 175 CLR 453 ............ 4.290, 4.320, 4.360 Bourke v State Bank of NSW (1990) 170 CLR 276 ....................................................... 5.460, 13.290 Bradken Consolidated Ltd v Broken Hill Proprietary Co Ltd (1979) 145 CLR 107 .......... 3.100, 12.30, 12.40, 12.380 Bradley v Commonwealth (1973) 128 CLR 557 ........................................................................ 3.120 Brandy v Human Rights and Equal Opportunity Commission (1995) 183 CLR 245 ....... 13.30, 13.40 Breavington v Godleman (1988) 169 CLR 41 .................................................................. 4.10, 5.550 Brewery Labels Case (Attorney-General (NSW) (Ex rel Tooth & Co Ltd) v Brewery Employees’ Union of NSW (1908) 6 CLR 469 ....................................................................... 11.30 Bribery Commissioner v Ranasinghe [1965] AC 172 ................................ 2.260, 2.330, 2.340, 2.400 Bridges v California 314 US 252 ............................................................................................. 14.740 British American Tobacco Australia Ltd v Western Australia (2003) 200 ALR 403; 77 ALJR 1566 ....................................................................................................................... 3.100, 11.110 British Broadcasting Corporation v Jones [1965] Ch 32 .................................................. 3.120, 3.110 British Imperial Oil Co Ltd v Federal Commissioner of Taxation (1925) 35 CLR 422 ................ 13.250 British Medical Association v Commonwealth (1949) 79 CLR 201; [1949] HCA 44 .... 10.120, 14.740 British Steel v Granada Television [1981] AC 1096 .................................................................... 11.60 Broken Hill South Ltd v Commissioner of Taxation (NSW) (1937) 56 CLR 337 ...... 2.450, 2.460, 4.10 Bropho v Western Australia (1990) 171 CLR 1 ............................ 3.90, 3.100, 11.130, 12.50, 12.380 Brown v Lizars (1905) 2 CLR 837 .............................................................................................. 3.120 Brown v The Queen (1986) 160 CLR 171 ...................................................... 10.270, 10.280, 11.30 Brown v West (1990) 169 CLR 195; [1990] HCA 7 ..................................... 3.30, 3.280, 3.290, 3.370 Brownlee v The Queen (2001) 207 CLR 278 ........................................................................... 10.290 Brownlee v The Queen (1997) 41 NSWLR 139 ....................................................................... 10.290 Browns Transport Pty Ltd v Kropp (1958) 100 CLR 117 .......................................... 7.30, 7.60, 9.120 Buchanan v Commonwealth (1913) 16 CLR 315 ............................................................. 7.10, 11.30 Buck v Bavone (1976) 135 CLR 110 .................................................................... 8.30, 8.180, 11.210 Buckley v Valeo 424 US 1 ................................................................................ 11.30, 11.180, 11.300 Builders’ Labourers’ Case (1914) 18 CLR 224 ......................................................................... 13.240 Builders Labourers’ Case (1957) 100 CLR 277 ........................................................................ 13.370 Builders Labourers’ Federation Case (1982) 152 CLR 25 ......................................................... 12.190 Building Construction Employees & Builders’ Labourers Federation (NSW) v Minister for Industrial Relations (1986) 7 NSWLR 372 ..................................................... 2.500, 2.520, 13.490 Bunning v Cross (1978) 141 CLR 54 ....................................................................................... 13.470 Burma Oil Co (Burma Trading) Ltd v Lord Advocate [1965] AC 75 ............................................ 3.120 Burns v Ransley (1949) 79 CLR 101 .................................................................... 3.120, 3.320, 6.210 Burton v Honan (1952) 86 CLR 169 ................................................ 10.140, 14.780, 13.290, 14.740 xiv

Table of Cases

Butler v Attorney-General (Vic) (1961) 106 CLR 268 ........................................... 4.310, 4.350, 4.450 Butts v O’Dwyer (1952) 87 CLR 267 ....................................................................................... 13.370

C CBS Songs Ltd v Amstrad Consumer Electronics Plc [1988] AC 1013 .......................................... 7.60 CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 .................................. 13.370 CPCF v Minister for Immigration and Border Protection [2015] HCA 1; (2015) 255 CLR 514 .... 3.110, 3.150, 13.200 Cadia Holdings Pty Ltd v New South Wales (2010) 242 CLR 195; [2010] HCA 27 ........... 3.30, 3.110, 3.140, 3.150 Cain v Doyle (1946) 72 CLR 409 ............................................................................................ 12.380 Cain [1906] AC 542 .................................................................................................................. 3.150 Calder v Bull 3 US (3 Dall) 386 (1798) .......................................................... 13.130, 13.150, 13.410 Cam & Sons Pty Ltd v Chief Secretary (NSW) (1951) 84 CLR 442 ............................................. 8.100 Cameron v Deputy Federal Commissioner of Taxation (1923) 32 CLR 68 ...................... 7.190, 7.240 Cameron v The Queen (2002) 209 CLR 339 .............................................................. 13.530, 13.540 Caminetti v United States 242 US 470; 61 Law Ed 442 (1917) ................................................... 5.40 Campomar Sociedad Limitada v Nike International Ltd (2000) 202 CLR 45 ............................ 10.120 Canadian Broadcasting Corporation v Attorney-General for Ontario [1959] SCR 188 ................ 12.50 Cantwell v Connecticut (1940) 310 US 296 ............................................................................ 11.130 Capital Duplicators Pty Ltd v Australian Capital Territory (No 1) (1992) 177 CLR 248 ..... 5.520, 9.10, 9.110, 9.120 Capital Duplicators Pty Ltd v Australian Capital Territory (No 2) (1993) 178 CLR 561 ....... 9.10, 9.70, 9.120, 9.130, 9.140 Capital TV & Appliances Pty Ltd v Falconer (1971) 125 CLR 591 ............................................... 11.30 Capital Television Case (1992) 177 CLR 106 ........................................................................... 12.210 Carr v Western Australia (2007) 232 CLR 138 ........................................................................... 3.370 Carter v Carter Coal Co (1936) 298 US 238 [80 Law Ed 1160] ................................................. 7.130 Carter v Egg and Egg Pulp Marketing Board (Vic) (1942) 66 CLR 557 ............................ 4.310, 4.350 Castlemaine Tooheys Ltd v South Australia (1990) 169 CLR 436 ..... 7.210, 8.70, 8.80, 8.100, 9.120, 11.180, 11.270, 11.300, 14.740 Chaplin v Commissioner of State Taxation (SA) (1911) 12 CLR 375 ........................... 12.110, 12.400 Chaplinsky v New Hampshire (1942) 315 US 568 .................................................................. 11.130 Chapman v Luminis Pty Ltd (No 4) (2001) 123 FCR 62 .......................................................... 10.110 Charles Marshall Pty Ltd v Collins ((1957) 96 CLR 1; [1957] AC 274 ......................................... 4.170 Chasemore v Richards (1859) 7 HLC 349 [11 ER 140] ............................................................. 10.110 Cheatle v The Queen (1993) 177 CLR 541 ................................................................ 10.290, 11.210 Cheng v The Queen (2000) 203 CLR 248 .................................................................... 5.460, 14.420 Cherokee Nation v US 270 US 476 (1926) ............................................................................. 13.520 Chu Kheng Lim v Minister for Immigration (1992) 176 CLR 1 ....... 3.20, 3.120, 3.150, 3.155, 6.150, 13.130, 13.160, 13.170, 13.180, 13.190, 13.200, 13.390, 13.450, 13.470, 13.510 Chu Shao Hung v The Queen (1953) 87 CLR 575 ..................................................... 13.170, 13.190 Church of Scientology Inc v Woodward (1982) 154 CLR 25 ..................................................... 1.360 Church of the New Faith v Commissioner of Pay-roll Tax (Vic) (1983) 154 CLR 120 .............. 10.380 Citizens United v Federal Election Commission 558 US 310 .................................................... 11.180 Clark King v Australian Wheat Board (1978) 140 CLR 120 ................................................. 8.30, 8.40 Clarke v Commissioner of Taxation (2009) 240 CLR 272 ........................................................ 12.270 Clarke v Kerr (1955) 94 CLR 489 .............................................................................................. 4.170 Clayton v Heffron (1960) 105 CLR 214 ......................................................................... 2.280, 2.410 Clough v Leahy (1904) 2 CLR 139 ................................................................................... 3.30, 3.370 Clunies-Ross v Commonwealth (1984) 155 CLR 193 ................................................... 7.400, 10.140 Clyde Engineering Co Ltd v Cowburn (1926) 37 CLR 466 ................................... 4.90, 4.130, 4.140 Clyne v East (1967) 68 SR (NSW) 385 ......................................................................... 2.500, 13.520 Coastace Pty Ltd v New South Wales (1989) 167 CLR 503 ............................................. 9.120, 9.130 Cobb & Co Ltd v Kropp [1967] 1 AC 141 ........................................................... 2.380, 2.430, 2.460 Coco v The Queen (1994) 179 CLR 427 .................................................................... 11.130, 13.190 Coe v Commonwealth (1993) 68 ALJR 110 ............................................................................... 1.520 Cohen v California (1971) 403 US 15 ..................................................................................... 11.130 Colbeam Palmer Ltd v Stock Affiliates Pty Ltd (1968) 122 CLR 25; [1968] HCA 50 .................. 10.120 xv

Winterton’s Australian Federal Constitutional Law

Cole v Whitfield (1988) 165 CLR 360 ..... 5.290, 5.460, 8.10, 8.40, 8.80, 8.100, 9.120, 9.130, 14.70 Coleman v Power (2004) 220 CLR 1 ........... 11.80, 11.110, 11.130, 11.150, 11.180, 11.230, 11.300 Collector v Day 78 US (11 Wall) 113 (1870) ............................................................................ 12.110 Collector of Customs (NSW) v Brian Lawlor Automotive Pty Ltd (1979) 41 FLR 338; 24 ALR 307; 2 ALD 1 ..................................................................................................................... 13.320 Collingwood, City of v State of Victoria (No 2) [1994] 1 VR 652 ............................................... 2.500 Collins v Charles Marshall Pty Ltd (1955) 92 CLR 529 ............................ 4.170, 4.310, 4.380, 13.250 Colonial Sugar Refining [1903] St R Qd 261 ............................................................................. 7.230 Colonial Sugar Refining Co Ltd v (1912) 15 CLR 182; [1912] HCA 94 ....................................... 3.370 Colonial Sugar Refining Co Ltd v Irving [1906] AC 360 ............................................................. 7.210 Colvin v Bradley Brothers Pty Ltd (1943) 68 CLR 151 ........................................ 4.100, 4.200, 4.240 The Comalco Case see Commonwealth Aluminium Corporation Ltd v Attorney-General (Qld) ............................................................................................................................................ Combet v Commonwealth (2005) 224 CLR 494 ..... 3.270, 3.280, 3.290, 3.300, 3.350, 5.460, 7.10 Cominos v Cominos (1972) 127 CLR 588 ............................................................................... 13.370 Commercial Cable Co v Newfoundland Government [[1916] 2 AC 610] .................................. 3.370 Commercial Radio Coffs Harbour Ltd v Fuller (1986) 61 CLR 47 .................................. 4.160, 11.110 Commonwealth v Australian Capital Territory (Same-Sex Marriage Case) (2013) 250 CLR 441 .................................................................................................................................... 14.640 Commonwealth v Australian Commonwealth Shipping Board (1926) 39 CLR 1 ............ 3.320, 3.370 Commonwealth v Bank of NSW (Banking Nationalisation Case) (1949) 79 CLR 497; [1950] AC 235 ............................................................................................................. 5.60, 8.120, 8.20 Commonwealth v Bogle (1953) 89 CLR 229 ............................................... 12.320, 12.360, 12.380 Commonwealth v Cigamatic Pty Ltd (in liq) (1962) 108 CLR 372 ......... 3.340, 4.30, 10.250, 11.210, 12.130, 12.170, 12.320, 12.330 , 12.340, 12.380 Commonwealth v Colonial Ammunition Co Ltd (1924) 34 CLR 198; [1924] HCA 5 .................. 3.370 Commonwealth v Colonial Combing, Spinning and Weaving Co (1922) 31 CLR 421 ..... 3.30, 3.320, 3.340, 3.370, 3.440, 12.380 Commonwealth v Evans Deakin Industries Ltd (1986) 161 CLR 254 .......................... 12.380, 12.400 Commonwealth v Grunseit (1943) 67 CLR 58 ........................................................................ 13.370 Commonwealth v Hospital Contribution Fund of Australia (1982) 150 CLR 49 .......... 13.100, 13.110 Commonwealth v Huon Transport (1945) 70 CLR 293 ........................................................... 10.130 Commonwealth v John Fairfax & Sons Ltd (1980) 147 CLR 39; [1980] HCA 44 ............. 3.210, 3.370 Commonwealth v Kreglinger & Fernau Ltd and Bardsley (1926) 37 CLR 393 ............... 11.30, 14.400 Commonwealth v Limerick Steamship Co Ltd and Kidman (1924) 35 CLR 69 .......................... 2.510 Commonwealth v Mewett (1997) 191 CLR 471 ............................................................ 3.100, 3.370 Commonwealth v New South Wales (1923) 33 CLR 1 ............................................... 10.140, 11.130 Commonwealth v Newcrest Mining (WA) Ltd (1995) 58 FCR 167 .............................................. 4.10 Commonwealth v Northern Land Council (1991) 30 FCR 1 ..................................................... 3.210 Commonwealth v Northern Land Council (1993) 176 CLR 604 ..................................... 3.190, 3.220 Commonwealth v Queensland (1975) 134 CLR 298 ...................................................... 2.510, 2.560 Commonwealth v Tasmania (Tasmanian Dam Case) (1983) 158 CLR 1 ............. 3.370, 5.250, 5.410, 5.430, 5.460, 5.470, 5.510, 6.10, 6.60, 6.110, 6.135, 6.140, 6.150, 7.180, 8.80, 10.80, 10.90, 10.110, 10.120, 10.140, 10.150, 10.440, 11.320, 12.130, 12.190, 12.210, 12.220, 12.380, 14.740, 14.780 Commonwealth v WMC Resources Ltd (1998) 194 CLR 1 ................. 5.460, 10.110, 10.120, 10.190 Commonwealth v Western Australia (1999) 196 CLR 392; [1999] HCA 5 ......................... 3.50, 3.340 Commonwealth v Zachariassen 27 CLR .................................................................................. 12.120 Commonwealth & COR Ltd v South Australia (1926) 38 CLR 408 ..................................... 9.10, 9.50 Commonwealth & the Central Wool Committee v Colonial Combing, Spinning & Weaving Co Ltd (1922) 31 CLR 421 ........................................................................................ 3.120, 3.270 Commonwealth Aluminium Corporation Ltd v Attorney-General (Qld) [1976] Qd R 231 .......... 2.380 Commonwealth and Commonwealth Oil Refineries Ltd v South Australia (1926) 38 CLR 408 .... 9.60, 9.90, 9.120 Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Queensland Rail (2015) 256 CLR 171 .......................... 5.510, 5.520 Communist Party Case (1951) 83 CLR 1 ................................................................................. 13.190 Concrete Pipes Case (1971) 124 CLR 468 ................................................................................. 5.460 Connelly v Director of Public Prosecutions [1964] AC 1254 .................................................... 13.470 Conroy v Carter (1968) 118 CLR 90 ......................................................................................... 7.210 xvi

Table of Cases

Cooney v Ku-ring-gai Corporation ((1963) 114 CLR 582) ....................................................... 13.370 Cooper v Stuart (1889) 14 App Cas 286 ........................................................................ 2.20, 14.530 Cormack v Cope (1974) 131 CLR 432 ........................................................................................ 7.10 Covington & Cincinnati Bridge Co v Kentucky 154 US 204; 38 Law Ed 962 (1893) .................... 5.40 Cowburn’s Case : (1926) 37 CLR 466 ......................................................................................... 4.30 Cram, Re; Ex parte NSW Colliery Proprietors’ Association Ltd (1987) 163 CLR 117 ..... 3.190, 12.380, 13.60, 13.290 Cram, Re; Ex parte Newcastle Wallsend Coal Co Pty Ltd (1987) 163 CLR 140 ........................... 13.40 Crane v Frohmiller 45 P 2d 955 ................................................................................................ 3.300 Croft v Dunphy [1933] AC 156 ................................................................................................. 2.460 Croome v Tasmania (1997) 191 CLR 119 ................................................................................. 4.430 Croome v Tasmania [1997] HCA 5; (1997) 191 CLR 119 ................................................. 3.420, 4.20 Crouch v Commissioner for Railways (Q) (1985) 159 CLR 22 ..................................................... 3.50 Crowe v Commonwealth (1935) 54 CLR 69 .................................................................. 7.180, 7.190 Crump v NSW (2012) 86 ALJR 623; 286 ALR 658 ................................................................... 13.520 Cunliffe v Commonwealth (1994) 182 CLR 272 ............... 5.420, 5.460, 6.150, 8.170, 8.180, 11.60, 11.100, 10.150, 11.180, 11.280, 11.300, 14.750, 14.780 Cunningham v Commonwealth (2016) 90 ALJR 1138; [2016] HCA 39 ................................... 10.190 Curran v Federal Commissioner of Taxation ((1974) 131 CLR 409) ......................................... 10.440

D The DOGS case see Attorney-General (Vic); Ex rel Black v Commonwealth ......................................... D’Emden v Pedder (1904) 1 CLR 91 ............... 5.100, 5.160, 5.230, 12.120, 12.110, 12.120, 12.380 Dalziel (1944) 68 CLR ............................................................................................................. 10.140 Damjanovic & Sons Pty Ltd v Commonwealth (1967) 117 CLR 390 .............................. 8.40, 11.210 Daniel v Paul 395 US 298 (1969) ................................................................................... 5.300, 5.310 Daniell (1920) 28 CLR 23 ......................................................................................................... 4.240 Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission (2002) 213 CLR 543 ...................................................................................... 11.130 Dao v Australian Postal Commission (1987) 162 CLR 317 ..................................... 4.30, 4.230, 4.430 Davies v Davies (1919) 26 CLR 348 ........................................................................................ 10.280 Davies and Jones v Western Australia (1904) 2 CLR 29 .................................. 10.400, 10.410, 10.440 Davis v Commonwealth (1988) 166 CLR 79; [1988] HCA 63 ........... 3.303.120, 3.150, 3.330, 3.340, 3.350, 3.370, 11.40, 11.280, 14.740 Dawson v Commonwealth (1946) 73 CLR 157 ................................................................ 5.80, 6.210 De Keyser’s Royal Hotel Ltd, In re; De Keyser’s Royal Hotel Ltd v The King [1919] 2 Ch 197 ..... 3.150 De L v Director-General, NSW Department of Community Services (1996) 187 CLR 640 ............ 6.50 Delohery v Permanent Trustee Co of NSW (1904) 1 CLR ........................................................ 14.530 Dempster v National Companies & Securities Commission (1993) 9 WAR 215 ........................... 4.10 Dennis Hotels Pty Ltd v Victoria (1960) 104 CLR 529 ................ 7.60, 9.10, 9.50, 9.60, 9.120, 9.130 Deputy Federal Commissioner of Taxation v Truhold Benefit Pty Ltd (1985) 158 CLR 678 ......... 7.30, 7.170 Deputy Federal Commissioner of Taxation (NSW) v W R Moran Pty Ltd (1939) 61 CLR 735 .... 7.220, 7.290, 7.310, 7.360, 13.290 Devondale Cream (1968) 117 CLR 253 .................................................................................... 4.430 Dickenson’s Arcade Pty Ltd v Tasmania (1974) 130 CLR 177 ................................ 9.70, 9.120, 9.130 Dickson v The Queen (2010) 241 CLR 491 ............................................. 4.380, 4.420, 4.430, 4.440 Dietrich v The Queen (1992) 177 CLR 292 ............................................................................. 13.530 Dignan’s Case see Victorian Stevedoring & General Contracting Co Pty Ltd and Meakes v Dignan ......................................................................................................................................... Dingjan, Re; Ex parte Wagner (1995) 183 CLR 323 ..... 5.420, 5.430, 5.460, 10.230, 14.680, 14.780 Director of Public Prosecutions, Re; Ex parte Lawler (1994) 179 CLR 270 ...... 5.460, 10.150, 10.160, 10.170 Ditfort, Re; Ex parte Deputy Commissioner of Taxation (1988) 19 FCR 347 .............................. 3.120 Dixon v Attorney-General (British Columbia) (1989) 59 DLR (4th) 247 .......................... 3.50, 11.210 Dixon v London Small Arms Co (1876) 1 App Cas 632 ............................................................... 3.50 Dohnert Muller Schmidt & Co, Re; Attorney-General (Cth) v Schmidt (1961) 105 CLR ........... 10.170 Dothard v Rawlinson 433 US 321 (1977) ............................................................................... 10.440 Drake v Minister for Immigration and Ethnic Affairs (1979) 46 FLR 409 ................................... 13.320 xvii

Winterton’s Australian Federal Constitutional Law

Dred Scott v Sandford 60 US 393 (1856) ............................................................................... 13.190 Drivers v Road Carriers [1982] 1 NZLR 374 ................................................................................. 2.50 Dugan v Mirror Newspapers Ltd (1978) 142 CLR 583 ............................................... 11.320, 14.530 Duncan v Independent Commission Against Corruption (2015) 256 CLR 83 ............ 13.440, 13.450 Duncan v Louisiana 391 US 145 ............................................................................................. 10.280 Duncan v New South Wales (2015) CLR 388 .......................................................................... 13.150 Duncan v Queensland (1916) 22 CLR 556 ............................................................ 8.20, 8.40, 13.290 Duncan v Theodore (1917) 23 CLR 510 ................................................................................... 6.210 Durham Holdings Pty Ltd v New South Wales (2001) 205 CLR 399 ............................................ 2.55

E E v Australian Red Cross Society (1991) 27 FCR 310 ................................................................. 5.510 Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337 .................................................... 13.540 Edwards v Clinch [1982] AC 845 ............................................................................................ 10.360 Egan v Chadwick (1999) 46 NSWLR 563 .................................................................................. 3.200 Egan v Willis (1998) 195 CLR 424 ............................ 1.210, 3.10, 3.180, 3.190, 3.270, 3.370, 5.460 Egan (1996) 40 NSWLR 650 ..................................................................................................... 3.190 Ellen Street Estates Ltd v Minister of Health [1934] 1 KB 590 .................................................... 2.260 Elliott v Commonwealth (1936) 54 CLR 657 ...................................................... 7.180, 7.190, 7.240 Embrey v Owen (1851) 6 Ex 353; 155 ER 579 ........................................................................ 10.110 Engineers’ Case see Amalgamated Society of Engineers v Adelaide Steamship Co Ltd ........................ Entick v Carrington (1765) 2 Wils KB 275 ................................................................................. 3.150 Essendon Corporation v Criterion Theatres Ltd (1947) 74 CLR 1 ............................................... 11.30 Evans v Crichton-Browne (1981) 147 CLR 169 ......................................................................... 11.30 Evda Nominees Pty Ltd v Victoria (1984) 154 CLR 311 .................................................... 9.70, 9.120 Everson v Board of Education 330 US 1 (1947) ....................................................................... 10.330 Exxon Corporation v Governor of Maryland (1978) 437 US 117 ................................................. 8.80

F F, Re; Ex parte F (1986) 161 CLR 376 ............................................................... 5.460, 7.150, 14.680 FAI Insurances Ltd v Winneke (1982) 151 CLR 342 ................................................................... 3.210 Fairfax v Federal Commissioner of Taxation (1965) 114 CLR 1; [1965] HCA 64 .... 5.390, 5.460, 7.50, 7.70, 7.80, 7.130, 7.150, 10.150, 10.230 Falkland Islands Co v The Queen (1863) 2 Moo NS 266; [1863] Eng R 782; 15 ER 902 .......... 14.530 Fardon v Attorney-General (Qld) (2004) 223 CLR 575 ..... 2.520, 2.560, 2.570, 2.610, 2.640, 2.720, 5.460, 13.200, 13.350 Farey v Burvett (1916) 21 CLR 433 .............................................. 1.410, 3.120, 6.180, 6.190, 6.210 Farley (1940) 63 CLR 278 .................................................................... 4.30, 12.320, 12.340, 12.380 Farnell v Bowman (1887) 12 App Cas 643 .................................................................................. 3.30 Federal Election Commission v Beaumont 539 US 146 ........................................................... 11.180 Federated Amalgamated Government Railway and Tramway Service Association v NSW Railway Traffic Employees Association (Railway Servants Case) (1906) 4 CLR 488 .... 5.460, 12.110 Federated Saw Mill & Employees of Australasia v James Moore & Sons Pty Ltd (1909) 8 CLR 465 ...................................................................................................................................... 4.350 Federated Sawmill, Timberyard and General Woodworkers’ Employees’ Association (Adelaide Branch) v Alexander (1912) 15 CLR 308 .................................................... 2.510, 2.640 Fencott v Muller (1983) 152 CLR 570 .................... 5.410, 5.430, 5.510, 5.550, 5.600, 5.610, 5.620 Frost v Stevenson (1937) 58 CLR 528 ......................................................................................... 6.90 Finemores Transport Pty Ltd v New South Wales (1978) 139 CLR 338 ........................................ 8.40 Fire Commissioners (NSW), Board of v Ardouin (1961) 109 CLR 105 ...................................... 11.210 First Uniform Tax Case see South Australia v Commonwealth ............................................................. Fish Board v Paradiso (1956) 95 CLR 443 ................................................................................. 8.100 Flaherty v Girgis (1989) 63 ALR 466 .................................................................................. 4.20, 4.40 Fontana Films (1982) 150 CLR 169 .................................................................... 5.430, 5.410, 5.460 Foreman & Sons Pty Ltd, Re; Uther v Federal Commissioner of Taxation (1947) 74 CLR 508 .... 1.140, 6.110, 12.200, 12.380 xviii

Table of Cases

Forge v Australian Securities and Investments Commission (2006) 228 CLR 45 ............. 2.570, 2.580, 2.640, 5.460, 2.640, 5.460 Fortescue Metals Group Ltd v Commonwealth (2013) 250 CLR 548 ...... 7.180, 7.220, 7.230, 7.240, 12.270 Fox v Robbins (1909) 8 CLR 115 ................................................................................................ 8.60 Fraser v State Services Commission [1984] 1 NZLR 116 .............................................................. 2.50 Fraser Henleins Pty Ltd v Cody; Crowther v Cody (1945) 70 CLR ................................................ 5.40 Fraser and Public Service Staff Relations Board, Re (1985) 23 DLR (4th) .................................. 14.570 Freightlines & Construction Holding Ltd (1967) 116 CLR 1; [1968] AC 625 ................................ 8.40 Frisby v Schultz (1988) 487 US 474 ........................................................................................ 11.150 Frome United Breweries Co Ltd. v Bath Justices [1926] AC 586 ............................................... 13.250 Frugtniet v Victoria (1997) 71 ALJR 1598; 148 ALR 320 ........................................................... 13.530 Fund State Superannuation Board of Victoria v Trade Practices Commission (1980) 49 FLR ....... 5.500

G Gallagher v Durack (1983) 152 CLR 238 ................................................................................ 14.740 Garcia v San Antonio Metropolitan Transit Authority 469 US 528 (1985) ................... 12.230, 12.340 Gardner v Dairy Industry Authority (NSW) ((1977) 138 CLR 646 .............................................. 2.670 Garnishee Case No 1 see New South Wales v Commonwealth ........................................................... Gazzo v Comptroller of Stamps (Vic) (1981) 149 CLR 227 .......................................................... 6.90 General Practitioners Society v Commonwealth (1980) 145 CLR 532 ....................... 7.30, 7.40, 7.50 Georgiadis v Australian and Overseas Telecommunications Corporation (1994) 179 CLR 297 .... 10.80, 10.120, 10.170 Gerhardy v Brown (1985) 159 CLR 70 ...................................................................................... 4.310 Gibbons v Ogden 22 US 1; 9 Wheat 1 (1824) .................................................. 5.160, 5.310, 12.120 Gilbert v Western Australia (1962) 107 CLR 494 ............................................. 7.400, 10.230, 10.240 Gilbertson v South Australia [1978] AC 772 ................................................................. 2.500, 13.560 Goldblatt v Hempstead 369 US 590 ....................................................................................... 10.120 Gonzales v Raich 545 US 1 ....................................................................................................... 5.330 Gooding, Warden v Wilson (1972) 405 US 518 ....................................................................... 11.130 Goryl v Greyhound Australia Pty Ltd (1994) 179 CLR 463 ....................................................... 10.450 Gosford Meats Pty Ltd v New South Wales (1985) 155 CLR 368 ...................................... 9.70, 9.100 Gould v Brown (1998) 193 CLR 346 ..................................... 12.10, 12.400, 13.280, 13.290, 13.300 Governor, Goulburn Correctional Centre, Re; Ex parte Eastman (1999) 200 CLR 322 ............... 13.20 Grace Brothers Pty Ltd v Commonwealth (1946) 72 CLR 269 ......................... 10.50, 10.140, 10.150 Grain Pool of Western Australia v Commonwealth (2000) 202 CLR 479 ......... 5.460, 10.230, 14.420, 14.630, 14.680 Grannall v Marrickville Margarine Pty Ltd (1955) 93 CLR 55 ........ 5.180, 5.430, 8.40, 11.60, 13.290, 14.740 Grassby v The Queen (1989) 168 CLR 1 ................................................................................. 13.470 Gratwick v Johnson (1945) 70 CLR 1 .......................................................................................... 8.40 Graves v New York; Ex rel O’Keefe 306 US 466 (1939) ........................................................... 12.180 Griffiths v Minister for Lands, Planning and Environment (2008) 235 CLR 232 ......................... 7.160 Griggs v Duke Power Co 401 US 424 (1971) .......................................................................... 10.440 Grollo v Palmer (1995) 184 CLR 348 .............................................................. 2.510, 13.310, 13.320 Gypsy Jokers Motorcycle Club Incorporated v Commissioner for Police (2008) 234 CLR 532 .... 2.600

H HA Bachrach Pty Ltd v Queensland (1988) 195 CLR 547 .............................. 13.450, 13.490, 13.510 HC Sleigh Ltd v South Australia (1977) 136 CLR 475 ............................................ 9.70, 9.120, 9.130 HV McKay Pty Ltd v Hunt (1926) 38 CLR 308 ........................................................................... 4.140 HCF Case (1982) 150 CLR ...................................................................................................... 13.110 HIH Claims Support Ltd v Insurance Australia Ltd (2011) 244 CLR 72; [2011] HCA 31 .............. 3.370 Ha v New South Wales (1997) 189 CLR 465 ....... 7.240, 8.120, 9.10, 9.50, 9.70, 9.80, 9.100, 9.110, 9.120 Hall v Braybrook (1956) 95 CLR 620 ....................................................................................... 10.270 Hamdi v Rumsfeld (2004) 72 USLW 4607 ............................................................................... 13.190 xix

Winterton’s Australian Federal Constitutional Law

Hampton & Co v United States (1928) 276 US 394 .................................................................. 3.440 Handyside v United Kingdom (1976) 1 EHRR 737 ................................................................... 11.180 Hansen v R [2007] 3 NZLR 1 .................................................................................................. 11.170 Harbours Corporation of Queensland v Vessey Chemicals Pty Ltd (1986) 12 FCR 60 ................. 3.210 Harper v Canada (Attorney General) [2004] 1 SCR 827 ............................................. 11.180, 11.300 Harper v Minister for Sea Fisheries (1989) 168 CLR 314 .................................. 7.50, 7.70, 9.20, 9.30 Harper v Victoria (1966) 114 CLR 361 ............................................................................. 5.290, 7.40 Harris v Caladine (1991) 172 CLR 84 ........................ 2.510, 13.40, 13.100, 13.110, 13.120, 13.540 Harris v Minister of the Interior [1952] 2 SA 428; [1952] 1 TLR 1245 ............................. 2.260, 2.310 Haskins v The Commonwealth (2011) 244 CLR 22; [2011] HCA 28 ............................. 3.150, 13.210 Haylor (1957) 97 CLR 177 ........................................................................................................ 4.280 Health Insurance Commission v Peverill (1994) 179 CLR 226; [1994] HCA 8 ............ 10.110, 10.160, 10.170, 10.180 Heart of Atlanta Motel Inc v United States 379 US 241 (1964) .................................................. 5.310 Heiner v Scott (1914) 19 CLR 381 ................................................................................... 3.30, 5.520 Hematite Petroleum Pty Ltd v Victoria (1983) 151 CLR 599 ..... 7.320, 9.50, 9.80, 9.90, 9.110, 9.130 Henry v Boehm (1973) 128 CLR 482 ........................................................... 10.400, 10.410, 10.440 Henry Clay & Bock & Co Ltd v Eddy (1915) 19 CLR 641; [1915] HCA 33 ............................... 10.120 Herald & Weekly Times Ltd v Commonwealth (1966) 115 CLR 418 ........ 8.80, 5.390, 5.430, 14.700, 14.740, 14.780 Higgs v Minister of National Security [2000] 2 AC 228 ............................................................. 3.370 Hill v Wallace (1922) 259 US 44 [66 Law Ed 822] ..................................................................... 7.130 Hilton v Wells (1985) 157 CLR 57 ................................................................. 13.310, 13.320, 13.540 Hirabayashi v United States 320 US 81 (1943) ........................................................................ 13.190 Hirst v United Kingdom (No 2) (2006) 42 EHRR 41 ................................................................ 11.240 Hodel v Virginia Surface Mining and Reclamation Association 452 US 264 ................................ 5.310 Hodge v The Queen (1883) 9 App Cas 117 ................................ 2.50, 2.430, 3.440, 12.120, 12.380 Hogan v Hinch (2011) 243 CLR 506 ............................................................................ 2.660, 11.300 Holland v Jones (1917) 23 CLR 149 .......................................................................................... 6.210 Homebush Flour Mills Ltd (1937) 56 CLR 390 ............................................................................ 7.60 Horta v Commonwealth (1994) 181 CLR 183 ................................................................... 6.20, 6.40 Hospital Provident Fund Pty Ltd v Victoria (1953) 87 CLR 1 ........................................................ 8.40 Howard v Gosset [(1845) 10 QB 359 ........................................................................................ 3.190 Huddart, Parker & Co Pty Ltd v Moorehead (1909) 8 CLR 330 ........ 3.370, 3.440, 5.70, 5.80, 5.340, 5.360, 5.390, 5.410, 5.430, 5.460, 5.470, 5.550, 7.130, 12.80, 12.100, 13.10, 13.20, 13.40, 13.540, 14.700 Hughes Aircraft Systems International v Airservices Australia (1997) 76 FCR 151 ....................... 3.230 Hughes and Vale Pty Ltd v New South Wales [No 2] (1955) 93 CLR 127 ..................................... 8.40 Hume v Higgins (1949) 78 CLR 116 ......................................................................................... 6.210 Hume v Palmer (1926) 38 CLR 441 .................................................................... 4.140, 4.400, 4.430 Hunkin v Siebert (1934) 51 CLR 538 ........................................................................................ 3.120 Hunter v Chief Constable [1982] AC 529 ................................................................................ 13.470 Hwang v Commonwealth (2005) 80 ALJR 125; 222 ALR 83 .................................................... 11.230

I ICM Agriculture Pty Ltd v Commonwealth (2009) 240 CLR 140 ....... 3.370, 7.400, 10.110, 10.120, 10.130, 10.230, 10.240 INS v Chadha 462 US 919 (1983) .......................................................................................... 13.320 Ibralebbe v The Queen [1964] AC 900 ....................................................................................... 2.50 Ilich v The Queen (1987) 162 CLR 110 ................................................................................... 10.140 Immigration, Minister for v Al Khafagi (2004) 219 CLR 664 .................................................... 13.200 Immigration and Ethnic Affairs, Minister for v Teoh (1995) 183 CLR 273 ......................... 3.120, 6.60 Incorporation Case see New South Wales v Commonwealth .............................................................. Independent Commission Against Corruption v Cunneen (2010) 239 CLR 531 ...................... 13.450 Independent Commission Against Corruption v Cunneen (2015) 89 ALJR 475 ........................ 13.450 Industrial Relations Act Case (Victoria v Commonwealth) (1996) 187 CLR 416 .... 5.460, 6.60, 6.120, 6.160, 11.250, 12.130, 14.780 Initiative And Referendum Act, In re [1919] 1 AC 935 .................................................... 2.380, 3.440 xx

Table of Cases

Insurance Commissioner v Associated Dominions Assurance Society Pty Ltd (1953) 89 CLR 78 ........................................................................................................................................ 5.550 International Finance Trust Co Ltd v New South Wales Crime Commission (2009) 240 CLR 319 ................................................................................................ 2.610, 2.640, 13.440, 13.450 Italy v Commission of the European Economic Community (13/63) [1963] CMLR 289 ........... 10.440

J J W Hampton & Co v United States 276 US 394 (1928) ............................................................ 7.150 JT International SA v Commonwealth (2012) 86 ALJR 1297; [2012] HCA 43 ............. 10.120, 10.130 Jacobsen v Rogers (1995) 182 CLR 572 ....................................................................... 12.60, 12.380 James v Commonwealth (1936) 55 CLR 1; [1936] AC 578 ........... 7.190, 7.240, 8.30, 8.100, 10.410, 10.440 James v Cowan [1932] AC 542; (1932) 47 CLR 386 .............................................. 7.360, 8.40, 8.100 James v South Australia (1927) 40 CLR 1 .................................................................................. 8.100 Jarratt v Commissioner of Police (NSW) (2005) 224 CLR 44; [2005] HCA 50 ............................ 3.150 Jehovah’s Witnesses Case see Adelaide COmpany of Jehovah’s Witnesses Inc v Commonwealth ............................................................................................................................ Jemena Asset Management (3) Pty Ltd v Coinvest Ltd (2011) 244 CLR 508 .................. 4.380, 4.390 Jenkins v Commonwealth (1947) 74 CLR 400 ..................................... 1.410, 6.210, 10.140, 10.170 John v Commissioner of Taxation ((1989) 166 CLR 417 .......................................................... 10.440 John Fairfax & Sons Ltd v New South Wales (1927) 39 CLR 139 ................................................. 9.50 John Holland Pty Ltd v Victorian Workcover Authority [(2009) 239 CLR 518; [2009] HCA 45 .... 3.150, 4.430 Johnson v Commissioner of Stamp Duties ([1956] AC 331 ....................................................... 2.460 Johnson v Kent (1975) 132 CLR 164; [1975] HCA 4 ...................................................... 3.30, 12.380 Johnstone v Commonwealth (1979) 143 CLR 398 .................................................................... 3.100 Jolley v Mainka (1933) 49 CLR 242 ......................................................................................... 13.290 Jones v Commonwealth (1987) 61 ALJR 348 .......................................................................... 13.310 Jones v Commonwealth [No 2] (1965) 112 CLR 206 ................................................. 10.170, 11.210 Joske, Re; Ex parte Shop Distributive and Allied Employers Association (1976) 135 CLR 194 .... 13.370 Joyce v Director of Public Prosecutions [1946] AC 347 .............................................................. 6.250 Judd v McKeon (1926) 38 CLR 380 ........................................................................... 10.350, 11.280 Judiciary and Navigation Acts, In re (1921) 29 CLR 257 ...... 2.670, 13.220, 13.230, 13.240, 13.250, 13.290, 13.300 Jumbunna Coal Mine NL v Victorian Coal Miners’ Association (1908) 6 CLR 309 .......... 5.460, 5.520, 6.90, 6.190, 8.120, 11.60, 11.210, 14.740

K K-Generation Pty Ltd v Liquor Licensing Court (2009) 237 CLR 501 .............................. 2.600, 2.640 K L Tractors Ltd, In re (1961) 106 CLR 318; [1961] HCA 8 .......................................................... 3.30 Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51 ........ 2.510, 2.640, 5.460, 2.560, 2.590, 2.710, 11.320, 12.380, 13.290, 13.450, 13.540, 13.560 Kakariki Case see Victoria v Commonwealth ....................................................................................... Kartinyeri v Commonwealth (1998) 195 CLR 337 ............................................ 5.460, 6.220, 10.230 Kathleen Investments (Aust) Ltd v Australian Atomic Energy Commission (1977) 139 CLR 117 ...................................................................................................................................... 5.550 Katsuno v The Queen (1999) 199 CLR 40 ............................................................................... 10.290 Katzenbach v McClung 379 US 294 (1964) .............................................................................. 5.310 Kean v Kerby (1920) 27 CLR 449 ............................................................................................ 11.250 Kendle v Melsom (1998) 193 CLR 46 ..................................................................................... 10.360 Keystone Bituminous Coal Association v DeBenedictis 480 US 470 ......................................... 10.120 Kidman v Commonwealth (1925) 37 CLR 233; [1925] HCA 55 ................................................ 3.370 Kidman (1915) 20 CLR 425 .................................................................................................... 13.150 Kimball Laundry Co v United States 338 US 1 ......................................................................... 10.120 King v Jones (1972) 128 CLR 221 ................................................................................ 10.20, 11.210 Kingswell v The Queen (1985) 159 CLR 264 ............................................... 10.260, 10.270, 10.280 Kirk v Industrial Relations Commission of New South Wales (2010) 239 CLR 531 ........ 2.630, 13.450 xxi

Winterton’s Australian Federal Constitutional Law

Kirkpatrick v Preisler [1969] USSC 112; 394 US 526 (22 Law Ed 2d 519) (1969) ..................... 14.560 Kirmani v Captain Cook Cruises Pty Ltd (No 1) (1985) 159 CLR 351 .......................................... 6.10 Knight v Knight (1971) 122 CLR 114 ............................................................ 13.100, 13.110, 13.450 Knowlton v Moore 178 US 41 (1900); 44 Law Ed 969 .............................................................. 7.190 Koon Wing Lau v Calwell (1949) 80 CLR 533 ................................................. 6.210, 13.170, 13.190 Koowarta v Bjelke-Petersen (1982) 153 CLR 168 ........... 5.410, 6.10, 6.60, 6.80, 6.90, 6.100, 6.110, 6.130, 6.135, 9.140, 11.320, 12.210, 12.220, 12.380 Korematsu v United States (1944) 323 US 214 ....................................................................... 13.190 Korponey v Attorney-General (Canada) (1982) 132 DLR (3d) 354 .......................................... 10.280 Kotsis v Kotsis (1970) 122 CLR 69 ................................................................. 13.100, 13.110, 13.450 Kruger v Commonwealth (1997) 190 CLR 1; 71 ALJR 991 ........ 2.560, 4.10, 10.300, 10.360, 11.110, 11.310, 11.320, 13.180, 13.190, 13.530, 13.540 Krygger v Williams (1912) 15 CLR 366 ................................................................................... 10.350 Ku-ring-gai Co-operative Building Society (No 12) Ltd, Re (1978) 36 FLR 134; 22 ALR 621 ...... 5.500 Kuczborski v Queensland (2014) 254 CLR 51 ............................................................... 2.710, 2.720

L La Compagnie Hydraulique v Continental Heat and Light Co (1909) AC 194 ......................... 12.120 Labour Relations Board of Saskatchewan v John East Iron Works Ltd [1949] AC 134 .................. 13.60 Laker Airways Ltd v Department of Trade [1977] 1 QB 643 ....................................................... 3.120 Lamb v Cockatoo Docks & Engineering Co Pty Ltd [1961] SR (NSW) 459 ................................ 4.450 Lamshed v Lake (1958) 99 CLR 132 ....................................................... 4.10, 10.250, 10.320, 11.30 Landmark Communications Inc v Virginia 435 US 829 ............................................................ 14.740 Lane v Morrison (2009) 239 CLR 230 ..................................................................................... 13.210 Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 ........ 1.160, 1.170, 1.210, 1.230, 3.170, 3.370, 3.230, 5.460, 8.120, 9.70, 9.80, 11.60, 11.130, 11.150, 11.180, 11.230, 11.300, 12.380, 14.240, 14.280 Langer v Commonwealth (1996) 186 CLR 302 ................................. 11.60, 11.250, 11.280, 11.300 Lansell v Lansell (1964) 110 CLR 353 ...................................................................................... 11.210 Launceston Corporation v Hydro-Electric Commission (1959) 100 CLR 654 ............................. 5.520 Lawrence v Fen Tigers Ltd (No 3) [2015] 1 WLR 3485 ............................................................ 11.180 Lawrence v Texas (2003) 539 US 558 ..................................................................................... 13.190 Le Mesurier v Connor (1929) 42 CLR 481 ........................ 2.510, 2.530, 2.560, 2.640, 7.310, 13.110 Leask v Commonwealth (1996) 187 CLR 579; [1996] HCA 29 .......... 5.420, 10.230, 11.250, 14.680, 14.750, 14.770, 14.780 Lee, Re (1986) 160 CLR 430 ...................................................................................... 12.220, 12.380 Leeth v Commonwealth (1992) 174 CLR 455 ........... 2.610, 7.220, 11.310, 11.320, 11.330, 12.380, 13.270, 13.530, 13.540, 14.60 Lemon v Kurtzman 403 US 602 (1971) .................................................................................. 10.330 Lendrum v Campbell (1932) 32 SR (NSW) 499 ...................................................................... 11.130 Leong v Chye [1955] AC 648 ................................................................................................. 14.530 Leong Kum, Ex parte (1888) 9 NSWR 251 ................................................................................ 3.120 Levy v Victoria (1997) 189 CLR 579 .... 11.50, 11.80, 11.90, 11.110, 11.130, 11.140, 11.180, 11.300 Lewis v City of New Orleans (1974) 415 US 130 .................................................................... 11.130 Li Chia Hsing v Rankin (1978) 141 CLR 182 ............................................................................ 10.260 Lim (1992) 176 CLR 1 .......................................................... 3.150, 13.190, 13.200, 13.490, 13.520 Ling v Commonwealth (1994) 51 FCR 88 ................................................................................ 3.120 Lingle v Chevron USA Inc 544 US 528 .................................................................................... 10.120 Lipohar v The Queen (1999) 200 CLR 485 .................................................................... 2.490, 3.150 Little v Commonwealth (1947) 75 CLR 94 ........................................... 1.410, 6.210, 13.170, 13.190 Liverpool Insurance Co (1870) 77 US 566 ................................................................................ 5.520 Liversidge v Anderson [1942] AC 206 ....................................................................................... 6.210 Liyanage v The Queen [1967] 1 AC 259 .............. 13.140, 13.400, 13.410, 13.430, 13.470, 13.490, 13.520 Lloyd v Wallach (1915) 20 CLR 299; (1915) VLR 476 ..................................................... 1.410, 6.210 Lo Pak, Ex parte (1888) 9 NSWR 221 ........................................................................................ 3.150 Lockwood v Commonwealth (1954) 90 CLR 177 ..................................................................... 3.370 Loewenthal’s Case (1974) 131 CLR 338 ................................................................................... 4.290 Logan Downs Pty Ltd v Queensland (1977) 137 CLR 59 ................................ 7.30, 7.40, 9.90, 9.130 xxii

Table of Cases

Lopez v United States 514 US 549 (1995) ................................................................................ 5.300 Lorenzo v Carey (1921) 29 CLR 243 ....................................................................................... 13.110 Love v Attorney General (NSW) (1990) 169 CLR 307 ................................................................ 4.160 Lower Mainland Dairy Products Sales Adjustment Committee v Crystal Dairy Ltd [1933] AC 168 ........................................................................................................................................ 7.30 Luton v Lessels (2002) 210 CLR 333 ...................................................................... 7.75, 7.80, 7.160

M M v M (1988) 166 CLR 69 ........................................................................................................ 2.560 M G Kailis (1962) Pty Ltd v Western Australia (1974) 130 CLR 245 ............................................. 9.70 M’Culloch v Maryland 4 Wheat 316 ......................................................................................... 5.230 M’Kendrick v Sinclair (1972) SC (HL) 25 ................................................................................... 3.120 Mabo v Queensland (1988) 166 CLR 186 ........................................................................ 4.310, 6.60 Mabo v Queensland [No 2] (1992) 175 CLR 1 ................................................................. 2.20, 11.20 MacCormick v Federal Commissioner of Taxation (1984) 158 CLR 622 ..... 7.30, 7.150, 7.160, 7.170 Macks, Re; Ex parte Saint (2000) 204 CLR 158 ............................................. 13.300, 13.450, 13.510 Magill v Magill (2006) 226 CLR 551 ....................................................................................... 13.370 Magrath v Commonwealth (1944) 69 CLR 156 ...................................................................... 10.140 Maguire v Simpson (1977) 139 CLR 362 ................................................................................ 12.340 Mandla v Dowell Lee [1983] 2 AC 548 ................................................................................... 10.440 Mandla v Dowell Lee; Bhinder v Canadian National Railway Co [1985] 2 SCR 561 ................. 10.440 Mansell v Beck (1956) 95 CLR 550 ............................................................................................. 8.40 Marbury v Madison 1 Cr 137; 2 Law Ed 118 (1803) .................. 1.390, 2.260, 3.100, 6.210, 13.320 Marcus Clark & Co Ltd v Commonwealth (1952) 87 CLR 177 ........................... 6.135, 6.200, 6.230 Maritime Union of Australia, Re; Ex parte CSL Pacific Shipping Inc (2003) 214 CLR 397 ........... 5.250, 5.460 Massey-Ferguson Industries Ltd v Government of Saskatchewan [1981] 2 SCR 413; (1981) 127 DLR (3d) 513 ......................................................................................................... 7.60, 7.80 Matter of the President’s Commission on Organised Crime: Subpoena of Scarfo 783 F 2d 370 (1986) ........................................................................................................................ 13.320 Matthews v Chicory Marketing Board (Vic) (1938) 60 CLR 263 ............. 7.20, 7.30, 7.50, 7.60, 7.80, 7.150, 8.100, 9.50, 9.60, 9.80, 9.90, 9.100, 9.110, 9.120 Maxwell v The Queen (1996) 184 CLR 501 ............................................................................ 13.470 McCauley v Federal Commissioner of Taxation (1944) 69 CLR 235 ............................................. 7.60 McCawley v The King [1920] AC 691; (1920) 28 CLR 106 ...................... 2.180, 2.190, 2.210, 2.260 McClintock v Commonwealth (1947) 75 CLR 1 ......................................................... 10.140, 10.170 McCloy v New South Wales (2015) 89 ALJR 857 ............................................ 11.70, 11.180, 11.270 McClure v Australian Electoral Commission (1999) 163 ALR 734; 73 ALJR 1086 ...................... 11.110 McCulloch v Maryland 4 Wheat 316; 4 Law Ed 579 (1819) ...... 1.120, 5.160, 6.190, 7.130, 12.110, 12.340, 14.730, 14.780 McCutcheon v Federal Election Commission 188 L Ed 2d 468 ................................................ 11.180 McGinty v Western Australia (1996) 186 CLR 140 ......... 2.140, 2.330, 3.190, 11.60, 11.180, 11.200, 11.210, 11.230, 11.280, 11.320, 12.380, 13.290, 14.80, 14.130 McGraw-Hinds (Aust) Pty Ltd v Smith (1979) 144 CLR 633 ...................................................... 6.220 McGuiness v Attorney-General (Vic) (1940) 83 CLR 73 ............................................................. 3.120 McJannet, Re; Ex parte Minister for Employment, Training and Industrial Relations (Qld) (1995) 184 CLR 620 ............................................................................................................ 5.520 McLean, Ex parte (1930) 43 CLR 472 ............................................ 4.30, 4.140, 4.280, 4.290, 4.440 McLeod v St Aubyn [1899] AC 549 ......................................................................................... 14.740 McWaters v Day (1989) 168 CLR 289 ............................................................................ 4.280, 4.430 Melbourne Corporation v Commonwealth (State Banking Case) (1947) 74 CLR 31 ...... 3.340, 5.300, 5.390, 5.410, 5.430, 5.460, 6.90, 7.130, 7.230, 7.310, 11.30, 11.210, 11.300, 11.320, 12.130, 12.170, 12.180, 12.190, 12.200, 12.220, 12.240, 12.280, 12.330, 12.340, 12.380, 14.700, 14.400, 14.550 Mellifont v Attorney-General (Qld) (1991) 173 CLR 289 ........................................................... 2.670 Mersey Docks and Harbour Board Trustees v Cameron (1864) 11 HLC 443 .............................. 6.210 Metal Trades Industry Association of Australia v Amalgamated Metal Workers’ and Shipwrights’ Union (1983) 152 CLR 632 ..................................................................... 4.30, 4.310 Mewett (1997) 191 CLR 471 .................................................................................................... 3.100 xxiii

Winterton’s Australian Federal Constitutional Law

Mikasa (NSW) Pty Ltd v Festival Stores (1972) 127 CLR 617 ................................................... 13.370 Milat v The Queen (2004) 205 ALR 338 .................................................................................. 13.540 Milicevic v Campbell (1975) 132 CLR 307 ................................................................... 5.390, 13.470 Miller v French 530 US 327 (2000) ......................................................................................... 13.510 Miller v TCN Channel Nine Pty Ltd (1986) 161 CLR 556 .... 8.10, 8.40, 8.180, 11.30, 11.110, 11.210 Millner v Raith (1942) 66 CLR 1 .............................................................................................. 13.140 Milne v Huber (1843) 17 Fed Cas 403 .................................................................................... 14.660 Minister for Immigration and Multicultural and Indigenous Affairs, Re; Ex parte Ame (2005) 222 CLR 439 ........................................................................................................................ 5.460 Minister for Immigration and Multicultural and Indigenous Affairs, Re; Ex parte Lam (2003) 214 CLR 1 ............................................................................................................................ 5.520 Minister of State for the Army v Dalziel (1944) 68 CLR 261 ...................................................... 10.60 Mistretta v United States 488 US 361 (1989) ....................................... 1.300, 2.560, 13.320, 13.330 Mobil Oil Australia Pty Ltd v Victoria (2002) 211 CLR 1 ............................................................. 2.490 Moevao v Department of Labour [1980] 1 NZLR 464 ............................................................. 13.470 Momcilovic v The Queen (2011) 245 CLR 1; [2011] HCA 34 ................ 2.670, 3.150, 4.410, 10.460 Monis v The Queen (2013) 249 CLR 92 .......................................... 11.150, 11.170, 11.180, 11.300 Moore v Commonwealth (1951) 82 CLR 547 ........................................ 7.60, 7.160, 10.140, 11.150 Moore v Smaw (1861) 17 Cal 199 ........................................................................................... 3.140 Morgan v Commonwealth (1947) 74 CLR 421 .............................................................. 5.160, 7.180 Morrison v Olson 487 US 654 (1988) .......................................................................... 1.300, 13.220 Moss v Donohoe (1915) 20 CLR 615 ...................................................................................... 13.140 Mugler v Kansas 123 US 623 .................................................................................................. 10.120 Muir v The Queen [2004] HCA 21 .......................................................................................... 13.540 Muldowney v South Australia (1996) 186 CLR 352 ......................................... 11.60, 11.290, 11.300 Mulholland v Australian Electoral Commission (2004) 220 CLR 181 ............ 11.110, 11.170, 11.180, 11.230, 11.270, 11.330 Muller v Dalgety & Co Ltd (1909) 9 CLR 693 ........................................................................... 5.390 Munday v Gill (1930) 44 CLR 38 ............................................................................................ 10.270 Municipal Council of Sydney v Commonwealth (1904) 1 CLR 208 ................................ 7.310, 10.30 Murphy v Electoral Commissioner (2016) 90 ALJR 1027 ........................................... 11.190, 11.270 Murphyores Inc Pty Ltd v Commonwealth (1976) 136 CLR 1 .......... 3.370, 5.70, 5.80, 7.140, 7.150 Musgrove v Toy [1891] AC 272 ................................................................................................ 3.120 Mutual Film Corporation v Industrial Commission of Ohio (1915) 236 US 230; [1915] USSC 53; 59 Law Ed 552 ............................................................................................................... 3.440 Mutual Pools & Staff Pty Ltd v Commonwealth (1994) 179 CLR 155 .......... 10.120, 10.140, 10.150, 10.170, 10.250 Mutual Pools & Staff Pty Ltd v Federal Commissioner of Taxation (1992) 173 CLR 450 .............. 9.10, 10.140

N NSW v Commonwealth [2006] HCA 52; (2006) 229 CLR 1 ...................................................... 3.450 Namibia Case [1971] ICJR .......................................................................................................... 6.90 National Federation of Independent Business v Sebelius 132 S Ct 2566 (2012) ........................ 5.330 National Labor Relations Board v Jones & Laughlin Steel Corp 301 US 1 (1937) ....................... 5.250 National Security (Economic Organization) Regulations (Shrimpton v Commonwealth (1945) 69 CLR 613 ................................................................................................................ 5.80 Nationwide News Pty Ltd v Wills (1992) 177 CLR 1 .......... 5.100, 8.160, 8.170, 11.20, 11.40, 11.60, 11.150, 11.180, 11.21011.280, 11.300, 13.290, 14.730, 14.740, 14.750 Native Title Act Case see Western Australia v Commonwealth ............................................................ Nelungaloo Pty Ltd v Commonwealth (1948) 75 CLR 495 .............. 10.150, 13.430, 13.450, 13.510 New South Wales v Bardolph [1934] HCA 74; (1934) 52 CLR 455 ...................... 3.210, 3.370, 3.420 New South Wales v Commonwealth (1908) 7 CLR 179 ................................................. 3.290, 3.340 New South Wales v Commonwealth (Wheat Case) (1915) 20 CLR 54 ..... 5.460, 6.20, 13.20, 13.230, 13.250, 13.270 New South Wales v Commonwealth (Garnishee Case No 1) (1931) 46 CLR 155 ..................... 12.280 New South Wales v Commonwealth (1975) 135 CLR 337 .... 2.460, 2.480, 5.390, 6.90, 6.110, 11.30 New South Wales v Commonwealth (Incorporation Case) (1990) 169 CLR 482 ............ 5.430, 5.460, 5.490, 5.510, 5.540, 5.550, 11.210, 13.240 xxiv

Table of Cases

New South Wales v Commonwealth (Work Choices Case) (2006) 229 CLR 1; [2006] HCA 52 .... 3.370, 4.160, 5.460, 5.520, 6.250, 11.220, 12.100, 14.80, 14.830 New South Wales v Ibbett (2006) 229 CLR 638 ........................................................................ 3.100 New South Wales v Kable (2013) 252 CLR 118 ......................................................................... 2.520 New South Wales v The Commonwealth (Hospital Benefits Case) (1983) 151 CLR 302 ............ 4.380 New York v United States 326 US 572 (1946) ............................................................ 12.180, 12.190 New York Times v Sullivan 376 US 254 (1964) .......................................................................... 11.50 Newcrest Mining (WA) Ltd v Commonwealth (1997) 190 CLR 513; [1997] HCA 38 ......... 4.1010.50, 10.100, 10.110, 10.120, 10.130, 10.240, 10.250 Ngoc Tri Chau v Director of Public Prosecutions (Cth) (1995) 132 ALR 430 ............................ 13.540 Nicholas v Commonwealth (2011) 244 CLR 66 ...................................................................... 13.210 Nicholas v The Queen (1998) 193 CLR 173 ....................... 13.460, 13.470, 13.490, 13.510, 13.540 Nicholas v Western Australia [1972] WAR 168 ........................................................................... 2.500 Nintendo Co Ltd v Centronic Systems Pty Ltd (1994) 181 CLR 134 ..... 5.460, 10.50, 10.160, 10.170 Nishimura Ekiu v United States [142 US 651 ............................................................................. 3.150 Nolan v Minister for Immigration and Ethnic Affairs (1988) 165 CLR 178 ........ 3.50, 10.440, 14.660 Nolan, Re; Ex parte Young (1991) 172 CLR 460 ...................................................................... 13.170 Norman v Federal Commissioner of Taxation (1963) 109 CLR 9 ............................................. 10.140 North Australian Aboriginal Justice Agency Ltd v Northern Territory (2015) 90 ALJR 38 ............. 2.570 North Australian Aboriginal Legal Aid Service Inc v Bradley (2004) 218 CLR 146 ........... 2.570, 2.640, 13.390, 13.530 North Eastern Dairy Co Ltd v Dairy Industry Authority of NSW (1975) 134 CLR 559 ....... 8.40, 8.100, 8.120, 11.150 North Ganalanja Aboriginal Corporation v Queensland (1996) 185 CLR 595 ............. 13.240, 13.290 Northern Suburbs General Cemetery Reserve Trust v Commonwealth (1993) 176 CLR 555 .... 1.170, 3.170, 7.10, 7.50, 7.60, 7.70, 7.80, 7.150, 7.160 Northern Territory v Arnhem Land Aboriginal Land Trust (2008) 236 CLR 24; [2008] HCA 29 .... 3.150 Northern Territory v GPAO (1999) 196 CLR 553 ....................................................................... 13.20 Norton v Spooner (1854) 9 Moo PC 103 ................................................................................. 6.210

O O Gilpin Ltd v Commissioner for Road Transport and Tramways (NSW) (1935) 52 CLR 189 ....... 8.40 O’Keefe v Calwell (1949) 77 CLR ............................................................................................ 13.170 O’Sullivan v Noarlunga Meat Ltd (1954) 92 CLR 565 .................. 4.160, 4.200, 4.240, 5.160, 5.230 O’Sullivan v Noarlunga Meat Ltd (No 1) (1956) 95 CLR 177 ........................................... 4.30, 4.240 O’Sullivan v Noarlunga Meat Ltd (No 2) (1956) 94 CLR 367 ........................................ 5.240, 5.250 O’Toole v Charles David Pty Ltd (1991) 171 CLR 232 .................................................. 6.150, 13.240 Oates v Attorney-General (Cth) (2001) 181 ALR 559 ................................................................ 3.120 Ong Ah Chuan v Public Prosecutor [1981] AC 648 ................................................................... 1.140 Ontario Human Rights Commission v Simpsons–Sears Ltd [1985] 2 SCR 536 ......................... 10.440 Ontario Public Service Employees’ Union and Attorney-General for Ontario, Re (88) (1987) 41 DLR (4th) 1 ................................................................................................................... 14.570 Orient Steam Navigation Co Ltd v Gleeson (1931) 44 CLR 254 .............................................. 13.470 Osborne v Commonwealth (1911) 12 CLR 321 ............................ 7.10, 7.120, 7.150, 7.290, 14.700

P PJ Magennis Pty Ltd v Commonwealth (1949) 80 CLR 382 ............. 7.390, 10.140, 10.170, 10.210, 10.250 PMA (Victoria v Commonwealth) (1975) 134 CLR 81 ............................................................... 1.200 Pacific Coal Pty Ltd, Re; Ex parte Construction, Forestry, Mining and Energy Union (2000) 203 CLR 346 ............................................................................................................. 5.450, 5.460 Pacific Film Laboratories Pty Ltd v Federal Commissioner of Taxation (1970) 121 CLR 154; [1970] HCA 36 .................................................................................................................. 10.120 Palazzolo v Rhode Island 533 US 606 ..................................................................................... 10.120 Palling v Corfield (1970) 123 CLR 52 ........................................................................... 2.640, 13.150 Palmdale (1977) 140 CLR 236 ....................................................................................... 4.290, 4.340 Pankhurst v Kiernan (1917) 24 CLR 120 ................................................................................... 6.210 xxv

Winterton’s Australian Federal Constitutional Law

Pape v Federal Commissioner of Taxation (2009) 238 CLR 1 ........... 3.10, 3.30, 3.140, 3.150, 3.290, 3.310, 3.330, 3.340, 3.350, 3.370, 5.300, 7.160, 7.170, 7.400, 7.420 Parton v Milk Board (Vic) (1949) 80 CLR 229 .................. 7.60, 7.80, 7.160, 9.50, 9.60, 9.120, 9.130 Patrick v Cobain [1993] 1 VR 290 ........................................................................................... 11.150 Patterson, Re; Ex parte Taylor (2001) 207 CLR 391; [2001] HCA 51 ...................... 1.210, 3.10, 3.370 Peacock v Newtown Marrickville & General Co-operative Building Society No 4 Ltd (1943) 67 CLR 25 ............................................................................................................... 2.510, 13.370 Peanut Case (1933) 48 CLR 266 ............................................................................................... 8.100 Pearce v Florenca (1976) 135 CLR 507 .............................................................. 2.460, 2.480, 12.10 Pennsylvania v Wheeling and Belmont Bridge Co 54 US 518 (1852) ...................................... 13.510 Pennsylvania v Wheeling and Belmont Bridge Co 59 US 421 (1856) ...................................... 13.510 Pennsylvania Coal Co v Mahon 260 US 393 (1922) ................................................... 10.110, 10.120 Permanent Trustee Australia Ltd v Commissioner of State Revenue (2004) 220 CLR 388 ............ 7.10, 7.180, 7.210, 7.220, 7.230 Perpetual Executors & Trustees Association of Australia Ltd v Federal Commissioner of Taxation (1948) 77 CLR 1 ......................................................................................... 8.40, 10.140 Peterswald v Bartley (1904) 1 CLR 497 ............................................... 9.50, 9.60, 9.90, 9.120, 9.130 Pfizer Corporation v Ministry of Health [1965] AC 512 ............................................................. 7.160 Pham v Secretary of State for the Home Department (Open Society Justice Initiative intervening) [2015] 1 WLR 1591 ........................................................................................ 11.180 Pharmaceutical Benefits Case see Attorney-General (Vic) v Commonwealth; Ex rel Dale v Commonwealth ............................................................................................................................ Philip Morris Ltd v Commissioner of Business Franchises (Vic) (1989) 167 CLR 399 ........... 9.50, 9.70, 9.120, 9.130, 9.140 Phillips v Eyre (1870) LR 6 QB 1 ................................................................................................ 3.440 Pickin v British Railways Board [1974] AC 765 ............................................................................. 2.50 Pictou, Municipality of v Geldert [1893] AC 524 ..................................................................... 14.530 Pidoto v Victoria (1943) 68 CLR 87 ................................................................... 5.430, 5.460, 13.320 Pilkington v Frank Hammond Pty Ltd (1974) 131 CLR 124 ......................................................... 8.40 Pinkstone v The Queen (2004 219 CLR 444 ............................................................................. 8.120 Pirrie v McFarlane (1925) 36 CLR 170 ....................................................................... 12.310, 12.380 Plaintiff M47/2012 v Director General of Security (2012) 251 CLR 1 ................................. 6.40, 6.50 Plaintiff M61/2010E v Commonwealth of Australia (2010) 243 CLR 319 ................................... 3.230 Plaintiff M68/2015 v Minister for Immigration and Border Protection [2016] HCA 1; (2016) 257 CLR 42 ................................................................................. 3.20, 3.30, 3.80, 3.155, 13.200 Plaintiff M76/2013 v Minister for Immigration, Multicultural Affairs and Citizenship (2013) 251 CLR 322 ...................................................................................................................... 13.200 Plaintiff S157/2002 v Commonwealth (2003) 211 CLR 476 .................. 1.360, 3.450, 13.90, 13.190 Plaut v Spendthrift Farm Inc (1995) 514 US 211 ................................ 1.300, 13.470, 13.490, 13.510 Plenty v Dillon (1991) 171 CLR 635 ........................................................................................ 11.130 Pollard v The Queen (1992) 176 CLR 177 .............................................................................. 13.470 Pollentine v Bleijie (2014) 253 CLR 629 .................................................................................... 2.720 Polyukhovich v Commonwealth (War Crimes Act Case) (1991) 172 CLR 501 ..... 2.560, 6.20, 11.330, 13.130, 13.140, 13.150, 13.210, 13.270, 13.320, 13.470, 13.510, 13.530, 13.540 Poole [No 2] v Wah Min Chan (1939) 61 CLR 218 .................................................................... 6.135 Port MacDonnell Professional Fishermen’s Assn Inc v South Australia (1989) 168 CLR 340 ....... 1.490, 2.330, 2.490 Port of Portland Pty Ltd v Victoria (2010) 242 CLR 348; [2010] HCA 44 .................................... 3.370 Porter v The King; Ex parte Yee (1926) 37 CLR 432 .................................................... 13.250, 13.290 Potter v Minahan (1908) 7 CLR 277 ....................................................................................... 13.190 Poulton v The Commonwealth (1953) 89 CLR 540; [1953] HCA 101 ..................................... 10.150 Powell v Apollo Candle Company (1885) 10 App Cas 282 .................................. 2.50, 3.440, 12.380 Precision Data Holdings Ltd v Wills (1991) 173 CLR 167 ....................... 9.120, 13.40, 13.60, 13.370 President’s Commission on Organised Crime: Subpoena of Scaduto 763 F 2d (1985) ............ 13.320 Prince’s Case, The (1606) 8 Co Rep 1a ..................................................................................... 2.260 Printz v United States 521 US 898 (1997) ............................................................................... 12.270 Professional Engineers’ Association, Ex parte (1959) 107 CLR 208; [1959] HCA 47 ................... 3.370 Provincial Electoral Boundaries (Sask), Re [1991] 2 SCR 158 ................................................... 11.230 Public Service Association (SA) v Federated Clerks’ Union (1991) 173 CLR 132 ......................... 1.360 xxvi

Table of Cases

Public Service Association and Professional Officers’ Association Amalgamated (NSW), The v Director of Public Employment (2012) 250 CLR 343; 87 ALJR 162 ............................ 2.650, 2.690 Putland v The Queen (2004) 204 ALR 455 .............................................................................. 13.540 Pye v Renshaw (1951) 84 CLR 58 ........................................... 7.390, 7.400, 10.220, 10.230, 10.240

Q Quan Yick v Hinds (1905) 2 CLR 345 ...................................................................................... 14.530 Queen, The v Clarence (1888) 22 QBD 23 ............................................................................... 7.290 Queen Victoria Memorial Hospital v Thornton (1953) 87 CLR 144 ............................. 13.250, 13.540 Queensland v Commonwealth (1977) 139 CLR 585 .................................... 11.210, 14.270, 14.290 Queensland v Commonwealth (Queensland Rainforest Case) (1989) 167 CLR 232 ................... 6.120 Queensland Electricity Commission v Commonwealth (1985) 159 CLR 192 ............... 11.30, 11.310, 12.190, 12.200, 12.210, 12.220, 12.240, 12.380 Queensland Nickel Pty Ltd v Commonwealth (2015) 318 ALR 182 .................... 7.180, 7.220, 7.240 Queensland Rail Case see Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Queensland Rail ..................................... Quickenden v O’Connor (2001) 109 FCR 243 .......................................................................... 5.510

R R v Anderson; Ex parte Ipec-Air Pty Ltd (1965) 113 CLR 177 ................................................... 13.320 R v Archdall and Roskruge; Ex parte Carrigan and Brown (1928) 41 CLR 128 ............ 10.260, 10.280 R v Australian Industrial Court; Ex parte CLM Holdings Pty Ltd (1977) 136 CLR 235 ...... 5.390, 5.430 R v Barger (1908) 6 CLR 41 ..... 7.50, 7.60, 7.100, 7.110, 7.130, 7.160, 7.180, 7.190, 7.240, 7.290, 12.80, 14.710 R v Bernasconi (1915) 19 CLR 629 ............................................................................... 10.260, 11.30 R v Bevan; Ex parte Elias and Gordon (1942) 66 CLR 452 ............................................ 3.150, 13.170 R v Boston (1923) 33 CLR 386 ............................................................................................... 10.360 R v Brislan; Ex parte Williams (1935) 54 CLR 262 ....................................................... 10.170, 11.210 R v Bull (1974) 131 CLR 203 .................................................................................................... 2.460 R v Burah (1878) 3 App Cas 889 ...................................... 2.50, 2.210, 2.380, 2.430, 12.120, 12.380 R v Burgess; Ex parte Henry (1936) 55 CLR 608 ......... 5.110, 5.120, 5.160, 5.360, 6.60, 6.70, 6.90, 6.110, 6.135, 6.140, 6.150, 6.160, 14.780 R v Caldwell (2009) 22 VR 93 ................................................................................................... 4.430 R v Coldham; Ex parte Australian Social Welfare Union (1993) 153 CLR 297 .............. 12.220, 12.380 R v Commonwealth Conciliation and Arbitration Commission; Ex parte Professional Engineers (1959) 107 CLR 208 ............................................................................ 14.610, 14.620 R v Commonwealth Court of Conciliation and Arbitration; Ex parte Barrett (1945) 70 CLR 141 ...................................................................................................................................... 13.60 R v Commonwealth Industrial Court; Ex parte Amalgamated Engineering Union, Australian Section (Amalgamated Engineering Union Case) (1960) 103 CLR 368 ............................... 13.370 R v Credit Tribunal; Ex parte General Motors Acceptance Corporation (1977) 137 CLR 545 ..... 4.110, 4.290, 4.310, 4.350, 4.430 R v Davenport (1874) 4 QSCR 99 ............................................................................................. 3.210 R v Davison (1954) 90 CLR 353 ................................. 11.270, 13.40, 13.60, 13.110, 13.170, 13.250 R v Drybones [1970] SCR 282; 9 DLR (3d) 473 ......................................................................... 2.260 R v Dublin Corporation (1878) 2 LR Ir 371 ............................................................................. 13.250 R v Dunbabin; Ex parte Williams (1935) 53 CLR 434 ............................................................... 14.740 R v Duncan; Ex parte Australian Iron and Steel Pty Ltd (1983) 158 CLR 535; [1983] HCA 29 .... 3.240, 3.340, 3.370, 12.380, 13.290 R v Federal Court of Australia; Ex parte WA National Football League (1979) 143 CLR 190 ....... 5.390, 5.490, 5.500, 11.210 R v Federal Court of Bankruptcy; Ex parte Lowenstein (1938) 59 CLR 556 ..... 10.30, 10.260, 10.270, 13.320 R v Fletcher; Ex parte Kisch (1935) 52 CLR 248 ...................................................................... 14.740 R v Foreign Secretary; Ex parte Indian Association [1982] QB 892 ........................................... 14.660 R v Foster; Ex parte Rural Bank of New South Wales; Wagner v Gall; Collins v Hunter (1949) 79 CLR 43 ................................................................................................................. 6.135, 6.210 xxvii

Winterton’s Australian Federal Constitutional Law

R v Frost (1839) 9 Car & P 129 ................................................................................................. 6.250 R v Gallagher; Ex parte Aberdare Collieries Pty Ltd (1963) 37 ALJR 40 ....................................... 13.40 R v Goreng Goreng (2008) 220 FLR 21 .................................................................................... 3.180 R v Governor of Durham Prison; Ex parte Hardial Singh [1984] 1 WLR 704 ............................. 13.190 R v Gray [1900] 2 QB 36 ........................................................................................................ 14.740 R v Hegarty; Ex parte City of Salisbury (1981) 147 CLR 617 ...................................................... 13.60 R v Hickman; Ex parte Fox and Clinton (1945) 70 CLR 598 .................................................... 13.450 R v Hughes (2000) 202 CLR 535; [2000] HCA 22 ........................... 3.240, 3.340, 3.370, 5.560, 6.50 R v Humby; Ex parte Rooney (1973) 129 CLR 231 ........................... 13.300, 13.450, 13.490, 13.510 R v Hush; Ex parte Devanny (1932) 48 CLR 487 ....................................................................... 6.210 R v Inhabitants of Haughton (1853) 1 El & Bl 501 .................................................................... 6.210 R v Joske; Ex parte Australian Building Construction Employees and Builders’ Labourers’ Federation (1974) 130 CLR 87 .............................................................................. 13.270, 13.540 R v Judges of the Australian Industrial Court; Ex parte CLM Holdings Pty Ltd (1977) 136 CLR 235 ...................................................................................................................................... 5.370 R v Kelly; Ex parte State of Victoria (1950) 81 CLR 64 ............................................................. 14.740 R v Kidman (1915) 20 CLR 425; [1915] HCA 58 ............ 3.150, 3.370, 4.350, 6.210, 13.130, 13.140 R v Kirby; Ex parte Boilermakers’ Society of Australia (Boilermakers’ Case) (1956) 94 CLR 254; [1956] HCA 10 .............. 2.500, 3.370, 5.460, 7.230, 11.30, 13.20, 13.140, 13.220, 13.240, 13.250, 13.260, 13.290, 13.300, 13.320, 3.400, 13.540 R v L (1991) 174 CLR 379 ......................................................................................................... 4.110 R v LK (2010) 84 ALJR 395 ........................................................................................................ 4.430 R v Licensing Court of Brisbane; Ex Parte Daniell (1920) 28 CLR 23 ........................................... 4.60 R v Loewenthal; Ex parte Blacklock (1974) 131 CLR 338 ........................................................... 4.430 R v Ludeke; Ex parte Australian Building Construction Employees’ and Builders Labourers’ Federation (1985) 159 CLR 636; [1985] HCA 84 ................................................... 10.120, 10.140 R v Mack (1984) 44 CCC (3d) 513 ......................................................................................... 13.470 R v Members of Railways Appeals Board and Commissioner for Railways (NSW); Ex parte Davis (1957) 96 CLR 429 ..................................................................................................... 4.310 R v Minister for Agriculture, Fisheries and Food; Ex parte FEDESA [1990] 5 ECR I-4023 ........... 14.780 R v O’Halloran (2000) 182 ALR 431 .......................................................................................... 5.620 R v Oakes [1986] 1 SCR 103 ...................................................................................... 11.170, 11.180 R v Pearson; Ex parte Sipka (1983) 152 CLR 254 ................................... 10.20, 10.30, 10.40, 11.250 R v Poole; Ex parte Henry [No 2] (1939) 61 CLR 634 .................................................................. 6.90 R v Portus; Ex parte McNeil (1961) 105 CLR 537 ...................................................................... 5.390 R v Public Vehicles Licensing Appeal Tribunal (Tas); Ex parte Australian National Airways Pty Ltd (1964) 113 CLR 207 ................................................................................ 5.390, 5.460, 5.550 R v Quinn; Ex parte Consolidated Food Corporation (1977) 138 CLR 1 .................................... 2.510 R v Railways Appeals Board (NSW); Ex parte Davis (1957) 96 CLR 429 ..................................... 4.350 R v Richards; Ex parte Fitzpatrick and Browne (1955) 92 CLR 157 .................... 1.170, 3.170, 13.170 R v Secretary of State for the Home Department; Ex parte Pierson [1998] AC 539 .................. 13.190 R v Secretary of State for the Home Department; Ex parte Simms [2000] 2 AC 115 ................ 13.190 R v Sharkey (1949) 79 CLR 121 ................................................................. 3.320, 6.20, 6.90, 11.210 R v Smithers; Ex parte Benson (1912) 16 CLR 99 ............................................................. 5.40, 11.60 R v Smithers; Ex parte McMillan (1982) 152 CLR 477 ............................................................... 5.290 R v Snow (1915) 20 CLR 315 .................................................................................................. 10.280 R v Snow (1917) 23 CLR 256 .................................................................................................. 13.140 R v Sutton (1816) 4 M & S 532;105 ER 931 ............................................................................. 6.210 R v Sutton (Wire Netting Case) (1908) 5 CLR 789 ................................................................... 12.110 R v Sweeney; Ex parte Northwest Exports Pty Ltd (1981) 147 CLR 259 ................................... 14.700 R v Toohey; Ex parte Meneling Station Pty Ltd (1982) 158 CLR 327 ....................................... 10.110 R v Toohey; Ex parte Northern Land Council (1981) 151 CLR 170 ............................... 6.135, 11.250 R v Trade Practices Tribunal; Ex parte St George County Council (1974) 130 CLR 533 ............. 5.390, 5.490, 5.500 R v Trade Practices Tribunal; Ex parte Tasmanian Breweries Pty Ltd (1970) 123 CLR 361 .......... 2.510, 2.560, 13.60, 13.140, 13.320, 13.370 R v Turnbull (1958) Tas SR 80 ................................................................................................... 3.210 R v Vizzard; Ex parte Hill (1933) 50 CLR 30 ........................................................................................ R v White; Ex parte Byrnes (1963) 109 CLR 665 ..................................................................... 13.190 R v Winneke; Ex parte Gallagher (1982) 152 CLR 211 ............................................................... 4.490 xxviii

Table of Cases

R v Wright; Ex parte Klar (1971) 1 SASR 103 ........................................................................... 13.350 R (Animal Defenders International) v Secretary of State for Culture, Media and Sport [2008] AC 1312 ............................................................................................................................ 11.180 R (Hooper) v Secretary of State for Work and Pensions [2005] 1 WLR 1681 .............................. 3.400 R (Jackson) v Attorney General [2006] 1 AC 262 ....................................................................... 2.260 R (Lord Carlile of Berriew) v Secretary of State for the Home Department [2015] AC 945 ....... 11.180 R (Miller) v Secretary of State for Exiting the European Union [2016] EWHC 2768 ...................... 6.60 R (New London College Ltd) v Secretary of State for the Home Department [2013] 1 WLR 2358 .................................................................................................................................... 3.400 R (on the application of Miller and another) v Secretary of State for Exiting the European Union [2017] UKSC 5 ................................................................................................. 1.240, 6.60 RAV v City of St Paul, Minnesota (1992) 505 US 377 .............................................................. 11.130 RCA Corporation v John Fairfax & Sons Ltd [1981] 1 NSWLR 251 ............................................... 7.60 Radio Corporation Pty Ltd v Commonwealth (1938) 59 CLR 170 ............................................. 7.290 Rahim v Crawther and Kunst (1996) 17 WAR 559 ....................................................................... 4.10 Ranger Uranium Mines Pty Ltd, Re; Ex parte Federated Miscellaneous Workers’ Union of Australia (1987) 163 CLR 656 .............................................................................................. 13.60 Rann v Olsen (2000) 76 SASR 450 .......................................................................................... 11.130 Ratilal Panachand Gandhi v State of Bombay AIR 1954 SC 388 ................................................... 7.80 Re Residential Tenancies Tribunal of NSW v Henderson; Ex parte Defence Housing Authority (1997) 190 CLR 410 .............................................................................................................. 3.90 Red Lion Broadcasting Co v FCC (1969) ................................................................................... 11.30 Redfern v Dunlop Rubber Australia Ltd (1964) 110 CLR 194 ................... 5.160, 5.280, 5.390, 5.610 Reference Re Remuneration of Provincial Court Judges (1997) 3 SCR 3 ..................................... 14.60 Reference re Electoral Boundaries Commission Act ([1991] 2 SCR 158; (1991) 81 DLR (4th) 16 ...................................................................................................................................... 11.210 Refugee Review Tribunal, Re; Ex parte Aala (2000) 204 CLR 82 .................................... 3.155, 14.420 Reg v Anderson; Ex parte Ipec-Air Pty Ltd (1965) 113 CLR 177 ................................................... 8.40 Reg v Bull (1974) 131 CLR 203 ................................................................................................. 2.480 Reg v Humby; Ex parte Rooney (1973) 129 CLR 231 .............................................................. 13.430 Reid v Sinderberry (1944) 68 CLR 504 ...................................................................................... 6.210 Residential Tenancies Tribunal (NSW), Re; Ex parte Defence Housing Authority (Residential Tenancies Case) (1997) 190 CLR 410 ....... 3.30, 3.150, 3.230, 3.340, 3.370, 4.280, 4.430, 12.40, 12.60, 12.340, 12.370, 12.380, 12.400 Resources, Minister for v Dover Fisheries Pty Ltd (1993) 43 FCR 565 ...................................... 14.780 Retail, Wholesale & Department Store Union, Local 580 v Dolphin Delivery Ltd [1986] 2 SCR 573; (1986) 33 DLR (4th) ................................................................................ 11.30, 14.570 Richard Foreman & Sons Pty Ltd, Re; Uther v Federal Commissioner of Taxation (1947) 74 CLR 508 .................................................................................................................. 4.20, 12.310 Richardson v Forestry Commission (1988) 164 CLR 261 .... 6.120, 6.130, 6.140, 6.150, 6.160, 8.80, 10.440, 12.210, 14.780 Richardson, Re 160 NE 655 (1928) ......................................................................................... 13.320 Richardson (1988) 164 CLR 261 ............................................................................................... 6.150 Ridgeway v The Queen (1995) 184 CLR 19 ............................................................................ 13.470 Riel v The Queen (1885) 10 App Cas 675 ................................................................................... 2.50 Roach v Electoral Commissioner (2007) 233 CLR 162 .................................. 11.230, 11.250, 11.270 Roberts v Bass (2002) 212 CLR 1 ........................................................ 11.80, 11.110, 11.300, 13.540 Robertson v Seattle Audubon Society 503 US 429 (1992) .......................................... 13.490, 13.510 Robinson (TA) and Sons Pty Ltd v Haylor (1957) 97 CLR 177 .................................................... 4.240 Robtelmes v Brenan (1906) 4 CLR 395 ............................................................. 3.120, 3.150, 13.190 Robtelmes; Re Bolton; Ex parte Beane (1987) 162 CLR 514 ...................................................... 3.120 Roche v Kronheimer (1921) 29 CLR 329 ................................................................................... 3.440 Roche Products Pty Limited v National Drugs and Poisons Schedule Committee (2007) 163 FCR 451 ............................................................................................................................... 3.450 Rocla Pipes (1971) 124 CLR 468 ............................................................................................... 5.410 Rodway v The Queen (1990) 169 CLR 515 ............................................................................. 13.470 Rola Co (Australia) Pty Ltd v Commonwealth (1944) 69 CLR 185 .................................. 9.120, 13.40 Rooney (1973)129 CLR 231 ................................................................................................... 13.520 Roth v United States 354 US 476 ............................................................................................ 11.300 Rowe v Electoral Commissioner (2010) 243 CLR 1 ......................................... 10.40, 11.150, 11.250 xxix

Winterton’s Australian Federal Constitutional Law

Roy Morgan Research Pty Ltd v Federal Commissioner of Taxation (2011) 244 CLR 97 ............ 7.160 Ruddock v Vadarlis (2001) 110 FCR 491 .............................. 3.10, 3.110, 3.120, 3.150, 3.340, 3.370 Russell v Russell (1976) 134 CLR 495 ........................................................................................ 2.640 Russell v United States 471 US 858 (1985) ............................................................................... 5.310

S S v Bhulwana 1996 (1) SA 388 ............................................................................................... 11.170 S v Makwanyane 1995 (3) SA 391 .......................................................................................... 11.170 SGH Ltd v Commissioner of Taxation (2002) 210 CLR 51 .......................................... 12.390, 14.370 SOS (Mowbray) Pty Ltd v Mead (1972) 124 CLR 529 ............................................................... 5.290 SPSF Case (1993) 178 CLR 249 ................................................................................. 12.130, 12.220 SS Afghan: Ex parte Lo Pak (1888) 9 NSWLR 221 ..................................................................... 3.120 Salomon v Salomon & Co [1897] AC 22 ................................................................................... 5.460 Samuels v Readers’ Digest Association Pty Ltd ((1969) 120 CLR 1 .................................... 8.40, 8.120 Sauvé v Canada (Chief Electoral Officer) [2002] 3 SCR 519 ..................................................... 11.240 Savvas (1991) 55 A Crim R 241 ................................................................................................ 9.140 Scarborough v United States 431 US 563 ................................................................................. 5.300 Schmidt (1961) 105 CLR 361 ................................................................................................... 5.460 Seamen’s Union of Australia v Utah Development Co (1978) 144 CLR 120 .................. 9.130, 14.700 Seas and Submerged Lands Case see New South Wales v Commonwealth ......................................... Second Uniform Tax Case see Victoria v Commonwealth ................................................................... Shaw v Minister for Immigration and Multicultural Affairs (2003) 218 CLR 28 .......................... 5.460 Shell Co of Australia Ltd v Federal Commissioner of Taxation [1931] AC 275 ............................ 13.20 Sherman v United States 356 US 369 (1958) .......................................................................... 13.470 Shrimpton v Commonwealth (1945) 69 CLR 613 .......................................................... 6.135, 6.210 Silbert v Director of Public Prosecutions (2004) 217 CLR 181 ................................................... 2.570 Silk Bros Pty Ltd v State Electricity Commission (Vic) (1943) 67 CLR 1 ......................... 2.510, 13.250 Simpsons-Sears [1985] 2 SCR ................................................................................................. 10.440 Singer v United States 380 US 24 ........................................................................................... 10.280 Singh v Commonwealth (2004) 222 CLR 322 ............................................................. 5.460, 11.230 Sloan v Pollard (1947) 75 CLR 445 ................................................................................ 1.410, 6.210 Smith v ANL Ltd (2000) 204 CLR 493 ........................................................... 10.110, 10.150, 10.190 Smith v Oldham (1912) 15 CLR 355 .......................................................................... 11.180, 11.280 Sonzinsky v United States 300 US 506 (1937) .......................................................................... 7.290 Sorby v Commonwealth (1983) 152 CLR 281 ........................................................................ 13.470 Sorrells v United States 287 US 435 (1932) ............................................................................ 13.470 Souliotopoulos v La Trobe University Liberal Club (2002) 120 FCR 584 ...................................... 6.50 South-Eastern Drainage Board (South Australia) v Saving Bank of South Australia (1939) 62 CLR 603 .................................................................................................................... 2.260, 2.400 South African Association of Personal Injury Lawyers v Heath 2001 (1) SA 883 ........................ 13.330 South Australia v Commonwealth (First Uniform Tax Case) (1942) 65 CLR 373 ............ 5.140, 6.210, 7.220, 7.290, 7.300, 7.310, 12.10, 12.130, 12.310 South Australia v Tanner (1989) 166 CLR 161 ................................................................ 8.80, 14.740 South Australia v Totani (2010) 242 CLR 1 ......................................................... 2.630, 2.640, 2.710 South Dakota v Dole 483 US 203 (1987) .................................................................................. 7.340 South Eastern Drainage Board (SA) v Savings Bank of Australia (1939) 62 CLR 603 .................. 2.360 South West Africa Cases (Second Phase) [1966] ICJR 6 ................................................... 6.90, 10.440 Southern Centre of Theosophy Inc v South Australia (1979) 145 CLR 246 .................................. 3.50 Southern Railway Co v United States 222 US 20; 56 Law Ed 72 (1911) ..................................... 5.120 Spencer v Commonwealth (2010) 241 CLR 118 .................................................................... 10.240 Sportodds Systems Pty Ltd v New South Wales (2003) 133 FCR 63 .......................................... 8.120 Sportsbet Pty Ltd v New South Wales (2012) 249 CLR 298; 286 ALR 404 ...................... 8.140, 8.150 Spratt v Hermes (1965) 114 CLR 226 ............................................................. 10.290, 11.30, 13.290 Springer v Government of the Phillipine Islands (1928) 277 US 189; 72 Law Ed 845 ................ 3.440 Stamp Duties (NSW), Commissioner of v Millar (1932) (48 CLR 618 ........................................ 2.460 Stamp Duties (NSW), Commissioner of v Owens [No 2] (1953) 88 CLR 168 .......................... 12.380 Stanton v Federal Commissioner of Taxation (1955) 92 CLR 630 ................................................ 7.60 State v Moore 69 NW 373 (1896) ............................................................................................ 3.300 xxx

Table of Cases

State Authorities Superannuation Board v Commissioner of State Taxation (WA) (1996) 189 CLR 253 .................................................... 3.50, 3.140, 4.10, 12.10, 12.30, 12.40, 12.60, 12.380 State Banking Case see Melbourne Corporation v Commonwealth .................................................... State Chamber of Commerce and Industry v Commonwealth (1987) 163 CLR 329 ...... 7.140, 11.30, 12.210 State Government Insurance Commission v Trigwell (1979) 142 CLR 617 ................... 2.670, 14.530 State Public Services Federation, Re; Ex parte Attorney General (WA) (1993) 178 CLR 249 ...... 12.210 State Superannuation Board v Trade Practices Commission (1982) 150 CLR 282 .......... 5.430, 5.500 State Supreme Court Judges Superannuation Case see Austin v Commonwealth ............................... State for the Army, Minister of v Dalziel (1944) 68 CLR 261 ...................................................... 10.60 State of West Bengal v Anwar Ali ((1952) 39 AIR(SC) 75 .......................................................... 10.440 Steele v Defence Forces Retirement Benefits Board (1955) 92 CLR 177 ................................... 13.250 Stemp v Australian Glass Manufacturers Co Ltd (1917) 23 CLR 226 ........................................ 13.290 Stenhouse v Coleman (1944) 69 CLR 457 .................................. 1.410, 3.370, 6.200, 6.210, 14.680 Stephens v West Australian Newspapers Ltd (1994) 182 CLR 211 ....... 11.50, 11.210, 11.280, 11.300 Stewart v Ronalds [2009] NSWCA 277; (2009) 232 FLR 331 ..................................................... 3.420 Stock Motor Ploughs Ltd v Forsythe (1932) 48 CLR 128 ............................................... 4.400, 4.380 Stockdale v Hansard (1839) 9 Ad & E 1 [112 ER 1112] ............................................................. 3.190 Stolen Generations Case see Kruger v Commonwealth ...................................................................... Street v Queensland Bar Association (1989) 168 CLR 461 ............ 7.200, 8.80, 9.120, 10.10, 10.250, 10.390, 10.400, 10.420, 10.440, 11.210, 11.310, 13.20 Strickland v Rocla Concrete Pipes Ltd (1971) 124 CLR 468 ......... 4.350, 5.350, 5.360, 5.390, 5.410, 5.430, 5.460, 5.550, 14.700 Sue v Hill (1999) 199 CLR 462 ................... 1.490, 3.40, 3.50, 3.340, 3.370, 8.120, 11.230, 14.540 Supreme Court of New Hampshire v Piper 470 US 274 (1985) ............................................... 10.440 Supreme Court of Virginia v Friedman 101 L Ed 2d 56 (1988) ................................................ 10.440 Sweedman v Transport Accident Commission (2006) 226 CLR 362 ........................................ 10.450 Swift Australian Co (Pty) Ltd v Boyd Parkinson (1962) 108 CLR 189 ................... 4.240, 5.250, 5.260 Switzman v Elbling (87) (1957) 7 DLR (2d) 337 ..................................................................... 14.570 Sydney Municipal Council v Commonwealth (1904) 1 CLR 208 ............................................... 7.290 Sykes v Cleary (1992) 176 CLR 77 .......................................................................................... 10.360

T T A Robinson & Sons Pty Ltd v Haylor (1957) 97 CLR 177 ............................................. 4.180, 4.380 TCL Air Conditioner (Zhongshan) Co Ltd v Judges of the Federal Court of Australia (2013) 251 CLR 533 ...................................................................................................................... 13.440 Tajjour v New South Wales (2014) 88 ALJR 860; 313 ALR 221 .................................... 11.180, 11.330 Tame v New South Wales (2002) 211 CLR 317 ....................................................................... 11.150 Tan Te Lam v Superintendent of Tai A Chau Detention Centre [1997] AC 97 ........................... 13.190 Tape Manufacturers (1993) 176 CLR 480 ............................................ 7.80, 10.110, 10.140, 10.170 Tasmania v Commonwealth and Victoria (1904) 1 CLR 329 ......................................... 11.210, 14.40 Tasmanian Breweries Case see R v Trade Practices Tribunal; Ex parte Tasmanian Breweries Pty Ltd ............................................................................................................................... 13.370 Tasmanian Dam Case see Commonwealth v Tasmania (1983) 158 CLR 1 .......... 5.250, 5.430, 5.460, 5.470, 5.510, 6.10, 6.60, 6.135, 6.140, 6.150, 8.80, 10.80, 10.90, 10.110, 10.120, 10.140, 10.440, 11.320, 12.130, 12.190, 12.210, 12.220, 12.380, 14.740, 14.780 Taxation, Commissioner of v Clyne (1958) 100 CLR 246 .......................................................... 7.240 Taxation, Department of v WR Moran [1940] AC 838 ............................................................... 7.200 Taxation, Deputy Commissioner of v Moorebank Pty Ltd (1988) 165 CLR 55 ......................... 12.400 Taxation, Deputy Commissioner of v Moran (1940) AC 838; 63 CLR 338 ................................. 7.290 Taxation, Deputy Commissioner of v State Bank (NSW) [(1992) 174 CLR 219 ............................ 3.50 Taxation, Federal Commissioner of v Clyne (1958) 100 CLR 246 ................................. 7.160, 10.140 Taxation, Federal Commissioner of v Munro (1926) 38 CLR 153 ................................... 13.40, 13.50 Taxation, Federal Commissioner of v Official Liquidator of E O Farley Ltd (1940) 63 CLR 278; [1940] HCA 13 ......................................................................... 3.30, 3.140, 12.200, 12.380 Taxation, Federal Commissioner of v Official Receiver (1956) 95 CLR 300 ............................... 10.180 Taxation, Federal Commissioner of v Sherritt Gordon Mines Ltd (1977) 137 CLR 612 ................. 7.60 Taxation (NSW), Commissioners of v Baxter (1907) 4 CLR 1087; [1907] HCA 76 ...................... 3.340 Taylor v New Zealand Poultry Board [1984] 1 NZLR 394 ............................................................ 2.50 xxxi

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Telstra Corporation Ltd v The Commonwealth (2008) 234 CLR 210; [2008] HCA 7 .... 10.50, 10.120, 10.150, 10.190 Telstra Corporation Ltd v Worthing (1999) 197 CLR 61 ................................................. 4.380, 4.430 Teori Tau v Commonwealth (1969) 119 CLR 564 ................................................................... 10.240 Terminiello v Chicago (1949) 337 US 1 .................................................................................. 11.130 The Army, Minister for v Dalziel (1944) 68 CLR 261 ................................................................ 10.180 Theodore v Duncan [1919] AC 696 ............................................................................... 1.170, 3.170 Theophanous v Herald & Weekly Times Ltd (1994) 182 CLR 104 .............. 5.460, 9.70, 11.40, 11.50, 11.60, 11.120, 10.160, 11.180, 11.210, 11.280, 11.300, 14.80, 14.410 Theophanous v The Commonwealth (2006) 225 CLR 101 ........................................ 10.150, 10.160 Thomas v Mowbray (2007) 233 CLR 307 ........ 2.640, 2.650, 6.160, 6.250, 8.120, 13.350, 13.370 Toogood v Spyring [1834] 149 All ER Rep 1044 ............................................................. 11.60, 11.70 Tooheys Ltd v Commissioner of Stamp Duties (NSW) (1961) 105 CLR 602 ............................... 5.430 Toomer v Witsell (334 US 385 (1948) ..................................................................................... 10.440 Toronto Corporation v Russell [1908] AC 493 ......................................................................... 10.280 Toy v Musgrove (1888) 14 VLR 349 .................................................................... 3.120, 3.150, 3.210 Tracey, Re; Ex parte Ryan (1989) 166 CLR 518 ..................... 4.490, 12.210, 12.270, 13.170, 13.530 Trade [1977] QB 643 ............................................................................................................... 3.150 Trade Practices Commission v Manfal (1990) 97 ALR 231 ....................................................... 12.340 Trade Practices Commission v Tooth & Co Ltd (1979) 142 CLR 397 ..... 7.160, 7.400, 10.80, 10.120, 10.140, 10.170 Traut v Rogers (1984) 70 FLR 17; 27 NTR 2 ............................................................................ 10.250 Trethowan v Peden (1930) 31 SR (NSW) 183 ........................................................................... 2.260 Trethowan’s Case (1931) 44 CLR 394 ....................................................................................... 2.400 Truth About Motorways (2000) 200 CLR 591 ........................................................................... 2.670 Tunnock v Victoria (1951) 84 CLR 42 ............................................................................. 7.390, 7.400 Twin City Bank v Nebeker (1897) 167 US 196 ............................................................................ 7.60 Tyler, Re; Ex parte Foley ((1994) 181 CLR 18 .......................................................................... 11.210

U US v Sioux Nation of Indians 448 US 371 ............................................................................... 13.520 Uebergang v Australian Wheat Board (1980) 145 CLR 266 ................................... 8.30, 8.40, 11.150 Uniform Tax Case see South Australia v Commonwealth .................................................................... Union Label Case see Attorney-General (NSW) v Brewery Employees Union of NSW .......................... Union Steamship Co of Australia Pty Ltd v King (1988) 166 CLR 1 .............. 2.40, 2.50, 2.480, 6.20, 10.440, 12.10, 12.380, 14.60 Union Steamship Co of New Zealand Ltd v Commonwealth (1925) 36 CLR 130 ............ 2.90, 2.100 Unions NSW v New South Wales (2013) 252 CLR 530 ........................ 11.8011.180, 11.270, 11.300 United Building & Construction Trades v Mayor (465 US 208 (1984)) .................................... 10.440 United States v Butler 297 US 1 (1936) ........................................................................... 7.60, 7.340 United States v Constantine (1935) 296 US 287 [80 Law Ed 233] ............................................. 7.130 United States v Danks 221 F 3d 1037 ....................................................................................... 5.310 United States v Darby 312 US 100 ............................................................................................ 5.250 United States v Hill 248 US 420 .................................................................................................. 5.40 United States v Klein 80 US 128 (1871) .................................................................................. 13.510 United States v Lopez 514 US 549 (1995) ..................................................................... 5.310, 5.320 United States v Lovett 328 US 303 ......................................................................................... 13.130 United States v Morrison 529 US 598 (2000) ................................................................ 5.310, 5.320 United States v Munoz-Flores (1990) 495 US 384 ............................................................ 7.60, 7.130 United States v Sanchez (1950) 340 US 42 .................................................................... 7.130, 7.140 United States v Schooner Peggy 5 US 103 (1801) .................................................................. 13.510 United States v Singletary 268 F 3d 196 (1997) ........................................................................ 5.300 United States v Sullivan 332 US 689 (1948) .............................................................................. 5.300 United States v Wrightwood Dairy Co 315 US 110 (1942) ........................................................ 5.200 University of New South Wales v Moorhouse (1975) 133 CLR 1 .................................................. 7.60 University of Wollongong v Metwally (1984) 158 CLR 447 ............. 4.20, 4.30, 4.310, 4.330, 4.350, 4.430 Uther v Federal Commissioner of Taxation (1947) 74 CLR 508 ........... 4.30, 12.170, 12.300, 12.320, 12.330, 12.340, 12.380, 12.400 xxxii

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V Vacher & Sons Ltd v London Society of Compositors (1913) AC 107 ...................................... 12.120 Vacuum Oil Co Pty Ltd v Queensland (1934) 51 CLR 108 ........................................................... 7.60 Vasiljkovic v Commonwealth (2006) 227 CLR 614 ....................................................... 3.340, 13.200 Veen v The Queen [No 2] (1988) 164 CLR 465 ....................................................................... 13.190 Victoria v Australian Building Construction Employees’ and Builders Labourers’ Federation (1982) 152 CLR 25; [1982] HCA 31 .................................................. 3.30, 3.370, 12.200, 12.220 Victoria v Commonwealth (Federal Aid Roads Case) (1926) 38 CLR 399 ............. 7.290, 7.310, 7.400 Victoria v Commonwealth (Kakariki Case) (1937) 58 CLR 618 ....... 4.80, 4.150, 4.270, 4.380, 4.430, 4.480 Victoria v Commonwealth (1957) 99 CLR 575 ............... 3.370, 5.160, 5.580, 7.310, 12.10, 12.200, 13.290, 14.740 Victoria v Commonwealth (Payroll Tax Case) (1971) 122 CLR 353 .............. 5.460, 6.90, 7.80, 11.30, 11.210, 12.130, 12.150, 12.190, 12.220, 12.340, 12.380, 14.430, 14.700 Victoria v Commonwealth (1975) 134 CLR 338 .................. 3.30, 3.120, 3.280, 3.310, 3.320, 3.370 Victoria v Commonwealth (PMA Case) (1975) 134 CLR 81 ................................... 2.340, 5.460, 7.10 Victoria v Commonwealth (Industrial Relations Case) (1996) 187 CLR 416 .......... 3.50, 5.440, 5.460, 6.20, 6.120, 6.150, 11.250, 12.40, 12.190, 12.240, 12.380, 14.780, 14.820 Victoria v Construction, Forestry, Mining and Energy Union (2013) 218 FCR 172; [2013] FCAFC 160 .............................................................................................................. 3.410, 3.420 Victorian Chamber of Manufactures v Commonwealth (Industrial Lighting Regulations) (1943) 67 CLR 413 ................................................................................................... 1.410, 13.40 Victorian Stevedoring & General Contracting Co Pty Ltd and Meakes v Dignan (1931) 46 CLR 73 ....................... 1.170, 1.310, 3.170, 3.440, 6.200, 6.210, 11.30, 13.110, 13.250, 13.260 Virginia v Black (2003) 155 Law Ed 2d 535 ............................................................................. 11.130 Viscountess Rhondda’s Claim [1922] 2 AC 339 ........................................................................... 3.50 Viskauskas v Niland (1983) 153 CLR 280 ....................................................................... 4.260, 4.350

W W & A McArthur Ltd v Queensland (1920) 28 CLR 530 ..................................................... 5.20, 5.30 WEA International Inc v Hanimex Corporation Ltd (1987) 17 FCR 274 ........................................ 7.60 WR Moran Pty Ltd v Deputy Commissioner of Taxation [1940] AC 838; (1940) 63 CLR 338 .... 7.120, 7.130, 7.180, 7.240, 7.370 Wainohu v New South Wales (2011) 243 CLR 181 ....................................................... 2.660, 11.330 Wakim, Re; Ex parte McNally (1999) 198 CLR 511 ..... 1.300, 5.540, 12.10, 13.270, 13.290, 14.420 Walden v Administration of Norfolk Island (2007) 212 FLR 345 ............................................... 10.110 Walker v The Queen [1994] 2 AC 36 ......................................................................................... 3.120 Walsh, Ex parte [1942] ALR 359 ........................................................................ 1.410, 6.210, 13.190 Walsh, Ex parte; Re Yeats (1925) 37 CLR 36 ......................................... 3.150, 6.210, 13.170, 13.190 War Crimes Act Case see Polyukhovich v Commonwealth ....................................................... 13.170 Wards Cove Packing Co Inc v Atonio 57 LW 4583 (1989) ....................................................... 10.440 Waterhouse v Deputy Federal Commissioner of Land Tax (SA) (1914) 17 CLR 665 ................... 7.130 Waterhouse v Minister for the Arts and Territories (1993) 43 FCR 175 ..................................... 10.100 Waterside Workers Federation of Australia v JW Alexander Ltd (1918) 25 CLR 434 ......... 13.20, 13.40, 13.170, 13.250 Webb v Outtrim (1906) 4 CLR 356 ............................................................................ 12.110, 12.120 Wenn v Attorney-General (Vic) (1948) 77 CLR 84 .............. 4.280, 4.310, 4.320, 4.350, 4.380, 4.430 Wesberry v Sanders [1964] USSC 31; 376 US 1 (11 Law Ed 2d 481) (1964) ............... 11.200, 14.560 West v Commissioner of Taxation (NSW) (1937) 56 CLR 657 .............. 4.300, 11.30, 12.130, 12.170, 12.300, 12.320, 12.380, 12.390 West Lakes Ltd v South Australia (1980) 25 SASR 389 .............................................................. 2.400 Western Australia v Chamberlain Industries Pty Ltd (1970) 121 CLR 1 ..................... 9.70, 9.90, 9.110 Western Australia v Commonwealth (Native Title Act Case) (1995) 183 CLR 373 ......... 4.310, 4.360, 4.380, 12.210, 12.270 Western Australia v Commonwealth (1975) 134 CLR 201 ............................................ 1.200, 14.290 Western Australia v Hamersley Iron Pty Ltd (No 1) (1969) 120 CLR 42 ...................................... 9.110 xxxiii

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Western Australian Airlines Case see Attorney-General (WA) v Australian National Airlines Commission .................................................................................................................................. Wheat Case see New South Wales v Commonwealth ......................................................................... White v Director of Military Prosecutions (2007) 231 CLR 570; [2007] HCA 29 ........... 3.340, 13.210 White v Director of Public Prosecutions (WA) (2011) 243 CLR 478 .......................................... 10.120 White v Weiser [1973] USSC 153; 412 US 783; 37 Law Ed 2d 335 .......................................... 14.560 Whitehouse v Queensland (1960) 104 CLR 609 ......................................................................... 9.90 Wickard v Filburn 317 US 111 (1942) ............................................................................ 5.310, 5.330 Wilcox Mofflin Ltd v New South Wales (1952) 85 CLR 488 ....................................................... 8.100 Wilkinson v Downton [1897] 2 QB 57 .................................................................................... 11.150 Willard v Rawson (1933) 48 CLR 316 ................................................................................................. Williams v Commonwealth (2012) 248 CLR 156 ......... 3.10, 3.30, 3.40, 3.145, 3.150, 3.180, 3.310, 3.350, 3.370, 3.400, 5.480, 7.420, 10.360, 10.380 Williams v Commonwealth (No 2) (2014) 252 CLR 416 ................ 3.30, 3.310, 3.400, 3.450, 5.480 Williams v Howarth [1905] AC 551 ......................................................................................... 12.120 Williams v Hursey (1959) 103 CLR 30 ....................................................................................... 5.520 Williamson v Ah On (1926) 39 CLR 95 ......................................................................... 5.390, 13.470 Wilson v McIntosh [1894] AC 129 .......................................................................................... 10.280 Wilson v Minister for Aboriginal and Torres Strait Islander Affairs (1996) 189 CLR 1 ....... 2.510, 5.460, 13.310, 13.320, 13.370, 13.470, 13.540 Wishart v Fraser (1941) 64 CLR 470 .......................................................................................... 6.210 Woolley, Re; Ex parte Applicants M276/2003 (2004) 225 CLR 1; 79 ALJR 43 ............. 13.180, 13.190, 13.200 Wooltops Case (1922) 31 CLR 421 ........................................................................................... 3.370 Work Choices Case see New South Wales v Commonwealth .............................................................. Works (WA), Minister for v Gulson (1944) 69 CLR 338 ........................................ 3.50, 12.30, 12.130 Worthing v Rowell & Muston Pty Ltd (1970) 123 CLR 89 .......................................... 12.380, 14.700 Wotton v Queensland (2012) 246 CLR 1 ................................................................................ 11.300 Wragg v New South Wales (1953) 88 CLR 353 ...................................... 5.140, 5.160, 5.290, 10.320 Wynbyne v Marshall (1997) 117 NTR 11 ................................................................................ 13.150

X XYZ v Commonwealth (2006) 227 CLR 532; [2006] HCA 25 .... 5.460, 6.10, 6.20, 6.30, 6.50, 6.160

Y Yanner v Eaton (1999) 201 CLR 351; [1999] HCA 53 .............................................................. 10.120

Z Zadvydas v Davis 533 US 678 ................................................................................................ 13.190 Zheng v Cai (2009) 239 CLR 446 ............................................................................................. 4.430

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11.230, 11.250, 11.270, 11.280, 11.300, 11.310, 14.200, 14.250, 14.560 s 25: 1.170, 1.540, 1.550, 5.460, 11.30, 11.210, 11.310, 11.320 s 27: 1.410 s 27D(1): 8.120 s 28: 1.170, 11.250 s 29: 10.30, 11.30, 11.210 s 29(4): 2.340 s 30: 1.170, 10.20, 10.30, 11.30, 11.210, 11.230, 11.250, 11.280, 11.320 s 31: 10.30, 11.30, 11.280, 7.290 s 34: 10.30 s 36: 11.170 s 39: 10.30 s 41: 5.460, 10.10, 10.20, 10.30, 10.40, 11.30, 11.210, 11.250 s 42: 10.30 s 42(a)(i): 10.230 s 43: 10.30 s 44: 1.490, 10.30, 10.80, 11.240 s 44(i): 1.490, 3.50, 11.230, 14.430, 14.540 s 44(ii): 11.130, 11.230 s 44(iv): 1.200, 10.360 s 45: 7.50, 10.30 s 46: 10.30, 11.210 s 47: 10.30, 11.210 s 48: 10.30, 11.210 s 49: 1.170, 3.170, 3.200, 11.60 s 50: 11.210 s 51: 1.140, 1.410, 2.330, 2.460, 3.120, 3.340, 3.370, 3.400, 3.440, 4.10, 4.280, 4.400, 5.160, 5.390, 5.430, 5.450, 5.460, 5.550, 6.20, 6.90, 6.110, 6.140, 7.110, 7.130, 7.360, 7.370, 7.400, 8.120, 10.50, 10.140, 10.150, 10.170, 10.200, 10.250, 10.340, 11.30, 11.130, 11.210, 11.310, 12.10, 12.80, 12.120, 12.180, 12.210, 12.380, 13.170, 13.190, 13.230, 13.250, 13.290, 14.70, 14.580, 14.670, 14.700, 14.710, 14.730, 14.750, 14.780 s 51(i): 1.140, 3.330, 3.440, 5.10, 5.20, 5.40, 5.50, 5.80, 5.100, 5.120, 5.140, 5.160, 5.170, 5.220, 5.230, 5.240, 5.250, 5.290, 5.300, 5.310, 5.330, 5.360, 5.370, 5.390, 5.460, 5.520, 7.180, 7.320, 8.30,8.40, 9.130, 12.90, 12.110 s 51(ii): 3.330, 3.340, 3.370, 5.10, 7.10, 7.50, 7.60, 7.100, 7.110, 7.120, 7.130, 7.150, 7.160, 7.170, 7.180, 7.190, 7.200, 7.210, 7.220, 7.230, 7.250, 7.270, 7.290, 7.310, 7.320, 7.350,

Commonwealth of Australia Constitution Act 1900: 2.170, 2.210, 2.640, 2.690, 3.440, 8.120, 11.30, 11.230, 12.150, 13.250, 14.430, 14.540 s 1: 1.170, 1.490, 3.10, 3.100, 3.440, 7.60, 7.70, 11.30, 13.10, 13.250, 13.260 s 1(1): 10.110 s 2: 2.380, 3.10, 3.30, 3.110, 10.30, 10.160 s 3: 10.30 s 3(1): 10.120 s 3(2): 10.120 s 4: 1.410, 2.640, 3.120, 10.30 s 4B: 10.110 s 4C: 10.110 s 5: 1.410, 3.150, 3.330 s 5(2): 1.410 s 6: 1.170, 3.80, 3.170, 11.60 s 6(1)(e): 10.250 s 6A: 4.350 s 7: 1.170, 1.410, 3.290, 3.300, 3.330, 10.30, 10.250, 10.440, 11.10, 11.30, 11.60, 11.80, 11.110, 11.130, 11.150, 11.180, 11.210, 11.230, 11.250, 11.270, 11.280, 11.300, 12.340, 14.200, 14.250, 14.560 s 7(2): 3.300 s 8: 1.170, 1.410, 3.290, 3.340, 10.30, 11.30, 11.210, 11.230, 11.250 s 8(2): 3.300 s 9: 1.410, 5.460, 11.30, 11.210 s 9(1): 1.410, 6.160 s 9(2): 1.410 s 10: 1.410, 10.30, 11.30, 11.210, 11.250 s 10(1): 1.410 s 10(1)(c): 13.320 s 11: 1.410 s 11(5): 1.410 s 11.5(7): 4.430 s 12: 1.410, 12.340 s 12(3): 10.270 s 13: 1.170, 1.410 s 14: 1.410 s 15: 5.460, 11.30, 12.340 s 15(1): 1.410 s 16: 6.120 s 18(1): 4.240 s 18(2)(b): 4.240 s 19(1)(c): 5.460 s 20: 10.30 s 24: 1.170, 10.30, 10.230, 11.10, 11.30, 11.60, 11.80, 11.110, 11.130, 11.150, 11.180, 11.200, 11.210, 11.220, xxxv

Winterton’s Australian Federal Constitutional Law

Commonwealth of Australia Constitution Act 1900 — cont 7.360, 7.370, 9.70, 9.90, 9.100, 9.120, 9.130, 10.140, 10.440, 11.310, 11.320, 12.10, 12.80, 12.110, 12.150, 12.180, 12.250, 12.260 s 51(iii): 3.340, 5.10, 7.190, 7.200, 7.210, 7.360, 7.370, 9.70, 9.100, 9.130, 11.310, 11.320, 12.250 s 51(v): 1.410, 5.370, 5.390, 7.310, 11.210 s 51(vi): 1.410, 3.140, 5.70, 5.160, 5.460, 6.135, 6.140, 6.180, 6.210, 6.230, 6.250, 7.180, 7.290, 7.300, 10.250, 12.210, 12.380, 13.210, 14.720 s 51(vii): 5.520 s 51(ix): 12.110 s 51(xii): 3.140, 5.10 s 51(xiii): 5.10, 5.140, 5.460, 5.470, 5.520, 7.110, 7.290, 7.310, 12.10, 12.100, 12.180 s 51(xiv): 5.10, 5.460, 5.470, 7.290, 12.10, 12.80, 12.100 s 51(xv): 5.10, 12.110 s 51(xvi): 5.10 s 51(xvii): 5.470, 5.580, 10.170, 12.200, 12.380 s 51(xviii): 1.410, 5.10, 10.120, 10.170, 14.630, 14.680 s 51(xix): 3.120, 4.400, 5.390, 11.320, 11.330, 13.170, 13.200, 14.540 s 51(xx): 3.370, 3.400, 5.10, 5.150, 5.250, 5.340, 5.350, 5.360, 5.370, 5.375, 5.380, 5.390, 5.410, 5.420, 5.430, 5.440, 5.450, 5.460, 5.470, 5.480, 5.490, 5.500, 5.510, 5.520, 5.530, 5.540, 5.550, 5.560, 5.570, 5.580, 5.590, 5.600, 5.620, 6.110, 12.80, 12.90, 12.240, 14.70, 14.700, 14.830 s 51(xxi): 10.170 s 51(xxii): 7.80, 10.170 s 51(xxiii): 3.340 s 51(xxiiiA): 3.340, 3.370, 3.400 s 51(xxiv): 2.510 s 51(xxv): 5.390 s 51(xxvi): 1.540, 1.550, 4.310, 5.390, 5.410, 6.90, 6.110, 11.320, 11.330 s 51(xxvii): 3.120, 5.460, 12.110, 13.190 s 51(xxviii): 3.120 s 51(xxix): 1.140, 3.330, 4.310, 5.140, 5.460, 6.10, 6.20, 6.60, 6.80, 6.90, 6.110, 6.135, 6.140, 6.150, 6.170, 8.80, 10.250, 11.250, 12.130, 12.240 s 51(xxxi): 1.410, 5.460, 5.470, 6.110, 7.10, 7.160, 7.350, 7.390, 7.400, 7.410, 10.10, 10.50, 10.60, 10.80, 10.90, 10.110, 10.120, 10.130, 10.140, 10.150, 10.160, 10.170, 10.180, 10.190, 10.200, 10.210, 10.220, 10.230, 10.240, 10.250, 10.460, 12.10, 12.100 xxxvi

s 51(xxxii): 5.460 s 51(xxxiii): 5.460, 13.290 s 51(xxxiv): 5.460 s 51(xxxv): 1.140, 5.10, 5.160, 5.390, 5.460, 5.470, 12.120, 12.200, 12.210, 12.220, 12.240, 12.380, 13.240, 13.250, 14.740, 14.830 s 51(xxxvi): 3.30, 3.370, 7.400, 10.30, 10.230, 10.240, 11.230, 11.250, 11.280 s 51(xxxvii): 3.370, 3.400, 5.160, 5.520, 5.540, 5.560, 7.80, 7.290, 11.30, 13.290 s 51(xxxviii): 1.490, 2.150, 2.170, 2.330, 5.460, 13.290 s 51(xxxix): 1.410, 3.30, 3.310, 3.320, 3.330, 3.340, 3.350, 3.360, 3.370, 3.400, 5.100, 5.160, 5.370, 5.390, 6.210, 6.250, 7.80, 7.170, 7.290, 7.310, 7.400, 7.430, 13.230, 13.250, 13.290, 14.730, 14.740 s 51A: 1.560 s 52: 3.370, 3.440, 4.10, 5.390, 5.460, 10.340, 11.130, 12.80, 12.180, 14.670 s 52(i): 7.10, 7.180, 7.220, 7.230, 13.540 s 52(ii): 12.300, 12.380 s 53: 1.200, 2.210, 3.270, 3.280, 3.290, 3.300, 3.370, 3.420, 7.10, 7.20, 7.30, 7.60, 7.70, 7.80, 7.150, 7.160, 9.10 ss 53 to 55: 7.10, 7.60 ss 53 to 56: 3.400, 7.60 s 57: 1.200, 7.10 s 54: 3.270, 3.280, 3.290, 3.370, 7.10, 7.30, 7.50 s 54(2): 7.50 s 55: 1.410, 3.270, 3.280, 7.10, 7.30, 7.60, 7.70, 7.75, 7.80, 7.110, 7.150, 7.160, 7.290, 9.10, 9.30, 9.60, 9.120, 9.130, 10.140, 11.210, 12.380 s 56: 11.210 s 57: 3.280, 11.210 s 58: 11.210 s 59: 3.180, 11.210 s 61: 3.10, 3.30, 3.50, 3.100, 3.110, 3.120, 3.130, 3.140, 3.150, 3.180, 3.210, 3.300, 3.320, 3.330, 3.340, 3.370, 3.380, 3.400, 3.420, 3.440, 5.480, 6.60, 6.210, 6.250, 7.170, 7.400, 7.420, 7.430, 10.230, 11.30, 12.380, 13.10, 13.200, 13.230, 13.250, 13.260 s 62: 1.170, 1.200, 3.30, 3.170, 3.210, 5.390, 11.30, 11.60, 12.380 ss 62 to 65: 3.10 s 63: 1.200, 5.390 s 64: 1.170, 1.200, 1.210, 3.10, 3.30, 3.170, 3.300, 3.370, 11.10, 11.30, 11.60, 11.130, 11.180, 12.380, 12.400, 13.230, 13.320 s 65: 4.240, 10.30, 11.210 s 66: 10.30, 11.210

Table of Statutes

Commonwealth of Australia Constitution Act 1900 — cont s 67: 3.30, 10.30 s 69: 3.30, 9.130, 12.300 s 70: 3.100 s 71: 2.510, 2.590, 2.640, 3.10, 3.100, 3.440, 12.260, 13.10, 13.20, 13.40, 13.60, 13.100, 13.110, 13.140, 13.230, 13.250, 13.260, 13.290, 13.370, 13.470, 13.520, 13.540, 13.560 s 72: 2.530, 3.10, 13.20, 3.370, 13.40, 13.50, 13.60, 13.110, 13.250, 13.270, 13.320 s 73: 2.510, 2.520, 2.630, 2.660, 2.670, 3.30, 3.100, 10.30, 13.220, 13.250 s 73(1): 11.210 s 73(2): 11.210 s 74: 3.100, 14.560 s 75: 3.30, 3.100, 6.110, 13.220, 13.250, 13.290 s 75(iii): 3.30, 12.380 s 75(iv): 10.440, 12.380 s 75(v): 3.30, 3.150, 3.190, 10.360, 13.90 ss 75 to 77: 13.230 s 76: 2.600, 13.220, 13.230, 13.250, 13.290 s 76(2): 2.600 s 77: 2.510, 13.290 s 77(i): 13.110, 13.370 s 77(ii): 2.510, 13.250 s 77(iii): 2.510, 2.520, 2.540, 2.550, 2.580, 2.590, 2.640, 5.460, 12.10, 13.100, 13.110, 13.250, 13.290, 13.560 s 78: 2.510, 3.100, 12.10, 12.380 s 79: 2.510, 2.520, 3.100, 12.10, 13.110 s 80: 2.510, 4.430, 10.10, 10.30, 10.260, 10.270, 10.280, 10.290, 10.460, 11.210, 13.140, 13.150 s 81: 3.80, 3.270, 3.280, 3.300, 3.310, 3.320, 3.330, 3.370, 3.400, 7.60, 7.70, 7.80, 7.160, 7.400, 12.10, 12.380 ss 81 to 83: 3.400, 7.60, 7.70 s 82: 7.60, 7.80, 12.380 s 83: 1.170, 3.80, 3.170, 3.270, 3.280, 3.290, 3.300, 3.330, 3.340, 3.370, 3.400, 7.60, 7.70, 7.160, 7.400, 11.60, 12.10, 12.380 s 84: 3.400, 13.290 s 85: 3.400 s 86: 9.60, 9.90, 9.130, 11.310 ss 86 to 91: 3.400 s 87: 1.140, 7.270, 7.290, 7.310, 9.60, 9.90, 10.30 s 88: 7.190, 9.10, 9.70, 9.130, 11.320 s 89: 7.290 ss 89 to 91: 8.40 s 90: 1.140, 4.10, 7.60, 7.110, 7.120, 7.200, 7.270, 7.320, 7.360, 8.40, 8.120, 9.10, 9.20, 9.30, 9.50, 9.60, 9.70, 9.80, xxxvii

9.90, 9.100, 9.110, 9.120, 9.130, 9.140, 9.150, 11.130, 11.310, 12.10, 14.710 s 91: 3.140, 9.130, 9.150, 14.700 s 92: 1.410, 3.400, 5.20, 5.40, 5.160, 5.280, 5.290, 5.520, 5.530, 6.10, 6.90, 6.130, 7.10, 7.200, 7.290, 7.360, 8.10, 8.20, 8.30, 8.40, 8.50, 8.60, 8.80, 8.90, 8.100, 8.110, 8.120, 8.140, 8.150, 8.160, 8.170, 8.180, 9.70, 9.90, 9.120, 9.130, 10.10, 10.410, 10.430, 10.440, 11.110, 11.130, 11.180, 11.190, 11.300, 11.310, 11.320, 12.260, 14.70, 14.700 s 93: 7.290, 9.60, 9.90, 9.120, 9.130, 10.30 s 93(8AA): 11.230 ss 93 to 95: 8.40 ss 93 to 96: 3.400 s 94: 3.340, 3.370, 7.290 s 95: 9.120 s 96: 1.140, 3.320, 3.340, 3.360, 3.370, 3.400, 3.420, 7.220, 7.270, 7.290, 7.300, 7.310, 7.320, 7.330, 7.340, 7.350, 7.360, 7.370, 7.380, 7.390, 7.400, 7.420, 9.150, 10.30, 10.230, 10.240, 12.10 s 97: 10.30 s 98: 5.120, 12.10 s 99: 1.410, 3.340, 6.90, 7.10, 7.180, 7.190, 7.200, 7.210, 7.220, 7.230, 7.240, 7.250, 7.290, 7.350, 7.360, 8.40, 10.440, 11.310, 11.320 s 100: 5.410, 7.180, 10.440 s 101: 5.460, 13.20 s 102: 5.460, 8.40, 12.10, 12.260, 13.20 s 103: 5.460 s 103(ii): 13.20 s 105: 7.290, 13.290 s 105A: 7.290, 12.10, 12.280, 13.290 s 106: 2.130, 2.140, 2.280, 2.330, 2.640, 4.380, 7.290, 11.30, 11.130, 11.210, 11.300, 12.10, 12.210, 12.220, 12.380, 13.290 ss 106 to 107: 12.10 s 106 to 108: 3.140 s 107: 2.130, 2.140, 2.280, 2.330, 4.310, 4.380, 5.460, 6.90, 7.290, 9.10, 11.30, 11.130, 11.300, 12.90, 12.120, 12.180, 12.310, 12.380, 13.290, 14.710 s 108: 4.380, 5.460, 11.30, 12.180 s 109: 1.140, 2.90, 2.130, 2.140, 2.330, 2.460, 3.120, 3.340, 3.360, 3.370, 4.10, 4.20, 4.30, 4.40, 4.60, 4.80, 4.100, 4.110, 4.140, 4.160, 4.170, 4.200, 4.240, 4.310, 4.320, 4.330, 4.350, 4.360, 4.370, 4.380, 4.410, 4.430, 4.440, 4.450, 4.460, 5.460, 5.520, 6.60, 7.230, 8.30, 8.150, 9.10, 9.90, 9.130, 11.30, 12.10, 12.120,

Winterton’s Australian Federal Constitutional Law

Commonwealth of Australia Constitution Act 1900 — cont 12.180, 12.220, 12.300, 12.310, 12.330, 12.340, 12.380, 12.390, 12.400, 13.290, 14.700 s 111: 5.460, 10.250, 11.30, 13.290 s 114: 3.140, 3.340, 4.10, 6.90, 7.290, 10.440, 12.10, 12.260, 12.380 s 115: 3.140, 4.10, 10.440 s 116: 1.410, 3.360, 6.10, 6.90, 6.130, 7.330, 7.350, 7.390, 7.400, 10.10, 10.250, 10.300, 10.310, 10.320, 10.330, 10.340, 10.360, 10.370, 10.380, 10.440, 10.460, 11.310 s 117: 3.340, 6.90, 7.200, 7.290, 8.120, 10.10, 10.110, 10.250, 10.390, 10.400, 10.410, 10.420, 10.430, 10.440, 10.450, 11.310, 11.320, 12.260 s 117J: 10.110 s 117J(11): 10.110 s 118: 2.510 s 119: 10.440, 13.290 s 120: 9.60, 10.440, 13.290 s 121: 11.210 s 122: 3.100, 3.370, 4.10, 5.40, 5.160, 5.170, 5.360, 5.370, 5.390, 5.460, 7.80, 10.240, 10.250, 10.300, 11.30, 11.210, 11.320, 11.330, 13.250, 14.830 s 123: 5.460, 11.30 s 124: 11.30 s 124C: 11.210 s 125: 3.100 s 127: 11.320 s 128: 1.170, 1.210, 1.470, 2.170, 2.210, 2.330, 5.460, 10.30, 10.460, 11.10, 11.30, 11.60, 11.130, 11.180, 11.210, 11.300, 12.270, 14.580 s 129: 11.210 s 171: 5.460 s 189: 14.580 s 196: 14.580 s 198: 14.580 s 221: 7.310 s 299(1)(d)(ii): 14.740 Ch I: 2.560, 3.30, 3.120, 3.370, 3.440, 11.210, 13.10, 13.250, 14.160, 14.410 Ch I, Pt II: 11.210, 14.290 Ch I, Pt III: 11.210 Ch II: 2.560, 3.10, 3.20, 3.30, 3.120, 3.370, 3.440, 11.210, 13.10, 13.250, 14.160 Ch III: 1.410, 2.500, 2.510, 2.520, 2.530, 2.550, 2.560, 2.570, 2.590, 2.610, 2.640, 2.650, 2.670, 2.690, 2.700, 3.10, 3.30, 3.100, 3.120, 3.150, 3.370, 3.440, 5.460, 10.460, 11.180, 11.210, 11.310, 11.320, 11.330, 12.260, 13.10, 13.20, 13.30, 13.40, 13.80, 13.110, 13.120, 13.130, 13.140,

13.150, 13.170, 13.190, 13.200, 13.210, 13.220, 13.230, 13.240, 13.250, 13.260, 13.270, 13.280, 13.290, 13.300, 13.320, 13.330, 13.350, 13.370, 13.390, 13.440, 13.450, 13.460, 13.470, 13.490, 13.510, 13.530, 13.540, 13.560, 14.160, 14.430 Ch IV: 3.370, 3.400, 7.60, 8.40, 8.120, 9.120 Ch V: 3.100, 10.440, 11.210 Ch VI: 3.100 Ch VIA: 10.460 Ch IX: 11.210 Pt I: 14.160 Pt II: 14.160, 14.190 Pt III: 14.160, 14.190 Pt IV: 10.30, 14.160, 14.190 Pt V: 14.160

COMMONWEALTH Aboriginal and Torres Strait Islander Heritage Protection Act 1984 s 10: 13.320 s 10(1): 13.320 s 10(1)(c): 13.320 s 10(3): 13.320 s 10(4): 13.320 s 10(4)(c): 13.320 s 10(4)(d): 13.320 s 10(4)(f): 13.320 s 10(4)(g): 13.320 Acts Interpretation Act 1901 s 1: 14.830 s 6: 14.820 s 6(1): 14.830 s 8: 14.830 s 15A: 5.40, 5.50, 5.160, 5.430, 6.135, 12.240, 14.800, 14.810, 14.820, 14.830 s 15C: 13.370 Pt 7: 14.830 Pt 8: 14.830 Pt 9: 14.830 Pt 10: 14.830 Pt 12, Div 4: 14.830 Acts Interpretation Act 1904 s 4: 10.270 Agricultural Marketing Agreement Act 1937: 5.200 Air Force Act 1923: 12.300 Air Navigation Act 1920 s 4: 6.80 Air Navigation Regulations 1921: 5.140 reg 6: 5.120 reg 6(1)(f): 5.140

xxxviii

Table of Statutes

Air Navigation Regulations 1921 — cont reg 19B: 5.160 reg 19H: 5.160 reg 198: 5.140, 5.150 reg 199: 5.140, 5.150 reg 199(4): 5.140 reg 200B: 5.140, 5.150, 5.160 Pt XIII: 5.140 Airline Pilots Agreement 1978: 4.180 Anti-Discrimination Act 1975: 4.350 Pt II: 4.350 Appropriation Act (No 1) 1974–1975: 3.320 Appropriation Act (No 1) 2005–2006 s 1: 3.290 Appropriation Act (No 3) 2006–2007: 3.370 Appropriation (HIH Assistance) Act 2001: 3.370 Australia Act 1986: 1.440, 1.470, 1.490, 1.500, 2.10, 2.110, 2.170, 2.180, 2.110, 2.150, 2.170, 2.180, 2.240, 2.250, 2.290, 2.320, 2.330, 2.340, 2.450, 2.470, 2.490, 2.640, 3.50, 3.340, 11.30, 14.540 s 1: 1.490, 3.50 ss 1 to 15: 2.160 s 2: 2.170, 2.470 s 2(1): 2.170, 2.450, 2.480, 2.490 s 2(2): 2.55, 2.170, 2.220, 2.240, 2.250, 2.310, 2.320, 2.450, 2.640 s 3: 2.170, 2.450 s 3(2): 2.170 s 4: 2.170 s 5: 2.170 s 5(a): 2.480 s 5(b): 2.240 s 6: 2.170, 2.180, 2.250, 2.290, 2.300, 2.310, 2.320, 2.330, 2.340, 2.350, 2.430 s 7: 2.170 s 8: 2.170 s 9: 2.170 s 9(1): 2.170 s 9(2): 2.170 s 15: 2.170, 2.240 s 15(3): 2.170 Pt 4A: 2.490 Australia Acts (Request) Act 1985: 2.640 Australian Bicentennial Authority Act 1980 s 22: 14.740 s 22(1)(a): 14.740 s 22(6)(d)(i): 14.740 s 22(6)(d)(ii): 14.740 s 299(1)(d)(ii): 14.740 Australian Capital Territory (Self-Government) Act 1988: 4.10

Australian Citizenship Act 1948: 14.660 Australian Citizenship Act 2007: 11.230 Australian Industries Preservation Act 1906: 5.460 s 4: 5.280 s 4(1): 5.280 s 5: 5.550 s 8: 5.550 Australian National Airlines Act 1945: 5.40, 5.160 s 4: 5.40 s 15A: 5.160 s 19: 5.40, 5.160 s 19(1): 5.40, 5.160 s 19(1)(a): 5.160 s 19(2): 5.40, 5.160 s 19(2)(a): 5.160 s 19(2)(b): 5.160 s 19(2)(c): 5.160 s 19(2)(d): 5.160 s 19B: 5.160, 5.170 s 19B(1): 5.160 s 19B(2): 5.160, 5.170 s 46: 5.40 s 46(1): 5.40 s 46(2): 5.40 s 47: 5.40 s 47(a): 5.40 s 47(b): 5.40 s 92: 5.40 s 122: 5.160 Pt XIII, Div: 5.140 Pt II, Div: 5.40 Pt IV: 5.40 Australian Securities Commission Act 1989 s 171: 13.60 s 172: 13.60 Banking Act 1945 s 48: 12.180, 12.200, 12.260 s 48(3): 12.180 Banking Act 1947: 12.190 s 92: 12.190 Bankruptcy Act 1966: 13.250 Beverage Container Act 1975 s 5B(2): 8.80 Bribery Amendment Act 1958: 2.340 Broadcasting Act 1942: 11.40, 11.110 s 95B: 11.30 s 95C: 11.30 s 95D: 11.30 s 168: 11.110 s 169: 11.110 s 214: 11.110 Pt IIID: 11.30, 11.40, 11.110 xxxix

Winterton’s Australian Federal Constitutional Law

Broadcasting Services Act 1992: 13.80 s 139(3): 13.80 s 140A(3): 13.80 s 141: 13.80 s 141(1): 13.80 s 143(1): 13.80 s 143(1)(b): 13.80 Sch 2, cl 8: 13.80

Commerce (Meat Export) Regulations: 4.200, 5.230, 5.250 s 4B: 5.230 s 5: 4.210, 5.230 reg 6(2): 4.200 Commerce (Trade Descriptions) Act 1905: 10.120 s 3: 10.120

Broadcasting and Television Act 1942: 4.220 s 15(1)(e): 4.220 s 42: 4.220 s 43(2): 4.220 s 43(6): 4.220 s 45: 4.220 s 46: 4.220 s 47: 4.220 s 48: 4.220 s 48A: 4.220 s 49: 4.220 s 50: 4.220 s 51: 4.220 s 52: 4.220 s 54: 4.220 s 55: 4.220 s 56: 4.220 s 57: 4.220 s 57(1): 4.220 s 57(3): 4.220 s 57(4): 4.220 s 58: 4.220 Pt III, Div 2: 4.220

Commonwealth Conciliation and Arbitration Act 1904–1928: 4.140, 12.120, 13.20 s 44: 4.140 Commonwealth Electoral Act 1902: 11.180

Child Support (Registration and Collection Act) 1988: 7.80 s 3: 7.80 s 10: 7.80 s 17: 7.80 s 30: 7.80 s 76: 7.80

Commonwealth Electoral Act 1918: 1.490, 3.50, 10.30, 10.40, 11.110, 11.210, 11.230 s 4(1A): 11.230 s 6: 11.250 s 7: 11.250 s 39(5): 10.30 s 45(a): 10.30 s 93: 11.300 s 93(8): 11.230 s 93(8AA): 11.230 s 106: 11.250 s 208(2)(c): 11.230 s 240: 11.280 s 268: 11.280 s 268(1): 11.280 s 268(1)(c): 11.280 s 268(3): 11.280 s 270: 11.280 s 270(2): 11.280 s 270(3): 11.280 s 274: 11.280 s 325: 11.280 s 325A: 11.280 s 326: 11.280 s 329: 11.280 s 329A: 11.280 s 330: 11.280 s 340: 11.280

Circuit Layouts Act 1989: 10.160

Commonwealth Electoral Act 1973: 11.210

Civil Aviation Act 1988: 7.50 s 66(1): 7.50 s 66(2)(a): 7.50 s 67: 7.50 s 69: 7.50 s 72: 7.50 s 73: 7.50

Commonwealth Electoral Legislation Amendment Act 1983: 11.270

Building Industry Act 1985: 13.430 Cancellation of Registration Act: 13.430

Commonwealth Electoral (Wartime) Act 1917 s 14: 4.60 Commonwealth Employees’ Rehabilitation and Compensation Act 1988 s 44: 10.80

Civil Aviation Regulations 1988 reg 100(1): 7.50

Commonwealth Franchise Act 1902: 10.30, 10.40

Claims against the Commonwealth Act 1902: 12.310

Commonwealth Grants Commission Act 1933 s 12: 7.400 s 13: 7.400

Clean Energy Act 2011: 7.240 Sch 1, Pt 3, Div 48: 7.240 xl

Table of Statutes

Copyright Amendment Act 1989: 7.60

Commonwealth Places (Mirror Taxes) Act 1998: 7.10, 7.220, 7.230 s 6(2): 7.220 s 23(4): 7.220

Corporations Act 1989: 5.540, 5.560 s 56(2): 12.400 s 82: 5.540 s 161(1): 5.560 s 162: 5.560

Commonwealth Salaries Act 1907: 12.400 Communist Party Dissolution Act 1950: 1.410, 1.420, 6.210, 13.150 s 4: 6.210 s 5: 6.210 s 5(1): 6.210 s 5(2): 6.210 s 6: 6.210 s 9: 6.210 s 10: 6.210 s 11: 6.210 s 12: 6.210 s 14: 6.210

Corporations Act 2001: 5.520, 5.550, 5.560, 13.70, 13.300 s 3: 5.560 s 4: 5.560 s 9: 5.550 s 67D: 13.70 s 112: 5.540 ss 114 to 125: 5.550 s 119: 5.540 s 123(2): 5.550 s 124(1): 3.370 s 153(1): 5.550 s 153(2): 5.550 s 153(3): 5.550 s 153(4): 5.550 s 153(5): 5.550 ss 153 to 155: 5.550 s 156: 5.550 s 158: 5.550 s 184(1): 13.450 s 657A(2): 13.70 Pt 2.2: 5.550 Div 1: 5.550

Compensation (Commonwealth Employees) Act 1971: 10.80 Competition and Consumer Act 2010: 5.370 Conciliation and Arbitration Act 1904: 1.410, 4.140, 4.170, 4.430, 5.520, 12.280, 13.250 s 28(3): 4.180 s 58: 5.460 s 65: 4.380 s 106: 12.280 s 140: 13.370

Corporations (Commonwealth Powers) Act 2001: 13.300

Conciliation and Arbitration (Electricity Industry) Act 1985: 12.200 s 6: 12.200 s 6(1): 12.200, 12.210 s 6(2): 12.200 s 7: 12.200 s 8: 12.200, 12.210 s 8(1): 12.200 s 9: 12.200, 12.210 s 9(1): 12.200 s 9(6): 12.200

Corporations Law s 731: 13.60 s 732: 13.60 s 733: 13.60 s 733(1): 13.60 s 733(3)(a): 13.60 s 733(3)(b): 13.60 s 733(5): 13.60 s 734: 13.60 s 734(1): 13.60

Controlled Substances Act 1970: 5.330

Crimes Act 1914 s 2: 13.140 s 3: 11.130, 13.140 s 4C(2): 4.430 s 4G: 4.430 s 5: 5.390 s 15G(1)(a): 13.470 s 15G(2): 13.470 s 15H: 13.470 s 15I: 13.470 s 15I(1): 13.470 s 15I(3): 13.470 s 15V(1): 13.470 s 15X: 13.470 s 23B: 11.130 s 24A: 3.320

Copyright Act 1968: 7.70 s 33: 10.120 s 34: 10.120 ss 93 to 96: 10.120 s 135ZZM(1): 7.60 s 135ZZP: 7.60 s 153E: 7.60 s 180: 10.120 s 181: 10.120 s 195AM: 10.120 s 195ANA: 10.120 s 233: 10.120 s 234: 10.120 Pt VC: 7.60 Copyright Act 1989: 7.70 xli

Winterton’s Australian Federal Constitutional Law

Crimes Act 1914 — cont s 24A(i)(c): 6.20 s 24B: 3.320 s 24D: 3.320 s 29A(1): 3.370 s 29B: 3.370 s 50BA: 6.20 s 50BC: 6.20 s 50GA: 4.290 s 86: 13.140 s 138: 13.470 s 233B: 13.470 Pt 1AA, Div 2 to 4: 11.130 Pt 1AB: 13.470 Pt 1AB, Div 2: 13.470 Pt 1AB, Div 3: 13.470 Pt 1C: 11.130

s 268.120: 4.430 s 270.12: 4.430 s 360.4: 4.430 s 400.16: 4.430 s 417.2: 11.150 s 417.12: 11.150, 11.160 s 471.12: 11.150 s 472.1: 4.430 s 475.1: 4.430 s 476.4: 4.430 Ch 2: 4.430 Ch 7: 4.430 Pt 5.3: 13.370 Pt 5.3, Div 104: 2.640 Div 104: 6.160, 6.250, 6.260, 13.350 Div 135: 3.370 Criminal Law (Special Provisions) Act, No 1 of 1962: 13.410 s 17: 13.410 s 21: 13.410, 13.420

Crimes Act 1926 s 16: 3.370 Crimes Amendment (Controlled Operations) Act 1996: 13.470

Crown Debts (Priority) Act 1981: 12.400

Crimes (Superannuation Benefits) Act 1989: 10.160

Customs Act 1901: 4.200, 5.290, 10.140, 10.280, 13.470 s 112: 5.80 s 233B: 13.470

Criminal Code: 2.640 s 3.1(1): 11.150 s 4.1(1)(a): 11.150 s 4.1(1)(c): 11.150 s 4.1(2): 11.150 s 5.4(4): 11.150 s 5.6(1): 11.150 s 5.6(2): 11.150 s 11: 4.430 s 11.5: 4.430 s 11.5(1): 4.430 s 11.5(2): 4.430 s 11.5(5): 4.430 s 60A: 2.710 s 60B: 2.710 s 60C: 2.710 s 70.6: 4.430 s 71.19: 4.430 s 72.5: 4.430 s 100.1: 6.250 s 101.1: 2.640 s 102.5: 2.640 s 104: 13.350 s 104.1: 13.350 s 104.4(2): 13.370 s 104.4: 2.640, 13.350, 13.370 s 104.4(1): 13.370 s 104.4(1)(c): 2.640 s 104.4(1)(c)(i): 13.370 s 104.4(1)(d): 2.640, 13.370 s 130.2(1)(a): 4.430 s 131.1: 4.430 s 131.1(1): 4.430 s 131.1(1)(b): 4.430 s 261.1: 4.430

Defence Force Discipline Act 1982 s 40(2): 4.430 s 136(b): 3.150 s 190(3): 12.210 s 190(5): 12.210 Defence Housing Authority Act 1987: 4.280, 12.380 Defence Preparations Act 1951: 6.230 s 4: 6.230 Defence Preparations (Capital Issues) Regulations 1951: 6.230 s 16: 6.230 s 17: 6.230 Designs Act 2003 s 46: 10.120 s 47: 10.120 Electoral Act 1918: 11.270 s 155: 11.250 Electoral and Referendum Amendment Act 1992 s 27: 11.280 Electoral and Referendum Amendment (Electoral Integrity and Other Measures) Act 2006: 11.230, 11.250 Electricity Act 1976 s 67: 12.200 s 171: 12.200 xlii

Table of Statutes

Environmental Planning and Assessment Act 1979 s 26: 11.180 s 37: 11.180 ss 89D to 89E: 11.180 Pt 3, Div 4: 11.180 Equal Opportunity Act 1977: 4.240 Evidence Act 1995 s 138(1): 13.470 Excise Tariff Act 1902: 7.210 s 5: 7.210 Excise Tariff Act 1906: 7.110, 7.120 s 2: 7.110

Financial Framework Legislation Amendment Act (No 3) 2012: 3.390 Financial Management and Accountability Act 1997: 7.160 s 32B: 3.390, 3.400, 3.450, 5.480 s 44: 3.370 Financial Management and Accountability Amendment Act 1997: 3.390 Fisheries Management Act 1991 s 106: 10.160 s 106(1)(a): 10.160 Flour Tax Relief Act 1938: 7.360 Gun-Free School Zones Act 1990: 5.310

Extradition Act 1988 Pt II: 13.200

Health Insurance Act 1973: 10.180

Extradition (Foreign States) Act 1966: 3.120 s 21: 3.120

Health Insurance (Pathology Services) Amendment Act 1991: 10.180 s 20A: 10.180

Fair Work Act 2009: 5.520, 13.510 Fair Work (Registered Organisations) Act 2009: 13.510 s 6: 13.510 s 26A: 13.450, 13.510, 13.520 s 171A: 13.510 Family Law Act 1975 s 37A: 13.110 s 68B: 13.370 s 79: 13.110 s 114: 4.110, 13.350, 13.370 s 123: 13.110 Family Law (Child Abduction Convention) Regulations 1986: 6.50 Family Law Rules 2004 O 36A, r 2: 13.110 O 36A, r 2(1): 13.110 O 36A, r 7(4): 13.110 Federal Aid Roads Act 1926: 7.290, 7.310, 7.400 Federal Airports Corporation Regulations r 9(2): 4.290 reg 9(2): 4.320 Federal Court Rules 1979 O 11, r 23: 13.40 Federal Court of Australia Act 1976 s 31A: 10.240 s 31A(2): 10.240 s 53: 13.40 Federal Courts (State Jurisdiction) Act 1999: 13.300 s 6: 13.300 Federal Magistrates Act 1999: 13.120

Heritage Properties Conservation Act 1983 s 3(2): 6.135 s 6(2): 6.135 s 6(3): 6.135 s 9: 6.135 s 9(1): 6.135 s 9(2): 6.135 s 13(1): 6.135 s 21: 6.135 Human Rights (Parliamentary Scrutiny) Act 2011: 10.460 Immigration Restriction Act 1901: 3.150 Income Tax (Arrangements with the States) Act 1978: 7.320 Income Tax Assessment Act 1936: 4.440, 10.140 s 31: 7.290 s 72(1): 7.210 Income Tax Assessment Act 1942: 7.280, 7.290, 7.300, 7.310 s 31: 7.280 Income Tax Assessment Act 1997: 7.130 s 53: 7.30 Ch III: 13.350 Income Tax Regulations 1936 reg 177: 12.270 Income Tax (War-Time Arrangements) Act 1942: 7.280, 7.290, 7.300 Income Tax and Social Services Contribution Assessment Act 1936–1956: 7.310 s 221(1): 7.310 s 221(1)(a): 7.310, 7.320 Pt III, Div 9B: 7.130 xliii

Winterton’s Australian Federal Constitutional Law

Pt XII: 13.230

Independent Commission Against Corruption Act 1988 s 8(2): 13.450 s 13: 13.450 Sch 4, Pt 13: 13.450

Judiciary (Diplomatic Representation) Act 1942 s 3: 13.310 Juries Act 2000 s 46: 4.430

Industrial Relations Act 1988: 5.430, 5.460, 6.150, 12.210, 12.220, 12.240 s 4(1A): 5.430 s 6: 12.40, 12.240 s 7A(1): 12.240 s 111: 12.220, 12.230 s 127A: 5.430 s 127B: 5.430 s 127C: 5.430 s 152: 4.30 s 170AE: 12.240 s 170AH: 12.240 s 170DB: 12.240 s 170DC: 12.240 s 170DD: 12.240 s 170DE(1): 12.240 s 170DF: 12.240 s 170DG: 12.240 s 170FA: 12.240 s 299(1): 11.40 Pt VIA: 12.240

Jurisdiction of Courts (Cross-vesting) Act 1987 s 9(2): 12.400, 13.290 Law and Justice Legislation Amendment Act 1993: 13.40 Lemonthyme and Southern Forests (Commission of Inquiry) Act 1987: 6.120 Life Insurance Act 1945: 4.270, 13.370 s 59: 13.370 s 78: 4.270 Maritime Powers Act 2013 s 3: 3.150 s 5: 3.150 s 72(4): 3.150 s 74: 3.150 Matrimonial Causes Act 1959: 13.370, 13.450 s 84: 13.370 s 86: 13.370 s 87: 13.370

Industrial Relations Amendment Act (No 2) 1994: 6.150

Matrimonial Causes Act 1971 s 5: 13.450

Industrial Relations Legislation Amendment Act (No 2) 1992: 12.220 s 5(b): 12.220

Migration Act 1958: 3.120, 3.150, 6.40, 7.10, 13.190, 13.200 s 4: 3.120 s 4B: 13.170 s 8: 3.120 s 12A: 3.120 s 31: 3.150 s 32: 3.150 s 34A: 7.10, 7.30 s 42: 3.150, 6.40 s 54L: 13.170 s 54N: 13.170 s 54P: 13.170, 13.180 s 54Q: 13.170 s 54R: 13.390, 13.470, 13.490 s 61: 3.120 s 81: 7.30 s 135ZZM: 7.60 s 189: 3.120, 13.190, 13.200 s 196: 13.190, 13.200 s 198: 3.120, 13.190 s 198AHA: 3.20, 6.40, 13.200 s 199: 3.120 ss 200 to 206: 3.120 s 229: 3.150 s 233A: 3.150 s 233C: 3.150 s 245B(2): 3.120 s 245C: 3.120

Industrial Relations Reform Act 1993: 6.150 Insurance Act 1973 s 100: 4.290 Judiciary Act 1903 s 3: 13.310 s 18: 13.40 s 23: 11.150 s 23(2)(b): 4.200 s 30: 13.230 s 30(a): 2.710 s 40(1): 10.280 s 56: 12.360 s 64: 12.340, 12.370, 12.380, 12.400 s 68: 13.540 s 79: 12.310, 12.340, 12.400, 13.450 s 79(1): 13.450 s 80: 12.340, 12.400 s 81: 13.350 s 88: 13.230 ss 88 to 94: 13.230 s 89: 13.230 s 90: 13.230 s 91: 13.230 s 92: 13.230 s 93: 13.230 xliv

Table of Statutes

Migration Act 1958 — cont s 245F: 3.120 s 249: 3.120 Pt 2, Div 6: 6.40 Pt 2, Div 7: 6.40 Pt 2, Div 8: 6.40 Pt 2A: 8.180 Pt 12A, Div 12A: 3.120 Div 4B: 13.170

Natural Resources Management (Financial Assistance) Act 1992: 10.240 Navigation Act 1912: 4.480, 13.230 s 329: 4.480, 4.490 Northern Australia Act 1926: 11.320 Northern Territory Acceptance Act 1910: 11.320 Northern Territory (Administration) Act 1910: 11.320

Migration Amendment Act 1987: 7.10 s 7: 7.30

Northern Territory (Self-Government) Act 1978: 4.10, 10.150 s 49: 8.150 s 50: 10.90

Minerals Resource Rent Tax Act 2012: 7.230 Minerals Resource Rent Tax (Imposition–Customs) Act 2012: 7.230

Parliamentary Contributory Superannuation Act 1948: 10.190

Minerals Resource Rent Tax (Imposition–Excise) Act 2012: 7.230

Patents Act 1990: 13.250 s 67: 10.120 s 68: 10.120

Minerals Resource Rent Tax (Imposition–General) Act 2012: 7.230

Patient Protection and Affordable Care Act 2010: 5.330

Motor Vehicle Standards Act 1989 s 5(1): 5.620 Narcotic Drugs Act 1967: 6.90

Pay-roll Tax Assessment Act 1941: 12.310 s 28(1): 12.310

National Airlines Act 1945 s 19B: 5.160

Petroleum (Australia–Indonesia Zone of Co-operation) Act 1990: 6.20, 10.190

National Parks and Wildlife Conservation Act 1975: 10.100 s 100(1A): 10.100

Petroleum (Submerged Lands) Act 1967: 10.190

National Security Act 1939: 1.280, 10.60, 13.370

Political Broadcasts and Political Disclosures Act 1991: 11.30, 11.110

National Security (Contracts Adjustment) Regulations: 13.370

Post and Telegraph Act 1901–1961: 12.330

Pharmaceutical Benefits Act 1944: 3.310

Poultry Industry Levy Collection Act 1965: 7.210 s 3: 7.220 s 6: 7.210, 7.220

National Security (General) Regulations 1939 reg 54: 10.60 reg 60H: 10.60, 10.70 s 26: 2.510

Racial Discrimination Act 1975: 1.540, 4.260, 4.310, 4.350, 6.90, 6.100, 13.40 s 6A: 4.350, 4.360 s 6A(1): 4.290 s 9: 6.90, 13.40 s 9(1): 6.90 ss 11 to 17: 13.40 s 12: 6.90 s 12(1): 6.90 s 15: 13.40 s 22: 13.40 s 24F: 13.40 s 25B: 13.40 s 25Z(1): 13.40 s 25Z(2): 13.40 s 25ZA(1): 13.40 s 25ZA(2): 13.40 s 25ZC: 13.40 s 25ZAA: 13.40

National Security (Subversive Associations) Regulations 1940 reg 3: 10.340 National Water Commission Act 2004: 7.400 s 42: 10.110 Nationality and Citizenship Act 1948: 14.660 Native Title Act 1993: 1.520, 1.540, 4.310 s 8: 4.290 s 11(1): 4.290, 4.310 s 11(2): 4.310 s 19: 4.310 s 23: 4.310 Natural Heritage Trust of Australia Act 1997: 10.240 xlv

Winterton’s Australian Federal Constitutional Law

Racial Discrimination Act 1975 — cont s 25ZAA(2): 13.40 s 25ZAA(3): 13.40 s 25ZAB: 13.40 s 25ZAB(1): 13.40 s 25ZAB(5): 13.40 s 25ZAC: 13.40 s 92: 6.90 s 113: 6.90 s 116: 6.90 s 128: 6.90 Pt II: 13.40 Pt III: 13.40

Superannuation Contributions Tax (Members of Constitutionally Protected Superannuation Funds) Assessment and Collection Act 1997: 12.260 s 5: 12.260 s 9: 12.260 Superannuation Contributions Tax (Members of Constitutionally Protected Superannuation Funds) Imposition Act 1997: 12.260 Superannuation Guarantee (Administration) Act 1992 s 3: 7.150 s 16: 7.160 s 71: 7.160 Pt 3: 7.160 Pt 8: 7.160

Radiocommunications Act 1983: 11.110 Radiocommunications (Transitional Provisions and Consequential Amendments) Act 1983 s 4: 11.110

Superannuation Guarantee Charge Act 1992 s 3: 7.160 s 5: 7.160 s 6: 7.160

Re-establishment and Employment Act 1945: 4.280 s 24(2): 4.290

Surplus Revenue Act 1910 s 3: 7.270

Remuneration Tribunal Act 1973: 10.190

Swimming Pools Tax Refund Act 1992: 10.140

Sales Tax Assessment Act (No 1) 1930–1953: 12.310, 12.330 s 30: 12.310

Tax Bonus for Working Australians Act (No 2) 2009: 3.330, 3.350, 5.300, 7.170 s 3: 3.370 s 5: 3.340 s 7: 3.340

Science and Research Act 1951: 3.320 Sea and Submerged Lands Act 1973: 2.460

Tax Reimbursement Act 1946–1948: 7.310 s 5: 7.310 s 11: 7.310

Seamen’s Compensation Act 1911: 2.480 Seas and Submerged Lands Act 1973: 2.460

Taxation Administration Act 1953: 3.330, 4.440 s 16(1): 3.370

Sex Discrimination and other Legislation Amendment Act 1992: 13.40 States Grants Act 1959: 7.290, 7.320

Taxation Debts (Abolition of Crown Priority) Act 1980: 12.400

States Grants (Income Tax Reimbursement) Act 1942: 7.280, 7.290, 7.300, 7.310, 7.320 s 4: 7.280

Telecommunications (Interception) Act 1979: 13.320 s 20: 13.310

States Grants (Petroleum Products) Act 1965 s 8A: 7.400

Tobacco Plain Packaging Act 2011: 10.120 s 18(1): 10.120 s 20(3): 10.120

States Grants (Petroleum Products) Amendment Act 1985: 7.400

Tobacco Plain Packaging Regulations 2011 reg 2.1.1(2): 10.120

States (Personal Income Tax Sharing) Act 1976: 7.320

Trade Marks Act 1995: 13.250 s 17: 10.120 s 20(1): 10.120 s 27: 10.120 ss 92 to 105: 10.120

Statute of Westminster Adoption Act 1942: 1.440 Superannuation Contributions Tax (Assessment and Collection) Act 1997: 12.260

Trade Practices Act 1965–1969: 5.350, 5.370, 13.370 s 6: 5.370 s 6(1): 5.370

Superannuation Contributions Tax Imposition Act 1997: 12.260 xlvi

Table of Statutes

Trade Practices Act 1965–1969 — cont s 7: 5.370 s 35: 5.350 s 36: 5.350 s 37: 5.350 s 49: 13.60 s 50: 13.60 s 52: 13.60 Trade Practices Act 1974: 3.100, 5.370, 5.460, 5.620, 8.40 s 2A: 12.40 s 2B: 3.100 s 4(1): 5.390, 5.500, 5.620 s 45(1): 5.390 s 45(5): 5.390 s 45D: 5.390, 5.430, 14.700 s 45D(1A): 5.390 s 45D(1): 5.390 s 45D(1)(a): 5.390 s 45D(1)(b): 5.390 s 45D(1)(b)(i): 5.390, 14.700 s 45D(5): 5.390 s 45D(6): 5.390 s 46: 3.100 s 47: 3.100 s 47(1): 5.500 s 75: 4.290, 4.330 s 75B: 5.610 s 82: 5.610 s 82(1): 5.610 Trade Practices Amendment Act 1977: 5.610 Training Guarantee Act 1990: 7.150 Training Guarantee (Administration) Act 1990: 7.80, 7.150, 7.290, 7.300 s 3: 7.150 s 3(1): 7.150 s 3(3): 7.150 s 5: 7.150 s 6: 7.150 s 14: 7.150 s 15: 7.150 s 18A: 7.150 s 18A(1): 7.150 s 18A(2): 7.150 s 18A(2)(a): 7.150 s 24(1): 7.150 s 31: 7.80 s 35: 7.80 s 76: 7.150 s 79: 7.80 s 221: 7.310 Pt 4: 7.80 Transport Workers Act 1928–1929: 7.190 s 3: 3.440, 3.450, 5.80 Transport Workers (Seamen) Regulations 1935: 7.190

Treaty of Peace (Germany) Act 1919 s 2: 3.440 Violence Against Women Act 1994: 5.310 War Crimes Act 1945: 13.140 s 6(1): 13.140 s 6(3): 13.140 s 9: 6.20, 13.140 s 9(1): 13.140 s 10: 13.140 War Crimes Amendment Act 1988: 6.20 War Precautions Act 1914: 6.190 War Precautions (Prices Adjustment) Regulations 1916: 6.190 War Service Land Settlement Agreements Act 1945: 10.210 Water Management Act 2000: 10.110 Waterside Employment Regulations 1931: 3.440 Wheat Industry Assistance Act 1938: 7.330, 7.360 s 14: 7.360, 7.370 Wheat Industry Stabilization Act (No 2) 1946: 13.430, 13.450 s 11: 13.450 Wireless Telegraphy Act 1905: 11.110 Workplace Relations Act 1996: 3.450, 4.380, 5.460, 13.450, 13.510 s 3: 5.460 s 4: 5.460 s 5: 5.460 s 5(1): 5.460 s 6: 5.460 s 6(1): 5.460 s 7A(1): 5.460 s 17(1): 4.380 s 18: 5.460 s 18A(1): 5.460 s 18A(2): 5.460 s 18B(1): 5.460 s 18B(2): 5.460 s 19: 5.460 s 19(1)(d): 5.460 s 30: 5.460 s 30(1)(c)(v): 5.460 s 101: 5.460 s 128: 5.470 s 152(1): 4.380 s 170LZ(1): 4.380 s 328: 5.460 s 329: 5.460 s 351: 5.460 s 356: 3.450 s 405: 5.460 s 420: 5.460 xlvii

Winterton’s Australian Federal Constitutional Law

Workplace Relations Act 1996 — cont s 448(7): 5.460 s 494(8): 5.460 s 495(7): 5.460 s 496(4): 5.460 s 497: 5.460 s 543: 5.460 s 846: 3.450 Pt 2, Div 1: 5.460 Pt 2, Div 2: 5.460 Pt 7: 5.460 Pt 8: 5.460 Pt 9: 5.460 Pt 10: 5.460 Pt 12: 5.460 Pt 12, Div 1: 5.460 Pt 12, Div 2: 5.460 Pt 23: 5.460 Pt VI: 5.460 Div 1: 5.460 Div 2: 5.460 Sch 1: 5.460 Sch 1, s 27: 5.460 Sch 1, Ch 2, Pt 2: 5.460 Sch 6: 5.460

Artesian Wells Act 1897: 10.110 Business Franchise Licences Act 1987: 9.120 s 36(2): 9.120 s 36(2AA): 9.120 s 41: 9.120 s 46: 9.120 s 47: 9.120

Workplace Relations Amendment (Work Choices) Act 2005: 3.450, 5.460 Workplace Relations and Other Legislation Amendment Act 1996: 4.30 World Heritage Properties Conservation Act 1983: 6.110, 6.120 s 2: 5.410 s 6: 6.110 s 7: 5.410 s 9: 5.410, 6.110, 6.160 s 10: 5.410 s 10(1): 5.410 s 10(2): 5.410, 5.470 s 10(2)(m): 5.410 s 10(3): 5.410, 5.470 s 10(4): 5.410, 5.420, 5.470 s 11: 5.410 s 45D(3): 5.410 World Heritage Properties Conservation Regulations 1983 s 4(2): 5.410

AUSTRALIAN CAPITAL TERRITORY Human Rights Act 2004: 10.460

NEW SOUTH WALES Anti-Discrimination Act 1977: 4.230, 4.260, 4.270, 4.350, 4.360, 10.440 s 14: 10.440 s 19: 4.260 s 31: 10.440

Community Protection Act 1994: 2.510, 2.520, 2.560, 2.590 s 3: 2.510 s 3(1): 2.510 s 3(2): 2.510 s 4: 2.510 s 5: 2.510 s 5(1): 2.510 s 7: 2.510 s 7(1): 2.510 s 7(3): 2.510 s 7(5): 2.510 s 8: 2.510 s 14: 2.510 s 15: 2.510 s 16(1): 2.510 s 16(2): 2.510 s 17(1): 2.510 s 17(1)(a): 2.510 s 17(2)(a): 2.510 s 17(3): 2.510 Companies Act 1936: 12.330, 12.380 s 282: 12.310 s 297: 12.330 s 348: 12.310 Constitution Act 1855: 3.10 Constitution Act 1902: 2.210, 2.280, 2.290, 3.190, 11.210 s 1: 2.30, 2.280 s 3: 2.280 s 5: 2.220, 2.280, 2.290, 2.310, 2.320, 2.480, 3.190, 12.310 s 5A: 3.190 s 5B: 2.280, 2.290 s 6: 2.240, 2.310 s 7: 2.210 s 7A: 2.210, 2.220, 2.230, 2.240, 2.280 s 7A(1): 2.210 s 7A(2): 2.260 s 7A(6): 2.210, 2.220, 2.230 s 18: 2.120 s 37: 2.120 s 38A: 3.190 Conveyancing Act 1919 s 109: 4.350 Crime (Criminal Organisations Control) Act 2009: 2.660 Pt 2: 2.660 Pt 3: 2.660

xlviii

Table of Statutes

Crimes Act 1900: 2.510

Independent Commission Against Corruption Amendment (Validation) Act 2015: 13.450 cl 34: 13.450 cl 35: 13.450 cl 35(1): 13.450 cl 35(2): 13.450 cl 35(3): 13.450 Pt 13: 13.450

Criminal Assets Recovery Act 1990 s 4(1): 2.610 s 10: 2.610, 13.450 s 25: 2.610 Crown Lands Consolidation Act 1913: 13.370 Defamation Act 2005 s 30: 11.150

Interpretation Act 1987 s 31: 4.450, 5.50

Election Funding and Disclosures Amendment Act 2010: 11.300

Irrigation, Water, Crown Lands and Hunter Valley Flood Mitigation (Amendment) Act 1966: 10.110 s 3(c): 10.110

Election Funding and Disclosures Amendment (Property Developers Prohibition) Act 2009: 11.300

Judges’ Pensions Amendment Act 1998: 12.260

Election Funding, Expenditure and Disclosures Act 1981: 11.180, 11.300 s 4A: 11.180 s 4A(c): 11.180 s 83: 11.300 s 87: 11.300 s 88: 11.180 s 91(2): 11.180 s 92: 11.180 s 93: 11.180 s 95(1): 11.180 s 95A: 11.300 s 95AA(2): 11.300 s 95B: 11.180 s 95G(6): 11.180, 11.300 s 95G(7): 11.300 s 95I: 11.300 s 95I(1): 11.300 s 96: 11.300 s 96D: 11.300 s 96D(1): 11.180 s 96E: 11.180 s 96G: 11.300 s 96GAA: 11.300 Pt 6: 11.180, 11.300 Pt 6, Div 2: 11.180 Pt 6, Div 2A: 11.180 Pt 6, Div 4A: 11.180, 11.300

Jury Act 1977: 10.290 Legal Profession Regulation 2002: 8.170 s 138 – 140D: 8.170 Pt 14: 8.170 Local Courts (Civil Claims) Act 1970 s 58: 13.40 Local Government Act 1919: 5.500 Long Service Leave Act 1955: 4.180 Marketing of Primary Products Act 1983 s 56: 8.100 s 56(1): 8.100 s 56(4): 8.100 s 58: 8.100 Masters and Servants Act 1902 s 4: 4.140 Mining Act 1992: 3.140 s 284: 3.140 Native Vegetation Act 2003: 10.240 Native Vegetation Conservation Act 1997: 10.240 Parliamentary Electorates and Elections Act 1912: 11.210 s 3(b): 10.30 s 20: 10.30 s 22: 11.300 s 23: 11.300

Environmental Planning and Assessment Act 1979: 4.320 Factories and Shops Act 1912: 4.100

Parliamentary Electorates and Elections Amendment Act 1926 s 9: 10.30 s 9(2): 10.30

Flour Acquisition Act 1931: 7.60 Forty-Four Hours Week Act 1925: 4.90 Independent Commission Against Corruption Act 1988 s 8(2): 13.450 Sch 4, Pt 13: 13.450 Sch 4, Pt 13, cl 34: 13.450 Sch 4, Pt 13, cl 35: 13.450

Parliamentary Electorates and Elections (Amendment) Act 1970: 11.210 Pipelines Act 1967 s 9: 9.90 s 12: 9.90 xlix

Winterton’s Australian Federal Constitutional Law

s 50(1): 10.150

Pipelines Act 1967 — cont s 25: 9.90 s 26: 9.90 s 35(1)(b): 9.90 ss 35(2) to (8): 9.90 s 35(8): 9.90

QUEENSLAND Acts Interpretation Act 1954 s 46: 5.520 Bail Act 1980: 2.710

Public Health Act 1991 s 59: 9.120

Commonwealth Aluminium Corporation Pty Ltd Agreement Act 1957: 2.380 s 4: 2.380, 2.430 s 5(4): 2.430

Racing Administration Act 1998: 8.150 Racing Administration Regulation 2005: 8.150 Residential Tenancies Act 1987: 4.280, 12.380 s 4: 12.40 s 24: 12.380

Community Protection Act 1994: 2.560 Constitution Act 1867: 2.190, 2.200 s 2: 2.560 s 9: 2.200

Sentencing Act 1989 s 13A: 2.570 s 13A(3A): 2.570

Constitution Act Amendment Act 1922: 2.150

Stamp Duties Act 1920 s 84G: 8.40

Constitution of Queensland 2001 s 51: 3.410

Supreme Court Act 1970 s 37: 2.580

Criminal Code: 2.710, 10.270 s 1: 2.710 s 3: 10.270 s 60A: 2.710 s 60B: 2.710 s 60C: 2.710 s 377: 11.60

Surveillance Devices Act 2007 s 11(1): 13.80 Valuation of Land Act 1916 s 6A(3): 10.110

Criminal Law (Criminal Organisations Disruption) Amendment Act 2013: 2.710

War Service Land Settlement Agreement Act 1945: 7.400, 10.210

Criminal Organisation Act 2009: 2.690, 2.710 s 10: 2.690 s 86: 2.690 Pt 3: 2.690 Pt 4: 2.690 Pt 5: 2.690 Pt 6: 2.690 Pt 7: 2.690

Water Act 1912: 7.400, 10.110 s 3: 10.110 s 4B: 10.110 s 6: 10.110 Water Management Act 2000: 7.400, 10.110 Water Rights Act 1896: 10.110 Water and Drainage and Artesian Wells (Amending) Act 1906: 10.110

Dangerous Prisoners (Sexual Offenders) Act 2003 s 13)(3)(b): 2.560 s 2: 2.560 s 3(a): 2.560 s 3(b): 2.560 s 5: 2.560 s 5(3): 2.560 s 5(5): 2.560 s 6: 2.560 s 7: 2.560 s 8: 2.560 s 8(1): 2.560 s 8(2)(b): 2.560 s 12: 2.560 s 13: 2.560 s 13(1): 2.560 s 13(2): 2.560 s 13(3): 2.560

Workers’ Compensation Act 1926: 2.480 s 46: 2.480

NORTHERN TERRITORY Aboriginals Ordinance : 11.320 Criminal Property Forfeiture Act s 3: 10.150 s 44: 10.150 s 44(1)(a): 10.150 s 94: 10.150 Misuse of Drugs Act s 36A: 10.150 Northern Territory (Self-Government) Act s 6: 10.150 l

Table of Statutes

ss 7(1)(a) to (e): 5.520 s 7(1)(b): 5.520 s 7(4): 5.520 s 9(1)(a): 5.520 s 9(1)(b): 5.520 s 9(1)(c): 5.520 s 9(1)(d): 5.520 s 10(1): 5.520 s 55: 5.520 s 56(1)(a): 5.520 s 62: 5.520 s 63: 5.520 s 67: 5.520 s 69: 5.520 s 73: 5.520 s 74: 5.520 s 75: 5.520 s 76: 5.520 s 122: 5.520

Dangerous Prisoners (Sexual Offenders) Act 2003 — cont s 13(3)(a): 2.560 s 13(3)(b): 2.560 s 13(4): 2.560 s 13(4)(h): 2.560 s 13(5): 2.560 s 13(5)(a): 2.560 s 13(5)(b): 2.560 s 13(6): 2.560 s 14: 2.560 s 15: 2.560 s 16: 2.560 s 17: 2.560 s 25: 2.560 s 26: 2.560 s 27: 2.560 s 28: 2.560 s 31: 2.560 s 44: 2.560 s 45: 2.560 Pt 3: 2.560 Pt 4: 2.560

Rules of the Supreme Court: 10.430 r 27: 10.410 r 27(1): 10.410 r 27(2): 10.410 r 28: 10.410

Electoral Act 1992: 11.210 Electricity Act 1976: 12.200

Summary Offences Act 2005 s 8: 11.230

Government Owned Corporations Act 1993: 5.520

Traffic Act 1949 s 16: 4.430

Industrial Arbitration Act 1916: 2.190 s 6: 2.190

Uniform Civil Procedure Rules 1999: 2.690

Industrial Relations Act 1999: 5.520

Vagrants, Gaming and Other Offences Act 1931: 11.130 s 7: 11.130 s 7(1): 11.130 s 7(1)(c): 11.130 s 7(1)(d): 11.130, 11.230 s 7A(1)(c): 11.130 s 128: 11.130

Land Act 1962: 6.90 Liquor Act 1912 s 166: 4.60 Liquor Act 1992: 2.710 s 173EA: 2.710 s 173EB: 2.710 s 173EC: 2.710 s 173ED: 2.710

Vicious Lawless Association Disestablishment Act 2013: 2.710

Local Government (Morayfield Shopping Centre Zoning) Act 1996: 13.450

World Heritage Properties Conservation Act 1983 s 9: 6.120

Mining Royalties Act 1974: 2.380 Motor Vehicles Insurance Act s 20: 10.450

SOUTH AUSTRALIA

Queensland Rail Transit Authority Act 2013: 5.520 s 4(b): 5.520 s 5(a): 5.520 s 5(b): 5.520 s 6(1): 5.520 s 6(2): 5.520 s 6(3): 5.520 s 7: 5.520 s 7(1): 5.520

Beverage Container Act Amendment Act 1986: 8.80 s 5B: 8.80 s 5B(2): 8.80 s 7: 8.80

Beverage Container Act 1975: 8.80

Beverage Container Regulations 1976: 8.80 reg 7(b): 8.80 reg 7(c): 8.80 reg 7(d): 8.80 li

Winterton’s Australian Federal Constitutional Law

Constitution Act 1934: 11.210

Defamation Act 1957 s 16: 11.60 s 22: 11.60

Constitution Act Amendment Act (No 2) 1970: 11.210 Criminal Law Consolidation Act 1935 s 73(3): 4.110

Flour Tax Relief Act 1938: 7.360 ss 5 to 7: 7.360 s 10: 7.360

Drugs Act 1908 s 5: 2.670

Legislative Council Electoral Boundaries Act 1995: 11.210

Electoral Act 1985 s 76: 11.290 s 126: 11.290 s 126(1): 11.290

Sea Fisheries Regulations 1962 reg 17A: 9.30 Tobacco Act 1972 Pt III: 9.70

Fisheries Act 1982: 2.490

Trade Unions Act 1889: 5.520

Industrial Conciliation and Arbitration Act 1972 s 15(1)(e): 4.220

VICTORIA

Juries Act 1927 s 7: 10.280 s 7(1): 10.280 s 57: 10.290

Business Franchise (Tobacco) Act 1974: 8.60 s 10(1)(c): 8.60 s 10(1)(d): 8.60 Charter of Human Rights and Responsibilities Act 2006: 2.670, 10.460 s 7(2): 2.670 s 25(1): 2.670 s 32: 2.670 s 32(1): 2.670 s 33: 2.670 s 36: 2.670, 10.460 s 36(2): 2.670 s 36(3): 2.670 s 36(4): 2.670 s 36(5)(b): 2.670 s 36(6): 2.670 s 37: 2.670

Liquor Licensing Act 1997 s 28A: 2.600 s 28A(5): 2.600 Metropolitan and Export Abattoirs Act 1936 s 15(1)(e): 4.220 s 52A: 4.200, 5.230 Minor Offences Procedure Act 1869 s 3: 10.270 Public Service Act 1916: 3.120 Real Property Act 1886: 2.60, 2.360 s 6: 2.360 Serious and Organised Crime (Control) Act 2008 s 4(1): 2.640 s 5: 2.640 s 10(1): 2.640 s 10(1)(b): 2.640 s 14: 2.640 s 14(1): 2.640, 2.650 s 14(5): 2.640 s 14(6): 2.640 s 22: 2.640 s 35: 2.640 Pt 2: 2.640

Community Protection Act 1990: 2.510 Constitution Act 1975 s 65: 3.420 Constitution Act Amendment (Qualifications) Act 1973: 11.210 Construction Industry Long Service Leave Act 1997: 4.380

South Eastern Drainage Amendment Act 1900 s 14: 2.360

Crimes Act 1958: 4.430, 11.230 s 71(2): 4.430 s 72(1): 4.430 s 321: 4.430 s 321(1): 4.430

West Lakes Development Act 1969: 2.400 s 16: 2.400

Electoral Boundaries Commission Act 1982: 11.210 Employee Relations Act 1992: 12.220

TASMANIA Age of Majority Act 1973: 11.210

Equal Opportunity Act 1977: 4.170, 4.180, 4.280

Constitution Act 1934: 11.210

Goods Act 1928: 12.360 lii

Table of Statutes

Interpretation of Legislation Act 1984 s 6: 4.450

Electoral Act Amendment Act (No 2) 1970: 11.210

Labour and Industry Act 1958: 4.430

Electoral Amendment Act 2001: 2.330

Licensing Act 1958: 9.60 s 19: 9.60 s 19(1): 9.60 s 19(1)(a): 9.60 s 19(1)(b): 9.60

Electoral Distribution Act 1947: 2.330, 2.340, 11.210 s 2A: 11.210 s 6: 2.330, 11.210 s 9: 11.210 s 13: 2.330, 2.340

Marine Act 1928: 4.480

Electoral Distribution Repeal Act 2001: 2.330

Motor Traffic Act 1915: 12.300

Fisheries Act 1905–1975: 2.460 s 24: 2.460 s 24(1)(a): 2.460

Pipelines Act 1967: 9.90 Pipelines (Fees) Act 1981 s 2: 9.90 Prices Regulation Act 1948: 12.380

Interpretation Act 1984 s 7: 4.450

Public Sector Management Act 1992: 12.220

Misuse of Drugs Act 1981: 13.540

Serious Sex Offenders Monitoring Act 2005: 2.660

Seas and Submerged Lands Act 1973 s 14: 2.460

Summary Offences Act 1966 s 49A: 11.230

Stamp Act 1921: 12.40

CANADA WESTERN AUSTRALIA

British North America Act 1867: 14.570

Aboriginal Heritage Act 1972: 12.50

Canadian Bill of Rights 1960 s 2: 2.260

Acts Amendment (Constitution) Act 1978: 11.210 s 6: 11.210

Canadian Charter of Rights and Freedoms: 11.180 s 1: 11.170 s 3: 11.210

Acts Amendment (Electoral Reform) Act 1987: 11.210

Constitution of Canada s 35: 1.540

Betting Control Act 1954 s 24(1aa): 8.120 s 24(1AA): 8.120 s 27D: 8.120 s 27D(1): 8.120

GERMANY Treaty of Versailles: 3.440

Betting and Racing Legislation Amendment Act 2006: 8.120

INDIA

Constitution Act 1889: 2.30, 11.210 s 1: 11.210 s 2: 11.210 s 6: 11.210 s 7: 11.210 s 24: 11.210 s 30: 11.210 s 41: 11.210 s 73: 11.210 s 73(2): 11.210 s 73(2)(c): 11.210, 11.220

Constitution Art 14: 10.440

IRELAND (NATIONAL) Union with Ireland Act 1800: 2.260

NORTHERN IRELAND Northern Ireland Constitution Act 1973: 2.260

Constitution Acts Amendment Act 1899: 11.210 s 5: 2.330

UNITED KINGDOM AND IMPERIAL 18 & 19 Vict c 54: 2.30

Corruption and Crime Commission Act 2003: 2.600

18 & 19 Vict c 55: 2.30 liii

Winterton’s Australian Federal Constitutional Law

53 & 54 Vict c 26: 2.30

Irish Free State (Agreement) Act 1922: 14.540

Act for Poisoning 1531: 13.130

Merchant Shipping Act 1894 s 735: 2.170 s 736: 2.170

Act for reversing the Earl of Strafford his Attainder 1662: 13.130

New South Wales Act 1923: 2.30 s 24: 2.30 s 29: 2.30 s 31: 2.30

Act for the Attainder of Thomas Earl of Strafford 1641: 13.130 Australia Act 1986: 1.440, 1.470, 1.500, 2.10, 2.170, 2.180, 2.640, 11.30, 14.540 s 1: 1.490 s 2(1): 2.480 s 2(2): 2.55 s 5(a): 2.480

New South Wales Constitution Act 1855: 2.280, 2.290 s 4: 2.280, 2.290 Parliament Act 1911: 2.260

Australian Colonies Duties Act 1873: 8.40

Parliament Act 1949: 2.260

Australian Constitutions Act 1842: 2.30

Reform Act 1832: 3.190

Australian Constitutions Act 1850: 2.30 s 32: 2.30

Riot Act 1715: 6.250 Royal Assent Act 1967: 2.260

Australian Courts Act 1828: 2.30

Royal Mines Act 1688 s 3: 3.140

Bill of Rights 1688: 2.260, 3.70 s 4: 3.270 Bill of Rights 1689: 3.280, 12.380

South Africa Act 1909: 2.310 s 152: 2.310

British Nationality Act 1948: 14.660

Statute Law Revision Act 1863: 13.130

British North America Act 1867: 11.30, 12.180, 14.700

Statute of Westminster 1931: 1.440, 1.460, 2.170, 2.310, 2.450, 2.460 s 2: 2.170 s 2(2): 2.260 s 3: 2.170 s 4: 1.490, 2.170, 2.260 s 5: 2.170

Canada Act 1982: 14.540 Colonial Laws Validity Act 1865: 1.440, 1.450, 1.460, 2.60, 2.210, 2.330, 2.400 s 1: 2.210 s 2: 2.70, 2.80, 2.100 s 3: 2.70 s 5: 2.70, 2.80, 2.170, 2.180, 2.210, 2.220, 2.230, 2.240, 2.250, 2.260, 2.270, 2.280, 2.290, 2.300, 2.310, 2.320, 2.330, 2.340, 2.350, 2.360, 2.370, 2.380, 2.390, 2.400, 2.460, 2.470, 2.640

Treason Act 1351: 6.250 Union with Scotland Act 1706: 2.260

UNITED STATES Agricultural Adjustment Act s 601: 5.200

Commonwealth of Australia Constitution Act 1900 (63 & 64 Vict c 12): 1.10, 2.510, 3.100, 3.370 s 3: 2.130, 3.100 s 4: 3.100 s 6: 3.100 s 5: 12.120

American Convention on Human Rights (Pact of San José) Art 9: 13.140 Sherman Act s 1: 5.200 Tobacco Inspection Act s 511: 5.200

Corrupt and Illegal Practices Prevention Act 1883: 11.180

United States Constitution: 3.440 s 1: 10.450 s 2: 10.440, 11.200 s 7: 10.440 s 30: 10.440 Art I: 11.200, 13.10 Art II: 13.10

European Communities Act 1972: 2.260 Human Rights Act 1998: 10.460, 11.170 Hunting Act 2004: 2.260 Ireland Act 1949: 14.540 liv

Table of Statutes

Convention for the Protection of the World Cultural and Natural Heritage: 6.120

United States Constitution — cont Art III: 13.10 Art IV: 10.440, 10.450 Art VI: 10.360 s 2: 10.290 s 2(3): 10.280, 10.290 s 3: 10.300

European Convention for the Protection of Human Rights and Fundamental Freedoms Art 7: 13.140 International Covenant on Civil and Political Rights Art 7: 13.190, 13.200, 14.60 Art 9: 13.190, 13.200 Art 10: 13.190, 13.200

TREATIES AND CONVENTIONS Airline Pilots Agreement 1978: 4.170 s 6: 4.170 cl 6: 4.170 cl 6B: 4.170 cl 22: 4.170

Protocol Relating to the Status of Refugees: 3.120 Statute of the International Court of Justice Art 38: 14.580

Convention Relating to the Status of Refugees (1951 Refugee Convention): 3.120

Universal Declaration of Human Rights Art 11(2): 13.140

lv

PART I: INTRODUCTION Chapter 1: Constitutional Fundamentals ................................................ 3

PARTI

Chapter 2: States .................................................................................... .. 69

CHAPTER 1 Constitutional Fundamentals [1.10]

INTRODUCTION .......................................................................................................... 4

[1.20]

DEMOCRATIC FEDERALISM ......................................................................................... 7 [1.20]

Federal and democratic foundations ......................................................... 7 [1.30] [1.50] [1.70] [1.90]

[1.110]

Federalism as a principle of constitutional interpretation ...................... 15 [1.120] [1.140]

[1.160]

McCulloch v Maryland .................................................................... 16 The Decline of Federalism ................................................................ 17

Representative and responsible government .......................................... 21 [1.170]

[1.190]

Federalist No 39 ............................................................................... 7 Annotated Constitution of the Australian Commonwealth ................... 9 Federalism in Australia and in Other Nations .................................... 11 The Federal Model .......................................................................... 14

Lange v ABC ................................................................................... 21

The constitutional status of responsible government ............................ 22 [1.200] [1.210] [1.230]

Parliament, the Executive and the Governor-General ......................... 23 Responsible Government and the Australian Constitution .................. 25 Law and Convention ...................................................................... 27

[1.250] CONSTITUTIONAL GOVERNMENT .......................................................................... 29 [1.250]

Separation of powers ................................................................................ 29 [1.260] [1.280] [1.300] [1.320]

[1.330]

30 34 35 44

Rule of law .................................................................................................. 45 [1.340] [1.360]

[1.370]

Constitutionalism and the Separation of Powers ............................... A New Perspective on Separation of Powers ...................................... Interpretational Methodologyin Separation of Powers Jurisprudence ................................................................................. Rethinking the Constitutionality of Delegated Legislation ..................

Ethics and the Public Domain .......................................................... 46 Plaintiff S157/2002 v Commonwealth ............................................. 47

Judicial review and constitutional rights .................................................. 48 [1.390] [1.410]

Marbury v Madison ........................................................................ 49 Australian Communist Party v Commonwealth ................................. 51

[1.430] SOVEREIGNTY ............................................................................................................. 58 [1.440] [1.450] [1.470] [1.490]

[1.510]

Sovereignty of Parliament ............................................................... The Statute of Westminster 1931 .................................................... Australian Capital Television v Commonwealth ................................. Sue v Hill .......................................................................................

58 58 61 61

Indigenous Australians ............................................................................... 63 [1.520] [1.540] [1.550]

Sovereignty and Indigenous Peoples ................................................ 63 Reconciliation and the Constitution ................................................. 65 Recognising Aboriginal and Torres Strait Islander Peoples in the Constitution ............................................................................. 67

3

Part I: Introduction

INTRODUCTION [1.10] Constitutional law is conventionally understood to be the law that identifies and

regulates the institutions of government within a society. Broadly understood, a constitution is something that establishes and regulates any kind of organisation, including business corporations, voluntary associations, religious societies, and so on. In its more specific sense, constitutional law is concerned with the civil or public institutions of the modern state. The governing institutions of modern states exercise various legal powers, principally the power to make law, the power to execute the law, and the power to resolve disputes over the meaning and application of the law. In most countries today, including Australia, constitutional law vests these powers in separate institutions, usually known as the legislature, the executive and the judiciary. As in many other countries, much of Australia’s constitutional law is contained in, or derived by a process of interpretation from, a written constitution. However, as a country that was colonised by Britain and inherited as much of the common law of England as was applicable at the time, Australian constitutional law also includes and is premised upon aspects of the common law of the United Kingdom, a body of law that is not based on a single written document. Many of the legal developments which flow from the constitutional conflicts that occurred in England in the 17th century remain relevant to Australian constitutional law and practice, such as the sovereignty of Parliament and its supremacy over the Executive, the institutional independence of the Judiciary, and the practices of parliamentary responsible government that developed especially following the democratic Reform Acts of the 19th century. The Commonwealth of Australia is a federation of six previously existing, self-governing colonies, now called States. The federation was brought into existence by the Commonwealth of Australia Constitution Act 1900 (UK) following the agreement of the political leaders and voters of the six colonies. This special British statute consists of nine sections, the last of which contains what is called the “Constitution of the Commonwealth of Australia”. This is what people usually mean when they refer to the “Australian Constitution”. However, each of the Australian States also has its own constitution, a special Constitution Act enacted by the legislature of each State. The principles of federalism and (to a lesser extent) the separation of powers, both derived from the United States of America, were very influential in the design of Australia’s Constitution, and American cases relating to issues of federalism and other matters are frequently considered relevant to the interpretation of the Australian Constitution. The benefits of a written constitution are significant, but merely having a written constitution does not necessarily guarantee that the powers of government will be exercised in a manner that is subject to the law. Constitutionalism encompasses the ideas and values which inspire written constitutions and continue to animate them. Constitutionalism stands for the idea that governmental power must be legally restrained in order to diminish the possibility of its abuse. Without constitutional limits, governmental power may degenerate into arbitrariness or tyranny. Constitutional government exists when constitutional values and principles are put into practice. In this sense, constitutionalism is closely related to, if not identical with, the rule of law. As commonly understood, the rule of law exists when the powers of government are only exercised in accordance with pre-existing law. It is this body of pre-existing law which is in a fundamental sense the constitution of a country. Consider this practical illustration. Police officers have the power to charge you with a traffic violation if you violate the traffic laws. They are not authorised to exercise legislative power (ie, to make the law right there and then, on the side of the road and then proceed to charge you) and they are not authorised to exercise judicial power (ie, to make a final and conclusive determination that you have in fact 4

[1.10]

Constitutional Fundamentals

CHAPTER 1

breached the law and have an obligation to pay the fine). According to the principle of the separation of powers, legislative power is ordinarily vested separately in the Parliament, executive power is vested separately in the Executive (usually exercised through delegates, such as police officers) and judicial power is vested separately in the Courts. The Australian Constitution and, to a lesser extent, the Constitutions of the Australian States provide for the separation of powers by separately establishing legislative, executive and judicial institutions and investing them with legislative, executive and judicial power respectively. A healthy constitutional system of government depends upon this relationship between constitutional law and the exercise of clearly defined and limited powers of government. The constitutional system works properly when you can only be obliged to pay a fine if you have in fact breached a law which has been enacted by a legislature, which has been executed by the executive (such as the police), and which has been determined by a judge to apply to your case. Only if all three components of the constitutional system concur can you be coerced. The separation of powers – when it is operating properly – is thus a very important way in which liberty from the exercise of arbitrary power by government can be preserved and protected. Another fundamental dimension of the Australian constitutional system is the fact that the Commonwealth of Australia is a federation of six constituent States. This means that the Commonwealth and the States each have their own constitutional systems of government, with the State systems distinct from, and yet integrated with, the Commonwealth as a whole. The States were established as mutually independent self-governing colonies prior to the formation of the Commonwealth and it was the States that took the initiative to bring the Commonwealth into being. They did this by first agreeing to send representatives to two federal conventions, one held in 1891, the other in 1897–98, at which a written constitution for the proposed federation was drafted. The second convention composed a Constitution Bill which eventually satisfied the governments and legislatures of the six colonies and was ultimately approved by the voters in each colony. Following its approval in Australia, the Constitution Bill was then conveyed to the Colonial Office in London for ultimate enactment into law by the British Parliament at Westminster. Thus enacted, the Australian Constitution provides for the establishment of a set of governing institutions at a federal level (principally the Commonwealth Parliament, the Federal Executive Government and the High Court of Australia) and confers specific and limited legislative, executive and judicial powers upon each of these institutions respectively. The powers conferred are specific and limited because it was understood that the States would continue to function as self-governing political communities, and that the Commonwealth would only exercise governing power in relation to the specific matters that were agreed to be conferred upon it by the governments and peoples of the States. Federalism, like the rule of law and the separation of powers, is fundamental to the system of constitutional law that operates in Australia. Of similar importance is the form and composition of the various institutions of government which operate at both a State and a Commonwealth level. Since classical times, it has been conventional to distinguish between the rule of the one (µοναρχια, monarchy), the rule of the few (αριστοκρατια, aristocracy) and the rule of the many (δηµoκρατια, democracy). In classical thought, monarchy simply meant the rule of an individual person. A monarch might therefore be elected, and that election might be either by a few or by many members of the society. Similarly, aristocracy did not necessarily mean the rule of a hereditary nobility; they too, might be elected. While in most European countries, including England and Scotland, both the nobility and the monarchy were hereditary, in some city states of Europe, such as Florence, Venice and Geneva, the members of the ruling council in the city were at times elected, albeit on the basis of a limited franchise. No state was purely monarchical, aristocratic or democratic, and the balance between the three elements was always complex [1.10]

5

Part I: Introduction

and subject to change. It is, therefore, possible, and indeed very common, for constitutional systems to be mixtures of all three basic forms of government. Moreover, in the classical analysis, the rule by the one, the few, or the many could be either for the good of the political community as a whole (and thus legitimate), or for the personal or sectional interests of those who ruled (and thus illegitimate). Special terms were used to identify legitimate or illegitimate rule. In fact, the term “democracy” was reserved by Aristotle for the bad form of the rule of the many, whereas today we usually use the term in either a neutral or positive sense. But that there could be good and bad forms of all three types of government, and that there could be mixtures of all three types, is the most important point. Indeed, Aristotle thought that for most countries, a mixed system of government is best, principally because, just as one could never be sure of finding a wise and virtuous individual or small group of rulers, nor could one be sure that the whole body of people would always govern themselves in a manner that was just and fair to everyone. It was usually better if there was a mix of monarchy, aristocracy and democracy so that each group could restrain the excesses of the others. The Australian system of government is often called “democratic” for several reasons. First, the preamble to the federal Constitution accurately recites that the Constitution came into being only after “the people” of the six States “agreed to unite” in a “federal commonwealth”. Secondly, the Constitution requires that members of the Commonwealth Parliament are to be “chosen” by “the people”, voting in regular elections. Less obviously, the Constitution also lays the foundations for a system in which the executive power of the Commonwealth, formally vested in the Queen, is in practice exercised on the advice of a Prime Minister and other Ministers of the Crown who have the confidence and support of a majority in the lower house of Parliament. Moreover, the Constitution can only be formally amended at a referendum in which a majority of the people of the Commonwealth as a whole, as well as a majority of people in a majority of States, agree with the proposed change. Australia is partly a direct democracy because the people are able to express their views directly on proposals put to referendum for the amendment of the Constitution; and it is partly a representative democracy because the people elect members of Parliament to make laws and form governments on their behalf. Other aspects of the constitutional system are more monarchical and aristocratic. Most evidently, Australia is a constitutional monarchy. The executive power of both the Commonwealth and the States is legally vested in the Queen and exercised by the Governor-General and the State Governors, all of whom are formally appointed by the Queen. The Queen is a constituent member of each of the Parliaments of the Commonwealth and the States and is formally the head of the judicial system. Laws cannot be passed without her assent, expressed through the Governor-General and State Governors, and judges are formally appointed by the Governor-General and the State Governors in the name of the Queen. However, all of these powers are in practice exercised by the Governor-General and the State Governors on the advice of Ministers who themselves have the support of, and are politically responsible to, the relevant Parliament. This system of parliamentary responsible government exists, not because the law of the constitution requires it, but because it is a well-established constitutional convention. Responsible government is the way in which the monarchical and aristocratic elements of the Australian constitutional system are democratised. And yet, the result is still a government by “the few” in the sense that it concentrates executive, legislative and judicial power in the hands of a small group of individuals. Thus, despite the far-reaching democratisation of the Australian constitutional system, judges are not popularly elected and they are certainly not expected to act in accordance with the directions of the executive government. Rather, judges are chosen for their demonstrated integrity, skill, knowledge and wisdom in the application of the law. Once appointed, they are 6

[1.10]

Constitutional Fundamentals

CHAPTER 1

deliberately insulated from the other institutions of government so that they can perform their vital function of ensuring the proper interpretation and application of the law in a manner that is independent of political interference or influence. The underlying reason for this is that the rule of law and constitutional government depend, in practice, upon the independence of the judiciary. A very important function of the courts is the exercise of judicial review, which occurs when judges scrutinise executive action or statutes enacted by the Parliament to determine whether they are in accordance with the law. Much of Australian constitutional law consists of decisions made by the courts exercising this power of judicial review of legislation. This chapter begins by explaining ideas and principles of democracy and federalism; it then turns to the separation of powers, the rule of law and the associated practice of judicial review.

DEMOCRATIC FEDERALISM Federal and democratic foundations [1.20] James Madison, one of the most important framers of the United States Constitution,

in an influential essay written to encourage its ratification, defended the “federal” and “national” characteristics of the proposed Constitution in the following terms.

Federalist No 39 [1.30] J Madison, “Federalist No 39”, in C Rossiter (ed), The Federalist Papers (New American Library, New York, 1961), pp 243-244 In order to ascertain the real character of the Government, it may be considered in relation to the foundation on which it is to be established; to the sources from which its ordinary powers are to be drawn; to the operation of those powers; to the extent of them; and to the authority by which future changes in the Government are to be introduced. On examining the first relation, it appears, on one hand, that the Constitution is to be founded on the assent and ratification of the People of America, given by deputies elected for the special purpose; but on the other, that this assent and ratification is to be given by the People, not as individuals composing one entire Nation, but as composing the distinct and independent States to which they respectively belong. It is to be the assent and ratification of the several States, derived from the supreme authority in each State, – the authority of the People themselves. The act, therefore, establishing the Constitution, will not be a National, but a Federal act. That it will be a Federal, and not a National act, …the act of the People, as forming so many independent States, not as forming one aggregate Nation, is obvious from this single consideration, that it is to result neither from the decision of a majority of the People of the Union, nor from that of a majority of the States. It must result from the unanimous assent of the several States that are parties to it, differing no otherwise from their ordinary assent than in its being expressed, not by the Legislative authority, but by that of the People themselves. Were the People regarded in this transaction as forming one Nation, the will of the majority of the whole People of the United States would bind the minority, in the same manner as the majority in each State must bind the minority; and the will of the majority must be determined either by a comparison of the individual votes, or by considering the will of the majority of the States as evidence of the will of a majority of the People of the United States. Neither of these rules has been adopted. Each State, in ratifying the Constitution, is considered as a sovereign body, independent of all others, and only to be bound by its own voluntary act. In this relation, then, the new Constitution will, if established, be a Federal, and not a National Constitution. The next relation is, to the sources from which the ordinary powers of Government are to be derived. The House of Representatives will derive its powers from the People of America; and the People will be represented in the same proportion, and on the same principle, as they are in the Legislature of a particular State. So far the Government is National, not Federal. The Senate, on the other hand, will derive its powers from the States, as political and coequal societies; and these will be represented on [1.30]

7

Part I: Introduction

Federalist No 39 cont. the principle of equality in the Senate, as they now are in the existing Congress. So far the Government is Federal, not National. The Executive power will be derived from a very compound source. The immediate election of the President is to be made by the States in their political characters. The votes allotted to them are in a compound ratio, which considers them partly as distinct and coequal societies, partly as unequal members of the same society. The eventual election, again, is to be made by that branch of the Legislature which consists of the National representatives; but in this particular act, they are to be thrown into the form of individual delegations, from so many distinct and coequal bodies politic. From this aspect of the Government, it appears to be of a mixed character, presenting at least as many Federal as National features. The difference between a Federal and National Government, as it relates to the operation of the Government, is supposed to consist in this, that in the former, the powers operate on the political bodies composing the Confederacy, in their political capacities; in the latter, on the individual citizens composing the Nation, in their individual capacities. On trying the Constitution by this criterion, it falls under the National, not the Federal character; though perhaps not so completely as has been understood. In several cases, and particularly in the trial of controversies to which States may be parties, they must be viewed and proceeded against in their collective and political capacities only. So far the National countenance of the Government on this side seems to be disfigured by a few Federal features. But this blemish is perhaps unavoidable in any plan; and the operation of the Government on the People, in their individual capacities, in its ordinary and most essential proceedings, may, on the whole, designate it, in this relation, a National Government. But if the Government be National with regard to the operation of its powers, it changes its aspect again when we contemplate it in relation to the extent of its powers. The idea of a National Government involves in it, not only an authority over the individual citizens, but an indefinite supremacy over all persons and things, so far as they are objects of lawful Government. Among a People consolidated into one Nation, this supremacy is completely vested in the National Legislature. Among communities united for particular purposes, it is vested partly in the general, and partly in the municipal Legislatures. In the former case, all local authorities are subordinate to the supreme; and may be controlled, directed, or abolished by it at pleasure. In the latter, the local or municipal authorities form distinct and independent portions of the supremacy, no more subject, within their respective spheres, to the general authority, than the general authority is subject to them, within its own sphere. In this relation, then, the proposed Government cannot be deemed a National one; since its jurisdiction extends to certain enumerated objects only, and leaves to the several States a residuary and inviolable sovereignty over all other objects. It is true, that in controversies relating to the boundary between the two jurisdictions, the tribunal which is ultimately to decide is to be established under the General Government. But this does not change the principle of the case. The decision is to be impartially made, according to the rules of the Constitution; and all the usual and most effectual precautions are taken to secure this impartiality. Some such tribunal is clearly essential to prevent an appeal to the sword, and a dissolution of the compact; and that it ought to be established under the General, rather than under the local Governments, or, to speak more properly, that it could be safely established under the first alone, is a position not likely to be combated. If we try the Constitution by its last relation, to the authority by which amendments are to be made, we find it neither wholly National, nor wholly Federal. Were it wholly National, the supreme and ultimate authority would reside in the majority of the people of the Union; and this authority would be competent at all times, like that of a majority of every National society, to alter or abolish its established Government. Were it wholly Federal, on the other hand, the concurrence of each State in the Union would be essential to every alteration that would be binding on all. The mode provided by the Plan of the Convention is not founded on either of these principles. In requiring more than a majority, and particularly, in computing the proportion by States, not by citizens, it departs from the National, and advances towards the Federal character: in rendering the concurrence of less than the whole number of States sufficient, it loses again the Federal, and partakes of the National character. The proposed Constitution, therefore, is, in strictness, neither a National nor a Federal Constitution, but a composition of both. In its foundation it is Federal, not National: in the sources from which the 8

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Federalist No 39 cont. ordinary powers of the Government are drawn, it is partly Federal, and partly National: in the operation of these powers, it is National, not Federal: in the extent of them, again, it is Federal, not National: and, finally, in the authoritative mode of introducing amendments, it is neither wholly Federal nor wholly National.

Notes&Questions

[1.40]

1.

What did Madison mean by “federal” and “national”? Using Madison’s terminology, to what extent is the Australian Constitution “federal” or alternatively “national” in character? On the influence of Madison’s essay on the framers of the Australian Constitution, see N Aroney, The Constitution of a Federal Commonwealth: The Making and Meaning of the Australian Constitution (Cambridge University Press, 2009), pp 73-78, 107, 111-2, 124-8. 2. In the original text of Madison’s essay the archaic form “fœderal”, instead of “federal”, was used. This reflects the etymological derivation of the term from the Latin fœdus, which means treaty, covenant or compact: D Elazar, Exploring Federalism (University of Alabama Press, 1987), p 5. What influence do you suppose the origin of the Australian federation (that is, an agreement among several self-governing colonies) has on the terms, structure and meaning of the Constitution? For a detailed discussion, see Aroney, The Constitution of a Federal Commonwealth, chs 7-11. Consider the following observations made by John Quick and Robert Garran, two important framers of the Australian Constitution, regarding the reference in the preamble of the Australian Constitution to the agreement of the people of the Australian colonies to unite in a “Federal Commonwealth”.

Annotated Constitution of the Australian Commonwealth [1.50] John Quick and Robert Garran, The Annotated Constitution of the Australian Commonwealth (Angus and Robertson, Sydney, 1901; reprinted Legal Books, Sydney, 1975), pp 332-334 332 The Federal idea … pervades and largely dominates the structure of the newly-created community, its parliamentary executive and judiciary departments. 333 “Federal” generally means “having the attributes of a Federation.” By usage, however, the term Federal has acquired several distinct and separate meanings, and is capable of as many different applications. In this Act, for example, the term Federal is used first in the preamble, and next in clause 3, as qualitative of the Commonwealth, considered as a political community or state; in various sections of the Constitution it is employed as descriptive of the organs of the central government. This use, in an Act of Parliament, of one term in reference to two conceptions so entirely different as state and government, is illustrative of the evolution of ideas associated with Federalism. In the history of Federation the word seems to have passed through several distinct stages or phases, each characterised by a peculiar use and meaning. At the present time the several shades of thought which the word, according to usage and authority, is capable of connoting are often blended and confused. These meanings may be here roughly generalized as a preliminary to a separate analysis: (1)

As descriptive of a union of States, linked together in one political system.

(2)

As descriptive of the new State formed by such a union.

(3)

As descriptive of a dual system of government, central and provincial.

(4) As descriptive of the central governing organs in such a dual system of government. The first, and oldest, of these meanings directs attention emphatically to the preservation of the identity of the States; the second implies a division of sovereignty – a State composed of States; the [1.50]

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Part I: Introduction

Annotated Constitution of the Australian Commonwealth cont. third asserts that the duality is a matter of government, not of sovereignty; whilst the fourth asserts nothing, but is merely a convenient form of nomenclature. (1)

A UNION OF STATES – The primary and fundamental meaning of a federation (from the Latin foedus, a league, a treaty, a compact; akin to fides, faith) is its capacity and intention to link together a number of coequal societies or States, so as to form one common political system and to regulate and co-ordinate their relations to one another; in other words a Federation is a union of States, subject to the preservation of state entity and state individuality within defined limits. Such a union as that of the United States called into existence a central government to deal with the general affairs of the union, but there was some discussion and doubt among publicists whether, as its resultant, it established a new State. The phrase “federal union,” or the abstract noun “Federation,” described the bond of union between the “United States,” but was silent as to whether the States so united formed a single composite State. It was contended that the union fell short of the attributes of a perfect State; that the original sovereignty of the component States remained unimpaired except to the extent of the power transferred to the union – a doctrine which was the battle ground of parties in America for many years before the Civil War. This was the sense in which the word “federal” is used in the Federalist, and in the early constitutional history of the United States.

(2)

A FEDERAL STATE – In a secondary sense, the word “federal” is applied to the composite state, or political community, formed by a federal union of States. It thus describes, not the bond of union between the federating States, but the new State resulting from that bond. It implies that the union has created a new State, without destroying the old States; that the duality is in the essence of the State itself that there is a divided sovereignty, and a double citizenship. This is … the sense in which the phrase “a Federal Commonwealth” is used in this section and in the preamble. The word “Federation,” which was primarily synonymous with the abstract “federal union,” is now frequently used as synonym for the concrete “Federal State.”

(3)

A DUAL SYSTEM OF GOVERNMENT – In recent years it has been argued that the word “federal” is inappropriately and inexactly used when applied to a State or 334 community; that there is no such thing as a federal State; that if there is a State at all it must be a national State; that any political union short of the principal attribute of statehood and nationhood, viz: sovereignty, is a mere Confederacy; and that “federal” can only be legitimately used as descriptive of the partition and distribution of powers which is peculiar to a federal system. Federal, it is said, is properly applied to denote a dual but co-ordinate system of government, under one Constitution and subject to a common sovereignty, in which one State employs two separate and largely independent governmental organizations in the work of government; the whole governing system, central and general, as well as provincial and local, constituting the federal government; the central and general government being one branch, and the provincial and local governments forming the other branch of the governing organization. … Hence, according to this view, the expression “Federal Government” means not the central and general government alone, not the provincial and local governments alone, but the governing system, central and general, as well as provincial and local, as parts of one whole government under one Constitution.

(4)

CENTRAL GOVERNMENT OF A DUAL SYSTEM – The term “federal” is often used as descriptive of the organs of the central and general government, such as the Federal Parliament, the Federal Executive, and the Federal Supreme Court. In this sense the word is in common use in the United States as synonymous with national. This use of the word has no important bearing on federal history or theory.

FEDERAL AND CONFEDERATE – But in whichever of the above meanings the adjective “federal” is used, in modern usage it is distinguishable from the adjective “confederate.” “Federal” is used of a type of union, or government, or State, in which the general and local governments are co-ordinate within their respective spheres, and both act directly on the citizens. “Confederate” is applied to a type of union, or government, known as a confederacy, in which the central government is incomplete – usually having only legislative powers – and its laws and ordinances are directed to the States, not to 10

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Annotated Constitution of the Australian Commonwealth cont. the citizens. Such a union is little more than a league or treaty between independent States, and does not create a new State, nor even, in the complete sense of the word, a new government; but merely provides a representative organization for the purpose of promulgating decrees and making requisitions upon the members of the league. It has no power to enforce its decrees or requisitions. This was the fundamental infirmity of the Confederacy of the United States which existed before the adoption of the Federal Constitution.

Notes&Questions

[1.60]

1.

Do you agree with Quick and Garran that the federal idea “pervades and largely dominates the structure” of the Australian Constitution? Considering the various references to federalism in the Constitution, which of them coincides with the idea of a “union of states”, a “federal state”, a “dual system of government” and the “central government of a dual system”? See Quick and Garran, pp 334-340 and compare C Saunders, “Constitutional Arrangements of Federal Systems” (1995) 25(2) Publius: The Journal of Federalism 61.

2.

How would you compare the importance of federalism with that of other ideas in the Constitution, such as the rule of law, the separation of powers and representative democracy? Is it possible to say that one of these ideas is more important or fundamental than another?

3.

Are Quick and Garran correct to suggest that there is no such thing as a “federal state” and that if there is a state at all it must be a “national” one? Can the “national state” idea make sense of all of the features of the Constitution? What, then, did the framers mean when they said that the people of the colonies had agreed to unite themselves into a “federal commonwealth”? For a discussion, see N Aroney, The Constitution of a Federal Commonwealth (Cambridge University Press, Cambridge, 2009), pp 1-8, 337-345, 368-369. The historical development of the notion of federalism and the influence of the United States experience in particular, are discussed by Professor Thomas Fleiner-Gerster.

Federalism in Australia and in Other Nations [1.70] T Fleiner-Gerster, “Federalism in Australia and in Other Nations”, in G Craven (ed), Australian Federation: Towards The Second Century (Melbourne University Press, Melbourne, 1992), pp 15-28 (most footnotes omitted) Throughout history, federalism has been: • a check against the exercise of excessive power by the central government; • a means to protect minorities; • a system to guarantee freedom and independence to local communities; • a constitutional framework to facilitate unification by small and weak nation states without the destruction of their national identity and sovereignty; • a possible means of safeguarding small democracies within greater democracies; • an attempt to prevent the creation of huge and inhuman bureaucracies through decentralisation to small authorities controlled by their citizens; • a mechanism to give citizens the opportunity to participate in the decision-making process at the local level. …18… [1.70]

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Part I: Introduction

Federalism in Australia and in Other Nations cont. United States federalism was based not on some political theory of decentralisation but on an urgent and pragmatic need for “a more perfect union” with a republican form of government (Harold Laski, The Problems of Federalism (1931), p 50). The 19 unique and creative ideas of the founding fathers of the United States were based on the conviction that it is possible to combine republican principles on a national level without destroying the self-determination and self-government of local units. The “revolutionary” character of the United States Constitution lay in its combination of federalism and republicanism. … The idea of establishing a national government based on dual sovereignty by leaving residual power to local governments was new, though Montesquieu had earlier developed basic principles regarding the concept of dual sovereignty itself: “In this form of government several political bodies consent to become citizens of a state bigger than that which they wanted to form. It is a society of societies which forms a new entity that can grow by the addition of new members, until its power guarantees the security of those who are united.” … Prior to the establishment of the United States, it had been believed that the only possible form of republican government was a highly centralised model. This centralised model, later bolstered by the adherence of France following the Revolution, greatly influenced European nations seeking to establish republican rule in the 19th and 20th centuries. … 20 … According to European thought, while political powers may be separated, they cannot be equal. There must, in general, be one primary legislative power that controls and supervises the other authorities. French doctrine stresses that while powers must be separated, they may not be used as checks against each other. Thus, for instance, the courts have no right to check legislative power, nor can they control administrators to ensure that they have not been acting ultra vires. In France, consequently, the entire control of administrative action lies in a special body, the Conseil d’Etat, which follows a newer administrative law model. … Considering this view of separation of powers, it is not surprising that the concept of dual sovereignty was not supported in European doctrine. Even in terms of pragmatic politics, it was not possible to develop mechanisms for dual sovereignty because the tradition of a monarch as head of state was inconsistent with the concept of separate but equal powers. Yet only by adopting this idea could the United States develop its presidential system, and establish it as a major alternative to parliamentary government. By introducing the concept of dual sovereignty, the United States Constitution provided a viable alternative form of republican government. The important feature of United States federalism is this concept of dual sovereignty combined with separation of powers. This combination supported the development of a system of “checks and balances” within the federal government, as well as between federal and State governments. … 23 Perhaps history, more than theory, explains differences among federal systems. Some federations, such as the United States and Switzerland, emerged from a confederation of sovereign States. In these countries, the individual states had enjoyed original sovereignty but transferred certain powers to the federal government, while retaining residual power. By contrast, federal nations that evolved from centralised systems, such as Austria, certain Commonwealth countries (eg, India), and – to a degree – the Federal Republic of Germany, developed federalism through decentralisation. Residual power in these countries was originally located in the emperor, king, or governor, and remained in the central state. According to monarchical tradition, residual power rests in the Crown, which is the “foundation of justice”, and thus lies in a centralised institution. In Switzerland, however – as in the United States – this power belongs to the cantons and is based on the democratic authority of local assemblies. Thus the power of the central government in Switzerland has been built up from the bottom, not directed down from the top. In the Commonwealth of Australia, the States were originally colonies but with essentially unlimited powers. Sovereign nations creating a federal union must decide what authority will be transferred to the central government by determining which powers are required by that government to rule effectively. A federal union created in this manner must take account of the expectations of its member states. Dual sovereignty therefore is perhaps best suited to – or is more likely to emerge in – those federal nations whose local units enjoyed original sovereignty prior to confederation. On the other hand, in a federal system formed through decentralisation, the central government will exercise greater control over the division of power. Local units will be granted powers and some degree of autonomy, but not so much as to interfere with the responsibilities of the central government to the citizenry as a whole. Even if the outcome of divided power sometimes seems the same, as if one views the glass as 12

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Federalism in Australia and in Other Nations cont. half-empty or half-full, there remains a difference in the quality of power-sharing resulting from a federal nation’s historical background. A state that is sovereign 24 before it joins a federal system has a unified historical foundation, established concepts of citizenship, a court system and political parties, which retain local significance following confederation. That historical legacy and the social, political or cultural traditions may not be shared by the entire federal society. Federal governments that emerged from centralised states are also likely to have different conceptions of the character of the federal constitution, different procedures for ordaining the constitution, and different procedures regarding constitutional amendment. In the United States, Australia and Switzerland, the constitutions were adopted along State lines: in the United States, ratification by the constituent units was required, while in Australia, referenda were held among the electors of the colonies …. Constituent cantons, states and colonies had and continue to have in these federations a decisive role in the adoption of a constitutional amendment. In most other federal states, the constitution may be modified by the national legislative chambers alone, and does not depend upon the consent of individual member states. Bicameralism was not a United States invention and is not a United States monopoly. Bicameral legislatures exist in unitary as well as in federal states. … 25 Hamilton and Madison [defended] the Senate as the house representing State interests and symbolising State sovereignty (Hamilton, Federalist Papers (no 9); Madison, Federalist Papers (no 39)). According to the Federalist Papers, bicameralism is also a means for ensuring democracy. “It doubles the security to the people by requiring the concurrence of two distinct bodies in schemes of usurpation or perfidy, where the ambition or corruption of one would otherwise be sufficient” (Madison, Federalist Papers (no 62)). The United States bicameral system has been a suggestive model. Switzerland had no bicameral tradition, and whether there should be one chamber or two was a continuing issue in Swiss history. In that history, and in the continuing debates, the influence of the United States Constitution is clear. Most federal constitutions provide for two legislative houses. … However, … [m]ost federal states have [also] been influenced by the Westminster model, where one legislative chamber (as in the Commonwealth of Australia) has complete control over the government. As it is the responsibility of parliaments to control and dismiss the government, granting equal power to two houses was viewed as inviting serious conflict. The United States founding fathers granted the Senate powers similar to those held by the Privy Council in England. This may be one reason why the House of Representatives was given special responsibility over bills raising revenue, whereas the Senate has greater power in the ratification of treaties and the appointment of judges and high-ranking executive branch officials. Because this tradition of unequal division of power did not exist in Switzerland, no attempts were made to 26 provide the “federal chamber” (the one in which representation is on a state basis) with greater privileges than the other chamber. Switzerland appears to be the only federal nation that has adopted both the idea of equal state representation in one house, and the concept of equal authority for both houses. …

[1.80]

Notes&Questions

Fleiner-Gerster claims that federalism promotes a number of important values. Do you agree with each item on the list that he proposes? The allocation of powers between the central government and the states is a crucial aspect of any federal system. How this issue was dealt with in Australia at the constitutional conventions of the 1890s is discussed by Professor Michael Crommelin.

[1.80]

13

Part I: Introduction

The Federal Model [1.90] M Crommelin, “The Federal Model”, in G Craven (ed), Australian Federation: Towards The Second Century (Melbourne University Press, Melbourne, 1992), pp 39-44 (footnotes omitted) 39 The Australasian Federation Conference in 1890 toyed briefly with two methods for allocating powers to government, one exemplified by the Canadian Constitution, the other by the United States. 40 The Canadian approach found little favour, then and later. As Playford said in Sydney in 1891: “When we first met in Melbourne two forms of constitution were promulgated, one based on the Canadian Constitution, and the other not so based. The first idea was to have a constitution in which the powers of the local legislatures were strictly defined, the residuum of power to rest entirely with the federal government. At that time I objected to that, and pointed out that we should most strictly define and limit the powers of the central government, and leave all other powers not so defined to the local legislatures.” The intent of the founders was clear: to curtail strictly the scope of national power. The United States approach was seen as the better means for achieving this end. As Deakin said in 1891: “We should fail in our duty if we did not embody in our draft such distinct limitation of federal power as would put the preservation of state rights beyond the possibility of doubt”. Dr Cockburn declared, at the same Convention: “With regard to the powers that are to be conceded to the central authority, and the powers that are to remain with the states I do hope that no attempt will be made to define the powers which are not surrendered by the individual states; because to define means to limit …”. No such attempt was made, then or later. Senate control over the exercise of the powers of the national government raised an important question concerning the relationship between the legislative and executive branches of that government. In particular, was responsible government compatible with a requirement of consent by the States, through the Senate, to the exercise of Commonwealth legislative power? Sir Samuel Griffith thought not. In his speech upon the Parkes resolutions in Sydney in 1891, he said: “…We propose to have an executive government having possibly, and having probably, seats in Parliament. How shall we guarantee that the machine will work if we insist that these ministers shall hold their offices in form as well as in reality, by 41 the will of one house only? Does not the possibility of a very serious deadlock occur here to every hon gentleman at once?” The solution for Griffith lay in “a constitution so elastic as to allow of any necessary development that may take place”. Sir John Downer proposed a more radical departure from English constitutional tradition: “The method adopted in Switzerland might be resorted to. The two houses might meet as one – the senate and the house of representatives – and appoint their ministry, who should retain office – there it is for three years – for a time to be determined. That would be a government which would have the confidence of the house, not responsible in the ordinary sense, and it would impinge upon our English notions to that extent; but still, I think, a government much more consistent with the federation which is to be brought about than a government which can only properly exist under an empire.” However, the Griffith approach prevailed in 1891. In 1897 the Barton resolutions maintained this open position. On that occasion, Baker opposed the entrenchment of responsible government: “A Constitution should be of historical growth, and not be manufactured. Although I am fully impressed with that idea, I am afraid that if we adopt this Cabinet system of Executive it will either kill Federation or Federation will kill it; because we cannot conceal from ourselves that the very fundamental essence of the Cabinet system of Executive is the predominating power of one Chamber.” But support for responsible government was strong, as exemplified by O’Connor: Now, I say that responsible government …is a form of government for which we have a hereditary preference; … it is a form of government the working of which we understand thoroughly; and it is a form of government to supplant which by something else which the people do not understand would mean, I think, the introduction of a dangerous experiment … So I take it as a principle that in the work of making this Constitution, whatever form the Federation may take, it must be a form consistent with the working of responsible government. … 42 That necessarily means a limitation in the power of the House which represents the States. 14

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The Federal Model cont. Isaacs was characteristically blunt in his identification of the problem: “There can be no doubt that the principle of equal powers of the Houses of Legislature is foreign to the principle of responsible government. … We cannot have the two”. … 43 The structure employed for allocation of powers to the Commonwealth and the States is asymmetrical. Commonwealth powers are specified. State powers are not. Subject to a few notable exceptions, Commonwealth powers are concurrent rather than exclusive. So too are State powers. Within the realm of concurrent power, Commonwealth legislation prevails over inconsistent State legislation. Demarcation of legislative powers thus depends entirely upon the meaning attributed by the High Court to the language employed in the Constitution to specify Commonwealth legislative powers. That language is necessarily imprecise, notwithstanding the aspirations of the participants in the Constitutional Conventions. … Moreover, the failure to specify any exclusive State powers means that there is no express constraint upon the meaning that may be attributed to those general words of definition of Commonwealth powers. The asymmetry in the allocation of powers to the Commonwealth and the States lies in the fact that while the Commonwealth is guaranteed a measure of legislative power lying beyond the reach of the States, no comparable guarantee is extended to the States.… 44 [T]he role of political parties and [the] diminish[ed] … role of the Senate… was predicted by Deakin in Adelaide in 1897: “Although our special Senate is to be created nominally to protect State interests and rights, as a matter of fact and history, if we trust to American experience, we can say that State rights will never be more dependent upon the State Councils of Australia than they will be in the House of Representatives; and they will be fought for as earnestly in the House of Representatives as in the States Council … We shall have party government and party contests in which the alliances will be among men of similar opinions, and will be in no way influenced by their residence in one State or another. The guardianship of State interests is so secure under these conditions that their protection in any special way becomes comparatively immaterial.” … … The function envisaged for the Senate of providing the consent of the States to the exercise of Commonwealth legislative powers requires a diffusion of power which is fundamentally at odds with the concentration inherent in responsible government. The Senate is inevitably cast in the role of a house of review rather than a house of the States. Although the control of the exercise of Commonwealth legislative powers, for the purpose of limiting their impact upon the States, may well be a consideration in the conduct of review, it could scarcely be regarded as the predominant consideration. The result is a model that fails to provide an effective limitation upon the powers of the national government.

[1.100]

1. 2.

Notes&Questions

How might the “asymmetry in the allocation of power to the Commonwealth and the States” affect the interpretation of Commonwealth powers? Many of the framers of the Constitution believed that responsible government “will either kill Federation or Federation will kill it”. What is the tension between federalism and responsible government? Was the prediction accurate? If so, which died and which survived? Consider B Galligan, “The Founders’ Design and Intentions Regarding Responsible Government”, in P Weller and D Jaensch (eds), Responsible Government in Australia (Drummond, Melbourne, 1980).

Federalism as a principle of constitutional interpretation [1.110] How we should understand the federal character, or the “federal balance”, of our

Constitution is a recurring question. It has spawned a long list of explanatory concepts. The political scientists speak, for example, of “co-ordinate federalism”, “co-operative federalism”, “concurrent federalism”, “coercive federalism” and “fiscal federalism”. But at the beginning [1.110]

15

Part I: Introduction

of the debate over the meaning and interpretation of the Australian Constitution was the question whether the federation would be understood as deriving its origin from an agreement among (the people of) the constituent States or one based upon the consent of the people of Australia considered as a (undifferentiated) whole. The tension between these two ideas was recognised and articulated by Chief Justice John Marshall in one of the most celebrated decisions of the Supreme Court of the United States.

McCulloch v Maryland [1.120] McCulloch v Maryland 17 US (4 Wheat) 316 (1819) at 402–405 402 … The powers of the General Government, it has been said, are delegated by the States, who alone are truly sovereign, and must be exercised in subordination to the States, who alone possess supreme dominion. 403 It would be difficult to sustain this proposition. The convention which framed the Constitution was indeed elected by the State legislatures. But the instrument, when it came from their hands, was a mere proposal, without obligation or pretensions to it. It was reported to the then existing Congress of the United States with a request that it might “be submitted to a convention of delegates, chosen in each State by the people thereof, under the recommendation of its legislature, for their assent and ratification.” This mode of proceeding was adopted, and by the convention, by Congress, and by the State legislatures, the instrument was submitted to the people. They acted upon it in the only manner in which they can act safely, effectively and wisely, on such a subject – by assembling in convention. It is true, they assembled in their several States – and where else should they have assembled? No political dreamer was ever wild enough to think of breaking down the lines which separate the States, and of compounding the American people into one common mass. Of consequence, when they act, they act in their States. But the measures they adopt do not, on that account, cease to be the measures of the people themselves, or become the measures of the State governments. From these conventions the Constitution derives its whole authority. The government proceeds directly from the people; is “ordained and established” in the name of the people, and is declared to be ordained, “in order to form a more perfect union, establish justice, insure domestic tranquillity, and secure 404 the blessings of liberty to themselves and to their posterity.” The assent of the States in their sovereign capacity is implied in calling a convention, and thus submitting that instrument to the people. But the people were at perfect liberty to accept or reject it, and their act was final. It required not the affirmance, and could not be negatived, by the State Governments. The Constitution, when thus adopted, was of complete obligation, and bound the State sovereignties. … For, “in order to form a more perfect union,” it was deemed necessary to change this alliance into an effective Government, possessing great and sovereign powers and acting directly on the people, the necessity of referring it to the people, and of deriving its powers directly from them, was felt and acknowledged by all. The Government of the Union then … is, 405 emphatically and truly, a Government of the people. In form and in substance, it emanates from them. Its powers are granted by them, and are to be exercised directly on them, and for their benefit.

[1.130]

1.

16

Notes&Questions

As between “the States” and “the people”, to whom does Marshall CJ ascribe ultimate sovereignty? Does this discount the possibility that “the peoples of the States” might represent the ultimate democratic authority upon which the Constitution is based? Forrest McDonald, States’ Rights and the Union: Imperium in Imperia 1776–1876 (University Press of Kansas, Kansas, 2000), pp 8-9, has claimed that the US Constitution is neither “a compact … among sovereign states … nor a Lockean compact between ruler and ruled, nor even a compact of the whole people among [1.120]

Constitutional Fundamentals

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themselves. It [is] a compact among peoples of different political societies, in their capacities as peoples of the several states. Such a compact was undreamed of in political philosophy.” To what extent is the Australian Constitution a compact among people or peoples? And how much does the fact that it is contained in a statute of the British Parliament complicate the picture? Consider the subtle differences between the following statements. Baxter v Commissioners of Taxation (NSW) (1907) 4 CLR 1087 at 1104–1105: [The Constitution] partakes both of the character of an Act of Parliament and of an international agreement made between the people of the several self-governing Australian Colonies, and also between the people of those Colonies collectively and the United Kingdom, for the Preamble recites that “The people of New South Wales, Victoria, South Australia, Queensland, and Tasmania, humbly relying on the blessing of the 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.”

Amalgamated Society of Engineers v Adelaide Steamship Co Ltd (1920) 28 CLR 129 at 142: 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.

On the significance of these two cases for the future of Australian federalism, and the difference that subtle variants in the conceptual foundation of the Constitution can make in its interpretation, see Chapters 12 and 14. Sir Harry Gibbs discusses some of the implications in the following extract.

The Decline of Federalism [1.140] H Gibbs, “The Decline of Federalism” (1994) 18 University of Queensland Law Journal 1 at 1–8 (some footnotes omitted) 1 There can be no doubt that the framers of the Australian Constitution intended that it should establish a federal government in the true sense. … The purpose of this paper is to discuss the extent to which that intention has been defeated with the result that the Constitution has progressed, or perhaps one should say degenerated, in the direction of centralisation. … There is of course no academic model to which a federation must conform, but a polity cannot be called federal unless the regional governments – that is, 2 in Australia the States – have powers which the central government is not able to render inoperative and unless the regional governments have the ability to provide themselves with the finances necessary to enable their powers to be exercised. Under the Constitution as it has been interpreted by the High Court, it seems that neither of these conditions exists. If that is so, the reason why Australia remains a federation is not because in legal theory its Constitution is now federal in character, but because in practice the political influence of the States, and perhaps the strength of public opinion, is such that the nation remains a federation for practical purposes. The question whether the States have powers and functions which are independent of the Commonwealth, or which cannot be destroyed or substantially impaired by the exercise of Commonwealth powers, depends on the manner in which the powers conferred on the Commonwealth by the Constitution are interpreted. If the powers of the Commonwealth are capable of indefinite expansion it must follow that the powers of the States are at risk of annihilation. Ever since 1920 the powers of the Commonwealth have been interpreted in a way that attaches no real [1.140]

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The Decline of Federalism cont. significance to the constitutional position of the States. Two strands of theory, in particular, have led to this position. First, there is the principle, enunciated by O’Connor J in the Jumbunna case, and often since applied that: “[W]here it becomes a question of construing words used in conferring a power … on the Commonwealth Parliament, 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 … 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. … The view that the words of a Constitution should be given a generous interpretation had been suggested by Marshall CJ in Gibbons v Ogden and has subsequently been accepted by the Privy Council in interpreting the constitutional provisions of former British Colonies (Ong Ah Chuan v Public Prosecutor [1981] AC 648 at 670). The second principle, laid down in the Engineers’ Case, is on its face equally unsurprising. That is, that the words of the Constitution are to be read in their natural sense and “if the text is explicit, the text is conclusive”. In that case the Court did appear to acknowledge that when the text is ambiguous, recourse must be had to the context and scheme of the Constitution but in reaching its decision it gave no weight to the fact that the Constitution was that of a federation and not of a unitary state. As Dixon CJ subsequently pointed out in Melbourne Corporation v Commonwealth the effect of the Engineers’ Case was that a power to legislate with reference to a given subject enables the Parliament of the Commonwealth to make laws which, upon that subject, affect the operation of the States and their agencies. A constitutional power conferred on the Commonwealth will not be read down by reference to an assumption that some specific heads of power were granted or reserved to the States (In re Foreman & Sons Pty Ltd; Uther v Federal Commissioner of Taxation (1947) 74 CLR 508 at 530). However, the High Court has held that the legislative powers of the Commonwealth are subject to an implied limitation that they cannot be exercised in a manner which would be inconsistent with the continued existence of the States and their capacity to 3 function or which would involve a discriminatory attack upon a State in the exercise of its executive authority. … It was recently said in Australian Capital Television Pty Ltd v Commonwealth that the inference to be drawn from the continuance of the States as independent bodies politic with their own constitutions and representative legislatures is that, subject to a plain intention to the contrary, the powers of the Commonwealth do not extend to interfering in the constitutional and electoral processes of the States. Those implied restrictions on Commonwealth power have not, however, been held to require that any limit should be placed on the powers of the Commonwealth in response to the need to preserve the scope of the legislative powers of the States. Only a grudging and minimal recognition is allowed to the fact that the Constitution is federal in character when the question arises how the words of the Constitution which grant powers to the Commonwealth should be construed. The fact that the Constitution is a federal one has been allowed to play no significant part in determining the meaning and scope of the various powers conferred by s 51 of the Constitution. It may well be that the federal context of the Constitution in itself provides little assistance in deciding upon the scope of some of the provisions of the Constitution. Section 109, for example, which has the effect that a Commonwealth law prevails over a State law to the extent of any inconsistency between them, has been of great importance in strengthening Commonwealth power at the expense of that of the States. It is obviously necessary in any federal constitution that some provision should be made, either expressly or by implication, for the situation in which the laws of the central and regional legislatures conflict. Even if the powers of the Commonwealth Parliament are strictly confined, direct inconsistency with State law can arise. However, the principle formulated by Isaacs J in Clyde Engineering Co v Cowburn and adopted in subsequent cases, that there is inconsistency when the Commonwealth legislature expressly or impliedly evinces an intention to cover the whole field, and a State legislature assumes to enter to any extent on the same field, has been most influential in ensuring the predominance of Commonwealth power at the expense of that of the States. The adoption of that test no doubt indicates that the Courts have favoured a centralist point of view rather than a federal one. Nevertheless, logically it can hardly be said that the fact that the Constitution is federal in character indicates either that the wider test of inconsistency should be adopted or that it should not. 18

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The Decline of Federalism cont. Similarly, it may be said that the federal nature of the Constitution provides no sure guide in deciding whether many of the provisions of s 51 of the Constitution which confer powers on the Commonwealth Parliament should be given a wider or narrower meaning. For example, the fact that Australia is a federation gives no indication of the extent to which the powers conferred on the Commonwealth with reference to “trade and commerce with other countries, and among the States” (s 51(i)), or “foreign corporations, and trading or financial corporations formed within the limits of the Commonwealth” (s 51(xx)) should be given a wider or narrower meaning. On the other hand, it may be that too little attention has been paid to the context of the Constitution, and that generosity of interpretation was carried a little far, in the line of decisions that held that a union can cre- 4 ate an industrial dispute extending beyond the limits of any one State, within s 51(xxxv) of the Constitution, by making a demand on employers in different States, even if an employer on whom the demand is made has no argument with his or her own employees and does not employ any member of the union which made the demand. That question may, however, be no more than academic if, as the Commonwealth claims, and as appears possible, the Commonwealth has power to regulate the conditions of employment of any employees by recourse to the power given by s 51(xxix) of the Constitution. That power, to legislate with regard to “external affairs”, has been given an interpretation “which … proceeds without regard to the context of par (xxix) in s 51 and to the federal character of the Constitution” to repeat the words of Wilson J in Richardson v Forestry Commission. … Under Australian law the Executive can enter into and ratify treaties without the authority or approval of the Parliament. There is no limit to the matters that may be dealt with by a treaty and the Executive is free to enter into an international agreement binding Australia to conduct its internal affairs in a particular manner, even though the Parliament has no power, apart from that given by s 51(xxix) to legislate with regard to such affairs. The result is that the legislative power of the Commonwealth can be expanded by Executive action and the expansion can be wide enough to extend over almost all, if not all, of the matters within State legislative power. The grant of power to the Commonwealth by s 51 becomes quite irrelevant. … 5 … The doctrine that the Commonwealth cannot legislate in a way that is inconsistent with the continued existence of a State becomes rather a mockery if the Commonwealth nevertheless has power to legislate in a way that will enable it if it wishes to render most or all State powers ineffective. It appears no exaggeration to say that the combined effect of s 51(xxix) and s 109 is that the Commonwealth can annihilate State legislative power in virtually every respect. Mr D F Jackson, QC has rightly observed “that in the future the issue between State and Commonwealth Governments is more likely to be whether the Commonwealth power should be exercised, rather than whether it exists. In other words, the resolution of the issue is likely to be by political, rather than by legal, means” (D F Jackson, “Federalism in the Future: The Impact of Recent Developments” (1984) 58 Australian Law Journal 438 at 447). There is another constitutional provision which has enabled the Commonwealth to invade many areas which under the Constitution one would expect to be within the province of the States. That is s 96 which provides that: “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 opening words of the section, and the reference to ten years which also appears in s 87 (the Braddon clause) suggests, as Sir Owen Dixon has said, that it may well be that s 96 was conceived by the framers as a transitional power. However, … it is established that a grant of financial assistance and the conditions to which it is subject will be valid although a State is bound to apply the money to a defined purpose which is outside the power of the Commonwealth to effect directly. Thus, although the Commonwealth is not given any express power by the Constitution to deal with such matters as the provision of roads, health, education, housing or legal aid, grants are made to the States to be applied for those purposes subject to very detailed conditions as to the way in which the States should perform their functions. … 6 In actual practice the States raise for themselves less than half of the revenue they need for their own purposes. … On the other hand, the Commonwealth raises more than 75% of all taxes levied in Australia although its expenditure only represents about 50% of all governmental expenditure…. [This] puts the financial relationship between the States and the Commonwealth out of balance. The result is a reduction of accountability, because the Commonwealth raises money although it is not [1.140]

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The Decline of Federalism cont. responsible for the way in which it is spent while the States spend money although they are not responsible for the manner in which it is raised. Another provision which has been interpreted in a way that imposes difficulties for the States in their financial arrangements is s 90 which makes the power of the Commonwealth Parliament to impose duties of customs and excise exclusive. The expression “duties of excise” is one which has no fixed connotation and it has been necessary to attribute some rather artificial meaning to the expression where it appears in s 90. It seems apparent that it was originally intended that there should be a close connection between duties of excise and duties of customs but in a number of High Court cases effect has been given to the view that the section was intended to have some wider economic purpose with the result that the scope of the section, and accordingly the extent of the limitation of the taxing power of the States, has been broadened. … 7 It will be seen that there are grave dangers, in theory, to the survival of a true federal system in Australia and considerable deficiencies in practice, in the working of the system. Unfortunately, the values of federalism are not widely understood. … In the case of a nation, such as Australia, which covers a far flung geographical area, a federal system enables that level of government which ought to be most directly concerned with the ordinary affairs of the people – that is the States – to be close enough to the people to have a true understanding of local feeling and local needs. Although there are those who urge that the Commonwealth would benefit if it had increased powers to control the economy, economists such as Professor Kasper have persuasively argued the superior advantages of competitive federalism (W Kasper, “Making Federalism Flourish”, in Upholding the Constitution, vol 2 (Melbourne: The Samuel Griffith Society, 1993), p 167; W Kasper, “Competitive Federalism, May the Best State Win”, in Restoring the True Republic (St Leonards: Centre for Independent Studies, 1993), p 53). Experience of the management of the economy by the Commonwealth does not necessarily inspire complete confidence in the superior virtues of centralised economic power. Nor, for that matter, does the increased influence of the Commonwealth on such matters formerly managed by the States as education make one believe that it will always be beneficial to give increased powers to Canberra. Whatever views may be held on these matters one argument which seems to me to be quite unanswerable is that there is little or no likelihood that the States will be abolished in the foreseeable future, and that accordingly the federal system for which our Constitution was designed to provide should be made to work effectively and without a costly and inefficient duplication of effort. The nature of the malady is apparent, but it is not so easy to prescribe the remedy. … I have inevitably been reminded of the well known lines of Virgil (Aeneid, VI, 126): “Facilis descensus Averno … Sed revocare gradum, superasque evadere ad auras, Hoc opus, hic labor est. (Easy is the descent to Avernus, but to retrace one’s footsteps, and ascend again to the upper air – that is the labour, that is the toil).” … 8 In the end, the best hope for the survival of federalism in Australia lies in the recognition, by politicians of all parties and at all levels of government, and by the public, of the value, and indeed the necessity, of the maintenance of a real, workable federal system in Australia. … [O]ne can only hope that the weaknesses of the present system will be appreciated and that an effort will be made to make the Constitution work more as it was intended by the framers to do.

[1.150]

1. 2.

3.

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Notes&Questions

Do you agree that the preconditions for federalism do not exist in Australia today? Which provisions of the Constitution in particular does Sir Harry Gibbs use to exemplify his argument that since 1920 the Constitution has been interpreted in ways which give no real significance to the constitutional position of the States? For recent assessments of the work of the High Court in relation to federalism see L Zines “Changing Attitudes to Federalism and its Purpose”, in R French, G Lindell and C Saunders (eds) Reflections on the Australian Constitution (Federation Press, Sydney, 2003); G Winterton, “The High Court and Federalism: A Centenary Evaluation”, in P Cain (ed), Centenary Essays for the High Court of Australia (LexisNexis Butterworths, [1.150]

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CHAPTER 1

Sydney, 2004), p 197; J Allan and N Aroney, “An Uncommon Court: How the High Court of Australia Has Undermined Australian Federalism” (2008) 30 Sydney Law Review 245. On the challenges that Australian federalism presently faces, and possible reforms, see P Kildea, A Lynch and G Williams (eds), Tomorrow’s Federation: Reforming Australian Government (Federation Press, Sydney, 2012) and G Appleby, N Aroney and T John (eds), The Future of Australian Federalism: Comparative and Interdisciplinary Perspectives (Cambridge University Press, Cambridge, 2012).

Representative and responsible government [1.160] The High Court in Lange v Australian Broadcasting Corporation (1997) 189 CLR

520 spoke of representative and responsible government as fundamental to the Australian Constitution.

Lange v ABC [1.170] Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 557–559 (some references omitted) Brennan CJ, Dawson, Toohey, Gaudron, McHugh, Gummow and Kirby JJ: 557 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. … 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 558 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” (Victorian Stevedoring & General Contracting Co Pty Ltd v Dignan (1931) 46 CLR 73 at 114). 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 [1.170]

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Part I: Introduction

Lange v ABC cont. 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 (Northern Suburbs General Cemetery Reserve Trust v Commonwealth (1993) 176 CLR 555 at 572–573, 580–581, 590–591, 597–598). 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” (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 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 (see Campbell, “Parliament and the Executive”, in Zines (ed), Commentaries on the Australian Constitution (1977) 88 at 91). Section 49 also provides the source of coercive authority for each 559 chamber of the Parliament to summon witnesses, or to require the production of documents, under pain of punishment for contempt (see R v Richards; Ex parte Fitzpatrick and Browne (1955) 92 CLR 157). 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 (1896), p 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), pp 319, 337–339). Reference should also be made to s 128 which ensures that the Constitution shall not be altered except by a referendum passed by a majority of electors in the States and in those Territories with representation in the House of Representatives, taken together, and by the electors in a majority of States.

[1.180]

Notes&Questions

For discussion of the implications which have been drawn from the notions of representative and responsible government, see Chapter 11. What other freedoms in your view might be required for an effective system of representative and responsible government? Compare J Kirk, “Constitutional Implications from Representative Democracy” (1995) 23 Federal Law Review 37 and J Goldsworthy, “Constitutional Implications Revisited” (2011) 30 University of Queensland Law Journal 9. The constitutional status of responsible government [1.190] Although recent judicial decisions of the High Court have shed considerable light on

the question, the precise constitutional status of responsible government remains a complex and pressing question. Is it mere convention? Is the general principle itself legally entrenched, with its application – the exact principles which emanate from it – determined by convention? Are the principles which emanate from it to be regarded as entrenched constitutional rules? If so, does this apply to those principles which are indisputable and core, or does it apply to all principles, even those which remain uncertain? These are important questions generally. In particular, they are fundamental in the determination of whether any particular breach thereof 22

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is subject to judicial review. Also, is it in fact desirable from a policy perspective that such fundamental principles in our constitutional arrangements should be frozen in the form of constitutional rules, given that they have themselves been a prodigy of flexible adaptation to the evolution of our political arrangements? Will freezing them not hamper the evolution of responsible government in line with political and constitutional developments? Professor George Winterton was of the view that the principles of responsible government, being implied constitutional principles, were indeed enforceable.

Parliament, the Executive and the Governor-General [1.200] G Winterton, Parliament, the Executive and the Governor-General (Melbourne University Press, Melbourne, 1983), pp 1-5 (most footnotes omitted) 1 CONFLICT OF PRINCIPLES The Australian Constitution embodies four great constitutional principles: representative government, federalism, the separation of powers, and responsible government under the Crown. Representative government is common to all democratic polities, but the other three are not and, indeed, coexist in Australia in a state of uneasy equilibrium. Federalism and the legal separation of powers were derived from the Constitution of the United States, whereas responsible government was borrowed from Britain and the federating Australian colonies. As will be seen, much of the uncertainty surrounding federal executive power in Australia stems from the contradictions inherent in the simultaneous operation of the British and the American principles. The constitutional implications of federalism and the separation of powers conflict with those of responsible government in three important respects. A Written constitution and responsible government under the Crown The division of governmental powers involved in the American doctrines requires a written constitution. It would not be practically feasible to divide powers between different political structures (as in federalism) or governmental organs (as in the separation of powers) without a reasonably detailed document allocating the powers among them. There is no inherent inconsistency between responsible government under the Crown and a written constitution, 2 because the written instrument could, in theory, spell out the requirements of responsible monarchical government, as it does those of the American principles. But constitution-makers of the (British) Commonwealth have experienced considerable difficulty in committing to paper the requirements of responsible government, and their efforts have not been marked by conspicuous success. Essentially, the difficulty is that, while the core of the British principle of responsible government is clear, the edges are fuzzy and ill-defined. Clearly, as was demonstrated in 1979 – in March in the United Kingdom and in December in Canada – when the government loses a vote of confidence in the House of Commons it must advise a general election or resign. But as one moves from that core of the principle of responsible government the position becomes steadily less clear. So, for example, it was recently observed that there are at least three reasonably authoritative views regarding a government’s obligations upon defeat in the House of Commons, all of which are “constitutional myths”. Similarly, in “normal times”, when Parliament has granted adequate Supply and the government commands a majority in the lower House of Parliament, the Queen or the Governor-General has no independent discretion and may act only on the governments advice. But is this also the position when things are not running so smoothly, when the government lacks guaranteed Supply and faces a hostile majority in the Senate? Apart from uncertainty regarding the actual content of the conventions of responsible government, the founders faced an additional difficulty in framing written rules about the monarchy: should they prescribe on paper the theory or the practice? A great gulf separates the theory of the British monarchy from its actual operation. Arguably, in theory, the Queen’s powers have almost the same ambit as those claimed by Charles I: it might be argued that she could exercise all the Crown’s common law or statutory powers on her own initiative, without taking or acting on advice (unless a statute provided otherwise), and could veto proposed legislation passed by both Houses. But the real position is very different: all the Queen’s powers are exercisable only on the advice of her Ministers (except, perhaps, [1.200]

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Parliament, the Executive and the Governor-General cont. the so-called “reserve powers” of the Crown), and her power to veto Bills has fallen into disuse, if it still exists at all. In short, the theoretical powers of the Crown must be seen in the light of a history in which the principal events are the beheading of Charles I and the deposition of James II, the growth of parliamentary 3 supremacy and its political corollary, ministerial responsibility to Parliament, and the development of the House of Commons as a truly representative chamber with far greater powers than the House of Lords. The framers of the Australian Constitution were clear that, as far as the monarchy was concerned, they wanted to reproduce in Australia the actual, and not the theoretical, British position. But they were afraid of appearing gauche and uneducated in British eyes, and it was feared that British lawyers would ridicule an attempt to spell out on paper the real position of the Crown in 1900. … So, despite the misgivings of some 18 the framers used language to describe some of the powers of the Crown that even James I might have applauded. They were prepared to do so because, having enshrined responsible government in the Constitution, they believed that no constitutional lawyer could suggest for a moment that the powers conferred on the Governor-General were to be taken literally. … In short, it is seen that, while responsible government under the Crown is compatible with a written constitution – which federalism and the separation of powers require – committing to paper the implications of responsible government is difficult, and prescribing the powers of the Crown requires even greater care. The decision to express the theoretical, rather than the actual position of the 4 Crown may have lightened the draftsmen’s task, but it was a serious and dangerous mistake, which sowed the seeds for future constitutional conflict. The first harvest occurred in 1975 (when the Governor-General dismissed the Government, which was unable to secure Supply from the Senate), but it is unlikely to have been the last. Whereas in the largely unwritten British Constitution the “conventions” restraining the Monarch’s independent discretion have to contend only with other unwritten rules, such as the Royal prerogative, in Australia the principles of responsible government (most of which are not expressed in the Constitution) must compete with powers expressly conferred on the Governor-General. In such a situation, it can be an uphill battle to maintain that the unwritten principles should prevail – as the events of 1975 demonstrated. Thus, in his “Detailed Statement of Decisions” of 11 November 1975, Sir John Kerr wrote: “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.” But it would be erroneous to overstate the framers’ reticence on the details of responsible government under the Crown. As will be seen, responsible government, even if not clearly expressed in the document, has a constitutional status greater than mere “convention”; it is clearly implied in the Constitution by ss 44(iv), 62, 63 and 64. Of course, the Constitution is generally, but not always not explicit on the details of the institution. For example, it does not state that the government is responsible to Parliament, nor whether responsibility is to the Senate as well as to the House of Representatives, but even here the constitutional lawyer who bears in mind the constitutional environment of the framers, and remembers that the Constitution is a British statute, can find the answer hinted at in ss 53, 57, 62 and 64. The Governor-General’s obligation to act only on advice is inferred much more easily from ss 62 and 64, so it is inaccurate – and misleading indiscriminately to lump together all the elements of responsible government as mere “conventions”. Sir John Kerr, in the passage quoted, was referring to an alleged “convention … that the Senate must never … reject an appropriation bill”; in view of the language of the Constitution, he may have had little choice but to ignore the alleged convention. But the same is not true of the elements of responsible government implied in the Constitution. Like all constitutional implications, they must be applied unless the 5 language of the document is clearly to the contrary. With the greatest respect, Professor Geoffrey Sawer is not correct in asserting that it is “certain” that the High Court would not hold that as a matter of law the Governor-General’s power under s 64 is normally exercisable only on ministerial advice (subject to the possible survival of an emergency “reserve power”, in the Governor-General to act without advice). High Court dicta on similar powers [see Gibbs J in PMA (Victoria v Commonwealth) (1975) 134 CLR 81 at 156; Jacobs J in 24

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Parliament, the Executive and the Governor-General cont. Western Australia v Commonwealth (1975) 134 CLR 201 at 278] suggest a willingness to give constitutional status to some, at least, of the elements of responsible government. Professor Geoffrey Lindell has argued that the position taken by Winterton (above) has been vindicated by developments since then.

Responsible Government and the Australian Constitution [1.210] G Lindell, Responsible Government and the Australian Constitution – Conventions Transformed into Law? (Federation Press, Sydney, 2004), pp 1-7 (footnotes omitted) Scope of this paper: I wish to discuss an aspect of those cases [Australian Capital Television Pty Ltd v Commonwealth (1992) 177 CLR 106 and Lange v Australian Broadcasting Corporation (1997) 189 CLR 520] which … concerns the effect of the implications drawn by the Court from… the system of responsible government which is also provided for in the Constitution. In particular, the paper focuses on the extent to which the rules of responsible government have now become judicially enforceable. …2 Background: Before 1992 there was clearly no shortage of judicial authority to suggest that responsible government formed part of the Australian Constitution. The view I had taken in the past was that such authority, to the extent that it was not merely rhetorical, went no further than to recognise rather than enforce the rules that governed that concept. I preferred to think that leaving aside the express requirement that Ministers were required to be members of the Parliament in s 64, the Constitution was deliberately structured to make it possible to permit compliance with the rules of responsible government without necessarily requiring such compliance. To the extent that those rules could operate consistently with the Constitution they operated according to their general tenor ie as rules of convention and not lay. My view was that these rules were too vague to operate as rules of law, except perhaps for the basic principle of collective responsibility. I also thought that conventions had the advantage of flexibility which allowed them to evolve and develop without reference to the electors voting at a constitutional referendum … [I]t seems clear that the High Court is now willing to draw implications from provisions in the Constitution that partially recognise the system of representative government known as responsible government. For example, in the Nationwide News case, Deane and Toohey referred to the possibility of deriving implications from “the general doctrines of government which underlie the Constitution and form part of its structure” given the fact that “the doctrine of responsible government can arguably be seen as a (further) main general doctrine underlying the Constitution as a whole” (at 69-705). The other doctrines mentioned were federalism and the separation of judicial power and representative government. There are clear remarks in the unanimous judgment of the High Court in Lange that strongly point to this possibility such as the ample reference made to provisions which either partially recognise responsible government or those which could not be understood without reference to the same. (at 557–559). In addition there are the remarks that begin by stating “Whatever the scope of implications arising from responsible government …” (at 561). Finally, in this 3 connection, it is difficult in principle to distinguish between the ability to draw implications from representative government and those from the particular kind of representative government known as responsible government, at least if my previous approach is not accepted. If this is correct, it would seem to follow that some rules of constitutional convention have now become transformed into rules of law so as to become constitutionally entrenched. (As was also recognised by Professor Zines although he treats the rules of constitutional convention derived from responsible government as legally binding and enforceable only to the extent that they exist for the purposes of furthering representative government: L Zines, The High Court and the Constitution (4th ed, 1997), pp 249-51. … Professor Winterton favoured the legal enforceability of the main features of responsible government even before the Nationwide News and Lange cases.) It should be stated at the outset that this paper is written on the assumption that the issues canvassed in the paper are justiciable [1.210]

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Responsible Government and the Australian Constitution cont. so as to enable the courts to declare and enforce any conventional rules which should now be seen to be rules of law. It is true that there are dicta in Council Civil Service Unions v Minister for Civil Service suggesting that, despite advances in judicial review, some prerogative powers are not by their very nature susceptible to judicial review such as, for example, the appointment and dismissal of Ministers and the dissolution of Parliament. In my view it is dangerous to think this would now be sufficient to prevent the judicial enforcement of the implications discussed here or that the standing of appropriate litigants to maintain such litigation would not be recognised. In the first place it is possible that the dicta assume that relevant rules in the United Kingdom are based only on constitutional conventions. There have also been a growing number of cases in newer British Commonwealth countries which have treated such issues as justiciable once the rules sought to be declared and enforced have been identified as rules of law. In addition the view expressed by 4 leading commentators to the Joint Select Committee on the Republic Referendum was that the reserve powers and the conventions which regulated their exercise are subject to judicial review, at least to the extent that they exist for the purposes of furthering representative government. It is possible that what may still remain as a residue of non-justiciability concerns the application of the rules of administrative law such as those which deal with procedural fairness and the exercise of a power for an improper purpose and also the validity of elections which ensue as the result of the exercise of the power of the Governor-General to dissolve both Houses. Leaving those matters aside, however, it suffices for present purposes to indicate that it is not fanciful to assume the availability of judicial relief to declare and enforce the legally binding aspects of the rules of responsible government under the Australian Constitution. Meaning and interpretation of responsible government: The possibility of implications being drawn by the High Court from the system of responsible government and the extent to which the rules of responsible government have now become judicially enforceable mean that much will turn on the definition of responsible government and how that concept is judicially interpreted. …[T]here is much to be said for the view [of Professor Winterton] that: “Essentially the difficulty is that, while the core of the British principle of responsible government is clear, the edges are fuzzy and ill-defined.” Putting that difficulty to one side, the essential or core elements of the concept consist in my view of the notion that: 5 (1) The Crown’s representative should act in accordance with the advice of Ministers who are members of the Parliament subject to any exceptions created by the reserve powers enjoyed by the Crown’s representative. (2) Those Ministers must collectively and individually command the confidence of the House of Representatives, although what is left of the notion of individual ministerial responsibility remains somewhat attenuated. This has left a gap or vacuum which has had to be filled by administrative law reforms. There are other ancillary or incidental aspects which also form part of that core definition and these consist of Cabinet solidarity and Cabinet secrecy. The objections to entrenchment to which I referred earlier are not without significance even if the concept is to be recognised as being constitutionally entrenched in the full sense. The objection based on the loss of the dynamic character of conventional rules has been partially met by the High Court’s emphasising that the concept is dynamic and capable of evolving. Thus, in Egan v Willis ((1998) 195 CLR 424 at 451 [41] per Gaudron, Gummow and Hayne and see also similar remarks in Re Patterson; Ex parte Taylor (2001) 207 CLR 391 at 403 [17] per Gleeson CJ, 460 [212] per Gummow and Hayne JJ) three justices said: “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 New South Wales after 1855 necessarily reflected closely those from time to time accepted at Westminster.” I suggest that what was said about New South Wales is equally applicable to the Australian Constitution and the date of its adoption. If that was not the case, the same Constitution would have the effect of freezing into our constitutional arrangements dated understandings of ministerial responsibility. An example of this would be the notion of public servants being seen as only 26

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Responsible Government and the Australian Constitution cont. “accountable to the public through the accountability of ministers and cabinet to parliament”. The potential for that flexibility is further underlined by the remarks of Gleeson CJ when he indicated that 6: “[R]esponsible government is a concept based upon a combination of law, convention, and political practice. The characteristics of responsible government are not immutable” (Re Patterson; Ex parte Taylor at [21]). … Whatever the difficulties, constitutional orthodoxy suggests that the entrenchment should extend to the core or essential aspects of responsible government as they were understood in 1900 – as distinct from the way it operated in its non-essential or accidental aspects at that time. The latter are left to evolve by convention and practice unencumbered by the need to obtain the approval of the electors at a referendum under s 128 of the Constitution. It seems an extreme application of the principles of progressive interpretation to allow the core or essential aspects to operate by reference to the same processes. It is unlikely that the entrenchment of the essential elements of responsible government, as a legally binding part of the Constitution, is conditional and dependent upon their continued operation as rules of mere convention and political practice. It is true that the distinction between essential and non-essential characteristics of constitutional terms is not without its difficulties. Nevertheless, it is one which has been regularly used in the judicial interpretation of constitutional provisions which define the scope of legislative powers, as well as in more recent times, restrictions on those powers. The same approach is likely to be applied to the judicial interpretation of the entrenched part of responsible government. It is possible that the Court may seek to meet the other objection I also outlined earlier based on vagueness by relying on the response of the Court 7 in Lange when it chose to emphasise the need to ground implications in the text and structure of the Constitution. Thus, the whole Court said in that case: “Under the Constitution, the relevant question is not, ‘What is required by representative and responsible government?’ It is, ‘What do the terms and structure of the Constitution prohibit, authorise or require?’” (Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 567). This could prove to be an additional useful device for rejecting the vague aspects of the doctrine of responsible government …

[1.220]

Notes&Questions

While there are numerous cases in which the High Court has said that responsible government forms part of the Australian Constitution, and there are some significant cases in which the Court has derived implications from the system of representative and responsible government established by the Constitution, are there any cases in which the Court has enforced a particular rule of responsible government, such as the convention that the Governor-General must ordinarily act on the advice of responsible ministers who have the confidence of the Parliament? Professor Nicholas Aroney has argued that there are as yet no such cases.

Law and Convention [1.230] N Aroney, “Law and Convention”, in B Galligan and S Brenton (eds), Constitutional Conventions in Westminster Systems: Controversies, Changes and Challenges (Cambridge University Press, 2015), pp 24-28, 38-40 (references omitted) 24 The modern, technical use of the term “convention” is a creature of the nineteenth century. …. But it was Dicey, drawing on Freeman, who stamped upon the term its current technical sense, when he asserted that the British constitution consists of two kinds of “rules”: first, “law” or legal rules in the “strictest sense”, ie, rules that are enforceable by the courts and, secondly, “conventions, understandings, habits, or practices” which “regulate [the] conduct” of political actors but are not [1.230]

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Part I: Introduction

Law and Convention cont. judicially enforced and have not been codified into law by legislation … . Dicey’s insistence on the distinction between law and convention, and the criteria by which he distinguished them (ie, enforcement by the courts and legislative codification), provides an indication of the influence of legal positivism on his thought … . The significance he ascribed to the role of convention is, however, also a measure of the extent to which he sought to integrate the historical perspectives of those like Burke, Hume and Freeman, who emphasised the role of custom and tradition in the evolution of British society and government, with the insights of those like Hearn and Bagehot, who had drawn attention to the vital role of conventions in the contemporary operation of the Westminster system … . Synthesising these perspectives, Dicey argued that the term “constitutional law” had to be understood to embrace both “law” (ie, that which is enforceable by the courts) and “convention”, which he also referred to as legally unenforceable “constitutional morality” … . However, the sharp distinction that Dicey proposed … has been the subject of much criticism, usually related to doubts about the theory of law upon which the distinction is based. It is said that law is ultimately no different from convention because both law and convention consist of rules which regulate conduct, and law, like convention, ultimately rests on customs, understandings, mores, and practices of political morality. From this point of view it is argued that conventions can be treated as if they are law. They can be acknowledged and taken into consideration by the courts. They may even “crystalize” into law and be enforced as such by the courts... . An example of legal enforcement remains something of a “holy grail” … . 38 As in Canada, there are no Australian cases in which the specific content of a convention has been enforced as such. Moreover, while there are several cases where the existence of conventions have been regarded as relevant and important considerations in the court’s reasoning, because the High Court of Australia does not have advisory jurisdiction, it has not been asked to opine on the existence and content of a convention in the overtly political manner that has occurred in Canada. Rather, in 39 Australia conventions have come into judicial reasoning in the course of resolving a legal question that arisen for determination … . One the most significant examples of the High Court’s approach to conventions is to be found in the line of decisions known as Freedom of Political Communication cases. In the most authoritative of these, Lange v ABC ((1997) 189 CLR 520), the High Court of Australia unanimously concluded that the Australian Constitution, by virtue of its provision for a system of representative democracy, necessarily implies the existence of a constitutionally enforceable guarantee of freedom of communication in relation to political matters. The main thrust of the reasoning in the case was based upon particular features of the text and structure of the Australian Constitution … . According to the Court, the system of representative democracy that operates under the Constitution consists of two distinguishable structural principles: “representative government” and “responsible government.” Representative government consists of a system of constitutional rules which require that the legislative powers of the Commonwealth are vested in a bicameral Parliament that is directly chosen by the people of the Commonwealth voting in regular elections. Several specific provisions of the Constitution combine to require the operation of such a system as a matter of enforceable constitutional law. On the other hand, according to the Court, the principle of responsible government rests upon a combination of both specific rules contained in the written constitution and the familiar Westminster conventions of parliamentary responsible government practised and recognised generally by Australian political actors. These principles constituted the twin foundations for the inference that the Constitution necessarily implies the existence of a legally enforceable freedom of political communication. Indeed, the doctrine of responsible government played a crucial role in the Court’s reasoning because it supported the extension of the implied freedom to communications, not only concerning the conduct of elected members of Parliament, but also about the performance of Ministers of State in the exercise of their executive powers and responsibilities. But while Lange relied upon the conventions of responsible government as an essential step in its reasoning, the case did not involve the 40 direct enforcement of a particular conventional duty. Nor did it rely upon them as an isolated “system of conventions” but as part of a complete system of government established by the Constitution as a whole. The existence of the written constitution, as setting out a coherent “plan” of government, shaped the entire structure of the reasoning. No 28

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Law and Convention cont. question arose as to a possible inconsistency between a particular constitutional rule of law and a particular constitutional convention; both elements were construed as part of a coherent constitutional scheme. If the case had involved an alleged contradiction between a rule contained in the written constitution and a conventional rule, the Court would have been placed in a situation similar to that which confronted the Canadian Supreme Court in the Patriation reference. Given the way in which the Court distinguished between “representative government” and “responsible government”, it seems the most likely from the reasoning of the Australian High Court that a distinction between law and convention would for these purposes have been maintained. In Egan v Willis, for example, the High Court relied upon the Westminster conventions of collective and individual ministerial responsibility to Parliament to support the conclusion that the upper house of the New South Wales Parliament, just as much as the lower house, has an inherent power to hold Government Ministers to account by requiring them to answer questions and to produce documents, backed up by a capacity to impose sanctions for breach of such requirements such as by temporary expulsion of a member from Parliament. However, in coming to this conclusion, the Court maintained the distinction between “convention and parliamentary practice” on one hand and rules having “legal or constitutional status” on the other, and emphasised that responsible government is an evolving set of practices, not legally enforceable rules. For further background on the decision not to spell out the details of responsible government in the Constitution, particularly in the light of the federal issues associated with the powers of the Senate, see Aroney, The Constitution of a Federal Commonwealth (2009), pp 193-206, 210-214, 237-239.

[1.240]

Notes&Questions

In R (on the application of Miller and another) v Secretary of State for Exiting the European Union [2017] UKSC 5, the Supreme Court of the United Kingdom stated: “[141] It is well established that the courts of law cannot enforce a political convention. … [144] Attempts to enforce political conventions in the courts have failed. … [146] Judges … are neither the parents nor the guardians of political conventions; they are merely observers. As such, they can recognise the operation of a political convention in the context of deciding a legal question …, but they cannot give legal rulings on its operation or scope, because those matters are determined within the political world. … [151] In reaching this conclusion we do not underestimate the importance of constitutional conventions, some of which play a fundamental role in the operation of our constitution. … But the policing of [the] scope and the manner of … operation [of conventions] does not lie within the constitutional remit of the judiciary, which is to protect the rule of law.”

CONSTITUTIONAL GOVERNMENT Separation of powers [1.250] A division of powers can be of two sorts. There can be a separation of powers

according to territory. This is the division of powers which makes a federal system possible. But there can also be a separation of powers. Professor Maurice Vile has provided an authoritative and much quoted account of the history of the idea of the separation of powers and its relationship to constitutionalism. The following extract discloses the variety of political ideas captured by the doctrine. [1.250]

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Constitutionalism and the Separation of Powers [1.260] M Vile, Constitutionalism and the Separation of Powers (2nd ed, Liberty Fund, Indianapolis, 1998), pp 1-20 (footnotes omitted) 1 … Western institutional theorists have concerned themselves with the problem of ensuring that the exercise of governmental power, which is essential to the realisation of the values of their societies, should be controlled in order that it should not itself be destructive of the values it was intended to promote. The great theme of the advocates of constitutionalism, in contrast either to theorists of utopianism, or of absolutism, of the right or of the left, has been the frank acknowledgment of the role of government in society, linked with the determination to bring that government under control and to place limits on the exercise of its power. Of the theories of government which have attempted to provide a solution to this dilemma, the doctrine of the separation of powers has, in modern times, been the most significant, both intellectually and in 2 terms of its influence upon institutional structures. It stands alongside that other great pillar of Western political thought – the concept of representative government – as the major support for systems of government which are labelled “constitutional”. For even at a time when the doctrine of the separation of powers as a guide to the proper organisation of government is rejected by a great body of opinion, it remains, in some form or other, the most useful tool for the analysis of Western systems of government, and the most effective embodiment of the spirit which lies behind those systems. Such a claim, of course, requires qualification as well as justification. The “doctrine of the separation of powers” is by no means a simple and immediately recognisable, unambiguous set of concepts. On the contrary it represents an area of political thought in which there has been an extraordinary confusion in the definition and use of terms. … 12 A major problem in an approach to the literature on the doctrine of the separation of powers is that few writers define exactly what they mean by the doctrine, what are its essential elements, and how it relates to other ideas. Thus the discussions about its origin are often confused because the exact nature of the claims being made for one thinker or another are not measured against any clear definition. Some kind of preliminary analysis of the doctrine and its elements is therefore necessary before we step into the vast mass of material that history presents to us. The process of definition of a “pure doctrine” of the separation of powers will of necessity have an arbitrary quality, and no doubt other opinions can be put forward as to what constitutes the “essential doctrine”, on the one hand, and what are modifications of, and deviations from, it, on the other. However, no value judgment is intended in putting forward a particular definition, except to say that it is considered the most useful formulation for the purposes we have in mind. It is labelled the “pure doctrine” simply to indicate that it represents a coherent, interrelated set of ideas, with the complicating factors of related theories removed. … 13 A “pure doctrine” of the separation of powers might be formulated in the following way: It is essential for the establishment and maintenance of political liberty that the government be divided into three branches or departments, the legislature, the executive, and the judiciary. To each of these three branches there is a corresponding identifiable function of government, legislative, executive, or judicial. Each branch of the government must be confined to the exercise of its own function and not allowed to encroach upon the functions of the other branches. Furthermore, the persons who compose these three agencies of government must be kept separate and distinct, no individual being allowed to be at the same time a member of more than one branch. In this way each of the branches will be a check to the others and no single group of people will be able to control the machinery of the State. This stark, extreme doctrine we shall then label the “pure doctrine”, and other aspects of the thought of individual writers will be seen as modifications of, or deviations from, it. It is true, of course, that the doctrine has rarely been held in this extreme form, and even more rarely been put into practice, but it does represent a “bench-mark”, or an “ideal-type”, which will enable us to observe the changing development of the historical doctrine, with all its ramifications and modifications, by referring to this constant “pure doctrine”. We shall not go as far as to say that only a thinker who fully subscribes to the above formulation is a “separation of powers theorist”, for this would exclude most of those who have written on the subject and whose intentions were closely in line with the general ethos of the doctrine, but clearly all these elements must be present to some extent for a writer to be considered in this category. Many writers have of course contributed to the development of the theory by evolving one or more elements of it, 30

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Constitutionalism and the Separation of Powers cont. without being separation of powers theorists – indeed, whilst rejecting the doctrine. Thus the idea of the functions of government has been evolved in large part by the theorists who implicitly or explicitly rejected other essential elements of the doctrine. 14 … The first element of the doctrine is the assertion of a division of the agencies of government into three categories: the legislature, the executive, and the judiciary. The earliest versions of the doctrine were, in fact, based upon a two-fold division of government, or at any rate upon a two-fold division of government functions, but since the mid 18th century the threefold division has been generally accepted as the basic necessity for constitutional 15 government. We may not today take the scriptural authority that John Sadler in 1649 propounded as the basis for a threefold division – “And why may not the Sacred Trinity be shadowed out in Bodies Politick, as well as in Naturall?” – but something of a mystical quality seems still to surround this method of organising the agencies of government. In the 18th century the idea of a balance or equilibrium in the system of government which depended upon the ability of any two of King, Lords, and Commons being able to prevent the third from exceeding the proper limits of its power, provided a basis for the idea, at any rate, of an odd number, rather than an even number, of governmental agencies, but today such a justification seems to have disappeared entirely, and in fact it is often difficult to force the manifold agencies of a modern system of government into these three categories. Nevertheless this division does reflect important, continuing elements in liberal democratic theory. The growth of three separate branches of the government system in Britain reflected in part the needs of the division of labour and specialisation, and partly the demand for different sets of values to be embodied in the procedures of the different agencies, and in the representation of varying interests in the separate branches. This aspect of the doctrine, although usually assumed by political theorists rather than explicitly developed, is clearly central to the whole pattern of Western constitutionalism. The diffusion of authority among different centres of decision-making is the antithesis of totalitarianism or absolutism. Thus in the totalitarian State every aspect of the State machine is seen merely as an extension of the party apparatus, and subordinate to it. A continuous effort has to be made to prevent any division of the machine from developing its own interest, or from creating a degree of autonomy in the taking of decisions. In practice the pressures which operate against this attempt to maintain a single monolithic structure are too strong, for the price in inefficiency which has to be paid is too high, and of necessity rival centres emerge in the bureaucracy and in industry or else- 16 where. But the “ideal” of the totalitarian state is that of a single all-embracing agency of government. The “separation of agencies”, therefore, is an essential element in a theory which assumes that the government must be checked internally by the creation of autonomous centres of power that will develop an institutional interest. Without the other elements of the doctrine of the separation of powers being present we might still expect some limitation on the ability of a single group to dominate the government if separate agencies are established. Even if the personnel of the agencies overlap, powerful influences may arise to create divergences of interest within the government. Differing procedures introduce differing values and different restraints; the emergence of an “institutional interest”, the development of professionalism, the influence of colleagues and traditions, all provide the possibility, at least, of internal checks. Separate agencies, composed of distinct bodies of men even where functions are shared can be made representative of different groups in the community, and so, as with bicameral legislatures, provide the basis of a check upon the activities of each of them. The second element in the doctrine is the assertion that there are three specific “functions” of government. Unlike the first element, which recommends that there should be three branches of government, this second part of the doctrine asserts a sociological truth or “law”, that there are in all governmental situations three necessary functions to be performed, whether or not they are in fact all performed by one person or group, or whether there is a division of these functions among two or more agencies of government. All government acts, it is claimed can be classified as an exercise of the legislative, executive, or judicial functions. The recommendation then follows that each of these functions should be entrusted solely to the appropriate, or “proper”, branch of the government. This view of the “functions” of government is extremely abstract, and some of the attempts to justify this threefold division have reached a very high degree of abstraction indeed. It may be distinguished from the very different view of the functions of government which enumerates them [1.260]

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Constitutionalism and the Separation of Powers cont. as, for example, the duty of keeping the peace, of building roads, or of providing for defence. These we might label the “tasks” of government in order to distinguish them from the more abstract notion of function. In the period before Locke and Montesquieu firmly established this abstract view of the functions of government there were two main 17 streams of thought, in one of which the word “power” was used to describe the function of legislating, or executing the law, and in the other a more practical view was taken of the multiplicity of government acts by dividing up the “attributes of sovereignty” into six, seven or more categories, which included, as well as making laws, such tasks as the control of the coinage, or the appointment of standard weights and measures. The triumph of the more abstract conception of the “powers” or functions of government in the 18th century, and its later development and ramifications, was of great importance for the way in which later writers approached the problems of government structure. In the 20th century this view of the nature of the functions of government has been subjected to severely critical analysis, but the vocabulary of the doctrine still dominates our everyday usage and our way of thinking about the nature of the operations of government. The third element in the doctrine, and the one which sets the separation of powers theorists apart from those who subscribe to the general themes set out above but are not themselves advocates of the separation of powers, is what, for want of a better phrase, we shall describe as the “separation of persons”. This is the recommendation that the three branches of government shall be composed of quite separate and distinct groups of people, with no overlapping membership. It is perfectly possible to envisage distinct agencies of government exercising separate functions, but manned by the same persons; the pure doctrine here argues, however, that separation of agencies and functions is not enough. These functions must be separated in distinct hands if freedom is to be assured. This is the most dramatic characteristic of the pure doctrine, and is often in a loose way equated with the separation of powers. The final element in the doctrine is the idea that if the recommendations with regard to agencies, functions and persons are followed then each branch of the government will act as a check to the exercise of arbitrary power by the others, and that each branch, because it is restricted to the exercise of its own function will be unable to exercise an undue control or influence over the others. Thus there will be a check to the exercise of the power of government over “the people” because attempts by one branch to exercise an undue degree of power will be bound to fail. This is, of course, the whole aim and purpose of the doctrine, but it is just here that the greatest theoretical difficulty is to be found; and as a result what we have 18 termed the pure doctrine has therefore been modified by combining it with some rather different doctrine to produce a complex amalgam of ideas about the limitations to be placed upon government authorities. The pure doctrine as we have described it embodies what might be called a “negative” approach to the checking of the power of the agencies of government. The mere existence of several autonomous decision-taking bodies with specific functions is considered to be a sufficient brake upon the concentration of power. Nothing more is needed. They do not actively exercise checks upon each other, for to do so would be to “interfere” in the functions of another branch. However, the theory does not indicate how an agency, or the group of persons who wields its authority, are to be restrained if they do attempt to exercise power improperly by encroaching upon the functions of another branch. The inadequacy of the controls which this negative approach to the checking of arbitrary rule provides, leads on to the adaptation of other ideas to complement the doctrine of the separation of powers and so to modify it. The most important of these modifications lies in the amalgamation of the doctrine with the theory of mixed government, or with its later form, the theory of checks and balances. The connections between these theories will be examined more fully in the ensuing chapters; from an analytical point of view the main consideration is that these theories were used to import the idea of a set of positive checks to the exercise of power into the doctrine of the separation of powers. That is to say that each branch was given the power to exercise a degree of direct control over the others by authorising it to play a part, although only a limited part, in the exercise of the other’s functions. Thus the executive branch was given a veto over power of legislation, or the legislative branch was given the power of impeachment. The important point is that this power to “interfere” was only a limited one, so that the basic idea of a division of functions remained, modified by the view that each of the branches could exercise some authority in the field of all three functions. This is the amalgam of the doctrine of the 32

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Constitutionalism and the Separation of Powers cont. separation of powers with the theory of checks and balances which formed the basis of the United States Constitution. Related to this, and to its predecessor in time, is an amalgam of the doctrine of the separation of powers with the theory of mixed government to produce a partial separation of functions. That is to say that one function, the legislative, was to be shared, but other functions were to be kept 19 strictly separate. This was a basic element in 18th-century English constitutionalism, the theory of balanced government. These modifications of the doctrine have of course been much more influential than the doctrine in its pure form. … Two further concepts must be mentioned which have not figured to any great extent in the literature on the separation of powers, but whose relationship to the doctrine is of great importance. The first, an extremely ancient concept, is the idea of procedure as a check to the exercise of power. The belief that “due process” is an essential part of constitutional government is of great antiquity, and it runs parallel with ideas of mixed government and the separation of powers, but has relatively rarely been explicitly linked with 20 those ideas and made an integral part of those theories. The second notion, a much more modern one, is the idea of process in government. This term, although used in different ways, indicates an awareness that government and politics do not consist in the automatic operation of formal procedures, but that there is a whole complex of activities around these procedures which determines the exact way in which they will be operated, sometimes in fact bringing about through the medium of the procedure exactly the reverse of what the procedure was intended to achieve. The concern of political studies with the role which political parties and groups play in the processes of government makes it impossible any longer to discuss a theory like that of the separation of powers purely in terms of the more formal, legal institutions of government. If the theory has anything to offer it must be able to cope with the complexities of “politics” as well as the structure of governments. The long history of the doctrine of the separation of powers reflects the developing aspirations of men over the centuries for a system of government in which the exercise of governmental power is subject to control. It illustrates how this basic aspiration towards limited government has had to be modified and adapted to changing circumstances and needs. It offers a rich mass of material, of human thought and experience, on a subject which remains today a matter of vital importance. To follow the course of this history should be of interest in itself, but it is also an essential step towards the understanding of the ideas of the past which have helped to shape our own, and towards the reformulation of these ideas into a more coherent theoretical approach to the nature of modern constitutional government.

[1.270]

Notes&Questions

1.

It is often claimed that the principle of separation of powers is embodied in the Australian Constitution. But in the light of Vile’s discussion, what directly follows from this assertion? On this point see J Finnis, “Separation of Powers in the Australian Constitution: Some Preliminary Considerations” (1968) 3 Adelaide Law Review 159.

2.

Is there a separation between legislative and executive powers or functions in Australia? Can there be such a separation under a system of responsible government? See Winterton, Parliament, the Executive and the Governor-General (1983), pp 64-71 and G Winterton, “The Relationship between Commonwealth Legislative and Executive Power” (2004) 25 Adelaide Law Review 21.

3.

Distinguish between (1) arguments for the value of the separation of powers based on restricting the possibility of tyranny (eg, Madison, Federalist No 47, (2) arguments based on the legitimacy of each branch in exercising particular powers and (3) arguments based on institutional competence (the expertise or “knowledge” of each branch). In considering the question of which branch of government has the [1.270]

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institutional competence to decide which issues, note the following remarks of N Barber, “Prelude to the Separation of Powers” (2001) 60 Cambridge Law Journal 59 at 72: Separation of powers encourages us to consider various interconnected structural factors that affect the competency of institutions in the performance of their tasks. First, the composition and skills of an institution must be examined: the knowledge and experience of the actors within it. Secondly, the scope of the institution’s informationgathering powers may be of interest; some bodies are better than others at gathering different types of information. Thirdly, the manner of the institution’s decision-making process may be significant; some issues may lend themselves well to expert decisionmaking, others will be better allocated to amateur processes which have the virtues of openness and inclusivity. This point leads on to a fourth consideration: the vulnerability of the institution to outside pressures. Whether this is considered an advantage or a danger will depend both on the particular issue before the decision-maker and on our understanding of the nature and importance of citizens’ participation in decision-making.

4.

Is there a tension between the modern regulatory state and the principle of the separation of powers? For a recent restatement of the argument that the separation of powers is the most fundamental safeguard for the preservation of liberty, see S Ratnapala, “Separation of powers: Cornerstone of liberty under law”, in S Ratnapala and G A Moens (eds), Jurisprudence of Liberty (2nd ed, LexisNexis, Sydney, 2011). Just which understanding of the separation of powers doctrine is in place in the Australian Constitution? Sir Anthony Mason has discussed this point.

A New Perspective on Separation of Powers [1.280] A Mason, “A New Perspective on Separation of Powers” (1996) 82 “Canberra Bulletin of Public Administration” 1 at 2–8 (some footnotes omitted) 2 The lesson of history is that the separation of powers doctrine serves a valuable purpose in providing safeguards against the emergence of arbitrary or totalitarian power. The lesson of experience is that the division of powers is artificial and confusing because the three powers of government do not lend themselves to definition in a way that leads readily to a classification of functions. The difficulty of precise definition arises from the impossibility of defining each of the three powers in a way that reveals them as mutually exclusive concepts. As well as legislators, judges make law, if only in a minor way. The Executive also makes law pursuant to statutory authority. Judges and courts, other than federal courts, exercise administrative functions. Legislatures convict and punish for contempt. And administrators and administrative tribunals determine a range of disputes. This problem, arising from the inherent absence of mutual exclusivity in the three powers, has become more acute as the processes of government have become more complex. A specialist tribunal, such as the Australian Broadcasting Authority, which is primarily an administrative authority, may be authorised to issue prescriptive rulings and to conduct hearings in relation to alleged violation of conditions of licences or prescriptive codes of conduct. In the interests of efficiency, good administration and informed decision-making a combination of functions may be highly desirable. Even in the conduct of hearings, particularly in relation to specialist and technical subjects, much is to be gained from the strong participation of experts who have a mastery of those subjects. In the light of these problems, a purposive functional approach to the separation of powers provided for by the Australian Constitution has much to commend it. The doctrine should operate to maintain and enhance the system of representative and responsible government brought into existence by the Constitution and to ensure the maintenance of the rule of law by an independent judiciary whose responsibility it is to determine justiciable controversies. Apart from creating a federal system under the Crown and providing for a separation of powers, the principal objects of the Constitution were to provide for a system of representative and responsible government and the maintenance of the rule of law by an independent judiciary. 34

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A New Perspective on Separation of Powers cont. The incorporation of the separation doctrine in the Australian Constitution The framers of the Australian Constitution, without perhaps perceiving precisely what they were doing or the difficulties inherent in the exercise, adopted the separation framework contained in the United States Constitution. However, they departed from that framework by providing for responsible government according to the Westminster model, thereby compromising the separation of legislative and executive powers. It is likely that the Convention delegates did not appreciate that there was great difficulty in classifying governmental functions according to the tripartite division demanded by the separation doctrine. Their ignorance in this respect may have been due to the fact that in Great Britain, owing to the supremacy of the legislative power, there had been no occasion for the courts to distinguish between the functions (Quick and Garran, The Annotated Constitution of the Australian Commonwealth (1901), p 720). Likewise, the framers of the Constitution did not perceive that a strict separation of powers might, on top of the federal distribution of powers, result in an unacceptable fragmentation of the powers of government. Such a fragmentation could lead to weak inefficient government, a complaint sometimes voiced in the United States. Contrast what actually happened in Australia during the Second World War when under the National Security Act 1939 (Cth) the Executive made wide-ranging regulations for the government of the country in wartime. … 8 Notwithstanding our contradictory approach to the separation of powers, stemming from our treatment of it as a classification of functions, closer attention to the doctrine might enhance the role and standing of Parliament. At the same time, closer attention to the purposes which the separation of judicial power serves may throw light on what is legitimate and permissible in terms of executive functions undertaken by courts and judges. The separation doctrine will protect individual legal process rights and, operating as a guide or influence, it can play a useful part in shaping public law principles and the role of the courts. Yet, the very abstraction of the concepts involved in the doctrine which are elements in the doctrine, will continue to create problems for judges and lawyers whose task is to expound the constitution.

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This article recommends a “purposive functional approach to the separation of powers provided for by the Australian Constitution”. What are the purposes of the doctrine? If judges adopt such an approach, what objective criteria might they apply? The following article by Professor Peter Gerangelos addresses this question, as well as examining the dichotomy between formalist and functionalist approaches to the separation of powers doctrine.

Interpretational Methodology in Separation of Powers Jurisprudence [1.300] P A Gerangelos “Interpretational Methodology in Separation of Powers Jurisprudence: The Formalist/Functionalist Debate” (2005) 8(1) Constitutional Law and Policy Review 1 at 3–20 2 … Formalism: The fundamental tenet of the formalist position is that the nature of each branch can be defined with sufficient clarity and mutual exclusivity to enable the setting up of a rigid demarcation between the three branches … This reinforces the separation of personnel and functions, and the maintenance of the institutional independence of the branches. More moderate versions acknowledge the difficulty in providing a definition attaining complete mutual exclusivity and make allowance for a degree of fluidity at the edges. Nevertheless, a core of meaning is thought to exist and is regarded as being capable of being defined conceptually – although history, custom, usage and tradition play a role and each function so defined is considered capable of being hermetically sealed off from the others. Any act of any of the branches will be declared unconstitutional if it usurps, or even in a minor way trespasses into, the functions belonging to another branch. However, in those hard cases where the breach is minor, merely technical and justifiable on public policy grounds such as the efficient [1.300]

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Interpretational Methodology in Separation of Powers Jurisprudence cont. operation of government, this can become an issue of some nicety … In Australia, the Boilermakers’ principle that Ch III courts cannot be 3 vested with non-judicial power unless it is incidental to judicial power, and the judicial reasoning upon which it was based, remains a classic example of the formalist approach. Judicial and academic criticism of the principle as unnecessary, inconvenient and one which creates inefficiencies in the functioning of government would not, under a formalist approach, ameliorate the strictness with which the doctrine is applied. For the majority in that case, “[t]he basal reason why such a combination is constitutionally inadmissible is that Chap III does not allow powers which are foreign to the judicial power to be attached to the courts created by or under that chapter for the exercise of the judicial power of the Commonwealth” (R v Kirby; Ex parte Boilermakers’ Society of Australia at 288) … It is clear that it matters not what the practical consequences may be in any particular instance so long as the structural and functional boundaries are maintained. Any balancing of the benefits achieved in the instant case on public policy or efficiency grounds, against the seriousness of what amounts to a breach of the doctrine, remains anathema to the formalist. Formalism, however, cannot be entirely dismissed as mere pedantry. In the context of the separation of powers doctrine, the method may be grounded in the rationale that only a strictly applied separation can uphold its underlying values; that is, the maintenance of liberal, representative government, an independent judiciary, the rule of law and the civil liberties benefits which flow in their train. If the rigours of this approach are ameliorated, even for the best of policy reasons, these values will be threatened by the gradual yet inexorable erosion of the essential boundaries, even though this may not be apparent in a particular case. Therefore, in the hands of its more enlightened exponents, there is a recognised purposive element to the rigours of formalism. Scalia J, writing the opinion of the Court in Plaut v Spendthrift Farm Inc (1995) 514 US 211 at 239–240) stated that: “In its major features it is a prophylactic device, establishing high walls and clear distinctions because low walls and vague distinctions will not be judicially defensible in the heat of interbranch conflict … Separation of powers, a distinctively American political doctrine, profits from the advice authored by a distinctively American poet: good fences make good neighbours.” Th[is] … adds a purposive element to formalism which redeems its otherwise unyielding and artificial rigidity … It is a creeping tyranny, a “death by a thousand cuts” to liberal representative government, which the formalist fears…. While this approach may result in unfortunate results in the instant case, the fear of a piecemeal erosion of the separation of powers doctrine and its rationale should not be underestimated. This purposive element comes more to the fore in the US, given the indisputably central place given to the separation of powers doctrine in the whole constitutional settlement. In light of the more ambiguous position of the separation of powers doctrine in the Commonwealth Constitution, this purposive underpinning may stand on less certain ground … Functionalism: All variants [of functionalism], however, eschew formalism’s maintenance of the rigid division of branches based on precise conceptual definitions, seeking rather to apply the separation of powers doctrine by taking into account factors external to purely conceptual analysis. Thus, in any particular instance … [the formalist’s concerns] would be outweighed by public policy factors, efficiency and the maintenance of good government. The issue for 4 functionalism is the degree of liberality which should be adopted in applying the separation of powers doctrine. It is sufficient for present purposes to note the two main variants which have emerged. The “internal functionalist approach” [which is the mainstream approach] will not regard as unconstitutional an act of one branch which does not fall within the scope of its own branch power unless “it is found to reach some unspecified level of intensity” whereby it “undermine[s] another branch’s performance of its essential function” and allows for the accretion of excessive power to the usurping branch … Classic illustrations … can be found in the majority reasoning of the US Supreme Court in Morrison v Olson (1988) 487 US 654 and Mistretta v United States (1989) 488 US 361 … The High Court’s jurisprudence reveals a flexible, eclectic approach, combining elements of pragmatism, public policy considerations, tradition and history with the more strictly formalist legal analysis, as exemplified by Boilermakers, based on the text of the Constitution, its structure and its resemblance to the US Constitution. Given the interplay of these various factors, it is not possible, nor necessarily desirable, to attempt to locate the High Court’s jurisprudence in either a formalist or functionalist “school”, although this very 36

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Interpretational Methodology in Separation of Powers Jurisprudence cont. eclecticism tells against the advocacy of a uniform formalist position … While Boilermakers’ exerted a strong jurisprudential influence in the direction of formalism, at least with respect to judicial power (a tendency which is still evident, (eg Re Wakim; Ex parte McNally (1999) 198 CLR 511)) the degree (some would say excess) of formalism evident in that case was in many respects innovative … 5 … [Even the] strictly formalist approach to the Boilermakers’ principle can be impugned: [As stated by Professor Zines] The conclusion the court arrived at cannot be reached by mere reflection on the distribution of powers in the first three chapters. One is led inevitably to policy or analogy. British and colonial history leads to a different conclusion. The United States analogy was seen, particularly by the High Court, as the appropriate one (but without an extensive examination of the working of that system and its use of legislative courts). Yet in relation to the legislative and executive power, British history, principles of responsible government and the needs of effective government have been treated as overriding what some of the judges believed to be the proper analytical interpretation of the text. What is therefore at issue and what is at the root of the judgments in the Boilermakers Case is the question, what desirable arrangements of power in the Commonwealth’s sphere are consistent with the text. Professor George Winterton has similarly adopted a critical position with respect to the formalism of Boilermakers’: “Clearly, any attempt to enforce a rigid separation of governmental functions or powers flies in the face of reality and must fail”. 6 … The broader application of a purposive functional approach was supported by Sir Anthony Mason in the abovementioned article, arguing that “a purposive functional approach to the separation of powers provided by the Australian Constitution has much to commend it”. … He noted … the “difficulty of precise definition [which] arises from the impossibility of defining each of the three powers in a way that reveals them as mutually exclusive concepts”. Moreover, “[t]his problem has become more acute as the processes of government have become more complex”. Even though this debate has been fuelled by the degree of formalism evident in Boilermakers’, that is not to deny that it may also have been part of the broader movement away from formalism … Writing in 1997, Zines noted: “In many areas of constitutional law there can be discerned a rejection of technical formulae or criteria, a more open application of policy considerations, more examination of historical material, occasional balancing of conflicting social interests and a more general denunciation of ‘form’ as against ‘substance’.” … 7 … The limitations of the formalist/functionalist dichotomy: … Formalism, as well as functionalism, can be purposive in its own way, making the determination of which is the most appropriate a vexed one. This recognition of a purposive element to formalism is indicative that absolute reliance on the text alone, that is, an uncompromising textual formalism as a basis for defining separation of powers principles, appears to be on the wane. It remains the view of the writer that the flexible, pragmatic approach to these questions as exhibited by Zines, Winterton and Mason, and the eclectic position of the High Court, reflects more accurately the relatively tentative position of the separation of powers doctrine in the Commonwealth Constitution compared with the US. This is not to say that the writer espouses a functionalist position universally; rather that the formalism/functionalism divide is inadequate alone to resolve such a multi-dimensional issue, particularly in Australia. At best, it can be said that each approach contains useful elements which can be used with discrimination across issues. The writer, however, does share the fears of the formalists of a piecemeal and inexorable erosion of the protections afforded by the separation of powers doctrine if a functionalist approach is applied too liberally, at least where core functions (especially judicial) are concerned. To this extent, there may be a very useful role for a purposive formalist approach in relation to those branch functions which are indisputably core. Beyond these, however, where precise lines of demarcation remain vague, a more purposive functional approach is certainly warranted. This may be perceived to be too nice a position, but it does provide some basis for a reasonable accommodation between the two schools … 8 … [Mason, for example,] acknowledged the possibility of locating some definitional core to judicial functions, thus meeting to some degree the definitional imperatives arising from the legal entrenchment of the separation of powers doctrine. “Some functions are inescapably exercises of judicial power”, he conceded … Some reconciliation may therefore be possible with the formalists at least at the level of core branch functions … [1.300]

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Interpretational Methodology in Separation of Powers Jurisprudence cont. Purposive nature of the separation of powers doctrine: Although a trite observation, at the broadest level the separation of powers doctrine in all its myriad forms and variations is purposive in nature … [T]he division of power which the doctrine advocates is at its core purposive. This purposive core must inform even the formalist approach to separation of powers jurisprudence. After all, the definition of the “functions” of the respective branches emerged and evolved from the experience of government, not from an exclusively theoretical, abstract consideration of their essence or nature. Nevertheless, some degree of abstract conceptual analysis becomes unavoidable for constitutional lawyers when the doctrine is entrenched in a written constitution and thus brought into the sphere of legal rules. It is essential if courts are to be able to adjudicate on questions of interbranch interference and usurpation … 9 … The fact that the doctrine itself is clearly purposive, and normative, relegates the dispute between formalism and functionalism to a narrower sphere of relevance: the determination of those more precise legal principles and constitutional limitations which regulate the interbranch relationship in light of the purposes which the doctrine, entrenched in a written constitution, is perceived as fostering in any particular polity … Clearly, the doctrine must operate in the context of the other constitutional principles which were incorporated in the Constitution, most notably representative and responsible government. Mason put it succinctly when he stated that the role of the separation of powers doctrine is “to maintain and enhance the system of representative and responsible government brought into existence by the Constitution and to ensure the maintenance of the rule of law by an independent judiciary whose responsibility it is to determine justiciable controversies” … Moreover, given the passive role of the judicial branch and its more vulnerable position vis-a-vis the legislature, a stricter separation of the judicial from the non-judicial branches would be consistent with the doctrine’s purposes as stated above; and, to that extent, the high formalism of Boilermakers’ is capable of at least 10 some justification. Indeed, if the purpose of the doctrine is to protect judicial independence and the rule of law, which is indisputable, the formalist line is at least respectable … Is the separation of judicial power a special case? Nevertheless, the question of the separation of judicial power cannot escape these broader difficulties [with formalism]. … First, a legal separation of judicial power was not part of the British inheritance, an inheritance which did not in any event place much store by written constitutions, with their accompanying legalism and rigidities. The prevailing influence from that quarter was the maintenance of judicial independence primarily in terms of institutional independence: that is, the emphasis was on the maintenance of judicial independence to interpret and apply the common law “by the protection of tenure and remuneration (afforded statutory protection eventually in the Act of Settlement 1701 in 1701) as opposed to the protection of judicial power in a functional sense.” …12 Definition and the formalist approach: The major weakness in the formalist approach … is the difficulty in providing complete and mutually exclusive definitions of the functions of each of the branches on the basis of conceptual analysis. If this cannot be achieved, at least at some fundamental level, the formalist approach of strict enforcement of the separation of powers doctrine is seriously undermined. Leading commentators, such as Mason, regard this as “impossible”, at least in a comprehensive way. Zines made the point that “there is no clear warrant for the view that all functions can be subsumed under the categories ‘legislative’, ‘executive’ and ‘judicial’”. Winterton noted that any attempted enforcement of a rigid separation of the functions or powers of government “flies in the face of reality and must fail”, referring to similar opinions expressed by numerous justices, and indeed quoting even from the majority in Boilermakers’ that it was “absurd to speak as if the division of powers meant that the three organs of government were invested with separate powers which in all respects were mutually exclusive.” … While the accuracy of the above conclusions cannot be denied, they encounter one significant difficulty when it has been authoritatively held that the separation of powers doctrine is legally entrenched and must be applied strictly, as it has been in Australia (especially in relation to judicial power). This “impossibility” must somehow be reconciled with the imperative towards some form of workable, mutually exclusive (at least at some level) definition of branch functions. It is a difficulty which is inevitable in the doctrine’s “transition from tenet of political philosophy to legal rule”. … Formalist judgments such as Boilermakers’ and Plaut were based on the premise that some enforceable boundary was achievable, at least at some level, and was indeed a natural consequence of 38

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Interpretational Methodology in Separation of Powers Jurisprudence cont. the entrenchment of the doctrine. As Sawer pointed out, the effect of Boilermakers’ was to give meaning to the tripartite structure of the Constitution such that it “must in general be regarded not as a convenience of drafting nor as directory, but as a series of mandatory propositions implying negatives”. For these “mandatory propositions implying negatives” to be enforced, some form of distinguishing definition must be given to each of the branches (at least at some level); even if one were to reject the uncompromising 13 formalism of Boilermakers’. This of course does not preclude the recognition of exceptions, as has in fact occurred. In the view of the writer, this imperative may be met if indisputably core functions belonging to each of the branches can be located and precisely defined. … If this can be achieved, it will provide the minimum requirements for the enforcement of the separation of powers doctrine, as legal rule, while due recognition to be given to the “impossibility” of a comprehensive, mutually exclusive definition covering all possible functions. This, of course, will mean that a purposive formalist approach will be possible at the level of core functions, while purposive functionalist considerations may (and should) apply beyond this level. The critical question remains: how are these core functions to be identified? Towards a resolution … Moderate functionalists would concur with this proposition in light of their acknowledgment that there may be some branch functions which are so fundamental that to make allowance for interbranch intermingling of functions where these are concerned would undermine the integrity of branch power. A strict formalist approach, however, is not entirely consistent with the uncertainties surrounding the intentions (or lack thereof) to entrench the doctrine as a legal rule in the Commonwealth Constitution; nor does it sufficiently take into account the difficulties in providing completely mutually exclusive definitions of branch power. Any approach which is adopted must be sufficiently flexible in order to be consistent with the history, tradition and the (at times countervailing) British constitutional principles which found their way into the Constitution; and with the abovementioned uncertainties. This may be unsatisfactory to formalists concerned with the piecemeal erosion of the protections that can only be afforded by strict separation. However, if there is an uncertain intention in the first place to entrench the separation of powers doctrine in the Constitution, much of the justification for the purposive formalist position melts away … On the other hand, the problem with functionalism still remains that of providing sufficiently objective criteria by which to determine the limits to be imposed on the intermingling of functions which it allows. The question of which interpretive technique is preferable depends, to a large extent, on the precise elements of branch power under consideration. It is already the case that functionalist considerations are far more influential in defining the precise relationship between legislative and executive power … as compared with those pertaining to that between judicial and non-judicial power, where a (purposive) formalist position can be more easily accommodated. While formalism can be easily reconciled with attempts to define core branch functions, functionalism can only be so reconciled if it can be established that the alleged usurpation or interference with the core functions so defined will, in all circumstances, constitute so serious a threat to the integrity of branch power that it must not be allowed. To achieve such a reconciliation [it must be determined] whether it is possible at all to isolate certain branch functions as core or fundamental … so that their absolute protection without exception is supported whether a formalist or functionalist approach is adopted. 14 The identification of fundamental elements of branch power: A very useful starting point lies in Zines’s observation that in order to come to terms with these definitional imperatives the tendency of the High Court is to proceed by way of identifying what is a “typical” function of each of the powers, while at the same time acknowledging that these typical functions may not necessarily describe all functions exercisable by each branch. This attempt to locate the typical constitutes some movement towards establishing at least a minimum degree of mutual exclusivity in definition. … The definition of the judicial function variously attempted by the High Court “emphasises” the making of a binding and authoritative determination about rights in a legal controversy between parties, such determination having the “quality” of “conclusiveness”. The typical or usual nature of legislative power, by contrast, is that which is concerned with “the laying down of rules of some degree of generality directing the behaviour of persons for the future”. Also contrasted is the exercise of executive or administrative discretion as it is “primarily” concerned with future rights and duties. In relation to the executive [1.300]

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Interpretational Methodology in Separation of Powers Jurisprudence cont. function to execute and maintain the Constitution and the laws of the Commonwealth, “it will be necessary to make determinations of existing rights and duties” and “at times a ‘controversy’ may be involved and administrative proceedings may be provided so that the parties may be heard”. However, such a determination will differ from judicial power to the extent that it lacks that critical element of finality, the “quality of ‘conclusiveness’” which belongs exclusively to it …. Zines’ concludes: “[I]n these matters the courts have been guided largely by history, the values involved in the separation of powers and by social policy; as well as by strict analysis.” … It therefore seems possible to attempt a sufficiently precise and exclusive definition by reliance on the identification of the “typical” or “pre-eminent” functions of each branch. In relation to judicial power, Zines was able to locate and articulate a definition containing the following core elements: the conclusive adjudication of controversies between parties in litigation resulting in an authoritative and binding declaration of their respective rights and duties according to existing law. Such a power, in its fullness, could only be vested in a Ch III court. Sawer had previously recognised these same features “the conclusive decision of a dispute between two or more persons by a third person as to their legal rights, powers, privileges and the like, the decision being governed by a legal standard assumed to exist before the decision is given” – as constituting core judicial functions. Moreover, Sawer recognised these elements of judicial power as being, “[o]n a more empirical view the non-transferable part of judicial activity”. If it is possible to recognise such “non- transferable” elements of branch activity, the formalism/functionalism divide certainly begins to narrow at the level where this becomes possible. Given the importance of such functions, formalism may come into its own with its insistence that no usurpation of such a complete power is permissible under the separation of powers doctrine. Although one cannot envisage functionalist compromises on this point in light of the significance of the power to the overall integrity of the branch, formalism’s rigour does provide a surer safeguard at these fundamental levels. However … [i]n relation to legislative and executive power, because of the immense difficulty (if not impossibility) in defining conceptually the latter power in particular, one is invariably reduced to resorting to the most mundane and straightforward aspects of each. For example, one can speak of the enactment of primary legislation (leaving aside the question of delegated legislation) within the institutional and procedural framework of Parliament as a core function of the legislative branch, which cannot be 15 usurped either by officers of the executive or by federal judges. In relation to executive power, one may refer to, as core: …the capacity to accomplish physical tasks within the limits of the law. For example, the government may carry…out public works on Crown land using funds already appropriated for the purpose by Parliament. As [Professor] Suri Ratnapala has pointed out, this “purely executive action that does not involve the making of a juristic decision”, or indeed any exercise of the core function of the legislative branch. But are the elements relied upon to identify core branch functions so mundane, and their usurpation so unlikely, that the very exercise of identification becomes rather a sterile one? The centre of strife, where the great separation of powers issues contend, such as in the hard cases of delegated legislation, quasi- judicial/legislative administrative tribunals, arbitral bodies and persona designata scenarios, lies elsewhere. Referring to executive power, for example, Winterton pointed out that the functions performed by the executive branch clearly involve much more than the mere routine execution of enacted laws and include the exercise of a vast array of discretionary powers conferred by statute, some clearly legislative in character, some more akin to judicial powers, and generally carrying on the business of government through the exercise of powers conferred by the Constitution, by statute or by the prerogative. Reliance on the procedural and institutional context: Added to this is the concern that even the definition of the “typical” can be an uncertain process, leading to considerable variation in opinion. It is suggested that greater precision in defining the typical may be achieved by placing explicit reliance on the procedural or institutional context in which these typical functions are exercised … By the juxtaposition of the procedural/institutional with the purely functional aspect, a more refined position may be adopted with respect to defining core branch power … 16 … [U]se can and should be made of the relevant procedural and institutional context in which branch functions are commonly, or usually, exercised as part of the attempt to locate what is essential and exclusive to each branch. For 40

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Interpretational Methodology in Separation of Powers Jurisprudence cont. example, while it can be said that judges do “make law” during the process of declaring it or interpreting it, their role in this regard is passive, limited by the fact that they do so in the context of the resolution of particular legal disputes within the procedural parameters of litigation, limited by the legal issues raised by the parties, limited by precedent and guided by other legal authority. Their law-making role is thus incidental to the declaration of rights and obligations pursuant to existing law in the resolution of a particular legal dispute in a courtroom setting. Similarly, while Parliament may delegate some part of its law-making function to the executive in certain circumstances, the making of delegated legislation would be ancillary to the executive’s primary, essential role of executing the laws. It is inconceivable that Parliament could abrogate its legislative functions entirely, or that civil servants (or federal judges) could replace members of Parliament to enact primary legislation pursuant to normal parliamentary procedure; surely a core legislative function which, in its procedural and institutional context, cannot be abrogated or usurped. In relation to the typical judicial function of deciding legal controversies finally and conclusively, the legislature may, for example, overrule a decision by enacting legislation which changes the law. However, it cannot itself review, in the manner of an appeal court, the outcome of a decision as between the parties or order a retrial or revision of a final judgment. This would be an indisputable usurpation of a core judicial function which would constitute a breach of the separation of powers doctrine under both a formalist and a functionalist approach … This juxtaposition of the conceptual with the procedural and institutional received the very considerable support of Vile, who noted that while on the one hand “it is not possible to allocate particular functions exclusively to each branch of government”, on the other: “it is possible to say that there is a function which is more appropriate to a particular procedure, to attempt to restrict each branch to particular procedures, and therefore to make one function the dominant concern of the branch … 17 … Thus, we can accept that the rulemaking function is exercised in some degree by all branches of government, but nevertheless assert that the legislature should be concerned only with rulemaking of a general kind and that the rules it makes should be binding on both the policy branch and the administration and subject to being over-ruled by the judiciary only on the grounds of their having offended against certain basic constitutional principles” … [Redish noted that] “[t]he executive branch, on the other hand … is confined to the function of ‘executing’ the law. Such a function inherently presupposes a pre-existing ‘law’ to be executed. Thus, the executive branch is, in the exercise of its ‘executive’ power, confined to the development of means for enforcing legislation already in existence. Hence, every exercise of executive power not grounded in another of the executive’s enumerated powers must be properly characterized as enforcement of existing legislation … [U]nless some other specifically delegated executive branch power applies, the executive branch must be exercising that creativity, judgment, or discretion in an ‘implementational’ context. In other words, the executive branch must be interpreting and/or enforcing a legislative choice or judgment; its actions cannot amount to the exercise of free-standing legislative power.” By taking into account the institutional and procedural context, it is possible to provide some form of mutually exclusive definition of core functions, which must remain inviolable in the hands of the respective branches. The examples provided by Vile and Redish above do furnish a very significant basis for establishing core functions even for the legislative and executive power within these institutional procedural parameters. So put, the major critique of the functionalist as opposed to the formalist position, the impossibility of mutually exclusive definition, begins to melt away … However, when it comes to the executive power, Winterton’s observations make any attempt at even a core definition very difficult if not impossible: “[E]ven in a purely Anglo-American context there are no functions inherently ‘executive’ in nature. Besides referring to powers expressly or impliedly granted by the constitution, ‘executive power’ in abstract is meaningless; its content depends entirely upon the frame of reference employed to determine the scope of executive power. The futility of attempting to define the ambit of federal executive power by allusion to abstract notions of ‘executive power’ and not by reference merely to expressly conferred powers and the prerogative is ‘demonstrated’ by the poor result of endeavours to do so; the conclusion reached is the apparently tautologous one that ‘executive’ functions are those governmental functions which are neither ‘legislative’ nor ‘judicial’. This ‘definition’ is not only unhelpful, but also unsatisfactory because it ignores ‘secondary’ or ‘incidental’ [1.300]

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Interpretational Methodology in Separation of Powers Jurisprudence cont. functions which may be exercised by more than one branch. Moreover, a generalisation from this formulation of ‘executive’ power can lead to the dangerous notion that the executive may do whatever it is not forbidden to do. This conceit cannot be maintained in Australia, where the scope of ‘the executive power of the Commonwealth’ conferred by s 61 of the Constitution is determined by reference to the prerogative, which cannot mark the boundary between legislative and executive powers because it is inherently subject to legislation.” Winterton has further pointed out, compellingly, that any attempt, even by such an eminence as Sir Owen Dixon, to enforce a strict legal separation of executive and legislative power has foundered on the shores of responsible 18 government, the implications of which cannot be limited purely to the political sphere … In light of Winterton’s detailed analysis of the nature of executive power, it would appear that even an attempt to limit the adoption of a formalist approach to “core” executive functions using the procedural context is doomed … Conclusion: In sum, any attempt to identify core executive functions to provide the entrée for the adoption of a formalist approach, with respect to its separation, is caught between the Scylla of the uncertainty (to put it most mildly) of the existence of an entrenched legal separation of legislative and executive power, and the Charybdis of the inability to define inherently “executive power”. Even assuming legal separation, purposive functionalism appears the only possible approach. It should be borne in mind that the purposive rationale of separation of powers formalists is undermined in the Australian context by the lack of clear indication that the separation of powers doctrine, in so far as the non-judicial powers were concerned, was regarded as essential for the maintenance of the type of government set up by the Commonwealth Constitution … Unless compelling arguments can be made to overcome the difficulties identified by Winterton, the identification of core branch functions to which a formalist approach might be taken must be reserved for the separation of judicial power and legislative power. The position is uncomplicated in relation to judicial power as there are no 19 countervailing doctrines in this regard, except perhaps the appeals to efficiency and good administration. When it comes to judicial power, a purposive formalist approach might be adopted to afford a surer protection to the following principles, all of which are based on the core definition of the power, reinforced by the procedural and institutional context of litigation. The most fundamental principle is that the judicial power of the Commonwealth … may only be vested in Ch III courts. … However, it does not necessarily follow that the Boilermakers’ principle itself … needs to be upheld and maintained pursuant to formalist rigour … A Bill of Attainder, on the other hand, as a clear usurpation of judicial power, would clearly breach the separation of powers doctrine. So would any attempt by the non-judicial branches to intervene directly in legal proceedings (whether current, pending or future) to direct an outcome or to review a final decision in the manner of an appeal court, amending final orders, ordering retrials, or hearing legal disputes at first instance (beyond the narrow exceptions outlined above based on usage). Maintaining these principles with formalist rigour would not undermine parliamentary competence to overrule a Ch III court’s declaration of the law in a particular case by enacting contrary legislation, to reverse the outcome of particular litigation by retrospective general legislation which alters the rights and obligations on which it was based, or to amend the law which is applicable in pending or future litigation by legislative amendment (as opposed to a [mere] direction [to the court]) even if such legislation is directed specifically at those litigants and affects their rights and obligations being considered by the judicial branch. These are very significant principles which must be afforded absolute protection. But beyond these fundamental principles … the separation of judicial power should be applied pursuant to a purposive functional approach. For example, it seems eminently sensible, with respect, to adopt the view of Mason above in relation to judges performing non-judicial functions by dispensing with the artificial persona designata doctrine and determining the issue on the basis of whether the non-judicial functions which the judge is required to perform are compatible with judicial functions. As for legislative power, its definition is relatively straightforward. As de Smith has pointed out, “[t]he term ‘legislative’ does not give rise to a great deal of difficulty in practice, for most of us can recognise legislation when we see it” … But it is clear from the various examples mentioned above that, so defined, this power cannot be hermetically sealed off in-the hands of Parliament given the licence granted to the Executive with respect to delegated legislation, the making by judges of “rules of 42

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Interpretational Methodology in Separation of Powers Jurisprudence cont. court”, the fact that judges sometimes “make law” when deciding cases (even when ostensibly they are declaring it or interpreting it), and the fact that, as de Smith pointed out, “the boundary line between a not very ‘general’ legislative rule and particular administrative decisions affecting many people can become so blurred as to be imperceptible”. However, if reliance is placed on the institutional and procedural factors accompanying the “typical” exercise of legislative power that is, the enactment of primary legislation by Parliament pursuant to proper parliamentary procedure – this power can be regarded as such a core and fundamental exercise of legislative power that its absolute protection in the hands of the legislative branch can be supported by the adoption of a purposive formalist approach. That is not to deny that pursuant to functionalism the interbranch violation of such a power would almost inevitably lead to separation of powers censure. Therefore, leaving aside the vexed question of executive power (where it seems that there is no alternative than to adopt a purposive functionalist approach [even] assuming its legal separation is entrenched), it is possible to reach the following conclusions. • The proper level of operation of the purposive formalist approach is the level of core legislative and judicial powers, the main instances of which were mentioned above. It is at this level that formalism’s concern for piecemeal erosion of the values 20 upheld by the doctrine must be taken seriously and therefore applied with rigour. In this context, it cannot be denied that formalism does constitute a surer safeguard. • It may be stated that at such a fundamental level, it is inconceivable that even pursuant to a purposive functional approach any allowances would be made for interbranch intrusions. This is because the negative effect on the integrity of branch power would certainly reach the requisite level of intensity to trigger functionalism’s rejection of it. To the extent that that is the case, one might posit the disappearance of the formalist/functionalist divide at this level. That is, it seems a reasonable proposition that whichever approach is taken, the result would be the same … To provide this limited role to formalism is consistent with the uncertain position of the separation of powers doctrine in the Australian constitutional context. While this role may be regarded as minor, that is so because it is unlikely that egregious interferences with branch power will occur. On the other hand, if a broader historical view is taken, it could be said that this very unlikelihood is all the more reason to insist upon formalist rigour, to ensure that it remains unlikely. It is worth recalling that just such interventions and usurpations of core branch power are historical realities, not mere hypotheticals. Indeed, such egregious interferences with judicial power did not occur in the distant past only, as evidenced by the Burmah Oil case and in the Plaut case, decided in 1965 and in 1995 respectively. While the former interference could not be invalidated, the latter was able to be held unconstitutional because it occurred in a jurisdiction which entrenched the separation of powers doctrine, and the majority judges adopted a purposive formalist approach to the doctrine in relation to this core aspect of judicial power.

[1.310] Some delegation of law-making powers from the legislature to the executive would

seem inevitable in a modern democracy. How is this delegation compatible with the separation of powers doctrine? How broad a delegation of power can the separation of powers doctrine tolerate? On these points consider Victorian Stevedoring & General Contracting Co Pty Ltd v Dignan (1931) 46 CLR 73 (see [3.440]). The Dignan approach is questioned in R Ratnapala and J Crowe, Australian Constitutional Law: Foundations and Theory (Oxford University Press, Melbourne, 2012), pp 123-132 and in the following extract. The basic question is, does it serve the purposes of a separation of powers doctrine? Does it properly take account of the competence of the various institutions?

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Rethinking the Constitutionality of Delegated Legislation [1.320] D Meyerson, “Rethinking the Constitutionality of Delegated Legislation” (2003) 11 Australian Journal of Administrative Law 45 at 52–54 (footnotes omitted) 52 Montesquieu rightly stressed the dangers to the citizen should power become concentrated in any one branch of government. He saw that dividing power is a way of controlling it. In fact, as Vile points out, the dispersion of power among different centres of decision-making is at the heart of Western constitutionalism and is the antithesis of totalitarianism. As Vile says, “in the totalitarian State every aspect of the State machine is seen merely as an extension of the party apparatus, and subordinate to it … the ‘ideal’ of the totalitarian state is that of a single all-embracing agency of government”. In the particular context of legislative-executive separation, we know that the legislative and executive branches are closely connected in a parliamentary system of government and we also know that for reasons of practical necessity it is impossible to confine the executive to the performance solely of executive tasks. But this does not mean that the ideal of dividing legislative and executive power is altogether illusory. On the contrary, it is clear that if we allow the unlimited transfer of legislative powers to the executive we run the risk of subverting the rule of law ideal, fundamental to the control of government, that those who carry out the law should be restrained by those who make it. If we return to the strategy hypothesised in Plaintiff S157/2002 v Commonwealth in the migration context – that where privative clauses prove ineffective in ousting the jurisdiction of the courts over migration decisions, judicial supervision might nevertheless be successfully evaded by delegating to the Minister the power to make whatever regulations he or she might think suitable for controlling the entry of aliens into the country – this provides an example of how delegation “running riot” can present just such a threat of the oppressive exercise of power. Despite the tentative opinion expressed in the joint judgment in Plaintiff S157, it is hard to see why this could not be characterised as a law with respect to aliens. The problem with it is rather that the hand-over of such subjectively framed and unstructured discretionary power undermines the ideal of the control of government, which it is, in part, the purpose of the separation of powers to secure. If the executive is given the power to determine the fundamental policy of the law, the idea of government by “law” – of power constrained by legal norms announced in advance – has been dispensed with. In its place is the exercise of power undirected by a legal framework and, since there is little for the notion of ultra vires to get a grip on, virtually unreviewable for excess by the courts. The same is a fortiori true where, by use of a “Henry VIII” clause – a clause empowering the executive to amend primary legislation – a statute gives the delegate unfettered power to subvert the delegating Act or another Act by subordinate legislation. This is the “executive despotism” Lord Hewart rightly feared. Some may wish to respond to this argument by saying that there are other ways to achieve the end of limited government than by enforcing a doctrine of legislative-executive separation. They may claim, in particular, that the doctrine of Cabinet responsibility operates in the British system as a functionally similar check on the abuse of power. But while it is true that in earlier times there may have been no need to fear a concentration of power in any one branch of government, this is no longer the case today. Up until the mid-19th century in Britain, the legislature and executive, although closely connected, also co-operated in a way which made it possible to achieve both effective and limited government. The possibility of a “balance”, or a relationship of equality between Cabinet and Parliament, was achievable then because the absence of powerful mass political parties and party discipline in Parliament preserved the independence of the members of Parliament to whom those who exercised executive power were accountable. But the balance of power has shifted and the executive has in more recent times come to control the legislative activities of Parliament. As Brennan J explained in his article, “The Purpose and Scope of Judicial Review”, “[t]he doctrine of the supremacy of Parliament, a central doctrine in our constitutional law, is now a buttress of executive 53 power, for the members of the executive government, on whose political skills the fortunes of the parliamentary majority greatly depend, control the allegiance of that majority”. The threat of the concentration of power is as a result acute today and the separation of powers doctrine all the more important in its potential to reduce it. Once it is appreciated that the purpose of the doctrine is, in part, to serve as a guarantee of individual political liberty and the rule of law, it becomes clear that there is a constitutional basis for a rule against legislation which delegates wide-ranging legislative powers 44

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Rethinking the Constitutionality of Delegated Legislation cont. without providing any standards indicating how they are to be exercised. Such a rule would be in line with the recent cases on judicial power, whose focus, as has been explained, is on the normative basis of the separation of powers doctrine. There is, furthermore, another value served by the separation of powers which bolsters the conclusion that the executive does not, under the Constitution, have the unfettered power to make law. One of the reasons why the framers of the Constitution vested legislative, executive and judicial power in separate organs of government is that certain organs are more suitable for the performance of certain governmental tasks. Consider the adjudication of controversies according to the law. It is obvious why the framers gave this task to federal judges: it is only federal judges whom the Constitution insulates from removal from office and diminution of remuneration. Since their tenure and salary are secure, they can be relied on to “do right to all manner of people according to law without fear or favour, affection or ill-will”. If we now ask why the framers should have vested legislative power in a Parliament “chosen by the people”, it must be because they thought the people’s elected representatives particularly well-suited to the exercise of the “open-ended discretion to choose ends” which is the essence of the legislative task. This is, of course, a well-established view, connected with our democratic conception of the legitimacy of law. In a representative democracy we give the right to make law primarily to those who have a mandate from the people and we do so because we think that decisions about contentious issues of social, political and economic importance – migration decisions are once again a good example – should be taken by those who are most directly account – able to the people. In addition to these facts about accountability, there is also a further consideration which explains why the Constitution vests the legislative power of the Commonwealth in Parliament. Parliament is an assembly characterised by the fact that its proceedings take place in public and also, as Jeremy Waldron points out, by its large membership by comparison with the other branches of government. In vesting legislative power in such an assembly the framers clearly sought to ensure that important social and political decisions would be made after vigorous and open debate in public between those speaking for the full spectrum of rival interests and different views. Recognising, to use Waldron’s words, that “the community for which law is made is essentially plural, and in its essence incapable of representation by a single voice”, the framers saw that it is essential to law’s authority that it should emerge from an assembly of hundreds of members, deliberating the pros and cons of alternative policies in accordance with parliamentary procedures. 54 Without formal parliamentary endorsement the legislative measures proposed by the executive would therefore not enjoy the legitimacy and authority of law, and the principle that the legislature is primarily responsible for making law in a democratic society is therefore of fundamental constitutional importance. It does not, of course, imply that Parliament has to make law in all the detail which is required. But it does imply that Parliament’s core function of formulating social and political policy cannot, without putting at risk fundamental democratic values and the legitimacy of law, be delegated carte blanche to another body.

Rule of law [1.330] The notion “rule of law” can be defined in many ways. A V Dicey, Introduction to the

Study of the Law of the Constitution (8th ed, MacMillan & Co, London, 1915), pp 183-191, identified three meanings (footnotes omitted): [I]n the first place, that no man is punishable or can be lawfully made to suffer in body or goods except for a distinct breach of law established in the ordinary legal manner before the ordinary Courts [184] of the land. In this sense the rule of law is contrasted with every system of government based on the exercise by persons in authority of wide, arbitrary, or discretionary powers of constraint. … [1.330]

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We mean in the second place, when we speak of the “rule of law” … not only that with us no man is above the law, but (what is a different thing) that here every man, whatever be his rank or condition, is subject to the ordinary law of the realm and amenable to the jurisdiction of the ordinary tribunals. In England the idea of legal equality, or of the universal subjection of all classes to one law administered by the ordinary Courts, has been pushed to its utmost limit. With us every official, from the Prime Minister down to a constable or a collector of taxes, is under the same responsibility for every act done without legal justification as any other citizen. … There remains yet a third and a different sense in which the “rule of law” or the predominance of the legal spirit may be described as a special attribute of English institutions. We may say that the constitution is pervaded by the rule of law on the ground that the general principles of the constitution (as for example the right to personal liberty, or the right of public meeting) are with us the result of judicial decisions determining the rights of private persons in particular cases brought before the Courts; whereas under many foreign constitutions the security (such as it is) given to the rights of individuals results, or appears to result, from the general principles of the constitution.

For contemporary discussions of the meaning of the “rule of law” see G Walker, The Rule of Law: Foundation of Constitutional Democracy (Melbourne University Press, Melbourne, 1988); P Craig, “Formal and Substantive Conceptions of the Rule of Law: An Analytical Framework” (1997) Public Law 467; A Marmor “The Rule of Law and Its Limits” (2004) 23 Law and Philosophy 1; M Krygier, “The Rule of Law: Legality, Teleology, Sociology”, in G Palombella and N Walker (eds), Re-locating the Rule of Law (Hart Publishing, Oregon, 2008). Lon Fuller in The Morality of Law (Yale University Press, New Haven, 1969) offers a much used discussion of the rule of law. His account starts with the insight that if law is to fulfil its role of subjecting human conduct to rules, it must have certain features, of which he lists eight: (1) there must be general rules, (2) these should be made public, (3) they should not be retrospective, (4) they should be clear, (5) they should not be contradictory, (6) they should not require the impossible, (7) they should have a degree of permanence, (8) there should be a congruence between the action of officials and the declared rules. To what extent is each of these eight principles achievable in a modern legal system? Professor Joseph Raz discusses the rule of law in the following extract.

Ethics and the Public Domain [1.340] J Raz, Ethics and the Public Domain: Essays in the Morality of Law and Politics (Clarendon Press, Oxford, 1994), pp 373-374 [The] major features [of the rule of law] are its insistence on an open public administration of justice, with reasoned decisions by an independent judiciary, based on publicly promulgated, prospective, principled legislation. On this understanding, the principle of the rule of law is directed primarily at the judiciary and other subordinate legal institutions such as the police, prosecution service, and administrative authorities. It directs them to apply statutory and common law faithfully, openly, and in a principled way. The principle of the rule of law also applies to the legislature, and directs it (and the courts to the extent that they develop and change the law) to make laws which could be faithfully applied, ie to make them reasonably clear in formulation, and coherent and transparent in purpose. It also directs them to establish and maintain a system of courts, and other legal institutions, which are capable of observing the requirements of the rule of law. [On the vexed question of the relationship between the rule of law and the sovereignty of Parliament, Raz adds (374-375):] You may think that, on my understanding, the rule of law has a simple relationship to democratic government. It makes the legislature supreme. But this is far too simple a view. Mine is not the theory that courts should have no share in making and developing the law. I am an advocate, not an opponent, of both judicial discretion and judicial power to set precedents, which between them give 46

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Ethics and the Public Domain cont. the courts considerable law-making power. There are two ways in which this view of the rule of law reinforces democracy. On the one hand it requires legal institutions to be loyal to legislation emerging from a democratic legislature, thus enhancing its power. But the rule of law also sets limits to majoritarian democracy, represented in the legislature. It requires principled, as well as faithful, adjudication. This point requires a little amplification. Principled decisions are reasoned and public. As such they become known, feed expectations, and breed a common understanding of the legal culture of the country, to which in turn they are responsive and responsible. The courts are not formally accountable to anyone, but they are the most public of government institutions. They are constantly in the public gaze, and subject to public criticism. Thus their decisions both mould the public culture by which they are judged and are responsive to it. The requirement of public, principled justification is not a demand for great philosophical sophistication. On the whole, judges who become philosophically ambitious are bad judges. The requirement is for justification in terms of the common legal culture of the country concerned. It is a requirement for justification by reference to the common values and shared practices of the legal culture. [On the relationship of the rule of law to individual rights Raz states (376):] There is one apparent omission from this account of the rule of law which may surprise some readers. I have said nothing about the importance of the protection of basic civil rights to the rule of law. This is not because the rule of law can flourish while basic civil rights are violated. It is because their protection is partly presupposed and partly implied by the points made above. Since my discussion of the moral and political significance of the rule of law is confined to its function in democratic societies, those political and civil rights without which no democracy can prosper are here presupposed. Since the rule of law assures individuals of bureaucratic justice, it implies conformity with many civil rights which guarantee the fair process of the law. Finally, and most importantly, in insisting on the integration of legalisation and other current measures with legal tradition enshrined in doctrine, the rule of law respects those civil rights which are part of the backbone of the legal culture, part of its fundamental traditions.

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Notes&Questions

1.

Does Raz adequately explain the relationship between the rule of law and the sovereignty of Parliament? On the implications for judicial interpretation of the Constitution, see Chapter 14. 2. Raz speaks of basic civil rights as something presupposed in a democratic society. Presumably this is a point about how things usually are. At times a deeper claim is made for the rights/rule of law relationship. For example, Jurgen Habermas argues for their mutual dependency. See his “Constitutional Democracy” (2001) 29 Political Theory 766. Chief Justice Gleeson briefly discussed the rule of law as an interpretive principle in the following case.

Plaintiff S157/2002 v Commonwealth [1.360] Plaintiff S157/2002 v Commonwealth (2003) 211 CLR 476 at 492–493 (some footnotes omitted) Gleeson CJ: 492 … [28] In such a context, the following established principles are relevant to the resolution of the question of statutory construction. [29] First, where legislation has been enacted pursuant to, or in contemplation of, the assumption of international obligations under a treaty or international convention, in cases of ambiguity a court should favour a construction which accords [1.360]

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Part I: Introduction

Plaintiff S157/2002 v Commonwealth cont. with Australia’s obligations … [30] Secondly, courts do not impute to the legislature an intention to abrogate or curtail fundamental rights or freedoms unless such an intention is clearly manifested by unmistakable and unambiguous language. General words will rarely be sufficient for that purpose. What courts will look for is a clear indication that the legislature has directed its attention to the rights or freedoms in question, and has consciously decided upon abrogation or curtailment … As Lord Hoffmann recently pointed out in the United Kingdom … for Parliament squarely to confront such an issue may involve a political cost, but in the absence of express language or necessary implication, even the most general words are taken to be “subject to the basic rights of the individual” … [31] Thirdly, the Australian Constitution is framed upon the assumption of the rule of law (Australian Communist Party v Commonwealth (1951) 83 CLR 1 at 193, per Dixon J). Brennan J said (Church of Scientology Inc v Woodward (1982) 154 CLR 25 at 70): “Judicial review is neither more nor less than the enforcement of the rule of law over executive action; it is the means by which executive action is prevented from exceeding the powers and functions assigned to the executive by law and the interests of the individual are protected accordingly.” [32] Fourthly, and as a specific application of the second and third 493 principles, privative clauses are construed “by reference to a presumption that the legislature does not intend to deprive the citizen of access to the courts, other than to the extent expressly stated or necessarily to be implied” (Public Service Association (SA) v Federated Clerks’ Union (1991) 173 CLR 132 at 160, per Dawson and Gaudron JJ).

Judicial review and constitutional rights [1.370] In Australia, as in many other countries, judicial bodies have the power to decide

whether executive action or legislation conforms to the law, including the law of the Constitution. This function is widely understood to be necessary in order to maintain the rule of law, at least in relation to executive action. Alexander Hamilton famously observed of this power (Federalist No 78, p 465): Whoever attentively considers the different departments of power must perceive that in a government in which they are separated from each other, the judiciary, from the nature of its functions, will always be the least dangerous to the political rights of the Constitution; because it will be least in a capacity to annoy or injure them. The executive not only dispenses the honors but holds the sword of the community. The legislature not only commands the purse but prescribes the rules by which the duties and rights of every citizen are to be regulated. The judiciary, on the contrary, has no influence over either the sword or the purse; no direction either of the strength or of the wealth of the society, and can take no active resolution whatever. It may truly be said to have neither FORCE nor WILL but merely judgment; and must ultimately depend upon the aid of the executive arm even for the efficacy of its judgments.

[1.380]

1.

Notes&Questions

What do you make of the “least dangerous branch” argument? For a now classic discussion, see A Bickel, The Least Dangerous Branch: The Supreme Court at the Bar of Politics (2nd ed, Yale University Press, New Haven, 1986). In jurisdictions in which a constitution sets out a number of basic rights, the power of judicial review is likely to be more controversial. The merits or demerits of the judicial vindication of constitutional rights is a frequently debated topic. Here it is sufficient to note two central ideas or examples: (1) the argument of Marbury v Madison, the first and influential justification for judicial review; and (2) the Communist Party Case, an important Australian example.

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Marbury v Madison [1.390] Marbury v Madison 5 US (1 Cranch) 137 (1803); 2 Lawyers’ Edition 60; at 176–180 (US) [The outgoing President Adams signed the commission which appointed Marbury a justice of the peace. The commission remained undelivered and the new President (Jefferson) refused to deliver it to Marbury. Marbury applied to the Supreme Court for a writ of mandamus to compel the new Secretary of State (Madison) to deliver the commission. In deciding that the Constitution did not authorise the granting of this remedy Marshall CJ (for the court) stated the following.] Marshall CJ: 176 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 recognize 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 pro- 177 hibited 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. 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. 178 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 [1.390]

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Marbury v Madison cont. 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 given 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. 179 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. In some cases, then, the constitution must be looked into by the judges. And if they can open it at all, what part of it are they forbidden to read or to obey? There are many other parts of the constitution which serve to illustrate this subject. It is declared that “no tax or duty shall be laid on articles exported from any state.” Suppose a duty on the export of cotton, of tobacco, or of flour; and a suit instituted to recover it. Ought judgment to be rendered in such a case? Ought the judges to close their eyes on the constitution, and only see the law? The constitution declares “that no bill of attainder or ex post facto law shall be passed”. If, however, such a bill should be passed, and a person should be prosecuted under it; must the court condemn to death those victims whom the constitution endeavours to preserve? “No person,” says the constitution, “shall be convicted of treason unless on the testimony of two witnesses to the same overt act, or on confession in open court.” Here the language of the constitution is addressed especially to the courts. It prescribes, directly for them, a rule of evidence not to be departed from. If the legislature should change that rule, and declare one witness, or a confession out of court, sufficient for conviction, must the constitutional principle yield to the legislative act? From these, and many other selections which might be made, it is apparent, that the framers of the consti- 180 tution contemplated that instrument as a rule for the government of courts, as well as of the legislature. Why otherwise does it direct the judges to take an oath to support it? This oath certainly applies in an especial manner, to their conduct in their official character. How immoral to impose it on them, if they were to be used as the instruments, and the knowing instruments, for violating what they swear to support! The oath of office, too, imposed by the legislature, is completely demonstrative of the legislative opinion on this subject. It is in these words: “I do solemnly swear that I will administer justice without respect to persons, and do equal right to the poor and to the rich; and that I will faithfully and impartially discharge all the duties incumbent on me as, according to the best of my abilities and understanding agreeably to the constitution and laws of the United States.” Why does a judge swear to discharge his duties agreeably to the constitution of the United States, if that constitution forms no rule for his government? If it is closed upon him, and cannot be inspected by him? If such be the real state of things, this is worse than solemn mockery. To prescribe, or to take this oath, becomes equally a crime. It is also not entirely unworthy of observation, that in declaring what shall be the supreme law of the land, the constitution itself is first mentioned; and not the laws of the United States generally, but those only which shall be made in pursuance of the constitution, have that rank. Thus, the particular phraseology of the constitution of the United States confirms and strengthens the principle, supposed to be essential to all written constitutions, that a law repugnant to the constitution is void; and that courts, as well as other departments, are bound by that instrument. The rule must be discharged.

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Notes&Questions

State in outline the argument made by Marshall CJ for judicial review. Are you convinced that it simply follows from the ordinary functions of a court that it should enforce its reading of the constitution as “superior law” against the co-equal legislative and executive branches? Is Marshall CJ’s statement any improvement on Alexander Hamilton’s Federalist No 78? When courts are considering the legitimacy and practice of judicial review, is it useful to distinguish questions about federalism from questions of constitutional rights – and both of these from possible legislative and executive incursions into matters which affect the courts and their jurisdiction? See J Choper, Judicial Review and the National Political Process (Chicago University Press, Chicago, 1980); Ely, Democracy and Distrust (1980). In arguments for and against the practice of judicial review, there is a difference between arguments based on the anti-democratic character of the review court and those based on a lack of judicial competence to evaluate economic and social matters. How do the ideas and values relevant to this question figure in arguments about methods of constitutional interpretation? For further discussion, see Chapter 14.

Australian Communist Party v Commonwealth [1.410] Australian Communist Party v Commonwealth (1951) 83 CLR 1 at 178–202, 253–268 [The recitals of the Communist Party Dissolution Act 1950 (Cth) stated (in part): 4. “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:” 5. “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:” 6. “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:” 7. “And whereas certain industries are vital to the security and defence of Australia (including the coal-mining industry, the iron and steel industry, the engineering industry, the building industry, the transport industry and the power industry):” 8. “And whereas activities or operations of, or encouraged by, the Australian Communist Party, and activities or operations of, or encouraged by, members or officers of that party and other persons who are communists, are designed to cause, by means of strikes or stoppages of work, and have, by those means, caused, dislocation, disruption or retardation of production or work in those vital industries:” … Section 4 of the Act declared the Australian Communist Party unlawful and dissolved it. Affiliated organisations, which in the opinion of the Governor-General were prejudicial to the security of the Commonwealth, were also declared unlawful and dissolved (s 5). The Governor-General had a similar discretion under ss 9 and 10 to disqualify individuals from holding public office or office in a trade union. All the judges, apart from Latham CJ, found that the Act was not supported by the defence power or any other power (that is, s 51(xxxix) as matters incidental to the executive power).] Dixon J: 178 It will be seen from the foregoing account of s 5 that it provides tests of communistic connection or affiliation which must be satisfied in fact before the body becomes liable to be declared unlawful and it prescribes the manner in which the body may apply to the courts if it denies that it [1.410]

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Australian Communist Party v Commonwealth cont. possesses a character fulfilling the tests … Two things appear to me to be clear about this. The first is that it leaves to the opinion of the Governor-General in Council every element involved in the application of the proposition. Thus it would be for the Governor-General in Council to judge of the reach and application of the ideas expressed by the phrases “security and defence of the Commonwealth”, “execution of the Constitution”, “maintenance of the Constitution”, “execution of the laws of the Commonwealth”, “maintenance of the laws of the Commonwealth” and “prejudicial to”. In the second place the expression by the Governor-General in Council of the result in a properly framed declaration is conclusive. In the case of the Governor-General in Council it is not possible to go behind such 179 an executive act done in due form of law and impugn its validity upon the ground that the decision upon which it is founded has been reached improperly, whether because extraneous considerations were taken into account or because there was some misconception of the meaning or application, as a court would view it, of the statutory description of the matters of which the Governor-General in Council should be satisfied or because of some other supposed miscarriage. The prerogative writs do not lie to the Governor-General. The good faith of any of his acts as representative of the Crown cannot be questioned in a court of law. … 182 What may be of more importance is that, as with s 5(2), the authority which subs (2) of s 9 is designed to confer on the Governor-General in Council would enable him to express a conclusive decision covering every element involved in the application to a given case of any or every limb of the alternatives contained in the formula concerning the actual or potential prejudicial activities of the person declared. The consequences which ensue from the making of a declaration under s 9 in reference to a person are given by ss 10, 11, 12, 13 and 14. Briefly the person declared becomes incapable of holding an office or employment under the Commonwealth or an authority of the Commonwealth, whether incorporated or not, and, if the Governor-General declare an industrial organization to be one to which s 10 applies, then he cannot hold any office in that organization or in any branch of it. The section may be so applied to an organization if a substantial number of its members are employed in a vital industry. The vital industries are coal mining, iron and steel, engineering, building, transport, power and any other industry which, in the opinion of the Governor-General in Council is vital to the security and defence of Australia. As the declaration of the prejudicial nature of a man’s actual or probable activities may be made before or after the declaration of a vital industry and as at the time when the second is made he may be in process of appealing 183 from the first declaration on the ground that s 9(1) does not apply to him, and, further, as he may be an officer of the industrial organization when the later of the two declarations is made, special provisions are made for these various contingencies. The effect is to suspend him pending the final outcome and then, if the declaration against him stands, to vacate his office. For the purpose of his rights to any superannuation or retirement benefit, it is enacted that he shall be deemed to have resigned (s 11(5)). An injunction may be granted against him restraining him from performing any act, duty or function or exercising any right as the holder of an office in such an industrial organization. While a declaration against him is in force, the man may not contract or agree with the Commonwealth in respect of any services on his part for reward (s 14). It is to be noticed that s 9 is not limited to persons who occupy or are likely to be appointed to or engaged for any of the offices or employments mentioned in s 10(1) or who contract for services with the Commonwealth or are likely to do so. It enables the Executive to make a declaration against anybody falling within the description of subs (1) of s 9, although there may be no prospect in his case of a situation to which the consequences are relevant ever arising. The Act is to remain in operation until the Governor-General makes a proclamation that its continuance is no longer necessary. He must be satisfied that it has ceased to be necessary for the security and defence of Australia and for the execution and maintenance of the Constitution and of the laws of the Commonwealth (s 27). The duration of the Act is therefore indefinite and the power of the Governor-General under s 5(2) and his power under s 9(2) will remain exercisable for possibly a long time after the occurrence of the facts which in the former case bring the body of persons within the application of s 5 and in the latter case the individual within the application of s 9. From the foregoing discussion of the Act and its meaning it will be seen that in the cardinal provisions 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 52

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Australian Communist Party v Commonwealth cont. 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. In the one case there is the judgment of the legislature itself that the body is to be dissolved as unlawful and 184 in the other cases there is the judgment of the Executive that the affiliated bodies are to be similarly dissolved as unlawful or that a declaration shall be made against the persons who are to be thereby disqualified for certain classes of post. 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 Commonwealth Parliament has power to legislate with respect to the public service and under s 51(xxxv) it may impose conditions upon the registration of industrial organizations under the Commonwealth Conciliation and Arbitration Act 1904. But I shall put aside for subsequent examination the possibility of a justification being found in these powers for s 10(1) and in relation to it of s 9. Subject to this reservation the validity of the chief provisions of the statute can find no support unless in the power to make laws with respect to the defence of the Commonwealth or in s 51(xxxix) or in an implied power to legislate for the protection of the Commonwealth against subversive action and preparation. For otherwise the subject with which the law deals, the dissolution as unlawful of voluntary and corporate associations of people, whether because of their purposes and tendencies or for other reasons, and the disqualification of persons for descriptions of employment, does not in itself form part of any of the enumerated powers of the Parliament. Further, it cannot in itself, that is to say, because of its nature, lie within the defence power. It can fall within it, if at all, only as a means to accomplish or further some end which because of its nature is within the proper scope of defence. In the same way it can fall within the power to legislate against subversive actions and designs only as a means to the end for which that power exists. That is to say, constitutional support for the law must be sought not within what may be called the substance of any power but in the authority of the Parliament to enact what is ancillary or calculated to being about an end within its legislative competence. … 192 If the Act can be supported by a train of reasoning of such a kind it must be under the defence power or not at all. The other power is concerned primarily with the protection of Federal authority against action or utterance by which it may be overthrown, thwarted or undermined. It covers, needless to say, conduct antagonistic to the maintenance of Federal institutions and authority, whether its source is abroad or at home, but its central purpose is to allow the legislature to deal with manifestations of subversive conduct within Australia. 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. It must be borne in mind that it is an incidental or ancillary power, not a power defined according to subject matter. I have said before that in most of the paragraphs 193 of s 51 of the Constitution the subject of the power is described either by reference to a class of legal, commercial, economic or social transaction or activity (as trade and commerce, banking, marriage), or by specifying some class of public service (as postal installations, lighthouses), or undertaking or operation (as railway construction with the consent of a State), or by naming a recognized category of legislation (as taxation, bankruptcy): Stenhouse v Coleman ((1944) 69 CLR, at 471). In a law operating upon or affecting such a given subject matter or fulfilling such a given description, as the case may be, the legislature is at large in the course it takes, that is provided it observes the restrictions arising from specific constitutional provisions such as s 55, Chapter III, ss 92, 99 and 116. But, in considering whether a law is incidental to an end or operation, no such test is supplied. It would, for example, be quite erroneous to say first that communism is within the incidental power and next that therefore any law affecting communism is valid. 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 [1.410]

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Australian Communist Party v Commonwealth cont. 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 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. Nor do I think that if a wider basis for the power than s 51(xxxix) is accepted, the power itself would extend to a law like the present Act, using as it does, the legislature’s characterization of the persons and bodies adversely affected and no factual tests of liability and containing no provision which independently of that characterization would amount intrinsically to an exercise of the power. To deal specifically with named or 194 identifiable bodies or persons independently of any objective standard of responsibility or liability might perhaps be possible under the power in the case of an actual or threatened outburst of violence or the like, but that is a question depending upon different considerations. The foregoing discussion narrows the inquiry as to possible support for the validity of the legislation to what may briefly be described as the use of the defence power against communism as such, that is treating communistic character and connections as at once the sufficient and the sole substantial ground for invoking the defence power for the purpose of a declaration by statute that the Party was unlawful and dissolved and, subject to the Executive discretion, for a similar declaration concerning affiliated bodies and a declaration of disqualification for individuals. 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. It is needless after our recent experiences of war to enlarge upon the extent to which it is necessary in modern war to transfer both power and responsibility to the Executive. The conduct of such a war carries with it the direction and control of men and their affairs in every aspect capable of affecting in any degree the prosecution of the war. 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. The delegation of legislative power has involved no difficulty because, as I have already said, not only is there a definite war but any exercise of the delegated power is examinable against s 51(vi). But, under the delegated power, and sometimes by direct enactment, the very widest discretions are vested in ministers, administrative boards and officers and in officers of the armed services. Common experience, therefore, shows that, in time of war at all events, a provision made by or under statute is not regarded as necessarily outside power because a minister or an agency of the executive is authorized according to his or its opinion of the relation of some act, matter or thing to defence or some aspect of defence to give directions or determina- 195 tions in derogation of the freedom of action and the personal rights of men and of associations of men. For example, I think that at this date it is futile to deny that 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 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: see Lloyd v Wallach (1915) 20 CLR 299; Ex parte Walsh [1942] ALR 359; and Little v Commonwealth (1947) 75 CLR 94, at 102–104. The reason is because administrative control of the liberty of the individual in aspects considered material to the prosecution of a war is regarded as a necessary or proper incident of conducting the war. One man may be compelled to fight, another to perform directed work, a third may be suspected of treasonable propensities and restrained. But what 54

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Australian Communist Party v Commonwealth cont. 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. 196 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. Is it possible, however, to sustain the Act on the ground that under the influence of events the practical reach and operation of the defence power had grown to such a degree as to cover legislation providing no objective standard of liability relevant to the subject of the power but proceeding directly first by the pronouncement of a judgment by means of recitals and then in pursuance of the recitals acting directly against a body named, and bodies and persons described, in derogation of civil and proprietary rights? … 198 The question remains, however, whether nevertheless, by reason of the application of s 4 and s 5(2) and s 9(2) to the Communist Party, affiliated bodies and communists as such, a sufficient connection with the defence power can be established on the footing that recent events had at the date of the Act called the defence power into such wide play as to supply a constitutional justification for the form of the Act. Although this question was not developed in the argument before us, it must be decided. In deciding it there are three considerations to be urged in support of an affirmative answer. They complement one another. In the first place it may be said that the proper view of the defence power is that in a situation such as events had created when the Act became law the power places within the authority of the legislature the decision of all the questions concerned with the defence of the country which may determine legislative action, questions affecting the extent of the operation of the constitutional power. It may be said, further, that public events of common knowledge, without more, made it a matter for the decision of the Parliament what was the real nature of the activities and designs of the Australian Communist Party, of kindred bodies and of communists, what part they played in the dangers considered to threaten the country and what and how great those dangers were. In such a view the decision of the Parliament is to be seen in the recitals and in the provisions of the Act. The decision it would be said leaves no room for any question of power. In the second place it is a commonplace that while the extent of the operation and the application of a power, including the defence power, must be decided by the Court, the reasons why it is exercised, the opinions, the view of facts and the policy upon which its exercise proceeds and the possibility of achieving the same ends by other measures are no concern of the Court. In the third place, in all matters relating to defence, not only does the responsibility lie with the Executive Government and thus ultimately with Parliament, but the information at the command of the Government, which often cannot be made public, places it in a special position to judge of what the public interest requires. 199 In all the cases concerning the validity of statutory regulations made for the war of 1914–1918 and for the war of 1939–1945 the principle was acknowledged or assumed that it was for the Executive Government to decide what was necessary or expedient for the purpose of the war and in doing so to act upon its opinion of the circumstances and conditions that existed and of the policy or course of action that should be followed. Variously formulated as the tests have been for deciding whether regulations made under the war powers were within the power to make laws with respect to defence, they have uniformly been based upon the principle that there is to be no inquiry into the actual effect the regulation would have or be calculated to have in conducing to an end likely to advance the prosecution of the war and that it was at least enough if it tended or might reasonably be thought conducive or relevant to such an end. But, in Farey v Burvett (1916) 21 CLR 433, at 442 Griffith CJ said: “In making the inquiry the Court cannot shut its eyes to the fact that what could not rationally be regarded as a measure of defence in time of peace may be obviously a measure of defence in time of war.” Barton J said: “It is argued that the defence power has the same meaning at all times, whether in peace or in war. I doubt that, but it may not be necessary to determine it, for the true question is whether many things that cannot aid defence in peace and when no enemy is in view, are not urgently necessary when an enemy has arisen who must be defeated if the nation, or family of [1.410]

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Australian Communist Party v Commonwealth cont. nations, is to live” (at 448). His Honour’s view treated the power as possessing a fixed meaning with a changing application, as a fixed concept with a changing content. It would, I think, 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. I have now completed my statement of the train of reasoning in support of the Act based upon ss 4, 5(2) and 9(2) as laws with respect to communism. I believe that, from the form in which I have stated the reasoning, its full force will appear. But, after giving much consideration to the question whether it will suffice to sustain the Act I have reached the conclusion that it will not. The reasons for that conclusion may be briefly given. When s 4 names a voluntary association, declares it unlawful and by force 200 of the Act dissolves it, and when ss 8 and 15(1) attach the consequence of deprivation of property and s 7 attaches the consequence of a restriction of the civil rights of the members, it provides for matters which, considered as specific subjects, are not of their own nature within any of the enumerated powers of the Commonwealth Parliament and prima facie lie only within the province of the States. If the operation of the law upon the right of association, the common property and the civil rights of the members were made by the statute to depend upon the actual existence or occurrence of any act, matter or thing having a specific relation to the purposes of the power with respect to defence, then, notwithstanding that the immediate subject of the provision did not of its own nature form part of the subject matter of the power, the provision would be brought within it as ancillary to the main purpose of the power. Again, prima facie no opinion of the Parliament as to the actual existence or occurrence of some matter or event which would provide a specific relation of the subject of a law with power can suffice to give the law that relation. It would, for example, be impossible for the Parliament by reciting that a society for research in radio physics planned or carried on experiments causing or likely to cause an interference with wireless transmission to bring within s 51(v) (postal, telegraphic, &c services) an enactment naming the society and dissolving it brevi manu. It would be impossible to bring under s 51(xviii) (patents) a direct grant of a monopoly for a specified manufacturing process by reciting that it was an invention. The pronouncements by Parliament which the recitals in the Act contain, combined with the declaration of unlawfulness and decree of dissolution made by s 5 and the forfeiture imposed by s 15(1), were said by the plaintiffs to amount together to an invasion or usurpation of judicial power. In the case of s 15(1) it was also said that, except by a lawful exercise of judicial power, such a forfeiture could not be imposed by reason of s 51(xxxi) of the Constitution. As I am deciding the case on the ground of want of affirmative legislative power, I shall not deal with these arguments, but I mention them because they illustrate the substantial effect and nature of the provisions in question. There should be no confusion about the essential nature of the connection with the defence power which the recitals seek to supply. Essentially it consists in the past acts, the tenets and opinions and the present propensities or tendencies of persons and associations of persons. Where legislation, subordinate or principal, purporting to exercise the defence power has stated the purpose for which it was enacted 201 or adopted, this expression of purpose has received effect. In relation to a power largely directed to purpose its importance is evident. It is true that the expression of the nature and existence of the purpose has left open the question whether nevertheless the legislation failed as an exercise of the defence power, because of the nature of the provisions, the prevailing situation, the facts, the remoteness of the means adopted from the avowed object, or some other consideration. But here, so far as the preambles express the existence and the nature of the purpose animating the legislation, that may be conceded. It is, however, but a small step. 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. It is enough to mention Sloan v Pollard (1947) 75 CLR 445 and Jenkins v The Commonwealth (1947) 74 CLR 400, at 402, the facts of which provide sufficient illustrations. In such a case the result which the rule laid down produces or is calculated to produce is within the defence power and all that is lacking is an 56

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Australian Communist Party v Commonwealth cont. understanding of the process of causation between the conduct prescribed or prohibited and the result. That can be proved. There is no need to stop to inquire precisely how much effect a recital by the legislature of facts of such a nature should receive; for it is not this case. But, to my mind, recitals of such a character, stating how a law will operate, or for that matter recitals stating the purpose for which an enactment is made, stand on an altogether different footing from what is the essential matter here. The essential matter here is a statement to the effect that persons or bodies of persons have been guilty of acts which might have been penalized in advance under the defence power and have a propensity to commit like acts, this being recited as affording a supposed connection between the defence power and the operative provisions enacted, provisions dealing with the persons or bodies directly by name or description. At the risk of repetition it is perhaps desirable to add that the case is not one where the legislation is dealing with a subject matter undeniably within power. If the legislature directly dissolved a marriage between named parties, it would at all events be dealing with divorce, whatever other objections might be found 202 to the Act. If it directly enacted that a named alien should be deemed naturalized or that a person or persons named or described should be denied the use of the postal, telegraphic and telephonic services, it would likewise be upon the very subject of power. Whatever recitals it thought fit to make would have such effect as it was taken to intend, and whatever conditions it imposed would be valid, subject always, of course, to the relevance of positive restrictions that might be found elsewhere in the Constitution. It must be evident that 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. “The paramount consideration is that the Commonwealth is undergoing the dangers of a world war, and that when a nation is in peril, applying the maxim salus populi suprema lex, the courts may concede to the Parliament and to the Executive which it controls a wide latitude to determine what legislation is required to protect the safety of the realm” – per Williams J, Victorian Chamber of Manufactures v Commonwealth (1943) 67 CLR 413.

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Notes&Questions

How did the court deal with the possible argument that the Communist Party Dissolution Act 1950 (Cth) infringed basic political rights? Could the States have validly enacted the same legislation? Could they do so now? Justice Fullagar in his reasoning, extracted below at [6.210], stated that “in our system the principle of Marbury v Madison is accepted as axiomatic”. For discussion of the grounding of the practice of judicial review in the Australian constitution, see J Thomson, “Constitutional Authority for Judicial Review: A Contribution from the Framers of the Australian Constitution”, in G Craven (ed), Convention Debates (1891–1898): Commentaries, Indices and Guide (Legal Books, Sydney, 1986), p 173 and B Galligan, “Judicial Review in the Australian Federal System: Its Origin and Function” (1979) 10 Federal Law Review 367. For discussion of the constitutional principle that the Commonwealth cannot recite itself into power – “The stream cannot rise above its source” – see Stellios, Zines’s The High Court and the Constitution (6th ed, Federation Press, Sydney, 2015), ch 11. For an analysis of the case placing it in its political and social context, see G Winterton, “The Significance of the Communist Party Case” (1992) 18 Melbourne University Law [1.420]

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Review 630 and R Douglas “A Smallish Blow for Liberty? The Significance of the Communist Party Case” (2001) 27 Monash University Law Review 253.

SOVEREIGNTY [1.430] What is “sovereignty” and what institution or institutions exercise it? A V Dicey

articulated one of the most influential, and debated, accounts of the sovereignty of the British Parliament.

Sovereignty of Parliament [1.440] A V Dicey, “Sovereignty in Parliament”, in Introduction to the Study of the Law of the Constitution (8th ed, MacMillan & Co, London, 1915), pp xviii-xix (footnotes omitted) xviii … The sovereignty of Parliament is, from a legal point of view, the dominant characteristic of our political institutions. And my readers will remember that Parliament consists of the King, the House of Lords, and the House of Commons acting together. The principle, therefore, 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,” and further that this xix right or power of Parliament extends to every part of the King’s dominions … How does the idea of parliamentary sovereignty relate to and operate within Australia? Sir Owen Dixon discussed these questions in the light of the Colonial Laws Validity Act 1865 and the Statute of Westminster 1931, both British statutes which, to different degrees, confirmed the powers of the Parliaments of the British colonies and dominions, such as Canada, Australia and New Zealand, and acknowledged to a certain extent their constitutional and political independence. The Statute of Westminster 1931 was extended to Australia by the Statute of Westminster Adoption Act 1942 (Cth), effective from 3 September 1939. Australia’s constitutional independence from the United Kingdom was subsequently further secured by the Australia Acts 1986 (UK) and (Cth), but Dixon’s analysis of the two earlier statutes remains an important and influential discussion of the fundamental issues.

The Statute of Westminster 1931 [1.450] O Dixon, “The Statute of Westminster 1931”, in Jesting Pilate: and Other Papers and Addresses (collected by Judge Woinarski) (Law Book Company, Sydney, 1965; 2nd ed, William S Hein & Co, Buffalo, New York 1997), pp 82-87 82 … An inquiry into the source whence the law derives its authority in a community, if prosecuted too far, becomes merely metaphysical. But if the theoretical answer be adopted by a system of law as part of its principles, it will not remain a mere speculative explanation of juristic facts. It will possess the capacity of producing rules of law. Its incorporation into the body of the law may lead to consequences of much practical importance. The doctrine that the supreme law of the United States derives its authority from the people is an example. It has supplied a principle of American constitutional law. The several organs of government established by law appear to those who examine them in the light of this principle as agencies to whom the people have entrusted powers residing in the people. Accordingly the agent’s authority cannot be delegated. We have seen during the last two years more than one example of the application by the Supreme Court of the United States of this constitutional dogma. Its application has contributed in no small measure to the invalidation of laws, which, in the view of the government of the country, were demanded by a great emergency. But the legislature was held powerless to enact them. That powerlessness is in part a consequence of the incorporation into the American legal system of an abstract theory of the source whence the law 58

[1.430]

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The Statute of Westminster 1931 cont. derives its authority. In the legal system of British possessions no speculative or artificial explanation of its basis has hitherto found a place. Without enquiring why it should be so, English lawyers have accepted the traditional principle on which that system rests. It was the accepted doctrine of our system that the King in Parliament had absolute authority over the law and that all places acquired by the Crown in right of the Crown’s British sovereignty must be subject to that, authority. In a newly acquired territory a form of government might be established either by statute made under this legislative authority or by an exercise of the prerogative of the Crown. In either case, the supremacy of the Parliament at Westminster remained. The new legislature was subordinate. If any of its laws came into conflict with a statute of the British Parliament operating in the dependency, that statute prevailed and the local law could have no effect. The Powers of the local legislature might, of course, be limited by the instrument creating it. An attempt on its part to go beyond those limits would be void. If the instrument were 83 an Order-in-Council made under the prerogative, the invalidity of the attempt would rest upon nothing but absence of power, that is, it would arise from the ordinary legal doctrine of ultra vires. But if it were a statute of the British Parliament, the invalidity might be put upon two grounds. It might be attributed not only to mere lack of positive power, but also to repugnancy to the statute of the sovereign legislature. The supremacy of that legislature in respect of any part of the Dominions of the British Crown cannot be abandoned. No doubt British Territory may be ceded or otherwise put from under the jurisdiction of the Crown. But, while it remains under the Crown, it must, according to the theory which has hitherto obtained, be subject to the power of the Imperial Parliament. In other words, allegiance to the British Crown carried with it subjection to the ultimate legislative authority of the King in Parliament. The prevalence of the judicial authority of the King-in-Council may be said to have corresponded with the supremacy of the legislative power of the King-in-Parliament. The authority in judicial matters which the Council retained in respect of the plantations enabled it to hear and determine appeals from all Courts in the possessions beyond the seas. But this power, prerogative in its nature, was subject to the legislative control of the British Parliament. In fact the statutes of 1833 and 1844 do regulate the manner in which the prerogative is exercised. In such a legal structure the derivative character of colonial constitutional law made it unnecessary to seek for any theoretical foundation for its authority. But the development of the constitutional conventions that accompanied and followed the grant of self-government served almost to hide from view the legal doctrine which ascribed ultimate authority to the British Parliament. The Colonial Laws Validity Act 1865, had conferred upon every Colonial representative legislature a constituent power enabling it to make laws respecting its own constitution, powers and procedure. It had given every Colonial legislature also plenary power to establish courts of justice. It had abolished the doctrine ascribed to the common law denying to Colonial legislatures power to make laws repugnant to the fundamental principles of English law. It is true that it had expressed in statutory form the principle that any colonial law repugnant to any Act of the British Parliament extending to the Colony, or to any order or regulation made under such an Act, should, to the extent of the repugnancy, be void. But the British Parliament so sparingly exercised its residual authority that, in practice, the restraint thus stated was seldom encountered in the Dominions. 84 These were the legal principles on which the Imperial system rested when the Statute of Westminster was enacted. … 86 … The purpose of the main provisions of the Statute is to abrogate the rules of law which were thought to be inconsistent with the existence of complete legal autonomy and complete legal equality. The accomplishment of this object by legislation was necessarily difficult. For, in the first place it brought the promoters of the Statute face to face with the only limitation there is upon the omni-competence of the Imperial Parliament. The limitation necessarily arises from that Parliament’s supremacy over the law. No law it makes can deprive it of supremacy over that law. The last expression of its legislative will repeals all prior inconsistent laws. So long, therefore, as the Dominions remained under the jurisdiction of the British Crown, the theoretical power of the Parliament at Westminster to make laws extending to them could not be extinguished. In the second place, the Dominions did not all desire that the power should be extinguished. Except by its exercise, no way exists of amending the Constitution of Canada. No power of amendment is conferred by the British North America Acts of 1867 to 1930. If Canada seeks a constitutional alteration her only course is to invoke the supreme power of the Imperial Parliament, [1.450]

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Part I: Introduction

The Statute of Westminster 1931 cont. and the Dominion and the Provinces have found themselves unable to agree on the substitution of any other method. The States of Australia have in the past found it necessary to appeal to the legislative power of the Parliament at Westminster and may do so again. The framers of the Statute, therefore, contented themselves with endeavouring to insure that it would not be exercised except upon the request of the Dominions. But this device would not give quasi-autonomy or quasi-equality in law so long as statutes of the Imperial Parliament, existing or future, prevailed over Dominion legislation. It was, therefore, considered necessary to attempt to reverse the rule of paramountcy and to enable the legislature of the Dominion to enact laws which should prevail over the statutes of the Parliament at Westminster. There are difficulties again in the execution of this purpose, although, perhaps, the difficulties are not so evident. First, the proposed rule could not prevent the Imperial Parliament from afterwards enacting a statute containing some sufficient expression of intention that it should operate in a Dominion, notwithstanding any law of the Dominion to the contrary. Such a statute would necessarily prevail over local statutes even if subsequently enacted. Indeed Canada could not have it otherwise. Any future statute by which, at the request of the Dominion and Provinces, the British Parliament may amend the Canadian Constitution must have paramountcy over Canadian legislation. For, if it were open to the Dominion Parliament to legislate inconsistently with it, the amendment would not possess the controlling force necessary in a rigid Con- 87 -stitution. Again, it is by no means inconceivable that in Australia the States, or one of them, might find it desirable to obtain an Imperial statute for some purpose which may by that means be more readily achieved. The States would not wish that an Imperial statute of this kind should be subject to the overriding authority of the Federal Legislature. In the second place, the constitutions of the Dominions (other than Newfoundland) consist in Imperial statutes. Powers of amendment are conferred by these constitutions except that of Canada. But various limitations are imposed upon the power; and, in any case, a power to make laws inconsistent with a constating instrument is not necessarily the same as the power to amend it. Thus, in the project of removing the binding force of Imperial statutes, there is inherent the question, what binding force will a Dominion constitution then possess? It will be seen that, at this point, we touch the fundamental question to which in the beginning I referred. Anything that touches so profound a question arouses instinctive misgiving. Whether for this reason or because it was feared lest the Statute should prove a Greek gift or for deeper motives of policy, three of the Dominions sought a means of securing themselves from its application. Australia, New Zealand and Newfoundland obtained the insertion of a section in the nature of a proviso to the effect that none of its positive provisions should extend to any of those Dominions as part of its law unless its Parliament adopted the provision. Even then the Dominion might repent. So it was provided that the adoption of a provision might be revoked.

[1.460]

1.

2.

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Notes&Questions

According to Sir Owen Dixon, in what did the “sovereignty” of the British Parliament consist? Is it possible for a sovereign legislature to grant sovereignty to another legislature? Can this be done while preserving “legal continuity” or does the acquisition of sovereignty require a “legal revolution”? As explained by Dixon, how do the Colonial Laws Validity Act 1865 and the Statute of Westminster 1931 illustrate the difficulties in achieving complete independence? Are any of Australia’s political institutions “sovereign”? Is sovereignty consistent with the rule of law? Consider the views of Joseph Raz, extracted at [1.340]. Is it consistent with federalism? Consider the analysis of Quick and Garran, extracted at [1.50]. Is it consistent with democracy and individual rights? Consider the reasoning of Mason CJ in Australian Capital Television v Commonwealth. [1.460]

Constitutional Fundamentals

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Australian Capital Television v Commonwealth [1.470] Australian Capital Television Pty Ltd v Commonwealth (1992) 177 CLR 106 at 137–139 (footnotes omitted) Mason CJ: 137 … The very concept of representative government and representative democracy signifies government by the people through their representatives. Translated into constitutional terms, it denotes that the sovereign power which resides in the people is exercised on their behalf by their representatives. In the case of the Australian 138 Constitution, one obstacle to the acceptance of that view is that the Constitution owes its legal force to its character as a statute of the Imperial Parliament enacted in the exercise of its legal sovereignty; the Constitution was not a supreme law proceeding from the people’s inherent authority to constitute a government, notwithstanding that it was adopted, subject to minor amendments, by the representatives of the Australian colonies at a Convention and approved by a majority of the electors in each of the colonies at the several referenda. Despite its initial character as a statute of the Imperial Parliament, the Constitution brought into existence a system of representative government for Australia in which the elected representatives exercise sovereign power on behalf of the Australian people. Hence, the prescribed procedure for amendment of the Constitution hinges upon a referendum at which the proposed amendment is approved by a majority of electors and a majority of electors in a majority of the States (s 128). And, most recently, the Australia Act 1986 (UK) marked the end of the legal sovereignty of the Imperial Parliament and recognized that ultimate sovereignty resided in the Australian people. The point is that the representatives who are members of Parliament and Ministers of State are not only chosen by the people but exercise their legislative and executive powers as representatives of the people. And in the exercise of those powers the representatives of necessity are accountable to the people for what they do and have a responsibility to take account of the views of the people on whose behalf they act.

[1.480]

Notes&Questions

1.

For discussion of the constitutional idea of popular sovereignty, see G Lindell, “Why Is Australia’s Constitution Binding? – the Reasons in 1900 and Now, and the Effect of Independence” (1986) 16 Federal Law Review 29; G Winterton, “Popular Sovereignty and Constitutional Continuity” (1998) 26 Federal Law Review 1; N Aroney, “A Public Choice? Federalism and the Prospects of a Republican Preamble” (1999) 21 University of Queensland Law Journal 205; S Evans, “Why Is the Constitution Binding? Authority, Obligation and the Role of the People” (2004) 25 Adelaide Law Review 103.

2.

On sovereignty generally, see G Marshall, Parliamentary Sovereignty and the Commonwealth (Clarendon Press, Oxford, 1957); J Goldsworthy, The Sovereignty of Parliament: History and Philosophy (Oxford University Press, Oxford, 1999); N Walker (ed), Sovereignty in Transition (Hart Publishing, Oregon, 2003).

Sue v Hill [1.490] Sue v Hill (1999) 199 CLR 464 at 486-488, 490-492 (some footnotes omitted) [Section 44(i) of the Commonwealth Constitution provides that any person who “is a subject or citizen or entitled to the rights or privileges of a subject or a citizen of a foreign power; … shall be incapable of being chosen or of sitting as a senator”. Henry Sue petitioned the High Court, in its capacity as the Court of Disputed Returns under the Commonwealth Electoral Act 1918 (Cth), for an order that Heather Hill was incapable of being elected as a member of the Senate because at the time of her nomination she was a subject or citizen of a foreign power, namely the United Kingdom. Gleeson CJ, Gaudron, [1.490]

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Part I: Introduction

Sue v Hill cont. Gummow and Hayne JJ, McHugh, Kirby and Callinan JJ not deciding, held that the United Kingdom was a “foreign power” within the meaning of s 44(i) and that Hill’s election was therefore invalid.] Gleeson CJ, Gummow and Hayne JJ: 486 … [47] At the material time, Mrs Hill was regarded as a British citizen by the statute law of the United Kingdom …. 487 … [48] The expression “a foreign power” in s 44 does not invite attention to the quality of the relationship between Australia and the power to which the person is said to be under an acknowledgment of allegiance, obedience or adherence or of which that person is a subject or a citizen or entitled to the rights and privileges of a subject or citizen. That is, the inquiry is not about whether Australia’s relationships with that power are friendly or not, close or distant, or meet any other qualitative description. Rather, the words invite attention to questions of international and domestic sovereignty. … [50] In Bonser v La Macchia, Windeyer J referred to Australia having become “by international recognition … competent to exercise rights that by the law of nations are appurtenant to, or attributes of, sovereignty”. His Honour regarded this state of affairs as an instance where “[t]he law has followed the facts”. It will be apparent that these facts, forming part of the “march of history”, received judicial notice. They include matters and circumstances external to Australia but in the light of which the Constitution continues to have its effect and, to repeat Windeyer J’s words, “[t]he words of the Constitution must be read with that in mind”. … 488 … [52] The changes to which Windeyer J referred did not require amendment to the text of the Constitution. Rather, they involved: “in part, the abolition of limitations on constitutional power that were imposed from outside the Constitution, such as the Colonial Laws Validity Act 1865 (Imp) and restricting what otherwise would have been the proper interpretation of the Constitution, by virtue of Australia’s status as part of the Empire. When the Empire ended and national status emerged, the external restrictions ceased, and constitutional powers could be given their full scope.” … 490 … [59] It may be accepted that the United Kingdom may not answer the description of “a foreign power” in s 44(i) of the Constitution if Australian courts are, as a matter of the fundamental law of this country, immediately bound to recognise and give effect to the exercise of legislative, executive and judicial power by the institutions of government of the United Kingdom. However, whatever once may have been the situation with respect to the Commonwealth and to the States, since at least the commencement of the Australia Act 1986 (Cth) this has not been the case. … [60] As to the further exercise of legislative power by the Parliament of the United Kingdom, s 1 of the Australia Act states: 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. [61] The recital to the Australia Act indicates that it was enacted in pursuance of s 51(xxxviii) of the Constitution, the Parliaments of all the States having requested the Parliament of the Commonwealth to 491 enact the statute. Section 51(xxxviii) empowers the Parliament, subject to the Constitution, to make laws for the peace, order and good government of the Commonwealth with respect to: [t]he 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. The Australia Act was enacted before s 51(xxxviii) had been construed in Port MacDonnell Professional Fishermen’s Assn Inc v South Australia (1989) 168 CLR 340. Apparently out of a perceived need for abundant caution, legislation of the Westminster Parliament was sought and passed as the 1986 UK Act (see Zines, Constitutional Change and the Commonwealth (1989) at 20-21). … [63] of the Australia Act does not purport to exclude, as a matter of the law of the United Kingdom, the effect of statutes thereafter enacted at Westminster. Rather, it denies their efficacy as part of the law of the Commonwealth, the States and the Territories. … 492 … [64] The expression in s 1 of the 1986 UK Act “[n]o Act of the Parliament of the United Kingdom passed … shall extend, or be deemed to extend” was used in s 4 of the Statute of Westminster 1931 (UK). Provisions such as s 1 may present doctrinal questions for the constitutional law of the United Kingdom, in particular for the dogma associated with Dicey’s views as to the sovereignty of the Parliament at Westminster. Professor Sir William Wade 62

[1.490]

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Sue v Hill cont. pointed out more than forty years ago that Dicey never explained how he reconciled his assertions that Westminster could destroy or transfer sovereignty and the proposition that it could not bind future Parliaments. The effect in the United Kingdom of any amendment or repeal by the United Kingdom Parliament of s 1 would be for those adjudicating upon the constitutional law of that country. But whatever effect the courts of the United Kingdom may give to an amendment or repeal of the 1986 UK Act, Australian courts would be obliged to give their obedience to s 1 of the statute passed by the Parliament of the Commonwealth. [65] It follows that, at least since 1986 with respect to the exercise of legislative power, the United Kingdom is to be classified as a foreign power.

[1.500]

Notes&Questions

Why did Gleeson CJ, Gummow and Hayne JJ adhere to the Commonwealth version of the Australia Act 1986 rather than the UK version? Indigenous Australians [1.510] As we have seen with notions such as the rule of law or constitutional rights, the

starting point in modern liberal democracies is that all persons are equal – all are equal before the law, all (adult citizens) have the right to vote, etc. Bearing in mind this starting point, should our Constitution recognise Australia’s Indigenous peoples and should Australia’s political institutions provide specifically for Aboriginal political representation and/or self-determination? And, if so, how might this be done? “Self-determination” can be understood in many different ways. The following extract, written by Justice Robert French, then of the Federal Court, before he was appointed Chief Justice of the High Court, discusses self-determination as a claim for sovereignty.

Sovereignty and Indigenous Peoples [1.520] R French, “The Constitution and the People”, in R French, G Lindell and C Saunders (eds), Reflections on the Australian Constitution (Federation Press, Sydney, 2003), pp 78-79 78 It is a feature of sovereignty that it tends to exclusivity. Supreme authority, which is its essence, has that character. This is a difficulty underpinning debate about a treaty with Australia’s indigenous people. It has been argued that implicit in the nature of a treaty is recognition of another sovereignty, a nation within Australia. The common law of native title as enunciated in Mabo (No 2) did not involve any yielding of sovereignty. It rested upon the non-justiciable proposition that the Crown acquired sovereignty over the land upon its annexation of the Australian colonies. The acquisition of that sovereignty, however, did not operate directly upon the traditional laws and customs of indigenous people or the relationship with land and waters to which they give rise. The common law in its recognition of those traditional relationships with land does not do so. Nor do the statutory provisions of the Native Title Act 1993 (Cth) which provides for recognition and protection of native title, validation of past invalid acts affecting native title and extinguishment of native title in certain circumstances. To speak of recognition is in one sense to personify the law and to attribute to it a cognitive function. Avoiding personification and cognitive metaphors, recognition can be regarded as the outcome of the application of rules under which certain rights arising at common law are ascertained which are vested in an indigenous community by virtue of its relationship to land or waters. Extinguishment by executive or legislative action is the result of the exercise of the non-indigenous sovereignty which bars or qualifies common law recognition. Importantly it has nothing to say about traditional law or custom or the relationship of Aboriginal people to their land. There is a question whether the concepts of sovereignty so far discussed have any relevance in describing the relationship between 79 indigenous people and their country under traditional law and [1.520]

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Part I: Introduction

Sovereignty and Indigenous Peoples cont. custom and their relationships with each other. Sovereignty is a colonising term. Nevertheless, some indigenous leaders have used it to designate what they maintain is their ongoing traditional responsibility for and ownership of country. In Coe v Commonwealth the applicant purported to sue on behalf of the Aboriginal community and nation of Australia. He asserted membership of the Wiradjeri Tribe and authority from it and other tribes and the whole Aboriginal community and nation to bring the action. He pleaded, inter alia: “6A. Clans, tribes and groups of Aboriginal people travelled widely over the said continent now known as Australia developing a system of interlocking rights and responsibilities making contact with other tribes and larger groups of Aboriginal people thus forming a sovereign Aboriginal nation.” The High Court (Gibbs and Aickin JJ, Jacobs and Murphy JJ dissenting) held that Mason J had rightly dismissed Mr Coe’s application for leave to amend his statement of claim and that his appeal from that order should be dismissed. In so holding Gibbs J acknowledged that the correctness of Milirrpum v Nabalco Pty Ltd, which had denied that the common law could recognise rights and interests in land held by Aboriginal people, would be an arguable question if properly raised. As to the sovereignty claim he said: “The Aboriginal people are subject to the laws of the Commonwealth and of the States or Territories in which they respectively reside. They have no legislative, executive or judicial organs by which sovereignty might be exercised. If such organs existed, they would have no powers, except such as the law of the Commonwealth, or of a State or Territory, might confer upon them. The contention that there is in Australia an Aboriginal nation exercising sovereignty, even of a limited kind, is quite impossible in law to maintain (Coe v Commonwealth at 408).” Jacobs J said of those parts of the statement of claim which disputed the validity of the Crown’s claim of sovereignty and sovereign possession that they were: “Not matters of municipal law but of the law of nations and are not cognisable in a court exercising jurisdiction under that sovereignty which is sought to be challenged (at 410).” That judgment was given some 13 years or so before Mabo (No 2). Revisiting the Coe pleading in 1993 Mason CJ said [80]: “Mabo (No 2) is entirely at odds with the notion that sovereignty adverse to the Crown resides in the Aboriginal people of Australia. The decision is equally at odds with the notion that there resides in the Aboriginal people a limited kind of sovereignty embraced in the notion that they are ‘a domestic dependent nation’ entitled to self government and full rights … or that as a free and independent people they are entitled to any rights and interests other than those created or recognised by the laws of the Commonwealth, the State of New South Wales and the common law (Coe v Commonwealth (1993) 68 ALJR 110 at 115).” The judgments cited make plain the irreconcilability of conflicting claims to sovereignty. That is not to say that the model of recognition derived from the common law of native title may not be suggestive of an approach to an agreement between the Commonwealth and indigenous Australians which does not involve any compromise of sovereignty however that term is understood. Such an agreement could recognise and acknowledge traditional law and custom of indigenous communities across Australia, their historical relationship with their country, their prior occupancy of the continent and that there are those who have maintained and asserted their traditional rights to the present time. This is a cultural reality which can be accepted without compromising, symbolically or otherwise, Australia’s identity as a nation. And if that traditional relationship should be asserted by some in terms of sovereignty, that is sovereignty under traditional law and custom. It may have meaning in that universe of discourse. It can even be accepted in that context, without being in any way inconsistent with the Commonwealth Constitution or the laws made under it.

[1.530]

Notes&Questions

Justice French (as he then was) states that “sovereignty is a colonising term”. What follows from this? For example, does it mean that this idea can never properly represent indigenous understandings of sovereignty? Belinda Wells and John Doyle discuss ways in which our Constitution might recognise and protect the values of Aboriginal and Torres Strait Islander peoples. 64

[1.530]

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Reconciliation and the Constitution [1.540] B Wells and J Doyle, “Reconciliation and the Constitution”, in E Johnston, M Hinton and D Rigney, Indigenous Australians and the Law (Cavendish Publishing, Sydney, 1997), pp 196-198, 206-211 (footnotes omitted) 196 We turn now to consider the more specific issue of self-determination within the Australian context. Aboriginal and Torres Strait Islander peoples assert the right to self-determination on the basis that at the time of the arrival of the British just over 200 years ago, their ancestors had been living in Australia for thousands of years, with control over every 197 aspect of their lives. …In a broad sense, the principle of self-determination is the common fabric through which is threaded the various strands of indigenous rights. As each thread is put into place, the fabric as a whole becomes stronger, more durable. Three main strands of indigenous rights have been identified as: • autonomy rights: which focus upon the right of indigenous peoples to determine the way in which they live and control their social, economic and political systems; • identity rights: which relate to the right to exist as distinct peoples with distinct cultures; and • territory and resource rights: which encompass such things as land entitlements, the right to resources of that land, and the use of those resources. Each of these strands is made up of many threads, and not all of them will be susceptible to the setting of precise and uniform legislative standards. For example, in the area of “autonomy rights”, it may be more appropriate to implement the principle of autonomy through a series of regional agreements which are tailored to the wishes and needs of each particular Aboriginal community. Secondly, the “identity rights” would include the right to protection of items and areas of cultural significance, which is currently regulated by State and Commonwealth legislation. However, this category would also include the right to recognition of Aboriginal customary law, which is an area that is largely unregulated (and therefore unrecognised). The Australian Law Reform Commission has recommended the recognition by our legal system of Aboriginal customary laws, but favoured the adoption of different approaches to different areas of the law, rather than a “broad brush” approach. And, in relation to the third main strand of rights – “territory and resource rights” – the Native Title Act 1993 (Cth) now represents legislative recognition of some, but not all, aspects of this category. Here, the common law may continue to play an important role in resolving areas of detail. 198 It is important to recognise that many of the indigenous rights would be collective rights: by their nature, capable of assertion only by a group (or by an individual or individuals on behalf of a group). The Australian legal system is largely unfamiliar with the idea of group rights. It will always be an extraordinarily difficult task to determine the appropriate balance between group rights and individual rights, both in a general sense (if some type of standard is to be drafted), and in a particular case. For example, Dodson highlights the difficulties posed by an indigenous community’s decision to protect its people from alcohol by declaring the community to be “dry”: “On the one hand are the rights of the community to determine how it will live, to protect its members from harm, and to preserve its culture – rights which are guaranteed under the International Covenant on Civil and Political Rights. On the other are the rights of the individuals to buy or to sell alcohol.” And so, it seems likely that different mechanisms will be advocated or thought appropriate for protecting different indigenous rights. Nonetheless, Dodson emphasises that the indigenous rights must be recognised, and that that recognition must have constitutional force. In his view, constitutional protection is necessary in order to prevent economic interests (eg, those of large resource companies) from too easily persuading the government of the day to override fundamental indigenous rights. Constitutional recognition of such rights would clearly also play a symbolic and educative role, so that Australians will no longer think in terms of “a hierarchy of rights, a hierarchy of knowledge”, with Aboriginal rights and knowledge at the bottom – valued least. So, have other countries provided such constitutional protection of indigenous rights? We turn to look at the position in the United States, New Zealand, and Canada. … 206 In Australia, there are already “reconciliation documents” of sorts. There are regional agreements which have been negotiated by governments, commercial enterprises, and indigenous peoples. The agreements have tended to be [1.540]

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Part I: Introduction

Reconciliation and the Constitution cont. less comprehensive in their coverage of issues than their Canadian equivalents and have “variable legal bases, some statutory, others not”. Secondly, the people of the Torres Strait Islands are in the process of “achieving greater autonomy through the development of a development plan” and through the creation of a new body, the Torres Strait Regional Authority. The Native Title Act 1993 (Cth) encourages the development of regional agreements in relation to land and waters. In Canada, the rights (and the extinguishment of rights) set out in such agreements are constitutionally protected. They are more likely to encompass rights associated with 207 indigenous self-government. Incorporation of such rights may, however, be within reach in Australia, since both Torres Strait Islanders and Northern Territory Aborigines are agitating for greater power “to make decisions about social, cultural, economic, and environmental matters” within their regions. Regional agreements are able to include solutions which are appropriate to local needs. They tend to focus on land use and protection of cultural heritage, and may in the future include grants of local government-type powers. Recognition of Aboriginal and Torres Strait Islander perspectives on such issues contributes to indigenous self-determination. As we have discussed, there are many strands which make up self-determination, and not all are appropriate to all people in all circumstances. Self-government over a defined territory is a realistic goal for some discrete communities, but not for city-based indigenous people. Some indigenous people regard programmes to combat alcoholism and to increase community employment as contributing to personal and collective self-determination, regardless of whether they are administered by an indigenous organisation or not. Others reject any suggestion that Commonwealth-funded statutory authorities such as ATSIC can contribute, through their representative nature and their programmes, to indigenous self-determination. So, opinion will differ on the appropriate mechanisms for implementing general principles such as the right to self-determination and the need to protect cultural heritage. Nonetheless, in our view consideration should be given to according legal recognition to such principles. Politicians and public speakers may express views on the moral entitlements of Aboriginal and Torres Strait Islander peoples, but greater 208 attitudinal change is worked by rights which are not only legally recognised but legally enforceable. The decision in Mabo (No 2) and the impact of s 35 of the Canadian Constitution are obvious examples of this. A starting point would be to include in the constitution some acknowledgment of the prior occupation and dispossession of Aboriginal and Torres Strait Islander peoples in Australia. As Professor Daes has said: “In the culture of a nation, as in the psychology of individuals, the first step towards healing and reconciliation is honesty about the past.” The preamble to the constitution could set the constitution in context by referring to this history, and to the special status of the indigenous peoples as the “first Australians”, and also by describing the aspirations and the diverse cultural backgrounds of Australians today. ATSIC has put forward for consideration a preamble which includes these various elements. Secondly, we agree with the Constitutional Commission that s 51(xxvi) of the Constitution should be amended so that there is an explicit power in the Commonwealth to make laws with respect to “Aborigines and Torres Strait Islanders”. The Constitutional Commission also recommended that s 25 of the Constitution should be repealed because of its discriminatory basis. Section 25 states that where a State law causes “persons of any race” to be disqualified from voting at particular State elections, those persons will not be counted when calculating the population of the State or the Commonwealth. In our view, the provision is anachronistic, and should have been put forward for repeal at the time of the 1967 referendum. Moving beyond the existing clauses of the constitution, we next consider the suggestion that a non-discrimination provision should be entrenched in the constitution. During the debates on the Native Title Bill 1993 (Cth), Aboriginal people recognised the importance of the guarantees against racial discrimination contained in the Racial Discrimination Act 1975 (Cth), but also their vulnerability as ordinary statutory provisions. As Fr Brennan SJ has suggested, the principle could be included as part of a more general guarantee (against Commonwealth and State laws and practices) of 209 “freedom from discrimination on the ground of race, colour, ethnic or national origin, sex, marital status … political, religious or ethical belief”, or sexuality, or age. The components of constitutional change that we have mentioned thus far could be described as comprising a “minimalist” position. Such change would not threaten traditional assumptions about the need to accommodate Aboriginal and Torres Strait Islander people within our existing system of representative government, in a way that is fair and 66

[1.540]

Constitutional Fundamentals

CHAPTER 1

Reconciliation and the Constitution cont. non-discriminatory. We could add to this, two other possibilities: the reservation (by constitutional amendment) of a certain number of Senate seats for indigenous representatives, and the enactment of a Bill of Right. To what extent have Wells and Doyle’s arguments been taken up? Consider the following report of the Expert Panel on Constitutional Recognition of Aboriginal and Torres Strait Islander Peoples.

Recognising Aboriginal and Torres Strait Islander Peoples in the Constitution [1.550] Department of Families, Housing, Community Services and Indigenous Affairs, Expert Panel on Constitutional Recognition of Aboriginal and Torres Strait Islander Peoples, Report of the Expert Panel, Recommendations (Canberra, 2012), p xviii 1.

That section 25 be repealed.

2.

That section 51(xxvi) be repealed.

3.

That a new “section 51A” be inserted, along the following lines: Section 51A Recognition of Aboriginal and Torres Strait Islander peoples • Recognising that the continent and its islands now known as Australia were first occupied by Aboriginal and Torres Strait Islander peoples; • Acknowledging the continuing relationship of Aboriginal and Torres Strait Islander peoples with their traditional lands and waters; • Respecting the continuing cultures, languages and heritage of Aboriginal and Torres Strait Islander peoples; • Acknowledging the need to secure the advancement of Aboriginal and Torres Strait Islander peoples; 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 Aboriginal and Torres Strait Islander peoples.

The Panel further recommends that the repeal of section 51(xxvi) and the insertion of the new “section 51A” be proposed together. 4.

That a new “section 116A” be inserted, 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.

5.

That a new “section 127A” be inserted, along the following lines: Section 127A Recognition of languages (1) The national language of the Commonwealth of Australia is English.

[1.550]

67

Part I: Introduction

Recognising Aboriginal and Torres Strait Islander Peoples in the Constitution cont. (2) The Aboriginal and Torres Strait Islander languages are the original Australian languages, a part of our national heritage.

Notes&Questions

[1.560]

1.

2.

Why did the expert panel choose not to recommend that the Constitution be amended to recognise Aboriginal and Torres Strait Islander sovereignty, a treaty with indigenous peoples, or special representation for Australia’s indigenous peoples in the Parliament? Why did it choose not to recommend the insertion of a new preamble at the beginning of the Australian Constitution recognising Australia’s indigenous peoples? For the full text of the report, see http://www.recognise.org.au/expert-panel-report. Would the preamble to the proposed s 51A be effective in limiting the legislative power that the proposed section would confer? Professor Anne Twomey has observed (“The Preamble and Indigenous Recognition” (2011) 15(2) Australian Indigenous Law Review 1 at 17): The Expert Panel was wise in avoiding the many problems that would have arisen if it had attempted to alter the existing Preamble or insert a new general preamble in the Commonwealth Constitution. By confining its statement of recognition to preambular words that introduce a substantive change in the text of the Constitution, it avoided the controversy involved in deciding what other matter should be included in a preamble, avoided a contentious debate about common values, confined the interpretative application of the preamble to a particular provision rather than the Constitution as a whole and ensured that the preambular words introduced and explained a new provision in the Constitution. The Expert Panel does appear to assume, however, that the reference to “advancement” in the preambular words to proposed section 51A will act as a form of qualification on the grant of power in that section and that a court will assess future laws with respect to Aboriginal and Torres Strait Islander peoples by reference to whether or not, overall, they are for the “advancement” of those peoples. This gives rise to two contentious questions, to which the answers are unknowable in advance of such an amendment being enacted and tested in the courts. First, would a court use the preamble of section 51A to qualify the scope of the power? Secondly, if it does so, how would it apply the concept of advancement and how would this affect the validity of laws? For example, if a law was regarded as overall for the advancement of Aboriginal and Torres Strait Islander peoples, but was later amended so that the balance tipped the other way, would the entire law be rendered invalid? The answers to such questions cannot be known until the provision is tested in the High Court and that cannot occur until after it has been approved by a referendum and become part of the Constitution. Hence if this provision were put to a referendum in this form, voters would be asked to approve it without being certain of its consequences. This is asking a lot more of voters than mere willingness to recognise Aboriginal and Torres Strait Islander peoples in the Constitution.

68

[1.560]

CHAPTER 2 States [2.10]

THE ESTABLISHMENT OF REPRESENTATIVE AND RESPONSIBLE GOVERNMENT ........................................................................................................... 70 [2.20]

[2.40]

Federal Constitutional Law, An Introduction ...................................... 70

THE LEGISLATIVE POWER OF COLONIAL LEGISLATURES ....................................... 72 [2.40]

General and plenary legislative powers ................................................... 72 [2.50]

[2.60]

[2.70]

[2.90]

Colonial Laws Validity Act 1865 (UK) ............................................... 74

The meaning of repugnancy .................................................................... 75 [2.100]

[2.120]

Union Steamship v King .................................................................. 73

Repugnancy to English law and the Colonial Laws Validity Act 1865 (UK) ............................................................................................................. 74

Union Steamship v Commonwealth ................................................. 75

Responsible government in the colonies ................................................. 75 [2.120]

Federal Constitutional Law, An Introduction ...................................... 75

[2.130] FEDERATION ............................................................................................................... 76 [2.140]

The legal status of the States vis-à-vis the Commonwealth .................. 77

[2.150] POST-FEDERATION STATE CONSTITUTIONS ........................................................... 78 [2.160] [2.170]

Australia Act 1986 (Cth) ................................................................. 79 Australia Act 1986 – Some Legal Conundrums ................................. 80

[2.180] PARLIAMENTARY SOVEREIGNTY AND MANNER AND FORM ................................ 83 [2.190] [2.210] [2.230]

[2.250]

Parliamentary sovereignty ......................................................................... 94 [2.260] [2.280]

[2.300]

The British Grundnorm: Parliamentary Supremacy Re-examined .................................................................................. 96 Clayton v Heffron ......................................................................... 103

The reconstitution alternative ................................................................. 107 [2.310] [2.330]

[2.350]

McCawley v The King ..................................................................... 85 Attorney-General (NSW) v Trethowan .............................................. 86 Attorney-General (NSW) v Trethowan .............................................. 92

An Overview of Manner and Form in Australia ................................ 107 Attorney-General (WA) v Marquet ................................................. 109

Limits on the power to enact manner and form provisions pursuant to s 6 of the Australia Act ............................................................................. 114 [2.360] [2.380] [2.400]

South Eastern Drainage Board v Savings Bank of Australia .............. 115 The Comalco Case ........................................................................ 116 West Lakes v South Australia ......................................................... 118

[2.420] THE ABDICATION OF LEGISLATIVE POWER ........................................................... 120 [2.430]

An Overview of Manner and Form in Australia ................................ 121

[2.450] STATE PARLIAMENTS AND EXTRA-TERRITORIAL LAWS ......................................... 123 [2.460] [2.480]

Pearce v Florenca .......................................................................... 124 Union Steamship v King ................................................................ 128

[2.500] STATE COURTS AND THE SEPARATION OF JUDICIAL POWER .............................. 130 69

Part I: Introduction

[2.510] [2.560] [2.590] [2.610] [2.640] [2.670] [2.690] [2.710]

Kable v DPP (NSW) ...................................................................... 131 Fardon v Attorney-General (Qld) .................................................... 143 Australian States: Cinderellas No Longer? ...................................... 157 International Finance Trust v NSW Crime Commission .................... 160 South Australia v Totani ................................................................ 163 Momcilovic v The Queen ............................................................... 174 Assistant Commissioner Condon v Pompano .................................. 178 Kuczborski v Queensland .............................................................. 181

THE ESTABLISHMENT OF REPRESENTATIVE AND RESPONSIBLE GOVERNMENT [2.10] Together with the Commonwealth, the constituent elements in the Australian federal

system are the States. Each State has its own constitution and legislature. The Commonwealth Constitution regulates the States’ inter-relationship and their relationship to the Commonwealth. Prior to the establishment of the Commonwealth in 1901, the States were self-governing British colonies with a high degree of legal and political autonomy, although ultimately subject to the legal authority of the United Kingdom Parliament (referred to as the Imperial Parliament) as were the other colonies and possessions within the British Empire. Representative and responsible government was extended to the Australian colonies by Imperial legislation or local legislation enacted pursuant thereto. Even after federation in 1901, the States remained subject to the United Kingdom’s paramount legislative competence, and did so until 1986 when the Australia Acts 1986 (UK and Cth) were enacted. The British element in the constitutional evolution of the States was reinforced by the reception of English common law and statute law – so much as was relevant to their circumstances – in the early colonial period.

Federal Constitutional Law, An Introduction [2.20] K Booker, A Glass and R Watt, Federal Constitutional Law, An Introduction (2nd ed, Butterworths, Sydney, 1998) pp 9-10. British colonies The constitutional structure of government in Australia has roots in the establishment, development and administration of colonies in the country. … A claim in the name of the Crown was made again … on 26 January 1788 by Governor Phillip on the establishment of the colony of New South Wales. By 1829 a combination of formal assertions of legal sovereignty and the founding of more settlements put the entire continent under the sovereignty of the British Crown. [2.2] At common law, for constitutional law purposes, British colonies are classified as settled, conquered or ceded: 6 Halsbury’s Laws of England (1991, 4th ed reissue), para 978; Cooper v Stuart (1889) 14 App Cas 286 at 291 (PC). A settled colony [as the Australian colonies were regarded] is one that is formed by the British settlement of an uninhabited region or a region that does not have an established system of law. … In a settled colony the settlers are thought of as carrying law with them. The law received into the colony in this way is so much of the common and statute law of England as is suitable to the circumstances of the colony. As well as this body of law applicable by reception, the law of a settled colony includes any British statutes that have been enacted with the intention that they should apply in the colony so as to prevail over other laws, if any, on the same subject matter. Imperial statutes of that kind are said to be applicable by paramount force. A statute may apply by paramount force in the colony whether it is enacted before or after the acquisition of the colony. … When an issue about the reception of law in New South Wales was being considered by the Privy Council in Cooper v Stuart (1889) 14 App Cas 286 the classification of the colony as a settled colony was considered to be obvious … The reasoning of Cooper v Stuart (and other cases on the doctrine of 70

[2.10]

States

CHAPTER 2

Federal Constitutional Law, An Introduction cont. terra nullius) was re-examined in Mabo v Queensland [No 2] (1992) 175 CLR 1, a case in which the High Court recognised that a form of native land title survived the assertion of British sovereignty over Australia. It was held that the doctrine of terra nullius was no longer part of Australian law. Although … the case assumes the validity of the assertion of British sovereignty.

[2.30] The earliest established colony, New South Wales, originally under a military form of

government, was granted civil government in 1823 by the Imperial Parliament pursuant to the New South Wales Act (4 Geo IV c 96). It established a Legislative Council (s 24) consisting of five to seven members appointed by the Crown from amongst the residents of the colony to advise the Governor. When acting on the advice of the Council, the Governor was vested with power to make laws and ordinances for the peace, welfare and good government of the colony, subject to the requirement that they not be “repugnant” to “the Laws of England”, or to the Act itself, and any Charters, Letters Patent or Orders in Council which were issued pursuant to it. Pursuant to the Act, Letters Patent were issued by the Crown, and promulgated on 17 May 1824, which established the Supreme Court of New South Wales. The Chief Justice was required to certify to the Governor that any proposed law or ordinance complied with the abovementioned repugnancy provisions (s 29); all laws and ordinances were to be laid before the Imperial Parliament (s 31) and the Monarch was vested with power to disallow any Act or Ordinance within three years. This initial pattern of government was eventually mirrored in all the other Australian colonies in their initial stages of development. The direct power of the colonial Governors diminished as responsible government expanded and a bicameral legislature was established with a representative lower house possessing general legislative competence. Thus, in 1828, pursuant to the Australian Courts Act 1828 (UK) (9 Geo IV c 83), the size of the Legislative Council in New South Wales was expanded, together with its power relative to that of the Governor. The disapproval of a majority of the Council effectively vetoed the enactment of any legislation supported by the Governor, whereas hitherto, in emergencies at least, the vote of one member in support of the Governor was sufficient for the enactment of legislation. The Act also provided that all English law, both common law and statute, in force in England at the time was applicable to the colony – to the extent, at least, that the circumstances of the colony would allow. However, in 1842, by the Australian Constitutions Act 1842 (UK) (5 & 6 Vict c 76), the Imperial Parliament legislated to provide some form of representative government in New South Wales. Two thirds of the members of the Legislative Council were now to be elected. The Governor and Council were empowered to increase the number of members of the Council. However, the right to vote was subject to property qualifications. In addition to various limitations on the legislative competence of the Governor acting on the advice of the Council, the repugnancy limitations remained. Moreover, responsible government still eluded the colony. The Governor essentially controlled colonial finances and still had the discretion to veto local legislation. In short, the Governor was ultimately responsible to the British Government. In 1850 the Australian Constitutions Act 1850 (UK) (13 & 14 Vict c 59) provided for a separate Legislative Council for the Port Phillip district of New South Wales (to become Victoria) and reformed the existing legislatures of South Australia and Van Diemen’s Land (Tasmania) to allow for elected members along similar lines to New South Wales. The Act also provided (s 32) that upon the establishment of Legislative Councils as provided for by the Act, the legislatures of these colonies, as well as that of Western Australia, were to have constituent power, that is, the power to alter their constitutions and to set up bicameral legislatures, subject to the royal assent. The respective Governors, acting with the advice and [2.30]

71

Part I: Introduction

consent of these Councils, were given broad and general legislative power to “make laws for the peace, welfare, and good government” of their respective colonies, subject to certain very specific exceptions and subject to the usual repugnancy limitations. Thus, they were granted a plenary general legislative power, in addition to their constituent power, subject to limitations and specific exceptions. Although dissatisfied with these exceptions, the colonies were given the significant power to frame their own constitutions. New South Wales and Victoria were the first to do so, not without some obliging assistance from the Imperial Parliament. The Imperial Parliament enacted enabling acts in 1855 which broadened the power of colonial legislatures to amend their constitutions: 18 & 19 Vict c 54, referred to as the New South Wales Constitution Statute (to distinguish it from the Act it enabled) in the case of New South Wales, and, in the case of Victoria, 18 & 19 Vict c 55. The locally drafted Constitution Acts for each colony were contained in the schedules to the respective Imperial Acts. Thus was effected the granting of general legislative power to the future States as well as constituent power, subject of course to the maintenance of the ultimate legal authority of the Imperial Parliament. The New South Wales Constitution Act, s 1, provided that the new bicameral legislature – consisting of the Legislative Council together with a new Legislative Assembly – had the competence to “make laws for the peace, welfare and good government” of the colony. Its Victorian counterpart provided (s 1) that the new bicameral legislature had the competence “to make laws in and for Victoria in all cases whatsoever”. The 1855 Imperial legislation also provided that the Queen in Council was empowered to create a separate colony out of the northern part of New South Wales, leading to the Order in Council in 1859 which established the colony of Queensland with the same type of legislative arrangements as those in New South Wales. Similar constitutional arrangements were to be made for South Australia and Tasmania, with the legislatures having a general legislative competence and the colonial executive to be responsible to the colonial parliaments. (For a detailed examination of these developments, see R D Lumb, The Constitutions of the Australian States (5th ed, University of Queensland Press, Brisbane, 1991) and G Carney, The Constitutional Systems of the Australian States and Territories (Cambridge University Press, Melbourne, 2006), ch 2.) Western Australia was granted responsible government along similar lines in 1890 pursuant to the enabling Imperial statute 53 & 54 Vict c 26 which contained the Western Australian Constitution Act 1889.

THE LEGISLATIVE POWER OF COLONIAL LEGISLATURES General and plenary legislative powers [2.40] The powers of the colonial legislatures in Australia mirrored those granted by the

Imperial Parliament to other more developed colonies within the British Empire in the 19th century. This vesting of legislative power was variously expressed in those provisions which enabled colonial legislatures to legislate for the “peace, welfare [or order] and good government” of the colony or simply, as in the case of Victoria, “in and for” the colony “in all cases whatsoever”. Similar forms of words were standard British usage in enabling Imperial statutes and colonial constitutional enactments. The Privy Council consistently interpreted this “peace, welfare and good government” formula broadly to refer simply to a general plenary legislative power and not as words of limitation which could become the basis for legal challenges to the validity of legislation on the basis that it was not for the “peace, welfare and good government” of the colony. In Union Steamship Co of Australia Pty Ltd v King (1988) 166 CLR 1, the High Court, in a unanimous joint judgment, reviewed the authorities and considered the nature of the power of State parliaments. 72

[2.40]

States

CHAPTER 2

Union Steamship v King [2.50] Union Steamship Co of Australia Pty Ltd v King (1988) 166 CLR 1 at 9 Mason CJ, Wilson, Brennan, Deane, Dawson, Toohey and Gaudron JJ: 9 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 recognised, even in an era when emphasis was given to the character of colonial legislatures as subordinate law-making bodies: R 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. [These cases] decided that colonial legislatures were not mere agents or delegates of the Imperial Parliament. …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 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. … 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 390; Fraser v State Services Commission [1984] 1 NZLR 116 at 121; Taylor v New Zealand Poultry Board [1984] 1 NZLR 394 at 398), a view which Lord Reid firmly rejected in Pickin v British Railways Board [1974] AC 765 at 782, is another question which we need not explore.

[2.55]

Notes&Questions

The High Court appeared to have left open the question whether “rights deeply rooted in our democratic system of government and the common law” could be used as a limitation on the legislative competence of a parliament otherwise vested with plenary power. This particular notion has survived the period of the ascendancy of classical Diceyian notions of parliamentary supremacy. Even though it is a proposition which has not received authoritative acceptance, at least since the Glorious Revolution of 1688 in England, it remains surprisingly resilient. Perhaps there is some comfort in the notion that there might be a deeply rooted higher law which will stand in the way of a parliament determined to pass Acts which are so abhorrent that they offend, at some deep and fundamental level, basic and universal notions of human decency and civility. In the Australian constitutional context, the issue presented itself again for consideration in Durham Holdings Pty Ltd v New South Wales (2001) 205 CLR 399, in which Gaudron, McHugh, Gummow and Hayne JJ appear to have suggested that the recognition of such fundamental rights would be incompatible with s 2(2) of the Australia Acts 1986 (Cth and UK) (at 410) which vested in State parliaments the same legislative competence that the United Kingdom had with respect to the States. Kirby J also appeared to reject any ongoing relevance of such fundamental rights (at 432, although see G Winterton, “Justice Kirby’s Coda in Durham” (2002) 13 Public Law Review 165). Callinan J reserved his position on this question (at 433). (On this question generally, see G Winterton, “Constitutionally Entrenched Common Law Rights: Sacrificing Means to Ends?”, in C Sampford and K Preston (eds), Interpreting Constitutions (Federation Press, Sydney, 1996); L Zines, “A Judicially Created Bill of Rights” [2.55]

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Part I: Introduction

(1994) 16(2) Sydney Law Review 166; TRS Allan, Constitutional Justice: A Liberal Theory of the Rule of Law (Oxford University Press, Oxford, 2001); J Goldsworthy, The Sovereignty of Parliament: History and Philosophy (Clarendon Press, Oxford, 1999), ch 10.) It is therefore unlikely that a fundamental rights principle will prevail as a limitation on State legislative power. Repugnancy to English law and the Colonial Laws Validity Act 1865 (UK) [2.60] The precise scope of the repugnancy limitation on colonial legislatures vis-à-vis English

law was open to varying interpretation. The issue came to a head as a result of the over-zealous use of the limitation by Mr Justice Boothby of the Supreme Court of South Australia to invalidate a number of South Australian statutes. His invalidation of parts of the Real Property Act 1886 (SA) in particular, which sought to introduce the new Torrens Title system, produced quite some consternation in government circles. The South Australian Government eventually sought advice from the Imperial law officers in order “to be relieved from a condition of the gravest constitutional embarrassment”. (E G Blackmore, The Law and Constitution of South Australia (SA Government Printer, Adelaide, 1894), p 64. It is apt to note that Blackmore, on the title page, quoted from Thucydides, The Peloponnesian War, Bk 1, p 34: “Colonists are not sent abroad to be the slaves of those left behind, but to be their equals.”) In response the report of the English Law Officers, Roundell Palmer (later the Earl of Selborne LC) and R P Collier, recommended Imperial legislation to clarify the precise scope of the repugnancy limitation to avoid future confusion, and also perhaps to avoid the embarrassment of colonial governments having again to beseech imperial authorities to rid them of turbulent judges. The result was the Colonial Laws Validity Act 1865 (UK) (28 & 29 Vict c 63). It was an affirmation of the constituent and plenary power of colonial legislatures within the overall context of the legislative supremacy of the Imperial Parliament.

Colonial Laws Validity Act 1865 (UK) [2.70] Colonial Laws Validity Act 1865 (UK), ss 2, 3 and 5 2. Any Colonial Law which is or shall be in any respect repugnant to the Provisions of any Act of Parliament extending to the Colony to which such Law may relate, or repugnant to any Order or Regulation made under Authority of such Act of Parliament, or having in the Colony the Force and Effect of such Act, shall be read subject to such Act, Order or Regulation, and shall, to the Extent of such Repugnancy, but not otherwise, be and remain absolutely void and inoperative. 3. No Colonial Law shall be or be deemed to have been void or inoperative on the Ground of Repugnancy to the Law of England, unless the same shall be repugnant to the Provisions of some such Act of Parliament, Order or Regulation as aforesaid … 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, Power, and Procedure of such Legislature; provided that such Laws shall have been passed in such Manner and Form as may from Time to Time be required by any Act of Parliament, Letters Patent, Order in Council, or Colonial Law for the Time being in force in the said Colony.

74

[2.60]

States

Notes&Questions

[2.80]

1.

2.

CHAPTER 2

Section 2 made it clear that it was repugnancy to an Imperial statute, not a domestic statute or English law, applicable to the colony – “but not otherwise” – which constituted the ground for invalidity of colonial statutes. Section 5 expressly confirmed the power of every colonial “Representative Legislature” over its own constitution. The proviso contained in the last paragraph to s 5 makes provision for what is commonly referred to as “manner and form” constraints. This enabled colonial legislatures to introduce special procedures – eg, special majorities, joint sittings of the houses, a referendum – which had to be observed before a Bill could become law, thus restricting or binding a future parliament. However, the manner and form constraints applied only to laws respecting the “constitution, power, and procedure” of the legislature.

The meaning of repugnancy [2.90] The concept of repugnancy is very similar to the concept of “inconsistency” in s 109 of

the Commonwealth Constitution. In Union Steamship Co of New Zealand Ltd v Commonwealth (1925) 36 CLR 130 (at 148) Isaacs J stated that “repugnancy” is equivalent to inconsistency or “contrariety”. Higgins J, in the same case, also considered its meaning.

Union Steamship v Commonwealth [2.100] Union Steamship Co of New Zealand Ltd v Commonwealth (1925) 36 CLR 130 at 155–156 Higgins J: 155 The object of the Act of 1865 was … 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. This view is supported by the expression that the Act of 1865 was “the charter of colonial legislative independence” (AV Dicey Law of the Constitution, 5th ed, p 99). The British Parliament by the Act of 1865 expressly confined the principle of invalidity for repugnancy to repugnancy between the local law and some definite provision of a British Act extending to the colony; and prevented the local Act from being treated as invalid in all its sections and provisions if it were invalid in one. Hence the words in s 2, “to the extent of such repugnancy, and not otherwise”.

Notes&Questions

[2.110]

The repugnancy provisions of the CLVA continued to bind the Australian colonial legislatures, and later the States, until 1986 when the enactment of the Australia Acts 1986 (UK and Cth) removed the repugnancy provisions. The Australia Act 1986 will be discussed in more detail below. Responsible government in the colonies

Federal Constitutional Law, An Introduction [2.120] K Booker, A Glass and R Watt, Federal Constitutional Law, An Introduction (2nd ed, Butterworths, Sydney, 1998) at [2.14]-[2.17] [2.14] Responsible government, as applied to parliamentary systems modelled on the Westminster system, means that government, though formally carried out in the name of the Crown, in reality is [2.120]

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Part I: Introduction

Federal Constitutional Law, An Introduction cont. conducted by Ministers who are members of parliament. Under responsible government, apart from some special situations where the Crown is said to have reserve powers, the Crown acts on the advice of the Ministers who take responsibility for government and who are accountable to parliament… [2.15] It is difficult to define responsible government succinctly because it is a collection of principles which are part law and part convention and practice. The principles are not static, they evolve as the reality of the conduct of government changes and there are differences in the way responsible government operates in the various governmental systems that are organised on Westminster lines. … In its contemporary form in Australia, responsible government is a system in which a group of parliamentarians who command majority support in parliament form an executive government by being commissioned as Ministers of the Crown. Where the parliament is bicameral the government must command majority support in the Lower House. By convention there is a chief Minister – the Prime Minister in the Commonwealth government, the Premier in State governments and the Chief Minister in the Northern Territory [and ACT] government. The chief Minister is the political head of the government and presides over a body called the Cabinet which makes all the important policy decisions. The Cabinet consists of all the Ministers or an inner core of them. The Ministers, acting in accordance with Cabinet policies, are responsible for executive government in the sense of being in charge of administrative activities and they are responsible to parliament by being accountable for their actions as Ministers and the actions of the public service departments they control. For most purposes, Crown Representatives (the Governor-General, State Governors and the Administrator of the Northern Territory) are figureheads who do not possess any independent discretion in the exercise of authority vested in them. [2.16] … The constitutions under which the colonies acquired self-government contain vaguely worded sections that assume the existence of responsible government. For example, s 37 of the Constitution Act adopted for New South Wales in 1855, gave the Governor the power to appoint “the officers liable to retire from office on political grounds”. This is a nebulous reference to the commissioning of Ministers who are responsible to parliament. Section 18 prohibited members of the Legislative Assembly from holding any office of profit under the Crown but exempted “official members of the Government” including the Colonial Secretary, Colonial Treasurer, Auditor General, Attorney-General and Solicitor General. In other words they could be appointed to salaried positions as Ministers of the Crown and also sit in the Lower House. It is clear from the political circumstances in which the Act was drafted that it was intended to establish offices and institutions suitable for the implementation of responsible government and a system of responsible government was established in New South Wales when the Act came into force. Read in its historical context the Act must be interpreted as implicitly authorising responsible government.

FEDERATION [2.130] The framing of the Commonwealth Constitution, and the establishment of the

Commonwealth of Australia, was the culmination of much thought and public debate on the desirability of creating a federal state from amongst the British colonies in the antipodes. Commercial benefits and defence were major considerations in this regard. The transition from idea to reality received considerable impetus in the 1890s from the Constitutional Conventions which included delegates from the various Australian colonies. The architecture of the future federation was left almost entirely in Australian hands. The transformation of the Australian colonies into States within the new Commonwealth of Australia was achieved when the proclamation was made by Queen Victoria on 17 September 1900 pursuant to s 3 of the Commonwealth of Australia Constitution Act 1900 (UK): “the people of New South Wales, Victoria, South Australia, Queensland, Tasmania and … Western Australia shall be united in a Federal Commonwealth under the name of the Commonwealth of Australia” on and after 1 January 1901. 76

[2.130]

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The States retained a considerable degree of legislative independence. Their legislatures continued to enjoy plenary power, including constituent power, although upon federation they were still subject to the CLVA as was the newly nascent Commonwealth itself. In addition, their legislative competence was made subject to the new Commonwealth Constitution. Section 106 declared that “subject to this Constitution”, the Constitution of each State shall continue as at the establishment of the Commonwealth. Section 109 provided that where 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.” The Constitution, by s 107, sought to preserve the legislative competence of the State Parliaments, providing that: “Every power of the Parliament of a Colony which has become or becomes a State shall, unless it is by this Constitution exclusively vested in the Parliament of the Commonwealth or withdrawn from the Parliament of the State, continue as at the establishment of the States, as the case may be.” The legal status of the States vis-à-vis the Commonwealth [2.140] As the States originated as Crown colonies, a number of issues relating to the legal

status of the States vis-à-vis the Commonwealth are worth considering. (For a concise analysis, see Booker, Glass and Watt (2nd ed, 1998), ch 14 and Stellios (Zines, 6th ed 2015) at 503–509.) Section 106 of the Commonwealth Constitution provides: 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.

This section makes it clear that State constitutions are to be preserved, as are the constituent powers of the States, although now rendered subject to the Commonwealth Constitution. Section 107 of the Commonwealth Constitution provides: Every power of the Parliament of a Colony which has become or becomes a State shall, unless it is by this Constitution exclusively vested in the Parliament of the Commonwealth or withdrawn from the Parliament of the State, continue as at the establishment of the State, as the case may be.

It is thus made clear that existing powers of the States shall continue, although this does not apply to those heads of legislative power which the Constitution now vests exclusively in the Commonwealth Parliament. State laws are rendered inoperative to the extent of their inconsistency with Commonwealth laws pursuant to s 109. Also, State legislative power is rendered subject to limitations which may be implied in the Commonwealth Constitution; but only to the extent that such limitations are applicable to the States (Dawson J in McGinty v Western Australia (1996) 186 CLR 140 at 189). Furthermore, s 107 has not been accepted by the High Court as the basis upon which to establish any principle of reserved State powers. Certain issues have been raised in relation to s 106 and the extent to which it may be a limit on Commonwealth power, for which see the abovementioned references to Booker, Watt and Glass and to Zines. In relation to s 106, Professor Zines (Stellios, Zines (6th ed 2015) at 507–508) has written: Once the general approach to the Engineers’ case is accepted the only way to treat s 106 as a limitation on Commonwealth power is by the artificial reading down of s 106 … In principle, the only reason for such an exercise is the federal nature of the Constitution, namely as a safeguard for the continued existence and independence of the States. Yet, the Court, when faced with this question, has generally relied on implied limitations. The restrictions on Commonwealth power discussed earlier in this chapter are based on the view that the Constitution read as whole predicates the continued existence and independence of the States. It is suggested that if what is regarded as at stake is a federal principle it would be preferable to approach that issue by a direct application of that principle as one embodied in the [2.140]

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Commonwealth Constitution as a whole rather than by endeavouring to eke out the phrase of “Constitution of each State” in s 106 a solution. The substantive considerations should not be bogged down in the process of determining whether a particular matter is or is not part of the State’s “Constitution”, nor should that conceptual issue be used to disguise the fundamental question of State existence and capacity to function. From a textual viewpoint the phrase “subject to this Constitution” in s 106 should be taken as referring to all other provisions in the Constitution, including federal powers that necessarily alter the operation of the State’s Constitution and not as reserving any powers that necessarily alter the operation of the State’s Constitution and note as reserving any powers or immunities to the States. The similar phrase in s 51 should be construed as a reference to all those provisions that are expressed as a restriction of Commonwealth powers. Even if the words “subject to this Constitution” in s 106 are not regarded as referring generally to s 51, they are apposite for ensuring that where the fulfilment of the purpose of a Commonwealth power requires interference with State constitutional rules, the Commonwealth has power to do so, as in cases that may arise under the wartime defence power. This approach was adopted by the High Court with regard to s 51(xxxviii) on the assumption that s 106 might restrict the powers of the Commonwealth (Port MacDonnel Professional Fisherman’s Association Inc v South Australia (1989) 168 CLR 340; Attorney-General (WA) v Marquet (2003) 217 CLR 545). In Port MacDonnel the law clearly affected State Constitutions in the sense suggested, but it was not inconsistent with State independence or its capacity to function as a unit of the federation. The latter was the important issue. Indeed in most cases the considerations that the Court should take into account seem much the same whether one relies on implied restrictions or s 106. The latter provision, however, tends to divert attention away from the basic issue, which is the federal structure of the Constitution and its actual operation. What purpose does s 106 serve if it does not amount to a restriction on federal power? It certainly confirms as an “underlying principle of Australian federalism” (a phrase used by Windeyer J in relation to s 107 [in R v Phillips (1970) 125 CLR 93 at 116] that the structure and powers of the States continue as before, subject to the restrictions and enlargements in the Constitution. It also provides a basis, among other provisions, for inferring the federal nature of the Constitution and the implied restrictions on Commonwealth power arising therefrom. (See Barwick CJ in New South Wales v Commonwealth (1975) 135 CLR 337 at 372 and Murphy J in Bistricic v Rokov (1976) 135 CLR 552 at 566.)

POST-FEDERATION STATE CONSTITUTIONS [2.150] After Federation, State legislatures retained their power to amend their constitutions.

Currently, in all State Constitutions, the legislature consists of the Queen, a popularly elected lower house referred to as a Legislative Assembly or House of Assembly, and, in all States except Queensland, a popularly elected upper house referred to as a Legislative Council. The Queensland Parliament abolished its Legislative Council in 1922 pursuant to the Constitution Act Amendment Act 1922 (Qld). The legal independence of the States was enhanced by the Australia Act 1986 (Cth), with identical legislation being enacted by the United Kingdom Parliament. Each of the States requested the enactment of the Commonwealth legislation pursuant to s 51(xxxviii), as well as requesting the Commonwealth to request and consent to the identical United Kingdom legislation. The Australia Act 1986 contained a number of important provisions affecting the States, including the removal of the repugnancy limitations imposed on State Parliaments by CLVA. Subject to the Commonwealth Constitution, their plenary legislative power was confirmed and they were vested with any legislative powers the United Kingdom Parliament may have exercised in relation to them.

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Australia Act 1986 (Cth) [2.160] Australia Act 1986 (Cth), ss 1 – 15 An Act 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 … 1 Termination of power of Parliament of United Kingdom to legislate for Australia 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. 2 Legislative powers of Parliaments of States (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. 3 Termination of restrictions on legislative powers of Parliaments of States (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. … 5 Commonwealth Constitution, Constitution Act and Statute of Westminster not affected Sections 2 and 3(2) above: (a) are subject to the Commonwealth of Australia Constitution Act and to the Constitution of the Commonwealth; and (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. 6 Manner and form of making certain State laws 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. 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. [2.160]

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Australia Act 1986 (Cth) cont. (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. 8 State laws not subject to disallowance or suspension of operation … 9 State laws not subject to withholding of assent or reservation … 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. 11 Termination of appeals to Her Majesty in Council … 12 Amendment of Statute of Westminster 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 … 15 Method of repeal or amendment of this Act or Statute of Westminster (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 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.

Australia Act 1986 – Some Legal Conundrums [2.170] H P Lee, “Legislative Comment – The Australia Act 1986 – Some Legal Conundrums” (1988) 14 Monash University Law Review 298 at 298–304 (most footnotes omitted) 2. Mechanisms for Enacting the Legislation … 299 The Australia Act 1986 – Some Legal Conundrums The following steps were therefore agreed upon as necessary to implement the agreement to sever the remaining constitutional links between Australia and the United Kingdom Parliament, Government and judicial system. The Parliament and Government of every State would: (1)

Request the Commonwealth Parliament, pursuant to section 51(38) of the Commonwealth Constitution, to enact its Australia Act.

(2)

Request and consent in accordance with constitutional convention to the United Kingdom Parliament enacting its Australia Act.

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Australia Act 1986 – Some Legal Conundrums cont. (3)

Request and consent to the Commonwealth Parliament in turn requesting and consenting to the United Kingdom Parliament enacting its Australia Act. The request and consent of the Commonwealth Parliament to the Australia Act of the United Kingdom is required by section 4 of the Statute of Westminster.

Section 51(xxxviii) empowers the Commonwealth 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.” Given the existence of doubts about this provision the utilisation of alternative mechanisms ensures that the legislation is beyond challenge. The main consequence of using alternative mechanisms is the existence of two Australia Acts, one enacted by the United Kingdom Parliament and the other by the Commonwealth Parliament. Both Acts are identical in all material respects and were proclaimed to come into force simultaneously. 3. Position Prior to the Australia Act 1986 To appreciate the significance of the changes wrought by the Australia Act 1986, the position prior to its coming into force should be considered … [The writer noted that the Statute of Westminster 1931 was made applicable only to the Commonwealth, not the States, and continued:] 300 The key aspects of the Statute of Westminster 1931 were that the CLVA was no longer applicable to the Commonwealth (s 2(1)), that a Commonwealth law was not “void or inoperative” on the ground of repugnancy to a British Act and that the Commonwealth Parliament could repeal or amend British laws extending to the Commonwealth (s 2(2)). It also provided that the United Kingdom Parliament could not legislate in relation to the Commonwealth unless the Commonwealth had “requested and consented” to the enactment (s 4). Section 3 of the Statute of Westminster 1931 is also important for it expressly provides as follows: “It is hereby declared and enacted that the Parliament of a Dominion has full power to make laws having extra-territorial operation”. As the discussion below will indicate, the doctrine of extra-territorial legislative incompetence of the States may be one of the as yet unresolved conundrums arising from the enactment of the Australia Act 1986. The other point to be made at this stage is the important and controversial s 5 of the CLVA, which provided as follows: “… 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 have been passed in such manner and form as may from time to time be required by any Act of Parliament, [301] Letters Patent, Order in Council, or Colonial law for the time being in force in the said Colony”. 4. Changes Arising from the Australia Act 1986 (i) The United Kingdom Parliament

(ii)

The first important change brought about by the Act was the termination of the power of the United Kingdom Parliament to make laws having effect as part of Australian law. This is implicitly provided for in the following terms by s1: … Removal of Limitations on the Legislative Powers of the State Parliaments Section 3 of the Australia Act 1986 is modelled on s 2 of the Statute of Westminster 1931. The CLVA is rendered inapplicable to any law made by the Parliament of a State after the commencement of the Australia Act 1986. In consequence, the restriction which prevented the States from legislating inconsistently with United Kingdom legislation extending to the States is terminated. Subsection 3(2) makes it clear that the common law doctrine of repugnancy is excluded and that State Parliaments can enact legislation repugnant to the laws of England or to existing or future United Kingdom Acts. It is also expressly provided that the powers of the State Parliaments include the power to repeal or amend these United Kingdom Acts insofar as they form part of the law of a State: s 3(2). However, it should be noted that s 3(2) is subject to ss 5 and 6 of the Australia Act 1986. Section 5 qualifies s 3(2) by making the grant or declaration of State legislative power [2.170]

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Australia Act 1986 – Some Legal Conundrums cont. contained therein subject to the Commonwealth of Australia Constitution Act and the Commonwealth Constitution. Subsection 3(2) does not operate so as to give any force or effect to a provision of an Act of a State Parliament that would repeal, amend or be repugnant to the Australia Act 1986, the Commonwealth of Australia Constitution Act, the Commonwealth Constitution or the Statute of Westminster 1931, as amended and in force from time to time. Subsection 3(2) is also subject to s 6 which preserves the substance of s 5 of the CLVA. Thus, a law made after the commencement of the Australia Act 1986 by a State Parliament respecting the “constitution, powers or procedure” of the Parliament shall be of no 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 commence 302 ment of the Act. This provision keeps alive the issue of the powers of a State Parliament in relation to “entrenchment” provisions. The full power to make laws of the State Parliaments is described in s 2(1) as follows: 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. Subsection 2(2) removes any “other limitations on the legislative powers of the States that might exist by reason of their former colonial status”. Subsection 2(2), however, also provides that it does not confer upon any State any capacity that the State did not have immediately before the commencement of the Australia Act 1986 to engage in relations with countries outside Australia. Section 2 is also subject to ss 5 and 6 of the Australia Act 1986. According to the Explanatory Memorandum to the Australia Acts (Request) Bill 1985, s 2(1) corresponds to s 3 of the Statute of Westminster 1931. The conundrum which is posed by s 2(1) arises from the fact that there is a slight difference in wording from s 3 of the Statute of Westminster 1931 which simply provides as follows: It is hereby declared and enacted that the Parliament of a Dominion has full power to make laws having extra-territorial operation. Subsection 2(1) contains the words “for the peace, order and good government of that State.” When the course of decisions in Australia relating to the doctrine of extra-territorial legislative incompetence of the State Parliaments is considered it will be seen that the territorial restrictions on the State Parliaments have been attributed to the “peace, order and good government” formula in the State constitutions. The conundrum that is posed is whether s 2(1) has effectively displaced the doctrine which curbs the legislative capacity of the State Parliaments. Section 4 of the Australia Act 1986 expressly repeals ss 735 and 736 of the United Kingdom Merchant Shipping Act 1894, insofar as they are part of the law of a State. Section 4, which corresponds to s 5 of the Statute of Westminster 1931, makes it necessary for the States to enact special legislation to free themselves from the restrictions of ss 735 and 736 of the Merchant Shipping Act 1894, under which certain State laws on merchant shipping require the confirmation of the Queen acting on the advice of United Kingdom Ministers, or must be reserved for the signification of the Queen’s pleasure. Another restriction on the competence of the State Parliaments which has been terminated relates to those rules governing the disallowance of State laws or the withholding of assent to such laws. Sections 8 and 9 of the Australia Act 1986 put to an end the mechanisms dating from colonial days whereby supervision of the legislation enacted by State Parliament was achieved. 303 Section 8 ensures that a State Act that has been assented to by the State Governor is not subject to disallowance by the Queen. The section also prevents the suspension of operation of a State law pending the signification of the Queen’s pleasure. Subsection 9(1) provides that any law or instrument requiring a Governor to withhold assent from any Bill passed by a State Parliament in accordance with any prescribed manner and form requirement, shall be of no effect. Subsection 9(2) precludes the operation of any law or instrument which requires the reservation of any State Bill for the signification of the Queen’s pleasure. 82

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Australia Act 1986 – Some Legal Conundrums cont. (iii)

Powers and Functions of the Queen and Governors in respect of the States

(iv)

... The most significant change brought about by s 7 is the termination of the position under which the Queen was advised by United Kingdom Ministers, following recommendations by the State Premiers to the Foreign and Commonwealth Office of the United Kingdom Government. The Queen is now to be advised directly by the Premier of a State in relation to the exercise of her powers and functions in respect of the State. ... Termination of Appeals to the Privy Council

(v)

304 The thrust of section [11] is to remove the remaining avenues of appeal from Australian courts to the Privy Council, thus making the High Court of Australia the final court of appeal for all Australian courts. Repeal or Amendment of the Australia Act 1986 or the Statute of Westminster 1931 By virtue of s 15 of the Australia Act 1986, the Act and the Statute of Westminster 1931 in their application to Australia can be repealed or amended only by an Act of the Commonwealth Parliament passed at the request or with the concurrence of the Parliament of all the States. This “unique system” provides for an “entrenchment” of the Australia Act 1986 and the Statute of Westminster 1931. However, an exception is provided for in s 15(3) which envisages the possible exercise by the Commonwealth Parliament of any powers that may be conferred upon it by any alteration to the Commonwealth Constitution made in accordance with s 128 of the Constitution. The insertion of s 15 of the Australia Act 1986 also poses another conundrum, which is dealt with below. ...

PARLIAMENTARY SOVEREIGNTY AND MANNER AND FORM [2.180] The provision in s 5 CLVA that every “Representative Legislature” has full legislative

power with respect to its “Constitution, Powers and Procedure” was made subject to the proviso 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.” That is, a colonial legislature was authorised to enact legislation stipulating that special legislative procedures – “manner and form” legislation – must be followed by a future legislature to effect an amendment to its constitution. Such legislation might stipulate, for example, the requirement of a two-thirds majority in a joint sitting of both houses, or a special majority in each house, or, as in later developments, a majority of electors in a referendum. An example of legislation requiring a particular “form” is legislation requiring express words in order to repeal a provision of the Act. Mere inconsistency in the later Act would be insufficient to effect an implied repeal of the earlier provisions. Being more onerous than the ordinary legislative procedure, such “manner and form” provisions made it more difficult to amend an existing law, thus “entrenching” it. To ensure the efficacy of this entrenchment, it was usually provided in the legislation that the very provision which effected the “manner and form” requirement was itself subject to the same requirement in its repeal or amendment. This is referred to as “double entrenchment”. The original rationale for “manner and form” legislation was to provide a mechanism enabling colonial legislatures to achieve a degree of stability in their constitutional arrangements. (See Lumb (5th ed, 1991), p 120.) Significantly, the proviso to s 5 CLVA, was limited in its application to the “constitution, powers and procedure” of the relevant legislature, and was thus not applicable to legislative provisions dealing with other general subject matters. The validity of the latter would require alternate sources of authority, the existence and nature of which remains a matter of some importance and complexity and will constitute an underlying theme in what follows. Even [2.180]

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though in 1986 the Australia Act 1986 (Cth) and (UK) removed the applicability of the CLVA to laws enacted by the Parliaments of the States, the manner and form provisions of the latter Act were maintained in s 6, which was phrased as a positive declaration (as opposed to a proviso): …[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.

Like its predecessor, it is also limited in its application to laws respecting the “constitution, powers or procedure” (emphasis added) of the relevant legislature. The fact that “or” and not “and” (as in the CLVA) is used is of no present legal consequence. Because consideration is being given to other possible sources of authority for legislation on general subject matter, and because the same limitations as found in the proviso to CLVA, s 5 and s 6 of the Australia Act 1986 may not apply to these other sources, the term “manner and form” will be reserved for the restrictive procedures sourced in these specific provisions. When speaking generally about such procedures, the more general term, “restrictive procedures” (which is to be taken to be inclusive of both procedure and form provisions) will be used, following the lead of Professor Jeffrey Goldsworthy in this regard. (J D Goldsworthy, “Manner and Form in the Australian States” (1987) 16 Melbourne University Law Review 403 at 403.) In resolving the issue of the authority to enact “manner and form” provisions under the Australia Act 1986 and other “restrictive procedures”, fundamental questions about the nature of the sovereignty of parliament arise. These procedures compromise the sovereignty of parliament to the extent that they purport to bind a future parliament. The question must be decided whether the authority to enact restrictive procedures is inherent in the traditional Westminster notion of parliamentary sovereignty or whether it is excluded by it. The traditional Westminster doctrine of parliamentary sovereignty, at least as understood – according to H W R Wade (later Sir William) – by the “orthodox English lawyer, brought up consciously or unconsciously on the doctrine … stated by Coke and Blackstone, and enlarged upon by Dicey” was articulated succinctly by Wade in an oft-quoted article, “The Basis of Legal Sovereignty” [1955] Cambridge Law Journal 172 at 174. It consisted of four fundamental tenets: (a)

(b) (c)

“no Act of the sovereign legislature (composed of the Queen, Lords and Commons) could be invalid in the eyes of the courts” and “it was always open to the legislature, so constituted, to repeal any previous legislation whatever”; “therefore no Parliament could bind its successors”; “the legislature had only one process for enacting sovereign legislation, whereby it was declared to be the joint Act of the Crown, Lords and Commons in Parliament assembled”; and

(d) “in the case of conflict between two Acts of Parliament, the later repeals the earlier.” It is clear that restrictive procedures and “manner and form” legislation are prima facie at odds with (b) above but also with each of the other tenets to a certain degree. As Peter Hanks, referring to Australian State parliaments, noted: The proposition, that Parliament may legislate to implement any policy supported by a majority in each of its component institutions, can be seen to attribute to a majority of the electorate the capacity to set the current policy agenda. However, the proposition that Parliament may be obliged by earlier legislation to follow a complex and restrictive procedure to legislate on certain topics, effectively writes those topics out of the current policy agenda and denies to the 84

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majority of the electorate the capacity to develop and implement, through their elected representatives, policies on those topics (P Hanks, Constitutional Law in Australia (2nd ed, Butterworths, Sydney, 1996), p 132).

While the view of Wade’s “orthodox English lawyer” has certainly been very influential, it is an orthodoxy which has not remained unchallenged. Other views of the nature of parliamentary sovereignty have been articulated which reconcile the sovereignty of parliament and the enactment of restrictive procedures. Interestingly, the catalyst for this reconsideration were the cases which were brought to the Privy Council from colonial or dominion courts. The leading case arose from an appeal to High Court, and thence the Privy Council, from the Supreme Court of New South Wales: Attorney-General (New South Wales) v Trethowan (1931) 44 CLR 394; affirmed [1932] AC 526. Prior to Trethowan, another very significant case was McCawley v The King [1920] AC 691, (1920) 28 CLR 106, which will be extracted first.

McCawley v The King [2.190] McCawley v The King [1920] AC 691; (1920) 28 CLR 106 at 114–125 [This case considered the validity of Queensland legislation which was prima facie inconsistent with the Constitution Act 1867 (Qld). The Constitution Act provided that judges of the Supreme Court be appointed for life, subject to good behaviour. The Industrial Arbitration Act 1916 (Qld) established the Court of Industrial Arbitration, the judges which were entitled to all the rights, privileges, powers and jurisdiction of a Supreme Court justice but were appointed only for seven years, subject to reappointment. It was contended that the Industrial Arbitration Act was in conflict with the Constitution Act in as much as it purported to authorise the appointment of a judge for seven years only. The Privy Council rejected that contention, Lord Birkenhead LC delivering its opinion.] Lord Birkenhead LC: 114 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 115 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 constitutions’ 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. … Unitary forms of government have … exhibited both ingenuity and resource in providing complicated machinery which required adjustment before the nature of the Constitution could be effectively modified. … Their special quantities may perhaps be exhibited as clearly by calling the one a controlled and the other an uncontrolled Constitution as by any other nomenclature. Nor is a Constitution debarred from being reckoned as an uncontrolled Constitution because it is not like the British Constitution, constituted by historic development, but finds its genesis in an originating document which may contain some conditions which cannot be altered except by the power which gave it birth. It is of the greatest importance to notice that where the Constitution is uncontrolled the consequences of its freedom admit of no qualification whatever. The doctrine is carried to every proper consequence with logical and inexorable precision. Thus when one of the learned Judges in the Court below said that, according to the appellant, the 116 Constitution could be ignored as if it were a Dog Act, he was in effect merely expressing his opinion that the Constitution was, in fact, controlled. If it were uncontrolled, it would be an elementary commonplace that in the eye of the law the legislative document or documents which defined it occupied precisely the same position as a Dog Act or any other Act, however humble its subject matter. The fundamental contention of the respondents in this appeal requires the conclusion that the Constitution of Queensland is in the sense explained above a controlled Constitution. … [I]t is important at the outset to notice that the respondents do not find themselves in a position which they [2.190]

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McCawley v The King cont. would occupy under any genuinely controlled Constitution. ... In such a case, confronted with the objections by which they are met in this appeal, they would have no difficulty in pointing to specific articles in the legislative instrument or instruments which created the Constitution, prescribing with meticulous precision the methods by which, and by which alone, it could be altered. The respondents to this appeal are wholly unable to reinforce their argument by any such demonstration. And their inability has involved them in dialectical difficulties which are embarrassing and even ridiculous. They are, for instance, driven to contend – or at least they did in fact contend – that if it were desired to alter an article of the Constitution it was in the first place necessary to pass a repealing Act; and in the second place by a separate and independent Act to make the desired change effective. … 117 Their Lordships are clearly of opinion that no warrant whatever exists for the views insisted upon by the respondents, and affirmed by a majority of the Judges in the Courts below. It was not the policy of the Imperial Legislature, at any relevant period, to shackle or control in the manner suggested the legislative powers of the nascent Australian Legislatures. Consistently with the genius of the British people, 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. … 120 But although the matter would seem to the Board to be extremely plain, it is none the less evident that in this, and in other comparable cases, doubts did in fact arise. [Their Lordships then made reference to the circumstances leading to the enactment of the CLVA, confirming that plenary legislative and constituent power had been given to colonial legislatures subject only to repugnancy to Imperial legislation and continued:] … 125 The Act of 1867 has no such character as it has been attempted to give it. 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 case as it is raised in the issues now under appeal. It follows, therefore, that sec 6 of the Industrial Arbitration Act 1916 of 1916 was not ultra vires. The Legislature was fully entitled to vary the tenure of the judicial office.

Notes&Questions

[2.200]

Accordingly, Queensland legislation enacted subsequently to the Constitution Act, and which was inconsistent with particular provisions thereof, impliedly repealed those inconsistent provisions. The Privy Council was careful to point out that had there been in place “manner and form” provisions, it would have been necessary to comply with these before any relevantly affected Bill could become law. The Privy Council observed that s 9 of the Constitution Act did prescribe a two-thirds majority in both houses to make effective legislation altering the constitution of the Legislative Council. Because no such relevant procedures were found to exist in the present case, the law was held valid. For a detailed account of this case and its background, see N Aroney, “Thomas McCawley v The King” in Winterton (2006), ch 3.

Attorney-General (NSW) v Trethowan [2.210] Attorney-General (NSW) v Trethowan (1931) 44 CLR 394. [This case concerned the validity of an amendment to the Constitution Act 1902 (NSW), originally enacted in 1929, which sought to introduce s 7A which provided: 1.

The Legislative Council shall not be abolished nor, subject to the provisions of subsection (6) 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) of this section 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.

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Attorney-General (NSW) v Trethowan cont. 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 …

Section 7A thus sought to effect a “double entrenchment” of the constitutional status of the Legislative Council: This “double entrenchment” measure was introduced by the conservative parties then in government to protect the Legislative Council from abolition by a future Labor Government. When Labor did regain government in 1930, s 7A having been enacted, it again attempted to abolish the upper house but without recourse to the special procedure contained in s 7A. Although the two abolition Bills were passed by both houses of Parliament, one to repeal s 7A and another to abolish the Council, these were sought to be presented for royal assent without reference to the electors in a referendum.Two members of the Legislative Council brought an action in the Supreme Court of New South Wales against the President of the Legislative Council and the Ministers of the Crown seeking a declaration that the “manner and form” procedures must be complied with. The plaintiffs succeeded in obtaining an interim injunction preventing the presentation of the Bill for royal assent. The defendants appealed to the High Court, which dismissed the appeal by a majority 3 to 2 (Rich, Starke and Dixon JJ, Gavan Duffy CJ and McTiernan J dissenting), upholding the validity of the legislation and requiring compliance with it.] Rich J: 417 Section 5 of [the Colonial Laws Validity] Act confers upon representative legislatures in the Dominions full power to 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. … It is the final and authoritative expression of every colonial representative legislature’s power to make laws respecting its own constitution, powers and procedure. 418 … I regard it as clear that in so far as s 5 enables the Legislature of New South Wales to fetter, restrain, or condition the exercise of its power of constitutional alteration, no prior statute of the Imperial Parliament can operate to enable it to ignore or set at naught any restraint, fetter, or condition it has seen fit to impose in the exercise of that power. On the other hand, in so far as s 5 confers a power of constitutional alteration which it does not authorize the Legislature so to fetter, restrain, or condition, that power may be exercised in complete disregard of any fetter, restraint, or condition which may have been attempted. How far, then, does s 5 permit of constitutional alterations which have the effect of controlling the future action of the Legislature? Two methods of controlling the operations of the Legislature appear to be allowed by the express terms of the section. 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 Legislature of New South Wales is not sovereign, and no analogy can be drawn from the position of the British Parliament. The question is one of construction, and not of general reasoning as to the inherent right of a sovereign legislature to undo all that it has done. The first question is whether subs 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. I take the word “passed” to be equivalent to “enacted.” The proviso is not dealing with narrow questions of parliamentary 419 procedure. … In my opinion the proviso to s 5 relates to [2.210]

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Attorney-General (NSW) v Trethowan cont. 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 subs 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. It was said, however, that the definition of “colonial legislature” in s 1 of the Colonial Laws Validity Act 1865 confines the signification of that term to the authority competent to make laws for the Colony upon general matters, and that if upon matters in general the two Houses with the assent of the Sovereign could legislate, s 5 gave them the power of constitutional amendment in spite of the attempt to incorporate the electorate in the legislative system for the purpose of particular legislation. But no reason appears to exist for applying the definition of colonial legislature in such a manner. If the legislative body consists of different elements for the purpose of legislation upon different 420 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. It is enough to turn to the Commonwealth of Australia Constitution Act to find in s 128 of the Constitution the prototype of s 7A. The electors are called upon to approve or not of a certain class of Bill. In so doing they discharge a function of lawmaking. It is not necessary for them to have a power of altering or amending a proposal submitted to them. According to the practice of the Legislature of New South Wales, the Legislative Assembly will not proceed further if the Council amend a money-bill. In the Federal Parliament the Senate has no power to amend money-bills (s 53 of the Commonwealth of Australia Constitution). It must accept or reject a Bill. But when it has expressed its approval or disapproval it has discharged its function as a legislative body. … 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. McCawleys Case [[1920] AC at 703, 704: 28 CLR at 114, 115] establishes that there is no difference in this respect between a unitary 421 and a federal system. Either may be rigid and controlled or flexible and uncontrolled. … In my opinion, for the reasons given the constating instrument enabled that Legislature to introduce the referendum as such a mode because it constitutes a manner and form of legislation and includes the electorate as an element in the legislative authority in which the power of constitutional alteration resides. [His Honour concluded that neither of the Bills could be presented for royal assent until approval of the majority of the electors and dismissed the appeal.] Starke J: 422 Much reliance was placed upon the sovereignty or omnipotence of Parliament, and the undoubted rule that “the Imperial Parliament cannot bind itself: it can fetter itself as much as it pleases, but it can cut its fetters asunder at pleasure”. But the Parliaments of the Dominions or Colonies are not sovereign and omnipotent bodies. They are subordinate bodies; their powers are limited by the Imperial or other Acts which create them, and they can do nothing beyond the limits which circumscribe those powers. Yet they are not agents or delegates of the Imperial Parliament, and within their limits they have as plenary powers of legislation, as large and of the same nature, as the Imperial Parliament itself (R v Burah (1878) 3 App Cas 889 at 904). Moreover, the Imperial Acts conferring constitutions upon the 423 Dominions or Colonies frequently – as has been done in the case of New South Wales – confer constituent powers upon their legislatures, that is, powers of making laws effecting changes in the constitutions. Such laws might make the particular constitution more flexible or they might make it more rigid. [After outlining and stating the effect of the Imperial enabling legislation and consequent New South Wales legislation, as well as the effect of CLVA, his Honour continued:] … The Constitution Act 1902 and its amendments, including s 7A were passed by 88

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Attorney-General (NSW) v Trethowan cont. the Legislature of New South Wales pursuant to these powers, and are colonial laws in force in the Colony within the meaning of the Colonial Laws Validity Act 1865. And it may be noted that the Constitution Act 1902 (s 7) preserved the power of the Legislature to alter the laws for the time being in force concerning the Legislative Council, subject to certain restrictions in the proviso; s 7A prescribed a further restriction. The greater the constituent powers granted to the Legislature, the clearer, it seems to me, is its authority to fetter its legislative power, to control and make more rigid its constitution. But, however that may be with regard to the Act 18 & 19 Vict c 54 and the Constitution Bill scheduled to that Act, the proviso to s 5 of the Colonial Laws Validity Act 1865 puts the matter, in my opinion, beyond 424 doubt. … Consequently, in my opinion, this appeal should be dismissed. Dixon J: 425 … This question must be answered upon a consideration of the true meaning and effect of the written instruments 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, which gives to the Imperial Parliament its supremacy over the law. … 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 426 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. It is true that these constituent powers were meant to give to the constitution of New South Wales as much of the flexibility which in Great Britain arises 427 from the supremacy of Parliament as was thought compatible with the unity of the Empire, the authority of the Crown and the ultimate sovereignty of the Imperial Parliament. But this consideration, although generally of importance, affords small help in a question whether the constituent authority of a legislature in a Dominion suffices to enable it to impose a condition or a restraint upon the exercise of its power. 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 it 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 by law 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. … [2.210]

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Attorney-General (NSW) v Trethowan cont. 429 It was a declared object of Act [the CLVA] to remove doubts respecting the powers of colonial legislatures and these questions depend upon considerations out of which such doubts arose. … This provision both confers power and describes the conditions to be observed in its exercise. It [s 5 CLVA] authorizes a representative legislature to make laws respecting its own constitution, its own powers and its own procedure. This authority does not extend to the executive power in the constitution. But 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 430 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 power 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 powers, 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 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. How far is the power which it gives of this character? In other words, how far does s 5 allow a constituent legislature to adopt a rigid constitution? There is no logical reason why the authority conferred over its own powers should not include a capacity to diminish or restrain that very authority. But, in giving every representative legislature the power to make laws respecting its own powers, s 5 provides not only that the power shall subsist, but also shall be deemed at all times to have subsisted. Considered apart from the proviso, the language in which this provision is expressed could not reasonably be understood to authorize any regulation, control or impairment of the power it describes. It does not say that the legislature may make laws 431 respecting its own powers including this power. But the proviso recognizes that the exercise of the power may to some extent be qualified or controlled by law. It describes the kinds of legislative instrument by which this may be done, and, with Acts of the Imperial Parliament, letters patent and orders in council, it includes a colonial law for the time being in force in the Colony. … The extent is limited to which such a law may qualify or control the power to make laws respecting the constitution, powers and procedure of the Legislature. It 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” (sc, 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 1865. No requirement is 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 90

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Attorney-General (NSW) v Trethowan cont. 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 432 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. … It could not be denied that submission to and approval by the electorate, if required in order that a proposal may become law, would aptly and properly be described as part of the manner in which the law must be made. 433 … Upon this interpretation a full constituent power is given to the representative legislature, but it may determine what shall be necessary to constitute an exercise of that or any other legislative power. For these reasons I think s 7A is valid and effective, and the appeal should be dismissed.

Notes&Questions

[2.220]

1.

For a detailed account of this case and its background see J Goldsworthy, “Trethowan’s Case” in Winterton (2006), ch 4.

2.

Apart from CLVA s 5, to what extent was consideration given to other possible sources authorising restrictive procedures? Note in particular the remarks of Rich J (at 419–420) in relation to the reconstitution of the legislature and Dixon J’s hypothetical relating to the United Kingdom Parliament (at 426). (See Note 3 below.) Rich J (at 418) stated that: [t]wo methods of controlling the operations of the Legislature appear to be allowed by the express terms of the section [CLVA, s 5]. 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. (Emphasis added.)

He continued (at 419): … if what is done under subs (6) [of s 7A] 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. (Emphasis added.)

3.

His Honour appeared to recognise the existence of an independent basis (of CLVA, s 5) for enacting restrictive procedures if the restrictive procedure could be characterised as a reconstitution of the legislature. His Honour would appear to have regarded such a reconstitution as valid, even if it did not come within the terms of the proviso to s 5. Thus, with respect to the abolition of the Legislative Council and the amendment of s 7A, the special procedure was capable of being regarded as just such a reconstitution and therefore permissible on that ground. The reconstitution ground identified by Rich J constitutes the first major alternative source of authority for the enactment of restrictive procedures and will be examined in more detail below. Rich J did not receive express support on this point from the other justices, although Dixon J did entertain the possibility of judicial examination of the issue when he raised a hypothetical situation involving the United Kingdom Parliament (at 426) in the preceding extract. Dixon J did not express his final view as it was unnecessary for the purpose of resolving the issue in the case. He simply stated (at 426) that “[t]his principle, from its very nature, cannot determine the character or the operation of the [2.220]

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constituent powers of the Legislature of New South Wales which are the result of statute.” Would this need to be qualified following the enactment of s 2(2) of the Australia Act 1986? 4.

Would s 5 of the Constitution Act 1902 (NSW), which gives a plenary power to the State legislature to make laws for the “peace, welfare, and good government of New South Wales in all cases whatsoever” have constituted sufficient authority to enact restrictive procedures independently of CLVA, s 5?

5.

How significant was the “double entrenching” provision contained in s 7A(6)? Without it, would there be anything to prevent the New South Wales Parliament from simply repealing s 7A by ordinary legislative procedure, and then proceeding to abolish the Legislative Council also by ordinary legislative procedure?

6.

Could the legislature simply abolish the Council by an Act to that effect, and without expressly repealing s 7A, by simply relying on the doctrine of implied repeal? That is, could it be argued that, being a later Act, the abolition act impliedly repealed the “manner and form” provision by virtue of its inconsistency with it?

7.

The defendants appealed unsuccessfully to the Privy Council ((1932) 47 CLR 97; [1932] AC 526). Delivering the judgment of the Judicial Committee, Lord Sankey LC regarded the words “manner and form” in CLVA, s 5 as being sufficiently broad to cover the procedures provided for by s 7A, including the double entrenching provision contained in subs (6) thereof (at 540). Because the Bill repealing s 7A did not comply with the manner and form prescribed by the section, it could not be valid. Therefore, the Bill purporting to abolish the Council was also invalid.

8.

Note the remarks of Dixon J (at 429–430) in relation to what is meant by laws relating to “constitution, powers and procedures”.The dissenting justices, Gavan Duffy CJ and McTiernan J, held that s 7A(6), by effecting a double entrenchment, was not in substance a “manner and form” provision. Rather, it was a provision which deprived the legislature of power to amend or repeal s 7A because, ultimately, this was made dependent on the electors at a referendum. Such a deprivation of legislative power was outside the scope of the proviso to CLVA, s 5.

Attorney-General (NSW) v Trethowan [2.230] Attorney-General (NSW) v Trethowan (1931) 44 CLR 394 at 441–443 McTiernan J: 441 The Legislature of New South Wales may, under s 5 of the Colonial Laws Validity Act 1865, restore any power to its fullest extent, which it has legislated to 442 diminish. If subs 6 of s 7A had not been enacted, no question would have arisen as to the power of the Parliament to enact a law to repeal s 7A by the process or in the form in which laws are passed through the two Houses and assented to by the Governor in the name of His Majesty, or, if it would be necessary in the case, are reserved by the Governor for the assent of His Majesty and are assented to by His Majesty. Subsection 6 diminishes the power of the Legislature to repeal or amend s 7A. The sub-section assumes to require that after the passage of a Bill to repeal or amend the section through both Houses the Legislature must take no further step in enacting the Bill into law for at least two months. If the persons designated by the section, who are outside Parliament, do not approve of the Bill, the Legislature is prevented from resuming the process of enacting the Bill into law and the Bill lapses. In my opinion, therefore, subs 6 of s 7A is not in substance a law dictating “manner”: it is in substance a law depriving the Legislature of power. The words of the section measure the extent to which the power of the Legislature is cut down. It renders the King, the Legislative Council and the Legislative Assembly assembled in Parliament powerless to repeal the section unless an external body intervenes and 92

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Attorney-General (NSW) v Trethowan cont. approves of the repeal. In my opinion the Legislature, consisting of its three constituent elements in Parliament assembled, may, under s 5 of the Colonial Laws Validity Act 1865, resume the power to repeal s 7A. ... The label “manner” does not conclude the matter: the true nature of the law may be disguised. If a law were made requiring that the draft of any alteration which a testator wished to make in his will must be submitted to the vote of his next-of-kin, and that the testator should not execute the new testamentary instrument until a majority of the next-of-kin had by a secret ballot approved of it, and if the 443 majority disapproved, the proposal of the testator to alter his will could not proceed any further, such an enactment would clearly be a law depriving the testator of testamentary power. It may be aptly described as a law instituting a new mode of altering a will, but not a law providing a manner in which a testator should exercise his testamentary power. I do not construe the proviso to s 5 of the Colonial Laws Validity Act 1865 as conferring power on a colonial legislature to enact a law prescribing a manner and form, which in effect destroys the plenary powers given by the section to the said legislature in its capacity as a representative legislature. In my opinion the position of the legislature in relation to subs 6 would be comparable with the position of a testator under such a law as has been mentioned, if that law were subject to some superior law protecting the testamentary capacity of the testator. Section 5 of the Colonial Laws Validity Act 1865 is an overriding charter which keeps the legislature continuously supplied with plenary power to make laws respecting its own constitution, powers and procedure, and no Act of the legislature can destroy or permanently diminish the authority which it derives from the charter.

[2.240]

Notes&Questions

1.

Although the majority rejected McTiernan J’s view that s 7A was in substance a law which deprived the legislature of power, and thus not a “manner and form” provision, to what extent did they take into account his fundamental proposition that such a deprivation might occur under the guise of a “manner and form” provision? What if a “manner and form” provision was so onerous as to make it effectively impossible ever to repeal the doubly-entrenched Act, thus depriving parliament of legislative power? What if a special majority – set at a very high percentage level – of the electorate at a referendum was required before the Bill could be presented for royal assent? At what point does a “manner and form” provision, or indeed a restrictive procedure more generally, become a deprivation of legislative power?

2.

The point raised by McTiernan J is significant because, whilst the proviso to CLVA, s 5 does provide for “manner and form” provisions, the first part of that section confirms the plenary and constituent legislative power of the States. Professor Goldsworthy has pointed out that this is a “continuing constituent power”: “it was a ‘continuing’ power because the legislature had at all times to be deemed to have had it – ie, even when ignoring or overriding a restrictive procedure – and because the legislature was unable to abdicate or restrict it by amending or repealing s 5 (it being part of an Imperial Act applying to New South Wales by paramount force).” (Goldsworthy (1999), p 405.) In Attorney-General Trethowan, of course, this was made subject to the “manner and form” proviso in that section, which, as Goldsworthy noted, Dixon J referred to as “superior and indestructible” (at 430) and McTiernan J (at 443) referred to as “an overriding charter which keeps the legislature continuously supplied with plenary power to make laws respecting its own constitution, powers and procedure.” [2.240]

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3.

4. 5.

The “continuing constituent power” of the State Parliaments has been maintained by the Australia Act 1986. This is because s 2(2) has invested the State Parliaments with “all the 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.” The “manner and form” exception contained in the proviso to s 5 CLVA is now maintained in s 6, which may provide the only way that the continuing constituent power of the State parliaments can be regulated. This continuing constituent power cannot be repealed or amended by a State Parliament (Australia Act 1986, ss 5(b) and 15) and therefore imposes a limit on the extent to which restrictive procedures will be regarded as valid. Gavan Duffy CJ held that s 7A was a valid enactment, but that it could simply be repealed in the normal way. Examples of “form” legislation were mentioned above relating to provisions requiring that subsequent legislation expressly amend or repeal earlier legislation, or that it expressly state that it is operative notwithstanding earlier legislation. “Manner” legislation is rather more varied. Professor Winterton has summarised the main examples: [F]or a variety of reasons, Parliament may require legislation on a particular subject to be enacted by specified majorities in the legislative Houses, may require approval at a referendum, or the approval of another body prior to the enactment of certain legislation, or may even establish a new legislature with exclusive power to enact particular laws. Other “manner” provisions are designed to resolve conflicts between the two legislative Houses; such legislation may provide for a joint sitting of both Houses, or may enable a Bill to become law upon the assent merely of the lower House and the Crown. If Parliament wishes to secure the “manner and form” provision against repeal by a simple majority in both Houses it may resort to the device of “double entrenchment”, whereby the “manner” or “form” provision itself can be amended or repealed only by legislation enacted in the prescribed manner or phrased in the specific form. (Winterton, “Can the Commonwealth Parliament Enact “Manner and Form” Legislation” (1980) 11 Federal Law Review 166 at 171–172.)

Parliamentary sovereignty [2.250] As alluded to above, some consideration should be given to the question whether a

restrictive procedure, to use the generic term, could nevertheless be adopted without reliance on the currently relevant provision, s 6 of the Australia Act 1986, adapting the proviso to s 5 CLVA. The reconstitution of parliament was mentioned above as one alternative. The first question to be considered is whether there is inherent in the Westminster doctrine of parliamentary sovereignty a sufficient source of authority for the enactment of restrictive procedures. This issue is directly relevant to State parliaments for, even though they are the statutory progeny of the United Kingdom Parliament, with their sovereignty limited in the various ways abovementioned, they remain Westminster-style parliaments in relation to which traditional British notions of parliamentary sovereignty are pertinent. This remains the case even though their legislative competence presently remains subject to the Commonwealth Constitution and the Australia Act 1986. Moreover, the nature of the sovereignty of the Westminster Parliament is expressly made relevant by s 2(2) of the Australia Act 1986. At its most succinct, the doctrine of parliamentary sovereignty states that the law is whatever the “Queen in Parliament” enacts. This rule is regarded as fundamental, referred to as the “British grundnorm” (G Winterton, “The British Grundnorm: Parliamentary Supremacy ReExamined” (1976) 92 Law Quarterly Review 591) or, the ultimate “rule of recognition” (HLA Hart, The Concept of Law (Clarendon Press, Oxford, 1961), p 145). However, whilst there is little disagreement as to the fundamental nature of this doctrine in the Westminster 94

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tradition, what this fundamental status entails in terms of the content of the doctrine has been the subject of considerable disagreement between two main schools of thought. According to one view, based on the classic work of AV Dicey (Introduction to the Study of the Law of the Constitution (10th ed, 1959), pp 39-40) and championed by leading British constitutional lawyers such as HWR Wade ((1955), p 190) and O Hood Phillips (O Hood Phillips and P Jackson, Constitutional and Administrative Law (6th ed, Sweet & Maxwell, London, 1978), pp 84-91, but see also pp 55-56) the doctrine is so fundamental that it cannot be altered even by Parliament itself. Accordingly, the United Kingdom Parliament could not fetter or limit its successors by restrictive procedures, or a fortiori in relation to the substantive content of legislation, given that Parliament has an inviolable competence to amend or repeal all legislation pursuant to its normal procedures. Professor HLA Hart, in his seminal work The Concept of Law ((1961), (p 145) referred to this conception of parliamentary sovereignty as a “continuing” sovereignty. (Amongst proponents of this view, there is disagreement – not presently relevant – as to whether it permits an abdication of sovereignty by Parliament.) This view has been challenged by the school of thought which regards sovereignty as “selfembracing”, again using the terminology of Hart. It is based on the view that the sovereignty or supremacy of Parliament is a rule of the common law. As such, like other rules of the common law, it is a rule which can simply be overridden and amended by Parliament. The leading proponent of this view has been Sir Ivor Jennings (WI Jennings, The Law and the Constitution (5th ed, University of London Press, London, 1959), ch IV). In relation to this “self-embracing” view of sovereignty, the question arises as to whether Parliament may impose substantive and/or procedural restrictions on future Parliaments, or whether the fetters can be only procedural. The latter view is certainly the less controversial, although also the less consistent with its own underlying logic, as will be discussed below. Parliament may thus bind its successors by reconstituting itself and vesting in that reconstituted body the power to amend or repeal specific classes of legislation. Restrictive procedures are thus regarded as a form of a reconstitution of Parliament, permitted by these conceptions of the nature of parliamentary sovereignty. (See also W Friedmann, “Trethowan’s Case, Parliamentary Sovereignty, and the Limits of Legal Change” (1950) 24 Australian Law Journal 103.) Whilst support can be found for each of these positions in scholarly writing and judicial exegesis, the “self-embracing” view, at least as so far as restrictive procedures are concerned, has gained considerable ground on the classical Diceyian view. As noted by Professor Winterton, (in Winterton (1980) at 176 (most citations omitted)): [T]he orthodox interpretation of parliamentary supremacy has been under increasing challenge since the early 1950s when, in the aftermath of Harris v Minister for the Interior ([1952] (2) SA 428 (AD)), British constitutional lawyers began to realise that a “sovereign” legislature need not always be constituted in the same way. A preponderance of academic opinion now supports the view that the rule of parliamentary supremacy is “self-embracing”, at least as to procedural requirements, so that Parliament, in enacting legislation, is obliged to obey current law regarding the procedure or “manner and form” of legislating, which it may, of course, alter, but only by enacting legislation in the presently stipulated “manner and form”. [In Harris, the South African Court of Appeal held that the South African Parliament could enact binding restrictive procedures – in the instant case, a joint sitting of both Houses requiring a two thirds majority. The decision was significant because the South African Parliament was sovereign, given that the CLVA no longer applied to it following the Statute of Westminster.]

This was explored in detail by Professor Winterton in the following article in the Law Quarterly Review (relevantly extracted).

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The British Grundnorm: Parliamentary Supremacy Re-examined [2.260] G Winterton, “The British Grundnorm: Parliamentary Supremacy Re-examined” (1976) 92 Law Quarterly Review 591 at 591–613 (footnotes omitted) I. Introduction 591 The “grundnorm” (if one is a Kelsenian) or the “ultimate rule of recognition” (if one is Hartian) of the British constitution is that the supreme legislative power rests in the Queen in Parliament, comprised – at least at present and for most purposes – of the House of Commons, House of Lords and the Queen, theoretically sitting 592 together but in fact sitting separately. This rule was established during the 18th century when the political theories of Hobbes and Bodin were in vogue, with the result that over the years the “ultimate rule of recognition” has more frequently been stated by such slogans as “Parliament is sovereign” or “Parliament is omnipotent.” In fact, in large measure slogans were employed to cover the fact that the real nature of the limits of Parliament’s legislative power was not understood; fortunately, Britain’s history since the “Glorious Revolution” of 1688 has been both peaceful (internally) and prosperous, with the result that questions as to the limits of the constitution could be virtually ignored. The law relating to the powers of Parliament derives from obiter dicta of judges and the writings of jurists and, hence, the relevant rules are usually classified as rules of “common law.” In reality, they are sui generis; it is by no means conceded that Parliament can alter these rules as it can other rules of the common law and it would only exacerbate the confusion about the nature of parliamentary supremacy if any importance is attached to the fact that these rules are classified as part of the “common law.” There are essentially two problems concerning the nature of the British constitution. First, does Parliament’s power to legislate on any subject include the power to limit the area of competence or jurisdiction of future parliaments?: to adopt the phraseology of Professor Hart, is the supremacy of Parliament “continuing” or is it “self-embracing” (HLA Hart, The Concept of Law (1961), p 146)? If the former, each Parliament will have exactly the same powers as its predecessor; it will be able to legislate on every subject bar one – it will not be able effectually to restrict the area of 593 legislative competence of future Parliaments. There are two aspects to “self-embracing” supremacy, and we shall consider both: while Parliament may be unable to restrict the substantive power of future Parliaments, it may be able to impose procedural restrictions on them. Alternatively, it may be able to impose any restrictions whatever – substantive or procedural – on future Parliaments. If substantive restrictions are imposed, it would no longer be realistic to speak of such restricted Parliament as “omnipotent” – although it may still be “supreme” in the sense that no body is superior to it in legislative competence. But such terminological questions are, ultimately, irrelevant. Secondly, if Parliament is able to impose limitations on itself do courts have jurisdiction to review the validity of subsequent legislation? … III Parliamentary Supremacy: Three Interpretations 596 The dichotomy between “continuing” and “self-embracing” parliamentary supremacy has led to three interpretations: 597 1.

The composition of Parliament, the manner and form in which it exercises its power and the limitless ambit of its power are the subject of a “fundamental,” unalterable rule.

2.

Parliament can change its procedure and the manner and form in which it legislates, but cannot impose limits on the content of legislation.

3.

The rule of parliamentary supremacy is totally “self-embracing” ie it can be amended by Parliament in any respect whatever.

A. Substantively and Procedurally “Continuing” Supremacy 1. The Doctrine: This view, which has commended itself to some of Britain’s leading constitutional lawyers, is, supposedly, a realistic assessment of the actual political situation. Parliament, it is asserted, is politically unable to bind itself in any way, and therefore, as the ultimate rule of law or grundnorm is a reflection of political reality, the supremacy of Parliament must be “continuing”. This is clearly the 96

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The British Grundnorm: Parliamentary Supremacy Re-examined cont. perspective of Professor H L A Hart (ibid, p 146). Although Professor Dicey never explicitly stated that the supremacy of Parliament was, in all respects, “continuing”, his writings leave a clear impression to that effect; (AV Dicey, The Law of the Constitution (10th ed, 1959), p 68) this opinion is certainly adopted by his disciples, led by Professor H W R Wade. Professor Wade’s conclusion (HWR Wade, “The Basis of Legal Sovereignty” [1955] Cambridge Law Journal 172) that Parliament cannot alter the rule of parliamentary supremacy in any way is derived, as it must be, from an assumption that the rule must be one of “continuing” supremacy; in other words, the argument is circular. Wade begins his analysis by noting that “the rule enjoining judicial obedience to statutes is one of the fundamental rules upon which the legal system depends” (ibid, 187). He then quotes Sir John Salmond’s well-known pre-Kelsen recognition that there must be an ultimate rule of law the origin of which is “historical only, not legal”. From this observation – which is neutral so far as the “continuing” or “self-embracing” dilemma is concerned – Wade immediately draws his conclusion that in law the “sovereignty” of Parliament must be “continuing” 598 as to both substance and procedure: “Once this truth is grasped, the dilemma is solved. For if no statute can establish the rule that the courts obey Acts of Parliament, similarly no statute can alter or abolish that rule. The rule is above and beyond the reach of statute, as Salmond so well explains …” (ibid, 187. This, with respect, does not follow. Here Wade makes his assumption that “sovereignty” must be “continuing”). In essence, Wade’s analysis amounts to an assertion that in actual fact parliamentary supremacy is “continuing”. Unfortunately, he seeks to suggest that the opposing view is anything more than an alternative (and, in his view, wrong) mode of looking at the same political facts. Is Parliament able to impose procedural or “manner and form” limitations upon itself? “Parliament”, said Dicey, “means … the Queen, the House of Lords, and the House of Commons …” (Dicey, p 39) but he did not state whether it must always mean these three. It seems clear, however, that the neo-Diceyians, especially Wade, (Wade, p 190) do believe the present composition of Parliament and the manner and form of the exercise of its legislative power to be unalterable by Parliament. Moreover, there are some judicial dicta to the same effect. (See South-Eastern Drainage Board (S Aust) v The Savings Bank of S Aust (1939) 62 CLR 603, 633 (Evatt J); Ellen Street Estates Ltd v Minister of Health [1934] 1 KB 590, 597 (Maugham LJ, obiter); McCawley v The King [1920] AC 691, 705–706 (Lord Birkenhead LC, obiter).) Although the second formulation of the rule of parliamentary supremacy offers Parliament greater flexibility so far as its procedure and the manner and form of legislating are concerned, both interpretations of parliamentary supremacy ensure that there is no 599 legislative vacuum. From the point of view of national policy, it is important that Parliament be unable to create an area over which it may not legislate; even in countries with “controlled” constitutions, such as the United States, Canada and Australia, the constitution can be amended – at least in most respects – so that there is virtually no area which is a permanent legislative vacuum. Conversely, however, the calcification of rules of law into “fundamental”, unchangeable rules has its own danger, for the process, once begun, may spread, resulting in areas of legislative vacuum. It can be argued that the supremacy of Parliament is only one of a number of very basic conceptions of British constitutional law. For centuries, and certainly at the time of the 1688 revolution, the concept of practically “inalienable” personal liberties has been a very strong feature of the British constitution: it is implicit in the British concept of the Rule of Law, and has led to the doctrine of natural justice in administrative law, as well as the rules for interpreting statutes so as not to threaten individual liberty. Moreover, in the United States, belief in ancient Anglo-Saxon liberties, recognised by Magna Carta, embodied in the common law, and allegedly shown to be inalienable by John Locke, played a vital role in both the argument for a Bill of Rights and the actual framing of the document. In fact, the Ninth Amendment to the United States Constitution has been regarded by some as a recognition that the rights guaranteed by the Bill of Rights predate that document and do not owe their existence to it. There is, therefore, a strong argument that if one basic concept of the British constitution is “fundamental”, why should others 600 not likewise be “fundamental” and unalterable? Nevertheless, there is no reason why an all-or-nothing approach should be adopted for, to adopt Justice Holmes’ aphorism, the life of the law has been experience, not logic. If, as appears to be the case, it is still [2.260]

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The British Grundnorm: Parliamentary Supremacy Re-examined cont. uncertain which of the three formulations of the rule of parliamentary supremacy should be adopted, the policy considerations mentioned here must be taken into account. 2. Abdication of Sovereignty: Dicey saw his theory of “parliamentary sovereignty” as an explanation of the political reality of Great Britain; hence, his theory had to take into account those occasions on which, contrary to his maxim that Parliament cannot bind its successors, Parliament had sought to do just that – for instance by giving independence to Ireland and America. Dicey, accordingly, sacrificed consistency and logic and declared, merely in a footnote, that, while Parliament could not bind its successors, it could abdicate “sovereignty” altogether (Dicey, p 69). This abdication could be effected either without a transfer of “sovereignty” to another body or with transfer. Mere Abdication. Dicey argued, giving no reason other than a comparison between Parliament and the Russian Czar, who could abdicate his throne, that “Parliament could extinguish itself by legally dissolving itself and leaving no means whereby a subsequent Parliament could be legally summoned” (ibid). The principal objection to this argument is, of course, that a legislative vacuum would be created and it is obvious that if the British Parliament decided to disband, the British people would simply substitute some other legislature in its place. There seems to be no precedent for Parliament simply “abdicating”, for in all cases where independence has been given to a British territory and Parliament has declared that the United Kingdom’s sovereignty is terminated the territory has had its own legislature, thereby avoiding any legislative vacuum. In fact, it is difficult to understand why Dicey made his assertion: it was probably merely a point of legal purity, declaring the truism that one occasion when Parliament’s “sovereignty” ends is when Parliament itself disappears. Transfer of Sovereignty. It appears that Dicey envisaged the transfer of sovereignty over the whole area of legislative power, 601 for he gave the Act of Union 1706 as an example (ibid). The policy argument against total abdication of sovereignty does not apply here, for no legislative vacuum is created. Moreover, if the United Kingdom Parliament transferred all its legislative power to another person or body and then dissolved itself, as a practical matter it could not repeal the Act as it would no longer exist. Accordingly, most writers agree with Dicey that Parliament could effectually transfer the totality of its powers to another body. Parliament could transfer part of its legislative authority in two respects: it could, and has purported to, transfer its authority over British territory to another legislature or it could transfer to another body power to legislate for the United Kingdom with respect to certain matters. The difficulty with both these transfers of authority is that Parliament, as usually constituted, remains in existence and could pass repealing legislation. If a court adopted the Dicey/Wade interpretation of parliamentary supremacy, namely that the supremacy is “continuing” both substantively and procedurally, the later 602 Act would effectually repeal the earlier transfer of authority. Accordingly, the present position regarding transfer of partial authority is unclear. Professor Wade has, in fact, recognised the inconsistency in Dicey’s assertion that Parliament can irrevocably transfer its “sovereignty” over a portion of territory, though the inconsistency has not worried a number of leading constitutional lawyers. The various arguments have most frequently been formulated in response to the perennial academic question whether the British Parliament could validly repeal section 4 of the Statute of Westminster 1931: “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.” While, admittedly, on its face section 4 requires only a declaration that the Dominion has requested and consented, it is conceded by most writers that, when interpreted in light of paragraph 3 of the statute’s preamble, section 4 requires the Dominion to have actually requested and consented. The opinions expressed regarding section 4 reflect, as one would expect, the various formulations of the rule of parliamentary supremacy: some followers of Dicey, not worried by the inconsistency of their position, assert that section 4 is an abdication of sovereignty; the purists who believe in “continuing” parliamentary supremacy in all respects claim that the British Parliament could validly repeal 603 section 4; and the supporters of the second formulation argue that section 4 redefines “Parliament” to include the relevant authority in the Dominion as well as the Queen, Lords and Commons. 98

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The British Grundnorm: Parliamentary Supremacy Re-examined cont. On this issue at least, the plethora of opinions is practically reconcilable: section 4 is not an express abdication of power to legislate for the Dominions, but redefines the legislature which can enact a statute extending to a Dominion (which would include an Act repealing section 4 itself, if that Act purported to apply to a Dominion) to include the relevant organ of the Dominion as well as the three parts of the British Parliament. However, it is sensible to distinguish between the law applying in a Dominion and the law applying in the United Kingdom: It is compatible with most of the views expressed on section 4 to say that it is merely a rule of statutory construction as far as British law is concerned, but constitutes a new quadripartite legislature as far as the Dominion’s law is concerned. Judicial opinion in Eire (in the days of the Irish Free State) and South Africa supports this interpretation. It is submitted that, as Professor Wade recognised, (Wade, p 196) it is essentially inconsistent with the theory of the “continuing” substantive and procedural supremacy of the British Parliament to admit that, at least as far as British law is concerned, Parliament can legally abdicate its powers or irrevocably transfer them to another body. If there is one area in which Parliament can bind itself and its successors, why should it not be able to do so in others? Once the adherents of the first formulation of the rule of parliamentary supremacy admit that it 604 can be “self-embracing” they have denied the fundamental proposition on which their theory is built. B. Substantively “Continuing” and Procedurally “Self-Embracing” Supremacy 1. The Doctrine: Although Dicey’s formulation of the rule of parliamentary supremacy, largely unchallenged until the early 1930s, ensured the avoidance of legislative vacuums, it was inflexible regarding the manner and form of legislating. True, by 1930 Parliament had enacted the Parliament Act 1911 but, as we shall see, it was possible to regard that statute as merely an example of delegated legislation and not as redefining “Parliament” for certain purposes. It was the Trethowan Case (based on the interpretation of section 5 of the Colonial Laws Validity Act 1865) in Australia and the Harris Case (Harris v Minister of the Interior 1952 (2) SA 428 (AD)) in South Africa (based on the interpretation of section 2(2) of the Statute of Westminster 1931) which first alerted English lawyers to the possibility of differentiating between Parliament’s powers on the one hand and the manner and form of their exercise on the other. Put shortly, they began to see that, even though the powers of Parliament may be illimitable, it might be possible to redefine, at least for some purposes, the “Parliament” which exercised these unlimited powers. Two objections to this formulation, one philosophical and the other practical, must be noted. First, both the first and third interpretations of the rule of parliamentary supremacy are internally consistent; depending on one’s initial premise, it is perfectly consistent to believe either in totally “continuing” supremacy or totally “self-embracing” supremacy, but there is no consistency in asserting that the doctrine is half of each. Does it make sense to claim that the common law, by a fundamental, unchangeable rule, declares that “Parliament” is the supreme legislative body in the realm, and can efficaciously enact any measure it wishes except one which purports to bind itself and its successors, but does not define the body called “Parliament” in which the powers inhere? It does not, for the reason so well stated by RTE Latham: “Where the purported sovereign is any one but a single actual person, the designation of him must include the 605 statement of rules for the ascertainment of his will, and these rules, since their observance is a condition of the validity of his legislation, are rules of law logically prior to him” (RTE Latham, The Law and the Commonwealth (1949), p 523). Secondly, because the second formulation of the rule of parliamentary supremacy gives greater flexibility than the first, lawyers, and maybe judges also, may be prepared to overlook its logical difficulties; it certainly would not be the first time English law took the pragmatic, rather than the logical, course. However, this formulation of the rule presents in addition a practical difficulty: the line between the manner and form of legislating and the power of Parliament is one of degree only. By imposing stringent “manner and form” requirements, such as approval by 90% of the electorate at a referendum, Parliament could effectively limit the power of future Parliaments. This was first recognised by McTiernan J in his dissenting judgment in Trethowan: “It was argued … that if the Legislature said that an Act should not be repealed except in the ‘manner’ required by an Act of the [2.260]

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The British Grundnorm: Parliamentary Supremacy Re-examined cont. Legislature, the first Act could be repealed only in that ‘manner’. The label ‘manner’ does not conclude the matter: the true nature of the law may be disguised” (44 CLR at 442. See also Gavan Duffy CJ at 413). Whether a “manner and form” provision which practically limits the power of future Parliaments would be effective depends upon the courts’ approach to the question of judicial review. A court would probably hold that a later Act of “Parliament”, as ordinarily constituted, could expressly or impliedly repeal an earlier one which, under the guise of a “manner and form” provision, had sought to deny Parliament the power to pass the later Act; in support of this view is the old maxim that “what cannot be done directly cannot be done indirectly”. Although both Trethowan and Harris turned on the interpretation of British statutes, jurists have argued that their reasoning is more general; that is, that the common law (the Rule of Law) obliges Parliament to legislate in the manner and form provided by the presently existing law (which Parliament can alter by legislating in the stipulated manner and form), just as did section 5 of the Colonial Laws Validity Act 1865 with respect to the colonies, and that 606 Harris demonstrated that a “sovereign” legislature can be constituted in more than one way. Opponents find it fallacious to apply Trethowan to the British Parliament because the latter is “sovereign” but the New South Wales legislature is not and argue that, even though the South African Parliament was admittedly “sovereign” in 1952, it was constituted by a document which defined its composition, whereas the British Parliament can look only to the common law which is not specific on the question of its composition. All these arguments have some merit but, of course, they neither prove nor disprove the validity of the second formulation of the rule; they merely debate the validity of an analogy between the British Parliament and the legislatures of South Africa and New South Wales. It cannot be asserted that the ratio decidendi of either Trethowan or Harris itself applies to the British Parliament. This was clearly realised by Dixon J. in the obiter dictum giving birth to the second formulation of the rule of parliamentary supremacy (Trethowan, 44 CLR at 426). Although weak judicial dicta (see Ellen Street Estates Ltd v Minister of Health [1934] 1 KB 590, 597 per Maugham LJ; McCawley v The King [1920] AC 691, 705–706 per Lord Birkenhead LC) and some leading constitutionalists oppose the second formulation of the rule, the great majority of modern constitutional lawyers favour it; in fact, in The Bribery Commissioner v Ranasinghe ([1965] AC 172) the Privy Council, comprised of English judges, observed that the fact that a legislature is “sovereign” does not mean that it must always be constituted in the same way (ibid at 200). There is now, accordingly, the authority of senior English judges supporting the argument that the “sovereignty” of the British Parliament is not, per se, an obstacle to acceptance of the second formulation of the rule of parliamentary supremacy. (Moreover, the Supreme Court of Canada appears to have held (albeit obiter) that the “sovereign” Canadian Parliament has, in s 2 of the Canadian Bill of Rights 1960, imposed upon itself a binding form for the enactment of certain legislation: see R v Drybones [1970] SCR 282; 9 DLR (3d) 473; Att-Gen (Canada) v Lavell [1974] SCR 1349, 1382, 1388; 38 DLR (3d) 481, 507, 511. This also appears to be the meaning of an enigmatic dictum of Abbott J (dissenting): [1974] SCR at 1374; 38 DLR at 484.) … 607 The discussion of this formulation is not purely academic; Parliament has specified the manner in which the Royal Assent shall be given to legislation (Royal Assent Act 1967) and, on at least three occasions, has enacted legislation which may be regarded as having redefined “Parliament” for certain purposes. Though there are contrary interpretations, the Parliament Acts of 1911 and 1949 may be regarded as having provided an alternative legislature (comprising the House of Commons and the Monarch) for the enactment of most subjects of legislation. The European Communities Act 1972, when read with article 189 of the Treaty of Rome, may be regarded as having established, for some purposes, a new legislature comprising the Monarch, Lords, Commons and the legislative organs of the European Economic Community; and the Northern Ireland Constitution Act 1973 – if it is not regarded as a merely political declaration of intention – could have established a new legislature, comprising the British Parliament and a majority of the people of Northern Ireland, for the enactment of legislation to terminate British jurisdiction over Northern Ireland or any part thereof. Nevertheless, the fact that Parliament has enacted legislation does not establish that the legislation is valid or will be effective; although none of the Acts mentioned has been challenged in court, it has been alleged that one of them is invalid. [Editorial note: This was the Parliament Act 1949, noted at 607 n 16 of this 100

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The British Grundnorm: Parliamentary Supremacy Re-examined cont. article. But see now R (Jackson) v Attorney General [2006] 1 AC 262 in which an extraordinary nine-member House of Lords upheld the Parliament Act 1949 (UK) and the Hunting Act 2004 (UK).] Although it is possible that “manner and form” legislation which merely binds Parliament – or its component parts – but is not enforceable in the courts would be effectual in practice, the efficacy 608 of the legislation would depend on parliamentary good faith, which might not always be forthcoming. Accordingly, the second formulation of the rule of parliamentary supremacy raises the question of judicial review of legislation in the United Kingdom. 2. Judicial Review: Review of “Enacted Legislation”. The conception that Parliament could alter its composition or the “manner and form” of its legislation led inevitably to re-examination of the question of judicial review of legislation, and it is appropriate that the first tentative steps in this direction were taken by Dixon J in Trethowan. “[T]he Courts might be called upon to consider [whether the body which purported to enact the measure had authority to do so],” he declared (44 CLR at 426; emphasis added), but he left the question unresolved, merely observing enigmatically that “the answer … would be deduced from the principle of parliamentary supremacy over the law” (ibid). The common law, as an aspect of the Rule of Law, always recognised that the courts, in applying the law to cases before them, must ensure that what purport to be Acts of Parliament have in fact been approved by all three parts thereof (The Prince’s Case (1606) 8 Co Rep 1a, 20b; 77 ER 481, 505). But, as we have seen, until the 1930s it was not thought that Parliament could alter either its composition (including the “manner and form” of legislating) or its powers; hence judicial dicta to the effect that the courts cannot question the validity of an Act passed by all three parts of Parliament are irrelevant to the question whether “manner and form” provisions can be judicially enforced; that question had not been conceived of when most of the dicta were uttered. When considering whether to apply to a dispute what purports to be an Act of Parliament, a court which does not accept the first formulation of the rule of parliamentary supremacy must inquire 609 whether the measure has in fact been enacted by a body which is authorised, under the existing law, to pass it, and whether it was enacted in the correct manner and form; this is merely an application of the Rule of Law, expressed so well 173 years ago in Marbury v Madison ((1803) 5 US (1 Cranch) 137, 177–178). Accordingly, British constitutional lawyers favouring the second formulation argue for judicial review, but there is at present neither parliamentary nor judicial support for it. We must, therefore, be wary of assuming that the courts will necessarily do what the Rule of Law suggests they should. It is vital to remember that before a court will consider the validity of what purports to be an Act of Parliament it must go through two stages. First it must decide which of the three formulations of the rule of parliamentary supremacy it will adopt (this is probably what Dixon J meant when he wrote that the answer “would be deduced from the principle of parliamentary supremacy over the law”: (Trethowan, 44 CLR at 426) and, secondly, if it adopts the second or third formulation, it must consider whether it should exercise jurisdiction; this depends on the “separation of powers” and “political questions” doctrines. Especially in view of legal developments in the Commonwealth, recognised by the Privy Council (esp The Bribery Commissioner v Ranasinghe [1965] AC 172), it is becoming increasing likely that British courts will adopt the second formulation of the rule. Moreover, it is likely that their present willingness to examine constitutional arguments innovatively will lead to acceptance of judicial review of the validity of legislation; or, in other words, consideration of whether a measure really has been enacted by Parliament. Judicial Intervention Prior to Enactment. If Parliament has provided a new “manner and form” for the enactment of legislation, say approval by the electors at a referendum held after passage of a Bill by the two Houses but before submission for the Royal Assent, the 610 question naturally arises whether the courts may intervene before the Bill is enacted to ensure that the new “manner and form” requirements are not ignored. It may be thought that the discretion which, by law, the Crown still has to withhold assent to legislation would make litigation prior to the Royal Assent moot; however, unlike American Presidents who have a constitutional power to withhold assent, often do, and have sometimes claimed the right when considering veto to follow their own view of the law, the British Monarch, by a convention established since the reign of Queen Anne, does not refuse Assent to Bills [2.260]

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The British Grundnorm: Parliamentary Supremacy Re-examined cont. passed by both Houses. Hence, in Britain, for all practical purposes a Bill is certain to become “law” once it is submitted for the Royal Assent, with the result that litigation to prevent the submission of a Bill for the Royal Assent is not hypothetical or moot. As with so many ideas in this area of constitutional law, the notion of judicial intervention prior to the Royal Assent owes its origin to Trethowan, in which the Supreme Court of New South Wales issued an injunction against submission of the Bills for the Royal Assent (Trethowan v Peden (1930) 31 SR (NSW) 183, 205, 221). Debate has raged ever since both as to whether the courts could 611 or should grant such relief. A strong argument can be made that, at least in cases where the Bill, when assented to by the Crown, could be held invalid by the courts litigation should await its attempted enforcement, for, until then, the whole proceedings of Parliament can be regarded as merely a wasteful exertion, but not unlawful. Consequently, it is important to remember that in Trethowan – still the only occasion on which such an injunction was issued – the existing legislation (Constitution Act 1902–1929 (NSW) s 7A(2)) expressly forbade the submission to the Governor of a Bill not approved at a referendum, so that submission of the Bill to him was unlawful. In view of the courts’ traditional reluctance to “interfere” in the “legislative process” or to issue any injunction when a declaration will probably suffice, it is highly unlikely that the British courts would issue an injunction, even in circumstances similar to those in Trethowan. However, the courts show far less reluctance to make a declaration, leaving it to the appropriate officers to decide whether or not to comply with their legal obligations. C. Substantively and Procedurally “Self-Embracing” Supremacy Although it has no judicial support, a third interpretation of the rule of parliamentary supremacy is logically indicated: that Parliament’s supreme power enables it to redefine itself, impose “manner and form” requirements for the enactment of future legislation, and 612 impose substantive limitations on the future exercise of its powers (see Jennings, pp 152–153.) … We have seen that only the first and third interpretations of the rule of parliamentary supremacy are internally consistent; consequently, it may be argued that the inconsistency inherent in the second formulation supports the third, for the second, if it is to be consistent, must admit that the rule of parliamentary supremacy is alterable by Parliament. However, despite the logical attraction of the third formulation, its adoption by the courts seems very remote for two reasons. First, although it gives Parliament the procedural flexibility given by the second formulation, unlike the first two interpretations it would enable Parliament to deny future Parliaments the power to legislate on certain subjects, thereby enabling the creation of permanent legislative vacuums which could be eliminated only by resort to extra-constitutional devices. It is unlikely that the courts would adopt an interpretation which could lead to such practical difficulty that a “revolution” and replacement of the grundnorm may follow. Secondly, there is simply no judicial support whatever for a rule which would enable Parliament to impose limitations on the content or ambit of future legislation. While legislation seeking to limit the power of future Parliaments may not be void ab initio, it would, under the present view of the law, clearly be ineffective, exerting only a moral pressure, at most, on future Parliaments. This conclusion is borne out by the history of those statutes by which Parliament has sought to entrench legislation by providing that it was to last “for ever after” or “in all times to come”: the Bill of Rights 1688, the Union with Scotland Act 1706 and the Union with Ireland Act 1800. Each of these statutes has been amended, the Union with Ireland Act has been effectually repealed, and most commentators 613 acknowledge that they impose no legal limitation whatever on the powers of Parliament. It is submitted that the second formulation of the rule of parliamentary supremacy will be endorsed by British courts. The only circumstance in which the courts might accept the third formulation is one in which the traditional political setting is radically altered, enabling the courts to say that in effect a new grundnorm, or a new customary constitutional rule has emerged. The only presently foreseeable occasion for such a change of attitude by the courts is the complete integration of Britain into the political, economic, constitutional and social structure of the European Economic Community. Accordingly, an assessment of the future of the ultimate rule of her constitution must take the 102

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The British Grundnorm: Parliamentary Supremacy Re-examined cont. European Economic Community into consideration. …

Notes&Questions

[2.270]

1.

A most important Australian work on these and other issues relating to parliament is the book written by Professor Jeffrey Goldsworthy, The Sovereignty of Parliament: History and Philosophy (1999).

2.

How significant is Professor Winterton’s observation that the laws relating to the powers of Parliament are not in fact common law rules but are rather sui generis? How significant to the present question are his observations (at p 592 from the above extract) that “it is by no means conceded that Parliament can alter these rules as it can other rules of the common law and it would only exacerbate the confusion about the nature of parliamentary supremacy if any importance is attached to the fact that these rules are classified as part of the ‘common law’.” An eminent proponent of the view that such rules were common law rules was Sir Owen Dixon. (See O Dixon, Jesting Pilate (1965), pp 40, 43, 198, 199 and 206, 212-213 (from “The Common Law as an Ultimate Constitutional Foundation” (1957) 31 Australian Law Journal 240 at 242, 245).)

3.

Even if one were to adopt the view of parliamentary sovereignty as “continuing”, it is of course possible to reconcile the outcome of cases such as Trethowan on the basis that colonial, State and Dominion legislatures were subordinate legislatures. The British Parliament could provide for “manner and form” legislation in imperial legislation applicable to such legislatures without in any way fettering itself.

4.

A difficult question in relation to the powers of State Parliaments is whether considerations relating to the “sovereignty” of the United Kingdom Parliament are relevant. Professor Goldsworthy, Trethowan as authority, has argued that “the extent and nature of these powers [the legislative powers of the Australian State Parliaments] depends upon the relevant constitutional instruments: the general theory of parliamentary sovereignty is pertinent only to the extent that it illuminates their meaning” (Goldsworthy (1999), p 403). That general considerations of “sovereignty” remain relevant, to this limited extent, is supported by Peter Hanks: [T]he concept of parliamentary sovereignty is not without influence in Australia, for the interpretation of those provisions of the State Constitution Acts conferring legislative power is influenced by principles which operate in England as part of the law of parliamentary sovereignty. (PJ Hanks, Constitutional Law in Australia (2nd ed, 1996), p 130)

The High Court again had occasion to consider restrictive procedures and whether sole reliance had to be placed on CLVA, s 5 in resolving such questions in Clayton v Heffron.

Clayton v Heffron [2.280] Clayton v Heffron (1960) 105 CLR 214 at 250–252 [Section 5B of the Constitution Act 1902 (NSW) was introduced in 1933 for the purpose of resolving deadlocks between the two houses of Parliaments. Section 5B provided that if the Legislative Assembly twice passed a Bill, which was not an appropriation Bill, and the Legislative Council twice rejected or failed to pass the Bill, the Bill was to be submitted to a referendum of electors. If approved by a [2.280]

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Clayton v Heffron cont. majority of electors, it would then be presented to the Governor for the royal assent. This procedure was not, of course, confined to Bills to which s 7A itself expressly applied, that is, Bills relating to the abolition of the Legislative Council. However, because s 5B did extend to Bills to which s 7A applied, and because there were some rather precise procedures which had to be followed, it could be regarded as an amendment to the way s 7A operated. In 1959 and 1960, a further attempt was made by the Labor Party, then in government, to abolish the Legislative Council. The Legislative Assembly twice passed, and the Legislative Council twice rejected, a Bill for the abolition of the Legislative Council. Before the Bill could be referred to the electors, however, litigation was commenced in the Supreme Court of New South Wales by certain members of the Legislative Council and others seeking declarations that the section was invalid and that, in any event, its procedures had not been complied with. An injunction was also sought restraining the presentation of the Bill to the electors in a referendum. The plaintiffs were unsuccessful in the Supreme Court, and the High Court refused special leave to appeal. The High Court, in its reasons for so refusing, held s 5B to be valid, although a minority dissented to the extent that the special procedures provided for by s 5B had not been complied with. In the event, the Bill was referred to the electors, a majority of whom rejected it. Dixon CJ, McTiernan, Taylor and Windeyer JJ in a joint judgment (with which Kitto J concurred) declared (at 249–250) that s 5 of the Constitution Act 1902 (NSW), in addition to CLVA, s 5, were sources of legislative power to enact s 5B. Whilst conceding that Trethowan’s Case was decided by reference to s 5 of the CLVA, this did not mean that sole reliance had to be placed on that section. As Professor W L Morison noted, “[t]he provision of s 5 [of the CLVA] in this respect may have been a piece of ‘overkill’, for all the importance which was laid on it in A-G v Trethowan” (Morison, The System of Law and Courts Governing New South Wales (2nd ed, Butterworths, Sydney, 1984), p 53).] Dixon CJ, McTiernan, Taylor and Windeyer JJ: 250 The reason for the doubt is that s 5B leaves the legislature as it is and yet makes special provision on occasion for one House with the approval of the electors at a referendum exercising a full legislative power, including indeed a constituent legislative power, without the consent of the other House. It may be said that to do this goes beyond the literal meaning of the words “constitution, powers and procedure of such legislature”. But be that as it may, s 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 1902. 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 second paragraph of s 5 is a proviso to the effect that all Bills for appropriating any part of the public revenue or for imposing any new rate tax or impost shall originate in the Legislative Assembly. The proviso has no relevance to the case, but perhaps it may supply an example of a parliamentary proviso that would not be regarded as affecting the validity of the appropriation rate tax or impost and also an example of a provision of the Constitution which might be removed in the exercise of the power expressed in the first paragraph of s 5. 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 1902 itself: cf McCawley v The King. It was contended that although it might be true that 251 s 5 gave a very extensive power which, as in a flexible or uncontrolled constitution, extended to laws relating to, and changing, the “Constitution” of New South Wales, yet the postulate or hypothesis of the section is that “the Legislature” as defined shall be and remain the repository of the power so that no law could be good which placed such a power of constitutional amendment or 104

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Clayton v Heffron cont. indeed of simple law-making in the hands of one House even with the approval of a majority of the electors and the assent of the Crown. 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. Section 5 was of course enacted by the Legislature of New South Wales. But it was enacted in the exercise of the State’s constituent legislative power and that in turn depended upon an existing source of authority. That existing source of authority consisted in the imperial act (18 & 19 Vict c 54), commonly called the Constitution Statute 1855, and the Act of the Colony as amended which forms the schedule of that statute, otherwise 17 Vict No 41, commonly called the Constitution Act. ... They meant the establishment of a new legislature; at the same time the principles of responsible government were introduced and with that came the principles and conventions and general tradition of British parliamentary procedure. But what matters here is that the two instruments contain the source whence the constituent power of the Legislature is derived. ... It seems obvious that the combined effect of s 4 of the Constitution Statute 1855 and s 1 of the Constitution Act 1902 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 1865 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.

[2.290]

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Notes&Questions

The joint judgment thus reasoned that s 5 of the Constitution Act 1902 (NSW) was sufficient authority for the purpose. Laws falling within s 5, whether or not they were “manner and form” provisions, were thereby valid. This extended to laws altering the Constitution Act 1902 itself. This was because s 5 was enacted pursuant to the Imperial Constitution Statute 1855 (18 & 19 Vict c 54) which contained in its schedule the original Constitution Act 1902 for New South Wales; and s 4 of the Constitution Statute enabled the Constitution Act 1902 to be repealed or amended as the New South Wales legislature thought fit, subject of course to the repugnancy limitations. Thus, the Constitution Act 1902 (NSW) itself had repealed the original Constitution Act 1902 contained in the Constitution Statute 1855 (18 & 19 Vict c 54). Section 5 of the Constitution Act of 1902 then exercised the power, which the New South Wales legislature derived from the Constitution Statute 1855 (18 & 19 Vict c 54), to grant itself the plenary power, referred to above. Section 5B was an exercise, in turn, of the power provided by s 5. As stated in the joint judgment, s 5 contained: 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 (at 250). [2.290]

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2.

Thus, the decision confirmed the plenary nature of the legislative power of State parliaments, as contained in their respective Constitution Acts. Can it be said from the above reasoning that this would allow the enactment of legislation amending the Constitution, but also, it would seem, the imposition of restrictive procedures in relation to general legislation and not merely in relation to the constitution, powers and procedure of parliament, the limitation contained in CLVA s 5? Could reliance be placed on the notion that these restrictive procedures result in a reconstitution of the legislature in certain specific circumstances?

3.

If the plenary power of State legislatures – as provided for in their Constitution Acts (and now currently upheld by the Australia Act 1986) – is the basis for this reconstitution alternative, the determination of those restrictive procedures which can be regarded as resulting in a reconstitution of the legislature becomes a central issue. Thus, a careful classification of restrictive procedures needs to be undertaken if the “reconstitution” argument is being relied on as a source of authority independently of s 6 of the Australia Act 1986. Although the more common restrictive procedures can be regarded as reconstitution of the legislature, it remains a difficult issue in the hard case. A subtle classification was undertaken by Professor Goldsworthy ((1999), pp 407-408) when he examined the “reconstitution” alternative suggested by Rich J in Trethowan and hinted at by Dixon J in the same case. For Rich J, reconstitution of the legislature can occur by “the inclusion of a new element within it.” Dixon J conceived of laws “prescribing legislative procedures as well as laws changing the constituent elements of the legislature”. Goldsworthy continued (pp 407-408): To some extent both kinds of laws can be said to change the constitution of the legislature. “Parliament” is constituted partly by laws prescribing the persons or bodies included within it, and partly by laws prescribing the procedures they must follow, because when acting otherwise than in accordance with those procedures those persons or bodies do not act as Parliament. Thus, it could be argued that a requirement that bills be passed by a special majority in either or both of the Houses was part of the constitution of Parliament. To that extent, Rich and Dixon JJ may have had in mind a single alternative to the manner and form proviso. I will use the term “reconstitution” to refer to this alternative, and the terms “structural reconstitution” and “procedural reconstitution” to refer to the two different kinds thereof. As is clear from these considerations, and from the judgment of Rich J (if he was right), some restrictive procedures can be treated either as laying down a requirement as to manner and form or as partially reconstituting the legislature. (footnotes omitted)

Thus, special majorities in both houses, or either house, could still meet the requirement of a reconstitution, and thus still have an independent source of legitimacy. But what about those restrictions which are clearly so purely procedural or formal as to make it implausible to regard them as a reconstitution of the legislature? Goldsworthy again (at p 408): … some procedural requirements could not plausibly be characterised as pertaining to the constitution of the legislature (eg, requirements pertaining to timing). If Dixon J thought that some of these may nevertheless be binding independently of the manner and form proviso, he must have had in mind a second alternative. I will use the term “pure procedures” to refer to such procedural requirements – “pure” because necessarily they affect neither the legislature’s constitution (otherwise reconstitution would be the issue) nor its substantive powers (otherwise they would invalidly restrict Parliament’s continuing constituent power). It follows that pure procedures must not be excessively demanding and difficult to comply with. In addition to pure procedures, it could be argued that requirements concerned solely with the form of legislation may be 106

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binding independently of the manner and form proviso. For example, if an Act provides that it may only be expressly repealed or amended, it could be argued that, without impinging on the Parliament’s constitution or its substantive powers, it prescribes a form which repealing or amending laws must assume to be valid. I will add this possibility to that of pure procedures, and treat them both as constituting a single alternative to the manner and form proviso and reconstitution. I will use the term “pure procedure or form” to refer to this second alternative.

Whether the High Court will regard either alternative as binding has yet to be settled definitively. See Attorney-General (WA) v Marquet (2003) 217 CLR 545. The reconstitution alternative [2.300] The reconstitution alternative to CLVA, ss 5 and 6 of the Australia Act 1986 as a

source for enacting restrictive procedures, was explored in detail by Professor Gerard Carney in the article extracted below. The assumption that restrictive procedures are applicable to legislation dealing with general subject matter should be noted.

An Overview of Manner and Form in Australia [2.310] G Carney, “An Overview of Manner and Form in Australia” (1989) 5 Queensland University of Technology Law Journal 69 at 86–89 (footnotes omitted) 86 The clearest example of a reconstituted legislature is the typical manner and form provision which imposes a referendum requirement. The newly constituted legislature comprises both houses (or one in Queensland) of the original legislature, the electorate, and the Governor. The electorate is added as if it were another chamber. Such a reconstitution is effected for the special purpose of enacting those laws for which the manner and form is prescribed. The crucial point is that this power to enact those laws now lies solely with the reconstituted legislature, the original legislature no longer possesses this power and provided the referendum requirement is double entrenched, nor is it capable of recalling the power. [Professor Carney proceeded to examine the debate as to whether the sovereignty is “continuing” or “self-embracing” as discussed above. After examining the view that the sovereignty of Parliament is “continuing”, he continued:] 87 However, other constitutional lawyers have argued that the United Kingdom Parliament does possess the capacity to bind itself by the technique of reconstituting itself for special purposes by prescribing a referendum requirement. Sir Ivor Jennings argued: “Legal sovereignty” is merely a name indicating that the legislature has for the time being power to make laws of any kind in the manner required by the law. That is, a rule expressed to be made by the King, “with the advice and consent of the Lords spiritual and temporal, and the Commons in this present Parliament assembled, and by the authority of the same”, will be recognised by the courts, including a rule which alters this law itself. If this is so, the “legal sovereign” may impose legal limitations upon itself, because its power to change the law includes the power to change the law affecting itself. Professor Wade counters this reasoning with the point that the authority of Acts of Parliament derives from the common law – the courts, and although Parliament can alter the common law it cannot by statute alter the common law rule that demands that courts obey enactments of the Parliament comprising the Queen, the Lords and the Commons, for this rule is “an ultimate political fact” which can only be altered by revolution. [Reference is made to the dicta of Dixon J in Trethowan’s Case before continuing:] The dilemma whether a sovereign legislature was bound by manner and form was squarely 88 presented to the South African Appeal Court in Harris v Minister of the Interior [1952] 2 SA 428; [1952] 1 TLR 1245 where amendments to the South Africa Act 1909 (IMP) were challenged for not complying with s 152 of that Act which prescribed a manner and form requiring both Houses to sit and deliberate upon the proposed amendments in relation to voting rights, in a joint sitting and to pass them by a two-third’s majority. The CLVA no longer applied to South Africa by virtue of the Statute of Westminster 1931. Nevertheless, while accepting the sovereignty of the South African Parliament, [2.310]

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An Overview of Manner and Form in Australia cont. the Appeal Court enforced the manner and form and declared the amendments invalid because the authority to enact those amendments was vested solely in the Parliament as constituted by s 152 of the South Africa Act 1909. In effect then the Court accepted divisible sovereignty – that Parliament can be differently constituted for different purposes. How far this point goes was not discussed, in particular, whether the South African Parliament can itself subdivide its powers further? The above discussion concerns the capacity of a sovereign Parliament to bind itself by manner and form provisions. The Parliaments of the Australian States, although possessing a limited sovereignty, are in no distinguishable position from that of a fully sovereign legislature when considering their ability to bind themselves outside of s 6 by a manner and form provision which reconstitutes their Parliaments. The main authority in Australia is Trethowan’s Case in the judgments of Rich and Dixon JJ. Dixon seemed to accept this basis of enforcement for manner and form while not relying on it. Rich J did rely on it, as well as the proviso to s 5 of the CLVA. Rich J dealt with the two matters which were crucial to this basis of enforcement of manner and form outside the CLVA and equally now outside s 6 [of the Australia Act 1986]. The first is whether a State legislature can reconstitute itself for a special purpose. The second matter is if it can so reconstitute itself, is the original legislature effectively deprived of the power involved? In answering the first question, s 5 of the CLVA conferred on all representative legislatures full power to make laws respecting the constitution, powers and procedure of the legislature – a power which clearly authorised State Legislatures to legislate with respect to “constitution” which was defined by Dixon J in Trethowan’s Case to cover “its own nature and composition”. [at 429] Rich J relied on s 5 of the CLVA to hold: “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.” [at 418] This power today is found in s 2(2) of the Australia Acts 1986. But a further continuing source of power is the general grant of legislative power to the State Parliaments to make laws for the peace, order and good government of the State. The High Court in Clayton v Heffron preferred to rely on this power than on s 5 of the CLVA to uphold the power of the New South Wales Parliament to enact s 5 to provide for the resolution of deadlocks between the two Houses. In the joint judgment [of the majority] a difficulty was noted in relation to s 5 of the CLVA: “But some doubt may perhaps exist as to the substance of s 5B following within the words ‘respecting the constitution powers and procedure of such legislature’, although the same doubt does not appear to have been felt by members of the Court in Taylor v Attorney-General of Queensland”. Given that a State Parliament has the power to reconstitute itself for special purposes, 89 in what ways can this be achieved and what limits apply? Reconstitution from a bicameral to a unicameral Parliament generally, as well as, for special purposes is permissible. The addition of another chamber such as the electorate is also valid. Reconstitution could also arise in procedural sense by a special majority requirement. [Professor Carney then introduces the limitations on reconstitution:] Parliament cannot abdicate its powers by divesting itself of power. Obviously valid reconstitution does not infringe this limitation. But a purported reconstitution which subjects the exercise of power to the consent of an outside body (other than the electorate) will be invalid. Apart from these abdications of power, it is well established that the Crown must remain part of the legislature or the Parliament for the purpose of granting royal assent.

[2.320]

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As noted by Professor Carney, the Australia Act 1986 – which can be regarded as “a Statute of Westminster for the States” – does not reproduce that part of s 5 of the CLVA empowering colonial legislatures to make laws with respect to their constitutions, including their amendment. The source of such power will have to be found either in s 2(2) of the Australia Act 1986 and, as was suggested in Clayton v Heffron, in the provisions in the various State constitutions granting plenary power to the legislature; [2.320]

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s 5 of the Constitution Act 1902 (NSW) providing “constituent as well as ordinary legislative power” (at 251, in the joint judgment). 2.

The “enabling” statute, currently the Australia Act 1986, in fact grants plenary legislative power to the State Parliaments, subject to the Commonwealth Constitution and the Australia Act 1986 itself. Moreover, s 2(2) of that Act provides that the legislative powers of the Parliaments of States “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.” Accordingly, the concept of “parliamentary sovereignty” in the Westminster tradition remains an important consideration in determining the question of alternate sources of authority to enact restrictive procedures. Since the Australia Act 1986, the point of reference remains the Westminster tradition of parliamentary sovereignty as it evolves in Australian circumstances. Doctrinal developments relating to the United Kingdom Parliament, especially in light of that jurisdiction’s legal involvement with the European Union, may remain germane and selectively useful, but increasingly less so. Accordingly, the meaning of parliamentary sovereignty – whether it is “continuing”, “self-embracing” or procedurally “self-embracing” – remains a relevant consideration irrespective of s 6 of the Australia Act 1986. It must continue to engage Australian constitutional lawyers when considering the nature of the plenary power of State Parliaments within the limits suggested. That being the case, and especially in light of s 2(2) of the Australia Act 1986, it follows that a determination of the powers of the United Kingdom Parliament pre-1986 remain a relevant consideration. This is not to deny that fundamental issues relating to parliamentary sovereignty are to be resolved from a purely Australian perspective, including Australian notions of parliamentary sovereignty as they may have evolved since 1986.

Attorney-General (WA) v Marquet [2.330] Attorney-General (WA) v Marquet (2003) 217 CLR 545 at 553–576 Gleeson CJ, Gummow, Hayne and Heydon JJ: 553 [1] The ultimate question in each of these matters is whether it was lawful for the respondent, the Clerk of the Parliaments of Western Australia, to present for Royal Assent either the Bill for an Act to be entitled the Electoral Distribution Repeal Act 2001 (the Repeal Bill) or the Bill for an Act to be entitled the Electoral Amendment Act 2001 (the Amendment Bill). [2] Section 13 of the Electoral Distribution Act 1947 (WA) provided that: It shall not be lawful to present to the Governor for Her Majesty’s 554 assent any Bill to amend this Act, unless the second and third readings of such Bill shall have been passed with the concurrence of an absolute majority of the whole number of the members for the time being of the Legislative Council and the Legislative Assembly respectively. [Emphasis added to indicate the significance of the word “amend” in both argument and judicial reasoning.] Neither the Repeal Bill nor the Amendment Bill was passed with the concurrence of an absolute majority … of the Legislative Council. Did s 13 of the Electoral Distribution Act 1947 make it “not … lawful” to present to the Governor for Her Majesty’s assent either the Repeal Bill or the Amendment Bill? That is, did either or both “amend” the Electoral Distribution Act 1947? (It is convenient to call this the “construction question.”) [3] If s 13 of the Electoral Distribution Act 1947, on its proper construction, did apply to either or both of the Repeal Bill and the Amendment Bill, was it necessary to comply with the manner and form provisions of s 13? (It is convenient to call this the “manner and form question.”) That will require consideration of the operation and effect of s 6 of the Australia Act 1986 (Cth) and its provision that: 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 [2.330]

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Attorney-General (WA) v Marquet cont. 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. [4] These reasons will seek to demonstrate that, on its proper construction, s 13 of the Electoral Distribution Act 1947 did apply to the Repeal Bill and to the Amendment Bill and that, because each of those Bills was for “a law … respecting the constitution … of the Parliament” of Western Australia, s 6 of the Australia Act 1986 required compliance with the manner and form provisions of s 13 of the Electoral Distribution Act 1947. … The construction question – applying s 13 567 [56] It follows from what has been said about the proper construction of s 13 that it applied to the Repeal Bill. That was a Bill for an Act to “amend” the Electoral Distribution Act 1947. [57] It also follows that s 13 applied to the Amendment Bill. It, too, was a Bill for an Act which would amend the Electoral Distribution Act 1947 because it was a Bill to make provision for the several subjects with which the Electoral Distribution Act 1947 dealt. Although the Amendment Bill was introduced and dealt with separately from the Repeal Bill, a Bill dealing with these subjects had to be passed … Section 13 of the Electoral Distribution Act as a manner and form provision 568 [63] 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 fifty years since HWR Wade convincingly demonstrated that the basal question presented in a case like the present, when it arises and 569 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 Diceyian 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. [64] 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”, Law Quarterly Review, vol 51 (1935) 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”. 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 to encounter difficulties today. (H W R Wade, Constitutional Fundamentals (1989), pp 40–47). ... [65] 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. ... In 570 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. 110

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Attorney-General (WA) v Marquet cont. [66] 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. ... First, constitutional norms, whatever may be their historical origins, are now to be traced to Australian sources. Secondly, unlike Britain in the 19th century, the constitutional norms which apply in this country are more complex than an unadorned Diceyian 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. As Fullagar J said, in Australian Communist Party v The Commonwealth ((1951) 83 CLR 1 at 262), “in our system the principle of Marbury v Madison is accepted as axiomatic”. It is the courts, rather than the legislature itself, which have the function of finally deciding whether an Act is or is not within power. ... [67] 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 1986. Section 106 of the Constitution provides that “[t]he 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”. The Australia Act 1986, too, is to be traced to its Australian source – the Constitution of the Commonwealth. The Australia Act 1986 takes its force and effect from the reference of power to the federal 571 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. Although the phrase “subject to this Constitution” appears both in ss 51 and 106, it was decided in Port MacDonnell Professional Fishermen’s Association 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).” [68] ... It is of particular importance to recognise that the Australia Act 1986 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. … [70] Section 6 of the Australia Act 1986, 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 [71] Was either the Repeal Bill or the Amendment Bill, if it became law, 572 within s 6 of the Australia Act 1986? 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 1986 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. [72] 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 1986. In particular, it is necessary to give due weight to the learning that evolved about the operation of the Colonial Laws Validity Act 1865, s 5 of which also spoke of “laws respecting the constitution, powers, and procedure” of the legislatures to which it applied. [73] In s 5 of the Colonial Laws Validity Act 1865 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; [1932] AC 526) as a condition upon which the full power referred to in s 5 was exercisable. Section 6 of the Australia Act 1986 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 1986 is evidently intended to build on the provisions of the Colonial Laws Validity Act 1865. … [75] 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). … [76] ... [2.330]

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Attorney-General (WA) v Marquet cont. [Section] 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 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. [77] Not every matter which touches the election of members of a Parliament is a matter affecting the Parliament’s constitution. … Again, however, it is neither necessary nor appropriate to attempt to trace the metes and bounds of the relevant field. [78] The Repeal Bill and the Amendment Bill were respectively to do away with, and then provide an alternative structure for, the constitution of the two Houses of the Western Australian Parliament. The Repeal Bill did away with the scheme under which there were two Houses elected from fifty-seven districts and six regions respectively, where the fifty-seven districts were to be ascertained in accordance with the rules prescribed by s 6 of the Electoral Distribution Act 1947. Those rules depended upon the division between the metropolitan and 574 other areas and the application of a tolerance of 15% 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. [79] The Amendment Bill, if it came into force, would have provided for fifty-seven electoral districts and six electoral regions, but they would have been differently drawn from the way for which the Electoral Distribution Act 1947 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 km2. The tolerance in the smaller districts would have been reduced from 15% to 10%; in the larger districts the formula was more complicated, but again the tolerance was changed from 15%. In addition, and no less significantly, under the Amendment Bill, the number of members of the Council would have been increased, from the thirty specified by s 5 of the Constitution Acts Amendment Act 1899, to thirty-six. The Amendment Bill was for a law respecting the constitution of the Parliament of Western Australia. [80] The conclusions reached about the operation of s 6 of the Australia Act 1986 make it unnecessary to decide whether, separately from and in addition to the provisions of that section, there is some other source for a requirement to comply with s 13 of the Electoral Distribution Act 1947. It is enough to notice two matters. First, as indicated earlier in these reasons, the continuance of the constitution of a State pursuant to s 106 of the federal Constitution is subject to the Australia Act 1986. Section 13 of the Electoral Distribution Act 1947 is made binding by s 6 of the Australia Act 1986. Secondly, the express provisions of s 6 can leave no room for the operation of some other principle, at the very least in the field in which s 6 operates, if such a principle can be derived from considerations of the kind which informed the Privy Council’s decision in Bribery Commissioner v Ranasinghe ([1965] AC 172 at 197) and can then be applied in a federation (McGinty v Western Australia (1996) 186 CLR 140 at 297). … 576 [86] For these reasons, which differ in some significant respects from those adopted by the majority in the Full Court, the questions asked in the proceedings should be answered, “No”. Special leave to appeal should be granted in each matter; the appeal in each matter should be treated as instituted and heard instanter but dismissed.

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Notes&Questions

1.

In his dissenting judgment, Kirby J held that “amend” in s 13 of the Electoral Distribution Act 1947 did not cover repeal. Accordingly, the impugned Act repealing the Electoral Distribution Act could proceed to receive the Governor’s assent, thus becoming law. This would have the effect of repealing s 13 – the manner and form provision – along with the rest of the Electoral Distribution Act 1947 and accordingly there was no impediment to the impugned amending Act becoming law (at [124]ff and [132]ff). In any event, his Honour held that a law seeking to repeal and amend electoral distribution laws, as in this case, was not with respect to the “constitution”, “powers” or “procedure” of the legislature, and therefore there could be no reliance on either s 5 of the CLVA (at [193]ff) or s 6 of the Australia Act 1986 (at [202]ff). His narrow reading of the “manner and form” provisions reflected a concern that parliaments not be allowed to restrict their successors. He was concerned in particular about the possible abuse of restrictive procedures in the situation where they became too onerous, referring to their “undemocratic potential” (at [194]). For a more detailed commentary of the judgments in this case, see J Goldsworthy, “Manner and Form Revisited: Reflections on Marquet’s Case”, in M Groves (ed), Law and Government in Australia (Federation Press, Sydney, 2005).

2.

The majority decided the case by sole reliance on s 6 of the Australia Act 1986. Is this because this was regarded as a sufficient basis upon which to decide the case or because they excluded alternative sources of authority to enact restrictive procedures? In other words, did the majority regard s 6 as the only source of authority for the enactment of “manner and form” provisions, thus limiting the application of such provisions to the “constitution, power or procedure” of the Parliament? As Professor Goldsworthy asked (“Manner and Form in the Australian States” (1987) 16 Melbourne University Law Review 403 at 411): “Does the maxim expressio unius est exclusio alterius support an argument that the express re-enactment of s 6 excludes the reconstitution or the pure procedure or form alternatives?” In the view of Professor Goldsworthy, the “Australia Act 1986 cannot possibly have the intention or the effect of removing the power of the State Parliaments to alter their own constitutions; indeed, subs 2(2) of the Act is now a further source of that power.” (at 411) Professor Goldsworthy was of the view that the reconstitution principle and the principle derived from the case of Bribery Commissioner v Ranasinghe [1965] AC 172 were such sources of power (defined in Note 3 below). It is arguable that the majority did leave open the possibility of alternate sources of authority for restrictive procedures in the following sentence: “the express provisions of s 6 can leave no room for the operation of some other principle, at the very least in the field in which s 6 operates, if such a principle can be derived from considerations of the kind which informed the Privy Council’s decision in Bribery Commissioner v Ranasinghe and can then be applied in a federation” (at 95, emphasis added). This raised the question: are these alternate sources of authority available in a field in which s 6 does not operate, for example, where the restrictive procedure simply relates to general subject matter and a reconstitution of parliament occurs for that purpose? The Ranasinghe principle is derived from the following statement of the Privy Council (at 197): “… a Legislature has no power to ignore conditions of law-making that are imposed by the instrument which itself regulates its power to make laws”. This case related to a provision in the Constitution of Ceylon, s 29(4) and contained in an Imperial Order-in-Council of 1946. This provided the requirement that a two thirds

3.

[2.340]

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4.

5.

majority of House of Representatives was required together with a certificate to that effect from the Speaker before a bill to amend this order could be presented for the royal assent. The impugned legislation, the Bribery Amendment Act 1958, was inconsistent with the Constitution and also failed to comply with the restrictive procedure set out in s 29(4). The binding nature of the restrictive procedure was upheld even though the CLVA no longer applied to Ceylon (now Sri Lanka). It is clear that the Ranasinghe principle is applicable to restrictive procedures which are contained in a constitution, that is, “the instrument which itself regulates its [the legislature’s] power to make laws”. However, the principle is problematic because it is not clear if it applies only to an instrument which is clearly a formal constitution. Would it apply, for example, simply to any act of parliament containing a restrictive procedure relating to the constitution of the parliament? Moreover, it is not clear that the principle is so limited. It is possible to argue that it may apply even to restrictive procedures relating to any future act on any subject matter. This is because, it is arguable, that the “instrument which itself regulates … power to make laws” is that earlier Act. The status, and indeed precise nature, of the Ranasinghe principle remains unclear in Australia, and continues to be so after Marquet. Whilst it has received some judicial consideration, no consistent position has been reached. Gibbs J in Victoria v Commonwealth and Connor (1975) 134 CLR 81 at 163) appeared to accept that the restrictive procedure could be contained in a general act which was not a formal constitution. It remains the case, however, even after Marquet, that the status and nature of the principle remains uncertain. For further discussion of the issue, see HP Lee, ““Manner and Form”: An Imbroglio in Victoria” (1992) 15(2) University of NSW Law Journal 516; J Goldsworthy, “The “Principle in Ranasinghe” – A Reply to HP Lee” (1992) 15(2) University of NSW Law Journal 540. The High Court was very careful to establish the status of the Western Australia Parliament as being “relatively subordinate” to the form of law represented by the Australia Act 1986 (at 571). This was to establish the Australia Act 1986 as the “form of law” which stood in place of laws emanating from the United Kingdom Parliament as they applied to the Australian States prior to the Australia Act 1986. “They were subordinate legislatures and manner and form provisions could be and were imposed upon them by Imperial legislation.” (at 570) This confirmed the form of reasoning apparent in the ratio of Trethowan. By being so careful to maintain this pattern of higher form of law/subordinate legislature, was the majority indicating that this is the only paradigm which may provide authority for the enacting of restrictive procedures? Could the Commonwealth Parliament enact binding restrictive procedures? (See Winterton (1980).)

Limits on the power to enact “manner and form” provisions pursuant to s 6 of the Australia Act [2.350] What limits are there on the power to enact “manner and form” provisions when

reliance is being placed on s 6 of the Australia Act 1986, (and previously CLVA, s 5), as the source of authority to do so? The primary limitation is that the manner and form requirement can only bind legislative provisions which relate to the “constitution, powers or procedure” of a State Parliament. The manner and form provision itself, however, can be contained in an Act which is not exclusively concerned with that subject matter. Thus, when an Act is impugned on the basis that it does not comply with a manner and form provision stipulated in an earlier enactment, the issue is whether the impugned provision in the later Act can be characterised as a law respecting the “constitution, powers or procedure” of the Parliament. Whilst the 114

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significance of characterising a law as one with respect to these matters has been recognised, there has been some confusion as to the method of determination of validity.

South Eastern Drainage Board v Savings Bank of Australia [2.360] South Eastern Drainage Board (SA) v Savings Bank of Australia (1939) 62 CLR 603 at 618–634 [Section 6 of the Real Property Act 1886 (SA) provided 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.” (Emphasis added.) This is the manner and form provision. It provided a form requirement for future inconsistent legislation: an express statement in the future Act that the relevant provisions apply regardless of their inconsistency with the provisions of the Real Property Act 1886. At issue in the case was the validity of s 14 of the South Eastern Drainage Amendment Act 1900 (SA) which was inconsistent with the former Act and which did not contain the express words required by the former Act in order to avoid the inconsistency bar. The argument for invalidity relied on the proviso in CLVA, s 5. A majority (Latham CJ, Starke, Dixon and McTiernan JJ) rejected this argument and upheld the validity of the section. Evatt J also upheld its validity but on different grounds.] Latham CJ: 618 [His Honour referred to s 5 of the Colonial Laws Validity Act 1865 and continued:] It was urged that s 6 of the Real Property Act 1886 was a law which prescribed a manner and form for the passing of Acts of parliament and that therefore an Act passed not in such manner and form was not valid. But the proviso with respect to manner and form applies only to laws respecting the constitution of the legislature, the powers of the legislature, and the procedure of the legislature. Section 6 is plainly not a provision affecting in any way the constitution of the legislature. Nor does it affect the powers of the legislature. It only purports to prescribe the contents of an Act which the legislature has power to pass. Nor does the section relate to any part of the procedure of the legislature in passing statutes. Accordingly, in my opinion, s 6 of the Real Property Act 1886 cannot operate to deprive of effect any subsequent legislation of the South Australian Parliament which, upon the natural construction of its terms, enacts a provision which is inconsistent with the Real Property Act 1886. Dixon J: 625 [After referring to CLVA, s 5, his Honour continued:] Section 6 of the Real Property Act 1886 is, in my opinion, not a law respecting the constitution, powers or procedure of the South-Australian legislature. It is scarcely necessary to say that it has nothing to do with the constitution of the legislature. That it is not a law respecting its powers seems to me to appear clearly enough from its content. It does not profess to limit or qualify the power of the legislature in any way. Nor is it concerned with the procedure of the legislature. Section 6 has, I think, neither the purpose nor the effect of limiting the power of the Parliament of South Australia to make laws which though they do not contain the words “notwithstanding the provisions of The Real Property Act 1886”, nevertheless do, according to an intention sufficiently appearing, apply to land under that Act and make provisions inconsistent with it. 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: 624 But it is worthwhile to note what that section purports to do. It purports to control future parliaments of South Australia in any legislation affecting land under the Real Property Act 1886 by requiring that unless such legislation is couched in a certain literary form (ie, containing the words notwithstanding the provisions of “The Real Property Act 1886”) it cannot affect land under the Act. For instance, it would not be sufficient if the Parliament used the phrase “in spite of the provisions of the Real Property Act 1886”. In my opinion the legislature of South Australia has plenary power to couch its enactments in such literary form as it may choose. It cannot be effectively commanded by a prior legislature to express its intention in a particular way… 634 In my opinion, the decision in Attorney-General for New South Wales v Trethowan [[1932] AC 526] has nothing to do with the matter. Section 6 is not a mere interpretation section, for it is not expressed to operate only so far as the contrary intention does not appear. It purports to lay down a rigid rule binding upon all future parliaments. It declares that, however clearly the intention of such parliaments may be expressed in an enactment, that intention shall not be given effect to unless it contains the magic formula. I think that [2.360]

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South Eastern Drainage Board v Savings Bank of Australia cont. the command in s 6 was quite ineffective and inoperative.

Notes&Questions

[2.370]

1.

There is a misunderstanding evident in the judgments as to the precise question which should have been asked when examining the applicability of CLVA, s 5. As noted by Professor Lumb: Unfortunately, the members of the High Court in this … case, although reaching the right conclusion, did so by means of a process of reasoning which may be questioned. They posed the problem in the following manner: was the provision in the Real Property Act a law respecting the constitution, powers or procedure of the legislature. In terms of strict logic, this question ought to have been asked of the later legislation – the Drainage Act – for s 5 required only the later legislation to be of this nature if it were to be subject to a manner and form requirement laid down in pre-existing law. Drainage legislation of course falls completely outside of this category. (Lumb (5th ed, 1991), pp 117-118.)

2.

In addition to issues relating to the “constitution, powers and procedure”, note the concern, expressed especially by Latham CJ and Evatt J above, to maintain the sovereignty of parliament and not to allow a current parliament to prescribe the content of future legislation. That the manner and form provision can only affect legislation characterised as being with respect to the constitution, powers or procedure of parliament was confirmed, although similar errors in method can be discerned in the Comalco Case.

The Comalco Case [2.380] Commonwealth Aluminium Corporation Ltd v Attorney-General (Qld) [1976] Qd R 231 at 235–239 [At issue in this case, heard by the Full Court of the Supreme Court of Queensland, was the validity of the Mining Royalties Act 1974 (Qld). An earlier Act, the Commonwealth Aluminium Corporation Pty Ltd Agreement Act 1957 (Qld), gave force of law to an agreement entered into between Comalco and the State government whereby Comalco was allowed to mine bauxite in the State with royalties to be paid to the government on minerals extracted. The Act prescribed the method for calculating royalties. Section 4 provided that the agreement should not be varied except by another agreement between Comalco and the responsible Minister at the relevant time, approved by the Governor in Council. It also declared that “no provision of the Agreement shall be varied nor the powers and rights of the company under the agreement be derogated from except in such manner. Any purported alteration of the Agreement not made and approved in such manner shall be void and of no legal effect whatsoever.” The 1974 Act, however, which was enacted without any further agreement between the relevant parties, authorised the Governor in Council to vary the amount of royalties payable by Comalco. Comalco argued that the 1974 Act was invalid as it had not been enacted pursuant to the prescribed manner and form. A majority (Wanstall SPJ and Dunn J, Hoare J dissenting) held that the 1974 Act was valid.] Wanstall SPJ: 235 [The plaintiff] contend[s] with considerable ingenuity that 236 s 4 of the 1957 Act and clause 3 of the agreement are colonial laws which prescribe the manner and form in which the agreement may be varied, ie, only by agreement between the plaintiff company and the Minister with the approval of the Governor in Council, and that, in terms of the last paragraph of s 4, this operates to give the agreed variation “the force of law as though (it) were an enactment of (the 1957) Act.” Thus, it is said, a variation so made amounts to a “law passed” according to prescribed manner and form 116

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The Comalco Case cont. within the meaning of the proviso to s 5 of the Colonial Laws Validity Act 1865. The argument treats this process as indistinguishable from an exercise of legislative power by a delegate under the authority of an Act of Parliament. But it conveniently ignores the principle which validates a legislature’s delegation of its function, namely that all the time it retains intact its own power to withdraw or to alter the authority it has conferred upon its agent, a reservation which paradoxically the plaintiff’s case asserts has not been made in this instance. Its case is, as indeed it must be, that the Legislature has parted with its power to vary the agreement by the passing of a new law of its own, that it has accomplished this apostasy by declaring the formula of s 4 to be the sole and exclusive means of varying it. It was argued that Parliament retains control because it has the right to disallow an Order in Council approving a variation, but this is beside the point; disallowance would merely set aside the variation of the day, but not detract from the force of s 4. The power Parliament lacks, if the plaintiff’s argument is sound, is the power to vary the agreement unilaterally by enacting legislation which is inconsistent with its terms, and clearly that means that Parliament has, as to that subject matter, abdicated its principal function. Curiously it would have done so by the side wind of a manner and form provision. In my view s 4 is not directed to prescribing the manner and form of passing laws for the purposes of and within the meaning of the proviso to s 5 of the Colonial Laws Validity Act 1865, but it may be an exercise of the other power given by s 5, that of legislating respecting its powers, although I prefer to attribute the source of the legislative authority to enact it to s 2 of the Constitution … [T]o the extent to which it purports to restrain the Legislature from enacting legislation effecting a variation without agreement of the plaintiff it is plainly invalid, unless it could be construed as a manner and form provision. But it overstrains the latter concept to include in it a provision which touches the Legislature only by impliedly depriving it of legislative power on the subject matter of the agreement. The nettle that must ultimately be grasped by the argument is its logical conclusion that, by s 4, Parliament has set up a body with legislative power, the power of amending an agreement having the force of a law enacted by Parliament, and to do so to the exclusion of Parliament which cannot take the matter of variation directly into its own hands. Thus 237 would the Queensland legislature “create and endow with its own capacity a new legislative power not created by the Act to which it owes its existence.” (In re Initiative And Referendum Act [1919] 1 AC 935, 945; Cobb & Co Ltd v Kropp [1967] 1 AC 141, 157). I would hold invalid an enactment purporting to do that. (cf R v Burah (1878) 3 App Cas 889, 905 PC.) If it is not so to fall s 4 must be capable of being treated as a manner and form provision, valid within the limits of such a qualification. My reason for thinking that s 4 is not an exercise in manner and form using the proviso to s 5 of the Colonial Laws Validity Act 1865 is that that section … is concerned with the use and operation of the legislative process and nothing else, whereas s 4 (of the 1957 Act) has two objects, both different from that notion, one is to confer a power on the Executive Government, the other is to forbid Parliament from using the legislative process at all. The proviso must be construed so that “passed” connotes every step in the legislative process, including some that take place outside the chamber … The manner and form required to be observed in the passing of the 1974 Act will have be found in the 1957 Act. “Such” refers back the laws which the proviso has in view to those described earlier as being made by the legislature, ie, legislation, on the subject of its constitution or powers or procedure. If it be assumed (although I do not so decide) that s 4 of the 1957 Act is legislation respecting the Legislature’s powers, in the sense that it removes from the ambit of legislative power the subject matter of variation of the agreement, I can find not one word in it prescribing either manner or form to be followed in the future passing of legislation. On the contrary its only purpose and intention qua the Legislature is to prohibit future legislation on that subject in any manner or form. Such legislation is to be replaced by Executive Government action. It is idle to say, as does the plaintiff’s argument, that because what emerges from the use of the s 4 formula at executive level is as good as legislation, in that it will have the force of law, the formula which produced it deals with the manner and form of passing legislation. The simple truth is that where it prescribes manner or form it does so in respect of executive action to effectuate a variation of the agreement, and to give it the force it would have if Parliament had enacted it, legislatively. It is at pains to keep the one process of law-making distinct from the other. To be a “manner and form” provision within s 5 it must be one operative on the legislative process at some point … 239 [T]o be effective, the qualification as to manner or form must be one which operates within the legislative process as such, albeit not [2.380]

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The Comalco Case cont. 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 consistently with its provisions.

Notes&Questions

[2.390]

Dunn J agreed that the legislation was valid. CLVA, s 5 was not applicable because neither act was a law “respecting the constitution, powers and procedure” of the State legislature. (b) In his dissent, Hoare J adopted a very broad view of the meaning of a manner and form provision (at 248). The earlier Act prescribed the manner and form by which relevant legislation was to be enacted and with which the latter Act was required to conform. The latter Act was invalid because it was in fact a law “respecting the constitution, powers and procedure” merely by virtue of the fact that it conflicted with a previous enactment prescribing a manner and form. Is this view preferable to that of the majority? If the approach of Hoare J was adopted, would this not mean that every law which failed to comply with a manner and form provision, simply by its failure so to comply, could automatically be characterised as a law with respect to the constitution, powers or procedure of the Parliament. Would this not render the act of characterisation in this context redundant? The correct methodology was adopted in the following case. (a)

West Lakes v South Australia [2.400] West Lakes Ltd v South Australia (1980) 25 SASR 389 at 393–414 [The West Lakes Development Act 1969 (SA) enacted into law an agreement between the Premier of South Australia and West Lakes Ltd, a development company, by which the company was permitted to develop land pursuant to the planning code provided for in the Act. The agreement as enacted into law also provided (s 16) that the consent of the company was needed before any amendment to the planning code contained therein could be made by the “the Minister”. A Bill to amend the Act was introduced into Parliament in 1980. The amending Bill provided that a regulation made under the Act to allow for floodlights in the sports ground in the development site would not require the company’s consent. The company commenced proceedings in the Supreme Court of South Australia seeking a declaration that South Australia was bound by the agreement and an injunction restraining the enactment of the Bill into law. The plaintiff company argued that because the prescribed manner and form had not been complied with, that is, its consent not being obtained, the impugned provision in the Bill was inoperative. The plaintiff’s argument was rejected.] King CJ: 393 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 … 396 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) 118

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West Lakes v South Australia cont. prescribed by its own legislation. This is expressly provided in s 5 of the Colonial Laws Validity Act 1865 … [I]t 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 1865. 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 1865 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 … 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 Saving 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 1865) 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. 397 …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 extra-parliamentary 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 432–433, referring to the use of the expression in the proviso to s 5 of the Colonial Laws Validity Act 1865, 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 … however, concerned a requirement that an important constitutional alteration be approved by the electors at a referendum. Such a requirement, although extra-parliamentary 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. 398 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. Zelling J: 413 In the alternative Mr Williams [counsel for West Lakes] argued that the statute provided a manner and form outside the Colonial Laws Validity Act 1865. 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 1865. 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 [2.400]

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West Lakes v South Australia cont. 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 1865, 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 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. 414 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 1969 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. 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. [Matheson J agreed on the outcome, that is, that the proposed legislation was valid. Because it was not a law respecting the constitution, powers and procedures of the legislature, the proviso in CLVA s 5 was not relevant and he rejected the argument that the present facts fell within the Ranasinghe principle.]

[2.410] A later law providing for the reconstitution of a legislature by abolishing a house,

adding a house, establishing special majorities for deadlock situations, will usually be a law which can be characterised as being with respect to the constitution, powers and procedure of the parliament. In Trethowan’s Case (at 429–430), Dixon J described this as follows: 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 power 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.

In order for the manner and form provision to bind future parliaments, the provision itself must be mandatory, as opposed to merely directory or optional. In Clayton v Heffron (1960) 105 CLR 214, in addition to the various steps, including a referendum, which had to be taken to pass into a law a Bill which had been twice rejected by the Legislative Council, a free conference between the managers of each house had to occur before the next step could be taken, viz, the reference of the matter to a joint sitting of Parliament. This conference had not occurred because the Legislative Council had rejected the invitation of the Legislative Assembly to such a conference, it being of the view that it would not resolve anything. The majority (at 246) held that this was not to be regarded as a mandatory procedure, and therefore failure to comply with it did not mean that there was a failure to comply with a manner and form provision.

THE ABDICATION OF LEGISLATIVE POWER [2.420] The other major limitation on the efficacy of manner and form provisions is that

manner and form requirements must not purport to abdicate legislative power. 120

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An Overview of Manner and Form in Australia [2.430] G Carney, “An Overview of Manner and Form in Australia” (1989) 5 Queensland University of Technology Law Journal 69 at 82–85 (footnotes omitted) (e) Manner and form requirements must not purport to abdicate legislative power 82 A distinction must be drawn between a manner and form provision which regulates the procedure by which future legislation is enacted, that is, the law-making process, and a provision which purports to deprive Parliament of the power of law-making. The latter provision may be either one which intends to deprive Parliament of one of its powers or it may be a provision which in practice has that effect. An example of the former kind is a provision which prohibits any repeal of the law forever or for a number of years. Another example would be a provision which confers on the Governor-in-Council sole power to amend certain legislation by issuing orders-in-council thereby purporting to deprive Parliament of its power to amend such legislation. An example of a provision which in practice has the effect of denying Parliament one of its powers is a provision which requires a bill to be approved by 99% of the electorate at a referendum before being presented for royal assent. Since such a percentage in a referendum is impossible to achieve, the provision in effect, 83 purports to deny Parliament one of its powers. Both of these examples fall outside the contemplation of section 6 since neither regulate the manner and form of future legislation and are totally ineffective if not invalid. There is, as well, a related and well-established principle applicable to all Australian State Parliaments, namely Parliament cannot abdicate any of its powers. But it would appear that this principle is distinct from [the point presently being dealt with]. The principle that Parliament cannot abdicate its powers was established in a series of cases (R v Burah (1878) 3 App Cas 889; Hodge v The Queen (1883) 9 App Cas 117; and Powell v Apollo Candle Co Ltd (1885)) concerned with the capacity of a colonial or State Parliament to delegate one or more of its powers to the Executive. The Privy Council recognised that a grant of power to make laws for the peace, order and good government of a colony or State was a grant of plenary power subject only to the few restrictions imposed by the Imperial Parliament. Accordingly, as colonial and State legislatures were not merely delegates of the Imperial Parliament, they possessed the capacity to delegate one or more of their powers to the Executive provided they did not abdicate their powers. The test stated by the Privy Council as to whether an abdication of power has occurred is simply whether Parliament has always retained the capacity to revoke the delegation and recall the power to itself. In Cobb and Co Ltd v Kropp ([1967] AC 141) the Privy Council upheld Queensland’s transport legislation which authorised the Commissioner for Transport to fix and impose licence fees. No abdication of power had occurred because: [The Queensland Legislature] preserved their own capacity intact and they retained perfect control over the Commissioner for Transport insomuch as they could at any time repeal the legislation and withdraw such authority and discretion as they had vested in him. (ibid at 156) In applying this test to either of the examples given above of a provision which purports to deprive Parliament of one of its powers, it simply requires one to determine whether the provision can be repealed. This depends on whether the provision is singly or doubly entrenched. Only if it is doubly entrenched is the provision incapable of repeal and if it purports to deprive Parliament of one of its powers, then it will amount to an invalid abdication of power. If the provision is singly entrenched, then in terms of the principle stated above, no abdication of power has occurred. However, as noted earlier, the principle that Parliament cannot abdicate its power, is distinct from point (e) Whether the principle adopted by Cobb & Co Ltd v Kropp is infringed depends upon the provision being doubly entrenched, whereas non-compliance with point (e) arises irrespective of any determination of single or double entrenchment – indeed, it must so arise for such a determination can only be made after the validity and effectiveness of the manner and form provision is decided. In other words, unless the provision prescribes a manner or form for law-making, it is not an effective manner and form provision within the contemplation of s 6. Another principle quoted in the context of manner and form is that stated by the Privy Council in In re The Initiative and Referendum Act ([1919] AC 935): a legislature cannot “create and endow with its own capacity a new legislative power not created by the Act to which it owes its existence” (ibid at 945). In [2.430]

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An Overview of Manner and Form in Australia cont. that case, the Privy Council held invalid The Initiative and Referendum Act (Manitoba) which established a new process of law-making outside of the Parliamentary 84 process whereby proposed laws could be initiated by a percentage of electors and actually enacted into law by obtaining majority approval at a referendum. The invalidity of the Act arose out of the deletion from the legislative process of the Governor’s assent. Without deciding the case on the principle just quoted, it was referred to as another serious problem with the Act. The principle was stated after a recognition that Parliament can delegate its powers to subordinate agencies “while preserving its own capacity intact” (ibid). This principle appears to concern a situation in which Parliament delegates its powers to a body which is not authorised by the constitutional framework. A manner and form provision which confers on such a body the power of future enactment will be invalid for infringing this principle. And this would seem to be the case whether the manner and form provision is singly or doubly entrenched. But the Australian State Parliaments and possibly even the United Kingdom Parliament, can reconstitute themselves, for example, by abolishing one of the two houses as occurred in Queensland in 1921 or by introducing another chamber, such as, the electorate when a referendum requirement is imposed for the enactment of certain legislation. Although such a reconstitution may involve an abdication of power by the original parliament by transferring the power to a new legislative body, the transfer of power is valid. The capacity of Parliament to reconstitute itself is considered later as one of the grounds upon which a manner and form provision may be binding outside s 6. Both Comalco’s Case and West Lakes Case in relation to their own facts dealt with the issue whether the alleged manner and form provision purported to deprive Parliament of its power to vary the agreement in question. As a question of statutory interpretation, different constructions may be given to such provisions which is evident from Comalco’s Case. Section 4 of the 1957 Act stipulated that any variation to the agreement in the schedule to the Act required the consent of Comalco and the relevant Minister and was to be given effect by the Governor-in-Council. Wanstall SPJ interpreted section 4 as depriving Parliament of its power to vary the agreement: … to the extent to which [s 4] purports to restrain the Legislature from enacting legislation effecting a variation without agreement of the plaintiff it is plainly invalid, unless it could be construed as a manner and form provision. But it overstrains the latter concept to include in it a provision which touches the Legislature only by impliedly depriving it of legislative power on the subject matter of the agreement. The nettle that must ultimately be grasped by the argument is its logical conclusion that, by s 4, Parliament has set up a body with legislative power, the power of amending an agreement having the force of a law enacted by Parliament, and to do so to the exclusion of Parliament which cannot take the matter of variation directly into its own hands. Thus would the Queensland Legislature “create and endow with its own capacity a new legislative power not created by the act to which it owes its existence”. (In re The Initiative and Referendum Act [1919] AC 935; Cobb and Co Ltd v Kropp [1967] 1 AC 141 at 157). I would hold invalid an enactment purporting to do that. (cf The Queen v Burah (1878) 3 App Cas 889, 905 PC.) It is not entirely clear why his Honour applied the principle from In re The Initiative and Referendum Act for it would have been more appropriate to rely on the distinction between a provision which regulates and one which deprives Parliament of its law-making powers. However, earlier in his judgment, Wanstall SPJ referred to the principle of 85 Cobb & Co Ltd v Kropp and how s 4 appeared to infringe this principle for Parliament had delegated the power of varying the agreement, to the company and the Executive without retaining “… intact its own power to withdraw or to alter the authority it has conferred upon its agent …”. He rejected the argument that Parliament’s right to disallow any order-in-council giving effect to a variation of the agreement, prevented any abdication of power occurring. It is difficult to see how Parliament lost its power to revoke the delegation of power when s 4 was only singly entrenched and hence, could be repealed by an ordinary Act of Parliament. Hoare J in dissent agreed with the interpretation of s 4 by Wanstall SPJ that it conferred the power of variation solely on the Executive with Comalco’s consent but found no abdication of power by Parliament. His Honour recognised that a provision requiring first an agreement before a variation 122

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An Overview of Manner and Form in Australia cont. could occur raised certain difficulties as a fetter on Parliament but these difficulties were overcome in this case after taking into account the general purpose of the 1957 Act, the arbitration provisions and Parliament’s power of vet in s 5(4) of the Act. In contrast, is Dunn J who interpreted s 4 as merely restricting the power of the Executive to vary the agreement and so not depriving Parliament of any power in relation to the agreement. In West Lakes Case, the alleged manner and form provision was interpreted by the Full Court of South Australia so as not to deprive Parliament of any power but merely to restrict the capacity of the Executive to vary the agreement. King CJ discussed the need to distinguish between provisions which prescribe the manner and form for the exercise of power, and those which deprive Parliament of power. The Chief Justice identified particular difficulties with certain kinds of requirements: (i) a special majority requirement for the passage of proposed legislation through Parliament may reach “a point at which [such a] 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”, and (ii) extra-parliamentary requirements such as 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 present), does not, to my mind, prescribe a manner or form of law-making, but rather amounts to a renunciation pro tanto of the law-making power. Such a provision relates to the substance of the law-making power, not to the manner or form of its exercise”. In relation to this last point, King CJ appears to hold that the only valid extra-parliamentary consent to which the legislature can be subjected is that of the electorate. Requiring the consent of any other body amounts to a deprivation of power.

[2.440]

Notes&Questions

For a detailed examination of restrictive procedures, see G Carney, The Constitutional Systems of the Australian States and Territories (2006), ch 6.

STATE PARLIAMENTS AND EXTRA-TERRITORIAL LAWS [2.450] Section 2(1) of the Australia Act 1986 (Cth) provides 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”. Section 2(2) of that Act provides that: 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.

Any doubts about the ability of the Commonwealth Parliament to make laws having extra-territorial effect were removed by the adoption of the Statute of Westminster 1931 (UK) which provided by s 3 that it “is hereby declared and enacted that the Parliament of a Dominion has full power to make laws having extra-territorial operation.” However, in relation to State Parliaments an element of uncertainty remains as to the precise limits of the competence of State Parliaments to enact laws with extra-territorial effect. Moreover, there is the issue whether the above sections of the Australia Act 1986 effected any change to the position existing prior to its enactment, given that these sections retain the use of the formula [2.450]

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“peace, order and good government of that State.” These words, or words to that effect, in State Constitutions had previously been used as a basis for imposing limitations on the extra-territorial competence of State legislatures. Originally, a very restrictive approach was adopted whereby colonial legislatures were the restricted in their legislative competence to their own territories. Over time, this strict approach was liberalised. This became evident in the decision of Broken Hill South Ltd v Commissioner of Taxation (NSW) (1937) 56 CLR 337. Dixon J (at 375) reasoned that: 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. As in other matters of jurisdiction or authority courts must be exact in distinguishing between ascertaining that the circumstances over which the power extends exist and examining the mode in which the power has been exercised. No doubt there must be some relevance to the circumstances in the exercise of the power. But it is of no importance upon the question of validity that the liability imposed is, or may be, altogether disproportionate to the territorial connection or that it includes many cases that have been foreseen.

Thus, the “peace, order and good government” formula, and its variants, was not to be treated as an impediment to the extra-territorial legislative competence of State Parliaments if a sufficient nexus with the legislating State could be established. In the following case, Gibbs J was rather inclined to the view that the State legislatures were empowered to remove the territorial limitation. The case, and the judgment of Gibbs J in particular, established the approach which the High Court was to adopt with respect to the requisite nexus requirement.

Pearce v Florenca [2.460] Pearce v Florenca (1976) 135 CLR 507 at 513–525 [The Fisheries Act 1905–1975 (WA) contained the following relevant provisions: 3(1) “Western Australian waters” include the sea from high-water mark to three nautical miles from low-water mark … 24(1) A person who without lawful authority 1. has in his possession or control, or on his premises, or in any boat, vehicle, or aircraft, any fish (whether taken within Western Australian waters or elsewhere); 2. sells or causes to be sold, offers or exposes for sale, gives or consigns any fish (whether taken within Western Australian waters or elsewhere); or 3. brings into Western Australian waters or into the State any fish, of any of the species mentioned in the Second Schedule to this Act, of a less length than that set opposite to the name of that fish in that Schedule, commits an offence. The Sea and Submerged Lands Act 1973 (Cth) provided:

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Pearce v Florenca cont. 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. Florenca was charged under the Western Australian Act with being in possession of undersized fish. Evidence established that at the relevant time, Florenca was the captain of a vessel which was at sea, one and a half to two miles from the coast of Western Australia. At Florenca’s trial, the charge was dismissed on the ground that the Seas and Submerged Lands Act 1973 (Cth) rendered s 24 of the Fisheries Act 1905–1975 inoperative beyond the low-water mark on the coast of Western Australia. Whilst the matter was pending appeal in the Supreme Court of Western Australia, the Attorney-General (WA) applied successfully for the matter to be removed into the High Court of Australia. Barwick CJ, Gibbs, Stephen, Mason, Jacobs and Murphy JJ upheld the validity of the State legislation.] Gibbs J: 513 … The apparent object of s 24 is to prevent the fishing-grounds off the Western Australian coast (at least within “Western Australian waters”) from being depleted as a result of the taking of undersized fish. The words of s 24(1)(a) are quite general, and are not expressed to be limited to “Western Australian waters”. However, it could not have been the intention of the Legislature that s 24(1)(a) should apply to a boat in the waters of any part of the world … The fact that it does not matter for the purposes of the section where the fish were taken does not mean that it is of no importance where the boat was found. Some limitation must be placed on the generality of the words of s 24(1)(a), in accordance with the “rule of construction for confining the operation of general language in a statute to a subject [514] matter under the effective control of the Legislature” (Barcelo v Electrolytic Zinc Co of Australasia Ltd (1932) 48 CLR 391 at 423) … It would tend to defeat the object of the section if its provisions were restricted in their operation to the land territory of Western Australia and to internal waters of the kind mentioned in s 14 of the Seas and Submerged Lands Act 1973 – bays, gulfs, estuaries, rivers, creeks, inlets, ports and harbours within State limits. It was obviously intended by the Legislature that s 24(1)(a) should apply to boats within “Western Australian waters” at least, and the general words of the section should not be restricted to prevent them from applying to such waters, unless to give them an operation within those waters would transcend the legislative power of the State. Section 24(1)(a) would of course validly operate within “Western Australian waters” if the territory of a State includes the waters of the sea adjacent to the coast from low-water mark to the three-mile limit – which I shall for convenience call “the off-shore waters”. However, the majority of the Court in New South Wales v The Commonwealth (“the Seas and Submerged Lands Case”) (1975) 131 CLR 337 were of the opinion that the off-shore waters are not part of the respective territories of the States. That is an opinion that I am not able to share but I shall assume it to be correct. On that assumption, it becomes necessary to consider whether it would be within the competence of the Legislature of the State to give the provisions of s 24(1)(a) an operation which would extend beyond the territorial limits of Western Australia to the off-shore waters beyond those limits. … Of course … a legislature which passes a law having extra-territorial operation may find that the legislation proves to be unenforceable but it does not follow that the legislation is invalid on that account. Another explanation of the principle that colonial legislatures are subject to limitations in respect of their power of enacting legislation which has an extra-territorial effect is that it derives from the fact that a colonial legislature is empowered only to legislate for the “peace, order and good government” of the colony and that those words themselves import a territorial connexion. This explanation has been so often repeated in judgments of this Court and in the Judicial Committee that it seems necessary to regard it as correct. However, to accept it raises certain logical difficulties. By s 5 of the Colonial Laws Validity Act 1865 (IMP) every representative legislature was given “full power to make laws respecting the Constitution, powers and procedure of such legislature” and it is difficult to see why, if the suggested limitation arises from the words of the Constitution of a State, that limitation might not simply be [2.460]

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Pearce v Florenca cont. removed, nowadays at least, by the State legislature itself amending its Constitution and increasing its own powers. Moreover, the same words appear in s 51 of the Commonwealth Constitution and they do not there appear to have a similarly restrictive effect, at any rate since the passage of the [516] Statute of Westminster 1931 … The doctrine as to the limitation on the power of colonial legislatures to legislate with extra-territorial effect, as originally enunciated, proved to be too widely stated. It is misleading to refer to it as a “doctrine forbidding extra-territorial legislation” … The power of a subordinate legislature (as colonial, State and Dominion legislatures have sometimes been called) to enact legislation that takes effect beyond territorial limits was firmly established by the decision in Croft v Dunphy [1933] AC 156… However, the test whether a law is one for the 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 632–633), and Broken Hill South Ltd v Commissioner 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 ([1956] AC 331 at 353). In a later decision, Thompson v Commissioner of Stamp Duties, their Lordships said ([1969] 1 AC 320 at 335–336): “For the purpose of ascertaining whether there is a relevant territorial connection the scope of possible relevancy is wide.”… 518 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 … 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 154–156), 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. For over a century it was accepted by the legislatures of the colonies and the States, and by the Imperial authorities in London, and never doubted by the courts, that the jurisdiction of those legislatures extended over the off-shore waters: see R v Bull ((1974) 131 CLR 203 at 269–272, 280–282), and the Seas and Submerged Lands Case ((1975) 131 CLR 337). Of course, when the “misconception” that the off-shore waters were within the territorial limits of the States prevailed, this legislative jurisdiction could be explained as being intra-territorial. Since the Seas and Submerged Lands Case, a different explanation must be given. In that case I expressed the view (at 404–405) that not all of the colonial legislation taking effect in the off-shore waters could be regarded as sufficiently connected with the colony in question to be within power, assuming the legislation to be extra-territorial in operation. However, the acceptance of the views expressed by the majority in the Seas and Submerged Lands Case would require me to modify that opinion. There is nothing in that decision that makes it necessary to hold that colonial and State legislation, for so long universally treated as valid, was in truth beyond power. On the assumption that the legislation was extra-territorial, I would, with respect, accept the view expressed by Mason J in the Seas and Submerged Lands Case, that the power to make laws for the peace, order and good government of the colony was 519 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. It does not appear that any law of a colony or State has ever been held invalid in its operation within the 126

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Pearce v Florenca cont. off-shore waters, only on the ground that it lacked sufficient connexion with the colony or the State. Legislation of a kind accepted for over a hundred years as being validly enacted is not lightly to be overturned, with consequences gravely inconvenient for the administration of the laws of the States, and in some cases with disturbance to old-established proprietary rights. When after so many years we are asked to declare for the first time that such legislation is ultra vires, we may well pause to consider what reason exists to deny the States power to enact legislation taking effect within their off-shore waters. 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 so-called 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 touchstone 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. If in the opinion of the Commonwealth Parliament a State law infringed a rule of international law relating to the off-shore waters, the Parliament could by appropriate legislation inconsistent with the State law render the latter invalid. From the 520 point of view of the Commonwealth, no necessity exists to rely as against the States on any principle or territorial nexus; 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 off-shore 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 …

[2.470]

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Notes&Questions

The liberal application of the nexus requirement is clearly apparent from this case. However, the requirement remains rather nebulous in definition. Gibbs J stated above that “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” (at 517). His Honour recognised the difficulty in the application of such a law (at 518): 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.

Is the solution suggested, coupled with a liberal application, sufficiently precise to determine the exact boundaries of extra-territorial State legislative competence? (2)

Gibbs J (at 515) expressed his support for the argument of Trindade that any limitation on extra-territorial laws could simply be removed by State legislatures pursuant to their plenary power conferred by the CLVA. Can this be reconciled with the wording in CLVA, s 5 that the power granted therein to legislatures is “in respect of the Colony under its jurisdiction”? (Emphasis added.) Given the repeal of the CLVA by the Australia Act 1986 (Cth), it may not be necessary to resolve this question. Section 2 of [2.470]

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the Australia Act 1986, does however maintain the “peace, order and good government” formula and, accordingly, the issue of a nexus requirement with the relevant State remains a critical consideration. The case which follows examined the position following the enactment of the Australia Acts in 1986. In addition, the case made reference to the important question of territorial limitations on State legislative powers, inter se, which are expressed or implied in the Commonwealth Constitution.

Union Steamship v King [2.480] Union Steamship Co of Australia Pty Ltd v King (1988) 166 CLR 1 at 6–14 [The respondent, King, was an employee of the Union Steamship Co who had made a claim for injuries (“boilermaker’s deafness”) suffered whilst employed on one of the company’s ships registered in New South Wales. The claim was brought under the Workers’ Compensation Act 1926 (NSW). Under the Seamen’s Compensation Act 1911 (Cth), he would not have been entitled to compensation because his capacity to earn full wages had not been impaired. However, pursuant to s 46 of the Workers’ Compensation Act 1926 (NSW), this would not constitute a bar to his claim. At issue in the High Court was whether the relevant provisions of s 46 of the Workers’ Compensation Act 1926 (NSW) were valid laws of the State of New South Wales as laws for the “peace, welfare and good government” of that State. (Also considered was whether the relevant provision of the State law was inconsistent with the Commonwealth Act.) A unanimous court in a joint judgment held the NSW Act valid and found there to be no inconsistency with the Commonwealth legislation.] Mason CJ, Wilson, Brennan, Deane, Dawson, Toohey and Gaudron JJ: 6 … At the trial it was common ground that the respondent’s claim arose out of s 46 of the State Act. That section provides: 1. This Act applies in respect of an injury to a worker who is a seaman employed on a New South Wales ship or a ship whose first port of clearance and whose destination are in New South Wales. 2. In this section the term “New South Wales ship” means any ship which is – (a) registered in this State … 8 As the ship on which the respondent was engaged was a New South Wales ship, this case falls fairly and squarely within the embrace of s 46 and is governed by its provisions… The question then is whether s 46 is a valid exercise of the power of the Parliament of New South Wales to make laws for the peace, welfare and good government of the State. The appellant submits that it is not such a law on the ground that there is no sufficient nexus between the law and the territory of New South Wales. In 9 support of this submission the appellant says that registration may be a mere convenience for foreigners and that there may be many situations in which a ship registered in New South Wales is made the subject of contractual and other arrangements and put to uses which are entirely remote from New South Wales. 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… 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. Such a power is a plenary power and it was so recognized, even in an era when emphasis was given to the character of colonial legislatures as subordinate law-making bodies. … 10 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. … But when it came to legislation having an extraterritorial operation, it was thought that colonial legislatures were incompetent to enact such legislation. [The Court referred to earlier authorities such as Macleod v Attorney-General (NSW).] … 11 The need to protect British maritime and commercial 128

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Union Steamship v King cont. interests from colonial legislation operating outside colonial boundaries and the possibility that colonial laws or acts done under such laws might involve Great Britain in a breach of international law or of an international obligation were prominent factors which contributed to the development of the doctrine. How far the doctrine went in inhibiting a colony from enacting a rule of conduct for its subjects or residents outside its boundaries was not altogether clear. … 12 It is now accepted beyond any question that colonial legislatures had power to make laws which operate extraterritorially: Bonser v La Macchia (1969) 122 CLR 177 at 189, 224–225; Reg v Bull (1974) 131 CLR 203 at 263, 270–271, 280–282; New South Wales v The Commonwealth (“the Seas and Submerged Lands Case”) (1975) 135 CLR 337; (1976) 135 CLR 507 at 468–469, 494–495 (ClR), 514– 520, 522 (CLR). The same comment applies with equal force to the Parliaments of the Australian States. … 14 And, as each State Parliament in the Australian federation has power to enact laws for its State, it is appropriate to maintain the need for some territorial limitation in conformity with the terms of the grant, notwithstanding the recent recognition in the constitutional rearrangements for Australia made in 1986 that State Parliaments have power to enact laws having an extraterritorial operation: see Australia Act 1986 (Cth), s 2(1); Australia Act 1986 (UK), s 2(1). That new dispensation is, of course, subject to the provisions of the Constitution (see s 5(a) of each Act) and cannot affect territorial limitations of State legislative powers inter se which are expressed or implied in the Constitution. That being so, the new dispensation may do no more than recognize what has already been achieved in the course of judicial decisions. Be this as it may, it is sufficient for present purposes to express our agreement with the comments of Gibbs J in Pearce ((1976) 135 CLR at 518) where his Honour stated that the requirement for a relevant connexion between the circumstances on which the legislation operates and the State should be liberally applied and that even a remote and general connexion between the subject-matter of the legislation and the State will suffice. Once this position is reached, the rejection of the appellant’s submission that s 46 is ultra vires becomes inevitable. The fact that the ship is registered in New South Wales is a sufficient connexion with the State to enable the Parliament to apply its laws to the ship and to justify the application to seamen employed on that ship of a statute entitling them as against their employer to workers’ compensation benefits. … [The judgment then turned to deal with the issue of the inconsistency of the State law with the Commonwealth law, finding that there was none.]

[2.490]

(1)

(2)

(3)

Notes&Questions

Although the territorial nexus requirement may now appear to be a rather insignificant hurdle to validity, it nevertheless remains as a limitation. See, for instance, Lipohar v The Queen (1999) 200 CLR 485. What position did the Court adopt in relation to the “new dispensation” represented by the Australia Act 1986? Does s 2(1) thereof, which provides that each State has “full power to make laws for the peace, order and good government of that State that have extra-territorial operation” represent a change to the position with respect to the extra-territorial competence of State legislatures, or is the prior position, as indicated by Gibbs J in Pearce v Florenca, maintained? Whilst the question of territorial limitations inter se arising from the federal nature of the polity under the Commonwealth Constitution were referred to, there was no elaboration on this point. Consideration was given to this question in the following case in Mobil Oil Australia Pty Ltd v Victoria (2002) 211 CLR 1 where a unanimous High Court upheld the validity of Victorian legislation which made provision for “group proceedings”, that is, class actions, in the Supreme Court of Victoria. All the justices confirmed the position in relation to the requisite territorial nexus as [2.490]

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(4)

(5)

expounded in Union Steamship, although there was some variation as to how they applied the test on these facts. Gleeson CJ, Gaudron, Gummow, Kirby and Hayne JJ, Callinan J dissenting, held that there was a sufficient territorial nexus between the subject matter of the legislation and the State of Victoria. Gleeson CJ, Gaudron, Gummow and Hayne JJ based their conclusion on the ground that, if the defendant was served within the jurisdiction, any requirement for a territorial nexus was to be found in the defendant’s connection to the jurisdiction by presence in Victoria at the time of service. Kirby J based his conclusion on the ground that the requirement that group members’ claims should give rise to a substantial common question of law or fact, and the court in which the implementation of Pt 4A was reposed, afforded a strong assurance against the possibility that the claims of a group member, covered by an order under Pt 4A, would not have a sufficient connection with Victoria. Callinan J read the section down, however, to require a far more precise connection with Victoria to establish the nexus requirement. (see 82 [190]) There was some passing reference in the judgments to extra-territorial inter se limitations on State legislation based on federal considerations. Kirby J alone expanded on this issue (at 49–54 [102]–[112]ff) when he considered the nature of any territorial limitations which may apply when a State law purports to have application in another State and a conflict between State laws arises. He noted that there may be situations where this inter se issue may not be capable of resolution by reliance on intergovernmental immunity principles, or indeed general conflict of law principles. If the matter did clearly arise, and was incapable of resolution by reference to these principles, perhaps, as hinted at by Kirby J, the better resolution may be “the almost inevitable intergovernmental negotiations” to obviate the necessity of the matter being resolved by the High Court (at [142]). See also BHP Billiton v Schultz (2004) 221 CLR 400 at 443 [93] (Gummow J), 473–474 [198]–[200] (Callinan J). A third High Court decision which confirmed the position on the territorial nexus requirement was Port Macdonnell Professional Fishermen’s Association Inc v South Australia (1989) 168 CLR 340. At issue was the validity of provisions in the Fisheries Act 1982 (SA) which, inter alia, provided for the regulation of fisheries within 200 nautical miles of the State coast. The Court (Mason CJ, Brennan, Deane, Dawson, Toohey, Gaudron and McHugh JJ) (at 372–373) held unanimously that the critical consideration was not the distance from the coast of the management areas, but rather “the existence and nature of the connexion between South Australia and activities which constitute the fishery in the assigned area.” The Court adopted and applied the rule established in Pearce v Florenca and Union Steamship. It held that the management of fisheries relate to a finite resource available for exploitation, and exploited by, South Australian residents, which also constituted a significant source of South Australian trade and employment. It also expressly considered the territorial limitations based on federal considerations referred to in Union Steamship. As the management plan did not extend to include waters over which Victoria might have an equal or stronger claim, this territorial limitation was not breached. For a detailed examination of this issue, see Carney (2006), ch 7.

STATE COURTS AND THE SEPARATION OF JUDICIAL POWER [2.500] In Chapter 13 the separation of judicial power in Ch III of the Commonwealth

Constitution is discussed in some detail. Its rigorous application, especially following R v Kirby; Ex parte Boilermakers’ Society of Australia (1956) 94 CLR 254, established considerable limitations on the legislative power of the Commonwealth Parliament. However, 130

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until the mid-1990s, there had been no decision which had held that the separation of judicial power in Ch III of the Commonwealth Constitution resulted in limitations on the legislative competence of State legislatures. This position was substantially altered by the Kable decision extracted below, a decision as unexpected as it was novel. Its significance lay in its imposition of limitations on State parliaments, emanating from Ch III, when legislating with respect to their own State courts vested with federal jurisdiction – even when they were not exercising federal jurisdiction. No court had held that the separation of powers doctrine was legally entrenched in any State constitution. In fact, this had been expressly rejected: in NSW, in Building Construction Employees & Builders Labourers’ Federation of NSW v Minister for Industrial Relations (1986) 7 NSWLR 372 and Clyne v East (1967) 68 SR (NSW) 385; in Victoria, in City of Collingwood v State of Victoria (No 2) [1994] 1 VR 652; in South Australia, in Gilbertson v South Australia [1978] AC 772 (PC); and in Western Australia, Nicholas v Western Australia [1972] WAR 168. The decision of Kable thus appeared, at first, to have ushered in a quiet revolution in this respect.

Kable v DPP (NSW) [2.510] Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51 at 109–124 (some footnotes omitted) [The impugned statute was the Community Protection Act 1994 (NSW). The key provision, s 5, provided as follows: (a) On an application made in accordance with this Act, the Court may order that a specified person be detained in prison for a specified period if it is satisfied, on reasonable grounds: (a) that the person is more likely than not to commit a serious act of violence; and (b) that it is appropriate, for the protection of a particular person or persons or the community generally, that the person be held in custody. (b) The maximum period to be specified in an order under this section is 6 months. (c) An order under this section may be made against a person: (1) whether or not the person is in lawful custody, as a detainee or otherwise; and (2) whether or not there are grounds on which the person may be held in lawful custody otherwise than as a detainee. (d) More than one application under this section may be made in relation to the same person. A “serious act of violence” was defined (s 4) as one being committed by one person against another that has a real likelihood of causing death or serious injury to the other person or that involves sexual assault in the nature of certain offences under the Crimes Act 1900 (NSW). The “Court” was defined as the Supreme Court of New South Wales. Proceedings for detention orders were civil proceedings (s 14), determined by reference to the balance of probabilities (s 15). Only the Director of Public Prosecutions could apply for a preventive detention order under s 5 or an interim detention order under s 7 (s 8). As the Act was making its way through Parliament in its Bill stage, it was amended to limit the generality of the above provisions, in effect rendering them applicable only to a single individual, Gregory Wayne Kable. Section 3 thus provided that: (i) The object of this Act is to protect the community by providing for the preventive detention (by order of the Supreme Court made on the application of the Director of Public Prosecutions) of Gregory Wayne Kable. (ii) In the construction of this Act, the need to protect the community is to be given paramount consideration. (iii) This Act authorises the making of a detention order against Gregory Wayne Kable and does not authorise the making of a detention order against any other person. … [2.510]

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Kable v DPP (NSW) cont. It was the imminent release of Kable from custody which motivated the enactment and the application for his further detention. Kable had originally been charged with the murder of his wife, stabbing her to death in the house in which she lived with the two children of the marriage. Prior to this, the appellant had engaged in violent behaviour towards her and had made threats of violence. The prosecution accepted a plea of guilty to manslaughter on the basis of diminished responsibility. Whilst in prison, Kable’s behaviour was such as to cause serious concern that, upon his release, there would be a repetition of the same conduct that led to the death of his wife. In particular, he wrote a series of threatening letters, mainly to relatives of his deceased wife. The DPP’s application was based on this conduct. In February 1995, Levine J issued a detention order for a period of six months. The NSW Court of Appeal dismissed an appeal from this order on 9 May 1995 (Kable v Director of Public Prosecutions (1995) 36 NSWLR 374) and Kable was granted special leave to appeal to the High Court, which resulted in these proceedings. On 21 August 1995, Grove J refused to issue a further order. Kable challenged the validity of the Act. The majority, Toohey, Gaudron, McHugh and Gummow JJ, held the Act to be invalid. Brennan CJ and Dawson J dissented.] The States do not have unlimited power in respect of State courts McHugh J: 109 Subject to the operation of the Commonwealth of Australia Constitution Act 1900 (IMP) (the Constitution), the State of New South Wales is governed by the New South Wales Constitution. The latter Act is not predicated on any separation of legislative, executive and judicial power although no doubt it assumes that the legislative, executive and judicial power of the State will be exercised by institutions that are functionally separated. Despite that assumption, I can see nothing in the New South Wales Constitution nor the constitutional history of the State that would preclude the State legislature from vesting legislative or executive power in the New South Wales judiciary or judicial power in the legislature or the executive. Nor is the federal doctrine of the separation of powers – one of the fundamental doctrines of the Constitution – directly applicable to the State of New South Wales. Federal judicial power may be vested in a State court although that court exercises non- 110 judicial as well as judicial functions. Moreover, when the Parliament of the Commonwealth invests the judicial power of the Commonwealth in State courts pursuant to s 77(iii) of the Constitution, it must take the State court as it finds it (Federated Sawmill, Timberyard and General Woodworkers’ Employees’ Association (Adelaide Branch) v Alexander (1912) 15 CLR 308 at 313; Le Mesurier v Connor (1929) 42 CLR 481 at 495–497; Peacock v Newtown Marrickville & General Co-operative Building Society No 4 Ltd (1943) 67 CLR 25 at 37). This is because the Constitution recognises that the jurisdiction, structure and organisation of State courts and the appointment, tenure and terms of remuneration of judges of State courts is not a matter within the legislative power of the federal Parliament. But in my opinion none of the foregoing considerations means that the Constitution contains no implications concerning the powers of State legislatures to abolish or regulate State courts, to invest State courts or State judges with non-judicial powers or functions, or to regulate the exercise of judicial power by State courts and judges. 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.” 132

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Kable v DPP (NSW) cont. One of the reasons for enacting s 77(iii) was that it was “a very convenient means of avoiding the multiplicity and expense of legal tribunals” (Commonwealth v Limerick Steamship Co Ltd and Kidman (1924) 35 CLR 69 at 90). The paragraph provides the machinery for 111 implementing that part of the declaration in s 71 of the Constitution which provides that “[t]he judicial power of the Commonwealth shall be vested in … such other courts as [the Parliament] invests with federal jurisdiction”. 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) (Silk Bros Pty Ltd v State Electricity Commission (Vic) (1943) 67 CLR 1). 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.” 112 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 Courts 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 Court 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. State courts are part of an Australian judicial system … Since 1986, this Court has been the ultimate appellate court of the nation. The right of appeal to the Privy Council having been abolished, the High Court of Australia has the constitutional duty of supervising the nation’s legal system and, 114 subject to any relevant statutory or constitutional limitations, of maintaining a unified system of common law. 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. It follows that State courts exercising State judicial power cannot be regarded as institutions that are independent of the administration of the law by this Court or the federal courts created by the Parliament of the Commonwealth. In exercising federal jurisdiction, a court of a State administers the same law as the Federal Court of Australia when it exercises the identical federal jurisdiction. In exercising federal jurisdiction, a State court must deduce any relevant common law principle from the decisions of all the courts of the nation and not merely from the decisions of the higher courts of its [2.510]

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Kable v DPP (NSW) cont. State. A judge exercising the federal jurisdiction invested in a State court must see the common law in exactly the same way that a judge of a federal court created under s 71 of the Constitution sees it. Furthermore, a State court when it exercises federal jurisdiction invested under s 77(iii) is not a court different from the court that exercises the judicial power of the State. The judges of a State court who exercise the judicial power of the State are the same judges who exercise the judicial power of the Commonwealth invested in their courts pursuant to s 77(iii) of the Constitution. Indeed, it is not uncommon for a judge of a State court to administer State legislation in the course of the exercise of federal jurisdiction. It is common ground, for example, that in this very case Levine J made his order in the exercise of federal jurisdiction because he became seized of federal jurisdiction when the appellant contended that the Act was in breach of the Constitution. 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 115 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. Other sections (ss 78, 79, 80) 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 It is axiomatic that neither the Commonwealth nor a State can legislate in a way that might alter or undermine the constitutional scheme set up by Ch III of the Constitution. … 116 Because the State courts are an integral and equal part of the judicial system set up by Ch III, it also 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. However, the Act does not seek to interfere with the invested federal jurisdiction of the Supreme Court. On its face it is directed to the exercise of State, not federal, jurisdiction. But for present purposes that is irrelevant. The compatibility of State legislation with federal judicial power does not depend on intention. It depends on effect. If, as Gibbs J pointed out in Commonwealth v Queensland ((1975) 134 CLR 298 at 314–315), State legislation has the effect of violating the principles that underlie Ch III, it will be invalid. Courts exercising federal jurisdiction must be perceived to be free from legislative or executive. 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 (R v Quinn; Ex parte Consolidated Food Corporation (1977) 138 CLR 1 at 11; Harris v Caladine (1991) 172 CLR 84 at 135, 159; Grollo v Palmer (1995) 184 CLR 348 at 365, 376–377, 392; Wilson v Minister for Aboriginal and Torres Strait Islander Affairs (1996) 189 CLR 1). 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 134

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Kable v DPP (NSW) cont. 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 117 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 non-judicial functions on a State Supreme Court in respect of non-federal 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 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 non-judicial 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 Ch 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 118 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. (Nor have I overlooked the fact that the Lord Chancellor of England is the head of the English judicial system and a member of the Government. But this historical anomaly provides no precedent for holding that membership of the executive government of a State is compatible with the discharge of judicial office in a court invested with federal jurisdiction … 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 [2.510]

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Kable v DPP (NSW) cont. 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, 119 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. The Act has the tendency to undermine public confidence in the impartiality of the Supreme Court of New South Wales. The object of the Act according to s 3(1) “is to protect the community by providing for the preventive detention (by order of the Supreme Court made on the application of the Director of Public Prosecutions) of Gregory Wayne Kable.” In construing the provisions of the Act, “the need to protect the community is to be given paramount consideration” (s 3(2)). The means by which the object of the Act is accomplished is to empower (s 5(1)) the Supreme Court to order the appellant’s detention in prison for a specified period not exceeding six months. The only condition that must be fulfilled for the making of the order is that the Court be satisfied on reasonable grounds that the appellant “is more likely than not to commit a serious act of violence; and … that it is appropriate, for the protection of a particular person or persons or the community generally, that the defendant be held in custody” (s 5(1)). Proceedings are to be commenced by summons (s 16(1)). The Court is authorised to hear and determine an application for an order “in the absence of the defendant” if it is satisfied that the summons has been served on the defendant or that all reasonable steps have been taken to serve the summons on him (s 16(2)). Somewhat inconsistently, s 17(2)(a) provides that the “Act does not affect the right of any party to proceedings under [the] Act … to appear, either personally or by the party’s legal representative.” Section 7 of the Act goes even further than s 5 in interfering with the liberty of the appellant. It provides for the making of an “interim detention order”. Section 7(1) enacts that “the Court may order that the defendant in any proceedings on an application for a preventive detention order be detained in prison for such period (not exceeding 3 months) as the Court determines”. Section 7(3) provides that, “[o]n an application … or on its own motion, the Court may extend the period of an interim detention order for such further period (not exceeding 3 months) as the Court determines if it appears that the proceedings on the application for a preventive detention order will not 120 be determined during the period currently specified in the interim detention order”. Section 7(5) provides that “[a]n interim detention order may be made, and its period extended, in the absence of the defendant”. The Act gives no right of appeal against an interim detention order. This brief summary of the central provisions of the Act shows that its object is to detain the appellant not for what he has done but for what the executive government of the State and its Parliament fear that he might do. Moreover, given the date of the Act and the date of the appellant’s release from prison for the crime for which he had been convicted, it seems clear that the Parliament expected that he would be detained on an interim basis before the Supreme Court had had the opportunity to decide whether it was satisfied that the appellant was more likely than not to commit a serious act of violence. Indeed, the Act contemplates that the interim order might be made or extended “in the absence of the defendant” (s 7(5)). Furthermore, although the Act provides for the preventive detention of the appellant only upon the making of an order by the Supreme Court, it is plain that the legislature and the executive government which introduced the Act into the Parliament of New South Wales passed the Act for the purpose of ensuring that the appellant was kept in prison. Proof of the case against the appellant was made much easier by removing any need to prove beyond reasonable doubt that he was likely to commit a serious act of violence. Although s 17(1)(a) provides that the Court “is bound by the rules of evidence”, s 17(3) goes a long way to negating that protection. That subsection enacts: 136

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Kable v DPP (NSW) cont. Despite any Act or law to the contrary, the Court must receive in evidence any document or report of a kind referred to in subsection (1), or any copy of any such document or report, that is tendered to it in proceedings under this Act. Among the documents referred to in subsection (1) are: 1. medical records and reports; 2. records and reports of any psychiatric in-patient service or prison; 3. reports made to, or by, the Offenders Review Board; 4. reports, records or other documents prepared or kept by any police officer; 121 5. the transcript of any proceedings before, and any evidence tendered to, the Mental Health Review Tribunal. 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. Apart from similar legislation passed by the Parliament of Victoria providing for the protective sentencing or the preventive detention of Garry Ian David in 1990 (Community Protection Act 1990 (Vic)), no Parliament in the Commonwealth of Australia has ever given a court a jurisdiction that is remotely similar to that which the Act gives to the Supreme Court of New South Wales. It is not merely that the Act involves the Supreme Court 122 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 [2.510]

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Kable v DPP (NSW) cont. or potential controversy as to existing rights or obligations” (R v Trade Practices Tribunal; Ex parte Tasmanian Breweries Pty Ltd (1970) 123 CLR 361 at 375) 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. Indeed, the jurisdiction conferred on the Court is hardly distinguishable from those powers and functions, concerning the liberty of the subject, that the traditions of the common law countries have placed in Ministers of the Crown so that they can be answerable to Parliament for their decisions. The jurisdiction conferred on the Supreme Court bears a remarkable similarity to the jurisdiction conferred on the Minister during wartime under reg 26 of the National Security (General) Regulations 1939 (Cth). That regulation empowered the Minister to order the detention of a person if he was satisfied that it was necessary to do so “to prevent that person acting in any manner prejudicial to the public safety or the defence of the Commonwealth.” Instead of a trial where the Crown is required to prove beyond reasonable doubt that the accused is guilty of a crime on evidence admitted in accordance with the rules of evidence, the Supreme Court is asked to speculate whether, on the balance of probabilities, it is more likely than not the appellant will commit a serious act of 123 violence. … Yet on this prediction of dangerousness, a prediction which can at best be but an informed guess by the Supreme Court, the Court is required to commit the appellant to prison. Having regard to the object of the Act, it is impossible to suppose that the Court has any discretion to refuse to imprison the appellant once it concludes that he is more likely than not to commit a serious act of violence. … No one who has read the lengthy and anxious judgment of Levine J making the order imprisoning the appellant or the judgments of the judges of the Court of Appeal upholding that order or the judgment of Grove J refusing to make a further order against the appellant could doubt their independence and impartiality in administering the law. The judgments of Levine J and the Court of Appeal demonstrate that the order against the appellant was made and upheld only because the object of the Act, the evidence and the methods and burden of proof left them no alternative to making and upholding the s 5 order. But the constitutional validity of the Act cannot depend on how the judges of 124 the Supreme Court discharge the duty that the Act imposes upon them. The Act was either valid or invalid when it was given the Royal Assent. Nothing that the judges of the Supreme Court did after its enactment could change its status as a valid or invalid piece of legislation. 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 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. The appeal should be allowed.

Notes&Questions

[2.520]

1.

The other majority justices agreed that Ch III of the Commonwealth Constitution imposed some limitations on the power of State Parliaments with respect to their respective State courts. Toohey J held that “the Act requires the Supreme Court to exercise the judicial power of the Commonwealth in a manner which is inconsistent with traditional judicial process” (at 98). The impugned provisions were incompatible with the exercise of the judicial power of the Commonwealth because they diminished public confidence in the integrity of the judiciary as an institution. Gaudron J stated (at 102) that: [n]either 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

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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.

As a result of s 77(iii) of the Constitution – the “autochthonous expedient” – State courts became an indispensable part of “the integrated judicial system for which Chapter III provides” (at 102). Her Honour continued (at 102): 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.

Thus, “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”. (at 103) Gummow J stated that because the High Court was the ultimate avenue of appeal from all State Supreme courts, “s 73 of the Constitution places this Court in final superintendence over the whole of an integrated national court system. This ensures the unity of the common law of Australia”. (at 138) He also adopted the position (at 140) that it would not be open to the States to abolish their Supreme Courts because s 73 implied their continued maintenance (at 139), as did ss 77(iii) and 79. [T]o 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.

His Honour (at 142 above) thus accepted the submissions of the appellant, that, as his Honour stated (at 126), the impugned provisions were of such a “nature and quality as to render them incompatible with the exercise by the same judicial institution of the State of the judicial power of the Commonwealth and that, as a result, the Act is invalid”. 2.

Is it possible to define precisely the Kable principle from the reasoning of the majority? At the most basic level, the principle is predicated on the view expounded by the majority that Ch III prevents State Parliaments from abolishing their Supreme Courts (because of s 73) and from abolishing their judicial system because it is necessary for them to maintain a system of “courts” to enable the vesting of federal jurisdiction for which s 77(iii) of the Constitution provides. Beyond this the precise scope of the principle remain uncertain. Is it to be defined in broad terms based on more general notions of incompatibility (or repugnance) to the exercise of federal judicial power pursuant to Ch III? Or, is it to be defined rather by the more precise criterion of independence, and perceived independence, from the State executive and legislature? [2.520]

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When examining the judgment of McHugh J, it is the more general principle, based on notions of incompatibility, which His Honour appears (at 116) to have relied on: “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”. He proceeded to give the example that neither State nor Commonwealth parliaments could legislate to require the Supreme Court to disregard the rules of natural justice or exercise legislative or executive power. He then immediately continued (at 116) by stating that “[o]ne 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”. (Emphasis added.) The remainder of the judgment proceeded to emphasise this particular limitation when setting out the limitation imposed also upon State parliaments in relation to State courts and which ultimately forms the basis for his invalidation of the Act. If this is only one of the basic limitations, what are the others? When examined in the context of the remainder of the judgment, it appears that, at the very least, this issue of independence from legislature and executive is a fundamental consideration. McHugh J stated (at 117) that “[w]hile nothing in Ch III prevents a State from conferring non-judicial functions on a State Supreme Court in respect of non-federal matters, those nonjudicial 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”. Thus, is his Honour suggesting that if the conferral of non-judicial functions did not compromise the Court’s independence, but in other respects was incompatible with the exercise of federal judicial power, would legislation be thereby rendered invalid? 3.

McHugh J did give some examples of laws which might breach Kable principle. A State law would be invalid which gave the Supreme Court power to determine issues of a purely governmental nature; for example, the determination of how much of the State Budget should be spent on child welfare or what policies should be pursued by a particular government department. The offence lay in the fact that the Supreme Court would be so closely identified with the Executive that its independence from the executive and legislative branches, or the appearance thereof, would be undermined. Similarly, certain appointments of judges as persona designata to non-judicial roles might lead to a loss, or perceived loss, of the requisite independence. He gave the example of the appointment of the Chief Justice of the Supreme Court as a member of the Cabinet. Thus, while the Kable principle is stated in broad terms of incompatibility, the criterion of the maintenance of independence from the executive and legislature branches appears to be the central consideration.

4.

When examining this question of independence, to what extent do the constitutional principles prohibiting legislative direction of the judicial branch – discussed in Chapter 13 – in the context of the separation of powers, provide relevant assistance? Could State legislation which breached the “Direction Rule” with respect to State courts be declared invalid pursuant to the Kable principle? If an affirmative answer is given, would that mean that the facts of Building Construction Employees & Builders Labourers’ Federation of NSW v Minister for Industrial Relations ((1986) 7 NSWLR 372) would be decided differently today? See F Wheeler, “BLF v Minister for Industrial Relations: The Limits of State Legislative and Judicial Power” in Winterton (2006), ch 13.

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Which limitations imposed by Ch III of the Constitution are not applicable to State legislatures? How fundamental to the application of the Kable principle is the issue of the maintenance of “public confidence” in the independence of the State judiciary? Is it, as McHugh J states, “a necessary implication of the Constitution’s plan … that no government can act in a way that might undermine public confidence in the impartial administration of the judicial functions of State courts”? See E Handsley, “Public Confidence in the Judiciary: A Red Herring for the Separation of Judicial Power” (1998) 20 Sydney Law Review 183. This issue was taken up in Fardon v AttorneyGeneral (Qld) (2004) 223 CLR 575 extracted at [2.550]. An important step in the reasoning of the majority justices is that the State courts are an essential part of an integrated system of courts provided for by Ch III of the Constitution, reliance being placed by the majority justices on ss 77(iii) and 73 in particular. How is this reconciled with the acknowledgement by the majority justices that the Commonwealth Parliament, when vesting federal jurisdiction in State courts, must take those courts “as it finds them”? As to whether the order made pursuant to the Community Protection Act 1994 (NSW) was a “judicial order” see: New South Wales v Kable (2013) 252 CLR 118.

[2.530] Brennan CJ and Dawson J rejected the existence of these novel limitations on State

legislatures vis-à-vis State courts, recognised by the majority justices as emanating from Ch III of the Commonwealth Constitution. That is, they rejected the “Kable principle”. The relevant Ch III limitations which they did acknowledge were those which pre-existed Kable. Dawson J found that the contention that there is a separation of judicial power at the State level was unsupportable and that “[i]n providing for the vesting of federal jurisdiction in State courts, s 77(iii) plainly contemplated that jurisdiction might be vested in a court which did not have the characteristics required of a federal court under Ch III” (at 80). Dawson J went on to quote (at 81) Knox CJ, Rich and Dixon JJ in Le Mesurier v Connor ((1929) 42 CLR 481 at 495–496) who stated that: The Parliament may create Federal Courts, and over them and their organisation 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 organisation through which its powers and jurisdictions are exercised.

His Honour found that the Commonwealth Constitution does not protect the independence of State judges as it does, by s 72, for federal judges. He conceded (at 82) that: some qualifications must be placed upon the statement that the federal Parliament must, in exercising its power under s 77(iii), take a State court as it finds it. Under s 79 Parliament may prescribe the number of judges to exercise federal jurisdiction. And clearly Parliament may extend the jurisdiction of the court because that is precisely what s 77(iii) envisages. Also it may regulate the practice and procedure which the State court is to follow in exercising the invested jurisdiction. But it may go no further than is necessary for that purpose; it may not legislate with respect to the court itself…(83) The result is that, so long as they are in fact courts, Ch III is unconcerned with whether they comply with the requirements of Ch III for courts created by or under that chapter.

This meant that the fact that State courts can exercise non-judicial functions of an executive or legislative nature precluded the arguments being put by the appellants and it was irrelevant that the Supreme Court of New South Wales was exercising federal jurisdiction. [2.540] Brennan CJ upheld the validity of the legislation on similar grounds. He stated (at

66–67) that: [2.540]

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no functions that are not judicial can be conferred by the Commonwealth Parliament on a State court and thus the separation of State courts from the Legislative and the Executive branches of the Commonwealth Government is secured. But that separation does not purport to effect a separation of the courts of a State or Territory from the legislature or executive of the State or Territory. Nor does the Constitution purport to preclude State Parliaments from conferring a non-judicial power on a State court. It would be surprising if it did. Such a provision would have destroyed the State laws investing mining warden’s courts, licensing courts and planning courts – to take only some instances – with extensive administrative powers.

In rejecting the arguments based on the “autochthonous expedient” in the Commonwealth Constitution (s 77(iii)) his Honour stated (at 67) that: [i]t has been accepted constitutional doctrine that, when the Commonwealth invests the judicial power of the Commonwealth in a State court, it must take that court constituted and organised as it is from time to time. The autochthonous expedient contained in Ch III providing for the vesting of federal jurisdiction in State courts left to the Commonwealth Parliament the selection of the courts in which federal jurisdiction should be invested. The submission that a State court cannot be a repository of both State non-judicial power and federal judicial power if the exercise of the former would be incompatible with the exercise of the latter attributes to Ch III a novel operation. On one approach Ch III would limit the power of the Parliament of a State to invest the courts of the State with incompatible non-judicial powers. On another approach, Ch III would limit the power of the federal Parliament to invest some State courts with federal jurisdiction. And on a third approach, the investing by the Commonwealth Parliament of federal jurisdiction in a State court would preclude the State Parliament from investing an incompatible non-judicial power in that State court. In my opinion, Ch III does not operate in any of those ways.

He added (at 68): [o]f course, novelty is not necessarily a badge of error but a suggestion that the power to invest State courts with federal judicial power might be limited or that the power of a State to invest the State’s courts with non-judicial power might be limited would surely have provoked debate in the Constitutional Conventions. Yet they are as silent on the subject as the law reports. There is no textual or structural foundation for the submission.

[2.550]

1.

2.

3.

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How compelling is the argument presented in the reasons of Brennan CJ and Dawson J that the Commonwealth must take as it finds them the State courts in which it vests federal jurisdiction pursuant to s 77(iii) of the Commonwealth Constitution? What was their attitude to the majority notion that State courts are an essential part of an integrated Australian judicial system? How did the majority accommodate the principle that the Commonwealth must take the State courts as it finds them? The dissenting justices took the view that the Constitution itself accepted the existence of State courts which did not necessarily satisfy the requirements of Ch III and clearly contemplated that federal jurisdiction might be vested in a “court” which did not necessarily meet those requirements. The only clear requirement of the Constitution was that it be a “court”. This view was reinforced by the argument that the Constitution did not compel the Commonwealth to vest federal jurisdiction in State courts. Do you agree with Brennan CJ that there is “no textual or structural foundation” for the majority view in Kable? Does the Kable principle apply (a) only to State Supreme Courts; (b) to all State courts which have been invested with federal jurisdiction; or (c) to all State Courts which could be invested with federal jurisdiction? [2.550]

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The Kable principle has been invoked in a number of cases, as mentioned. However, rather than expanding the content of the principle, the trend initially was one of avoiding an expansive application of it.

Fardon v Attorney-General (Qld) [2.560] Fardon v Attorney-General (Qld) (2004) 223 CLR 575 at 648–658, 595–602 (some footnotes omitted) [Fardon challenged the constitutional validity of Queensland legislation which purported to authorise the Supreme Court of Queensland to order that a prisoner be detained in custody if it was satisfied that there were reasonable grounds for believing that the prisoner was a serious danger to the community. In the High Court, a majority, Gleeson CJ, McHugh, Gummow, Hayne, Callinan and Heydon JJ, Kirby J dissenting, held the legislation to be valid and that it did not breach the Kable principle.] Callinan and Heydon JJ: 648 [199] The question raised by this appeal is whether ss 8 and 13 of the Dangerous Prisoners (Sexual Offenders) Act 2003 (Qld) (the Act) infringe Ch III of the Commonwealth Constitution by vesting in the Supreme Court of Queensland functions that are incompatible with the exercise by that court of the judicial power of the Commonwealth contrary to the principles expounded by this court in Kable v DPP (NSW) (1996) 189 CLR 51. Facts and previous proceedings [200] On 30 June 1989 the appellant was convicted of rape, sodomy and assault occasioning bodily harm. He was sentenced to a term of imprisonment of 14 years expiring on or about 30 June 2003. The Act commenced operation on 6 June 2003. On 17 June 2003, the respondent filed an application in the Supreme Court of Queensland under s 5 of the Act for an order that the appellant be detained for an indefinite period pursuant to s 13 of the Act. On 649 27 June 2003, the Supreme Court (Muir J) made orders pursuant to s 8(2)(b) of the Act for the interim detention of the appellant, pending a psychiatric assessment. The appellant challenged the Act on the basis that its provisions were incompatible with Ch III of the Constitution. [203] On 9 July 2003, Muir J rejected the constitutional challenge to s 8 of the Act (Attorney-General (Qld) v Fardon [2003] QSC 200. The appellant had argued that s 8 of the Act, by conferring on the Supreme Court the power to make an interim preventative detention order, infringed Ch III of the Constitution by vesting in the Supreme Court functions incompatible with the court’s function as a repository of judicial power of the Commonwealth: that the Act was relevantly the same in substance and effect as the legislation which this court struck down in Kable. His Honour was of the opinion however that Kable was distinguishable: contrary to the appellant’s argument, there were “substantial differences” between the provisions of the Act and the legislation in Kable. His Honour said this (Attorney-General (Qld) v Fardon [2003] QSC 200 at [78]): “In particular, the Act, unlike the Kable legislation, is not directed towards securing the continued detention of one person. The Act has general application, rules of evidence apply, the Attorney-General has the onus of proof ‘to a high degree of probability’ in respect of orders made under s 13 and the court has a discretion as to whether to make one of the orders specified in s 13(5) or no order at all. All continuing detention or supervision orders must be accompanied by detailed reasons and are subject to rights of appeal.” [204] On 23 September 2003, the Court of Appeal (de Jersey CJ and Williams JA, McMurdo P dissenting) affirmed the decision of Muir J. The majority found that the Act conferred genuine discretionary power on the Supreme Court and infringed no principle for which Kable stands. (Attorney-General (Qld) v Fardon [2003] QCA 416.) [205] Between 27 and 30 October 2003, the court (White J) heard the respondent’s application for an order that the appellant be detained in prison for an indefinite term pursuant to s 13 of the Act. Her Honour had before her not only the reports by two psychiatrists ordered by the court, but also reports by two other such practitioners. Provision was also made for the appellant to be present by video link to the hearing. He availed himself of this opportunity by giving oral evidence by this means. The evidence before her Honour was that the appellant had spent almost 23 years in prison since October 1980. His most serious crimes were sexual offences. Two involved children. The offences were accompanied by marked violence. There was also evidence that the appellant had claimed that he had committed some offences in order that he would be sent to prison where “he was comfortable”. On 6 November 2003, [2.560]

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Fardon v Attorney-General (Qld) cont. her Honour held that there was a serious risk that the appellant would commit a serious sexual offence if 650 he were to be released from custody, and ordered that he be detained for an indefinite term, for control, care and treatment. … The scheme of the Act [209] The purpose of the Act is to enable “the Supreme Court to order the post-sentence preventative detention of sex offenders who pose a serious danger to the community” (Queensland, Legislative Assembly, Parliamentary Debates (Hansard), 3 June 2003, p 2484). [210] In outline, the Act applies to persons imprisoned for a “serious sexual offence” which is defined in the schedule to the Act as “an offence of a sexual nature, whether committed in Queensland or outside Queensland involving violence or against children”. The Attorney-General may apply to the court for orders requiring such a person to submit to psychiatric assessment (s 5). Upon an application, the court may order that the person undergo a risk assessment by two qualified psychiatrists, who must prepare an assessment of the risk of the person re-offending (s 8). If the court is satisfied that the person would, if released, pose a serious danger to the community, it is empowered to order the prisoner’s detention (a “continuing detention order”) or supervision subject to conditions imposed by the court (a “supervision order”) (s 13). In determining which order to make, the 651 paramount consideration is to be the need to protect the community (s 13(6). A continuing detention order is to remain in effect until revoked by order of the court. In the meantime, the person subject to the order is to remain a prisoner (s 14). Supervision orders are to be made for a definite term (s 15). [211] Section 8 of the Act provides: (1) Preliminary hearing (a) If the court is satisfied there are reasonable grounds for believing the prisoner is a serious danger to the community in the absence of a division 3 order, the court must set a date for the hearing of the application for a division 3 order. (b) If the court is satisfied as required under subsection (1), it may make either or both of the following orders: (1) an order that the prisoner undergo examinations by 2 psychiatrists named by the court who are to prepare independent reports (a “risk assessment order”); (2) if the court is satisfied that the prisoner may be released from custody before the application is finally decided, an order that the prisoner be detained in custody for the period stated in the order (an “interim detention order”). (c) If the prisoner is ordered to be detained in custody after the prisoner’s period of imprisonment ends, the person remains a prisoner, including for all purposes in relation to an application under this Act. (d) If the court sets a date for the hearing of the application for a division 3 order but the prisoner is released from custody before the application is finally decided, for all purposes in relation to deciding the application this Act continues to apply to the person as if the person were a prisoner. Section 13 of the Act provides: 13 Division 3 orders (a) This section applies if, on the hearing of an application for a division 3 order, the court is satisfied the prisoner is a serious danger to the community in the absence of a division 3 order (a “serious danger to the community”). (b) A prisoner is a serious danger to the community as mentioned in subsection (1) if there is an unacceptable risk that the prisoner will commit a serious sexual offence: (a) if the prisoner is released from custody; or (b) if the prisoner is released from custody without a supervision order being made. (3) On hearing the application, the court may decide that it is satisfied as required under subsection (1) only if it is satisfied: (a) by acceptable, cogent evidence; and 144

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Fardon v Attorney-General (Qld) cont. (b) to a high degree of probability; that the evidence is of sufficient weight to justify the decision. 652 (4) In deciding whether a prisoner is a serious danger to the community as mentioned in subsection (1), the court must have regard to the following: (a) the reports prepared by the psychiatrists under section 11 and the extent to which the prisoner cooperated in the examinations by the psychiatrists; (b) any other medical, psychiatric, psychological or other assessment relating to the prisoner; (c) information indicating whether or not there is a propensity on the part of the prisoner to commit serious sexual offences in the future; (d) whether or not there is any pattern of offending behaviour on the part of the prisoner; (e) efforts by the prisoner to address the cause or causes of the prisoner’s offending behaviour, including whether the prisoner participated in rehabilitation programs; (f) whether or not the prisoner’s participation in rehabilitation programs has had a positive effect on the prisoner; (g) the prisoner’s antecedents and criminal history; (h) the risk that the prisoner will commit another serious sexual offence if released into the community; (i) the need to protect members of the community from that risk; (j) any other relevant matter. (5) If the court is satisfied as required under subsection (1), the court may order: 1. that the prisoner be detained in custody for an indefinite term for control, care or treatment (“continuing detention order”); or 2. that the prisoner be released from custody subject to the conditions it considers appropriate that are stated in the order (“supervision order”). (6) In deciding whether to make an order under subsection (5)(a) or (b), the paramount consideration is to be the need to ensure adequate protection of the community. (7) The Attorney-General has the onus of proving that a prisoner is a serious danger to the community as mentioned in subsection (1). The decision in Kable. 653 [213] In Kable, the justices in the majority used differing formulations when stating the principles, but all of them referred to constitutional integrity, or public confidence, or both. With respect to the powers purportedly conferred by the Community Protection Act 1994, Toohey J held that they were incompatible with the exercise of the judicial power of the Commonwealth because they were of such a nature that public confidence in the integrity of the judiciary as an institution was diminished (at 98). Gaudron J said that they compromised the integrity of the judicial system brought into existence by Ch III of the Constitution, which depends on State courts acting in accordance with the judicial process and on the maintenance of public confidence in that process (at 107). The opinion of McHugh J was that the impugned conferral of non-judicial power or other incidents of the court should not be such as could lead an ordinary reasonable member of the public to conclude that the court was not independent of the executive government of the State, or that the court as an institution was not free of governmental influence in administering the judicial functions invested in the court, and compromised the institutional impartiality of the court (ay 117). Gummow J was of the view that the exercise of statutory powers jeopardized the integrity of the court, and sapped the appearance of institutional impartiality, and the maintenance of public confidence in the judiciary (at 133). Detention under the Act is for non-punitive purposes. [214] It is accepted that in some circumstances, it is valid to confer powers on both non-judicial and judicial bodies to authorise detention, for example, in cases of infectious disease or mental illness. These categories are not closed. In this respect, the second object of the Act is relevant (s 3(b)): “[T]o provide continuing control, care or treatment of a particular [2.560]

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Fardon v Attorney-General (Qld) cont. class of prisoner to facilitate their rehabilitation.” To the extent that the Act in fact furthers this object, a court applying it would be undertaking, without compromise to its judicial integrity, a conventional adjudicative process. [215] To determine whether detention is punitive, the question, whether the impugned law provides for detention as punishment or for some legitimate non-punitive purpose, has to be answered. As Gummow J said in Kruger v Commonwealth ((1997) 190 CLR 1 at 162): “The question whether a power to detain persons or to take them into custody is to be characterised as punitive in nature, so as to 654 attract the operation of Ch III, depends upon whether those activities are reasonably capable of being seen as necessary for a legitimate non-punitive objective. The categories of non-punitive, involuntary detention are not closed.” [216] Several features of the Act indicate that the purpose of the detention in question is to protect the community and not to punish. Its objects are stated to be to ensure protection of the community and to facilitate rehabilitation (s 3(a)). The focus of the inquiry in determining whether to make an order under ss 8 or 13 is on whether the prisoner is a serious danger, or an unacceptable risk to the community. Annual reviews of continuing detention orders are obligatory (s 27). [217] In our opinion, the Act, as the respondent submits, is intended to protect the community from predatory sexual offenders. It is a protective law authorizing involuntary detention in the interests of public safety. Its proper characterization is as a protective rather than a punitive enactment. It is not unique in this respect. Other categories of non-punitive, involuntary detention include: by reason of mental infirmity; public safety concerning chemical, biological and radiological emergencies; migration; indefinite sentencing; contagious diseases and drug treatment. This is not to say however that this court should not be vigilant in ensuring that the occasions for non-punitive detention are not abused or extended for illegitimate purposes. [218] One further submission of the appellant requires consideration. He contended that the Act was a Bill of Pains and Penalties, that is, a “legislative enactment which inflicts punishment without a judicial trial” (Polyukhovich v Commonwealth (1991) 172 CLR 501 at 535–536, 646, 685–686, 719–721). … 655 [219] The Act here is not such a bill. Its purpose is not to punish people for their past conduct. It is a protective measure and provides, in any event, for many of the safeguards of a judicial trial. It is necessary to keep in mind the issues with which Kable was concerned and the true nature of the decision which the court made there. Despite the differing formulations of the justices in the majority, the primary issue remained whether the process which the legislation required the Supreme Court of New South Wales to undertake, was so far removed from a truly judicial process that the court, by undertaking it, would be so tainted or polluted that it would no longer be a suitable receptacle for the exercise of federal judicial power under Ch III of the Constitution. This court did not in Kable hold however that in all respects, a Supreme Court of a State was the same, and subject to the same constraints, as a federal court established under Ch III of the Constitution. Federal judicial power is not identical with State judicial power. Although the test, whether, if the State enactment were a federal enactment, it would infringe Ch III of the Constitution, is a useful one, it is not the exclusive test of validity. It is possible that a State legislative conferral of power which, if it were federal legislation, would infringe Ch III of the Constitution, may nonetheless be valid. 656 Not everything by way of decision-making denied to a federal judge is denied to a judge of a State. So long as the State court, in applying legislation, is not called upon to act and decide, effectively as the alter ego of the legislature or the executive, so long as it is to undertake a genuine adjudicative process and so long as its integrity and independence as a court are not compromised, then the legislation in question will not infringe Ch III of the Constitution. [220] The forms and procedures prescribed by the Act bear the hallmarks of traditional judicial forms and procedure. Section 5(3) raises a formidable threshold for the Attorney-General as applicant to surmount: a need at a preliminary hearing to satisfy the court that “there are reasonable grounds for believing the prisoner is a serious danger to the community in the absence of [an] … order”. This is a considerably higher threshold than a prosecutor has to surmount at a committal, effectively the establishment of a prima facie case only. [221] The Act requires that the prisoner will be provided with full disclosure and details of the allegations and all other relevant material filed by the Attorney-General against him (ss 5(5), 12 and 25) and provides for the filing of material by him (s 6). The effect of s 7 is to apply the rules of evidence except with respect to a preliminary hearing where the rules may be relaxed to accord with those generally obtaining in urgent interlocutory applications. The prisoner has 146

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Fardon v Attorney-General (Qld) cont. full rights to cross-examine and to adduce evidence (s 45). The court may decide some relatively less important matters only on the papers (s 44). [222] Should the court reach the requisite degree of satisfaction at a preliminary hearing, the application is then to proceed to a final hearing (s 8(1)) and the court has a discretion to order two independent psychiatric examinations and reports. [223] These points should be made about the section which empowers the court to make an order for the detention of a prisoner. First, the prisoner’s release must be shown to present an unacceptable risk of the commission by him of a serious sexual offence. In so deciding, the court may only act upon “acceptable, cogent evidence” (s 13(3)(a)) and the degree of satisfaction that it must reach is one of “a high degree of probability” (s 13)(3)(b)). [224] Section 13(4) provides another safeguard by requiring the court to have regard to these relevant and important matters: the psychiatrists’ reports; the cooperation or otherwise of the prisoner with the psychiatrists; other relevant reports; the prisoner’s propensities; any pattern of offending by the prisoner; the prisoner’s participation in rehabilitative programmes and the results of them; the prisoner’s efforts to address the cause of his behaviour; the prisoner’s antecedents and criminal history; “the risk that the prisoner will commit another serious sexual offence if released into the community”; (and the need to protect the community against that risk and any other relevant matter) (s 13(4)(h)). 657 [225] The yardstick to which the court is to have regard, of an unacceptable risk to the community, relevantly a risk established according to a high degree of probability, that the prisoner will commit another sexual offence if released, established on and by acceptable and cogent evidence, adduced according to the rules of evidence, is one which courts historically have had regard to in many areas of the law. The process of reaching a predictive conclusion about risk is not a novel one. … [226] Sentencing itself in part at least may be a predictive exercise requiring a court on occasions to ask itself for how long an offender should be imprisoned to enable him to be rehabilitated, or to ensure that he will no longer pose a threat to the community. The predictive exercise of an assessment of damages for future losses is also a daily occurrence in the courts. [227] Even if the court concludes under s 13(1) of the Act that the prisoner is a serious danger to the community, it still has a discretion under s 13(5) as to the way in which the application should be disposed of. It may, for example, order that the prisoner be released from custody subject to conditions. Section 16 prescribes the contents of such an order. [228] Section 13(6) of the Act uses the expression “paramount consideration” … 658 [230] Another judicial hallmark of the process for which the Act provides is the requirement that the court give reasons for its decision (s 17). [231] The purpose of Pt 3 of the Act is to ensure that a prisoner’s continual detention be reviewed annually. Sections 26 and 27 require the Attorney-General to ensure that this purpose is effected. In exceptional circumstances, a prisoner may himself seek leave to apply for a review (s 28). The balance of Pt 3 contains provisions of similar kind to those governing the applications for the original order and ensures fair process. And again, before the court may affirm the order for detention it must be satisfied to a high degree of probability. [232] Part 4 of the Act confers a right of appeal upon both the Attorney-General and the prisoner. The rights may be exercised without the necessity to obtain prior leave and are available in respect of any decision under the Act (s 31). [233] It can be seen therefore that careful attention has been paid in the drafting of the Act to a need for full and proper legal process in the making of decisions under it. It is an Act of general application, unlike the ad hominem nature of the legislation in Kable. Conclusion [234] The Act does not offend against the principle for which Kable stands. It is designed to achieve a legitimate, preventative, non-punitive purpose in the public interest, and to achieve it with due regard to a full and conventional judicial process, including unfettered appellate review. In undertaking that process, and in making a decision as part of it, the Supreme Court did not exercise power inconsistent with its function as a court which exercises judicial power pursuant to Ch III of the Constitution. The appeal should be dismissed. McHugh J: 595 [32] The majority justices in [Kable] held that, because State courts can be invested with federal jurisdiction, State legislation cannot confer jurisdiction or powers on State courts that compromises their integrity as courts exercising federal jurisdiction. … [T]he legislation that the court declared invalid in Kable was extraordinary … 596 [33] It was … ad hominem legislation that, although dressed up as a Supreme Court legal proceeding, had been enacted for the purpose of ensuring that [2.560]

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Fardon v Attorney-General (Qld) cont. Kable remained in prison when his sentence expired. Indeed, I thought that it made the Supreme Court (Kable ((1996) 189 CLR 51 at 122): “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.” As Gaudron J pointed out (Kable (1996) 189 CLR 51 at 106): “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 (eg, 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 as already indicated, 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.” [34] …..The differences between the legislation considered in Kable and the Act are substantial. First, the latter Act is not directed at a particular person but at all persons who are serving a period of imprisonment for “a serious sexual offence” (ss 2, 5, 13). Second, when determining an application under the Act, the Supreme Court is exercising judicial power. It has to determine whether, on application by the Attorney-General, the court is satisfied that “there is an unacceptable risk that the prisoner will commit a serious sexual offence” if the prisoner is released from custody (s 13(2)). That issue must be determined in accordance with the rules of evidence (s 13(3)). It is true that in form the Act does not require the court to determine “an actual or potential controversy as to existing rights or obligations” (R v Trade Practices Tribunal; Ex parte Tasmanian Breweries Pty Ltd (1970) 123 CLR 361 at 375 per Kitto J). But that does not mean that the court is not 597 exercising judicial power. The exercise of judicial power often involves the making of orders upon determining that a particular fact or status exists. It does so, for example, in the cases of matrimonial causes, bankruptcy, probate and the winding up of companies. The powers exercised and orders made by the court under this Act are of the same jurisprudential character as in those cases. The court must first determine whether there is “an unacceptable risk that the prisoner will commit a serious sexual offence”. That is a standard sufficiently precise to engage the exercise of State judicial power (M v M (1988) 166 CLR 69 at 78). Indeed, it would seem sufficiently precise to constitute a “matter” that could be conferred on or invested in a court exercising federal jurisdiction. Third, if the court finds that the Attorney-General has satisfied that standard, the court has a discretion as to whether it should make an order under the Act and, if so, what kind of order (s 13(5)). The court is not required or expected to make an order for continued detention in custody. The court has three discretionary choices open to it if it finds that the Attorney-General has satisfied the “unacceptable risk” standard. It may make a “continuing detention order” (s 13(5)(a)), a “supervision order” (s 13(5)(b)) or no order. Fourth, the court must be satisfied of the “unacceptable risk” standard “to a high degree of probability” (s 13(3)(b)). The AttorneyGeneral bears the onus of proof. Fifth, the Act is not designed to punish the prisoner. It is designed to protect the community against certain classes of convicted sexual offenders who have not been rehabilitated during their period of imprisonment. … Sixth, nothing in the Act or the surrounding circumstances suggests that the jurisdiction conferred is a disguised substitute for an ordinary legislative or executive function. Nor is there anything in the Act or those circumstances that might lead to the perception that the Supreme Court, in exercising its jurisdiction under the Act, is acting in conjunction with, and not independently of, the Queensland legislature or executive government.

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Fardon v Attorney-General (Qld) cont. Does the Act compromise the institutional integrity of the Supreme Court of Queensland? 598 [35] 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. [36] 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. As Knox CJ, Rich and Dixon JJ pointed out in Le Mesurier v Connor ((1929) 42 CLR 481 at 495–496): 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. Application of Ch III to the States [37] The doctrine of the separation of powers, derived from Chs I, II and III of the Constitution, does not apply as such in any of the States, including Queensland. Chapter III of the Constitution, which provides for the exercise of federal judicial power, invalidates State legislation that purports to invest jurisdiction and powers in State courts only in very limited circumstances. One circumstance is State legislation that attempts to alter or interfere with the working of the federal judicial system set up by Ch III (Commonwealth v Queensland (1975) 134 CLR 298 at 314–15 at 363–364 per Gibbs J, Barwick CJ, Stephen and Mason JJ agreeing). Another is the circumstance dealt with in Kable: legislation that purports to confer jurisdiction on State courts but compromises the institutional integrity of State courts and affects their capacity to exercise federal jurisdiction invested under Ch III 599 impartially and competently. Subject to that proviso, when the Federal Parliament invests State courts with federal jurisdiction, it must take them as it finds them. [38] Cases in this court have often demonstrated that, subject to the Kable principle, the Parliament of the Commonwealth must take State courts as it finds them … [His Honour proceeded to set out a number of authorities and factual examples in this regard and continued.] 600 [40] …[A]s Gaudron J pointed out in Kable ((1996) 189 CLR 51 at 106): “[T]here is nothing to prevent the Parliaments of the States from conferring powers on their courts which are wholly non-judicial, so long as they are not repugnant to or inconsistent with the exercise by those courts of the judicial power of the Commonwealth.” 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 (Constitution Act 1867 (Qld), s 2)…Those words give the Queensland Parliament a power as plenary as that of the Imperial Parliament ((1996) 189 CLR 51 at 106). 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 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 (Qld) are, of course, preserved subject to the Commonwealth Constitution. However, no process of legal or [2.560]

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Fardon v Attorney-General (Qld) cont. 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. [41] The bare fact that particular State legislation invests a State court with powers that are or jurisdiction that is repugnant to the traditional 601 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. [42] The pejorative phrase – “repugnant to the judicial process” – is not the constitutional criterion. In this area of constitutional discourse, it is best avoided, for it invites error. That which judges regard as repugnant to the judicial process may be no more than a reflection of their personal dislike of legislation that they think unjustifiably affects long recognised rights, freedoms and judicial procedures. State legislation that requires State courts to act in ways inconsistent with the traditional judicial process will be invalid only when it leads to the conclusion that reasonable persons might think that the legislation compromises the capacity of State courts to administer invested federal jurisdiction impartially according to federal law. That conclusion is likely to be reached only when other provisions of the legislation or the surrounding circumstances as well as the departure from the traditional judicial process indicate that the State court might not be an impartial tribunal that is independent of the legislative and the executive arms of government. Conclusions [43] In my opinion, Kable does not govern this case. Kable is a decision of very limited application. That is not surprising. … [T]he background to and provisions of the Community Protection Act 1994 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 602 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. [44] 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 to order the prisoner’s continued detention or supervised release. Furthermore, the court must give detailed reasons for its order, (Section 17) 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” (Mistretta v United States 488 US 361 (1989) at 407). On the contrary, the irresistible conclusion is that the Queensland Parliament has 150

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Fardon v Attorney-General (Qld) cont. 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.

Notes&Questions

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(1)

Although a very high threshold is set for the invalidation of State legislation for breach of the Kable principle by the majority justices, the precise scope of the principle remains somewhat uncertain. Its very limited application belies the apparent breadth of its definition. Fardon confirmed that the principle is based on the premise that the Constitution establishes an integrated Australian court system, and contemplates the exercise of federal jurisdiction by State Supreme Courts. Accordingly, any State law will be invalid which confers on a State court, vested with federal jurisdiction, a function which so substantially impairs its institutional integrity as to be incompatible with that court’s role as a repository of federal jurisdiction. In the determination of incompatibility in the Kable context, it is apparent from the majority reasoning that a fundamental criterion appears to be the degree to which the law impairs the institutional independence of the State court from parliament and the executive. McHugh J in particular placed great emphasis on this criterion. Although he did not expressly limit the Kable principle to that more precise limitation, there are aspects of his judgment which may indicate that this is the principal, if not exclusive, consideration. For example, (at 601 [42]) he stated that: State legislation that requires State courts to act in ways inconsistent with the traditional judicial process will be invalid only when it leads to the conclusion that reasonable persons might think that the legislation compromises the capacity of State courts to administer invested federal jurisdiction impartially according to federal law. That conclusion is likely to be reached only when other provisions of the legislation or the surrounding circumstances as well as the departure from the traditional judicial process indicate that the State court might not be an impartial tribunal that is independent of the legislative and the executive arms of government. (Emphasis in original.)

Callinan and Heydon JJ likewise commence with the general definition, but also emphasise the critical question of independence. They stated (at 655 [219]): [T]he primary issue remained whether the process which the legislation required the Supreme Court of New South Wales to undertake, was so far removed from a truly judicial process that the court, by undertaking it, would be so tainted or polluted that it would no longer be a suitable receptacle for the exercise of federal judicial power under Ch III of the Constitution. (Emphasis added)

They proceeded to set out a number of more precise principles in this regard, indicating that the issue of independence from the executive and parliament was only one, albeit very important, issue (at 656 [219]) So long as the State court, in applying legislation, is not called upon to act and decide, effectively as the alter ego of the legislature or the executive, so long as it is to undertake a genuine adjudicative process and so long as its integrity and independence as a court are not compromised, then the legislation in question will not infringe Ch III of the Constitution.

Gummow J also took this approach (at 617–618 [102]): [2.570]

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[A]lthough in some of the cases (see, eg, North Australian Aboriginal Legal Aid Service Inc v Bradley (2004) 78 ALJR 977 at 990–991 [65]) 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.

See also comment as to scope of “institutional integrity” by Gummow, Hayne and Crennan JJ in Forge v Australian Securities and Investments Commission (2006) 228 CLR 45 (at 76 [63]–[64]) that: 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.

(2)

If the “touchstone” of the Kable principle is not “public confidence” but “institutional integrity”, to what extent do the majority justices provide more specific guidance as to when the principle will be breached? Are the three criteria enunciated by Callinan and Heydon JJ sufficient to cover all circumstances?

(3)

It is apparent that McHugh J in particular was concerned to ensure that the Kable principle was not misunderstood as a broad principle capable of expansive application. Can it be said that, following Fardon, the Kable principle will only be breached in extreme cases? Note in particular the catalogue of possible legislative measures which were outlined in the judgment of McHugh J which would not breach the principle. See (2004) 223 CLR 575 at 600–601[40]–[42].

(4)

On what grounds did the majority justices distinguish the facts of Kable and how critical was that distinction to the outcome of this case?

(5)

How significant was the consideration in the reasoning of some of the justices that the continued detention provided for by the Act was not punitive in nature but akin to other permissible forms of executive detention?

(6)

Kirby J, in dissent, rejected what he regarded as a narrow, indeed unduly restrictive, application of the Kable principle by the majority justices. He stated that “[w]hat was seen at first to be an important assurance that the State judiciary in Australia (certainly the named Supreme Courts) enjoyed many of the constitutional protections of the federal judiciary, has repeatedly been revealed as a chimera” (at 626 [134]). He held (at 628 [141]) that Kable “forbids attempts of State Parliaments to impose on courts, notably Supreme Courts, functions that would oblige them to act in relation to a person in a manner which is inconsistent with traditional judicial process.” (Kable at 98). In his Honour’s view, this means that State legislatures are prevented from imposing on such courts jurisdiction with respect to “proceedings [not] otherwise known to the law”, that is, those not partaking “of the nature of legal proceedings” Kable at 106). It proscribes parliamentary endeavours to “compromise the institutional impartiality” of

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a State Supreme Court Kable at 121). It forbids the conferral upon State courts of functions “repugnant to judicial process” Kable at 134). His Honour favoured a more expansive approach (at 630 [144]): (5) [I]f it is shown that the jurisdiction and powers conferred on a State court could not be conferred on a federal court, the party complaining that the State law imposes functions on the State judiciary, inconsistent with (“repugnant to”) Ch III of the federal Constitution, is well advanced in making good the Kable argument. This is because of the integrated character of the Australian judiciary, both in terms of Ch III and in fact. If one part of the nation’s judiciary could not lawfully perform a specified function, there is a heavy burden of persuasion that another could do so. (Emphasis in original.)

Kirby J then proceeded to identify the five features of the legislation in Fardon which rendered it a breach of the Kable principle. These factors, taken in combination, imposed upon the State Supreme Court judges functions “repugnant” to Ch III of the Commonwealth Constitution because they were authorised to order (at 631–632 [148]):

(7)

(8)

(a)

the civil commitment of a person to a prison established for the reception of prisoners, properly so-called;

(b)

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;

(c)

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;

(d)

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

(e)

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.

To what extent did Kirby J’s more expansive approach to Kable overcome the hurdles presented by the distinguishing features of the legislation considered in Fardon. In direct contrast to Kirby J, see McHugh J’s remarks at 600–601 in Fardon, extracted above. Another High Court decision which similarly limited the application of the Kable principle was the earlier-decided Baker v The Queen (2004) 223 CLR 513. The same majority as in Fardon, Kirby J dissenting, held the impugned legislation to be valid. The majority distinguished the provisions of the impugned legislation from those held invalid in Kable. The impugned provisions were contained in s 13A of the Sentencing Act 1989 (NSW) governing the conditions upon which persons sentenced to life imprisonment could apply for parole. Such a person could apply to the Supreme Court for the determination of a minimum sentence. Upon serving that term, an application for parole could be made. An application under this provision could only be made after eight years of the sentence had been served. In 1997, this section was amended to introduce a different regime for those prisoners, of which there only ten at the time, whose life sentence was imposed together with a recommendation by the sentencing court that they never be released. Such recommendations, it should be noted, had no [2.570]

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binding force at the time they were made. In the case of such prisoners, they could not apply for a minimum sentence until they had served 20 years of their sentence. When they did make an application, pursuant to s 13A(3A), it would be considered only if the Supreme Court was “satisfied that special reasons exist that justify making the determination.” It was argued by the appellant that by its imposition of a special regime for prisoners subject to non-release recommendations, the provision was in breach of the Kable principle. Because of the difficulty in establishing the existence of “special reasons”, the appellant argued that the Supreme Court’s process was being used merely as an instrument to secure the non-release of these ten prisoners, thus compromising its integrity and independence. This argument was rejected by the majority. The majority did not regard the fact that the Supreme Court was being required to distinguish between different classes of prisoners, or the fact that the impugned law impacted only on a small number of known prisoners, as warranting a different conclusion. The majority justices rejected the contention that the Supreme Court was being used by Parliament as an instrument in its aim to ensure the non-release of the prisoners. Only Kirby J agreed with this contention. (9)

It is clear that the Kable principle does not per se prevent State legislatures vesting State courts with non-judicial functions. It is also clear that the full panoply of principle emanating from Boilermakers’ and the separation of judicial power in Ch III applicable at the federal level, does not apply at State level.

(10)

It will have been noticed that the Kable principle is based on notions of incompatibility. This must not be confused with the incompatibility test relied upon in the application of the persona designata exception to Boilermakers’ discussed in Chapter 9 in relation to the non-judicial roles to which federal judges may be assigned.

(11)

The narrower reach of the Kable limitations – in comparison with the full protections afforded judicial power at federal level pursuant to Ch III – was highlighted by McHugh, Gummow, Hayne and Heydon JJ in Baker when they noted (at 534–535 [51]): If the State law in question confers jurisdiction of a nature which would meet the more stringent requirements for the exercise by the Supreme Court of judicial power under investment by federal law, there is no occasion to enter upon the question of whether the less stringent requirements of Kable are met. Counsel for the Attorney-General of the Commonwealth encapsulated the point in his submissions that, if a law satisfied the stricter tests required with respect to the judicial power of the Commonwealth, then the court did not have to go on to ask whether it satisfied the lesser hurdle presented by the reasoning in Kable.

(12)

(13)

Other cases illustrating a narrow approach to the Kable principle are Silbert v Director of Public Prosecutions (2004) 217 CLR 181 and North Australian Aboriginal Legal Aid Service Inc v Bradley (2004) 218 CLR 146. The impugned legislation in both cases was held not to breach the Kable principle. For a good exploration of the principle in Kable and its subsequent application see Fiona Wheeler, “The Kable Doctrine and State Legislative Power Over State Courts” (2005) 20(2) Australasian Parliamentary Review 15. Here, Professor Wheeler also discusses the application of the Kable doctrine to the Territories where she notes at 23 that: While NAALAS v Bradley [(2004) 218 CLR 146] shows that Kable’s Case applies in the territories, the state and territory limitations are not necessarily identical in scope. The special status of the territories under the Australian Constitution – territories are subject to the general overriding power of the Commonwealth Parliament (s 122) and

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territory courts, unlike state courts, are not mentioned in the Constitution – means that the possibility of some differences in operation of the doctrine there cannot be excluded. (See Stephen McDonald, “Territory Courts and Federal Jurisdiction” (2005) 33 Federal Law Review 57, 90–92.) It seems unlikely, for example, that the Constitution guarantees the existence of a system of territory courts. The incompatibility limb of the Kable doctrine, by contrast, is likely to constrain state and territory legislative power to a similar extent.

For recent discussion of the application of the Kable principle to Territory courts see: Attorney-General (NT) v Emmerson (2014) 253 CLR 393; North Australian Aboriginal Justice Agency Ltd v Northern Territory (2015) 90 ALJR 38 [2.580] McHugh J in Fardon (at 601 [43]) expressed a view that the “combination of

circumstances which gave rise to the perception in Kable [that the Supreme Court was operating as an instrument of the executive] is unlikely to be repeated.” He added that 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.” His Honour’s observations were prescient. In Forge v Australian Securities and Investment Commission (2006) 228 CLR 45 the Kable principle was invoked to challenge the constitutional validity of s 37 of the Supreme Court Act 1970 (NSW) which provided for the appointment of acting judges of that Court. In particular, the appointment of Foster AJ was impugned, as was the validity of prior decisions and orders made by him. Section 37, it was argued, substantially impaired the institutional integrity of the Supreme Court and was incompatible with the Court’s role as a repository of federal jurisdiction. This was not a case about the conferral of an incompatible function on the Court. Rather, it related to its very constitution, structure and composition pursuant to the Act and whether this breached the Kable principle. If this argument succeeded, it would have constituted a considerable expansion of the Kable principle. In Forge, it was not the authority granted to appoint acting judges per se which was at issue. Rather, it was the absence of any defining limitation in relation to their appointment – as to numbers and the circumstances in which they may be appointed – which was constitutionally problematic. This may have afforded the State executive the opportunity to shift the balance of numbers in favour of acting judges on short term appointments, as opposed to permanent judges (with full security of tenure and salary). Given the more immediate control this might allow the Executive to appoint – and indeed not to reappoint such judges – with the heightened potential to tempt such acting judges to maintain favour with the executive when executing their duties, it was argued that this would undermine the independence of the Court. Accordingly, its institutional integrity would be compromised in breach of the Kable principle. By a majority of six to one (Gleeson CJ, Gummow, Hayne, Callinan, Heydon and Crennan JJ, Kirby J dissenting) the legislation was held not to breach the Kable principle. The integrity of the Supreme Court of New South Wales was not in any way affected by the number of acting judges appointed at the relevant time, the method of their selection and their qualifications. However, the majority did envisage that there may be a point at which the number of acting judges so outweighed the number of permanent judges, combined with other factors relating to their qualifications and the term and conditions of their appointment, that the institutional integrity of the court would be undermined in breach of Kable. Thus, Gummow, Hayne and Crennan JJ (at 86 [93]): 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 [2.580]

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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.

However, according to their Honours (at 85 [90]), it was not possible to determine the issue on a purely quantitative basis: If it is accepted that some acting appointments may lawfully be made under s 37, a quantitative criterion for marking the boundary of permissible appointments would treat the circumstances seen by the appointing authority as warranting the appointment of an acting judge as wholly irrelevant to the inquiry about validity. It would assume that the external observer considering the independence and impartiality of the court as a whole should, or would, ignore why it had been thought necessary to appoint those who had been appointed to act as judges. Thus the necessity presented by sickness, absence for other sufficient cause, or the embarrassment of a judge or judges in one or more particular cases would be treated as irrelevant; all that would matter is how many have been appointed. And that, in turn, presents the question: how would the particular number or proportion of acting judges that would compromise the institutional integrity of the court be fixed? That is a question to which none but an arbitrary answer can be given. Rather than pursue the illusion that some numerical boundary can be set, it is more profitable to give due attention to the considerations that would have to inform any attempt to fix such a boundary: the fact and appearance of judicial independence and impartiality.

Heydon J expressly agreed with this proposition (at 149–150 [277]) and Gleeson CJ expressly stated that he agreed generally with the reasoning of Gummow, Hayne and Crennan JJ. His Honour did envisage circumstances where the constitution of the Court might be distorted such as to breach the Kable principle: 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. (at 69 [46])

Kirby J, in dissent, after examining in detail the appointment of acting judges in New South Wales at the relevant time, came to the opposite conclusion and held that the principle in Kable had been breached (at 94–95 [124]–[125]): In my opinion, the number and type of acting appointments made under the impugned provisions … 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. … [125] 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.

On the facts of Forge, was it necessary to invoke the Kable principle at all to impugn the legislation? Given that the Supreme Court of NSW (not to mention the lower NSW courts) were “courts” in which federal jurisdiction has been vested pursuant to s 77(iii), could not the issue have been resolved by reference to the need to maintain the Supreme Court as a “court”? 156

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Australian States: Cinderellas No Longer? [2.590] G Winterton, “Australian States: Cinderellas No Longer?”, in G Winterton (ed), State Constitutional Landmarks (Federation Press, Sydney, 2006), ch 1, pp 14–16 (some footnotes omitted) 14 [T]he High Court in Kable … “discovered” in Ch III of the Commonwealth Constitution limitations upon the functions which State Parliaments could impose upon State Supreme Courts. In providing that the Commonwealth Parliament may “invest” federal jurisdiction in State courts (see Commonwealth Constitution, ss 77(iii) and 71), it can reasonably be inferred that the Commonwealth can invest such power only in a State body 15 which can be characterized as a “court”. The extent to which the body exercises non-judicial functions, and the degree to which it exercises its functions independently and impartially, will clearly affect whether it can be so characterized. But this limitation derived from Ch III was not at issue in Kable – it was not suggested that the preventive detention power conferred on the New South Wales Supreme Court by the Community Protection Act 1994 (NSW) had the effect of rendering that body no longer a “court” within Ch III. Instead, a majority (arguably, only a plurality (Gaudron, McHugh and Gummow JJ) in view of the more limited ground of Toohey J’s decision) of the High Court implied in Ch III a further requirement that State Parliaments must not vest in their Supreme Courts (although the principle must surely apply to all State courts) such non-judicial functions as would render them unworthy receptacles for federal jurisdiction. These are functions which would lead the public to lose confidence in their independence, especially from the political branches. (This is an implication separate from the requirement that only a State “court” can be invested with federal jurisdiction; this is demonstrated by Dawson J’s express recognition of the latter principle although he dissented (on principle, not merely on its application to the facts) in Kable … However, the issues were not clearly distinguished in Forge … in which it was argued (unsuccessfully) that the constitution of the State court (in including acting judges) – not the functions conferred on it – contravened Ch III. The argument in Forge was based on the issue whether the Supreme Court remained a “court” (see Gleeson CJ at [41]–[42], [46]); hence, strictly speaking, Kable was irrelevant. However, with respect, Kirby J confused the two issues in remarking: “If the institutional alterations result in a ‘court’ that is qualitatively changed (so that, in the case of a Supreme Court, it does not answer to its constitutional description as such) the Kable rule is engaged” ([195]). See, similarly, [192]–[193] per Kirby J, [63] per Gummow, Hayne and Crennan JJ (“as is recognised in Kable … the relevant principle is one which hinges upon maintenance of the defining characteristics of a ‘court’ …”). (Emphasis added.) As the present writer has argued elsewhere (see G Winterton, “Justice Kirby’s Coda in Durham” (2002) 13 Public Law Review 165 at 168, 169), this principle is unconvincing on many grounds: it is contrary to the long-accepted understanding that, in investing State courts with federal jurisdiction, the Commonwealth essentially “takes the Court as it finds it”; 16 the supposed opinion of a notional “ordinary reasonable member of the public” is an impressionistic criterion, impossible to determine if taken seriously, which provides a camouflage of objectivity for subjective judicial evaluation; and its logical implications would lead to wide judicial policing of the integrity of Australian public institutions. Moreover, it is difficult to reconcile the view that the Supreme Court would be perceived as “a party to and responsible for implementing the political decision of the executive government” (McHugh J) (Kable (1996) 189 CLR 51 at 124. Emphasis added. McHugh J does qualify this perception as “[a]t the time of [the Act’s] enactment”) or “an arm of the executive which implements the will of the legislature” (Gummow J) (ibid, 134, emphasis added) when the Supreme Court had refused to order Mr Kable’s detention on the second occasion it was sought and he had been at liberty for more than three months when the case was argued in the High Court. H P Lee (in “The Kable Case: A Guard-Dog that Barked But Once?”, in State Constitutional Landmarks, op cit, Chapter 14) … concludes that the current High Court “has ensured that Kable has retreated back into a fenced off abyss”; in Kirby J’s evocative metaphor, it appears to be a “constitutional guard-dog that would bark but once” (Baker v The Queen (2004) 78 ALJR 1483 at [54].) The present writer views that fate of Kable without regret, but Professor Lee views the decision more favourably, noting that “it was not unreasonable for a suspicion to be harboured that the Supreme Court was being used to give the Government an escape route from a political conundrum”. That is undoubtedly [2.590]

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Australian States: Cinderellas No Longer? cont. true, but the question remains whether such employment of the judiciary should be constitutionally infirm. Perhaps the most that can be said for the decision is that, as Professor Lee remarks, “its continued existence provides protection against extreme laws”, which echoes a sentiment expressed many years ago by Sir Ivor Jennings in remarking that one benefit of the doctrine of fundamental common law rights is that it reassures us that “if the occasion arose, a judge would do what a judge should do” (I Jennings, The Law and the Constitution (5th ed, 1959), p 160). However, constitutional analysis and, perhaps, protection of State judiciaries would be enhanced if the High Court distinguished more carefully between the Kable principle and the universally-accepted requirement that only State “courts” can be invested with federal jurisdiction.

[2.600] The High Court’s reluctance to re-apply the principle in Kable continued in Gypsy Jokers Motorcycle Club Incorporated v Commissioner for Police (2008) 234 CLR 532 and K-Generation Pty Ltd v Liquor Licensing Court (2009) 237 CLR 501. In Gypsy Jokers v Commissioner for Police (2008) 234 CLR 532, the High Court, by 6:1, dismissed a challenge to the constitutional validity of judicial review of fortification removal notices issued under the Corruption and Crime Commission Act 2003 (WA). Section 76 of the Act provided that: (1) If a fortification removal notice relating to premises has been issued, the owner or an interested person may, within 7 days after the day on which the notice is given to the owner of the premises, apply to the Supreme Court for a review of whether, having regard to the submissions, if any, made before the submission period elapsed and any other information that the Commissioner of Police took into consideration, the Commissioner of Police could have reasonably had the belief required by section 72(2) when issuing the notice. (2) The Commissioner of Police may identify any information provided to the court for the purposes of the review as confidential if its disclosure might prejudice the operations of the Commissioner of Police, and information so identified is for the court’s use only and is not to be disclosed to any other person, whether or not a party to the proceedings, or publicly disclosed in any way.

The majority found that an interpretation of the statute should be adopted which “avoid[ed] rather than lead to a conclusion of constitutional invalidity” (at 553 [11] per Gummow, Hayne, Heydon and Kiefel JJ). On this basis s 76(2) did not compromise the independence of or impermissibly control the Supreme Court of Western Australia as the Court was still required to “decide whether the claim for confidentiality should be upheld” (at 551–552 [7] per Gleeson CJ and see 558 [33] per Gummow, Hayne, Heydon and Kiefel JJ). Crennan J agreed in a separate judgment. Gummow, Hayne, Heydon and Kiefel JJ did however note (more generally at 560 [39]) that “legislation which purported to direct the courts as to the manner and outcome of the exercise of their jurisdiction would be apt impermissibly to impair the character of the court as independent and impartial tribunals”. Their Honours concluded that the s 76(2) phrase “nor publicly disclosed in any way” did not amount to such a “legislative direction” and were “no more than an attempt at exhortation and an effort to focus attention by the Court to the prejudicial effect disclosure may have” (at 561 [44]). Further, the joint judgment noted (at 553 [10]) that “the conditions which must exist for courts in this country to administer justice according to law are inconsistent with some forms of external control of those courts appropriate to the exercise of authority by public officials and administrators.” On the issue of a denial of procedural fairness, Crennan J observed (at 597 [191]) that the independence and impartiality of the Supreme Court was not necessarily compromised by the fact that s 76(2) brought about some qualifications to a party’s entitlement to procedural fairness. 158

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In a strong dissent Kirby J found that s 76(2) amounted to an inappropriate interference with the Supreme Court’s judicial function as “an officer of the Executive Government … controls the discharge of the judicial process” and that while “[t]he judge may appear in robes to pronounce what shall be done … the hand that directs the process is elsewhere, outside the courtroom” (at 563 [52]). His Honour argued that the majority’s construction of the provision was too strained and was “not an expression of the true meaning and operation of the provision as enacted and expressed to achieve a clear legislative purpose” (at 572 [84]). On this basis he concluded that the subsection should be severed from the Act. Kirby J commented (at 563 [53], and 576 [100]) that: The Kable principle was at first regarded as “far-reaching” (Baker v The Queen (2004) 223 CLR 513, 544 [83]). Yet if this is so, it has certainly been “under-performing” (F Wheeler, “The Kable Doctrine and State Legislative Power over State Courts” (2005) 20(2) Australasian Parliamentary Review 15, 30). The circumstances of this case are in some ways special and peculiar. However, the endorsement by the majority of the challenged legislation is a matter of concern. Section 76(2) of the Act represents a disturbing precedent. To prevent the endorsement and possible future extension of the precedent, the appeal should be allowed. … I fully recognise that, in a number of decisions, I have adopted a more ample view of the application of the Kable principle than some of my colleagues. No doubt my differences from the majority in this respect derive from a disagreement over the “public values” that are at stake and different perceptions of the risks that are presented by erosions of what have hitherto been normal attributes of the “judicial process” in Australia.

On the issue of the role of the Supreme Court of Western Australia as a “court”, he found that (at 577–578): what sets a court apart is the feature, inherent in its constitution and functions, of independence and impartiality. It is a governmental institution. But it is one of a particular kind. It must act in particular ways. There may be innovations and differences between courts. However, there are limits upon permissible departures from the basic character and methodologies of a court. As a nominated court, expressly provided for in the Constitution, a Supreme Court of a State plays an essential role in the governance of the State and the nation. … The basic error of the majority in the Court of Appeal lay in their conclusion that, to find offence to the Kable principle, the appellant had to show that the impugned legislation rendered the Supreme Court “no longer a court of the kind contemplated by Ch III” … If that were indeed the criterion to be applied, it would be rare, if ever, that constitutional incompatibility could be shown. Kable’s constitutional toothlessness would then be revealed for all to see. The fact is that, whatever the outcome of this case, the Supreme Court would continue to discharge its regular functions. Overwhelmingly, it would do so as the Constitution requires. A particular provision, such as s 76 of the Act, will rarely be such as to poison the entire character and performance by a Supreme Court of its constitutional mandate as such or alone to result in a complete re-characterisation of the Court. Adoption of such an approach would, in effect, define the Kable doctrine out of existence. This should not be done. Kable recognised an important principle arising from the unique features of the Judicature of Australia. Such features necessitate vigilant protection of the State courts and their processes. The proper application of the Kable principle requires a close examination of the particular provision that is impugned. Such an examination is performed so as to prevent attempts to pollute the jurisdiction and powers of the State Supreme Courts. Special vigilance is required whenever it appears that other branches of government may be attempting to interfere with the independence and impartiality of the State courts or to trade on the reputational capital which such courts have won by their special character and established methodologies.

In K-Generation Pty Ltd v Liquor Licensing Court (2009) 237 CLR 501, in a statutory context broadly similar to that encountered in Gypsy Jokers, the appellants argued that s 28A of the Liquor Licensing Act 1997 (SA) “impermissibly interfered with the exercise by the Licensing Court of the judicial power of the Commonwealth” (at 511 [7] per French CJ). Section 28A(5) of the Act provided: [2.600]

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In any proceedings under this Act, the Commissioner, the Court or the Supreme Court – 1. must, on the application of the Commissioner of Police, take steps to maintain the confidentiality of information classified by the Commissioner of Police as criminal intelligence, including steps to receive evidence and hear argument about the information in private in the absence of the parties to the proceedings and their representatives; and 2. may take evidence consisting of or relating to information classified by the Commissioner of Police as criminal intelligence by way of affidavit of a police officer of or above the rank of superintendent.

The Court found that, as in Gypsy Jokers, the impugned provision could be construed so as to be constitutionally valid and so as not to remove the Licensing Court’s ability to exercise its functions independently and impartially (French CJ at 519 [46], 524–525 [63]–[65], 527 [77], Gummow, Hayne, Heydon, Crennan and Kiefel JJ at 542–543 [147]–[149], Kirby J at 576–580 [257]–[258]). The Licensing Court was found to be able to make an independent assessment of the information classified as “criminal intelligence” and review the evidence presented. French CJ held (at 512 [10]) that: Section 28A infringes upon the open justice principle that is an essential part of the functioning of courts in Australia. It also infringes upon procedural fairness to the extent that it authorises and effectively requires the Licensing Court and the Supreme Court to consider, without disclosure to the party to whom it relates, criminal intelligence information submitted to the Court by the Commissioner of Police. However, it cannot be said that the section confers upon the Licensing Court or the Supreme Court functions which are incompatible with their institutional integrity as courts of the States or with their constitutional roles as repositories of federal jurisdiction. Properly construed the section leaves it to the courts to determine whether information classified as criminal intelligence answers that description. It also leaves it to the courts to decide what steps may be necessary to preserve the confidentiality of such material.

The Chief Justice (at 530 [89]) also endorsed the statement of Gummow, Hayne and Crennan JJ from Forge (at 76 [63]) that “institutional integrity” “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.” The Court in K-Generation also rejected the submission that the Licensing Court would simply desist from being a “court” for the purposes of Chapter III of the Commonwealth Constitution capable of exercising federal jurisdiction if its institutional integrity was compromised (French CJ at 532 [99], Gummow, Hayne, Heydon, Crennan and Kiefel JJ at 544 [153]–[154], Kirby J at 567–569 [235]–[244]). The joint judgment explained that “the State may not establish a ‘Court of a State’ within the constitutional description and deprive it, whether when established or subsequently, of those minimum characteristics of … institutional independence and impartiality” (at 544 [153]). The continual failed invocation of the Kable principle before the High Court and restrictive statutory readings of State legislation was brought to an abrupt stop in International Finance Trust.

International Finance Trust v NSW Crime Commission [2.610] International Finance Trust Co Ltd v New South Wales Crime Commission (2009) 240 CLR 319 at 354–367 [This case related to ex parte restraining order applications made under s 10 of the Criminal Assets Recovery Act 1990 (NSW) (the CAR Act) in relation to property of persons suspected of having engaged in serious crime related activity. The New South Wales Crime Commission was authorised to make such applications to the Supreme Court of New South Wales in the absence of a criminal conviction and the Court was required to make the order if it was supported by an affidavit of an authorised officer stating that person has engaged in serious crime related activity and the grounds on which that suspicion is 160

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International Finance Trust v NSW Crime Commission cont. founded. A majority (French CJ, Gummow and Bell JJ and Heydon J) of the Court found s 10 of the CAR Act was invalid. Hayne, Crennan and Kiefel JJ, in the minority, held that s 10 was a valid provision that was not repugnant to the judicial process]. French CJ: 354 [54] 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. [55] 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 355 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 … [56] 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. [57] 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 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 … [The language of the rest of the Court was less focused on “institutional integrity” and more on whether the CAR Act conferred functions that were repugnant to the judicial process (see 367 [98] (Gummow and Bell); 378 [136] (Hayne, Crennan and Kiefel JJ); 379 [140] (Heydon J).] [For instance, Gummow and Bell JJ explained:] 366 [95] The result is that the effect of the suspicion by an authorised officer of the Commission, evidence supporting which has been provided to the Supreme Court on the application under s 10, which founds a restraining order possibly may be of considerable scope and may be displaced only when an application for an assets forfeiture order is no longer pending in the Supreme Court, or upon [2.610]

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International Finance Trust v NSW Crime Commission cont. application under s 25. But that application cannot succeed unless the applicant proves to the Supreme Court that it is more probable than not that the interest in property for which exclusion is sought is not “illegally acquired property”. [96] The making of that proof by the applicant for an exclusion order requires the negating of an extremely widely drawn range of possibilities of contravention of the criminal law found in the common law, and State and federal statute law. Indeed, where a relevant act or omission occurred outside the State and is an offence in the place where it occurred, the applicant must show that had the act or omission occurred within the State it would not have been an offence against the common law or State or federal statute law (s 4(1)). [97] 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. In addition the possibility of release from that 367 sequestration is conditioned upon proof of a negative proposition of considerable legal and factual complexity. [98] 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 (at 385–387 [156]–[161]) [sourced the repugnance in the “difficulty and delay” in overturning the restraining order rather than in the fact that the court was obliged to make the order or that it could be made ex parte. While this terminology of “repugnance” had been initially coined by Gummow J in Kable (at 132; see also Fardon v Attorney-General for the State of Queensland (2004) 223 CLR 575 at 628 [141], 641 [175] (Kirby J)), it had been subsequently criticised by McHugh J in Fardon (at 601 [42]) by the statement that: “The pejorative phrase – ‘repugnant to the judicial process’ – is not the constitutional criterion. In this area of constitutional discourse, it is best avoided, for it invites error. That which judges regard as repugnant to the judicial process may be no more than a reflection of their personal dislike of legislation that they think unjustifiably affects long recognised rights, freedoms and judicial procedures.”] Hayne, Crennan and Kiefel JJ [in dissent, disputed that the order was “repugnant to the judicial process” as “though working a considerable effect on property rights … finally dispose[d] of those rights” (at 373 [121]) when the order could be the subject of review. Their Honours concluded (at 375 [128]) that]: Neither s 10(2), providing for a restraining order to be sought ex parte, nor the provisions of s 12, enabling the making of various forms of orders ancillary to the making of a restraining order, shows that the Act should be read as inferentially excluding application by the party affected by a restraining order, after the order has been made, to contest whether it should have been made or should continue and to adduce evidence in support of that party’s case. … the CAR Act should not be construed as working such a fundamental alteration to civil procedure as would be required to conclude that an order made ex parte should not be open to subsequent review and reconsideration on the application of a party adversely affected by it.]

Notes&Questions

[2.620]

1.

In International Finance Trust Heydon J commented on the precedential role of Kable. His Honour observed (at 379 [140]) that: At least at the time when it was decided, Kable v Director of Public Prosecutions (NSW) had its critics. Whatever the force of their criticisms, there is no doubt that the decision has had extremely beneficial effects. In particular, it has influenced governments to ensure the inclusion within otherwise draconian legislation of certain objective and reasonable safeguards for the liberty and the property of persons affected by that legislation. It is true that apart from the Kable Case itself there has been no successful invocation of the doctrine associated with that case in this Court, and no challenge to

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the correctness of that doctrine. In these very proceedings the parties did not challenge the correctness either of the Kable Case or of anything said in it. It is accordingly not necessary to evaluate the criticisms. The case stands. It must thus be applied if circumstances which attract its operation arise …

2.

To what extent is a test concerned with “repugnancy to the judicial process” easier to apply than one focused on incompatibility with a court’s “institutional integrity”? Is “repugnancy” too subjective to be of utility?

[2.630] The decision in Kirk v Industrial Relations Commission of New South Wales (2010)

239 CLR 531, although not expressly citing Kable, is useful to consider in this context. In Kirk, the High Court found that the supervisory jurisdiction of a State Supreme Court on the ground of jurisdictional error was, by virtue of s 73 of the Commonwealth Constitution, an essential characteristic of a Supreme Court and could not be compromised. While the decision justified this on the historical foundations for such courts, the integrated nature of the court system also influenced the Court to some extent as the absence of supervisory review would “create islands of power immune from supervision and restraint” (at 581 [99]). The decision in Kirk is usefully considered in light of Kable. This is because of the emphasis of the High Court on review for jurisdictional error as a “defining characteristic” of a Supreme Court as well as its connection with McHugh J’s comment in Kable (at 114) that: “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 C III envisages.” For a further discussion of this association see L Zines, “Recent Developments in Chapter III: Kirk v Industrial Relations Commission of New South Wales & South Australia v Totani” (CCCS/AACL Seminar, Melbourne Law School, Melbourne, 26 November 2010); S Young and S Murray, “An Elegant Convergence? The Constitutional Entrenchment of Jurisdictional Error Review in Australia” (2011) Winter Oxford University Commonwealth Law Journal 117; S Ratnapala and J Crowe, “Broadening the Reach of Chapter III: The Institutional Integrity of State Courts and the Constitutional Limits of State Legislative Power” (2012) 36 Melbourne University Law Review 175; L Beck, “What is a “Supreme Court of a State”?” (2012) 34 Sydney Law Review 295. In South Australia v Totani (2010) 242 CLR 1 the High Court, by majority, again re-applied Kable to invalidate state legislation.

South Australia v Totani [2.640] South Australia v Totani (2010) 242 CLR 1 at 42–90 [Mr Totani and Mr Hudson sought to challenge in the High Court the constitutional validity of s 14(1) of the Serious and Organised Crime (Control) Act 2008 (SA) which stated that the Magistrates Court of South Australia “must, on the application by the Commissioner, make a control order against a person (the defendant) if the Court is satisfied that the defendant is a member of a declared organisation.” The appellants were both members of the Finks Motorcycle Club which had been deemed a “declared organisation” by the South Australian Attorney-General on 14 May 2009. The Court held, by 6:1 (Heydon J dissenting) that s 14 was invalid as the Magistrates Court was directed by the Attorney-General to such a degree as to compromise the Court’s institutional integrity.] French CJ: 42 [60] …The understanding of what constitutes “Courts of law” may be expressed in terms of assumptions underlying ss 71 and 77(iii) in relation to the courts of the States. [61] There are three overlapping assumptions which, as a matter of history and as a matter of inference from the text and structure of Ch III, underlie the adoption of the mechanism reflected in s 77(iii) of the Constitution. The first is the universal application throughout the Commonwealth of the rule of law, an assumption [2.640]

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South Australia v Totani cont. “upon which the Constitution depends for its efficacy.” The second is that the courts of the States are fit, in the sense of competent, to be entrusted with the exercise of federal jurisdiction. … The generality of the wording of ss 71 and 77(iii) indicates that the assumption of competence extends to all courts of the States, albeit the supervisory role of the Supreme Courts, as was submitted by the Solicitor-General of the Commonwealth, reinforces the independence 43 and impartiality of inferior State courts and contributes to the fulfilment of the constitutional imperative recognised in Kable. [62] The third assumption is that the courts of the States continue to bear the defining characteristics of courts and, in particular, the characteristics of independence, impartiality, fairness and adherence to the open-court principle. This formulation is deliberately non-exhaustive. In considering the attributes of courts contemplated by Ch III of the Constitution it is necessary to bear in mind the cautionary observation of Gummow, Hayne and Crennan JJ in Forge (2006) 228 CLR 45 at 76, [64]: “It is neither possible nor profitable to attempt to make some single all-embracing statement of the defining characteristics of a court.” Nevertheless, as their Honours added: “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.” At the heart of judicial independence, although not exhaustive of the concept, is decisional independence from influences external to proceedings in the court, including, but not limited to, the influence of the executive government and its authorities. (As to the multiple location of judicial decisional independence in separation-of-powers protections providing for “judicial independence” and within the rubric of “due process” and “the rule of law”, see Gerangelos, The Separation of Powers and Legislative Interference in Judicial Process (Hart Publishing, Oxford, 2009), p 8.) Decisional independence is a necessary condition of impartiality. Procedural fairness effected by impartiality and the natural justice hearing rule lies at the heart of the judicial process (For a recent discussion of the natural justice hearing rule in this context, see International Finance Trust Co Ltd (2009) 240 CLR 319 at 379–384 [139]–[150] per Heydon J). The open-court principle, which provides, among other things, a visible assurance of independence and impartiality, is also an “essential aspect” of the characteristics of all courts, including the courts of the States (Russell v Russell (1976) 134 CLR 495 at 520 per Gibbs J; see also at 505 per Barwick CJ, 532 per Stephen J). [63] The Convention Debates reveal implicit reflection on the principle of separation of powers in the context of a provision, later omitted, which would have barred any person holding judicial office from being appointed to or holding any executive office. … The limited record of consideration of judicial independence by delegates to the 44 Convention otherwise centred around debate about the mechanism for the removal of federal judges. … The absence of any recorded debate about the principle of independence enunciated by Kingston indicates that it was uncontroversial. The historical record does not indicate that the members of the Convention expressly adverted to the broader concept of the separation of judicial power in their debates (Wheeler, “Original Intent and the Doctrine of the Separation of Powers in Australia”, (1996) 7 Public Law Review 96 at 99–103; Gerangelos (2009), p 59). However, that does not detract from the conclusion that the Constitution was framed on the basis of common assumptions, at least among lawyers of the day, about the nature of courts and their independence in the discharge of judicial functions. [64] The assumption of the continuity of the defining characteristics of the courts of the States as courts of law is supported by ss 106 and 108 of the Constitution, which, by continuing the constitutions and laws of the former colonies subject to the Constitution of the Commonwealth, continued, inter alia, the courts of the colonies and their various jurisdictions. That continuity could accommodate the extension, diminution or modification of the organisation and jurisdiction of courts existing at Federation, the creation of new courts and the abolition of existing courts (other than the Supreme Courts). Those powers in State legislatures are derived from the constitutions of the States. Until 1986, they were also derived from s 5 of the Colonial Laws Validity Act 1865 (IMP) [28 & 29 Vict c 63]. Since 1986, they can be derived from s 2(2) of the Australia Acts (Australia Act 1986 (Cth); Australia Act 1986 (UK); and the Australia Acts (Request) Act 1985 of each of the States. [65] The assumption that all Australian courts would retain the defining characteristics of courts of law after Federation is also implicit in covering cl 5 of the Constitution… which provides that “[t]his Act, and all laws made by the Parliament of the Commonwealth under the Constitution, shall be binding on the 164

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South Australia v Totani cont. courts, judges, and people of every State and of every part of the Commonwealth”. … 45 [66] There was at Federation no doctrine of separation of powers entrenched in the constitutions of the States. … The absence of an entrenched doctrine of separation of powers under the constitutions of the States at Federation and thereafter does not detract from the acceptance at Federation and the continuation today of independence, impartiality, fairness and openness as essential characteristics of the courts of the States. Nor does the undoubted power of State Parliaments to determine the constitution and organisation of State courts detract from the continuation of those essential characteristics. It is possible to have organisational diversity across the Federation without compromising the fundamental requirements of a judicial system. The diversity of State courts 46 [67] Griffith CJ said in Federated Sawmill, Timberyard and General Woodworkers’ Employees’ Association (Adelaide Branch) v Alexander (“the Sawmillers’ Case”) that “when the Federal Parliament confers a new jurisdiction upon an existing State Court it takes the Court as it finds it, with all its limitations as to jurisdiction, unless otherwise expressly declared” ((1912) 15 CLR 308 at 313). The proposition in the Sawmillers’ Case, as developed in later decisions of this Court including Le Mesurier v Connor ((1929) 42 CLR 481), recognised that the Parliaments of the States retain the legislative power to determine the constitution of their courts and the organisational arrangements through which they will exercise their jurisdiction and powers (at 495–496 per Knox CJ, Rich and Dixon JJ). As Gummow, Hayne and Crennan JJ said in Forge ((2006) 228 CLR 45 at 75 [61]): “The provisions of Ch III do not give power to the federal Parliament to affect or alter the constitution or organisation of State courts.” [68] The statement made by Griffith CJ in the Sawmillers’ Case should not be over-generalised. As Gaudron J explained in Kable, it was “a vastly different statement from the unqualified proposition that the Commonwealth must take a State court as it finds it” ((1996) 189 CLR 51 at 102). The Parliament of a State does not have authority to enact a law which deprives a court of the State of one of its defining characteristics as a court, or impairs one or more of those characteristics. The statement in The Commonwealth v Hospital Contribution Fund about the unrestricted legislative competency of the States in relation to the composition, structure and organisation of their courts “as appropriate vehicles for the exercise of invested federal jurisdiction” ((1982) 150 CLR 49 at 61 per Mason J) must be read in the light of Kable and those decisions which further explain the principles which it enunciated. The point was made by Gummow J in Kable (at [137]), commenting on the decision in Le Mesurier: “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.” That limitation on State legislative power nevertheless makes ample allowance for diversity in the constitution and organisation of courts. Application of the principles 47 [69] The text and structure of Ch III of the Constitution postulate an integrated Australian court system for the exercise of the judicial power of the Commonwealth with this Court at its apex (Kable at 101 per Gaudron J, 114 per McHugh J, 138–143 per Gummow J). There is no distinction, so far as concerns the judicial power of the Commonwealth, between State courts and federal courts created by the Parliament (Kable at 101 per Gaudron J, 115 per McHugh J, 143 per Gummow J). The consequences of the constitutional placement of State courts in the integrated system include the following: (a)

A State legislature cannot confer upon a court of a State a function which substantially impairs its institutional integrity and which is therefore incompatible with its role as a repository of federal jurisdiction. …

(b)

State 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. …

(c)

The institutional integrity of a court requires both the reality and appearance of independence and impartiality. … [2.640]

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South Australia v Totani cont. (d)

The principles underlying the majority judgments in Kable and further expounded in the decisions of this Court which have followed after Kable do not constitute a codification of the limits of State legislative power with respect to State courts. Each case in which the Kable doctrine is invoked will require consideration of the impugned legislation because (Fardon at 618 [104] per Gummow J): “the critical notions of repugnancy and incompatibility are insusceptible of further definition in terms which necessarily dictate future outcomes.” For legislators this may require a prudential approach to the enactment of laws directing courts on how judicial power is to be exercised, particularly in areas central to the judicial function such as the provision of procedural fairness (International Finance Trust) and the conduct of proceedings in open court. It may also require a prudential approach to the 48 enactment of laws authorising the executive government or its authorities effectively to dictate the process or outcome of judicial proceedings.

(e)

The risk of a finding that a law is inconsistent with the limitations imposed by Ch III, protective of the institutional integrity of the courts, is particularly significant where the law impairs the reality or appearance of the decisional independence of the court.

The validity of s 14(1) of the SOCC Act falls for consideration against that background. [70] The Solicitor-General for South Australia submitted that the true question in determining whether legislation “impairs” or “detracts from” the institutional integrity of a State court is whether that court no longer satisfies the constitutional description “court of a State”. He reformulated the question as: “[D]oes a State Court exercising the impugned function nevertheless bear sufficient relation to a court of a state within the meaning of the Constitution?” … However, the true question is not whether a court of a State, subject to impugned legislation, can still be called a court of a State nor whether it bears a sufficient relation to a court of a State. The question indicated by the use of the term “integrity” is whether the court is required or empowered by the impugned legislation to do something which is substantially inconsistent or incompatible with the continuing subsistence, in every aspect of its judicial role, of its defining characteristics as a court. So much is implicit in the constitutional mandate of continuing institutional integrity. By way of example, a law which requires that a court give effect to a decision of an executive authority, as if it were a judicial decision of the court, would be inconsistent with the subsistence of judicial decisional independence. … [71] It has been accepted by this Court that the Parliament of the Commonwealth may pass a law which requires a court exercising federal jurisdiction to make specified orders if some conditions are met even if satisfaction of such conditions depends upon a decision or decisions of the executive government or one of its authorities (Palling v Corfield (1970) 123 CLR 52 at 58–59 Barwick CJ, 62–63 per McTiernan J, 64–65 per Menzies J, 65 per Windeyer J, 66–67 per Owen J, 68–70 per Walsh J, 70 per Gibbs J; International Finance Trust at 352 [49] per French CJ). 49 The Parliament of a State may enact a law of a similar kind in relation to the exercise of jurisdiction under State law. It is also the case that “in general, a legislature can select whatever factum it wishes as the ‘trigger’ of a particular legislative consequence” (Baker v The Queen (2004) 223 CLR 513 at 535 [43] per McHugh, Gummow, Hayne and Heydon JJ). But these powers in both the Commonwealth and the State spheres are subject to the qualification that they will not authorise a law which subjects a court in reality or appearance to direction from the executive as to the content of judicial decisions. In International Finance Trust Co Ltd this Court held invalid a law of the State of New South Wales which imposed upon the Supreme Court of New South Wales a process which, at the option of the executive, in substance required (at 366 [97] per Gummow and Bell JJ, French CJ agreeing at 356 [58]; see also at 386 [159]–[160] per Heydon J): “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”. [72] It follows from what has already been said in these reasons, and is reflected in the decisions of this Court, that one of the characteristics required of all courts capable of exercising the judicial power of the Commonwealth (including the courts of the Territories) is that they be, and appear to be, independent and impartial tribunals (North Australian Aboriginal Legal Aid Service Inc v Bradley (2004) 218 CLR 146 at 163 [29] per McHugh, Gummow, Kirby, Hayne, Callinan and Heydon JJ; Gypsy Jokers Motorcycle Club at 552–553 [10] per Gummow, Hayne, Heydon and Kiefel JJ). 166

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South Australia v Totani cont. Forms of external control of courts “appropriate to the exercise of authority by public officials and administrators” are inconsistent with that requirement (Gypsy Jokers at 553 [10] per Gummow, Hayne, Heydon and Kiefel JJ). The requirement is not a judicially generated imposition. It derives from historically based assumptions about courts which were extant at the time of Federation. [73] It is not necessary, in this case or any other, to mediate the constitutional assumption of actual and apparent independence and impartiality through its effect upon “public confidence” in the courts. That is a criterion which is hard to define, let alone apply by reference to any useful methodology. It may be the case from time to time that a law which trespasses upon the independence and impartiality of a court will have substantial popular support. That is not the measure of its compliance with the requirements of the Constitution. Were it otherwise, the strength of the protections for which the Constitution provides could fluctuate according to public opinion polls. The rule of law, upon which the Constitution is based, does not vary in its application to any individual or group according to the measure of public or official condemnation, however justified, of that individual or that group. The requirements of judicial independence and impartiality 50 are no less rigorous in the case of the criminal or anti-social defendant than they are in the case of the law-abiding person of impeccable character. In any event, as has been pointed out, the effect of the control order under challenge in this case reaches beyond Mr Hudson. It potentially touches members of the public at large and well beyond the boundaries of South Australia. [74] The question in the present case is whether s 14(1) of the SOCC Act requires the Magistrates Court of South Australia to do something which is not consistent with the assumption of independence and impartiality of courts underlying Ch III of the Constitution. As Gummow J observes in his reasons, the question directs attention to the practical operation of s 14(1) and the significance for that practical operation of the Attorney-General’s declaration under s 10(1) (at [138]). [75] Section 14(1) of the SOCC Act confers upon the Magistrates Court the obligation, upon application by the Commissioner, to make a control order in respect of a person by reason of that person’s membership of an organisation declared by the Attorney-General. The declaration rests upon a number of findings including, in every case, a determination by the Attorney-General that members of the organisation, who need not be specified, have committed criminal offences, for which they may never have been charged or convicted. The findings, of which the Magistrates Court may be for the most part unaware and which in any event it cannot effectively or readily question, enliven, through the declaration which they support, the duty of the Court to make control orders against any member of the organisation in respect of whom the Commissioner makes an application. That is so whether or not that member has committed or is ever likely to commit a criminal offence. Membership of a declared organisation is not made an offence by the SOCC Act. [76] The control order involves a serious imposition upon the personal liberty of the individual who is the subject of the control order and subjects him or her to criminal penalties for breach of the order. It enlivens restrictions upon members of the public limiting their capacity to communicate with the person the subject of the control order. Breaches of those restrictions are criminal offences. A person exposed to such a restriction and to criminal liability for its breach may be an entirely law-abiding citizen unlikely, on any view, to engage in contravention of the law. The control order is an order of the kind which, in its effect upon personal liberty, is ordinarily within the domain of judicial power. I should add that I agree with the reasons of Gummow J for rejecting the submission by the State of Western Australia that the validity of s 14(1) is supported by the proposition 51 that the State of South Australia could have vested the power to make a control order in the Attorney-General himself (at [146]–[148]). … [78] The fact that the impugned legislation provides for an adjudicative process does not determine the question whether it impairs the institutional integrity of the Magistrates Court by impairing the reality or appearance of judicial decisional independence. The laws held invalid in Kable and International Finance Trust Co Ltd both allowed for an adjudicative process by the court to which they applied. [79] The submission of the State of South Australia rightly identified the question of membership of a declared organisation as “[t]he central issue raised by an application for a control order”. Although it was acknowledged that membership may be easy to prove with the practical result that the making of a control order would be inevitable, 52 it was said not to follow that this would always be the case. It could not be said, so the argument went, that the outcome of the Commissioner’s application would [2.640]

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South Australia v Totani cont. be directed. [80] In submissions made on behalf of Messrs Totani and Hudson, emphasis was placed on the standard of proof in an application for a control order, which, by virtue of s 5 of the SOCC Act, is the balance of probabilities. But that is not determinative or even more than marginally relevant to any consideration of the relationship between the executive declaration and the making of a control order, which is under scrutiny in the present case. [81] The submissions made on behalf of the State of South Australia did not, with respect, diminish the dominance of the executive act of declaration of an organisation and the findings of fact behind it in determining for all practical purposes the outcome of the control order application. While it is true that membership can be contested, the breadth of the definition of “member” is such that, given any evidential basis for the contention that the defendant is a member, the practical burden of disproof is likely to fall upon the defendant. [82] 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 (at [149]), Crennan and Bell JJ (at [436]) and Kiefel J (at [481]) 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 (at [236]) and the repugnancy of that function to the institutional integrity of the Court. [83] 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, 53 namely, the appearance of independence and impartiality. In my opinion, s 14(1) is invalid. … Gummow J: 65 [139] 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. [140] The operation of s 14(1) may be contrasted with that of the legislation the validity of which was upheld in Thomas v Mowbray ((2007) 233 CLR 307). 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 in the curial decision. … 66 [142] 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. [143] The 168

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South Australia v Totani cont. Solicitor-General for South Australia relied upon the range of matters to which the Magistrates Court was to have regard in considering the scope of the prohibitions imposed in each particular case by the control order (s 14(6)). But the primary requirement is that there must be a prohibition upon association with other members, except as may be specified in the order (s 14(5)). [144] For these reasons, which develop proposition (i) upon which the Full Court majority founded their decision, s 14(1) of the Act requires the Magistrates Court to depart in a significant degree from the methods and standards which characterise the exercise of judicial power. A federal law in these terms would be repugnant to Ch III of the Constitution. [145] But the Act is State legislation. As Callinan and Heydon JJ explained in Fardon ((2004) 223 CLR 575 at 655–656): Although the test, whether, if the State enactment were a federal enactment, it would infringe Ch III of the Constitution, is a useful one, it is not the exclusive test of validity. It is possible that a State legislative conferral of power which, if it were federal legislation, would infringe Ch III of the Constitution, may nonetheless be valid. Not everything by way of decision-making denied to a federal judge is denied to a judge of a State. So long as the State court, in applying legislation, is not called upon to act and decide, effectively as the alter ego of the legislature or the executive, so long as it is to undertake a genuine adjudicative process and so long as its integrity and independence as a court are not compromised, then the legislation in question will not infringe Ch III of the Constitution. [146] Counsel for Western Australia submitted that the respondents could have had no complaint if the Act had vested in the executive of South Australia both the function of declaring organisations under Pt 2 and that of making control orders under Pt 3. This was said to follow from 67 the proposition that it is open to a State legislature to authorise a body other than a court to exercise judicial power. A corollary was said to be that a State law may authorise a body other than a court to punish criminal guilt by ordering the detention of the person (Cf Fardon v Attorney-General (Qld) (2004) 223 CLR 575 at 600). … [147] … As a general proposition, State legislatures may confer judicial powers on a body that is not a “court of a State” within the meaning of s 77(iii) of the Constitution (K-Generation Pty Ltd v Liquor Licensing Court (2009) 237 CLR 501 at 544]). But that does not involve acceptance of the corollary respecting enforcement of the criminal law. [148] The submissions by Western Australia appeared to be directed to support an argument that because South Australia could have legislated in terms which did not seek to conscript any court of that State, but had not done so, there was a diminished case for the application of what was called the Kable doctrine. With some cogency, the respondents countered that consideration of what may or may not be the greater liberty of legislative action at the State rather than federal level serves to strengthen, not weaken, the constitutional rationale for the Kable doctrine. [149] 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 Attorney-General 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: 86 [222] Section 14(1) of SOCCA exhibits three, connected, features that are critical to consideration of its validity. First, the court that makes an order under s 14(1) does not ascertain, declare or enforce any right or 87 liability that exists at the time the proceedings are instituted. Secondly, the court’s order creates new and particular restrictions on association. The restrictions are particular in two respects. They are particular in that they are directed only to the defendant in question. They are also particular in that they do not reflect, let alone give effect to, any more general legislative proscription of any and every act of association between or with members of a declared organisation. Thirdly, the court must make the order against the particular defendant, without the court making any inquiry for itself about what the subject of the order has done, or may do in the future, or any inquiry about what the executive may have concluded that the subject of the order has done, or may do in the future. [223] Section 14(1) of SOCCA thus stands in sharp contrast with the [2.640]

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South Australia v Totani cont. provisions of the Criminal Code (Cth) that were in issue in Thomas v Mowbray ((2007) 233 CLR 307 at 328–329). Provisions of Div 104 of Pt 5.3 of the Criminal Code permitted the making of control orders in relation to a person in certain circumstances. Those circumstances included the issuing court being satisfied that “making the order would substantially assist in preventing a terrorist act” or that the person against whom the order was to be made was a person who “has provided training to, or received training from, a listed terrorist organisation” 104.4(1)(c)). Moreover, s 104.4(1)(d) of the Criminal Code provided that an issuing court may make a control order of the kind in issue in Thomas v Mowbray “only if … 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” (emphasis added). [224] Unlike s 14(1) of SOCCA, the provisions of the Criminal Code in issue in Thomas v Mowbray thus required the issuing court to be satisfied either that the person against whom the order was to be made had engaged in particular past conduct, or that the order would have an identified consequence. The past conduct in issue under the Criminal Code provisions was conduct which the Criminal Code made unlawful. The relevant consequence (of protecting the public from a terrorist act) had to be related directly to the defendant (as did the fact of past conduct), because a control order could be made only if each particular aspect of the proposed order (as it operated against the defendant) was both reasonably necessary and reasonably appropriate and adapted for the purpose of protecting the public from a terrorist act. And, as explained in Thomas v Mowbray (at 328–329), other forms of preventive order, like apprehended violence orders, depend upon inquiries no different in substance from those that were required under the provisions in issue in that case. 88 [225] In summary, then, s 14(1) requires the Magistrates Court to perform functions that have the following characteristics: 1.

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;

2.

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;

3.

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;

4.

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;

5.

a control order creates new norms of conduct, contravention of which is a crime;

6.

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).

[226] 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 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 170

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South Australia v Totani cont. 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 89 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. … [228] Section 14(1) of SOCCA does not permit or require the Magistrates Court to determine the existence of any right or obligation. The Court is required to make a control order without enquiring how, if at all, that order will contribute to the legislative object of disrupting the criminal activities of identified groups, or the criminal activities of any individual. The obligations which are created by the Court’s order are not imposed on account of what the person against whom the order is directed has done, will do, or may do. [229] It is next important to recognise that the Court must act at the behest of the Executive. It is the Executive which chooses whether to apply for an order, and the Executive which chooses the members of a declared organisation that are to be made subject to a control order. So long as the person named as a defendant falls within the definition of “member”, the Court cannot refuse the Executive’s application; the Court must make a control order. That the Court must decide whether the defendant falls within the definition of “member” does not detract 90 from the conclusion that the Court is acting at the behest of the Executive. … [230] The courts are not to be used as an arm of the Executive to make unlawful the association between individuals when their associating together is not otherwise a crime, where such prohibition is to be imposed without any determination that the association of the particular individuals has been, will be, or even may be, for criminal purposes. [His Honour concluded at [236]–[237] that s 14(1) was invalid as:] What s 14(1) does is permit the Executive to enlist the Magistrates Court to create new norms of behaviour for those particular members who are identified by the Executive as meriting application for a control order. They are to be subjected to special restraint, over and above the limitations that the Act imposes on the public at large, not for what they have done or may do, and not for what any identified person with whom they would associate has done or may do, but because the Executive has chosen them. That function is repugnant to the institutional integrity of the Court that is required to perform it. Crennan and Bell JJ and Kiefel J joined the majority in invalidating s 14(1). Crennan and Bell JJ held (at 157 [428]): Legislation which draws a court into the implementation of government policy, by confining the court’s adjudicative process so that the court is directed or required to implement legislative or executive determinations without following ordinary judicial processes, will deprive that court of the characteristics of an independent and impartial tribunal – “those defining characteristics which mark a court apart from other decision-making bodies” (Forge v Australian Securities and Investments Commission at 76 [63], 78 [68] per Gummow, Hayne and Crennan JJ. See also Gypsy Jokers Motorcycle Club Inc v Commissioner of Police at 560 [39] per Gummow, Hayne, Heydon and Kiefel JJ). Such legislation would render that court an unsuitable repository of federal jurisdiction. [Their Honours concluded that s 14(1) involved the Magistrates Court in a process “so dependent on the Executive’s determination in the declaration, that is departs impermissibly from the ordinary judicial processes of an independent and impartial tribunal”. It saw the Court implement the Executive’s wish “without undertaking any independent curial determination, or adjudication” as to whether the party is in fact “poses a risk in terms of the objects of the Act”. This meant that the Court was forced “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” (at 160 [436]). Similarly, Kiefel J held (at 173 [481]) that s 14(1) “involve[d] the enlistment of the Court to give effect to legislative and executive policy” and therefore compromised “the independence of the Court” and “its institutional integrity”. Heydon J issued a strong dissent. While his Honour accepted (at 103–104 [264]) that to be invalid under the Kable doctrine a law must be “repugnant to the judicial process in a fundamental degree” [2.640]

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South Australia v Totani cont. but that “State legislation compelling a departure to a significant degree from traditional methods and standards in carrying out judicial functions may be invalid, the absence of significant departure from those methods and standards points to validity”. He distinguished s 14 from the legislation struck down in Kable and found it could be aligned with the legislation the High Court found valid in Thomas v Mowbray. He rejected the submission that the Magistrates Court was nothing more than a “rubber stamp” (at 122 [320]) to the actions of the Attorney-General in ordering that a control order be made and held that “[t]he Kable doctrine is not infringed by legislation requiring the court to make an order if certain conditions are met” and “[n]or is it infringed if among those conditions is a particular decision by the executive” (at 129 [339]).]

[2.650]

Notes&Questions

1.

In South Australia v Totani French CJ (at 50–51 [76]) and Gummow J (at 66–67 [146]–[147]) rejected Western Australia’s submission that the functions that had been conferred on the state judicial branch, could instead have been allocated to the executive arm. What would have been the implications of this submission if it had been successful? On what basis did their Honours reject Western Australia’s submission?

2.

Do you think the majority was correct to distinguish s 14(1) from the Commonwealth control order legislation upheld in Thomas v Mowbray (2007) 233 CLR 307 (see Chapter 13, [13.330]). See, eg, the comment of Gummow J at 65 [140]: 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 in the curial decision.

3.

French CJ outlines an open list of the “defining characteristics of courts” required by Chapter III of the Commonwealth Constitution. Chief Justice Spigelman has commented (“The Centrality of Jurisdictional Error” (2010) 21 Public Law Review 77, 80) that: The concept of a “constitutional expression” provides a textual basis for and, therefore, an aura of orthodoxy to, significant changes in constitutional jurisprudence. That aura dissipates when the court undertakes the unavoidably creative task of instilling substantive content to the constitutional dimension of a constitutional expression by identifying its “essential” features or characteristics.

Do you agree with this comment? Does it make the listing of “defining characteristics” of courts problematic? 4.

French CJ disavowed (at 48 [70]) the Solicitor General for South Australia’s submission that the constitutional inquiry should focus on whether a State court ceases to “satisf[y] the constitutional description ‘court of a State’”. Why did the Chief Justice reject this formulation? See also the dissenting judgment of Kirby J in Gypsy Jokers at 578 [105].

5.

See further C Steytler and I Field, “The “Institutional Integrity” Principle: Where Are We Now, and Where Are We Headed” (2011) 35(2) University of Western Australia Law Review 227; G Appleby and J Williams, “A New Coat of Paint: Law and Order

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and the Refurbishment of Kable” (2012) 40 Federal Law Review 1; B Lim, “Attributes and Attribution of State Courts – Federalism and the Kable Principle” (2012) 40 Federal Law Review 31. 6.

See also The Public Service Association and Professional Officers’ Association Amalgamated (NSW) v Director of Public Employment (2012) 87 ALJR 162 (at 166–167 [14] (per French CJ); at 175 [56]–[57] (per Hayne, Crennan, Kiefel and Bell JJ)) for consideration of the constitutionality of a State judge exercising “judicial functions (when sitting as a member of the Industrial Court [of New South Wales]) and non-judicial functions (when performing other functions of the [Industrial Relations] Commission [of New South Wales).” Would such a hybrid conferral of functions be permissible pursuant to a federal law?

[2.660] The Kable doctrine’s successful run in International Finance Trust and Totani halted

in Hogan v Hinch (2011) 243 CLR 506. The High Court in Hogan rejected the submission that the ability of a Victorian Court to make a suppression order under the Serious Sex Offenders Monitoring Act 2005 (Vic) to censor the names of particular sex offenders did not bestow “upon the court functions inconsistent with its essential curial characteristics” (at 542 [46] per French CJ) or “attack the institutional integrity of the State courts as independent and impartial tribunals” (at 554 [91] per Gummow, Hayne, Heydon, Crennan, Kiefel and Bell JJ). However, soon after in Wainohu v New South Wales (2011) 243 CLR 181 a majority of the High Court expanded the edges of the Kable doctrine slightly further. Across two majority judgments (a joint judgment of French CJ and Kiefel J and another judgment of Gummow, Hayne, Crennan and Bell JJ) the Court confirmed that the Kable incompatibility principle could extend to supervise functions conferred on state judges persona designata and that the absence of a judicial requirement to give reasons could influence whether a provision amounted to an incompatible function. French CJ and Kiefel J held (at 210 [47], 211–212 [50]) that: The principle in Kable also leads to the conclusion that a State legislature cannot enact a law conferring upon a judge of a State court a non-judicial function which is substantially incompatible with the functions of the court of which the judge is a member. Although the function may be conferred upon the judge in his or her capacity as an individual, the statute may create a close connection and therefore an association with the person’s role as a judge. Where this is the case, the potential for incompatibility of the non-judicial function is brought more sharply into focus… so long as that function is conferred upon the judge by virtue of his or her office as a judge… the fact that the function is conferred persona designata should not be given great weight. It would generally not be determinative of the question of compatibility.

Gummow, Hayne, Crennan and Bell JJ held (at 229 [105]) that: the Constitution does not permit of different grades or qualities of justice. It follows that repugnancy to or incompatibility with that institutional integrity may be manifested by State (and Territory) … as well as federal, legislation which provides for the conferral of functions upon a judicial officer persona designata.

The Crime (Criminal Organisations Control) Act 2009 (NSW) allowed judges of the Supreme Court of New South Wales, who consented, to be appointed as “eligible judges” under Part 2 of the Act. The Commissioner of Police could apply to an eligible judge for a declaration that an organization be a “declared organisation”. Such a declaration could then form the basis of a control order to the New South Wales Supreme Court under Pt 3 of the Act. The majority held that the fact that an eligible judge could make a declaration in relation to an organisation, being a substantive decision, without the provision of reasons was incompatible with the institutional integrity of the Supreme Court of New South Wales. Gummow, Hayne, Crennan and Bell JJ concluded that “[t]he effect of Pt 2 is to utilise confidence in impartial, reasoned [2.660]

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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” (at 230 [109]). In upholding the appeal, the majority found that Pt 2, and consequently Pt 3, were invalid. French CJ and Kiefel J also concluded that it was an essential attribute of a court that it “generally gives reasons for its decisions” and that, by virtue of s 73 of the Commonwealth Constitution, this was constitutionalised in relation to the State Supreme Courts (at 208–209 [44]). Their Honours however accepted that while this might be clearer for “final” or “important interlocutory decisions” (at 215 [58]), “the content and detail of the reasons to be provided – will vary according to the nature of the jurisdiction which the court is exercising and the particular matter the subject of the decision” (at 215 [56]). The majority found that it was not sufficient that a judge might choose to provide reasons without an obligation to do so (at 219–220 [69], 228 [103]). Heydon J dissented. His Honour found that eligible judges were still able to furnish reasons for a decision although they were not obligated to do so. In accepting the submissions made by the State of Victoria, he found that the extension of the incompatibility principle to functions conferred persona designata was unfounded.

Momcilovic v The Queen [2.670] Momcilovic v The Queen (2011) 245 CLR 1 at 64–65, 222–224, 96, 184 [Ms Momcilovic sought to have her conviction for drug trafficking quashed on a number of constitutional grounds. Relevantly, for the purposes of this Chapter, Ms Momcilovic argued that ss 32(1) (in conferring a statutory interpretation function) and 36 (in empowering the Supreme Court to make a declaration of inconsistent interpretation) of the Charter of Human Rights and Responsibilities Act 2006 (Vic) were invalid. A majority of the High Court (French CJ, Bell, Crennan and Kiefel JJ) found the relevant provisions of the Charter were constitutionally valid (with Heydon J dissenting as to the validity of s 32(1) and Gummow J, Hayne J and Heydon J dissenting from the majority in relation to the validity of s 36). Section 32(1) provided: “So far as it is possible to do so consistently with their purpose, all statutory provisions must be interpreted in a way that is compatible with human rights.” Section 36(2) provided: “Subject to any relevant override declaration, if 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.” Much of the discussion in relation to the validity focused on the validity of a declaration of inconsistent interpretation under s 36 (see Chapter 11).] French CJ: 64 [88] The condition which enlivens the exercise of the power in s 36(2) is the formation by the Supreme Court, in a proceeding, of an opinion that a statutory provision cannot be interpreted consistently with a human right. The opinion must have been formed by the Court in carrying out its judicial function. By necessary implication, the opinion must have been part of the reasoning of the Court which led it to adopt an interpretation of the provision in question which was inconsistent with a human right. That interpretation will have affected the resolution of the proceedings before the court in which the rights and liabilities of the parties were determined. The declaration under s 36, however, does not decide or affect those rights or liabilities. Nor does it have any effect upon the operation of the statutory provision. It has only one legal consequence and that is to enliven the obligations imposed upon the Attorney-General and the relevant Minister by s 37 of the Charter. It is not a declaration of a kind that could be made in the exercise by the Supreme Court of its general powers to award declaratory relief. The question is whether it is a declaration which involves the exercise of judicial power. Gaudron J in Truth About Motorways ((2000) 200 CLR 591 at [52]) said: [A] declaration cannot be made if it “will produce no foreseeable consequences for the parties”. That is not simply a matter of discretion. Rather, a declaration that produces no foreseeable consequences is so divorced from the administration of the law as not to involve a 174

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Momcilovic v The Queen cont. matter for the purposes of Ch III of the Constitution. And as it is not a matter for those purposes, it cannot engage the judicial power of the Commonwealth. Although her Honour was speaking in relation to the exercise of Commonwealth judicial power, her observation has a wider significance for the proper subject matter and purposes of declarations in the exercise of judicial power generally and reflects what was said in that wider context in Gardner v Dairy Industry Authority (NSW) ((1977) 138 CLR 646, 52 ALJR 180 at 184 per Barwick CJ; at 188 per Mason J, Jacobs and Murphy JJ agreeing; at 188–189 per Aickin J). 65 [89] Despite its form and its connection to the proceedings before the Supreme Court and to the reasoning of the Court leading to the disposition of those proceedings, a declaration of inconsistent interpretation made under s 36 does not involve the exercise of a judicial function. At the point at which such a declaration is made the Court will have decided all matters relevant to the disposition of the proceedings. The power conferred by s 36 plays no part in that process. The declaration sets down no guidance for the disposition of future cases involving similar principles of law. It has no legal effect upon the validity of the statutory provision which is its subject. It has statutory consequences of a procedural character. Those statutory consequences are relevant to the Attorney-General as a member of the Executive and as a member of the Victorian Parliament and to the Parliament itself. [90] The declaration of inconsistent interpretation cannot be regarded as analogous to the judicial function nor to any functions historically exercised by courts and which, for that reason, have been regarded as judicial. [French CJ (with Bell J agreeing) found that a declaration of inconsistent interpretation by the Victorian Supreme Court was not a judicial function, or a function suitably incidental to a judicial function. However, the Chief Justice observed that this was “not fatal to its validity” (at 66 [92]). The remaining question was whether the non-judicial function was “compatible with the institutional integrity of the State Court and its status as a repository of federal jurisdiction” (at 66 [92]). His Honour found that the function was “consistent with the existing constitutional relationship between the Court, the legislative and the Executive” (at 67 [95]) but that “[b]y exemplifying the proper constitutional limits of the Court’s functions it serves to reinforce, rather than impair, the institutional integrity of the Court” (at 68 [97]). Its non-judicial nature did, however, mean that it could not go on appeal to the High Court, within s 73 of the Commonwealth Constitution (at 70 [101]). Crennan and Kiefel JJ held that while bringing about “a novel alteration to the customary interchange between courts and Parliament” (at 207 [534]), s 36 was not unconstitutional or incompatible when it involved a function incidental to the exercise of judicial power and was made sufficiently independently of the executive and the legislature (see 221–228 [582]–[603].)] Crennan and Kiefel JJ: 222 [584] A declaration under s 36(2) is not directed to the determination of a legal controversy and has no binding effect. It is not an exercise of judicial power. The declaration of inconsistency for which s 36(2) provides is in the nature of a statement, made by the Supreme Court following upon its interpretation of a statutory provision in the context of the Charter, that an inconsistency between the two statutes is evident, and of which the Attorney-General is notified. In that sense it constitutes a conclusion but not an advisory opinion of the kind with which this Court was concerned in Re Judiciary and Navigation Acts ((1921) 29 CLR 257 at 266–267) and which the Court was required by those Acts to give. It is a formal conclusion arising out of the exercise undertaken by the Supreme Court in respect of s 32(1). That exercise under s 32(1) is integral to the resolution of the “matter” between the appellant and the first respondent. Standing alone, s 36 could not give rise to any “matter” within the meaning of Ch III of the Constitution. [585] The Attorney-General relied upon the fact that, pursuant to the Charter, a declaration is to be made in the course of proceedings where a question of interpretation concerning the Charter is raised, the resolution of which might affect an accused’s rights or liabilities. But neither the placement by the legislature of the declaration within the course of the proceedings, nor the joinder of the Attorney-General and the Commission to the proceedings, can clothe the declaration made by the Court of Appeal with the qualities of a declaratory order made in connection with the “matter” which was the subject of the trial of the appellant. The interpretation of s 5 of the Drugs Act 1908 formed part of that matter, for it concerned questions as to the essential elements of the offence with which the appellant was charged and the obligations of the parties to prove those elements. It concerned the [2.670]

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Momcilovic v The Queen cont. right of the appellant to require the Crown to prove her possession of the drugs for the purpose of sale. [586] The declaration involves a separate question, as to whether s 5 of the Drugs Act 1908 is compatible with s 25(1) of the Charter. It may be said that the inquiry into that question has a connection to the matter the subject of the appellant’s trial, or that it is incidental or ancillary to it. The determination of the question of inconsistency with the Charter and a declaration giving expression to that determination does not establish 223 any right, duty or liability (Re Judiciary and Navigation Acts (1921) 29 CLR 257 at 265). The purposes of a declaration do not involve the administration of the law, but rather its possible alteration. A statement or conclusion, made incidentally to the exercise of judicial power, which induces a change in legislation, is not a judicial decision. [587] The consequences which are produced by the declaration are largely steps which the Charter requires the Attorney-General or the relevant Minister to take, once the inconsistency has been notified. It is not necessary to determine the extent of those obligations and whether they are of such a nature as to be enforceable. For present purposes it may be observed that they are not consequences which follow from the determination of the matter involving the appellant. This is not to say that it may not be possible for a law to be framed in such a way that a “matter” could arise for which a declaration was the legal consequence: for example, if it were binding between the parties. But that position does not pertain with respect to the Charter. [588] The discussion in Mellifont v Attorney-General (Qld) ((1991) 173 CLR 289) provides assistance. There, provision was made for the referral by the Attorney-General of the State of Queensland of a point of law arising in a criminal trial to the Court of Criminal Appeal for determination and opinion, even though the proceedings had resulted in an acquittal. But as this Court explained, the answer given was not divorced from an attempt to administer the law (Mellifont at 303, referring to Re Judiciary and Navigation Acts (1921) 29 CLR 257 at 266–267). The answers provided by the Court of Criminal Appeal constituted an important step in the judicial determination of the rights and liabilities of the parties in the trial of the accused (Mellifont at 303). The effect of the decision on the reference was to correct an error of law in the trial judge’s ruling in those proceedings (Mellifont at 305). [589] The exercise of judicial power by the Court of Appeal in proceedings concerning the interpretation of s 5 of the Drugs Act 1908 placed that Court in a position to identify any inconsistency between s 5 of the Drugs Act 1908 and s 25(1) of the Charter, and to draw a conclusion in respect of that inconsistency. That connection is not sufficient to render the power to make a declaration an exercise of judicial power, but it serves to show that the making of a declaration is a function incidental to an exercise of judicial power. This distinguishes such a function from the act of making a declaratory order about a hypothetical matter, which has been observed to be beyond the boundaries of judicial power (Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 at 582). 224 [590] In this regard it is important to recall that the declaration under s 36(2) does not require more than a statement or conclusion as to the interpretation of the Charter and the statutory provision in question. In particular the Supreme Court is not required, preparatory to a declaration, to undertake the tests under s 7(2). If that process had been required it may well have been said that the Court was being asked to consider an abstract question of law (Re Judiciary and Navigation Acts (1921) 29 CLR 257 at 267) as to the justification of s 5 of the Drugs Act 1908 tested by reference to its proportionality pursuant to s 7(2), which has no legal consequence. However, such a question is divorced from the question of statutory construction to which s 32 refers and which the declaration under s 36(2) is intended to follow. … [597] 225 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), (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. … 228 [603] The requirements of notification are the only mandatory aspects of the declaration process. Too much should not be read into these obligations, given that it is the Court which decides, in the first place, whether to make a declaration. In doing so it is not responsive to any legislative command. 176

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Momcilovic v The Queen cont. These requirements and the declaration itself are largely innocuous so far as concerns the Supreme Court. Their principal purpose is to set in train a process whereby the relevant Minister considers what should be done by way of legislative change. No incompatibility with the institutional integrity of the Supreme Court is disclosed by reference to these matters. [Their Honours did, however conclude that it was inappropriate for the declaration to have been made by the Court of Appeal and that this would frequently be the case in a criminal law setting (at 208–209 [604]–[605]). Gummow J (with Hayne J agreeing on this point) found that s 36 was invalid and “incompatible with the institutional integrity of the Supreme Court” (at 97 [188]).] Gummow J: 96 [184] In the division between judicial and legislative functions it is appropriately the responsibility of the legislature to decide whether the existing statute law should be altered or replaced (State Government Insurance Commission v Trigwell (1979) 142 CLR 617 at 634). It is no part of the judicial power, in exercise of a function sought to be conferred on the courts by statute, formally to set in train a process whereby the executive branch of government may or may not decide to engage legislative processes to change existing legislation. [Heydon J struck down the validity of the entire Victorian Charter on the basis of the invalidity of a number of key provisions including ss 7(2), 32(1), 33, 36 and 37. In relation to s 36 he concluded that it was conferring a non-judicial function which was “not an incident of the judicial process” and that the function conferred removed “the Supreme Court of Victoria outside of the constitutional conception of a ‘court’” (at 185 [457]).] Heydon J: 184 [456] Validity of ss 33, 36 and 37. Thus the whole Charter is invalid, either because of s 7(2) or because of s 32(1) or both. The effect of s 7(2) is to permit and compel a considerable redefinition of rights. The effect of s 32(1) is to cause statutes to be changed radically. In order to maintain a coherent system of rules, they must be made slowly and infrequently, and legislating must be kept sharply distinguished from adjudicating. For unless laws are stable, they [185] cannot be known; and if they cannot be known, they can neither be subscribed to nor enforced (Letwin, “On Conservative Individualism” in Cowling (ed), Conservative Essays (1978) 52 at 63). Section 7(2) operates neither clearly nor infrequently. The same is true of s 32(1). [457] Alternatively, ss 33, 36 and 37 are invalid. While s 37 creates duties on the Minister administering the relevant statutory provision, they are created only by s 37. They are not created by the court in deciding the controversy between the parties (McHugh, A Human Rights Act, the Courts and the Constitution, Paper delivered at the Australian Human Rights Commission, 5 March 2009, p 44). When the court makes a s 36 declaration it is not making a “declaration of right”. It is not exercising judicial power. A s 36 declaration is merely advisory in character. It does not declare any rights of the parties. It decides nothing. And it does not affect their rights: s 36(5)(b). This is illustrated by one of the appellant’s arguments for a special costs order in these proceedings. She submitted that debate about s 36 was a matter of complete irrelevance to her rights and duties. In this respect her submission was entirely correct. A s 36 declaration does not involve the exercise of a judicial function and it is not an incident of the judicial process. The work of the Supreme Court of Victoria, sitting as such, is limited to the judicial process. The power to make a s 36 declaration takes the Supreme Court of Victoria outside the constitutional conception of a “court”.

[2.680]

(a) (b)

Notes&Questions

How do the majority and the minority differ in their application of the Kable principle in this case? The whole Court agreed in Momcilovic that the declaration of inconsistent interpretation was not an exercise of judicial power. Why do you think the declaration could not be classed as suitably judicial? [2.680]

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(c)

See further W Bateman and J Stellios, “Chapter III of the Constitution, Federal Jurisdiction and Dialogue Charters of Human Rights” (2012) 36 Melbourne University Law Review 1.

Assistant Commissioner Condon v Pompano [2.690] Assistant Commissioner Condon v Pompano Pty Ltd (2013) 252 CLR 38 [Questions relating to the constitutional validity of the Criminal Organisation Act 2009 (Qld) came before the Full Court of the High Court in a Special Case. The Special Case derived from proceedings in the Supreme Court of Queensland to declare the Gold Coast Chapter of the Finks Motorcycle Club and its affiliated company, Pompano Pty Ltd, a “criminal organisation” under the Act. The respondents contended that the Act infringed Ch III of the Commonwealth Constitution in denying procedural fairness to a party the subject of the relevant application. The Act provided for the Supreme Court of Queensland to hear secret evidence in closed court for “declarations and orders for the purpose of disrupting and restricting the activities of organisations involved in serious criminal activity”. An organisation declared to be a “criminal organisation” under the Act could be subject to the making of control orders (Pt 3 of the Act), public safety orders (Pt 4 of the Act) or fortification removal orders (Pt 5 of the Act). Under Pt 6 of the Act, ex parte applications could be made for information “relating to actual or suspected criminal activity” to be declared “criminal intelligence” and accordingly withheld from the respondent to an application for the relevant declaration or orders along with their legal representatives. The Act also provided, under Pt 7, for a Criminal Organisation Public Interest Monitor (COPIM). Under s 86 of the Act the functions of the COPIM were: 1.

to monitor each application to the court for a criminal organisation order or the variation or revocation of a criminal organisation order; and

2.

to monitor each criminal intelligence application; and

3.

to test, and make submissions to the court about, the appropriateness and validity of the monitored application. The High Court, in three separate judgments, upheld the validity of the Act and concluded that it did not contravene Ch III of the Commonwealth Constitution]. French CJ: 72 [68] The defining or essential characteristics of courts are not attributes plucked from a platonic universe of ideal forms. They are used to describe limits, deriving from Ch III of the Constitution, upon the functions which legislatures may confer upon State courts and the commands to which they may subject them. Those limits are rooted in the text and structure of the Constitution informed by the common law, which carries with it historically developed concepts of courts and the judicial function. Historically evolved as they are and requiring application in the real world, the defining characteristics of courts are not and cannot be absolutes. Decisional independence operates within the framework of the rule of law and not outside it (Public Service Association and Professional Officers’ Association Amalgamated (NSW) v Director of Public Employment (2012) 250 CLR 343). Procedural fairness, manifested in the requirements that the court be and appear to be impartial and that parties be heard by the court, is defined by practical judgments about its content and application which may vary according to the circumstances. Both the open court principle and the hearing rule may be qualified by public interest considerations such as the protection of sensitive information and the identities of vulnerable witnesses, including informants in criminal matters. … 75 [78] The effect of Pt 6 of the … [Act] … upon the normal protections of procedural fairness is significant. On the other hand, the Supreme Court performs a recognisably judicial function in determining an application under that Part. It is not able to be directed as to the outcome. It retains significant inherent powers and its powers under the UCPR [Uniform Civil Procedure Rules 1999 (Qld)] in relation to the proceedings. The process is analogous in some respects to that used in the determination of public immunity claims in the exercise of the inherent power of the Supreme Court. The provisions of Pt 6 relating to an application for a criminal intelligence declaration do not impair the essential and defining characteristics of the Supreme Court so as to transgress the limitations on State legislative power derived from Ch III of the Constitution. … 79 [88] Understandably the respondents placed great emphasis on the provision for special closed hearings and the secrecy attaching to criminal intelligence 178

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Assistant Commissioner Condon v Pompano cont. tendered to the Supreme Court. Those provisions undoubtedly represent incursions upon the open court principle and procedural fairness. The Supreme Court, however, retains its decisional independence and the powers necessary to mitigate the extent of the 80 unfairness to the respondent in the circumstances of the particular case. It retains the responsibility to determine what weight, if any, to give to criminal intelligence and, in particular, hearsay evidence relating to information provided by informants. The power of the Supreme Court to control its own proceedings in order to avoid unfairness also suggests that it would have a discretion to refuse to act upon criminal intelligence where to do so would give rise to a degree of unfairness in the circumstances of the particular case which could not have been contemplated at the time that the criminal intelligence declaration was made. [89] Despite the incursions on the open court principle and the normal protections of procedural fairness effected by the impugned provisions of the COA, they do not so impair the essential or defining characteristics of the Supreme Court as a court as to be beyond the legislative power of the Queensland Parliament. The impugned provisions are valid. Hayne, Crennan, Kiefel and Bell JJ: 82 [97] …The principal submission of the respondents, who alleged invalidity, was that the institutional integrity of the Supreme Court is impaired because the CO Act permits the Court to receive and act upon material which must not be disclosed to a respondent to an application for a declaration or to any representative of the respondent. … 87 [116]… The arguments that the CO 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. [117] 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 88 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. [118] 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. [119] Several observations must be made about this central proposition. First, it is absolute. Second, because it is absolute, it entrenches a particular form of adversarial procedure as a constitutionally required and defining characteristic of the State Supreme Courts. Third, 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. [120] Examination of this central proposition, which underpinned the argument for invalidity, will demonstrate that it cannot be adopted. … 102 [167] 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 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. 103 [168]… the CO Act does not in any way alter the duty of the Supreme Court to assess the cogency and veracity of the evidence that is tendered in an application for a declaration of an organisation as a criminal organisation. [2.690]

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Assistant Commissioner Condon v Pompano cont. [169] 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. Gageler J: 105 [177] My view, in short, is that Ch III of the Constitution mandates the observance of procedural fairness as an immutable characteristic of a Supreme Court and of every other court in Australia. Procedural fairness has a variable content but admits of no exceptions. A court cannot be required by statute to adopt a procedure that is unfair. A procedure is unfair if it has the capacity to result in the court making an order that finally alters or determines a right or legally protected interest of a person without affording that person a fair opportunity to respond to evidence on which that order might be made. [178] The criminal intelligence provisions of the COA have the potential to result – in some but not all cases – in the Supreme Court of Queensland making a declaration of a criminal organisation or a control order or other order without the organisation or individual affected being afforded a fair opportunity to respond to evidence on which the declaration or order might be made. The criminal intelligence provisions are not rendered compatible with the constitutional requirement for procedural fairness by the presence of the criminal organisation public interest monitor (“the COPIM”), nor by the ability of the Supreme Court of Queensland to determine the weight to be given to declared criminal intelligence, nor by the width of the discretion allowed to the Supreme Court of Queensland in making a declaration of a criminal organisation or a control order or other order under the COA. The criminal intelligence provisions are saved from incompatibility with Ch III of the Constitution only by the capacity for the Supreme Court of Queensland to stay a substantive application in the exercise of inherent jurisdiction in a case where practical unfairness becomes manifest. … 110 [194] There should be no doubt and no room for misunderstanding. Procedural fairness is an immutable characteristic of a court. No court in Australia can be required by statute to adopt an unfair procedure. If a procedure cannot be adopted without unfairness, then it cannot be required of a court… [195] Chapter III of the Constitution admits of legislative choice as to how, not whether, procedural fairness is provided in the exercise of a 111 jurisdiction invested in, or power conferred on, a court … 114 [208] One solution is suggested to lie in the presence of the COPIM. Analogies are sought to be drawn to the position of special advocates appointed under various statutory regimes. The extent to which those analogies are complete need not be explored. The COPIM does not act as an advocate for a respondent to a substantive application. The COPIM is not required to act in the interests of a respondent. The presence of the COPIM doubtless adds to the integrity of the process. But it cannot cure a want of procedural fairness. … 115 [212] … It is implicit in the acknowledgement by the Solicitor-General of Queensland that the use by the commissioner of declared criminal intelligence could in some circumstances amount to an abuse of process. The solution lies in the capacity of the Supreme Court of Queensland to stay a substantive application in the exercise of its inherent jurisdiction in any case in which practical unfairness to a respondent becomes manifest. The criminal intelligence provisions are saved from incompatibility with Ch III of the Constitution only by the preservation of that capacity.

180

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Notes&Questions

[2.700]

1. 2. 3.

CHAPTER 2

On what basis could earlier decisions which had invalidated State legislation be distinguished? How do the judgments treat the issue of procedural fairness and whether procedural fairness amounts to a constitutionally entrenched characteristic of a “court of a State”? For an earlier discussion of the interrelationship between inherent jurisdiction and Ch III: see W Lacey, “Inherent Jurisdiction, Judicial Power and Implied Guarantees Under Chapter III of the Constitution” (2003) 31 Federal Law Review 57.

Kuczborski v Queensland [2.710] Kuczborski v Queensland (2014) 254 CLR 51 [The case concerned a challenge by a member of the Hells Angels Motorcycle Club to the validity of a package of laws including the Vicious Lawless Association Disestablishment Act 2013 (Qld) and amendments to the Criminal Code (Qld), the Liquor Act 1992 (Qld) and the Bail Act 1980 (Qld). The Plaintiff was found to only have standing to challenge amendments to the Criminal Code (Qld) and the Liquor Act 1992 (Qld) but the High Court, by majority, rejected the submission that these amendments were in contravention of the principle set down in Kable v Director of Public Prosecution (NSW) (1996) 189 CLR 51. “Criminal Organisation” was defined in s 1 of the Criminal Code to mean: (a) an organisation of 3 or more persons– (i) who have as their purpose, or 1 of their purposes, engaging in, organising, planning, facilitating, supporting, or otherwise conspiring to engage in, serious criminal activity as defined under the Criminal Organisation Act 2009; and (ii) who, by their association, represent an unacceptable risk to the safety, welfare or order of the community; or (b) a criminal organisation under the Criminal Organisation Act 2009; or (c) an entity declared under a regulation to be a criminal organisation. French CJ: 71 [35] In addition to providing for enhanced penalties for existing offences against the Criminal Code, the Amendment Act [the Criminal Law (Criminal Organisations Disruption) Amendment Act 2013 (Qld)] has introduced new offence-creating provisions, ss 60A, 60B and 60C of the Code. The new provisions make it an offence for a person who is a participant in a criminal organisation [as defined] to: • be knowingly present in a public place with two or more other persons who are participants in a criminal organisation; • enter, or attempt to enter, a prescribed place; • attend, or attempt to attend, a prescribed event; or • recruit, or attempt to recruit, anyone to become a participant in a criminal organisation. It is an element of the offence in each case that the defendant “is a participant in a criminal organisation”. As with the aggravating circumstance provisions, it is a defence in each case to prove that “the criminal organisation is not an organisation that has, as 1 of its purposes, the purpose of engaging in, or conspiring to engage in, 72 criminal activity.” The term “criminal activity” is not defined. The Solicitor-General of Queensland accepted that it would cover any contravention of the law attracting a penalty. [36] Given that the plaintiff is a member of the Club, which is designated as a criminal organisation, the offence-creating provisions of the Criminal Code directly affect, inter alia, his freedom of movement and association. His claim for declaratory relief that the provisions are invalid invokes the jurisdiction of the Court under s 30(a) of the Judiciary Act. The matter is one on which it is properly conceded that the Court has jurisdiction and the plaintiff has standing. … [38]: The principles developed from and since the decision of this Court in Kable preclude State legislatures from enacting a law which would be repugnant to, or incompatible with, the institutional [2.710]

181

Part I: Introduction

Kuczborski v Queensland cont. integrity of State courts as elements of the national integrated judicial system. In particular applications of that proposition it has been held that State legislatures cannot: • effect an impermissible executive intrusion into the processes or decisions of a court; • authorise the Executive to enlist a court to implement decisions of the Executive in a manner incompatible with that court’s institutional integrity; or 73 • confer upon a court a function (judicial or otherwise) incompatible with the role of that court as a repository of federal jurisdiction. … there is no single comprehensive statement of the content to be given to the essential notion of repugnancy to, or incompatibility with, the institutional integrity of State courts. … [40] It is the function of a court in determining rights and liabilities arising under Acts of Parliament, including criminal statutes, to interpret the legislation and to apply it to the facts of the case as found on the basis of the evidence before the court. In applying an Act of Parliament, a court will give effect to a law which reflects a policy which, at the time of enactment, was in all likelihood a policy propounded to the Parliament by the Executive Government. In so doing, a court is not enlisted by and does not act at the direction of the Executive. So much was accepted by senior counsel for the plaintiff. In the application of delegated legislation, which may reflect a current policy of the Executive Government, the same is true. Contrary to the plaintiff’s submissions in reply, the declaration of a criminal organisation by regulation does not amount to an impermissible 74 direction to the courts to do anything. It creates a factum, in relation to an entity, which has consequences provided by law. The declaration of criminal organisations by regulation in this case does not give rise to the difficulty considered by the Court in South Australia v Totani (2010) 242 CLR 1, where a declaration of a criminal organisation mandated, upon application by the Commissioner of Police, a judicial control order against a member of such an organisation, which amounted to little more than rubber stamping an executive determination without any substantive judicial function. [41] If the Parliament, or the Executive Government acting pursuant to statutory authority, designates an organisation as a criminal organisation, membership of which attracts penalties or disabilities in certain circumstances, it does not thereby intrude impermissibly into the judicial function. The determination of whether a person is a member of a criminal organisation and whether circumstances attracting a penalty or disability are established is left to the courts. So too, when raised as a defence, is the question whether the organisation in fact has as one of its purposes the purpose of engaging in, or conspiring to engage in, criminal activity. [42] There is a distinct question arising from the juxtaposition of three different bases for establishing that an entity is a criminal organisation in a prosecution for an offence against ss 60A, 60B or 60C of the Criminal Code. The first basis, that set out in par (a) of the definition, would require a determination by the trial court, in a prosecution for an offence against ss 60A, 60B or 60C, of whether the entity said to be a criminal organisation had the characteristics set out in par (a). Such a finding, as Hayne J points out in his Honour’s Reasons, would preclude the defence that the entity “is not an organisation that has, as 1 of its purposes, the purpose of engaging in, or conspiring to engage in, criminal activity.” [43] To establish that an entity is a criminal organisation within the meaning of par (b) of the definition, it would suffice for the prosecution to prove that a declaration to that effect was made by the Supreme Court of Queensland under the Criminal Organisation Act 2009 (Qld) (CO Act). Proof of such a declaration made in earlier and different proceedings in the Supreme Court and not involving the accused would not prove anything more than the fact of the declaration. The consequence of proving the declaration is the legal characterisation of the relevant entity. Proof of the declaration would not preclude the accused, as a matter of law, 75 from establishing the defence in proceedings under ss 60A or 60B (the definition in par (b) not being applicable to s 60C). [44] If the prosecution in a charge of an offence against ss 60A, 60B or 60C were to rely upon par (c) of the definition of “criminal organisation”, it would have to do no more to establish the characterisation of the relevant entity than produce a regulation declaring the entity to be a criminal organisation. As 182

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Kuczborski v Queensland cont. with the proof of a declaration under the CO Act, evidence of the declaration by regulation would prove no more than the fact of the declaration and attract the legal characterisation of the relevant entity as a “criminal organisation”. It would be open to the accused person to establish the defence. [45] If by hypothesis the definition of “criminal organisation” in s 1 of the Criminal Code were limited to that set out in par (c), it could not be said that the offence-creating provisions, requiring the existence of a criminal organisation as so defined, involved any impermissible intrusion by the Executive upon the judicial function or an enlistment of the court to do the bidding of the Executive, nor that it conferred upon the court a function that was incompatible with its institutional integrity. Nor could it be said, more generally, that the definition of “criminal organisation” in par (c), taken by itself, would, by reason of the function that it conferred upon the court or otherwise, be repugnant to or incompatible with the institutional integrity of the court. The juxtaposition of the definitions in pars (a), (b) and (c) does not alter that consequence. The common classification of entities as “criminal organisations” according to three different processes, one directly judicial, one indirectly judicial and one executive, is, in the end, a matter of labelling. They could have been designated respectively as “a criminal organisation”, “a declared criminal organisation” and “a listed criminal organisation”, each characterisation attracting the same proscriptions, set out in ss 60A, 60B and 60C, for participants in such entities. [46] The existence of alternative pathways to conviction, one of them based upon a factum determined by declaration under a regulation, does not impermissibly entangle judicial functions with those of the Executive Government. Although the nomenclature of “criminal organisation” and the outcomes are the same, the pathways are distinct and do not have any legally operative effect upon each other. [47] The plaintiff’s challenge to the validity of ss 60A, 60B and 60C of the Criminal Code must fail. The Liquor Act 76 [48] Sections 173EB, 173EC and 173ED combine to prevent persons being on licensed premises while wearing or carrying an item of clothing or jewellery or an accessory that displays the name, club patch, insignia or logo of a declared criminal organisation. The prohibition extends to persons carrying an item of clothing or jewellery or an accessory displaying any image, symbol, abbreviation, acronym or other form of writing that indicates membership of, or an association with, a declared criminal organisation. The term “declared criminal organisation” is defined in s 173EA by reference to par (c) of the definition of “criminal organisation” in the Criminal Code. [49] The plaintiff, having failed in his challenge to the validity of ss 60A, 60B and 60C on Kable grounds, cannot succeed on such grounds in relation to the amendments to the Liquor Act. The declaration of an entity as a criminal organisation under par (c) enlivens the prohibitions in relation to the circumstances in which its name, logo or other insignia may be worn or carried in licensed premises. There is nothing in the construction of the definition of the offences created by the amendments to the Liquor Act that involves executive direction to, or enlistment of, the courts to implement decisions of the Executive Government in a manner incompatible with the courts’ institutional integrity. In hearing and determining a prosecution for an offence against any of the impugned provisions of the Liquor Act, courts are not undertaking any function incompatible with their role as repositories of federal jurisdiction. The challenge to the validity of the impugned provisions of the Liquor Act fails. Crennan, Kiefel, Gageler and Keane JJ [found that the provisions did not constitute a departure from the judicial function, “cloak the work of the legislature or executive in the neutral colours of judicial action” (119 [229]) or amount to a legislative or executive usurpation of the judicial role. Their Honours found that (120 [235]) They continued]: The only legal effect of a declaration is to establish an ingredient of an offence, the contravention of which must still be proved in the ordinary way. The argument for the plaintiff confuses the exercise of judicial power with the power of the legislature to impose norms of conduct and to provide for the consequences of breach of those norms…121 [237] The mere circumstance that the stipulated contingency may be established by the opinion of the legislature or executive does not mean that the stipulation is an exercise of judicial power [2.710]

183

Part I: Introduction

Kuczborski v Queensland cont. [Further, their Honours concluded that there was a defence if a person could establish that the organisation lacked the intention of engaging in criminal activity. In reference to the Liquor Act, their Honours distinguished the case of South Australia v Totani (2010) 242 CLR 1 and concluded that 124 [254] “The Kable principle is not a limitation on the competence of a State legislature to make laws of general application to determine what acts or omissions give rise to criminal responsibility”.] Bell J’s [judgment was broadly consistent in rejecting the applicability of the Kable principle with her Honour noting that a] 139 [303] “[l]egislative declaration of a state of affairs forming an element of liability does not, without more, amount to an impermissible direction to the court as to the content of its decision”. Hayne J [dissenting, stated 93 [115] the “vice in the provisions” was that a “legislative or regulatory determination of what is a criminal organisation” was “afforded the same legal significance as a judicial determination of that question”.] His Honour found that [116]: By treating these three different paths to establishing what is a criminal organisation as legally indistinguishable, the Executive and the legislature seek to have an untested and effectively untestable judgment made by the political branches of government treated as equivalent to a judgment made in judicial proceedings according to stated criteria and by reference only to admissible evidence received in proceedings conducted chiefly in public. For the courts to be required to treat a judgment by one or both of the political branches in that way assimilates a legislative or executive judgment with the judgment which the impugned provisions otherwise require the courts to make on the same issue according to ordinary judicial processes. To require the courts to treat the two radically different kinds of judgment as equivalent is repugnant to and incompatible with the institutional integrity of the courts.

[2.720]

Notes&Questions

1.

For a case with parallels with Fardon v Attorney-General (Qld) (2004) 223 CLR 575 which found that indeterminate detention for certain offenders convicted on sexual offences was not incompatible with the institutional integrity of the Supreme Court of Queensland: see Pollentine v Bleijie (2014) 253 CLR 629 (compare Attorney-General (Qld) v Lawrence [2013] QCA 364 where the Court of Appeal of Queensland found that the executive’s powers “undermine[d] the authority of orders of the Supreme Court” and were found to be “within that exceptional category of legislation which is invalid on the ground that it is repugnant to” the “institutional integrity of the Supreme Court” (at 39-40 [41]-[42]).

2.

In Kuczborski v Queensland (2014) 254 CLR 51 both French CJ (at 72-73 [38]) and Hayne J (at 90 [106], 91 [110]) recognised the importance of looking at the particular facts of each case before seeking to apply Kable in some predetermined form.

3.

It is said to not be enough to violate the Kable principle that a law is harsh in its operation (Kuczborski v Queensland (2014) 254 CLR 51, 113 [207], 116 [217] (Crennan, Kiefel, Gageler and Keane JJ). Or for that matter, “whether the judiciary approve or do not approve of the purpose of the laws” 119 [231] (Crennan, Kiefel, Gageler and Keane JJ). Why is that the case? Why is it the case that Hayne J stated in Kuczborski v Queensland (2014) 254 CLR 51, 89 [104] that “there can be no direct application to the States of all aspects of the doctrines that have been developed in relation to Chapter III”? (See also Assistant Commissioner Condon v Pompano Pty Ltd (2013) 252 CLR 38, 88-90 [123]-[125] (Hayne, Crennan, Kiefel and Bell JJ)). To what extent do you think that there is

4.

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“convergence” between the principles regulating State and Federal courts? (see S McLeish, “The Nationalisation of the State Court System” (2013) 24 Public Law Review 252; J Stellios, “The Centralisation of Judicial Power within the Australian Judicial System” (2014) 14 Federal Law Review 351).

[2.720]

185

PART II: THE EXECUTIVE POWER OF THE COMMONWEALTH

PARTII

Chapter 3: The Executive Power of the Commonwealth and the Executive Branch ................................................................ 189

CHAPTER 3 The Executive Power of the Commonwealth and the Executive Branch [3.10]

THE EXECUTIVE POWER OF THE COMMONWEALTH AND THE EXECUTIVE BRANCH .................................................................................................................... 190 [3.20]

Interpreting s 61 in context .................................................................... 192 [3.30]

[3.40]

Historical context and lingering influences: concepts of the Crown ................................................................................................ 197 [3.50]

[3.60]

Sue v Hill ..................................................................................... 198

Limits on executive power: taming the Crown’s powers .................... 201 [3.70] [3.100]

[3.110]

Plaintiff M68/2015 ...................................................................... 192

Bill of Rights 1688 ........................................................................ 201 ACCC v Baxter Healthcare ............................................................. 203

Executive powers defined by reference to prerogatives of the Crown attributable to the Commonwealth ....................................................... 207 [3.120] [3.140] [3.150]

Ruddock v Vadarlis ........................................................................ 209 Cadia Holdings v New South Wales ............................................... 223 CPCF v Minister for Immigration and Border Protection ................... 225

[3.160] EXECUTIVE ACCOUNTABILITY THROUGH THE PRINCIPLES OF RESPONSIBLE GOVERNMENT ......................................................................................................... 233 [3.160]

The principles of responsible government ............................................ 233 [3.170] [3.190]

[3.210]

Cabinet secrecy and responsible government ...................................... 244 [3.210]

[3.230] [3.240]

Lange v ABC ................................................................................. 234 Egan v Willis ................................................................................. 238 Commonwealth v Northern Land Council ....................................... 244

Responsible government and statutory corporations .......................... 249 Responsible government and intergovernmental co-operation in a federation ................................................................................................. 250

[3.260] PUBLIC MONEY, PUBLIC SPENDING AND THE NON-STATUTORY POWERS OF THE EXECUTIVE ................................................................................................................ 251 [3.280] [3.300]

[3.310]

Appropriations and federal limits on expenditure ................................ 256 [3.320]

[3.340]

Pape v Federal Commissioner of Taxation ....................................... 260

Non-statutory executive power (or capacity) to contract and spend ................................................................................................. 271 [3.370]

[3.390]

Victoria v Commonwealth (Australian Assistance Plan Case) ............ 257

Executive power linked to nationhood as a basis for expenditure ..... 260 [3.340]

[3.360]

Combet v Commonwealth ............................................................ 252 Combet v Commonwealth ............................................................ 254

Williams v Commonwealth ............................................................ 273

Non-statutory executive power to contract and spend – federal dimensions ............................................................................................... 300 [3.400] [3.420]

Williams v Commonwealth (No 2) ................................................. 301 Victoria v Construction, Forestry, Mining and Energy Union ............. 305 189

Part II: The Executive Power of the Commonwealth

[3.430] LAW-MAKING POWER DELEGATED TO THE EXECUTIVE ...................................... 307 [3.440]

Victorian Stevedoring & General Contracting Co v Dignan .............. 307

THE EXECUTIVE POWER OF THE COMMONWEALTH AND THE EXECUTIVE BRANCH [3.10] Section 61 of the Constitution, the first section in Ch II (The Executive Government),

parallels ss 1 and 71, the opening sections of Chs I (The Parliament) and III (The Judicature), in vesting one of the three branches of government power in a particular person or body, in this case vesting the executive power of the Commonwealth in the Queen: 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.

The constitutional text is sparse. It does not define the scope of the power that it vests or the manner in which it is to be exercised. The full import of s 61 must therefore be deduced from its context. The first element of that context is the text of the Constitution itself, including in particular, ss 2 and 62 to 65 (which are particularly relevant in identifying some of the institutions and actors that make up the executive branch). History, and especially pre-federation UK constitutional law and practice, forms another important part of that context. McHugh J said of the NSW Constitution Act 1855 in Egan v Willis (1998) 195 CLR 424 at [96] (further extracted at [3.190]), “[t]he Constitution … plainly assumed a body of constitutional and political practice which would give meaning to its very sparse provisions. And the contemporary materials make it clear that the Imperial authorities intended that the new Constitution would be administered in accordance with the principles of responsible government.” Under these principles, Parliament: provides the money required for administrative purposes by authorising taxation; it appropriates, with more or less particularity, the purposes to which the money so provided is to be applied; it criticises the mode in which money is spent and in which public affairs are administered; its support is indispensable to those who are responsible for administration; but it does not administer. That task is left to the executive, that is to say, to Ministers of the Crown, responsible to, but not appointed by, Parliament. It is this separation but interdependence of the criticising and controlling power on the one hand, and the executive power on the other, that constitutes the parliamentary system of government. (Emphasis added.) (Egan v Willis (1998) 195 CLR 424 [100], per McHugh J quoting Sir Courtenay Ilbert, then Clerk to the House of Commons, Preface to the first volume of Redlich’s The Procedure of the House of Commons (1908), vol 1, p vii.)

In Re Patterson; Ex Parte Taylor (2001) 207 CLR 391 at 402, Gleeson CJ wrote of the key provisions of Ch II of the Commonwealth Constitution: The above provisions [viz ss 61 to 65] contain, or reflect, in broad outline, some of the structural elements of the system of government provided for the body politic that was created in 1901. There was to be a constitutional monarchy. There was to be a separation of legislative, executive and judicial powers. The executive power of the Commonwealth was to be vested in the Queen, and exercisable by her representative, the Governor-General. The GovernorGeneral was to act upon the advice of a Federal Executive Council, chosen by the Governor-General and holding office during his or her pleasure. The Governor-General in Council was empowered to establish departments of State, and to appoint, from among the members of the Federal Executive Council, officers to administer such departments. They were to be the Queen’s Ministers of State for the Commonwealth. A Minister of State was to be either a senator or a member of the House of Representatives, and thus answerable in and to Parliament for matters relating to the administration of government. Parliament was empowered 190

[3.10]

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to make provision as to the number of Ministers of State at any one time, and also to prescribe the offices such Ministers should hold. In the absence of such parliamentary prescription it was to be for the Governor-General to direct which offices should be held by Ministers. Parliament, however, was to control the size of the Ministry.

Gleeson CJ (at 403) went on to explain that “[f]or the framers of the Constitution to have descended into greater specificity would have imposed an unnecessary and inappropriate degree of inflexibility upon constitutional arrangements that need to be capable of development and adaptability. The deliberate lack of specificity is demonstrated by the absence of any reference to such prominent features of our system of democratic government as the office of Prime Minister, or the Cabinet.” And, it might be added, it is demonstrated by the failure to elaborate the role of the Crown, the centerpiece of the UK constitution, in the Australian Constitution (see [3.40]ff). A second feature of the interpretive context, alongside the historical context, is the perception that the Constitution established a nation, which would ultimately become independent, provides important interpretive guidance. As French J said in Ruddock v Vadarlis (2001) 110 FCR 491 (extracted [3.120]), consideration of aspects of s 61 by analogy with UK constitutional principles may “properly acknowledge [their] historical antecedents but not adequately illuminate [their] origins in s 61 of the Constitution”. Finally, s 61 must be interpreted in the context both of federal principles and the separation of powers. (See also L Zines, “The Inherent Executive Power of the Commonwealth” (2005) 16 Public Law Review 279 at 279–282.) These multiple contexts run through the cases extracted in this Chapter. As will be seen, significant questions about the concept and contours of executive power under the Commonwealth Constitution remain unresolved. It is possible, however, to provide a partial taxonomy of the forms of executive power. Most actions of the Executive Branch can be anchored in one or more of the following sets of powers: 1. powers expressly conferred by the Constitution (such as the power to appoint judges conferred on the Governor-General in Council by s 72) and which are encompassed by s 61’s reference to powers extending to “the execution … of this Constitution”; 2. powers expressly conferred by statute and which are encompassed by s 61’s reference to powers extending to “the execution and maintenance … of the laws of the Commonwealth” (the limits of these powers and mechanisms for holding the executive accountable for their exercise are usually considered under the rubric of administrative law); 3. powers which, although not conferred directly by the Constitution or a statute, are necessary or incidental to the execution and maintenance of the Constitution or the law of the Commonwealth (the power to maintain the Constitution is sometimes seen as supporting a power to protect the Commonwealth and its institutions); and 4. powers necessary or incidental to the administration of a department of State established under s 64 of the Constitution. The most controversy attends three further sets of non-statutory executive powers which will be explored in detail in this chapter: 5. non-statutory powers defined by reference to the historical “prerogatives” of the Crown that are properly attributable to the Commonwealth (see [3.110]ff); 6. non-statutory powers arising out of the “capacities” of the Commonwealth as a polity, some of which may be analogous to the capacities of natural and legal persons and some of which are distinctively governmental (the controversial aspects of this set of powers, including the disputed scope of the power to make contracts, are examined in Williams v Commonwealth (2012) 248 CLR 156 extracted at [3.370]); and [3.10]

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7.

inherent authority derived from the character and status of the Commonwealth as the national government (sometimes referred to as “nationhood” powers, discussed in particular in Pape v Federal Commissioner of Taxation (2009) 238 CLR 1; [2009] HCA 23 see [3.340]ff). (This list is adapted and extended from Williams v Commonwealth (2012) 248 CLR 156 at [22] (French CJ). For analysis in the UK context, see A Perry, “The Crown’s Administrative Powers” (2015) 131 Law Quarterly Review 652.) Interpreting s 61 in context [3.20] Plaintiff M68/2015 v Minister for Immigration and Border Protection [2016] HCA 1;

(2016) 257 CLR 42 is considered in detail in [3.30], where the facts are fully set out. The case concerned the validity of arrangements under which the Commonwealth participated in the detention of asylum seekers at the Regional Processing Centre on Nauru. A majority of the Court held that the Commonwealth’s participation in that detention was authorised (retrospectively) by s 198AHA of the Migration Act. In particular, a majority held that s 198AHA did not contravene the principle in Chu Kheng Lim v Minister for Immigration, Local Government and Ethnic Affairs (1992) 176 CLR 1 at 27; [1992] HCA 64 in purporting to authorise the Commonwealth Executive to exercise the exclusively judicial function of punitive detention. It was therefore not necessary for the majority to consider whether the Commonwealth’s conduct was supported by non-statutory executive power. Only Gageler J and (in dissent) Gordon J did so. Gageler J’s judgment includes an extended account of the historical context in which Ch II of the Constitution was drafted and which it assumes; of the nature of executive power (including the distinction between prerogative and capacities); and of the limits on executive power. Each of these is developed in subsequent sections of this Chapter. (Gageler J’s judgment is further extracted at [3.155].)

Plaintiff M68/2015 [3.30] Plaintiff M68/2015 v Minister for Immigration and Border Protection [2016] HCA 1; (2016) 257 CLR 42 Gageler J: 90 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 91 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 192

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Plaintiff M68/2015 cont. 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 [Finn, Law and Government in Colonial Australia (1987) at 4 (footnote omitted)]: 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]: 92 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 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 [Sections 61 and 2 of the Constitution]. There was to be a Federal Executive Council “to advise the Governor-General in the government of the Commonwealth” [Section 62 of the Constitution], 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” [Section 64 of the Constitution]. [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 [Section 64 of the Constitution]. Until the Parliament otherwise provided, as the Parliament was specifically empowered to do under s 51(xxxvi), the Governor-General was to have power to appoint and remove “all other officers of the Executive Government of the Commonwealth” [Section 67 of the Constitution]. Transitional provision was made for the transfer to the Commonwealth of “departments of the public service in each State” [Section 69 of the Constitution]. 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 121 in the ongoing practical delivery of government services: “posts, telegraphs, and telephones”, and “lighthouses, lightships, beacons, and buoys” [Section 69 of the Constitution]. [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); Ex parte Defence Housing Authority (1997) 190 CLR 410 at 441; [1997] HCA 36 (footnote omitted)]. 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 [3.30]

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Plaintiff M68/2015 cont. 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 [Eg Davis v The Commonwealth (1988) 166 CLR 79 at 95, 111-112, 119; [1988] HCA 63], 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 at 202; [1990] HCA 7]: 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. [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. [Gageler J drew attention to ss 73 and 75 of the Constitution and the provision they made for suits against the Commonwealth and the control of the administration by judicial review of the actions of Commonwealth officers.] … [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 96 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 at 380, quoting Attorney-General (Vict) v The Commonwealth (1935) 52 CLR 533; [1935] HCA 31 at 566 (CLR)]. The nature of executive power [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 at 279, quoting Morgan, “The Separation of Powers in the Irish Constitution”, (1997) at 272]. 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]. 194

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Plaintiff M68/2015 cont. [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]. 97 [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; [1974] HCA 20 at 498 (CLR)]. 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 v The Commonwealth (1974) 131 CLR 477 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 at 108]. [133] In framing those categories of actions which the Executive Government is empowered to undertake in relation to subject-matters 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 v The Commonwealth (1988) 166 CLR 79 at 108, quoting Blackstone, Commentaries on the Laws of England, (1765), Bk 1, Ch 7 at 232. See also Clough v Leahy (1904) 2 CLR 139 at 156; [1904] HCA 38; Victoria v Australian Building Construction Employees’ and Builders Labourers’ Federation (1982) 152 CLR 25; [1982] HCA 31] at 155 (CLR). 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 v The Commonwealth (1988) 166 CLR 79 at 108, quoting Dicey, Introduction to the Study of the Law of the Constitution, 10th ed (1959) at 424] and thereby to encompass “[e]very act which the executive government can lawfully do without the authority of [an] Act of Parliament” [Dicey, Introduction to the Study of the Law of the Constitution, 10th ed (1959) at 425. Eg Johnson v Kent (1975) 132 CLR 164; [1975] HCA 4 at 169 (CLR)]. 98 [134] The tripartite categorisation posited by Brennan J has utility in highlighting, in relation to acts done in the exercise of a non-statutory 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” [Cf Heiner v Scott (1914) 19 CLR 381 at 393-394; [1914] HCA 82; In re K L Tractors Ltd (1961) 106 CLR 318; [1961] HCA 8 at 335 (CLR)]. 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); [3.30]

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Plaintiff M68/2015 cont. Ex parte Defence Housing Authority (1997) 190 CLR 410 at 439, quoting Federal Commissioner of Taxation v Official Liquidator of E O Farley Ltd (1940) 63 CLR 278; [1940] HCA 13 at 308 (CLR)]. 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 [Cf Cadia Holdings Pty Ltd v New South Wales (2010) 242 CLR 195; [2010] HCA 27 at 210 [30]-[32] (CLR)], 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 at 155-156]. [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; [1984] HCA 67 at 580 (CLR)] “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. The comments of Deane J are instructive [(1984) 156 CLR 532 at 593]: 99 The [officers’] trust in the Commonwealth and in those who approved the exercise or gave them their directions or instructions was completely misplaced. The “authority or consent necessary to make any act or thing lawful” was not obtained and, in the absence of special statutory provision, was probably not within the power of any person or combination of persons to grant. The “direction” to participate in the exercise, in the manner in which it was carried out, was a direction which the Commonwealth executive could not lawfully give. To the extent that the [officers] may themselves have been involved in criminal activities, the “Commonwealth exercise cards” which they were “instructed – to show” should they be questioned were completely ineffectual to establish legal justification. Limitations on executive power [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 non-statutory 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; [1922] HCA 62] in holding that the Executive Government of the Commonwealth lacked nonstatutory 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 100 common law principles bearing on the operation of responsible government [(1922) 31 CLR 421 at 437-439]. 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” [(1922) 31 CLR 421 at 440]. He held the agreements in question to be beyond Commonwealth executive power by reference to the “vitiating 196

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Plaintiff M68/2015 cont. cause” that they amounted in substance to a form of taxation forbidden to the Executive Government in the absence of parliamentary warrant [(1922) 31 CLR 421 at 433, 443-445, referring to Attorney-General v Wilts United Dairies Ltd (1921) 37 TLR 884; (1922) 38 TLR 781]. [141] The reasoning of Starke J was to similar effect. He said [(1922) 31 CLR 421 at 459-460]: 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” [(1922) 31 CLR 421 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 101 focussed on the capacity of the Executive Government of the Commonwealth to expend appropriated funds. [These cases, Pape v Federal Commissioner of Taxation (2009) 238 CLR 1; [2009] HCA 23, Williams v The Commonwealth (2012) 248 CLR 156; [2012] HCA 23 (“Williams [No 1]”) and Williams v The Commonwealth [No 2] (2014) 252 CLR 416; [2014] HCA 23 at 465 [68] (CLR), are considered later in this Chapter.] …

Historical context and lingering influences: concepts of “the Crown” [3.40] The concept of “the Crown” is central to the text of the Constitution and the “body of

constitutional and political practice” that it assumed. But the concept of “the Crown” is not straightforward – it is both complex and contested. It has resulted in a great deal of complexity and artificiality in UK and Imperial constitutional law (see, eg, F W Maitland, “The Crown as Corporation” (1901) 17 Law Quarterly Review 131), some of which spilled over into Australian constitutional law, despite the optimistic view of Dixon J in Bank of NSW v Commonwealth (Banking Case) (1948) 76 CLR 1 at 363: The Constitution sweeps aside the difficulties which might be thought to arise in a federation from the traditional distinction between, on the one hand the position of the Sovereign as the representative of the State in a monarchy, and the other hand the State as a legal person in other forms of government … and goes directly to the conceptions of ordinary life. From beginning to end [the Constitution] treats the Commonwealth and the States as organisations or institutions of government possessing distinct individualities. Formally they may not be juristic persons, but they are conceived as politically organised bodies having mutual legal relations and amenable to the jurisdiction of courts upon which the responsibility of enforcing the Constitution rests.

Sue v Hill (1999) 199 CLR 462 (see [3.50]ff) and Williams v Commonwealth (2012) 248 CLR 156 (see [3.370]ff) start to clarify the multiple senses of “the Crown” and its relationship to the Executive branch of the Commonwealth. (For contemporary analysis of the Crown in the Australian constitutional context, see C Saunders, “The Concept of the Crown” (2015) 38 Melbourne University Law Review 873). [3.40]

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Sue v Hill [3.50] Sue v Hill (1999) 199 CLR 462 at 497–503, 525–526 [Sue petitioned the High Court, in its capacity as the Court of Disputed Returns under the Commonwealth Electoral Act 1918 (Cth), for an order that Hill was ineligible to be chosen as a member of the Senate. It was argued that at the time of her nomination Hill was a subject or citizen of a foreign power, namely the United Kingdom, and therefore s 44(i) of the Constitution operated to render her ineligible. The High Court therefore considered whether, at that time, the United Kingdom was properly considered “a foreign power”.] Gleeson CJ, Gummow and Hayne JJ: The meaning of “the Crown” in constitutional theory 497 … [83] … it 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 which is “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 [Chitty, Prerogatives of the Crown (1820), Ch XI, Section III]. The writings of constitutional lawyers at the time show that it was well understood in 1900, at the time of the adoption of the Constitution, 498 that the term “the Crown” was used in several metaphorical senses. “We all know”, Lord Penzance had said in 1876, “that the Crown is an abstraction” [Dixon v London Small Arms Co (1876) 1 App Cas 632 at 652], and Maitland, Harrison Moore, Inglis Clark and Pitt Cobbett, amongst many distinguished constitutional lawyers, took up the point. [84] The first use of the expression “the Crown” was to identify the body politic. Writing in 1903, Professor Pitt Cobbett [“The Crown as Representing the State”, Commonwealth Law Review, vol 1 (1903) 23, at p 30. See also Hogg, Liability of the Crown (2nd ed, 1989), pp 9-13; Law Reform Commission of Canada, The Legal Status of the Federal Administration, Working Paper 40 (1985), pp 24-28] 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. After considering earlier usages of the term in England and in the former American colonies, Maitland rejoiced in the return of the term “the Commonwealth” to the statute book. He wrote in 1901 [“The Crown as Corporation” (1901) 17 Law Quarterly Review 131 at 144 (footnote omitted)]: There is no cause for despair when “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”. We may miss the old words that were used of Connecticut and Rhode Island: “one body corporate and politic in fact and name”; but “united in a Federal Commonwealth under the name of the Commonwealth of Australia” seems amply to fill their place. And a body politic may be a member of another body politic. [85] 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 [1986 (Cth)]. Differing views have been expressed as to the identification of that date [Victoria v Commonwealth (Industrial Relations Act Case) (1996) 187 CLR 416 at 477–478] but nothing turns upon the question for present purposes. 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 499 before [Inglis Clark, Studies in Australian Constitutional Law (1901), pp 65-66] 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 198

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Sue v Hill cont. 1988; see Starke, “Another Residual Constitutional Link with the United Kingdom Terminated; Diplomatic Letters of Credence Now Signed by Governor-General” (1989) 63 Australian Law Journal 149] [86] In State Authorities Superannuation Board v Commissioner of State Taxation (WA) [(1996) 189 CLR 253 at 289], McHugh and Gummow JJ said: Questions of foreign state immunity and of whether an Australian law, upon its true construction, purports to bind a foreign state now should be approached no differently as regards those foreign states which share the same head of state than it is for those foreign states which do not. [See, generally, Foreign States Immunities Act 1985 (Cth), ss 9 – 22.] This is consistent with the reasoning and outcome in Nolan v Minister for Immigration and Ethnic Affairs (1988) 165 CLR 178 at 183–186. [87] Thirdly, the term “the Crown” identifies what Lord Penzance in Dixon called “the Government” [Dixon (1876) 1 App Cas 632 at 651], being the executive as distinct from the legislative branch of government, represented by the Ministry and the administrative bureaucracy which attends to its business. As has been indicated, under the Constitution the executive functions bestowed upon “the Queen” are exercised upon Australian advice. [88] The fourth use of the term “the Crown” arose during the course of colonial development in the 19th century. It identified the paramount powers of the United Kingdom, the parent state, in relation to its dependencies. At the time of the establishment of the Commonwealth, the matter was explained as follows by Professor Pitt Cobbett in a passage which, given the arguments presented in the present matters, merits full repetition [“The Crown as Representing the State” (1904) 1 Commonwealth Law Review 145 at 146–147]: In England the prerogative powers of the Crown were at one time 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 500 the Prerogative really represent, not any personal powers on the part of the Sovereign, but those paramount powers which would naturally belong to a parent State in relation to the government of 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, subsequently referred to, between the “general” prerogative of the Crown, which is still wielded by Ministers who represent the British State, and who are 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 on some few points where the Governor [Who, legally [represented] the King, but really [represented] the British “State”] is still required to act not as a local constitutional Sovereign but as an imperial officer and subject to an immediate responsibility to his imperial masters [As with regard to the reservation of Bills and the exercise of the power of pardon in matters affecting imperial interests]. … [90] The expression “the Crown in right of …” the government in question was used to identify these newly created and evolving political units [Evatt, The Royal Prerogative (1987), p 63]. 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 of the Crown” as something “not persisted in to the extent of ignoring that the several parts of the Empire are distinct entities”. [“The Crown as Corporation” (1904) 20 Law Quarterly Review 351 at 358. See also Harrison Moore, “Law and Government” (1906) 3 Commonwealth Law Review 205 at 207] He pointed to the “inconvenience and mischief” which would follow from [3.50]

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Sue v Hill cont. 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]: The Constitutions themselves speak plainly enough on the subject. Both the British North America Act and the Commonwealth of Australia Constitution Act recognise 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 – this in fact is the phase of their personality with which the Constitutions are principally concerned. Parliament has unquestionably treated these entities as distinct persons, and it is only by going behind the Constitution that any confusion of personalities arises. [91] It may be thought that in this passage lies the seed of the doctrine later propounded by Dixon J in Bank of New South Wales v Commonwealth [(1948) 76 CLR 1 at 363], and applied in authorities including Crouch v Commissioner for Railways (Q) [(1985) 159 CLR 22 at 28–29, 39] and Deputy Commissioner of Taxation v State Bank (NSW) [(1992) 174 CLR 219 at 230–231], that the Constitution treats the Commonwealth and the States as organisations or institutions of government possessing distinct individuality. Whilst formally they may not be juristic persons, they are conceived as politically organised bodies having mutual legal relations and are amenable to the 502 jurisdiction of courts exercising federal jurisdiction. The employment 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 [Minister for Works (WA) v Gulson (1944) 69 CLR 338 at 350–351] as involving “verbally impressive mysticism”. It is of no assistance in determining today whether, for the purposes of the present litigation, the United Kingdom is a “foreign power” within the meaning of s 44(i) of the Constitution. [92] 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” [“The Crown as Corporation” (1904) 20 Law Quarterly Review 351 at 362]. Such optimism has proved misplaced. That difficulties can arise from continued use of the term “the Crown” in State legislation is illustrated by Commonwealth v Western Australia (1999) 196 CLR 392 at 410–411, 421, 429–436, 467–471. However, no such difficulties need arise in the construction of the Constitution. [93] 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, to which we have referred, 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 1902 would be to deny the extension of the United Kingdom law to the Commonwealth, the States and the Territories. … Conclusions 503 [95] Almost a century has passed since the enactment of the Constitution Act in the last year of the reign of Queen Victoria. In 1922, the Lord Chancellor [Viscount Birkenhead LC in Viscountess Rhondda’s Claim [1922] 2 AC 339 at 353] observed that doctrines respecting the Crown often represented the results of a constitutional struggle in past centuries, rather than statements of a legal doctrine. The state of affairs identified in … these reasons is to the contrary. It is, as Gibbs J put it [Southern Centre of Theosophy Inc v South Australia (1979) 145 CLR 246 at 261], “the result of an orderly development – not … the result of a revolution”. Further, the development culminating in the enactment of the Australia Act (the operation of which commenced on 3 March 1986) [Commonwealth of Australia Gazette, S85, 2 March 1986, p 1] has followed paths understood by constitutional scholars writing at the time of the establishment of the Commonwealth. [96] The point of immediate significance is that the circumstance that the same monarch exercises regal functions under the constitutional arrangements in the United Kingdom and Australia does not 200

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Sue v Hill cont. deny the proposition that the United Kingdom is a foreign power within the meaning of s 44(i) of the Constitution. Australia and the United Kingdom have their own laws as to nationality [Nolan v Minister for Immigration and Ethnic Affairs (1988) 165 CLR 178] so that their citizens owe different allegiances. The United Kingdom has a distinct legal personality and its exercises of sovereignty, for example in entering military alliances, participating in armed conflicts and acceding to treaties such as the Treaty of Rome … themselves have no legal consequences for this country. Nor, as we have sought to demonstrate … does the United Kingdom exercise any function with respect to the governmental structures of the Commonwealth or the States. [97] As indicated earlier in these reasons, we would give an affirmative answer to the question in each stated case which asks whether Mrs Hill, at the date of her nomination, was a subject or citizen of a foreign power within the meaning of s 44(i) of the Constitution. [Gaudron J commented briefly on the divisibility of the Crown, which she regarded as “implicit in the existence of the States as separate bodies politic with separate legal personality, distinct from the body politic of the Commonwealth with its own legal personality”. McHugh, Kirby and Callinan JJ did not need to consider issues relating to the Crown or independence more generally because of their conclusion that the High Court lacked jurisdiction to hear the petition.]

Limits on executive power: taming “the Crown’s” powers [3.60] On some accounts, the history of executive power in the England (and then the UK)

since at least the 17th century has been one in which the arbitrary personal powers of the Monarch were constitutionalised, moderated and republicanised – that is, recognised as being defined by and subject to law, in fact being limited by laws and brought within the purview of representative institutions (see generally H C Mansfield, Taming the Prince: The Ambivalence of Modern Executive Power (The Free Press, New York, 1989)). The Bill of Rights 1688 was an important milestone in the progress from monarchical absolutism to democratic governance under the rule of law. Most of the principles that it sets out are either entrenched in the Constitution or (as in the case of the dispensing power) recognised as assumptions on which the Constitution is founded.

Bill of Rights 1688 [3.70] Bill of Rights 1688 (1 Will and Mar Sess 2, c 2) … The Subject’s Rights. And thereupon the said Lords Spirituall and Temporall and Commons pursuant to their respective Letters and Elections being now assembled in a full and free Representative of this Nation takeing into their most serious Consideration the best meanes for attaining the Ends aforesaid Doe in the first place (as their Auncestors in like Case have usually done) for the Vindicating and Asserting their auntient Rights and Liberties, Declare Dispensing Power. That the pretended Power of Suspending of Laws or the Execution of Laws by Regall Authority without Consent of Parlyament is illegall. Late dispensing Power. That the pretended Power of Dispensing with Laws or the Execution of Laws by Regall Authoritie as it hath beene assumed and exercised of late is illegall. Ecclesiastical Courts illegal. That the Commission for erecting the late Court of Commissioners for Ecclesiasticall Causes and all other Commissions and Courts of like nature are Illegall and Pernicious. Levying Money. That levying Money for or to the Use of the Crowne by pretence of Prerogative without Grant of Parlyament for longer time or in other manner then the same is or shall be granted is Illegall. Right to petition. That it is the Right of the Subjects to petition the King and all Commitments and Prosecutions for such Petitioning are Illegall. [3.70]

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Bill of Rights 1688 cont. Standing Army. That the raising or keeping a standing Army within the Kingdome in time of Peace unlesse it be with Consent of Parlyament is against Law. Subjects’ Arms. That the Subjects which are Protestants may have Arms for their Defence suitable to their Conditions and as allowed by Law. Freedom of Election. That Election of Members of Parlyament ought to be free. Freedom of Speech. That the Freedome of Speech and Debates or Proceedings in Parlyament ought not to be impeached or questioned in any Court or Place out of Parlyament. Excessive Bail. That excessive Baile ought not to be required nor excessive Fines imposed nor cruell and unusuall Punishments inflicted. Juries. That Jurors ought to be duely impannelled and returned. Grants of Forfeitures. That all Grants and Promises of Fines and Forfeitures of particular persons before Conviction are illegall and void. Frequent Parliaments. And that for Redresse of all Grievances and for the amending strengthening and preserveing of the Lawes Parlyaments ought to be held frequently.

Notes&Questions

[3.80]

1.

2.

Gageler J notes some of the Australian manifestations of these principles in Plaintiff M68/2015 v Minister for Immigration and Border Protection [2016] HCA 1; (2016) 257 CLR 42, extracted above [3.20]ff. See also the Constitution, ss 6, 81, 83. In A v Hayden (1984) 156 CLR 532, Brennan J wrote (at 580): The incapacity of the executive government to dispense its servants from obedience to laws made by Parliament is the cornerstone of a parliamentary democracy. A prerogative to dispense from the laws was exercised by mediaeval kings, but it was a prerogative “replete with absurdity, and might be converted to the most dangerous purposes” [Chitty, Prerogatives of the Crown (1820), p 95]. James II was the last King to exercise the prerogative dispensing power [See Holdsworth, A History of English Law, vol vi, pp 217-225], and the reaction to his doing so found expression in the Declaration of Right. It was there declared 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”. By the Bill of Rights the power to dispense from any statute was abolished [1 Will & Mary 2 c 2, s XII]. Whatever vestige of the dispensing power then remained, it is no more. The principle, as expressed in the Act of Settlement, is that all officers and ministers ought to serve the Crown according to the laws. It is expressed more appropriately for the present case by Griffith CJ in Clough v Leahy [(1904) 2 CLR 139 at 155–156]: “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.”

3.

For further discussion of the historical development of democratic governance under the rule of law in the UK context, see P Leyland, Constitution of the United Kingdom: A Contextual Analysis (2nd ed, Hart Publishing, Oxford, 2012); A Tomkins, Our Republican Constitution (Hart Publishing, Oxford, 2005).

[3.90] For more than a century, legislation has conferred extensive powers of administration

on the executive government. But legislation plays another important role – in restricting the powers of the executive government. Even before the 17th century it was clear that the Executive could be bound by statute. That proposition is axiomatic under the Commonwealth Constitution. (However, there are complicated issues when the question is whether the State executive can be bound by Commonwealth statutes and vice versa: see Re Residential 202

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Tenancies Tribunal of NSW v Henderson; Ex parte Defence Housing Authority (1997) 190 CLR 410). The historical link between the executive branch of government and the Crown, and the confusion between the Crown in the sense of the Monarch (who, legal theory insisted, could do no wrong) and the Crown in the sense of the State (which could be bound by statute), led to the development of a principle that the Crown was presumed not to be bound by statute unless the statute expressly identified the Crown bound by its terms or there was a necessary implication, apparent from the terms of the statute, that it was intended that the Crown be bound. The presumption was weakened but not overturned in Bropho v Western Australia (1990) 171 CLR 1. Even in its modern Australian form, the presumption perpetuates the link between the Crown and the executive government and still causes difficult interpretive issues.

ACCC v Baxter Healthcare [3.100] Australian Competition and Consumer Commission v Baxter Healthcare Pty Ltd (2007) 232 CLR 1 at 1, 26–28, 37, 45–50, 53 [Baxter Healthcare manufactured medical products. Between 1998 and 2001, it entered into contracts for the provision of these products to public hospitals with the State Purchasing Authorities (“SPA”) of five States and Territories. The SPAs were part of the executive government of the respective States or Territory. Sections 46 and 47 of the Trade Practices Act 1974 (Cth) prohibited misuse of market power and exclusive dealing by corporations. The ACCC brought an action in the Federal Court against Baxter claiming its conduct in relation to the SPAs contravened these sections.] Gleeson CJ, Gummow, Hayne, Heydon and Crennan JJ: [1] 1 The issues in this appeal are whether, upon the true construction of the Trade Practices Act 1974 (Cth) (“the Act”), ss 46 and 47 of the Act apply to conduct of a trading corporation in, or in connection with, negotiations for, entry into, or performance of, a contract with a State or Territory government where the government’s conduct is not in the course of carrying on a business, and, if so, what remedies are available in a case of contravention. Sections 46 and 47 bind the Crown in right of a State or Territory so far as the Crown carries on a business, either directly or by a government authority (s 2B). Yet it is argued that when a corporation, in the course of carrying on its business, negotiates for, enters into, or performs a contract with a State or Territory government which is not itself carrying on a business, ss 46 and 47 do not apply to the corporation. That is said to be a form of derivative immunity, recognised and applied by this Court in 1979 in Bradken Consolidated Ltd v Broken Hill Proprietary Co Ltd (1979) 145 CLR 107. This argument was accepted by Allsop J at first instance in the Federal Court of Australia …, and by the Full Court of the Federal Court …. The appellant appeals against the decision of the Full Court. [38] 26 The reasons why ss 46 and 47 did not apply to any conduct of the second, third and fourth respondents may be stated briefly. It was held by this Court in Bradken [(1979) 145 CLR 107] that the Act, as it stood in 1978, did not bind the Crown in right of a State. The principle applied in Bradken was expressed by Gibbs A-CJ as follows [(1979) 145 CLR 107 at 116 (references omitted)]: It is an established rule of construction that no statute binds the Crown unless the Crown is expressly named therein or unless there is a necessary implication that it was intended to be bound; there will be such a necessary implication if it is manifest from the very terms of the statute that it was the intention of the legislature that the Crown should be bound. [39] That principle of construction was reconsidered, and modified, by this Court in 1990 in Bropho v Western Australia (1990) 171 CLR 1. After pointing out that, in this context, “the Crown” signifies not only the Sovereign but also the executive government, its employees and agents, Mason CJ, Deane, Dawson, Toohey, Gaudron and McHugh JJ said [(1990) 171 CLR 1 at 18–19]: 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 27 statute”. The basis of an assumption to that effect lay in a mixture of considerations: regard for the dignity and majesty of the Crown; concern to [3.100]

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ACCC v Baxter Healthcare cont. ensure that any proposed statutory derogation from the authority of the Crown was made plain in the 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 covered by the shield of the Crown. [40] Their Honours emphasised that what was involved was a general principle of statutory construction, not some prerogative power of the Crown to override a statute, or dispense with compliance [(1990) 171 CLR 1 at 15]. This is of some present importance, because some of the arguments for the respondents about derivative immunity had about them a flavour of assertion of executive prerogative. [41] The Court in Bropho concluded that the inflexible rule as formulated, for example, in Bradken, should give way to a more flexible approach to construction that took account of the nature of the statutory provisions in question and the activities of government to which they might apply. Making the Commonwealth or a State liable to prosecution might be one thing. Subjecting the employees of a governmental corporation to general requirements enacted for the public benefit might be another. The joint reasons said [(1990) 171 CLR 1 at 23–24]: Implicit in that is acceptance of the propositions that, notwithstanding the absence of express 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. (Emphasis added.) [42] 28 Brennan J agreed with the joint judgment, saying [(1990) 171 CLR 1 at 28]: [T]he presumption cannot be put any higher than this: that the Crown is not bound by statute unless a contrary intention can be discerned from all the relevant circumstances. As the Court must determine whether the legislature intended (or would have intended had the question been addressed) that the statute should affect the activities of the Executive Government, the circumstances which properly relate to that question must be considered. Those circumstances include the terms of the statute, its subject matter, the nature of the mischief to be redressed, the general purpose and effect of the statute, and the nature of the activities of the Executive Government which would be affected if the Crown is bound. [68] 37 Underlying [the SPA’s] argument is the idea that the Act operated so as not to enact any law that would circumscribe the freedom of the Crown in right of a State or Territory to make any kind of contract it wished, and, furthermore, that the Act preserved the Crown’s freedom in that respect, by providing that corporations dealing or negotiating with the Crown should be free to propose and make any kind of contract, unfettered by any constraint under the Act. These ideas cannot be supported by reference to any established principle of statutory construction, and they are impossible to reconcile with the purpose and subject matter of the Act. It is one thing to read the Act so as not to divest the Crown of legal rights. It is another thing altogether to read the Act as giving an executive government (as distinct from a Parliament …) including all its servants and agents, a freedom not enjoyed when the government itself is carrying on business, from any impact of laws enacted for the promotion of competition and fair trading in the public interest. And it is even more unlikely that that 204

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ACCC v Baxter Healthcare cont. freedom extends to all persons dealing with that executive government. [Their Honours therefore concluded that sections 46 and 47 applied to Baxter’s conduct and remedies could be awarded against it.] Kirby J: [91] 45 The constitutional text: … [T]here is a fundamental difficulty involved in an analysis of the issues in this appeal in treating the Australian Commonwealth, States and Territories as manifestations of the Crown for the purpose of attracting to them, unrevised and unadjusted to local circumstances, all of the immunities, privileges and prerogatives of the Crown, as traditionally enjoyed in ancient times and as expressed in previous common law doctrine. Such an approach is, in my view, incompatible with the text, structure and character of the Australian Constitution. [92] 46 The Australian constitutional text makes it clear that certain new constitutional entities are thereby created. They are “the Commonwealth” which is thereby “established” [Commonwealth of Australia Constitution Act 1900 (IMP) (63 & 64 Vict c 12), s 4. See also Commonwealth of Australia Constitution Act 1900 (IMP) s 3]; the “States” (being the former named “colonies” of the Crown such as are admitted into or established by the Commonwealth as States [Commonwealth of Australia Constitution Act 1900 (IMP), s 6. See also Constitution, Chs V and VI]) and the Territories of the Commonwealth [Constitution, ss 122, 125]. [93] It is plain from the constitutional text, purpose and history that the new polities are not merely a continuation of pre-existing colonies under a different appellation. This would be an impossible notion in the case of the Commonwealth and the Territories of the Commonwealth, which had no earlier existence, as such. But it is equally impossible in the case of the States for, after federation, they existed as new governmental entities deriving their legal character and status from the Constitution itself, not from the pre-federation colonies which were thereby terminated. [94] Under the Constitution, the polities created were related to each other as integral parts of a new Commonwealth, a distinct and “indissoluble” federal entity [Commonwealth of Australia Constitution Act 1900 (Imp), Preamble, para 1]. Moreover, they constituted a new nation in the community of nations. This new nation was brought into existence by the will of the people in the several colonies named and those of any other identified Australasian colonies that might thereafter be admitted into the Commonwealth [As happened in the case of Western Australia before proclamation of the Constitution]. [95] Although in colonial times in Australia, it was understandable that the colonial governments should have been treated for legal purposes as “manifestations of the Crown”, with governmental “powers and functions … vested in the Governor of a Colony” representing the Crown, or in “the Governor of a Colony with the advice of his Executive Council, or in any authority of a Colony” [Constitution, s 70], once the Commonwealth was established the new political entities then created were not properly so described or characterised. They derived their existence from the Constitution itself. They were thus constitutional entities and not a manifestation of anything else. [96] In effect, the Commonwealth, the States and the Territories therefore stand apart from the pre-existing governments in Australia, although they relate to each other. They are not, as such, manifestations of the Crown. It is a misdescription to so designate them or to equate them as such. [97] 47 In the early years of Australian federation, as the notion of the indivisibility of the Crown throughout the British Empire persisted for some time, it was understandable that the Commonwealth, States and Territories should continue to be described as manifestations of the Crown. However, in terms of the constitutional text and basic legal principle, this description was erroneous. Persisting with it into the twenty-first century is unacceptable. It is past time that it should be replaced with a new governmental characterisation of the Australian governmental polities – one appropriate to the Constitution and the independent nation and component polities that the Constitution brought into existence. [98] Specific textual references: The fact that the Commonwealth and the Territories, at least, are plainly not subsumed in the Crown may be demonstrated by the distinction drawn in the Constitution between those polities, as such, and the various specific ways in which the Crown and the Queen are involved in Australia’s post-federation constitutional arrangements. [3.100]

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ACCC v Baxter Healthcare cont. [99] Thus, the Queen is part of the Federal Parliament created by the Constitution as the Parliament of the Commonwealth [Constitution, s 1]. The executive power of the Commonwealth is vested in the Queen [Constitution, s 61]. Yet neither the Parliament nor the Executive of the Commonwealth is the Commonwealth itself. The constitutional polity is distinct and separate from the constituent parts that the Queen and the Crown play in its affairs. [100] This is even more clear in the case of the Judicature created by Ch III [Constitution, ss 71, 73, 74, 75, 78, 79]. In Commonwealth v Mewett [(1997) 191 CLR 471 at 546], Gummow J and I endorsed the observation of Murphy J in Johnstone v Commonwealth [(1979) 143 CLR 398 at 406]: In Australia, the federal courts are not the Sovereign’s courts in the sense used in the United Kingdom. Under the Commonwealth Constitution, the legislative power of the Commonwealth is expressed to be vested in the Queen, the Senate and the House of Representatives (s 1); and the executive power is vested in the Queen (s 61). However, the judicial power is not vested in the Queen, but 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” (s 71). [101] 48 In these circumstances, as Gummow J and I went on to explain in Mewett [(1997) 191 CLR 471 at 547], the acceptance in Australia of the principle in Marbury v Madison [(1803) 5 US 137] as “axiomatic” [Australian Communist Party v Commonwealth (1951) 83 CLR 1 at 262]: placed a fundamental limitation upon any general acceptance in the exercise of federal jurisdiction of the maxim that the Sovereign could do no wrong. To the contrary, it was for the judicial branch of government to determine controversies as to whether the legislative or executive branches had exceeded their constitutional mandates. The authority given by s 75(iii) in respect of matters in which the Commonwealth is a party was supplemented by s 75(v) which provides for writs of mandamus and prohibition, and for injunctions, against officers of the Commonwealth. [102] Thus, the specificities and juxtapositions in the Australian Constitution concerning the part played in its governmental institutions by the Queen and the Crown, and particularly the provisions made (necessary to a federation) for the integrated Judicature, rendered it inapposite to import into our constitutional institutions, without significant adjustment, notions of governmental immunities and prerogatives that earlier existed in the United Kingdom. It is a basic legal mistake to consider that common law Crown immunities and prerogatives can be picked up holus-bolus and transferred to our antipodean constitutional setting without serious reconsideration, and adjustment, appropriate to the Australian constitutional text. [103] The democratic element: A particular consideration reinforces this conclusion. It is one to which reference has been made, and the point reserved, in more recent decisions of this Court [Mewett (1997) 191 CLR 471 at 542–545; Bass (1999) 198 CLR 334 at 374–375 [99]; British American Tobacco (2003) 217 CLR 30 at 84–85 [145]–[147]; New South Wales v Ibbett (2006) 229 CLR 638 at 641–642 [6] and fn 15]. It provides a reason of basic constitutional principle for abandoning descriptions of the Commonwealth, the States and the Territories of Australia as manifestations of the Crown or of the Crown in a particular “right”. … [108] The point of this discourse is not a merely formal one. It is a basic mistake of constitutional doctrine in Australia to treat the Commonwealth, the States and the Territories as manifestations of the Crown. It follows that it is an equal mistake to derive uncritically the applicable law of the governmental immunities of those polities from notions of the English common law or the royal prerogatives. This is because the new polities take their character from their creation and acceptance by the Australian people. Without argument, analysis and modification, it should not be assumed that this change in the source, origin, and character of the Australian constituent polities did not affect the ambit and content of such immunities. It was thus an error to import into the new constitutional arrangements for Australia, without modification, all of the law on Crown immunities and Crown 50 prerogatives apt to a different country, in different times, reflecting different constitutional purposes and values. … 206

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ACCC v Baxter Healthcare cont. [121] 53 Alternative approaches: It follows that, in default of any valid and explicit legislation concerning governmental immunities in Australia, the proper approach to the present appeal involves the derivation of a new and different rule for governmental immunity in this country. As one aspect of such a rule, it might also be necessary to evolve a subordinate principle, protective of any governmental immunity, extending the immunity in particular cases to private individuals and corporations with which government has contractual or other dealings. Such a subordinate rule might be required because, otherwise, by imposing burdens on such individuals or corporations, a legislature could undermine, or destroy, the governmental immunity so established. [122] In deriving such principles for contemporary Australia, the starting point would necessarily be the terms and assumptions of the Constitution itself. Doubtless past learning on governmental immunity, expressed in the language of “Crown immunity”, would be relevant. But it would not exclude examination of the development of governmental immunity in other common law jurisdictions which have severed, or modified, their relationship with the Crown and established their constitutional order upon the basis of the will of the people, as Australia has ….

Executive powers defined by reference to prerogatives of the Crown attributable to the Commonwealth [3.110] The first set of non-statutory executive powers whose conceptual foundations and

scope remains controversial consists of the prerogatives of the Crown and their modern manifestations. In 1924, H V Evatt (later Evatt J of the High Court), grouped the prerogatives of the Crown under three broad heads in his work (The Royal Prerogative (Law Book Co, Sydney, 1987), pp 30-31): In the first place, a great many of them constitute in essence a right on the part of the King to do certain acts, apart of course from parliamentary authority. Thus, the King can declare war and make peace. He can coin money. He can act in a certain way in time of war, eg, by seizing the property of the subject and paying reasonable compensation therefor. He can incorporate companies by Royal Charter. He can issue Letters Patent in respect of inventions, and he can pardon offenders and confer honours. These powers, of course, differ to an enormous extent amongst themselves and none of the classifications given above by the recognised authorities treat them as being in the same category. But there is one feature common to them all. They are positive in character and enable the King to do certain things at certain times and places on certain conditions. The time, place and circumstance of the exercise of the Prerogative varying, the Prerogative itself is in all cases in the nature of action. It is par excellence executive in character. For want of a better phrase, these Prerogatives may, for the purpose of this thesis, be called executive powers. In the second place, a number of the Prerogatives are essentially different in character. They are negative in the sense that they do not connote isolated and occasional action on the part of the King. They refer more to permanent and continuous characters and capacities of the Monarch existing independent of time, place and circumstance. Thus, the King is entitled to be paid as against a debtor, before all other creditors. Does this involve any action? No doubt, the Prerogative must be claimed in order to be effective but it is closely related to the continuing and permanent principle that the King is immune from the ordinary process of his Courts. Similarly, apart from statute, he cannot be mulct in costs. He cannot be compelled to give discovery. It is accepted law that he is not bound by statutes except under certain circumstances and conditions. All these powers and rights of the King are in the nature of immunities and preferences. They are not in the nature of Executive powers nor are they in the nature of rights of property. In the third place, certain Prerogatives are clearly in the nature of property. For instance, the right to escheats, the Prerogative right to gold and silver mines, the right to treasure trove, and the right to Royal fish, ownership of the foreshores and of the bed of the ocean within territorial [3.110]

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limits – all these and such like Prerogatives, including, for instance, the ownership of lands in a new Colony, are ordinary rights of property against all the world. It would seem, therefore, that for practical purposes all the Prerogatives of the King can be divided into executive powers, certain immunities and preferences, and proprietary rights.

There are disparate accounts of how the prerogatives come to form part of (or at least inform) the non-statutory executive power of the Commonwealth, whether through s 61 (the generally accepted explanation) or through s 2. (The issue arises in particular in considering when and how the Commonwealth acquired the powers that at Federation were generally regarded as remaining with the Imperial authorities, in particular powers of war and peace and of treaty making. See generally L Zines, Commentary, in Evatt [1924].) There are at least three different conceptual accounts of the prerogative. For John Locke in Second Treatise of Civil Government ((1690), ch 14, section 160), the prerogative was: A power to act according to discretion, for the public good, without the prescription of the law, and sometimes even against it …: for since in some governments the lawmaking power is not always in being, and is usually too numerous, and so too slow, for the dispatch requisite to execution; and because also it is impossible to foresee, and so by laws to provide for, all accidents and necessities that may concern the public, or to make such laws as will do no harm, if they are executed with an inflexible rigour, on all occasions, and upon all persons that may come in their way; therefore there is a latitude left to the executive power, to do many things of choice which the laws do not prescribe.

Sir Edward Blackstone in his Commentaries, echoed Locke’s account but also drew attention to the uniqueness of the prerogative powers: By the word prerogative we usually understand that special pre-eminence, 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, in its etymology, (from prae and rogo) 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. (Commentaries on the Law of England, A Facsimile of the First Edition of 1765–1769 (University of Chicago Press, Chicago, 1979), p 111)

And for A V Dicey, the prerogative was “the residue of discretionary or arbitrary authority, which at any given time is legally left in the hands of the Crown” (Introduction to the Study of the Law of the Constitution (10th ed, Macmillan & Co, London & New York, 1954), p 424). There are strong traces in Locke and Blackstone of the idea that the prerogative is a standing source of executive power to be called on in cases of urgent need and crisis, authorising action outside the regular law, and subject to a political requirement that it be exercised for the good of the nation. Dicey’s version of the prerogative as a residual power shaped Diplock LJ’s observation (at 79) in British Broadcasting Corporation v Jones [1965] Ch 32, that “it is 350 years and a civil war too late for the Queen’s courts to broaden the prerogative”. All three are ultimately rooted in the personal and absolute powers of the monarch. Those powers take on a different cast in the context of a written constitution in which the executive power is expressly conferred by s 61 (rather than recognised by the common law as powers possessed by the Crown as a matter of custom), in which the powers of the Crown or Executive are not personal powers and in which the very idea of arbitrary power is anathema. These questions about the conceptual foundations and scope of the prerogative (or non-statutory executive powers) came together in the Australian context in Ruddock v Vadarlis (2001) 110 FCR 491, along with the question of the relationship between legislation 208

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and prerogative-like powers. Cadia Holdings Pty Ltd v New South Wales (2010) 242 CLR 195 then considers the federal distribution of prerogative-like powers. Most recently in CPCF v Minister for Immigration and Border Protection [2015] HCA 1; (2015) 255 CLR 514 (28 January 2015), one question was, as in Ruddock v Vadarlis, whether the Commonwealth had a non-statutory power to detain asylum seekers. For most members of the Court, it was not necessary to resolve this question but some members of the High Court (albeit in dissent) appear to cast doubt on the conclusions in Ruddock v Vadarlis.

Ruddock v Vadarlis [3.120] Ruddock v Vadarlis (2001) 110 FCR 491 at 495–503, 507, 537–546 [The MV Tampa rescued 433 people from a sinking fishing boat 140km off the coast of Christmas Island. Despite being requested not to, the Captain took the MV Tampa into Australian territorial waters. Shortly after, Australian troops boarded the vessel and detained those people the Tampa had rescued. The Commonwealth arranged for the them to be transferred to New Zealand and Nauru so their refugee status could be determined. Although the Migration Act 1958 (Cth) provided a comprehensive regime regulating the detention and deportation of non-citzens, the government did not seek to rely on its powers under the Act. Rather, it relied on executive power under s 61 of the Constitution, namely the prerogative power to regulate the entry of non-citizens into Australia. The Federal Court denied the existence of this power. The Minister appealed to the Full Court.] Black CJ (dissenting): Was there lawful authority for the Executive action taken? [4] 495 It cannot be doubted that a nation state has a sovereign power to exclude illegally entering aliens from its borders, and to legislate for this purpose: Robtelmes v Brenan (1906) 4 CLR 395; Attorney-General (Canada) v Cain (1906) AC 542. It is said that, in this case, the people rescued by the MV Tampa may be lawfully prevented from entering Australia in the exercise of this sovereign power, but not in exercise of power derived from legislation. [5] There is also no doubt that, as a general principle of law, there is no Executive authority, apart from that conferred by statute, to subject anyone in Australia, citizen or non-citizen, to detention. In Chu Kheng Lim v Minister for Immigration, Local Government and Ethnic Affairs (1992) 176 CLR 1, Brennan, Deane and Dawson JJ said (at 19): Since the common law knows neither lettre de cachet nor other executive warrant authorising arbitrary arrest or detention, any officer of the Commonwealth Executive who purports to authorise 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. See also Mason CJ (at 13) and McHugh J (at 63) to the same effect. [6] As a general principle, the Executive cannot expel a person from Australia without statutory authority, although whether that principle applies to non-resident unlawful non-citizens is disputed here: Brown v Lizars (1905) 2 CLR 837; Robtelmes; Re Bolton; Ex parte Beane (1987) 162 CLR 514 at 528. But the Solicitor-General submitted that a non-statutory Executive power to prevent unlawful non-citizens from entering Australia carries with it necessary ancillary powers, which may include power to detain and expel an unlawful non-citizen for the purposes of protecting Australia’s borders. [7] It may be accepted that ancillary powers of detention and expulsion must travel with a power to exclude (see Cain’s Case at 546; Robtelmes per O’Connor J at 420). But on the view I take, the undoubted power of the Executive to protect Australia’s borders against the entry of unlawful non-citizens in times of peace derives only from statute. Prerogative power [9] The Solicitor-General’s principal argument was that the appellants acted in exercise of a prerogative power, which is embraced by s 61. It may be accepted that the power of the Executive under s 61 includes powers accorded to the 496 Crown at common law (Barton v Commonwealth [3.120]

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Ruddock v Vadarlis cont. (1974) 131 CLR 477 at 498 per Mason J) and the first question is, therefore, whether there is a prerogative power of the nature contended for by the Solicitor-General. [10] The principal case relied on to demonstrate that the English Crown enjoys a prerogative right to exclude aliens is Musgrove v Toy [1891] AC 272 (Musgrove). In that case, the Privy Council considered an appeal from a decision of the Supreme Court of Victoria: Toy v Musgrove (1888) 14 VLR 349 (Toy). Toy came before all the available members of the Supreme Court (Mr Justice Webb being absent on leave) on a reference of questions of law to the Full Court by Kerferd J. The applicant, a Chinese immigrant who had travelled to Victoria on the SS Afghan, had been prevented from landing by customs officers. He applied to the Supreme Court for a writ of habeas corpus in response to which the customs officials asserted a prerogative of the Crown to exclude alien friends. Only two members of the six judges who constituted the full bench of the Supreme Court (Higinbotham CJ and Kerferd J) upheld the prerogative claim of the customs officers. The other judges (Williams, Holroyd, A’Beckett and Wrenfordsley JJ) rejected the claim of prerogative power, and considered that habeas corpus should issue for the reason that the colonial government did not have the requisite prerogative power. The decision thus turned upon whether the colonial government enjoyed all the rights and privileges of the English Crown and the majority held that it did not. One of the judges, however, expressed a view on that larger subject. Holroyd J, after an historical analysis, observed that (at 425): On a question of this kind I attach comparatively little importance to what was done or said before the close of the sixteenth century. Up to that time constitutional usage was quite uncrystallized; in fact, it had hardly begun to settle. Before then hundreds of precedents might be found, stretches of Royal authority unchallenged at the time, for acts which were afterwards discovered to be gross infringements of the privileges of Parliament or of the liberties of the people. But I am very much impressed with the fact that for nearly three centuries no British Sovereign has attempted to exercise the right of expelling aliens or of preventing their intrusion in time of peace by virtue of his prerogative; and no British Minister, not even the strongest advocate in theory for the plenitude of the Royal authority, has ventured in this matter to reduce his theory into practice. [11] Williams J (at 415) and A’Beckett J (at 434) were content to assume, without offering any opinion, that the prerogative existed in England. [12] On appeal, the Privy Council held that the judges who comprised the majority of the Victorian Supreme Court were wrong to allow the applicant access to the Court and expressly stated that, having allowed the appeal on this narrow ground, it would not be appropriate to express any opinion upon the question of what rights the colonial governments derived from the English Crown, or what prerogative rights existed in the English Crown (at 283). … [16] 497 In the same year as Toy was decided, the Supreme Court of New South Wales also had to consider applications for writs of habeas corpus by Chinese citizens who were prevented by police from disembarking from the SS Afghan: Ex parte Lo Pak (1888) 9 NSWLR 221; Ex parte Leong Kum (1888) 9 NSWR 251. The Crown’s argument that the New South Wales Government had a prerogative power to prevent foreigners entering into the colony was rejected: Lo Pak at 237 per Darley CJ; at 244 per Windeyer J and at 248 per Foster J; Leong Kum at 255–256 per Darley CJ; 261–262 per Windeyer J; 267 per Innes J. Although the cases were resolved on the basis that recognised a distinction between the sovereign power of the English Crown, on the one hand, and the more limited power of the colonial Executive government on the other, two judges expressed an opinion on the wider question. In Lo Pak the Chief Justice said (at 237): It may be that the Sovereign of England may have such a power according to the principles laid down by writers on international law, but so far as I can understand, it has not been a power that has ever been exercised in England. On the contrary … it has been considered necessary to pass a statute for the express purpose of enabling that to be done. [17] In Leong Kum, Innes J expressed a similar view (at 266–267): 210

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Ruddock v Vadarlis cont. It seems, however, somewhat strange that the learned counsel, who has argued the case with his accustomed zeal and ability, has not been able to put before the Court a single instance in which any such proclamation has 498 issued, or any such order has been made in the case of a subject of a nation in amity with England. [18] In Robtelmes Griffith CJ doubted “whether the Executive authority of Australia, or of any State, could deport an alien except under the conditions authorized by some Statute” but found it “not necessary to discuss that question now” (at 403). Barton J observed (at 414–415): Whether expulsion in Great Britain or in one of her self-governing Colonies or States, requires statutory authority has, no doubt, been the subject of some hesitation on the part of eminent lawyers, but it is not necessary for us to decide that question. It does not arise. The question here is, first, whether the statutory authority exists, and next, whether it has been properly exercised? Now, in the Encyclopaedia of the Laws of England, Vol 5, p 268, there are a few lines that state that question very clearly: There are dicta of Blackstone (1 Com 366) and Chitty (Pleas of Crown ed 1820 p 49) to the effect that the Crown by its prerogative, can expel even alien friends; but there does not seem to have been any attempt since the Revolution to exercise such prerogative, and the extrusion of alien friends has since then always been effected by statutory authority. The question to-day is one of statutory authority. [19] The doubts about the continued existence of the prerogative power that would seem to underlie the judicial observations to which I have referred raise the difficult question, on which opinion is divided, whether a particular prerogative power may revive after it has fallen into disuse. There is an argument that a long period of disuse extinguishes the prerogative, because it would be illusory to say that Parliament has, in such circumstances, made a choice to leave the prerogative in the Crown’s hands: G Winterton, Parliament, the Executive, and the Governor-General: A Constitutional Analysis (1983), pp 118-119. Another view is that the prerogative may be revived in “propitious” circumstances, but not when it would be “grossly anomalous and anachronistic” (the phrase is taken from a dissenting judgment in M’Kendrick v Sinclair (1972) SC (HL) 25 at 60–61): S A de Smith, Constitutional and Administrative Law (3rd rev ed, 1977), p 11; Markesinis, “The Royal Prerogative Revisited” [1973] Cambridge Law Journal 287 at 299–305. [20] Some of these judicial and extra-judicial observations can be seen to support the proposition that prerogative powers can be extinguished, not merely because legislation has been passed, but because the prerogative powers have become incompatible with modern constitutional jurisprudence. For example, considerations of this nature appear to emerge in the passage from the judgment of Holroyd J in Toy at 425 (reproduced at [10] above) in which his Honour was “impressed” with the absence of any attempt to exercise the prerogative in three centuries. Lord Reid’s speech in Burma Oil Co (Burma Trading) Ltd v Lord Advocate [1965] AC 75 at 100 illustrates (in relation to a different prerogative power) the same approach: So … we must try to see what the position was after it became clear that sovereignty resided in the King in Parliament. Any rights thereafter exercised by the King (or the executive) alone must be regarded as a part of sovereignty which Parliament chose to leave in his hands. … [22] 499 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 (Sir W S Holdsworth, A History of English Law, Vol X, (1938), pp 396-397). 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 17th, 18th, and early 19th centuries … During the greater part of the 18th 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 thought, might spread in England the ideas of the French Revolution. They were therefore opposed by the new Whigs [3.120]

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Ruddock v Vadarlis cont. who sympathized with these ideas. In 1816 Romilly, Mackintosh, and Denman denied that the Crown had the wide prerogative attributed to it by Eldon and Ellenborough; the same thesis was maintained in 1825 in a learned article in the Edinburgh Review; and in 1890 it was supported by Mr Craies. [23] In a footnote to this passage, Professor Holdsworth notes that the last occasion on which it appears that a prerogative power to expel or exclude non-citizens was exercised was in 1771, when the Crown directed that Jews “unable to pay the usual freight”, should, unless they had a passport from an ambassador, be excluded from British territory. … [26] 500 The preponderance of opinion by the text writers supports the view that, by the end of the 19th century, in English jurisprudence, the power to exclude aliens in times of peace was not considered to be part of the prerogative. In W Forsyth, Cases and Opinions on Constitutional Law (1869) the learned authors say (p 181): “the Crown has no power by its prerogative alone, to send anyone, whether he be a subject or an alien compulsorily out of the realm.” Closer to the end of the 19th century, Craies wrote (at pp 27-29): There is an increasing disposition and even a popular demand for the use by the Executive, not only of the dispensing power with reference to comparatively unpopular laws, but also of the prerogative instead of the slower methods of modern legislation … The question for solution appears to be this: whether the Crown has, independently of the Legislature, any right to say in time of peace to any foreigner who is within the empire or who knocks at its gates, that he must depart or may not enter … Except with reference to foreign sovereigns, their ambassadors and their forces, upon a careful historical examination of the subject, there seems to be no prerogative of the Crown either to exclude or expel aliens. Whether they be innocent immigrants or sojourners or fugitive criminals of the deepest dye, their right to land or remain upon British soil depends not upon the will of the Crown but upon the voice of the Legislature; nay, more, this right has existed ever since the Great Charter, if not even earlier, and is so ancient that no prerogative to the contrary can with any certainty be vouched. … Section 61 [30] 501 If it be accepted that the asserted Executive power to exclude aliens in time of peace is at best doubtful at common law, the question arises whether s 61 of the Constitution provides some larger source of such a power. 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 the Constitution by virtue of general conceptions of “the national interest”. This is all the more so when according to English constitutional theory new prerogative powers cannot be created: see generally Winterton at p 120 and British Broadcasting Corporation v Johns [1965] Ch 32 in which Diplock LJ said (at 79): “[I]t is 350 years and a civil war too late for the Queen’s courts to broaden the prerogative.” [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. Thus, this Executive power has been validly used to set up the Australian Bicentennial Authority (Davis v Commonwealth (1988) 166 CLR 79) and the CSIRO, but has been held not to be available to sustain deportation (Bradley v Commonwealth (1973) 128 CLR 557); or compulsion to attend to give evidence or to produce documents in an inquiry (McGuiness v Attorney-General (Vic) (1940) 83 CLR 73): see generally P H Lane, Lane’s Commentary on the Australian Constitution (2nd ed, 1997), p 439. [32] It is against this background that I now turn to consider the argument that if there is any prerogative or other non-statutory Executive power, it has been abrogated by the Parliament through the enactment of the Migration Act 1958 (Cth) (the Act), as amended from time to time. Relationship between statute and prerogative [33] It is uncontentious that the 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 212

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Ruddock v Vadarlis cont. 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] The question is, what is the test to determine whether a prerogative power has been displaced by statute? The accepted test is whether the legislation has the same area of operation as the prerogative. In De Keyser’s, Lord Dunedin said (at 526): It is equally certain that if the whole ground of something which could be done by the prerogative is covered by the statute, it is the statute that rules. On this point I think the observation of the learned Master of the 502 Rolls is unanswerable. He says: “What use would there be in imposing limitations, if the Crown could at its pleasure disregard them and fall back on prerogative?” Lord Moulton said (at 554): the statutory powers … are wider and more comprehensive than those of the prerogative itself. [The Parliament] has indicated unmistakably that it is the intention of the nation that the powers of the Crown in these respects should be exercised in the equitable manner set forth in the statute. Lord Sumner said (at 561): It seems also to be obvious that enactments may [abrogate the prerogative], provided they directly deal with the subject-matter, even though they enact a modus operandi for securing the desired result, which is not the same as that of the prerogative. Lord Parmoor said (at 576): Where a matter has been directly regulated by statute there is a necessary implication that the statutory regulation must be obeyed, and that as far as such regulation is inconsistent with the claim of a Royal Prerogative right, such right can no longer be enforced. See also per Lord Atkinson (at 538). [35] In Laker Airways Ltd v Department of Trade [1977] 1 QB 643, the House of Lords held that there was no residual prerogative right to withdraw the designation of an airline, Skytrain, under an international airline treaty between England and the United States (the Bermuda Agreement), where the airline had been duly licensed under a domestic statute regulating civil aviation. On the question of construing the scope of the domestic statute, Roskill LJ said (at 722): I do not think that the Attorney-General’s argument that the prerogative power and the power under municipal law can march side by side, each operating in its own field, is right. The two powers are inextricably interwoven. Where a right to fly is granted by the Authority under the statute by the grant of an air transport licence which has not been lawfully revoked and cannot be lawfully revoked in the manner thus far contemplated by the Secretary of State, I do not see why we should hold that Parliament in 1971 must be taken to have intended that a prerogative power to achieve what is in effect the same result as lawful revocation would achieve, should have survived the passing of the statute unfettered so as to enable the Crown to achieve by what I have called the back door that which cannot lawfully be achieve by entry through the front. I think Parliament must be taken to have intended to fetter the prerogative of the Crown in this relevant respect. Lord Denning MR said (at 706–707): Seeing then that … statutory means were available for stopping Skytrain if there was a proper case for it, the question is whether the Secretary of State can stop it by other means. Can he do it by withdrawing the designation? Can he do indirectly what he cannot do directly? Can he displace the statute by invoking a prerogative? If he could do this, it would mean that, by a side wind, Laker Airways Ltd would be deprived of the protection which the statute affords them … [T]he Secretary of State was mistaken in thinking that he could do it. 503 See also Lawton LJ (at 728) and Mocatta J at first instance (at 678) to the same effect. [36] In Hunkin v Siebert (1934) 51 CLR 538, the Commonwealth suspended an employee without pay, prior to dismissing him. It was conceded that the employee was not suspended under or in [3.120]

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Ruddock v Vadarlis cont. accordance with the disciplinary procedures (including suspension) provided for under the Public Service Act 1916 (SA). The Commonwealth argued that, as another section of the Public Service Act 1916 reserved the Crown’s common law power to dismiss a public servant, and the right of suspension was an incident of that power, there existed outside the statute, alternative common law mode of dealing with the employee. The Court ruled that the express power of suspension “necessarily regulates and controls any prerogative power of the Crown to suspend” (Starke J at 544). Rich, Dixon and McTiernan JJ said (at 542) that “such provisions must be interpreted as restricting the common law right of the Crown to exercise a similar power by other means and in other circumstances”. [37] These cases show that, where the prerogative is relied on as an alternative source of power to action under a statute, the prerogative will be held to be displaced when the statute covers the subject matter: see further J Goldring, “The Impact of Statutes on the Royal Prerogative; Australasian Attitudes as to the Rule in Attorney-General v De Keyser’s Royal Hotel Ltd” (1974) 48 Australian Law Journal 434. [38] Reliance was placed on Barton 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. Barwick CJ (at 488), Mason J (at 499–500) and Jacobs J (at 507) did so on the basis that there was no extradition treaty in place between Brazil and Australia. McTiernan and Menzies JJ, in their joint judgment, confined themselves to considering whether the Act prevented the Attorney-General from making a request to detain, pending a request for extradition (at 489, 491). The obiter observations in that case to the effect that s 21 of the Extradition (Foreign States) Act 1966 entirely displaced the prerogative power to make a requisition of a foreign state in circumstances where the Act applied are telling: see 487–488 per Barwick CJ; 501 per Mason J; and 508 per Jacobs J; McTiernan and Menzies JJ expressed no view. Thus, Barton ought not be considered authority for the proposition that an Executive power, apart from statute, can coexist with a statute that applies in the same area. On the contrary, the Court appears to have made decision squarely on the basis of the limited area of operation of the Extradition (Foreign States) Act 1966, and the consequential absence of any inconsistency between the exercise of the prerogative power and the provisions of the statute. So much is clear from the reasons for judgment of Mason J (at 501): Here, not only is there a conspicuous absence of express words, but the area of operation of the statute, limited as it is to extradition pursuant to treaty, does not extend to the whole of the area covered by the exercise of the prerogative or executive power; moreover, there is no inconsistency between the provisions of the statute and the exercise of that power so far as it relates to the extradition of fugitive offenders from foreign states which are not party to an extradition treaty with Australia. (Emphasis added.) … [40] Finally, it is necessary to consider the clarity with which an intention to displace a prerogative or Executive power needs to be expressed. It can readily be conceded that if a power is well used, well-established 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. Another such indication may be where the Parliament has entered a field in which Australia has assumed treaty obligations and has acted to give effect to those obligations in that field and where the asserted prerogative or Executive power might be capable of exercise in a manner not conformable with the Parliament’s provision for the satisfaction of those obligations. [41] I now turn to consider the relevant provisions of the Act to determine whether, if there is any Executive or prerogative power deriving from a source other than statute, it was the intention of the Parliament that the Act should exclude it. I do so in the light of the overview of the legislation given by French J in his reasons for judgment. 214

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Ruddock v Vadarlis cont. Migration Act 1958 (Cth) [42] The long title of the Act reads: “an Act relating to the entry into, and presence in, Australia of aliens, and the departure or deportation from Australia of aliens and certain other persons.” As well as having an informative long title, this Act contains an express statement of its object. This is provided for by s 4(1): “The object of this Act is to regulate, in the national interest, the coming into, and presence in, Australia of non-citizens.” [43] Subsections (2), (3) and (4) then outline the Parliament’s conception that the various mechanisms provided for in the Act – visas, self-identification, removal and deportation – are to advance the object of the Act stated in subs (1). [44] The reference in the stated object to “the national interest” is important and is suggestive of a recognition by the Parliament of its unquestioned power to determine comprehensively what the national interest shall be in this respect. An object so defined tends to point against an intention that there should be some residual Executive power to determine, outside the statute, and in relation to the removal and deportation of persons whose presence in Australia is not permitted by the Act, what the national interest requires in any particular case. It is also, I think, relevant to point out that in this context the national interest, as contemplated by the provisions of the Act, includes recognition of Australia’s protection obligations under the Convention Relating to the Status of Refugees 1951 done at Geneva on 28 July 1951 as amended by the Protocol Relating to the Status of Refugees 1967 done at New York on 31 January 1967 (Refugee Convention), matters as to which the Act makes elaborate provision. [Black CJ set out the key provisions of the Migration Act relevant to the rescued people. Those provisions included powers to detain asylum seekers and to consider their applications for asylum.] [60] 507 Taken together these 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 Mr Farmer 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 (V 899/2001, V 900/2001, Transcript of Hearing, 2 September 2001, pp 170-171). This regime extends to the territorial waters and to the high seas. It regulates the right to detain, and creates offences. [61] As I have endeavoured to show, once a particular statutory regime is in place, there can be no parallel Executive right in the area expressly covered. In the scheme of the Act that I have outlined, this means that if a migration officer forms a view under s 189, the regime of detention and bringing to the migration zone provided for by s 189 has to take effect, with various consequences, both detrimental and beneficial to a person affected. Beneficial, in that if the detainee has a claim for refugee status a range of rights derive from Australia’s domestic conferral of rights pursuant to the Refugee Convention, detrimental because the detainee’s “freedom” to continue an illegal journey to Australia is curtailed by lawful detention, followed no doubt by deportation. It would be a strange intention to impute to the Parliament that a parallel system of unregulated Executive discretion should be available, or not available, according to whether an officer for the purposes of s 189(2) happened to be on board, for example, a Commonwealth vessel tasked for border protection. [62] Finally, that the Act, as amended by the Amendment Act, was intended to be wide in scope and powerful in its means to achieve its object, is confirmed in the second reading speech of the Hon Philip Ruddock, Minister for Immigration and Multicultural Affairs … (Australia, House of Representatives, Debates (1999), p 10147 – passages omitted) … [63] The Minister went on to describe the purpose of the Bill: The bill will create new powers that will allow our officers to undertake enforcement action beyond our territorial waters, and to arrest and prosecute those involved in attempts to breach our sovereignty in this way. The bill ensures that the investigatory and enforcement powers held by officers of front-line border agencies are complementary so they may function more effectively and efficiently on behalf of Australia. [3.120]

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Ruddock v Vadarlis cont. [64] This review of the Act shows that it 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 the Amendment Act that regime specifically extends to protection of Australia’s sea borders. The regime is comprehensive in its coverage of powers of apprehension and detention. No doubt gaps can be found in the scheme, but the existence of these does not detract from the comprehensive character of the statutory regime. The conclusion to be drawn 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. This conclusion is all the more readily drawn having regard to what I have concluded about the nature and the uncertainty of the prerogative or Executive power asserted on behalf of the Commonwealth. French J: The Executive power of the Commonwealth – source and general character [176] 537 The Commonwealth of Australia is constituted by the Constitution (s 4). The legislative, Executive and judicial powers of the Commonwealth are conferred by the Constitution and not otherwise. The Executive power is provided for in s 61: The executive power of the Commonwealth is vested in the Queen and is 538 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. Section 61 is the primary source of Executive power. Its content extends to the execution and maintenance of the Constitution and the laws of the Commonwealth. It is also limited by those terms insofar as it will not authorise the Commonwealth to act inconsistently with the distribution of powers and the limits on power for which the Constitution provides. Nor will it authorise the Commonwealth to act otherwise than according to the laws of the Commonwealth. Other provisions of the Constitution vesting powers in the Governor-General may be seen as distinct sources of Executive power on their specific topics and as giving content to the power conferred by s 61. [177] At the time of federation and the early years of the Commonwealth it seems to have been assumed that a number of the common law prerogatives of the Crown such as the power to declare war, enter treaties or acquire territories, were not subsumed in s 61 but remained with the Crown to be exercised upon the advice of Imperial Ministers – L Zines, The High Court and the Constitution (4th ed, 1997), p 251. Even so, there was apparent a broad view of the content of s 61 in the observation of Isaacs J in Farey v Burvett (1916) 21 CLR 433 at 452 that: These provisions carry with them the royal war prerogative, and all that the common law of England includes in that prerogative so far as it is applicable to Australia. [178] The modern relationship of the power to the prerogatives of the Crown was stated by Mason J in Barton v Commonwealth (1974) 131 CLR 477 at 498: The Constitution established the Commonwealth of Australia as a political entity and brought it into existence as a member of the community of nations. The Constitution conferred upon the Commonwealth power with respect to external affairs and, subject perhaps to the Statute of Westminster 1931 and the Balfour Declaration, entrusted to it the responsibility for the conduct of the relationships between Australia and other members of the community of nations, including the conduct of diplomatic negotiations between Australia and other countries. By s 61 the executive power of the Commonwealth was vested in the Crown. It 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. It includes the prerogative powers of the Crown, that is, the powers accorded to the Crown by the common law. [179] The use of the “prerogative” to describe such a power may properly acknowledge its historical antecedents but not adequately illuminate its origins in s 61 of the Constitution. For it is Constitutions 61 that 216

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Ruddock v Vadarlis cont. 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. (Davis v Commonwealth (1988) 166 CLR 79 at 93 (Mason CJ, Deane and Gaudron JJ) citing Commonwealth and Central Wool Committee v Colonial Combing, Spinning & Weaving Co Ltd (1922) 31 CLR 421 at 437–439 [539] (Wooltops Case).) As Gummow J said in Re Ditfort; Ex parte Deputy Commissioner of Taxation (1988) 19 FCR 347 at 369: In Australia … one looks not to the content of the prerogative in Britain, but rather to s 61 of the Constitution, by which the executive power of the Commonwealth was vested in the Crown. [180] The “spheres of responsibility vested in the Crown by the Constitution” referred to by Mason J in Barton were described in Davis as “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” (at 93). In like vein Brennan J agreed generally with the observation of Jacobs J in Victoria v Commonwealth (AAP Case) (1975) 134 CLR 338 at 406 that the phrase “maintenance of the Constitution” imports the idea of Australia as a nation. Jacobs J said in the AAP Case: Within the words “maintenance of this Constitution” appearing in s 61 lies the idea of Australia as a nation within itself and in its relationship with the external world, a nation governed by a system of law in which the powers of government are divided between a government representative of all the people of Australia and a number of governments each representative of the people of the various States. Brennan J saw the phrase as assigning to the Executive government functions relating “not only to the institutions of government but more generally to the protection and advancement of the Australian nation” – referring to Burns v Ransley (1949) 79 CLR 101 at 109–110 and Australian Communist Party v Commonwealth (1951) 83 CLR 1 at 187–188. The Executive power of the Commonwealth – subject to parliamentary control [181] The Executive power can be abrogated, modified or regulated by laws of the Commonwealth. Its common law ancestor, the Royal Prerogative, was similarly subject to abrogation, modification or regulation by statute. As Lord Denning observed in Laker Airways Ltd v Department of Trade [1977] 1 QB 643 at 705, it was described by Blackstone (Sir W Blackstone, Commentaries, Vol 1 (8th ed, 1778) drawing on J Locke’s True End of Civil Government (1764), as: “the discretionary power of acting in the public good where the positive laws are silent.” Lord Denning himself described it as “a discretionary power exercisable by the executive government for the public good, in certain spheres of governmental activity for which the law has made no provision …” [182] The conceptual bases upon which it is said that statute law may abrogate or regulate the prerogative were variously proposed in De Keyser’s. Implied assent by the Crown (at 526), the futility of concurrent powers, one regulated and the other not (at 539), a presumption that the Crown resorts to statute rather than its unqualified power (at 554) and simple parliamentary sovereignty (at 576) encapsulate the approaches taken by the Law Lords in that case. In the end, however, there was nothing in their approaches which permitted avoidance of the need to construe the relevant statute to determine whether, by express words or necessary implication, it has any, and if so what, operation upon the prerogative power. For it may be as Lord Sumner seemed to allow that a statute dealing with the same matter as the prerogative power could have as its object “to provide an additional mode of attaining the same object” (at 561). It has been broadly stated that the royal prerogative ceases to apply to a matter once it has been made the subject of legislation – Walker v The Queen [1994] 2 AC 36 at 41. 540 That is not to say that any statute, however confined its effect upon a matter covered by the prerogative is to be taken as displacing it. [183] The Executive power of the Commonwealth under s 61 cannot be treated as a species of the royal prerogative, “The residue of discretionary or arbitrary authority which at any given time is legally left in the hands of the Crown” – De Keyser at 526. While the Executive power may derive some of its [3.120]

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Ruddock v Vadarlis cont. content by reference to the royal prerogative, it is a power conferred as part of a negotiated federal compact expressed in a written Constitution distributing powers between the three arms of government reflected in Chs I, II and III of the Constitution and, as to legislative powers, between the polities that comprise the federation. The power is subject, not only to the limitations as to subject matter that flow directly from the Constitution but also to the laws of the Commonwealth made under it. There is no place then for any doctrine that a law made on a particular subject matter is presumed to displace or regulate the operation of the Executive power in respect of that subject matter. The operation of the law upon the power is a matter of construction. [184] That construction, while governed ultimately by the terms of the statute under consideration, is informed by a requirement for a clear intention to displace the power. In Barton, Barwick CJ used the term “extremely strong”, to describe “the rule that the prerogative of the Crown is not displaced except by a clear and unambiguous provision” (at 488). Mason J referred to the “well accepted” requirement “that a statute will not be held to abrogate a prerogative of the Crown unless it does so by express words or by implication, that is, necessary implication” (at 501 citing De Keyser). McTiernan and Menzies JJ adopted the same approach (at 491). Jacobs J said that “an intention to withdraw or curtail a prerogative power must be clearly shown” (at 508). He referred also in that context to the importance of the right to communicate freely with a foreign state which was the power there in issue, the case being one about an extra statutory request by Australia for extradition of a person from Brazil. In Ling v Commonwealth (1994) 51 FCR 88, the Full Court (Gummow, Lee and Hill JJ) considered the effect of legislation upon the power of the Crown to take an assignment of a chose in action. They referred to the passages cited above from Barton and, with approval, to the statement of Street J in Booth v Williams (1909) 9 SR (NSW) 421 at 440 that “it is presumed that the Legislature does not intend to deprive the Crown of any prerogative right or property unless it expresses its intention to do so in explicit terms or makes the inference irresistible” (at 92). In Oates v Attorney-General (Cth) (2001) 181 ALR 559, Lindgren J referred to what Barwick J had said in Barton about the requirement for a clear and unambiguous provision to “displace” the prerogative of the Crown and added (at 569): “I regard the word ‘displaced’ in this sentence as including the notion of partial displacement, that is, confinement, restriction or limitation.” [185] The Executive power of the Commonwealth covers a wide range of matters, some of greater importance than others. Some are intimately connected to Australia’s status as an independent, sovereign nation State. The relevance of the importance of the particular power to the question whether it has been displaced by a statute, appears to have been accepted by Jacobs J in Barton. The greater the significance of a particular Executive power to national sovereignty, the less likely it is that, absent clear words or inescapable implication, the parliament would have intended to extinguish the power. In such a case close scrutiny will be required of any contention that a statute, 541 without express words to that effect, has displaced the operation of the Executive power by virtue of “covering the field” of the subject matter. Even in De Keyser the possibility was allowed by Lord Sumner that a statute dealing with a subject matter covered by the prerogative might have as its object the creation of another way of dealing with the subject which does not displace the prerogative. The Executive power – the gatekeeping function [French J considered 19th century UK and colonial cases on admission and exclusion of foreigners and continued.] [190] 542 It is to be noted that in relation to each of these cases the Executive order appeared to have been made contrary to a statute under which there was at least an implied permission to Chinese immigrants to enter the colony – see the discussion by Innes J in Ex parte Leong Kum (1888) 9 NSWR 251 at 267–268. These cases, although ... adverting to the absence of any relevant exercise of exclusionary prerogative power by the British Crown, turned upon the existence of a statutory permission to enter the colony and, albeit obiter, the fact that the colony was not a sovereign nation. [191] The scope of the Executive power conferred by s 61 of the Constitution is to be measured by reference to Australia’s status as a sovereign nation and by reference to the terms of the Constitution itself. The effect of the statute law, in this case the Migration Act, will be considered separately. [192] It is not necessary for present purposes to consider the full content of Executive power and the extent to which it may operate upon the subject matter of the heads of Commonwealth legislative 218

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Ruddock v Vadarlis cont. power. Given that the legislative powers conferred by s 51 are concurrent with those of the States, subject to the paramountcy of Commonwealth statutes, (covering cl 5 and s 109) it could not be said that, absent statutory authority, Executive power may be exercised in relation to all those matters. There are legislative powers however which may be seen as central to the expression of Australia’s status and sovereignty as a nation. They include the powers to make laws with respect to naturalisation and aliens (s 51(xix)), immigration and emigration (s 51(xxvii)) and the influx of criminals (s 51(xxviii)). Australia’s status as a sovereign nation is reflected in its power to determine who may come into its territory and who may not and who shall be admitted into the Australian community and who shall not. That power may also be linked to the foundation of the Constitution in popular sovereignty implied in the agreement of the “people” of the pre-federation 543 colonies “to unite in one indissoluble federal Commonwealth”. It may be said that the people, through the structures of representative democracy for which the Constitution provides, including an Executive responsible to the Parliament, may determine who will or will not enter Australia. These powers may be exercised for good reasons or bad. That debate, however, is not one for this Court to enter. [193] In my opinion, the 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. This does not involve any conclusion about whether the Executive would, in the absence of statutory authority, have a power to expel non-citizens other than as an incident of the power to exclude. 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. … [198] The question for determination now is whether, if such power exists absent statute, it has been abrogated by the Migration Act. Whether the Executive power to exclude aliens is abrogated by the Migration Act [199] The long title of the Migration Act marks it as a control mechanism for regulating the entry into Australia of aliens, or non-citizens, as they are now termed. This is apparent from its sole object set out in s 4(1) “to regulate, in the national interest, the coming into and presence in, Australia of non-citizens”. The other subsections of s 4 relate to what the Migration Act provides in order “to advance its object”. The Migration Act is not therefore concerned to create rights of entry except in particular circumstances where it establishes machinery for the discharge of Australia’s protection obligations under the Convention Relating to the Status of Refugees 1951 done at Geneva on 28 July 1951 (the Convention) as amended by the Protocol Relating to the Status of Refugees 1967 done at New York on 31 January 1967 (the Protocol). There is no doubt however that the Migration Act provides a comprehensive regime for preventing unlawful non-citizens from entering into Australia and for their removal from Australia if they do so enter. It confers substantial powers on the Executive in aid of its object. These include the powers under Div 12A of Pt 2 which relate to the pursuit and boarding of foreign ships in Australian waters – ss 245B(2), 245C and 245F. [200] It was submitted for VCCL and Vadarlis that the Migration Act covers the field of unlawful entry into Australia in a way that manifests an intention to displace any Executive power in relation to the same subject matter. Reliance was placed, in particular, upon ss 198 and 199 providing for the removal of unlawful non-citizens from Australia, ss 200 – 206, providing for their deportation and the pursuit and boarding provisions of Div 12A. Reference was also made to s 189 of the Migration Act 1958. That section authorises officers to “detain” persons who are within Australia, for example in the territorial waters, but not in the migration zone as defined where they would be unlawful non-citizens if they were to enter the migration zone. It is a specific control mechanism and a significant element of it is imported by the use of the word “detain”. That is defined in terms of “immigration detention”. That term is itself defined by reference to “being in the company of, and restrained by” an officer or other authorised person or being held by, or on behalf of, an officer 545 in one or other of the places referred to in par (b) of the definition. This may include being held by, or on behalf of, an officer on a vessel when the non-citizen is prevented under s 249 from leaving the vessel. [3.120]

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Ruddock v Vadarlis cont. [201] The question is whether the Migration Act operates to abrogate the Executive power under s 61 to prevent aliens from entering into Australia. There are no express words to that effect. It is necessary then to look to whether by implication it has that effect. It is not necessary for this purpose either to determine the full extent of the Executive power or the full effect of the Migration Act upon it. It is sufficient to ask whether the Migration 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 noncitizens 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] In considering what is the implied intention of the Migration Act and in particular the provisions referred to earlier, it is necessary to have regard not only to the general approach, supported by authority, to the question whether Executive power is taken to be abrogated by statute, but also the importance to national sovereignty of the particular power in question. In my opinion the Migration Act, by its creation of facultative provisions, which may yield a like result to the exercise of Executive power, in this particular application of it cannot be taken as intending to deprive the Executive of the power necessary to do what it has done in this case. The Migration Act confers power. It does not in the specific area evidence an intention to take it away. The term “intention” of course is a fiction. What must be asked is whether the Migration Act operates in a way that is necessarily inconsistent with the subsistence of the Executive power described. It is facultative. Its object is control of entry. Subject to certain specific provisions, such as those relating to the grant of protection visas, its object is not to confer rights upon non-citizens seeking to enter Australia. There are of course process rights at various stages of the visa granting system including those arising under the provisions of Pt 8 relating to judicial review but they do not operate in the circumstances to which the Executive power posited for the purposes of this case applies. [203] Australia has obligations under international law by virtue of treaties to which it is a party, including the Convention and the Protocol. Treaties are entered into by the Executive on behalf of the nation. They do not, except to the extent provided by statute, become part of the domestic law of Australia. The primary obligation which Australia has to refugees to whom the Convention applies is the obligation under Art 33 not to expel or return them to the frontiers of territories where their lives or freedoms would be threatened on account of their race, religion, nationality, or membership of a particular social group or their political opinions. The question whether all or any of the rescuees are refugees has not been determined. It is questionable whether entry by the Executive into a convention thereby fetters the Executive power under the Constitution, albeit there may be consequences in relation to the processes to be applied in the exercise of that power or relevant statutory powers – Minister for Immigration and Ethnic Affairs v Teoh (1995) 183 CLR 273. In this case, in my opinion, the 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 non-refoulement under the Convention. [204] The steps taken in relation to the MV Tampa which had the purpose and 546 effect of preventing the rescuees from entering the migration zone and arranging for their departure from Australian territorial waters were within the scope of Executive power. The finding does not involve a judgment about any policy informing the exercise of that power. That is a matter which has been and continues to be debated in public and indeed international forums. Through that debate and the parliamentary process the Ministers involved can be held accountable for their actions. 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. [Beaumont J agreed largely with French J.]

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Notes&Questions

1.

How does French J’s characterisation of non-statutory executive power under s 61 of the Constitution differ from an account that treats it as a species of the prerogative? Does it suggest that, unlike the Diceyan prerogative, non-statutory powers under s 61 cannot be seen as residues of ancient discretionary authority but rather are somewhat Lockean sources of power to act in the national interest when the laws are silent (at [180]–[181])?

2.

In Attorney-General v De Keyser’s Royal Hotel Ltd [1920] AC 508 the House of Lords held that the prerogative power to seize property without compensation in war-time had been abrogated by statute. The background to the case and relevant documents are collected in Leslie Frederic Scott and Alfred Hildesley, The Case of Requisition: De Keyser’s Royal Hotel Limited v The King (Kessinger Publishing, 1920). Locke insisted that legislative displacement of the prerogative was not an encroachment on the executive.

3.

for in [enacting legislation that displaces the prerogative] they have not pulled from the prince any thing that of right belonged to him, but only declared, that that power which they indefinitely left in his or his ancestors hands, to be exercised for their good, was not a thing which they intended him when he used it otherwise: for the end of government being the good of the community, whatsoever alterations are made in it, tending to that end, cannot be an encroachment upon any body, since no body in government can have a right tending to any other end: and those only are encroachments which prejudice or hinder the public good. Those who say otherwise, speak as if the prince had a distinct and separate interest from the good of the community, and was not made for it; the root and source from which spring almost all those evils and disorders which happen in kingly governments. And indeed, if that be so, the people under his government are not a society of rational creatures, entered into a community for their mutual good; they are not such as have set rulers over themselves, to guard, and promote that good; but are to be looked on as an herd of inferior creatures under the dominion of a master, who keeps them and works them for his own pleasure or profit. If men were so void of reason, and brutish, as to enter into society upon such terms, prerogative might indeed be, what some men would have it, an arbitrary power to do things hurtful to the people. (Second Treatise of Civil Government (1690), ch 14, section 163)

4.

5.

6.

How should the facts that executive powers of the Commonwealth “were never personal powers of the King” and “ were … imported at a time when they had already to a great extent passed out of the hands of the King” (Pitt Cobbett, quoted in Sue v Hill at 499 [88] (further extracted at [3.50])) affect the issues debated and decided in Ruddock v Vadarlis? Ruddock v Vadarlis makes clear that executive power under s 61 that derives from the prerogative may be abrogated or regulated by statute, even as it continues to reflect different views about the threshold for finding that statute should be taken to do so. French J’s judgment is interesting in identifying a textual and constitutionalist rationale for setting a high threshold, even as it rejects the “personal” or “royalist” rationale for a high threshold (at [183]). But are his rationale and conclusion persuasive? Should the importance of a power be relevant to the threshold? The Final Report of the Constitutional Commission (1988) (at 356 [5.217]ff) recommended (by majority) that it was not necessary to amend the Constitution to make clear that prerogative power was subject to legislation. The 1999 proposed constitutional amendment to establish an Australian republic included a provision that “Until the Parliament otherwise provides, but subject to this Constitution, any [3.130]

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prerogative enjoyed by the Crown in right of the Commonwealth immediately before the office of Governor-General ceased to exist shall be enjoyed in like manner by the Commonwealth and, in particular, any such prerogative enjoyed by the GovernorGeneral shall be enjoyed by the President”: Constitution Alteration (Establishment of Republic) Bill 1999, proposed s 70A. 7.

In his examination of Ruddock v Vadarlis, Professor Zines stated (some footnotes omitted): As Simon Evans and Ernst Wilheim have noted (S Evans, “The Rule of Law, Constitutionalism and the MV Tampa” (2002) 13 Public Law Review 94, S Evans, “Australia” (2003) January International Journal of Constitutional Law 123; E Wilheim, “MV Tampa: The Australian Response” (2003) 15 International Journal of Refugee Law 159) one cannot determine from the fact that Australia is a sovereign nation whether the executive has inherent power to prevent the entry of aliens under the Constitution or whether that power can only be exercised if authorised by an Act of Parliament. While the right to prevent such persons entering the country is recognised by international law, that system of law is not concerned with the distribution of power under a domestic constitution. To say with French J that the power of exclusion is so central to sovereignty that “it is not to be supposed” that the government does not have power under the Constitution is a highly subjective statement. It is equally open to argue that as the governmental action involves use of coercive force against unarmed people “it is not to be supposed” that the Constitution (or the common law) would provide such power in the absence of its conferral by Parliament. (Zines (2005) at 291–292.)

8.

9.

10.

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To what extent do you agree with these views of Professor Zines? Professor Zines continued by concluding (at 292): “Criticism of this reasoning does not of course prove that there is not a prerogative power to deny entry to aliens. The cases, dicta, and learned writings are conflicting on this issue, as the judgment of Black CJ shows. … However, if the existence of the coercive prerogative power is uncertain, it is better, in an ‘age of statutes’ and vigorous parliamentary government, to deny the prerogative”. Whether or not a concept of “inherent” executive power, that is, a concept to which inherent substantive content can be attributed, is possible at a purely conceptual level in the abstract, its content has tended to be informed by usage and pragmatism. The concept of “executive power” was a “barren ground for an analytical approach”, “a trackless waste” (D G Morgan, The Separation of Powers in the Irish Constitution (Round Hall, Dublin, 1997), p 272). As Professor Zines has noted, “The principle that the executive government has no power at common law to levy a tax is not derived from contemplating the concept of executive power. It is because of English historical development, particularly the struggles of the 17th century.” (Zines (2005) at 279). Professor Winterton held similar views. When referring to the separation of legislative and executive power he noted: “[T]o treat s 61 as analogous to provisions conferring specific executive powers [as some commentators were inadvertently doing] requires an assumption that ‘the executive power of the Commonwealth’ conferred by s 61 has an ascertainable meaning, with a fixed minimum content including, for example, the power to conclude treaties. This is highly questionable, rendering a legal separation between legislative and executive power not feasible. As Harrison Moore noted, ‘[t]he executive power is so closely allied to the legislative that it may be impossible to draw any other line than that which expediency and practical good sense commend. … [W]e are not encouraged to believe that the executive can make good an independent sphere of its own, free from legislative interference and control’”. (Winterton (2004) at 39.) [3.130]

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Cadia Holdings v New South Wales [3.140] Cadia Holdings Pty Ltd v New South Wales (2010) 242 CLR 195 at 210–211, 225–226 [Cadia Holdings Pty Ltd (“Cadia”) was granted mining leases under the Mining Act 1992 (NSW) over land owned by itself and Newcrest Operations Ltd (“NOL”). From 1998, Cadia conducted mining operations on this land, recovering minerals including copper and gold. Section 284 of the Mining Act 1992 provided that the holder of a lease was liable to pay a royalty to the Minister for Mineral Resources on “privately owned minerals” recovered from the land. The Minister was then required to pay seven-eighths of such a royalty to the owner of the mineral and one-eighth into the Consolidated Fund. Cadia and NOL commenced proceedings in the Equity Division of the Supreme Court of New South Wales against the State and the Minister for unjust enrichment and failing to comply with s 284. The plaintiffs successfully argued that the copper was a “privately owned mineral” within the meaning of the Act. A key element in the argument was that s 3 of the Royal Mines Act 1688 (Imp) removed the Crown’s prerogative right to copper mines, while preserving the prerogative right to gold mines.] French CJ: The effect of Federation upon the prerogative [30] 210 The Constitutions of the former colonies, the powers of the former colonial Parliaments and the laws in force in the former colonies relating to matters within the powers of the Commonwealth Parliament were continued after Federation subject to the Constitution of the Commonwealth [Constitution, ss 106 – 108]. 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 and the States according to their proper functions [With respect to s 61 of the Commonwealth Constitution, see Pape v Federal Commissioner of Taxation (2009) 238 CLR 1 at 60–64 [126]–[133] per French CJ; at 83–92 [214]–[245] per Gummow, Crennan and Bell JJ]. [31] 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 Professor 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 [Zines, “Commentary”, in Evatt, The Royal Prerogative (1987), p C13]: 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 the Governor of a State, such as the incorporation by royal charter of a school or the dissolution of State Parliament. 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]. [32] In Farley, Evatt J referred to the prerogative right in relation to royal metals [(1940) 63 CLR 278 at 321], classified it as a proprietary right of the King and said [(1940) 63 CLR 278 at 322]: 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. [33] 211 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 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), 115; ss 51(vi), 114. See Attorney-General (NSW) v Butterworth & Co (Aust) Ltd (1938) 38 SR (NSW) 195.]. On the other hand, the prerogative right appears to have subsisted at Federation [3.140]

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Cadia Holdings v New South Wales cont. independently of the original justifications proffered in argument in the Case of Mines. 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. [34] Consistently with longstanding assumptions about its retention by the States, Cadia and NOL submitted that “[f]ollowing federation, the prerogative right under consideration was held by the Crown in right of the State of New South Wales”. Not surprisingly, the submission was not contradicted by the State. Having regard to the established understanding of the law in this respect, and the absence of any challenge to it, the appeal falls to be disposed of on the basis that at Federation the relevant prerogative right continued with the executive governments of the States [The reference to “the Crown in right of the State of New South Wales” in the submissions by Cadia and NOL directs attention to the observations by McHugh and Gummow JJ in State Authorities Superannuation Board v Commissioner of State Taxation (WA) (1996) 189 CLR 253 at 293 that the Constitution speaks of the Commonwealth or the States not the Crown in any one or other right]. As appears from what follows, this right was not affected in New South Wales in any way relevant to the outcome of this appeal by colonial and State legislation regulating mining. … Gummow, Hayne, Heydon and Crennan JJ: [85] 225 Justice Field, when Chief Justice of California during the gold-rush period, wrote in Moore v Smaw [(1861) 17 Cal 199 at 222]: 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 226 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, Constitutions 115 forbad the States to coin money. Further, in so far as the reasoning in the Case of Mines 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. [86] 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 [Barton v Commonwealth (1974) 131 CLR 477 at 498; Pape v Federal Commissioner of Taxation (2009) 238 CLR 1 at 61–62 [130], 83 [214]]. 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” [Federal Commissioner of Taxation v Official Liquidator of E O Farley Ltd (1940) 63 CLR 278 at 304]. [87] 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.

[3.145]

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To what extent does French CJ’s conceptualisation of the prerogative-derived powers of the Commonwealth differ between Ruddock v Vadarlis and Cadia Holdings? [3.145]

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In Williams v Commonwealth (2012) 248 CLR 156; [2012] HCA 23 (extracted below at [3.370]), members of the High Court adopted what is arguably a different approach to the relationship between the scope of executive power and subject-matters of legislative power.

CPCF v Minister for Immigration and Border Protection [3.150] CPCF v Minister for Immigration and Border Protection [2015] HCA 1; (2015) 255 CLR 514 [An Australian Border Protection vessel intercepted an Indian flagged vessel carrying the plaintiff and 156 other passengers in Australia’s contiguous zone near Christmas Island. The legal basis of the interception was the suspicion that the Indian vessel was involved in a contravention of the Migration Act 1958 (Cth) (the Migration Act). The Indian vessel was unseaworthy so the passengers were taken on board the Commonwealth vessel and detained there. The Commonwealth vessel began sailing towards India. Section 72(4) of the Maritime Powers Act 2013 (Cth) (MPA) is applicable to persons detained in the contiguous zone and provides as follows: “A maritime officer may detain the person and take the person, or cause the person to be taken: (a) to a place in the migration zone; or (b) to a place outside the migration zone, including a place outside Australia.” The Commonwealth identified this provision as providing the legal basis for the detention of the plaintiff and the other passengers and for taking them towards India. Section 74 limits this power by providing that “A maritime officer must not place or keep a person in a place, unless the officer is satisfied, on reasonable grounds, that it is safe for the person to be in that place.” The Commonwealth was not able to reach an agreement with India under which the plaintiff and the other passengers would be discharged ashore in India. The passengers were then taken into immigration detention under the Migration Act in Australian territory. The plaintiff commenced proceedings alleging that his detention on the Commonwealth vessel was unlawful. That claim was unsuccessful. A majority of the High Court held that his detention was authorised by s 72(4). It was therefore unnecessary for those justices to consider whether it was authorised by the non-statutory executive power. Nonetheless, several commented on the existence of any non-statutory power and the effect of s 5 of the MPA on the non-statutory power. That section is headed “Effect on executive power” and provides “This Act does not limit the executive power of the Commonwealth.”] French CJ: [French CJ held that s 72(4) authorized the plaintiff’s detention.] 538 The Maritime Powers Act and the executive power [40] … The defendants submitted that s 5 negatives any implication, otherwise available, that the MPA excludes Commonwealth executive power in relation to the matters to which it applies. [41] The MPA confers a range of powers on officers of the Executive Government of the Commonwealth, including authorising officers and maritime officers as defined in the Act. The exercise of those powers is conditioned by reference to the circumstances and locations in which they may be exercised and the purposes for which they may be exercised. Whatever the proper construction of s 5, it cannot be taken as preserving unconstrained an executive power the exercise of which is constrained by the MPA. Considerations of coherence in the legislative scheme point to that conclusion. [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 [Cadia Holdings Pty Ltd v New South Wales (2010) 242 CLR 195 at 226 [86] per Gummow, Hayne, Heydon and Crennan JJ; [2010] HCA 27; see also Williams v The Commonwealth (2012) 248 CLR 156 at 227–228 [123] per Gummow and Bell JJ; [2012] HCA 23]. 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 [3.150]

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CPCF v Minister for Immigration and Border Protection cont. whether there was a power under s 61 539 which, absent the lawful exercise of power under the MPA, would have authorised the actions taken by the Commonwealth in this case. 544 Hayne and Bell JJ: [Hayne and Bell JJ held that s 72(4) did not authorize the plaintiff’s detention and therefore had to consider the scope of the non-statutory power.] 564 [141] The essence of the argument advanced by the Commonwealth parties about the so-called “non-statutory executive power” is best captured by Roskill LJ in Laker Airways Ltd v Department of 565 Trade [[1977] QB 643 at 719], when his Lordship asked “can the Crown, having failed to enter through the front door … enter through the back door and in effect achieve the same result by that means of entry”? In this case the Commonwealth parties submitted that if what was done was not authorised by the MP Act, they could enter through what amounts to the back door of the so-called “non-statutory executive power” and achieve the same result by that means of entry. It is greatly to be doubted that the MP Act, and s 5 in particular, should be read as permitting so strange a result. Rather, it is probable that s 5 of the MP Act should be read as saying no more than that no negative inference should be drawn about the ambit of executive power from the enactment of the MP Act. And that would be a construction of s 5 which would sit more easily with s 3 providing that the MP Act binds the Crown in each of its capacities. For the reasons that follow, however, it is not necessary to decide this question. [142] Consideration of whether some non-statutory executive power of the Commonwealth could authorise the detention of the plaintiff on board the Commonwealth ship must begin with a clear identification of the content of the question that is asked. The question is not asking about whether a power exists or what the extent of that power may be. The relevant question is much narrower and more focused. It is whether the exercise of a power (described no more precisely than as a “non-statutory executive power”) justified what otherwise would be a false imprisonment and any associated trespass to the person. [143] This being the relevant question, it is not useful to begin by asking what power Australia as a nation, or the Executive government in particular, has to regulate the arrival of aliens within Australian territory. Nor is it useful to appeal, as so much of this aspect of the argument on behalf of the Commonwealth parties did, to notions of “the defence and protection of the nation” [[2014] HCATrans 228 at 6625-6626, 6647]. Arguments beginning in those ideas depend ultimately on assertion [Selway, “All at Sea – Constitutional Assumptions and ’The Executive Power of the Commonwealth’”, (2003) 31 Federal Law Review 495]: that the government of the nation must have the power to regulate who enters the nation’s territory and must have the power to repel those who seek to do so without authority. But even if it were to be accepted that it is necessary or appropriate (or even, if relevant, convenient) that the government have such a power, observations of that kind would not answer the questions [Winterton, Parliament, the Executive and the Governor-General, (1983) at 29-30; Evans, “The Rule of Law, Constitutionalism and the MV Tampa”, (2002) 13 Public Law Review 94 at 97; Zines, “The Inherent Executive Power of the Commonwealth”, (2005) 16 Public Law Review 279 at 281, 291-292] about the scope of the power and the organ 566 or organs of government which must exercise it. And no matter whether those assertions are said to be rooted in the royal prerogative or said to inhere in the notion of the executive power of the Commonwealth vested by s 61 of the Constitution in the Queen and “exercisable by the Governor-General as the Queen’s representative”, they remain assertions about a capacity to project force at, or in this case beyond, the geographical boundaries of the nation. Those assertions can then be tested only by resort to notions of “sovereignty” [cf H W R Wade, “The Basis of Legal Sovereignty”, [1955] Cambridge Law Journal 172; R v Kidman (1915) 20 CLR 425 at 436 per Griffith CJ; [1915] HCA 58] and “jurisdiction” [Baxter v Commissioners of Taxation (NSW) (1907) 4 CLR 1087 at 1142 per Isaacs J; [1907] HCA 76; Lipohar v The Queen (1999) 200 CLR 485 at 516-517 [78]-[79] per Gaudron, Gummow and Hayne JJ; [1999] HCA 65], which all too often are used to mask deeper questions about their meaning and application. [144] What is presently in issue is whether the so-called “non-statutory executive power” provides an answer to a claim made in an Australian court that officers of the Commonwealth committed a tort 226

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CPCF v Minister for Immigration and Border Protection cont. against the plaintiff. That is, the Commonwealth parties seek to assert that the plaintiff’s claim for damages for wrongful imprisonment is met by saying that his detention was an exercise of a species of executive power. [Hayne and Bell JJ concluded that Australian law applied to that claim in tort.] 567 [147] Accordingly, the immediately relevant question is whether, under Australian law, the Commonwealth may meet a claim for wrongful imprisonment by saying only that the detention was effected by officers of the Commonwealth in pursuance of instructions given by the Executive government to prevent the persons concerned entering Australian territory without a visa. Does the executive power of the Commonwealth of itself provide legal authority for an officer of the Commonwealth to detain a person and thus commit a trespass? [148] That question must be answered “No”. It is enough to repeat what was said in Chu Kheng Lim v Minister for Immigration [(1992) 176 CLR 1 at 19 per Brennan, Deane and Dawson JJ; [1992] HCA 64]: “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 [See, generally, Kioa v West (1985) 159 CLR 550 at 631; [1985] HCA 81; Ex parte Lo Pak (1888) 9 LR (NSW) 221 at 244-245; Ex parte Walsh and Johnson; In re Yates (1925) 37 CLR 36 at 79-80; [1925] HCA 53; Re Bolton; Ex parte Beane (1987) 162 CLR 514 at 528-529; [1987] HCA 12]. 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) [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 568 there, or treating [cf Ruddock v Vadarlis (2001) 110 FCR 491 at 543 [195], 544 [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 [Entick v Carrington (1765) 2 Wils KB 275 at 291 [95 ER 807 at 817]] 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 [Pape v Federal Commissioner of Taxation (2009) 238 CLR 1; [2009] HCA 23] 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. [Crennan J held that the detention of the plaintiff was authorised under s 72(4) of the Act and was lawful and therefore did not consider the non-statutory power.] Kiefel J: [Like Hayne and Bell JJ, Kiefel J held that s 72(4) did not authorize the plaintiff’s detention and therefore had to consider the scope of the non-statutory power.] 595 [259] [Section 61] is identified as the source of the Commonwealth executive power. It has been observed on many occasions that the terms of s 61 do not offer much assistance in resolving questions as to the scope of executive power. The Commonwealth defendants say that the scope of this power is informed by the prerogative powers of the Crown. The power contended for is characterised by the Commonwealth defendants as the power to exclude and expel an alien from Australia’s territory and [3.150]

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CPCF v Minister for Immigration and Border Protection cont. return the alien to the country from which the alien entered. The power to expel is said to carry with it the power to do all things necessary to 596 make the exercise of the power effective, including restraining the person outside Australia’s territory. [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 [Pape v Federal Commissioner of Taxation (2009) 238 CLR 1; [2009] HCA 23]. 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 [[1906] AC 542 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 “Alien Labour Act” [Dominion statute 60 & 61 Vict, c 11, as amended by 1 Edw 7, c 13, s 13], 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 extra-territorial action. [263] Lord Atkinson reasoned that the Crown of Great Britain became possessed of all executive and legislative powers within Canada and its 597 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 at 400, 404-405; [1906] HCA 58; see also Chu Kheng Lim v Minister for Immigration (1992) 176 CLR 1 at 29-30; [1992] HCA 64], referred to Cain. His Honour also referred [Robtelmes v Brenan (1906) 4 CLR 395 at 402] to the statement in Nishimura Ekiu v United States [142 US 651 at 659 (1892)], that “[i]t is an accepted maxim of international law, that every sovereign nation has the power, as inherent in sovereignty … to forbid the entrance of foreigners”. In Chu Kheng Lim v Minister for Immigration [(1992) 176 CLR 1 at 29-30], 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 228

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CPCF v Minister for Immigration and Border Protection cont. 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 [(2001) 110 FCR 491 at 495-501 [4]-[29]] demonstrates. [Her Honour briefly discussed Ex parte Lo Pak [(1888) 9 NSWR 221 at 237 and Toy v Musgrove [(1888) 14 VLR 349 at 423-425].] Other texts and dicta referred to by Black CJ in Ruddock v Vadarlis are to similar effect. [269] In Robtelmes, Griffith CJ said that he did not understand the power of expulsion of which Cain spoke, in the context of nations, to be denied by “eminent statesmen and lawyers”. What was denied, his Honour said, was “the right or power of the Executive Government, in the absence of any legislative provision, to exercise what was called the prerogative right of the Crown for that purpose.” [Robtelmes v Brenan (1906) 4 CLR 395 at 400-401] His Honour later added [Robtelmes v Brenan (1906) 4 CLR 395 at 403]: “I doubt whether the Executive authority of Australia … could deport an alien except under the conditions authorized by some Statute”. [270] The common law of Australia has maintained a like approach to the suggestion that the Commonwealth Executive has an inherent power to deport [Ex parte Walsh and Johnson; In re Yates (1925) 37 CLR 36; [1925] HCA 53 at 79, 122, 139 (CLR)] or extradite persons. 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 [Re Bolton; Ex parte Beane (1987) 162 CLR 514 at 521 per Brennan J; [1987] HCA 12]. In Barton v The Commonwealth [(1974) 131 CLR 477 at 483; [1974] HCA 20], Barwick CJ said that: 599 In the common law countries, statutory authority is necessary for the surrender of a person to another country and to provide for custody and conveyance. [271] That the position of the Commonwealth Executive respecting the exercise of the powers here in question was generally regarded to be, at the least, doubtful may explain why the Commonwealth Parliament has legislated on these topics since Federation – from the Immigration Restriction Act 1901 (Cth) to the current Migration Act – and indeed why the MP Act contains such powers. [272] In the joint judgment in Lim [(1992) 176 CLR 1 at 30-31], Brennan, Deane and Dawson JJ were able to say: In this Court, it has been consistently recognized that the power of the Parliament to make laws with respect to aliens includes not only the power to make laws providing for the expulsion or deportation of aliens by the Executive but extends to authorizing the Executive to restrain an alien in custody to the extent necessary to make the deportation effective. [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 [Chu Kheng Lim v Minister for Immigration (1992) 176 CLR 1 at 32 per Brennan, Deane and Dawson JJ, see also at 10 per Mason CJ agreeing]. Lim also holds [Chu Kheng Lim v Minister for Immigration (1992) 176 CLR 1 at 19, 63; see also Al-Kateb v Godwin (2004) 219 CLR 562 at 604 [110] per Gummow J; [2004] HCA 37] 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. [274] The Commonwealth defendants sought to derive assistance from another passage from Cain and what was said about it in Lim. Lord Atkinson had referred [Attorney-General for Canada v Cain [1906] AC 542 at 546] to methods of delegation of the powers in question – by proclamation, Imperial statute or local statute to which the Crown assented – to the Governor or the Government of a Colony. His Lordship went on to say that if that delegation had taken place “the depositary or depositaries of the executive and legislative powers and authority of the Crown can exercise those powers”. 600 [275] It was said in Lim [(1992) 176 CLR 1 at 30] that the words just quoted indicate that the power to expel or deport an alien, and the associated power to confine under restraint, were seen as “prima facie executive in character”. In the context of Lim and the issue concerning Ch III of the [3.150]

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CPCF v Minister for Immigration and Border Protection cont. Constitution, the identification of the powers as executive in character served to distinguish the nature and purpose of those powers from the power of detention which is part of judicial power. It is apparent from the reasons of the joint judgment, and those of Mason CJ agreeing, that the character of the executive powers is derived from the statutory authority provided. [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 in the same way as Defence Force service tribunals, which are constituted by Commonwealth officers [Haskins v The Commonwealth (2011) 244 CLR 22; [2011] HCA 28 at 44 [56] (CLR)] and may be conducted outside Australia [See for instance Defence Force Discipline Act 1982 (Cth), s 136(b)], are. The statements of Rich J in R v Bevan; Ex parte Elias and Gordon [(1942) 66 CLR 452; [1942] HCA 12 at 462 (CLR)] imply that his Honour considered that navy personnel on naval vessels on the high seas would have been treated as Commonwealth officers, to whom s 75(v) applied, had they not been transferred with Commonwealth naval vessels to the King’s naval forces. [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. [278] In Cain, Lord Atkinson observed [Attorney-General for Canada v Cain [1906] AC 542 at 545-546] that the Crown remained possessed of its powers “save so far as it has since parted with [them] by legislation, royal proclamation, or voluntary grant”. And in Barton [(1974) 131 CLR 477 at 484], Barwick CJ said that, where statutory authority exists, the Crown prerogative, “if it existed before such legislation, has clearly been superseded.” [279] What was spoken of on each of these occasions was the constitutional principle that any 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 601 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 [Attorney-General v De Keyser’s Royal Hotel Ltd [1920] AC 508 at 575 per Lord Parmoor; see also at 526 per Lord Dunedin, 539-540 per Lord Atkinson, 554 per Lord Moulton, 561 per Lord Sumner; Jarratt v Commissioner of Police (NSW) (2005) 224 CLR 44; [2005] HCA 50 at 69-70 [85] (CLR); Northern Territory v Arnhem Land Aboriginal Land Trust (2008) 236 CLR 24; [2008] HCA 29 at 58 [27] (CLR)]. [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 MP Act above, that the MP 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 MP Act. It would be difficult for them to do so. [281] The Commonwealth defendants submit that s 5 of the MP 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 [Momcilovic v The Queen (2011) 245 CLR 1; [2011] HCA 34 at 74 [111]-[112], 133-134 [315], 141 [341], 235 [638] (CLR)]. Consistently with this observation, in John Holland Pty Ltd v Victorian Workcover Authority [(2009) 239 CLR 518; [2009] HCA 45 at 527 [20] (CLR)], this Court said, of a statement in a Commonwealth statute to the effect that the statute is intended to apply to the exclusion of laws of the States or Territories where they dealt with a particular subject matter and class of persons, that: 230

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CPCF v Minister for Immigration and Border Protection cont. such a statement is only a statement of intention which informs the construction of the Act as a whole. It must be an intention which the substantive provisions of the Act are capable of supporting. [283] It can hardly be said that a statute such as the MP 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 602 with the MP Act provisions. Such a construction would be consistent with s 3 of the MP 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 [Attorney-General v De Keyser’s Royal Hotel Ltd [1920] AC 508 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 at 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. [285] The source of the relevant powers, of detention and removal of the plaintiff to a place outside Australia, is the MP Act and their exercise is subject to its conditions. Keane J: [Keane J held that detention was authorized by s 72(4) of the Act. Nonetheless, he went on to “note the deficiencies in the plaintiff’s arguments” in relation to non-statutory executive power.] 647 [477] The plaintiff advanced three arguments with respect to the exercise of non-statutory executive power to prevent non-citizens from entering Australia. He argued, first, that such a power does not exist; secondly, that if it does, it was abrogated by the Act; and thirdly, that even if it were not abrogated, the power did not permit the plaintiff to be detained for the purpose of being taken to India. These arguments may now be addressed in turn. A want of executive power [478] The plaintiff contended that the Commonwealth lacks non-statutory executive power to prevent non-citizens entering Australia and to detain them for that purpose. This contention cannot be accepted. … [He referred to Robtelmes v Brenan (1906) 4 CLR 395 and Ruddock v Vadarlis (2001) 110 FCR 491, especially per French J, as supporting the existence of analogous non-statutory powers.] 648 [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.” [Ruddock v Vadarlis (2001) 110 FCR 491 at 544 [197]] That power necessarily includes the power to do all things necessary to exercise the power, including physically restraining non-citizens from entering Australia [Attorney-General for Canada v Cain [1906] AC 542 at 546; Ruddock v Vadarlis (2001) 110 FCR 491 at 544 [197]]. 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 [(1992) 176 CLR 1 at 19], 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 [R v Kidman (1915) 20 CLR 425; [1915] HCA 58 at 440-441 (CLR); Barton v The Commonwealth (1974) 131 CLR 477; [1974] HCA 20 at 498 (CLR); Davis v The Commonwealth (1988) 166 CLR 79; [1988] HCA 63 at 109-110 (CLR); Re Residential Tenancies Tribunal (NSW); Ex parte Defence Housing Authority (1997) 190 CLR 410; [1997] HCA 36 at 464 (CLR); Williams v The Commonwealth (2012) 248 CLR 156; [2012] HCA 23 at 184 [22], 190 [31] (CLR)]. Moreover, it is not in doubt that the executive power referred to in s 61 of the 649 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 [Barton v The Commonwealth (1974) 131 CLR 477 at 505; Pape v Federal Commissioner [3.150]

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CPCF v Minister for Immigration and Border Protection cont. of Taxation (2009) 238 CLR 1; [2009] HCA 23 at 61-63 [130]-[131], 89 [233] (CLR)]. 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 [Moore, Act of State in English Law, (1906) at 93-95]. [485] It is also to be noted that the power exercised by the Executive to instruct maritime officers to take the plaintiff to India was not exercised in respect of a vessel going about its lawful occasions, but in respect of a vessel in Australia’s contiguous zone carrying non-citizens who were, as a matter of undisputed fact, seeking to enter Australia contrary to s 42 of the Migration Act. If the Indian vessel had completed its voyage, those operating it would have contravened the provisions of s 229 of the Migration Act (which proscribes the carriage to Australia of non-citizens without visas), and s 233A or s 233C (which proscribe forms of people smuggling). The power of the Executive government was exercised in the pursuit of a policy which accords with the purposes of Migration Actss 31 and 32 of the Act to ensure compliance with Australian law by preventing a contravention of s 42 of the Migration Act. [486] It may be accepted, for the sake of argument, that the exercise of executive power to prevent the entry into Australia of a non-citizen without a visa was subject to constraints under public law principles which ensure that administrative action is lawful. In particular, it may be accepted that, even though the plaintiff had no right to enter Australia, a decision to exercise a greater level of compulsion than was necessary to prevent his entry into Australia would be unlawful at common law. However, as noted above, the facts agreed in the Special Case do not support the conclusion that the movement of the plaintiff towards India involved the use of force in excess of what was necessary to ensure that the plaintiff did not complete his travel to Australia. [487] The plaintiff had come from India, where there was no suggestion that he was unsafe. No other destination, other than Australia, is identified in the Special Case as a place to which the plaintiff might safely be taken. There was no suggestion that the decision that the plaintiff should be taken to India was made with a view to prolonging 650 his detention beyond that necessary to return him safely to a place other than Australia. There was no suggestion that any attempt to negotiate an agreement with the Indian authorities to permit the plaintiff to disembark in India was so devoid of prospects as to be a waste of time. To decide, in these circumstances, that the best way to shorten the duration of the plaintiff’s detention, other than by bringing him directly to Australia, was to take him to India and to seek to negotiate an agreement that he be received at that destination cannot be said to involve use of the power of the Executive government in excess of what was necessary to prevent the plaintiff’s entry into Australia. [Keane J went on to conclude that Ruddock v Vadarlis, (2001) 110 FCR 491 at 514 [94], 545 [202] correctly decided that the Migration Act did not abrogate the relevant executive power.]

[3.155]

Notes&Questions

The facts of Plaintiff M68/2015 v Minister for Immigration and Border Protection [2016] HCA 1; (2016) 257 CLR 42 are set out briefly at [3.20]. Most members of the court did not need to consider the non-statutory executive power to detain asylum seekers on Nauru. Gageler J wrote: 105 [159] The inability of the Executive Government of the Commonwealth to authorise or enforce a deprivation of liberty is not simply the consequence of the absence of any prerogative power on the part of the Executive Government to dispense with the operation of the common law. It is the consequence of an inherent constitutional incapacity which is commensurate with the availability, long settled at the time of the establishment of the Commonwealth, of habeas corpus to compel release from any executive detention not affirmatively authorised by statute. 232

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[160] As succinctly explained by Hogg, Monahan and Wright [Hogg, Monahan and Wright, Liability of the Crown, 4th ed (2011) at 62]: [T]here is no Crown immunity from habeas corpus, despite the fact that, like the other prerogative remedies, habeas corpus takes the form of a command by the Queen. It is obviously vital to the effectiveness of the writ that it be available against ministers and Crown servants, even when they are not persona designata. [161] The Executive Government and any officer or agent of the Executive Government acting in the ostensible exercise of his or her de facto authority is always amenable to habeas corpus under s 75(iii) of the Constitution [R v Davey; Ex parte Freer (1936) 56 CLR 381; [1936] HCA 58 at 384-385 (CLR); at 384-385 (CLR); Chu Kheng Lim v Minister for Immigration, Local Government and Ethnic Affairs (1992) 176 CLR 1 at 20]. Habeas corpus is in addition available as an incident of the exercise of the jurisdiction of the High Court under s 75(v) of the Constitution in any matter in which mandamus, prohibition or an injunction is bona fide claimed against any officer of the Commonwealth Cf [Re Refugee Review Tribunal; Ex parte Aala (2000) 204 CLR 82 at 90-91 [14]]. [162] That inherent constitutional incapacity of the Executive Government of the Commonwealth to authorise or enforce a deprivation of liberty is a limitation on the depth of the non-prerogative non-statutory executive 106 power of the Commonwealth conferred by s 61 of the Constitution. As such, it cannot be removed by a law enacted by the Parliament of any State: “from its very nature” it must be outside the legislative power of a State to alter [Cf In re Foreman & Sons Pty Ltd; Uther v Federal Commissioner of Taxation (1947) 74 CLR 508 at 531; [1947] HCA 45; The Commonwealth v Cigamatic Pty Ltd (In Liq) (1962) 108 CLR 372 at 377-378; [1962] HCA 40; Re Residential Tenancies Tribunal (NSW); Ex parte Defence Housing Authority (1997) 190 CLR 410 at 439]. Nor can the inherent constitutional incapacity be removed by a law enacted by the Commonwealth Parliament under s 51(xxxix) of the Constitution; it is not “incidental to the execution” of executive power to change an inherent characteristic of that power [Davis v The Commonwealth (1988) 166 CLR 79 at 111-112]. It need hardly be said that the inherent constitutional incapacity cannot be removed by a law of another country. [163] The Commonwealth Parliament can, consistently with s 61 of the Constitution, confer a statutory power or authority to detain on the Executive Government. In addition to finding an available head of Commonwealth legislative power, any Commonwealth law conferring such a power or authority must pass muster under Ch III of the Constitution. [164] The extent of the inherent constitutional incapacity of the Executive Government of the Commonwealth to authorise or enforce a deprivation of liberty can be discerned for the purposes of the present case in the extent of its amenability to habeas corpus. There is no suggestion in the present case of the applicability of any prerogative to detain (using “prerogative” in the strict and narrow sense in which it had been used by Blackstone and adopted by Brennan J), such as that which might arise in relation to enemy aliens in time of war [Cf Chu Kheng Lim v Minister for Immigration, Local Government and Ethnic Affairs (1992) 176 CLR 1 at 19], or which might be argued to arise as an incident of a prerogative power to prevent an alien from entering Australia [Cf CPCF v Minister for Immigration and Border Protection (2015) 89 ALJR 207 at 239-240 [148]-[150], 255-258 [259]-[276], 284-286 [478]-[492]; 316 ALR 1 at 39-40, 60-64, 101-104; [2015] HCA 1].

EXECUTIVE ACCOUNTABILITY THROUGH THE PRINCIPLES OF RESPONSIBLE GOVERNMENT The principles of responsible government [3.160] Because of the way that the cases have developed in Australia, it is useful to consider the principles of responsible government before considering the second and third controversial set of non-statutory powers, those relating to the capacities of the executive government and the “nationhood”-derived powers. [3.160]

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Lange v ABC [3.170] Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 557–559 [The facts of this case are outlined at [11.60].] Brennan CJ, Dawson, Toohey, Gaudron, McHugh, Gummow and Kirby JJ: [The Court referred to the provisions of Chapter I of the Constitution which “557 give effect to the purpose of self-government by providing for the fundamental features of representative government” and continued as follows.] 558 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” [Dignan (1931) 46 CLR 73 at 114]. Thus, s 6 of the Constitution requires that there be a session of the Parliament at least once in every year, so that twelve 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 [Northern Suburbs General Cemetery Reserve Trust v Commonwealth (1993) 176 CLR 555 at 572–573, 580–581, 590–591, 597–598]. 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” [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 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 559 chamber of the Parliament to summon witnesses, or to require the production of documents, under pain of punishment for contempt [See R v Richards; Ex parte Fitzpatrick and Browne (1955) 92 CLR 157]. 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 [(1896), p 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), pp 319, 337-339.]

[3.180]

Notes&Questions

1.

Contrast systems of responsible government, in which the executive government is chosen from and accountable to the legislature, with other systems (including most presidential systems) in which these links are absent or attenuated. See P Craig and A Tomkins (eds), The Executive and Public Law: Power and Accountability in Comparative Perspective (Oxford University Press, Oxford, 2006).

2.

Under a system of responsible government, the government must enjoy the confidence of the lower House (in the Australian case, the House of Representatives), that is, the lower house must support the government in votes that are identified as “matters of confidence”. The two most important of these are the annual budget bills (referred to as

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“supply” – the annual vote of resources that the government needs to operate) and “no confidence motions” (motions recording that the government does not enjoy the confidence of the House). The conventions of responsible government require that a government, upon losing such a vote, must resign and advise the Governor-General to appoint another government that does enjoy the confidence of the House, or alternatively, an election must be called. See B C Wright (ed), House of Representatives Practice (6th ed, APH, Canberra, 2012), pp 321ff. 3.

4.

5.

6.

The Australian system of responsible government is complicated by the existence of the Senate which, in contrast to the House of Lords, is democratically chosen and therefore (in some senses) represents of “the people”, and also (in some senses) represents the States. See Egan v Wills (1998) 195 CLR 424 (extracted at [3.190]) for discussion of the role of the upper house in holding government to account. See Williams v Commonwealth (2012) 248 CLR 156; [2012] HCA 23 (extracted at [3.370]ff) for discussion of the role of the Senate in considering and approving government expenditure. The Whitlam government was dismissed by the Governor-General in November 1975 when the opposition-controlled Senate failed to grant supply to the government, even though the government maintained the confidence of the House of Representatives. The propriety of the Governor-General’s actions (and those of the opposition) have been intensely debated ever since and form an important consideration in design of any republican form of government for Australia. See, eg, G Winterton, Monarchy to Republic: Australian Republican Government (rev ed, Oxford University Press, Melbourne, 1994) and G Winterton (ed), We the People (Allen and Unwin, Sydney, 1994); P A Gerangelos, “The Executive” in Aroney et al, The Constitution of the Commonwealth of Australia: History, Principle and Interpretation (Cambridge University Press, 2015) p 413-416). The Houses “consider and express opinions on the conduct” of government through mechanisms such as question time (when questions are addressed to Ministers) and the various committees of the Houses (which can compel Ministers and public servants to attend and answer questions, with some exceptions). For discussion see S Evans, “Continuity and Flexibility: Executive Power in Australia” in Craig and Tomkins (2006), p 52. One of the core principles of responsible government, “collective responsibility”, links (a) the relationship between the Queen (in whom executive power is vested by s 61) and the Governor-General (her representative by whom it is exercisable under s 61) on the one hand and the Ministers of State and their Departments on the other hand with (b) the relationship between the Ministers of State and their Departments on the one hand and the Parliament on the other hand. Under a system of responsible government, the Crown (the Queen or her representative) exercises executive power only on the advice of Ministers who are responsible to Parliament. The Crown has no independent discretion (apart from the small set of so-called “reserve powers”, discussed in the next part). Ministers are collectively responsible to the Parliament for the advice provided to the Crown. This leads to principles of cabinet solidarity (Ministers provide unified advice to the Crown and do not disagree in public) and cabinet secrecy: see [3.210]. It also leads to collective responsibility of Ministers to Parliament. Ministers share responsibility for their advice and a resolution of the House of Representatives expressing “no confidence” in the government requires them all to resign as Ministers. This is to be distinguished from individual responsibility of Ministers. Under this principle Ministers are individually responsible to Parliament for the administration of their Departments, including the conduct of Departmental staff. In principle, they must [3.180]

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resign if they lose the confidence of the House. In reality, Ministers resign when necessary to limit political fallout, when there is personal misconduct, when they no longer support government policy or when there is conspicuous failure to supervise their Department. See S Evans, “Continuity and Flexibility: Executive Power in Australia” in Craig and Tomkins (2006), p 52. 7.

The principles of responsible government are usually characterized as “constitutional conventions”, meaning that they reflect constitutional practice that is (or ought to be) regarded as binding by the participants. Their precise nature remains elusive: see G Marshall, “What are Constitutional Conventions?” (1985) 38 Parliamentary Affairs 33. One key question is the extent to which they can be used as sources of law or used to resolve uncertainties in existing law. See the discussion of cabinet secrecy at [3.210]. Related conventions include those governing the exercise of reserve powers by the Governor-General, including whom she should ask to form a government after a election and whether she is bound to agree to a Prime Minister’s advice that she should dissolve the House of Representatives or both houses. Their content can be elusive, since they are uncodified reflections of evolving practices, crystallised only rarely in actual controversies and loosely anchored in principles that might give them shape. The Final Report of the Constitutional Commission (1988) Ch 5 recommended that the Constitution be amended to make clear that most of the powers vested in the Governor-General should be exercisable only on Ministerial advice and to guide the Governor-General’s power to appoint and dismiss the Prime Minister; it did not make recommendations about whether the Parliament should legislate to guide the exercise of the reserve powers. In 1999, the proposed constitutional amendment to establish an Australian republic included a provision that the amendment “does not prevent the evolution of the constitutional conventions relating to the exercise of the reserve powers [vested in the President by the proposed] section 59 of this Constitution”: Constitution Alteration (Establishment of Republic) Bill 1999, Sched 2, cl 8. (Proposed s 59 provided in part that “the President may exercise a power that was a reserve power of the Governor-General in accordance with the constitutional conventions relating to the exercise of that power”.) For earlier commentary see G Winterton, “Reserve Powers in an Australian Republic” (1993) 12 University of Tasmania Law Review 249.

8.

In Lange, the High Court concluded (at 561), that “those provisions which prescribe the system of responsible government necessarily imply a limitation on legislative and executive power to deny the electors and their representatives information concerning the conduct of the executive branch of government throughout the life of a federal Parliament”. This results in a partial entrenchment of uncertain scope of some aspects of the principles of responsible government. Bennett v President, Human Rights and Equal Opportunity Commission (2003) 134 FCR 334 concerned a challenge a public sector secrecy regulation that provided that a public sector employee “must not, except in the course of his or her duties … or with the Agency Head’s express authority, give or disclose, directly or indirectly, any information about public business or anything of which the employee has official knowledge.” Finn J held that the regulation was invalid, notwithstanding that it could be said to serve the interest in the effective working of government, because it was not reasonably appropriate and adapted to achieving that end: “its ambit is such that even the most scrupulous public servant would find it imposes ‘an almost impossible demand’ in domestic, social and work-related settings. … The dimensions of control it imposes impedes quite unreasonably the possible flow of information to the community – information which, without possibly prejudicing the interests of the Commonwealth, could only serve to

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enlarge the public’s knowledge and understanding of the operation, practices and policies of executive government.” Contrast R v Goreng Goreng (2008) 220 FLR 21. 9.

For a discussion of the precise constitutional status of the responsible government, see the discussion at Chapter 1 [1.190]-[1.230], in particular the extracts from the writings of Professors Winterton and Lindell where it is suggested that some, at least, of the principles of responsible government may be constitutionally entrenched. Referring to these writings, Professor Zines noted (in The High Court and the Constitution (6th ed, 2015), pp 369-370): It was held in Nationwide News v Wills (1992) 177 CLR 1 and Australian Capital Television Pty Ltd v Commonwealth (1992) 177 CLR 106 that the institution of responsible government was prescribed by the Constitution and that, as a consequence, there was a constitutional implication of freedom of communication on matters of public affairs. That principle was affirmed in Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 …. The constitutional recognition of representative and responsible government has more recently been used by the High Court in Pape v Federal Commissioner of Taxation [(2009) 238 CLR 1], Williams v Commonwealth (Williams (No 1)) [(2012) 248 CLR 156] and Williams v Commonwealth (Williams (No 2)) [(2014) 252 CLR 416] … It would seem to follow that the rules, derived from constitutional convention, which are designed to ensure that the will of the people’s representatives, and ultimately that of the people themselves, is made effective will also be seen as rules of law implied in the Constitution. That would include those rules that generally require the Governor-General to follow the advice of ministers and to choose ministers that have the confidence of the House of Representatives. This would not deny the discretion given to the Governor-General in respect of “reserve powers”. It might however produce an argument that such a power is subject to judicial review because it was granted by the Constitution for the purposes of furthering representative government. At any rate, if representative government is constitutionally required, it could hardly exist if the powers granted to the Governor-General were exercised regardless of rules that have developed from British constitutional conventions. It would seem to follow that they are, to that extent, legally enforceable. Even before the cases referred to above, Professor Winterton supported that view (G Winterton, Parliament, the Executive and the Governor-General (1983), pp 2, 80, 273). It was also stated in the Final Report of the Constitutional Commission as an “alternative view”, that is, alternative to the traditional view that the relevant rules rest on convention and not constitutional law. It is true that conventions vary in their strength; some are not clearly formulated and give rise to dispute. There can also be argument as to whether a regular practice has become constitutional convention. Many of the rules, however, regarding the obligation of the Governor-General to follow advice are clear and binding. It is these that are basic to representative and responsible government. The reasoning in the “freedom of communication” cases and in the Williams decisions seems to require that they be treated as rules of law.

10.

Professor Geoffrey Lindell in Responsible Government and the Australian Constitution – Conventions Transformed into Law? (Federation Press, Sydney, 2004) (extracted Chapter 1 at [1.270]) has indicated that following the cases mentioned by Professor Zines, he now tends to concur with the position taken by Professor Winterton that some principles, at least, of responsible government may be entrenched and may thus be judicially enforceable. (Consider, however, whether entrenchment entails judicial enforceability.) Lindell noted (pp 5-6) that: [t]he objection based on the loss of the dynamic character of conventional rules has been partially met by the High Court’s emphasising that the concept is dynamic and capable of evolving. Thus, in Egan v Willis ((1998) 195 CLR 424 at 451 [41] per [3.180]

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Gaudron, Gummow and Hayne and see also similar remarks in Re Patterson; Ex parte Taylor (2000) 207 CLR 391 at 403 [17] per Gleeson CJ, 460 [212] per Gummow and Hayne JJ) three justices said: “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 New South Wales after 1855 necessarily reflected closely those from time to time accepted at Westminster.” I suggest that what was said about New South Wales is equally applicable to the Australian Constitution at the date of its adoption. If that was not the case, the same Constitution would have the effect of freezing into our constitutional arrangements dated understandings of ministerial responsibility. An example of this would be the notion of public servants being seen as only “accountable to the public through the accountability of ministers and cabinet to parliament”. The potential for that flexibility is further underlined by the remarks of Gleeson CJ when he indicated that: “[R]esponsible government is a concept based upon a combination of law, convention, and political practice. The characteristics of responsible government are not immutable” (Re Patterson at [21]).

11.

To what extent can legal conclusions be deduced from the fact that the Constitution establishes a system of responsible government if, as the cases suggest, the principle is capable of development and its incidents are determined (at least in part) by Parliamentary practice?

Egan v Willis [3.190] Egan v Willis (1998) 195 CLR 424 at 448–456, 475–478, 501–503, 512 [The Legislative Council of the New South Wales Parliament resolved that a Minister should produce certain government documents. He declined to do so and the Council resolved to suspend him from the service of that House. The ultimate question was whether the Council had the power to do so.] Gaudron, Gummow and Hayne JJ: 448 [35] In identifying the functions of the Legislative Council of New South Wales and what is “necessary” to the “proper exercise” of those functions, it is, again, desirable to make some reference to history. [36] As Gleeson CJ said in his reasons for judgment in the Court of Appeal [Egan (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. 449 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 went on to point out that many aspects of responsible government, as it presently exists in the State, are not identified in the Constitution Act and depend upon what has come to be fixed by convention. The Chief Justice said [Egan (1996) 40 NSWLR 650 at 660]: The Constitution Act makes no reference to Cabinet. It does not refer to the conventional requirement that ministers be chosen from amongst the members of one or other of the Houses of Parliament. It does not reflect the conventional requirement 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, which is of such importance at the level of political practice. … 451 [41] 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 New South Wales after 1855 necessarily reflected closely those from time to time accepted at Westminster [Finn, “Myths of Australian Public Administration” in Power (ed), Public Administration in Australia: A Watershed (1990), p 41; Finn, Law and Government in Colonial Australia (1987), pp 11-13, 86-91, 160-165; Uhr, Deliberative Democracy in Australia (1998), pp 194-196]. 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 238

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Egan v Willis cont. to the enacting legislature [See Re Cram; Ex parte NSW Colliery Proprietors’ Association Ltd (1987) 163 CLR 117 at 126–131; Lindell, “Responsible Government” in Finn (ed), Essays on Law and Government, vol 1 (1995) 75, at pp 112-113]. [42] A system of responsible government traditionally has been considered to encompass “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” [Kinley, “Governmental Accountability in Australia and the United Kingdom: A Conceptual Analysis of the Role of Non-Parliamentary Institutions and Devices” (1995) 18 University of New South Wales Law Journal 409 at 411]. The point was made by Mill, writing in 1861, who spoke of the task of the legislature “to watch and control the government: to throw the light of publicity on its acts” [Mill, Considerations on Representative Government (1861), p 104]. 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” [Queensland, Electoral and Administrative Review Commission, Report on Review of Parliamentary Committees (October 1992), vol 1, par 2.23]. [The judgment referred to the discussion of responsible government in Lange extracted above.] 452 In Australia, s 75(v) of the 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. … 453 [43] In the United Kingdom, the responsibility or accountability of individual Ministers recently was identified in a publication by the Cabinet Office as a guide to Ministers as including [Questions of Procedure for Ministers first published by the Cabinet Office in 1992, par 27 …]: Each Minister is responsible to Parliament for the conduct of his or her Department, and for the actions carried out by the Department in pursuit of Government policies or in the discharge of responsibilities laid upon him or her as a Minister. Ministers are accountable to Parliament, in the sense that they have a duty to explain in Parliament the exercise of their powers and duties and to give an account to Parliament of what is done by them in their capacity as Ministers or by their Departments. On the other hand, the Court recently affirmed that the confidentiality of Cabinet deliberations reflects the principle of collective responsibility which “remains an important element in our system of government” [Commonwealth v Northern Land Council (1993) 176 CLR 604 at 615]. … [45] 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 of government. Another aspect of responsible government, perhaps the best known, 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, there may be much to be said for the view that it is such a state of affairs which assists the attainment of the object of responsible government of which Mill spoke in 1861. Conclusions [46] The arrangements made for New South Wales for the period following 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 in 1856 by the Legislative Council of a measure of superintendence of the conduct of the executive government by the production to it of State papers. [3.190]

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Egan v Willis cont. [47] It is not necessary to consider for the purposes of this appeal the limits involved in that superintendence. What is presently significant is the immediate interrelation between that superintendence and the lawmaking function in which the Legislative Council participates, together with the Legislative Assembly and the Crown. [48] The principle derived from the authorities and not challenged on this appeal is that the Legislative Council has such powers, privileges and immunities as are reasonably necessary for the proper exercise of its 454 functions. As Priestley JA emphasised in the Court of Appeal [Egan (1996) 40 NSWLR 650 at 692], to decide whether a particular power, here the power of suspension of a member for a limited time from the service of the House, is reasonably necessary for the Legislative Council to perform any constitutional function, it is necessary first to identify that function. [49] The primary function of the Legislative Council is indicated by s 5 of the Constitution Act. This is the exercise by the Legislative Council, as an element of the legislature, of its power, subject to the provisions of the Commonwealth Constitution, to make laws for the peace, welfare and good government of New South Wales in all cases whatsoever. … [50] … What is “reasonably necessary” at any time for the “proper exercise” of the “functions” of the Legislative Council is to be understood by reference to what, at the time in question, have come to be conventional practices established and maintained by the Legislative Council. [51] Such a position might be varied or abrogated by legislation. There has been no such legislation which is relevant to the present issue. … [52] In the Court of Appeal, Priestley JA pointed to the broad reach of the legislative power conferred by s 5 as indicating an imperative need for each chamber to have access to material which may be of help to it in considering not only the making of changes to existing laws or the enactment of new laws but, as an anterior matter, to the manner of operation of existing laws [Egan (1996) 40 NSWLR 650 at 692–693]. That anterior matter, as his Honour said, “clearly embraces the way in which the Executive Government is executing the laws” [Egan (1996) 40 NSWLR 650 at 693]. [53] Questions of privilege may arise in relation to the production of documents. No such question arises here. Reduced to its essentials, what happened in the present case involved the determination by the 455 Legislative Council to seek the provision to it by a member, who is a Minister and who “represented” another Minister in the Legislative Assembly, of State papers which, as Gleeson CJ described them, related “to matters of government business which the Council wished to debate” [Egan (1996) 40 NSWLR 650 at 653]. The appellant had in his custody and control certain documents which fell within the description of those sought in the relevant resolution. The Minister chose not to produce the papers, claiming, consistently with the position taken by the Cabinet, that the Legislative Council had no power to call for them. He was then suspended for the balance of the day’s sitting. [54] [It was not necessary to decide the limits of the power of suspension.] But one of the steps that the House may undoubtedly take is to resolve that the member be suspended for a limited time from the service of the House, and that is what happened here. [55] It was submitted that the House may not punish the member concerned but may coerce or induce compliance with its wish. To distinguish between punishing and merely inducing compliance may very well be difficult. Further, to state the distinction in these terms may distract attention from more important considerations of identifying what is the power that has been exercised and whether, or to what extent, the courts may review what has been done in Parliament. But on 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. That being so, the appeal should 456 be dismissed. We observed earlier in these reasons that we do not enter upon any question respecting par 3(b). [56] It is important to emphasise that no question arises in this case about what powers a House of the New South Wales Parliament may have to deal with persons who are not members of the House concerned. Altogether different considerations might arise in such a case. Nor does any question arise about what, if any, consequences might follow from the fact that some claim to privilege from production is made but rejected. Although these matters were canvassed in argument, it is not necessary to decide them. 240

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Egan v Willis cont. McHugh J: 475 The power of the Council to demand the tabling of documents by a Minister [102] In Stockdale, Lord Denman CJ described the House of Commons as “the grand inquest of the nation” [Stockdale (1839) 9 Ad & E 1 at 115 [112 ER 1112 at 1156]]. In Howard v Gosset [(1845) 10 QB 359 at 379 [116 ER 139 at 147]], Coleridge J said that “the Commons are, in the words of Lord Coke, 476 the general inquisitors of the realm”. These statements summarise one of the most important functions of a House in a legislature under the Westminster system, namely, that it is the function of the Houses of Parliament to obtain information as to the state of affairs in their jurisdiction so that they can, where necessary, criticise the ways in which public affairs are being administered and public money is being spent. The Crown through its Ministers governs. Under the system of responsible government, those Ministers are responsible to the Parliament. For that system to work effectively, for the Administration to retain the confidence of the Parliament, the Houses of Parliament must have access to information relating to public affairs and public finance which is in the possession of the government of the day. [103] It is true, of course, that governments are made and broken in the lower House of Parliament – in New South Wales, the Legislative Assembly. But that does not mean that the Legislative Council has no power to seek information from the government or the Minister who represents the government in the Legislative Council. It is part of the legislature of New South Wales. If it is to carry out one of the primary functions of a legislative chamber under the Westminster system, it must be entitled to seek information concerning the administration of public affairs and finances. The Legislative Council is not, as Queen Elizabeth the First thought the House of Commons was, a chamber that merely says “Aye or No” to bills presented to it [Redlich, The Procedure of the House of Commons (1908), vol 1, pp 37-38. Elizabeth’s “Chancellor answered the Speaker, Sir Edward Coke, when he made the customary request for the privileges of the House by saying, ‘Privilege of speech is granted, but you must know what privilege you have; not to speak every one what he listeth or what cometh in his brain, but your privilege is Aye or No’.”]. It is an essential part of a legislature which operates under a system of responsible government. Whether the Council can enforce a demand for the information which it seeks is another matter. [104] There was a long period in English parliamentary history when membership of the Privy Council, rather than membership of the Commons, was the source of advice to the Crown. Yet even in those days, “the right of the Commons to information on money matters was never disputed” [Redlich, The Procedure of the House of Commons (1908), vol 2, p 41] and “[a]ccording to time-honoured practice the House of Commons is entitled to demand at any time such particulars as it may want as to trade or finance or as to national or local administration, by means of a direct order” [Redlich, The Procedure of the House of Commons (1908), vol 2, p 40]. This is part of the customary law of the House of Commons and therefore part of the common law. It is the source of the Commons’ right “to summon any subject of the state as a witness, to put questions to him and to examine any memoranda in his possession” [Redlich, The Procedure of the House of Commons (1908), vol 2, p 39]. A person who 477 disobeys such an order of the House of Commons is guilty of contempt of the House. According to current doctrine, the Houses of the New South Wales legislature lack the power to punish for contempt. Absent statutory backing, they have no power to compel a witness to attend Parliament or to produce documents and no power to punish a person who refuses to produce those documents. But that is quite different from saying that they have no power to obtain information relevant to the business of the House. The power and its enforcement are distinct matters, as Dr Hearn recognised when writing of the power of the House of Commons to compel the attendance of witnesses and the production of documents [The Government of England, 2nd ed (1886), p 145]. The Legislative Council does not, in my view, exceed its powers when it seeks information from a Minister concerning the administration by the government of State affairs. [105] The seeking of information by questions directed to Ministers is of comparatively recent origin. No doubt its development was brought about by the introduction of the system of responsible government, a system that was not properly established until the passing of the Reform Act 1832 (UK). But it is an essential part of that system and was so recognised at the time of the grant of self-government in New South Wales [In 1847, only 129 questions were asked in the Commons. This [3.190]

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Egan v Willis cont. had risen to 212 by 1850 and to 699 by 1860. By 1885, the number of questions asked had risen to 3,354 and by 1901 to 6,448; (Redlich, The Procedure of the House of Commons (1908), vol 2, p 244)]. Writing in 1908, Professor Redlich said of the practice in the House of Commons [Redlich, The Procedure of the House of Commons (1908), vol 2, p 241]: [T]he ordinary questions put to the members of Government play a very important part in the proceedings of the House of Commons, and give the whole institution the great significance which it possesses. “Asking questions” is a modern method, developed by recent parliamentary practice, of supervising the general policy and the administrative acts of the Ministry. [106] In my opinion, as the result of the establishment of self-government in New South Wales, the Legislative Council and the Legislative Assembly acquired the power to seek information concerning matters of government policy and administration from Ministers. As Mahoney P pointed out in the Court of Appeal [Egan (1996) 40 NSWLR 650 at 677], “it would be extraordinary if, having a matter before it for consideration, it could not do what was necessary to inform itself about it”. As his Honour pointed out, it can obtain information in various ways – “by Committees, by consultants and by the provision of information by [478] members and others” [Egan (1996) 40 NSWLR 650 at 677]. That the power exists has been recognised by Ministers over a long period. They have recognised it by answering questions and producing documents. The Journals of the Council and Hansard, for example, show that between 1856–1857 and 1932–1933, many documents were produced in Returns to Orders for Production. Only in comparatively recent times does the existence of the power seem to have been denied. [107] Moreover, the obtaining of information concerning the administration of government is part of the business of the Council. The history of the procedures of the House of Commons and its effect upon our understanding of parliamentary procedure under the Westminster system makes it clear that it is a matter for the Council as to the way in which it conducts business and the order of its business. Sir William Holdsworth has pointed out that the right of the Commons to control its business was essential to the success of the Commons’ opposition to the Crown [A History of English Law, 2nd ed (1937), vol 6, p 100]: The privilege of deciding the order of business enabled the House to obstruct. It could decline to do anything till its grievances were redressed. Of all the great privileges of the House of Commons, none played a greater role in the Commons achieving influence than its capacity to control its own business and to set its own agenda. The view of the Tudor and Stuart monarchs was that the House of Commons was summoned only to vote on the appropriations asked of them, to approve legislation submitted to them and to express opinions on matters of policy only when asked [Holdsworth, A History of English Law, 2nd ed (1937), vol 6, p 99]. The House of Commons would not have become the powerful institution that it is if the views of those monarchs had prevailed. The importance of Parliament under the Westminster system is in no small part due to the seemingly inconsequential right of the House of Commons to control its business. The right of any legislative chamber under the Westminster system to control its business has existed for so long that it must be regarded as an essential part of its procedure which inheres in the very notion of a legislative chamber under that system. If the Legislative Council wishes to conduct its business by asking questions of Ministers of the Crown present in that Chamber, I can see nothing in parliamentary history that would deny it that right. Indeed, the whole history of parliamentary procedure supports it. Kirby J: 501 [152] Scrutinising the Executive: The appellant next objected to so much of the reasoning of the Court of Appeal as proffered a second ground for upholding the legality of the Council’s resolution. This was that, by demanding the tabling of the documents as it did, the Council was performing its lawful function of rendering the Executive Government accountable to it as an incident of the system of responsible government [Egan v Willis and Cahill (1996) 40 NSWLR 650 at 665, per Gleeson CJ; at 677, per Mahoney P]. Care must be observed in the use of the notion of “responsible government” in legal reasoning. It is a political epithet rather than a definition which specifies the precise content of constitutional requirements. As with the notion of “[representative] government”, it is possible to accept the words as a general description of a feature of constitutional arrangements in 242

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Egan v Willis cont. Australia without necessarily being able to derive from that feature precise implications which are binding in law [McGinty v Western Australia (1996) 186 CLR 140]. [153] The appellant submitted that, in the context of New South Wales, “responsible government” meant no more than that the Crown’s 502 representative acted on the advice of the Ministers and that the Ministers enjoyed the confidence of the Lower House of Parliament [The latter principle was said to derive principally from s 5A of the Constitution Act 1902 (NSW)]. From these premises, the Court was urged to accept the notion that the Executive Government was not accountable to the Council and that a member of that Government sitting in the Council could not be obliged to hand over official documents on the basis that this was necessary to make the scrutiny of Government effective. I cannot agree with these submissions. [154] It reads too much into the statutory limits on the powers of the Council [Constitution Act 1902 (NSW), ss 5, 5A, 38A] to suggest that it has no function in rendering the Executive Government accountable, through it, to the Parliament and thus to the electors of the State. This argument appears to be an attempt to put the Executive Government above Parliament, comprising as it does, two Houses. That attempt cannot succeed [Stockdale v Hansard (1839) 9 Ad & E 1 [112 ER 1112]]. The practice and Standing Orders of the Council allow for oral questioning of Ministers present in the chamber. They do so precisely to make the Council’s scrutiny of the Executive Government effective. There seems no reason in logic to limit such scrutiny to oral answers given by a Minister or to exclude the provision of written documents which are in the Minister’s possession or under his or her control and not otherwise legally exempt from production. It is by such scrutiny that the system of government established by the Constitution Act 1902 and envisaged by the Australian Constitution permits effective public debate, facilitates the democratic choice of the members of the chambers and allows periodic judgment of the government by the electors. The suggestion that only the Lower House has the power to extract documentary information from the Executive Government is not only inconsistent with the Cabinet resolution to which the appellant originally adhered. It involves a view of the accountability of the Executive Government to Parliament, including the Council, which is alien to the system of government which the Constitution Act 1902 establishes and the Australian Constitution envisages [See, eg, Lumb, The Constitutions of the Australian States, 5th ed (1991), pp 65-70; Parker, “Responsible Government in Australia” in Weller and Jaensch (eds) Responsible Government in Australia (1980), Ch 2; Uhr, Deliberative Democracy in Australia (1998), Ch 7]. [155] The reason why the accountability of Ministers in the Council is not spelt out in terms in the Constitution Act 1902 itself, or in the Standing Orders, may be that it is so fundamental to the existence of a legislative chamber in our system of government, and necessary to the performance of that Chamber’s functions as such, that it was accepted as axiomatic that, if a House of the Parliament insists and there is no lawful reason for resistance, a member, including a Minister, must [503] obey the House’s demand [cf Finn, Law and Government in Colonial Australia (1987), Ch 3; Ward, Colonial Self-Government (1976), Ch 9; Ward, “The Responsible Government Question in Victoria, South Australia and Tasmania 1851–1856”, Journal of the Royal Australian Historical Society, vol 63 (1978) 221]. Whether that is the explanation or not, the legal power of the Council to make such a demand upon the Executive Government cannot be doubted. Where the representative of the Executive Government is a member of the Council, the power of the latter to suspend that member in order to coerce him or her to comply with its demand can likewise not be doubted. To deny the Council such powers would be to destroy its effectiveness as a House of Parliament. The fact that the Executive Government is made or unmade in the Legislative Assembly, that appropriation bills must originate there and may sometimes be presented for the royal assent without the concurrence of the Council does not reduce the latter to a mere cipher or legislative charade. The Council is an elected chamber of a Parliament of a State of Australia. Its power to render the Executive Government in that State accountable, and to sanction obstruction where it occurs, is not only lawful. It is the very reason for constituting the Council as a House of Parliament [cf Finn, “Public Trust and Political Accountability” [1993] Australian Quarterly 65; Finn, “A Sovereign People, A Public Trust” in Finn (ed) Essays on Law and Government (1995), vol 1, Ch 1; Uhr, Deliberative Democracy in Australia (1998) Ch 7]. This ground of objection also fails. … [3.190]

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Egan v Willis cont. Callinan J: 512 [186] It might be suggested that the remedy for difficulties experienced by the Legislative Council arising from any failure or refusal to produce documents lies in the Council’s own hands, the rejection of such legislation as the Legislative Council is entitled to reject until the documents are produced …. However, the opportunity to avail itself of that remedy will often not be practically available, and, in any event may be far too harsh, or inappropriate in the case of unrelated legislation or legislation which should for other reasons be passed. Such a remedy may therefore have to be regarded as too imperfect, or inappropriate, to resolve difficulties associated with the withholding of relevant documents.

Notes&Questions

[3.200]

1. 2.

3.

Section 49 of the confers corresponding powers on the Senate, as these were undoubted powers of the House of Commons at the time of federation. In Egan v Chadwick (1999) 46 NSWLR 563, the New South Wales Court of Appeal subsequently held that the NSW Legislative Council had the power to compel production of documents that the Executive asserted were subject to legal professional privilege or public interest immunity. The majority held that the power did not extend to compelling production of documents where that would be inconsistent with responsible government, in particular with the principle of cabinet secrecy (discussed below), so that the Council could not compel production of documents that revealed the deliberations of Cabinet. In Egan v Willis, several members of the High Court explicitly declined to address the question whether the Council could compel attendance of members of the other House. The likely position in relation to the Senate is that it cannot compel attendance of members of the House of Representatives (and vice versa). It is controversial whether the rule is based in comity or derived from the privileges applying at Federation in the Westminster parliament (via s 49 of the Constitution). See G J Lindell, “Parliamentary Inquiries and Government Witnesses” (1995) 20 Melbourne University Law Review 383; H Evans, “The Senate’s Power to Obtain Evidence”, Papers on Parliament No 50 (March 2010); G Lindell, “Current and former Members and Ministers (and their Ministerial Staff): Immunity from Giving Evidence to Parliamentary Inquiries Established by House of Parliament in which they were not Members” (2002) 17 Australasian Parliamentary Review 111.

Cabinet secrecy and responsible government

Commonwealth v Northern Land Council [3.210] Commonwealth v Northern Land Council (1991) 30 FCR 1 at 16–21 (Full Federal Court) [In 1978, the Commonwealth and the Northern Land Council (“NLC”) executed an agreement in relation to uranium mining. The NLC brought legal proceedings seeking a declaration that the agreement was either void or had been validly set aside because of the unconscionable conduct of the Commonwealth of negotiating the agreement. In the course of the proceedings, the Commonwealth discovered various documents (that is, it disclosed the existence of documents to the Court and the other parties) that contained notes of Cabinet discussions relating to the negotiations. However, it argued that the notes were immune from production (that is, it argued that they did not have to be given to the other parties for use in the proceedings) because they were Cabinet documents and protected by principles of Cabinet secrecy. The Federal Court nonetheless ordered the Commonwealth 244

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Commonwealth v Northern Land Council cont. to produce the documents for inspection by the plaintiff’s lawyers on the condition that they did not disclose the contents of the documents to anybody else. The Commonwealth appealed to the Full Court of the Federal Court and eventually to the High Court. The following extract is from the joint judgment of the Full Court of the Federal Court.] Black CJ, Gummow and French JJ: 16 The conventional wisdom of contemporary constitutional practice presents secrecy as a necessary incident of collective responsibility. But historically it seems to have derived from the 17th century origins of the Cabinet as an inner circle of Privy Councillors, sometimes called the Cabinet Council, who acted as advisers to the Monarch. “Cabinet”, the French word for a private room set apart for interviews, reflected the concept of an inner sanctum accessible only by those advisers. The relationship of Cabinet decision-making to the tendering of advice to the Monarch or, in the Australian context, to the Governor-General in Council, may support a rationale for Cabinet secrecy. However, that basis for confidentiality has to be assessed in the light of the political imperatives of collective responsibility. Because of the secrecy that surrounded its operations, the early development of the Cabinet system is obscure: see O H Phillips, Constitutional and Administrative Law, (7th ed, 1987), p 298; Matheson, The Prime Minister and the Cabinet (1977), pp 1-2. By 1867, when Walter Bagehot published The English Constitution, and the Cabinet was established as an element of the British parliamentary system, the obscurity remained (p 68): The most curious point about the Cabinet is that so very little is known about it. The meetings are not only secret in theory, but secret in reality. By the present practice, no official minute in all ordinary cases is kept of them. Even a private note is discouraged and disliked. The House of Commons, even in its most inquisitive and turbulent moments, would scarcely permit a note of a Cabinet meeting to be read. No Minister who respected the fundamental usages of political practice would attempt to read such a note. The committee which unites the lawmaking power to the law-executing power – which, by virtue of that combination, is, while it lasts and holds together, the most powerful body in the State – is a committee wholly secret. Although not enunciated by Bagehot the principle of collective responsibility was foreshadowed in a frequently quoted anecdotal footnote to the passage just cited. At the end of a Cabinet meeting proposing a fixed duty on corn, Lord Melbourne put his back to the door and said “Now is it to lower the price of corn or isn’t it? It is not much matter which we say, but mind we must all say the same”. The concept of collective responsibility did not really emerge as an element of Cabinet government until the mid-19th century. P G Walker in The Cabinet (1970), p 30 observed that in the time of King George III ministers sometimes spoke and even voted against policies determined by the Cabinet. The trend to solidarity seems to have developed as an incident of the two-party system in England (pp 30-31): As the two-party system began to arise so the feeling grew that such 17 behaviour was improper. With the full establishment of the mass two-party system the doctrine of collective responsibility passed into the unwritten conventions of the Constitution – something that everyone took for granted. The doctrine was indeed necessary to the Cabinet from the mid-19th century onwards. Cabinet Ministers were party leaders: both their leadership and the party itself would be weakened if the leaders openly attacked one another or publicly attributed views to one another. The need for party unity and a broader public interest basis for collective responsibility was suggested by J P Mackintosh in The British Cabinet (1968), pp 520-521. There was, he said, a feeling that those working together to guide national affairs ought either to be in sufficient agreement to give genuine efficacy to collective decisions, despite differences at the formative stage, or should resign. The doctrine, of course, lies in the field of convention and conventions on one view are no more than generally accepted political practices with a record of successful application or precedent. They are: “… extra-legal rules of structure or procedure or principle, established by precedent, consolidated by usage and generally observed by all concerned.” See L F Crisp, Australian National Government (4th [3.210]

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Commonwealth v Northern Land Council cont. ed), p 352, n 5. By definition they are not rules of law. See C R Munro, “Laws and Conventions Distinguished” (1975) 91 LQR 218 at 231–234; Re Resolution to Amend the Constitution [1981] 1 SCR 753 at 774–784. Depending upon circumstances and political exigency conventions are not always applied. And they may change over time. The convention of collective responsibility has attracted an extensive literature and there are many cases cited of its application, but also cases of its waiver. Its malleability is exemplified in a statement made by the then British Prime Minister Mr Callaghan in the House of Commons in June 1977 and quoted in O Hood Phillips (at 313): “I certainly think that doctrine [collective responsibility] should apply except in cases where I announce that it does not.” The learned author of that textbook, writing in the context of British constitutional practice, suggests (p 312) that the convention has been weakening in recent years. Lord Widgery CJ in Attorney-General v Jonathan Cape Ltd; Attorney-General v Times Newspapers [1976] QB 752 at 770 found “overwhelming evidence that the doctrine of joint responsibility is generally understood and practised and equally strong evidence that it is on occasion ignored”. In Australia it has been said that the associated convention of confidentiality has been honoured more in the breach; but that contention has not gone unchallenged: M Codd, “Cabinet Operations of the Australian Government” in Galligan, Nethercote and Walsh (eds), Decision Making in Australian Government: The Cabinet and Budget Processes (1990), p 1 at p 4. Confidentiality has been described as the natural correlative of collective responsibility. It is said to be difficult for ministers to make an effective defence in public of decisions with which it is known that they have disagreed in the course of Cabinet discussions: L S Amery, The Nature of British Parliamentary Government in Parliament – A Survey, p 60. To accept that proposition is not to deny the phenomenon of the “leak” familiar to the most casual observer of the political process in both the United Kingdom and Australia and of which Walker wrote (p 34): In every Cabinet the leak will be deplored and condemned; but it is paradoxically necessary to the preservation of the doctrine of collective 18 responsibility. It is the mechanism by which the doctrine of collective responsibility is reconciled with political reality. The unattributable leak is itself a recognition and acceptance of the doctrine that members of a Cabinet do not disagree in public. And in Attorney-General v Jonathan Cape Ltd (at 770) it was said that to leak a Cabinet decision a day or so before it is officially announced is an accepted exercise in public relations, but to identify the Ministers who voted one way or another is objectionable because it undermines the doctrine of joint responsibility. Turning to judicial treatment of these issues in Australia, the concept of the Queensland Cabinet as an extra-legal shadow of the Executive Council led to disallowance of evidence of its deliberations in R v Davenport (1874) 4 QSCR 99. [Editors’ note: On appeal, however, the Privy Council referred without evident concern to the deliberations of the Cabinet.] … The approach taken by the Privy Council was inconsistent with a simplistic application of the proposition that Cabinet is not known to the law: E M Campbell, “Ministerial Privileges” (1959) 1 Tasmanian University Law Review 263 at 272–273. Professor Sawer has cautioned that the proposition cannot be carried too far but has accepted that: … when a legal issue is substantially one of fact, in which acts of the government as a collective person with knowledge and intention become relevant, there seems no reason why Cabinet proceedings should not be proved in a relevant case; … Questions whether a Minister had 19 authority to negotiate or vary a contract binding the Crown, and had in fact done so, might provide examples as well as the waiver or estoppel type of problem illustrated by Davenport’s case. See Sawer, “Councils Ministers and Cabinets in Australia” [1956] Public Law 110 at 116. See also New South Wales v Bardolph (1934) 52 CLR 455 at 462, per Evatt J at trial. The nature of the Cabinet and its responsibility to Parliament were characterised in Toy v Musgrove (1888) 14 VLR 349 at 391, per Higinbotham CJ as “unrecognised facts” of the English Constitution. A Minister advising the Crown was seen as “privileged with respect to the advice given by him” and 246

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Commonwealth v Northern Land Council cont. would not be compelled to disclose it in a court of law – Toy v Musgrove, per Higinbotham CJ (at 374) and per Kerferd J (at 412). The link between the political role of Cabinet and the substantive role of the Governor in Council was addressed by Street J in Attorney-General (NSW) v Williams (1913) 13 SR (NSW) 295 at 316 when he described the constitutional function of Cabinet as being to advise and not to act. If action were to be taken or orders given in accordance with advice, this must be done by the Governor in Council. At Federation, s 61 of the Constitution vested the executive power of the Commonwealth in the Queen and provided that it should be exercisable by the Governor-General. Section 62 established the Federal Executive Council “to advise the Governor-General in the Government of the Commonwealth” and so grafted into the Constitution the principle of responsible government. The section also requires members of the Federal Executive Council to be sworn, but does not specify any form of the oath; that used has reflected the spirit of the oaths used in Britain for Privy Councillors. J Quick and R R Garran conclude in their Annotated Constitution of the Australian Commonwealth, p 703, that the practical result of these provisions is that the executive power is placed in the hands of the Cabinet and the real head of the Executive is not the Queen but the Chairman of the Cabinet or, in other words, the Prime Minister. Whether or not contemporary commentaries would accept their characterisation of the Cabinet as a “Parliamentary Committee”, their views of the conventions which regulate its operation indicated an acceptance in Australia at that time of the principles of collective responsibility and confidentiality. After referring to the secrecy of Cabinet proceedings and the process of formal submission of matters for decision by the Executive Council, they observed: The principle of the corporate unity and solidarity of the Cabinet requires that the Cabinet should have one harmonious policy both in administration and in legislation; that the advice tendered by the Cabinet to the Crown should be unanimous and consistent; that the Cabinet should stand or fall together. The consequence of this principle of collective responsibility was expressed in the passage that immediately follows: The Cabinet as a whole is responsible for the advice and conduct of each of its members. If any member of the Cabinet seriously dissents from the opinion and policy approved by the majority of his colleagues it is his duty as a man of honour to resign. It has been suggested that the practices of collective responsibility and confidentiality imported into Australia with responsible government are part 20 of a “motley collection” of governmental conventions distinct from and of lesser significance than constitutional conventions which regulate the exercise of powers and discretions under specific provisions of the Constitution: L J M Cooray, Conventions, The Australian Constitution and The Future (1979), pp 68-74. Given however the significance of the Cabinet as the repository of de facto decision-making power, it is hard to deny the constitutional significance of the conventions that regulate its operations. Its proximate relationship to the de jure powers of the Executive Council under s 61 of the Constitution enhances that significance: see FAI Insurances Ltd v Winneke (1982) 151 CLR 342, per Mason J (as he then was) (at 364) and per Murphy J (at 373–374). In Whitlam v Australian Consolidated Press Ltd (supra) (at 421), Blackburn CJ went so far as to say of the Executive Council and Cabinet: There is no material distinction between the two. Any such revelation in respect of either body would clearly be a breach of the principle of collective Cabinet responsibility, or, more precisely, a breach of one aspect of it. On that basis it might be thought that there is room for the view that the secrecy of the “… counsels of the Crown” (Australian Communist Party v Commonwealth (1951) 83 CLR 1 at 179, per Dixon J (as he then was)), might supply a rationale for Cabinet secrecy. Nevertheless Blackburn CJ linked confidentiality firmly to the principle of collective responsibility and the associated objective of frank and open debate within the Cabinet and concluded: Cabinet secrecy is an essential part of the structure of government which centuries of political experience have created. To impair it without a very strong reason would be vandalism, the wanton rejection of the fruits of civilisation. [3.210]

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Commonwealth v Northern Land Council cont. His approach was referred to with apparent approval by Wilcox J (Bowen CJ and Sheppard J agreeing) in Minister for Arts Heritage and Environment v Peko-Wallsend Ltd (1987) 15 FCR 274 at 298–300. The case was concerned with the justiciability of Cabinet decision-making rather than its confidentiality, but the connection between the two was adverted to by Wilcox J who suggested (at 299–300) that the immunity from disclosure of the documents relating to such decisions has sometimes been regarded as a reason for denying reviewability of such decisions in courts of law: see P W Hogg, “Judicial Review of Action by the Crown Representative” (1969) 43 Australian Law Journal 215 at 219–220. In “Ministerial Privileges” Professor Campbell, discussing R v Turnbull (1958) Tas SR 80, contended that it is unreal to base any rule of exclusion of Cabinet deliberations upon the oath or secrecy of Executive Councillors. Accepting that the oaths legally bind ministers to secrecy in respect of Cabinet deliberations, she contended that the duty of secrecy is a convention and observance of secrecy is secured not so much by regard for the terms of the oath as by acceptance of the convention. Further, as she pointed out, it is erroneous to identify meetings of the Privy Council or Executive Council with meetings of the Cabinet. The secrecy attached to advice tendered to the Crown by its advisers from times predating the establishment in Britain of responsible government provides historical support for the continued 21 confidentiality in Australia of Cabinet meetings. But of greater importance in modern times is the precept or convention of collective responsibility. Co-existing with the convention, but conceptually distinct from it, is the entitlement of the Crown to enforce the confidentiality of particular matters pertaining to the workings of government where disclosure would be “inimical to the public interest because national security, relations with foreign countries or the ordinary business of government [would] be prejudiced”: see Commonwealth v John Fairfax & Sons Ltd (1980) 147 CLR 39 at 52, per Mason J. His Honour there approved what had been said by Lord Widgery CJ in Attorney-General v Jonathan Cape Ltd (at 770–771) in setting out the conditions under which the court would restrain publication by a former Cabinet Minister of diaries containing accounts of meetings at which he had been present: The Attorney-General must show (a) that such publication would be a breach of confidence; (b) that the public interest requires that the publication be restrained; and (c) that there are no other facts of the public interest contradictory of and more compelling than that relied upon. Moreover, the court, when asked to restrain such a publication, must closely examine the extent to which relief is necessary to ensure that restrictions are not imposed beyond the strict requirement of public need. Mason J spoke in similar vein, in the context of what was once called Crown privilege, in Sankey v Whitlam (supra) (at 97–100). His Honour there cited discussion of the doctrine of collective responsibility in the 1976 report of the Committee of Privy Councillors on Ministerial Memoirs (The Radcliffe Committee) and its reference to the earlier finding of the Franks Committee that governmental representatives in France, Sweden, Canada and the United States took it for granted that a government cannot function completely in the open but must be able to preserve the confidential nature of its internal process especially at the highest level of policy making. Of that observation Mason J said (at 98): This, to my mind, is the reason which underlies the public interest against production and disclosure of Cabinet proceedings and of other high level policy deliberations. Accordingly, it is the element which has to be weighed in the balance with public interest in the administration of justice in determining whether Cabinet proceedings and high level deliberations should be disclosed. In this way, the law and political science meet. It follows that the principal consideration in assessing the Commonwealth’s claim for public interest immunity in this case is the impact of disclosure upon the interests protected by the convention of collective responsibility. In that assessment the court must not lose sight of the realities to which the commentators have referred in the works already mentioned. See also Harbours Corporation of 248

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Commonwealth v Northern Land Council cont. Queensland v Vessey Chemicals Pty Ltd (1986) 12 FCR 60 at 63.

[3.220]

Notes&Questions

The Full Court dismissed the Commonwealth’s appeal, leaving in place the order that the documents be produced for inspection by the NLC’s lawyers. The High Court allowed the Commonwealth’s further appeal from the decision, overturning the order for production, holding “it is only in a case where there are quite exceptional circumstances which give rise to a significant likelihood that the public interest in the proper administration of justice outweighs the very high public interest in the confidentiality of documents recording Cabinet deliberations that it will be necessary or appropriate to order production of the documents to the court”: Commonwealth v Northern Land Council (1993) 176 CLR 604 at 619. Responsible government and statutory corporations [3.230] Since well before federation, Australian legislatures have established bodies “to

exercise what once may have been and elsewhere may be regarded as governmental functions” (Airservices Australia v Canadian Airlines (1999) 202 CLR 133 at [375] (Gummow J)), usually where the function is thought to require or to benefit from some measure of independence from government. (There are, of course, countervailing considerations, including transparency and the availability of traditional public law mechanisms of review and accountability. See, eg, M Aronson, “A Public Lawyer’s Responses to Privatisation and Outsourcing”, in M Taggart (ed), The Province of Administrative Law (Hart Publishing, Oxford, 1997)). Thus in Re Residential Tenancies Tribunal (NSW) and Henderson; Ex Parte Defence Housing Authority (1997) 190 CLR 410, Gummow J wrote (at 470): [Statutory corporations exercising what otherwise might simply have been considered as governmental functions or an extension thereof into commercial activity] were in widespread use in the colonies before federation and before and after the public service was placed on its modern statutory footing …. … In some instances the governing bodies of these corporations included persons with special expertise drawn from outside the public service, or persons elected by local government bodies …. Other statutory corporations may have been designed to remove areas of administration from direct interference by the executive …. Another objective appears to have been to afford to third parties dealing with or damaged by such bodies direct and full rights in contract and tort which then would not have been available against the Crown …. For example, in Victoria, the tort immunity of the Crown was not abolished until the enactment of s 4 of the Crown Proceedings Act 1955 (Vic). Earlier, Harrison Moore had observed [“A Century of Victorian Law” (1934) 16 (3rd series) Journal of Comparative Legislation and International Law 175 at 189] that the exclusion of liability in tort was tolerable only because “the more important public utilities and services undertaken by the State [had] been committed to statutory corporations, subject in the main to the ordinary law.”

Of course, the concept of “governmental functions” is contested and shifting, as Gummow J recognised (at 470, note 214): In South Australia v Commonwealth (the First Uniform Tax Case) (1942) 65 CLR 373 at 423, Latham CJ said that any activity might become a function of government if the legislature so desires and that there was no general opinion as to what were the essential functions, capacities, powers or activities of an organised state. In Melbourne Corporation v Commonwealth (1947) 74 CLR 31 at 74, Starke J declared that “[w]hen a government acts under its constitutional power then its activities are governmental functions”, and in Ex parte Professional Engineers’ [3.230]

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Association (1959) 107 CLR 208 at 275, Windeyer J said there was no firm historical foundation for any distinction in law between those functions “which are properly or essentially governmental and those which are not”.

Moreover, the “hybrid” nature of these bodies, having a separate legal existence from the Commonwealth (or State) but discharging functions that are in some sense “public”, gives rise to complex legal questions. Do they form part of the executive government? (In Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 561, the Court said “the 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.” See also Airservices (1999) 202 CLR 133 at 261 [373].) Are they entitled to the legal privileges and immunities that attach to the government? Are their decisions reviewable in the courts in the same way as decisions of Ministers and public servants? (See for example Plaintiff M61/2010E v Commonwealth of Australia (2010) 243 CLR 319.) To what extent are Ministers responsible for their actions? To what extent can Ministers direct their action or require production of information held by them? (See for example Hughes Aircraft Systems International v Airservices Australia (1997) 76 FCR 151 at 179.) Responsible government and intergovernmental co-operation in a federation [3.240] The High Court has upheld the validity of co-operative schemes under which the

Commonwealth’s and the States’ executive powers are exercised by the same person or body. As Gibbs CJ wrote in R v Duncan; Ex parte Australian Iron and Steel Pty Ltd (1983) 158 CLR 535 at 552–553: The Constitution effects a division of powers between the Commonwealth and the States but it 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 co-operation, 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. … 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 authorise a public servant to collect State taxes as well as Commonwealth taxes. There is nothing in the decisions of this Court to provide authority for such a restrictive view of constitutional power.

See also R v Hughes (2000) 202 CLR 535 at [68] per Kirby J. In R v Duncan; Ex parte Australian Iron and Steel Pty Ltd (1983) 158 CLR 535, the High Court upheld a scheme under which complementary State and Commonwealth legislation established a single Coal Industry Tribunal. The State and Commonwealth legislation conferred powers on the Tribunal and empowered it to exercise those powers, together or separately. The Tribunal could exercise whichever power was available and appropriate. The Commonwealth did not exceed its legislative powers by consenting to the conferral of State powers that it could not confer itself. Graeme Hill points out that the later decision in R v Hughes (2000) 202 CLR 535 is more ambivalent about “whether the Commonwealth executive can perform functions that could not be conferred by Commonwealth legislation” (G Hill, “Will the High Court ’Wakim’ Chapter II of the Constitution?” (2003) 31(3) Federal Law Review 445). Commonwealth legislation would, however, clearly be invalid if it purported to impose duties to exercise powers conferred by State legislation that could not be conferred directly by Commonwealth legislation. 250

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[3.250]

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Notes&Questions

The principles of responsible government were not directly addressed in either Duncan or Hughes. But consider Duncan. Is there any difficulty in identifying which Minister – State, federal, both or neither – is responsible for the Tribunal’s decisions and general conduct? What is the nature and extent of that responsibility? Would the answer be different if decisionmaking powers were conferred instead on (a) a statutory corporation, (b) an officer of a Department of State or (c) a Minister?

PUBLIC MONEY, PUBLIC SPENDING AND THE NON-STATUTORY POWERS OF THE EXECUTIVE [3.260] With the background principles of responsible government established, it is possible

to turn to consider the non-statutory “capacities” of the executive, and in particular whether it has the capacity to spend money and enter contracts in the same way that a natural person does. The executive government frequently resorts to spending public money to achieve its policy objectives, seeking to influence through expenditure rather than cannot compel through legislation (or in exceptional cases, through a surviving prerogative). Many of the most revealing cases concerning executive power have dealt with situations in which: • the executive government attempts to achieve policy objectives that lie outside the apparent scope of the legislative powers conferred on the Commonwealth Parliament (and here this part of the Chapter also deals with the third set of putative non-statutory powers, those sometimes labelled “nationhood powers”), and/or • the executive government attempts to achieve policy objectives through expenditure without seeking Parliamentary ratification of those objectives (whether or not they lie outside the apparent scope of those legislative powers). This part of the chapter discusses these cases and the limits they reveal on executive action through the tussle between parliament and the executive for control of revenue and expenditure. [3.270] The executive does not have a free hand in the field of revenue and expenditure. Since

the 17th century, the executive government has not been able to impose taxes (Bill of Rights 1688 (1 Will & Mary, Sess 2 c 2), s 4: “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 then the same is or shall be granted is illegal”). Recall also Commonwealth & the Central Wool Committee v Colonial Combing, Spinning & Weaving Co Ltd (1922) 31 CLR 421 at 433–435, where Isaacs J held that agreements between the Commonwealth and a private company were invalid because the provision that the company pay one-half of its net profits to the Commonwealth amounted to an attempt to impose taxation without the sanction of Parliament. Nor has it been able to spend money without parliamentary authorisation (E Campbell, “Parliamentary Appropriations” (1971) 4 Adelaide Law Review 145; A J V Durell, The Principles and Practice of the System of Control over Parliamentary Grants (1917), p 3). Parliament “provides the money required for administrative purposes by authorising taxation; it appropriates, with more or less particularity, the purposes to which the money so provided is to be applied” (Egan v Willis (1998) 195 CLR 424 at [100]). These principles are reflected under the Commonwealth Constitution, implicitly as part its common law inheritance and explicitly in ss 53, 54, 55, 81 and 83. McHugh J situated these provisions in their historical context in Combet v Commonwealth (2005) 224 CLR 494. [3.270]

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Combet v Commonwealth [3.280] Combet v Commonwealth (2005) 224 CLR 494 at 535–537 McHugh J: 535 [44] For centuries before the enactment of the Constitution, the Crown conducted the day to day business of government – as theoretically it still does today. But the business of government, ancient and modern, requires access to a continual supply of money. Taxation of the income or property of the subject is an obvious way of raising money for the business of government. Historically, taxation and loans have been the principal means by which governments have raised money. From an early period in the history of English constitutional law, however, the House of Commons insisted on its right to control the levying of direct taxes on the subjects of the Crown and others. It “repeatedly asserted that taxes were not to be imposed without its consent” [Maitland, The Constitutional History of England, (1908), p 181]. By the 17th century, the House of Commons had also insisted on its right to control the levying of indirect taxation [Saunders, “Parliamentary Appropriation”, in Saunders et al, Current Constitutional Problems in Australia (1982) 1 at p 2]. These demands of the Commons culminated in the promulgation of the Bill of Rights 1689 (UK) and its insistence “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.” As a result, for more than three centuries, a fundamental rule of English constitutional law has been that the Crown cannot levy a tax without parliamentary authorisation [Attorney-General v Wilts United Dairies Ltd (1920) 37 TLR 884 at 886]. But not only did the Commons insist on controlling the levying of taxes, it also insisted on knowing the purposes for which the Crown intended to use the supply of money and on scrutinising the expenditures of the Crown [Maitland, The Constitutional History of England (1908), pp 184, 328]. As a result, another fundamental rule of the constitutional law of the Anglo-Australian peoples is that the Crown cannot expend money without the authorisation of Parliament [Auckland Harbour Board v The King [1924] AC 318 at 326; Brown v West (1990) 169 CLR 195 at 205]. When the Constitution was drafted, there was also a widely accepted convention that control over money Bills essentially belonged to the popularly elected lower House of Parliament from which the government was formed. Indeed, as early as the second half of the 17th century the House of Commons had resolved that money Bills should not be amended by the House of Lords and that such Bills could only originate from the 536 Commons [Victoria v Commonwealth (1975) 134 CLR 338 at 385–386. After 1689, the only power the House of Lords had in respect of money Bills was to withhold assent]. The Lords could “make no alteration in a money bill, but must simply accept it, or simply reject it”. [Maitland, The Constitutional History of England (1908), p 247]. [45] Sections 53, 54, 55 and 81 and 83 of our Constitution are the result of these rules of English constitutional law and this convention. [McHugh J set out ss 53, 54 and 55.] [46] These three sections did not give full effect to the convention that control over money Bills belongs to the popularly elected House where the government is formed. That is because of a compromise made at the 1897 Adelaide Convention. Delegates from South Australia, Western Australia and Tasmania insisted on equal voting rights for the Senate in respect of all legislation passed by the Parliament [Quick and Garran, The Annotated Constitution of the Australian Commonwealth (1901), p 138]. In the end, they gave way in respect of money Bills to the extent provided for in s 53. Their compromise in respect of the “ordinary annual services” of the government reflected a convention that was then current in the United Kingdom and in the colonies of Australia. [47] By the 19th century, the United Kingdom Parliament had adopted a convention that expenditure falling outside the estimates for the ordinary annual expenditure of the government required explicit approval by the Parliament. Thus, expenditures for new purposes not 537 already covered by the existing powers or functions of a department or where the expenditure required authority for more than one year [Erskine May’s Treatise on the Law, Privileges, Proceedings and Usage of Parliament (20th ed, 1983), p 750] required separate approval by the Parliament. In 1857, after a dispute between the House of Assembly and the Legislative Council in South Australia over the powers of the Council in respect of money Bills, the Council agreed to waive its claim that it could deal with appropriations concerning the ordinary annual expenses of government in South Australia [Moore, The Constitution of the Commonwealth of Australia (2nd ed, 1910), pp 142-143]. This convention of the South Australian Parliament – now incorporated in the Constitution Acts of a number of Australian States – was the basis 252

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Combet v Commonwealth cont. of the s 53 compromise. But as the events of 1975 showed, although the Senate cannot amend proposed laws appropriating revenue or moneys or imposing taxation, the compromise did not extend to failing to pass or rejecting them. Consequently, at the Constitutional Convention held in Sydney some months later, in 1897, s 57 [Section 57 is entitled “Disagreement between the Houses”. It provides the mechanism for double dissolutions and joint sittings of both Houses of Parliament.] was inserted in the draft Constitution to resolve deadlocks that might arise as the result of the last paragraph in s 53 of the Constitution. [48] Sections 81 and 83 of the Constitution, however, give full effect to the victory of the Houses of Parliament over the right of the Crown to spend public moneys at the Crown’s discretion. [McHugh J set out ss 81 and 83.]

[3.290] Section 83 has the effect that “[a]n appropriation made by a valid law is the necessary

authority for the Executive Government to take moneys out of the Consolidated Revenue Fund” – and hence “assures to the people the effective control of the public purse”: Brown v West (1990) 169 CLR 195 at 205. The effect of an appropriation is “legally [to] segregat[e] [funds] from the general mass of the Consolidated Fund and dedicat[e] [them] to the execution of some purpose which either the Constitution has itself declared, or Parliament has lawfully determined, shall be carried out.” (New South Wales v Commonwealth (“the Surplus Revenue Case”) (1908) 7 CLR 179 at 200, approved Pape v FCT (2009) 238 CLR 1 at 44 [79], 72 [176], 104 [292], 211, [602].) Most funds are appropriated under Acts containing “standing appropriations” that operate from year-to-year – as opposed to annual Appropriation Acts that provide the Executive with the funds needed to administer programs for a particular financial year. Three members of the High Court commented in Brown v West (1990) 169 CLR 195 at 207, “the Parliament foregoes its annually-exercised power over expenditure by government when a law containing a standing appropriation is enacted”. The Constitution establishes a further distinction between Bills that appropriate money for the “ordinary annual services of the government” and those that do not: s 53 provides that the Senate may not amend such a Bill and s 54 provides that such a Bill must deal only with this kind of appropriation. As a result, the annual Appropriation Bills come in pairs, one dealing with this kind of appropriation and the other dealing with the remainder. The “ordinary annual services of government” are not defined by the Constitution but by a compact (or agreement) between the Houses of Parliament: see Harry Evans (ed), Odgers’ Australian Senate Practice (12th ed, 2008), pp 285-286. Sections 53 and 54 are probably not justiciable but the question was not resolved in Combet v Commonwealth (2005) 224 CLR 494 at [155]. All appropriations must identify the purposes for which the moneys appropriated may be spent. “[T]here cannot be appropriations in blank, appropriations for no designated purpose, merely authorizing expenditure with no reference to purpose.” (Attorney-General (Vic) v Commonwealth (1945) 71 CLR 237 at 253 per Latham CJ.) “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’.” (Brown v West (1990) 169 CLR 195 at 208 approving AAP Case (1975) 134 CLR 338 at 392 per Mason J.) It was not necessary to go further than this in Brown v West and identify the specificity with which the “purpose” of an appropriation must be stated by Parliament. This question arose in Combet v Commonwealth (2005) 224 CLR 494 in considering whether an advertising program to promote the government’s proposed “workplace relations reforms package” was supported by an appropriation. Schedule 1 of the Appropriation Act (No 1) 2005–2006 (Cth) [3.290]

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listed government portfolios and a series of “outputs” for agencies within each portfolio. Those “outputs” were identified in very general terms, including “Higher productivity, higher pay workplaces”. Against each output for an agency, the Schedule identified sums appropriated to “Departmental Outputs” or “Administered Expenses” and often both. “Departmental Outputs” and “Administered Expenses” reflect accounting concepts – roughly reflecting sums appropriated for the operation of the agency itself and sums appropriated to programs administered by the agency. The actual appropriations were effected by ss 7 and 8: 7

(1)

(2)

8

(1)

For a departmental item for an entity, the Finance Minister may issue out of the Consolidated Revenue Fund amounts that do not exceed, in total, the amount specified in the item. An amount issued out of the Consolidated Revenue Fund for a departmental item for an entity may only be applied for the departmental expenditure of the entity. For an administered item for an outcome of an entity, the Finance Minister may issue out of the Consolidated Revenue Fund amounts that do not exceed, in total, the lesser of: (a) the amount specified in the item; and (b) the amount determined by the Finance Minister in relation to the item, having regard to the expenses incurred by the entity in the current year in relation to the item.

(2)

An amount issued out of the Consolidated Revenue Fund for an administered item for an outcome of an entity may only be applied for expenditure for the purpose of carrying out activities for the purpose of contributing to achieving that outcome. The government argued that the advertisements were funded by moneys appropriated as a “departmental item” for the Department of Employment and Workplace Relations. The joint judgment stated (at 163) that the Appropriation Act “restricts the application of that departmental item of $1,447,552,000: it may only be applied ‘for the departmental expenditure’ of the Department. But the Act imposes no narrower restriction on the scope of the expenditure”. In particular, according to the joint judgment, it was not necessary to relate the expenditure on “departmental items” to the “outcomes” stated in the Schedule. The expenditure therefore was supported by the appropriation (the plaintiffs did not contend that the expenditure was not a departmental appropriation and the majority did not to decide what constituted “departmental expenditure”) – even though the appropriation stated no narrower purpose than that the expenditure was for the purposes of the Department. Gleeson CJ agreed that the expenditure was supported by the appropriation but on a different basis. In his view, a proper interpretation of the Appropriation Act required that the expenditure be for the purpose of one of the outcomes specified in the Act. The government asserted that it was for the purpose of the outcome, “Higher productivity, higher pay workplaces”. McHugh and Kirby JJ dissented. For a critical commentary, see Geoffrey Lindell, “The Combet Case and the Appropriation of Taxpayers’ Funds for Political Advertising – An Erosion of Fundamental Principles?” (2007) 66 Australian Journal of Public Administration 307.

Combet v Commonwealth [3.300] Combet v Commonwealth (2005) 224 CLR 494 at 523, 528–531, 596–598 Gleeson CJ: 523 [7] While the generality of statements of outcome may increase the difficulty of contesting the relationship between an appropriation and a drawing, appropriations are made in a 254

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Combet v Commonwealth cont. context that includes public scrutiny and political debate concerning budget estimates and expenditure review. The higher the level of abstraction, or the greater the scope for political interpretation, involved in a proposed outcome appropriation, the greater may be the detail required by Parliament before appropriating a sum to such a purpose; and the greater may be the scrutiny involved in review of such expenditure after it has occurred. Specificity of appropriation is not the only form of practical control over government expenditure. The political dynamics of estimation and review form part of the setting in which appropriations are sought, and made. … 528 [26] … For the Department of Employment and Workplace Relations there is only one departmental item as defined, $1,447,552,000. An amount issued for that item may only be applied for the departmental expenditure of the Department. Such expenditure must, of course, be for a purpose of the Commonwealth (Constitution, s 81). The long title of the Appropriation Act, understood in the light of s 53 of the Constitution, shows that the expenditure referred to in s 7 is for the ordinary annual services of Government. That, however, is an expression of wide import. Are the outcomes stated in Sched 1 relevant to the characterisation of expenditure as “departmental expenditure” within the meaning of s 7? In my view, they are. The constitutional context in which the Appropriation Act was enacted was one of parliamentary appropriation of funds, under the control of Parliament, to be made available to the Executive for stated purposes. The statement of purposes may be broad or narrow. In Sched 1, amounts under the heading “Departmental Outputs” are related in each case to a statement of outcome. The total of those amounts, for an entity, is a departmental item. It is unlikely that the statements of outcome were intended to be relevant only to administered items, because in the case of some entities or agencies there are statements of outcome, but no administered expenses. I acknowledge that the contrast between the language of s 7(2) and that of s 8(2) could support a view that outcomes are irrelevant to s 7(2). Against that, however, is the wider context, together with the specific textual consideration that Sched 1 identifies outcomes even where there are no relevant administered expenses. In the case of departmental items, the relationship with outcomes is not identical to the relationship between outcomes and administered items spelled out in s 8(2). There is only one departmental item, to which a number of outcomes may be relevant. Taken together, however, outcomes towards which the Department of Employment and Workplace Relations is working assist in considering what is meant by “departmental expenditure”. They may exclude expenditure which is so clearly unrelated to the business of the Department that it could not rationally be regarded as expenditure for the purpose of that business. There are probably many aspects of the routine business of the Department, undoubtedly included in the ordinary annual services of the Government, which could be regarded as contributing to one or other of outcomes 1, 2 or 3 only in the most indirect fashion. No doubt much departmental expenditure is of a kind that would be incurred even if the Department were pursuing different policy objectives. Such expenditure may be directed to outputs of a kind that a government of any political persuasion would expect the Department to provide. Policy development and advice to the Minister is an obvious example. Such advice might be directed towards a wholesale re-definition of the outcomes themselves, and yet the cost of providing it would qualify as departmental expenditure. [27] Provided such statements [of purpose] are not so general, or abstract, as to be without meaning, they represent Parliament’s lawful choice as to the manner in which it identifies the purpose of an appropriation. To the extent to which it is necessary to have regard to those statements of purpose in order to decide whether expenditure bears the character of [the appropriation specified in the Act], then the generality, and the political character, of a statement may make it difficult to establish that particular expenditure is not related to the relevant purpose (in the sense earlier discussed). It does not follow that the purpose should be confined, or stripped of its political content. By what process might such a narrowing legitimately take place? … If Parliament formulates the purposes of appropriation in broad, general terms, then those terms must be applied with the breadth and generality they bear. … [29] … 531 The legal question, however, is whether the drawings in question are covered by the appropriation. The relevant outcome is stated with such breadth as to require an answer to that question adverse to the plaintiffs. [3.300]

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Combet v Commonwealth cont. [McHugh J held that there was no rational connection between the advertisements and Outcome 2 and therefore were not supported by it (at 554 [92]). He observed that the majority’s interpretation of the Appropriation Act, not requiring a connection between departmental expenditure and Outcomes specified in the Act, contravened the principle that there cannot be an appropriation in blank (at 554 [89]) “for it appears to authorise an agency to spend money on whatever outputs it pleases”.] Kirby J: 596 [229] Constitutional history and purpose: The history that preceded the adoption of these Australian constitutional provisions reinforces the inference to be derived that a minimum standard of disclosure to the Parliament (including the Senate) is necessary to fulfil the postulates of the form of parliamentary government established by the Constitution. [Kirby J summarised the constitutional history underpinning ss 81 and 83 and the unanimous decision in Brown v West. He quoted a further passage from the Auckland Harbour Board Case [1924] AC 318 at 327, “Any payment out of the consolidated fund made without Parliamentary authority is simply illegal and ultra vires, and may be recovered by the Government if it can, as here, be traced”, and continued:] 598 [236] If these strong words of the Privy Council could be applied in 1924 to describe the constitutional arrangements of the United Kingdom and of New Zealand, how much more applicable are they to the requirements of the Australian Constitution, expressed in a written instrument stated in imperative terms, designed to make certain, and to immure from easy change, similar British constitutional precepts? The criterion [for linking expenditure to a valid appropriation], thus endorsed by this Court, is one of “distinct authorization from Parliament itself”. To the extent that the Executive Government seeks to justify expenditures, except where there is “a distinct authorization”, it challenges centuries of constitutional history. It departs from the provisions of the Australian Constitution designed to give that history effect. It detracts from the basic purpose of such provisions, being to assure to the people in Parliament the final say about the expenditure of public moneys. It weakens accountability of the Government to the Parliament in all such matters [As envisaged by the Constitution, s 64. See also s 61]. To conclude otherwise would be to depart from the principles endorsed in Brown v West. This Court should not retreat from the clear rule expressed in that case. Behind it stands a principle of comparative strictness required by the text of our Constitution, by centuries of history and by policies of good governance to which that text gives effect [cf State v Moore 69 NW 373 at 376 (1896) (SC Nebraska); Crane v Frohmiller 45 P 2d 955 at 959 (1935) (SC Arizona)].

Appropriations and federal limits on expenditure [3.310] As noted above, s 81 of the Constitution provides: 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. (emphasis added)

This section gives rise to two interconnected questions that have run through the cases, explicitly or implicitly. • First, what is the effect of an appropriation Act? It authorises the government to withdraw money from the Consolidated Revenue Fund and directs the purposes to which the money can be applied by the Executive government. But does it provide the authority to spend the money or must that authority be found elsewhere in the Constitution? • Second, do the emphasised words limit the purposes of an appropriation? In Attorney-General (Vic); Ex rel Dale v Commonwealth (1945) 71 CLR 237, the High Court upheld a challenge to the validity of the Pharmaceutical Benefits Act 1944 and the Pharmaceutical Benefits Scheme it established. One limb of the challenge argued that the Act appropriated funds for purposes that were not “purposes of the Commonwealth” as specified in s 81. Only Starke and Williams JJ decided the case on this basis, accepting that this phrase 256

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imposed a justiciable limitation on Commonwealth appropriation and, they appear to have assumed, expenditure. Those limits were to be found in the distribution of legislative powers and an apparently narrow set of implications drawn from the existence of the Commonwealth and its status as a national and federal government. Latham CJ, Rich and Dixon JJ decided the case on other grounds (essentially that the substantive regulatory provisions of the Act went beyond appropriation and were not supported by the Commonwealth’s legislative powers, including the incidental power s 51(xxxix)). In obiter, they expressed divergent views on s 81. Although Dixon J regarded the appropriation power as limited to the “purposes of the Commonwealth”, he took a broader view (at 269, 271–272) of those limits: No-one, I think, suggests, and I certainly do not, that any narrow interpretation or application should be given to these provisions. 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 conception of the functions of the central government of a country in the world of to-day. There is no reason why such matters should be taken to fall outside the province of Federal appropriation though ascertained and defined by reference to the legislative power of the Commonwealth. … 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.

Rich J concurred. Latham CJ (at 254), on the other hand, thought that the power of appropriation was limited only by the purposes determined by the legislature, not the executive or the courts: “the 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.” McTiernan J (dissenting on the basis that the Act was a pure appropriation Act) took a similar view of s 81. Similar questions arose in Victoria v Commonwealth (1975) 134 CLR 338 (Australian Assistance Plan Case or AAP Case). The discussion of s 81 was similarly inconclusive, both as regards the existence of constraints on Commonwealth appropriation and the relationship to constraints on spending. However, as Mason J recognised most clearly, there is a distinction between appropriation and expenditure, and the limits of the power to spend money depend on the limits to the Commonwealth’s executive powers. His judgment, both on the character of appropriation and possible valid subject matters of expenditure, provides the starting point for the more recent consideration of these issues in Pape v Federal Commissioner of Taxation (2009) 238 CLR 1, Williams v Commonwealth (2012) 248 CLR 156 and Williams v Commonwealth (No 2) (2014) 252 CLR 416 (extracted at [3.340], [3.370] and [3.400].

Victoria v Commonwealth (Australian Assistance Plan Case) [3.320] Victoria v Commonwealth (1975) 134 CLR 338 at 396–398 [The Appropriation Act (No 1) 1974–1975 (Cth) appropriated $5,970,000 for the Australian Assistance Plan, consisting of two amounts. 01. 02.

Grants to Regional Councils for Social Development Development and evaluation expenses

$5,620,000. $ 350,000. [3.320]

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Victoria v Commonwealth (Australian Assistance Plan Case) cont. There was no other statutory support for or definition of the activities contemplated by the Plan and to be funded by the appropriation. The State of Victoria alleged that the appropriation was invalid as it was beyond the constitutional powers of the Parliament.] Mason J: 396 … 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 Attorney-General (Vic); Ex rel Dale v Commonwealth (1945) 71 CLR 237 (“Pharmaceutical Benefits case”), 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. Here, no legislation having been enacted to give effect to the Australian Assistance Plan, we must look to the executive power. In the words of s 61, the executive power of the Commonwealth “extends to the execution and maintenance of this Constitution, and of the laws of the Commonwealth”. 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 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 397 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 Commonwealth v Colonial Combing, Spinning and Weaving Co Ltd (“the Wooltops Case”) (1922) 31 CLR 421 at 432; 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 in the exercise of other specific powers. So in Burns v Ransley (1949) 79 CLR 101 and R v Sharkey (1949) 79 CLR 121, ss 24A, 24B and 24D of the Crimes Act 1914–1946 (Cth) were held to be supported by the combination of ss 51(xxxix) and 61. 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 Commonwealth (1951) 83 CLR 1 at 187–188). So far it has not been suggested that the implied powers 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 Attorney-General (Vic); Ex rel Dale v Commonwealth (1945) 71 CLR 237 at 257 (“Pharmaceutical Benefits case”). 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 258

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Victoria v Commonwealth (Australian Assistance Plan Case) cont. government will vary from time to time. As time unfolds, as circumstances 398 and conditions alter, it will transpire that particular enterprises and activities will be undertaken if they are to be undertaken at all, by the national government. 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 these programmes 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 to be attached to grants made to the States. On the other hand its presence confirms what is otherwise deducible from the Constitution, that is, that the executive power is not unlimited and that there is a very large area of activity which lies outside the executive power of the Commonwealth but which may become the subject of conditions attached to grants under s 96. [Mason J concluded that although the appropriation was valid, “the activities which call for the expenditure of this money, the elements which comprise the scheme known as the Australian Assistance Plan, stand largely, if not wholly, outside the boundaries of the executive power of the Commonwealth”.]

[3.330] The Commonwealth’s victory in the Australian Assistance Plan Case was tenuous.

Nonetheless, successive Commonwealth governments introduced and relied on appropriation laws that assumed not only that were there no justiciable limits on the subject-matter of appropriations (something encouraged by the High Court in Davis v Commonwealth (1988) 166 CLR 79 at 96) but that there was no effective prospect of a successful challenge to Commonwealth expenditure. Pape v Federal Commissioner of Taxation (2009) 238 CLR 1 made clear that the latter was a risky assumption (though the challenged measures survived in the extraordinary circumstances of the Global Financial Crisis). Mr Pape challenged the validity of the Tax Bonus for Working Australians Act (No 2) 2009 (Cth). Section 5 of the Act created an entitlement to a “tax bonus” for certain categories of Australian tax-payers. Section 5 provided the amount of the applicable bonus – one of three fixed sums depending on which of three tiers the individual taxpayer’s taxable income fell. Section 7 obliged the Commissioner of Taxation to pay the tax bonus to entitled taxpayers. An appropriation to support the payments was found in the Taxation Administration Act 1953 (Cth). But that appropriation standing on its own was not sufficient. Ultimately, the Court held (in French CJ’s words at [8], [53] and [111]) that: The provisions of ss 81 and 83 do not confer a substantive “spending power” upon the Commonwealth Parliament. They provide for parliamentary control of public moneys and their expenditure. The relevant power to expend public moneys, being limited by s 81 to expenditure for “the purposes of the Commonwealth”, must be found elsewhere in the Constitution or statutes made under it. … 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 [3.330]

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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.… 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).

Having held that s 81 did not confer a substantive spending power, the High Court had to consider whether there was another source for a power to spend appropriated funds and a head of legislative power capable of supporting the Tax Bonus for Working Australians Act (No 2) 2009 (Cth). The Commonwealth parties had argued that the Act was supported by any one of six heads of power: (a) ss 81 and 83 (a putative “appropriations power”) read with s 51(xxxix); (b) s 61 read with s 51(xxxix) (and ss 81 and 83); (c) s 51(i); (d) s 51(ii); (e) s 51(xxix); (f) a “nationhood” power. A majority held that the Act was valid. French CJ and Gummow, Crennan and Bell JJ, following Mason J’s comments in the Australian Assistance Plan Case, held that the executive power of the Commonwealth extended to making certain payments to relieve a short term economic emergency (as part of the inherent authority derived from the character and status of the Commonwealth as the national government) and that the Act was incidental to that expenditure. Hayne, Kiefel and Heydon JJ vigorously disagreed – though Hayne and Kiefel JJ would have read down the legislation to support payments limited to the amount of the recipient’s income tax liability, thus finding support for the legislation in s 51(ii) of the Constitution. Executive power linked to “nationhood” as a basis for expenditure

Pape v Federal Commissioner of Taxation [3.340] Pape v Federal Commissioner of Taxation (2009) 238 CLR 1 at 60–64, 83–92, 118–124 [The facts are set out at [3.390].] French CJ: 60 [127] The collection of statutory and prerogative powers and non-prerogative 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. This important qualification may conjure the “Delphic” spirit of Dixon J in the Pharmaceutical Benefits Case. But to say that is to say no more than that there are broadly defined limits to the power which must be respected and applied 260

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Pape v Federal Commissioner of Taxation cont. case by case. As for this case, it 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. [128] In this connection, Professor Geoffrey Sawer in 1976, referring to the judgment of Mason J in the AAP Case, suggested that s 61 includes 61 “an area of inherent authority derived partly from the Royal Prerogative, and probably even more from the necessities of a modern national government” [Sawer, “The Executive Power of the Commonwealth and the Whitlam Government”, unpublished Octagon Lecture, University of Western Australia (1976), p 10, cited in Winterton, “The Limits and Use of Executive Power by Government” (2003) 31 Federal Law Review 421 at 430–431]. There has been substantial support in this Court for that proposition. [129] In the Pharmaceutical Benefits Case, in a passage cited earlier in these reasons, Dixon J abjured any “narrow conception of the functions of the central government of a country in the world of to-day” [(1945) 71 CLR 237 at 269]. Starke J mentioned the “status of the Commonwealth as a Federal Government” [(1945) 71 CLR 237 at 266]. In the AAP Case, Barwick CJ referred to the powers “inherent in the fact of nationhood and of international personality” [(1975) 134 CLR 338 at 362]. Mason J spoke of “the existence and character of the Commonwealth as a national government” and referred to ss 61 and 51(xxxix) in the context of “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” [(1975) 134 CLR 338 at 397]. [130] In Barton v Commonwealth [(1974) 131 CLR 477] the Court held that it was within the prerogative powers of the Commonwealth to request a foreign state to detain and surrender to Australia a person alleged to have committed an offence against a law of the Commonwealth. Mason J approached the case on the basis that in the United Kingdom, absent a treaty, a request to a foreign state for extradition of an offender fell within the executive power of the Crown at the end of the 19th century. It was necessary therefore to examine the executive power of the Commonwealth. He referred to the establishment by its Constitution of the Commonwealth of Australia as a political entity and as a member of the community of nations, and said [(1974) 131 CLR 477 at 498]: By s 61 the executive power of the Commonwealth was vested in the Crown. It 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. It includes the prerogative powers of the Crown, that is, the powers accorded to the Crown by the common law. Jacobs J thought it “within the executive power of the Australian Government as the government of a sovereign state to communicate in 62 such terms as it thinks fit” with a foreign government unless that power is taken away by statute [(1974) 131 CLR 477 at 505]. [131] In Davis [(1988) 166 CLR 79] Mason CJ, Deane and Gaudron JJ acknowledged that the scope of the executive power of the Commonwealth had “often been discussed but never defined” [(1988) 166 CLR 79 at 92]. The spheres of responsibility vested in the Executive under the Constitution which had been referred to in Barton were described thus [(1988) 166 CLR 79 at 93]: 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 … 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. The plurality acknowledged the federal distribution of powers between Commonwealth and States, and added [(1988) 166 CLR 79 at 93–94]: On this footing … 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 of legislative [3.340]

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Pape v Federal Commissioner of Taxation cont. power will ordinarily be clearest where Commonwealth executive or legislative action involves no real competition with State executive or legislative competence. Brennan J spoke of the executive power thus [(1988) 166 CLR 79 at 111]: But s 61 does confer on the Executive Government 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. In my respectful opinion, that 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 co-operation 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. (footnote omitted) 63 Toohey J took a more restrictive approach to s 61 than Mason CJ, Deane and Gaudron JJ and was in general agreement with the view of Wilson and Dawson JJ that the legislative powers of the Commonwealth were to be found in the enumerated matters in s 51 of the Constitution, including the incidental power in s 51(xxxix) [(1988) 166 CLR 79 at 117 per Toohey J; see at 103–104 per Wilson and Dawson JJ]. [132] In R v Hughes [(2000) 202 CLR 535; [2000] HCA 22 at 554–555 [38]] six of the members of this Court referred with evident approval to a passage from the judgment of Mason J in Duncan [R v Duncan; Ex parte Australian Iron and Steel Pty Ltd (1983) 158 CLR 535; [1983] HCA 29], where his Honour had said [at 560]: 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. (footnote omitted) The judgment in Hughes referred, in the footnote against that quotation, to the pages in Davis covering the various passages to which I have referred. [133] Elucidation of the content of the executive power in s 61 and the incidental power conferred by s 51(xxxix) is a process to be distinguished from the discovery by implication of a “nationhood” power as an implied head of legislative competence [Davis v Commonwealth (1988) 166 CLR 79 at 103–104 per Wilson and Dawson JJ]. This is not a case which depends for its resolution upon the existence of any such implied power. The executive power extends, in my opinion, 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. This is consistent with the executive power as broadly explained by Mason CJ, Brennan, Deane and Gaudron JJ in Davis, and by Mason J in the passage from Duncan quoted in Hughes. To say that the executive power extends to the short-term fiscal measures in question in this case does not equate it to a general power to manage the national economy. 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. The question of the reviewability of factual assertions of the 64 Executive grounding the exercise of its powers under s 61 does not arise in this case, having regard to the accepted facts [As noted earlier at [13], Mr Pape did not challenge the factual content of the Special Case but rather its relevance].

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Pape v Federal Commissioner of Taxation cont. [134] The executive power is exercised in this case with the necessary prior authority of the Parliament under s 83. The incidental power supports the provisions of the Tax Bonus Act which set up a statutory framework in aid of the tax bonus payments. In my opinion the impugned provisions are within the legislative power of the Commonwealth. Gummow, Crennan and Bell JJ: 83 [213] 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, vested in the Queen and exercisable by the Governor-General. The Executive Government of the Commonwealth [214] … 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 [Re Residential Tenancies Tribunal (NSW); Ex parte Defence Housing Authority (1997) 190 CLR 410; [1997] HCA 36 at 434 (CLR); Ruddock v Vadarlis (2001) 110 FCR 491 at 540]. [215] 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. [216] In Commonwealth v Colonial Combing, Spinning and Weaving Co Ltd (“the Wooltops Case”), Isaacs J said [(1922) 31 CLR 421 at 439]: When the Constitution was framed there were six separate Colonies, six separate “constitutional units,” in Australia. In the aggregate they covered the whole territory of the continent of 84 Australia. Each had its separate Constitution and laws, throughout the territory of each the Sovereign exercised the executive power of the Colony in accordance with the local Constitution, and by the advice of local Ministers, and that executive power, by whatsoever functionary exerted, extended to the execution and maintenance of the Colonial Constitution and laws. But the limit of executive jurisdiction as to every Colony was its geographical area, and that was easily gathered from its Constitution as a truth long familiar. Over the whole of that geographical area, and not beyond it, the local Government exercised executive power – and normally the power was exclusive. His Honour then observed that the creation by the Constitution of the Commonwealth “superimposed” upon the constituent States a new constitutional unit, and went on [(1922) 31 CLR 421 at 439–440]: Two conditions had, therefore, to be satisfied. First, the constitutional domain of the new unit had to be delimited and distinguished from the respective constitutional domains of the States, and, next, that could not be done simply in terms of territory. It was found by applying to the territory certain powers – powers differently phrased with respect to the three branches of government. As to the executive power, it was delimited by attaching to the notion of territory, which is always connoted, the words “extends to the maintenance of this Constitution, and of the laws of the Commonwealth”. [217] What the text of the Constitution did not attempt was to detail the respective relationships between those Executive Governments and between them and the Imperial Government. [See the remarks of Brennan J in Davis v Commonwealth (1988) 166 CLR 79; [1988] HCA 63 at 108 (CLR).] With respect to the latter, the matter was fully settled only upon the commencement of the Australia Act 1986 (Cth) [Sue v Hill (1999) 199 CLR 462]. There could thereafter, even if not before 1986, be no doubt that the polity which the Constitution established and maintains is an independent nation state with a federal system of government. [218] But it 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. In Commissioners of Taxation (NSW) v Baxter [(1907) 4 CLR 1087; [1907] HCA 76 at 1108 (CLR)] Griffith CJ, Barton and O’Connor JJ said: [3.340]

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Pape v Federal Commissioner of Taxation cont. The object of the advocates of Australian federation, then, was not the establishment of a sort of municipal union, governed by a joint committee, like the union of parishes for the administration of the Poor Laws, say in the Isle of Wight, but the foundation of an Australian Commonwealth embracing the whole continent with 85 Tasmania, having a national character, and exercising the most ample powers of self-government consistent with allegiance to the British Crown. [219] 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, as Isaacs J put it, with “new positions which the Nation in its progress from time to time assumes” [Commonwealth v Colonial Combing, Spinning and Weaving Co Ltd (1922) 31 CLR 421 at 438]. [220] 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. Otherwise there appears no good reason to treat the executive power recognised in s 61 of the Constitution as being, in matters of the raising and expenditure of public moneys, any less than that of the executive in the United Kingdom at the time of the inauguration of the Commonwealth. [221] New South Wales submitted that the Constitution split the executive and legislative power of the respective bodies politic in a particular way so as to effect an accommodation between them. The executive power, whether of the Commonwealth or the States, it was said, “continues to be subservient to legislative power irrespective of whether the source of the legislative power is State or Commonwealth”. [222] There are difficulties with that submission and, like the submission itself, these are fundamental in nature. First, the submission 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 Commonwealth v Cigamatic Pty Ltd (In liq) [(1962) 108 CLR 372; [1962] HCA 40 at 377–378 (CLR). See, further, Re Residential Tenancies Tribunal (NSW); Ex parte Defence Housing Authority (1997) 190 CLR 410 at 441–442, 453–454, 469–470], 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. [223] State laws of general application may regulate activities of the Executive Government of the Commonwealth in the same manner as 86 persons generally [Re Residential Tenancies Tribunal (NSW); Ex parte Defence Housing Authority (1997) 190 CLR 410 at 427, 443–444, 455, 473–474], and, by the exercise of its legislative powers, the Commonwealth may affect the executive capacity of a State, but the States do not have power to affect the capacities of the Executive Government of the Commonwealth [Commonwealth v Western Australia (1999) 196 CLR 392; [1999] HCA 5 at 471 [229] (CLR)]. [224] The submission for New South Wales referred to the position of s 109 in the scheme of the Constitution. But that weakens rather than strengthens its submission. In Re Residential Tenancies Tribunal (NSW); Ex parte Defence Housing Authority [(1997) 190 CLR 410 at 440], after referring to s 109, Dawson, Toohey and Gaudron JJ said: The States, on the other hand, do not have specific legislative powers which might be construed as authorising them to restrict or modify the executive capacities of the Commonwealth. The legislative power of the States is an undefined residue which, containing no such authorisation, cannot be construed as extending to the executive capacities of the Commonwealth. No implication limiting an otherwise given power is needed; the character 264

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Pape v Federal Commissioner of Taxation cont. 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 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. [225] In the same case, Brennan CJ stated that the States lack any legislative power that can reach the executive power of the Commonwealth [(1997) 190 CLR 410 at 424–426. See also at 457–458 per McHugh J, 473–474 per Gummow J]. … 87 [227] However, in 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, that respecting the need for statutory authority to support extradition from Australia of fugitive offenders, was affirmed in Vasiljkovic v Commonwealth [(2006) 227 CLR 614; [2006] HCA 40 at 634–635 [49]–[50]]. Another concerns the incapacity of the Executive Government to dispense with obedience to the law [A v Hayden (1984) 156 CLR 532; [1984] HCA 67 at 580–581 (CLR); White v Director of Military Prosecutions (2007) 231 CLR 570; [2007] HCA 29 at 592 [37] (CLR)]. [228] After denying the proposition that the Constitution created no more than an aggregation of colonies, with a redistribution of powers between the federal and State governments [(1988) 166 CLR 79 at 110], Brennan J went on in Davis v Commonwealth [(1988) 166 CLR 79 at 111] to say: 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 the Executive Government 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 [(1975) 134 CLR 338 at 397]. In my respectful opinion, that is an appropriate formulation of a criterion to determine whether an enterprise or activity lies within the executive power of the Commonwealth. That formulation should be accepted, subject to qualifications which it will be necessary to develop later in these reasons. The formulation, and the qualifications to be made, together emphasise a point made by six members of the Court in the joint reasons in R v Hughes [(2000) 202 CLR 535 at 555 [39] per Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ; [2000] HCA 22]. This was that while s 51(xxxix) authorises the Parliament to legislate in aid 88 of the executive power, that does not mean that it may do so in aid of any subject which the Executive Government regards as of national interest and concern. The present crisis [229] This case requires consideration of certain novel or at least unusual matters which are not contested for the purposes of the Special Case. Some of these are identified, in short form, earlier in these reasons. … [230] Collectively the facts emphasise the unusual nature of the current economic times being experienced globally and in the domestic national economy. Rapid changes in macroeconomic circumstances globally have caused the Commonwealth Department of the Treasury to revise economic forecasts downwards from those released in the 2008–2009 Budget on 13 May 2008. The Government has published a document entitled Updated Economic and Fiscal Outlook, in which it is stated that the world is experiencing a global recession triggered by a global financial and economic crisis which is the most severe deterioration in the global economy since the Great Depression and the most significant economic crisis since the Second World War. The revised forecasts mentioned foreshadow significantly weaker domestic growth and higher unemployment. Reports and statements provided by international bodies, the Group of Twenty [Declaration of the Summit on Financial Markets and the World Economy, 15 November 2008] and the International Monetary Fund [World Economic Outlook Update, 28 January 2009], emphasise the global nature of the current financial and economic crisis. The Group of Twenty, colloquially the G20, is an informal forum of Finance Ministers [3.340]

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Pape v Federal Commissioner of Taxation cont. and Central Bank Governors established in 1999 to discuss key issues in the global economy. Australia is a member. Such is the background and context in which the Commonwealth Government has announced three “fiscal stimulus packages” [The Economic Security Strategy announced on 14 October 2008; the Nation Building Package announced on 12 December 2008; and the Nation Building and Jobs Plan announced on 3 February 2009 [SCB 24 [13]]]. [231] The third and most recent “package” includes the payment of the tax bonus pursuant to the Bonus Act. The defendants contend that the purpose of the tax bonus is immediate fiscal stimulus to the economy to support economic growth and employment and to help reduce the impact of the global recession in Australia. They also contend that without a timely stimulus to the economy of this kind, Australia would 89 face a more severe financial and economic slowdown than has been forecast. It was alleged that the global conditions were extraordinary and that that circumstance gives rise to the need for a fiscal stimulus to support economic growth and jobs. It was said that the fiscal stimulus was targeted towards low and middle income households, which are most likely to spend the additional income and are most vulnerable during the economic downturn. Swiftness of execution was said to be desirable. Conclusions respecting s 61 and s 51(xxxix) [232] In determining whether the Bonus Act is supported by s 61 and s 51(xxxix) of the Constitution, 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. [233] As already mentioned, that there is a global financial and economic crisis is not contested in this proceeding. It can hardly be doubted that the current financial and economic crisis concerns Australia as a nation. 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. This power has its roots in the executive power exercised in the United Kingdom up to the time of the adoption of the Constitution but in form today in Australia it is a power to act on behalf of the federal polity. … 90 [236] What then 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 as follows [Australia, Report of the Royal Commission on the Constitution, (1929), Minutes of Evidence, Pt 1 at 72]: 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. [237] Of course, the taxation power is not “unlimited”. It must be employed “so as not to discriminate between States or parts of States” (s 51(ii)), nor by any law or regulation of revenue may the Commonwealth “give preference to one State or any part thereof over another State or any part thereof” (s 99). Nor may a subject of the Queen, resident in one State, be subject in any other State to discrimination as prohibited by s 117. Bounties on the production or export of goods must be “uniform throughout the Commonwealth” (s 51(iii)). [238] The provision for payments made by the Bonus Act does not operate by any criterion which discriminates, gives preferences or has a lack of uniformity of application in the sense of these revenue and other provisions of the Constitution. The criteria for entitlement specified in s 5 of the Bonus Act are not of that character. Had the contrary been the case, then a question may have arisen as to the scope of the executive power to support a law resting on s 51(xxxix). [239] In Davis v Commonwealth [(1988) 166 CLR 79 at 93–94] Mason CJ, Deane and Gaudron JJ said: 266

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Pape v Federal Commissioner of Taxation cont. [T]he 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. 91 In the same case Brennan J remarked of the determination of whether an enterprise or activity lies within the executive power of the Commonwealth [(1988) 166 CLR 79 at 111]: 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 co-operation with the States) to secure the contemplated benefit. [240] The governments of the States have the interest given by s 94 of the Constitution in the distribution of all surplus revenue of the Commonwealth, but, as remarked above, the Commonwealth has no obligation to tailor its expenditure to provide a surplus [New South Wales v Commonwealth (1908) 7 CLR 179]. The Parliament may grant financial assistance to any State, but, by force of s 96, the Parliament may impose such terms and conditions as it thinks fit. The Parliament of the Commonwealth is constrained by s 114 of the Constitution from imposing any tax on property of any kind “belonging to a State”. That prohibition is supplemented by the principles of federalism associated with Melbourne Corporation v Commonwealth [(1947) 74 CLR 31; [1947] HCA 26] but no reliance is placed by the plaintiff or the interveners upon those doctrines. Further, to say that the power of the Executive Government of the Commonwealth to expend moneys appropriated by the Parliament is constrained by matters to which the federal legislative power may be addressed gives insufficient weight to the significant place in s 51 of the power to make laws with respect to taxation (s 51(ii)). [241] The intervening States do not seriously dispute that only the Commonwealth has the resources available to respond promptly to the present financial crisis on the scale exemplified by the Bonus Act. The submissions of the interveners appear to have been moved more by apprehension of a wide reading of the scope of s 61. But in 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. … 92 [243] 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: 118 [334] Whether the Impugned Act is a law incidental to the execution of a power vested by the Constitution in the Government of the Commonwealth depends upon the ambit of the Commonwealth’s executive power. To conclude that the executive power of the Commonwealth is not unbounded is neither to revert to some doctrine of reserved powers nor to treat the new and national polity created by Federation as a cripple. It does not leave some element of executive power (let alone some essential element of such power) undistributed between the integers of the Federation, and thus unavailable to any. [335] The bound that is passed when the Commonwealth Executive seeks to spend money in the manner for which the Impugned Act provides is the boundary set by those structural considerations which informed and underpinned the decision in Melbourne Corporation. The executive power of the Commonwealth is the executive power of a polity of limited powers. The Engineers’ case decided that the powers are not 119 to be understood as confined by a priori assumptions. But no statement of this Court suggests that the executive power of the Commonwealth is unbounded. [336] Why do structural considerations require the conclusion that the executive power of the Commonwealth in matters of spending is not unbounded? That question is best approached by examining the proposition that, in matters of raising and expenditure of public moneys, the executive power recognised in s 61 is the same as the power of the Executive in the United Kingdom at the time of Federation. There are several reasons to reject that proposition. [337] First, the ambit of the Commonwealth executive power is to be identified having regard to the whole of the constitutional structure, not only those provisions that deal directly with the subject of [3.340]

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Pape v Federal Commissioner of Taxation cont. executive power. To do otherwise would not read s 61 in the context of the whole Constitution. In particular, identifying the scope of Commonwealth executive power in relation to raising and expenditure of public moneys requires consideration of more than the respective spheres of exercise of executive power by the Commonwealth and State governments. To confine attention to executive power is to ignore the intersection between executive and legislative power for which s 51(xxxix) expressly provides. The Parliament’s legislative powers cannot be determined without regard to the engagement of s 51(xxxix) with respect to matters incidental to the execution of powers vested by the Constitution in the Government of the Commonwealth. Conversely, the powers of the Commonwealth Executive must be determined bearing in mind that there is legislative power with respect to matters incidental to the execution of that executive power. [338] Secondly, determination of the ambit of the Commonwealth Executive’s power in matters of raising and expending public moneys must not ignore the carefully delineated intersection between the respective roles of the Executive and the Parliament that not only lies at the centre of a proper understanding of the provisions of Pt V of Ch I and Ch IV of the Constitution but also informs the meaning that is to be given to s 61 in matters of executive power with respect to public moneys. The central elements of the delineation of the respective roles of the Executive and the Legislature provided by the Constitution came directly from the United Kingdom practices of the late 19th century. But there was one fundamental alteration to those arrangements that was made by the Constitution and cannot be ignored. The Parliament which was to control both taxation and expenditure under the Australian Constitution was given only limited legislative powers. Yet when it is said that the position of the Commonwealth Executive in matters of expenditure is no different from that of the United Kingdom Executive at the time of Federation, it is asserted that the executive arm of government has unbounded powers. 120 [339] Of course it must be understood that, as Dixon J said [(1947) 74 CLR 31 at 82–83] in Melbourne Corporation: 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. But it is the very fact of the supremacy of the Commonwealth’s legislative power that directs attention to the consequences that follow for the continued existence of separate polities, separately organised, if the executive power of the Commonwealth in matters of expenditure is unbounded. If the executive power in this respect is unbounded, the legislative power of the Parliament in such matters, given by s 51(xxxix), is limited only by the requirement that the legislation be with respect to a matter incidental to the execution of that power. (h) Conclusions respecting s 61 and the incidental power [340] To the extent to which the Commonwealth’s submissions about s 61 and s 51(xxxix) depended upon distinguishing between the power to spend and the power to engage in activities, those submissions should be rejected as resting upon a distinction that cannot be maintained. The distinction cannot be maintained if proper account is taken of the incidental power. … [342] It would be wrong to read the incidental power as having some narrow or confined application in connection with the execution of powers vested by the Constitution in the Government of the Commonwealth. The matters incidental to the execution of the power of the Executive to withdraw from the Treasury (under an appropriation made by law) and spend the money so withdrawn are not limited to matters incidental to the withdrawal; they must include matters incidental to the execution of the power to spend what has been 121 withdrawn. And if the Executive has power to spend money for a particular purpose, it is not to be supposed that the incidental power would not authorise the enactment of legislation facilitating and controlling that expenditure and its application. Legislation which facilitates and controls the expenditure and its application is not a narrow subject. It includes the specification (as in the Impugned Act) of conditions that must be met if the payment is to be made. But it extends to providing for terms and conditions regulating the manner and circumstances 268

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Pape v Federal Commissioner of Taxation cont. of application of the money provided. No distinction can then be drawn between cases where the money is to be spent by giving it to a third party and cases where it is to be spent directly by or on behalf of the Commonwealth. The spending of money by giving it to a third party may be classed as “spending” and spending it directly by or on behalf of the Commonwealth might be classed as the Commonwealth “engaging in activities”. But even if such a classification could be made it supports no different engagement of the incidental power. That is why attention must focus on the ambit of the executive power, not upon a supposed distinction between spending money and engaging in activities. [343] The executive power of the Commonwealth extends to the execution and maintenance of the Constitution and of the laws of the Commonwealth. The Executive’s power to spend money is not confined to expenditures made in accordance with a law made by the Parliament under an enumerated head of legislative power. But, for the reasons given earlier in connection with the executive power generally, the executive power to spend is not unlimited. Its limits are determined in the same manner as are the limits on the executive power generally. … [346] It is said that, because there is a national economic crisis or emergency to which a national response must be made, the executive power under s 61, to spend money that has been lawfully appropriated, extends to spending money to meet that crisis in whatever way the 122 Executive chooses. And it is said that the Impugned Act is valid because the Parliament may make a law providing for the execution of the power of the Executive by requiring the Commissioner of Taxation to make the payments that the Impugned Act requires. [347] 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. [348] 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?” [349] 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. [350] 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 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. [351] The question for decision is whether the response that has been made (by the enactment of the Impugned Act) is within power. That question is not answered by pointing out why the Impugned Act was enacted. [352] 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 123 questions about the relationship between the judicial and other branches of government. … [3.340]

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Pape v Federal Commissioner of Taxation cont. [355] 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. 124 [356] Legislative measures with respect to taxation and social security benefits would find ready support in s 51(ii), s 51(xxiii) and s 51(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.

Notes&Questions

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1.

2.

Combet v Commonwealth (2005) 224 CLR 494 established that it is the legislature, and not the Court, that must identify “the degree of specificity with which the purpose of an appropriation is identified”. Gummow, Crennan and Bell JJ observed in Pape v Federal Commissioner of Taxation (2009) 238 CLR 1 at 78: “One consequence is that, as Jacobs J indicated in the AAP Case (1975) 134 CLR 338 at 411, 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’.” The Tax Bonus for Working Australians Act (No 2) 2009 (Cth) (the Tax Bonus Act), created an entitlement to payments (referred to as a tax bonus) for certain persons and established a duty on the Commissioner of Taxation to pay those persons the tax bonus to which they were entitled. The majority in Pape held that this was supported by s 51(xxxix) which gives the Parliament the power to make laws “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”. The incidental power would also likely support legislative provisions that created offences of defrauding the Commonwealth in relation to such payments: see Williams v Commonwealth (2012) 248 CLR 156; [2012] HCA 23 at [158]. In an earlier case, the executive power extended to the commemoration of the Bicentenary of Australian settlement and thus “to the incorporation of a company as a means for carrying out and implementing a plan or programme for the commemoration”; s 51(xxxix) then authorised 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”, subject to what would now be analysed as the implied freedom of political communication: Davis v Commonwealth (1988) 166 CLR 79 at 95. In Pape, however, French CJ cautioned (at [10]), however, that the ambit of s 51(xxxix) was limited: Future questions about the application of the executive power to the control or regulation of conduct or activities under coercive laws, absent authority supplied by a statute made under some head of power other than s 51(xxxix) alone, are likely to be answered conservatively [See discussion of the authorities in Zines (5th ed, 2008),

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pp 414-415]. They are likely to be answered bearing in mind the cautionary words of Dixon J in the Communist Party Case [Australian Communist Party v Commonwealth (1951) 83 CLR 1 at 187]: History and not only ancient history, shows that in countries where democratic institutions have been unconstitutionally superseded, it has been done not seldom by those holding the executive power. Forms of government may need protection from dangers likely to arise from within the institutions to be protected. In that connection, and as appears below, the identification of a class of events or circumstances which might, under some general rubric such as “national concern” or “national emergency”, enliven the executive power does not arise for consideration here.

3.

Section 51(xxxix) does extend however to legislation protecting the Commonwealth against sedition. Under this provision the Commonwealth Parliament may make laws to protect and maintain the existing Government and the existing departments and officers of the Government in the execution of their powers (see R v Kidman (1915) 20 CLR 425, 440). … The Commonwealth Parliament, which is the legislative organ of the Commonwealth, has power to make laws to protect them and itself, not only against physical attack and interference, but also against utterance of words intended to excite disaffection against the Government (in the sense stated) and to prevent or impede the operation of governmental agencies which prepare for defence and conduct warlike operations during war in accordance with the policy of the Government, which is responsible to the Parliament of the Commonwealth. The encouragement of internal disloyalty is a grave obstacle to effective defence against an external enemy. Such encouragement is an incitement to the promotion of civil war at a time when the country is defending itself against hostile attack. … Parliament has provided protection for the Government and governmental activities. Protection against fifth column activities and subversive propaganda may reasonably be regarded as desirable or even necessary for the purpose of preserving the constitutional powers and operations of governmental agencies and the existence of government itself. The prevention and punishment of intentional excitement of disaffection against the Sovereign and the Government is a form of protective law for this purpose which is to be found as a normal element in most, if not all, organized societies. I agree that the Commonwealth Parliament has no power to pass a law to suppress or punish political criticism, but excitement to disaffection against a Government goes beyond political criticism. (Burns v Ransley (1949) 79 CLR 101 at 110; see also R v Sharkey (1949) 79 CLR 121.)

4.

For robust criticism of the idea of broad inherent executive authority derived from the character and status of the Commonwealth as the national government, see A Twomey, “Pushing the Boundaries of Executive Power – Pape, the Prerogative and Nationhood Powers” (2010) 34 Melbourne University Law Review 313.

Non-statutory executive power (or capacity) to contract and spend [3.360] The different approaches of the majority judges in Pape and the reluctance of all

justices to spell out the full extent of Commonwealth executive power, left open a series of questions about the scope of the Commonwealth’s non-statutory capacity to contract and spend public money and the subject matters in relation to which it could exercise any such power. The contrast between the approach of French CJ and the other members of the majority (Gummow, Crennan and Bell JJ) is particularly noteworthy. Nonetheless, following Pape, the “common assumption” appears to have been that the Commonwealth’s executive power, in general, extended at least as far as the subject matters of its legislative power. An alternative formulation was that the executive power extended to “all [3.360]

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matters on which Commonwealth legislative power might be exercised, even though it had not been exercised”, subject to exceptions required by the separation of powers. It was against this background that Mr Ron Williams brought a challenge to the National School Chaplaincy Programme. He was the father of four children who attended the Darling Heights Public School in Queensland. He challenged payments by the Commonwealth to the Scripture Union of Queensland (SUQ) under a contract (the funding agreement or the DHF agreement) between the Commonwealth and SUQ pursuant to which SUQ provided chaplaincy services at the school and to the school community. The Funding Agreement was made under the National School Chaplaincy Programme (the Programme) and incorporated the National School Chaplaincy Programme Guidelines (the Guidelines). The Guidelines, issued by the Commonwealth Department of Education, Science and Training, were not given effect by statute; nor was any specific power given to the Minister to enter contracts or expend funds pursuant to the Guidelines. The Guidelines predicated funding for chaplaincy services on an agreement between the Commonwealth and a school, an education authority or a chaplaincy service provider – but did not require that the contracting entity be a corporation within the meaning of s 51(xx) of the Constitution. Funding for the Programme was appropriated under annual Appropriation Acts from 2007–2008 to 2011–2012 (described in detail at [226]–[233]). The Court quickly disposed of two issues, Mr Williams’ standing to bring the challenge and his substantive challenge based on s 116 of the Constitution. • Standing could largely be put to one side because the intervening States had standing to challenge the Commonwealth’s power to enter the agreement and make payments under it; his standing to challenge the appropriations was also dealt with summarily. • Section 116 provides in part that “no religious test shall be required as a qualification for any office or public trust under the Commonwealth”. The challenge based on this provision failed because the chaplains were employed by SUQ and the fact that their positions were ultimately funded by the Commonwealth was not enough to make them the holder of a Commonwealth office. The challenge turned to the Commonwealth’s power to enter and perform the Agreement by payment of funds to SUQ. The validity of the appropriation that lay behind the payment did not need to be considered. As Pape decided, appropriation “does not supply legal authority for the Commonwealth’s engagement in the activities in connexion with which the moneys are to be spent” (quoting Mason in the AAP Case at 131). Accordingly, when challenged, the source of the Commonwealth’s legal authority to enter the contract and pay moneys under it had to be identified. The Commonwealth relied on the executive power under Ch II of the Constitution “to spend so as to fund” the NSCP (Gummow and Bell JJ at [88]). The case proceeded initially on the basis of the common assumption outlined above until the ground shifted during the hearing. In the end, a majority rejected the common assumption. French CJ, Gummow, Bell and Crennan JJ effectively held that the contract between the Commonwealth and SUQ was invalid because the Commonwealth lacked the capacity (or power) to enter a contract on such a subject matter without legislative support. Hayne and Kiefel JJ effectively held that, assuming that legislative support was required, no Commonwealth law could provide that sanction given that the subject matter of the contract was outside the scope of Commonwealth legislative power. (Hayne J also discussed at length the capacity question without finally deciding it.) Heydon J dissented, accepting the common assumption, denying that legislative support was required and holding that the subject matter of the contract was within the scope of Commonwealth legislative, and therefore executive, power. 272

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The judgments are wide-ranging and lengthy. They canvass multiple strands of reasoning and justification for limiting Commonwealth executive power, including the federal character of the Commonwealth and its powers; the potential expansion of Commonwealth legislative power if s 51(xxxix) allowed regulation of the subject matter of Commonwealth expenditure; the need to protect the Parliament’s control over public finances and the (almost) equal powers of the Senate to approve financial initiatives; the constraints imposed by the separation of powers, rendering nonsensical an absolute proposition that executive power extends to anything that could be the subject matter of legislation; the superfluity of s 96 (and the bypassing of the States) if the Commonwealth Executive could spend on any subject matter without using the vehicle of s 96; and the absence of any counterpart to s 109 to resolve conflicts between Commonwealth and State executive power. These themes are developed to a greater or lesser extent in each of the judgments extracted here.

Williams v Commonwealth [3.370] Williams v Commonwealth (2012) 248 CLR 156; [2012] HCA 23 at 723–728, 733–741, 750–754, 761–773, 813–822, 827–831 [The facts of this case are described in [3.440].] French CJ: 184 [20] The Commonwealth submitted that the power of the Executive Government to enter into the DHF Agreement and to make payments to SUQ pursuant to the agreement and the NSCP derived from s 61 of the Constitution. [21] It should be emphasised at the outset that the executive power of the Commonwealth is to be understood as a reference to that power exercised by the Commonwealth as a polity through the executive branch of its government. It is, as the plaintiff submitted, an error to treat the Commonwealth Executive as a separate juristic person. The character of the Executive Government as a branch of the national polity is relevant to the relationship between the power of that branch and the powers and functions of the legislative branch and, particularly, the Senate. … 186 [26] In its written submissions, filed before the hearing, the Commonwealth made what was presented as a limiting assumption for the purpose of its argument. The assumption was that the breadth of the executive power of the Commonwealth, in all of its aspects, is confined to the subject matters of express grants of power to the Commonwealth Parliament in ss 51, 52 and 122 of the Constitution, together with matters that, because of their distinctly national character or their magnitude and urgency, are peculiarly adapted to the government of the country and otherwise could not be carried on for the public benefit. The “aspects” of executive power so limited were said to be 187 the prerogative in the “narrower sense” [That is, in the sense used by Blackstone as outlined above], the powers that arise from the position of the Commonwealth as a national government, and the capacities which the Commonwealth has in common with other legal persons. The limiting negative assumption was linked to a broad positive proposition that the executive power in all of its aspects extends to the subject matter of grants of legislative power to the Commonwealth Parliament. In oral argument at the hearing the Commonwealth nevertheless disavowed the proposition that the “executive power authorises the Executive to do anything which the Executive could be authorised by statute to do, pursuant to one of the powers in s 51”. In later written submissions, filed after the hearing, in response to submissions by Tasmania and South Australia, the Commonwealth appeared to revive its broad proposition and contended that the executive power supports executive action dealing at least with matters within the enumerated heads of Commonwealth legislative power. [27] The broad proposition in each of its manifestations should not be accepted. The exercise of legislative power must yield a law able to be characterised as a law with respect to a subject matter within the constitutional grant of legislative authority to the Parliament. The subject matters of legislative power are specified for that purpose, not to give content to the executive power. Executive action, except in the exercise of delegated legislative authority, is qualitatively different from legislative action. As Isaacs J said in R v Kidman [(1915) 20 CLR 425 at 441]: The Executive cannot change or add to the law; it can only execute it. [3.370]

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Williams v Commonwealth cont. To say positively and without qualification that the executive power in its various aspects extends, absent statutory support, to the “subject matters” of the legislative powers of the Commonwealth is to make a statement the content of which is not easy to divine. Neither the drafting history of s 61 of the Constitution nor its judicial exegesis since Federation overcomes that difficulty. [28] In reliance upon its broad premise, the Commonwealth submitted that the making of the DHF Agreement and the payments to SUQ were within the executive power in that: 1.

The DHF Agreement provided for, and its performance involved, the provision of benefits to students, a subject matter covered by s 51(xxiiiA) of the Constitution.

2.

The DHF Agreement was entered into with, and provided for assistance to, a trading corporation formed within the limits of the Commonwealth, a subject matter covered by s 51(xx) of the Constitution. 188

[29] The Commonwealth referred to a number of authorities in support of its broad proposition. The first of those was Victoria v Commonwealth and Hayden (“the AAP Case”) [(1975) 134 CLR 338]. The focus in that case, which concerned the validity of Commonwealth payments to regional councils to provide welfare services, was upon the term “purposes of the Commonwealth” in s 81 of the Constitution. Gibbs J said [(1975) 134 CLR 338 at 379]: We are in no way concerned in the present case to consider the scope of the prerogative or the circumstances in which the Executive may act without statutory sanction. Observations about the executive power made in the judgments in the AAP Case were generally cast in a form reflecting the negative limiting assumption which stood at the threshold of the Commonwealth’s initial written submissions in this case. Barwick CJ said that the Executive “may only do that which has been or could be the subject of valid legislation.” [(1975) 134 CLR 338 at 362] Gibbs J said that the Executive “cannot act in respect of a matter which falls entirely outside the legislative competence of the Commonwealth” [(1975) 134 CLR 338 at 379]. The content of executive power as Mason J explained it “does not reach beyond the area of responsibilities allocated to the Commonwealth by the Constitution” [(1975) 134 CLR 338 at 396]. His Honour did not define those responsibilities in terms of the subject matters of Commonwealth legislative competence. Rather, he described them as [(1975) 134 CLR 338 at 396]: 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. This was no simplistic mapping of the executive power on to the fields of legislative competency. His Honour described his view of the executive power as confirmed by the decisions of this Court in Commonwealth v Colonial Combing, Spinning and Weaving Co Ltd (“the Wooltops Case”) [(1922) 31 CLR 421] and Commonwealth v Australian Commonwealth Shipping Board [(1926) 39 CLR 1; [1926] HCA 39]. In relation to the Wooltops Case his Honour referred in his footnote [(1975) 134 CLR 338 at 397, fn 40] to the joint judgment of Knox CJ and Gavan Duffy J, in which the impugned agreements were held invalid for want of constitutional or statutory authority [(1922) 31 CLR 421 at 432]. His footnoted reference [(1975) 134 CLR 338 at 397, fn 41] to Commonwealth 189 Shipping Board was to a passage in the joint judgment of Knox CJ, Gavan Duffy, Rich and Starke JJ in which their Honours held that an activity unwarranted in express terms by the Constitution could not be vested in the Executive [(1926) 39 CLR 1 at 10]. [30] In R v Duncan; Ex parte Australian Iron and Steel Pty Ltd [(1983) 158 CLR 535], Mason J held that Commonwealth executive power extended to the making of inter-governmental agreements between the Commonwealth and the States “on matters of joint interest, including matters which require for their implementation joint legislative action”, so long as the means used and the ends sought were consistent with the Constitution [(1983) 158 CLR 535 at 560]. His Honour said that the executive power of the Commonwealth was not “limited to heads of power which correspond with enumerated heads of Commonwealth legislative power under the Constitution.” [(1983) 158 CLR 535 at 560] Referring back to what he had said in the AAP Case, he added [(1983) 158 CLR 535 at 560]: 274

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Williams v Commonwealth cont. 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. These remarks are consistent with a concept of executive power in which the character and status of the Commonwealth as a national government is an aspect of the power and a feature informing all of its aspects, including the prerogatives appropriate to the Commonwealth, the common law capacities, powers conferred by statutes, and the powers necessary to give effect to statutes. His Honour’s conception of executive power was consistent with that most recently discussed by this Court in Pape v Federal Commissioner of Taxation [(2009) 238 CLR 1 at 62–63 [131]–[132] per French CJ, 90–91 [239] per Gummow, Crennan and Bell JJ]. It does not afford support for the broad proposition that the Executive Government of the Commonwealth can do anything about which the Parliament of the Commonwealth could make a law. [31] In Davis v Commonwealth [(1988) 166 CLR 79 at 94 per Mason CJ, Deane and Gaudron JJ] the Court was again concerned with the way in which the “character and status of the Commonwealth as the government of the nation” underpinned executive action and associated incidental legislation to celebrate the bicentenary of first European settlement in Australia. It was in the context of that question 190 that Mason CJ, Deane and Gaudron JJ held the executive power to extend most clearly “in areas beyond the express grants of legislative power … where Commonwealth executive or legislative action involves no real competition with State executive or legislative competence.” [(1988) 166 CLR 79 at 93–94] It is necessary, in considering Davis, to have regard not only to the questions which fell for decision in that case, but also to the observation of Brennan J that [(1988) 166 CLR 79 at 109–110]: Section 61 refers not only to the execution and maintenance of the laws of the Commonwealth (a function characteristically to be performed by execution of statutory powers); it refers also to “the execution and maintenance of this Constitution” (a function to be performed by execution of powers which are not necessarily statutory). (emphasis added) What his Honour said was not a prescription for a general non-statutory executive power to enter contracts and spend public money on any matter that could be referred to a head of Commonwealth legislative power or could be authorised by a law of the Commonwealth. What Davis was about is encapsulated in the observation by Wilson and Dawson JJ [(1988) 166 CLR 79 at 104]: In this case it is enough to say that, viewing its powers as a whole, the Commonwealth must necessarily have the executive capacity under s 61 to recognize and celebrate its own origins in history. The constitutional distribution of powers is unaffected by its exercise. [32] R v Hughes [(2000) 202 CLR 535], also cited in the Commonwealth’s submissions, concerned the validity of a State law conferring on the Commonwealth Director of Public Prosecutions the power to institute and carry on prosecutions for indictable offences against the law of the State. In the joint judgment, consideration was given to whether the provisions of the relevant Commonwealth Act authorising regulations conferring such functions on a Commonwealth officer could be supported as laws with respect to matters incidental to the executive power pursuant to s 51(xxxix) [(2000) 202 CLR 535 at 554–555 [38] per Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ]. The underlying inter-governmental agreement was referred to in the joint judgment as a possible illustration of the propositions stated by Mason J in Duncan and referred to earlier in these reasons. 191 [33] The Commonwealth also relied upon observations in the judgments of McHugh and Gummow JJ in Re Residential Tenancies Tribunal (NSW); Ex parte Defence Housing Authority [(1997) 190 CLR 410]. As McHugh J correctly pointed out, much Commonwealth executive activity does not depend on statutory authorisation. He said [(1997) 190 CLR 410 at 455]: 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. Gummow J also said [(1997) 190 CLR 410 at 464]: [3.370]

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Williams v Commonwealth cont. The executive power of the Commonwealth enables the undertaking of “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” (footnote omitted) [34] There are undoubtedly significant fields of executive action which do not require express statutory authority. As was accepted by the Attorney-General of Tasmania in further written submissions, filed after the oral hearing, the executive power of the Commonwealth extends to the doing of all things which are necessary or reasonably incidental to the execution and maintenance of a valid law of the Commonwealth once that law has taken effect. That field of action does not require express statutory authority, nor is it necessary to find an implied power deriving from the statute. The necessary power can be found in the words “execution and maintenance … of the laws of the Commonwealth” appearing in s 61 of the Constitution. The field of non-statutory executive action also extends to the administration of departments of State under s 64 of the Constitution and those activities which may properly be characterised as deriving from the character and status of the Commonwealth as a national government. To accept those propositions is not to accept the broad proposition for which the Commonwealth contended, nor does such a proposition have the authority of a decision of this Court. [In a different context it was rejected in the Full Federal Court in Ruddock v Vadarlis (2001) 110 FCR 491 at 542 [192] per French J, Beaumont J agreeing at 514 [95]]. [35] The Commonwealth sought to support the challenged expenditure on two other bases. The first was that the Commonwealth possesses capacities, in common with other legal persons, including the capacity to obtain information, to spend money lawfully available to be spent or 192 to enter into contracts. As initially formulated by the Commonwealth, these capacities were not limited in their exercise by reference to the subject matters of the legislative powers of the Commonwealth. The second basis, put in oral argument, was that: a relevantly unlimited power to pay and to contract to pay money is to be found in the character and status of the Commonwealth as a national government just as it would be inherent in the character and status of the Commonwealth were it a natural person. The Commonwealth accepted that, unlike a natural person, its power to pay and to contract to pay money was constrained by the need for an appropriation and by the requirements of political accountability. [36] In oral argument, the Commonwealth submitted that its capacity to contract, and to pay money pursuant to contract, extends at least to payments made on terms and conditions that could be authorised or required by an exercise of the legislative power of the Commonwealth under s 51. The metes and bounds of aspects of executive power, however, are not to be measured by undiscriminating reference to the subject matters of legislative power. Those subject matters are diverse in character. Some relate to activities, others to classes of persons or legal entities, some to intangible property rights and some to status. Some are purposive. [As suggested by Dixon J in Stenhouse v Coleman (1944) 69 CLR 457; [1944] HCA 36 at 471 (CLR). See also Murphyores Incorporated Pty Ltd v Commonwealth (1976) 136 CLR 1 at 11–12 per Stephen J; [1976] HCA 20.] The submission invites the Court to determine whether there is an hypothetical law which could validly support an impugned executive contract and expenditure under such a contract. There might be a variety of laws which could validly authorise or require contractual or spending activity by the Commonwealth. The location of the contractual capacity of the Commonwealth in a universe of hypothetical laws which would, if enacted, support its exercise, is not a means by which to judge its scope. [37] The Commonwealth submitted that the exercise by its Executive Government of its capacities does not involve interference with what would otherwise be the legal rights and duties of others, nor does the Executive Government thereby displace the ordinary operation of the laws of the State or Territory in which the relevant acts take place. This is correct as far as it goes but does not provide an answer to the question of validity. There are consequences for the Federation which flow from attributing to the Commonwealth a wide executive power to expend moneys, whether or not referable to a head of Commonwealth legislative power, and subject only to the requirement of a 193 parliamentary appropriation. Those consequences are not to be minimised by the absence of any legal effect upon the laws of the States. Expenditure by the Executive Government of the Commonwealth, 276

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Williams v Commonwealth cont. administered and controlled by the Commonwealth, in fields within the competence of the executive governments of the States has, and always has had, the potential, in a practical way of which the Court can take notice, to diminish the authority of the States in their fields of operation. That is not a criterion of invalidity. It is, however, a reason not to accept the broad contention that such activities can be undertaken at the discretion of the Executive, subject only to the requirement of appropriation. [38] That aspect of executive power, which has been described as the “mere capacities of a kind which may be possessed by persons other than the Crown” [Davis v Commonwealth (1988) 166 CLR 79 at 108 per Brennan J], is not open-ended. The Commonwealth is not just another legal person like a private corporation or a natural person with contractual capacity. The governmental contract “is now a powerful tool of public administration.” [Seddon, Government Contracts: Federal, State and Local (4th ed, 2009), p 65] As Professor Winterton said of the capacities exercised by the Executive Government [Winterton, Parliament, the Executive and the Governor-General (1983), p 121]: Important governmental powers, such as the power to make contracts, may be attributed to this source, but the general principle must not be pressed too far. It can be applied only when the executive and private actions are identical, but this will rarely be so, because governmental action is inherently different from private action. Governmental action inevitably has a far greater impact on individual liberties, and this affects its character. Relevantly for present purposes, there is also the impact of Commonwealth executive power on the executive power of the States. [39] The Commonwealth submitted that the necessary condition, imposed by s 83 of the Constitution, for the exercise of the Commonwealth power to spend, namely that it be under appropriation made by law, had been met by the enactment of Appropriation Acts in each of the relevant years. It was not in dispute that, although a necessary condition of the exercise of executive spending power, an appropriation under s 83 is not a source of that power [Pape v Federal Commissioner of Taxation (2009) 238 CLR 1 at 55 [111] per French CJ, 73–74 [178]–[180] per Gummow, Crennan and Bell JJ, 113 [320] per Hayne and Kiefel JJ, 210–211 [601], 211–212 [603], 212 [606] per Heydon J]. For the reasons given by Gummow and Bell JJ [reasons of Gummow and Bell JJ at [113]–[117]] it is not necessary in this case to deal with the sufficiency of the parliamentary appropriations relied upon by the Commonwealth. No Act of Parliament existed which 194 conferred power on the Executive Government of the Commonwealth to make the impugned payments to SUQ [The Commonwealth’s submission that s 44 of the Financial Management and Accountability Act 1997 (Cth) provided such authority is dealt with later in these reasons and in the reasons of Gummow and Bell JJ at [102]–[103]]. The lawfulness of the payments therefore depended critically upon whether s 61 of the Constitution supplied that authority. That question invites consideration of the construction of s 61 by reference to its drafting history and the concept of executive government which informed it. … [French CJ then surveyed the drafting history of s 61.] … 202 … [55] The Commonwealth submitted that it had been part of the accepted understanding of the Constitution, since the time of the National Australasian Convention debates, that the executive power of the Commonwealth supports executive acts dealing at least with matters within the enumerated heads of Commonwealth legislative power. There is no doubt that at the time of the Convention debates, the statement that the distribution of executive powers in a federation would follow the distribution of legislative powers was not novel. However, its meaning appears to have been no clearer then than it is now. [56] There is little evidence to support the view that the delegates to the National Australasian Conventions of 1891 and 1897–1898, or even the leading lawyers at those Conventions, shared a clear common view of the working of executive power in a federation. The Constitution which they drafted incorporated aspects of the written Constitutions of the United States and Canada, and the concept of responsible government derived from the British tradition. The elements were 203 mixed in the Constitution to meet the Founders’ perception of a uniquely Australian Federation. In respect of executive power, however, that perception was not finely resolved. … 205 [60] There is no clear evidence of a common understanding, held by the framers of the Constitution, that the executive power would support acts of the Executive Government of the Commonwealth [3.370]

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Williams v Commonwealth cont. done without statutory authority provided they dealt with matters within the enumerated legislative powers of the Commonwealth Parliament. A Commonwealth Executive with a general power to deal with matters of Commonwealth legislative competence is in tension with the federal conception which informed the function of the Senate as a necessary organ of Commonwealth legislative power. It would undermine parliamentary control of the executive branch and weaken the role of the Senate. The plaintiff submitted that the requirement of parliamentary appropriation is at best a weak control, particularly given the power of the Executive to advise the Governor-General to specify the purpose of appropriations. The inability of the Senate under s 53 to initiate laws appropriating revenue and its inability to amend proposed laws appropriating revenue for “the ordinary annual services of the Government” also point up the relative weakness of the Senate against an Executive Government which has the confidence of the House of Representatives. As the Solicitor-General of Queensland put it in oral argument, the Senate has limited powers to deal with an Appropriation Bill, whereas it has much greater powers with respect to general legislation which might authorise the Executive to spend money in specific ways. [61] The function of the Senate as a chamber designed to protect the interests of the States may now be vestigial. That can be attributed in part to the predicted evolution whereby responsible government has resulted in a powerful Executive which, using the mechanisms of party discipline, is in a position to exert strong influence over the government party or parties in both Houses. The Executive has become what has been described as “the parliamentary wing of a political party” which “though it does not always control the Senate … nevertheless dominates the Parliament and directs most exercises of the legislative power.” [Mantziaris, “The Executive – A Common Law Understanding of Legal Form and Responsibility”, in French, Lindell and Saunders (eds), Reflections on the Australian Constitution (2003) 125 at p 130.] However firmly established that system may be, it has not resulted in any constitutional inflation of the scope of 206 executive power, which must still be understood by reference to the “truly federal government” of which Inglis Clark wrote in 1901 and which, along with responsible government, is central to the Constitution. The executive capacity to contract and spend [62] The Commonwealth’s principal submissions located the contractual and spending powers of the Executive in that aspect of executive power analogous to the capacities of a legal person. Those submissions invite reflection upon the way in which contractual and other “capacities” of the Executive have been considered by this Court in the past. [63] An early example of such consideration concerned the power of the Executive to undertake inquiries. It was described by Griffith CJ in Clough v Leahy [(1904) 2 CLR 139 at 156, Barton and O’Connor JJ concurring at 163; [1904] HCA 38. The case did not concern the executive power of the Commonwealth but that of a State government to establish a royal commission of inquiry.] as “not a prerogative right” but “a power which every individual citizen possesses”. [An analogy not accepted by Mason J in Victoria v Australian Building Construction Employees’ and Builders Labourers’ Federation (1982) 152 CLR 25; [1982] HCA 31 at 88–89 (CLR).] That characterisation does not convey any coercive element in the power. However, coercion could be supported by statute. As O’Connor J said in Huddart, Parker & Co Pty Ltd v Moorehead [(1909) 8 CLR 330; [1909] HCA 36 at 377 (CLR) …]: The right to ask questions, which, as was pointed out by this Court in Clough v Leahy, the Executive Government has in common with every other citizen, is of little value unless it has behind it the authority to enforce answers and to compel the discovery and production of documents. (footnote omitted) Importantly, the extent of the “power” was not at large. It was at least constrained by the distribution of powers in the Constitution. In Colonial Sugar Refining Co Ltd v Attorney-General (Cth) [(1912) 15 CLR 182; [1912] HCA 94] the Court divided equally on the question whether s 51(xxxix) of the Constitution authorises legislation, incidental to the executive power, compelling persons to give evidence on matters 207 outside the constitutional authority of the Commonwealth [Griffith CJ and Barton J answered the question in the negative; Isaacs and Higgins JJ dissented.]. Griffith CJ, who viewed the question from a federal perspective, rejected the proposition, as one which [(1912) 15 CLR 182 at 194; see also at 207 per Barton J]: 278

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Williams v Commonwealth cont. implicitly denies the whole doctrine of distribution of powers between the Commonwealth and the States, which is the fundamental basis of the federal compact. On appeal to the Privy Council, pursuant to s 72 of the Constitution, the view of the Chief Justice and Barton J prevailed [Attorney-General (Cth) v Colonial Sugar Refining Co Ltd (1913) 17 CLR 644; [1914] AC 237]. … [65] Section 61 was invoked by the Commonwealth as a source of contractual power in the Wooltops Case [(1922) 31 CLR 421]. The Commonwealth had made agreements, without statutory backing, under which it would give necessary regulatory consents … for the acquisition of wool 208 and sheepskins and the manufacture and sale of wooltops by the Colonial Combing, Spinning and Weaving Co Ltd. Section 61, however, did not confer power directly on the Commonwealth to make or ratify the agreements. In so holding, Knox CJ and Gavan Duffy J accepted that Ministers could make contracts in the administration of their departments pursuant to s 64 [(1922) 31 CLR 421 at 432]. The impugned agreements had not been made on that basis. Isaacs J held that the Crown’s discretion to make contracts involving the expenditure of public money would not be entrusted to Ministers unless sanctioned either by direct legislation or by appropriation of funds [Commonwealth v Colonial Combing, Spinning and Weaving Co Ltd at 451]. [66] An attempt by the Commonwealth to invoke s 61 in support of an agreement for the supply of plant made by a Commonwealth statutory authority was unsuccessful in Commonwealth v Australian Commonwealth Shipping Board [(1926) 39 CLR 1]. The primary debate was about the scope of the statutory powers conferred on the Shipping Board and their constitutional underpinning. Knox CJ, Gavan Duffy, Rich and Starke JJ, however, noted that the executive power of the Commonwealth had been touched on in submissions and said [(1926) 39 CLR 1 at 10]: it is impossible to say that an activity unwarranted in express terms by the Constitution is nevertheless vested in the Executive, and can therefore be conferred as an executive function upon such a body as the Shipping Board. [67] As a general rule the power of the Commonwealth to make agreements has always been regarded as subject to statutory constraints. [Brown v West (1990) 169 CLR 195; [1990] HCA 7 at 202 (CLR). See also Commonwealth v Colonial Combing, Spinning and Weaving Co Ltd (1922) 31 CLR 421 at 450 per Isaacs J.] So much was explained in Commonwealth v Colonial Ammunition Co Ltd [(1924) 34 CLR 198; [1924] HCA 5]. The appropriation provisions of the Constitution could not be relied upon to support an exercise of executive power involving expenditure which was dependent for its validity upon the satisfaction of a statutory condition [(1924) 34 CLR 198 at 222–225 per Isaacs and Rich JJ]. A general appropriation was sufficient to satisfy “one ‘necessary legal condition of the transaction’”; it did not satisfy all other legal conditions [New South Wales v Bardolph (1934) 52 CLR 455 at 469 per Evatt J, commenting on the judgment of Isaacs and Rich JJ in Colonial Ammunition]. … 211 [74] An important support for the exercise of contractual power by an executive government in advance of parliamentary appropriation was established by the decision of this Court in New South Wales v Bardolph [(1934) 52 CLR 455]. The case is authority for the proposition, applicable to the Commonwealth, that the Executive Government of New South Wales could enter into a binding contract absent prior parliamentary appropriation for the expenditure of money under the contract. The case concerned a contract made by the Tourist Bureau of New South Wales for the provision of advertising services. The Tourist Bureau had been recognised for many years, both in Parliament and out, as part of the established service of the Crown [(1934) 52 CLR 455 at 496 per Rich J]. Rich J characterised the making of the contract for advertising services as “an ordinary incident 212 of this particular function of Government” [(1934) 52 CLR 455 at 496]. Starke J made observations to similar effect [(1934) 52 CLR 455 at 502–503.]. Dixon J, with whom Gavan Duffy CJ agreed [(1934) 52 CLR 455 at 493], made a similar point, saying that [(1934) 52 CLR 455 at 508]: 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. (emphasis added) [3.370]

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Williams v Commonwealth cont. The words emphasised in the judgment of Dixon J reflect a characterisation of the contract in issue in Bardolph upon which all the members of the Court agreed. That characterisation suggests that the State executive power considered in Bardolph was analogous to the powers of Commonwealth Ministers, derived from s 64 of the Constitution, in relation to the administration of government departments. The case is not authority for the existence of a general contractual power derived from s 61 capable of exercise without statutory authority. [75] Professor Enid Campbell criticised the apparent discrimen in Bardolph which would confine its application to contracts “for the public service as are incidental to the ordinary and well recognized functions of Government”. [Campbell, “Commonwealth Contracts” (1970) 44 Australian Law Journal 14 at 15, quoting New South Wales v Bardolph (1934) 52 CLR 455 at 496 per Rich J.] She made the point that a rule which made the validity of non-statutory Crown contracts dependent upon the normality of their subject matters as an aspect of public administration had “the effect of enlarging the area of executive authority by prescription.” [Campbell (1970) at 15.] In the context of s 61 of the Constitution and its relationship to s 64, she said [Campbell (1970) at 17. See also Campbell, “Federal Contract Law” (1970) 44 Australian Law Journal 580]: The Crown’s power to contract is not, it is true, a prerogative power, but if the power to contract without statutory authorization has to be found within the terms of The Constitution, s 61 seems to provide just as defensible a constitutional basis as does s 64. 213 [76] Professor Leslie Zines expressed his agreement with Professor Campbell, observing [Zines (5th ed, 2008), pp 349-350]: What activities the government should engage in is the province of the executive. What is normal or not will depend partly on what policies and activities have in the past been pursued and for what length of time. Why should this matter to the issue of whether parliamentary authorisation is needed? Having regard to the sufficiency of parliamentary control of appropriations, it was “hard to see how the supposed distinction between types of contracts leads to any significant bolstering of responsible government.” [Zines (5th ed, 2008), p 350.] Professor Zines pointed to a passage from the judgment of Dixon J in Bardolph where, without referring to any limitations, he said [Zines (5th ed, 2008), p 350, referring to New South Wales v Bardolph (1934) 52 CLR 455 at 509 per Dixon J]: 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. [77] Doctor Nicholas Seddon has observed, in reflecting upon Professor Campbell’s view, that in contrast to the executive power of New South Wales, the Commonwealth’s power is limited. Further, as he has correctly pointed out, the assumption that the Commonwealth is not exercising powers that are peculiarly governmental when entering into a contract is increasingly unable to be justified [Seddon, Government Contracts: Federal, State and Local (4th ed, 2009), pp 64-65]. Professor Winterton, who thought that the Commonwealth would have power to enter into contractual relations about matters outside the sphere of its legislative power, also observed that [Winterton, Parliament, the Executive and the Governor-General (1983), p 47]: bearing in mind the ability of governments to use their contract power to achieve de facto regulation of an activity, the significance of the federal contract power should not be underrated. (footnote omitted) Professor Cheryl Saunders and Kevin Yam, in a paper published in 2004, pointed to the increasing use of government contracts for the performance of governmental functions and their use as a regulatory tool [Saunders and Yam, “Government Regulation by Contract: Implications for the Rule of Law” (2004) 15 Public Law Review 51 at 52]. That is perhaps illustrated in this case by the quasi-regulatory setting in which the DHF Agreement was made. That setting included the NSCP 214 Guidelines, issued by the responsible department. Under those guidelines, participating schools and their communities were required to “engage a school chaplain and demonstrate how the services provided 280

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Williams v Commonwealth cont. by the school chaplain achieve the outcomes required by the [NSCP].” Funding provided under the program could “only be used for expenditure that directly relates to the provision of chaplaincy services.” Funding was provided “subject to the provision of appropriate project performance reporting.” [78] The DHF Agreement was itself prescriptive about the nature of the services to be delivered by SUQ in the Darling Heights State School and required SUQ chaplains used in the school to sign the NSCP Code of Conduct which formed part of the DHF Agreement. Its implementation was amenable to the grant of supervision and control appropriate to the delivery of a governmental service. The agreement provided that funding was conditional upon, inter alia, the submission of “a detailed financial statement regarding all income and expenditure relating to the [NSCP]” and progress reports. It was also agreed that in the event of a breach of the NSCP Code of Conduct by the school chaplain, the Commonwealth might require SUQ to repay some or all of the funding provided. [79] In considering criticisms of the taxonomy of government contracts referred to in the judgments in Bardolph, it is necessary to bear in mind that that case concerned the power of the Executive in a setting analogous to that of a unitary constitution. It was not a case about the relationship between Commonwealth and State Executives and their contractual and spending powers under a federal constitution. Nor did it involve a consideration of the relationship between the executive power conferred by s 61 of the Constitution and the administration of departments of State of the Commonwealth for which s 64 of the Constitution provides. The latter section may give rise to questions of classification. Any consideration of its operation must recognise that it is a constitutional provision written to accommodate change in governmental practice. It is not a repository for bright line categories. As Gleeson CJ said in Re Patterson; Ex parte Taylor [(2001) 207 CLR 391; [2001] HCA 51 at 403 [15] (CLR)]: The concept of administration of departments of State, appearing in s 64, is not further defined. This is hardly surprising. The practices and conventions which promote efficient and effective government administration alter over time, and need to be able to respond to changes in circumstances and in theory. In similar vein, Gummow and Hayne JJ observed [(2001) 207 CLR 391 at 460 [211]]: 215 The Court should favour a construction of s 64 which is fairly open and which allows for development in a system of responsible ministerial government. Although both those comments were made in a case concerning the validity of the appointment of two persons to administer the same government department, they have a more general application relevant to the scope of the concept of departmental administration with which s 64 is concerned. It is sufficient for present purposes to say that the issue before the Court in Bardolph did not involve consideration of the powers of the Executive Government of the Commonwealth acting under ss 61 and 64 of the Constitution. Moreover, subsequent commentary about the application of that case to the Commonwealth Executive occurred in a setting in which parliamentary appropriations were thought to be a source of substantive power to spend public money. 741 [80] A wide view of the executive power to make contracts pursuant to s 61 has been expressed by a number of academic writers … although not without misgivings …. Professor Winterton, in his seminal textbook Parliament, the Executive and the Governor-General, said [Winterton (1983), p 45]: As the common law powers of the Crown have been incorporated into the executive power of the Commonwealth in s 61, the Crown in right of the Commonwealth has inherited this common law power; accordingly, the Commonwealth government has power to enter into contracts without prior parliamentary authorization. (footnotes omitted) He cited in support a comment by Viscount Haldane in Kidman v Commonwealth [[1926] ALR 1], and an observation by Aickin J, with which Barwick CJ agreed, in Ansett Transport Industries (Operations) Pty Ltd v Commonwealth [(1977) 139 CLR 54 at 113, Barwick CJ agreeing at 61; [1977] HCA 71]. [81] In Kidman, Viscount Haldane, in the course of argument in the Privy Council, referred to the decision of the Privy Council in Commercial Cable Co v Newfoundland Government [[1916] 2 AC 610] and said [[1926] ALR 1 at 2]: [3.370]

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Williams v Commonwealth cont. In that case we distinctly laid it down ... that the Governor-General, as representing the Crown, could enter into contracts as much as he liked, and even, if he made the words clear, to bind himself personally. In an obiter observation, Aickin J said in Ansett Transport Industries [(1977) 139 CLR 54 at 113]: It is plain that even without statutory authority the Commonwealth in the exercise of its executive power may enter into binding contracts affecting its future action. 216 [82] Ansett Transport Industries was primarily a case about the power of the Executive to agree to exercise statutory powers in a particular way. The agreements in issue in that case had received parliamentary approval in a statute. The case did not raise for consideration the issues which have been raised in this case and particularly the federal dimension which this case raises. Viscount Haldane’s remarks in Kidman harked back to a decision made in the somewhat different setting of the British North America Act. Neither of the quoted passages are, with respect, of assistance in the resolution of the matter now before this Court. Conclusion [83] Neither the DHF Agreement nor the expenditure made under it was done in the administration of a department of State in the sense used in s 64 of the Constitution. Neither constituted an exercise of the prerogative aspect of the executive power. Neither involved the exercise of a statutory power, nor executive action to give effect to a statute enacted for the purpose of providing chaplaincy or like services to State schools. Whatever the scope of that aspect of the executive power which derives from the character and status of the Commonwealth as a national government, it did not authorise the contract and the expenditure under it in this case. The field of activity in which the DHF Agreement and the expenditure was said, by the Commonwealth, to lie within areas of legislative competency of the Commonwealth Parliament under either s 51(xxiiiA) or s 51(xx) of the Constitution. Assuming it to be the case that the DHF Agreement and expenditure under it could be referred to one or other of those fields of legislative power, they are fields in which the Commonwealth and the States have concurrent competencies subject to the paramountcy of 217 Commonwealth laws effected by s 109 of the Constitution. The character of the Commonwealth Government as a national government does not entitle it, as a general proposition, to enter into any such field of activity by executive action alone. Such an extension of Commonwealth executive powers would, in a practical sense, as Deakin predicted, correspondingly reduce those of the States and compromise what Inglis Clark described as the essential and distinctive feature of “a truly federal government”. Gummow and Bell JJ: 232 [134] 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 co-extensive with those activities which could be the subject of legislation supported by any head of power in s 51 of the Constitution. [135] 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 [Commonwealth v Colonial Combing, Spinning and Weaving Co Ltd (1922) 31 CLR 421 at 433–434]. 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 heads and other heads of legislative power in Ch II 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 [R v Kidman (1915) 20 CLR 425; [1915] HCA 58], the Executive cannot create a new offence [Davis v Commonwealth (1988) 166 CLR 79 at 112], and cannot dispense with the operation of any law [Port of Portland Pty Ltd v Victoria (2010) 242 CLR 348; [2010] HCA 44 at 357–358 [5]–[8] (CLR). See also the remarks of Lord Hoffmann in Higgs v Minister of National Security [2000] 2 AC 228 at 241–242]. [136] Secondly, such a proposition would undermine the basal assumption of legislative predominance inherited from the United Kingdom and so would distort the relationship between Ch I and Ch II of the Constitution. No doubt the requirement of s 64 of the Constitution that Ministers of State be senators 282

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Williams v Commonwealth cont. 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. [Ansett Transport Industries (Operations) Pty Ltd v Commonwealth (1977) 139 CLR 54 at 87. See also Egan v Willis (1998) 195 CLR 424; [1998] HCA 71 at 451–452 [42] (CLR).] 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 [Re Patterson; Ex parte Taylor (2001) 207 CLR 391 at 464 [218]]. 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 233 appropriation process. And that appropriation process 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]. [137] The 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. The determinative question [138] The Commonwealth parties make the general submission that the executive power extends to entry into contracts and the spending of money without any legislative authority beyond an appropriation. The determinative question on this Special Case thus becomes 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. [139] In his reply, the 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. [Compare New South Wales v Bardolph (1934) 52 CLR 455 at 496 per Rich J, 507 per Dixon J; Selway, The Constitution of South Australia (1997), pp 93-94.] These functions would vary from time to time [cf Ex parte Professional Engineers’ Association (1959) 107 CLR 208 at 274–275 per Windeyer J; [1959] HCA 47], but would include the operation of the Parliament [Brown v West (1990) 169 CLR 195; [1990] HCA 7 at 201 (CLR)], and the servicing of the departments of State of the Commonwealth, the administration of which is referred to in s 64 of the Constitution, including the funding of activities in which the departments engage or consider engagement [cf AAP Case (1975) 134 CLR 338 at 362 per Barwick CJ]. The plaintiff accepted that this aspect of the executive power encompassed expenditure without legislative backing beyond an appropriation and the Commonwealth parties appeared to accept that concession. [140] 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 Commonwealth parties submitted that the expenditure at least now had that quality because expenditures under the NSCP had commenced in the 2007 school year 234 and had continued thereafter. That submission assumes the determination of the issue on which the Special Case turns and should not be accepted. [141] The plaintiff agrees that the ordinary and well-recognised functions of the Government of the Commonwealth include the Commonwealth entering into agreements with the States, particularly with reference to the referral by State Parliaments of matters pursuant to Constitutions 51(xxxvii), and to the engagement of s 96 of the Constitution. No doubt a range of agreements and understandings between the Commonwealth and State Executive Governments, recently exemplified in ICM Agriculture [(2009) 240 CLR 140], would be supported upon the plaintiff’s thesis. [142] The plaintiff did not support the outcome in Pape as having rested upon an ordinary and well-recognised activity of the Government of the Commonwealth. Rather, Pape was said by the [3.370]

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Williams v Commonwealth cont. plaintiff to have been decided in a “different universe of discourse” to that of the NSCP because the expenditure with which Pape was concerned was effected with legislative support. Several points should be made in response. [143] First, while the engagement of the legislative branch of government 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 the by-passing by the Executive 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 go so far as to support the entry by the Commonwealth into the Funding Agreement, and the making of payments by the Commonwealth to SUQ. [144] In Pape [(2009) 238 CLR 1 at 62–63 [131]–[133] per French CJ, 90–91 [239] per Gummow, Crennan and Bell JJ], approval was given to the statement by Mason CJ, Deane and Gaudron JJ in Davis v Commonwealth [(1988) 166 CLR 79 at 93–94] 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 235 question” [(1988) 166 CLR 79 at 111]. This consideration reflects concern with the federal structure and the position of the States. [145] 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. [146] 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 [cf the scheme the subject of the Appropriation (HIH Assistance) Act 2001 (Cth), which was considered but not challenged in HIH Claims Support Ltd v Insurance Australia Ltd (2011) 244 CLR 72; [2011] HCA 31]. In Pape, the short-term, extensive and urgent nature of the payments to be made 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 conduct of the public school system in Queensland, where the Darling Heights State Primary School is situated, is the responsibility of that State. Indeed, Queensland maintains its own programme for school chaplains. [147] Section 96 of the Constitution gives to the Parliament a means for the provision, upon conditions, of financial assistance by grant to Queensland and to any other State. This is subject to the qualification stated in ICM Agriculture [(2009) 240 CLR 140 at 170 [46] per French CJ, Gummow and Crennan JJ, 198 [136]–[137] per Hayne, Kiefel and Bell JJ] that the legislative power conferred by s 96 and s 51(xxxvi) 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. [148] With respect to the significance of s 96 in the federal structure, the following passage from the reasons of Barwick CJ in the AAP Case is in point [(1975) 134 CLR 338 at 357–358]: Section 96 … has enabled the Commonwealth to intrude in point of policy and perhaps of administration into areas outside Commonwealth legislative competence. No doubt, in a real sense, the basis on which grants to the claimant States have been quantified by the Grants Commission has further expanded the 236 effect of the use of s 96. But a grant under s 96 with its attached conditions cannot be forced upon a State: the State must accept it with its conditions. Thus, although in point of economic fact, a State on occasions may have little option, these intrusions by the Commonwealth into areas of State power which action under 284

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Williams v Commonwealth cont. s 96 enables, wear consensual aspect. Commonwealth expenditure of the Consolidated Revenue Fund to service a purpose which it is not constitutionally lawful for the Commonwealth to pursue, is quite a different matter. If allowed, it not only alters what may be called the financial federalism of the Constitution but it permits the Commonwealth effectively to interfere, without the consent of the State, in matters covered by the residue of governmental power assigned by the Constitution to the State. [149] What then was said by the defendants for the conclusion contrary to that which would follow from the above? The Commonwealth parties’ ultimate submission [150] With the support of SUQ, and the qualified support of South Australia, the Commonwealth parties presented their ultimate submission. This was 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. [151] 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 Commonwealth [(1954) 92 CLR 424; [1954] HCA 20 at 461 (CLR)] 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 Commonwealth v John Fairfax & Sons Ltd (1980) 147 CLR 39; [1980] HCA 44 at 51 (CLR)]. [152] One example of what may be seen through those spectacles is the debate (which does not fall for consideration here) as to the extent to which by contract the Commonwealth may fetter future executive 237 action in a matter of public interest [See the discussion of the authorities by Gibbs CJ in A v Hayden (1984) 156 CLR 532; [1984] HCA 67 at 542–543 (CLR)]. Other examples are given in the reasons of Crennan J [at [519]–[523]]. [153] Consideration of the issues which the Commonwealth parties’ submission presents (contrary to what is put in support by South Australia) is not assisted by reference to the position of the Sovereign in the United Kingdom of Great Britain and Ireland at the time of the framing of the Constitution. It was, as explained in Sue v Hill [(1999) 199 CLR 462; [1999] HCA 30 at 497–498 [83] (CLR)], then well understood that the term “the Crown” was used in a number of metaphorical senses. Five of these were considered in Sue v Hill [(1999) 199 CLR 462 at 498–503 [84]–[94]]. The first concerned the use of “the Crown” in English law as a device to dispense with the recognition of the State as a juristic person. In his doctoral thesis, which was presented some years after Federation and only published in 1987, Dr H V Evatt referred to the failure in English constitutional theory “to separate the personal rights of the monarch from the legal authority of the State” [Evatt, The Royal Prerogative (1987), p 7]. [154] To this may be added the point made by the plaintiff that the 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) [63 & 64 Vict c 12], and identified in covering cl 6. [155] The assimilation of the executive branch to a natural person and other entities with legal personality was said by the Commonwealth parties to be supported by statements by Brennan CJ and by Gummow and Kirby JJ in The Commonwealth v Mewett [(1997) 191 CLR 471 at 491, 550-551; [1997] HCA 29. See also at 530 per Gaudron J]. These were to the effect that s 75(iii) of the Constitution denies any operation of doctrines of executive immunity which might be pleaded to any [3.370]

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Williams v Commonwealth cont. action for damages in respect of a common law cause of action. The absence from the Constitution of doctrines of executive immunity assists those private parties who have dealings with the executive branch of government. Different considerations arise where the question is one of executive capacity to enter into such dealings. In that situation there arise the considerations referred to at the outset of these reasons, 238 respecting both the federal structure and the relationship between Ch I and Ch II of the Constitution. [156] In oral submissions the Commonwealth Solicitor-General resisted the suggestion that the references made in earlier submissions to the character and status of the Commonwealth as a national government, in support of his submission as to the assimilation of the capacities of the Commonwealth to contract and to spend to those of other legal persons, may conflate the capacities to contract and to spend with the distinct and special financial privileges associated with the prerogative; the latter have been referred to earlier in these reasons [At [122]-[124]]. [157] Rather, the 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 the provision of an appropriation and the spending power. The second shows the tenacity of his successors to the views of Sir Robert Garran, noted earlier in these reasons … . Further, for the reasons already given, considerations of constitutional coherence point away from the existence of an unqualified executive power to contract and to spend. [158] 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 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. For example, the provisions added respectively as s 29A(1) and s 29B to the Crimes Act 1914 (Cth) by s 16 of the Crimes Act 1926 (Cth) created offences of obtaining from the Commonwealth, with intent to defraud, “any chattel, money, valuable security or benefit” by any false pretence, and also of imposing or endeavouring to impose upon the Commonwealth any untrue representation with a view to obtain money or any other benefit or advantage [See now the extensive provision made by Div 135 of Pt 7.3 of the Criminal Code (Cth)]. 239 [159] These submissions by the Commonwealth parties as to the scope of the executive power to contract and to spend should not be accepted. Hayne J: 252 [198] The position that emerges from Pape – that federal considerations limit the scope of the executive power – is supported by and entirely consistent with prior decisions. No less importantly, the textual and structural considerations that have caused this Court not to embrace the repeated submission by the Commonwealth that its power to spend money lawfully available for expenditure is unlimited are equally applicable whether that power to spend is found in s 81 of the Constitution (a view now discarded) or is part of the executive power of the Commonwealth referred to in s 61 of the Constitution, as Pape decided. [199] The conclusion that, consistent with earlier decisions, Pape holds that federal considerations limit the scope of the executive power is reason enough to reject so much of the submissions of the Commonwealth parties as asserted that “[t]here is no authority restricting the scope of the Commonwealth’s power to spend”. It is, however, necessary to examine other aspects of the broad basis submission advanced by the Commonwealth parties. It is convenient to deal next with the Commonwealth parties’ reliance on the notion of the Executive’s “capacities”. … 253 [204] It is not to be assumed, and was not demonstrated, that the Executive Government of the Commonwealth has all of the capacities – in the sense of powers – to contract and spend that a natural person has. There is no basis in law for attributing human attitudes, form, or personality either to the 286

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Williams v Commonwealth cont. federal polity that was created by the Constitution or, as the Commonwealth parties sought to do, to one 254 branch of the government of that polity – the Executive. The argument asserting that the Executive Government of the Commonwealth should be assumed to have the same capacities to spend and make contracts as a natural person was no more than a particular form of anthropomorphism writ large. It was an argument that sought to endow an artificial legal person with human characteristics. The dangers of doing that are self-evident. [205] Of course, it is important to recognise that s 61 begins by providing that “[t]he executive power of the Commonwealth is vested in the Queen and is exercisable by the Governor-General as the Queen’s representative”. But, as was pointed out in Sue v Hill [(1999) 199 CLR 462; [1999] HCA 30 at 497–503 [83]–[94] (CLR)], the personification of the Executive as “the Crown” (or, I would add, as “the Queen” or “the Governor-General as the Queen’s representative”) must not be permitted to disguise the several different senses in which the term “the Crown” is used or to deny that the Executive Government of the Commonwealth is the executive government of an artificial legal entity – a polity. [206] In 1896, Pollock, in the course of discussing the subject of “Persons”, wrote [Pollock, A First Book of Jurisprudence for Students of the Common Law (1896), p 110]: “In political discourse we so constantly personify nations that we almost forget the artificial character of our language: and yet the unrestrained use of metaphor in politics is quite capable of grave consequences.” (emphasis added) So, too, in talking of the new federal polity established by the Constitution – “one indissoluble Federal Commonwealth under the Crown of the United Kingdom of Great Britain and Ireland, and under the Constitution hereby established” – or of the Executive Government of that polity, the unrestrained use of the metaphor of personification is “quite capable of grave consequences”. For as Pollock observed [A First Book of Jurisprudence for Students of the Common Law (1896), p 113], “the State” is “[t]he greatest of artificial persons” and “it depends on the legal institutions and forms of every commonwealth whether and how far the State or its titular head is officially treated as an artificial person”. That is, the extent to which the Commonwealth may make contracts and dispose of property does not depend on assumptions about its capacities, whether based in analogies or otherwise, but instead must be ascertained by interpreting the Constitution. [207] As a polity, the Commonwealth makes contracts. But contrary to the submissions advanced on behalf of the Commonwealth parties, what has been said in the cases about whether a contract with a government is effective if, when the contract was made, there was no parliamentary 255 appropriation of the money necessary for the government to perform its contracted obligations, does not establish that the capacities of the Commonwealth or of the Executive Government of the Commonwealth should be understood to be the same as those of a natural person. In particular, what was said by Dixon J in New South Wales v Bardolph [(1934) 52 CLR 455; [1934] HCA 74 at 509 (CLR)] goes no further than to make the point that it is “a function of the Executive, not of Parliament, to make contracts on behalf of the Crown”. But as Dixon J also made plain [(1934) 52 CLR 455 at 509]: 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. (emphasis added) Accordingly, Dixon J concluded [(1934) 52 CLR 455 at 510], “the prior provision of funds by Parliament is not a condition preliminary to the obligation of the contract” (emphasis added). Neither in Bardolph nor in the earlier decisions in Commonwealth v Colonial Combing, Spinning and Weaving Co Ltd (“the Wooltops Case”) [(1922) 31 CLR 421; [1922] HCA 62] and Kidman v Commonwealth [(1925) 37 CLR 233; [1925] HCA 55. See also, on application for special leave to appeal to the Privy Council, (1925) 32 ALR 1] did the Court decide how far the capacity of the Executive to make a contract on behalf of the Commonwealth extends. [3.370]

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Williams v Commonwealth cont. [208] In Bardolph, Dixon J, with whom Gavan Duffy CJ concurred [(1934) 52 CLR 455 at 493], said [(1934) 52 CLR 455 at 508]: “No statutory power to make a contract in the ordinary course of administering a recognised part of the government of the State [of New South Wales] 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.” And the reasons of other members of the Court proceeded [(1934) 52 CLR 455 at 496 per Rich J; at 502-503 per Starke J; at 517-518 per McTiernan J] from the same starting point to a 256 consideration of whether the contract in issue was, as Rich J put it [(1934) 52 CLR 455 at 496], “incidental to the ordinary and well-recognised functions of Government”. [209] Contrary to the submissions of the Commonwealth parties, the Court did not deal only with the question of the authority of the individuals in question to make a contract on behalf of the State. The reasons of the Court in Bardolph directed attention not only to the authority of those who had made the contract in issue but also to the power (or what the Commonwealth parties in this matter identified as “capacity”) to enter into the contract. And for the purposes of that case it was sufficient to decide that the contract was one which was made “in the ordinary course of administering a recognised part of the government of the State” [(1934) 52 CLR 455 at 508 per Dixon J] or was “incidental to the ordinary and well-recognised functions of Government” [(1934) 52 CLR 455 at 496 per Rich J]. No broader proposition defining what kinds of contract the executive government (of a State) may make, and for what purposes they may be made, emerges from Bardolph. It is important to notice, however, that in Bardolph it was submitted [(1934) 52 CLR 455 at 493] that “[t]he power of the Executive to enter into a contract is absolute so far as it is not fettered by the express statute” (emphasis added). The concern of the Court to locate the making of the contract in issue in Bardolph within the ordinary course of the administration of a recognised part of the government points strongly to the conclusions that the proposition advanced in Bardolph was not accepted and that the very similar submission made by the Commonwealth parties in this case should not be accepted. [210] Further, nowhere in the decisions of this Court in the Wool Tops Case or in Kidman was it suggested that the power of the Executive to make a contract on behalf of the Commonwealth, and to discharge the monetary obligations assumed by the Commonwealth under that contract, is unlimited. Kidman turned on whether there was statutory authorisation for the contracts and payments in question. The conclusion having been reached [(1925) 37 CLR 233 at 241 per Isaacs J; see also at 239 per Knox CJ; at 247-248 per Higgins J; at 251 per Rich J. Starke J agreed at 252 that the appeal should be dismissed but gave no reasons] that “there was no lack of legislative authority to the Commonwealth to make such contracts, provided the ships were for defence purposes” and that there was “the necessary parliamentary appropriation”, no question of executive power to contract or spend arose. … 257 [212] As the Commonwealth parties submitted, these cases do suggest that a polity may make at least some contracts without statutory authority. But what is presently important is that these cases, particularly the decisions in Bardolph and the Wool Tops Case, recognise that neither a State’s nor the Commonwealth’s power to make contracts is unlimited. [213] Clough v Leahy [(1904) 2 CLR 139; [1904] HCA 38] is sometimes treated as standing for the proposition advanced by the Commonwealth parties and by the fourth defendant that the Commonwealth has the same power (or “capacity”) to contract as a natural person. But it does not support that proposition. [214] In Clough, Griffith CJ (with whom Barton and O’Connor JJ concurred [(1904) 2 CLR 139 at 163]) was responding to a submission that a commission appointed under letters patent was “‘unlawful’ and ‘illegal’” [(1904) 2 CLR 139 at 155; see also at 150]. Griffith CJ recognised that a State, as a polity, acts through individuals and accepted that an officer of the State executive was not somehow prevented, when “acting for the Crown” [(1904) 2 CLR 139 at 161], from undertaking an action “that every man is free to do” [(1904) 2 CLR 139 at 157], being “any act that does not unlawfully interfere with the liberty or reputation of his neighbour or interfere with the course of justice” [(1904) 2 CLR 139 at 157]. Griffith CJ’s statement – that “[t]he liberty of another can only be interfered with according to law, but, subject to that limitation, every person is free to make any inquiry he chooses; and that which is lawful 288

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Williams v Commonwealth cont. to an individual can surely not be denied to the Crown, when the advisers of the Crown think it desirable 258 in the public interest to get information on any topic” [(1904) 2 CLR 139 at 157. See also Lockwood v Commonwealth (1954) 90 CLR 177 at 182 per Fullagar J; [1954] HCA 31.] (emphasis added) – is no more than the application of the two propositions that have been identified. So much is evident from the reference to “the advisers of the Crown” getting information. It is also evident from his Honour’s earlier observation that “[t]he power of inquiry … is a power which every individual citizen possesses” [(1904) 2 CLR 139 at 156] (emphasis added), the later observation that “[t]he inquiry simply amounts to the asking of questions of persons willing to give information” [(1904) 2 CLR 139 at 160] (emphasis added) and his Honour’s later reference to “any person, purporting to act under the authority of a Royal Commission … [who] was acting for the Crown” [(1904) 2 CLR 139 at 161] (emphasis added). Contrary to the submissions of the Commonwealth parties and the fourth defendant, Clough does not stand for a general proposition that a polity, or the Commonwealth in particular, has the same powers or capacities as a natural person. [215] Metaphorical comparisons between artificial legal entities and natural persons, though colourful and sometimes provocative of further thought [cf Clough v Leahy (1904) 2 CLR 139 at 156–157], do not provide a sound foundation for legal analysis. An anthropomorphic view of the powers of a corporation incorporated according to statute may now be available but that is only by dint of specific statutory provision giving such a corporation “the legal capacity and powers of an individual both in and outside this jurisdiction” [Corporations Act 2001 (Cth), s 124(1)]. There is no warrant for adopting such an understanding of the capacities of the Executive Government of the Commonwealth, or the polity more generally, or of the capacity of the Executive in particular, or the polity more generally, to spend money or to make a contract. [216] Not least is that understanding not available in respect of expenditure because an anthropomorphic view of the Executive’s (or polity’s) capacity to spend assumes that the Executive (or the polity) is spending its “own” money, just as a natural person may do. But that equation of the position of the Executive and a natural person ignores that the money being spent is public money. It thus ignores the carefully crafted checks (worked out in England over so many years and reflected in Australia in the Constitution, especially Ch IV) that effect parliamentary control over the raising and expenditure of public moneys. As will next be demonstrated, parliamentary control over raising and expenditure of public moneys denies the notion that the 259 Consolidated Revenue Fund may be spent as the Executive chooses. And once it is accepted, as it must be, that the Constitution does provide for parliamentary control over the raising and expenditure of public moneys, the anthropomorphic view of the Executive’s capacity to spend that lay at the heart of much, if not all, of the argument advanced on behalf of the Commonwealth parties is necessarily falsified. [217] The Commonwealth, as a polity, can make contracts and can outlay public moneys. It is the Executive’s function, not the Parliament’s, to make contracts and expend public moneys. But neither the Executive nor the polity itself can be assumed to have the same powers (or capacities) to contract and spend as a natural person. The question to be answered in this case is whether there was power to make the particular expenditures for which the Darling Heights Funding Agreement provided and to undertake the obligation to make those expenditures. … 265 Bounds to the power to spend? [234] Does the Executive’s power to spend extend to any expenditure that the Parliament could authorise (the narrow basis submission of the Commonwealth parties)? Is it a power that is unbounded (the broad basis submission)? Is neither proposition correct? [235] It is convenient to approach these questions from a proposition about the parliamentary control of expenditure which can be identified as running beneath the submissions made by the Commonwealth parties about what (if any) are the bounds to the Executive’s power to spend. [236] The submissions of the Commonwealth parties asserted that parliamentary control over expenditure can cease at the point where the Parliament has identified in an Appropriation Act (with such particularity as the Parliament has chosen) the purposes for which 266 expenditures can be made. How the Executive uses the moneys thus appropriated was treated as a matter for the Executive [3.370]

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Williams v Commonwealth cont. unless or until the Parliament has provided otherwise. That is, the Commonwealth parties submitted that how and on what terms money lawfully drawn from the Consolidated Revenue Fund may be applied in making what the relevant Appropriation Acts referred to as “payments for expenses, acquiring assets, making loans or paying liabilities” is to be determined at the discretion of the Executive unless and until the Parliament otherwise provides. Absent legislative provision to the contrary, what expenses may be paid, what assets acquired, what loans made or what liabilities paid would all be for the Executive to decide. [237] The proposition that parliamentary control over expenditure can cease at the point of appropriation of the Consolidated Revenue Fund may or may not appear, on its face, to be large or dubious. For present purposes, however, attention is usefully directed to the qualification to the proposition – unless and until the Parliament otherwise provides – and what legislative power the Parliament could exercise to “otherwise provide” and regulate the expenditures that may be made of money lawfully drawn from the Consolidated Revenue Fund. Unless the qualification is soundly based, and the Parliament could otherwise provide, the submission of the Commonwealth parties would entail that appropriation by law is the only control the Parliament has over expenditure of at least some public moneys. [238] Plainly the Parliament could otherwise provide in any case in which a law controlling expenditure of money drawn from the Consolidated Revenue Fund would be a law with respect to an enumerated head of legislative power. Observing this to be so echoes the narrow basis submission of the Commonwealth parties about the ambit of the executive power to spend. But what of the case where no head of legislative power, other than the incidental power (s 51(xxxix)), could be engaged? Would s 51(xxxix) be a sufficient basis for the Parliament to control the expenditure of money lawfully drawn from the Consolidated Revenue Fund for purposes and in circumstances which do not engage any other head of legislative power? Would such a law be a law with respect to a matter “incidental to the execution of any power vested by this Constitution … in the Government of the Commonwealth”? [239] The answers to these questions depend upon how the relevant “power vested by this Constitution … in the Government of the Commonwealth” is identified. The broad basis submission of the Commonwealth parties depended upon the relevant executive power being not only sufficiently but completely identified as power to spend money lawfully appropriated. 267 [240] In cases of the kind dealt with in Pape – where the expenditures in question were directed to meeting a national emergency – and other cases of the kind commonly grouped under the notion of “nationhood”, the “power vested by this Constitution … in the Government of the Commonwealth” is not identified only as a power to spend money; it is a different species of executive power. So, as has been mentioned, the decision in Pape depended upon the conclusion that the determination by the Executive of the need for an immediate fiscal stimulus enlivened the power under s 51(xxxix) to enact a law incidental to the execution of a species of executive power identified as the determination of the existence of a national crisis or emergency. But it was not suggested that the payments in issue in this case could be supported on this basis and it is, therefore, not necessary to explore here what content could be given to the notion of a “nationhood” power. Attention must focus upon cases other than those said to engage a “nationhood” power. [241] If the “power vested by this Constitution … in the Government of the Commonwealth” includes a power to spend, as the Executive chooses, any money lawfully appropriated, regardless of the purposes for which or circumstances in which the expenditure is to be applied, several consequences would follow which at least suggest that the proposition is flawed. [242] First, this understanding of the operation of s 51(xxxix) with s 61 in relation to Commonwealth expenditure would work a very great expansion in what hitherto has been understood to be the ambit of Commonwealth legislative power. It must be accepted that the Engineers’ Case [Amalgamated Society of Engineers v Adelaide Steamship Co Ltd (1920) 28 CLR 129; [1920] HCA 54] teaches that this is an observation that could conclude debate only if some notion of reserved powers were revived [See, for example, New South Wales v Commonwealth (Work Choices Case) (2006) 229 CLR 1; [2006] HCA 52 at 119–120 [194] (CLR)]. But it is an observation that suggests the need to pause before concluding that the premise which underpins it is sound. 290

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Williams v Commonwealth cont. [243] Second, and more tellingly, the understanding of the operation of s 51(xxxix) in relation to Commonwealth expenditure that is under consideration would not only give s 96 of the Constitution a place in the constitutional framework very different from the place it has hitherto been understood to occupy but also render it otiose. [244] Section 96 provides: During a period of ten years after the establishment of the Commonwealth and thereafter until the Parliament otherwise 268 provides, the Parliament may grant financial assistance to any State on such terms and conditions as the Parliament thinks fit. [245] In Victoria v Commonwealth (“the Second Uniform Tax Case”) [(1957) 99 CLR 575; [1957] HCA 54 at 604 (CLR)], Dixon CJ said of s 96 that: “It confers a bare power of appropriating money to a purpose and of imposing conditions.” On the basis [(1957) 99 CLR 575 at 605] that the scope and purpose of the power given by s 96 is “to be ascertained on the footing that it was not transitional but stood with the permanent provisions of the Constitution”, Dixon CJ said [(1957) 99 CLR 575 at 605] that “it is apparent that the power to grant financial assistance to any State upon such terms and conditions as the Parliament thinks fit is susceptible of a very wide construction in which few if any restrictions can be implied”. [246] As Dixon CJ recorded [(1957) 99 CLR 575 at 609], “the course of judicial decision” had put out of consideration other, more limited constructions of s 96. In particular, the course of decision precluded adopting “a not improbable supposition that the framers” conceived s 96: 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 [(1957) 99 CLR 575 at 609]. Dixon CJ continued [(1957) 99 CLR 575 at 609–610]: 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 269 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. (emphasis added) [247] Two points of immediate relevance emerge from this understanding of s 96. First, it is an understanding that is not consistent with reading s 51(xxxix) as supporting any and every law that provides for or otherwise controls the expenditure of money lawfully appropriated from the Consolidated Revenue Fund regardless of the purposes for which or circumstances in which the expenditure is to be made. It is an understanding of s 96 that is not consistent with the view of the intersection between s 51(xxxix) and the executive power to spend which underpinned the submissions of the Commonwealth parties because it would leave s 96 no work to do at all: not even [3.370]

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Williams v Commonwealth cont. to provide (whether only in the first 10 years of Federation or more permanently) for supplementation of State resources “when some special or particular need or occasion arose”. All the work done by s 96 could be done by laws made under s 51(xxxix). Section 96 would be superfluous. Yet as Mason J observed of s 96 in the AAP Case [(1975) 134 CLR 338 at 398]: its presence confirms what is otherwise deducible from the Constitution, that is, that the executive power is not unlimited and that there is a very large area of activity which lies outside the executive power of the Commonwealth but which may become the subject of conditions attached to grants under s 96. And although Mason J made these observations in a context where it was assumed that the power to spend is found in s 81, it is nonetheless apposite to recognise that Barwick CJ [(1975) 134 CLR 338 at 357] and Gibbs J [(1975) 134 CLR 338 at 374] in the AAP Case, and Starke J [(1945) 71 CLR 237 at 266] in Attorney-General (Vic) v Commonwealth (“the Pharmaceutical Benefits Case”), also saw Commonwealth of Australia Constitution as limiting the scope of that power. 270 [248] Second, whereas nothing in s 96 would enable the making of a coercive law (one that demands obedience), a law made under s 51(xxxix) as incidental to a power to spend money lawfully appropriated could demand obedience from the recipient. The “consensual aspect” of grants to the States under s 96 – the requirement that “the State must accept it with its conditions” [AAP Case (1975) 134 CLR 338 at 357] – would be obliterated. And because a law made under s 51(xxxix) could demand obedience, the federal considerations mentioned by Dixon CJ in the Second Uniform Tax Case, by reference to Melbourne Corporation v Commonwealth, as not presented by an exercise of the power conferred by s 96 would arise. That is, if, as the Commonwealth parties’ submissions in this case entailed, s 51(xxxix) could be engaged to make a law regulating the application of any money lawfully appropriated, regardless of the purposes for which or circumstances in which it is to be applied, the basic considerations of federal structure which yielded the decision in Melbourne Corporation would fall squarely for consideration. And those considerations of federal structure point directly against reading the relevant “power vested by this Constitution … in the Government of the Commonwealth”, with which s 51(xxxix) intersects, as sufficiently or completely described as the Executive’s power to spend money that has been lawfully appropriated. [249] How is the limit on the Executive’s power to spend to be described? [250] Opinion has divided [AAP Case (1975) 134 CLR 338 at 356–357 per Barwick CJ, 374 per Gibbs J; cf at 393 per Mason J] on the importance that should be attached to the surplus revenue provision made by s 94 of the Constitution in deciding the ambit of the Commonwealth’s power to spend. As the plurality observed in Pape [(2009) 238 CLR 1 at 91 [240]]: The governments of the States have the interest given by s 94 of the Constitution in the distribution of all surplus revenue of the Commonwealth, but … the Commonwealth has no obligation to tailor its expenditure to provide a surplus [Surplus Revenue Case (1908) 7 CLR 179]. For that reason alone it may be that s 94 is of only limited significance in deciding what is the scope of the executive power to spend. But even if s 94 gives no real guidance to how to express the limitation on the power to spend, s 94 does not point away from the conclusion that the power to spend is limited. [251] As has already been emphasised, all decisions of this Court to date have, rightly, acknowledged that some limiting notion additional to the 271 requirement of lawful appropriation must be introduced to the description of the executive power in question. That limiting notion has been seen as required, first and foremost, by the fact that the Constitution divides and distributes powers between the Commonwealth and the States. That is, recognition that the Parliament of the Commonwealth is a Parliament of limited legislative power [Pharmaceutical Benefits Case (1945) 71 CLR 237 at 271 per Dixon J] entails that the Executive’s power to spend is limited. An immediate textual foundation for limiting the power to spend has not infrequently been found in s 96. And the 292

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Williams v Commonwealth cont. conclusion that the Commonwealth’s executive power to expend moneys that have been appropriated is not unlimited is strengthened by recognising the intersection between the executive power and s 51(xxxix). [252] The limit on the power to spend must be consistent with the general proposition that it is for the Parliament and not the Executive to control expenditure. And the Parliament can control expenditure only by legislation. Once it is recognised, as it was in Pape, that “appropriation made by law” [s 83] is “not by its own force the exercise of an executive or legislative power to achieve an objective which requires expenditure” [(2009) 238 CLR 1 at 72 [176]], it follows that the Parliament’s control over expenditure can be exercised by not only the mechanisms of appropriation but also more specific legislation. It follows that the relevant “power vested by this Constitution … in the Government of the Commonwealth” in relation to the spending of money, which is the power with which s 51(xxxix) intersects, must be understood as limited by reference to the extent of the legislative power of the Parliament. [253] It follows that the broad basis submission made by the Commonwealth parties – that the Executive’s power to spend money lawfully appropriated is unlimited – should be rejected. … 281 [288] … But to conclude that the Constitution requires that the Executive never spend money lawfully available for expenditure without legislative authority to do so is to decide a large and complex issue. It is better that it not be decided until it is necessary to do so. The conclusion that the impugned payments could not have been the subject of a valid law of the Parliament suffices to conclude the issues that have been raised. Crennan J: 343 [487] … [T]he plaintiff contended that the Commonwealth Executive’s entry into and making of payments under the Funding Agreement could not be described as spending on “the ordinary annual services of the Government” and therefore could not be treated as authorised under that rubric. For the purposes of this argument, the plaintiff drew a distinction between, on the one hand, the Commonwealth Executive’s power to enter into and make payments under contracts for “the ordinary annual services of the Government” and, on the other, entering contracts and spending as a means of carrying out or implementing a new policy. The NSCP, as at its instigation, was said to fall into the latter category. Although the plaintiff did not challenge the validity of the initial appropriation, the plaintiff contended that the NSCP at that point should have been subject to greater scrutiny by Parliament by reason of Parliament’s control of expenditure. This led to the next contention that, generally, in the absence of a situation calling for the exercise of prerogative power, or a national emergency [as in Pape], or the need for some unique national enterprise [as in Davis (1988) 166 CLR 79], spending associated with a new policy requires express authorisation by Parliament beyond an appropriation – both because of the principles of responsible government and the separation of powers. It was posited that, if spending on a new policy is represented as spending on “the ordinary annual services of the Government”, the Executive would not be accountable to Parliament in respect of that policy, as required by the principles of responsible government, because the Senate would effectively be bypassed by reason of ss 53 and 54 of the Constitution. The thrust of these submissions was that spending on the activities of the NSCP amounted to the Executive governing without parliamentary authorisation, or authorisation otherwise sourced in the Constitution. … 345 [490] As to the plaintiff’s reliance on the principles of responsible government and the detail of the initial appropriation, it was contended that, whilst there is general parliamentary adherence to the broad concept that a new policy is not to be included in odd-numbered appropriation legislation, “a new activity within an existing outcome is not a new policy and can be included in Acts No 1 and 3 for the ordinary annual services of government.” That submission was explained by reference to a DEEWR Budget Statement tabled in the Senate and the House of Representatives relevant to the period 2010–2011 in which the relevant outcome set out was “Improved learning and literacy, numeracy and educational attainment for school students, through funding for quality teaching and learning environments, workplace learning and career advice.” The NSCP was listed as an “administered item” in respect of that outcome. [493] By reference to Bardolph [(1934) 52 CLR 455], the plaintiff accepted that the Commonwealth Executive does not need statutory authority to enter into contracts and to spend money when the [3.370]

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Williams v Commonwealth cont. contracts concern “the ordinary annual services of the Government”. An aspect of the dispute was therefore whether the Funding Agreement was such a contract and, if it were not, whether spending pursuant to it required statutory authority, there being no special statute and no reliance on s 96. … 351 [515] Accountability of the Executive arises not only from the requirements under the Constitution affecting the Executive mentioned above, but also from various conventions of Parliament, the established mechanisms of parliamentary debate and question time, and the requirement that members of the Executive provide information to Select Committees of both Houses of Parliament. Leaving aside appropriation legislation, Bills are conventionally introduced to Parliament, and their purposes explained, by the Minister responsible for their initiation in the House of which the Minister is a member, or by a delegate in the House of which the Minister is not a member. They are then the subject of parliamentary scrutiny and debate. The ultimate passage of a Bill into law may involve a number of compromises along the way, reflected in amendments which secure the Bill’s final acceptance. [See, eg, Carr v Western Australia (2007) 232 CLR 138 at 143 [7] per Gleeson CJ; [2007] HCA 47.] Parliament’s control over expenditure is effected through the legislative process. [516] The practical workings of a system of government which is both responsible and democratically representative are not static, and have given rise to a more general and flexible sense of “responsible government” to indicate a government which is responsive to public opinion and answerable to the electorate. [Lange (1997) 189 CLR 520 at 559. See also Birch, Representative and Responsible Government (1964), pp 17-18 and Walker, The Oxford Companion to Law (1980), p 1065.] The mechanisms and layers of accountability described above permit the ventilation, accommodation, and effective authorisation of political decisions. The notion of a government’s mandate to pass laws and to spend money rests both on democratic representative government and on the relationship between Parliament and the Executive, involving, as it does, both scrutiny and responsibility. Whilst the Executive has the power to initiate new policy and to implement such policy when authorised to do so, either by Parliament or otherwise under the Constitution, Parliament has the power to scrutinise and authorise such policy (if it is not otherwise authorised by the Constitution), and the exclusive power to grant supply in respect of it and control expenditure. The principles of accountability of the Executive to Parliament and Parliament’s control over supply and expenditure operate inevitably to constrain the Commonwealth’s capacities to 352 contract and to spend. Such principles do not constrain the common law freedom to contract and to spend enjoyed by non-governmental juristic persons. … 353 [527] In dealing with the executive power of the New South Wales Government to enter a contract for advertisements relating to the Tourist Bureau of New South Wales in Bardolph, Rich J said [(1934) 52 CLR 455 at 496]: Apart from the question whether parliamentary appropriation of moneys is a prerequisite of the Crown’s liability to pay under a contract made by it, the Crown has a power independent of statute to make such contracts for the public service as are incidental to the ordinary and well-recognized functions of Government. (emphasis added) 354 [528] Starke J said [(1934) 52 CLR 455 at 503]: An advertising branch in the Premier’s Department had been established in New South Wales as one of the ordinary activities and functions of its Government … A contract made in these circumstances is a Government contract, and in my opinion binds the Crown. (emphasis added) [529] Dixon J said that the contract in question “concerned a recognized and regular activity of Government in New South Wales” [(1934) 52 CLR 455 at 507], and went on to say that no statutory authorisation was required for the Executive “to make a contract in the ordinary course of administering a recognized part of the government of the State” (emphasis added) [(1934) 52 CLR 455 at 508]. None of these statements supports a general proposition that special or other legislation is never necessary to authorise the entry into a contract or the incurring of expenditure by the Executive. [530] The statements made are apt for application to the constitutional phrase “the ordinary annual services of the Government” occurring in ss 53 and 54 of the Constitution. 294

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Williams v Commonwealth cont. [531] As confirmed in Pape, statutory authority for executive action (including spending) is distinct conceptually from the appropriation of funds from the Consolidated Revenue Fund for a particular purpose. It is possible for an Act to do both where it amounts to a special appropriation Act and provides some detail about the policy being authorised. In Pape, s 3 of the Tax Bonus for Working Australians Act (No 2) 2009 (Cth), read in conjunction with s 16(1) of the Taxation Administration Act 1953 (Cth), provided statutory authority for payment of the Tax Bonus and also effected an appropriation for the purposes of ss 81 and 83 [(2009) 238 CLR 1 at 23 [8], 64 [135] per French CJ, 70–71 [167]–[171] per Gummow, Crennan and Bell JJ, 97 [267], 133 [393]–[394] per Hayne and Kiefel JJ]. Similarly, the Appropriation (HIH Assistance) Act 2001 (Cth) made a special appropriation for the provision of financial assistance to defined “HIH eligible persons” [HIH Claims Support Ltd v Insurance Australia Ltd (2011) 244 CLR 72; [2011] HCA 31]. … [532] The NSCP has not been subject to the parliamentary processes of scrutiny and debate which would have applied to special legislation, a special appropriation Act, legislation incidental to an exercise of power under s 61 or legislation referable to Parliament’s powers under s 96. Further, whatever the position in subsequent years, at the time of entry 355 into the Funding Agreement, the NSCP was not (by reason of an appropriation in the previous year) a recognised part of Commonwealth government administration in the sense explained in Bardolph. Insofar as the Appropriation Act (No 3) 2006–2007 (Cth) covered appropriations for expenditure on the NSCP, for which no moneys had been appropriated in any previous year, the Senate had no power to amend that Act. For those reasons, the facts in the present case are distinguishable from those considered in Bardolph. … [533] These considerations highlight the need to characterise any particular act of contracting and spending by the Commonwealth Executive so as to determine whether or not it is authorised by s 61. [534] The abovementioned limits on the Commonwealth Executive’s capacities to contract and to spend demonstrate that, despite recognised exceptions, expenditure by the Commonwealth Executive will often require statutory authority beyond appropriation Acts. The Commonwealth Executive’s entry into the Funding Agreement and the making of payments to SUQ could not be characterised as falling within any of the recognised exceptions and did not fall within the scope of s 61. For these reasons, the Commonwealth defendants’ wider submission must be rejected…. … … 358 [544] If the fact that the Parliament could pass valid Commonwealth legislation were sufficient authorisation for any expenditure by the Commonwealth Executive, and, in this case, if the possibility of enabling legislation permitted the Commonwealth Executive to enter the Funding Agreement and make payments to SUQ, the Commonwealth’s capacities to contract and to spend would operate, in practice, indistinguishably from the Commonwealth Executive’s exercise of a prerogative power. Such a view ignores the restrained approach to the prerogative adopted by Brennan J in Davis, extracted above, and disregards the constitutional relationship between the Executive and Parliament affecting spending. For these reasons, the Commonwealth defendants’ narrower submission must also be rejected. Kiefel J [held that it was not necessary “to resolve whether and in what circumstances legislative authority, or authority arising from the Constitution, is required” to support the Funding Agreement because neither of the heads of power that the Commonwealth argued supported the Funding Agreement did so (at [569]). She therefore turned to the Commonwealth’s broader submission]: 368 [576] The Commonwealth defendants’ alternative, and broader, submission is that there is no relevant limitation upon the power of the Commonwealth Executive to spend monies. That is so, it is said, because it has a capacity to contract that is not limited by reference to the division of legislative powers effected by the Constitution, a capacity which is analogous to that of a natural person. In the Commonwealth defendants’ submission, the Commonwealth’s power to contract to spend money is no less than that of a natural person, except that it is constrained by the political accountability of the Executive to Parliament and the need for an appropriation by Parliament before an expenditure can be effected. [577] One observation that may immediately be made about the submission concerns a difference between the Commonwealth Executive and a natural person contracting. When the Commonwealth [3.370]

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Williams v Commonwealth cont. contracts, it may be committing to the expenditure of public monies. But questions as to the capacity of the Commonwealth Executive to contract may be put aside for present purposes. They may be dealt with after consideration is given to the fundamental proposition which lies at the heart of the submission, namely that the Commonwealth Executive has a relevantly unlimited power to spend. That proposition 369 raises questions about the relationship between the Executive and the Commonwealth Parliament and it raises questions about the position of the Commonwealth government under the Constitution. [578] A factor which was influential to Isaacs J’s view in the Wooltops Case, that Commonwealth legislation or the Constitution was required to authorise the Executive’s entry into contracts, was the doctrine of responsible government [Commonwealth v Colonial Combing, Spinning and Weaving Co Ltd (1922) 31 CLR 421 at 438–439, 446–451]. His Honour saw the doctrine as important to an understanding of the relationship between the six separate “constitutional units” in Australia, comprised of the six colonies that existed prior to federation. In this regard, he said responsible government was “the key to the full understanding and interpretation of the third declaration in s 61 of the Constitution.” [Commonwealth v Colonial Combing, Spinning and Weaving Co Ltd (1922) 31 CLR 421 at 439.] And he saw its operation as a necessary control over expenditure [Commonwealth v Colonial Combing, Spinning and Weaving Co Ltd (1922) 31 CLR 421 at 449–450]. [579] The principle of responsible government, derived from parliamentary history and practice in the United Kingdom, is a central feature of the Australian Constitution [Amalgamated Society of Engineers v Adelaide Steamship Co Ltd (1920) 28 CLR 129; [1920] HCA 54 at 146–147 (CLR); R v Kirby; Ex parte Boilermakers’ Society of Australia (1956) 94 CLR 254; [1956] HCA 10 at 275 (CLR)]. The relationship it establishes between the Parliament and the Executive may be described as one where the former is superior to the latter [Winterton, “The Relationship between Commonwealth Legislative and Executive Power” (2004) 25 Adelaide Law Review 21 at 36]. Thus it was stated in Brown v West [(1990) 169 CLR 195 at 202 per Mason CJ, Brennan, Deane, Dawson and Toohey JJ; [1990] HCA 7] that whatever be the scope of Commonwealth executive power, it is susceptible of control by statute. Their Honours went on to say that a valid law of the Commonwealth may limit the exercise of executive power such that acts which would otherwise be supported by the executive power fall outside its scope. [580] The decision in the Wooltops Case has been considered to have gone too far in one respect, in requiring that there be a valid Commonwealth law providing the necessary authority before the Executive could contract [Commonwealth v Colonial Combing, Spinning and Weaving Co Ltd (1922) 31 CLR 421 at 433, 455, 460–461]. In New South Wales v Bardolph [(1934) 52 CLR 455; [1934] HCA 74], Dixon J agreed that the principles of responsible government impose a responsibility on the Executive to Parliament and that Parliament 370 retains control over expenditure of public monies and therefore the power of enforcing that responsibility, but said that the principle does not disable the Executive from acting without the prior approval of Parliament, nor from contracting conditionally upon appropriation by Parliament [New South Wales v Bardolph (1934) 52 CLR 455 at 509, Gavan Duffy CJ agreeing at 493; and see also Ansett Transport Industries (Operations) Pty Ltd v Commonwealth (1977) 139 CLR 54 at 61 per Barwick CJ, 113 per Aickin J, where their Honours appear to support that view; [1977] HCA 71]. [581] Considerations as to the supremacy of Parliament which underlie the doctrine of responsible government may provide a basis for limiting executive power to certain of the legislative heads of power. As was pointed out by the plaintiff and the Solicitor-General of Queensland in argument, if the Executive’s power to spend was unlimited, s 51(xxxix), when used to support the executive power, might operate to extend that power beyond those matters which may, expressly or impliedly, be otherwise the subject of legislative power. In that event the relationship between the Executive and the Parliament and the dominant position of the Parliament may be altered. Such an extension of power may enable the Commonwealth to encroach upon areas of State operation and thereby affect the distribution of powers as between the Commonwealth and the States.

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Williams v Commonwealth cont. [582] The executive power may extend beyond the subjects of Commonwealth legislative power in that it includes prerogative powers and the power to carry out the essential functions and administration of a constitutional government. It is not suggested that these powers are engaged in the present case. [583] The executive power also includes the capacity of the Executive 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”, of which Mason J spoke in the AAP Case [Victoria v Commonwealth and Hayden (1975) 134 CLR 338 at 397]. That capacity is to be deduced from “the existence and character of the Commonwealth as a national government” [Victoria v Commonwealth and Hayden (1975) 134 CLR 338 at 397 per Mason J; see also at 362 per Barwick CJ, 375 per Gibbs J]. This is the power upon which the majority in Pape relied [Pape v Federal Commissioner of Taxation (2009) 238 CLR 1 at 63–64 [133] per French CJ, 91–92 [241]–[242] per Gummow, Crennan and Bell JJ]. [584] Dixon J, in the Pharmaceutical Benefits Case [Attorney-General (Vic) v Commonwealth (1945) 71 CLR 237 at 271–272], spoke of the position that the Commonwealth occupies as a national government and suggested that “no narrow view” should be taken of its powers. 371 But his Honour went on to identify limitations on the executive power of a kind mentioned earlier in these reasons, stating that “the basal consideration would be found in the distribution of powers and functions between the Commonwealth and the States.” Mason J in the AAP Case expressly acknowledged that the distribution of legislative powers necessarily limited the scope of the power to be implied from the position and status of the Commonwealth as a national government [Victoria v Commonwealth and Hayden (1975) 134 CLR 338 at 398]. [585] It is true that, until Pape, limitations on the scope of the executive power of expenditure were mostly viewed through the prism of s 81, which involved the question whether an undertaking was “for the purposes of the Commonwealth”. Even so, the judgments in the AAP Case make plain that the executive power generally was viewed as subject to limitation. And in Pape it was observed that no statement of this Court has suggested that the executive power of the Commonwealth is unbounded [Pape v Federal Commissioner of Taxation (2009) 238 CLR 1 at 119 [335] per Hayne and Kiefel JJ]. The limitation consistently observed was that arising from the distribution of powers effected by the Constitution as between the Commonwealth and the States. Isaacs J in the Wooltops Case, it will be recalled, considered the third declaration in s 61 as a constitutional delimitation as between the Commonwealth and the States [Commonwealth v Colonial Combing, Spinning and Weaving Co Ltd (1922) 31 CLR 421 at 441]. [586] In the AAP Case, Mason J observed that, although the ambit of the executive power is not defined in 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.” [Victoria v Commonwealth and Hayden (1975) 134 CLR 338 at 396] In R v Duncan; Ex parte Australian Iron and Steel Pty Ltd [(1983) 158 CLR 535; [1983] HCA 29 at 560 (CLR)], Mason J added to these observations that “[o]f 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”. These statements by Mason J were approved in R v Hughes [(2000) 202 CLR 535 at 554–555 [38] per Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ; [2000] HCA 22] and in Pape [Pape v Federal Commissioner of Taxation (2009) 238 CLR 1 at 63 [132] per French CJ, 114 [323], 115–116 [327] per Hayne and Kiefel JJ; see also at 181 [519], 188–189 [537] per Heydon J]. … 372 [589] In Davis, Brennan J also observed [(1988) 166 CLR 79 at 111] that the statement by Mason J in the AAP Case, that the Executive Government had power to engage in activities peculiarly adapted to the government of a nation and which otherwise cannot be carried on for its benefit, invites consideration of the sufficiency of the powers of the States to engage effectively in the enterprise or activity in question and therefore of the need for national action, whether unilateral or in co-operation with the States. [3.370]

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Williams v Commonwealth cont. [590] In the present case it cannot be said that no competition may be involved between the State and Commonwealth Executives. Both governments require adherence to their respective guidelines as a condition of funding and both governments publish those guidelines independently of each other and not co-operatively. A party to a funding agreement, such as SUQ, is required to conform to the content of such guidelines as may be determined by the Commonwealth and the State of Queensland respectively. There is clearly the potential for some disparity or inconsistency in what is required. 373 [591] The answer to the question posed by Brennan J in Davis is tolerably clear in this case. The Queensland Government is not only in a position to administer funding for chaplaincy services in schools of that State. It funds some such services itself and it has been actively involved in the development of policy in that area. [592] The distribution of powers effected under the Constitution directs attention to s 96. It may be that s 96 enables the Commonwealth to intrude in point of policy and administration, by the conditions it attaches to grants, into areas outside the Commonwealth’s legislative competence [Victoria v Commonwealth and Hayden (1975) 134 CLR 338 at 357 per Barwick CJ]. However, s 96 permits that course. Importantly, it also confirms that the executive power “is not unlimited and that there is a very large area of activity which lies outside the executive power of the Commonwealth but which may become the subject of conditions attached to grants under s 96.” [Victoria v Commonwealth and Hayden (1975) 134 CLR 338 at 398 per Mason J] [593] The funding of school chaplains might be accommodated by grant on condition under s 96. That is the means by which funding for education-related purposes has been effected in the past. As Heydon J observed in Pape [Pape v Federal Commissioner of Taxation (2009) 238 CLR 1 at 199 [569]], if the Commonwealth executive power to spend is said to be unlimited, s 96 becomes otiose. [594] It may be accepted that the executive power extends to its prerogative powers, to subject matters of express grants of legislative power in ss 51, 52 and 122 and to matters which are peculiarly adapted to the government of a nation. None of these powers support the Funding Agreement and the payment of monies under it. By analogy with the approach taken by Gibbs CJ in Commonwealth v Tasmania (The Tasmanian Dam Case) [(1983) 158 CLR 1; [1983] HCA 21 at 109 (CLR)], there is nothing about the provision of school chaplaincy services which is peculiarly appropriate to a national government. They are the province of the States, in their provision of support for school services, as evidenced in this case by the policy directives and funding undertaken by the Queensland Government. Funding for school chaplains is not within a discernible area of Commonwealth responsibility. [595] The contention of the Commonwealth defendants that the Commonwealth Executive should be taken to have a relevantly unlimited capacity to contract, by analogy with a natural person, is not to the point. The question is not one of the Executive’s juristic capacity to contract, but its power to act [See Victoria v Commonwealth and Hayden (1975) 134 CLR 338 at 362 per Barwick CJ, 379 per Gibbs J, 396 per Mason J]. Actions of the Executive must 374 necessarily fall within the confines of some power derived from the Constitution [Victoria v Commonwealth and Hayden (1975) 134 CLR 338 at 362 per Barwick CJ, 379 per Gibbs J, 396 per Mason J]. Such an approach is evident in the Shipping Board Case, where it was held that there was neither legislative nor executive power to set up the business in question. An activity not authorised by the Constitution could not fall within the power of the Executive [Commonwealth v Australian Commonwealth Shipping Board (1926) 39 CLR 1 at 9–10]. The Executive is not authorised by the Constitution to expand its powers by contract.

[3.380]

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Ideas about the federal distribution of powers are central to the reasoning in Williams v Commonwealth. French CJ commenced his judgment as follows: [3.380]

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178 [1] In 1901, one of the principal architects of the Commonwealth Constitution, Andrew Inglis Clark, said of what he called “a truly federal government” [Studies in Australian Constitutional Law (1901) at 12-13]: Its essential and distinctive feature is the preservation of the separate existence and corporate life of each of the component States of the commonwealth, concurrently with the enforcement of all federal laws uniformly in every State as effectually and as unrestrictedly as if the federal government alone possessed legislative and executive power within the territory of each State. In this case, that essential and distinctive feature requires consideration of the observation of Alfred Deakin, another of the architects of the Commonwealth Constitution and the first Attorney-General of the Commonwealth, that [Deakin, “Channel of Communication with Imperial Government: Position of Consuls: Executive Power of Commonwealth”, in Brazil and Mitchell (eds), Opinions of AttorneysGeneral of the Commonwealth of Australia, Volume 1: 1901–14 (1981) 129 at p 132]: As a general rule, wherever the executive power of the Commonwealth extends, that of the States is correspondingly reduced.

What is the significance of this invocation of a concept of “a truly federal government” in the reasoning of members of the High Court? Does it have the implications claimed for it in their reasons? Is Deakin’s general rule sound? 2.

How is the distribution of legislative power between Commonwealth and States relevant to the scope of Commonwealth Executive contractual capacity or power after Williams? Professor Winterton had argued that the ambit of s 61 executive power, in particular its “maintenance” limb, was to be determined by examining, first, the extent of Commonwealth legislative competence (the “breadth” of Commonwealth executive power); and, second, by examining the powers of the Crown recognized by the common law (the “depth” of Commonwealth executive power). The latter, “depth”, determined precisely what the Commonwealth could do within that sphere of its competence determined by the former “breadth”. This ensured that executive power “followed” the legislative. Professor Peter Gerangelos has summarised his views as follows: The subjects in respect of which Commonwealth executive power can be exercised, the breadth component, are those on which it can legislate …. This includes matters appropriate to a national government, which should be seen as falling within s 51(xxxix) in domestic matters and s 51(xxix) in foreign affairs. This, however, does not resolve the issues as to what activities the government can undertake in regard to those subjects, the depth component. Winterton’s principal thesis was that, apart from “executing” the Constitution and the laws of the Commonwealth, the government is limited to those powers falling within the Crown’s prerogative powers. In other words, the government can “maintain” the Constitution and the laws of the Commonwealth only to the extent allowed by the Crown’s prerogative powers [in the broad sense, to include the “capacities”].

See P Gerangelos, “Parliament, the Executive and the Governor-General: The George Winterton Thesis”, in H P Lee and P Gerangelos (eds), Constitutional Advancement in a Frozen Continent (Federation Press, Sydney, 2009), pp 193-194. See also P Gerangelos, “The Executive Power of the Commonwealth of Australia: Sections 61 of the Commonwealth Constitution, “Nationhood” and the Future of the Prerogative” (2012) Oxford University Commonwealth Law Journal 98 to which Heydon J made reference in Williams (at 795–796 [385] n 525) stating: The “breadth”/“depth” distinction which Winterton drew, though it may not exhaust the possibilities which s 61 offers for analysis, is not only neat but illuminating. [3.380]

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Other leading constitutional scholars similarly did not envisage an expansive role for s 61. Professor Enid Campbell stated (E Campbell, “Parliament and the Executive”, in L Zines (ed), Commentaries on the Australian Constitution (Butterworths, Chatswood, 1977), pp 88-89): [I]t is questionable whether it [the third component of s 61] is a grant of substantive power at all. It is unthinkable that it would be construed as empowering the Crown to do what was, under common law, forbidden unless authorised by statute. … The means chosen for carrying out the function of executing and maintaining the Constitution and the laws are, in short, controlled by the general law.

See also L Zines (2005) at 282, where, prior to Pape and Williams, he was able to remark: The common law provided the prerogative and executive powers that have since been deemed to be included in that section. It is clear that the common law privileges and immunities of the Crown would attach to the Crown in right of the Commonwealth by virtue of common law in the absence of s 61.

3.

4.

5.

6.

Where does Winterton’s thesis stand after Pape and Williams (No 1) (and Williams (No 2) – extracted below)? To what extent has the High Court reversed Winterton’s breadth and depth enquiry? To what extent has the High Court adopted an approach that depends on an assumption that there is such a thing as “inherent” executive power based on nationhood considerations? How is such a concept to be defined and applied in a legal context (rather than a political context)? How is the fact that a State has acted, or could act through its Executive branch in an area in which the Commonwealth also seeks to act through its Executive branch relevant to the validity of the Commonwealth action? Is it necessary to establish principles to resolve “conflicts” or “inconsistencies” of Executive action? French CJ observed (at [74]) that, in Bardolph (1934) 52 CLR 455, the Tourist Board “had been recognised for many years, both in Parliament and out, as part of the established service of the Crown” and that its contractual activities were “an ordinary incident of this particular function of Government” – and, in part for these reasons, its contracts did not require statutory pre-authorisation. Can new activities and programs acquire such recognition? Members of the Court held that legislation would often be required to support Commonwealth contracting and expenditure. However, they expressed different views about what form that legislation needed to take. French CJ, in quoting from Dixon KC’s testimony at the Royal Commission on the Constitution of the Commonwealth (1927), lent support to the idea that a “General Contracts Act” might provide support for contracts whose subject matters lay within Commonwealth power but which were not incidental to some other more specific statute (at [68]). Crennan J, on the other hand, and consistently with her view on the need for parliamentary oversight, hinted at the need for a special appropriation Act that “provides some detail about the policy being authorised” (at [531]). Hayne J, though not deciding whether legislation would always be required, suggested that it might be arguable that the provisions of the appropriation Acts conferred sufficient legislative authority (at [287]–[288]).

Non-statutory executive power to contract and spend – federal dimensions [3.390] The Parliament moved rapidly to provide a statutory basis for the National School

Chaplaincy Program and other programs that the reasoning in Williams suggested might be vulnerable. The Financial Framework Legislation Amendment Act (No 3) 2012 (Cth) amended the Financial Management and Accountability Amendment Act 1997 (Cth) by 300

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adding a new s 32B that conferred authority on the Commonwealth to make, vary and administer arrangements relating to grants and programs specified in the Regulations. More than 400 grants and programs (including the NSCP) were specified in an initial set of Regulations that were scheduled and given effect by the 2012 Act. Further grants and programs could be specified in Regulations to be made by the Governor General.

Williams v Commonwealth (No 2) [3.400] Williams v Commonwealth (2014) 252 CLR 416 [Mr Williams sought to challenge the validity of s 32B, the regulation-making power and the specification of the NSCP in the initial Regulations. In a joint judgment, French CJ, Hayne, Kiefel, Bell and Keane JJ read down s 32B so that it did not “extend to cases where the Parliament does not have constitutional power to authorise the making, varying or administration of arrangements or grants” [36]. It was not necessary to consider whether the regulation-making power was an invalid overbroad delegation of legislative power (see [3.430] below) because the NSCP was listed in the Regulations as a result of the direct operation of the 2012 Act, not as the result of any exercise of the regulation-making power [36]. Nonetheless, s 32B and the Regulations were invalid in their operation in relation to the SUQ Funding Agreement and the payments made under that Agreement. They were not supported by any relevant head of Commonwealth legislative power. In particular, the Court rejected the Commonwealth’s argument that they were supported by s 51(xxiiiA), the power to make laws with respect to the provision of benefits to students, or by s 51(xx), the power to make laws with respect to certain corporations. (Crennan J agreed generally with the joint judgment of French CJ, Hayne, Kiefel, Bell and Keane JJ but wrote expressed a reservation about the reasoning based on s 51(xxiiiA)). The joint judgment therefore turned to consider the Commonwealth’s arguments that it should reconsider the decision and reasoning in the earlier case brought by Mr Williams. First, it declined to rule on whether the Appropriation Acts “are to be construed” not only as appropriating the funds but also “as providing statutory authority to make either the funding agreement or any of the payments in issue in this proceeding”. For even if they did purport to provide this authority, they would be not be supported by a substantive head of Commonwealth legislative power for the reasons given in relation to s 32B and the Regulations. Next, the joint judgment rejected the application to re-open Williams (No 1), but went on to “to record the arguments which were advanced by the Commonwealth parties and to identify why those arguments have been rightly rejected”.] French CJ, Hayne, Kiefel, Bell and Keane JJ: 465 Executive power revisited [68] The Commonwealth parties identified the central holding in Williams (No 1) as being “that many, but not all, instances of executive spending and contracting require legislative authorization”. They submitted that this holding was wrong and that there were only seven limitations on the Executive’s power to spend and contract. Those limitations can be identified shortly as follows. First, the Executive may not “stray into an area reserved for legislative power”. Second, an exercise of executive power cannot fetter the exercise of legislative power and cannot dispense with the operation of the law. Third, there can be no withdrawal of money from the Consolidated Revenue Fund without parliamentary authority in the form of appropriation legislation. Fourth, s 51 of the Constitution “provides every power necessary for the Parliament to prohibit or control the activity of the Executive in spending”. Fifth, through collective and individual ministerial responsibility to the Parliament, the Parliament “exercises substantial control over spending”. Sixth, the Constitution assumes the separate existence and continued organisation of the States. Seventh, State laws of general application apply to spending and contracting by the Commonwealth without legislative authority. [69] Although cast as an acknowledgment of what may be accepted to be important limitations on the power of the Executive to spend and contract, this argument was, in substance, no more than a repetition of what were referred to as the “broad basis” submissions which the Commonwealth parties [3.400]

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Williams v Commonwealth (No 2) cont. advanced … in Williams (No 1) and which six Justices rejected [[2012] HCA 23; (2012) 248 CLR 156 at 186-187 [26]-[27], 191-193 [35]-[38] per French CJ, 236-239 [150]-[159] per Gummow and Bell JJ, 270-271 [251]-[253] per Hayne J, 343-344 [488], 355 [534] per Crennan J, 373-374 [595] per Kiefel J.]. 466 A proposed limitation on the power to spend and contract [70] Notably absent from the list of seven limitations proffered by the Commonwealth parties was any limitation by reference to the areas in which (in the sense of subjects for or about which) the Commonwealth may spend or contract. If such a limitation was considered necessary, the Commonwealth parties submitted that the limitation should be framed as follows: [E]xecutive power to contract and spend under s 61 of the Constitution extends to all those matters that are reasonably capable of being seen as of national benefit or concern; that is, all those matters that befit the national government of the federation, as discerned from the text and structure of the Constitution. (emphasis added) This limitation was said to be “the corollary embedded in s 61 of the Constitution to the ‘purposes of the Commonwealth’ referred to in s 81 (in the specific context of spending)”. [71] So expressed, the proposition is one of great width. It may go so far as to permit the expenditure of public money for any national program which the Parliament reasonably considered to be of benefit to the nation. It is hard to think of any program requiring the expenditure of public money appropriated by the Parliament which the Parliament would not consider to be of benefit to the nation. In effect, then, the submission is one which, if accepted, may commit to the Parliament the judgment of what is and what is not within the spending power of the Commonwealth, even if, as the Commonwealth parties submitted, the question could be litigated in this Court. It is but another way of putting the Commonwealth’s oft-repeated … submission that the Executive has unlimited power to spend appropriated moneys for the purposes identified by the appropriation. [72] The reference to discerning what are the matters “that befit the national government of the federation” from “the text and structure of the Constitution” appears to propose a test narrower than “all those matters that are reasonably capable of being seen as of national benefit 467 or concern”. It is not useful, however, to stay to attempt to resolve any internal inconsistency in the submission of the Commonwealth parties. Rather, it is more productive to identify the way in which it was sought to apply the submission in this case. [73] The Commonwealth parties submitted that, if the breadth of the executive power to spend and contract is limited, the provision of chaplains in schools is within the executive power of the Commonwealth because it “is reasonably capable of being seen as a matter of national benefit or concern”. The Commonwealth parties developed this submission by reference to several considerations. Only one of them need be specially noticed. The Commonwealth parties submitted that the chaplaincy program was of national benefit or concern because the States had been consulted about and had supported the extension of the chaplaincy program considered in Williams (No 1). And the Solicitor-General of the Commonwealth began his oral submissions in this matter by referring to consultation documents which he submitted showed that the States supported the chaplaincy program. [74] Consultation between the Commonwealth and States coupled with silent, even expressed, acquiescence by the States does not supply otherwise absent constitutional power to the Commonwealth. The Constitution contains several provisions by which the States and the Commonwealth may join in achieving common ends. It is enough to mention only s 51(xxxvii) (about referral of powers) and s 96 (about grants on condition). Neither of those provisions was engaged in relation to the matters the subject of this case. The consultations to which reference was made in argument do not support the Commonwealth parties’ submissions. [75] But there are more fundamental defects in the argument of the Commonwealth parties about the breadth of the Executive’s power to spend and contract. 302

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Williams v Commonwealth (No 2) cont. An assumption underpinning the Commonwealth parties’ argument [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 468 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 [The extent of this power may remain controversial. See, for example, R (Hooper) v Secretary of State for Work and Pensions [2005] 1 WLR 1681 at 1695-1696 [46]-[47] per Lord Hoffmann; [2006] 1 All ER 487 at 506-507; R (New London College Ltd) v Secretary of State for the Home Department [2013] 1 WLR 2358 at 2371 [28] per Lord Sumption JSC (Lord Clarke of Stone-cum-Ebony and Lord Reed JJSC and Lord Hope of Craighead agreeing); [2013] 4 All ER 195 at 210-211; cf Maitland, “The Crown as Corporation”, (1901) 17 Law Quarterly Review 131; Harris, “The “Third Source” of Authority for Government Action Revisited”, (2007) 123 Law Quarterly Review 225; Howell, “What the Crown May Do”, (2010) 15 Judicial Review 36. It is neither necessary nor appropriate to enter upon that subject.]. 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), ss 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 469 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 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 [3.400]

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Williams v Commonwealth (No 2) cont. 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] HCA 30; (1945) 71 CLR 237 at 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 [R v Kirby; Ex parte Boilermakers’ Society of Australia [1956] HCA 10; (1956) 94 CLR 254 at 267-268; [1956] HCA 10.]. 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. [84] Finally, reference must be made to the Commonwealth parties’ arguments based on the express incidental power in s 51(xxxix). Section 51(xxxix) [85] For the most part, the submissions which the Commonwealth parties made about s 51(xxxix) depended upon the success of other arguments they advanced but which have been rejected. Thus the Commonwealth parties submitted that, in so far as the Appropriation Acts provided authority to spend appropriated moneys, the Appropriation Acts were supported by s 51(xxxix) as laws incidental to the power to appropriate. They further submitted that s 32B of the FMA Act was supported by the incidental power as a law incidental to the power to appropriate or the executive power under s 61 to spend and contract. [86] Both of those arguments must be rejected. To hold that the Parliament may make a law authorising the expenditure of any moneys lawfully appropriated in accordance with ss 81 and 83, no matter what the purpose of the expenditure may be, would treat outlay of the moneys as incidental to their ear-marking. But that would be to hold, contrary to Pape, that any and every appropriation of public moneys in accordance with ss 81 and 83 brings the expenditure of those moneys within the power of the Commonwealth. [87] Likewise, to hold that s 32B of the FMA Act is a law with respect to a matter incidental to the execution of the executive power of the Commonwealth (to spend and contract) presupposes what both Pape and Williams (No 1) deny: that the executive power of the Commonwealth extends to any and every form of expenditure of public moneys and the making of any agreement providing for the expenditure of those moneys.

[3.410] The Williams cases left open the extent of the States’ non-statutory executive power,

in particular their power to enter contracts. In Queensland, this is resolved by s 51 of the Constitution of Queensland 2001 which, among other things, provides that “The Executive Government of the State of Queensland (the State) has all the powers, and the legal capacity, of an individual”. The decision of the Full Court of the Federal Court in Victoria v Construction, Forestry, Mining and Energy Union (2013) 218 FCR 172; [2013] FCAFC 160 considers but does not answer the extent of each States’ Executive Government’s non-statutory contracting power; it also considers but does not resolve the extent of their power to adopt policies without statutory backing (in this case, a policy that was arguably at odds with the policy – though not the terms – of Commonwealth legislation). 304

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Victoria v Construction, Forestry, Mining and Energy Union [3.420] Victoria v Construction, Forestry, Mining and Energy Union (2013) 218 FCR 172; [2013] FCAFC 160 [Acting through its Executive Government, the State of Victoria adopted two non-statutory statements of policy, a Code of Practice for the Building and Construction Industry and Guidelines for the implementation of that Code of Practice. These policy statements specified criteria that the State would use in choosing building companies to carry out public works. The CFMEU brought proceedings seeking various relief, including declarations that the Code and Guidelines were invalid and of no effect because the Executive Government lacked the power to make them. The Full Court of the Federal Court held that it did not have jurisdiction to make these declarations because the CFMEU could not identify any right, duty, liability or obligation that gave rise to a justiciable controversy.] 177 [18] The CFMEU argued that the norms (to which reference was made in the above passage) were to be realised in the State’s construction industry by means of the scheme created by the Code and the Guidelines; and that this scheme contemplated the imposition of sanctions (including exclusion from tendering for certain government work) by the Minister for Finance (acting in consultation) and by compliance monitoring and breach reports, review or investigation by the CCCU. At its highest, the CFMEU’s argument was that, upon their publication, the Guidelines threatened that non-conformity exposed industry members to a risk of adverse action by the State’s executive branch. [19] The difficulty with the CFMEU’s argument is, however, that the Code and the Guidelines are statements of policy only; they are not statements of law. The Code and the Guidelines do not of themselves give rise to any relevant right or obligation. As stated at the outset of these reasons, the Code and the Guidelines do not themselves authorise, forbid, or mandate any particular conduct by anyone. The Code and the Guidelines do not operate directly or indirectly to impose any sanctions for non-compliance. Rather, they notify what the CCCU is tasked to do and the nature of the adverse action that might be taken in the 178 event of non-compliance. The policy within the Code and the Guidelines may also be given effect, as the CFMEU said, “through contracts”; but … the Code and the Guidelines did not (and do not) bind the executive arm of the State to act in any particular way. [20] … The Code and the Guidelines are simply not analogous to an existing legislative provision, which of itself imposes a liability, confers a benefit, or invests action pursuant to it with legal force (even if that liability etcetera remains unenforced): cf Croome v Tasmania [1997] HCA 5; (1997) 191 CLR 119. … 179 [24] Further, it cannot be supposed that the differences between the Commonwealth and State constitutional contexts are insignificant. Williams was primarily concerned with the executive power of the Commonwealth in s 61 of the Commonwealth Constitution. In particular, the Court determined whether the funding agreement and the payments made under it exceeded the Commonwealth’s executive power because the funding agreement was not of a kind that the Commonwealth was constitutionally empowered to make independently of statute. The nature of this inquiry is underscored by the inquiry in the reasons of Hayne J, of Kiefel J and of Heydon J, in dissent, as to whether or not the executive’s actions in this regard could have been authorised by legislation passed by the Federal Parliament: see Williams at 280-281 [286] (Hayne J), 333 [441] (Heydon J), 367-368 [574]-[575] (Kiefel J). There is no equivalent to s 61 in the Constitution of the State and the executive power of the State is not referable to limits like those with respect to the Commonwealth arising from the specific heads of legislative power. Furthermore, whilst the reasons of French CJ, of Gummow and Bell JJ and of Crennan J disclose a different analysis, they too had regard to federal considerations affecting the distribution of power that are inapplicable in the case of the State. Thus, French CJ referred to the “consequences for the federation which flow from attributing to the Commonwealth a wide executive power to expend moneys”, and a concern not to diminish the authority of the States (at least not in a practical way): Williams at 192-193 [37], 216-217 [83] (Gummow and Bell JJ); Geoffrey Lindell, “The Changed Landscape of the Executive Power of the Commonwealth after the Williams Case” (2013) 39(2) Monash University Law Review 1 at 23. A number of their Honours considered the operation of s 96 of the Commonwealth Constitution from the federal perspective: Williams at 234 [143] (Gummow and Bell JJ), 347-348 [501]-[503] (Crennan J) and 373 [593] (Kiefel J). [3.420]

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Victoria v Construction, Forestry, Mining and Energy Union cont. These kinds of concerns are not capable of ready translation to consideration of the State’s executive power. Gummow and Bell JJ also drew attention, in the Commonwealth constitutional context, to the nature of representative and responsible government, especially having regard to the Senate and its inability to amend appropriation for the ordinary annual services of government under s 53 of the Commonwealth Constitution, notwithstanding the power of the Senate to reject supply and its ability to propose the amendment of money bills: Williams at 232-233 [136] (Gummow and Bell JJ). A different constitutional regime governs the Legislative Council under the State Constitution: see Constitution Act 1975 (Vic), s 65. There is no necessary correspondence between the limits on Commonwealth executive power and the State’s executive power. [25] The foregoing strongly indicates that it cannot be supposed that the decision in Williams would provide direct authoritative guidance for the outcome of the cross-appeal, even if there were a justiciable controversy. In so far as Williams would provide any guidance in this instance, it would do so in a limited way only. This limited guidance may indicate that an application of the Guidelines may be vulnerable to attack on another occasion in a differently constituted case. Thus, there is an acknowledgement in Williams that the use of government contracts “to impose conditions of a regulatory or public policy nature on private parties … has implications for the principles and practices of public 180 law”: see Cheryl Saunders and KF Yam, “Government regulation by contract: Implications for the rule of law” (2004) 15 Public Law Review 51 at 52; and see Williams at 213-214 [77] (French CJ). These implications may prove important on a later occasion. It may be that implications about parliamentary accountability similar to those referred to by Crennan J in Williams (at 351 [516]) will be drawn from provisions of the State Constitution; and that these implications may impact on the outcome of another case concerning the application of the Code and Guidelines. These State constitutional provisions were not the subject of argument on the cross-appeal; and it is unnecessary to consider them here. [26] It should also be borne in mind that their Honours reasons for judgment in Williams do not provide unequivocal support for the State’s submissions on the cross-appeal concerning the authority of New South Wales v Bardolph [1934] HCA 74; (1934) 52 CLR 455 (“Bardolph”), which held that it is unnecessary for an appropriation to be passed before a contract can be entered into for the expenditure of money; and until Williams was also taken to mean that the executive had a general power to contract. Since Williams, however, this latter proposition is sustainable only with respect to a contract “in the ordinary course of administering a recognised part of the government of the states”: see Williams at 211-212 [74] (French CJ), 255-260 [208]-[221] (Hayne J), 342 [484], 354 [529] (Crennan J). This indicates that Bardolph is not to be taken as authority for the proposition that the State’s executive branch has general contracting power with respect to any subject matter: see especially Williams at 256 [209], 257 [212] (Hayne J). This further indicates that, in so far as the State submitted to the contrary in answer to the CFMEU’s cross-appeal, its submissions paid insufficient regard to the effect of the discussion of Bardolph in Williams. Furthermore, the statements made by Gummow and Bell JJ in Williams, which distinguished governmental power to contract from a private person’s power to contract because the public money expended by government requires that “questions of contractual capacity are to be regarded ‘through different spectacles’” is applicable not only to the Commonwealth but also to the States: see Williams at 236 [151]. [27] The aspects of Williams mentioned in the above paragraph strongly indicate that there are important synergies between the constitutional considerations that affect the contract-making power of the Commonwealth executive and that which affect the contract-making power of the State. Further, using policy as a “regulatory tool” in the manner the State has done in this case has risks, including risks for the proper operation of State constitutional principles, such as principles of representative and responsible government, which should not be ignored. Simply because some of these principles are not expressly stated in State constitutions does not mean they do not exist and can be safely disregarded: see, for example, Stewart v Ronalds [2009] NSWCA 277; (2009) 232 FLR 331 at 343-344 [35] to [36] (Allsop P). 306

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Victoria v Construction, Forestry, Mining and Energy Union cont. [Buchanan and Griffiths JJ reached similar conclusions.]

LAW-MAKING POWER DELEGATED TO THE EXECUTIVE [3.430] Since the 17th century, it has been clear that the executive cannot unilaterally make

new law or dispense with obedience to the law: see [3.70]ff. However, since the 19th century, the modern state has depended on delegating significant law-making powers to the Executive, in particular to fill in the details of legislative policy that are (and perhaps can only be) specified in broad and general terms in laws made by the Parliament. How can this practice of delegated law-making be reconciled with the separation of powers? Are there any limits to delegated law-making?

Victorian Stevedoring & General Contracting Co v Dignan [3.440] Victorian Stevedoring & General Contracting Company Pty Ltd v Dignan (1931) 46 CLR 73 at 91–102, 114–124 [The appellants were convicted of breaches of the Waterside Employment Regulations 1931 (Cth), made under s 3 of the Transport Workers Act 1928–1929 (Cth). Section 3 provided that the Governor-General may make regulations, not inconsistent with the Act, which, notwithstanding anything in any other Act but subject to the then applicable Acts Interpretation Acts, 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. The appellants argued that s 3 and the regulations made under it were invalid, in part on the ground that s 3 invalidly delegated legislative power to the executive.] Dixon J [noted the parallel between the distribution of legislative, executive and judicial power in the Australian and United States constitutions and the intention of the American framers to adopt a Montesquieuian separation of powers and continued]: 91 … But it is one thing to adopt and enunciate a basic rule involving a classification and distribution of powers of such an order, and it is another to face and overcome the logical difficulties of defining the power of each organ of government, and the practical and political consequences of an inflexible application of their delimitation. In the first place it was apparent that many things might be 92 done in the course of, or as ancillary to, the execution of one power which might also be done in virtue of another. For instance, the ascertainment of a state of facts upon testimony of witnesses may be incident to some executive action and is not confined to the judicial power … Again the power to make rules of procedure may be reposed in the Judiciary or exercised by the Legislature … Further, although 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 citizen 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? The answer which the decisions of the Supreme Court of the United States supply to this question is formulated in the opinion of that Court delivered by Taft CJ in Hampton & Co v United States (1928) 276 US 394 at 406–407; [1928] USSC 69; 72 Law Ed 624 at 629: It is a breach of the National fundamental law if Congress gives up its legislative power and transfers it to the President, or to the Judicial Branch, or if by law it attempts to invest itself or its members with either executive power or judicial power. This is not to say that the three [3.440]

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Victorian Stevedoring & General Contracting Co v Dignan cont. branches are not co-ordinate parts of one government and that each in the field of duties may not invoke the action of the two other branches in so far as the action invoked shall not be an assumption of the Constitutional field of action of another branch. In determining what it may do in seeking assistance from another branch, the extent and character of that assistance must be fixed according to common sense and the inherent necessities of the governmental co-ordination. The field of Congress involves all and many varieties of legislative action, and Congress has found it frequently 93 necessary to use officers of the Executive Branch, within defined limits, to secure the exact effect intended by its acts of legislation, by vesting discretion in such officers to make public regulations interpreting a statute and directing the details of its execution, even to the extent of providing for penalizing a breach of such regulations… Congress may feel itself unable conveniently to determine exactly when its exercise of the legislative power should become effective, because dependent on future conditions, and it may leave the determination of such time to the decision of an Executive, or, as often happens in matters of State legislation, it may be left to a popular vote of the residents of a district to be affected by the legislation. He then quotes an often cited passage of another judgment: The true distinction, therefore, is, between the delegation of power to make the law, which necessarily involves a discretion as to what it shall be, and conferring an authority or discretion as to its execution, to be exercised under and in pursuance of the law. The first cannot be done; to the latter no valid objection can be made. In Mutual Film Corporation v Industrial Commission of Ohio (1915) 236 US 230; [1915] USSC 53; 59 Law Ed 552 at 245 (US), 560 (Law Ed) the vagueness of the principle is acknowledged, but its limits are restated thus: While administration and legislation are quite distinct powers, the line which separates … their exercise is not easy to define in words. It is best recognized in illustrations. Undoubtedly the Legislature must declare the policy of the law and fix the legal principles which are to control in given cases: but an administrative body may be invested with the power to ascertain the facts and conditions to which the policy and principles apply. If this could not be done there would be infinite confusion in the laws, and in an effort to detail and to particularize, they would miss sufficiency both in provision and execution. The latitude of application which such doctrines allow is evident. Indeed, one speculative writer has said: “The Courts have never had any criterion of validity except that of reasonableness, the common refuge of thought and expression in the face of undeveloped or unascertainable standards” (Freund, Administrative Powers over Persons and Property, p 219). And Holmes J, in a dissenting 94 opinion in Springer v Government of the Phillipine Islands [(1928) 277 US 189; 72 Law Ed 845], has doubtless lent support to the notion that many of the consequences of the separation of powers are avoided in substance, although acknowledged in form. But another speculative writer finds in the doctrine, as it is now applied, a very real and important limitation upon the powers of the Legislature. “The fundamental limitation”, he says, “has to do with the scope of the discretion that may be delegated. All students of the subject will admit that Congress could not, if it would, transfer in toto to the President or any other agency all or any of its enumerated powers. Thus a statute in general terms that the President be given authority to pass regulations regarding inter-State or foreign commerce, would without doubt be held invalid. Nor can Congress delegate the power to regulate even one whole field of inter-State commerce. Surely it would not be legitimate for it to authorize the President to pass reasonable regulations with reference to the inter-State railroad problem. Yet Congress has granted the Inter-State Commerce Commission the power to fix maximum railroad rates, provided they be reasonable; and all admit that this is Constitutional. What is the distinction? Essentially the quantitative one of the scope of the discretion.” (James Hart, The Ordinance Making Powers of the President of the United States, p 146.) But in any case no decision of the Supreme Court of the United States, of which I am aware, allows Congress to empower the Executive to make regulations or ordinances which may overreach existing statutes. 308

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Victorian Stevedoring & General Contracting Co v Dignan cont. In support of the rule that Congress cannot invest another organ of government with legislative power, a second doctrine is relied upon in America, but it has no application to the Australian Constitution. Because the powers of government are considered to be derived from the authority of the people of the Union, no agency to whom the people have confided a power may delegate its exercise. “The well-known maxim Delegata potestas non potest delegari, applicable to the law of agency in the general and common law, is well understood and has had wider application in the construction of our Federal and State Constitutions than it has in private laws” (per 95 Taft CJ in Hampton & Co v United States (1928) 276 US; 72 Law Ed at 405–406 (US), 629 (Law Ed)). No similar doctrine has existed in respect of British Colonial Legislatures whether erected in virtue of the prerogative or by Imperial statute. “A confirmed act of the local Legislature … whether in a settled or a conquered colony, has, as to matters within its competence and the limits of its jurisdiction, the operation and force of sovereign legislation, though subject to be controlled by the Imperial Parliament” (per Willes J delivering the judgment of the Exchequer Chamber in Phillips v Eyre (1870) LR 6 QB 1 at 20). … 96 … When they adopted the distribution of powers which they found in the Constitution of the United States, the framers of the Constitution of the Commonwealth of Australia 1901 were, of course, by no means unaware of the significance given to the distribution and of the consequences flowing from it. But an independent consideration of the provisions of the Commonwealth Constitution unaided by any such knowledge cannot but suggest that it was intended to confine to each of the three departments of government the exercise of the power with which it is invested by the Constitution, the doing of that which can be done in virtue only of the possession of such a power. The arrangement of the Constitution and the emphatic words in which the three powers are vested by ss 1, 61 and 71 combine with the careful and elaborate provisions constituting or defining the respositories of the respective powers to provide evidence of the intention with which the powers were apportioned and the organs of government separated and described. … From these authorities it appears that, because of the distribution of the functions of government and of the manner in which the 98 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? In Baxter v Ah Way (1909) 8 CLR 626 legislation of the Parliament was upheld conferring upon the Executive authority by proclamation to include goods in the category of prohibited imports. The maxim Delegatus non potest delegare was held to afford no ground of objection, and the plenary nature of the legislative power was emphasized. … In Roche v Kronheimer (1921) 29 CLR 329 the Court upheld the validity of s 2 of the Treaty of Peace Act 1919, which empowered the Executive to make such regulations as appeared to it to be necessary for 99 carrying out or giving effect to the economic clauses of the Treaty of Versailles. [Dixon J noted that the issue was not analysed at length and the decision might have been based on the special character of the defence power or on the detailed regime of the Treaty with which the delegated legislation had to conform.] … 100 … But s 3 of the Transport Workers Act 1928–1929 cannot, in my opinion, be regarded as doing less than authorizing the Executive to perform a function which, if not subordinate, would be essentially legislative. It gives the Governor-General in Council a complete, although, of course, a subordinate power, over a large and by no means unimportant subject, in the exercise of which he is free to determine from time to time the ends to be achieved and the policy to be pursued as well as the means to be adopted. Within the limits of the subject matter, his will is unregulated and his discretion unguided. Moreover, the power may be exercised in disregard of other existing statutes, the provisions of which concerning the same subject matter may be overridden. [Dixon J noted that the present challenge to the validity of s 3 had been faintly pressed in Huddart Parker Ltd v Commonwealth (1931) 44 CLR 492 and that Roche v Kronheimer had been assumed lead to [3.440]

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Victorian Stevedoring & General Contracting Co v Dignan cont. the conclusion that the Parliament could make a law such as s 3 that “prescribes no rule in relation to such employment [but] remits the whole matter to the regulation of the Governor in Council”.] A reconsideration of the matter has confirmed my opinion that the judgment of the Court in that case does so mean to decide. It may be true that the nature of the case and the authorities cited as the ground of the decision are consistent with the explanation that it did no more than illustrate the potency of the defence power. But 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 101 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 [Huddart Parker (1931) 44 CLR 492] that Roche v Kronheimer (1921) 29 CLR 329 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. Nor does it mean that the distribution of powers can supply no considerations of weight affecting the validity of an Act creating a legislative authority. … The interpretation by this Court of Ch III of the Constitution and that of Chs I and II which has now been adopted in view of Roche v Kronheimer, may appear to involve an inconsistency or, at least, an asymmetry, and there are not wanting those who think a course of judicial decision no sufficient warrant for anything so unsatisfactory. But the explanation should be sought not in a want of uniformity in the application to the different organs of government of the consequences of the division of powers among them, but in the ascertainment of the nature of the power which that division prevents the Legislature from handing over. It may be acknowledged that the manner in which the Constitution accomplished the separation of powers does logically or theoretically make the Parliament the exclusive reposit[o]ry of the legislative power of the Commonwealth. The existence in Parliament of power to authorize subordinate legislation may be ascribed to a conception of that legislative power which depends less upon juristic analysis 102 and perhaps more upon the history and usages of British legislation and the theories of English law. In English law much weight has been given to the dependence of subordinate legislation for its efficacy, not only on the enactment, but upon the continuing operation of the statute by which it is so authorized. The statute is conceived to be the source of obligation and the expression of the continuing will of the Legislature. Minor consequences of such a doctrine are found in the rule that offences against subordinate regulation are offences against the statute … and the rule that upon the repeal of the statute, the regulation fails … Major consequences are suggested by the emphasis laid in Powell’s Case [Powell v Apollo Candle Co (1885) 10 App Cas 282] and in Hodge’s Case [Hodge v The Queen (1883) 9 App Cas 117] upon the retention by the Legislature of the whole of its power of control and of its capacity to take the matter back into its own hands. After the long history of parliamentary delegation in Britain and the British colonies, it may be right to treat subordinate legislation which remains under parliamentary control as lacking the independent and unqualified authority which is an attribute of true legislative power, at any rate when there has been an attempt to confer any very general legislative capacity. But, whatever may be its rationale, we should now adhere to the interpretation which results from the decision of Roche v Kronheimer. Evatt J: 114 … In dealing with the doctrine of “separation” of legislative and executive powers, it must be remembered that, underlying the Commonwealth frame of government, there is the notion of the British system of an Executive which is responsible to Parliament. That system is not in operation under the United States Constitution. Nor, indeed, had it been fully developed in England itself at the time when Montesquieu first elaborated the doctrine or theory of separation of governmental powers. But, prior to the establishment of the Commonwealth of Australia in 1901, responsible government had become one of the central characteristics of our polity. Over and over again, its existence in the Constitutional scheme of the Commonwealth has been recognized by this Court. 310

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Victorian Stevedoring & General Contracting Co v Dignan cont. This close relationship between the legislative and executive agencies of the Commonwealth must be kept in mind in examining the contention that it is the Legislature of the Commonwealth, and it alone, which may lawfully exercise legislative power. “It is the duty of the Judiciary,” said Isaacs J (as he then was) in the case of Commonwealth v Colonial Combing, Spinning and Weaving Co (1922) 31 CLR 421 at 438–439, “to recognize the development of the Nation and to apply established 115 principles to the new positions which the Nation in its progress from time to time assumes. The judicial organ would otherwise separate itself from the progressive life of the community, and act as a clog upon the legislative and executive departments rather than as an interpreter. It is only when those common law principles are exhausted that legislation is necessary.” … 117 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. The statesmen and lawyers concerned in the framing of the Australian Constitution, when they treated of “legislative power” in relation to the self-governing colonies, had in view an authority 118 which, over a limited area or subject matter, resembled that of the British Parliament. Such authority always extended beyond the issue by Parliament itself of binding commands. Parliament could also authorize the issue of such commands by any person or authority it chose to select or create. “Legislative power” connoted the power to deposit or delegate legislative power because this was implied in the idea of parliamentary sovereignty itself. It was, of course, always understood that the power of the delegate or depositary could be withdrawn by the Parliament that had created it, and in this sense Parliament had to preserve “its own capacity intact” (In re Initiative and Referendum Act [1919] AC 935 at 945). But this preservation or reservation of ultimate authority in the Legislature itself was implicit, and was sufficiently evidenced by the continued existence and activity of Parliament. No one conversant with British Parliamentary history ever supposed that the supremacy of the Legislature was affected in the slightest degree either by the actual creation of new law-making authorities, or by the vesting in existing authorities of the power to make laws. … 119 … 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 120 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 [3.440]

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Victorian Stevedoring & General Contracting Co v Dignan cont. 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. The following matters would appear to be material in examining the question of the validity of an Act of the Parliament of the Commonwealth Parliament which purports to give power to the Executive or some other agency to make regulations or by-laws: 1.

The fact that the grant of power is made to the Executive Government rather than to an authority which is not responsible to Parliament, may be a circumstance which assists the validity of the legislation. The further removed the law-making authority is from continuous contact with Parliament, the less likely is it that the law will be a law with respect to any of the subject matters enumerated in ss 51 and 52 of the Constitution.

2.

The scope and extent of the power of regulation-making conferred will, of course, be very important circumstances. The greater the extent of law-making power conferred, the less likely is it that the enactment will be a law with respect to any subject matter assigned to the Commonwealth Parliament.

3.

The fact that Parliament can repeal or amend legislation conferring legislative power will not be a relevant matter because parliamentary power of repeal or amendment applies equally to all enactments. But all other restrictions placed by Parliament upon the exercise of power by the subordinate law-making authority will be important.

4.

The circumstances existing at the time when the law conferring power is passed or is intended to operate, may be very relevant upon the question of validity. A law conferring power to regulate, 121 in time of war or national emergency or under circumstances where it is essential to retain in some authority a continuous power of alteration or amendment of regulations, although clearly a law with respect to legislative power, might also be truly described as a law with respect to the subject matter of naval and military defence, or external affairs or another subject matter.

5.

The fact that a Commonwealth statute confers power to make regulations merely for the purpose of carrying out a scheme contained in the statute itself, will not prevent the section conferring power to make regulations from being a law with respect to legislative power. But ordinarily it will also retain the character of a law with respect to the subject matter dealt with in the statute.

6.

As is assumed in 5, supra, a Commonwealth enactment is valid if it is a law with respect to a granted subject matter, although it is also a law with respect to the exercise of legislative power.

7.

The fact that the regulations made by the subordinate authority are themselves laws with respect to a subject matter enumerated in ss 51 and 52, does not conclude the question whether the statute or enactment of the Commonwealth Parliament conferring power is valid. A regulation will not bind as a Commonwealth law unless both it and the statute conferring power to regulate are laws with respect to a subject matter enumerated in s 51 or 52. As a rule, no doubt, the regulation will answer the required description, if the statute conferring power to regulate is valid, and the regulation is not inconsistent with such statute. 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. … 123 … 312

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Victorian Stevedoring & General Contracting Co v Dignan cont. All that remains necessary is to re-examine s 3 to see whether it can itself be described as a law with respect to trade and commerce with other countries or among the States. It cannot be denied that the section is a law with respect to the legislative power of the Commonwealth and, if that were the only description it answered, it would not be valid. What s 3 committed to regulation by the Executive Government was not the whole but a small though important part of the subject matter of inter-State and foreign trade. The Commonwealth Parliament had before its consideration the necessity of securing continuity of operations in sea-going trade and commerce. Apparently it believed that interruption of services might occur by reason of trouble and disturbance in connection with the work of loading and unloading trading vessels. It did not consider itself able to lay down a rigid or general rule which could not be altered to meet the changing circumstances of the particular work. But it expressly reserved to each House of Parliament the right, under certain circumstances, of disallowing any regulations. It also had the knowledge that the body entrusted with the regulation-making power would exercise that power upon the advice of Ministers directly responsible to Parliament. … 124 … I am, therefore, of opinion that s 3 was also a law with respect to trade and commerce with other countries and among the States, and its validity should be reaffirmed.

[3.450]

1.

2.

3.

Notes&Questions

Dixon J and Evatt J each suggest that there may be some limits to the kinds of legislative power that can be validly delegated. What are they and how do they differ? What principles are they based on? Are they persuasive? Are they workable? The High Court has not had to elaborate these limits in any subsequent case, although Australian courts have been called on to demarcate delegated legislative power from other types of executive and statutory power in other contexts, notably when determining whether statutory regimes for the review of administrative decisions are applicable: see, eg, Roche Products Pty Limited v National Drugs and Poisons Schedule Committee (2007) 163 FCR 451. In Plaintiff S157/2002 v Commonwealth (2003) 211 CLR 476, Gaudron, McHugh, Gummow, Kirby and Hayne JJ suggested that a law purporting to delegate to the Minister “the power to exercise a totally open-ended discretion as to what aliens can and what aliens cannot come to stay in Australia” would not be valid: [101] The provisions canvassed by the Commonwealth would appear to lack that hallmark of the exercise of legislative power identified by Latham CJ in Commonwealth v Grunseit [(1943) 67 CLR 58 at 82], namely, the determination of “the content of a law as a rule of conduct or a declaration as to power, right or duty”. Moreover, there would be delineated by the Parliament no factual requirements to connect any given state of affairs with the constitutional head of power [Australian Communist Party v The Commonwealth (1951) 83 CLR 1 at 262 per Fullagar J].

4.

D Meyerson has argued (“Rethinking the Constitutionality of Delegated Legislation” (2003) 11 Australian Journal of Administrative Law 45 at 52–53): If the executive is given the power to determine the fundamental policy of the law, the idea of government by “law” – of power constrained by legal norms announced in advance – has been dispensed with. In its place is the exercise of power undirected by a legal framework and, since there is little for the notion of ultra vires to get a grip on, virtually unreviewable for excess by the courts. … Once it is appreciated that the purpose of the doctrine is, in part, to serve as a guarantee of individual political liberty and the rule of law, it becomes clear that there is a constitutional basis for a rule against [3.450]

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legislation which delegates wide-ranging legislative powers without providing any standards indicating how they are to be exercised. Such a rule would be in line with the recent cases on judicial power, whose focus, as has been explained, is on the normative basis of the separation of powers doctrine. … If we now ask why the framers should have vested legislative power in a Parliament “chosen by the people”, it must be because they thought the people’s elected representatives particularly well-suited to the exercise of the “open-ended discretion to choose ends” which is the essence of the legislative task.

5.

Section 3 of the Transport Workers Act 1928–1929 (Cth) authorised regulations “not inconsistent with the Act” but which took effect as law “notwithstanding anything in any other Act”. A “Henry VIII clause” is a provision in an Act that authorises regulations that amend or are inconsistent with the Act itself. What issues do these clauses present for the rule of law and separation of powers? The Senate Scrutiny of Bills Committee is empowered to consider and report on the inappropriate delegation of legislative power in the Bills it examines, including Henry VIII clauses.

6.

Various provisions of the Workplace Relations Act 1996 (Cth) as amended by the Workplace Relations Amendment (Work Choices) Act 2005 (Cth) applied to “prohibited content”. Section 356 provided that “The regulations may specify matters that are prohibited content for the purposes of this Act.” Section 846 was a regulation-making power in typical terms, empowering the Governor-General to “make regulations, not inconsistent with this Act, prescribing all matters: (a) required or permitted by this Act to be prescribed; or (b) necessary or convenient to be prescribed for carrying out or giving effect to this Act.” The AWU argued, following Grunseit and Dignan, that this attempt to delegate the power to specify “prohibited content” was invalid because failed to “indicat[e] the parameters within which those regulations could extend”: NSW v Commonwealth [2006] HCA 52; (2006) 229 CLR 1 (The Workchoices Case) [400] (see [5.460] for further discussion of this case). The High Court rejected these arguments, noting first that the Act specified required content and minimum entitlements that could not constitute “prohibited content” – a conclusion fatal to the unqualified submission that the Act failed to provide any parameters for what constituted prohibited content. The joint judgment went on: [415] [E]ven if the AWU had modified its submission to accommodate the points just made by conceding that some things were prohibited and contending that no ambit was defined beyond the limit of those prohibitions, the submission would fail. Section 356 provides that the regulations may specify matters that are prohibited content. Regulations of that kind would be regulations “prescribing … matters … permitted by this Act to be prescribed”, and hence would fall within s 846(1)(a). In the absence of express language precisely defining the ambit of the permitted prescription beyond the four matters just mentioned, that ambit would be identical with the ambit of the prescription contemplated by s 846(1)(b), namely that the regulations prescribe all matters “necessary or convenient to be prescribed for carrying out or giving effect to this Act” (emphasis added). It would be absurd if regulations could be made under s 846(1)(b) by reference to wider criteria than those applying to s 846(1)(a). In a case considering a formula to the effect of s 846(1)(b), but in language relevant to s 846(1)(a), Dixon, McTiernan, Williams, Webb, Fullagar and Kitto JJ said [Morton v Union Steamship Co of New Zealand Ltd [1951] HCA 42; (1951) 83 CLR 402 at 410]: “The ambit of the power must be ascertained by the character of the statute and the nature of the provisions it contains.” Here the character of the statute is one which, inter alia, makes provision for workplace agreements in Pt 8 and attaches significant consequences to the existence of those agreements. Their Honours continued [[1951] HCA 42; (1951) 83 CLR 402 at 410]:

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[3.450]

The Executive Power of the Commonwealth and the Executive Branch

CHAPTER 3

An important consideration is the degree to which the legislature has disclosed an intention of dealing with the subject with which the statute is concerned. In an Act of Parliament which lays down only the main outlines of policy and indicates an intention of leaving it to the Governor-General to work out that policy by specific regulation, a power to make regulations may have a wide ambit. Its ambit may be very different in an Act of Parliament which deals specifically and in detail with the subject matter to which the statute is addressed. [416] While the provisions about workplace agreements in Pt 8 are in many respects detailed, the main outlines of the policy it lays down as to what workplace agreements are to contain and are not to contain is not specific or detailed. It provides for some things workplace agreements must contain, but, apart from the matters already mentioned, it does not state what they may not contain save through the use of regulations made under s 356. The new Act has laid down the main outlines of policy in relation to workplace agreements but has indicated an intention of leaving it to the Executive to work out that policy in relation to what workplace agreements may not contain by specific regulation. Section 356 thus has a wide ambit. Its ambit must be construed conformably with the scope and purposes of the new Act as a whole, and with the provisions of Pt 8 in relation to workplace agreements in particular. The extent of the power is marked out by inquiring whether any particular regulation about the prohibited content of workplace agreements can be said to have a rational connection with the regime established by the new Act for workplace agreements.

7.

In Williams v Commonwealth [2014] HCA 23; (2014) 252 CLR 416, Mr Williams argued that s 32B of the Financial Management and Accountability Act 1997 (Cth) (discussed above [3.390]) provided no criterion limiting its operation to the scope of Commonwealth legislative power and provided the Executive with a “totally openended discretion” as to make, vary and administer arrangements, grants and contracts it applied to and whether the High Court (at [36]) read down s 32B, effectively rejecting the first argument, and found it unnecessary to consider the second.

[3.450]

315

PART III: THE LEGISLATIVE POWER OF THE COMMONWEALTH Chapter 5: Commerce and Corporations .......................................... .. 369 Chapter 6: External Affairs and Defence .......................................... .. 491 Chapter 7: Commonwealth Financial Powers .................................. .. 555 Chapter 8: Freedom of Interstate Commerce .................................. .. 653 Chapter 9: Excise Duties ...................................................................... .. 695 Chapter 10: Express Rights and Freedoms ....................................... .. 737 Chapter 11: Implications from Representative Government: Implied Rights and Freedoms ........................................ .. 825 Chapter 12: Intergovernmental Immunities .................................... .. 957

PARTIII

Chapter 4: Inconsistency ..................................................................... .. 319

CHAPTER 4 Inconsistency [4.10]

SECTION 109 ............................................................................................................ 320

[4.20]

PURPOSES OF SECTION 109 .................................................................................. 321

[4.30]

LAW – STATE AND COMMONWEALTH .................................................................. 322 [4.30]

[4.40]

Law ............................................................................................................ 322

INCONSISTENCY ...................................................................................................... 323 [4.40] [4.50]

Introduction ............................................................................................. 323 Impossibility of simultaneous obedience test ....................................... 323 [4.60]

[4.80]

[4.90] [4.100]

[4.120]

333 334 336 338

Native Title Case .......................................................................... 343 Botany Municipal Council v Federal Airports Corp ........................... 345

Expressly declining to cover the field .................................................... 346 [4.350]

[4.370]

O’Sullivan v Noarlunga Meat ........................................................ ABC v Industrial Court (SA) ........................................................... Ansett Transport Industries v Wardley ............................................ Australian Mutual Provident Society v Goulden ...............................

Express intention clauses ........................................................................ 341 Express covering of the field ................................................................... 342 [4.310] [4.320]

[4.340]

Ansett Transport Industries v Wardley ............................................ 330

Commonwealth legislative intention ..................................................... 332 Inferences ................................................................................................. 333 [4.200] [4.220] [4.240] [4.270]

[4.290] [4.300]

Clyde Engineering v Cowburn ........................................................ 326 Ex parte McLean .......................................................................... 327

Identification of the field ......................................................................... 329 [4.170]

[4.180] [4.190]

Clyde Engineering v Cowburn ........................................................ 324 Colvin v Bradley Bros .................................................................... 325

Covering the field test ............................................................................. 326 [4.130] [4.140]

[4.160]

R v Licensing Court of Brisbane; Ex parte Daniell ............................. 324

Denial of rights ......................................................................................... 324

University of Wollongong v Metwally ............................................. 347

One, two or three tests? ......................................................................... 354 [4.380] [4.400] [4.430]

Jemena Asset Management (3) v Coinvest ...................................... 354 Stock Motor Ploughs v Forsythe ..................................................... 358 Dickson v The Queen .................................................................... 360

[4.450] EXTENT OF INCONSISTENCY ................................................................................. 366 [4.460] INVALID ..................................................................................................................... 366 [4.470] OPERATIONAL INCONSISTENCY ............................................................................ 366 [4.480]

Kakariki case ................................................................................ 367

319

Part III: The Legislative Power of the Commonwealth

SECTION 109 [4.10] Within Australia, nine Parliaments – Commonwealth, State and Territory – possess

legislative power. In circumstances where they enact inconsistent, conflicting, repugnant or overlapping legislation, the following questions can arise: Are particular laws inconsistent? Which law is paramount? What consequences ensue for the other law? Section 109 of the Constitution provides the mechanism for the resolution of inconsistency between Commonwealth and State laws: 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.

Inconsistency may arise because Commonwealth legislative power in s 51 of the Constitution is not exclusive. State parliaments may enact laws with respect to the same subject matter in light of the legislative competence provided for by State constitutions to enact laws for the peace, order and good government of the State. Exclusive Commonwealth legislative power is provided for expressly in, eg, ss 52 (Commonwealth places), and 90 (customs and excise). The States are positively prohibited in s 114 from raising armed forces without Commonwealth consent and from imposing tax on Commonwealth property, and, in s 115, from coining money. State exclusivity arises under s 114 which prohibits the Commonwealth from imposing a tax on any property belonging to a State. If legislation was enacted by either the Commonwealth or State parliament which was prohibited to it, then it becomes an issue of constitutional invalidity, not inconsistency. Section 109 is not relevant in the resolution of inconsistencies between Commonwealth and Territorial legislation beyond providing “helpful signposts in the evolution of a doctrine” (Attorney-General (NT) v Minister for Aboriginal Affairs (1989) 90 ALR 59 at 71 per Lockhart J): “It is not a question of inconsistency between the two sets of laws which may otherwise be valid, rather it is a question going to the competency of the subordinate legislature to enact laws or to cause laws to operate in a manner inconsistent with or repugnant to laws of the paramount legislature” (at 75). See also Commonwealth v Newcrest Mining (WA) Ltd (1995) 58 FCR 167 at 179–180. Given that State legislation can constitutionally operate extra-territorially (eg, Broken Hill South Ltd v Commissioner of Taxation (NSW) (1937) 56 CLR 337; Dempster v National Companies & Securities Commission (1993) 9 WAR 215), a fourth occasion of inconsistency exists between State laws made by different State parliaments. Again, s 109 does not resolve such inconsistencies. Examples of, and suggestions as to how to resolve, State-State inconsistency appear in Breavington v Godleman (1988) 169 CLR 41 at 129, 137, 139; State Authorities Superannuation Board v Commissioner of State Taxation (WA) (1996) 189 CLR 253 at 285–286 per McHugh and Gummow JJ; Newcrest Mining (WA) Ltd v Commonwealth (1997) 71 ALJR 1346 at 1366; Rahim v Crawther and Kunst (1996) 17 WAR 559; and, M J Detmold, The Australian Commonwealth: A Fundamental Analysis of its Constitution (Law Book Co, Sydney, 1985), pp 133-157. A fifth example of inconsistency may arise between Territory and State laws. Legislation enacted by the Northern Territory and Australian Capital Territory legislatures derives from Commonwealth legislation – Northern Territory (Self-Government) Act 1978 (Cth) and Australian Capital Territory (Self-Government) Act 1988 (Cth) – which is based upon s 122 of the Constitution. A law made under s 122 is a Commonwealth law and, by virtue of s 109, prevails over inconsistent State laws: Lamshed v Lake (1958) 99 CLR 132. However, Northern Territory and Australian Capital Territory laws are probably not “laws of the Commonwealth” within s 109 and, therefore, would not invalidate inconsistent State laws. In Kruger v Commonwealth (1997) 71 ALJR 991 at 1009–1010, Dawson J said that s 109 “deals with inconsistency between State and Commonwealth laws, [and] would appear … not to 320

[4.10]

Inconsistency

CHAPTER 4

have in contemplation inconsistency between State and territory laws.” (See also Newcrest v Commonwealth (1997) 71 ALJR 1346 at 1366 per Dawson J.) However, could the Commonwealth Parliament legislate to provide that Territory law should render inconsistent State laws inoperative? Would such a Commonwealth statute achieve its purpose pursuant to Lamshed v Lake (1958) 99 CLR 132?

PURPOSES OF SECTION 109 [4.20] Given the assistance which may derive from the framers’ intentions to constitutional

interpretation what purpose or purposes was s 109 intended to serve? One suggestion has been that s 109 has a public institutional purpose. For example, in Flaherty v Girgis (1989) 63 ALR 466 at 470, Kirby P considered that: “Courts applying s 109 of the Constitution must remember that [s 109] appears in a Constitution, Federal in nature, the genius of which involves normally harmonious operation in the one country of a number of law making polities.” Latham CJ in Re Richard Foreman & Sons Pty Ltd; Uther v Federal Commissioner of Taxation (1947) 74 CLR 508 at 520 stated that the Commonwealth Parliament “is in a position to protect the Commonwealth against State legislation which, in the opinion of the [Commonwealth] Parliament, impairs or interferes with the performance of Commonwealth functions or the exercise of Commonwealth rights.” Examples of where this protective function occurs are in Commonwealth legislation exempting Commonwealth agencies or authorities and private persons or organisations from State taxation laws. See J Stellios, Zines’s The High Court and the Constitution (6th ed, Federation Press, Sydney, 2015), pp 509-518. A second object of s 109 is to articulate one situation in which the Constitution directs that State laws do not have to be obeyed; ie where a State law is “invalid” as a result of inconsistency with a Commonwealth law. (See, in this respect, the “rights” notions of Gibbs CJ and Deane J in University of Wollongong v Metwally discussed in the next section. A declaration that a State criminal law is invalid under s 109 can be sought by persons who have engaged in conduct which contravenes State criminal law even though no prosecution is pending or threatened. See Croome v Tasmania (1997) 71 ALJR 430.) A third objective may be to restrict or limit Commonwealth legislative power (and, perhaps, consequentially to enhance State legislative power). Differences over the extent of this restriction and its purpose as a constitutional guarantee or right to protect individuals emerged in University of Wollongong v Metwally (1984) 158 CLR 447. Gibbs CJ (at 458) stated 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.” Similarly, Dean J stated (at 477, 478–479) that s 109 “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 …” It is the Constitution and not the Commonwealth Parliament which tells the citizen faced with the dilemma of inconsistent Commonwealth and State laws which both … apply to [them] that the State law is invalid and can be disregarded. Mason J (dissenting at 460–463) developed a more nuanced approach: [S]ection 109 is not a source of individual rights and immunities except insofar as individual rights and immunities are necessarily affected because [s 109] renders inoperative a State law which is inconsistent with a Commonwealth law. Nor is [s 109] 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 [s 109]. In these circumstances to distill from s 109 an unexpressed fetter upon Commonwealth legislative power is to twist [s 109] from its true meaning and stand [s 109] upon its head.

In addition to Mason J’s critique of the view of Gibbs CJ and Deane J that s 109 has civil liberties implications: see Zines (6th ed, 2015), pp 663-665, 630-631. [4.20]

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LAW – STATE AND COMMONWEALTH “Law” [4.30] “Law” includes legislation enacted by State and Commonwealth Parliaments:

Engineers’ Case (1920) 28 CLR 129 at 155. It also includes regulations or subordinate, delegated legislation. In O’Sullivan v Noarlunga Meat Ltd (No 1) (1956) 95 CLR 177, Commonwealth regulations prevailed over State laws. Administrative orders or instructions issued under Commonwealth regulations are not laws and, therefore, do not render inconsistent State laws inoperative: Airlines of New South Wales Case (No 1) (1964) 113 CLR 1 at 31. Commonwealth industrial awards can render inconsistent State laws “invalid” pursuant to s 109. Yet Commonwealth and State industrial awards are not laws. Why therefore have Commonwealth industrial awards been held to prevail over inconsistent State laws, as the cases herein extracted indicate? In Ex parte McLean (1930) 43 CLR 472 (at 485), Dixon J suggested that s 109 operates on or through the legislative provisions which authorise or empower arbitrators to make awards. It is not the award which is the key element, but the statutory authority to make awards disregarding State laws. Another suggestion is that s 109 includes industrial awards because Commonwealth legislation contains a statutory version of s 109: Metal Trades Industry Association v Amalgamated Metal Workers’ and Shipwrights’ Union (1983) 152 CLR 632 at 648; Dao v Australian Postal Commission (1987) 162 CLR 317 at 377. Such Commonwealth legislation stipulates that State laws and awards which are inconsistent with a federal award are, to the extent of the inconsistency, invalid. See Industrial Relations Act 1988 (Cth), s 152 and that section as amended by the Workplace Relations and Other Legislation Amendment Act 1996 (Cth). But State law is nevertheless inoperative through s 109, not through the operation of the Commonwealth provision itself. These considerations constitute only one factor in determining the legislative intent in giving arbitrators authority to make awards. Does s 109 include federal common law? Professor Lane appears to have resiled from an affirmative answer. Compare P H Lane, The Australian Federal System (2nd ed, Law Book Co, Sydney, 1979), p 866 with Lane (2nd ed, 1997), pp 768-769. In University of Wollongong v Metwally (1984) 158 CLR 447 at 468, Murphy J asserted that State common law is within the phrase “state law”. But this view is unorthodox: see Lane (2nd ed, 1997), p 769, n 13. Dr H V Evatt considered that “law of the Commonwealth” in s 109 included Commonwealth prerogative or common law powers of the Crown and, therefore, that Commonwealth prerogatives prevailed over inconsistent State prerogatives: H V Evatt, The Royal Prerogative (Law Book Co, Sydney, 1987), pp 210-211, 220-221 and see Commentary therein by Zines at pp C13-C15. However, the High Court has rejected both propositions: Cowburn’s Case: (1926) 37 CLR 466 at 497; Ex parte McLean (1930) 43 CLR 472 at 483–485; Farley’s Case (1940) 63 CLR 278 at 286–287, 291–292, 294, 304–305, 312, 323 (Evatt J), 327. Also, the High Court has disregarded s 109 in resolving conflicts between State legislation and Commonwealth prerogatives: Uther’s Case (1947) 74 CLR 508 at 520, 532; Cigamatic Case (1962) 108 CLR 372 at 378. See G Winterton, Parliament, The Executive and The Governor-General (Melbourne University Press, Melbourne, 1983), p 241, n 26. Before s 109 operates there must be valid Commonwealth and State laws. Of course, to avoid deciding the constitutional validity of legislation, judges may initially consider whether there is an inconsistency. With this approach, constitutional validity only needs to be addressed if Commonwealth and State legislation is inconsistent. See Lane (2nd ed, 1997), pp 770-771. 322

[4.30]

Inconsistency

CHAPTER 4

INCONSISTENCY Introduction [4.40] The High Court has developed three “tests” to determine if an inconsistency has

arisen, although it is probably more appropriate to refer to these as approaches to the issue: “impossibility of obedience”; “denial of rights”; and “covering the field”. Some suggestions have been made that the latter two tests really meld into one, as will be discussed below. However, as Kirby P in Flaherty v Girgis (1989) 63 ALR 466 at 470 recognised: “it is naive to believe that a simple test of inconsistency can be derived by offering formulae, in words of suggested equivalence, as if those words provide clarity where the single constitutional word ‘inconsistent’ does not.” Yet, if application of inconsistency tests or criteria is not merely a formulistic ritual, neither is resolution of s 109’s central dilemma a matter of arbitrary or subjective whim. As in most situations of constitutional law decision-making, both extremes are tempered into a process of reasoned elaboration. This was recognised by K Booker, A Glass and R Watt, Federal Constitutional Law: An Introduction (2nd ed, Butterworths, Sydney, 1998), para 13.19: These tests … cannot be put to one side as though they have no role to play in disputes over inconsistent laws. The three tests now adhere to the constitutional text. Any legal argument concerning the operation of s 109 will have to take them into account. They will not be decisive in the final outcome but they will play a role in structuring the legal argument. They direct the interpreter of s 109 towards such questions as: is there a collision of duties; has the Commonwealth law granted a right in the sense of a protected liberty and to what fields do the Commonwealth and State laws relate; or, what is the Commonwealth’s intention with regard to State law? These questions are raised, but not answered, by the tests. As with any method or technique of interpretation the application of the tests calls for further acts of judgment.

Of course, such “judgment” may be informed and influenced by other considerations such as theories of federalism. Therefore, it is likely no mere coincidence that Isaacs J, who delivered and appears to have written the majority opinion in the Engineers’ Case, proclaimed the “covering the field” test in Cowburn’s Case (at 489) to give “inconsistent” an expansive meaning. Two consequences ensued. First, as the interpretation of s 109 expanded, the legislative field open to State laws contracted as State legislation became vulnerable to being “invalid”. Secondly, the Commonwealth Parliament could use Engineers’ and Cowburn to erect extensive Commonwealth legislative regulation and controls and ensure its supremacy by preventing State laws from operating. Higgins J, in contrast to Isaacs J, favoured a narrow s 109 test, possibly as a corollary to a liberal view of Commonwealth power. Higgins J may have been politically more cautious, Isaacs J more logically consistent. Prior to Engineers’, a narrower interpretation of Commonwealth legislative powers meant that State legislation, actual and potential, was less vulnerable to being rendered inoperative by virtue of Commonwealth laws. Impossibility of simultaneous obedience test [4.50] The gist of this test of inconsistency is the determination of the impossibility of obeying

one law without disobeying the other. The leading case remains Daniell.

[4.50]

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Part III: The Legislative Power of the Commonwealth

R v Licensing Court of Brisbane; Ex parte Daniell [4.60] R v Licensing Court of Brisbane; Ex Parte Daniell (1920) 28 CLR 23 at 29 [Section 166 of the Liquor Act 1912 (Qld) required that a State referendum on liquor trading hours “shall be held [on the same day in 1917 as] the Senate election …”. However, 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 election day. The High Court unanimously held that the Commonwealth and Queensland laws were inconsistent. For the majority, Knox CJ, Isaacs, Gavan Duffy, Powers, Rich and Starke JJ, the s 109 inconsistency was (at 29):] “A conflict, or inconsistency, between the State Act authorising and commanding the [referendum] vote on [5 May 1917] and the Commonwealth Act … forbidding the [referendum] vote on [5 May 1917]. Then s 109 of the Constitution enacts that in such a case the State law, to the extent of the inconsistency is invalid.”

Notes&Questions

[4.70]

As a matter of law, the only way State officials conducting the referendum could have obeyed State law was by “commanding [that] the vote” be on 5 May 1917 and, therefore, contravening Commonwealth law “forbidding the vote” on 5 May 1917. Denial of rights [4.80] The impossibility of obedience test is not an exclusive test and s 109 inconsistency can

occur where rights (rather than contradictory obligations) are involved. This second “test” is often expressed in the words of Dixon J in Victoria v Commonwealth (the Kakariki Case) (1937) 58 CLR 618 at 630: “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.” Professor Geoffrey Lindell in his article “Grappling with Inconsistency between Commonwealth and State Legislation and the Link with Statutory Interpretation” (2005) 8 Constitutional Law and Policy Review 25 at 37 said: “[The ‘alter, impair or detract’] test should not be seen as an independent test for determining … inconsistency. Instead, it should be understood as a synonym for inconsistency”. However, Professor Lindell acknowledged that the High Court in APLA Ltd v Legal Services Commission (NSW) (2005) 79 ALJR 1620 appeared “to confirm the modern trend in favour of treating it as a separate test” (at n 51). For further discussion on this trend, see below at [4.370].

Clyde Engineering v Cowburn [4.90] Clyde Engineering Co Ltd v Cowburn (1926) 37 CLR 466 at 478 [The Forty-Four Hours Week Act 1925 (NSW) provided that “ordinary working hours” should not exceed 44 hours a week and workers under a Commonwealth award – which stipulated a 48 hour working week – should be paid full award wages when they worked for 44 hours. The Commonwealth award stipulated that a worker doing less than 48 hours work “should lose his pay for the actual time of non-attendance”. Cowburn worked a 44 hour week and invoked the State law. In accordance with the Commonwealth award, Clyde Engineering Co Ltd deducted an amount from Cowburn’s wages. A majority (Knox CJ, Gavan Duffy, Rich, Isaacs and Starke JJ) held (on the basis of different inconsistency tests) that the State law and Commonwealth award were inconsistent. Knox CJ and Gavan Duffy J [formulated and applied a denial of rights test:] 478 [T]he [impossibility of obedience] 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 disobeying the other. 324

[4.60]

Inconsistency

CHAPTER 4

Clyde Engineering v Cowburn cont. 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. [Isaacs and Rich JJ agreed with this denial of rights test (at 522). Their Honours also used (to achieve the same result) the covering the field test. However, Higgins and Powers JJ dissented because Clyde Engineering Co Ltd could have obeyed the State law without disobeying the Commonwealth award (at 503, 516).

Colvin v Bradley Bros [4.100] Colvin v Bradley Bros Pty Ltd (1943) 68 CLR 151 at 160, 161, 163 [Pursuant to the Factories and Shops Act 1912 (NSW) it was an offence to employ women on milling machines. A Commonwealth industrial award declared that employers, “may employ females on work in industries and callings covered by this award”. Bradley Bros, a party to the award, was prosecuted under the NSW Act for employing females on milling machines. The High Court held that the State and Commonwealth laws were inconsistent and the State law was “invalid”.] Latham CJ: 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 … In this case there is … a clear inconsistency, and therefore the Commonwealth award prevails. It has been argued that the State legislation … relates to general social conditions and is directed to community welfare, whereas the Commonwealth award is directed only to the relations between particular employers and employees in certain industries or callings. This may be the case … But it cannot be said that where there is actual inconsistency between a State law and a Federal law or … between an order made under State law and an award made under Federal law, the fact that one law may from one point of view be placed within a particular category (eg, health or social conditions) and the other law may from another point of view be placed within another legislative category (eg, industrial arbitration) prevents the application of s 109 of the Constitution. The application of s 109 does not depend upon any assignment of legislation to specific categories which are to be assumed on an a priori basis to be mutually exclusive.] Starke J: 161 A direct collision between the two laws in the present case … [between the State law which] provides in effect that females shall not be employed [and the Commonwealth law which] in effect permits parties to the [Commonwealth] award to employ females in any factory on any work in connection with milling machinery. [Also, Williams J mentioned “direct” inconsistency: “The permission and prohibition, both of which deal with the same subject matter, are therefore in direct collision” (at 163).

[4.110]

Notes&Questions

1.

In all of these cases, even when a finding of inconsistency was made, both the Commonwealth and State laws could have been simultaneously obeyed.

2.

The denial of rights test, however, requires the conferral and abrogation of a right by Commonwealth and State laws. Thus, for example, in R v L (1991) 174 CLR 379, the High Court considered s 73(3) of the Criminal Law Consolidation Act 1935 (SA), which stated that marriage did not entail the presumption of consent to sexual intercourse, and s 114(2) of the Family Law Act 1975 (Cth), which, the High Court held, did not confer on spouses a “conjugal right” to sexual intercourse with the other [4.110]

325

Part III: The Legislative Power of the Commonwealth

spouse. Therefore, the State and Commonwealth laws were not inconsistent and s 109 did not preclude a husband being prosecuted for sexual assault on his wife. 3.

Inconsistency as a result of impossibility or rights tests cannot be avoided or removed by Commonwealth legislation manufacturing covering the field consistency: R v Credit Tribunal; Ex Parte General Motors Acceptance Corp (1977) 137 CLR 545 at 563 per Mason J.

Covering the field test [4.120] The main element of this test is the intention of the Commonwealth parliament, by its

enactment, to cover the field with respect to the subject matter, or “field” of the legislation. If such an intention is determined to exist, either expressly or by implication, then inconsistency is established if any State law enters that field. This will be the result even if there are no conflicting rights or duties; Commonwealth and State laws require the same conduct; and Commonwealth and State laws create the same offences and impose the same penalties. The application of this “covering the field” test involves asking three general questions: (1) What field or subject matter does the Commonwealth law regulate, control or deal with? (2) Does the Commonwealth law intend, expressly or impliedly, to cover that field completely and exhaustively? (3)

Does the State law attempt to enter into or regulate the field or part of the field covered by the Commonwealth law? Classic statements of the cover the field test are provided by Isaacs and Dixon JJ.

Clyde Engineering v Cowburn [4.130] Clyde Engineering Co Ltd v Cowburn (1926) 37 CLR 466 at 489–490 Isaacs J: [The facts were set out above in the previous section] 489 It is said that the State Act concedes to the Federal award its full operation, since it says nothing about the deduction for hours not worked, and merely creates a new and independent right to a further payment for the hours actually worked. The infallible test of whether in so providing there is inconsistency is said for the respondent to be whether the two provisions of deduction on the one hand and extra payment on the other could both be obeyed. No doubt the employer could obey both, that is physically. So he could if the State Act required him after deducting the 9s 4d to return it immediately. That, it is gravely argued, avoids inconsistency. If an Act of Parliament, for instance, prescribed 25 lashes for robbery under arms and a later Act prescribed that such an offender should be punished with 20 lashes, it could, of course, with equal truth be said that both provisions could be obeyed, and therefore, applying the suggested test, the offender must receive 45 lashes. But surely the vital question would be: Was the second Act on its true construction intended to cover the whole ground and, therefore, to supersede the first? If it was so intended, then the inconsistency would consist in giving any operative effect at all to the first Act, because the second was intended entirely to exclude it. The suggested test, however useful a working guide it may be in some cases or, in other words, however it may for some cases prove a test, cannot be recognized as the standard measuring rod of inconsistency. If, however, 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 … 490 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. Where that wholesale inconsistency does not occur, but the field is partly open, then it is necessary to inquire further and possibly to examine and contrast particular provisions. If one enactment makes or acts upon as lawful that which the other makes unlawful, or if one enactment makes unlawful that which the other makes or acts upon as lawful, the two are to that extent inconsistent. It is plain that it may be quite possible to obey both simply by not doing what is declared by either to be unlawful and yet 326

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Clyde Engineering v Cowburn cont. there is palpable inconsistency. In the present case there is inconsistency in both of the senses I have described.

Ex parte McLean [4.140] Ex Parte McLean (1930) 43 CLR 472 at 483–487 [The s 4 of the Masters and Servants Act 1902 (NSW) created an offence for employees to fail to fulfil their contractual work obligations. The Conciliation and Arbitration Act 1904 (Cth) created an offence of breaching a Commonwealth industrial award. A Commonwealth award covering the shearing industry stipulated that employers and shearers should comply with the award and agreements which they had made. As a result of a dispute, McLean stopped shearing sheep. His employer prosecuted and McLean was convicted of an offence under s 4 of the NSW Act. The High Court held that the State and Commonwealth laws were inconsistent.] Dixon J: 483 Section 44 of the Commonwealth Conciliation and Arbitration Act 1904–1928 penalizes any breach or non-observance of an award, and, inasmuch as the award in this case commanded performance of the applicant’s contract, his neglect to fulfil it would constitute an offence under this provision. 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 a 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 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 penalizes is the breach of industrial awards. There is no collision between an intention to deal exclusively with disobedience of awards and 484 a law for the punishment of breach of contract. The Federal instrument, which prescribes performance of the shearers’ contract of service, is the award of the Commonwealth Court of Conciliation and Arbitration. But unlawful as it is to depart from the course which such an instrument describes and requires, the instrument itself is, nevertheless, not “a law of the Commonwealth” within the meaning of those words in s 109. Section 109 cannot, therefore, operate directly upon it so as to render a State law invalid because it is inconsistent with the intentions which the arbitrator expresses in the award. But these considerations do not end the matter. They do establish that if State law is superseded it must be upon the ground that the State law thereupon becomes inconsistent with the meaning and effect of the Commonwealth Conciliation and Arbitration Act itself. But the provisions of that 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 [4.140]

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Ex parte McLean cont. 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. Close consideration of the reasons given by Isaacs, Rich and Starke JJ in Clyde Engineering Co Ltd v Cowburn (1926) 37 CLR 466) shows that the view upon which they acted in that case and applied afterwards in H V McKay Pty Ltd v Hunt ((1926) 38 CLR 308) was substantially that the Constitution empowered the Parliament to give and that Parliament had given the award this exclusive authority. The view there taken, when analyzed, appears to consist of the following steps, namely: (i) The power of the Parliament 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 enables the Parliament to authorize awards which, in establishing the relations of the disputants, disregard the provisions 485 and the policy of the State law; (ii) the Commonwealth Conciliation and Arbitration Act 1904–1928 confers such a power upon the tribunal, which may therefore settle the rights and duties of the parties to a dispute in disregard of those prescribed by State law, which thereupon are superseded; (iii) s 109 gives paramountcy to the Federal statute so empowering the tribunal, with the result that State law cannot validly operate where the tribunal has exercised its authority to determine a dispute in disregard of the State regulation. The distinction between this doctrine and one which gives to s 109 a direct application to Federal awards is probably not confined to the mode of reasoning by which the conclusion is reached. It may well be that the distinction extends to the results produced. If a Federal statute forbids a particular act or omission and means to state what shall be the law upon that specific matter, any State law which dealt with the same act or omission would become inoperative, and it would probably be of no importance whether each Legislature was directing its attention to the same general topic or had dealt with the same act or omission in the process of legislating upon two entirely different subjects … On the other hand, the Commonwealth Conciliation and Arbitration Act 1904–1928 in giving force and effect to awards necessarily confines their exclusive authority to the regulation of industrial relations and, moreover, to the regulation of industrial relations which are in dispute. It may perhaps follow from this rule that, while the arbitrator can make his award the exclusive measure of industrial rights and duties between the disputants, the laws of a State which do not regulate industry at all are not inconsistent with the exclusive authority which the Commonwealth statute gives to the award merely because they deal with specific conduct which, as between the disputants, is dealt with by the award. For example, if the award in this case expressly forbad shearers to injure sheep 486 when shearing, it would not be a necessary consequence that a shearer who unlawfully and maliciously wounded a sheep he was shearing could not be prosecuted under the State criminal law for unlawfully and maliciously wounding an animal. It is not, however, necessary to determine whether this distinction in the application of the doctrine is valid. It may be assumed that provisions of State law which prohibit acts or omissions irrespective of the relation of employer and employed, and without regard to any other industrial relation or matter, are not superseded under sec 109 merely because it happens that in their industrial aspect the same acts or omissions by parties to a dispute are forbidden by Federal award and by this means made punishable under the Federal statute. But, in this case, the State law, sec 4 of the Masters and Servants Act 1902, deals directly with the relation of employer and employed, and in virtue of that industrial relation makes penal the very default which the Federal law punishes somewhat differently in the regulation of the same relation. The case, therefore, is not one in which conduct made punishable by State law on grounds which do not affect industrial relations is forbidden by an award as a regulation of industry, and thus brought also within the penalties of the Commonwealth Conciliation and Arbitration Act 1904–1928. It may be objected that the present case does not fall within the doctrine which ascribes such efficacy to an award because the Federal tribunal has not made an award in disregard of State law but, so far as material, has in effect forbidden the very neglect to perform a contract of service which State law punishes; and that it does not fall within the description of inconsistency illustrated by Hume v Palmer ((1926) 38 CLR 441) because there the respective Legislatures had each directed its attention to the same subject and both had themselves prescribed the rule upon it, while here the Commonwealth 328

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Ex parte McLean cont. Parliament directed its attention to disobedience of awards and the State Legislature dealt only with the breach of contracts. But the substance of what the Federal award did in this case was to command performance of the prescribed contract as an industrial duty proper to be imposed and enforced by Federal law according to the sanctions 487 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 H V McKay Pty Ltd v Hunt ((1926) 38 CLR 308), the Commonwealth Conciliation and Arbitration Act 1904–1928 gives full and complete efficacy and exclusive authority to this regulation of the Federal tribunal, and sec 109 makes this statute prevail. In these conditions, in so far as it affects persons bound by the award, s 4 of the Masters and Servants Act 1902 is inconsistent with the provisions of the Federal statute and, by virtue of s 109 of the Constitution, the latter must prevail, and the former to the extent of the inconsistency is invalid. Accordingly no offence was committed against State law by the applicant, and the order nisi for prohibition must be made absolute.

Notes&Questions

[4.150]

1.

Booker, Glass and Watt (2nd ed, 1998), para 3.10 suggest that: In McLean’s case the performance of a shearing contract was subject to two co-existent laws. Breach of this contract of employment was punishable under both the [Commonwealth and State Acts]. Without doubt these two laws overlapped, but whether this meant that they were inconsistent could not properly be analysed in terms of duties or rights. It was possible for McLean to obey both laws and it could not be said that [McLean’s] liability to Commonwealth law gave him a right to be free of any more stringent penalty imposed by State law. Whether or not these [Commonwealth and State] laws could stand together depended on an analysis of Commonwealth [statutory] intention. There was no inconsistency between them unless the Commonwealth [Parliament] meant its law to be exclusive on this topic.

2.

In Victoria v Commonwealth (the Kakariki Case) (1937) 58 CLR 618 at 630, Dixon J reiterated the covering the field test: [I]f 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.

Identification of the field [4.160] A central consideration in the application of the “covering the field” test is the

determination of the “field” which is being covered by the Commonwealth law. For if Commonwealth and State laws deal with different fields or subject matters, there may be an intermeshing of laws, but there will not be covering the field inconsistency. The identification of the field or subject matter of the Commonwealth law requires the characterisation of that law and also of the relevant State law to determine whether the latter enters the Commonwealth field. This characterisation process (especially of Commonwealth laws) is a general constitutional law issue and is not confined to s 109. As discussed elsewhere herein (see esp Chs 5, 9 and 14), the High Court characterises legislation by examining the law’s direct legal operation through its textual terms and provisions to ascertain, for example, what rights, [4.160]

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duties and obligations are created or affected. However, in the more recent jurisprudence of the High Court, it is also a case of the practical effect of the legislation. It is not possible to determine by way of precise formula how the Court will characterise legislation for these purposes, whether it will characterise the Commonwealth field broadly or narrowly. Much will depend on the legislation in issue in each case. Thus, in O’Sullivan v Noarlunga Meat Ltd (1954) 92 CLR 565, Fullagar J (with Dixon CJ and Kitto J agreeing) indicated that the same subject matter – use of premises for slaughtering stock for export – was regulated by Commonwealth and State legislation; that the Commonwealth Act intended to cover that field impliedly; that the State Act attempted to enter that field; and, therefore, the laws were inconsistent and the State Act was invalid. However, several cases – Airlines of New South Wales (No 2) (1965) 113 CLR 54; New South Wales v Commonwealth (Hospital Benefits Fund Case) (1983) 151 CLR 302; Commercial Radio Coffs Harbour Ltd v Fuller (1986) 61 CLR 47; Love v Attorney General (NSW) (1990) 169 CLR 307; and Wardley at 253–254 (Stephen J) – indicate a willingness to characterise Commonwealth and State laws as dealing with or regulating distinct or different fields, with the result that there was no covering the field inconsistency. The Wardley case, in particular, illustrates the difficulties involved, especially in situations where there is qualitative difference between the two laws; that is, when one law is, for example, a straightforward regulation of a particular subject matter and the other law relates to social policy issues such as discrimination and civil rights which nevertheless affect the way the former law may be applied or which may indeed be directly inconsistent with it.

Ansett Transport Industries v Wardley [4.170] Ansett Transport Industries (Operations) Pty Ltd v Wardley (1980) 142 CLR 237 at 246–253 [Ms Wardley applied to become a pilot for Ansett, the company’s first. The Equal Opportunity Act 1977 (Vic) prohibited discrimination on the basis of sex in employment or dismissal. The Airline Pilots Agreement 1978 (which through the Conciliation and Arbitration Act 1904 (Cth) had the same legal force as an industrial award) authorised employers to employ and dismiss pilots. The Equal Opportunity Board found that Ansett refused to employ Ms Wardley as a pilot because of her sex and ordered Ansett so to employ her. Ansett argued that there was a s 109 inconsistency between the Airline Pilots Agreement and the Victorian Act. Mason, Murphy and Wilson JJ (Barwick CJ and Aickin J dissenting) held that the 1978 Agreement did not intend to cover the field of dismissal or to provide an unqualified right to dismiss. Stephen J, also in the majority, held that there was no inconsistency on the slightly different ground that the Commonwealth law (the Agreement) and the State law dealt with different fields or subject matters.] Stephen J: 246 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. The Agreement is not, I think, to be read as if creating a partial vacuum, within which the relationship between Ansett and its pilots lies wholly withdrawn from the operation of those general laws of the land which are applicable to other members of the 247 community. To take an example which s 6 itself affords, when par A of that clause requires pilots “to serve the employer in any part of the world” it is not for a moment to be understood as seeking to ignore, even were it able to do so, such restrictions upon travel by Australians, say to countries with which Australia is at war, as the Commonwealth Government may at any time impose. Resort to context would, simply as a matter of construction, readily resolve such a suggested conflict. It happens that in this example it would be with Commonwealth not State law that, until properly construed, the Agreement might seem to conflict, and an award cannot, in any event prevail over Commonwealth law. … The present industrial agreement, made in settlement of an industrial dispute, is concerned with industrial matters and its 330

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Ansett Transport Industries v Wardley cont. terms should be construed accordingly; they should not be regarded as trespassing upon alien areas remote from its purpose and subject matter, whether those areas concern the nation’s foreign affairs or social evils such as discrimination upon the ground of sex. 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 view that the Agreement is not to be read in isolation from, but, rather, against the background of, the general law of the land finds support in certain features of the Agreement. Thus, in cl 22 the Agreement makes a brief yet quite specific reference to the existence of pilots’ entitlements to long service leave and these are entitlements conferred by State law; the Agreement clearly enough assumes that that law will apply to 248 pilots. Again, the provisions of the Agreement regarding grievance procedures are elaborate, yet they provide no particular criteria or considerations which are to be applied in the determination of any review or appeal from a dismissal. It will no doubt be by reference to any relevant provisions of the general law, together with general notions of fairness and fair dealing, that such proceedings are determined. Included in that general law will be any applicable statute law, whether State or Commonwealth. … 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 249 grounds of sex or marital status; whatever other effect it may have within those areas is only incidental to its operation in proscribing sexual discrimination and in promoting equality of opportunity. On the other hand, the Agreement’s concern, appropriately enough in the case of an agreement made in settlement of an industrial dispute, is narrowly confined to employment relationships as between Ansett and its pilots and to an intricate system for the allocation of particular duties as between pilots. In it is to be found no hint of concern with any such general social questions as equality of opportunity between men and women or discrimination on the grounds of sex or marital status. It is not that the terms of the Agreement appear to be in any way opposed to the concept of the equal status and treatment of women. Rather, the whole question is simply one which is not adverted to, and this because a reading of the Agreement makes it tolerably clear that it was drawn upon the unstated assumption that the situation for which it was legislating was one in which no pilots were women. … That these two measures are so disparate is not to say that there may not arise from the interaction of their provisions some inconsistency such as that with which s 109 of the Constitution deals. As their Lordships said in Charles Marshall Pty Ltd v Collins ((1957) 96 CLR 1; [1957] AC 274 at 8 (CLR) at 287 (AC)), “It is of course possible for Acts dealing primarily with different subject matters to have inconsistent provisions on particular matters”. However their Lordships immediately went on to say of such cases that “Apparent inconsistencies may however disappear, as here, when the words are construed in the limited context of the respective Acts”. To construe two measures of different legislatures, each of which represents an explicit attempt to establish a competing legislative regimen in a 250 particular area of human affairs, is not likely to resolve apparent inconsistency. On the contrary, any process of construction of their provisions which takes account of context is then likely [4.170]

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Ansett Transport Industries v Wardley cont. only to emphasize their inconsistency by better revealing the respective legislative intents. Thus revealed they will be seen as involving rival regimens whose occurrence is the very problem, typically federal in character, which s 109 is designed to resolve. When, on the other hand, two measures are concerned with different subjects their collision “is less likely to occur than it is where the two laws are dealing with the same subject matter”: Clarke v Kerr (1955) 94 CLR 489 at 505. When they are essentially disparate in character, as are the Agreement and the Act, their interaction at some point may well be shown, once they are construed and account is taken of the “limited context of the respective Acts”, to involve no element of inconsistency. Not only will no conscious competition between legislatures be revealed: the context may on the contrary suggest an intent that each measure should keep within its own confines. Their interaction will then involve no more than an intermeshing of laws, each legislature having confined itself to those aspects of a particular situation appropriate to its own particular role in the federal compact. Such is the present case. 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 1904 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 251 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”. … 253 Concluding, … there is … no … such inconsistency arising under the doctrine of “covering the field”. …

Commonwealth legislative intention [4.180] If it is determined that a State law does enter the Commonwealth field, then it must be

shown that the Commonwealth intended to cover that field to establish inconsistency. This will not be the case where the statutory intention of the Commonwealth is to complement or supplement State law. How is the intention of the Commonwealth Parliament to be determined? Before examining this precise issue, it is noted that there may be circumstances where a precise parliamentary focus may not suffice such as where the Commonwealth “law” is an industrial award. If an examination of the Commonwealth Act reveals that Parliament intended to confer on arbitrators power to make awards exhaustive of matters in dispute or concerning industrial relations (as Dixon J concluded in Ex parte McLean), it may be necessary to analyse the award to ascertain the arbitrator’s intention to decide whether the Parliament’s intention has been implemented. Thus in T A Robinson & Sons Pty Ltd v Haylor (1957) 97 CLR 177, under consideration was the Long Service Leave Act 1955 (NSW) which conferred on employees a right to paid leave following 10 years employment with an employer. The relevant Commonwealth industrial award was silent about long service leave. The High Court (Dixon CJ, McTiernan, Williams, Webb, Kitto and Taylor JJ) decided that the Commonwealth law did not intend to cover the field (at 184): “There is nothing to show that [the Conciliation Commissioner] meant that his determination should cover the grounds of long service leave to the exclusion of any right arising from any other source of authority. If he 332

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had entertained any such intention he should have expressed it in his award.” Another example is where an agreement between private parties has been given the force of law. While the intention of Parliament must be ascertained, in practice (as with industrial awards) this is premised on the intention of the parties to the agreement. For example, the Conciliation and Arbitration Act 1904 (Cth), s 28(3) conferred on the Airline Pilots Agreement 1978 (which was certified by the Flight Crew Officers’ Tribunal) the same legal force as a Commonwealth award. In deciding that this 1978 Agreement was not inconsistent with the Equal Opportunity Act 1977 (Vic), the High Court in Wardley (1980) 142 CLR 237 had to determine the Commonwealth Parliament’s intentions. In effect, this required the court to ascertain the intentions of the parties to that Agreement. Ascertaining the Commonwealth legislative intention is generally a matter of statutory interpretation: What inferences about legislative intent can be drawn from the law’s words, details, subject matter and omissions or silence? Does the law contain an express and unequivocal provision indicating that it intends or does not intend comprehensively to cover the field? As the Wardley Case indicates, there is a close relationship and methodological similarity between the characterisation process to identify the law’s field and the interpretative process to identify the law’s intention. Inferences [4.190] In the absence of express words, inferences may be drawn from the terms or subject

matter of the legislation to determine whether the legislation intends comprehensively to cover the field. Detailed and comprehensive provisions may one indicator of an intention to cover the field.

O’Sullivan v Noarlunga Meat [4.200] O’Sullivan v Noarlunga Meat Ltd (1954) 92 CLR 565 at 588–593 [Section 52A of the Metropolitan and Export Abattoirs Act 1936 (SA) made it an offence to use “premises for the purpose of slaughtering stock for export” without a licence issued by the Minister. The Commerce (Meat Export) Regulations (Cth), made under the Customs Act 1901 (Cth) prohibited the export of meat unless the slaughter was carried out in premises registered under those Commonwealth regulations. Noarlunga Meat Ltd’s premises were so registered but did not have a State licence. In response to a prosecution for breaching s 52A, the company argued that s 52A was inconsistent with the Commonwealth Regulations and, therefore, by virtue of s 109, “invalid”. A statutory majority (under the Judiciary Act 1903 (Cth), s 23(2)(b)) of the High Court (Dixon CJ, Fullagar and Kitto JJ; McTiernan, Webb and Taylor JJ dissenting) and the Privy Council held that the comprehensiveness of the regulations demonstrated that the Commonwealth law was intended to cover the field or subject matter of premises used for slaughtering stock for export.] Fullagar J: 591 [The Commonwealth regulations] constitute an extremely elaborate and detailed set of requirements which must be complied with before registration can be obtained of premises to be used for the slaughter of stock for export. They relate to site, materials of construction, arrangement, dimensions and many other matters. It is an offence to use premises for the slaughter of meat for export unless the premises are registered. Registration cannot be obtained except upon compliance with all these detailed provisions, and in addition the applicant must be “approved”. But, if all those provisions are complied with, an approved applicant is entitled to a certificate specifying the operations which may be conducted on the premises. In my opinion a State statute which has the effect of prohibiting the use of premises registered under the Commonwealth regulations for the very purpose for which they have been registered under those regulations is plainly inconsistent with those regulations. It is, of course, possible to obey both laws. It is possible to refrain altogether from using premises outside the Metropolitan Abattoirs Area in South Australia for slaughtering stock for export as chilled or [4.200]

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O’Sullivan v Noarlunga Meat cont. frozen meat. It is equally possible to comply with all the detailed requirements of the regulations and obtain registration thereunder, and then, after failing to obtain a licence under s 52A of the South Australian Act, to use the premises for storing apples or not to use the premises at all. But it is now well settled that there may be inconsistency within the meaning of s 109 between two laws, although it is quite possible to obey both. 592 Applying this [“cover the field”] test, it appears to me impossible to deny that the regulations evince 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. The extremely elaborate and detailed character of the regulations seems to me to be itself sufficient to compel this conclusion. Almost every requirement which occurs to one as a relevant requirement is prescribed. But this is not the only feature of the regulations which appears to me to compel the conclusion that there is inconsistency in s 52A …. It is true that the regulations do not in express terms provide that it shall be lawful for any person who has obtained the registration of premises to slaughter stock for export on those premises. But reg 6(2) requires the secretary to issue to an approved applicant a certificate of registration, and that certificate must specify the operations which may be conducted in the establishment to which it refers. According to the certificate held by the defendant company the operations which it may conduct on the premises are, as has been said, the slaughtering and freezing of mutton and/or lamb for export. It 593 is clearly contemplated that, when registration has been obtained, the operations referred to in the certificate may be lawfully conducted on the registered premises. Section 52A of the South Australian Act is a clear denial of any such permission. The case … closely to resemble[s] the case of Colvin v Bradley Bros Pty Ltd ((1943) 68 CLR 151).

[4.210]

1.

2.

Notes&Questions

McTiernan, Webb and Taylor JJ interpreted reg 5 as requiring registration of premises as a condition of the grant of an export permit and not as regulating the slaughter of stock. Consequently, there was no inconsistency between Commonwealth and State laws because the two laws were regulating different matters. The Privy Council on appeal approved the covering the field inconsistency test; and agreed with Fullagar J’s analysis ([1957] AC 1). To what extent does an evaluation of “completeness” or detail of coverage of a law depend on the knowledge of the judge considering it? For example, would not a judge with advocacy experience in industrial advocate see gaps which one not so experience may not see, and hence the latter may be more open to see completeness? “In the end the comprehension of the Commonwealth law is built on the comprehension of the Justice.” (Lane (2nd ed, 1979), p 894.)

ABC v Industrial Court (SA) [4.220] Australian Broadcasting Commission v Industrial Court (SA) (1977) 138 CLR 399 at 415–417 [The Industrial Conciliation and Arbitration Act 1972 (SA) s 15(1)(e) empowered the SA Industrial Court to order that an employee whose dismissal was “harsh, unjust or unreasonable” be re-employed. The Broadcasting and Television Act 1942 (Cth) regulated the Australian Broadcasting Commission’s employment of permanent and temporary employees. The High Court held that s 15(1)(e) was inconsistent with the Commonwealth Act.] Mason J (with whom Barwick CJ and Gibbs J agreed): 415 Division 2 [of the Cth Act] … contains detailed provisions relating to the classification, abolition and reclassification of positions in the service of the Commission (ss 45 and 46) and the transfer, promotion, retirement and dismissal or reduction in status of officers (ss 47, 48, 48A, 51, 52, 54, 55 and 56). Provision is made for a Promotions Appeal Board (ss 49 and 50) and for a Disciplinary Appeal Board (ss 57 and 58). 334

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ABC v Industrial Court (SA) cont. Section 57(1) gives an officer who is dismissed, retired, transferred, reduced in position or salary, or fined an amount exceeding $4 a right of appeal to the Disciplinary Appeal Board. The Disciplinary Appeal Board on hearing an appeal “may confirm, vary or set aside the decision of the Commission” (s 57(3)). The decision of the Board shall be “final and the Commission shall take such action as is necessary to give effect to the decision” (s 57(4)). In their totality these provisions constitute a comprehensive and exclusive code regulating the appointment, termination of appointment, promotion, transfer, retirement and dismissal of officers in the service of the Commission. It is for the Commission to make appointments, to determine the terms and conditions of appointment (with the approval of the Public Service Board), transfer and promote officers, and retire and dismiss officers, subject to awards made by the Conciliation and Arbitration Commission and determinations made by the Public Service Arbitrator and subject also to such decisions as may be made by the Promotions Appeal Board and the Disciplinary Appeal Board on appeals instituted under the Act. More than that, there is in my opinion a conflict between s 15(1)(e) of the South Australian Act, if it should be held to apply to officers of the Commission, and the provisions of the Broadcasting and Television Act 1942, in particular s 57 by virtue of which the decision of the Disciplinary Appeal Board is final and the Commission is directed to take such action as is necessary to give effect to the Board’s decision. In hearing an appeal against retirement and dismissal the Board is necessarily called upon to review the Commission’s decision in respect of the officer and to decide whether it should be confirmed, varied or set aside. The co-existence in the Industrial Court of a jurisdiction to reinstate an officer who has been retired or dismissed by the Commission would be quite inconsistent with the function of the Disciplinary Appeal Board in reviewing a retirement or dismissal of an officer by the Commission and the duty of the Commission to take action to give effect to the decision of the Board. 416 The fact that the Industrial Court does not set aside a dismissal but orders the reinstatement of an employee whereas the Board sets aside the dismissal, does not justify a conclusion that the two functions are complementary and not contradictory. In each case the Board and the Court are required to examine the dismissal – in one case to decide whether it should be confirmed, set aside or varied, in the other to decide whether it is harsh, unjust or unreasonable. And the result in each case, if it is favourable to the employee, is that the employment is to continue. Consequently, if the Commission were subject to a co-existing jurisdiction under s 15(1)(e) it would be exposed to the possibility of complying with conflicting determinations. As Gard was a temporary employee this conclusion does not dispose of the present case. Of the various provisions contained in Div 2 of Pt III, only three are expressed to relate to temporary employees – ss 42, 43(2) and 43(6). The provisions relating to retirement and dismissal and to the Disciplinary Appeal Board (ss 51, 52, 55, 56, 57 and 58), amongst others, have no application to temporary employees. If s 15(1)(e) of the South Australian Act were to apply to the Commission in respect of temporary employees no direct conflict would arise with the provisions of the Broadcasting and Television Act 1942, there being no counterpart to s 57 of that Act that applies to temporary employees. However, although there is no direct conflict, inconsistency may still emerge if it appears that the provisions of Div 2 of Pt III sufficiently manifest an intention to cover the field of appointment and dismissal of temporary employees to the exclusion of any State law on the topic. True it is that the provisions of the Broadcasting and Television Act 1942 relating to temporary employees are very much less detailed and less comprehensive than those which apply to officers in the service of the Commission. None the less, the three provisions dealing with temporary employees which are to be found in Div 2 are of particular significance. The terms of appointment are expressed by s 43(6) to be “such as are determined by the Commission with the approval of the Public Service Board”, a provision which would not stand easily alongside a jurisdiction or authority in any other body to reinstate a temporary employee. And s 42 preserves the operation of awards made by the Conciliation and Arbitration Court and of determinations made by the Public Service Arbitrator, but nothing else. These provisions indicate to my mind that the Commission’s power to appoint and to terminate the services of temporary employees was intended to be exclusive and unqualified except to [4.220]

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ABC v Industrial Court (SA) cont. the extent that the terms of appointment must 417 have the approval of the Public Service Board and that the employment of temporary employees is subject to the operation of the awards and determinations referred to in s 42. The other factor to be taken into account is that the Division … leaves no room for the operation of s 15(1)(e) of the South Australian Act, or indeed of any State law, in relation to the dismissal of officers in the service of the Commission. To me it is inconceivable that the Broadcasting and Television Act 1942, whilst intending to exclude the operation of a State law providing for the reinstatement of dismissed officers, should contemplate the operation of such a law in relation to temporary employees whose services have been terminated. The absence in relation to temporary employees of the detailed provisions which delimit the rights of officers is to be explained by the fact that it is usual to safeguard the rights and privileges of officers in a permanent service analogous to a public service by detailed provisions which qualify the rights of the employer to deal with the employee. It is otherwise with employees who are temporary and who do not form part of the permanent service. The absence of detailed provisions applying to them 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. For these reasons I am of opinion that Div 2 is a comprehensive and exclusive code, that it covers the entire field of appointment and termination of the services of temporary employees of the Commission, that s 15(1)(e) of the South Australian Act, if it be construed so as to empower the Industrial Court to make an order for reinstatement against the Commission, is an inconsistent law and is inoperative.

[4.230]

1.

2.

Notes&Questions

Mason J’s approach of determining Commonwealth legislative intention from the extent of the Commonwealth law’s coverage or degree of detail or specificity in its provisions was followed in Dao v Australian Postal Commission (1987) 162 CLR 317 at 335. In these cases, Commonwealth laws gave employers authority to dismiss employees and State laws (including in Dao the Anti-Discrimination Act 1977 (NSW)), which attempted to impose other conditions or requirements on dismissals, were held to be invalid. How can these cases be reconciled with Wardley? Also, compare the different approaches taken by Stephen J extracted above and Mason J in Wardley, extracted below, to reach the same no inconsistency result.

Ansett Transport Industries v Wardley [4.240] Ansett Transport Industries (Operations) Pty Ltd v Wardley (1980) 142 CLR 237 at 259–265 Mason J: 259 [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. “Direct inconsistency” is a description which has always been applied to cases in which it is impossible to obey both laws (260 Daniell (1920) 28 CLR 23; Blackley (1968) 117 CLR 253 at 258). It is also a description which has been applied to cases in which the Commonwealth law grants a permission or a right and the State law prohibits that which is permitted or prohibits the exercise of the right (Colvin v Bradley Brothers Pty Ltd (1943) 68 CLR 151). Cases of this kind have sometimes been treated as a separate head of inconsistency (O’Sullivan v Noarlunga Meat Ltd (1954) 92 CLR 565 at 592)), though even when so treated they have generally been related to the “cover the field” test (O’Sullivan v Noarlunga Meat Ltd (1956) 95 CLR 177 at 182, 185); Swift Australian Co (Pty) Ltd v Boyd Parkinson (1962) 108 CLR 189 at 336

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Ansett Transport Industries v Wardley cont. 207), apparently on the ground that direct inconsistency is confined to a situation in which simultaneous obedience to both laws is impossible. 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. 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 261 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. … 262 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 pars 1, 2, 3 and 4 is to prescribe the procedure and regulate the means whereby the right to terminate may be effected. … 263 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 264 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. [After discussing the Grievance Procedures, Mason J held that the Grievance Board’s decision concerning dismissal of a pilot after 12 months service would be effective notwithstanding any decision of the Equal Opportunity Board. However, the Grievance Board was required to consider the Equal Opportunity Act 1977 when making its decisions.] 265 It is not enough for a plaintiff who alleges inconsistency to point to the existence under the Commonwealth law of a power or discretion which of its nature may be exercised in conformity with the provisions of State law. To succeed he must go further and demonstrate that as a matter of legislative intention the power or discretion is to be exercised to the exclusion of what State law says upon the topic. Although the issue of dismissal is left in the discretion of the Grievance Board, there is nothing which indicates that the discretion is reposed in the Grievance Board to the exclusion of any provision which the general law may make upon the subject. Accordingly, although the Grievance Procedures may give rise to a situation of direct [4.240]

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Ansett Transport Industries v Wardley cont. inconsistency with the State Act, this inconsistency does not in my opinion have any application to the defendant during the period of Initial Service. Further, as the direct inconsistency is not based on the existence of an intention that the Grievance Board is to exercise its discretion in derogation or in disregard of the general law, there is no foundation for the argument that the inconsistency to which I have referred in some way colours or affects the provisions of cl 6B of the Agreement as they relate to the defendant during her period of Initial Service.

[4.250]

1.

2.

Notes&Questions

Is Mason J’s decision that the Agreement was not intended to give Ansett an unqualified right to dismiss consistent with his opinion regarding temporary employees in the Australian Broadcasting Commission Case? The minority (Barwick CJ and Aickin J) considered that the Airline Pilots Agreement intended to cover the field by comprehensively regulating employers’ and employees’ rights concerning employment and dismissal of pilots. Does this result accord more with decisions in cases such as Dao?

[4.260] As in Dao, the Anti-Discrimination Act 1977 (NSW) was again held to be

inconsistent with a Commonwealth law in Goulden, extracted below. In Viskauskas v Niland (1983) 153 CLR 280, the precursor to Metwally, also extracted below, the High Court held that s 19 of the NSW Anti-Discrimination Act, which prohibited discrimination on the grounds of race in specified circumstances was inconsistent with the Racial Discrimination Act 1975 (Cth) because the latter was held to cover the field with respect to such matters. It is important to note that the subject matter of the Commonwealth Act was a relevant consideration in inferring an intention to cover the field, it being anti-discrimination legislation enacted pursuant to an international convention, the International Convention on the elimination of all Forms of Racial Discrimination, to which Australia was a signatory. It was noted by the Court (Gibbs CJ, Mason, Murphy, Wilson and Brennan JJ, at 292) that a relevant consideration in this regard was the fact that, in purporting to meet international obligations, the Commonwealth Act had to operate without exception in all States of the Commonwealth and it “could not … 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.” In other words, “the subject matter of the … Act suggests that it is intended to be exhaustive and exclusive.” Thus, considerations relating to the nature of the subject matter of the legislation may, in addition to comprehensiveness and detail be taken into account in determining a legislative intention to cover the field. In Goulden too, as seen below, the particular nature of the subject nature of the legislation was relevant. Both cases indicate the subtleties which may be involved in cases of indirect inconsistency and illustrate situations where the Court was able to infer an intention to cover the field in circumstances similar to Wardley. When examining these cases, consider why, unlike the majority in Wardley, the Court inferred a Commonwealth intention to cover the field. How can the facts of Wardley be distinguished to explain the different outcomes?

Australian Mutual Provident Society v Goulden [4.270] Australian Mutual Provident Society v Goulden (1986) 160 CLR 330 at 336–337 [The Anti-Discrimination Act 1977 (NSW) made it unlawful, when providing goods or services, “to discriminate against a physically handicapped person on the grounds of physical impairment … by 338

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Australian Mutual Provident Society v Goulden cont. refusing to provide [them] with those goods or services”. Section 78 of the Life Insurance Act 1945 (Cth) permitted registered life insurance companies to classify risks and fix premiums according to their own judgment based on actuarial advice and prudent insurance practice. Mr Goulden had been blind since birth. He held an AMP Life Insurance policy. He applied for a waiver of premium benefit which provided that if he subsequently suffered total disability from illness, accident or injury, AMP would waive payment of the insurance premiums during that disability period. On account of his blindness, AMP rejected the application. Goulden initiated the complaint procedure under the NSW Act. AMP sought a declaration from the High Court that the relevant provision of the State Act was inconsistent with the Commonwealth Act. The Court granted the declaration.] The Court (Gibbs CJ, Mason, Brennan, Deane and Dawson JJ): 336 [The Life Insurance Act 1945 (Cth) is] 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, … the Act does not attempt to restrict the business judgment 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 judgment founded upon the advice of actuaries and the practice of prudent insurers. … 337 [T]he 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 judgment founded upon the advice of actuaries and the practice of prudent insurers. In the words of Dixon J in Victoria v Commonwealth (1937) 58 CLR 618, at 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 judgment 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.

[4.280]

1.

Notes&Questions

What significance do cases such as Dao, Goulden, Viskauskas, Metwally and Wardley have for the vulnerability of State human rights legislation? For example, do they suggest that only Commonwealth, not State, human rights laws can be effective? Does this require or impose national uniform standards and deny or curtail the opportunity for differing (and higher) State standards? [4.280]

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2.

How is Commonwealth legislative intention ascertained when the law’s provisions are silent (rather than being detailed or comprehensive) about the subject matter or field being considered? In other words, to what extent and in what circumstances does the very nature of the Commonwealth field create the inference of an intention to cover the field?

3.

Cases where an intention to cover the field was held to exist, despite the Commonwealth law’s silence on specific matters, include Australian Broadcasting Commission extracted above and Wenn v Attorney-General (Vic) (1948) 77 CLR 84. However, compare Haylor (1957) 97 CLR 177. In Wenn’s Case, the Re-establishment and Employment Act 1945 (Cth) dealt with employers’ obligations to give preference to ex-service personnel in employment but did not include a provision requiring employers to give preference in promotion to ex-service personnel who they already employed. It included an express covering the field provision (quoted at [4.290]). The Victorian Act dealt with the same subject matter and included a provision requiring employers to give ex-service personnel preference in promotion. The High Court held that the Victorian provision giving preference in promotion was inoperative, even though not specifically dealt with by the Commonwealth Act, because the latter Act was intended to be an exhaustive code leaving no scope for the operation of the Victorian Act in relation to matters (including promotion) which were not expressly included in the Commonwealth Act. Would the High Court have reached the same conclusion in the absence of the express covering the field provision? In Ex parte McLean (1930) 43 CLR 472 at 483 Dixon J indicated that “[i]f 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.” For an example, see McWaters v Day (1989) 168 CLR 289 at 299.

4.

Also, if Commonwealth legislation appears to presume the existence of State law then this is evidence that the Commonwealth does not intend to cover the field. An example is provided by Wardley where Stephen J considered that the Victorian Equal Opportunity Act 1977 was part of the general law against which the Airline Pilots Agreement 1978 was to operate. This was partly because the agreement made express allusion to State law (at 247–248). Another example is provided by the majority’s view of the relationship between the Defence Housing Authority Act 1987 (Cth) and the Residential Tenancies Act 1987 (NSW) in Re Residential Tenancies Tribunal of NSW; Ex parte Defence Housing Authority (1997) 190 CLR 410 at 432–434 per Dawson, Toohey and Gaudron JJ. They concluded that the Commonwealth Act was “dependent for its practical operation upon the State law”. While Brennan CJ was “in general agreement” with their Honours (at 424), Kirby J concluded that the Commonwealth Act intended to cover the field (at 497–499). When inferences about legislative intent can flow from the subject matter of the Commonwealth law, as in Viskauskas above-mentioned, the central question remains whether the subject matter is such that it can be inferred that the Commonwealth Parliament in enacting the legislation intended to impose uniform, comprehensive and exclusive control or regulation? Which of the subject matter in s 51 might be more susceptible to such an inference. Some justices have suggested that Commonwealth control is intended when laws deal with conciliation and arbitration (Forsyth’s Case at 148 per Evatt J); life insurance (Goulden’s Case); racial discrimination (Viskauskas v Niland); collisions at sea (Hume v Palmer); preferential employment for ex-defence force personnel (Wenn’s Case); Commonwealth property protection (Loewenthal Case); and, implementation of treaties (Viskauskas v Niland).

5.

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6.

The High Court of course examines the precise terms of the legislation, in addition to subject matter per se, to apprehend legislative intent. Dixon J in the Kakariki Case stated (at 628): “There is nothing in the language of s 329 [of the Navigation Act 1912 (Cth)] and certainly nothing in its nature or subject matter suggesting that … the Commonwealth authority should have exclusive power.” Similarly, the High Court in Viskauskas v Niland stated (at 292): “It appears from both the terms and the subject matter of the Commonwealth [Racial Discrimination] Act that it is intended as a complete statement of the law for Australia relating to racial discrimination.”

7.

Of course, the High Court’s view of Parliament’s intention and Parliament’s actual intention may not always coincide. A most prominent example arises from the Viskauskas case: Although the High Court [in Viskauskas] declared authoritatively what the Commonwealth’s intention was in the esoteric, legal sense, this hypothetical, composite intention had the misfortune of not coinciding with the Commonwealth’s actual intention, at least so far as that intention resided in the expressed policy of the Hawke Labor government in 1983, if not in that of the Whitlam government which initiated the legislation in 1975 … Consequently, the Hawke government introduced legislation to overcome the result of Viskauskas and to indicate conclusively that its intention was not to cover the field. (M Coper, Encounters with the Australian Constitution (CCH Australia, 1987), p 22.)

That legislation was considered by the High Court in Metwally’s Case extracted at [4.350]. While Metwally considered the effect of an express statement of Commonwealth legislative intention not to cover the field, and indeed to clear the field, first it is important to consider the precise constitutional consequence of legislation which contains an express intention to cover, or not to cover, the field. Express intention clauses [4.290] As indicated in Dixon J’s still influential statement, the critical determinant as to

whether there is an indirect inconsistency is the existence of an intention that the Commonwealth law shall “completely, exhaustively, or exclusively” state the law in the field covered by or on the subject matter regulated by that law: (Ex parte McLean (1930) 43 CLR 472 at 483). The difficult task of drawing inference in this regard is considerably ameliorated if there is a provision in the Commonwealth act expressly stating that the Commonwealth Law is intended, or not intended, to cover the field. These may be worded differently and it is not always immediately apparent that such an express statement of intention is being made. Examples of Commonwealth provisions expressly indicating an intention to cover the field are: Re-establishment and Employment Act 1945 (Cth), s 24(2) (considered in Wenn’s Case): “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, or of any industrial award, order, determination or agreement made or filed under or in pursuance of any such law, and whether the law, award, order, determination or agreement was enacted, made or filed before or after the commencement of this section.”; Federal Airports Corporation Regulations (Cth), r 9(2) (considered in Botany Municipal Council v Federal Airports Corporation (1992) 175 CLR 453): “A licensee is authorised to carry out the part of the works … referred to in the licence in spite of a law, or a provision of a law, of the State of New South Wales.”; Native Title Act 1993 (Cth), s 11(1): Native title is not able to be extinguished contrary to this Act. [4.290]

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Examples of Commonwealth provisions expressly indicating an intention not to cover the field: Crimes Act 1914 (Cth), s 11 (considered in Loewenthal’s Case (1974) 131 CLR 338 at 347): (1) Where the act or omission of a person is an offence against a law of the Commonwealth and is also an offence against another law of the Commonwealth or some other law, the person may be prosecuted and convicted under either of those laws. (2) Nothing in this Act shall render any person liable to be punished twice in respect of the same offence.

Trade Practices Act 1974 (Cth), s 75 (considered in the GMAC Case (1977) 137 CLR 545): “(1) Except as provided by subs (2), this Part is not intended to exclude or limit the concurrent operation of any law of a State or Territory. … (3) Except as expressly provided by this Part, nothing in this Part shall be taken to limit, restrict or otherwise affect any right or remedy a person would have had if this Part had not been enacted.”; Insurance Act 1973 (Cth), s 100 (considered in the Palmdale Case (1977) 140 CLR 236): “[I]t is the intention of the [Commonwealth] Parliament that no provision of this Act shall apply to the exclusion of a law of a State or Territory insofar as it has the effect of … requiring a specified contract of insurance … to be made with … a person included in a specified class of persons.”; Racial Discrimination Act 1975 (Cth), s 6A(1) considered in Metwally’s Case below: “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 [International Convention on the Elimination of All Forms of Racial Discrimination] and is capable of operating concurrently with this Act”; Native Title Act 1993 (Cth), s 8: “This Act is not intended to affect the operation of any law of a State or Territory that is capable of operating concurrently with this Act.”; Crimes Act 1914 (Cth), s 50GA: “This Part [IIIA – Child Sex Tourism – of the Crimes Act] is not intended to exclude or limit the operation of any other law of the Commonwealth or of any law of a State or Territory.” Express covering of the field [4.300] In the Kakariki Case, Evatt J argued (at 638) that a Commonwealth legislative

provision which expressly excluded State laws from operating could render the Commonwealth law unconstitutional because the Commonwealth Parliament’s legislative powers did not contain “power to define or limit the legislative or executive powers of a State”. Also, in West v Commissioner of Taxation (1937) 56 CLR 657 at 707, Evatt J stated: [A]ttempts by the Commonwealth Parliament to manufacture “inconsistency” between its own legislation and that of the States will often be essayed only at the price of making the Commonwealth legislation ultra vires … [T]he Commonwealth’s legislative power over [the Commonwealth] electoral system was deemed sufficient [in Daniell] to enable [Commonwealth legislation] to prevent the awkwardness and confusion which might well result from a simultaneous Commonwealth and State election. In fact, the State was not impeded in its constitutional functions, for 364 other days in the year were left [by the Commonwealth] for [the State] to choose from. On the other hand, a Commonwealth electoral law which forbad the holding of State elections for six months prior to a Commonwealth election would obviously be invalid.

Dixon J in Wenn’s Case (at 120) conceded that Evatt J’s argument was “powerful”: To legislate upon a subject exhaustively to the intent that the areas of liberty designedly left should not be closed up is … an exercise of legislative authority different in kind from a bare attempt to exclude State concurrent power from a subject the Federal legislature has not effectively dealt with by regulation, control or otherwise. It is still more widely different from an attempt to limit the exercise of State legislative power so that the Commonwealth should not 342

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be consequently affected in the ends it is pursuing. This is not a case which … falls within the description of [Commonwealth] legislation so powerfully attacked by Evatt J in West v Commissioner of Taxation.

Are Commonwealth clauses which (prospectively or retrospectively) manufacture inconsistency still constitutionally vulnerable? In the Native Title Case (at 467–468), Mason CJ, Brennan, Deane, Toohey, Gaudron and McHugh JJ stated: 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. 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. Unless the Commonwealth law were expressed in terms which precluded that construction, the form of expression does not take the law outside Commonwealth power.

Native Title Case [4.310] Western Australia v Commonwealth (Native Title Case) (1995) 183 CLR 373 at 464–468 Mason CJ, Brennan, Deane, Toohey, Gaudron and McHugh JJ: 464 The first ground of attack on these provisions is that they purport to control the exercise by the State of its legislative power or purport directly to render State laws invalid. Section 107 of the Constitution confers on or confirms to the Parliaments of the respective States the powers vested in those Parliaments as at the establishment of the Commonwealth except to the extent that any power is “exclusively vested in the Parliament of the Commonwealth or withdrawn from the Parliament of the State”. 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 (see Mabo [No 1] (1986) 166 CLR 186 at 196–7, 203, 216, 243), 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 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, by reason of inconsistency with a law of the Commonwealth, a State law is to the extent of the inconsistency “invalid” – that is “suspended, inoperative and ineffective” (Butler v Attorney-General (Vic) (1961) 106 CLR 268 at 286 per Windeyer J) – the effect on the State law is not produced directly by operation of the Commonwealth law but by s 109 of the Constitution, the operation of which is 465 attracted by the inconsistency (Wenn v Attorney-General (Vic) (1948) 77 CLR 84 at 120; R v Members of Railways Appeals Board and Commissioner for Railways (NSW); Ex parte Davis (1957) 96 CLR 429 at 439; R v Credit Tribunal; Ex parte General Motors Acceptance Corporation, Australia (1977) 137 CLR 545 at 563; University of Wollongong v Metwally (1984) 158 CLR 447 at 455, 460, 469, 473–474, 476, 478–479). It was an inevitable consequence of the constitutional distribution of specific legislative powers to the Commonwealth and residual legislative powers to the States that there would be cases of inconsistency between the legislative provisions governing the same act, matter or thing. Section 109 of the Constitution prescribes which law should prevail and which should be “invalid”. But the effect of s 109 on a State law that is inconsistent with a law of the Commonwealth is not to impose an absolute invalidity. On the contrary, the State law remains valid though it is rendered inoperative to the extent of the inconsistency, but only for so long as the inconsistency remains (Carter [4.310]

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Native Title Case cont. v Egg and Egg Pulp Marketing Board (Vic) (1942) 66 CLR 557 at 573, 599; Butler v Attorney-General (Vic) (1961) 106 CLR 268 at 274, 278, 282–283, 286; University of Wollongong v Metwally (1984) 158 CLR 447 at 456, 461–2, 473–474, 477, 484–485). The extent of the inconsistency depends on the text and operation of the respective laws. Neither the operation of s 109 nor the existence of a State law inconsistent with a proposed law of the Commonwealth affects the extent of a legislative power of the Commonwealth. Given power to make laws with respect to prescribed subjects, the Commonwealth may, if it chooses, make a law with respect to a prescribed subject that is exclusive and exhaustive. Then, if any State law has been or is enacted to apply to that subject, an inconsistency arises and the State law becomes inoperative so long as both laws are on the statute books. In Wenn v Attorney-General (Vic) ((1948) 77 CLR 84 at 108–109), Latham CJ said: If the Commonwealth Parliament, in a law with respect to a subject within its legislative powers, enacts provisions which show that the Parliament intended to make an adjustment with respect to certain matters upon a particular basis to the exclusion of any other adjustment, then the result is to exclude the application of any State legislation or other provision which would “disturb or vary the Federal adjustment”: see Clyde Engineering Co Ltd v Cowburn ((1926) 37 CLR 466 at 491). Where such an intention is manifested, then the Federal provision is the only provision to be applied “both as to what is granted and what is refused” (Clyde Engineering (1926) 37 CLR 466 at 491). Accordingly, his Honour upheld the validity of a Commonwealth law 466 which “expressly states an intention to make the Federal legislation exclusive and exhaustive” (Wenn v Attorney-General (Vic) (1948) 77 CLR 84 at 109). 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 … 467 … 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. The critical question is the scope of Commonwealth legislative power. Provided the power supports a Commonwealth law making its regime exclusive and exhaustive, the law may validly exclude in terms the application of State law to the subject matter. …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 468 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 548–549; Metal Trades Industry Association of Australia v Amalgamated Metal Workers’ and Shipwrights’ Union (1983) 152 CLR 632 at 641–643, 648–649). 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. Unless the Commonwealth law were expressed in terms which precluded that construction, the form of expression does not take the law outside Commonwealth power. In the light of these general principles, we may turn to examine the provisions which, the State submits, impermissibly attempt to control State legislative powers and impermissibly seek directly to 344

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Native Title Case cont. impose invalidity on State legislation. It will be recalled that the key provision of the Native Title Act 1993 is s 11(1): “Native title is not able to be extinguished contrary to this Act.” If this provision is within Commonwealth power, any future State law which purports to extinguish native title contrary to the Act is inoperative by reason of s 109 of the Constitution. That is not to say that the legislative power of a State Parliament to enact a law extinguishing or authorising the extinguishment of native title is affected by the Native Title Act 1993. A State law purporting to have that effect is wholly valid as a law of the State and it would operate according to its tenor but for any inconsistency with the Native Title Act 1993, the Racial Discrimination Act 1975 or other law of the Commonwealth. If s 11(1) of the Native Title Act 1993 is valid, however, the only areas of operation available for a State law are the areas left available to State law by the Native Title Act. Provided it is within the legislative power of the Commonwealth to exclude completely the operation of State law extinguishing native title, it is within Commonwealth power to exclude partially or on terms the operation of a State law which has that effect. The provisions which validate or which authorise the validation of legislative and executive acts that affect native title (notably ss 11(2), 19 and 23) define the area within which State and Territory laws have a field of operation with respect to native title. Those provisions are exceptions to the general sterilisation of extinguishing acts declared by s 11(1). The critical question is not whether the impugned provisions other than s 11(1) are beyond the legislative power of the Commonwealth, but whether s 11(1) is within Commonwealth power. As we have seen, a law of the Commonwealth protecting native title from extinguishment is a law which is supported by s 51(xxvi) of the Constitution (and possibly by s 51(xxix)). Therefore s 11(1) is valid ….

Botany Municipal Council v Federal Airports Corp [4.320] Botany Municipal Council v Federal Airports Corporation (1992) 175 CLR 453 at 464–465 [Two Sydney Councils argued that before dredging of Botany Bay could occur an environmental impact statement was required by the Environmental Planning and Assessment Act 1979 (NSW). The Commonwealth Government proclaimed reg 9(2) of the Federal Airports Corporation Regulations which authorised dredging “in spite of a law, or a provision of a law, of the State of New South Wales.” The High Court held that reg 9(2) was valid.] Mason CJ, Brennan, Deane, Dawson, Toohey, Gaudron and McHugh JJ: 464 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 authorised 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 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 465 Parliament (Wenn v Attorney-General (Vic) (1948) 77 CLR 84 at 120, per Dixon J). Nor is it a case in which the Commonwealth law invalidly seeks to displace or expand the operation of s 109. …

[4.330]

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Notes&Questions

In view of the Native Title and Federal Airports cases what, if any, constitutional attacks on express covering the field clauses might succeed? [4.330]

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2.

Why did the High Court indicate that two types of Commonwealth laws were not involved in the Federal Airports Case? First, a “Commonwealth law … aimed at preventing or controlling State legislative action rather than dealing with a subject matter assigned to the Commonwealth Parliament.” Secondly, a “Commonwealth law invalidly seek[ing] to displace or expand the operation of s 109”? Did the Native Title approve of Dixon J’s suggestion, in Wenn that “[f]ederal 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”? Given the sweeping provisions in the Native Title and Federal Airports cases, do or could such Commonwealth laws exist? What response is likely in view of the interpretation of the Trade Practices Act 1974 (Cth), s 75 (a denial of covering the field provision) by Mason J in the GMAC Case? Mason J stated (at 564):

3.

[T]he terms of s 75(1) are open to the objection that they refer to the concurrent operation of State laws; they do not speak of the extent of the intended operation of the Commonwealth law. Nonetheless, there is to be gathered from [s 75(1)] a very clear expression of intention that the Trade Practices Act is not an exhaustive enactment on the topics with which it deals and that it is not intended to operate to the exclusion of State laws on those topics. As such [s 75(1)] does not avoid any instance of direct inconsistency which may occur between the Trade Practices Act and the two South Australian Acts but … [s 75(1)] eliminates any suggestion of inconsistency otherwise arising.

4.

Do these cases encourage the Commonwealth Parliament to use explicit and expansive covering the field clauses? Recall the view advanced in the Federal Airports Case (at 465): “Indeed, unless the [Commonwealth] law expresses itself directly in that way, there is the possibility that it may not be understood as manifesting an intention to occupy the field to the exclusion of State law.” But contrast Gibbs CJ in Metwally’s Case (1984) 158 CLR 447 at 455: “The Commonwealth Parliament cannot enact a law which would affect the operation of s 109 either by declaring that a State law, although not inconsistent with any Commonwealth law, shall be invalid or that a State law which is inconsistent with a Commonwealth law shall be valid.” Can a multiple characterisation ensure the constitutional validity of Commonwealth provisions expressly covering or declining to cover the field in the context of s 109?

5.

Expressly declining to cover the field [4.340] Commonwealth legislative provisions expressly and prospectively indicating that the

Commonwealth law is not intended to cover the field – so that State laws can operate – are generally valid and effective. For example, the Native Title (at 466) indicated: “it is … within the legislative power of the Commonwealth [Parliament] to prescribe that an area be left for regulation by State law.” More elaborately, Gibbs CJ stated in the Metwally case (at 456): [I]f a Commonwealth statute which on its proper construction, had revealed an intention to cover exclusively and exhaustively the subject-matter with which it dealt, so that in consequence a State statute dealing with the same subject-matter was rendered inoperative, were subsequently amended in such a way as to manifest an intention that it was not intended to exclude the operation of the State law, the operation of the State statute would thereupon revive.

Even if Commonwealth legislation is detailed and comprehensive, so that coverage of the field would normally be inferred, a clause expressly declining to cover the field would, as occurred in Palmdale (1977) 140 CLR 236, facilitate a decision that exclusivity or exhaustiveness was not intended and, therefore, no covering the field inconsistency exists. That this may not always be so was postulated by Gibbs CJ in Metwally (at 456): “It is perhaps possible to 346

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imagine a case in which a Commonwealth Act did in truth fully cover the whole field with which it dealt, notwithstanding that it was not intended to do so.” Another issue which arises with respect to provisions expressly stating an intention not to cover the field is the extent to which they may be effective in removing a direct inconsistency. Negative answers have been provided, for example, by Gibbs CJ in Metwally’s Case (at 455–456) and Mason J in the GMAC Case (at 563–564). The issue considered in Metwally’s Case is whether a provision expressly declining to cover the field can operate retrospectively.

University of Wollongong v Metwally [4.350] University of Wollongong v Metwally (1984) 158 CLR 447 at 455–458, 460–463, 469, 476–481 [In 1982, Metwally had made a successful complaint of racial discrimination against the University to the Tribunal set up under the Anti-Discrimination Act 1977 (NSW). The complaint covered the period May 1978 to March 1981. The University appealed to the NSW Supreme Court. On 18 May 1983, the High Court in Viskauskas v Niland (1983) 153 CLR 280 held that the Racial Discrimination Act 1975 (Cth) covered the field and that the Anti-Discrimination Act 1977 (NSW) was inconsistent with it. On 19 June 1983 an amendment, inserting s 6A into the Commonwealth Act, became operative. It provided: 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 [International Convention on the Elimination of All Forms of Racial Discrimination] and is capable of operating concurrently with this Act. The appeal in the Supreme Court was removed to the High Court where the University argued that this amendment was invalid in so far as it purported to have retrospective effect. If this argument succeeded, Metwally’s successful Tribunal application could not stand, it being brought prior to the Amendment and when the High Court in Viskauskas had declared the NSW Act under which the application had been made, was inconsistent to the Commonwealth Act and thus inoperative. A majority (Gibbs CJ, Murphy, Brennan and Deane JJ; Mason, Wilson and Dawson JJ dissenting) held that the Commonwealth Parliament could not retrospectively revive State law previously rendered inoperative by s 109 and, therefore, the New South Wales Act remained invalid. However, for Murphy, Deane and, probably, Brennan JJ the Commonwealth Parliament could retrospectively take the Commonwealth law out of the field and, consequently, State legislation could retrospectively revive the inoperative law or re-enter the field.] Gibbs CJ: 455 When a law of a State is inconsistent with a law of the Commonwealth and becomes, to the extent of the inconsistency, invalid, the invalidity is brought about by s 109 of the Constitution and not directly by the law of the Commonwealth. The Commonwealth Parliament cannot enact a law which would affect the operation of s 109, either by declaring that a State law, although not inconsistent with any Commonwealth law, shall be invalid, or that a State law which is inconsistent with a Commonwealth law shall be valid. If there were a direct conflict between a Commonwealth law and a State law as, for example, where one law forbids what the other 456 commands, or one takes away a right which the other confers, an assertion in the Commonwealth law that it was not intended to be inconsistent with the State law would be meaningless and ineffective. However, when there is no direct inconsistency between the two laws, the question is whether the State law is inconsistent with the Commonwealth law because the latter intends to cover the subject-matter with which the State law deals, and an indication in the Commonwealth law of the intention of the Parliament in that regard would be material and in most cases decisive: It is perhaps possible to imagine a case in which a Commonwealth Act did in truth fully cover the whole field with which it dealt, notwithstanding that it said that it was not intended to do so, but such a case may be left for consideration until it arises. It is said in Butler v Attorney-General (Vic) ((1961) 106 CLR 268) that “invalid” in s 109 of the Constitution means, not void, but “inoperative”, so that if a State law, which was inconsistent with a law of the Commonwealth, was not repealed by the State legislature and remained on the statute [4.350]

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University of Wollongong v Metwally cont. book, the expiration or repeal of the Commonwealth law would have the result that the State law would come into force; in those circumstances the State law would have remained in abeyance during the time when the inconsistency existed and, when the inconsistency no longer existed, would cease to be inoperative ((1961) 106 CLR 268 at 274, 278, 282–283, 286). It follows that if a Commonwealth statute which, on its proper construction, had revealed an intention to cover exclusively and exhaustively the subject-matter with which it dealt, so that in consequence a State statute dealing with the same subject-matter was rendered inoperative, were subsequently amended in such a way as to manifest an intention that it was not intended to exclude the operation of the State law, the operation of the State statute would thereupon revive. There is therefore no reason to doubt (assuming the correctness of the assumptions to which I have referred) that after 19 June 1983, when the Amendment Act came into force, the Anti-Discrimination Act 1975 again became operative in New South Wales. 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 457 exclude the operation of the State law, and thereby cause the Anti-Discrimination Act 1975 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, at a particular time, a State law was inconsistent with a law of the Commonwealth, s 109, applied at that time, would have resulted in the invalidity of the State law. If, on the other hand, the State law was not inconsistent with that law of the Commonwealth, s 109 would not render it invalid. 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. In other words, the Commonwealth law itself could vary the effect which s 109 had produced at the relevant time; it could give to a State law a valid operation as at a time when s 109 had rendered it invalid. But Commonwealth statutes cannot prevail over the Constitution. The deeming provisions in sub-ss (1) and (2) of s 6A do not state the effect which the Anti-Discrimination Act 1975 in truth had before the Amendment Act was passed; what they do is to create a “statutory fiction” … Before the Amendment Act came into effect, the Commonwealth Act, on its proper construction, was intended to be a complete and exclusive statement of the law of Australia with regard to racial discrimination, and Pt II of the Anti-Discrimination Act 1975 was inconsistent with that law and therefore invalid by force of s 109. What the Amendment Act in effect provides is that the Commonwealth Act should now be understood as though it did not have that intention and that Pt II of the Anti-Discrimination Act 1975 was therefore not inconsistent with it. In other words, the Parliament has attempted to exclude the operation of s 109 by means of a fiction. 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 was in truth an inconsistency shall be deemed to have not existed. Section 109 deals with “a matter of prime importance” in the constitutional framework (see 458 Butler v Attorney-General (Vic) (1961) 106 CLR 268 at 282), namely the effect of an inconsistency between the enactments of two legislatures both of which operate in the same territory. Its provisions are not only critical in adjusting the relations between the legislatures of the Commonwealth and the States, but of great importance for the ordinary citizen, who is entitled to know which of two inconsistent laws he is required to observe. … If there is an inconsistency between a law of a State and a law of the Commonwealth there is no other rule than that laid down by s 109 by which the inconsistency may be resolved. In the present case, since an inconsistency in fact existed, the provisions of s 109 were called into play and their effect cannot later be excluded by retrospectively declaring that the truth was other than it was. For these reasons I hold that Pt II of the Anti-Discrimination Act 1975 [(NSW)] was inoperative at the time when the alleged discrimination against Mr Metwally occurred. 348

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University of Wollongong v Metwally cont. Mason J (dissenting): 460 What the University denies is that s 6A is valid and effective to bring about a retrospective concurrent operation. The source of this suggested invalidity is s 109 of the Constitution. Although the object of this section is to secure the paramountcy of Commonwealth laws over inconsistent State laws, the effect of the section, like that of other provisions of the Constitution, is to inhibit the Commonwealth Parliament from enacting contradictory legislation. The Parliament could not, for example, 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 119–120; R v Railways Appeals Board (NSW); Ex parte Davis (1957) 96 CLR 429 at 439; R v Credit Tribunal; Ex parte General Motors Acceptance Corporation (1977) 137 CLR 545 at 563. 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 461 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. … 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 mis-states 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. It is, of course, well settled that when the section 462 renders a State law “invalid” the State law is inoperative. The State law is not repealed by the Commonwealth law; nor is it void ab initio: Carter v Egg and Egg Pulp Marketing Board (Vic) (1942) 66 CLR 557 at 573, 599. This is made clear by Butler v Attorney-General (Vic) (1961) 106 CLR 268. … The consequence is that if the federal Act is repealed with retrospective effect then the basis of invalidity of the State law is eliminated. The foregoing discussion supports the fundamental proposition which I have already stated: that the object of s 109, no more and no less, is to establish the supremacy of Commonwealth law where 463 there is a conflict between a Commonwealth law and a State law. Where no such conflict arises or such a conflict is removed by subsequent retrospective Commonwealth legislation s 109 has no role to play – there is no problem which requires to be solved by an insistence on the supremacy of Commonwealth law. 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 [4.350]

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University of Wollongong v Metwally cont. 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. Murphy J: 469 Neither federal nor State Parliament can render valid what s 109 has made invalid. But of course, either can legislate to remove an inconsistency so that s 109 will not continue to apply. Also, although the federal Parliament itself cannot undo the previous invalidating effect of s 109, it can clear the way for the State Parliament to make a fresh State Act to apply retrospectively in the same terms. Thus both Parliaments can 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. [Murphy and Brennan JJ substantially agreed with Gibbs CJ and Deane J.] Deane J: 476 The proposition for which Mr Metwally, with the support of the respondent Attorneys-General for the Commonwealth and New South Wales and the intervening AttorneysGeneral for South Australia and Western Australia, contends is a timely one in that it is readily adaptable to Orwellian notions of doublethink. It is that, under s 109 of the Constitution, the Commonwealth Parliament can, by retrospective legislation, produce the consequences in any field in which it possesses legislative power that a State law which was invalid at a particular time was valid at that time or that a State law which was valid at a particular time was invalid at that time and that an act which was not unlawful under State law at the time when it was done was unlawful, or even criminal, under that law at that time or that an act which was unlawful, or even criminal, under State law at the time when it was done was not unlawful under that law at that time. In the course of argument on behalf of the respondents, the submission was made that s 109 of the Constitution was designed to ensure supremacy of valid Commonwealth laws and that it would be anomalous if such a provision were to be interpreted in a way which would detract from the parliamentary sovereignty of the Commonwealth. Even if that were the sole function served by s 109, that assertion would have little force since, on any approach, s 109 enhances the supremacy of Commonwealth laws by directly invalidating State laws to the extent of any inconsistency. More important, the submission fails adequately to acknowledge that the Australian federation was and is a union of people and that, 477 whatever may be their immediate operation, 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 … 478 There are, in my view, two fallacies in [the argument of the respondent and the intervening States]. The first is that it misconceives the nature of the retrospective operation of a statute. The second is that it either fails to take proper account of the temporal operation of the provisions of s 109 of the Constitution or wrongly assumes that the Commonwealth Parliament possesses legislative competence retrospectively to reverse the operation of the constitutional provision by the importation of a fiction. 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. If the fact was that its Emperor wore no clothes, it is powerless either to reverse that fact outside the fields in which it is master or objectively to convert into falsehood the truth which a small child saw. That position is, of course, a fortiori in the case of a parliament whose powers are limited even within the territorial area for which they exist. 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 350

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University of Wollongong v Metwally cont. 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 self-executing. If there is inconsistency between an otherwise valid law 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: see Federated Saw Mill & Employees of Australasia v James Moore & Sons Pty Ltd (1909) 8 CLR 465 at 536; Wenn v Attorney-General (Vic) (1948) 77 CLR 84 at 120. It is the Constitution and not the Commonwealth Parliament which tells the citizen faced with the dilemma of inconsistent 479 Commonwealth and State laws which both, according to their terms, apply to him or her that the State law is invalid and can be disregarded. If, at some subsequent time, the Commonwealth repeals or amends its law to remove the inconsistency, the State law will then become again valid or operative not from some prior date but from the time when there was, in fact, no longer inconsistency. The fact that the Commonwealth Parliament legislates retrospectively to introduce the fiction that, for the purposes of its law, its inconsistent law never existed or had a different operation to that which it in fact had cannot alter the objective fact that at the previous time when s 109 operated that inconsistency did exist. Nor can it alter the fact that the immediate and self-executing provisions of s 109 have already operated upon that inconsistency to invalidate the State law not for the period in which the Commonwealth Parliament, by the introduction of a fiction for its purposes, has subsequently said that its law had a different operation to that which it in fact had but for the period in which the fact of that inconsistency existed. So to say is not to construe s 109 of the Constitution as imposing a restriction on Commonwealth legislative power. It is simply to recognize that while the Commonwealth can retrospectively legislate for itself it cannot retrospectively impose as State law the provisions of a law which the Constitution has said was invalid because of contemporaneous inconsistency which has subsequently been removed. That is something which, if it is to be done, must be done retrospectively by the relevant State. It follows that the 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 NSW 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 NSW 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 NSW Act … 480 The second matter is that it should be clear that the foregoing does not involve a denial of the competence of the Parliaments of the Commonwealth and of a State, in combination, to legislate retrospectively for the purpose of remedying any unintended operation of the provisions of s 109 of the Constitution. To the contrary, the above comments about the operation of s 109 of the Constitution and the nature of statutory retrospectivity tend to support the conclusion that the Parliaments of the Commonwealth and a State can effectively combine to achieve that purpose. If, for example, the New South Wales Parliament were now to pass legislation to the effect of the relevant provisions of the NSW Act and to provide that those provisions would have retrospective operation, the question whether that new law was valid or operative would fall to be determined by reference to the time when it was in fact on the statute book as distinct from the time in which, under its provisions, it was, for the purposes of the law of the State, deemed to have been operative. That being so, the provisions of s 109 would operate to render such a subsequent State law invalid only if, and to the extent that, there was some present inconsistency with subsisting Commonwealth law. Such a situation would be quite different in nature to that for which the respondents have contended in the present case in that it would be the Parliament of New South Wales which would have legislated to give retrospective operation to provisions of its own law and in that, while the citizen would have been subjected to the operation of retrospective legislation, the provisions of s 109 would nonetheless have operated to ensure that there was, in fact, no time at [4.350]

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University of Wollongong v Metwally cont. which he was accountable to both a law of the Commonwealth and an inconsistent law of a State. Nor does anything in the foregoing necessarily involve any denial of the competence of the Commonwealth Parliament to preclude enforcement of a State law in relation to past contraventions if the present enforcement of that State law would be contemporaneously inconsistent with the provisions of that Commonwealth law. These questions have not however been fully investigated in argument in 481 the present case and I refrain from forming or expressing any concluded view upon them.

Notes&Questions

[4.360]

1.

2.

3.

Metwally is a many-faceted case. The majority and minority opinions, as well as scholarly commentary, should be carefully absorbed not only for s 109 issues but for the larger (often unarticulated) themes and premises of constitutionalism. See Booker, Glass and Watt (2nd ed, 1998), at para 10.18; H P Lee, “Retrospective Amendment of Federal Laws and the Inconsistency Doctrine in Australia” (1985) 15 Federal Law Review 335. Is the difference between Deane J and Mason J simply over the statutory interpretation or effect of s 6A of the Racial Discrimination Act 1975 (Cth) or does it represent different views of the Commonwealth Parliament’s constitutional power? Assume Commonwealth legislation “attempt[ed] to give a valid operation to a State statute which was rendered inoperative by s 109” or – in Deane J’s phraseology – attempted “retrospectively [to] impose as State law the provisions of a [State] law which the Constitution has said was invalid because of contemporaneous inconsistency”. Would that legislation fall within Mason J’s restriction that “[t]he [Commonwealth] Parliament could not … provide that a State law which was inconsistent with a Commonwealth law should have, or have had, full force and effect, notwithstanding that inconsistency”? If so, is there a disagreement over constitutional law between Deane J and Mason J? However, is Deane J suggesting that inevitably (and unavoidably) Commonwealth retrospective legislation (like s 6A) will “attempt to give a valid operation to a State statute” and, therefore, contravene s 109? Is Mason J’s position strengthened by the joint judgment (Mason CJ, Brennan, Deane, Toohey, Gaudron and McHugh JJ) in the Native Title Case (1995) 183 CLR 373 at 467–468 (extracted above)? See also the High Court’s remarks in Botany Municipal Council v Federal Airports Corp (1992) 175 CLR 453 at 464–465 (extracted above). What is the significance of the statement in the Native Title Case (1995) 183 CLR 373 at 451? The majority there indicated: If native title was protected [after the Racial Discrimination Act 1975 (Cth) came into operation] by the Racial Discrimination Act, only a law of the Commonwealth could be effective to modify the operation of the Racial Discrimination Act and then only for the future: the effect of s 109 of the Constitution cannot be retrospectively undone. (University of Wollongong v Metwally (1984) 158 CLR 447).

4.

352

What was “the operation of the Racial Discrimination Act”? What was “the effect of s 109”? How does this relate to the different views of the Metwally majority (Murphy, Brennan and Deane JJ compared with Gibbs CJ)? In the Native Title do Mason CJ (who dissented in Metwally) and Toohey, Gaudron and McHugh JJ endorse Metwally? Note the suggestion by Deane J that the “retrospective impos[ition] as State law [of] provisions of a [State] law which the Constitution has said was invalid because of contemporaneous inconsistency which has subsequently been removed [by the [4.360]

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Commonwealth Parliament] … is something which, if it is to be done, must be done retrospectively by the relevant State [Parliament].” Similarly, Murphy J considered that, despite the inability of retrospective Commonwealth legislation to revive inoperative State law, retrospective Commonwealth law could “clear the way for the State Parliament to make a fresh State Act to apply retrospectively in the same terms” (Metwally at 469). Therefore, Deane J and Murphy J are requiring retrospective Commonwealth and State legislation to accomplish the same result which, for Mason J, s 6A and s 109 achieved (namely, the retrospective revival of inoperative State law). Of course, from a pragmatic perspective, it may be more difficult to obtain retrospective legislation from two Parliaments, rather than only the Commonwealth Parliament. 5.

Can Commonwealth legislation retrospectively revive or validate State laws previously rendered inoperative because of direct inconsistency with Commonwealth laws? If not, can such Commonwealth legislation retrospectively remove direct inconsistency? Does Metwally offer any guidance on these issues?

6.

Would Metwally apply to the converse situation; namely, could the Commonwealth Parliament retrospectively render State law inoperative by retrospectively purporting to cover the field? Murphy J and, possibly, Deane J appear to concede the validity of such Commonwealth legislation. For example, Murphy J indicated that “[i]f an inconsistency occurs because of … retrospective operation of federal or State law, s 109 operates to render the State law invalid to the extent of the inconsistency. But retrospective operation of federal law cannot render valid what s 109 made invalid. This would elevate legislation above the Constitution” (at 469). Deane J remarked that nothing he had said “necessarily involve[d] any denial of the competence of the Commonwealth Parliament to preclude enforcement of a State law in relation to past contraventions if the present enforcement of that State law would be contemporaneously inconsistent with the provisions of that Commonwealth law” (at 480). However, Gibbs CJ concluded that s 109 precluded retrospective Commonwealth legislation whether it sought to cover, or not to cover, the field (at 457). How, if at all, can these two positions be distinguished? In both situations is not the effect of s 109 being displaced?

7.

What is the relationship between s 109 and the constitutional validity of retrospective Commonwealth legislation? Does this relationship have any significance for the relationship between s 109 and individual rights or liberties? That is, does the Metwally Case indicate a new view about the fundamental nature and purpose of s 109? If s 109 restricts the Commonwealth Parliament’s legislative powers and invalidates Commonwealth legislation, does that change s 109’s character or nature from a provision concerned with the relationship of Commonwealth and State laws to a concern about the scope and limits of constitutional power? If so, what are the consequences for s 109 and constitutional law?

8.

Given the actual result in the Metwally Case, that Mr Metwally’s successful claim and damages award under the Anti-Discrimination Act 1977 (NSW) was set aside, did the majority (Gibbs CJ, Murphy, Brennan and Deane JJ) place a greater constitutional value on limiting Commonwealth retrospective legislation than permitting States to set, with Commonwealth legislative consent in a federal context, higher legislative human rights standards than the Commonwealth? In that regard, note Deane J’s hope that notwithstanding the result of Metwally, “the relevant authorities will attempt to ensure that Mr Metwally receives swift and proper compensation for any legitimate claim which he may have against the respondent University” (at 481). [4.360]

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One, two or three tests? [4.370] Is there only one or are there several s 109 inconsistency tests? The High Court has enunciated three tests as indicated above. However, the Court has often alluded to two categories – “direct” inconsistency and “indirect” inconsistency. However, in some cases, there appears to be a good deal of overlapping or intermeshing, both in the formulation and application, between these tests. Are there different considerations involved in the formulation and application of the tests? Do different consequences ensue (eg, for clauses expressly covering the field or declining to cover the field) if there is only one – covering the field – test? Contrast the view in G A Rumble, “The Nature of Inconsistency Under Section 109 of the Constitution” (1980) 11 Federal Law Review 40 that there is only one inconsistency test – the cover the field test – with the High Court’s position. Is it constitutionally correct or appropriate to merge or mould the tests into one s 109 inconsistency category? See Wardley (at 280) per Aickin J and see also, G Rumble, “Manufacturing and Avoiding Constitution Section 109 Inconsistency: Law and Practice” (2010) 38 Federal Law Review 445. Whatever may be concluded on these questions, it needs to be borne in mind that these various tests are in one sense an emanation from the more general attempt, as part of the courts interpretational methodology, to determine in which circumstances a State law is “inconsistent” with a Commonwealth law. The tests are not, and have never been held to be, rigid formulae the application of which yields simple results. The tests themselves, and the criteria by which they are applied, often overlap on any given set of facts. The overlap between “denial of rights” and “cover the field” inconsistencies is particularly apparent, as recognised in the more recent cases.

Jemena Asset Management (3) v Coinvest [4.380] Jemena Asset Management (3) Pty Ltd v Coinvest Ltd (2011) 244 CLR 508 at 514–529 (most footnotes omitted) [An award and a succession of certified agreements made under the Workplace Relations Act 1996 (Cth) obliged employers bound by them to grant, and pay for, long service leave in relation to their qualifying employees. Before 27 March 2006 ss 152(1) and 170LZ(1) of the Workplace Relations Act, and s 17(1) of that Act on and from that date, provided for the paramountcy of awards and certified agreements made under federal legislation over State laws. The Construction Industry Long Service Leave Act 1997 (Vic) provided for a scheme for portable long service leave benefits in the construction industry. That is, an employer in that industry was required to pay into the prescribed fund a long service leave charge for each employee engaged in construction work. An employee was entitled to receive benefits out of the fund on the basis of continuous service in the construction industry. The State Act did not include a provision for the granting of long-service leave. Moreover, the scheme expressly contemplated that long service leave might be paid by an employer under a federal award and provided for reimbursement for employers and a correlative reduction in the employee’s entitlement under the scheme. Jemena and related companies brought an unsuccessful action in the Federal Court arguing that they did not need to comply with the State Act because it was inconsistent with the federal award which covered their relationship with their employees engaged in construction. They appealed to the High Court which unanimously upheld the decision of the Federal Court.] French CJ, Gummow, Heydon, Crennan, Kiefel and Bell JJ: 516[11] For the purposes of s 109, an industrial award, whilst not of itself a law of the Commonwealth, has the force and effect of such a law where so provided by the machinery of a Commonwealth statute. 517… [T]he Commonwealth Act expressly provided for the paramountcy of instruments made under federal legislation. An earlier version of these provisions (s 65 of the Conciliation and Arbitration Act 1904 (Cth)) was recognised as evincing a statutory intention that an award made pursuant to the Act was to operate “to the exclusion of any State law”. 518 [17] The 1998 Award and the certified agreements impose obligations on employers bound by them to grant, and pay for, long service leave in relation to their qualifying employees, and govern the circumstances in which such entitlements will accrue. [18] In the words of 354

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Jemena Asset Management (3) v Coinvest cont. the Full Court below, “the 1998 Award deals with all the ordinary aspects of long service leave entitlements which might arise in the industrial relationship between employee and employer”. Clause 24 prescribes, among other things, an entitlement to long service leave calculated and paid at a particular rate (cl 24.2), requirements for accruing and taking leave (cll 24.3-24.4), and mechanisms for making payments in lieu of leave in the event of termination of employment (cl 24.5). [19] The certified agreements oblige affected employers to comply with the 1998 Award and current policies, customs and practices, including the practice in respect of the granting of, and payment for, long service leave. The 2004 Certified Agreements contain “guide” provisions governing the accrual, calculation and payment of long service leave. … 519 [21] In essence, the State Act requires employers bound by it to contribute to the … Fund so as to provide portable long service leave benefits for workers in the construction industry. [(Emphasis added). The Court then set out the obligations of employers under the Act to contribute and the entitlement of employees to long service leave and to be paid benefits out of the fund in respect of continuous service in the construction industry. How this is provided for is then set out in some detail.] 523 [36] The paramountcy of the Parliament of the Commonwealth under the Constitution resolves any conflict between Commonwealth and State law as set out in covering cl 5 and s 109 of the Constitution: … [37] Quick and Garran describe s 109 as “practically a corollary” of ss 106, 107 and 108 of the Constitution which deal respectively with the saving of State Constitutions, powers of State Parliaments and State laws, all of which are made subject to the Constitution. In the context of the law-making powers of the State and Commonwealth Parliaments under their respective Constitutions, s 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. … [39] 529 Applicable principles have been reiterated in the joint reasons of the whole Court in Dickson v The Queen (2010) 241 CLR 491 at 502 [13]–[14]: “The statement of principle respecting s 109 of the Constitution … was taken up in the joint reasons of the whole Court in Telstra Corporation Ltd v Worthing (1999) 197 CLR 61 at 76 [28] as follows: ‘In [the Kakariki Case], Dixon J stated two propositions which are presently material. The first was: “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’.” [40] The expression “cover the field” means “cover the subject matter”, which was the description used and explained by Dixon J in Ex parte McLean. From the outset the aspect of inconsistency associated with the expression “covering the field” has not been free from criticism. There can be little doubt that indirect inconsistency involves “more subtle … contrariety” than any “textual” or “direct collision” between the provisions of a Commonwealth law and a State law (Stock Motor Ploughs Ltd v Forsyth (1932) 48 CLR 128 at 147 per Evatt J; Kakariki case (1937) 58 CLR 618 at 633–634 per Evatt J.) 525 [41] 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. [42] 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 … Wardley (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” exists between a Commonwealth law and a State law. [43] The appellants’ case … involved asserting the existence of both direct and indirect inconsistency between the Commonwealth Act as embodied in the federal instruments and the State Act. [44] With concurrent [4.380]

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Jemena Asset Management (3) v Coinvest cont. federal and State powers, the question of inconsistency does not involve the limits of constitutional powers under the respective Constitutions, but rather the operation of both Acts. As explained by Dixon J in Wenn v Attorney-General (Vic) (1948) 77 CLR 84 (at 120, 122): “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 … [W]hile s 109 invalidates State legislation only so far as it is inconsistent, the question whether one provision of a State Act can have any operation apart from some other provision contained in the Act must depend upon the intention of the State legislation, ascertained by interpreting the statute.” 526 [45] Similarly, in [the] Native Title Act Case (1995) 183 CLR 373 (at 465) it was recognised that the extent of any inconsistency “depends on the text and operation of the respective laws”. A proper understanding of the policy and purpose of the State Act underpins the task of construing it and identifying its operation. [46] Because it was accepted by all parties that the 1998 Award covered employee entitlements and correlative employer obligations in respect of the grant of, and payment for, long service leave, the respondent conceded by reference to Wenn, that if, and to the extent that, the State Act scheme dealt with the grant of long service leave it would operate inconsistently with the federal instruments. Does the State Act undermine the federal instruments? [47] … The appellants contended that the State Act and scheme were directly inconsistent with the relevant provisions of the Commonwealth Act embodied in the federal instruments, because obligations imposed by the State Act were additional to, hence greater than, the obligations imposed under the federal instruments. … [49] The respondent submitted that the State and Commonwealth laws are different because the former provides for workers to access 527 the Fund, supported by long service leave charges levied on employers, and does not purport to create or modify the industrial relationship between employee and employer and entitlements and obligations in respect of long service leave under the federal instruments. It was contended that a power to amend the Fund rules cannot impair the operation of the federal instruments unless and until the rules are amended so as to bring about such an impairment. [50] As this Court has stated many times, statements of legislative intention made by a Minister do not overcome the need to consider the text of a statute to ascertain its meaning. [51] A reading of the whole of the State Act, the trust deed and the Fund rules shows that despite references to “long service leave” in s 6(1) of the State Act and in some of the current Fund rules 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. [Emphasis added] 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, although they unavoidably allude to long service leave in dealing with the “long service leave benefit” which is the subject matter of the State Act. [52] 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 (eg, see rr 27.1 and 29.1 of the Fund rules) paid out in accordance with the Fund rules (eg, see rr 1.1 and 27.1). 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 (r 40.3) and a correlative reduction in the worker’s entitlements under the State Act would also follow (r 23.10). [53] 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. Are the federal instruments exhaustive? [54] The appellants also alleged indirect inconsistency by submitting that the field covered exhaustively by the federal instruments is the 528 appellants’ obligations in respect of long service leave accrued in whole or in part through service with the 356

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Jemena Asset Management (3) v Coinvest cont. appellants and the entitlements of employees of the appellants in respect of such leave. It was submitted that the Full Court erred in not characterising the State Act scheme as pertaining to the employment relationship between employers and employees. [55] In answer, the respondent essentially submitted that the State Act and the scheme made under it do not enter the field covered by the federal instruments because they do not regulate long service leave. Rather they provide portable long service leave benefits intended to apply in the construction industry in which workers may move from one employer to another, albeit whilst in continuous service in the industry. [Emphasis added.] [56] 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. [57] 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. [58] In Collins v Charles Marshall Pty Ltd (1955) 92 CLR 529, 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 529 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 (T A Robinson & Sons Pty Ltd v Haylor (1957) 97 CLR 177 at 183). 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 was also crucial in New South Wales v The Commonwealth (Hospital Benefits Case) (1983) 151 CLR 302 at 316–319 per Gibbs CJ, Murphy and Wilson JJ; at 326–328 per Mason J., which dealt with certain State levies in the context of Commonwealth legislation regulating hospital benefits providers and contributors, particularly the benefits payable to the contributors. [59] 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. Conclusions [60] The results of applying accepted tests of direct and indirect inconsistency in this appeal turn on the same consideration, namely that the State law providing for portable long service leave benefits for workers in the construction industry does not conflict with the federal instruments providing for the grant of, and payment for, long service leave arising in the employment relationship because, as demonstrated, the federal instruments are not incompatible with the State Act which operates in a manner which is complementary to the operation of the federal instruments. A consideration of the two different aspects of inconsistency relied upon by the appellants yields the same result, namely, that there is no real conflict between the State law and the Commonwealth law embodied in the federal instruments. [61] Accordingly the State Act is not invalid by reference to s 109 of the Constitution. [62] The appeal should be dismissed with costs.

[4.380]

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[4.390]

Notes&Questions

1.

To what extent is the time ripe for a re-classification of “denial rights” as a species of “covering the field” or vice versa? Is there any aspect of “denial of rights” rendering it sufficiently distinct from “covering the field” as to hinder such a re-classification? Are there elements in the former which explain why it should remain a species of “direct” inconsistency or should that category be limited to “impossibility of obedience” forms of inconsistency which render them “direct”. Is it even the case that the very distinction between “direct” and “indirect” is now rendered otiose, and that reference should simply now be made to the various tests which have emerged. See Jemena Asset Management (3) Pty Ltd v Coinvest Ltd (2011) 244 CLR 508 at 524, [40] in [4.380].

2.

Of course, the urgency of these questions is ameliorated somewhat if it is borne in the mind that these tests were never meant to be exact formulae, nor was it ever denied that they were mutually exclusive. It remains the case that these tests may evolve, or indeed new tests may develop, over time.

3.

In relation to the “covering the field” test, disquiet has increasingly been expressed by the High Court. In Jemena at 524 [40] at [4.380], reference was made to the critical comments of Evatt J in Stock Motor Ploughs extracted at [4.400].

Stock Motor Ploughs v Forsythe [4.400] Stock Motor Ploughs Ltd v Forsythe (1932) 48 CLR 128 at 145–148 (most footnotes omitted) Evatt J: 145 The tendency of the earlier decisions of this Court was to deny any “inconsistency” between the laws of Federal and State legislatures, if it was possible for both laws to operate without contradiction, so that obedience could be rendered to both sets of commands. Of recent years, however, a more extended meaning has sometimes been accorded to the word “inconsistency.” [After referring to Cowburn’s Case his Honour continued:] 146 The Federal award completely “covered the relevant field,” which was the regulation of the industrial relationship of described employees and described employers, because it laid down an exhaustive code upon the subject and left no room for the operation of the State Act. Each statement of the conclusion affirms “inconsistency” but the second statement indicates that, despite the mere possibility of obedience to commands issuing from the two law-making authorities of Australia, there may be an inconsistency which nullifies the State command. Two other classes of case may be referred to. In Hume v Palmer (1926) 38 CLR 441 this Court held that State navigation regulations for preventing collisions at sea, identical in every respect with Commonwealth navigation regulations of vessels engaged in inter-State and foreign trade and commerce, were “inconsistent” with the latter so far as they related to such trade and commerce. Obedience to both sets of rules was of course involved in obeying either. But the Commonwealth rules were regarded as “covering the relevant field,” and as necessarily shutting out the application of those promulgated by the State. Again, each set of commands was addressed to the very same subject matter and the very same aspect of it…. The other class of case is represented by Ex parte McLean. A State Act prescribed a certain method of punishment for employees found guilty of specified conduct towards their employers. But a Federal award dealt with exactly the same conduct by employees, and imposed a somewhat different sanction. It was held that the Federal award exhibited an intention of imposing its duty and its sanction as the complete set of rules to govern this aspect 147 of the industrial relationship between specified employers and employees, and that, consequently, the State Act did not apply to any employees bound to observe the duties laid down by the Federal award.

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Stock Motor Ploughs v Forsythe cont. 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. Now, in a general way, it is true to say that some of the subjects mentioned in s 51, as to all of which the Commonwealth Parliament has power, but not exclusive power, to make laws, may be so dealt with by the Commonwealth Parliament that the concurrent power of the State Parliament to deal with those subjects, will, for all practical purposes, be terminated. For any law passed by the State Parliament on the specified subject matter may be, or become, “inconsistent” with a Federal law which “covers the relevant field”. But it is also clear that, owing to the very nature of some of the subjects specified in s 51, it will seldom, if ever, be possible for the Commonwealth Parliament to pass a law, which will not only be a valid law with respect to the specified subject, but will also be one “covering the field” so as to render inconsistent and void any State law which deals with or operates upon the same subject. Take, for instance, the subject of aliens, mentioned in s 51(xix). A Commonwealth statute might validly impose prescribed duties upon aliens, but it is difficult to see how a Commonwealth law 148 could be passed upon the subject of aliens which would render inconsistent with it State laws imposing separate and additional duties, even upon aliens alone. With other subject matters, the position is more difficult of general statement. Could a Commonwealth law with respect to taxation ever render void as inconsistent with it, a State law imposing direct taxation, unless compliance with the Commonwealth imposition made it impossible to obey that of the State? In other words, does not the subject matter of “aliens” indicate a class of persons who may enter into an innumerable number of relations with the States and their citizens, and that of “taxation” indicate a process or system of extraction which, as exercised by the Commonwealth authority, implies the payment of taxes to the Commonwealth itself, and is not directly related to what the States may demand as taxes from the same citizens, so long as Commonwealth requirements are met? (Cf The Federalist, Essay XXXIII.) These two subject matters of legislative power may well be contrasted with that of conciliation and arbitration for the prevention or settlement of certain industrial disputes. Once admit that the Commonwealth Parliament may give the sanction of Commonwealth law to an arbitrator’s award settling such disputes, and that such award may prescribe a complete industrial code for the government of the disputants, there is little or no room left for any action by other persons or authorities having the effect of adding to, much less altering, the duties laid down in the Commonwealth code. Much the same position arises in relation to the regulation by the Commonwealth of portions of inter-State trade and commerce such as navigation rules, the contents of contracts of affreightment and the like. Selection by the Commonwealth of small portions of a subject upon which it may legislate, especially where such subjects, if systematically regulated at all, cannot admit of more systems than one, readily results in the avoidance of State legislation which, though capable of being simultaneously obeyed, deals with the same small portion of the given subject.

[4.410]

1.

Notes&Questions

It is telling that the High Court sought to emphasise, in particular, that part of the above extract the gist of which is found in the following remark by Evatt J: [4.410]

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[“Cover the field”] 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.

To what extent is this passage, and the recent express reference to it by the High Court, the harbinger of a change of emphasis by the High Court when examining s 109 cases? 2.

The above extract from the judgment of Evatt J, in addition to Jemena, at 524 [40] was also referred to in Momcilovic v The Queen (2011) 245 CLR 1 at 118 [264], 233 [630].

[4.420] Dickson v The Queen (2010) 241 CLR 491 is another recent case which deals with

these issues, a unanimous decision of the High Court that illustrates the application of relevant principle in criminal proceedings, as well as the techniques of statutory construction in an inconsistency context.

Dickson v The Queen [4.430] Dickson v The Queen (2010) 241 CLR 491 at 501–508 (most footnotes omitted) [Section 321(1) of the Crimes Act 1958 (Vic) provided that, if a person agreed with any other person(s) that a course of conduct should be pursued which would involve the commission of an offence by one or more of them, he was guilty of the indictable offence of conspiracy to commit that offence. Section 72(1) of that Act provided that a person stole if he dishonestly appropriated property belonging to another with the intention of permanently depriving the other of it. Section 71(2) provided that property was to be regarded as “belonging to any person having possession or control of it”, or (with some exceptions) having in it any proprietary right or interest. Section 131.1(1) of the Criminal Code (Cth), made theft of property that “belongs to” a “Commonwealth entity”, of which Customs was one, an offence. Section 130.2(1)(a) provided that property “belongs to” a person having possession or control of it. Section 11.5 provided that the offence of conspiracy was committed by a person who conspired with another person to commit the offence in question. There were several differences between the Victorian and Commonwealth conspiracy offences, including that the commission of the Commonwealth offence of conspiracy required at least one party to the agreement to have committed an overt act pursuant to the agreement whereas the Victorian offence did not require proof of overt acts. An accused was tried and convicted of conspiracy to steal, contrary to s 321(1) of the Crimes Act 1958 (Vic). The conspiracy related to the theft of a large quantity of cigarettes that had been seized by Customs and transferred to a storage facility used by Customs but owned and managed by a company. The presentment alleged that the cigarettes belonged to the company. The judge directed the jury that they could assume the cigarettes had been under the control of the company and thus belonged to it. The presentment did not refer to the cigarettes belonging to the Commonwealth. In the High Court however, the Crown accepted that the cigarettes were also in the “possession” of Customs and therefore also of the Commonwealth.] French CJ, Gummow, Hayne, Heydon, Crennan, Kiefel and Bell JJ held unanimously: 501 … [10] For the reasons which follow the submissions as to “direct inconsistency” which were made by the appellant should be accepted and the appeal allowed. [11] Chapter 2 of the Criminal Code (Cth) which includes s 11.5, is headed “General principles of criminal responsibility”. Chapter 7, which includes s 131.1, is headed “The proper administration of Government”. For the offence of theft, the maximum penalty is imprisonment for 10 years (s 131.1(1)). The property in question must be property which “belongs to” a “Commonwealth entity” (s 131.1(1)(b)) … Customs being one such body. The cigarettes in question … belonged to the Commonwealth if, on 20 January 2004, they were in the “possession” of Customs (s 130.2(1)(a)). In this Court, the respondent accepts that to have been the case. Further, for the purposes of the theft provisions in the 502 Crimes Act 1958 (Vic), property is regarded as “belonging to” any person having “possession” of it (s 71(2)). Thus, if the Victorian provisions had a relevant valid operation, for those purposes the Commonwealth also had possession 360

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Dickson v The Queen cont. of the cigarettes on 20 January 2004. [12] The effect of s 11.5 of the Criminal Code (Cth) is that the offence of conspiracy is committed by a person who conspires with another person to commit the offence under s 131.1, and the conspiracy offence is punishable as if the offence to which the conspiracy relates had been committed. Section 4G of the Crimes Act 1914(Cth) (“the Commonwealth Crimes Act”) so operates that the offence of conspiracy in such a case is an indictable offence, to the trial of which s 80 of the Constitution attaches. [13] The statement of principle respecting s 109 of the Constitution which had been made by Dixon J in Victoria v Commonwealth (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 77 [28] as follows: [Their Honours then quoted Dixon J’s two principles: (a) “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”; (b) “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.” They then added Dixon J’s further remark: “The second proposition may apply in a given case where the first does not, yet, … if the first proposition applies, then s 109 of the Constitution operates even if, and without the occasion to consider whether, the second proposition applies.”] [14] The first proposition is often associated with the description “direct inconsistency”, and the second with the expressions “covering the field” and “indirect inconsistency”. The primary submission of the appellant is that the first proposition applies to the interaction in the present case between the State and Commonwealth conspiracy laws so that this is an instance of “direct inconsistency”. 503 [15] The passage in Telstra which is set out above was introduced by a discussion of earlier authorities which included the following (1999) 197 CLR 61 at 76 [27]: Further, there will be what Barwick CJ identified as “direct collision” where the State law, if allowed to operate, would impose an obligation greater than that for which the federal law has provided. Thus, in Australian Mutual Provident Society v Goulden … the Court determined the issue before it by stating that the provision of the State law in question “would qualify, impair and, in a significant respect, negate the essential legislative scheme of the Life Insurance Act 1945 (Cth)”. A different result obtains if the Commonwealth law operates within the setting of other laws so that it is supplementary to or cumulative upon the State law in question (Blackley v Devondale Cream (Vic) Pty Ltd (1968) 117 CLR 253 at 258 259; see also at 270 per Taylor J, 272 per Menzies J; Australian Broadcasting Commission v Industrial Court (SA) (1977) 138 CLR 399 at 406; Dao v Australian Postal Commission (1987) 162 CLR 317 at 335, 338 339). But that is not this case. [16] It was held in Telstra that because the compensation payable to an injured worker under State legislation differed in a number of respects from that payable to the worker under federal law, the State law had the effect of qualifying, impairing and, in some respects, negating the effect of the federal law and that s 109 of the Constitution operated to the extent of that inconsistency. [17] In Blackley v Devondale Cream (Vic) Pty Ltd (1968) 117 CLR 253 at 339, where Barwick CJ referred to “direct collision”, it may be noted that the litigation had been instituted by way of a charge upon information laid by Blackley, an inspector, that the employer had failed to pay an employee at the appropriate rates under the Labour and Industry Act 1958 (Vic); the issue in the High Court turned upon the effect to be given by s 109 to an award made under the Conciliation and Arbitration Act 1904 (Cth) which imposed lesser obligations on the employer and made these enforceable both civilly and criminally under Pt VI of the federal statute. [18] Three further points should be made at this stage. [19] 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 504 concurrent and cumulative duties and liabilities may be imposed by laws made by those bodies. [20] The second point is that, as [4.430]

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Dickson v The Queen cont. Isaacs J indicated in Hume v Palmer (1926) 38 CLR 441 (at 450 451) 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 2000 did not require the unanimity which, because s 4G of Crimes Act 1914 (Cth) would have stipulated an indictment for the federal conspiracy offence, s 80 then would have mandated at a trial of the appellant. [21] The third point concerns the significance of s 4C(2) of the Crimes Act 1914 (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”. [22] The direct inconsistency in the present case is presented by the circumstance that s 321 of the Crimes Act 1958 (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 1958 (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), 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. [23] To explain why this is so it is necessary to say something more respecting certain aspects of the common law crime of conspiracy 505 which are picked up without alteration by s 321 of the Crimes Act 1958 (Vic). In R v Caldwell (2009) 22 VR 93 (at 99 100 [62] [63]) Weinberg JA said: “The criminal law is ordinarily concerned with conduct, usually prohibited acts, but sometimes the failure to perform required acts. At common law, conspiracy differs in that the prohibited act is the entry into an unlawful agreement, which need never be implemented. Nothing need be done in pursuit of the agreement. The offence of conspiracy is complete the moment that the offenders have entered into the agreement. Repentance, lack of opportunity and failure are all immaterial, and withdrawal goes to mitigation only. Accordingly, an overt act performed in implementing that agreement is not an ingredient, or element, of the offence itself. Evidence of overt acts is admissible to prove the existence of the conspiracy, and sometimes to assist in the identification of the participants. However, it must always be borne in mind that particulars of overt acts, and indeed particulars in general, are not elements of the offence.” [24] Section 11.5 of the Criminal Code (Cth) received detailed consideration by this Court in R v LK (2010) 84 ALJR 395. The extrinsic material considered in R v LK indicated that the narrower scope of s 11.5 reflects a deliberate legislative choice influenced by the work of what in R v LK were identified as the Gibbs Committee and the Model Criminal Code Officers Committee. [25] 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 (Vic) (1948) 77 CLR 84 (at 120). [26] 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 1958 (Vic) applies to agreements which will involve “the commission of an offence”. [27] 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 506 least one other party to the agreement, must have committed an overt 362

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Dickson v The Queen cont. act pursuant to the agreement. [28] 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. [29] The situation in the present case may be contrasted to that presented in McWaters v Day (1989) 168 CLR 289. The Queensland legislation, s 16 of the Traffic Act 1949 (Qld), created an offence of driving a motor vehicle while under the influence of liquor. Section 40(2) of the Defence Force Discipline Act 1982 (Cth) required for liability that the defence member drive a vehicle on service land whilst under the influence of intoxicating liquor “to such an extent as to be incapable of having proper control of the vehicle”. It was, as emphasised by the Attorney General for New South Wales in the course of his intervention in support of Queensland, difficult to construe s 40(2) as conferring a liberty on a drunken defence member to drive a vehicle on service land provided he or she was still capable of controlling the vehicle. Hence, perhaps, the emphasis in argument by the defence member, in the event unsuccessful, upon establishing that the defence discipline legislation was exclusive of, rather than supplementary to, the ordinary criminal law respecting traffic offences. [30] The result in the present case is that in its concurrent field of operation in respect of conduct, s 321 of the Crimes Act 1958 (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.[31] In reaching that conclusion it is unnecessary to have regard to notions expressed in terms of “covering the field” and “indirect inconsistency”. In particular it is unnecessary to determine the appeal on the footing, which the appellant also advances, that s 11.5 of the Criminal Code (Cth) is an “exhaustive” provision for the law of conspiracy to commit offences injurious to the proprietary and other governmental interests of the Commonwealth (Cf R v Loewenthal; Ex parte Blacklock (1974) 131 CLR 338). [32] When deciding questions of “indirect inconsistency” it often has been said that the “intention” of the Parliament is determinative, or at least indicative, of the characterisation of the federal law as one which 507 “covers the field” in question or does not do so. Some caution is required here, with regard to what was said in Zheng v Cai (2009) 239 CLR 446 (at 455 456 [28]) as follows: It has been said that to attribute an intention to the legislature is to apply something of a fiction. However, what is involved here is not the attribution of a collective mental state to legislators. That would be a misleading use of metaphor. Rather, judicial findings as to legislative intention are an expression of the constitutional relationship between the arms of government with respect to the making, interpretation and application of laws. As explained in NAAV v Minister for Immigration and Multicultural and Indigenous Affairs (2002) 123 FCR 298 at 410 412, the preferred construction by the court of the statute in question is reached by the application of rules of interpretation accepted by all arms of government in the system of representative democracy. That constitutional relationship is further informed by the operation of s 109 in the federal structure of government. [33] It is with this in mind that there are to be read the references to “intention” in a well-known passage in the reasons of Mason J in R v Credit Tribunal; Ex parte General Motors Acceptance Corporation (1977) 137 CLR 545 (at 563), recently repeated in John Holland Pty Ltd v Victorian Workcover Authority (2009) 239 CLR 518 (at 527 528 [21]). Mason J said: [A]lthough a provision in a Commonwealth statute which attempts to deny operational validity to a State law cannot of its own force achieve that object, it may nevertheless validly evince an intention on the part of the statute to make exhaustive or exclusive provision on the subject with which it deals, thereby bringing s 109 into play. 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 [4.430]

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Dickson v The Queen cont. 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. [34] The federal legislation considered in John Holland was an example of the first class which Mason J had described in General Motors. It contained a statement that in certain specified respects it was to apply to the exclusion of State laws. Other examples of federal laws of that 508 character were discussed in Bayside City Council v Telstra Corporation Ltd (2004) 216 CLR 595 (at 627 629 [35] [39]). More difficult questions of statutory construction arise in cases where an identified “field” is said to be “covered” by reason of no more than implications found in the text of the federal law Re Residential Tenancies Tribunal (NSW); Ex parte Defence Housing Authority (1997) 190 CLR 410 (at 433). But the issue here must turn upon the proper interpretation of the federal law in question, having regard to its subject, scope and evident purpose. [35] It is this form of “indirect inconsistency” upon which the appellant relies for his alternative argument respecting s 11.5 of the Criminal Code (Cth). The respondent and the interveners would counter the case for “indirect inconsistency” by reference to the second class of express statement identified by Mason J in General Motors. This involves an express form of words to pull back from what otherwise might be an implication that the federal law was an exhaustive statement upon a particular subject or “field”. But, as will now appear, close attention is necessary to the place of such a statement in the particular statutory framework in which it is to be found. [36] In the Criminal Code (Cth), Ch 4 (ss 70.6, 71.19, 72.5), Ch 7 (s 261.1), Ch 8 (ss 268.120, 270.12), Ch 9 (s 360.4), and Ch 10 (ss 400.16, 472.1, 475.1, 476.4), contained provisions so expressed as to deny for the Chapter in question, or particular portions of it, an “inten[tion] to exclude or limit” the operation of any other Commonwealth law, and also of any law of a State or Territory. [37] However, s 11.5 appeared in Ch 2, which did not contain any such statement. Those opposed to the appellant sought to rely upon the presence of such a provision (s 261.1) in Ch 7. The theft provision (s 131.1) appears in Ch 7. The presence of s 261.1, whatever else its effect in considering the application of s 109 to charges under State law of theft of the property of the Commonwealth, a matter upon which it is unnecessary to enter here, could not displace or avoid the direct collision between the conspiracy provisions with which the appeal is concerned. [38] The balance of the special leave application should be dismissed. The appeal should be allowed and the order of the Court of Appeal of the Supreme Court of Victoria made 18 December 2008 set aside. In place thereof, leave to appeal against conviction and sentence should be granted, the appeal allowed, the presentment preferred against the appellant and his conviction on 21 February 2008 quashed, and the sentence imposed on 17 April 2008 set aside.

[4.440]

1.

2.

364

Notes&Questions

This case is a further illustration of the delicacy needed to distinguish “direct” inconsistency from “covering the field”. Even if considering a direct form of inconsistency based on “alter, impair or detract from” considerations, one may also be drawing a conclusion that the Commonwealth law is intended to operate to the exclusion of State law. But does that mean that “covering the field” is a subset of “alter, impair or detract from” inconsistency? Or is it rather the case that the “covering the field” inconsistency involves considerations of a more subtle kind than those involved in any direct collision between laws. See Jemena at 524 [40] (see [4.380]). Is it therefore more advisable to come to terms with the overlap that may exist than to attempt, with mathematical precision, any classification, or re-classification of the tests? In Dickson v The Queen (2010) 241 CLR 491 at 506 [32] (see [4.430]), was the court in fact querying the efficacy of attempts to discern the “intention of Parliament” or was it merely grounding that concept within the unobjectionable proposition that the court is engaged in an exercise of statutory construction to determine the constitutional [4.440]

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relationship between the Commonwealth and States laws within the context of the application of s 109. Is it not merely confirming the truism that the “intention” of Parliament refers not to its subjective intention, but rather the intention as discerned from the statute by the application of techniques of statutory construction. This is the point that Dixon J was making in Ex Parte McLean (1930) 43 CLR 47 at 483 (emphasis added) (see [4.140]) when he stated that “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 attention is directed”. 3.

In the most recent case to consider the question, Bell Group NV (in liq) v Western Australia (2016) 331 ALR 408, the Court did not appear to emphasise the traditional categorisations, raising again the question as to whether there are one, two or three test. In a joint judgement, French CJ, Kiefel, Bell, Keane, Nettle and Gordon JJ stated (at 422) that: [51] A conflict may arise in a number of ways. The State law, if valid, might “alter, impair or detract from the operation of a law of the Commonwealth Parliament”. 67 If so, then to that extent it will be invalid because of what sometimes is described as “direct inconsistency”. 68 As the court said in Jemena 2011) 244 CLR 508 at [37]: “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.” (emphasis added) The conflict may also arise from the laws’ legal operation or from their practical effect. (APLA Ltd v Legal Services Commissioner (NSW) (2005) 224 CLR 322) [52] “[A]ny alteration or impairment of, or detraction from, a Commonwealth law must be significant and not trivial” (Jemena at [41]. The question of whether any alteration or impairment of, or detraction from, a Commonwealth law is significant is “always one of fact and degree” (APLA at [206]). The starting point is an analysis of the laws in question and their true construction (Momcilovic v R (2011) 245 CLR 1 at [242] and [323]) The extent of the inconsistency “depends on the text and operation of the respective laws” (Jemena at [45]).

In that case Western Australian legislation provided a regime for the dissolution and administration of a company in liquidation. The State Act established an Authority to administer and deal with the property of the Bell Group and certain subsidiaries with absolute discretion to determine the property and liabilities of the Bell companies and to make payments in respect of any liabilities. The Commonwealth was a creditor of the Bell companies. The Authority’s statutory powers included the power to extinguish the tax debts of the Commonwealth. As a result, the Court held that the Bell Act was inconsistent with the Income Tax Assessment Act 1936 (Cth) and the Taxation Administration Act 1953 (Cth). The scheme “stripped [those debts] of the characteristics ascribed to them” by the these Commonwealth Acts and overrode the Commonwealth’s accrued rights (at [60] 424). Inconsistency also arose because the Bell Act purported to transfer to and vest in the Authority all Bell property, thereby preventing the liquidator from fulfilling his obligations under the Commonwealth acts to retain funds to meet accrued tax liabilities (at [65] 425). The relevant provisions in the State Act therefore altered, impaired or detracted from the operation of the Tax Acts. Further, the offending provisions were fundamental to the operation of the Bell Act and could not be severed (at [72] 427). The State Act was therefore wholly inoperative.

[4.440]

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EXTENT OF INCONSISTENCY [4.450] Section 109 stipulates that where State and Commonwealth laws are inconsistent,

State laws are, only “to the extent of [that] inconsistency”, invalid. Those words “must be taken to have a temporal as well as a substantive connotation” (Butler v Attorney General for Victoria (1961) 106 CLR 268 at 283 per Taylor J). Three consequences ensue. First, severance of statutory provisions is contemplated by s 109. Secondly, if invalid provisions are severed, inconsistent State laws will not be totally inoperative. Thirdly, State laws may revive. The internal severability of legislation – separating valid from invalid provisions – is a task requiring the application of principles and rules of statutory interpretation. On severability, see Lane (2nd ed, 1997), pp 914-924; Interpretation Act 1987 (NSW), s 31; Interpretation of Legislation Act 1984 (Vic), s 6; Interpretation Act 1984 (WA), s 7. State laws may be drafted so that their provisions cannot have a disparate or separate effect. An example is Wenn’s Case where there was total invalidity because the provisions of the State law were intended to be interdependent or a codification of the law. Dixon J stated (at 122): No doubt s 109 means a separation to be made of the inconsistent parts of a State law. But [s 109] does not intend the separation to be made where division is only possible at the cost of producing provisions which the State Parliament never intended to enact. The burden of establishing interdependence in such a case is necessarily upon those who assert it [because] of the words of s 109, and perhaps it is not a light one.

Cowburn’s Case (see [4.90] and [4.130]) is an example of a State law continuing to operate over employees and employers other than those covered by the Commonwealth award. All of the State law is valid in respect of some employees and invalid in its application to others. Similarly, Lamb v Cockatoo Docks & Engineering Co Pty Ltd [1961] SR (NSW) 459 at 468 indicated that a State law’s “operative force may be suspended, wholly or in part, by [an inconsistent Commonwealth law]” and held that, because interdependence between invalid and valid provisions was not established, a State industrial award’s long service leave provisions remained operative while other parts were inoperative. Revival of s 109 invalid or inoperative provisions occurs because “[t]he 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 or the Federal Act” (Butler v Attorney-General (Vic) (1961) 106 CLR 268 at 283 per Taylor J). Examples of when revival of State law occurs include, with respect to the Commonwealth law: repeal, unconstitutionality, expiration of a legislatively predetermined time limit, and removal of covering the field inconsistency by the Commonwealth law. Clearly, revival may not occur if the State Parliament has previously repealed the State law.

INVALID [4.460] “Invalid” in s 109 means inoperative. The court (Mason CJ, Brennan, Deane, Toohey,

Gaudron and McHugh JJ) at 464–465 in the Native Title Case stated: [A] State law is to the extent of the inconsistency “invalid” – that is “suspended, inoperative and ineffective” – [T]he effect … produced … by … s 109 on a State law that is inconsistent with a law of the Commonwealth is not to impose an absolute invalidity. On the contrary, the State law remains valid though it is rendered inoperative to the extent of the inconsistency, but only for so long as the inconsistency remains.

OPERATIONAL INCONSISTENCY [4.470] The Kakariki Case is an illustration of where Commonwealth and State laws are not

inconsistent. In this situation, inconsistency only occurs where the laws are in operation. 366

[4.450]

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Kakariki case [4.480] Victoria v Commonwealth (Kakariki Case) (1937) 58 CLR 618 at 630–631 [The Marine Act 1928 (Vic) authorised State officers to order the removal of ships sunk in Victorian ports. The Navigation Act 1912 (Cth) authorised the Commonwealth Minister to order the removal or arrange for the removal of ships wrecked or abandoned near or on Australia’s coast if, for example, such a ship was in waters used for interstate or international trade. The High Court held that the Commonwealth Act did not intend to cover the field of removal of shipwrecks.] Dixon J: 630 There is nothing 631 in the language of s 329 [of the Navigation Act 1912 (Cth)] 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 overseas and inter-State 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 s 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.

[4.490]

1.

2.

Notes&Questions

In ascertaining the statutory intent, Dixon J examined both the “language” or terminology and “nature or subject matter” of the Navigation Act 1912 (Cth), s 329. Starke J considered that concurrent State and Commonwealth authority was “useful and necessary” (see the Kakariki Case at 628). For further examples of operational inconsistency, see R v Winneke; Ex parte Gallagher (1982) 152 CLR 211 at 216–217 per Gibbs CJ, at 221 per Mason J, at 233 per Wilson J (raising the possibility of operational inconsistency between Commonwealth and State Royal Commissions) and Re Tracey; Ex parte Ryan (1989) 166 CLR 518 at 599–600 per Gaudron J (suggesting the possibility of operational inconsistency between trials in State criminal courts and federal courts martial).

[4.490]

367

CHAPTER 5 Commerce and Corporations [5.10]

INTRODUCTION ...................................................................................................... 370

[5.20]

SECTION 51(I) .......................................................................................................... 370 [5.20]

Trade and commerce .............................................................................. 370 [5.30] [5.40]

[5.70]

A non-purposive power ........................................................................... 374 [5.80]

[5.100] [5.110]

R v Burgess; Ex parte Henry ........................................................... Airlines of NSW v NSW (No 2) ....................................................... Western Australian Airlines Case .................................................... The Australian Constitution: 1901–1988 .......................................

376 378 383 389

Production ................................................................................................ 391 [5.230] [5.240] [5.260] [5.280]

[5.310]

Murphyores Inc v Commonwealth ................................................. 374

Incidental power ...................................................................................... 376 Intrastate trade and commerce .............................................................. 376 [5.120] [5.140] [5.160] [5.180]

[5.220]

W & A McArthur v Queensland ...................................................... 370 Airlines Case ................................................................................ 371

O’Sullivan v Noarlunga Meat ........................................................ 391 O’Sullivan v Noarlunga Meat (No 2) ............................................. 393 Swift Australian Co v Boyd Parkinson ............................................. 394 Redfern v Dunlop Rubber Australia ................................................. 395

The United States commerce clause ...................................................... 400 [5.320]

United States v Morrison ............................................................... 403

[5.340] SECTION 51(XX) ...................................................................................................... 407 [5.340] [5.350]

Introduction ............................................................................................. 407 The power expanded .............................................................................. 407 [5.360]

[5.380]

Ambit of the power ................................................................................. 410 [5.390] [5.410] [5.430] [5.460]

[5.490]

State Superannuation Board v TPC ................................................ 465 Queensland Rail Case ................................................................... 471 Incorporation Case ....................................................................... 480

Internal Management ............................................................................. 487 Dissolution ................................................................................................ 487 Incidental power ...................................................................................... 488 Accessories ................................................................................................ 488 [5.610]

[5.620]

410 419 425 432

Incorporation ........................................................................................... 479 [5.550]

[5.570] [5.580] [5.590] [5.600]

Actors & Announcers Equity Ass’n v Fontana Films .......................... The Tasmanian Dam Case ............................................................ Re Dingjan; Ex parte Wagner ......................................................... Work Choices Case .......................................................................

Trading and financial corporations ........................................................ 465 [5.500] [5.520]

[5.540]

Strickland v Rocla Concrete Pipes ................................................... 408

Fencott v Muller ........................................................................... 488

Holding and subsidiary companies ........................................................ 489 369

Part III: The Legislative Power of the Commonwealth

INTRODUCTION [5.10] The Constitution confers on the Commonwealth a wide range of powers relating to

commercial matters, including trade and commerce with other countries and among the States (s 51(i)); foreign, trading and financial corporations (s 51(xx)); banking (s 51(xiii)); insurance (s 51(xiv)); bills of exchange (s 51(xvi)); currency, coinage and legal tender (s 51(xii)); weights and measures (s 51(xv)); and copyright, patents, designs and trade marks (s 51(xviii)). It also confers power with respect to taxation (s 51(ii)); bounties (s 51(iii)); and conciliation and arbitration of industrial disputes extending beyond one State (s 51(xxxv)). Undoubtedly the most general of these powers are the first two mentioned: the “commerce” and “corporations” powers, s 51(i) and (xx): 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: … (xx) foreign corporations, and trading and financial corporations formed within the limits of the Commonwealth.

The development of the High Court’s jurisprudence on the commerce power, especially when examined together with the corporations power, yields not only an understanding of the present scope of the power but also provides an excellent illustration of the judicial techniques involved in the interpretation of the legislative powers of the Commonwealth and how that interpretation has been informed by the imperatives of federalism. All the cases concerned with the commerce power, extracted below, provide excellent illustrations of constitutional interpretation, characterisation, the techniques of reading and severance, the difference between purposive and non-purposive powers, and the operation of the incidental power. All of these are necessary to understand accurately the ambit of the other legislative powers for which the Constitution provides.

SECTION 51(I) “Trade and commerce” [5.20] In W & A McArthur Ltd v Queensland (1920) 28 CLR 530 at 546–549, an early, but still influential, discussion of “trade and commerce among the States” occurred in the context of s 92 of the Constitution, which guarantees freedom of “trade, commerce, and intercourse among the States”. These words on s 92 and s 51(i) were to be interpreted in the same way (at 549). In their joint judgment, Knox CJ, Isaacs and Starke JJ (at 546) stated that the terms “trade, commerce and intercourse” are “not terms of art”. Rather, they are “expressions of fact”, “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.” The words “trade and commerce” included the act of “transport”, which they regarded a truism. Whether “among the States” or “with other countries”, the term is not confined to “the mere act of transportation over the territorial frontier” (at 547). They continued:

W & A McArthur v Queensland [5.30] W & A McArthur Ltd v Queensland (1920) 28 CLR 530 at 547-549 Knox CJ, Isaacs and Starke JJ: 547 All the commercial arrangements of which transportation is the direct and necessary result form part of “trade and commerce”. The mutual communings, the 370

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W & A McArthur v Queensland cont. negotiations, verbal and by correspondence, the bargain, the transport and the delivery are all, but not exclusively, parts of that class of relations between mankind which the world calls “trade and commerce” … 549 The notion of a person or a thing, tangible or intangible, moving in some way from one State to another is no doubt a necessary part of the concept of “trade, commerce, and intercourse among the States.” But all the commercial dealings and all the accessory methods in fact adopted by Australians to initiate, continue and effectuate the movement of persons and things from State to State are also parts of the concept, because they are essential for accomplishing the acknowledged end. Commercial transactions are multiform, and each transaction that is said to be inter-State must be judged by its substantial nature in order to ascertain whether and how far it is or is not of the character predicated. A given transaction which taken by itself would be domestic, as, for instance, transport between two points within a State, may in a particular instance be of an inter-State nature by reason of its association as part of a larger integer, having as a whole the distinctive character of commerce between States. On the other hand, a transaction which is inherently of an inter-State character, as passage of goods between two States, is none the less inter-State because a contract out of which it arises is itself a domestic contract …

While their Honours considered it a “truism” that “trade and commerce” includes transportation, that view was challenged in a series of cases in the 1930s known collectively as the “transport cases”, especially by Evatt J in Willard v Rawson (1933) 48 CLR 316 at 337 and R v Vizzard; Ex parte Hill (1933) 50 CLR 30. In the latter case, Evatt J commented that McArthur’s definition was “extremely wide and it certainly seems rather to describe all matters ‘relating to’ or ‘with respect to’ trade and commerce, rather than trade and commerce itself” (at 85). “[B]uying and selling” were “the essential elements” of commerce; carriage was merely “an instrument of trade, not trade itself” (at 88). This view was unequivocally rejected by the High Court in the Airlines Case of 1945.

Airlines Case [5.40] Australian National Airways Pty Ltd v Commonwealth (the Airlines Case) (1945) 71 CLR 29 at 80–94 [The Australian National Airlines Act 1945 (Cth) established the Australian National Airlines Commission (which operated under the name of Trans Australia Airlines, later Australian Airlines) to operate a government-owned airline. Section 19(1) empowered the Commission to transport for reward passengers and goods by air: (a)

between any place in a State and any place in another State;

(b)

between any place in any Territory … and any place in Australia outside that Territory; and

(c)

between any place in any Territory … and in any other place in that Territory.

The airline was effectively granted a monopoly over these airline services in Pt IV of the Act.] Dixon J first considered s 51(i): 80 It is objected that [the leading provisions of the Act] … cannot be supported under that power because it contemplates the legislative regulation of overseas and inter-State trade and commerce and not the entry of the Government itself into that field of activity. The argument places upon the words of the 81 constitutional power an interpretation according to which it would fall far short of authorizing the Parliament to establish a government monopoly or government undertaking in trade and commerce. The interpretation conceives of trade and commerce with other countries and among the States as a description of a section of the economic life of the community made up of countless forms of activity on the part of individuals, inter-related and organized and sustaining a flow of goods and services. The subject of the power is, therefore, treated as a recognized phenomenon of national life existing independently of the Commonwealth. The [5.40]

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Airlines Case cont. power, it is said, on its bare reading is but a power to make laws for the regulation of these activities, not to undertake them. Only because it was fitter that Federal legislation should deal with inter-State and foreign transactions were trade and commerce divided notionally into two sections. … [Rejecting this argument, his Honour continued]: It plainly ignores the 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. … 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. There is, however, a further difficulty in the application of the commerce power to the transport services which the Commission is authorized to conduct. So far I have spoken advisedly of a transport service for inter-State commerce. But the airline services contemplated are for passengers or goods and many of the passengers carried may not be engaged in any matter of commerce. … 82… In R v Smithers; Ex parte Benson (1912) 16 CLR 99 at 118, Higgins J draws a contrast, in reference to the movement of persons from one State to another, between, on the one hand, school children returning from holidays and friends visiting friends, and, on the other hand, commercial travellers returning to their warehouses. Notwithstanding the addition, in s 92, of the word “intercourse” to the words “trade” and “commerce”, I am not disposed to think that there is much covered by the word “intercourse” that falls outside the commerce power. Actual movement of persons or goods among the States will, I should imagine, be regarded as enough here as it is in America. See Covington & Cincinnati Bridge Co v Kentucky 154 US 204; 38 Law Ed 962 (1893); Caminetti v United States 242 US 470; 61 Law Ed 442 (1917); United States v Hill 248 US 420 at 423 [63 Law Ed 337 at 339] (1919). Probably, too, it will be taken to extend to acts and transactions involving such movement. But this view is part and parcel of a more general interpretation or understanding of the conception of inter-State commerce under which the place given to the carriage of goods and persons, transportation is anything but subsidiary. That is to say, as it is inseparable from the movement of things and people, it cannot be regarded as something which falls within the power only because it is ancillary or auxiliary, incidental or conducive to the essential object of the power, as perhaps might be the case if the inter-State buying and selling of commodities were regarded as the exclusive object. … [After examining US cases which held that transportation is central to the conception of commerce, his Honour continued:] 83 I shall act upon the opinion that, 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. … [His Honour held the provisions providing for inter-State air services were within the commerce power. After also holding that s 122 of the Constitution supported the provisions relating to territorial air services, he held that s 92 invalidated the interstate monopoly provisions contained in Part IV and continued to consider the severability of that Part.] 92 The other and more important question is whether Part IV, as a whole, can be severed from the rest of the Airlines Act. It is said on the part of the plaintiffs that it contains provisions indispensable to the conception upon which the statute is based. To authorize the establishment of an airline service to operate as a monopoly is one thing, to authorize one to compete in air transport is another. Accordingly, it is said, the invalidity of Part IV changes the character of the measure. Further, it is pointed out that subs (2) of s 19, to which reference was made in the earlier part of this judgment, is linked with Part IV. It imposes upon the Commission the duty of exercising its powers of establishing, maintaining and operating airline services as fully and adequately as may be necessary to satisfy the need for such services: compare the definition in s 4 of “adequate airline service.” Reliance is placed upon this provision as itself contemplating an exclusive service and as measuring the Commission’s duty on that assumption. These considerations are, no doubt, important and, prior to the enactment of s 15A of the Acts Interpretation Act 1901–1941, they might have proved decisive. But that provision has, in effect, introduced a rule of construction whereby unless an intention affirmatively appears to the contrary, the provisions of a statute are to be taken as independent of one another and not 372

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Airlines Case cont. interdependent. … As a practical conclusion, it comes back to the manner in which the intention of the legislature is to be ascertained, that is to say, the presumptions to be made. My view, which I repeat, is that such severability clauses “establish a presumption in favour of the independence, one from another, of the various provisions of an enactment, to which effect should be given unless some positive indication of interdependence appears from the text, context, content or subject matter of the provisions” (Fraser Henleins Pty Ltd v Cody; Crowther v Cody (1945) 70 CLR at 127). … 93 In the present case the arrangement and text of the enactment appear to me to support, rather than weaken, the presumption that the main provisions are, so to speak, to stand upon their own feet in a question of ultra vires. No doubt if Division 2 of Part II, dealing as it does with the powers, functions and duties of the Commission, were void the whole Act would collapse. But it by no means follows that provisions separated in the arrangement of the Act and logically consequential in operation upon Part II are indispensable to Part II itself. Part II is entitled “Limitations in respect of Airline Services” and is drafted as belonging to a distinct subject matter. It is a gratuitous assumption that Parliament would not have a governmental airline unless it were a monopoly. The basis for such an assumption is found rather in the business inferences favoured in active and practical pursuits than in the considerations affecting the adjustment of policies to constitutional exigencies. The draftsman of the Airlines Act, whatever may have been in the minds of the authors, seems to have been at pains in the formal structure of the Act to give it the appearance of separability. The argument from s 19(2) is, I think, fallacious. Doubtless it imposes a duty upon the Commission to provide a service adequate to all the traffic. The performance of the duty would at the same time operate to fulfil the conditions of s 46 or s 47. But no inference can be drawn that, but for ss 46 and 47, s 19(2) would not have been adopted. There is in my opinion no sufficient ground for saying that Part IV is inseverable. [His Honour also concluded that severing Part IV did not hinder the provisions relating to territories as these did not affect inter-State services] … 94 It follows that s 46(2) and s 47(b) are capable of full operation without touching traffic protected by s 92. I think, therefore, that they should be regarded as unaffected by the invalidity of s 46(1) and s 47(a). I am, therefore, of opinion that Part IV is to this extent internally severable. But, even if it were wholly invalid, it would not, in my opinion, bring down the rest of the Act. [Latham CJ, Rich, Starke and Williams JJ delivered judgments to the same effect.]

[5.50]

1.

Notes&Questions The Acts Interpretation Act 1901 (Cth), s 15A, which has remained essentially unchanged since it was introduced in 1930, provides: Every Act shall be read and construed subject to the Constitution, and so as not to exceed the legislative power of the Commonwealth, to the intent that where any enactment thereof would, but for this section, have been construed as being in excess of that power, it shall nevertheless be a valid enactment to the extent to which it is not in excess of that power.

There are equivalent provisions in all States; eg, the Interpretation Act 1987 (NSW), s 31. 2.

Would the gratuitous movement of persons or goods across a State border for no commercial purpose whatever constitute trade or commerce “among the States”?

3.

Is the crossing of a State border necessary to constitute “trade and commerce among the States”? In Attorney-General (WA) v Australian National Airlines Commission (1976) 138 CLR 492 at 529, Murphy J observed: [5.50]

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“Trade and commerce … among the States” is a comprehensive phrase and should not be construed narrowly. Although usually abbreviated to “interstate trade and commerce”, it means trade and commerce which concerns more than one State (Gibbons v Ogden 22 US 1 (1824)).

In HC Sleigh Ltd v South Australia (1977) 136 CLR 475, the High Court held that a refinery exchange scheme between petroleum producers, which involved petroleum distribution in all States but did not require petroleum to be transported across State borders, was not part of “interstate trade and commerce”: see, especially at 506–507 per Mason J. Murphy J disagreed, holding that the arrangements constituted “trade and commerce among the States because they concerned more than one State” (at 528). Which view is preferable? Which view best reflects the current state of the law? Although a transaction may not be one of trade or commerce among the States, it may nevertheless fall within s 51(i) by virtue of the doctrine of implied incidental power. See [5.100] and following.

4.

[5.60] The classic statement of what constitutes trade and commerce was expressed by

Dixon J in the Bank Nationalisation Case (Bank of New South Wales v Commonwealth (1948) 76 CLR 1) and endorsed by the Privy Council on appeal (Commonwealth v Bank of New South Wales [1950] AC 235 at 303). His Honour said (at 381–382): I cannot think that the essential content of the expression “trade commerce and intercourse” in s 92 is any less than is included in the conception of commerce in the modern American view of the commerce power. I am not speaking of the spread of that power over an immense field of activities that are incident to commerce. It is the central conception expressed in the word to which I refer. It covers intangibles as well as the movement of goods and persons. The supply of gas and the transmission of electric current may be considered only an obvious extension of the movement of physical goods. But it covers communication. The telegraph, the telephone, the wireless may be the means employed. It includes broadcasting and, no doubt, it will take in television. In principle there is no reason to exclude visual signals. The conception covers, in the United States, the business of press agencies and the transmission of all intelligence, whether for gain or not. Transportation, traffic, movement, transfer, interchange, communication, are words which perhaps together embrace an idea which is dominant in the conception of what the commerce clause requires. But to confine the subject matter to physical things and persons would be quite out of keeping with all modern developments.

Latham CJ, with whom McTiernan J agreed on this point, had held that, although banking was “an instrument used by trade and commerce”, it was not, in itself, part of trade and commerce: (at 234–240). The other justices disagreed. A non-purposive power [5.70] The “commerce power” is defined by reference to subject matter, not purpose (as the defence power (s 51(vi)) has been held to be). Hence, the power can be exercised for whatever purpose, or with whatever motives, Parliament thinks fit, whether or not they be “commercial”. This was clearly established in Huddart Parker Ltd v Commonwealth (1931) 44 CLR 492, and reaffirmed in Murphyores Inc Pty Ltd v Commonwealth (1976) 136 CLR 1.

Murphyores Inc v Commonwealth [5.80] Murphyores Inc Pty Ltd v Commonwealth (1976) 136 CLR 1 at 18–20 [A regulation enacted pursuant to s 112 of the Customs Act 1901 (Cth) prohibited the exportation of mineral sands unless authorised by the Minister; although it did not prohibit the actual mining of these sands. Such authorisation was withheld pending the outcome of an environmental inquiry. The plaintiffs, who held State leases to mine mineral sands on Fraser Island, challenged the validity of the prohibition, which was upheld by a unanimous High Court.] 374

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Murphyores Inc v Commonwealth cont. Mason J: 18 The power conferred by s 51(i) enables the Parliament to prohibit, regulate and control the importation and exportation of 19 goods, matters which lie at the heart of trade and commerce with other countries. … 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: see Huddart Parker Ltd v Commonwealth (1931) 44 CLR 492; Australian National Airways Pty Ltd v Commonwealth (1945) 71 CLR 29. 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. … 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 characterizing the law. See, eg, the cases on the defence power dealing with the National Security (Economic Organization) Regulations (Shrimpton v Commonwealth (1945) 69 CLR 613; Dawson v Commonwealth (1946) 73 CLR 157). The point here is that by imposing a conditional prohibition on exportation, a prohibition which may be relaxed according to the 20 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 … [His Honour then referred to Huddart Parker in which the court upheld the validity, pursuant to s 51(i) of s 3 of the Transport Workers Act 1928–1929 which authorised a regulation requiring that, in the employment of waterside workers for overseas and inter-State vessels, priority should be given to persons who were members of the Waterside Workers’ Federation. The industrial relations purposes of this section did not negate validity. He quoted from the judgment of Dixon J (with whom Rich J agreed) said (at 515–516)]: Once the [legislative] power over the matter is established, it becomes irrelevant how, or upon what grounds, or for what motives it is exercised … It is true that the provision adopts a description of the persons who are to be so preferred which has no apparent relation to any characteristic of inter-State or overseas commerce. No doubt it is also true that such a description was adopted because of the industrial consequences of requiring preference to members of an organization bound by an award. But these features of the law do not appear to me to deprive it of its character of a law with respect to trade and commerce with other countries and among the States. It obtains that character from the circumstance that 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.

[5.90] Although legally well established, the principle that legislative motive is irrelevant in

the characterisation of non-purposive powers has been politically controversial, as the Constitutional Commission’s Distribution of Powers Advisory Committee noted in 1986 at [21]-[23]. Concern was expressed that the approach of the High Court “opens a large area of indirect control for the Commonwealth over matters that do not come within its powers directly to regulate. To some this represents a substantial and unacceptable interference with the exercise of State responsibility (at [21]).” In its Report to the Commission, the Committee [5.90]

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decided against the introduction of a purposive criterion in “subject matter powers”: Report (6 June 1987), pp 4-11. See J Stellios, The High Court and the Constitution (6th ed, Federation Press, Sydney, 2015), pp 37-40. Incidental power [5.100] It is a general principle of the common law that “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”: D’Emden v Pedder (1904) 1 CLR 91 at 110. This applies both to private powers, such as those granted in wills and deeds, and to public powers. Unlike the express incidental power conferred by s 51(xxxix) of the Constitution, which is a purely legislative power, the doctrine of implied incidental power extends to executive and judicial powers, as well as legislative powers. The High Court has frequently re-affirmed the doctrine of implied incidental power, and has established that, at least insofar as legislative power is concerned, to bring a law within its scope, “it is enough that the provision is appropriate to effectuate the exercise of the power; one is not confined to what is necessary for the effective exercise of the power”: Nationwide News Pty Ltd v Wills (1992) 177 CLR 1 at 27 per Mason CJ. (Emphasis added.) Most litigation regarding Constitutions 51(i) has arisen in regard to its implied incidental power, the principal issues being the extent to which Constitutions 51(i) enables the Commonwealth Parliament to regulate intrastate trade and commerce, and how far the Commonwealth Parliament can regulate matters ancillary to – whether antecedent or subsequent – to interstate or foreign trade and commerce, such as for example the production of goods for export. Intrastate trade and commerce [5.110] The Commonwealth’s power to regulate intrastate trade and commerce on the

ground that it is so interconnected, or intermingled, with interstate or foreign trade and commerce was first directly considered in R v Burgess; Ex parte Henry (1936) 55 CLR 608.

R v Burgess; Ex parte Henry [5.120] R v Burgess; Ex parte Henry (1936) 55 CLR 608 at 627–677 [An unlicensed pilot was prosecuted for flying, within NSW, in contravention of reg 6 of the Air Navigation Regulations 1921 (Cth), which prohibited an unlicensed person from flying an aircraft “within the limits of the Commonwealth.” He challenged the constitutional validity of the regulation. The High Court unanimously held that it fell beyond the Commonwealth’s power under s 51(i) of the Constitution.] Latham CJ: 627 If the Commonwealth Parliament has a general power to legislate with respect to air navigation there is no doubt as to the validity of reg 6. … The only substantial argument advanced in favour of the affirmative proposition was that if, as was not denied, the Commonwealth Parliament had power to legislate with respect to aviation in so far as it fell within the subject of trade and commerce with other countries and among the States (Constitution, s 51(i)), the Parliament must also have power to protect what may be called inter-State and foreign aviation from interference and to secure the safety of those taking part in it. Uniform rules designed to secure the airworthiness of aircraft and the competency of pilots, and uniform flying rules as to flight, the passing of aircraft in flight, and in particular ascent from and descent to aerodromes are clearly 628 desirable in the interests of all who use the air for flying. If the rules, eg, for landing upon an aerodrome, are not uniform, so that one pilot lands in a clockwise direction while another pilot, in the same place, obeying another set of rules, lands in an anti-clockwise direction, there is very grave risk of serious accident. Upon these and similar considerations the argument is based that in order to deal effectively with the 376

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R v Burgess; Ex parte Henry cont. subject of aircraft flying between the States or between Australia and other countries the Commonwealth Parliament must also have the power to deal with aircraft flying only within the limits of one State which use, as a matter of absolute necessity, the same air, and as a matter of practical necessity, the same aerodromes. The illustrations which have been given … might well be used to support the contention that it is wise or expedient that there should be a single control of this subject matter. Considerations of wisdom or expediency cannot, however, control the natural construction of statutory language. The Constitution gives to the Commonwealth Parliament power over inter-State and foreign trade and commerce and does not give to it power over intra-State trade and commerce, although these subjects are obviously in many respects very difficult to separate from each other. On several occasions the argument has been pressed upon this court that, where inter-State or foreign and intra-State maritime trade and commerce are so intermingled that it is practically essential to control all of them as one subject matter, the Commonwealth Parliament has power under sec 51(i) and sec 98 of the Constitution to deal with intra-State navigation and shipping. … This argument, however, has always been rejected by the court. Although foreign and inter-State trade and commerce may be closely associated with intra-State trade and commerce, the court has uniformly held that the distinction drawn by the Constitution must be fully recognized, and that the power to deal with the former subject does not involve an incidental 629 power to deal with the latter subject. It is true that in the United States of America a similar contention has been approved by the Supreme Court in such cases as Southern Railway Co v United States 222 US 20; 56 Law Ed 72 (1911), where the court found that there was such a close or direct relation or connection between the inter-State and intra-State traffic when moving over the same railroad “as to make it certain that the safety of the inter-State traffic and of those who are employed in its movement will be promoted in a real or substantial sense by applying the requirements of these (Federal) acts (which required the installation of certain safety appliances) to vehicles used in moving the traffic which is intra-State as well as to those used in moving that which is inter-State” 222 US at 26; 56 Law Ed at 74 (1911). The decisions of this court, however, have definitely declined to adopt such a principle, and have therefore left the problem which is indicated by the illustrations above given and the quotation above made to be solved by some form of co-operation between the Commonwealth and the States. A new problem would be raised if in any given case it were established by evidence in respect of a particular subject matter that the intermingling of foreign and inter-State trade and commerce with intra-State trade and commerce was such that it was impossible for the Commonwealth Parliament to regulate the former without also directly regulating the latter. No such evidence, however, has been presented in this case, and it will be necessary to deal with such a question only when it is directly raised. [His Honour concluded in this case that the Commonwealth Parliament did not have power to regulate intra-State aviation, even though it had power to regulate inter-State and foreign aviation.] Dixon J: 670 [T]he suggestion has 671 been made that… to regulate inter-State flying effectively air navigation must be controlled as a whole. The inconvenience and difficulty of maintaining the distinction needs no demonstration. But the legislative power is to make laws with respect to inter-State commerce, and, under the power, the domestic commerce of a State can be affected only to the extent necessary to make effectual its exercise in relation to commerce among the States. … 672 No one doubts that, like every other legislative power expressly conferred, the power to make laws with respect to trade and commerce with other countries and among the States carries with it legislative authority over whatever is incidental to the subject matter to which the power is addressed. Everything that is incidental to the main purpose of a power is contained within the grant. … The express limitation of the subject matter of the power to commerce with other countries and among the States compels a distinction however artificial it may appear and whatever interdependence may be discovered between the branches into which the Constitution divides trade and commerce. This express limitation must be maintained no less steadily in determining what is incidental to the power than in defining its main purpose. Evatt and McTiernan JJ: 677 It is impossible to accept the theory of the Commonwealth that its power to legislate with respect to inter-State trade necessarily extends to all aircraft engaged solely in [5.120]

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R v Burgess; Ex parte Henry cont. intra-State trade, by reason of the possible “commingling,” in air routes and airports, of the aircraft proceeding intra-State with the aircraft proceeding inter-State. … Moreover, the rejection of the “commingling” theory does not deny that there may be occasions when parts of intra-State aviation will be seen to occupy so direct and proximate a relationship to inter-State aviation that the agents and instruments of the former will be drawn within the ambit of the Federal power, for otherwise the particular Commonwealth regulation of inter-State commerce would be entirely frustrated and nullified. But this does not mean that the Commonwealth Parliament is legislating with respect to intra-State trade but only that legislation with respect to inter-State trade may operate in respect of or against persons, matters and things which, though not themselves directly involved in inter-State trade, are brought into a sufficiently proximate relationship with such trade.

[5.130]

1.

Notes&Questions

Is the reasoning of the court consistent with the doctrine of incidental power noted above? See Stellios (Zines, 6th ed, 2015), pp 87-88.

2.

Is the reasoning of Dixon J (at 672) consistent with the High Court’s rejection of the doctrine of reserved State powers in the Engineers’ Case (1920) 28 CLR 129? The next major consideration of the Commonwealth’s power over intrastate trade and commerce occurred in Airlines of NSW (No 2).

Airlines of NSW v NSW (No 2) [5.140] Airlines of NSW Pty Ltd v New South Wales (No 2) (1965) 113 CLR 54 at 77–95, 84–117 [Regulation 6(1)(f), enacted in 1964, made the Air Navigation Regulations (Cth) applicable to intrastate air navigation. Regulation 198 prohibited the use of an aircraft in regular public transport operations except pursuant to a licence issued by the Director-General of Civil Aviation. When considering an application for a licence to operate an intrastate service, reg 199(4) required the Director-General to have regard to the “safety, regularity and efficiency of air navigation and to no other matters.” Regulation 200B provided that “an airline licence authorizes the conduct of operations in accordance with the provisions of the licence”, subject to the Act and Regulations and to other Commonwealth laws. The plaintiff, an unsuccessful applicant for a licence to carry on commercial air operations between Sydney and Dubbo (ie intra-State), challenged the validity of the regulations. The court upheld the validity of regs 198 and 199 (Taylor J dissenting), but unanimously held reg 200B invalid insofar as it applied to intra-State air navigation.] Barwick CJ: 77 On the one hand, the plaintiff and the Commonwealth, by their submissions, in substance, though perhaps not in terms, claimed that by reason of the provisions of the Chicago Convention, its width, the complexity and range of the matters dealt with by its annexes, and by reason of the extent to which air operations in Australia have become intermingled or, as it was put, “integrated”, so that the distinction between intra-State air navigation and inter-State air navigation or, expressed in terms of trade and commerce, between intra-State and inter-State trade and commerce so far as carried on by means of air transport, had become in a practical sense impossible to maintain, the Commonwealth now had plenary power with respect to intra-State commercial air transport as being one aspect of intra-State air navigation, and of intra-State trade and commerce. This proposition so far as it is placed upon the power given by s 51(i) is demonstrably insupportable. It is a claim that the Commonwealth has in some circumstances power to make laws with respect to some aspects of intra-State trade and commerce as themselves topics of legislative power. But the Commonwealth has not and, without constitutional amendment, cannot obtain such legislative power with respect to any aspect of such trade and commerce, including intra-State commercial air transport as an aspect of intra-State air navigation. No so-called “integration” of inter-State and 378

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Airlines of NSW v NSW (No 2) cont. intra-State air navigation or air transport, commercial or otherwise, no intermingling or commingling of the two to any degree, however “complete”, can enlarge the subject matter of Commonwealth legislative power in the relevant field. … This Court has never favoured, in relation to Commonwealth power, the more extensive view of the commerce power under the Constitution of Congress which has at 78 times found expression in decisions of the Supreme Court of the United States. To say this, however, is not to deny that there are occasions – and the safety procedures designed to make inter-State and foreign trade and commerce, as carried on by air transport, secure, are a ready instance – when it can be no objection to the validity of the Commonwealth law that it operates to include in its sweep intra-State activities, occasions when, for example, the particular subject matter of the law and the circumstances surrounding its operation require that if the Commonwealth law is to be effective as to inter-State or foreign trade and commerce that law must operate indifferently over the whole area of the relevant activity, whether it be intra-State or inter-State. But this involves no change in the subject matter of Commonwealth power. The power is not enlarged by circumstance though what may be validly done in its exercise may be more extensive because of the factual situation. Some decisions of the Supreme Court of the United States on close examination really place the matter in relation to the commerce power of the Congress, no higher. The total validity of a law which operates on more than inter-State or foreign trade and commerce and which is sought to be justified by reference to s 51(i) of the Constitution, will be determined by resolving the question whether the law as so operating is in substance a law with respect to inter-State or foreign trade. This is indicated in various decisions of this Court and very clearly by Dixon CJ in Wragg v State of New South Wales (1953) 88 CLR 353 where his Honour says: The distinction which is drawn between inter-State trade and the domestic trade of a State for the purpose of the power conferred upon the Parliament by s 51(i) to make laws with respect to trade and commerce with other countries and among the States may well be considered artificial and unsuitable to modern times. But it is a distinction adopted by the Constitution and it must be observed however much inter-dependence may now exist between the two divisions of trade and commerce which the Constitution thus distinguishes. A legislative power, however, with respect to any subject matter contains within itself authority over whatever is incidental to the subject matter of the power and enables the legislature to include within laws made in pursuance of the power provisions which can only be justified as ancillary or incidental. 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 79 be maintained. Its existence makes impossible any operation of the incidental power which would obliterate the distinction. (at 385, 386) … On the other hand, the defendants in developing their submissions appeared to me to have been prone to resurrect the exploded view of the so-called reserve powers of the State and to have approached the questions of Commonwealth power and of inconsistency by first laying emphasis on the interests of the State which its laws were designed to effect and pointing out how different those interests or purposes were from any which the Commonwealth had to advance in the present connexion. But the nature and extent of State power or of the interests or purposes it may legitimately seek to advance or to protect by its laws do not qualify in any respect the nature or extent of Commonwealth power. On the contrary, the extent of that power is to be found by construing the language in which power has been granted to the Commonwealth by the Constitution without attempting to restrain that construction because of the effect it would have upon State power. … 92 The power given by s 51(i) includes power not merely to protect but to foster and encourage inter-State and foreign trade and commerce. Thus, in relation to inter-State and foreign commercial air transport, both as itself commerce and as a vehicle for commerce, the power extends to the making of laws both to secure its safety and to encourage its growth. The plaintiff placed before the Court a great deal of evidence descriptive of the use and control of aerodromes, flight paths, controlled air apace, navigational aids, systems of communication and a number of other matters from which the clear conclusion must be drawn that the safety of air operations in Australia does not admit of any distinction being drawn between aircraft engaged in [5.140]

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Airlines of NSW v NSW (No 2) cont. intra-State and those in inter-State or international air operations in connexion with all those matters which go to make up what I can compendiously call safety precautions and procedures … [A]ll air operations irrespective of destination or of their particular nature must be subject to the same control if the air is to be safe for inter-State and foreign commercial air transport: and, if inter-State and international commercial air traffic is to be encouraged more than 93 minimal standards of safety are required. Consideration of these factors coupled with the extreme consequences of air accidents leads also to the conclusion that the range of precautions to prevent such accidents must be extremely extensive. In addition, the timely and reliable arrival of passengers and goods carried by air is a potent factor in the development of inter-State and foreign commercial air transport. Thus, the efficiency and regularity with which air operations are conducted in Australia have two aspects in relation to inter-State and foreign trade and commerce carried on by air. Efficiency in maintenance of aircraft on the ground and in their operation in the air bears directly upon the safety of the air operation itself and also upon the likelihood of the maintenance of schedules. The regularity of air operations, in the sense of conformity to the requisite procedures, clearly conduces to air safety. So also does the maintenance of schedules; … But as well, such efficiency and regularity is an encouragement to the development of inter-State and foreign commercial air transport. … It is thus in my opinion within the competence of the Commonwealth under s 51(i) to make laws to secure and promote the safety of the air, including the efficiency and regularity of inter-State and foreign air operations, as a means of protecting and fostering inter-State and foreign trade and commerce. Because of the intrinsic factors connected with flight and of the factual situation in which air navigation takes place in Australia, such laws may validly in my opinion include within their operation intra-State air navigation. I now turn to an aspect of the system of licensing which is to my mind of great importance in this case. It may well be that in some situations, authorities having power to secure the safety 94 of the air will be satisfied to endeavour to achieve their purpose by a series of prohibitions, either absolute or qualified. But the view may reasonably be held that because of the high penalties to be paid for unsafe or inefficient flight and of the discouragement to commerce of air accidents and delays, it is not enough to rely upon a series of substantive rules or prohibitions even though severe penalties are provided. Although the safety rules and procedure made and laid down with respect to air navigation may be most detailed and cover as many situations as can be conceived as likely to arise, there must remain a substantial area within which the well-intentioned judgment of the individual airline operator and his capacity as such will be at least important if not at times critical to the safety, efficiency and regularity of the air operations. In Div 2 of Pt XIII will be found a number of instances in which matters of safety, mostly matters of degree, are left to the judgment of the airline operator. The standard of selection of personnel which carry on, and of the organization which supports, the air operations, the will, as well as the ability to observe the Regulations, are all factors which directly and intimately bear on the safety of the air operations of the operator, and therefore upon all the air operations upon which those operations inevitably have an impact. The marshalling of all those various elements in the interest of the safety of the air is effected by the system of licensing, in which the suitability of the operator as well as that of the aircraft for use by him on the specified routes is considered from the point of view of the safety, efficiency and regularity of air navigation generally. The system of licensing under Pt XIII of the Regulations is thus, in my opinion, itself a substantial safety procedure, and not merely a means of ensuring the observance of the other substantial safety rules and procedures which the Regulations lay down. Because of the inevitable impact of unsafe, inefficient or irregular air operations of an intra-State airline operator upon the safety of the air for inter-State and foreign trade and commerce by air, and upon the development of that trade and commerce, the Commonwealth system of licensing, as itself a safety procedure as well as being a means of ensuring observance of other safety measures, in my opinion, can validly include in its operation intra-State commercial air transport operations and operators. A prohibition coupled with a licensing system in which, except as to inter-State commercial air operations, the Director-General has a discretion to grant or refuse a 380

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Airlines of NSW v NSW (No 2) cont. licence, having in mind only the considerations of the safety, efficiency 95 and regularity of air navigation, is in my opinion clearly within Commonwealth power. … 84 I have now to consider the validity of reg 200B in so far as it is applicable to intra-State air navigation by virtue of reg 6(1)(f). In my opinion this regulation is not a mere redundancy in the licensing system set up by the earlier regulations but does purport to give a quality or effect to an airline licence under the Regulations which but for its presence in the Regulations that licence would not have. Both the terms of other regulations in Pt XIII and of the licence itself, refer to the use of aircraft in public air transport operations. Regulation 200B, so far from purporting merely to authorize the use of specified aircraft in public air transport operations, affects to authorize those operations themselves. I accept the purported operation of reg 200B in relation to intra-State air navigation (reg 6(1)(f)) to be that by virtue of it, the holder of an airline licence in respect of an intra-State public air transport 85 operation would be lawfully entitled to carry on those operations, carrying passengers and goods, on the route and by the use of the aircraft specified in the Commonwealth licence notwithstanding any State law which would otherwise prevent him doing so. … But in my opinion, neither the external affairs power, nor s 51(i) will support reg 200B with such an operation in relation to intra-State commercial air transport. … 88 It is one thing to say that the safety of inter-State 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 authorization 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 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. Kitto J: 115 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 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. But at least it is a legal question, a question of ascertaining the true character of the law by a consideration of what it does “in the way of changing or creating or destroying duties or rights or powers”: South Australia v Commonwealth (1942) 65 CLR 373 at 424. It is the question the Constitution in terms presents. 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, eg, 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, eg 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. [5.140]

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Airlines of NSW v NSW (No 2) cont. 116 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 emphasized 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. Moreover it must be kept in mind that while many examples of air navigation are within federal legislative power because they are themselves a form of commerce with other countries or among the States or because they are carried on within or into or out of Territories of the Commonwealth, or because they use as aerodromes places acquired by the Commonwealth for public purposes, many other examples of air navigation may be within federal legislative power because the purposes with which they are carried on are purposes incidental to matters over which such power extends. Purposes incidental to defence, or to postal services, or to the conduct of the public business of the Commonwealth (eg, the conveyance of the Governor-General or of Ministers in the discharge of their official functions) provide obvious illustrations. It is probably true that there is no head of federal power to which the flying of aircraft may not be incidental, eg, the use of aircraft by the Commonwealth Banking Corporation may no doubt be made a subject of federal legislation under s 51(xiii) of the Constitution. 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 117 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 intra-State 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.

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Notes&Questions

1.

Is the court’s decision upholding regs 198 and 199 insofar as they apply to intrastate air operations compatible with the observations of Dixon CJ in Wragg v New South Wales, quoted by Barwick CJ?

2.

What is the constitutional basis for the distinction, drawn most sharply by Kitto J, between safety and “merely consequential” matters, such as financial considerations?

3.

Is that distinction consistent with the Commonwealth’s power, acknowledged by Barwick CJ, not merely to protect, but also to “foster and encourage” interstate and foreign trade and commerce?

4.

In discussing this case before a Senate Committee in May 1968, Professor Geoffrey Sawer commented (at 87-88):

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[I]f the Court had adopted an approach like that of the United States Supreme Court, it would have asked questions like these: How many passengers go directly on from Dubbo-Sydney through interstate or overseas? How much freight do these airlines carry directly in transit from interstate or overseas? Where did the aeroplanes come from? Where does the fuel come from? What are the organic inter-relations between the companies which carry on the air services concerned? On tests of that kind inevitably the answer must have been given that the Sydney-Dubbo route was part of interstate trade. By rejecting that kind of approach the High Court has recently, in its modern form, reaffirmed earlier attitudes which give the interstate trade concept a very narrow meaning as a basis for Commonwealth powers. Senate Select Committee on Off-shore Petroleum Resources, Report: Vol 2: Minutes of Evidence. Part 1 (December 1971, Cth Parliamentary Paper No 201A/1971), pp 87-88 (17 May 1968).

5.

Would Airlines of NSW (No 2) apply by analogy to roads?

6.

The Commonwealth could now regulate the intrastate air operations of a trading corporation like Airlines of New South Wales Pty Ltd pursuant to s 51(xx) of the Constitution; reg 200B would be valid if confined to s 51(xx) corporations: see Stellios (Zines, 6th ed, 2015), p 99. The High Court had further occasion to consider the Commonwealth’s power to regulate intrastate trade and commerce in the Western Australian Airlines Case.

Western Australian Airlines Case [5.160] Attorney-General (WA) v Australian National Airlines Commission (the Western Australian Airlines Case) (1976) 138 CLR 492 at 505–516, 499–531, 523–525 Stephen J: 505 It has long been recognized that, in exercise of its powers with respect to interstate trade and commerce and of its power to make laws for the government of any territory, the Commonwealth may establish an airline service authorized to carry passengers and goods on interstate routes and on routes to, from and within territories (Australian National Airways Pty Ltd v Commonwealth (1945) 71 CLR 29). … Except where by State legislation power has been referred to the Commonwealth under s 51(xxxvii) the Commission has not 506 operated on intrastate routes and until amended in 1973 the Australian National Airlines Act 1945 did not expressly authorize the Commission to operate generally on such routes. In 1973 the Act was amended and by s 19B the Commission is expressly authorized to operate intrastate services in certain circumstances. The constitutional validity of this amendment is the principal, although not the sole, issue in these proceedings. The Commission seeks to expand its airline services in the western areas of Australia by providing a weekly flight from Darwin [in the Northern Territory] to Perth [in the State of Western Australia] and return, picking up and putting down passengers and goods at Port Hedland [in Western Australia] on each leg of this round flight. … Elements of movement both between a State and a Territory and also wholly within one State are thus involved. The Commission relies upon s 19B of the Act as validly authorizing it to provide this service; some reliance is also placed upon s 19H. The source of the legislative power validly to enact these two sections is said to be found in s 122 of the Constitution, alternatively in s 51(i), in each case recourse also being had to the incidental power conferred by s 51(xxxix). [The Australian National Airlines Act 1945 (Cth) ss 19 and 19B provided: 19(1) The functions of the Commission are – (a) to transport passengers and goods for reward by air between prescribed places; (b) to engage in other activities to the extent that they are within the limits of the powers of the Commission under a provision of this Act other than this section; … and the Commission shall carry on business for the purpose of performing those functions. [5.160]

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Western Australian Airlines Case cont. (2) For the purposes of sub-section (1), passengers or goods are transported between prescribed places if they are transported – (a) between a place in a State and a place in another State; (b) between a place in a Territory and a place in Australia outside that Territory; (c) between a place in a Territory and another place in that Territory; or (d) between a place in Australia and a place outside Australia, being places between which the provision of air transport by the Commission is approved by the Minister. 19B(1) The Commission may, to the extent provided by sub-section (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.] … 508 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? The authorities in this Court on the scope of that implied incidental power which attaches to each specific grant of power as to subject matter provide, in my view, a clear negative answer to the question posed. It is primarily to decisions upon s 51(i) that attention must be directed since, as Dixon CJ pointed out in Victoria v Commonwealth (1957) 99 CLR 575 at 614, the nature and subject of the 509 particular head of power in question will be critical in determining what is incidental to that particular power – and see Federal Commissioner of Taxation v Official Liquidator of EO Farley Ltd, per Dixon J (1940) 63 CLR 278 at 316. … In R v Burgess; Ex parte Henry, Dixon J said (1936) 55 CLR 608 at 672, that “the express limitation of the subject matter of the power to commerce with other countries and among the States compels a distinction however artificial it may appear and whatever interdependence may be discovered between the branches into which the Constitution divides trade and commerce”. In Wragg v New South Wales (1953) 88 CLR 353 at 386, Dixon CJ again referred to that distinction which, he said, must be observed and maintained in the application, to s 51(i), of the doctrine of implied incidental power; that distinction made “impossible any operation of the incidental power which would obliterate the distinction”. In Redfern v Dunlop Rubber Australia Ltd (1964) 110 CLR 194 at 220, Menzies J referred to the distinction as having always been insisted upon and in Airlines of New South Wales Pty Ltd v New South Wales (No 2) (1965) 113 CLR 54 at 76–79, Barwick CJ affirmed this view, citing at length from the judgment of Dixon CJ in Wragg’s Case (1953) 88 CLR at 385–386. 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. In R v Burgess; Ex parte Henr, Latham CJ said that merely to discover that it was expedient to include intrastate trade within the ambit of Commonwealth control would not bring it within the incidental power under s 51(i), although if it were “impossible” to regulate some aspect of interstate trade without regulating intrastate trade that might call for a different conclusion (1936) 55 CLR 608 at 628–629. Dixon J said that intrastate trade could be affected, under the Commonwealth’s power, “only to the extent necessary to make effectual its exercise in relation to commerce among the States” (1936) 55 CLR 608 at 671. In their joint judgment Evatt and McTiernan JJ 510 spoke of the need for “so direct and proximate a relationship” of a part of intrastate aviation to interstate aviation as would bring the former into such “a sufficiently proximate relationship” as would justify control of it as incidental to the power under s 51(i) (1936) 55 CLR 608 at 677. In O’Sullivan v Noarlunga Meat Ltd 384

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Western Australian Airlines Case cont. (1954) 92 CLR 565 at 597, Fullagar J, the Chief Justice and Kitto J concurring, followed this Court in D’Emden v Pedder (1904) 1 CLR 91 in adopting, as a criterion of the extent of grants of legislative power, what had been said by Marshall CJ in McCulloch v Maryland 4 Wheat 316; 4 Law Ed 579 (1819); every power and every control the denial of which would render the grant itself ineffective was, without special mention, to be taken to be included in the power or control expressly granted. In Airlines of New South Wales Pty Ltd v New South Wales (No 2) (1965) 113 CLR 54 at 78, Barwick CJ, having affirmed earlier rejection of the notion that any commingling of the two divisions of trade and commerce could enlarge the subject matter of Commonwealth legislative power, said that nevertheless Commonwealth power might include within its sweep intrastate trade and commerce if that were necessary for the Commonwealth law to be “effective” as to interstate trade. The Chief Justice went on to say that the fact that international or interstate carriage by air may profit by, or to a significant degree depend upon, the level of intrastate carriage by air did not warrant the conclusion that the Commonwealth might stimulate and encourage the latter so as to foster the former (at 88). Kitto J drew a distinction between a law protecting from the danger of physical interference an activity within power and one which prevents prejudice to matters merely consequential to such an activity, as for instance the profitability of interstate commercial air navigation (at 115). Only the former, he said, would be within power. Taylor J adopted as a test of extent of power whether its exercise was necessary to the safety and efficiency of interstate air navigation (at 128). Menzies J did likewise (at 142–143); he spoke of power to control intrastate air navigation if “necessary for the effectual control” of interstate air navigation; was it, he asked, “necessary to make effectual” the latter? Windeyer J would have required some imperilling of the safety of interstate air navigation before intrastate air navigation could come within Commonwealth competence (at 155). In the light of the foregoing it is apparent that the permitted exercise of the power conferred by s 19B and which is described in 511 subs (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); nor can the resultant deficiency of power be wholly made good by recourse to s 122, those deficiencies do not lie only in areas related to Commonwealth Territories, where alone s 122 can be called in aid. I accordingly conclude that s 19B is ultra vires the legislative power of the Commonwealth. However it does not therefore wholly fail; s 15A of the Acts Interpretation Act may come to its aid affording it validity over a restricted range of application. Section 19B of the Australian National Airlines Act 1945 is well suited to the application to it of the provisions of s 15A of the Acts Interpretation Act and if those provisions be applied, the section being read down to the extent necessary to bring it within power, it will retain a substantial sphere of operation and will, in my view, apply in its full vigour in relation to territory air services and to air services between a Territory and other parts of Australia. Before stating my reasons for assigning to it this area of application I should deal with the question of the operation of s 15A of the Acts Interpretation Act to the present facts. That this is an appropriate instance for the application of s 15A is apparent from the terms of s 19 and s 19B of the Australian National Airlines Act1945. Section 19(1) of that Act, read in the light of subs (2), defines as a function of the Commission four distinct types of transportation by air and s 19B then empowers the Commission to engage in intrastate transportation by air for the purposes of the efficient, competitive and profitable conduct of its business in respect of this particular function or otherwise as incidental to the carrying on of that business, that is, its business in respect of that function. If the function to which s 19B refers be limited to transportation by air within a Territory and between a Territory and a place in Australia outside that Territory and if, as I will endeavour to show, the effect of s 19B, when so confined, is amply supported by s 122 of the Constitution, a situation is revealed in which s 15A of the Acts Interpretation Act may properly operate to confer pro tanto validity upon s 19B. … [His Honour discussed s 122 of the Constitution and continued (at 513):] When 514 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, l think, to be limited by reference to an [5.160]

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Western Australian Airlines Case cont. implication drawn from the terms of s 51(i) or s 92. … 515 I conclude that s 19B, in empowering the Commission to exercise the power conferred by subs (1) in respect of the Commission’s function under s 19(1)(a), is valid in respect of that part of its function which is confined to intra-Territory transportation and transportation to and from a Territory, referred to in s 19(2)(b) and (c). Section 516 19B is otherwise invalid and the Commission is accordingly not empowered to exercise the power conferred by subs (1) in respect of its function under s 19(1)(a) in respect of that part of its function which extends to interstate transportation and to transportation overseas, referred to in s 19(2)(a) and (d). [Barwick CJ and Gibbs J held that s 19B could not be supported by either s 51(i) or s 122. Murphy J held that it could be supported by both powers. Mason J held that it was supported by s 122 and held it unnecessary to consider s 51(i).] Barwick CJ: 499 I agree with my brother Stephen that there is no power in the Parliament in exercise of the legislative power granted by s 51(i) to authorize acts to be performed by the Commission in the course of intrastate trade. The fact, if it be the fact that the performance of these acts by the interstate carrier by air would conduce to the efficiency, competitiveness and profitability of the interstate activity, would not warrant the conclusion that legislative power to authorize such acts is involved as an incident of the legislative power granted by s 51(i). The submission that the Court should treat economic success of the activity of interstate carriage by air as an object within the legislative power is, in my opinion, unacceptable. … I agree that it is possible by the use of s 15A of the Acts Interpretation Act 1901 (Cth), as amended, to sever from the other functions of the Commission imposed by s 19B of the Act, the function of conducting a territorial air line service. I am prepared to use s 15A in order to apply a distributive operation to s 19B, bearing in mind the way in which the several functions of the Commission are separately described. Thus the operation of s 19B can be confined to the Commission’s function of providing 500 a territorial service. Gibbs J: 502 In my opinion s 51(i) and s 51(xxxix) cannot support the validity of s 19B. It has been held again and again – and in my respectful opinion, correctly held – that s 51(i) recognizes a distinction between interstate trade on the one hand and the domestic trade of the States on the other, and that this distinction 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. It is also established that the incidental power cannot be given an operation that would obliterate the distinction. I need refer only to R v Burgess; Ex parte Henry (1936) 55 CLR 608 at 628, 671–672; and Morgan v Commonwealth (1947) 74 CLR 421 at 452 and to the remarks of Dixon CJ in Wragg v New South Wales (1953) 88 CLR 353 at 385–386. The duty which this Court is called on to perform is plainly pointed out by Kitto J in Airlines of New South Wales Pty Ltd v New South Wales (No 2) (1965) 113 CLR 54 at 115: 503 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. The decision of the Court in that case, in so far as it related to reg 200B of the regulations there under consideration, strongly supports the view that s 19B is not a valid exercise of the power conferred by s 51(i) and s 51(xxxix). Murphy J: 529 The Commerce Power. This is perhaps the greatest legislative power and is at the heart of the federal system. … “Trade and commerce … among the States” is a comprehensive phrase and should not be construed narrowly. … The legislative power was adopted from the United States Constitution. The scope of the Australian power to make laws “with respect to” trade and commerce among the States is at least as wide as, if not wider than, the United States power “to regulate” commerce among the States. The commerce power under our Constitution is not exclusive to the national legislature as it is under the doctrine developed in the United States. There is thus less reason for construing the power narrowly here than there. Yet it has been construed narrowly. … [One] 386

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Western Australian Airlines Case cont. reason is 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. In this case, the reserved power is that over intrastate trade and commerce. The scope of the legislative power with respect to trade and commerce among the States should not be ascertained by assuming a division between interstate and intrastate commerce. Sections 51(i) and 92 of the Constitution make a 530 distinction between trade and commerce among the States and that which is not, but do not make trade and commerce among the States and intrastate trade and commerce mutually exclusive. The Constitution does not mention intrastate trade and commerce and contains nothing which suggests a rigid separation between the two. Almost any act of trade and commerce among the States can be regarded as a series or combination of acts which from another point of view are intrastate commerce. “Commerce among the States must of necessity be commerce with the States …” (Gibbons v Ogden 22 US 1 at 196 [6 Law Ed 23 at 70] (1824)). Even if there were such a division and mutual exclusion, legislative power with respect to trade and commerce among the States and legislative power with respect to intrastate trade and commerce would not be mutually exclusive. … The Commonwealth may override the suggested dividing line, for the words “with respect to” in s 51 and the incidental aspect which is attached to each head of power authorize laws dealing not only with trade and commerce among the States but with intrastate trade and commerce and with acts or transactions which are not trade and commerce, as long as these are with respect to, that is relevant to, trade and commerce among the States. The maintenance of the supposed division and the further insistence (see Wragg v New South Wales (1953) 88 CLR 353) that even the use of the incidental power in s 51(xxxix) cannot obliterate the division, keeps the pre-Engineers’ ghosts walking. This approach minimizes the trade and commerce power and inhibits its use. This legislation … is an authorization of government air transport which meets the stated criteria of connexion with interstate government air transport services. The criteria are obviously connected with protection of the revenues and expenditures of the Commonwealth, as well as with the promotion of trade and commerce among the States. The sections in question authorize intrastate transport for the purposes of efficient competitive and profitable conduct of the interstate transport of the Commission. These criteria adopted by Parliament are well within the scope of the commerce power. It is permissible for Parliament to take account of commercial effects in legislating under the commerce power. It would be as illogical to exclude commercial considerations from 531 the construction of the commerce power as it would be to exclude defence considerations from the defence power (s 51(vi)) or industrial considerations from the industrial power (s 51(xxxv)). I find no basis in the Constitution for the distinction that Kitto J drew between physical and economic effects upon “interstate commercial air navigation” in Airlines of New South Wales v New South Wales (No 2) (1965) 113 CLR 54 at 115. … [Mason J essentially confined his attention to s 122:] Mason J: 523 In the context of a power so all-embracing as a power to legislate for the government of a Territory, in its application to the provision of an airline service between the Territory and a State, the notion of what is reasonably necessary to the fulfilment of the legislative power cannot be confined to that which is physical, excluding all that which is economic. No distinction can or should be drawn between what is physically necessary and what is economically necessary. In essence the conception of what is necessary or reasonably necessary includes all those factors which must be accounted for or satisfied so as to achieve the end in view. Physical and economic considerations cannot be divorced or separated one from the other. Thus, in determining whether an air service can be provided between points A and B without an intermediate stop at C, it is not merely a matter of ascertaining whether commercial transport aircraft are available which will fly the distance without refuelling at an intermediate point; the inquiry, if it is to have any relevance to practical reality, must have regard to the volume of traffic likely to be available and the economics of operation. In this sense the physical and economic considerations are both relevant and indispensable elements to be taken into account in assessing what is reasonably necessary for the particular end in view. [5.160]

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Western Australian Airlines Case cont. Indeed, these considerations are so interwoven and so complex that the carriage of passengers and goods between intermediate ports of call or between a terminal point and an intermediate port of call should be regarded as incidental to the provision and conduct of an airline service between its terminal points. If the constitutional power extends to the provision of an airline service 524 between two terminal points, as I hold that it does in the instant case, it is incidental to the provision of that service and to the transport of passengers and goods between those ports, to carry passengers and goods between intermediate stopping places and between an intermediate stopping place and a terminal point. Any other view would, I think, pay scant regard to the economic and technical factors which influence the establishment and organization of commercial airline operations. In my opinion s 19B(1) and (2) in authorizing the first defendant to transport passengers and goods by air between places in one State for the purposes of “the efficient, competitive and profitable conduct” of its business between a place in a Territory and a place outside that Territory is a valid exercise of the power conferred by s 122 of the Constitution. The carriage of passengers and cargo between places in the one State on such an airline service makes that airline service more “efficient, competitive and profitable” and is therefore an activity which is reasonably necessary for the fulfilment of the power conferred in its application to the provision of an airline service between a Territory and a State. Moreover, the carriage of passengers and cargo on that airline service otherwise than between its terminal points is, in accordance with the view I have already expressed, incidental in the sense already discussed. The carriage of passengers and cargo between Perth and Port Hedland is therefore authorized by s 19B(1) taken in conjunction with the first and second limbs of s 19B(2); in particular, it is an activity which is “otherwise incidental to the carrying on of that business”, namely the business of transporting passengers and goods for reward by air between prescribed places, within the meaning of s 19(1)(a). The second limb of s 19B(2) is plainly an alternative to the words “for the purposes of the efficient, competitive and profitable conduct of the business of the Commission in respect of its function” under s 19(1)(a). However, the application of s 19B is not in terms limited to the carriage of passengers and goods on an airline service between a Territory and a State, that is, transport operations falling within s 19(2)(b). The application of s 19B extends as well to transport operations between two different States falling within s 19(2)(a). There is then a question whether this application exceeds the inter-State trade and commerce power. It is not a question which I find it necessary to discuss because it is my opinion that, even if this application of s 19B is ultra vires, the operation of the section in relation to transport operations falling within s 19(2)(b) is severable and is 525 saved by s 15A of the Acts Interpretation Act 1901 as amended.

[5.170]

Notes&Questions

1.

Why did four justices consider s 51(i) when no interstate commerce was involved and s 19B could be read down to apply only to intrastate flights in the course of territorial commerce?

2.

Would the outcome on s 51(i) have differed if s 19B(2) had spoken of economic necessity, rather than “the efficient, competitive and profitable conduct” of TAA’s business? See Mason J at 524. Was Murphy J correct in alleging that the majority applied the doctrine of reserved State powers? Would the decision under s 122 have been the same if the Commonwealth had authorised a privately owned airline to operate the relevant routes? See (1976) 138 CLR 492 at 515 per Stephen J, 530 per Murphy J (at 160). Would the case be decided similarly today? See Stellios (Zines 6th ed, 2015), pp 91-92.

3. 4.

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Writing extra-judicially in 1986, Mason J remarked that the High Court’s “refusal to recognise that the economic effect of an activity on interstate trade brings that activity within the reach of the [commerce] power … [is] difficult to accept”, and cited his comments in this case (at 523), in which he supposedly addressed only the territories power: A Mason, “The Role of a Constitutional Court” (1986) 16 Federal Law Review 1 at 17. Two years later, his Honour discussed s 51(i) in greater depth.

The Australian Constitution: 1901–1988 [5.180] A Mason, “The Australian Constitution: 1901–1988” (1988) 62 Australian Law Journal 752 at 755–756 755 Those who assert that the High Court has been responsible for destroying the so-called “federal balance” misconceive what has actually happened. The dramatic change in the relationship between the Commonwealth and the States is largely attributable to the changes in the world outside the courtroom. At Federation, the States were separate communities with their own economies. Interstate trade did not loom so large. But now, with the advent of rapid transportation and communications and modern technology, trade within each State has become intricately integrated with interstate and overseas trade. As a result, the economic concept of interstate trade which might be distinguished in a meaningful way from local interstate trade at the turn of the century has necessarily expanded to 756 embrace activities and transactions formerly having local significance only. However, the High Court, in a series of cases epitomised by the Margarine Cases (Grannall v Marrickville Margarine Pty Ltd (1955) 93 CLR 55 and Beal v Marrickville Margarine Pty Ltd (1966) 114 CLR 283) has applied a narrow and formalistic construction to the trade and commerce power. The Court has construed the concept of interstate trade to cover movement and communications across State borders and contracts calling for interstate delivery down to the first sale by an importer in another State. Yet, the Court has not accepted the view that production generally for interstate trade falls within the power though the Court has conceded that in some circumstances the power might extend to production. Underlying this restrictive and formalistic reading of the interstate trade and commerce power was a concern that if a broader meaning was given to the power it would ultimately have as allencompassing a reach as the commerce clause of the United States Constitution. Under the prevailing doctrine under that Constitution, apparently anything that affects the economy falls within the reach of the commerce power. The discrepancy between the reach of the American and Australian powers might also be partly explained by the fact that Congress lacks other relevant powers given by our Constitution to Parliament, namely, the banking, insurance, industrial property, foreign corporations, trading or financial corporations and arbitration powers. Although the Court’s formal distinction between interstate and intrastate trade might well have been appropriate in an era of localised economies, there is a question whether it is appropriate today. More recently, members of the Court have taken account of the practical effect of legislation in its application to interstate trade and that may perhaps be an indication that in time to come the Court will take account of commercial realities in construing the trade and commerce power. This is not to suggest that the Constitution is a facile instrument which alters its complexion like a chameleon with each change in background. Rather, it is to recognise simply that the Constitution words, or, more accurately, the ideas those words capture, have a different impact in different circumstances. What was within the contemplation of interstate trade in 1901 when the Australian economy was a series of loosely connected local or regional economies was a fairly small group of activities. The reach of the Commonwealth’s power over trade and commerce was accordingly limited. Since then, the logistical barriers between local economies have dissolved with the improvements in transportation and

[5.180]

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The Australian Constitution: 1901–1988 cont. communication and these once separate economies have largely melded into one national economy.

[5.190] While the meaning of interstate trade might not have changed, it may be that its

proper application has. Compare Latham CJ’s comment upon his retirement, 36 years before these remarks of Sir Anthony Mason ((1951-1952) 85 CLR vii at ix), that: The distinction between inter-State and intra-State trade appeared more real in 1900 or 1901 than it does today [1952]. The distinction is largely a distinction upon paper, and not in fact. (Emphasis added.)

On the relevance of economic factors to the ambit of incidental power, see the remarks of Professor Stellios in Zines (6th ed, 2015, p 93): It is possible that some who deny the relevance or sufficiency of economic factors, for the purpose of invoking the incidental area of the commerce power, may confine that principle to laws that operate on intrastate trade as distinct from other activities such as production. For example, Stephen J [in the Western Australian Airlines Case] qualified the constraint he felt by authority to give what he recognised to be a restricted application to the incidental power implied in s 51(i), by adding at 509 “at least where what is in question is possible intrusion into the field of intrastate trade and commerce.” Four views are thus possible regarding economic and commercial factors. They (a) never or rarely provide a sufficient basis for connecting a law with the incidental area of a power; (b) cannot be a sufficient basis in relation to s 51(i), but may be in respect of other powers; (c) can provide a sufficient basis in all cases including those concerning s 51(i) except where the law purports to operate on intrastate trade; and (d) are always a sufficient basis. [5.200] One American case in which economic considerations provided a realistic causal link

between intrastate commerce and interstate commerce was United States v Wrightwood Dairy Co 315 US 110 (1942), a unanimous decision. At issue was the validity of price regulation by the Secretary of Agriculture of milk produced and sold intrastate and which was authorised by the provisions of the Agricultural Marketing Agreement Act 1937 of June 3, 1937, 50 Stat 246, 7 USC §608c. Was this a permissible regulation under the commerce clause of the Constitution? Wrightwood Dairy’s business operated entirely intrastate and it submitted that the statute could not apply to it. It conceded that transactions in milk of a purely intrastate kind operated in competition with milk moving interstate and that if the former were not subject to the regulation, the efficacy of price regulation relating to the latter may well fail. Nevertheless, it submitted, the US commerce clause, which authorized Congress “To regulate commerce …among the several States”, did not permit regulation of purely intra-State milk sales. The Court, however, held otherwise (at 118-119,120-121): Congress plainly has power to regulate the price of milk distributed through the medium of interstate commerce … and it possesses every power needed to make that regulation effective. The commerce power is not confined in its exercise to the regulation of commerce among the states. It extends to those activities intrastate which so affect interstate commerce, or the exertion of the power of Congress over it, as to make regulation of them appropriate means to the attainment of a legitimate end, the effective execution of the granted power to regulate interstate commerce. See McCulloch v Maryland 4 Wheat 316 at 421 (1819). The power of Congress over interstate commerce is plenary and complete in itself, may be exercised to its utmost extent, and acknowledges no limitations other than are prescribed in the Constitution. Gibbons v Ogden 9 Wheat 1 at 196 (1824). It follows that no form of state activity can constitutionally thwart the regulatory power granted by the commerce clause to Congress. 390

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Hence the reach of that power extends to those intrastate activities which in a substantial way interfere with or obstruct the exercise of the granted power. … [120] … [T]he marketing of intrastate milk which competes with that shipped interstate would tend seriously to break down price regulation of the latter. … We conclude that the national power to regulate the price of milk moving interstate … extends to such control over intrastate transactions … as is necessary and appropriate to make the regulation of the interstate commerce effective; and that it includes authority to make like regulations for the marketing of intrastate milk whose sale and competition with the interstate milk affects its price structure so as in turn to affect adversely the Congressional regulation.

In an important conclusion (at 121) the Court added: “It is the effect upon interstate commerce or upon the exercise of the power to regulate it, not the source of the injury which is the criterion of Congressional power.” The Court proceeded to give examples where Congressional regulation was held valid (119-120): commodities inextricably commingled, some of which are moving interstate and some intrastate; the power to regulate safety appliances on railroad cars, whether moving interstate or intrastate; the power to control intrastate rates of a common carrier which affect adversely federal regulation of the performance of its functions as an interstate carrier; the regulation by the Tobacco Inspection Act 7 USCA § 511 of tobacco produced intrastate and destined to consumers within the state as well as without; the regulation of both interstate and intrastate marketing of tobacco under the Agricultural Adjustment Act 7 USCA § 601; competitive practices which are wholly intrastate may be reached by the Sherman Act 15 USCA § 1 because of their injurious effect on interstate commerce; the marketing of a local product in competition with that of a like commodity moving interstate may so interfere with interstate commerce or its regulation as to afford a basis for Congressional regulation of the intrastate activity. It is the effect upon the interstate commerce or its regulation, regardless of the particular form which the competition may take, which is the test of federal power.

Notes&Questions

[5.210]

How would US v Wrightwood Dairy be decided in Australia? Production [5.220] The possible applications of the incidental power to s 51(i) are virtually limitless, and

include matters antecedent and subsequent to interstate and foreign commerce. To what extent, for example, can the Commonwealth regulate the production of commodities to be exported, and to what extent can it regulate the use of imported goods, such as drugs, pornographic films or literature? The leading case, O’Sullivan v Noarlunga Meat Ltd concerns the former question.

O’Sullivan v Noarlunga Meat [5.230] O’Sullivan v Noarlunga Meat Ltd (1954) 92 CLR 565 at 595–598 [The defendant was charged with contravening the Metropolitan and Export Abattoirs Act 1936 (SA), s 52A, which prohibited the use of premises for the purpose of slaughtering stock for export without a licence from the Minister. The defendant did not hold a State licence, but the abattoir was registered under the Commerce (Meat Export) Regulations (Cth). The defendant argued that s 52A was invalid for inconsistency with the Commonwealth regulations, reg 4B of which prohibited the exportation of meat unless (inter alia) an export permit had been granted, while reg 5 required all premises used for the slaughter of meat for export to be registered. [5.230]

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O’Sullivan v Noarlunga Meat cont. The court was equally divided on the question of inconsistency, Fullagar J (with whom Dixon CJ and Kitto J concurred) holding that there was inconsistency. On the interpretation of reg 5, only Fullagar J found it necessary to consider whether s 51(i) empowered the Commonwealth to regulate the slaughter of meat for export.] Fullagar J: 595 The Commonwealth is legislating to ensure that only meat of a certain grade and quality shall be exported, and the law is clearly a law with respect to trade and commerce with other countries. The power given by s 51(i) extends to authorizing the total prohibition of the 596 export of any commodity, and a fortiori it includes a power to prohibit the export of any commodity except upon compliance with prescribed conditions. But the regulations go further than this … [R]eg 5 prohibits the use of premises for slaughter for export unless the premises are registered, and they cannot be registered unless they comply with a large number of prescribed conditions which descend to meticulous detail. The question which emerges is whether the Commonwealth power with respect to trade and commerce with other countries extends to authorizing legislation regulating and controlling the slaughter of meat for export. In my opinion it does so extend. The question obviously tends to open up a wide field of speculation as to the extent of the power in question. But it will be wise, I think, to avoid that field, and to concentrate attention on the particular case before us and the particular commodity with which that case is concerned. It will be wise also, I think, to begin by obtaining as clear a conception as possible of what is meant by the expression “slaughter for export.” It would perhaps have been better if we had had some evidence before us as to Australia’s export trade in meat, and as to the processes involved in the killing and preparation of meat for export and for home consumption respectively. But it seems to me safe to say that Sir Garfield Barwick was entirely right when he said that the 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 597 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. [His Honour then made reference to a distinction which was once drawn in US cases between manufacture and production, on the one hand and “commerce”, a distinction he stated no longer applied so as to exclude the former from regulation by Congress. He continued:] 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 accepted the famous enunciation of the principle by Marshall CJ in M’Culloch v Maryland 4 Wheat 316 at 321–323 [4 Law Ed 579 at 580, 581] (1819), 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 598 control the denial of which would render the grant itself ineffective” (1904) 1 CLR 91(1904) 1 CLR 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 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 392

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O’Sullivan v Noarlunga Meat cont. 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 in the judgment of Fullagar J.]

O’Sullivan v Noarlunga Meat (No 2) [5.240] O’Sullivan v Noarlunga Meat Ltd (No 2) (1956) 94 CLR 367 at 373 [The High Court rejected an application for a certificate under s 74 of the Constitution to enable an appeal to the Privy Council from the previous case on the s 51(i) issue.] Dixon CJ, Williams, Webb and Fullagar JJ (Kitto J agreeing): 373 Needless to say, our decision that it was competent for a law of the Commonwealth to prescribe completely or exhaustively the requirements that are to be imposed for the use of premises for the purpose of slaughtering stock for export was based upon an interpretation of s 51(i). It may be observed that in support of the application for a certificate an exaggerated view of the application of the decision was presented to us. Indeed it was even suggested that as a necessary consequence the commerce power would extend over all production, whenever the goods were intended to go into the flow of inter-State or overseas commerce. As to this it is enough to refer to the express limitation which Fullagar J made in the concluding paragraph of his judgment (1954) 92 CLR 565 at 598.

[5.250]

1. 2.

Notes&Questions

Would this case apply by analogy to Commonwealth regulation of slaughter of meat for export interstate? Could the Commonwealth regulate the industrial relations in an abattoir slaughtering meat for export? Would this be seen as “incidental to an incidental” and thus too remote from the core of s 51(i), as Professorsp;P H Lane suggested in The Australian Federal System (2nd ed, Law Book Co, Sydney, 1979), pp 74, 76? Cf National Labor Relations Board v Jones & Laughlin Steel Corp 301 US 1 (1937); United States v Darby 312 US 100 at 117–122 (1941). Compare the observations of Gleeson CJ, McHugh, Gummow, Kirby, Hayne, Callinan and Heydon JJ in Re Maritime Union of Australia; Ex parte CSL Pacific Shipping Inc (2003) 214 CLR 397 at 413 [36]: It is also well settled that, in the exercise of the trade and commerce power, the Parliament can validly regulate the conduct of persons employed in those activities which form part of trade and commerce with other countries and among the States [5.250]

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(Australian Steamships Ltd v Malcolm (1914) 19 CLR 298 at 329–330; Seamen’s Union of Australia v Utah Development Co (1978) 144 CLR 120 at 138, 152). A ship journeying for reward is in commerce; those who co-operate in the journeying of the ship are in commerce and the wages of those persons and the conditions of their employment relate to that commerce (cf the argument of Sir Garfield Barwick QC in R v Foster; Ex parte Eastern and Australian Steamship Co Ltd (1959) 103 CLR 256 at 264).

3.

Might the same not be said for the incidental activity, such as slaughtering for export? If such reasoning be thought too liberal, as bringing within s 51(i) together with incidental powers industrial matters remote from the rationale for the application of the incidental power recognised in O’Sullivan (1956) 94 CLR 367 – namely, regulating the quality of the commodity to be exported – the power should surely extend at least to those industrial matters which affect the quality of the commodity (such as employees’ health, cleanliness and efficiency). However, as US cases such as Jones & Laughlin have recognised (see especially 301 US 1 at 41 (1937)), other industrial matters may affect the supply of the commodity itself, and regulating the flow of the commodity (eg, by ensuring its maintenance) is surely an equally important rationale for the application of the incidental power. A strike in the place of production may be more deleterious to the export trade than the supply of poor quality goods. For a discussion of s 51(i)’s potential to regulate industrial relations, see D McCann, “First Head Revisited: A Single Industrial Relations System Under the Trade and Commerce Power” (2004) 26 Sydney Law Review 75. McCann rejects the current interpretation of s 51(i) on four grounds (at 97–101) and concludes that: Section 51(i) is a sleeping giant, left unconsidered for too long in times of rapid economic and industrial change. Most commentators now agree that the present construction is unsustainable and unsound. The “artifices of legal formalism” [quoting Sir Anthony Mason (1995)] that permit the narrow view must now be rejected. A flexible, broad, unitary industrial system is in sight (at 106; emphasis added).

Do you agree? Since the Tasmanian Dam Case (1983) 158 CLR 1, the production by a trading corporation of goods intended for sale would fall within s 51(xx): Stellios, (Zines 6th ed, 2015), p 106. Could the Commonwealth regulate the production of a commodity of which only a portion was to be exported? This issue arose indirectly in Swift Australian Co (Pty) Ltd v Boyd Parkinson (1962) 108 CLR 189, where it was argued that the Commerce (Meat Export) Regulations (Cth) applied to an abattoir slaughtering poultry of which only a small proportion was to be exported. A majority of the High Court held that the Commonwealth Regulations did not purport to apply to such an abattoir. Therefore no question of the inconsistency of State law arose and no discussion of the ambit of s 51(i) was necessary. However, Owen J dissented, holding that the Commonwealth Regulations did purport to apply to such an abattoir, and could validly do so pursuant to s 51(i). 4.

Swift Australian Co v Boyd Parkinson [5.260] Swift Australian Co (Pty) Ltd v Boyd Parkinson (1962) 108 CLR 189 at 226 Owen J: 226 [T]he regulations provide an elaborate code governing every phase in the slaughter, treatment, storage and packing of meat which may ultimately be exported. It will be noticed that reg 5 requires the registration of all establishments used for the slaughter, treatment and storage of meat for export and is not confined to establishments used solely for the preparation of meat for the export trade. I think it is undeniable that the trade and commerce power is wide enough to enable this 394

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Swift Australian Co v Boyd Parkinson cont. 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 into export be prejudicially affected by the conditions under which the slaughter of meat for the home market takes place.

[5.270]

Notes&Questions

Could the Commonwealth prohibit slaughter for intrastate consumption in premises employed in slaughter of meat for export? See Swift at 213 per Taylor J, at 220 per Menzies J. Conversely, could the Commonwealth require meat for all destinations to be produced in the same abattoir? 2. In the absence of Commonwealth legislation, could a State require that meat slaughtered for intrastate consumption be slaughtered separately from meat slaughtered for export? An interesting application of the incidental power is Redfern v Dunlop Rubber here extracted: 1.

Redfern v Dunlop Rubber Australia [5.280] Redfern v Dunlop Rubber Australia Ltd (1964) 110 CLR 194 at 220–222 [The Australian Industries Preservation Act 1906 (Cth), s 4 made it an offence for any person to enter into a contract in relation to trade or commerce with other countries or among the States which was (inter alia) in restraint of trade, and declared such contract to be void. The question here was whether s 4 could validly apply to a contract in restraint of trade which dealt with intrastate trade as well as interstate trade.] Menzies J: 220 [I]f 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 221 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 was, however, strenuously argued that it is beyond the power of Parliament to prohibit participation in a contract or combination unless it is wholly or at least mainly in relation to overseas or inter-State trade and commerce. 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 intra-State trade and commerce if they relate to inter-State or overseas trade and commerce as well. If registration of persons engaged in inter-State transport were to be required on terms not contrary to s 92, that requirement would apply to a person engaged in both inter-State and intra-State transport as well as to a person engaged solely in inter-State transport. … It is true that the constitutional distinction between overseas and inter-State trade and other trade would enable a person engaged in trade to make arrangements relating to his intra-State trade free from control under Commonwealth legislation but it does not enable such a [5.280]

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Redfern v Dunlop Rubber Australia cont. person, by making arrangements relating to trade generally, to put those arrangements beyond Commonwealth control if they 222 do relate to inter-State or overseas trade. Accordingly, I consider that s 4 validly applies to contracts or combinations in relation to overseas or inter-State trade notwithstanding that they are in relation to intra-State trade as well and that s 4(1) does validly operate in accordance with its terms and without importing any unexpressed limitation into pars (a) or (b). [Taylor and Owen JJ expressed the same opinion.]

[5.285]

Notes&Questions

Does Redfern belong to the “production” line of cases or with those cases dealing with the issues relating to intrastate trade and the incidental power; or is it simply sui generis in light of its facts? There has been some suggestion that the reasoning of Owen J in Swift is application of Menzies J’s reasoning in Redfern ? How accurate is that suggestion? [5.290] The High Court has rarely considered the validity under s 51(i) of legislation applying

to goods after importation from overseas or interstate. Cases decided pursuant to the pre-Cole v Whitfield (1988) 165 CLR 360 test for contravention of s 92 suggest that at some point in their post-importation distribution they will cease to be within interstate (or foreign) commerce. See Wragg v New South Wales (1953) 88 CLR 353; Harper v Victoria (1966) 114 CLR 361; SOS (Mowbray) Pty Ltd v Mead (1972) 124 CLR 529 at 567–572 per Menzies J, 604 per Gibbs J. However, these cases are not directly applicable to s 51(i) which is augmented by express and implied incidental powers, whereas s 92 lacks any analogous area of prohibition. A rare case involving regulation of post-importation conduct under s 51(i) is R v Smithers; Ex parte McMillan (1982) 152 CLR 477 which considered the validity of provisions of the Customs Act 1901 (Cth) which authorised Commonwealth officials to institute proceedings to recover as a pecuniary penalty the value of dealings in narcotics which had been imported in contravention of the Act. An argument that importation had ended and that the goods were, therefore, beyond Commonwealth power was rejected in a joint judgment of the entire Court (Gibbs CJ, Mason, Murphy, Wilson, Brennan, Deane and Dawson JJ) at 484–485: The prosecutor concedes that the Parliament has power, certainly under s 51(i), to prohibit the importation of narcotic goods, to make it an offence to have possession of them or to deal with them when they have been imported in contravention of the Act and to make them liable to seizure and forfeiture. These steps may be taken legitimately in the exercise of the power because they are incidental to the enforcement of the prohibition against importation which itself falls fairly and squarely within the power. But, says the prosecutor, the denial or deprivation of benefits arising from participation in dealings in a prohibited import is another matter altogether; it relates to transactions which take place after the process of importation has come to an end and it stands outside the range of acts and actions which are incidental to enforcement of the prohibition. We do not agree. It would be a legitimate exercise of the power – and this is conceded – to make it an offence to engage in dealing in narcotic goods, being prohibited imports, that have been imported in contravention of the Act and to impose severe penalties in respect of that offence. Similarly it would be a legitimate exercise of the power to make that conduct the occasion for liability to a civil action for penalties of the traditional kind. Section 243B, in providing for the imposition of pecuniary penalties of the class provided for in Div 3, stands in no different position. It penalizes ealings in narcotic goods that have been imported in contravention of the Act. In so doing it constitutes a deterrent to importation in breach of the 396

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statutory provisions and provides a further sanction with a view to ensuring compliance with the statutory provisions governing importation. Its importance in this respect is that it seeks to deprive the dealing in narcotic goods of the considerable financial rewards which are the chief inducement for importing them into Australia and for dealing in them.

[5.300]

Notes&Questions

1.

Does Smithers suggest that, pursuant to incidental powers, the Commonwealth retains control indefinitely of all illegally imported goods on the ground that it assists in deterring importation?

2.

Will Commonwealth power over lawfully imported goods cease at some point in their distribution? United States jurisprudence suggests not. See, eg, JH Choper and JC Yoo, “The Scope of the Commerce Clause after Morrison” (2000) 25 Oklahoma City University Law Review 843 at 860–863. The authors note that “[s]ome cases have allowed Congress to go so far as to criminalize activity using a good that, at some point, has crossed interstate boundaries [noting United States v Sullivan 332 US 689 (1948)] … [T]he Court’s decisions have not required that any nexus exist between the time that persons cross state borders and the time they engage in the prohibited activity” (at 860, 862; emphasis added).They suggest that the commerce clause would enable Congress to “[refuse] to allow someone to enter a same-sex marriage who had previously travelled from one state to another” (at 863). See also JA Klein, “Commerce Clause Questions After Morrison: Some Observations on the New Formalism and the New Realism” (2002) 55 Stanford Law Review 571 at 592–593, noting Daniel v Paul 395 US 298 (1969), as well as United States v Sullivan 332 US 689 (1948) and Scarborough v United States 431 US 563 (1977). In United States v Singletary 268 F 3d 196 at 200 (2001) (cert den 535 US 976 (2002)), notwithstanding Lopez 514 US 549 (1995) and Morrison (see [5.320]), the US Court of Appeals for the Third Circuit accepted as good law the proposition (established by Scarborough v United States 431 US 563 at 568 (1977)) that: [T]he transport of a weapon in interstate commerce, however remote in the distant past, gives its present intrastate possession a sufficient nexus to interstate commerce to fall within the ambit of [a statute which prohibited a convicted felon from possessing a firearm in or affecting foreign or interstate commerce]. (Emphasis added.)

The trade and commerce power was considered recently in Pape v Commissioner for Taxation (2009) 238 CLR 1, although the case was decided on other issues. Only three justices considered s 51(i): Heydon J, and Hayne and Kiefel JJ jointly. 3.

In Pape v Federal Commissioner for Taxation (2009) 238 CLR 1, ultimately decided on other issues, the minority justices had to consider s 51(i) in a recent consideration of this power. The Tax Bonus for Working Australians Act (No 2) 2009 (Cth) provided tax payers in certain categories with a “bonus” cash payment in the hope that recipients would spend the sum in order to ameliorate, it was hoped, the effects of the global financial crisis of that year. In concluding that the impugned law was not with respect to trade and commerce, Hayne and Kiefel JJ stated at [375] 128: “Those who do spend the money may spend it in a way that constitutes international or interstate trade and commerce. But neither the legal nor the practical effect of the Impugned Act is such as to make it a law with respect to either or both of international or interstate trade and commerce.” They continued: [5.300]

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[376] The Commonwealth submitted that the question critical to the engagement of s 51(i) in this case was one about the practical effect of the Impugned Act. In particular, would the Impugned Act have “a substantial economic effect on the flow of commercial transactions, goods, services, money, credit, among the States?” [377] It is not necessary to decide whether an affirmative answer to the question posed by the Commonwealth would suffice to show that the Impugned Act is a law supported by s 51(i). It was not submitted that the material in the special case directly answered the factual question posed by the Commonwealth. … But the material in the special case shows no estimation of how the increase in Gross Domestic Product relates to trade and commerce with other countries, or among the States. As the Commonwealth acknowledged in argument, “nobody has modelled the precise effect on the flow [of transactions] among the States”.

Heydon J made more elaborate remarks: [436] 150 Section 51(i) … compels a distinction between trade and commerce with other countries, and among the States, on the one hand, and other forms of trade and commerce, on the other (Airlines of NSW Pty Ltd v New South Wales (No 2) (1965) 113 CLR 54 at 88, 115, 128, 142–144, 155; Attorney-General (WA) v Australian National Airlines Commission (1976) 138 CLR 492 at 499, 502–503, 508–511; cf at 529–530). Despite indicating a conditional desire to reopen these cases, and despite reminders from New South Wales of the necessity to do so if the defendants were to win on s 51(i), the defendants did not in fact apply to do so. It does not permit an argument that trade and commerce in Australia is one indivisible (151) whole. Nor does it permit an argument that any legislation having an effect on trade and commerce in Australia must inevitably have an effect on trade and commerce with other countries, and among the States. While it may not be necessary to demonstrate that the Tax Bonus Act is exclusively related to trade and commerce with other countries, and among the States, it is necessary to show at least that it has some definable relationship with that class of trade and commerce. [437] To establish this relationship, the defendants posed the key question as being: “does this law have a substantial economic effect on the flow of commercial transactions, goods, services, money, credit, among the States?” [438] The defendants’ argument was, in summary, that the intended practical operation of the … Act was to inject $7.7 billion into the Australian economy and give around 8.7 million recipients the means to participate directly in trade or commerce “thereby affecting both directly and indirectly trade and commerce among the States and with other countries”. … [440] Explanatory Memorandum. The first of the defendants’ submissions appeared to rest, whether or not legitimately, on the intentions or purposes of those who introduced the legislation. The submission was that the Explanatory Memorandum to the Bill … explained it as part of a package to give effect to the government’s “Nation Building and Jobs Plan”, which was “introduced to assist the Australian people [to] deal with the most significant economic crisis since the Second World War and [to] provide immediate economic stimulus to boost demand and support jobs” (Australia, House of Representatives, Tax Bonus for Working Australians Bill (No 2) 2009 and Tax Bonus for Working Australians (Consequential Amendments) Bill (No 2) 2009, Explanatory Memorandum, para 1.3). However, the Explanatory Memorandum does not establish the legislative purpose necessary to support the submission, namely a purpose that the trade and commerce in which recipients of the bonus will participate will be trade and commerce with other countries, and among the States. [441] The same is true of other indications of legislative purpose. Thus the government’s “Updated Economic and Fiscal Outlook” (February 2009) contended that a purpose underlying the decision to provide for tax bonuses was, together with all the other elements in the “Nation Building and Jobs Plan”, to “support economic growth and jobs in Australia”, and, taken with certain other bonus payments, was to “deliver an immediate stimulus to the economy to support growth and jobs now”. These goals 152 are neutral as between the impact on trade and commerce with other 398

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countries, and among the States, on the one hand, and other types of trade, on the other. It was not demonstrated to be the case that if there is a significant impact on the latter types of trade and commerce it will merely be a collateral and unintended result of endeavouring to provide the former type. [442]Leaving aside s 15AB of the Acts Interpretation Act 1901 (Cth) and the capacity at common law to resort to other material giving contextual background, the only evidence of statutory purpose is that to be found by construing the statute. The Tax Bonus Act does not reveal a purpose of having an impact on trade and commerce with other countries, and among the States, as distinct from other kinds of trade. This point demonstrates weakness in the defendants’ second submission on s 51(i) as well. [443] The second submission advanced by the defendants appeared to turn not on the purposes of those who promoted the legislation, but on its likely effects. The submission was that “[i]t can reasonably be anticipated that the spending generated by the payments made under the Act will have a material effect on the amount of” trade and commerce with other countries, and among the States. [444] As South Australia pointed out, nothing in the provisions of the Tax Bonus Act reflects any criterion ensuring that particular recipients are more likely to make expenditures, if they make expenditures at all, in trade and commerce with other countries, and among the States. The Act is structured so as to target a class – persons with taxable incomes between nil and $100,000, divided into three subclasses. The class as a whole is not inherently likely to favour trade and commerce with other countries, and among the States, as the object of their expenditures. The same is true of each subclass. [445] The defendants pointed to the following passage in “Updated Economic and Fiscal Outlook” (February 2009): “Well-designed discretionary fiscal policy should work in conjunction with monetary policy to provide an immediate boost to demand. The most effective fiscal policy measures to achieve this in the current circumstances are those that can be implemented quickly and are targeted to those who are most likely to spend additional income. Like the Economic Security Strategy, the Nation Building and Jobs Plan includes measures that can be implemented quickly, so that it will support growth through to June 2009, and has been targeted towards those low and middle-income households who are most likely to spend additional income and who are most vulnerable during an economic slowdown. To the extent that these payments are saved rather than spent immediately, they will accelerate balance 153 sheet repair and underpin consumption over time.” This passage does not indicate that the bonus payments will have an impact on trade and commerce with other countries, and among the States, as distinct from other forms of trade and commerce. [446] Absence of financial modelling. At other points in their arguments the defendants referred to the financial modelling underlying the “Nation Building and Jobs Plan”. But no financial modelling was cited to support the alleged reasonable anticipation that the expenditure of the bonus payments would have a material effect on the amount of trade and commerce with other countries, and among the States. Indeed the defendants specifically conceded that no financial modelling of that kind had been done. All they pointed to was modelling indicating an effect on gross domestic product of 0.5% by June 2009 and another 0.75 to 1% by June 2010. The tax bonuses were to be paid across the country. The country has, as the defendants rightly agreed, a fairly homogeneous character geographically in terms of distribution of wealth. The payments are to poor or relatively poor people, or “low and middle-income households” (or as “Updated Economic and Fiscal Outlook” (February 2009) more euphemistically still puts it, “liquidity constrained households”). The problem is that while these figures measure an impact on trade and commerce, they do not measure any impact on trade and commerce with other countries, and among the States. [447] Sufficient practical connection? The defendants accepted that the payments were “not focused on interstate trade and commerce”, but were focused on trade and commerce in general. However, they submitted that the desired effect on gross domestic product gave the payments a sufficient practical connection with trade and commerce with other countries, and [5.300]

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among the States. That submission must be rejected. It ignores a necessary distinction. It fails to bridge a gap not otherwise bridged. It could not be correct unless s 51(i) were rewritten by leaving out the last seven words. Conclusion [448] The answer to the question posed by the defendants as the key one is “no”. But even if it is assumed that the spending of the bonus payments will have some eventual connection with trade and commerce with other countries, and among the States, it has not been demonstrated that the connection is more than “insubstantial, tenuous or distant”. Hence “[the legislation] cannot be described as made with respect to” that kind of trade and commerce (Melbourne Corporation v Commonwealth (1947) 74 CLR 31 at 79 per Dixon J).

4.

5.

6.

To what extent did Heydon J maintain the position from the Airlines cases that a distinction must be maintained between interstate and intrastate trade when examining s 51(i)? Does His Honour’s statement – that s 51(i) does not permit of an argument that “any legislation having an effect on trade and commerce in Australia must inevitably have an effect” on Australia’s interstate or overseas trade – suggest that intra-State trade and commerce may only be regulated by the Commonwealth if reliance can be placed on the incidental power? If so, does he re-examine the issue, or, is the Court’s re-examination of this question hampered by the fact that the defendants did not seek to reopen the Airlines cases? To what extent does the defendant’s key question, as set out at [437] above, suggest the influence of the United States cases on the “commerce power”? Is the reasoning from the above extracts indicative of some movement toward acceptance of the position in the United States; that is, if a substantial effect on interstate trade can be established, or a rational basis for such a claim can be established, the federal parliament may regulate intra-State trade and commerce to the extent that it is reasonable and appropriate to do so? Does the reasoning of Heydon J suggest that His Honour may have considered an extension of the use of the incidental power beyond the physical protection of interstate or overseas trade and commerce, as appears presently to pertain in Australia, to economic factors so long as the connection is not “insubstantial, tenuous or distant”?

The United States commerce clause [5.310] The United States Constitution empowers Congress: “To regulate commerce with

foreign nations, and among the several States, and with the Indian tribes”: Art I, § 8(3). These words closely parallel those of s 51(i) of the Commonwealth Constitution, so interpretations of the American commerce clause have obvious relevance for Australia. On its face, the Australian power may appear to be broader than the American since a power to “make laws … with respect to” a subject probably exceeds a power to “regulate” it which, on a strict construction, might be considered not to extend to authorising the government itself to undertake the activity: Airlines Case (1945) [5.40]. However, the notion that the Commonwealth’s power may be broader than that of the United States faces the countervailing argument that the textual similarity between the two powers is reduced when account is taken of the far greater range of commercial powers specifically conferred by the Commonwealth Constitution. The interpretation of the American commerce clause has varied over the years. It was interpreted broadly in the first significant Supreme Court decision construing it, Gibbons v Ogden 22 US 1; 9 Wheat 1 (1824). However, most of the cases during the remainder of the 19th century concerned the validity of State legislation, in which context the commerce clause (which was viewed as a largely exclusive federal power) was frequently construed narrowly. Interpretation of federal power varied over the years and the pre-1937 cases are difficult to 400

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reconcile with one another. Since 1937 the Supreme Court has construed the power liberally, inquiring whether the subject matter regulated, even if not itself part of interstate or foreign commerce, substantially affects such commerce. As the Court stated in 1942 (Wickard v Filburn 317 US 111 (1942) at 125): [E]ven if [the] activity be local and though it may not be regarded as commerce, it may still, whatever its nature, be reached by Congress if it exerts a substantial economic effect on interstate commerce.

The economic effect on interstate commerce undoubtedly met this criterion in Wrightwood Dairy [5.200] but the Supreme Court adopted an increasingly generous view of what effect might be considered “substantial”. This was facilitated by the doctrine of aggregation, whereby the economic effect of relatively trivial economic activity was evaluated “together with that of many others similarly situated” (Wickard v Filburn 317 US 111 (1942) at 128). Thus, in Wickard v Filburn it was held that Congress could include in a farmer’s wheat quota wheat grown wholly for consumption on the farm on the ground that Congress could reasonably consider that such wheat would have a substantial effect on the price of wheat in the foreign and interstate markets because it would otherwise have been purchased in the market and some of it may be placed on the market if the price is suitable (at 128). The Court concluded that (at 128–129): Congress may properly have considered that wheat consumed on the farm where grown, if wholly outside the scheme of regulation, would have a substantial effect in defeating and obstructing its purpose to stimulate trade therein at increased prices.

Over the years, the Supreme Court distilled the test for validity under the commerce clause into two questions: 1. Did Congress have a rational basis for finding that the regulated activity affects interstate or foreign commerce? 2. If it had such a basis, were the means chosen to regulate the activity reasonable and appropriate: Heart of Atlanta Motel, Inc v United States 379 US 241 (1964) at 258–259; Hodel v Virginia Surface Mining and Reclamation Association 452 US 264 at 276 (1981). Applying this test, the Supreme Court upheld federal legislation regulating surface coal mining, holding Congress’s finding – that such regulation was necessary to protect interstate commerce – was rational: Hodel at 281. The congressional finding, included in the legislation itself, which the Supreme Court held to be supported by the legislative record (at 278–280), was as follows (at 277): [M]any surface mining operations result in disturbances of surface areas that burden and adversely affect commerce and the public welfare by destroying or diminishing the utility of land for commercial, industrial, residential, recreational, agricultural, and forestry purposes, by causing erosion and landslides, by contributing to floods, by polluting the water, by destroying fish and wildlife habitats, by impairing natural beauty, by damaging the property of citizens, by creating hazards dangerous to life and property by degrading the quality of life in local communities, and by counteracting governmental programs and efforts to conserve soil, water, and other natural resources.

The Supreme Court displayed similar deference to congressional findings in the civil rights field, upholding federal legislation desegregating virtually all hotels and restaurants serving interstate travellers or selling food a substantial portion of which had moved in interstate commerce: Heart of Atlanta Motel Inc v United States 379 US 241 (1964); Katzenbach v McClung 379 US 294 (1964). The Supreme Court even held the legislation applicable to a private club on the grounds that it would be “unrealistic to assume” that none of its visitors was an interstate traveller and the rather tenuous interstate derivation of some of its food and [5.310]

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entertainment facilities: Daniel v Paul 395 US 298 (1969). (But note the dissent of Black J.) These cases suggest that the Australian commerce power may offer a potential (but presently completely untapped) source of legislative power regarding civil rights. Indeed, the Supreme Court found it unnecessary to rely on legislative or congressional findings in applying a federal statute which penalised arson in respect of “any building … used … in any activity affecting interstate or foreign commerce” to a two-unit apartment building used as rental property. The Court considered the intrastate rental real estate market to be part of a larger class of economic activity which constituted interstate or foreign commerce: Russell v United States 471 US 858 (1985). In a brief unanimous opinion the Court concluded (at 862): By its terms … the statute only applies to property that is “used” in an “activity” that affects [interstate or foreign] commerce. The rental of real estate is unquestionably such an activity. We need not rely on the connection between the market for residential units and “the interstate movement of people”, to recognize that the local rental of an apartment unit is merely an element of a much broader commercial market in rental properties. The congressional power to regulate the class of activities that constitute the rental market for real estate includes the power to regulate individual activity within that class. (See note on Jones v United States 529 US 848 (2000) at 187.)

The Supreme Court, however, applied the brake on congressional power under the commerce clause for the first time in almost 60 years in United States v Lopez 514 US 549 (1995). By a 5:4 majority, the Court held invalid as beyond the commerce clause a federal statute (lacking legislative or congressional findings), the Gun-Free School Zones Act 1990, which penalised the knowing possession of a firearm within 1,000 feet of a school. The majority (per Rehnquist CJ) held that the legislation failed “the proper test”, namely “whether the regulated activity ‘substantially affects’ interstate commerce” (at 559) because it “ha[d] nothing to do with ‘commerce’ or any sort of economic enterprise, however broadly one might define those terms” (at 561). Perhaps significantly, the Court’s statement of “the proper test” omitted what in Australia (and Europe) has been termed the “margin of appreciation”. However, since the statute lacked legislative or congressional findings, the Court was hampered in inquiring whether Congress could rationally have believed that the possession of firearms near schools substantially affected interstate commerce – Heart of Atlanta Motel test, which includes a “margin of appreciation”. Stevens J, one of the four dissenters, condemned the decision as “extraordinary” (at 602), and it was indeed the first occasion since 1937 that the Supreme Court had held federal legislation invalid as beyond the commerce clause other than on the ground of intergovernmental immunity. Nevertheless, the importance of the decision should not be exaggerated for it did not directly challenge, but rather purported merely to be applying, existing law; as Souter J (dissenting) noted, the decision “may be seen as only a misstep, its reasoning … not quite in gear with the prevailing standard, but hardly an epochal case” (at 614–615). Only Thomas J of the majority justices advocated a revision of commerce clause jurisprudence, although even that only at “an appropriate juncture”, which was not this case (at 602). The other majority justices maintained that they were refusing to expand existing commerce clause jurisprudence, not rolling it back (at 567), noting that “[e]ven Wickard, … perhaps the most far reaching example of Commerce Clause authority over intrastate activity, involved economic activity in a way that the possession of a gun in a school zone does not” (at 560). Indeed, one of the majority, Kennedy J (concurring), stated explicitly that “Congress can regulate in the commercial sphere on the assumption that we have a single market and a unified purpose to build a stable national economy” (at 574; emphasis added). (This comment was quoted with apparent approval by the identically constituted majority in United States v Morrison 529 US 598 at 611 (2000).) 402

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There was reason to speculate whether the members of the majority other than Thomas J might have upheld the legislation had it included congressional findings of the sort seen in Hodel, which were in fact added to the legislation in 1994, after this case arose (see at 562–563). The four dissenting justices (per Breyer J) held that the legislation fell “well within the scope of the commerce power as this Court has understood [it] over the last half-century” (at 615); upholding the statute “would not expand the scope of [the commerce clause]. Rather, it simply would apply pre-existing law to changing economic circumstances” (at 624). In their opinion, Congress “could have had a rational basis for finding a significant (or substantial) connection between gun-related school violence and interstate commerce” (at 618; emphasis in original) because the literature established that school violence significantly interferes with the quality of education which in turn significantly (or substantially) affects interstate and foreign commerce (at 618–619, 623). The majority opinion expressly rejected this reasoning, noting that it “lacks any real limits because, depending on the level of generality, any activity can be looked upon as commercial”, making Breyer J’s analysis “equally applicable, if not more so, to subjects such as family law and direct regulation of education” (at 565). In support of the need for judicially enforceable limits, the majority twice quoted Marshall CJ in Gibbons v Ogden 9 Wheat 1 at 195 (1824): “The enumeration [in the commerce clause of various kinds of commerce] presupposes something not enumerated” (at 553, 566). For an Australian comment on this case, see J Philips and E Uliel, “United States v Lopez: Constitutional Interpretation in the United States and Australia” (1995) 18 University of NSW Law Journal 532. Congress subsequently re-enacted the legislation in 18 USC § 922(q)(2)(A): “It shall be unlawful for any individual knowingly to possess a firearm that has moved in or that otherwise affects interstate or foreign commerce at a place that the individual knows, or has reasonable cause to believe, is a school zone”. This provision was upheld in United States v Danks 221 F 3d 1037 (8th Cir, 1999), cert den 528 US 1091 (2000). Lopez was followed in United States v Morrison 529 US 598 (2000), in which an identically constituted Supreme Court held 42 USC § 13981 (in the Violence Against Women Act 1994) invalid as beyond the commerce clause by the same majority of 5 to 4. That provision provided a federal civil remedy for victims of gender-motivated violence. The majority opinion by Rehnquist CJ followed Lopez and quoted from it extensively.

United States v Morrison [5.320] United States v Morrison 529 US 598 at 608–664 (2000) Rehnquist CJ (delivering the opinion of the Court): 611 … Lopez’s review of Commerce Clause case law demonstrates that in those cases where we have sustained federal regulation of intrastate activity based upon the activity’s substantial effects on interstate commerce, the activity in question has been some sort of economic endeavor. (See at 559–560.) The second consideration that we found important in analyzing § 922(q) was that the statute contained “no express jurisdictional element which might limit its reach to a discrete set of firearm possessions that additionally have 612 an explicit connection with or effect on interstate commerce.” (at 562) Such a jurisdictional element may establish that the enactment is in pursuance of Congress’ regulation of interstate commerce. Third, we noted that neither § 922(q) “‘nor its legislative history contain[s] express congressional findings regarding the effects upon interstate commerce of gun possession in a school zone.’” Ibid. While “Congress normally is not required to make formal findings as to the substantial burdens that an activity has on interstate commerce,” … the existence of such findings may “enable us to evaluate the legislative judgment that the activity in question substantially affect[s] interstate commerce, even though no such substantial effect [is] visible to the naked eye.” United States v Lopez 514 US at 563. Finally, our decision in Lopez rested in part on the fact that the link between gun possession and a substantial effect on interstate commerce was attenuated. (at 563–567) The United States argued that [5.320]

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United States v Morrison cont. the possession of guns may lead to violent crime, and that violent crime “can be expected to affect the functioning of the national economy in two ways. First, the costs of violent crime are substantial, and, through the mechanism of insurance, those costs are spread throughout the population. Second, violent crime reduces the willingness of individuals to travel to areas within the country that are perceived to be unsafe.” (at 563–564) The Government also argued that the presence of guns at schools poses a threat to the educational process, which in turn threatens to produce a less efficient and productive workforce, which will negatively affect national productivity and thus interstate commerce. Ibid. We rejected these “costs of crime” and “national productivity” arguments because they would permit Congress 613 to “regulate not only all violent crime, but all activities that might lead to violent crime, regardless of how tenuously they relate to interstate commerce.” (at 564) ... With these principles underlying our Commerce Clause jurisprudence as reference points, the proper resolution of the present cases is clear. Gender-motivated crimes of violence are not, in any sense of the phrase, economic activity. While we need not adopt a categorical rule against aggregating the effects of any noneconomic activity in order to decide these cases, thus far in our Nation’s history our cases have upheld Commerce Clause regulation of intrastate activity only where that activity is economic in nature. See, eg, id, at 559–560, and the cases cited therein. … 614 In contrast with the lack of congressional findings that we faced in Lopez § 13981 is supported by numerous findings regarding the serious impact that gender-motivated violence has on victims and their families. … But the existence of congressional findings is not sufficient, by itself, to sustain the constitutionality of Commerce Clause legislation. [O’Connor, Scalia, Kennedy and Thomas JJ joined in Rehnquist CJ’s opinion.]

[5.330]

Notes&Questions

1.

The case was decided by a 5:4 majority as in Lopez. The dissenting judgments (delivered by Souter and Breyer JJ and in which Stevens and Ginsburg JJ joined) did not accept the limitation defined by the majority, that is, that the subject matter being regulated must itself be an economic activity. They adopted instead the unqualified proposition which they regarded as having hitherto been accepted by the court: “Congress has the power to legislate with regard to activity that, in the aggregate, has a substantial effect on interstate commerce” (at 628). It was for Congress to determine that such an effect existed and for the courts to determine the rationality of the decision, not its soundness; insisting thus on a margin of appreciation test. The position of Congress was considerably strengthened when backed up by congressional findings, as it was in this case.

2.

The dissentients also took issue with approach to federalism adopted by the majority and their adoption of a new formalism to support this: “Just as the old formalism had value in the service of an economic conception [ie laissez-faire], the new one is useful in serving a conception of federalism. It is the instrument by which assertions of national power are to be limited in favour of preserving a supposedly discernible, proper sphere of state autonomy to legislate or refrain from legislating as the individual State sees fit. The legitimacy of the Court’s current emphasis on the non-commercial nature of regulated activity, then, does not turn on any logic serving the text of the Commerce Clause or on the realism of the majority’s view of the national economy. The essential issue is rather the strength of the majority’s claim to have a constitutional warrant for its current conception of a federal relationship enforceable by this Court through limits on otherwise plenary commerce power” (at 644-645).

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3.

How, if at all, does the US Supreme Court’s reasoning style differ from that of the High Court of Australia?

4.

Can the various arguments deployed in the opinions be differentiated into core and supporting reasoning? Would the opinions have been more persuasive if the majority had merely argued that Morrison (and Lopez) was distinguishable from the earlier decisions, including Wickard, and if the dissenters had confined themselves to contradicting this and arguing that the ground on which the majority distinguished those cases was untenable?

5.

The view that Lopez and Morrison did not reject established commerce clause doctrine as established in Wickard v Filburn 317 US 111 (1942) derives support from Gonzales v Raich 545 US 1, 125 S Ct 2195 (2005), decided by an unusual majority of 6:3. The majority held that the federal Controlled Substances Act 1970 could validly prohibit the personal cultivation of marijuana for personal medical use in compliance with California law. The opinion of the Court (Stevens J, joined by Kennedy, Souter, Ginsburg and Breyer JJ) considered the case indistinguishable from Wickard v Filburn which, they said, “establishes that Congress can regulate purely intrastate activity that is not itself ‘commercial’, in that it is not produced for sale, if it concludes that failure to regulate that class of activity would undercut the regulation of the interstate market in that commodity” (at 18). The Court’s opinion makes it clear that the Court must be satisfied (as it was here) that Congress had a rational basis for so concluding (at 19, 22). Scalia J concurred in the judgment, but O’Connor J (with Rehnquist CJ and Thomas J joining) and Thomas J (in a separate opinion) dissented, essentially arguing that the case was indistinguishable from Lopez and Morrison (which the majority denied at 23, 25). Did Rehnquist CJ (Morrison at 615–619) rely on reserved State powers reasoning, as the dissenters effectively alleged (at 639–645)? For an argument that the alleged absence of “commercial” or “economic” activity in Lopez and Morrison was merely a “proxy” or “cover” for application of a reserved State powers doctrine, see A Ides, “Economic Activity as a Proxy for Federalism: Intuition and Reason in United States v Morrison” (2001) 18 Constitutional Commentary 563, especially at 578–582. On the distinction between reserved State powers reasoning and taking account of the Constitution’s federal context, see G Winterton, “The High Court and Federalism: A Centenary Evaluation” in P Cane (ed), Centenary Essays for the High Court of Australia (Butterworths, Sydney, 2004), 197 at pp 205–210, including n 102 which refers to Lopez and Morrison. Should the majority’s interpretation of the commerce clause be adopted for s 51(i) of the Commonwealth Constitution? Do any or all of the opinions in Morrison provide a reason why the High Court should decline to follow US Supreme Court precedent, including even Wrightwood Dairy, in interpreting s 51(i)? A more recent major decision of the US Supreme Court on these issues maintained again, by a slim 5:4 majority, the position on the commerce clause developed in Lopez and Morrison, with further refinements. In National Federation of Independent Business v Sebelius 132 S Ct 2566 (2012), the Court upheld a federal law which requires, inter alia, non-exempt American citizens to maintain a “minimal essential” (as defined by the Act) health insurance coverage, otherwise referred to as “the individual mandate”. The aim of the Patient Protection and Affordable Care Act 2010, “Obamacare”, was to increase the number of Americans covered by health insurance and decrease the cost of health care. The individual mandate requires the bulk of Americans to maintain “minimum essential” health insurance. For the non-exempt,

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8.

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and for those who do not receive health insurance through an employer or government program, it would be necessary to purchase insurance from a private company. The non-compliant must otherwise make a “[s]hared responsibility payment” to the Federal Government. The Act provides that this “penalty” will be paid to the Internal Revenue Service with an individual’s taxes, and “shall be assessed and collected in the same manner” as tax penalties. The individual mandate was held valid, by a 5:4 majority, as a “tax” within Congress’s taxing powers. However, Roberts CJ, who was within this majority, joined the minority (Scalia, Kennedy, Thomas and Alito JJ) and thus made a majority in finding that the individual mandate could not be supported by the Commerce Clause. Those who concurred with Roberts CJ on the commerce clause delivered a separate opinion, dissenting on the ultimate issue of validity. In essence, the majority on the Commerce Clause issue accepted the majority holdings in Lopez and Morrison, in particular on the requirement that the subject matter being regulated had itself to be an economic activity as well as having a substantial effect on interstate commerce. Given that the purchase of health insurance was a commercial activity, the case was not decided on this point. Rather, the individual mandate, they held, did not regulate an existing commercial activity but instead compelled individuals to become active in commerce – in this case by purchasing health insurance. While Congress has the power to regulate commerce, it does not have the power to compel it. The individual mandate was held to constitute compulsion. The individual mandate … compels individuals to become active in commerce by purchasing a product, on the ground that their failure to do so affects interstate commerce. Construing the Commerce Clause to permit Congress to regulate individuals precisely because they are doing nothing would open a new and potentially vast domain to congressional authority. Every day individuals do not do an infinite number of things. In some cases they decide not to do something; in others they simply fail to do it. Allowing Congress to justify federal regulation by pointing to the effect of inaction on commerce would bring countless decisions an individual could potentially make within the scope of federal regulation, and – under the Government’s theory – empower Congress to make those decisions for him (at 2578).

The minority on this issue (Ginsburg, Sotomayor, Breyer and Kagan JJ), however, accepted that the large number of individuals without health insurance imposed a heavy burden on the “health care market” by significantly raising the cost of health care to the insured, that is, to those who can pay as well as to the providers of health care services to the uninsured. This, they stated, meant that the insured subsidized the medical care of the uninsured. The minority also referred to other statistics indicating the significant impact on interstate commerce of the medical treatment of uninsured persons. For the minority, there was a rational basis for Congress to find that there was a substantial effect on interstate commerce such as to authorize the individual mandate. Even though an individual was being required to enter into commerce, nevertheless the Commerce Clause permitted federal laws “to direct the conduct of an individual today…because of a prophesied future transaction. Congress’ actions are even more rational in this case [than previous cases referred to], where the future activity (the consumption of medical care) is certain to occur, the sole uncertainty being the time the activity will take place” (at 2590). The majority opinion of the Chief Justice rejected this argument (at 2590): Everyone will likely participate in the markets for food, clothing, transportation, shelter, or energy; that does not authorize Congress to direct them to purchase 406

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particular products in those or other markets today. The Commerce Clause is not a general licence to regulate an individual from cradle to grave, simply because he will predictably engage in particular transactions.

Earlier in his reasoning he had stated: People, for reasons of their own, often fail to do things that would be good for them or good for society. Those failures – joined with the similar failures of others – can readily have a substantial effect on interstate commerce. Under the Government’s logic, that authorizes Congress to use its commerce power to compel citizens to act as the Government would have them act. That is not the country the Framers of our Constitution envisioned (at 2589). … The individual mandate forces individuals into commerce precisely because they elected to refrain from commercial activity. Such a law cannot be sustained under a clause authorizing Congress to “regulate Commerce” (at 2591).

SECTION 51(XX) Introduction [5.340] Early commentators were divided on the ambit of the corporations power. Quick and

Garran suggest that the power with respect to trading and financial corporations formed within Australia does not extend to their incorporation: J Quick and RR Garran, The Annotated Constitution of the Australian Commonwealth (Angus & Robertson, Sydney, 1901), p 607. Harrison Moore dealt with the power very briefly in his first edition (1902), but construed it liberally as “of course” authorising the Commonwealth Parliament “to make a Companies Law for the whole of the Commonwealth”, which presumably would include the power to incorporate such bodies: see WH Moore, The Constitution of the Commonwealth of Australia (1910, reprinted Legal Books, Sydney, 1997), p 148. Some of these comments were noted in the majority and minority judgments respectively in the Incorporation Case ([5.530]). For the historical and economic background to the power, see S Corcoran, “Corporate Law and the Australian Constitution: A History of Section 51(xx) of the Australian Constitution” (1994) 15 Journal of Legal History 131 at 135–137, who concludes that “it seems probable that the delegates to the conventions never really agreed on the scope of the corporations power” (at 137). The High Court’s first decision on s 51(xx), Huddart, Parker & Co Pty Ltd v Moorehead (1909) 8 CLR 330, interpreted it narrowly (see Stellios, Zines (6th ed, 2015), pp 100-105) with the result that the power “lay dormant for nearly sixty years” (at p 100). The reasoning of three of the four majority justices had been heavily influenced by the reserved State powers doctrine, so the overthrow of that doctrine in the Engineers’ Case (1920) might have liberated the power. But the comments of the four justices who discussed the power in the Bank Nationalisation Case in 1948 offered little cause for optimism in that respect: see Bank of New South Wales v Commonwealth (1948) 76 CLR 1 at 201–204 per Latham CJ, at 255–256 per Rich and Williams JJ, at 304 per Starke J. Upon his retirement in 1952, Latham CJ remarked that the corporations power “might be very useful but it is so obscure that no Parliament [x] is prepared to do very much in running the risk of attempting to legislate under it” ((1951–1952) 85 CLR vii at ix–x). The power expanded [5.350] The power finally “received new life” (Stellios, Zines (6th ed, 2015), p 100) in the

Concrete Pipes Case in 1971 (Strickland v Rocla Concrete Pipes Ltd (1971) 124 CLR 468). At issue in this case was the constitutional validity of the Trade Practices Act 1965–1969 (Cth) in its application to “constitutional corporations”, that is, corporations referred to in s 51(xx), which provided for the registration of agreements that contained provisions which were [5.350]

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essentially restrictive of trade, ie anti-competitive, and “the parties to which are or include two or more persons carrying on businesses that are competitive with each other” (Pt IV s 35). Section 36 specified the practices which were examinable and s 37 defined monopolization. Affected agreements were to be registered with, and particulars thereof provided to, the Trade Practices Commissioner. The case arose out of the failure of certain trading corporations to register agreements which were “examinable” and to provide the Commissioner with details thereof. After being charged with being in breach of the Act, they argued that the Act was invalid. The relevant agreements related to trade wholly within Queensland. The impugned provisions did not limit their application to constitutional corporations, being purportedly applicable to all persons who were parties to the relevant agreements.

Strickland v Rocla Concrete Pipes [5.360] Strickland v Rocla Concrete Pipes Ltd (1971) 124 CLR 468 at 480–528 Barwick CJ: 480 The full scope of the Act is not limited by its express terms as to the persons upon whom it operates or as to the nature of the trade with respect to which their agreements or practices relate. … As the agreements related entirely to aspects of intra-State trade legislative control of the respondents in relation to them was not within Commonwealth legislative power unless within the power granted by s 51(xx). … [I]n Huddart, Parker & Co Pty Ltd v Moorehead (1909) 8 CLR 330 [i]t was … decided that the legislative power of the Commonwealth [granted by s 51(xx)] did not extend to enable the Parliament to make a valid law controlling the intra-State trading operations of foreign 481 corporations and trading or financial corporations formed within the limits of the Commonwealth. … There is no doubt that trading or financial corporations formed within the limits of the Commonwealth are included in the persons whose trading activities are thus sought to be controlled. But, … they are not separately or specifically dealt with in and by the Act. … [Barwick CJ (at 484) accepted the submission that Huddart Parker be overruled and reasoning as follows:] 484 The case was decided in the year 1909 at a time 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 authorizing the Parliament to invade those areas unless as a necessary incident to the exercise of some granted power. This was the so-called reserved powers doctrine which was exploded and unambiguously rejected by this Court in the year 1920 in [the Engineers Case]. In applying the reserved powers doctrine to the construction of s 51(i) the grant of power to make laws in respect to trade and commerce with foreign countries and among the States this Court adopted a view of the Supreme Court of the United States which treated the grant of power to the Congress in respect to trade and commerce with other countries and among the States as containing an express reservation to the legislatures of the States of power exclusively to deal with trade and commerce within a State. … 486 The Court there [ie in Huddart Parker] sought to find some express provision of the Constitution either within or outside the words of s 51(xx) which clearly and unequivocally authorized the Commonwealth to interfere with the carrying on of any business or trade within the boundaries of the States. Finding none, Griffith CJ concluded (at 354): “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.” … 487 Isaacs J dissented and adopted an approach to the construction of the Constitution conformable to the subsequent decision of the Court in Engineers’ Case. He thought [the impugned legislation] to be valid because he construed the power of the Parliament 488 as large enough to include the regulation of the conduct of foreign and trading or financial corporations formed within the limits of the Commonwealth in their transactions with or as affecting the Australian public. … [T]he 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 408

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Strickland v Rocla Concrete Pipes cont. 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 intra-State trade was a matter for the State legislation exclusively. The Court in the course of its judgment, decided that the expression in par (xx) “formed within the Commonwealth” was apt to include only corporations formed according to the laws of the States. But in this it seems to me their Honours were clearly wrong. There are powers granted to the Commonwealth as well as those left in residue to the States to which the formation within the Commonwealth of trading corporations might be referable. There is s 122 granting legislative power with respect to the Territories. Section 51(i) for instance has been found a source of power to create a trading corporation. See Australian National Airways Pty Ltd v Commonwealth (No 2) (1945) 71 CLR 115. Corporations formed under any power by the Commonwealth or under Commonwealth legislation are clearly corporations formed within the limits of the Commonwealth. … Section 51(i) contains no explicit or implicit prohibition and does not reserve the subject of intra-State trade to the States. It can thus be 489 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. [His Honour proceeded to overrule Huddart Parker and continued …] However, having regard to Sir Samuel Griffith’s remark in Huddart, Parker … at 345 and what was said in argument in these appeals I ought to observe that it does not follow either as a logical proposition, or, if in this instance there be a difference, as a legal proposition, from the validity of those sections [impugned in Huddart Parker], 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 490 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…. [His Honour then rejected the invitation put in argument to define the outer reaches of the power. He explained:] The law develops case by case, the Court in each case deciding so much as is necessary to dispose of the case before it. “The limits of the power can only be ascertained authoritatively by a course of decision in which the application of general statements is illustrated by example.”: R v Burgess; Ex parte Henry (1936) 55 CLR 608 at 669 per Dixon J. … 491 … What will suffice in any particular instance to require an affirmative answer to the question whether it is a law with respect to the subject matter necessarily involves a matter of degree co-related to the nature of the power and to the provisions of the Act as they would operate in the area in which it is held they were intended to operate. [Barwick CJ now turned to the second issue:] A law requiring the registration of trading agreements restrictive of trade to which a foreign corporation or a trading or financial corporation formed within the limits of the Commonwealth is a party, and requiring the corporation to give particulars of such an agreement under penalty of a fine for failing to do so, appears to me clearly to be a law with respect to corporations of the kind described. As I have said, the making of such an agreement in the course of trade is truly a trading activity. Such a law is a law regulating and controlling the trading activities of such corporations. It would in my opinion clearly be within the legislative power of the Parliament granted by s 51(xx): as also would be the other substantive provisions of the Act if enacted with respect to foreign corporations and trading and financial corporations formed within the limits of the Commonwealth. [Thus permitting that s 51(xx) extends to the trading activities of trading corporations (and thus to financial activities of financial corporations), including purely intrastate trading activities, His Honour was unable, however, to salvage the impugned provisions because they did not limit themselves to constitutional corporations and they could not be read down to do so. All the other justices agreed on the substantive questions relating to s 51(xx), its grant of power over the trading activities of trading corporations. On the validity of the impugned provisions, Gibbs J, with whom McTiernan J agreed, dissented on the question of invalidity as they were able to read down the impugned provisions as [5.360]

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Strickland v Rocla Concrete Pipes cont. applicable constitutional corporations only.]

Notes&Questions

[5.370]

Instead of enacting legislation, like the Trade Practices Act 1965 (Cth) which on its face extended beyond power and relied upon the unsuccessful “reading down” provision (s 7) to save it, the subsequent trade practices legislation was based upon the converse principle. The Trade Practices Act 1974 was largely based upon s 51(xx), but its scope was extended by s 6, which extended its operation by reference to s 51(i), (v) and (xxxix) and s 122, and expressly operated “[w]ithout prejudice to [the Act’s] effect apart from this section” (s 6(1)). This technique was upheld in R v Judges of the Australian Industrial Court; Ex parte CLM Holdings Pty Ltd (1977) 136 CLR 235. The Trade Practices Act 1974 (Cth) was replaced by the Competition and Consumer Act 2010 (Cth). [5.375] After the renaissance of the power following Rocla Pipes, the principal issues which

have arisen regarding s 51(xx) are the ambit of the power, including whether it extends to incorporation, the meaning of “trading” and “financial” corporations, and the scope of the incidental powers in this context. Ambit of the power [5.380] The Concrete Pipes Case established that the power extends to regulating the trading

activities of trading corporations, and may well be wider. Of particular significance in the cases which follow is the extent to which the power extends to activities of s 51(xx) corporations which are not “trading” or “financial” activities and whether it extends to activities which are carried out by persons or entities which are not s 51(xx) corporations which have, or may have, an effect on s 51(xx) corporations.

Actors & Announcers Equity Ass’n v Fontana Films [5.390] Actors and Announcers Equity Association of Australia v Fontana Films Pty Ltd (1982) 150 CLR 169. [At issue was the validity of s 45D(1)(b)(i) of the Trade Practices Act 1974 (Cth) which prohibited “secondary boycotts”: “a person shall not, in concert with a second person, engage in conduct that hinders or prevents the supply of goods or services by a third person to a fourth person (not being an employer of the first-mentioned person), or the acquisition of goods or services by a third person from a fourth person (not being an employer of the first-mentioned person), where – … (b)the fourth person is a corporation and the conduct is engaged in for the purpose, and would have or be likely to have the effect, of causing – substantial loss or damage to the business of the fourth person or of a body corporate that is related to that person”. The definition s 4(1) limited the meaning of corporation to constitutional corporations, including corporations incorporated in a Territory. It was also said to include a “holding company” of one the type of corporations otherwise referred to in s 4(1). The High Court unanimously upheld s 45D(1)(b)(i) in its application to trading corporations.] Mason J: 200 [Section 45D(1)(b)(i)] is a law about secondary boycotts which have an effect, to use a neutral term, on corporations as defined in s 4(1) of the Act. … From this it follows that the prohibiting of such boycotts necessarily has an effect on corporations in their trading activities … [Mason J outlined the provisions of s 45D(1)(a) and (b) and continued:] 201 All this indicates an attempt to prohibit secondary boycotts which adversely affect the trading activities of corporations, rather than an endeavour to prohibit secondary boycotts generally. It is no doubt true to say that the incidental effect of s 45D(1) is to prohibit secondary boycotts affecting other persons as well as corporations in 410

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Actors & Announcers Equity Ass’n v Fontana Films cont. the defined sense, so long as there is an effect or likely effect on corporations, but this falls far short of the general description of the section which the appellants seek to sustain. Accordingly, there is nothing in the provisions of s 45D(1) viewed as a whole which justifies us giving to s 45D(1)(b)(i) a character different from that yielded by an analysis of its legal operation according to its terms. … 203 The appellants … further argue from the platform that the power conferred by s 51(xx) of the Constitution extends only to the trading activities of trading corporations, they focus attention on the reference to loss or damage to “the business” of the fourth person, submitting that “the business” of a corporation is a concept very much wider than its trading activities. In some circumstances this may be so. … But here the word “business” is tied to the opening words of s 45D(1). Those words confine the operation of the prohibition to conduct that hinders or prevents trading activities, ie the supply or acquisition of goods or services. Consequently, when 204 the provision refers to loss or damage to “the business” of the fourth person, it is speaking of loss or damage to that business consequent upon, or attributable to, conduct which hinders or prevents the corporation’s trading activities. The question, then, is whether the corporations power extends to an enactment having the operation and effect which I attribute to s 45D(1)(b)(i) on the interpretation which I have given to it. … The decision [in Huddart Parker] may be taken to have been overruled by Strickland v Rocla Concrete Pipes Ltd (1971) 124 CLR 468, esp at 489, 499, 510–511, 512–513, 515. … The judgments in Strickland, in R v Trade Practices Tribunal; Ex parte St George County Council (1974) 130 CLR 533, esp at 542–543, and more recently in R v Federal Court of Australia; Ex parte WA National Football League (1979) 143 CLR 190, do not attempt to define the limits of the corporations power. They proceed upon the footing that the power 205 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 … When we speak of a law which regulates the trading activities of a trading corporation we mean a law which controls the subject matter by prohibiting the corporation from engaging in certain trading activities or permitting it so to do either absolutely or subject to condition. Such a law is within power because it necessarily operates directly on the subject of the power – it is a law about trading corporations. But when we speak of a law which protects the trading activities of a trading corporation our statement is not so specific. It may be understood as signifying a law which operates directly on the subject of the power. So understood the law is within power and valid. But it may be understood in a different sense so as to denote a law which, though it protects the trading activities of trading corporations, does so by a legal operation outside the subject matter of the power. A law which prohibits the levying of taxes and duties on trading activities 206 generally may be said to protect or promote the trading activities of corporations, but it is neither a law with respect to corporations nor a law with respect to trading corporations. It protects the trading activities of non-corporations as well as protecting the trading activities of corporations and the protection which it gives to non-corporations is not merely incidental to the protection given to corporations. The law does not operate directly upon corporations and it cannot be characterized as a law about them. The Solicitor-General for the Commonwealth submits that if there is a power to prohibit the activities or the trading activities of trading corporations, it necessarily follows that there is a legislative power to protect these 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. The distinction made by the appellants does not avail them here. Sub-section (1)(b)(i) operates directly on the trading activities of trading corporations. It protects them by prohibiting interference with their trading activities. … 207 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 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. This, the correct approach to the interpretation of legislative powers conferred by [5.390]

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Actors & Announcers Equity Ass’n v Fontana Films cont. the Constitution, was expressed by this Court in its unanimous judgment in R v Public Vehicles Licensing Appeal Tribunal (Tas); Ex parte Australian National Airways Pty Ltd (1964) 113 CLR 207 at 225–226, in these words: The simplest approach, however, to the problem is simply to read the paragraph and to apply it without making implications or imposing limitations which are not found in the express words. We must remember that it is part of the Constitution and go back to the general counsel to remember that it is a constitution we are construing and it should be construed with all the generality which the words used admit. See per O’Connor J in the Jumbunna Case (1908) 6 CLR 309 at 367, 368. See also New South Wales v Commonwealth (1975) 135 CLR 337 at 470–471. 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 208 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, subject to qualifications shortly to be mentioned. The requirement of “purpose” in the provision is to be read conjunctively with the requirement of “effect” or “likely … effect”. Thus, regardless of the width of operation of words like “hinders”, no conduct will be prohibited by par (1)(b)(i) unless it has the effect or likely effect of causing, not merely loss or damage, but “substantial loss or damage” to the business of a corporation or a related body corporate. Such a provision has a direct legal operation upon corporations in the sense in which they are defined by the Act. The most indirect operation of par (1)(b)(i) is in respect of conduct which hinders (rather than prevents) the supply of goods or services to or from a corporation where the conduct is engaged in for the purpose and has the likely effect (rather than the actual effect) of causing substantial loss or damage to the business of the corporation. But such an operation still involves a direct legal operation upon corporations. Quite apart from the fact that the flow of goods or services to or from a corporation is hindered, there is in addition a likelihood that the business of the corporation will be substantially damaged. Even if the hindering of the flow of goods or services did not give rise to a direct legal operation, a point which may not readily be conceded, the likelihood of the effect of substantial damage to the business of the corporation would in itself give rise to such an operation. It matters not that the operation on a corporation is preventive or prospective rather than punitive or retrospective. … The qualifications to which I referred relate to the statutory definition of “corporation” and to the reference in s 45D(1)(b)(i) to a “body corporate that is related” to a corporation … [Mason J quoted the definition of “corporation” in s 4(1) and stated that “nothing turns on these definitions”, excepting that of paragraph (d) referring to holding companies:] … [T]he operative provisions to the extent to which they apply to par (d) corporations are ultra vires, because the holding companies referred to are ex hypothesi outside s 51(xx) and s 122. However, the invalid operation is severable by reason of the separation of par (d) from the rest of the statutory definition. The correctness of this view does not appear to be disputed in the present case. [Aickin J concurred with Mason J, and Stephen J delivered a judgment to the same effect. The judgment of Gibbs J indicates a preference for a more conservative approach to s 51(xx), reference being made to the notion of maintaining “the federal balance”. His Honour’s approach also illustrates 412

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Actors & Announcers Equity Ass’n v Fontana Films cont. the approach referred to as the “distinctive character test” referred to in the Work Choices Case [140] (see [5.460]), that is, the fact that the corporation is a trading, financial or foreign corporation should be significant in the way the law relates to it. The contrary view, presently ascendant, is referred to as the “object of command” test [see Work Choices Case [140] (see [5.460]) which, in essence, requires that a constitutional corporation be an object of the command of a law, permitting or prohibiting a constitutional corporation from engaging in conduct or forming relationships.] Gibbs CJ: 181 Section 45D(1)(b)(i) imposes no obligation on a corporation. Its command is directed to persons who need not be corporations. However, what is forbidden is conduct that hinders or prevents the supply of goods or services by a third person to a corporation, or the acquisition of goods or services by a third person from a corporation. The conduct is forbidden only if it is engaged in for the purpose of causing substantial loss or damage to the business of a corporation, and if it would have or be likely to have that effect. The section protects a corporation from certain conduct which is intended and likely to cause substantial loss or damage to its business. 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 par (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 pars (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 182 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. Some striking examples were given by Higgins J in Huddart, Parker & Co Pty Ltd v Moorehead (1909) 8 CLR 330 at 409–410, although, as Higgins J pointed out, the argument of inconvenience suggested by these extraordinary consequences was not conclusive. Other difficulties in relation to s 51(xx) are caused by the need to construe the Constitution as a whole, and thus to reconcile par (xx) with other parts of s 51: see Bank of NSW v Commonwealth (1948) 76 CLR 1 at 203–204, 256, 304 and 330 and Strickland v Rocla Concrete Pipes Ltd (1971) 124 CLR 468 at 507–508, per Menzies J. 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. … The words of par (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: cf per Walsh J in Strickland v Rocla Concrete Pipes Ltd (1971) 124 CLR 468 at 519. 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 under s 51(xx) may apply only to the foreign 183 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 at 490, 508 and 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 [5.390]

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Actors & Announcers Equity Ass’n v Fontana Films cont. 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. An example is provided by s 5 of the Crimes Act 1914 (Cth), as amended, considered in R v Australian Industrial Court; Ex parte CLM Holdings Pty Ltd (1977) 136 CLR 235 at 246–247. 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. Decisions on other paragraphs of s 51 furnish analogies. The power given by s 51(i) extends to forbidding anything directly affecting interstate or overseas trade or commerce: Redfern v Dunlop Rubber Australia Ltd (1964) 110 CLR 194 at 219–220. The power conferred by s 51(v) enables the Parliament to prohibit conduct sufficiently relevant to the subject of television services: Herald and Weekly Times Ltd v Commonwealth (1966) 115 CLR 418 at 433. It does not follow that s 51(xx) empowers the Parliament to pass a law prohibiting any conduct that might damage a trading corporation formed within the limits of the Commonwealth. However, if the prohibition is directed to conduct that is calculated to damage the trading activities of the trading corporation there seems no reason to doubt that it is within the scope of the power. In the attack made by counsel on the validity of the provision, considerable stress was laid on the fact that it appears from the provisions of s 45D(1), viewed as a whole, that the object of the legislation is to prevent persons from engaging in secondary boy- 184 cotts. In deciding whether a law is within Commonwealth power it is not permissible to attempt to discover the motives with which the law was enacted. It is necessary to consider what legal operation the law will have, if valid, and if the law has an actual and immediate operation within a field of Commonwealth power, it will be valid notwithstanding that it has another purpose which could not be achieved directly by the exercise of Commonwealth power: see Melbourne Corporation v Commonwealth (1947) 74 CLR 31 at 79; Fairfax v Federal Commissioner of Taxation (1965) 114 CLR 1 at 13. As has been shown, the direct legal operation of s 45D(1)(b)(i), in its relation to trading corporations, is to prohibit persons, acting in concert, from engaging in conduct that would hinder or prevent the supply of goods or services by some other person to a trading corporation, or the acquisition of goods or services by some other person from such a corporation, when the conduct is engaged in for the purpose, and would have or be likely to have the effect, of causing substantial loss or damage to the business of the corporation. … In my opinion, the fact that the 185 provision in question refers to “business” rather than “trade” does not take it outside the power. It is the business of a trading corporation to trade, and its business is its trading. In any case, one could hardly cause substantial loss or damage to the business of a trading corporation without damaging the trading corporation in its trading activities. It would be “narrow or pedantic” (to use the words of Barwick CJ in Strickland v Rocla Concrete Pipes Ltd (1971) 124 CLR 468 at 490) to view the provision now in question as other than a law for the protection of the trading activities of a trading corporation formed within the limits of the Commonwealth. I consider that s 45D(1)(b)(i) directly operates on the subject matter of the power given by s 51(xx) [and therefore valid]. [Wilson J concurred with Gibbs CJ.] Brennan J: 218 The command of s 45D of the Trade Practices Act 1974 (Cth) … is addressed indifferently to all persons. Its effect is not to regulate or control the businesses or trading activities of corporations mentioned in par (xx) but to protect those businesses from the consequences of the conduct which the section prohibits. The section is concerned with the rights of corporations, not with their duties, and such discrimination as the law effects flows from the conferring of protection upon them in the carrying on of their businesses. In a sense, this case presents the obverse of the problem faced in the Rocla Pipes Case. If a law discriminates between one or more of the classes of corporations mentioned in par (xx) and the public at large by imposing upon corporations of such a class a duty as to the manner in which they conduct their trading activities and the law falls accordingly within the ambit of the power conferred by that paragraph, is a law which discriminates by protecting the trading activities of those corporations within the ambit of the power? 414

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Actors & Announcers Equity Ass’n v Fontana Films cont. If corporations are the special beneficiaries of the protection which the law affords, it is not to the point to say that the law is not expressed to bind them. The relevant question is whether a law which gives the businesses of corporations the protection specified in s 45D is within the ambit of the power. … 220 But does the provision affect the same subject matter as that which has been held in earlier cases to provide a sufficient nexus with the corporations power? The subject matter which the provision selects as the object of its protection is “the business” of the corporation. … A trading corporation is one whose trading activities “form a sufficiently significant proportion of its overall activities as to merit its description as a trading corporation”, [per Mason J in R v Federal Court of Australia; Ex parte WA National Football League (1979) 143 CLR 190 at 233.] The business of a trading corporation therefore includes a proportion of trading activity sufficiently significant to identify the corporation as a trading corporation. A provision which protects the business of such a corporation necessarily 222 protects its trading activity, which is the subject matter that has been held to provide a sufficient nexus with the power in earlier cases. It is true that the provision may also protect an additional subject matter, namely, the non-trading business of a trading corporation. But given that the law exhibits those indicia which would give it the character of a law with respect to trading corporations, how does it lose that character by affecting the non-trading business of those corporations? The non-trading business of a trading corporation is nonetheless an aspect of its existence and activity. A law which, discriminating between one or more of the corporations mentioned in par (xx) and the public at large, protects both the trading and non-trading businesses of trading corporations, wears the appearance of a law with respect to those corporations. It is of the nature of the power that it is a power to make law with respect to corporate persons, not with respect to functions, activities or relationships. The subject matter of activities or relationships which the law affects may be relevant to the question whether the law is truly to be described as a law with respect to corporations mentioned in paragraph (xx), but the validity of the law cannot be determined as though the power were expressed as a power to make laws with respect to the trading or some other activity of or relationship with corporations mentioned in paragraph (xx). Where the subject matter affected by a law is trading activity, the law affects the heart of the purpose for which trading corporations are formed or a significant activity in which they are engaged. That circumstance gives a clear pointer to the character of the law. But if the law affects also more peripheral matters, it does not necessarily lose its character as a law with respect to trading corporations; indeed the additional subject matter may confirm the character which would otherwise be attributed to the law. The combination of elements within s 45D(1) with which these proceedings are concerned discriminates between trading corporations and the public at large, protects the trading activities of those corporations together with any non-trading businesses carried on by them, and confers upon them rights of action to enforce the protection which the provision accords. It is a law with respect to trading corporations within the power conferred upon the Parliament by par (xx). [Murphy J’s reasoning reflected a very broad approach to the ambit of s 51(xx) and is particularly relevant to a consideration of the reasoning of the Work Choices Case see [5.470], especially as to whether the industrial relations power, s 51(xxxv), should be read together with s 51(xx) and whether the ambit of the latter should thereby be limited by considerations relating to the ambit of the former.] Murphy J: 211 The power extends to corpor- 212 ations already formed but is not confined to these. … The power is, of course, plenary; it enables Parliament to make comprehensive laws covering all internal and external relations of foreign trading and financial corporations. It extends to authorize a “Companies Act” providing for the formation, operation and dissolution of trading and financial corporations. Except in a very artificial sense, the power is not available to deal with the formation of foreign corporations, but no doubt authorizes laws dealing with their operation and dissolution. The power obviously authorizes laws dealing with the trading (or financial) operations of such corporations; for example, Parliament can legislate for the standards of products manufactured or sold by foreign and trading corporations and has done so (see ss 62 and 63 of the Act). However, the power is not confined to laws dealing with the trading or financial operations of trading or financial corporations (nor to foreign operations of foreign corporations). It extends to laws dealing with industrial relations so that in relation to such corporations Parliament, uninhibited by limitations expressed in s 51(xxv) [ie [5.390]

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Actors & Announcers Equity Ass’n v Fontana Films cont. s 51(xxxv)], may legislate directly about the wages and conditions of employees and other industrial matters. [In] R v Federal Court of Australia; Ex parte WA National Football League (1979) 143 CLR 190 I stated that “The corporations power may be used not only to protect persons who trade with trading corporations, but also to protect trading corporations in regard to those who deal with them” (at 239). This aspect of the power is not confined to trading corporations nor to protecting them only from those who deal with them. It enables Parliament to protect trading, financial and foreign corporations from others and to protect others from such corporations. Parliament could, if it wished, enact a comprehensive criminal and civil code dealing with the protection of foreign trading and financial corporations, their property and affairs, and also the protection of others in relation to such corporations. Leaving aside subss (5) and (6), s 45D falls easily within this aspect of the corporations power, and is valid. A subsidiary argument that holding companies do not come within the power, even if it were correct (and I do not think it is) 213 raises a hypothetical issue not relevant here because the provision dealing with holding companies is severable. [The other provision challenged was s 45D(5). The effect of s 45D(5) and (6) is stated succinctly by Murphy J (213): Briefly, subs (5) provides that if two or more members or officers of an organization of employees engage in conduct in concert, the organization shall be deemed for the purposes of the Act to engage in that conduct for the purpose or purposes for which that conduct is engaged in by the participants, unless it establishes that it took all reasonable steps to prevent the participants from engaging in that conduct. Sub-section (6) in substance provides that where an organization engages or is deemed by subs (5) to engage in conduct in concert with members or officers of the organization in contravention of subs (1) or (1A) then any loss or damage suffered by a person as a result of the conduct shall be deemed to have been caused by the conduct of the organization. Sub-section (6) also contains various consequential provisions. Section 45D(5) was held invalid by 5:2, Gibbs CJ and Wilson J dissenting.] Mason J: 210 The effect of subs (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 organization establishes that it took all reasonable steps to prevent the participants from engaging in that conduct. The sub-section 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. Consequently the operation of the 211 sub-section is very different from that of the provisions considered in Williamson v Ah On (1926) 39 CLR 95 and Milicevic v Campbell (1975) 132 CLR 307. 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 sub-section. 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 characterized as a law with respect to corporations of the relevant class. In my opinion it is beyond power. [Stephen and Aickin JJ concurred with Mason J.] Brennan J: 223 An organization upon which liability is imposed by reason only of what it is deemed to have done under subss (5) and (6) is beyond the reach of a law enacted pursuant to par (xx). A law which purports to impose liability upon an organization which takes no steps, either participatory or preventive, in the conduct in which its officers or members engage in concert with one another in contravention of subss (1) or (1A) is not a law with respect to corporations. Paragraph (xx) does not empower the Parliament to confer upon a corporation a right against an organization which has not caused it loss or damage merely because two or more of its officers or members cause loss and damage to that corporation. The corporations power does not support a law which makes an organization liable for conduct in which it has not engaged and which it has not counselled, aided or abetted. Sub-section (5) and the part of subs (6) [with] which it is linked are not mere evidentiary provisions of the kind considered in Milicevic v Campbell (1975) 132 CLR 307 and Williamson v Ah On (1926) 39 CLR 416

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Actors & Announcers Equity Ass’n v Fontana Films cont. 95. They do not merely reverse the ordinary onus of proof; they preclude inquiry into whether the organization has in fact engaged in the conduct to which liability is attached. They purport to bring within the operation of a valid law an organization which, not having engaged in the conduct proscribed, is beyond the reach of that law. They are invalid. Murphy J: 213 It is within the general incidental power (s 51(xxxix)) or the specific powers in ss 51 or 52 of the Constitution to provide that one fact or circumstance shall be presumed from the existence of another, provided there is a rational basis for the presumption. Where there is no rational basis for the presumption, then in my opinion Parliament has no power to require a court to act upon the presumption. To do so would be to undermine the judicial 214 power. Clearer still, a law that proof of one fact is deemed to be proof of another fact, so that the party against whom the second fact is alleged is prevented from attempting to disprove it, undermines the judicial power. This does not apply where the second fact is merely another description of, or an inevitable consequence of, the first fact. Sometimes deemed may only mean presumed. Also “deeming” may be used merely as a shorthand method of legislating, so that when the provisions as a whole are considered the vice is only in the form, not the substance. But here the deeming provision in s 45D(5) and the reference to it in s 45D(6) create a statutory fiction (see Griffith CJ in Muller v Dalgety & Co Ltd (1909) 9 CLR 693 at 694), so that the conclusion is to be made even if it is contrary to the fact. In the light of experience of Australian industrial relations, it cannot rationally even be presumed that the conduct in concert of two or more members of an organization of employees is the conduct of the organization. The conduct is often unsupported by or occasionally opposed by the organization. Also such members are often members of other organizations and of industrial and non-industrial bodies which may sponsor the conduct. The fact is that hundreds of thousands of members of federal organizations (of employees) belong to trade or industrial unions registered under State Acts. The effect of s 45D(5) and (6) is that if two or more members or officers of an organization of employees engaged in prohibited conduct in concert this would be deemed to be the conduct of the organization (unless it could establish that it took all reasonable steps to prevent the participants from engaging in that conduct) exposing it to severe consequences. Such a law is not authorized by the corporations’ power or the general incidental power in s 51(xxxix). The legislative powers in s 51 are subject to the Constitution, including Ch III, The Judicature. It is not consistent with the exercise of judicial power that the courts be required to make findings contrary to fact or to adjudge persons guilty or civilly liable upon proof of facts from which a rational conclusion of guilt or liability does not follow but on the basis of a legislative conclusion which is unexaminable judicially. A similar attempt to penalize persons on the basis of legislative or executive opinions unexaminable in the courts was rejected in Australian Communist Party v Commonwealth (1951) 83 CLR 1. Unlike a presumption, the purpose and effect of a deeming provision is to prevent any attempt, by either party, to prove the truth. Legislative provision for suppression of the truth in judicial proceedings is inconsistent with the exercise of judicial power and 215 unconstitutional. Gibbs CJ: 185 The effect of s 45D(5) is that in certain circumstances an organization may be deemed, contrary to the proved facts, to have engaged in conduct in concert with others, for the purpose for which the actual participants engaged in that conduct. It would not be enough for the organization to prove that it did not engage in that conduct and did not have that purpose, if it could not also prove that it took all reasonable steps to prevent the participants from engaging in that conduct. In some circumstances, therefore, an organization might [be] liable to have orders for an injunction and damages made against it, although it had not, by itself or its agents, engaged in the proscribed conduct. The sub-section does more than merely change the onus of proof. It provides that the burden of [proof] may be discharged only in a particular way. … 186 It is a fundamental principle that “the Parliament cannot turn a law which is not upon a subject matter of legislative power into a law which is upon such a subject matter by the simple expedient of creating a statutory fiction”: Herald and Weekly Times Ltd v Commonwealth (1966) 115 CLR at 438. It “may not, by enacting legislation which purports to be merely procedural, extend the operation of its laws to subjects beyond its power”: Milicevic v Campbell (1975) 132 CLR at 316. For example, the Parliament could not take upon itself power to deal with persons not immigrants simply by declaring them to be immigrants (Williamson v Ah On (1926) 39 CLR 95 at 126); its power to make laws with respect to lighthouses [5.390]

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Actors & Announcers Equity Ass’n v Fontana Films cont. would not enable it to make laws with respect to things (not in truth lighthouses) which, in the opinion of the Governor-General, were lighthouses (Australian Communist Party v Commonwealth (1951) 83 CLR 1 at 258); it could not empower a Commissioner to determine an intrastate dispute by making a finding that it was an interstate dispute (R v Portus; Ex parte McNeil (1961) 105 CLR 537 at 540–541). However, the Parliament can place on a person said to be affected by a law the onus of proving that the constitutional fact does not exist. It was so held in Williamson v Ah On … 187 [I]n my opinion s 45D(5) does not relate to the proof of jurisdictional facts. It would, of course, be a jurisdictional fact that a company which it was sought to treat as “the fourth person” to attract the operation of s 45D(1)(b)(i) was a corporation of the kind described in s 51(xx). The provisions of s 45D(1)(b)(i) could not validly be extended to persons who engaged in a boycott of a company which was not a trading corporation by deeming the company to be a trading corporation. Section 45D(5) renders the provisions of s 45D(1) applicable to an organization which in fact has not engaged in any conduct for the purpose or with the effect of causing loss or damage to any corporation, but it does so only if the organization does not establish that it took all reasonable steps to prevent the participants in the conduct from engaging in it. The fact that conduct has been engaged in for the purpose and with the likely effect of causing substantial loss or damage to (inter alia) the trading of a trading corporation formed within the limits of the Commonwealth must be established. Then s 45D(5) in effect renders the organization liable unless it has taken all reasonable steps to prevent the participants from engaging in that conduct, and requires the organization to discharge the onus of proving that it has done so. In my opinion this provision was reasonably incidental to the power conferred by s 51(xx). It is true that two or more members of an organization may engage in conduct that amounts to a secondary boycott without the knowledge, or against the wishes, and even in spite of the endeavours, of those controlling the organization. But it does not follow that it is beyond the power of the Parliament to require the organization to take all reasonable steps to prevent its members from engaging in the conduct. It may be difficult to sheet home to an organization its complicity in a secondary boycott, even when it has been the instigator, and the remedy against individual members may prove ineffectual. The object of s 45D(1)(b)(i) being (inter alia) the protection of the trading 188 activities of trading corporations from substantial loss or damage, it seems to me that to require an organization to take all reasonable steps to prevent its members from engaging in conduct intended and likely to cause that damage is incidental to the attainment of the object. If the Parliament has power to protect the trading activities of the trading corporation, it is for Parliament to decide what measures of protection it will adopt. The wisdom or fairness of those measures is not a matter for the Court. … 189 Once it is accepted that s 45D(5) has nothing to say about the proof of the jurisdictional fact, but is designed to ensure that organizations take reasonable steps to prevent their members from engaging in conduct calculated to cause substantial damage to corporations within s 51(xx), there can be no doubt as to the validity of that part of the provision which casts upon the organization the onus of proving that it took the reasonable steps. For these reasons in my opinion s 45D(5) is valid. If that is so, s 45D(6) is also valid. [Wilson J concurred with Gibbs CJ.]

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For a further discussion of the principle in the Communist Party Case, see Chapter 6. Actors Equity was applied in Victoria v Commonwealth (the Industrial Relations Act Case) (1996) 187 CLR 416 at 556–557, the court noting (at 207 per Mason J) that: There is no distinction, for the purposes of s 51(xx) of the Constitution, between a law which operates to protect the business of a corporation from loss or damage and one that operates to protect the corporation from interference with its trading activities. Each “protects the subject of a power by operating directly on it”.

The Tasmanian Dam Case [5.410] Commonwealth v Tasmania (the Tasmanian Dam Case) (1983) 158 CLR 1 at 146–293, 117–119, 316–318 [The Commonwealth enacted the World Heritage Properties Conservation Act 1983 (Cth), ss 7 and 10 to prevent construction of the Gordon-below-Franklin Dam. The relevant provisions were noted precisely by Gibbs CJ (at 73–74). Reliance was placed on s 51(xx) for the validity of ss 7 and 10. Section 7 provided that the Governor-General may by Proclamation declare that any property is a property to which s 10 applies if it is being, or is likely to be, damaged or destroyed. Section 10(1) defined both “foreign” and “trading” corporations to be corporations within the meaning of s 51(xx) for the purposes of the Act. Section 10(2) prohibited, without the consent of the minister, a “foreign corporation”, a corporation “incorporated in a Territory” and “a trading corporation formed within the limits of the Commonwealth” from engaging in the following conduct in relation to the declared property: drilling for minerals; erecting, demolishing or damaging buildings; cutting down or damaging trees; building roads or tracks; using explosives. Subsection 10(2)(m) provided that “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 the property” was also prohibited. Sub-sections (3) and (4) of s 10 provide as follows: (3) Except with the consent in writing of the Minister, it is unlawful for a body corporate of a kind referred to in sub-section (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 made proclamations in relation to the property which was the subject of the litigation. Regulation 4(2) of the World Heritage Properties Conservation Regulations 1983 (made under the Act) provided that for the purposes of s 10(2)(m) of the Act, the following acts were proscribed: (a) carrying out works in the course of constructing of continuing to construct a dam that, when constructed will be capable of causing the inundation of that relevant property or of any part of that relevant property; (b) carrying out works preparatory to the construction of such a dam; and (c) carrying out works associated with the construction or continued construction of such a dam. Section 10(4) was held valid by 5:2 (Wilson and Dawson JJ dissenting). The validity of subss 10(2) and (3) split the court: Mason, Murphy and Deane JJ holding them valid, Gibbs CJ, Wilson and Dawson JJ invalid. Brennan J considered it unnecessary to determine their validity.] Mason J: 146 The question then is whether the corporations power extends to the regulation of the activities of trading corporations, not being trading activities. … [Mason J discussed Huddart, Parker and the Bank Nationalisation Case and continued:] 148 Since then it has been affirmatively established [5.410]

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The Tasmanian Dam Case cont. that the power extends to the regulation and the protection of the trading activities of trading corporations: Rocla Pipes (1971) 124 CLR, esp at 489–491, 511, 525; Actors and Announcers Equity Association of Australia v Fontana Films Pty Ltd (1982) 150 CLR 169 at 183, 192–196, 204–205, 211–212, 218; Fencott v Muller (1983) 152 CLR 570 at 599. Whether the power goes further remains to be decided. Barwick CJ, Murphy, Brennan JJ and I have indicated that it does: Rocla Pipes (1971) 124 CLR 468 at 490; Fontana Films (1982) 150 CLR at 207–208, 211–212, 218–219. 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. … There is more to be said for the view that the scope of the power is to be ascertained by reference to those matters, whatever they may be, as are relevant to the trading character of a trading corporation. Thus, it might be said that the power extends to, but does not travel beyond, such aspects of a trading corporation’s structure, business and affairs, as have relevance to its character as a trading corporation. This view of the power would, if accepted, enable Parliament to enact legislation regulating (and prohibiting) acts and activities engaged in by a trading corporation for the purpose of engaging in its trading activities. However, it seems to me that there are three powerful objections to the adoption of this limited construction. The first is that this 149 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. In Koowarta (1982) 153 CLR at 209 Stephen J, when referring to the power conferred by s 51(xxvi) with respect to the people of any race, said that “The content of the laws which may be made under it are left very much at large” and that “they may be directed to any aspect of human activity”. 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 Films (1982) 150 CLR at 207–208. In the result we should recognize 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. He said (1909) 8 CLR at 348: The Commonwealth Parliament can make any laws it thinks fit with regard to the operation of the corporation, for example, [it] may prescribe what officers and servants it shall employ, what shall be the hours and conditions of labour, what remuneration shall be paid to them, and may thus, in the case of such corporations, exercise complete control of the domestic trade carried on by them. In short, any law in the form “No trading or financial corporation formed within the Commonwealth shall,” or “Every trading or financial corporation formed, etc, shall,” must necessarily be valid, unless forbidden by some other provision of the Constitution. 150 He then went on to say: 420

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The Tasmanian Dam Case cont. It is not seriously disputed that the words of pl xx, if they stood alone, might be capable of such a construction. … It was the doctrine of reserved powers that led him to depart from this, the natural and literal construction of the words. … 152 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 connexion” with a relevant head of power. … The requirement that there should be a substantial connexion between the exercise of the power and its subject-matter does not mean that the connexion must be “close”. It means only that the connexion must not be “so insubstantial, tenuous, or distant” that it cannot be regarded as a law with respect to the head of power: Melbourne Corporation (1947) 74 CLR at 79. 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 connexion 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 has exercised the corporations power to achieve this end, not for some overriding purpose having a connexion with trading and foreign corporations. But the point is 153 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 connexion with trading and foreign corporations. In the result then, subject to consideration of the argument based on s 100 of the Constitution, 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). [Murphy Jagreed, adopting a broad interpretation of s 51(xx) Deane J also agreed, adding:] Deane J: 268 [s 51(xx)] contains no mention at all of trading activities. Three specified types of corporation are made the subject of the one grant of legislative power. It could not be seriously suggested that the power to legislate with respect to foreign corporations should be confined to a power to legislate with respect to their foreign activities. Consistency would support the approach that the power to legislate with respect to trading or financial corporations formed within the limits of the Commonwealth should not be artificially confined to the trading or the financial activities of such corporations. Nor, in my view, is there any reason in logic or history for so confining the grant of legislative power contained in s 51(xx). No one with knowledge of the political and other non-trading activities of trading corporations in and since the days of the East India Company would suggest that the non-trading activities of trading corporations are any less appropriate to be placed under the legislative control of a national government than are their trading 270 activities. Nor is it realistic to treat the trading activities of a trading corporation as compartmentalized and isolated from its non-trading activities. 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. …271 The provisions of s 10(1) and (2), in their application to trading corporations, are properly to be characterized both as a law with respect to activity on endangered property associated with Australia’s cultural or natural heritage and as a law with respect to trading corporations. Subject to any general constitutional limitation, including any question of “just terms”, they are within the legislative power conferred by s 51(xx) of the Constitution. A similar conclusion [5.410]

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The Tasmanian Dam Case cont. applies in relation to s 10(3) of the Act which provides that, except with the consent of the Minister, it is unlawful for a trading corporation (or a foreign or Territory corporation) to do any other act that damages or destroys identified property which is the subject of a proclamation under s 7. It follows from the foregoing that s 10(4) is also a valid law under s 51(xx). I would mention that nothing in the foregoing should be 272 construed as suggesting that a law comes within the power conferred by s 51(xx) “simply because” it happens to apply to corporations of the kind described in that paragraph: see Actors and Announcers Equity Association of Australia v Fontana Films Pty Ltd (1982) 150 CLR, at 182. Strickland v Rocla Concrete Pipes Ltd (1971) 124 CLR 468 makes clear that that is not so. The provisions of s 10(2) and (3) do not “simply happen” to apply to foreign, trading and Territory corporations. They are laws which apply to foreign, trading and Territory corporations by reference to their character as such and whose operation is restricted to the regulation and control of activities of such corporations. I would also mention that it does not necessarily follow from the foregoing that every law which commences “a trading corporation shall” or “a trading corporation shall not” is a law with respect to trading corporations for the purposes of s 51(xx). That is a question which does not arise in the present case and it is unnecessary to express any view in relation to it. … 293 The HEC is, by virtue of its wide semi-governmental powers and functions, a corporation of an unusual type. It could not inaccurately be described as a “public utility” corporation. It is, nonetheless, a corporation of which a main objective is the sale of power to consumers in Tasmania and which carries on the trading activity of selling such power on a very large scale indeed. Whatever other description might be applied to it, it is, in the context of its overall activities as described in the agreed facts, a trading corporation both for the purposes of s 51(xx) of the Constitution and s 10 of the Act. The questions asked include the question whether, if, as I have held, the HEC is a trading corporation and s 10(4) is valid, the HEC is carrying out the acts referred to in s 10(2) and (3) for the purposes of its trading activities. In my view, that question must be answered in the affirmative. The “Development” upon the Gordon River below the junction with the Franklin is being carried out by the HEC for the purpose of acquiring a new source of power to be sold in the course of its ordinary trading activities. That being the case, the acts involved in the Development are being done “for the purposes of” those trading activities within s 10(4) of the Act. Gibbs CJ[For reasons noted below, Gibbs CJ held the Tasmanian Hydro-Electric Commission not to be a trading corporation within s 51(xx), and continued:] 117 [E]ven 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 118 which I expressed in Actors and Announcers Equity Association of Australia v Fontana Films Pty Ltd (1982) 150 CLR 169 at 182 …: “The words of par (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.” … It is clear however that 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. … In my opinion, with the exception of one sub-section, it [s 10] 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. … 119 Apart from s 10(4), the connexion 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 422

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The Tasmanian Dam Case cont. 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 connexion made by s 10(4) with trading corporations by the use of those words is merely contrived, I consider that the sub-section does have a sufficient connexion 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. [His Honour concluded that “[t]he Commission is not a trading corporation, but in any case, the acts are not done for the purposes of its trading activities” (at 120).] Dawson J: 316 … it is unnecessary and undesirable to attempt to define in this case the outer limits of s 51(xx) … It is sufficient for present purposes to say that for s 10 of the World Heritage Properties Conservation Act 1983 to be a valid law it must be a law with respect to foreign corporations or trading corporations. The words of Gibbs CJ in Actors and Announcers Equity Association of Australia v Fontana Films Pty Ltd (1982) 150 CLR 169 at 182 are, I think, apposite in this case. He points out that the descriptive adjectives “foreign”, “trading” and “financial” in s 51(xx) are important and continues (1982) 150 CLR 169 at 182–183: The words of par (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: … 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. It seems to me that the last line of that passage can be applied in the case of a trading corporation (or, for that matter, a financial corporation) as well as a foreign corporation. For 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. In the present case it is apparent, in my view, that there is no significance in the way in which s 10 of the Act relates to corporations in the fact that they are trading or foreign corporations 317 or, indeed, in the fact that they are corporations at all. They are selected merely as pegs upon which Parliament has sought to hang legislation on an entirely different topic: see Huddart, Parker & Co Pty Ltd v Moorehead (1909) 8 CLR 330 at 415, per Higgins J. If the question is asked whether s 10 is in fact a law dealing with trading or foreign corporations or dealing with some other subject and applying it to trading and foreign corporations, it admits of only one answer. The section is bereft of any attribute which connects it with corporations other than the fact that the command which it contains is directed to trading and foreign corporations. That is not sufficient to make it a law with respect to corporations, let alone trading or foreign corporations. … Section 10 of the World Heritage Properties Conservation Act is, as the long title of the Act would indicate, a law relating to the protection and conservation of certain property forming part of the cultural or natural heritage within the meaning of s 2. It is not a law with respect to corporations. The presence of subs (4) of s 10 may be thought to indicate some doubt as to the validity of the section without it. That sub-section is an attempt, if all else fails, to confine the operation of s 10 to the trading activities of a trading corporation, evidently in the hope that to do so would transform the operation of the section into that of a law with respect to trading corporations. The attempt is a transparent one, for even if the activities which s 10 proscribes are confined to activities for the trading purposes of a trading corporation, it is nevertheless not a law in which the character of a trading corporation has any significance. Activities so confined are not 318 necessarily trading activities. Ultimately anything a trading corporation does is for trading purposes, so that the attempt to narrow the operation of s 10 by the application of subs (4) achieves little if anything. It does no more than direct the same command to trading corporations in another way. It certainly does not convert the law to one with respect to trading corporations. For the foregoing reasons it is my view that s 10 is not a [5.410]

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The Tasmanian Dam Case cont. law with respect to trading or foreign corporations and is wholly invalid. That renders it unnecessary for me to go on and consider whether the Hydro-Electric Commission is a trading corporation within the meaning of s 51(xx). However, had I needed to do so, I should have come to the same conclusion and for the same reasons as the Chief Justice. [Wilson J essentially agreed with Dawson J.]

Notes&Questions

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1.

In a speech delivered a few months after the Tasmanian Dam case, Dawson J remarked: For I think it may fairly be said that, after the Dams Case, if the view of the majority is to be accepted without qualification, there are, apart from express constitutional prohibitions, no practical limits upon the laws which the Commonwealth Parliament can make with respect to trading and financial corporations … [O]nce a corporation is so categorized, upon the majority view, it would seem that there is no law which the Commonwealth Parliament cannot pass with respect to it save for the general prohibitions which the Constitution imposes. There can be erected, if the parliament so desires, a complete set of Commonwealth laws to govern entirely the behaviour of trading and financial corporations which is different from the laws which govern others in the community. And perhaps even others in the community, to the extent that they deal with or through corporations, may be bound by the same laws. Any law which, in effect, begins “a trading or a financial corporation shall …” or “a trading or financial corporation shall not …” is, as I understand the view, a law with respect to trading and financial corporations. It is important to realize the extent of this. Most of the other Commonwealth legislative powers deal with subject matters, not persons. But the corporations power deals with persons, albeit corporate persons, and with respect to them, the current view appears to be that the Commonwealth may make a law upon any subject. There may be separate federal laws of contract, of tort or of property for the trading or financial corporation and those individuals who deal with them. The legal framework within which they operate may be devised entirely for them. This view, Professor Harrison Moore has said, represents “the revival of a medieval system of personal laws” (The Constitution of Commonwealth of Australia (2nd ed, 1910), p 470). When you reflect upon the extent to which the organization of so much of our society is by means of, or in relation to, trading or financial corporations, the immense significance of the fact that Commonwealth power with respect to them is apparently virtually limitless, may be realized.

Sir Daryl Dawson, “The Constitution – Major Overhaul or Simple Tune-up” (1984) 14 Melbourne University Law Review 353 at 359–360. Is Dawson J’s interpretation of the High Court’s decision correct? 2.

Do Wilson and Dawson JJ treat s 51(xx) as a purposive power? – a proposition which Dawson J at least presumably would deny: see Cunliffe v Commonwealth (1994) 182 CLR 272 at 353–354 per Dawson J; Leask v Commonwealth (1996) 187 CLR 579 at 603–604 per Dawson J. Mason and Brennan JJ Tasmanian Dam Case expressly noted that s 51(xx) was not a purposive power: 158 CLR 1 at 153, 241, respectively.

3.

The Tasmanian Dam Case significantly expanded the ambit of s 51(xx) by recognising that it extended beyond the regulation of the trading activities of trading corporations to activities undertaken for the purposes of their trading activities, a point which Gibbs CJ appears not to have fully appreciated. This would enable the Commonwealth to bypass the difficulties involved in O’Sullivan v Noarlunga Meat Ltd, [5.230] when regulating mining, manufacture or agricultural production by trading corporations: see

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GJ Lindell, “The Corporations and Races Powers” (1984) 14 Federal Law Review 219 at 227. As Professor Stellios notes (Stellios, Zines, (6th ed, 2015), at 115): The actual holding in the case may be seen as analogous to the prohibition of the building of a factory for the purposes of production for the purposes of trade. If so, the case opens up considerable power for the Commonwealth to deal with town planning and environmental issues.

4.

5.

Section 10(4) of the World Heritage Properties Conservation Act 1983 (Cth) expressly referred to acts done by a trading corporation “for the purposes of its trading activities”. Would the decision in Tasmanian Dam extend to the regulation of a trading corporation’s activities which in fact are undertaken for the purposes of its trading activities, even though the phrase used in s 10(4) (or its equivalent) does not appear in the legislation? For example, would Commonwealth legislation regulating “production of commodities for sale” (or even simply “production of commodities”) by trading corporations fall within s 51(xx)? The remarks of Mason CJ in Re Dingjan; Ex parte Wagner (1995) 183 CLR 323 at 334 ([5.450]) suggest that it would. For a discussion of the widest view of s 51(xx) in Tasmanian Dam, see Lindell (1984) at 228–231.

Re Dingjan; Ex parte Wagner [5.430] Re Dingjan; Ex parte Wagner (1995) 183 CLR 323 at 336–370, 364–367, 333–334 [Tasmanian Pulp & Forest Holdings Ltd was a timber company which entered into a contract with the Mr and Mrs Wagner for the harvesting of timber, who in turn subcontracted the transporting of the timber to the company’s woodchip mill to Mr and Mrs Dingjan. These arrangements worked satisfactorily until the company altered its practices, and hence its requirements, whereupon the Wagners altered their arrangements with their subcontractors, the Dingjans. The Dingjans, together with the union to which they belonged, the Transport Workers’ Union, sought a review and variation of their contracts with the Wagners pursuant to the Industrial Relations Act 1988 (Cth); whereupon the Wagners gave notice to the Dingjans terminating their contracts. Subject to s 127C, ss 127A and 127B of the Act authorized the Australian Industrial Relations Commission to review and vary contracts for services which bind an independent contractor and which relate to “the performance of work by the independent contractor”: s 127A(1). Section 127A(2) conferred power on the Commission to review contracts on the grounds that they were “unfair”, “harsh” or “against the public interest”. “Contract” was defined as applying to “any condition or collateral arrangement relating to such contract”: s 127A(1). Section 127B provided that the Commission may make orders setting aside the whole or part of the contract, or varying the contract. Section 127C(1) then, relevantly for the present consideration of s 51(xx), limited the powers of the Commission by providing that sections 127A and 127B apply only as follows: (a) in relation to a contract to which a constitutional corporation is a party; (b) in relation to a contract relating to the business of a constitutional corporation; (c) in relation to a contract entered into by a constitutional corporation for the purposes of the business of the corporation. “Constitutional corporation” was defined in s 127C(2) to mean “a corporation to which paragraph 51(xx) of the Constitution applies”. Given the particular contractual relations of the parties, neither of which were themselves corporations, the critical section at issue was s 127C(1)(b). The court held s 127C(1)(b) invalid by 4:3, Mason CJ, Deane and Gaudron JJ dissenting.] Brennan J: 336 To attract the support of s 51(xx), it is not enough that the law applies to constitutional corporations and to other persons indifferently (Strickland v Rocla Concrete Pipes Ltd (1971) 124 CLR 468 at 489–490, 512, 516). 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 (Actors and Announcers Equity Association of Australia v Fontana Films Pty Ltd (1982) 150 CLR 169 at 218, 220, 222). A validating connection between a law and s 51(xx) may consist in the [5.430]

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Re Dingjan; Ex parte Wagner cont. differential operation which the law has on constitutional corporations (Commonwealth v Tasmania (the Tasmanian Dam Case) (1983) 158 CLR 1 at 240) albeit the law imposes duties or prescribes conduct to be performed or observed by others (Actors and Announcers Equity Association v Fontana Films Pty Ltd (1982) 150 CLR 169 at 216). Thus, 337 s 45D of the Trade Practices Act 1974 (Cth) which prohibited secondary boycotts was held to be supported by s 51(xx) in Actors and Announcers Equity Association v Fontana Films Pty Ltd (1982) 150 CLR 169 by reason of the protection it afforded against conduct calculated to cause damage to the business of a trading corporation (Fontana Films (1982) 150 CLR 169 at 183, 194, 200, 206, 218, 222). It was the effect of s 45D which gave that law the character of a law with respect to constitutional corporations. … In that case, Gibbs CJ postulated as a test of validity that the constitutional character of a corporation “should be significant in the way in which the law relates to it”. That test was accepted by Dawson J Tasmanian Dam Case (1983) 158 CLR 169 at 316. Though I see no error in this approach, it leaves much to judicial impression from case to case. If the constitutional character be “significant” to the relationship with the law, it must be because the character of the corporation is the factor which attracts the operation of the law. If that be so, I perceive no distinction between that test and a test of discriminatory operation. I prefer to state the test as one of discrimination, for that test admits of an objective ascertainment of the rights, duties, powers or privileges which the law creates or affects. The law in the present case is not expressed to impose any duty or liability or to confer any right or privilege on a constitutional corporation: s 127B(1) confers on the Australian Industrial Relations Commission a power to affect the rights and obligations of parties to a contract, whether or not those parties are or any of them is a constitutional corporation. Therefore, if the law is a law with respect to constitutional corporations, it must have that character by reason of the differential effect on constitutional corporations which it produces. We must therefore turn to an examination of the operation of the law. Section 127B(1) confers on the Commission a power, qualified by ss 127A and 127B, to order the setting aside of the whole or part of, or the varying of, a contract for services binding on an independent contractor and relating to the performance of work by the independent contractor other than work for the private and domestic purposes of the other party to the contract. Conditions or collateral arrangements relating to such a contract are similarly liable to be set aside or varied. 338 The independent contractor must be, by definition (s 4(1A)), a natural person. The power arises where the Commission forms and records an opinion that the contract is, in whole or in part, unfair, harsh or against the public interest. Sections 127A and 127B apply only in relation to contracts of a kind prescribed by s 127C(1). Paragraph (b) of s 127C(1), the only paragraph relevant to the present case, prescribes contracts “relating to the business of a constitutional corporation”. Unlike pars (a) and (c), par (b) does not require that the corporation be a party to the contract. The relationship on which par (b) fastens does not have to be beneficial or prejudicial to a constitutional corporation or its business. It is sufficient that there be a relationship between the contract and the business of the corporation, whether the relationship be direct or indirect and whether or not the relationship affects the carrying on of its business by the corporation. An exercise of the power to set aside or vary a particular contract will affect the parties to the contract but it may not affect the business of the relevant corporation at all. Take, for example, a contract between A and B, both being natural persons, for the delivery by B as an independent contractor of goods to A’s customers, some of whom are constitutional corporations others of whom are not. If the contract were varied as to the place for picking up the goods, the loading machinery to be provided, the make or specifications of the delivery vehicle, the number or proportion of deliveries to be made by B or the period for which the contract is to subsist, the variation might not affect the businesses of A’s customers (whether corporate or not). They might well be unconcerned by the variation. Moreover, the corporate nature of the owner of a particular business has no rational connection with the power which ss 127A and 127B purport to confer. The power is conferred to eliminate unfairness or harshness as between the parties to the contract or to prevent their being bound by terms contrary to the public interest. The circumstances which produce unfairness, harshness or damage to the public interest may well be unrelated to the corporate personality of the owner of the business or of one of the businesses 426

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Re Dingjan; Ex parte Wagner cont. to which the contract relates. Sections 127A and 127B would have an adventitious operation if the power they confer were enlivened or extinguished according to the corporate or non-corporate personality of the owner of the relevant business or businesses. To take the delivery contract as an example: the power would be enlivened if one of A’s customers were a constitutional corporation but would be extinguished if the corporate customer transferred the business to a natural person. In my opinion, the connection between ss 127A and 127B as applied by s 127C(1)(b) on the one hand and s 51(xx) of the Constitution on the other is so tenuous and fortuitous that it is wholly insufficient to impart to the former provisions the character of a law with respect to trading or financial corporations. It is possible, of course, to postulate cases falling within s 127C(1)(b) that would be an appropriate subject of a law supported 339 by s 51(xx). 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 where the contract is unfair or harsh or contrary to the public interest would be a law supported by s 51(xx). A contract of that kind would fall within s 127C(1)(b) and it would be of a kind amenable to control by a law enacted under s 51(xx) because 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. But s 127C(1)(b), as we have seen, applies ss 127A and 127B to contracts that may have no effect on constitutional corporations or on their businesses. It is too wide and therefore invalid. The legislative power conferred by s 51(xx) is not a power to make laws with respect to things relating to corporations or things relating to the businesses of corporations. A law of that kind bears the character of a law with respect to constitutional corporations only if the relationship governed by the law affects constitutional corporations in a discriminatory manner. If this be the test by which the character of a law is determined, constitutional corporations must be affected in some respect sufficiently material to give significance to their discriminatory treatment. [Dawson J essentially agreed with Brennan J and Toohey J also held that s 127C(1)(b) was invalid for similar reasons.] Dawson J: 347 The power to make laws with respect to trading or financial corporations is considerably more confined than a power to make laws with respect to matters related to the business of trading or financial corporations. And a contract which merely relates to the business of a constitutional corporation may be a contract which deals with matters far removed from the subject matter of constitutional corporations – for example, a contract between a contractor and a subcontractor to provide services for a constitutional corporation in the form of landscaping, interior design or catering for the annual general meeting. The examples are limitless. It is not possible to say, as the respondents contended, that a law with respect to a contract which merely relates to the business of a constitutional corporation amounts to a law with respect to constitutional corporations. The 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. The required relationship is adopted merely as a means of introducing constitutional corporations as a peg upon which to hang legislation, not upon the subject of constitutional corporations, but upon an entirely different subject. … 349 … Paragraph (b) … require[s] a relationship between the relevant contract and the business of a constitutional corporation, but that does not supply a sufficient connection with the subject matter of constitutional corporations for it to be said that the resulting law is a law with respect to foreign corporations or trading or financial corporations within the meaning of s 51(xx). For these reasons, s 127C(1)(b) is invalid, as are ss 127A and 127B to the extent that they need to be read with s 127C(1)(b). McHugh J: 368 Unlike most of the powers conferred by s 51, … the corporations power is directed to persons … Although laws that regulate the activities, functions, relationships or business of corporations are clearly laws with respect to corporations, the power conferred by s 51(xx) also extends to any subject that affects the corporation. [His Honour referred to Fontana Films with approval and as an example.] … It does not follow, however, that s 51(xx) authorises any law that operates on conduct that relates to the activities, functions, relationships or business of trading, financial or foreign corporations. The law must be a law “with respect to” a corporation of the kind described by s 51(xx). That means that the law must have “a relevance to or connection with” [5.430]

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Re Dingjan; Ex parte Wagner cont. (Grannall v Marrickville Margarine Pty Ltd (1955) 93 CLR 55 at 77) at s 51(xx) corporation. It is not enough, however, that the law “should refer to the subject matter or apply to the subject matter” (Bank of NSW v Commonwealth (1948) 76 CLR 1 at 186). In determining whether a law is “with respect to” a head of power 369 in s 51 of the Constitution, two steps must be taken. First, the character of the law must be determined. That is done by reference to the rights, powers, liabilities, duties and privileges which it creates (Commonwealth v Tasmania (the Tasmanian Dam Case) (1983) 158 CLR 1 at 152). Secondly, a judgment must be made as to whether the law as so characterised so operates that it can be said to be connected to a head of power conferred by s 51. In determining whether the connection exists, the practical, as well as the legal, operation of the law must be examined (Herald & Weekly Times Ltd v Commonwealth (1966) 115 CLR 418 at 440; the Tasmanian Dam Case (1983) 158 CLR 1 at 152). If a connection exists between the law and a s 51 head of power, the law will be “with respect to” that head of power unless the connection is, in the words of Dixon J (Melbourne Corporation v Commonwealth (1947) 74 CLR 31 at 79), “so insubstantial, tenuous or distant” that it cannot sensibly be described as a law “with respect to” the head of power. Where a law purports to be “with respect to” a s 51(xx) corporation, it is difficult to see how it can have any connection with such a corporation unless, in its legal or practical operation, it has significance for the corporation. That means that it must have some significance for the activities, functions, relationships or business of the corporation. If a law regulates the activities, functions, relationships or business of a s 51(xx) corporation, no more is needed to bring the law within s 51(xx) (see Huddart, Parker & Co Pty Ltd v Moorehead (1909) 8 CLR 330 at 348, where Griffith CJ said that any law in the form “No trading or financial corporation formed within the Commonwealth shall” or “Every trading or financial corporation formed, etc, shall” was a law validly made under s 51(xx) unless forbidden by some other provision of the Constitution). That is because the law, by regulating the activities, etc, is regulating the conduct of the corporation or those who deal with it. Further, if, by reference to the activities or functions of s 51(xx) corporations, a law regulates the conduct of those who control, work for, or hold shares or office in those corporations, it is unlikely that any further fact will be needed to bring the law within the reach of s 51(xx). It is not enough, however, to attract the operation of s 51(xx) that the law merely refers to or operates upon the existence of a corporate function or relationship or a category of corporate behaviour. The activities, functions, relationships and business of s 51(xx) corporations are not the constitutional switches that throw open the stream of power conferred by s 51(xx). In Actors and Announcers Equity Association v Fontana Films Pty Ltd (1982) 150 CLR 169 at 222, Brennan J said: “It is of the nature of the power that it is a power to make laws with respect to corporate persons, not with respect to functions, activities or relationships.” 370 So, where a law seeks to regulate the conduct of persons other than s 51(xx) corporations or the employees, officers or shareholders of those corporations, the law will generally not be authorised by s 51(xx) unless it does more than operate by reference to the activities, functions, relationships or business of such corporations. A law operating on the conduct of outsiders will not be within the power conferred by s 51(xx) unless that conduct has significance for trading, financial or foreign corporations. In most cases, that will mean that the conduct must have some beneficial or detrimental effect on trading, financial or foreign corporations or their officers, employees or shareholders. Thus, laws that regulate conduct that promotes or protects the functions, activities, relationships or business of such corporations or laws that regulate conduct conferring benefits on those corporations are laws with respect to s 51(xx) corporations even though they are also laws with respect to that conduct. But a law that does no more than make some activity of a s 51(xx) corporation the condition for regulating the conduct of an outsider will ordinarily not be a law with respect to those corporations. If a law regulates conduct that has no significance for s 51(xx) corporations, it is not a law with respect to those corporations even if that conduct is connected to or even based on what a corporation does. Thus, a law that sought to regulate the remuneration of employment contracts made by financial analysts would not be a law with respect to s 51(xx) corporations even if the work of the analysts was 428

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Re Dingjan; Ex parte Wagner cont. entirely based upon the business activities of corporations. Laws that seek to regulate such contracts are laws with respect to employment contracts, but they are not laws with respect to corporations. Sections 127A, 127B, 127C(1)(b) combined to give the Industrial Relations Commission jurisdiction to set aside or vary a contract that was unfair, harsh or against the public interest if the contract was one “relating to the business of” a s 51(xx) corporation. The term “relating to” is extremely wide. But it predicates the existence of a relationship between a contract and the business of a s 51(xx) corporation (Tooheys Ltd v Commissioner of Stamp Duties (NSW) (1961) 105 CLR 602 at 620, per Taylor J). In some statutes, the context of the term “relating to” requires that the relationship be substantial or direct. Nothing in s 127C or in the rest of the Act, however, requires that the relationship required by s 127C(1)(b) should be narrowly construed. In its natural and ordinary meaning, the provision requires no more than a relationship, whether direct or indirect, between a contract and the business of a s 51(xx) corporation. The validity of s 127C(1)(b) does not depend upon the directness or indirectness of the relationship between the contract and the business of a s 51(xx) corporation. The validity of the paragraph depends upon whether a contract referred to in s 127A has significance for such a corporation. A contract would have significance if it conferred some benefit or imposed some detriment on a s 51(xx) corporation or if it affected the activities, functions, relationships or business of such a corporation. But 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. The Commission is given jurisdiction to intervene and set aside a contract on the bare condition that the contract relates to the business of a s 51(xx) corporation. Whether the unfairness, harshness or contrariety to the public interest of the contract has any consequences or significance for the corporation is of no relevance whatever. Jurisdiction to make orders arises once a relationship between the contract and the business of a s 51(xx) corporation exists. That is not enough in my opinion to make ss 127A, 127B and 127C(1)(b) a law with respect to a s 51(xx) corporation. It follows that s 127C(1)(b), as enacted, was not authorised by s 51(xx) of the Constitution. [Brennan, Dawson, Toohey and McHugh JJ held that s 127C(1)(b) could not be read down and was, therefore, wholly invalid. The dissenting judgment of Gaudron J is of particular interest because it would appear that it was her Honour’s reasoning which was adopted by the majority of the High Court in the Work Choices Case which is extracted below and remains presently the leading case.] Gaudron J (dissenting): 364 The argument that ss 127A and 127B, in their operation pursuant to s 127C(1)(b), are not authorised by s 51(xx) was largely made by reference to the nature of the power conferred by that paragraph. In particular, it was emphasised that it 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” (New South Wales v Commonwealth (the Incorporation Case) (1990) 169 CLR 482 at 497.) Even so, the power is a plenary power and is to be construed according to its terms and not by reference to implications or limitations which those terms do not require … When s 51(xx) is approached on the basis that it is to be construed according to its terms and not by reference to unnecessary implications and limitations, it is clear that, at the very least, a law which is expressed to operate on or by reference to the business functions, activities or relationships of constitutional corporations is a law with respect to those corporations. In this regard, it is sufficient to note that, 365 although the business activities of trading and financial corporations may be more extensive than their trading or financial activities, those corporations, nonetheless, take their character from their business activities (see generally State Superannuation Board v Trade Practices Commission (1982) 150 CLR 282 at 303–306; Fencott v Muller (1983) 152 CLR 570 at 601–602). As was pointed out by Gibbs CJ in Actors and Announcers Equity Association of Australia v Fontana Films Pty Ltd ((1982) 150 CLR 169 at 185; see also at 184–185, 195, 203–204, 215, 221–222), “[i]t is the business of a trading corporation to trade, and its business is its trading”. So too, it is the business of a financial corporation to engage in financial transactions and its business consists of the transactions in which it engages (see State Superannuation Board v Trade Practices Commission (1982) 150 CLR 282 at 305–306). And a foreign corporation is simply a corporation formed outside Australia that carries on business in Australia (see the Incorporation Case (1990) 169 CLR 482 at 497–498). [5.430]

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Re Dingjan; Ex parte Wagner cont. As their business activities signify whether or not corporations 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, 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. And those functions, activities and relationships will, in the ordinary course, involve individuals, and not merely individuals through whom the corporation acts, as in Fencott v Muller (1983) 152 CLR 570 (see also R v Australian Industrial Court; Ex parte CLM Holdings Pty Ltd (1977) 136 CLR 235), or the control of whose conduct is directly connected with the regulation or protection of the corporation, as in Actors and Announcers Equity Association (1982) 150 CLR 169. Once it is accepted that s 51(xx) extends to the business functions, activities and relationships of constitutional corporations, it follows that it also extends to the persons by and through whom they carry out those functions and activities and with whom they enter into those relationships. And 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 relating to the business of a constitutional corporation”, as those words are used in s 127C(1)(b) of the Act, and which does not fall within s 127C(1)(a) … or s 127C(1)(c), will inevitably have as its other party a person who performs the business functions or 366 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 the legislative power conferred by s 51(xx) of the Constitution, at least to the extent of those functions and activities or that business relationship. It is possible that, as a matter of construction, ss 127A and 127B extend to the review and variation of some aspect of a contract that has no connection with the business activities of a constitutional corporation and which, thus, is separate and distinct from the business functions and activities which an individual performs for the corporation or the business relationship which he or she has with it. If they do, a question arises whether s 51(xx) extends to authorise laws binding on individuals with respect to matters which travel beyond the corporate functions and activities in which they participate or the relationships which they have with a constitutional corporation. The same question arises if ss 127A and 127B allow a contract to be varied so that it has an operation unrelated to the business of a constitutional corporation. The question whether ss 127A and 127B operate pursuant to s 127C(l)(b) in some respect that is unrelated to the business activities of a constitutional corporation can be put to one side. It does not arise on the facts of this case. So too, the question whether s 51(xx) authorises that operation need not be pursued. Clearly, s 127C(1)(b) can be read down pursuant to s 15A of the Acts Interpretation Act 1901 (Cth), if necessary, to apply to contracts only to the extent that they relate to the business of a constitutional corporation (See, as to reading down “general” words, Pidoto v Victoria (1943) 68 CLR 87 at 109–111; Bank of NSW v Commonwealth (the Bank Nationalisation Case) (1948) 76 CLR 1 at 252, 369–372; Strickland v Rocla Concrete Pipes Ltd (1971) 124 CLR 468 at 516–520, 526–527) … 367 As already indicated, even if ss 127A and 127B are construed to operate with respect to matters which travel beyond the business functions and activities which an individual performs for a constitutional corporation or the business relationship he or she has with it, no question of constitutional validity arises in this case. This case is concerned solely with the rights and obligations of persons, namely, the prosecutors, who entered into a contractual relationship with a trading corporation, the Company, for the performance of work by or in consequence of which it, the Company, carries out its business activities. And it is concerned only with that work and the rights and obligations arising out of or in connection with that work. When applied to the facts and circumstances with which this case is concerned, ss 127A and 127B operate no differently from a law providing that a person who contracts with a constitutional corporation to procure the performance of work by or in consequence of which it, the corporation, carries out its business activities shall not procure that work on terms that are unfair, harsh or against the public interest. As already explained, that operation, being an operation on persons who are in a business relationship with a constitutional corporation in respect of matters the subject of their particular relationship, is within the power conferred by s 51(xx). [Deane J concurred with Gaudron J.] 430

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Re Dingjan; Ex parte Wagner cont. Mason CJ (dissenting, agreed with the reasons of Gaudron J): 333 I adhere to the view … that the corporations power is not confined in its application to the trading activities of trading corporations and the financial activities of financial corporations (Actors and Announcers Equity Association of Australia v Fontana Films Pty Ltd (1982) 150 CLR 169 at 207 (Aickin J concurring at 215); Commonwealth v Tasmania (the Tasmanian Dam Case) (1983) 158 CLR 1 at 148–150; see also at 179, per Murphy J; at 270–271, per Deane J). The power must be construed as a plenary 334 power with respect to the categories of corporations mentioned in s 51(xx) of the Constitution. On this view, the power is not limited to the regulation of the functions, activities and relationships of constitutional corporations … which can be described as business functions, activities and relationships. Further … the power extends to the enactment of laws dealing with activities undertaken for the purposes of the business of a constitutional corporation (Tasmanian Dam Case (1983) 158 CLR 1 at 157).

[5.440]

Notes&Questions

1.

What do Gibbs CJ and Dawson J mean in requiring that “the nature of the corporation” (Gibbs CJ) or its “personality” (Dawson J) be a “significant element” in the legislation if it is to fall within s 51(xx)? Was that the case in Concrete Pipes and Actors Equity where Gibbs CJ upheld the relevant legislation?

2.

In Victoria v Commonwealth (the Industrial Relations Act Case) (1996) 187 CLR 416, Brennan CJ, Toohey, Gaudron, McHugh and Gummow JJ remarked (at 558): It follows from Re Dingjan; Ex parte Wagner that not every direction to a third party which relates to the business of a s 51(xx) corporation is a law with respect to a corporation of that kind. However, a law which prevents third parties from entering into agreements with a s 51(xx) corporation for the purpose of preventing or hindering the corporation in its trading activities is one so closely connected with the regulation of the corporation in the conduct of its trading activities as to be a law with respect to a s 51(xx) corporation.

3.

Citing Dingjan, Mason CJ remarked extra-judicially that “there are signs that the corporations power may have travelled as far as it will go”: Sir Anthony Mason, “Towards 2001–Minimalism Monarchism or Metamorphism?” (1995) 21 Monash University Law Review 1 at 11. To what extent is the decision in the Work Choices Case, see [5.460], an indication to the contrary? See Stellios, Zines (6th ed, 2015), pp 126-127. It is notable in this respect that in Dingjan McHugh J, one of the majority justices, adopted the widest of the three interpretations of s 51(xx) taken in Tasmanian Dam: see Dingjan at 368, 369.

[5.450] The most recent case which defined the ambit of s 51(xx) is the Work Choices Case,

extracted immediately following. The decision of the majority contradicted Sir Anthony Mason’s prediction, with which the present author concurred prior to Work Choices, that “the corporations power may have travelled as far as it will go” following Dingjan. For the majority expressly adopted the following statement of the issue by Gaudron J dissenting (but not on this point) in Re Pacific Coal Pty Ltd; Ex parte Construction, Forestry, Mining and Energy Union (Award Simplification Case) (2000) 203 CLR 346 at 375 [83], being an amplification of her Honour’s reasoning in Re Dingjan: 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 [5.450]

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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. More relevantly for present purposes, I have no doubt that it 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.

The importance of the Work Choices Case cannot be underestimated. It may be said to stand with the Engineers’, Tasmanian Dam and the Uniform Tax cases as watershed decisions of the High Court relating to the legislative power of the Commonwealth with very significant consequences to Australian federalism. For this reason, the judgments are extracted at length, including the dissenting judgments. The reasoning is very significant for what it says about constitutional interpretation, the concept of federalism and “federal balance” and the issue of the relationship of the s 51 heads of power inter se, shaping the ultimate conclusion upon the ambit of s 51(xx).

Work Choices Case [5.460] New South Wales v Commonwealth (2006) 229 CLR 1. (Many references omitted) Gleeson CJ, Gummow, Hayne, Heydon and Crennan JJ: Introduction 55 [1] In December 2005, the Parliament enacted the Workplace Relations Amendment (Work Choices) Act 2005 (Cth) (“the Amending Act”). The Amending Act made extensive amendments to the Workplace Relations Act 1996 (Cth) (“the Act”). The Act in its form before those amendments will be referred to as “the previous Act”; the Act in its form after those amendments will be referred to as “the new Act”. The most notable change effected by the Amending Act was an alteration of the constitutional basis of the Act. Although certain provisions of the previous Act had been enacted in reliance on the power conferred by s 51(xx) of the Constitution … its general framework was based upon the power conferred by s 51(xxxv) (the conciliation and arbitration power). Although certain provisions of the new Act are still based on the conciliation and arbitration power, and although the Amending Act invoked other heads of Commonwealth legislative power, the new Act is now, in large part, an exercise of the corporations power. The Parliament’s capacity to rely upon that power to sustain the legislation is the principal question in issue in these proceedings. The litigation and the legislation The litigation: 57 [4] Seven actions [brought by NSW, Victoria, Queensland, South Australian and Western Australia, and two trade unions, with the Attorney-Generals of Tasmania, the Northern Territory and the ACT intervening in support] were commenced in this Court seeking declarations of invalidity of the whole Amending Act, or, alternatively, of specified provisions. … To each statement of claim the Commonwealth demurred, the ground of demurrer being that none of the impugned provisions was invalid. Those demurrers are now before this Court for decision. … The legislation: 58 [7] The principal object of the new Act is stated in s 3 as follows: …to provide a framework for cooperative workplace relations which promotes the economic prosperity and welfare of the people of Australia … 59 [8] The constitutional basis upon which the “framework for cooperative workplace relations” is constructed is revealed by the definitions of “employee” and “employer” in ss 5 and 6 of the new Act. Those definitions are central to the operation of much of the new Act. The definition of “employee” in s 5(1) is an individual so far as he or she is employed, or usually employed, as described in the definition of “employer” in s 6(1), by an employer. Section 6(1) provides the “basic definition” of “employer” which applies unless the contrary intention appears (as it does in certain provisions): … “a constitutional corporation, so far as it employs, or usually employs, an individual; …” 60 [9] The term “constitutional corporation” is defined in s 4 to mean a corporation to which s 51(xx) of the Constitution applies. … [10] The definitions of employee and employer invoke other heads of power as well as the corporations power. … [I]n its practical application the new Act depends in large 432

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Work Choices Case cont. measure upon the assumption that the corporations power is capable of sustaining the legislative framework. … [13] Part VI of the previous Act dealt with the prevention and settlement of interstate industrial disputes by the processes of conciliation and arbitration engaged in by the Australian Industrial Relations Commission (“the AIRC”). Part VI has been repealed. Parts 7 and 10 of the new Act deal with some matters of a kind formerly dealt with by procedures for prevention and settlement of interstate industrial disputes. [14] Part 7 is headed “The Australian Fair Pay and Conditions Standard”. 61 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 and related entitlements. The provisions of Pt 7 together constitute the Australian Fair Pay and Conditions Standard (“the Pay and Conditions Standard”). … [17] … [O]ne of the principal issues in the case may be stated by asking whether a law that provides that a corporation of a kind referred to in s 51(xx) of the Constitution must pay its employees certain minimum wages, and must provide them with certain leave entitlements, and must not require them to work more than a certain number of hours, is a law with respect to such corporations. … The principal issue: Constitution, s 51(xx) … 68 [45] In the Explanatory Memorandum …, the first of the major changes to be implemented by the Bill was said to be to “simplify the complexity inherent in the existence of six 69 workplace relation jurisdictions in Australia by creating a national workplace relations system based on the corporations power that will apply to a majority of Australia’s employers and employees” [and] “[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% 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% was accompanied by an assertion that 49% of small businesses employing staff are currently incorporated. [46] In its submissions, the Commonwealth was concerned to make the point that reliance on the corporations power to support legislation relating to industrial relations matters and terms and conditions of employment in 2005 was not novel. The majority referred to these and continued:] … 70 [48] In 1909, in Huddart, Parker & Co Pty Ltd v Moorehead (1909) 8 CLR 330, this Court dealt with a challenge to the validity of certain provisions of the Australian Industries Preservation Act 1906 (Cth), which prohibited corporations of the kind referred to in s 51(xx) from engaging in certain forms of anti-competitive behaviour. In substance the power which the Parliament then exercised, or purported to exercise, was no different from the power that sustains much of the Trade Practices Act 1974 (Cth). The Court was divided in opinion. The majority, strongly influenced by the now discredited doctrine of reserved State powers, held that s 51(xx) was to be read down because of the provisions of s 51(i), which empowers the Parliament to make laws with respect to trade and commerce with other countries, and among the States. The impugned legislation covered anti-competitive activity (by constitutional corporations) in intra-State trade. Plainly, it was a law with respect to trade and commerce, but not only with respect to trade and commerce of the kind described in s 51(i). The question was whether it also was a law with respect to corporations of the kind described in s 51(xx). Griffith CJ, who was in the majority, said (at 348): It is common ground that [the relevant sections of the Australian Industries Preservation Act], as framed, extend to matters relating to domestic trade within a State, and the question is whether the power to make laws with respect to “foreign corporations, and trading or financial corporations formed within the limits of the Commonwealth” extends to the governance and control of such corporations when lawfully engaged in domestic trade within the State. If it does, no limit can be assigned to the exercise of the power. The Commonwealth Parliament can make any laws it thinks fit with regard to the operation of the corporation, for example, may prescribe what officers and servants it shall employ, what shall be 71 the hours and conditions of labour, what remuneration shall be paid to them, and may thus, in the case of such corporations, exercise complete control of the domestic trade carried on by them. [5.460]

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Work Choices Case cont. [49] By “domestic trade”, Griffith CJ meant “domestic trade within the State”, that is, trade other than trade of the kind referred to in s 51(i). He treated, as part of such trade, contracts made between constitutional corporations and their employees. He read down s 51(xx) by reference to the limitations inherent in s 51(i). The foundation of the reasoning of the majority in Huddart Parker was undermined by … the Engineers’ Case in 1920, but the decision was not formally overruled until 1971, when Strickland v Rocla Concrete Pipes Ltd (“the Concrete Pipes Case”) (1971) 124 CLR 468 held that Huddart Parker was wrongly decided. Since then, the corporations power has provided the constitutional basis for legislation prohibiting anti-competitive conduct by constitutional corporations, including conduct in what Griffith CJ called “domestic trade”, notwithstanding the limitations upon the power of the Parliament to pass laws with respect to such trade contained within s 51(i). [50] No party to these proceedings questioned the authority of the Engineers’ Case, or the Concrete Pipes Case, or the validity of the Trade Practices Act 1974 in its application to the domestic (intra-State) trade of constitutional corporations. Necessarily, however, the plaintiffs experienced difficulty in accommodating their submissions to those developments. If s 51(xx) is not affected by the limitations inherent in s 51(i), why is it affected by the limitations inherent in s 51(xxxv)? If, in the exercise of its powers under s 51(xx), the Commonwealth Parliament can regulate the terms and conditions on which constitutional corporations may deal with their customers, or their suppliers of goods or services, why can it not, in the exercise of the same powers, regulate the terms and conditions on which constitutional corporations may deal with employees, or with prospective employees? If, as Griffith CJ recognised, a corporation’s dealings with its employees are part of its trading activities, how can it be that the Parliament has power to prohibit constitutional corporations from engaging in some forms of business activities (such as anti-competitive behaviour) but not others (such as engaging in certain industrial practices)? Why is not use of the corporations power to regulate aspects of intra-State trade just as much an incursion into State legislative power as use of the corporations power to regulate aspects of industrial relations? [51] [The majority indicated the importance of applying established principles of constitutional interpretation and continued:] … 72 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. That error is compounded if the conclusion which is reached about the one “real” or “true” or “proper” character of a law proceeds from a premise which assumes, rather than demonstrates, a particular division of governmental or legislative power, or if it proceeds from the mischaracterisation of the subject-matter of s 51(xxxv) as “industrial relations”. Resort to undefined concepts of “industrial affairs”, “industrial relations”, and “industrial matters” (all of which have somewhat different meanings) should not be permitted to obscure the fact that s 51(xxxv) uses none of those expressions; it speaks of “industrial disputes”. [52] To say, as appears accepted on all hands in this litigation, that the Constitution is to be read as a whole and as the one coherent document does not necessarily advance the argument on either side of the record. It merely occasions further inquiry with respect to the particular issue to be determined. … [53] The arguments of the plaintiffs included a submission that the power conferred by s 51(xx) was restricted to a power to regulate the dealings of constitutional corporations with persons external to the corporation, but not with employees (or, apparently, prospective employees). It was also submitted that s 51(xx) should be read down, or restricted in its operation, by reference to the presence in s 51 of par (xxxv). … Just as Griffith CJ in Huddart Parker read down s 51(xx) by reference to the terms of s 51(i), so the plaintiffs invited the Court to read down the general scope of s 51(xx) by reference to the terms of s 51(xxxv). Alternatively, it was argued that, even if the presence of s 51(xxxv) did not affect the general ambit of s 51(xx), at least it operated to restrict the capacity of the Parliament to 73 enact a law that can be characterised as a law with respect to the prevention and settlement of industrial disputes. … [54] Underlying all these arguments there was a theme, much discussed in the authorities on the corporations power, that there is a need to confine its operation because of its potential effect upon the (concurrent) legislative authority of the States. The Constitution distinguishes in s 107 and s 109 between legislative powers 434

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Work Choices Case cont. exclusively vested in the Parliament of the Commonwealth and inconsistency between federal and State laws made in exercise of concurrent powers. Section 107 does not vest exclusive powers in the State legislatures. … References to the “federal balance” carry a misleading implication of static equilibrium, an equilibrium that is disturbed by changes in constitutional doctrine such as occurred in the Engineers’ Case, and changes in circumstances as a result of the First World War. The error in implications of that kind has long been recognised. So much is 74 evident from Alfred Deakin’s Second Reading Speech on the Judiciary Bill in 1902 and his comparison between the difficulty of amending the Constitution by referendum, and this Court’s differing but continuing role in determining the meaning and operation of the Constitution. … Section 51(xx) The plaintiffs’ principal arguments: [57] 75 … First, it was 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 constitutional 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. If a positive test is to be adopted, 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), 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). …77 … A distinction between “external” and “internal” relationships: 78 … [66] The examination of those matters will reveal that a distinction of the kind relied on by the plaintiffs, between the external relationships of a constitutional corporation and its internal relationships, does not assist the resolution of the issues presented in these matters. It is a distinction rooted in choice of law rules which cannot, and should not, 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. [67] In so far as the distinction between external and internal relationships is proffered as a means of limiting what the plaintiffs assert would otherwise be too broad a reach for s 51(xx), it is 79 necessary to consider whether the assertion assumes the answer to the question presented. And in any event it is necessary to examine carefully the context in which such assertions have been made. In that regard, it is essential to recognise the fundamental and far-reaching legal, social, and economic changes in the place now occupied by the corporation, compared with the place it occupied when the Constitution was drafted and adopted, and when s 51(xx) was first considered in Huddart Parker. Huddart Parker: [68] There are at least two reasons why it is important to examine what was said about s 51(xx) in Huddart Parker. First, the decision is important for what it reveals concerning assertions made about what the framers of the Constitution intended. Secondly, … the dissenting reasons of Isaacs J were the acknowledged source of one of the principal strands of the plaintiffs’ arguments about the construction and effect of s 51(xx). [69] Huddart Parker was argued … little more than five years after the Court first sat in October 1903. … [A]ll five members of the Court had been leading participants in the Constitutional Conventions. All are properly seen as among the framers of the Constitution …84 … [82] This examination of Huddart Parker reveals several matters of present relevance. First, no one view of the meaning of s 51(xx) commanded the assent of even a majority of the Court. These differences of opinion deny that there was then any settled understanding, accepted by these framers of the Constitution, of what meaning or effect was to be given to s 51(xx). What was accepted, by at least the three founding members of the Court, were certain principles of constitutional construction, and in particular those principles which underpinned the reserved powers doctrine. … (More than faint [5.460]

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Work Choices Case cont. echoes of these propositions were to be heard in the present matters in the plaintiffs’ submissions concerning the relationship between s 51(xx) and s 51(xxxv).) … 87 … [90] In any event, there seems little reason to assign relationships between the corporation and its employees to the class of “internal” relationships. … 89 … [94] … To draw the line between what is internal and what is external, as Griffith CJ did (Huddart, Parker at 349, 353), 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. [95] Adopting a distinction which is derived from choice of law rules and distinguishes between matters internal and external to a corporation approaches the question in a way that distracts attention from the issues that must be considered. Those issues focus upon the text of s 51(xx) and the ambit of the power it confers on the federal Parliament, not upon such matters as whether, for example, a corporation’s dealings with persons the corporation hopes will become its unsecured note-holders are “internal” or “external” dealings. Relevant nineteenth century developments: 90 [96] The plaintiffs submitted that support for their contentions about s 51(xx) was provided by its drafting history and by what was said in the course of the Convention Debates. … 96 … [118] While there can be little doubt that, by 1897, the drafting committee, Mr Deakin, and others saw that national power was required over a wider field of law with respect to corporations than their status within the Commonwealth, the Convention Debates reveal very little about what those who framed the Constitution thought would fall within or outside the power. [119] … 97 … [I]t is impossible to distil any conclusion about what the framers intended should be the meaning or the ambit of operation of s 51(xx) from what was said in debate about the power, or from the drafting history of the provision. [120] To pursue the identification of what is said to be the framers’ intention, much more often than not, is to pursue a mirage. It is a mirage because the inquiry assumes that it is both possible and useful to attempt to work out a single collective view about what now is a disputed question of power, but then was not present to the minds of those who contributed to the debates. … [121] In the case of s 51(xx) the statements made in the course of the Convention Debates were so few and equivocal as to provide no foundation for a conclusion about what those who spoke in debate thought would be the scope or meaning of s 51(xx). Moreover, in the case of s 51(xx), assertions about the framers’ intention often leave out of account two subsequent developments of fundamental importance which cannot be assumed to have been foreseen by the framers. First, corporations law was still developing in the last decade of the nineteenth century. There can be no clearer demonstration of that than the decision in Salomon’s Case (Salomon v Salomon & Co [1897] AC 22). Only with that decision, in November 1896, did the courts fully grasp the implications of corporate personality. And its consequences for the rights of creditors and others were still being debated, and dealt with, well into the twentieth century. Secondly, the place of corporations in the economic life of Australia today is radically different from the place they occupied when the framers were considering what legislative powers should be given to the federal Parliament. … [124] … 98 … [Referring to Huddart Parker and early constitutional commentaries, their Honours concluded:] Those sources do not support the conclusion asserted by the plaintiffs, namely, that s 51(xx) would support only a law with respect to the relationships between a constitutional corporation and members of the public (excluding employees and potential employees of the corporation). Failed referendums: 99 [125] [After briefly addressing whether conclusions could be drawn from failed referendums seeking to expand the scope of the corporations powers and alter ss 51(xx) and (xxxv), the majority rejected a submission that these were relevant in determining the ambit of the power] … 101 … The course of authority after Huddart Parker: … 102 … [138] First, there is no decision of the Court which has decided the specific issues raised in the present matters. Secondly, it follows that what is said 436

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Work Choices Case cont. in the cases since Huddart Parker is to be understood against the background of the issues that fell for decision in those cases – issues different from those that must now be decided. [139] Apart from The Incorporation Case (1990) 169 CLR 482, it is necessary to say something about five other decisions – Bank of NSW v Commonwealth (“the Banking Case”) (1948) 76 CLR 1, Concrete Pipes Case (1971) 124 CLR 468, Fontana Films (1982) 150 CLR 169, the Tasmanian Dam Case (1983) 158 CLR 1 and Re Dingjan; Ex parte Wagner (1995) 183 CLR 323. It is convenient to deal with them chronologically, and to do so recognising what the plaintiffs contended was to be derived from them. 103 [140] The plaintiffs submitted that in the cases decided after Huddart Parker there could be found views “as to the scope of s 51(xx), or the appropriate test for characterisation of a law with respect to foreign, financial and trading corporations”. Two tests were said to be thus revealed – 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 the 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” (cf Fontana Films (1982) 150 CLR 169 at 212 per Huddart Parker (1909) 8 CLR 330 at 348 per Griffith CJ). It was not suggested that the distinction drawn between external and internal relationships by Isaacs J in Huddart Parker was taken up in the later cases. [141] At once it should be said that the plaintiffs’ argument against the object of command test and in favour of the distinctive character test has several difficulties. It seeks to build upon some statements made in judgments of the Court which, read in their context, constitute no more than an explicit limitation upon what was being decided in the particular case. In so far as it seeks to build upon suggestions that s 51(xx) could be interpreted as having an unduly broad reach, such as would disturb a proper or intended “federal balance”, it invites the closest attention to what assumptions underpin the suggestions. Finally, the assertion of a specific test for characterisation of a law as being a law with respect to constitutional corporations either runs serious risk of inverting the proper order of inquiry or posits a test that again invokes notions of federal balance. [142] The general principles to be applied in determining whether a law is with respect to a head of legislative power are well settled. It is necessary, always, to construe the constitutional text and to do that “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 225–226; Grain Pool of Western Australia v Commonwealth (2000) 202 CLR 479 at 492 [16]). The character of the law must then be determined by reference to the rights, powers, liabilities, duties and privileges which it creates (Kartinyeri v Commonwealth (1998) 195 CLR 337 at 352–353 [7], 372 [58]; Grain Pool (2000) 202 CLR 479 at 492 [16]). The practical as well as the legal operation of the law must be examined (Re Dingjan; (1995) 183 CLR 323 at 369; Grain Pool (2000) 202 CLR 479 at 492 [16]). If a law fairly answers the description of being a law 104 with respect to two subject-matters, one a subject-matter within s 51 and the other not, it is valid notwithstanding there is no independent connection between the two subject-matters (Re F; Ex parte F (1986) 161 CLR 376 at 388; Grain Pool (2000) 202 CLR 479 at 492 [16]). Finally, as remarked in Grain Pool (WA) v Commonwealth (2000) 202 CLR 479 at 492 [16], “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 Commonwealth (1996) 187 CLR 579 at 602)”. [143] The argument that the object of command test has been, or should be, rejected is an argument that focuses upon what is said not to establish the sufficiency of connection between a law and the relevant head of power. But it does that divorced from any consideration of the legal or practical operation of the law in question. That inverts the proper order of inquiry. [144] 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 [5.460]

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Work Choices Case cont. 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. … [145] 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, examination will reveal that the “distinctive character test” is put forward by the plaintiffs, not just as a convenient description of the result of considering the sufficiency of connection between a law and the relevant head of power, but 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, again, necessarily invokes notions of federal balance. … The Tasmanian Dam Case: … 112 [169] The plaintiffs in the present matters submitted that the analysis made by Dawson J in the Tasmanian Dam Case, and subsequently amplified in Re Dingjan, embodied the distinctive character test and is the preferable approach to determining whether a law is supported by s 51(xx). 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. [170] 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. … Re Dingjan: … 114 [177] The dissenting members of the Court in Re Dingjan, 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 ((1995) 183 CLR 323 at 365). 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. Second, it follows that the power conferred by s 51(xx) extends “at the very least” (ibid) to the business functions and activities of constitutional corporations and to their business relationships. Third, 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” (ibid). [178] 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 [83] 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. (The passage appears in reasons which are dissenting, but not on s 51(xx); since the majority, unlike her Honour, found the impugned legislation to be supported by s 51(xxxv), it was not necessary for them to consider s 51(xx)) 115 … 438

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Work Choices Case cont. This understanding of the power should be adopted. It follows, as Gaudron J said ((2000) 203 CLR 346 at 375 [83]), 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”. Distinctive character and discriminatory operation: [179] On its face, there seems no reason to consider that the test of discriminatory operation adopted by Brennan J in Re Dingjan would not be satisfied by any law which singled out constitutional corporations as the object of statutory command. That is, any law taking the form “a constitutional corporation shall …” or “shall not …” would have an effect on constitutional corporations but none on any other person; there would be a differential effect. Yet the plaintiffs in the present matters contended that this was not what Brennan J intended by the test. Rather, they sought to treat all that had been said by Gibbs CJ in Fontana Films and the Tasmanian Dam Case, by Dawson J in the Tasmanian Dam Case and later in Re Dingjan, and by Brennan J in Re Dingjan as generally equivalent statements of a distinctive character test. Thus the plaintiffs contended that to ask whether the particular character of a corporation (as foreign, trading or financial) is “significant” in the way in which a law relates to it, and to search for “discriminatory operation”, inserts a different, or an additional, filter in the process of deciding whether there is a sufficient connection between the relevant head of power and the law in question. [180] The better view is that there is an important difference between the analysis made by Dawson J and that advanced by Brennan J in Re Dingjan. In particular, it may greatly be doubted that Brennan J intended … to indicate that a law which imposes a duty or liability, or confers a right or privilege, on a constitutional corporation is not a law with respect to constitutional corporations unless more is shown. Rather, the better view is that his Honour’s test of discriminatory operation was intended to apply chiefly, perhaps only, where the law applies to constitutional corporations and to other persons indifferently. [181] But if such a test is to be applied in deciding whether a law applying to all persons indifferently is a law with respect to constitutional corporations, there is no evident basis upon which a law which imposes a duty or liability, or confers a right or privilege, only on a 116 constitutional corporation should not be characterised as a law with respect to constitutional corporations. And, more particularly, there is no evident basis upon which laws of the kind described by Gaudron J Re Dingjan ((1995) 183 CLR 323 at 363) and later in Re Pacific Coal ((2000) 203 CLR 346 at 375 [83]) should not be characterised as laws with respect to that subject-matter. That is, laws regulating “the activities, functions, relationships and the business” of a constitutional corporation, and laws creating “rights, and privileges belonging to such a corporation, [imposing] obligations on it and, in respect to those matters, [regulating] the conduct of those through whom it acts” including its employees, and regulating “those whose conduct is or is capable of affecting its activities, functions, relationships or business” would, on this test, be properly characterised as laws with respect to constitutional corporations. [182] What the plaintiffs identify as an object of command test (which they contend should be rejected) is then seen to be indistinguishable from what is the logical extension of a discriminatory operation test of the kind described by Brennan J. But whether or not that is so, what is now important is that the plaintiffs in the present matters contended that a special rule should be adopted for considering whether a law is supported by s 51(xx) – a distinctive character test which was to be understood as substantially the same as a test of discriminatory operation. A need to limit s 51(xx)? [183] An important element underpinning this argument, and indeed 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” (Re Dingjan (1995) 183 CLR 323 at 345) to s 51(xx) was said by Dawson J 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 to the task of determining whether a law is supported by s 51(xx) is an implicit assertion about federal balance and, in particular, an implicit assertion that to give the ordinary scope to the legislative power with respect to the particular persons mentioned in s 51(xx) could or would distort that balance. So much was made explicit by Gibbs CJ Fontana Films ((1982) 150 CLR 169 at 182) –“extraordinary consequences would result if the [5.460]

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Work Choices Case cont. Parliament had power to make any kind of law on any subject affecting such corporations”. 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. 117 [184] Each of the arguments advanced by the plaintiffs proffered a form of limit on the reach of s 51(xx): only “external” relationships, “something more” than object of command, “distinctive character” or “discriminatory operation”. As noted earlier, because the new Act prescribes norms which regulate or affect the relationship between constitutional corporations and their employees, the limits proffered by the plaintiffs must be seen as contentions about what is meant by a law being “with respect to” constitutional corporations. … [187] Reference has often been made in the cases (Huddart Parker (1909) 8 CLR 330 at 409 per Higgins J; the Banking Case (1948) 76 CLR 1 at 202 per Latham CJ; Fontana Films (1982) 150 CLR 169 at 182 per Gibbs CJ; the Tasmanian Dam Case (1983) 158 CLR 1 at 315 per Dawson J) to what are said to be the possible consequences of concluding that a law whose object of command is only constitutional corporations is a valid law. In Huddart Parker, Higgins J spoke ((1909) 8 CLR 330 at 409) of possibilities that he saw as distorting constitutional arrangements. Reference was made to the possibility of the federal Parliament framing a new system of libel laws applicable to newspapers owned by corporations, and to licensing Acts creating a new scheme of administration and of offences applicable only to hotels belonging to corporations. [188] In part, reference to such consequences seeks to present possible social consequences that it is said could flow if further legislation is enacted, and which it is said are to be seen as absurd or inconvenient, as a reason to confine the reach of the legislative power. Section 51(xx), like other powers, should not be given a meaning narrowed by an apprehension of extreme examples and distorting possibilities of its application to future laws (XYZ v Commonwealth (2006) 80 ALJR 1036 at 1047–1048 [39]; Singh v Commonwealth (2004) 222 CLR 322 at 384 [155]; Shaw v Minister for Immigration and Multicultural Affairs (2003) 218 CLR 28 at 43 [32]; Grain Pool (2000) 202 CLR 479 at 492 [16]; Egan v Willis (1998) 195 CLR 424 at 505 [160]; Kartinyeri (1998) 195 CLR 337 at 380–381 [87]–[88]). While there may be 118 room for debate about whether the particular examples proffered by Higgins J are properly to be characterised as extreme examples or distorting possibilities, what is plain is that, as Professor Zines has written (Zines, “Characterisation of Commonwealth Laws”, in Lee and Winterton (eds), Australian Constitutional Perspectives, (1992) 33 at 59): It is clear that any power of the Commonwealth, on the most restricted or the widest interpretation, might, if the federal Parliament were so inclined, produce results which, when viewed together with State laws, are inefficient, socially bad or downright ridiculous. … That does not mean that the powers concerned should be construed restrictively so as to prevent those results. The object of the power, as an aid in its interpretation, is not to be seen as an accumulation of desirable laws. (Emphasis added.) [189] The plaintiffs’ arguments proffering limits to the reach of s 51(xx) were not confined, however, to arguments about the social or political utility of parallel systems of laws dealing in the one case with constitutional corporations and in the other with all other persons. Rather, the arguments about consequences went further than postulating absurd or inconvenient social consequences and explicitly or implicitly invoked notions of federal balance. [190] No party sought to challenge the approach to constitutional construction that underpinned the decision in the Engineers’ Case to reject the doctrine of implied immunities and the doctrine of reserved powers. But it is important not to overstate either the propositions about constitutional construction applied in and after the Engineers’ Case or the consequences of their adoption. [191] The doctrine of implied immunities, or as Sir Robert Garran described it (Garran, “The Development of the Australian Constitution” (1924) 40 Law Quarterly Review 202 at 215), “the reciprocal doctrine of non-interference”, was founded in an implication. Whether that implication was to be drawn depended greatly upon how the constitutional structure was viewed. If, as the founding members of the Court (Griffith CJ, Barton and O’Connor JJ) saw it, the Constitution created a 440

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Work Choices Case cont. federation of separate, co-ordinate, governments, each substantially independent of the other, supreme in its own sphere but each of which had yielded some of their powers to a central government, the implication of a reciprocal doctrine of non-interference could be described (The Federated Amalgamated Government Railway and Tramway Service Association v The New South Wales Railway Traffic Employees Association (1906) 4 CLR 488 at 505) as a necessary implication. But if the inquiry begins from a different starting point – the constitutional text, rather than a view of the place of the States that 119 is formed independently of that text – a different conclusion is reached. There is then no necessity to imply a reciprocal doctrine of non-interference. [192] So, too, the doctrine of reserved powers depended upon drawing negative implications from the positive grants of legislative power to the federal Parliament, and sought to draw support for that approach from s 107 of the Constitution. As Dixon J pointed out in Melbourne Corporation v Commonwealth ((1947) 74 CLR 31 at 83), “the attempt to read s 107 as the equivalent of a specific grant or reservation of power lacked a foundation in logic”. But no less fundamentally, the doctrine of reserved powers could be supported only if the Constitution was understood as preserving to the States some legislative power formerly held by the unfederated Colonies. Thus, like the doctrine of implied immunities, much depended upon what was taken as the starting point for the analysis. [193] As Windeyer J rightly pointed out in the Payroll Tax Case ((1971) 122 CLR 353 at 396), the Engineers’ Case is not to be seen “as the correction of antecedent errors or as the uprooting of heresy”. There is no doubt that, as he continued (ibid), “[t]o return today to the discarded theories would indeed be an error and the adoption of a heresy”. But the Engineers’ Case was both a consequence of developments outside the law courts (not least a sense of national identity emerging during and after the First World War) and a cause of future developments. As Windeyer J went on to say (at 396–397): 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 courts have transgressed lawful boundaries: or that they may do so. [194] What was discarded in the Engineers’ Case was an approach to constitutional construction that started in a view of the place to be accorded to the States formed independently of the text of the Constitution. The Engineers’ Case did not establish that no implications are to be drawn from the Constitution. So much is evident from Melbourne Corporation (1947) 74 CLR 31 and from the Boilermakers’ Case (1956) 94 CLR 254. Nor did the Engineers’ Case establish that no regard may be had to the 120 general nature and structure of the constitutional framework which the Constitution erects. As was held in Melbourne Corporation (1947) 74 CLR 31 at 82 (see also Austin v Commonwealth (2003) 215 CLR 185): The foundation of the Constitution is the conception of a central government and a number of State governments separately organized. The Constitution predicates their continued existence as independent entities. And because the entities, whose continued existence is predicated by the Constitution, are polities, they are to continue as separate bodies politic each having legislative, executive and judicial functions. But this last observation does not identify the content of any of those functions. It does not say what those legislative functions are to be. [195] In the present matters, the appeals made to notions of federal balance, no matter whether the appeal was explicit or only implicit, were propositions about a “balance” of legislative power between the Commonwealth and the States. Two points must be made about those propositions. First, as Dixon J said ((1947) 74 CLR 31 at 82–83) in Melbourne Corporation: 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. [5.460]

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Work Choices Case cont. Secondly, again as Dixon J pointed out (at 82) in Melbourne Corporation, the framers “appear … to have conceived the States as bodies politic whose existence and nature are independent of the powers allocated to them” (emphasis added). Thus when 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? It cannot be identified from any of the considerations mentioned thus far in these reasons, and no other basis for its identification was advanced in argument. [196] Whether a basis for choosing a point of balance is identified or not, 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. … 121 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. General conclusions: [197] It is convenient to summarise. … The distinction between external and internal relationships of corporations proffered by the plaintiffs as a limit to the legislative power conferred by s 51(xx) should be rejected as an inappropriate and unhelpful distinction. As explained earlier, transposing a distinction originating in choice of law rules into the present context is inappropriate. The distinction finds no reflection in the Convention Debates or the drafting history of s 51(xx) and, in any event, is unstable. Adopting it would distract attention from the tasks of construing the constitutional text, identifying the legal and practical operation of the impugned law, and then assessing the sufficiency of the connection between the impugned law and the head of power. [198] 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, as these reasons will explain, 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, 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, as Gaudron J said in Re Pacific Coal ((2000) 203 CLR 346 at 375 [83]), “laws prescribing the industrial rights and obligations of [constitutional] corporations and their 122 employees and the means by which they are to conduct their industrial relations” are laws with respect to constitutional corporations. The relationship between s 51(xxxv) and s 51(xx) The parties’ submissions: … [200] [T]he AWU submitted that s 51(xxxv) indicated at least prima facie the extent of federal legislative power to deal with industrial regulation and industrial matters. The qualification was that the nature of other powers, specifically s 51(i) and s 51(vi), but not s 51(xx), might compel a different conclusion. Laws with respect to interstate and foreign commerce, and defence might encompass industrial matters. But, such instances apart, unless the nature of any one of the other powers in s 51 so suggested, the power should not be read as extending to “similar matters” to those dealt with in s 51(xxxv). The result was said to be that the selection in s 51(xxxv) of one method of preventing and settling industrial disputes and the limitation of that paragraph to disputes extending beyond the limits of any one State indicated that other powers, particularly s 51(xx), should 442

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Work Choices Case cont. not be construed so as to support laws without those limitations. The AWU submitted that there is nothing in s 51(xx) which suggests it should be treated as dealing with the subject of employment. …123 … [203] [S]everal difficulties with the submissions of the AWU appear. First, the text of s 51(xxxv) is concerned with a narrower subject-matter than industrial matters or relations and their regulation. Legislation may prescribe, independently of any mechanism for the resolution of disputes, a wide range of matters which may fairly be regarded as affecting the mutual relations of employers and employees who from time to time are engaged in an industry. Part 7 of the Act, which prescribes what are identified in s 171 as “key minimum entitlements of employment”, is a law of this description. Why should the heads of power, particularly s 51(xx), which are 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. … [208] None of the various submissions by the plaintiffs 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. That outcome is supported also by recourse to the provenance of s 51(xxxv) to identify the contemporary meaning in 1900 of the language used in that paragraph and the subject to which that language was directed. … Text, structure and authority: … 127 [221] [Section 51(xxxv)] is to be read as a whole; it does not contain any element which answers the description in [Bourke v State Bank of New South Wales (1990) 170 CLR 276] of 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 addressed in Bourke, namely, whether other paragraphs of s 51, in particular par (xx), are to be construed subject to a positive prohibition or restriction found elsewhere, and, in particular, in s 51(xxxv). … The course of authority: 128 [223] The course of authority in this Court denies to par (xxxv) a negative implication of exclusivity which would deny the validity of laws with respect to other heads of power which also had the character of laws regulating industrial relations in a fashion other than as required by par (xxxv). [224] In Re Maritime Union of Australia; Ex parte CSL Pacific Shipping Inc (2003) 214 CLR 397, the Court upheld the validity of laws pertaining to the relationship between employers and maritime employees, so far as they were supported by s 51(i) of the Constitution. … 129 [226] Victoria did not seek to reopen CSL but submitted that it was to be distinguished. This was said to be because (a) par (i) of s 51 contains, by reason of the phrase “among the States”, essentially the same geographical limit as par (xxxv); and (b) this made it “unlikely” that there arose from par (xxxv) “essentially the same limit” when par (i) was relied on to support laws regulating “industrial relations” of those engaged in interstate or overseas trade or commerce. But the presence of a common geographical limit, if that be accepted, is beside the point. As already remarked, each head of power expresses a compound and distinct concept; that a law with respect to par (i) of s 51 also bears upon industrial relations does not deny to the law that character, whether or not it might fall outside par (xxxv). [227] Reference also should be made to Pidoto v Victoria (1943) 68 CLR 87. The decision in that case necessarily denied the proposition that the defence power is limited by par (xxxv). … [T]he reasoning of Latham CJ is compelling and should be followed. Latham CJ rejected the submission (in substance, repeated in the present litigation) that par (xxxv) implies a negative. He understood that to mean (at 101): not only that the Commonwealth Parliament shall have power to legislate in relation to the industrial disputes there defined and in the manner there prescribed, but also that the Commonwealth Parliament shall not have power to deal with any other industrial matter or with any industrial dispute in any other manner. Latham CJ continued (ibid): [5.460]

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Work Choices Case cont. Section 51 (xxxv) is a positive provision conferring a specific power. The particular terms in which this power is conferred are not, in my opinion, so expressed as to be capable of being so construed as to impose a limitation upon other powers positively 130 conferred. Further, if s 51 (xxxv) were construed so as to prevent the Parliament from dealing with industrial matters except under that specific provision, similar reasoning would lead to the conclusion that the Commonwealth Parliament could not (under any legislative power) provide for the use of conciliation and arbitration in relation to any other matter than inter-State industrial disputes. It must, I think, be conceded, for example, that the Commonwealth Parliament can, in legislating with respect to the public service of the Commonwealth (Constitution, s 52 (ii)), provide for conciliation and arbitration in relation to matters such as wages, conditions and hours, whether or not any dispute about those matters is industrial, and whether or not it extends beyond the limits of any one State. (original emphasis) [228] The terms in which his Honour expressed his conclusion deny the reservation urged by the AWU that this turned upon the special nature of the defence power in war-time. More recently, Re Pacific Coal (2000) 203 CLR 346, Gleeson CJ approved what had been decided in Pidoto in a passage which now also should be accepted and followed. The Chief Justice said (at 359–360 [29]): It has often been pointed out that s 51(xxxv) does not empower the Parliament to legislate directly to regulate conditions of employment. An attempt was made in argument to develop that proposition by adding to it what was described as “[t]he principle that Parliament cannot do indirectly what it cannot do directly”. Two points need to be made about that. First, it is one thing to say that the nature of the power is such that it deals with instituting and maintaining a system of conciliation and arbitration, and that it is only through such a system that conditions of employment may be regulated under s 51(xxxv); it is another thing to find some negative implication amounting to a prohibition against the Parliament enacting any law which has the effect of altering conditions of employment. That there is no such negative implication, and no such prohibition, must follow from the acceptance that, where Parliament can rely upon some other power conferred by s 51, it can legislate in relation to conditions of employment. Such an implication was rejected, for example, in Pidoto v Victoria (1943) 68 CLR 87. In the present case, an attempt was made to rely, if necessary, upon the power conferred by s 51(xx). It is unnecessary to deal with that attempt but if, in a given case, legislation were validly enacted pursuant to that power, then it would not be affected by any negative implication or prohibition of the kind mentioned. Secondly, there is no principle that Parliament 131can never do indirectly what it cannot do directly. Whether or not Parliament can do something indirectly, which it cannot do directly, may depend upon why it cannot do it directly. In law, as in life, there are many examples of things that can be done indirectly, although not directly. The true principle is that “it is not permissible to do indirectly what is prohibited directly” (Caltex Oil (Aust) Pty Ltd v Best (1990) 170 CLR 516 at 522 per Mason CJ, Gaudron and McHugh JJ). If there were a constitutional prohibition of the kind earlier considered, then it could not be circumvented by an attempt to do indirectly that which is prohibited directly. There is, however, no such prohibition. … The provenance of s 51(xxxv): [230] Something more now should be said respecting the setting in which par (xxxv) was included in the draft of the Constitution and the significance as then understood of the terms in which it was expressed. This does not support any proposition to the effect that what was seen in the 1890s as an authority for legislative experimentation of a particular kind under the Constitution was to be the sole method open to the Parliament of the Commonwealth for legislating for industrial regulation. … Particular conclusions Particular provisions and s 51(xx): Part 7: 136 [245] … [T]he central operation of Pt 7 can be summarised as being that an employer, as defined in s 6(1) (and thus a constitutional corporation), shall provide its employees with not less than the prescribed minimum entitlements: those provided by the Pay and Conditions Standard. 444

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Work Choices Case cont. [246] In so far as the provisions of Pt 7, which give it that central operation, apply to employers as described in par (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. Other provisions of Pt 7 elaborating or qualifying the obligations created elsewhere in the Part, or providing mechanisms for the alteration of the particular content of minimum standards, are incidental to that central operation and are also laws with respect to constitutional corporations. The challenge to the validity of Pt 7, in so far as it applies to employers as described in par (a) of the definition in s 6(1), fails. Parts 8 and 10, Divs 1 and 2 of Pt 12 and Pt 23: [247] The same analysis is to be made of Pts 8 and 10, Divs 1 and 2 of Pt 12, and Pt 23 of the Act 137. Each of these Parts relates to the terms and conditions of employment to be provided by constitutional corporations to their employees. Part 8 deals with workplace agreements, Pt 10 with awards, Pt 12 with minimum entitlements of employees and Pt 23 with school-based apprentices and trainees. … 138 [252] The plaintiffs’ challenges to Pts 8 and 10, Divs 1 and 2 of Pt 12 and Pt 23, in so far as they apply to constitutional corporations, fail. Part 9: [253] Part 9 of the new Act deals with industrial action. The Part 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. [254] “[I]ndustrial action” is defined in s 420 as any action of four kinds (which encompass bans, limitations, strikes and lock-outs) but does not include authorised or agreed action, or action by an employee based on a reasonable concern by the employee about the employee’s health or safety. As Western Australia (and other plaintiffs) pleaded, “[t]he concept of industrial action is not defined for the purposes of the Act so as to require significant damage or detriment to the trading or financial activities, or to the interests, of constitutional corporations”. … 139 [258] 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 of the new Act 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 creates give constitutional corporations rights or immunities. If, as was held in Fontana Films, and as the plaintiffs accept, 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 what has earlier been referred to as “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. … 140 [260] The AWU submitted that the absence of any requirement [in s 497 dealing with “pattern bargaining”] that the proscribed conduct have any effect on a constitutional corporation was a significant consideration in deciding whether the provision was supported by s 51(xx). Fontana Films shows that a law which is predicated upon demonstrating that damage will or would be likely to be sustained by a constitutional corporation may be a law with respect to constitutional corporations. But it does not follow that a law is a law with respect to constitutional corporations only if it is to protect such corporations from damage. Section 497, in its operation with respect to constitutional corporations, is a law with respect to that subject-matter. … [262] The plaintiffs’ contentions that Pt 9 of the new Act is invalid, in so far as it applies to employers which are constitutional corporations, and their employees, should be rejected. … … Schedule 6: 151 [307] The Parliament is not bound by s 51(xxxv) to maintain any particular system of regulation of industrial disputes. A legislative power to enter a particular field ordinarily, and as it does here, carries with it the power to withdraw from that field (Kartinyeri (1998) 195 CLR 337 at [5.460]

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Work Choices Case cont. 358 [19]; Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Ame (2005) 222 CLR 439 at 457 [29], 459 [37]–[38]). That withdrawal may be staged in a manner such as that provided by Sch 6. … Schedule 1: [309] This is headed “Registration and Accountability of Organisations”. One of the stated intentions of the Parliament in enacting Sch 1 was to enhance relations within workplaces of “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 and Sch 1 (s 5(1), (2)). The terms “federal system employer” and “federal system employee” are defined in s 18A(2) and s 18B(2) respectively in terms which, among other heads of legislative power, fix upon employment by “a constitutional corporation”. 152 [310] Part 2 of Ch 2 of Sched 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” (s 18). If registration is obtained, it may be cancelled by the AIRC on its own motion if the organisation is not, or is no longer, a federally registrable association (s 30(1)(c)(v)). [311] An employers association may apply for registration if it itself is a constitutional corporation, or the majority of its members are federal system employers (s 18A(1)). An association of employees may apply if it itself is a constitutional corporation, or the majority of its members are federal system employees (s 18B(1)). These provisions are found in Div 1 of Pt 2, which is headed “Types of associations that may apply for registration”. [312] Division 2 of Pt 2 is headed “Registration criteria”. Where an application is made by a federally registrable association of employers or employees which satisfies the requirements of Div 1 for the making of an application, the AIRC must grant it, but “if, and only if” the relevant further criteria in s 19 are met by the applicant. [313] If the applicant be an association of employers, then throughout the six months before the application, those members who are employers – and the association will not have satisfied Div 1 unless it be a constitutional corporation or a majority of its members be federal system employers (s 18A(1)) – must have employed on a monthly average at least 50 employees (s 19(1)(c)). [314] If the applicant be an association of employees, then the association – which must have satisfied the requirement in Div 1 (s 18B(1)) that it be a constitutional corporation or have federal system employees as a majority of its members – is required by Div 2 (s 19(1)(d)) to have at least 50 members who are employees. … [316] It is undoubtedly the case that registration under Sch 1 confers a range of rights, privileges and obligations under the new Act. Some of these are as follows. With leave of the AIRC, an organisation may intervene in any matter before it (s 101); organisations may be parties to collective agreements (ss 328, 329) and are bound by them whilst they are in operation (s 351); they may be bound by awards (s 543); and may make applications for curial relief provided by the new Act (eg, ss 405, 448(7), 494(8), 495(7), 496(4)). … 153 [320] Two decisions of this Court, given at opposite ends of the twentieth century, illustrate the extent of the power to register persons and organisations, and to incorporate the latter, if there be the sufficient connection with one or more paragraphs in s 51 of the Constitution. [321] Cunliffe v Commonwealth (1994) 182 CLR 272 upheld the validity of a system requiring registration of persons giving assistance and advice to aliens seeking entry permits, visas and determination of refugee status. It made no difference for its validity that the law operated upon those providing the services in question rather than upon those to whom they were provided; the law was concerned with the protection of aliens in relation to matters affecting their status. [322] If it be accepted, as it should be for the argument on this branch of the plaintiffs’ case, 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 446

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Work Choices Case cont. conduct of their affairs. … 154 [325] Section 27 of Sch 1, the validity of which is challenged, provides for the incorporation of organisations registered under that Schedule. A provision to corresponding effect was found in s 58 of the 1904 Act. That invites attention to … Jumbunna Coal Mine, No Liability v Victorian Coal Miners’ Association (1908) 6 CLR 309. In that case, validity of the registration provisions in the 1904 Act, including s 58, was upheld. Isaacs J remarked that the point had not been strenuously contested (at 375). In its various manifestations, the 1904 Act retained such a provision. … [326] It was suggested in submissions that the outcome in Jumbunna had depended upon the grounding of the 1904 Act in the particular head of power in s 51(xxxv), and that the shift of the present legislation away from s 51(xxxv) was fatal to the validity of s 27 of Sch 1. However, for many years, the Parliament has taken a broader view of the power of incorporation implicit in various heads of power. The received doctrine was stated as follows by Latham CJ in Australian National Airways Pty Ltd v Commonwealth (“the Airlines Case”) (1945) 71 CLR 29 at 58–59: It is true that the Commonwealth has no general power to create corporations, but when the Commonwealth Parliament exercises a legislative power it is for the Parliament, subject to any constitutional prohibition, to determine the means of securing an object which it is legitimate under the power for the Parliament to pursue. Thus the establishment of the Commonwealth Bank was a means of giving effect to an approved policy with respect to banking. In the well-known case of McCulloch v Maryland 17 US 316 (1819) it was held that if Congress can exercise a power it can create a corporation to carry that power into effect: See Jumbunna … relating to the creation of corporations for the purpose of giving effect to 155 the industrial arbitration power. The establishment of the Commonwealth Bank was referable to the express power of incorporation of banks conferred by s 51(xiii). But the decision in the Airlines Case rested upon s 51(i) and s 122. … Conclusions and orders 182 [422] For these reasons, the plaintiffs’ several challenges to the validity of the Amending Act all fail. The Commonwealth’s demurrer to the statement of claim in each action should be allowed. In each action there should be judgment for the defendant with costs. Kirby J (dissenting): 186 [434] A needless exercise? If s 51(xx) of the Constitution now provides a legitimate source for a comprehensive federal law with respect to industrial disputes, by inference it always did. All those hard-fought decisions of this Court and the earnest presentation of cases, the advocacy and the judicial analysis and elaboration within them concerning the ambit of s 51(xxxv) of the Constitution, were (virtually without exception) a complete waste of this Court’s time and energies. … 187 [436] The hypothesis of futility: Given all the labour that followed in this Court, in the successive federal industrial tribunals, in the business sector, in industrial organisations avid for the assertion of jurisdiction, in the legal profession, in academic life and in Australian society, it is passing strange, if s 51(xx) existed as a constitutional deus ex machina to cut a swathe through so many technicalities, that a chorus of voices was not raised from the earliest days of the Commonwealth to demand the attempt. Why did generations of Justices of this Court struggle in so many cases over the jurisprudence of s 51(xxxv) of the Constitution, doing so for decades, without, in their impatience, occasionally appealing to the legislature to be rid of the needless limitations of par (xxxv) of s 51 and urging the substitution of the fructuous source of par (xx)? [437] Why were repeated attempts taken by well-advised federal governments, none of them successful, to amend the Constitution to enhance the federal legislative power with respect to terms and conditions of employment in industry, if, waiting in the wings for easy deployment, was the corporations paragraph, there to solve virtually all of the deficiencies of power and to fulfil all of the Commonwealth’s law-making dreams of industrial regulation? (There were six relevant referendums: [1910, 1912 (two), 1919, 1926 and 1946]; cf Industrial Relations Act Case at 565.) … 189 [443] The assumption of limited powers: … It is obvious that most of our predecessors accepted, or assumed, that a severe limitation existed on the availability of federal legislative power to make laws directly in respect of industrial disputes otherwise than through the independent procedures expressly provided for in s 51(xxxv). [5.460]

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Work Choices Case cont. [444] The present proceedings thus afford both the opportunity, and the obligation, to consider whether the generally consistent authority of this Court, expressed for over a hundred years upon the basis of that assumption, express or implied, was mistaken. If it was, the Commonwealth is correct that the Federal Parliament enjoys (and always has enjoyed) a most substantial power under s 51(xx) to enact 190 comprehensive national laws directly concerned with industrial disputes, without conforming to the two constitutional prerequisites contained in s 51(xxxv). [445] Because that conclusion would, in effect, render the industrial disputes power in par (xxxv) otiose, or at least optional for most purposes, effectively consigning it to the same insignificance as other provisions of the Constitution for which high hopes were once held (see, eg, ss 101, 102, 103 (Inter-State Commission); cf State of New South Wales v Commonwealth (“the Wheat Case”) (1915) 20 CLR 54), the step that the Commonwealth now invites this Court to take is not one to be taken lightly. ... [446] Such considerations include the part which the requirement of interstateness has hitherto played in preserving features of the federal character of the Constitution in matters of industrial relations law. That element in Australia’s constitutional arrangements, including in respect of State, federal and Territory laws on industrial disputes, has contributed to diversity and experimentation in lawmaking, inter-governmental cooperation within the Commonwealth and the protection of individual rights. Moreover, the feature of the independent determination of industrial disputes has the potential to encourage and promote collective agreements between parties and the protection of economic fairness to all those involved in industrial disputes, secured by the distinctive procedures of conciliation and arbitration. Such elements of fairness would not necessarily be assured by an unlimited focus of federal law on the activities of employers as constitutional corporations. Under that power, attention is addressed to the corporation which is the employer, not, as such, the employment or the workplace relationship. [447] The emerging issue: … The real question now directly presented 191 is whether this expansion of the ambit of par (xx), however large it may otherwise grow, is subject to restrictions or limitations, including those expressed or implied in par (xxxv). The answer to that question is important for the outcome of these proceedings. It is important for the operation of the Constitution, read as a whole. It is important for the preservation of significant features of the resulting federal legislative power with respect to the prevention and settlement of industrial disputes that has hitherto prevailed in Australia. The facts, legislation and specific challenges: … 192 [455] Most significantly, the “employers” identified in par (a) of the definition of constitutional corporations ins 6(1) are, as defined in s 4. In turn, the definition of “employee” in s 5(1) 193 depends on the identification of an “employer”, as so defined. … [456] The clearest possible indication of the extremely wide conception of the corporations power which the joint reasons embrace emerges from the fact that not a single particular objection raised by the plaintiffs and interveners is upheld in those reasons. … [457] Even in the significant challenge to the last substantial redrafting of the federal industrial relations law, Victoria v Commonwealth (Industrial Relations Act Case) in 1996 [187 CLR 416], which followed the 1993 amendments to the Industrial Relations Act 1988 (Cth), a majority of this Court found that a handful of provisions were invalid or needed to be read down or would not bind the States in the specified respects unless confined in their meaning. Here, although some few of the specific provisions are read in a way that postpones a final conclusion or results in a narrow construction proffered by the Commonwealth to avoid a looming danger, the plaintiffs are held not to have landed a single constitutional blow. Truly, this demonstrates the extraordinary zenith of the federal constitutional power, most especially under s 51(xx), which the majority now upholds. ... [458] … It is the very amplitude of the power to make laws with respect to constitutional corporations, thus upheld, that obliges this Court to face squarely what I regard as the central issue in these proceedings. This is whether the corporations power is completely unchecked and plenary, and disjoined from other powers granted by the Constitution to the Federal Parliament. Or whether (as past history, experience and authority suggest) that power is subject to restrictions suggested by other paragraphs of s 51, notably par (xxxv). 448

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Work Choices Case cont. [459] The textual foundation for the importation of such restrictions is the structure of the Constitution and its federal character, inherent in its overall expression and design. But it can also be found in the clear statement in the opening words of s 51 that each grant of legislative power in that section is made “subject to this Constitution”. That expression obviously includes the other provisions in s 51, including par (xxxv). It also includes the federal character of the Constitution that pervades its entire provisions. … 198 … Common ground and approach: [462] The basic case law: In so far as they referred to considerations of federalism, neither the States, nor any of the unions, sought to revive the notion of reserved State powers that pre-existed the decision in Engineers’ Case. …200 …[468] The joint reasons acknowledge that the people of Australia have repeatedly declined to confer on the Federal Parliament, through referendum, a power to make laws with respect to “industrial relations generally” and the “terms and conditions of employment in industry”. They suggest that the failure of these referendums casts no light on the power of the Federal Parliament to make laws with respect to industrial relations. Various reasons are offered in support of this view, including the “problem of equivalence” (at [131]) and the decisiveness of party politics (at [132]). However, the fact that it would be difficult to ascertain the intention of the people at referendum does not make that intention “irrelevant” to the questions at hand. In analogous cases, this Court is regularly called upon to determine the “intention” of the Parliament, expressed in legislation. … If we acknowledge that the ultimate foundation of the legitimacy of the Constitution is now derived from its acceptance by the Australian people, the continued refusal of 201 the Australian electors to approve the creation of a general power of industrial relations by constitutional amendment, while obviously not decisive of the outcome in these proceedings, remains a relevant factor to be considered when construing the contemporary meaning of the constitutional text and structure, including the interaction between ss 51(xx) and 51(xxxv). If amendments that are agreed to are relevant to the meaning of the Constitution, those that have been repeatedly rejected should not be so lightly cast aside as irrelevant. [469] Coherent constitutional interpretation: Given that the proceedings involve constitutional validity, it is important to say that, on many of the matters of approach also, the parties were in agreement. Thus, they agreed that the Constitution must be read as a whole and as a coherent document (Joint reasons at [52]). [470] The joint reasons express fear that this principle of interpretation, unless kept in check, might lead to the importation of a negative implication protective of State legislative rights, akin to the reserved powers doctrine (at [82]). However, this is not how I understood the plaintiffs’ argument to be advanced. It was not for its impact on “preserving” State legislative “rights” that the coherency principle was invoked, but for the anterior question of ascertaining the content of federal legislative powers, such as those expressed in s 51 of the Constitution. ... [471] It follows that, to take the language of the corporations power in par (xx) of s 51 in isolation and to ignore the other paragraphs of that section, would involve a serious mistake. It is not a mistake that our 202 predecessors in this Court made. They read pars (xx) and (xxxv) together as part of the one section of the Constitution containing a grant of many powers. Clearly, it was not intended that s 51(xxxv) should be otiose, irrelevant or entirely optional to the Commonwealth in its application. Nor was it intended that the important restrictions imposed on the federal exercise of legislative powers in par (xxxv), with respect to laws on industrial disputes, should be set at nought by invoking another head of power, such as that contained in par (xx). [472] As I shall show, the principle of coherency in the interpretation of a legal text lies behind the reconciliation in several decisions of this Court of the restrictions appearing in the grants of legislative power in respect of banking (s 51(xiii)), insurance (s 51(xiv)) and acquisition of property (s 51(xxxi)). Of course, being a Constitution that contains grants of legislative power to a national legislature, it is appropriate to construe each of the heads of power expressed in s 51 “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; Grain Pool (2000) 202 CLR 479 at 492 [16]). The words must also be interpreted remembering their constitutional function. They must reflect the fact that the [5.460]

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Work Choices Case cont. Constitution is a “living instrument” (Theophanous v Herald & Weekly Times Ltd (1994) 182 CLR 104 at 171 per Deane J), intended to respond to the needs of changing times. Merely because of the existence of one provision having a “more particular scope”, one should not infer a limit on the deployment of other powers in ways that also affect the nominated subject (Concrete Pipes Case (1971) 124 CLR 468 at 507). Nevertheless, the abiding object of the task at hand is to secure an interpretation of the constitutional provisions that gives harmonious effect to the entire document. And this includes s 51. … 203 [475] … To have heresy alleged by those who participated in the joint reasons of this Court in Combet (2005) 80 ALJR 247 is an accusation to be borne with an easy heart. … 204 … [478] Although the principal objects of an Act are not decisive of its character, in this case, they are telling. The objects (New Act, s 30) make it clear that the law is addressed to the prevention and settlement of industrial “disputes”, inherent in dealing comprehensively and generically with “workplace relations”. The objects make no mention of “corporations”, constitutional or otherwise. They are relevantly addressed to the relationship between employers and employees. So much is confirmed by the Act’s key provisions, which are applied to “employers” and “employees” (defined in ss 6 and 5). … [479] … The only connection between the Act’s key provisions and s 51(xx) of the Constitution is that they may have some impact on the rights, duties and obligations of corporations and their employees. Taken separately and in sum, the “rights, duties, powers and privileges” which the Act “changes, regulates or abolishes” (Fairfax v Federal Commissioner of Taxation (1965) 114 CLR 1 at 7) properly pertain to the prevention and settlement of industrial disputes inherent in the comprehensive regulation of industrial relations. Such is the proper characterisation of the new Act. [480] Nonetheless, the key operative provisions of the new Act are applied by reference to the employer as a constitutional corporation. The constitutional validity of the new Act depends on a sufficient connection with the corporations power. It must be established that the corporations power authorises any law directed to a corporation, 205 regulating any interaction with it, or within it. In this respect, the intention of the Federal Parliament to circumvent the requirements of s 51(xxxv) by relying on a connection with s 51(xx) is irrelevant to the process of characterisation. However, if the new Act is to be characterised as a law with respect to s 51(xx), and not solely s 51(xxxv) as it appears to be in substance, the constitutional validity of that Act turns directly on the relationship between those two heads of power. [481] The corporations power: I would accept the submission of Victoria, quoting from the Concrete Pipes Case, that it is unnecessary in these proceedings to determine “the full ambit of the power conferred by s 51(xx) or to state definitive tests or criteria by which in every case the question may be determined whether a law is or is not a law with respect to the topic described in that paragraph”. [482] The intersection issue: What is, in my view, essential to the disposition of these proceedings is a decision on a narrower constitutional question. That question concerns the inter-relationship between s 51(xx) and s 51(xxxv). The issue posed by that inter-relationship may be stated in the alternative: Does the existence of par (xxxv) in s 51 limit the ambit and operation of par (xx), by restricting the availability of the latter to sustain a federal law? Or, is the content of par (xx) itself limited by any restriction upon laws with respect to industrial disputes inherent in giving true effect also to the provisions of par (xxxv)? In my view, although the same result is achieved by either approach, the latter expresses the correct constitutional principle. [483] It follows that the content of s 51(xx) takes on a reduced scope from what it otherwise might have had if par (xxxv) had not appeared in the Constitution at all, indeed in the very same section within which each paragraph is to be read together with the others. A law can be validly made with respect to more than one head of power (Fontana (1982) 150 CLR 169 at 192–194; see joint reasons at [51]). The fact that it might be characterised as a law with respect to some other subject matter(s) is irrelevant if it properly answers to the description of a law with respect to another subject matter designated in s 51. This will be so even if there is no independent connection between the two 206 constitutional subject matters. What is forbidden is the making of a law in reliance upon a specified subject matter (such as s 51(xx)) when that law is properly characterised as one with respect to another head of power (such as s 51(xxxv)) in circumstances where the latter power is afforded to the 450

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Work Choices Case cont. Federal Parliament “subject to a safeguard, restriction or qualification” (Attorney-General (Cth) v Schmidt (1961) 105 CLR 361 at 371 per Dixon CJ (Fullagar, Kitto and Taylor JJ agreeing at 373; Windeyer J agreeing at 377)). The resulting central question: Stating the issue: … [485] The issue … is to what extent the ambit of the corporations power is qualified (if at all) by the existence of the power to make laws with respect to industrial disputes, which is expressed as subject to identified restrictions. … [T]he corporations power … is confined by the words in which it is expressed, most significantly the word “formed”, and also by its appearance in the context of the grant of other powers, some of them subject to express safeguards, restrictions and qualifications (such as s 51(xiii), (xiv), (xxxi), (xxxiii), (xxxiv)). [486] The dicta in Pacific Coal: The joint reasons (at [178]) attach great significance to the remarks of Gaudron J in her reasons in Pacific Coal (2000) 203 CLR 346 at 375 [83]. Her Honour is there quoted as expressing her belief as to the amplitude of the “power conferred by s 51(xx) of the Constitution”, including with respect to the “regulation of the conduct of those through whom [the corporation] acts, its employees and shareholders”. Three observations can be made on this passage, which the joint reasons say should be adopted by the Court as a correct “understanding of the power” (at [178]). [487] First, in Pacific Coal, Gaudron J (along with McHugh J and myself) was in dissent. Her reasoning therefore forms no part of the ratio decidendi of that case. Secondly, the quotation from Gaudron J 207 in the joint reasons omits the sentence that introduces the passage which the majority has now approved. That sentence makes it clear that Gaudron J was confining her remarks to the issue in hand, namely the constitutional validity under s 51(xx) of s 7A(1) of the Workplace Relations Act 1996 (Cth). In the omitted sentence, Gaudron J said (at 375 [83]): Even if s 7A(1) did apply in this case, item 50 in Pt 2 of Sch 5 could not, in my view, be characterised as a law with respect to constitutional corporations. [488] The fact that the approved passage was not intended by Gaudron J to be as unqualified as the words quoted in isolation might suggest is confirmed by the conclusion which her Honour reached, based on the invocation by the employer in that case of s 51(xx) to sustain the validity of the contested provision. Gaudron J actually rejected the conclusion that the provision could rely for its validity on s 51(xx). Thus, her Honour went on to explain why the paragraph was not available (at 375 [85]): The only connection between item 50 in Pt 2 of Sch 5 to the [Workplace Relations and Other Legislation Amendment Act 1996 (Cth)] and s 51(xx) of the Constitution is that it may have some effect on the rights and obligations of corporations and their employees. That is not sufficient to give s 3 of [that] Act, to the extent that it purports to give effect to item 50, the character of a law with respect to corporations. This is therefore yet another instance of the oft-expressed danger of taking words (whether in a constitutional grant of power or in judicial elaborations of it) out of context (see also the treatment of s 51(xx) in my reasons: Pacific Coal (2000) 203 CLR 346 at 446–448 [291]–[296]). [489] Thirdly, no argument was addressed in Pacific Coal to the reconciliation of the powers granted by pars (xx) and (xxxv) of s 51 of the Constitution. In these proceedings, that argument is at the very centre of the matters for decision. Remarks made by a judge without regard to that argument are of limited utility in the present proceedings. They should not be inflated into a general principle to be endorsed by this Court. Powers subject to safeguards, restrictions or qualifications [490] The emerging question: … Is reading s 51(xx), so that it does not apply where the propounded law is truly one “with respect to” industrial disputes but without conforming to the safeguards, restrictions or qualifications contained in s 51(xxxv), inconsistent with the authority of this Court on the ambit of such powers? Would it, for example, cut across the principle of constitutional interpretation that each grant of power is to 208 be construed with ample generality, despite the possibility of dual characterisation where another grant of power, on its own, might not sustain the validity of the challenged law? [491] Powers subject to restrictions: Whilst the ample approach to the elucidation of the meaning of the several heads of legislative power in ss 51 and 52 of the Constitution is well settled, it is subject to [5.460]

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Work Choices Case cont. a qualification that derives from the requirement to construe the Constitution as one coherent instrument of government. Such an approach is really rudimentary. It derives not from implications external to the Constitution but from that document’s text and structure. … [494] Express exclusions from power: The first category arises where the head of power in question contains an express exception from the subject matter that it states. There are several paragraphs of s 51 that answer to this description. They include par (xxxii) with respect to the control of railways by the Commonwealth which is limited to 209 “transport for … naval and military purposes”; and par (xxxiii) referring to the acquisition of any railways of a State but only “with the consent of [the] State” and “on terms arranged between the Commonwealth and the State”. Likewise, par (xxxiv) concerns railway construction and extension in any State but only “with the consent of that State”. Obviously, the grant of power with respect to trading and financial corporations in par (xx) could not be given effect so as to ride roughshod over these restrictions. [495] Two further express provisions in s 51 make the point even more clearly, being pars (xiii) and (xiv), which empower the Federal Parliament to make laws respectively with respect to banking and insurance. In each such head of power State banking or insurance, as the case may be, is excluded from the designated subject of federal lawmaking but may yet be the subject of federal laws where such excluded activities “extend[] beyond the limits of the State concerned”. … [496] In Bourke v State Bank of New South Wales (1990) 170 CLR 276, the relationship between the constitutional provision with respect to laws on “State banking” (s 51(xiii)) and the corporations power (s 51(xx)) received particular attention. The reasons of the entire Court, comprising Mason CJ, Brennan, Deane, Dawson, Toohey, Gaudron and McHugh JJ, observed (at 285 (emphasis added)): In this context, some qualification must be made to the general principle that a law with respect to a subject-matter within Commonwealth power does not cease to be valid because it affects a subject outside power or can be characterized as a law with respect to a subject-matter outside power … The principle cannot apply when the second subject-matter with respect to which the law can be characterized is not only outside power but is the subject of a positive prohibition or restriction. If a limitation is found to be of general application, then the fact that it is contained within one of the paragraphs of s 51 does not deny it a wider operation; the remaining paragraphs are then to be construed as being subject to the limitation. [497] The result of this analysis was that, in Bourke, this Court unanimously, and in a single opinion, accepted that the words of limitation in s 51(xiii) restricted what would otherwise, read entirely on its own, involve such an ample scope for s 51(xx) as to render the prohibition or restriction in par (xiii) nugatory. … 210 … [499] Powers subject to a guarantee: A second category where, to be made effective as obviously intended, a federal head of power has been read so as to diminish or confine what might otherwise seem to be the grant of plenary powers without restrictions, arises in the case where the constitutional text contains a specific provision with respect to a subject matter but limits the exercise of the power by reference to a constitutional guarantee, protective of the legal rights of those potentially affected by the federal law. [500] One such obvious case arises where the Federal Parliament is empowered to make laws with respect to the “acquisition of property … from any State or person” (Constitution, s 51(xxxi)). In respect of this head of power, there is a restriction of the first type, already described. It limits the acquisition of property envisaged to acquisition of property “for any purpose in respect of which the Parliament has power to make laws”. However, there is, as well, a second, express, restriction, stated by reference to a guarantee protective of the rights of persons who are 211 subject to the exercise of the power. This is the guarantee that such acquisition must be “on just terms”. [501] This second safeguard, restriction or qualification has been described as a “guarantee” in countless cases … In the face of such a “constitutional guarantee”, this Court has been unwilling to permit federal legislation to avoid the obligation of providing “just terms” by the simple expedient of nominating some other head of legislative power, or subject matter, as the source of the law’s 452

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Work Choices Case cont. constitutional validity. In Theophanous, Gleeson CJ explained the relationship between s 51(xxxi) and the other heads of federal legislative power in s 51 on this footing ((2006) 80 ALJR 886 at 888–889 [5]; (emphasis added)): The qualification to the power [in s 51(xxxi)], contained in the reference to just terms, protects rights of private property. Whatever arguments there may be about the extent of that protection in various circumstances, the existence of the protection has been recognised as an “implied guarantee”, with significant consequences for an understanding of the relationship between par (xxxi) and the rest of s 51. If par (xxxi) were intended to be no more than an express conferral of a power of acquisition that would otherwise be implicit in other paragraphs of s 51, then that would not explain the presence of the qualification. It is an important limitation on power. [502] In a number of cases, particular members of this Court have questioned the use of the language of “guarantee” (Commonwealth v WMC Resources Ltd (1998) 194 CLR 1 at 48 [126], 56 [145], 57–58 [149] per McHugh J; cf Cheng v The Queen (2000) 203 CLR 248 at 276–277 [77]–[78] per Gaudron J). They have preferred to describe s 51(xxxi) as the grant of a “power hedged with a 212 qualification” (Commonwealth v WMC Resources Ltd (1998) 194 CLR 1 at 48 [126] per McHugh J). For my own part, I am content with the description of the requirement of “just terms” as a “constitutional guarantee”. Effectively, that is what it certainly is. But whatever the label, it is now established that the legislative powers existing in many of the other paragraphs of s 51, to authorise federal acquisitions, are subject to the “just terms” requirement in s 51(xxxi). No other interpretation of the interacting powers of the Federal Parliament would uphold the purpose of the Constitution, viewed as an entire, inter-related and coherent instrument. It is no answer, in such a case, for the Commonwealth to incant, as it does here, that this is merely another instance of “dual characterisation”. [503] In Nintendo Co Ltd v Centronics Systems Pty Ltd (1994) 181 CLR 134, six Justices of this Court explained (at 160 per Mason CJ, Brennan, Deane, Toohey, Gaudron and McHugh JJ): It is well settled that s 51(xxxi)’s indirect operation to reduce the content of other grants of legislative power is through the medium of a rule of construction, namely, that “it is in accordance with the soundest principles of interpretation to treat” the conferral of “an express power, subject to a safeguard, restriction or qualification, to legislate on a particular subject or to a particular effect” 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”. [504] The principle of construction, cited in Nintendo, is taken directly from the reasons of Dixon CJ in Attorney-General (Cth) v Schmidt (1961) 105 CLR 361 at 371–372. Three points must be noted about the oft-quoted passage in Schmidt. First, the principle stated is founded on a general rule of construction. It is not a consequence peculiar to constitutional interpretation, still less the language and purposes of s 51(xxxi). Secondly, the principle explained in Schmidt attracted the concurrence of four other Justices (at 373 per Fullagar, Kitto and Taylor JJ, 377 per Windeyer J). It has been repeatedly applied by this Court so that it is now to be regarded as “settled”. Thirdly, as indicated, the principle is addressed not to a paragraph in s 51 expressed in terms of a “prohibition” but by reference to the existence in the paragraph of a “safeguard, restriction or qualification”. That phrase connotes a provision that may not, as such, be expressed in prohibitive terms. [505] In the joint reasons in these proceedings, the majority endorses (at [228]) a passage in the reasons of Gleeson CJ in Pacific Coal ((2000) 203 CLR 346 at 359–360 [29]). In those 213 reasons, Gleeson CJ states that the constitutional limitation on doing indirectly what could not be done directly is confined to circumstances where the allegedly indirect activity is “prohibited directly”. This criterion is then applied to s 51(xxxv) of the Constitution in its relation to s 51(xx). Because no express “prohibition” is found in s 51(xxxv), it is concluded that that paragraph affords no obstacle to an unbridled interpretation of the ambit of s 51(xx). [5.460]

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Work Choices Case cont. [506] The majority in these proceedings may re-express the law to adopt a principle of construction different from that which this Court has earlier adopted and treated as settled (Joint reasons at [228]). Their Honours may, as they please, adopt a test of “prohibition” in deriving their conclusion about the Constitution’s meaning in this case. However, they should at least do so acknowledging that they are altering the expression of the criterion stated by Dixon CJ in Schmidt and applied many times since. That criterion asks not whether the competing head of power (here s 51(xxxv)) contains a prohibition upon a law based on s 51(xx). As applied to the facts of this case, it asks whether, if a law were enacted, reliant on s 51(xx), it would involve legislation “without the safeguard, restriction or qualification” on the propounded subject matter that must be included in order to conform to the constitutional requirements of s 51(xxxv). [507] If one asks a different constitutional question, one will often receive a different constitutional answer. I prefer to ask the constitutional question that is “well settled” in this Court (Nintendo(1994) 181 CLR 134 at 160). I prefer not to substitute a new question, which has not hitherto been endorsed by the Court. Especially so where that question weakens the obligation to read the Constitution as a whole and carries the risk of enlarging federal power at the cost of safeguards, restrictions or qualifications contained in the constitutional text. [508] The industrial disputes power: Applying the established authority, can it be said, by analogy with the foregoing settled principles, that s 51(xxxv) of the Constitution contains a “safeguard, restriction or qualification” that results in a conclusion, in accordance with Schmidt, that a correct understanding of the ambit of the corporations power in s 51(xx) renders the latter more confined than would be the case if s 51(xxxv) did not exist? If so, as so confined, does the corporations power sustain the Act in question in these proceedings, as altered by the Amending Act? …214 … [510] Section 51(xxxv) is analogous: In my opinion, s 51(xxxv) is analogous to other provisions in s 51 of the Constitution so that it attracts the settled rule of constitutional construction stated by this Court in Schmidt. The paragraph authorises federal legislation on industrial disputes but subject to the two “safeguards, restrictions or qualifications” already mentioned. To be valid, such federal legislation must have the character of interstateness. It must also provide for the means of independent resolution, that is, resolving ultimate differences by the decision of an independent person or body in a process that answers to the description of “conciliation” or “arbitration”. The Federal Parliament does not enjoy a more general power to make laws with respect to industrial disputes. It cannot do so by purporting to invoke another, less specific, head of power. … 215 [513] … [F]or most of the last century it would have been regarded as inconceivable that the power to make federal laws with respect to corporations, contained in s 51(xx), extended to sustain such direct federal legislation with respect to industrial disputes. To be valid, such legislation was to be brought within the hard-fought, and narrowly adopted, constitutional power provided in the limited terms of s 51(xxxv). … [514] The desires and expectations of the founders of the Constitution, and the understandings of earlier Justices, do not limit the response which this Court may give to the central issue now presented (Grain Pool (2000) 202 CLR 479 at 522–523 [111]). New times may give rise to new insights. But the considerations of history, purpose, envisaged institutions and outcomes over more than a century, not to say the Herculean labours of our predecessors in this Court over s 51(xxxv) which were otherwise effectively unnecessary, suggest that any construction of s 51(xx) must accommodate itself to the co-equal inclusion of a particular, and restricted, grant of power to the Federal Parliament to make laws with respect to industrial disputes. If this is correct, it is no more permissible to rely on s 51(xx) to make laws with respect to the industrial disputes of corporations, than it is to acquire the assets of a constitutional corporation for the purposes of the Commonwealth and then to argue that the “just terms” requirements of s 51(xxxi) can be ignored because of the ample, generous, even “plenary”, legislative powers otherwise conferred on the federal lawmakers, including by s 51(xx). [515] It is not irrelevant that the legislative power conferred on the Federal Parliament by s 51(xxxv) appears amongst the powers granted towards the end of the list in s 51. Each of the immediately preceding legislative powers (s 51(xxxi), (xxxii), (xxxiii) and (xxxiv)) contains a grant of power subject to a “safeguard, restriction or qualification”. As a matter of structure, therefore, it would not be surprising to view s 51(xxxv) in the same light. History, and the Convention debates, suggest the same 454

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Work Choices Case cont. conclusion. … 216 … [518] It is not an inappropriate choice of language to describe the preconditions for federal legislation with respect to “industrial disputes”, contained in s 51(xxxv), as fitting within the tripartite expression described by Schmidt. Indeed, even if one were to confine the broad principle of constitutional construction stated in that decision to instances where the expressed elements of the grant of power constitute a constitutional “guarantee”, the requirement that federal laws operate indirectly through independent resolution by way of conciliation and arbitration can, in my view, properly be described as a type of “guarantee”. Both in its language, and in its history, this is how the power in par (xxxv) has been understood and has operated in Australia for more than a century. [519] Section 51(xxxv) protects industrial fairness: … 219 [525] The effect of this history [of Commonwealth industrial arbitration], clearly anticipated by the language of the grant of constitutional power in s 51(xxxv), profoundly affected the conditions of employment, and hence of ordinary life, of millions of Australians. It did so in the years following federation, and indeed until very recently. Inherent in the guaranteed procedures of “conciliation 220 and arbitration” was a safeguard, restriction or qualification upon the deployment of federal governmental power that ultimately committed outcomes to determinations by independent decision-makers who were obliged to take into account not only economic considerations but also considerations of fairness and reasonableness to all concerned and the consistent application of the principles of industrial relations in Australia. It is in this sense that the obligatory constitutional procedures involved in federal lawmaking with respect to industrial disputes imposed a “guarantee” for employer and employee alike: that their respective arguments would be considered and given due weight in a just and transparent process, decided in a public procedure that could be subjected to appeal and review, reasoned criticism and continuous evolution. … [526] The different character of s 51(xx): Laws made solely by reference to the characteristics inherent in a constitutional corporation are not, of their nature, equally subject to the “safeguard, restriction or qualification” of a commitment to industrial fairness and reasonableness … 221 [528] … [I]n deciding how the federal legislative powers, specifically s 51(xx) and (xxxv), operate in relation to each other, it is relevant for this Court to be aware of the constitutional values that are at stake in this decision. Those values, inherent in s 51(xxxv), have pervaded the outcomes of industrial disputes in Australia for more than a century. … [530] In my view, the long-held and shared assumptions, given effect by this Court, involved a correct view of the grant of legislative power in this respect to the Federal Parliament. The applicable grant of power imported a safeguard, restriction or qualification protective of all those involved in collective industrial bargaining: employer and worker alike. It provided an ultimate constitutional guarantee of fairness and reasonableness in the operation of any federal law with respect to industrial disputes, including for the economically weak and vulnerable. It afforded machinery that was specific to the concerns of the parties, relatively decentralised in operation and focused on the public interest in a way that laws with respect to constitutional corporations made in the Federal Parliament need not be. These values profoundly influenced the nature and aspirations of Australian society, deriving as they did from a deep-seated constitutional prescription. They should not be swept aside lightly by this Court. Doing so would renounce an important part of the nation’s institutional history and the egalitarian and idealistic values that such history has reinforced in the field of industrial disputes and employment standards because of the constitutional prescription. [531] Conclusion: statutory invalidity: Subject to what follows, I therefore consider that this Court should adhere to the conclusion inherent in the hundreds of earlier cases over more than a century in which the Court has held or implied that, whatever the expanding content of the corporations power in s 51(xx) might otherwise permit, it does not sustain a law which, properly characterised, is one “with respect to” the subject matter of s 51(xxxv), that is, the prevention and settlement of interstate industrial disputes. This new Act is such a law. It does not comply comprehensively with the dual requirements laid down in 222 s 51(xxxv) for laws with respect to that subject. That conclusion presents the issue of its constitutional invalidity.

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Work Choices Case cont. The relevance of the Constitution’s federal character The federal structure: … [534] From before the commencement of the Constitution and during the first century of its operation, federal regulation of industrial relations in Australia co-existed with various forms of State (and later Territory) laws. The resulting diversity of legal regulation has permitted a legal and administrative symbiosis. It has resulted in occasional diversity of approach, inventiveness in standards and entitlements and appropriate innovation. Such innovation, by which industrial standards determined in one jurisdiction of Australia are tested and sometimes copied in another, constitutes a good illustration of an important advantage of the federal form of government enshrined in the Constitution. [535] When it comes to defending the rights of property owners from the purported deployment of other federal powers which would deprive them of the protections in s 51(xxxi) of the Constitution, this Court has been rightly protective (Schmidt (1961) 105 CLR 361 at 371–373; Re Director of Public Prosecutions; Ex parte Lawler (1994) 179 CLR 270 at 283). Within the Constitution, it has been vigilant, even sometimes vigorous, in upholding the entitlement of State lawmakers to experiment and innovate (see, eg, Fardon v Attorney-General (Qld) (2004) 78 ALJR 1519; Baker v The Queen (2004) 78 ALJR 1483; Forge v Australian Securities and Investments Commission (2006) 229 ALR 223). Unfortunately, in recent times, this Court’s willingness to do so has been missing in the field of laws on industrial disputes. When it comes to defending 223 employees from analogous legislative incursions into the protections provided to their rights by s 51(xxxv), the Court’s vigilance wanes noticeably, as it has in this case. Both capital and labour deserve the even-handed protection that the Constitution provides in the language respectively of s 51(xxxi) and (xxxv). There should be no double standards in constitutional protection. Yet, once again, it is revealed that double standards exist. [536] Avoiding offence to the Engineers’ Case: The joint reasons hint that the concerns of the States, expressed in these proceedings, about the federal implications of the Commonwealth’s submissions as to the ambit of s 51(xx), amount to an illicit attempt to undermine the doctrine of this Court as stated in the Engineers’ Case (at [82]). … But none of the plaintiffs, whether States or unions, challenged the general approach stated in the Engineers’ Case. None of them asserted reserved powers for the States or an implied immunity of new pockets of State law from federal legislative incursion. [537] Ambit of s 51(xx) and the States: Nevertheless, the plaintiffs did draw to notice the extremely large potential of the Commonwealth’s submissions, if accepted, to exclude State law from operation in areas that for more than a century they have occupied in a hitherto creative interaction with federal law. If, by the use of definition provisions, as in the Amending Act, comprehensive federal legislation that is really a law with respect to another subject matter (such as the prevention and settlement of industrial disputes and how they are to be resolved) may be dressed in the raiments of legislation with respect to constitutional corporations, a very significant risk is presented to the overall balance envisaged by the constitutional distribution of powers. That risk, in the field of resolving industrial disputes, is the almost total exclusion of State law from a significance it has enjoyed from the birth of the Commonwealth. [538] Indeed, such exclusion is the announced intention of the Amending Act whose ambit, if valid, is proclaimed to extend immediately to an asserted 85% of Australian employees. Moreover, if the 224 Amending Act is valid, it affords non-corporate employers, at their option, an entitlement (by the relatively simple and inexpensive procedure of incorporation) unilaterally to alter the industrial disputes regime applying to themselves and all of their employees. [539] The States, correctly in my view, pointed to the potential of the Commonwealth’s argument, if upheld, radically to reduce the application of State laws in many fields that, for more than a century, have been the subject of the States’ principal governmental activities. Such fields include education, where universities, tertiary colleges and a lately expanding cohort of private schools and colleges are already, or may easily become, incorporated. Likewise, in healthcare, where hospitals (public and private), clinics, hospices, pathology providers and medical practices are, or may readily become, incorporated. … All of the foregoing fields of regulation might potentially be changed, in whole or in part, from their traditional place as subjects of State law and regulation, to federal legal regulation, through the propounded ambit of the corporations power. 456

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Work Choices Case cont. [540] Upon the Commonwealth’s theory of s 51(xx) of the Constitution, evident in the Amending Act in issue in these proceedings, such a shift of lawmaking in Australia could be achieved by the simple enactment by the Federal Parliament of a law dealing with any of the foregoing subjects but applied to corporations performing functions relevant in some way to such fields. The Amending Act provides the new federal template. … Not all the foregoing fields of legislation are subject to a countervailing “safeguard, guarantee or qualification” appearing expressly in another head of constitutional power as a brake on such constitutional destabilisation. But where such a brake exists, there is good constitutional reason for engaging it. [541] Testing propositions by outcomes: … It is always valid to test a legal proposition by reference to the consequences that would flow from its acceptance. Such an approach applies as much in constitutional adjudication as to decision-making on anything else. It would not normally be assumed that such a potentially radical shift of governmental responsibilities from the States to the Commonwealth could be achieved by the expedient of utilising a federal head of power (s 51(xx)) which successive Federal Parliaments and governments have overlooked or misread these past hundred years. 225 In the design of the Constitution, such a major shift would normally require the concurrence of Australian electors in accordance with s 128 of the Constitution – as successive governments have accepted or assumed. [542] Therefore, when such a radical proposition, of such substantial constitutional potential, is advanced before this Court, this Court should test its correctness by its possible consequences. In my view, the use of s 51(xx) exhibited in the Amending Act carries with it, if valid, a very large risk of destabilising the federal character of the Australian Constitution. When such a conclusion is reached, only a formulaic approach to the law of the Constitution would lead this Court to ignore it. [543] In effect, the risk to which I refer is presented by a shift in constitutional realities from the present mixed federal arrangements to a kind of optional or “opportunistic” federalism in which the Federal Parliament may enact laws in almost every sphere of what has hitherto been a State field of lawmaking by the simple expedient (as in this case) of enacting a law on the chosen subject matter whilst applying it to corporations, their officers, agents, representatives, employees, consumers, contractors, providers and others having some postulated connection with the corporation. [544] … Even those, like myself, who accept the need to which Windeyer J referred in the Payroll Tax Case (1971) 122 CLR 353 at 396–397 for gradual accretions of some legislative powers to the Commonwealth to reflect “developments that had occurred outside the law courts” (at 396), must baulk at the dysfunctional potential of the Commonwealth’s central proposition in these proceedings. It is that potential that demands from this Court, which is the guardian of the Constitution (Victoria v Commonwealth (1975) 134 CLR 81 at 118 per Barwick CJ), a response protective of the text and structure of the document. If this Court does not fulfil its protective role under the Constitution, what other governmental institution will do so? What other institution has the power and the will to do so? [545] Confining the federal issue: The larger issues involved in delimiting the scope of the corporations power (and in identifying the full range of laws that could be characterised as laws “with respect to” constitutional corporations) can indeed be postponed to future cases that will now surely follow the outcome of these proceedings. Where, 226 as here, the entire scheme of the law in question, including the “rights, duties, powers and privileges which it changes, regulates or abolishes” (Fairfax v Federal Commissioner of Taxation (1965) 114 CLR 1 at 7 per Kitto J), requires it to be characterised in such a way that it corresponds to s 51(xxxv), rather than s 51(xx), the precise ambit of the corporations power need not be determined. As explained, the Act is concerned with the relations between employers and employees, a fact which confirms its general character as a law with respect to the prevention and settlement of “industrial disputes” and the associated regulation of “industrial” or “workplace” relations. [546] In the present proceedings it is sufficient to say that the content of the power afforded to the Federal Parliament under s 51(xx), with respect to the corporations defined in that paragraph, does not extend to a power to make laws that, in truth, relate to industrial disputes. As the majority suggests (at [51]), it is necessary to give effect to certain basic principles of constitutional interpretation, including the requirement that each provision of the Constitution, including the powers contained in [5.460]

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Work Choices Case cont. s 51, be read in light of the remaining provisions, and any implications drawn from the document’s overall structure and design. In short, the limitations suggested by the text of the two paragraphs in question, read together (pars (xx) and (xxxv)), are reinforced by the overall federal structure and design of the Australian Constitution, and by the offence to that structure and design that would be inflicted by a failure on the part of this Court to uphold the limitation imported into the legislative power afforded by par (xx) of s 51 by the power conferred in par (xxxv). [547] Yet is this approach to the interaction of the two paragraphs, suggested by the language of the powers and the federal character of the Constitution, as claimed, an unacknowledged reversion to the constitutional notions that held sway before this Court’s decision in the Engineers’ Case? The Commonwealth says so. I would reject that description. [548] The rule of construction expressed in the Engineers’ Case is not an absolute one. It does not contemplate that the Federal Parliament could use its identified heads of legislative power to destroy the States and their express and implied role in the Constitution. It is impossible to ignore the place envisaged for the States in the Constitution. Reference is made to that role throughout the constitutional document. It is the people of the several States who “agreed to unite in one indissoluble Federal Commonwealth” (Preamble to the Commonwealth of Australia Constitution Act 1900 (IMP)). Both in the covering clauses and in the text of the Constitution itself, the federal character of the polity thereby created is announced, and provided for, in great detail. [549] Under the Constitution, the position of the federal government is necessarily stronger than that of the States for the reasons that Dixon J 227 explained in Melbourne Corporation v Commonwealth ((1947) 74 CLR 31 at 82–83, [quoted] in joint reasons at [195]). But it would be completely contrary to the text, structure and design of the Constitution for the States to be reduced, in effect, to service agencies of the Commonwealth, by a sleight of hand deployed in the interpretation by this Court of specified legislative powers of the Federal Parliament. Specifically, this could not be done by the deployment of a near universal power to regulate the “corporations” mentioned in s 51(xx). Such an outcome would be so alien to the place envisaged for the States by the Constitution that the rational mind will reject it as lying outside the true construction of the constitutional provisions, read as a whole, as they were intended to operate in harmony with one another and consistently with a basic law that creates a federal system of government for Australia. [550] In applying the doctrine in the Engineers’ Case, this Court has repeatedly given effect to reasoning that has confined the ambit of express grants of federal legislative power so that they could not be used to control or hinder the States in the execution of their central governmental functions (Melbourne Corporation (1947) 74 CLR 31; see also Austin (2003) 215 CLR 185). Once such an inhibition on the scope of federal legislative powers is acknowledged, derived from nothing more than the implied purpose of the Constitution that the States should continue to operate as effective governmental entities, similar reasoning sustains the inference that repels the expansion of a particular head of power (here, s 51(xx)) so that it would swamp a huge and undifferentiated field of State lawmaking, the continued existence of which is postulated by the constitutional language and structure. Why, for instance, bother to have State Parliaments (eg Constitution, ss 9, 15, 25, 41, 107), with significant federal functions to perform (eg Constitution, ss 9, 41, 51(xxvii) and (xxxviii), 107, 108, 111, 123), if by dint of an interpretation of s 51(xx) of the Constitution the legislative powers of such Parliaments could effectively be reduced unilaterally by federal law to minor, or even trivial and continually disappearing functions, specifically in the laws governing industrial disputes? Relatively few important activities in contemporary Australia have no direct or indirect connection with a corporation, its employees, agents and those who trade with it. [551] In other concerns, arguably less central to the expressed structure and design of the Constitution, this Court has found implications in the Constitution to inhibit the enactment of laws deemed inconsistent with its federal structure and design. Thus, federal laws may not be enacted that are inconsistent with the separation of the judicial power provided by Ch III of the Constitution (Boilermakers’ Case (1956) 94 CLR 254; see also Wilson v Minister for Aboriginal and Torres Strait Islander Affairs (1996) 189 CLR 1). State laws cannot be validly enacted that would be incompatible with the capacity of State courts 228 under s 77(iii) to be invested with federal jurisdiction (Kable v Director of 458

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Work Choices Case cont. Public Prosecutions (NSW) (1996) 189 CLR 51). Neither federal nor State laws may be enacted that are inconsistent with the implication, inherent in the creation of accountable democracy in the federal and State legislatures, of representative government necessitating open discussion of matters of political and governmental concern (Theophanous v Herald & Weekly Times Ltd (1994) 182 CLR 104; Lange v Australian Broadcasting Corporation (1997) 189 CLR 520). [552] If, consistently with the decision in the Engineers’ Case, such inhibitions on lawmaking may be drawn from the design and structure of the Constitution, its provisions and purposes, so may the limitations on the ambit of s 51(xx), urged by the plaintiffs in these proceedings. The test for all such implications is necessity. Here, necessity is established because, if s 51(xx) is not construed and limited as the plaintiffs submit, the ambit and operation of that paragraph is potentially distorted and blown out of all proportion. … [554] Division of governmental powers: The foregoing conclusion has been reached by reference to the text and structure of the Constitution. However, there is a still further, and connected, consideration. This is the overall design of the Constitution as an instrument of government intended to distribute and limit governmental powers in Australia in specified ways. By the Constitution, such powers are to be divided between the several polities in the Commonwealth (the federal, State and Territory jurisdictions). … 229 [556] Defending the checks and balances of governmental powers in the Constitution is thus a central duty of this Court. Because of the potential of modern government, corporate developments, global forces and contemporary technology to concentrate power even more than was possible in earlier decades, the necessity to uphold the place of the States in the federation has become clearer in recent times. Just as the needs of earlier times in the history of the Commonwealth produced the Engineers’ Case, so the present age suggests a need to rediscover the essential federal character of the Australian Commonwealth (Forge (2006) 229 ALR 223 at 276 [184]–[185]). In these proceedings, this consideration lends support and justification to the unanimous resistance of the States to the Commonwealth’s interpretation of s 51(xx), particularly when read with s 51(xxxv). [557] Conclusion: respecting federalism: The States’ argument can be upheld without doubting the validity of the general approach to the interpretation of the Constitution adopted by this Court Engineers’ Case. As countless cases since the Engineers’ Case have shown, in giving content to the particular heads of federal power, it still remains for this Court to explain the content of the Engineers’ Case, paying due regard to all other relevant heads of federal power and to the overall structure and design of the Constitution. [558] Thus, the language of s 51(xxxv) and the basic federal character of the Constitution lend support to the plaintiffs’ central submission. This Court needs to give respect to the federal character of the Constitution, for it is a liberty-enhancing feature (XYZ v Commonwealth at 1061–1062 [110]–[112], [115], 1068 [147]). Federalism is a system of government of special value and relevance in contemporary circumstances. It is protective of the freedom of individuals in an age when the pressures of law, economics and technology tend to pull in the opposite direction. [559] If, properly characterised, the Amending Act is one with respect to the prevention and settlement of industrial disputes necessary for the regulation of industrial relations, s 51(xx) will not sustain its constitutional validity. To be valid, the law must conform to the requirements of s 51(xxxv). And this the Amending Act fails to do. Is the conclusion consistent with past authority? [560] A further issue: The Commonwealth nonetheless submitted that to read s 51(xx) as subject to the provisions of s 51(xxxv) would be inconsistent with a number of decisions of this Court in cases 230 involving analogous questions arising under federal laws with respect to industrial relations, broadly so described. Specifically, the Commonwealth argued that it would be inconsistent with decisions sustaining such laws by reference to the federal legislative powers with respect to defence (s 51(vi)), external affairs (s 51(xxix)) and trade and commerce (s 51(i)). [561] Even if it were shown that past authority in this Court presented difficulties for the plaintiffs’ arguments based on the inter-relationship between pars (xx) and (xxxv) of s 51, this would not [5.460]

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Work Choices Case cont. necessarily be fatal to the plaintiffs’ constitutional proposition. This is the first occasion on which the intersection of these two paragraphs of the Constitution has been explored in detailed argument before this Court by parties specifically presenting that issue as determinative of the outcome of their contest. Where a new legal proposition is advanced, involving suggested new insights into the Constitution, it is not unusual for that course to require this Court to rethink earlier case law and to apply the new doctrine consistently (as following the Engineers’ Case (1920) 28 CLR 129; Boilermakers’ Case (1956) 94 CLR 254; Cole v Whitfield (1988) 165 CLR 360; Kable (1996) 189 CLR 51; Lange (1997) 189 CLR 520). In proceedings such as this, where the potential of s 51(xx) to tilt the constitutional balance in such a significant way is not only postulated as an idea but actually asserted by the Commonwealth and illustrated by the Amending Act itself, it would not be surprising if this Court were obliged to reconsider earlier decisions reached in the absence of argument that sharpened the resolution of the issue. Indeed, it would be surprising if the contrary were the case. [562] The defence power: In the joint reasons, reliance is placed upon this Court’s wartime decision in Pidoto v Victoria (1943) 68 CLR 87 (at [227]–[228]). Reference is made to the interpretation of that case by Gleeson CJ in Pacific Coal (2000) 203 CLR 346 at 359–360 [29]. In that decision, his Honour stated that Pidoto denied an interpretation of s 51(xxxv) as importing a negative implication on the use of other heads of federal power to enact laws with respect to conditions of employment – in other words, laws generically answering to the description of laws with respect to industrial relations. The holding in Pidoto was that laws enacted under the defence power in time of war, dealing with industrial matters in ways that would not have been valid if enacted under s 51(xxxv), were nonetheless valid. The decision is one unique to the exceptional circumstances affecting the ambit of the defence power during hostilities that threaten the life of the nation. … 233 … [569] … [N]either the decision in Pidoto, nor the presence of par (vi) in s 51, causes serious difficulty for the plaintiffs’ central argument. By its essential nature and purpose, the defence power is a very special one, particularly in the urgencies of actual wartime. Whilst subject to the other provisions of the Constitution, in time of hostilities the defence power is given a large and exceptional reading so that it can fulfil its objective purpose in the overall constitutional design. This is the correct explanation of Pidoto (see also reasons of Callinan J at [797], [809]). That decision casts no doubt on the availability of the plaintiffs’ arguments based on the general interaction of s 51(xx) and (xxxv), as involved in these proceedings. [570] The external affairs power: The Commonwealth also relied on the decision in the Industrial Relations Act Case (1996) 187 CLR 416. That decision upheld the validity of certain provisions introduced into the Industrial Relations Act 1988 (Cth) by amendments enacted by the Parliament in 1993 and 1994 based on the external affairs power. … 234 [574] … [I]t is not inconsistent with the plaintiffs’ central argument, based on the operation of s 51(xxxv), that laws enacted in reliance on the external affairs power are not subject to the restrictions and limitations expressed in s 51(xxxv). By way of contrast, the legislative power granted to the Federal Parliament by s 51(xx) is quite different from that granted by s 51(xxix). The former is a power to make laws with respect to the nominated (legal) persons. The latter is a power of much greater amplitude and focus, addressed to a subject matter of general importance for the existence of the Commonwealth as an independent nation within the community of nations. … 235 [577] The trade and commerce power: The final line of authority propounded as an obstacle to the plaintiffs’ invocation of the requirements of s 51(xxxv) is that relying on s 51(i) of the Constitution. … 236 [580] Because the present argument concerning s 51(xx) was not advanced in any of the cases in which this Court has affirmed the validity of laws providing for industrial matters in the maritime industry, there is no considered reasoning of this Court that rejects (or needed to reject) the inter-relationship argument now advanced by the plaintiffs. The precise way in which s 51(i) and (xxxv) potentially intersect and whether the former is subject to the restrictions and limitations of the latter, involve questions that should await proceedings in which the issue needs to be decided. … 237 [583] Conclusion: no impediment: It follows from this reasoning that there is no impediment in the way of this Court’s accepting the central submissions of the plaintiffs. In my view, the power afforded to the Federal Parliament by s 51(xx) of the Constitution must be read together with that 460

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Work Choices Case cont. afforded by s 51(xxxv). Where, properly analysed, the law under challenge is not a law with respect to corporations but is to be characterised as a law with respect to the prevention and settlement of industrial disputes, it must conform to the negative implication contained in the safeguard, restriction or qualification (or guarantee) stated for federal laws on that subject in par (xxxv). To the extent that the Amending Act is to be so qualified and does not conform to such requirements, it is constitutionally invalid. … Conclusion: the Amending Act is invalid [Kirby J summarised his views at [606]–[614].] … Respecting federalism: … 245 [612] This Court and the Australian Commonwealth need to rediscover the federal character of the Constitution. It is a feature that tends to protect liberty and to restrain the over-concentration of power which modern government, global forces, technology, and now the modern corporation, tend to encourage. In this sense, the federal balance has the potential to be an important restraint on the deployment of power. In that respect, federalism is a concept of constitutional government especially important in the current age. By this decision, the majority deals another serious blow to the federal character of the Australian Constitution. We should not so lightly turn our backs on the repeatedly expressed will of the Australian electors and the wisdom of our predecessors concerning our governance. … [614] Limiting the corporations power: The precise constitutional issue now presented has not previously been decided by this Court because, for most of the past century, its resolution was regarded as axiomatic. It was self-evident that the corporations power did not extend so far as the majority now holds it to do. … I accept that the corporations power in the Constitution, when viewed as a functional 246 document, expands and enlarges so as to permit federal laws on a wide range of activities of trading and financial corporations in keeping with their expanding role in the nation’s affairs and economic life. But there are limits. Those limits are found in the express provisions and structure of the Constitution and in its implications. This Court’s duty is to uphold the limits. Once a constitutional Rubicon such as this is crossed, there is rarely a going back. [615] That is why this is such an important case for the content of constitutional power in Australia. The majority concludes that not a single one of the myriad constitutional arguments of the States succeeds. Truly, this reveals the apogee of federal constitutional power and a profound weakness in the legal checks and balances which the founders sought to provide to the Australian Commonwealth. In my view, particular provisions of the challenged legislation, which, if enacted separately, might be valid, fall with the overall design of the new law. Severance is not possible without imposing on this Court an impermissible function of making a new law with a different focus and purpose. The entire Amending Act is constitutionally invalid. This Court should so hold. … Callinan J also dissented.

[5.470]

1.

Notes&Questions

Both Kirby J ([615]) and Callinan J ([619]) noted the constitutional importance of the case for the federal balance of power – in Kirby J’s words, it was a “a constitutional Rubicon” ([614]). The Sydney Morning Herald’s page one headline was “The day true power went to Canberra” (15 November 2006), and the Australian Financial Review remarked, more soberly, that the case was “an historic landmark in the evolution of the constitution and the balance of federal-state relations” (“A big shift in the balance of power” (Editorial), 15 November 2006, p 66). Nevertheless, it received considerable support. The Australian commented that “[t]he High Court has done Australia a great service” in upholding the legislation (“High Court Ruling a Reform Positive” (Editorial), 15 November 2006, p 17). The Prime Minister at the time, Mr John Howard sought to soften the impact of the [5.470]

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case by remarking that “It’s not the intention of the Government to interpret this decision as some kind of carte blanche for some massive expansion of Commonwealth power” (T Dick, “High noon for the states”, Sydney Morning Herald, 15 November 2006, p 14), but few took this seriously, noting that the power will be used, by the then (Labor) Opposition when it achieves office, if not by the Government. For the Prime Minister’s further comments, see Roth and Griffith, below. The decision was not unexpected. It represented an application of orthodox methods of constitutional interpretation since the literal interpretation of s 51(xx) supports the view that any law which provides that a constitutional corporation shall/shall not do something would fall within s 51(xx), as Griffith CJ noted long ago in Huddart, Parker (1909) 8 CLR 330 at 348. Presumably, that is why some commentators suggested that the outcome of the case had been inevitable since the Engineers’ Case in 1920: N O’Malley, “Appeal was lost 86 years ago – constitution expert”, Sydney Morning Herald, 15 November 2006, p 8; M Priest and M Skulley, “Court extends PM’s power over states, Australian Financial Review”, 15 November 2006, 1 at 12. However, that view assumes that the reasoning of the dissenting justices is incompatible with the Engineers’ Case, a view Kirby J, especially, plausibly denied. As important as the case is for its actual decision, like the Engineers’ Case it is likely to have even greater symbolic importance, both for effectively spelling the end of the “Australian Settlement” of Commonwealth industrial arbitration, and for its impact on State exclusive powers, in respect of which it is likely to surpass the Tasmanian Dam Case (1983) 158 CLR 1 and join the Engineers’ Case (1920) 28 CLR 129 and the First Uniform Tax Case (1942) 65 CLR 373 in the demonology of proponents of State Rights. For an early sober discussion of the case and its impact on the States, see L Roth and G Griffith, The Workplace Relations Case – Implications for the States (NSW Parliamentary Library Research Service, Briefing Paper No 18/06). The States have weathered many constitutional setbacks because, although weak constitutionally and financially, they are politically strong and enjoy strong public support. They will survive the Work Choices Case also, and adapt to the expected consequential Commonwealth inroads in education, health and environmental regulation. But the case highlights a fundamental problem of Australian constitutionalism – that the Commonwealth enjoys a monopoly over constitutional reform. If s 128 authorised the States and/or electors to propose constitutional alterations, the States (with popular support) could reverse decisions such as Work Choices, but there is no possibility of the Commonwealth proposing such a course. Serious consideration should be given to amending s 128 to remove the Commonwealth’s monopoly over the means of constitutional reform. 2.

What is the majority’s ratio decidendi? The joint judgment appears to rely on two grounds: (a) Gaudron J’s view in Dingjan and Re Pacific Coal that s 51(xx) extends to regulating “the persons by and through whom [constitutional corporations] carry out [business] functions and activities” (Dingjan): see [178]; and (b)

the holding in Actors Equity that s 51(xx) extends to laws protecting the business of constitutional corporations: see [198] and [258]. However, the majority recognises that the power is wider than this: see [260].

Are these independent grounds for the decision?

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Callinan J in dissent suggested (at [897]) that the majority essentially endorsed the view that any law which provides that a constitutional corporation shall/shall not do something falls within s 51(xx). Is he correct? Is this not essentially the view of Gaudron J in Re Pacific Coal adopted by the majority at [178] (“the power … extends to the regulation of the activities, functions, relationships and the business of a [constitutional] corporation”) and the majority’s view in [198] (“single out constitutional corporations as the object of statutory command”)? In any event, is it not strange that the majority singled out for adoption the views of Gaudron J who dissented in Dingjan, while ignoring the broad view of McHugh J, one of the majority justices, when discussing that case (see [173]–[177])? Likewise, why did the majority ignore the views of Mason, Murphy and Deane JJ in upholding s 10(2) and (3) of the World Heritage Properties Conservation Act 1983 (Cth) when discussing the Tasmanian Dam Case: see [166]–[169]? Cf Callinan J at [857]. Callinan J also stated that the High Court’s decision upholding s 10(4) of the World Heritage Properties Conservation Act 1983 (Cth) in the Tasmanian Dam Case “self-evidently does not support the validity of the Act in question here” ([861]). Is he correct? Is the analogy drawn by Kirby J between s 51(xiii), (xiv) and (xxxi) (and, by Callinan J, s 51(xiii) and (xvii)) on the one hand and s 51(xxxv) on the other convincing? Does it, perhaps, require employment of a doctrine of “federal balance” or “federal context” to make the parallel plausible? See Callinan J at [796]. Do Kirby J and Callinan J employ federal considerations in a similar manner? Might it be said that Kirby J employs the Constitution’s federal character as an interpretive tool while Callinan J expands the “structural integrity” principle in Austin v Commonwealth (2003) 215 CLR 185 to include a minimum content of State exclusive power (see [868] (“by stressing the essential and constitutional features of the States, [Austin] recognizes the need for, and the constitutional requirement and reality of the federal balance”), [869], [883], [894])? Is such reasoning consistent with the Engineers’ Case (1920) 28 CLR 129 (not that Callinan J would be troubled if it were not: see [747], [764])? What does Callinan J mean in remarking: “Even when the Commonwealth does have the relevant power, the exercise of it may be unconstitutional” ([777])?

[5.480] The court had occasion to examine the issue of limitations to the corporations power

following the Work Choices Case in Williams v Commonwealth (Williams No 1) (2012) 248 CLR 156 and Williams v Commonwealth (Williams No 2) (2014) 252 CLR 146. In Williams No 1, at issue was the validity of the Commonwealth government’s funding program for school chaplains. Apart from statutory appropriation, the program itself and associated spending was not authorised by separate legislation, the Commonwealth relying on the executive power of the Commonwealth in s 61 of the Constitution. The program and the spending was administered by the Commonwealth pursuant to administrative guidelines and by way of funding agreements with those who provided the services. The scheme was challenged by the plaintiff on the basis that such spending could not be authorised by s 61 alone, it not being a source of spending power. In the instant case, the relevant agreement was with the Scripture Union of Queensland which was an incorporated entity. Prior to this case, it had been a “common assumption” that the executive power of the Commonwealth in s 61, the Commonwealth, exercising one of its permitted capacities, did have the power to contract and spend at least where the subject matter of the contract was within Commonwealth legislative competence, that is, if the spending could be validly otherwise authorised by Commonwealth legislation. The Commonwealth naturally submitted that s 51(xx) could support legislation providing for the agreement and related spending and therefore the program was valid. [5.480]

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However, because a majority of the Court rejected this common assumption, (French CJ, Gummow and Bell JJ, and Crennan J; Heydon J dissenting), and thus held that the program was invalid, s 51(xx) was considered only by a minority. Hayne J and Kiefel, assuming but without deciding that the common assumption was correct, held that legislation pursuant to s 51(xx) could not authorise the program. This was because the administrative guidelines did not require that an agreement could be entered into only with a trading or financial corporation and thus did not single out such corporations for the benefit, nor discriminate between these and non-corporate legal entities (at 276 [272] per Hayne J, 368 [575] per Kiefel J). In Williams No 2, the Commonwealth’s swift legislative response to Williams (No 1) was impugned. The legislation purported to provide statutory authorisation for the chaplaincy program as well as other funding arrangements for other government programs. This was done by amending the Financial Management and Accountability Act 1997 (Cth) to insert s 32B which provided such authorisation for those programs provided for by the Regulations under the Act, including the chaplaincy program. The specific issue in the case was whether s 32B could be authorised by the corporations power in its application to the agreement between the Commonwealth and the Qld Scripture Union. It was held by the Court (French CJ, Hayne Kiefel, Bell and Keane JJ; Crennan J agreeing) that it could not. In its reasoning, the Court read down the provisions so that they were applicable only to a constitutional corporations: the party to the agreement with the Commonwealth, “can be, even must be, a trading or financial corporation” (at 360-61[49]). This achieved the requisite singling out of constitutional corporations, as required in the reasoning of Hayne and Kiefel JJ in Williams (No 1). However, this was not enough. The Court appeared to adopt a narrow reading of Work Choices as appears from the following (at 361 [50]): 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 and apply the payments is not provided by the impugned provisions. Unlike the law considered in … Workchoices, 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 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.

Professor Stellios (in Zines, 6th ed, 2015, at pp 121-122) observed as follows: This is a narrow application of the reasoning in Work Choices. While s 32B did not (i) regulate or permit any corporate act; (ii) provide the corporation with capacity to enter the agreement or receive the payment; or (iii) authorise or regulate the activities etc of s 51 (xx) corporations or their employees, or of others whose conduct affects constitutional corporations, the Work Choices case did not identify these as exclusive ways in which a law might connect with s 51(xx) corporations to be supported by s 51(xx). The Court in Work Choices also endorsed (at 116[181]) Gaudron J’s statement in Pacific Coal that “the creation of rights, privileges belonging to” a constitutional corporation falls within power. As a matter of characterisation, there seems little doubt that the law conferred a right or privilege on those constitutional corporations that entered into a funding agreement with the Commonwealth and, on the Court’s assumption, singled them out in doing so. [122] Unless a limitation is to arise from the character of the subject matter in s 51(xx), a possibility that the Work Choices majority appeared to reject, there would seem to be a sufficient connection between the legal operation of the provision and s 51 (xx).

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To what extent, therefore, does this reasoning in Williams No 2 qualify the very broad test adopted in Workchoices? Given the unusual nature of the legislation, it being a swift, some might say purely reactive, response to the first Williams case, it may not be the best case to consider these questions. “Trading” and “financial” corporations [5.490] A “foreign corporation” is clearly “a corporation formed outside the limits of the

Commonwealth” (the Incorporation Case) (1990) 169 CLR 482 at 498, 504), but ascertaining the criteria for characterising a corporation as “trading” or “financial” presents greater difficulty. Should the corporation’s character be determined by reference to the purpose for which it was formed or by examining its current activities, or will either suffice? As a consequence of the Work Choices decision, this issue of the definition of a constitutional corporation takes on a heightened significance given the expansive power of the Commonwealth over such corporations and its potential to regulate vast areas of economic and industrial activity given the immense involvement of corporations in such activity. The first case to address this issue, R v Trade Practices Tribunal; Ex parte St George County Council (1974) 130 CLR 533, was inconclusive: Barwick CJ regarded the corporation’s current activities (at 542–543) and Stephen J its “actual or intended activities” (at 568, see also 569) as the criterion, while Gibbs J considered a “trading corporation” to be “one formed for the purpose of trading” (at 562). This difference of opinion was effectively resolved in favour of a “current activities” test in the next case to address this issue, R v Federal Court of Australia; Ex parte WA National Football League (Adamson) (1979) 143 CLR 190, in which that criterion was adopted by Barwick CJ, Mason and Jacobs JJ (at 208, 233), while Murphy J held that the term “includes those bodies incorporated for the purpose of trading; and also those corporations which trade” (at 239). That case also addressed the question of how to characterise a corporation for which trading is only one of its activities or, as some justices saw it, which trades for non-commercial purposes. The factual issue raised was whether an incorporated Australian Rules football club and State league, both of which traded on a large scale, could be “trading corporations” within s 51(xx) of the Constitution in view of their promotion of football. The High Court (by a majority of 4:3) held that they were. The criteria of the various justices are noted in the State Superannuation Board Case, below, which confirmed the view of the majority in Adamson, and applied it to a “financial corporation”.

State Superannuation Board v TPC [5.500] [State Superannuation Board v Trade Practices Commission (1982) 150 CLR 282. The State Superannuation Board was a corporation constituted under Victorian legislation to administer the Pension Fund for Victorian public servants, who contributed to it by deductions from salary. The Board determined classification for pension benefits on medical advice. On 30 June 1980 the Fund had more than 90,000 contributors and paid more than 27,000 pensions. In the 1979–1980 financial year contributions exceeded $67 million and pension payments amounted to almost $80 million. The Victorian government contributed five-sevenths of the amounts payable and the Fund contributed the balance. The Board invested its funds in governmental and semi-governmental debentures, unsecured stock and loans, loans secured by mortgage of real estate, and loans to authorised dealers in the short-term money market. The Board had an administrative and clerical staff of 86 whose salaries were paid by the Victorian government, and employed eight persons in property management whose salaries were paid by the Fund. In 1980, nine staff were employed solely in housing loans. In response to Trade Practices Commission suggestions that it may have engaged in exclusive dealing contrary to the Trade Practices Act 1974 (Cth), s 47(1), the Board sought a declaration from the Federal Court that it was not a “corporation” within s 4(1) of that Act. That application failed, Brennan J (while [5.500]

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State Superannuation Board v TPC cont. a Federal Court judge) holding that the Board was a financial corporation and, consequently, a “corporation” within s 4(1). An appeal to the Full Court of the Federal Court was dismissed unanimously, and a further appeal was then taken to the High Court, which dismissed it by 3:2. (Brennan J was obviously disqualified from sitting, as was Dawson J who had appeared as counsel for the Board on the intermediate appeal.)] Mason, Murphy and Deane JJ: 302 As at 30 June 1980, the investments of the Fund stood in the books at $487,173,000. Longer term investments fell into four main groups: semi-government and local government loans, commercial loans, housing loans to contributors and real estate. [These investments increased in total from $34.5 million in 1977 to $89.4 million in 1980.] Available surplus funds are invested, on a day-to-day basis, by way of loan on the short term money market. The investment of the Fund is, within the statutory limits, in the discretion of the appellant which is, however, on occasion, susceptible to influence from the Victorian Government and which has an understanding with that Government that it will lend support to semi-government loans. … 303 Brennan J had this to say about the appellant’s management and investment of the assets of the Fund State Superannuation Board of Victoria v Trade Practices Commission(1980) 49 FLR at 225; 33 ALR at 114: In the management of the Fund, the Board draws upon its indigenous expertise in forming its financial judgments, and it receives advice from a budget investment officer, property consultant, accountant and other staff who are skilled in matters of finance. Taking account of the enhancement in the value of the Fund’s assets, the Fund is yielding annually a fraction over 10% on the total investment. The management of the Fund is a complex function, for the Fund itself is large and there is a large number of individual transactions involved in its management. Its management accordingly requires considerable clerical work, a great deal of administration at the executive level, and the sound exercise of financial and actuarial judgment and managerial skills. Is the appellant a financial corporation? Although this Court has had to consider the meaning of the expression “trading corporation” in s 51(xx) of the Constitution in its suggested application to a county council formed under the Local Government Act 1919 (NSW) (R v Trade Practices Tribunal; Ex parte St George County Council (1974) 130 CLR 533) and in its application to a football league and a football club (R v Federal Court of Australia; Ex parte WA National Football League (1979) 143 CLR 190) (Adamson)), this is the first occasion on which it has been called upon to consider the associated expression “financial corporation”. It is our view 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”. … The two classes are not mutually exclusive – a corporation may be a financial as well as a trading corporation. In this respect the decision in Adamson is of importance for two reasons. First, the majority of the Court (Barwick CJ, Mason, Jacobs and Murphy JJ), rejecting the argument that the purpose for which a corporation is formed is the sole or principal criterion of its character as a trading corporation, concluded that the relevant character of the football leagues and the football club was to be ascertained by reference to their established activities (at 208–211, 233–237, 239–240). 304 … Secondly, the judgments of the majority in Adamson make it clear that, in having regard to the activities of a corporation for the purpose of ascertaining its trading character, the Court looks beyond its “predominant and characteristic activity” (cf 213 per Gibbs J). Barwick CJ (at 208) spoke of making a judgment “after an overview” of all the corporation’s current activities, the conclusion being open that it is a trading corporation once it is found that “trading is a substantial and not a merely peripheral activity”. Mason J (at 234) said that it “is very much a question of fact and degree” having earlier stated (at 233) that the expression is essentially “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.” Murphy J (at 239) said “As long as the trading is not insubstantial, the fact that trading is incidental to other activities does not prevent it being a trading corporation”. Indeed, it was essential to the 466

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State Superannuation Board v TPC cont. 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 categorizing the corporation as a trading corporation when it engages in the activities. Indeed, we would go on to say that there is nothing in Adamson which lends support for the view that the fact that a corporation carries on independent trading activities on a significant scale will not result in its being properly categorized as a trading corporation if other more extensive non-trading activities properly warrant its being also categorized as a corporation of some other type. If there be any difference in the comments made by the majority in Adamson it is one of emphasis only. And it is important to note that they were all directed to the issue as it arose for decision, an issue relating to a sporting club and the league with which it was affiliated; they were not aimed at the corporation which has not begun, or has barely begun, to carry on business. It might well be 305 necessary to look to the purpose for which such a corporation was formed in order to ascertain whether it is a corporation of the kind described. Like the expression “trading corporation”, the words “financial corporation” are not a term of art; nor do they have a special or settled legal meaning. They do no more than describe a corporation which engages in financial activities or perhaps is intended so to do. The nature and the extent or volume of a corporation’s financial activities needed to justify its description as a financial corporation do not call for much discussion in the present case. A finance company is an obvious example of a financial corporation because it deals in finance for commercial purposes, whether by way of making loans, entering into hire purchase agreements or providing credit in other forms, and this activity is not undertaken for the purpose of carrying on some other business. However, just as a corporation may be a trading corporation, notwithstanding that its trading activities are entered into in the course of carrying on some primary or dominant undertaking, so also with a corporation which engages in financial activities in the course of carrying on its primary or dominant undertaking. Thus a corporation which is formed by an employer to provide superannuation benefits for its employees and those of associated employers may nevertheless be a financial corporation if it engages in financial activities in order to provide or augment the superannuation benefits. All that we have said so far accords with what this Court decided in Adamson and with what the Federal Court decided in Re Ku-ring-gai Co-operative Building Society (No 12) Ltd (1978) 36 FLR 134; 22 ALR 621, where co-operative terminating building societies providing finance for their members were held to be financial corporations. There, Deane J (at 642), with whom Bowen CJ and Brennan J agreed, concluded that a corporation engaged in the activity of commercial dealing in finance was a financial corporation. By the expression “dealing in finance” his Honour referred “to transactions in which the subject of the transaction is finance (such as borrowing or lending money) as distinct from transactions (such as the purchase or sale of particular goods for a monetary consideration) in which finance, although involved in the payment of the price, cannot properly be seen as constituting the subject of the transaction”. Notwithstanding certain distinctive features of the business activities of the societies in that case, viz, the object of providing benefits for members by making loans at moderate rates of interest, their inability to turn 306 over their circulating capital in a repetitive way, their confinement in practice to making not more than one loan to each member and their performance of an important social function, the Federal Court held that the societies were financial corporations. In order to dispose of the present case, it is unnecessary to decide whether the expression “trading or financial corporations” in s 51(xx) might justify a broader interpretation of the constitutional power than that indicated by the majority judgments in Adamson or by the judgments in Ku-ring-gai. 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 and housing loans, its business in [5.500]

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State Superannuation Board v TPC cont. 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. [Gibbs CJ and Wilson J, dissented on the basis that, while they accepted that Adamson established a “current activities” test, that test was to be applied by a more stringent requirement than that adopted by the majority, vis, that “the predominant and characteristic” activity of the relevant entity was the final determinant of whether it was a “trading” or “financial” corporation: “The 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” (at 298).]

Notes&Questions

[5.510]

1.

2.

The minority’s treatment of Adamson is questionable. While it is true that Barwick CJ, Mason and Jacobs JJ considered trading to be the principal activity of the League and Club, the lower threshold in their statements of the appropriate criterion for determining whether a body is a “trading corporation” surely cannot be dismissed as mere obiter dicta (see State Superannuation Board, at 294). The minority appears incorrect in its statement of the position of Barwick CJ in Adamson, and its construction of an artificial majority in that case by combining the views of the three dissenters with that of Barwick CJ (one of the majority) is rather unorthodox, to say the least. Notwithstanding their partial deference (in State Superannuation Board) to the views of the majority in Adamson, the minority justices did not feel obliged to accord State Superannuation Board similar deference when the issue next arose in the Tasmanian Dam Case (1983) 158 CLR 1. The relevant question in Tasmanian Dam was whether the Tasmanian Hydro-Electric Commission was a “trading corporation”. It was a body corporate constituted under Tasmanian legislation to fulfil both commercial and governmental functions. It generated and sold electricity, and constructed and maintained works for its generation. It operated 24 power stations, sold electricity to 190,000 customers, employed a work force of almost 5,000 and in the 1981–1982 financial year derived over $55 million from the bulk sale of power and over $105 million from its retail sale, making a gross profit on its trading of over $103 million. The Commission’s governmental functions included licensing electricians, advising government on electricity generation and the regulation of electrical appliances, and making by-laws. The High Court held the Commission to be a “trading corporation” by a majority of 4:3. Mason J, one of the majority justices, remarked (at 156): The trading activities of the Commission … 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 pointed out that the case decided that a

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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.

Murphy, Brennan and Deane JJ reached the same conclusion for similar reasons. Brennan J noted that the Commission’s trading activities were “a substantial part of its overall activities, if not the predominant part” (at 240). Murphy J once again considered “trading corporations” within s 51(xx) to include “bodies incorporated for the purpose of trading and also those corporations which trade” (at 179), a view which Deane J appears to have supported in New South Wales v Commonwealth (the Incorporation Case) (1990) 169 CLR 482 at 511–512 (see [5.530]). Gibbs CJ dissented. (It was unnecessary for Wilson and Dawson JJ to consider this issue, but Dawson J nevertheless expressed his agreement with Gibbs CJ (at 318).) Gibbs CJ remarked (at 116–117): To say that the Commission is a “trading corporation” is to rob those words of all distinctive meaning. Of course the Commission is a corporation and it trades. But the words “trading corporations” in s 51(xx) describe corporations of a particular character. It must follow that in deciding whether a corporation answers the description, it is necessary to determine its true character. In R v Trade Practices Tribunal; Ex parte St George County Council, I thought that the purpose for which a corporation was formed provided the discrimen by which its character should be determined. Subsequent cases have shown that in determining the character of the corporation the Court must consider all the circumstances relating to the corporation – its activities as well as the purposes of its formation … I have so recently discussed this question, in Fencott v Muller, that I need do no more than repeat what I then said: … a corporation cannot take its character from activities which are uncharacteristic, even if those activities are not infrequently carried on. It may indeed be wrong to insist on finding activities that are “primary” or “predominant”, but it is equally wrong to be satisfied with activities that are “substantial”, if the latter activities do not, in all the circumstances, show that the corporation has a character which the Constitution requires. ((1983) 152 CLR 570 at 588–589) The Commission is not a trading corporation. It is a corporation sui generis. Its activities include trading – in that it supplies electricity for profit – and trading on a substantial scale, but they include also the construction on a large scale of generating plants and works for the distribution of electricity to enable it to keep Tasmania supplied with electricity; in that respect it discharges a public function of vital importance to the State. It performs other governmental functions of less importance … It is in some respects subject to ministerial power, and is accorded special powers and privileges similar to some which the Crown enjoys, although it is not the servant of the Crown: Launceston Corporation v Hydro-Electric Commission (1959) 100 CLR 654. It is “a public authority with public purposes, as distinct from a private undertaking engaged upon a merely commercial enterprise, and … its powers are to be exercised for the good of the State”: Launceston Corporation v Hydro-Electric Commission (100 CLR at 661). Its trading activities, although significant, do not indicate its true character.

3.

Some Federal Court cases have applied Adamson and State Superannuation Board liberally, with little apparent weight being given to the element of overall proportionality of trading activities. Thus, (eg, see E v Australian Red Cross Society (1991) 27 FCR 310 and Quickenden v O’Connor (2001) 109 FCR 243) the Full Court of the Federal Court held the University of Western Australia to be a “trading corporation”, even though its [5.510]

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trading revenues amounted to only 18% of its total operating revenues. These two decisions have been described as “striking”: WJ Ford, “Using the Corporations Power to Regulate Industrial Relations” (2001) 6 Employment Law Bulletin 70 at 74. 4.

Any criticism of Gibbs CJ for taking insufficient account of the views of the majority in State Superannuation Board must be tempered by consideration of the intervening case of Fencott v Muller (1983) 152 CLR 570, to which Gibbs CJ alluded in Tasmanian Dam. Fencott considered the appropriate criterion for characterising a corporation before it has undertaken any activities. In that case, a “shelf company” (“Oakland”) was acquired to wind up the affairs of a trust which operated a business which had been sold. Oakland was to receive the balance due from the purchaser, pay off creditors of the business, and distribute any surplus to the trust beneficiaries. Oakland was empowered by its memorandum and articles of association to trade, but had never done so, and would never do so. It was nevertheless held by the High Court to be a trading or financial corporation (by a majority of 4:3). In their joint judgment, the majority (Mason, Murphy, Brennan and Deane JJ) remarked (at 601–602): Oakland has not engaged in trading activities. Nor has it engaged in any financial activity, for it has not hitherto engaged in any financial transactions … 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 (see State Superannuation Board (Vic) v Trade Practices Commission (1982) 150 CLR 282, 304). 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.

Gibbs CJ, Wilson and Dawson JJ dissented. Gibbs CJ remarked (at 589–590): I have said that the purposes for which a corporation is formed may be relevant in determining its character. That will be particularly so when the corporation has not yet begun, or has only just commenced, the activities which it was intended to carry on. However, in deciding what are the purposes for which a corporation is formed, the objects clause of its memorandum of association is an inadequate and may be a misleading guide. For many years it has been the practice of those drawing memoranda of association to give to companies powers to engage in multifarious activities, many of which bear no relation to the actual or intended affairs of the company … 590 But to accept that the intended as well as the actual functions of the corporation are relevant for the purpose of determining its character, does not mean that it is permissible to look at the memorandum of association alone for that purpose. The whole of the evidence as to the intended operations of the corporation is relevant and is likely to show, as it shows in the present case, that many of the objects in the memorandum were inserted out of an abundance of caution, with no intention of describing the activities in which the company is actually engaged or is likely to engage. In the present case the evidence shows that at no time during its existence has Oakland been intended to engage, and at no time has it engaged, in trading or financial activities. It is not a corporation of the kind to which par 51(xx) refers. 470

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Wilson J agreed, noting that the corporation should be characterised by reference both to its activities and intended purpose, which in the case of a shelf company means the purpose of its acquisition (at 611). Dawson J reached the same conclusion, and argued that purpose of formation cannot be relevant only before a corporation has commenced to carry on business (at 623): If purpose is initially relevant in determining character, it must remain relevant after a corporation has commenced to engage in some or all of its eventual activities.

5.

6.

With respect, the conclusion of the majority appears difficult to justify. If current activities are the criterion for characterising an operational corporation, intended activities surely ought to have been the criterion here, in which case Oakland would have been neither a trading nor a financial corporation. The corporation’s powers did not reveal its purpose; as Dawson J aptly remarked, the majority appear to “confuse capacity with purpose” (at 624). For criticism of the decision, see Booker, Glass and Watt, Federal Constitutional Law: An Introduction (2nd ed, Butterworths, Sydney, 1998), at para 5.22. Professors Zines and Stellios, on the other hand, prefer the majority’s view: See Stellios, Zines (6th ed, 2015), pp 111-112. Could the Commonwealth legislate under s 51(xx) with respect to an individual foreign, trading or financial corporation? There are dicta either way in the Tasmanian Dam Case (1983) 158 CLR 1: Murphy J held that s 51(xx) “enables Parliament to make laws covering all internal and external relations of all or any” such corporations (at 179, emphasis added), whereas Wilson J considered there to be “a necessary generality attending a law with respect to any of the corporations mentioned” (at 202, emphasis added), although his Honour found it unnecessary to reach a definitive conclusion. For a discussion of this issue, see G Winterton, “Comment on Section 51(xx)” (1984) 14 Federal Law Review 258 at 262–264. The most recent case to consider the definition of a constitutional corporation is Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Queensland Rail (2015) 256 CLR 171. The case considered the meaning of “corporations” in s 51(xx) in addition to the meaning of “foreign corporations”, and “trading or financial corporations”.

Queensland Rail Case [5.520] Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Queensland Rail (2015) 256 CLR 171. [The Queensland Rail Transit Authority (“the Authority”) is an authority established by the Queensland Rail Transit Authority Act 2013 (Qld) (“the Act”). Section 6(2) of that Act stated expressly that Queensland Rail “is not a body corporate”. The plaintiffs argued that the authority was a constitutional corporation because it had a separate legal personality and perpetual succession and that it met the criteria to be classified as a “trading corporation” in s 51(xx). The argued to the contrary; that is, it was not a “corporation” and, even though accepting the “current activities” test, it did not meet the conditions to be regarded as a “trading corporation”. The plaintiffs further submitted that the industrial relations provisions in the Act were inconsistent with the Fair Work Act 2009 (Cth) and thus invalid by the operation of s 109 of the Constitution. All the justices agreed that, despite the express words in the legislation to the to the contrary, Queensland Rail was a “trading” corporation for the purposes of s 51(xx).] French CJ, Hayne, Kiefel, Bell, Keane and Nettle JJ: [1] 178 … The Authority… called (s 63) Queensland Rail … can create and be made subject to legal rights and duties, which are its rights and its duties (s 7). It can sue and be sued in its name (s 7(4)). It can own property (s 7(1)(b)). [2] The QRTA Act provides (s 6(2)) that the Authority “is not a body [5.520]

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Queensland Rail Case cont. corporate”. The QRTA Act provides (s 6(3)) that the Authority does not represent the State, and it follows from this provision, coupled with the provisions which give the Authority separate legal personality, that the Authority is not, and is not a part of, the body politic which is the State of Queensland. 179 [3] The Authority operates as a labour hire company, providing labour used by Queensland Rail Ltd (QRL) to operate railway services in Queensland. QRL is a company governed by the Corporations Act 2001 (Cth). Pursuant to s 67 of the QRTA Act, the Authority holds all the shares in QRL. [4] If [the Authority is “trading corporation” … the relations between the Authority and its employees are governed by federal industrial relations legislation. If it is not, State industrial relations legislation applies. … [5] The Authority accepts that it is an artificial legal entity formed within the limits of the Commonwealth. It submits that it is not a trading or financial corporation. Rather, it submits, it is an entity which is not a “corporation” and which is not a “trading or financial” corporation. These submissions should be rejected. The Authority is a trading or financial corporation within the meaning of s 51(xx). … 180 Section 51(xx) [11]… 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)”. The Attorney-General of the Commonwealth, intervening, proffered a generally similar description of what is a corporation: “any juristic entity with distinct, continuing legal personality (evidenced by, for example, perpetual succession, the right to hold property and the right to sue and be sued) that is not a body politic reflected or recognised in the Constitution.” 181 [12] 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, … the express provision, by s 6(2) of the QRTA Act, that the Authority “is not a body corporate” is especially significant because it reveals the intention of the Parliament and requires the conclusion that the Authority is not a “corporation”. … [14] The Authority further 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 (QRL) for an amount which yields no profit for the Authority. A “corporation”? [15] For the purposes of deciding this case, it is not necessary to attempt to state exhaustively the defining characteristics of a corporation (whether a “foreign corporation” or a “trading or financial corporation”). Whether the Authority is a trading corporation can be answered without attempting that task. [16] The QRTA Act creates the Authority as a distinct entity. The Authority can have rights and duties. It is, therefore, a separate legal (182) entity. … [17] At the time of federation, and for centuries before that time, the only artificial persons in English law were corporations, and corporations were either aggregate or sole. The development of the trust in English law had permitted the establishment and maintenance of arrangements about property and its use without the interposition or creation of any separate artificial legal entity. … [18] The Authority is neither a corporation sole nor a corporation aggregate of a kind that existed at the time of federation. … [19] [However] [i]t 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 and organised in the way in which corporations of those kinds were constituted and organised in 1900. 183 [20] Foreign corporations are constituted and organised according to the law of another jurisdiction. That law may, and commonly will, differ from Australian law, sometimes markedly. Absent referral of power under s 51(xxxvii), the trading or financial corporations formed within the limits of the Commonwealth to which s 51(xx) refers will typically be constituted and organised according to the laws of a State. … [22] There is no reason to read s 51(xx) as granting 472

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Queensland Rail Case cont. 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. The course of events in the nineteenth century described in the Work Choices Case points firmly against reading the provision as so restricted. 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. Nor is there any textual or contextual reason to conclude that the Parliament should have legislative power with respect only to those entities constituted and organised under the laws of foreign states which are entities of a kind generally similar to those that existed or could be formed under foreign law as it stood in all its various forms in 1900. [23] … [W]hat 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 (184) 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, let alone definition, of what it means to say that the entity created is or is not a “corporation”. Hence the “intention” to which the Authority referred, and upon which it relied as providing the sole criterion for determining what is or is not within the legislative power of the Commonwealth, was an intention of no fixed content. 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. Section 6(2) [24] The Authority’s submissions about “intention” were closely related to, even dependent upon, s 6(2) of the QRTA Act and its provision that the Authority is not a “body corporate”. But how is s 6(2) to be construed, and what is the work that it does? [25] The Authority’s submissions treated “body corporate” (in s 6(2)) as synonymous with “corporation” (in the phrase “trading or financial corporations”). But treating the two different expressions in that way assumed rather than demonstrated that a statutorily created artificial legal entity (that is not a body politic) may be a form of right and duty bearing entity which is distinct from entities called (interchangeably) either “corporations” or “bodies corporate”. That is, the 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. [26] The assumed division of artificial legal entities that are not bodies politic between “corporations” or “bodies corporate” on the one hand, and “other artificial legal entities” on the other, cannot be made. No criteria which would differentiate between the two supposed classes of entities were identified. Neither s 6(2) itself, nor the QRTA Act more generally, supports a division of that kind. The premise for the Authority’s submissions is not established. [27] If s 6(2) does not support (or make) a division of artificial legal entities between “corporations” or “bodies corporate” and “other artificial legal entities”, what is the purpose or effect of its provision? [28] Taken as a whole, the QRTA Act makes plain that it proceeds on the footing that the Authority’s relations with its employees are not governed by the Fair Work Act 2009. It may be accepted, therefore, that one purpose of the QRTA Act was to create an entity which would provide labour to QRL in circumstances where the relations between employer and employee would be governed by State industrial (185) relations law. If s 6(2) were to be understood as intended to do no more than take the Authority outside the federal industrial relations law, by taking the Authority outside the reach of s 51(xx), it would be necessary to observe that a State Parliament cannot determine the limits of federal legislative power. More particularly, it would be necessary to observe that 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. But s 6(2) has a larger purpose than simply attaching a label designed to avoid the application of an otherwise applicable federal law. [29] Providing that the Authority “is not a body corporate” engages other Queensland statutory provisions. In particular, although the Authority is what the Government Owned Corporations Act 1993 (Qld) (the GOC Act) calls a “government entity” (s 4(b)), the Authority is not a government entity that is “established as a body corporate under an Act or the Corporations Act” [5.520]

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Queensland Rail Case cont. (s 5(a)). Because that is so, the Authority cannot be declared (s 5(b)) by regulation to be a “government owned corporation” for the purposes of the GOC Act. In addition, it may be that the provision that the Authority is not a body corporate could be said to deny the application of s 46 of the Acts Interpretation Act 1954 (Qld). Section 46 provides that a provision of an Act relating to offences punishable on indictment or summary conviction “applies to bodies corporate as well as individuals”. Whether s 6(2) of the QRTA Act does have the effect of denying the operation of s 46 of the Acts Interpretation Act need not be decided. [30] The exclusion of the application of the GOC Act by s 6(2) of the QRTA Act providing that the Authority is not a body corporate means that the provision is more than mere labelling. Section 6(2) takes its place, and is to be given its meaning and application, in the context provided by the Queensland statute book generally and the GOC Act in particular. Understood in that context, s 6(2) provides that the entity which the QRTA Act creates is one with which other provisions of Queensland law engage in a particular way. Section 6(2) is not to be understood as providing that the entity created is one of a genus of artificial legal entities distinct from what s 51(xx) refers to as “corporations”. The decided cases [31] Reference was made in argument to a number of decisions which it was suggested throw light on whether the Authority is a “corporation”. …. 187 [34] The decision in Liverpool Insurance Co (1870) 77 US 566 offers no guidance about the reach of the legislative power given by s 51(xx). It does emphasise, however, the need to examine the reasons for, and effect to be given to, a legislative declaration that a body is or is not a “body corporate” or a “corporation”. [35] Williams v Hursey (1959) 103 CLR 30 concerned the liability of an organisation of employees to damages for the tort of conspiracy and directed particular attention to whether the Waterside Workers’ Federation and its Hobart “branch” could sue or be sued. The Federation was an organisation registered under the Conciliation and Arbitration Act 1904 (Cth); the Hobart branch was not registered under that Act or the Trade Unions Act 1889 (Tas). … [36] Fullagar J, with whose reasons Dixon CJ and Kitto J agreed, made two points of present relevance. First, he said (at 52) that the Conciliation and Arbitration Act 1904 gave the Federation, as a registered organisation, “what I would not hesitate to call a corporate character – an independent existence as a legal person”. Secondly, Fullagar J said (at 52) that “[t]he notion of qualified legal capacity is intelligible, but the notion of qualified legal personality is not” (emphasis added). Hence, the section of the Conciliation and Arbitration Act 1904 which provided that every registered organisation “shall for the purposes of the Act have perpetual succession and a common seal, and may own (188) possess and deal with any real or personal property” (at 52) was, without more, “quite enough to give to a registered organisation the full character of a corporation” (at 52). Neither the particular statutory root of incorporation nor the particular capacities which the body was given were treated as determining whether it had “the full character of a corporation”. Rather, independent existence as a legal person, which is to say recognition as a right and duty bearing entity, was the determinative consideration. [37] Williams v Hursey points firmly against accepting the Authority’s submissions that corporations, or bodies corporate, form a class of statutorily created right and duty bearing entities distinct from another class of statutorily created right and duty bearing entities identified only according to whether the constituting legislation (and legislature) “intended” to create the entity concerned as a corporation. … [38] Like the Federation considered in Williams v Hursey, 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”? [39] As already noted, the Authority submitted that its activities were not such as to make it a trading corporation. In its written submissions, the Authority submitted that it dealt only with a related entity, QRL, and made no profit from those dealings, and that these “peculiar” activities did not make it a trading corporation. The Authority did not elaborate on these matters in oral argument. [40] … In 474

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Queensland Rail Case cont. 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 (189) 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. [41] The QRTA Act established the Authority as an entity having functions which included “managing railways” (s 9(1)(a)), “controlling rolling stock on railways” (s 9(1)(b)), “providing rail transport services, including passenger services” (s 9(1)(c)) and “providing services relating to rail transport services” (s 9(1)(d)). The QRTA Act provides (s 10(1)) that the Authority is to “carry out its functions as a commercial enterprise”. Provision is made (s 55) for the Authority to pay dividends to the State and, to that end, the Authority is obliged (s 56(1)(a)) to give the responsible Ministers in May each year an estimate of its profit for the financial year. Not only that, the Authority is liable (s 62) to pay to the Treasurer, for payment into the consolidated fund of the State, amounts equivalent to the amounts for which the Authority would have been liable if it had been liable to pay tax imposed under a Commonwealth Act. 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. [42] Even if the Authority is treated as now doing nothing more than supplying labour to QRL (a related entity) for the purposes of QRL providing rail services and even if, as the Authority submitted, 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. [43] 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. Gageler J: (191) Introduction [47] The anterior question [as to whether an entity is a “constitutional corporation”] in this case is whether a particular entity constituted under State legislation answers the constitutional description of a “corporation”. [48] That anterior question arises because the Queensland Rail Transit Authority Act 2013 (Qld), despite establishing “Queensland Rail” (ss 6(1), 63), conferring on it “all the powers of an individual” (s 7(1)) (specifically including to “enter into contracts”, “acquire, hold, dispose of, and deal with property”, “employ staff”, “appoint agents and attorneys”, and “engage consultants” (s 7(1)(a) – (e))), and providing that it “may sue and be sued in the name it is given” (s 7(4)), declares that it “is not a body corporate” (s 6(2)). If effective to prevent Queensland Rail answering the constitutional description of a corporation, that declaration would take Queensland Rail outside the operation of the Fair Work Act 2009 (Cth), which governs employment by constitutional corporations to the exclusion of State and Territory industrial laws. Removal of Queensland Rail from the operation of the Fair Work Act was part of the legislative design of the Queensland Rail Transit Authority Act, as is made plain by transitional and other provisions which expressly contemplate that employment by Queensland Rail would be governed by the Industrial Relations Act 1999 (Qld) (ss 69, 73, 74, 75, 76). [49] Whatever operation the statutory declaration that Queensland Rail is not a body corporate might have under other Queensland legislation, or on any rule of the common law, that statutory declaration (192) is ineffective to prevent Queensland Rail answering the constitutional description of a corporation. It answers that description because it is an entity established by law with capacity to own property, to contract and to sue. [50] Once it is concluded that Queensland Rail answers the constitutional description of a corporation, there can be no doubt that Queensland Rail also answers the constitutional description of a trading corporation. It answers that description because its statutory functions under the Queensland Rail Transit Authority Act include the provision of “rail transport services” and “services relating to rail transport services” (s 9(1)(c), (d)). Those, on any view, are substantial trading purposes. Queensland Rail also answers that description because it in fact provides [5.520]

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Queensland Rail Case cont. the services of its employees under contract to its wholly owned subsidiary, Queensland Rail Ltd. That, on any view, is a substantial trading activity. [51] Queensland Rail is therefore a constitutional corporation governed by the Fair Work Act to the exclusion, by force of s 109 of the Constitution, of Queensland industrial laws, and in particular to the exclusion of the Industrial Relations Act. Queensland Rail is a corporation [52] Professor Frederic Maitland wrote with accentuated simplicity in 1900 (“The Corporation Sole”, Law Quarterly Review, Vol 16 (1900) 335, at p 335.): “Persons are either natural or artificial. The only natural persons are men. The only artificial persons are corporations. Corporations are either aggregate or sole.” That, Maitland added, “would be an orthodox beginning for a chapter on the English Law of Persons, and such it would have been at any time since the days of Sir Edward Coke”. [53] Maitland elsewhere described a legal “person” as “a right-and-duty bearing unit” (“Moral Personality and Legal Personality”, Journal of the Society of Comparative Legislation, vol 6 (1905) 192, at p 19). Implicit in that description, often since repeated, is the traditional, essentially functional, understanding of legal “personality” as lying in the existence of legally conferred or legally recognised capacity to have or to form legal relations (Dewey, “The Historic Background of Corporate Legal Personality”, Yale Law Journal, vol 35 (1926) 655; Smith, “Legal Personality”, Yale Law Journal, vol 37 (1928) 283.). (193) Implicit also is the traditional understanding of legal personality as unitary: “[t]he notion of qualified legal capacity is intelligible, but the notion of qualified legal personality is not.” (Williams v Hursey (1959) 103 CLR 30 at 52.) To refer to an “artificial” legal person necessarily implies no more than the existence of a unit or entity, not being merely a natural person, in respect of which legal personality has been conferred or recognised. It is not to deny the existence of other units or entities created or recognised by law to have capacities other than to have or to form legal relations, such as those whose capacities are confined to the arbitral or administrative. The particular position of the “state” or the “Crown”, controversial in 1900 and incompletely theorised even today (cf Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Lam (2003) 214 CLR 1 at 24 [74]-[75],) can for present purposes be put to one side given that the Constitution, in sustaining the “Commonwealth” and the “States”, and in providing for the “government of any territory” (s 122), “goes directly to the conceptions of ordinary life” in that it “treats the Commonwealth and the States as organisations or institutions of government possessing distinct individualities” (Bank of New South Wales v The Commonwealth (1948) 76 CLR 1 at 363) and enables self-governing Territories to be treated in the same way (Capital Duplicators Pty Ltd v Australian Capital Territory (1992) 177 CLR 248 at 271-273). [54] The orthodox historical understanding that all corporations are either “corporations aggregate” (incorporated groups of co-existing natural persons) or “corporations sole” (an incorporated series of individuals) underlay the common statutory practice in Australia in the nineteenth and twentieth centuries of creating government business enterprises: by declaring the holder of a specified office (frequently a “Commissioner”) to be a “corporation sole”; by declaring the holders of a number of specified offices (frequently “Commissioners”) to be a (194) “body corporate”; or, as became over time more common, by “establishing” an entity (frequently a “Board”, an “Authority”, or a “Commission”) as a “body corporate” to “consist” of the holders of specified appointments. Not infrequently, cases came before the courts raising issues as to whether such statutory entities, although expressly so incorporated, nevertheless fell within the “shield of the Crown” so as to have immunity from suit. There was in those cases, as was noted more than once, “evidence of a strong tendency to regard a statutory corporation formed to carry on public functions as distinct from the Crown unless parliament has by express provision given it the character of a servant of the Crown” (Launceston Corporation v Hydro-Electric Commission (1959) 100 CLR 654 at 662). [55] The orthodox historical understanding that all corporations are either corporations aggregate or corporations sole underlay the observation of Quick and Garran in 1901, with reference to the words “the incorporation of banks” in s 51(xiii) of the Constitution, that “[a]n Act of Incorporation is an Act creating an artificial or fictitious person, the peculiarity of which is that it has a legal existence separate and distinct from the individual units of which it is composed” (The Annotated Constitution of the Australian Commonwealth (1901), p 578.). The same understanding also underlay the scepticism 476

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Queensland Rail Case cont. Griffith CJ displayed as late as 1914 when, after noting that Commonwealth legislation established the Commonwealth Bank as a body corporate without corporators, he chose to “pass by the question whether in the nature of things it is competent for the Commonwealth Parliament to declare that such an abstraction disassociated from any material persons shall be regarded as a corporation” (Heiner v Scott (1914) 19 CLR 381 at 393.) [56] The question having been so left, Dixon J later took the opportunity to say that he saw “no reason to doubt” the power of the Commonwealth Parliament “for a purpose within its competence, to create a juristic person without identifying an individual or a group of natural persons with it, as the living constituent or constituents of the corporation” (Bank of New South Wales v The Commonwealth (1948) 76 CLR 1 at 361. His Honour continued (at 361)): (195) 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, that is, except in so far as a given subject matter may be defined in terms of existing legal conceptions, as perhaps in some respects may be the case in, for example, paras (ii), (xii), (xiv), (xvii), (xviii), (xxiv) and (xxv) of s 51. [57] His Honour’s omission of s 51(xx) from that list of examples of Commonwealth legislative powers unconfined by customary legal concepts or devices can be taken to have been deliberate. The power of the Commonwealth Parliament to make laws with respect to “foreign corporations” (entities on which legal personality has been conferred or recognised under other legal systems), to say nothing of its power to make laws with respect to “trading or financial corporations”, would from its inception have been deprived of much of its potential scope and utility were those references to “corporations” confined to categories of corporations known domestically in 1900. … (196) [60] … Whilst “it is impossible to distil any conclusion about what the framers intended should be the meaning or the ambit of operation of s 51(xx) from what was said in debate about the power, or from the drafting history” (Work Choices Case (2006) 229 CLR 1 at 97 [119]), were s 51(xx)’s reference to “trading or financial corporations formed within the limits of the Commonwealth” (as ultimately formulated in the wake of the widespread corporate collapses of the 1890s) to have omitted such quasi incorporated companies would have been a somewhat surprising oversight. …(198). [62] There can be no doubt that it is open to any Australian legislature, as it may be open to the legislature of the United Kingdom or of any other foreign power, to “provide for the creation of a body which, as distinct from the natural persons composing it, has legal personality, whether or not the legislature chooses to identify its creature by the term ‘corporation’” (Re McJannet; Ex parte Minister for Employment, Training and Industrial Relations (Qld) (1995) 184 CLR 620 at 664). There can equally be no doubt that the description which that legislature chooses to give to the body it so creates cannot determine the character of that body for the purpose of s 51(xx) of the Constitution. [63] In words which derive from those of Marshall CJ in McCulloch v Maryland (95), and which have come so often to be repeated that their full significance may be overlooked, O’Connor J said in Jumbunna Coal Mine NL v Victorian Coal Miners’ Association ((1908) 6 CLR 309 at 367-368) 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” and continued: “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 … 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.” [64] Murphy J embraced that fundamental tenet of constitutional construction when he said in Adamson’s Case (at 238-239): “In s 51(xx) of the Constitution, the word, corporations, is not used in any narrow sense. For example, foreign corporations may include syndicates or joint ventures, common in European and other legal systems whose law of incorporation is based on principles different from those of Australian States and England. A corporation is an entity with status as an artificial person; this involves it having its own capacities rights and liabilities which are distinct from [5.520]

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Queensland Rail Case cont. those of its members (if it has any members).” [65] The term “corporations” is, and was in 1900, readily capable of encompassing all artificial legal persons; that is to say, all entities, not (199) being merely natural persons, invested by law with capacity for legal relations. There is nothing in the context or in the rest of the Constitution to indicate that any narrower interpretation would best carry out the object and purpose of the conferral by s 51(xx) of a national legislative power with respect to both foreign corporations and trading or financial corporations formed within the limits of the Commonwealth. The constitutional context, both structural and historical, points in favour of the application of the broad orthodox historical meaning. [66] The constitutional reference to foreign corporations encompasses all artificial entities invested with legal personality under other systems of law. The constitutional reference to corporations formed within the limits of the Commonwealth encompasses all artificial entities invested with legal personality under Australian law. [67] Queensland Rail has legal personality because it is legislatively conferred with capacity to own property, to contract and to sue. It is unnecessary to consider whether any lesser subset of those attributes might suffice. The statutory declaration that Queensland Rail is not a body corporate does not deprive Queensland Rail of any of those attributes. Queensland Rail is a trading corporation [68] The word “trading” is one descriptor of the class of Australian corporations with respect to which s 51(xx) confers power on the Commonwealth Parliament to make laws. Not being a term of art, but being instead an adjectival form of the noun “trade”, “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. [69] Immediately after referring to a corporation as “an entity with status as an artificial person”, Murphy J in Adamson’s Case went on to state that “[t]he constitutional description of trading corporations includes those bodies incorporated for the purpose of trading; and also those corporations which trade” (at 239). 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. (200) [70] 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 introduce as a substitute an inquiry into a corporation’s “true character”, to be evaluated by reference to that corporation’s “characteristic activity”. [71] In terms of principle, Victoria’s submission runs counter to the standard approach to constitutional construction that a subject matter of Commonwealth legislative power need not be reduced to a single or predominant characterisation. It is enough, for example, that the subject matter of a law with respect to “lighthouses”, made under s 51(vii), be either something designed for use as a lighthouse or something in fact used as a lighthouse; it is not necessary to go on to attribute to that thing the “true character” of a lighthouse. [72] In terms of authority, Victoria’s submission does not explain the outcome in Fencott v Muller (in which the company held to be a trading or financial corporation had not engaged in any activity at all), and is inconsistent with the rejection of a need to focus on a corporation’s predominant or characteristic activity in the reasoning of a majority of this Court in each of Adamson’s Case, State Superannuation Board v Trade Practices Commission and the Tasmanian Dam Case. [73] Looking to its statutory functions, and irrespective of its activities (if any) from time to time, it is sufficient to conclude that Queensland Rail 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 Queensland Rail is statutorily obliged to carry out its statutory functions as a commercial enterprise (103), a profit-making objective is not essential to trade (104). 478

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Queensland Rail Case cont. [74] Looking alternatively to its current activities, and independently of any consideration of its statutory functions, it is sufficient to conclude that Queensland Rail answers the constitutional description of a trading corporation (201) that Queensland Rail in fact provides the services of its employees under contract to Queensland Rail Ltd. It is not to the point that Queensland Rail Ltd is its only customer. Nor is it to the point that Queensland Rail Ltd is its wholly owned subsidiary. Nor is it to the point that the services are supplied only on a cost recovery basis.

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1.

2.

Notes&Questions

Did the plurality’s refusal to decide precisely that “the current activities” test alone applied to determine the case cast in doubt the exclusive applicability of that test when the entity in question is actually engaging in activities? It stated that “no matter” whether the issue is determined by reference to the constitution and purposes of the Authority or its current activities, or a combination of both, it was still a “trading corporation.” Does that mean that, given the Authority was actually operating, that attention could have been given alone to its constitution and purposes to resolve the issue? While that would have been the case had the Authority not commenced operation, does this statement suggest some backtracking on the exclusive operation of the current activities test when a corporation has commenced operating? This apparent ambiguity as to whether the current activities test applies exclusive to operating entities and the purpose test exclusively to those which do not yet operate appears also in Gageler J’s reasoning. Is it indeed an ambiguity, or are the relevant statements in this regard applicable to the particular circumstances of the establishment of the Authority in this case? Perhaps this may need clarification in the future. If the ambiguity was not intended, why was the case simply not decided by the application of the current activities test given that the Authority was indeed engaging in relevant activities? On the issue of what constitutes a corporation for the purposes of s 51(xx), it is clear that a liberal approach is being taken. When it comes to foreign corporations, it is enough that the entity in question be endowed with artificial legal personality under the (foreign) laws pursuant to which it was established. As to entities incorporated in Australia, certainly the discrimen is not what constituted a corporation in 1900, nor how the entity is labelled, whether by statute or otherwise. This reinforces an approach by which, while relevant to consider the meaning of the constitutional text in 1900, the High Court is not adopting a purely “originalist” approach to constitutional interpretation. This is consistent with the approach taken in Cole v Whitfield where reference was made to the Convention Debates to assist in the interpretation of the ambiguous words in s 92 “shall be absolutely free”. Moreover, this liberal approach enables the reach of Commonwealth legislation over a wide range of entities which have artificial legal personality.

Incorporation [5.540] Australia’s business and political leaders had long perceived the advantages of

uniform companies legislation, but had been unable to agree whether it should take the form of identical legislation in all States and Territories or national legislation enacted by the Commonwealth: see R McQueen, “Why High Court Judges Make Poor Historians: The Corporations Act Case and Early Attempts to Establish a National System of Company Regulation in Australia” (1990) 19 Federal Law Review 245. The former was effectively achieved in 1961–1962, but the Commonwealth decided to pursue the latter path in its [5.540]

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Corporations Act 1989 (Cth). One barrier to national (Commonwealth) legislation had been uncertainty as to whether s 51(xx) extended to the incorporation of trading and financial corporations, considered an essential component of effective national companies legislation. The High Court finally resolved this question in the negative (by a majority of 6:1) in New South Wales v Commonwealth (1990) 169 CLR 482, necessitating a reversion to the co-operative model, pursuant to which all States and Territories adopted the Corporations Law contained in the Corporations Act 1989 (Cth), s 82. Following Re Wakim; Ex parte McNally (1999) 198 CLR 511, the States referred power to the Commonwealth pursuant to s 51(xxxvii) of the Constitution, enabling the Commonwealth to provide for the incorporation of corporations (not confined to trading and financial corporations): see Corporations Act 2001 (Cth), ss 112, 119.

Incorporation Case [5.550] New South Wales v Commonwealth (the Incorporation Case) (1990) 169 CLR 482. Mason CJ, Brennan, Dawson, Toohey, Gaudron and McHugh JJ: 496 The Corporations Act is based upon the assumption that the Commonwealth has power to legislate for the incorporation of a company if the subscribers to the memorandum of association intend that trading or financial activities are to be a substantial part of its activities. The Act also assumes that the Commonwealth can prohibit the incorporation of a company under the law of a State or Territory if the body upon incorporation will be a trading or financial corporation. Part 2.2 of the Act provides for the registration of companies. Division 1 (ss 114 – 125) of Pt 2.2 deals with incorporation by registration. [The majority then set out the process of registration involving the Australian Securities Commission.] … A company registered under Div 1 is to be capable of performing all the functions of a body corporate and of suing or being sued and is to have perpetual succession, a common seal and the power to acquire, hold and dispose of property: s 123(2). Division 6 (ss 153 – 155) of Pt 2.2 of the Act deals with activities statements. The lodging of an activities statement is a prerequisite to the registration of a Division 1 company: s 153(1). The statement may state to the effect that the subscribers intend the proposed company to be dormant throughout a substantial period beginning at its incorporation: s 153(2). The statement, whether or not it states that the company is to be dormant, must state one or other of three alternatives: s 153(1)(e). The first is that the subscribers intend that, within three months after the date of incorporation or the period of dormancy, trading activities will be the whole or a substantial part of the company’s activities: s 153(3). Trading activities are defined to include financial activities but not banking: s 9. The second alternative is that the subscribers intend that, within the same period, the company will carry on as its sole or principal business the business of banking (other than State banking not extending beyond the limits of the State concerned): s 153(4). The third alternative is that the subscribers intend that, 497 within twenty-one days after the proposed company’s incorporation or within the period of dormancy, persons other than the subscribers will be members of the company and have interests in it that together constitute a controlling interest in it: s 153(5). The Act goes on to provide for the lodging of activities statements annually and for the winding-up of any company which ceases to be either a trading or banking corporation, or for the cancellation of its registration which results in its dissolution: ss 156, 158. A trading corporation is defined to include a financial corporation: s 9. … The Commonwealth contention is that the words “formed within the limits of the Commonwealth” [in s 51(xx)] 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 498 within the other limb, a corporation must be a foreign corporation, 480

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Incorporation Case cont. 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”: R v Public Vehicles Licensing Appeal Tribunal (Tas); Ex parte Australian National Airways Pty Ltd (1964) 113 CLR 207 at 225. 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. [The majority examined the precedents and continued:] 501 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, 255–256, 304; Insurance Commissioner v Associated Dominions Assurance Society Pty Ltd (1953) 89 CLR 78 at 86. But cf Kathleen Investments (Aust) Ltd v Australian Atomic Energy Commission (1977) 139 CLR 117 at 159. In Bank of NSW v Commonwealth (1948) 76 CLR at 202, Latham CJ said of s 51(xx): The one thing that is clear about it is that the provision assumes the existence of corporations either under foreign law or under some law which is in force in the Commonwealth. Moreover, the history of s 51(xx) confirms that the language of the paragraph was not directed towards the subject of incorporation. The successive drafts of s 51(xx) [during the Convention Debates] before it reached the form in which it appears in the Constitution confirm that that paragraph is concerned with existing corporations and was not intended to confer power to legislate for their creation… There is thus no ground for thinking that s 51(xx) was framed with the intention of conferring upon the Commonwealth the power to provide for the incorporation of companies. Indeed, the history of the paragraph plainly indicates that the draftsmen of the provision did not contemplate that it should confer any power otherwise than in respect of corporations already formed. Contemporary opinion, which was reflected in the decision in Huddart Parker, is to be seen in the following passage from Quick and 503 Garran, Annotated Constitution of the Australian Commonwealth (1901), where the authors say at p 607: It would therefore seem that this provision refers to companies created under State laws. Such bodies, once launched, will come within the control of Federal legislation. Under this power it would probably be competent for Parliament to convert a corporation created by State authority into a Federal corporation; to enlarge the scope of its operations and business; to confer on a local corporation certain powers which would be beyond the jurisdiction of the States Governments to grant. The scheme of the Corporations Act is based upon an apparent acceptance of the view that the character of a company as a trading or financial corporation is to be determined by the nature of its activities, either actual or intended. It … may be observed that the limitation imposed upon the reach of s 51(xx) by the requirement that, in the case of domestic corporations, they be of a trading or financial character, would create undeniable difficulties if that paragraph were to be construed as [5.550]

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Incorporation Case cont. extending to the incorporation of companies. The fact that the character of a corporation may vary, so that it may be at one time a trading or financial corporation and not at another, makes it less likely at least that s 51(xx) was intended to confer power upon the Commonwealth to incorporate companies over which its power of regulation might fluctuate, possibly without knowledge upon either side. The complexity of the Act in attempting to cope with that difficulty demonstrates the problem which stems from construing s 51(xx) so as to include a power to legislate for the creation of corporations within the confines otherwise imposed by that paragraph. But it is sufficient for our purposes to observe that such a construction is supported by neither the language of the provision, nor its history nor authority. Deane J (dissenting): 504 The answer to that question [at issue] must, of course, be found in the words of the Constitution. It is those words – and those words alone – which constitute the compact made between the people of this country when, by referenda, they authorized the formal enactment of – or, in the case of the people of Western Australia, the proclamation of adherence to – the terms upon which they “agreed to unite in one indissoluble Federal Commonwealth”. If the words of s 51(xx), construed in context in accordance with settled principle, extend to authorize the making of such laws, it is simply not to the point that some one or more of the changing participants in Convention Committees or Debates or some parliamentarian, civil servant or draftsman on another side of the world intended or understood that the words of the national compact would bear some different or narrower meaning. Nor is it to the point that to construe the words of s 51(xx) as extending to authorize the making of such laws would have the result that there is an added degree of overlapping between the grant of power contained in that paragraph and the grants contained in other paragraphs of s 51. It is well settled that the plenary grants of legislative powers which are contained in the first thirty-five paragraphs of s 51 are not to be constricted by ill-conceived attempts to prevent or confine overlapping between them. … In the context of s 51(xx), the word “foreign” and the phrase “formed within the limits of the Commonwealth” should, in my view, be construed as comprehensive alternatives. So construed, a “foreign” corporation is, for the purposes of the paragraph, one that is “formed” outside the limits of the Commonwealth. The restrictive words “trading or financial” apply only to local corporations. The legislative power which s 51(xx) confers with respect to foreign corporations is internally confined only by the requirement of the introductory words that laws made be “for the peace, order, and good government of the Commonwealth”. It was contended in argument that par (xx)’s grant of legislative power with respect to foreign corporations could not extend to the making of a law governing the incorporation of foreign corporations. I do not accept that contention. Incorporation means 505 the acquisition or conferral of corporate personality under the law. A plenary legislative power “with respect to” particular kinds of corporation extends, as a matter of mere language, to laws dealing with both the incorporation and the liquidation of such corporations just as a plenary legislative power with respect to “copyrights”, “patents”, “designs” or “trade marks” extends to laws dealing with the creation and extinguishment of those particular kinds of industrial property. It is true that it has often been said that comity among nations requires some local recognition of foreign corporations. Nonetheless, the circumstances in which, the extent to which and the procedures by which corporate personality is to be accorded under our system of law to foreign corporations are patently matters for our local law … That being so, it appears to me to be plain that par (xx)’s grant of legislative power with respect to foreign corporations cannot properly be confined to exclude the power to make laws defining the circumstances and establishing the procedures under and by which artificial entities invested with corporate personality under other systems of law may acquire or enjoy such personality under the law of this country. At least in that sense, a law providing for the local incorporation of “foreign corporations” is a law within the grant of power with respect to such corporations. The argument that par (xx)’s grant of legislative power [does not extend to incorporation] … “focussed” upon the word “formed”. The legislative power could not, so it was said, extend to authorize laws governing the formation of such corporations since, until they are formed, they do not exist as the subject-matter of the power. Any superficial appeal of that argument does not, in my view, survive close examination. One objection to it is that it fails to distinguish between the abstract 482

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Incorporation Case cont. subject-matter of the legislative power and concrete instances of that subject-matter. One might as well say that a legislative power with respect to locally manufactured motor vehicles would not extend to laws governing the local manufacture of motor vehicles or that the legislative power with respect to lighthouses does not 506 extend to laws governing the erection of lighthouses since, until it is manufactured locally or erected, neither the locally manufactured motor vehicle nor the lighthouse exists as such. Another objection is that the argument fails to accord proper scope to the words “with respect to” in s 51 or to the settled principle which requires that par (xx), which is a constitutional grant of plenary legislative power, be liberally, and not narrowly or technically, construed: “it should be construed with all the generality which the words used admit” (per Dixon CJ, Kitto, Taylor, Menzies, Windeyer and Owen JJ, R v Public Vehicles Licensing Appeal Tribunal (Tas); Ex parte Australian National Airways Pty Ltd (1964) 113 CLR 207 at 225). In that regard, it is important to note that the basis of the argument is a reading of the word “formed” as meaning “which have already been formed at the time of application of the relevant law”. That constrictive interpretation of the word seems to me to be quite unjustified. In the context of the use of the phrase “formed within the limits of the Commonwealth” in contradistinction to “foreign”, the word “formed” is properly to be understood as representing a use of the past participle as part of an adjectival phrase which is without temporal significance … When the word “formed” is so understood, it affords no basis for excluding the formation or incorporation within the limits of the Commonwealth of trading and financial corporations from the scope of the legislative power granted by the second limb of par (xx). To the contrary, it tends to focus attention upon that aspect of the grant of power. The other main argument in support of the exclusion of incorporation from the ambit of the legislative power was based on the suggested authority of Huddart, Parker & Co Pty Ltd v Moorehead (1909) 8 CLR 330, disinterred and selectively dissected for the occasion. In that case, the Court (Griffith CJ, Barton, O’Connor and Higgins JJ, Isaacs J dissenting) held that the provisions of ss 5 and 8 of the Australian Industries Preservation Act 1906 (Cth) were ultra vires the Parliament. The basis of that decision was their Honours’ conclusion that the grant of legislative power in s 51(xx) 507 with respect to trading or financial corporations should be narrowly construed as excluding any general legislative power to regulate or control the actual conduct and activities of such corporations (see, in particular, per Griffith CJ (at 352–354); per Barton J (at 364–366); per O’Connor J (at 371–374); per Higgins J (at 413–414)). That narrow construction of s 51(xx) and the actual decision in Huddart Parker were disapproved and authoritatively discarded by the Court in Strickland v Rocla Concrete Pipes Ltd (1971) 124 CLR 468. As was pointed out in Strickland (1971) 124 CLR at 485 (per Barwick CJ), the judgments of Griffith CJ, Barton J and O’Connor J were all permeated by the doctrine of the reserved powers of the States which was “exploded and unambiguously rejected” in the Engineers’ Case (1920) 28 CLR 129. The judgment of Higgins J expressed a much less general, but nonetheless unacceptable, reserved powers doctrine. … 509 In these circumstances, what was said about incorporation in the majority judgments in Huddart Parker cannot properly be divorced from the reasoning which permeated them. The attempt to restore partial validity to those judgments must be rejected. The dissenting judgment of Isaacs J in Huddart Parker was not affected by acceptance of a formal reserved powers doctrine. Nonetheless, his Honour reached the conclusion that the “creation of corporations and their consequent investiture with powers and capacities was left entirely to the States.” (at 394) Nor, in his Honour’s view, did the second limb of par (xx) confer legislative power with respect to the objects, powers, capital, internal administration or liquidation of the corporations to which it refers. All that par (xx) conferred was legislative power with respect to the external dealings of such corporations with other persons. In his Honour’s words (at 395): The power does not look behind the charter, or concern itself with purely internal management, or mere personal preparation to act; it views the beings upon which it is to operate in their relations to outsiders, or, in other words, in the actual exercise of their corporate powers, and entrusts to the Commonwealth Parliament the regulation of the conduct of the corporations in their transactions with or as affecting the public (his Honour’s emphasis). In other words, par (xx)’s grant of legislative power with respect to local trading or financial corporations does not extend to laws dealing with them as such, that is to say, with their existence, [5.550]

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Incorporation Case cont. their essential features or their internal management as distinct from laws dealing with their external “conduct … in relation to outside persons” (at 396). A careful examination of Isaacs J’s judgment discloses no acceptable reason for such a strangely distorted construction of the words of the second limb of the paragraph. Isaacs J’s view that the Parliament’s legislative power with respect to local trading or financial corporations did not extend to laws dealing with the internal procedures or management of such corporations clearly influenced his conclusion that incorporation was beyond the reach of par (xx). “[F]ederal incorporation”, his Honour wrote (at 393–394), “necessarily includes a granting of all capacities and the enactment of all ancillary provisions for internal procedure, even though these matters would otherwise be exclusively within State jurisdiction”. While Isaacs J’s conclusion that laws with 510 respect to the internal management of local trading or financial corporations were beyond the ambit of a power to make laws with respect to such corporations was largely left as a matter of assertion, he did advance a number of related reasons for construing par (xx)’s grant of power as not extending to incorporation. In particular, his Honour was influenced by the presence of the word “formed” in the paragraph and the consideration that a corporation is, by its nature, a legal conception existing only in contemplation of law. I have already expressed my reasons for rejecting the argument that the word “formed” should be construed as confining the reach of the legislative power to corporations which are already in existence at the time of application of the relevant law. The fact that the local trading or financial corporations to which par (xx) refers are legal conceptions which are created by, and exist only in the contemplation of, law seems to me to support an expansive rather than a restrictive construction of a legislative power conferred “with respect to” such corporations. His Honour asserted (at 393) that when “a power to create corporations … was intended to be given it was expressly mentioned”, referring to the “Banking” power (par (xiii)). This assertion seems to me, with respect, to be little different from the fallacious view that the plenary grants of legislative power contained in s 51 should be read down so as to prevent overlapping and produce complete consistency between them. It is, in any event, simply wrong. Many of the grants of legislative power in s 51 include power to create corporations notwithstanding that incorporation is not “expressly mentioned”. Thus, it has been held that the very first of those grants (ie with respect to interstate trade and commerce), which contains no mention of either corporations or incorporation, confers legislative power to create a corporation (see Australian National Airways Pty Ltd v Commonwealth (1945) 71 CLR 29; Strickland (1971) 124 CLR at 488). Isaacs J’s judgment in Huddart Parker was that of a sole dissentient. His Honour’s artificially restricted construction of par (xx) as relating only to the conduct of corporations in their transactions with or as affecting the public has not been indorsed by any of the judgments in Strickland or subsequent cases. In my view, it is mistaken. To deny that laws dealing with the capacities, the capital, the internal management or the liquidation of local trading or financial corporations fall within the scope of a legislative power with respect to such corporations seems to me to involve a denial that the words of the constitutional grant of legislative power mean 511 what they say. Once that conclusion is reached, Isaacs J’s judgment offers no acceptable support for a conclusion that the legislative power conferred by par (xx) does not extend to incorporation. To the contrary, much of his Honour’s judgment is concerned with demonstrating the impracticability of separating legislative powers with respect to the powers, internal management and liquidation of corporations from a legislative power with respect to incorporation. Reference should be made to two subsidiary arguments advanced in favour of the view that laws dealing with incorporation were beyond the ambit of par (xx). The first can be shortly disposed of. It was to the effect that that view is supported by what was said in the course of the Convention Debates and by contemporary commentators (see, in particular, Quick and Garran, Annotated Constitution of the Australian Commonwealth, (1901), p 607 §198; but cf Sir Robert Garran, “Memoranda on Constitutional Questions”, in Commonwealth Parliamentary Papers (1934–1937) Vol II, p 73). The first answer to that argument is that the few brief references in the Convention Debates are far from compelling (see, eg, Convention Debates (Adelaide 1897) Vol III, p 439) and one can point to contrary statements in early authority (see W Harrison Moore, Constitution of the Commonwealth of Australia 484

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Incorporation Case cont. (1902), p 148). The second answer is a more fundamental one. Reference was made to it at the commencement of this judgment. It is that 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 (see Breavington v Godleman (1988) 169 CLR 41 at 131–133). The second subsidiary argument was, as I followed it, essentially an appeal to convenience. It was said that the words “trading or financial” in par (xx) significantly restrict the corporations to which the grant of legislative power extended. That being so, it would be productive of difficulty and inconvenience to construe par (xx) as conferring a legislative power with respect to the incorporation of those corporations only. One answer to this argument is that it assumes an unduly restrictive connotation of the phrase “trading or financial corporations” in par (xx). As the judgment of a majority of the Court in Fencott v Muller (1983) 152 CLR 570 at 601–602, makes plain, that composite phrase is not to be narrowly or technically construed. Indeed, reference to writings current at the time of Federation lends strong support for the view that the phrase “trading or financial 512 corporations” in par (xx) should be construed as being adequate to encompass companies formed for the purpose or engaged in the pursuit of profit as distinct from the special classes of company which were seen as falling outside the scope of ordinary company law (see, eg, Lindley, Treatise on the Law of Companies, 5th ed (1889), p 10: “Companies formed for merely scientific, literary, artistic, or charitable purposes, and not with any view to the acquisition of gain or the avoidance of loss by themselves or their members do not fall within the scope of this treatise …”). So understood, the exclusion from the scope of the legislative power of the special classes of corporation which are not, for relevant purposes, trading or financial corporations does not seriously impair the competence of the national Parliament to do that which Professor Harrison Moore saw (p 148), in 1902, as being “of course” authorized by par (xx), namely, “to make a Companies Law for the whole of the Commonwealth”. In any event, there is a more complete answer to the argument of inconvenience based on the consideration that the grant of legislative power with respect to local trading or financial corporations does not extend to all corporations. It is that, while that consideration might well be seen by the Parliament as calling for restraint in the exercise of the legislative power, it does not provide any legal justification for denying the generality of a plenary grant of legislative power with respect to the designated class of corporation. If even further answer to an argument based upon the alleged inconvenience of uniform companies legislation in relation to trading and financial corporations be needed, it is plain enough. It is that the advantages of such national companies legislation with respect to such corporations seem to me overwhelmingly to outweigh the alleged inconvenience. It follows from what has been said above that I am of the view that the legislative power which the second limb of par (xx) confers upon the Parliament with respect to local trading or financial corporations extends to authorize the making of laws governing the formation or incorporation of such corporations. That is the effect of the words of the Constitution when they are construed in accordance with the principles applicable to the construction of a plenary grant of legislative power. The argument to the contrary propounds an unacceptably narrow and technical construction of those words and attracts the criticism expressed by Dixon J in Australian National Airways Case (1945) 71 CLR at 81: It plainly ignores the fact that it is a Constitution we are 513 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. … It is only by importing a limitation into the descriptive words of the power that such a law can be excluded. Dixon J’s above comments were made in rejecting an argument that the legislative power with respect to interstate trade and commerce, which contains no mention at all of corporations or incorporation, did not authorize the making of a law creating a corporation to conduct a transport service for interstate trade. They are applicable a fortiori to the argument that the express grant of legislative power with respect to trading or financial corporations formed within the limits of the Commonwealth [5.550]

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Incorporation Case cont. does not encompass the making of a law with respect to the formation within the limits of the Commonwealth of such corporations.

[5.560]

Notes&Questions

1.

For a good discussion of the Incorporation Case, see G Kennett, “Constitutional Interpretation in the Corporations Case” (1990) 19 Federal Law Review 223. Deane J’s lighthouse analogy is criticised by D Rose, “Judicial Reasonings and Responsibilities in Constitutional Cases” (1994) 20 Monash University Law Review 195 at 197. But Deane J’s judgment is a powerful display of the technique of constitutional argument.

2.

The case provides a good example of the considerations employed in constitutional interpretation: the constitutional text, the intention of the constitutional framers, precedent and policy: see Kennett (1990) at 227ff. Section 51(xx) is undoubtedly ambiguous, and Deane J was correct to question the reasoning of all the justices in Huddart, Parker v Moorehead, including Isaacs J, who dissented. Moreover, the majority justices were surely unwarranted in assuming that the relatively clear intention of the 1891 Convention not to include incorporation was maintained at the 1897–1898 Convention, which adopted very different language (at 502). As Professors Stellios and Zines have remarked, “[t]he history is as ambiguous as the phraseology” (Zines, 6th ed, 2015), p 130.

3.

Although the majority did not expressly invoke policy considerations, they did allude to some of the practical difficulties which would arise if s 51(xx) included power to incorporate (at 503). Their significance was supposedly merely to provide corroborating evidence of the framers’ intention not to include incorporation in the power, but Professor Zines may well be correct in suggesting that “these functional considerations based on an efficient distribution of powers are more convincing in relation to the decision in this case than the arguments relied on by the majority of the court” (Stellios, Zines, 6th ed, 2015, p 131). For a discussion of the practical difficulties, see Kennett (1990) at 227–230. A further possible practical difficulty may have lain in the legal capacity conferred upon companies incorporated under the Corporations Act 1989 (Cth). Unless the company’s constitution expressly provided otherwise (s 162), a company registered under the Act had “the legal capacity of a natural person” (s 161(1)). But would s 51(xx) authorise the Commonwealth Parliament to empower a trading corporation to engage in non-trading activities? (A “trading corporation” can, of course, engage in non-trading activities while remaining a trading corporation, provided that its trading activities remain a substantial proportion of its overall activities.) Moreover, if the Commonwealth could incorporate corporations under s 51(xx) it could empower them to undertake activities that it could not authorise the Commonwealth Government to undertake (such as purely intrastate trade: see the Western Australian Airlines Case (1976) 138 CLR 492), unless it operated through a trading corporation? This would be anomalous.

4.

486

In R v Hughes (2000) 202 CLR 535 at 562 [58], Kirby J remarked of the Incorporation Case: [5.560]

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This narrow decision of the Court will, in my opinion, one day need to be revisited (cf Byrnes (1999) 199 CLR 1 at 35). A factual consequence has been the grotesque complications that exist in the regulation of corporations under Australian law illustrated in Byrnes, Bond ((2000) 201 CLR 213) and now this case.

But note that these remarks preceded the enactment of the Corporations Act 2001 (Cth) which relied to some extent on legislative power referred by the States pursuant to s 51(xxxvii) of the Constitution: see ss 3 and 4 of the Act. Internal Management [5.570] To what extent does s 51(xx) authorise the regulation of the internal management or

affairs of a trading, financial or foreign corporation. Since the corporation’s internal constitution is established at the time of incorporation, commentators have considered that, at least as a practical matter, the corporation’s internal management should be regulated by the authority empowered to incorporate it. Hence it is not surprising that the justices who have held that s 51(xx) authorises incorporation also consider that the power extends to regulation of the corporation’s internal management: see Murphy J in Actors Equity (150 CLR at 212) and Tasmanian Dam (158 CLR at 179); Deane J in the Incorporation Case (169 CLR at 510–511), all extracted above. Professors Zines and Stellios (Zines, (6th ed, 2015), pp 131-132) note that a larger area of control of corporations, including internal management, results from the broader interpretation adopted in the Work Choices Case, referring in particular to the passage of Gaudron J approved in the joint judgment at [178] where reference was made to the “relationships” of a corporation the conduct of those through whom it acts, employees, shareholders and those whose conduct “is or is capable of affecting the activities, functions, relationships or business.” “This would seem broad enough to include within the centre of power matters of internal management such as voting rights, insider trading, duties of directors, the functions of the board, shareholders meetings, and so on. The general approach of the Court would, therefore, seem to accommodate laws relating to internal management of the type found in the Corporations Act 2001 (Cth).” Dissolution [5.580] In his dissenting judgment in the Incorporation Case, Deane J considered (obiter) that

s 51(xx) authorised “the liquidation of local trading or financial corporations” (at 510–511), but the Court as a whole has never addressed this issue. Here again, but surely more tenuously, a link has been seen with incorporation, Professors Zines and Stellios remarking that “it would seem a startling result from the point of view of the structuring of our governmental system to give a State sole power to create a corporation and the Commonwealth the power to destroy it” (Zines, (6th ed, 2015), p 132). However, with the utmost respect, it is difficult to see what is startling about that proposition. Deane J is surely correct, in regard both to internal management and liquidation, that to deny the power “involve[s] a denial that the words of the constitutional grant of legislative power mean what they say”: at 510–511. In any event, the Commonwealth could probably regulate the liquidation of corporations – any corporations, not merely those mentioned in s 51(xx) – on the ground of bankruptcy or insolvency pursuant to s 51(xvii) of the Constitution: see Victoria v Commonwealth (the Second Uniform Tax Case) (1957) 99 CLR 575 at 612 per Dixon CJ. (Kitto J concurred with Dixon CJ, but Williams J expressed a contrary opinion at 630.)

[5.580]

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Incidental power [5.590] The operation of incidental powers in relation to s 51(xx) has arisen in two contexts:

the power to regulate individuals (or bodies other than s 51(xx) corporations) who are implicated in the activities of a s 51(xx) corporation, and the power to regulate the holding company of a s 51(xx) corporation. Accessories [5.600] In Fencott v Muller (1983) 152 CLR 570, the High Court unanimously upheld

Commonwealth legislation which imposed civil liability upon persons aiding, abetting, counselling or procuring contravention of the legislation by a s 51(xx) corporation.

Fencott v Muller [5.610] Fencott v Muller (1983) 152 CLR 570. [This part of the case concerned the validity of the Trade Practices Act 1974 (Cth), s 82(1).] Mason, Murphy, Brennan and Deane JJ: 598 Section 82 confers on a person who suffers loss or damage by the conduct of a corporation that is done in contravention of a provision of Pt IV or V of the Act a right to recover the amount of the loss or damage by action against the corporation “or against any person involved in the contravention”. The quoted phrase, and s 75B which provides its dictionary, were inserted by the Trade Practices Amendment Act 1977 (Cth) (No 81 of 1977). Section 75B provides: A reference in this Part to a person involved in a contravention of a provision of Part IV or V shall be read as a reference to a person who – (a) has aided, abetted, counselled or procured the contravention; (b) has induced, whether by threats or promises or otherwise, the contravention; (c) has been in any way, directly or indirectly, knowingly concerned in, or party to, the contravention; or (d) has conspired with others to effect the contravention. … 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 599 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 regulation. 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 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. … As a means of securing obedience to a statutory command, there is no material distinction between a 488

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Fencott v Muller cont. provision imposing a criminal liability and a provision imposing a liability in civil proceedings, unless it be that the latter provision encourages private action for the recovery of whatever damages an applicant may prove irrespective of the degree of culpability of the particular respondent, and thus a provision imposing liability in civil proceedings may be a more draconian means of securing obedience to the statutory command. But that is no objection to its validity. It is, of course, within the power of the Commonwealth Parliament to give to a person injured by contravention of a federal law a right of action when injury is suffered as a 600 result of the contravention (per Menzies J in Redfern v Dunlop Rubber Australia Ltd (1964) 110 CLR 194 at 222). As a valid ancillary provision imposing civil liability upon a party for injury occasioned by contravention of a command directed to another must be reasonably adapted to secure obedience to the command, the ancillary provision must impose liability for injury in respect of conduct of a kind which might reasonably be thought to facilitate the contravention which occasions the injury. The conduct of a person “involved in a contravention” described in each of the categories of s 75B shows a direct connexion between that conduct and the contravention in question. Accordingly, the imposition of civil liability by s 82 is valid. [Gibbs CJ, Wilson and Dawson JJ reached the same conclusion for similar reasons.]

Holding and subsidiary companies [5.620] The Commonwealth Parliament has frequently sought to extend the ambit of

legislation enacted under s 51(xx) by including within its reach the holding company or a subsidiary corporation of corporations mentioned in s 51(xx). See, eg, the Trade Practices Act 1974 (Cth), s 4(1) (holding company); the Motor Vehicle Standards Act 1989 (Cth), s 5(1) (subsidiary corporation). Since a holding company can control, or at least influence, its subsidiary, it is arguable that legislative power to regulate a holding company could be incidental to regulation of the subsidiary; in other words, regulating the controller could assist in regulating the controlled company. However, the converse is clearly not arguable since it is difficult to see how legislative power to regulate the subsidiary could assist in regulating the parent company. The High Court has never determined whether the mere character of being a holding company or subsidiary of a s 51(xx) corporation brings that body within s 51(xx) as amplified by incidental powers. However, contradictory views were expressed in Actors Equity in which the legislation (the Trade Practices Act 1974 (Cth)) applied to the holding company of a s 51(xx) corporation. Murphy J considered the provision probably valid (at 212–213), but Stephen, Mason and Aickin JJ held it to be clearly invalid, but severable: at 195, 209. The latter remarks were confined to the question whether s 51(xx) authorised Commonwealth regulation of a holding company per se; as Heydon JA (Spigelman CJ and Mason P concurring) remarked in R v O’Halloran (2000) 182 ALR 431 at 439 [30] (NSW CCA), “Mason J’s remarks [in Actors Equity] were directed to corporations which were holding companies in the sense of being merely holding companies and nothing more. His remarks are not authority for the proposition that no holding company can ever be regulated by a law resting on s 51(xx)”. For a discussion, see BL Lloyd, “The Constitutional Validity of the Trade Practices Act and Regulation of the Conduct of Holding Companies” (1993) 21 Federal Law Review 279. If s 51(xx) does not extend the regulation of holding companies per se, it follows that it would not extend to regulating subsidiary companies for the reason noted above. Of course, holding, subsidiary or other companies which are involved in activities of a s 51(xx) [5.620]

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corporation which can be regulated under s 51(xx) could be regulated under incidental powers pursuant to Fencott v Muller (1983) 152 CLR 570 ([5.590]).

490

[5.620]

CHAPTER 6 External Affairs and Defence [6.10]

SECTION 51(XXIX) ................................................................................................... 491 [6.10] External affairs .......................................................................................... 491 [6.20] International relations and geographical externality ........................... 492 [6.30]

[6.60]

Implementation of treaties and other international norms ................. 497 [6.70] [6.90] [6.110]

[6.130]

R v Burgess; Ex Parte Henry ........................................................... 499 Koowarta v Bjelke-Petersen ........................................................... 501 The Tasmanian Dam Case ............................................................ 512

Limits to the use of s 51(xxix) ................................................................ 523 [6.135] [6.140] [6.150]

[6.170]

XYZ v Commonwealth .................................................................. 494

The Tasmanian Dam Case ............................................................ 524 Richardson v Forestry Commission ................................................. 526 The Industrial Relations Act Case ................................................... 527

Reform of the power? ............................................................................. 532

[6.180] SECTION 51(VI) ........................................................................................................ 534 [6.180] The defence power .................................................................................. 534 [6.190] [6.210] [6.230] [6.250]

Farey v Burvett ............................................................................. Australian Communist Party v Commonwealth ............................... Marcus Clark & Co v Commonwealth ............................................ Thomas v Mowbray ......................................................................

535 537 549 550

SECTION 51(XXIX) “External affairs” [6.10] Section 51(xxix) of the Commonwealth Constitution provides: 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 … external affairs.

The Draft Bill as adopted by the First National Australasian Convention in Sydney on 9 April 1891 provided for a power to make laws with respect to “external affairs and treaties”. However, at the Melbourne Convention session in 1898, the words “and treaties” were deleted. For a discussion on this aspect see the Tasmanian Dam Case (1983) 158 CLR 1 at 298–300 (per Dawson J). In Kirmani v Captain Cook Cruises Pty Ltd (No 1) (1985) 159 CLR 351 at 379, Mason J observed that the expression “external affairs” was adopted in preference to “foreign affairs” so as “to make it clear that the relationships between the Commonwealth and other parts of the British Empire, especially the United Kingdom, were comprehended”. The potential significance of this textual history to the proper interpretation of the power was considered by Callinan and Heydon JJ in XYZ v Commonwealth (2006) 227 CLR 532 (see below at [6.30]). As the external affairs power is to be read “subject to this Constitution” it is subject to the express limitations imposed by the Constitution, such as ss 92 and 116. It is also subject to implied limitations such as the separation of powers, the prohibition which invalidates Commonwealth legislation which discriminates against the States or prevents them from continuing to exist or function as such, and the implied political freedoms and entitlements. It [6.10]

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is otherwise a very extensive power, however. This is because, as the decisions of the High Court in Koowarta v Bjelke-Petersen (1982) 153 CLR 168 and Tasmanian Dam Case (1983) 158 CLR 1 confirm, s 51(xxix) enables the Commonwealth Parliament to legislate so as to give effect to international legal norms that govern Australia. The growth of international law, especially through the proliferation of treaties dealing with a wide variety of subject matters, has made this a power of increasing significance. International relations and geographical externality [6.20] The scope of the external affairs power is not confined to the implementation of

treaties or other international norms. In R v Sharkey (1949) 79 CLR 121 a sedition law which spoke of exciting “disaffection against the government or Constitution of any of the King’s Dominions” (that is, s 24A(i)(c) of the Crimes Act 1914 (Cth)) was held to be a law with respect to external affairs (see at 136–137 per Latham CJ, at 157 per McTiernan J, at 149 per Dixon J and at 163 per Webb J). Latham CJ said: 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.

He also added that the preservation of friendly relations with other Dominions “is an important part of the management of the external affairs of the Commonwealth.” XYZ v Commonwealth (2006) 227 CLR 532 concerned the validity of ss 50BA and 50BC of the Crimes Act 1914 (Cth), which rendered it an offence for an Australian citizen or resident, while outside Australia, to engage (or attempt to engage) in sexual intercourse with, or commit an act of indecency on, a person under 16 years of age. The impetus behind these laws was concern over “child sex tourism”, particularly in Thailand. Kirby J upheld their validity on the basis that they were laws with respect to “Australia’s external relations with other nation states and with international organisations” ([148]), and hence valid as an exercise of the external affairs power. (The reasoning of the other members of the Court is discussed at [6.30] below.) The argument that the external affairs power encompasses legislating with respect to matters geographically external to Australia was put most succinctly by Dawson J, in Polyukhovich v Commonwealth (the War Crimes Act Case) (1991) 172 CLR 501 at 632: [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”.

A similar view was expressed by Mason CJ, Deane, Gaudron and McHugh JJ. See also similar sentiments in New South Wales v Commonwealth (the Seas and Submerged Lands Case) (1975) 135 CLR 337 (at 360 per Barwick CJ, at 471 per Mason J and at 497 per Jacobs J). The War Crimes Act Case was concerned with the validity of s 9 of the War Crimes Act 1945 (Cth) as amended by the War Crimes Amendment Act 1988 (Cth). The Act was primarily concerned with “war crimes” (as defined by the Act) committed in Europe during World War II. It also provided for the trial and punishment of Australian citizens and residents who might have committed such crimes. The judgments contained some discussion of whether the external affairs power, being subject to the “peace, order and good government of the Commonwealth” formula in s 51, requires a “nexus” with the Commonwealth in order for there to be a valid exercise of the power. (As is the case for the extraterritorial legislation of State Parliaments: Union Steamship Co v King (1988) 166 CLR 1; above at [2.480].) Brennan J construed the power conferred by s 51(xxix) as a power to make laws with respect to “Australia’s external affairs”; hence some connection was required. Dissenting on the issue of validity under s 51(xxix), he said (at 550–551): 492

[6.20]

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I do not understand the phrase “external affairs” to sweep into Commonwealth power every person who exists or every relationship, set of circumstances or field of activity which exists or occurs outside Australian territory. The “affairs” which are the subject matter of the power are, in my view, the external affairs of Australia; not affairs which have nothing to do with Australia. Although affairs which exist or occur outside Australia may be described as “external” in a geographical sense, I would not hold that the Constitution confers power to enact laws affecting affairs which, though geographically external, have nothing to do with Australia. There must be some nexus, not necessarily substantial, between Australia and the “external affairs” which a law purports to affect before the law is supported by s 51(xxix).

Toohey J said (at 654): A matter does not qualify as an external affair simply because it exists outside Australia. It must be a matter which the Parliament recognises as touching or concerning Australia in some way. Indeed it might be thought more than passing strange that the Constitution solemnly conferred power on the Parliament to legislate with respect to a matter in which it had no interest.

Brennan J pointed out that, at the time of the alleged occurrences of the acts charged against the plaintiff, the plaintiff was neither a citizen nor a resident of Australia. Subsequent acquisition of Australian citizenship or residence did not supply a sufficient connection with Australia to enliven the external affairs power. Toohey J, to the contrary, found a sufficient connection in the context of World War II “in which Australia was directly involved, in which many Australian service personnel and civilians were killed, wounded, imprisoned or ill-treated and which had such significant social, economic and political consequences for [Australia]” (at 655). In Horta v Commonwealth (1994) 181 CLR 183 (“Horta”) the High Court upheld the validity of the Petroleum (Australia-Indonesia Zone of Co-operation) Act 1990 (Cth). The Act gave effect to a treaty entered into by Australia and Indonesia to permit and regulate the exploration for, and the exploitation of, petroleum resources in the Timor Gap. A unanimous court said (at 194–195): Regardless of whether the mere fact that a matter or thing is territorially outside Australia is of itself sufficient to bring a matter or thing within the phrase “External affairs” for the purposes of s 51(xxix) or whether one or other of those additional factors [suggested by Brennan and Toohey JJ] is necessary, it is clear that the area of the Timor Gap and the exploration for, and the exploitation of, petroleum resources within that area all fall within that phrase. Each of those matters is geographically external to Australia. There is an obvious and substantial nexus between each of them and Australia. As the enactment of the Act demonstrates, they are all matters which the Parliament recognizes as affecting or touching Australia. That being so, the enactment of a law with respect to one or all of those matters is prima facie within the legislative power conferred by s 51(xxix). … There can be circumstances in which a law which is prima facie within the legislative power conferred by s 51(xxix) is nonetheless outside the legislative power of the Parliament by reason of some other provision of the Constitution, express or implied, to which the legislative power conferred by s 51(xxix) is subject. However, no such circumstances exist in the present case. … [E]ven if the Treaty were void or unlawful under international law or if Australia’s entry into or performance of the Treaty involved a breach of Australia’s obligations under international law, the Act and the Consequential Act would not thereby be deprived of their character as laws with respect to “External affairs” for the purposes of s 51(xxix). Neither s 51(xxix) itself nor any other provision of the Constitution confines the legislative power with respect to “External affairs” to the enactment of laws which are consistent with, or which relate to treaties or matters which are consistent with, the requirements of international law.

In Victoria v Commonwealth (1996) 187 CLR 416 (the Industrial Relations Act Case), Brennan CJ and Toohey J seemed to have changed their views; they joined Gaudron, McHugh and Gummow JJ in endorsing the broader view of Mason CJ, Deane, Dawson, Gaudron and [6.20]

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McHugh JJ in the Polyukhovich v Commonwealth (War Crimes Act Case). Such a view, they said, “must now be taken as representing the view of the court” (at 485). However, the view did not attract unanimous support in XYZ v Commonwealth.

XYZ v Commonwealth [6.30] XYZ v Commonwealth (2006) 227 CLR 532; [2006] HCA 25 The facts of this case have been mentioned above (at [6.20]). The High Court was urged to overrule the geographical externality principle, but this challenge was dismissed by a majority of the Court. In upholding the validity of the impugned laws, Gleeson CJ (at 538 [9], 542 [15]–[16]) and Gummow, Hayne and Crennan JJ (at 547 [31], 549–551 [40]–[45]) relied on the geographical externality principle and rejected the challenge to the correctness of this principle. Kirby J entertained some doubt about the principle and felt that it needed further elaboration by the Court on another occasion before it is applied as “an accepted doctrine of Australian constitutional law” (at 572 [116]). Callinan and Heydon JJ mounted a strong attack on the geographic externality principle, however, drawing on the history of the phrase’s inclusion in the Constitution: 586 [159] It is not in dispute that the expression “external affairs” was used … in preference to “foreign affairs” in order, as Brennan CJ, Toohey, Gaudron, McHugh and Gummow JJ have said, “to make it clear that the power comprehended both the relationship between the Commonwealth of Australia and other parts of the then British Empire and the relationship with foreign countries” (Victoria v The Commonwealth (Industrial Relations Act Case) (1996) 187 CLR 416 at 482 (emphasis added)). That language is significant. It points against the grant of a wider power to legislate on matters located externally to Australia. It points towards a more specific power for the legislature to act in a manner complementing the executive’s conduct of Australia’s relationships with foreign nations and international organisations. … [160] A “relationship” in this sense means a dealing between Australia and another country. That dealing can be a treaty, but it need not be: any of a vast range of diplomatic relationships between Australia and other countries could, depending on the circumstances and subject to the Constitution, be a relevant dealing. On this view, what “external affairs” cannot include is something which is the subject of a unilateral act or desire on the part 587 of Australia. That lacks the mutuality inherent in the conduct of “affairs” in the sense of a relationship or dealing with another nation or an international organization. … 593 [178] Once it is accepted, as this Court has, that the expression “external affairs” was selected to apply to relationships between Australia and places which were external to it … it becomes clear that not only is it wrong to analyse the meaning of the expression “foreign affairs” by looking at the meaning of each of the two words separately, but it is also wrong to adopt the same process for “external affairs”. … 594 [180] For these reasons, textual analysis points against the correctness of the geographic externality view of s 51(xxix).

[6.40] In recent years, questions about the extent of the external affairs power have been

raised by certain sections of the Migration Act 1958 (Cth). Much of this litigation has arisen in the context of various (and frequently amended) provisions of that Act providing for certain categories of non-citizens who do not possess visas permitting entry into Australia (as is required by s 42 of the Migration Act) – in particular those who arrive in Australia by sea – to be detained, either in Australia pending the issue of a visa or their removal from the country, or in overseas places (known as “regional processing countries”) to which they are taken by Australian authorities (see eg Divisions 6, 7 and 8 of Part 2 of the Migration Act). In Plaintiff M47/2012 v Director General of Security (2012) 251 CLR 1, Gummow J stated (at 51 [83]): 494

[6.30]

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A law dealing with the movement of persons between Australia and places physically external to Australia may be supported by the external affairs power (s 51(xxix)); this will be so independently of the implementation by that law of any treaty imposing obligations upon Australia respecting movement of non citizens …

Plaintiff M68/2015 v Minister for Immigration and Border Protection (2016) 257 CLR concerned a challenge to the validity of s 198AHA of the Migration Act 1958 (Cth). This section empowers the Commonwealth Government to carry out the terms of certain agreements entered into in the course of arranging for non-citizens to be taken by Australian authorities to other countries. Such an agreement had been entered into with Nauru. In the course of finding the law valid, Gageler J stated (at 110 [182]): In so far as [s 198AHA] authorises the Executive Government to take action or cause action to be taken outside Australia in relation to an arrangement entered into by the Executive Government and the government of a foreign country, it is a law with respect to external affairs, within the scope of s 51(xxix) of the Constitution.

Gordon J agreed with this characterization of the law, but went on to find the law invalid on the following basis (at 167 [407]–[409]): Section 198AHA applies if an arrangement has been entered into by the Commonwealth in relation to the regional processing functions of another country. The MOU [Memorandum of Understanding] between the Commonwealth and Nauru is necessarily a matter which concerns Australia’s external relations (Koowarta v Bjelke-Petersen (1982) 153 CLR 168 at 201–202, 220–221, 237, 257–258). Section 198AHA is directed at implementing arrangements such as the MOU. Section 198AHA is therefore a law with respect to external relations. It deals with a subject directly within the subject matter of s 51(xxix). However, to the extent that s 198AHA authorises the Commonwealth to restrain the liberty of an alien in a regional processing country where removal of that alien from Australia is complete, that authorisation is not valid.… In particular, the external affairs power does not authorise the Commonwealth to make a law permitting the Executive to make an agreement with a foreign state that would permit or require the Commonwealth Executive to detain persons other than for purposes constituting some exception to Ch III requirements about judicial power. The legislative power with respect to external affairs does not extend to authorising the Executive to detain persons contrary to Ch III.

The “Ch III requirements” mentioned by Gordon J, which limit the power of the Commonwealth Parliament to enact laws permitting executive detention, provide an example of those “other provision[s] of the Constitution, express or implied, to which the legislative power conferred by s 51(xxix) is subject” mentioned in Horta v Commonwealth (1994) 181 CLR 183 at 195. However, the other members of the Court took the view that no such limit applied, either because no detention by the Commonwealth executive was taking place (French CJ, Kiefel and Nettle JJ at 68–69 [36]; Keane J at 124 [239]), or because such detention by the Commonwealth as was occurring fell within what Gordon J described as “some exception to Ch III requirements” (Bell J at 87 [99]–[101]; Gageler J at 111–112 [183]–[185]). [6.50]

1.

Notes&Questions See A Twomey, “Geographical Externality and Extraterritoriality: XYZ v Commonwealth” (2006) 17 Public Law Review 253. The significance of the War Crimes Act Case is discussed in D Rothwell, “The High Court and the External Affairs Power: A Consideration of Its Outer and Inner Limits” (1993) 15 Adelaide Law Review 209. [6.50]

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2.

In his judgment in Plaintiff M47/2012 v Director General of Security (2012) 251 CLR 1 (at 51 [83]), Gummow J cited De L v Director-General, NSW Department of Community Services (1996) 187 CLR 640 (“De L”), in which the issue of the validity of the Family Law (Child Abduction Convention) Regulations 1986 (Cth) was raised. The High Court held that these regulations in “dealing with the return of children abducted from Australia and the return of children abducted to Australia, were valid under s 51(xxix) independently of whether they implemented an international Convention to which Australia was party. It was said that the movements of children between Australia and places physically external to Australia were ‘external affairs’” (per Callinan and Heydon JJ in XYZ (2006) 227 CLR 532 at 602 [197]). Would a law requiring any non-citizen who came to Australia from another country to return to that country be, as such, a law with respect to external affairs? What about a law requiring a non-citizen who was born in, and had never left, Australia to leave Australia? Or a law forbidding a person from leaving Australia?

3.

In R v Hughes (2000) 202 CLR 535, “the view was expressed by all members of [the] Court that a federal law regulating the placing by Australian investors of moneys in the United States would attract s 51(xxix). The law would relate to matters territorially outside Australia but would touch and concern Australia” (per Gummow, Hayne and Crennan JJ in XYZ who also pointed out that the War Crimes Act Case, Horta and De L also concerned legislation which “touched and concerned Australia”: at 548 [36]). Does this lend any support to Callinan and Heydon JJ’s criticism of the “geographic externality” principle?

4.

In XYZ v Commonwealth, Callinan and Heydon JJ dealt with the further submission of the Commonwealth that the impugned legislative provisions were laws with respect to external affairs “on the basis that the extraterritorial prohibition of the sexual exploitation of children is a matter of international concern”. Callinan and Heydon JJ doubted whether the “international concern doctrine” existed. They pointed to the Australian Communist Party v Commonwealth (1951) 83 CLR 1 as negating the international concern doctrine: such a doctrine never occurred to any of the Justices as providing validity to the impugned legislation banning the Australian Communist Party; and the doctrine contemplates the validity of legislation following from a judgment on the part of the executive government and the Parliament that a matter is of international concern, a view analogous to the dissenting judgment of Latham CJ in the Australian Communist Party Case. For criticism of this view of Callinan and Heydon JJ, which nevertheless concludes that “it might be better to follow Kirby J’s example and refer, instead, to subjects that are relevant to the relations of Australia with other countries and organisations”, see J Stellios, Zines’s The High Court and the Constitution (6th ed, Federation Press, Sydney, 2015), p 441. Callinan and Heydon JJ also pointed to some inconclusive dicta on the issue and one Federal Court decision which actually applied the doctrine (Souliotopoulos v La Trobe University Liberal Club (2002) 120 FCR 584) and said that the “volatility, and the elusiveness connected with attempts to define ‘international concern’, strongly suggest that the international concern doctrine does not exist; for if it did, it would operate antithetically to the rule of law” (at 608 [218]). Kirby J described the doctrine as “still undeveloped in Australia” (at 575 [127]). See: S Murray, “Back to ABC after XYZ: Should We Be Concerned About “International Concern”?” (2007) 35 Federal Law Review 315; E Edson, “Section 51(xxix) of the Australian Constitution and “Matters of International Concern”: Is there Anything to be Concerned About?” (2008) 29 Adelaide Law Review 269. See also Stellios (6th ed, 2012), pp 438–441. In Pape v Commissioner of Taxation

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3 (2009) 238 CLR 1, Heydon J dismissed the “supposed” international concern doctrine as having “no merits” (at 161 [472]). Implementation of treaties and other international norms [6.60] The making and ratification of treaties are executive acts performed by the government

of the Commonwealth, exercising its power under s 61 of the Constitution. (It should be noted that the Australian States, lacking full international legal personality, cannot enter into treaties.) However, a treaty’s terms can only be implemented in the Australian domestic legal arena by legislation. As Mason CJ and Deane J explained in Minister for Immigration and Ethnic Affairs v Teoh (1995) 183 CLR 273 (at 286–287): It is well established that the provisions of an international treaty to which Australia is a party do not form part of Australian law unless those provisions have been validly incorporated into our municipal law by statute … This principle has its foundation in the proposition that in our constitutional system the making and ratification of treaties fall within the province of the Executive in the exercise of its prerogative power whereas the making and the alteration of the law fall within the province of Parliament, not the Executive … So, a treaty which has not been incorporated into our municipal law cannot operate as a direct source of individual rights and obligations under that law.

Gibbs CJ in Koowarta v Bjelke-Petersen (1982) 153 CLR 168 said (at 193): 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. However, the treaties when made are not self-executing; they do not give rights to or impose duties on members of the Australian community unless their provisions are given effect by statute. The power of the Parliament to carry treaties into effect is not necessarily as wide as the executive power to make them.

This proposition, that the executive cannot alter the law of the land simply in virtue of carrying out relations with other countries and entering into treaties with them, is a longstanding and fundamental one. It was key to the finding of the United Kingdom courts that the executive government of that country cannot commence the process of ending Britain’s membership of the European Union – which would radically change British domestic law by cutting off European Union law as one component of that law – without a statutory conferral of such power: R (Miller) v Secretary of State for Exiting the European Union [2016] EWHC 2768 (Admin); R (on the application of Miller and Dos Santos) v Secretary of State for Exiting the European Union [2017] UKSC 5. Where an international legal norm deals with some domestic subject matter (for example, environmental protection, public health, industrial relations and conditions of employment, or the promotion and protection of human rights within Australia) the Commonwealth Parliament may nevertheless legislate in respect of that subject matter, so as to give effect to the international legal norm. If the subject matter corresponds with a head of federal power other than the external affairs power, then the external affairs power is not necessary to the validity of the legislation; the Commonwealth Parliament could enact the law in question in any event. If the subject matter would otherwise be outside of Commonwealth legislative power, this can mean that the Commonwealth legislation under the external affairs power relates to something that otherwise would have fallen within the domain of the State Parliaments only. In such circumstances, the Commonwealth law will prevail over State law and the activities of State Governments, either by directly regulating such activities (see eg the Tasmanian Dam Case (1983) 158 CLR 1) or by rendering the State law inoperative by way of s 109 of the Constitution (see eg Mabo v Queensland (1988) 166 CLR 186), This has led to political [6.60]

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controversy over the Commonwealth’s use of this head of power to override the decisions of State Parliaments and State Governments. Thus, as Zines’s The High Court and the Constitution (6th ed, 2015), p 420, says: The most controversial issue for many years was whether Commonwealth power to legislate under s 51(xxix) to give effect to international agreements was limited to those which dealt with subjects of a particular kind. Were there some agreements which raised matters of external affairs, while others did not? If so what was the criterion?

In Koowarta (1982) 153 CLR 168 at 228, Mason J pointed out that the framers of the Constitution did not envisage the “extent of the expansion in international and regional co-operation which has occurred since 1900”. Sir Robert Menzies in his book, Central Power in the Australian Commonwealth (Cassell, 1967), remarked (at 116): [W]hen the draftsmen of the Constitution wrote down the magic words “external affairs”, there did not leap into their minds any vision of the complex and novel things that were to come many years later. Least of all could they have imagined a comprehensive world organisation of which Australia would be a member, that there would be an International Labour Organisation, or that the political stuff of 19th century treaties would largely have substituted for it the bargaining of merchants, of exporters and importers, agreements in the fields of health and science, the literally hundreds of matters engaging our attention and turning our eyes out to other lands and other peoples.

In the Industrial Relations Act Case (1996) 187 CLR 416, however, the majority of the High Court (Brennan CJ, Toohey, Gaudron, McHugh and Gummow JJ) expressed a somewhat different view of these historical matters (at 116): 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, 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. It was recognised by 1900 that there was a continual expansion in the range of the subject-matter of treaties entered into between Great Britain and other states. This was acknowledged in the contemporary Australian writings of Professor Pitt Cobbett (“The International Organization of Society”, (1909) 6 The Commonwealth Law Review 193 (Pt 1), 243 (Pt 2)). … The “oldest international organization in the world”, the International Telecommunication Union, was established in 1865 as the International Telegraph Union. By the turn of the century about thirty states were members. The Universal Postal Union was inaugurated in 1874. India and Canada obtained separate votes in the Universal Postal Union and, in 1885, the Australian colonies collectively obtained one vote. Berne was the seat of the administration of both the International Telegraph Union and the Universal Postal Union. The International Convention for the Protection of Industrial Property was signed at Paris in 1883 and it provided for the establishment at Berne of the office of the International Union for the Protection of Industrial Property. The result was to provide international recognition for the rights of inventors. The rights of authors of literary and artistic works were given similar recognition by the Berne Convention of 1886. Before 1900, modern international arbitration had developed … This process was further advanced with the Hague Convention for the Pacific Settlement of International Disputes of 1899, which established the Permanent Court of International Arbitration. There was activity also in the fields of what now would be called international human rights, world health and environmental protection. The Geneva Convention of 1864 laid the foundations of the International Red Cross. The General Act for dealing with the Suppression of Slavery in Africa, signed at Brussels in 1890, provided for the maintenance of a bureau to collect all information on measures connected with matters dealt with under the General Act. Abuses against inhabitants of the Pacific Islands were a major concern of the Imperial 498

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Government. This had been reflected in the Pacific Islanders Protection Acts of 1872 and 1875 (UK) and the establishment of the High Commissioner for the Pacific. Conventions were negotiated affecting health and the environment. The Convention of London, signed by the African colonial powers in 1900, sought to preserve the native fauna of that continent; a convention signed at Berne in 1878 sought to prevent recurrence of the damage done to the wine industry by the phylloxera epidemics of the preceding decade; and several conventions dealt with the threat to public health by the spread of cholera and the plague.

These differing views of the drafting context of the external affairs power cast doubt on the extent to which historical considerations provide support to federalist objections to the interpretation and use of the external affairs power in relation to treaty obligations (for one example of such an argument, see James Allan and Nicholas Aroney, “An Uncommon Court: How the High Court of Australia Has Undermined Australian Federalism” (2008) 30 Sydney Law Review 245, 247). A variety of views on the extent of the legislative power with respect to international legal norms were expressed in R v Burgess; Ex parte Henry (1936) 55 CLR 608.

R v Burgess; Ex Parte Henry [6.70] R v Burgess; Ex parte Henry (1936) 55 CLR 608 at 640–687, 658, 669 Latham CJ: 640 Then it is argued that the power to legislate with regard to external affairs is limited to matters which in se concern external relations or to matters which may properly be the subject matter of international agreement. No criterion has been suggested which can result in designating certain matters as in se concerning external relations and excluding all other matters from such a class. It is very difficult to say that any matter is incapable of affecting international relations so as properly to become the subject matter of an international agreement. It appears to me that no absolute rule can be laid down upon this subject. No one would to-day be inclined to deny that the production and sale of recently invented narcotic drugs is a matter of international interest and concern. Fifty years ago it is unlikely that many persons would have thought that such subjects would be dealt with by international treaties. Modern invention has almost abolished the effects of distance in time and space which enabled most States to be indifferent to what happened elsewhere. Today all peoples are neighbours, whether they like it or not, and the endeavour to discover means of living together upon practicable terms – or at least to minimise quarrels – has greatly increased the number of subjects to be dealt with, in some measure, by international action. The Department of External Affairs of the Commonwealth published on 15th August 1935 a “List of International Agreements (Treaties, Conventions, &c) to which Australia is a party, or which affect Australia, together with prefatory notes.” The list of bilateral 641 international agreements extends over eighteen pages and the list of general and multilateral international agreements extends over eleven pages. The subjects are so various that it is impossible to classify them. They include matters affecting extradition, trade and commerce, navigation, legal proceedings, joint stock companies, war graves, commercial arbitration, international arbitration, tariffs, trade marks and other industrial property, friendship and amity, postal matters, medical practitioners, lunatics, submarine telegraph cables, maritime and land warfare, sanitation, white slave traffic, use of white phosphorous in manufacturing matches, copyright, obscene publications, peace after the Great War, labour matters, contagious diseases, dangerous drugs, economic statistics, limitation and reduction of armaments, and other subjects. It will be seen therefore that the possible subjects of international agreement are infinitely various. It is, in my opinion, impossible to say a priori that any subject is necessarily such that it could never properly be dealt with by international agreement. … Evatt and McTiernan JJ: 681 It is true that such subject matters as air navigation, the manufacture of munitions, the suppression of the drug traffic and standard hours of work in industry are not made express or separate subject matters of Commonwealth legislative power. But there is, in our view, an undoubted capacity in His Majesty to enter into international conventions dealing with any of these subject matters and necessarily binding upon and in respect of the Commonwealth. In truth, the [6.70]

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R v Burgess; Ex Parte Henry cont. 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 … 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 sec 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 secs 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, to pursue the illustration previously referred to, 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 Organization or of other international recommendations or requests upon other subject matters of concern to Australia as a member of the family of nations. The power is a great and important one. … Starke J: 658 The power conferred by the Constitution upon the Commonwealth to make laws with respect to external affairs must be exercised with regard to the various constitutional limitations expressed or implied in the Constitution, which restrain generally the exercise of Federal powers. The Commonwealth cannot do what the Constitution forbids. But otherwise the power is comprehensive in terms and must be commensurate with the obligations that the Commonwealth may properly assume in its relations with other Powers or States. It is impossible, I think, to define more accurately, at the present time, the precise limits of the power. It may be, as Willoughby suggests in connection with the treaty-making power in the Constitution of the United States, 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” (Willoughby on The Constitutional Law of the United States, 2nd ed (1929), p 519). … Dixon J: 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.

[6.80]

1.

Notes&Questions Burgess showed judicial endorsement of a broad reading of the external affairs power. The High Court held that the power supported so much of s 4 of the Air Navigation Act 1920 (Cth), as empowered the Governor-General to make regulations for carrying out and giving effect to the Convention for the Regulation of Aerial Navigation. However, the court invalidated the regulations on the ground that they did not carry out and give effect to the Convention.

2.

Why is the view of Evatt and McTiernan JJ regarded as going further than that of any other judge in the case? The scope of s 51(xxix) was put under the spotlight when the court was confronted with the issue in Koowarta v Bjelke-Petersen (1982) 153 CLR 168. This was the first case where the view adopted was critical to the outcome. 500

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Koowarta v Bjelke-Petersen [6.90] Koowarta v Bjelke-Petersen (1982) 153 CLR 168 at 224–261, 211–221, 187–207 [The Minister for Lands of the State of Queensland refused to grant consent or permission to the transfer of a lease which the Aboriginal Land Fund Commission had sought to acquire. The Commission had, in 1976, entered into a written contract to buy the Crown leasehold pastoral property. However, under a term of the contract and the provisions of the Land Act 1962 (Qld), the permission of the Queensland Minister for Lands was required to effect the transfer. The main reason for the Minister’s refusal was that it was the settled policy of the Queensland government not to view favourably “proposals to acquire large areas of additional freehold or leasehold land for development by Aborigines or Aboriginal groups in isolation.” Koowarta sought to invoke the Racial Discrimination Act 1975 (Cth), claiming that the Act had been breached. In 1965, the General Assembly of the United Nations had adopted the International Convention on the Elimination of All Forms of Racial Discrimination, which was subsequently signed and ratified by the Commonwealth. Parties to the Convention 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. One such right was “the right to own property alone as well as in association with others.” The Racial Discrimination Act 1975 (Cth) was passed by the Commonwealth Parliament to give effect to the Convention. The relevant provisions of the Act under scrutiny in the case were contained in ss 9 and 12. Section 9(1) provided as follows: 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. Section 12(1) made it unlawful for a person, inter alia, “to refuse or fail to dispose of any estate or interest in land … to a second person … 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.”. “Dispose” as defined included “grant consent to the disposal”. The High Court by a majority of 4:3 upheld the validity of ss 9 and 12 of the Racial Discrimination Act 1975 (Cth) under the external affairs power (Stephen, Mason, Murphy and Brennan JJ; Gibbs CJ, Aickin and Wilson JJ dissenting).] Mason J: 224 The 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 – a matter to be mentioned later. 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. … 225 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. Nor, to take an example posed in argument, could it amend the Constitution otherwise than by the means provided for in s 128; it certainly could not do so by the expedient of assuming a treaty obligation to amend the Constitution and then attempting to legislate directly without resort to s 128 so as to give effect to that treaty obligation. 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 226 existence or their capacity to function (Victoria v Commonwealth (1971) 122 CLR 353 at 372, 374–375, 388–391, 403, 411–412, 424). [6.90]

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Koowarta v Bjelke-Petersen cont. But the States which challenge the validity of the Act go further and say that the external affairs power is necessarily subject to the special limitation that it will not support legislation which is exclusively domestic in its operation. First, it is emphasized that the subject of the power is external affairs. This, it is said, means that the Constitution distinguishes between internal and external affairs. Suggested conclusion: internal affairs lie outside the scope of the power … 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 true position, in accordance with received doctrine, is that a law, which according to its correct characterization is on a permitted topic, does not cease to be valid because it also happens to operate on a topic which stands outside power. The critical question is whether in the present case the law is with respect to external affairs, not whether it is with respect to internal affairs. … An affair will very often have characteristics which endow it with both internal and external qualities. … 227 The same restriction on the power, it is argued, is dictated by the nature of the federal compact and the distribution of powers effected by the Constitution. To concede to the Commonwealth a capacity to enter into treaties by which it undertakes to enact domestic legislation of its own choosing and a legislative power to give effect to that undertaking would enable the Commonwealth by this means to legislate on any topic, no matter that it stands outside the specific powers conferred on the Commonwealth by the Constitution. The argument has several flaws. It is perhaps going too far to say that it rests on the underlying assumption that various fields of legislative activity, racial discrimination being the relevant example, inalienably belong to the States for the reason that specific power over the topic is not given to the Commonwealth. After all the doctrine of reserved powers was decisively rejected in Amalgamated Society of Engineers v Adelaide Steamship Co Ltd (“the Engineers’ Case”) (1920) 28 CLR 129, though in recent cases it seems to have re-emerged in different guises. … [I]t 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. Indeed, the converse approach is the correct one. As we have seen, the legislative powers granted to the Commonwealth should be construed liberally, not pedantically. Indeed, O’Connor J in Jumbunna Coal Mine NL v Victorian Coal Miners’ Association (1908) 6 CLR 309 at 368 said: “… where the question is whether the Constitution has used an expression in the wider or the narrower sense, the Court should, in my opinion, always lean to the broader interpretation 228 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.” This passage was quoted with approval by Dixon J in Bank of NSW v Commonwealth (1948) 76 CLR 1 at 332. The suggestion is that exercise of the power according to its broad interpretation could ultimately lead to a situation in which the Commonwealth, by virtue of its being a party to many treaties calling for the enactment of domestic legislation on a variety of topics, would occupy many fields of legislative activity hitherto considered to be the preserve of the States, fields not specifically committed to the Commonwealth. This, it is urged, would disturb the balance of powers achieved by the Constitution. However, a realistic and objective view of the balance of powers between the Commonwealth and the States must recognize that one very important element in that balance is the committal of the external affairs power to the Commonwealth. The inclusion of “external affairs” in s 51 reflected a policy decision that a wide and general power over the subject should be reposed in the federal legislature and executive, in preference to leaving any part of the responsibility for the subject with the States. 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. This circumstance provides no ground for giving s 51(xxix) a restrictive construction. On the contrary, it is a reason for insisting on a liberal construction. As Dixon J observed in Australian National Airways Pty Ltd v Commonwealth (1945) 71 CLR 502

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Koowarta v Bjelke-Petersen cont. 29 at 81: “… 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.” There is no reason at all for thinking that the legislative power conferred by s 51(xxix) was intended to be less than appropriate and adequate to enable the Commonwealth to discharge Australia’s responsibilities in international and regional affairs. It is unrealistic to suggest in the light of our knowledge and experience of 229 Commonwealth-State co-operation and of co-operation between the States that the discharge of Australia’s international obligations by legislation can be safely and sensibly left to the States acting uniformly in co-operation. 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 disturbance, then it is a necessary disturbance, one essential to Australia’s participation in world affairs. It might be argued that, if the external affairs power was relevantly limited to the implementation of treaties from which Australia stands to derive a discernible benefit, the balance of powers would receive some protection without inhibiting Australia’s capacity to participate in world affairs. This solution would require the Court to review the judgment of the Executive and the Parliament that entry into a treaty and its implementation was for Australia’s benefit, a course bristling with problems for the Court. And I do not accept the suggestion that Australia’s capacity to participate in world affairs would not be seriously inhibited. Increasing emphasis is given in the United Nations and in regional organizations to the pursuit by international treaties of idealistic and humanitarian goals. It is important that the Commonwealth should retain its full capacity through the external affairs power to represent Australia, to commit it to participation in these developments when appropriate and to give effect to obligations thereby undertaken. 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 suggested 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 230 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. Take, for example, the vexed question of human rights. Though it is a matter to be accorded or denied by each nation domestically, it has become increasingly a matter of international concern and agreement by means of international and regional conventions. … One knows or can readily imagine treaties on topics of international concern by which the parties agree to enact domestic legislation to attain a common object, whether it be to suppress a noxious traffic or trade, to eliminate an infectious or contagious disease, or to limit production of a commodity or of goods in order to stabilize and share markets. The subject-matter of such treaties is, despite the argument of the Solicitor-General for Victoria to the contrary, international in character – there is agreement by the parties to take common action in pursuit of a common international objective, each party standing to gain a benefit from its attainment. What then of a treaty by which the parties agree to take domestic action to prohibit practices now recognized universally or generally to be abhorrent, eg, slavery, piracy, racial oppression and racial discrimination? It may be said that, with the noxious traffic or trade and infectious or contagious disease, its existence in one nation presents an obvious risk of its introduction into another, and that this risk gives an international character to a treaty providing for the suppression of the traffic or trade and the elimination of the disease. But it is otherwise with the treaty which requires the parties to limit domestic production or to eliminate some forms of past [6.90]

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Koowarta v Bjelke-Petersen cont. abhorrent human conduct, eg slavery. However, there are strong grounds for thinking that the practice of racial oppression and racial discrimination in one nation often leads to similar conduct by way of reaction or to reprisal in another nation or to countervailing violence, revolution and insurgency constituting a disturbance of international peace and security. Accordingly, every nation stands to benefit from the elimination of activity which may contribute to the disturbance of international peace and security. The differences in these situations do not seem to me to be 231 important in deciding whether the external affairs power enables the Commonwealth Parliament to implement a treaty, at least in the case of a multi-lateral treaty brought into existence under the auspices of the United Nations or another international agency. 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 … 234. I should not wish it to be thought from what I have said that the existence of a treaty is an essential pre-requisite to the exercise of the power. That is certainly not my view. … Moreover, as Professor Zines points out in The High Court and the Constitution (1981), p 230, “the reasoning in Burgess’s Case and Airlines [No 2] would support an Australian law giving effect to an obligation arising under rules of customary international law”. Further, it seems to me that a matter which is of external concern to Australia having become the topic of international debate, discussion and negotiation constitutes an external affair before Australia enters into a treaty relating to it. Application of the External affairs power to the convention On the broad view which I take of the power it extends to the implementation of the International Convention on the Elimination of All Forms of Racial Discrimination. It is an international treaty to which Australia is a party 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. … Murphy J: 240 In order that a law which operates on 241 persons and events in Australia, that is on internal affairs, may come within the constitutional power, it is necessary and sufficient that it be with respect to external affairs. Thus it is no valid objection that the Racial Discrimination Act 1975 deals, as it does, with internal affairs. Preservation of the world’s endangered species, maintenance of universal standards of human rights, control of traffic in drugs of dependence, elimination of infectious diseases, and many others, are for Australia as well as other nations, internal as well as external affairs. The States’ contentions are a hardly disguised representation of the State reserved powers doctrine rejected in Amalgamated Society of Engineers v Adelaide Steamship Co Ltd (1920) 28 CLR 129 (“the Engineers’ Case”), but now having a new lease (see Gazzo v Comptroller of Stamps (Vic) (1981) 149 CLR 227). The argument is that the external affairs power is insufficient to implement certain treaties into which the Executive Government can enter (of which the Convention is an example), and that implementation can be secured only by the co-operation of State Parliaments. Victoria contended that certain provisions of the Narcotic Drugs Act 1967 (Cth) (implementing the Single Convention on Narcotic Drugs) were invalid as beyond the competence of the Parliament; and that a law (pursuant to a treaty obligation) to prevent the emergence of slavery in any part of Australia would also be invalid. No satisfactory test was advanced for deciding which treaties Parliament could implement and which would require action by the States. If these contentions are correct, then as I said in New South Wales v Commonwealth (1975) 135 CLR 337 at 503 (“the Seas and Submerged Lands Case”) “Australia would be an international cripple unable to participate fully in the emerging world order.” The Constitution envisages no division of external affairs power between the Parliament and the State Parliaments. The Parliament, in exercising the external affairs power (as well as its other powers), is entitled to make laws for the peace order and good government of the Commonwealth, that is, of the people as a whole, notwithstanding the opposition of any State Government or Parliament. The exercise of that power is not an intrusion upon the people of the States. The people of the States are entitled as well as 504

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Koowarta v Bjelke-Petersen cont. obliged to have the legislative and executive conduct of those affairs which are part of Australia’s external affairs carried out by the Parliament and Executive Government of Australia. It was conceded by Queensland, rightly in my opinion, that the challenged sections of the Act conform to the Convention. The 242 legislation thus falls easily within the external affairs power as an implementation of this treaty. Further the Act relates to matters of international concern, the observance in Australia of international standards of human rights, which is part of Australia’s external affairs, so that the Act’s operative provisions would be valid even in the absence of the Convention. Thus it is immaterial whether the Act precisely conforms to the terms of the Convention. The challenged sections are completely authorized by the external affairs power. Brennan J: 256 When the subject-matter of a law is the subject of a treaty obligation and is “indisputably international in character”, s (xxix) is available to support the law. The present question is whether a law which creates or affects rights, duties, powers or privileges regulating a field of activity which is the subject of a treaty obligation is a law with respect to an external affair, or whether some additional quality, “indisputably international”, must 257 be found in the subject of the treaty obligation … 258 … 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. The effect of the law upon the subject which affects or is likely to affect Australia’s relationships provides the connexion which the words “with respect to” require. Those relationships, various in form and significance, are the substance of Australia’s external affairs. … Today it cannot reasonably be asserted that all aspects of the internal legal order of a nation are incapable of affecting relations between that nation and other nations. No doubt there are questions of degree which require evaluation of international relationships from time to time in order to ascertain whether an aspect of the internal legal order affects or is likely to affect them, but contemporary experience manifests the capacity of the internal affairs of a nation to affect its external relationships. 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 259 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. … If Australia, in the conduct of its relations with other nations, accepts a treaty obligation with respect to an aspect of Australia’s internal legal order, the subject of the obligation thereby becomes (if it was not previously) an external affair, and a law with respect to that subject is a law with respect to external affairs. 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 260 likely effect is sufficiently established by the acceptance of a treaty obligation with respect to that subject. I would agree, however, that a law with respect to a particular subject would not necessarily attract the support of s (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. … The treaty in performance of which the Racial Discrimination Act 1975 (Cth) (the Act) was enacted is the International Convention on the Elimination of All Forms of Racial Discrimination (the Convention). … I should think that the implementing of that Convention by Australia must be of the first importance to the conduct of Australia’s relations with its neighbours, if not indeed to Australia’s credibility as a member of the community of nations. … 261 It was rightly conceded that ss 9 and 12 were enacted in implementation of the Convention. If there were a disconformity between ss 9 and 12 on the one hand and the Convention obligation on the [6.90]

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Koowarta v Bjelke-Petersen cont. other, the Convention obligation might fail to stamp the character of an external affair upon some part of the subject-matter of ss 9 and 12, and further consideration would have to be given to their validity (cf R v Burgess; Ex parte Henry; Airlines of NSW [No 2], esp per Menzies J (1965) 113 CLR at 141). If there had been a material disconformity, it may have been necessary to consider whether any parts of ss 9 and 12 which were not in implementation of the Convention might have been supported as an appropriate legislative means of performing an obligation to eliminate racial discrimination as an obligation binding in international law dehors the Convention. It is unnecessary to examine the nexus between a non-treaty obligation and a law enacted in purported reliance on s (xxix) in performance of such an obligation. I would defer that examination until the circumstances of some particular case require it. It suffices in this case that ss 9 and 12 were enacted in performance of the Convention obligation and are therefore valid. Stephen J: 211 Because the composite phrase “External affairs” occurs as a grant of legislative power in a constitution for a nation, the meaning to be given to “affairs” must be one apt to apply to a national government. One of the meanings of “affairs” supplied by the Oxford English Dictionary, “public business, transactions or matters concerning men or nations collectively”, conveys that sense. The word “External” must in this constitutional context qualify “affairs” so as to restrict its meaning to such of the public business of the national government as relates to other nations or other things or circumstances outside Australia. … 212 … What I have described as the natural contextual meaning of s (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 following passages from four of the leading authorities in this Court: R v Burgess; Ex parte Henry (1936) 55 CLR 608 at 644, 658, 669, 687; Ffrost v Stevenson (1937) 58 CLR 528 at 596–597; Airlines of NSW Pty Ltd v New South Wales(No 2) (1965) 113 CLR 54 at 85, 126, 136, 152; New South Wales v Commonwealth (1975) 135 CLR 337 at 360, 377–378, 390, 450, 470, 503. … The real issue in these cases is confined to the question whether this power to implement treaty obligations is subject to any and if so what overriding qualifications derived from the federal nature of our Constitution. It is such qualifications which, in my statement of a highest common factor, have led to the introduction of the phrases “matters 213 international in character” and “legitimately the subject of agreement between nations.” The need for such qualifications is said to arise in this way. Whereas, read in isolation, s (xxix) would seem to authorize legislation to give effect municipally to each and every international obligation which Australia may incur, yet Australia is a federation possessing a constitution which assigns carefully limited legislative power to the federal legislature, leaving the undefined residue of legislative competence to the States. The power of the federal Executive to conclude treaties upon any subject-matter it sees fit is undoubted. If it can thereby at will create such “external affairs” as it wishes and if s (xxix) then confers power upon the federal legislature to legislate with respect to whatever external affair has thus been brought into being, this may place in jeopardy the federal character of our polity, the residuary legislative competence of the States being under threat of erosion and final extinction as a result of federal exercise of the power which s (xxix) confers. The authorities have made quite clear two things about the limits of the “External affairs” power. First, the few express restrictions upon legislative power which appear in the Constitution restrict the ambit of the power conferred by s (xxix); like all other paragraphs of s 51(xxix) is expressed to be “subject to this Constitution” and its grant of power must be read as subject to the restraints upon legislative power imposed, for example, by ss 92, 99, 114, 116 and 117 of the Constitution. Secondly, the grant of power conferred by s 51(xxix) is plenary in the sense that it is not to be restricted by reference to the limited legislative competence conferred by the other paragraphs of s 51. … 216 … There no doubt … exist limitations to be implied from the federal nature of the Constitution and which will serve to protect the structural integrity of the State components of the federal framework, State legislatures and State executives: Melbourne Corporation v Commonwealth (1947) 74 CLR 31. It is when one 506

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Koowarta v Bjelke-Petersen cont. ventures into further possible reaches of implied restrictions that real controversy exists. Henkin, in Foreign Affairs and the Constitution, rehearses the various arguments in support of other limitations which, over time, have been sought, largely unsuccessfully, to be placed upon the treaty power in the United States. Two of these recur in some judgments in this Court: that to fall within power, treaties must be bona fide agreements between states and not instances of a foreign government lending itself as an accommodation party so as to bring a particular subject-matter within the other party’s treaty power; and that to fall within power a treaty must deal with a matter of international rather than merely domestic concern. Limitations such as these accord better with the terms of our Constitution than with that of the United States, where the power is with respect not to “external affairs” but to treaties. … [W]here 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 217 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 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. … [T]he 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. … 218 … Its content will be determined not by the mere will of the Executive but by what is generally regarded at any particular time as a part of the external affairs of the nation, a concept the content of which lies very much in the hands of the community of nations of which Australia forms a part. … That prohibition of racial discrimination, the subject-matter of the Racial Discrimination Act, now falls squarely within the 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 acknowledgement of the need for universally recognized norms of conduct, particularly in relation to the suppression of racial discrimination. The post-war history of this new concern is illuminating. The present international regime for the protection of human rights finds its origin in the Charter of the United Nations. Prominent in the opening recitals of the Charter is a re-affirmation of “faith in fundamental human rights, in the dignity and worth of the human person, in the equal rights of men and women”. One of the purposes of the United Nations expressed in its Charter is the achieving of international co-operation in promoting and encouraging “respect for human rights and for fundamental freedoms for all without distinction as to race …”: Ch I, Art 1:3; see too Ch IX, Art 55(c). By Ch IX, Art 56 all member nations pledge themselves to take action with the Organization to achieve its purposes. The emphasis which the Charter thus places upon international recognition of 219 human rights and fundamental freedoms is in striking contrast to the terms of the Covenant of the League of Nations, which was silent on these subjects. The effect of these provisions has in international law been seen as restricting the right of member States of the United Nations to treat due observance of human rights as an exclusively domestic matter. Instead the human rights obligations of member States have become a “legitimate subject of [6.90]

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Koowarta v Bjelke-Petersen cont. international concern”: Judge de Aréchaga, Recueil des Cours, vol 178 (1978), p 177. Sir Humphrey Waldock, also a judge of the International Court of Justice, had earlier noted this development in Recueil des Cours, vol 106 (1962), p 200. To the same effect are Lauterpacht’s comments in International Law and Human Rights (1950), pp 177–178 and those in Oppenheim’s International Law, 8th ed (1958), vol 1, p 740. The views of other distinguished publicists are summarized by Schwelb in “The International Court of Justice and the Human Rights Clauses of the Charter” (1972) 66 American Journal of International Law 337 at 338–341. He concludes, at 350, that the views of Lauterpacht and others on the effect of the human rights provisions of the Charter were affirmed by the Advisory Opinion of the International Court in the Namibia Case [1971] ICJR at 51. See also the statement of Judge Tanaka in his dissenting opinion in the South West Africa Case [1966] ICJR 4 at 284, the majority opinion of the International Court in the Barcelona Traction Case [1970] ICJR 3 at 33, and McDougal, Laswell and Chen, Human Rights and World Public Order (1980), pp 599–560 [sic: 599–600]. These matters having, by virtue of the Charter of the United Nations, become at international law a proper subject for international action, there followed, in 1958 [sic], the Universal Declaration of Human Rights and thereafter many General Assembly resolutions on human rights and racial discrimination. … There have also been various regional agreements on human rights, perhaps the leading example being the European Convention for the Protection of Human Rights and Fundamental Freedoms of 1950. It was in 1965 that the Assembly unanimously adopted the International Convention on the Elimination of All Forms of Racial Discrimination. Its origins in 1959 and its subsequent history are traced by Schwelb in an article in the International and Compara 220 tive Law Quarterly, vol 15 (1966), 996, at 997–1000. The learned author’s conclusion, at 1057, is of particular relevance. It is that the provisions of the Convention “represent the most comprehensive and unambiguous codification in treaty form of the idea of the equality of races. With ever-increasing clarity this idea has emerged as the one which, more than any other, dominates the thoughts and actions of the post-World War II world. In our time, the idea of racial equality has acquired far greater force than its eighteenth-century companions of (personal) liberty and fraternity. The aim of racial equality has permeated the law-making, the standard-setting and the standard-applying activities of the United Nations family of organisations since 1945.” “The … Convention of 1965 (is) the core of the international conventional law on the subject” (emphasis added). The Convention was opened for signature on 21 December 1965 and entered into force on 2 January 1969. Australia ratified the Convention on 31 October 1975, by which time it had been ratified by over eighty nations of the world. This brief account of the international post-war developments in the area of racial discrimination is enough to 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). Even were Australia not a party to the Convention, this would not necessarily exclude the topic as a part of its external affairs. It was contended on behalf of the Commonwealth that, quite apart from the Convention, Australia has an international obligation to suppress all forms of racial discrimination because respect for human dignity and fundamental rights, and thus the norm of non-discrimination on the grounds of race, is now part of customary international law, as both created and evidenced by state practice and as expounded by jurists and eminent publicists. There is, in my view, much to be said for this submission and for the conclusion that, the Convention apart, the subject of racial discrimination should be regarded as an important aspect of Australia’s external affairs, so that legislation much in the present form of the Racial Discrimination Act would be supported by power conferred by s 51(xxix). As with slavery and genocide, the failure of a nation to take steps to suppress racial discrimination has become of immediate relevance to its relations within the international community. … In the present cases it is not necessary to rely upon this aspect of the external affairs power since there exists a quite precise treaty obligation, on a subject of major importance in international relationships, which calls for domestic implementation within Australia. This in itself, without more, suffices to bring the Racial Discrimination Act within the terms of s 51(xxix). … 508

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Koowarta v Bjelke-Petersen cont. Gibbs CJ: 187 It is then necessary to consider whether ss 9 and 12 of the Act are laws with respect to external affairs and so within the power conferred on the Parliament by s 51(xxix) of the Constitution. … The challenged provisions, so far as we are concerned with them, operate entirely within Australia – indeed, entirely within one State. They deal with a matter which is purely domestic, in that they render unlawful an act done within Australia by one Australian to or in relation to another and taking effect only within Australia. The effect which, if valid, they have in the present case, viz the invalidation of a refusal to consent to the transfer of a Crown lease, could not be achieved by the Commonwealth Parliament under any other paragraph of s 51. It was submitted on behalf of the Commonwealth that ss 9 and 12 are laws with respect to external affairs because they give effect to Australia’s obligations under the Convention, which is an external 188 affair within s 51(xxix). In the alternative, a wider submission was advanced, namely that ss 9 and 12 give effect to an obligation imposed on Australia by the rules of customary international law and by the Charter of the United Nations to promote universal respect for, and observance of, human rights and fundamental freedoms, that failure to carry out that obligation could have affected Australia’s relations with other countries, and that the obligation was an external affair within s 51(xxix) … The expression “external affairs” is imprecise and indeed ambiguous. It might in one sense be understood as referring to matters or things geographically situated outside Australia. The meanings of the words “external” and “affairs”, considered separately, are wide enough to support that interpretation. However, if the phrase is considered as a whole, its natural meaning is matters concerning other countries. … 189 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 … 190 … However, it is clear that the external affairs power is not limited to the making of laws with respect to matters geographically external to Australia. Such an interpretation of the paragraph is quite unsupported by any judicial dictum and would be completely at variance with the decisions in R v Burgess; Ex parte Henry (1936) 55 CLR 608; R v Poole; Ex parte Henry [No 2] (1939) 61 CLR 634; R v Sharkey (1949) 79 CLR 121; and Airlines of NSW Pty Ltd v New South Wales [No 2] (1965) 113 CLR 54. There is nothing in the words by which the power is conferred to suggest that the power should be limited to laws dealing with matters and things occurring outside Australia, for it is a power to make laws with respect to the peace, order and good government of the Commonwealth and that suggests that conduct within Australia may be included within the scope of the power. … 192 The crucial question in the case 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. … 198 … 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. Moreover, the power might be attracted not only by a formal agreement, such as a treaty, but also by an informal agreement: see R v Burgess; Ex parte Henry (1936) 55 CLR at 687. 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. … In other words, if s 51(xxix) empowers the Parliament to legislate to give effect to every international agreement which the executive may choose to make, 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. Of course it has been established, since the Engineers’ Case (1920) 28 CLR 129, that it is an error to read s 107 of the Constitution, which continues the powers of the Parliaments of the States, “as reserving any power from the Commonwealth that falls fairly within the explicit terms of 199 an [6.90]

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Koowarta v Bjelke-Petersen cont. express grant in s 51, as that grant is reasonably construed, unless that reservation is as explicitly stated” (1920) 28 CLR at 154. However, in determining the meaning and scope of a power conferred by s 51 it is necessary to have regard to the federal nature of the Constitution. “Accordingly, no single power should be construed in such a way as to give to the Commonwealth Parliament a universal power of legislation which would render absurd the assignment of particular carefully defined powers to that Parliament”: Bank of NSW v Commonwealth (1948) 76 CLR 1 at 184–185, per Latham CJ … 200 … No effective safeguard against the destruction of the federal character of the Constitution would be provided by accepting the suggestion of Evatt and McTiernan JJ in R v Burgess; Ex parte Henry (1936) 55 CLR at 687, that the power given by s 51(xxix) might not be attracted if “the entry into the convention was merely a device to procure for the Commonwealth an additional domestic jurisdiction.” It would be unlikely that an international agreement would be entered into as a mere device. It would not be enough to establish bad faith to show that the executive, when it made a treaty, was fully aware that the Parliament had no legislative power to deal with the subject-matter of the treaty except that which would arise under s 51(xxix) once the treaty was concluded. Suppose, for example, that the executive genuinely believed that working hours should be reduced (or increased), that Australia ought to join in an international agreement to that effect, and that it would be beneficial if, by entering into an agreement, the Parliament acquired a legislative competence it otherwise lacked. The entry into the agreement in those circumstances could hardly be described as a mere device, or as done in bad faith. The doctrine of bona fides would at best be a frail shield, and available in rare cases. If the “extreme view” is adopted, and the broadest possible interpretation is given to the words of s 51(xxix), that paragraph would mean that the power of the Commonwealth Parliament could be expanded by simple executive action … It is apparent that a narrower interpretation of s (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. I consider that a law which carries into effect the provisions of an international 201 agreement will only have the character of a law with respect to external affairs if the provisions to which it gives effect answer that description. … 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 matters 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. … 202 … There is no doubt that many countries of the world have, or profess, a deep concern that human rights and fundamental freedoms should be observed, and that racial discrimination should be eliminated, throughout the world. There is no need for me to refer to the international conventions and declarations in which that concern has been expressed. The fact that many nations are concerned that other nations should eliminate racial discrimination within their own boundaries does not mean that the domestic or internal affairs of any one country thereby become converted into international affairs. … 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 … 203 … For these reasons ss 9 and 12 of the Act were not within the legislative power conferred by s 51(xxix) and are invalid. As I take this view, I need not consider whether those sections of the Act carried out and gave effect to the provisions of the Convention. Section 9 does appear faithfully to pursue the purposes of the Convention. Section 12, as I have already indicated, goes further than s 9, but may nevertheless be regarded as an appropriate means adopted for the enforcement of the Convention, 510

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Koowarta v Bjelke-Petersen cont. and thus as satisfying the test suggested by Starke J in R v Burgess; Ex parte Henry (1936) 55 CLR 608 at 659–660. … 206 … [T]he external affairs power does not enable the Parliament to enact a law whose purpose is to give effect within Australia to an international obligation, unless the subject-matter of that obligation is an external affair. If Australia has an obligation under international law it can only be given effect within Australia in the manner for which the Constitution provides, ie, if the subject-matter is not within Commonwealth power, by a law of a State. … 207 … To understand the power as becoming available merely because Australia enters into an international agreement, or merely because a subject-matter excites international concern, would be to ignore the federal nature of the Constitution. It would be to allow the Commonwealth, under a power expressed to be with respect to external affairs, to enact a bill of rights entirely domestic in its effect – a bill of rights to which State legislation and administrative actions would be subject, but which would of course not necessarily have the same effect on Commonwealth legislation or administrative action. My rejection of so wide an interpretation [of s 51(xxix)] does not mean either that Australia is unable to fulfil her international obligations – that can be done by co-operative action between the Commonwealth and the States – or that the Parliament is unable, if such co-operation is not forthcoming, to protect the people of the Aboriginal race from discrimination – that can be done under the power conferred by s 51(xxvi).

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Notes&Questions

Mason, Murphy and Brennan JJ viewed the external affairs power as enabling the Commonwealth Parliament to legislate to implement treaty obligations. On the other hand, Gibbs CJ, Aickin and Wilson JJ adopted the view that a law which gave effect within Australia to an international agreement would only be a valid law under the external affairs power if the agreement was with respect to a matter which itself could be described as an external affair. Although Stephen J sided with Mason, Murphy and Brennan JJ in upholding the validity of the impugned provisions of the Racial Discrimination Act 1975 (Cth), he took the view that it was not enough that the challenged law gave effect to treaty obligations. He said (at 216–217): A treaty with another country, whether or not the result of a collusive agreement, 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 … scrutiny.

2.

3.

Is Stephen J’s test of “international concern” a useful approach to the interpretation of the external affairs power? In what way does it differ from the suggestion that, if a treaty is to be implemented under the external affairs power, it must not be a mere device for attracting legislative power (Koowarta (1982) 153 CLR 168 at 200 (Gibbs CJ), 216 (Stephen J), 231 (Mason J), 260 (Brennan J))? See also Winterton, “Limits to the Use of the “Treaty Power””, in Alston and Chiam (eds), Treaty-Making and Australia (Federation Press, Sydney, 1995), 29 at pp 30-32. It should be noted that the issue of whether the Racial Discrimination Act 1975 (Cth) implemented the International Convention on the Elimination of All Forms of Racial Discrimination was not challenged. The next case, the Tasmanian Dam Case, provided the opportunity for a differently constituted High Court to reconsider the ruling in Koowarta. In the intervening period between Koowarta and the Tasmanian Dam Case, two new judges had been appointed to the High Court – Justices Deane and Dawson. These new appointments were made to fill the vacancies created by the appointment of Justice Stephen to the office of Governor-General and by the death of Justice Aickin. [6.100]

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The Tasmanian Dam Case [6.110] Commonwealth v Tasmania (1983) 158 CLR 1 at 122–132, 97–102, 170–172 [The World Heritage Convention was adopted by the General Conference of the United Nations Educational, Scientific and Cultural Organization (UNESCO) on 16 November 1972. It was ratified by Australia on 22 August 1974 and came into force on 17 December 1975. The Convention dealt with the protection of the cultural and natural heritage of the world. It contained, among others the following provisions: Article 4 Each State Party to this Convention recognizes 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. It will do all it can to this end, to the utmost of its own resources and, where appropriate, with any international assistance and co-operation, in particular, financial, artistic, scientific and technical, which it may be able to obtain. Article 5 To ensure that effective and active measures are taken for the protection, conservation and presentation of the cultural and natural heritage situated on its territory, each State Party to this Convention shall endeavour, in so far as possible, and as appropriate for each country: (a) to adopt a general policy which aims to give the cultural and natural heritage a function in the life of the community and to integrate the protection of that heritage into comprehensive planning programmes; (b) to set up within its territories, where such services do not exist, one or more services for the protection, conservation and presentation of the cultural and natural heritage with an appropriate staff and possessing the means to discharge their functions; (c) to develop scientific and technical studies and research and to work out such operating methods as will make the State capable of counteracting the dangers that threaten its cultural or natural heritage; (d) to take the appropriate legal, scientific, technical, administrative and financial measures necessary for the identification, protection, conservation, presentation and rehabilitation of this heritage; and (e) to foster the establishment or development of national or regional centres for training in the protection, conservation and presentation of the cultural and natural heritage and to encourage scientific research in this field. 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 recognize that such heritage constitutes a world heritage for whose protection it is the duty of the international community as a whole to co-operate. 2. The States Parties undertake, in accordance with the provisions of this Convention, to give their help in the identification, protection, conservation and preservation of the cultural and natural heritage referred to in paragraphs 2 and 4 of Article 11 if the States on whose territory it is situated so request. 3. Each State Party to this Convention undertakes not to take any deliberate measures which might damage directly or indirectly the cultural and natural heritage referred to in Articles 1 and 2 situated on the territory of other States Parties to this Convention. Article 7 For the purpose of this Convention, international protection of the world cultural and natural heritage shall be understood to mean the establishment of a system of international co-operation and assistance designed to support States Parties to the Convention in their efforts to conserve and identify that heritage. Article 34 contained a “federal clause” and provided as follows: 512

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The Tasmanian Dam Case cont. The following provisions shall apply to those States Parties to this Convention which have a federal or non-unitary constitutional system: (a) with regard to the provisions of this Convention, the implementation of which comes 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; (b) with regard to the provisions of this Convention, the implementation of which comes under the legal jurisdiction of individual constituent States, countries provinces or cantons that are not obliged by the constitutional system of the federation to take legislative measures, the federal government shall inform the competent authorities of such States, countries, provinces or cantons of the said provisions, with its recommendation for their adoption. In 1981, the Commonwealth, in accordance with a request from the Premier of Tasmania, submitted the nomination of three national parks located in the west and south-west of Tasmania to the World Heritage Committee. In 1982, the Committee entered these parks in the World Heritage List. In the meantime, however, the Tasmanian Parliament passed a law authorizing the construction of a dam on the Gordon River, downstream of its junction with the Franklin River in south-western Tasmania. In conformity with the policy of the Commonwealth government to stop the construction of the dam, the Commonwealth Parliament enacted the World Heritage Properties Conservation Act 1983 (Cth). The main provisions of the Act of relevance to the arguments based on the external affairs power were ss 6 and 9: Section 6 reads as follows: (1) A Proclamation may be made under sub-section (3) in relation to identified property that is not in any State. (2) A Proclamation may also 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 provided for in paragraph 2 of the Article, 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 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; (e) the property is part of the heritage distinctive of the Australian nation – (i) by reason of its aesthetic, historic, scientific or social significance; or (ii) by reason of its international or national renown, and by reason of the lack or inadequacy of any other available means for its protection or conservation, it is peculiarly appropriate that measures for the [6.110]

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The Tasmanian Dam Case cont. protection or conservation of the property be taken by the Parliament and Government of the Commonwealth as the national parliament and government of Australia. (3) Where the Governor-General is satisfied that any property in respect of which a Proclamation may be made under this sub-section 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. … Section 9 reads as follows: (1) Except with the consent in writing of the Minister, it is unlawful for a person, whether himself or by his servant or agent – (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. (2) Except with the consent in writing of the Minister, it is unlawful for a person, whether himself or by his servant or agent, to do any act, not being an act the doing of which is unlawful by virtue of sub-section (1), that damages or destroys any property to which this section applies. (3) If an application of sub-sections (1) and (2) of this section in relation to particular property, being property that is relevant property by virtue of a particular paragraph or particular paragraphs of sub-section 6(2), would be within the powers of the Parliament if the property were relevant property by virtue only of that paragraph or those paragraphs, it is intended that sub-sections (1) and (2) of this section should have that application in relation to the property whether or not the property is also relevant property by virtue of another paragraph or other paragraphs of sub-section 6(2). (4) In sub-section (3), “relevant property” means property in respect of which a Proclamation may, by virtue of sub-section 6(2), be made under sub-section 6(3). To support the validity of the World Heritage Properties Conservation Act 1983 (Cth), the Commonwealth, apart from relying on s 51(xxix), also invoked the corporations power in s 51(xx), the special race laws power in s 51(xxvi) and the implied nationhood power. We are concerned here with the external affairs power argument.] Mason J: 122 If we take the decision [in Koowarta (1982) 153 CLR 168] 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 authorizes 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. The 514

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The Tasmanian Dam Case cont. question then is: what 123 is meant by the requirement that the subject-matter of a treaty should be of international concern or of especial concern to the relationship between Australia and the other parties? We need to know the answer to this question in order to decide whether it is an additional element in the exercise of the power and, if so, whether the requirement is satisfied in the present case. Despite the argument presented by Tasmania, the notion that the subject-matter of a treaty must be of international concern remains an elusive concept. In an endeavour to give content to the concept and at the same time to give expression to essential qualifications on the exercise of the power Mr Ellicott, for Tasmania, proposes three broad tests which must be satisfied in a law enacted under s 51(xxix). They are: 1.

Does the enactment of the law constitute an implementation by Australia of an obligation imposed on it by the Convention? Conversely, would Australia be in breach of an obligation imposed on it by the Convention, if it failed to enact the law or some law substantially to the same effect?

2.

Does the subject-matter of the Convention to which the law gives effect in the manner in which it is treated, involve in some way a relationship with other countries or with persons or things outside Australia?

3.

Is the subject-matter of the Convention to which the law gives effect, something which, although it relates to domestic activity, affects relations between Australia and another or other countries? 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. As I pointed out in Koowarta (1982) 153 CLR at 224–227, the treaty itself is a matter of external affairs as is its implementation by domestic legislation. The insistence in Burgess (1936) 55 CLR 608 that the legislation carry into effect provisions of the convention in accordance with the obligation which that convention imposed on Australia is not inconsistent with what I have said, though it does raise a question as to the scope of the legislative power in its application to a treaty, a matter to be discussed later. At this point it is sufficient to say that 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 124 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. The recurring problem which the other tests pose is that of enunciating an instructive definition or description of the requisite subject-matter or of the manner in which it is treated, one which will distinguish that which affects Australia’s relations with other countries from that which does not. … There are so many examples of the common pursuit of humanitarian, cultural and idealistic objectives that we cannot treat subjects of this kind as lacking the requisite international character to support a treaty or convention which will attract the exercise of the power. Indeed, the lesson to be learned from this experience is that there are virtually no limits to the topics which may hereafter become the subject of international co-operation and international treaties or conventions. 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 125 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 co-operation resulting in a convention insisting on compliance with uniform safety standards may well benefit all countries. The [6.110]

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The Tasmanian Dam Case cont. 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 co-operation or an international convention it is necessarily international in character – the existence of co-operation 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, as I observed in Koowarta (1982) 153 CLR at 229, 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 126 government and upon the expression of the will of Parliament in giving legislative ratification to the treaty or convention. The argument in support of the three tests proposed by Tasmania is largely based on implications to be drawn from the federal nature of the Constitution, and on predictions that “the federal balance” will be disturbed, indeed shattered, if the validity of the Commonwealth legislation is upheld. … In the argument which is presented in this case the expression “the federal balance” seems to mean, not so much the distribution of legislative powers effected by the Constitution, as the content, as it was understood in 1900, of the legislative powers thus distributed. The argument has a special relevance to s 51(xxix). Koowarta makes the point that the content of the external affairs power has expanded greatly in recent times along with the increase in the number of international conventions and the extended range of matters with which they deal (1982) 153 CLR 168 at 216–217, 229. The same point had been made earlier by Latham CJ in Burgess (1936) 55 CLR 168 at 640–641. It is this development “that promises to give the Commonwealth an entrée into new legislative fields”: see Koowarta (1982) 153 CLR at 228. 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 obligations would be infrequent and limited in scope. … 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 127 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. This in one sense is by way of preliminary observation, for the correct approach to the construction of a legislative power in its application to changing circumstances is well established. … [I]t 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 516

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The Tasmanian Dam Case cont. 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. This circumstance is often overlooked by those who are preoccupied with the impact that the exercise of the power may have in areas of legislation traditionally regarded by the States as their own. The consequences to Australia resulting from an inadequate Commonwealth legislative power with respect to external affairs – which represents the price to be paid for the preservation to the States of these areas of legislation – were emphasized in Koowarta (1982) 153 CLR at 229–230, 241. In the ultimate analysis the comprehensive legal answer to the general considerations which Tasmania invokes to sustain its approach to the interpretation of the constitutional power is that a grant of power in s 51 is to be construed with all the generality that 128 the words used admit … In accordance with this principle it is well settled that it is wrong to construe a constitutional power by reference to (1) an assumption that there is some content reserved to the States (Re Foreman & Sons Pty Ltd; Uther v Federal Commissioner of Taxation (1947) 74 CLR 508 at 530); and (2) imaginary abuses of legislative power (Amalgamated Society of Engineers v Adelaide Steamship Co Ltd (the Engineers’ Case) (1920) 28 CLR 129 at 150–151). The only relevant implication that can be gleaned from the Constitution, and this is called in aid independently by Tasmania, is that the Commonwealth cannot, in the exercise of its legislative powers, enact a law which discriminates against or “singles out” a State or imposes some special burden or disability upon a State or inhibits or impairs the continued existence of a State or its capacity, to function. … So much and no more can be distilled from the federal nature of the Constitution and ritual invocations of “the federal balance”. As Social Welfare Union demonstrates, a head of power under s 51 should be given its natural meaning; the exercise of the power is then subject to the express and implied prohibitions in the Constitution, including the implied prohibition enunciated in Melbourne Corporation. That the power conferred by s 51(xxix) is subject to implied constitutional prohibitions was generally recognized in Koowarta (1982) 153 CLR esp at 216, 225. No doubt the first of the three tests suggested by Tasmania is relevant in examining the question whether a particular law is a valid exercise of the power, but it cannot be right to say that only a law which implements an obligation imposed on Australia by a convention or treaty is such a valid exercise. Certainly, in the cases there are many statements to be found in which it is asserted that the power authorizes the implementation of an obligation imposed on Australia by a convention or treaty. However, speaking generally, these statements were made with reference to a treaty or convention that imposed obligations and they cannot reasonably be construed as expressing the negative, namely, that the exercise of the power is confined to the implementation of obligations: see, eg, the judgments of members of the Court in Burgess (1936) 55 CLR 608 and Koowarta. 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 130 affairs, and so much is now accepted, it is very difficult to see why a law made under s 51(xxix), ie, 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, eg, a treaty by which another country undertakes to provide technological and other benefits in connexion 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? In Airlines of NSW Pty Ltd v New South Wales (No 2) (1965) 113 CLR 54 at 86, Barwick CJ said that: … where a law is to be justified under the external affairs power by reference to the existence of a treaty or convention, the limits of the exercise of the power will be set by the terms of that treaty or convention, that is to say, the Commonwealth will be limited to making laws to perform the obligations, or to secure the benefits which the treaty imposes or confers on Australia. Whilst the choice of the legislative means by which the treaty or convention shall be implemented is for the legislative authority, it is for this Court to determine whether particular provisions, when challenged, are appropriate and adapted to that end. [6.110]

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The Tasmanian Dam Case cont. The same view was expressed by Starke, Evatt and McTiernan JJ in Burgess (1936) 55 CLR 168 at 658, 688 and Menzies J in Airlines of NSW (No 2) (1965) 113 CLR (1965) 113 CLR at 141. In my opinion it is correct: see also Koowarta (1982) 153 CLR at 233, 258–261 … 131 … The extent of the Parliament’s power to legislate so as to carry into effect a treaty will, of course, depend on the nature of the particular treaty, whether its provisions are declaratory of international law, whether they impose obligations or provide benefits and, if so, what the nature of those obligations or benefits are, and whether they are specific or general or involve significant elements of discretion and value judgment on the part of the contracting parties. 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 132 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. Gibbs CJ: 97 Although the scope of the power conferred by s 51(xxix) has recently been discussed in Koowarta v Bjelke-Petersen (1982) 153 CLR 168, it would be altogether too optimistic to suppose that the Court has reached a complete solution of the very real difficulties which that paragraph creates. The words of the paragraph are ambiguous, but I would respectfully adopt as accurate the paraphrase suggested by Stephen J in Koowarta (at 211): “… such of the public business of the national government as relates to other nations or other things or circumstances outside Australia.” That paraphrase of the words of the paragraph does not completely define the limits of the power. However, three propositions may be taken as settled by the authorities so far decided on s 51(xxix). The power given by that paragraph is an independent one and is not merely ancillary to other powers possessed by the Parliament; it extends to enable the Parliament to legislate with regard to matters and things done entirely within Australia; and its exercise is subject to the restrictions imposed by the Constitution, whether expressly or by implication. Those propositions, however, do not go far in providing an answer to the questions in the present case. One important question which now arises is the same as that which on one view arose in Koowarta, namely, does the power enable the Parliament to legislate to give effect to any treaty to which Australia is a party, even though the law deals with matters which occur, and can occur only, within Australia, and even though the performance of the treaty in its relevant aspects involves no reciprocity or mutuality of relationship between Australia and the other parties to the treaty? Put in another way, this question is “whether this power to implement treaty obligations is subject to any and if so what overriding qualifications derived from the federal nature of our Constitution”: per Stephen J in Koowarta (at 212). Another important question which did not arise in Koowarta, but which produced disagreement in R v Burgess; Ex parte Henry (1936) 55 CLR 608, is whether legislation, to be valid, must be in conformity with the treaty which it professes to be executing or whether the fact that a treaty has been made enables the Parliament to legislate generally with regard to the subject-matter with which the treaty deals. It is clear that in some circumstances the Parliament can pass a 98 law to give effect within Australia to an international convention to which Australia is a party. It is equally clear that the existence of an international convention is not a necessary condition of the exercise of the power given by s 51(xxix). If a matter can properly be said to relate to other nations, or to things external to Australia, the Parliament may pass laws with respect to it, even though it is not regulated by any international agreement. However, in the present case, it is suggested that the power is attracted by the Convention, and possibly also by the recommendation of UNESCO, and there are no other features of the case that make it necessary to discuss in what circumstances the power may be exercised when no international agreement has been reached. Four members of the Court in Koowarta rejected the notion that s 51(xxix) empowers the Parliament to give effect in Australia to any international agreement to which Australia is a party, whatever its subject-matter and whatever the circumstances. In that case, although Stephen, Mason, Murphy and 518

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The Tasmanian Dam Case cont. Brennan JJ joined in holding the challenged legislation to be valid, Stephen J differed from the other members of the majority on this question. … 99 … He held that a treaty will attract the power only if it deals with a matter of international rather than of merely domestic concern, and that “it will not be enough that the challenged law gives effect to treaty obligations” (at 216). … The federal nature of the Constitution requires that some limits be imposed on the power to implement international obligations conferred by s (xxix), and that was, I consider, the basis of the 100 judgment of Stephen J in Koowarta. The external affairs power differs from the other powers conferred by s 51 in its capacity for almost unlimited expansion. … [T]here is 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. Whether Australia enters into any particular international agreement is entirely a matter for decision by the executive. The division of powers between the Commonwealth and the States which the Constitution effects could be rendered quite meaningless if the federal government could, by entering into treaties with foreign governments on matters of domestic concern, enlarge the legislative powers of the Parliament so that they embraced literally all fields of activity. This result could follow even though all the treaties were entered into in good faith, ie, not solely as a device for the purpose of attracting legislative power. 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”: Bank of NSW v Commonwealth (1948) 76 CLR 1 at 184–185, which I cited in Koowarta (1982) 153 CLR at 199. In this respect, in my opinion, my views, and those of Wilson and Aickin JJ, were in substance shared by Stephen J, although they led him to suggest a different test. It is not altogether clear what Stephen J meant 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 101 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. The key to the understanding of his judgment seems to me to lie in a passage (1982) 153 CLR at 217–218, in which he drew an analogy with the defence power. He cited a passage from Andrews v Howell (1941) 65 CLR 255 at 278 where Dixon J said that whether the defence power will suffice to authorize a given measure “will depend upon the nature and dimensions of the conflict that calls it forth, upon the actual and apprehended dangers, exigencies and course of the war, and upon the matters that are incident thereto”. Then Stephen J went on (1982) 153 CLR at 217: It will be open to the Court, in the case of a challenged exercise of the external affairs power, to adopt an analogous approach, testing the validity of the challenged law by reference to its connexion with international subject-matter [and] with the external affairs of the nation. Although the words of this sentence are a little obscure they suggest (as did some of the remarks of Brennan J) that the question is one of degree. 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”: Andrews v Howell (1941) 65 CLR 255 at 278. The Convention, and the recommendation, in their relevant aspects, and as applicable to Australia, deal with matters entirely domestic – matters which contemplate action within Australia, which [6.110]

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The Tasmanian Dam Case cont. 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, eg, 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 102 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 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. If one nation allows its own natural heritage (and no other) to be damaged, it is not in the least probable that other nations will act similarly in reprisal, or that the peace and security of the world will be disturbed – in this respect, damage to the heritage stands in clear contrast to such practices as racial discrimination: cf Koowarta (1982) 153 CLR at 230, per Mason J. The learned Solicitor-General referred us to some earlier treaties which dealt with the protection of cultural property, animals and national parks in certain limited circumstances, but none deals with the protection of the heritage generally. It cannot be said that the rules of customary international law cast any obligation on a nation to preserve the heritage within its own boundaries. Although it appears that the subject has been regarded as fit for international action, that action has fallen short of creating definite and binding national obligations. The question whether the subject-matter of the Convention is one of international concern within the test propounded by Stephen J is one of some difficulty, because, since the external affairs power, like the defence power, “applies to authorize measures only to meet facts” (cf Australian Textiles Pty Ltd v Commonwealth (1945) 71 CLR 161 at 181), the Court must form its own impression of the facts, in part on the basis of judicial notice. In the present case 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; and of course the recommendation does not purport to do so. 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 and the recommendation deal, lead me to the conclusion that the external affairs power has not been attracted in the present case. Murphy J: 170 External affairs power: Constitution, s 51(xxix) The power to make laws for the peace, order and good government of the Commonwealth with respect to external affairs authorizes the Parliament to make laws with respect to external affairs which govern conduct, in as well as outside, Australia. The core of Tasmania’s case was that the construction of the dam and the regulation of the south-west area of Tasmania were purely domestic or internal affairs of the State. However, it is elementary that Australia’s external affairs may be also internal affairs (see Burgess (1936) 55 CLR 608; New South Wales v Commonwealth (“the Sea and Submerged Lands Case”) (1975) 135 CLR 337 and Koowarta); examples are control of traffic in drugs of dependence, diplomatic immunity, preservation of endangered species and preservation of human rights. The circumstances which bring a law within the power have not been stated exhaustively. It was recognized in Burgess, and is even clearer now, that along with other countries, Australia’s domestic affairs are becoming more and more involved with those of humanity generally in its various political entities and groups. Increasingly, use of the external affairs power will not be exceptional or extraordinary but a regular way in which Australia will harmonize its internal order with the world order. The Constitution in its references to external affairs (s 51(xxix)) and to matters arising under treaties or affecting consuls or representatives of other countries (s 75) recognizes that while most Australians are residents of States as well as of the Commonwealth, they are also part of humanity. Under the Constitution Parliament has the authority to take Australia into the “one world”, sharing its responsibilities as well as its cultural and natural heritage. The power extends to the execution of treaties by discharging obligations or obtaining benefits, but it is not restricted to treaty implementation. The power would be available for example where, without any treaty, Australia wished to assist in an overseas famine. No doubt the Parliament could authorize acquisition of food in Australia (albeit on just terms, in accordance with s 51(xxxi)) for relief of the 520

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The Tasmanian Dam Case cont. famine and could legislate to prevent hoarding and profiteering in regard to the food remaining in Australia. Again, suppose that in the next few decades, because of the continuing 171 rapid depletion of the world’s forests and its effect on the rest of the biosphere, the survival of all living creatures becomes endangered. This is not a fanciful supposition (see The Global 2000 Report to the President of the United States (1980)). Suppose the United Nations were to request all nations to do whatever they could to preserve the existing forests. Let us assume that no obligation was created (because firewood was essential for the immediate survival of people of some nations). I would have no doubt that the Australian Parliament could, under the external affairs power, comply with that request by legislating to prevent the destruction of any forest, including any State forest. Again, without any treaty but in order to avert threatened military or economic sanctions by another nation, the Parliament could legislate on a subject which was otherwise outside power. Although external affairs are mostly concerned with our relationships with other nation States, they are not exclusively so concerned. There may be circumstances where Australia’s relationship with persons or groups who are not nation States, is part of external affairs. The existence of powerful transnational corporations, international trade unions and other groups who can affect Australia, means that Australia’s external affairs, as a matter of practicality, are not confined to relations with other nation States. In Koowarta (1982) 153 CLR 168, the majority considered that if the subject was one of international concern this brought it within the external affairs power. For the reasons I have given it is not necessary that the subject be one of concern demonstrated by the other nation States generally. For example, concern expressed by the world’s scientific community or a significant part of it over action or inaction in Australia might be enough to bring a matter within Australian external affairs. However, even if international concern is not always necessary, it is sufficient. External concern over human rights violations often extends internal affairs into external affairs. It is preferable that the circumstances in which a law is authorized by the external affairs power be stated in terms of what is sufficient, even if the categories overlap, rather than in exhaustive terms. To be a law with respect to external affairs it is sufficient that it: (a) implements any international law, or (b) implements any treaty or convention whether general (multilateral) or particular, or (c) implements any recommendation or request of the United Nations organization or subsidiary organizations such as the World Health Organization, the United Nations Education, Scientific and 172 Cultural Organization, the Food and Agriculture Organization or the International Labour Organization, or (d) fosters (or inhibits) relations between Australia or political entities, bodies or persons within Australia and other nation States, entities, groups or persons external to Australia, or (e) deals with circumstances or things outside Australia, or (f) deals with circumstances or things inside Australia of international concern. The fact that a subject becomes part of external affairs does not mean that the subject becomes, as it were, a separate, plenary head of legislative power. If the only basis upon which a subject becomes part of external affairs is a treaty, then the legislative power is confined to what may reasonably be regarded as appropriate for implementation of provisions of the treaty. This does not mean that either all of the provisions must be implemented or else none can be implemented. It does not mean that there must be any rigid adherence to the terms of the treaty. Again, if the subject of external affairs is some other circumstance, the legislative power will extend to laws which could reasonably be regarded as appropriate for dealing with that circumstance. The world’s cultural and natural heritage is, of its own nature, part of Australia’s external affairs. It is the heritage of Australians, as part of humanity, as well as the heritage of those where the various items happen to be. As soon as it is accepted that the Tasmanian wilderness area is part of world heritage, it follows that its preservation as well as being an internal affair, is part of Australia’s external affairs.

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Notes&Questions

[6.120]

1.

For an interesting account of how the case evolved and the political context, see L Zines, in HP Lee and George Winterton (eds), Australian Constitutional Landmarks (Cambridge University Press, Cambridge, 2003), pp 262-279.

2.

Do you agree with Professor Geoffrey Sawer when he said: “It is a tenable view of [the Tasmanian Dam Case] that as a matter of ratio decidendi it added nothing to the judicial construction of the Commonwealth’s external affairs power (Constitution ss 51(xxix) and 61) which was not already adumbrated in [R v Burgess; Ex parte Henry (1936) 55 CLR 608]”? (Sawer, “The External Affairs Power” (1984) 14 Federal Law Review 208 at 210–211.) In the Tasmanian Dam Case, Deane J simply accepted the views expressed by the majority of the court in the Burgess Case (at 255–259).

3.

What was the key difference between the view of the majority judges (Mason, Murphy, Brennan and Deane JJ) and that of the minority judges (Gibbs CJ, Wilson and Dawson JJ)?

4.

Zines’s The High Court and the Constitution (6th ed, 2015) ((6th ed, 2015), p 426) says: Because of the judgment of Brennan J the ratio of the Tasmanian Dam Case was confined to the power of the Commonwealth to implement legislatively an obligation under a treaty or customary international law.

Can the external affairs power be invoked to give effect to the recommendations of international bodies, or to implement a treaty which merely confers a benefit on Australia? Compare the views of Murphy and Deane JJ, Mason J and Brennan J, and consider also the joint judgment of Brennan CJ, Toohey, Gaudron, McHugh and Gummow JJ in Victoria v Commonwealth (the Industrial Relations Case) (1996) 187 CLR 416, which quoted (at 483) without disapproval the views of Evatt and McTiernan JJ in the Burgess Case regarding the implementation of recommendations and draft international conventions: see Zines’s The High Court and the Constitution (6th ed, 2015), pp 426–427. 5.

Can the external affairs power be extended to support a law calculated to discharge “reasonably apprehended obligations”? In Richardson v Forestry Commission (1988) 164 CLR 261, under the Lemonthyme and Southern Forests (Commission of Inquiry) Act 1987 (Cth), a commission was established to inquire whether or not any part of the Lemonthyme area and the Southern Forests of Tasmania was a world heritage area. The Act provided for the protection of these areas during an “interim protection period”. Section 16 rendered it unlawful, except with the consent of the Minister, to carry out various activities such as the cutting down or damaging of trees, excavation works, roads construction etc. The Act was enacted in reliance on the Convention for the Protection of the World Cultural and Natural Heritage. However, the areas concerned had not yet been identified as having world heritage values or included in the World Heritage List. Thus it was argued that the Convention did not impose any obligations on the Commonwealth with respect to these areas. Mason CJ, Wilson, Brennan, Dawson and Toohey JJ upheld the validity of the impugned legislation by reference to the external affairs power. Mason CJ and Brennan J said (at 295): 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 required to discharge a

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treaty obligation which is known to exist and also a law which is required to ensure the discharge of a treaty obligation which is reasonably apprehended to exist.

Deane and Gaudron JJ, who dissented, held that most of the prohibitions in s 16 were not capable of being reasonably considered to be appropriate and adapted to achieve the object of the convention as there was lacking “reasonable proportionality” between them and the designated object. 6.

Queensland v Commonwealth (the Queensland Rainforest Case) (1989) 167 CLR 232 concerned a challenge to the validity of a proclamation made under the World Heritage Properties Conservation Act 1983 (Cth) in relation to an area of rainforests in Queensland. Section 9 of the Act in its application to the area prohibited the doing of various acts without ministerial consent. The challenge to the validity of the proclamation was based largely on the ground that the property was not one “in respect of which a Proclamation may be made” under the Act and that inclusion of the property on the World Heritage List was not conclusive of its being part of Australia’s “natural heritage”. The court held that the inclusion of the property by the World Heritage Committee in the World Heritage List determined the existence of Australia’s international duty. The court said (at 242): [T]he listing of the property determines its status for the international community. There is no suggestion of bad faith either in the nomination or in the listing. As the inclusion of the property in the List is conclusive of its status in the eyes of the international community, it is conclusive of Australia’s international duty to protect and conserve it. Its inclusion is therefore conclusive of the constitutional support for the proclamation.

Limits to the use of s 51(xxix) [6.130] As the external affairs power is to be read “subject to this Constitution” it is subject

to the express limitations imposed by the Constitution, such as ss 92 and 116. It is also subject to implied limitations such as the separation of powers, the prohibition which invalidates Commonwealth legislation which discriminates against the States or prevents them from continuing to exist or function as such, and the implied political freedom of political communications and entitlements. There are judicial dicta which allude to the requirement that a treaty which is sought to be implemented under the external affairs power must be “genuine”. In Koowarta (1982) 153 CLR 168 at 260, Brennan J said: [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.

In theory, the proposition that the court would strike down a Commonwealth law if the Commonwealth had engaged in a “colourable attempt” to convert a matter of internal concern into an external affair is straightforward. In practice the effectiveness of this constraint on the use of the external affairs power is highly questionable. Gibbs CJ in Koowarta (at 200) said: “The doctrine of bona fides would at best be a frail shield, and available in rare cases.” See Winterton, “Limits to the Use of the “Treaty Power””, in Alston and Chiam (eds), Treaty-Making and Australia (Federation Press, Sydney, 1995), 29 at pp 30-32. A more effective limit on the use of the external affairs power is that there must be conformity of the Commonwealth law with the treaty. In the Tasmanian Dam Case ((1983) 158 CLR 1), Mason J said (at 131): [6.130]

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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 conformity issue was discussed by Deane J in the Tasmanian Dam Case. He elaborated on the issue in Richardson v Forestry Commission (1988) 164 CLR 261.

The Tasmanian Dam Case [6.135] Commonwealth v Tasmania (The Tasmanian Dam Case) (1983) 158 CLR 1 at 259–267 Deane J: 259 [A] law cannot properly be characterized 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 characterization. Thus, a law would not properly be characterized 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 (see Burgess’ Case; Airlines of NSW [No 2]) 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: Burgess’ Case (1936) 55 CLR at 687, 642 and 669; Koowarta (1982) 153 CLR at 231, 260. 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 (see Poole [No 2] (1939) 61 CLR at 644, 647–648, 655; Airlines of NSW [No 2] (1965) 113 CLR at 136), 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; cf per Starke J, speaking of the scope of the regulation-making power, in Burgess’ Case (1936) 55 CLR at 659–660, and in Poole [No 2] (1939) 61 CLR at 647, and per Barwick CJ in 260 Airlines of NSW [No 2] (1965) 113 CLR at 86. In that regard, the purpose which a law operating upon a domestic subject-matter is intended to achieve (eg, the carrying into effect of a treaty, the performance of an international obligation or the obtaining of an international benefit) is likely to assume an importance in deciding questions of characterization in relation to s 51(xxix) which is comparable to its importance in characterization in relation to the defence power (s 51(vi)) since it will commonly be that purpose which, in the factual context, is called in aid to provide the character of a law with respect to external affairs. As Dixon J observed in Burgess’ Case (1936) 55 CLR at 674: It is apparent that the 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. 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 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: cf, as 261 regards the defence power, R v Foster (1949) 79 524

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The Tasmanian Dam Case cont. CLR 43 at 84; Shrimpton v Commonwealth (1945) 69 CLR 613 at 623–624; Marcus Clark & Co Ltd v Commonwealth (1952) 87 CLR 177 at 215–216, 256. 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: cf R v Foster (at 96–97). It is not suggested, in the present case, that the Western Tasmania Wilderness National Parks (the Wilderness National Parks) and the construction of a dam across the Gordon River are, in themselves, matters of external affairs. A law with respect to them would not, without more, be even arguably within s 51(xxix). What is claimed, on behalf of the Commonwealth, to enliven the external affairs power and to support the specific statutory provisions is Australia’s participation in the Convention for the Protection of the World Cultural and Natural Heritage (the Convention) … It is common ground that Australia’s entry into it was within Commonwealth power. International agreements are commonly “not expressed with the precision of formal domestic documents as in English law”. The reasons for this include the different importance attributed to the strict text of agreements under different systems of law, the fact that such agreements are ordinarily “the result of compromise reached at the conference table” and the need to accommodate structural differences in official languages: see Wynes, Legislative, Executive and Judicial Powers in Australia (5th ed, 1976), p 299. It is, therefore, not surprising that, in a Convention to which more than seventy States are Parties and which was drawn up in no less than five “equally authoritative” official languages (Art 30), the terms in which the obligations of “the States Parties” are defined do not possess the degree of precision which is desirable in a private contract under the common 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 262 they be defined with the degree of precision necessary to establish a legally enforceable agreement under the common law. … 266 The overall effect of s 3(2), s 6(2) and (3), s 9(1) and s 13(1) is that all of the prohibitions contained in paragraphs (a) to (g) (inclusive) of s 9(1) 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. In these circumstances, there is a lack of any reasonable proportionality between the provisions of s 9(1)(a) to (g) and the purpose of 267 protecting and conserving the relevant property. Those paragraphs are not capable of being reasonably considered to be appropriate and adapted to achieving that purpose. Since it is the purpose of protecting and conserving the property and thereby complying with the obligations under the Convention (or achieving one of the other international objectives referred to in s 6(2)(a), (b), (c) and (d)) that is said to warrant characterization as a law with respect to external affairs, it follows that, in the absence of the necessary relationship with that purpose, paragraphs (a) to (g) (inclusive) of s 9(1) of the Act cannot be sustained by s 51(xxix). They are invalid. Section 9(1)(h) and s 9(2) are in a different category. Paragraph (h) of s 9(1) prohibits the doing, without the consent of the Minister, of an act which is prescribed for the purposes of the paragraph in relation to particular property to which Heritage Properties Conservation Act 1983 (Cth) s 9 applies. The power to prescribe such acts is vested in the Governor-General by s 21. It is not an arbitrary power and must be construed in its context. It is exercisable only in respect of property which has been prescribed by the Governor-General pursuant to s 6(3) upon his being satisfied that the property is being or is likely to be damaged or destroyed. In that context and in the context of s 6(2), the power to prescribe an act for the purposes of par (h) is limited by the purpose for which it exists, namely, the purpose of preventing or avoiding damage or further damage to or destruction of the particular property, and is exercisable only in relation to an act which could reasonably be considered to be a possible cause of, or a contributing factor to, such damage or further damage or destruction: see R v Toohey; Ex parte Northern Land Council (1981) 151 CLR 170 at 192–193, 202–204, 219, 263–264, 283. Section 9(2) [6.135]

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The Tasmanian Dam Case cont. provides that, except with the consent in writing of the Minister, it is unlawful for a person to do any act, not being an act the doing of which is unlawful by virtue of subs (1), that damages or destroys any property to which the section applies. Section 9(1)(h) and s 9(2) are, by reason of the provisions of s 15A of the Acts Interpretation Act 1901, severable from the invalid provisions of paragraphs (a) to (g) (inclusive) of s 9(1). Both s 9(2) and s 9(1)(h) are capable of being considered as appropriate and adapted to the purpose of discharging the international obligation under the Convention to protect or conserve the relevant property.

Richardson v Forestry Commission [6.140] Richardson v Forestry Commission (1988) 164 CLR 261 at 309–312 Deane J: 309 When the direct operation of a law is with respect to an external or international subject-matter, ordinary processes of characterization can be applied and the nature of the law as a law with respect to external affairs will be disclosed by its bare legal operation. A law authorizing the establishment of an overseas embassy and a law ratifying or approving an international treaty or the constitution of an international organization (see, eg, s 3 of Acts Nos 79, 80, 81, 82 and 83 of 1947 and s 2 of Act No 24 of 1947) are examples of a law with such direct operation. On the other hand, a law whose direct operation is solely with respect to a domestic subject-matter which is not of itself within the ambit of external affairs may, in some circumstances, properly be characterized as a law with respect to external affairs for the purposes of s 51(xxix) of the Constitution by reference to some identified purpose or object which its operation is designed to advance or achieve. The mere fact that there can be discerned some purpose or object, being a legitimate subject-matter of external 310 affairs, which the impugned law is designed to advance or achieve will not, of itself, suffice for such characterization. Such a purpose or object must pervade and explain the substantive operation of the impugned law to an extent that warrants characterization of the law as a law with respect to external affairs notwithstanding the fact that its bare legal operation is with respect to a domestic or completely internal subject-matter. At a later stage of this judgment, I examine this requirement in some detail. … It is for the Parliament and not for the court to decide what are the appropriate legislative provisions to achieve a desired result. On the other hand, nowhere is the role of the court as the ultimate custodian of the provisions of the Constitution more critical than in a case where challenged legislation is claimed to be within legislative competence on the ground that, notwithstanding that it does not directly operate with respect to a designated subject-matter of legislative power, its underlying purpose or object gives it the character of a law with respect to external affairs (s 51(xxix)) or defence: s 51(vi). In the context of the scope of contemporary international relations and of the nature of modern warfare, there are few domestic laws which could not arguably be seen as capable of affecting or bearing upon the country’s external affairs or defence. It would, however, be to ignore the constitutional context of the specific grants of legislative power contained in s (xxix) and (xxiv) of s 51 to hold that the fact that the economic, social and moral well-being of the Commonwealth and its citizens is conducive to international standing and prestige, to the domestic observance of fundamental human rights and other standards or objectives enshrined in international conventions and to an adequate defence establishment or capacity, means that the combined effect of those two sub-sections is effectively to confer general legislative powers on the Parliament with respect to the economic, social and moral well-being of the Commonwealth and its citizens, subject only to the proviso that it must be possible to identify, in the case of an impugned law, a relevant purpose of advancing or serving the nation’s external affairs or defence. More particularly, and closer to the present case, it would be to ignore the constitutional context of s 51(xxix) to hold that the mere legislative or administrative assertion of the existence of an underlying purpose of ensuring local observance of such international standards or objectives would suffice to impart the character of a law with 311 respect to external affairs to the legislative imposition of a Commonwealth regime of complete control or compulsory inactivity upon the whole or a significant part of a particular State. … 526

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Richardson v Forestry Commission cont. First, there must be identified a purpose or object, itself a legitimate subject of external affairs: eg the carrying into effect of a treaty, the performance of an international obligation or the obtaining of an international benefit. The reference to such a purpose or object is not, of course, to the subjective motives or purposes of the various members of the Parliament which enacted the law. It is a reference to the purpose or object of the law itself – that which it can be seen to be designed to serve or achieve. … Secondly, to repeat what has been said above, that purpose or object must pervade and explain the operation of the law to an extent that warrants the overall characterization of the law as one with respect to external affairs; it “must be seen, with ‘reasonable clearness’, upon consideration of its operation, to be ‘really … referable’ to and explicable by the purpose or object which is said to provide its character”: the Tasmanian Dam Case (1983) 158 CLR at 260. 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 operation of a law will not properly be seen as explained by the designated purpose or object unless it appears that that operation is capable of being reasonably considered to be appropriate and adapted to achieve it. Such a law will not be capable of being so seen unless it appears that there is “reasonable proportionality” between 312 that purpose or object and the means which the law adopts to pursue it. The reason for such a requirement was explained, again by Dixon J, in Burgess (1936) 55 CLR at 674 when his Honour commented that the nature of the external affairs power “necessitates a faithful pursuit of the purpose … before it can support the imposition upon citizens of duties and disabilities which otherwise would be outside the power of the Commonwealth”. His Honour added (1936) 55 CLR at 674–675 that “under colour of carrying out an external obligation the Commonwealth cannot undertake the general regulation of the subject-matter to which it relates”. It should be mentioned that, in the above formulation, I have stated the requirement relating to the impugned law being “appropriate and adapted” in less stringent terms (from the point of view of the Commonwealth) than those used in some previous judgments in this Court. In particular, in Airlines of New South Wales Pty Ltd v New South Wales (No 2) (1965) 113 CLR 54 at 86, Barwick CJ expressed the view that “it is for this Court to determine whether particular provisions, when challenged, are appropriate and adapted to” the particular “end”. In my view, it is not necessary for this Court to be persuaded that the particular provisions are, in fact, appropriate and adapted to the designated purpose or object. That is a matter for the Parliament. Obviously, the relevant requirement will be satisfied if the Court is so persuaded. As I have indicated however, it will, in my view, suffice if it appears to the Court that the relevant provisions are capable of being reasonably considered to be so appropriate and adapted: cf. per Starke J, Burgess (1936) 55 CLR 168 at 659–660. In a case where the direct operation of a law is with respect to purely domestic matters, it is, however, for the Commonwealth or those who would sustain the validity of the law by reference to ulterior object or purpose to point to material which makes it possible to say that the law can be characterized as a law with respect to external affairs by reason of that underlying purpose or object.

The Industrial Relations Act Case [6.150] Victoria v Commonwealth (1996) 187 CLR 416 at 486–572 [Proceedings were brought by Victoria, South Australia and Western Australia against the Commonwealth seeking declarations that certain provisions of the Industrial Relations Act 1988 (Cth) as amended by the Industrial Relations Reform Act 1993 (Cth) and the Industrial Relations Amendment Act (No 2) 1994 (Cth) were invalid. The impugned provisions provided for the imposition of, or imposed, obligations on employers with respect to matters such as minimum wages, equal pay, termination of employment, discrimination in employment and family leave. They also provided for collective bargaining and the right to strike.] Brennan CJ, Toohey, Gaudron, McHugh and Gummow JJ: 486 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 [6.150]

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The Industrial Relations Act Case cont. of aspiration (eg, “to promote 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 (3rd ed, 1992), p 250 (italics 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. But, as Judge Dillard observed in his opinion in the Appeal Relating to the Jurisdiction of the ICAO Council [1972] ICJ Rep 46 at 107n (cited by Brennan J in the Tasmanian Dam Case (1983) 158 CLR 1 at 226) the point at which ideals merge into legal obligations “constitutes one of the most delicate and difficult problems of law and especially so in the international arena where generally accepted objective criteria for determining the meaning of language in light of aroused expectations are more difficult to ascertain and apply than in domestic jurisdictions”. 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 487 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 (Airlines of NSW Pty Ltd v New South Wales [No 2] (1965) 13 CLR 54 at 136; the Tasmanian Dam Case (1983) 158 CLR 1 at 130–131, 172, 232, 259; Richardson v Forestry Commission (1988) 164 CLR 261 at 288–289, 303, 311–312, 336, 342). But that is not to say that an obligation imposed by treaty provides the outer limits of a law enacted to implement it. (See the statements collected by Gaudron J in Richardson v Forestry Commission (1988) 164 CLR 261 at 341–342.) 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 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. 528

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The Industrial Relations Act Case cont. 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 488 and the means adapted by the law to pursue it (Richardson v Forestry Commission (1988) 164 CLR 261 at 311–312). 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. 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. That appears to have been the view taken by Evatt and McTiernan JJ in R v Burgess; Ex parte Henry (1936) 55 CLR 608 at 688. But the Tasmanian Dam Case and later authorities confirm that this is not an essential requirement of validity. (See the Tasmanian Dam Case (1983) 158 CLR 1 at 172, 233–234, 268; Chu Kheng Lim v Minister for Immigration (1992) 176 CLR 1 at 75.) In the Tasmanian Dam Case, the Wilderness Regulations that were under attack implemented only in part the supporting Convention. They were nevertheless upheld. A criterion of validity expressed in R v Burgess; Ex parte Henry R v Burgess; Ex parte Henry (1936) 55 CLR 608 namely, whether the Regulations could fairly be regarded as “sufficiently stamped with the purpose of carrying out the terms of the convention”, R v Burgess; Ex parte Henry (1936) 55 CLR 608 at 688, was applied by Brennan J (Tasmanian Dam Case (1983) 158 CLR 1 at 234). Deane J dealt as follows with “partial” legislative implementation (Tasmanian Dam Case (1983) 158 CLR 1 at 268): It is competent for the Parliament, in a law under s 51(xxix), partly to carry a treaty into effect or partly to discharge treaty obligations leaving it to the States or to other Commonwealth legislative or executive action to carry into effect or discharge the outstanding provisions or obligations or leaving the outstanding provisions or obligations unimplemented or unperformed. On the other hand, if the relevant law “partially” implements the treaty in the sense that it contains provisions which are consistent with the terms of the treaty and also contains significant provisions which are inconsistent with those terms, it would be extremely unlikely that the law could properly be characterised as a law with respect to external affairs on the basis that it was capable of being reasonably considered to be appropriate and adapted to giving effect to the treaty. 489 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. Dawson J: 571 In the Tasmanian Dam Case (1983) 158 CLR 1 at 259 Deane J formulated a test for laws which are reliant for validity upon the external affairs power. He said that “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”. With respect, I must confess that those somewhat complicated words mean no more to me than that, where a treaty is relied upon, the law must give effect to the treaty. Where the terms of a treaty are little more than exhortion or aspiration, as is not uncommon nowadays, the requirement that a law give effect to the treaty is hardly confining. And, no doubt, as this case shows, the law may give effect to the treaty partially or as a whole. But the real reason why the requirement represents no real limit 572 upon the external affairs power is that the matters which may be the subject of a treaty are virtually unlimited. However, Deane J regarded the external affairs power as purposive. … [6.150]

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The Industrial Relations Act Case cont. The external affairs power is not purposive. As I pointed out in Richardson (1988) 164 CLR 261 at 325–326 it is not a power to make laws for the purpose of cementing international relations or achieving international goodwill or even for implementing treaties. It is a power to make laws with respect to particular matters, namely, external affairs, and the subject matter of a law either answers that description or it does not. A purposive power is different. Taking the defence power, which is truly purposive, it is possible to ask whether a law is for the purpose of defence and to take the view that the disproportion of the law to the achievement of that purpose suggests that it is not a law for that purpose.… It is not possible to ask whether a law is for the purpose of external affairs. Either it falls within that description or it does not and whether it does or does not is to be determined by reference to the acts, facts, matters or things upon which it operates. The question to be asked is not, as in the case of a purposive power, what the law is for, but what it operates upon. The concept of proportionality has no useful part to play in answering that question. Notwithstanding that I find nothing in the reasons of the majority of these cases which causes me to doubt the views which I have expressed above and in previous cases, I nevertheless think that I should adhere to the course which I adopted in Richardson. There I said (Richardson (1988) 164 CLR 261 at 322. See also O’Toole v Charles David Pty Ltd (1991) 171 CLR 232 at 267, per Brennan J): Precedent must, however, have a part to play, even in the interpretation of a constitution. Considerations of practicality make it necessary that the law should, as far as possible, take a consistent course. The constant re-examination of concluded questions is incompatible with that aim. That is why this Court has adopted the practice of requiring leave to be granted before it will allow a previous decision to be re-argued: Evda Nominees Pty Ltd v Victoria (1984) 154 CLR 311. The parties in the present case did not seek to question the decision in the Tasmanian Dam Case. In these circumstances, and having made my own view clear, it is, I think, proper to proceed upon the same basis as did the argument in this case and to assume the authority of that decision. The parties in this case, as in Richardson, did not seek to contest the authority of the Tasmanian Dam Case and, proceeding upon the basis of that decision, I agree with the orders proposed by the majority. [Div 1 of Pt VIA of the impugned Act empowered the Industrial Relations Commission (IRC) to make orders setting minimum wages “upon receipt of an application in that behalf either from an employee included in the group to be covered by the order, or from a trade union whose rules entitle it to represent the industrial interests of such employees”. Other provisions regulated the exercise of this power conferred on the IRC. Division 1 sought to give effect to the ILO Minimum Wage Fixing Conventions 1970. The Court held that the challenged provisions could reasonably be considered to be appropriate and adapted to the implementation of the Convention. The object of Div 3 was to “give effect or to give further effect to the Termination of Employment Convention and to the Termination of Employment Recommendation 1982, also known as Recommendation No 166 adopted by the General Conference of the ILO on 22 June 1982” (at 512). The Court upheld the validity of the challenged provisions by reference to the external affairs power, except those provisions which included a “harsh, unjust or unreasonable” test as an additional ground of unlawful termination, which were found to have gone beyond the terms of the Convention but could be severed. Provisions in Div 2 relating to parental leave, which sought to give effect to the Workers with Family Responsibilities Convention 1981 and the Workers with Family Responsibilities Recommendation 1981, were supported by the external affairs power. Section 170DF, which sought to give effect to the Discrimination (Employment and Occupation) Convention 1958, was held to be valid, except for the reference in s 170DF(1)(f) to “mental disability” as a proscribed ground. The Court did not give an answer on the validity of this aspect of s 170DF(1)(f), as the issue was not fully canvassed at the hearing. The Court held that Div 2 of Pt VIA validly gave effect to four Conventions dealing with anti-discrimination and two other instruments: the Equal Remuneration Recommendation 1951 530

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The Industrial Relations Act Case cont. (Recommendation No 90) and the Discrimination (Employment and Occupation) Recommendation 1958 (Recommendation No 111). The Court highlighted s 170BC(3) in which the power of the IRC to make an order was conditional upon the requirement that the order “can reasonably be regarded as appropriate and adapted to giving effect to” one or more of the other four Conventions (s 170BC(3)(b)(i)) or the two Recommendations (s 170BC(3)(b)(ii)). It is instructive to note the following words of the Court (at 509): 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.]

[6.160]

1.

2.

3.

4.

5.

Notes&Questions

In Richardson v Forestry CommissionRichardson v Forestry Commission, the High Court held that legislative measures providing for interim protection to prevent the destruction of an area pending the determination of its status as a world heritage area could be regarded as action which could “reasonably be considered appropriate and adapted” to the attainment of the object of the convention, namely the protection of the heritage: (1988) 164 CLR 261 at 295 (per Mason CJ and Brennan J). For a discussion of the conformity issue, see Zines’s The High Court and the Constitution (6th ed, 2015), pp 430–436; HP Lee, “The High Court and the External Affairs Power”, in Lee and Winterton (1992), pp 82-84. In applying the test of conformity with the convention, Mason and Murphy JJ were prepared to uphold the validity of the whole of s 9 of the World Heritage Properties Conservation Act 1983 while Brennan and Deane JJ were only prepared to uphold s 9(1)(h). Is there any significant difference between a test of whether the law is “appropriate and adapted” to the object of the international treaty and one which requires that “the law must be capable of being reasonably considered to be appropriate and adapted” to the designated object? The majority judgment in Industrial Relations Act Case (1996) 187 CLR 416 states (at 488) that, if a law is to be valid on the basis that it gives effect to an international norm, it must “select means which are reasonably capable of being considered appropriate and adapted to achieving the purpose or object of giving effect to the treaty.” Greg Taylor, Characterisation in Federations: Six Countries Compared (Springer, Heidelberg, 2006) (at p 22) suggests that “it is probably [the incidental] aspect of the federal power over external affairs which permits federal legislation which does not directly operate on external affairs, but which carries out, within Australia, Australia’s international obligations.” Is this a plausible explanation of the requirement stated by the majority? [6.160]

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6.

There is a degree of controversy over that part of the joint judgment of Brennan CJ, Toohey, Gaudron, McHugh and Gummow JJ where they quoted the following passages of Evatt and McTiernan JJ in R v Burgess; Ex parte Henry (1936) 55 CLR 608: 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 Organization or of other international recommendations or requests upon other subject matters of concern to Australia as a member of the family of nations. (at 687) [A] consequence of the closer connection between the nations of the world (which has been partly brought about by the modern revolutions in communication) and of the recognition by the nations of a common interest in many matters affecting the social welfare of their peoples and of the necessity of co-operation among them in dealing with such matters, that it is 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. (at 680–681)

Is it accurate to assert that the Court in the Industrial Relations Act Case was giving judicial endorsement to the proposition that the implementation of international recommendations would suffice to provide a connection to the external affairs power? Zines’s The High Court and the Constitution (6th ed, 2015), p 427, points to “some ambiguity” in the joint judgment in the discussion of the legislative provisions on equal remuneration, which were based in part on recommendations of the ILO: see (5th ed, 2008), p 387. Thomas v Mowbray (2007) 233 CLR 307 upheld Division 104 of the Criminal Code (Cth), which provided for the making of control orders against individual in certain circumstances connected to the prevention of terrorist acts, principally by reference to the defence power. However, Gleeson CJ agreed (at 324 [6])with Gummow and Crennan JJ that the impugned legislation was also supported by the external affairs power. Gummow and Crennan JJ said: “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” (at 364 [151]). They also referred to Gleeson CJ’s s remarks in XYZ v Commonwealth (2006) 227 CLR 532 (at 543 [18]) approving the proposition that the external affairs power “at least includes power to make laws in respect to matters affecting Australia’s relations with other countries” (at 364 [151]). Kirby J, in lone dissent, rejected the invocation of the external affairs power to support the impugned law (at 409–411 [290]–[294]).

7.

Reform of the power? [6.170] There have been a number of calls for the external affairs power to be amended.

Dr Colin Howard has suggested that s 51(xxix) should be amended by adding after the words “external affairs” the following: … provided that no such law shall apply within the territory of a State unless (a) the Parliament has power to make that law otherwise than under this sub-section; or (b) the law is made at the request or with the consent of the State; or (c) the law relates to the diplomatic representation of the Commonwealth in other countries or the diplomatic representation of other countries in Australia.

(See C Howard, “Amending the External Affairs Power”, in Upholding the Australian Constitution, Vol 5, Proceedings of the Fifth Conference of the Samuel Griffith Society, (1955), pp 1-16 and critical commentaries by Professor George Winterton (pp 17-46) and Professor 532

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Michael Coper (pp 47-69). See also the Constitution Alteration (External Affairs) Bill 1984 (Cth), introduced in the Senate on 12 September 1984.) Professor George Winterton has argued that the scope of the external affairs power should not be reduced: Winterton, “Limits to the Use of the “Treaty Power””, in Alston and Chiam (1995), pp 29-51. He adds (pp 50-51): [D]isquiet regarding State autonomy focuses more on the potential of the power than its actual exercise, and the Commonwealth’s ability to conduct Australia’s foreign relations must not be impaired, as it probably would be if some treaties could be implemented only by the States. Political realities significantly constrain the exercise of the external affairs power, especially its treaty-implementation aspect.

The Australian Constitutional Commission in its Final Report of the Constitutional Commission (1988, Vol 2), p 731 recommended that: (i)

No alteration be made to s 51(xxix) of the Constitution.

(ii)

There should be established by the Premiers’ Conference an Australian Treaties Council with the composition and functions recommended by the Australian Constitutional Convention.

(iii)

The Commonwealth should consider improvement in the existing procedures for Federal and State consultation on treaties in the light of comments made by some State Governments and the recommendations of the Australian Constitutional Convention.

(iv)

A federal Act should provide that all matters referred to the Australian Treaties Council be tabled in both Houses of the Parliament at the time of referral to the Council. In November 1995 the Senate Legal and Constitutional References Committee published a report entitled Trick or Treaty? Commonwealth Power to Make and Implement Treaties. On 2 May 1997, the Minister for Foreign Affairs (Mr Downer) and the Commonwealth Attorney-General (Mr Daryl Williams) made a joint announcement on the same day the official response of the Commonwealth government to the report was tabled in Parliament. The following elements of the reforms were noted: • Treaties will be tabled in Parliament at least 15 sitting days before the Government takes binding action. This means that treaties will be tabled after the treaty has been signed for Australia, but before action is taken which would bind Australia under international law. • Treaties will be tabled in Parliament with a National Interest Analysis which will note the reasons why Australia should become a party to the treaty. Where relevant, this will include a discussion of the foreseeable economic, environmental, social and cultural effects of the treaty; the obligations imposed by the treaty; its direct financial costs to Australia; how the treaty will be implemented domestically; what consultation has occurred in relation to the treaty and whether the treaty provides for withdrawal or denunciation. • The Government will propose the establishment of a Joint Parliamentary Committee on Treaties to consider tabled treaties and the National Interest Analyses. The proposed Committee could also consider any other question relating to a treaty or international instrument that is referred to it by either House of Parliament or a Minister. The Committee will provide detailed scrutiny and examination of those treaties that are of particular interest to Australians. • The Commonwealth will support the creation of a Treaties Council as an adjunct to the Council of Australian Governments. The Council will have an advisory function, but its composition and operational details will be the subject of further discussions with the States and Territories. [6.170]

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• A treaties database is to be established which will allow individuals and groups with an interest in treaties to obtain information free of charge. It is currently envisaged that the information on the database will be accessible via the Internet. However, it will remain possible for those without electronic communication equipment to obtain information in hard copy form from the agency responsible for the treaty or the Department of Foreign Affairs and Trade. Writing in 2001, Dr John Trone considered the Joint Standing Committee on Treaties, the “most important reform of the treaty-making process”, to have been “a conspicuous success” (at pp 35-36 [58]). He explained: It has generally operated in a bipartisan spirit, and has only rarely divided along party lines. It has not been a “rubber stamp” for the executive. The Committee has made recommendations that a proposed ratification should not take place or should be delayed. On numerous occasions it has drawn attention to deficiencies in the process of consultation with the states and territories (p 36 [58]; references omitted).

For information on the Joint Standing Committee on Treaties, see http://www.aph.gov.au/ Parliamentary_Business/Committees/Joint/Treaties. A discussion of these reforms can be found in H Charlesworth, M Chiam, D Hovell, G Williams, “Deep Anxieties: Australia and the International Legal Order” (2003) 25 Sydney Law Review 424 at 438. The ambit of the external affairs power as established in the Tasmanian Dam Case remains controversial: see, for instance, James Allan and Nicholas Aroney, “An Uncommon Court: How the High Court of Australia Has Undermined Australian Federalism” (2008) 30 Sydney Law Review 245. However, as Dr John Trone has noted: In Australia it is often supposed that it is highly unusual or even unprecedented that the national government [scil Parliament] of a federal state would possess the power to implement as domestic law any bona fide international agreement [scil treaty] to which it is party. Such a belief seems to underlie much of the criticism of the Australian High Court’s interpretation of this power … [However] such a power is the norm rather than the exception in federal states. J Trone, Federal Constitutions and International Relations (2001), p 91 [135].

Trone discusses the position in the United States, India, Malaysia, Switzerland, Austria and other federal nations: pp 91-114 [136]–[172]. He concludes that the Australian position is “clearly the ordinary federal model in relation to the implementation of treaties” (p 114 [172]). For the practice in federal states other than Australia, see also Trick or Treaty? ch 10.

SECTION 51(VI) The defence power [6.180] Section 51(vi) of the Commonwealth Constitution provides: 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 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.

As the defence power is a purposive power its scope is not static. Its variable nature corresponds to the intensity of a particular state of affairs. As the threat or war become more intense, the scope of the power increases. As the emergency recedes, the scope of the power similarly contracts. The defence power fluctuates through four main phases, from the widest scope during wartime to its narrowest scope during a period of profound peace, with the spectrum being punctuated by a postwar period and a period for the preparation for war. This description of the defence power is quite surprising in view of the fact that a literal reading of the terms of the power would tend to suggest a rather restricted scope. 534

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It is not intended here to provide for a comprehensive analysis of the defence power. For a detailed analysis, see Zines’s The High Court and the Constitution (6th ed, 2015), ch 11; DP Derham, The Defence Power, in R Else-Mitchell (ed), Essays on the Australian Constitution (2nd ed, Law Book Company, Sydney, 1961), ch vi. An early leading case on the ambit of the defence power is Farey v Burvett (1916) 21 CLR 433.

Farey v Burvett [6.190] Farey v Burvett (1916) 21 CLR 433 at 439–443 [The appellant, Farey, was charged under the War Precautions (Prices Adjustment) Regulations 1916 (Cth), made under the War Precautions Act 1914 (Cth) as amended by Act No 3 of 1916. Farey had sold bread in a proclaimed area at a price greater than the maximum price prescribed by an Order authorised by the Regulations. He appealed to the High Court against his conviction, claiming that, insofar as the Act authorised the making of Regulations dealing with the price of bread, the Act was not within the defence power.] Griffith CJ: 439 The general principle to be applied in determining whether an attempted exercise of a power is valid has been more than once enunciated by this Court. 440 In Jumbunna Coal Mine, No Liability v Victorian Coal Miners’ Association (1908) 6 CLR 309 at 344, Barton J quoted the well known passage from the judgment of Marshall CJ in the celebrated case of McCulloch v Maryland 4 Wheat 316 (1919) at 421: We admit, as all must admit, that the powers of the Government are limited, and that its limits are not to be transcended. But we think the sound construction of the Constitution must allow to the national Legislature that discretion, with respect to the means by which the powers it confers are to be carried into execution, which will enable that body to perform the high duties assigned to it, in the manner most beneficial to the people. 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. The first question, then, is what is the nature and extent of the power conferred by pl vi. It is contended by the appellant that the word “defence”, as there used, must bear a single and uniform meaning at all times, in the sense that an act which is not authorized to be done in time of peace cannot be authorized in time of war, and that any wider meaning of the word is excluded by the context. No one disputes that an attempt by the Commonwealth Parliament to fix the price of food in time of peace would be a trespass on the reserved powers of the States. It is contended that it is therefore equally a trespass in time of war. As to the suggested limitation by the context, the words “naval” and “military” are not words of limitation, but rather of extension, showing that the subject matter includes all kinds of warlike operations. The concluding words cannot have any restrictive effect, unless they are read as an exhaustive definition of all that may be done, which is an impossible construction. In my opinion the word “defence” of itself includes all acts of such a kind as may be done in the United Kingdom, either under the authority of Parliament or under the Royal Prerogative, for the purpose of the defence of the realm, except so far as they are prohibited by other provisions of the Constitution. This, then, is the subject matter with respect to which power 441 to legislate is given. It includes preparation for war in time of peace, and any such action in time of war as may conduce to the successful prosecution of the war and defeat of the enemy. This is the constant and invariable meaning of the term. It is obvious, however, that the question whether a particular legislative act is within it may fall to be determined upon very different considerations in time of war and time of peace. … One test, however, must always be applied, namely: Can the measure in question conduce to the efficiency of the forces of the Empire, or is the connection of cause and effect between the measure and the desired efficiency so remote that the one cannot reasonably be regarded as affecting the other? … [6.190]

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Farey v Burvett cont. The power to make laws with respect to defence is, of course, paramount power, and if it comes into conflict with any reserved State rights the latter must give way … 442 … [T]he Court cannot shut its eyes to the fact that what could not rationally be regarded as a measure of defence in time of peace may be obviously a measure of defence in time of war. A law passed by the Commonwealth Parliament in time of profound peace prohibiting the accumulating of food stuffs could not be regarded as substantially an exercise of the defence power. In time of war the same act might well be made a capital offence. Applying this well established doctrine, the question is whether the Act and Regulation the validity of which is now called in question can be regarded as substantially laws relating to defence, in other words, whether the provisions of the Regulation can conduce to the more effectual prosecution of the War. It is not necessary for the Court to point out the particular way in which they can have that effect. But the Court may, I think, take judicial notice of the fact that the past season’s harvest was most abundant, and that vast quantities of wheat, far exceeding the possible consumption of the 443 Commonwealth, are awaiting export, while owing to the operations of war the supply of freight is deficient. It is obvious that for economical as well as other reasons the export of the surplus to the United Kingdom or the allied nations may be highly desirable for the more efficient prosecution of the War. It seems to follow that any law which may tend, with or without the aid of other measures, to encourage such export may be conducive to the more efficient conduct of the War.

Notes&Questions

[6.200]

1.

The appeal was dismissed by a majority of the High Court (Griffith CJ, Barton, Isaacs, Higgins and Powers JJ; Gavan Duffy and Rich JJ dissenting).

2.

Isaacs J said (at 455–456): If the measure questioned may conceivably in such circumstances even incidentally aid the effectuation of the power of defence, the Court must hold its hand and leave the rest to the judgment and wisdom and discretion of the Parliament and the Executive it controls for they alone have the information, the knowledge and the experience and also, by the Constitution, the authority to judge of the situation and lead the nation to the desired end.

Is this proposition of Isaacs J too broad? How can the court determine that a legislative measure is characterised as a law with respect to defence? Zines’s The High Court and the Constitution ((6th ed, 2015), p 336) says: Even in wartime, the High Court has insisted that it must be for a court to determine the relevance of legislation to the object of defence. The test is whether the measure can reasonably be regarded as a means toward attaining an object which is connected with defence. But the court is not concerned with the actual wisdom or effectiveness of the measure: Marcus Clark and Co Ltd v Commonwealth (the Capital Issues Case) (1952) 87 CLR 177 at 256.

3.

In Stenhouse v Coleman (1944) 69 CLR 457 at 471, Dixon J clarified the interpretation of the defence power, and the characterisation of legislation as falling under it: Some of the difficulties which have been felt in the application of that power seem to me to be due to the circumstance that, unlike most other powers conferred by s 51 of the Constitution, it involves the notion of purpose or object. In most of the paragraphs of s 51 the subject of the power is described either by reference to a class of legal, commercial, economic or social transaction or activity (as trade and commerce, banking, marriage), or by specifying some class of public service (as postal installations, lighthouses), or undertaking or operation (as railway construction with the consent of a

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State), or by naming a recognized category of legislation (as taxation, bankruptcy). In such cases it is usual, when the validity of legislation is in question, to consider whether the legislation operates upon or affects the subject matter, or in the last case answers the description, and to disregard purpose or object. An example will be found in Victorian Stevedoring and General Contracting Co Pty Ltd v Dignan (1931) 46 CLR 73 at 103. But “a law with respect to the defence of the Commonwealth” is an expression which seems rather to treat defence or war as the purpose to which the legislation must be addressed. This peculiarity in the power has caused no departure from the practice that excludes from investigation the actual extrinsic motives and intentions of legislative authorities. But, however it may be expressed, whether by the words – “scope”, “object”, “pith”, “substance”, “effect” or “operation”, the connection of the regulation with defence can scarcely be other than purposive, if it is within the power. No doubt it is possible that the “purpose” here may be another example of what Lord Sumner described as “one of those so-called intentions which the law imputes; it is the legal construction put on something done in fact” (Blott’s Case [1921] 2 AC 171 at 218). For apparently the purpose must be collected from the instrument in question, the facts to which it applies and the circumstances which called it forth. It is evident that among these circumstances the character of the war, its notorious incidents, and its farreaching consequences must take first place. In some cases they must form controlling considerations, because from them will appear the cause and the justification for the challenged measure. They are considerations arising from matters about which, in case of doubt, courts can inform themselves by looking at materials that are the subject of judicial notice.

Australian Communist Party v Commonwealth [6.210] Australian Communist Party v Commonwealth (1951) 83 CLR 1 at 253–268, 193–194 [The case concerned the Communist Party Dissolution Act 1950 (Cth) which was attacked primarily on the ground that its chief provisions did not relate to matters falling within any legislative power expressly or impliedly given by the Constitution to the Commonwealth Parliament. The Communist Party Dissolution Act 1950 (Cth) received the Royal Assent on 20 October 1950 and was prefaced by a preamble of 27 sections. The preamble contained nine “recitals”. The first three recitals merely set out portions of ss 51(vi), 61 and 51(xxxix) of the Constitution. The other recitals stated that the Australian Communist Party, its officers, members and others, being communists, were engaged in espionage, sabotage, treasonable or subversive activities and activities designed to bring about the overthrow of the established system of government of Australia and the dislocation of vital industries. Section 4 of the Act declared that the Australian Communist Party was an unlawful association and was by force of the Act itself dissolved. Any other association could be declared to be unlawful if it fell within one of the descriptions contained in s 5(1). These descriptions spelt out some degree of association with the Communist Party or with communism. The Governor-General was authorised under s 5(2) to declare an association unlawful if he was satisfied that the association fitted one of the statutory descriptions and 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. Section 6 provided that the effect of the declaration was to dissolve the body. Section 5 also contained provisions enabling an association to challenge before a court the declaration that it had associated with the Communist Party or with communism in the manner set out in s 5(1). However it would not be able to challenge the declaration of the Governor-General that the continued existence of the association would be prejudicial to defence or to the maintenance and execution of the Constitution, etc. Section 9 contained provisions in relation to individual persons. It empowered the Governor-General to make a declaration if he was satisfied that a person was a member or officer of the Australian Communist Party or was a communist and was engaged or likely to engage in activities prejudicial to the security and defence of the Commonwealth or to the execution or maintenance of the [6.210]

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Australian Communist Party v Commonwealth cont. Constitution or of the laws of the Commonwealth. Section 9 contained provisions corresponding to those contained in s 5 with respect to an application to a court to set aside a declaration. As in the case of s 5, s 9 did not provide for any application to a court in respect of the declaration that the person was engaged or likely to engage in the prejudicial activities specified in the section. A declared person would be subject to some civil disqualifications. Section 10 provided that a declared person would be incapable of holding office under or of being employed by the Commonwealth or an authority of the Commonwealth or of holding office as a member of an incorporated authority of the Commonwealth. He or she would also be rendered incapable of holding office in an industrial organisation (whether registered under Commonwealth or State law or not) to which s 10 applied. Sections 11 and 12 contained ancillary provisions in connection with the vacating of offices in cases to which s 10 applied. Section 14 provided that no contract or agreement should be made by the Commonwealth or by an authority of the Commonwealth with a person, in respect of whom a declaration under s 9 was in force, under which a fee or other remuneration was payable in respect of the services of that person. The Australian Communist Party, various federal trade unions and certain of their office-bearers commenced actions before Dixon J with the object of obtaining a declaration that the provisions of the Communist Party Dissolution Act 1950 were ultra vires and void and injunctions restraining the Commonwealth from acting to the prejudice of the defendants. The validity of the Act was attacked primarily on the ground that the chief provisions of the Act did not relate to matters falling within any legislative power expressly or impliedly given by the Constitution to the Commonwealth Parliament. Counsel for the Commonwealth argued for the general validity of the Act under (i) the defence power conferred by s 51(vi) of the Constitution, and (ii) the power of making laws in respect of the maintenance of the Constitution or the execution of the laws, whether that power be derived from a combination of s 51(xxxix) and s 61 of the Constitution, or “whether it be a power which comes or arises from the very existence of the Commonwealth itself as a body politic”. The case stated by Dixon J for the High Court raised the main question concerning the validity of the Communist Party Dissolution Act 1950 and also a preliminary question relating to the recitals in the preamble of the Act. In dealing with the preliminary question, Latham CJ, Dixon, McTiernan, Williams, Fullagar and Kitto JJ said that the recitals would not assist the court in determining the validity of the Act. Neither was it permissible for evidence to be adduced to challenge the truth of the assertions as embodied in the recitals. Instead, the court would rely on facts of which it could take “judicial notice”. In relation to the main question, the High Court with the exception of Latham CJ, who dissented, held the Communist Party Dissolution Act 1950 to be invalid.] Fullagar J: 253 I think that the questions in the case are best approached by a general consideration of the powers invoked. It will be convenient to take the defence power first, because it has been much explored in recent years, and it possesses, I think, certain features which differentiate it from all or most of the other legislative powers. In the first place, the power given by s 51(vi) of the Constitution is given by reference to the purpose or object of the law and not by reference to some concrete subject matter. … Here the obvious purpose of the preamble is to put forward facts to which the power applies and circumstances which call it forth. Whether it can achieve this purpose remains to be seen. In the second place, and perhaps partly because of its “purposive” character, the power given by s 51(vi) has two aspects. The tendency of the decisions of this Court, given in the course of two great wars and during the aftermath of each, has been to hold up the two aspects in sharp contrast one to another, and the dividing line between them has hitherto been regarded as sharp and clear – perhaps as sharper and clearer than it will ultimately be found to be. 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: see, eg, Farey v Burvett (1916) 21 CLR 433 at 453, per Isaacs J; Adelaide Company of Jehovah’s Witnesses Inc v Commonwealth (1943) 67 CLR 166 at 132, 133, per Latham 254 Hume v Higgins (1949) 78 CLR 116 at 133, 134, per Dixon J; and cf the reference by Williams J in Koon Wing Lau v Calwell (1949) 80 CLR 121 at 585 to matters “which could reasonably be considered to be a threat to the safety of Australia in the event of some future 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 538

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Australian Communist Party v Commonwealth cont. 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”. From any legitimate point of view of a court their only possible purpose or object is naval and military defence. An interesting (and perhaps border-line) example of this primary aspect of the defence power is to be found in Attorney-General (Vic) v Commonwealth (1935) 52 CLR 533. But (with or without the aid of s 51(xxxix)) the defence power in its primary aspect includes much more than the things I have mentioned. It could not, I think, be doubted that it includes a power to make laws 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. Here again, from any legitimate point of view of a court, the only possible purpose or object of such a law is naval and military defence. The possibility of some extrinsic purpose or ulterior motive cannot be investigated by a court (Stenhouse v Coleman (1944) 69 CLR 457 at p 471). The law is a law with respect to defence. 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, I think, 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 255 in land, and the conditions of employment in industry generally. It may be that, on its true analysis, this secondary aspect of the defence power depends wholly on s 51(xxxix) of the Constitution. On this view, the effect of a national emergency is that the matters which I have mentioned, and very many others, become “matters incidental to the execution” of the power of the Executive to deal with the emergency. Having in mind this secondary or extended aspect of the power, Dixon J, in Andrews v Howell (1941) 65 CLR 255 at 278, said of the power given by s 51(vi): “Though its meaning does not change, yet, unlike some other powers, its application 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 existence and character of hostilities, or a threat of hostilities, against the Commonwealth are facts which will determine the extent of the operation of the power.” Other passages to a similar effect could be cited. In such passages the “facts” referred to are the basic facts which give rise to the extension of the power. Such facts have always hitherto been matters of public general knowledge, and matters, therefore, of which a court can and will take judicial notice. But, given the basic fact of (say) war, the question will still arise, whenever the validity of a particular law is in question, whether that law can be related to the extended power, or whether it is a law with respect to a matter incidental to the power of the Executive to wage war. The matter is, in effect, taken in two stages. At the first stage, the existence of war or national emergency is recognized as bringing into play the secondary or extended aspect of the defence power. This is done simply as a matter of judicial notice, and it provides the justification for a presumption of validity which might not otherwise exist in the case of an enactment which on its face bore no relation to any constitutional power. At the second stage the enactment in question is examined with regard to its character as a step to assist in dealing with the emergency, and “the presumption is, so to speak, reinforced by the respect which the court pays to the opinion or judgment of the other organs of government, with whom the responsibility for carrying on the war rests. When, for example, it appears that a challenged regulation is a means adopted to secure some end relating to the prosecution of the war, the court does not substitute for that of the Executive its own opinion of the appropriateness or sufficiency of the means to promote the desired end” (per Dixon J in Stenhouse v Coleman (1944) 69 CLR 457 at 470). The question which arises at this second stage may itself turn on 256 particular facts as distinct from the overriding general fact of war or national emergency. Such facts may relate to the operation of the law in question or to a state of affairs which calls for its enactment. 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Australian Communist Party v Commonwealth cont. must depend on the circumstances of each particular case. In Jenkins v Commonwealth (1947) 74 CLR 400, and in Sloan v Pollard (1947) 75 CLR 445, evidence was admitted. On the other hand, affidavits were rejected in the South Australia v The Commonwealth Uniform Tax Case (1942) 65 CLR at 384, 385, 409 and in R v Foster; Ex parte Rural Bank of New South Wales (1949) 79 CLR 43 at 51, 52, the Court in each case confining itself to matters of which judicial notice could be taken. The Court will normally, I think, so confine itself. In Stenhouse v Coleman (1944) 69 CLR 457 at 469 Dixon J said: “Ordinarily the Court does not go beyond matters of which it may take judicial notice. This means that for its facts the court must depend upon matters of general public knowledge.” The reasons why this must generally be so are stated in his Honour’s judgment. The taking of evidence might often involve disclosures which would be prejudicial to the steps being taken by the Executive to deal with the emergency. The Court, in any case, is bound by the legal rules of evidence, and there are thus limitations upon the material which it can receive or take into account. It may perhaps be added that the “facts” will in many cases be of such a general character as to be difficult or impossible to prove or disprove by legally admissible evidence, while quite capable of being judicially noticed. It is indeed a characteristic of a large class of matters which are judicially noticed that they are of this general character. In Holland v Jones (1917) 23 CLR 149 at 153, Isaacs J said: “Wherever a fact is so generally known that every ordinary person may be reasonably presumed to be aware of it, the Court ‘notices’ it, either simpliciter if it is at once satisfied of the fact without more, or after such information or investigation as it considers reliable and necessary in order to eliminate any reasonable doubt. The basic essential is that the fact is to be of a class that is so generally known as to give rise to the presumption that all persons are aware of it. This excludes from the operation of judicial notice what are not ‘general’ but ‘particular’ facts. … But, if the fact is of such ‘general’ character as to give rise to the presumption mentioned, then a Judge is justified in ‘noticing’ it.” Closely connected with the foregoing and with each other are two other features of the defence power in its wider aspect. It is well 257 established that the so-called separation of powers under the Constitution does not preclude the Parliament from authorizing in the widest and most general terms subordinate legislation under any of the heads of its legislative power (Victorian Stevedoring and General Contracting Co Ltd and Meakes v Dignan (1931) 46 CLR 73). But the scope of permissible “delegation” of legislative power to the Executive is almost certainly wider in the case of the defence power than in the case of any of the other powers. Thus an Act giving a power “to make regulations with respect to bankruptcy”, not given in aid of specific legislation by the Parliament, might well be held not to be a law with respect to bankruptcy. But an Act giving to the Governor-General a power “to make regulations for securing the public safety and the defence of the Commonwealth” is a valid law with respect to the defence of the Commonwealth in time of war (Wishart v Fraser (1941) 64 CLR 470). In that case Dixon J said: “The defence of a country is particularly the concern of the Executive, and in war the exigencies are so many, so varied and so urgent, that width and generality are a characteristic of the powers which it must exercise” (at 484, 485). Further – and more important for present purposes – power may validly be given by an Act, or by a regulation under an Act, to a designated person or authority to make orders, declarations and proclamations which are not themselves of a legislative character but which carry legal consequences by virtue of the Act or regulation under which they are made. And such orders, declarations or proclamations may be authorized to be made on no more specific basis than the opinion of the donee of the power that they are necessary or desirable for securing the public safety and the defence of the Commonwealth. There could be no more striking illustration of the exceptional status of the defence power. For “when the operation of a law is made conditional upon the opinion, as to certain matters, of some person named or described, or on proof of certain matters to his satisfaction, the question whether his opinion is justified, or whether he should have been satisfied on the materials before him, is not examinable by the Courts. The only question which can be examined is whether, acting bona fide, he formed the opinion or was satisfied with the proof” (Ex parte Walsh; Re Yeats (1925) 37 CLR 36 at 67, (per Knox CJ)). If the opinion is to be that of the Governor-General, it cannot, in my opinion, be examined at all, for it is not open to impute mala fides with respect to an act of the King by 258 himself or his representative (Duncan v Theodore (1917) 23 CLR 510 at 544 (per Isaacs and Powers JJ)). 540

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Australian Communist Party v Commonwealth cont. 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. It is sufficient to refer to Lloyd v Wallach (1915) 20 CLR 299 (cf Liversidge v Anderson [1942] AC 206; Ex parte Walsh [1942] ALR 359; Little v Commonwealth (1947) 75 CLR 94; and Reid v Sinderberry (1944) 68 CLR 504). It may be thought that herein lies an exception to an elementary rule of constitutional law which has been expressed metaphorically by saying that a stream cannot rise higher than its source. It was stated in Shrimpton v Commonwealth (1945) 69 CLR 613 per Dixon J, at 629, 630 in these terms: “Finality, in the sense of complete freedom from legal control, is a quality which cannot be given under our Constitution to a discretion, if … it is capable of being exercised for purposes, or given an operation, which would or might go outside the power from which the law or regulation conferring the discretion derives its force.” Cf Dawson v Commonwealth (1946) 73 CLR 157 per Dixon J, at 181, 182. The “discretion” may, of course, be the discretion of the legislature itself, exercised by the very fact of the enactment of a law. Or it may be the discretion of the Governor-General or a Minister, intended to be legally effective by the operation of an enacted law upon it. 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. Whether the rule exemplified by Lloyd v Wallach (1915) 20 CLR 299 constitutes a real or only an apparent exception to the general rule is a matter which need not be considered here. It is enough to say that, on the one hand, it is established beyond all doubt, while, on the other hand, 259 it has never yet been invoked except in connection with that secondary aspect of the defence power which has so far been regarded as depending upon a basic fact of emergency and ceasing when conditions created by the emergency have passed (R v Foster; Ex parte Rural Bank of New South Wales; Wagner v Gall; Collins v Hunter (1949) 79 CLR 43). The “defence” to which s 51(vi) refers is the defence of Australia against external enemies: it is concerned with war and the possibility of war with an extra-Australian nation or organism. But it cannot, in my opinion, be doubted that there exists also a legislative power in the Parliament, which it is not easy to define in precise terms, to make laws for the protection of itself and the Constitution against domestic attack. In R v Kidman (1915) 20 CLR 425 at 441 Isaacs J said that the legislative power “may say that any attempted invasion by force on the field of Commonwealth executive powers may not only be resisted and prevented, but also punished.” In the same case his Honour said (at 440) that the Commonwealth has “an inherent right of self-protection” and (at 444, 445) that it “carries with it – except where expressly prohibited – all necessary powers to protect itself and punish those who endeavour to obstruct it.” In Ex parte Walsh; Re Yeats (1925) 37 CLR 36 at 94 the same learned Justice, speaking of “deportation as a means of self-protection in relation to constitutional functions”, said: “This nation cannot have less power than an ordinary body of persons, whether a State, a church, a club, or a political party, who associate themselves voluntarily for mutual benefit, to eliminate from their communal society any element considered inimical to its existence or welfare”. In R v Hush; Ex parte Devanny (1932) 48 CLR 487 at 506 Rich J said: “… it is impossible to doubt the legislative power to prohibit associations which by their constitutions or propaganda advocate or encourage the overthrow of the Constitution of the Commonwealth by revolution or of the established government of the Commonwealth by force or violence. Section 51(xxxix) of the Constitution includes matters incidental to the execution of powers vested by the Constitution in the organs of government. The survival of the Constitution appears to me to be a matter most incidental to the execution of power under it. But, apart from this, s 61 of the Constitution expressly enacts that the executive power shall extend to the execution and maintenance of the Constitution. To prevent persons associating together for the 260 purpose of destroying the Constitution is a matter incidental to maintaining it.” In that case Rich J took a different view of the facts from that taken by the other justices, who did not find it necessary to consider the question of constitutional power, though Evatt J expressed doubt as to the [6.210]

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Australian Communist Party v Commonwealth cont. existence of the power. But in Burns v Ransley (1949) 79 CLR 101 its existence was, I think, placed beyond doubt. The relevant passages are of great importance, but they are already recorded, and I will quote only two brief extracts. Latham CJ said: “Protection against fifth-column activities and subversive propaganda may reasonably be regarded as desirable or even necessary for the purpose of preserving the constitutional powers and operations of governmental agencies and the existence of government itself. The prevention and punishment of intentional excitement of disaffection against the Sovereign and the Government is a form of protective law for this purpose which is to be found as a normal element in most, if not all, organized societies” (at 110). Dixon J (at 116) said: “I do not suppose that it would be denied that the legislative power of the Commonwealth extends to measures for the suppression of incitements to the actual use of violence for the purpose of resisting the authority of the Commonwealth or effecting a revolutionary change in the form of government. In the same way I think that the legislative power authorizes measures against incitements to the use of violence for the purpose of effecting a change in our constitutional position under the Crown or in relation to the United Kingdom or in the Constitution or form of government in the United Kingdom. … Our institutions may be changed by laws adopted peaceably by the appropriate legislative authority. It follows almost necessarily from their existence that to preserve them from violent subversion is a matter within the legislative power.” Not less important are the statements to be found in R v Sharkey (at 148 per Dixon J; at 157, 158, per McTiernan J, and at 163, per Webb J). The source of part of the power which I have been discussing may be found in s 51(xxxix), read with s 61 of the Constitution, and it is here that the framers of the second and third recitals in the preamble to the Communist Party Dissolution Act 1950 have found it. But I think that, if it ever becomes necessary to examine it closely, it may well be found to depend really on an essential and inescapable implication which must be involved in the legal constitution of any polity. The validity of the Act, however, if it could be supported by the power, would not be affected by the fact that its framers had taken too narrow a view of the source of the power. 261 There has never yet been occasion to examine closely the scope of this power. It may be that it is elastic in the same sense in which the defence power is elastic. But I do not think that the principle of Lloyd v Wallach (1915) 20 CLR 299 and Ex parte Walsh [1942] ALR 359 can be applied to it. That is to say, while it may be found to expand very considerably in time of domestic emergency, I think that it is so far of a different nature from the defence power that a law cannot be made under it imposing legal consequences on a legislative or executive opinion which itself supplies the only link between the power and the legal consequences of the opinion. I come now to the Act itself. The most conspicuous feature of the Act is s 4, and the most conspicuous feature of s 4 is that it does not purport to impose duties or confer rights or prohibit acts or omissions, but purports simply to declare a particular unincorporated voluntary association unlawful and to dissolve it. It is, one supposes, to be classed as a public enactment as distinct from a private enactment, but it is, or at least is extremely like, what the Romans would have called a privilegium. Such a law (for I would not deny to it the character of a law) may well be within the competence of the Commonwealth legislative power, which is, within its constitutional limits, plenary (cf Abitibi Power & Paper Co Ltd v Montreal Trust Co [1943] AC 536 at 548). It would be impossible, I should think, to challenge s 4 if the Parliament had power to make laws with respect to voluntary associations or with respect to communists. It would be a law “with respect to” each of those “matters”. So an Act of the Parliament dissolving the marriage of A with B would be a law with respect to divorce. It would be a privilegium, but what the Act actually did would be a thing which fell within a class of subject matter on which the Parliament was authorized to legislate. The Parliament has power to make laws with respect to divorce, and the Act is a law which effects a divorce. It is a privilegium, but it is a good law. But, if the Parliament enacts a privilegium which on its face bears no relation to any head of legislative power, it is likely to be extremely difficult to justify it under any head of power. In such a case (and s 4 is an example of such a case) there can, in my opinion, be no presumption of validity, and the Act, if it is to be upheld at all, can only be upheld on the basis of special and particular facts relating to the person or class who or which is the subject of the privilegium. … [T]here can be no presumption of the validity of s 4, for the simple reason that there can be no presumption that the Australian Communist 542

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Australian Communist Party v Commonwealth cont. Party has done or is likely to do anything which would bring it within the defence power or the constitution-preservation power (to give it a short name at some sacrifice of accuracy). 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 1950 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 1 Cr 137; 2 Law Ed 118 (1803) had pronounced a different view, it might perhaps not arise even in the case of the Commonwealth Parliament; and there are those, even to-day, who disapprove of the doctrine of Marbury v Madison 1 Cr 137; 2 Law Ed 118 (1803), 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 1 Cr 137; 2 Law Ed 118 (1803) is accepted as axiomatic, modified in varying degree in various cases (but 263 never excluded) by the respect which the judicial organ must accord to opinions of the legislative and executive organs. I have said that there can, in my opinion, be no presumption of the validity of s 4. But I have been considering the matter so far without reference to the preamble. How, if at all, is the position affected by the recitals contained in the preamble? In the case of a legislature of limited powers, can such recitals be used to bring within power a privilegium which cannot be related by anything that appears on its face to any power of that legislature? One thing seems very clear to me, and that is that no declaration containing allegations in favour of, or against, the object of the privilegium could be conclusive for or against that object. … Parliament cannot recite itself into a field the gates of which are locked against it by superior law. The example which I am at the moment considering is a fortiori to that which Latham CJ was considering in South Australia v Commonwealth (1942) 65 CLR 255 at p 432, and the learned Chief Justice there said: “Such a declaration cannot be regarded as conclusive. A Parliament of limited powers cannot arrogate a power to itself by attaching a label to a statute.” I am of opinion, indeed, that, in such a case as the present, such recitals cannot be regarded as affording even prima-facie evidence of the truth of what is recited. I do not think that there is any rule of the common law which compels us so to regard them, though the English Courts generally regard recitals of facts in a statute as equivalent to prima-facie evidence of the truth of those facts. But the matter is primarily one of the construction of the statute in each particular case, and the position may be affected by circumstances. The reasoning of Lord Ellenborough and Bayley J in R v Sutton (1816) 4 M & S 532;105 ER 931 would indeed seem to lead to the conclusion that such recitals must amount to conclusive evidence, since those learned judges appear to treat the recitals as standing on the same level as the operative part of the statute and as being in effect part of the law enacted. But, as is pointed out in Craies on Statute Law, 4th ed (1936), p 41, recitals as such are not part of the law enacted on the subject, and the most that can be said 264 is, I think, that such statements are generally to be regarded by a court as prima-facie true. … No doubt, in the case of a legislature of unlimited powers, a statement of fact or law could be made conclusive. So, in R v Inhabitants of Haughton (1853) 1 El & Bl 501 at 515, 516 [118 ER 523 at 528] Lord Campbell CJ said that a recital in a statute that a certain road was in Denton might be considered evidence that the road was in Denton but could not prevail against an estoppel, and he added: “Had there been anything amounting to an enactment that the road should be considered in Denton, this would have prevailed over the estoppel: but a mere recital in an act of Parliament, either of fact or of law, is not conclusive: and we are at liberty to consider the fact or the law to be different from the statement in the recital.” (The latter part of this passage was quoted with approval by Lord Chelmsford in Mersey Docks and Harbour Board Trustees v Cameron (1864) 11 HLC 443 at p 518 [11 ER 1405 at 1434].) The whole position seems to be summed up by Knight Bruce LJ when, in Norton v Spooner (1854) 9 Moo PC 103 at 129 [14 ER 237 at 246], speaking for the Privy Council, he says that “a recital in an act of legislation, … may, according to circumstances, be of more or less weight, and be often not conclusive”. [6.210]

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Australian Communist Party v Commonwealth cont. But, whatever may be the general position, it seems to me that it would be contrary to principle to allow even prima-facie 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, it seems to me, be to say the same thing – and not less because the entry into the field might be only provisional. This view is not, in my opinion, inconsistent with the many statements to be found in cases arising on the defence power to the effect that the Court 265 will pay great respect to statements of Parliament in an Act or of the Governor-General in a regulation. This has been put strongly on occasions – nowhere, perhaps, more strongly than by Higgins J in Pankhurst v Kiernan (1917) 24 CLR 120 at 134, where his Honour said that, if Parliament treated the fixing of prices as conducing to the defence of the Commonwealth, “we are bound to accept the statement of Parliament that it does so conduce unless we can see that the statement is obviously untrue or absurd.” A somewhat similar approach is indicated when Lord Atkin, in Abitibi Power Paper Co Ltd v Montreal Trust Co (1943) AC 536 at 548 says: “Their Lordships see no reason to reject the statement of the Ontario legislature, contained in the preamble.” But neither Higgins J nor Lord Atkin was thinking of a case in which the “statement” of Parliament was a statement of particular facts relating to a particular individual or body of individuals, although the Ontario statute in the latter case was a special Act relating to the appellant company. And, in so far as effect has been given to such statements of Parliament as bearing on the connection between enactment and legislative power, the cases have all been cases in which the basic fact of war has been judicially noticed at the outset. That basic fact brings into existence the secondary aspect of the defence power, to which, as I have pointed out, exceptional considerations apply. I have thought it right to consider with some care whether any and what probative force could be attributed to the fourth, fifth, sixth, seventh and eighth recitals in the preamble to the Act, regarded as statements of fact, because a good deal of the argument for the Australian Communist Party was devoted to this question, and it is a question of general interest and importance. But the truth is that I do not think that those recitals can be properly regarded at all as statements of fact having a potential probative force by virtue of their presence in an Act of Parliament. It is more or less involved in what I have said that I am disposed to regard such a view as a begging of the question. It is as if one should say: “The Act is valid because the statements contained in it are true, and the statements are true because they are contained in a valid Act.” The true view is, I think, that the recitals in the preamble are to be regarded as statements of opinion or belief as to facts, inserted to explain the occasion of what is enacted and to provide justification for it. I do not think that any further or other effect can be given to the preamble in this case. It does not necessarily follow that the recitals are of no importance, because, if one condition, to which I will refer in a moment, were 266 fulfilled, they would be very important indeed and probably decisive. Nor does it necessarily follow from what I have just been saying that both questions 1(a) and 1(b) in the case stated by Dixon J should be answered in the negative, because the Commonwealth might still maintain that the validity of the Act depends on facts asserted in the preamble and capable of judicial ascertainment, and might seek to tender evidence to establish the facts which it regarded as essential. And, if the Commonwealth were to be permitted to tender such evidence, the plaintiffs would, as a matter of course, be entitled to adduce evidence in rebuttal. But the Commonwealth has not sought to adduce evidence, and it has, in my opinion, been right in not seeking to do so, because I do not think that the validity of this Act depends on evidence. This Act can, in my opinion, only be supported, if it can be supported at all, as an exercise of the defence power in what I have called its extended or secondary aspect. I do not think it can be supported under the other power invoked, whether that power be regarded as based on the joint operation of s 61 and s 51(xxxix) of the Constitution or on an implication from the existence and nature of the Constitution as the foundation of a body politic. The reason for this is that the provisions of the Act operate on opinions, and those opinions include an opinion as to matters on which the validity of those provisions depends. There is, as I have pointed out, a notable difference between the first group of provisions (headed by s 4) on the one hand and the second and third groups of 544

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Australian Communist Party v Commonwealth cont. provisions (headed by ss 5 and 9) on the other hand. But, in the last analysis, they stand on the same footing, and their validity depends on the same considerations. Section 4 is a directly enacted privilegium based on announced opinions of the Parliament, which involve an opinion as to matters on which power depends. Sections 5 and 9 operate on opinions of the Governor-General, which involve an opinion as to matters on which power depends. The decisions of this Court establish that such enactments may (not that they always will) be valid in cases where the secondary aspect of the defence power comes into existence by virtue of a judicially noticed emergency. No decision establishes that such enactments may be valid as exercises of the other power invoked by the Parliament in this case, and I have already expressed my opinion that there is no secondary aspect of this other power corresponding to the secondary aspect of the defence power. 267 The question whether the Act can be supported as an exercise of the defence power in its secondary aspect must, in my opinion, depend entirely on judicial notice. The coming into existence of this secondary aspect has never been treated as depending on anything else. Nor could it, in my opinion, be 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. This I have already pointed out. I think that it is only in exceptional cases, where a simple fact is readily susceptible of proof or disproof, that evidence can, even then, be admitted. I have cited what Dixon J said in Stenhouse v Coleman (1944) 69 CLR 457 at 469–470. “Ordinarily the Court does not go beyond matters of which it may take judicial notice.” The present case seems to me to be pre-eminently a case in which the Court would have to confine itself, even if it were satisfied that the Act was capable of being supported under the defence power in its secondary aspect, to matters of which it could take judicial notice. Apart from the considerations mentioned in Stenhouse v Coleman (at 469), one has only to glance at the relevant recitals in the Communist Party Dissolution Act 1950 to see that they could hardly be made the subject of proof or disproof by evidence in the ordinary way in which facts are proved and disproved. They relate to a particular association, but no specific act or fact is asserted, and what is asserted is of that “general” character on which Isaacs J laid so much stress in Holland v Jones (1917) 23 CLR 149 at 153. Such matters in a constitutional case are matters for judicial notice or they are nothing. The elimination of the second power on which it is sought to support the Act is, I think, important, because matters of which judicial notice could, as I think, be taken would come nearer to justifying the Act as an exercise of this power than as an exercise of the defence power. It must, however, in my opinion, be eliminated, and we are thus brought to what I regard as the ultimate problem in this difficult case. That ultimate problem lies, I think, in the question whether judicial notice can be taken of matters sufficient to bring into operation that extended aspect of the defence power which was the basis of the decisions in Lloyd v Wallach (1915) 20 CLR 299; Ex parte Walsh [1942] ALR 359, and Little v Commonwealth (1947) 75 CLR 94. On the whole I do not think that it can. 268 Four things are to be remembered throughout. The first, which may or may not by itself be of vital importance, is that the date as at which the matter must be considered is 20 October 1950. The second is that the Parliament had, and has, undoubted powers to deal with such a situation as is envisaged by the preamble. The only question is whether it has power to deal with it by the particular means adopted. The third is that the particular means adopted is a means which has hitherto been recognized as valid only in time of, and by virtue of, a clear and great national danger. It is a means, moreover, which may – from a practical, though not perhaps from a technical and analytical, point of view – be thought to involve a degree of relaxation of a fundamental constitutional rule. Finally, it must not be forgotten that the defence power is, as I have said, 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. It is necessary to be on guard against letting in considerations appropriate only to the other power on which reliance is placed and which I have felt must be rejected. On the one hand, 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. On the other hand, I think that the Court would be justified in taking judicial notice [6.210]

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Australian Communist Party v Commonwealth cont. of a good many of the matters suggested by Mr Barwick as proper matters for judicial notice. But I have come to the conclusion that, if one keeps steadily in mind the important factors which I have enumerated, one cannot judicially notice in this case a state of affairs which would justify holding a measure having the peculiar features of the Communist Party Dissolution Act 1950 valid as an exericse [sic] of an extended defence power. Dixon J: 192 There is nothing among the matters recited closer to defence in relation to dangers from outside the Commonwealth than the references in the sixth, seventh and eighth recitals. This may be of some significance if, as I think must be the case, the power to legislate against subversive conduct and designs, whether it be based on s. 51(xxxix.) or on wider considerations, will not suffice to sustain the validity of the Act on the footing that the operation of s. 4, 5 and 9 is against communist bodies and communists and that because of the precepts, purposes and actions of such bodies and such persons they become ex sua natura subject to the power. If the Act can be supported by a train of reasoning of such a kind it must be under the defence power or not at all. The other power is concerned primarily with the protection of Federal authority against action or utterance by which it may be overthrown, thwarted or undermined. It covers, needless to say, conduct antagonistic to the maintenance of Federal institutions and authority, whether its source is abroad or at home, but its central purpose is to allow the legislature to deal with manifestations of subversive conduct within Australia. 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. It must be borne in mind that it is an incidental or ancillary power, not a power defined according to subject matter. … It would, for example, be quite erroneous to say first that communism is within the incidental power and next that therefore any law affecting communism is valid. 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 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. Nor do I think that if a wider basis for the power than s 51(xxxix) is accepted, the power itself would extend to a law like the present Act, using as it does, the legislature’s characterization of the persons and bodies adversely affected and no factual tests of liability and containing no provision which independently of that characterization would amount intrinsically to an exercise of the power. To deal specifically with named or 194 identifiable bodies or persons independently of any objective standard of responsibility or liability might perhaps be possible under the power in the case of an actual or threatened outburst of violence or the like, but that is a question depending upon different considerations. The foregoing discussion narrows the inquiry as to possible support for the validity of the legislation to what may briefly be described as the use of the defence power against communism as such … 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. … 195… [I]t is futile to deny that 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 order the 546

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Australian Communist Party v Commonwealth cont. detention of person 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: see Lloyd v. Wallach (1915) 20 CLR 299; (1915) VLR 476; Ex parte Walsh (1942) ALR 350; and Little v. The Commonwealth (1947) 75 CLR, at pp 102-104. The reason is because administrative control of the liberty of the individual in aspects considered material to the prosecution of a war is regarded as a necessary or proper incident of conducting the war. One man may be compelled to fight, another to perform directed work, a third may be suspected of treasonable propensities and restrained. 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. The meaning of the power is of course fixed but as, according to that meaning, the fulfilment of the object of the power must depend on the everchanging course of events, the practical application of the power will vary accordingly. Hitherto a marked distinction has been observed between the use of the power in war and in peace. … Throughout this case I have been impressed with the view that the validity of the Act must depend upon the possibility of bringing into application as at the date of the assent to the Act the conceptions as to the operation of the defence power which hitherto have been generally regarded as appropriate only to a time of serious armed conflict. … 196 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. … 197 … It ought not, I think, to be denied that the events of the time, some of which I have briefly enumerated, bring within the practical application of the defence power measures which would not have been considered competent – for example, in the state of affairs prevailing when this Court held its first sittings. But hitherto it has been supposed that only the supreme emergency of war 198 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 or by other identification without any external test of liability upon which the connection of the provisions with power will depend. … 199 In all the cases concerning the validity of statutory regulations made for the war of 1914-1918 and for the war of 1939-1945 the principle was acknowledged or assumed that it was for the Executive Government to decide what was necessary or expedient for the purpose of the war and in doing so to act upon its opinion of the circumstances and conditions that existed and of the policy or course of action that should be followed. … It would, I think, 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. … 200 … If the operation of the law upon the right of association, the common property and the civil rights of the members were made by the statute to depend upon the actual existence or occurrence of any act, matter or thing having a specific relation to the purposes of the power with respect to defence, then, notwithstanding that the immediate subject of the provision did not of its own nature form part of the subject matter of the power, the provision would be brought within it as ancillary to the main purpose of the power. … 201 … [T]he 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. … In such a case the result which the rule laid down produces or is calculated to produce is within the defence power and all that is lacking is an understanding of the process of causation between the conduct prescribed or prohibited and the result. That can be proved. … The essential matter here is a statement to the effect [6.210]

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Australian Communist Party v Commonwealth cont. that persons or bodies of persons have been guilty of acts which might have been penalized in advance under the defence power and have a propensity to commit like acts, this being recited as affording a supposed connection between the defence power and the operative provisions enacted, provisions dealing with the persons or bodies directly by name or description. … 202 … It must be evident that 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 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. These necessities make it imperative that the defence power should provide a source whence the Government may draw authority over an immense field and a most ample discretion. But they are necessities that cannot exist in the same form in a period of ostensible peace. … 203 … In the result I am of opinion that ss. 4 and 5, together with ss. 6, 7, 8 and 15, are invalid.

Notes&Questions

[6.220]

1.

2.

In formulating their decision, the majority judges in the Australian Communist Party Case clearly took particular exception to the extraordinary nature of the Act. They emphasised that there was an essential difference between, on the one hand, a law providing for the dissolution of associations as to which specified facts existed and, on the other hand, a law providing specially for the dissolution of a particular association. The first law might be supportable under the defence power but the other law could not be upheld, because the operation of the law was independent of any facts peculiar to the association, and a consideration of its legal effects did not disclose any relevance to the subject of the power. As far as the recitals were concerned they were regarded as containing Parliament’s reasons for passing the Act. The recitals were in no way decisive of the question whether the Act was valid or invalid. As McTiernan J (at 205–206) put it: “The Constitution does not allow the judicature to concede the principle that the Parliament can conclusively ‘recite itself’ into power.” Similarly, Fullagar J (at 263) said that the recitals in the preamble could not alter matters for “Parliament cannot recite itself into a field the gates of which are locked against it by superior law”. For an examination of the transcript of the case, see G Williams, “Reading the Judicial Mind: Appellate Argument in the Communist Party Case” (1993) 15 Sydney Law Review 3. Zines’s The High Court and the Constitution ((6th ed, 2015), p 332) said: The power of the Commonwealth to confer authority on members of the executive or administration is restricted by the Constitution in two major respects – first, by the principle of the separation of powers and, secondly, by the doctrine that no law can give power to any person (other than a court) to determine conclusively any issue upon which the constitutional validity of the law depends. The second doctrine is sometimes

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metaphorically summed up in the maxim “the stream cannot rise above its source”: Heiner v Scott (1914) 19 CLR 381 at 393 per Griffith CJ.

Do these two doctrines have the same scope of operation in acting as constraints on Commonwealth legislative power? 3.

Although the High Court judges invoked the doctrine that the stream cannot rise higher than its source, they were clearly troubled by the far-reaching impact of the legislation on fundamental liberties. As Professor George Winterton pointed out, there were other aspects to the decision of the court: “its confirmation of fundamental constitutional principles such as the rule of law, its impact upon civil liberties, its symbolic importance as a re-affirmation of judicial independence, and its political impact.” (G Winterton, “The Significance of the Communist Party Case” (1992) 18 Melbourne University Law Review 630 at 653.) The rule of law doctrine was thus extracted by implication from the Constitution. Dixon J (1951) 83 CLR 1 at 193, described the Commonwealth Constitution as an instrument framed in accordance with many traditional conceptions and said: “Among these I think that it may fairly be said that the rule of law forms an assumption.” A quarter of a century later, Murphy J took the opportunity in McGraw-Hinds (Aust) Pty Ltd v Smith (1979) 144 CLR 633 to refer to the operation of the rule of law as an implication arising from the nature of the Australian society (at 670). In Kartinyeri v Commonwealth (1998) 195 CLR 337, Gummow and Hayne JJ suggested that the concept of the rule of law had unexplored potential in remarking that “the occasion has yet to arise for consideration of all that may follow from Dixon J’s statement” (at 381 [89]).

4.

Consider the following comments of Professor George Winterton in “The Communist Party Case”, in Lee and Winterton (2003), pp 133-134: If the Communist Party case were litigated today, the Act would probably be invalid on the grounds not only that the Commonwealth lacked power to enact it, but also that it breached two implied prohibitions: the implied freedom of political communication (probably including an incidental freedom of association for political purposes), and the separation of judicial power.

Do you agree with this view?

Marcus Clark & Co v Commonwealth [6.230] Marcus Clark & Co Ltd v Commonwealth (1952) 87 CLR 177 at 215 [The plaintiff company sought declarations to the effect that the Defence Preparations Act 1951 (Cth) and the regulations made thereunder were void and alternatively that the Treasurer’s refusal of consent to certain applications of the plaintiff company were contrary to the regulations. The Defence Preparations Act 1951 contained a preamble which consisted of eight recitals. The recitals stated, inter alia, the existence of a state of international emergency, the necessity of providing for the raising, equipping and provisioning of armed forces, that the defence preparations of Australia included the adoption of measures to secure the maintenance and sustenance of the people of Australia, etc and the expansion of the capacity to produce and manufacture goods, and to provide services for the purpose of enabling the Australian economy to meet the probable demands upon it in the event of war. The sixth recital stated that defence preparations required the diversion of certain resources (including money, materials and facilities), for use in defence preparations. The key provision of the Act was s 4 which empowered the Governor-General to make regulations for, or in relation to, defence preparations. On 1 August 1951, the Governor-General purporting to act under s 4 made the Defence Preparations (Capital Issues) Regulations 1951 (Cth). The regulations prohibited, inter alia, certain borrowings by companies and certain share issues by companies unless the consent in writing of the Treasurer of the Commonwealth was first obtained. Regulation 16 provided that, where application [6.230]

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Marcus Clark & Co v Commonwealth cont. was made for the consent of the Treasurer, the Treasurer might, subject to reg 17, grant the consent (either unconditionally or on terms), or refuse to grant the consent. Regulation 17 provided that the Treasurer should not refuse consent or impose a condition “except for purposes of or in relation to defence preparations”. An aggrieved person could apply to the court for an order directing the Treasurer to state in writing the facts and matters by reason of which the refusal or imposition of the condition was for purposes of or in relation to defence preparations. The court was empowered to make such an order. The plaintiff company (Marcus Clark & Co Ltd) commenced action upon the refusal by the Treasurer to consent to the plaintiff company’s proposals to borrow money and to issue new shares. The High Court (Dixon CJ, McTiernan, Webb and Fullagar JJ; Williams and Kitto JJ dissenting) upheld the validity of s 4 of the Defence Preparations Act 1951 and the regulations by holding them to be laws with respect to defence within s 51(vi) of the Constitution.] Dixon CJ: 215 In considering the question whether they ought to be so characterised it is important to notice that, unlike the law held invalid in Australian Communist Party v Commonwealth (1951) 83 CLR 1, this case does afford objective tests by which its connection, or want of connection, with the defence power may be seen or ascertained; its provisions do specify a course to be pursued and considerations and purposes to be effectuated the operation and practical consequences of which will show whether the measure does tend or might reasonably be considered to conduce to or to promote or to advance the defence of the Commonwealth. On its face it is directed against the raising of money in a way which the Treasurer judges to be prejudicial to purposes that are described as purposes for or in relation to defence preparations, the scope and meaning of the term “defence preparations” being made sufficiently clear. The judicial remedies available to ensure that the judgment or discretion of the Treasurer does not go beyond what is the true scope and meaning of “defence preparations” may or may not prove adequate to the purpose but at all events it is the intention of the regulations that his determination of that question should not be conclusive.

Notes&Questions

[6.240]

1.

Professor Geoffrey Sawer (“Defence Power of the Commonwealth in Time of Peace” (1953) 6 Res Judicatae 214) pointed out that the art of the impugned regulations consisted in “concentrating attention on what had appeared to be the main vice of the Communist Party legislation – namely the extent to which it elevated the opinion of Parliament and the Executive at the expense of judicial control” (at 222). Nevertheless, Sawer expressed the opinion that the majority “fell into a trap”. He said (at 223): The procedures provided by the regulations for informing the Court as to the grounds on which the Treasurer had acted fell far short of vesting the Court with the power to decide the sufficiency of the connection between a particular refusal of additional capital and the expansion of the armed forces. The most that this procedure could do was to satisfy the Court that the Treasurer was bona fide of the opinion that the connection existed, and had acted on relevant considerations.

Thomas v Mowbray [6.250] Thomas v Mowbray (2007) 233 CLR 307 at 361–363, 449–460 [The enactment of anti-terrorism legislation has revived interest in the Commonwealth’s defence and Constitution-preservation powers. A challenge was directed to an interim control order issued by a Federal Magistrate under Div 104 of the Criminal Code (Cth). The object of the division was “to allow obligations, prohibitions and restrictions to be imposed on a person by a control order for the purpose of protecting the public from 550

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Thomas v Mowbray cont. a terrorist act.” Under s 100.1 of the Code, to be a “terrorist act”, the “action must be done, or the threat made, with the intention of advancing a political, religious or ideological cause, and the action must be done, or the threat made, with the intention of coercing or influencing by intimidation ‘the government of the Commonwealth or a State, Territory or foreign country’ (or part of a State, Territory or foreign country) or with the intention of ‘intimidating the public or a section of the public.’” The Division sets out provisions relating to the application for an interim control order, the making of such an order, the procedure to be followed in confirming an interim control order and the obligations, prohibitions and restrictions that may be imposed on a person by virtue of a control order. Division 104 under which the control order was made was challenged, inter alia, on the ground that it lacked a head of power to justify its validity. The defence power was among the heads of power called in aid of the law.] Gummow and Crennan JJ: 361 [139].… 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, as occurred in 1914 and 1939? [140] Such a limited view of the power is not reflected in the recent discussion in the joint judgment in New South Wales v The Commonwealth ((2006) 229 CLR 1 at 125-126 [212]). Further, 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 (See, eg, The Riot Act 1715 (1 Geo I, Stat 2, c 5) which was directed to preventing “tumults” and “riotous assemblies” which disturbed “the publick peace”). Thus, the law of treason fixed among other things upon the “levying of war” against the sovereign in his or her realm (See the text of The Treason Act 1351 (25 Edw III, Stat 5, c 2) set out in Joyce v Director of Public Prosecutions [1946] AC 347 at 365). In this context, the levying of war in the realm required an insurrection accompanied by force, for an object of a public or general nature (3 Coke’s Institutes §§9, 10; R v Frost (1839) 9 Car & P 129 at 161 [173 ER 771 at 785]). … 362 … [142] … [T]he 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. … 363 [144] 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”. This was how Fullagar J put it in the Communist Party Case (221). [145] The interim control order system may be said to be directed to apprehended conditions of disturbance, by violent means within the definition of “terrorist act”, of the bodies politic of the Commonwealth and the States rather than to violent conditions which presently apply. But three things should be said here. First, restrictions aimed at anticipating and avoiding the infliction of the suffering which comes in the train of such disturbances are within the scope of federal legislative power. Secondly, in that regard the defence power itself is sufficient legislative support without recourse to any implication of a further power of the kind identified by Fullagar J in the Communist Party Case. … [146] Thirdly, much attention has been given in various decisions, concerned particularly with the waging in World War I and World War II of “total war” and the “mobilisation” of economic resources, 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 [6.250]

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Thomas v Mowbray cont. within a central conception of the defence power, as explained in these reasons. Protection from a “terrorist act” as defined necessarily engages the defence power. Hayne J: 449 [411] … [T]he decisions in this Court about the defence power have for the most part focused upon issues presented in the context of either the First or the Second World War. Each of those conflicts was a war between nation states. Each had an identifiable commencement and an identifiable cessation of hostilities. The armed forces of the warring nation states were directly engaged in battle. But so too were the civilian populations of those states engaged in the prosecution of the war. … [412] … [T]he particular political and factual circumstances in which those cases were decided do not necessarily mark the boundaries of the legislative power with respect to the naval and miliary defence of the Commonwealth and of the several States. … 450 [417] By contrast, “terrorism” may be seen as raising new and different issues about legislative power. In part, perhaps in large part, that is because terrorism is a tactic that, by its very nature, may not necessarily be seen as evoking a military response. … 451 [419] …No bright line can be identified between some kinds of terrorism or terrorist that are “internal” and some that are “external”. It is, nonetheless, important to recognise that 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 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. … 452 … [424] … The plaintiff submitted, first, that actual or threatened aggression from a foreign nation is a circumstance that is essential to the proper application of the defence power. Secondly, the plaintiff submitted that the power is with respect to the defence of the Commonwealth and the several States as bodies politic, not the defence of citizens or inhabitants of the Commonwealth or the States in their “individual capacities as such, or their property”. … 457 … [437] But contrary to the plaintiff’s submissions, s 51(vi) is not to be read as a legislative power whose content is defined by one or more kinds of response to external threat. It may be accepted that “naval and military defence” does point to kinds of threat with which the power is concerned. In particular, the reference to “naval and military defence” reveals that, as Dixon J said in the Communist Party Case, the central purpose of the legislative power is protection of the Commonwealth from external enemies. It by no means follows from this observation, however, that the only permitted subject-matter of legislation made in reliance upon s 51(vi) is the provision for naval and military responses to such threats. The view that the power is confined in that way was rejected in Farey v Burvett. No less importantly, however, 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. [438] 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 means of applying lethal force have changed over time. Not only have weapons changed, the ways in which widespread harm may be inflicted have multiplied…. 458 [T]he 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. [439] 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 552

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Thomas v Mowbray cont. 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. [440] It may be accepted that, as the plaintiff submitted, the defence power is concerned centrally with the defence of the Commonwealth and the several States as bodies politic; the power does not focus upon the physical safety of individuals or their property. Nonetheless, it is important to recognise that in war, force is ultimately applied to persons and property. The aerial bombing campaigns of the Second World War show that force is applied in war in ways that directly affect civilian populations and their property. [441] 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, to that extent, be rejected as unhelpful. [442] There is, however, a related distinction that should be made. It may be drawn between the application of force by individuals whose motives for doing so are not to further any international political aim and the application of force in furtherance of international political 459 objectives. The latter kind of case, in which there are international political objectives, may engage the defence power; the former would seem unlikely to do so. Of course, it must be recognised that the distinction just described may be more difficult to draw in some cases than others, especially if the aim pursued is evidently not capable of fulfilment. And religious and ideological motives may present their own particular difficulties in that respect, especially if the aims being pursued were to be seen as utopian rather than practical. But these difficulties apart, it 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. [444] … The impugned provisions do not provide for administrative detention. They provide for restraints on liberty to the extent that those restraints are “reasonably necessary, and reasonably appropriate and adapted, for the purpose of protecting the public from a terrorist act”. Subject to the judicial power issues that will be considered separately, the impugned provisions are explicitly directed to the prevention of terrorist acts. … They are engaged in relation to the plaintiff in the circumstances earlier described. In that operation the impugned provisions are laws with respect to the naval and military defence of the Commonwealth. They 460 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.

[6.260]

1.

Notes&Questions

A majority of the High Court, Gleeson CJ, Gummow and Crennan J in a joint judgement, Callinan and Heydon JJ upheld the validity of Div 104 of the Code. Hayne J invalidated the impugned legislation on the ground that it in contravention of Ch III, but he shared the majority view that the impugned legislation was supported by the defence power. Kirby J dissented on the issue of the defence power. Following a lengthy consideration of the scope of the defence power (at 384–402 [220]–[268]), he found that Div 104 was not supported by the defence power because of its [6.260]

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“overreach”. Is the majority’s view of the defence power consistent with the view taken by the majority in the Communist Party Case? 2.

There was an interesting exchange between Callinan J and Kirby J on the significance of the Communist Party Case. Callinan J said (at 504–505 [589]): 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, as if there were a clear line between them for constitutional and all practical purposes, between times of peace and serious armed conflict, and internal and external threats. Perhaps it was the country’s recent emergence from a prolonged and costly declared war during which liberties had been curtailed and rights suspended, that influenced his Honour’s responses to the CPA. Latham CJ, although in dissent, was in a sense more perceptive and alive to the gravity of direct and indirect internal threats inspired externally, and the different manifestations of war and warfare in an unsettled and dangerous world. 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.

Callinan J went on to describe Latham CJ as “well informed no doubt by his far reaching and diverse experience as head of Naval Intelligence during the First World War, member of the Australian delegation to the Versailles Peace Conference after it, busy counsel, parliamentarian, attorney-general, leader of the opposition, first minister to Japan, and Chief Justice”. Kirby J retorted (at 393 [244]): With all respect, I do not accept that Latham CJ’s dissent in the Communist Party Case gains latter day authority because his political and diplomatic experience exceeded that of his colleagues. Dixon J too had very considerable diplomatic experience both during and after the War, working in wartime in close collaboration with Allied war leaders. He was to prove more aware of the lessons of history involving the misuse of executive powers. He also proved more capable of approaching the issue, as this Court should, as a legal and constitutional one – as guardian of the abiding values that lie at the heart of the Constitution.

And at 442 [386], Kirby J lamented: “I did not expect that, during my service, I would see the Communist Party Case sidelined, minimised, doubted and even criticised and denigrated in this Court.” He went on to assert: “Given the reasoning expressed by the majority in these proceedings, it appears likely that, had the Dissolution Act of 1950 been challenged today, its constitutional validity would have been upheld.” Do you agree with this assertion? 3.

554

See HP Lee, “Salus Populi Suprema Lex Esto: Constitutional Fidelity in Troubled Times”, in HP Lee and P Gerangelos (eds), Constitutional Advancement in a Frozen Continent (Federation Press, Sydney, 2009), pp 75-76; G Lindell, “The Scope of the Defence and Other Powers in the Light of Thomas v Mowbray” (2008) 10(3) Constitutional Law and Policy Review at 42–50; B Saul, “Terrorism as Crime or War: Militarising Crime and Disrupting the Constitutional Settlement?” (2008) 19 Public Law Review 20 at 25–28; O Roos, “Alarmed but not Alert in the ’War on Terror’? The High Court, Thomas v Mowbray and the Defence Power” (2008) 15 James Cook University Law Review 169.

[6.260]

CHAPTER 7 Commonwealth Financial Powers [7.10]

TAXATION ................................................................................................................. 555 [7.10] Sections 53 and 55 .................................................................................. 555 [7.20] What is a tax? ........................................................................................... 560 [7.30] [7.50] [7.60] [7.80]

[7.100]

[7.160]

R v Barger .................................................................................... Fairfax v FCT ................................................................................ Northern Suburbs General Cemetery Reserve Trust v Commonwealth ........................................................................... Roy Morgan Research v FCT ..........................................................

581 585 589 593

Limitations on the tax power: discrimination and preference ............ 599 [7.190] [7.230] [7.240]

[7.260]

560 563 568 577

Laws … with respect to … taxation ....................................................... 581 [7.110] [7.130] [7.150]

[7.180]

Air Caledonie International v Commonwealth ................................. Airservices Australia v Canadian Airlines International ..................... Australian Tape Manufacturers Ass’n v Commonwealth .................. Luton v Lessels .............................................................................

Elliott v Commonwealth ................................................................ 602 Fortescue Metals Group Pty Ltd v Commonwealth .......................... 614 Queensland Nickel Pty Ltd v Commonwealth .................................. 618

Taxation: incidental power and inconsistency ...................................... 620

[7.270] GRANTS ..................................................................................................................... 620 [7.270] Terms and conditions .............................................................................. 620 [7.280] [7.290] [7.310] [7.330]

[7.350]

Intergovernmental Financial Relations in Australia .......................... The First Uniform Tax Case ............................................................ The Second Uniform Tax Case ....................................................... The DOGS Case ...........................................................................

621 622 630 636

Circuitous devices .................................................................................... 639 [7.360] [7.370] [7.400]

DCT (NSW) v Moran .................................................................... 639 Moran v DCT (NSW) .................................................................... 642 ICM Agriculture v Commonwealth ................................................. 647

TAXATION Sections 53 and 55 [7.10] Section 51(ii) confers power on the Commonwealth Parliament to make laws with

respect to “Taxation; but so as not to discriminate between States or parts of States”. In addition to the express and implied constitutional prohibitions which limit all Commonwealth legislative powers (such as ss 51(xxxi) and 92 and the implied prohibition (or prohibitions) derived from federalism), the taxation power is subject to several further limitations. Taxation laws must not “discriminate between States or parts of States” (s 51(ii)), nor “give preference to one State or any part thereof over another State or any part thereof” (s 99). Sections 53 – 55 of the Constitution reflect the financial primacy of the House of Commons in the British Parliament, recognised by a resolution of that House on 3 July 1678: That all Aids and Supplies, and Aids to his Majesty in Parliament, are the sole Gift of the Commons: And all Bills for the Granting of any such Aids and Supplies ought to begin with the [7.10]

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Commons: And that it is the undoubted and sole Right of the Commons, to direct, limit, and appoint, in such Bills, the Ends, Purposes, Considerations, Conditions, Limitations, and Qualifications of such Grants; which ought not to be changed, or altered by the House of Lords.

Abuse of this power led the House of Lords to adopt a resolution against “tacking” on 9 December 1702: That the annexing of any Clause or Clauses to a Bill of Aid or Supply, the Matter of which is foreign to, and different from, the Matter of the said Bill of Aid or Supply, is Unparliamentary, and tends to the Destruction of the Constitution of this Government.

(These resolutions were quoted by the High Court in Northern Suburbs General Cemetery Reserve Trust v Commonwealth (1993) 176 CLR 555 at 578.) However, the detailed provisions in ss 53 – 55 embody the “Compromise of 1891” (adopted at the Sydney Convention of that year), as re-affirmed after intense debate at the Adelaide Convention of 1897: see generally B Galligan and J Warden, “The Design of the Senate”, in G Craven (ed), The Convention Debates 1891–1898: Commentaries, Indices and Guide (Legal Books, Sydney, 1986), 89 at pp 90-105; D Pearce, “The Legislative Power of the Senate”, in L Zines (ed), Commentaries on the Australian Constitution (Butterworths, Sydney, 1977), 119 at pp 119-137. Proposed laws imposing taxation must originate in the House of Representatives (the United States Constitution interestingly includes a similar provision: Art I, §7(1)) and, while the Senate may not amend such proposed laws, it may return them to the House of Representatives with a request that the House itself amend them (s 53). Moreover, although it cannot amend such Bills, it can reject them outright: Victoria v Commonwealth (the PMA Case) (1975) 134 CLR 81 at 121 per Barwick CJ, at 143 per Gibbs J, 168 per Stephen J, 185 per Mason J; Attorney-General (NSW) v Trethowan (1931) 44 CLR 394 at 420 per Rich J. Section 55 protects the Senate from abuse of s 53 by preventing the “tacking” of other matters onto “laws imposing taxation” (not all laws on the subject of taxation), and confining laws imposing taxation to one subject of taxation only. Section 55 refers to “laws” while ss 53 and 54 refer to a “proposed law” and “proposed laws”. This change in terminology had long been considered significant: s 55 referred to Acts, while ss 53 and 54 referred only to Bills, with the consequence that non-compliance was “not contemporaneously justiciable and [did] not give rise to invalidity in the resulting Act”, as the High Court put it in Northern Suburbs at 578. This view, essentially established in Osborne v Commonwealth (1911) 12 CLR 321 at 336, 351–352, 355–356 (and see Buchanan v Commonwealth (1913) 16 CLR 315 at 329), was characterised as “the traditional view” by the High Court, which expressed no opinion on the issue in Northern Suburbs at 578 per Mason CJ, Deane, Toohey and Gaudron JJ. Brennan J, on the other hand, appeared to endorse the traditional view, remarking that s 54 “relates to the passage of a Bill, not to the validity or effect of the Act when passed and assented to” (at 585). (Dawson and McHugh JJ found it unnecessary to consider this issue.) Two years later, the High Court appeared to adopt the “traditional view”, at least in respect of s 53, remarking that it: accords both with the text of s 53, which speaks of “proposed laws” rather than “laws” and with the intention manifested in the Convention Debates. (Western Australia v Commonwealth (the Native Title Act Case) (1995) 183 CLR 373 at 482 per Mason CJ, Brennan, Deane, Toohey, Gaudron and McHugh JJ.)

In Combet v Commonwealth (2005) 224 CLR 494 at 575 [155] Gummow, Hayne, Callinan and Heydon JJ noted that it was “unnecessary to decide whether a dispute about the application of [the aspects of ss 53 and 54 regarding proposed laws appropriating revenue or moneys for the ordinary annual services of the Government] could give rise to a matter to be decided by [the High] Court”. 556

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As a matter of logic, there is no inherent obstacle to judicial enforcement prior to enactment of constitutional provisions governing Bills. (After enactment they are no longer “proposed laws” but that would be a pedantic barrier if the constitutional requirements would have been judicially enforceable prior to enactment.) However, courts have generally shown great reluctance to interfere in the internal procedures of Parliament: see, eg, the PMA Case at 161 per Gibbs J, but cf Cormack v Cope (1974) 131 CLR 432. (Nevertheless, the provisions in s 57 dealing with “proposed laws” were enforced after enactment in the PMA Case. Section 53 was expressly held not to be analogous: at 161 per Gibbs J (Stephen J agreeing, at 180) and at 184 per Mason J. McTiernan J, in dissent, held the issue to be not justiciable, at 135–138.) However, ss 53 and 54 may be non-justiciable on the additional ground that they impose merely directory (not mandatory) requirements: see Pearce, “The Legislative Power of the Senate”, in Zines (1977), p 122. In interpreting the first paragraph of s 55, the High Court has noted that laws which “deal only with the imposition of taxation” are not confined to those which impose liability to taxation: What has been said does not mean that the expression “imposing taxation” and the expression “dealing with the imposition of taxation” are precisely synonymous. It does not mean that an Act imposing taxation can do no more than say “An income tax is imposed at the following rates”, and then specify the rates. It 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. … 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”. The creation of a liability and (eg) the enforcement of the liability by civil or criminal proceedings are different subject matters. “Dealing with the imposition of taxation” is a different thing from “dealing with taxation”, and the former expression does not mean or include “dealing with matters incidental to the imposition of taxation”. (Re Dymond (1959) 101 CLR 11 at 20–21 per Fullagar J, Dixon CJ, Kitto and Windeyer JJ concurring.)

However Menzies J (McTiernan J concurring) and probably also Taylor J, took a broader view, holding that laws regulating the assessment, collection and recovery of tax dealt with “the imposition of taxation” (at 24, 28). Earlier High Court justices had adopted a similar view. Without overruling Re Dymond, the High Court favoured the minority’s view of the first paragraph of s 55 in Permanent Trustee Australia Ltd v Commissioner of State Revenue (2004) 220 CLR 388 (the Mirror Taxes Case). In a joint judgment, Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ expressly agreed with the view of McTiernan, Taylor and Menzies JJ in Re Dymond that “provisions for the assessment, collection and recovery of tax are provisions which deal with the imposition of taxation” (at [68]). Their Honours noted that (at [68]–[69]): 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 v Commonwealth (1911) 12 CLR 321 at 373 and the latter that of Starke J in Federal Commissioner of Taxation v Munro (1926) 38 CLR 153 at 215. 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 [7.10]

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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 v Abrahams (No 2) (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 (at 419).

Their Honours had earlier discussed the purpose of s 55, noting that, while the Senate was to be protected from “tacking”, the House of Representatives was also to be protected from Senate abuse of its power over the machinery of taxation to impair the House’s primacy over taxation policy. “Tacking” was said by Deakin to have (at [60]): consisted invariably in the attempt to pass some foreign and usually very important measure by including it in some measure with regard to which the will of the people is believed to lie in a particular direction; and in the one legislative body seeking to take advantage of that to put the other in the position that it must either reject something which the people desire, or, if it accepts it, must accept also some other measure to which it has objections, and which it would reject if sent up as a separate measure. (Stephens v Abrahams (No 2) (1903) 29 VLR 229 at 235 arguendo.)

When s 55 is seen as directed to alleviating the mischief thereby indicated, a point made in the Convention Debates at Melbourne in 1898 by Mr R E O’Connor and Mr Kingston is of some force. This is the need for a construction of the first limb of s 55 that, while acknowledging the mischief against which it was directed, namely the abuses through “tacking” by the House of Representatives of its powers with respect to taxation, s 55, at the same time, guards against abuse by the Senate of the protection given against tacking of non-taxation measures by assertion of a power in the Senate to frustrate the enactment of effective taxation laws. O’Connor said (at [416]): We all know from experience that the machinery of taxation, which involves its incidence, the exceptions to be made, and a number of matters of that kind, may be so altered as to cut down the collectable value of a tax by one-half. It might be that a machinery Bill would be so altered as to make the tax which was sought to be imposed not worth collecting. If we want to hand over to the House of Representatives the sole power of dealing with the financial policy, as I think we do, we ought to see that they get it wholly, and that no one else is allowed to fritter it away. (Official Record of the Debates of the Australasian Federal Convention (Melbourne), 8 March 1898 at 2059.)

Kingston spoke more bluntly: It occurs to me that to negative the power of amendment in the Senate with regard to the imposition of taxation, while giving them full power, if they so desire, of mutilating the machinery necessary for the collection of the taxation, would be to give them, by a side-wind, control over the policy of taxation of the Commonwealth, and that they ought not to possess. (Official Record of the Debates of the Australasian Federal Convention (Melbourne), 8 March 1898 at 2058.) [61] … [I]t follows that the narrower the meaning given the phrase “shall deal only with the imposition of taxation”, the greater the scope for the Senate by amendment (not forbidden by s 53) of so-called machinery provisions to denude a taxing measure of its full efficacy. … [417] [63] … How, one might ask, is the mischief of “tacking”, with which the first limb of s 55 is particularly concerned, involved at all by denying a power of amendment of provisions for the assessment and collection of revenue raised by the one legislative measure? It is that consideration which guides a construction of s 55 to deal with any ambiguity in the expression of political thought it contains (at 415–417).

In the Mirror Taxes Case their Honours held that, although s 52(i) of the Constitution was subject to s 55, the Commonwealth Places (Mirror Taxes) Act 1998 (Cth) in issue did not breach s 55. McHugh and Kirby JJ decided the case on grounds other than s 55, which 558

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McHugh J therefore did not consider (at 433 [124]). Kirby J merely noted that he had “hesitation about the correctness of [the majority’s] conclusion concerning the application of the first limb of s 55 of the Constitution”, adding that “[c]ertainly, I agree that the issues raised under s 55 are justiciable” (at 469 [239]). See, further, PG Sharp, “The First Paragraph of Section 55” (2005) 33 Federal Law Review 569 (supporting the Mirror Taxes Case and arguing for ending the practice of splitting taxation measures into separate Acts, one imposing taxation and the other dealing with assessment, collection and recovery of the tax: at 579–581). The Migration Act 1958 (Cth) was enacted in 1958 and had frequently been amended. It did not impose taxation. The Migration Amendment Act 1987 (Cth) inserted into the Migration Act 1958 (as amended) a provision (s 34A) which did impose taxation. Should the High Court, in determining whether the first paragraph of s 55 had been complied with, examine each Act separately, or should it apply s 55 to the composite Migration Act 1958 as amended? The High Court unanimously adopted the latter approach in Air Caledonie International v Commonwealth (1988) 165 CLR 462. A literal application of the first paragraph of s 55 would have left the 1987 provision (the law imposing taxation) intact and the rest of the Migration Act 1958 invalid. The High Court, however, reached the opposite conclusion, invalidating only the 1987 Act: 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 (see, eg, Acts Interpretation Act 1901 (Cth), s 15) and is commonly treated as “exhausted” upon commencement and incorporation of the amendments which it effects in the principal Act. Indeed, no submission disputing that construction was advanced on behalf of the Commonwealth. On that construction, s 55 requires that both an amending [472] 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: cf Attorney-General (NSW) (Ex rel McKellar) v Commonwealth (1977) 139 CLR 527 at 550 per Gibbs J, 560 per Stephen J with whom Mason J agreed. 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 (at 471–472). [7.10]

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The High Court adopted the same approach in Australian Tape Manufacturers Association Ltd v Commonwealth (1993) 176 CLR 480. What constitutional purpose is served by applying s 55 to composite legislation? How is the purpose of s 55 (to protect the Senate from “tacking”) served by that approach? How significant was the Commonwealth’s failure to oppose that interpretation in argument before the High Court? Should the court’s willingness to interpret the Constitution favourably to the Commonwealth (or the States) be influenced by the failure of the Commonwealth (or the States) to press that interpretation in argument before it? For discussion of s 55, see Hanks, Gordon and Hill, Constitutional Law in Australia (3rd ed, 2012), pp 136-142. What is a “tax”? [7.20] Section 53 itself distinguishes taxation from fines and other pecuniary penalties, and

fees for licences or for services. However, these charges and fees by no means exhaust the possible alternatives to taxation, a field which is still open and includes, eg, a royalty, a fee for a privilege, and a fee for the acquisition or use of property. The foundational modern case on this subject is Air Caledonie International v Commonwealth. In the earlier case of Matthews v Chicory Marketing Board (Vic) (1938) 60 CLR 263 at 276, Latham CJ stated that a tax is “a compulsory exaction of money by a public authority for public purposes, enforceable by law, and … not a payment for services rendered.” While not regarded as an exhaustive definition, the attributes of a tax which it posits, both positive and negative, constitute the basis for the development of definition and principle in this area.

Air Caledonie International v Commonwealth [7.30] Air Caledonie International v Commonwealth (1988) 165 CLR 462 at 465–471 [The Migration Amendment Act 1987 (Cth), s 7 added s 34A to the Migration Act 1958 (Cth). That provision, imposing a “fee for immigration clearance” on passengers travelling to Australia on an overseas flight, was held (unanimously) to be a law imposing taxation within s 55 of the Constitution. The s 55 issue is dealt with above.] Mason CJ, Wilson, Brennan, Deane, Dawson, Toohey and Gaudron JJ [delivered the following joint judgment]: 465 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 who had not been exempted (as a “prescribed passenger”) by regulation. The fee was to be collected (“shall 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”. … 466 In Lower Mainland Dairy Products Sales Adjustment Committee v Crystal Dairy Ltd [1933] AC 168 at 175, the Privy Council identified three features which sufficed to impart to the levies involved in that case the character of a “tax”. Those features were that the levies: were compulsory; were for public purposes; and were enforceable by law. In Matthews v Chicory Marketing Board (Vic) (1938) 60 CLR 263 at 276, Latham CJ adopted those three features as the basis of 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 467 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” (see, eg, Browns Transport Pty Ltd v Kropp (1958) 100 CLR 117 at 129). 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 639; Deputy Federal Commissioner of Taxation v Truhold Benefit Pty Ltd (1985) 158 CLR 678 at 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, 560

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Air Caledonie International v Commonwealth cont. 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, in Logan Downs Pty Ltd v Queensland (1977) 137 CLR 59 at 63, Gibbs J made explicit what was implicit in the reference by Latham CJ to “a payment for services rendered”, namely, that the 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. [Emphasis added.] 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. 468 … 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. 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 469 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, and notwithstanding the countervailing analogy of a customs duty which is clearly a tax, 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 (and pay the amount of it to the Commonwealth if not collected from the passenger) 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 only exemption was of those whom the Executive might see fit to prescribe by regulation. 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. It has not been, and it could not sensibly be, suggested that the provisions of s 34A could be transformed, by any acceptable process of severance or reading down, from provisions imposing clearance “fees” upon, or with respect to, arriving airline passengers generally into provisions discriminating against visiting non-citizens or non-nationals by imposing a form of entry fee only in relation to them. 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 [7.30]

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Air Caledonie International v Commonwealth cont. 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 470 Latham CJ in Matthews v Chicory Marketing Board (1938) 60 CLR 263 at 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 (see s 34A(1)) 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 re-enter 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 (see Migration Regulations, reg 4) may be necessary, in the public interest, to enable the entry of non-citizens to be prevented or 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 (or in any other provision of the Act) 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. 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. In these respects, the impost which s 34A purported to exact is to be contrasted with the nominated statutory fee of ten dollars (no other having been prescribed) for the processing of a particular individual’s application to become an approved pathologist which was held not to be a tax in General Practitioners Society v Commonwealth (1980) 145 CLR 532. Indeed, one need do no more than refer to the second reading speech of the responsible Minister, to which both sides referred the Court, to confirm that the moneys intended to be raised by the purported impost were not related to particular services to be supplied to particular passengers but were intended to provide, when paid into consolidated revenue, a general off-setting of the administrative costs of certain areas of the relevant Commonwealth Department, including, for example, the administrative costs involved in maintaining facilities for the issue of visas in overseas countries and “general administrative overheads”. Therefore, the fee 471 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”.

Notes&Questions

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For a levy to be a fee for services, there must be some proportionality between the fee and the cost or value of the services provided: Harper v Victoria (1966) 114 CLR 361 at 378 per Taylor J, at 379 per Menzies J, at 382 per Owen J; Logan Downs Pty Ltd v Queensland (1977) 137 CLR 59 at 63 per Gibbs J. See also General Practitioners Society v Commonwealth (1980) 145 CLR 532 at 562 per Gibbs J (Stephen, Mason [7.40]

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and Wilson JJ concurring). The High Court adopted a rather flexible approach to proportionality in Airservices Australia v Canadian Airlines International Ltd (2000) 202 CLR 133, extracted at [7.50] The court’s comment in Air Caledonie on compulsory levies is somewhat ambiguous, leaving it unclear whether the fee would be a tax because it was compulsory or because it bore “no discernible relationship with the value of what is acquired” (at 467). However, the qualification “at least to the extent that it exceeds that value” suggests the latter. Earlier cases had held that a levy which was practically compulsory could be a fee for services: General Practitioners Society v Commonwealth (1980) 145 CLR 532 at 561–562 per Gibbs J (Stephen, Mason and Wilson JJ concurring); Harper v Victoria (1966) 114 CLR 361, especially at 377 per McTiernan J. (Barwick CJ doubted this proposition (at 376), though ultimately leaving it open, but the other justices reached the same conclusion as McTiernan J.) These authorities were not referred to in Air Caledonie, and so presumably remain unquestioned. Airservices Australia v Canadian Airlines International Ltd (2000) 202 CLR 133 recognised that a practically compulsory charge could be a “fee for services”: see, especially, Gaudron J at 190 [133] (Hayne J concurring) and McHugh J at 232 [290]. Consider the statement (at 467) that “that there 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.” Whilst reading the extracts which follow, consider to what extent the High Court has confirmed this statement. The Court noted, at 468, that a fee or charge may well have all the positive attributes of a tax but this was not sufficient to determine the issue. It is necessary also to examine other “special” attributes to the fee and “the circumstances in which it was purportedly exacted” to determine whether these preclude the characterisation of the fee as “taxation”. In other words, both positive and negative attributes are necessary to be considered. This is borne out clearly in the following case.

Airservices Australia v Canadian Airlines International [7.50] Airservices Australia v Canadian Airlines International Ltd (2000) 202 CLR 133 at 231–241, 178–179, 192 [The Civil Aviation Authority (CAA) (to which the appellant was the successor) was established by the Civil Aviation Act 1988 (Cth) as a corporation to perform various functions relating to civil aviation, in particular to ensure safety. Section 66(2)(a) of the Act empowered the CAA to make determinations fixing charges and specifying by whom and when they were payable. Section 66(1) defined “charge” to mean a charge for a service or facility provided, or a charge in respect of a matter in relation to which expenses are incurred, by the CAA. Section 67 provided that “The amount or rate of a charge shall be reasonably related to the expenses incurred or to be incurred by the [CAA] in relation to the matters to which the charge relates and shall not be such as to amount to taxation.” Pursuant to s 69, the CAA was effectively granted a statutory lien over unpaid charges or penalties relating to an aircraft. Section 72 authorized the seizure, and s 73 the sale, by the Authority of an aircraft in respect of which outstanding amounts covered by a statutory lien remained unpaid for nine months. Compass, which operated a domestic Australian air service, went into provisional liquidation owing the CAA substantial amounts for charges for air traffic, rescue, fire-fighting and meteorological services. These were covered by statutory liens, which the CAA invoked, on the aircraft used by Compass. These were leased from the respondents who challenged the validity of the charges on the grounds (a) that they “did not reasonably relate to the expenses incurred or to be incurred in relation to the matters to which those charges related”, and (b) were such as to amount to “taxation” and, accordingly, that the charges were not fixed in accordance with s 67 of the Act. The charges had been [7.50]

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Airservices Australia v Canadian Airlines International cont. fixed by reference to a “network” concept, taking into account “Ramsey” economic pricing principles, that is, fixing the rate of the charge by reference to the maximum take-off weights of aircraft, not by reference to the actual cost of providing services or facilities for individual aircraft. The Full Federal Court had upheld the decision of Branson J at first instance that the charges were invalid as amounting to “taxation”. In the High Court, six justices, Callinan J not addressing this issue, held that the charges were validly imposed. They were not “taxation”, but rather fees for services.] McHugh J: 230 Are the charges “such as to amount to taxation”? The meaning of “taxation” in s 67 …[286] 231 … I would regard the word “taxation” in s 67 of the Act as equivalent to “taxation within the meaning of s 55 of the Constitution”. … Distinction between “taxation” and “fee for services” [287] In Matthews v Chicory Marketing Board (Vic) (1938) 60 CLR 263 at 276 Latham CJ listed features which, if present, indicate that an exaction of money is taxation: “a compulsory exaction of money by a public authority for public purposes, enforceable by law, and … not a payment for services rendered.” [288] In this case it does not automatically follow from the conclusion that the charges are “reasonably related to the expenses incurred or to be incurred … in relation to the matters to which the charge relates” that the charges are “fees for services” and therefore not taxation. No doubt the existence of this relationship means that the charges are, prima facie, to be regarded as fees for services. However, there are two reasons why a conclusion that 232 the charges are not taxation cannot be reached without further analysis. [289] First, the services were ones which an aircraft operator was required by law to acquire if he or she wished to fly in Australian airspace (see, eg, reg 100(1) of the Civil Aviation Regulations (Cth) which stated that “[a]n aircraft shall comply with air traffic control instructions. Penalty: $5,000”). If the operator wished to fly in Australian airspace, he or she had no practical alternative but to acquire the services in question. Thus, in a practical sense, the exaction was compulsory and the compulsory nature of the exaction is an indication that a charge is taxation. In General Practitioners Society v Commonwealth (1980) 145 CLR 532, however, Gibbs J said that “the fact that the service for which the fee is charged is one which the practitioner is in effect compelled to obtain does not in my opinion alter the character of the fee or convert it into a tax” (at 562). [290] In this case, the aircraft operators were not compelled to fly in Australian territory, but they were compelled to obtain at least some of the services (such as air traffic control services) if they wished to do so. The material facts of the case cannot be distinguished from those in General Practitioners. Accordingly, in my opinion, the element of practical compulsion involved in the charges does not destroy the prima facie character of the charges as fees for services. [291] Second, and more significantly, the pricing structure employed by the Authority was such that it was not possible to identify a discernible relationship at the lowest level between the amount of a particular charge and the value of the particular service received by a particular user as the quid pro quo for the charge. This feature of the charging structure is an indication that the charges are taxation. … [297] 234 … Air Caledonie ((1988) 165 CLR 462) and Harper v Minister for Sea Fisheries (1989) 168 CLR 314 show that the emphasis in determining whether a fee for services is taxation has shifted from cost to value. Unless this shift had been made, it would have been difficult, if not impossible, to describe the charge in Harper v Minister for Sea Fisheries as a fee for services. In that case, the formula for determining the licensing fee was explicitly related to the market value of abalone taken in the previous licence period and there was no attempt to relate the amount of the licence fee to the cost of administering the licensing scheme. [298] In my opinion, however, the shift from “cost” or “expenses” in the earlier cases to “value” in Air Caledonie and Harper v Minister for Sea Fisheries is not a conceptual shift. It is really a recognition of the fact that the cost of a service is merely evidence of whether the payment is for that service. Thus, the expenses incurred in providing, or the costs of providing, a service are simply one criterion of the relationship. In Harper v Minister for Sea Fisheries, on the other hand, market value, as promulgated by declaration in the Gazette by the Director of the relevant 564

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Airservices Australia v Canadian Airlines International cont. government department, was the relevant criterion for determining whether the payment was for the benefit acquired. In Air Caledonie, the issue of “value” did not arise, as the Court held that (at 470): [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. [299] In the present case, the Authority had a monopoly in the provision of relevant services. The need for a unified system of air traffic control suggests that there is no way in which these services could practicably be provided other than by a monopolist. Moreover, an aircraft operator had no choice as to whether or not to obtain these services if he or she wished to fly in Australia. In the situation of a natural monopolist, no supply side competition exists. There is nothing to generate a market value. The relevant measure of value would seem to be the cost of providing, or the expenses incurred in providing, the service. For present purposes, I will assume that these costs or expenses could 235 include a reasonable rate of return on assets as a “cost of capital”, and return to this issue later. [300] In Air Caledonie, the Court indicated that, to be characterised as a “fee for services”, the relevant charge must be “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 470). When this requirement as to the individual nature of the service is combined with the requirement that there must be a discernible relationship between the value of the service provided and the amount or rate of the charge, it tends to suggest that there must be a discernible relationship between the particular charge for the service provided on a particular occasion and the cost of providing that service, or the value of receiving that service. … [McHugh J quoted passages from Air Caledonie and Northern Suburbs General Cemetery Reserve Trust v Commonwealth (1993) 176 CLR 555 and continued:] [305] 237 The above passages may be read as indicating that, to avoid characterisation as a tax, this Court has required some relationship between the amount of a particular charge imposed and the value of the services actually received by a particular person on a particular occasion. However, in both Air Caledonie and Northern Suburbs, it could not be said that there was a particular identifiable service provided to the person liable to pay the charges. In terms of their ratio decidendi, Air Caledonie and Northern Suburbs did not hold the charges in question to be taxes because the charges levied in relation to the service did not bear a discernible relationship to the value of that service. Those cases held that the charges were taxes for the reason that no particular service could be identified. In the present case, it is clear that a service, however identified, was being provided. [306] But in any event, I am of the opinion that, even if the accepted doctrine of the Court is that there should be a discernible relationship between a particular charge and the value of a particular service in order for the charge to be characterised as a “fee for service”, that suggestion ought to be considered afresh in light of the circumstances in this case. Relevance of “user pays” to characterising a charge as taxation or a fee for services [307] If it were correct that there must be a relationship between the particular charge levied and the particular service received, statutory authorities would be constrained to relating charges to the marginal cost of providing the service in order that the charges not amount to taxation. Where the statutory authority has high fixed costs and low variable costs, this constraint would mean that it would not be able to fully recover its costs. In that case, the statutory purpose, such as that underlying the Act, could not be achieved. The issue then, is whether such a consideration can be legitimately taken into account in determining whether a charge is taxation or a fee for services. [308] In R v Barger (1908) 6 CLR 41 at 68, Griffith CJ, Barton and O’Connor JJ referred to the meaning of “taxation” in s 51(ii) and said: “[W]hatever [taxation] meant in 1900 it must mean so long as the Constitution exists.” This comment may express no more than the traditional distinction between 238 the connotation or meaning of a constitutional term, which does not change, and the denotation or application of a constitutional term, which changes as circumstances change. In any event, in light of [7.50]

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Airservices Australia v Canadian Airlines International cont. current notions of legitimate methods of constitutional interpretation, the comment is not determinative of the factors which may be taken into account in characterising a charge as taxation or a fee for services. … [309] Accordingly, in my opinion, in characterising a charge as a fee for services or taxation, it is legitimate to take account of the changing circumstances of government which are exemplified by the devolving of functions from government departments to statutory authorities or other corporate bodies which, under the terms of their enabling statutes, have a monopoly on the provision of a certain service and are directed by the legislature to provide those services on a “user pays” basis (as is the CAA). Charges by such authorities and bodies should be seen as essentially cost driven, imposed on users for the purpose of reimbursing the cost of services provided. They should not be 239 approached as if they were imposed simply to raise revenue for the general government of the country. The utility of “discernible relationship” as a discriminant of characterisation in these circumstances [310] The rationale behind using the existence of a discernible relationship between the value of the particular service received and the amount of the exaction as an indicia [sic] of a fee for service appears to be based on two related propositions. First, where there is no discernible relationship, it is easier to infer that there is a revenue-raising purpose behind an exaction. (In General Practitioners Society v Commonwealth (1980) 145 CLR 532 at 562, Gibbs J said: “an exaction may be so large that it could not reasonably be regarded as a fee”.) In Fairfax v Federal Commissioner of Taxation (1965) 114 CLR 1 at 19, Windeyer J pointed out that: [t]axes are ordinarily levied to replenish the Treasury, that is to provide the Crown with revenue to meet the expenses of government. That is the prime purpose of the income tax. [311] In Northern Suburbs General Cemetery Reserve Trust v Commonwealth (1993) 176 CLR 555 at 568–569, Mason CJ, Deane, Toohey and Gaudron JJ answered the plaintiff’s argument that the law was not taxation because there was no revenue-raising purpose by identifying a revenue-raising purpose which could be discerned from the operative provisions of the statute, even though it was not set out in its objects. Northern Suburbs indicates that, while “in the characterisation of a law with respect to taxation, the legislative purpose has limited relevance” (176 CLR at 570), it is nevertheless a factor to be taken into account in determining whether a law is a law “with respect to taxation” within s 51(ii) of the Constitution. In my opinion, the existence or non-existence of a revenue-raising purpose has greater relevance when the issue is whether an exaction is “taxation” or a “fee for services” by reason of a lack of a discernible relationship between the value of a particular service and the amount of the exaction. That is because the presence of a discernible relationship negatives the inference that the charge was imposed for a revenue-raising purpose. [312] Second, the operation of the market generally means that there will be a relationship between the value of a service provided by the private sector and the fee imposed by the private sector for that service. Thus, an exaction for a service exhibiting this characteristic can be seen to be commercial in nature. Hence it can be characterised as a “fee” even though it is levied by a public authority. But, as the evidence in this case discloses, where a natural monopoly exists, whether in the public or private sector, there are difficulties associated 240 with levying a price which exhibits a discernible relationship to the value of the service provided to a particular user on a particular occasion. Where services are provided by a public authority with a natural monopoly and where the statutory context and the surrounding circumstances otherwise fail to indicate a revenue-making purpose for a charge, the lack of a discernible relationship between the value of a particular service received on a particular occasion and the amount of the charge for that service does not necessarily indicate that the charge has the character of a tax. … [314] In my opinion, the following elements of the statutory context and the circumstances of this case indicate that the charges are properly characterised as fees for services: the services were provided by a statutory authority which had as one of its statutory functions the provision of those services or services of that general type; the position of the statutory authority in providing the services approximated that of a natural monopolist; the statutory authority was (at least impliedly) directed under statute to recover the costs of providing those services from the users of those services; the statutory authority exhibited a large degree of financial independence from the executive government 566

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Airservices Australia v Canadian Airlines International cont. and was intended to operate on a commercial basis; and the pricing structure which gave rise to the lack of a discernible relationship between the value of the services provided on a particular occasion and the charge levied for those services (in this case, Ramsey pricing) was a reasonably and appropriately adapted means of achieving a legitimate public purpose (other than revenue raising) which was related to the functions, powers or duties of the statutory authority. [315] These matters support the inference that the lack of a discernible relationship arises from factors, commercial in nature, related to implementing the “user pays” principle of public policy by a body which is financially separate from government. They therefore negate the inference that the particular pricing structure arises from a revenue-raising purpose. Where the total charges recovered for providing the services exceeds the total cost of providing the services, however, a rebuttable presumption naturally arises that the pricing structure is employed for a revenue-making purpose. [316] Here the evidence disclosed that the rates of the charges were calculated by making an estimate of the total outgoings of the Authority for the 1991–92 year, adding to this figure 7.5% of the value of the Authority’s assets (representing the rate of return on assets) and subtracting the interest charges. There is no suggestion that the figure of 7.5% is an unreasonable rate of return on the assets in question. But can that 7.5% rate of return be properly included in the “costs” of the Authority? 241 [317] The degree of financial autonomy of the Authority from the executive government indicates that a reasonable rate of return on assets from the Authority to the Commonwealth may be legitimately considered to be the cost to the Authority of utilising capital provided by the Commonwealth to provide the services in question. Section 54 of the Act indicates that the capital of the Authority was to be regarded as separate from the capital of the Commonwealth and that the capital of the Authority was, in a large part, previously capital of the Commonwealth. Although s 54(2) stated that “[i]nterest is not payable to the Commonwealth on the capital of the Authority, but the capital of the Authority is repayable to the Commonwealth at such times, and in such amounts, as the Minister determines in writing”, s 45 demanded that “[w]hen preparing the financial plan, the Board shall consider”, inter alia, “the need to earn a reasonable rate of return on the Authority’s assets (other than assets wholly or principally used in the performance of regulatory functions or the provision of search and rescue services)”. [318] The rate of return required by the Commonwealth arose as an incident of the Commonwealth utilising the Authority to provide the services in question. The Commonwealth required that its assets provide a reasonable rate of return … [T]he overarching purpose of the requirement, as discerned from the operation of the Act, was to allow the Authority to provide the services in question while minimising the opportunity cost to the Commonwealth. It was not to “replenish the Treasury” (Fairfax v Federal Commissioner of Taxation (1965) 114 CLR 1 at 19). The charges are not such as to amount to taxation [319] It follows that in the statutory context of this case the lack of a discernible relationship between the charge levied for, and the value of, a particular service provided on a particular occasion, does not destroy the prima facie character of the charges as fees for services. All the charges in question are therefore properly regarded as fees for services and do not amount to taxation. Gleeson CJ and Kirby J delivered a judgment to the same effect, concluding: [91] 178 Not all taxation has as its primary purpose the raising of revenue; and some forms of taxation are notoriously inefficient means to that end. An objective of raising revenue is not, therefore, a universal determinant. Even so, the presence or absence of such an objective will often be significant. [92] 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. [7.50]

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Airservices Australia v Canadian Airlines International cont. 179 [93] 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. [94] It has not been shown that the subject charges were such as to amount to taxation. Gaudron J [delivering a judgment to the same effect, concluded]: 192 [141] In a commercial context of the kind described, it seems to me that, notwithstanding that charges apply differently to different users and reflect neither the cost nor the value of the particular service rendered, they are properly characterised as fees for service if three conditions are met. The first is that they are levied only against persons who use the services. The second is that they are levied against all such users. The third is that there is a commercial justification for discriminating between different users. [142] It is not in issue that only those who used or availed themselves of the services and facilities provided by the Authority were liable to pay the charges now in question and that all such users were liable to a charge for their use. Moreover, where services are provided by a public sector monopoly on a commercial basis, there is a sound reason for fixing prices according to price sensitivity or demand elasticity. Put at its simplest, if those who are price sensitive are forced out of the market, the cost to others will necessarily increase. That being so, the landing and en route charges are, in my view, properly to be characterised as fees for services and do not involve any element of taxation. [Gummow and Hayne JJ delivered judgments to the same effect, the latter concurring in the judgment of Gaudron J on the “taxation” issue (at [516]).]

[7.55] In holding that a levy could be a tax even if imposed for non-public purposes, Air Caledonie raised the obvious question of whether a fee not payable to the government could be a tax. This issue arose five years later in Australian Tape Manufacturers Association v Commonwealth (the ATM Case).

Australian Tape Manufacturers Ass’n v Commonwealth [7.60] Australian Tape Manufacturers Association Ltd v Commonwealth (1993) 176 CLR 480 at 496–532 [Part VC of the Copyright Act 1968 (Cth), inserted by the Copyright Amendment Act 1989 (Cth), was designed to compensate copyright owners for the private and domestic taping of sound recordings. It included s 135ZZP(1) which imposed a “royalty” on vendors of blank tapes. The “royalty”, determined by the Copyright Tribunal, was payable to the “collecting society” which represented copyright owners. Section 135ZZM(1) provided that copyright in a published sound recording was not infringed by making a copy on blank tape on private premises for the private and domestic use of the copier. Purchasers of blank tapes to be used for purposes other than copying sound recordings were entitled to payment from the collecting society of an amount equal to the royalty. The legislation was challenged on several grounds, including contravention of s 55, paragraph 1 of the Constitution, which raised the question whether s 135ZZP(1) imposed a “tax”. The High Court held (by a 4:3 majority) that it did. Accordingly, this 1989 amendment of the Copyright Act was in breach of s 55 and invalid.] Mason CJ, Brennan, Deane and Gaudron JJ: 496 The effect of the scheme is that private and domestic recording … is not an infringement of copyright. Nonetheless, the amount levied on the vendors of blank tapes is described as a 497 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 568

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Australian Tape Manufacturers Ass’n v Commonwealth cont. 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. The levy is not a royalty In the first instance, it is convenient to dispose of the suggestion that the levy imposed upon the vendors of blank tapes is a royalty or something analogous to a royalty. In the context of mineral royalties, patent and copyright royalties and royalties in respect of rights to cut and remove timber, it is of the essence of a royalty that the payments should be made in respect of the exercise of a right granted and should be calculated in respect of the quantity or value of things taken, produced or copied or the occasions upon which the right is exercised (Stanton v Federal Commissioner of Taxation (1955) 92 CLR 630 at 642; Federal Commissioner of Taxation v Sherritt Gordon Mines Ltd (1977) 137 CLR 612 at 626). It is clear that the levy imposed in respect of the sale of blank tapes does not fit this conception. The vendor receives no right, benefit or advantage in consideration of the levy or payment of the levy. The payment is not made in consideration of the grant of a licence to sell blank tapes; nor is it made in respect of the particular exercise of any right, benefit or advantage obtained by the vendor. It is not the case that, in consideration of payment of the levy, the vendor is permitted to do something which would otherwise amount to an infringement of copyright. The sale of a blank tape does not constitute an authorization by the vendor to infringe copyright. That is principally because the vendor has no control over the ultimate use of the blank tape (University of New South Wales v Moorhouse (1975) 133 CLR 1 at 12–13, 20–21; RCA Corporation v John Fairfax & Sons Ltd [1981] 1 NSWLR 251 at 257–259; WEA International Inc v Hanimex Corporation Ltd (1987) 17 FCR 274; CBS Songs Ltd v Amstrad Consumer Electronics Plc [1988] AC 1013 at 1052–1055 per Lord Templeman) … 498 A second reason for rejecting the notion that the levy imposed on 499 the sale of blank tapes is a royalty is that, although the net proceeds of the levy are distributed through the medium of the collecting society to copyright owners, that payment is not in consideration of, or associated with, the grant of a right to copy copyright work or the exercise by anyone of such a right. That is because the Act provides that home copying of sound recordings for private and domestic purposes is not an infringement of copyright. The Commonwealth contends that the purpose of Pt VC and s 153E is to recompense copyright owners in respect of home copying of sound recordings on terms that are consistent with the public interest. So much may be accepted without acknowledging that the existence of this statutory purpose stamps the imposition of the levy with a character inconsistent with that of a tax. As we have just pointed out, the statutory purpose of recompensing relevant copyright owners does not entail the provision of compensation to them for any right granted by them. Rather, the statutory purpose is to provide compensation by means of the levy because the Act deprives the relevant copyright owners of what was formerly an exclusive right which was an element in their copyright, albeit one which was, in practical terms, incapable of enforcement. … Section 135ZZP(1) imposes taxation 500 That brings us to the questions whether the levy is a tax and whether Pt VC or any part of it and s 153E 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 (Vic) (1938) 60 CLR 263 at 276, that 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”. Although the elements in this statement have been recognized as the positive and negative attributes of a tax (Browns Transport Pty Ltd v Kropp (1958) 100 CLR 117 at 129), 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 Commonwealth (1988) 165 CLR 462 at 467). [7.60]

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Australian Tape Manufacturers Ass’n v Commonwealth cont. 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 Commonwealth the Court said (at 467): 501 [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 the United States, it has been held that a tax is an exaction for the support of government. [The joint judgment considered relevant United States case and continued:] The Supreme Court has taken the same view of a revenue Bill within the meaning of the origination clause in the United States Constitution (Art 1, s 7, cl 1, which provides: “All Bills for raising Revenue shall originate in the House of Representatives.”), notwithstanding that the language of that clause differs from that of the taxing and spending clause (Art 1, s 8, cl 1, which confers power “[t]o lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States”). “[R]evenue bills are those that levy taxes in the strict sense of the word, and are not bills for other purposes which may incidentally create revenue” (Twin City Bank v Nebeker (1897) 167 US 196 at 202, citing Story, Commentaries on the Constitution of the United States (5th ed, 1891), vol 1, pp 642-643, §880). … Very recently, in United States v Munoz-Flores (1990) 495 US 384, the Supreme Court rejected a challenge to the validity of a statute creating a “Crime Victims Fund” to which was paid moneys from assessments made in the sentencing of offenders. The Court did not accept the argument that there is a requirement that a Bill must benefit the payer to avoid classification as a revenue Bill. The Court said (at 398): [A] statute that creates a particular governmental program and that raises revenue to support that program, as opposed to a statute that raises revenue to support Government generally, is not a “Bil[l] for raising Revenue” within the meaning of the Origination Clause. … 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 (R v Barger; Commonwealth v McKay (1908) 6 CLR 41 at 82, per Isaacs J: “[T]he imposition of a tax on any person or thing for the benefit of the Consolidated Revenue is taxation, and taxation within the meaning of the Constitution”; Moore v Commonwealth (1951) 82 CLR 547 at 561, per Latham CJ: “The moneys collected are paid into consolidated revenue … The moneys can then be spent for any purpose for which the Commonwealth may lawfully appropriate money”; see also at 572, per McTiernan J. See also Dennis Hotels Pty Ltd v Victoria (1960) 104 CLR 529 at 548, per Dixon CJ). 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, like that of its Imperial ancestor 27 Geo III c 13 (1787), was to ensure that the revenues of the Crown, including taxes, were brought together in one Consolidated Revenue Fund (Northern Suburbs General Cemetery Reserve Trust v Commonwealth ((1993) 176 CLR 555 at 574–575) under the control 570

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Australian Tape Manufacturers Ass’n v Commonwealth cont. of Parliament. To hold that revenues or moneys that are not treated in 504 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” (“The primary meaning of ‘taxation’ is raising money for the purposes of government by means of contributions from individual persons” (emphasis added): 68R v Barger; Commonwealth v McKay Barger (1908) 6 CLR 41 at 68, per Griffith CJ, Barton and O’Connor JJ). 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 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 ((1988) 165 CLR at 467). … 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 505 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. In terms of public purpose, the present case may be compared with Attorney-General (NSW) v Homebush Flour Mills Ltd (1937) 56 CLR 390 where the Flour Acquisition Act 1931 (NSW) purported to expropriate flour and vest it in the Crown on terms that the owners were entitled to compensation at a fair and reasonable price, a price fixed by a committee under the Act, and were entitled to buy the flour back at the standard price, a higher price fixed by the Governor-in-Council. The difference, after deduction of expenses, was to be paid into a special fund for the relief of necessitous farmers. The Flour Acquisition Act 1931 was held to impose a duty of excise and to contravene s 90 of the Constitution. Starke J observed (at 408): Here the effect and operation of the Act is to levy upon or extort from the owners of flour a sum of money or its equivalent in value, not in exchange for any service rendered to them but for a government purpose, namely, the relief of necessitous farmers. Such a charge is properly described as a tax or duty. The case differs from the present case in that the difference between the standard price payable by the owner and the compensation to the owner was to be paid to the State and not to a body whose function it was to distribute the net proceeds to necessitous farmers. However, the difference does not amount to a relevant distinction. The question in that case, as in this case, was whether the purpose on which the moneys raised were to be expended was to be characterized as a public purpose. Just as, in that case, the relief of necessitous farmers was a public purpose so, in this case, the compensation of relevant copyright owners arising out of what has been a complex problem of public importance is a public purpose. [7.60]

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Australian Tape Manufacturers Ass’n v Commonwealth cont. By the end of the 17th century, the Crown had lost whatever power it had had to impose taxes without parliamentary sanction (Holdsworth, A History of English Law (1939), vol 6, pp 47-49) and, although revenue raised by taxes imposed by the Parliament was in theory vested in the Crown (Halsbury’s Laws of England, 4th ed (1974), vol 8, par 1364), its expenditure 506 came under the control of Parliament (Maitland, The Constitutional History of England (1908), pp 309-310). That control was facilitated by the establishment of a Consolidated Fund into which all revenue raised by taxation was to be paid and out of which no payments could lawfully be made without parliamentary sanction (see Northern Suburbs General Cemetery Reserve Trust 176 CLR 555 at 574–576). Subject to some exceptions, the British constitutional arrangement of fiscal power was implemented by ss 53 – 56 and ss 81 – 83 of the Constitution. In particular, the Consolidated Revenue Fund prescribed by s 81 of the Constitution is the fund “into which flows every stream of the public revenue, and whence issues the supply for every public service” (Quick and Garran, Annotated Constitution of the Australian Commonwealth (1901), p 812). 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”. The principle adopted by the Constitution is that revenues or moneys raised shall form part of that Fund from which they can be appropriated only for Commonwealth purposes and only by law. That principle finds expression in s 81. It is supplemented by s 83 which forbids the drawing of money from the Treasury except under appropriation by law. 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, 507 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 82, which directs that the revenue of the Commonwealth shall, in the first instance, be applied to the payment of the expenditure of the Commonwealth. They would also stand outside s 83. The last paragraph of s 55 provides a further and persuasive indication that a law which imposes a tax to be applied for the benefit of a particular group in the community is nonetheless a law “imposing taxation”. That paragraph provides: 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. The paragraph treats laws “imposing duties of customs or of excise” as laws “imposing taxation”. It would be ludicrous to deny to a law imposing duties of customs or of excise that description simply because the law provided or sought to provide that the duties were to be paid, not to the Consolidated Revenue Fund, but to an agency for distribution to a particular group in the community. 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 572

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Australian Tape Manufacturers Ass’n v Commonwealth cont. vendor will, in the ordinary course of business, pass on to the purchaser (“[A] tax payable on the occasion of the sale of goods is also an internal revenue duty by way of indirect taxation amounting to an excise duty (Commonwealth and Commonwealth Oil Refineries Ltd v South Australia (1926) 38 CLR 408)”: Homebush Flour Mills Ltd (1937) 56 CLR 390 at 401 per Latham CJ; see also Vacuum Oil Co Pty Ltd v Queensland (1934) 51 CLR 108 at 124 per Dixon J). [Dawson, Toohey and McHugh JJ dissented.] Dawson and Toohey JJ: 520 Clearly, the phrase “laws imposing taxation” must mean the same thing in s 53 and s 55 (see Air Caledonie International v Commonwealth (1988) 165 CLR 462 at 468) and for that reason, if for no other, a law requiring the payment of a royalty properly so-called is not a law imposing taxation. A royalty may be a fee for a licence; indeed, as we have already pointed out, the term 521 “royalty” embraces fees paid to the owners of copyright for licences granted by them (see McCauley v Federal Commissioner of Taxation (1944) 69 CLR 235 at 243–244; Stanton v Federal Commissioner of Taxation (1955) 92 CLR 630 at 639–642). Under the legislation in question the owners of the copyright in sound recordings do not grant a licence for the copying of the recordings. Section 135ZZM(1) renders a licence unnecessary. Nor is any fee extracted compulsorily from those who copy sound recordings in an exercise which, apart from s 135ZZM, would be an infringement of copyright. No doubt, as we have observed, to the extent that market forces allow it to be done, the amount of the levy imposed upon the first distribution of a blank tape will be passed on in the cost to the ultimate purchaser, who is likely to be the user of that tape. But that is the only relationship between the levy imposed and the person who performs the copying authorized by s 135ZZM(1). For these reasons it is clear that the levy imposed by the legislation is not a royalty properly so-called and does not constitute a fee for a licence within the meaning of s 53 of the Constitution. This does not, however, lead to the conclusion that the levy is a tax. … [Their Honours then referred, inter alia, to the classic statement in Matthews and continued:] But these features do not provide an exhaustive definition of a tax and some of them are not indispensable. It was observed in Air Caledonie International v Commonwealth ((1988) 165 CLR 462 at 467): [T]here 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. However, that observation cannot be taken too far. Even putting to one side penalties and fees for services, not every exaction enforceable by law is a tax. If it were, there would be no need to 522 point to other identifying features. Those 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). In consequence, the fact that an exaction is to be paid into a consolidated revenue fund is sufficient indication that the exaction is for a public purpose, hence a tax (see R v Barger (1908), 6 CLR 41 at 82 per Isaacs J; Moore v Commonwealth (1951), 82 CLR 547 at 561 per Latham CJ; Parton v Milk Board (Vic) (1949) 80 CLR 229 at 258, per Dixon J). By inference, the strongest indication that an exaction does not constitute a tax is that the moneys raised do not form part of such a fund. However, as we point out later, the fact that moneys are not paid into such a fund is not necessarily conclusive. Under s 81 of the Constitution all revenues or moneys raised or received by the Executive Government of the Commonwealth form one Consolidated Revenue Fund to be appropriated for the purposes of the Commonwealth. If an exaction is a tax, the moneys which it raises are revenue and must form part of the Consolidated Revenue Fund by reason of s 81. That is to say, if in the present case the royalty constitutes a tax, the legislative provisions which make it payable to the collecting society to be distributed by it fail for reasons more fundamental than are to be found in s 55 of the Constitution. They fail because the moneys raised must form part of the Consolidated Revenue Fund and can only, under ss 81 and 83 of the Constitution, be received by the collecting society after appropriation by law for the purpose of payment to it. [7.60]

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Australian Tape Manufacturers Ass’n v Commonwealth cont. If these considerations involve practice rather than principle then the observation in Air Caledonie International v Commonwealth … may stand. But we doubt whether s 81 of the Constitution can in this context be regarded as a machinery provision and, consequently, it now seems to us that the passage which we have cited may be too wide. 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, as we have said, 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 523 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. The notion that taxes involve the raising of revenue by government is not confined to the Commonwealth Constitution. [Their Honours referred to United States and Canadian cases and continued:] 524 The royalty imposed by the legislation in this case is 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. They are to be collected by the collecting society and distributed or retained by it in accordance with its rules. The collecting society is not a public authority but a private organization, albeit endowed with certain statutory powers. The royalty is not exacted by way of penalty. Conversely, it is enforceable by the collecting society as a debt. If the mechanism which the legislation sets up were merely a colourable device with which to by-pass the Consolidated Revenue Fund with what was, in truth, government revenue, then the royalty would, if it could survive at all, be properly characterized as a tax and s 81 would nonetheless apply. But the actual purpose of the royalty shows that it is part of a scheme, designed to compensate copyright owners for the use of their copyright material, which does not involve the raising of government revenue. Rights and obligations are imposed by statute as part of the scheme and in that sense the scheme is a public one. But it is not sufficient in our view to constitute the moneys raised by way of royalty under the legislation public moneys, which they would of necessity be if the royalty were a tax. As we have said, the legislation is plainly prompted by the practical impossibility of controlling the copying of sound recordings or of obtaining any fee directly from those who engage in that practice. The provision in s 135ZZM(1) that the copying of a sound recording on to a blank tape for private and domestic use does not constitute an infringement of copyright has the effect of authorizing the making of such a copy. It is not practically possible to require the person making the copy to pay a royalty to the owner of the 525 copyright for the exercise of the right to do so without infringement, but it is possible with reasonable certainty to identify at the first point of distribution those blank tapes which will be used for copying sound recordings. At that point a levy is made which will have the tendency to be passed on in the price of the blank tape. The moneys raised by the levy are payable to a collecting society comprising relevant owners of copyright in sound recordings. A collecting society is a conventional vehicle for the collection and distribution of royalties where it is possible to charge royalties for rights such as performing rights. The moneys raised are to be distributed by the collecting society amongst the relevant copyright owners in such a way as to provide adequate recompense for the loss suffered by them by reason of what would, apart from s 135ZZM, be an infringement of their copyright. The legislative scheme is such as to ensure that, within reasonable limits, the amount, the incidence, the collection and the distribution of the moneys exacted are all referable to the copying of copyright material. Whilst the imposition cannot, strictly speaking, be regarded as a royalty, it is exacted in lieu thereof and for the same ultimate purpose, namely, the payment to copyright owners for the use of their copyright material. Accordingly, the essential similarities are with fees for licences rather than with a tax and we would not regard the legislation as a law imposing taxation within the meaning of s 55 of the Constitution. [McHugh J agreed generally with Dawson and Toohey JJ and, after referring to the abovementioned indicia of a tax and the passage from Air Caledonie and added:] 529 … I am unable to accept the proposition that a compulsory exaction of money under a statutory power may be a tax although it is not raised for public purposes. A compulsory exaction of money 574

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Australian Tape Manufacturers Ass’n v Commonwealth cont. under statutory authority is not by itself sufficient to constitute a payment of tax. If it was, any compulsory transfer of money from one person to another, pursuant to a statutory scheme, would constitute taxation. Moreover, so far as I am aware, no case has yet decided that a compulsory exaction could be a tax even though it was not raised for public purposes. In Air Caledonie, the amount of the fee imposed on travellers, although collected by the airlines, was a debt due to the Commonwealth by the airlines whether or not the fee had been or could be collected from the traveller. In United States v Butler (1936) 297 US 1 at 61, the Supreme Court of the United States said: A tax, in the general understanding of the term, and as used in the Constitution, signifies an exaction for the support of the Government. The word has never been thought to connote the expropriation of money from one group for the benefit of another. This passage emphasizes that the chief feature of a tax is that it is raised to finance government expenditure. It is raised “for the benefit of the Consolidated Revenue” (R v Barger (1908) 6 CLR 41 at 82). In a Canadian case (Massey-Ferguson Industries Ltd v Government of Saskatchewan [1981] 2 SCR 413; (1981) 127 DLR (3d) 513), which held that a levy imposed on the distributors of farm 530 implements to compensate farmers was not a tax, Laskin CJC said (Massey-Ferguson Industries Ltd v Government of Saskatchewan, [1981] 2 SCR 413; (1981) 127 DLR (3d) 513 at 432 (SCR), 528): There is here no collection of money to go into a consolidated revenue fund which is then chargeable with satisfying awards of compensation. 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. In the setting of the Constitution, it must be raised for the purposes of the Commonwealth to “be applied to the payment of the expenditure of the Commonwealth” (Constitution, s 82; see also s 81). In the context of of the Copyright Act, the levy imposed by s 135ZZP 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. Neither the Commonwealth nor its agents nor any public authority is involved in the exaction of the payments or, for that matter, the distribution of the funds raised by those payments. The levy is collected by, and is the property of, a private collecting society which is administered and controlled by the copyright owners. … 531 A common feature of a tax is that it is a compulsory exaction of money, enforceable at law, which does not purport to be a penalty imposed for a breach of the law and for which the payee receives no service or other consideration. Nevertheless, this feature is not enough, in my opinion, to characterize the “royalty” exacted by s 135ZZP as a tax. This is because the payment is exacted to finance the private scheme of compensation which Pt VC authorises and is not imposed for public purposes. … 532 It is true that Pt VC has been enacted in the public interest to make lawful the previously unlawful activities of domestic copiers and to raise funds to compensate the owners of copyright works for the loss of revenue brought about by domestic copying. Part VC thus serves a public purpose. But the money exacted by s 135ZZP is not raised for a public purpose as that concept is understood in the context of determining whether or not a compulsory exaction of money is a tax for the purpose of the Constitution. In that context, public purpose is synonymous with the “purposes of the Commonwealth”.

[7.70]

1.

Notes&Questions Did the High Court majority overstate the significance of ss 81 – 83 of the Constitution in furthering the objective of parliamentary control of finance (see at 505–507)? After all, the destination of the proceeds of the levy was specified by legislation (so that the purpose of s 83 of the Constitution would not have been contravened). Moreover, the effect of the minority’s view is that the Bill imposing the levy could be introduced in, and be amended by, the Senate (since it was not a proposed law imposing taxation, and [7.70]

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so fell outside s 53 of the Constitution), which surely increases parliamentary control over it because the Senate’s powers are not constrained (by s 53). 2.

The High Court held the Copyright Act 1989 (Cth) invalid for contravening s 55, para 1 of the Constitution when combined with the Copyright Act 1968 (Cth) (see above, [7.60]). But had the 1989 Act stood alone, it would appear from the majority’s reasoning (at 506) that it would nevertheless have been invalid for contravening s 81 of the Constitution because the proceeds of the levy constituted “revenues or moneys raised by the Executive Government” which were not payable into the Consolidated Revenue Fund as s 81 requires. This consequence of the majority’s view was noted also by Dawson and Toohey JJ (at 522).

3.

The effect of ATM is that a compulsory exaction will prima facie constitute a tax (see at 522–523 per Dawson and Toohey JJ). That characterisation will be appropriate unless the levy falls within one of the alternatives to taxation, such as a penalty, fee for service, royalty, etc. This broad view of taxation obviously increases the significance of s 55 of the Constitution and, as Dawson and Toohey JJ noted, “s 51(ii) assumes unforeseen proportions” (at 523) although, as noted above, this is subject to s 81.

4.

Among the alternatives to a tax are a penalty (mentioned in s 53 of the Constitution) and a fee for a privilege. For the former, see Fairfax v Federal Commissioner of Taxation (1965) 114 CLR 1; and Northern Suburbs General Cemetery Reserve Trust v Commonwealth (1993) 176 CLR 555 (both extracted at [7.130] and [7.150] in this chapter). For the latter, see Harper v Minister for Sea Fisheries (1989) 168 CLR 314 (extracted at [9.30]). Contrast ATM with the view of the Organisation for Economic Co-operation and Development (OECD), which has defined taxes as “compulsory, unrequited payments to general government”: see N McLeod, “State Taxation: Unrequited Revenue and the Shadow of Section 90” (1994) 22 Federal Law Review 476 at 478 (emphasis added). “Requital” refers generally to a payment for which the fee-payer receives something (such as property, services, a right or licence) in return. As McLeod states:

5.

A payment is requited where it directly secures some advantage; for example, when it secures goods or services or access to particular resources. … There must be a direct relationship between the procurement of the services or assets, and the making of the payment.

6.

576

What meaning is given to the attribute of “public purposes”. The majority adopt a more liberal and broad approach whereby an impost which may appear to be ostensibly for private purposes (as in the facts of this case) may nevertheless be considered to be for public purposes. It appears to be sufficient that it was imposed to serve a public interest, that is, “to make lawful the previously unlawful activities of domestic copiers and to raise funds to compensate the owners of copyright works for the loss of revenue brought about by domestic copying (at 570).” What would therefore be “purposes which could not be properly described as public”, the phrase used in Air Caledonie? There appear to have been strong dissents on this point. Dawson and Toohey JJ did not concur with the broadness of the statement in Air Caledonie because it did not emphasise the central point of taxation, being the raising of money for governmental purposes. On these facts, because the money was exacted in order to compensate copyright owners and not paid into consolidate revenue, the “royalty” was not to be characterised as taxation but rather as a distinctive type of debt payable between groups of private individuals. McHugh J, also in dissent, regarded “public purpose” as referring to government purpose and there was no such government purpose in the present case, the role of the government being supervisory only. [7.70]

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[7.75] The decision in ATM that a levy can constitute a tax even though its proceeds are not

public funds has made the task of characterising exactions more difficult, as is demonstrated by Luton v Lessels (2002) 210 CLR 333 which considered whether the child support levy imposed on a parent by the Commonwealth’s child support legislation amounted to a “tax”. The Court (comprising six justices) held unanimously that it did not. Consequently s 55 of the Constitution was not implicated.

Luton v Lessels [7.80] Luton v Lessels (2002) 210 CLR 333 at 340–343, 361–372 Gleeson CJ: 340 The legislative scheme [4] The principal object [of the Assessment Act] is to ensure that children receive a proper level of financial support from their parents. To that end, the Act provides for a level of support to be determined in accordance with legislatively fixed standards, and permits carers of children to have the level readily determined without the need to resort to court proceedings. [5] There is an office of Child Support Registrar established by s 10 of the Child Support (Registration and Collection Act) 1988. An application for administrative assessment of child support may be made, to the Registrar, under of the Assessment Act. Such an assessment is made in accordance with a statutory formula, unless the Registrar determines, or a court orders, that the provisions relating to administrative assessment of child support should be departed from (Assessment Act, ). A parent’s liability to pay child support arises on the acceptance by the Registrar of an application (s 31). The making of an assessment gives rise to a debt owing by the liable parent to the carer who is entitled to child support; the debt may be recovered in a court of competent jurisdiction (s 79). [6] … [A]lthough the legislation is enacted in furtherance of a clearly defined public policy, it creates a distinctly personal liability. The natural and moral obligation of a parent to support a child becomes, by force of the legislation, a legal obligation reflected in a debt, calculated in accordance with the Assessment Act, owing by a parent to a carer of the child. Although it is not directly relevant to the questions raised, the legislation was enacted following a 341 referral of matters by a number of States, and is supported by the powers conferred by s 51(xxii), (xxxvii) and (xxxix) and s 122 of the Constitution. [7] The principal objects of the Child Support (Registration and Collection Act) 1988 are to ensure that children receive from their parents the financial support that the parents are liable to provide, and that periodic amounts payable by parents towards the maintenance of their children are paid on a regular and timely basis (s 3). Those objects are achieved by a system of registration and enforcement. The scheme is available to a carer who wishes to take advantage of it. Some carers may not. They can rely on private enforcement if they wish. If a liability has arisen under a child support assessment, it may be registered under the Child Support (Registration and Collection Act) 1988 (s 17). The effect of registration is that the carer is no longer entitled to enforce payment of the liability and, instead, there is a debt owing by the liable parent to the Commonwealth (s 30). The carer entitled to child support becomes entitled to payment of an amount equivalent to that collected by the Commonwealth from the liable parent or on account of that parent’s liability (s 76). The debt owed by the liable parent to the Commonwealth must be paid in the manner prescribed by the Act, and may be collected from certain debtors of the parent. Amounts collected are paid into, and disbursed to carers out of, the Consolidated Revenue Fund. The Commonwealth does not benefit financially. Taxation [10] … To decide whether an exaction of money or the imposition of some other financial obligation is a tax involves an exercise in characterisation. The often-quoted words of Latham CJ in Matthews v Chicory Marketing Board (Vic) (1938) 60 CLR 263 were not offered as a definition of a tax. They were an explanation of the features of the impost under consideration that justified the conclusion that it bore the character of a tax. … And Latham CJ’s statement that the levy with which he was concerned was [7.80]

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Luton v Lessels cont. not a payment for services rendered was directed to the facts of that case; it was not exhaustive. Payments for services rendered are not the only exactions that stand outside the concept of a tax. … [11] In Parton v Milk Board (Vic) (1949) 80 CLR 229 at 259, Dixon J said of the contribution in question that it “is a compulsory levy by a public authority for public purposes and that is enough to show that it is a tax”. The 343 substantial question in that case was whether the tax was a tax on goods, and a duty of excise. [12] What constitutes a sufficient public purpose may be a matter of contention, as in Australian Tape Manufacturers Association Ltd v Commonwealth (1993) 176 CLR 480. … [13] As was pointed out in Airservices Australia v Canadian Airlines International Ltd (1999) 202 CLR 133 at 178 [90] per Gleeson CJ and Kirby J, 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, or the imposition of a liability, bears the character of taxation. … Revenue raised by a government may be earmarked, formally or informally, for a specific purpose, and still be a tax. For example, Commonwealth pay-roll tax was introduced in 1941 as a means of providing revenue to finance the provision of child endowment under legislation enacted in the same year (Victoria v Commonwealth (1971) 122 CLR 353 at 362 per Barwick CJ). The impost in the ATM 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 344 Child Support (Registration and Collection Act) 1988. The fact that the proceeds of the exaction were not paid into, and out of, the Consolidated Revenue Fund was not regarded as decisive. I would also regard the converse as true. [14] 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 Child Support (Registration and Collection Act) 1988. What is alleged to be taxation is in substance no more than a mechanism for the enforcement of a pre-existing private liability. [15] If a child support assessment is registered under the Child Support (Registration and Collection Act) 1988 the debt payable by the liable parent to the eligible carer is extinguished, and replaced by a debt payable by the liable parent to the Commonwealth. The Commonwealth, as necessary, collects the amount owing, and pays it into the Consolidated Revenue Fund. An amount equal to the amount collected is transferred to the Child Support Account. Payments of child support are then made to the carer from the Child Support Account. 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. [16] 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 Child Support (Registration and Collection Act) 1988 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. [The other justices reached the same conclusion.] 578

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Luton v Lessels cont. McHugh J concurred with Gleeson CJ and added: 361 [80] I would only add that the amounts collected by the Registrar do not acquire the characterisation of “taxation” merely because they form part of the Consolidated Revenue Fund. Before the decision in Australian Tape Manufacturers Association Ltd v Commonwealth (1993) 176 CLR 480, it might have been thought that no imposition could be a tax unless it formed part of the Consolidated Revenue Fund. But the decision in that case denied that proposition. Whether or not that case was correctly decided – and I remain of the view that it was wrongly decided – it does not follow that a compulsory exaction for a public purpose is a tax simply because it forms part of the Consolidated Revenue Fund. Penalties payable to the Commonwealth are compulsory exactions. Quite often fees payable to the Commonwealth are compulsory exactions. Because those penalties and fees are part of the “revenues or moneys raised or received by the Executive Government of the Commonwealth” (Constitution, s 81), they form part of the Consolidated Revenue Fund. But that fact does not by itself mean that they are taxes. If there were any doubt about that point, s 53 of the Constitution quashes it. That section declares that “a proposed law shall not be taken … to impose taxation, by reason only of its containing [362] provisions for the imposition … of fines or other pecuniary penalties, or for the demand or payment … of fees for licences, or fees for services under the proposed law”. Gaudron and Hayne JJ: 354 [58] … [E]very tax that is raised must be paid into the 355 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. … [59] 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 Child Support (Registration and Collection Act) 1988 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. [60] There is, therefore, under the Child Support (Registration and Collection Act) 1988, 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 Child Support (Registration and Collection Act) 1988, 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 – whether by making a payment to the Commonwealth or by suffering a compulsory deduction from salary or wages. 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”. [61] … All that is changed by registration is the identity of the party to whom the liability is owed. … Kirby J: 370 [113] Various arguments were offered to distinguish the legislation declared a “tax” in Tape Manufacturers and the legislation under consideration in these proceedings. The Registrar submitted that the difference was to be found in the fact that the legislation in Tape Manufacturers imposed its monetary exaction upon one group in the community for the benefit of another group (Tape Manufacturers 176 CLR 480 at 504), whereas the legislation in question here imposed liability on a particular individual, interposed the Commonwealth as a conduit of obligations, and provided for the payment of the exact amount recovered to the other individual concerned. [114] This argument is … unconvincing. … [115] The concern of principle which chiefly appeared to trouble the majority in Tape Manufacturers was, with respect, a legitimate one. It was a concern that the legislative technique attempted there could, if upheld, effectively circumvent the constitutional requirement that moneys exacted [7.80]

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Luton v Lessels cont. compulsorily by federal law should be paid not, as there, to a private company but through the Consolidated Revenue Fund by which all revenue raised by taxes imposed by the Parliament is brought under the control of the Parliament (Tape Manufacturers (1993) 176 CLR 480 at 505–506) and in that way to ensure that the recovery and expenditure are carried out in accordance with law. These are not concerns in the present case. On the face of things, the Tape Manufacturers decision presents difficulties both in some of its reasoning and in its outcome, for the validity of the Acts impugned in these proceedings. [117] By that doctrine [relied on by all judges in Tape Manufacturers], the most significant feature that distinguishes a “law imposing taxation” from one that does not, is that such a law, with very few exceptions (Airservices (1999) 202 CLR 133 at 178 [90]), has the purpose and effect of raising general revenue for the government. This is the view that has also been expressed in the United States Supreme Court. To like effect are decisions of the Supreme Court of Canada and other final courts of Commonwealth countries (Massey-Ferguson v Saskatchewan [1981] 2 SCR 413 at 432; cf Ratilal Panachand Gandhi v State of Bombay AIR 1954 SC 388 at 395). 372 [118] Many remarks in this Court before (Fairfax v Federal Commissioner of Taxation (1965) 114 CLR 1 at 19 per Windeyer), in (Tape Manufacturers (1993) 176 CLR 480 at 501–2, 522, 530. See also Northern Suburbs General Cemetery Reserve Trust v Commonwealth (1993) 176 CLR 555 at 568) and since (Airservices (1999) 202 CLR 133 at 178 [91], 239 [310]) Tape Manufacturers have laid emphasis on this core feature of the notion of a “law imposing taxation”. It is a feature that is reinforced, in Australian cases, by the “setting of the Constitution” (Referring to the Constitution, ss 81, 82. See Tape Manufacturers (1993) 176 CLR 480 at 530, per McHugh J). However, two points need to be noted. The first was pointed out by Gleeson CJ and myself in Airservices, where it was said that (at 178 [91]) “[n]ot all taxation has as its primary purpose the raising of revenue; and some forms of taxation are notoriously inefficient means to that end. An objective of raising revenue is not, therefore, a universal determinant. Even so, the presence or absence of such an objective will often be significant”. [119] Secondly, the exaction of money does not always amount to revenue raising for general governance. Most federal laws envisage government activity of some kind. Such activities have an inevitable economic cost. More than at the time of federation, various expedients are now adopted by legislation … to recover some of these costs for the Commonwealth and its agencies. [His Honour quoted with approval the remarks of McHugh J in Airservices (1999) 202 CLR 133 at 238–239 [309], extracted above.] [120] Therefore, the weight of authority supports the proposition that the issue of revenue raising is a significant, if not determinative, feature of a law with respect to taxation. [121] When this approach is adopted in the case of the legislation impugned here, and in particular the Child Support (Registration and Collection Act) 1988, it is my view that it cannot be characterised as a “law imposing taxation” within s 55 of the Constitution. It may be conceded that there are some indications which support that characterisation. These have been mentioned and must be given weight. But the most telling feature of the Acts in question is that neither of them, directly or indirectly, performs a revenue raising function for the purposes of government. The most that can be said is that, by enacting the law, the Commonwealth might be seeking to deflect some of the burden that would otherwise fall on the revenue for child support by social security to a parent in receipt of salary, wages, or other income who should assume the primary responsibility for providing “a proper level of financial support” to a child. But no net increment is made to the revenue for use on general government purposes or otherwise. On the contrary, the financial burden of implementing the scheme is borne by the Commonwealth and, in exceptional circumstances, the Commonwealth acts

580

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Luton v Lessels cont. as a guarantor of defaulting employers.

Notes&Questions

[7.90]

1.

2.

3. 4.

Gleeson CJ, McHugh, Gaudron and Hayne JJ distinguished ATM on the same ground. What was that? Did Kirby J distinguish the case on the same ground? If not, on what ground did he do so? (Callinan J also distinguished ATM at 384 [178]), but his reasoning was essentially rejected by Gaudron and Hayne JJ (at 355 [60]) and Kirby J (at 370–371 [114]).) Luton v Lessels demonstrates that the alternatives to a “tax” are not a closed category. Registration of assessments of child support was certainly not the imposition of a “penalty”; indeed, the High Court did not mention “penalty” at all. The Court expressly held that the Registrar’s assessment and registration of child support payments was not an exercise of judicial power, but the imposition of a “penalty” would involve an exercise of judicial power. Was ATM correctly decided? Note the statement by Gaudron and Hayne JJ (at 354[58]) that “[E]very 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 implications does this have for the majority position in ATM?

“Laws … with respect to … taxation” [7.100] In characterising Commonwealth legislation, the early High Court applied two

doctrines, each of which confined the ambit of Commonwealth power: the doctrine of reserved State powers, and single-subject characterisation which emphasised the “substance” of legislation over its “form”. These doctrines were both applied, with devastating effect on Commonwealth power, in the first significant case on s 51(ii), R v Barger (1908) 6 CLR 41.

R v Barger [7.110] R v Barger; Commonwealth v McKay (1908) 6 CLR 41 at 64–119 [At issue was the validity of s 2 of Excise Tariff Act 1906 (Cth) that imposed excise duties on the manufacture of certain agricultural machinery and exempted goods manufactured pursuant to certain specified conditions as to wages paid to employees as set out, inter alia, in Commonwealth industrial awards or declared to be reasonable and fair by the relevant Commonwealth industrial tribunal. Barger manufactured excisable agricultural machinery but without a licence as required under the Act. Barger challenged the constitutional validity of these provisions. In joint judgment, Griffith, Barton and O’Connor JJ the majority accepted the defendants submission “supported by high authority binding upon this Court” that “in determining whether a particular law is or is not within the power of the Parliament, regard must be had to the substance of the legislation rather than to its literal form (at 65).” They continued:] 66 … 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. …67 The scheme of the Australian Constitution, like that of the United States of America, is to confer certain definite powers upon the Commonwealth, and to reserve to the States, whose powers before the establishment of the [7.110]

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R v Barger cont. Commonwealth were plenary, all powers not expressly conferred upon the Commonwealth. … 68 … The primary meaning of “taxation” is raising money for the purposes of government by means of contributions from individual persons. Taxation differs from exaction in that the obligation to contribute depends upon prescribed differentiations of the persons from whom, or the things in respect of which, the contribution is to be made. The power to tax necessarily involves the power to select the subjects of taxation. In the case of things the differentiation or selection is, in practice, usually made by reference to objective facts or attributes of the subject matter, so that all persons or things possessing those attributes are liable to the tax. The circumstance that goods come from abroad or from a particular foreign country, or that particular processes or persons have been employed in their production, or that they possess certain ingredients, are instances of attributes which have been chosen for the purpose of differentiation. In a State possessing plenary powers of legislation any condition whatever may be 69 imposed as a basis of selection for taxation purposes, and it is immaterial whether the differentiation should properly be regarded as an exercise of the power of taxation or of some other power. But where the competency of Parliament is limited, as in a Federal State, to specific matters, it is material, and indeed necessary, to inquire whether an attempted exercise of the power of legislation falls within some one or more of the enumerated powers. In the present case the only relevant power is that of taxation. … 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 thirty-nine powers enumerated in sec 51. In some instances, when it was intended to allow the Parliament to regulate the domestic affairs of the States, the power was conferred by express words. [Examples given were s 51(xii) currency; (xiii) incorporation of banks; (xv) weights and measures; (xvi) bills of exchange; (xvii) bankruptcy and insolvency; (xx) corporations.]…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. … 72 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 73 much an attempt to regulate those conditions as if the regulation were made by direct enactment. … 76 … 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. The substantial nature and character of the legislation is the same whether it is passed by one legislature or the other. It follows that such an Act would not be in substance an Act imposing duties of Excise within the meaning of s 90 of the Constitution. If, then, the Act in question is not, in substance, an Act imposing duties of Excise, what is it? We think that it is an Act to regulate the conditions of manufacture of agricultural implements, and not an exercise of the power of taxation conferred by the Constitution. … 78 The foregoing arguments lead to the conclusions: 1.

That the Act in question is not in substance an exercise of the power of taxation conferred upon the Commonwealth Parliament by the Constitution.

2.

That, even if it were within the competence of that Parliament to deal with the conditions of labour, the Act would be invalid as being in contravention of s 55.

3.

That, even if the term “taxation,” uncontrolled by any context, were capable of including the indirect regulation of the internal affairs of a State by means of taxation, its meaning in the Constitution is limited by the implied prohibition against direct interference with matters reserved exclusively to the States.

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R v Barger cont. Isaacs J [in dissent]: 82 The power [in s 51] itself is conferred by one word, “taxation” – a word so plain and comprehensive that it would be difficult to devise anything to surpass it in simplicity and amplitude. The words of limitation immediately coupled with it, namely, “but so as not to discriminate between States or parts of States,” demonstrate that, so far as that clause is concerned, the power is otherwise unlimited. … It is said for one defendant that the 83 power of taxation does not extend to matters within the jurisdiction of the States, that the Commonwealth Parliament cannot do by taxation anything which is reserved exclusively to the States. … We search in vain for any declaration that the grant of power is subject to the powers reserved, for that would be either meaningless or would nullify the grant. The Commonwealth’s powers are given definitely, and without further reservations than those expressly stated; the powers not granted or withdrawn remain with the States. … 84 There can be no derogations from the grant expressly made, except those which are expressly stated or which of necessity inhere. It is an inherent consequence of the division of powers between governmental authorities that neither authority is to hamper or impede the other in the exercise of their respective powers, but that doctrine has no relation to the extent of the powers themselves; it assumes the delimitation aliunde. It is contrary to reason to shorten the expressly granted powers by the undefined residuum. As well might the precedent gift in a will be limited by first assuming the extent of the ultimate residue. …85 … For purposes of federal taxation – whether Customs or other taxation – Australia is one indivisible country. … 94 The unlimited nature of the taxing power is therefore incontestable. Its exercise upon all persons, things and circumstances in Australia is, in my opinion, unchallengeable by the Courts, unless, as Lord Selborne said, a judicial tribunal finds it repugnant to some express limitation or restriction. … 99… 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. … 100 [I]t is clear that the Excise Tariff 1906 (No 16) in no way commands or prohibits any course of action by the manufacturer, and in no way makes the payment 101 of unreasonable wages unlawful, and, consequently, there is in law no regulation and no penalty. Whether the tax is paid or not the rate of wages is lawful. How can there be a penalty for an act admittedly lawful? … Now, by s 90 of the Constitution the States are forbidden to pass Acts imposing Excise duties. Nevertheless, since this Act is held not to be equivalent to Excise, the States have an obviously easy task to break through the prohibition of the 90th section. They may with the utmost facility and safety, if this decision be adhered to in its integrity, disorganize and destroy at will the most carefully framed fiscal arrangements of the Commonwealth. They may take this Act as their model, actually say on the face of their enactments that they impose a duty of Excise on spirits, tobacco, woollens, machinery, and all other articles manufactured or produced in Australia, and by merely inserting by way of proviso some conditions of labour exempting persons in compliance therewith, safely rely on this decision to maintain the Act as a State Regulation Act, and not in substance an Excise duty. The Commonwealth Parliament’s exclusive authority to regulate Excise, and even Customs, becomes merely nominal; uniformity in these branches of taxation is impossible, and effective federal control disappears. To those who have hitherto thought that the Australian Constitution was at least as national in its character as the American Constitution, this will come as a revelation. … 105 To accept the defendants’ arguments here appears to me to do violence to the plain words of the Constitution, and to recede altogether from the accepted notion of federal powers in America, on the Constitution of which our own was supposed to be based, and to judicially limit, rather than interpret, the grant of national powers. This I cannot see my way to do, and accordingly rest my judgment on this branch of the case on the clear principles of the plenary power of Parliament, as plenary as in a single Government, subject only to express limitations, with respect to every subject enumerated in the grant. No other principle can, to my mind, satisfy the conception of the great document it is our duty to interpret, or enable the national legislature to fulfil with confidence or advantage the responsible [7.110]

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R v Barger cont. functions for which it has been created. … It follows necessarily from what has already been said, and, indeed, is involved in it, that the Act does nothing but impose duties of Excise, and that consequently there is no contravention of sec 55 of the Constitution. Higgins J [delivering a judgment to the same effect as Isaacs J,], noted: 119 The point is that in this Act there is no law prescribing wages, no command or anything in the nature of a command with regard to wages. The substance of the Act is the obligation which it imposes; and the only obligation imposed is to pay Excise duty. It does not regulate the internal trade and industry of the States, except in the sense that it affects the conditions of that trade and industry; and so long as it achieves this result by virtue of the unlimited discretion of the Federal Parliament as to the conditions to be annexed to its power of taxation, or any other admitted power, the Act is valid.

[7.120]

1.

Notes&Questions

The Excise Tariff Act 1906 (Cth), held invalid in Barger was part of the Deakin government’s “New Protection” policy. For the political background to the policy, see J A La Nauze, Alfred Deakin: A Biography (Cambridge University Press, Cambridge, 1965), Vol 2, pp 410, 413-414, 426-428, 435. On Barger, La Nauze comments (at 435n*): [Barger] is an interesting study in the sociology of law-making. It was perhaps to be expected that the verdict of the majority of justices (Griffith, Barton and O’Connor) should have been against its constitutional validity. Their reasoning – or at least Griffith’s, for the other two did not present separate judgments – may be open to argument, but it was clear that the Act was a “try on”, and they were likely to look closely at apparent invasions of State powers. But how positive are the learned and searching minority judgments of Isaacs and Higgins, how incredible is it to them that any doubt could ever have been raised about the Act! Yet Isaacs, as Attorney-General, had drafted it; and Higgins, on the other hand, had repeatedly emphasized, almost to the time of his appointment to the Bench, that “the Commonwealth Parliament has not the power to make uniform legislation as to wages, hours and industrial conditions. We cannot in the Parliament legislate with respect to wages, hours and conditions of labour.” (CPD, xxxi, 1249.)

Was it proper for Isaacs J to sit as a judge in a case involving a challenge to legislation which he had drafted? For the practice of Barwick CJ and Murphy J in this respect, see A R Blackshield, “Judges and the Court System”, in G Evans (ed), Labor and the Constitution 1972–1975 (Heinemann, 1977), 105 at pp 119-120; P Durack and A Simpson, “Attorneys-General”, in T Blackshield, M Coper and G Williams (eds), The Oxford Companion to the High Court of Australia (Oxford University Press, Melbourne, 2001), 39 at p 42. 2.

584

Barger appears to rest on two independent grounds: (a)

the legislation did not fall within s 51(ii) because the term “taxation” therein should be read down pursuant to the reserved State powers doctrine (see at 69, 78); and

(b)

the legislation should be characterised as a law dealing not with taxation, but with the “conditions of manufacture of agricultural implements” (at 77), a subject over which the Commonwealth had no legislative power.

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The first ground was removed in 1920 when the Engineers’ Case rejected the reserved State powers doctrine: (1920) 28 CLR 129 at 154. But there was some uncertainty regarding the validity of the second ground, especially since later cases had emphasised the need to examine the substance of legislation in characterising it, not merely its form: see, especially, Attorney-General (NSW) v Homebush Flour Mills Ltd (1937) 56 CLR 390; and W R Moran Pty Ltd v Deputy Federal Commissioner of Taxation [1940] AC 838 (PC). Moreover, Barger is difficult to reconcile with Osborne v Commonwealth (1911) 12 CLR 321, in which, only three years later, the same justices unanimously upheld under s 51(ii) Commonwealth legislation which imposed land tax at rates which varied with the size of the land-holding and exempted relatively small holdings if owned by an Australian resident. A ground of distinction suggested by Barton J in that case was that, while in Barger the legislation’s purpose was apparent upon its face, in Osborne the supposed purpose – to limit the size of land-holdings, especially by overseas landlords – had to be inferred from its practical effect. However, Professor Zines has rightly criticised this distinction as inappropriately applying a purposive test to a non-purposive power: (Zines, 5th ed, 2008), p 42. 3.

The High Court in Barger was conscious of the fact that a consequence of upholding the Commonwealth legislation in issue would have been not merely the recognition of Commonwealth power but also denial of State power to enact equivalent legislation, which would have been held invalid as imposing a duty of excise contrary to s 90 of the Constitution (see at 77). This consideration did not arise in Osborne, which did not involve goods, and may, at least partially, account for the different decision in the two cases. Although Barger has never been formally overruled, it essentially became defunct after 1920 when the reserve State powers doctrine was rejected and the High Court adopted the methodology of multiple subject characterisation. The effect of these developments on Barger is explained clearly in the current leading judgment on this subject, that of Kitto J in Fairfax.

Fairfax v FCT [7.130] Fairfax v Federal Commissioner of Taxation (1965) 114 CLR 1 at 6–18 [At issue was the validity of the Income Tax and Social Services Contribution Assessment Act 1936 (Cth), Pt III, Div 9B (inserted by s 11 of 1961 legislation), which effectively exempted the income earned by superannuation funds from income tax provided that the funds were invested in Commonwealth, State or Territory government securities. The provisions were unanimously held valid under s 51(ii).] Kitto J: 6 [His Honour noted first the competing submissions: No head of federal legislative power will support the enactment of s 11 as it is a law with respect to the investment of the moneys of superannuation funds and hence not within Commonwealth heads of power as against the submission that, whatever else it may be, it is nevertheless a law with respect to taxation, and is therefore to be upheld as an exercise of the power conferred on the Parliament by s 51(ii) of the Constitution. He continued:] 6 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 7 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 [7.130]

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Fairfax v FCT cont. 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? See per Latham CJ in Bank of New South Wales v Commonwealth (1948) 76 CLR 1 at 185–187, and per Higgins J in Huddart Parker & Co Pty Ltd v Moorehead (1909) 8 CLR 330 at 409–411. The need to distinguish between form and substance appears from what has just been said. The possibility has to be recognized, as it was in the United States as long ago as McCulloch v Maryland (1819) 4 Wheat 316 at 423 [4 Law Ed 579], 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: Bank of New South Wales v Commonwealth (1948) 76 CLR 1 at 187; see, eg, Waterhouse v Deputy Federal Commissioner of Land Tax (SA) (1914) 17 CLR 665. Accordingly the task of characterizing laws according to subject matter must be performed with care lest mere words mislead. The Court, as Higgins J said in R v Barger (1908) 6 CLR 41 “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” (R v Barger (1908) 6 CLR 41 at 118). 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. For this reason, it was said, s 11 is in substance not a law upon taxation but only a law upon the subject of the investment of such moneys. Thus the argument endeavours to lift 8 the section out of its formal surroundings in an Income Tax Assessment Act 1997, to treat the use it makes of the terminology and machinery of taxation legislation as a veil to be removed, and to exhibit it as in truth but an attempt to regulate, with sanctions, the investment of superannuation fund moneys. For this method of attack there is precedent, by no means inconsiderable, in the United States. [The United State case of Bailey v Drexel Furniture Co (1922) 259 US 20 [66 Law Ed 817] is then discussed. Kitto J noted aspects of the legislation, including the provision that the exemption was lost unless the Commissioner was satisfied that the prescribed level of investment in government securities had been maintained throughout the year of income, and continued:] 9 [I]n 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. 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 10 of such funds? If the criterion is to be found in Bailey v Drexel Furniture Co (1922) 259 US 20 [66 Law Ed 817] and other cases in the same line, such as Hill v Wallace (1922) 259 US 44 [66 Law Ed 822]; United States v Constantine (1935) 296 US 287 [80 Law Ed 233]; and Carter v Carter Coal Co (1936) 298 US 238 [80 Law Ed 1160], the Supreme Court of the United States would be likely to say, Yes. … While affirming that in deciding whether a law is supported by the taxation power it is irrelevant 11 to inquire into the ultimate indirect consequences of the operation of the law – for no conclusion can be built upon them save as to the motives of the legislators – the majority of the Court [in Barger]accepted the view that it is legitimate to draw an inference from what appears on the face of the law as to whether the substantial purpose is, on the one hand, to raise revenue or, on the other hand, to regulate the conduct of persons by providing for a sanction in the form of a pecuniary impost to be incurred by departure from a specified course. Griffith CJ and Barton and O’Connor JJ treated the task of choosing the correct inference as one to be performed against a background provided by the doctrine, to which they were adherents, that the Constitution was to be interpreted as intending to reserve to the States all such powers as were not expressly conferred upon the Commonwealth. From this doctrine they took as the background of their thinking in Barger’s Case (1908) 6 CLR 41 the proposition that “taxation” in s 51(ii) of the Constitution has a special meaning, that it refers only to taxation not imposed as a means of regulating the domestic affairs of the States. Confronted by an Act which purported to provide for a duty of excise to be paid upon manufactured goods if certain 586

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Fairfax v FCT cont. conditions of employment in the course of manufacture were not observed, their Honours saw on the face of it an intention to use the taxation power as a mere means of regulating conditions of employment, a matter “reserved”, as they considered, to the States; and they concluded that the end aimed at was the substance, the taxing means employed was mere form, and that the law was therefore outside the true limits of the power. In so far as the judgment insisted upon testing the validity of the law by reference to its substantial operation, it has been approved by the Privy Council in W R Moran Pty Ltd v Deputy Commissioner of Taxation [1940] AC 838; (1940) 63 CLR 338 at 849 (AC), 341 (CLR) and neither the dissenting members of the Court in Barger’s Case (1908) 6 CLR 41 nor any Judge since has wished to disagree. But it is by no means a settled doctrine that a law which purports to provide for a tax upon behaviour is in substance not a law with respect to taxation if it exhibits on its face a purpose of suppressing or discouraging the behaviour and is to be explained more convincingly as a means to that end than as a means to provide the Government with revenue. Indeed, to espouse such a doctrine would be to fall into the error already mentioned, of confusing the distinction between form and substance with the distinction between the major and the minor 12 importance which a reading of the Act suggests that those who passed it may have attributed to the various aspects of its operation. In my opinion 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 (see Amalgamated Society of Engineers v Adelaide Steamship Co (1920) 28 CLR 129 at 154), 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 (1950) 340 US 42 [95 Law Ed 47]: “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. Sonzinsky v United States (1937) 300 US 506 at 513, 514 [81 Law Ed 772 at 775, 776]. The principle applies even though the revenue obtained is obviously negligible, Sonzinsky v United States (1937) 300 US 506 at 513, 514 [81 Law Ed 772 at 775, 776] or the revenue purpose of the tax may be secondary, J W Hampton & Co v United States (1928) 276 US 394 [72 Law Ed 624]. Nor does a tax statute necessarily fall because it touches on activities which Congress might not otherwise regulate” ((1950) 340 US at 44 [95 Law Ed at 50]). The dissenting judges in Barger’s Case, Isaacs and Higgins JJ, rejected the doctrine of the reserved powers of the States … The question for them was less complicated: was the liability for which the Act provided, in its real nature, a tax or a penalty; and with emphasis and great elaboration they answered that it was what it purported to be, a tax. Notwithstanding features of the Act which, like features of s 11 to which I have drawn attention, might have induced a court like-minded with the Court that decided Bailey v Drexel Furniture Co (1922) 259 US 20 [66 Law Ed 817] to deny the quality of a tax to the exaction imposed, their Honours found themselves unable to take that course consistently with the acknowledgment, which they considered ought to be made, that subject only to the limitations expressed in the Constitution the power with respect to taxation was “plenary and absolute; unlimited as to amount, as to subjects, as to objects, as to conditions, as to machinery” (at 114), so that “the Parliament has, prima facie, power to tax whom it chooses, 13 power to exempt whom it chooses, power to impose such conditions as to liability or as to exemption as it chooses”: per Higgins J at 114. It may be that the power is subject to some implied as well as express limitations; but with that reservation the soundness of the propositions thus stated is not now, I think, open to doubt. In the result I think that this case should be decided against the appellants upon the broad principle which Sir Owen Dixon stated in Melbourne Corporation v Commonwealth (1947) 74 CLR 31: “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” (at 79). 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 [7.130]

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Fairfax v FCT cont. 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 nor 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 119, 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 similar effect. Windeyer J reached the same result, remarking:] 18 In considering the enactment here in question it is not to be seen as it were in outer darkness, but in the light that is shed upon it by the scheme into which it comes. It is a familiar incident of laws with respect to taxation, especially of income tax and estate duty, that they 19 provide for a great variety of exemptions, concessions, rebates and deductions, some of them absolute some conditional, the products of policies or purposes that the Parliament wishes to advance. I do not mean to say that a case could not be imagined in which an Act in the guise of a law with respect to taxation might be seen to be in its true character something else. But here the very matter that is relied upon as remote from the character of taxation seems to lead to quite the opposite conclusion. Taxes are ordinarily levied to replenish the Treasury, that is, to provide the Crown with revenue to meet the expenses of government. That is the prime purpose of the income tax. It seems to me far from foreign to such a tax that its incidence should be so adjusted as to encourage persons to subscribe to government loans. [Barwick CJ, likewise, held s 11 valid but added:] 5 It is possible that a law increasing or decreasing the extent of an existing exemption from liability to pay a tax validly imposed may in some circumstances – for my part not readily envisaged – be held not to be a law with respect to taxation. But there is nothing in the terms or in the operation of the law here under attack which, to my mind, would suggest that it is other than a law with respect to taxation having regard to the now settled views of this Court as to the determination of the true character of a law whose validity depends upon its subject matter. [Menzies J similarly upheld s 11, and added:] 17 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 enquiry 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 18 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.

Notes&Questions

[7.140]

1.

The principal issue arising from Fairfax is to what extent the reservations in the judgments of Barwick CJ and Menzies J qualify the more straightforward, logical reasoning of Kitto and Taylor JJ. In Murphyores Inc Pty Ltd v Commonwealth (1976) 136 CLR 1 at 23 Mason J remarked: Barger … 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, it should now be acknowledged, swept away the last vestigial remnants of Barger’s Case.

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Gibbs J expressed “general agreement” with the judgment of Mason J. The observations of Menzies J in Fairfax, extracted at [7.130], are perplexing for several reasons. First, no reason is given to explain why a “special prohibitive tax upon income derived from the sale of heroin” would not be a law with respect to taxation. Secondly, the example is ironic, since United States v Sanchez 340 US 42 (1950), quoted by Kitto J, involved precisely such a tax (on marijuana). In any event, the remarks of Menzies J have now effectively been repudiated by the High Court in State Chamber of Commerce and Industry v Commonwealth (the Second Fringe Benefits Tax Case (1987) 163 CLR 329) at 353–354 per Mason CJ, Wilson, Dawson, Toohey and Gaudron JJ (with whom Brennan and Deane JJ concurred on this issue): The plaintiffs’ first submission on this aspect of the case is that the Act and the Assessment Act are laws to discourage the provision of fringe benefits, not laws with respect to taxation. In support of this submission they rely on a statement made by Menzies J in Fairfax v Federal Commissioner of Taxation. [Their Honours quote the remarks of Menzies J extracted above.] We make three comments about this statement. First, it does not explain how the true character of the hypothetical law as a law for the suppression of the noxious trade, rather than a law with respect to taxation, is determined. Secondly, to the extent to which his Honour regarded the existence of a “prohibitive” tax as a decisive element in reaching his suggested conclusion, it is an element that is absent in the present case. Our final comment is that the illustration scarcely stands well with the principle on which Kitto, Taylor and Windeyer JJ decided the case, a principle applied by Kitto J (Fairfax 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 nor 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 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. (See also Fairfax at 16, 19.) The principle implicit in this passage has been applied by the Court in later cases. In characterizing a law the Court has regard to its operation, to what the law does in the way of creating rights and obligations, and how it operates within the permitted area of power. It matters not that the provisions which so operate may be intended to achieve some other purpose … Here the legislation operates so as to impose tax and define the extent of the liability to tax.

Northern Suburbs General Cemetery Reserve Trust v Commonwealth [7.150] Northern Suburbs General Cemetery Reserve Trust v Commonwealth (1993) 176 CLR 555 at 585–590, 568–572 [At issue was the validity of the Training Guarantee Act 1990 (Cth), (“the Taxing Act”) enacted with the Training Guarantee (Administration) Act 1990 (Cth) (“the Assessment Act”), which was held valid under s 51(ii) by a unanimous High Court.] Dawson J: 585 The two Acts adopt the traditional procedure to comply with the requirement of s 55 of the Constitution that laws imposing taxation shall deal only with the imposition of taxation. The Taxing Act imposes a charge which the Commonwealth seeks to support under s 51(ii) of the Constitution as a tax. A charge, called in the Assessment Act “the training guarantee charge”, is imposed upon “any training guarantee shortfall of an employer in a year”: s 5. The charge is not really a charge upon the shortfall at all, the amount of the charge being the amount of the shortfall: s 6. [7.150]

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Northern Suburbs General Cemetery Reserve Trust v Commonwealth cont. Thus, if the charge is a tax, the Taxing Act does no more than impose the tax and fix the rate. However, without more, the Taxing Act is incomprehensible and, in order to learn the true nature of the charge, it is necessary to go to the Assessment Act which deals with its incidence, assessment and collection. For this reason the Taxing Act provides that the Assessment Act is incorporated and to be read as one with the Taxing Act: s 3. It is only necessary to describe in broad outline the scheme which emerges from the Assessment Act. The principal objects of that Act are said to be to increase and improve the quality of the employment related skills of the Australian workforce so that it works more productively, flexibly and safely, thereby increasing the efficiency and international competitiveness of Australian industry: s 3(1). The objects of the Act are, under s 3(3), to be achieved by “guaranteeing” a minimum level of expenditure by employers on “quality employment related training”. A “minimum training requirement”, being, subject to a threshold, a percentage of the 586 employer’s payroll in any one year, is to be calculated and the training guarantee charge is the amount by which the net eligible training expenditure of the employer (which is defined in s 24(1)), falls short of this minimum training requirement: ss 14, 15. The shortfall is the training guarantee shortfall and the amount of the shortfall is the amount of the charge imposed upon the employer by the Taxing Act. In effect, then, the training guarantee charge is the amount by which the employer’s eligible expenditure on training falls short of a minimum amount calculated in accordance with the Act. The amount of the charge (or shortfall) is a debt due to the Commonwealth, payable to the Commissioner of Taxation: s 76. … 587 The training guarantee charge is clearly a compulsory levy by a public authority (ie, the Commonwealth) imposed for public purposes and enforceable by law. Those are the ordinary characteristics of a tax (see Lower Mainland Dairy Products Sales Adjustment Committee v Crystal Dairy Ltd, [1933] AC 168 at 175; Matthews v Chicory Marketing Board (Vic) (1938) 60 CLR 263 at 276), although there are statutory impositions possessing these characteristics which are not taxes. A penalty is one and a fee for services is another. Obviously the charge is not a penalty since the liability to pay the impost does not arise from any failure to discharge antecedent obligations (see MacCormick v Federal Commissioner of Taxation (1984) 158 CLR 622 at 639). … In Air Caledonie International v Commonwealth (1988) 165 CLR 462 this Court referred to s 53 of the Constitution which says that a proposed law shall not be taken to impose taxation by reason only of its containing provisions for, amongst other things, the payment of fees for services. It observed (at 469–470): In one sense, all taxes exacted by a national government and paid into national revenue can be described as “fees for [588] 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 … judgment of Latham CJ in Matthews v Chicory Marketing Board (1938) 60 CLR 263 at 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. The principal purpose of the Training Guarantee Fund, into which the amount of the training guarantee charge is paid, is to make payments under training guarantee agreements with the States and Territories. The amounts paid are then to be used by the States and Territories in relation to eligible training programs. The employees of an individual employer upon whom the charge is levied might or might not benefit from a training program financed by a State or Territory. If a training program may be characterized as a service it is not a particular service rendered to a particular employer by reference to the charge levied upon him. A particular employer may derive no more benefit from payments made under training guarantee agreements than is derived by employers or the community in general from having a better trained workforce upon which to draw. The training guarantee charge is not a charge “exacted for particular identified services provided or rendered individually to, at the request or 590

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Northern Suburbs General Cemetery Reserve Trust v Commonwealth cont. direction of” the employer required to make the payment. It cannot, therefore, be said to be a fee for services or akin to a fee for services in any sense which would prevent it from being a tax. The plaintiff seeks to support its argument by submitting that the imposition of the charge is not for the purpose of raising revenue. The object of the legislation would be achieved, it is said, if every employer to whom it applied were to expend sufficient upon training his employees to ensure that there was no shortfall and, hence, no charge. Such moneys as are raised are to be paid into the Training Guarantee Fund which, so the argument goes, is to be expended upon those forms of training which, had they been initiated at the expense of the employer upon whom the charge is imposed, would have eliminated the charge. Upon the plaintiff’s argument the legislation is designed to provide a facility for employers who choose not to provide the facility themselves. 589 But to 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 in this aspect of the plaintiff’s argument, but that case, if it survived Osborne v Commonwealth (1911) 12 CLR 321, was laid to rest in Fairfax v Federal Commissioner of Taxation (1965) 114 CLR 1. (See also Murphyores Incorporated Pty Ltd v Commonwealth (1976) 136 CLR 1 at 23.) In Fairfax, at 11 (see also at 16, 18) the Court rejected the doctrine that “a law which purports to provide for a tax upon behaviour is in substance not a law with respect to taxation if it exhibits on its face a purpose of suppressing or discouraging the behaviour and is to be explained more convincingly as a means to that end than as a means to provide the Government with revenue”. The same reasoning applies where the purpose of the law is to encourage rather than discourage behaviour. As Windeyer J put it (Fairfax, at 18): The Commonwealth Parliament may use its power to make laws with respect to taxation in order to promote some purpose that it desires to promote. The law is not thereby rendered invalid. The question is only: is it properly described as a law with respect to taxation? … A law with respect to taxation may do no more than exempt from a tax that would otherwise be exigible persons or transactions that answer certain descriptions or fulfil certain conditions. (See also Radio Corporation Pty Ltd v Commonwealth (1938), 59 CLR 170 at 179–180.) The further submission which the plaintiff makes to support its argument that the charge is not a tax is that it is arbitrary. That submission is based upon s 18A of the Assessment Act, subs (1) of which provides that the training guarantee charge is not payable by an employer for a year if, under the regulations, the employer is taken to be an eligible outstanding trainer for that year or for a three-year period that includes that year. Under subs (2)(a) of that 590 section regulations may be made empowering the Minister or a person specified in the regulations to make decisions about eligible outstanding trainer status. Clearly it is intended that the regulations should set out the relevant criteria by which eligible outstanding trainer status is to be determined. If that were not clear from subs (1) itself, it appears from subs (2) which goes on to speak of applicants for eligible outstanding trainer status obtaining certificates about compliance with relevant criteria. In MacCormick v Federal Commissioner of Taxation (1984) 158 CLR 622 at 640 it was pointed out that, for an impost to satisfy the description of a tax, it must be possible to differentiate it from an arbitrary exaction and that this can only be done if there are ascertainable criteria by reference to which the liability to pay the impost is imposed. It is conceivable that, where exemption from liability to pay an impost may be arbitrarily or capriciously granted, the impost itself may be arbitrary in the sense that liability to pay it is as much dependent upon the absence of exemption as upon the satisfaction of those criteria by reference to which the liability to pay is imposed. But that is not this case. Here, s 18A clearly envisages regulations which set out the relevant criteria for determining when an employer is to be taken to be an eligible outstanding trainer and, in those circumstances, that section does not authorize the granting of exemption upon any arbitrary or capricious basis. [7.150]

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Northern Suburbs General Cemetery Reserve Trust v Commonwealth cont. For these reasons, it is my view that the training guarantee charge imposed by the Taxing Act, being a compulsory levy by a public authority imposed for public purposes and being enforceable by law, is a tax within the meaning of s 51(ii) of the Constitution. [Mason CJ, Deane, Toohey and Gaudron JJ reached the same conclusion for similar reasons. On the tax versus penalty issue, they commented:] Legislative purpose not to raise revenue 568 The plaintiff argues that the liability to pay the charge is not a tax because the raising of revenue was not among the objects of the Act and the Administration Act. For, as Windeyer J said in Fairfax v Federal Commissioner of Taxation (1965) 114 CLR 1 at 19: Taxes are ordinarily levied to replenish the Treasury, that is to provide the Crown with revenue to meet the expenses of government. That is the prime purpose of income tax. It is certainly the case that the raising of revenue is not among the objects enumerated in s 3 of the Administration Act. And, if those objects are achieved, no revenue will be raised by the Act and the Administration Act since each employer will expend on “quality employment related training” an amount equal to its minimum training requirement leaving no chargeable training guarantee 569 shortfall. To that extent, the Act and the Administration Act do not express a purpose corresponding to that stated by Windeyer J. The plaintiff argues that the correct characterization of the charge is as a penalty imposed to ensure or encourage the achievement of the enumerated statutory objects. The answer to the plaintiff’s argument is that, when attention is given to the legislative scheme in its entirety, s 3 does not appear to be an exhaustive statement of the statutory objects. Plainly enough, one object of the legislative scheme, readily discernible from its provisions, is to impose on an employer who does not expend on quality employment related training an amount equal to its minimum training requirement a liability to pay the charge. In this respect, the imposition of the liability to pay the charge is a secondary object of the scheme, albeit one to be implemented only in the event that an employer does not expend on quality employment related training an amount equal to its minimum training requirement. 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 ((1965) 114 CLR 1 at 12, per Kitto J, citing J W Hampton & Co v United States 276 US 394 (1928)). 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. … 571 The characterization of the charge is complicated by the circumstance that the legislature has not stated whether the charge is a tax or a penalty when it could easily have done so. But, in 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 (MacCormick v Federal Commissioner of Taxation (1984) 158 CLR 622 at 639, per Gibbs CJ, Wilson, Deane and Dawson JJ). 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. 572 The law “‘fairly answers the description of a law “with respect to” one given subject matter appearing in s 51’ regardless of whether it is, at the same time, more obviously or equally a law with respect to some other subject matter” (Re F; Ex parte F (1986) 161 CLR 376 at 387–388, per Mason and Deane JJ, citing with approval Actors and Announcers Equity Association v Fontana Films Pty Ltd (1982) 150 CLR 169 at 194, per Stephen J). Accordingly, 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. 592

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Northern Suburbs General Cemetery Reserve Trust v Commonwealth cont. [Brennan J concurred with the judgment of Mason CJ et al on this issue, and McHugh J concurred with that of Dawson J.]

[7.155] The issue of characterisation and “public purposes” was most recently considered by

the High Court in the following case which considered the validity of Australia’s superannuation scheme whereby compulsory contributions to employee superannuation was required of employers.

Roy Morgan Research v FCT [7.160] Roy Morgan Research Pty Ltd v Federal Commissioner of Taxation (2011) 244 CLR 97 at 101–119 (some footnotes omitted) [Section 5 of the Superannuation Guarantee Charge Act 1992 (Cth) imposed a superannuation guarantee charge on any “superannuation guarantee shortfall” of an employer, the amount of the charge being equivalent to the amount of the shortfall (s 6). Part 3 of the Superannuation Guarantee (Administration) Act 1992 (Cth) provided that liability to pay the charge fell on all employers to whom the Act applied (s 16). The Commissioner of Taxation was required under Pt 8 of the Act to pay “shortfall components” for the benefit of the employees individually whose entitlement was based on the precise amount of superannuation contribution that their employer had not made. The payment was to be made in the name of the benefiting employee and paid into certain retirement savings accounts, complying superannuation or approved deposit funds. Section 71 made a standing appropriation from the Consolidated Revenue Fund for amounts the Commissioner was required to pay. Roy Morgan Research Pty Ltd, which had been assessed by the Commissioner to pay the superannuation guarantee charge, contended that the legislation was not within the legislative power of the Commonwealth under s 51(ii) as the charge was not a tax and was not imposed for a public purpose. It simply conferred a private benefit on employees whose employers had failed to meet their compulsory superannuation obligations. The High Court held unanimously that as the imposition of a tax for the benefit of the Consolidated Revenue Fund is made for public purposes and as moneys received into the Fund may be appropriated for any purpose for which the Parliament may lawfully spend money, “any private and direct benefit” obtained by employees from the charge did not indicate that it was not imposed for public purposes. Hence, the charge was a tax within s 51(ii) of the Constitution.] French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ: 101 [3] … 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. [4] The revenue raised by the Charge is dealt with as “public money” to which [the relevant sections] of the Financial Management and Accountability Act 1997 (Cth) apply. This reflects the operation of ss 81 and 83 of the Constitution. … [5] … [T]he Parliament followed the well-established procedure to comply with the requirement of s 55 of the Constitution that laws imposing taxation shall deal only with the imposition of taxation. Thus the Charge Act does no more than impose what is said to be a tax and fix the rate. It is the Administration Act which deals with the incidence, assessment and collection of the Charge. Section 3 of the Charge Act states that the Administration Act is incorporated and to be read as one with the Charge Act. … 104 [14] … Failure to observe the requirements of s 55 brought down the legislation at issue in Air Caledonie International v Commonwealth (1988) 165 CLR 462 at 471–472 and Australian Tape Manufacturers Association Ltd v Commonwealth (1993) 176 CLR 480 at 507–508. … [15] However, taxation stands outside the guarantee provided by s 51(xxxi) (Trade Practices Commission v Tooth & Co Ltd (1979) 142 CLR 397 at 408). The result is that some laws which are held not to impose taxes nevertheless may be invalid by reason of s 51(xxxi). In Tape Manufacturers, the law under challenge was held not to be a law with respect to the acquisition of property but to be a law imposing taxation which nevertheless was invalid because there had been a contravention of s 55 of the Constitution. [16] It should be added that the discernment of a legislative objective to raise revenue is not [7.160]

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Roy Morgan Research v FCT cont. necessarily a determinant that the exaction in question bears the character of taxation (Airservices Australia v Canadian Airlines International Ltd (2000) 202 CLR 133 at 178 [90]; Luton v Lessels (2002) 210 CLR 333 at 343–344 [13]). 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. … [17] The notion expressed in various other taxation cases of “the purposes of the administration of Government” and variants thereof thus have to be understood as encompassing the considerations just mentioned. [18] … [A]s was indicated in Griffiths v Minister for Lands, Planning and Environment (2008) 235 CLR 232 (at 242 [25]), this statutory usage has reflected longstanding authority which treats “public purposes” as the purposes of the administration of government, a notion associated with the expressions “the use and service of the Crown” and of “the Public Service”. [19] These latter expressions were used in the United Kingdom and then in the Australian colonies (Pape v Federal Commissioner of Taxation (2009) 238 CLR 1 at 78–80 [198]–[202]) to identify charges by statute upon the Consolidated Fund. They were used, not as a limitation upon the activities of the executive branch of government, but to encompass the range of those activities it conducted from time to time, whether in exercise of the executive power itself, or in the exercise of functions conferred by statute (Pfizer Corporation v Ministry of Health [1965] AC 512 at 533–534, 566–567). This particular source in United Kingdom and colonial constitutional practice should be kept in mind when considering the earlier authorities in this Court which link the expression “public purposes” to the constitutional conception of “taxation”. In particular, the phrase “public purposes” is not synonymous with “public interest” (Australian Tape Manufacturers Association Ltd v Commonwealth (1993) 176 CLR 480 at 504–505). [20] 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 106 moneys to the States and thus to broaden, not narrow, the notions of “public service” and “public purposes” (Pape v Federal Commissioner of Taxation (2009) 238 CLR 1 at 41–43 [68]–[75], 80–81 [203]–[204], 86 [226]). [21] 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). [22] However, it became apparent in the early days of this Court that the necessary “purposes of government” might still be served where, pursuant to statute, the entity imposing, collecting and applying the proceeds of a tax was not the Commonwealth or a State itself. … 110 [36] In Matthews, Latham CJ … added …: “It [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.” [37] The majority in Tape Manufacturers (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” (at 503). It was not necessary to decide that question in Tape Manufacturers and the majority in that case did not do so. Nor is it necessary in this case, given the addition of the proceeds of the Charge to the Consolidated Revenue Fund, to pursue that question, or any broader questions about whether it is essential to the concept of a tax that the exaction should be by a public authority. [38] Speaking of the “recoupment tax” imposed by the federal legislation considered in MacCormick v Federal Commissioner of Taxation (1984) 158 CLR 622 at 639, Gibbs CJ, Wilson, Deane and Dawson JJ said (at 639): The exactions in question answer the usual description of a tax. They are compulsory. They are to raise money for governmental purposes. They do not constitute payment for services rendered: see Matthews v Chicory Marketing Board (Vic) per Latham CJ (1938) 60 CLR 263 at 276; Leake v Commissioner of Taxation (WA) per Dwyer J (1934) 36 WALR 66 at 67–68. They are not penalties since the liability to pay the exactions does not arise from any failure to discharge antecedent obligations on the part of the persons upon whom the exactions fall: see R v Barger (at 54) per Isaacs J. They are not arbitrary. Liability is imposed by reference to 594

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Roy Morgan Research v FCT cont. criteria which are sufficiently general in their application and which mark out the objects and subject matter of the tax: see Federal Commissioner of Taxation v Hipsleys Ltd (1926) 38 CLR 219 at 236. Their Honours added 111 (at 640): 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. … [40] … 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. Further examples are provided by decisions in Moore v Commonwealth ((1951) 82 CLR 547), Federal Commissioner of Taxation v Clyne ((1958) 100 CLR 246) Airservices Australia v Canadian Airlines International Ltd, and Luton v Lessels. [41] In Moore, the money raised from each wool producer was to be applied in satisfaction of its assessed income tax or provisional income tax and otherwise was to be refunded to the producer; the laws in question were supported by s 51(ii) of the Constitution but did not themselves impose a tax so as to have required observance of s 55 by the Parliament at 568–569, 576, 581–582) … [42] The charges imposed on the airlines which were considered in Airservices Australia were examples of financial burdens placed upon “users” to fund the maintenance of public assets and the provision of public services. Finally, the scheme established by the two statutes considered in Luton v Lessels provided a new mechanism for the enforcement of existing obligations to make child maintenance payments. The legislation did so by the substitution of a new obligation 112 to the Commonwealth to be owed by the obligor and a new right against the Commonwealth owed by the obligee, measured by reference to the obligation which was terminated (at 355 [60]). [43] The exaction represented by the Charge [on the present facts] … is not of a nature which takes it outside the constitutional conception of “taxation”. None of the examples considered above are applicable here. [44] The legislation considered in the recent decisions which bears the closest analogy to the Charge Act and the Administration Act is that which was the subject of Northern Suburbs General Cemetery Reserve Trust v Commonwealth (1993) 176 CLR 555. [45] In that case, … [a] charge was imposed corresponding to the amount by which the actual expenditure on training by each employer fell short of that minimum amount; the employer was rendered liable to pay the amount of the shortfall to the Commissioner and thus into the Consolidated Revenue Fund; an equivalent amount was appropriated from the Consolidated Revenue Fund into a trust account which was expended on workforce training, in particular by payments made pursuant to agreements between the Commonwealth and the States. [46] The appellant in its submissions concerning Northern Suburb emphasised that under the training guarantee scheme upheld in that case, and unlike the situation in the present case, there was no “linkage” in the sense of a requirement that funds collected under the charge be expended on training of the particular employees paying the charge. [47] … The absence of a requirement that moneys disbursed be expended upon eligible training programs by those employers who had incurred a liability to pay the charge was significant. This indicated an absence of a sufficient relationship between the liability to pay and the provision of employment related training, to warrant characterising the liability to pay the charge as a fee for services, or as something akin to a fee for services provided to that employer (at 568). … 113 [49] 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 (Australian Tape Manufacturers Association Ltd v Commonwealth (1993) 176 CLR 480 at 503, 522). 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 [7.160]

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Roy Morgan Research v FCT cont. 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. [50] 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 (Moore v Commonwealth (1951) 82 CLR 547 at 561 per Latham CJ; at 572 per McTiernan J; Parton v Milk Board (Vic) (1949) 80 CLR 229 at 258 per Dixon J; R v Barger (1908) 6 CLR 41 at 82 per Isaacs J). … [51] 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 (and its predecessors in the United 114 Kingdom and the Australian colonies) 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. Heydon J: 117 [63] The question, then, is whether the superannuation guarantee charge, considered as an exaction, is a tax. To the extent that employers make payments directly into employees’ superannuation funds, there will be no exaction; to the extent that they do not, there will be. The legislative scheme uses the threat of the exaction to prevent the need to pay it from arising. But each occasion when the need to pay it arises tends to encourage others later so to arrange their affairs that they do not have to pay it. In the Northern Suburbs Case the spending of the exaction on training did not prevent the exaction from being a tax. So here, the spending of the exaction on payments into superannuation funds for the benefit of employees does not prevent the exaction from being a “tax”. 118 [65] … Luton v Lessels is distinguishable because there the obligation created in the Commonwealth was created in substitution for a former obligation of another person which was terminated. Here no particular obligations of employers to make payments into superannuation funds for the benefit of their employees are terminated, although compliance with those obligations will reduce the charge, and to the extent that payments are made into superannuation funds from the Consolidated Revenue Fund this will eliminate or destroy the quantum of damages which the employees can claim from their employers for breach of these obligations. The duty to pay the superannuation guarantee charge does not depend on the existence of any obligation to make payments into superannuation funds. And no duty is created on employers to make contributions into those superannuation funds. In Luton v Lessels the legislation created a new legal obligation to do something in substitution for an existing one. Here the legislation merely creates an incentive to do something, whether or not there was any obligation to do it. [66] Finally, the appellant relied on Luton v Lessels as exemplifying a distinction between “public purposes” as a necessary element in a tax and “the public interest” which was not sufficient to satisfy the “public purposes” element in a tax. The appellant did not demonstrate that the references to “public interest” on which it relied in Luton v Lessels (at 343 [12], 352 [48]) were supportive of the proposition that the purposes of the superannuation legislation were matters only of “public interest”, not “public purpose”.

[7.170]

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Notes&Questions

While the Court has now clearly confirmed the principle that a levy or charge may still be a tax even if its underlying purposes are other than raising revenue (providing incentives, disincentives or otherwise to regulate particular activities or conduct) to what extent did the reasoning clarify the uncertainties arising from ATM and Air Caledonie? The plurality appear to have had concerns about the position taken in ATM that an exaction could still be characterised as a tax if it was collected by a non-public authority: “a large and controversial step beyond what was said in Matthews” (at 110 [7.170]

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[37]. They indicated that this may depend on the meaning of the term “non-public” authority in circumstances where “one of” the functions of the authority is to receive exactions to be expended on “public purposes”. Does this suggest an acceptance of the view that an otherwise private entity may be treated as “public authority” in order to meet the requirement of a “public authority” as envisaged in Matthews? The plurality did not regard it as necessary to answer that question. 2.

Unlike the ATM case, the money collected here was to be deposited with Consolidated Revenue. Accordingly the attribute of “public purposes” was met and the submission by the appellant that the charge simply conferred a private and direct benefit was rejected. This was because “it is settled that the imposition of a tax for the benefit of the Consolidated Revenue Fund is made for public purposes”. However, the receipt of funds into Consolidated revenue does not conclusively establish their character as a “tax”. See 113 [49].

3.

To what extent did the Court clarify the meaning of “public purposes”? In particular, to what extent did adopt the narrower position taken by McHugh J in ATM that it refers to governmental purpose? It is clear that the court rejected the notion that “public purposes” is synonymous with “public interest”. See 105 [18] ff.

4.

The joint judgment also made reference to the requirement that, to be a tax, the exaction could not be arbitrary, that liability was imposed by reference to criteria which were sufficiently general in their application and which mark out the objects and subject matter of the tax. To what extent was the reasoning successful in comprehensively defining what would constitute an arbitrary exaction? Is it sufficient to be able to say that the exaction and its method of imposition leaves available to the taxpayer some judicial process whereby the taxpayer can challenge legally whether the tax was exigible or not in the sum assessed? See MacCormick v FCT (1984) 158 CLR 622, especially at 639-41 and DCT v Truhold Benefit Pty Ltd (1985) 158 CLR 678 at 684, 687-688.

5.

A novel question arose in Pape v Commissioner of Taxation (2009) 238 CLR 1: whether a law which requires payment of money to taxpayers is a law with respect to taxation. The impugned law, the Tax Bonus for Working Australians Act (No 2) 2009 (Cth) provided for the payment of a one-off “tax bonus” to taxpayers based on their taxable income and was to be administered by the Commissioner of Taxation. The Act was held valid by the majority (French CJ, Gummow, Crennan and Bell JJ) on the basis that the power to pay such bonuses in a “financial” crisis derived from s 61 (which refers to “the executive power of the Commonwealth” and could thus be supported by legislation pursuant to s 51(xxxix), the incidental (legislative) power. Accordingly, it was not necessary for them to consider the other arguments relating to validity, including that which related to s 51(ii). However, the dissenting justices on this issue, Hayne and Kiefel JJ, and Heydon J in a separate judgment, did address the s 51(ii) issue. Hayne and Kiefel JJ held the law to be with respect to taxation, but only if read down: 130 [384] In Mutual Pools & Staff Pty Ltd v The Commonwealth (501), the court held … that a law regulating and defining rights of refund of amounts unnecessarily or mistakenly paid to the Commonwealth in discharge of asserted taxation liabilities was a law with respect to taxation. But that is not this case. If the Impugned Act operated according to its terms, there would be no necessary connection between the amount that was paid as tax and the amount to be paid as a tax bonus. … [386] Here, it is said that the Impugned Act, in all its operations, is a law with respect to taxation because it takes as the critical criterion for its operation the identification of a person as one who [7.170]

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has paid tax for the most recently completed financial year. And because those, and only those, who have paid tax (and whose taxable income for that year did not exceed $100,000) are eligible for the payment, the law is said to be a law with respect to taxation. But as in Fairfax, that fact, standing alone, directs attention to why the legislators may have enacted the Impugned Act. While it may readily be accepted that the Impugned Act seeks to single out certain taxpayers for the benefit for which it provides, that does not make the Impugned Act a law with respect to taxation. Further, although the payment to be made under the Impugned Act is called a “tax bonus”, attribution of that name adds nothing to the debate about characterisation. The character of the Impugned Act depends upon “the nature of the rights, duties, powers and privileges which it changes, regulates or abolishes” ((19650 114 CLR 1at 7). [387] The amount to be paid depends upon a person’s taxable income for 2007-08. On the face of the Impugned Act there is no direct connection, in all operations of the Act, between the amount of the bonus and the amount that has been paid in tax. As the Act is written, the amount that is paid under the Impugned Act may be more or it may be less than the amount of tax the person paid for that year. By the time payments must be made under the Impugned Act it will not be known whether a person to whom the payment is made will be liable to pay income tax for 2008-09. [388] The Commonwealth was right to accept that the Impugned Act is not a law with respect to taxation in all its operations. [Hayne and Kiefel JJ nevertheless were able to read down the Act:] 133 [393]Read down in the manner indicated, the Impugned Act provides for payment to taxpayers whose taxable income for the income year 2007-08 did not exceed $100,000 (and who are not within one of the exceptions provided by s 5(2)) of the amount of that person’s adjusted tax liability for that income year or the amount of the tax bonus fixed under the Act, whichever is the less. Read with that operation, the Impugned Act provides for repayment to certain taxpayers of some or all of the amount the taxpayer was liable to pay for income tax for the last complete income year. With that operation the Impugned Act is a law with respect to taxation.

Heydon J, however, was unable to salvage the Act by reading it down. The references in the Act to “adjusted tax liability” and “taxable income” 156 [453] serve as methods for identifying the class of recipients and the quantum of what they are to receive. These references to their tax position have nothing to do with the correctness of their tax liability. Their tax position is significant because of its utility as a guide to whether recipients are likely to spend rather than save the bonuses paid, and because of the Commissioner’s possession of readily available records enabling expeditious assessment of whether recipients meet the criteria for entitlement to the bonuses. It was not the bonus which adjusted any tax liability; rather, it was the “adjusted tax liability” which was a criterion for identifying which persons were eligible for the bonus. [454] The defendants submitted that a law could relate to taxation even though it provided for a payment to achieve an object other than the correction of a taxation error. The present difficulty, however, is that the Tax Bonus Act, although devised to achieve an object other than the correction of a taxation error, has no other connection with rights and liabilities in relation to taxation.

Gummow, Crennan and Bell JJ did not accept that the Act could be read down in the way indicated by Hayne and Kiefel JJ. The result, in their view, was clearly contrary to the intention of Parliament. That reading down “does not limit the provision to one or more of the various operations otherwise encompassed by any form of general words. Rather it seeks to introduce a foreign integer, namely the adjusted tax liability of those persons who otherwise” [were eligible to receive the bonus under the Act] at 94[251]). 598

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Limitations on the tax power: discrimination and preference [7.180] The principal constitutional limitations on the taxation power are the prohibitions

against discrimination and preference in ss 51(ii) and 99. These provisions, reflecting primarily federal rather than civil liberty concerns, prohibit discrimination and preference between States or parts of States. Section 51(ii) applies only to laws with respect to taxation, while s 99 is confined to a “law or regulation of trade, commerce, or revenue”, which primarily means a law enacted pursuant to s 51(i) or (ii). It can include a law enacted under s 52(i) of the Constitution: Permanent Trustee Australia Ltd v Commissioner of State Revenue (2004) 220 CLR 388 at 422 [83]–[84], 427 [102], 433 [125], 460 [208]. An appropriation Act is not a law of “revenue” (see W R Moran Pty Ltd v Deputy Commissioner of Taxation (NSW) [1940] AC 838 (PC)) (but see Permanent Trustee per Kirby J, discussed at [7.220]), and s 99 has been held not to apply to laws affecting trade or commerce if enacted under a power other than s 51(i) such as, eg, the defence power, s 51(vi): Morgan v Commonwealth (1947) 74 CLR 421, followed in the Tasmanian Dam Case in regard to s 100 of the Constitution: (1983) 158 CLR 1 at 153–154 per Mason J, at 182 per Murphy J, at 248–249 per Brennan J. (Deane J found it unnecessary to consider this issue: at 251.) The principal issues of interpretation raised by ss 51(ii) and 99 are: (a) What is meant by “preference” in s 99? The meaning of “preference” was clarified in Crowe v Commonwealth (1935) 54 CLR 69 and followed in Elliott v Commonwealth (1936) 54 CLR 657, see at 669 per Latham CJ: In the case of a law or regulation of trade and commerce the difference between the two places under consideration (whether they be States or parts of States) must be such as to amount to a trading or commercial preference which is definitely given to one State or part thereof over another State or part thereof. This was the view expressed in the case of Crowe v Commonwealth (1935) 54 CLR 69. In that case Rich J said that s 99 referred to “tangible advantage of a commercial character” (1935) 54 CLR, at 83. Starke J said: “The preferences prohibited by s 99 are advantages or impediments in connection with commercial dealings” (1935) 54 CLR, at 86. Similarly Dixon J said: “The preference referred to by s 99 is evidently some tangible advantage obtainable in the course of trading or commercial operations, or, at least, some material or sensible benefit of a commercial or trading character” (1935) 54 CLR, at 92. Evatt and McTiernan JJ pointed out that the provision which was then challenged “neither puts any State in possession of trading advantages over another State nor gives it the power to obtain any such advantages” (1935) 54 CLR, at 96, 97 and for that reason it was not obnoxious to s 99 of the Constitution.

In Fortescue Metals Group Ltd v Commonwealth (2013) 300 ALR 26, French CJ made the following relevant observations (at 40[31]): [Quick and Garran] foreshadowed the application of a criterion of reasonableness to the characterization of preferences: “If a difference of treatment is arbitrary, or if its purpose is to advantage or prejudice a locality, it is undue and unreasonable, and is accordingly a preference. If on the other hand the difference of treatment is the reasonable result of the dissimilarity of circumstances – or is based on recognized and reasonable principles of administration – it is no preference” (The Annotated Constitution of the Australian Commonwealth (1901) p 878). That approach to characterization was reflected in the general observations about the concept of discrimination made by Gaudron, Gummow and Hayne JJ in Austin ((2003) 215 CLR 185 at [118]), and quoted by the majority in Permanent Trustee in its discussion of the application of s 99 (2004) 220 CLR 388 at [89]): “‘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 [7.180]

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proper objective.’ Their Honours’ observation … set out a criterion for characterisation of a law as discriminatory for the purposes of s 51 (ii).”

(b)

What is meant by “discriminate” in s 51(ii)? As will be seen below, the abiding issue with respect to s 51(ii) has been whether a substantive or formal approach is taken when considering what constitutes discrimination “between States or parts of States.” On the question of what is meant by discrimination per se, the following was stated in Fortescue Metals Group Ltd v Commonwealth (2013) 250 CLR 548. It is noted that defining “discrimination” in the present context is not easily detached from a consideration of the prohibited basis for the discrimination, ie “between States of parts of States.” Hayne, Bell and Keane JJ: 601 [103](footnotes omitted) [D]iscrimination “involves a comparison”. Usually that comparison will be informed by notions of difference and equality. In at least some cases, the notions of difference and equality which underpin the comparison will be supplemented 602 by consideration of why some distinction is discerned in the relevant treatment of, or outcome for, the subject of the alleged discrimination. [104] Whether, or to what extent, these notions may apply in connection with constitutional provisions other than s 51(ii) need not be, and is not, examined here. But it is necessary to exercise some care in determining whether, or to what extent, these are notions that can have a direct or immediate application in connection with s 51(ii). In that regard, it is relevant to notice that s 51(ii) “with its prohibition of discrimination may not be the same as Art 1, s 8 of the Constitution of the United States requiring uniformity” of taxation. Different outcomes may be sufficient to demonstrate lack of uniformity but may not suffice to show discrimination. [105] Quick and Garran said of the limiting clause in s 51(ii) that “[t]o discriminate obviously means to make differences in the nature, burden, incidence and enforcement of taxing law; to impose a high tax on commodities or persons in one State and a low tax on the same class of commodities or persons in another State, would be to discriminate”. This understanding of “discriminate” accords with its basic dictionary meaning: “[t]o make a distinction; to perceive or note the difference (between things)” (original emphasis). Thus, when s 51(ii) speaks of a law with respect to “taxation; but so as not to discriminate between States or parts of States”, it is speaking of a law with respect to taxation which does not, in its terms, draw any distinction between states or parts of states. Regardless of what differences can be perceived between states or parts of states, a law with respect to taxation may itself make no distinction between them, whether by reference to differences that have been or could be perceived, or otherwise. That is, adopting the words quoted earlier from Quick and Garran, the limiting clause of s 51(ii) prevents the enactment of laws which “make differences in the nature, burden, incidence and enforcement of taxing law”. [Emphasis added.] Kiefel J: 629 [199] Discrimination is a concept that arises for consideration in a variety of constitutional contexts. Section 51(ii) prohibits a Commonwealth taxation law discriminating “between States or parts of States”. The discrimination of which it speaks is discrimination on account of locality. Section 51(ii) requires that the states be treated alike and that a Commonwealth law relating to taxation not differentiate in its effect between the states. [200] In Barger (at 110), Isaacs J said that [d]iscrimination between localities in the widest sense means that, because one man or his property is in one locality, then, regardless of any other circumstance, he or it is to be treated differently from the man or similar property in another locality. Although his Honour was in dissent in Barger, with Higgins J, this view of s 51(ii) was subsequently cited with approval in Cameron v Deputy Federal Commissioner of Taxation (1923) 32 CLR 68 at 72, a case where a different standard was to be applied to the value of livestock solely by reference to “their State situation” (at 76). [201] Another statement by Isaacs J in Barger as to s 51(ii) is worthy of mention. It was referred to with approval by Evatt J in Deputy Commissioner of Taxation (NSW) v WR Moran Pty Ltd (1939) 61 CLR 735 at

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781 and on appeal by the privy council in that case ((1940) 63 CLR 338 at 348). Isaacs J said (at 108) that the “pervading idea” of the discrimination to which s 51(ii) refers is “the preference of locality merely because it is locality … It does not include a differentiation based on other considerations, which are dependent on natural or business circumstances”. Although his Honour was speaking of the reference in s 51(ii) to “parts of States”, what he said applies generally to the notion of discrimination with which s 51(ii) is concerned. 630 [202] Although discrimination can be an abstract concept, working out whether the effect of legislation is discriminatory is largely a practical question involving the consideration of unequal treatment (Street v Queensland Bar Association (1989) 168 CLR 461 at 510). It involves a comparison (Street at 506). If a Commonwealth taxation law provides that the same measure is to apply to all persons or things subject to the tax, it would not generally be regarded as likely to discriminate in fact. Where a difference results from the operation of a taxation law, the question arises whether that difference is accounted for by the geographical situation of the subject of the tax. Importantly, for there to be the discrimination of which s 51(ii) speaks, the difference must be produced by the Commonwealth law itself and by reference to that geographical situation. There may not be discrimination where the difference results from the provisions of a state law. Section 51(ii) does not prohibit a taxation law from operating differentially in all respects. It does not require that a taxation law control the effect of other, external, factors which may be productive of a difference.

(c)

A further question is whether it is necessary that there be “discrimination” in order for there to be “preference”? On this point, it was stated by Nettle J (with whom all the other justices agreed) in Queensland Nickel Pty Ltd v Commonwealth (2015) 318 ALR 182 at 190 [52] that s 99 “does not give a ‘preference’ by law or regulation to one state over another unless the law or regulation discriminates between those states.” Previously in Fortescue Metals Hayne, Bell and Keane JJ (at 607 [124] had stated, quoting Dixon J in Elliot v Commonwealth (1936) 54 CLR 657 at 683, that “‘[t]o give preference to one State over another State discrimination or differentiation is necessary’. But not every discrimination between states may amount to preference of one over another.” French CJ had stated similarly in that case (at 575 [30]): “this court’s treatment of the relationship between the non-discrimination and no-preference limitations recognises that ‘while preference necessarily involves discrimination or lack of uniformity, the latter does not necessarily involve the former.’” (per Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ in Permanent Trustee Australia Ltd v Commissioner of State Revenue (Vic) (2004) 220 CLR 388 at 423 [88]). His Honour went on to conclude that “that has the consequence that if the [impugned] Act cannot be said to discriminate within the meaning of s 51(ii) it cannot be said to give a preference within the meaning of s 99 (at 576 [30]).”

(d)

Does a mere difference in application between localities in the same or different States breach s 51(ii), or is a further element required, namely “differentiat[ion] … because they were particular States or parts of States” (R v Barger (1908) 6 CLR 41 at 107 per Isaacs J)? If the latter, what does “because” mean here? Does it refer to Parliament’s motive in enacting the legislation? The issue raised in (d) above informed the reasoning of those justices who attempted a definition of discrimination and preference above. The divergence of views on this issue has been at the centre of the High Court’s jurisprudence of this question. This became apparent as early as 1908 in R v Barger (1908) 6 CLR 41 in which the majority adopted the first interpretation (at 78 per Griffith CJ, Barton and O’Connor JJ) whereas Isaacs J adopted the second (at 107). [7.180]

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At present, the main authority on the interpretation of these provisions remains Elliott v Commonwealth (1936) 54 CLR 657.

Elliott v Commonwealth [7.190] Elliott v Commonwealth (1936) 54 CLR 657 at 666–693 [The Transport Workers (Seamen) Regulations 1935 (Cth) provided for a system of licensing seamen, at “prescribed ports”, as specified by the Minister. Only licensed seamen were to be employed at such ports. The Minister prescribed Sydney, Melbourne, Brisbane, Newcastle and Port Adelaide, but no ports in Western Australia or Tasmania. The Regulations were challenged on the ground that they contravened s 99 of the Constitution, but the High Court held them valid by 4:2, with Dixon and Evatt JJ dissenting.] Latham CJ [held legislative motive irrelevant in determining whether s 99 had been contravened (at 665) and continued]: 666 Section 51(ii) prohibits in relation to laws with respect to taxation discrimination between States or parts of States. In this case differentiation in legislation between States or parts of States is forbidden. The words used are “discriminate between” and not “discriminate against”. In order to apply this provision of the Constitution it is not necessary to arrive at any conclusion as to whether the difference in legislation as between States or parts of States confers an advantage upon any State or any part of a State over another State or over any other part of a State. No question of preference arises. Mere discrimination between States or parts of States, whether resulting in preference or not, is that which is fatal to the statute which infringes s 51(ii). 667 It may be noted that the discrimination which is forbidden by s 51(ii) includes discrimination between parts of the same State. In s 99 the geographical element in the prohibition is expressed by the prohibition of giving preference “to one State or any part thereof over another State or any part thereof.” There is nothing in s 99 which in terms prevents the giving of preference to one part of a State over another part of the same State, though it may be that in practice it would be difficult if not impossible to devise such a preference which would not also involve a preference to part of a State over another State or over a part of another State. In the case of bounties upon the production or export of goods, the requirement of s 51(iii) is that they shall be “uniform throughout the Commonwealth”. This section would be infringed by absence of uniformity, whether or not any preference was given to a State or a part of a State over another State or part thereof. A law providing for a bounty upon the export of goods would be a “law of trade or commerce” and accordingly would be subject to the prohibition contained in s 99. A law providing for a bounty upon the production of goods would not be a law of “trade or commerce” according to the accepted interpretation of those words. In the case of customs duties s 88 requires that “uniform duties of customs” shall be imposed within two years after the establishment of the Commonwealth. This section does not provide that customs duties shall continue to be uniform, and indeed there is no provision in the Constitution in these precise terms. It is s 51(ii) which, because customs duties are a form of taxation, prohibits any discrimination in customs duties between States or parts of States, and s 99 also applies to laws imposing customs duties, because they are laws of trade, commerce, or revenue. The requirement that uniform duties should be imposed excluded differences in any places in Australia in rates of duties upon the same classes of goods. Such differences were forbidden without reference to any relation to States or parts of States. In the case of s 88 (as well as in the case of s 51(ii) and s 51(iii)) it is 668 unnecessary to consider any question of preference – differentiation as opposed to uniformity is what is obnoxious to s 88. The sections mentioned 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 or 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. There may, however, be laws of trade or commerce which do not fall within ss 51(ii), 51(iii), or 88. The Transport Workers Act is an example of such a law. In the case of such laws there is no prohibition of 602

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Elliott v Commonwealth cont. discrimination as such between States or parts of States (as in the case of taxation) and there is no constitutional requirement of uniformity (as in the case of bounties under sec 51(iii) and original customs duties under s 88). Something more than discrimination or lack of uniformity must be shown before s 99 can operate. [Emphasis added.] What s 99 prohibits is giving preference “to one State or any part thereof over another State or any part thereof.” In order to apply this section it is necessary to determine that there is preference: it is necessary also to ascertain what the preference is, and to identify the State or part of a State to which the preference is given and the other State or part of another State over which the preference is given. The Constitution appears to be based upon the view that differentiation in some laws or regulations of trade and commerce (namely, those which do not relate to taxation, including customs duties, or bounties) may be proper and desirable or at least permissible, even as between different States, but that such differentiation must not amount to the giving of preference to one State or any part thereof over another State or any part thereof. In the case now before the Court there is no doubt that the law which applies in, for example, Sydney, does not apply in Fremantle. 669 The result of the legislation is to make a difference in the law applicable in these two places. It does not, in my opinion, follow from this fact that the law gives preference to one place over the other place. In the case of a law or regulation of trade and commerce the difference between the two places under consideration (whether they be States or parts of States) must be such as to amount to a trading or commercial preference which is definitely given to one State or part thereof over another State or part thereof. This is the view expressed in the case of Crowe v Commonwealth (1935) 54 CLR 69. In that case Rich J said that s 99 referred to “tangible advantage of a commercial character” (1935) 54 CLR 69 at 83. Starke J said: “The preferences prohibited by s 99 are advantages or impediments in connection with commercial dealings” (1935) 54 CLR 69 at 86. Similarly Dixon J said: “The preference referred to by s 99 is evidently some tangible advantage obtainable in the course of trading or commercial operations, or, at least, some material or sensible benefit of a commercial or trading character” (1935) 54 CLR 69 at 92. Evatt and McTiernan JJ pointed out that the provision which was then challenged “neither puts any State in possession of trading advantages over another State nor gives it the power to obtain any such advantages” (1935) 54 CLR 69 at 96, 97 and for that reason it was not obnoxious to sec 99 of the Constitution. … The argument on behalf of the plaintiff depended entirely upon the view which was taken of the effect of specifying ports under the regulations. When I consider the regulations I at once find a divergence of outlook in the definition of the “advantage” said to be given or conferred by the regulations in, or as the result of, the specification of particular ports, and also a difficulty in determining which State or part of a State is to be regarded by a Court as receiving the advantage. One view is expressed in the argument which was pressed upon the Court, namely, (to use the example given), that Fremantle was preferred to Sydney because the seamen in Fremantle were free from regulations 670 to which they were subject in Sydney. This proposition adopted the point of view of certain seamen. A second view would be that of other seamen, who are equally entitled to consider that the regulations give them an advantage in Sydney over seamen in Fremantle, where the licensing system is not in operation. According to this view Sydney is preferred over Fremantle. A third view which is put forward is that it is Sydney and not Fremantle that obtains preference – but for the different reason that employers of seamen in Sydney are regarded as receiving an advantage over employers of seamen in Fremantle. At the same time the argument is accepted that, from the point of view of certain seamen, Fremantle is given a preference over Sydney. … I have difficulty in understanding how one and the same legislative provision can, within the meaning of s 99, at once give preference to State A over State B and also preference to State B over State A. A similar observation applies to parts of States. … Thus there is difficulty in ascertaining satisfactorily what the alleged preference is and what State or part of a State receives it. It is, I think, entirely a question of opinion, which cannot be settled upon legal grounds, whether all or some only of the seamen of Sydney or the seamen of Fremantle or the employers of seamen in Sydney or the employers of seamen in Fremantle receive an advantage by reason of the legislation in question. [7.190]

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Elliott v Commonwealth cont. Where there is such vagueness as to the nature of the preference and the recipients of the preference I find myself unable to hold that there is here any tangible commercial advantage within the meaning of any of the expressions which I have quoted from Crowe v Commonwealth (1935) 54 CLR 69. 671 It may be said that the legislation is intended to confer and may be presumed to confer some trading or commercial advantages, that certain ports enjoy them, while others do not, and that these circumstances are sufficient to show that some preference is given without inquiring into any particular trading or commercial advantage. This view appears to me to rest upon a presumption that all legislation confers advantages upon those to whom it applies in a sense relevant to the application of the word preference in s 99. Doubtless this presumption may be taken to represent in a general way the attitude of the Parliament which passed the law in question, but I am unable to accept it as a legal proposition relevant to the interpretation of s 99. I think that such an interpretation ignores the express and distinctive reference to preference in s 99, with the result that the section is really construed as prohibiting any differentiation or discrimination in legislation to which s 99 applies. This view of the section, in my opinion, would make the preferences to which it refers notably intangible and indefinite, and it is not, I think, really consistent with the decision in Crowe v Commonwealth (1935) 54 CLR 69. My opinion is supported to some extent by consideration of the word “give.” The preference to which s 99 refers is something “given” to a State or a part of a State. The use of such a word appears to me to be inapt to describe mere differences in legislative provisions without definitely ascertainable tangible benefits conferred upon some areas and withheld from other areas. … 672 For the reasons stated I am of opinion that it has not been shown that the Transport Workers Act or the regulations give any preference within the meaning of s 99 of the Constitution. The second question which arises is whether, if a preference is given by the regulations in question, it is a preference given to one State or part thereof over another State or part thereof. In discussing this question, I shall assume, contrary to the opinion which I have expressed, that the legislation does give a preference. The argument of the plaintiff is that s 99 prohibits, in any law or regulation of trade, commerce, or revenue, preference based upon locality. The contention was that any preference given by legislation which was based upon locality necessarily involved a preference as between localities, and that therefore, as every locality in Australia is either a State or a part of a State, it involved preference as between States or parts of States. 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 emphasized 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. Section 51(iii) is similar to a provision contained in the Constitution of the United States: “All duties, imposts and excises shall be uniform throughout the United States.” The uniformity required 673 by this clause is what the Supreme Court of the United States has called “geographical uniformity” (Knowlton v Moore 178 US 41 (1900); 44 Law Ed 969). So also s 51(iii) of the Commonwealth Constitution requires geographical uniformity in relation to bounties. There must not be, in the case of bounties, any variation based upon locality within the Commonwealth. In considering this provision it is not necessary to inquire whether there is absence of uniformity as “between States or parts of States.” 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 legislation, 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 given to one State or part of a State over another State or part of a State. [Emphasis added.] Similarly in the case of customs duties it is provided in precise terms that uniform duties of customs shall be imposed. Section 99 does not, however, make such a provision. Section 99 says that the Commonwealth shall not by any law or regulation of trade, commerce or revenue give preference to 604

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Elliott v Commonwealth cont. any one State or any part thereof over another State or any part thereof. I agree with the explanation of the latter part of this provision given by Knox CJ in Cameron v Deputy Federal Commissioner of Taxation (1923) 32 CLR 68 at 72. Knox CJ referred to Barger’s Case (1908) 6 CLR 41 in relation to s 51(ii) (which with reference to taxation prohibits discrimination between States or parts of States) and approved the following statement of Isaacs J concerning discrimination between localities in a general sense: Discrimination between localities in the widest sense means that, because one man or his property is in one locality, then regardless of any other circumstance, he or it is to be treated differently from the man or similar property in another locality ((1908) 6 CLR 41 at 110). The Constitution in s 51(ii) does not, however, prohibit “discrimination between localities in the widest sense”. It prohibits 674 discrimination between localities only in a particular and limited sense “between States or parts of States.” Thus Knox CJ, having defined discrimination between localities in the widest sense, proceeded to apply the definition to the particular kind of discrimination which was forbidden by the section under consideration. He continued: I respectfully agree with this definition, and add that when the localities selected to furnish the discrimen are States or parts of States the discrimination is expressly forbidden by s 51(ii) of the Constitution ((1923) 32 CLR 68 at 72). The point of this observation is to be found, in my opinion, in the rejection of the contention that any form of discrimination between Australian localities (which, except in the Territories, are in fact all States or parts of States) is prohibited by the Constitution in s 51(ii). The Chief Justice was expressing his adherence to the view of Isaacs J that the prohibition to the Federal Parliament was against differentiating between States and parts of States “because they were particular States or parts of States” (1908) 6 CLR 41 at 107). After referring to s 99, Isaacs J continues: “The treatment that is forbidden, discrimination or preference, 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” (Barger’s Case (1908) 6 CLR 41 at 107). In Barger’s Case Griffith CJ and Barton and O’Connor JJ had taken a different view, saying that “the words ‘States or parts of States’ must be read as synonymous with ‘parts of the Commonwealth’ or ‘different localities within the Commonwealth’” ((1908) 6 CLR 41 at 78). In Cameron’s Case (1923) 32 CLR 68 at 72, however, Knox CJ made the statement which I have quoted. Isaacs J (at 76), Higgins J (at 78, 79) and Rich J (at 79) also accepted the principle stated by Isaacs J in Barger’s Case (1908) 6 CLR 41 at 110. … 675 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. [Emphasis added] 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. On this part of the case, though the reasoning upon which I base my decision is in my opinion soundly based upon the provisions of the Constitution, I am aware that it may be thought that the result is to make the protection of the section largely illusory. The operation of the section can be excluded by avoiding the adoption of reference to States or parts of States as such as a discrimen. It is however, some relief to me to find that the opposite view is open, from all practical points of view, to substantially the same objection. The opposite view concedes that s 99 is not infringed if the preferential treatment is based not upon locality alone but [7.190]

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Elliott v Commonwealth cont. also upon other circumstances. Thus, upon that view, the operation of the section can be excluded by including among the conditions even of avowedly preferential treatment a condition referring to some circumstance other than locality, possibly to any such circumstance, 676 but certainly to any other circumstance which is itself relevant to or an aspect of inter-State or foreign trade or commerce. … For the reasons which I have stated, I am of opinion that s 99 of the Constitution does not prevent the Commonwealth Parliament, when legislating with respect to maritime trade and commerce (including navigation and shipping) from making provision for adjusting its legislation by the means set forth in the regulations to the varying circumstances of particular ports. [Rich, Starke and McTiernan JJ reached the same conclusion.] Rich J remarked: 678 There is no discrimination against individuals as denizens of States. The licensing systems may involve a disability in the case of seamen. But the imposition is conditioned upon what is considered the necessity of legislative or executive action in particular localities. No account of State boundaries is taken. No benefit or advantage is given to a State or part of a State to the detriment of another State or part of it. The question appears rather to be one of maintaining order and regularity and of acting only where those conditions do not exist or are imperilled. [Starke J essentially agreed with Rich J, as did McTiernan J (the “prescribed ports” were specified “without any regard to the fact whether any such port is in State ‘A’ or State ‘B’”: at 704). McTiernan J also held that the Regulations conferred no “preference”. Dixon and Evatt JJ dissented.] Dixon J: 682 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 inter-State sea commerce of the States themselves. It is in the words “give preference over” that the crux of the case appears to me to lie. They express a conception necessarily indefinite. Their meaning cannot be considered apart from the words “law or regulation of trade, commerce, or revenue”. By limiting the class of law or regulation which may not be used as a means of giving preference, those words necessarily determine the kind of preference prohibited. 683 In Crowe v Commonwealth (1935) 54 CLR 69 at 92 I said that in relation to trade and commerce, as distinguished from revenue, the preference referred to by s 99 is evidently some tangible advantage obtainable in the course of trading or commercial operations, or, at least, some material or sensible benefit of a commercial or trading character. I intended the expression “trading or commercial operations” to bear a very wide and general meaning. It includes the activities which attend carriage by sea or land. Further consideration has confirmed me in the view which I then expressed. I repeat that the preference may consist in a greater tendency to promote trade, in furnishing some incentive or facility, or in relieving from some burden or impediment. But it is, perhaps, desirable to notice that the phrase is not “give a preference” but “give preference”. The difference may be slight, but the latter expression seems to bring out the element of priority of treatment, while the former has more suggestion of definite and actual advantage in the treatment. What is forbidden by s 99 is, in a matter of advantage to trade or commerce, the putting of one State or part of a State before another State or part thereof. But the section does not call upon the Court to estimate the total amount of economic or commercial advantage which does or will actually ensue from the law or regulation of trade or commerce. It is enough that the law or regulation is designed to produce some tangible advantage obtainable in the course of trading or commercial operations, or some material or sensible benefit of a commercial or trading character. 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 606

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Elliott v Commonwealth cont. in meaning. More nearly, if not exactly, the same in meaning, is the expression “discrimination against”. If s 99 had been expressed to forbid the Commonwealth by a law or regulation of trade, commerce, or revenue to discriminate against a State or part of a State, I do not think its effect would have been substantially varied. 684 The present regulations are restrictive and regulative. But the restrictions and regulations are directed at the disciplined and orderly conduct of a vocation or pursuit the work of which is essential to the carriage of goods or persons by sea. Ports in reference to which the system is applied enjoy its advantages whatever they may be. It is a system designed to promote the ease, convenience and orderliness of operations forming part of trade and commerce. The degree to which in practice it may do so, the manner in which it may be actually regarded by seamen, on the one hand, and shipmasters, on the other, and generally the merits or demerits of the system are, I think, beside the true question, which, in my opinion, is whether in a matter directed at commercial advantage one or more States have been put before another or others. That, in my opinion, has been done by giving to the sea commerce of four States a means devised for the enlistment and control of seamen and for maintaining order and discipline among them and by withholding it from the remaining two States. If the regulation had shown upon its face an intention that the system should be applied as a remedy for a particular inconvenience or evil which might be found at one place and not at another, if the Minister were authorized to prescribe ports only when he found a given state of facts to prevail there, it might, perhaps, have been open to us to decide that the facts and not the “law or regulation of commerce” made the discrimination. I had some doubt whether, even without such limitation of the discretion conferred upon the Minister, the Court might not, for the purpose of ascertaining whether preference was given, examine the actual grounds upon which the specification of ports proceeded. But I think that s 99 does not allow such a course. No doubt it does not require the Court to consider a law or regulation of commerce in abstracto. Preference and trade and commerce are conceptions which relate entirely to practical affairs. But s 99 does establish a standard of validity which is concerned with the character of the law or regulation of commerce and not with the particular trading or economic consequences which may or may not in fact ensue from it at a particular place and time. This appears to me to be decided in James v Commonwealth (1928) 41 CLR 442. There Higgins J said: “It is not an answer 685 to say, even if it is the fact, that Queensland or Tasmania does not produce dried fruits, and that this regulation makes no real difference to these States. We cannot take judicial notice of such a fact; nor can we assume a limit to the possibilities of a State’s trade or commerce under the changing conditions of science and invention” (James v Commonwealth(1928) 41 CLR 442 at 461). For these reasons I think the plaintiff is entitled to succeed. I think a declaration should be made that the specification of ports made by the Commonwealth is void. Evatt J [essentially agreeing with Dixon J, adopted the following propositions]: 692 (I) Section 99 forbids four types of preferential legislation, viz, (a) giving preference to a State over another State; (b) giving preference to a State over any part of another State; (c) giving preference to 693 any part of a State over another State; (d) giving preference to any part of a State over any part of another State. (II) Section 99 forbids laws or regulations which accord preferential treatment to persons or things as a consequence of local situation in any part of the six States, regardless of all other circumstances (R v Barger (1908) 6 CLR 41 at 78–81, per Griffith CJ, Barton and O’Connor JJ). (III) The section is not infringed if the preferential treatment is a consequence of a number of circumstances, including the circumstance of locality (R v Barger (1908) 6 CLR 41 at 107–111, 130–133, per Isaacs and Higgins JJ; Cameron v Deputy Federal Commissioner of Taxation (1923) 32 CLR 68; James v Commonwealth (1928) 41 CLR 442). (IV) The section operates objectively in the sense that the purpose or motive of the Legislature or Executive in giving preference by a law of commerce or revenue is not a relevant question, eg, it is irrelevant that the Legislature or Executive desires to facilitate or encourage inter-State or overseas trade, or to increase revenue (Cameron’s Case (1923) 32 CLR 68 at 74). (V) Section 99 may apply although the legislation or regulations contain no mention of a State eo nomine, eg, the section may be infringed if preference is given to part of a State (eg, that part of New South Wales which is represented by the port of Sydney) over another State (eg, Western Australia) or any part of another State (eg, Fremantle or Brisbane). (VI) To prove infringement of s 99 it is not sufficient [7.190]

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Elliott v Commonwealth cont. to show discrimination based on mere locality; it must also be shown that, as a consequence of the discrimination, tangible benefits, advantages, facilities or immunities are given to persons or corporations (per Dixon J, Crowe v Commonwealth (1935) 54 CLR 69 at 92).

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Notes&Questions

Latham CJ’s observations regarding the difficulty in determining whether the Regulations gave “preference” and, if so, to whom, are corroborated by the dissenting judgments in Elliott. Dixon and Evatt JJ held the Regulations invalid for giving preference to the States or parts of States in which “prescribed ports” were located over the two States in which they were not, yet the plaintiff’s counsel had asserted the opposite preference: “Western Australia and Tasmania are clearly preferred, because there is no port in either of those States to which the regulations apply” (at 660). Dennis Rose noted the difficulty courts face in determining whether “preference” has been given: [S]ection 99 provides that the Commonwealth shall not “give preference”, not that it shall not “give a preference”. Hence it does not seem open to deal with a case such as Elliott by holding that one kind of preference is given to seamen in the uncontrolled ports (eg, Fremantle) of one State over those in the controlled ports in other States, and that another kind of preference is given to employers in the controlled ports over employers in uncontrolled ports. Instead, it seems that, when the preferential effects go in contrary directions, the court must examine the overall effect of the law or the effect which the law is “directed” to achieve. The court must then decide whether, on the overall balance, “preference” is given to one State or part thereof over another State or part thereof. Plainly, this will often be a difficult task. (D Rose, “Discrimination, Uniformity and Preference – Some Aspects of the Express Constitutional Provisions”, in Zines (1977), 191 at p 208. Emphasis in original.)

2.

The High Court in recent years has emphasised the importance of adopting a substantive, rather than formalist, interpretation of constitutional prohibitions: see, eg, its recent interpretations of ss 90, 92 and 117. Professor Zines has remarked that in Elliott, Latham CJ “reduced s 99 of the Constitution to formal significance”: L Zines, “Form and Substance: “Discrimination” in Modern Constitutional Law” (1992) 21 Federal Law Review 136 at 136. This is especially the case in respect of the geographical component of s 99, as to which Dixon CJ observed that he had: 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, eg “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”. (Commissioner of Taxation v Clyne (1958) 100 CLR 246 at 266 per Dixon CJ, Williams, Kitto and Taylor JJ concurring.)

In Clyne, McTiernan J affirmed the decision of the majority in Elliott (at 268), while Webb J was of the view that the Privy Council had done so in Department of Taxation v WR Moran [1940] AC 838 at 856–857 – “so it would be useless to carry the discussion further” (at 272). However, Dennis Rose has challenged Webb J’s 608

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interpretation of the authorities: D Rose, “Discrimination, Uniformity and Preference – Some Aspects of the Express Constitutional Provisions”, in Zines (1977), 191 at p 195. 3.

4.

Can the formalist interpretation of ss 51(ii) and 99 favoured by Isaacs J (in Barger), Latham CJ (in Elliott) and McTiernan J (in Elliott and Clyne) be supported on the ground that a “wooden legalistic approach” to ss 51(ii) and 99 effectively prevents those provisions from “inhibiting Commonwealth policy … aimed at encouraging growth in particular parts of the country for national reasons”? (See Zines (1992) at 137.) In other words (Zines, at 140), “[w]ould it be better policy to hold onto the narrower and legalistic approach [to ss 51(ii) and 99] adopted hitherto?” (Note in this respect that the Trade and National Economic Management Advisory Committee of the Constitutional Commission recommended deletion of the non-discrimination and uniformity provisos in s 51(ii) and (iii) and repeal of s 99 of the Constitution: Report (1987), pp 200-204. The Constitutional Commission rejected these recommendations: Final Report (1988), vol 2, paras 11.208-11.224.) More generally, Zines ((1992) at 140) queries: (i) Is it ever desirable to reduce a constitutional provision so as to make it, in a practical sense, illusory or formalistic? (ii) Is it a judge’s duty to uphold the object of constitutional limitations whether he or she thinks they are socially desirable or not? In other words should a judge be able to choose in what areas the law should be fully upheld and in what areas it should be avoided by adopting a different (and formal) method of interpretation? (iii) Is it possible to devise a principle that would support [Street v Queensland Bar Association (1989) 168 CLR 461] and yet follow the formalistic approach taken in relation to ss 51(ii) and 99? One possible distinction would be that between a limitation on power and an individual freedom. But this does not strike me as a satisfactory distinction.

[7.210] A substantive interpretation of the concept of discrimination would recognise that

similar treatment of unlike situations may itself be discriminatory; non-discrimination may require unlike situations to be treated differently, provided that the unequal treatment is relevant and proportional to the differences. (See, eg, Re Australian Education Union; Ex parte Victoria (1995) 184 CLR 188 at 240; Castlemaine Tooheys Ltd v South Australia (1990) 169 CLR 436. Thus in Permanent Trustee Australia Ltd v Commissioner of State Revenue (the Mirror Taxes Case) (2004) 220 CLR 388 at 424 [89]) Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ appeared to adopt the following statement of Gaudron, Gummow and Hayne JJ in Austin v Commonwealth (2003) 215 CLR 185 at 247 [118]: 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. (Footnotes omitted.)

The question whether the High Court is competent to determine the economic and possibly scientific issues involved in assessing whether or not a law substantively discriminates between States or parts of States. It is interesting to note in this respect that the Constitutional Commission recommended that ss 51(ii), (iii) and 99 be amended by adding to each the words “unless the Inter-State Commission has adjudged that the [discrimination/particular bounty/ preference, respectively] is in the national interest”: see Report, paras 11.208 and 11.224. Cf the similar recommendation of the Royal Commission on the Constitution (1929): Report, para 11.219. General legislation which operates non-uniformly throughout the Commonwealth by reason of different local circumstances would probably not contravene s 51(ii) (or, a fortiori, [7.210]

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s 99), provided, at any rate, that the local differences were not such as to lead the court to conclude that the legislation’s facial generality was merely a disguise, so that, in substance, the legislation discriminated between States or parts of States (see D, “Discrimination, Uniformity and Preference – Some Aspects of the Express Constitutional Provisions”, in L Zines (1977), 191 at p 203). As the High Court has noted (Conroy v Carter (1968) 118 CLR 90 at 101 per Taylor J, Barwick CJ, McTiernan, Kitto and Menzies JJ concurring): [A] law with respect to taxation cannot, in general, be said so to discriminate if its operation is general throughout the Commonwealth even though, by reason of circumstances existing in one or other States, it may not operate uniformly.

However, any non-geographical distinguishing criteria ought to be prescribed in the legislation itself, not surmised by the court; Dennis Rose rightly criticised the reasoning of Rich and Starke JJ in Elliott on this ground at 196, 198. Dennis Rose has suggested that the standard for assessing such facially non-geographical criteria is whether they have a “relevant and sufficient connection with the purpose of the law, as ascertained from its terms” (see D Rose, “Discrimination, Uniformity and Preference – Some Aspects of the Express Constitutional Provisions”, in Zines (1977), 191 at p 203). Is s 51(ii) (or s 99) breached by a general law which operates by reference to State action which can vary from State to State? Could a Commonwealth income tax law validly authorise taxpayers to deduct certain State taxes from their taxable income if the incidence of those State taxes was not uniform throughout the Commonwealth? The High Court (obiter) considered such a provision (the Income Tax Assessment Act 1936 (Cth), s 72(1)) valid in Conroy v Carter (1968) 118 CLR 90 at 101. This general issue arose in two cases. (a) The Commonwealth’s first excise Act, the Excise Tariff Act 1902, allowed an exemption in respect of goods on which customs or excise duty had been imposed under State legislation (s 5). Since State duties were not uniform (Queensland, for example, imposed no excise duty on sugar), the effect of s 5 was that the operation of the Commonwealth Act varied from State to State. A challenge to the Act’s validity on the ground of discrimination between States was rejected by the Privy Council in Colonial Sugar Refining Co Ltd v Irving [1906] AC 360: The substance of the enactment in question is that goods which have already paid customs or excise duties shall not pay over again, and some such provision is obviously necessary in the transition from the old order to the new. The rule laid down by the Act is a general one, applicable to all the States alike, and the fact that it operates unequally in the several States arises not from anything done by the Parliament, but from the inequality of the duties imposed by the States themselves. The exemption from the new excise duties on the ground of previous payment of customs duties seems justifiable and right in establishing a system based on the absolute freedom of trade among the States, [368] and the substitution of a uniform excise for all inter-State duties on goods as well as what are strictly excise duties (at 367–368).

The Privy Council’s comments on the necessity for a provision like s 5 in transitional legislation diminishes the authority of the decision as establishing the general proposition that a Commonwealth Act which operates unequally owing to variations in the State laws by reference to which it operates will not contravene s 51(ii). Dennis Rose has remarked: If that unqualified proposition were correct, it would support a Commonwealth law taxing people who, at a specified date, were subject to a specified kind of law in a State. If so, the Commonwealth could burden people in a particular State simply by selecting some law that was only in force in that State. However, there should at least be some relevant and sufficient connection between the Commonwealth law and the State law 610

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selected [206] as the criterion for imposition of, or exemption from, the Commonwealth law. The payment of State duties on goods to be taxed by the Commonwealth is plainly a relevant and – one would think – sufficient matter, at least if the State duties were roughly comparable. However, transitional situations of the kind in CSR v Irving need not be the only situations where there is a relevant and sufficient connection between the Commonwealth law and the State law. (D Rose, “Discrimination, Uniformity and Preference – Some Aspects of the Express Constitutional Provisions”, in Zines (1977), 191 at pp 205-206. Emphasis in original.)

(b)

In Conroy v Carter (1968) 118 CLR 90 the High Court considered the validity under s 51(ii) of two provisions of the Poultry Industry Levy Collection Act 1965 (Cth), which authorised the Commonwealth to enter into arrangements with the States for the latter’s Egg Board to collect the Commonwealth’s levy on its behalf (s 5). Section 6(1)(a) provided that, while such an arrangement was in place, the Commonwealth’s hen levy “shall” be paid to the relevant State Egg Board. A challenge to the validity of this provision on the ground that it discriminated between States contrary to s 51(ii) was rejected unanimously. Taylor J held that the provision: does no more than provide a method by which a person who is bound to pay a levy to the Commonwealth may discharge his indebtedness … It is a provision which is general in its operation but the fact that it will have no application in States where an arrangement contemplated by s 5 is not in force does not constitute any reason for suggesting that it is a discriminatory provision. (at 102)

Menzies J similarly remarked that there was “no doubt that the Parliament is not obliged to make a uniform tax payable to one collector and that different collectors … may be appointed in different States” (at 103). (The other justices concurred with these remarks.) Section 6(1)(b) was more complex and the Court was equally divided as to its validity. That provision authorised a State Egg Board to “retain out of any moneys payable by the Board to any person an amount not exceeding the amount of any levy that the person is liable to pay.” Menzies J (Barwick CJ and McTiernan J concurring) considered this provision invalid for discriminating between States because it: expose[d] a person liable to pay an amount of levy in respect of hens kept in a State with which the Commonwealth has made an arrangement pursuant to s 5 … to a particular disadvantage at [104] law to which a person in respect of hens kept in a State which has made no arrangement with the Commonwealth … is not exposed (at 103–104).

Taylor J (Kitto and Windeyer JJ concurring), on the other hand, held s 6(1)(b) valid because, like s 6(1)(a), it “merely provide[d] for the manner in which a liability for the levy may be discharged” (at 102). For a discussion of this case, see D Rose, “Discrimination, Uniformity and Preference – Some Aspects of the Express Constitutional Provisions”, in Zines (1977), 191 at pp 207-208. [7.220] A different, but related, issue arose in Permanent Trustee Australia Ltd v

Commissioner of State Revenue (the Mirror Taxes Case) (2004) 220 CLR 388 which raised the question whether “discrimination” was a pre-condition for “preference”. The Commonwealth Places (Mirror Taxes) Act 1998 (Cth) (Mirror Taxes Act) was enacted in response to Allders International Pty Ltd v Commissioner of State Revenue (Vic) (1996) 186 CLR 630 which held that, by virtue of s 52(i) of the Constitution, State legislative power did not extend to applying a general State taxation law to a “Commonwealth place” in that State. The Mirror Taxes Act essentially applied State tax laws to Commonwealth places in the State. Section 6(2) provided: [7.220]

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Subject to this 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.

The phrase “excluded provisions” essentially meant provisions which were “inapplicable by reason only of the operation of s 52 of the Constitution in relation to Commonwealth places” (see ss 3, 6(1)). Since the rate of tax varied from State to State, it followed that the rate of tax in Commonwealth places correspondingly varied between States. The revenue raised pursuant to the Mirror Taxes Act was collected by the Commonwealth and paid into its Consolidated Revenue Fund from which it was disbursed (minus administration costs) to the State in which it had been collected. Consequently, the amounts per person received by the States varied proportionally to their rates of tax (for the figures, see Kirby J at [194]). By a majority of 5:2 the Court held that the Mirror Taxes Act did not contravene s 99 of the Constitution (nor any other provision). In a joint judgment (at 424–425), Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ regarded “discrimination” as a pre-condition for the existence of “preference”. The Mirror Taxes Act was held not to grant “preference” because it did not discriminate between States or parts of States on the substantive “discrimination” test of Austin v Commonwealth (2003) 215 CLR 185 at 247 [118] (quoted at the beginning of [7.210]): 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. (Emphasis added.)

Although Leeth v Commonwealth (1992) 174 CLR 455 (which was factually analogous to this case) was not mentioned, the majority’s reasoning resembled that of Deane and Toohey JJ in that case which dealt with “equality” (174 CLR at 488–489). McHugh J dissented. Unlike the majority, his Honour examined the earlier s 99 cases, concluding (at 433–434 [126]) that: “[a]fter almost a century of judicial interpretation, [s 99’s] meaning cannot be regarded as settled. Nevertheless, decisions and reasons of this Court directly support, and in other cases are consistent with, the view that the Mirror Taxes Act is invalid because it imposes different rates of stamp duty based on State locality.” McHugh J approved the reasoning of the majority in Barger, while noting that the Mirror Taxes Act would breach s 99 even on the dissenting view of Isaacs J in that case because the Mirror Taxes Case did not raise the question of whether localities were treated differently “simply because” they were located in different States (at [129], [155]). He likewise preferred the dissenting view of Dixon and Evatt JJ in Elliott to that of the majority in that case (at [155] and see also [143]). The core reasoning underlying McHugh J’s dissent was his rejection of the argument that the presence of “discrimination” was a pre-condition for the granting of “preference” (at 447): 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 (Elliott v Commonwealth (1936) 54 CLR 657 at 668 per Latham CJ, 683 per Dixon J). 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 612

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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. (Emphasis in original.)

Earlier McHugh J had remarked (at 434) that: [128] [Colonial Sugar Refining Co Ltd v Irving [1906] AC 360] laid down the rule, which has not been doubted since, that, as long as the legal rule contained in the law of the federal Parliament is uniformly applicable to persons irrespective of their State, it will not offend s 99 simply because the effect of applying the rule may differ from State to State, including by operation of State law.

Might it not be said that this is precisely what s 6(2) of the Mirror Taxes Act did – namely, prescribe the uniform rule in Commonwealth places that “the taxation laws of the State in which the place is located shall apply in that place”? Cf Leeth v Commonwealth (1992) 174 CLR 455 at 493 per Deane and Toohey JJ. Kirby J also dissented, concluding that the Mirror Taxes Act contravened s 99 for reasons similar to those of McHugh J: “discrimination” was not a pre-requisite for “preference” (at [214], [224] and [226]), and the motive for the Commonwealth Parliament’s differential treatment was irrelevant to the question whether the law granted “preference” (at [213]). Like McHugh J, Kirby J reached this conclusion regarding the Mirror Taxes Act’s application of State taxing laws (at [222] and [224]) but went further than McHugh J in holding that the Mirror Taxes Act’s appropriation provision (s 23(4)) was a “law … of … revenue” which contravened s 99 (at [192], [201], [206], [211], [225], [229], [233] and [235]). However, this interpretation of “revenue” in s 99 as extending beyond taxation Acts to appropriation Acts is contrary to long-established authority including Moran (1939) 61 CLR 735 at 758 per Latham CJ (Rich and McTiernan JJ concurring) (“There is no provision in the Constitution to the effect that appropriation Acts must not discriminate between States or that Federal expenditure in the several States must be equal in any sense”), 775 per Starke J (“grants of financial assistance to a State are unaffected by s 99”) (likewise at 771); Moran [1940] AC 838 at 857 (“s 96 does not prohibit discrimination”), 858 (the same); South Australia v Commonwealth (First Uniform Tax Case) (1942) 65 CLR 373 at 426–427 per Latham CJ (Rich J concurring), 441 per Starke J (“[s 96] does not prohibit discrimination or preference”), 451 per McTiernan J (“A law granting financial assistance is not a law … of revenue under s 99”). Kirby J did not refer to these cases and it is difficult to reconcile his interpretation of s 99 with his acknowledgement of the established law on s 96 of the Constitution: see [197], [213] and [233]. While recognising that s 99 does not mention the word “discrimination”, might it not be argued, in support of the Mirror Taxes majority’s interpretation of s 99, that the word “preference” imports similar notions of the relevance and proportionality of differential [7.220]

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treatment to the problem which the Commonwealth legislation addresses? If the two interpretations are equally open on the wording of s 99, might it not be appropriate to take account of public policy issues in choosing between them, and are there any reasonably objective public policy criteria that might be applied? On the other hand, is Kirby J correct in suggesting (at [226]) that ss 51(ii) and 99 “[secure] … different purposes”? What might these be? For an excellent discussion of these issues, see R French, The Prohibitions in Sections 51(ii) and 99 of the Commonwealth Constitution … (Ph D thesis, University of Melbourne, December 2004). Rebecca French’s thesis was largely completed before the Mirror Taxes Case Permanent Trustee Australia Ltd v Commissioner of State Revenue but, as she notes, the test she proposes for interpreting ss 51(ii) and 99 “is broadly consistent with the majority reasoning” in that case (p 3). Some of these issues were clarified in the most recent examination of ss 51(ii) and 99 by the High Court in Fortescue Metals Group v Commonwealth (2013) 250 CLR 548 and Queensland Nickel Pty Ltd v Commonwealth (2015) 318 ALR 182.

Fortescue Metals Group Pty Ltd v Commonwealth [7.230] Fortescue Metals Group v Commonwealth (2013) 250 CLR 548 [Proceedings were brought by Fortescue Metals Group Limited in the High Court’s original jurisdiction claiming that some provisions of the Minerals Resource Rent Tax Act 2012 (Cth) (MRRT Act) and the Minerals Resource Rent Tax (Imposition–Customs) Act 2012 (Cth), Minerals Resource Rent Tax (Imposition–Excise) Act 2012 (Cth) and Minerals Resource Rent Tax (Imposition–General) Act 2012 (Cth) (the Imposition Acts) were invalid because they breached the discrimination and preference prohibitions in ss 51(ii) and 99 respectively. The MRRT Act and the Imposition Acts created and imposed a minerals resource rent tax (MRRT), which commenced on 1 July 2012. Under the MRRT Act, liability to pay MRRT arises only when a miner derives an annual profit of $75 million or more after taking into account certain deductions for expenditure and allowances. Once MRRT is payable, it is calculated so that a reduction in the mining royalty payable to a State government would, all other things being equal, result in an equivalent increase in a taxpayer’s liability and vice versa. The State legislative regimes for mining royalties are different and may be varied from time to time. Fortescue’s wholly-owned subsidiaries held registered mining leases in Western Australia and were required to pay MRRT. The court unanimously upheld the provisions.] Hayne, Bell and Keane JJ (some footnotes omitted): 591 [70] Three textual points may then be made about the concluding words of s 51(ii). First, the reference to discriminating between “parts of States” suggests that the concluding words of s 51(ii) are to be read as directed against laws which discriminate between States, or parts of States, on the basis of geography or locality. “[P]arts of States” must be defined geographically. There is no textual foundation for reading the reference to “States”, as distinct from “parts of States”, in any different way. Secondly, the concluding words of s 51(ii) do not speak of a law that discriminates against States or parts of States. The expression used is “so as not to discriminate between States or parts of States” (emphasis added). Thirdly, it is necessary to recognise that the words “but so as not to discriminate” qualify a power to make laws with respect to taxation. … [71] The concluding words of s 51(ii) are a “positive prohibition or restriction” (179) on the legislative power. Quick and Garran said (at 550) of the limitation in s 51(ii) that: “This is a limitation which has been provided for federal reasons, viz, for the protection of States which might not possess sufficient strength in the Federal Parliament to resist the imposition of a system of taxation designed to press more heavily on people or property in some States than on people or property in other States.” … [73] The plaintiffs accepted that a federal income tax imposed at the rate of 45 per cent on iron ore companies throughout Australia would not discriminate within the meaning of of the Constitution, even though it might operate differently in different States. They accepted 592 that such a law would not discriminate between States by reason only of the circumstance that, because Western Australia has the largest deposits of iron ore, Western Australian iron ore companies would contribute the largest amount of tax. And it was common ground that a federal income tax imposed at different rates in different States (say 40 per cent in New South Wales, 45 per cent in Queensland and 50 per cent in 614

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Fortescue Metals Group Pty Ltd v Commonwealth cont. Western Australia) would discriminate between States, no matter what may be the reason for seeking to apply different rates of tax in the different States. There was no dispute that a law of this latter kind would contravene the constitutional limitation on power in s 51(ii) because it would impose different rates of tax based on the location of the subject of taxation in one State or another. … 594 [83] There are relatively few decisions about the meaning and application of the limiting words of s 51(ii). The effect of those decisions may be described generally as being that discrimination has been found only when the relevant Act provided for the application of different rules according to locality and has not been established by showing only that application of the Act’s provisions yields an assessment which would have been different if, by operating elsewhere, the taxpayer would have incurred different outgoings. … [Their Honours proceeded to examine these decisions and continued:] 604 [115] 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 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. It is not necessary, however, to decide in this matter whether s 51(ii) should be understood as embodying or proceeding from an assumption of the kind described. [116] 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, which 605 noted (247 [118]) 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.” (emphasis added). 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 (Vic) ((2004) 220 CLR 388 at 429[89]), 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. [117] 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. [118] To the extent to which the plaintiffs’ arguments depended upon the proposition that the federal legislative power to enact the MRRT legislation was restricted because State Parliaments had made legislative provision for mining royalties which differed from State to State, the arguments must be rejected. Those arguments run counter to fundamental constitutional considerations. [119] Central to the Australian federal system is “[t]he conception of independent governments existing in the one area and exercising 606 powers in different fields of action carefully [7.230]

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Fortescue Metals Group Pty Ltd v Commonwealth cont. defined by law” (R v Kirby; Ex parte Boilermakers’ Society of Australia (Boilermakers’ Case) (1956) 94 CLR 254 at 267-268). “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” (Melbourne Corporation (1947) 74 CLR 31 at 82-83). And s 109 gives supremacy to the valid exercise of the federal Parliament’s legislative powers. The plaintiffs’ arguments sought to invert that structure by asserting that the ambit of the Parliament’s power under s 51(ii) to make a law with respect to taxation depends upon whether and how States have legislated for the different, if closely related, subject of mineral royalties. The inversion was effected by asserting that the practical effect of the MRRT legislation is to discriminate between States. But the practical effect of the plaintiffs’ point was no more than that taxpayers pay different amounts of MRRT according to what outgoings each actually incurs and those outgoings differ in amount according to where the taxpayer has its mining operations. [120] Since Amalgamated Society of Engineers v Adelaide Steamship Co Ltd (Engineers’ Case) ((1920) 28 CLR 129), it has been securely established that the legitimate extent of the law-making power of the Commonwealth is not to be limited by first assuming the existence of State laws or law-making power, or by according precedence to State laws made in the exercise of State law-making power on those occasions when a State is the first to enter upon the legislative regulation of a particular activity. The plaintiffs’ arguments for invalidity cut directly across these basal principles. [121] The MRRT legislation does not discriminate between States. If the States had enacted no provision for royalties or if all States had chosen to exact royalties at identical rates, the plaintiffs’ argument of discrimination would evidently be without foundation. The possibility that a law of the federal Parliament might become invalid upon, and by reason of, one State changing its royalty rate would not be consistent with the observations of Griffith CJ in Colonial Sugar Refining ([1903] St R Qd 261 at 276-277), much less the decision in the Engineers’ Case. … 607 Section 99 [123] The plaintiffs accepted that, if the MRRT legislation did not discriminate between States, it was not a “law … of trade, commerce, or revenue” which gave “preference to one State or any part thereof over another State or any part thereof”. [After stating (at [124]) that, given the plaintiff’s concessions and the conclusions reached about s 51(ii) that this was not the case “to seek to disentangle the reasoning in all the disparate authorities”, their Honours continued:] [124] It is enough to repeat some points made ((2004) 220 CLR 388 at 423 [87]-[88]) by the plurality in Permanent Trustee by reference to Elliott v The Commonwealth. As Dixon J said (at 682) in Elliott, the critical phrase in s 99, “give preference … over”, expresses “a conception necessarily indefinite”. Much therefore depends upon the level of abstraction at which debate enters upon the issue. Secondly, and of most immediate relevance in this case, “[t]o give preference to one State over another State discrimination or differentiation is necessary” (at 683). But not every discrimination between States may amount to preference of one over another (at 683). [124] Because the MRRT legislation does not discriminate between States, there is no preference of one State over another. [Crennan J agreed and delivered similar reasons.] French CJ: 563[5] The limitations imposed by ss 51(ii) and 99, which are in issue in this case, operate at a level of generality appropriate to their federal purposes. They do not prevent the Parliament of the Commonwealth from enacting uniform laws which have different effects in different States because of differences in the circumstances to which they apply, including different State legislative regimes. Nor do they apply to a law with respect to taxation merely because it provides for adjustments to the liabilities it imposes according to liabilities which might from time to time be imposed by differing State laws. The generality of the non- discrimination and no-preference limitations permits differences between States in the application of the law, for which the law makes provision, if such provision is based upon a distinction which is appropriate and adapted to the attainment of a proper objective (Austin v The Commonwealth (2003) 215 CLR 185 at 247 [118]; Permanent Trustee Australia Ltd v Commissioner of State Revenue (Vic) (2004) 220 CLR 388 at 424 [89]). Such a provision neither discriminates nor gives a preference within the meaning of those terms in ss 51(ii) and 99. … 616

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Fortescue Metals Group Pty Ltd v Commonwealth cont. 584 [47] … [T]he 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. … 585 [49] As explained earlier in these reasons, the constraints imposed by 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. [50] The Commonwealth Places (Mirror Taxes) Act 1998 (Cth) (the Mirror Taxes Act) fell into the category just described, applying as it did the different tax laws of each State to Commonwealth places within that State. As this Court held in Permanent Trustee, s 51(ii) did not apply at all to the Act because it was a law made under s 52(i) ((2004) 220 CLR 388 at 421 [79], applying Allders International Pty Ltd v Commissioner of State Revenue (Vic) (1996) 186 CLR 630 at 662, 678-680). As a law of revenue, however, the Act did attract the no-preference limitation in s 99. On reasoning applicable to s 51(ii), the Court held that the Mirror Taxes Act did not give a preference to one State or any part thereof over another State or any part thereof. The majority said ((2004) 220 CLR 388 at 425 [91] per Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ.): “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.” The objective of the impugned provision in that case was 586 nondiscriminatory. 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. It follows for reasons given earlier that the question whether the MRRT Act gives a preference contrary to s 99 is also to be answered in the negative. Kiefel J: 630 [202] If a Commonwealth taxation law provides that the same measure is to apply to all persons or things subject to the tax, it would not generally be regarded as likely to discriminate in fact. Where a difference results from the operation of a taxation law, the question arises whether that difference is accounted for by the geographical situation of the subject of the tax. Importantly, for there to be the discrimination of which s 51(ii) speaks, the difference must be produced by the Commonwealth law itself and by reference to that geographical situation. There may not be discrimination where the difference results from the provisions of a State law. Section 51(ii) does not prohibit a taxation law from operating differentially in all respects. It does not require that a taxation law control the effect of other, external, factors which may be productive of a difference. … 635 [224] The MRRT Act provides generally for a royalty allowance, the calculation of which includes a credit for the whole amount incurred by a miner by way of mining royalties paid to a State. There is no standard of locality, of connection to a State, in the allowance made and in the deduction for which it provides. The standard is the fact and 636 amount of payment. Any difference in the amount of the deduction for mining royalties results not from the MRRT Act but from the State legislation. [225] Those who drafted the MRRT Act may be taken to have been aware that rates of mining royalties differ as between the States. The point, however, is not that there is some underlying assumption of difference on which the MRRT Act operates, as the plaintiffs and the State of Queensland suggest, but [7.230]

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Fortescue Metals Group Pty Ltd v Commonwealth cont. rather that the MRRT Act allows for whatever mining royalties are required to be paid under State legislation. It is not the Commonwealth Act that creates any inequality or difference, but State legislation. The Commonwealth is entitled to do what the States do and base its taxation measures on considerations of fairness, so long as it adheres to the constitutional injunction not to prefer States.

Queensland Nickel Pty Ltd v Commonwealth [7.240] Queensland Nickel Pty Ltd v Commonwealth (2015) 318 ALR 182. [The Clean Energy Act 2011 (Cth) imposed a tax on liable entities responsible for the emission of certain greenhouse gases (covered emissions) which were in excess of a specified threshold volume. Regulations promulgated pursuant to the Act, Div 48 of Pt 3 of Sch 1, created the jobs and competitiveness program (JCP). The JCP provided for the issue of “free units” to eligible persons. These units enable the person to set off these free units in reduction of the volume of its covered emissions for which that person was liable in tax. The plaintiff instituted proceedings in the High Court challenging the constitutional validity of these regulations on the basis that contravened s 99, the parties stating a special case for the opinion of the Full Court. The plaintiff argued that the JCP did not make any allowance for differences between producers in greenhouse gas emissions which were said to be due to differences between the States in which the producers respectively carried on production: The plaintiff, carried out the production of nickel at a refinery in Queensland. Its major competitors carried out the production of nickel in Western Australia. Due to differences in the kinds of ore processed, the production processes employed and the types of nickel products produced, the plaintiff’s refinery emitted more greenhouse gases per unit volume of nickel than its Western Australian competitors. The issue of free units under the JCP therefore effected a proportionately smaller reduction in the plaintiff’s overall tax liability than it did for the plaintiff’s competitors. The Court unanimously held that the Div 48 of the Regulations did not give a “preference” in the relevant sense and did not breach s 99 of the Constitution.] Nettle J (French CJ, Hayne, Kiefel, Bell, Gageler and Keane JJ agreeing): 190 Preference and discrimination: [52] For the purposes of s 99 of the Constitution, the Commonwealth does not give a “preference” by law or regulation to one state over another unless the law or regulation discriminates between those states (Elliott v Commonwealth (1936) 54 CLR 657 at 668 per Latham CJ, at CLR 683 per Dixon J; Fortescue Metals Group Ltd v Commonwealth (2013) 250 CLR 548; at [30] per French CJ, at [124] per Hayne, Bell and Keane JJ). [53] 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 (R v Barger (1908) 6 CLR 41 at 106 per Isaacs J, at 132 per Higgins J; Cameron v Deputy Federal Commissioner of Taxation (1923) 32 CLR 68 at 72 per Knox CJ, at 76 per Isaacs J, at 78-9 per Higgins J, at 79 per Rich J; James v Commonwealth (1928) 41 CLR 442 at 455-6 per Knox CJ and Powers J; Elliott at 688 per Evatt J; W R Moran Pty Ltd v Deputy Federal Commissioner of Taxation (NSW) (1940) 63 CLR 338 at 348 per Viscount Maugham at 857; Commissioner of Taxation v Clyne (1958) 100 CLR 246 at 272 per Webb J; but see Rose, “Discrimination, Uniformity and Preference – Some Aspects of the Express Constitutional Provisions”, in Zines (Ed), Commentaries on the Australian Constitution, 1977, at 191 p 195.) Later, it came to be accepted that, generally speaking, the practical effect of the law or regulation may also bear on the question (Ha v New South Wales (1997) 189 CLR 465 at 498 Brennan CJ, McHugh, Gummow and Kirby JJ; Fortescue at [117] per Hayne, Bell and Keane JJ, at [156] per Crennan J, at [202] per Kiefel J).None the less, 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. Thus, in Barger, Griffith CJ observed (at 69-70): “The fact that taxation may produce indirect consequences was fully recognized by the framers of the 618

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Queensland Nickel Pty Ltd v Commonwealth cont. Constitution. They recognized, moreover, that those consequences would 191 not, in the nature of things, be uniform throughout the vast area of the Commonwealth ….” [54] More recently, in Fortescue, French CJ summarised the position as follows (at [49]): “[T]he 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.” [55] To the same effect, the plurality observed that (at [117]): 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. [56] 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 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. Different circumstances in different states: [57] Counsel for the plaintiff contended that none of the previous authorities concerning the application of s 99 involved the validity of a Commonwealth taxation law which treats activities of necessity carried out differently in different parts of the Commonwealth as if they were the same activity. Thus, although the court in Fortescue dealt with the situation where a Commonwealth taxing Act produces different consequences in different states due to differences between states’ legislation, their Honours should be taken to have left open for consideration the kind of situation which arises where a Commonwealth law results in different consequences in different states due to differences between states in natural, business or other circumstances. Leastways, it was submitted, none of those authorities should be regarded as controlling, and any a priori rule which placed differential treatment of that kind beyond the reach of s 99 would so denude the section of practical operation that it should not be adopted. 192 [58] The difficulty with that contention, however, is that, even 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. … [62] Consequently, it appears that, in terms of geographic considerations, the plaintiff was in essentially the same position in making its decision to employ the Caron process as Murrin Murrin and First Quantum were in when making their decisions to employ acid leaching processes. Assuming that each entity’s decision was economically rational and otherwise soundly based, it would seem to follow that the differences between their individual selections of processing system were the consequence of considerations other than any differences between the ore bodies which each of them had in contemplation at the time of selection. … 193 [66] Moreover, and more importantly, even if there were any significant differences, they were the necessary consequence either of the differences between the inputs and production processes of each producer or, possibly, of discretionary decisions not necessarily dictated by either inputs or production processes. Since the differences between inputs and production processes are not shown to have been caused by differences between circumstances in different states, it cannot be inferred [7.240]

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Queensland Nickel Pty Ltd v Commonwealth cont. that the differences in outputs were caused by differences in circumstances between states.

[7.250]

1.

2.

Notes&Questions

Following the decisions in Fortescue and Queensland Nickel, which approach has prevailed: the substantive approach of Evatt and Dixon JJ, or the formal approach of Latham CJ? Despite indicating that the practical effect of the law had to be considered, is it still the case that in order to find “discrimination” or “preference” it remains necessary to discern a formal discrimination between States for s 51(ii) and a formal preference for s 99, ie discrimination between, or a preference to, the States “as States” or parts thereof? While the Court has now clearly confirmed the principle that a levy or charge may still be a tax even if its underlying purposes are other than raising revenue (providing incentives, disincentives or otherwise to regulate particular activities or conduct) to what extent did the reasoning clarify the uncertainties arising from ATM and Air Caledonie? The plurality appear to have had concerns about the position taken in ATM that an exaction could still be characterised as a tax if it was collected by a non-public authority: “a large and controversial step beyond what was said in Matthews” (at 110 [37]). They indicated that this may depend on the meaning of the term “non-public” authority in circumstances where “one of” the functions of the authority is to receive exactions to be expended on “public purposes”. Does this suggest an acceptance of the view that an otherwise private entity may be treated as “public authority” in order to meet the requirement of a “public authority” as envisaged in Matthews? The plurality did not regard it as necessary to answer that question.

Taxation: incidental power and inconsistency [7.260] The principal authority on this issue is the Second Uniform Tax Case extracted below

at [7.310]. See also Note 5 to that decision [7.320].

GRANTS Terms and conditions [7.270] Federal financial relations are one of the least satisfactory aspects of Australian

federalism. Two of the States’ principal sources of revenue – duties of customs and excise – were taken away from them and given exclusively to the Commonwealth by s 90 of the Constitution. Had the “Braddon Clause” (s 87) remained in the form in which it emerged from the 1898 Convention, the States would have been permanently guaranteed three-quarters of the customs and excise revenue raised by the Commonwealth. But the Melbourne Premiers’ Conference of January 1899, essentially called to consider changes to the draft Constitution to enable it to secure the approval of the New South Wales electors, effectively confined the operation of s 87 to the first decade after Federation. Section 96, somewhat illogically prefaced with the same potential temporal limitation, was then introduced probably as “a concession to the delegates from the smaller States, primarily Tasmania, as a quid pro quo for the concession made to New South Wales in the limitation of the Braddon clause”: C Saunders, “The Hardest Nut to Crack: The Financial Settlement in the Commonwealth Constitution”, in G Craven (1986), 149 at p 171. (For the background to the adoption of s 96, see Saunders, pp 169-172.) 620

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The Braddon clause was terminated by the Surplus Revenue Act 1910 (Cth), s 3, and the States have essentially been financially dependent on the Commonwealth ever since. The means by which this dependence has been fostered and nurtured is s 96 of the Constitution, which provides: 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 Commonwealth has provided various forms of financial assistance to the States. Both levels of government have levied several forms of taxation, and in the years before 1942 both levied income tax. The Commonwealth’s income tax was imposed uniformly throughout the Commonwealth (as required by the Constitution, s 51(ii)), but the State levels varied considerably, both in level and incidence, resulting in considerable disparity in the overall burden of income tax as between the residents of different States. This unsatisfactory position became intolerable with the advent of war, especially the Pacific War (1941–1945), which required an increase in the level of Commonwealth taxation. Various attempts at Commonwealth-State agreement on a uniform tax scheme to be administered by the Commonwealth for the duration of the war having failed, the Curtin Labor government finally introduced a unilateral Commonwealth uniform tax scheme on 1 July 1942. The background to this scheme is explained well by Mathews and Jay.

Intergovernmental Financial Relations in Australia [7.280] R L Mathews and W R C Jay, Federal Finance: Intergovernmental Financial Relations in Australia Since Federation (1972), pp 171-173 171 The most important developments in the area of taxation during World War II were the exclusion of the States from the collection of income tax (with compensation to the States for the amount forgone) and very substantial increases in rates, at first to provide finance for the war but also, in the later stages of the war, to provide finance for social welfare payments. In … the last [year] before uniform tax, income taxes constituted 44% of total Commonwealth taxation compared with 16% in 1938–39. Large as these increases were, the existence of State income taxes severely restricted the Commonwealth’s ability to collect as much as it needed on an equitable basis. Definitions of taxable income varied from State to State and so did rates of tax and degrees of progression. The overall burden of income tax also varied. … 172 Australia rates fell much more heavily on lower income groups than they did elsewhere. All this diversity meant that, if the Commonwealth increased its income taxes to the level needed for war finance, they would bear heavily on most taxpayers in Queensland, New South Wales and Western Australia. In addition, lower-income groups in South Australia and upper-income groups in Queensland would be very severely taxed relative to their opposite numbers in other States. If the Commonwealth geared its rates to those of the higher taxed States, in the interest of equity to taxpayers in those States, there would be a substantial amount of unused taxable capacity in the other States which needed to be tapped for the war effort. The obvious way out of these difficulties was to impose a uniform system of income tax in all States. The most practicable way of achieving this was for the Commonwealth to become the sole collector, and pay over part of the proceeds to the States. This would obviate delays in obtaining agreement between the States as to definitions of the tax base and schedules of rates. At a Premiers’ Conference in June 1941, the Commonwealth Treasurer (A W Fadden) proposed that the States vacate the field of income tax for one or two years, in return for an annual compensation of $48 million to be divided on a population basis and an additional $10 million to be allocated by agreement among the States. The total amount was $6 million less than total State collections of income tax in the previous year and the high-tax States in particular stood to lose. The States rejected the proposal without hesitation. Although the needs of the Commonwealth were manifest, the States had been the senior partners in the income tax field during the preceding twenty years and all of them except Western Australia had [7.280]

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Intergovernmental Financial Relations in Australia cont. administered income tax collections on behalf of themselves and the Commonwealth. Moreover, it was the only important taxation field at their disposal. The war was still being fought at a distance. 173 Fadden made a second attempt to tackle the problem in his budget of September 1941, when he made an ingenious proposal for post-war credits. … Fadden’s budget was defeated in Parliament and the Labor Party came into office. The new Prime Minister (John Curtin) appointed a Special Committee on Uniform Taxation to consider the questions of uniform Commonwealth income taxes and grants to the States by way of compensation. In its Report, submitted on 28 March 1942, the … Committee advised that the constitutional difficulties of imposing uniform tax could be overcome, and recommended that the Commonwealth should become the sole authority imposing income taxes and that compensation to each State should be based on the average amount collected by the State over the two years 1939–40 and 1940–41. … The Commonwealth Government accepted the substance of these recommendations but they were unanimously rejected by the States. However, in May 1942 the Commonwealth introduced legislation to give effect to the recommendations and a scheme of uniform income tax came into operation on 1 July 1942. ... The Uniform Tax scheme comprised four Acts: • The Income Tax Act 1942 (Cth), which imposed a progressive income tax uniformly throughout Australia at a rate slightly higher than the combined former Commonwealth and State income tax rates. • The Income Tax Assessment Act 1942 (Cth), which effectively required Commonwealth income tax to be paid in priority to State income tax (s 31). • The States Grants (Income Tax Reimbursement) Act 1942 (Cth), which essentially provided for financial grants to the States (of amounts roughly equivalent to their former income tax revenues) on condition that the State “has not imposed a tax upon incomes” (s 4). • The Income Tax (War-Time Arrangements) Act 1942 (Cth), which provided for the compulsory transfer to the Commonwealth of the staff, offices, equipment and records of State income tax departments. The latter three provisions were enacted as temporary measures, to expire at the end of the first financial year after the war (in the event, 30 June 1947). The legislation was immediately challenged in the High Court (indeed prior to the commencement of the States Grants (Income Tax Reimbursement) Act 1942 on 1 July) by South Australia, Victoria, Queensland and Western Australia. (The latter two States had Labor governments.) However, the High Court (from which Dixon J was absent, serving as Australian Minister in Washington) held all four Acts valid on 23 July.

The First Uniform Tax Case [7.290] South Australia v Commonwealth (1942) 65 CLR 373 at 409–429, 442–444 (the First Uniform Tax Case) Latham CJ: 409 It has been argued that the Acts now in question discriminate, in breach of s 51(ii) of the Constitution, between States. … But the Court is not authorized 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. … 411 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 Attorney-General 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 622

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The First Uniform Tax Case cont. 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 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. It is not necessary, however, in the present case to examine these questions. The Tax Act imposes a tax at rates such that there is left little practical room for State income tax. The Grants Act shows the intention of the Commonwealth Parliament that the Parliaments of the States should cease to tax income. The War-time Arrangements Act shows the intention of the Commonwealth Parliament that the Commonwealth should take over the officers and the physical means which are necessary for administering any system of State taxation upon income. As soon as a State which refused to abandon income tax formed a department to collect the tax the Commonwealth could take it over. Section 31 of the Income Tax Assessment Act 1936 is manifestly designed to make sure that the Government collects Commonwealth income tax, whatever may happen to any claim of a State for income tax, but it is independent of the general “scheme” of excluding the States altogether from the income-tax field. The intention to get rid of State income tax and of State income tax departments is clear in the case of the three first-mentioned Acts, and if such an intention is fatal to the validity of Commonwealth legislation it is not necessary to allege or prove any “scheme”. Accordingly, in the present case full weight can be given to the plaintiffs’ case without any reference to any “scheme”. The defendants do not seek to conceal the scheme: they assert it and justify it. … 412 … The legislation which is attacked is not colourable – it admits its character upon its face. The Tax Act. – The Income Tax Act 1942 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. … 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. But it is said that if the object of the Tax Act is to accomplish indirectly what the Commonwealth Parliament cannot do directly, the Act is invalid. The object is not only to collect revenue and to make grants to the States, but to prevent the States imposing taxation upon incomes. This, as has been said, appears to be obvious enough. But the validity of legislation is not to be determined by the motives or the “ultimate end” of a statute. In R v Barger (1908) 6 CLR 41 there was an acute difference of opinion as to the true nature of the legislation there in question. But all the justices agreed that, when a legislative power was granted, neither the indirect effect of its exercise nor the motive or object of the legislature in exercising it were relevant to the question of the validity of its exercise in a particular case: See Barger’s Case (majority judgment at 66, 67; per Isaacs J at 89, 90; per Higgins J at 118; Radio Corporation Pty Ltd v Commonwealth (1938) 59 CLR 170 at 179, 180, 185. 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 Act is merely and simply an Act imposing taxation upon incomes. The Commonwealth power to legislate is subject to certain limitations … [s 51(ii)), s 55 requirements, and see ss 92, 99, 114 and 117] 413 It is clear that the Tax Act does not infringe any of these provisions. … 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. … The Commonwealth will raise by the Tax Act an amount approximately equivalent to that which would be raised by Commonwealth and State income-tax legislation as formerly operative. The Commonwealth proposes, under the Grants Act, to reimburse the States for lost income tax by paying to them the sums set out in the schedule to the Act, amounting to £33,489,000. Upon the basis of these facts it is argued for the plaintiffs that the Tax Act really raises money for State purposes and not for Commonwealth purposes – to which the power conferred by [7.290]

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The First Uniform Tax Case cont. s 51(ii) of the Constitution is limited: See Sydney Municipal Council v Commonwealth (1904) 1 CLR 208 at 232. But the reply to the plaintiffs’ argument is that the Constitution plainly permits the Commonwealth to raise money in order to pay it over to or for the States: See ss 87, 89, 93, 94, 96, 105, 105A. Payment of money to the States is clearly a possible and proper Commonwealth purpose. Another argument for the plaintiffs is that the Commonwealth Parliament by its Tax Act excludes the States from necessary sources of revenue, and so itself creates the need for assistance which it then purports to relieve by financial grants. It is urged that such grants do not fall within s 96 of the Constitution. But the need for financial assistance to States not infrequently results from Commonwealth policy as expressed in Commonwealth laws (Deputy Federal Commissioner of Taxation (NSW) v W R Moran Pty Ltd (1939) 61 CLR 735 at 763, 764; same case on appeal ((1940) AC 838; 63 CLR 338 at 856, 857 (AC), 347, 348 (CLR)). Thus the mere fact that a Commonwealth law creates a “need” in a State does not prevent the Commonwealth Parliament from relieving the need by granting financial assistance to a State under s 96. … 415 The Grants Act. – It is now necessary to deal with the far-reaching 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. … 416 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 – but no decision upon that provision is called for in the present case. The grant becomes payable if the Treasurer is satisfied that a State has not in fact imposed a tax upon incomes in any particular year during the operation of the Acts. 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. Notwithstanding the Grants Act a State Parliament could at any time impose an income tax. The State would then not benefit by a grant under the Act, but there is nothing in the Grants Act which could make the State income-tax legislation invalid. 417 The Grants Act offers an inducement to the State Parliaments not to exercise a power the continued existence of which is recognized – 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. For example, the Commonwealth might wish to exercise the powers given by the Constitution, s 51(xiii) and (xiv) to legislate with respect to banking, other than State banking, and insurance, other than State insurance. The Commonwealth might wish to set up some Federal system of banking or insurance without any State competition. If the States were deriving revenue from State banking or State insurance, they might be prepared to retire from such activities upon receiving what they regarded as adequate compensation. The Commonwealth could properly, under Commonwealth legislation, make grants to the States upon condition of them so retiring. The States could not abdicate their powers by binding themselves not to re-enter the vacated field, but if the Commonwealth, aware of this possibility, was prepared to pay money to a State which in fact gave up its system of State banking or insurance, there could be no objection on this ground to the validity of the Commonwealth law which authorized the payment. But the position is radically different, it is urged, if the so-called inducement practically amounts to coercion. Admittedly the Commonwealth Parliament could not pass a law compelling a State to surrender the power to tax incomes or prohibiting the exercise of that power by a State. Equally, it is 624

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The First Uniform Tax Case cont. said, the Commonwealth cannot lawfully make an offer of money to a State which, under the conditions which actually exist, the State cannot, on political or economic grounds, really refuse. 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. A person whose hand is physically propelled by another person against his will so that it strikes a blow is not guilty of assault. But it would be no defence to allege that he really could not help striking the blow because he was offered £1,000 for doing it. … 418 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 419 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. …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 420 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. … 424 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 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 425 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; Attorney-General for Queensland v Attorney-General (Cth) (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, at pp 776 et seq). This principle should be remembered when it is said that a Parliament of limited powers cannot do indirectly what it cannot do directly. This proposition is of value when (as has not infrequently happened in Canada) it is contended that an Act is colourable in character in that, under the guise or pretence of doing something permitted, it is in reality doing something prohibited or beyond power. … [7.290]

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The First Uniform Tax Case cont. 426 When a power is defined by reference to purpose, other considerations arise (Deputy Federal Commissioner of Taxation (NSW) v W R Moran Pty Ltd (1939) 61 CLR 735 at 759, 760). So also if there were a prohibition against attaining a result by any method whatever. If, for example, the Commonwealth Constitution contained a provision that no Commonwealth law should by any means bring about the result of a discrimination between States, the indirect consequential effects of the law would have to be examined. But the Constitution contains no such provision. For example, taxation laws may not discriminate between States (s 51(ii)); laws of trade, commerce or revenue may not give preference to a State (s 99). These provisions affect only laws of the stated character. Thus there may be discrimination between States and preferences to States under s 96 – grants to States – because that section is not subject to any limitation with respect to discrimination 427 (Deputy Federal Commissioner of Taxation (NSW) v W R Moran Pty Ltd (1939) 61 CLR 735; (1940) AC 838; 63 CLR 338 at 762 et seq (CLR), 857, 858 (AC), 348, 349 (CLR)). 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 authorized by s 51(ii) of the Constitution. The Grants Act authorizes 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. Discrimination … Plainly under [s 96] financial assistance could be given to a single State only. Thus variation in amounts given to different States is permissible. The section contains no express or implied prohibition against any kind of discrimination: See references to Moran’s Case (1939) 61 CLR 735; (1940) AC 838; 63 CLR 338 at 762 et seq (CLR), 857, 858 (AC), 348, 349 (CLR). Thus it is no objection to the Grants Act that States which abandon income tax are given a grant while those who retain income tax get nothing. So also the indirect effect of varying grants upon the fortunes of taxpayers of different States is an irrelevant circumstance. The Tax Act itself is a general Act, applying to all persons in all States without discrimination. The States, not the taxpayers, receive varying amounts under the Grants Act. As taxpayers in some States will this year pay more in Commonwealth income tax than they did last year in both Commonwealth and State income tax, and taxpayers in other States will pay less than last year, it is said that the Tax Act, read with the Grants Act, discriminates between States. But a comparison of this year with last year or any past year is not to the point. If the Commonwealth had not enacted the challenged Acts, no-one can say what the Commonwealth or State rates of tax would have been this year. … 429 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 626

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The First Uniform Tax Case cont. 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. [The Tax Act and the Assessment Act were held valid unanimously. McTiernan J held s 31 of the latter Act valid under the defence power, s 51(vi), finding it unnecessary to determine its validity under s 51(ii) and (xxxix). The War-time Arrangements Act was held valid under s 51(vi) by a majority of 3:2 (Rich, McTiernan and Williams JJ, Latham CJ and Starke J dissenting). The Grants Act was held valid under s 96 (McTiernan J considering it also possibly valid under s 51(vi)), with only Starke J dissenting.] Starke J remarked, regarding the Grants Act: 442 The government of Australia is a dual system based upon a separation of organs and of powers. The maintenance of the States and their powers is as much the object of the Constitution as the maintenance of the Commonwealth and its powers. Therefore it is beyond the power of either to abolish or destroy the other. 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 … The question in this case comes back to this: What is the object and operation of the States Grants Act? It purports in sec 4 to grant financial assistance to the States, but is it linked up with an object that is beyond the powers of the Commonwealth, namely, to control the exercise by the States of their powers to impose taxes upon income? … 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 sec 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 1942 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. And it does not meet the substance of the States’ position that the condition of the Act relates to a matter in respect of which the Commonwealth has no constitutional power whatever, and yet by force of the condition and not as a consequence of the exercise of any power conferred upon the Commonwealth, the grant of assistance to the States is withdrawn unless they comply with its terms. 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 65). A legitimate use of the powers contained in s 96 may be found in the Road Grants Case (Victoria v Commonwealth (1926) 38 CLR 399), where the Commonwealth and the State of Victoria entered into an agreement, the object of which was to aid the State in the construction and reconstruction of certain roads. Incidentally the making of roads would be an aid to trade and commerce, and possibly also to defence: See Federal Aid Roads Act 1926 (No 46 of 1926). No doubt means can be found to give the States financial assistance without crippling them in the exercise of their powers of selfgovernment 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, 444 which in substance is the same thing, not imposing taxes upon income. In my opinion, it follows that the States Grants (Income Tax Reimbursement) Act 1942 is

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The First Uniform Tax Case cont. not within the power or authority of the Commonwealth Parliament.

[7.300]

1.

Notes&Questions

Geoffrey Sawer has remarked that: In retrospect, the most important component of the 1942 scheme was the physical seizure of State departments, with the implied threat that any newly-created State department would also be seized. This made it impossible for the States to attempt any resumption of their own taxes while the war lasted, and by 1946 the system had such social momentum that it became increasingly difficult to reverse the process. (G Sawer, Cases on the Constitution of the Commonwealth of Australia (3rd ed, 1964), p 109).

However, from the perspective of constitutional law, the essential measures would seem to have been the Tax Act and the Assessment Act see Bailey, The Uniform Income Tax Plan (1942) (1944), p 183. As Latham CJ recognised, the Grants Act’s condition that the States not levy income tax need not have been expressed on the face of the Act (South Australia v Commonwealth (1942) 65 CLR 373 at 429), and had the States’ income tax staff, offices and records not been acquired, the Commonwealth would surely have suffered inconvenience at worst. After all, if Commonwealth income tax were levied at very high rates and given priority over State income tax, a State income tax would simply have been practically unfeasible, in which case the States would have had no need for their own income tax departments. In other words, the success of the uniform tax scheme hardly depended upon whether or not the States retained their own income tax departments, but rather the converse 2.

Gavin Souter remarked of the Uniform Tax scheme that: “Only in such a grave emergency as that of mid-1942 – with flames over the Coral Sea and Midway, and enemy submarines in Sydney Harbour – could the Commonwealth have done such a thing and been upheld by the High Court.” (G Souter, Acts of Parliament (Melbourne University Press, Melbourne, 1988), p 350) Is this correct? How significant were defence considerations (apart from specific reliance on s 51(vi)) in the High Court’s decision?

3.

Although enacted as a temporary wartime measure at a critical stage of the War, even at the time of enactment some realised that the scheme would probably become permanent, and that federal financial supremacy would become entrenched. As Sir Paul Hasluck later noted: What seems to have been imperfectly appreciated by many members [of Parliament] was that this was not just a question of constitutional validity to be argued by lawyers but one of making what might prove to be a permanent change in the relationships of the Commonwealth and States. Several of those who did suspect that this might be so took comfort in an assurance that these were temporary wartime measures. A few others, including Calwell, who foresaw the change clearly, hoped that it would take place. Calwell said he hoped that the States would challenge the legislation in the High Court because if the case went against them a precedent would be established. He was so sure of the outcome that he advocated the creation of a numerically larger Commonwealth Parliament to handle increased national responsibilities. The States, he predicted, having lost their right to impose income tax would become “mendicants existing upon the bounty of the Commonwealth … and for practical purposes will cease

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to exist as States” (Commonwealth Parliamentary Debates 1698-1707). (P Hasluck, The Government and the People 1942–1945 (Australia War Memorial, Canberra, 1970), p 320)

One of the first to realise the significance of the First Uniform Tax Case was Professor Kenneth Bailey, soon to become Commonwealth Solicitor-General. Speaking exactly three months after the decision, he noted that s 96 “is to-day one of the most vital elements in the Constitution” (p 185), and remarked that: “A Constitution that contains a s 96 contains within itself the mechanism of Commonwealth supremacy.” Overall, Bailey evaluated the significance of the First Uniform Tax Case as follows: I would regard it as being, on a long-term view, probably the most far-reaching judgment ever handed down by the High Court. For it brings the essential taxing functions of the States under potential Commonwealth control. From the outset of the Commonwealth’s history, keen observers have noted that the financial provisions of the Constitution left the States in a position of great weakness vis á vis the Commonwealth. … I think myself, however, that the logic of the Uniform Tax Plan is that the States should eventually move, with a simplified political structure, into the position primarily of administrative agencies, the main lines of policy in all major matters being nationally determined. When the lessons of war government come to be reviewed, I feel confident that we shall ultimately be convinced of the wisdom of national control of economic and social policy generally. But I think we shall also be convinced of the importance of a reasonably decentralized administration. So thinking, I regard the Uniform Tax Plan as marking a definite stage in the movement towards constitutional reconstruction. (Bailey, The Uniform Income Tax Plan (1942) (1944), pp 187-188. Emphasis added.)

Has Australian federalism evolved as Bailey envisaged? 4.

The Commonwealth continued the Uniform Tax Scheme after the War, although the War-time Arrangements Act was repealed a year before its expiry date. However, the formula for calculating the income tax re-imbursement grants was varied in 1946 in order not to continue the penalisation of Victoria, South Australia and Tasmania, which had levied income tax at relatively low rates before the War: see Mathews and Jay Federal Finance: Intergovernmental Financial Relations in Australia Since Federation (1972), pp 210-211. The Menzies Government, elected in December 1949, appeared willing to consider terminating the Uniform Tax scheme, although it has been suggested that this offer was made “tongue in cheek”: W G McMinn, Nationalism and Federalism in Australia (1994), p 265. However, the financially weaker States preferred to retain the scheme rather than levy their own income tax, which would have required taxation at higher rates than those levied by New South Wales and Victoria (see Mathews and Jay, pp 214-215). Their position was wittily parodied in the following ditty attributed to Sir Robert Garran: “We thank you for the offer of the cow/, But we can’t milk, and so we answer now/, We answer in a loud resounding chorus/, Please keep the cow and do the milking for us.” (G Sawer, Cooperative Federalism and Responsible Government in Australia (Fourth Alfred Deakin Lecture, 16 September 1970), p 2) New South Wales and Victoria accordingly decided that their best recourse for terminating the scheme was to challenge its constitutionality. Their attack on the legislation, much more sharply focused than the States’ arguments in the First Uniform Tax Case, was partially successful. However, as Dixon CJ predicted (Victoria v Commonwealth 99 CLR at 621), their victory was essentially pyrrhic. [7.300]

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The Second Uniform Tax Case [7.310] Victoria v Commonwealth (1957) 99 CLR 575 at 598-621 (the Second Uniform Tax Case) Dixon CJ: 598 … The system was introduced at what perhaps may for this country be regarded as the crisis of the war. It was done by four Acts of 599 Parliament that were assented to on 7th June 1942, the day after the battle of Midway Island ended. … 601 The whole plan of uniform taxation has thus become very much a recognised part of the Australian fiscal system. How far it really rests on the validity of the condition which forms an integral part of the Tax Reimbursement Acts and of s 221(1)(a) of the Income Tax and Social Services Contribution Assessment Act 1936 is, I think, open to question. But on the footing that it does so, the Court is now invited to depart from the decision in South Australia v Commonwealth (1942) 65 CLR 373, either by treating it as wrongly decided or by distinguishing it as a decision resting in an essential degree on the scope of the defence power in time of war. Having regard to the lapse of time in which no State has taken proceedings seeking judicial relief against the statutes, to overrule the decision or even so to distinguish it must involve a grave judicial responsibility. In the present proceedings the argument for the States … was more restricted. Then all four enactments assented to on 7th June 1942 were impugned as together forming a legislative scheme or plan of an unconstitutional character. The “Arrangements” Act has of course done its work and is spent. Of the three remaining statutory elements necessary to the “plan” or “scheme” upon which the argument in the earlier case based the attack, it was recognised that the validity of the Taxing Act must be conceded. There are two such Acts at present, the Income Tax and Social Services Contribution Acts 1956 (Nos 28 and 102). On its face such a measure is simply a taxing Act every word of which is within the power to make laws with respect to taxation. All that could be said is that the rates of tax are doubtless higher than they would have been if there were no “tax reimbursement” to the States. Each of the two provisions left, that is to say, s 221 of the Assessment Act and the Tax Reimbursement Act 1946–1948, is made the subject of a separate attack, on the ground that it lies outside the legislative power to which it has been referred and moreover attempts an unconstitutional interference with the States. The constitutional power to which s 221 is referred is of course that given by s 51(ii) of the Constitution with perhaps s 51(xxxix) operating in aid, and that to which the Tax Reimbursement Act 1946–1948 provisions are referred is the power contained in s 96 of the Constitution. 602 But while the ground for impugning validity in the case of each enactment is confined to a separate argument of ultra vires and is not based on the disclosure of an unconstitutional plan or scheme by the enactments considered in combination, reliance is placed on the planned interconnexion of the provisions as giving each a purpose which may be material in considering whether it is a true exercise of the legislative power upon which its validity depends. … 604 One may guess that s 96 was regarded as connected with the Braddon clause, s 87, and that the purpose of the opening words was to enable the Parliament to terminate the operation of both together. See Quick and Garran: The Annotated Constitution of the Australian Commonwealth (1901) pp 869, 870, and per Evatt J, in Deputy Federal Commissioner of Taxation (NSW) v W R Moran Pty Ltd (1939) 61 CLR 735 at 803. … In the cases in this Court in which s 96 has been considered, except 605 in the passage to which a reference has already been made in the judgment of Evatt J in Moran’s Case (at 803), it seems to have been taken for granted that the scope and purpose of the power conferred by s 96 was to be ascertained on the footing that it was not transitional but stood with the permanent provisions of the Constitution. On this basis it is apparent that the power to grant financial assistance to any State upon such terms and conditions as the Parliament thinks fit is susceptible of a very wide construction in which few if any restrictions can be implied. For the restrictions could only be implied from some conception of the purpose for which the particular power was conferred upon the Parliament or from some general constitutional limitations upon the powers of the Parliament which otherwise an exercise of the power given by s 96 might transcend. In the case of what may briefly be described as coercive powers it may not be difficult to perceive that limitations of such a kind must be intended. But in s 96 there is nothing coercive. It is but a power to make grants of money and to impose conditions on the grant, there being no power of course to compel acceptance of the grant and with it the accompanying term or condition. 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 630

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The Second Uniform Tax Case cont. 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 606 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 funds. Road-making 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”. … [His Honour discussed Moran and continued:] 607 The decision [Moran] 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 … [Dixon CJ discussed the First Uniform Tax Case:] 608 The judgments of the members of the Court forming the majority place positive reliance upon the decisions [in Federal Aid Roads and Moran] 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. … 609 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 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 [7.310]

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The Second Uniform Tax Case cont. 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 610 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 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?” 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 611 of the Court with respect to the Tax Reimbursement Act 1946–1948 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 632

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The Second Uniform Tax Case cont. 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 1946–1948 are invalid. I therefore think that the validity of that Act must be upheld. … [Dixon CJ then turned to consider the validity of the Income Tax and Social Services Contribution Assessment Act 1936–1956 (Cth), s 221(1)(a) which he described as “a direct prohibition laid on the taxpayer making it an offence on his part to pay State income tax unless he has first satisfied his liability for federal income tax” (at 612). Dixon CJ continued:] 613 The power by which it has been supported is that given by s 51(ii) to make laws with respect to taxation carrying with it, as the power does, everything incidental to the main purpose of the power. Inevitably there is added the power conferred by s 51(xxxix) with respect to matters 614 incidental to the execution of any power vested and so on. It is unnecessary for the present purpose to distinguish between the incidental power contained in the grant of the main power and that derived from s 51(xxxix): cf Le Mesurier v Connor (1929) 42 CLR 481 at 497. The first observation to make is that the power to make laws with respect to taxation has never been, and, consistently with the federal character of the Constitution could not be, construed as a power over the whole subject of taxation throughout Australia, whatever parliament or other authority imposed taxation. “The taxation referred to is federal taxation for federal purposes” per Griffith CJ in Municipal Council of Sydney v Commonwealth (1904) 1 CLR 208 at 232. See W Harrison Moore – The Constitution of the Commonwealth of Australia (2nd ed, 1910), pp 510, 511 – who remarks (p 511): “The State power of taxation for its own purposes is something quite distinct which does not legally (though of course it may economically) compete with the Commonwealth power, they are what have been called ‘concurrent and independent powers’.” Clearly enough s 221(1)(a) can find no justification unless it be as something incidental to the main power. But when you are considering what is incidental to a power not only must you take into account the nature and subject of the power but you must pay regard to the context in which you find the power. Here we are dealing with powers of taxation in a federal system of government. Further, you must look at the purpose disclosed by the law said to be incidental to the main power. Here the purpose is to make it more difficult for the States to impose an income tax. No doubt s 221(1)(a) stands or falls as a separate legislative provision but it would be absurd to ignore the place the section takes in the plan for uniform taxation and examine it as if it were appurtenant to nothing and possessed no context. To support s 221(1)(a) it must be said to be incidental to the federal power of taxation to forbid the subjects of a State to pay the tax imposed by the State until that imposed upon them by the Commonwealth is paid and, moreover, to do that as a measure assisting to exclude the States from the same field of taxation. This appears to me to go beyond any true conception of what is incidental to a legislative power and, under colour of recourse to the incidents of a power expressly granted, to attempt to advance or extend the substantive power actually granted to the Commonwealth until it reaches into the exercise of the constitutional powers of the States. Section 221(1) opens with the words “for the better securing to the Commonwealth of the revenue required for the purposes of 615 the Commonwealth”. This recital may be read as a statement of the kind of purpose seen in par (b) but both the nature and history of par (a) make it clear that it refers really to the occupation of the field of income tax to the exclusion of the States. Recitals do not suffice to bring statutes within legislative power, but if the rationale of s 221(1)(a) were merely to insure that federal taxes were paid, it might be asked why should a debt for State income tax be picked out as the indebtedness the discharge of which would lessen the taxpayer’s ability to pay. Why should not other debts be postponed too? The resources of a taxpayer are as certainly diminished by making any other payment of like amount, whether it be to a mortgagee, to a vendor, a landlord or anybody else. But is it not sufficiently obvious that the incidental power cannot extend to authorising laws postponing the payment of civil debts until all or some particular indebtedness to the Commonwealth is discharged? Would it not strike the mind as absurd if the incidental power arising from s 51(v) and (xxxix) were treated as authorising a law forbidding a subscriber to the telephone services to pay debts or some particular debt whether to the State or to other persons until he had paid his telephone account? Another analogy would be a law as under s 51(xiii) and (xxxix) postponing the payment of the indebtedness of a person happening to be a customer of the Commonwealth Bank until he had [7.310]

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The Second Uniform Tax Case cont. cleared off or reduced his overdraft, indebtedness for example to another bank or to take another example, to the State, or again to all or any class of his creditors. Yet, if s 221(1)(a) is to be held valid on the ground that to insure, so far as may be, the payment of taxes is incidental to the power conferred by s 51(ii) and the paragraph contains no more than what may be properly directed to that end, then it would follow that these are examples of what may validly be enacted. For the reasons I have given I would, if it were not for the authority of South Australia v Commonwealth (1942) 65 CLR 373, have held a clear opinion that s 221(1)(a) is ultra vires. It is, however, one thing to hold a clear opinion opposed to a decision of this Court and another thing to decline to follow the decision. After full consideration, however, I have come to the conclusion that upon the question of the validity of para (a) of s 221(1) I should take the exceptional course of not following the decision. … 621 I think that para (a) of s 221(1) of the Income Tax and Social Services Contribution Assessment Act 1936 should be declared invalid. Whether such a declaration is of practical importance in relation to the system of uniform taxation is a matter about which I may be permitted to remain sceptical, but it is part of the relief for which the plaintiffs have asked. [The other justices likewise held the Grants Act valid. Kitto J concurred generally in Dixon CJ’s judgment, and Taylor J concurred with his remarks regarding the relevance to the present case of Victoria v Commonwealth (the Federal Aid Roads Case) (1926) 38 CLR 399 and Moran (at 659). McTiernan, Kitto and Taylor JJ joined Dixon CJ in holding s 221(1)(a) invalid, but Williams, Webb and Fullagar JJ dissented on this issue. Fullagar J (Williams J concurring) remarked [at 658]: “I think that the Commonwealth, though it cannot prohibit the States from exercising their taxing powers, must have power, by virtue of its own taxing power, to take all necessary steps to ensure the collection of its own taxes, and to that end to give priority to the obligation to pay its own taxes over the obligation to pay State taxes.”]

Notes&Questions

[7.320]

1.

In the Second Uniform Tax, Webb J (at 642–643) took the non-coercive nature of s 96 further than any other Justice, holding that the “terms and conditions” imposed by the Commonwealth “must not be such as would make the grant the subject of a binding agreement and not leave it the voluntary arrangement that s 96 contemplates”. No such agreement arose here and the other justices did not consider this issue. Williams J (at 630) remarked that: “Nothing could be wider than the words ‘on such terms and conditions as the Parliament thinks fit and they must include at the very least any terms or conditions with which a State may lawfully comply.’” (Emphasis added.) Fullagar J (Williams J concurring) made a similar observation at 656: I can see no real reason for limiting in any way the nature of the conditions which may be imposed. It may be said that, if a condition calls for State action, the action must be action of which the State is constitutionally capable. But I can see no reason for otherwise limiting the power to appropriate for payment to a State subject to a condition. (Emphasis added.)

2.

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What does “constitutionally” mean here? Does it refer to the State Constitution (whatever that is) as well as the Commonwealth Constitution? And what would be the consequence of a breach of this limitation? Why should a possibly invalid acceptance affect the validity of the offer? Dixon CJ’s scepticism (at 601, 621) was justified: the invalidation of the priority provision (s 221(1)(a)) had no practical effect on the continuation of uniform income tax. Nor did the abandonment in 1959 of the legal condition in the Grants Act that the States not levy income tax (States Grants Act 1959 (Cth)), or its abandonment as an [7.320]

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informal stipulation in 1976: States (Personal Income Tax Sharing) Act 1976 (Cth). The continuation of uniform income taxation depended upon political and economic considerations rather than legal constraints. Indeed, when the Commonwealth passed legislation specifically enabling States to impose a personal income tax surcharge, to be assessed and collected by the Commonwealth (Income Tax (Arrangements with the States) Act 1978), no State availed itself of this facility, and the Act was eventually repealed in 1989: see Working Party on Tax Powers, Taxation and the Fiscal Imbalance Between Levels of Australian Government: Responsibility, Accountability and Efficiency (4 October 1991), paras [9.45], [9.46]. 3.

For a review of the Uniform Tax cases in their constitutional and political context, see C Saunders, “The Uniform Income Tax Cases”, in H P Lee and G Winterton (eds), Australian Constitutional Landmarks (Cambridge University Press, Cambridge, 2003), p 62. Professor Saunders remarks that the “Cinderella-like rise to prominence of s 96 is attributable in part” to the two Uniform Tax cases (at pp 63-64) which “[w]ith hindsight … symbolise a turning point in Australian constitutionalism” (at 62; emphasis added). For their effect, see especially pp 77-80. In what way(s) were they a turning point: economically, politically, constitutionally?

4.

Paul Keating, when Prime Minister, remarked that: “Uniform taxation is the glue that holds the federation together. It is the reason we are one nation with one economy”: P Keating, “The way towards a reshaped future”, The Australian (24 February 1994), p 9. Does this overstate, perhaps, the financial basis of Australian nationhood and underrate the significance of the Commonwealth’s regulatory powers, as well as political, historical and cultural influences? What does comparison with the United States (which lacks uniform income taxation) suggest?

5.

In Hematite Petroleum Pty Ltd v Victoria (1983) 151 CLR 599, Mason and Murphy JJ suggested (in obiter dicta) that the Commonwealth Parliament could effectively legislate pursuant to s 51(ii) to prevent the States from levying taxation, at least by prohibiting persons from paying State taxes. Mason J remarked (at 631): “It is possible that by an exercise of the taxation power the Commonwealth could effectively prevent the States from imposing excise duties. A law enacted under s 51(ii) providing that no excise duties should be payable on designated goods would, by virtue of s 109, prevail over any inconsistent State law.” Similarly, Murphy J commented that, subject to constitutional prohibitions, s 51(ii) “authorises laws which apply to the States, including laws which exclude the States from particular tax fields” (at 637). He later reiterated (at 639) that “the [Commonwealth] Parliament may allow [a] State tax to operate, or may legislate to exclude it by operation of s 109 of the Constitution”. Hematite concerned s 90 of the Constitution, and in that context Gibbs CJ and Deane J also suggested that the Commonwealth could legislate to remove a State tax which interfered with its tariff policy. Thus, Gibbs CJ remarked (at 617): “[s 109] plays a major part in preventing any State law from frustrating Commonwealth legislative policy. The presence of s 109 may well have rendered it unnecessary to include in s 90 a reference to duties of excise for the purpose of invalidating a State excise duty which counteracted the effect of a Commonwealth tariff.” Deane J noted at 660–661 that, after s 90 had removed customs and excise, “subject to the effect of inconsistency provisions, the States would retain concurrent powers to raise money by all other forms of taxation.” (Emphasis added.) However, neither Gibbs CJ nor Deane J mentioned s 51(ii) and may, therefore, have contemplated other Commonwealth legislative [7.320]

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powers, especially s 51(i). The subject matter of s 51(ii) is “taxation” which, interpreted literally, would include State taxation or taxation for State purposes. However, “taxation” in s 51(ii) has generally been read more narrowly to refer only to taxation for Commonwealth purposes, as Mason J had noted less than a year before Hematite: Another instance in which it has been considered that no possibility of legal conflict could arise, this time between the exercise of Commonwealth and State legislative powers over parallel but different subject matters, is in the field of taxation. The Commonwealth power to impose taxation is exercisable for Commonwealth purposes (s 51(ii)); it is distinct from, and independent of, the State power to impose taxation for State purposes. Accordingly, it has been said that a legal conflict between the two is an impossibility (Victoria v Commonwealth (1957) 99 CLR 575 at 614, 657.) This is because it is thought that in the abstract there can be no competition between the two powers since the subject matters do not overlap. The conclusion that the Commonwealth and State powers of taxation do not overlap is closely related to the proposition that the Commonwealth cannot in the exercise of the power given by s 51(ii) legislate so as to require its taxation to be paid in priority to that of the State. (R v Winneke; Ex parte Gallagher (1982) 152 CLR 211 at 221.)

As these remarks of Mason J suggest, his comments and those of (at least) Murphy J in Hematite are difficult to reconcile with the decision on s 221(1)(a) in the Second Uniform Tax Case Victoria v Commonwealth and with dicta in the First Uniform Tax Case South Australia v Commonwealth. Moreover, as Murphy J noted in Hematite, the Commonwealth’s power under s 51(ii) is subject to the implied prohibition (or prohibitions) derived from federalism (see Chapter 12). How, then, is one to account for Mason J’s observations in Hematite Petroleum Pty Ltd v Victoria? For a good discussion of this issue, see Zines (5th ed, 2008), pp 480-483. A more recent decision on allowable “terms and conditions” under s 96 is the DOGS Case.

The DOGS Case [7.330] Attorney-General (Vic) (Ex Rel Black) v Commonwealth (1981) 146 CLR 559 at 659–660 [The plaintiff, acting at the relation (inter alia) of members of a group entitled “Defence of Government Schools” (DOGS), challenged Commonwealth legislation which granted financial assistance to the States on condition that it was paid to non-government schools, including those specifically mentioned in the legislation, to finance their educational programmes, including the construction of buildings. Some of those schools were owned and operated by religious bodies, principally the Roman Catholic Church. The challenge was based on alleged contravention of ss 96 and 116 of the Constitution. The Court rejected the s 116 challenge by a majority of 6 to 1 (Murphy J dissenting). The s 96 challenge was based on the argument that the States acted merely as conduits between the Commonwealth and the schools, so that the States received no “financial assistance”. It was rejected unanimously. The judgment of Wilson J is extracted here on the latter issue.] Wilson J [noted Dixon CJ’s discussion of the Federal Aid Roads Case and Moran in the Second Uniform Tax Case and continued]: 659 The cases to which I have referred give a meaning to s 96 which, at least for the time being, must be taken as settled. … The plaintiffs distinguish Moran, notwithstanding an apparent similarity to the present case, as basically different. They observe that the legislation in that case, the Wheat Industry Assistance Act 1938 was promoted by the States, that the Commonwealth was a partner in the scheme and made the grants at the instigation of the States as bodies politic, albeit that they were eventually to be paid to a class of persons. The machinery of State government was necessarily involved in the administration of the scheme, and it was wrong therefore to describe the States as mere agents of the Commonwealth, with no discretionary responsibility. … The [current] legislation provides a striking contrast in the discretion that is accorded to the States in the administration of the grants for government schools and the virtually total disregard of the States, save 636

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The DOGS Case cont. only for the barest acknowledgement of the formalities required by s 96, in the administration of the grants for non-government schools. The contrast is all the more remarkable in the context of a constitution which in the distribution of power within the federation does not confer on the Commonwealth Parliament a specific legislative power with respect to education. But, unfortunately for the success of their argument, the plaintiffs mistake policy for law. The Court is not concerned with the wisdom or the expediency of the former, and the features of the scheme of which the plaintiffs complain are of this character. 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 660 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 non-government 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. [Barwick CJ concurred and the other justices delivered judgments to the same effect.]

[7.340]

1.

2.

Notes&Questions

Many years before the DOGS Case, Professor Geoffrey Sawer had noted: “Dixon J once suggested to me that the Commonwealth should not be able by the medium of s 96 to make the States a mere conduit pipe for expenditures otherwise beyond federal power, but it is now difficult to see how such a restriction on the scope of s 96 could possibly be established.” (G Sawer, Australian Federalism in the Courts (Melbourne University Press, Melbourne, 1967), p 143.) In light of his judgment in the Second Uniform Tax Case, how would Dixon CJ have decided the DOGS Case? The Commonwealth’s financial supremacy was prophesied by Attorney-General Alfred Deakin in April 1902 in an anonymous contribution to a London newspaper. The Federal Parliament … having tasted the sweets of supremacy – will not consent to finance the local treasuries except for value received. If it provides money for the States it will exact tribute from them in some shape. As the power of the purse in Great Britain established by degrees the authority of the Commons, it will ultimately establish in Australia the authority of the Commonwealth. The rights of self-government of the States have been fondly supposed to be safeguarded by the Constitution. It left them [7.340]

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legally free, but financially bound to the chariot wheels of the central Government. Their need will be its opportunity. The less populous will first succumb; those smitten by drought or similar misfortunes will follow; and, finally, even the greatest and most prosperous will, however reluctantly, be brought to heel. Our Constitution may remain unaltered, but a vital change will have taken place in the relations between the States and the Commonwealth. The Commonwealth will have acquired a general control over the States, while every extension of political power will be made by its means and go to increase its relative superiority. (A Deakin, in J A La Nauze (ed), Federated Australia: Selections From Letters to the Morning Post 1900–1910 (Melbourne University Press, Melbourne, 1968), p 97.)

However, Deakin was not entirely prescient regarding the manner by which Commonwealth supremacy was achieved. 3.

Gibbs J and especially Stephen and Wilson JJ hinted obliquely in the DOGS Case that the court might have been prepared to reconsider earlier cases, especially Moran, if the plaintiff had requested it (146 CLR at 591, 611, 659). Dixon CJ in the Second Uniform Tax Case was also unhappy with the established (as he saw it) interpretation of s 96, although he felt constrained to apply it. How solid, then, is the present interpretation of s 96? Professor Cheryl Saunders discussed this question at the conclusion of a thorough examination of s 96.

4.

Any judicial reconsideration of s 96 would probably commence with Dixon CJ’s suggestions in the Second Uniform Tax Case at 609. His suggestion that the terms and conditions should be “relevant to the situation which called for special … assistance from the Commonwealth” is paralleled in the United States (which lacks an equivalent to s 96), where the Supreme Court has remarked: “[O]ur cases have suggested (without significant elaboration) that conditions on federal grants might be illegitimate if they are unrelated ‘to the federal interest in particular national projects or programs’. (South Dakota v Dole 483 US 203 (1987) at 207.)” Another suggested limitation on United States conditional financial grants to the States is that “in some circumstances the financial inducement offered by Congress might be so coercive as to pass the point at which ‘pressure turns into compulsion’”: Dole at 211. Cf United States v Butler 297 US 1 (1936), which was affected by the subsequently rejected reserved State powers doctrine. However, as in Australia, no federal conditional financial grant has been invalidated by the Supreme Court on these grounds. For criticism of the Supreme Court’s jurisprudence on this subject, see Note, “Federalism, Political Accountability, and the Spending Clause” (1994) 107 Harvard Law Review 1419 at 1427ff; T R McCoy and B Friedman, “Conditional Spending: Federalism’s Trojan Horse” [1988] Supreme Court Review 85. The Constitutional Commission recommended repeal of s 96’s opening words on the ground that they were expended, but no further alteration: Final Report (1988), pp 835-838. For the views of some expert witnesses, see para 11.327. However, some commentators more solicitous of State rights have recommended that s 96 be amended to reduce the Commonwealth’s power. Thus, Geoffrey Lehmann would add to s 96 the words: “except that the [Commonwealth] Parliament may not impose terms and conditions as to how any such grants are to be spent.” (G Lehmann, “Grants Subvert Constitution”, The Australian (20 November 1992), p 25.) Former Chief Justice Sir Harry Gibbs suggested a constitutional amendment to address problems associated with tied grants, but conceded the difficulty in framing “an amendment which would be both effective and acceptable”: Sir Harry Gibbs, “Fiscal Imbalance: Tied Grants”, in J Beaumont (ed), Where to Now? Australia’s Identity in the Nineties (Federation Press, Sydney, 1993), 69 at p 70. He explained some of the practical difficulties as follows:

5.

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It would not be possible to change the present system merely by amending s 96 in such a way that the Commonwealth no longer had the power to impose terms and conditions on grants of financial assistance. As Sir John Latham indicated in the First Uniform Tax Case [65 CLR at 429] the Commonwealth Parliament, in a Grants Act, might simply provide for the payment of moneys to States, without attaching any conditions whatever, but might have determined the amount of the grants in fact by its satisfaction with the policies of the respective States. Indeed it is possible that even in the absence of s 96 the Commonwealth might be able to rely on the appropriation power given by s 81 of the Constitution to make grants for purposes outside Commonwealth powers. That would not be my view, but in the present state of the authorities the effect of s 81 is obscure. (Sir Harry Gibbs, “Vertical Fiscal Imbalance and the Allocation of Tax Powers: Constitutional Reform”, in D J Collins (ed), Vertical Fiscal Imbalance (Australian Tax Research Foundation, 1993), 331 at pp 338-339.)

6.

The Australian Constitutional Convention proposed in 1985 that: [T]he following practices should be observed in relation to the provision of financial assistance under section 96 of the Constitution: (i) conditions should not be attached to general revenue payments; (ii) conditions attached to specific purpose grants should relate only to the purpose of the grant and not to matters extraneous to it; (iii) the nature and extent of the conditions attached to a grant should be determined by negotiation between the Commonwealth and the States concerned having regard to the need to strike a balance between the responsibilities of both levels of government involved; (iv) administrative procedures for the purposes of a grant should be established by the Commonwealth only through the relevant State government or department or a State agency nominated by the State. (Proceedings of the Australian Constitutional Convention (Brisbane 1985), Vol 1, p 418.)

This probably represents the maximum the States can realistically hope to achieve. Circuitous devices [7.350] The Commonwealth is subject to several constitutional limitations or prohibitions

from which the States are exempt – see especially ss 51(ii) and (xxxi), 99 and 116. Since s 96 effectively enables the Commonwealth to co-opt the States in the execution of Commonwealth policies, can the Commonwealth employ s 96 to evade these limitations? This issue has arisen on several occasions, the first being Moran.

DCT (NSW) v Moran [7.360] Deputy Federal Commissioner of Taxation (NSW) v W R Moran Pty Ltd (1939) 61 CLR 735 at 754–763, 774, 801–807 [A State scheme to tax flour in order to raise funds to subsidise wheat growers failed for levying an excise duty in contravention of s 90 of the Constitution: Attorney-General (NSW) v Homebush Flour Mills Ltd (1937) 56 CLR 390. Accordingly, a joint Commonwealth-State scheme was adopted to replace it “at the request of the [States]” (as the preamble to the Wheat Industry Assistance Act 1938 (Cth) recited). The scheme was described thus by Latham CJ (at 756–757): [A] Federal excise duty is imposed upon flour which is paid upon the same basis by persons in all States. The proceeds of the duty go into the Federal consolidated revenue. An equivalent sum is then taken from the consolidated revenue and is paid by the Commonwealth by way of financial assistance to the States … upon condition that the States apply the moneys in the assistance of relief of wheat growers. In the case of Tasmania, however, a special grant is made by the Commonwealth which is not subject to any Federal statutory conditions, but which, in [7.360]

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DCT (NSW) v Moran cont. fact, is applied, and which it was known would be applied, by the Government of Tasmania in paying back to Tasmanian millers and others nearly the whole of the flour tax paid by them in respect of flour consumed in Tasmania. The special arrangement was made with Tasmania because it had virtually no wheat growers. The Flour Tax Relief Act 1938 (Tas) provided for flour tax paid to be refunded to taxpayers (ss 5 – 7) and passed on to customers (s 10). Upon being sued for tax due to the Commonwealth, the defendant argued that the relevant legislation was invalid for discriminating between the States in contravention of s 51(ii) of the Constitution. The legislation was upheld by a majority of 4:1, Evatt J dissenting.] Latham CJ: 754 Upon the argument in this case it was objected that the court should not look outside the four corners of the statutes in question and that the proceedings of the [Commonwealth–State] conference were irrelevant. The Wheat Industry Assistance Act 1938, however, expressly refers in the preamble to the conference, and I am, therefore, of opinion that there can be no objection to looking at the record of what was done at the conference. An examination of that record does not add anything to what is apparent upon the face of the Federal and State statutes. These statutes show that the Commonwealth and the State Governments agreed to ask their Parliaments to pool their constitutional powers for the purpose of bringing about a result which admittedly neither the Commonwealth Parliament alone nor the State Parliaments alone could achieve. The question which arises is whether the Commonwealth Parliament, in providing its contribution to this scheme, has infringed the Constitution. … 757 It is contended that, if the taxation Acts and the Wheat Industry Assistance Act 1938 (with its preamble) are read together, it is evident that the amount paid in taxation by persons in Tasmania is to be refunded to the Government of Tasmania for repayment to them, so that there is a discrimination in favour of Tasmania and against the other States. The argument is that if Tasmania had been excluded from the taxation Acts, those Acts would clearly have been bad, but that the same result is produced by collecting the tax from Tasmania, and then paying it, or most of it, back to Tasmania. But s 51 of the Constitution relates only to the powers of the Commonwealth Parliament, and the provision prohibiting discrimination affects and can affect that Parliament only. Unless the Federal taxation legislation itself discriminates between States or parts of States, it is not rendered invalid by the condition attached to s 51(ii). The Federal taxation Acts themselves plainly do not discriminate between States. They are therefore not affected by the condition contained in s 51(ii). The special treatment which is given to Tasmania does not arise from any discrimination in any law passed by the Federal Parliament “with respect to taxation.” The 758 Wheat Industry Assistance Act 1938 is not an Act with respect to taxation. It is an Act appropriating money. It provides, not for the collection, but for the expenditure of money. There is no provision in the Constitution to the effect that appropriation Acts must not discriminate between States or that Federal expenditure in the several States must be equal in any sense. Such a provision would obviously encounter very grave practical difficulties. What is said to be the discrimination in favour of Tasmanian taxpayers really arises from Tasmanian legislation. No Commonwealth legislation provides for the repayment of any money to any Tasmanian taxpayer. It provides only for the payment of a sum to the Government of Tasmania. The Government of Tasmania has, with the authority of the Parliament of Tasmania, devoted this money to giving relief to Tasmanian taxpayers. But such action cannot be an infringement of s 51(ii), because that section does not apply to the Parliament of Tasmania. In my opinion, there would be nothing unlawful or invalid in any State enacting legislation providing for the repayment to its citizens of moneys which they had paid to the Commonwealth by way of taxation. Such a law might be open to political objection, but no remedy could be obtained by any objection in the courts. The enactment of such a law could not affect the validity of any Act passed by the Parliament of the Commonwealth. It may be added that a State Parliament could achieve much the same practical result in some cases by reducing its own taxes. The validity of such a reduction would not be open to doubt. … 763 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 non-discriminating Federal laws to States which vary in 764 development and wealth. Discrimination is prohibited in laws with respect to taxation (s 51(ii)). Bounties must be uniform (s 51(iii)). Laws or 640

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DCT (NSW) v Moran cont. regulations of trade, commerce or revenue must not give preference to one State or part thereof over another State or part thereof (s 99). But these “equal” laws may produce very unequal results in different parts of Australia. 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. It was also objected that as the object of the provision in s 14 of the Wheat Industry Assistance Act 1938 enabling the minister to grant special financial assistance to Tasmania was to make it possible for Tasmania to refund the tax to Tasmanian taxpayers, the “real purpose” of that Act was to make possible a discrimination between the States in breach of s 51(ii) of the Constitution. This objection is, in my opinion, met by what I have already said, namely, that the taxation legislation of the Commonwealth does not discriminate between States, that appropriation Acts of the Commonwealth are not subject to sec 51(ii) of the Constitution, and that legislation by the State of Tasmania is not subject to any limitation arising from that section. [Rich and McTiernan JJ concurred with Latham CJ and Starke J reached the same conclusion for similar reasons.] Starke J: 774 [T]he Commonwealth Acts do not contravene any provision of the Constitution. The court cannot concern itself with the motives of the Parliaments. All it can rightly do is to inquire whether the means devised by the Parliaments in the execution of their powers are prohibited by the Constitution. It is plain on the face of the various Acts already mentioned and is explicitly recited in the preamble to the Wheat Industry Assistance Act 1938, No 53, that the Commonwealth and the States were co-operating in a scheme to ensure wheat growers a payable price for wheat. The legislative bodies of the Commonwealth and the States were each entitled to use to the full the powers vested in them for the purpose of carrying out the scheme. Co-operation on the part of the Commonwealth and the States may well achieve objects that neither alone could achieve; that is often the end and the advantage of co-operation. The court can and ought to do no more than inquire whether anything has been done that is beyond power or is forbidden by the Constitution. Evatt J (dissenting): 778 In my opinion there has been a very thinly disguised, almost a patent, breach of the provision against discrimination; and the especial significance of the present case lies in its result, which practically nullifies a great constitutional safeguard inserted to prevent differential treatment of Commonwealth taxpayers solely by reference to their connection or relationship with a particular State. …796 In attempting an analysis of the present scheme of taxation of the Commonwealth, I have examined it with relation to the actual operation and effect of the legislation. …801 [T]he question whether s 14 [of the Wheat Industry Assistance Act 1938 (Cth) which authorised a grant of financial assistance to Tasmania] is a law with respect to taxation depends upon the prior question whether the real purpose of s 14 is to effect a refund of part or all of the tax. If so, s 14 is a law with respect to taxation just as much as are provisions with respect to refunds of tax which in themselves merely authorize disbursement of moneys and which are usually contained in tax assessment Acts. In short, it is impossible to dissociate s 14 from the purpose which has been stamped upon it by the Commonwealth’s adherence to the scheme. The same finding as to the true purpose of sec 14 also disposes of the argument that, inasmuch as s 96 enables the Commonwealth to make a grant of financial assistance and to make it to one State only, sec 14 is authorized by the Constitution itself. The broad 802 answer to the argument is that s 96 cannot be employed for the very purpose of nullifying constitutional guarantees contained elsewhere in the Constitution. For instance, it was not and could not be contended that, in defiance of s 92 which provides for inter-State freedom of trade and which binds Commonwealth and State alike, the Commonwealth could make a grant (under s 96) of money to one or all of the States for the express purpose of enabling the States to discriminate against inter-State trade, eg, by subsidising traders on condition that they did not engage in inter-State [7.360]

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DCT (NSW) v Moran cont. trade: or that, in face of s 99, which precludes the Commonwealth from enacting commercial laws which give a preference to one State over another, the Commonwealth could grant moneys to one State for the express purpose of enabling that State to subsidise traders engaged in inter-State trade on condition that they resided in such State or employed a certain proportion of employees who belonged to trade-unions registered in that State. In these instances, the Commonwealth, while purporting to grant money to a State under s 96, would in reality be authorizing the employment of its funds for the sole purpose of infringing constitutional prohibitions; and it is clear that s 96 cannot be used as an instrument for such a purpose. … 803 It was contended for the plaintiff that “the discrimination … is the result of State action and does not affect Federal legislation” and that even if the Tasmanian Flour Tax Relief Act 1938 is invalid, s 14 is not invalidated. Again the answer depends upon whether s 14 is to be stripped of its disguise. If its purpose is to establish taxation discrimination in favour of Tasmania, it is clearly invalid. But the Tasmanian Flour Tax Relief Act 1938 is not thereby invalidated. The State of Tasmania is not bound by s 51(ii) of the Constitution. All that happens is that the special grant under s 14 is unauthorized by law, so that there is nothing upon which the Tasmanian Act can operate. It is erroneous to assume that the taxation discrimination is the result of the Tasmanian Act. It is the result of the combined operation of the Commonwealth’s imposition of flour taxes and the Commonwealth’s special grant to one State for the purpose of refunding the tax to Commonwealth taxpayers who are associated with that one State. … 806 [E]veryone in Australia knows well that, contrary to the express prohibition of s 51(ii), the scheme of flour taxation designedly creates an exemption in favour of Tasmania. If the court to which the protection of the Constitution is committed is willing to shut its eyes to facts which are so well known, then, if I may adopt Lord Atkin’s phrase, used in another connection, “the constitutional charter might as well be torn up” ([James v Cowan] [1932] AC 542; (1932) 47 CLR 386 at 555 (AC), 394 (CLR)). The final contention of the defendant was that, assuming s 14 of the Wheat Industry Assistance Act 1938 to be invalid, the Commonwealth Acts imposing the flour tax are separable and valid. But the Commonwealth’s scheme of taxation is constituted by the series of Acts Nos 48 to 53 inclusive. If, as I have held, there has been an infringement of s 51(ii), it must follow that, in the absence of an express statutory indication to the contrary, the Acts which make up the entire scheme, and are sufficiently expressed as doing so, are invalid. 807 It is correct to say that, if s 14 of the Wheat Industry Assistance Act 1938 had not been included in the scheme, the residue of the Commonwealth’s taxing scheme would have been valid. The difficulty is that the taxing scheme is one and indivisible. Moreover, but for the fact that sec 14 worked an exemption in Tasmania’s favour, it seems certain that Tasmania would not have become a party to the scheme; in that event the States would not have been unanimous; and the Commonwealth might well have refrained from accepting responsibility for taxing flour with a view to increasing the price of bread to the ultimate consumer. The defendant appealed, unsuccessfully, to the Privy Council.

Moran v DCT (NSW) [7.370] W R Moran Pty Ltd v Deputy Commissioner of Taxation (NSW) [1940] AC 838 at 849–859 [The judgment of the Board comprising Viscount Maugham and Lords Atkin, Russell of Killowen, Wright and Porter was delivered by Viscount Maugham:] 849 Their Lordships agree with the High Court in the view that in the circumstances of the case there can be no objection to examining the scheme, including the record of what was done at the conference at Canberra; and they also agree that an examination of that record does not add anything to what is apparent upon the face of the Federal and State statutes. There has been no attempt to disguise, still less to conceal, what has been done in this matter, and the reasons for doing it. The scheme admittedly could not have been carried out by the Commonwealth Parliament alone, and the main question is whether in the course of taking the predominant part in carrying out the scheme that Parliament has infringed the Constitution. Their Lordships, however, think it right to add that, at any rate in such a case as the present, where there is 642

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Moran v DCT (NSW) cont. admittedly a scheme of proposed legislation, it seems to be necessary when the “pith and substance” or “the scope and effect” of any one of the Acts is under consideration, to treat them together and to see how they interact. The separate parts of a machine have little meaning if examined without reference to the function they will discharge in the machine. In the present case the purpose and substance of the Acts as a whole, which means little more than their scope and effect, may properly be looked at. … 853 The ultimate discrimination in favour of Tasmania in this case arises, it is contended, from the Tasmanian Act above mentioned; and the action of that Legislature in relation to the sums paid to the State by the Commonwealth cannot be an infringement 854 of s 51(ii), because that section does not apply to the Parliament of Tasmania. Anything, it is suggested, will be intra vires provided that the Commonwealth’s Taxation Act or Acts do not infringe the terms of s 51(ii). With the greatest respect to those judges in Australia who may have accepted this contention, it seems to their Lordships to go too far, and certainly much further than is necessary for the decision of the present case. It would seem to justify every case in which there is a Taxation Act containing no discriminatory provisions followed by an Appropriation Act, or a Tax Assessment Act, passed by the Commonwealth Parliament authorizing exemptions, abatements or refunds of tax to taxpayers in a particular State. It was argued before their Lordships that this would be intra vires. In the view of this Board it is impossible to separate such an Appropriation or Tax Assessment Act from the Taxation Act in considering the effect of s 51(ii), or to turn a blind eye to the real substance and effect of Acts passed by the Federal Parliament at or about the same time, if it appears clear from a consideration of all the Commonwealth Acts that the essence of the taxation is discriminatory. … 855 The first answer of the appellants … is that s 51(ii) contains a constitutional prohibition against any discrimination as regards taxation between States or parts of States, from which it is said to follow that no grant of financial assistance can be made to any State which would have the effect, directly or indirectly, of creating such a discrimination. It is impossible to accept the contention in this wide form, for s 51 relates to a number of powers which are conferred upon the Commonwealth Parliament as regards the laws which may be made by Parliament for the peace, order, and good government of the Commonwealth, and these powers are expressly made “subject to this Constitution,” a qualification which must include the power under s 96 (for a period which might be limited) to grant financial assistance to any State. So far from s 96 being subordinate to s 51(ii), or, it may be added, to s 51(iii), it would be more plausible to contend that powers conferred by s 51 are subordinate to s 96, and that the power of the Parliament under that section can be exercised even so as to effect a plain discrimination. The question then arises whether this view can be accepted with or without qualification. … 857 Their Lordships have accordingly to bear in mind, first, that s 51(ii) prohibits discrimination between States or parts of States, but is not concerned to deal with the matter of equality of burden; and secondly, that s 96 does not prohibit discrimination. It is difficult to see any ground for an attack on the scheme, or on the various Acts which carry it into effect, in so far as that attack is really based on the exercise by the Commonwealth Parliament of its powers under s 96. Those powers are plainly being used for the purpose of preventing an unfairness or injustice to the State of Tasmania, or, indirectly, to some or all of its population. Such discrimination as may result between millers or their customers in Tasmania and in the other States is a by-product, 858 so to speak, of the endeavour to equalize the burden of the legislation by diminishing the special burden on Tasmania; and it is of first importance to note that this is brought about by an exercise of power under s 96, which does not itself prohibit discrimination. Great reliance was placed by the appellants on the scheme; but, in the view of their Lordships, the scheme adds nothing to the argument; for there is nothing in s 51 to prevent the Commonwealth Parliament from passing measures in concert with any State or States with a view to a fair distribution of the burden of the taxation proposed, provided always that the Act imposing taxes does not itself discriminate in any way between States or parts of States, and that the Act granting pecuniary assistance to a particular State is in its purpose and substance unobjectionable. In other words, it seems to their Lordships, as it seemed to the High Court, that the various Commonwealth and State Acts, if considered together as part of an organic whole, contain nothing which is prohibited in the Constitution. In coming to this conclusion their Lordships wish to make it clear that, as at present advised, they do not take the view that the Commonwealth Parliament can exercise its powers under s 96 with a [7.370]

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Moran v DCT (NSW) cont. complete disregard of the prohibition contained in s 51(ii), or so as altogether to nullify that constitutional safeguard. The prohibition is of considerable importance; and the Constitution should be construed bearing in mind that it is the result of an agreement between six high-contracting parties with, in some respects, very different needs and interests. 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 859 expedients – objected to as ultra vires by Evatt J 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.

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Notes&Questions

1.

Latham CJ also adopted a legalistic view of legislative schemes in the First Uniform Tax Case: see especially at 411 (at [7.260]). For Latham s 96CJ’s discussion of discrimination in the context of s 96 and the effect of Moran, see First Uniform Tax Case at 427–429.

2.

For a reasonably detailed analysis of the case, see C Howard, Australian Federal Constitutional Law (3rd ed, Law Book Co, Sydney, 1985), pp 185-190. Howard considered the Privy Council’s reasoning “highly unsatisfactory” since it effectively evaluated the Commonwealth Parliament’s “unexpressed motive”, contrary to orthodox principles of constitutional interpretation (p 190). What was the rationale for the Privy Council’s resolution of the conflicting views of Latham CJ and Evatt J, both of which were, to some extent, embraced? Did Evatt J rely on the Commonwealth Parliament’s motive? Is the distinction between legislative purpose (which is examinable) and Parliament’s motive (which is not) feasible?

3.

How would Moran be decided today? See Saunders, p 227 (quoted [7.320] note 3). For a good critique of the case, see D Rose, “Discrimination, Uniformity and Preference – Some Aspects of the Express Constitutional Provisions”, in Zines (1977), 191 at pp 215-219.

[7.390] Commonwealth employment of s 96 to evade its obligation in s 51(xxxi) to pay fair

compensation for the compulsory acquisition of property arose in several cases shortly after World War II. By agreements between the Commonwealth and the States, the latter agreed to acquire land by agreement or compulsorily for the settlement of discharged members of the armed forces. In the case of New South Wales, the compensation payable was to be the land’s value on 10 February 1942 which was considerably less than its value at the date of acquisition. The cost of the land was largely to be borne by the Commonwealth. The agreement was approved by Commonwealth and State legislation. The High Court held the Commonwealth legislation invalid by a majority of four (Latham CJ, Rich, Williams and Webb JJ) to two (Dixon and McTiernan JJ) on the ground that the Commonwealth Act contravened s 51(xxxi) of the Constitution by providing for the acquisition of property on 644

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terms which were not “just”: PJ Magennis Pty Ltd v Commonwealth (1949) 80 CLR 382. The majority’s reasoning was expressed succinctly by Williams J (at 423–424), with whom Rich J concurred: [Section 51(xxxi)] 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 some body authorized to acquire property by the Commonwealth or by a State by agreement with the Commonwealth. The Commonwealth legislation is invalid unless it provides for the acquisition of the property on just terms by whatever machinery the acquisition is to be brought about. 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. The present agreement confers on the Commonwealth a number of legal rights which are at least contractual rights with respect to the use and disposal of the land acquired by the State. When the land is so acquired it must be disposed of in accordance with the agreement and not otherwise. The land is acquired by the State on behalf of the Commonwealth and itself. Half the excess cost of acquiring, improving and developing the land, and more than half the other expenses incidental to carrying out the scheme are to be borne by the Commonwealth. The scheme would be in substance the same if the land was acquired jointly by the Commonwealth and the State. Under the scheme the State acquires the land solely but it is then dealt with on account of the Commonwealth and State jointly. The whole transaction is a joint venture entered into between the Commonwealth and the State to settle discharged members of the Forces on the land. The acquisition of the necessary land is of the essence of the scheme. [Emphasis added.]

Latham CJ characterised the scheme as “designed to escape from the constitutional limitation [in s 51(xxxi)] by using State legislative powers” (at 398). He commented (at 403) on s 96 thus: All Federal laws for the acquisition of property are required by s 51(xxxi) also to be laws for a purpose in respect of which Parliament has power to make laws. Accordingly there is nothing in the objection that the Act is not an Act with respect to the acquisition of property for the reason (true in itself) that it is an Act with respect to a defence purpose. Similarly there is no substance in the objection that the Act is an Act giving financial assistance to States (Constitution, s 96) and is therefore not a law with respect to the acquisition of property.

Dixon (at 410) and McTiernan JJ (at 415–416) dissented, on the ground that the Commonwealth Act merely authorised an agreement; it did not provide for the acquisition of property: [The Commonwealth Act] puts beyond doubt the authority of the signatory to execute the instrument on behalf of the Commonwealth; and it secures for the executive government Parliamentary approval of the transaction. But it goes no further. It does not otherwise change the legal character of the instrument or of the transaction it embodies. It certainly does not convert the terms of the agreement into the provisions of a law. The statute does not authorize the acquisition of property. It contains no provision whatever about property. It is entirely concerned with the execution of an agreement.

Can Magennis be reconciled with Moran? Which view (in Magennis) is preferable: the majority’s more pragmatic approach, or the more legalistic approach of Dixon and McTiernan JJ? For a discussion of the case, including the consequential question whether the invalidity of the Commonwealth legislation affected the State’s proposed acquisition (which the High Court held inoperative as a matter of statutory construction), see D K Singh, [7.390]

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“Legislative Schemes in Australia” (1964) 4 Melbourne University Law Review 355 at 361–368. The New South Wales legislation authorising the compulsory acquisition of land (at 1942 values) for settling returned soldiers was amended to exclude any reference to the Commonwealth–New South Wales agreement. It was upheld unanimously in Pye v Renshaw (1951) 84 CLR 58 in which Williams and Webb JJ from the majority in Magennis participated. (See also Tunnock v Victoria (1951) 84 CLR 42, dealing with the equivalent Victorian legislation.) The court (Dixon, Williams, Webb, Fullagar and Kitto JJ) distinguished Magennis at 79–80 thus: [T]he legislative power of the State is not affected by s 51(xxxi) of the Constitution. If a State Act provides for the resumption of land on terms which are thought not to be just, that is of no consequence legally: it cannot affect in any way the validity of the Act or of what is done under the Act. And the effect of [the NSW Act] of 1950 is to make it perfectly clear that all relevant legislation of the Parliament of New South Wales is intended to take effect unconditioned by any Commonwealth legislation and irrespective of the existence of any agreement between the Commonwealth and the State of New South Wales. To adopt the language of Webb J [in Magennis] it cannot now be correct to say that, properly construed, the State Acts contemplate the existence of a valid agreement or of any agreement or scheme. There is no possible ground of attack on the validity of this legislation, there is no ground whatever for saying that it is inoperative. (Emphasis added.)

The court’s response to the plaintiff’s argument that the State was acquiring the land as the Commonwealth’s agent was somewhat legalistic (at 82): “This alleges not a proposed illegal action but a legal impossibility. The effect of a proclamation under [the NSW Act] is to vest the subject land in the State of New South Wales, which becomes and can alone become by virtue thereof the legal and beneficial owner of the land. It holds the lands thenceforth for the purposes of the Closer Settlement Acts. The allegation of agency is indeed meaningless.” The Court’s response to the plaintiff’s argument that s 96 of the Constitution could not authorise the Commonwealth to provide money to a State to enable it to acquire land otherwise than on just terms similarly evaded the issue (at 83): “This is the very argument which was rejected in [the Federal Aid Roads Case]: see also [the South Australia v Commonwealth (1942) 65 CLR 373First Uniform Tax Case, 65 CLR at 417] where Latham CJ said: ‘The Commonwealth may properly induce a State to exercise its powers … by offering a money grant.’” The obvious lesson of Pye was expressed succinctly by Prime Minister Robert Menzies in a letter of 19 December 1951 to the Premier of Western Australia, quoted by the High Court several years later: [Menzies] 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. (Gilbert v Western Australia (1962) 107 CLR 494 at 505 per Dixon CJ, Kitto and Windeyer JJ)

Latham CJ’s pragmatic observation in the First Uniform Tax Case (see [7.260]) was clearly vindicated, but it is hardly an inducement to open government. The most recent case to address the issue of circuitous devices was the DOGS Case in which s 96 was held to be subject to s 116 of the Constitution, so that Commonwealth legislation granting money to a State for the purpose of “establishing any religion” would be invalid for contravening s 116: Attorney-General (Vic) (ex rel Black) v Commonwealth (1981) 146 CLR 559. Indeed Murphy J (dissenting) held Commonwealth grants legislation invalid on this ground. Barwick CJ (at 576) had no doubt that s 96 was subject to s 116: 646

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Section 116 in terms applies to all laws, in my opinion, without exception. The Parliament “shall not make any law for establishing any religion”. I can find no acceptable reason for excluding from this universality an Appropriation Act or an Act granting money to a State pursuant to s 96. Whilst there may no doubt be difficulty in forming the conclusion that any such Act is a law for such establishment the possibility cannot be denied. Nor is there, in my opinion, anything in the nature of an Appropriation Act or an Act granting financial assistance which necessarily precludes the application of the description “a law for establishing any religion”. (Emphasis in original.)

The other justices (except Stephen J who did not discuss this issue) essentially reached the same conclusion, although Mason J did so with some hesitation (at 618). Wilson J remarked that notwithstanding dicta in Pye v Renshaw (1951) 84 CLR 58 at 83, “Magennis remains a persuasive analogy” (at 650). Gibbs J (with whom Aickin J concurred) commented (at 593): 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. … 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. (Emphasis added.) [See, similarly, Mason J at 618, Murphy J at 621, and Wilson J at 651.]

For a good discussion of the High Court’s approach to “colourable legislation”, albeit written in 1967 and thus somewhat dated, see Sawer (1967), pp 109-111. Sawer’s conclusion exhibited characteristic panache: [T]he approach of the courts on such questions cannot be predicted with confidence, and the cases leave a wide area of judicial discretion. In Moran, the Privy Council issued a warning that the combined use of tax and repayment could be invalidated as a “colourable” evasion of the requirements of uniformity in federal taxation imposed by ss 51(ii) and 99. The decisions in Barger [(1908) 6 CLR 41] and Homebush Flour [(1937) 56 CLR 390] stand as a warning to governments not to go too far with evasive tactics, but Deputy Federal Commissioner of Taxation (NSW) v W R Moran Pty Ltd (1939) 61 CLR 735Moran, Uniform Tax and the soldier settlement cases suggest that a bold attempt may succeed, and the bolder the better.

These cases were again considered in the following recent case, where the issues were clearly canvassed, and Magennis was not overruled:

ICM Agriculture v Commonwealth [7.400] ICM Agriculture v Commonwealth (2009) 240 CLR 140 at 165–170, 198 (most footnotes omitted) [In 2004 the governments of the Commonwealth, New South Wales, Victoria, Queensland and South Australia, the Australian Capital Territory and the Northern Territory entered into an Intergovernmental Agreement on a National Water Initiative pursuant to which the National Water Commission Act 2004 (Cth) was enacted. It established the National Water Commission as an independent statutory body to assist with the implementation of the National Water Initiative. The Act contemplated the awarding, by the responsible Minister, of financial assistance to particular projects relating to Australia’s water resources and gave the CEO of the Commission the function of administering that assistance. A project proposed by New South Wales with respect to the Lower Lachlan Groundwater System (the LLGS) was accepted by the responsible Commonwealth Minister and a Funding Agreement between the State [7.400]

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ICM Agriculture v Commonwealth cont. and the Commonwealth “as represented by and acting through” the Commission was entered into. The State and the Commonwealth were both to contribute to the cost of the project. The Agreement required the State to convert all water licences in the LLGS granted under the Water Act 1912 (NSW) (the 1912 Act) to licences under the Water Management Act 2000 (NSW) (the 2000 Act) and to achieve a reduction of 56% in water entitlements in respect of the LLGS by 1 July 2016. In proceedings brought by persons who held bore licences under the 1912 Act, which had been replaced by aquifer access licences under the 2000 Act that reduced the permissible quantities of water to be taken, it was contended that the replacement of the bore licences with the aquifer licences involved an acquisition of property otherwise than on just terms in contravention of s 51(xxxi) of the Commonwealth Constitution and that the power of the Commonwealth under ss 96 and 51(xxxvi) of the Constitution to grant and to make laws with respect to granting financial assistance to a State, exercised by entry into the Funding Agreement pursuant to the National Water Commission Act, was subject to the just terms requirement of s 51(xxxi). A majority of the Court (French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ, Heydon J dissenting), held that the replacement of bore licences issued under the 1912 Act with aquifer access licences issued under the 2000 Act was not an acquisition of property within the meaning of s 51(xxxi). French CJ, Gummow and Crennan JJ did so on the basis that that groundwater was a natural resource and the State always had power to limit the volume water to be taken from that resource whereas Hayne, Kiefel and Bell JJ did so on the ground that, although bore licences were a species of property, because groundwater before extraction was not a subject of property rights and the States’ statutory rights were for the purpose of controlling access to a public resource, the State had gained no identifiable or measureable advantage from the steps that had been taken.] French CJ, Gummow and Crennan JJ: Coercive and non-coercive powers: 165 [31] The classification of legislative authority by a dichotomy between coercive and non-coercive powers may have its antecedents in observations made by Dixon CJ in the Second Uniform Tax Case at 605. After expressing some disquiet at the course of authority indicating that the power conferred by s 96 “is susceptible of a very wide construction in which few if any restrictions can be implied”, the Chief Justice continued: For the restrictions could only be implied from some conception of the purpose for which the particular power was conferred upon the Parliament or from some general constitutional limitations upon the powers of the Parliament which otherwise an exercise of the power given by s 96 might transcend. In the case of what may briefly be described as coercive powers it may not be difficult to perceive that limitations of such a kind must be intended. But in s 96 there is nothing coercive. It is but a power to make grants of money and to impose conditions on the grant, there being no power of course to compel acceptance of the grant and with it the accompanying term or condition. [32] 166 Of that passage, three things may be said. The first concerns the nature of the terms or conditions which accompany a grant. These may, as is the case here with the Funding Agreement, be expressed in terms of an agreement between the polities involved. Such agreements may take many forms, with some but not all of the characteristics of a contract between the executive government and a private party, citizen or corporation, and of a treaty between sovereign powers. Secondly, for many years the incidental power conferred by s 51(xxxix) has been used to create offences to support the making of grants under s 96 and the implementation of intergovernmental agreements. (Examples are ss 12 and 13 of the Commonwealth Grants Commission Act 1933 (Cth); and s 8A of the States Grants (Petroleum Products) Act 1965 (Cth), as introduced by the States Grants (Petroleum Products) Amendment Act 1985 (Cth).) Thirdly, in … Magennis (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 (at 402): “All such laws doubtless would be laws with respect to the acquisition of property. But there is nothing in the words 648

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ICM Agriculture v Commonwealth cont. 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: [33] [To the extent that his submissions were contrary to Magennis (at 403), 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, authorized by its Parliament. But the Commonwealth is not authorized by s 96 or any other provision of 167 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 Commonwealth: see also South Australia v Commonwealth, where Latham CJ said: “The Commonwealth may properly induce a State to exercise its powers … by offering a money grant”. [34] 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. The unsuccessful submission presented by Mr R G Menzies for Victoria in Victoria v Commonwealth (1926) 38 CLR 399 (at 405) had been that the Federal Aid Roads Act 1926 (Cth) was not supported by s 96 because (i) it attached to the grant conditions which in substance amounted to the exercise of legislative power with respect to road construction, a subject beyond s 51, (ii) the terms and conditions referred to in s 96 must be of a financial character unless they are terms and conditions falling within a head of power in s 51, and (iii) the terms and conditions must be imposed by the Parliament and cannot be fixed by executive authority. In the second case, the First Uniform Tax Case, Latham CJ, who later was in the majority in Magennis, took Victoria v Commonwealth as establishing that by offering a money grant under s 96 the Commonwealth may properly induce a State to exercise its powers with respect to a particular subject (eg, road making) or to abstain from exercising its powers with respect to, for example, banking or insurance. [35] Counsel for the present plaintiffs correctly submitted that what was said in Victoria v Commonwealth and the First Uniform Tax Case did not address “the very argument” which was put in Pye v Renshaw. This concerned the application to the exercise of the legislative power conferred by s 96 (read with s 51(xxxvi)) of the restriction found in s 51(xxxi). [36] Counsel for the plaintiffs also pointed to the use in the critical passage in Pye v Renshaw set out above of the phrase “in order that” when encapsulating the argument the Court was rejecting. 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” (C Saunders, “Intergovernmental Agreements and the Executive Power” (2005) 16 Public Law Review 294 at 301) in 1950 upon the repeal of the War Service Land Settlement Agreement Act 1945 168 (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. [Emphasis added by author.] 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. [37] 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 (at 505). 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: [7.400]

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ICM Agriculture v Commonwealth cont. In one letter (dated 19th December 1951) the Prime Minister [Mr Menzies], having in mind that the decision in Magennis’ Case 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. [38] 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. [39] 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 (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 [169] 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. [40] 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. [41] Several developments since the decision in Magennis tend to support the view taken by the majority of the relationship between s 51(xxxi) and s 96. First, it is now settled (Pape v Federal Commissioner of Taxation (2009) 238 CLR 1) that the provisions, referred to above, 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. [42] Secondly, it is settled since Trade Practices Commission v Tooth & Co Ltd (1979) 142 CLR 397 (at 403, 407–408, 426, 451–452) that s 51(xxxi) is not confined to the acquisition of property by the Commonwealth or its instrumentalities. In particular, Mason J said that remarks by Sir Owen Dixon which might be thought to throw doubt on that proposition should not be accepted (at 411). In his dissenting reasons in Magennis, Dixon J had said that “perhaps” s 51(xxxi) applied to acquisition by persons standing in no such position as the Commonwealth, its agencies and instrumentalities (at 403). [43] Thirdly, in Tooth Barwick CJ described s 51(xxxi) as “a very great constitutional safeguard” (at 403) and shortly thereafter, in the joint reasons of six Justices in Clunies-Ross v Commonwealth (1984) 155 CLR 193 at 201–202, 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”. [44] Fourthly, that construction involves looking beyond matters of legal form and to the practical effect of the law in question. Indeed, 170 shortly before the decision in Magennis, in Bank of NSW v Commonwealth (1948) 76 CLR 1 at 349, Dixon J had used the expression “circuitous device” when concluding that the effect of the federal law was that the banks and their shareholders, in a real sense, albeit not formally, were stripped of the possession and control of their entire undertaking, without compliance with s 51(xxxi). [45] Finally, passages in the reasons of several members of the Court in Attorney-General (Vic); Ex rel Black v Commonwealth (1981) 146 CLR 559, respecting the relationship between s 96 and the guarantee or prohibition provided by s 116 with respect to matters of religion, suggest that s 96 and s 51(xxxi) also should be read together. Wilson J said that Magennis remained a persuasive analogy respecting s 96 and s 116 (at 650). Gibbs J said he considered (at 593): “that ss 96 and 116 should be read together, the result being that the Commonwealth has power to grant 650

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ICM Agriculture v Commonwealth cont. 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 s 96 and s 51(xxxi): [46] The result is that the legislative power of the Commonwealth conferred by s 96 and s 51(xxxvi) 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. The plaintiffs’ case, to that extent, should be accepted. Hayne, Kiefel and Bell JJ: 198 [136] Because s 51(xxxi) “undertakes to forbid or restrain some legislative course” (Banking Case at 349–350) and “should be given as full and flexible an operation as will cover the objects it was designed to effect” (at 349), its operation is not to be circumvented by some “circuitous device” (at 349). But no issue of circuitous device arises here. The question argued in this matter by reference to Magennis is whether s 51(xxxi) intersects in some relevant manner with s 96. More particularly, in fixing “such terms and conditions as the Parliament thinks fit” for the grant of financial assistance to a State under s 96, may the Parliament fix a term or condition that requires compulsory acquisition of property by the State otherwise than on just terms? [137] That question was answered in the negative in Magennis. The law impugned in that case … approved the making by the Commonwealth of intergovernmental agreements with States that, when made in 1945, would provide for States to acquire land compulsorily at prices fixed at 1942 values. The majority in Magennis characterised the law as a law with respect to acquisition of property. The dissenting view, expressed by Dixon J, depended upon confining the considerations relevant to the characterisation of the impugned law to the rights and duties created by the law and excluding from consideration the practical effect of the law. The impugned law, in the opinion (at 410) of Dixon J, did no more than authorise the making of an agreement; the Act itself neither authorised the acquisition of property nor contained any provision about property. In his Honour’s opinion (at 411), the law was not to be characterised as a law with respect to an acquisition of property because, under an agreement, the making of which by the Commonwealth was authorised by federal law, the State undertook to exercise its powers of acquisition.

[7.410]

1. 2.

Notes&Questions

The court did not overrule Magennis. What is the significance of this? What remains of the court’s attitude to Pye v Renshaw and “circuitous devices”? In the paragraphs which followed, at [138]ff, Hayne, Kiefel and Bell JJ make the following points by way of conclusion. Consider these carefully. To what extent do they accurately reflect the current position? a) It is well established that the practical operation of a law is not irrelevant to questions of characterisation; although the character of the law must be determined by reference to the rights, powers, liabilities, duties and privileges it creates. b)

A law may contravene the constitutional restraint that just terms be provided in the acquisition of property both directly or indirectly, explicitly or implicitly. However circuitous or disguised, if a law is a law with respect to acquisition otherwise than on just terms, it is in breach of the restriction in s 51(xxxi).

[7.420] In Williams v Commonwealth (2012) 248 CLR 156, discussed principally in relation

to s 61 of the Constitution and executive power, there was some considerable examination of the relationship between s 61 and s 96 in the reasoning of Hayne J. Reference is made here only in relation to this aspect of the reasoning. The issue of Commonwealth appropriations and spending, together with the important cases of Pape v Commonwealth (2009) 238 CLR 1 and Williams, is examined in detail in Chapter 3 at [3.370] and [3.400]. For the purposes of [7.420]

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this chapter, the reasoning of Hayne J at 770–772 [238]–[248] is pertinent. It is located in the extract of Williams at Chapter 3 at [3.370]. The following notes and questions arise from this case and the above-mentioned reasoning of Hayne J. [7.430]

1.

2.

652

Notes&Questions

To what extent is the need to spell out the special nature of the “tax bonus” in Pape – and hence to distinguish it from the expenditure in this case – a consequence of the subtle change in approaching questions of executive power by examining first s 61 and the nature and ambit of the executive power thereby vested, and then determining the question of legislative power to support such action, whether by s 51(xxxix) or otherwise? To what extent would this have been necessary if the more established breadth/depth analysis, referred to as “illuminating” by Heydon J in Williams at 383 [515], n 525, and originally articulated by Professor George Winterton, had been maintained. By that approach, in determining the ambit of s 61 executive power, attention is initially shifted away from any inherent notion of executive power within s 61. Rather, reference is first made to the legislative competence of the Commonwealth to determine the sphere of Commonwealth executive competence (breadth), and then the question of what action the Commonwealth executive may take within that sphere (depth) is determined. In determining depth, in the absence of statute, reference may be made to the common law powers of the Crown and to the imperatives placed upon the government of a federal independent polity. The limitation on Commonwealth competence, especially vis-à-vis the States, would have been determined by “breadth”. Hence, when reliance is subsequently placed on s 51(xxxix) to provide legislative support to permissible executive action in the absence of a direct head of power, the question of limitations to such legislation would have already been taken care of; ie, it would have been settled initially because the legislative competence of the Commonwealth is used to determine breadth. What other problems may arise by maintaining the currently approach to these questions as opposed to insisting on breadth/depth analysis?

[7.430]

CHAPTER 8 Freedom of Interstate Commerce [8.10]

FREEDOM OF INTERSTATE COMMERCE – ITS ONGOING COMPLEXITY .......... 653 [8.20]

Bank Nationalisation Case ............................................................ 654

[8.30]

A STATE OF UTTER CONFUSION ............................................................................ 655

[8.40]

RESURGENCE OF THE FREE TRADE THEORY .......................................................... 657 [8.40] [8.60] [8.80] [8.100] [8.120] [8.140]

Cole v Whitfield ............................................................................ Bath v Alston Holdings Pty Ltd ....................................................... Castlemaine Tooheys v South Australia .......................................... Barley Marketing Board (NSW) v Norman ...................................... Betfair v Western Australia (2008) ................................................. Betfair v Racing NSW; Sportsbet v NSW .........................................

657 668 672 678 682 688

[8.160] FREEDOM OF INTERCOURSE BETWEEN STATES ................................................... 689 [8.170]

APLA v Legal Service Commissioner (NSW) ..................................... 690

[8.190] FACT-FINDING IN SECTION 92 CASES .................................................................. 692

FREEDOM OF INTERSTATE COMMERCE – ITS ONGOING COMPLEXITY [8.10] The first paragraph of s 92 of the Constitution provides that 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”. This apparently simple provision has engendered vast amounts of litigation and layers upon layers of complexities in its interpretation by the High Court, to the point that it moved Sir John Latham to comment: “When I die, s 92 will be found written on my heart” ((1952) 26 Australian Law Journal 2). These complexities were acknowledged by the High Court in its unanimous landmark judgment in Cole v Whitfield (1988) 165 CLR 360 when it observed (at 392): “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’. 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.” As Professor Colin Howard rightly pointed out, the difficulties arise in the expression “absolutely free”, as it is “logically incomplete” (Australian Federal Constitutional Law (3rd ed, Law Book Co, Sydney, 1985), p 294). The question is: absolutely free from what? As the s 92, if taken at face value, would be translated into “an instrument of chaos”, the High Court sought to construct a theory to illuminate the meaning of freedom as guaranteed by the section. It is not intended in this chapter to embark upon a discussion of the “bewildering succession of phases and fashions” (J McMillan, G Evans and H Storey, Australia’s Constitution – Time for Change (Allen & Unwin Australia, 1983), p 306) which make up the history of s 92 as written by the judiciary. The interested reader should refer to M Coper, Freedom of Interstate Trade under the Australian Constitution (Butterworths, Sydney, 1983), Stellios, Zines’s The High Court and the Constitution (6th ed, Federation Press, Sydney, 2015), Ch 6. Zines (p 133) observed: [8.10]

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For about the first half century of the Constitution, much of the difference of opinion on the court and the difficulties that faced judges in dealing with the precedents were based on a very fundamental question: does the freedom of which s 92 speaks take its meaning from the philosophy of individualism and liberalism or from the economic theory of free trade?

Prominence was given to the theory of “individual rights” or “laissez faire” by the decision of the High Court and its affirmation by the Privy Council in the Bank Nationalisation Case (1948) 76 CLR 1, until Cole v Whitfield demolished that theory and caused a resurgence of the “free trade” theory.

Bank Nationalisation Case [8.20] Commonwealth v Bank of New South Wales (Bank Nationalisation Case) (1949) 79 CLR 497 at 639–641 (PC) Privy Council (per Lord Porter): 639 It is generally recognised that the expression “free” in s 92, though emphasised by the accompanying “absolutely”, yet must receive some qualification. It was, indeed, common ground in the present case that the conception of freedom of trade commerce and intercourse in a community regulated by law presupposes some degree of restriction upon the individual. As long ago as 1916 in Duncan v State of Queensland (1916) 22 CLR 556 at 573, Sir Samuel Griffith CJ said: “But the word ‘free’ does not mean extra legem, any more than freedom means anarchy. We boast of being an absolutely free people, but that does not mean that we are not subject to law.” And through all the subsequent cases in which s 92 has been discussed, the problem has been to define the qualification of that which in the Constitution is left unqualified. In this labyrinth there is no golden thread. But it seems that two general propositions may be accepted: (1) that regulation of trade commerce and intercourse among the States is compatible with its absolute freedom and (2) that s 92 is violated only when a legislative or executive act operates to restrict such trade commerce and intercourse directly and immediately as distinct from creating some indirect or consequential impediment which may fairly be regarded as remote. In the application of these general propositions, in determining whether an enactment is regulatory or something more, or whether a restriction is direct or only remote or incidental, there cannot fail to be differences of opinion. The problem to be solved will often be not so much legal as political, social or economic. Yet it must be solved by a court of law. For where the dispute is, as here, not only between Commonwealth and citizen but between 640 Commonwealth and intervening States on the one hand and citizens and States on the other, it is only the Court that can decide the issue. It is vain to invoke the voice of Parliament. Difficult as the application of these general propositions must be in the infinite variety of situations that in peace or in war confront a nation, it appears to their Lordships that this further guidance may be given. In the recent case of Australian National Airways Pty Ltd v The Commonwealth ((1945) 71 CLR 29) the learned Chief Justice used these words (1945) 71 CLR 29 at 61): “I venture to repeat what I said in the former case [viz Milk Board (NSW) v Metropolitan Cream Pty Ltd (1939) 62 CLR 116]: One proposition which I regard as established is that simple legislative prohibition (Federal or State), as distinct from regulation, of inter-State trade and commerce is invalid. Further, a law which is directed against inter-State trade and commerce is invalid. Such a law does not regulate such trade, it merely prevents it. But a law prescribing rules as to the manner in which trade (including transport) is to be conducted is not a mere prohibition and may be valid in its application to inter-State trade, notwithstanding s 92.” With this statement which both repeats the general proposition and precisely states that simple prohibition is not regulation their Lordships agree. And it is, as they think, a test which must have led the Chief Justice to a different conclusion in this case had he decided that the business of banking was within the ambit of s 92. They do not doubt that it led him to a correct decision in the Airways Case ((1945) 71 CLR 29). There he said ((1945) 71 CLR 29 at 61): “In the present case the Act is directed against all competition with the inter-State services of the Commission. The exclusion of other services is based simply upon the fact that the competing services are themselves inter-State services. … The exclusion of competition with the Commission is not a system 654

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Bank Nationalisation Case cont. of regulation and is, in my opinion, a violation of s 92. …” Mutatis mutandis, these words may be applied to the Act now impugned, for it is an irrelevant factor that the prohibition prohibits inter-State and intra-State activities at the same time. Yet about this, as about every other proposition in this field, a reservation must be made. For their Lordships do not intend to lay it down that in no circumstances could the exclusion of competition so as to create a monopoly either in a State or Commonwealth agency or in some other body be justified. Every case must be 641 judged on its own facts and in its own setting of time and circumstance, and it may be that in regard to some economic activities and at some stage of social development it might be maintained that prohibition with a view to State monopoly was the only practical and reasonable manner of regulation and that inter-State trade commerce and intercourse thus prohibited and thus monopolized remained absolutely free.

A STATE OF UTTER CONFUSION [8.30] The state of confusion into which the High Court had descended by the early 1980s

concerning the interpretation of s 92 is best epitomised by Uebergang v Australian Wheat Board (1982) 145 CLR 266. The issue there was whether a monopoly in a particular trade could be effected without contravening s 92. The impugned legislation of the Commonwealth and the States provided for a nationwide compulsory scheme for the marketing of wheat in order to stabilise and equalise prices and returns to wheat growers. The legislation created an Australian Wheat Board and provided for the compulsory acquisition of wheat by the Board. Any dealing with wheat without the Board’s consent was prohibited. The Board, in consequence, had a monopoly over the marketing of wheat, to the exclusion of private trading. The legislation purported to apply to all dealings in wheat throughout Australia and made no exception for interstate trade in wheat. Uebergang (a New South Wales wheat grower and the first plaintiff) had contracted to sell wheat to a manufacturer of poultry feed in Queensland (the second plaintiff). The wheat which was harvested and stored by Uebergang pending delivery to the manufacturer was, by notices published by the Australian Wheat Board, required to be delivered to the Board. Hence, the challenge to the legislation. Uebergang highlighted the division of judicial opinion on the operation and underlying rationale of s 92. The High Court had (by a majority of 3:2) two years earlier, in Clark King v Australian Wheat Board (1978) 140 CLR 120, upheld the validity of a similar wheat scheme and said that it did not infringe s 92. Clark King was clearly not regarded as authoritative or “binding” as there was no ratio decidendi common to the majority of the court (Mason, Jacobs and Murphy JJ) which had upheld the legislation. Clark King had also gone contrary to the trend of judicial decisions in a number of cases, especially the Bank Nationalisation Case (1949) 79 CLR 497 and the ANA Case (1945) 71 CLR 29. In both those cases attempts by the Commonwealth to nationalise Australian private trading banks and Australian private airline companies respectively were invalidated as being contrary to s 92. Two of the majority justices in Clark King (Mason and Jacobs JJ) derived support from a suggestion of the Privy Council in the Bank Nationalisation Case that “at some stage of social development it might be maintained that prohibition with a view to State monopoly was the only practical and reasonable manner of regulation”: see Clark King at 193. Barwick CJ, who stated that he was not bound by Clark King, regarded s 92 as protecting the individual’s participation in interstate trade, commerce and intercourse. The accommodation of the concept of freedom with restraints in a civilised and ordered society – the major problem arising from s 92 – was effected by allowing as valid a law truly “regulatory” in nature. “[A] regulatory law properly accepted as such is an assertion or [8.30]

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demonstration of that freedom rather than a denial or a qualification of it” (at 281). Regulatory laws were basically an extrapolation from the guaranteed freedom. He affirmed his views, stated in Clark King, that it could never be established that the only way to regulate interstate trade, commerce and intercourse was to deny the individual any participation in such trade, commerce and intercourse. In Uebergang Barwick CJ said (at 285): “[I]t would be better now to decide outright and unequivocally that the total prohibition or denial of the participation of the individual in interstate trade, commerce or intercourse necessarily contravenes the constitutional guarantee of the freedom of such trade, commerce and intercourse.” To Barwick CJ, s 92 posed “no ambiguity” (at 294). Taking the view that the only public interest served by s 92 was the paramount concern that trade, commerce and intercourse, including such trade, commerce and intercourse as carried on by individuals, should remain absolutely free, he concluded that the scheme was invalid and stated that the majority decision in Clark King should be overruled (at 295). Murphy J said that s 92 should not be regarded as entrenching 19th century notions of laissez faire, and added (at 309): “Regrettably economic and social ideas adopted by society in one era are often persisted with by judges long after they have been discarded by the rest of society.” Murphy J reiterated his thesis, which he had first stated in Buck v Bavone (1976) 135 CLR 110 and other cases, that s 92 was concerned with only fiscal burdens on interstate trade (at 307): “Section 92 is only concerned with customs duties and other discriminatory fiscal imposts and guarantees that trade, commerce and intercourse among the States shall be absolutely free from them.” Murphy J derived support for his thesis from the location of s 92 among other constitutional provisions concerning fiscal matters. According to him, non-fiscal State legislation which purported to interfere with interstate trade and commerce could be overcome through the interplay of ss 51(i) and 109 of the Commonwealth Constitution. Murphy J preferred the courts to adopt a low-profile role in economic areas. “The adoption by the court of a super-legislative role in relation to the national economy,” he said, “is inconsistent with the separation of powers between the legislature and the judiciary” (at 309). Murphy J’s preference for a restrictive reading of s 92 could perhaps be explained by his remark that: “The misinterpretation and misapplication of s 92 has undermined and destroyed much social legislation” (at 308). Murphy J’s thesis conflicts with the then prevailing view of the Privy Council in the Bank Nationalisation Case. Murphy J pointed to the extracurial repentance by Lord Wright, who (as Lord Wright MR) had delivered the Privy Council’s judgment in James v Commonwealth [1936] AC 578, who subsequently had said (“Section 92 – A Problem Piece” (1954) 1 Sydney Law Review 145 at 157): [s] 92 … is so limited that it cannot affect the general law, except on the narrow topic of fiscal affairs. Its scope is exhausted when it has excluded any operation of a fiscal character, it does not extend to operations which are not of a fiscal character … The idea of s 92 as a power in the air brooding and ready in the name of freedom to crush and destroy social and industrial or political experiments in Australian life ought, I think, to be exploded. In truth, as I said, s 92 is both pedestrian and humble, though very essential from the point of view of the founders of the Constitution who wished to establish internal inter-state free trade in fiscal matters for all time.

Given the non-acceptance of the “extreme” views of Barwick CJ and Murphy J, one would have thought that the remaining High Court judges could have arrived at a consensus as to the proper test to be applied in the operation of s 92. Even on this score, however, the High Court was deeply divided. Gibbs and Wilson JJ said that the court in its application of s 92 must do its best to preserve a balance between competing interests, a balance which favoured freedom for the individual citizen “in the absence of compelling considerations to the contrary” (at 300). They did not regard the reservation of the Privy Council in the Bank Nationalisation 656

[8.30]

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case as having no contemporary relevance (at 301). After noting that that reservation was expressly made with respect to prohibition with a view to monopoly, Gibbs and Wilson JJ said (at 301): Therefore what must first be shown in order to establish validity is that a monopoly covering both intrastate and interstate trade is the only practical and reasonable course open in present circumstances. The test remains a most stringent one, not likely to be satisfied except in exceptional circumstances. If that test is satisfied, it is still necessary for the court to consider whether the interstate trade, so regulated is “absolutely free” within the meaning of s 92.

Stephen and Mason JJ, on the other hand, adopted the following formula (at 306): [T]he criterion of permissible regulation of interstate trade is that the legislation should be no more restrictive than is reasonable in all the circumstances, due regard being had to the public interest.

Aickin J disagreed with the formula proposed by Stephen and Mason JJ. However, he was not prepared to say that there could never be such a situation as postulated by the Privy Council in their reservation in the Bank Nationalisation Case. The circumstances in which the description might be answered were, in his view, “both rare and exceptional”. Barwick CJ, as an alternative, expressed his support for the formula stated by Gibbs and Wilson JJ. Murphy J, on the other hand, supported the approach adopted by Stephen and Mason JJ (also as an alternative to his “fiscal” conception of s 92). The High Court (excepting Barwick CJ and Murphy J) held that it was inappropriate, in respect of the proceedings before them, to determine the validity of the impugned legislation. The court was of the view that there might be facts whose existence was relevant to the validity of the legislation and that those facts were not to be determined solely upon material within judicial knowledge. The smorgasbord of judicial opinions in Uebergang was said to “yield the disturbing conclusion that at the present juncture the High Court of Australia has in its whole history never been so remote from achieving consensus on the meaning and on the scope of application of s 92 of the Commonwealth Constitution” ((1981) 55 Australian Law Journal 60–61). The litigation in Uebergang was ultimately not further proceeded with.

RESURGENCE OF THE FREE TRADE THEORY Cole v Whitfield [8.40] Cole v Whitfield (1988) 165 CLR 360 at 383–410 [The respondents were charged with the possession of undersize crayfish contrary to the Tasmanian Sea Fisheries Regulations. The crayfish which were brought in from South Australia were intended to be sold to markets on the mainland and overseas. They were also of a size greater than the prescribed minimum size in South Australia. However, they did not meet the minimum size requirements prescribed by the Tasmanian Regulations. The High Court came to the unanimous conclusion that s 92 had not been infringed.] Mason CJ, Wilson, Brennan, Deane, Dawson, Toohey and Gaudron JJ: 383 No provision of the Constitution has been the source of greater 384 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, [8.40]

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Cole v Whitfield cont. 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 twenty-five 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 Stabilization 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 ((1986) 161 CLR 556 at 616), Deane J observed with reference to the decisions of the Judicial Committee of the Privy Council and of this Court on s 92 that: 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. 385 His Honour, after reviewing and analysing the judgments in Uebergang, went on to say ((1986) 161 CLR 556 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 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 differences in the external tariffs which were imposed by the several Australian colonies inevitably resulted in the imposition of restrictions on the import and export of goods between them. That was foreseen by a report of the Privy Council Committee for Trade and Plantations in 1849 which recommended that “there should be one tariff common to them all, so that goods might be carried from the one into the other with the same absolute freedom as between any two adjacent counties in England”: Report of the Privy Council 386 for Trade and Plantations, British Parliamentary Papers (1849), vol 35, 33, p 44. However, after the late 1850s, when David Syme, founder of the Melbourne Age, began his campaign for tariff protection in Victoria, protection became an important issue in 658

[8.40]

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Cole v Whitfield cont. Australian politics. In the last three decades of the nineteenth century, parties supporting either free trade or protection dominated the colonial Parliaments: Samuelson, Hancock and Wallace, Economics (2nd Aust ed, 1975), p 769. To create a free trade area embracing the Australian colonies it was necessary for agreement to be reached about a uniform external tariff. Differing fiscal policies represented a formidable barrier to such agreement. Until 1873 there was another obstacle to the creation of a free trade area in the form of an Imperial prohibition against the imposition by any colony of duties “upon imports from ‘any particular country or place’ which were not equally imposed on imports from ‘all other countries and places whatsoever’”: Quick & Garran, Annotated Constitution of the Australian Commonwealth (1901), p 104 (“Quick & Garran”). The prohibition, which prevented preference to intercolonial trade, gave effect to the general policy adopted by the Imperial Government that tariffs be non-discriminatory. The policy was not opposed, however, to the creation of an Australian free trade area provided that any tariff upon entry into the area was non-discriminatory. By the Australian Colonies Duties Act 1873 (IMP), the colonies were empowered to enter into reciprocal free trade arrangements. However, the diversity of their fiscal policies remained a stumbling block: see Quick & Garran, pp 104-106. In particular, the Victorian tariff appeared to have the purpose of protecting local industry, whereas the tariff of New South Wales, which favoured free trade, was fixed for the purpose of satisfying budgetary requirements: see Patterson, The Tariff in the Australian Colonies 1856–1900 (1968), pp 164–5. As the 1891 Report of the South Australian Royal Commission on Intercolonial Free Trade shows (p vi), “intercolonial free trade, on the basis of a uniform tariff”, was a commonly accepted ideal. Subsequently, the first report of a Victorian Board of Inquiry in 1894 expressed the belief “that the people of Victoria are practically unanimously in favour of free-trade between the colonies”, though the report described the factors which were then impeding intercolonial trade: border taxes, differential railway freights designed to secure trade for Victorian lines and ports, and stock taxes levied to keep out cattle from interstate: First Report of the Victorian Board of Inquiry (1894), pp 27-29. The report recommended that each colony be invited to join Victoria in a Customs Union: ibid, p 29. In its second report the Board noted popular support for both 387 protection of native industries and intercolonial free trade: Second Report of the Victorian Board of Inquiry (1895), p x. Notwithstanding this popular support, concrete proposals for the implementation of free trade between the separate Australian colonies languished outside the growing movement towards federation. In that movement, the problem of intercolonial free trade within a uniform external tariff was, from the outset, a central question and problem: the “lion in the path”, as Mr James Service (a former Premier of Victoria) described it in 1890, which federalists must either slay or be slain by (Quick & Garran, p 119). Professor J A La Nauze has traced the development of the debate which led to the framing of s 92, the provision which was to slay the lion, in his essay “A Little Bit of Lawyers’ Language: The History of “Absolutely Free” 1890–1900” in Martin ed, Essays in Australian Federation (1969), p 57 (“La Nauze, “Absolutely Free””). Before the 1891 Convention assembled, Parkes proposed to a preliminary meeting of New South Wales delegates a number of resolutions, the first of which read: That the trade and intercourse between the Federated Colonies, whether by means of land carriage or coastal navigation, shall be free from the payment of Customs duties, and from all restrictions whatsoever, except such regulations as may be necessary for the conduct of business. (Parkes, Fifty Years in the Making of Australian History (1892), vol II, p 359.) When the resolution was formally proposed to the Convention, its wording was changed: That the trade and intercourse between the Federated Colonies, whether by means of land carriage or coastal navigation, shall be absolutely free. (La Nauze, Absolutely Free, p 64 (quoting Convention Debates (Sydney, 1891), p 11).) Below, we trace the transition of this clause into s 92 of the Constitution. At this stage, we note that “intercourse” appeared in the words of the provision as a distinct and independent concept the freedom of which was guaranteed from the very beginning. It was not, as has sometimes been suggested: see, eg, per Dixon J, Bank of NSW v The Commonwealth (“the Banking Case”) at 381, added as some kind of afterthought to “trade” and “commerce”. As will be seen, it was the word “commerce” which was last added to complete the phrase “trade, commerce and intercourse” in the [8.40]

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Cole v Whitfield cont. section. The relevance of that for present purposes is that it precludes the approach that the content of the guarantee of freedom of interstate intercourse must be governed by the pre-existing content of a 388 guarantee of freedom of interstate trade and commerce into which it was introduced. The notions of absolutely free trade and commerce and absolutely free intercourse are quite distinct and neither the history of the clause nor the ordinary meaning of its words require that the content of the guarantee of freedom of trade and commerce be seen as governing or governed by the content of the guarantee of freedom of intercourse. We shall return to the topic of intercourse and the question of its relationship with trade and commerce later in these reasons. … 391 … [The court referred to the debates at the Conventions of 1891, 1897 and 1898 and said:] 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 392 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) 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 fifty 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 Garran, Prosper the Commonwealth (1958), p 415). Some thirty 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 393 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 dealings 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 660

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Cole v Whitfield cont. 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 authorize 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, ie in 394 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; [1968] AC 625 at 4–5 (CLR), 667 (AC)). Once this is accepted, as it must be, there is no reason in logic or commonsense for insisting on a strict correspondence between the freedom guaranteed to interstate trade and commerce and that guaranteed to interstate intercourse. 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 395 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 paragraph of the section to uniform duties of customs creates the impression that the provision is [8.40]

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Cole v Whitfield cont. directed to fiscal charges and burdens. This impression is reinforced by the context provided by the surrounding provisions, ss 89 – 91 and ss 93 – 95. 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. … 398 …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 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 77–78), 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 recognize 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 399 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 characterized 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 662

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Cole v Whitfield cont. 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. A majority of the Court (Barwick CJ, Stephen, Mason and Jacobs JJ) so held in North Eastern Dairy ((1975) 134 CLR 559 at 588–589, 602, 606–607, 622–623). And the more recent decisions proceed upon that footing. The Court 400 looks to the practical operation of the law in order to determine its validity. Once this is recognized, 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 interstate. 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). Despite the strength of the considerations supporting the view that the “trade and commerce” provision of s 92 is directed to interstate border duties and other burdens of a discriminatory kind, we would be reluctant to embrace it if a competing construction had attained the status of a settled interpretation of the section. In the interests of certainty, even in matters of constitutional interpretation, the Court does not readily discard or depart from settled principle: cf Bartter’s Farms ((1978) 139 CLR 499 at 510). As we have mentioned, the doctrine embodying the criterion of operation formula came closest to achieving that status. However, in the ultimate analysis the doctrine failed to command the acceptance of the Court for reasons which we shall state shortly. The doctrine is important, not merely by reason of the degree of acceptance that it attracted at one time, but also because in some respects it offered interstate trade more extensive protection than other interpretations of s 92 which have competed strongly for acceptance. The doctrine, which had its origins in the judgment of Dixon J in O Gilpin Ltd v Commissioner for Road Transport and Tramways (NSW) ((1935) 52 CLR 189 at 205–206), was expressed by Dixon CJ in Hospital Provident Fund ((1953) 87 CLR 1 at 17–18), and restated in later decisions such as Grannall v Marrickville Margarine Pty Ltd ((1955) 93 CLR 55 at 78), and Mansell v Beck ((1956) 95 CLR 550 at 564–565). The thrust of the criterion of operation was to make inapplicable to interstate trade, commerce and intercourse any law which “takes a 401 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 1 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. To counter this possibility the doctrine was expressed to extend to circuitous devices but this extension of the doctrine seems itself to have turned on the legal operation of the law. At any rate, no law has been held not to apply to [8.40]

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Cole v Whitfield cont. interstate trade on the ground that it burdened the trade by means of a circuitous device: see Miller v TCN Channel Nine ((1986) 161 CLR 556 at 575–576). 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 (1955) 93 CLR 55; Beal v Marrickville Margarine Pty Ltd (1966) 114 CLR 283) and importation of aircraft with which to engage in interstate air transportation (Reg v Anderson; Ex parte Ipec-Air Pty Ltd (1965) 113 CLR 177; Ansett Transport Industries (Operations) Pty Ltd v The Commonwealth (1977) 139 CLR 54) fell outside the constitutional protection on the ground that the relevant activities were not essential attributes of interstate trade. The same comment may be made about Damjanovic & Sons Pty Ltd v The Commonwealth ((1968) 117 CLR 390) where a tax on the keeping of hens, kept 402 for producing eggs for interstate trade in eggs, was not seen as a tax on an essential attribute of that trade notwithstanding that the criterion of operation of the law imposing the tax was the purpose of selling the eggs produced in trade which, in the particular case, was interstate trade. In each of these cases the legislation affected interstate trade in a substantial way, yet, because the effect was indirect or consequential, s 92 had no application. A similar result ensued in Mansell v Beck ((1956) 95 CLR 550) where the legislation prohibited the sale of a ticket in a foreign lottery and the acceptance of money in respect of the purchase of the ticket, again on the ground that the legislation did not select an attribute of interstate trade, commerce or intercourse as the basis of its operation: see the examination of these cases in Miller v TCN Channel Nine ((1986) 161 CLR 556 at 572–574, 622–625). Although the examples may be multiplied, there is no point in protracting the discussion except to refer to what Dixon CJ, McTiernan and Webb JJ had to say in Hughes and Vale Pty Ltd v New South Wales [No 2] ((1955) 93 CLR 127 at 162–163). The passage illustrates the complexities which so frequently arose in the endeavour to identify essential attributes and the difficulties encountered when legislation operating on a so-called incident of trade seriously affects 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. What we have said explains some of the reasons why 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. Finemores Transport Pty Ltd v New South Wales ((1978) 139 CLR 338) is a striking example. There s 84G of the Stamp Duties Act 1920 (NSW) imposed an ad valorem duty on the certification of registration of a motor vehicle calculated upon the value of the vehicle. It was a duty imposed without distinction or 403 discrimination on all those who registered motor vehicles, whether the vehicle was engaged or intended to be engaged in interstate trade or not. Yet the Court held that the duty could not be levied upon a certification of registration in respect of a vehicle used or intended to be used exclusively in the course of, or for the purpose of, interstate trade. The doctrine created protectionism in reverse. Both Mason J and Deane J have noted that s 92 had become in some circumstances a source of privileged and preferential treatment for that trade to the detriment of the local trade: Finemores Transport ((1978) 139 CLR 338 at 352); Miller v TCN Channel Nine ((1986) 161 CLR 556 at 618–619). At this point it is convenient to mention the contrast between the result reached in Finemores Transport and that reached in the road tax cases, of which Hughes and Vale [No 2] ((1955) 93 CLR 127) may be taken as the leading example. The contrast shows that the doctrine failed when it was applied to fiscal charges. It applied to the fiscal charge in Finemores Transport but it evoked the recognition of an 664

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Cole v Whitfield cont. exception for road taxes to which s 92 did not apply when the charge was fixed as reasonable compensation for the use of the highway and a contribution to the wear and tear which the vehicle might be expected to make. 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 217–219); 404 Samuels v Readers’ Digest Association Pty Ltd ((1969) 120 CLR 1, at pp 19–20); North Eastern Dairy ((1975) 134 CLR 559 at 614–615, 621–622); 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. … 407 … 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 408 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 why 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 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 characterization of the law as protectionist, a court will be justified in concluding that it nonetheless offends s 92. [8.40]

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Cole v Whitfield cont. 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 1; [1968] AC 625 at 5 (CLR), 667 (AC)). 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 409 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 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 410 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.

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Notes&Questions It is said that Cole v Whitfield establishes the following proposition (G Carney, “The Re-Interpretation of Section 92: The Decline of Free Enterprise & the Rise of Free Trade” (1991) 3 Bond Law Review 149 at 153): that s 92 prohibits the Commonwealth and the States from imposing burdens on interstate trade or commerce which (i) discriminate against that trade or commerce by

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conferring a competitive or market advantage on intrastate trade or commerce of the same kind and (ii) are protectionist in character.

Is (ii) redundant? What effect does the new approach based on the test of discriminatory protectionism have on the scope of the power of the Commonwealth and the States to regulate trade and commerce? 2.

Does the new approach reflect a triumph of “substance” over “form” in the interpretation of s 92 on the part of the High Court? Is this preference for “substance” over “form” reflected in the interpretation of other constitutional provisions?

3.

Is the test a composite test or does it require the two elements of discrimination and protectionism to be established separately? Michael Coper in his article “Section 92 of the Australian Constitution Since Cole v Whitfield”, in Lee & Winterton (eds), Australian Constitutional Perspectives (The Law Book Company, Ryde, 1992), pp 139-140 said: In the end, the phrase “discrimination in a protectionist sense” is a composite one, even if its two components may be thought to be analytically distinct. One can imagine a law that involves some differential treatment of interstate and intra-State trade and yet does not confer on the latter an economic advantage; moreover, the very expression “discrimination in a protectionist sense” implies that there is such a thing as discrimination in a non-protectionist sense. It is harder, though, to imagine a protectionist law that is not discriminatory, unless by definitional fiat we confine the concept of discrimination to discrimination on the face of the law; once we extend the concept to include discrimination in practical effect, it has every appearance of merging with the concept of protectionism.

See also PH Lane, “The Present Test for Invalidity under section 92 of the Constitution” (1988) 62 Australian Law Journal 604) where the author said at 607: it is possible to have a protectionist law (here not used in the traditional interstate rivalry sense) that is not discriminatory. New South Wales might seek to protect its dairy industry against substitute products by restricting margarine sales, whether the margarine comes from interstate or intrastate sources; or New South Wales might seek to protect its railways against competition from road hauliers, including competition in interstate trade.

4.

Do you think that the intentions of the framers of the Constitution should be a dominant factor in constitutional interpretation?

5.

Sir Anthony Mason played an influential role in the writing of the unanimous judgment: see G Brennan, “A Tribute to Sir Anthony” in C Saunders (ed), Courts of Final Jurisdiction: The Mason Court in Australia (Federation Press, Sydney, 1996), pp 10-14. Sir Anthony Mason regarded this decision as the greatest achievement of his chief justiceship: “In Conversation: An Interview with Sir Anthony Mason” (1996) 17 Singapore Law Review 3 at 6. Sir Garfield Barwick, on the other hand, considered it “terrible tosh”: Bar News (NSW Bar Association), Summer 1989, 9 at 17. In evaluating the Court’s approach in Cole v Whitfield, Puig argues that the Court has adopted an “ahistorical” approach which in focusing on “discriminatory protectionism in preference to a non-discrimination test of invalidity was contrary to the federal purpose of s 92” (see G Villalta Puig, The High Court of Australia and Section 92 of the Australian Constitution – A Critique of the Cole v Whitfield Test (Lawbook, Sydney, 2008), p 97). The decision in Cole v Whitfield was arrived at by a unanimous High Court. However, it soon became apparent that the new test of discriminatory protectionism, while it appears to be simple and straightforward, would give rise to difficulty in application. A

6.

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4:3 decision of the High Court in Bath v Alston (1988) 165 CLR 411 rendered a month after Cole v Whitfield provides a neat illustration. 7.

See Carney (1991); A Simpson, “Grounding the High Court’s Modern Section 92 Jurisprudence: The Case for Improper Purpose as the Touchstone” (2005) 33 Federal Law Review 445.

Bath v Alston Holdings Pty Ltd [8.60] Bath v Alston Holdings Pty Ltd (1988) 165 CLR 411 at 424–434 [The Business Franchise (Tobacco) Act 1974 (Vic) required a person who carried on the business of selling tobacco to obtain a licence. Section 10(1)(c) and (d) imposed, in the case of a retail tobacconist’s licence, a flat fee ($10 and $50 for a monthly and an indefinite licence respectively) “together with an amount equal to 25% of the value of the tobacco sold by the applicant in the course of tobacco retailing in the relevant period (other than tobacco purchased in Victoria from the holder of a wholesale tobacco merchant’s licence)”. The Act also provided for the licensing of wholesalers, with the fee calculated on the actual or imputed sales of tobacco products in Victoria during the relevant preceding period. Consequently, those products would be excluded from the products whose sales were taken into account in the assessment of tax at the retail level. The defendant (Alston Holdings Pty Ltd), who carried on business as a tobacco retailer in Victoria, imported tobacco from Queensland and sold it in Victoria. The Commissioner for Business Franchises sought to restrain the defendant from continuing to sell without a licence. The defendant invoked s 92 to challenge the validity of the relevant provisions of the Act. The High Court held in a 4:3 decision that the Act had imposed a discriminatory burden of a protectionist nature on interstate trade.] Mason CJ, Brennan, Deane and Gaudron JJ: 424 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 tobacco purchased in Victoria and tobacco purchased outside Victoria; a 425 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% 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% 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 668

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Bath v Alston Holdings Pty Ltd cont. be cheaper in some other Australian market place for a variety of possible reasons, eg, 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 426 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 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 427 reference to the value of, his actual or imputed purchases of products in any State other than Victoria. It may be suggested that the effect of our conclusion that the method of calculation of the retailer’s licence fee infringes s 92 of the Constitution is to divert s 92 from its intended function as a guarantee of the freedom of interstate trade and commerce from the barriers and burdens of protectionist laws and to permit the section to emerge again as a cause of senseless business or administrative artificiality and inefficiency and as a source of preference of interstate trade and commerce. Such a suggestion would be ill-founded. The out of State wholesaler is liable to taxes imposed by the State in which he carried on business in the same way as the Victorian wholesaler is subject to the taxes imposed by Victoria. The taxes imposed by the Act escape invalidity as excise duties only by reason of acceptance of their character as a licence fee as distinct from a tax on goods. Seen as a licence fee, the taxes imposed upon wholesalers are part of the costs of a Victorian wholesaler in carrying on his business. He will enjoy a competitive advantage or disadvantage in relation to an out of State wholesaler according to the comparative level of taxes and other costs which he must bear in carrying on his business. The fact that taxes paid by a wholesaler in one State are higher than the taxes paid by a wholesaler in a second State may provide an inducement for the first State to protect local goods and local wholesalers by the imposition of an “equalizing” tax upon its retailers in respect of their purchases of products from that other State. The most that such notions of economic equalization can do, however, is to provide some local justification for the imposition of a protectionist tax in respect of interstate goods at the later retail stage of distribution. They do not alter the character of the tax as such or [8.60]

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Bath v Alston Holdings Pty Ltd cont. remove it from the ambit of s 92. Indeed, to hold that a law which protects local goods by imposing a discriminatory tax on interstate goods at the retail level is consistent with s 92 because the law equalizes in favour of the local goods an advantage which the interstate goods enjoy in their State of origin in the course of manufacture or distribution would be to disregard the critical constitutional purpose which the section is designed to serve. Nor is the protectionist character of the ad valorem tax on retailers calculated by reference to their interstate purchases removed by treating it as “equivalent” to the ad valorem tax imposed upon wholesalers in respect of their sales of local goods or by saying that both taxes are properly to be seen as being, “in substance”, taxes on goods. The term “tax on goods” is a generic one which is used to describe a wide variety of different taxes imposed on a person by reference to some activity or relationship involving 428 “goods”. The term is used metaphorically. A tax cannot literally be imposed on goods: persons not goods pay taxes. A common characteristic of a tax on goods is that it is likely to be regarded as a cost of some step in the manufacture, production or distribution of goods with the result that it is absorbed in their subsequent price. Excise duties, such as a manufacturing impost or a sales tax, and import or border duties are the obvious examples of such a tax. As a descriptive term, the phrase “tax on goods” may be helpful to explain, in the context of notions of economic equivalence, the local reasons for the imposition of a protectionist tax such as an ad valorem border duty or a discriminatory ad valorem tax on the retail sale of imported goods. Thus, a possible local rationalisation of the imposition of particular intercolonial ad valorem border duties in pre-federation days might have been that the particular duties did no more than place intercolonial goods on an equivalent footing, in so far as local taxes were concerned, with local goods by subjecting the intercolonial goods to a border impost equal to some other tax on goods to which local goods of that kind were subjected at an earlier stage of manufacture, production or distribution than that at which the intercolonial goods first entered the local chain of distribution. Such an explanation or attempted justification would not, however, have deprived a border duty of its protectionist character. To the contrary, it would have emphasized the fact that such a duty was protectionist by explaining the rationale of the protection. Plainly enough, in the application of s 92, the description “tax on goods” can be a cause of obscurity rather than of clarification if it covers a failure to identify the precise character of the impugned tax. Thus, it provides no answer to the question whether, for the purposes of s 92, a particular tax is properly to be characterized 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 429 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. As Barton J commented in Fox v Robbins ((1909) 8 CLR 115 at 123): By burdens of this kind and that, whether under the name of licence fees or under any other name, the operation of interstate free trade could be so hampered and restricted as to reduce the Constitution in that regard to mere futility. … There is no difference in substance or effect in its bearing on interstate commerce between a burden such as this and a duty collected at 670

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Bath v Alston Holdings Pty Ltd cont. the borders or the ports of one State on the products of another. In either case that commerce is restricted which the Constitution says shall be free; and in either case the disability may be made so great as to render the product unsaleable, and therefore virtually to prohibit its introduction. A tax upon retailers in respect of their trading in goods may burden their trade in interstate goods consistently with the guarantee of s 92 only if it applies equally to the interstate and local goods which the retailers sell; it cannot lawfully discriminate between them so as to protect the local goods. Again to quote the words of Barton J in Fox v Robbins ((1909) 8 CLR 115 at 124): When the interstate transit is over and they have become part of the mass of property within the State, any goods may be taxed, no matter whence they have come. But they must be taxed alike with all other such goods in the State. The tax must be general, and laid equally on all goods of the kind to be taxed, whether their State of origin be the taxing State or another. It would have provided no answer in Fox v Robbins to have demonstrated that the price of local wine to the retailer reflected an equal or higher burden of some local tax which had been imposed on local manufacturers or wholesalers at an earlier time. Similarly, the 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 430 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, 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. Wilson, Dawson and Toohey JJ: 431 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 (Ante, p 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 432 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 why 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. … 433 …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 [8.60]

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Bath v Alston Holdings Pty Ltd cont. 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 434 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.

Notes&Questions

[8.70]

1.

How significant is the difference between the majority and minority judgments? See Castlemaine Tooheys Ltd v South Australia (1990) 169 CLR 436 at 468 where Mason CJ, Brennan, Deane, Dawson and Toohey JJ referred to Bath v Alston and said: “The difference … in that case flowed more from disagreement about the appropriate perspective from which the particular legislative provisions should be viewed than from any disagreement about principle.”

2.

For a critical comment on Cole v Whitfield and Bath v Alston see the casenote by C Howard in (1988) 16 Melbourne University Law Review 852.

Castlemaine Tooheys v South Australia [8.80] Castlemaine Tooheys Ltd v South Australia (1990) 169 CLR 436 at 464–480 [The Bond brewing companies brewed beer in Queensland, New South Wales and Western Australia. They claimed that certain provisions of the Beverage Container Act 1975 (SA), in particular as amended by the Beverage Container Act Amendment Act 1986 (SA), and of the regulations made under the 1975 Act in practical effect discriminated against the interstate beer of the Bond brewing companies in favour of their competitors’ beer, most of which was produced in South Australia and was sold in refillable bottles. The beer of the Bond brewing companies was sold in non-refillable bottles. The 1975 Act required a mandatory deposit of 5 cents per bottle which was refundable upon the return. By regulation an exemption from the requirement of a mandatory deposit had been applied to refillable bottles. It was noted by the court that, despite the disadvantage arising from the 5 cents deposit, there were other advantages flowing from the use of non-refillable bottles and that the exemption did not “place the Bond brewing companies at a discernible competitive disadvantage so long as the amount of the deposit differential did not exceed 5 cents”. In 1986, as a result of an advertising campaign, the Bond brewing companies increased their share of the market for packaged beer in South Australia at the expense of the principal South Australian brewer. The 1986 Act effected substantial amendments to the 1975 Act. The 1986 Act, together with the new regulations, disadvantaged the Bond brewing companies in two respects. A non-refillable bottle was subject to a refund of 15 cents whereas a refillable bottle was subject to a refund of 4 cents. It was, significantly, conceded by the defendant that “a refund of 6 cents per non-refillable 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” (at 462). Secondly, retailers of beer in non-refillable bottles were obliged to accept delivery of such bottles and pay the refund of 15 cents per bottle. Retailers of beer in refillable bottles were exempted from this obligation. Furthermore, a customer could return a refillable bottle to a collection depot and obtain a refund from the depot. In consequence, retailers were 672

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Castlemaine Tooheys v South Australia cont. disinclined to stock a beer when the volume of sales of a particular brand was not high as they would be required to accept the return of a bottle even though the customer might have bought it elsewhere. Thus there was no limit to the amount of refund the retailers would have to pay. A special case was stated for the opinion of the Full Court of the High Court. The court unanimously held that the South Australian legislation violated s 92.] Mason CJ, Brennan, Deane, Dawson and Toohey JJ: 464 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% 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 non-refillable 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 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. The defendant contends that a return system, based on deposits on beverage containers, is a means of controlling litter. Although it is not the only means, the results in New South Wales and South 465 Australia indicate that it is at least as good as other means. And it is a system which was well known in South Australia in relation to beer and soft drink containers prior to the introduction of the 1975 Act. The defendant’s case, so far as it rests on conservation of resources, turns on certain statements in the special case relating to the use of refillable bottles as against non-refillable bottles. Moreover, the use, return and refilling of the former result not only in conservation of energy and resources but also in a proportionate reduction in the release of carbon dioxide from the burning of natural gas used in glass production, transport and distribution, as long as they are filled and re-used on at least three occasions. Natural gas in South Australia is a finite resource. As at October 1986 the Executive Government of South Australia estimated that the then gas reserves in the State were only sufficient to supply the State (at then current consumption levels) until mid-1991. As at March 1989 the Executive Government estimated that current gas reserves in South Australia were only sufficient to supply the State (at then current consumption levels) until the end of 1994. … 471 … [After analysing the approach taken by the United States Supreme Court, they 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 472 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 [8.80]

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Castlemaine Tooheys v South Australia cont. 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 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 473 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 130–131, 172, 232–233, 259–261); Richardson v Forestry Commission ((1988) 164 CLR 261 at 292, 295–296, 303, 311–312, 326, 336, 344–346). See also Herald and Weekly Times Ltd v 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 1 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 had rational and legitimate grounds for apprehending that the sale of beer in non-refillable 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 674

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Castlemaine Tooheys v South Australia cont. 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 474 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 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 475 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 non-refillable 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 wine-based 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 ((1978) 437 US 117 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. [8.80]

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Castlemaine Tooheys v South Australia cont. 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 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 476 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% and 0.12% of the total energy consumption in the State. If all beer bottles manufactured in 477 South Australia were non-refillable bottles, then natural gas consumption in the State would increase by about 0.24%. 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. 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. 676

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Castlemaine Tooheys v South Australia cont. 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. Gaudron and McHugh JJ: 478 The facts and relevant legislative provisions are set out in the joint judgment of Mason CJ, Brennan, Deane, Dawson and Toohey JJ. It is clear from that judgment that the practical effect of the Beverage Container Act 1975 (SA), the Beverage Container Act Amendment Act 1986 (SA), the Beverage Container Regulations 1976 (SA) and the notice under s 5B(2) of the Beverage Container Act 1975 as amended (together referred to as “the legislative regime for beverage containers”) is 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: Cole v Whitfield ((1988) 165 CLR 360). In Street v Queensland Bar Association (1989) 168 CLR 461 at 569–574, Gaudron J made reference to the general considerations which, statute aside, result in particular treatment being identified as discriminatory. By reference to those considerations it is possible to identify the general features of a discriminatory law. A law is discriminatory if it operates by reference to a distinction which some overriding law decrees to be irrelevant or by reference to a distinction which is in fact irrelevant to the object to be attained; a law is discriminatory 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 that distinction. A law is also discriminatory 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. So far as concerns the present case, the legislative regime for beverage containers operates by reference to a distinction between refillable and non-refillable beer bottles. Although the arguments of the parties were structured somewhat differently from the way in which we have expressed the considerations which indicate that a 479 law is discriminatory, in substance the defendant sought to justify that distinction as relevant to two objectives, namely, the conservation of energy resources and the amelioration of litter problems. To justify a distinction as relevant to an objective it is necessary to show that the distinction made is a real distinction. That involves the identification of a difference or differences explaining the distinction. It also involves showing a connexion between the distinction and the objective such that the object is reasonably capable of being seen as likely to be achieved – other than to an extent that is trifling or insignificant – by different treatment based on that distinction. The first step in establishing that the distinction between refillable and non-refillable beer bottles is a relevant distinction supported by the objectives of conserving energy and of ameliorating litter problems is to show, in the case of each objective, that the problems referable to non-refillable beer bottles are greater than those referable to refillable beer bottles. In their judgment Mason CJ, Brennan, Deane, Dawson and Toohey JJ point out that the facts relevant to energy conservation are not only meagre, but such as to suggest that increased sales of the first three plaintiffs’ beer in South Australia might actually assist the conservation of South Australia’s energy resources. Even if the facts, meagre though they be, are accepted as establishing that non-refillable beer bottles, in some way that is different from refillable beer bottles, add to the general problem of energy conservation in the State of South Australia, the conclusion is inevitable that the different treatment of refillable and non-refillable containers in a law which deals only with beverage containers and which is not part of a general legislative scheme directed to the conservation of the State’s energy resources is unlikely to result in an amelioration of that general problem other than to a trifling extent. If, on the other hand, it be suggested that the focus of consideration is the general problem of energy conservation viewed from a national or a global perspective, the legislative regime for beverage containers must be viewed as likely to have an even less significant impact. The facts as to the litter problems referable to non-refillable beer bottles are also meagre. The special case reveals that “[l]itter surveys in South Australia do not distinguish between refillable and non-refillable beer bottles” and that “[t]he only possibly relevant differences between a refillable and [8.80]

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Castlemaine Tooheys v South Australia cont. non-refillable bottle [are] that the latter are marked ‘non-refillable’ and that such bottles are not usual in the South Australian market.” The special case further acknowledges that there is no evidence that these differences 480 “would have any effect on the return rate for non-refillable bottles” if the deposit for such bottles were to be set at the same rate as that for refillable bottles. Against that background the defendant says that the stated differences “may have an effect in the short term”, but agrees that the “period of any such effect would be less than 1 year”. On the other hand, the plaintiffs assert their belief that a 4 cent deposit (that being the deposit fixed for refillable bottles) would be “immediately effective to ensure the return of non-refillable bottles at the same rate as refillable bottles”. The facts, such as they are, fall short of establishing that the litter problems referable to non-refillable bottles differ from those referable to refillable bottles. Accordingly, there is no basis upon which it can be held that the distinction is relevant to the objective of litter control. The questions posed in the joint judgment of Mason CJ, Brennan, Deane, Dawson and Toohey JJ, namely, whether a law is appropriate and adapted to an objective and whether any burden imposed on interstate trade is incidental and not disproportionate to the achievement of that objective, will often sufficiently reveal that the law is discriminatory in a protectionist sense. However, the 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.

[8.90]

Notes&Questions

In considering the application of s 92, account must be taken of the power of a State legislature to legislate for the well-being of the people of that State. The High Court said (at 472): [I]nterstate 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.

Does the “appropriate and adapted” formula require the court to involve itself in matters of a political nature? Does Castlemaine Tooheys represent a return to the pre-Cole v Whitfield concept of “regulatory” laws?

Barley Marketing Board (NSW) v Norman [8.100] Barley Marketing Board (NSW) v Norman (1990) 171 CLR 182 at 200–205 [The Governor of New South Wales was empowered by s 56(1) of the Marketing of Primary Products Act 1983 (NSW) to declare, by proclamation, that a commodity be divested from the producers thereof and become the property of a marketing board. According to s 56(4), the commodity would be vested in the marketing board freed from all mortgages, liens, pledges, interests and trusts affecting it, with the rights and interests of every person in the commodity converted into a claim for payment for the commodity. Section 58 rendered every contract, whether made before or after the Act, so far as it related to the sale of a commodity, void. A proclamation was made by the Governor on 20 November 1985, pursuant to s 56 of the Act which declared that “upon any of the commodity barley coming into existence within the State of New South Wales between 1st December 1985, and 30th November 678

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Barley Marketing Board (NSW) v Norman cont. 1995, it [should] become absolutely vested in and be the property of the Barley Marketing Board for the State of New South Wales”. The first and second defendants, who grew barley in New South Wales, contracted to sell to the third defendant, a maltster in Victoria. In a case stated by the Chief Justice, the High Court found that ss 56 and 58 of the Marketing of Primary Products Act 1983 (NSW) and a proclamation made under the Act were not contrary to s 92 of the Constitution.] Mason CJ, Brennan, Deane, Dawson, Toohey, Gaudron and McHugh JJ: 200 Marketing schemes have often come into conflict with s 92. The potential for that conflict arose whenever a marketing scheme touched interstate trade and commerce. Thus an attempt by a State to impose restrictive quotas on sales of South Australian dried fruits in Australia, which drew no distinction between interstate and intrastate sales, was held to be invalid because it restricted interstate sales: James v South Australia ((1927) 40 CLR 1). A joint Commonwealth and State attempt to achieve the same result was likewise held to be invalid: James v Commonwealth ([1936] AC 578). The same fate attended endeavours by a State to set up marketing schemes by vesting in a board the whole of a commodity produced or grown in the State: James v Cowan ([1932] AC 542); the Peanut Case. These schemes failed because they compelled the producer to dispose of his product to the authority and it acquired that product as and when the product came into existence in order to ensure that the producer should not exercise his former freedom of selling the product by an ordinary transaction whether in interstate or intrastate trade: see the discussion by Dixon J in the Peanut Case ((1933) 48 CLR 266 at 286–288). As his Honour noted ((1933) 48 CLR 266 at 286–287), according to received doctrine at that time: Restraints and impediments are forbidden although they do not discriminate between inter-State and intra-State commerce, but affect trade, commerce and intercourse uniformly. Later attempts by a State to compel persons importing fish from interstate to sell through a market or board were held not to apply to the interstate trade in fish: see Cam & Sons Pty Ltd v Chief Secretary (NSW) ((1951) 84 CLR 442); Fish Board v Paradiso ((1956) 95 CLR 443). The introduction into marketing legislation of a provision excepting interstate trade from its operation or of a reading down provision proved to be a way around the problem exposed by the earlier cases: see Matthews v Chicory Marketing Board (Vic) ((1938) 60 CLR 263). But the consequence was that the validity of marketing schemes was achieved at the price of leaving the producer free to dispose of his or her product interstate. The necessity of conceding this 201 freedom to the producer made it extremely difficult to set up an effective marketing scheme in relation to a commodity freely traded interstate, at least a marketing scheme under which the entire commodity produced in the State is vested in the authority: see Wilcox Mofflin Ltd v New South Wales (1952) 85 CLR 488. The decisions to which we have referred 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. That view of s 92 prevailed until it was displaced by Cole v Whitfield where it was pointed out that the “individual rights” theory had the effect of transforming s 92 into a source of discriminatory protectionism in reverse: “in some circumstances a source of privileged and preferential treatment for [interstate] trade to the detriment of the local trade” (Cole v Whitfield (1988) 165 CLR 360 at 403). Once that view was displaced by the interpretation adopted in Cole v Whitfield, it necessarily followed that the authority of earlier decisions of the Court, including the Peanut Case, North Eastern Dairy and Coarse Grains, was open to question to the extent to which those decisions were decided by reference to an interpretation of the section that could no longer be supported. Accordingly, there is no force in the defendants’ contention that the present case is governed by the Peanut Case. Just as the entire crop within the State was vested in the Board in that case, so it is here. But the Court’s conclusion that the vesting of the crop in the Board contravened s 92 rested on the individual rights theory and the deprivation of the Queensland growers’ freedom to sell their peanuts in the course of interstate trade, not on the concept of discrimination. So, the Peanut Case has nothing to say on the critical question whether the legislation here in question is discriminatory in a protectionist sense. Conclusion In the present case, although the commodity marketing scheme for which the Act provides vests the commodity produced in New South Wales in a board, it does not vest in the board so much [8.100]

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Barley Marketing Board (NSW) v Norman cont. of the commodity as is imported from other States. In this respect, the marketing scheme, as it applies to barley under the Act, must be distinguished from the legislative arrangements considered in North Eastern Dairy ((1975) 134 CLR 559), where interstate milk, as well as milk produced within the State, was vested in the Authority and there was a prohibition imposed on the sale of “pasteurized milk for human 202 consumption or use by man in New South Wales” unless it was pasteurized in the State. These provisions were held to contravene s 92 in that they imposed a direct and impermissible burden on interstate trade and discriminated against Victorian milk producers by preventing the sale in New South Wales of Victorian milk on impermissible grounds (North Eastern Dairy Co Ltd v Dairy Industry Authority of NSW (1975) 134 CLR 559 at 579–580, 608). But this aspect of the decision, which alone has no relevance for present purposes, was based on legislative provisions which have no parallel in the provisions of the Act. The principal argument presented by the first and second defendants in support of their case of discrimination is that legislation creating a marketing scheme which seeks to ensure a minimum price for producers is necessarily protectionist. This is because it protects small producers by giving them the benefit of the marketing authority’s increased bargaining power against large purchasers, especially interstate maltsters, the purchase of malting grade barley across State borders being one of the reasons why barley prices were kept low, according to the plaintiff’s notice stating its reasons for divesting malting grade barley. But this element of “protection” in favour of growers, especially small growers, is not accompanied by any element of discrimination against the interstate trade in barley or interstate traders in that commodity. The scheme may terminate an advantage formerly enjoyed by New South Wales border growers but that is not to the point. The curious consequence of establishing a New South Wales minimum price for malting grade barley (which is a higher price in virtue of the plaintiff’s increased bargaining power than it would otherwise be) is that it might well enhance the competitive selling position of growers outside New South Wales. In so far as the marketing scheme terminates an advantage in the form of lower prices obtainable by Victorian maltsters from New South Wales border growers – this being an avowed object of the divesting of malting grade barley – those maltsters may now pay more than they did when they purchased from border growers in that State, but they are treated equally with maltsters in that State. In-State and out-of-State maltsters must buy from the plaintiff if they wish to make purchases of barley produced in New South Wales. Accordingly, there is no discrimination against the out-of-State maltster. Another variation of this argument is that, apart from the factors already mentioned, the New South Wales maltsters are free to buy malting grade barley from border growers in Victoria whereas 203 Victorian maltsters are no longer able to buy from border growers in New South Wales. But, for reasons already explained, this involves no discrimination in any relevant sense. The purchasing entitlements of the maltsters in each of the two States are identical. Both Victorian and New South Wales maltsters have equal access to the barley sold by Victorian growers and that sold by the plaintiff. The maltsters in both States are denied direct access to the growers in New South Wales. The Act does not result in the exclusion of one group but not the other from any market; nor does the Act lead to any difference in price of product to maltsters in the two States. Consequently the New South Wales maltster is given no competitive advantage over his Victorian counterpart. So the operation of the Act does not result in “a departure from equality of treatment” of interstate and intrastate trade and commerce, that being the object of the constitutional injunction in s 92: Cole v Whitfield ((1988) 165 CLR 360 at 399). … 204 … At the same time it could scarcely be denied that a prohibition or restriction upon the export of a commodity from a State with a view to conferring an advantage or benefit on producers within the State over out-of-State producers would amount to discrimination in a protectionist sense. If a State having a scarce resource or the most inexpensive supplies of a raw material needed for a manufacturing operation prohibited the export of material from that resource or those supplies in order to confer a benefit on its domestic manufacturers as against their out-of-State competitors, that prohibition would discriminate against interstate trade and commerce in a protectionist sense. However, in the present case, there is no evidence to suggest that the marketing scheme operates in such a way as to restrict the supply of barley to interstate maltsters. They are able to compete on an even footing with domestic maltsters in purchasing malting grade barley from the plaintiff. 680

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Barley Marketing Board (NSW) v Norman cont. In this respect it is necessary to elucidate something that was said in Cole v Whitfield ((1988) 165 CLR 360 at 407; see also 394) by way of identifying the protection which s 92 is designed to confer. The Court said: 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 (emphasis added). Plainly enough, mischief at which the section is directed embraces discrimination against out-of-State producers and traders achieved by restrictions upon commodities or services upon which those producers and traders rely in competing with in-State producers and traders in trade or commerce of the same kind. But the passage cited should not be understood as holding that such discrimination cannot occur where the commodities or services upon which a restriction is imposed are not the particular commodities or services which are affected by discrimination. In such a case, the relevant discrimination is to be found by comparison between in-State trade or commerce and out-of-State trade or commerce of the same kind, the restrictions imposed on commodities or services which result in [205] differential treatment of in-State and out-of-State trade or commerce being the means by which that discrimination is created. So much was recognized in Castlemaine Tooheys Ltd v South Australia ((1990) 169 CLR 436) where a law which imposed restrictions on the use of non-refillable bottles was held to discriminate against the out-of-State trade in bottled beer and to confer protection on the domestic brewers of bottled beer. It happened to be the case in Cole v Whitfield that the commodity upon which restrictions were imposed, namely, crayfish, was the same as the commodity, the out-of-State trade and commerce in which was said to have been discriminated against in a protectionist sense. And that was also the case in Bath v Alston Holdings Pty Ltd ((1988) 165 CLR 411) where restrictions were imposed on tobacco and tobacco products. It was the in-State trade or commerce in these commodities which was held by the majority to benefit from discrimination in a protectionist sense against out-of-State trade or commerce in commodities of the same kind, contrary to s 92. In the result the barley marketing scheme set up by and under the Act does not impose a discriminatory burden of a protectionist kind and, accordingly, it does not contravene s 92.

[8.110]

1.

2.

Notes&Questions

State A produces butter, but little margarine, while State B produces margarine but little butter. In order to protect its butter industry, State A enacts legislation restricting the entry of margarine from State B. Would the legislation contravene s 92? Do the comments in Barley Marketing Board discussing the passage in Cole v Whitfield on protection of “intrastate trade and commerce of the same kind” assist in resolving this issue? Would it matter in the above situation whether or not State B produced substantial quantities of butter? For a critique of Cole v Whitfield and analysis of the subsequent cases, see D Rose, “Cole v Whitfield: “Absolutely Free” Trade?”, in H P Lee and G Winterton (eds), Australian Constitutional Landmarks (Cambridge University Press, Cambridge, 2003), p 335. Dennis Rose argued that the test should differ between importing and exporting States.

[8.110]

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Betfair v Western Australia (2008) [8.120] Betfair Pty Ltd v Western Australia (2008) 234 CLR 418 at 451–454, 473–484, 488 [Betfair Pty Ltd ran a betting exchange out of Tasmania; a facility which matches up bets on whether a particular competitor or team might win or lose. Following amendments made by the Betting and Racing Legislation Amendment Act 2006 (WA), s 24(1AA) of the Betting Control Act 1954 (WA) made it an offence for a person to bet through a betting exchange; s 27D(1) of the Betting Control Act 1954 (WA) made it an offence for a person in Western Australia or elsewhere to “publis[h] or otherwise mak[e] available a WA race field in the course of business” without prior approval. Betfair’s application for authorisation pursuant to s 27D(1) was denied and the company challenged, in the High Court’s original jurisdiction, the constitutional validity of ss 24(1AA) and 27D(1) on the basis of s 92 of the Commonwealth Constitution. The High Court unanimously held that ss 24(1AA) and 27D(1) were invalid by reason of s 92 in imposing a discriminatory burden on interstate trade of a protectionist kind in, amongst other things, protecting betting operators in Western Australia from interstate competition.] Gleeson CJ, Gummow, Kirby, Hayne, Crennan and Kiefel JJ: [10] 451 All parties accept as the source of present doctrine respecting s 92 what was said twenty years ago in Cole v Whitfield and further developed and applied in the authorities decided shortly thereafter, namely Bath v Alston Holdings Pty Ltd, Castlemaine Tooheys Ltd v South Australia and Barley Marketing Board (NSW) v Norman Board. [11] Nevertheless, it would be an error to read what was decided in Cole v Whitfield as a complete break with all that had been said in this Court respecting the place of s 92 in the scheme of the Constitution. For example, in his reasons in Samuels v Readers’ Digest Association Pty Ltd ((1969) 120 CLR 1 at 17–18), Barwick CJ rejected the proposition that the economic consequences of the operation of a law could not come within the purview of s 92. … [12] 452 Moreover, there have been significant developments in the last twenty years in the Australian legal and economic milieu in which s 92 operates. The first of these concerns an interpretation given to Ch IV of the Constitution by this Court in 1997. In Ha v New South Wales ((1997) 189 CLR 465) the Court recognised both the character of State “licence fees” as duties of excise to which s 90 of the Constitution applied and, at a more general level, the place occupied by both s 90 and s 92 in Ch IV of the Constitution. The creation and fostering of national markets would further the plan of the Constitution for the creation of a new federal nation and would be expressive of national unity. [13] In that vein, Ha decided that the exclusivity of federal power to impose duties of excise is not limited to the more modest purpose of protection of the integrity of the tariff policy of the Commonwealth (at 495–496). However, while s 90 is concerned with the imposition of duties of excise on goods, this case goes beyond that field and concerns the application of s 92 to services provided in commerce. [14] Another development since Cole v Whitfield is indicated in what has been said above respecting the circumstances of the present litigation. This is the appearance of what Judge Posner has called “the new economy” (“Antitrust in the New Economy” (2001) 68 Antitrust Law Journal 925) in which internet-dependent businesses, like that of Betfair, operate readily and deal with customers without regard to geographic boundaries. The point is illustrated by the activities of Betfair with respect to registered players in Western Australia before the changes to the law of that State. [15] Cole v Whitfield established that, at least in its application to trade and commerce among the States, the object of s 92 is the elimination of protection. The term “protection” is concerned with the preclusion of competition, an activity which occurs in a market for goods or services. To focus upon the geographic dimension given by State boundaries, when considering competition in a market in internet commerce, presents practical and conceptual difficulties. Yet, Western Australia and supporting State interveners emphasised that s 92 permanently mandates that each State retain its own “economic centre”. That proposition, as will appear from what is said later in these reasons, is overbroad. [16] The third development is the emergence since 1995, and by inter-government agreement under the auspices of the Council of Australian Governments, of a National Competition Policy… 453 Counsel for the plaintiffs emphasised that the greater the degree of implementation of the National Competition Policy, the less the occasion for recourse to s 92. [17] Developments such as these illustrate the force of the following statement in Cole v Whitfield (at 408–409): 682

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Betfair v Western Australia (2008) cont. 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. [18] The references in this passage to “domestic industry” highlight the practical and conceptual perplexity that arises in accommodating internet commerce to the notion of protectionism in intrastate trade and commerce. Further, subsequent references in Castlemaine Tooheys (at 472–473) to “the people of” the State and to “its” well-being, rather than to those persons who from time to time are placed on the supply side or the demand side of commerce and who are present in a given State at any particular time, have their own difficulties. They appear to discount the significance of movement of persons across Australia, and of instantaneous commercial communication, and to look back to a time of physically distinct communities located within colonial borders and separated by the tyranny of distance. [19] Here, as elsewhere in debate respecting the operation of the Constitution (See, eg, Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 565–566; Sue v Hill (1999) 199 CLR 462 at 487–488 [50]–[51]), there is continued force in the sentiment expressed by O’Connor J (Jumbunna Coal Mine NL v Victorian Coal Miners Association (1908) 6 CLR 309 at 367–368. See also, respecting s 92 itself, the remarks of Mason J in North Eastern Dairy Co Ltd v Dairy Industry Authority of NSW (1975) 134 CLR 559 at 615) in the early years of the Commonwealth: [I]t 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. [20] 454 Differences in judicial opinion respecting the construction and application of s 92 to diverse political and economic circumstances have stemmed from the “broad and general” terms in which the section is expressed. One significant outcome of Cole v Whitfield was to return consideration of s 92 to the matters of political economy with a general understanding of which the provision was framed at the end of the nineteenth century. An appreciation of the somewhat fluid content of those matters at both the Imperial and colonial level assists an appreciation of the present operation of s 92 in the “new economy” in which Betfair operates in Australia. Yet, as indicated above, the distance from today of the times and circumstances of the colonial period requires that the admonition of O’Connor J be kept constantly in mind. … [84] 473 … the plaintiffs should have the declaratory relief they seek respecting the invalidity of ss 24(1AA) and 27D(1), by reason of the operation of s 92. State regulation [85] In explaining the reasons for that outcome, it is convenient first to consider a particular proposition drawn from Castlemaine Tooheys. Western Australia, and supporting interveners, rely upon that proposition for a sufficient answer to the success the plaintiffs otherwise might have in demonstrating that the impugned provisions are discriminatory in a protectionist sense. [86] In their joint reasons in Castlemaine Tooheys, Mason CJ, Brennan, Deane, Dawson and Toohey JJ said that account must be taken of a “fundamental consideration” (at 472). This was that each State legislature has power “to enact legislation for the well-being of the people of that State”. Western Australia submits that the legislation under attack by the plaintiffs is of this character. [87] 474 But such State legislative power, as their Honours also said in Castlemaine Tooheys, must be “subject to the Constitution”. Section 92 applies in peremptory terms and (unlike, for example, s 51) it is not restrained by the presence of those opening words. [88] By way of contrast, the Melbourne Corporation doctrine applies to the exercise of federal legislative powers and the implication involved finds some textual root in the phrase in the opening words of s 51, “subject to this Constitution”. There is to be found in s 92 no such textual root for any implication saving legislation (and the policies it may implement) from the full operation which that provision otherwise has in any given case. That is not a cause for surprise when regard is had to the operation of s 92 in the maintenance of a national economy. Further, such a state of affairs is consistent with those pre-1900 United States decisions to which reference has been made earlier in these reasons. [89] There are difficulties, also as noted above [8.120]

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Betfair v Western Australia (2008) cont. at [18], in the use in Castlemaine Tooheys of the expression “the people of” a State. The State laws under challenge here apply not merely to those citizens who are resident in Western Australia (cf Constitution s 117), but to any person present there at any time. [90] Thus, the “fundamental consideration” identified in Castlemaine Tooheys of a condition of localised well-being will not encompass much modern State regulatory legislation in the “new economy”. This is so particularly where the State law is given a “long-arm” territorial reach of the kind considered in Pinkstone v The Queen ((2004 219 CLR 444). …[100] 476 Neither the plaintiffs nor Tasmania challenged the existence of a “fundamental consideration” of the general nature discerned in Castlemaine Tooheys. Accordingly, further attention to its derivation from and place in the Constitution is not required here. [101] However, with respect to the “appropriate and adapted” criterion expressed in Castlemaine Tooheys, counsel for the plaintiffs and for Tasmania submitted that necessarily it involves the existence of a “proportionality” between, on the one hand, the differential burden imposed on an out-of-State producer, when compared with the position 477 of in-State producers, and, on the other hand, such competitively “neutral” objective as it is claimed the law is designed to achieve. [102] That “proportionality” must give significant weight to the considerations referred to earlier in these reasons when discussing Castlemaine Tooheys (at 468–470). These involve the constraint upon market forces operating within the national economy by legal barriers protecting the domestic producer or trader against the out-of-State producer or trader, with consequent prejudice to domestic customers of that out-of-State producer or trader. They suggest the application here, as elsewhere in constitutional, public and private law, of a criterion of “reasonable necessity” (See the discussion by Gleeson CJ in Thomas v Mowbray (2007) 233 CLR 307 at 331–333 [20]–[26]). For example, in North Eastern Dairy Co Ltd v Dairy Industry Authority of NSW ((1975) 134 CLR 559 at 608), Mason J said: As the defendant has failed to show that the discriminatory mode of regulation selected is necessary for the protection of public health, it is in my judgment not a reasonable regulation of the interstate trade in pasteurised milk. His Honour also referred (at 615) to remarks in a similar vein by the Privy Council in Commonwealth v Bank of NSW (1949) 79 CLR 497 at 640–641). [103] That view of the matter should be accepted as the doctrine of the Court. It is consistent with the explanation given in Cole v Whitfield of the justification of the total prohibition in the Tasmanian legislation on the sale of all undersized crayfish, irrespective of origin, as supplied by its objective of the conservation of the stock of Tasmanian crayfish. The Court held (at 409–410) that the prohibition was a “necessary means of enforcing the prohibition against the catching of undersized crayfish in Tasmanian waters” because that State “cannot undertake inspections other than random inspections and the local crayfish are indistinguishable from those imported from South Australia”. [104] Further reference also should be made here to the resolution in Castlemaine Tooheys (at 477) by Mason CJ, Brennan, Deane, Dawson and Toohey JJ of the question of the validity of the South Australian legislation at stake there. They concluded from the facts, that the legislature of that State had “reasonably apprehended” that the sale of beer in non-refillable bottles manufactured in South Australia constituted a threat to the reserves of that State of natural gas (at 477). Their Honours then said that it might have been expected that State legislation would have prohibited the sale in South Australia of beer in 478 non-refillable bottles produced in that State. They went on to note that an alternative measure might have been the prohibition of the manufacture in South Australia of such bottles, either at all, or with the use of natural gas. However, neither of these measures was adopted. … Acceptable explanation or justification? [106] 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”. [The joint judgment said that the reasons for this policy was that Western Australia opposed such “betting services” because they (1) did not “contribut[e] to the racing industry” and (2) jeopardised the “integrity of the racing industry” in allowing bets as to who would lose.] … [107] 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 479 agreement with the Victorian regulator, Betfair undertook to return an amount equivalent to 1% 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 684

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Betfair v Western Australia (2008) cont. 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. [108] 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 at 426–427; 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 re-introduction of customs duties at State borders. [109] 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.[110] 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. [111] 480 … there was a lack of evidence of any increase in Australia of dishonest practices attributable to the operation of the betting exchange by Betfair. It will be recalled that Betfair’s exchange remains accessible under the laws of the other States. [112] 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. [113] 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 non-discriminatory manner. The market [114] 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. [115] 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 473 at 455 [250]). … [116] 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 [8.120]

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Betfair v Western Australia (2008) cont. reach of its legislative power within and beyond the State borders. This engages s 92 of the Constitution. [117] It is now convenient to determine whether the plaintiffs are entitled to the relief they seek respecting the two provisions under challenge. Section 27D(1) [118] 481 This provision applies to the conduct of Betfair in publishing or otherwise making available a WA race field. This burdens interstate trade and commerce, both directly and indirectly. It does so directly because it denies to Betfair use of an element in Betfair’s trading operations. It does so indirectly by denying to Betfair’s registered players receipt and consideration of the information respecting the latest WA race fields by access to Betfair’s website or by communication with its telephone operators. These effects of s 27D(1) operate to the competitive disadvantage of Betfair and to the advantage of RWWA (“Racing and Wagering Western Australia”) and the other in-State wagering operators. The law in its application to Betfair answers the description of a discriminatory burden on interstate trade of a protectionist kind. [119] The provision for authorisation may be put to one side so far as concerns Betfair. Given the stated legislative purpose of prohibition of betting through and the establishment and operation of betting exchanges, a matter to which the Minister is bound to have regard when considering an application under s 27D, the prospect of Betfair obtaining approval must be illusory. The evidence of the refusal of the application which Betfair made bears this out. Section 24(1aa) [120] The relevant effect of this provision is to prohibit a person in Western Australia from placing a particular form of fixed odds bet by means of a cross-border electronic communication, and to render the out-of-State wagering operator liable for aiding, counselling or procuring an offence by Betfair’s registered players even if all its acts occurred outside Western Australia. [121] It is true that this particular form of fixed odds betting also is denied to in-State wagering operators and their customers. But that does not deny to s 24(1AA) its character of a discriminatory burden on interstate trade of a protectionist kind. The subsection operates to protect the established wagering operators in Western Australia, including RWWA, from the competition Betfair otherwise would present. What has been said above respecting cross-elasticity of demand is relevant here. The intrastate trade and interstate trade are of “the same kind” (Cole v Whitfield at 407–408; Barley Marketing Board (SW) v Norman at 204–205), whether the subject matter be different species of fixed odds betting or the general field of wagering upon racing and sporting events. [122] That view of the matter proceeds from the evidence indicating cross-elasticity of demand. Some analogy is provided by the situation in Castlemaine Tooheys. There the discrimination was between bottles having different characteristics; here it is between different but competing forms of wagering on racing and sporting events. The effect of s 24(1AA) is to prohibit Betfair, an out-of-State wagering operator, 482 from providing a betting exchange for registered players in Western Australia, leaving the in-State operators able to supply customers with their services without the competition to their revenue which Betfair would present. This is another discriminatory burden of a protectionist kind. Orders: [124] The plaintiffs have succeeded in their reliance upon s 92 of the Constitution and are entitled to declaratory relief in the particular form identified earlier in these reasons. Heydon J [agreed with the findings of the joint judgment that ss 24(1AA) and 27D(1) were invalid.]: Validity of s 24(1aa) … [134] 483 Western Australia argued that s 24(1AA) was not invalid by reason of s 92, because it advanced the end of preserving the integrity of racing in Western Australia by preventing persons who have the twin characteristics of possessing the capacity to affect adversely the performance of a horse in a race and possessing the desire to profit 484 from that capacity by laying a bet that it will lose, from doing so. That argument must be rejected. The width of the technique adopted in s 24(1AA) reveals that that is not the end advanced. The technique adopted was a prohibition on a very wide class of would-be gamblers – persons in Western Australia who might wish to place a back bet or a lay bet on a horse race or any sporting event anywhere in the world – from doing so. The technique employed is wider than the end advanced in not being limited to horse racing, but in extending to sporting events in relation to which no “integrity” problems have been claimed. Thus s 24(1AA) cannot advance the integrity of horse racing in Western Australia by preventing Western Australians from betting in a particular way on a tennis match in Sydney or a cricket match in Adelaide where the organisers of those events do not object to betting in that 686

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Betfair v Western Australia (2008) cont. particular way. Further, the technique employed is wider than the end advanced in not being limited, as Western Australia’s formulation of that end is limited, to horse racing in Western Australia: it extends to horse racing anywhere. Section 24(1AA) cannot advance the integrity of horse racing in Western Australia by preventing Western Australians from betting in a particular way on a Melbourne horse race where the organisers of that race do not object to betting in that particular way. And the technique is not limited to the very narrow class of persons who might wish to exploit a capacity to affect adversely the performance of a horse in a race by laying a bet on it to lose, but extends to the much wider class of would-be gamblers described above. So wide is the technique adopted – so ill-suited is it to achieve the end supposedly advanced – that it must be inferred that the only purpose is protectionist. Hence s 24(1AA) is invalidated by s 92 … The validity of s 27D(1) … [144] 488 As the plaintiffs submitted, the protectionist prohibition in s 27D(1) could not be saved by granting a discretion to create exemptions, for the “discretion [was] simply a smokescreen for a prohibition”. Thus the plaintiffs are correct in submitting that s 27D(1) burdens inter-State trade to a significantly greater extent than it burdens intra-State trade. [Heydon J also found that s 27D(1) did not “advance any other end” and that “[t]he mismatch between the technique employed in s 27D and the end supposedly achieved is so great as to prevent that end being treated as its purpose” (at 488 [145]). Both the joint judgment (at 482 [125]) and Heydon J’s judgment (at 489 [147]) did not accept Western Australia’s submission that s 24(1AA) could be read down to only apply to intrastate (or trade with over countries) and not interstate trade and commerce.]

[8.130]

1.

Notes&Questions

Consider The Hon Michael Kirby’s comment after Betfair (in the “Foreword” in Puig (2008), p xii) that: By applying s 92 to strike down State laws purporting to intrude in a demonstrated national (if not international) market in economically valuable services, Betfair arguably shows, once again, the adaptability of the Australian Constitution, its capacity to adjust to entirely new and unforeseen circumstances; and the unacceptability of a purely “originalist” or historical approach to deriving the constitutional meaning from the text.

2.

Amelia Simpson has argued that the High Court “has not clarified whether the s 92 prohibition is triggered by the mere presence of protectionist effects or whether, instead, those effects enable the court to infer a protectionist purpose, with that being the true touchstone” (“Betfair Pty Ltd v Western Australia” (2008) 19 Public Law Review 179 at 194). Do you agree?

[8.130]

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Part III: The Legislative Power of the Commonwealth

Betfair v Racing NSW; Sportsbet v NSW [8.140] Betfair Pty Ltd v Racing New South Wales (2012) 249 CLR 217; Sportsbet Pty Ltd v New South Wales (2012) 249 CLR 298. [In 2012, in concurrent appeals, Betfair Pty Ltd and Sportsbet Pty Ltd challenged, under s 92, the constitutionality of fees to access horse racing information levied by Racing New South Wales and Harness Racing New South Wales by reference to “wagering turnover.” The High Court dismissed the appeals (7:0) on the basis that the fees did not discriminate in a protectionist sense against interstate (or “extra-territorial”) trade and applied uniformly to all betting operators. In Betfair Pty Ltd v Racing New South Wales, it was argued that the means by which the fee was calculated, based on “wagering turnover” rather than gross revenue, affected the appellant more deleteriously because of their lower operating margins. As Kiefel J explained at 245 [96]) A betting exchange facilitates customers betting on whether a future event such as a horse winning a race will or will not occur… It matches a bet that an event will occur (eg the horse winning) with a bet that it will not (eg the horse losing)… A feature of Betfair’s method of earning revenue is that its commissions are not charged on back bets. It charges commission only on net winnings, whether the win is on a back bet [betting that an event will occur] or a lay bet [betting that an event will not occur]. Its position may be compared with that of TAB, which takes commission on all back bets. This feature of Betfair’s business means that the fee will represent a numerically higher proportion of its gross revenue. Because Betfair derives its commission only from bets which are successful, its gross revenue is only a fraction of its overall turnover.] French CJ, Gummow, Hayne, Crennan and Bell JJ: 265 [36] 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. 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 (at 407, 409). What is posited here is an essentially objective inquiry (APLA Ltd v Legal Services Commissioner (NSW) (2005) 224 CLR 322 at 394 [178], 462 [424]). … 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. [37] 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” (at 407–408). … 269 [52] 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. … 270 [55] 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 [Racing New South Wales] and HRNSW [Harness Racing New South Wales] absorbed a higher proportion of its turnover on interstate transactions than that of the turnover of TAB [TAB Limited], the 688

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Betfair v Racing NSW; Sportsbet v NSW cont. principal intrastate wagering operator. [56] 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 271 impediment to increasing that share or profit. [Heydon J held (at 272 [61]–[62]) that “a law cannot be characterised as protectionist merely because its practical operation imposes a burden on a single interstate trader” and that “a measure cannot contravene s 92 unless it involves the unequal treatment of interstate trade and intrastate trade to the serious trading advantage of intrastate trade when compared with interstate trade”. His Honour found that the evidence presented did not establish that the fee levied had the required effect on interstate or intrastate trade and that Betfair’s market position was not so “dominant” such that “an impact on its position was sufficiently substantial to burden interstate trade to an extent significantly greater than the burden on intrastate trade” (see 276 [73]). Kiefel J also dismissed the appeal on the basis that the appellants had not demonstrated that any discrimination had a protectionist effect. Her Honour maintained that it was insufficient that Betfair was an interstate trader. It had to show that there was a “protectionist effect upon it in that capacity” (at 289 [113]). Kiefel J also held that the case did not warrant a determination as to whether “any effect lessening competition in a market which operates without reference to State boundaries is contrary to s 92” (at 293 [127]).]

[8.150] In Sportsbet Pty Ltd v New South Wales (2012) 286 ALR 404, a Northern Territory

based bookmaker argued that the fee levied under the Racing Administration Act 1998 (NSW) by the Racing Administration Regulation 2005 (NSW) to RNSW and HRNSW and the exemption thresholds imposed, were, pursuant to s 109 of the Constitution, inconsistent with s 49 of the Northern Territory (Self-Government) Act 1978 (Cth) (which, equivalently to s 92, provides that “Trade, commerce and intercourse between the Territory and the States … shall be absolutely free”) and hence invalid to the extent of the inconsistency. The High Court held (in a joint judgment of French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ and a separate judgment of Heydon J) that the fee did not, by its legal effect or practical operation or effect, discriminate in a protectionist sense and there was insufficient evidence of a disproportionate effect on interstate trade from intrastate trade. This meant that the s 109 issue did not arise on the facts. For an analysis of Betfair Pty Ltd v Racing New South Wales (2012) 249 CLR 217; Sportsbet Pty Ltd v New South Wales (2012) 249 CLR 298 see Gonzalo Villalta Puig, “Betfair and Sportsbet: The Remains of the Federal Purpose of s 92 of the Australian Constitution” (2013) Australian Law Journal 178.

FREEDOM OF INTERCOURSE BETWEEN STATES [8.160] In Cole v Whitfield, the High Court said (at 393–394): 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, ie in the sense of anarchy … Once this is accepted, as it must be, there is no reason in logic or commonsense for insisting on a strict correspondence between the freedom guaranteed to interstate trade and commerce and that guaranteed to interstate intercourse.

Judicial comments on the “intercourse” element of s 92 are found in Nationwide News Pty Ltd v Wills (1992) 177 CLR 1 at 53–61 per Brennan J and Australian Capital Television (1992) 177 CLR 106 at 191–196 per Dawson J. [8.160]

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APLA v Legal Service Commissioner (NSW) [8.170] APLA Ltd v Legal Service Commissioner (NSW) (2005) 224 CLR 322 at 353, 390–394, 463 [In APLA the validity of the Legal Profession Regulation 2002 (NSW) was challenged on the ground, inter alia, that it impermissibly infringed the freedom of interstate intercourse, or alternatively trade and commerce, guaranteed by s 92 of the Constitution. Gleeson CJ and Heydon J (jointly) and Gummow, Hayne and Callinan JJ held that s 92 was not infringed. McHugh and Kirby JJ did not find it necessary to consider this issue. Pt 14 of the Regulation (cll 138 – 140D) prohibited the advertising by a lawyer of legal services in relation to claims arising out of personal injuries. Gleeson CJ and Heydon J and Gummow J expressly found that the advertising or promotion of legal services constituted trade and commerce (353[37] and 391[168] respectively), although the Court refrained from giving an authoritative pronouncement on whether the provision of legal services amounted to trade and commerce. APLA is significant in that a majority of the Court determined the test to be applied in the case of an activity which constituted interstate intercourse but which was not of a trade and commerce nature.] Gleeson CJ and Heydon J: 353 [38] …The regulations would also prohibit advertising of legal services which may not be part of trade and commerce. Communication is intercourse, and covers advertising which is not part of trade and commerce. Let it be assumed that at least some of the advertising covered by the regulations is in that category. The object of the regulations is not to impede interstate intercourse. The test to be applied therefore is whether the impediment to such intercourse imposed by the regulations is greater than is reasonably required to achieve the object of the regulations (AMS v AIF (1999) 199 CLR 160 at 178–180 [41]–[48], 232–233 [221]). The object of the regulations is to restrict the advertising of legal services to be provided in New South Wales. That object can only be achieved by a general restriction on the advertising of such services. The impediment to interstate intercourse is no greater than is reasonably required to achieve the object of the regulations. [39] … This is not a case in which the application of one test would produce a result different from that produced by the application of another. The 354 Commonwealth argued that where a law burdens interstate intercourse that occurs in or in relation to interstate trade or commerce, the trade and commerce limb of s 92 applies and the validity of the law is to be tested by reference to Cole v Whitfield. This may be correct, but it is unnecessary to decide the point. Gummow J: 390 [165] …The solution which should be accepted … is that, in determining the validity of a law relating to activities which have the character of “trade, commerce … among the States” in s 92 which also involve “intercourse among the States”, validity is to be assessed exclusively by reference to the first-mentioned character of that law. In this way there is supported the Court’s insistence in Cole v Whitfield that s 92 does not operate as a source of unfair and potentially divisive preference of interstate trade over intrastate trade. … [His Honour held that, although advertising was “an activity in trade or commerce”, the regulations did not breach the first limb of s 92 because it was not “protectionist” (at [168]). Regarding the plaintiffs’ reliance on the second limb of s 92, Gummow J remarked:] 392 [171] There is nothing in the definition of “advertising” in Pt 14 which limits to services for reward the provision of legal services by a barrister or solicitor and excludes the provision of gratuitous services by such persons or by non-profit organisations employing them. In those circumstances, counsel for the amici emphasised that the prohibition imposed in Pt 14 may apply to activities outside the potential operation of the first limb of s 92; that being so, those non-trading and non-commercial activities might nevertheless, given the necessary interstate element, attract the operation of the second limb of s 92 as involving “intercourse”. [172] That Pt 14 may have such an operation should be accepted. The amici are, as has been indicated, not parties and cannot and do not seek any declaratory relief in respect of proposed communications. Nevertheless, having regard to the detailed arguments that were presented without objection, it is convenient to consider the bearing of the “intercourse” limb of s 92 upon interstate communications advertising or promoting the provision without charge of legal services in New South Wales by non-profit bodies. This is on the assumption, which it is unnecessary to test, that such communications are not in trade or commerce. … [177] 393 More recently, in AMS v AIF (1999) 199 CLR 160 at 178–179, Gleeson CJ, McHugh and Gummow JJ said that, in working out the measure of freedom from interference which s 92 now is to be taken to provide in respect of interstate intercourse, the question becomes one whether the impediment 690

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APLA v Legal Service Commissioner (NSW) cont. imposed on that intercourse is greater than that reasonably required to achieve the objects of the legislation in question. Their Honours pointed out that the circumstance that the order made by the State Family Court in exercise of jurisdiction conferred by State legislation had a practical operation of hindering or restricting movement by the mother (by reason of the requirement that she not 394 change the principal place of residence of the child) was not necessarily fatal to validity. Hayne J said in the same case (1999) 199 CLR 160 at 233 [221]: I agree that custody and guardianship legislation may present a question whether the statute empowers the making of orders that have a practical effect of imposing upon freedom of intercourse an impediment greater than reasonably required to achieve the object of the legislation. This approach should be accepted as the doctrine of the Court. [178] It is apparent, particularly from the remarks of Brennan J in Nationwide News (1992) 177 CLR 1 at 57, that, in speaking in this context of the object or purpose of the law in question, what is posited is an objective inquiry answered by reference to the meaning of the law or to its effect. Moreover, in speaking of an effect which imposes an impediment upon freedom of intercourse which is greater than reasonably required to achieve that object or purpose, no conundrum is presented. It is true that, at one level of analysis, an object or purpose of all legislation is that it operate according to its terms. But it does not follow that any law which has an adverse operation or effect upon interstate intercourse necessarily fails the constitutional criterion of validity under s 92. The level of characterisation required by the constitutional criterion of object or purpose is closer to that employed when seeking to identify the mischief to redress of which a law is directed or when speaking of “the objects of the legislation”. The point is illustrated in the paragraph which now follows. [179] In the present case, on the assumption that the prohibition imposed by Pt 14 may apply to interstate communication which answers the description of “intercourse” in s 92, nevertheless, in that operation, Pt 14 is not invalid. This is because the effect of the prohibition on interstate communications is no greater than is reasonably required to achieve the object of Pt 14. That object could not be fully achieved if legal practitioners were permitted to direct from outside New South Wales to persons in New South Wales advertisements promoting the provision in New South Wales of the particular legal services with which the legislation is concerned. Likewise, in Cunliffe, Dawson J had expressed his conclusion as follows ((1994) 182 CLR 272) at 366–367: The achievement of the object of the legislation in question – the protection of aliens seeking advice or assistance with regard to permanent entry to the country – necessarily interferes with communication. Upon the assumption that some of that communication is between States, the legislation necessarily interferes with interstate communication. But it is clearly not the purpose of the law to impede interstate communication and the extent to which it does so is no more, in my view, than is reasonably required to achieve the purpose of the legislation. Any scheme which would 395 seek to protect aliens against advice of an unsuitable kind must necessarily inhibit communication to some extent. The extent to which Pt 2A of the Migration Act [1958 (Cth)] does so is fairly incidental to the object of the legislation. Hayne J: 463 [427] The impugned regulations are not protectionist measures. In so far as they would inhibit certain interstate communications by persons or bodies, like the amici curiae, who do not pursue commercial ends and whose communications do not form a part of interstate trade and commerce, the impugned regulations do not infringe the freedom of interstate intercourse. First, the impugned regulations are not aimed at impeding interstate intercourse. Secondly, the inhibition which the impugned regulations work on interstate intercourse is no greater than is necessary to achieve their purpose of preventing the advertisement, in New South Wales, of the legal services with which they deal.

[8.170]

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APLA v Legal Service Commissioner (NSW) cont. [Callinan J reached the same conclusion for similar reasons: the regulations were “not aimed at interstate trade, commerce and intercourse” (at 482 [462]). Their “real object” was “the prescription or proscription, in a non-discriminatory way, of a particular kind of professional conduct” (at 482 [463]).]

Notes&Questions

[8.180]

1.

In Buck v Bavone (1976) 135 CLR 110 at 137, Murphy J asserted the existence of an “almost absolute” freedom to move across State borders which was based on a “fundamental implication” of the Constitution. In Miller v TCN Channel Nine Pty Ltd (1986) 161 CLR 556 at 579, Mason J said that he could not find “any basis for implying a new s 92A into the Constitution”. In Cunliffe v Commonwealth (1994) 182 CLR 272, the impugned legislation (Pt 2A of the Migration Act 1958 (Cth)), which established a registration system for persons giving immigration assistance or making immigration representations, was held by the High Court not to be in violation of the interstate intercourse element of s 92. See Brennan J at 333, Dawson J at 366–367, Toohey J at 384, and McHugh J at 395–397. Mason CJ, Deane and Gaudron JJ paid scant attention to the s 92 argument as they relied on the implied freedom to invalidate some aspects of Pt 2A. Mason CJ, at 308, did not regard the scheme as one which infringed s 92 “except in so far as s 114F may impose a restriction or burden on an unregistered lawyer who seeks to provide across a State border immigration assistance, not being immigration legal assistance, in the capacity of a relative or friend”. See J Stellios, “The Intercourse Limb of Section 92 and the High Court’s Decision in APLA Ltd v Legal Services Commissioner (NSW)” (2006) 17 Public Law Review 10.

2.

3.

FACT-FINDING IN SECTION 92 CASES [8.190] Consider the following comments in K Booker, A Glass and R Watt, Federal

Constitutional Law – An Introduction (2nd ed, Butterworths, Sydney, 1998), p 214: As the post-Cole v Whitfield laws develop there will no doubt be surprises, as there were in the decision of Bath v Alston. But one factor is going to be paramount and that will be associated with the determination of factual material that will go principally to the finding of a law as protectionist or not.

Notes&Questions

[8.200]

1.

2.

Why was this factor not a problem in Cole v Whitfield and Castlemaine Tooheys Ltd v South Australia? Was it because the Court was relying on a statement of agreed facts? What if there had been no such agreement? Is the High Court an appropriate body to make such an evaluation? M Coper (“Section 92 of the Australian Constitution since Cole v Whitfield”, in Lee and Winterton (1992), 129 at p 147) said: In appropriate cases, the High Court should, I think, remit the matter to another body for factual enquiry. Expert evidence can be received from economists, for example, on the actual and likely impact of a law; the extent to which this evidence is speculative would go to its weight. The cost to the parties is of course a matter of concern, but this

692

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is not unique to this area of the law. The fact finder could be a single judge of the High Court, a lower court, or an expert assessor. Conflicting evidence would ultimately be weighed by the final decision-maker in the normal way. I cannot leave this subject without observing that the body evidently contemplated by the Constitution to perform the above functions is that august body with the remarkably chequered history, the Inter-State Commission. This idea has been developed by a number of commentators, but its practical pursuit has been somewhat inhibited of late by the Commission’s recent abolition. Like Halley’s Comet, the Commission seems to come approximately every 70 years, be barely visible when it is here, and then disappear in a puff of smoke. But there is merit in the idea that the fact finding function in s 92 cases could be performed by the Inter-State Commission, from which an appeal to the High Court on questions of law is provided by s 73 of the Constitution. Indeed, there is merit in the idea that the application of s 92 is not really a legal question at all, and that the required balance between national and local interests may be better struck by a more diverse body with broader expertise, investigative powers and a constitutional status similar to that of the High Court to ensure an arm’s length relationship with the Commonwealth and the States. For this, however, we must await the return of Halley’s comet.

3.

See also Final Report of the Constitutional Commission (1988), pp 838-845; S Kenny, “Constitutional Fact Ascertainment” (1990) 1 Public Law Review 134; Justin Gleeson, “What’s Left of Cole v Whitfield” (2013) 24 Public Law Review 97, 106; Michael Coper, “Betfair Pty Ltd v Western Australia and the New Jurisprudence of Section 92” (2014) 88 Australian Law Journal 204, 212.

[8.200]

693

CHAPTER 9 Excise Duties [9.10]

INTRODUCTION ...................................................................................................... 695

[9.20]

A TAX ......................................................................................................................... 696 [9.30]

[9.50]

Harper v Minister for Sea Fisheries ................................................. 696

THE MEANING OF EXCISE DUTIES ......................................................................... 697 [9.50]

Before Dennis Hotels ............................................................................... 697 [9.60]

[9.80]

Developments outside the Dennis Hotels stream ................................ 707 [9.90]

[9.110]

Dennis Hotels v Victoria ................................................................ 700 Hematite Petroleum v Victoria ....................................................... 709

More recent developments .................................................................... 714 [9.120]

Ha v New South Wales ................................................................. 715

[9.150] REFORM ..................................................................................................................... 734

INTRODUCTION [9.10] Federation entailed a transfer of powers from the Colonies to the Commonwealth.

Most legislative powers conferred on the Commonwealth are “concurrent”, that is, shared with the States subject to Commonwealth supremacy in the event of inconsistency (Constitution, s 109). However, some powers were taken completely from the Colonies and vested exclusively in the Commonwealth. This is reflected in s 107 of the Constitution which provides that the States shall inherit the powers of the Colonies except for those “exclusively vested in the Parliament of the Commonwealth or withdrawn from the Parliament of the State”. The most important of these exclusive powers are the powers to levy duties of customs and excise, which were vested exclusively in the Commonwealth by s 90 of the Constitution, which provides (in part): On the imposition of uniform duties of customs the power of the Parliament to impose duties of customs and of excise, and to grant bounties on the production or export of goods, shall become exclusive.

The Constitution required uniform duties of customs to be imposed “within two years after the establishment of the Commonwealth” (s 88). A “customs” duty is a tax on “the importation or exportation of commodities”: J Quick and R R Garran, The Annotated Constitution of the Australian Commonwealth (1901, Legal Books Reprint ed, 1976), p 837. See, likewise, Commonwealth & COR Ltd v South Australia (1926) 38 CLR 408 at 435 per Higgins J, 438 per Starke J; Dennis Hotels Pty Ltd v Victoria (1960) 104 CLR 529 at 554 per Fullagar J, 582 per Menzies J, 600 per Windeyer J; Capital Duplicators Pty Ltd v Australian Capital Territory (No 2) (1993) 178 CLR 561 at 590 per Mason CJ, Brennan, Deane and McHugh JJ. (However, in Ha v New South Wales (1997) 189 CLR 465 at 499, the High Court majority mentioned only importation.) Interpretation of “customs” duties has caused the High Court little difficulty but the meaning of “excise” duties has been much debated and litigated. This chapter is confined to the latter subject. The question whether a levy is a duty of “excise” usually arises in the context of a challenge to the validity of legislation enacted by a State or Territory because s 90 prohibits those bodies [9.10]

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from levying such a duty. (The High Court held that s 90 limits Territory legislatures in Capital Duplicators Pty Ltd v Australian Capital Territory (No 1) (1992) 177 CLR 248.) However, the formal limitations imposed on Commonwealth taxation legislation by s 55 of the Constitution in order to protect the Senate from House of Representatives abuse of s 53 occasionally make it necessary to characterise a Commonwealth levy as a duty of excise, a tax, for the purposes of s 55, para 2. See Mutual Pools & Staff Pty Ltd v Federal Commissioner of Taxation (1992) 173 CLR 450.

A TAX [9.20] A duty of excise is a type of tax. Hence, it will first be necessary to determine whether

an alleged duty of excise is a tax. The discussion of this issue in Chapter 7 is relevant here. The question also arose in the context of s 90 in the unusual case of Harper v Minister for Sea Fisheries (1989) 168 CLR 314.

Harper v Minister for Sea Fisheries [9.30] Harper v Minister for Sea Fisheries (1989) 168 CLR 314. [The plaintiff was a Tasmanian abalone fisherman. The Sea Fisheries Regulations 1962 (Tas), reg 17A prohibited persons taking abalone in State fishing waters without a licence, for which an annual fee was payable. Until December 1988, the fee varied in proportion to the weight of abalone authorised to be taken under the licence (a declining amount). From 1989, two fixed fees were specified: up to 15 tonnes, $28,200; above 15 tonnes, $40,000. The plaintiff claimed that the fee was a duty of excise and, therefore, invalid under s 90 of the Constitution. The High Court unanimously held the Regulations valid.] Brennan J: 326 [Abalone] constitute[s] a finite but renewable resource. … 332 The fact that the amount payable … is in the form of a licence fee does not preclude the classification of that amount as a tax. 333 [His Honour stated that it was unnecessary to consider the defendant’s arguments that this was not a tax based on Tasmania’s proprietary rights in the seabed, that the payments were in the form of royalties and/or payments for a profit à prendre.] 334 … Finally, the defendants embrace an argument which depends … upon the exercise of legislative power over the abalone fishery in State fishing waters. …. [T]hat argument should be upheld. Duties of excise constitute a category of taxes for the purposes of the Constitution (see s 55) and the power to impose duties of excise, which s 90 makes exclusive to the Parliament of the Commonwealth, is part of the power to impose taxation. What, then, is the character of the amounts paid to obtain the licences? … [T]he Act and the Regulations abrogate the public right to fish for abalone in the State fishing waters and confer private statutory rights on the several licence holders, commercial and noncommercial, to take limited quantities of abalone. … When a natural resource is limited so that it is liable to damage, exhaustion or destruction by uncontrolled exploitation by the public, a statute which prohibits the public from exercising a common law right to exploit the resource and confers statutory rights on licensees to exploit the resource to a limited extent confers on those licensees a privilege analogous to a profit à prendre in or over the property of another. A limited natural resource which is otherwise available for exploitation by the public can be said truly to be public property whether or not the Crown has the radical or freehold title to the resource. A fee paid to obtain such a privilege is analogous to the price of a profit à prendre; it is a charge for the acquisition of a right akin to property. Such a fee may be distinguished from a fee exacted for a licence merely to do some act which is otherwise prohibited (eg, a fee for a licence to sell liquor) where there is no resource to which a right of access is obtained by payment of the fee. … The next question is whether the amount required to be paid by a licensee to obtain the right to fish is a tax. [His Honour then stated the Latham CJ definition adopted in Matthews (at 276), see above [7.20]: “a compulsory exaction of money by a public authority for public purposes, enforceable by 696

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Harper v Minister for Sea Fisheries cont. law, and … not a payment for services rendered”. His Honour added the explanation from Air Caledonie (at 466-467) that “‘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 … 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 characterised as a tax notwithstanding that they exhibit those positive attributes.” His Honour concluded:] As the amounts payable to obtain an abalone fishing licence are of the same character as a charge for the acquisition of property, they do not bear the character of taxes. They are not duties of excise. Mason CJ, Deane and Gaudron JJ [agreed with Brennan J’s judgment subject to the following remarks]: 325 The licensing system which [the relevant Acts] establish in relation to abalone fisheries in Tasmanian waters is not a mere device for tax collecting. Its basis lies in environmental and conservational considerations which require that exploitation, particularly commercial exploitation, of limited public natural resources be carefully monitored, and legislatively curtailed if their existence is to be preserved. … The right of commercial exploitation of a public resource for personal profit has become a privilege confined to those who hold commercial licences. This privilege can be compared to a profit à prendre. In truth, however, it is an entitlement of a new kind created as part of a system for preserving a limited public natural resource in a society which is coming to recognize that, in so far as such resources are concerned, to fail to protect may destroy and to preserve the right of everyone to take what he or she will may eventually deprive that right of all content. [The licence fee] is properly to be seen as the price exacted by the public, through its laws, for the appropriation of a limited public natural resource to the commercial exploitation of those who, by their own choice, acquire or retain commercial licences. So seen, the fee is the quid pro quo for the property which may lawfully be taken pursuant to the statutory right or privilege which a commercial licence confers upon its holder. It is not a tax. That being so, it is not a duty of excise. [Dawson, Toohey and McHugh JJ at 336 agreed with Brennan J but noted that such an exaction for the purposes of conserving a public natural resource may in other circumstances still constitute a tax if it otherwise exhibits the characteristics of a tax given that there are other ways of conserving a natural resource.]

[9.40]

Notes&Questions

For the meaning of a “tax”, see N McLeod, “State Taxation: Unrequited Revenue and the Shadow of Section 90” (1994) 22 Federal Law Review 476 at 477–482.

THE MEANING OF EXCISE DUTIES Before Dennis Hotels [9.50] The history of the High Court’s interpretation of duties of “excise” has shown

constant expansion, albeit with an occasional pause; the critical step – the extension of the concept of “excise” from essentially a tax on manufacture or production to include retail sales taxes – being taken by the court under the leadership of Dixon J in Parton v Milk Board (Vic) (1949) 80 CLR 229. The constitutional framers’ precise purpose in enacting s 90 cannot be ascertained. Their principal concern was to ensure a Commonwealth monopoly over customs duties and they clearly saw excise duties and bounties as related but subordinate subjects. Unfortunately, their discussion of s 90 was confused, with some delegates mistakenly thinking that the provision affected the ambit of the Commonwealth’s power to levy excise duties, whereas in fact it concerned only the exclusivity of the Commonwealth’s power – in other [9.50]

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words, a State’s power to levy such duties: see M Coper, “The High Court and Section 90 of the Constitution” (1976) 7 Federal Law Review 1 at 21–26; C Saunders, “The High Court, Section 90 and the Australian Federation”, in N A Warren (ed), Reshaping Fiscal Federalism in Australia (Australian Tax Research Foundation, Sydney, 1997), 21 at pp 26-27. As Michael Coper concluded after studying the Convention Debates (p 25): The theory that s 90 was intended to prevent the States from obstructing Commonwealth tariff policy may well be right, but it does not appear clearly from the Debates.

Although Quick and Garran supported the “narrow” interpretation of “excise”, Harrison Moore was more equivocal: “Duties of excise”, taken by itself, is a term of very extended meaning. Its primary meaning was to describe a tax on commodities produced at home, in opposition to the duties of customs payable on importation from abroad. But the term has been extended to cover the duties payable by way of licence fee on a large number of occupations … (WH Moore, The Constitution of the Commonwealth of Australia (2nd ed, 1910), p 515. (Emphasis added.) This edition was subsequent to Peterswald v Bartley; the first edition did not consider the meaning of “excise”.)

The High Court first considered the meaning of duties of “excise” in s 90 in Peterswald v Bartley (1904) 1 CLR 497. The court (per Griffith CJ at 506) noted that: [W]henever in the Constitution the expression “duties of excise” is used, it is used in close juxtaposition with the expression “duties of customs”, as being a term relating to things of the same nature, and governed by the same rules. They are indeed in every respect analogous.

The court acknowledged the view of Quick and Garran (p 837) that English usage of the term “duties of excise” was wider than that in Australia, where “[t]he fundamental conception of the term is that of a tax on articles produced or manufactured in a country”, and concluded (at 509): [T]hat there were in the States many laws in force dealing with the subject, and that when used in the Constitution it is used in connection with the words “on goods produced or manufactured in the States” [s 93], the conclusion is almost inevitable that, whenever it is used, it 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. Reading the Constitution alone, that seems to be the proper construction to be put upon the term.

Accordingly, the court held that a fixed fee (£30 per year) imposed on the grant of a licence to brew beer did not constitute a duty of excise. It is unclear to what extent the court was influenced by the (ultimately rejected) doctrine of reserved State powers. The court’s observations on constitutional interpretation in Peterswald reveal influence by the doctrine (at 507); as noted by Mason CJ and Deane J: Philip Morris Ltd v Commissioner of Business Franchises (Vic) (1989) 167 CLR 399 at 427. However, Dawson J was probably correct in his view that the definition of “excise” in Peterswald: Can… stand independently of the doctrine, [and] the approach which it reflects was adopted in [the Petrol case] by a majority of justices, including Isaacs J, some of whom formed a majority in the Engineer’ case. (Capital Duplicators Pty Ltd v ACT (No 2) (1993) 178 CLR 561 at 600)

The concept of duties of excise was extended to include a tax on the sale by the producer of a commodity, being in effect a tax on the producer: Commonwealth & COR Ltd v South Australia (the Petrol case) (1926) 38 CLR 408, applied in John Fairfax & Sons Ltd v New South Wales (1927) 39 CLR 139. Most justices, nevertheless, accepted the interpretation of “excise” duties in Peterswald v Bartley; Isaacs J, for example, remarked that licences to sell goods may be an excise “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 698

[9.50]

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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 they may not be” (Petrol case, at 426). Rich J, alone holding the legislation invalid, foreshadowed the interpretation adopted by a majority of the court 23 years later in Parton and confirmed in Ha v New South Wales (1997) 189 CLR 465. The definition of excise was significantly broadened in Matthews v Chicory Marketing Board (Vic) (1938) 60 CLR 263, in which the High Court held a tax to be a duty of excise even though it bore no direct relation to the quantity or value of the goods taxed. A Victorian tax on producers of chicory at the rate of £1 per half-acre of land planted with the crop was held (by a 3:2 majority) to constitute a duty of excise. Latham CJ (with whom McTiernan J concurred) dissented, holding that a tax bearing no relation to the quantity or value of the goods could not be a duty of excise (at 277–279). Dixon J, who delivered the principal majority judgment, stated (at 302–304): A definition which makes quantity and value the only basis of … “excise” has no foundation either in history, economic or fiscal principle. The basal conception of an excise in the primary sense which the framers of the Constitution are regarded as having adopted is a tax directly affecting commodities. … By calculating [here] the levy upon the number of half acres which the producer plants with chicory the board makes it at least theoretically possible that owing to a failure of his crop the levy upon him has little or no relation to his actual production of chicory. But the basis adopted for the levy has a natural, although not a necessary, relation to the quantity of the commodity produced. … By adopting area planted as the criterion of the amount of the levy upon each producer the board has taxed the production of the commodity as effectually as if it had selected, for instance, the weight of the chicory gathered in its raw state, the quantity treated or the gross returns. For it has placed upon an essential step in production, namely, planting, an impost computed quantitatively … [If the very narrow interpretation were adopted] it would expose the constitutional provision made by s 90 to evasion by easy subterfuges and the adoption of unreal distinctions. … [I]f 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.

Rich and Starke JJ reached the same conclusion (at 281 and 286). Dixon J’s observations that the tax in Matthews was “computed quantitatively” and bore a “natural … relation to the quantity of the commodity produced” do not suggest that he would nevertheless have held the tax to be a duty of excise had it borne no relation whatever to the quantity or value of the commodity produced. Yet that appears to have been the interpretation placed on Matthews by some of the majority justices in Hematite Petroleum Pty Ltd v Victoria (1983) 151 CLR 599 (see [9.90]). Although not formally overruled, this was essentially the fate of Peterswald v Bartley in the important case of Parton v Milk Board (Vic) (1949) 80 CLR 229, which extended the concept of duties of excise to include taxes on retail sales. In that case the High Court (by a 3:2 majority) held a Victorian levy on retailers of milk of ¼d per gallon sold invalid as imposing a duty of excise. In a much-cited passage, Dixon J remarked (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. [9.50]

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Part III: The Legislative Power of the Commonwealth

(Rich and Williams JJ (at 251–252) reached the same result on similar reasoning.) Although based upon economic considerations, the reasoning of the Parton majority is nevertheless dogmatic and does not depend upon the particular circumstances relating to the relevant commodity. As Barwick CJ noted in Anderson’s Pty Ltd v Victoria (1964) 111 CLR 353 at 365: To conclude that the tax is an excise because it is in substance a tax upon the relevant step in connection with the goods is to find that it is a burden on manufacture or production and thus to satisfy economic theory, whether or not the supposed economic consequences of an excise can be seen to be involved in the case in question. (emphasis added)

Professor Geoffrey Sawer criticised the reasoning of Dixon J in Parton as “based on pseudo-history and unresearched economic theory”: G Sawer, “The Future of State Taxes: Constitutional Issues”, in R L Matthews (ed), Fiscal Federalism: Retrospect and Prospect (1974), 193 at p 199. For a critical comment by an economist, see B Grewal, “Economic Integration and Federalism: Two Views from the High Court of Australia”, in Upholding the Australian Constitution, Vol 9: Proceedings of the Ninth Conference of The Samuel Griffith Society (1997), 127 at pp 142-145. Grewal concludes that (at pp 144-145): The reasoning on which the Parton formulation is based has been shown to be lacking in support from history and contemporary economic theory … [T]he formulation is essentially a backward-looking interpretation as it is based on unsubstantiated and outdated hypotheses about federalism, which have no relevance in contemporary thought on the subject.

Latham CJ and McTiernan J dissented in Parton. Their Honours would have applied Peterswald v Bartley (at 245 and 267). McTiernan J concluded (at 264–245) that the term “excise” was employed in a narrower sense in s 90 than in other contexts. In an obiter dictum in Parton, Dixon J remarked (at 263) that he would not regard as a duty of excise “a licence fee in respect of a business calculated on past business done; something like the licence fee of a licensed victualler calculated on the amount expended by him in the previous year in purchasing liquor”. Eleven years later, Dixon CJ felt obliged to “repent”, stating that his observation on the liquor licence fee was “entirely wrong”: Dennis Hotels Pty Ltd v Victoria (1960) 104 CLR 529 at 539. Parton effectively excluded the States from the field of sales taxes, but its full impact was not felt until Ha, almost 50 years later. Two factors combined to hold Parton largely at bay: the “franchise cases” and the legalistic “criterion of liability” approach to the interpretation of “excise” developed by Kitto J and adopted in later years by Gibbs CJ, Wilson and Dawson JJ. The line of “franchise cases” began with Dennis Hotels, which includes a useful exposition of the three principal modern approaches to the interpretation of “duties of excise” in s 90.

Dennis Hotels v Victoria [9.60] Dennis Hotels Pty Ltd v Victoria (1960) 104 CLR 529 [The Licensing Act 1958 (Vic), s 19(1)(a) and (b) imposed fees on the grant or renewal of (inter alia) a victualler’s licence and a temporary licence, respectively. The former fee was 6% of the value of liquor purchased for the premises during the year ending 30 June preceding the date of the application for the grant or renewal. The latter fee was £1 per day plus 6% of the value of liquor purchased for sale under the licence. Section 19(1)(a) was held valid and s 19(1)(b) invalid for imposing a duty of excise by differently constituted 4:3 majorities, with Menzies J alone in the majority on both issues. Both fees were held valid by Fullagar, Kitto and Taylor JJ and both invalid by Dixon CJ, McTiernan and Windeyer JJ.] Dixon CJ: 539 It is … an undeniable proposition that… because of the [impugned] provisions … no liquor can be bought by retail in Victoria unless in respect of it someone has paid, has become liable to 700

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Dennis Hotels v Victoria cont. 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 6% 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 540 “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. … 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. … 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 brief statement in Matthews v Chicory Marketing Board (Vic) (1938) 60 CLR 263 that “The basal conception of an excise in the primary sense which the framers of the Constitution are regarded as having adopted is a tax directly affecting commodities” ((1938) 60 CLR 263 at 303) may need elaborating but it expresses my view of the substance of the provision. The second matter which perhaps arises as to the connotation of “excise” 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 of any of the various persons through whom they pass in the course of distribution. Upon this I have expressed my view in Matthew’ Case (at 291–303) and 541 in Parton’s Case (at 260, 261), where there is a qualification with respect to consumption. I have begun by framing the foregoing proposition because it appears to me to represent the effect of the provisions of the Licensing Act 1958. … The first is because it is the operation of the provisions of the Act considered together which appears to me inevitably to show that an excise is imposed. They operate together to burden liquor as a commodity with 6% upon the wholesale price. … If you proceed by looking at each particular licensing provision of the Act connecting it only with the man licensed you are very likely to fail to perceive that, whatever the purpose of licensing the man, that is to say the description of trader in or producer of liquor, the purpose of levying 6% upon the wholesale price of the liquor permeates the whole and is put into effective operation. The second reason for stating first the combined effect of the provisions as the imposition upon the commodity of a tax of 6% of the wholesale price and treating that as decisive is that it enables one better to see the bearing of certain objections that are made to placing the exaction of 6% of the purchase price within the category of a duty of excise. Now the occasion when the percentage upon sales or purchases as the case may be is to be paid is on the renewal of the particular description of licence. It is convenient to neglect for the moment 542 the grant of a new licence. … The “fee” comprises the percentage, that is 6% of … the sales or purchases over the period of twelve months ending on 30th June last. … It seems plain enough that the provisions are all framed on the footing that a licence will be renewable and will continue indefinitely whether the licensee be the same, or there be a transfer or some new licensee coming in for the owner or mortgagee or as the case may be, or there be a removal of the licence to another site (cf s 120). In a general scheme of the kind which the provisions disclose, it appears to me that no significance on the question whether the tax is an excise can be found in the fact that no attempt is made to cover the contingency that a business carried on under a licence may be abandoned at the end of a year and that no renewal may be obtained which would form the occasion for payment of the tax … Plainly 543 it was the general conception that when the renewal of the licence was obtained 6% on the liquor bought during a convenient year of account for sale on premises should be paid to the Treasury and that this should go on de anno in annum.. [9.60]

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Dennis Hotels v Victoria cont. 546 The provisions deal with the distribution of liquor in Victoria as a continuous operation and impose the tax accordingly. That is one reason why it appears to me to be quite immaterial that the payment of the tax made in, say, January of a given year is calculated on the liquor purchased during the twelve months ending on the last day of the previous June for sale on the premises or as the 547 case may be. … It will be seen that under the system which operates … the tax of 6% 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. [After noting that it is “common knowledge” that the great proportion of liquor, especially beer, is produced in Victoria, His Honour continued:] The fact that the licensing of a licensed victualler and for that matter the registration of a club forms part of the method of controlling the sale of liquor, the conduct of hotels and so on appears to me quite immaterial, as does the question whether the licence in the hands of the licensee is a valuable privilege for which the payment of the tax may be regarded as part of the consideration. Section 90 is quite unconcerned with the position of the individual. It 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 6% 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 548 channel it may proceed: it is in other words an addition to the excises the Commonwealth Parliament has chosen to impose on liquor. … The tax is in my opinion an excise on liquor. [McTiernan and Windeyer JJ delivered judgments to similar effect, McTiernan J abandoning his earlier view in light of Parton] Kitto J [held both the impugned fees valid]: 559 [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 … is that when … excise duty 560 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 … will enter – as a charge relating to those goods specifically. … But the impost is nevertheless a duty of excise if it operates as a tax upon the taking of a step in a process of producing or distributing goods. 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. … 563 The matter cannot be disposed of in favour of the defendants simply by saying … that in s 19 the fees are described expressly as fees “for” the licences, and that in substance they constitute the payment which the licensee must make to the State in return for the authority which the licence gives him. … The fact which makes a licence fee not a duty of excise is not that the exaction is for the licence; it is that the exaction is only in respect of the business generally, and not in respect of any particular act done in the course of the business. But the relation of the licence fees now in question to the goods to be sold under the licence, consisting, as it does, merely in the fact that without the licence the sales would not be made, does not connect any part of the fee with any particular sale: on the contrary, it is simply the relation between a fee for a licence to carry on a business and the business itself. The fee is payable in full when the licence is taken out; and no right to a refund arises if the privilege which the licence gives is not fully availed of, as, for instance, if sales cease during the year in consequence of a forfeiture of the licence or some catastrophe to the premises. I put aside, therefore, the relation between the licence fee and the sales made under the licence. The more difficult problem is that which arises from the relation between the fee and the purchases or sales on which the amount of the fee is calculated. Let me go over the paragraphs of s 19(1) and identify the purchases or sales upon which the amount in each case is made to depend. 702

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Dennis Hotels v Victoria cont. The goods which the general provision in par (a) selects consist of the whole of the liquor purchased in the year ended on the preceding 30th June for the premises or vessel to which the licence 564 applies … Paragraph (b) is exceptional, (as it has to be, having regard to the temporary character of the licences to which it applies), for it, alone of the paragraphs which fix fees by reference to liquor purchased or sold, does not base the fee upon the purchases or sales of a period which expired before the relevant grant or renewal of the licence. It selects the liquor purchased for sale or disposal under the licence; but the point to notice is that it takes no account of the time when the purchases are made: they may be made before the licence is granted. In no case except the last-mentioned do individual purchases or sales attract a liability. Take first the victualler’s licence fee. 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. If a particular licensed victualler buys liquor for his premises he does not, by doing so, make himself liable to pay one penny to the Crown. If he renews his licence after the ensuing 30th June, his doing so will involve him in a liability under the section, and past purchases, (which in the case supposed happen to have been his purchases) will be taken into account in working out the amount of his liability according to the statutory formula. But if he does not renew it, he will pay nothing under the section in respect of the purchases; and neither will anyone else who does not take a grant or renewal of a licence for the premises. If someone else does renew the licence, or gets a new licence for the premises, that person will pay the fee, and the fact that he had nothing to do with the purchases on which it is based will not matter. In these circumstances it seems to me very difficult indeed to say that the fee is, in the relevant sense, a tax on each purchase of a quantity of liquor, and therefore a tax on the liquor. Even taking one circumstance alone, the difficulty is, to my mind, insuperable; I mean the circumstance … 565 that the person making each individual purchase does not by doing so become liable for the fee or any part of it. …. 566 … The figures for past transactions may, of course, not provide in every case, or perhaps in any case, an accurate indication of future business. But if you are going to lay down a formula for general application the figures of the most recently closed financial year are probably as convenient a guide as you can get. And the important point is that in so far as they are a guide to the probable volume of business in the near future they are a guide to the relative values, as between different businesses in the same class, of the advantages which licences will confer. True to the characterization which this suggests, the fees are not only described as fees “for” the licences; they are made payable by the persons who take out the licences and in respect of their doing so. The purchases have been made at earlier dates and when made were free of tax. They never are taxed. The fact that they were made is made relevant to the quantum of the fee which some person probably (though not certainly) will have to pay; but to have a bearing upon quantum is a very different thing from being taxed. Even if the purchases had not been made – for example if the licences were the first licences granted for the premises – the liability for the fee would still arise on the grant of the licences … 567 In other words, the fees are taxes imposed not “in respect of commercial dealings” (Attorney-General for British Columbia v Kingcome Navigation Company (1934) AC 45 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 victualler’s licence fees are not duties of excise. … 568 I turn to the temporary victualler’s licence fee. … 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 569 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 par (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. [Taylor J also held both fees valid. His Honour noted the regulatory nature of the licensing legislation: “[T]he requirement that liquor shall not be sold … without a licence appears as a substantive provision [9.60]

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Dennis Hotels v Victoria cont. and not merely as an adjunct to a revenue statute” (at 576). The fees were “payable by [the licensee] for the right which his licence confers upon him” (at 575).] Fullagar J: [In likewise holding both fees valid, his Honour noted that the case involved three critical questions regarded as essential in Peterswald v Bartley:] 554 (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? … Probably no one would dissent from the broad proposition that it is an essential element in the character of a duty of excise that it should be a tax “upon goods”. … And what is meant by saying that a tax is a tax upon goods is that the person by whom the tax is payable is charged by reason of, and by reference to, some specific relation subsisting between him and particular goods. A tax will be rightly regarded as a tax upon goods if the person upon whom it is imposed is charged by reason of and by reference to the fact that he is the owner, importer, exporter, manufacturer, producer, processor, seller, purchaser, hirer or consumer of particular goods. This list may not be exhaustive. Duties of customs and duties of excise are particular classes of taxes “upon goods”. The relation of taxpayer to goods which characterizes a duty of customs is found in the importation or exportation of goods. The taxpayer is taxed by reason of, and by reference to, his importation or exportation of goods. … 555 … [T]he 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 characterizes 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 characterizes 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. [His Honour then proceeded to outline the rationale from this case:] In the first place, there is the reference in s 93 to “duties of excise paid on goods produced or manufactured in a State”. The words “produced or manufactured” seem clearly to refer to the occasion of the imposition of the duty, and to be intended to cover all duties of excise and not merely a particular class of duties of excise. Then there is the repeated collocation in the Constitution of the term “duties of customs” with the term “duties of excise”. The collocation occurs in ss 55, 86, 87, 90 and 93. This seems amply to warrant the view of Griffith CJ that the duty intended by the term “duty of excise” is a duty “analogous to a customs duty”, and this view fits in with what one would suppose to be the policy behind the relevant provisions of the Constitution. I would myself respectfully agree with the observations of McTiernan J in Parton …. 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 556 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 229 at 264, 265). … I am not satisfied that it is an essential element of a duty of excise that it should be measured by quantity or value of goods. … If a State were to impose a tax of £100 per month on all distillers of spirits, I should feel difficulty in saying that the tax was not a duty of excise. It would be payable by reason of, and by reference to, the production or manufacture of goods. I should feel the same difficulty, if the same tax was imposed on importers of spirits, in saying that it was not a duty of customs. So, in the present case, I have difficulty in saying that a tax imposed upon retailers of liquor as such is a duty of excise if it is measured by quantity of liquor purchased, but is not a duty of excise if it is measured by annual value of licensed premises. 704

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Dennis Hotels v Victoria cont. 557 … The view of Dixon J [in Parton v Milk Board (Vic)] was … directly opposed to that which I have expressed: his Honour repeated, with a very slight modification, what he had said in Matthews’ case (1938) 60 CLR 263. But Rich and Williams JJ who delivered a joint judgment, were of opinion that a duty of excise “must be imposed so as to be a method of taxing the production or manufacture of goods” ((1949) 80 CLR 229 at 252). This is my view, and I cannot therefore regard their judgment as inconsistent with that view. Their Honours proceeded: “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 558 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” ((1949) 80 CLR 229 at 252). With this I am, with respect, unable to agree. The “tax” payable by the dairyman was not imposed on production or manufacture; it did not affect production or manufacture in any way: what was done was a taxing of the dairyman, or of what the dairyman did with milk, not a method of taxing production or manufacture. … The two classes of licence in question [on the present facts] are the victualler’s licence and the temporary licence. In each case the licence fee is payable by the licensee, and it is quantified by reference to past purchases of liquor by him. It does not fall upon any producer or manufacturer, and it does not in any way affect production or manufacture. The quantification is arrived at by taking into account all purchases of liquor made in the relevant period, whether produced or manufactured in Victoria or imported from abroad or from another State by the vendor or by the licensee himself. The exaction is not, in my opinion, a duty of excise within the meaning of s 90. Menzies J: 591 [The victualler’s licence fee] is not … a sales or a purchase tax because … 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 … 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) by Latham CJ and Dixon J ((1949) 80 CLR 229 at 248, 263, respectively). This was also the view of Isaacs J as appears from his statement in Commonwealth and Commonwealth Oil Refineries Ltd v South Australia (1926) 38 CLR 408 at 426. 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 6% 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.

[9.70]

1.

2.

Notes&Questions The judgment of Menzies J was the decisive one since he was the only justice in the majority on both fees. Three justices (Fullagar, Kitto and Taylor JJ) held both fees valid, and three (Dixon CJ, McTiernan and Windeyer JJ) held both invalid. The principal distinction between the two fees was that the valid victualler’s licence fee was back-dated while the invalid temporary licence fee was not. Can Dennis Hotels therefore be considered authority for the proposition that this was a critical distinction, even though six of the seven justices thought otherwise? Windeyer J viewed the purpose of s 90 and “its associated provisions” as being “to ensure the basic unity of the Australian economy in relation to trade and commerce” (at [9.70]

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601). A decade later, Barwick CJ expanded this vision, viewing s 90’s purpose as enabling Commonwealth “control of the national economy as a unity which knows no State boundaries, by a legislature without direct legislative power over that economy as such”: Western Australia v Chamberlain Industries Pty Ltd (1970) 121 CLR 1 at 17. More recently, proponents of a wide interpretation of “excise” have asserted that ss 51(ii) and (iii), 88, 90 and 92 “created a Commonwealth economic union, not an association of States each with its own separate economy”: Capital Duplicators Pty Ltd v Australian Capital Territory [No 2] (1993) 178 CLR 561 at 585 per Mason CJ, Brennan, Deane and McHugh JJ; Philip Morris Ltd v Commissioner of Business Franchises (Vic) (1989) 167 CLR 399 at 426 per Mason CJ and Deane J. (But compare the more restrained language of the majority in Ha v New South Wales (1997) 189 CLR 465 at 494–496 ([9.120]). The Ha minority accepted only the creation of a “customs union, not an economic union if what is meant … is a single economy”: 189 CLR at 511 (below, [9.130])). Is there any evidence to support the broader assertions? Compare P Hanks, “Section 90 of the Commonwealth Constitution: Fiscal Federalism or Economic Unity?” (1986) 10 Adelaide Law Review 365 at 382: “[I]t is almost certain that the colonial politicians who agreed to [s 90’s] insertion in the Constitution gave no thought to reinforcing the Commonwealth’s capacity to manage the Australian economy.”

3.

If the constitutional framers had intended the Commonwealth to “control the national economy” why did they effectively divide legislative power over it? Why, for example, was the Commonwealth not granted power over intrastate commerce? Note that Dixon J viewed the purpose of s 90 as more limited: “to give the [Commonwealth] 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”: Parton (at 260). Moreover, as Peter Hanks has noted, Dixon J’s proposition is less a statement about constitutional purpose than about means to achieve some purpose: “[I]t might better be described as a statement of means (‘real control of the taxation of commodities’) by which an unstated or assumed objective is to be achieved” (Hanks (1986) at 371). See also C Caleo, “Section 90 and Excise Duties: A Crisis of Interpretation” (1987) 16 Melbourne University Law Review 296 at 308 (noting that Dixon J in Parton expressly acknowledged that the purpose of s 90 was merely “assumed”). Dennis Hotels could have been considered as lacking authority because there was no reasoning by a majority of the justices to support the decision; cf the treatment of Theophanous v Herald & Weekly Times Ltd (1994) 182 CLR 104 in Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 554–556. However, when the issue next arose in the High Court it did not take this view. In Dickenson’s Arcade Pty Ltd v Tasmania (1974) 130 CLR 177, the High Court applied Dennis Hotels (with only McTiernan J dissenting) to uphold Pt III of the Tobacco Act 1972 (Tas) which imposed a 2.5 % (max.) licence fee back-dated six months on the retail sale of tobacco. Menzies J (with whom Stephen J concurred on this point) affirmed the decision in Dennis Hotels (at 211–212, 236), which Barwick CJ, Gibbs and Mason JJ were prepared to accept as authority for what it decided (at 188, 226, 240). But what was that: the validity of back-dated licence fees or only such fees on licences to sell goods? Mason J clearly held the latter view (at 240) and in M G Kailis (1962) Pty Ltd v Western Australia (1974) 130 CLR 245 at 265, decided on the same day. Gibbs J stated both views on the same page in Dickenson (at 226), but adopted the former position in Kailis (at 259). These views were repeated by these justices in

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Gosford Meats Pty Ltd v New South Wales (1985) 155 CLR 368. Barwick CJ held that Dennis Hotels should be applied “in relation to a case which has, if not precisely, at least substantially and indistinguishably the same statutory and factual situation” (at 188), which was the case in Dickenson (at 189). (Barwick CJ did not sit in Kailis.) 4.

However, as noted above, Dennis Hotels rested on very weak doctrinal foundations. The instability of the line of “franchise cases” which it spawned was already evident in Dickenson, for two of the justices who applied Dennis Hotels stated that, had the issue been free of authority, they would probably have held the fees invalid as duties of excise (see Barwick CJ at 189 and Mason J at 240). Barwick CJ (at 188) expressed a preference for the reasoning of Dixon CJ, McTiernan and Windeyer JJ in Dennis Hotels.

5.

The instability noted above was demonstrated by the succession of cases in which franchise fees modelled on Dennis Hotels. A 10% back-dated licence fee on the sale of petrol was upheld in H C Sleigh Ltd v South Australia (1977) 136 CLR 475 on the authority of Dennis Hotels and Dickenson, although Jacobs J dissented on the ground that the purpose of the legislation was to raise revenue rather than to regulate commercial operations (at 524–526). Taylor J had relied on similar reasoning in Dennis Hotels but Dixon CJ had expressly rejected it (at 576 and 547 respectively), as did Gibbs J in Dickenson (at 225). However, it was revived in recent cases, as is noted at [9.140]. Jacobs J’s dissenting judgment in H C Sleigh is notable for its warning that the Dennis Hotels formula was being employed to “overcome the s 90 embargo on imposition of excise duties … It 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. In my opinion the time is now” (at 526). However, the halt was deferred a further 20 years, until Ha v New South Wales (1997) 189 CLR 465.

6.

A challenge to the Victorian back-dated licence fee on the sale of tobacco failed in Evda Nominees Pty Ltd v Victoria (1984) 154 CLR 311. The High Court held the relevant legislation to be “indistinguishable” from that upheld in Dickenson and declined to hear argument challenging the decisions in Dennis Hotels, Dickenson and H C Sleigh “particularly since the States have organised their financial affairs in reliance on them” (at 316 per Gibbs CJ, Mason, Murphy, Wilson, Brennan and Dawson JJ).

Developments outside the Dennis Hotels stream [9.80] Doctrine on excise continued to evolve in cases outside the Dennis Hotels stream. In

Bolton v Madsen (1963) 110 CLR 264, the last excise decision of the Dixon Court, the six participating justices produced a single joint judgment, generally considered to have been written principally by Kitto J. The court remarked: It is now established that for constitutional purposes duties of excise are taxes directly related to goods imposed at some step in their production or distribution before they reach the hands of consumers. … [I]t is the criterion of liability that determines whether or not a tax is a duty of excise. The tax is a duty of excise only when it is imposed directly upon goods or, to put the same thing in another way, when it directly affects goods, and to establish no more than that its imposition has increased the cost of putting goods upon the market by a calculable amount falls short of establishing the directness of relation between the tax and the goods that is the essential characteristic of a duty of excise. (Dixon CJ, Kitto, Taylor, Menzies, Windeyer and Owen JJ at 271. McTiernan J did not sit in this case.) [9.80]

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This definition of “excise” was accepted both by justices adopting the “substantial operation” approach to determining whether a tax is a duty of excise (eg, Dixon, Barwick and Mason CJJ and the majority in Ha) and by those adopting the “criterion of liability” approach (principally Kitto J, Gibbs CJ and Wilson J). However, the former essentially abandoned the requirement for a “direct” relation between the tax and the goods: see, especially, Hematite Petroleum Pty Ltd v Victoria (1983) 151 CLR 599. How is one to explain the fact that Dixon CJ joined a joint judgment in Bolton v Madsen endorsed the “criterion of liability” test which he rejected in cases such as Dennis Hotels? Might the explanation be that on the eve of his retirement, he accorded legal certainty greater weight than his own interpretation of the Constitution? (Compare Dawson J’s participation in the joint judgment in Lange v Australian Broadcasting Corporation (1997) 189 CLR 520, decided on the eve of his retirement.) In Anderson’s Pty Ltd v Victoria (1964) 111 CLR 353, in his first excise decision, Barwick CJ essentially endorsed the Bolton v Madsen definition of a duty of excise (at 364) but was unwilling to accept the criterion of liability as the touchstone of validity. In an oft-quoted passage (at 365–366), he adopted a factorial approach to determining whether a tax is a duty of excise: [I]n 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. But in the end what must be decided is that the tax is in substance a tax upon the relevant step. That being the central question in a controversy as to the nature of the tax, it will not, in my opinion, necessarily be resolved by the form of the tax or by identifying what according to that form the legislature has made the criterion of its imposition, however important in any particular case those matters may be.

Barwick CJ was criticised for departing from the “consensus” achieved after “arduous backing and filling” in Bolton v Madsen: G Evans, “The Most Dangerous Branch? The High Court and the Constitution in a Changing Society”, in D Hambly and J Goldring (eds), Australian Lawyers and Social Change (Law Book Co, Sydney, 1976), 13 at p 70. However, the apparent unanimity in Bolton v Madsen proved to be illusory, even among the participating justices: see Coper (1976) at 4. Under the Bolton v Madsen definition of a duty of excise, the relevant line of dealings with goods ends when they reach the consumer. Can a tax on the consumption of goods be an excise? In the years before Parton, several justices had suggested that it could: see the Petrol Case at 435 per Higgins J, at 437 per Rich J; Matthews v Chicory Marketing Board (Vic) (1938) 60 CLR 263 at 304 per Dixon J. However, in Parton (at 261), Dixon J excluded taxes on consumption from duties of excise in deference to an obiter dictum of the Privy Council in a Canadian case, Atlantic Smoke Shops Ltd v Conlon [1943] AC 550 at 564–565. Logically, the High Court’s reasoning in Parton would suggest that a tax on consumption could constitute a duty of excise since it adds to the cost of the goods and consequently affects demand for them. It would suggest that a tax on consumption would have a practical effect similar to that of a tax on production; hence, in substance it is a tax on production and, therefore, a duty of excise. Gibbs J acknowledged this line of reasoning in Dickenson (at 218–219), and Barwick CJ also remarked (at 185) that: “[t]here was no logical reason … for ending at the point of entry into consumption the area which might yield a duty of excise”. Nevertheless, in Dickenson, the High Court decided to follow Dixon J in Parton in excluding consumption taxes from duties of excise: at 185–186 per Barwick CJ, at 222, 224 per Gibbs J, at 229, 230–231 per Stephen J, at 239 per Mason J. Only McTiernan J dissented: at 204–205. 708

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However, as Mason J remarked (at 239), “a tax on consumption which is not also a tax on sale of goods is a phenomenon infrequently encountered”. Indeed, both Barwick CJ and Mason J held the supposed “consumption tax” in Dickenson to suffer from this infirmity. In Ha v New South Wales (1997) 189 CLR 465, the majority held that it was “unnecessary to consider whether a tax on the consumption of goods would be classified as a duty of excise” (at 499–500). A related issue, whether a tax on the sale of second hand or “used” goods could be a duty of excise, was determined in the negative by the Full Court of the Federal Court in Commissioner for ACT Revenue v Kithock Pty Ltd (2000) 102 FCR 42 (dealing with used motor vehicles). The court held unanimously that High Court authority (Bolton v Madsen, Anderson’s Pty Ltd v Victoria and Dickenson’s Arcade) “determines that a tax on goods after they have reached the hands of consumers is not an excise” (at 50 [31]). The High Court refused special leave to appeal, noting that such an appeal “would not enjoy sufficient prospects of success to warrant a grant of special leave” (Kithock Pty Ltd v Commissioner for ACT Revenue (12 October 2001) per Gleeson CJ and Hayne J). Might it be argued, however, that second-hand or “used” goods are a different commodity from their new counterparts, especially if subjected to treatment, such as repair or re-conditioning, prior to sale? One of the most important decisions on excise is Hematite Petroleum Pty Ltd v Victoria (1983) 151 CLR 599, in which Mason J undertook a significant discussion of principle. Indeed, Hematite as a whole evidenced a hitherto rare explicitness regarding the purpose of s 90 and policy considerations in its interpretation. One commentator hailed the case as marking “the beginning of judicial ‘honesty’” in interpreting s 90 (N Dixon, “Section 90 – Ninety Years On” (1993) 21 Federal Law Review 228 at 236) while, for another, it stood out like “a light in a fog” in its explicit discussion of constitutional purpose (P Hanks (1986) at 372).

Hematite Petroleum v Victoria [9.90] Hematite Petroleum Pty Ltd v Victoria (1983) 151 CLR 599 at 628–635, 669 [The plaintiffs held pipeline licences under the Pipelines Act 1967 (Vic). They sought a declaration that s 2 of the Pipelines (Fees) Act 1981 (Vic) which inserted subss (2) to (8) in s 35 of the Pipelines Act 1967 was invalid because it imposed an excise by a State contrary to s 90 of the Constitution. The “pipeline operation fee”, was $10,000,000 (CPI adjustable) for 1981-1982 in the case of each of three trunk pipelines identified in s 35(8) by reference to their particular pipeline licences. The licences relating to the gas liquids pipeline and the crude oil pipeline were held by the plaintiffs; a third being held by the Gas and Fuel Corporation of Victoria. The fee for the pipelines which were not trunk pipelines was $40 per kilometre. … The plaintiffs recovered petroleum from submerged lands adjacent to the coast and brought it ashore from production platforms in the Bass Strait to a gas processing and crude oil stabilisation plant at Longford in Victoria. The petroleum was there processed and separated into three products which were carried by the plaintiff’s trunk pipelines. The gas liquids pipeline carried liquid petroleum gas to a fractional plant and crude oil tank farm located at Long Island Point in Victoria. The Gas and Fuel Corporation’s pipeline carried natural gas from the Longford plant to Melbourne. The plaintiffs sold and delivered this natural gas to the Gas and Fuel Corporation at Longford. The plaintiffs pleaded that the transportation of products through the pipelines was an integral step in the production of the products sold by the plaintiffs. They held permits to own and use the pipelines (ss 9 and 12 of the Act) and were granted licences to construct and operate the pipelines (ss 25 and 26), subject to the payment of the licence fees: s 35(1)(b). They argued that subss (2) to (8) of s 35 imposed a tax because the operation of the pipelines was a step in the production, manufacture or distribution of the petroleum products that they sold from the Long Island Point plant and hence invalid as an excise. The Court, by 4:2 majority, agreed, Gibbs CJ and Wilson J dissenting.] [9.90]

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Hematite Petroleum v Victoria cont. Mason J: 628 … [A]t its inception in England an excise duty was a tax imposing a burden on home production or manufacture … [on] articles which could not be taxed through the customs house. However, it came subsequently to denote a tax on the licences of those who dealt in “excisable commodities”. (See Quick & Garran, Annotated Constitution of the Australian Commonwealth (1901), p 837.) … [T]he close juxtaposition of the references to “duties of customs” and “duties of … excise” in s 90 together with the reference in s 93 to duties of excise “paid on goods produced or manufactured in a State” impressed the Court in Peterswald v Bartley (1904) 1 CLR 497. This consideration more than any other led their Honours to the conclusion that the constitutional conception of an excise was narrower than the English notion, being limited to “… 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” (at 509). [A] third point is that the broad effect of the later stream of authority has been to expand the concept of duties of excise and to extend it to taxes imposed upon the sale and distribution of commodities in some circumstances at least, after the process of production and manufacture has been completed. Accordingly, the Court has rejected the narrow view of excise – that it is confined to taxes upon production and manufacture [and] 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. In Bolton v Madsen (1963) 110 CLR 264 at 271–273 the Court … said that the tax must be directly related to the goods and the criterion of liability must be a step in the production, manufacture, sale or distribution of the goods. There is a direct relationship between the tax and the 629 goods if the tax is calculated by reference to the quantity or value of goods produced or dealt with in the relevant period. Conversely, it was said that to establish no more than that the imposition of the tax increased the cost of putting goods on the market by a calculable amount, for example, because the tax was imposed in a fixed amount as the fee for a licence, falls short of establishing the requisite relationship between the tax and the goods. Though expressed in general terms the formula was primarily designed to identify those taxes affecting sale or distribution which constitute an excise from those which do not … by emphasizing the need for a direct relationship between the tax and the goods, so that the amount of the tax inevitably formed a component of the price paid by the next person in line in the course of distribution from producer to consumer. Such a tax was a burden on home production and manufacture. By this means the Court sought to relate the expanded concept of excise back to the original notion expressed in Peterswald v Bartley that an excise was a duty on production or manufacture. … 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. [His Honour then quoted from Barwick CJ’s reasoning in Anderson’s (at 365) (see above at [9.80]) and referred to his agreement with this broad view of excise in Dickenson at 241. He also noted that the requisite relationship between the tax and the goods is more easily perceived when the tax is levied at time when the goods are in production than subsequently and continued:] 630 This is because the tax on its face appears to be an immediate burden on production or manufacture – it necessarily enters into the pricing of the goods, increasing the price which will be paid by purchasers down the line to the point of receipt by the consumer. A tax upon the sale or distribution of goods will apply to imported goods as well as to goods manufactured in Australia. If, in its application to imported goods, it constitutes a burden on home manufacture, it is because it lowers the demand for the goods generally by increasing the price of them. 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 710

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Hematite Petroleum v Victoria cont. 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 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 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 licencing 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. What, one might ask, was the high constitutional purpose intended to be served by prohibiting the States from imposing a tax in this very limited form? To prohibit the States from imposing a tax having an arithmetical relationship with goods produced or sold during a licence period, while leaving the States free to impose any other form of tax in respect of goods produced or sold, achieves 631 nothing. If this be the effect of s 90 is [sic] certainly adds nothing to the Commonwealth’s economic and financial powers. Yet it has been generally accepted that the grant of exclusive power to impose duties of excise in conjunction with a like power to impose customs duties, in a Constitution which frequently refers to the two duties – ss 86, 87, 90 and 93 “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” (Parton at 260 per Dixon J; see also, per McTiernan J at 264–265; Commonwealth and Commonwealth Oil Refineries Ltd v South Australia (1926) 38 CLR 408 at 437 per Rich J; Whitehouse v Queensland (1960) 104 CLR 609 at 618 per Dixon CJ; Western Australia v Chamberlain Industries Pty Ltd (1970) 121 CLR 1 at 17 per Barwick CJ; Dickenson’s Arcade at 238 per Mason J). Excise duties, like customs duties, are significant instruments for raising revenue. What is more important is that Parliament, possessing exclusive power to impose both forms of duties, can protect and stimulate home production by fixing appropriate levels of customs and excise duties. And it can lower the level of domestic prices by lowering customs and excise duties. By lowering customs duties alone it can put pressure on Australian producers and manufacturers to become more competitive. If the States had power to impose excise duties then the Commonwealth Parliament’s power to protect and stimulate home production and influence domestic price levels might be compromised. It is possible that by an exercise of the taxation power the Commonwealth could effectively prevent the States from imposing excise duties. A law enacted under s 51(ii) providing that no excise duties should be payable on designated goods would, by virtue of s 109, prevail over any inconsistent State law. This is not a reason for denying that the object of granting exclusive power to the Commonwealth was as I have expressed it to be. The Commonwealth’s control is stronger if it possesses exclusive power; then there is no potential for conflict between Commonwealth and State legislation. The possibility of the imposition of taxes on goods by the States in the period prior to the enactment of inconsistent legislation by the Commonwealth undermines the Commonwealth’s real control of the taxation of commodities and provides a further reason for rejecting the existence of s 109 as a basis for narrowing the ambit of 632 the Commonwealth’s exclusive power under s 90. In any case, to make the power exclusive is to free its exercise from some of the political controversies and constraints which would inevitably surround any attempt by the Commonwealth Parliament to pass inconsistent legislation designed solely to override a State law. 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. [9.90]

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Hematite Petroleum v Victoria cont. 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 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 ((1938) 60 CLR 263 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 633 that of quantity or value will not prevent the tax falling within the description, duties of excise. The contrary 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 at 304 per Dixon J; see also Western Australia v Chamberlain Industries Pty Ltd (1970) 121 CLR at 14; Logan Downs (1977) 137 CLR at 76). The Bolton v Madsen strict criterion of liability bears more than a haunting resemblance to the direct legal operation test formerly applied in s 92 cases. The similarity of the criteria is apparently to be explained by the circumstance that the question in each instance is for a burden – in the one case on home production, in the other on interstate trade and commerce. The philosophy which underlies the two criteria 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 (see Matthews (1938) 60 CLR at 303–304; Chamberlain at 15; Dickenson’s Arcade at 241). Otherwise the constitutional prohibition is reduced to a formula which lends itself to evasion. … The criteria enunciated by Barwick CJ in Anderson’s (at 365) are a more reliable guide to what constitutes an excise. It has been said that a fee charged for the privilege of carrying on an occupation, for example, a lump licence fee, is not an excise (Dennis Hotels at 560 per Kitto J). This is so, so long as the licence fee is not a tax upon or in respect of the goods. … (See also per Dixon CJ at 547; Dickenson’s Arcade at 225 per Gibbs J.) There are many illustrations, notably in England, of fees charged for licences to carry on an occupation which have been regarded as an excise (W Harrison Moore, The Constitution of the Commonwealth of Australia (2nd ed, 1910), p 515). This is because the fee was not merely a fee for the privilege of carrying on a business or activity; it was also a tax upon goods. Where the fee for a licence to sell a commodity is a lump sum that is small or relatively small in amount it is easier to conclude that it is a fee for a privilege or that, if it be a tax, it is not a tax on the commodity. Where, however, though the fee is expressed to be for a licence to produce or manufacture, the terms and practical operation of the law show that it is exacted in virtue of the quantity or value of units produced or manufactured, it is a tax upon goods. Here the significant features of the pipeline operation fee are: (1) that it is levied only upon a trunk pipeline, that is, [those] 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 712

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Hematite Petroleum v Victoria cont. 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 … 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 635 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. Finally there is the fact that the Act itself discloses a relationship with the hydrocarbons conveyed by the trunk pipelines. I earlier set out the terms of the definition of “Trunk pipeline” in s 35(8). That definition makes specific mention of the pipeline licence numbers issued in relation to each trunk pipeline. It is not possible to ignore those references and to say, as the defendant says, that the Act makes no mention of hydrocarbons. [Brennan J reached the same conclusion, agreeing with the reasons of Mason J (at 659). Deane J declined to adopt any definition of “excise” (at 664–665). His reasoning is essentially similar to that of Mason J. He also endorsed the factorial approach of Barwick CJ in Anderson’s, adding as a factor “whether the amount of the tax bears a discernible relationship to the quantity or value of the goods manufactured or produced” (at 666). Murphy J held the pipeline operation fee invalid as a duty of excise because it was a State tax on production in that State (at 639–640). Gibbs CJ and Wilson J dissented. Gibbs CJ held that the tax fell outside the criteria in Bolton v Madsen: it was insufficiently related to the quantity or value of the hydrocarbons conveyed and, moreover, taxed not production, but the right to use the pipeline (at 623–624). Wilson J held the fee not to be a duty of excise on the former ground: “[T]he tax is not a duty of excise because it lacks any or any sufficient relation to goods” (at 651).]

[9.100]

1.

Notes&Questions

Deane J commented in Hematite (at 660–662) on the constitutional purpose of s 90, seen together with s 51(ii) and (iii): The people of a State were not to be disadvantaged, in relation to the people of any other State, by the burden of higher customs or excise duties, by less favourable treatment as regards bounties on production or export of goods, or by restriction upon access, for themselves, their goods and their legitimate commercial endeavours, to the territory and markets of other States … [T]he provision of s 90 of the Constitution that the power of the Commonwealth Parliament to impose duties of excise shall be exclusive … – or some other means of ensuring uniformity of excise duties throughout Australia – was a necessary ingredient of any acceptable scheme for achieving the abolition of internal customs barriers which was an essential objective of the Federation and for ensuring that the people of the Commonwealth were guaranteed equality as regards the customs and excise duties which they were required to bear and the bounties which they were entitled to receive. [9.100]

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Nor should that provision of s 90 be seen as concerned with matters of form rather than substance or as intended to confer no more than an illusory protection which a State can destroy by imposing what is in substance an excise duty under some other guise.

2.

3.

4.

5.

For later comments by Deane J, see Dixon (1993) at 236. Mason J’s observation that a tax which “enters into the cost of the goods” and is therefore reflected in their ultimate price will be a tax “upon or in respect of goods” (Hematite at 632) has been criticised as too broad for it could, eg, result in land and payroll taxes being considered duties of excise: see Hematite per Gibbs CJ at 617, and at 650–651 per Wilson J (See also Gosford Meats Pty Ltd v New South Wales (1985) 155 CLR 368 at 413 per Dawson J) Latham CJ (dissenting) had made similar observations many years earlier: Matthews (1938) 60 CLR 263 at 278–279. For the argument that State payroll taxes contravene s 90, see G Pearson and G Lehmann, “Are State Payroll Taxes Unconstitutional” (1990) 24 Taxation in Australia 864. As Professor Neil McLeod has noted, whether a tax is reflected in the price of goods “will depend largely on market conditions, not the form of the tax … The actual outcome will depend on the elasticity of consumer demand for the particular product and the elasticity of supply for capital and labour in the industry.” (McLeod (1994) at 489–490). See, likewise, Ha v New South Wales (1997) 189 CLR 465 at 509 per Dawson, Toohey and Gaudron JJ (at [9.130]). Gibbs CJ considered the limitations imposed on the States by s 90 to be “artificial” and alluded to the States’ financial difficulties, especially under the uniform tax regime (Hematite at 617). Is Gibbs CJ’s allusion to economic and political considerations regarding State fiscal autonomy consistent with his legalistic interpretation of “excise”? As Peter Hanks queries: “How is it possible to serve those broad economic objectives if economic considerations are excluded from the analysis?” (Hanks (1986) at 369). Indeed, is it proper to take these considerations into account in interpreting the Constitution? To what extent can Hematite be considered authority for the proposition that a large fixed fee on the production of goods will be a duty of excise? Is the decision compatible with Matthews v Chicory Marketing Board (Vic) (1938) 60 CLR 263? Mason J appeared to believe that the different decisions on the validity of the two licence fees in Dennis Hotels resulted from the application of the “Bolton v Madsen formula”, that is, the criterion of liability test (Hematite at 630). But the decisions in Dennis Hotels represented the reasoning only of Menzies J. Kitto J, the author of the criterion of liability test, held both fees valid in Dennis Hotels.

More recent developments [9.110] More recent excise cases have all arisen in the Dennis Hotels stream. In Gosford

Meats Pty Ltd v New South Wales, the High Court held, by a majority of 4:3, that Dennis Hotels and Dickenson did not apply to fees on licences to produce goods. A NSW fee on an annual licence to operate an abattoir calculated at a prescribed rate for each animal slaughtered during the preceding year (ranging from 1.25 cents per sheep to 10 cents per head of cattle) was held invalid as a duty of excise. In a joint judgment, Mason and Deane JJ distinguished Dennis Hotels and Dickenson on grounds both of precedent and principle. Their Honours held that the back-dated licence fee in Dennis Hotels would have been invalid had the licence been one to produce, rather than sell, goods because Fullagar J would have held it invalid as a duty of excise, thereby converting a majority in favour of validity into a majority against (at 385–386). Moreover, “the Dennis Hotels formula” could not be extended into “the 714

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heartland of duties of excise, namely the manufacture and production of goods” (at 385). “Viewed as a matter of substance”, Mason and Deane JJ concluded, the question whether the licence fee at issue in Gosford was a duty of excise “is susceptible of but one answer”, viz “yes” (at 385). Murphy and Brennan JJ reached the same conclusion. In what was to be his last decision on s 90, Murphy J re-iterated his view that a State duty of excise was a tax on production in that State. Gibbs CJ, Wilson and Dawson JJ dissented, also on grounds both of precedent and principle. Their Honours would have applied Dennis Hotels, Dickenson and H C Sleigh (at 379, 399, 420). Gibbs CJ and Wilson J argued that the distinction between the production and sale of goods was inconsistent with the reasoning in Parton (at 379–380 and 399, respectively). Moreover, their Honours held, the abattoir licence fee failed to satisfy the criteria laid down in Bolton v Madsen. First, the licence fee was “an exaction for the privilege of operating the abattoir, and not a tax on anything done in the course of the operations” (at 380 per Gibbs CJ; likewise at 404 per Wilson J, at 420 per Dawson J). Secondly, there was “no natural or practical relation between [the] tax and any of the products [of] the abattoir” (at 381 per Gibbs CJ; likewise at 404 per Wilson J). But compare Matthews (1938) 60 CLR 263. The reasoning in Gosford highlights a fundamental issue regarding the reasoning in Parton and subsequent cases holding a tax on the retail sale of goods to be a duty of excise. Is such a tax a duty of excise because the concept of excise includes a tax on the distribution of goods, as held by Rich J in the Petrol case at 437 (see [9.50]) and Dixon J in Matthews, at 299, 304 (see [9.50])? Or rather is it because such a tax supposedly has the same economic effect as a tax on the manufacture or production of goods, which remains the essence of a duty of excise? On the latter view, taxes on the retail sale of goods were held to be duties of excise in order “to prevent what [the High Court] perceived as evasion of s 90” (Saunders, p 28). The language of Dixon J in Parton (Vic) (see [9.50]) supports the latter rationale, and this is even more explicit in the judgment of Rich and Williams JJ in that case (at [9.50]). See, likewise, Anderson’s Pty Ltd v Victoria (1964) 111 CLR 353 at 373–375 per Kitto J; Western Australia v Hamersley Iron Pty Ltd (No 1) (1969) 120 CLR 42 at 62 per Kitto J, at 71 per Owen J; Western Australia v Chamberlain Industries Pty Ltd (1970) 121 CLR 1 at 13 per Barwick CJ; Hematite Petroleum Pty Ltd (1983) 151 CLR 599 at 632 per Mason J. In 1992, in a questionable decision, the High Court decided (by a 4:3 majority) that s 90 limits the legislative power of the Territories as well as the States: Capital Duplicators Pty Ltd v Australian Capital Territory (No 1) (1992) 177 CLR 248. The most recent excise cases have involved back-dated fees on licences to sell goods, culminating in Ha v New South Wales (1997) 189 CLR 465.

Ha v New South Wales [9.120] Ha v New South Wales (1997) 189 CLR 465 [The Business Franchise Licences Act 1987 (NSW) imposed on the wholesale and retail sale of tobacco a monthly licence fee of $10 plus a prescribed percentage of the value of tobacco sold during the month commencing two months before the licence period. The prescribed percentage had risen from 30% in 1989 to 100% in 1995. The fees were held invalid as a duty of excise by a majority of 4:3.] Brennan CJ, McHugh, Gummow and Kirby JJ: 487 … 1. Must local production or manufacture be a discrimen of the application of a tax answering the description of a duty of excise? The pecuniary liability (other than the fixed fee of $10) imposed by the Act on the sellers of tobacco is calculated on the value of tobacco sold whether or not the tobacco is of Australian production or manufacture. In fact, … most tobacco sold in Australia is of local origin. … But the defendants … 488 submit that, so long as the tax is imposed on the sale of tobacco generally, it cannot be said to be a tax [9.120]

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Ha v New South Wales cont. on the production or manufacture of tobacco in Australia and therefore it cannot be said to be a duty of excise since duties of excise are taxes on local (that is, Australian) production or manufacture. The same submission was firmly rejected by Dixon CJ in Dennis Hotels Pty Ltd v Victoria (1960) 104 CLR 529 at 540: [I]t 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. … To avoid the weight of what might be thought to be overwhelming 489 contrary authority, the defendants’ submissions invited the Court to reopen the cases which had rejected the proposition that “duties of excise” in s 90 were confined to taxes imposed on goods of Australian production or manufacture. That proposition commanded some judicial support in [a number of previous cases] although the goods on which the impugned tax was imposed in those cases were goods produced or manufactured within the boundaries of the taxing State, not within the boundaries of the Commonwealth. … The submission now advanced by the defendants is inconsistent with the decision in Parton v Milk Board (Vic) (1949) 80 CLR 229 and with the cases that follow Parton. Leave was sought to argue the correctness of Parton and the cases that followed it. In the Capital Duplicators Case [No 2] (1993) 178 CLR 561 at 590–591 a similar submission was rejected. The majority judgment said (Capital Duplicators [No 2] (1993) 178 CLR 561 at 587): Parton is a decision which has not been overruled or qualified by subsequent decisions. More importantly, ever since Parton, it has been accepted in the subsequent cases that the exaction of a tax, whether called a licence fee or not, on the sale or distribution of goods by a person other than the manufacturer of the goods will or may constitute an excise (Dennis Hotels (the decision on the temporary victualler’s licence); Western Australia v Chamberlain Industries Pty Ltd; Victoria v IAC (Wholesale) Pty Ltd (1970) 121 CLR 1 at 43–44) … [I]n Bolton v Madsen (1963) 110 CLR 264 at 271 it was decided unanimously that a tax on the taking of a step in the process of the production or distribution of goods before they reach consumers is an excise. … 490 Indeed, since 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. After a further review of the cases, their Honours concluded that (Capital Duplicators Case [No 2] (1993) 178 CLR 561 at 590): [O]nce 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… 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. 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 252–253, 260, 261 and, before that, to the judgment of Dixon J in Matthews v Chicory Marketing Board (Vic) (1938) 60 CLR 263 at 291–304; see also at 277, per Latham CJ. As Brennan J said in Philip Morris Ltd v Commissioner of Business Franchises (Vic) (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.” 491 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 716

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Ha v New South Wales cont. 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 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”. … 493 Section 93 was not concerned with duties of excise imposed otherwise than on production or manufacture in another State … [Section] 93 throws no light on the connotation of the term “duties of excise” in s 90. In particular, s 93 does not imply that to be a duty of excise, an impost must be a tax on goods the discrimen of liability to which is their production or manufacture in Australia. 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 (Vic) (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”. … 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 494 becoming States what had been their principal sources of revenue would be withdrawn (Harrison Moore, The Constitution of the Commonwealth of Australia (2nd ed, 1910), p 530). … 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, citing the 1891 Report of the South Australian Royal Commission on Inter-Colonial Free Trade, p vi). 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 495 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 (s 95 par 1 and see Commonwealth and Commonwealth Oil Refineries Ltd v South Australia (1926) 38 CLR 408 at 430 per Isaacs J; at 435 per Higgins J). 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 [9.120]

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Ha v New South Wales cont. 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 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 496 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 (thus Mr Deakin at the 1898 Melbourne Convention said that – “The fiscal policy of a Government is established by the difference, if any, between the duties of customs and the duties of excise on certain articles”: Official Records of the Debates of the Australasian Federal Convention (Melbourne), 15 February 1898, p 941), 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” (Convention Debates (Adelaide 1897), pp 835-836). 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 free-standing 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. The defendants’ submissions propound a different dichotomy – between laws imposing taxes on goods of foreign production or manufacture and laws imposing taxes on goods of local (that is, Australian) production or manufacture. It is accepted that an inland tax imposed on sale or distribution of particular goods could burden the production or manufacture of those goods but such a tax would answer the description of a duty of excise only by reason of its burdening production or manufacture (see Capital Duplicators [No 2] (1993) 178 CLR 561 at 617 per Dawson J). The dichotomy propounded by the defendants offers no clear criterion for the application of s 55 of the Constitution. If a Bill for an Act to impose a tax did not disclose on its face that local production or manufacture was to be a criterion of liability but the Act in practice operated to impose a tax on local production or manufacture, a challenge to the 718

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Ha v New South Wales cont. validity of the Act 497 would require the Court to assess the practical operation of the law although the Parliament had not done so. Section 55 does call for a classification of taxing laws by reference to the criteria of liability that they express. The criterion of inland taxes on goods serves to identify clearly duties of excise for the purposes of s 55. Then it is said that the first subject of bounty in s 90, namely production, corresponds with the subject of duties of excise so that s 90 has the purpose of ensuring Commonwealth fiscal control over foreign trade in goods (imports and exports) and domestic production, but not over inland sale and distribution. 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 Case [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. 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 498 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: In considering the validity of laws of this kind we must look at the substance and not the form. … 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 (Cole v Whitfield (1988) 165 CLR 360 at 401, 408; Bath v Alston Holdings Pty Ltd (1988) 165 CLR 411 at 425, 432; Philip Morris Ltd v Commissioner of Business Franchises (Vic) (1989) 167 CLR 399 at 451, 492; Street v Queensland Bar Association (1989) 168 CLR 461 at 524–525, 569; Castlemaine Tooheys Ltd v South Australia (1990) 169 CLR 436 at 466–467; Barley Marketing Board (NSW) v Norman (1990) 171 CLR 182 at 199). 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 [9.120]

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Ha v New South Wales cont. burden Australian-produced tobacco products would 499 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 (Dennis Hotels Pty Ltd v Victoria (1960) 104 CLR 529; Dickenson’s Arcade Pty Ltd v Tasmania (1974) 130 CLR 177; H C Sleigh Ltd v South Australia (1977) 136 CLR 475; Philip Morris Ltd v Commissioner of Business Franchises (Vic) (1989) 167 CLR 399 and Coastace Pty Ltd v New South Wales (1989) 167 CLR 503), 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. … 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 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 500 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% of the value of tobacco sold in a relevant period to 100%. 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. They said (Philip Morris (1989) 167 CLR 399 at 440): The preferable approach is to accept Dennis Hotels and Dickenson’s Arcade as authority for the proposition that, in the special fields of licences to sell alcohol and tobacco, a licence fee which would otherwise be regarded as a duty of excise will not be so regarded if it can properly be characterised as a fee for carrying on business and if it is calculated by reference to sales made during a period other than the period of the licence. In Philip Morris, Brennan J in dissent declined to accept that approach, saying (at 459): The point is whether licence fees for dealing in liquor or tobacco are to be sequestered from the operation of general principles by which the character of fees for licences to deal in other commodities is ascertained. There are, in my opinion, three reasons why a negative answer must be given to that question. First, the Constitution makes no distinction among commodities for excise purposes. Second, if the nature of the commodity were relevant to the 720

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Ha v New South Wales cont. character of a tax related to dealings in it, liquor and tobacco are historically the prime excisable commodities. Third, if liquor and tobacco had been thought to be commodities to which special principles applied, the decisions in Dennis Hotels and Dickenson’s Arcade would have been distinguished on that ground in H C Sleigh. Thus, respectfully, I am in agreement with Stephen J in H C Sleigh ((1977) 136 CLR 475 at 496) on this point and in disagreement with the contrary view expressed by Mason CJ and Deane J. I would hold that liquor or tobacco are in no special category which denies to a tax on any step in their production or distribution the character of a duty of excise. However, the nature of these commodities is such that licensing schemes which affect them may be truly regulatory (as Taylor J held in Dennis Hotels) and that feature of a licensing scheme is relevant to the character of a fee exacted for a licence. We are respectfully unable to accept the basis on which Mason CJ and Deane J accepted Dennis Hotels and Dickenson’s Arcade (prior to Federation, beer, spirits and tobacco were the chief and perhaps the only subjects of Colonial excise duties: Convention Debates, (Sydney 1891), pp 349(2), 366(1)). 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 451–464 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 (Philip Morris (1989) 167 CLR 399 at 496, 497–498, 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 (Philip Morris (1989) 167 CLR 339 at 463) and McHugh J (Philip Morris (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 (Philip Morris (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 502 fees and the amounts payable under the Act in this case. Moreover, an amount equal to 75 or 100% 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). The case stated shows that the revenue collected by New South Wales from tobacco licence fees in the decade 1986 to 1996 was as follows: [It rose from $157m in 1986/87 to $852m (estimated) in 1995/96.] … 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 [9.120]

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Ha v New South Wales cont. 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” (H C 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 503 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 ((1989) 167 CLR 399 at 437, 438 per Mason CJ and Deane J; at 446, 451–459 per Brennan J; at 481–482 per Toohey and Gaudron JJ; at 499–500 per McHugh J and cf at 475 per Dawson J. Note that in delivering the judgment of the Court in Peterswald v Bartley (1904) 1 CLR 497, which upheld the brewer’s licence fee, Griffith CJ said (at 511) that “the amount of the tax in no way depends upon the quantity of beer manufactured”). 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 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. The Court was invited, if it should come to that conclusion, to overrule the franchise cases prospectively, leaving the authority of those cases unaffected for a period of twelve months. 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 504 conduct (Precision Data Holdings Ltd v Wills (1991) 173 CLR 167 at 188). The adjudication of existing rights and obligations as distinct from the creation of rights and obligations distinguishes the judicial power from non-judicial power (Rola Co (Australia) Pty Ltd v Commonwealth (1944) 69 CLR 185 at 203). 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. 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 722

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Ha v New South Wales cont. (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. [9.130] Dawson, Toohey and Gaudron JJ (dissenting): 505 Whilst this Court has experienced difficulty in arriving at a settled meaning for the term “duties of excise”, at least one thing is clear. It is that the term is used in the Constitution in a restricted sense and that it does not extend to that range of imposts which, in another context, it might embrace. The difficulty has been in identifying where the restriction lies. That difficulty was not experienced initially, for in the early cases it was generally accepted that the answer was provided by the meaning which the term bore in Australia at the time of federation, a meaning which was confirmed by its constitutional context. Thus in Peterswald v Bartley (1904) 1 CLR 497 at 509 Griffith CJ, speaking for the Court, said: Bearing in mind that the Constitution was framed in Australia by Australians, and for the use of the Australian people, and that the word “excise” had a distinct meaning in the popular mind, and that there were in the States many laws in force dealing with the subject, and that when used in the Constitution it is used in connection with the words “on goods produced or manufactured in the States”, the conclusion is almost inevitable that, whenever it is used, it 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. Reading the Constitution alone, that seems to be the proper construction to be put upon the term. The reference in that passage to the words “on goods produced or manufactured in the States” appears to be a reference to s 93, which is a transitional provision providing that duties of excise collected in one State upon goods passing into another State for consumption shall be taken to have been collected not in the former but in the latter State. The words used are “duties of excise paid on goods produced or manufactured in a State and afterwards passing into another State for consumption” and there is no reason to suppose that those words are used to differentiate one type of excise duty from another. On the contrary, they are plainly intended to be descriptive of what is meant 506 by the term “duties of excise” as it is used in the Constitution (Dennis Hotels Pty Ltd v Victoria (1960) 104 CLR 529 at 555. And see the Capital Duplicators Case [No 2] (1993) 178 CLR 561 at 585)). Otherwise, the use of the restricted expression would be by way of exception which it would be impossible to explain. (See Philip Morris Ltd v Commissioner of Business Franchises (Vic) (1989) 167 CLR 399 at 466.) Not only does s 93 give the clearest indication that duties of excise are restricted to duties upon goods produced or manufactured in a State, but there is a compelling explanation for that restriction which is to be found in the circumstances which gave birth to s 90 itself. Two of the principal objectives of federation were, on the one hand, the creation of a common external tariff which would bind the States together in a customs union and, on the other, the creation of a free trade area internally by the elimination of customs duties at State borders and other restrictions upon the freedom of interstate trade. The degree, if any, to which the common external tariff would be protectionist was not a matter of consensus but it was agreed that it should be a matter for the Commonwealth Parliament. To the extent that it might be protectionist it would be undermined by the imposition, State by State, of excise duties on locally produced goods. The imposition of excise duties would diminish or extinguish the protection which customs duties were intended to confer upon locally produced goods. For similar reasons, subject to s 91, it was necessary to exclude the States from the granting of bounties upon the production or export of goods. Section 90 was central to the achievement of a common external tariff. Section 92 was the chief means by which an internal free trade area was to be achieved. The correlation between customs duties and excise duties is made manifest by s 90. It was only upon the imposition by the Commonwealth of uniform customs duties that the power of the Parliament to impose customs and excise duties and to grant bounties became exclusive. It was only then that State laws imposing customs or excise duties or offering bounties ceased to have effect. The same [9.130]

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Ha v New South Wales cont. correlation is to be seen throughout the Constitution – nowhere is excise mentioned in the text without an adjacent reference to customs (see ss 55, 69, 86, 93). Once it is accepted, as it is, that the term “duties of excise” is used in s 90 in a confined sense, the confines must be found in the purpose of that section (see the dissenting judgment of McTiernan J in Parton v Milk Board (Vic) (1949) 80 CLR 229 at 265). … The purpose was to confer exclusivity in the exercise of the power. Exclusivity was necessary lest the policies lying behind the 507 common external tariff be impaired. So far as excise duties were concerned, it was unnecessary to extend the exclusivity beyond duties imposed upon goods when produced or manufactured, because a tax imposed upon some later step which fell indiscriminately upon locally produced and imported goods – a step in the distribution of the goods, for example – would not operate to impair any policy of protection to be found in an external tariff in respect of those goods. Nevertheless, in Parton v Milk Board (Vic) (1949) 80 CLR 229 this Court, by a majority, extended the meaning of “duties of excise” in s 90 to include not only a tax upon the production or manufacture of goods, but also a tax upon any step in the distribution of goods before they reach the hands of the ultimate consumer. This was to widen the exclusivity of the Commonwealth’s power to impose a tax upon goods beyond the purpose of s 90 and it is therefore not surprising that the justification for the extension was not sought in that section. The justification advanced involved two strands of reasoning. They are both to be found in the following passage in the judgment of Dixon J (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. 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. The two propositions contained in that passage are, first, that s 90 was intended to give the Commonwealth Parliament control of the taxation of goods and, secondly, that a tax upon a step in the distribution of goods produces the same effect as a tax upon its manufacture or production. Both of those propositions have been questioned in subsequent cases (not to mention academic commentary (for recent examples, see McLeod (1994) at 484–492; Mathews and Grewal, The Public Sector in Jeopardy – Australian Fiscal Federalism from Whitlam to Keating (1997), pp 508-512, 782)) with such force that they cannot now, in our view, be accepted. In the first place, there is no basis for the assumption that s 90 was intended to confer an exclusive power to impose duties of customs and 508 excise for the purpose of giving the Commonwealth real control of the taxation of commodities and thereby power to effectuate its economic policies. If it had been intended to confer upon the Commonwealth exclusive power to tax commodities it would not have been difficult to frame a provision to that effect. But s 90 is not such a provision and in confining the exclusivity for which it provides to the imposition of duties of customs and excise it is apparent that it is part of a constitutional framework designed to achieve the objectives of a customs union. So much is suggested by the Convention Debates (see the Capital Duplicators Case [No 2](1993) 178 CLR 561 at 606–608, per Dawson J) and by colonial legislation as it stood in the lead up to federation (see Peterswald v Bartley (1904) 1 CLR 497 at 509). Thus, a number of judgments have accepted that the term “duties of excise” had a special meaning in Australia at 1901 … Moreover, even taking the wider view of s 90, it could afford the Commonwealth only a limited power to implement economic policy with respect to the production and manufacture of goods. The States retain substantial power to affect the production and manufacture of goods within their borders by various means including taxation (other than customs or excise duties but including the taxation of services), the regulation of such matters as transport, health and safety or even the imposition of quotas. In so far as the Commonwealth has power to intrude upon those areas to the exclusion of the 724

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Ha v New South Wales cont. States, it is to be found principally in s 51(i), (ii) and (iii) of the Constitution, coupled with the operation of s 109, not in the exclusivity conferred by s 90. Secondly, it is plainly incorrect to assert that a tax upon a commodity at any point in the course of distribution before it reaches the consumer has the same effect as a tax upon its manufacture or production. Not only is it an incorrect assertion but it fails to comprehend that the purpose of making the power to impose excise duties exclusive to the Commonwealth was to prevent impairment by the States of the common external tariff. A tax upon the manufacture or production of goods increases the cost of those goods without effecting a corresponding increase in the cost of imported goods of the same kind. Any protection afforded by customs duties imposed upon the imported goods is thereby reduced. But a tax imposed upon a step 509 in the distribution of goods which falls indiscriminately upon locally produced and imported goods does not have that effect. No doubt in saying that a tax imposed on production or manufacture and a tax imposed upon a step in the distribution of goods had the same effect, Dixon J had in mind the early classification of duties of excise as indirect taxes. An indirect tax was said to be one that has a tendency to be passed on in the price of goods whereas a direct tax was said to be one that tends to be borne by the person upon whom it is imposed. The distinction between indirect and direct taxes is now recognised as being economically unsound because market forces determine whether a tax will be passed on or not and there is nothing inherent in a particular tax which enables it to be classified as direct or indirect. Thus all taxes, even income tax, will be passed on to a greater or lesser extent depending upon market forces and the dichotomy between direct and indirect taxes is no longer seen as a satisfactory means of distinguishing between excise duties and other taxes (see Logan Downs Pty Ltd v Queensland (1977) 137 CLR 59 at 84 per Murphy J; Philip Morris (1989) 167 CLR 399 at 470–472 per Dawson J). Nevertheless, the distinction lingers in the notion to be seen in the cases that an excise duty is at bottom a tax upon the production or manufacture of goods because the price to the consumer has an ultimate effect upon the demand for the goods and hence upon their production or manufacture. However, just as it is not possible to draw any practical distinction between direct and indirect taxes, so it is not possible to discern any direct or necessary connection between the ultimate price of goods and their cost of production or manufacture. Again, market forces will determine the effect of price upon demand and hence upon production or manufacture. For that reason it is not possible to say that a tax upon a step in the distribution of goods is in effect a tax upon their production or manufacture. And, of course, a tax which falls upon a step in the distribution of imported and locally produced goods alike can hardly be regarded as a tax upon the production of the imported goods. Once the reasons given in Parton ((1949) 80 CLR 229) for extending the meaning of duties of excise are recognised as unsound, the extension is without any justification in economic or constitutional terms. In particular, it disregards the correlation between duties of customs and duties of excise which reveals the true purpose of s 90 and which identifies the limits placed by the Constitution upon the term “duties of excise”. The expansion of the concept of “duties of excise” in Parton made it difficult to distinguish excise duties from other taxes. This is exemplified by the franchise cases (see Dennis Hotels (1960) 104 CLR 529; Dickenson’s Arcade (1974) 130 CLR 177; H C Sleigh Ltd v South Australia (1977) 136 CLR 475; Philip Morris (1989) 167 CLR 399; Coastace Pty Ltd v New South Wales (1989) 167 CLR 503) which, speaking broadly, 510 established that a licence or franchise fee, exacted for the privilege of carrying on a business of selling goods, did not, even though a tax, constitute an excise duty where it was calculated by reference to the value of sales during a period preceding the period of the licence … [W]hat emerged as supporting the franchise cases was a test known as the “criterion of liability” test. The test was formulated by Kitto J in Dennis Hotels Pty Ltd v Victoria (1960) 104 CLR 529 at 559 and adopted by a unanimous Court in Bolton v Madsen (1963) 110 CLR 264 at 273 … This was thought for a time to be sufficient to support the franchise cases, because the legislation imposing the tax chose as the criterion of liability, not the taking of a step in the distribution of goods, but the carrying on of a business. However, the criterion of liability test came to be criticised upon the basis that it seized upon the statutory form of the tax and ignored substance. Eventually, the test was abandoned as the exclusive determinant of an excise duty (see Philip Morris (1989) 167 CLR 399 at 446–451, per [9.130]

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Ha v New South Wales cont. Brennan J), although the later cases have failed to reveal the nature of the substance which was sought. Excise duties were no longer confined to taxes upon local manufacture or production. They no longer needed to be calculated by reference to the quantity or value of the goods involved. The distinction between direct and indirect taxes was recognised as unsustainable, but the notion persisted that duties of excise must somehow affect production or manufacture and the exception of a tax upon consumption was, somewhat illogically, continued. What remained was that an excise duty must be a tax upon goods but that provided no distinguishing feature because not all taxes upon goods – a tax upon ownership, for example – would, even on the broadest view of the term, constitute excise duties. Whilst the notion lingered that excise duties are at bottom taxes upon local manufacture or production, it became increasingly difficult to apply. Not only was the distinction between direct and indirect taxes discredited, but the expansion of the meaning of excise duties to encompass a tax upon the sale or distribution of goods removed any distinction between locally manufactured goods and imported goods. 511 A tax imposed upon locally manufactured goods and imported goods alike did not operate to discriminate against locally manufactured goods and rendered irrelevant the distinction between local manufacture and importation for the purpose of determining whether a tax constituted a duty of excise. As a result, increasing emphasis came to be placed upon the assumption of Dixon J in Parton ((1949) 80 CLR 229 at 260) that s 90 “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”. Of course, were that assumption correct, then the search for the meaning of the term “duties of excise” in s 90 would cease, for the exclusivity of Commonwealth power to impose duties of customs and excise would extend to all taxes upon goods and all taxes upon goods which were not customs duties would be excise duties. But, as we have said, no justification for the assumption is to be found either in s 90 or elsewhere in the Constitution, or in history, and it has not gained in force by its conversion from an assumption to an assertion. Nevertheless, the assertion has been taken up and built upon in recent judgments. For example, in Capital Duplicators Pty Ltd v Australian Capital Territory [No 2] (1993) 178 CLR 561 at 585, Mason CJ, Brennan, Deane and McHugh JJ expressed the view that “ss 90 and 92, taken together with the safeguards against Commonwealth discrimination in s 51(ii) and (iii) and s 88, created a Commonwealth economic union, not an association of States each with its own separate economy”. (See also Hematite Petroleum Pty Ltd v Victoria (1983) 151 CLR 599 at 660–661; Philip Morris (1989) 167 CLR 399 at 426.) However, the union which s 90 was designed to achieve was a customs union, not an economic union if what is meant by that term is a single economy. Clearly the States were to retain considerable power to influence the economy within their boundaries. It is a feature of the federation that State policies may legitimately affect resource allocation. The purpose of a customs union is to ensure a uniform policy with respect to external tariffs, whether free trade or protectionist. That was the purpose of s 90. Freedom of trade internally was to be achieved, not by common external tariffs, but by ensuring the free movement of people, goods and communications across State boundaries. That was the purpose of s 92. As was recognised in Cole v Whitfield (1988) 165 CLR 360 at 391, the enemies of internal free trade are border taxes, discrimination and preferences. Neither s 92 nor s 51(ii) and (iii) nor s 88 sought to achieve an integration of the Australian economy such that conditions of trading were uniform throughout the country. As Stephen J observed in Seamen’s Union of Australia v Utah Development Co (1978) 144 CLR 120 at 140: 512 It was no part of the federal compact that this vital function of colonial governments, the development of the economies of their respective communities, should pass, on federation, to the Commonwealth. Accordingly, the Commonwealth was granted no express head of power to legislate on this subject matter. The States could not engage in discrimination of a protectionist kind against interstate goods, but otherwise they were left free to encourage or discourage trade within their boundaries, including trade in commodities, by such means as they saw fit provided that they did not do so by infringing the Commonwealth’s exclusive power to impose duties of customs and excise and to grant bounties on the production or export of goods. That exclusivity was conferred to protect the common external 726

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Ha v New South Wales cont. tariff, not as part of a plan to create a single economy. Plainly it was inadequate for that purpose, either on its own or in combination with other sections of the Constitution, and could not have been intended to perform that function. 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. Notwithstanding the decision in Parton, which has itself “been the subject of differing applications”, the approach adopted in Peterswald v Bartley has “maintained a voice in the Court” (Capital Duplicators Case [No 2] (1993) 178 CLR 561 at 625, per Toohey and Gaudron JJ). In Dennis Hotels (1960) 104 CLR 529 at 556, Fullagar J expressed the view that: The duties of customs and duties of excise contemplated by the Constitution are, I think, alike duties which are imposed as a condition of the entry of particular goods into general circulation in the community – of their introduction into the mass of vendible commodities in a State. When once they have passed into that 513 general mass, they cease, I think, to be proper subject matter for either duties of customs or duties of excise. In H C Sleigh Ltd v South Australia (1977) 136 CLR 475 at 526–527, Murphy J was of the opinion that duties of excise within the meaning of s 90 are taxes upon goods produced or manufactured within a State. In Logan Downs Pty Ltd v Queensland (1977) 137 CLR 59 at 84 he said: 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. He adhered to this view in Hematite Petroleum Pty Ltd v Victoria (1983) 151 CLR 599 at 638 where he said: The constitutional concept of excise forbidden to the States is limited to taxes on production within the State; it does not extend to taxes on distribution or consumption unless these are in substance taxes on production within the State. In Philip Morris Ltd v Commissioner of Business Franchises (Vic) (1989) 167 CLR 399 at 479–480 and the Capital Duplicators Case [No 2] (1993) 178 CLR 561 at 630–631, Toohey and Gaudron JJ questioned the view taken by Murphy J that excise duties are confined to State taxes on production within the State and preferred the view that they may extend to State taxes imposed on goods produced in Australia. It is unnecessary for present purposes to pursue that matter. Putting it to one side, their Honours accepted in both cases that s 90 strikes down State taxation measures which discriminate against goods locally manufactured or produced (see Philip Morris (1989) 167 CLR 399 at 483; Capital Duplicators Case [No 2] (1993) 178 CLR 561 at 629–631). Finally, in the Capital Duplicators Case [No 2] ((1993) 178 CLR 561 at 609) Dawson J expressed the view that: The difference between excise duties and other taxes within the context of s 90 is to be seen in the purpose served by that section. That purpose is to secure the customs union to which the States agreed in the Constitution by ensuring a uniform policy with respect to external tariffs, whether free trade or protectionist. A tax should be characterised as an excise duty if it imposes a different level of tax on goods produced overseas and home-produced goods. It is this difference which determines the extent of protection (if any) for local production and manufacture. [9.130]

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Ha v New South Wales cont. 514 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 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. These considerations make it apparent why an amendment made at the 1897 Adelaide Convention to the draft of the clause which was to become s 90 was necessary. The draft confined Commonwealth exclusivity over the power to impose duties of excise to duties of excise upon “goods for the time being the subject of customs duties”. The amendment removed those words. Notwithstanding that in debate some delegates confused the exclusivity of Commonwealth power to impose excise duties with the power itself and thought that the words removed had the effect of limiting Commonwealth power, the amendment was required to ensure the preservation of Commonwealth tariff policy even where no relevant customs duty was imposed. This was the real reason for the amendment and it is apparent from the debate (see Official Record of the Debates of the Australasian Federal Convention, (Adelaide), 19 April 1897, vol III, pp 835-856). The absence of a customs duty upon particular goods is as much an aspect of Commonwealth tariff policy as is the presence of a customs duty and even in the absence of a customs duty, tariff policy is liable to be impaired by the imposition by a State of an excise duty upon the same goods locally produced. Thus the amendment at the Adelaide Convention, far from severing the linkage between the exclusivity of Commonwealth power to impose duties of excise and its external tariff policy, served to emphasise it. 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 515 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 re-opening of Parton. In the Capital Duplicators Case [No 2] (1993) 178 CLR 561 at 605, Dawson J said: The divergence of opinion upon the scope of an excise duty for constitutional purposes would, I think, in itself justify a review of the authorities. But, having regard to the preparedness of the Court in Cole v Whitfield to undertake such a review in order to settle a far from unrelated issue, it seems to me that it cannot now reject the call for it to do so in relation to s 90. Not only is the issue a vexed one, but it is of high consequence to the States. As McHugh J pointed out (Philip Morris (1989) 167 CLR 399 at 489), “Any extension of the scope of an excise duty inevitably affects the distribution of public revenue within the Australian federation since it narrows the revenue base of the States and reduces their financial autonomy.” The effect of the decision in Parton v Milk Board (Vic) was to establish a conception of an excise duty which has the capacity to encompass all taxes on commodities. This potential for expansion was checked for a time by the application of the criterion of liability test. But that test no longer offers any practical constraint and even the franchise cases have been held by a majority to be artificially based and, on the view of some, to be at best justified as an historical anomaly. Those remarks, in our view, remain valid in the present cases and we have already explained why, in 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 728

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Ha v New South Wales cont. 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. … 517 In the present cases, 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. In 1994, approximately 60% of Australian tobacco was grown in Queensland, 37% in Victoria and 3% in New South Wales. There were three domestic manufacturers of tobacco products, two of which had their factories in New South Wales and one of which had its factory in Victoria. It was not suggested, and could not be suggested, that free trade among the States was affected by the fees imposed under the Act. The imposition of those fees operated in a manner which did not discriminate against interstate tobacco products, nor did it protect New South Wales tobacco products. The total value of domestic consumption in terms of retail sales of tobacco products in 1994 was $5,389 million, of which imported tobacco products represented in retail value about 4%. Thus imported tobacco products represented only a very small percentage of the tobacco market. It was suggested in argument that this was a reason for concluding that form would triumph over substance if the licence fees were held not to constitute duties of excise. It would seem that the argument proceeded on the footing that, had New South Wales chosen to impose a tax on the production or manufacture of tobacco or tobacco products, it would have raised almost the same amount of revenue from practically the same sources as it did by the imposition of the licence fees. To approach the matter in that way is, however, to mistake the purpose of s 90. The purpose of that section was not to restrict the revenue raising capacity of the States. Equally, its purpose was not to secure to the Commonwealth a revenue base: that is the function of s 51(ii). Rather, the purpose of s 90 was to preclude State imposts on goods which would undermine the common external tariff regardless of the revenue which the States would be compelled to forgo by reason of the prohibition. Thus, in 518 these cases it is the nature of the impost and not the revenue involved which is important and it is the fact that the impost falls upon domestic and imported goods alike which is the substance of the matter. It is not to the point that only a small amount of tobacco products sold in New South Wales, or in Australia generally, is imported. Whatever the proportion, the level of protection, if any, which the Commonwealth has chosen to give tobacco products produced or manufactured in Australia remains unaffected.

[9.140]

1.

2.

Notes&Questions

Was the decision of the majority in Ha not to overrule Dennis Hotels and Dickenson (at 504) consistent with its interpretation of duties of “excise”? The Ha majority relied on the reasoning of Kitto and Taylor JJ in Dennis Hotels (at 501), but did they not overlook the other half of Dennis Hotels, in which a differently-constituted majority (with Kitto and Taylor JJ together with Fullagar J in dissent) held the temporary licence fee invalid as a duty of excise? Is there a rational distinction between the purposes of the victualler’s licence and the temporary licence in Dennis Hotels? The High Court’s decisions in the franchise fee cases (Dennis Hotels and its progeny) illustrate many lessons in judicial method, including the frequently – encountered problem of how to ascertain the ratio decidendi of a case in which the majority did not employ uniform reasoning (another good example is the analysis of Koowarta v Bjelke-Petersen (1982) 153 CLR 168 in the Tasmanian Dam case); the instability created by following an earlier decision even though it is considered to have been incorrectly decided (see notes on Dennis Hotels at [9.70]); and that, if such a course is decided upon (as it was by Barwick CJ and Mason J in Dickenson), it is most unwise to attempt to rationalise the earlier decision. So long as the earlier decision is treated as one to be applied only to essentially identical situations (as Barwick CJ treated Dennis [9.140]

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Hotels in Dickenson at 188: to be authority only in “substantially and indistinguishably the same statutory and factual situation”) it can be isolated and not infect the stream of doctrine. But a court that attempts to rationalise the decision risks contaminating that stream. The difficulty stems, of course, from the court’s need to identify what proposition the earlier decisions (Dennis Hotels and Dickenson) stand for, even on Barwick CJ’s narrow approach. Arguably, such rationalisation occurred in Philip Morris Ltd v Commissioner of Business Franchises (Vic) (1989) 167 CLR 399, the effect of which is evident in Ha’s retention of Dennis Hotels and Dickenson. Having noted that “Dennis Hotels stands for a result, rather than for any strand of reasoning common to a majority of Justices” (Philip Morris at 438), Mason CJ and Deane J nevertheless sought to rationalise that decision by reference to the “regulatory” approach of Taylor J in Dennis Hotels (which, as was noted at Note 5 [9.70], was rejected by Dixon CJ in Dennis Hotels and later by Gibbs J in Dickenson, although supported by Jacobs J, dissenting, in H C Sleigh). Mason CJ and Deane J declined to adopt the narrow approach of Barwick CJ in Dickenson (Philip Morris at 440) and remarked (at 438–439): Dennis Hotels and Dickenson’s Arcade can be rationalized by reference to traditional considerations relating to the licensing of dealings in alcohol and tobacco … The basis upon which the decision in Dennis Hotels can be accepted is … to be found in the circumstance that the impost took the form of a fee for a licence to sell liquor and that legislation providing for the issue of liquor licences has traditionally been of a regulatory character. (emphasis added)

Although Mason CJ and Deane J quoted only Taylor J in Dennis Hotels, they nevertheless observed that the fact that the fee there was “an element in regulatory legislation … designed to protect the public interest in the light of the characteristics of that commodity” (at 439) “may well be seen as the decisive factor in Dennis Hotels” (at 440; emphasis added). With respect, this is surely questionable both because the regulatory nature of the legislation in Dennis Hotels was a factor only in the reasoning of Taylor J and because it is impossible to reconcile such a rationalisation with the decision in Dennis Hotels that the temporary licence fee (which surely had the same purpose as the victualler’s licence fee) was a duty of excise and thus invalid (see Note 1 at [9.70] above). While rejecting Mason CJ and Deane J’s specific rationalisation of Dennis Hotels and Dickenson by reference to the commodities at issue in those cases (at 459), Brennan J (who dissented in Philip Morris) nevertheless likewise rationalised those decisions by reference to the regulatory nature of the legislation in issue. However, with respect, his Honour introduced an element of confusion by employing the language of Kitto J in Dennis Hotels (at 460) while applying reasoning closer to that of Taylor J (at 461–464). This element appears also in the reasoning of the majority (Brennan CJ, McHugh, Gummow and Kirby JJ) in Ha. See also Note 5 below. McHugh J, who also dissented in Philip Morris, adopted a more cautious approach, distinguishing Dennis Hotels, Dickenson and H C Sleigh, not by reference to the regulatory nature of the legislation in issue there (at 496, 497, 499) but on the ground that in Philip Morris, unlike the three earlier decisions, the licence fee was “not an exaction for the privilege of carrying on a business but a tax on the sale of tobacco” (at 501), thereby demonstrating that, no matter how narrowly one may seek to confine the ratio decidendi of a case, some rationalisation of the decision is probably inevitable. (Dawson J and Toohey and Gaudron JJ did not need to rationalise Dennis Hotels v 730

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Victoria (on the victualler’s licence fee) and Dickenson’s Arcade Pty Ltd v Tasmania because they considered them to have been correctly decided on their interpretations of “excise”.) 3.

Did the Ha majority consider the licence fees in Dennis Hotels and Dickenson valid because they were not taxes on goods, or because they were not taxes at all? Professor McLeod discusses the similar opinion of the majority in Capital Duplicators [No 2] (McLeod (1994) at 486–488) and rightly favours the former position: [T]he proposition that a “regulatory” fee might not be an excise does not have as its basis the belief that such an impost is requited and therefore not even a tax … The majority judges in Capital Duplicators [No 2] appear to be arguing that the regulatory nature of an impost can convert it from a tax on goods into a tax on persons involved in trading in such goods. A tax on the “privilege of carrying on the business” is seen as a personal tax as opposed to an excise. (Emphasis in the original.)

4.

Commenting on Capital Duplicators [No 2], Professor Geoffrey Lindell queried whether the grounds on which Dennis Hotels and Dickenson were distinguished, including the regulatory nature of the scheme, were relevant “not only for franchise fees but [also] for other areas of s 90”. He “doubt[ed] whether the majority [in Capital Duplicators [No 2]] intended to treat the regulatory character of a scheme imposing taxation on goods as relevant beyond the area of franchise licensing fees” (G Lindell, “Excise”, in M Coper and G Williams (eds), The Cauldron of Constitutional Change (Centre for International and Public Law, Canberra, 1997), 33 at p 35). Has the position been clarified by Ha?

5.

Dennis Rose remarked that the High Court’s failure in Ha to overrule Dennis Hotels, Dickenson and H C Sleigh is “puzzling” and resulted from the majority’s adoption of “a seriously flawed analysis”, viz that of Brennan J in Philip Morris Ltd v Commissioner of Business Franchises (Vic) (1989) 167 CLR 399. Rose analysed this decision in D Rose, “Excise: Reflections on the NSW Cigarette Case” (1998) 1 Constitutional Law and Policy Review 15 at 17 and concluded (at 18) that: So long as [Dennis Hotels, Dickenson and H C Sleigh] stand, it will be impossible to say what State legislation would come under their umbrella other than legislation “closely resembling” the terms of the legislation in those cases … However, it seems unproductive to pursue these uncertainties given the lack of practical importance now that the Commonwealth has enacted its legislation to provide the revenue to the States.

6.

How authoritative is Ha in view of the closeness of the decision (4:3) and the changed composition of the High Court? A recent commentator maintained that, notwithstanding Ha, “the proper construction” of s 90 “still has not been answered in any satisfactory manner”: N Halliday, “Casenote on Ha” (1998) 20 Sydney Law Review 158 at 166. He concluded (at 168) that: Ha is neither saviour nor daemon. It is simply another case in a long line of … cases which demonstrates the High Court’s struggle with the vexed question of the meaning of “excise”.

Booker, Glass and Watt, on the other hand, remarked of Ha: “Notwithstanding the closeness of the decision, there appears a finality of the debate” (K Booker, A Glass and R Watt, Federal Constitutional Law: An Introduction (2nd ed, Butterworths, Chatswood, 1998), [9.43], p 192). Which view is likely to prove correct? 7.

Do you agree with Halliday’s further observation (at 167) that “there is nothing wrong with the idea of ‘excise’ changing over time as the federal balance changes”? Does this merely recognise what inevitably occurs? Cf Victoria v Commonwealth (the Payroll [9.140]

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Tax case) (1971) 122 CLR 353 at 396 per Windeyer J (quoted at [12.160] Note 2). Peter Hanks has argued that “there is at least a strong case that the evolution of the Australian economy since 1901 justifies national control over commodity taxes” (Hanks (1986) at 382). Because such taxes “can play a critical role” in determining domestic inflation, credit and monetary conditions, and social justice in taxation policy (eg, whether regressive taxes should be levied), “[i]t is, at least, strongly arguable that the Commonwealth cannot discharge its responsibility for these policy areas unless it is conceded control over commodity taxation” (at 383). Would it be appropriate for the High Court to take account of these considerations in interpreting s 90? Does it have the economic competence to do so? Should it be willing to admit expert economic evidence on this subject? 8.

In Philip Morris, Dawson J saw merit in Fullagar J’s interpretation of “excise”, but felt constrained by the weight of authority to apply the Bolton v Madsen test in that case (at 472, 473–474). However, in Capital Duplicators Pty Ltd v Australian Capital Territory [No 2] (1993) 178 CLR 561, his Honour concluded that the “divergence of opinion upon the scope of an excise duty” justified a review “exercise along the lines undertaken in Cole v Whitfield (1988) 165 CLR 360” (at 605, 604 respectively). Consequently, Dawson J felt free to abandon the criterion of liability approach and held that: “For constitutional purposes an excise duty is a tax which falls selectively upon the local production or manufacture of goods” (at 617). His Honour left open whether “local” referred to production within the State or Territory imposing the tax or to production in Australia, but appeared to favour the latter view, which was that held by Toohey and Gaudron JJ (at 616–617). Dawson J maintained this interpretation as a member of the minority in Ha. Interestingly, after his retirement, Sir Harry Gibbs appears to have made a similar transition, adopting the interpretation of Murphy J: H Gibbs, ““A Hateful Tax”? Section 90 of the Constitution, in Upholding the Australian Constitution”, Vol 5: Proceedings of the Fifth Conference of The Samuel Griffith Society (Samuel Griffith Society, East Melbourne, 1995) 121 at pp 133-135. Like the minority in Ha, Gibbs held that the purpose of s 90 was “to give the Commonwealth effective control of tariff policy” (at 133). His perspective on the section is reflected in these concluding observations (at 134–135): No valid constitutional purpose is served by extending the meaning of “duties of excise” in s 90 beyond the narrowest meaning of which the words are capable. … The words of the section must of course be given some effect, however much one may regret their presence, but the High Court can, consistently with principle, so construe them that they cause the least harm. Convenience will be served, and an obstacle to fiscal rationality will be removed, if the words of s 90 are confined at least to the extent suggested by the three Justices in the minority in [Capital Duplicators [No 2]].

These remarks were made two years before Ha. Indeed, Sir Harry went further, advocating (again, even before Ha) amendment of s 90 to enable the States to levy duties of excise: Sir Harry Gibbs “Fiscal Imbalance: Excise Duties”, in J Beaumont (ed), Where To Now? (Federation Press, Sydney, 1993), p 68; Sir Harry Gibbs, “Introduction to Conference on Reshaping Fiscal Federalism in Australia”, in Warren (1997), 17 at p 19 (“[T]here is no section of the Constitution that more obviously needs amendment than Section 90”). Before his appointment to the High Court, Sir Ronald Wilson had also expressed dissatisfaction with Parton and advocated constitutional amendment to enable the 732

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States to levy duties of excise: P D Durack and R D Wilson, “Do We Need a New Constitution for the Commonwealth?” (1967) 41 Australian Law Journal 231 at 237. Hence it is interesting (albeit ultimately futile) to speculate whether in the early 1980s Gibbs CJ, Murphy, Wilson and Dawson JJ might not have been able to reach agreement on the meaning of “excise” by adopting the interpretation favoured by Fullagar and Murphy JJ, and to consider what effect this might have had on the plight of State finances. 9.

In 1995, Dennis Rose outlined four factual situations which, he argued, disproved the assertion of the minority in Capital Duplicators [No 2] that (to adopt Rose’s words) “Commonwealth tariff policies cannot be impaired by a State sales tax applying equally to both local and imported goods”: D Rose, “Excise”, in Coper and Williams (eds), The Oxford Companion to the High Court of Australia (2001), 39 at pp 41-42. These arguments, including the examples, were included in the Commonwealth’s submission to the High Court in Ha: 2.17 Taxes which do not differentiate between imported and local goods may change the relative costs and prices of other goods and thereby discourage trade or distort competition, undermining Commonwealth tariff policies and economic policies generally with respect to Australian imports and exports. This is made clear by a consideration of a number of examples: (a) The Commonwealth imposes a customs duty on a finished product (eg, imported cars) to protect the Australian industry which produces that product. A State sales tax on a component part (such as a tyre) will raise the cost of those parts to Australian industry (the car manufacturing industry), thereby disadvantaging local products in competition with imported products and impairing the Commonwealth tariff policy. (b) The Commonwealth imposes a customs duty on a particular type of product (eg, olive oil) in order to protect the Australian industry which produces similar products that are substitutes, but not that particular product (eg, all vegetable oils except olive oil). A State tax on all vegetable oils except olive oil would offset the effect of the customs duty and could result in an increase in demand for the imported product, thereby undermining the Commonwealth’s tariff policy. (c) The Commonwealth, in order to encourage consumers to purchase the local product, imposes a customs duty on the imported product which, although more expensive, has some qualitative advantage over the locally produced product. A non-ad valorem State tax on both the imported and local products would increase the cost of the Australian goods, both in absolute terms and relative to the imported product, to such a level that consumers may choose not to purchase the product at all, or switch to the imported product. In this way, the Commonwealth tariff policy of maintaining the demand for Australian goods may be impaired. (d) In certain situations, a raw material may not be available in Australia but may be imported free of duty for use in manufacturing particular commodities. A State tax applying to the locally manufactured product would then increase the cost of that product when exported and the Commonwealth policy of giving duty free status to the raw material in order to enable local manufacturers to be more competitive in export markets would be impaired. (Rose (2001), pp 18-19.)

Nevertheless, the minority in Ha maintained its earlier proposition without alluding to these arguments: at 507, 508–509. For a good explanation of the origin of the minority’s assertion and criticism of its failure to address the Commonwealth’s argument, see D Rose, “Excise”, in Coper and Williams (2001), 39 at pp 15-16, 18.

[9.140]

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10.

11.

The issue of prospective overruling may not be as clear-cut as the High Court suggested. See K Mason, “Prospective Overruling” (1989) 63 Australian Law Journal 526; K Mason, “Prospective Overruling”, in Blackshield, Coper and Williams (2001), p 570; A Palmer and C Sampford, “Judicial Retrospectivity in Australia” (1995) 4 Griffith Law Review 170; Savvas (1991) 55 A Crim R 241 at 289–291 per Kirby P (NSW CCA). A United States case involving issues somewhat similar to those in Ha is American Trucking Associations, Inc v Smith 496 US 167 (1990). For a discussion of issues which might arise were Ha to be overruled in the future, see W M Treanor and G B Sperling, “Prospective Overruling and the Revival of “Unconstitutional” Statutes” (1993) 93 Columbia Law Review 1902. For argument for “a firm rule of retroactivity”, see B S Shannon, “The Retroactive and Prospective Application of Judicial Decisions” (2003) 26 Harvard Journal of Law and Public Policy 811. For an argument similar to that in Ha, although not expressly referring to the separation of powers, see Shannon, at 838–842. For further discussion of Ha, see G Griffith, “The Future of State Revenue: The High Court Decision in Ha and Hammond” (NSW Parliamentary Library Research Service, Briefing Paper No 16/97, 1997). The Ha decision, recovery of money paid pursuant to unconstitutional taxation legislation, and the Commonwealth legislation enacted in 1997 to resolve the consequences of Ha are discussed by a counsel in the case: R A Dick, “A Loss of State Autonomy: Implications of the Ha and Hammond Decisions” (1998) 27 Australian Tax Review 30. Ha has also received critical economic commentary: see Grewal (1997). For a concise account of the High Court’s interpretation of s 90, see Booker, Glass and Watt, chapter 9.

REFORM [9.150] Even before Ha exacerbated Australian vertical fiscal imbalance, commentators had advocated amendment of s 90 to enable the States to levy duties of excise. Proponents of this view included not only supporters of “State rights”, such as Sir Harry Gibbs and Sir Ronald Wilson but also “centralists” like Sir Maurice Byers (Sir Maurice Byers, “Fiscal Imbalance: Excise Duties”, in Beaumont (1993), p 67). Indeed, the most recent “official” advocate of that view was the Constitutional Commission, which Sir Maurice chaired. Like the Australian Constitutional Convention three years earlier, the Commission recommended that s 90 be altered by removing the words “and of excise”. Alternatively, if this were not accepted, it recommended that s 91 of the Constitution be amended to empower the States to levy a duty of excise with the consent of both Houses of the Commonwealth Parliament: Constitutional Commission, Final Report (1988), Vol 2, [11.242]–[11.285]. The Commission rightly held that a constitutional bar on State excise duties is unnecessary to protect Commonwealth economic policies: “[T]he Commonwealth has sufficient overall power in respect to borrowing, taxation and other financial matters to ensure that State revenue laws do not impede federal policy” (at [11.275]). It commented as follows on the policy of allowing the States to levy duties of excise: 11.267 … The present situation in which the States are not responsible for the raising of most of the funds they spend has an obvious serious effect on the accountability and responsibility of those Governments. Expenditure decisions cannot in those circumstances take full account of the tax cost of the decisions. So, not only does a high fiscal imbalance impair the functioning of the State as an independent unit of the federation, it tends to sap at least some of the duties of responsibility and sound decision-making that are the concomitants of governmental power. This in turn severs the link between policy making and electoral control. 734

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11.268 The omission of the prohibition of State excise duties from section 90 would not in itself do away with fiscal imbalance. The issue is, therefore, purely one of degree. What is clear is that the imbalance in Australia, compared with other federal countries, is of a very high degree. The preponderance of expert views is that, in the absence of a broad indirect tax power, the States have resorted to numerous other taxes which are regarded as less economically desirable, or the effect of which is difficult to monitor.

However, the electors are unlikely to approve at referendum any proposal to increase governmental taxation powers. The interchange of powers proposal, which would have enabled the Commonwealth to transfer powers (such as the power to levy duties of excise) to the States was defeated at referendum in December 1984 in all States, and nationally by 49.4% to 43.9%. Hence, any alteration to the current (Parton–Ha) interpretation of duties of excise will have to come from a change in the High Court’s interpretation of the term. The Commonwealth was given a monopoly over customs and excise duties and bounties for economic reasons, so it is notable that many economists have interpreted a duty of excise as a tax on locally produced goods, which is essentially the view of the minority in Ha: An economist would say that a customs duty is a tax levied solely on importers and assessed on the value or quantity of the goods imported; that an excise duty is a tax levied solely on home producers and assessed on the value or quantity of goods produced; and that a sales tax levied on a subsequent seller of goods which makes no distinction between imported and homeproduced goods is clearly distinguishable from either. The fact that all these types of tax are liable to be passed on and that some goods might be taxed a second time by the sales tax (as imported motor vehicles are by the Commonwealth sales tax) would be regarded as irrelevant. Adherence to the High Court decision of 1904 [Peterswald v Bartley] would have enabled these distinctions to be drawn. (R L Mathews and W R C Jay, Federal Finance: Intergovernmental Financial Relations in Australia Since Federation (1972), p 232)

Moreover, it has been suggested that the term had the same narrow meaning at Federation: “Contemporary Australian sources indicate that the phrase had a well understood and limited meaning”: B Gordon, “What is an Excise Duty? Nineteenth Century Literature and the Australian Constitution” (1989) No 11 HETSA Bulletin 22 at 25 (emphasis in original). As Gordon notes (at 36), this view accords with that in “the seminal commentary on the Constitution”: J Quick and R R Garran, The Annotated Constitution of the Australian Commonwealth (1901), pp 837, 854-855. Consequently, many economists argue that s 90, or at least its interpretation, should be altered to restore this original understanding: see, eg, Gordon, pp 32ff; Grewal (1997), pp 144-146; J Petchey and P Shapiro, “An Economist’s view of Section 90 of the Australian Constitution”, in Warren (1997), 41 at p 52 (“[W]e see potential net economic benefits from the Court reverting to a narrow interpretation of the meaning of excise”). Australia has long suffered from more severe vertical fiscal imbalance – the difference between revenue raised and expenditure at each level of federal government – than comparable federations, such as the United States, Canada and Germany: see Intergovernmental Relations Division, Treasury Department of Western Australia, “Revenue Sharing or Tax Base Sharing? Directions for Financial Reform of Australia’s Federation” (Discussion Paper, June 1998), pp 11-13; R Webb, “Developments in Commonwealth-State Relations Since 2000–01” (Commonwealth Parliamentary Library Research Brief no 11, 2005–06), p 13. At least one Australian economist considers Australian federalism to be “dysfunctional” (Grewal (1997), p 129), a condition from which it has suffered for over half a century as a consequence of uniform taxation and the broad, Parton, interpretation of duties of excise (at p 131). Recent developments have increased vertical fiscal imbalance. Ha cost the States almost $5 billion in lost revenue (at p 128); this was admittedly restored by the Commonwealth, but in lieu of State taxes for which State governments were accountable to their electors, the [9.150]

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revenue is now collected by the Commonwealth (since 2000 as part of its GST) and paid to the States through s 96 grants, every cent of which is potentially subject to the imposition of conditions. By 2003–04, the Commonwealth collected about 78% of total government revenue but expended only about 65% of this itself; in 2001 the comparable Canadian figures were 79% and 77%, respectively (see Webb, p 13). According to the Australian Bureau of Statistics, by 2011–12 the Commonwealth collected about 81% of total government revenue and expended about 70% of this itself. This gross vertical fiscal imbalance was exacerbated by the Howard government’s taxation reforms whereby the Commonwealth levies a goods and services tax (GST) of 10% and pays the proceeds to the States and Territories after deducting administrative costs. The proceeds of the GST have replaced the (unconditional) Financial Assistance Grants (derived, ultimately, from the income tax re-imbursement grants under the Uniform Tax scheme) and the proceeds of several State taxes which the States agreed to abolish. Distribution of revenue raised by the GST is determined by the Commonwealth Grants Commission which applies principles of “horizontal fiscal equalisation” (see Budget Paper No 3 2012–13, p 124 at http://www.budget.gov.au/2013-14/index.htm). The Commonwealth’s grants of the GST proceeds to the States and Territories have, so far, remained unconditional as the Intergovernmental Agreement appears to envisage in providing that “GST revenue grants will be freely available for use by the States and Territories for any purpose” (cl 7). However, the Commonwealth’s discretion in distributing the proceeds of its tax and its power to impose conditions on moneys granted are essentially constitutionally unconstrained (see above, Chapter 7). In short, since the advent of the GST in 2000, the States have lost several more taxes and become yet further dependent on Commonwealth financial grants. Political and economic principles of governmental accountability create pressure for Commonwealth accountability for the expenditure of the revenue it raises. Consequently, the discrepancy between Commonwealth revenue-raising and State expenditure inevitably leads to pressure for increasing Commonwealth control over funds it grants to the States and Territories, with consequent diminution of State and Territory autonomy; this is exacerbated when different political parties govern in the Commonwealth and the States/Territories. Notwithstanding the Intergovernmental Agreement’s apparent guarantee of State and Territorial autonomy in the expenditure of GST revenue, the Commonwealth increasingly presses for greater State and Territory “accountability”. The States have faced centralist pressures many times over Australia’s more than a century of federalism. Their autonomy will probably survive largely intact because, while they may be weak economically and constitutionally, they have long demonstrated superb political skills, having mastered the art of employing popular opinion as a weapon in their never-ending political and financial struggle with Canberra.

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CHAPTER 10 Express Rights and Freedoms [10.20] SECTION 41 .............................................................................................................. 738 [10.30]

R v Pearson; Ex Parte Sipka ........................................................... 739

[10.50] SECTION 51(XXXI) ................................................................................................... 744 [10.50] Introductory observations ....................................................................... 744 [10.60] The acquisition of property .................................................................... 744 [10.60] [10.80] [10.100] [10.110] [10.120] [10.140] [10.150] [10.170] [10.180]

Minister of State for the Army v Dalziel .......................................... 744 Georgiadis v Australian and Overseas Telecommunications .............. 746 Newcrest Mining v Commonwealth ............................................... 749 ICM Agriculture v Commonwealth ................................................. 750 JT International SA v Commonwealth ............................................. 754 Mutual Pools and Staff v Commonwealth ...................................... 764 Attorney-General (NT) v Emmerson ............................................... 768 Nintendo Co v Centronic Systems .................................................. 774 Health Insurance Commission v Peverill .......................................... 775

[10.200] Section 51(xxxi) in relation to ss 96 and 122 ....................................... 780 [10.210] [10.230] [10.240] [10.250]

P J Magennis v Commonwealth ..................................................... ICM Agriculture v Commonwealth ................................................. Spencer v Commonwealth ............................................................ Newcrest Mining v Commonwealth ...............................................

780 781 783 785

[10.260] SECTION 80 .............................................................................................................. 787 [10.260] Right to trial by jury ................................................................................. 787 [10.270] Kingswell v The Queen .................................................................. 788 [10.280] Brown v The Queen ...................................................................... 791

[10.300] SECTION 116 ............................................................................................................ 795 [10.300] General observations ............................................................................... 795 [10.310] Establishing any religion ......................................................................... 796 [10.320] The DOGS Case ........................................................................... 796

[10.340] The free exercise of any religion ............................................................ 799 [10.340] Jehovah’s Witnesses Case .............................................................. 799

[10.360] Religious tests as a qualification for any office or public trust under the Commonwealth ....................................................................................... 801 [10.360] Williams v Commonwealth ............................................................ 801

[10.370] Religion ..................................................................................................... 803 [10.380] Church of the New Faith v Commr of Pay-roll Tax (Vic) ................... 803

[10.390] SECTION 117 ............................................................................................................ 804 [10.390] Introductory remarks ............................................................................... 804 [10.400] The restrictive interpretation .................................................................. 804 [10.410] Henry v Boehm ............................................................................. 805

[10.430] The expansive interpretation .................................................................. 808 [10.440] Street v Queensland Bar Association .............................................. 808

[10.460] A BILL OF RIGHTS FOR AUSTRALIA? ....................................................................... 818 737

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[10.10] The Commonwealth Constitution, which drew its inspiration from the United States

Constitution, does not contain a Bill of Rights. One explanation which has been proffered is that the founders had an “unshakeable faith in parliamentary democracy”. As a delegate (Cockburn) put it: People would say “Pretty things these states of Australia; they have to be prevented by a provision in the Constitution from doing the grossest injustice”.

Such a sentiment, according to La Nauze, has a “certain innocent sublimity”. Indeed, “there were other reasons, less sublime, for suspicion about the formulae of ‘rights’”. One principal reason was the concern about the impact of a Bill of Rights on the validity of racially discriminatory legislation such as Victorian factory legislation which discriminated against the Chinese, and Western Australian legislation which precluded an Asiatic or African alien from obtaining gold mining rights. See La Nauze, The Making of the Australian Constitution (Melbourne University Press, Melbourne, 1972), pp 227-232. Deane J in Street v Queensland Bar Association (1989) 168 CLR 461 at 521–522 has made the following observations: It is often said that the Australian Constitution contains no Bill of Rights. Statements to that effect, while literally true, are superficial and potentially misleading. The Constitution contains a significant number of express or implied guarantees of rights and immunities. The most important of them is the guarantee that the citizen can be subjected to the exercise of Commonwealth judicial power only by the “courts” designated by Ch III (s 71). Others include: the guarantee that the trial on indictment of any offence against any law of the Commonwealth shall be by jury (s 80); the guarantees against discrimination between persons in different parts of the country in relation to custom and excise duties, and other Commonwealth taxes and bounties (ss 51(ii), 51(iii), 86, 88 and 90); the guarantee of freedom of interstate trade, commerce and intercourse (s 92); the guarantee of direct suffrage and of equality of voting rights among those qualified to vote (ss 24 and 25); the guarantee of the free exercise of religion (s 116); and the guarantee against being subjected to inconsistent demands by contemporaneously valid laws (ss 109 and 118).

Deane J went on to describe all these guarantees of rights or immunities as of “fundamental importance” because they serve “the function of advancing or protecting the liberty, the dignity or the equality of the citizen under the Constitution”. For a critical comment on these observations of Deane J, see Leslie Zines, “Constitutionally Protected Individual Rights” in P D Finn (ed), Essays on Law and Government Vol 2 (The Citizen and the State in the Courts) (LBC Information Systems, Ryde, 1996), pp 136-137. In the absence of a Bill of Rights, the Commonwealth Constitution contains some express right provisions which are the focus of this chapter: ss 41, 80, 51(xxxi), 116 and 117 (see also s 92 discussed in Chapter 8).

SECTION 41 [10.20] Section 41 of the Commonwealth Constitution provides: No adult person who has or acquires a right to vote at elections for the more numerous House of the 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.

The main query which has arisen is the effect of s 41 on the Commonwealth Parliament’s power to provide for the qualifications of electors. Section 30 of the Commonwealth Constitution provides: 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 738

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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.

Does s 41 impose a constraint on the power of the Commonwealth Parliament provided by s 30? On the proper scope of s 41, Quick and Garran, The Annotated Constitution of the Australian Commonwealth, (Legal Books, reprint, 1976), p 486) said: It is clear that a right under this section to vote at federal elections can be acquired after the establishment of the Commonwealth, but it is not so clear that such a right can be acquired after the passing of a federal franchise law, or under State laws passed after the passing of such federal law. Three possible interpretations may be suggested: (1) That the right may be acquired at any time, under a State law passed at any time. (2) That the right may be acquired at any time, but only under a State law passed before a federal franchise is fixed. (3) That the right must be acquired by the “adult person” concerned before the federal franchise is fixed.

In King v Jones (1972) 128 CLR 221, the attention of the High Court was focused on the meaning of an “adult person” in s 41 of the Commonwealth Constitution. The court held that a person of 18 years who had acquired the right to vote at elections for the House of Assembly in South Australia did not become entitled to vote in Commonwealth elections. Gibbs J explained (at 265–266): [A]s a general rule it is right to say that, although words used in the Constitution should bear the meaning which they had at the time of federation, which meaning does not change, their denotation must extend as new concepts develop … When, however, the Constitution itself contains an indication that it was intended that a word should be understood in a particular sense, and in that sense alone, effect must of course be given to the intention thus revealed … [T]he whole purpose of including the word “adult” in s 41 was to ensure that a State legislature should not be able, by lowering the age at which the State franchise was granted, to confer a right to vote at Commonwealth elections on persons under the age of twenty-one. It would be quite inconsistent with this purpose to leave to State law the determination of the question who is an “adult person” for the purposes of s 41. Moreover, the words of such a provision as s 41 must have a fixed meaning throughout the Commonwealth, and it cannot be supposed that it was intended that a person of a given age might be an “adult person” within the section if he lived in one State, but not if he lived in another … [T]he intention revealed in s 41 is that the words “adult person” should denote persons of the age of twenty-one, and that this denotation should not be extended to include persons below that age who might in future be treated by State law as of full age.

The third of the interpretations proffered by Quick and Garran was endorsed by the High Court in R v Pearson; Ex Parte Sipka (1983) 152 CLR 254.

R v Pearson; Ex Parte Sipka [10.30] R v Pearson; Ex parte Sipka (1983) 152 CLR 254 at 260–271 [Writs for the elections of both houses of the Commonwealth Parliament were issued on 4 February 1983 with the polling date fixed as 5 March 1983. Under s 45(a) of the Commonwealth Electoral Act 1918 (Cth), claims for enrolment which had not been received by the Electoral Registrar before 6.00 pm on 4 February 1983 could not be registered until after the close of polling. The four prosecutors whose names were on the New South Wales roll of electors but which were not registered on the Commonwealth roll sought to have their names entered in the Commonwealth roll to enable them to vote at the federal elections on 5 March 1983 by invoking s 41 of the Commonwealth Constitution.] Gibbs CJ, Mason and Wilson JJ: 260 Section 41 does not in terms confer a right to vote. It provides that no person who has or acquires a right to vote at elections for the more numerous House of the [10.30]

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R v Pearson; Ex Parte Sipka cont. Parliament of a State shall, while the right continues, be prevented by any law of the Commonwealth from voting at Commonwealth elections. The section appears to be framed on the assumption that an adult person who has or acquires (ie, has at the date of the Constitution or acquires thereafter) a right to vote at elections for the more numerous House of the Parliament of a State would be entitled to vote at Commonwealth elections unless a law of the Commonwealth prevented it; the section, on that assumption, forbids the Commonwealth Parliament from passing any law which would have the effect of depriving any such person of his right to vote at Commonwealth elections while his right to vote at State elections continues. If this were not the correct construction of the section, the use of the words “be prevented” would be quite inapt. The section prevents the Commonwealth Parliament from taking away a right to vote; it does not create an entitlement which does not otherwise exist. Under the Constitution, persons qualified as electors for the more numerous House of the Parliament of a State were qualified to vote for the election of members of the House of Representatives, but only until the Parliament otherwise provided: see s 30 of the Constitution. By s 8 of the Constitution, a person qualified to vote for the election of members of the House of Representatives is also qualified to vote for the election of Senators. The Parliament has power to make laws with respect to matters in respect of which the Constitution makes provision until the Parliament otherwise provides (s 51(xxxvi)) and thus has power to establish the franchise for electors of members of the House of Representatives and Senators. A law dealing with the franchise may be complete, so that it excludes for the future all reference to State law, or it may deal only with some aspects, leaving 261 other aspects to be dealt with by State law. Once a law of the Commonwealth has completely provided the qualifications for electors for Commonwealth elections (as in fact Commonwealth laws have done since the Commonwealth Franchise Act 1902 was passed) no elector thereafter could acquire a qualification to vote at Commonwealth elections under ss 30 and 8 of the Constitution. By virtue of s 41, the Commonwealth law which first established the franchise could not have prevented any person who then had a right to vote at elections for the more numerous House of the Parliament of a State from voting at elections for either House of the Parliament of the Commonwealth. But once a Commonwealth law had been passed completely establishing the franchise, no person, not already qualified to vote at Commonwealth elections, could become so qualified by virtue of the Constitution alone. No future law could be said to prevent such persons from voting, since there was nothing in the Constitution or in the law that gave them a right to vote. This construction, which requires that the right to vote to which s 41 refers must have been acquired by the persons concerned before the federal franchise was established, gives a narrow effect to s 41. However, this construction of the section is supported not only by obvious considerations of policy, but also by the history of the section. If the section gave a right to vote at Commonwealth elections to any person who, after the Commonwealth franchise was established, became entitled to vote by virtue of amendments to the State laws, the result would be that the uniform franchise established under ss 30 and 51(xxxvi) of the Constitution would be subject to amendment by the laws of the various States. The Commonwealth law could in effect be amended by any State law which conferred a more liberal franchise. In other words, any State could, unilaterally, alter the Commonwealth franchise in a way which discriminated in favour of its own citizens. It is impossible to suppose that results of this kind were intended. The provisions of s 128 of the Constitution which require a law for an alteration to the Constitution to be passed, inter alia, by a majority of electors, and which also provides that “until the qualification 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” is opposed to any such construction. But in any case it is apparent that it was intended by s 30 that once the Commonwealth Parliament had made provision for the qualification of electors such enactment would prevail over any conflicting State law subject to the protection of existing rights afforded by s 41. As a matter of historical fact, the object intended 262 by the framers of the Constitution to be achieved by s 41 is quite clear. It is unnecessary, for the present purposes, to consider the extent to which debates at the Constitutional Conventions may be regarded in the construction of the Constitution. It was, however, accepted in the early case of Municipal Council of Sydney v Commonwealth ((1904) 1 CLR 208 at 213–214) by Griffith CJ that it is permissible to have regard to such debates “for the purpose of seeing … what was the evil to be remedied”. The 740

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R v Pearson; Ex Parte Sipka cont. Convention debates, whose effect is summarized in Quick and Garran, pp 483-487, show that the apprehended mischief which s 41 was designed to prevent was that the women of South Australia might be deprived of the federal franchise by the Commonwealth Parliament. At the time of the debates women were entitled to vote only in South Australia; in the other colonies the suffrage was restricted to males, although by the time the Constitution came into operation the women of Western Australia were also enfranchised. … 264 … For the reasons we have given we hold that s 41 preserves only those rights which were in existence before the passing of the Commonwealth Franchise Act 1902. It follows that none of the prosecutors can succeed in the present case. None of them had acquired any right to vote at a State election before the federal franchise was established. None, therefore, is prevented from voting, within the meaning of s 41, by the Commonwealth Electoral Act 1918. Murphy J: 268 The respondents also argue that the plain meaning of s 41 and the broad scope of its guarantee must be restricted by implications which exhausted its effect in 1902, or in any event confine it to persons who are now over 100 years old. The argument is that the right in s 41 must have been acquired by the adult person before the Commonwealth Franchise Act 1902 (Cth) came into force (ie, before 12 June 1902). Under the State electoral laws then in force (as well as the then meaning of adult person in s 41) only persons twenty-one years of age or over could have or acquire the right, therefore, so the argument runs, s 41 was intended to apply only to persons who were adults at least by 12 June 1902, so that the only persons presently entitled to the benefit are centenarians. An interpretation which requires that “adult person”, must in 1983 be read as referring to centenarians, cannot be correct. The argument requires that words “until the Parliament otherwise provides” or similar words be read into s 41, presumably before the words “be prevented”. 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 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. The context. Section 41 is the first section in Pt IV of the Constitution which is headed “Both Houses of Parliament”. The sections which follow immediately deal with oaths or affirmations of 269 senators and members (s 42); ineligibility of members of one House to be chosen or sitting as a member in the other (s 43); disqualifications (s 44); vacancies (s 45), are not of limited duration. They are all prospective, ambulatory and constantly speaking. This context strongly suggests a similar interpretation of s 41. Contrast with transitional provisions. Where it was intended in Pt IV that a constitutional provision was to be transitional the section is introduced by the words “Until the Parliament otherwise provides” (see ss 46, 47, 48). The same clause is expressed in other parts of the Constitution (see ss 3, 7, 10, 20, 29, 30, 31, 34, 39, 65, 66, 67, 73, 87, 93, 96 and 97). There is no warrant for reading it into s 41. When the framers intended such a limitation they expressed it. Its omission was intended to ensure that the Parliament could not prevent adult persons with a right to vote in State elections from voting in federal elections. If it were included, expressly or impliedly, s 41 would be nonsensical. A section which read, until Parliament otherwise provides, no adult person etcetera … shall be prevented by any law of the [10.30]

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R v Pearson; Ex Parte Sipka cont. Commonwealth etcetera, would be internally contradictory. It would say that no law of the Commonwealth shall prevent voting until the law of the Commonwealth did prevent it. Policy considerations. One of the arguments against giving the s 41 guarantee the full scope of its plain meaning is that this would be undesirable, in particular that it would at least from the viewpoint of 1901 and subsequent history have made ineffective the desirable goal of a uniform federal franchise which was achieved by the Commonwealth Franchise Act 1902. This does not bear examination. Before 1901 the immediate concern was that without s 41 the women of South Australia, who were entitled to vote in State elections, might be prevented from voting in federal elections. The concern was not limited to women’s rights nor was the guarantee. Before 1901, Aborigines had the right to vote at elections in certain States but not in others. The right to vote was not absolute. For example, those in receipt of aid were disqualified in New South Wales until 1926 (see Parliamentary Electorates and Elections Act (No 2) 1912 (NSW), s 20, 3(b); Parliamentary Electorates and Elections Amendment Act 1926, s 9, (2); “House of Representatives Report from the Select Committee on Voting Rights of Aborigines” in Parliamentary Papers (General and Finance), Vol 2 (1961), p 1401). The Commonwealth Franchise Act 1902 (Cth) purported to be “An Act to provide for an Uniform Federal Franchise”. Policy argu- 270 ments by the respondents are based on it being such an Act. It was not. Its s 4 provided: No aboriginal native of Australia, Asia, Africa or the Islands of the Pacific except New Zealand shall be entitled to have his name placed on an Electoral Roll unless so entitled under section forty-one of the Constitution. Although the Act extended the franchise to women in general, by disqualifying aboriginals who were not entitled to vote in State elections (and thus entitled by s 41) it deliberately abstained from introducing uniform federal franchise. (This was continued by the Commonwealth Electoral Act 1918 (Cth), s 39(5).) The Commonwealth Electoral Act 1918 (No 26 of 1961) removed the disqualification of aboriginal natives of Asia, Africa and the Islands of the Pacific, but retained it for aboriginal natives of Australia (s 4). The Select Committee on the Voting Rights of Aboriginals established by the House of Representatives in 1961, sought the opinions of Solicitor-General Bailey and of Geoffrey Sawer, Professor of Law, Australian National University on the bearing of s 41 on the power of the Commonwealth to extend the franchise to aborigines in those States of the Commonwealth where there were qualifications on this right. The Solicitor-General conceded that several views were open but stated: “In short, my advice on this matter is that, though s 41 prevents the Commonwealth Parliament from denying to any person entitled under State law to vote at elections for the Lower House in the State the right to vote at a Federal election, the section does not in any way prevent the Parliament from conferring a federal vote on persons not entitled to vote at a State election” (Appendix VI, p 1438). On the question “whether s 41 is prospective in operation, or applies only to those who were qualified at the date when the first Commonwealth Franchise Act 1902 came into operation”, Professor Sawer advised “The prospective view seems clearly the correct one, though s 39(5)(a) and (aa) of the Commonwealth Electoral Act 1918 for caution covers both possibilities” (Appendix IV, p 1434). Following the Report of the Select Committee the disqualification of Australian aborigines was removed in 1962 by amendment of the Commonwealth Electoral Act 1918 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 (see Parliamentary Debates, House of Representatives, Vol 30, 20 April 1961). It guaranteed the right to vote to Aborigines in New South Wales, Victoria, South Australia and Tasmania. The history of discrimination against Aboriginal voting rights repudiates the argument that giving the 271 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. Thus Quick and Garran suggested that the Parliament could well disqualify persons who 742

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R v Pearson; Ex Parte Sipka cont. were in receipt of charity ((1901), p 485). A modern version of this would be that Parliament 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. Section 41 is a very important right. It permits extension to adult persons of voting rights to the full extent permitted to them from time to time under State law. It cannot reduce federal voting rights, nor can it extend them to other than “the people of the Commonwealth” (see s 24), nor in the case of voting for senators to other than “the people of the State” (see s 7). Section 41 cannot effect the proportionate representation of any State in either House of the Parliament. It is no novelty for a constitutional guarantee to be read in such a way as to make a mockery of it. Dixon and Evatt JJ so regarded the interpretation given to the guarantee of trial by jury in s 80 of the Constitution. They said “there is high authority for the proposition that ‘the Constitution is not to be mocked.’” Their observation in relation to s 80 that no court could countenance the suggestion that the language was carefully chosen so that the guarantee it appeared on the surface to give should be in truth illusory, is also applicable to s 41. (See R v Federal Court of Bankruptcy; Ex parte Lowenstein ((1938) 59 CLR 556 at 582).) To read s 41 as referring to adult persons who on 1 January 1901 had or who shortly thereafter acquired a State voting right (or any similar modification) is to misread it and produce another mockery of the Constitution.

[10.40]

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Notes&Questions

In the light of the majority decision in R v Pearson; Ex parte Sipka it can rightly be said that “the practical effect of s 41 is spent” (per Brennan, Deane and Dawson JJ at 280). They added: 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.

See A Twomey, “The Federal Constitutional Right to Vote in Australia” (2000) 28 Federal Law Review 125; Jonathan Crowe and Peta Stephenson, “An Express Constitutional Right to Vote? The Case for Reviving Section 41” (2014) 36 Sydney Law Review 205. 2.

Further, in Rowe v Electoral Commissioner (2010) 243 CLR 1 at 14 [9] French CJ commented that s 41 “has no effect on the present case as it only protects rights to vote which were in existence at Federation.” Rowe v Electoral Commissioner (2010) 243 CLR 1 (see Chapter 11, at [11.250]) related to the constitutionality of an amendment to the Commonwealth Electoral Act 1918 (Cth) which brought about an earlier closing of the Commonwealth electoral roll. In Rowe, French CJ (at [9]) commented that s 41 “has no effect on the present case as it only protects rights to vote which were in existence at Federation” (see also Hayne J at [236]). The Chief Justice’s statement is consistent with the majority’s conclusion in R v Pearson; Ex parte Sipka (1983) 152 CLR 254. While s 41 was still operative when the Commonwealth Constitution came into effect on 1 January 1901, the High Court had maintained that s 41 ceased to confer a right to vote at federal elections once the Commonwealth Franchise Act 1902 (Cth) came into force in June 1902.

[10.40]

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SECTION 51(XXXI) Introductory observations [10.50] Section 51 empowers the Commonwealth Parliament to make laws 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.

In Grace Brothers Pty Ltd v Commonwealth (1946) 72 CLR 269 at 290, Dixon J described this power as being one “to make laws with respect to a compound conception, namely, ‘acquisition-on-just terms.’”; the High Court unanimously affirmed this description in Telstra Corp Ltd v Commonwealth (2008) 234 CLR 210 at 230 [43]. In the Bank Nationalisation Case (1948) 76 CLR 1 at 349–350, Dixon J further described the role of s 51(xxxi) as follows: 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.

Dixon CJ further elaborated the scope of the power in Attorney-General (Cth) v Schmidt (1961) 105 CLR 361 at 371–372: [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 authorised the same kind of legislation but without the safeguard, restriction or qualification.

Six members of the High Court affirmed these remarks in Nintendo Co Ltd v Centronic Systems Pty Ltd (1994) 181 CLR 134 at 160 (see [10.170]). The requirement of just terms in s 51(xxxi) therefore precludes the use of other heads of power granted by s 51 to effectuate the acquisition of property for Commonwealth purposes. As well as the “just terms” constraint, the Commonwealth Parliament is also constrained to the extent that it can “only legislate for the acquisition of property for particular purposes”: Final Report of the Constitutional Commission (1988), Vol 1, p 600. That is, the purpose of the acquisition must be one in respect of which the Commonwealth enjoys legislative power. In addition to constraining the power, this purpose requirement has also informed judicial interpretation of the scope of the guarantee of just terms: see the judgments of Gaudron J in Newcrest Mining (WA) Ltd v Commonwealth (1997) 190 CLR 513 at 568–569 (below at [10.250] and of Dawson J in Nintendo Co Ltd v Centronic Systems Pty Ltd (1994) 181 CLR 134 at 165–167 (below at [10.170]). “The acquisition of property”

Minister of State for the Army v Dalziel [10.60] Minister of State for the Army v Dalziel (1944) 68 CLR 261 at 284–286 [Regulation 54 of the National Security (General) Regulations (Cth) made under the National Security Act 1939 authorised the Minister of State for the Army to take possession of any land if it appeared to the Minister to be necessary “in the interests of public safety, the defence of the Commonwealth or the efficient prosecution of the war or for maintaining supplies and services essential to the life of the community.” Regulation 60H authorised the Minister to make orders providing the basis on which compensation was to be awarded. An order was made by the Minister in pursuance of this authority 744

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Minister of State for the Army v Dalziel cont. but this order precluded compensation for loss of profits or occupation arising from the taking of possession by the Commonwealth. Acting under reg 54, the Minister took possession of land which was let by its owner on a weekly tenancy to Dalziel who rejected an offer of compensation by the Minister. The Supreme Court of New South Wales held that the taking of possession from Dalziel amounted to an acquisition of property and that the terms of compensation provided for by reg 60H were not just. An appeal was made by the Minister to the High Court. Rich, McTiernan and Williams JJ (Latham CJ and Starke J dissenting) invalidated reg 60H and the order made under it.] Rich J: 284 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 … 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)) … What we are concerned with is not a private document 285 creating rights inter partes, but a Constitution containing a provision of a fundamental character designed to protect citizens from 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 authorizes 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. … 286 … 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.

[10.70]

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Notes&Questions

McTiernan J, at 295, said: The word “property” in s 51(xxxi) is a general term. It means any tangible or intangible thing which the law protects under the name of property. The acquisition of the possession of land is an instance of the acquisition of property.

McTiernan J also pointed out that the invalidity of reg 60H did not affect the validity of the other regulations, one of which empowered a court to determine compensation under ordinary established principles of the law of compensation for the compulsory taking of property. [10.70]

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2.

3.

Latham CJ, dissenting, said that the Commonwealth could not be said to have acquired land “unless it has become the owner of land or of some interest in land” (at 276). Is this view consistent with the interpretation of a constitutional guarantee? In the Bank Nationalisation Case (1948) 76 CLR 1 at 349, Dixon J said: I take Minister of State for the Army v Dalziel 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.

Georgiadis v Australian and Overseas Telecommunications [10.80] Georgiadis v Australian and Overseas Telecommunications Corporation (1994) 179 CLR 297 at 304–325 [Prior to 1988, an employee of the Commonwealth was entitled to workers compensation payments in accordance with the Compensation (Commonwealth Employees) Act 1971 (Cth) and, assuming negligence, was also entitled to maintain an action for common law damages. The plaintiff, an employee of “Telecom”, challenged the validity of s 44 of the Commonwealth Employees’ Rehabilitation and Compensation Act 1988 (Cth) which purported to extinguish his right to sue for common law damages in respect of injuries sustained before the commencement of the Act. The High Court (Mason CJ, Brennan, Deane and Gaudron JJ, Dawson, Toohey and McHugh JJ dissenting) held that the section was invalid in its application to the plaintiff on the ground that it infringed s 51(xxxi).] Mason CJ, Deane and Gaudron JJ: 304 It is clear that “not every compulsory divesting of property is an acquisition within s 51(xxxi)” (Trade Practices Commission v Tooth & Co Ltd (1979) 142 CLR 397 at 408, per Gibbs J; the Tasmanian Dam Case (1983) 158 CLR 1 at 247, per Brennan J). And as Mason J pointed out in the Tasmanian Dam Case (at 145), there is a distinction between a taking, which is the subject of the Fifth Amendment to the United States Constitution and an acquisition, with which s 51(xxxi) is concerned. His Honour went on to say that to constitute an acquisition within s 51(xxxi) “it is not enough that [the] legislation adversely affects or terminates a pre-existing right that an owner enjoys in relation to his property; there must be an acquisition whereby the Commonwealth or another acquires an interest in property, however slight or insubstantial it may be” (at 145). … 305 … If there is a receipt, there is no reason why it should correspond precisely with what was taken. That is particularly so with “innominate and anomalous interests” (Bank Nationalisation Case (1948) 76 CLR at 349). Thus, the fact that neither Telecom nor any one else now has the cause of action which was previously vested in Mr Georgiadis is not conclusive of the question whether there has been an acquisition of property for the purposes of par (xxxi). Telecom and the Commonwealth relied on the difference between a taking and an acquisition to argue that the extinguishment of a cause of action cannot constitute an acquisition. Of course, it will often be the case that it does not, as, for example, where the cause of action is extinguished by judgment or by the effluxion of time. … But the position may well be different in other circumstances.… [Constitutional G]uarantees and prohibitions are concerned with substance not form. Within that context, it is relevant to consider, by way of example, a vested cause of action against the Commonwealth for goods sold and delivered. If legislation extinguished that cause of action, it would, in substance, effect its acquisition (see Mutual Pools & Staff Pty Ltd v Commonwealth at 172–173, per Mason CJ; at 185–186, per Deane and Gaudron JJ; see also at 223–224, per McHugh J), for the Commonwealth, having obtained the goods in exchange for its promise to pay, would be freed from its liability on that promise. Accordingly, “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 (which, of course, includes liability being brought to an end without payment or other satisfaction) and the cause of action is one that arises under the general law. The position may be different in a case 746

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Georgiadis v Australian and Overseas Telecommunications cont. involving the extinguishment or modification of a right that has no existence apart from statute. That is because, prima facie at least and in the absence of a recognized legal relationship giving rise to 306 some like right, a right which has no existence apart from statute is one that, of its nature, is susceptible of modification or extinguishment. … So far as the issues in this case are concerned, the effect of s 44, if valid, is to extinguish a vested cause of action that arose under the general law. That is so even if the right to proceed against the Commonwealth is properly identified as a statutory right. And its effect is to confer a distinct financial benefit on the Commonwealth and its agencies in respect of their pre-existing liability … In our view, the position is no different from that involved in the extinguishment of a vested cause of action against the Commonwealth for goods sold and delivered. Doubtless, Mr Georgiadis and other workers provided their skill and labour on the basis that they were entitled to damages at common law as well as workers’ compensation benefits if injured as a result of Telecom’s negligence. In that context, the right to damages can realistically be seen as part of the overall quid pro quo for the work performed. … Not every Commonwealth law with respect to the acquisition of property falls within s 51(xxxi) of the Constitution. It may be outside that paragraph because, although it effects an acquisition of property, it is a law of a kind that is clearly within some other head of legislative power (as to why this is so, see Mutual Pools & Staff Pty Ltd v Commonwealth at 169–172, per Mason CJ; at 186–188, per Deane and Gaudron JJ). That is the case with a law imposing taxation or a law providing for the sequestration of the estate of a bankrupt. Or it may be outside s 51(xxxi) because it effects an acquisition of a kind that does not permit of just terms, as in the case of a law imposing a penalty by way of forfeiture (see Re Director of Public Prosecutions; Ex parte Lawler at 275–276, per Mason CJ; at 285–286, per Deane and Gaudron JJ). And, it may fall outside s 51(xxxi) because it cannot fairly be characterized 307 as a law for the acquisition of property for a purpose in respect of which the Parliament has power to make laws. That will generally be the case with laws directed to resolving competing claims or providing for “the creation, modification, extinguishment or transfer of rights and liabilities as an incident of, or a means for enforcing, some general regulation of the conduct, rights and obligations of citizens in relationships or areas which need to be regulated in the common interest” (Mutual Pools & Staff Pty Ltd v Commonwealth at 189–190, per Deane and Gaudron JJ; see also at 171–172, per Mason CJ). It cannot be said that a law extinguishing a cause of action for damages for employment injuries sustained as the result of the negligence of the Commonwealth or its agencies is so clearly within some other head of legislative power that it falls outside s 51(xxxi), as is the case with a law imposing taxation. Nor does s 44 of the Act effect an acquisition of a kind that does not permit of just terms, as is the case with a law imposing a penalty by way of forfeiture. However, the argument that s 44 does no more than modify the limitation period applicable to a cause of action which vested before the new scheme began is, in effect, an argument that s 44 is not fairly characterized as a law with respect to the acquisition of property within s 51(xxxi). However, it is by no means accurate to describe s 44 as a law modifying the limitation period applicable to causes of action with respect to injuries sustained by Commonwealth employees before the new scheme came into effect. … [Section] 44 puts an end to a cause of action against the Commonwealth or its agencies if it was not sued upon before it, s 44, came into effect. Section 44 operated once and for all as a final measure terminating those causes of action … 308 One consequence of s 51(xxxi)’s operation through characterization and concern with substance is that there will inevitably be borderline cases in which the question whether a law bears the distinct character of a law with respect to the acquisition of property for a s 51(xxxi) purpose is finely balanced. The present is such a case. On balance, we have reached the conclusion that s 44 does possess such a distinct character. It may well be that, if s 44 appeared in legislation establishing a compensation scheme applying to employers and employees generally (assuming power to enact a scheme of that kind), it would not fairly be characterized as a law for the acquisition of property for a purpose for which the Parliament has power to make laws. But when s 44 is viewed in the context of a scheme which applies only to Commonwealth employees, it may be fairly characterized as a law for the acquisition of the causes of action which vested in those employees prior to the commencement of the new scheme. That [10.80]

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Georgiadis v Australian and Overseas Telecommunications cont. acquisition is for the purposes of that scheme, that is to say, it is for a purpose for which the Parliament has power to make laws. … The Act provides no compensation whatsoever with respect to the causes of action which vested before the new scheme commenced and which … are, in substance, acquired by s 44. Accordingly, s 44 is invalid to that extent by reason that it effects an acquisition of property other than on just terms as required by s 51(xxxi) of the Constitution. Brennan J [held that s 44 was invalid]: 312 Assuming, without deciding, that the Commonwealth’s liability in tort is dependent on laws of the Commonwealth, that liability is not the creature of statute. The liability is created by the common law and, provided the corresponding common law cause of action is vested, the person in whom it is vested is entitled to the protection of s 51(xxxi). Both Dawson and Toohey JJ held that, although the Commonwealth benefited from the extinguishment of the plaintiff’s right of action, this extinguishment did not amount to an acquisition by the Commonwealth of a proprietary right.] McHugh J (dissenting): 325 In my opinion, s 44 of the Act in its application to the plaintiff was not a law with respect to the “acquisition of property from any … person for any purpose in respect of which the Parliament has power to make laws”. This is so notwithstanding that the 1988 Act extinguished the liability of the defendant to pay damages to the plaintiff in respect of his injuries. It is true that, as a result of that Act the plaintiff has been deprived of a chose in action, and a chose in action is property for the purposes of s 51(xxxi) of the Constitution. Furthermore, the defendant has gained a corresponding benefit of commensurate value. However, the Commonwealth authority has not acquired the property of the plaintiff. This is because the right of the plaintiff to bring his action was dependent upon federal law and was always liable to be revoked by federal law. A right which can be extinguished by a federal law enacted under a power other than s 51(xxxi) is not a law which falls within the terms of that paragraph of the Constitution. To use the words of Dixon CJ in Burton v Honan, “the whole matter lies outside the power given by s 51(xxxi)” of the Constitution.

Notes&Questions

[10.90]

1.

2.

Attorney General (NT) v Chaffey (2007) 231 CLR 651 concerned the application of s 50 of the Northern Territory (Self-Government) Act 1978 (Cth), which imposes a requirement of just terms on the acquisition of property in the same terms as s 51(xxxi) of the Constitution, to a Northern Territory law changing the statutory measure of workers’ compensation. The High Court found that there was no acquisition of property because the statutory rights to compensation “were of a nature which rendered them liable to variation”, meaning that no property was acquired in the relevant sense when the statutory right was varied ((2007) 231 CLR 651 at 663–666 [21]–[30] per Gleeson CJ, Gummow, Hayne and Crennan JJ; see also 669–671 [44]–[50] per Kirby J, 672 [55] per Callinan J, 673–675 [60]–[66] per Heydon J). What is the difference between a statutory alternation to a common law right and a statutory alternation to an existing statutory right? In the Tasmanian Dam Case (1983) 158 CLR 1 at 145, Mason J said: … it is not enough that legislation adversely affects or terminates a pre-existing right that an owner enjoys in relation to his property; there must be an acquisition whereby the Commonwealth or another acquires an interest in property, however slight or insubstantial it may be.

What impact does the majority’s approach in Georgiadis have on the notion of “acquisition”? See M Cox, “Acquiring Property on Just Terms” (a case note) in (1994) 19 Melbourne University Law Review 768. 748

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Whether or not such an interest in property, “however slight or insubstantial”, is acquired will often depend upon the details of the property law regime surrounding the right that is adversely affected. This becomes particularly important in cases concerning regulation that is not itself aimed at enlarging the proprietary interests of the Commonwealth or some other person, but that nevertheless abridges or extinguishes a person’s enjoyment of property rights. The following extracts illustrate this point in relation to the regulation of minerals extraction in national parks, the regulation of groundwater extraction, and the regulation of the packaging of tobacco products.

Newcrest Mining v Commonwealth [10.100] Newcrest Mining (WA) Ltd v Commonwealth (1997) 190 CLR 513 at 530–635 [The case involved certain mining leases over parcels of land in the Northern Territory. Proclamations made under the National Parks and Wildlife Conservation Act 1975 (Cth) included these areas of land within Kakadu National Park, and thereby freed the land from rights to conduct mining operations upon it, and vested certain rights – but not minerals rights – in the Director of National Parks and Wildlife.] Brennan CJ: 530 Under its mining leases, Newcrest had the right exercisable against the Commonwealth as reversioner to mine for, extract and take away minerals from the land during the term of the lease. When that land was included in Kakadu National Park, Newcrest’s rights to carry on operations for the recovery of minerals were extinguished. … [T]he Commonwealth was left in undisturbed possession of the minerals on and under the land included in Kakadu National Park. The Commonwealth’s interest in respect of the minerals was enhanced by the sterilisation of Newcrest’s interests therein. In my opinion, by force of the impugned proclamation, the Commonwealth acquired property from Newcrest. 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”. Gummow J: 633 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”. … 634 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. 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. 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. … 635 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. 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 m beneath the surface. But, on the surface and to that depth, s 100(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 [10.100]

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Newcrest Mining v Commonwealth cont. 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. [On this point, Toohey, Gaudron and Kirby JJ agreed with Gummow J.]

ICM Agriculture v Commonwealth [10.110] ICM Agriculture Pty Ltd v Commonwealth (2009) 240 CLR 140 at 172–203 [The plaintiffs undertook farming in the Lachlan River region of New South Wales. The plaintiffs held a number of “bore licences” issued under the Water Act 1912 (NSW), which permitted the extraction of groundwater for irrigation purposes. In 2008, pursuant to an order made under the Water Management Act 2000 (NSW), those licences were replaced by new “aquifer access licences”. The new licences permitted the plaintiffs to take less water than had the bore licences. The new licensing system was intended to align the NSW Government’s Lower Lachlan Groundwater System Water Sharing Plan with a Funding Agreement that had been reached between the NSW and Commonwealth Governments pursuant to s 42 of the National Water Commission Act 2004 (Cth). In accordance with the Funding Agreement, the plaintiffs were offered “structural adjustment payments”, but it was conceded by the Commonwealth that the making of these payments would not amount to “just terms” within the meaning of s 51(xxxi). A majority of the High Court held that the changes to the plaintiff’s licences did not amount to an acquisition of property.] French CJ, Gummow and Crennan JJ: 172 [54] The Water Rights Act 1896 (NSW) (“the 1896 Act”) provided: “The right to the use and flow and to the control of the water in all rivers and lakes … shall … vest in the Crown.” (Section 1(I).) Section 6 of the 1912 Act retained this language. … Of significance for this case is that the vesting of rights to the “use” and “control” of water constituted an exercise of sovereignty in the sense that the rights so vested were based on the political power of the State. … 173 [55] … [T]he language of the 1896 Act and the 1912 Act does not disturb the common law notion that water, like light and air, is common property not especially amenable to private ownership and best vested in a sovereign state (Blackstone, Commentaries on the Laws of England, (1766), bk 2, c 1 at 1415. … [56] … [I]n Chasemore v Richards (1859) 7 HLC 349 [11 ER 140] … Lord Chelmsford distinguished between “water flowing in a definite channel, and water whether above or underground not flowing in a stream at all, but either draining off the surface of the land, or oozing through the underground soil in varying quantities” ((1859) 7 HLC 349 at 375 [11 ER 140 at 150]). Such water could be intercepted by a landowner. … 174 [58] In 1895, the need for legislation dealing with artesian bores was linked to the need to conserve water (New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 13 November 1895 at 2600 and 2601. It can be noted that the then Department of Water Conservation had completed some works on the Lower Lachlan). The Artesian Wells Act 1897 (NSW) provided for government involvement in sinking bores. The Water and Drainage and Artesian Wells (Amending) Act 1906 (NSW) required that artesian bores not sunk by the Crown be licensed. From 1912 bore licences were governed by Pt 5, Div 3 of the 1912 Act. … 177 [72] By additions made in 1966 (by the Irrigation, Water, Crown Lands and Hunter Valley Flood Mitigation (Amendment) Act 1966 (NSW)) the 1912 Act vested in what was then the [Water Resources] Commission and “for the benefit of the Crown” the right “to the use and flow and to the control of all subsurface water” (s 4B) and it was made an offence, except in accordance with the 1912 Act or with written permission of the Commission, to “interfere in any way with sub-surface water or obstruct its flow” (s 4C). The vesting effected by s 4B for the benefit of the Crown was apt to divest any common law rights, whether otherwise existing and whether classified as an interest in land, as the plaintiffs would have it. … 178 [75] The bore licences operated for the benefit of the lawful occupier for the time being of the land whereon the bores were sunk (s 117). From 15 October 2003, s 117J applied to the area in which the plaintiffs’ licences were granted. Section 117J provided for the transfer (permanently or for a period) of the whole or part of the water allocations for a licence, whether or not 750

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ICM Agriculture v Commonwealth cont. the transferee held another licence. In New South Wales, the assessment of the value of irrigable land takes into account rights to take water (Valuation of Land Act 1916 (NSW), s 6A(3)). Bore licences attached to irrigable land enhanced its market value and were commonly taken into account by lenders when assessing the value of security to be provided. But the approval of the Ministerial Corporation was necessary to any transfer and it might impose such conditions in relation to the transfer as it thought fit (s 117J(11)). [76] It has often been remarked that the facility given by statute for the transfer of rights created by or pursuant to that statute is an indication that for the general purposes of the law the rights may be classified as proprietary in nature. … But as Mason J … observed in R v Toohey; Ex parte Meneling Station Pty Ltd (1982) 158 CLR 327 at 342, where a licensing system is subject to Ministerial or similar control with powers of forfeiture, the licence, although transferable with Ministerial consent, nevertheless may have an insufficient degree of permanence or stability to merit classification as proprietary in nature. … 179 [80] It is unnecessary to resolve that particular dispute and to determine whether the bore licences were of such an insubstantial character as to be no more than interests defeasible by operation of the legislation which called them into existence. Acquisition of property? [81] This is because, whatever the proprietary character of the bore licences, s 51(xxxi) speaks, not of the “taking” (the term is used in the Fifth Amendment to the United States Constitution and the destruction of property rights may amount to a “taking”: Pennsylvania Coal Co v Mahon 260 US 393 (1922)), deprivation or destruction of “property”, but of its acquisition.… 180 [84] [I]n the present case, and contrary to the plaintiffs’ submissions, the groundwater in the L[ower] L[achlan] G[roundwater] S[ystem] was not the subject of private rights enjoyed by them. Rather, and as these reasons have sought to demonstrate, it was a natural resource, and the State always had the power to limit the volume of water to be taken from that resource. The State exercised that power from time to time by legislation imposing a prohibition upon access to and use of that natural resource, which might be lifted or qualified by compliance with a licensing system. The changes of which the plaintiffs complain implemented the policy of the State respecting the use of a limited natural resource, but that did not constitute an “acquisition” by the State in the sense of s 51(xxxi) (see Chapman v Luminis Pty Ltd (No 4) (2001) 123 FCR 62 at 264–274; Walden v Administration of Norfolk Island (2007) 212 FLR 345 at 352). Nor can it be shown that there has been an acquisition in the necessary sense by other licensees or prospective licensees. They have at best the prospect of increasing or obtaining allocations under the new system applying to the LLGS. [85] The decision in Newcrest Mining (WA) Ltd v Commonwealth (1997) 190 CLR 513 does not assist the plaintiffs. To acquire the substance of proprietary interests in the mining tenements considered in that case is one thing, to cancel licences to extract groundwater is another. The mining tenements were interests carved out of the radical title of the Commonwealth to the land in question, and the radical title was augmented by acquisition of the minerals released from the rights of another party to mine them. As Brennan CJ later explained (Commonwealth v WMC Resources Ltd (1998) 194 CLR 1 at 17 [17]; see also Smith v ANL Ltd (2000) 204 CLR 493 at 505 [22]), the property of the Commonwealth had been enhanced because it was no longer liable to suffer the extraction of minerals from its land in exercise of the rights conferred by the mining tenements held by Newcrest. Hayne, Kiefel and Bell JJ: 188 [109] By the middle of the 19th century, the English common law had settled many of the issues about rights to the use of water that had emerged during the industrial revolution. Common law riparian doctrine regarding natural surface streams was settled in Embrey v Owen (1851) 6 Ex 353 [155 ER 579] after full consideration of not only earlier English decisions but also Roman, American and French law. Embrey v Owen held that a riparian owner could make reasonable use of the water in a stream and that what was reasonable depended upon whether the natural flow of the stream was diminished. The underlying proposition which informed these principles was that water, like light and air, is common property (“for the common benefit of man” ((1851) 6 Ex 353 at 372 [155 ER 579 at 587])). … 189 [110] … In 1859, in Chasemore v Richards (1859) 7 HLC 349 [11 ER 140], the House of Lords settled the common law with respect to groundwater. The House of Lords held ((1859) 7 HLC 349 at 374–377 [11 ER 140 at 150–151]) that the principles established with [10.110]

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ICM Agriculture v Commonwealth cont. respect to flowing waters or streams were inapplicable to water percolating through underground strata and not forming a “known subterranean channel.” Water of the latter kind “has no certain course, no defined limits, but … oozes through the soil in every direction in which the rain penetrates” ((1859) 7 HLC 349 at 374 [11 ER 140 at 150]). … 190 [111] No limit was placed upon the use that a proprietor could make of groundwater ((1859) 7 HLC 349 at 374–379 [11 ER 140 at 150–152]). … The settlement in the 19th century of these common law rules about riparian rights and use of groundwater must not be permitted to obscure some important underlying ideas that find reflection in the rules that were established. [112] First and foremost there was then, and still must be, a clear recognition of the difficulty of applying notions of ownership or property to water in the ground or in a flowing stream. What exactly would be the subject of property rights? While still allowed to flow, no part of the water that flows in a stream can be isolated and tagged as the water “owned” by some person. And water in the ground may move more slowly but there is no less difficulty in identifying what would be the subject of the proprietary rights. … [113] Next, even if these difficulties of identifying the object in respect of which proprietary rights were to exist could be overcome, should any private proprietary right be recognised? In Embrey v Owen ((1851) 6 Ex 353 [155 ER 579] at 372 (Ex), 587 (ER)), [191] Parke B spoke of water flowing in a stream (like air and light) as “bestowed by Providence for the common benefit of man” (emphasis added). … [114] Further, the law that was stated in Chasemore v Richards with respect to groundwater must be understood having regard to two matters. First, little was then known about groundwater resources beyond the fact that water could sometimes be recovered by digging for it. Hence the references in Chasemore v Richards to water which “has no certain course, no defined limits.” Secondly, the actual decision in Chasemore v Richards anticipated what was later decided in Allen v Flood ([1898] AC 1): that an act lawful in itself is not converted by a malicious or bad motive into an unlawful act so as to make the doer of the act liable to civil action. A landowner who dug a well lawfully, and took water from it lawfully, was not liable to another simply because the other suffered some damage, or even if the taker of the water acted to harm the other (Acton v Blundell (1843) 12 M & W 324 [152 ER 1223]). [115] Finally, it is of the very first importance to recognise that the common law principles established in the 19th century were directed to the adjustment of rights between landowners. The issue in this case arises, not because there has been some adjustment of those rights, but because the polity has sought to regulate generally the access allowed to a common resource. … 199 [142] The acquisition of property of which the plaintiffs complain is alleged to have been effected by the replacement of their bore licences by aquifer access licences with smaller extraction entitlements. … 200 [143] The first point to recall is that, unlike minerals, if groundwater is extracted it will ordinarily be replaced, over time and at least to some extent, by natural processes. An important purpose for regulating access to groundwater is thus to ensure that the resource is neither depleted nor degraded. That is, control is directed not just to the use, consumption, or extraction of the resource, but to ensuring its continuing availability. [144] The second point to bear in mind is that bore licences and aquifer access licences are each creatures of statute. And each form of licence is, or was, a statutory dispensation from a general prohibition against the taking of groundwater. Because all sub-surface water was vested in the State in 1966, none of the licences was a regulation of some common law right to extract groundwater. That right had disappeared altogether in 1966 with the vesting of sub-surface water in the State, if, that is, it had not been extinguished previously by the earlier legislation regulating bores. And because the rights given by the licences were statutory rights, they were inherently susceptible ((Health Insurance Commission v Peverill (1994) 179 CLR 226; [1994] HCA 8; Newcrest Mining (WA) Ltd v Commonwealth (1997) 190 CLR 513; [1997] HCA 38; Attorney-General (NT) v Chaffey (2007) 231 CLR 651)) to change or termination. … [145] The third point is that to speak of groundwater (before extraction) as a subject of “property”, whether “owned” by the State or a person, seeks to engage legal concepts that have not hitherto been applied by the common law to water before it is reduced to possession. Water in the ground is a replaceable but fugitive resource. As was said in the passage from Embrey v Owen ((1851) 6 Ex 353 752

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ICM Agriculture v Commonwealth cont. [155 ER 579] at 369 (Ex), 585 (ER)) that is set out earlier in these reasons, in connection with riparian rights, flowing surface water is “publici juris, not in the sense that it is a bonum vacans … but that it is public and common”. No one has, or can have, property in it until it is reduced to possession. Or as Blackstone had put the same point, much earlier (Blackstone, Commentaries on the Laws of England, (1766), bk 2, c 2 at 18), water is a moveable, wandering thing, and must of necessity continue common by the law of nature; so that I can only have a temporary, transient, usufructuary property therein. The point, 201 made in Embrey v Owen and by Blackstone with respect to surface water, applies with as much, if not greater, force to groundwater before it is extracted and reduced to possession. [146] The fourth point to recall is that the particular rights which the State now has with respect to groundwater, like the rights the plaintiffs had under their bore licences, or now have under their aquifer access licences, are creatures of statute. In 1966, the State’s rights with respect to groundwater were described as the “right to the use and flow and to the control of all subsurface water.” (1912 Act, s 4B, as inserted by s 3(c) of the 1966 Amendment Act.) Those rights were vested (1912 Act, s 4B, as inserted by s 3(c) of the 1966 Amendment Act) in a public authority for the benefit of the Crown. The Water Management Act 2000 now makes substantially identical provision … Moreover, the references to “control”, “use” and “flow” are important. Those are the rights that are vested in the Crown (compare, in this respect, the legislation considered in the Kingborough Corporation Case where “every river, creek, or watercourse” within a designated area was vested in the council of the relevant municipality). [147] It may readily be accepted that the bore licences that were cancelled were a species of property. That the entitlements attaching to the licences could be traded or used as security amply demonstrates that to be so. It must also be accepted, as the fundamental premise for consideration of whether there has been an acquisition of property, that, until the cancellation of their bore licences, the plaintiffs had “entitlements” to a certain volume of water and that after cancellation their “entitlements” were less. Those “entitlements” were themselves fragile. They could be reduced at any time, and in the past had been. But there can be no acquisition of property unless some identifiable and measurable advantage is derived by another from, or in consequence of, the replacement of the plaintiffs’ licences or reduction 202 of entitlements (Newcrest (1997) 190 CLR 513 at 560 per Toohey J, 561 per Gaudron J, 634 per Gummow J). That is, another must acquire “an interest in property, however slight or insubstantial it may be” (The Tasmanian Dam Case (1983) 158 CLR 1 at 145 per Mason J; Tape Manufacturers (1993) 176 CLR 480 at 500 per Mason CJ, Brennan, Deane and Gaudron JJ, 528 per Dawson and Toohey JJ). [148] The only possible recipient of an advantage in this matter is the State. Did it derive some advantage from replacing the bore licences or reducing water entitlements? [149] The four considerations set out earlier in these reasons (the replaceable and fugitive nature of groundwater; that the licences in issue are a creature of statute and inherently fragile; that groundwater has not hitherto been thought to be a subject of property; and that the rights vested in the State are statutory rights for the purpose of controlling access to a public resource) all point towards the conclusion that the State gained no identifiable or measurable advantage from the steps that have been taken with respect to the plaintiffs’ water licences and entitlements. [150] Since at least 1966 no landowner in New South Wales has had any right to take groundwater except pursuant to licence. The rights the plaintiffs had under their bore licences (in particular, their right to extract certain volumes of water) did not in any sense “return” to the State upon cancellation of the licences. The State gained no larger or different right itself to extract or permit others to extract water from that system. It gained no larger or different right at all. [151] The plaintiffs submitted that the cancellation of their bore licences and the issue of new licences permitting extraction of less water was as much an acquisition of their property as the legislation considered in Newcrest Mining (WA) Ltd v Commonwealth ((1997) 190 CLR 513) was an acquisition of Newcrest’s mining tenements. But the cancellation of licences to extract groundwater stands in sharp contrast with the effective acquisition of the substance of the proprietary interests in mining [10.110]

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ICM Agriculture v Commonwealth cont. tenements considered in Newcrest. The rights enjoyed under those mining tenements included a grant and demise of the relevant parcel of land, and the mines and mineral deposits in or under the land together with appurtenant rights. By the legislation in issue in Newcrest, the land in question, except for minerals, was vested in the Director of National Parks and Wildlife, and operations for recovering minerals were forbidden. Both the Director and the Commonwealth thus acquired identifiable and measurable advantages. The Director acquired land freed from the rights of Newcrest to occupy it and conduct mining operations; the Commonwealth acquired the minerals freed from the rights of Newcrest to mine them. [152] The property which Newcrest had was held to be more than a statutory privilege under a licensing system. The statutes by which the 203 mining tenements were created carved those interests out of the radical title of the Commonwealth to the land. The mining tenements were a species of property in the land and in the minerals which, when the rights under the mining tenements came to an end, enlarged the Commonwealth’s radical title to the land. For the reasons given earlier, that is not the case here. [153] Although all subsurface water is now, and since 1966 has been, vested in the State, it is not right to describe the consequence of that vesting as giving the State ownership of, or property in, the groundwater. It is not right to do so because, as explained earlier, the difficulties and incongruities of treating water in the ground as a subject of property are insuperable. And in any event, the measure of control which the State has over the resource was unaltered by the cancellation of any particular entitlements to extract groundwater. The amount of water that the State could permit to be extracted was bounded only by the physical state and capacity of the aquifer, and such policy constraints as the State chose to apply. Neither the existence, nor the replacement or cancellation, of particular licences altered what was under the control of the State or could be made the subject of a licence to extract. If, as was hoped or expected, the amount of water in the aquifer would thereafter increase (or be reduced more slowly) the State would continue to control that resource. But any increase in the water in the ground would give the State no new, larger, or enhanced “interest in property, however slight or insubstantial” (The Tasmanian Dam Case (1983) 158 CLR 1 at 145 per Mason J; Tape Manufacturers (1993) 176 CLR 480 at 500 per Mason CJ, Brennan, Deane and Gaudron JJ), whether as a result of the cancellation of the plaintiffs’ bore licences or otherwise. [154] There has been no acquisition of property. [Heydon J dissented.]

JT International SA v Commonwealth [10.120] JT International SA v Commonwealth (2012) 250 CLR 1 at 18–73, 99–132 French CJ: 18 [1] The Tobacco Plain Packaging Act 2011 (Cth) (“the TPP Act”) imposes significant restrictions upon the colour, shape and finish of retail packaging for tobacco products. It prohibits the use of trade marks on such packaging, other than as permitted by the TPP Act, which allows the use of a brand, business or company name for the relevant tobacco product. Pre-existing regulatory requirements for health messages and graphic warnings remain in place and include, under a recent Information Standard, a requirement for the inclusion of the Quitline logo of the Victorian Anti-Cancer Council and a telephone number for the Quitline service. … 27 [28] JTI and BAT [British America Tobacco Group] contended that the TPP Act would effect an acquisition of their property on other than just terms contrary to the guarantee provided by s 51(xxxi) of the Constitution. The categories of property rights said to be affected appear from the pleadings. In the case of JTI, they are its registered trade marks and get-up. In the case of BAT, they are its registered and unregistered trade marks, copyright, get-up, licensing goodwill, design, patents, packaging rights, packaging goodwill and intellectual property licensing rights. … 31 … [37] The Commonwealth submitted that the property rights associated with the registered trade marks, design, patents and copyright asserted by JTI and BAT involve “a statutory assurance of 754

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JT International SA v Commonwealth cont. exclusive use, not a positive right or authority to use.” On that basis the imposition of restrictions on their use would take nothing away from the rights granted. Therefore, it was submitted, no property had been taken by the TPP Act. BAT stigmatised that argument as formalistic, observing that rights of exclusion are of the essence of all proprietary rights (Yanner v Eaton (1999) 201 CLR 351 at 365–366 [17]–[18] per Gleeson CJ, Gaudron, Kirby and Hayne JJ; [1999] HCA 53, citing Gray, “Property in Thin Air” (1991) 50 Cambridge Law Journal 252 at 299). 32 Plainly, not all property rights are defined only by rights of exclusion. In law the term “property” generally refers to “a legal relationship with a thing” (Yanner v Eaton (1999) 201 CLR 351 at 365–366 [17] per Gleeson CJ, Gaudron, Kirby and Hayne JJ) and in many cases is helpfully described as “a bundle of rights” (Telstra Corporation Ltd v Commonwealth (2008) 234 CLR 210; [2008] HCA 7 at 230–231 [44] (CLR). See also White v Director of Public Prosecutions (WA) (2011) 243 CLR 478 at 485 [10] per French CJ, Crennan and Bell JJ; [2011] HCA 20; Yanner v Eaton (1999) 201 CLR 351 at 365–366 [17] per Gleeson CJ, Gaudron, Kirby and Hayne JJ). However, BAT correctly submitted that rights to exclude others from using property have no substance if all use of the property is prohibited. … 33 … [40] … The rights associated with a particular get-up, which may also be viewed as a species of common law trade mark, are the rights to protect goodwill by passing off actions or the statutory cause of action for misleading or deceptive conduct where another has made unauthorised use of the get-up in a way which satisfies the relevant criteria for liability. The get-up rights asserted by JTI and BAT and the other non-statutory rights are, like their statutory equivalents, exclusive rights which are negative in character and support protective actions against the invasion of goodwill. … [42] Taking involves deprivation of property seen from the perspective of its owner. Acquisition involves receipt of something seen from the perspective of the acquirer (Georgiadis v Australian Overseas Telecommunications Corporation (1994) 179 CLR 297 at 304–305 per Mason CJ, Deane and Gaudron JJ, 315 per Dawson J, 320–321 per Toohey J; [1994] HCA 6). Acquisition is therefore not made out by mere extinguishment of rights. In an observation quoted and approved by the majority in Australian Tape Manufacturers 34 Association Ltd v Commonwealth ((1993) 176 CLR 480 at 499–500 per Mason CJ, Brennan, Deane and Gaudron JJ), Mason J said in the Tasmanian Dam Case (1983) 158 CLR 1; [1983] HCA 21 at 145 (CLR)): To bring the constitutional provision into play it is not enough that legislation adversely affects or terminates a pre-existing right that an owner enjoys in relation to his property; there must be an acquisition whereby the Commonwealth or another acquires an interest in property, however slight or insubstantial it may be. Importantly, the interest or benefit accruing to the Commonwealth or another person must be proprietary in character. On no view can it be said that the Commonwealth as a polity or by any authority or instrumentality, has acquired any benefit of a proprietary character by reason of the operation of the TPP Act on the plaintiffs’ property rights. In this respect I agree with the reasons of Gummow J (reasons of Gummow J at 48–52 [144]–[154]) and the reasons of Hayne and Bell JJ (reasons of Hayne and Bell JJ at 59–62 [180]–[189]). [43] It may also be observed that the negative character of the plaintiffs’ property rights leaves something of a logical gap between the restrictions on their enjoyment and the accrual of any benefit to the Commonwealth or any other person. Unlike the Newcrest Case ((1997) 190 CLR 513), there is no expansion in rights, interests, or benefits accruing to the Commonwealth that corresponds to or bears any relationship to the restrictions imposed on the use of the plaintiffs’ intellectual property rights. The fact that the restrictions and prohibitions imposed by the TPP Act create the “space” for the application of Commonwealth regulatory requirements as to the textual and graphical content of tobacco product packages does not constitute such an accrual. Rather, it reflects a serious judgment that the public purposes to be advanced and the public benefits to be derived from the regulatory scheme outweigh those public purposes and public benefits which underpin the statutory intellectual property rights and the common law rights enjoyed by the plaintiffs. The scheme does that without effecting an acquisition. … [44] … [The] imposition of those controls may be said to constitute a taking in the sense that the plaintiffs’ enjoyment of their intellectual property rights and related rights [10.120]

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JT International SA v Commonwealth cont. is restricted, the corresponding imposition of controls on the packaging and presentation of tobacco products does not involve the accrual of a benefit of a proprietary character to the 35 Commonwealth which would constitute an acquisition. … Gummow J: 48 [104] Such licences as those just mentioned [fishing licences and petroleum exploration licences] commonly are granted so as to lift a statutory prohibition imposed upon engagement in the activity in question and the grant is expressly made subject to the terms of the statutory regime as they stand from time to time. That is not the case with the various species of “intellectual property” within the description in s 51(xviii) of the Constitution, namely copyrights, patents of inventions and designs and trade marks. It is true that upon grounds specified in the relevant statutes patents and designs may be revoked and trade mark registrations may be expunged from the 49 register. But even at general law, an estate or interest in land or other property may be defeasible upon the operation of a condition subsequent in the grant, without losing its proprietary nature. [105] In the end, one cannot gainsay two statements by Windeyer J. The first, in Colbeam Palmer Ltd v Stock Affiliates Pty Ltd ((1968) 122 CLR 25; [1968] HCA 50 at 34 (CLR). See also Attorney General for NSW v Brewery Employes Union of NSW (“the Union Label Case”) (1908) 6 CLR 469 at 512–513 per Griffith CJ; [1908] HCA 94; Campomar Sociedad Limitada v Nike International Ltd (2000) 202 CLR 45 at 68 [48] per curiam), is that “although the proposition may involve one’s conception of the nature of property, it can hardly be said that a registered trade mark is not a species of property of the person whom the statute describes as its registered [owner], and which it permits him to assign” (emphasis added). The second, [1322] in Pacific Film Laboratories Pty Ltd v Federal Commissioner of Taxation (1970) 121 CLR 154; [1970] HCA 36 at 167 (CLR), 1323 is that the essential nature of copyright is “a negative right … a power to prevent the making of a physical thing by copying” rather than “a right in an existing physical thing”. Hence, copyright is “properly called an incorporeal right” ((1970) 121 CLR 154 at 169 per Windeyer J). Subsequently, in Australian Tape Manufacturers Association Ltd v Commonwealth (1993) 176 CLR 480 at 527, Dawson and Toohey JJ said there could be no doubt “that copyright constitutes property within the scope of s 51(xxxi)”. The same may be said of patents and registered designs. [106] It also should be accepted that at general law the goodwill attached to the business of the plaintiff by reason of the exploitation of trade marks and associated get-up answers the description of property. … 50 … [107] However, it should be borne in mind that all these items of “property” are, as Higgins J put it (Union Label Case (1908) 6 CLR 469 at 611), “artificial products of society”, not “physical objects” the boundaries of each class of which “are fixed by external nature”; more precisely, as Isaacs J emphasised with respect to trade marks, these are not affirmative rights like the property in goods and are not rights “in gross, or in the abstract” (Henry Clay & Bock & Co Ltd v Eddy (1915) 19 CLR 641; [1915] HCA 33 at 655 (CLR)). … 51 … [112] However, it has been apparent for some time that with respect to “taking” and “acquisition” some important distinctions are to be observed between the United States and Australian Constitutions. … 52 … [115] The effect of the United States decisions is to accept that the “taking” clause may be engaged without what the decisions in this Court would classify as an “acquisition”. However, the greater scope this gives to the Fifth Amendment has been tempered by a doctrine permitting “regulation” which does not amount to a “taking” (Trade Practices Commission v Tooth & Co Ltd (1979) 142 CLR 397 at 413–415 per Stephen J); “regulation” will amount to a “taking” if the regulatory actions in question are “functionally equivalent to the classic taking in which government directly appropriates private property or ousts the owner from his domain” (Lingle v Chevron USA Inc 544 US 528 at 539 (2005)) [116] Reference was made in several submissions to the characterisation of the Packaging Act as a law of “trade regulation” as determinative or at least indicative of the placement of the law outside the application of s 51(xxxi). However, to adopt this course would be to provide a false frame of reference. … 54 … [119] Whether the law in question sufficiently impairs the group of rights inhering in the property in question as to amount to an involuntary taking of that property, presents questions of substance and degree, rather than merely of form. … 59 … [138] The rights mentioned in respect of 756

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JT International SA v Commonwealth cont. registered trade marks are in substance, if not in form, denuded of their value and thus of their utility by the imposition of the regime under the Packaging Act. … [W]hilst the registration, like the weekly tenancy of Mr Dalziel, may remain, it is impaired in the manner just described. … 60 [139] The result is that while the trade marks remain on the face of the register, their value and utility for assignment and licensing is very substantially impaired. … [140] The situation is even more drastic as regards the BAT Copyrights, the BAT Patent and the BAT Design at stake in the BAT Matter. Use of the artistic works on retail packaging of tobacco products is denied by the operation of s 20(3) of the Packaging Act. Use of the BAT Design would conflict with s 18(1) of the Packaging Act and exploitation of the BAT Patent would conflict with reg 2.1.1(2) of the Packaging Regulations. [141] The circumstances just described are sufficient to render the operation of the Packaging Act a “taking” of these items of intellectual property. [142] The situation respecting goodwill associated with the get-up of the packaging of tobacco products requires further consideration. This is because, unlike the statutory species of intellectual property just described, the common law restricts the exploitation of goodwill by its assignment. … 61 [143] It is unnecessary to pursue further the question of whether the rights adhering to common law goodwill do not extend to rights of assignment or licensing and thereby deny subject matter for any deprivation by the Packaging Act sufficient to engage s 51(xxxi). This is because, in any event, there has been no acquisition of any interests of a proprietary nature by the Commonwealth or any other party by reason of the regime established by the Packaging Act. … [145] The objects of the Packaging Act stated in par (a) of s 3(1) include the improvement in public health by discouraging people from using 62 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 (s 3(2)). [146] Another object stated in s 3(1) 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 ([2005] Australian Treaty Series 7) (“the Convention”). [148] … [T]he 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, as the Northern Territory correctly emphasised in its submissions, 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 comparable to that interaction considered and rejected as insufficient in Bienke v Minister for Primary Industries and Energy (1996) 63 FCR 567 at 567–568. [149] 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 63 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 Commonwealth (1994) 179 CLR 155 at 185. Philip Morris then submitted that the Packaging 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. … [150] 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. … 64 … [155] In oral submissions the Commonwealth placed at the [10.120]

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JT International SA v Commonwealth cont. forefront of its arguments first that no “property” had been “taken” and, secondly, that in any event there had been no “acquisition” of “property”. The upshot is that the Commonwealth should succeed on the second of these grounds. [156] That makes it unnecessary to rule upon two further and related submissions by the Commonwealth. The first is that there is no contextual, structural or historical reason to treat every transfer of property as an acquisition to which s 51(xxxi) applies where the transfer is “incidental to regulation in the public interest.” The second proposition is that s 51(xxxi) has no operation where the acquisition of property without compensation “is no more than a necessary consequence or incident of a restriction on a commercial trading activity … reasonably necessary to prevent or reduce harm caused by that trading activity to members of the public or public health”. [157] These submissions bring to mind remarks by Brandeis J in his dissenting reasons in Pennsylvania Coal Company v Mahon (260 US 393 at 417 (1922)). See also as to this aspect of the “police power” what was said for the Court by Brennan J in Andrus v Allard 444 US 51 at 67–68 (1979) and the differing views expressed respectively by Stevens J (for the majority) and Rehnquist CJ (for the minority) in Keystone Bituminous Coal Association v DeBenedictis 480 US 470 at 485–493, 512–513 (1987)): 65 Every restriction upon the use of property imposed in the exercise of the police power 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. [158] It is sufficient for present purposes to say that propositions of the width of those put by the 1332 Commonwealth have not so far been endorsed by decisions of this Court and that whether such propositions should be accepted would require most careful consideration on an appropriate occasion. Hayne and Bell JJ: 69 [175] It may not be possible, and it is certainly not appropriate, to attempt to chart the boundaries of what is meant in s 51(xxxi) by “property”. It is important, however, to notice that it has long been recognised (Hohfeld, “Some Fundamental Legal Conceptions as Applied in Judicial Reasoning” (1913) 23 Yale Law Journal 16 at 21–22; see also Yanner v Eaton (1999) 201 CLR 351; [1999] HCA 53 at 365–366 [17]–[18], 388–389 [85]–[86] (CLR)) that “property” is used sometimes to indicate the tangible or intangible object to which legal rights or privileges relate, and sometimes to denote the legal interest, or aggregate of legal relations, pertaining to that object. The way in which the tobacco companies formulated their 70 arguments – by focusing upon what was said to be the “use” or “control” of retail packaging by the Commonwealth to convey its health messages – directs attention to whether the Commonwealth, by reason of the TPP Act, acquires any legal interest in or legal relation with the packaging that is an interest or relation the law would label as “property”. … [178] All the tobacco companies further submitted, however, that the benefit or advantage that the Commonwealth obtains from the tobacco companies’ compliance with the TPP Act falls within what this Court’s decisions recognise to be “property” for the purposes of s 51(xxxi). All these arguments sought to assert, in one way or another, that the TPP Act takes the tobacco companies’ intellectual property and gives the Commonwealth an “identifiable and measurable countervailing benefit or advantage”. The “benefit or advantage” was described in various ways: “use” or “control” of the (surface of) tobacco packaging; free advertising space; “control” over what appears on retail packaging and thus “control” over the “exploitation” of that packaging; the removal from packaging of what the Commonwealth wanted removed and its replacement by what the Commonwealth wanted put there. Though variously expressed, the different formulations had common ground. They identified the object in which the Commonwealth was said to have property as the physical packaging in which the tobacco companies sell their products, and each form of the submissions hinged on the notions of “the Commonwealth” obtaining the “use” of, or “control” over, that packaging. [179] These submissions must be considered against the fundamental principles explained earlier. Does the Commonwealth obtain a benefit or advantage that is proprietary in nature? … 758

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JT International SA v Commonwealth cont. 71 … [181] Though variously expressed, the tobacco companies submitted that the TPP Act gives the Commonwealth the use of, or control over, tobacco packaging because the Commonwealth or the TPP 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 TPP 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 TPP Act, effects no acquisition of property. [182] 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 TPP 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. [183] … Compliance with the TPP Act creates no proprietary interest. … 72 [185] … [I]t was not, and could not be, suggested that the TPP Act led to any enhancement to the property of the body politic of the kind that occurs, for example, when a right to mine minerals from land vested in the Commonwealth is extinguished (Newcrest Mining (WA) Ltd v Commonwealth (1997) 190 CLR 513. See also Commonwealth v WMC Resources Ltd (1998) 194 CLR 1). … [187] Whatever the sense in which the tobacco companies intended to use the term, “the Commonwealth” has no message which is conveyed by whatever appears on retail packaging that conforms to the requirements of the TPP Act. The packaging takes the form and bears the information required by the TPP Act. It is the legislation which requires that to be so. [188] The TPP 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 TPP Act is not proprietary. The Commonwealth acquires no property as a result of their compliance with the TPP Act. 73 Conclusion [189] The TPP Act is not a law by which the Commonwealth acquires any “interest in property, however slight or insubstantial it may be” (Commonwealth v Tasmania Case (1983) 158 CLR 1 at 145 per Mason J). The TPP Act is not a law with respect to the acquisition of property. It is therefore not necessary to consider the Commonwealth’s attempt to articulate a principle which would set legislation effecting an acquisition of property otherwise than on just terms beyond the reach of s 51(xxxi) on the ground that the legislation is a reasonable regulation of some activity for the greater good of society. The arguments advanced by the tobacco companies are answered by the logically anterior conclusion that the TPP Act effects no acquisition of property. [190] One further point should be made. It is unsurprising that much of the argument in the present cases, as in other recent cases about s 51(xxxi), proceeded by taking statements made in earlier decisions and fusing them into a proposition from which it was said to follow that there was or was not an acquisition of property without just terms. It must be emphasised, however, that it would be wrong to take what has been said in earlier decisions, or in these reasons, and divorce the statement from the context in which it appears. Above all, it must be recognised that it is the constitutional text and the cardinal principles that emerge from that text to which attention must always be given. [10.120]

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JT International SA v Commonwealth cont. [191] In the present cases, the tobacco companies argued that the Commonwealth acquired the use of, or control over, the retail packaging in which tobacco will be sold to convey health messages. Framing the argument in that way necessarily drew attention to an understanding of property that places in the foreground the identification of the interest in the tangible or intangible object in question and the legal relation which should be described as “property” between that object and the person alleged to have acquired “property”. Other cases, perhaps many other cases, may require the same kind of analysis. But there may be cases in which an analysis of that kind will not be helpful. It is the constitutional text and the fundamental principles based on that text which must guide consideration of the issue. Crennan J: 99 [277] Whether subsequent legislative prohibitions or restrictions on the use of incorporeal property created by statute will amount to an acquisition of property for the purposes of s 51(xxxi) must depend on the nature of the rights attaching to the incorporeal property, and whether, for the purposes of the Commonwealth, the prohibitions or restrictions: (a) give, or effectively give, the Commonwealth or another a right to use the incorporeal property wholly or partly to the exclusion of the owner; or (b) bestow some other identifiable benefit or advantage upon the Commonwealth or another which can be characterised as proprietary. … 101 … [284] Some considerations of trade mark law and observations about the nature of composite trade marks support the Commonwealth’s submissions and show that the plaintiffs’ characterisation of the effect of the Packaging Act on their pre-existing rights was overstated. … 103 … [288] It is important to note that in every composite trade mark claimed by the plaintiffs, an essential feature for the purposes of distinguishing goods from those of competitors appeared to be a brand name. … 104 … [291] Although the plaintiffs wished to emphasise that the Packaging Act prohibits them from using their registered trade marks, as registered, on retail packaging, it was not suggested by the plaintiffs that their tobacco products were ordered by consumers in the retail trade without reference to their brand names; it was not suggested that relevant goodwill was not significantly attached to their brand names; and it was not suggested that the brand names in the composite marks, as registered, would be insignificant in any opposition or infringement proceedings under the Trade Marks Act or in any action for passing off. … 106 … [297] The plaintiffs invoked the accepted principle that there does not need to be a precise correspondence between what has been taken or diminished and any benefit or advantage obtained by the Commonwealth or another (Georgiadis (1994) 179 CLR 297 at 305 per Mason CJ, Deane and Gaudron JJ; Newcrest (1997) 190 CLR 513 at 634 per Gummow J). It was contended that by “controlling” the plaintiffs’ use of their intellectual property, especially their trade marks, and product get-up, through the operation of the provisions of the Packaging Act, the Commonwealth freed up the space on retail packaging previously available for the application of the plaintiffs’ trade marks and associated get-up, and regulated what was to be placed in that space. This was described as an indirect acquisition of the right of the plaintiffs as owners of their property not to use that property or, alternatively, as an appropriation of the plaintiffs’ “right” to control what material was placed on their chattels. … 107 … [300] It is in the context of the conception of property as a bundle of rights that an owner’s rights “not to use” his property, or to extinguish his own legal interests, have been identified. (Hohfeld, “Some Fundamental Legal Conceptions as Applied in Judicial Reasoning” (1913) 23 Yale Law Journal 16 at 22, 23 and 45.) Useful as this idea is in many contexts (See, for example, Yanner v Eaton (1999) 201 CLR 351), it is an awkward and incongruous notion to apply to a registered owner’s rights to a trade mark, or an owner’s interest in product get-up. The Trade Marks Act requires an applicant for registration to use or intend to use or to have authorised or intend to authorise another to use a trade mark (Trade Marks Act, s 27), the concept of use being integral to the definition of a trade mark (Trade Marks Act, s 17). An exclusive right given by registration is the right “to use the trade mark” (Trade Marks Act, s 20(1)) already explained above. Unlike rights granted under other intellectual property legislation for a limited term (Copyright Act, ss 33, 34, 93 – 96, 180, 181, 195AM, 195ANA, 233 and 234; Designs Act Act, ss 46 and 47; Patents Act, ss 67 and 68), a registration of a trade mark is not limited in time; however, the registration is vulnerable to removal for non-use (Trade Marks Act, Pt 9 (ss 92 – 105)). Similarly, an action at common law in respect of product get-up is available to the extent that the get-up has generated goodwill as a result of use. For those reasons, the argument that the provisions of the Packaging Act effected an 760

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JT International SA v Commonwealth cont. indirect acquisition by the Commonwealth of the plaintiffs’ right and entitlement not to use 108 their property must be rejected. … [301] The further submission that the plaintiffs have a right to place whatever they wish on their chattels, and that this right has been appropriated by the Commonwealth, must also be rejected. The plaintiffs’ ability to place material on their packaging is and has for a long period been limited by law (see, for example, the Commerce (Trade Descriptions) Act 1905 (Cth)). … Any decision of the plaintiffs to continue to sell tobacco products in retail packaging which complies with more stringent product and information standards, directed to providing more prominent information about tobacco goods, does not involve any diminution in or extinguishment of any property. [302] … [T]he plaintiffs contended that the Packaging Act’s restrictions on the appearance of retail packaging for the purposes of achieving its objects (as set out in (Cth)s 3), coupled with stricter requirements in relation to placing product information on the packaging, resulted in a benefit or advantage to the Commonwealth (and to a lesser extent to the owner of Quitline services or the Quitline trade mark) sufficient to trigger the requirement of just terms. The benefit was said to have been acquired “without any obligation to pay”. To the extent that the greater prominence given to health warnings might not easily or readily be characterised as a benefit or advantage that was proprietary in nature, it was contended that, if a property right is extinguished and some identifiable benefit or advantage which is 109 “relating to the ownership or use of property” is obtained (Mutual Pools (1994) 179 CLR 155 at 185 per Deane and Gaudron JJ. See also ICM Agriculture Pty Ltd v Commonwealth (2009) 240 CLR 140 at 179–180 [82] per French CJ, Gummow and Crennan JJ), there is no requirement that what is acquired should itself be proprietary in nature. … 110 … [305] … Read in context, neither statement [from the two authorities] represents any retreat from settled doctrine that an acquisition for the purposes of s 51(xxxi) requires that either the Commonwealth or another must acquire, for the purposes of the Commonwealth, “an interest in property, however slight or insubstantial it may be” (Commonwealth v Tasmania Case (1983) 158 CLR 1 at 145 per Mason J). The plaintiffs’ submissions on this branch of their argument must also be rejected. [306] For the reasons set out above, the Packaging Act restrictions, which effectively prohibit the plaintiffs from using their property for advertising or promotional purposes, while severe from a commercial viewpoint, do not operate so as to effect an acquisition of any proprietary right or interest by the Commonwealth, or by the owner of the Quitline services or trade mark. [307] The Commonwealth made further submissions influenced by authorities concerning the Fifth Amendment to the Constitution of the United States. Those submissions were based on the proposition that an acquisition of property without compensation is outside the scope of s 51(xxxi) if that acquisition is no more than a necessary consequence or incident of a restriction on a commercial trading activity, where that restriction is reasonably necessary to prevent or reduce harm caused by that trading to members of the public or public health (This statement of principle was said to accord with decisions of the Supreme Court of the United States in Mugler v Kansas 123 US 623 at 668 (1887); Pennsylvania Coal Co v Mahon 260 US 393 at 413, 417, 422 (1922); Kimball Laundry Co v United States 338 US 1 at 5 (1949); Goldblatt v Hempstead 369 US 590 at 592–593 (1961); Andrus v Allard 444 US 51 at 65–66 (1979); and Keystone Bituminous Coal Association v DeBenedictis 480 US 470 at 488–489, 491–492 (1986)). The conclusion reached above renders it unnecessary to further consider those submissions. Kiefel J: 113 [316] Many kinds of products have been subjected to regulation in order to prevent or reduce the likelihood of harm. … 114 [317] It may be thought that the pursuit of a purpose such as the prevention of harm or the protection of health is inherently unlikely to involve an acquisition of property, but objects should not be confused with the methods employed to attain them. A question that arises in cases concerning s 51(xxxi) which involve regulatory restrictions having severe effects is whether something more than the attainment of statutory objects results to the Commonwealth or another person as a result of the restrictions imposed. … 121 … [334] The Commonwealth identifies a constitutional principle … that it is an acceptable 122 justification for a law, such as will place it outside s 51(xxxi) and the requirement of just terms, that the acquisition of property is no more than a consequence or incident of a restriction on a commercial trading activity, where that restriction is [10.120]

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JT International SA v Commonwealth cont. reasonably necessary to prevent or reduce the harm that activity causes to public health. … 123 … [342] … [T]he Commonwealth’s argument appears to rely simply upon the nature of the purpose pursued by the Packaging Act – the protection of public health – as justifying an infringement of s 51(xxxi) or setting the Packaging Act apart from it. This is borne out in part by the Commonwealth’s reliance upon authority on the “takings clause” of the Fifth Amendment to the United States Constitution, which holds that a prohibition on the use of property which is declared by legislation to be injurious to the health, morals or safety of the 124 community cannot be deemed a taking. (Mugler v Kansas 123 US 623 at 668–669 (1887); Pennsylvania Coal Co v Mahon 260 US 393 at 417 (1922).) A more recent approach has been to examine the purposes and the magnitude or character of the burden imposed upon property rights (Palazzolo v Rhode Island 533 US 606 at 633–634 (2001); Lingle v Chevron USA Inc 544 US 528 at 542 (2005)) … [344] What the Commonwealth’s argument may really come down to is a proposition that some legislative purposes might justify infringement of, or the treatment of a law as standing apart from and not subject to the requirements of, s 51(xxxi). This is a large proposition, but one that it is not necessary to consider further. The fundamental question which arises from the Commonwealth’s argument is whether the Packaging Act is to be characterised as one for the acquisition of property. Logically, the first question to be considered in that regard is whether it would have the effect of acquiring property. The answer to that question is determinative of these proceedings. … 127 … [352] As will be observed, the focus of the plaintiffs’ arguments concerning acquisition shifted away from the property which they had identified in their pleadings as having been acquired. At the final point of their submissions, the property said to have been acquired was of quite a different nature. … 128 … [356] The plaintiffs’ arguments as to the effects upon the use of their property or the conduct of their businesses do not identify what is said to accrue to the Commonwealth or another. It may be accepted that some or much of the value of their intellectual property has been lost in Australia. A trade mark that cannot lawfully be used in connection with the goods to which it is relevant is unlikely to be readily assignable. The restriction on the use of the marks is likely to have effects upon the custom drawn to their businesses and upon their profits. [357] However, the mere restriction on a right of property or even its extinction does not necessarily mean that a proprietary right has been acquired by another (British Medical Association v Commonwealth (1949) 79 CLR 201; [1949] HCA 44 at 270–271 (CLR); The Tasmanian Dam (1983) 158 CLR 1 at 145, 181, 247, 283; R v Ludeke; Ex parte Australian Building Construction Employees’ and Builders Labourers’ Federation (1985) 159 CLR 636; [1985] HCA 84 at 653 (CLR); Australian Tape Manufacturers Association Ltd v Commonwealth (1993) 176 CLR 480 at 528; Mutual Pools & Staff Pty Ltd v Commonwealth (1994) 179 CLR 155 at 194). The loss of trade or business does not spell acquisition. Although the protection afforded by s 51(xxxi) to the owner of property is wide, it is a protection directed to proprietary interests and not to the commercial position of traders (British Medical Association v Commonwealth (1949) 79 CLR 201 at 270). [358] The plaintiffs relied upon the decision in Minister of State for the Dalziel. There, the Commonwealth … took all the rights of an owner in possession. This is not comparable with the position of the Commonwealth in this case. [359] In the course of oral argument the plaintiffs shifted focus, to what was termed the appropriation by the Commonwealth of the space 129 created on the packaging by the prohibitions and restrictions of the Packaging Act. Accepting that the prohibition of the use of property may not be sufficient to effect an acquisition, the BAT plaintiffs contended that the Commonwealth had gone further and taken control of the space itself. This assumption of control was said to be an indirect means of acquisition of the kind referred to by Dixon J in “the Bank Nationalisation Case” (1948) 76 CLR 1 at 349. The control effected, combined with a denial of the plaintiffs’ use, was said to result in a benefit to the Commonwealth. [362] … 130 … But the Bank Nationalisation Case cannot be compared with the operation and effect of the Packaging Act. The control it effects is in the form of prohibitions and restrictions on the use of marks and other distinctive features of packaging. It is not control effected with the clear purpose of, and only one step removed from, completing an acquisition of all the incidents of ownership. The Commonwealth obtains no such rights. 762

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JT International SA v Commonwealth cont. [363] A closer analogy to the level of restriction placed upon the plaintiffs’ use of the trade marks and other property is with restrictions which may be placed upon land for the purposes of town planning and other public purposes. Such restrictions, or even prohibitions, would not usually be said to result in an acquisition of land by a local authority. Even the sterilisation of land by regulation has not been said to have this effect (The Tasmanian Dam Case (1983) 158 CLR 1 at 145–146 per Mason J, 181 per Murphy J; see also at 247–248 per Brennan J). … 131 … [367] It is not necessary that a benefit or advantage, in the nature of property, which is received by or accrues to the Commonwealth or any other person correspond with what has been lost by the person claiming that there has been an acquisition otherwise than on just terms. Newcrest Mining (WA) Ltd v Commonwealth (1997) 190 CLR 513 furnishes an example. There the mining company held interests in mining leases over land in the Northern Territory. The Commonwealth legislation in question prohibited the carrying on of operations for the recovery of minerals in Kakadu National Park, which came to cover the area of the mining leases. The advantages which accrued to the Commonwealth were the minerals freed from the rights of Newcrest to mine them, and the advantages which accrued to the Director of National Parks and Wildlife were the acquisition of the land freed from the rights of Newcrest to occupy it and conduct mining operations thereon (Newcrest Mining (WA) Ltd v Commonwealth (1997) 190 CLR 513 at 634). [368] In the case at hand, the benefit or advantage ultimately identified by the plaintiffs was the Commonwealth’s ability to pursue and perhaps achieve the objectives of the Packaging Act, which were set out at the commencement of these reasons. 132 [369] The control that the Commonwealth achieved over the space on the packaging, to which the plaintiffs referred, did not accrue to it a benefit or advantage other than the pursuit of its statutory objectives. The BAT plaintiffs’ argument that the Commonwealth was saved the cost of acquiring the space for its own advertising takes the matter no further. It would not have had to pay for such advertising in any event, given that it could require warnings of any size to be displayed on the packaging. [370] It was also said that the Quitline service might be said to benefit from the provisions of the Packaging Act and the Packaging Regulations. It does not seem possible to identify a relevant benefit or advantage of a proprietary kind that has accrued to that service. Any increased promotion of the service, in part through the use of the Quitline marks, might result in its greater use, but this takes the argument no further than the possible attainment of the objects of the Packaging Act – to improve the health of present consumers of tobacco products by encouraging them to stop using these products. [Heydon J dissented.]

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Notes&Questions

The nature of s 51(xxxi) as a conferral of the power to acquire subject to a requirement of just terms distinguishes it from the Fifth Amendment to the United States Constitution, which provides: “nor shall private property be taken for public use, without just compensation”. The High Court in Commonwealth v Huon Transport (1945) 70 CLR 293 at 327 said that “the American Fifth Amendment is not a power but a restriction upon the power of eminent domain inherent in the United States”. As was noted by some members of the High Court in JT International SA v Commonwealth (2012) 86 ALJR 1297; [2012] HCA 43, the character of the Fifth Amendment as a restriction upon takings has led United States’ courts to directly tackle the question of whether certain sorts of interference with property rights should not be categorised as “takings”, because of the public benefit of the regulatory purpose being pursued. The Commonwealth argued in that case for a similar approach to the interpretation of s 51(xxxi), but the majority of the High Court instead decided the case [10.130]

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on the basis that while the Commonwealth law did interfere with property rights, it did not result in any acquisition of property, and hence no requirement to provide compensation arose. Is this approach a sound basis on which to determine the validity of regulatory action that has the effect of impairing or extinguishing property rights? 2.

Hayne and Bell JJ, at [185], stated that “it was not, and could not be, suggested that the TPP Act led to any enhancement to the property of the body politic of the kind that occurs, for example, when a right to mine minerals from land vested in the Commonwealth is extinguished,” and Gummow J agreed with them, observing at [150] that “[c]ompliance with the federal law does not create a relationship between ‘the Commonwealth’ and the packaging which is proprietary in nature.” Is the distinction these judges draw between, on the one hand, compliance with federal law in relation to the use of property and, on the other hand, a federal law which would have the effect of conferring proprietary rights upon the Commonwealth as a body politic, an appropriate way to judge the validity of this sort of regulatory endeavour?

3.

Is the difference in the outcomes between Newcrest Mining (WA) Ltd v Commonwealth (1997) 190 CLR 513 and ICM Agriculture Pty Ltd v Commonwealth (2009) 240 CLR 140 explicable solely by reference to the different proprietary characteristics of minerals and groundwater? Would this be a sound basis on which to determine whether or not the regulation of natural resource extraction entitles those who suffer the burden of regulation to compensation?

4.

There are a number of sorts of law which it is accepted may bring about acquisitions of property without just terms being required. In Australian Tape Manufacturers Association Ltd v Commonwealth (1993) 176 CLR 480 (at 510), Mason CJ, Brennan, Deane and Gaudron JJ said: In a case where an obligation to make a payment is imposed as genuine taxation, as a penalty for proscribed conduct, as compensation for a wrong done or damages for an injury inflicted, or as a genuine adjustment of the competing rights, claims or obligations of persons in a particular relationship or area of activity [such as a bankrupt and his or her creditors], it is unlikely that there will be any question of an “acquisition of property” within s 51(xxxi) of the Constitution. On the other hand, the mere fact that what is imposed is an obligation to make a payment or to hand over property will not suffice to avoid s 51(xxxi)’s guarantee of “just terms” if the direct expropriation of the money or other property itself would have been within the terms of the sub-section.

The following extracts further illustrate this point.

Mutual Pools and Staff v Commonwealth [10.140] Mutual Pools and Staff Pty Ltd v Commonwealth (1994) 179 CLR 155 at 172–221 [The case involved a challenge to the validity of the Swimming Pools Tax Refund Act 1992 (Cth) (“Refund Act”) which was enacted following a decision of the High Court in Mutual Pools and Staff Pty Ltd v Federal Commissioner of Taxation (1992) 173 CLR 450 that legislation which sought to impose a tax upon the sale value of swimming pools constructed in situ was in breach of s 55 of the Commonwealth Constitution. The Swimming Pool and Spa Association of Australia Ltd had made an agreement with the Commissioner of Taxation whereby its members agreed to pay the tax on the understanding that if the legislation were subsequently invalidated, all amounts paid would be refunded with interest. The Refund Act required the tax to be refunded to a pool builder only to the extent that the tax was not passed on to the purchaser or to the extent that the pool builder had refunded the tax to the purchaser. If the tax was passed on to the purchaser and it was not refunded 764

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Mutual Pools and Staff v Commonwealth cont. by the builder, the Commonwealth was required to refund the tax directly to the purchaser. The plaintiff, a builder of swimming pools in situ and a member of the Association, challenged the Refund Act.] The meaning of the expression “acquisition of property” Mason CJ: 172 In conformity with the liberal interpretation which is given to a legislative power subject to a safeguard such as “just terms” (Bank Nationalisation Case (1948) 76 CLR at 349), the word “property” has a broad meaning (see Commonwealth v New South Wales (1923) 33 CLR 1 at 20–21; Dalziel (1944) 68 CLR at 285, 290; Bank Nationalisation Case (1948) 76 CLR at 349; the Tasmanian Dam Case (1983) 158 CLR 1 at 145, 246–247, 282–283; Australian Tape Manufacturers (1993) 176 CLR at 509). Thus, a contractual right, amounting to a chose in action, is “property” for the purposes of s 51(xxxi) (Dalziel (1944) 68 CLR at 290; Norman v Federal Commissioner of Taxation (1963) 109 CLR 9 at 26; Australian Tape Manufacturers (1993) 176 CLR at 509), as are “innominate and anomalous interests” (Bank Nationalisation Case (1948) 76 CLR at 349). And a legislative imposition of an obligation to pay money, depending upon the contract, may amount to an “acquisition of property” (Tape Manufacturers (1993) 176 CLR at 509–510). On the other hand, the mere extinguishment by the Commonwealth of a right enjoyed by an owner in relation to his or her property does not amount to an acquisition of property (Tasmanian Dam Case (1983) 158 CLR at 145); 173 in the absence of an acquisition of a benefit or an interest in property, however slight or insubstantial it may be, the complete extinguishment of contractual rights does not constitute such an acquisition (R v Ludeke; Ex parte Australian Building Construction Employees’ and Builders Labourers’ Federation (1985) 159 CLR 636 at 653). Although the distinction between extinguishment and acquisition of rights is clearly recognized in the law of property, it may be that in some circumstances the extinguishment of a chose in action against the Commonwealth would amount to an acquisition of property. The extinguishment of such a cause of action could have the same effect as an assignment of the chose in action to the Commonwealth. … There is some authority to suggest that the Commonwealth may legislate to extinguish a cause of action against it without contravening s 51(xxxi). In Werrin, Dixon J said (1938) 59 CLR at 165): There is, I think, no constitutional provision preventing the Parliament from extinguishing a cause of action against the Commonwealth, unless implications be discovered in s 75 which do so. Although Dixon J did not specifically mention s 51(xxxi), clearly his Honour did not consider that provision to be an impediment to the extinguishment of a cause of action against the Commonwealth, at least in the circumstances of that case. … 174 … In Perpetual Executors & Trustees Association of Australia Ltd v Federal Commissioner of Taxation ((1948) 77 CLR 1) the Commonwealth, by certain bonds that it had issued, had promised that it would pay interest on the bonds without deduction for any taxes. In Magrath v Commonwealth ((1944) 69 CLR 156, per Rich, McTiernan and Williams JJ) a majority of the Court had decided that this promise amounted to a term of the contract between the Commonwealth and the bondholder that interest would not form part of the assessable income of the taxpayer. Subsequent to the issue of the bonds to the bondholder … the Income Tax Assessment Act 1936 (Cth) levied income tax upon such interest. The Court held by majority that the interest was taxable under the statute and that the assessment and collection of the tax was not a breach of contract. Dixon J stated that ((1948) 77 CLR at 28) “the change in the law could not amount to a breach of contract for which the Commonwealth would be liable in damages or otherwise. A statute destroys all contracts which stand in the way of its operation.” … In Magrath, Rich J observed that “[t]he Commonwealth, by its legislature, can, without any breach of the law, repudiate promises given by its Executive Government” ((1944) 69 CLR 156 at 170). In neither case did the Court consider s 51(xxxi) to be a possible bar to the validity of the imposition of the tax. … [B]oth Magrath and Perpetual Executors, as well as Werrin, are consistent with the general proposition that a law with 175 respect to taxation which regulates competing claims and interests is not a law for the acquisition of property. And here there is no additional element in the Refund Act which would enable the Court to say that, though it is a law with respect to taxation, it is also a law for the acquisition of property. [10.140]

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Mutual Pools and Staff v Commonwealth cont. Brennan J: 180 It would be erroneous to elevate the constitutional guarantee of just terms to a level which would so fetter other legislative powers as to reduce the capacity of the Parliament to exercise them effectively. … In my view, a law may contain a valid provision for the acquisition of property without just terms where such an acquisition is a 181 necessary or characteristic feature of the means which the law selects to achieve its objective and the means selected are appropriate and adapted to achieving an objective within power, not being solely or chiefly the acquisition of property. But where the sole or dominant character of a provision is that of a law for the acquisition of property, it must be supported by s 51(xxxi) and its validity is then dependent on the provision of just terms. Deane and Gaudron JJ: 188 The requirement of “just terms” is directed to laws with respect to the acquisition of property from any State or person for any purpose in respect of which the Parliament has power to make laws. The settled method for determining whether a particular law is or is not of the kind referred to in one or other of the grants of legislative power contained in s 51 is that of characterization. That being so, the indirect operation of par (xxxi) does not extend beyond abstracting from other grants of legislative power authority to make laws which can properly be characterized as laws with respect to the acquisition of property for a purpose in respect of which the Parliament has power to make laws. That does not, of course, mean that a law will be outside the reach of par (xxxi) unless that is its sole or dominant character. For the purposes of s 51, a law can have a number of characters and be, at the one time, a law with respect to the subject matter of a number of different grants of legislative power. However, unless a law can be fairly characterized, for the purposes of par (xxxi), as a law with respect to the acquisition of property, that paragraph cannot indirectly operate to exclude its enactment from the prima facie scope of another grant of legislative power. … 189 … The importance of the limitations on the operation of s 51(xxxi) is magnified by the fact that the cases establish that the paragraph’s implied guarantee is not confined to acquisitions of property by the Commonwealth and its agents. It extends to acquisitions “by any other person” (PJ Magennis Pty Ltd v Commonwealth (1949) 80 CLR 382 at 401–402, 411, 422–423, 429–430; and see, generally, Jenkins v Commonwealth (1947) 74 CLR 400 at 406; McClintock v Commonwealth (1947) 75 CLR 1 at 23, 36; Trade Practices Commission v Tooth & Co Ltd (1979) 142 CLR 397 at 407–408, 427, 451–452; Clunies-Ross v Commonwealth (1984) 155 CLR at 202; Australian Tape Manufacturers Association Ltd v Commonwealth (1993) 176 CLR at 510–511, 526). Obviously, many general laws which regulate the rights and conduct of individuals may, for any number of legitimate legislative purposes, effect or authorize an “acquisition of property” within the wide meaning of those words as used in s 51(xxxi). If every such law which incidentally altered, modified or extinguished proprietary rights or interests in a way which constituted such an “acquisition of property” were invalid unless it provided a quid pro quo of just terms, the legislative powers of the Commonwealth would be reduced to an extent which could not have been intended by those who framed and adopted the Australian Constitution. … While there is no set test or formula for determining whether a particular law can or cannot properly be characterized for the purposes of s 51(xxxi) as a law with respect to the acquisition of property for a purpose in respect of which the Parliament has power to make laws, it is possible to identify in general terms some categories of laws which are unlikely to bear the character of a law with respect to the acquisition of property notwithstanding the fact that an acquisition of property may be an incident of their operation or application. One such category consists of laws which provide for the creation, modification, extinguishment or transfer of rights and liabilities as an incident of, or a means for enforcing, some general regulation of the conduct, rights and obligations of citizens in 190 relationships or areas which need to be regulated in the common interest. Another category consists of laws defining and altering rights and liabilities under a government scheme involving the expenditure of government funds to provide social security benefits or for other public purposes. … [I]f such a law is of general operation, it is unlikely that it will be susceptible of being properly characterized, for the purposes of s 51 of the Constitution, as a law with respect to the acquisition of property for a purpose in respect of which the Parliament has power to make laws. The reason why that is so is that, even though an “acquisition of property” may be an incident or a consequence of the operation of such a law, it is unlikely that it will constitute an element or aspect which is capable of imparting to it the character of a law with respect to the subject matter of s 51(xxxi). … 766

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Mutual Pools and Staff v Commonwealth cont. Dawson and Toohey JJ: 194 The distinction between extinguishing rights in property and acquiring them is one that must be maintained in the application of s 51(xxxi) (R v Ludeke; Ex parte Australian Building Construction Employees’ and Builders Labourers’ Federation (1985) 159 CLR at 653). … 195 … In this case however, the property right – the right to receive money – is not acquired by the Commonwealth.… [W]hen a chose in action is extinguished, the debtor receives merely a financial advantage, not a proprietary interest in the chose in action. … Not every benefit which flows to another when a right is extinguished amounts to the acquisition of property by that other. … The distinction between the transfer of value and the acquisition of property is well established (see Ilich v The Queen (1987) 162 CLR 110 at 128–129) … 197 … Taxation must lie outside the ambit of s 51(xxxi). If the imposition of a tax were an acquisition of property requiring just 198 terms, it would defeat the very purpose of the taxation power (s 51(ii)) … 199 … The restriction of s 51(xxxi) to laws with respect to the acquisition of property for any purpose in respect of which the Parliament has power to make laws explains why the confiscation or forfeiture of property, as in the case of prohibited imports, is not an acquisition of property, at all events within the meaning of s 51(xxxi), even though it involves the passing of property. Merely as a matter of nomenclature, forfeiture or confiscation is something different from acquisition. In addition, as Dixon CJ said in Burton v Honan ((1952) 86 CLR 169 at 180–181) in relation to a forfeiture: 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[200]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) than has the imposition of taxation itself. Although the property in forfeited goods passes to the Commonwealth, it does not acquire the goods for any purpose for which the Parliament has power to make laws. The goods are not acquired with the object of putting them to any use or application falling within a head of legislative power … The purpose of the acquisition is complete at the moment of acquisition. McHugh J: 219 When the taking of property is an inevitable consequence of the exercise of a power conferred by s 51 (see the Tasmanian Dam Case (1983) 158 CLR 1 at 282, per Deane J) or is a reasonably proportional consequence of a breach of a law passed under one of those powers, no acquisition of property within the meaning of s 51(xxxi) takes place. Although s 51(xxxi) abstracts the power of acquisition from other legislative powers in s 51, it cannot be interpreted so broadly as to render meaningless the legitimate use and operation of other powers conferred by s 51. The compound conception (Grace Bros Pty Ltd v Commonwealth (1946) 72 CLR 269 at 290, per Dixon J) of an “acquisition of property on just terms” predicates a compulsory transfer of property from a State or person in circumstances which require that the acquirer should pay fair compensation to the transferor. When, by a law of the Parliament, the Commonwealth or someone on its behalf compulsorily acquires 220 property in circumstances which make the notion of fair compensation to the transferor irrelevant or incongruous, s 51(xxxi) has no operation. Thus, property taken from the citizen by taxation is in substance an acquisition of property but it is not an acquisition of property for the purposes of s 51(xxxi). It has often been suggested, however, that taxation is outside the operation of s 51(xxxi) because taxation consists of no more than the creation and discharge of a debt to the Commonwealth. … However, the purpose behind s 51(xxxi) would be but a pious aspiration if the terms of that paragraph could be avoided by the device of raising a debt and then requiring the citizen to pay it or have his or her property sequestrated. Furthermore, the creation of debt theory does not explain the provisional tax cases. The Court has held that the system of provisional taxation does not constitute an acquisition of property for the purpose of s 51(xxxi) notwithstanding that, at the time of payment of provisional taxation, no debt has been incurred by the taxpayer (Federal Commissioner of Taxation v Clyne (1958) 100 CLR 246 at 263, 270; and see Moore v Commonwealth (1951) 82 CLR 547). In Federal Commissioner of Taxation v Clyne ((1958) 100 CLR 246 at 263), Dixon CJ said that once it was held that the system of provisional taxation was authorized by s 51(ii) “it seems absurd to say [10.140]

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Mutual Pools and Staff v Commonwealth cont. 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 the Parliament has power to make laws”. His Honour pointed out that the very purpose of the power conferred by s 51(ii) is to enable the Commonwealth to raise moneys for public purposes. … Similarly, when a statute provides for the forfeiture of property obtained in breach of Commonwealth law even when the property has passed into the hands of a bona fide purchaser for value, the case is outside s 51(xxxi). The notion that the Commonwealth should pay fair compensation to the owner of the property in such a situation is simply absurd. In Burton v Honan ((1952) 86 CLR 169), the Court upheld the validity of provisions of the Customs Act 1901 (Cth) which provided, inter alia, for the forfeiture of goods obtained as the result of breaches of the Customs (Import Licensing) Regulations. Dixon CJ said (at 180–181): [T]he 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 the 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) than has the imposition of taxation itself, or the forfeiture of goods in the hands of the actual offender. … [I]f the purpose of a law passed under s 51 is to impose sanctions for breach of a law passed under that section or to use the property of alien enemies to satisfy war reparations or to facilitate the collection of taxes, that law is not within the scope of s 51(xxxi) even though it incidentally 222 or even directly results in the Commonwealth acquiring the property of a State or person. Such a law is not a law for the acquisition of property for a purpose “in respect of which the Parliament has power to make laws” but an exercise of the power itself. … The notion of paying compensation for the property acquired [would be] incompatible with the purpose for which the law was enacted and the power exercised. … [W]here the particular implementation of a valid exercise of s 51 power necessarily involves an acquisition of property or is a reasonably proportional sanction for a breach of a s 51 law, the acquisition is outside the scope of s 51(xxxi).

Attorney-General (NT) v Emmerson [10.150] Attorney-General (NT) v Emmerson (2014) 253 CLR 393 at 416–453 [This case concerned the validity, under the Northern Territory (Self-Government) Act 1978 (Cth), of s 36A of the Misuse of Drugs Act (NT) (“the Misuse Act”) and ss 44 and 94 of the Criminal Property Forfeiture Act (NT) (“the Forfeiture Act”). Section 44 of the Forfeiture Act permits the Director of Public Prosecutions for the Northern Territory (“DPP”) to seek a “restraining order” over any property of a person charged with any of a variety of offences. Section 36A of the Misuse Act permits the DPP to seek a declaration that a person who has been found guilty of such an offence, who has also been found guilty of such an offence on two prior occasions within 10 years, is a “drug trafficker”. Under s 94 of the Forfeiture Act, the making of such a declaration results in any property of the declared drug trafficker that is subject to a restraining order being forfeited to the Northern Territory. A majority of the High Court found that the operation of this statutory regime did not amount to an acquisition of property otherwise than on just terms, and hence did not exceed the limitation stated in s 50(1).] French CJ, Hayne, Crennan, Kiefel, Bell And Keane JJ: 416 [16] Forfeiture or confiscation of property, in connection with the commission of serious crime, has a long history in English law. … 418 … [19] Modern civil forfeiture laws for confiscating the proceeds of, or profits from, crime go beyond the condemnation of goods used in, or derived from, crime. Many are designed expressly to render a person’s pursuit of certain crimes unprofitable in the economic sense. No single precept drawn from historical examples of forfeiture could be said to inform modern civil forfeiture laws. What the 768

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Attorney-General (NT) v Emmerson cont. historical examples show, however, is that overlapping rationales underpinning forfeiture as a criminal or civil sanction, which include both strong deterrence and the protection of society, are not especially novel. … [20] … [T]he rationale for employing forfeiture as a punishment may go beyond the common aims of deterrence and retribution, and involve “an element of incapacitation” (affecting even 419 innocent holders of property), so as to ensure that an offence will not be repeated by the same means. Undoubtedly the aim of incapacitating an offender can inform sentencing and justify removal from society and detention in custody. It was not suggested, nor could it be, that economic incapacitation of a repeat offender of drug crimes may not inform a political decision resulting in an enactment imposing “an economic penalty” rendering such crime “unprofitable”. … 423 … [34] Section 3 of the Forfeiture Act provides: The objective of this Act is to target the proceeds of crime in general and drug-related crime in particular in order to prevent the unjust enrichment of persons involved in criminal activities. … [37] That the stated objectives are penal, and additional to punishment imposed in criminal proceedings, was explained prior to the enactment of the statutory scheme. … In the second reading speech … the Attorney-General for the Northern Territory stated that the objectives of laws for the forfeiture of proceeds of crime are threefold: (1) to deter those who may be contemplating criminal activity by reducing the possibility of gaining a profit from that activity; 424 (2) to prevent crime by diminishing the capacity of offenders to finance future criminal activities; and (3) to remedy the unjust enrichment of criminals who profit at society’s expense. … 428 … [48] … [I]t was submitted that forfeiture under the statutory scheme exacted or imposed punishment for breach of provisions prescribing a rule of conduct. Accordingly, it was said that the guarantee of just terms was incompatible with that exaction.… 435 … [74] … [T]he relevant operation of the Forfeiture Act depends upon … the person’s conviction for certain crimes within a specified time. The stated objectives of the statutory scheme … must be read in the recognition that the Forfeiture Act prescribes penal consequences which flow from a person’s conviction for crime. Two consequences follow from these observations. [75] First, because the forfeiture worked by the Forfeiture Act is imposed as punishment for crime, the impugned provisions do not amount to an acquisition of property other than on just terms. Second, whether that punishment fits the crime (in this case, the repeated commission of certain crimes) is a matter for the legislature. It is irrelevant (and wrong) for the courts to attempt to determine whether any forfeiture which may be worked by the Forfeiture Act (or which is worked in this particular case) is proportionate to the stated objectives. [76] Section 50(1) of the Northern Territory (Self-Government) Act restricts the power conferred on the Legislative Assembly to make laws 436 “for the peace, order and good government” of the Territory, by providing that the power does not extend to “the making of laws with respect to the acquisition of property otherwise than on just terms.” … [77] In relying on Northern Territory (Self-Government) Acts 50(1), the first respondent referred to well-established principles concerning s 51(xxxi) of the Constitution. It was accepted that several authorities in this Court have found, in s 51 of the Constitution, heads of legislative power in respect of which just terms “is an inconsistent or incongruous notion.” (Theophanous v The Commonwealth (2006) 225 CLR 101 at 124 [56] per Gummow, Kirby, Hayne, Heydon and Crennan JJ, quoting Re Director of Public Prosecutions; Ex parte Lawler (1994) 179 CLR 270 at 285 per Deane and Gaudron JJ.) … [M]arking the boundary in that way is ((2006) 225 CLR 101 at 126 [60]): “grounded in the realisation that to characterise certain exactions of government (such as levying of taxation, imposition of fines, exaction of penalties or forfeitures, or enforcement of a statutory lien) as an acquisition of property would be incompatible with the very nature of the exaction.” … [10.150]

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Attorney-General (NT) v Emmerson cont. [78] The first respondent’s submissions sought to distinguish the statutory scheme from earlier statutory schemes for forfeiture, including forfeiture provisions fastening on property connected with an 437 offence, or property used to commit an offence, or where property had been originally conferred so as to deter commission of an offence, or the value of property forfeited had a commensurate relationship with the offence. … [79] … [T]he statutory scheme was then characterised by the first respondent as a non-regulatory revenue-raising scheme which played no legislative role in the enforcement of the criminal law in relation to drug offences or in the deterrence of such activities. The argument subsumed a complaint that the statutory scheme targeted “legitimately generated wealth”, which suggested some want of proportion between the purposes of the statutory scheme and the possible adverse impacts on persons declared to be drug traffickers. [80] It was never explained how or why the concept of “proportionality” … confines the scope of the legislative powers granted to the Territory legislature. … The proper inquiry … is the subject matter of the statutory scheme (Fairfax v Federal Commissioner of Taxation (1965) 114 CLR 1 at 6-7, 11-13 per Kitto J; [1965] HCA 64). The question is whether the statutory scheme can be properly characterised as a law with respect to forfeiture, that is, a law which exacts or imposes a penalty or sanction for breach of provisions which prescribe a rule of 438 conduct. That inquiry must be answered positively, which precludes any inquiry into the proportionality, justice or wisdom of the legislature’s chosen measures. [81] The provisions comprising the statutory scheme in respect of declared drug traffickers do not cease to be laws with respect to the punishment of crime because some may hold a view that civil forfeiture of legally acquired assets is a harsh or draconian punishment. … [83] The reference in the statutory objectives to the costs of “deterring” or “dealing with” the consequences of a drug trafficker’s activities is not fairly to be read as restricted to the “costs” of law enforcement, capable of arithmetical calculation for the purposes of raising revenue. A remedial purpose confined thus might raise a question of proportionality, but the social consequences of drug crime … are not so confined. Further, the legislative purpose of protecting society by incapacitating a drug trafficker through forfeiture or confiscation of his or her assets is a method of “dealing with” the consequences of such criminal activities. [84] The Territory legislature has determined that a person who is proven to have committed at least three qualifying drug offences within a specified period is liable to have his or her property forfeited or confiscated. Characterising those provisions as an acquisition of property without provision of just terms is erroneous. The requirement of just terms is “incompatible with the very nature of the exaction” ((2006) 225 CLR 101 at 126 [60] per Gummow, Kirby, Hayne, Heydon and Crennan JJ), being a punishment for crime. 439 [85] It is within the province of a legislature to gauge the extent of the deleterious consequences of drug trafficking on the community and the soundness of measures, even measures some may consider to be harsh and draconian punishment, which are thought necessary to both “deter” and “deal with” such activities. The political assessments involved are matters for the elected Parliament of the Territory and complaints about the justice, wisdom, fairness or proportionality of the measures adopted are complaints of a political, rather than a legal, nature. Gageler J: 440 [92] Section 36A of the Misuse of Drugs Act (NT) (“the Misuse Act”) and ss 44(1)(a) and 94 of the Criminal Property Forfeiture Act (NT) (“the Forfeiture Act”) … 441 … are laws with respect to the acquisition of property otherwise than on just terms. … 442 … [100] Proceedings on an application under the Forfeiture Act, including an application for a restraining order under s 44(1)(a), are taken to be civil proceedings for all purposes. Proceedings on an application under s 36A of the Misuse Act partake of the same civil character. … 443 … The forfeiture which results under s 94 of the Forfeiture Act is independent of and cumulative upon the punishment for criminal guilt. … 444 [104] … [A]lthough s 3 of the Forfeiture Act states that the objective of that Act is to “target the proceeds of crime in general and drug-related crime in particular in order to prevent the unjust enrichment of persons involved in criminal activities”, that statement cannot be taken to be comprehensive and does not describe the operation of the scheme … The DPP can apply for and, subject to the limited discretion of the Supreme Court, obtain a restraining order in respect of all or any of the property of a person shown by later conviction to have been involved in criminal 770

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Attorney-General (NT) v Emmerson cont. activities. The property subject to a restraining order then forfeited on declaration need have no connection with those or any other criminal activities. … 445 … [107] Section 50(1) of the Self-Government Act … carves out from the legislative power conferred on the Legislative Assembly by s 6 of the Self-Government Act a specific prohibited area of legislative power ascertained by reference to that which s 51(xxxi) carves out (or “abstracts”) from other legislative powers conferred on the Commonwealth Parliament by s 51 of the Constitution. … 446 [109] The settled understanding is that s 51(xxxi)’s abstraction from other legislative powers in s 51 of the Constitution arises by implication from the condition it attaches to the particular legislative power it confers. The particular legislative power – to make laws “with respect to … the acquisition of property” – “was introduced … not … for the purpose of protecting the subject or citizen, but primarily to make certain that the Commonwealth possessed a power compulsorily to acquire property” (Grace Brothers Pty Ltd v The Commonwealth (1946) 72 CLR 269; [1946] HCA 11 at 290-291 (CLR)). The condition – “on just terms” – was “included to prevent arbitrary exercises of the power at the expense of a State or the subject” ((1946) 72 CLR 269 at 291). The condition operates to prevent an “acquisition of property” within the meaning of the power from occurring otherwise than “on terms” which are provided by law and which can be characterised as “just” ((1946) 72 CLR 269 at 291; Smith v ANL Ltd (2000) 204 CLR 493; [2000] HCA 58 at 512-513 [48] (CLR)). The “standard of justice” is one of “fair dealing” considered in accordance with “the life and experience” of the Australian community (Nelungaloo Pty Ltd v The Commonwealth (1952) 85 CLR 545; [1952] HCA 11 at 600 (CLR); The Commonwealth v Tasmania (1983) 158 CLR 1; [1983] HCA 21 at 291 (CLR). See also Bank of New South Wales v The Commonwealth (1948) 76 CLR 1; [1948] HCA 7 at 300 (CLR); Poulton v The Commonwealth (1953) 89 CLR 540; [1953] HCA 101 at 574 (CLR)). That condition of just terms would be a hollow thing were laws with respect to the acquisition of property within the meaning and scope of s 51(xxxi) to fall also within the scope of other legislative powers to which the same condition does not attach. [110] Equally settled is the understanding that not all laws which acquire property are laws with respect to the acquisition of property within the meaning of s 51(xxxi) so as to attract the condition of just terms. There are some laws acquiring property … which must be able to be enacted under other legislative powers conferred by s 51 of the Constitution and in respect of which the condition of just terms would be “inconsistent”, “irrelevant” or “incongruous”. Laws imposing fines or forfeitures as penalties or punishments for breaches of norms of conduct have long been held to be amongst them. … 448 … [116] … For a law acquiring property to escape the just terms condition in s 51(xxxi), the law must at least have a purpose consonant with the constitutional purpose of that condition: to prevent arbitrary acquisition. … [118] … A law which forfeits property for the primary purpose of imposing a penalty or sanction for breach of a norm of conduct and which escapes the just terms condition in s 51(xxxi) is an example of a law which has the general characteristics of a law which acquires property without attracting that condition: the objective of the law must be within power; the acquisition must be a necessary or characteristic feature of the means the law selects to achieve that objective; and the means must be appropriate and adapted to achieving that objective. [119] Those characteristics were identified by Brennan J in Mutual Pools & Staff Pty Ltd v The Commonwealth ((1994) 179 CLR 155 at 179-180) and were embodied in the test adopted and applied by Gleeson CJ and Kirby J in Airservices 449 Australia v Canadian Airlines International Ltd ((1999) 202 CLR 133 at 180 [98]). They are a reflection of the underlying purpose of the just terms condition to prevent arbitrary acquisitions. To conclude that a law which acquires property and which is otherwise within legislative power is one in respect of which the condition of just terms would be inconsistent, irrelevant or incongruous is necessarily to conclude that the dominant character of the law is informed by those characteristics. [120] A law forfeiting property which has as its primary purpose imposing a penalty or sanction for breach of a norm of conduct will ordinarily have the first of those characteristics: it will ordinarily have an objective that is within power. The law will not necessarily have the other characteristics. That will [10.150]

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Attorney-General (NT) v Emmerson cont. depend on whether the particular forfeiture is a necessary or characteristic feature of the means the law selects to achieve that objective and on whether those means are appropriate and adapted to achieving that objective. [121] The applicable test is more stringent than that which will sometimes apply to determine whether the law is otherwise within power. As befits the application of a constitutional guarantee, the inquiry is not as to “whether the law is capable of being reasonably considered to be appropriate and adapted to the end sought to be achieved” but rather as to “whether the burden or restriction [that is to say, the acquisition of property] is reasonably appropriate and adapted, in the court’s judgment, to the legitimate end in view” (Cunliffe v The Commonwealth (1994) 182 CLR 272; [1994] HCA 44 at 300 (CLR); Attorney-General (SA) v Corporation of the City of Adelaide (2013) 87 ALJR 289; 295 ALR 197; [2013] HCA 3 at 310-311 [62] (ALJR), 219 (ALR)). [122] Analysis “must begin from an understanding of the practical and legal operation of the legislative provisions that are in issue” (Telstra Corporation Ltd v The Commonwealth (2008) 234 CLR 210; [2008] HCA 7 at 232 [49] (CLR)). As ought go without saying, consideration of the merits of the law purporting to impose the taking … forms no part of the analysis. … 451 … [132] The sole legislatively declared purpose of the forfeiture, it will be recalled, is “to compensate the Territory community for the costs of 452 deterring, detecting and dealing with the [person’s] criminal activities”. That legislative purpose cannot explain the extent of the forfeiture consonantly with the constitutional purpose of the just terms condition to prevent arbitrary acquisition. That is because the means chosen by the law are not appropriate and adapted to achieve it. No attempt has been made in the legislative scheme to link the value of the property forfeited to the amount of the costs identified. [133] The Solicitor-General of the Commonwealth and the Solicitor-General for the Northern Territory sought to supplement that legislatively declared purpose by arguing that the forfeiture has the additional purpose (they went so far as to say the primary purpose) of imposing a penalty or sanction for breach of a norm of conduct. … [134] No doubt forfeiture under the legislative scheme does act as a deterrent to the commission of another offence, but how? The penalty or sanction it imposes for breach of the identified norm of conduct is not imposed as part of the process of the adjudication and punishment of the offence by a court. The penalty or sanction does not, like felony forfeiture at common law, result automatically by operation of law on commission or conviction of the offence. The character of the penalty or sanction is, rather, as captured in the submission of the Solicitor-General for the Northern Territory that “[t]he legislature has determined that a person who is proven to have committed three qualifying drug offences is liable to have his or her property confiscated”. The words are his; the emphasis is mine. [135] The penalty or sanction imposed by the legislative scheme, such as it is, lies in the threat of statutorily sanctioned executive expropriation: the forfeiture (or not) of all (or any) property at the discretion of the DPP. … [136] … [A] person who is proven to have committed three qualifying drug offences is, under the legislative scheme, made liable to the confiscation of such of his or her property as the DPP considers in the public interest. … 453 … [139] … [C]onferral of executive discretion of that nature is not a necessary or characteristic feature of penal forfeiture … [F]orfeiture by means which involve the conferral of such an executive discretion is not appropriate and adapted to achieving an objective of imposing a penalty or sanction for breach of the identified criminal norm. [140] Sections 44(1)(a) and 94 of the Forfeiture Act and s 36A of the Misuse Act, in imposing forfeiture on those terms, do not have the characteristic of laws which acquire property for a purpose and by means consistent with the underlying purpose of the just terms condition to prevent arbitrary acquisitions. Their dominant character is that of laws with respect to the acquisition of property within the meaning of s 51(xxxi). Within the meaning of s 50(1) of the Self-Government Act, they are laws

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Attorney-General (NT) v Emmerson cont. with respect to the acquisition of property otherwise than on just terms.

[10.160]

Notes&Questions

1.

What heads of power support the enactment of the Refund Act?

2.

The High Court was unanimous in upholding the validity of the Refund Act, but was there consensus in the formulation of a general test to determine when a grant of specific legislative powers would exclude the operation of s 51(xxxi)?

3.

Re Director of Public Prosecutions; Ex parte Lawler (1994) 179 CLR 270 concerned the forfeiture of a boat pursuant to s 106(1)(a) of the Fisheries Management Act 1991 (Cth). That section empowered the court to order such a forfeiture following the conviction of a person of an offence against the Act. The lessees of the boat, unbeknown to its owners, were caught using a foreign fishing boat for commercial fishing within the Australian Fishing Zone. The High Court had to deal with the question whether s 106 in authorising the forfeiture of property of innocent third parties was in violation of s 51(xxxi). Mason CJ at 276 said: In essence, the position is that the prescription of forfeiture of property used in the commission of a fisheries offence is within the power conferred by s 51(x) and that power extends to the prescription of forfeiture of that property, notwithstanding that the owner is innocent of complicity in the commission of the offence. Likewise, the legislative prescription of forfeiture of that property pursuant to s 51(x) is not a law for the acquisition of property within s 51(xxxi) and it does not become such a law by reason of the legislative prescription authorizing forfeiture of property in circumstances in which the owner is innocent of complicity in the commission of the offence.

The other members of the High Court (Brennan, Deane, Dawson, Toohey, Gaudron and McHugh JJ) also held that the impugned s 106(1)(a) was not a law with respect to the acquisition of property within s 51(xxxi). 4.

Does Gageler J’s contention in Emmerson (at 448 [118]), that a penal forfeiture law will be valid only if the manner of forfeiture for which it provides is “a necessary or characteristic feature” of penal forfeiture laws, and is “appropriate and adapted” to achieving the law’s penal objective, provide an answer to the majority’s concerns that it is not appropriate for the judiciary to inquire into the “proportionality” of such laws?

5.

In Theophanous v Commonwealth (2006) 225 CLR 101; 80 ALJR 886, s 51(xxxi) was invoked (unsuccessfully) in relation to the Crimes (Superannuation Benefits) Act 1989 (Cth), Pt 2.

6.

In Nintendo Co Ltd v Centronic Systems Pty Ltd (1994) 181 CLR 134 an argument based on s 51(xxxi) was raised as “a defence of last resort”. The argument arose in the context of an action brought by Nintendo against Centronics for an alleged infringement of its rights under the Circuit Layouts Act 1989 (Cth). Centronics sold in Australia video game machines (“Spica Entertainment Units”) which contained a silicon chip incorporating the “Spica circuit”. These machines had been imported from Taiwan some time before the commencement of the Act. The Spica circuit was based on a Nintendo layout. Centronics submitted that “to the extent that the Act operated to confer, upon Nintendo, the exclusive right of commercial exploitation of the Spica circuits contained in the Entertainment Units which were already owned by Centronics [10.160]

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7.

at the commencement of the Act, the Act purported to effect an ‘acquisition of property’ on other than the ‘just terms’ which s 51(xxxi) guarantees”. This argument was rejected by the High Court. If an entitlement is provided by statute would a subsequent extinguishment of this entitlement by Parliament amount to an acquisition within the terms of s 51(xxxi)? Refer to Health Insurance Commission v Peverill (1994) 179 CLR 226.

Nintendo Co v Centronic Systems [10.170] Nintendo Co Ltd v Centronic Systems Pty Ltd (1994) 181 CLR 134 at 160–167 Mason CJ, Brennan, Deane, Toohey, Gaudron and McHugh JJ: 160 [The] operation of s 51(xxxi) to confine the content of other grants of legislative power, being indirect through a rule of construction, is subject to a contrary intention either expressed or made manifest in those other grants. In particular, some of the other grants of legislative power clearly encompass the making of laws providing for the acquisition of property unaccompanied by any quid pro quo of just terms. … The grant of Commonwealth legislative power which sustains the Act is that contained in s 51(xviii) of the Constitution with respect to “Copyrights, patents of inventions and designs, and trade marks” (compare, eg, R v Brislan; Ex parte Williams (1935) 54 CLR 262; Jones v 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. It is of the nature of such laws that they confer such rights on authors, inventors and designers, other originators and assignees and that they conversely limit and detract from the proprietary rights which would otherwise be enjoyed by the owners of affected property. Inevitably, such laws may, at their commencement, impact upon existing proprietary rights. To the 161 extent that such laws involve an acquisition of property from those adversely affected by the intellectual property rights which they create and confer, the grant of legislative power contained in s 51(xviii) manifests a contrary intention which precludes the operation of s 51(xxxi). The cases also establish that a law which is not directed towards the acquisition of property as such but which is concerned with the adjustment of the competing rights, claims or obligations of persons in a particular relationship or area of activity is unlikely to be susceptible of legitimate characterization as a law with respect to the acquisition of property for the purposes of s 51 of the Constitution (see, eg, Australian Tape Manufacturers Association Ltd v Commonwealth (1993) 176 CLR 480 at 510; Mutual Pools & Staff Pty Ltd v Commonwealth (1994) 179 CLR 155 at 171–173, 177–178, 188–189; Re Director of Public Prosecutions; Ex parte Lawler (1994) 179 CLR 270 at 285–286; Health Insurance Commission v Peverill (1994) 179 CLR 226 at 236–238; Georgiadis v Australian and Overseas Telecommunications Corporation (1994) 179 CLR 297 at 305–308). The Act is a law of that nature. … Its relevant character is that of 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. Consequently, it is beyond the reach of s 51(xxxi)’s guarantee of just terms. … Dawson J [agreed with his fellow judges, but added additional remarks explaining the basis on which certain laws may bring about the acquisition of property without requiring just terms]: 164 The power conferred is subject to two limitations. The first is that the acquisition must be on just terms. The second is that the property must be acquired for 165 a purpose in respect of which the Parliament has power to make laws. It is the second limitation that is relevant in the present case. The acquisition which is alleged is not an acquisition by the Commonwealth but by a third party, namely, Nintendo. It is now settled that s 51(xxxi) extends to compulsory acquisition by a third party (Jenkins v Commonwealth (1947) 74 CLR 400 at 406; McClintock v Commonwealth (1947) 75 CLR 1 at 23, 36; PJ Magennis Pty Ltd v Commonwealth (1949) 80 CLR 382 at 401–402, 411, 423; Trade Practices Commission v Tooth & Co Ltd (1979) 142 CLR 397 at 427, 451–452; Australian Tape Manufacturers Association Ltd. v Commonwealth (1993) 176 CLR 480 at 510–511, 526; Mutual Pools & Staff Pty Ltd v Commonwealth (1994) 179 CLR 155 at 199–200) but, of course, only if the requirements of the paragraph are met. … It will be 774

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Nintendo Co v Centronic Systems cont. apparent that where legislation provides for the acquisition of property by a third party, the property itself will frequently not be acquired for any purpose in respect of which the Parliament has power to make laws but for the purposes of the third party (Health Insurance Commission v Peverill (1994) 179 CLR 226 at 249–252). … 166 Where property is acquired by a third party pursuant to Commonwealth legislation, it is more likely that the use or application of the property envisaged by the legislation will not fall within any head of Commonwealth legislative power. The acquisition of the property will then not be for any purpose in respect of which the Parliament has power to make laws within the meaning of s 51(xxxi), and legislative power to support the acquisition must be sought elsewhere. This is the situation with many Commonwealth laws which regulate the relationship between private persons. For example, it is the situation with the compulsory acquisition of property under bankruptcy law. The power to support the acquisition is not found in s 51(xxxi) but in s 51(xvii) (bankruptcy and insolvency) (see Re Dohnert Muller Schmidt & Co; Attorney-General (Cth) v Schmidt (1961) 105 CLR at 372). It is the situation with the readjustment of property rights between the parties to a marriage where the legislative power is to be found in s 51(xxi) (marriage) or 51(xxii) (divorce and matrimonial causes). … 167 In Australian Tape Manufacturers Association Ltd. v Commonwealth some members of this Court found that it was unlikely that a law would fall within s 51(xxxi) if it was concerned with “a genuine adjustment of the competing rights, claims or obligations of persons in a particular relationship or area of activity” ((1993) 176 CLR 480 at 510. See also Mutual Pools & Staff Pty Ltd v Commonwealth (1994) 179 CLR 155 at 171–173, 177–178, 188–189). That observation is consistent with the view which I have expressed above but it is, I think, necessary to identify with some precision its constitutional foundation. In my view that can only be done by recognizing that s 51(xxxi) confers a legislative power and that power is confined to “the acquisition of property … for any purpose in respect of which the Parliament has power to make laws”. … Thus a test emerges for determining whether the compulsory acquisition of property by a third party under Commonwealth legislation is or is not concerned with “a genuine adjustment of the competing rights, claims or obligations of persons in a particular relationship or area of activity”. The rights, if any, acquired under the Act by Nintendo in respect of the integrated circuits in question were acquired for Nintendo’s own purposes and not for any purpose in respect of which the Parliament has power to make laws. If any compulsory acquisition is involved, it is not an acquisition to which s 51(xxxi) has any application. The power to support the acquisition is to be found not in s 51(xxxi) but in s 51(xviii) (copyrights, patents of inventions and designs, and trade marks).

Health Insurance Commission v Peverill [10.180] Health Insurance Commission v Peverill (1994) 179 CLR 226 at 235–245 [For pathology tests conducted by Dr Peverill, his patients assigned to him their rights to Medicare benefits under the Health Insurance Act 1973 (Cth). Dr Peverill submitted claims for these tests under item 1345. However, the Health Insurance Commission decided to meet these claims under another item which specified a payment less than that payable under item 1345. The Federal Court held that the Health Insurance Commission should pay the benefits under item 1345. Dr Peverill sued the Commission to recover the benefits due under item 1345. While the action was on foot, the Commonwealth Parliament passed the Health Insurance (Pathology Services) Amendment Act 1991 (Cth) which had the effect of reducing, with retrospective effect, the benefits which were previously payable under item 1345. A challenge to the validity of the Act was unanimously dismissed by the High Court. There were variations in the reasoning proffered by the judges. The joint judgment of Mason CJ, Deane and Gaudron JJ and that of Brennan J have been selected for a sharp contrast.] Mason CJ, Deane and Gaudron JJ: 235 Dr Peverill’s argument is that the retrospective substitution of a statutory right to receive payment of a lesser amount in substitution for his earlier entitlement is an “acquisition of property” for the purposes of s 51(xxxi). 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 [10.180]

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Health Insurance Commission v Peverill cont. the purposes of that paragraph (Minister for the Army v Dalziel (1944) 68 CLR 261 at 285, 290, 295; Mutual Pools & Staff Pty Ltd v Commonwealth at 172–173, per Mason CJ; at 184–185, per Deane and Gaudron JJ). 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). Dr Peverill’s argument is that, in the case of a fixed liquidated obligation of the Commonwealth to which an individual is presently entitled, the cancellation of the obligation is an “acquisition of 236 property” because the effect of the Amending Act is that the Commonwealth acquires the original entitlement and replaces it with another. … 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 at 172–173, per Mason CJ; at 184–186, per Deane and Gaudron JJ). 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 (at 171–172, per Mason CJ; at 189–190, per Deane and Gaudron JJ) but also as an element in a regulatory scheme for the provision of welfare benefits from public funds. … 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. … 237 … 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. … 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. … Brennan J: 243 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 244 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, per Fullagar J). … The Principal Act provides for the payment of what is, as between the Commonwealth and the claimant for the medicare benefit, a gratuitous payment. If a statute provided for money in a particular amount to be paid to a person from whom property had been acquired, a diminution of the amount to be paid enacted after the acquisition might well attract the protection of the just terms requirement in s 51(xxxi). Again, if a statute provided for money in a particular amount to be paid to a person who had given good consideration for the payment, the right to payment in that amount might well be regarded as property which could 776

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Health Insurance Commission v Peverill cont. not be diminished by a law enacted after the consideration was given that did not provide just terms. But the Principal Act does not fall into either of those categories. True it is that an assignee practitioner acquires a right to claim a medicare benefit under (Cth)s 20A only by agreement to give up a right to payment of a fee for services rendered but that agreement is between the assignee practitioner and the patient. Consideration passes from the assignee practitioner to the patient and from the patient to the assignee practitioner. What the assignee 245 practitioner acquires is a statutory right which, as between the practitioner and the Commonwealth (or the Commission), is a gratuity. … When, by statute or otherwise, a debt is created, the creditor is by law entitled to payment in the amount of the debt and that entitlement is immune from legislative acquisition under s 51(xxxi) unless just terms are provided. But where 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.

[10.190]

1.

Notes&Questions

In Commonwealth v WMC Resources Ltd (1998) 194 CLR 1, WMC Resources Ltd had been issued an exploration permit under the Petroleum (Submerged Lands) Act 1967 (Cth) to explore for petroleum in an area within the continental shelf between Australia and East Timor. As a result of a Treaty made between Australia and Indonesia, the Commonwealth Parliament enacted the Petroleum (Australia–Indonesia Zone of Co-operation) Act 1990 (Cth) and the Petroleum (Australia–Indonesia Zone of Cooperation) (Consequential Provisions) Act 1990 (Cth). The Consequential Provisions Act amended the 1967 Act with the effect of reducing the area of exploration. The question of whether this amounted to an acquisition of property which thus required the payment of just terms was considered by the High Court. It was held by Brennan CJ, Gaudron, McHugh and Gummow JJ (Toohey and Kirby JJ dissenting) that the impugned legislation was not a law for the acquisition of property and therefore was not a law within s 51(xxxi). Brennan CJ said (at 20): Although, by our municipal law the Commonwealth has the power to legislate in respect of the exploration of and exploitation of the resources of the continental shelf, it has no property in the continental shelf at common law … The statutory modification or extinguishment of a permit or an interest in a permit is not an acquisition of property by the Commonwealth, for the Commonwealth was under no liability reciprocal to the permit or interest and acquires no benefit by the modification or extinguishment.

According to Gaudron J, the impugned legislation 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 (at 38)”. 2.

In Telstra Corp Ltd v Commonwealth (2008) 234 CLR 210 at 233–234 the High Court unanimously held that legislation permitting competing telecommunications service providers to make use of telecommunications infrastructure owned by Telstra did not amount to an acquisition of Telstra’s property on other than just terms: There are three cardinal features of context and history that bear upon the constitutional issues which are raised. First, the P[ublic] S[witched] T[elephone] N[etwork] which Telstra now owns … 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 [10.190]

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competitors of Telstra access to the use of the assets of that network. … 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” (1991 Telecommunications Act, s 136(1)(a)) and sought to achieve this goal by “giving each carrier the right … to obtain access to services supplied by the other carriers” (1991 Telecommunications Act, s 136(2)(b)(ii)). 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. … 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. 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. … 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. … 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. … 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.

3.

Cunningham v Commonwealth (2016) 90 ALJR 1138; [2016] HCA 39 concerned reductions in the entitlements of retired parliamentarians, resulting in part from amendments to the Parliamentary Contributory Superannuation Act 1948 (Cth) and the Remuneration Tribunal Act 1973 (Cth), and in part from decisions of the Remuneration Tribunal exercising powers under the latter statute. The High Court unanimously held that reductions in entitlements to retirement allowances did not amount to an acquisition of property otherwise than on just terms, as they were changes made to a statutory right that was inherently liable to such modification. As French CJ, Kiefel and Bell JJ explained (at 1148 [46]; see also Gageler J at 1157 [102], [104]; Keane J at 1166 [169]; Nettle J at 1173 [222], 1177 [241]; Gordon J at 1179 [252], 1189 [329], 1190 [333]): If a right or entitlement was always, of its nature, liable to variation … a variation later effected cannot properly be described as an acquisition of property. The Commonwealth does not as a result of an amendment effecting a variation receive a release from an existing liability and therefore acquire property, as the plaintiffs contend. The Commonwealth’s liability corresponds with the variation made.

The reductions in entitlements also placed limitations on the use of “Life Gold Passes” permitting free domestic travel. The majority took the view that the entitlement to a Life Gold Pass was likewise inherently susceptible to variation (at 1148–49 [50]–51], 1168 [191], 1178 [244], 1193 [357]); French CJ, Kiefel and Bell JJ also held that, as a 778

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matter of statutory construction, the granting of a Life Gold Pass was a gratuity, and hence any limitations on its use did not burden any property right (at 1149 [55]). Gageler J, however, dissented on the Life Gold Pass issue (at 1158–59): [109] The [Remuneration] Tribunal itself had no power to alter rights attaching to a Life Gold Pass that had been issued to a retiring member in accordance with a subsisting determination by varying or amending that determination. … [111] Therefore, neither in principle nor in practice was there anything inherently variable about the rights attaching to a Life Gold Pass issued to a retiring member in accordance with a subsisting determination of the Remuneration Tribunal. … [114] … The determinations of the Remuneration Tribunal subsisting under s 7(1) of the Remuneration Tribunal Act gave rise to accrued statutory rights the diminution of which by the 2002 Act and the 2012 Act, to obvious financial benefit of the Commonwealth, constituted acquisitions of property within the meaning of s 51(xxxi) of the Constitution.

[115] Viewed from the perspective of anyone other than the holder or prospective holder of a Life Gold Pass, the statutory rights in question must be acknowledged to be a particularly unattractive form of property. The Remuneration Tribunal commented in 2011 that “[t]here is possibly no single issue on which there is such a disconnect between parliamentarians and their constituents as the Life Gold Pass” and went on to note that the public view of actual usage of Life Gold Passes seemed to be one of derision. [116] The protection afforded by the just terms condition of s 51(xxxi) has nothing to do with the popularity of the creation of the property that is protected. Much less can the constitutional protection yield to the popularity of its taking. In the words of Gleeson CJ (Smith v ANL Ltd (2000) 204 CLR 493 at 501 [9]): The guarantee contained in s 51(xxxi) is there to protect private property. It prevents expropriation of the property of individual citizens, without adequate compensation, even where such expropriation may be intended to serve a wider public interest. A government may be satisfied that it can use the assets of some citizens better than they can; but if it wants to acquire those assets in reliance upon the power given by s 51(xxxi) it must pay for them, or in some other way provide just terms of acquisition.

Professor Rosalind Dixon has argued that Gageler J’s approach in Emmerson reveals a “functionalist” approach to interpreting the Constitution, that is, one that “rel[ies] on substantive constitutional values, not simply more ’formal’ legal sources”: “The Functional Constitution: Re-Reading the 2014 High Court Constitutional Term” (2015) 43 Federal Law Review 455, 456, 477–80. Do Gageler J’s dissents in Emmerson and Cunningham reveal anything distinctive about his approach to the interpretation and application of s 51(xxxi)? Is that approach an alternative to a focus on the proper characterisation of a law, or rather an approach to the characterisation task itself? 4.

See generally: R Dixon, “Overriding Guarantee of Just Terms or Supplementary Source of Power? Rethinking s 51(xxxi) of the Constitution” (2005) 27 Sydney Law Review 639; S Evans, “When is an Acquisition of Property Not an Acquisition of Property” (2000) 11 Public Law Review 183; T Allen, “The Acquisition of Property on Just Terms” (2000) 22 Sydney Law Review 351.

[10.190]

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Section 51(xxxi) in relation to ss 96 and 122 [10.200] The guarantee of just terms found in s 51(xxxi) operates as a constraint upon the

interpretation of other powers that might appear, on their face, to permit the acquisition of property on other than just terms. There has been some debate over the extent to which this interpretive constraint applies to legislative powers found outside the context of s 51, or Ch I more broadly.

P J Magennis v Commonwealth [10.210] PJ Magennis Pty Ltd v Commonwealth (1949) 80 CLR 382 at 401–406 [This case concerned two pieces of legislation. The War Service Land Settlement Agreements Act 1945 (Cth) authorised the Commonwealth to enter into certain agreements with the States. The War Service Land Settlement Agreement Act 1945 (NSW) purported to ratify such an agreement between New South Wales and the Commonwealth, under which New South Wales would compulsorily acquire land for the settlement of ex-servicemen and the Commonwealth would contribute funds to subsidise the compensation payable upon the compulsory acquisition. The agreement limited such compensation, however, to the value of the land as at February 10, 1942; and this provision of the agreement was incorporated into the New South Wales system of measuring compensation for compulsory acquisition established under statute. The plaintiff challenged the validity of this limitation upon the compensation payable upon the New South Wale’s Government’s compulsory acquisition of its land pursuant to the agreement.] Latham CJ: 401 The constitutional provision [s 51(xxxi)] is not limited in terms to laws providing for the acquisition of property by the Commonwealth itself. The words are general – “with respect to the acquisition of property.” It is obvious that the constitutional provision could readily be evaded if it did not apply to 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. … 402 The provisions in the schedule to the Commonwealth Act are provisions of an agreement and not of a statute. It is true that the Act is a law authorizing only the execution of the agreement, but the whole subject matter of the agreement is the acquisition of property upon certain terms and conditions for certain purposes. The provisions of the agreement are directed to the acquisition of property and the agreement becomes effective in achieving its objective of the settlement of discharged servicemen only when property has been acquired. I can see no reason whatever for holding that a law approving an agreement of such a character as this is not a law with respect to the acquisition of property. … 403 It follows that the Act is an Act with respect to the acquisition of property upon terms which are not just and is therefore invalid. … But the legislative power of the State Parliament is not limited by any requirement of just terms and, therefore, it is submitted for the defendants that the State legislation approving and ratifying the agreement, Act No 6 of 1946, the War Service Land Settlement Agreement Act 1945, is valid even if the Commonwealth Act is invalid. But that which the State Act approves is an agreement made between the State and the Commonwealth. If the agreement cannot validly be made by the Commonwealth then it cannot be valid as an agreement between the State and the Commonwealth. … 405 There is in my opinion no doubt as to the power of the State Parliament to provide for compensation for land resumed upon any basis which it thinks proper. But in the present case the State proposes to resume the land, not under the general provisions of State statutes which provide for paying the value of the land, but “for the purposes of” the agreement with the Commonwealth … I have stated my reasons for the opinion that the State legislation is inoperative so far as it relates to, and purports to give powers 406 to resume lands for the purposes of, the agreement. … As in my opinion there is no such agreement, the direction as to the limit of compensation has no operation in this or in any case. 780

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P J Magennis v Commonwealth cont. [Williams and Webb JJ each delivered a judgement along substantially similar lines. Rich J agreed with the judgement of Williams J. Dixon and McTiernan JJ dissented.]

[10.220]

Notes&Questions

Following this decision, the New South Wales Parliament amended its compulsory acquisition legislation to remove any reference to the agreement with the Commonwealth in identifying that land in respect of which valuations were to be frozen as at 10 February 1942. In Pye v Renshaw (1951) 84 CLR 58, the High Court unanimously upheld the validity of this amended legislation. The plaintiff in this case alleged that the acquisition of his land was made by arrangement with the Commonwealth, that the Commonwealth played a role in valuing his land, and that the Commonwealth was paying money to New South Wales to assist the state in acquiring land at less than its real value. The Court, at 83, rejected the relevance of these allegations in the following terms: There is no allegation that the moneys have not been duly appropriated by Act of the Commonwealth Parliament, and indeed no allegation that the payment of the moneys is or would be for any reason unlawful. No doubt, however, it is intended to be based on the proposition of law that an appropriation by the Commonwealth Parliament for the purposes mentioned is unconstitutional. … 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, authorized by its Parliament. But the Commonwealth is not authorized 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 Commonwealth [1926] HCA 48; (1926) 38 CLR 399: see also South Australia v Commonwealth [1942] HCA 14; (1942) 65 CLR 373 at 417, where Latham CJ said: “The Commonwealth may properly induce a State to exercise its powers … by offering a money grant.”

Is this reasoning consistent with the status of s 51(xxxi) as a constitutional guarantee?

ICM Agriculture v Commonwealth [10.230] ICM Agriculture Pty Ltd v Commonwealth (2009) 240 CLR 140 at 164–199, 174 French CJ, Gummow and Crennan JJ: 164 [28] The Commonwealth Solicitor-General … analysed the relevant operation of the NWC Act as follows: (i) the Prime Minister as Minister administering that statute made a decision under s 42(a)(i) to award financial assistance, as indicated by his announcement of 9 June 2005; (ii) the CEO had the function conferred by s 24 of administering that financial assistance and the Funding Agreement was entered into to further that end; (iii) further, s 61 of the Constitution authorised the Commonwealth to enter into the Funding Agreement as a principal; (iv) the legislative power of the Commonwealth under s 96 or s 96 with s 51(xxxvi) (this reads: “matters in respect of which this Constitution makes provision until the Parliament otherwise provides.” Section 96 states: “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.”) extends to the grant of financial assistance to a State for the purpose of the State acquiring property on other than just terms; (v) the power of the CEO under s 24 of the NWC Act to administer financial assistance is to be read down, if necessary, to financial assistance which it is within the legislative power of the Commonwealth to provide; (vi) but by reason of (iv), no such occasion for reading down arises. [29] With respect to the executive power to enter the Funding Agreement, the Commonwealth Solicitor-General correctly accepted that if, contrary to his submission (iv) respecting legislative power, [10.230]

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ICM Agriculture v Commonwealth cont. s 96 was relevantly qualified by s 51(xxxi), an agreement to facilitate such a grant which could not be authorised by s 96 would not be supported by s 61. In this way, limitations upon legislative power may indicate whether the ends of an agreement are consistent with the 165 Constitution (see Saunders, “Intergovernmental agreements and the executive power”, (2005) 16 Public Law Review 294 at 306). … [30] In further elaboration of his argument respecting the relationship between s 96 and s 51(xxxi), the Solicitor-General emphasised that (a) s 51(xxxi) operates by abstracting the power of compulsory acquisition from the subject of other “coercive” grants of power that, in the absence of s 51(xxxi), would permit compulsory acquisition by force of Commonwealth law, (b) whether read alone or with s 51(xxxvi), s 96 is a “non-coercive” power, and (c) “terms and conditions” within the meaning of s 96 may extend to the exercise of State legislative power in a coercive way, but, being supported by s 96, will be outside the reach of s 51(xxxi). … 166 [33] 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 LR 58 at 83. … 167 [34] However, the two earlier authorities referred to in the last sentence [of the Court’s judgement in Pye v Renshaw] do not require rejection of the particular argument respecting s 96 which was in issue in Pye v Renshaw. … [35] Counsel for the present plaintiffs correctly submitted that what was said in Victoria v Commonwealth and the First Uniform Tax Case did not address “the very argument” which was put in Pye v Renshaw (1951) 84 CLR 58 at 83. This concerned the application to the exercise of the legislative power conferred by s 96 (read with s 51(xxxvi)) of the restriction found in s 51(xxxi). [36] 168 … 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. [37] 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 at 505. … [38] 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. … 169 [40] 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. … 170 [46] The result is that the legislative power of the Commonwealth conferred by s 96 and s 51(xxxvi) 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. The plaintiffs’ case, to that extent, should be accepted. … Hayne, Kiefel and Bell JJ: 198 [138] For the purposes of this case it is enough to make only the following points. First, it is now well established that the practical operation of a law is not irrelevant to questions of characterisation (Re Dingjan; Ex parte Wagner (1995) 183 CLR 323; [1995] HCA 16 at 368–369 (CLR); Leask v Commonwealth (1996) 187 CLR 579; [1996] HCA 29 at 601–602, 621, 633–634(CLR); Grain Pool (WA) v Commonwealth (2000) 202 CLR 479; [2000] HCA 14 at 492 [16] (CLR)). Of course, the character of the law must be determined by reference to the rights, 199 powers, liabilities, duties and privileges which it creates (Fairfax v Federal Commissioner of Taxation (1965) 114 CLR 1; [1965] HCA 64 at 7 (CLR); Kartinyeri v Commonwealth (1998) 195 CLR 337; [1998] HCA 22 at 352–353 [7], 372 [58] (CLR)). But the practical operation of the law must also be considered in determining the sufficiency of the connection. [139] Second, a law may contravene the constitutional restraint on the power of acquisition – that just terms be provided – directly or indirectly, explicitly or implicitly. … [140] Third, no textual or other 782

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ICM Agriculture v Commonwealth cont. reason was identified in argument, beyond the conclusion about characterisation reached by Dixon J in Magennis, which led inexorably to the conclusion that the power given by the Parliament to fix terms and conditions for grants of financial assistance to the States under s 96 is unrestrained by s 51(xxxi). More particularly, the debate about whether the reference in s 96 to “such terms and conditions as the Parliament thinks fit” is properly described as a head of legislative power is a debate more about taxonomy than about the critical question of how s 96, when read in the context of the Constitution as a whole, is to be understood. [141] In the end, however, it will not be necessary to decide whether Magennis should be reopened or to decide an issue about the intersection of s 96 and s 51(xxxi). That will not be necessary because there has been no acquisition of property. And because it is not necessary to decide questions about the intersection of s 96 and s 51(xxxi), it is necessary not to decide them. Heydon J: 174 The legislation permitting the grant of Commonwealth funding to New South Wales was supported by s 96 read with s 51(xxxvi). Contrary to the submissions of the Solicitor-General of the Commonwealth, s 51(xxxi) applies to s 96 for reasons given above (see [31]–[45]. …). … Accordingly the key issue is whether there was an acquisition of property by New South Wales otherwise than on just terms within the meaning of s 51(xxxi).

Spencer v Commonwealth [10.240] Spencer v Commonwealth (2010) 241 CLR 118 at 133–142 [The plaintiff had restrictions placed on the clearing of vegetation on his farm under the Native Vegetation Conservation Act 1997 (NSW) and the Native Vegetation Act 2003 (NSW). He argued that these restrictions were imposed in furtherance of agreements made between New South Wales and the Commonwealth pursuant to the Natural Resources Management (Financial Assistance) Act 1992 (Cth) and the Natural Heritage Trust of Australia Act 1997 (Cth). He argued furthermore that the restrictions amounted to an acquisition of property from him otherwise than on just terms, and hence that the Commonwealth laws in question were invalid, as contrary to s 51(xxxi). The Commonwealth received summary judgement in its favour in the Federal Court, on the basis that the plaintiff “had no reasonable prospect of successfully prosecuting the proceeding” (Federal Court of Australia Act 1976 (Cth) s 31A). The plaintiff appealed unsuccessfully to the Full Court of the Federal Court, but was subsequently successful in the High Court.] French CJ and Gummow J: 133 [28] Mr Spencer alleged in his amended statement of claim the existence of a scheme or device to which the Commonwealth and the State of New South Wales were parties and which was designed to avoid the “just terms” constraint on the exercise of the legislative power of the Commonwealth under s 51(xxxi) of the Constitution. The Commonwealth laws and “arrangements” were said to have been made “for the purpose of taking property other than on just terms including the property of the Applicant”. [29] In ICM reference was made to the possibility of grants of financial assistance pursuant to s 96 of the Constitution supported by informal arrangements between governments setting out the conditions upon which such grants were made ((2009) 240 CLR 140 at 168 [37]–[38] per French CJ, Gummow and Crennan JJ). An informal arrangement, referred to in Gilbert v Western Australia ((1962) 107 CLR 494 at 505 per Dixon CJ, Kitto and Windeyer JJ), explained the alteration, after judgment had been given in Magennis, of a New South Wales statute under consideration in the latter case. That alteration “decoupled” the State statute from the Commonwealth/State agreement, which had supported the finding of invalidity in Magennis. The alteration had the result that the relevant Commonwealth legislation survived challenge in Pye. … [31] The question that arises is whether Mr Spencer’s pleading left open the possibility, requiring factual exploration and possible amendment, of an informal arrangement between the Commonwealth and the State of New South Wales conditioning the relevant Commonwealth funding upon acquisition by the State of Mr Spencer’s property rights on other than just terms. On the face of the pleading before Emmett J and the Full [10.240]

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Spencer v Commonwealth cont. Court that possibility was open, even if not fully formulated or 134 adequately particularised. Given the existence of the Commonwealth Acts and the relevant intergovernmental agreements, it is likely that there are negotiations and communications between the Commonwealth and the State of New South Wales, records of which might flesh out or cast light upon the practical operation of the Commonwealth and State funding arrangements. Documentary and electronic records of such negotiations and communications may be amenable to discovery and ancillary processes in the Federal Court which could be invoked by Mr Spencer. [32] It is not necessary for present purposes to determine whether a law of the Commonwealth, providing for grants to be made to a State under s 96 of the Constitution, or for agreements under which such grants could be made, might be characterised by reference to informal arrangements between the Commonwealth and the State as a law with respect to the acquisition of property. There are complex and difficult questions of both law and fact raised by that possibility, which was at least open on the amended statement of claim before the primary judge. … [34] In fairness to the primary judge and the Full Court, it must be acknowledged that their decisions were made before this Court delivered judgment in ICM. In the light of ICM, and even the current rather stunted version of Mr Spencer’s pleading in relation to “scheme or device”, it could not be said, for the purposes of s 31A(2), that he has no reasonable prospect of successfully prosecuting the proceedings. The pleading in that respect raised the possibility of particularisation and/or amendment. That is not to say that, even on the proposed further amended statement of claim, he has a strong case. It is 135 sufficient to say that it is not fanciful, and therefore not a case which he has no reasonable prospect of successfully prosecuting. … Hayne, Crennan, Kiefel and Bell JJ: 137 [45] In one version of his statement of claim, the applicant alleged that the impugned Commonwealth Acts formed part of what was described as “a scheme or device designed to avoid or overreach the restrictions on the exercise of law making powers … under … s 51(xxxi)”. Although expressed in different ways, this kind of allegation might be thought to underpin the applicant’s claims for declarations of invalidity. It appears to be an idea of scheme or device (Cf ICM Agriculture Pty Ltd (2009) 140 CLR 140 at 169–170 [44] per French CJ, Gummow and Crennan JJ, 199 [139] per Hayne, Kiefel and Bell JJ) that finds reflection, perhaps its foundation or elaboration, in the repeated use in the applicant’s pleading of terms like “partnership” and “joint venture”, as well as the references to express or implied agreements. But whether or not that is so, it is evident that the applicant seeks to mount a case having two principal elements. First, that there has been some arrangement or understanding made or reached between the Commonwealth and New South Wales beyond what appears in the relevant Acts and intergovernmental agreements. Second, that by or under that arrangement or understanding, some relevant connection can be drawn between the Commonwealth making a grant or grants of money to New South Wales under s 96 of the Constitution and the State exercising its legislative and other powers in the manner, and with the consequences, of which the applicant complains. The issues presented by the applicant’s claims [46] The Commonwealth does not admit that there is any scheme or device; it does not admit that there is any relevant arrangement or understanding beyond what appears in the relevant intergovernmental agreements and applicable legislation; it does not admit that there is any partnership or joint venture with the State. Two points follow. First, there is a factual question presented by the applicant’s allegations. Is there any arrangement or understanding beyond what appears in the relevant intergovernmental agreements and applicable legislation? Second, if there is, what is its constitutional relevance? 138 [47] The decisions at first instance, and in the Full Court, proceeded from the premise that the existence of any arrangement or understanding of the kind apparently relied on by the applicant was constitutionally irrelevant. But, as has been pointed out, that question was expressly reserved for future consideration by three members of the majority in ICM ((2009) 240 CLR 140 at 168 [38] per French CJ, Gummow and Crennan JJ), and cannot be regarded as foreclosed from argument. It is neither necessary nor appropriate to examine the strength of the argument. It is enough to say that 784

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Spencer v Commonwealth cont. neither the factual question that has been identified, nor the associated constitutional question, can or should be answered at this stage of the proceeding. [48] The factual question depends upon what evidence is adduced. What evidence is adduced may well be affected by what is revealed by further interlocutory processes in the proceeding. The constitutional question may be affected by, even depend upon, the resolution of the factual question. Even if it is not directly affected by what particular facts are found, it is not a question suitable for determination on a summary judgment application. … Heydon J: 142 [61] On 28 August 2008, when Emmett J dismissed the applicant’s proceedings, Pye v Renshaw (1951) 84 CLR 58 was thought to be an obstacle to their success. The same position applied on 24 March 2009, when the Full Court of the Federal Court of Australia dismissed an appeal against the orders of Emmett J. But on 9 December 2009, ICM Agriculture Pty Ltd v Commonwealth (2009) 240 CLR 140 was decided. A majority of this Court concluded that, notwithstanding Pye v Renshaw, the legislative power of the Commonwealth conferred by s 96 and s 51(xxxvi) of the Constitution 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 ((2009) 240 CLR 140 at 165–170 [31]–[46] and 206 [174]). Further, three members of the Court placed a question mark over the validity of legislation relating to an “informal arrangement” providing for Commonwealth funding to a State if it acquires property on unjust terms ((2009) 240 CLR 140 at 168 [37]–[38]). The applicant has pleaded facts which might attract a conclusion favourable to him if that question is answered against validity. Discovery of documents might assist him to establish those pleaded facts. [62]… [I]t is clear that had the courts below been aware – which obviously they could not have been – of what was to be said in ICM Agriculture Pty Ltd v Commonwealth, they would not have viewed an order under s 31A(2) dismissing proceedings as appropriate. … According to the High Court in Teori Tau v Commonwealth (1969) 119 CLR 564 at 570 the power to make laws for the government of the Territories in s 122 is not subject to s 51(xxxi) because the latter power is concerned “with what may be called federal legislative powers as part of the distribution of legislative power between the Commonwealth and the constituent States”. The judgments of four members of the High Court in Newcrest Mining (WA) Ltd v Commonwealth (1997) 190 CLR 513, however, have undermined Teori Tau.

Newcrest Mining v Commonwealth [10.250] Newcrest Mining (WA) Ltd v Commonwealth (1997) 190 CLR 513 at 594–613, 568–569 Gummow J: 594 By its very terms, par (xxxi) appears to draw in all powers of the Parliament to make laws, from whatever source in the Constitution they are derived. The terms of the acquisition power refer, for example, to an acquisition associated with the exercise of the defence power in s 51(vi) as much as to an acquisition related to the exercise of legislative power under s 122. … [P]ar (xxxi) confers a power “for any purpose in respect of which the Parliament has power to make laws” and one such purpose is found in s 122 (emphasis added). … 597 Section 122 empowers the Parliament to make laws “for the government of any territory”. The term “for”, to adapt the words of Wilson J in Attorney-General (Vic); Ex rel Black v Commonwealth (1981) 146 CLR 559 at 653 in construing s 116 of the Constitution, speaks of the purpose of the law in terms of the end to be achieved, namely the government of the territory in question. This identifies a legislative “purpose” within the meaning of par (xxxi). … The basic proposition is that each provision of the Constitution, including s 122, is to be read with other provisions in the same instrument. Accordingly, and at least prima facie, par (xxxi) of 598 s 51 and s 122 should be read together. Section 122 is not to be torn from the constitutional fabric. … 600 I conclude (i) that, upon its proper construction, in empowering the Parliament to make laws “for” the government of any territory, s 122 identifies a purpose, in terms of the end to be achieved, and (ii) that, within the meaning of par (xxxi), s 122 states a purpose in respect of which the Parliament has power to make laws. The question then [10.250]

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Newcrest Mining v Commonwealth cont. becomes whether there is either expressed or made manifest by the words or content of the grant of power in s 122 sufficient reason to deny the operation of the constitutional guarantee in par (xxxi). There is none. First, a construction of the Constitution which treats s 122 as disjoined from par (xxxi) produces “absurdities and incongruities” (Lamshed v Lake (1958) 99 CLR 132 at 144, per Dixon CJ). This is so particularly with respect to a territory such as the Northern Territory, the area of which, at federation, was within a State. As is made clear in covering cl 6 of the Constitution, upon federation what was then identified as “the northern territory of South Australia” was included within an “Original State” and thus was part 601 of the Commonwealth at its establishment (the steps by which the Northern Territory was established are identified in Lamshed v Lake (1958) 99 CLR 132 at 140–141). The Constitution, notably s 111 (Section 111 of the Constitution states: “The Parliament of a State may surrender any part of the State to the Commonwealth; and upon such surrender, and the acceptance thereof by the Commonwealth, such part of the State shall become subject to the exclusive jurisdiction of the Commonwealth.”), should not readily be construed as producing the result that the benefit of the constitutional guarantee with respect to the acquisition of property in what became the Northern Territory was lost. … Secondly, many of the powers conferred upon the Parliament by s 51 (such as par (xxix)) will be susceptible of exercise in respect of matters and things in or connected with the territories, and on its face par (xxxi) will apply to the exercise of these powers. The Conservation Act itself provides an example. One of the objects in making provision for the establishment of parks under s 7 thereof is the facilitation of the carrying out by Australia of obligations, or the exercise by Australia of rights, under agreements between Australia and other countries (s 6(1)(e)). … It is to give to the constitutional guarantee a capricious operation to exclude from it so much of the law which is in question in the particular case as is or might have been concurrently supported by s 122. Thirdly, as already indicated, the criterion of validity of a law made in reliance upon s 122 is that it be for the government of a territory. A law may meet that criterion without operating solely upon property situated in that territory. … [Section] 122 authorises the Parliament to make laws the operation of which extends to the States. Further, it would appear that the power of the Parliament to establish 602 territorial legislatures extends to empowering such a legislature itself to make laws with extraterritorial operation, at least within Australia (Traut v Rogers (1984) 70 FLR 17; 27 NTR 2). It would be a curious result if just terms were constitutionally unnecessary for the compulsory acquisition of land in a city in one of the States for the purposes of a tourist bureau for a territory. The owners of property in a State would be deprived of the constitutional guarantee where the property was acquired for the purpose of the government of a territory … Fourthly, the constitutional guarantee … includes choses in action and other incorporeal interests (Mutual Pools & Statt Pty Ltd v Commonwealth (1994) 179 CLR 155 at 172, 184–185, 194–195, 222.). The situs of such interests may be neither fixed nor, at any given time, readily susceptible of identification. … In addition, incorporeal property, such as a patent, design or registered trade mark, which exists by virtue of a grant from the Commonwealth cannot be regarded as locally situate in any particular State or territory of the Commonwealth. Rather, such property is locally situate in Australia. … Accordingly, the constitutional guarantee cannot be coherently construed in a universe of legal discourse which contains a dichotomy between situation of property in a State and situation of property in a territory. 603 The above considerations indicate that the legislative power conferred by s 122 is not immunised from the constitutional guarantee. … 613 Leave to reopen Teori Tau is sought by the appellants who are supported in this by the Northern Territory. Leave should be given.… Where the question at issue relates to an important provision of the Constitution which deals with individual rights, such as s 51(xxxi) or s 117, the “Court has a responsibility to set the matter right” (Street v Queensland Bar Association (1989) 168 CLR 461 at 489, per Mason CJ; Brennan J at 518–519; Toohey J at 560; and McHugh J at 588 spoke to similar effect. See also Commonwealth v Cigamatic Pty Ltd (in liq) (1962) 108 CLR 372 at 377. per Dixon CJ). Ultimately, it is the Constitution itself which must provide the answer (Street v Queensland Bar Association (1989) 168 CLR 461 at 549, per Dawson J). [Gaudron and Kirby JJ agreed with Gummow J on this point. Gaudron J also offered an additional, narrower reason for finding s 51(xxxi) to be applicable in this case:] 786

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Newcrest Mining v Commonwealth cont. Gaudron J: 568 It is clear, as the respondents contend in this case, that a law may have more than one purpose. Even if s 51(xxxi) is construed as referring to “any purpose in respect of which the Parliament has power to make laws [under this section]”, a law which has a purpose of that kind clearly falls within its terms whether or not it is also a law “for the government of [a] territory” (s 122). It is one thing to read down s 51(xxxi) so that it does not apply to a law enacted pursuant to s 122 of the Constitution. It is another to treat it as not applying to a law which has two purposes, one of which falls within the terms of s 51(xxxi) and the other of which is for the government of a Territory. That is to rewrite the terms of s 51(xxxi), not to read them down. … On the assumption that par (xxxi) is to be read down so that it applies only to laws enacted under s 51, its terms, even when strictly construed, extend to a law a purpose of which is one “in respect of which the Parliament has power to make laws [under s 51]”. In PJ Magennis Pty Ltd v Commonwealth (1949) 80 CLR 382 at 423 Williams J said of par (xxxi): 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. A purpose of the Conservation Act is the performance of Australia’s international obligations; that is a purpose in respect of which the Parliament has power to make laws under s 51(xxix); par (xxxi) operates to fetter the implementation of that purpose by means of a 569 law with respect to the acquisition of property (Mutual Pools & Staff Pty Ltd v Commonwealth (1994) 179 CLR 155 at 188–89, per Deane and Gaudron JJ). The Commonwealth cannot enact laws for a purpose which falls within s 51 without the condition which attaches by par (xxxi) … [Toohey, Gummow and Kirby JJ agreed with this aspect of Her Honour’s judgment.]

SECTION 80 Right to trial by jury [10.260] Section 80 of the Commonwealth Constitution provides as follows: The trial on indictment of any offence against any law of the Commonwealth shall be by jury, and every such trial shall be held in the State where the offence was committed, and if the offence was not committed within any State the trial shall be held at such place or places as the Parliament prescribes.

The traditional interpretation of this section was neatly summed up by Higgins J in R v Archdall and Roskruge; Ex parte Carrigan and Brown (1928) 41 CLR 128 as follows: “[I]f there be an indictment there must be a jury; but there is nothing to compel procedure by indictment.” Much earlier on, in R v Bernasconi (1915) 19 CLR 629, Isaacs J had said: “If a given offence is not made triable on indictment at all, then s 80 does not apply.” The evisceration of s 80 engendered considerable disquiet. In R v Federal Court of Bankruptcy; Ex parte Lowenstein (1938) 59 CLR 556 at 582, Dixon and Evatt JJ observed: There is high authority for the proposition that “the Constitution is not to be mocked”. A cynic might, perhaps, suggest the possibility that sec 80 was drafted in mockery; that its language was carefully chosen so that the guarantee it appeared on the surface to give should be in truth illusory. No court could countenance such a suggestion.

However, in Kingswell v The Queen (1985) 159 CLR 264 Gibbs CJ, Wilson and Dawson JJ said (at 276–277): The fact that s 80 has been given an interpretation which deprives it of much substantial effect provides a reason for refusing to import into the section restrictions on the legislative power [10.260]

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which it does not express. It has been held that s 80 does not mean that the trial of all serious offences shall be by jury; the section applies if there is a trial on indictment, but leaves it to the Parliament to determine whether any particular offence shall be tried on indictment or summarily. This result has been criticized, but the Court has consistently refused to reopen the question and the construction of the section should be regarded as settled.

Despite the reiteration of the narrow interpretation of s 80 on a number of occasions, this approach was criticised by Murphy J in Li Chia Hsing v Rankin (1978) 141 CLR 182 at 198. In Kingswell v The Queen (1985) 159 CLR 264, Deane J wrote “a powerful, closely reasoned and at times passionate dissent from the orthodox view of s 80 which the majority sanctioned” (Michael Coper, Encounters with the Australian Constitution (CCH, Sydney, 1987), p 304.)

Kingswell v The Queen [10.270] Kingswell v The Queen (1985) 159 CLR 264 at 298–319 Deane J: 298 The guarantee of s 80 of the Constitution was not the mere expression of some casual preference for one form of criminal trial. It reflected a deep-seated conviction of free men and women about the way in which justice should be administered in criminal cases. That conviction finds a solid basis in an understanding of the history and functioning of the common law as a bulwark against the tyranny of arbitrary punishment. In the history of this country, the 299 transition from military panel to civilian jury for the determination of criminal guilt represented the most important step in the progress from military control to civilian self-government. … 307 … The relevant provision of s 80 is, in terms, confined to the trial on indictment of any alleged offence against a law of the Commonwealth. For practical purposes, any effective operation of that provision is as a restraint upon the legislative powers of the Commonwealth Parliament by precluding any legislative provision that such a trial should be otherwise than by jury. To treat the notion of a “trial on indictment” in s 80 as involving the absence of any applicable statutory procedure providing for immediate determination by justices or magistrates (or a judge) would mean that the Parliament could effectively avoid the primary provision of s 80 by providing that the trial of any designated offence should be by way of such statutory procedure. The consequence would be that s 80 would not only contain no effective guarantee of trial by jury. What is worse, the designated method of avoiding the section’s ostensible guarantee of trial by jury in the case of grave offences would be by way of legislative provision that such offences be dealt with by a statutory summary procedure devised to deal only with less serious offences: see Munday v Gill ((1930) 44 CLR 38 at 86), quoting Blackstone. As Dixon and Evatt JJ commented in Lowenstein ((1938) 59 CLR at 582), there is high authority for the proposition that the Constitution is not to be so mocked. 308 In these circumstances, one would need to identify convincing legal reasoning or direct authority to justify construing the words “on indictment” as introducing to the phrase “trial on indictment” in s 80 an essential negative element that the trial be not by way of “summary proceedings”. There is no convincing legal reasoning to justify such a reading of s 80. To the contrary, as Dixon and Evatt JJ demonstrated in their joint judgment in Lowenstein ((1938) 59 CLR at 582–583), the ordinary principles of constitutional construction support the conclusion that the words “trial on indictment” in s 80 should be construed by reference to substance rather than mere procedure or form and as referring to the elements which will, of themselves, suffice, as a matter of substance, to characterize a proceeding as a trial on indictment for the purposes of s 80. The most obvious of those elements is that implicit in the notion of a “trial … of [an] offence”, namely, that the proceedings should be concerned to determine, for the purposes of the law, whether or not a person is guilty of some offence of which he stands accused. In Lowenstein, Dixon and Evatt JJ assumed the existence of that first element and proceeded ((1938) 59 CLR 556 at 583) to identify two further elements which would, if present, suffice to impart to a “trial … of [an] offence against [a] law of the Commonwealth” the character of a “trial on indictment” for the purposes of s 80: … the first of them would be seen to be that some authority constituted under the law to represent the public interest for the purpose took the responsibility of the step which put the 788

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Kingswell v The Queen cont. accused on his trial; the grand jury, the coroner’s jury or the coroner, the law officer or the court. A second element, we think, would be found in the liability of the offender to a term of imprisonment or to some graver form of punishment. We should not have taken the view that s 80 was intended to impose no real restriction upon the legislative power to provide what kind of tribunal shall decide the guilt or innocence on a criminal charge. Subject to one qualification, the first of those additional elements of a trial on indictment identified by Dixon and Evatt JJ in Lowenstein ((1938) 59 CLR at 583) would seem clear enough. The trial must be initiated by some step taken by the Crown or by some instrumentality or agent of government such as a magistrate or justice on a committal hearing or a coronial inquest, a director of prosecutions or a law enforcement officer. The qualification is that it is unnecessary to consider here whether this first additional element would be more accurately and more simply stated as being that the 309 trial be instituted by a charge brought by the State or by some agency or person acting on behalf of or with the authority of the State with the result that the relevant class would include any individual exercising a statutory right to prosecute another citizen for an offence against the State. The second additional element – the liability of the offender to a term of imprisonment – is not so clear. It is true that, by 1900, there was a well-established practice that some less serious offences, often described as “summary” as distinct from “indictable” offences, should be punishable pursuant to special statutory provisions providing for summary (in the sense of immediate) trial by justices or magistrates. It would also seem plain enough that the framers of the Constitution used the words “on indictment” in s 80 to ensure that the guarantee of trial by jury was not applicable to the type or class of less serious offences which were generally seen, in the last decade of the nineteenth century, as appropriate to be dealt with by justices or magistrates. The borderline between such less serious or summary offences and other more serious or indictable felonies or misdemeanours had not, however, customarily been drawn on the basis suggested by their Honours, namely, that the less serious or “non-indictable” offences were restricted to those which were not punishable by any term of imprisonment at all. An examination of the legislation in force in England and the Australian Colonies at the time of Federation discloses that, subject to some exceptions (cf, eg, Minor Offences Procedure Act 1869 (SA), s 3, dealing with the consent jurisdiction of magistrates), the less serious offences punishable summarily before justices or magistrates were restricted to offences for which the maximum punishment was, when they were so tried, a term of imprisonment of not more than one year. This general boundary between the less serious offences which were appropriate to be dealt with summarily by justices or magistrates and the more serious offences which were not appropriate to be so dealt with was subsequently accepted in the first Commonwealth Crimes Act which was enacted in 1914 and which provided (s 12(3)) that a Court of Summary Jurisdiction might not impose a longer period of imprisonment than one year in respect of any one offence against that Act (but cf Acts Interpretation Act 1904 (Cth), s 4: not more than six months). The distinction between the less serious – or, to use a common term which was adopted by Sir Samuel Griffith in the Queensland Criminal Code (see his letter dated 29 October 1897 accompanying the draft Code and Queensland Criminal Codes 3 of the Code, in Wilson and Graham (eds), The Criminal Code of Queensland (1901), pp xi, 31), the “simple” – offences appropriate to be dealt with summarily by justices or magistrates and the more 310 serious offences which were not appropriate to be so dealt with was well established in 1901: see, eg, Black Comm, Book IV, pp 279–280. Indeed, it is possible to point to many instances of nineteenth century legislation requiring justices or magistrates to determine whether a particular charge was “fit” to “be disposed of summarily”: see, eg, Hall v Braybrook ((1956) 95 CLR 620 at 630–632, 649–650). Obviously, there are elements of subjective judgment and discretion involved in determining whether a particular alleged offence falls into the less serious category which is capable of being appropriately dealt with by justices exercising summary jurisdiction. Those elements of subjective judgment and discretion did not and do not, however, preclude that question from being susceptible of judicial determination. In my respectful view, Dixon and Evatt JJ were correct in their conclusion that there lies at the heart of the concept of “trial on indictment” in s 80 the notion of the trial of a “serious offence”. I am, however, unable to accept their Honours’ view that the criterion of what constitutes, for relevant purposes, a [10.270]

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Kingswell v The Queen cont. serious offence is that it be punishable by any term of imprisonment at all. In the light of the foregoing, it appears to me that the correct criterion of what constitutes a serious offence is that it not be one which can appropriately be dealt with summarily by justices or magistrates. Within the limits of those offences which are capable of being appropriately so dealt with, the question whether a particular offence should, as a matter of legislative policy, actually be dealt with summarily by justices or magistrates is a matter for the Parliament. The question arises whether the identification of the limits beyond which a charge cannot properly be seen as fit to be dealt with as a summary offence is a matter of legislative policy in the discretion of the Parliament or is a matter for judicial determination by the courts. If it is a matter for the courts, the provisions of s 80 will extend to ensure that a person accused by the Commonwealth or an agency of the Commonwealth of what is, in the relevant sense, properly to be regarded as a “serious offence” against a law of the Commonwealth enjoys an effective constitutional right of trial by jury. If it is a matter for the Parliament, s 80 will afford such a person no effective protection at all. It has already been seen that the question whether a particular offence is, for the purposes of s 80, a “serious” one in the relevant sense is susceptible of judicial determination. Plainly, when two constructions are available, the construction which will give the guarantee of trial by jury in s 80 “a real operative effect” is to be 311 preferred to that which would make that guarantee illusory in the sense that it would represent no effective restraint upon Commonwealth legislative power: cf, eg, Lowenstein ((1938) 59 CLR at 582). That being so, it follows as a matter of principle that the question whether a particular offence is, for the purposes of s 80, a serious one in the sense that it is not capable of appropriately being dealt with summarily by justices or magistrates is, ultimately, a question of law to be determined by the courts. … 318 … The conclusion to which I have finally come is that, notwithstanding the contrary trend in subsequent judgments in this Court, the views expressed by Dixon and Evatt JJ in Lowenstein, as qualified in the manner which I have mentioned, should be accepted 319 as a correct statement of the effect of the reference to “trial on indictment” in s 80 of the Constitution. On that construction, the guarantee of the section is applicable in respect of any trial of an accused charged with an offence against a law of the Commonwealth in circumstances where the charge is brought by the State or an agency of the State and the accused will, if found guilty, stand convicted of a “serious offence”. As has been said, a particular alleged offence will, for the purposes of characterizing a particular trial as a “trial on indictment”, be a “serious offence” if it is not one which could appropriately be dealt with summarily by justices or magistrates in that conviction will expose the accused to grave punishment. It is unnecessary, for the purposes of the present case, to seek to identify more precisely the boundary between offences which are not and offences which are capable of being properly so dealt with. I have, however, indicated the tentative view that that boundary will ordinarily be identified by reference to whether the offence is punishable, when prosecuted in the manner in which it is being prosecuted, by a maximum term of imprisonment of more than one year. The High Court has now attempted to give some efficacy to the guarantee in s 80. In Brown v The Queen (1986) 160 CLR 171 the High Court was faced with the question whether a person who is indicted for an offence against a law of the Commonwealth can elect to be tried by judge alone. The fundamental issue as described by Gibbs CJ is: … whether s 80 contains an imperative and indispensable requirement that the trial must be by jury whenever the accused is charged on indictment with an offence against a law of the Commonwealth, or whether the section is intended to secure for the benefit and protection of any person so charged a right or privilege which the accused may waive if the law governing the conduct of the trial permits it.

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Brown v The Queen [10.280] Brown v The Queen (1986) 160 CLR 171 at 201–202, 178–180 [In the case, Brown, who had been charged with an indictable offence under the Customs Act 1901 (Cth), had elected to be tried by a judge alone in accordance with the right conferred by s 7(1) of the Juries Act 1927 (SA), as amended. Section 7(1) provides as follows: (1) Subject to this section, where, in a criminal inquest before the Supreme Court or a District Criminal Court (a) the accused elects, in accordance with the rules of court, to be tried by judge alone; and (b) the presiding judge is satisfied that the accused, before making the election, sought and received advice in relation to the election from a legal practitioner, the inquest shall proceed without a jury. Brown was convicted after a trial by jury after the trial judge had ruled that s 80 precluded such an election in the case of an indictable offence. Before his appeal to the Full Court of the Supreme Court was heard, so much of the cause pending in the Full Court which concerned the effect of s 80 was, pursuant to s 40(1) of the Judiciary Act 1903, removed to the High Court. The High Court in a 3:2 majority (Brennan, Deane and Dawson JJ, Gibbs CJ and Wilson J dissenting) held that s 80 did have the effect of precluding the appellant from electing under State law to be tried by a judge alone.] Deane J: 201 The primary provision of s 80 of the Constitution is not framed in terms of a mere conferral of a privilege. Its words are mandatory. Its command is unqualified. “The trial on indictment of any offence against any law of the Commonwealth shall be by jury” (emphasis added). To interpret that absolute requirement as consistent with the notion that such a trial does not have to be by a jury at all if a particular accused thinks he might do better before a judge alone would be to refuse to give effect to the plain meaning of unambiguous words. In my view, there is nothing in the content of the section or in the authorities which provides any warrant for such a refusal. It is true that the peremptory prescription of trial by jury as the method of trial on indictment of any offence against any law of the Commonwealth represents an important constitutional guarantee against the arbitrary determination of guilt or innocence. That constitutional guarantee is, however, for the benefit of the community as a whole as well as for the benefit of the particular accused. As Griffith CJ pointed out in R v Snow ((1915) 20 CLR 315 at 323), the requirement of s 80 is “a fundamental law of the Commonwealth” which should be prima facie construed as “an adoption of the institution of ‘trial by jury’ with all that was connoted by that phrase in constitutional law and in the common law of England”. The adoption of that institution reflected “a fundamental decision about the exercise of official power” (see Duncan v Louisiana (391 US 145 at 156 (1968)) or, to repeat words I used in Kingswell v The Queen ((1985) 159 CLR 264 at 298), “a deep-seated 202 conviction of free men and women about the way in which justice should be administered in criminal cases”, namely that, regardless of the position or standing of the particular alleged offender, guilt or innocence of a serious offence should be determined by a panel of ordinary and anonymous citizens, assembled as representative of the general community, at whose hands neither the powerful nor the weak should expect or fear special or discriminatory treatment. That essential conception of trial by jury helps to ensure that, in the interests of the community generally, the administration of criminal justice is, and has the appearance of being, unbiased and detached. It fosters the ideal of equality in a democratic community which Cardozo J identified in the course of an eloquent tribute to Oliver Wendell Holmes: “He has vividly perceived … that stronger even than the love of liberty is the passion for something different, different in name and yet at its core the same, the passion for equality”: Mr Justice Holmes, Harvard Law Review, Vol 40 (1931), p 687. The institution of trial by jury is also a source of other benefits to the community as a whole. In Kingswell ((1985) 159 CLR 264 at 301–302), I endeavoured to identify the more important of them. It is unnecessary that I repeat what I there said. It suffices to say that the advantages of trial by jury to the community generally serve to reinforce what the plain words of the Constitution convey, namely, that the general prescription of trial by jury as the method of trial on indictment of any offence against any law of the Commonwealth constitutes an element of the structure of government and distribution of judicial power which were adopted by, and [10.280]

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Brown v The Queen cont. for the benefit of, the people of the federation as a whole. To construe the fundamental law of s 80 as involving no more than the mere conferral of a privilege would be to distort the whole by confining attention to a single aspect. If one turns to authority, one finds that, without any exception at all, the relevant statements in judgments in this Court are inconsistent with the view that the adoption in the Constitution of the institution of trial by jury should be reduced to the mere status of a privilege which can be waived by an accused. Gibbs CJ: 178 The argument that the requirement is indispensable and cannot be waived is an obvious enough one. The words of s 80 appear to be both clear and mandatory; read literally, they appear to mean that “if there be an indictment, there must be a jury”, as Higgins J said in R v Archdall and Roskruge; Ex parte Carrigan and Brown ((1928) 41 CLR 128 at 139), and they do not expressly admit any exception to that rule. However, it has been a principle of statutory interpretation ever since the time of Sir Edward Coke – expressed in the maxim quilibet potest renunciare juri pro se introducto – that any person can waive a statutory provision introduced entirely for his or her own benefit: see, eg, Wilson v McIntosh ([1894] AC 129 at 133) and Toronto Corporation v Russell ([1908] AC 493 at 500), and, more recently, Korponey v Attorney-General (Canada) ((1982) 132 DLR (3d) 354 at 362). If, on the other hand, the provision is enacted for the benefit of the public, a private individual cannot waive it: Davies v Davies ((1919) 26 CLR 348 at 355). The same principle applies to the interpretation of constitutional enactments, and perhaps with even greater force. A constitutional guarantee restricts the power of the legislature, and may last indefinitely, and a guarantee given for the benefit of a class of individuals, such as accused persons, might, in an unforeseen set of circumstances, cause the members of that class hardship rather than benefit if it prevented an accused person, whom it was intended to protect, from exercising some other right; in those circumstances, what was contrived for the protection of the accused would be turned into fetters, to adapt the words of 179 Frankfurter J in Adams v United States; Ex rel McCann (317 US 269 at 279 (1942)). The decisions of the courts in the United States and Canada, to which reference will later be made, have recognized that a constitutional guarantee may be waived by a person for whose benefit it was intended. It then becomes necessary to consider the purpose which the framers of the Constitution had, or must be supposed to have had, in including the provisions of s 80 in the Constitution. The requirement that there should be a trial by jury was not merely arbitrary or pointless. It must be inferred that the purpose of the section was to protect the accused – in other words, to provide the accused with a “safeguard against the corrupt or over-zealous prosecutor and against the compliant, biased, or eccentric judge”: Duncan v Louisiana (391 US 145 at 156 (1968)). Those who advocate the retention of the jury system almost invariably place in the forefront of their argument the proposition (sometimes rhetorically expressed but not without some truth) that the jury is a bulwark of liberty, a protection against tyranny and arbitrary oppression, and an important means of securing a fair and impartial trial. It is true that the jury system is thought to have collateral advantages (eg, it involves ordinary members of the public in the judicial process and may make some decisions more acceptable to the public) but the framework of s 80, which not only requires trial by jury but also fixes the place of trial, supports the view that the object of the section was to achieve the principal and obvious purpose of trial by jury – the protection of the accused. Section 80 was modelled on Art III, s 2(3) of the United States Constitution, which provides: The Trial of all Crimes, except in cases of impeachment, shall be by Jury; and such Trial shall be held in the State where the said Crimes shall have been committed; but when not committed within any State, the Trial shall be at such Place or Places as the Congress may by Law have directed. In Singer v United States (380 US 24 at 31 (1965)), Warren CJ said of that provision that it “was clearly intended to protect the accused from oppression by the Government …”. This view was repeated in Duncan v Louisiana (391 US at 155 (1968)). This also was the purpose of s 80. The section was inserted for the benefit of persons accused of offences against the law of the Commonwealth and not for any wider public interest. Nor could it be suggested that it would be contrary to public policy to allow accused persons to waive the right to trial by jury granted for their own benefit, at least in cases where 792

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Brown v The Queen cont. the waiver was made freely, without improper pressure or influence and with full 180 knowledge of the right that was waived. Of course, no question of waiver could arise unless the law governing the procedure at the trial permitted it. “The ability to waive a constitutional right does not ordinarily carry with it the right to insist on the opposite of that right” (Singer v United States (380 US at 34–35 (1965)); an accused could insist on trial by judge alone only if, after the constitutional right had been waived, the law made provision for that course. Section 7 of the Juries Act 1927 does permit the accused to elect for trial by judge alone, and for the reasons given I conclude that the provisions of s 80 do not prevent an accused person from waiving the constitutional right to trial by jury and making an election under s 7.

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1.

Notes&Questions

It was clearly acknowledged by the court that s 80 was modelled on Art III, s 2, cl 3 of the Constitution of the United States of America. The American provision reads as follows: The trial of all Crimes, except in Cases of Impeachment, shall be by Jury; and such Trial shall be held in the State where the said Crimes shall have been committed; but when not committed within any State, the Trial shall be at such place or places as the Congress may by Law have directed.

Article III, s 2, cl 3 has been subject to a number of decisions, the overall view of which was neatly summed up by Brennan J (at 194–195) as follows: Article III s 2 has been construed not as a mandatory provision requiring trial by jury in all cases falling within its terms but as guaranteeing a right to trial by jury which, being a right for the benefit of an accused may be waived by him in the exercise of a free and intelligent choice provided the waiver is approved by the responsible judgment of the trial court.

Gibbs CJ and Wilson J found the American decisions “persuasive”. On the other hand, the majority judges regarded the analogy with the American construction of Art III, s 2 as a “false” one. They regarded the presence of the Sixth Amendment as crucial to the reasoning in the American cases. The Sixth Amendment to the Constitution of the United States provides, inter alia, as follows: In all criminal prosecutions, the accused shall enjoy the right to a speedy and public trial, by an impartial jury of the State and district wherein the crime shall have been committed, which district shall have been previously ascertained by law.

2.

The absence of a provision in the Commonwealth Constitution equivalent to the Sixth Amendment would require, in the view of the majority judges, a different reading of s 80, but in the opinion of the minority judges, such an absence was of no consequence. Gibbs CJ and Wilson J construed s 80 as a provision which had been inserted into the Constitution for the benefit of the accused and hence could be waived by him. The contrary stand was taken by the majority judges. Deane J (at 201) said: “That constitutional guarantee is, however, for the benefit of the community as a whole as well as for the benefit of the particular accused.” The strength of the majority judges’ feelings about trial by jury can be illustrated by the following ringing statements of Brennan J (at 197): Trial by jury is not only the historical mode of trial for criminal cases prosecuted on indictment; it is the chief guardian of liberty under the law and the community’s guarantee of sound administration of criminal justice … It is the fundamental [10.290]

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institution in our traditional system of administering justice. Section 80 of the Constitution entrenches the jury as an essential constituent of any court exercising jurisdiction to try a person charged on indictment with a federal offence.

3.

4.

In Spratt v Hermes (1965) 114 CLR 226, Barwick CJ (at 244) said of s 80: “What might have been thought to be a great constitutional guarantee has been discovered to be a mere procedural provision.” Brown v R can be viewed as a move by the majority judges to redress the situation. Nevertheless, this attempt is not fully meaningful unless the High Court reconsiders its earlier view that s 80 does not compel the Commonwealth Parliament to make any offence triable on indictment. In Cheatle v The Queen (1993) 177 CLR 541, the High Court said (at 562): [H]istory, principle and authority combine to compel the conclusion that s 80’s guarantee of trial by jury precludes a verdict of guilty being returned in a trial upon indictment of an offence against a law of the Commonwealth otherwise than by the agreement or consensus of all the jurors.

The court concluded that the requirement of unanimity “is an essential feature of the trial by jury guaranteed by s 80” (at 552). The court held that s 57 of the Juries Act 1927 (SA) insofar as it authorised the return of a majority verdict of guilty in the trial on an indictment of an offence against the law of the Commonwealth was contrary to s 80. The High Court also said (at 560): 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 of the State.

5.

6.

In Katsuno v The Queen (1999) 199 CLR 40, the High Court held that the practice of “jury vetting” was not in conflict with the essential features of “trial by jury” under s 80. In Brownlee v The Queen (1997) 41 NSWLR 139, the Court of Criminal Appeal of the Supreme Court of New South Wales held that the Jury Act 1977 (NSW) to the extent that it reduced a jury panel from 12 to 10 was not in violation of s 80 of the Commonwealth Constitution. Grove J, with whom Bruce J and Cooper AJ concurred, said (at 145): I find no historical or legal warrant for concluding that trial by jury inheres a concept that the body must consist of an immutable number of twelve persons. The essential is judgment by one’s peers rather than judgment by necessarily twelve of one’s peers.

It was further held by the court that the provision in the Jury Act 1977 (NSW) which permitted the jury in a criminal proceeding “to separate at any time after they retire to consider their verdict” (if so ordered by the court) was not inconsistent with the meaning of “trial by jury” in s 80. The decision of the New South Wales Court of Criminal Appeal was affirmed by the High Court: Brownlee v R (2001) 207 CLR 278. Gaudron, Gummow and Hayne, in a joint judgment, added the following reservation (at 304 [73]): [A] real question arises as to whether a trial on indictment for an offence against a law of the Commonwealth may, consistently with s 80 of the Constitution, be continued where a jury of twelve has been reduced below ten …

Another interesting aspect of the High Court decision is the conflicting views regarding the proper approach to the constitutional interpretation of s 80 between Kirby J, on the 794

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one hand, and the other members of the court (Gleeson CJ and McHugh J jointly, Gaudron, Gummow and Hayne JJ jointly, Callinan J). Kirby J stated that the phrase “trial by jury” was to be construed by reference, not to the intention of the constitutional framers in 1900, but to contemporary Australian standards. See B M Selway, “Anthony John Brownlee and Section 80” (2002) 13 Public Law Review 7. James Stellios in his article “The Constitutional Jury – a Bulwark of Liberty?” (2005) 27 Sydney Law Review 1 at 113–142, asserted that “a broad cohesive vision of s 80 continues to elude the High Court”. He (at 114) puts forward the view that “s 80 is a provision that facilitates and regulates the exercise of Commonwealth judicial power.” Do you think that this view is better than a “rights-protective” vision of s 80? (See further J Stellios, “The High Court’s Recent Encounters with Section 80 Jury Trials” (2005) 29(3) Criminal Law Journal 139). In Alqudsi v The Queen (2016) 90 AJLR 711 French CJ dissented from the rest of the High Court in deciding that the case of Brown in preventing an accused from waiving the operation of s 80 should not be followed on the basis that “the principle which underpinned that ruling was too broad, imposing an unwarranted rigidity upon the construction of s 80” (at 733 [76]). The Chief Justice noted that, “if the accused applies for trial by judge alone and the court regards it as in the interests of justice to so order, both the institutional and rights protective dimensions of s 80 would be respected”. The majority of the Court (Kiefel, Bell & Keane JJ in a joint judgment at 740 [115], Nettle & Gordon JJ in a joint judgment at 756 [214]- [216] and Gageler J at 745 [141]) refused to re-open the decision in Brown finding that if s 80 applies its operation cannot be waived.

SECTION 116 General observations [10.300] Section 116 provides: The Commonwealth shall not make any law for establishing any religion, or for imposing observance, or for prohibiting the free exercise of any religion, and no religious tests shall be required as a qualification for any office or public trust under the Commonwealth.

Section 116 was described by Murphy J in Attorney-General (Vic); Ex rel Black v Commonwealth (The DOGS Case) (1981) 146 CLR 559 at 623 as “a great constitutional guarantee of freedom of and from religion”. Section 116 limits the legislative capacity of the Commonwealth Parliament, but in Kruger v Commonwealth (1997) 190 CLR 1 the High Court was divided on the question whether s 116 limits s 122. Section 116 corresponds to the following provisions of the United States Constitution: First Amendment: “Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof …”

Article VI, s 3: [N]o religious test shall ever be required as a qualification to any office or public trust under the United States.

The evolution of s 116 is described in the following brief historical note in the Final Report of the Constitutional Commission (1988), Vol 1, p 610: Although section 116 restricts only the Parliament of the Commonwealth, it appears in Chapter V of the Constitution which is headed “The States”. The reason is that the original clause in the 1891 draft Constitution applied only to the States. This prohibition against State legislation was omitted at the Melbourne session of the Convention in 1898, on the ground that it was an unwarranted invasion of the legislative powers of the future States. Henry Bournes [10.300]

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Higgins, Victorian delegate and future High Court judge, argued successfully for the restriction on federal power. He maintained, on the basis of what he said was American experience, that without a suitable restriction on the power of the Commonwealth, the mention of “Almighty God” in the preamble might result in the High Court holding that the Commonwealth could make laws about religion.

In Attorney-General (Vic); Ex rel Black v Commonwealth (The DOGS Case) (1981) 146 CLR 559, Barwick CJ remarked (at 577): [T]he language of the section is not in the slightest affected by the position in which the section is placed in the text of the Constitution: nor can its meaning be determined thereby. To suggest that, because of that placement, it should be read as in any sense a direction to the States is to deny effect to simple and direct English. The section plainly says “The Commonwealth shall not” and its final words deal only with any office or public trust under the Commonwealth.

Establishing any religion [10.310] One of the concepts embodied in s 116 is the prohibition placed upon the passage of

Commonwealth law for establishing any religion. The scope of the establishment clause was considered by the High Court in Attorney-General (Vic); Ex rel Black v Commonwealth.

The DOGS Case [10.320] Attorney-General (Vic); Ex rel Black v Commonwealth (1981) 146 CLR 559 at 651–655, 582–612 [The Attorney-General of the State of Victoria brought an action on the relation of a number of Australian citizens interested in various capacities in the education of children in the Australian States and federal Territories. The plaintiffs challenged the validity of several statutes of the Commonwealth Parliament which provided financial assistance to non-government schools in each of the States, the Australian Capital Territory and the Northern Territory. One of the grounds invoked was that the statutes were laws “for establishing any religion” and were therefore in violation of s 116. The majority of the High Court (Murphy J dissenting) rejected this argument.] Wilson J: 651 The plaintiffs submit that the purpose of the section is to achieve religious freedom and that the establishment clause contributes to this purpose by prohibiting the Commonwealth from making any law which provides any recognition or aid or support to one or more religions or to religion generally. They draw support for their contention from the historical events in the colonies prior to federation which they say resulted by the end of the nineteenth century in the disestablishment of religion. They draw a close parallel between s 116 and the First Amendment of the Constitution of the United States and draw from the history of the Supreme Court’s interpretation of the establishment clause the concept of a strict separation of church and state. In their submission, the words used in the section bear out their contention. They should be given a broad meaning. The word “for” is to the same effect as “in respect of”, words which are of the widest import, and reference is made to Lamshed v Lake ((1958) 99 CLR 132 at 141). “Establishing any religion” encompasses any law which has a tendency or takes a step towards establishment, and this includes any form of endowment or support to any one or more religions. … 652 … The First Amendment reads as follows: Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof: or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances. This clause has assumed an honoured place in the American Bill of Rights. The history surrounding its interpretation and its application to the States through the Fourteenth Amendment is a very striking one, so much so that even a close correspondence between its words and those of s 116 would not of itself justify this Court in adopting the same construction of the provisions as has developed in the United States. I respectfully endorse what Gibbs J said recently in Australian Conservation Foundation Inc v Commonwealth of Australia ((1980) 28 ALR 257 at 270): 796

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The DOGS Case cont. Although we naturally regard the decisions of the Supreme Court of the United States with the greatest respect, it must never be forgotten that they are often given against a different constitutional, legal and social background from that which exists in Australia. In my opinion, these words of caution have direct application to the present case. Cf also per Barwick CJ in Attorney-General (Cth); Ex rel McKinlay v Commonwealth ((1975) 135 CLR 1 at 24). In any event, there is here a divergence both in word and context. The context is different in that the provision does not form part of a Bill of Rights. The plaintiffs’ claim that it represents a personal guarantee of religious freedom loses much of its emotive and persuasive force when one must add “but only as against the Commonwealth”. The fact is that s 116 is a denial of legislative power to the Commonwealth, and no more. No similar constraint is imposed upon the legislatures of the States. The provision therefore cannot answer the description of a law which guarantees within Australia the separation of church and state. The plaintiffs’ plea for a broad construction overlooks the fact that we are dealing with a clause which does not grant power, but denies it. While it is true that a 653 constitutional grant of plenary legislative power should be construed with all the generality which the words used will admit, carrying with it whatever is incidental to the subject-matter of the power, the same is not true of a provision which proscribes power: cf Dixon CJ in Wragg v New South Wales ((1953) 88 CLR 353 at 386). Furthermore, it seems to me that the words “for establishing” are not comparable with the words “respecting an establishment”. The former words convey the sense of “in order to establish”, and speak quite specifically of the purpose of the law in terms of the end to be achieved. “Respecting” conveys the notion of “in respect of” a particular subject-matter, namely, an establishment or religion, thereby providing a broad frame of reference. I accept that the word “establishment” has no fixed connotation, but having regard to the other clauses which are contained in s 116, and to the precise manner of their expression, I infer a legislative intent to adopt a narrow notion of establishment, namely, that which requires statutory recognition of a religion as a national institution. The precise status, responsibility and privileges that attend such establishment may vary a good deal, and it is not necessary to consider its features in detail; the point to be made is that establishment involves the deliberate selection of one to be preferred from among others, resulting in a reciprocal relationship between church and state which confers and imposes rights and duties upon both parties. … 654 … I have already adverted to the other clauses contained in s 116 as lending support for a narrow construction of the establishment provision, but the observation may deserve further brief explication. If the first clause is to be read, as the plaintiffs contend, as requiring the erection of “a wall of separation” between the church and the state, then it is difficult to see what 655 room is left for the operation of the following clauses. The Commonwealth must not make any law for imposing any religious observance, but clearly such a law would offend the separationist principle. The same would be true of a law for prohibiting the free exercise of any religion, for one could hardly find a more glaring example of state interference in the religious realm. Again, the imposition of a religious test as a qualification for any office or public trust under the Commonwealth is clearly inconsistent with a prohibition of state involvement with religion. In other words, if the contention of the plaintiffs is correct, the first clause more than covers the entire field to which the section refers, leaving nothing to be contributed by the remaining clauses. If such a result reflected the intended operation of the section, then in my opinion it would have been expressed, as it easily could have been, and was in the Tasmanian amendment which was rejected, in clear and unmistakable terms. On the other hand, if the establishment clause carries the meaning that I have given it, each of the following clauses has a distinct, intelligible and consistent area of operation. Barwick CJ: 582 In my opinion, as used in an instrument brought into existence at the turn of the century, establishing a religion involves the entrenchment of a religion as a feature of and identified with the body politic, in this instance, the Commonwealth. It involves the identification of the religion with the civil authority so as to involve the citizen in a duty to maintain it and the obligation of, in this case, the Commonwealth to patronize, protect and promote the established religion. In other words, establishing a religion involves its adoption as an institution of the Commonwealth, part of the Commonwealth “establishment” … I feel no doubt that this is the sense in which the relevant part of [10.320]

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The DOGS Case cont. the language of s 116 was used when our Constitution was formed. … I think the words would mean the same if constitutionally used today. Thus what s 116 forbids is the passage of a law which will erect a religion into such a relationship to the body politic of the Commonwealth as I have attempted to describe. Gibbs J: … 603 I consider that the words “The Commonwealth shall not make any law for establishing any 604 religion”, where they appear in s 116, mean that the Commonwealth Parliament shall not make any law for conferring on a particular religion or religious body the position of a state (or national) religion or church. It may be a question of degree whether a law is one for establishing a religion. Mason J: 612 I agree with Wilson J that the first clause in the section forbids the establishment or recognition of a religion (and by this term I would include a branch of a religion or church) as a national institution. Quick and Garran in Annotated Constitution of the Australian Commonwealth say of s 116 (p 951): “by the establishment of religion is meant the erection and recognition of a State Church, or the concession of special favours, titles, and advantages to one church which are denied to others.” With one qualification, I agree with this statement. The qualification is that to constitute “establishment” of a “religion” the concession to one church of favours, titles and advantages must be of so special a kind that it enables us to say that by virtue of the concession the religion has become established as a national institution, as, for example, by becoming the official religion of the State.

Notes&Questions

[10.330]

1.

The majority judges construed the establishment clause as prohibiting the Commonwealth Parliament from constituting a particular religion or religious body as a State religion or State church. Is this interpretation consistent with the notion that the section embodies a guarantee of a fundamental freedom?

2.

American judicial decisions relating to the interpretation of the establishment clause in the First Amendment of the United States Constitution have endorsed a “wall of separation” doctrine: see eg Everson v Board of Education 330 US 1 (1947); Lemon v Kurtzman 403 US 602 (1971). What arguments were put forward by the majority judges in the Attorney-General (Vict); DOGS Case to justify their rejection of the American authorities? Murphy J dissented vigorously and said (at 633):

3.

Section 80 (trial by jury) and s 116 are among the very few guarantees of freedom in the Constitution … A reading of s 116 that the prohibition against “any law for establishing any religion” does not prohibit a law which sponsors or supports religions, but prohibits only laws for the setting up of a national church or religion, or alternatively prohibits only preferential sponsorship or support of one or more religions, makes a mockery of s 116.

Murphy J asserted that the purpose of the United States establishment clause was to prevent the recognition of and assistance to religion “which plagued European countries over many centuries” and that the “wall of separation” doctrine of the United States Supreme Court was well known to the framers of the Commonwealth Constitution. Murphy J (at 632) said: The United States’ decisions on the establishment clause should be followed. The arguments for departing from them (based on the trifles of differences in wording between the United States and the Australian establishment clauses) are hair-splitting, and not consistent with the broad approach which should be taken to constitutional guarantees of freedom. 798

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Is the interpretation in the DOGS case too narrow? (Luke Beck, “The Establishment Clause of the Australian Constitution: Three Propositions and a Case Study” (2014) 35 Adelaide Law Review 225). If a broad construction is given to the establishment clause, does it render the other clauses of s 116 redundant?

The free exercise of any religion

Jehovah’s Witnesses Case [10.340] Adelaide Company of Jehovah’s Witnesses Inc v Commonwealth (1943) 67 CLR 116 at 122–156 [The case was concerned mainly with the validity of the National Security (Subversive Associations) Regulations 1940 (Cth). Regulation 3 provided that any body, corporate or unincorporate, 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”. Any body in respect of which a declaration is made was, by force of the declaration, dissolved. Furthermore, any property of the body could be occupied and forfeited. The case arose from an action of trespass initiated by the plaintiff company against the Commonwealth as a result of the entry of Commonwealth officers into a hall belonging to the plaintiff company. The High Court unanimously held that the Regulations did not infringe s 116. However, a number of the Regulations were invalidated on the basis that they went beyond the scope of the defence power.] Latham CJ: 122 [1] … The principal questions which arise in the case are – Does s 116 prevent the Commonwealth Parliament from legislating to restrain the activities of a body, the existence of which is, in the opinion of the Governor-General, prejudicial to the defence of the Commonwealth or the efficient prosecution of the war, if that body is a religious organization? Is the answer to this question affected by the fact that the subversive activities of such a body are founded upon the religious views of its members? Can such a body be suppressed? [2] In the first place, it is important to observe that s 116 is an express prohibition of any law which falls within its terms. The section deals with laws which in some manner relate to religion. The Constitution, however, contains no provision which confers upon the Commonwealth Parliament any power to make laws with respect 123 to the subject of religion. Section 116 therefore cannot be regarded as prescribing the content of laws made with respect to religion upon the basis that the Commonwealth Parliament has some power of legislating with respect to religion. Section 116 is a general prohibition applying to all laws, under whatever power those laws may be made. It is an overriding provision. It does not compete with other provisions of the Constitution so that the Court should seek to reconcile it with other provisions. It prevails over and limits all provisions which give power to make laws. Accordingly no law can escape the application of s 116 simply because it is a law which can be justified under ss 51 or 52, or under some other legislative power. All the legislative powers of the Commonwealth are subject to the condition which s 116 imposes. [3] Section 116 applies in express terms to “any religion”, “any religious observance”, the free exercise of “any religion” and any “religious test”. Thus the section applies in relation to all religions, and not merely in relation to some one particular religion. … 126 … Section 116, however, is based upon the principle that religion should, for political purposes, be regarded as irrelevant. It assumes that citizens of all religions can be good citizens, and that accordingly there is no justification in the interests of the community for prohibiting the free exercise of any religion. … [7] The examples which have been given illustrate the difficulty of the problem with which a court is confronted when it is asked to determine whether or not a particular law infringes the constitutional provision by prohibiting “the free exercise of … religion”. Can any person, by describing (and honestly describing) his beliefs and practices as religious exempt himself from obedience to the law? Does s 116 protect any religious belief or any religious practice, irrespective of the political or social effect of that belief or practice? It has already been shown that beliefs entertained by a religious body as religious beliefs may be inconsistent with the maintenance of civil government. The complete protection of all religious beliefs [10.340]

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Jehovah’s Witnesses Case cont. might result in the disappearance of organized society, because some religious beliefs, as already indicated, regard the existence of organized society as essentially evil. [8] Section 116 does not merely protect the exercise of religion, it protects the free exercise of religion. … 131 … [10] There is, therefore, full legal justification for adopting in Australia an interpretation of s 116 which had, before the enactment of the Commonwealth Constitution, already been given to similar words in the United States. This interpretation leaves it to the court to determine whether a particular law is an undue infringement of religious freedom. It is possible, however, in my opinion, to decide the present case upon a narrower principle which escapes the criticisms to which that interpretation may be open. John Stuart Mill in his Essay on Liberty critically examines the idea of liberty, and his discussion of the subject is widely accepted as a weighty exposition of principle. The author had to make the distinction which is often made in words between liberty and licence, but which it is sometimes very difficult to apply in practice. He recognized that liberty did not mean the licence of individuals to do just what they pleased, because such liberty would mean the absence of law and of order, and ultimately the destruction of liberty. He expressed his opinion as to the limits of liberty when he said: “The sole end for which mankind are warranted, individually or collectively, in interfering with the liberty of action of any of their number, is self-protection” (Essay on Liberty, 1871 ed, sch 1, pp 6). It may be going too far to say that self-protection is “the sole end” which justifies any governmental action. But I think it must be conceded that the protection of any form of liberty as a social right within a society necessarily involves the continued existence of that society as a society. Otherwise the protection of liberty would be meaningless and ineffective. It is consistent with the maintenance of religious liberty for the State to restrain actions and courses of conduct which are inconsistent with the maintenance of civil government or prejudicial to the continued existence of the community. The Constitution protects religion within a community organized under a Constitution, so that the continuance of such protection 132 necessarily assumes the continuance of the community so organized. This view makes it possible to reconcile religious freedom with ordered government. It does not mean that the mere fact that the Commonwealth Parliament passes a law in the belief that it will promote the peace, order and good government of Australia precludes any consideration by a court of the question whether or not such a law infringes religious freedom. The final determination of that question by Parliament would remove all reality from the constitutional guarantee. That guarantee is intended to limit the sphere of action of the legislature. The interpretation and application of the guarantee cannot, under our Constitution, be left to Parliament. If the guarantee is to have any real significance it must be left to the courts of justice to determine its meaning and to give effect to it by declaring the invalidity of laws which infringe it and by declining to enforce them. The courts will therefore have the responsibility of determining whether a particular law can fairly be regarded as a law to protect the existence of the community, or whether, on the other hand, it is a law “for prohibiting the free exercise of any religion”. The word “for” shows that the purpose of the legislation in question may properly be taken into account in determining whether or not it is a law of the prohibited character. … Rich J: 150 Freedom of religion is not absolute. It is subject to powers and restrictions of government essential to the preservation of the community. Freedom of religion may not be invoked to cloak and dissemble subversive opinions or practices and operations dangerous to the common weal. Any competition between governmental powers and liberty under the Constitution can be reconciled and made compatible. They co-exist without invasion of their respective spheres of action. … Starke J: 155 The liberty and freedom predicated in s 116 of the Constitution is liberty and freedom in a community organized under the Constitution. The constitutional provision does not protect unsocial actions or actions subversive of the community itself. Consequently the liberty and freedom of religion guaranteed and protected by the Constitution is subject to limitations which it is the function and the duty of the courts of law to expound. And those limitations are such as are reasonably necessary for the protection of the community and in the interests of social order. McTiernan J: 156 Section 116 imposes a restriction on all the legislative powers of Parliament. An Act passed by Parliament may be a law with respect to any of the subjects of power enumerated in s 51 or with respect to any other subject of legislative power, but if it answers to the description of “a law for 800

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Jehovah’s Witnesses Case cont. prohibiting the free exercise of any 157 religion” within the meaning of s 116 it violates the Constitution and is void.

Notes&Questions

[10.350]

1.

2.

It is said that the Jehovah’s Witnesses Case stands “only for the narrow proposition that a person cannot seek to overthrow the constitutional system of government in the name of religion”: S McLeish, “Making Sense of Religion and the Constitution: A Fresh Start for s 116” (1992) 18 Monash University Law Review 207 at 209. Do you agree with this assessment of the case? The court saw its role as that of “balancing religious freedom with other social interests”. However, according to Zines, “[n]one of the judges engaged in any sensitive balancing or adjustment of the conflicting interests in the particular case”. Zines added (Zines, The High Court and the Constitution (4th ed, Federation Press, Sydney, 1997), p 403): The assertion that the continued existence of the Constitution and the organised community was of higher importance, and was a prerequisite to the operation of s 116 itself, did not answer the question whether, in the circumstances, the law was reasonably necessary or appropriate to achieve that end.

3.

Would a Commonwealth law which provided for compulsory military service be applicable to a person who has religious objections to such service? See Krygger v Williams (1912) 15 CLR 366. What is the position if a person refuses to vote in compulsory voting at a Commonwealth election on the ground that his religion forbad him from taking part in an election? See Judd v McKeon (1926) 38 CLR 380 at 387 (per Higgins J).

Religious tests as a qualification for any office or public trust under the Commonwealth

Williams v Commonwealth [10.360] Williams v Commonwealth (2012) 248 CLR 156, 222-334 [The case of Williams concerned the constitutional validity of a contract entered into by the Commonwealth, and the contract’s associated expenditure, for the delivery of chaplaincy services in Queensland state schools, and particularly to the Darling Heights State School. Amongst other issues, the Plaintiff argued that the contract and the payments made under it were unconstitutional by virtue of s 116 of the Commonwealth Constitution which provides that “no religious tests shall be required as a qualification for any office or public trust under the Commonwealth”. The High Court unanimously rejected the Plaintiff’s submission.] Gummow and Bell JJ: 222 [107] Section 116 of the Constitution states that “no religious test shall be required as a qualification for any office or public trust under the Commonwealth”. The plaintiff contends that the “school chaplain” is an “office … under the Commonwealth” and that the definition of “school chaplain” in the Guidelines imposes a religious test for that office. To qualify as a “school chaplain”, a person must be recognised “through formal ordination, commissioning, recognised qualifications or endorsement by a recognised or accepted religious institution or a state/territory government approved chaplaincy service”. [108] However, the plaintiff’s case under s 116 fails at the threshold. … 223 [109] The chaplains engaged by SUQ hold no office under the Commonwealth. The chaplain at the Darling Heights State [10.360]

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Williams v Commonwealth cont. Primary School is engaged by SUQ to provide services under the control and direction of the school principal. The chaplain does not enter into any contractual or other arrangement with the Commonwealth. That the Commonwealth is a source of funding to SUQ is insufficient to render a chaplain engaged by SUQ the holder of an office under the Commonwealth. [110] It has been said in this Court that the meaning of “office” turns largely on the context in which it is found (Sykes v Cleary (1992) 176 CLR 77 at 96–97; Kendle v Melsom (1998) 193 CLR 46 at 60–61 [32]–[33]). See also Edwards v Clinch [1982] AC 845 at 860, 864–867, 870–871], and it may be accepted that, given the significance of the place of s 116 in the Constitution (Kruger v Commonwealth (1997) 190 CLR 1 at 85–87, 121–124, 130–134, 160–161, 166–167), the term should not be given a restricted meaning when used in that provision. Nevertheless, the phrase “office … under the Commonwealth” must be read as a whole. If this be done, the force of the term “under” indicates a requirement for a closer connection to the Commonwealth than that presented by the facts of this case. The similar terms in which the “religious test clause” is expressed in Art VI, cl 3 of the United States Constitution was emphasised by the plaintiff but there is no clear stream of United States authority on this provision which points to any conclusion contrary to that expressed above. [French CJ (at 181-182 [9]), Hayne J (at 240 [168]), Crennan J (at 341 [476]) and Kiefel J (at 374 [597]) agreed with the reasons of Gummow and Bell JJ.] Heydon J: 334 [443] … the plaintiff drew attention to the differences between s 44(iv) of the Constitution, s 75(v) of the Constitution and s 116. Section 44(iv) refers to an “office of profit under the Crown”, and means a permanent officer of the executive government (Sykes v Cleary (1992) 176 CLR 77 at 96). The plaintiff submitted that the omission of the words “of profit” from s 116 suggests that it contemplates something less than a relationship of employment. The plaintiff also pointed to the fact that s 75(v) refers to “officer of the Commonwealth” while s 116 refers to an “office … under the Commonwealth”. The plaintiff submitted that “of” indicates a person engaged or appointed by the Commonwealth, while “under” indicates the exercise of Commonwealth supervision or control over the office holder. The plaintiff submitted that if his proposed construction of s 116 were not adopted, the Commonwealth could evade s 116 by engaging subcontractors to perform its activities and stipulating that those subcontractors employ only adherents to a particular religious faith. The plaintiff contended that the Commonwealth exercised supervision or control over the “chaplains”. That is because if the Code of Conduct were breached, the Commonwealth could cause the “chaplain” in breach to cease providing “chaplaincy services”. And it is because the Commonwealth had the right to conduct monitoring activities. [444] The plaintiff’s construction of s 116 must be rejected. The absence of the words “of profit” from s 116 indicates only that s 116 is wider than s 44(iv). Section 116 applies to offices which are not “of profit” as well as those which are. An “office” is a position under constituted authority to which duties are attached (R v Boston (1923) 33 CLR 386 at 402). That suggests that an “officer” is a person who holds an office which is in direct relationship with the Commonwealth and to which qualifications may attach before 335 particular appointments can be made or continued. The word “under” in s 116 has no significance. It does not suggest the wider meaning which the plaintiff advocated. It simply repeats the relevant part of Art VI of the United States Constitution: “no religious Test shall ever be required as a Qualification to any Office or public Trust under the United States.” [445] The Commonwealth has no legal relationship with the “chaplains”. It cannot appoint, select, approve or dismiss them. It cannot direct them. The services they provide in a particular school are determined by those who run that school. The provision of those services is overseen by school principals. [446] In the result, the plaintiff’s construction of s 116 is an unattractive one. Under that construction, whenever the Commonwealth enters a contract under which services are to be provided by a party with whom it is to have no legal relationship, under which particular standards are stipulated, and under which reporting obligations are created to ensure compliance with those standards, that party would hold an office under the Commonwealth. This would radically expand s 75(v). The effect would 802

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Williams v Commonwealth cont. be greatly to widen opportunities to commence litigation within the original jurisdiction of this Court, without the possibility of statutory restriction of them. Section 75(v) is a very beneficial provision, but not as beneficial as that. [447] This is not the occasion on which to attempt an exhaustive definition of “office … under the Commonwealth”. It is sufficient to say that whatever its outer limits, the “chaplains” are beyond them. [448] It is therefore not necessary to deal with the plaintiff’s other, somewhat controversial, submission, that the eligibility criteria impose a religious test. See Luke Beck, “When is an Office or Public Trust “Under the Commonwealth” for the Purposes of the Religious Tests Clause of the Australian Constitution” (2015) 24 Monash University Law Review 17.

“Religion” [10.370] In Adelaide Company of Jehovah’s Witnesses Inc v Commonwealth (1943) 67 CLR 116, Latham CJ made some observations about the scope of “religion” in s 116 (at 123): It would be difficult, if not impossible, to devise a definition of religion which would satisfy the adherents of all the many and various religions which exist, or have existed in the world. There are those who regard religion as consisting principally in a system of beliefs or statement of doctrine. So viewed religion may be either true or false. Others are more inclined to regard religion as prescribing a code of conduct. So viewed a religion may be good or bad. There are others who pay greater attention to religion as involving some prescribed form of ritual or religious observance. Many religious conflicts have been concerned with matters of ritual and observance. Section 116 must be regarded as operating in relation to all these aspects of religion, irrespective of varying opinions in the community as to the truth of particular religious doctrines, as to the goodness of conduct prescribed by a particular religion, or as to the propriety of any particular religious observance. What is religion to one is superstition to another. Some religions are regarded as morally evil by adherents of other creeds. At all times there are many who agree with the reflective comment of the Roman poet – “Tantum religio potuit suadere malorum”. The prohibition in s 116 operates not only to protect the freedom of religion, but also to protect the right of a man to have no religion. No Federal law can impose any religious observance. Defaults in the performance of religious duties are not to be corrected by Federal law – Deorum injuriae Diis curae. Section 116 proclaims not only the principle of toleration of all religions, but also the principle of toleration of absence of religion.

Church of the New Faith v Commissioner of Pay-roll Tax (Vic) [10.380] Church of the New Faith v Commissioner of Pay-roll Tax (Vic) (1983) 154 CLR 120 at 136–174 [Although s 116 was not the focus of the court’s attention in Church of New Faith v Commissioner of Pay-roll Tax (Vic) (1983) 67 CLR 120 that case nevertheless contains some useful discussions of the meaning of “religion”.] Mason ACJ and Brennan J: 136 We would therefore hold that, for the purposes of the law, the criteria of religion are twofold: first, belief in a supernatural Being, Thing or Principle; and second, the acceptance of canons of conduct in order to give effect to that belief, though canons of conduct which offend against the ordinary laws are outside the area of any immunity, privilege or right conferred on the grounds of religion. Those criteria may vary in their comparative importance, and there may be a different intensity of belief or of acceptance of canons of conduct among religions or among the adherents to a religion. The tenets of a religion may give primacy to one particular belief or to one particular canon of conduct. Variations in emphasis may distinguish one religion from other religions, but they are irrelevant to the determination of an individual’s or a group’s freedom to profess and exercise the religion of his, or their, choice. … [10.380]

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Church of the New Faith v Commissioner of Pay-roll Tax (Vic) cont. Wilson and Deane JJ: 174 One of the more important indicia of a “religion” is that the particular collection of ideas and/or practices involves belief in the supernatural, that is to say, belief that reality extends beyond that which is capable of perception by the senses. If that be absent, it is unlikely that one has “a religion”. Another is that the ideas relate to man’s nature and place in the universe and his relation to things supernatural. A third is that the ideas are accepted by adherents as requiring or encouraging them to observe particular standards or codes of conduct or to participate in specific practices having supernatural significance. A fourth is that, however loosely knit and varying in beliefs and practices adherents may be, they constitute an identifiable group or identifiable groups. A fifth, and perhaps more controversial, indicium … is that the adherents themselves see the collection of ideas and/or practices as constituting a religion. As has been said, no one of the above indicia is necessarily determinative of the question whether a particular collection of ideas and/or practices should be objectively characterized as “a religion”. They are no more than aids in determining that question and the assistance to be derived from them will vary according to the context in which the question arises. All of those indicia are, however, satisfied by most or all leading religions. It is unlikely that a collection of ideas and/or practices would properly be characterized as a religion if it lacked all or most of them or that, if all were plainly satisfied, what was claimed to be a religion could properly be denied that description. Ultimately however, that question will fall to be resolved as a matter of judgment on the basis of what the evidence establishes about the claimed religion. Putting to one side the case of the parody or sham, it is important that care be taken, in the exercise of that judgment, to ensure that the question is approached and determined as one of arid characterization not involving any element of assessment of the utility, the intellectual quality, or the essential “Truth” or “worth” of tenets of the claimed religion. In Williams v Commonwealth (2012) 248 CLR 156 the plaintiff contended, amongst other grounds [see [10.360]] that the Commonwealth funding of chaplains in State schools via the Scripture Union Queensland (SUQ) violated s 116 in imposing a “religious test” on chaplains funded by the Commonwealth. The High Court dismissed this ground on the basis that the chaplains, not being directly engaged by the Commonwealth, were not holding an “office” “under the Commonwealth” and therefore s 116 did not apply. Gummow and Bell JJ (at 223 [109]–[110]) explained that the fact that the Commonwealth was “a source of funding to SUQ” was not sufficient to activate s 116 and that “the force of the term ‘under’ indicates a requirement for a closer connection to the Commonwealth than that presented by the facts of this case”. See Nicholas Aroney, “Freedom of Religion as an Associational Right” (2014) 33 University of Queensland Law Journal 153, 167-168.

SECTION 117 Introductory remarks [10.390] Section 117 provides: A subject of the Queen, resident in any State, shall not be subject, in any other State to any disability or discrimination which would not be equally applicable to him if he were a subject of the Queen resident in such other State.

Until the decision of the High Court in Street v Queensland Bar Association (1989) 168 CLR 461, the interpretation of s 117 amounted to an evisceration of a provision which is “couched in a form that resembles a guarantee of personal rights and freedoms”. The restrictive interpretation [10.400] In Davies and Jones v Western Australia (1904) 2 CLR 29, a law enacted by the

Parliament of Western Australia provided for the imposition of probate duty upon the estates of deceased persons, which duty would be reduced in the case of beneficiaries who were “bona 804

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fide residents of and domiciled in Western Australia”. In this case, the beneficiary was a resident of and domiciled in Queensland. The claim that s 117 had been violated was dismissed by the High Court on the basis that the real ground of discrimination was domicile and not residence. Dawson J in Street observed ((1989) 168 CLR 461 at 542): [T]here is to be found in the judgments, at all events in those of Barton and O’Connor JJ, the suggestion that s 117 has no application where a disability or discrimination is subject to some requirement in addition to that of residence.

The restrictive interpretation of s 117 was further reinforced in Henry v Boehm (1973) 128 CLR 482. Rules regulating the admission of legal practitioners in South Australia required a legal practitioner from another State seeking admission to practise in South Australia to “reside for at least three calendar months in the State continuously and immediately preceding the filing of his notice of application for admission.” The initial admission was a conditional admission for one year which would then be translated into an absolute admission if the applicant had continuously resided in the State of South Australia, and had not pursued any occupation or business other than the proper business of a practitioner. These rules were held by a majority of the High Court (Barwick CJ, McTiernan, Menzies and Gibbs JJ; Stephen J dissenting) not to be in violation of s 117.

Henry v Boehm [10.410] Henry v Boehm (1973) 128 CLR 482 at 489–507 Barwick CJ: 489 Section 117 relates to disability or discrimination imposed or created by legislation. At least prima facie therefore being a resident of another State must be made by the law the basis of the imposition or creation of the disability or discrimination. But, of course, the necessary direct effect of the operation of a statute or statutory provision according to its true construction must be regarded in considering whether the law does make residence out of the State a criterion of its operation. Here, quite clearly in my opinion, the rules do not in terms make the fact of being an out-of-State resident the basis of their operation. The plaintiff’s submission however is that a resident of Victoria must cease to be a resident of that State in order to comply with the condition of admission imposed by r 27(1) and that the necessity to do so is not something which would be required of him if he were a resident of South Australia. Thus it is said the rules for that reason offend the Constitutional provision. But, as I have pointed out, a person resident, but not domiciled in, South Australia, temporarily absent from that State, perhaps to obtain or complete his out of State qualification, if qualified out of the State would be in precisely the same situation as the plaintiff. Equally after conditional admission, the resident of South Australia must physically reside there for the requisite period of one year. The rules themselves make no distinction between those who may happen already to be resident in South Australia and those who do not, where each has qualified elsewhere than in South Australia. It seems to me that it was fundamental to the plaintiff’s argument that a resident of a State within the meaning of that expression in s 117, cannot reside elsewhere than in that State for any substantial period of time without necessarily ceasing to be relevantly a resident of that State. In my opinion, as indeed I have earlier said, s 117 seems to be built on the concept that by reason of some degree of permanence of residence a subject of the Queen has become and is qualified for the purposes of this section as a “resident in any State”. In this respect I do not accept the view that a person who happens at any moment to reside in a State is therefore for that reason a resident of that State. Section 117 appears to be dealing with the case of a person who not being a resident of the legislating State, is present in it. He may not whilst there be subject to any disability or discrimination because he is a resident in another State. It follows that a person may reside pro tem in one State while being a resident of another. A person who may thus properly be said to be a resident of a State 490 does not in my opinion cease to be such if he resides out of that State with no intention of abandoning his “residence” there but for some purpose quite consistent with the maintenance of his State residence. Thus, in my opinion, the plaintiff, a resident of Victoria, would not cease to be resident in Victoria [10.410]

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Henry v Boehm cont. within the meaning of that description in s 117 if he resided in South Australia merely for the purposes of his admission as a practitioner in that State. The Rules, in my opinion, do not require him to become a resident of South Australia or to abandon Victoria as his State of residence. But perhaps, more relevantly the rules do not lay any disability or discrimination upon the plaintiff because he is a resident of Victoria. In other words, residence is not made the basis of any disability or discrimination let alone any disability or discrimination to which a person resident in South Australia is not equally subject. In the words of the section, the plaintiff is not, in my opinion, subjected by the rules to any disability or discrimination which would not equally apply to him if he were a resident of South Australia. [McTiernan, Menzies and Gibbs JJ took a similar approach. The majority of the court compared the effect of the law in question on a non-resident of the legislating State with that on a resident. They also took the view that “resident in a State” signified a degree of permanency. They also adopted a narrow approach which focused on the legal operation rather than the factual consequences of the law in question.] Stephen J (dissenting): 501 The practical effect of these requirements of residence in South Australia will no doubt be, in all but very exceptional cases, to compel an inter-State practitioner to give up his practice in that other State if he is to be admitted to practice in South Australia. How then does s 117 bear upon the requirements of these rules; do they subject the plaintiff to any disability or discrimination which would not be equally applicable to him if he were resident in South Australia? To answer this question the process of comparison which the section calls for must be undertaken, the plaintiff’s actual situation must be contrasted with a hypothetical one which differs from actuality only because it assumes the plaintiff to be a resident of South Australia; in making the comparison called for by s 117 no departure from actuality is to be made other than this one, relating to the plaintiff’s residence. Being thus resident in South Australia but having previously been admitted to practice in Victoria, his position when wishing to use 502 that qualification in order to gain admission to practice in South Australia is to be contrasted with his position as it is in fact. The obvious difference between that hypothetical situation and the situation with which the plaintiff is in fact confronted is that were he already resident in South Australia he would not have to abandon his existing Victorian abode so as to reside continuously in South Australia, first for three months and then for a further twelve months. This difference arises because of the express requirements of the rules. If this may be said to be a “disability or discrimination” to which the plaintiff is subject by reason of his being “resident” in Victoria, using these words in the sense which they bear in s 117, then that section will apply. It is, I think, no objection to the application of s 117 that residents of South Australia seeking to be admitted to practice there in reliance upon the same inter-State qualifications as the plaintiff will be equally subject to the operation of rr 27 and 28; nor that some such South Australian permanent residents might, when they wish to seek admission, happen to be absent from that State so that they, like the plaintiff, will have to journey to South Australia and may have to then live there for lengthy periods if, perhaps because their domicile is other than South Australian, they cannot take advantage of the exemption in r 27(2). If the comparison called for by the section is faithfully adhered to the possible situations of other persons is seen to be wholly irrelevant, the comparison to be made will ignore all actual residents (in whatever sense that term be used) of South Australia. This is because s 117 does not concern itself with the making of any comparison between the situation of the plaintiff were he a resident of South Australia and the situation of other residents of that State. What s 117 calls for is, instead, a comparison between the plaintiff’s situation as it is in fact and as it would be were he a resident of South Australia. Moreover, I regard it as incorrect to say of a disadvantage that because it is the consequence of a requirement of universal application that disadvantage is equally applicable to all; if the discriminating factor relates to the personal attributes of individuals some only of whom possess those attributes then, while the requirement may be said to apply equally to all, the disadvantage will apply unequally for it will apply only to those who do not possess those attributes. 503 … It might be contended that the residence required by the rules is of a different quality from that residence to which s 117 refers, the latter involving a concept of permanence, such as is involved in the acquisition of a domicile of 806

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Henry v Boehm cont. choice, but not requiring that continuity of physical presence which the Admission Rules call for. If this were so then the making of the relevant comparison indicated by s 117 would not necessarily reveal the imposition upon the plaintiff of any disadvantage imposed by reference to residence because if, for the purpose of that section, the plaintiff were to be thought of as a resident in South Australia that residence would not necessarily produce automatic compliance with the residence requirements of the rules. A resident in South Australia in such a s 117 sense might in fact frequently be absent from that State for long periods at a time; were he, in those circumstances, required by the rules continuously to reside in that State for the relevant three and twelve months’ periods he might be said to be subjected to a disadvantage no less than that suffered by a Victorian resident. 504 In Davies and Jones v Western Australia, Griffith CJ ((1904) 2 CLR 29 at 39) in effect answered such a contention by assigning to “resident” in s 117 what he described as a distributive meaning so that it applied to any kind of residence which a State may attempt to make a basis of discrimination, so that, whatever that kind may be, the fact of residence of the same kind in another State entitles the person of whom it can be predicated to claim the privilege attempted to be conferred by the State law upon its own residents of that class. I do not understand his Honour as there proposing an interpretation of “resident” in s 117 which would give to it a fluctuating meaning dependant for its content, in any particular instance, upon the sense in which any State legislation to which s 117 was sought to be applied might use “resident”. On the contrary, his Honour was giving to “resident” in s 117 a wide and comprehensive but unvarying meaning, wide enough to cover whatever type of residence State legislation may select as the criterion of discrimination. If this is indeed the proper meaning of “resident” in s 117 then the forbidden criterion has been adopted in the Admission Rules. … 506 … It is, I think, important to bear in mind that s 117 is both a provision of our federal Constitution and the chosen means by which future immunity from discriminatory laws of other States was granted to subjects of the Queen, thereby in some measure conferring equal standing within each State of the Commonwealth upon those subjects resident in any other of the federating States. In James v Commonwealth ((1936) 55 CLR 1 at 43) Lord Wright MR spoke of s 117 as analagous [sic] to s 92 and described it as providing a constitutional guarantee of equal right of all residents in all States. These considerations provide, to my mind, little encouragement to seek for any narrow definition of the designated beneficiaries of this constitutional guarantee of immunity. The immunity conferred by s 117 is, in any event, quite a restricted one, limited to discrimination upon the sole ground of residence; further to confine it to only those discriminations which would be equally applicable were the subject of discrimination a person having his permanent home in the legislating State, so that very lengthy periods of actual residence in that State might be validly imposed upon subjects who retained their permanent residence in other States, so detracts from the effectiveness of this grant of immunity 507 as to raise, at least in my mind, a very real doubt whether this can be the true meaning of the section. The various considerations to which I have already adverted satisfy me that it is not and that the wide meaning of “resident” adopted by Griffith CJ as long ago as 1904 should be adhered to as giving to that word in s 117 its true meaning and effect in the context in which it occurs.

[10.420]

1.

Notes&Questions

Is the interpretation of s 117 by the High Court in Davies and Jones v Western Australia and Henry v Boehm consistent with the object of the section? See Zines (4th ed, 1997), p 405.

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2.

Deane J in Street v Queensland Bar Association (1989) 168 CLR 461 at 523 described the pre-1989 decisions of the High Court on s 117 as representing “a triumph of form over substance”. Is this tussle between form and substance a feature of other areas of constitutional law?

The expansive interpretation [10.430] The High Court revitalised s 117 when it reconsidered the interpretation of the

section in Street v Queensland Bar AssociationStreet v Queensland Bar Association. Street, a barrister resident in New South Wales, sought admission to practise as a barrister in Queensland. His application was rejected on the ground that he had failed to comply with the relevant provisions of the Rules of the Supreme Court (Qld) which required him to be a resident of Queensland and to cease practice in his home State of New South Wales. Before the High Court could hear his application for special leave to appeal to the court, the admission rules were amended to require an out-of-State applicant to have an intention to practise principally in Queensland. The admission could be a conditional admission for one year followed by an absolute admission if during that period he had practised principally in Queensland. Street challenged the validity of the admission rules by invoking s 117 and s 92 of the Constitution.

Street v Queensland Bar Association [10.440] Street v Queensland Bar Association (1989) 168 CLR 461 at 485–584 Mason CJ: 485 The very object of federation was to bring into existence one nation and one people. This section is one of the comparatively few provisions in the Constitution which was designed to enhance national unity and a real sense of national identity by eliminating disability or discrimination on account of residence in another State. In this respect the section should be seen as a counterpart to other provisions in the Constitution which prohibit discrimination between the States in matters of taxation, trade and finance (ss 51(ii), 92 and 99). In James v Commonwealth ((1936) 55 CLR 1; [1936] AC 578 at 43–44 (CLR), 614 (AC)) Lord Wright regarded the section as analogous to s 92 and referred to it as providing a constitutional guarantee of equal rights of all residents in all States. And, although the language of s 117 differs from that of Art IV, s 2 of the United States Constitution, there can be no doubt that the American model had an influential impact on the framers of our Constitution, at least to the extent of illustrating the need for a provision which, by guaranteeing to out-of-State residents who were British subjects an individual right to non-discriminatory treatment, would bring into existence a national unity and a national sense of identity transcending colonial and State loyalties. These considerations, as well as the use of the expression “resident in” rather than “resident of” (cf ss 75(iv), 100; Henry v Boehm (1973) 128 CLR 482 at 504–506), point to a liberal, rather than a narrow, interpretation of “resident” in s 117, an interpretation which will guarantee to the individual a right to non-discriminatory treatment in relation to all aspects of residence. Accordingly, I favour the “distributive” interpretation adopted by Griffith CJ in Davies and Jones and Stephen J in Henry v Boehm in preference to that taken by the majority in the latter case. The assimilation of “resident” in s 117 to “permanent resident” is arbitrary in the sense that the word is capable of a variety of shades of meaning and there is nothing in the context to support the selection of a meaning which works the greatest restriction in the operation of the section. Section 117 is contained in Ch V of the Constitution, which is entitled “The States”. Chapter V contains a miscellany of provisions, all of which, except s 116, relate to the States. Some of these sections (ss 114, 115, 116) expressly prohibit the States or the Commonwealth from doing certain things. Others (ss 119, 120) impose duties upon the States. Section 117 is strikingly different. It 486 is not expressed in terms similar to those of the surrounding sections. Notably, it relates not to a State or the Commonwealth, but to a “subject of the Queen”. Its form and language indicate that s 117 is directed towards individuals and their protection from disability or discrimination of the kind contemplated by the section, and that it is not, except to that extent, a restriction on State or Commonwealth legislative 808

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Street v Queensland Bar Association cont. power. So a person not subjected to any relevant disability or discrimination by a particular law could not have that law held invalid by establishing that it subjects a third person to such a disability or discrimination; that circumstance would not lead to a striking down of the offending law. Conversely, a person who would, but for s 117, be so affected by the law is immune from its operation in so far as it subjects him to impermissible disability or discrimination, though the law itself remains valid in its application to persons who would not be so affected. Perhaps an enactment might be rendered wholly invalid by s 117 if it depended for its operation upon the imposition of a prohibited form of disability or discrimination, but that is not a question which I need to examine. Its only significance in the present case is that it may serve to explain references to the validity of the State legislation in Davies and Jones. These remarks are explicable on the basis that, had the Court equated domicile with residence or otherwise regarded domicile as within the province of s 117, the result would possibly have been to deny the validity of the offending enactment because it enacted a prohibited form of discrimination. The preponderant weight of opinion denies the individual focus which Stephen J gives to s 117. With the exception of his Honour’s dissenting judgment in Henry v Boehm, all the judgments in Davies and Jones and Henry v Boehm insist on comparing the way in which the non-resident of the legislating State is affected by the law of that State with the way in which residents of that State are affected: Davies and Jones at 39), per Griffith CJ (at 45), Barton J and O’Connor J (at 49); Henry v Boehm ((1973) 128 CLR 482 at 489), per Barwick CJ, Menzies J (Henry v Boehm (1973) 128 CLR at 492–493) and Gibbs J (Henry v Boehm (1973) 128 CLR at 496). This approach denies the individual focus of the section by addressing itself to the general range of circumstances in which the State law applies. However, as Stephen J points out, the terms of the section invite a comparison of the actual situation of the out-of-State resident with what it would be if he were a resident of the legislating State. The 487 section does not invite a comparison between his actual situation and that of other residents of the legislating State. Such a comparison poses the question whether or not the law necessarily applies differently to residents of the legislating State. The answer to that question will almost invariably be in the negative due to the range of persons in differing situations within the legislating State and the fact that some of those persons will probably be affected by the law in the same manner as the out-of-State resident. Thus, the mode of comparison adopted in the decided cases, though not suggested by the terms of the section, has confined the operation of the constitutional guarantee. When that mode of comparison is combined with the assimilation of “resident” to “permanent resident”, the effect has been to deprive the section of any significant utility. Another difficulty with the existing interpretation of s 117 is that it appears to proceed according to a narrow view of what amounts to a disability or discrimination. The statement of Griffith CJ in Davies and Jones ((1904) 2 CLR at 39) that I have already quoted, which was indorsed by Stephen J in Henry v Boehm, like that of Barwick CJ in Henry v Boehm ((1973) 128 CLR 482 at 489), suggests that, in order to bring the section into operation, the State law must make the fact of being a resident in another State the criterion of the disability or discrimination. Again, this seems to be an unduly limiting notion. In terms, the section applies when a subject of the Queen, being an out-of-State resident, is subject to a disability or discrimination under State law. The section is not concerned with the form in which that law subjects the individual to the disability or discrimination. It is enough that the individual is subject to either of the two detriments, whatever the means by which this is brought about by State law. This approach to the interpretation of the section accords with the approach generally adopted in connexion with statutes proscribing particular kinds of discrimination. They are either expressed or construed as proscribing an act or a law the effect of which is relevantly discriminatory: see, eg, Birmingham City Council v Equal Opportunities Commission ([1989] AC 1155 at 1194–1195); Mandla v Dowell Lee ([1983] 2 AC 548); Ontario Human Rights Commission v Simpsons–Sears Ltd ([1985] 2 SCR 536). It would be surprising if it were otherwise, especially since such statutes are generally intended to provide relief from discrimination rather than to punish the discriminator: see Simpsons-Sears ([1985] 2 SCR at 547). It would make little sense to deal with laws 488 which have a discriminatory purpose and leave untouched laws which have a discriminatory effect. Once this is recognized, it becomes all the more difficult to accept that the fact that a requirement as to residence is universal in its application is necessarily an answer to the operation of s 117. Such a [10.440]

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Street v Queensland Bar Association cont. requirement may have a discriminatory effect in relation to an out-of-State resident for the simple reason that it may apply unequally by subjecting him to a greater burden or disadvantage than that imposed on a resident of the legislating State. So to forbid all persons from wearing a turban is on its face a prohibition applicable to all persons without distinction, but in effect is a discrimination based upon religious grounds because its only impact will fall upon adherents of a creed or religion which requires the wearing of turbans: Mandla v Dowell Lee; Bhinder v Canadian National Railway Co ([1985] 2 SCR 561). An examination of the effect of the relevant law is both necessary to avoid depriving s 117 of practical effect and consistent with its emphasis upon the position of the individual. One further aspect of the section needs explanation. A disability or discrimination may still apply in theory after residence is changed, yet be so reduced in its impact as a result of the change that it is rendered illusory. Stephen J acknowledged this possibility and indeed that recognition was central to his decision. He stated (Henry v Boehm (1973) 128 CLR at 507): Were he resident … in South Australia the requirement of the rules would bear quite differently and less onerously upon him; their precise effect in such a hypothetical situation cannot be predicated but at least it is clear that were he resident in South Australia the disability involved in lengthy residence away from Victoria would either be wholly absent or be substantially mitigated. Thus his Honour saw the phrase “equally applicable” in s 117 as embracing the notion discussed above. It seems to me that for s 117 to apply it must appear that, were the person a resident of the legislating State, that different circumstance would of itself either effectively remove the disability or discrimination or, for practical purposes in all the circumstances, mitigate its effect to the point where it would be rendered illusory. A disability or discrimination is rendered illusory if the fact of residence would substantially deprive it of its onerous nature. A requirement of continuous residence for a certain period would in my view be an example of a law whose onerous effect on non- 489 residents would be rendered illusory under this test. A disability or discrimination based upon grounds apart from residence is effectively removed if those grounds relate to characteristics which are in the circumstances concomitants of the individual’s notionally changed residence. To this extent I would accept the argument that s 117 is not susceptible of “colourable evasion” by State legislatures. In the foregoing discussion I have stated why it is that I cannot accept the correctness of the interpretation placed on s 117 in Davies and Jones and, more importantly, Henry v Boehm. Moreover, the adoption of the interpretation expounded in the preceding paragraph of these reasons would be inconsistent with the actual decision in Henry v Boehm. Needless to say I am reluctant to depart from an earlier decision of this Court. However, two of the factors relied upon by the Court in John v Commissioner of Taxation ((1989) 166 CLR 417 at 438–440), for overruling the earlier decision in Curran v Federal Commissioner of Taxation ((1974) 131 CLR 409) are present in this case. The earlier decisions do not rest upon a principle gradually worked out in a significant succession of cases. And the decisions have not been independently acted upon in a manner or to an extent that works against reconsideration of them. Furthermore, there is in the present case an additional factor. The question at issue relates to an important provision in the Constitution dealing with individual rights central to federation. The earlier decisions placed an incorrect interpretation upon it. The Court has a responsibility to set the matter right. Accordingly, I would apply the principle, along the lines mentioned above, that s 117 renders a disability or discrimination invalid if the notional fact of residence within the legislating State would effectively remove the disability or discrimination or substantially deprive it of its onerous nature. [After discussing the approach taken by the Supreme Court of the United States, his Honour discussed possible limitations to the operation of s 117:] 491 To allow the section an unlimited scope would give it a reach extending beyond the object which it was designed to serve by trenching upon the autonomy of the States to a far-reaching degree. Accordingly, there may be cases where the need to preserve that autonomy leads to a recognition 492 that a particular disability or discrimination is not prohibited. The object of s 117 is very broad-ranging 810

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Street v Queensland Bar Association cont. in its nature and it is difficult to conceive of a disability or discrimination which does not offend that object unless to prohibit the imposition of the disability or discrimination would threaten the autonomy of the relevant State. The basis for insisting on some limitation to the operation of the privileges and immunities clause in the United States was expressed by the Supreme Court of the United States in Baldwin (436 US 371 (1978) at 383 (US)) in the following terms: Some distinctions between residents and nonresidents merely reflect the fact that this is a Nation composed of individual States, and are permitted; other distinctions are prohibited because they hinder the formation, the purpose, or the development of a single Union of those States. A similar basis underlies the correct approach to the interpretation of s 117. The preservation of the autonomy of the States demands that the exclusion of out-of-State residents from the enjoyment of rights naturally and exclusively associated with residence in a State must be recognized as standing outside the operation of s 117. Take, for example, the exclusion of out-of-State residents from the right to enjoy welfare benefits provided by a State under a scheme to assist the indigent, the aged or the ill. Generally speaking, I doubt that such an exclusion would amount to a disability or discrimination within the section. The exclusion would not seem to detract from the concept of Australian nationhood or national unity which it is the object of the section to ensure, because it would offend accepted notions of State autonomy and financial independence and a due sense of a State’s responsibility to the people of the State to say that the Constitution required the State to extend the range of persons entitled under the scheme to out-of-State residents. The same comment might be made about a requirement that a person is not eligible to be the licensee of an hotel unless he resides on the premises. On the other hand, the same comments could not be made about the exclusion of out-of-State residents from participation in professional activities open to residents of the legislating State or the imposition of discriminating burdens on such out-of-State residents, unless the exclusion could be justified as a proper and necessary discharge of the State’s responsibility to the people of that State, which includes its responsibility to protect the interests of the public. Such an action against out-of-State residents would be inconsistent with the constitutional object of Australian nationhood 493 and national unity, unless the State were able to demonstrate that the interests of the State in maintaining its autonomy, over and above such interest it might have in giving an advantage to its residents over non-residents, required such action to be taken. Obviously, there will be circumstances in which need for regulation of activity, including professional activity, in order to protect the public in a State, requires that conditions be prescribed which may have a greater impact on out-of-State residents than residents of the legislating State. The qualifications and experience prescribed for entry into professional practice in another State may be insufficiently rigorous compared to those appropriate to the legislating State. There may even be a case for justifying the imposition of conditions on out-of-State professionals, though clearly conditions requiring any form of residence within the State would call for stronger justification. Brennan J: 512 The exception of necessity. The s 117 guarantee of equality of treatment is not expressed to be subject to any qualification or exception. Nor is there any firm constitutional foothold for an implication that s 117 should be read down to permit discrimination in favour of in-State residents in order to foster local sentiment or to advance local interests. Yet it is clear that there must be some exception to a general application of its terms. Section 117 is drawn on the assumption that out-of-State residence can never be a ground for denying to a protected person any right to which that person would be entitled if she or he were resident in the relevant State. Yet s 7 of the Constitution demonstrates that the assumption is ill-founded: a subject of the Queen, resident in one State, must be denied a vote for the senators for another State voting as one electorate. In my opinion, the guarantee of equality of treatment is qualified only by necessary implication from the Constitution itself. No such necessity can be found in the constitutional conferring of powers on the institutions of government or in the constitutional recognition of the powers of government. Although governments (in each of their branches) may [10.440]

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Street v Queensland Bar Association cont. exercise their powers as they see fit within the limits of the law, the very purpose of s 117 is to ensure – and in terms it ensures – that the exercise of power by the institutions of government is ineffective when it reaches the borders of the Alsatia created by s 117. The necessity to treat a protected person differently on the 513 ground of out-of-State residence must therefore be found not in the powers vested in the institutions of government but in the existence of those institutions and in the protection of their functions. The necessity to preserve the institutions of government and their ability to function is an unspoken premise of all constitutional interpretation (see Commonwealth v Tasmania (the Tasmanian Dam Case) ((1983) 158 CLR 1 at 214) for it is the necessity to preserve the Constitution itself. But that necessity does not require or authorize a qualification of the constitutional text in order to maintain what might be thought to be a convenient fund of power or a desirable distribution of power. Nothing less than the need to preserve the institutions of government and their ability to function can justify the erection by a government of a barrier to the legal and social unity of the Australian people. The necessity to preserve the institutions of government or their ability to function demands that electoral laws providing for a franchise based on residence in a State be given full effect. It may require giving full effect to laws which impose a requirement of in-State residence in order to ensure the attendance of members of the three branches of government at their respective places of duty or to ensure their familiarity with conditions within the State in which those duties are performed. It may justify other laws in the same way. Future cases will tell. Although discrimination based on local residence within a State does not in terms attract the operation of s 117, discrimination on that basis may take many forms and it must be left to future cases to say whether s 117 is attracted in a particular case. In the United States, problems of that kind arising under the Privileges and Immunities clause (Art IV, s 2) of the Constitution have provoked contrasting judicial opinions: see United Building & Construction Trades v Mayor (465 US 208 (1984)). However, even if discrimination based on local residence within a State were to attract the application of s 117 in the generality of cases, it could not do so in the case of an electoral law creating a parliamentary franchise based on local residence. In such a case, the necessity of preserving the means of electing the members of the Parliament would necessitate the exclusion of non-local residents from the poll and the case would fall outside the purview of s 117. The exception of necessity is narrowly confined: indeed, it may not amount to discrimination at all. When it is necessary to treat a protected person differently on the ground of out-of-State residence (as in the case of voting in an election of senators for another State), 514 that ground reflects the fact that the protected person is in a position which is relevantly and necessarily different from the position she or he would be in if she or he were an in-State resident. It is precisely because she or he is not an in-State resident that the Constitution requires her or him to be differently treated. Such different treatment is not truly discriminatory. However, as s 117 comprehends disabilities as well as discriminations, an exception of necessity must be recognized. Deane J: 528 The words of s 117 must, of course, be construed in their context in a constitution which is founded upon the existence of the various States as distinct entities under the federation. So construed, s 117 does not require that no distinction at all be drawn in a State between non-resident and resident. Section 117 only applies when a non-resident is “subject to … disability or discrimination”. Those words, construed in their constitutional context, convey the notion of some superimposed incapacity or disadvantage in the sense that the incapacity or disadvantage, regardless of whether it be direct or indirect, does not flow naturally from the structure of the particular State, the limited scope of its legislative powers or the nature of the particular right, privilege, immunity or other advantage or power to which it relates. Thus, a provision in a State constitution conferring particular voting rights in State elections upon residents of the State as a whole or upon persons resident in particular electorates in the State will have the effect of precluding non-residents from voting. The incapacity of the non-resident to vote flows, however, not from some superimposed disqualification or qualification but from the nature of the franchise in a political system based, to a significant extent, on residential divisions and representation. A similar comment could be made of a federal law precluding a person resident in Victoria who happened to be present in New South Wales from voting in the 812

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Street v Queensland Bar Association cont. election of New South Wales senators. Again, State financial assistance to a particular class of its residents (eg a rental subsidy to disadvantaged tenants) could place an ineligible visitor who was resident (and a tenant) in another State at a comparable disadvantage if that other State provided no such subsidy. The disadvantage would, however, not flow from the subjection of the non-resident to a disability or discrimination. It 529 would flow naturally from the nature of the subsidy and the scope of State powers and responsibility under the constitutional division of governmental authority. Yet again, a requirement that a person who lacks the requisite intrastate qualifications have certain extrastate qualifications or be subjected to some scrutiny of competence before holding himself or herself out as qualified and competent to carry on practice as a medical practitioner or a solicitor or barrister in a State will not involve subjecting a non-resident to disability or discrimination for the purposes of s 117 if the requisite qualifications or scrutiny represent no more than regulation of a kind necessary to protect the public. Such regulation flows naturally from what is involved in the practice of medicine or law and the obvious need to protect the public from unqualified and incompetent practitioners. Dawson J: 548 Just as it became apparent in the United States that Art IV, s 2 could not have an unconfined application, so it is apparent that s 117, given the meaning preferred by Stephen J, must be applied in such a way as to avoid exceeding its evident purpose. The language of s 117 may make the exercise somewhat easier because, at least in some instances, the differential treatment of a citizen from one State in another may not amount to the imposition of a disability or discrimination. Where a residential qualification is, for example, a common condition of the exercise of some right, such as the right to vote in State elections, the requirement can scarcely be described as a disability or discrimination except in a narrow or technical sense. Moreover, the very nature of the subject matter which is being regulated in a case such as that requires organization upon the basis of State residence because the purpose for which votes are cast is to elect persons to represent the residents of a State in the State legislature. No doubt there will be cases in which it will be more difficult to determine whether differential treatment amounts to a disability or discrimination within the meaning of s 117 and guidance must then be found in the purpose of the section. But it should be borne in mind that that purpose does not deny the separate responsibilities of the States which, together with the Commonwealth, make up the Australian federation. It does not require the uniformity of laws throughout the land. It does, however, require the States, and perhaps the Commonwealth, to recognize in the discharge of their responsibilities that there is but one nation and that the citizens of that nation carry their citizenship with them from State to State. To this end, s 117 does not permit a citizen to be subjected in a State to any disability or discrimination the basis of which is, not the ordinary and proper administration of the affairs of that State, but his residence in another State. In other words, in order to escape s 117, the true purpose and effect of differential treatment must be capable of being seen as other than to impose a disability upon the residents of other States or to subject them to discrimination. There can, I think, be no more precise expression of the limits of s 117 and the adoption of one formula or another in the end only poses the same question. No doubt the limits will properly emerge with greater precision upon a case by case basis. Toohey J: 559 [T]he federal system contemplated by the Constitution assumes that, subject to the Constitution, the States will legislate for their peace, order and good government: see generally Union Steamship Co of Australia Pty Ltd v King ((1988) 166 CLR 1). Indeed the Constitution itself contemplates an electoral system in which senators for one State will be chosen by the people of that State (s 7) and, impliedly at least, that members of the House of Representatives in each State will be chosen by the people of that State (s 30). It is inconceivable that a State Parliament may not exclude from the qualifications of its electors those who reside outside the State, without offending s 117. To say this, however, is not to indicate the limits of s 117. The circumstances of the case now before the Court do not require that these limits be spelt out and it would be unwise to attempt such an exercise. But underlying the section is the notion to which reference has already been made that Australia is a commonwealth and its 560 laws are to apply equally to all its citizens. The section operates by force of its terms; its limits are to be found in the implications to be drawn from the [10.440]

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Street v Queensland Bar Association cont. Constitution, in particular the capacity of the States to regulate their own affairs within a federal system. Some laws will of necessity affect those who reside in a State differently from the way they affect those who reside elsewhere. It does not follow that there is a disability or discrimination within s 117, particularly if the difference is a natural consequence of legislation aimed at protecting the legitimate interests of the “State community”. Time will see the working out of the limits of the section. Gaudron J: 570 However, the words of s 117 themselves indicate its purpose and effect, namely, protection against disability or discrimination which would not be equally applicable if the person invoking its protection were resident in the State in which he or she is subject to that disability or discrimination. The limits to the protection afforded by s 117 are, in my view, to be ascertained by reference to the expression “disability or discrimination” rather than by identification of interests pertaining to national unity or by reference to the federal object attending s 117. 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 571 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”. Where protection is given by anti-discrimination legislation, the legislation usually proceeds by reference to an unexpressed declaration that certain characteristics are irrelevant within the areas in which discrimination is proscribed. Even so, the legislation frequently allows for an exception in cases where the characteristic has a relevant bearing on the matter in issue. Thus, for example, the Anti-Discrimination Act 1977 (NSW), whilst proscribing discrimination in employment on the grounds of race and sex, allows in ss 14 and 31 that discrimination is not unlawful if sex or race is a genuine occupational qualification. The framework of anti-discrimination legislation has, to a considerable extent, shaped our understanding of what is involved in discrimination. Because most anti-discrimination legislation tends to proceed by reference to an unexpressed declaration that a particular characteristic is irrelevant it is largely unnecessary to note that discrimination is confined to different treatment that is not appropriate to a relevant difference. It is often equally unnecessary to note that, if there is a relevant difference, a failure to accord different treatment appropriate to that difference also constitutes discrimination. The importance of a relevant difference was noted by Judge Tanaka in the South West Africa Cases (Second Phase) ([1966] ICJR 6 at 305–306), in these terms: … the principle of equality before the law … means … relative equality, namely the principle to treat equally what are equal and unequally what are unequal. … To treat unequal matters differently according to their inequality is not only permitted but required. The issue is whether the difference exists. Similarly, the European Court of Justice said in Italy v Commission of the European Economic Community (13/63) ([1963] CMLR 289 at 312): Material discrimination would consist in treating either similar situations differently or different situations identically. In State of West Bengal v Anwar Ali ((1952) 39 AIR(SC) 75 at 93) SR Das J said in relation to Art 14 of the Indian Constitution which guarantees equality before the law and the equal protection of the law: 572 All persons are not, by nature, attainment or circumstances, equal and the varying needs of different classes of persons often require separate treatment and, therefore, the protecting clause has been construed as a guarantee against discrimination amongst equals only and not as taking away from the State the power to classify persons for the purpose of legislation. His Honour then went on to note that two requirements are necessary to avoid the prohibition against discrimination, namely, 814

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Street v Queensland Bar Association cont. (1) that the classification must be founded on an intelligible differentia which distinguishes those that are grouped together from others and (2) that that differentia must have a rational relation to the object sought to be achieved by the Act. The differentia which is the basis of the classification and the object of the Act are distinct things and what is necessary is that there must be a nexus between them. The reference to “disability” in s 117 must be construed in the context of the expression “disability or discrimination”. Just as the legal concept of discrimination does not extend to different treatment appropriate to a relevant difference, so too, the absence of a right or entitlement does not constitute a disability if the right or entitlement is appropriate to a relevant difference. There are a number of circumstances in which residence may be a relevant difference justifying different treatment. It is sufficient to note one. Within our federal framework it is the status of being a “subject of the Queen” (those words being understood to refer to a subject of the Queen in right of Australia: see Nolan v Minister for Immigration and Ethnic Affairs ((1988) 165 CLR 178 at 186)) and residence within a State which together signify membership of the body politic constituting that State. That membership carries with it rights to participate in the political processes of the State. Thus, in so far as a law of a State selects residence within the State as the criterion for conferral of rights to participate in its political processes, the law selects a characteristic signifying a relevant difference. And the same may be true of a law conferring a special benefit by virtue of membership of the body politic constituting the State, especially if that benefit is funded by taxes levied against its members. The more difficult question is whether, there being a relevant difference, the different treatment accorded to that difference is appropriate to it. Although I have expressed the issue in terms of the appropriateness of the different treatment, it seems to me that the considerations thereby raised are similar to those which arise in application of the “privileges and immunities” clause of the United 573 States Constitution. In Toomer v Witsell (334 US 385 (1948) at 396 (US)), the relevant enquiry in relation to the “privileges and immunities” clause was identified as one “concerned with whether [reasons for discrimination] do exist and whether the degree of discrimination bears a close relation to them”. Similarly, in Supreme Court of New Hampshire v Piper (470 US 274 (1985) at 284 (US)) Powell J, delivering the opinion of the Court, said that “[t]he Clause does not preclude discrimination against nonresidents where: (i) there is a substantial reason for the difference in treatment; and (ii) the discrimination practiced against nonresidents bears a substantial relationship to the State’s objective” and added that “[i]n deciding whether the discrimination bears a close or substantial relationship to the State’s objective, the Court has considered the availability of less restrictive means”. It may be observed of these passages that the word “discrimination” appears to be used to signify different treatment, but the enquiry directed is, in essence, an enquiry whether different treatment is appropriate to an identified and relevant difference. The question whether different treatment assigned by reason of a relevant difference is appropriate to that difference is one which is peculiarly apt to attract different answers according to the alternatives available at different times. It is also a question which, as the United States Supreme Court recognized in Supreme Court of Virginia v Friedman (101 L Ed 2d 56 (1988) at 66 (US)), cannot be answered by the dictation of “specific legislative choices to the State”. It may also be a question the answer to which will sometimes depend on whom the persuasive burden is placed. The significance of the burden of proof and related concepts in the field of discrimination may be seen in cases such as Griggs v Duke Power Co (401 US 424 (1971)); Dothard v Rawlinson (433 US 321 (1977)) and Wards Cove Packing Co Inc v Atonio (57 LW 4583 (1989)) and is discussed in Ontario Human Rights v Simpsons-Sears Ltd ((1985) 2 SCR 536). The issue in the present case may be approached by a means which does not involve any consideration of the allocation of a persuasive burden. The question of appropriateness may be answered by reference to the test applied to determine the validity of legislation enacted to secure a constitutional purpose, namely, whether it is reasonably capable of being seen as appropriate and adapted to that purpose. See Commonwealth v Tasmania (Tasmanian Dam Case) ((1983) 158 CLR 1 at 130–132, 172, 232, 259–261); 574 Richardson v Forestry Commission ((1988) 164 CLR 261 at 289, [10.440]

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Street v Queensland Bar Association cont. 300, 311–312, 336, 344–346). For present purposes the issue may be expressed as whether the different treatment is reasonably capable of being seen as appropriate and adapted to a relevant difference. McHugh J: 583 Despite the width of its language, however, s 117 was not intended as a human rights charter for interstate residents. It does not prohibit a State from subjecting an interstate resident to disabilities or discriminations to which State residents in identical circumstances are subject. Indeed, as the Convention Debates show, the desire of Western Australia to continue to discriminate against Asian persons was the reason the words “to him” were inserted in s 117. Moreover, although s 117 leaves the words “disability” or “discrimination” at large and does not identify their subject-matter, the “structural logic” of the Constitution indicates that there are some subject-matters in respect of which an interstate resident is not entitled to equality of treatment with State residents in identical circumstances. The object of s 117 was to make federation fully effective by ensuring that subjects of the Queen who were residents of Australia and in comparable circumstances received equality of treatment within the boundaries of any State. But the existence of a federal system of government, composed of a union of independent States each continuing to govern its own people, necessarily requires the conclusion that some subject-matters are the concern only of the people of each State. And since the residents of a State and its 584 people are basically interchangeable concepts, it follows that laws dealing with these particular subject-matters may exclude interstate residents from participation either generally or subject to conditions. The exclusion of these subject-matters from the scope of s 117 is the necessary consequence of a federal system in which each State exercises independent powers and functions within its territory for the peace, order and good government of that territory. Matters which are the concern only of a State and its people and are not within the scope of s 117 would seem to include the franchise, the qualifications and conditions for holding public office in the State, and conduct which threatens the safety of the State or its people. No doubt there are other subject-matters which are also outside the reach of s 117. But since all exceptions to the terms of that section arise by necessary implication from the assumptions and structure of the Constitution, they must be confined to the extent of the need for them. The question is not whether a particular subject-matter serves the object of s 117; it is whether, by necessary implication, the matter is so exclusively the concern of the State and its people that an interstate resident is not entitled to equality of treatment in respect of it.

Notes&Questions

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1.

Section 117 derived its inspiration from Art IV, s 2 and the Fourteenth Amendment, s 1 of the United States Constitution. Article IV, s 2 provides: The citizens of each State shall be entitled to all privileges and immunities of citizens in the several States.

The Fourteenth Amendment, s 1 provides: No State shall make or enforce any law which shall abridge the privileges or immunities of citizens in the United States; nor shall any State … deny to any person within its jurisdiction the equal protection of the laws.

Mason CJ explained the approach taken in the United States as follows (Street at 491): Broadly speaking, the test adopted consists of two stages. First, the Court decides whether or not the interest violated is a “fundamental right” basic to national unity: Baldwin v Montana Fish and Game Commission 436 US 371 (1978). If it is, then the second question is whether the legislating State can demonstrate a substantial reason for the discrimination. This involves showing that the discrimination against persons in 816

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their capacity as non-residents is justified, not merely that the law as a whole is justified: Hicklin v Orbeck 437 US 518 (1978) at 525–526; Supreme Court of New Hampshire v Piper 470 US 274 (1985) at 284.

2.

Is the United States approach an appropriate one for the operation of s 117? See C L Pannam, “Discrimination on the basis of State Residence in Australia and the United States” (1967) 6 Melbourne University Law Review 105. In Goryl v Greyhound Australia Pty Ltd (1994) 179 CLR 463, s 117 was applied to render s 20 of the Motor Vehicles Insurance Act (Qld) inapplicable to a claim lodged by the plaintiff who was a passenger in a tourist bus registered in Queensland. However, the plaintiff was a resident of New South Wales and was injured in New South Wales when the bus she was travelling in from Queensland was involved in a collision. The plaintiff sued the owner of the bus and its insurer in Queensland for negligence and breach of contract. The defendants invoked s 20 which would limit the plaintiff, as a resident of New South Wales, to the damages which she could have recovered under New South Wales law. These damages would be less than the damages she could have recovered under Queensland law. This limitation would not have applied to the plaintiff if she had been a resident of Queensland. Dawson and Toohey JJ said (at 485–486): In Street v Queensland Bar Association (1989) 168 CLR 461 all members of the Court were of the view that not every kind of differential treatment by a State of a resident of another State amounts to the imposition of a disability or to discrimination within the meaning of s 117. Whether this is because the very nature of the federation, predicated as it is upon government State by State with the inevitable consequence that laws will differ from State to State, requires limits to be placed upon s 117 or whether it is because some kinds of differential treatment, properly viewed, cannot be described as imposing a disability or a discrimination, is probably a difference in approach rather than principle. … The most obvious example of differential treatment which lies 486 outside s 117 is the exclusion of non-residents from voting in a State election [see Henry v Boehm (1973) 128 CLR 482 at 507]. Clearly, that is something which would not be prohibited by s 117 even if it did amount to the imposition of a disability upon non-residents or discrimination against them. But it might also be said that there is no disability or discrimination because the very nature of a State election, which is to elect representatives for the residents of the State, dictates that residence be a qualification of voters. Non-residents have no part to play in the election of representatives for residents. No doubt difficulties may be encountered when one proceeds beyond the more obvious examples of differential treatment which are not prohibited by s 117. Guidance is then to be found in the object of s 117 which is to foster the concept of Australian nationhood, recognising at the same time the capacity of the States to govern their own communities which is an essential feature of the federation.

3. 4.

For a recent case in which s 117 was invoked (unsuccessfully) see Sweedman v Transport Accident Commission (2006) 226 CLR 362. See generally H P Lee and J Paterson, “Australian Nationhood in the Constitutional Interpretation of Section 117” (2000) 8 Asia Pacific Law Review 169; G Ebbecke, “Section 117: The Obscure Provision” (1991) 13 Adelaide Law Review 23; G Ebbecke, “The Future for Section 117 as a Constitutional Guarantee” (1993) 4 Public Law Review 80; M Mathieson, “Section 117 of the Constitution: The Unfinished Rehabilitation” (1999) 27 Federal Law Review 393; A Simpson, “The (Limited) Significance of the Individual in Section 117 State Residence Discrimination” (2008) 32 Melbourne University Law Review 639. [10.450]

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A BILL OF RIGHTS FOR AUSTRALIA? [10.460] The absence of an express Bill of Rights in a national constitution is an increasing

rare thing amongst common law nations. While this does not mean that Australia lacks human rights legislation, it does mean that few of these rights receive express federal constitutional protection. Bills of Rights present a vexed issue in terms of the role of the parliament and the role of the judiciary. As Hiebert explains (J Hiebert, “Parliamentary Bills of Rights: An Alternative Model?” (2006) 69 Modern Law Review 7 at 7–8) [footnotes removed]: Conventional wisdom suggests that liberal constitutionalism can take one of two rival paths. One path is to codify rights, representing a higher law than ordinary legislation, where the judiciary is empowered to interpret these and grant remedies for their infringement. This is the model influenced by American-style judicial review, and has been emulated and adapted in Western Europe after 1945 and in central and Eastern Europe after 1989. Although significant differences exist in the nature of constitutional adjudication (relating to whether ordinary or constitutional courts are used, differences in the appointment, composition and tenure of judges, and how issues come before courts), what unites this approach is the judiciary’s capacity to nullify legislation that is deemed inconsistent with protected rights. And nullify legislation they have. In the past thirty years, the “French, German, and Italian courts have, respectively, invalidated more national laws than has the US Supreme Court – in its entire history.” The second path emphasises the supremacy of legislative judgment. This is the approach of Westminster-modelled parliamentary systems that historically have rejected the idea of construing political debates as legal conflicts that require a judicial role in their resolution. Rights are not foreign to this system and are protected through the rule of law and interpretations of the common law. Yet their function is different from the previous model. Individual rights do not provide independent checks to determine the validity of legislative judgment. Instead, the legitimacy of a political system is premised on the general right to participate in the political deliberations that characterise representative government. Political systems based on the supremacy of legislative judgment do not “understand political rights in terms of the drawing of boundaries around autonomous individuals” but celebrate, instead, the “right of rights” in which “large numbers of rights-bearers act together to control and govern their common affairs”. Those who are sceptical about the merits of using bills of rights as the central method to structure and evaluate political decisions are no doubt frustrated by the triumph of this first path of constitutionalism. Despite their persistent and dire warnings of the negative consequences of relying on legally interpreted rights to determine the validity of contested state actions, no indication exists of any intent amongst political communities to reverse prior decisions and discard their bills of rights. Moreover, decisions to adopt bills of rights where judges determine the validity of impugned legislation have often been made without serious contemplation of what constitutionalising rights means for the democratic right of participation.

Amending the Commonwealth Constitution to expand rights protections is also a very difficult task (see, eg, J Williams, “The Constitutional Amendment Process: Poetry for the Ages”, in HP Lee and P Gerangelos, Constitutional Advancement in a Frozen Continent – Essays in Honour of Professor George Winterton (Federation Press, Sydney, 2009), pp 1-21). Section 128 requires all proposed federal constitutional amendments to be passed by an absolute majority of one or both Houses of the Commonwealth Parliament and for it then to be approved at a referendum by a majority of electors in a majority of States and a majority of Australian electors overall. For example, the 1944 referendum attempt to expand the constitutional right guarantees only received the required majorities in two States. Similarly, the Constitutional Commission recommended in 1987 the insertion of an extensive new rights and freedom chapter (Ch VIA) into the Commonwealth Constitution. While this 818

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recommendation was not accepted in its entirety, in 1988, the referendum attempt to extend the rights provided by ss 80, 116 and 51(xxxi) and to provide greater electoral protections failed to achieve the necessary majorities. The alternative to a constitutional Bill of Rights is a statutory rights Charter (see, eg, Campbell et al (ed), Protecting Rights Without a Bill of Rights: Institutional Performance and Reform in Australia (Aldershot, Hants, 2006)). While such Charters adopt different models, a statutory Charter lacks the constitutional entrenchment of a Bill of Rights and hence tends to maintain parliamentary sovereignty to a greater degree. Attempts to introduce federal rights Charters throughout the 1970s and 1980s were unsuccessful. The most significant statutory Charter activity in recent years has been at the sub-national level. Although most jurisdictions have investigated the options to enhance human rights protections, the ACT, with its Human Rights Act 2004 (ACT), was the first jurisdiction to introduce a comprehensive Charter. Victoria followed with the Charter of Human Rights and Responsibilities Act 2006 (Vic) (for a discussion of both Charters see: C Evans and S Evans, Australian Bills of Rights – The Law of the Victorian Charter and the ACT Human Rights Act (LexisNexis, Sydney, 2008)). These rights statutes are similar to the Human Rights Act 1998 (UK) in adopting what is often called a “dialogue model”. Under this model, legislation is to be interpreted consistently with the rights protected by the Charter where possible, however, legislation incompatible with the Charter is not able to be invalidated by a Court. Instead, the judiciary can issue to the parliament a declaration or notice of incompatibility to which the parliament must then respond. This shifts the resolution of the incompatibility to the more representative legislative arm. The National Human Rights Consultation Report (2009, [11.1]) explained the dialogue model as follows: What is common to the human rights Acts adopted in New Zealand, the United Kingdom, Victoria and the ACT is that they aim to facilitate a “dialogue” between the three arms of government – the executive, the parliament and the judiciary. The Acts set out a range of rights to be protected and then give distinct roles to each arm of government in relation to those rights: • The executive (the government and its agencies) is required to act in a manner consistent with human rights in its decision making and can face court action if it fails to do so. When introducing new legislation into parliament, the government is (or members of parliament are) generally required to include a statement about whether the legislation is “human rights compliant”. When a court makes a declaration that specific legislation is inconsistent with human rights, some models require the government to report to parliament on the inconsistency. • The parliament is given the final say on laws. It can decide to pass legislation that overrides human rights. If a court makes a declaration that specific legislation is inconsistent with human rights, parliament can choose whether to amend the legislation. Parliamentary committees are involved in scrutinising Bills for human rights compliance before they are passed. • The judiciary is required to interpret legislation in a manner consistent with human rights. It may be empowered to provide remedies if the executive breaches human rights and to make declarations of incompatibility if legislation is found to be inconsistent with human rights. Importantly, such a declaration does not affect the operation or validity of the legislation: it is merely a signal to the government that it should consider amending the legislation. In this way the three arms of government prompt responses from each other when a proposed law or policy is inconsistent with human rights. This is often referred to as the “dialogue” model.

The National Human Rights Consultation Committee was set up on 10 November 2008 to report to the Federal Government on “the issues raised and the options identified for the Government to consider to enhance the protection and promotion of human rights” while expressly excluding consideration of a “constitutionally entrenched Bill of Rights”. The National Human Rights Consultation Report (footnotes removed at [15.4]) found that: [10.460]

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The majority of those attending community roundtables favoured a Human Rights Act, and 87.4% of those who presented submissions to the Committee and expressed a view on the question supported such an Act – 29 153 out of 33 356. In the national telephone survey of 1200 people, 57% expressed support for a Human Rights Act, 30% were neutral, and only 14% were opposed. Survey respondents were asked for their opinions about five different ways of protecting human rights. Although 49% strongly supported parliament paying attention to human rights when making laws, only 23% strongly supported a specific Human Rights Act that defined the human rights to which all people in Australia are entitled. It was the question of a Human Rights Act that prompted GetUp!, Amnesty International Australia and the Australian Christian Lobby to conduct public campaigns during the Consultation: of the 29 153 submissions in favour of a Human Rights Act, 26 382 were campaign submissions. The question of an Act was what led to most media commentary and spawned the publication of several books. At the public hearings people spoke eloquently for and against an Act. In addition to the thousands of submissions from individual citizens, the Committee was privileged to receive many well-researched submissions from non-government organisations, community groups, human rights commissions, governments, academic institutions, and distinguished academics and public advocates experienced in debating the utility and desirability of an Australian Human Rights Act. All who contributed such submissions displayed a strong commitment to the protection and promotion of human rights. The disagreement was about how best to protect and promote those rights in contemporary Australia. For some, the calculus was simple: if Australia has ratified an international human rights treaty, it ought then at the national level legislate to ensure that the rights acknowledged in the treaty are enforceable – if need be, against all levels of government – in Australian courts. They saw all such rights as universal and indivisible and insisted that courts should be able to enforce economic and social rights in the same way as they can civil and political rights. Some people think the Federal Government should take unilateral action to protect some rights; others say the Federal Government should get its own house in order, leading by example and not imposing its will on state and territory governments. Even the Victorian Government, which is proud of its Charter of Human Rights and Responsibilities, recommended “the enactment of a Federal Charter that applies to federal public authorities only and does not apply to the states”. A potential disadvantage of a federal system is that laws and procedures governing the same conduct can vary, but an advantage of such a system is that different jurisdictions can experiment with different laws and policies. Over time, it might be possible to detect very different human rights outcomes between, say, Victoria, which has its charter, and New South Wales, which has none. It is early days. Those speaking of the costs and benefits of the Victorian and ACT human rights legislation can sometimes overstate their case. Many who urged a greater role for the courts in protecting human rights conceded that parliament should still have the final word on contentious matters. Australians generally would not want to see judges having the last word on matters such as abortion and euthanasia. Retired Chief Justice Sir Anthony Mason, a supporter of some form of statutory bill of rights, has said: Under a human rights regime, these issues are determined by reference to the very broad concept of the “right to life”. That broad and abstract concept offers very little philosophical or practical guidance on how the two critical issues of euthanasia and abortion should be resolved. The result is that, under a human rights regime, it is left to the judges to reason to a conclusion on these issues from a vague abstract concept. Reasoning of this kind is unlikely to be convincing when the issue is one on which the community holds strong views. In these situations there is much to be said for accepting the majoritarian approach and leaving it to the political process. At least it can be said that the outcome has popular support. Similarly, same-sex marriage and exemptions from discrimination laws for single-gender clubs and religious organisations would be best left for the parliament to resolve. The so-called dialogue model of a Human Rights Act would sit more comfortably with Australians than other models because, even when the courts have expressed a view about the limits on rights, most Australians would prefer parliament to express the final view, once it had received a further opinion from the executive in response to an adverse court finding. The rights 820

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regime remains subject to parliament’s will … Under a suitable Australian charter, the “hard issues” could be considered by government, parliament and the courts, but the last word would remain with parliament. It is appropriate that the Committee sets out the features of an Australian Human Rights Act that in its opinion most accurately reflect the concerns expressed by the community and are most compatible with existing constitutional arrangements. Of course, it is a decision for government whether to introduce a Human Rights Bill into parliament. Nevertheless, the Committee sets out here the desirable characteristics of such a Bill. It would be counter-productive and unwise to have the Federal Parliament impose on the states and territories a catalogue of human rights and a process for determining the regular limitation of those rights. Given the history of attempts to legislate for human rights at the national level in Australia, the Committee thinks the Commonwealth should look to its own affairs and lead by example. The ACT Human Rights Act and the Victorian charter are novel Australian approaches to the protection of human rights. The ACT Act is at present being reviewed, and the Victorian charter will be reviewed in 2011. Over time, other states might decide to adopt similar laws, or they might not. In the Committee’s view, it would be prudent for any federal government contemplating an Australian Human Rights Act to consider legislating in a manner broadly consistent with the best elements of the existing Victorian and ACT laws. Any Human Rights Bill should be drafted so as to apply only to the Commonwealth and those public authorities exercising functions under Commonwealth law. The rights should be enjoyed only by human beings and not by corporations. … The process of law making Amidst the controversy about the utility and cost of an Australian Human Rights Act, the Committee was required to consider only those options that preserve the sovereignty of parliament. At every major community roundtable there was at least a handful of citizens agitating for a constitutional bill of rights. In the other corner of the room there was just as often a group claiming that Magna Carta was all that was needed to preserve our rights. It is beyond the Committee’s terms of reference to consider a constitutionally entrenched bill of rights. If parliament were minded to legislate for an Australian Human Rights Act, the Committee recommends a model that provides the means for each branch of government to play its specialist role. This is sometimes called the “dialogue” model, although critics of the terminology rightly point out that it does not lead to conversation. Rather, each party contributes and responds to the contribution of other parties to the dialogue. The model works thus: 1. The executive proposes to parliament a Bill the executive has drawn up with an eye to compliance with the relevant listed human rights. The executive provides a statement of compatibility, attesting that any limits on the relevant rights are limits that can be demonstrably justified in a free and democratic society. 2. The parliament considers the Bill through its Parliamentary Committee on Human Rights, which decides whether it agrees with the executive’s assessment of the Bill or decides to legislate nonetheless, even though the Bill entails excessive interference with a particular right. 3. When a person claiming an unwarranted infringement of their right applies for a remedy in court, the court interprets the law consistently with human rights and in a manner that is also consistent with the purpose of the law. The court might find that any limitation on the right in the particular instance is demonstrably justified in a free and democratic society, or it can issue a declaration of incompatibility, having given the executive the opportunity to be heard on the question of human rights compliance. 4. The effect of the declaration of incompatibility is that the law remains valid but the executive is required once again to provide to parliament a justification for or explanation of the law. 5. Parliament then has the opportunity to reconsider the legislation in the light of what has transpired during this process. [10.460]

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The Committee is of the view that this model is completely consistent with the sovereignty of parliament because parliament retains the last word on the content of the legislation. The procedure described gives parliament the opportunity to re-examine legislation that might provoke an unforseen interference with human rights that comes to light only when a wronged person brings proceedings against government in the courts. The Committee recommends that any federal Human Rights Act be based on the “dialogue” model. The Committee recommends that any federal Human Rights Act require statements of compatibility to be tabled for all Bills introduced into the Federal Parliament, all Bills before the third reading (so as to allow scrutiny of amendments) and legislative instruments as defined by the Legislative Instruments Act 2003. The Committee recommends that any federal Human Rights Act empower the proposed Joint Committee on Human Rights to review all Bills and the relevant legislative instruments for compliance with the human rights expressed in the Act.

The Federal Government ultimately rejected the Committee’s recommendation for a federal statutory rights Charter in favour of its “National Human Rights Framework” which, amongst other things, requires statements of compatibility with Australia’s obligations under seven United Nations human rights treaties for new federal Bills as well as a Parliamentary Joint Committee on Human Rights to for greater human rights scrutiny (see Human Rights (Parliamentary Scrutiny) Act 2011 (Cth); R Sackville, “Bills of Rights: Chapter III of the Constitution and State Charters” (2011) 18 Australian Journal of Administrative Law 67). These reforms have been subjected to criticism. Williams and Reynolds have recommended reforms to the regime when “the major achievements of the regime are difficult to identify … there is no evidence that this burgeoning ‘culture of justification’ has in fact led to better laws. On the contrary, there is evidence that recent years have each seen extraordinarily high numbers of rights infringing Bills passed into law.” (George Williams and Daniel Reynolds, “The Operation and Impact of Australia’s Parliamentary Scrutiny Regime for Human Rights” (2015) 41 Monash University Law Review 469, 506). For a more optimistic assessment see: Dan Meagher, “The Human Rights (Parliamentary Scrutiny) Act 2011 (Cth) and the Courts” (2014) 42 Federal Law Review 1; Tom Campbell and Stephen Morris, “Human Rights for Democracies: A Provisional Assessment of the Australian Human Rights (Parliamentary Scrutiny) Act 2011” (2015) 34(1) University of Queensland Law Journal 7). In Momcilovic v The Queen (2011) 245 CLR 1, the High Court had to consider the constitutionality of key provisions of the Charter of Human Rights and Responsibilities Act 2006 (Vic) (see further, Chapter 2). The conclusions in the case have implications for the constitutional acceptability of a federal statutory Charter. Ultimately, the upshot of the decision is that, for a majority of the Court, “declarations of inconsistent interpretation” like those made under s 36 of the Charter of Human Rights and Responsibilities Act 2006 (Vic) could not be made pursuant to a federal Charter. While this conclusion was not the ratio decidendi of the decision, it follows from the fact that at least five judges separately found that a “declaration of inconsistent interpretation” was a function that was non-judicial in nature (French CJ, Gummow, Hayne, Heydon and Bell JJ). The inevitable consequence of this is that it would be contrary to Ch III of the Commonwealth Constitution for a federal court to issue such a declaration and would therefore render unconstitutional the original statutory Charter recommendation made by the National Human Rights Consultation Committee. (For similar comments raised prior to the decision see M McHugh, “A Human Rights Act, the Courts and the Constitution” (https://www.humanrights.gov.au/publications/human-rights-act-courts-and-constitutionhon-michael-mchugh-ac-qc-2009; J Stellios, “State/Territory Human Rights Legislation in a Federal Judicial System” (2008) 19 Public Law Review 52). See also W Bateman and J Stellios, “Chapter III of the Constitution, Federal Jurisdiction and Dialogue Charters of Human Rights” (2012) 36 Melbourne University Law Review 1. 822

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Interestingly, three judges also disputed the suitability of the dialogue “metaphor” in the statutory Charter context. French CJ explained (at 67 [95]) that it was “inapposite”. His Honour continued that “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” (See also Crennan and Kiefel JJ at 207 [534]). [10.470]

Notes&Questions

1.

What issues does a constitutional entrenched Bill of Rights present for Australia over a statutory rights Charter?

2.

What do you think is difficult about codifying human rights even in a statutory Charter? Can this be resolved in any way? How can it be argued that a statutory Charter under a “dialogue model” is more consistent with parliamentary democracy? The late Sir Harry Gibbs, former Chief Justice of the High Court of Australia once said, “If society is tolerant and rational, it does not need a Bill of Rights. If it is not, no Bill of Rights will preserve it”. Do you agree? Why or why not?

3. 4.

[10.470]

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CHAPTER 11 Implications from Representative Government: Implied Rights and Freedoms [11.10] IMPLIED RIGHTS AND FREEDOMS ......................................................................... 825 [11.10] Introduction ............................................................................................. 825 [11.20] Origins of the Implied Freedom of Political Communication ............. 826 [11.30]

[11.50]

Australian Capital Television v Commonwealth ............................... 826

The Freedom of Political Communication Defined: Lange v Australian Broadcasting Corporation ....................................................................... 839 [11.60]

Lange v ABC ................................................................................. 841

[11.80]

The Implied Freedom of Political Communication and its Application to Discussion of State Political Matters ...................................................... 847 [11.90] The Implied Freedom of Political Communication and Non-Verbal Communication ....................................................................................... 849 [11.100] The Freedom of Political Communication: A Right or a Freedom? ..... 849 [11.110] Mulholland v Australian Electoral Commission ................................ 850

[11.130] The Implied Freedom of Political Communication and Public Discourse: Protest, Insult and Intimidation .............................................................. 854 [11.130] Coleman v Power ......................................................................... 854 [11.150] Monis v The Queen ...................................................................... 869

[11.170] The Implied Freedom of Political Communication and Proportionality Analysis ..................................................................................................... 880 [11.180] McCloy v New South Wales ........................................................... 881

[11.200] Implications from Representative Government and the Electoral Process ...................................................................................................... 896 [11.210] McGinty v Western Australia .......................................................... 897

[11.230] Representative Government and the Right to Vote .............................. 913 [11.230] Roach v Electoral Commissioner ..................................................... 913 [11.250] Rowe v Electoral Commissioner ...................................................... 918

[11.270] Proportionality Analysis and the Right to Vote ...................................... 924 [11.270] Murphy v Electoral Commissioner .................................................. 924

[11.280] Freedom of Political Communication and the Electoral Process ......... 927 [11.280] Langer v Commonwealth .............................................................. 927 [11.300] Unions NSW v New South Wales ................................................... 934

[11.310] Implications from Representative Government and Other Implied Freedoms .................................................................................................. 947 [11.320] The Stolen Generation Case .......................................................... 949

IMPLIED RIGHTS AND FREEDOMS Introduction [11.10] A number of central principles of Australian Constitutional law are “implications”:

unwritten doctrines drawn from the text and structure of the Constitution. The most clearly established implications are the doctrine or concept of a federal system, which in turn gives [11.10]

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rise to doctrines of implied intergovernmental immunities (see Chapter 12), and the separation of powers, which gives rise to a range of specific doctrines, the most significant arising from the separation of the judicial power (see Chapter 13). A third implication in the Australian Constitution, an implication of representative and responsible government, is grounded in those provisions such as ss 7 and 24 of the Commonwealth Constitution (which requires that the Houses of Parliament are “directly chosen by the people”); s 64 (which by requiring that Ministers sit in Parliament provides for core element of responsible government) and s 128, which provides for amendment of the Constitution through a combination of parliamentary action and popular referendum. These provisions (and others discussed in the cases below) provide the basis for the implied “right” of freedom of political communication as well as some voting and associated rights. The nature of these implied rights, and the methods of interpretation giving rise to them are the focus of this chapter. Origins of the Implied Freedom of Political Communication [11.20] In 1992, the High Court delivered its decision in two landmark cases, Nationwide

News Pty Ltd v Wills (1992) 177 CLR 1 and Australian Capital Television Pty Ltd v Commonwealth (1992) 177 CLR 106, holding that the Australian Constitution provided impliedly for a freedom of political communication. In consequence, the Court declared invalid, in Nationwide, legislation that prohibited the use of words calculated to bring into disrepute the Industrial Relations Commission or a member of it, and in Australian Capital Television, legislation which prohibited the broadcasting of political advertising by means of radio and television during an election period. These decisions sparked significant controversy about the Court’s interpretive technique and its role as interpreter of the Constitution, spilling over into a debate that had started the year before in response to the High Court’s landmark decision on Native Title in Mabo [No 2] (1992) 175 CLR 1. The Court’s critics took the decisions as evidence of the “judicial activism” of the Court in this period.

Australian Capital Television v Commonwealth [11.30] Australian Capital Television Pty Ltd v Commonwealth (1992) 177 CLR 106 at 133–142, 169, 180-187, 214–217, 227–232 [The Political Broadcasts and Political Disclosures Act 1991 (Cth) introduced a new Pt IIID into the Broadcasting Act 1942 (Cth). The part sought to prohibit political advertising by means of radio and television. The prohibition applied to the publishing of advertisements of “political matter” and the publishing of matter on behalf of a government or government authority during an election period in relation to a federal election or referendum, a Territory election or a State or local government election. However, a broadcaster would not be prevented from broadcasting items of news or current affairs or comments on such items. Pt IIID also dealt with the granting of “free time” in relation to Commonwealth, State and Territory elections. The Australian Broadcasting Tribunal was empowered to allocate the “free time” in accordance with regulations made in respect of the election. Mason CJ, Deane, Toohey and Gaudron JJ invalidated the whole of Pt IIID; McHugh J held Pt IIID to be invalid except in its application to the Territories. Brennan J, although he supported the notion of an implied freedom of communication, upheld Pt IIID except those provisions relating to State elections. Dawson J upheld the validity of the whole of Pt IIID.]

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Australian Capital Television v Commonwealth cont. Mason CJ: 133 Constitutional implications Sir Owen Dixon noted that, following the decision in Amalgamated Society of Engineers v Adelaide Steamship Co Ltd (“the Engineers’ Case”) ((1920) 28 CLR 129), the notion seemed to gain currency that no implications could be made in interpreting the Constitution (West v Commissioner of Taxation (NSW) (1937) 56 CLR 657 at 681). The Engineers’ Case certainly did not support such a 134 draconian and unthinking approach to constitutional interpretation ((1937) 56 CLR at 682, per Dixon J). Sir Owen expressed his own opposition to that approach when he said (at 681): 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. Later, he was to say (Australian National Airways Pty Ltd v Commonwealth (1945) 71 CLR 29 at 85; see also Lamshed v Lake (1945) 99 CLR 132 at 144, per Dixon CJ): 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. Subsequently, Windeyer J, in a passage in which he referred to that statement, remarked (Victoria v Commonwealth (“the Payroll Tax Case”) (1971) 122 CLR 353 at 401–402) “implications have a place in the interpretation of the Constitution” and “our avowed task is simply the revealing or uncovering of implications that are already there.” In conformity with this approach, the Court has drawn implications from the federal structure prohibiting the Commonwealth from exercising its legislative and executive powers in such a way as to impose upon a State some special disability or burden unless the relevant power authorized that imposition or in such a way as to threaten the continued existence of a State as an independent entity or its capacity to function as such (Queensland Electricity Commission v Commonwealth (1985) 159 CLR 192 at 205, 217, 226, 231, 247, 260–262). But there is no reason to limit the process of constitutional implication to that particular source. Of course, any implication must be securely based. Thus, it has been 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” (the Engineers’ Case (1920) 28 CLR at 155, per Knox CJ, Isaacs, Rich and Starke JJ). This statement is too restrictive because, if taken literally, it would deny the very basis – the federal nature of the Constitution – from which the Court has implied restrictions on Commonwealth and State legislative powers (West v Commissioner of Taxation (NSW) (1937) 56 CLR 657; Essendon Corporation v Criterion Theatres Ltd (1947) 74 CLR 1; Melbourne Corporation v Commonwealth (1947) 74 CLR 31; Queensland Electricity Commission v Commonwealth (1985) 159 CLR 192; State Chamber of Commerce and Industry v Commonwealth (“the Second Fringe Benefits Tax Case”) (1987) 163 CLR 329). That the statement is too restrictive is 135 evident from the remarks of Dixon J in Melbourne Corporation v Commonwealth ((1947) 74 CLR at 83) where his Honour stated that “the efficacy of the system logically demands” the restriction which has been implied and that “an intention of this sort is … to be plainly seen in the very frame of the Constitution.” It may not be right to say that no implication will be made unless it is necessary. In cases where the implication is sought to be derived from the actual terms of the Constitution it may be sufficient that the relevant intention is manifested according to the accepted principles of interpretation. However, where the implication is structural rather than textual it is no doubt correct to say that the term sought to be implied must be logically or practically necessary for the preservation of the integrity of that structure. It is essential to keep steadily in mind the critical difference between an implication and an unexpressed assumption upon which the framers proceeded in drafting the Constitution (Australian National Airways Pty Ltd v Commonwealth (1945) 71 CLR at 81, per Dixon J). The former is a term or concept which inheres in the instrument and as such operates as part of the instrument, whereas an assumption stands outside the instrument. Thus, the founders assumed that the Senate would protect the States but in the result, it did not do so. On the other hand, the principle of responsible [11.30]

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Australian Capital Television v Commonwealth cont. government – the system of government by which the executive is responsible to the legislature – is not merely an assumption upon which the actual provisions are based; it is an integral element in the Constitution (the Engineers’ Case (1920) 28 CLR at 147, per Knox CJ, Isaacs, Rich and Starke JJ). In the words of Isaacs J in Commonwealth v Kreglinger & Fernau Ltd and Bardsley ((1926) 37 CLR 393 at 413): “It is part of the fabric on which the written words of the Constitution are superimposed.” The implication of fundamental rights The adoption by the framers of the Constitution of the principle of responsible government was perhaps the major reason for their disinclination to incorporate in the Constitution comprehensive 136 guarantees of individual rights (“[T]he Australian Constitution is built upon confidence in a system of parliamentary Government with ministerial responsibility”: Attorney-General (Cth) (Ex rel McKinlay) v Commonwealth (1975) 135 CLR 1 at 24, per Barwick CJ). They refused to adopt a counterpart to the Fourteenth Amendment to the Constitution of the United States. Sir Owen Dixon said (Two Constitutions Compared, Jesting Pilate (1965), p 102): [they] were not prepared to place fetters upon 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 the need of provisions directed to control of the legislature itself. The framers of the Constitution accepted, in accordance with prevailing English thinking, that the citizen’s rights were best left to the protection of the common law in association with the doctrine of parliamentary supremacy (A Mason, “The Role of a Constitutional Court in a Federation” (1986) 16 Federal Law Review 1 at 8). So it was that Professor Harrison Moore, writing in 1901, was able to say of the Constitution (The Constitution of the Commonwealth of Australia, 1st ed (1902), p 329): 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. In the light of this well recognized background, it is difficult, if not impossible, to establish a foundation for the implication of general guarantees of fundamental rights and freedoms. To make such an implication would run counter to the prevailing sentiment of the framers that there was no need to incorporate a comprehensive Bill of Rights in order to protect the rights and freedoms of citizens. That sentiment was one of the unexpressed assumptions on which the Constitution was drafted. However, the existence of that sentiment when the Constitution was adopted and the influence which it had on the shaping of the Constitution are no answer to the case which the plaintiffs now present. Their case is that a guarantee of freedom of expression in relation to public and political affairs must necessarily be implied from the provision which the Constitution makes for a system of representative government. The plaintiffs say that, because such a freedom is an essential concomitant of representative government, it is necessarily implied in the prescription of that system. 137 Representative government The Constitution provided for representative government by creating the Parliament, consisting of the Queen, a House of Representatives and a Senate, in which legislative power is vested (s 1), the members of each House being elected by popular vote, and by vesting the executive power in the Queen and making it exercisable by the Governor-General on the advice of the Federal Executive Council (ss 61, 62), consisting of the Queen’s Ministers of State drawn, subject to a minor qualification, from the House of Representatives and the Senate (s 64. “After the first general election no Minister 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.”). In the case of the Senate, s 7 provides that it “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”. In the case of the House of Representatives, s 24 828

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Australian Capital Television v Commonwealth cont. provides that it “shall be composed of members directly chosen by the people of the Commonwealth”. Although s 24 contains no reference to voting, s 25 makes it clear that “chosen” means “chosen by vote at an election”. In Attorney-General (Cth) (Ex rel McKinlay) v Commonwealth ((1975) 135 CLR at 55–56), Stephen J discerned in these two provisions the principles of representative democracy (by which he meant that the legislators are directly chosen by the people) and direct popular election. The correctness of his Honour’s view is incontestable, notwithstanding that the Constitution does not prescribe universal adult suffrage. Such a suffrage did not exist at that time. Although prescription of the qualifications of electors was left for the ultimate determination of the Parliament (ss 8, 30), the Constitution nonetheless brought into existence a system of representative government in which those who exercise legislative and executive power are directly chosen by the people. The Governor-General, though the repository of executive power, does not personally exercise that power, being bound to act with the advice of the Executive Council (it should be noted that the notion of representative government leaves out of account the judicial branch of government). The very concept of representative government and representative democracy signifies government by the people through their representatives. Translated into constitutional terms, it denotes that the sovereign power which resides in the people is exercised on their behalf by their representatives. In the case of the Australian 138 Constitution, one obstacle to the acceptance of that view is that the Constitution owes its legal force to its character as a statute of the Imperial Parliament enacted in the exercise of its legal sovereignty; the Constitution was not a supreme law proceeding from the people’s inherent authority to constitute a government (Sir Owen Dixon, “The Law and the Constitution” (1935) 51 Law Quarterly Review 590 at 597), notwithstanding that it was adopted, subject to minor amendments, by the representatives of the Australian colonies at a Convention and approved by a majority of the electors in each of the colonies at the several referenda. Despite its initial character as a statute of the Imperial Parliament, the Constitution brought into existence a system of representative government for Australia in which the elected representatives exercise sovereign power on behalf of the Australian people. Hence, the prescribed procedure for amendment of the Constitution hinges upon a referendum at which the proposed amendment is approved by a majority of electors and a majority of electors in a majority of the States (s 128). And, most recently, the Australia Act 1986 (UK) marked the end of the legal sovereignty of the Imperial Parliament and recognized that ultimate sovereignty resided in the Australian people (Lindell, “Why is Australia’s Constitution Binding? – The Reasons in 1900 and Now, and the Effect of Independence” (1986) 16 Federal Law Review 29 at 49). The point is that the representatives who are members of Parliament and Ministers of State are not only chosen by the people but exercise their legislative and executive powers as representatives of the people. And in the exercise of those powers the representatives of necessity are accountable to the people for what they do and have a responsibility to take account of the views of the people on whose behalf they act. Freedom of communication as an indispensable element in representative government Indispensable to that accountability and that responsibility is freedom of communication, at least in relation to public affairs and political discussion. Only by exercising that freedom can the citizen communicate his or her views on the wide range of matters that may call for, or are relevant to, political action or decision. Only by exercising that freedom can the citizen criticize government decisions and actions, seek to bring about change, call for action where none has been taken and in this way influence the elected representatives. By these means the elected representatives are equipped to discharge their role so that they may take account of 139 and respond to the will of the people. Communication in the exercise of the freedom is by no means a one-way traffic, for the elected representatives have a responsibility not only to ascertain the views of the electorate but also to explain and account for their decisions and actions in government and to inform the people so that they may make informed judgments on relevant matters. Absent such a freedom of communication, representative government would fail to achieve its purpose, namely, government by the people through their elected representatives; government would cease to be responsive to the needs and wishes of the people and, in that sense, would cease to be truly representative. [11.30]

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Australian Capital Television v Commonwealth cont. Freedom of communication in relation to public affairs and political discussion cannot be confined to communications between elected representatives and candidates for election on the one hand and the electorate on the other. The efficacy of representative government depends also upon free communication on such matters between all persons, groups and other bodies in the community. That is because individual judgment, whether that of the elector, the representative or the candidate, on so many issues turns upon free public discussion in the media of the views of all interested persons, groups and bodies and on public participation in, and access to, that discussion (Lord Simon of Glaisdale made the point in Attorney-General v Times Newspapers Ltd, [1974] AC 273 at 315, when he said: “People cannot adequately influence the decisions which affect their lives unless they can be adequately informed on facts and arguments relevant to the decisions. Much of such fact-finding and argumentation necessarily has to be conducted vicariously, the public press being a principal instrument.”). In truth, in a representative democracy, public participation in political discussion is a central element of the political process. Archibald Cox made a similar point when he said (The Court and the Constitution (1987), p 212): Only by uninhibited publication can the flow of information be secured and the people informed concerning men, measures, and the conduct of government … Only by freedom of speech, of the press, and of association can people build and assert political power, including the power to change the men who govern them. The last sentence in the passage just quoted is a striking comment on Professor Harrison Moore’s statement that “[t]he great underlying principle” of the Constitution (The Constitution of the Commonwealth of Australia, op cit, p 329) was that the rights of individuals were sufficiently secured by ensuring each an equal share 140 in political power. Absent freedom of communication, there would be scant prospect of the exercise of that power. The fundamental importance, indeed the essentiality, of freedom of communication, including freedom to criticize government action, in the system of modern representative government has been recognized by courts in many jurisdictions. … Implication of a guarantee of freedom of communication on matters relevant to public affairs and political discussion Freedom of communication in the sense just discussed is so indispensable to the efficacy of the system of representative government for which the Constitution makes provision that it is necessarily implied in the making of that provision. Much the same view was taken in Canada under the British North America Act 1867 (IMP) (30 & 31 Vict c 3) which contained no express guarantee of freedom of speech or freedom of communication. … 141 … In the result, to repeat the words of McIntyre J in Retail, Wholesale & Department Store Union, Local 580 v Dolphin Delivery Ltd ([1986] 2 SCR 573; (1986) 33 DLR (4th) at 584 (SCR), 184), it may now be said that “[p]rior to the adoption of the Charter, freedom of speech and expression had been recognized as an essential feature of Canadian parliamentary democracy.” … 142 The indivisibility of freedom of communication in relation to public affairs and political discussion The concept of freedom to communicate with respect to public affairs and political discussion does not lend itself to subdivision. Public affairs and political discussion are indivisible and cannot be subdivided into compartments that correspond with, or relate to, the various tiers of government in Australia. Unlike the legislative powers of the Commonwealth Parliament, there are no limits to the range of matters that may be relevant to debate in the Commonwealth Parliament or to its workings. The consequence is that the implied freedom of communication extends to all matters of public affairs and political discussion, notwithstanding that a particular matter at a given time might appear to have a primary or immediate connexion with the affairs of a State, a local authority or a Territory and little or no connexion with Commonwealth affairs. Furthermore, there is a continuing inter-relationship between the various tiers of government. To take one example, the Parliament provides funding for the State governments, Territory governments and local governing bodies and enterprises. That continuing inter-relationship makes it inevitable that matters of local concern have the potential to 830

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Australian Capital Television v Commonwealth cont. become matters of national concern. That potential is in turn enhanced by the predominant financial power which the Commonwealth Parliament and the Commonwealth government enjoy in the Australian federal system (Mason, loc cit, p 14). Deane and Toohey JJ: 169 It is necessary, for the purposes of the present case, to reach a firm view on the question whether the Constitution’s implication of freedom of communication extends to all political matters, including matters relating to other levels of government, within the national system which exists under the Constitution. In our view, for the reasons given in the above passage and by Gaudron J in her judgment in the present case, it does. The implication of freedom of communication about the government of the Commonwealth is not an implication of an absolute and uncontrolled licence (see Nationwide News at 76–77). It is an implication of freedom under the law of an ordered and democratic society. In determining whether a purported law conflicts with the implication, regard must be had to the character of the impugned law. In particular, a law whose character is that of a law with respect to the prohibition or restriction of communications about government or governmental instrumentalities or institutions (“political communications”) will be much more difficult to justify as consistent with the implication than will a law whose character is that of a law with respect to some other subject and whose effect on such communications is unrelated to their nature as political communications. A law prohibiting or restricting political communications by reference to their character as such will be consistent with the prima facie scope of the implication only if, viewed in the context of the standards of our society, it is justified as being in the public interest for the reason that the prohibitions and restrictions on political communications which it imposes are either conducive to the overall availability of the effective means of such communications (see, eg, Miller v TCN Channel Nine Pty Ltd (1986) 161 CLR 556 at 567, 591, 597–598, 629–630; Red Lion Broadcasting Co v FCC (1969), 395 US 367 (1969) at 375–377) or do not go beyond what is reasonably necessary for the preservation of an ordered and democratic society or for the protection or vindication of the legitimate claims of individuals to live peacefully and with dignity within such a society. Gaudron J: 214 The operation of the implied freedom of political discourse It is uncontroversial that the federal nature of the Commonwealth and the separation of the federal judiciary from the other arms of government provide the basis for important constitutional implications (see fns (95) and (96)). The nature and scope of those implications have not 215 been fully determined (see, with respect to the implications to be drawn from federalism, State Chamber of Commerce and Industry v Commonwealth (“the Second Fringe Benefits Tax Case”) (1987) 163 CLR 329 at 358, per Brennan J). However, it is settled that a limitation is not to be implied in the grant of constitutional power if the words of the grant can be construed without it (see Amalgamated Society of Engineers v Adelaide Steamship Co Ltd (1920) 28 CLR 129 at 154, per Knox CJ, Isaacs, Rich and Starke JJ; p 162, per Higgins J). Thus, but as specified in s 51, “subject to [the] Constitution”, the legislative powers conferred by that section must be given their full meaning and operation. The federal nature of the Constitution and the separation of the federal judiciary from the other arms of government are part of the Constitution, even though the Constitution does not contain prescriptive provision with respect to either matter. So too, the detailed provisions with respect to elections reveal that the Constitution is for a Commonwealth which is a free society governed in accordance with the principles of representative parliamentary democracy even though that is not stated in terms. Because s 51 confers power “subject to [the] Constitution”, the legislative power conferred by that section is confined by that consideration as well as by the federal nature of the Constitution and the separation of the federal judiciary from the other arms of government. So far as is presently relevant, s 51 does not authorize laws which are inconsistent with the free and democratic nature of the Commonwealth. Thus, but subject to what is said as to regulation, the power conferred by s 51 does not extend to the making of laws that impair the free flow of information and ideas on matters falling within the area of political discourse. [11.30]

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Australian Capital Television v Commonwealth cont. The subject matter of the freedom of political discourse Obviously, the Constitution does not postulate a society that is free and democratic only at election time. Nor, but perhaps not so obviously, does it postulate a society that is free and democratic only with respect to matters which the Constitution entrusts to the Commonwealth. Of course, that much is necessarily contemplated and, as the matters entrusted to the Commonwealth include the power conferred by s 122 to make laws for the government of its Territories, the freedom of political discourse necessarily extends to every aspect of Territory government, including Territory elections. However, there is a discrete question whether the power conferred by s 122, which is not expressed to be subject to the Constitution, 216 may be exercised free of the prohibition deriving from the implied freedom of political discourse (see, with respect to constitutional guarantees and prohibitions and their relationship with s 122, Buchanan v Commonwealth (1913) 16 CLR 315; R v Bernasconi (1915) 19 CLR 629; Lamshed v Lake (1958) 99 CLR 132; Spratt v Hermes (1965) 114 CLR 226; Capital TV & Appliances Pty Ltd v Falconer (1971) 125 CLR 591; Attorney-General (Vic) (Ex rel Black) v Commonwealth (1981) 146 CLR 559). That is not a question that need be answered in this case. There are three matters which dictate that freedom of political discourse extends beyond Commonwealth and Territory affairs. The first is that the distribution of powers and functions between the Commonwealth and the States is not immutable. Section 51(xxxvii) of the Constitution expressly contemplates that matters which the Constitution leaves with the States may be referred to the Parliament of the Commonwealth and may, when referred, be the subject of Commonwealth legislative power. Moreover, and more importantly, s 128 recognizes that the Constitution and, hence, the federal arrangements depend on the will of the people and may be altered by the people in accordance with the procedures there laid down. The power of the States to refer matters to the Commonwealth and the power of the people to change the Constitution require that freedom of political discourse extend to every aspect of the federal arrangements, including the powers of the States and the manner of their exercise. The second matter requiring that the freedom of political discourse should extend to State matters is the nature of the federal compact. That compact is such that the exercise of power by the Commonwealth will, in very many cases, impact upon the States, either because of the economic relationship between them and the Commonwealth or because of the operation of s 109 of the Constitution. Equally, although perhaps not so often, the exercise or non-exercise by a State of its powers may be a factor influencing decisions as to the exercise of Commonwealth power. The third and final matter which requires that the freedom of political discourse should extend to the affairs of the States is that the Constitution expressly recognizes their Constitutions (Constitution, s 106), their Parliaments (Constitution, ss 107, 108. Sections 111, 123, 124 recognize State Parliaments insofar as their consent is required for, respectively, the surrender of State territory, the alteration of State limits and the formation of new States) and their electoral processes (Constitution, ss 9, 10, 15, 25, 29, 30, 31, 41, 123, 128) and, in so doing, necessarily recognizes their democratic nature. 217 Given the interrelationship of State and Commonwealth powers and the recognition in the Constitution of the States’ democratic processes, the freedom of political discourse must be seen as extending to matters within the province of the States. The freedom thus involves, at the very least, the free flow of information and ideas bearing on Commonwealth, State and Territory government, government arrangements and institutions, matters within the province of Commonwealth, State and Territory governments, their agencies and institutions, those persons who are or would be members of their Parliaments and other institutions of government and such political parties or organizations that exist to promote their cause … McHugh J: 227 When the Constitution is read as a whole and in the light of the history of constitutional government in Great Britain and the Australian colonies before federation, the proper conclusion to be drawn from the terms of ss 7 and 24 of the Constitution is that the people of Australia have constitutional rights of freedom of participation, association and communication in relation to federal elections… 229 The words “directly chosen by the people” in ss 7 and 24 of the 230 Constitution have to be interpreted against the background of the institutions of representative 832

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Australian Capital Television v Commonwealth cont. government and responsible government to which the Constitution gives effect but does not specifically mention. The words of ss 7 and 24 must be construed by reference to the conceptions of representative government and responsible government as understood by informed people in Australia at the time of federation. In Commonwealth v Kreglinger & Fernau Ltd and Bardsley ((1926) 37 CLR at 411–412), Isaacs J said: it is the duty of this Court, as the chief judicial organ of the Commonwealth, to take judicial notice, in interpreting the Australian Constitution, of every fundamental constitutional doctrine existing and fully recognized at the time the Constitution was passed, and therefore to be taken as influencing the meaning in which its words were used by the Imperial Legislature. His Honour went on to say (at 413) in that case that the principle of responsible government is “part of the fabric on which the written words of the Constitution are superimposed”. Representative government involves the conception of a legislative chamber whose members are elected by the people. But, as Birch points out (Representative and Responsible Government (1964), p 17), to have a full understanding of the concept of representative government, “we need to add that the chamber must occupy a powerful position in the political system and that the elections to it must be free, with all that this implies in the way of freedom of speech and political organization”. Furthermore, responsible government involves the conception of a legislative chamber where the Ministers of State are answerable ultimately to the electorate for their policies. As Sir Samuel Griffith pointed out in his Notes on Australian Federation ((1896), p 17), the effect of responsible government “is that the actual government of the State is conducted by officers who enjoy the confidence of the people”. It is not to be supposed, therefore, that, in conferring the right to choose their representatives by voting at periodic elections, the Constitution intended to confer on the people of Australia no more than the right to mark a ballot paper with a number, a cross or a tick, as the case may be. The “share in the government which the Constitution ensures” would be but a pious aspiration unless ss 7 231 and 24 carried with them more than the right to cast a vote. The guarantees embodied in ss 7 and 24 could not be satisfied by the Parliament requiring the people to select their representatives from a list of names drawn up by government officers. If the institutions of representative and responsible government are to operate effectively and as the Constitution intended, the business of government must be examinable and the subject of scrutiny, debate and ultimate accountability at the ballot box. The electors must be able to ascertain and examine the performances of their elected representatives and the capabilities and policies of all candidates for election. Before they can cast an effective vote at election time, they must have access to the information, ideas and arguments which are necessary to make an informed judgment as to how they have been governed and as to what policies are in the interests of themselves, their communities and the nation. As the Supreme Court of the United States pointed out in Buckley v Valeo (424 US 1 (1976) at 14–15), the ability of the people to make informed choices among candidates for political office is fundamental because the identity of those who are elected will shape the nation’s destiny. It follows that the electors must be able to communicate with the candidates for election concerning election issues and must be able to communicate their own arguments and opinions to other members of the community concerning those issues. Only by the spread of information, opinions and arguments can electors make an effective and responsible choice in determining whether or not they should vote for a particular candidate or the party which that person represents. Few voters have the time or the capacity to make their own examination of the raw material concerning the business of government, the policies of candidates or the issues in elections even if they have access to that material. As Lord Simon of Glaisdale pointed out in Attorney-General v Times Newspapers ([1974] AC 273 at 315): [11.30]

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Australian Capital Television v Commonwealth cont. People cannot adequately influence the decisions which affect their lives unless they can be adequately informed on facts and arguments relevant to the decisions. Much of such fact-finding and argumentation necessarily has to be conducted vicariously, the public press being a principal instrument. The words “directly chosen by the people” in ss 7 and 24, interpreted against the background of the institutions of representative government and responsible government, are to be read, therefore, as referring to a process – the process which commences 232 when an election is called and ends with the declaration of the poll. The process includes all those steps which are directed to the people electing their representatives – nominating, campaigning, advertising, debating, criticizing and voting. In respect of such steps, the people possess the right to participate, the right to associate and the right to communicate. That means that, subject to necessary exceptions, the people have a constitutional right to convey and receive opinions, arguments and information concerning matter intended or likely to affect voting (see the definition of “political matter” in ss 95B, 95C and 95D of the Act) in an election for the Senate or the House of Representatives. Moreover, that right must extend to the use of all forms and methods of communication which are lawfully available for general use in the community. To fail to give effect to the rights of participation, association and communication identifiable in ss 7 and 24 would be to sap and undermine the foundations of the Constitution. It may be that the rights to convey and receive opinions, arguments and information conferred by ss 7 and 24 are not confined to the period of an election for the Senate and House of Representatives. It may be that the rights inherent in those sections are simply part of a general right of freedom of communication in respect of the business of government of the Commonwealth. In that connexion it is significant that it was recognized early on that, by necessary implication, the Constitution gave rights of access to federal officials and records. In The Annotated Constitution of the Australian Commonwealth, published in 1901, Quick and Garran pointed out (p 958): To be allowed to visit the seat of Government, to gain access to Federal territories, to petition the Federal authorities, to examine the public records of the Federal Courts and institutions, are rights which, if not expressly granted, may be inferred from the Constitution, and which could not be taken away or abridged by the States any more than those directly and clearly conveyed. [Dawson J dissented on the grounds that the Constitution contained no implication giving rise to an implied freedom of political communication. He said] 180 The Constitution is contained in an Act of the Imperial Parliament: the Commonwealth of Australia Constitution Act (63 & 64 Vict c 12). Notwithstanding that this Act was preceded by the agreement of the people of New South Wales, Victoria, South Australia, 181 Queensland and Tasmania “to unite in one indissoluble Federal Commonwealth”, the legal foundation of the Constitution is the Act itself which was passed and came into force in accordance with antecedent law. And the Constitution is itself a law declared by the Imperial Parliament to be “binding on the courts, judges, and people of every State and of every part of the Commonwealth” (covering cl 5 to the Constitution). It does not purport to obtain its force from any power residing in the people to constitute a government, nor does it involve any notion of the delegation of power by the people such as forms part of American constitutional doctrine. The words in the United States Constitution “We the People of the United States … do ordain and establish this Constitution for the United States of America” find no counterpart in the Australian Constitution; indeed, such words would entirely belie the manner of its foundation. No doubt it may be said as an abstract proposition of political theory that the Constitution ultimately depends for its continuing validity upon the acceptance of the people, but the same may be said of any form of government which is not arbitrary. The legal foundation of the Australian Constitution is an exercise of sovereign power by the Imperial Parliament. The significance of this in the interpretation of the Constitution is that the Constitution is to be construed as a law passed pursuant to the legislative power to do so. If implications are to be drawn, they must appear from the terms of the instrument itself and not from extrinsic circumstances. Thus in Queensland Electricity Commission v Commonwealth Brennan J observed ((1985) 159 CLR 192 at 231): 834

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Australian Capital Television v Commonwealth cont. The Constitution summoned the Federation into existence and maintains it in being. Any implication affecting the specific powers granted by the Constitution must be drawn from the Constitution itself. It is impermissible to construe the terms of the Constitution by importing an implication from extrinsic sources when there is no federation save that created by the express terms of the Constitution itself. That passage reflects what was said earlier by the majority in the Engineers’ Case in rejecting a mode of interpretation said to be adopted in previous cases (Amalgamated Society of Engineers v Adelaide Steamship Co Ltd (1920) 28 CLR 129 at 145): 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 182 any recognized principle of the common law of the Constitution, and which, when stated, 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. I have previously observed (Brown v Queen (1986) 160 CLR 171 at 214) that the Australian Constitution, with few exceptions and in contrast with its American model, does not seek to establish personal liberty by constitutional restrictions upon the exercise of governmental power. The choice was deliberate and based upon a faith in the democratic process to protect Australian citizens against unwarranted incursions upon the freedoms which they enjoy (see, eg, the debate resulting in the rejection of an amendment to insert a due process clause: Official Record of the Debates of the Australasian Federal Convention (Melbourne, 8 February 1898), esp pp 688–690. See also AttorneyGeneral (Cth) (Ex rel McKinlay) v Commonwealth (1975) 135 CLR 1 at 24). This was recognized by the majority in the Engineers’ Case in the following passage ((1920) 28 CLR at 151–152): [T]he extravagant use of the granted powers in the actual 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. Thus the Australian Constitution, unlike the Constitution of the United States, does little to confer upon individuals by way of positive rights those basic freedoms which exist in a free and democratic society. They exist, not because they are provided for, but in the absence of any curtailment of them. Freedom of speech, for example, which is guaranteed in the United States by the First Amendment to the Constitution, is a concept which finds no expression in our Constitution, notwithstanding that it is as much the foundation of a free society here as it is there. The right to freedom of speech exists here because there is nothing to prevent its exercise and because governments recognize that if they attempt to 183 limit it, save in accepted areas such as defamation or sedition, they must do so at their peril. Not only that, but courts recognize the importance of the basic immunities and require the clearest expression of intention before construing legislation in such a way as to interfere with them (see, eg, Re Bolton; Ex parte Beane (1987) 162 CLR 514 at 523). The fact, however, remains that in this country the guarantee of fundamental freedoms does not lie in any constitutional mandate but in the capacity of a democratic society to preserve for itself its own shared values. As I have said, the interpretation of the Australian Constitution is the interpretation of a statute of the Imperial Parliament. But, as Windeyer J pointed out in the Payroll Tax Case (Victoria v Commonwealth (1971) 122 CLR 353 at 394–395), that does not mean that it is not a statute of a special kind. Windeyer J quoted the words of Higgins J in the Brewery Labels Case (Attorney-General (NSW) (Ex rel Tooth & Co Ltd) v Brewery Employees’ Union of NSW (1908) 6 CLR 469 at 611–612; see also Bank of NSW [11.30]

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Australian Capital Television v Commonwealth cont. v Commonwealth (1948) 76 CLR 1 at 332) – words whose vitality he regarded as not diminished by their having been said in the course of a dissenting judgment: 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. … 184 It will be apparent from what I have already said that, in my view, there is no warrant in the Constitution for the implication of any guarantee of freedom of communication which operates to confer rights upon individuals or to limit the legislative power of the Commonwealth. It may be remarked in passing that even if a guarantee limiting Commonwealth legislative power were to exist by implication, it could have only a limited effect upon States in the exercise of their concurrent legislative powers. In expressing the view which I do, I do not mean to suggest that the legislative powers of the Commonwealth under s 51 may not be limited by implications drawn from other provisions of the Constitution or from the terms of the Constitution as a whole. The powers conferred by s 51 are expressed to be “subject to this Constitution” and that expression encompasses implied limitations as well as those which are express. There is, for example, the implication drawn from the federal structure of the Constitution that prevents the Commonwealth from legislating in a way that discriminates against the States by imposing special burdens or disabilities upon them or in a way which curtails their capacity to exercise for themselves their constitutional functions (see Queensland Electricity Commission v Commonwealth (1985) 159 CLR 192). Section 1 of the Constitution provides that the legislative power of the Commonwealth shall be vested in a Federal Parliament consisting of the Queen, a Senate and a House of Representatives. Section 7 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. Section 24 provides that the House of Representatives shall be composed of members directly chosen by the people of the Commonwealth, and that the number of such members shall be, as nearly as practicable, twice the number of the senators. There is to be seen in these provisions the principle of representative democracy in a form involving direct popular election (see Attorney-General (Cth) (Ex rel McKinlay) v Commonwealth (1975) 135 CLR at 56). In addition to representative democracy there is also written into the Constitution the principle of responsible government (see ss 62, 64). It is true that no attempt was made to spell out what responsible government entails – that was felt to be an impossible task – but there is sufficient to make it readily apparent that the system adopted was that of responsible government, that is, the system by which the executive is responsible to the 185 legislature and, through it, to the electorate. That has never been doubted. In the Engineers’ Case ((1920) 28 CLR at 146) the principle of responsible government was described as pervading the Constitution (see also Commonwealth v Kreglinger & Fernau Ltd and Bardsley (1926) 37 CLR 393 at 411; Victorian Stevedoring & General Contracting Co Pty Ltd and Meakes v Dignan (1931) 46 CLR 73 at 114; New South Wales v Commonwealth (1975) 135 CLR 337 at 364–365). And in the Boilermakers’ Case (R v Kirby; Ex parte Boilermakers’ Society of Australia (1956) 94 CLR 254 at 275) it was referred to as “the central feature of the Australian constitutional system”. But much is left to the Parliament concerning the details of the electoral system to be employed in achieving representative democracy. For example, the Constitution does not guarantee universal adult suffrage (see ss 8, 30). And, subject to the Constitution, the method of electing members of Parliament and the determination of electoral divisions also rest with the Parliament (see ss 10, 29, 31). Having said that, it must nevertheless be recognized that the Constitution provides for a Parliament the members of which are to 187 be directly chosen by the people – in the case of the Senate by the people of the respective States and in the case of the House of Representatives by the people of the Commonwealth. Thus the Constitution provides for a choice and that must mean a true choice. It may be said – at all events in the context of an election – that a choice is not a true choice when it is made without an appreciation of the available alternatives or, at least, without an opportunity to gain an appreciation of the available alternatives. As Windeyer J observed in Australian Consolidated Press Ltd v 836

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Australian Capital Television v Commonwealth cont. Uren ((1966) 117 CLR 185 at 210): “[f]reedom at election time to praise the merits and policies of some candidates and to dispute and decry those of others is an essential of parliamentary democracy.” Perhaps the freedom is one which must extend beyond the election time to the period between elections, but that is something which it is unnecessary to consider in this case. It is enough to recognize, as this Court did in Evans v Crichton-Browne ((1981) 147 CLR 169 at 206), the importance of ensuring that freedom of speech is not unduly restricted during an election period. Thus an election in which the electors are denied access to the information necessary for the exercise of a true choice is not the kind of election envisaged by the Constitution. Legislation which would have the effect of denying access to that information by the electors would therefore be incompatible with the Constitution.

[11.40]

1.

Notes&Questions

Although Justice Brennan had accepted in Nationwide News Pty Ltd v Wills (1992) 177 CLR 1 that the Constitution gave rise to an implication that guarantees freedom of political communication, he upheld the law in Australian Capital Television Pty Ltd v The Commonwealth (1992) 177 CLR 106 on the grounds that it was a reasonable limitation on political communication. He noted (at 148) that the Broadcasting Act 1942 (Cth) was amended to include Pt IIID after reports by two Parliamentary Committees expressed concerns about the reliance of political parties on large corporate donors to meet the costs of electronic advertising. He also noted (at 155) that limitations on political advertising were commonplace among democracies. His Honour therefore held (at 161): It was open to the Parliament to conclude, as the experience of the majority of liberal democracies has demonstrated, that representative government can survive and flourish without paid political advertising on the electronic media during election periods. The restrictions imposed by s 95B are comfortably proportionate to the important objects which it seeks to obtain. The obtaining of those objects would go far to ensuring an open and equal democracy. The openness of political discussion and the equality of the participants in the democratic process makes governments responsive to the popular will. The restrictions on advertising do little to inhibit the democratic process. In my view, the implied limitation on the legislative powers supporting s 95B is not trespassed upon by the restrictions which it imposes.

2.

By contrast, the members of the majority in Australian Capital Television Pty Ltd v The Commonwealth (1992) 177 CLR 106 held that the “free time” provisions of Pt IIID defeated the claim that the law operated to maintain a “level playing field”. Mason CJ held (at 132): It is obvious that the provisions of Div 3 regulating the allocation of free time give preferential treatment to political parties represented in the preceding Parliament or legislature which are contesting the relevant election with at least the prescribed number of candidates. Their entitlement amounts to 90 per cent of the total free time. Others must of necessity rely on the exercise of discretion by the Tribunal. As among the political parties, the principle of allocation to be applied will tend to favour the party or parties in government because it gives weight to the first preference voting in the preceding election. Furthermore, a senator who seeks re-election is given preferential treatment over a candidate, not being a senator, who stands for election to the Senate. The former, but not the latter, is entitled to a grant of free time. The latter must rely on an exercise of discretion by the Tribunal and the Act makes no attempt to enunciate the criteria according to which that discretion is to be exercised. The provisions of Pt IIID [11.40]

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manifestly favour the status quo. More than that, the provisions regulating the allocation of free time allow no scope for participation in the election campaign by persons who are not candidates or by groups who are not putting forward candidates for election. Employers’ organizations, trade unions, manufacturers’ and farmers’ organizations, social welfare groups and societies generally are excluded from participation otherwise than through the means protected by s 95A. The consequence is that freedom of speech or expression on electronic media in relation to public affairs and the political process is severely restricted by a regulatory regime which evidently favours the established political parties and their candidates without securing compensating advantages or benefits for others who wish to participate in the electoral process or in the political debate which is an integral part of that process.

3.

4.

On the “free time provisions”, see also Deane and Toohey JJ (at 172, 175-176) and Gaudron J (at 221). Judgment in Nationwide News v Wills (1992) 177 CLR 1 was delivered on the same day as Australian Capital Television Pty Ltd v The Commonwealth (1992) 177 CLR 106. In Nationwide News, information was laid by the Australian Federal Police against the applicant, because a newspaper owned and published by it had published an article which contained “a virulent attack on the integrity and independence” of the Industrial Relations Commission. It was alleged that the article had used words which were calculated to bring the Commission into disrepute and, accordingly, an offence against s 299(1)(d)(ii) of the Industrial Relations Act 1988 (Cth) had been committed. The High Court unanimously held s 299(1)(d)(ii) to be invalid. The majority of the Court (Brennan, Deane, Toohey and Gaudron JJ) relied on a constitutional implication which guarantees the freedom of political expression. Mason CJ, McHugh and Dawson JJ, who focused on the characterisation process, held that s 299(1) was beyond the power of the Commonwealth by relying upon freedom of speech as a limit upon the incidental power. On this point, Mason CJ (at 29–31) and McHugh J (at 101) made specific reference to Davis v Commonwealth (1988) 166 CLR 79. Although many aspects of the framing of the Commonwealth Constitution were influenced by the United States Constitution, the Australian constitutional framers chose deliberately not to incorporate a Bill of Rights. Does their decision undermine the arguments for implying a guarantee of political communication? Consider the following remarks of Mason CJ in Australian Capital Television Pty Ltd v Commonwealth (1992) 177 CLR 106 at 136: [I]t is difficult, if not impossible, to establish a foundation for the implication of general guarantees of fundamental rights and freedoms. To make such an implication would run counter to the prevailing sentiment of the framers that there was no need to incorporate a comprehensive Bill of Rights in order to protect the rights and freedoms of citizens. That sentiment was one of the unexpressed assumptions on which the Constitution was drafted.

The response of Deane J in Theophanous v Herald & Weekly Times Ltd (1994) 182 CLR 104 to this argument was as follows (at 160–167): [I]t would seem desirable to make specific reference to an argument which has been increasingly advanced in recent times and which invokes what is said to have been the intention of the framers of the Constitution. In summary, that argument is to the effect that the failure of those framers to follow the United States example of including an express catalogue or “bill” of “rights” demonstrates that it was their intention that such constitutional “rights” should not be implied from the terms or doctrines of the Constitution but should be left to be determined by the common law as developed or altered by the various legislatures in the exercise of the legislative powers which the Constitution either created or preserved. That argument, or some variation of it, would 838

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seem to constitute the true basis of the contention that the Constitution’s implication of freedom of political communication and discussion should be confined so that it only applies to limit the content of Commonwealth legislative powers and does not extend to confer complete or partial immunity from the operation of otherwise valid State laws. With due respect to those who see the matter differently, the argument seems to me to be flawed at every step it takes beyond the obvious facts that our Constitution does not incorporate a “Bill of Rights” of the type contained in the United States model and that the framers of our Constitution had confidence in the common law. For one thing, the argument reverses ordinary principles of construction. For another, it imputes to the framers of our Constitution an intention which it would seem they did not have. Most important, the argument seems to me to adopt a theory of construction of the Constitution which unjustifiably devitalizes its provisions by effectively treating its long dead framers rather than the living people as the source of its legitimacy.

Mason CJ in Theophanous remarked (at 128): [W]hat the framers of the Constitution thought, but did not provide in the Constitution, 100 years ago is hardly a sure guide in the very different circumstances which prevail today … The beliefs of the founders at the end of the last century … cannot limit the content of an implication to be drawn from the Constitution.

5.

6.

Compare the views of Professor Jeffrey Goldsworthy, who has developed a sustained and detailed defense of originalism. See Jeffrey Goldsworthy, “Originalism in Constitutional Interpretation” (1997) 25 Federal Law Review 1. The freedom of political communication is derived by implication from the Constitution. Has the High Court in Nationwide News and Australian Capital Television undermined the reasoning in Engineers’ Case? Consider the following observations of Sir Anthony Mason: All this is not to say that the Engineers’ Case is dead. Far from it. The Engineers’ Case survived as an authority for an approach to constitutional interpretation which discarded old notions of State sovereignty and State reserved powers and replaced them with the recognition of the paramountcy of Commonwealth legislative power under the Constitution, together with an emphasis on legalism or legal formalism. But much of the Engineers’ Case’s flimsy argumentation against implication was brushed aside by Dixon J, whose approach subsequently held the field. (Sir Anthony Mason, “The Interpretation of a Constitution in a Modern Liberal Democracy” in C Sampford and K Preston (eds), Interpreting Constitutions: Theories, Principles and Institutions (Federation Press, Sydney, 1996), p 25. Compare G Williams, “Engineers is Dead, Long Live the Engineers!” (1995) 17 Sydney Law Review 62.)

7.

For academic critiques of Australian Capital Television, see Nicholas Aroney “A Seductive Plausibility: Freedom of Speech in the Constitution” (1995) 18 University of Queensland Law Review 249; J Goldsworthy, “Implications in Language, Law and the Constitution”, in G Lindell (ed), Future Directions in Australian Constitutional Law (Federation Press, Sydney, 1994), pp 150-184; J Goldsworthy, “The High Court, Implied Rights and Constitutional Implications” (March 1995) 39 Quadrant 46; J Goldsworthy, “Constitutional Implications Revisited” (2011) 30 University of Queensland Law Review 9. For a defence of the High Court, see A R Blackshield, “The Implied Freedom of Communication”, in G Lindell (ed), Future Directions in Australian Constitutional Law (Federation Press, Sydney, 1994), pp 232-268.

The Freedom of Political Communication Defined: Lange v Australian Broadcasting Corporation [11.50] Following Australian Capital Television and Nationwide News, the High Court’s next significant foray into the freedom of political communication arose in Theophanous v [11.50]

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Herald & Weekly Times Ltd (1994) 182 CLR 104 and Stephens v West Australian Newspapers Ltd (1994) 182 CLR 211. In these cases, the High Court held by a majority that the implied freedom of political communication limited the capacity of public officials to make a claim for defamation in response to false defamatory statements. In Theophanous, which contains the bulk of the reasoning in relation to the freedom of political communication, Mason CJ, Toohey and Gaudron JJ held that an action cannot be brought by a public official or candidate for public office for publication of false material if (1) the defendant is unaware of the falsity and not reckless with regard to its truth and (2) the publication was reasonable in all the circumstances (at 137). The fourth member of the majority, Deane J, formulated a slightly different rule but indicated his support to the result reached by the other members of the majority (at 184, 188). In Stephens, the High Court addressed the additional question of how the freedom of political communication affected discussion of the political matters of a State, and whether a similar implication could be found in the Constitution of the State of Western Australia at 232-34 (per Mason CJ, Toohey and Gaudron JJ); and at 257 (per Deane J). Justice Dawson dissented as he had in earlier freedom of political communication cases. However, this time he was joined by Brennan and McHugh JJ who, in separate judgments, dissented on the bases that the freedom of political communication had no effect on the common law of defamation. Theophanous marked a substantial adoption of the approach of the United States Supreme Court in New York Times v Sullivan 376 US 254 (1964) in which it held that the protection of freedom of speech under the First Amendment to the Constitution of the United States precluded a public official from making a claim for a false defamatory statement unless the plaintiff can show that the statement was made with “actual malice”, which requires demonstrating that the defendant acted with knowledge that the statement was false, or was made with reckless disregard to its truth (at 279-280) However, the adoption of the American position was not complete. The majority modified the New York Times rule in response to criticism of that rule. First, they added a requirement that the publication be “reasonable in all the circumstances”. Second, they reversed the onus of proof. Under New York Times, the plaintiff must establish “actual malice” with “convincing clarity”. Under Theophanous, however, the defendant must establish the requirements of the test (at 137). Soon after these decisions, two members of the majority, Mason CJ and Deane J retired. Moreover, in obiter dicta in a related case, one of the new appointees, Gummow J, appeared to take a view of the freedom of political communication that was close to the minority in Theophanous and Stephens (McGinty v Western Australia, (1995) 186 CLR 140 at 291). Majority support for those decisions, therefore, appeared to have been lost and Dawson J went so far as to suggest as much during argument in Levy v Victoria (1997) 189 CLR 579 (Transcript, 6 August 1996, p 40). The opportunity to reconsider these controversial cases arose when David Lange, the former Prime Minister of New Zealand, brought an action for defamation against the Australian Broadcasting Corporation (“ABC”). The ABC claimed that it was protected by freedom of political communication, relying upon the finding in Theophanous. On behalf of Mr Lange, it was claimed that the publications were not protected by the freedom of political communication since they concerned discussion of New Zealand, rather than Australian, government and political matters but also that Theophanous and Stephens were wrongly decided and should be overruled.

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Lange v ABC [11.60] Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 556–575 [David Lange, a former Prime Minister of New Zealand, sued the Australian Broadcasting Corporation in the Supreme Court of New South Wales for defamation in respect of matters published by the latter when he was a member of the New Zealand Parliament. The defence relied upon by the Corporation was that the material which was claimed to be defamatory was published “pursuant to a freedom guaranteed by the Commonwealth Constitution to publish material … in the course of discussion of government and political matters.” The case was removed into the High Court where Brennan CJ stated a case for the opinion of the Full Court. The principal questions posed to the court were whether the court should reconsider Theophanous and Stephens and, if so, whether those decisions were correct.] Brennan CJ, Dawson, Toohey, Gaudron, McHugh, Gummow and Kirby JJ: 556 … Theophanous and Stephens should be accepted as deciding that in Australia the common law rules of defamation must conform to the requirements of the Constitution. Those cases should also be accepted as deciding that, at least by 1992 (the year in which the articles, the subject of the proceedings in Theophanous and Stephens, were published) the constitutional implication precluded an unqualified application in Australia of the English common law of defamation in so far as it continued to provide no defence for the mistaken publication of defamatory matter concerning government and political matters to a wide audience. The full argument we heard in the present case and the illumination and insights gained from the subsequent cases of McGinty v Western Australia (1996) 186 CLR 140, Langer v Commonwealth (1996) 186 CLR 302 and Muldowney v South Australia (1996) 186 CLR 352 now satisfy us, however, that some of the expressions and reasoning in the various judgments in Theophanous and Stephens should be further considered in order to settle both constitutional doctrine and the contemporary common law of Australia governing the defence of qualified privilege in actions of libel and slander. … 557 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 (Grannall v Marrickville Margarine Pty Ltd (1955) 93 CLR 55 at 77) 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 (Attorney-General (Cth); Ex rel McKinlay v Commonwealth (1975) 135 CLR 1 at 56; Nationwide News (1992) 177 CLR 1 at 46–47, 70–72; ACTV (1992) 177 CLR 106 at 137, 184–185, 210, 229–230; Theophanous (1994) 182 CLR 104 at 146–147, 189–190, 195–197; McGinty (1996) 186 CLR 140 at 201–202). 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. … 559 … Reference should also be made to s 128 which ensures that the Constitution shall not be altered except by a referendum passed by a majority of electors in the States and in those Territories with representation in the House of Representatives, taken together, and by the electors in a majority of States. Freedom of communication Freedom of communication on matters of government and politics is an indispensable incident of that system of representative government which the Constitution creates by directing that the members of the House of Representatives and the Senate shall be “directly chosen by the people” of the Commonwealth and the States, respectively. At federation, representative government was understood to mean a system of government where the people in free elections elected their representatives to the legislative chamber which occupies the most powerful position in the political system (Birch, [11.60]

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Lange v ABC cont. Representative and Responsible Government (1964), p 17; ACTV (1992) 177 CLR 106 at 230; Theophanous (1994) 182 CLR 104 at 200). As Birch points out (Representative and Responsible Government (1964), p 17), “it is the manner of choice of members of the legislative assembly, rather than their characteristics or their behaviour, which is generally taken to be the criterion of a representative form of government.” However, to have a full understanding of the concept of representative government, Birch also states that (Representative and Responsible Government (1964), p 17): we need to add that the chamber must occupy a powerful position 560 in the political system and that the elections to it must be free, with all that this implies in the way of freedom of speech and political organization. Communications concerning political or government matters between the electors and the elected representatives, between the electors and the candidates for election and between the electors themselves were central to the system of representative government, as it was understood at federation (R v Smithers; Ex parte Benson (1912) 16 CLR 99 at 108, 109–110; Nationwide (1992) 177 CLR 1 at 73; ACTV (1992) 177 CLR 106 at 232). While the system of representative government for which the Constitution provides does not expressly mention freedom of communication, it can hardly be doubted, given the history of representative government and the holding of elections under that system in Australia prior to federation, that the elections for which the Constitution provides were intended to be free elections in the sense explained by Birch. Furthermore, because the choice given by ss 7 and 24 must be a true choice with “an opportunity to gain an appreciation of the available alternatives”, as Dawson J pointed out in Australian Capital Television Pty Ltd v Commonwealth ((1992) 177 CLR 106 at 187), legislative power cannot support an absolute denial of access by the people to relevant information about the functioning of government in Australia and about the policies of political parties and candidates for election. That being so, ss 7 and 24 and the related sections of the Constitution necessarily protect that freedom of communication between the people concerning political or government matters which enables the people to exercise a free and informed choice as electors. Those sections do not confer personal rights on individuals. Rather they preclude the curtailment of the protected freedom by the exercise of legislative or executive power. As Deane J said in Theophanous ((1994) 182 CLR 104 at 168. See also 146–148), they are “a limitation or confinement of laws and powers [which] gives rise to a pro tanto immunity on the part of the citizen from being adversely affected by those laws or by the exercise of those powers rather than to a ‘right’ in the strict sense”. In Cunliffe v Commonwealth ((1994) 182 CLR 272 at 326), Brennan J pointed out that the freedom confers no rights on individuals and, to the extent that the freedom rests upon implication, that implication defines the nature and extent of the freedom. His Honour said (Cunliffe (1994) 182 CLR 272 at 327): “The implication is negative in nature: it invalidates laws and consequently creates an area of immunity from legal control, particularly from legislative control.” 561 If the freedom is to effectively serve the purpose of ss 7 and 24 and related sections, it cannot be confined to the election period. Most of the matters necessary to enable “the people” to make an informed choice will occur during the period between the holding of one, and the calling of the next, election. If the freedom to receive and disseminate information were confined to election periods, the electors would be deprived of the greater part of the information necessary to make an effective choice at the election. In addition, the presence of s 128, and of ss 6, 49, 62, 64 and 83, of the Constitution makes it impossible to confine the receipt and dissemination of information concerning government and political matters to an election period. Those sections give rise to implications of their own. Section 128, by directly involving electors in the States and in certain Territories in the process for amendment of the Constitution, necessarily implies a limitation on legislative and executive power to deny the electors access to information that might be relevant to the vote they cast in a referendum to amend the Constitution. Similarly, those provisions which prescribe the system of responsible government necessarily imply a limitation on legislative and executive power to deny the electors and their representatives information concerning the conduct of the executive branch of government 842

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Lange v ABC cont. throughout the life of a federal Parliament. Moreover, the 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 ([1981] AC 1096 at 1168), 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. Whatever the scope of the implications arising from responsible government and the amendment of the Constitution may be, those implications cannot be confined to election periods relating to the federal Parliament. However, the freedom of communication which the Constitution protects is not absolute (Nationwide (1992) 177 CLR 1 at 51, 76–77, 94–95; ACTV (1992) 177 CLR 106 at 142–144, 159, 169, 217–218; Theophanous (1994) 182 CLR 104 at 126; Stephens (1994) 182 CLR 211 at 235; Cunliffe (1994) 182 CLR 272 at 336–337, 387; Langer (1996) 186 CLR 302 at 333–334). It is limited to what is necessary for the effective operation of that system of representative and responsible government provided for by the Constitution. The freedom of communication required by ss 7 and 24 and reinforced by the sections concerning responsible government and the amendment of the Constitution operates as a restriction on legislative power. However, the freedom will not invalidate a law enacted to satisfy some other legitimate end if the law satisfies two conditions. The first condition is 562 that the object of the law is compatible with the maintenance of the constitutionally prescribed system of representative and responsible government or the procedure for submitting a proposed amendment to the Constitution to the informed decision of the people which the Constitution prescribes. The second is that the law is reasonably appropriate and adapted to achieving that legitimate object or end. Different formulae have been used by members of this Court in other cases to express the test whether the freedom provided by the Constitution has been infringed. Some judges have expressed the test as whether the law is reasonably appropriate and adapted to the fulfilment of a legitimate purpose. Others have favoured different expressions, including proportionality. In the context of the questions raised by the case stated, there is no need to distinguish these concepts. For ease of expression, throughout these reasons we have used the formulation of reasonably appropriate and adapted. The common law and the Constitution A person who is defamed must find a legal remedy against those responsible for publishing defamatory matter either in the common law or in a statute which confers a right of action. The right to a remedy cannot be admitted, however, if its exercise would infringe upon the freedom to discuss government and political matters which the Constitution impliedly requires. It is necessary, therefore, to consider the relationship between the Constitution and the freedom of communication which it requires on the one hand and the common law and the statute law which govern the law of defamation on the other. … 565 … The issue raised by the Constitution in relation to an action for defamation is whether the immunity conferred by the common law, as it has traditionally been perceived, or, where there is statute law on the subject the immunity conferred by statute, conforms with the freedom required by the Constitution. In 1901, when the Constitution of the Commonwealth took effect (covering cl 3 of the Constitution) and when the Judicial Committee was the ultimate Court in the judicial hierarchy, the English common law defined the scope of the torts of libel and slander. At that time, the balance that was struck by the common law between freedom of communication about government and political matters and the protection of personal reputation was thought to be consistent with the freedom that was essential and incidental to the holding of the elections and referenda for which the Constitution provided. Since 1901, the common law – now the common law of Australia – has had to be developed in response to changing conditions. The expansion of the franchise, the increase in literacy, the growth of modern political structures operating at both federal and State levels and the modern development in mass communications, especially the electronic media, now demand the striking of a different balance from that which was struck in 1901. To this question we shall presently return. The factors which affect the development of the common law equally affect the scope of the freedom which is constitutionally required. “[T]he common convenience and welfare of society” is the criterion of the protection given to communications by the common law of qualified privilege (Toogood v [11.60]

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Lange v ABC cont. Spyring (1834) 1 CM & R 181 at 193 [149 ER 1044 at 1050]). Similarly, the content of the freedom to discuss government and political matters must be ascertained according to what is for the common convenience and welfare of society. That requires an examination of changing circumstances (Jumbunna Coal Mine NL v Victorian Coal Miners’ Association (1908) 6 CLR 309 at 367–368; Australian National Airways Pty Ltd v Commonwealth (1945) 71 CLR 29 at 81) and the need to strike a balance in those circumstances between absolute freedom of discussion of government and politics and the 566 reasonable protection of the persons who may be involved, directly or incidentally, in the activities of government or politics. Of necessity, the common law must conform with the Constitution. The development of the common law in Australia cannot run counter to constitutional imperatives (Theophanous (1994) 182 CLR 104 at 140). The common law and the requirements of the Constitution cannot be at odds. The common law of libel and slander could not be developed inconsistently with the Constitution, for the common law’s protection of personal reputation must admit as an exception that qualified freedom to discuss government and politics which is required by the Constitution. In any particular case, the question whether a publication of defamatory matter is protected by the Constitution or is within a common law exception to actionable defamation yields the same answer. But the answer to the common law question has a different significance from the answer to the constitutional law question. The answer to the common law question prima facie defines the existence and scope of the personal right of the person defamed against the person who published the defamatory matter; the answer to the constitutional law question defines the area of immunity which cannot be infringed by a law of the Commonwealth, a law of a State or a law of those Territories whose residents are entitled to exercise the federal franchise. That is because the requirement of freedom of communication operates as a restriction on legislative power. Statutory regimes cannot trespass upon the constitutionally required freedom. However, a statute which diminishes the rights or remedies of persons defamed and correspondingly enlarges the freedom to discuss government and political matters is not contrary to the constitutional implication. The common law rights of persons defamed may be diminished by statute but they cannot be enlarged so as to restrict the freedom required by the Constitution. Statutes which purport to define the law of defamation are construed, if possible, conformably with the Constitution. But, if their provisions are intractably inconsistent with the Constitution, they must yield to the constitutional norm. … Constitutional text and structure Since McGinty it has been clear, if it was not clear before, that the Constitution gives effect to the institution of “representative govern- 567 ment” only to the extent that the text and structure of the Constitution establish it (McGinty (1996) 186 CLR 140 at 168, 182–183, 231, 284–285). In other words, to say that the Constitution gives effect to representative government is a shorthand way of saying that the Constitution provides for that form of representative government which is to be found in the relevant sections. Under the Constitution, the relevant question is not, “What is required by representative and responsible government?” It is, “What do the terms and structure of the Constitution prohibit, authorise or require?” … The test for determining whether a law infringes the constitutional implication When a law of a State or federal Parliament or a Territory legislature is alleged to infringe the requirement of freedom of communication imposed by ss 7, 24, 64 or 128 of the Constitution, two questions must be answered before the validity of the law can be determined. First, does the law effectively burden freedom of communication about government or political matters either in its terms, operation or effect (cf Cunliffe (1994) 182 CLR 272 at 337)? Second, if the law effectively burdens that freedom, is the law reasonably appropriate and adapted to serve a legitimate end the fulfilment of which is compatible with the maintenance of the constitutionally prescribed system of representative and responsible government and the procedure prescribed by s 128 for submitting a proposed amendment of the Constitution to the informed decision of the people (Cunliffe (1994) 182 844

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Lange v ABC cont. CLR 272 at 300, 324, 339, 387–388. In this context, there is little difference between the test of “reasonably appropriate and adapted” and the test of proportionality: see at 377, 396) (hereafter collectively “the system of government prescribed by the Constitution”). If the first question is 568 answered “yes” and the second is answered “no”, the law is invalid. In ACTV, for example, a majority of this Court held that a law seriously impeding discussion during the course of a federal election was invalid because there were other less drastic means by which the objectives of the law could be achieved. And the common law rules, as they have traditionally been understood, must be examined by reference to the same considerations. If it is necessary, they must be developed to ensure that the protection given to personal reputation does not unnecessarily or unreasonably impair the freedom of communication about government and political matters which the Constitution requires. The law of defamation … The question then is whether the common law of defamation, as it has traditionally been understood, and the statute law regulating the publication of defamatory matter are reasonably appropriate and adapted to the protection of reputation having regard to the 569 requirement of freedom of communication about government and political matters required by the Constitution. Theophanous and Stephens decided that in particular respects the law of defamation throughout Australia was incompatible with the requirement of freedom of communication imposed by the Constitution (Theophanous (1994) 182 CLR 104 at 136). However, those cases did so without expressly determining whether the law of defamation in its common law and statutory emanations has developed to the point that it is reasonably appropriate and adapted to achieving a legitimate end that is compatible with the system of government prescribed by the Constitution. Because that is so, those cases ought not to be treated as conclusively determining that question, which should be examined afresh. … 570 … However, the common law doctrine as expounded in Australia must now be seen as imposing an unreasonable restraint on that freedom of communication, especially communication concerning government and political matters, which “the common convenience and welfare of society” (Toogood v Spyring (1834) 1 CM & R 181 at 193 [149 ER 1044 at 1050]) now requires. Equally, the system of government prescribed by the Constitution would be impaired if a wider freedom for members of the public to give and to receive information concerning government and political matters were not recognised. … 571 … Accordingly, this Court should now declare that each member of the Australian community has an interest in disseminating and receiving information, opinions and arguments concerning government and political matters that affect the people of Australia. … Similarly, discussion of government or politics at State or Territory level and even at local government level is amenable to protection by the extended category of qualified privilege, whether or not it bears on matters at the federal level. Of course, the discussion of matters at State, Territory or local level might bear on the choice that the people have to make in federal elections or in voting to amend the Constitution, and on their evaluation of the performance of federal Ministers and their departments. The existence of national political 572 parties operating at federal, State, Territory and local government levels, the financial dependence of State, Territory and local governments on federal funding and policies, and the increasing integration of social, economic and political matters in Australia make this conclusion inevitable. Thus, the extended category of common law qualified privilege ensures conformity with the requirements of the Constitution. The real question is as to the conditions upon which this extended category of common law qualified privilege should depend … 573 … Reasonableness of conduct is the basic criterion in s 22 of the Defamation Act 1957 which gives a statutory defence of qualified privilege. It is a concept invoked in one of the defences of qualified protection under the Defamation Codes of Queensland and Tasmania (Criminal Code (Qld), s 377; Defamation Act 1957 (Tas), s 16). And it was the test of reasonableness that was invoked in the joint judgment in Theophanous ((1994) 182 CLR 104 at 136–137). Given these considerations and given, also, that the requirement of honesty of purpose was developed in relation to more limited publications, reasonableness of conduct seems the appropriate criterion to apply when the occasion of the publication of defamatory matter is said to be an occasion of qualified privilege solely by reason of the relevance of the matter published to the discussion of government or political matters. But reasonableness of conduct is imported as an element only when the extended category of qualified [11.60]

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Lange v ABC cont. privilege is invoked to protect a publication that would otherwise be held to have been made to too wide an audience. For example, reasonableness of conduct is not an element of that qualified privilege which protects a member of the public who makes a complaint to a Minister concerning the administration of his or her department. Reasonableness of conduct is an element for the judge to consider only when a publication concerning a government or political matter is made in circumstances that, under the English common law, would have failed to attract a defence of qualified privilege … 574 Having regard to the interest that the members of the Australian community have in receiving information on government and political matters that affect them, the reputations of those defamed by widespread publications will be adequately protected by requiring the publisher to prove reasonableness of conduct … Whether the making of a publication was reasonable must depend upon all the circumstances of the case. But, as a general rule, a defendant’s conduct in publishing material giving rise to a defamatory imputation will not be reasonable unless the defendant had reasonable grounds for believing that the imputation was true, took proper steps, so far as they were reasonably open, to verify the accuracy of the material and did not believe the imputation to be untrue. Furthermore, the defendant’s conduct will not be reasonable unless the defendant has sought a response from the person defamed and published the response made (if any) except in cases where the seeking or publication of a response was not practicable or it was unnecessary to give the plaintiff an opportunity to respond (Stephens (1994) 182 CLR 211 at 252–253). 575 Once the common law is developed in this manner, the New South Wales law of defamation cannot be said to place an undue burden on those communications that are necessary to give effect to the choice in federal elections given by ss 7 and 24 and the freedom of communication implied by those sections and ss 64 and 128 of the Constitution. It is true that the law of defamation in that State effectively places a burden on those communications although it does not prohibit them. Nevertheless, having regard to the necessity to protect reputation, the law of New South Wales goes no further than is reasonably appropriate and adapted to achieve the protection of reputation once it provides for the extended application of the law of qualified privilege. Moreover, even without the common law extension, s 22 of the Defamation Act ensures that the New South Wales law of defamation does not place an undue burden on communications falling within the protection of the Constitution. That is because s 22 protects matter published to any person where the recipient had an interest or apparent interest in having information on a subject, the matter was published in the course of giving information on that subject to the recipient, and the conduct of the publisher in publishing the matter was reasonable in the circumstances. …

Notes&Questions

[11.70]

1.

2.

The most immediately significant aspect of Lange was the unanimous affirmation by the High Court of the implied freedom of political communication, making any further challenge to the existence of such a freedom difficult. The Court also emphasised that the freedom of political communication was derived from the “text and structure” of the Constitution and that its meaning is therefore also governed by the “terms and structure” of the Constitution. Further, the Court affirmed a “two stage” test governing the application of the implied freedom (at 567 –568): First, does the law effectively burden freedom of communication about government or political matters either in its terms, operation or effect? Secondly, if the law effectively burdens that freedom, is the law reasonably appropriate and adapted to serve a legitimate end the fulfilment of which is compatible with the maintenance of the constitutionally prescribed system of representative and responsible government and the procedure prescribed by Commonwealth of Australia Constitution, s 128 for

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submitting a proposed amendment of the Constitution to the informed decision of the people … If the first question is answered “yes” and the second “no”, the law is invalid.

3.

In relation to the second question, the Court held that that there was no need to distinguish between the “proportionality” test and the “appropriate and adapted” test in the context of the questions raised by the case stated. Is there any meaningful difference between the two concepts? This question will arise again in consideration of McCloy v New South Wales (2015) ALJR 857 (extracted at [11.180]).

4.

The High Court held that common law must be reshaped to conform with the implied freedom. It therefore expanded the common law defence of qualified privilege. In its traditional form, the defence of qualified privilege had excluded publications, such as those in newspapers or broadcasts, which are to the world at large. Toogood v Spyring [1834] 149 All ER Rep 1044. Moreover, the interest of the general public in information was not established merely by the fact that it concerned a matter in which the public was interested and a newspaper publication was therefore generally not privileged, because it would usually carry a communication beyond those who have a legitimate interest in it. In Lange, the High Court (at 571-573) declared that “each member of the Australian community has an interest in disseminating and receiving information, opinions and arguments concerning government and political matters that affect the people of Australia” provided that the publisher could show that the publication was reasonable in all the circumstances. On the expanded defence of qualified privilege, see M Chesterman, “Privileges and Freedoms for Defamatory Political Speech” (1997) 19 Adelaide Law Review 1 at 1–12; M Chesterman, “The Common Law Rules in Defamation – OK?” (1998) 6 Tort Law Review 9; FA Trindade, “Defamation in the Course of Political Discourse – the New Common Law Defence” (1998) 114 Law Quarterly Review 1. On the relationship between the common law and the Constitution, see Graeme Hill and Adrienne Stone, “The Constitutionalisation of the Common Law” (2004) 25 Adelaide Law Review 67.

The Implied Freedom of Political Communication and its Application to Discussion of State Political Matters [11.80] It has always been clear that State and Territory laws were subject to the freedom of

political communication and could no more burden political communication than Commonwealth laws. So for instance no State or Territory legislature could enact a law imposing unreasonable burdens on political communication about federal politics. What has been less clear is whether political discussion of State and Territory political matters was covered by the freedom political communication. Recall that in Lange, the Court emphasised that the freedom of political communication was grounded in the text and structure of the Constitution, notably the requirement in ss 7 and 24 of the Constitution that the Houses of Parliament be “directly chosen by the people”. The emphasis on the election of the Commonwealth Parliament raises the question “is it necessary to protect discussion of state political in order to ensure that the Commonwealth Parliament is ‘directly chosen by the people?’” In Australian Capital Television and in Lange, the Court appeared to take the view that State (and by extension) Territory politics where sufficiently entangled with Commonwealth politics that the implied freedom applied to protect all discussion of State (and Territory) politics to the same extent as federal politics. See Australian Capital Television at 142 (Mason CJ), 169 (Deane and Toohey JJ), 215 (Gaudron J); Lange at 561. But in Levy v Victoria (1997) 189 CLR 579, Brennan and McHugh JJ, the only Justices who addressed the [11.80]

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issue, found that protest against a State law limiting duck hunting had no significance for representative and responsible government by the federal Parliament. Justice Brennan held (by way of obiter dicta): The discussion of State issues of government and politics: In Stephens ((1994) 182 CLR 211 at 235), I expressed the opinion that defamatory matter relating to the conduct of members of the Legislative Council was 596 irrelevant to the government of the Commonwealth and, on that account, the lawfulness of its publication was unaffected by the implied freedom. However, a majority of the Court (Stephens (1994) 182 CLR 211 at 232, per Mason CJ, Toohey and Gaudron JJ; at 257, per Deane J) held that the implication protects political discussion in relation to all levels of government including State government. In Lange ((1997) 71 ALJR 818) the joint reasons for judgment extend the defence of qualified privilege to the publication of defamatory matter relating to government and politics at all levels. The factors which have led to that conclusion include the “increasing integration of social, economic and political matters in Australia” (Lange v Australian Broadcasting Corporation (1997) 71 ALJR 818 at 833). Taking this approach, it is arguable that permitting the shooting of ducks and any inaction with respect to the shooting of protected species affects some international obligation binding on Australia relating to the protection of fauna (It might be argued that some obligation of that kind arises under the Convention on Biological Diversity done at Rio de Janeiro on 5 June 1992) and thus relates directly to a matter within the legislative competence of the Commonwealth. I would not accept this approach. The plaintiff’s intended protest related to the discrete State issue of the appropriateness of the relevant Victorian laws, especially the Hunting Season Regulations. (See also McHugh J at 626).

That position appeared to weaken over time, or at least it became clear that understood correctly it posed few if any limits on the application of the freedom political communication. In Roberts v Bass (2002) 212 CLR 1, Gaudron, McHugh and Gummow JJ described “statements made by electors or candidates or those working for a candidate, during an election, to electors in a State electorate, concerning the record and suitability of a candidate for election to a State Parliament” as matters “at the heart of the freedom of communication protected by the Constitution”. In Coleman v Power (2004) 220 CLR 1, which concerned complaints about the conduct of a member of the state police, the applicability of the freedom to the communication in question was a matter of concession. In Unions of New South Wales v New South Wales (2013) 252 CLR 530, extracted at [11.300], the High Court seems to have settled the question for the time being. The Court clearly reiterated the position taken Australian Capital Television. The Court recognised the increasing integration of economic social and political matters in Australia pointing to constitutional arrangements that contemplate and facilitate such integration such as the provision for Commonwealth funding of the States and cooperative legislative and executive schemes. In this light, the joint reasons, at 550 [25], conclude that: The complex interrelationship between levels of government, issues common to State and federal government and the levels at which political parties operate necessitate that a wide view be taken of the operation of the freedom of political communication … generally speaking, political communication cannot be compartmentalised to either that respecting State or that respecting federal issues. It also implies that a free flow of communication between all interested persons is necessary to the maintenance of representative government.

This reasoning does seem to leave open the possibility of the exceptional case in which a state political matter might not exhibit sufficient connection with federal issues to attract the protection of the freedom of political communication. However, it seems that the discussion of State political matters is ordinarily considered to be covered by the freedom of political communication. Justice Keane reached similar conclusion (at 582). 848

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The Implied Freedom of Political Communication and Non-Verbal Communication [11.90] The underlying logic of the freedom of political communication would suggest that it

applies to any form of communication that relates to government and politics as outlined in Lange. There is no reason to suppose therefore that it would be limited to verbal communication or “speech”. This idea was confirmed in Levy v Victoria (1997) 189 CLR 579. The plaintiff, Mr Levy, claimed protection for protest activities – being present at the scene of hunting to protest, gathering of evidence of cruelty and killing of protected birds, and collecting of injured or killed birds. Part of his argument was that these activities enabled him to conduct an informed discussion of the duck hunting laws, but Mr Levy also placed value on the communicative capacity of his actions. He stressed the importance of being seen, especially on television, carrying out his protesting activities. Brennan CJ held (at 595): Televised protests by non-verbal conduct are today a commonplace of political expression. A law which simply denied an opportunity to make such a protest about an issue relevant to the government or politics of the Commonwealth would be as offensive to the constitutionally implied freedom as a law which banned political speech-making on that issue. However, while the speaking of words is not inherently dangerous or productive of a tangible effect that might warrant prohibition or control in the public interest, non-verbal conduct may, according to its nature and effect, demand legislative or executive prohibition or control even though it conveys a political message. Bonfires may have to be banned to prevent the outbreak of bushfires, and the lighting of a bonfire does not escape such a ban by the hoisting of a political effigy as its centrepiece. A law which prohibits non-verbal conduct for a legitimate purpose other than the suppressing of its political message is unaffected by the implied freedom if the prohibition is appropriate and adapted to the fulfilment of that purpose. Such a law prohibiting or controlling the non-verbal conduct, if it be reasonable in extent, does not offend the constitutional implication. In the present case, the plaintiff entered upon the proclaimed area and, had he not been removed, he would have stayed there to make a dramatic and televised protest against duck shooting and the laws and policies which permitted or encouraged the practice. He was prohibited from being able lawfully to make that protest and he was removed from the proclaimed area in exercise of an authority arising from the provisions of the Hunting Season Regulations (It does not appear whether he was a trespasser on the proclaimed area. However, neither the application nor the validity of the Hunting Season Regulations depends upon the locus where a protest might have been made; validity depends on the operation and effect of the Regulations irrespective of the possession or ownership of or right of entry upon the proclaimed areas to which the regulations applied). The conduct in which the plaintiff desired to engage and which was proscribed by the Hunting Season Regulations was calculated to express and was capable of expressing a political message. It was therefore conduct of the kind which, if the criteria presently to be mentioned existed, would be immune from legislative prohibition.

See also Toohey and Gummow JJ (at 613); McHugh J (at 622–623); Kirby J (at 286). The Freedom of Political Communication: A “Right” or a “Freedom”? [11.100] In Lange, the High Court adopted the “Brennan” view that implied freedom does

not confer a “personal right” on individuals. The Court referred approvingly to the following statement of Brennan J in Cunliffe v Commonwealth (1994) 182 CLR 272 at 326: The implication is negative: it invalidates laws and consequently creates an area of immunity from legal control, particularly from legislative control.

That the freedom of political communication is not a “personal right” is a persistent theme in the High Court’s discussion of the freedom of political communication, which is explored further in the cases below.

[11.100]

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Mulholland v Australian Electoral Commission [11.110] Mulholland v Australian Electoral Commission (2004) 220 CLR 181 at 223–225, 244-249, 267-268 [John Mulholland, the registered officer of a registered political party called the Democratic Labor Party (“DLP”) was requested by the Australian Electoral Commission to provide it with a list of party members. If he failed to do so, the party could be deregistered. Mulholland failed to comply with the request. The Commonwealth Electoral Act 1918 (Cth) prescribed a “500 rule” and a “no-overlap rule”. These rules were explained by McHugh J (at [50]) as follows: “If a registered political party has no federal Parliamentary member, the ‘500 rule’ required it, in order to qualify or continue to qualify for registration, to provide to the Commission a list of names of the 500 members of the party relied on for the purposes of registration. The ‘no-overlap rule’ precludes two or more political parties relying on the same member for the purpose of qualifying or continuing to qualify as an eligible political party.” Registration entitles a political party to the “privilege” of having the party affiliation recorded on the ballot paper, apart from “the privilege of having access to the electoral roll in digital form” ([16]). The High Court unanimously held that the impugned provisions of the Commonwealth Electoral Act 1918 (Cth) providing for the “500 rule” and the “no-overlap rule” were within the legislative power of the Commonwealth Parliament. The Court also held that there was no contravention of the “direct choice” prescription of ss 7 and 24 of the Commonwealth Constitution. An interesting feature of the decision lies in the divergence in views between Kirby J, on the one hand, and some of the other justices, on the other, in relation to the nature of the implied freedom of political communication.] McHugh J 223: [107] Because the DLP has no right to make communications on political matters by means of the ballot-paper other than what the Act gives, Mr Mulholland’s claim that the Act burdens the DLP’s freedom of political communication fails. Proof of a burden on the implied constitutional freedom requires proof that the challenged law burdens a freedom that exists independently of that law. As I pointed out in Levy ((1997) 189 CLR 579 at 622): The freedom protected by the Constitution is not, however, a freedom to communicate. It is a freedom from laws that effectively prevent the members of the Australian community from communicating with each other about political and government matters relevant to the system of representative and responsible government provided for by the Constitution. Unlike the Constitution of the United States, our Constitution does not create rights of communication. It gives immunity from the operation of laws that inhibit a right or privilege to communicate political and government matters. 224 But, as Lange shows, that right or privilege must exist under the general law. [Original emphasis]. [108] I went on to say in that case (Levy (1997) 189 CLR 579 at 625–626): The constitutional implication does not create rights. It merely invalidates laws that improperly impair a person’s freedom to communicate political and government matters relating to the Commonwealth to other members of the Australian community. It gave the protesters no right to enter the hunting area. That means that, unless the common law or Victorian statute law gave them a right to enter that area, it was the lack of that right, and not the Regulations, that destroyed their opportunity to make their political protest. [109] Hayne J made the same point in McClure ((1999) 163 ALR 734; 73 ALJR 1086 at 740–741 [28] (ALR), 1090 (ALJR)) when his Honour said: The freedom is a freedom from governmental action; it is not a right to require others to provide a means of communication. The petitioner’s case depends upon him having some right to require others to disseminate his views. But as was said by the Court in [Lange (1997) 189 CLR 520 at 560]: “ss 7 and 24 and the related sections of the Constitution necessarily protect that freedom of communication between the people concerning political or government matters which enables the people to exercise a free and informed choice as 850

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Mulholland v Australian Electoral Commission cont. electors. Those sections do not confer personal rights on individuals. Rather they preclude the curtailment of the protected freedom by the exercise of legislative or executive power.” (Original emphasis, footnote omitted.) [110] No political party or its candidates have any right under the common law or the statute law of the Commonwealth or the states other than the Act to have the party’s name printed above the line or on the ballot-paper. The only rights concerning ballot-papers which political parties and their candidates have are those rights that the Act confers on them. [111] The decision in ACTV, upon which Mr Mulholland relies, does not assist his case. Under the Broadcasting Act 1942 (Cth) and the Radiocommunications Act 1983 (Cth), the licensees of television stations had statutory rights to transmit broadcasting and television programs, including programs on political and government matters. The Political Broadcasts and Political Disclosures Act 1991 (Cth) restricted those rights by preventing the licensees and other persons at particular times and in particular circumstances from expressing views concerning political affairs through the medium of radio and 225 television. The Political Broadcasts and Political Disclosures Act 1991 (Cth) operated to burden long-existing rights that existed independently of that Act. The case is not a relevant analogue with the present case. [112] Accordingly, the challenged provisions do not burden freedom of communication on political and government matters. The second question under the Lange test, therefore, does not arise. … Gummow and Hayne JJ: 244 [179] Further attention … is required to the principles which Lange expounded and to the nature of the freedom that is protected. The phrase “absolutely free” in the text of s 92 of the Constitution, without more, gave rise to great difficulties in interpretation of the 245 “guarantee” provided by that section. It would have been unfortunate if, by implication, another incompletely stated “freedom” were discerned in the Constitution. However, the case law respecting this freedom of communication has refined the notions involved here. [180] First, personal “rights” are not bestowed upon individuals by the Constitution in the manner of the Bivens (after Bivens v Six Unknown Named Agents of Federal Bureau of Narcotics 403 US 388 (1971)) action for damages discussed in British American Tobacco Australia Ltd v Western Australia ((2003) 200 ALR 403; 77 ALJR 1566 at 414–415 [40]–[43] (ALR), 1574–1575 (ALJR) and previously in Kruger v Commonwealth ((1997) 190 CLR 1 at 46–47, 93, 125–126, 146–148). Rather, the freedom creates an immunity or protection which has two aspects: (i) the exercise of legislative or executive power is precluded so that, for example, inconsistent statutory rules are invalid; and (ii) the rules of the common law of Australia are required to conform with the Constitution (Roberts v Bass (2002) 212 CLR 1 at 26–27 [65]; Coleman v Power (2004) 209 ALR 182 at [195]). [181] Secondly, a body of common law, such as the tort of defamation, may be concerned with striking a compromise between a complex of relational interests on the part of the plaintiff and “the countervailing claim to freedom of speech and comment asserted by the defendant” (J Fleming, The Law of Torts, 3rd ed, Law Book Co, Sydney, 1965, p 490. The passage is expressed in different terms in later editions). One of the common law defences so developed, such as the defence of qualified privilege, may effectively burden the constitutional freedom of communication and not be reasonably appropriate and adapted to serve a legitimate end compatible with the constitutionally prescribed system of government. That will necessitate the development of the common law to conform with the Constitution (Roberts v Bass (2002) 212 CLR 1 at 27–28 [66]–[68]). However, the present case concerns not the common law but statute, the allegation being that certain statutory provisions are inconsistent with the constitutional freedom. [182] Thirdly, when speaking of the constitutional freedom of communication, Hayne J emphasised in McClure v Australian Electoral Commission ((1999) 163 ALR 734; 73 ALJR 1086 at 740–741 [28] (ALR), 1090 (ALJR)): “The freedom is a freedom from governmental action; it is not a right to require others to provide a means of communication. The petitioner’s case depends upon him having some right to require others to disseminate his views.” (Footnote omitted) [183] In McClure, one of the unsuccessful submissions was that Australian Capital Television Pty Ltd v Commonwealth (ACTV) ((1992) 177 CLR 106) 246 required every political candidate to have his or her views known through access to radio and television stations ((1999) 163 ALR 734; 73 ALJR 1086 at 740 [27] (ALR), 1090 (ALJR)). [183] To begin consideration of the issue presented on this appeal first by [11.110]

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Mulholland v Australian Electoral Commission cont. asking whether the laws here in issue, by their terms or operation, effectively burden freedom of communication about government or political matters would be to select a false starting point for legal analysis. Failing to ask and answer the questions “whose freedom?” and “freedom from what?” would entail the error in the assumptions exposed in McClure. To dispose of the case in that way would be to throw the weight of analysis at the wrong stage, namely the destination of a journey undertaken unnecessarily. … 247 [186] It is here that the case for the appellant faces a significant threshold obstacle. The ballot paper is the medium by which, in accordance with the Act, a vote is cast. The communication thereon is that required by the statute of the commission in discharge of its functions to administer the Australian ballot system to which reference has been made. Whence derives the right of the DLP or its endorsed candidates to have the name of the DLP placed on the “above the line” ballot paper, being the right with which the Act then interferes in a way offending the constitutionally mandated freedom of communication? [187] No such common law right was identified. Provisions such as ss 168, 169 and 214 of the Act may create certain rights against the commission respecting the contents of ballot papers. But these are of a nature which the appellant does not regard as satisfactory and it is their very validity which, in part, is attacked by reliance upon a freedom which descends deus ex machina. [188] Reference was made to ACTV. However, any reliance by the 248 appellant upon ACTV in this regard is misplaced. The licensing system in force under what was then the Broadcasting Act 1942 (Cth) and the Radiocommunications Act 1983 (Cth) (which had replaced the Wireless Telegraphy Act 1905 (Cth)) (see Radiocommunications (Transitional Provisions and Consequential Amendments) Act 1983 (Cth), s 4) restricted what otherwise was the freedom under the common law to transmit broadcasting and television programmes to the general public and to erect, maintain and use the necessary equipment and imposed a licensing regime (see Commercial Radio Coffs Harbour Ltd v Fuller (1986) 161 CLR 47 at 53–54; Miller v TCN Channel Nine Pty Ltd (1986) 161 CLR 556 at 593–594). That regime was extended by the addition of Pt IIID to the Broadcasting Act 1942 by the Political Broadcasts and Political Disclosures Act 1991 (Cth), the validity of which was at stake in ACTV. Pt IIID imposed various further obligations and restrictions upon the activities of licensees. [189] At the time ACTV was decided, the nature of the “freedom” involved in this area of discourse was yet to receive the analysis of the later cases discussed earlier in these reasons. The point is apparent from a passage in the judgment of Mason CJ in ACTV. Mason CJ was one of the majority which held Pt IIID wholly invalid. His Honour said ((1992) 177 CLR 106 at 129): “The consequence is that Pt IIID severely impairs the freedoms previously enjoyed by citizens to discuss public and political affairs and to criticize federal institutions. Pt IIID impairs those freedoms by restricting the broadcasters’ freedom to broadcast and by restricting the access of political parties, groups, candidates and persons generally to express views with respect to public and political affairs on radio and television.” [190] Under subsequent analysis, the relevant restriction is upon what was identified by Mason CJ as the broadcasters’ freedom to broadcast. There was no right given by the common law or by statute to citizens or to political groups and others to require broadcasters to provide them with a forum for expression of views with respect to public and political affairs. To appreciate these matters is not to deny the holding in ACTV of the invalidity of Pt IIID. However, what does not follow is that ACTV provides support for the submissions of the appellant in the present case. [191] In the Full Court, their Honours went straight to what they identified as the first Lange question, ((1997) 189 CLR 520 at 567) namely, whether the law in question effectively burdened freedom of communication about government or political matters, either in its terms, operation or effect. Having answered that question “Yes” ((2003) 128 FCR 523 at 532), their Honours moved to the 249 second question and answered in the affirmative that the relevant provisions of the Act were reasonably appropriate and adapted to serve a legitimate end, the fulfilment of which is compatible with the maintenance of the system of government prescribed by the Constitution ((2003) 128 FCR 523 at 537). [192] However, there was the threshold issue identified above respecting the existence and nature of the “freedom” asserted by the appellant. That issue should be resolved as indicated in these reasons, with the result that it is unnecessary to take any further the matters which arise under Lange. Kirby J: 852

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Mulholland v Australian Electoral Commission cont. 267 Freedoms and duties [252] There is one characterisation of the impugned provisions of the Act, presented as an answer to the appellant’s complaints, that, with respect, I would firmly reject. It was expressed in McClure v Australian Electoral Commission ((1999) 163 ALR 734, at 740–741 [28]) and invoked by the AEC in this appeal. It was stated in the form of an aphorism: “the 268 freedom of communication implied in the Constitution is not an obligation to publicise” (McClure (1999) 163 ALR 734, at 740 [28]) [253] Without casting doubt on the correctness of the decision in McClure, I question the accuracy of the propounded dichotomy, at least if it is presented as one of general application. The appellant’s attack in this case was on the “500 rule” and the “no overlap rule”, and the particular provisions of the Act permitting their enforcement by the AEC. He sought to show that those provisions were invalid by reference both to express and implied constitutional requirements. If he could establish his contentions, and support severance of the offending provisions (as the AEC and the appellant both urged would occur if constitutional invalidity of the provisions were shown), those provisions would be excised. That would leave the Act in the position it was before the provisions were inserted. [254] Such severance would leave standing provisions for registered political parties and for “above the line” voting with identification of the affiliation of those belonging to any such “eligible political party”. Doing this would not cast on the AEC any duty that could fairly be characterised as an “obligation to publicise”. It would simply restore the position of allowing candidates who are members of political parties, without discriminatory preconditions, to nominate such parties for inclusion in the Senate ballot paper absent the requirements which the appellant claimed discriminated against the DLP and in favour of incumbent parties. [255] According to the appellant, the DLP was not seeking the conferral of any special rights of publicity. It was simply claiming protection from this court to delete from the Act amendments that were inconsistent with the constitutional prescription. I agree with the appellant’s argument to this extent. It follows that, in this respect, I disagree with the analysis on this point contained in the reasons of Gummow and Hayne JJ (cf reasons of Gummow and Hayne JJ at [182]).

[11.120]

1.

Notes&Questions

Professor Adrienne Stone has suggested that the statement that the freedom of political communication is a freedom rather than a “right” (or “personal right”) encompasses two distinct ideas: First, it means that the freedom exists to support a certain system of government rather than to protect values more closely associated with the individual, such as autonomy. Thus the freedom could be described as “institutional” (its rationale being protection of certain institutions of government) rather than “personal”. Secondly, in saying that the freedom is not a “personal” right, the High Court also means that the freedom operates in only limited ways. First, it is a “negative” right rather than a “positive” right, which means that it provides freedom from interference, rather than the right to engage in certain activities or to be provided with certain benefits. Further, it has a “vertical” rather than “horizontal” operation, which means that is concerned with relationships between the individual and the state rather than relationships between individuals (Adrienne Stone, “Rights, Personal Rights and Freedoms”, (1997) Melbourne University Law Review 375)).

2.

Which of these conceptions of a “freedom” is dominant in the analysis in Mulholland? The concept that the freedom of political communication operates only vertically (against the state) has raised some questions about the application of the freedom of political communication to the common law. In Theophanous v Herald & Weekly Times (1994) 182 CLR 104, the majority directly applied the freedom of political [11.120]

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communication to the common law of defamation by developing a new defence to the laws of defamation. In his dissent, Brennan J (at 153) held that the freedom of political communication (and other constitutional rules and principles) can have no application to the common law because it is conceived as beyond the domain of the Constitution: The Constitution altered the common law by its provisions creating the structures and powers of the organs of government but it does not purport to affect the common law rights and liabilities of individuals inter se. That area of the common law and the area covered by the Constitution do not overlap.

On this view, the freedom of political communication, as a “vertical” right concerned only to prevent governmental interference with political discussion, is not concerned with the “private” common law, such as the law of defamation. Professor Stone has criticised this understanding of the common law: The argument that the common law is “private” confuses the subject of the common law with the nature of the power to develop, interpret and enforce it. Although the subject of much of the common law is the regulation of relations between individuals, the power to develop, interpret and enforce the common law should be regarded as an act of government in much the same way as legislative and executive action. (Adrienne Stone, “Rights, Personal Rights and Freedoms”, (1997) Melbourne University Law Review 375, 409)

For further discussion of this debate, see Greg Taylor, “Why Should the Common Law Be Only Indirectly Affected by Constitutional Guarantees” (2002) 26 Melbourne University Law Review 623; Adrienne Stone, “The Common Law and the Constitution” (2002) 26 Melbourne University Law Review 645. 3.

In any event, the High Court in Lange adopted an approach under which the common law is required to conform to the Constitution. How does this approach differ, if at all, from the approach taken in Theophanous? Consider Professor Leslie Zines’ analysis: It is sometimes suggested that the approaches in Theophanous and Lange are, in this respect, very different. The argument is that Lange denied that the constitutional implication operated directly to alter the private rights of individuals inter se and that Theophanous was therefore, in effect, overruled. As, however, it was held that the common law must conform to constitutional requirements there is no difference in result… In each case it can sensibly be said that the defendant was guaranteed a defence by virtue of the Constitution. (L Zines, “The Common Law in Australia: Its Nature and Constitutional Significance” (2004) 32 Federal Law Review 337, 355)

The Implied Freedom of Political Communication and Public Discourse: Protest, Insult and Intimidation

Coleman v Power [11.130] Coleman v Power (2004) 220 CLR 1 at 30, 32-54, 74-79, 82-99 [The case concerned the validity of, inter alia, s 7(1)(d) of the Vagrants, Gaming and Other Offences Act 1931 (Qld) which renders using insulting words an offence. The facts are set out in the judgment of McHuhgh J. The High Court by a 4:3 majority upheld the appeal and quashed the appellant’s conviction. The minority (Gleeson CJ, Callinan and Heydon JJ) identified the object of the impugned Queensland legislation as “‘the preservation of order in public places in the interests of the amenity and security of citizens’ … In their view, it was compatible with the implied freedom for the law to prohibit the use of insulting or offensive language of a kind likely to arouse a significant emotional 854

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Coleman v Power cont. response, even if the words were unlikely to provoke the use of force…” (R Sackville, “An Age of Judicial Hegemony” (2013) 87 Australian Law Journal 106, 118.) Gummow, Kirby and Hayne JJ, in upholding the validity of the impugned law, construed it narrowly (by requiring an intention to provoke an unlawful physical reaction) so that it was not applicable to the facts of the case. McHugh J, the fourth judge in the majority, found that the law could not be narrowly read down and held it to be invalid. See A Stone and S Evans, “Australia: Freedom of Speech and Insult in the High Court of Australia” (2006) 4(4) International Journal of Constitutional Law 677–688.] McHugh J: 32 [35] The principal issue in this appeal is whether 33 s 7(1)(d) of the Vagrants, Gaming and Other Offences Act 1931 (Qld) (the Vagrants Act) was invalid to the extent that it penalised persons using insulting words where those words had a political content or purpose and the penalty constituted a burden on the freedom of political communication. Because the parties agree that the penalty for uttering the words in issue in this case had the capacity to burden that freedom, the appeal raises the narrow issue whether s 7(1)(d) was reasonably appropriate and adapted to serve the end of public order in a manner that was compatible with the system oaf representative and responsible government prescribed by the Constitution. If s 7(1)(d) was not compatible with that system, further issues arise as to whether the appellant’s conviction under that paragraph can be maintained and, if not, whether it follows that convictions for other offences arising out of his resisting arrest for using insulting words must be quashed. [36] In my opinion, the appeal must be allowed in respect of all charges. Section 7(1)(d) made it an offence to utter insulting words in or near a public place. Nothing in the Vagrants Act, or any other relevant Queensland law, provided any defence to a charge under s 7(1)(d). Once such words were uttered in or near a public place, the offence was committed. Under the Constitution, a law that, without qualification, makes it an offence to utter insulting words in or near a public place cannot validly apply to insulting words that are uttered in the course of making statements concerning political or governmental matters. The appellant’s conviction for uttering such words must be quashed. […] The material facts 35 [42] In March 2000, the appellant, Patrick John Coleman, was handing out pamphlets in a mall in Townsville. The mall was a public place. One of the headings in the pamphlet was in capital letters and in bold type stated: “GET TO KNOW YOUR LOCAL CORRUPT TYPE COPS”. Behind the appellant was a placard upon which were written the words: “Get to know your local corrupt type coppers; please take one”. The second and third lines in the body of the pamphlet declared that the appellant was “going to name corrupt cops”. One of the police officers named in the pamphlet was the first respondent, Brendan Jason Power. The second page of the pamphlet contained the following statement: Ah ha! Constable Brendan Power and his mates, this one was a beauty – sitting outside the mall police beat in protest at an unlawful arrest – with simple placards saying TOWNSVILLE COPS – A GOOD ARGUMENT FOR A BILL OF RIGHTS – AND DEAR MAYOR – BITE ME – AND TOWNSVILLE CITY COUNCIL THE ENEMY OF FREE SPEECH – the person was saying nothing just sitting there talking to an old lady then BAMMM arrested dragged inside and detained. Of course not happy with the kill, the cops – in eloquent prose having sung in unison in their statements that the person was running through the mall like a madman belting people over the head with a flag pole before the dirty hippie bastard assaulted and [sic] old lady and tried to trip her up with the flag while … while … he was having a conversation with her before the cops scared her off … boys boys boys, I got witnesses so KISS MY ARSE YOU SLIMY LYING BASTARDS. [43] The contents of this pamphlet formed the basis of Charge (6) which, as I have said, was laid under s 7A(1)(c) of the Vagrants Act and which the Court of Appeal unanimously held could not validly apply to the handing out of the pamphlet. The validity of Charge (6) is no longer an issue between the parties. However, the contents and handing out of the pamphlet are relevant matters in assessing whether the appellant was engaged in communicating political or governmental matters when he uttered the words that form the basis of Charge (1). [11.130]

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Coleman v Power cont. [44] During the day, the appellant gave one of the pamphlets to Constable Carnes who told Constable Power about the contents of the pamphlet. As a result, Constable Power in the company of another constable approached the appellant and asked for a pamphlet. The appellant refused to give him one, saying, “No, you know what’s in 36 it”. What happened thereafter was the subject of dispute between the police officers and the appellant as to whether he pushed Constable Power before or after his arrest. [45] In the District Court, Pack DCJ said the magistrate had “resolved the conflict in evidence in [Constable Power’s] favour”. I think that this conclusion is correct. Although the magistrate did not expressly say that she preferred the evidence of Constable Power to that of the appellant, her judgment shows that she thought the appellant’s admissions in evidence and the evidence contained in a videotape proved the charges against him. Because the videotape evidence supported Constable Power’s version of events, I think that she must have preferred his evidence to the appellant’s evidence. [46] According to Constable Power’s evidence, when the appellant refused to give him a copy of the pamphlet he took out a “notice to appear” to give to the appellant, and told him to stop handing out the pamphlets or he would be arrested. The appellant then pushed him and yelled out: “This is Constable Brendan Power, a corrupt police officer”. Constable Power then told the appellant he was under arrest. A bystander then asked why the appellant was being arrested and Constable Power answered: “Insulting language”. The statement that Constable Power was a corrupt police officer formed the basis of Charge (1). [47] The magistrate found that on the appellant’s admissions he was guilty of “the charges of obstructing Senior Constables Carnes and Power following his lawful arrest”. The obstruction consisted in the appellant “hanging onto the pole, having to be carried to the police car, refusing to get into the vehicle and then, when it was indicated that he should get out of the vehicle, refusing to exit the vehicle and thereafter holding onto Senior Constable Carnes’ legs and then a further post before he was ultimately placed in the police van, kicking out at police.” These facts were the basis of Charges (2) and (5). [48] The basis of Charge (4) was that the appellant attempted to bite Constable Power. The basis of Charge (3) – assaulting Constable Carnes – was: that the [appellant] kicked him as he was being put into the police van; that the kicking on the part of the [appellant] was deliberate in terms of his view that the arrest was unlawful and that he was going to do whatever he could to make it as difficult as he could. The scope of s 7 of the Vagrants Act [49] Section 7(1) of the Vagrants Act provided: Obscene, abusive language etc. Any person who, in any public place or so near to any public place that any person who might be therein, and whether any person is therein or not, could view or hear – (a) sings any obscene song or ballad; (b) 37 writes or draws any indecent or obscene word, figure, or representation; (c) uses any profane, indecent, or obscene language; (d) uses any threatening, abusive, or insulting words to any person; (e) behaves in a riotous, violent, disorderly, indecent, offensive, threatening, or insulting manner; shall be liable to a penalty of $100 or to imprisonment for 6 months … [50] The scope of this provision was broad. Paragraph 7(1)(d) applied to the uttering of any insulting words that could be heard in or near a public place including a communication concerning a government or political matter. [51] The Vagrants Act contains an inclusive definition of ″public place″. Section 2 declares: 856

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Coleman v Power cont. “public place” includes every road and also every place of public resort open to or used by the public as of right, and also includes (a) any vessel, vehicle, building, room, licensed premises, field, ground, park, reserve, garden, wharf, pier, jetty, platform, market, passage, or other place for the time being used for a public purpose or open to access by the public, whether on payment or otherwise, or open to access by the public by the express or tacit consent or sufferance of the owner, and whether the same is or is not at all times so open; and (b) a place declared, by regulation, to be a public place. [52] Hence, for the purposes of the Vagrants Act, public places include places not normally open to the public, but to which the public may have access at particular times upon paying a fee. They also include places accessible to the public with the tacit consent of the owner. And for the purposes of s 7, an offence might be committed in any private place that is within sight or hearing of a public place. … Subject to the Constitution, the words used by the appellant constituted an offence under s 7(1)(d) of the Vagrants Act 42 [72] The words used by the appellant were uttered in a public place. They were calculated to hurt the personal feelings of Constable Power and the conclusion that they did so is inevitable. Accordingly, they were “insulting words” for the purpose of s 7(1)(d). It is no answer to the charge that the appellant uttered the words to bystanders and not 43 solely to Constable Power. The words: “This is Constable Brendan Power, a corrupt police officer” were said in his presence and referred to him in the most pointed way. By necessary implication, they told Constable Power to his face that he was a corrupt police officer. [73] Unless the implied freedom of communication on political and government matters in the Constitution protects the use of the words on this occasion and in this context, the appellant was guilty of an offence against s 7(1)(d) of the Vagrants Act. To the constitutional issue, I now turn. Issues not requiring resolution in this appeal [74] All parties to the appeal accepted that the validity of s 7(1)(d) had to be determined by reference to the tests laid down by this Court in Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 567-568: “When a law of a State or federal Parliament or a Territory legislature is alleged to infringe the requirement of freedom of communication imposed by ss 7, 24, 64 or 128 of the Constitution, two questions must be answered before the validity of the law can be determined. First, does the law effectively burden freedom of communication about government or political matters either in its terms, operation or effect? Second, if the law effectively burdens that freedom, is the law reasonably appropriate and adapted to serve a legitimate end the fulfilment of which is compatible with the maintenance of the constitutionally prescribed system of representative and responsible government and the procedure prescribed by s 128 for submitting a proposed amendment of the Constitution to the informed decision of the people (hereafter collectively ‘the system of government prescribed by the Constitution’). If the first question is answered ‘yes’ and the second is answered ‘no’, the law is invalid.” (Footnotes omitted) [75] In the Queensland Court of Appeal and in this Court, the respondents conceded that the impugned provision was capable of burdening political communication in the manner described by the first limb of the Lange test. Two important matters are involved in this concession. [76] First, it concedes that the Constitution may invalidate a State law that restricts, without justification, a political communication concerning the functioning of representative and responsible government at federal level. That element of the concession was properly made: see Lange at 567. In Levy v Victoria (1997) 189 CLR 579 I pointed out (at 622) that “no Commonwealth or State law can validly impair the freedom of communication that the Constitution protects”. 44 [77] Secondly, it concedes that the words used by the appellant concerned matters within the freedom of communication that the Constitution protects even though it concerns State police [11.130]

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Coleman v Power cont. officers. In Lange, the Court acknowledged (at 571-572) the interrelated character of political and governmental discussion at the various levels of government when considering the scope of qualified privilege: [D]iscussion of government or politics at State or Territory level and even at local government level is amenable to protection by the extended category of qualified privilege, whether or not it bears on matters at the federal level. Of course, the discussion of matters at State, Territory or local level might bear on the choice that the people have to make in federal elections or in voting to amend the Constitution, and on their evaluation of the performance of federal Ministers and their departments. The existence of national political parties operating at federal, State, Territory and local government levels, the financial dependence of State, Territory and local governments on federal funding and policies, and the increasing integration of social, economic and political matters in Australia make this conclusion inevitable. … 45 [80] However, in my view the concessions made by the respondents were properly made. For the purposes of ss 7, 24, 64 and 128 of the Constitution – the sections that give rise to the constitutional implication – the relevant subjects of political and governmental communication include the activities of the executive arm of government. For that purpose, the Executive includes Ministers, public servants and “statutory authorities and public utilities which are obliged to report to the legislature or to a Minister who is responsible to the legislature”: Lange at 561. The conduct of State police officers is relevant to the system of representative and responsible government set up by the Constitution. State police officers are involved in the administration and enforcement of federal as well as State criminal law. Members of the police forces of the States and Territories are included in the definitions of “constable” and “law enforcement officer” in s 3 of the Crimes Act 1914 (Cth). That Act empowers State police officers to execute search warrants and to make searches and arrests without warrant: Part IAA, Divs 2 – 4). Similarly, State and Territory police officers are included in the definition of “investigating official” (s 23B) for the purposes of investigation of Commonwealth offences, including detention for questioning (Part IC). Moreover, persons convicted of offences – State or federal – punishable by imprisonment for a year or more are disqualified from sitting in the federal Parliament by s 44(ii) of the Constitution. Public evaluation of the performance of Federal Ministers, such as the Attorney-General, the Minister for Justice and the Minister for Customs, may be influenced, therefore, by the manner in which State police officers enforce federal law and investigate federal offences. Allegations that members of the Queensland police force are corrupt may reflect on federal Ministers as well as the responsible State Ministers. Such allegations may undermine public confidence in the administration of the federal, as well as the State, criminal justice system. [81] The concession that the words used by the appellant were a communication on political or government matters was also correctly made. It is beside the point that those words were insulting to Constable Power. Insults are as much a part of communications concerning political and government matters as is irony, humour or acerbic criticism. Many of the most biting and offensive political 46 insults are as witty as they are insulting. When Lloyd George said that Sir John Simon had sat for so long on the fence that the iron had entered his soul, the statement was as insulting as it was witty, for it insinuated that Sir John was a political coward who failed to take sides on controversial issues (see Rathbone and Stephenson, Pocket Companion Guide to Political Quotations, (1985) at 43). [82] Furthermore, because s 7(1)(d) penalised insulting words used in statements concerning political and governmental matters, it burdened those statements in much the same way as the law of defamation burdens those statements. [83] The real issue between the parties is whether the burden imposed on communications by s 7(1)(d) was reasonably appropriate and adapted to achieving an end, the fulfilment of which is compatible with the system of representative and responsible government prescribed by the Constitution (Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 567). That test has been the subject of criticism. Some commentators contend that inferior courts face considerable 858

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Coleman v Power cont. difficulty when called upon to apply the “reasonably appropriate and 29 adapted” or “proportionality” tests (Stone, “The Limits of Constitutional Text and Structure: Standards of Review and the Freedom of Political Communication” (1999) 23 Melbourne University Law Review 668 and Arcioni, “Politics, Police and Proportionality – An Opportunity to Explore the Lange Test: Coleman v Power” (2003) 25 Sydney Law Review 379). The leading critic is Dr Adrienne Stone who forcefully contends that both these tests involve an “ad hoc balancing” process without criteria or rules for measuring the value of the means (the burden of the provision) against the value of the end (the legitimate purpose). [84] One of Dr Stone’s articles (Stone (1999)) contains a detailed analysis of the tests for determining what laws infringe the freedom of political communication. She argues that the problems concerned with the reasonably appropriate and adapted test stem from the “High Court’s assertion that the freedom of political communication is governed solely by textually based interpretation” and leaves the Court “without much guidance as to the selection of a standard of review.” (Stone (1999) at 698). Dr Stone contends that the High Court’s approach to constitutional interpretation is anti-theoretical and “says only that some freedom of political communication is necessary to protect certain institutions: free voting in elections and referenda, and 47 responsible government” (Stone (1999) at 699). She asserts that the Court’s approach does not answer “how much and what kind of protection of political communication does this entail” (Stone (1999) at 699). She argues that the more ad hoc the assessment required by the applicable test, the less certainty the test provides, and uncertainty is a result to be avoided. That is because uncertainty produces a “chilling” effect on political speech. Furthermore, she contends that uncertainty invites greater regulation and “burdening” of political communication. She argues that the tests accept that a range of restrictions are compatible with the constitutional freedom and that they do not demand that the regulating law be the least restrictive measure consistent with the freedom (Stone (1999) at 696–697). Dr Stone also contends that the present tests increase the likelihood of a value-laden process (Stone (1999) at 702) being disguised in value-neutral language because the means/ends approach requires a judgment involving comparative evaluations of the freedom of political communication and some other end to be achieved by the impugned provision. [85] Dr Stone says that if “the Court is going to create a rule that gives freedom of political communication special weight in particular circumstances, it needs some conception of the freedom of political communication against which to do this” (Stone (1999) at 700). She argues that to express “a judgment about the relative importance of free political communication and competing values inevitably involves the kind of reasoning against an overarching or underlying principle or set of values” (Stone (1999) at 700). And she claims that by concentrating on text and structure in Lange, the Court distanced itself from this kind of reasoning. Fundamental to her criticism is that reasoning about freedom of communication involves reference to values that are outside the Constitution (Stone (1999) at 704). 48 [86] Another critic asserts that expressions such as “extreme” measures or “extraordinary intrusions”, used by High Court Justices in past cases to invalidate provisions that infringe freedom of communication, have a low predictive value (Arcioni, “Politics, Police and Proportionality – An Opportunity to Explore the Lange Test: Coleman v Power” (2003) 25 Sydney Law Review 379 at 386). [87] The Attorneys-General of the Commonwealth and New South Wales also criticised the reasonably appropriate and adapted test. They urged the Court to adopt a test that is more deferential to the judgment of the legislature than the reasonably appropriate and adapted test. They contended that the appropriate test was whether the impugned legislation was “reasonably capable of being seen as appropriate and adapted”. Although Justices of this Court have used that formulation on previous occasions, a majority of the Court has not accepted it in any case concerned with the constitutional protection of political communication. Compatibility with freedom of communication under the Constitution [88] The above criticisms overlook two matters concerning the “reasonably appropriate and adapted” test formulated in Lange. Those matters show that freedom of communication under the Commonwealth Constitution is different from freedom of speech provisions in other Constitutions and [11.130]

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Coleman v Power cont. that ideas relating to or arising out of other Constitutions have little relevance to the freedom of communication under the Commonwealth Constitution. Those matters also show that no question of ad hoc balancing is involved in the two-pronged test formulated in Lange and that the text and structure of the Constitution enable the Court to determine whether the freedom has been infringed without resort to political or other theories external to the Constitution. [89] First, freedom of political communication under the Constitution arises only by necessary implication from the system of representative and responsible government set up by the Constitution. It is not the product of an express grant. It arises because the system of representative and responsible government cannot operate without the people and their representatives communicating with each other about government and political matters. As the Court pointed out in Lange, “[f]reedom of communication on matters of government and politics is an indispensable incident of that system of representative government which the Constitution creates by directing that the members of the House of Representatives and the Senate shall be ‘directly chosen by the people’ of the Commonwealth and the States, respectively” (Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 559). If the system is to operate effectively, however, of necessity it must be free from laws whose burdens interfere or have a tendency to interfere with its effectiveness. Thus, it is a necessary implication of the system that no legislature or government within the 49 federation can act in a way that interferes with the effective operation of that system. But since the implication arises by necessity, it has effect only to the extent that it is necessary to effectively maintain the system of representative and responsible government that gives rise to it. “It is”, said the Court in Lange (Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 561), “limited to what is necessary for the 32 effective operation of that system of representative and responsible government provided for by the Constitution.” [90] Second, the legislative powers conferred on the Commonwealth by ss 51 and 52 of the Constitution are conferred “subject to this Constitution”. So is the continuance of the Constitution of each State under s 106. And the powers of a State continued under s 107 do not extend to those “withdrawn from the Parliament of the State”. Those withdrawn from the State include not only those powers expressly withdrawn from the States such as those referred to in ss 51 and 90 but those powers which would entrench on the zone of immunity conferred by s 92 and the implied freedom of communication on political and governmental matters. Consequently, the powers of the Commonwealth, the States and Territories must be read subject to the Constitution’s implication of freedom of communication on matters of government and politics. The constitutional immunity is the leading provision; the sections conferring powers on the federal, State and Territory legislatures are subordinate provisions that must give way to the constitutional immunity. To the extent that the exercise of legislative or executive powers, conferred or saved by the Constitution, interferes with the effective operation of the freedom, the exercise of those powers is invalid. [91] In determining whether a law is invalid because it is inconsistent with freedom of political communication, it is not a question of giving special weight in particular circumstances to that freedom (cf Stone (1999) at 700). Nor is it a question of balancing a legislative or executive end or purpose against that freedom. Freedom of communication always trumps federal, State and Territorial powers when they conflict with the freedom. The question is not one of weight or balance but whether the federal, State or Territorial power is so framed that it impairs or tends to impair the effective operation of the constitutional system of representative and responsible government by impermissibly burdening communications on political or governmental matters. In all but exceptional cases, a law will not burden such communications unless, by its operation or practical effect, it directly and not remotely restricts or limits the content of those communications or the time, place, manner or conditions of their occurrence. And a law will not impermissibly burden those communications unless its object and the 50 manner of achieving it is incompatible with the maintenance of the system of representative and responsible government established by the Constitution. [92] In the two-limb test formulated in Lange, the adjectival phrase “compatible with the maintenance of the constitutionally prescribed system of representative and responsible government” (Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 567) does not merely qualify the expression “legitimate end”. It qualifies the compound conception of the fulfilment of such an end, and the 860

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Coleman v Power cont. emphasis of the qualification is on the term “fulfilment” rather than “end”. That is to say, it is the manner of achieving the end as much as the end itself that must be compatible with the maintenance of the constitutionally prescribed system of representative and responsible government. Of course, the end itself may be incompatible with the system of representative and responsible government. It will be incompatible, for example, if it is designed to undermine that system. [93] No doubt the Court would have made the meaning of the second limb in Lange clearer if it had used the phrase “in a manner” instead of the phrase “the fulfilment of” in that limb. The second limb would then have read “is the law reasonably appropriate and adapted to serve a legitimate end [in a manner] which is compatible with the maintenance of the constitutionally prescribed system of representative and responsible government?” However, it is clear that the Court did intend the second limb to be read in a way that requires that both the end and the manner of its achievement be compatible with the system of representative and responsible government. This is clear from the example that the Court gave immediately after formulating the two-limb test. The Court said (Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 568): In ACTV (Australian Capital Television Pty Ltd v Commonwealth (1992) 177 CLR 106), for example, a majority of this Court held that a law seriously impeding discussion during the course of a federal election was invalid because there were other less drastic means by which the objectives of the law could be achieved. And the common law rules, as they have traditionally been understood, must be examined by reference to the same considerations. If it is necessary, they must be developed to ensure that the protection given to personal reputation does not unnecessarily or unreasonably impair the freedom of communication about government and political matters which the Constitution requires. (emphasis added) [94] The example of ACTV shows that in Lange the Court intended the adjectival phrase “compatible with the maintenance of the constitutionally prescribed system” to govern the means by which the impugned law achieved its end. The Parliament had enacted the relevant legislation in ACTV “to safeguard the integrity of the political 51 system by reducing, if not eliminating, pressure on political parties and candidates to raise substantial sums of money in order to engage in political campaigning on television and radio, a pressure which renders them vulnerable to corruption and to undue influence by those who donate to political campaign funds” (Australian Capital Television Pty Ltd v Commonwealth (1992) 177 CLR 106 at 129 per Mason CJ). Despite the object of the legislation – an object that enhanced representative government – Parliament adopted means that were not compatible with the implied freedom. The ACTV example demonstrates the point that it is the content of the law – the manner in which it seeks to achieve the end – as well as the end which must be compatible with the prescribed system. [95] The true test was clearly expressed by Kirby J in his judgment in Levy v Victoria ((1997) 189 CLR 579 at 64). After discussing a number of tests that have been used to determine whether a law is consistent with the freedom, his Honour said: “A universally accepted criterion is elusive. In Australia, without the express conferral of rights which individuals may enforce, it is necessary to come back to the rather more restricted question. This is: does the law which is impugned have the effect of preventing or controlling communication upon political and governmental matters in a manner which is inconsistent with the system of representative government for which the Constitution provides?” (emphasis added) [96] In my view, this formulation accurately states the second limb of the Lange test. It emphasises that a law that burdens communications on political or governmental matters in the sense I have explained will be invalid unless it seeks to achieve an end in a manner that is consistent with the system of representative government enshrined in the Constitution. [97] When, then, is a law not reasonably appropriate and adapted to achieving an end in a manner that is compatible with the system of representative government enshrined in the Constitution? In my opinion, it will not be reasonably appropriate and adapted to achieving an end in such a manner whenever the burden is such that communication on political or governmental matters is no longer “free”. Freedom of communication under the Constitution does not mean free of all restrictions. The [11.130]

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Coleman v Power cont. freedom is not absolute or equivalent to licence. The zone of freedom conferred by the constitutional immunity is not, as Higgins J said (Commonwealth v New South Wales (1923) 33 CLR 1 at 59. Alsatia was part of the Whitefriars district of London and was a place of sanctuary for lawbreakers. Jack Sheppard was a notorious highwayman of the early 18th century. See Cowen, Alsatias for Jack Sheppards?: The Law in Federal Enclaves in Australia, Sir John Latham and other papers, (1965) at 172), in discussing s 52 of the Constitution, an “Alsatia for Jack Sheppards”, where law does not 52 run. Communications on political and governmental matters are part of the system of representative and responsible government, and they may be regulated in ways that enhance or protect the communication of those matters. Regulations that have that effect do not detract from the freedom. On the contrary, they enhance it. [98] Hence, a law that imposes a burden on the communication of political and governmental matter may yet leave the communication free in the relevant sense. Thus, laws which promote or protect the communications or which protect those who participate in the prescribed system, for example, will often impose burdens on communication yet leave the communications free. On the other hand, laws that burden such a communication by seeking to achieve a social objective unrelated to the system of representative and responsible government will be invalid, pro tanto, unless the objective of the law can be restrictively interpreted in a way that is compatible with the constitutional freedom. Thus, a law that sought to ban all political communications in the interest of national security would be invalid unless it could be demonstrated that at the time such a prohibition was the only way that the system of representative government could be protected. In such a case, the issue would not be whether the needs of national security require the prohibition of communication on political and governmental matters. It would be whether, at that time, the system of representative government is so threatened by an external or internal threat that prohibiting all communication on political and governmental matters is a reasonably appropriate and adapted means of maintaining the system. A total prohibition would not be reasonable unless there was no other way in which the system of representative government could be protected. Ordinarily, the complete prohibition on, or serious interference with, political communication would itself point to the inconsistency of the objective of the law with the system of representative government. [99] It follows then that not all laws burdening communications on political and governmental matters are impermissible laws. They will be permissible as long as they do no more than promote or protect such communications and those who participate in representative and responsible government from practices and activities which are incompatible with that system of government. Thus, although defamation law burdens communications on political and government matters, the law of defamation, as developed in Lange, is now a reasonably appropriate and adapted means of protecting the reputation of those participating in political and governmental matters. [100] As the reasoning in Lange shows, the reasonably appropriate and adapted test gives legislatures within the federation a margin of choice 53 as to how a legitimate end may be achieved at all events in cases where there is not a total ban on such communications (Levy v Victoria (1997) 189 CLR 579 at 598; Rann v Olsen (2000) 76 SASR 450 at 483). The constitutional test does not call for nice judgments [36] as to whether one course is slightly preferable to another. But the Constitution’s tolerance of the legislative judgment ends once it is apparent that the selected course unreasonably burdens the communication given the availability of other alternatives. The communication will not remain free in the relevant sense if the burden is unreasonably greater than is achievable by other means. Whether the burden leaves the communication free is, of course, a matter of judgment. But there is nothing novel about Courts making judgments when they are asked to apply a principle or rule of law. Much of the daily work of courts requires them to make judgments as to whether a particular set of facts or circumstances is or is not within a rule or principle of law. The end served by s 7(1)(d) [101] In this case, the Solicitor-General of Queensland proffered two purposes to justify the enactment of s 7(1)(d) in so far as it burdened the communication of political and governmental matters. The first was that the object of the paragraph was to avoid breaches of the peace. The second was that the 862

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Coleman v Power cont. paragraph protected free political communication by removing threats, abuses and insults from the arena of public discussion, so that persons would not be intimidated into silence. Breach of the peace [102] Regulating political statements for the purpose of preventing breaches of the peace by those provoked by the statements is an end that is compatible with the system of representative government established by the Constitution. However, in the case of insulting words, great care has to be taken in designing the means of achieving that end if infringement of the constitutional freedom is to be avoided. In so far as insulting words are used in the course of political discussion, an unqualified prohibition on their use cannot be justified as compatible with the constitutional freedom. An unqualified prohibition goes beyond anything that could be regarded as reasonably appropriate and adapted for preventing breaches of the peace in a manner compatible with the prescribed system. Without seeking to state exhaustively the qualifications needed to prevent an infringement of the freedom of communication, the law would have to make proof of a breach of the peace and the intention to commit the breach elements of the offence. It may well be the case that, in the context of political communications, further qualifications would be required before a law making it an offence to utter insulting words would be 54 valid. In the present case, it is enough to say that s 7(1)(d) infringed the constitutional freedom by simply making it an offence to utter insulting words in or near a public place whether or not a person hears those words even when they were used in the discussion of political and governmental matters. [103] The first justification for upholding the conviction of the appellant under s 7(1)(d) must be rejected. Intimidating participants in the discussion [104] Regulating political statements for the purpose of preventing the intimidation of participants in debates on political and governmental matters is an end that is compatible with the system of representative government laid down by the Constitution. However, as in the case of preventing breaches of the peace, great care has to be taken in designing the means of achieving that end if infringement of the constitutional freedom is to be avoided. [105] The use of insulting words is a common enough technique in political discussion and debates. No doubt speakers and writers sometimes use them as weapons of intimidation. And whether insulting words are or are not used for the purpose of intimidation, fear of insult may have a chilling effect on political debate. However, as I have indicated, insults are a legitimate part of the political discussion protected by the Constitution. An unqualified prohibition on their use cannot be justified as compatible with the constitutional freedom. Such a prohibition goes beyond anything that could be regarded as reasonably appropriate and adapted to maintaining the system of representative government. [106] The second justification for upholding the conviction of the appellant under s 7(1)(d) must also be rejected. … Gummow and Hayne JJ: 74 [181] In the context provided by the section as a whole, is “insulting” to be read as encompassing any and every disrespectful or harmful word or gesture? Is it a criminal offence (of behaving in an insulting manner) for someone in a public place to deliberately turn his or her back on a public figure or even an acquaintance? To do so may be an insult, but is it to behave in an insulting manner? Is the uttering of an unmannerly jibe at another to be a criminal offence (of using insulting words) if, for example, one calls the other “ugly”, or “stupid”, or uses some other term of disapprobation? Again, to do so may be to offer insult, but is it to use insulting words to a person? Are the niceties of the civil law of defamation to be introduced to the determination of whether words used in a public place are insulting words? There is no obvious basis upon which any of the defences to the tort of defamation might be adopted and applied. If that is so, why should the criminal offence be given a reach which, because none of the civil law defences would be available, would be much larger than the tort? [11.130]

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Coleman v Power cont. The preferred construction [182] Even without regard to the constitutional considerations discussed in Lange, there are powerful reasons to conclude that s 7 does not go so far as to reach the examples given. To do so would extend the law well beyond its public purposes. The combination of four factors requires that the section is to be given a confined operation. [183] Those four factors are first, that the section creates an offence; secondly, the description of the words as “insulting”; thirdly, the requirement that the words are used to a person; and fourthly, the requirement that the words are used in, or within the hearing of, a public place. Those factors, standing alone, suggest that the “insulting” words that are proscribed are those which are directed to hurting an identified person and are words which, in the circumstances in which they are used, are provocative (cf Lendrum v Campbell (1932) 32 SR (NSW) 499 at 503.) in the sense that either they are intended to provoke unlawful physical retaliation, or they are reasonably likely to provoke unlawful physical retaliation from either the person to whom they are directed or some other who hears the words uttered. That is, the removal of the references to breach of the peace found in the 1851 Queensland Act took the law substantially to the point which Griffith CJ considered but rejected in Ex parte McGovern. Whether words are insulting would turn on the assessment of whether, in the circumstances in which they were used, they were either intended to provoke unlawful physical retaliation, or were reasonably likely to do so. [184] As will later be explained, the constitutional considerations debated in argument in this matter reinforce the conclusion that the provision 75 should be construed in that way. It is as well, however, to stay to explain the other considerations which lead to that construction. [185] First and foremost is the fact that s 7(1)(d) creates a criminal offence. The offence which it creates restricts freedom of speech. That freedom is not, and never has been, absolute. But in confining the limits of the freedom, a legislature must mark the boundary it sets with clarity. Fundamental common law rights are not to be eroded or curtailed save by clear words (Re Bolton; Ex parte Beane (1987) 162 CLR 514 at 523; Bropho v Western Australia (1990) 171 CLR 1 at 18; Plenty v Dillon (1991) 171 CLR 635 at 654; Coco v The Queen (1994) 179 CLR 427 at 435-438; Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission (2002) 213 CLR 543.) [186] Support for the construction we have given can be had from considering what has been said in the Supreme Court of the United States about the application of the First Amendment’s requirement that “Congress shall make no law … abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances”. [187] In Chaplinsky v New Hampshire (1942) 315 US 568, Murphy J, delivering the unanimous opinion of the Court, said (at 571-572): [I]t is well understood that the right of free speech is not absolute at all times and under all circumstances. There are certain well-defined and narrowly limited classes of speech, the prevention and punishment of which have never been thought to raise any Constitutional problem. These include the lewd and obscene, the profane, the libelous, and the insulting or ’fighting’ words - those which by their very utterance inflict injury or tend to incite an immediate breach of the peace. It has been well observed that such utterances are no essential part of any exposition of ideas, and are of such slight social value as a step to truth that any benefit that may be derived from them is clearly outweighed by the social interest in order and morality. (Emphasis added; footnotes omitted) This principle had found earlier exposition in Cantwell v Connecticut (1940) 310 US 296 and has since been adopted and applied in a number of cases (see, eg, Terminiello v Chicago (1949) 337 US 1; Cohen v California (1971) 403 US 15; Gooding, Warden v Wilson (1972) 405 US 518; Lewis v City of New Orleans (1974) 415 US 130; RAV v City of St Paul, Minnesota (1992) 505 US 377; Virginia v Black (2003) 155 Law Ed 2d 535). It has been said that “fighting words remain a category of speech unprotected by the First Amendment [but] in the more than half century since Chaplinsky, the [Supreme] Court has never again upheld a fighting words conviction”(Chemerinsky, Constitutional Law – Principles and 864

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Coleman v Power cont. Policies, 2 nd ed (2002), §11.3.3.2.) However, neither the 76 details of the limitations that have been set in the United States to the application of the principle (Terminiello (1949) 337 US 1; Lewis (1974) 415 US 130.) nor the difficulties that have been encountered there in connection with “symbolic or expressive conduct” (Virginia v Black (2003) 155 Law Ed 2d 535 at 551 (emphasis added). See also RAV (1992) 505 US 377 at 382.) need now be examined. The point to be drawn from the United States experience is important but limited. It is that there are certain kinds of speech which fall outside concepts of freedom of speech. In the United States it has been emphasised that those classes of speech are “narrowly limited” (Chaplinsky (1942) 315 US 568 at 571). [188] The Australian constitutional and legal context is different from that of the United States. The United States decisions about so-called “fighting words” find no direct application here. But the United States references to “narrowly limited” definitions of speech which can be proscribed find echoes in the application of well-established principles of statutory construction to the Vagrants Act. Once it is recognised that fundamental rights are not to be cut down save by clear words, it follows that the curtailment of free speech by legislation directed to proscribing particular kinds of utterances in public will often be read as “narrowly limited”. [189] There is then a further, and separate, point which follows from the fact that s 7(1)(d) of the Vagrants Act creates a criminal offence. That point can be identified by posing the question: what is it which would make the public, as distinct from private, utterance of insulting words to a person a matter for criminal punishment? The answer to the question must be found in the particular characteristics which the “insult” must have. [190] The proscription of profane, indecent or obscene language marks a limit on the kind of language which may be employed in or within the hearing of public places. Enforcement of that limit ensures that a minimum standard of what, in other times, might have been called decorum or seemly discourse in public places is maintained. [191] By contrast, the requirement that “threatening, abusive, or insulting words” be used to a person demonstrates that s 7(1)(d) is not directed simply to regulating the way in which people speak in public. No crime would be committed by uttering threats to, or abuse or insults about, some person who is not there to hear what is said (unless, of course, the speaker’s behaviour could be held to fall within s 7(1)(c)). That being so, the proscription of the use of insulting words to another, and for that matter the proscription of engaging in insulting behaviour, must find support in more than the creation and enforcement of particular standards of discourse and behaviour in public. Making criminal the use of certain kinds of words to another can be explained only by reference to the effect on, or the reaction of, 77 the person to whom the words are directed. It can be explained only by the provocation offered. As Street CJ said in Lendrum (1932) 32 SR (NSW) 499 at 503, “what the Legislature had in mind, in speaking of insulting words, was something provocative”. It is that kind of offence to the hearer which the section is directed to enjoining. [192] That this is so gains some support from the use of “insulting” in a collocation of three words – “threatening, abusive, or insulting”. As pointed out earlier, “threatening” is a word which conveys the possibility of violence. As The Oxford English Dictionary (2nd ed (1989), vol 17, p 998) puts it, to threaten is “to declare (usually conditionally) one’s intention of inflicting injury upon” someone. Thus, the effect which the use of threatening words may provoke in the hearer is fear: fear that the threat of violence will be carried into effect. Ordinarily, the person uttering the words intends that this be the effect of what is said. [193] Again, as indicated earlier, “abusive” and “insulting” words can be understood as anything that is intended to hurt the hearer. But in the context of this provision “abusive” and “insulting” should be understood as those words which, in the circumstances in which they are used, are so hurtful as either they are intended to, or they are reasonably likely to provoke unlawful physical retaliation. Only if “abusive” and “insulting” are read in this way is there a public purpose to the regulation of what is said to a person in public. [194] These conclusions are reinforced by considering the principles established in Lange. [11.130]

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Coleman v Power cont. Lange v Australian Broadcasting Corporation [Their Honours referred to the two questions established by Lange as the test for invalidity and continued] [197] Although, as noted earlier, argument in this appeal focused largely upon the second question posed in Lange, it is as well to state explicitly that these reasons assume, they do not decide, that the first question presented in Lange should be answered, “Yes”. That is, it is assumed, not decided, that s 7(1)(d) of the Vagrants Act may, in some cases, burden a communication about government or political matters, and also that what the appellant said was such a communication. Insult and invective have been employed in political communication at least since the time of Demosthenes. Given the extent to which law enforcement and policing in Australia depends both practically, and structurally (through bodies like the Australian Crime Commission) upon close co-operation of federal, State and Territory police forces, there is evident strength in the proposition that an allegation that a State police officer is corrupt might concern a government or political matter that affects the people of Australia (Lange (1997) 189 CLR 520 at 571). It is, however, not necessary to decide the point. [198] Construed in the fashion we have earlier indicated, s 7(1)(d) is reasonably appropriate and adapted to serve the legitimate public end of keeping public places free from violence. That is an end the fulfilment of which is entirely compatible with the maintenance of the constitutionally prescribed system of representative and responsible government and the procedure prescribed by s 128 for submitting a proposed amendment of the Constitution to the informed decision of the people. [199] If s 7(1)(d) is not construed in the way we have indicated, but is construed as prohibiting the use of any words to a person that are 79 calculated to hurt the personal feelings of that person, it is evident that discourse in a public place on any subject (private or political) is more narrowly constrained by the requirements of the Vagrants Act. And the end served by the Vagrants Act (on that wider construction of its application) would necessarily be described in terms of ensuring the civility of discourse. The very basis of the decision in Lange would require the conclusion that an end identified in that way could not satisfy the second of the tests articulated in Lange. What Lange decided was that the common law defence of qualified privilege to an action for defamation must be extended to accommodate constitutional imperatives. That extension would not have been necessary if the civil law of defamation (which requires in one of its primary operations that a speaker not defame another) was itself, without the extension of the defence of qualified privilege, compatible with the maintenance of the constitutionally prescribed system of government. Section 7(1)(d), Vagrants Act - Conclusions [200] Section 7(1)(d) is not invalid. It does, however, have a more limited operation than it was understood to have in the courts below. In particular, it does not suffice for the person to whom the words were used to assert that he or she was insulted by what was said. And it does not suffice to show that the words used were calculated to hurt the self-esteem of the hearer. Where, as here, the words were used to a police officer, then unless more is shown, it can be expected that the police officer will not physically retaliate. It follows that unless there is something in the surrounding circumstances (as, for example, the presence of other civilians who are affected by what is said) the bare use of words to a police officer which the user intends should hurt that officer will not constitute an offence. By their training and temperament police officers must be expected to resist the sting of insults directed to them. The use of such words would constitute no offence unless others who hear what is said are reasonably likely to be provoked to physical retaliation. [201] The appellant’s conviction should therefore be set aside. Kirby J: 82 [210] Lange ((1997) 189 CLR 520 at 567) establishes that two questions must be answered when deciding the validity of a law alleged to infringe the implied constitutional freedom of communication: (1) Does the law effectively burden freedom of communication about governmental or political matters, either in its terms, operation or effect? (2) If so, is the law reasonably appropriate and adapted (or, as I prefer to express it, proportional) so as to serve a legitimate end, the fulfilment of which is compatible with the maintenance of the system of government prescribed by the Constitution? 866

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Coleman v Power cont. [211] In his reasons in this appeal, McHugh J (see reasons of McHugh J at 51 [95]-[96]) has proposed a slight rewording of the second limb of the Lange test by reference, in part, to the way I expressed it in Levy v Victoria (1997) 189 CLR 579 at 645-646. In their reasons, Gummow and Hayne JJ (the joint reasons) have expressed their assent to McHugh J’s reformulation (see joint reasons at 77-78 [196]). So do I. … [237] If “insulting” were given the interpretation most clearly favoured in this appeal by Gleeson CJ and Heydon J, the potential operation on political discourse of an unqualified offence of expressing insulting language in any public place would be intolerably over-wide. It would be difficult or impossible to characterise such a law as one achieving its ends in a manner that is consistent with the system of representative government envisioned by the Constitution. [238] Reading the description of civilised interchange about governmental and political matters in the reasons of Heydon J (see reasons of Heydon J at 122-123 [324]-[326]). I had difficulty in recognising the Australian political system as I know it. His Honour’s chronicle appears more like a description of an intellectual salon where civility always (or usually) prevails. It is not, with respect, an accurate description of the Australian governmental and political system in action. [239] One might wish for more rationality, less superficiality, diminished invective and increased logic and persuasion in political discourse. But those of that view must find another homeland. From its earliest history, Australian politics has regularly included insult and emotion, calumny and invective, in its armoury of persuasion (Pearl, Wild Men of Sydney, 3rd ed (1970); Pearl, Brilliant Dan Deniehy: A Forgotten Genius (1972); Bate, Lucky City: The First Generation at Ballarat 1851-1901 (1978), p 139). They are part and parcel of the struggle of ideas. Anyone in doubt should listen for an hour or two to the broadcasts that bring debates of the Federal Parliament to the living rooms of the nation. This is the way present and potential elected representatives have long campaigned in Australia for the votes of constituents and the support of their policies. It is unlikely to change. By protecting from legislative burdens governmental and political communications in Australia, the Constitution addresses the nation’s representative government as it is practised. It does not protect only the whispered civilities of intellectual discourse. “Insulting” therefore requires a more limited interpretation in order for s 7(1)(d) to be read so as not to infringe the constitutional freedom defined in Lange. … The State law burden and proportionality issues do not arise 98 [254] It follows that s 7(1)(d) can, and should be, construed so that it conforms to the Lange test as reformulated in this appeal. As so construed, “insulting” words in the context of the Act are those that go beyond words merely causing affront or hurt to personal feelings. They refer to words of an aggravated quality apt to a statute of the present type, to a requirement that the insulting words be expressed “to” the person insulted, and to a legislative setting concerned with public order. They are words intended, or reasonably likely, to provoke unlawful physical retaliation (see joint reasons at 77 [93]). They are words prone to arouse a physical response, or a risk thereof (see reasons of Callinan J at 108-109 [286]-[287]). They are not words uttered in the course of communication about governmental or political matters, however emotional, upsetting or affronting those words might be when used in such a context. [255] In such communication, unless the words rise to the level of provoking or arousing physical retaliation or the risk of such (and then invite the application of the second limb of the Lange test) a measure of robust, ardent language and “insult” must be tolerated by the recipient. In Australia, it must be borne for the greater good of free political communication in the representative democracy established by the Constitution. [256] If s 7(1)(d) is confined to the use in or near a public place of threatening, abusive or insulting words that go beyond hurting personal feelings and involve words that are reasonably likely to provoke unlawful physical retaliation (as explained in the joint reasons at [193]), the proportionality of the contested provision and the legitimate ends of State government in the context of the fulfilment of those ends and of the system of representative and responsible government provided in the federal Constitution becomes clear. The Act, so interpreted, is confined to 99 preventing and sanctioning public violence and provocation to such conduct. As such, it deals with extreme conduct or “fighting” [11.130]

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Coleman v Power cont. words (Chaplinsky v New Hampshire (1942) 315 US 568 at 571-572). It has always been a legitimate function of government to prevent and punish behaviour of such kind. Doing so in State law does not diminish, disproportionately, the federal system of representative and responsible government. On the contrary, it protects the social environment in which debate and civil discourse, however vigorous, emotional and insulting, can take place without threats of actual physical violence. So construed the State law is valid [257] It follows from the foregoing analysis that s 7(1)(d) of the Act, properly understood, does not offend the implied constitutional freedom of expression in Australia. I reach the same conclusion as stated in the joint reasons. However, my reasoning is somewhat different. For me, the history of the legislation in England and Australia is less important than the inherent ambiguity of the statutory phrase, the language, character and purpose of the Act and the three interpretative principles that I have mentioned. But in the end, I arrive at the same destination as the joint reasons. Respectfully, I regard the contrary view as over-influenced by dictionary meanings. …

Notes&Questions

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1.

2.

Four Justices (McHugh, Gummow, Hayne and Kirby JJ) in Coleman supported the reformulation of the second limb of the Lange test so that it would read: “Is the law reasonably appropriate and adapted to serve a legitimate end [in a manner] which is compatible with the maintenance of the constitutionally prescribed system of representative and responsible government?” This reformulation drew on a suggestion put forward by Kirby J in Levy (1997) 189 CLR 579. Does the inclusion of the words “in a manner” in the second limb of Lange test provide any greater clarity to the test? Does it significantly alter the Lange formulation (to which McHugh, Gummow and Kirby JJ were parties)? Does McHugh J’s response to Professor Stone’s criticisms provide a clear criterion for determining the point at which a burden has become impermissible because of its impairment of the operation of the system of representative and responsible government? Consider the following comment: A frank acknowledgment that the “reasonably appropriate and adapted” test requires values to be injected in the “balancing” process will enable the critics to be countered by posing the question “so what is new?” After all, the judiciary has always been familiar with the operation of value-laden tests. (HP Lee, “The “Reasonably Appropriate and Adapted” Test and the Implied Freedom of Political Communication”, in M Groves (ed), Law and Government in Australia (Federation Press, Sydney, 2005), pp 59, 75).

3.

See also Stone, “The Limits of Constitutional Text and Structure Revisited” (2005) 11 University of NSW Law Journal 8. A striking feature of Coleman is the way the majority describe the nature of Australian political debate. Justice Kirby refers to the “insult, emotion, calumny and invective” that characterise Australian politics and rejects the notion that pursuit of “civility” is a legitimate reason to regulate political debate concluding “the Constitution addresses the nation’s representative government as it is practiced”. Consider Gleeson CJ’s dissenting view: [t]he right of one person to ventilate personal grievances may collide with the right of others to a peaceful enjoyment of public space. Earlier, I gave an example of a mother who takes her children to play in a public park. Suppose that she and her children are exposed to threats, abuse and insults. Suppose, further, that the mother is an

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immigrant, that the basis of such threats, abuse and insults includes, either centrally or at the margin, an objection to the Federal Government’s immigration policy, and that the language used is an expression, albeit an ugly expression, of an opinion on that matter. Why should the family’s right to the quiet enjoyment of a public place necessarily be regarded as subordinate to the abusers’ right to free expression of what might generously be described as a political opinion?

What is the role of “civility” in public debate? Can it improve public deliberation? 4.

See further: E Arcioni, “Developments in Free Speech Law in Australia: Coleman and Mulholland” (2005) 33 Federal Law Review 333; L Griffiths, “The Implied Freedom of Political Communication: the State of the Law Post Coleman and Mulholland” (2005) 12 James Cook University Law Review 93; T Walsh, “The Impact of Coleman v Power on the Policing, Defence and Sentencing of Public Nuisance Cases in Queensland” (2006) 30 Melbourne University Law Review 191; N Aroney, “Justice McHugh, Representative Government and the Elimination of Balancing” (2006) 30 University of Queensland Law Journal 79; E Arcioni, “Politics, Police and Proportionality – An Opportunity to Explore the Lange Test: Coleman v Power” (2003) 25 Sydney Law Review 379.

Monis v The Queen [11.150] Monis v The Queen (2013) 249 CLR 92, 135-177, 213-216. [The appellant Monis sent letters to fathers, wives and other relatives of Australian soldiers killed while serving in Afghanistan. The letters criticised the involvement of Australian troops in that country and also contained derogatory statements. Monis was charged with a number of counts of using a postal service in an “offensive” way under s 471.12 of the Criminal Code (Cth). Droudis was charged with aiding and abetting Monis’ commission of those offences. Monis was also charged with using a postal service in a “harassing” way. Section 471.12’s validity was challenged. Section 471.12 of the Code provides: A person is guilty of an offence if: (a) the person uses a postal or similar service; and (b) the person does so in a way (whether by the method of use or the content of a communication, or both) that reasonable persons would regard as being, in all the circumstances, menacing, harassing or offensive. Penalty: Imprisonment for 2 years. The appeal to the High Court was concerned with a challenge to the validity of s 471.12 on the “offensive” aspect. French CJ, Hayne and Heydon JJ found that s 417.2 was invalid on the grounds that the law was aimed at preventing offense and that preventing offense is not a “legitimate aim” compatible with the constitutionally prescribed system of representative and responsible government. Crennan, Kiefel and Bell JJ, in dismissing the appeals, found that the impugned law aimed to prevent unwarranted intrusion of a seriously offensive kind. French CJ, Hayne and Heydon JJ allowed the appeals. Because the High Court was evenly divided, the appealed decision was affirmed by virtue of s 23 of the Judiciary Act 1903 (Cth).] Hayne J: 135 The issue and its resolution [84] The issue in these appeals can be stated briefly. The Parliament of the Commonwealth has no power to make a law inconsistent with that freedom of communication on matters of government and politics which is an indispensable incident of the constitutionally prescribed system of representative and responsible government. Is a law which makes it a crime to use a postal or similar service to make a communication about government or political matters in a way that reasonable persons would regard as being, in all the circumstances, offensive beyond legislative power? For the reasons that follow, that question must be answered: “Yes”. [11.150]

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Monis v The Queen cont. [85] History, not only recent history, teaches that abuse and invective are an inevitable part of political discourse. Abuse and invective are designed to drive a point home by inflicting the pain of humiliation and insult. And the greater the humiliation, the greater the insult, the more effective the attack may be. The giving of really serious offence is neither incidental nor accidental. The communication is designed and intended to cause the greatest possible offence to its target no matter whether that target is a person, a group, a government or an opposition, or a particular political policy or proposal and those who propound it. And any reasonable person would conclude that not only is that the purpose of what was said, its purpose has been achieved. [86] If examples are sought, and recent Australian political history is thought too controversial, consider O’Connell’s attack on Disraeli in 1835, with its references to the impenitent thief and what now are rightly seen as racial or religious slurs. Or look to Lloyd George’s speech in the House of Commons about Sir John Simon acting “as if [he] has been a total abstainer all his life and has suddenly taken to drink … and landed amidst the Tory drunkards” The examples can be multiplied. [87] Particular attacks may be admired, others condemned. But admiration or condemnation depends not upon whether offence is given but upon the content of the views that are advanced or attacked and the identity of those associated with those views. Great care must be taken in this matter lest condemnation of the particular views said to have been advanced by the appellants, or the manner of their expression, distort the debate by obscuring the centrality and importance of the freedom of political communication, including political communications that are intended to and do cause very great offence. If s 471.12 is valid, communications of that kind cannot be reduced to writing and sent by use of a postal or similar service. To do so would be a crime because reasonable persons would consider the communication to be, in all the circumstances, seriously offensive. Yet being seriously offensive was the plain political purpose of the communication. [88] The conclusion that s 471.12 does not validly make it a crime to use a postal or similar service to make a communication about government or political matters in a way that reasonable persons would regard as offensive is required by earlier decisions of this Court, in particular Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 and Coleman v Power (2004) 220 CLR 1. No party or intervener sought to reopen those decisions or to submit that they should not be followed and applied. Both the principles stated in those cases and the actual decisions reached in them require the conclusion that s 471.12 is too broad in its operation with respect to offensive use of a postal or similar service. That aspect of the section is directed generally to preventing serious offence, not to some other object or end the pursuit of which would be compatible with the maintenance of the constitutionally prescribed system of government and the freedom of political communication which is its indispensable incident. More particularly, s 471.12 makes it a crime to send by a postal or similar service an offensive communication about a 138 political matter even if what is said is true. It makes it a crime to send by a postal or similar service an offensive communication about a political matter that is not only offensive but defamatory, even when, applying Lange, the publisher would have a defence of qualified privilege to a claim for defamation. … [Hayne J considered and rejected a submission that some burdens on political communication which are not sufficient to support a conclusion that the law in question “effectively burdens” political communication. The submissions used different terms to describe such burdens: “de minimis”, “insubstantial”, “slight” and “unrealistic” [117]-[122]. He also rejected a submission that a law imposing such a little burden would easily meet the requirements of the stage of the Lange test that a law be reasonably appropriate and adapted to a legitimate end [124]. He then turned to consider the proper construction of s 471.12]. 157 “Offensive” in s 471.12 [157] Two preliminary observations should be made. First, the text of s 471.12 shows that an objective test must be applied in deciding whether the use alleged meets the description “offensive”. The section requires that the accused be shown to have used a postal or similar service “in a way … that reasonable persons would regard as being, in all the circumstances, … offensive” (emphasis added). Second, as the first respondent and some interveners correctly pointed out, the offence created by s 471.12 consists (Code, s 3.1(1)) of physical elements and fault elements. The fault element of 870

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Monis v The Queen cont. “intention” applies (Code, ss 4.1(1)(a), 4.1(2), 5.6(1)) to the physical element of “use” of a postal or similar service; the fault element of “recklessness” applies (Code, ss 4.1(1)(c), 5.6(2)) to the “circumstance” that the use would be regarded as “offensive”. The fault element of recklessness may also be satisfied (Code, s 5.4(4)) by proof of intention or knowledge. It follows that to establish commission of the offence the prosecution must prove two things. The first is that the accused intentionally used the relevant postal or similar service. The second is that, in so using that service, the accused intended or knew that the use was offensive or was aware of a substantial risk that the use was offensive and, having regard to all the circumstances known to the accused, it was unjustifiable to take that risk. [158] Accepting that the offence in s 471.12 depends upon an objective standard and that it has the elements identified, what content is to be given to the word “offensive”? [159] What is “offensive” for the purposes of s 471.12 must be identified by reference to the reaction that the conduct in question would evoke in the hypothesised reasonable person exposed to the conduct. No party or intervener submitted that what is “offensive” for the purposes of s 471.12 was to be identified in some other way and there appeared to be little if any dispute that the relevant kind of reaction could be described by any or all of the several words used ((2011) 215 A Crim R 64 at 77 [44]; 256 FLR 28 at 39 per Bathurst CJ; at 85 [83], 87-88 [91]; 48, 50 per Allsop P) by the Court of Criminal Appeal: anger, resentment, outrage, disgust or hatred. There was, however, a debate about how intense the reaction must be to constitute the offence. [160] At least a majority of the Court of Criminal Appeal proceeded ((2011) 215 A Crim R 64 at 77 [44]; 256 FLR 28 at 39 per Bathurst CJ; at 85 [83], 87-88 [91]; 48, 50 per Allsop P) on the basis that the preferable construction of the section required a 158 strong reaction from the hypothetical reasonable person to the conduct in question before that conduct would merit the description “offensive”. Bathurst CJ used ((2011) 215 A Crim R 64 at 77 [44]; 256 FLR 28 at 39) intensifying epithets to describe the reaction that the conduct in question was calculated or likely to arouse: “significant anger, significant resentment, outrage, disgust, or hatred” (emphasis added). Presumably, then, the reaction of the hypothetical reasonable person intended by these descriptions must be a reaction that is clearly experienced and deeply felt. [161] Contrary to the submissions of the appellants, s 471.12 does not make it a crime to use a postal or similar service in a way that would merely “hurt or wound the feelings of the recipient” of a postal article. Understood in that way, the section would deal with forms of offensive conduct properly described as trifling. The word “offensive” must be given a narrower meaning than that. It is used in conjunction with “menacing” and “harassing” and all three forms of use are treated, without distinction between them, as meriting the same punishment of up to two years’ imprisonment. The Court of Criminal Appeal was right to conclude that the provision is to be construed as requiring a strong reaction. [His Honour proceeded to consider the validity of the offensive aspect of s 471.12 according to the two stages of the Lange test]. 162 The object or end pursued by s 471.12 [178] … The object or end of s 471.12 must be framed in limited terms. Both legally and practically, the offensive limb of s 471.12 has only one object or end: to penalise, and thereby prevent, giving offence to recipients of, and those handling, articles put into a postal or similar service. Apart from the (perhaps rare) case where offensive images or words appear on the envelope or packet, the chief practical operation of the section is to prevent offence (in the sense described) to recipients of articles delivered by a postal or similar service. [179] That is not to say, however, that the submissions that were made about such matters as “integrity of the post” are irrelevant. Those submissions are to be understood as directed to whether the object or end of preventing offensive uses of a postal or similar service is an object or end that is compatible with the maintenance of the constitutionally prescribed system of government and the freedom of political communication which is its indispensable incident. But it is as well to explain why, contrary to the submissions of the respondents and interveners, the object or end to which s 471.12 is directed cannot be identified as any of the three candidates they urged: “integrity of the post”, [11.150]

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Monis v The Queen cont. “prevention of violence” and “welfare of the recipients of postal articles”. Attention can then turn to whether the narrow object or end of preventing offence to mail recipients and handlers is conducive to any or all of those candidates and whether, for that reason, s 471.12 serves a “legitimate” end. [180] First, the object or end to which the section is directed cannot be identified as protecting from harm the recipients of, or those who handle, postal articles. Because the section applies an objective test of what is “offensive”, the section does not require proof that any person has actually suffered the reactions of significant anger or the like that have been described. And as earlier explained, a person accused of contravention of s 471.12 need not be shown to have intended to cause offence. It is enough to show that the accused was reckless to the possibility that such a reaction would be evoked. [181] Nor can the object or end of the section be identified as protecting recipients of, or those who handle, postal articles from legally 163 cognisable harm. None of the reactions described – significant anger, significant resentment, outrage, disgust or hatred – constitutes a form of legally cognisable harm. Anger, resentment, outrage, disgust and hatred, however intense, are transient emotional responses which may, and more often than not will, leave no mark upon the individual who experiences them. More than that, the emotional responses described are universal human responses which are among the “ordinary and inevitable incidents of life” (Tame v New South Wales (2002) 211 CLR 317 at 382 [193] per Gummow and Kirby JJ, quoting Alcock v Chief Constable of South Yorkshire Police [1992] 1 AC 310 at 416). They can be provoked for any of a myriad of reasons, in well-nigh any circumstances. Experiencing responses of these kinds does not set the person concerned apart from any save the most sheltered or placid of human beings. [182] Second, it is not possible to say that the object or end of the section is the prevention of violent retaliation. The section says nothing of the sort and the likelihood of violence is neither a necessary nor a sufficient element of the offence. [183] Third, the object or end of s 471.12 cannot be identified more broadly as maintaining the “integrity of the post”. In this regard, the Commonwealth pointed to the second reading speech made in support of the Bill (Criminal Code Amendment (Anti-hoax and Other Measures) Bill 2002 (Cth)) for the insertion of s 471.12 and related sections into the Code. It was there (Australia, Senate, Parliamentary Debates (Hansard), 11 March 2002, p 441) said that: Protecting the safety, security and integrity of Australia’s information infrastructure, including postal and courier services, is a priority for this Government. The measures contained in this bill will ensure that these important communication services are not compromised by irresponsible, malicious or destructive behaviour. [184] In the light of these statements, it may readily be accepted that the political motives for inserting s 471.12 and other provisions into the Code included protecting the “integrity of the post”. But it does not follow that the expression is an apt description of the object or end to which s 471.12 is directed. Nothing in the statutory text supports such a broad view. In its operation with respect to offensive use of a postal or similar service, s 471.12 regulates the content of what may be communicated by post. It thus limits the kinds of communication that can be committed to a postal or similar service. It does not deal at all with, and is not directed to, the safety, efficiency or reliability of those services or any of them. To adopt and adapt what Dixon J said (Moore v The Commonwealth (1951) 82 CLR 547 at 568) 164 in a different context, what was said in the second reading speech may reveal the “external motive or purpose” for the amendments that were then made to the Code, but the “only ostensible purpose” evident from the statutory text is the prevention of offence to recipients of, and others handling, articles committed to a postal or similar service. Is that object or end “legitimate”? [185] To penalise, and thereby seek to prevent, the giving of offence to recipients of, and those handling, articles put into a postal or similar service regulates the civility of discourse, including political discourse, conducted by the use of those services. Unless some reason can be shown why that object or end is legitimate, this Court’s decision in Coleman v Power dictates the conclusion that the object or end of s 471.12 is not compatible with the constitutionally prescribed system of government and the freedom of political communication which is its indispensable incident. Queensland’s 872

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Monis v The Queen cont. submissions that Coleman v Power does not require this conclusion must be rejected. The submissions made about “integrity of the post”, “prevention of violence” and “welfare of the recipients of postal articles” were all directed to explaining why regulating the civility of this form of discourse by penalising offensive uses of a postal or similar service is a legitimate object or end. Each is considered in turn. Integrity of the post? [186] The expression “integrity of the post” has a large and satisfying ring to it. It sounds important and valuable. It is convenient to accept that, despite the very large changes that have occurred in the last years of the 20th century and the first 12 years of this, the existence of an efficient postal service remains important and valuable. But it by no means follows that preventing users sending material that will cause others offence, even really serious offence, bears upon whether the postal service continues to exist or continues to operate efficiently. … … [192] Concern for the “integrity of the post” must focus upon its safety and reliability as a means of carriage for postal articles. The nature or content of the articles a postal service carries has a connection with that concern only if a postal article (or its contents) might damage or destroy another article or delay its delivery. But apart from the case where something written on the outside of a postal article might cause a delay in delivery of that or other articles – as might be the case if a package was said to contain a dangerous substance – what is written in or on any postal article can have no effect on the reliability or safety of the postal system. [193] If some extended meaning were to be given to the “integrity of the post” which would direct attention to the content of the articles carried, the use of the expression “integrity of the post” would depend upon a premise that the post should be used for only some kinds of messages or communications. That is, the “integrity of the post” would be defined in a way that directs attention to the nature or content of what is communicated by post and requires that those communications meet some standard (whether described as a standard of decency, politeness, integrity or otherwise). If the “integrity of the post” is defined in this way, circular reasoning beckons. The end to which the legislation under consideration is directed is defined in a way which assumes without examination that the fixing of standards which the content of communications carried by post must meet is important to the effective operation of the postal service. There is no foundation for that proposition. It is bare assertion. [194] The first respondent and several interveners sought to link “integrity of the post” with regulation of the content of what is carried by reference to a notion of “confidence” in the post. It was said that the integrity of the post would be affected adversely if both the senders and the recipients of postal articles did not have “confidence” in the post. On the face of it, the argument appears to be no more than a restatement of the proposition that those who use the postal service should be able to be sure that articles committed to the service will be 167 delivered safely to their intended recipients. But as developed in oral argument it became apparent that “confidence” was being used in a sense which again depended upon bare assertion and again invited circular reasoning by defining the object or end to which the law is directed in a question-begging manner. [195] The assertion was that, if really offensive communications can be made by post, recipients would be “fearful” (presumably fearful of receiving a communication that would offend them). Some submissions went no further than that. If the assertion is right (and there is no basis for deciding that it is) it is an observation that leads to no relevant legal conclusion. Perhaps it is for that reason that the Commonwealth took a further step in its argument and asserted that there could and would be consequences for the postal service flowing from this postulated fear. The Commonwealth identified these consequences as persons being “discouraged from willing receipt of mail” with a consequent “adverse effect upon the willingness of senders … to use postal services as a means of communication”. No basis for this assertion was provided. It is not an assertion that is self-evidently likely to be true. On the contrary, the notion that a person who has received an offensive communication in the mail (even one that is really offensive) will thereafter not take any mail at all is inherently improbable. If that were [11.150]

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Monis v The Queen cont. ever to happen its occurrence would be very rare indeed and it would have not the slightest effect on the general operation of the postal service. The fears expressed by the Commonwealth should be dismissed as spectral. Prevention of violence? [196] The first respondent submitted that penalising, and so preventing, offensive uses of a postal or similar service was legitimate because doing so prevented violent responses and thus prevented breaches of the peace. The proposition appeared to be founded on some extrapolation from what was decided in Coleman v Power and was endorsed by Bathurst CJ in the Court of Criminal Appeal ((2011) 215 A Crim R 64 at 81 [64], 81-82 [67]; 256 FLR 28 at 43, 44). [197] The proposition should be rejected. It can be answered shortly. Section 471.12 is in no way directed to or concerned with preventing violence or keeping the peace. The prospects that were conjured up in argument of retaliation for offence done by use of a postal or similar service were no more than speculative imaginings of premeditated and vengeful lawlessness which should be dismissed from consideration. They have no foundation and no attempt was made to provide any, whether by evidence or argument. Having regard, however, to the emphasis given in argument to notions of violent reprisal, and to the 168 significance it was given in the Court of Criminal Appeal, something more should be said about Coleman v Power. It will be seen that the decision in that case provides no support for, indeed runs directly contrary to, the submission made by the first respondent. …. [199] There are important, if obvious, distinctions between the legislation at issue in Coleman v Power and s 471.12. First, s 471.12 has no connection with any conduct in a public place, no matter whose conduct is considered: the sender of the communication, the carrier of the relevant postal article, or the recipient of what is communicated. All of the facts and circumstances surrounding a contravention of s 471.12 can, and commonly will, occur in private. The user of the service frames his or her offensive communication in private, the user typically encloses it in an envelope in private, and the recipient opens the communication in private and experiences offence. Second, the meaning of the word “offensive” in s 471.12 focuses upon the reaction that the use of the postal or similar service would evoke in reasonable persons. As already explained, that reaction can be identified as “significant anger, significant resentment, outrage, disgust, or hatred”. The recipient may have no such reaction. There may be circumstances in which a recipient who experiences reactions described in those terms might contemplate resorting to violence. But they are surely the exception rather than the rule. [200] Even if it is right to take account of the exceptional case in which a person who experiences significant anger, significant resentment, outrage, disgust or hatred may be provoked to contemplation of violence, how would that surge of anger be translated into action? As Coleman v Power shows, questions about maintaining the peace require consideration of the circumstances in which the relevant conduct is experienced by the person to whom it is directed or who observes its occurrence. In particular, the critical point in Coleman v Power was that the conduct in question (the use of abusive or insulting words to a person) had three relevant characteristics: it took place in, or within the hearing of, a public place; it had to be intended or reasonably likely to provoke physical retaliation; and of necessity it occurred in circumstances where the exaction of revenge or retaliation for the insult could occur at once. [202] By contrast, neither an intention to provoke violence nor a likelihood of violent response forms any part of the offence created by s 471.12. Typically, if offence is felt, it will be experienced in private. And seldom if ever will the user of the postal or similar service whose conduct is offensive be close at hand when a person who is offended experiences the feelings described. Indeed, it may well be that the person who experiences those feelings does not know and cannot readily find the person who used the postal or similar service. 170 Protecting mail recipients? [203] As has already been explained, “offensive” in s 471.12 cannot be read as limited to uses of a postal or similar service that are “objectively calculated or likely … to cause real emotional or mental 874

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Monis v The Queen cont. harm, distress or anguish”: (2001) 215 A Crim R 64 at 87 [89]; 256 FLR 28 at 50 per Allsop P. Yet it was said that penalising, and so preventing, offensive uses of a postal or similar service was legitimate because it protected mail recipients from harm. That harm was described in several different ways. Victoria described offensive uses of a postal or similar service as “offensive intrusions” into the lives of the recipients. Queensland referred to “a person’s security of domain”. The Commonwealth also referred to “security of domain” but it further referred to the threat to a person’s “legitimate sense of safety”. These harms were said to be caused, or made worse, by the fact that mail is commonly addressed to a named recipient and that, adopting an expression drawn from a decision of the Supreme Court of the United States, mail recipients are a “captive” audience (Frisby v Schultz (1988) 487 US 474 at 487) for whatever is sent to them by post. [204] Each of these descriptions, shorn of their rhetorical flourishes, sought to combine the intensity of reaction required for conduct to be classed as “really” or “seriously” offensive with an appeal to notions of integrity of the person or private property. Notions of integrity of the person or of property accord with the ordinary legal usage of the word “protection”. It connotes protection from legally cognisable harm in the form of damage to person, pocket, property or reputation. And cases like Levy and Lange show that protection of bodily integrity and protection of reputation are objects or ends which are compatible with the constitutional system of government and the freedom of political communication. Each concerns a form of legally cognisable harm: injury to the person in one case and injury to reputation in the other. [205] Each of the forms of “harm” identified in the submissions falls short of any form of legally cognisable harm and the second respondent correctly conceded this to be so. No less importantly, s 471.12 directs no attention to any such form of harm. The allusions made in the submissions to notions of intrusion upon, or injury to, the integrity of a person or a person’s property find no foundation in the text of the section. Intrusion or injury of that kind, whether legally cognisable or not, is neither an element of the offence nor a necessary consequence of its commission. Rather, the section’s sole concern is the prevention of “serious” offence. It pursues no wider object or end. [206] It may be that the references to “security of domain” and “intrusions” were intended to appeal, inferentially, to notions of 171 privacy. But if that was their intention, the appeal is misplaced. Delivery of mail, whether at home or at work, or by leaving an article in a post office box, is no intrusion upon the privacy of the recipient. It is an unremarkable feature of everyday life tolerated, if not always welcomed, by all. What was described as an “offensive” intrusion was the disturbance to the equanimity of the recipient that might be caused by the offensive character of what was received. But that disturbance (which might occur anywhere) is in no sense any intrusion upon the recipient’s privacy. Section 471.12 is not directed to an object or end of preserving privacy. [207] Lying behind many of the submissions advanced in these appeals was a proposition that should be brought to the foreground. It was that s 471.12 carves out an area for its operation that lies between “mere” civility of discourse and the infliction of physical or psychiatric injury. The area in question was said to be occupied by the “really” or “seriously” offensive. Prevention of that kind of conduct was said to be compatible with the constitutionally prescribed system of representative and responsible government and with the implied freedom of political communication. [208] Consideration of this proposition must begin with the observation made by McHugh J in Coleman v Power that “[i]nsults are as much a part of communications concerning political and government matters as is irony, humour or acerbic criticism”: (2004) 220 CLR 1 at 45 [81]. Insult, irony and criticism may all give offence. Sometimes, insult, irony or criticism may give such serious offence that a reasonable person would be moved to “significant anger, significant resentment, outrage”, even “disgust, or hatred”. [209] Some forms of political communication are deliberately designed to offend. They may be designed and intended to offend because their content is shocking and the maker, having made reasonable inquiries to verify their content, wishes to disseminate the information widely. Yet if the statement communicated is such as reasonable persons, in all the circumstances, would regard as evoking the reaction described, s 471.12 would forbid its communication by post, on pain of up to [11.150]

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Monis v The Queen cont. two years’ imprisonment, regardless of whether it is true or false and regardless of whether its maker took all reasonable steps to verify the truth of what is communicated. [210] If a statement is defamatory it may very well move reasonable persons to significant anger, significant resentment, outrage, disgust or hatred. Indeed that may be the strength of reaction which the person making such a communication in relation to government or political 172 matters wants and intends to cause. And if the sender of the communication acted reasonably, Lange may provide the sender with a defence to an action for defamation. But s 471.12 would make the sender’s conduct a crime. [211] This point about defamatory statements requires further elaboration. What comparison can or should be made between s 471.12 and the law of defamation was much debated in this Court. The Commonwealth rightly pointed out that the legislation considered in Coleman v Power provided none of the defences available to a claim for defamation, yet the law was held valid. This being so, why does it matter, so the argument continued, if an offence against s 471.12 can be committed by using a postal or similar service to publish defamatory material even though the publisher would have a defence to a civil action for defamation? [212] The answer to this question is found by recognising that, absent physical or psychiatric injury, the extent of the individual’s interest in preventing or recovering for the consequences of a communication of this kind is measured and can only be vindicated by action for defamation. If s 471.12 were to be understood as directed to an object or end of preventing harm to or intrusion upon the individual, it does so in a way that is not coherent with the rights of the individual whose interest it is said that the section protects. And if the section is directed to vindicating some wider or societal interest, as the applicable legislation was in Coleman v Power, the object or end to which s 471.12 is directed cannot then be identified as preventing intrusion upon the safety or security of the individual’s domain. [213] To hold that a person publishing defamatory matter could be guilty of an offence under s 471.12 but have a defence to an action for defamation is not and cannot be right. The resulting incoherence in the law demonstrates either that the object or end pursued by s 471.12 is not legitimate, or that the section is not reasonably appropriate and adapted to serve a legitimate end in a manner compatible with the maintenance of the constitutionally prescribed system of government and the freedom of communication that is its indispensable incident. The incoherence is not removed, and its consequences cannot be avoided, by leaving a jury to decide whether reasonable persons would regard the use, in all the circumstances, as offensive. In the case postulated, the user of the service both knows that the communication is, and intends that the communication be, offensive. And there is no basis for the proposition (advanced by the second respondent and Queensland) that a jury would not find an accused guilty of an offence against s 471.12 in circumstances of the kind now under consideration because of the section’s reference to “reasonable persons … in all the circumstances”. Statements that are political in nature and reasonable 173 for a defendant to make can and often will still bite in the sense relevant to s 471.12. A statement can still be offensive even if it is true (cf Patrick v Cobain [1993] 1 VR 290 at 294). [214] The better view is that the object or end pursued by s 471.12 is not a legitimate object or end. Preventing use of a postal or similar service in a way that is offensive does no more than regulate the civility of discourse carried on by using such a service. Coleman v Power established that promoting civility of discourse is not a legitimate object or end. [215] If, contrary to the view that has just been expressed, it were to be decided that the object or end to which s 471.12 is directed is legitimate, the observation that has been made about the lack of intersection between the Lange defence to a claim for defamation and the operation of s 471.12 would demonstrate that the section is not reasonably appropriate and adapted to serve that object or end in a manner that is compatible with the constitutionally prescribed system of government and with the freedom of political communication which is its indispensable incident. The resulting incoherence in the law requires that conclusion. In Lange ((1997) 189 CLR 520 at 571, 575), this Court held that it was necessary to develop the common law of defamation in order to preserve the compatibility of that law with the implied freedom, and so the Constitution. To uphold the validity of the offensive aspect of 876

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Monis v The Queen cont. s 471.12 would cut across the development made in Lange by subjecting to criminal liability conduct that could not, for constitutional reasons, be subject to civil liability. If the object or end of the “offensive” limb of s 471.12 is legitimate, the answer to the second Lange question must be “No”. [216] It is necessary to say something more about the legitimacy of the object or end to which s 471.12 is directed. [217] The ground marked out as “really” or “seriously” offensive conduct is identified by the strength of reaction that, judged objectively, would be evoked by the conduct. But all forms of giving “offence” are identified by reference to the expected or actual reaction evoked by particular conduct. The only distinction between the “really” or “seriously” offensive and any other form of offensive conduct is the intensity of the reaction that is or would be evoked. Thus, the prohibition or regulation of the “really” or “seriously” offensive is the prohibition or regulation of some instances of a larger class. [218] Applying this observation to s 471.12, the section relevantly prohibits some, but not all, instances of a particular kind of interaction 174 (or discourse) between people (communication by use of a postal or similar service) where the class of instances prohibited is fixed by the intensity of the reaction evoked and not by notions of harm to a person or intended or likely violent reaction. The form of regulation adopted in s 471.12 does not seek to preclude all offensive conduct. It prohibits only a smaller class of that conduct. But it remains a form of regulation which seeks to exclude from one form of discourse between people (communication by use of a postal or similar service) a specified class of communications. [219] What is the significance of seeking to mark out this middle ground for the question whether s 471.12 serves a legitimate object or end? For the purposes of that inquiry, the prohibition or regulation of “really” or “seriously” offensive conduct is no more than the regulation of some but not all aspects of conduct the regulation of which would serve to promote the civility of discourse. That is, the form of regulation does not sit in any middle ground that can be seen as lying between the “mere” civility of discourse and infliction of injury. The supposed middle ground is no more than one part of a wider field. [220] It follows from Lange and Coleman v Power that s 471.12 is not directed to a legitimate object or end. The elimination of communications giving offence, even serious offence, without more is not a legitimate object or end. Political debate and discourse is not, and cannot be, free from passion. It is not, and cannot be, free from appeals to the emotions as well as to reason. It is not, and cannot be, free from insult and invective. Giving and taking offence are inevitable consequences of political debate and discourse. Neither the giving nor the consequent taking of offence can be eliminated without radically altering the way in which political debate and discourse is and must be continued if “the people” referred to in ss 7 and 24 of the Constitution are to play their proper part in the constitutionally prescribed system of government. [221] On its own, regulating the giving of offence is not a legitimate object or end. And for the reasons that have been given, s 471.12 pursues no other object or end. Beyond the matters already mentioned (“integrity of the post”, “prevention of violence” and “protection of mail recipients”) no party or intervener sought to demonstrate that there was any other advantage gained or sought to be gained by marking out this supposed middle ground of “really” or “seriously” offensive conduct and making it an offence to use a postal or similar service in that way. All that was said was that s 471.12 prevents conduct of this kind and that mail recipients were, therefore, less likely to be exposed to communications that are “really” or “seriously” offensive. But, as has already been explained, identifying the section’s legal and practical operation does not identify any legitimate object or end. 175 [222] The conclusion that eliminating the giving of offence, even serious offence, is not a legitimate object or end is supported by reference to the way in which the general law operates and has developed over time. The general law both operates and has developed recognising that human behaviour does not accommodate the regulation, let alone the prohibition, of conduct giving offence. Almost any human interaction carries with it the opportunity for and the risk of giving offence, sometimes serious offence, to another. Sometimes giving offence is deliberate. Often it is thoughtless. [11.150]

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Monis v The Queen cont. Sometimes it is wholly unintended. Any general attempt to preclude one person giving any offence to another would be doomed to fail and, by failing, bring the law into disrepute. Because giving and taking offence can happen in so many different ways and in so many different circumstances, it is not evident that any social advantage is gained by attempting to prevent the giving of offence by one person to another unless some other societal value, such as prevention of violence, is implicated. [223] The common law has never recognised any general right or interest not to be offended. The common law developed a much more refined web of doctrines and remedies to control the interactions between members of society than one based on any general proposition that one member of society should not give offence to another. Apart from, and in addition to, the development of the criminal law concerning offences against the person, the common law developed civil actions and remedies available when one member of society injured another’s person or property, including what was long regarded as the separate tort in Wilkinson v Downton ([1897] 2 QB 57) for deliberate infliction of “nervous shock”. (Whether or to what extent such a separate tort is still to be recognised need not be examined.) And the common law developed the law of defamation to compensate for injury to reputation worked by the publication of oral or written words. But the common law did not provide a cause of action for the person who was offended by the words or conduct of another that did not cause injury to person, property or reputation. … [Crennan, Kiefel and Bell JJ gave the word “offensive” s 417.12 a narrow construction meaning “likely to have a serious effect upon the emotional well-being of an addressee, on which causes apprehension, if not a fear, for that person’s safety” (at 203 [310]). However, their Honours held that the law was invalid under the second stage of the Lange test.] Crennan, Kiefel and Bell JJ: 213 [347] The second limb of Lange looks, in the first place, to whether the law is proportionate to the end it seeks to serve. In Lange, it will be recalled, once the common law of defamation was adapted it was regarded as going no further than was necessary having regard to the legitimate purpose of protection of reputation: Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 572-573, 575. Where there are other, less drastic, means of achieving a legitimate object, the relationship with the legislative purpose may not be said to be proportionate (Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 568, where the Court referred to the example of Australian Capital Television Pty Ltd v The Commonwealth (1992) 177 CLR 106), at least where those means are equally practicable and available (North Eastern Dairy Co Ltd v Dairy Industry Authority (NSW) (1975) 134 CLR 559 at 616; Uebergang v Australian Wheat Board (1980) 145 CLR 266 at 306; Rowe v Electoral Commissioner (2010) 243 CLR 1 at 134 [438]). Given the proper role of the courts in assessing legislation for validity, such a conclusion would only be reached where the alternative means were obvious and compelling, as was the Tasmanian legislation in Betfair Pty Ltd v Western Australia ((2008) 234 CLR 418 at 479 [110]; see also North Eastern Dairy Co Ltd v Dairy Industry Authority (NSW) (1975) 134 CLR 559 at 608). In such circumstances the means could not be said to be reasonably necessary to achieve the end and are therefore not proportionate: North Eastern Dairy Co Ltd v Dairy Industry Authority (NSW) (1975) 134 CLR 559 at 616; Betfair Pty Ltd v Western Australia (2008) 234 CLR 418 at 477 [102]. [348] The protective purpose of s 471.12 is directed to the misuse of postal services to effect an intrusion of seriously offensive material into a person’s home or workplace. It is not possible to further read down the degree of offensiveness of a communication which is to be the subject of the offence and retain a field of operation for the section consistent 215 with its purpose. It follows that the section, so construed, goes no further than is reasonably necessary to achieve its protective purpose. [349] A purpose of protecting citizens from such intrusion is not incompatible with the maintenance of the constitutionally prescribed system of government or the implied freedom which supports it. Section 471.12 is not directed to the freedom. By way of analogy, it will be recalled that in Lange the protection of reputation was not considered to be incompatible. [350] That leaves the question of whether the section imposes too great a burden upon the implied freedom by the means it employs. This assessment reflects an acceptance that some burden may be 878

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Monis v The Queen cont. lawful. In Coleman v Power, McHugh J said that a law could validly impose some burden but nevertheless leave political communication “free”. It would be free if the burden was not unreasonable: Coleman v Power (2004) 220 CLR 1 at 53 [100]. A test of proportionality is again invoked. [351] The appellant Monis submits that s 471.12 constitutes a “very substantial fetter” on discussion of political matters absent provision for defences of the kind that are available to a defendant in an action for defamation, such as the statutory defence of qualified privilege (Defamation Act 2005 (NSW), s 30), which applies a test of reasonableness to the defendant’s conduct. An allied submission refers to what had been said in Lange in that regard. These submissions draw in part on McHugh J’s criticism of the provision considered in Coleman v Power, which provided no defence to the charge of using insulting words in, or within the hearing of, a public place: Coleman v Power (2004) 220 CLR 1 at 33 [36], 41-42 [69]-[71]. However, that provision was very different from s 471.12. Having regard to the elements of the offence in s 471.12, considerable ingenuity would be required to conceive the field of operation of a defence that the accused’s use of the postal service was a reasonable communication for the discussion of political matters. The appellant Monis’ submissions overlook the circumstance that before any consideration of a defence could arise, the jury must have determined both that the postal service was used in a way that a reasonable person, taking into account all the circumstances, would regard as offensive, and that the accused was aware of the substantial risk that the use would be so regarded by a reasonable person and unjustifiably took that risk. And as to common law defences to defamation, such as qualified privilege, where the issue of malice may arise, the requirement of proof for an offence under s 471.12, that the defendant’s conduct be intentional or reckless, may leave little room for their operation. 216 [352] It has earlier been observed that the effect of s 471.12 upon political communication is incidental. Further, communications of the kind which are prohibited by s 471.12 are limited to those which are of a seriously offensive nature. This does not suggest an effect upon the freedom which could be regarded as extensive. It does not prevent communications of a political nature which do not convey such offensive matter. The observations of Brennan J in Nationwide News are apposite: Nationwide News Pty Ltd v Wills (1992) 177 CLR 1 at 50-51. His Honour said with respect to the implied freedom that the Constitution may be taken to prohibit legislative or executive infringement of the freedom to discuss political matters, except to the extent necessary to protect other legitimate interests. It prohibits a restriction which substantially impairs the opportunity for the Australian people to form the necessary political judgments. [353] Section 471.12 does not impermissibly burden the implied freedom. The Lange test is satisfied. Section 471.12 is valid. Conclusion and orders [354] The appeals should be dismissed. There should be no order for costs. None was made by the Court of Criminal Appeal, no doubt because of the nature of the matter.

[11.160]

1.

Notes&Questions

Like Hayne J, French CJ and Heydon J also held that s 417.12 was invalid for infringing the freedom of political communication. Like Hayne J, French CJ concluded that s 417.12 burdened the freedom of political communication but was not directed to a legitimate end. Heydon J also questioned the correctness of the decision in Lange v Australian Broadcasting Corporation to recognise a freedom of political communication. However he concluded [251]: Close examination of the implied freedom of political communication … may reveal that it is a noble and idealistic enterprise which has failed, is failing, and will go on failing. That close examination cannot usefully take place until some litigant whose [11.160]

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interests are damaged by the implied freedom argues in this Court, with leave if necessary, that the relevant authorities should be overruled. No endeavour of that kind was made in these appeals. Hence these appeals offered no occasion for close examination of the relevant questions. On the existing law, there is no alternative but to make the orders proposed by Hayne J – a result which, some may think, demonstrates how flawed that law is.

2.

A striking difference between the three judges who found the law invalid (French CJ, Hayne and Heydon JJ) and the three judges who found the law valid (Crennan, Kiefel and Bell JJ) lies in the construction of s 417.12. French CJ, Hayne and Heydon JJ held that s 417.12 was aimed at preventing offense and that preventing offense is not a “legitimate aim compatible with the constitutionally prescribed system of representative and responsible government” whereas Crennan, Kiefel and Bell JJ held that it was aimed at preventing the intrusion of very offensive material into the home and the workplace, a permissible object under the Lange test. See the discussion in James Stellios, Zines’ High Court and the Constitution, 6 th ed (Federation Press, 2015) pp 571-572.

The Implied Freedom of Political Communication and Proportionality Analysis [11.170] In Lange, it will be recalled the High Court established a two stage test for

determining whether a law infringes the implied freedom of political communication (at 567): The test for determining whether a law infringes the constitutional implication When a law of a State or federal Parliament or a Territory legislature is alleged to infringe the requirement of freedom of communication imposed by ss 7, 24, 64 or 128 of the Constitution, two questions must be answered before the validity of the law can be determined. First, does the law effectively burden freedom of communication about government or political matters either in its terms, operation or effect (cf Cunliffe (1994) 182 CLR 272 at 337)? Second, if the law effectively burdens that freedom, is the law reasonably appropriate and adapted to serve a legitimate end the fulfilment of which is compatible with the maintenance of the constitutionally prescribed system of representative and responsible government and the procedure prescribed by s 128 for submitting a proposed amendment of the Constitution to the informed decision of the people (Cunliffe (1994) 182 CLR 272 at 300, 324, 339, 387–388) … If the first question is 568 answered “yes” and the second is answered “no”, the law is invalid.

The second question reflects the fact that the Constitution’s protection of political communication is not absolute: see APLA Ltd v Legal Services Commissioner (NSW) (2005) 224 CLR 322, at 350 [27] (Gleeson CJ and Heydon J); Mullholland v Australian Electoral Commission (2004) 220 CLR 181, at 224-245 [179] (Gummow and Hayne JJ); Monis v The Queen (2013) 249 CLR 92, at 141 [103] (Hayne J). It is therefore necessary to determine which laws burdening political communication are permissible and which are not. Under many Constitutions, judges use “proportionality analysis” to determine these limits. Proportionality analysis has its origins in German law but its influence in the common law word is derived from its adoption by the Supreme Court of Canada in R v Oakes [1986] 1 SCR 103 to determine the meaning of Section 1 of the Canadian Charter of Rights and Freedoms. That section provides that: The Canadian Charter of Rights and Freedoms guarantees the rights and freedoms set out in it subject only to such reasonable limits prescribed by law as can be demonstrably justified in a free and democratic society.

In R v Oakes the Supreme Court of Canada held (at 62) that the requirement that the law be “demonstrably justified in a free and democratic society” requires the application of a three-stage “proportionality test”: 880

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First, the measures adopted must be carefully designed to achieve the objective in question. They must not be arbitrary, unfair or based on irrational considerations. In short, they must be rationally connected to the objective. Second, the means, even if rationally connected to the objective in this first sense, should impair “as little as possible” the right or freedom in question. Third, there must be a proportionality between the effects of the measures which are responsible for limiting the Charter right or freedom, and the objective which has been identified as of “sufficient importance” (footnotes omitted).

Proportionality analysis is widely used in the common law world. In the UK it is employed pursuant to the Human Rights Act 1998 (UK) (see Bank Mellat [2013] UKSC 39); in South Africa pursuant to the general limitation clause in s 36 of the Constitution (see S v Makwanyane 1995 (3) SA 391 (CC) para 104; S v Bhulwana 1996 (1) SA 388 (CC)); and, in New Zealand (see Hansen v R [2007] 3 NZLR 1). Consequently, questions have long persisted as to its place in Australian constitutional law in general and its place in freedom of political communication analysis in particular. For some time, the matter seemed to be settled by the High Court decision in Lange in which it was unanimously stated (at 568, footnote 272) that “in this context, there is little difference between the test of ‘reasonably appropriate and adapted’ and the test of proportionality.” Thus “proportionality” was equated with the “reasonably appropriate and adapted test”. In McCloy v New South Wales, however, the High Court adopted a form of proportionality test that explicitly mirrors the three-stage process seen in other jurisdictions.

McCloy v New South Wales [11.180] McCloy v New South Wales (2015) 89 ALJR 857, at 862-878, 885-888. [The case involved a challenge to two aspects of the Election Funding, Expenditure and Disclosures Act 1981 (NSW) (EFED Act) which governed New South Wales state elections. (Other aspects of the Act were challenged in Unions of New South Wales v New South Wales (2013) 252 CLR 530, discussed at [11.300]). Division 2A of Part 6 of the EFED Act placed a cap of $5,000 on the amount that could be donated by a person to or for the benefit of a registered party or a group of candidates and a cap of $2,000 on the amount that could be donated to or for the benefit of an “elected member” or “candidate” or “third party campaigner” (other persons or entities campaigning in a NSW election but which are not candidates and do not directly endorse a candidate or party). Division 4A of Part 6 prohibited the making or acceptance of political donations by a “prohibited donor” as well as soliciting of donations by or on behalf of a “prohibited donor”, which was defined to include “property developer”. Section 96E prohibited the making or acceptance of “indirect campaign contributions” (certain non-monetary contributions such as provision of office accommodation, vehicles, computers, and other equipment for campaign purposes). The High Court had previously held in Unions of New South Wales Wales v New South Wales (2013) 252 CLR 530 (discussed at [11.300]) that the donation caps imposed by Div 2A of Pt 6 and the prohibition on indirect donations imposed by s 96E were valid. By majority (Nettle J dissenting) it held that the prohibition on donations from property developers imposed by Div 4A of Pt 6 was also valid. The case is notable for the adoption, by French CJ, Kiefel, Bell and Keane JJ of a proportionality test to supplement the second stage of the Lange test.]

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McCloy v New South Wales cont. French CJ, Kiefel, Bell and Keane JJ: 862 [2] As explained in the reasons that follow, the question whether an impugned law infringes the freedom requires application of the following propositions derived from previous decisions of this Court and particularly Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 and Coleman v Power (2004) 220 CLR 1: A. The freedom under the Australian Constitution is a qualified limitation on legislative power implied in order to ensure that the people of the Commonwealth may “exercise a free and informed choice as electors”: Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 560. It is not an absolute freedom. It may be subject to legislative restrictions serving a legitimate purpose compatible with the system of representative government for which the Constitution provides, where the extent of the burden can be justified as suitable, necessary and adequate, having regard to the purpose of those restrictions. B. The question whether a law exceeds the implied limitation depends upon the answers to the following questions, reflecting those propounded in Lange as modified in Coleman v Power: 1. Does the law effectively burden the freedom in its terms, operation or effect? If “no”, then the law does not exceed the implied limitation and the enquiry as to validity ends. 2. If “yes” to question 1, are the purpose of the law and the means adopted to achieve that purpose legitimate, in the sense that they are compatible with the maintenance of the constitutionally prescribed system of representative government (Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 561-562, 567)? This question reflects what is referred to in these reasons as “compatibility testing”. The answer to that question will be in the affirmative if the purpose of the law and the means adopted are identified and are compatible with the constitutionally prescribed system in the sense that they do not adversely impinge upon the functioning of the system of representative government. If the answer to question 2 is “no”, then the law exceeds the implied limitation and the enquiry as to validity ends. 3. If “yes” to question 2, is the law reasonably appropriate and adapted to advance that legitimate 863 object (Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 562)? This question involves what is referred to in these reasons as “proportionality testing” to determine whether the restriction which the provision imposes on the freedom is justified. The proportionality test involves consideration of the extent of the burden effected by the impugned provision on the freedom. There are three stages to the test – these are the enquiries as to whether the law is justified as suitable, necessary and adequate in its balance in the following senses: “suitable” as having a rational connection to the purpose of the provision (Unions NSW v New South Wales (2013) 252 CLR 530 at 558 559 [55]-[56]); “necessary” in the sense that there is no obvious and compelling alternative, reasonably practicable means of achieving the same purpose which has a less restrictive effect on the freedom; “adequate in its balance” a criterion requiring a value judgment, consistently with the limits of the judicial function, describing the balance between the importance of the purpose served by the restrictive measure and the extent of the restriction it imposes on the freedom. 882

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McCloy v New South Wales cont. If the measure does not meet these criteria of proportionality testing, then the answer to question 3 will be “no” and the measure will exceed the implied limitation on legislative power. [3] As noted, the last of the three questions involves a proportionality analysis. The term “proportionality” in Australian law describes a class of criteria which have been developed by this Court over many years to determine whether legislative or administrative acts are within the constitutional or legislative grant of power under which they purport to be done. Some such criteria have been applied to purposive powers; to constitutional legislative powers authorising the making of laws to serve a specified purpose; to incidental powers, which must serve the purposes of the substantive powers to which they are incidental; and to powers exercised for a purpose authorised by the Constitution or a statute, which may limit or restrict the enjoyment of a constitutional guarantee, immunity or freedom, including the implied freedom of political communication. Analogous criteria have been developed in other jurisdictions, particularly in Europe, and are referred to in these reasons as a source of analytical tools which, according to the nature of the case, may be applied in the Australian context. [4] Acceptance of the utility of such criteria as tools to assist in the determination of the limits of legislative powers which burden the freedom does not involve a general acceptance of the applicability to the Australian constitutional context of similar criteria as applied in the courts of other jurisdictions. It does not involve acceptance of the application of proportionality analysis by other courts as methodologically correct. The utility of the criteria is in answering the questions defining the limits of legislative power relevant to the freedom which are derived from Lange. … Compatibility of the legitimate purpose and means with the Constitution? 867 [31] Accepting that Div 2A and Div 4A burden the freedom, in the way explained in Unions NSW, the process of justification for which Lange provides commences with the identification of the statutory purpose or purposes. The other questions posed by Lange are not reached unless the purpose of the provisions in question is legitimate. A legitimate purpose is one which is compatible with the system of representative government provided for by the Constitution (Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 561-562, 567); which is to say that the purpose does not impede the functioning of that system and all that it entails. So too must the means chosen to achieve the statutory object be compatible with that system: Coleman v Power (2004) 220 CLR 1 at 50-51 [92]-[96], 78 [196], 82 [211]. Div 2A and s 96E [32] The plaintiffs’ argument in support of their submission that the effect of Pt 6 of the EFED Act 868 shows that its true legislative purpose is other than that described in s 4A of the EFED Act does not identify any matter which detracts from the view expressed in Unions NSW ((2013) 252 CLR 530 at 545 546 [8]). It may be accepted that the words “corruption” and “undue influence” did not appear in the legislation until after that decision but, in relevant aspects, s 4A simply reflects the opinion stated in Unions NSW as to the general purpose of the EFED Act. The fact that the words are not repeated in Div 2A or other parts of the EFED Act does not detract from that purpose. [33] The provisions of Div 2A are most clearly directed to the object stated in s 4A(c), the prevention of “corruption and undue influence in the government of the State”. The capping provisions of Div 2A are intended to reduce the risk of corruption by preventing payments of large sums of money by way of political donation. It may be accepted, as the plaintiffs submit, that the EFED Act targets money which may be used for political communication, but this is not inconsistent with a purpose to prevent corruption. [34] The provisions of Div 2A, and those of the EFED Act more generally, may additionally have an ancillary purpose. They are also directed to overcoming perceptions of corruption and undue influence, which may undermine public confidence in government and in the electoral system itself. In a report of the Parliament of New South Wales Joint Standing Committee on Electoral Matters, which made recommendations as to capping (New South Wales, Parliament, Joint Standing Committee on [11.180]

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McCloy v New South Wales cont. Electoral Matters, Public Funding of Election Campaigns, Report No 2/54, (2010) at 3-5), the Committee noted the submission that the purchase of access to politicians through large donations, which is not available to ordinary citizens, can result in “actual or the perception of undue influence” (New South Wales, Parliament, Joint Standing Committee on Electoral Matters, Public Funding of Election Campaigns, Report No 2/54, (2010) at 90 [5.34], summarising the submission of the Public Interest Advocacy Centre) and said that “the need for reform to restore public confidence in the integrity of the system was recognised by most of the political parties that are currently represented in the New South Wales Parliament” (New South Wales, Parliament, Joint Standing Committee on Electoral Matters, Public Funding of Election Campaigns, Report No 2/54, (2010) at 90 [5.33]). [35] The plaintiffs submit that gaining access through political donations to exert persuasion is not undue influence. This mirrors what was said by Kennedy J, writing the opinion of the Court in Citizens United v Federal Election Commission 558 US 310 at 360 (2010), that “[i]ngratiation and access … are not corruption.” In practice, however, the line between them and corruption may not be so bright. [36] There are different kinds of corruption. A candidate for office may be tempted to bargain with a wealthy donor to exercise his or her power in office for the benefit of the donor in return for financial assistance with the election campaign. This kind of corruption has been described as “quid pro quo” corruption: Citizens United v Federal Election Commission 558 US 310 at 360 (2010). Another, more subtle, kind of corruption concerns “the danger that officeholders will decide issues not on the merits or the desires of their constituencies, but according to the wishes of those who have made large financial contributions valued by the officeholder”: McConnell v Federal Election Commission 540 US 93 at 153 (2003). This kind of corruption is described as “clientelism”. It arises from an office-holder’s dependence on the financial support of a wealthy patron to a degree that is apt to compromise the expectation, fundamental to representative democracy, that public power will be exercised in the public interest. The particular concern is that reliance by political candidates on private patronage may, over time, become so necessary as to sap the vitality, as well as the integrity, of the political branches of government. [37] It has been said of the nature of the risk of clientelism that “unlike straight cash-for-votes transactions, such corruption is neither easily detected nor practical to criminalize. The best means of prevention is to identify and to remove the temptation”: McConnell v Federal Election Commission 540 US 93 at 153 (2003). [38] Quid pro quo and clientelistic corruption threaten the quality and integrity of governmental decision-making, but the power of money may also pose a threat to the electoral process itself. This phenomenon has been referred to as “war-chest” 869 corruption: Federal Election Commission v Beaumont 539 US 146 at 154-155 (2003). This form of corruption has been identified, albeit using different terminology, as a matter of concern both in Australia (discussed in Australian Capital Television Pty Ltd v The Commonwealth (1992) 177 CLR 106 at 144-145, 154-155, 188-189) and in other liberal democracies of the common law tradition. [39] In R (Animal Defenders International) v Secretary of State for Culture, Media and Sport [2008] AC 1312, Lord Bingham of Cornhill (at 1346 [28]) said that in a democracy it is highly desirable that the playing field of public debate be so far as practicable level and that: This is achieved where, in public discussion, differing views are expressed, contradicted, answered and debated. … It is not achieved if political parties can, in proportion to their resources, buy unlimited opportunities to advertise in the most effective media, so that elections become little more than an auction. [40] The plaintiffs’ submission, that the relevant provisions of the EFED Act have as their true purpose the removal of the ability of persons to make large donations in the pursuit of political influence, would appear to confuse the effect of Div 2A, and other measures employed, with the overall purpose of these provisions. In so far as the submission also seeks to make the legitimacy of legislative purpose contingent upon consistency with a personal right to make political donations as an exercise of free speech, it appears once again to draw on First Amendment jurisprudence. 884

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McCloy v New South Wales cont. [41] In Austin v Michigan Chamber of Commerce 494 US 652 the prospect that the power of money concentrated in corporate hands could distort the electoral process, by dominating the flow of political communication, was identified by the Supreme Court of the United States (at 660 (1990)) as a threat to the democratic political process sufficient to justify restrictions on political campaign contributions. However, this First Amendment jurisprudence has not been maintained. More recently, it has been held that the United States Congress may impose restrictions on campaign contributions only to target quid pro quo corruption and the appearance of such corruption: McCutcheon v Federal Election Commission 188 L Ed 2d 468 at 494-495 (2014). The decision in Austin is now regarded as inconsistent with the primacy awarded by the First Amendment to an individual’s right to free speech and has been overruled: Citizens United v Federal Election Commission 558 US 310 at 365, 469 (2010). The view that now prevails is that an attempt by the legislature to level the playing field to ensure that all voices may be heard is, prima facie, illegitimate. [42] That is not the case with respect to the Australian Constitution. As this Court said in Lange (1997) 189 CLR 520 at 560, ss 7, 24, 64 and 128 of the Constitution, and related provisions, necessarily imply a limitation on legislative and executive power in order to ensure that the people of the Commonwealth may “exercise a free and informed choice as electors.” Sections 7 and 24 contemplate legislative action to implement the enfranchisement of electors, to establish an electoral system for the ascertainment of the electors’ choice of representatives (Attorney-General (Cth); Ex rel McKinlay v The Commonwealth (1975) 135 CLR 1 at 56; McGinty v Western Australia (1996) 186 CLR 140 at 182) and to regulate the conduct of elections “to secure freedom of choice to the electors” (Smith v Oldham (1912) 15 CLR 355 at 358). Legislative regulation of the electoral process directed to the protection of the integrity of the process is, therefore, prima facie, legitimate. [43] In ACTV it was accepted that the fact that a legislative measure is directed to ensuring that one voice does not drown out others does not mean that measure is illegitimate for that reason alone: Australian Capital Television Pty Ltd v The Commonwealth (1992) 177 CLR 106 at 144-145, 159, 175, 188-191, 239. The legitimacy of the concerns that the electoral process be protected from the corrupting influence of money and to place “all in the community on an equal footing so far as the use of the public airwaves is concerned” was accepted: Australian Capital Television Pty Ltd v The Commonwealth (1992) 177 CLR 106 at 130, see also at 161, 175, 189, 239. The legislation struck down in that case did not give equality of access to television and radio to all candidates and parties. The constitutional vice identified by Mason CJ was that 870 the regulatory regime severely restricted freedom of speech by favouring the established political parties and their candidates. It also excluded from the electoral process action groups who wished to present their views to the community without putting forward candidates: Australian Capital Television Pty Ltd v The Commonwealth (1992) 177 CLR 106 at 132, 145-146; see also at 171-173 per Deane and Toohey JJ, 220-221 per Gaudron J, 236 237, 239 per McHugh J. [44] In Harper v Canada (Attorney General) [2004] 1 SCR 827 the Supreme Court of Canada upheld legislative restrictions on electoral advertising. Bastarache J, delivering the opinion of the majority of the Court, explained (at 868 [62]) that the restrictions were legitimately imposed in accordance with “the egalitarian model of elections adopted by Parliament as an essential component of our democratic society.” His Honour continued that the premise for the model is equal opportunity for participation, and wealth is the major obstacle to equal participation. His Honour said that the state can equalise participation in the electoral process in two ways: First, the State can provide a voice to those who might otherwise not be heard. … Second, the State can restrict the voices which dominate the political discourse so that others may be heard as well. Speaking of the provisions in question as seeking to create a “level playing field for those who wish to engage in the electoral discourse”, his Honour observed that, in turn, this “enables voters to be better informed; no one voice is overwhelmed by another.” [45] Equality of opportunity to participate in the exercise of political sovereignty is an aspect of the representative democracy guaranteed by our Constitution: Nationwide News Pty Ltd v Wills (1992) 177 CLR 1 at 72; Australian Capital Television Pty Ltd v The Commonwealth (1992) 177 CLR 106 at 136; [11.180]

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McCloy v New South Wales cont. Unions NSW v New South Wales (2013) 252 CLR 530 at 578 [135]-[136]; Tajjour v New South Wales (2014) 88 ALJR 860; 313 ALR 221 at 901 [197] (ALJR), 271 (ALR). In ACTV, the law which was struck down was inimical to equal participation by all the people in the political process and this was fatal to its validity. The risk to equal participation posed by the uncontrolled use of wealth may warrant legislative action to ensure, or even enhance, the practical enjoyment of popular sovereignty: see Coleman v Power (2004) 220 CLR 1 at 52 [97]. [46] The risks that large political donations have for a system of representative government have been acknowledged since Federation. Part XIV of the Commonwealth Electoral Act 1902 (Cth) contained certain limits on expenditure in electoral campaigns and would appear to have been based upon the Corrupt and Illegal Practices Prevention Act 1883 (UK) (46 & 47 Vict c 51). Speaking of that latter Act, J Renwick Seager (the Corrupt Practices Act 1883, with Introduction and Full Index, (1883)) said (at 3): if its provisions are honestly carried out, the length of a man’s purse will not, as now, be such an important factor; and the way will be opened for many men of talent, with small means, to take part in the government of the country. Capping of political donations is a measure which has been adopted by many countries with systems of representative government: Transparency International, Money, Politics, Power: Corruption Risks in Europe (2012) p 54 identifies 13 European countries which have done so. It is a means that does not impede the system of representative government for which our Constitution provides. [47] The purpose of Div 2A and the means employed to achieve that purpose are not only compatible with the system of representative government; they preserve and enhance it. Div 4A [48] The plaintiffs submit that the prohibitions in Div 4A cannot be based upon any rational perceived risk that property developers are more likely to make corrupt payments than others. Whilst they accept that the commercial interests of property developers are affected by the exercise of public power, they argue that the same may be said of any number of persons in the community. There is nothing special about property developers. [49] New South Wales submits that the degree of dependence of property developers on decisions of government about matters such as the zoning of land and development approvals distinguishes them from actors in other sectors of the economy. Property developers are sufficiently distinct to warrant specific regulation in light of the nature of their business 871 activities and the nature of the public powers which they might seek to influence in their self-interest, as history in New South Wales shows. [50] These submissions of New South Wales should be accepted. Recent history in New South Wales tells against the plaintiffs’ submission. The plaintiffs may be correct to say that there is no other legislation in Australia or overseas which contains a prohibition of the kind found in Div 4A, but a problem has been identified in New South Wales and Div 4A is one means to address it. [51] The Independent Commission Against Corruption (“ICAC”) and other bodies have published eight adverse reports since 1990 concerning land development applications. Given the difficulties associated with uncovering and prosecuting corruption of this kind, the production of eight adverse reports in this time brings to light the reality of the risk of corruption and the loss of public confidence which accompanies the exposure of acts of corruption. In ICAC’s Report on Investigation into North Coast Land Development ((1990) at 652-653), the report author, Mr Roden QC, said that: A lot of money can depend on the success or failure of a lobbyist’s representations to Government. Grant or refusal of a rezoning application, acceptance or rejection of a tender, even delay in processing an application that must eventually succeed, can make or break a developer. And decisions on the really mammoth projects can create fortunes for those who succeed. The temptation to offer inducements must be considerable. [52] True it is that the eight reports relate to applications processed at a local level and that local councils consider most development applications. However, decisions as to land development are also made by relevant State departments, and Ministers are often consulted in the approval process. Pursuant to the EPA Act (Environmental Planning and Assessment Act 1979, ss 89D – 89E)), the Minister 886

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McCloy v New South Wales cont. determines applications for State significant development. It is the Minister who is responsible for making local environmental plans (Environmental Planning and Assessment Act 1979, Pt 3, Div 4), which contain zoning and development controls (Environmental Planning and Assessment Act 1979, s 26). State environmental planning policies are made by the Governor on the recommendation of the Minister and they may make provision for any matter that, in the Minister’s opinion, is of State or regional environmental planning significance: Environmental Planning and Assessment Act 1979, s 37. [53] The purpose of Div 4A is to reduce the risk of undue or corrupt influence in an area relating to planning decisions, where such risk may be greater than in other areas of official decision-making. This purpose furthers the general purpose of Pt 6 of the EFED Act and is “legitimate” within the meaning given to that term in Lange, as are the means adopted to achieve it. No rational connection to purpose? [54] The plaintiffs submit that Div 2A and Div 4A have no rational connection to the purpose of targeting corruption. In the language of proportionality analysis, discussed later in these reasons, that is a submission that the impugned provisions are not “suitable”. By analogy with the reasons of the joint judgment in Unions NSW, the plaintiffs submit that it is not explained why Div 4A targets only corporations and their close associates who are property developers and not individuals or firms. Other deficiencies are pointed to in Div 2A such as a failure to distinguish between corrupt political donations and those made without a corrupting purpose, and a failure to capture personal gifts. [55] These factors bear no similarity to the problem associated with the provisions at issue in Unions NSW. In that case, s 96D(1) prohibited the acceptance of a political donation unless it was from a person enrolled as an elector. Section 95G(6) effectively aggregated the amount spent by way of electoral communication expenditure by a political party and its affiliated organisations for the purposes of the capping provisions in Div 2A. Unlike other provisions in Pt 6, it was not possible to discern how these provisions could further the general anti-corruption purpose of the EFED Act. [56] The provisions of Div 2A and Div 4A do not suffer from such a problem. New South Wales submits that it may be expected that most commercial land developments will be undertaken by corporations, but it does not matter whether that was the reason for excluding other entities and persons from the operation of Div 4A. If there is a deficiency 872 of the kind contended for by the plaintiffs, it is not one which severs the connection to the anti-corruption purpose of the EFED Act. The same may be said of the other alleged deficiencies in Div 2A. An equally practicable alternative? – necessity [57] In Lange (1997) 189 CLR 520 it was observed (at 568) that the law in question in ACTV was held to be invalid because there were other, less drastic, means by which the objects of the law could have been achieved. In Unions NSW (2013) 252 CLR 530 it was said (at 556 [44]) that the Lange test may involve consideration of whether there are alternative, reasonably practicable means of achieving the same purpose which have a less restrictive effect on the freedom. If there are other equally appropriate means, it cannot be said that the selection of the one which is more restrictive of the freedom is necessary to achieve the legislative purpose. This method of testing mirrors, to an extent, that which has been applied with respect to legislation which restricts the freedom guaranteed by s 92 of the Constitution. [58] In Monis v The Queen (2013) 249 CLR 92 it was said (at 214 [347])) that any alternative means must be “obvious and compelling”, a qualification which, as French CJ pointed out in Tajjour v New South Wales (2014) 88 ALJR 860 at 876 [36], ensures that the consideration of alternative means is merely a tool of analysis in applying this criterion of proportionality. Courts must not exceed their constitutional competence by substituting their own legislative judgments for those of parliaments. [59] The plaintiffs put forward two alternatives to the measures in Div 2A. They say that it would be less restrictive of the freedom if the prohibition on receiving political donations in excess of the applicable caps were confined to those donations which are intended as corrupting; which is to say to limit it to occasions of bribery. They also say that the best method of targeting corruption is transparency and that the requirements in the EFED Act for disclosure of donations could be strengthened. [11.180]

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McCloy v New South Wales cont. [60] Division 2 of Pt 6 of the EFED Act contains provisions requiring the disclosure to the Electoral Commission (Election Funding, Expenditure and Disclosures Act 1981, s 91(2); formerly, disclosures had to be to the Election Funding Authority of New South Wales) of political donations made or received during a relevant disclosure period and of electoral expenditure: Election Funding, Expenditure and Disclosures Act 1981, ss 88, 92, 93. The Commission publishes reportable donations and electoral expenditure on its website: Election Funding, Expenditure and Disclosures Act 1981, s 95(1). [61] The plaintiffs do not explain how these provisions might be strengthened in a way which would render the capping provisions unnecessary. Whilst provisions requiring disclosure of donations are no doubt important, they could not be said to be as effective as capping donations in achieving the anti-corruption purpose of the EFED Act. [62] Limiting restrictions on political donations to acts of bribery would undoubtedly reduce the efficacy of the statutory scheme. The difficulties inherent in detecting and proving bribery in the context of political donations do not suggest that it can be considered a reasonable alternative to capping. Further, it is not the subjective intention of the donor so much as the objective tendency of large payments of money to corrupt both government and the electoral system which is the justification for the restriction. [63] In the course of argument there was some discussion about whether, given the provision made for capping in Div 2A, the outright prohibition of some donors in Div 4A could be said to be necessary. However, the matter is complicated by the fact that capping and the associated public funding for election campaign purposes are not extended to local government elections, whereas the prohibition in Div 4A is. It was not suggested that the legislature should allocate resources to extend the capping and public funding provisions in order to give them the same scope as the prohibition, nor was it suggested that a partial removal of the prohibition, for local government elections, would be practicable. The plaintiffs did not pursue such a line of argument, eschewing capping altogether for being unnecessary. Other submissions as to proportionality [64] The plaintiffs submit that Div 2A, and s 95B in particular, does not go far enough and does not achieve its object comprehensively because it does not capture all dealings between a donor and donee. 873 Whether or not this identifies a shortcoming of the provisions, the submission does not identify a want of proportionality. [65] Turning to the object of Div 2A, the plaintiffs say that it goes further than is necessary to target actual corruption and pursues a “wider cosmetic objective” of targeting a “perceived lack of integrity”. It is difficult to accept that the public perception of possible corruption in New South Wales is a “cosmetic” concern. Even First Amendment jurisprudence accepts that the “appearance” of corruption in politics is a legitimate target of legislative action: Buckley v Valeo 424 US 1 at 27-28 (1976). The submission is also at odds with the plaintiffs’ concession that the maintenance of public confidence is a public benefit which can be relied upon as a justification for a legislative restriction on the freedom. Justification: compatibility and proportionality testing [66] The plaintiffs’ submissions as to proportionality proceed on a correct basis, that proportionality analysis of some kind is part of the Lange test. However, those submissions, and others which have been put to the Court, tend to treat the question of proportionality as one at large and involving matters of impression, such as whether the legislative measures go too far, or not far enough. Something more should be said about the reason why it is necessary to enquire into the proportionality of a legislative measure which restricts the freedom. This requires examination of the nature of the proportionality enquiries which Lange renders necessary, their limits and their relationship with the Lange test of compatibility. [67] The process of justification called for by Lange commences with the requirement that the purpose of the provisions in question, which is to be identified by a process of construction, must be compatible with the system of representative government for which the Constitution provides. Other 888

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McCloy v New South Wales cont. legal systems which employ proportionality testing to determine the limits of legislative power to restrict a right or freedom also require, before that testing commences, that there be a legitimate purpose, because only a legitimate purpose can justify a restriction: Grimm, “Proportionality in Canadian and German Constitutional Jurisprudence” (2007) 57 University of Toronto Law Journal 383 at 387-388; Lübbe-Wolff, “The Principle of Proportionality in the Case-Law of the German Federal Constitutional Court” (2014) 34 Human Rights Law Journal 12 at 13-14. But what is there spoken of as legitimate is that the purpose is one permitted by the relevant constitution. The test in Lange requires more, both as to what qualifies as legitimate, and as to what must meet this qualification. It requires, at the outset, that consideration be given to the purpose of the legislative provisions and the means adopted to achieve that purpose in order to determine whether the provisions are directed to, or operate to, impinge upon the functionality of the system of representative government. If this is so, no further enquiry is necessary. The result will be constitutional invalidity. [68] Otherwise, if this first test, of compatibility, is met, attention is then directed to the effect of the provisions on the freedom itself. It is at this point that proportionality testing is applied. The reason it is required is that any restriction of the freedom must be justified, given that the freedom is protective of the constitutionally mandated system of representative government. It is not sufficient for validity that the legislative provisions in question are compatible with the system of representative government, for if the protective effect of the freedom is impaired the system will likely suffer. Therefore, it is also necessary that any burden on the freedom also be justified, and the answer to whether this is so is found by proportionality testing. The difference between the test of compatibility and proportionality testing is that the latter is a tool of analysis for ascertaining the rationality and reasonableness of the legislative restriction, while the former is a rule derived from the Constitution itself. Proportionality testing in relation to the freedom [69] A legislative measure will not be invalid for the reason only that it burdens the freedom. It has been pointed out on many occasions that the freedom is not absolute … Until Lange, questions remained about how a legislative restriction of the freedom, and that restriction’s means, could be said to be justified. Since Lange, the focus has been upon what is involved in the conditions the Lange test states for validity. [70] In the present case, the Commonwealth submitted that the second question in the Lange test is directed to the “sufficiency of the justification”, but did not say how such a conclusion is reached, or is not reached. It is true that in some judgments in ACTV ((1992) 177 CLR 106 at 143, 147, 233, 234-235, 236, 238), and in cases which followed (Cunliffe v The Commonwealth (1994) 182 CLR 272 at 299; Levy v Victoria (1997) 189 CLR 579 at 647; Mulholland v Australian Electoral Commission (2004) 220 CLR 181 at 200 [40], 201 [41]; Tajjour v New South Wales (2014) 88 ALJR 860 at 896 [164]), it was said that a “compelling justification” may be required, but this is to say no more than that a more convincing justification will be required when the restrictive effect of legislation on the freedom is direct and substantial. It does not explain how the legislation may be justified. However, Lange, in addition to noting the other requirements arising from the Constitution, pointed clearly in the direction of proportionality analysis. [71] Lange is a judgment of the whole Court. Its terms may be expected to reflect some compromise reached. It is not to be expected that, in its reference to a legislative measure being “reasonably appropriate and adapted” to achieve a legitimate end, which the Court equated with “proportionality” (Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 562, 567 n 272), it was providing a complete statement of what is involved in that enquiry. Lange did identify as relevant in ACTV the availability of alternative measures, as mentioned earlier in these reasons. It identified as relevant the relationship between the legitimate end and the means by which this is achieved (Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 568. This is now part of the Lange test following Coleman v Power (2004) 220 CLR 1 at 50-51 [92]-[96], 78 [196], 82 [211]). It identified as relevant the extent of the effect the legislative measure has on the freedom, when it expressed concern that the burden not be “undue”: Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 569, 575. In so doing, it identified elements of proportionality testing. [11.180]

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Part III: The Legislative Power of the Commonwealth

McCloy v New South Wales cont. [72] Much has been written since Lange and Coleman v Power on the topic of proportionality analysis, including, perhaps most influentially, by Professor Aharon Barak. In the period since those decisions the use of proportionality in other jurisdictions, to test the justification of a restriction on a constitutional right or freedom, has gained greater acceptance. Nevertheless, it is not to be expected that each jurisdiction will approach and apply proportionality in the same way, but rather by reference to its constitutional setting and its historical and institutional background. This reinforces the characterisation of proportionality as an analytical tool rather than as a doctrine. It also explains why no decision of this Court has imported into Australian jurisprudence the scrutiny of compelling government interests applied in United States constitutional jurisprudence. More importantly, since Lange and Coleman v Power, considerable attention has been given in judgments in this Court to what the test in Lange requires. A majority of the Court in Unions NSW identified as relevant to, if not inhering in, the test, the first two tests of proportionality. The submissions in this case now direct attention to the relevance of purpose in connection with the extent to which the freedom is burdened. 875 [73] The freedom which is implied from provisions of the Australian Constitution is not a right, of the kind to which proportionality testing is applied by courts in other constitutional systems. Nevertheless, such testing has evident utility as a tool for determining the reasonableness of legislation which restricts the freedom and for resolving conflicts between the freedom and the attainment of legislative purpose. [74] Proportionality provides a uniform analytical framework for evaluating legislation which effects a restriction on a right or freedom. It is not suggested that it is the only criterion by which legislation that restricts a freedom can be tested. It has the advantage of transparency. Its structured nature assists members of the legislature, those advising the legislature, and those drafting legislative materials, to understand how the sufficiency of the justification for a legislative restriction on a freedom will be tested. Professor Barak suggests that “members of the legislative branch want to know, should know, and are entitled to know, the limits of their legislative powers”: Barak, Proportionality: Constitutional Rights and their Limitations, (2012) at 379. [75] So far as concerns the courts, the question whether a legislative measure which restricts the freedom can be said to be justified is not to be approached as a matter of impression. It should not be pronounced as a conclusion, absent reasoning. It is not to be inferred that, in stating the test in Lange, it was intended that the test was to be answered by reference to a value judgment as to what is reasonable, made without reference to any generally applicable criteria. [76] To the contrary, as earlier explained, Lange identifies the structure for and, to an extent, the content of proportionality testing. Accepting that value judgments cannot be avoided altogether, their subjectivity is lessened and a more objective analysis encouraged by this process. In so far as proportionality may be considered to involve a conclusion that a statutory limitation is or is not reasonably necessary, the means of testing for this conclusion have already been identified in the test of reasonable necessity, as Unions NSW confirms. It cannot then be said that another, more open ended, enquiry is also required. Something more, and different, must be required. [77] In an article by a former member of the Federal Constitutional Court of Germany (Lübbe-Wolff, “The Principle of Proportionality in the Case-Law of the German Federal Constitutional Court”, (2014) 34 Human Rights Law Journal 12 at 16), referred to by Lord Mance JSC in Pham v Secretary of State for the Home Department (Open Society Justice Initiative intervening) [2015] 1 WLR 1591 at 1622 [96], it was said that proportionality testing may be seen: as a tool directing attention to different aspects of what is implied in any rational assessment of the reasonableness of a restriction. … [It] is designed to … help control intuitive assessments, [and] make value judgments explicit. Whether it is also used as a tool to intensify judicial control of state acts is not determined by the structure of the test but by the degree of judicial restraint practiced (emphasis in original). In a system operating according to a separation of powers, judicial restraint should be understood to require no more than that the courts undertake their role without intruding into that of the legislature. 890

[11.180]

Implications from Representative Government: Implied Rights and Freedoms

CHAPTER 11

McCloy v New South Wales cont. [78] In Bank Mellat v HM Treasury (No 2) [2014] AC 700 at 790 [72]-[74], Lord Reed JSC observed that, in the domestic courts of the United Kingdom, a more clearly structured approach to proportionality analysis was necessary than that taken by the European Court of Human Rights because the former accords with the analytical approach to legal reasoning which is characteristic of the common law. Its attraction as a heuristic tool, his Lordship explained, “is that, by breaking down an assessment of proportionality into distinct elements, it can clarify different aspects of such an assessment, and make value judgments more explicit.” [79] It is generally accepted that there are at least three stages to a test of proportionality (the Supreme Courts of the United Kingdom and Canada divide the same concepts into four: see Bank Mellat v HM Treasury (No 2) [2014] AC 700 at 771 [20], 790-791 [74], 805 [132], 814 [166]; R v Oakes [1986] 1 SCR 103 at 138-139). As stated in the introduction to these reasons, they are whether the statute is suitable, necessary, and adequate in its balance. [80] Suitability is also referred to as “appropriateness” or “fit”: Barak, Proportionality: Constitutional Rights and their Limitations, (2012) at 303. Despite this language, it does not involve a value judgment about whether the legislature could have approached the matter in a different way. If the measure cannot contribute to the realisation of the statute’s legitimate purpose, its use cannot be said to be reasonable. This stage of the test requires that there be a rational connection between 876 the provision in question and the statute’s legitimate purpose, such that the statute’s purpose can be furthered. This was the approach followed in Unions NSW (2013) 252 CLR 530 at 557-558 [50]-[55], 561 [64], 579 [140], 586 [168]. It is an enquiry which logic requires. [81] The second stage of the test – necessity – generally accords with the enquiry identified in Unions NSW (2013) 252 CLR 530 at 556 [44] as to the availability of other, equally effective, means of achieving the legislative object which have a less restrictive effect on the freedom and which are obvious and compelling. If such measures are available, the use of more restrictive measures is not reasonable and cannot be justified. [82] It is important to recognise that the question of necessity does not deny that it is the role of the legislature to select the means by which a legitimate statutory purpose may be achieved. It is the role of the Court to ensure that the freedom is not burdened when it need not be. Once within the domain of selections which fulfil the legislative purpose with the least harm to the freedom, the decision to select the preferred means is the legislature’s: Barak, Proportionality: Constitutional Rights and their Limitations, (2012) at 409. [83] The first two stages of the test for the proportionality, or reasonableness, of a legislative measure concern the relationship between the legitimate legislative purpose (“ends”) and the means employed to achieve it (“means”). Neither the importance of the legislative purpose nor the extent of the effect on the freedom are examined at these stages. The Lange test identifies the extent of the effect on the freedom as relevant (Coleman v Power (2004) 220 CLR 1 at 50 [92]), but does not say what, if anything, is to be balanced against the effect on the freedom in order to determine whether the measure is justified. The Lange test does not expressly identify assessment of the importance of the legislative purpose as a relevant factor. [84] It is not possible to ignore the importance of a legislative purpose in considering the reasonableness of a legislative measure because that purpose may be the most important factor in justifying the effect that the measure has on the freedom. The submissions for the Commonwealth bear this out. The Commonwealth submitted