TOPIC 1 - OUTLINE OF THE AUSTRALIAN CONSTITUTIONAL SYSTEM..........................................................................................................4

TOPIC 2 - COMMONWEALTH LEGISLATIVE POWER.........................6

CHARACTERISATION OF LAWS :..........................................................................6INTERSTATE AND OVERSEAS TRADE AND COMMERCE POWER S 51(I)AND S 92.. . .8

Section 51(i) : Trade and Commerce Power..................................................8Section 92 : Trade to be free..........................................................................81. Meaning of “trade and commerce” :.........................................................82. What activities of Trade and Commerce are Interstate and Overseas? :.....83. To what extent can the Cth regulate Intrastate Trade and Commerce :......9Section 92 : Freedom of Interstate Trade, Commerce and Intercourse.........11

EXTERNAL AFFAIRS POWER S. 51(XXIX)...........................................................14A. The Cth can legislate with respect to any person, place, matter or thing which is physically external to Australia :...................................................14B. Foreign Relations :.................................................................................14

CORPORATIONS POWER S. 51 (XX)....................................................................181. Characterising a corporation as “trading or financial” :.........................182. Extent of the power to regulate s 51(xx) corporations :............................203. Whether the power extends to the incorporation and/or winding up of s 51(xx) corporations :...................................................................................21

COMPULSORY ACQUISITION POWER S. 51(XXXI)...............................................22A number of special cases of compulsory acquisition fall outside s 51(xxxi) :.................................................................................................................... 22The four basic elements of this power are :..................................................23

COMMONWEALTH ACQUIRED PLACES S. 52(I)...................................................251. Place :.....................................................................................................252. Acquired :...............................................................................................253. Public purpose :......................................................................................25Central issue : does State law continue to apply to a Cth place located within a State?.......................................................................................................25

TOPIC 4 - JUDICIARY................................................................................26

DOCTRINE OF SEPARATION OF POWERS :...........................................................26Definition of judicial power :.......................................................................26State Level :................................................................................................29Parliament usurping the judicial process :...................................................29

JUDICIAL INDEPENDENCE :................................................................................301. Security of tenure....................................................................................30

TOPIC 5 - EXPRESS RESTRICTIONS ON POWER.................................32

INCONSISTENCY OF LAWS - (S 109) :.................................................................32i. The meaning of ‘law’ :.............................................................................32ii. The meaning of ‘to the extent of the inconsistency be invalid’ :...............32iii. The meaning of ‘inconsistency’ :............................................................32

FREEDOM OF RELIGION - (S 116) :.....................................................................37i. No law for establishing any religion.....................................................37ii. No law for imposing any religious observance as in Gallagher.........37iii. No law for prohibiting the free exercise of any religion....................37

RIGHTS OF RESIDENTS OF DIFFERENT STATES - (S 117) :....................................38

TOPIC 6 - IMPLIED RESTRICTIONS.......................................................39

CTH AND STATE IMMUNITY..............................................................................39Two preliminary issues :..............................................................................39If the law intends to bind another Crown, is it valid?...................................39The following provides an outline of the development of this issue in the HC -.................................................................................................................... 43

FREEDOM OF POLITICAL DISCUSSION :..............................................................45A. The foundation of this implied right :......................................................45B. Issues regarding to the implied freedom :................................................46C. Constitutional defence to defamation :....................................................46

TOPIC 7 - ROLE OF THE HIGH COURT AND CONSTITUTIONAL REFORM......................................................................................................48

A. NATURE OF THE HC’S JURISDICTION............................................................48B. JUDICIAL METHOD.......................................................................................49

The principles of interpretation of the Constitution......................................49C. LEGALISM V. ACTIVISM...............................................................................51

Legalism - Substance v. Formalism :...........................................................51Constitutional implications :........................................................................51Injection of values and policies :.................................................................51

D. ACADEMIC CRITICISM..................................................................................52Prof Brian Galligan :..................................................................................52Jeffrey Goldsworthy :..................................................................................52Stephen Gageler :........................................................................................52Prof Greg Craven :......................................................................................52

Overview of the courseCommonwealth Legislative Powers :

s 51(i) I/S and O/S Trade and Commerce (Murphyores, et al).

s 51(ii) Taxation (Matthews v. Chicory Marketing Board, et al).

s 81 and 83 Appropriation (The AAP Case).

s 51(xxix) External Affairs (Tas Dams Case).

s 51(xx) Corporations (Adamson’s Case, et al).

s 51(xxxi) Compulsory Acquisition (exceptions : Blank Tape Royalty Case, et al).

s 52(i) Exclusive Commonwealth Place (Allders).

s 51(xxxix) Incidental Power (including implied nationhood power).

Restrictions on Commonwealth Legislative Power :

s 92 Freedom of I/S trade, commerce and intercourse (Cole v. Whitfield).

s 99 No discrimination or preference to any State

s 55 Tax Bills to deal with one subject of taxation only (Re Dymond, et al).

Ch III Separation of judicial powers (Boilermakers, Brandy, et al).

Melbourne Corporation principle

s 116 Freedom of Religion (The DOGS Case).

s 117 Rights of Residents in States (Goral).

Implied freedom of political discussion (Lange v. ABC).

Restrictions on State Legislative Power :

s 90 Customs and Excise Duties (Dennis Hotels, Ha, et al).

s 52(i) State laws do not apply to Commonwealth places - NB. Cth statutes now apply State laws.

s 109 Inconsistency (Ex parte McLean, et al).

s 92 Freedom of I/S trade, commerce and intercourse (Cole v. Whitfield).

Ch III Separation of judicial powers (Kable).

s 117 Rights of Residents in States (Goral).

Implied freedom of political discussion (Stephens).

Definition of “constitutional law” : “A set of rules which define the institutions of government, assign to them areas of operation, set limits to their functions, establish their interrelationships and prescribe the relative rights and obligations of other, non-governmental, interests.”

Definition of a “constitution” : A special document which establishes the structure of government and governs the exercise of power. However, some countries do not have written constitutions (eg. UK and NZ) but nevertheless possess a constitution in terms of convention, etc. Furthermore, it is unlikely that any one written constitution comprehensively sets out all of the constitutional law for that country.

Australia’s Constitutional Structure : Commonwealth Parliament : Governor-GeneralSenate House of Representatives Scope of power : to make laws with respect to specific heads of legislative power in ss 51 and 52 and other specific powers in the Constitution.

Federal Executive Council : Governor-GeneralPrime MinisterMinisters of State (who must be MP’s : s 64).

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Scope of power : to execute, administer and maintain the laws of the Commonwealth.

Federal Courts : High CourtFederal CourtFamily CourtJustices appointed pursuant to s 72. Scope of power : to enforce laws and exercise jurisdiction over specified matters in ss 73, 75 and 76.

Australia’s Constitutional Links with Great Britain : 1901 : Federation - continued assumption by Britain of Australia’s foreign

policy because Australia remained part of the British Empire. Technically, the British Parliament (or Imperial Parliament) could legislate for Australia however there developed a convention whereby the British Parliament would not enact legislation affecting Australia unless we requested or consented to it.

1931 : Statute of Westminster 1931 (Imp) - Australia was offered special status in line with the above convention whereby Australia would assume dominion status. Therefore, the British Parliament renounced its sovereign rights over Australia, although retaining the power to enact legislation at the request and with our consent.

1942 : Statute of Westminster 1942 (Com) - Australia adopted the 1931 Imperial Statute retrospective from the outbreak of WW2 on 3 Sept 1939. Therefore, since the war, Australia has developed its own foreign policy and thereby achieved sovereign status.

1986 : Australia Act 1986 (UK) - terminate those remaining constitutional links between Australia and Britain. However one still remains. The reigning Monarch in England is the Head of State of Australia but s/he acts only on the advice of the PM or the relevant Premier depending on the issue involved.

Constitutional Characteristics of the Australian Federation : The Westminster System adopted in Australia upon Federation and developed over many centuries in

England. named after the Palace of Westminster in London where Parliament meets

in two houses : the House of Lords and the House of Commons. the Westminster system has several characteristics of operation, of which

most have developed through convention and therefore are not justiciable.

Responsible Government the principle of responsible government underlies the Australian

Constitution. Under this principle, the Crown (or GG), acts on the advice of its ministers who are in turn members of, and responsible to, the Parliament. It is for this reason that section 64 of the Constitution requires Minsters to be, or become, members of Parliament.

there is a small number of matters (probably only four) in relation to which the GG is not required to act in accordance with Ministerial advice. These are known as ‘reserve powers’. The two most important reserve powers are the powers to appoint and to dismiss a PM.

the principle of responsible government requires that the executive government be also MP’s.

the convention is that those who occupy the front benches as Ministers enjoy the confidence of the lower House since this House is representative of the people.

the development of political parties in the later half of this century facilitated the identification of those who enjoyed majority support of the lower House. By convention, the leader of the majority party becomes the PM.

if the Govt loses the confidence of the lower House, it should tender its resignation to the Queen or GG.

the positions of PM and Opposition Leader are held by the leaders respectively of the majority and minority parties in the lower House. Each must be a member of the lower House.

Ministerial Responsibility there are two forms of ministerial responsibility : individual and collective

i. Individual responsibility : each Minister is personally responsible for the actions and decisions of his/her department.

ii. Collective responsibility : refers to the convention that the decisions of government made in Cabinet are binding on all Minsters and they must not dissent from them.

Parliamentary Sovereignty the convention in England whereby all laws enacted by parliament and duly

assented to by the Sovereign are valid and cannot be challenged in the Courts.

in Australia, the powers of Commonwealth and State Parliaments are restricted by the Commonwealth Constitution. Nevertheless, within their

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restrictive powers, no challenge can be brought against an Act of Parliament on the basis that it is not for the peace, order and good government” of the Commonwealth or State.

Topic 2 - Commonwealth Legislative Power

Characterisation of Laws :

There are three basic stages when deciding on the constitutional validity of Commonwealth legislation :

1. Interpretation - the actual meaning and scope of the various heads of legislative power in ss 51 and 52 must be ascertained.

Amalgamated Society of Engineers v. Adelaide Steamship Co Ltd (1920) : The Engineer’s Case The most important principle from this case is that full scope and effect

must be given to each head of power according to its natural meaning. No restrictions are to be implied which are not expressed or arise by necessary implication.

The rejection of the doctrines of State reserve powers and of intergovernmental immunities by Engineers marked a significant shift in the federal balance in favour of the Commonwealth.

R v. Brislan; ex parte Williams (1935) : The meaning of the language used in the heads of legislative power in ss 51

and 52 must be ascertained as at the date of enactment of the Constitution in 1900. However, the court is only bound by the connotation of the words used, that is, the essential nature of the subject matter in issue.

In Brislan, “radio broadcasting” was held by a majority of the HC to come within s 51(v) “postal, telegraphic, telephonic, and other like services” because the denotation included radio, and later TV.

2. Characterisation - the legislation in question must be characterised to determine whether it is a law with respect to one or other heads of legislative power; what is the direct legal effect?

Fairfax v. Federal Commissioner of Taxation (1965) : as regards substance, this is tested by examining the direct legal effect of the

legislation “upon the nature of the rights, duties, powers and privileges which it changes, regulates or abolishes.”

Kitto J : “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.

WA Airlines Case : For the purposes of characterising a law with respect to a head of power, a

mere economic effect or connection is insufficient. It must be a direct legal effect.

Multiple Characterisation - Does the subject matter of the law fall within : (i) the core of the head of power; or

(ii) the incidental operation of the power. the express incidental power in s 51 (xxxix) : The most important in conferring upon the Cth Parl the power to legislate with respect to the executive and judicial branches. NB this power is limited to the execution of the powers of those branches of govt : Davis v. Cth (1988).

the implied incidental power in each head of legislative power : The main basis for the enactment of legislation which does not fall into the core head of power in ss 51 or 52 but deals with matters which are incidental to one or more of those heads of power. In other words, matters “the control of which is necessary to effectuate the main purpose of the head of power” per Dixon CJ in Grannall v. Marrickville Margarine (1955).

3. Restrictions - if the law appears to fall within a head of legislative power, it must be checked to ensure it does not infringe any express or implied restriction on that head of power (eg. s 116 : freedom of religion).

Interstate and Overseas Trade and Commerce Power s 51(i)and s 92.

Section 51(i) : Trade and Commerce Power “The Parliament shall... have power to make laws... for the Cth with respect to trade and commerce with other countries, and among the States.” -ie. Interstate and overseas.

Section 92 : Trade to be freeTrade within the Cth to be free, etc.

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1. Meaning of “trade and commerce” : The meaning of trade and commerce in s 51(i) can be gathered from the interpretation of those words in s 92 - freedom of interstate trade, commerce and intercourse.

Trade and commerce is not limited to tangible goods but covers the movement of people : ANA Case (1945), and trade in intangibles : Bank of NSW v. Cth (1948) (transmission of credit); Miller v. TCN Ch9 PL (1986) (communication signals).

Mere manufacture, production and mining do not constitute trade and commerce : Grannall v. Marrickville Margarine PL (1955). But, the Cth can regulate such intrastate activities by using its incidental power to s 51(i).

2. What activities of Trade and Commerce are Interstate and Overseas? : (Characterisation : What is the direct legal effect? )Movement of goods and people across State lines or overseas. For example, any prohibition or regulation of exports and imports on any conditions the Cth imposes.

Murphyores Inc PL v. Cth (1976) : Cth Custom Regs prohibited the export of mineral sands from Aust except

with the approval of the Cth Minister. Murphyores had valid sand mining leases over Fraser Island - leases granted

by the Qld Govt. Murphyores sought the Cth Minister’s approval to export mineral sands

from Fraser Island. Cth Commission of Inquiry launched into environmental impact of sand

mining on Fraser Island. Murphyores sought a declaration that the Minister could not take into

account the environmental impact of mining in deciding whether to grant an export permit because the “environment” does not form part of the “trade and commerce” power in s 51(i).

HELD : Murphyores failed. This was a valid exercise of the trade and commerce power, as they dealt with the export of goods overseas. Therefore, the Cth Parl can impose any conditions it thinks fit on export/import.

Also within the power are the following : (i) regulation of conditions of work of those employed on ships engaged in I/S or O/S trade, as well as those employed for stevedoring those ships : R v. Foster, ex parte Eastern and Aust Steamship Co Ltd (1959).

(ii) the prevention of undesirable trade practices in I/S and O/S trade and commerce : Redfern v. Dunlop Rubber Aust Ltd (1964).

(iii) the promotion of O/S trade and commerce by the establishment of Trade Boards.

(iv) safety regulations for O/S and I/S air navigation : R v. Burgess, ex parte Henry (1936); Airlines of NSW PL v. NSW (No 2) (1965).

3. To what extent can the Cth regulate Intrastate Trade and Commerce : The incidental power to s 51(i) enables the Cth to regulate intrastate activities which are sufficiently connected with I/S or O/S trade and commerce.

This connection is described in many ways but the all have in common the notion of some physical connection, as distinct from a merely economic connection :

(i) Direct, proximate or substantive connection between the intrastate activity and I/S or O/S trade and commerce :

Redfern v. Dunlop Rubber Aust Ltd (1964) : Trade and commerce power - regulation of intrastate activity; Cth legislation prohibited any contract in relation to trade and commerce,

I/S or O/S, in restraint of trade. Redfern claimed that Dunlop had agreed with other wholesalers not to

supply them with tyres because they were retailing their tyres at a discount. Therefore Dunlop were involved in price fixing between other tyre suppliers in restraint of trade.

The court was required to determine whether the power in s 51(i) operated to authorise the regulation of activities of a composite character in which the intrastate could not be easily distinguished from the I/S activities.

HELD : the relevant Cth legislation did not exceed the power in s 51(i) because it dealt with activities which combined I/S and intrastate trade.

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“Cth power over trade and commerce can only extend to such intrastate and commerce as is inseparably connected with I/S trade and commerce” : per Menzies J.

(ii) causative connection :

Airlines of NSW PL v. NSW (No 2) (1965) : Airlines granted a licence under Cth legislation for the carriage of

passengers and goods between Sydney and Dubbo (intrastate). NSW legislation also required Airlines to obtain a similar licence. Airlines sought a declaration that the NSW Acts were invalid due to their

inconsistency with Cth Acts, and an injunction to restrain NSW from interfering with its operations.

The issue for the court was whether the power in s 51(i) extended to authorise the regulation of wholly intrastate air navigation.

HELD : the physical danger posed by intrastate aircraft using the same airspace justified the Cth in regulating those intrastate aircraft. But the decision resulted in stalemate because NSW Acts were not inconsistent with Cth Regs. Accordingly, air service operators were required to obtain both Cth and NSW licences.

O’Sullivan v. Noarlunga Meat Ltd (1954) : Noarlunga operated a slaughterhouse and abattoirs in SA. Noarlunga was registered under the relevant Cth legislation which

prohibited the export of meat unless treated and stored in the prescribed manner.

Noarlunga was not registered under the relevant SA legislation which prohibited the use of any premises for the purpose of slaughtering stock for export, unless licensed under the Act.

After exporting meat O/S, Noarlunga was charged with breaching the SA Act.

Noarlunga pleaded that the SA legislation was inconsistent with the Cth Regs and therefore invalid.

The issue for the court was whether the Cth power with respect to trade and commerce with other countries extends to authorising legislation regulating and controlling the slaughter of meat for export.

HELD : “All matters which may beneficially or adversely affect the export trade of Aust in any commodity produced or manufactured in Aust must be the legislative concern of the Cth” : per Fullagar J.

Therefore the validity of the Cth legislation with regard to treatment and storage of meat for export was upheld within the core of s 51(i); the validity with regard to registration and operation of slaughter-houses was upheld within the incidental power of s 51(i).

(iii) economic effect or connection insufficient (NB only with regards to incidental power) : If the only connection between the regulated intrastate activity and I/S or O/S trade and commerce is an economic one, then the Cth is acting outside its powers in regulating that intrastate activity.

AG (WA) v. Aust National Airlines Commission (1976) : The Commission was set up to carry passengers and goods between States or

Territories or within Territories under the Aust National Airlines Act 1945 (Cth).

In 1973, the Act was amended to enable the Commission to conduct intrastate services.

The Commission proposed to commence a service between Perth and Darwin with an intermediate stop in Port Hedland. The stop was dictated by economic reasons.

The issue for the court was whether s 51(i) incidentally includes a grant of power to legislate for intrastate trade and commerce when the only relationship to I/S trade and commerce was to conduce to the efficiency, competitiveness and profitability of the I/S activity.

HELD : “The fact that international or I/S 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 Cth might stimulate and encourage the latter so as to foster the former” : per Stephen J. Therefore, economic connection not sufficient.

Section 92 : Freedom of Interstate Trade, Commerce and IntercourseThe relevant part of s 92 is the guarantee that, “... trade, commerce and intercourse among the States... shall be absolutely free.”

It is the most controversial and contested provision of the Constitution for it leaves to judicial interpretation the meaning of :

i. “trade, commerce and intercourse”ii. “among the States”iii. “shall be absolutely free”

Factors influencing court interpretation of these phrases :

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1. s 92 invalidates both Cth and State laws infringing its guarantee of freedom : James v Cth (1936)

2. What is the meaning of “absolutely free”?

The purpose of s 92 : Two theories : the free trade theory and the individual rights theory.

1. The free trade theory : Interpreted s 92 as invalidating laws which discriminated against I/S trade; adopted by the HC in,

Fox v. Robbins (1909) : imposed a licence fee on wine retailers in WA. Legislation provided for higher fees to be paid if the wine sold was made

from fruit grown outside WA. HELD : legislation was in breach of s 92 because it burdened the

importation of fruit into WA and therefore was a burden on I/S trade.

2. The individual rights theory : Uses s 92 to strike down any legislation which impinges on an individual’s right to trade I/S. No actual discrimination of I/S trade against local trade is required.

This was the theory adopted by the HC in W&A McArthur v. Qld (1920), but was confused by the PC in James v. Cth (1936). This allowed the individual rights theory to prevail in later cases and subsequently the individual rights theory was firmly adopted in,

Aust National Airways PL v. Cth (1945) : trade and commerce power - govt participation in field of activity; Cth legislation established a statutory commission to operate airline services

between the States and Territories. The Act provided that where the Commission held a licence for any

particular I/S route, any other airline licence became inoperative, as long as the Commission provided an adequate airline service.

The plaintiff argued that s 51(i) contemplated the legislative regulation of I/S and O/S trade and commerce and not the entry of the Govt itself into that field of activity.

HELD : the Cth legislation was a valid exercise of the power in s 51(i).

“A law authorising the Govt to conduct a transport service for I/S trade, whether as a monopoly or not, appears to me to answer the description of a law with respect to trade and commerce amongst the states” : per Dixon J.

Since the individual rights theory accorded wide scope to s 92, the HC developed techniques to avoid a total incapacity on the part of the govt to regulate those engaged in I/S trade and commerce : (a) The criterion of operation test :

- s 92 was infringed only when a law directly infringed on an activity of I/S trade and commerce or an essential attribute thereof.

- highly technical and artificial distinctions developed; eg the manufacture or production of goods, even if to satisfy I/S contracts was held to stand outside s 92 protection.

- also, for some time, first sales by importers were similarly regarded as not part of I/S trade,

Wragg v. NSW (1953) : trade and commerce power - identification of I/S trade and commerce; Wragg was a potato grower in Tas, and exported his crop to NSW. The NSW importer sold the potatoes and the purchasers took delivery of

them on the wharf. The relevant NSW legislation established the price of potatoes sold by

wholesalers. The plaintiff sought a declaration that the Act was invalid as breaching s 92. HELD : The sales were not part of I/S trade and commerce, and therefore

the NSW Act did not infringe s 92. “The distinction which is drawn between I/S and intrastate trade, for the

purpose of the power in s 51(i) may well be considered artificial and unsuited to modern times. But it is a distinction adopted by the Constitution and it must be observed however much interdependence may now exist between the two divisions of trade and commerce which the Constitution thus distinguishes” : per Dixon CJ.

- however, the position in the above case was questioned recently in the Aust Coarse Grains case (1985).

(b) The “permissible regulation” test : - given that commercial chaos and anarchy would arise if the

“absolute” freedom of s 92 was interpreted literally, the HC permitted laws

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which, despite directly burdening I/S trade and commerce, constituted “permissible regulation”.

- the application of safety standards, traffic regulations, hygiene controls, etc to I/S trade and commerce were all upheld on grounds of public policy provided they were reasonable and proportionate in their operation and not discriminatory against I/S trade.

In 1986, Mason J in Miller v. TCN Ch9 PL, acknowledged that “there is now no interpretation of s 92 that commands the acceptance of a majority of the Court” and that it had “a responsibility to undertake a fundamental re-examination of the section.”

New Interpretation of s 92 :

Cole v. Whitfield (1988) : freedom of I/S trade and commerce - formulation of test to be applied; Whitfield was the manager of a business in Tas which purchased and sold

live crayfish. Whitfield purchased live crayfish from SA. The crayfish were above the minimum size prescribed by SA legislation, but

were below the minimum size specified by Tas legislation. In answer to the charge of being in possession of undersized crayfish,

Whitfield argued that the Tas regulations were in breach of s 92 in that they imposed a barrier on the I/S trade in crayfish between SA and Tas.

HELD : Whitfield failed. The regulations did not infringe s 92, as they did not distinguish between local and I/S crayfish but applied to all crayfish sold in Tas. Although the regulations placed a burden on I/S trade in this case, they did not constitute a discriminatory burden on I/S trade of a protectionist kind.

3-Step Cole v. Whitfield Test : (if yes to these questions, then there is a breach of s 92) 1.) is there a burden on I/S trade or commerce? 2.) does the law discriminate against I/S trade or commerce to protect the local trade?3.) even if it is discriminatory, is the law protectionist in character? Bath v. Alston Holdings PL (1988) : freedom of I/S trade and commerce - discrimination against I/S trade in protectionist manner; Vic legislation prohibited the sale of tobacco unless the seller was licensed.

Licence fees were calculated on the value of the tobacco sold. The fees were added at the wholesale stage if the tobacco was bought by

retailers from Vic suppliers, or at the retail stage if the tobacco was bought by retailers from I/S suppliers.

Alston was a retail tobacconist in Vic, but did not possess a licence. It purchased tobacco from a wholesaler in Qld.

Bath sought injunctions to restrain Alston from selling tobacco otherwise than pursuant to a licence.

Alston argued that the legislative determination of the licence fee contravened s 92.

Bath asserted that the Act was not discriminatory as it imposed a duty on all tobacco that came into Vic.

HELD 4 -3 : Alston successful (ie licence fees were a breach of s 92). The legislative provision that the tobacco purchased from the holder of a Vic wholesale licence was exempt from the tax was invalid as it discriminated against I/S trade in a protectionist manner. BUT, the minority view stated that it is more important to look at the practical operation of the law which was not to protect I/S trade, but to impose a tax on Vic smokers.

Castlemaine Tooheys Ltd v. SA (1990) : freedom of I/S trade and commerce - practical operation of legislation was discriminatory; SA legislation provided that the purchaser of any beverage must pay to the

retailer a deposit on the bottle in which the beverage was supplied. The Act was amended in 1986 to provide that a larger deposit was required

to be paid on non-recyclable beer bottles than on recyclable beer bottles. Further, retailers of beer in non-recyclable bottles were required to accept

the return and refund the deposit of those bottles. No such requirement was imposed upon the retailers of recyclable bottles.

Castlemaine was located in States other than SA and used non-recyclable bottles for all its sales of beer.

The local SA brewers mainly used recyclable bottles. Castlemaine claimed that the practical effect of the SA legislation was to

discriminate against I/S beer sales. The def asserted that the purpose of the legislation was to promote energy

and resource conservation. HELD : Castlemaine successful. The law was invalid under s 92, because its

practical operation was to discriminate against I/S breweries.

Barley Marketing Board (NSW) v. Norman (1990) :

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freedom of I/S trade and commerce - test for discriminatory burden; NSW legislation authorised the Governor of NSW to transfer ownership of

any barley grown in NSW to the Board for marketing. The Act also declared invalid every contract for the sale of barley not made

by the Board. Norman entered into a contract to sell his barley to a purchaser in Vic. The Board sought a declaration that the contract was void. Norman argued that the Act infringed s 92 in that it prevented I/S purchasers

from buying directly from the NSW producers. HELD : Board successful. The Act was valid as it did not impose a

discriminatory burden of a protectionist kind. Although the purpose of the Act was to protect the barley industry in NSW, it did not do so by discriminating against commercial interests in other States.

External Affairs Power s. 51(xxix)

There are two basic aspects to s 51(xxix), the power to legislate with respect to “external affairs” : A. Matters physically external to Australia. B. Foreign Relations.

A. The Cth can legislate with respect to any person, place, matter or thing which is physically external to Australia :

NSW v. Cth (The Seas and Submerged Lands Act Case) (1975) : The Seas and Submerged Lands Act 1973 (Cth) provided that the sovereign

rights of Australia in respect of the continental shelf, for the purpose of exploiting its natural resources were vested in the Cth.

The legislation enacted the 1958 Geneva Convention on the Territorial Sea and Contiguous Zone and the Convention on the Continental Shelf.

Each of the Conventions declared that the rights covered by the Act were vested in coastal states, but subjected those rights to qualifications not contained in the Act.

The States sought declarations that the Act was an invalid exercise of the external affairs power.

HELD : the Act was a valid exercise of the external affairs power as it gave effect to the Convention and it also dealt with areas external to Australia.

The external affairs power “is not limited, in my opinion, to the making of arrangements with other nations or the implementation of such international arrangements as may properly be made in Australia’s interest with other nations, though doubtless these may be the most frequent manifestations of

the exercise of the power. The power extends, in my opinion, to any affair which in its nature is external to the continent of Australia and the island of Tasmania subject always to the Constitution as a whole” : Barwick CJ.

Polyukhovich v. Cth (1991) : The War Crimes Act 1945 (Cth) provided that any person who committed a

war crime in Europe during WW2 was guilty of an indictable offence. Only an Australian citizen or resident could be charged under the Act. Polyukhovich was charged with an offence, but at the time of the alleged

offence he had no connection with Australia, nor was there any law on war crimes.

He sought a declaration that the Act was invalid on the basis that it was beyond the scope of the external affairs power.

HELD : the Act was valid under the external affairs power as it operated upon conduct which took place outside Australia.

“Used without qualification or limitation, the phrase ‘external affairs’ is appropriate in a constitutional grant of legislative power to encompass both relationships and things : relationships with or between foreign States and foreign international organisations and other entities; matters and things which are territorially external to Australia regardless of whether they have some identified connection with Australia or whether they be the subject matter of international treaties, dealings, rights or obligations” : per Deane J.

Brennan J dissented on the basis that the external affairs power required a connection between Australia and the subject matter of the legislation, which his Honour considered did not exist.”

B. Foreign Relations : The second aspect of the power enables the Cth to legislate with respect to Australia’s relations with other nations. Legislation enacted by the Cth in this respect can be categorised into : a.) relating to treaties or conventions; b.) relating otherwise to Australia’s foreign relations; or, c.) laws on matters of international concern.

a.) treaties or conventions: The power to enter into treaties and conventions is vested exclusively in the Cth Executive by virtue of s 61 as a royal prerogative. There is an agreement that the Executive will table treaties to Parliament for scrutinisation before signing them. No restriction exists to limit the types of treaties to which the Cth may

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become a party. The constitutional difficulty arises in their implementation into domestic law which must be affected by domestic legislation.

Walker v. Baird [1892] :

Cf. Minister for Immigration and Ethnic Affairs v. Teoh : Teoh was to be deported although this would have meant that he would

leave several children behind. The Rights of the Child Convention would have protected Teoh and his

children. Australia was a party to the Rights of the Child Convention, but it had not

been enacted into domestic law. HELD : the authorities had not adequately considered the implications for

the children if the deportation had gone ahead. Teoh had a reasonable expectation that Australia would act in accordance with the Rights of the Child Convention because they had signed the treaty.

Until the 1970’s, there was an understanding between the Cth and the States whereby each would implement those aspects of an international treaty which fell within their traditional areas of responsibility. However, the Cth in 1975 enacted the Racial Discrimination Act 1975 (Cth) in reliance with s 51(xxix) itself.

Authority up to that point indicated at least a wide and a narrow view of the external affairs power in this respect : i. The wide view - the Cth could implement ANY TREATY regardless of its subject matter, for the fact it was the subject of a treaty gave it the character of an external affair. Appears to be preferred by the HC. ii. The narrow view - the subject matter of the treaty had to be “indisputably international in character”.

The cases to be considered here are :

Koowarta v. Bjelke-Petersen (1982) : On 30th Sept 1975 Australia ratified the International Convention on the

Elimination of All Forms of Racial Discrimination. To carry out its obligations, the Cth enacted the Racial Discrimination Act

1975 (Cth).

In 1976, the Aboriginal Development Commission entered into a contract with the lessees of Crown land in Qld to purchase that leasehold on behalf of the Winychanam people.

The Minister for Lands refused to approve the transfer of the lease. The refusal was based upon the declared Govt policy which opposed

proposals to acquire large areas of land for development by Aborigines. Koowarta, a member of the Winychanam group began proceedings against

the Premier of Qld under the Racial Discrimination Act. The defendant argued that the Act was invalid. The question for determination was whether the power in s 51(xxix) enabled

the Cth to enact laws for the execution of the Convention. HELD : the Racial Discrimination Act was a valid exercise of the external

affairs power. “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)” : per Stephen J.

Cth v. Tas (1983) : Tasmanian Dam Case Aust ratified the Convention for the Protection of World Cultural and

Natural Heritage in 1974, and the National Parks and Wildlife Act 1975 (Cth) was enacted to implement it.

The Convention provided that each nation signatory recognised a duty to identify, conserve and protect the cultural and natural heritage situated within its territory, as “such heritage constitutes a world heritage for whose protection it is the duty of the international community as a whole to co-operate.”

In Sept 1981 the Premier of Tas requested the Cth to nominate three areas in the south-west of the State for inclusion in the World Heritage List.

In Dec 1982 the World Heritage Committee accepted the nominations. Earlier that year, the Tas parliament passed the Gordon River Hydro-

Electric Power Development Act 1982 (Tas) which authorised the construction of a dam within one of the listed areas.

Work on the dam commenced in July 1982. On 31 March 1983 the World Heritage (Western Tasmanian Wilderness)

Regulations were made pursuant to the National Parks and Wildlife Act. The Regulations prohibited the construction of a dam or ‘associated works’.

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On 2 May 1983, the Cth Parliament enacted the World Heritage Properties Conservation Act 1983 (Cth) which prohibited the destruction or damage of any property suitable for inclusion in the World Heritage List.

On 26 May 1983 the GG proclaimed the Act applied to the area in which the dam was to be built.

The Cth began proceedings seeking a declaration that the construction of the Franklin Dam was unlawful.

Tasmania cross-claimed seeking declarations that the Cth Acts and Regulations were invalid.

The issue for the court was whether the external affairs power could be exercised to prevent construction of the dam.

HELD: the National Parks and Wildlife Act 1975 and the World Heritage Properties Conservation Act 1983 were authorised by s 51(xxix) as the existence of an international treaty was sufficient to attract the power. The World Heritage (Western Tasmanian Wilderness) Regulations 1983 were invalid as they went beyond what were reasonable and appropriate measures to implement the Convention.

“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” : per Mason J.

“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 reasonable proportionality between the designated purpose or object and the means which the law embodies for achieving or procuring it”: per Deane J.

Further, the corporations power in s 51(xx) extended to authorise the Cth Parliament to regulate the construction of the dam, as the Hydro-Electric Commission was a trading corporation, engaged in work undertaken for the purposes of its trading activities.

Richardson v. Forestry Commission (Tas) (1988) : The Lemonthyme and Southern Forests (Commission of Inquiry) Act 1987

(Cth) established a Commission of Inquiry into whether two areas in Tasmania were eligible for listing as World Heritage areas.

The Act imposed a twelve month prohibition on forestry operations or any act capable of adversely affecting the areas, except with the written consent of the Minister.

In determining whether or not to give consent, the Minister was only to have regard to Australia’s obligations under the Convention for the Protection of the World Cultural and Natural Heritage.

Richardson, the Federal Minister responsible for the Act, sought injunctions to restrain the Tasmanian Forestry Commission and a private company, which harvested and milled timber in the areas, from acting in contravention of the Act.

The defendants argued that the external affairs power could not support the Act as there was no obligation to protect a particular area unless and until it was identified and delineated as a part of the natural heritage. Mason CJ granted interlocutory injunctions and reserved the question whether the Act and the Inquiry were a valid exercise of the external affairs power in s 51(xxix).

HELD : the Act and the Inquiry were valid. The taking of action by way of interim protection by prohibiting destruction or damage to property under consideration for inclusion in the World Heritage List was supported as action considered reasonably appropriate and adapted to the attainment of the Convention’s objects.

“The power extends to support a law required to discharge a 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. In making provision for the establishment of the Commission of Inquiry and for the regime of interim protection of the Protected area, Parliament has made a legislative judgment about the situation and the Convention obligation that may be proved to exist. It is not for us to impugn the bona fides of that judgment. It is enough that the legislative judgment could reasonably be made or that there is a reasonable basis for making it” : per Mason CJ and Brennan J.

Today, the wide view is the accepted interpretation of s 51(xxix) qualified by two points : i.) The Cth entry into the treaty must be bona fide (ie. not colourable, not entered into by the Cth for ulterior motives in gaining extra power over the States).

ii.) The legislation implementing the treaty must be capable of being seen as reasonably adapted and appropriate in giving effect to the object of the treaty. - “a faithful pursuit of the purpose of the convention” : per Dixon J in R v. Burgess; ex parte Henry (1936). - “substantial compliance; well adapted and appropriate” : per Barwick CJ in

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- “capable of being reasonably considered appropriate and adapted” : Tas Dams Case.

iii.) The implementation of a treaty is confined to its obligations. But the law need no implement all the treaty’s obligations.

Industrial Relations Act Case (1996) : Terms of the convention need not be too precise. Proportionality restates requirement of conformity. Partial implementation of treaty obligations valid provided that the Cth does

not change the character of the obligations.

b.) Laws (on their face) dealing with Foreign RelationsAlthough, agreeing to become a party to and implementing international conventions or treaties play an important role in our relations with other nations, this aspect of the power extends beyond that field.

i.) extradition of fugitive offendersii.) exclusion or deportation of aliensiii.) prevention of sedition against a Govt of a sister dominion

c.) Laws on matters of international concernThe external affairs power enables the Cth to enact legislation on matters which, although not the subject of treaty obligations, are the subject of international discussion by international bodies, or between governments, or included in treaty provisions.

In the most recent case on s 51(xxix), the Industrial Relations Act Case, legislation was upheld which gave effect to recommendations of the ILO. The obiter view of Evatt and McTiernan JJ in R v. Burgess; ex parte Henry was expressly followed.

Corporations Power s. 51 (xx)

Section 51(xx) confers on the Cth Parliament the power to make laws with respect to :

“Foreign corporations, and trading or financial corporations formed within the limits of the Cth.”

There are 3 basic issues which arise in interpreting s 51(xx) : 1. What characterises a corporation as “trading or financial”?

2. To what extent does the power enable the regulation of s 51(xx) corporations?

3. Does the power extend to the incorporation and/or winding up of s 51(xx) corporations?

1. Characterising a corporation as “trading or financial” : Unlike the general description of “foreign corporations” which covers all corporations formed outside Australia, the power is restricted in relation to corporations formed within Australia to trading and financial corporations.

There are two points to consider : (a) What amounts to trading and financial activities? any activity that creates a profit.

(b) On what basis is a corporation a trading or financial corporation? Two approaches have been adopted by the HC.

- the Purposes Test (narrow view - more power to States) : the corporation must have been incorporated for trading or financial purposes :

R v. The Trade Practices Tribunal; ex parte St George County Council (1974) : Corporations power - identification of trading corporation; the Restrictive Trade Practices Act 1971 (Cth) prohibited attempts to

monopolise the trade in any community by foreign or trading corporations. St George County Council was supplying electricity and electrical

appliances to consumers at the lowest possible price. It was prosecuted for engaging in monopolisation. The Council argued that as it was established under the Local Govt Act

1919 (NSW), it was not a trading corporation, but rather a local govt corporation.

HELD : the Council was not a trading corporation within s 51(xx). A trading corporation was to be recognised from its basic charter; for example, a trading corporation was one which had been incorporated for the purpose of trading. The Council, being established to fulfil the function of local govt was not a trading corporation. (NB. no longer regarded as good law).

- the Current Activities Test (broad view - centralist) : the corporation’s current activities must be “substantially” trading or financial (appears to be preferred by the HC) :

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R v. Judges of the Federal Court of Australia and Adamson; ex parte WANFL (1979) : Adamson’s Case : corporations power - identification of trading corporations; The WANFL and the West Perth Football Club were incorporated under the

Associations Incorporation Act 1895 (WA). Similarly, the SANFL was incorporated under the equivalent SA legislation. Each of these Acts excluded from the definition, “associations formed for

the purpose of trading or securing pecuniary profit”. The Leagues Club promoted football competitions. Large revenues were generated from the gate receipts, broadcasting rights

and the like. The revenue generated was not distributed to the members of the

association, but used for promotion. The TPA 1974 (Cth) prohibited any trading or financial corporation from

entering into contracts or agreements to restrict the supply of services or to substantially lessen competition.

Adamson was a professional footballer employed by the West Perth Club. He was refused a clearance to play in the SA competition, and brought an

action against the Leagues and the Club alleging a breach of the TPA. The Leagues and Club argued that they were not trading corporations. HELD : due to their substantial commercial activities, the Leagues and the

Club were trading corporations within s 51(xx) and therefore were subject to the TPA.

“A corporation formed within the limits of Aust will satisfy the description ‘trading corporation’ if trading is a substantial corporate activity. Its activities rather than the purpose of its incorporation will designate its relevant character” : per Barwick CJ.

State Superannuation Board of Victoria v. Trade Practices Commission (1983) : Corporations power - identification of financial corporations; The State Superannuation Board was established by the Superannuation Act

1925 (Vic) for the administration of a superannuation fund for Vic Govt employees.

In administering the fund, the Board was required to enter into investment activities.

The Trade Practices Commission sought information from the Board in relation to an allegation of exclusive dealing.

The Board applied to the Federal Court for a declaration that it was not a trading or financial corporation for the purposes of the TPA 1974 (Cth) or s 51(xx).

HELD : the Board was a financial corporation as its investment activities formed a substantial part of its overall activities.

“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 term ‘financial corporation’ does no more than describe a corporation which engages in financial activities or perhaps is intended to do so” : per Mason, Murphy and Deane JJ.

The Current Activities Test is now regarded as the appropriate test although the court may still have regard to the purposes for which the corporation was formed, especially in the case of shelf companies which have not yet begun to trade.

Fencott v. Muller (1983) : Corporations power - test for trading and financial corporations; Muller commenced proceedings in the Federal Court seeking damages under

the TPA 1974 (Cth) as a result of misleading and deceptive conduct alleged to have induced the purchase of a business from Fencott.

The misrepresentations were made by an employee of the business broker instructed to negotiate the sale of the business by Fencott.

Fencott had previously conducted the business through Scrid Nominees PL, but immediately prior to the transfer of business, Oakland Nominees PL was substituted as trustee of the unit trust conducting the business.

Oakland had been a shelf company prior to its appointment, never having engaged in trading or financial activities although it had wide powers to do so.

Its sole function was to wind up the trust. Oakland and one of its agents were also joined in the action by Muller. Oakland objected to the jurisdiction of the Federal Court on the basis that it

was not a trading or financial corporation within s 51(xx). The defendant individuals argued that it was beyond the power of the Cth to

create a right to recover damages against a natural person in respect of a contravention by a corporation.

HELD : although Oakland had not engaged in any activities, its character as a trading corporation was established by the objects disclosed in its

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memorandum and articles. As a corporation acts through natural persons, the corporations power extends to enable the imposition of duties on natural persons in order to deter conduct which facilitates a breach by a corporation of duties validly imposed on the corporation and to make effective the sanctions directed at the corporation.

The difficulty with the current activities test is whether the trading or financial activities must be the primary and predominant activity, a substantial activity or merely a significant activity.

2. Extent of the power to regulate s 51(xx) corporations : Originally in 1909, a very restricted view was taken in Huddart Parker & Co PL v. Moorehead where regulation was permitted only with respect to the status, capacity and the conditions on which business is permitted.

This interpretation was rejected to enable the regulation of at least the trading activities of trading corporations:

Strickland v. Rocla Concrete Pipes Ltd (1971) : Corporations power - extent of power to regulate corporate activities; The Trade Practices Act 1965 (Cth) provided that certain agreements with a

foreign corporation or a trading or financial corporation were examinable. The parties to such agreements were obliged to furnish particulars of the

agreement to the Commissioner of Trade Practices. The respondent was a company which entered into an agreement allegedly

designed to reduce competition between manufacturers of concrete pipes. The respondent was charged with failing to provide details of the agreement. The Cth Industrial Court dismissed the charge on the basis that the Act was

not a valid exercise of the corporations power. HELD : laws regulating and controlling the trading activities of trading

corporations are within the scope of s 51(xx). However, although the Cth had the power to legislate to control the anti-competitive activities of the corporations listed in s 51(xx), the Act in purporting to deal with certain kinds of agreements at large, which were not limited to corporate persons, interstate trade or commerce or Territories was beyond Cth power.

Actors and Announcers Equity Assoc of Aust v. Fontana Films PL (1982) : Corporations power - regulation of natural persons; Fontana Films produced motion pictures and employed actors to do so. Actors Equity, a trade union, demanded that Fontana agree to only employ

union members.

When Fontana refused to agree, the union declared that no member of the union would work for Fontana and exerted pressure on theatrical agents not to supply actors to Fontana.

Fontana was then forced to cease production of all films due to its failure to obtain actors.

Fontana commenced proceedings seeking an injunction pursuant to the TPA 1974 (Cth), to restrain the union from hindering or preventing the supply of actors by theatrical agents.

The question for the court was whether the prohibition on secondary boycotts in s 45D(1) of the TPA was a law with respect to trading corporations.

Secondly, the court was also asked to pronounce on the validity of s 45D(5) of the Act which deemed the conduct of union officials to be the conduct of the union.

HELD : s 45D(1) of the Act was a valid exercise of the power in s 51(xx) as it protected the trading activities of trading corporations. The deeming provision in s 45D(5) was invalid as it was properly characterised as a law with respect to trade unions, not trading corporations.

“It does not follow that s 51(xx) empowers the Parl to pass a law prohibiting any conduct that might damage a trading corporation formed within the limits of the Cth. 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” : per Gibbs CJ.

The most important recent decision on this aspect of the power is the Tasmanian Dam Case where at least three different views were expressed that s 51(xx) authorised the regulation of:

(i) wide view : all activities of s 51(xx) corporations (ii) middle view : at least all activities of trading corporations done for the purposes of their trading activities (Gibbs and Brennan JJ) this is the ratio of Tas Dams. (iii) narrow view : only those activities where the nature of the corporation as a trading or financial corporation is significant in the way the law operates in relation to those activities (Dawson and Wilson JJ).

3. Whether the power extends to the incorporation and/or winding up of s 51(xx) corporations : Appears to include no power of incorporation:

NSW v. Cth (1990) :

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The Corporations Act Case : corporations power - no power to control incorporation of companies; The Corporations Act 1989 (Cth) provided for the incorporation of

companies by the Aust Securities Commission, a statutory authority established by the Aust Securities Commission Act 1989 (Cth).

The question for the court was whether s 51(xx) authorised the Cth to regulate the incorporation of trading and financial corporations.

The Cth contended that the words ‘formed within the limits of the Cth’ served merely to distinguish local trading and financial corporations from foreign corporations.

HELD : the power in s 51(xx) being in respect of ‘formed corporations’, excludes the process of incorporation itself. Further, the implied incidental power was not sufficient to expand the power over existing corporations into a power to form corporations.

“The word ‘formed’ is a past principle used adjectivally and the participial phrase ‘formed within the limits of the Cth’ is used to describe corporations which have been or shall have been created in Aust. (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 Cth’ exclude the process of incorporation itself” : per Mason CJ, Brennan, Dawson, Toohey, Gaudron and McHugh JJ.

The position as to winding-up is unclear.

Compulsory Acquisition Power s. 51(xxxi)

Section 51(xxxi) confers on the Cth Parliament the power to make laws with respect to :

“The acquisition of property on just terms from any State or person for any purpose in respect of which the Parliament has power to make laws.”

Section 51(xxxi) has a two-fold purpose: 1.) To provide the sole source of legislative power to compulsorily acquire property; and2.) To restrict this power by requiring the payment of just terms.

A number of special cases of compulsory acquisition fall outside s 51(xxxi) : 1.) The nature of the power precludes just terms

a. Forms of taxation: Australian Tape Manufacturers Association Ltd v. Cth (1993): The Blank Tape Royalty Case Cth legislation amendments to the Copyright Act attempted to overcome the

problem of people buying blank audio cassettes and recording onto them from cd’s, radio, etc. thereby breaching copyrights and leading to a loss of royalties for recording artists.

The amendments required vendors of audio cassettes to pay a royalty to a collecting society on each tape sold or distributed.

The Aust Tape Manufacturers Assoc sought a declaration that the Act was invalid on several grounds.

One such ground was that the royalty scheme amounted to an acquisition of property other than on just terms as required by s 51(xxxi).

HELD: the royalties were taxes and as a result there was no acquisition of property in contravention of s 51(xxxi).

b. Penalties for Cth offences: TPC v. Tooth (1979) : Tooth was a brewer and owner of licensed hotels in NSW. A standard clause in the lease of the hotels to tenants required tenants not to

purchase alcohol from any person other than Tooth. TPA (Cth) s 47 prohibited a corporation from engaging in exclusive dealing,

which was defined to include a refusal to renew a lease of land for the reason that the tenant conducted business with a competitor of the corporation.

Tooth sought a declaration that it was not obliged to comply with the TPA (Cth).

Tooth argued that the provisions compelled it to renew a lease on terms that might not be just, thereby breaching s 51(xxxi) as the lessee acquired a proprietary right on unjust terms.

HELD: the TPA (Cth) provision was not a law with respect to the acquisition of property and therefore s 51(xxxi) was irrelevant.

c. Forfeiture of property to the Crown: Re DPP; ex parte Lawler (1994): Lawler owned a fishing vessel registered in NZ. He entered into an agreement to sell the vessel, the purchase price to be paid

by way of instalments.

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The purchasers of the vessel were subsequently charged with using a foreign fishing boat for commercial fishing within the Australian Fishing Zone contrary to the Fisheries Management Act 1991 (Cth).

The purchasers terminated the agreement and Lawler, who had been unaware of the use of the boat in the AFZ, sought its return.

The magistrate ordered the boat to be confiscated. Lawler argued that the Act in authorising an order of forfeiture was an

acquisition of property other than on just terms and infringed s 51(xxxi). HELD: the power to authorise the forfeiture of equipment used in the

commission of a fisheries offence was a valid exercise of the fisheries power in s 51(x). As the law was characterised as an exercise of the power in s 51(x), it was not a law with respect to the acquisition of property in s 51(xxxi).

d. Possibly acquisition by the Executive pursuant to its Crown prerogative powers

e. S 96 grants to the States for the States to compulsorily acquire property.

2.) A law which resolves competing claims : Mutual Pools & Staff PL v. Cth (1994) : MP carried on the business of constructing in-ground swimming pools. It had previously obtained a declaration that a tax upon the construction of

in-ground swimming pools was valid under s 55. Prior to judgment being delivered, the Swimming Pool and Spa Association,

of which the company was a member, made an agreement with the Federal Commissioner of Taxation that its members would pay the tax but that if the challenge was successful, all amounts paid would be refunded with interest.

Following the judgment, the Parliament enacted legislation which limited the liability of the Cth to make any repayment, except to the owner of the pool.

The company requested repayment of a sum after it had refunded the amount to the purchase of a pool.

The Cth refused. The company sought a declaration that the Cth legislation was invalid as a

breach of s 51(xxxi). HELD : the legislation was a valid exercise of the taxation power in s 51(ii)

or of s 51(xxxi) together with s 61 and as it was not properly characterised as a law with respect to the acquisition of property, it was not within s 51(xxxi).

“The effect of s 51(xxxi)’s express conferral upon the parliament of the power to make certain laws with respect to the acquisition of property subject to the safeguard of just terms is that the legislative power to make such laws without the safeguard is presumed to be excluded or abstracted from other grants of legislative power contained in s 51” : per Deane and Gaudron JJ.

3.) Extinguishment or modification of a mere statutory right Health Insurance Commissioner v. Peverill (1994) : Dr Peverill bulk-billed rubella tests. Dr P expected refund from this levy under medicare. Cth Parl enacted legislation for set amount of refund at a level less than Dr P

expected. Dr P argued that this was invalid under s 51(xxxi). HELD : challenge failed because no acquisition of property and because this

was the extinguishment of a mere statutory right.

The four basic elements of this power are : (i) “acquisition”

- must be compulsory; - by the Cth or by some person or body authorised by the Cth.

(ii) “purpose” - must be a purpose in respect of which Parliament has the power to

make law. - it is unclear whether the Cth itself must actually use the acquired

property.

(iii) “property” - conventional estates and interests recognised at law; and, - includes exclusive possession, control and/or interest of any subject

of property.

(iv) “just terms” - if the Cth law does not provide for compensation, a court may imply a requirement to pay on just terms. - if the Cth law provides unjust terms, then the law is invalid. - the court will take into account a number of factors in determining whether “just terms” are provided :

- common law principles of compensation.

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- the practice of other legislatures. - the reasonable man test. - the interests of the community.

Commonwealth Acquired Places s. 52(i)

Section 52(i) vests in the Cth Parl the “exclusive power to make laws for the peace, order, and good government of the Cth with respect to the seat of govt of the Cth, and all places acquired by the Cth for public purposes.”

1. Place : - any area of the earth’s surface; ie land, per Barwick CJ in Worthing v.

Rowell (1969). - therefore it does not include chattels.

2. Acquired : - this covers any means of acquisition, whether by way of purchase,

gift, compulsory acquisition or transfer from a State pursuant to s 69 (transfer of certain departments following Federation).

3. Public purpose : - not limited to purposes in respect of which Parl has power to make

laws; that restriction only applies to compulsory acquisition under s 51(xxxi). - the public purpose must exist at the time of acquisition but need not

continue.

Central issue : does State law continue to apply to a Cth place located within a State?Now regulated by the Cth Places (Application of Laws) Act 1970 (Cth) which applies State law to the extent it is not inconsistent with Cth law. The Constitutional position depends on when the State legislation was enacted relative to the acquisition of the place by the Cth under s 52(i) : a.) pre-Federation State law continues to apply : R v. Bamford (1901). b.) State law enacted AFTER the Cth acquires the place does NOT apply : Worthing v. Rowell (1969). c.) State law enacted BEFORE the Cth acquires the place does NOT apply : R v. Phillips (1970).

Characterising a State law to determine whether it purports to be a law with respect to a Cth place :

Such a State law is outside the legislative capacity of the States being a power made exclusive to the Cth under s 52(i).

Allders International PL v. Commissioner of State Revenue (1996) : Allders rented a shop from the Cth at the Tullamarine Airport (a Cth place). Vic legislation imposed a tax on all shopkeepers, including Allders. Allders challenged the validity of the tax under s 52(i). HELD : Allders successful. Vic State Govt cannot impose a tax upon a Cth

place.

Topic 4 - Judiciary

Doctrine of Separation of Powers :

Historically there has always been a separation between the three branches of government. Therefore between the institutions, functions and personnel of each branch. The Constitution itself strictly separates these three institutions :

- Ch I : legislature. - Ch II : executive. - Ch III : judiciary.

In Australia, there is a fairly strict separation between judicial and non-judicial.

Definition of judicial power : Judicial power is essentially dispute resolution by reference to existing rights. By contrast, legislative power essentially creates new rights. FedLevel : A. Separation of Legislative and Executive Power : There is no strict separation of either powers or personnel of the legislative and executive branches.

Victorian Stevedoring and General Contracting Co PL v. Dignan (1931) : Dignan’s Case : separation of powers - separation of legislature from executive; The Transport Workers Act 1928 (Cth) authorised the GG to make

Regulations, not inconsistent with the Act, with respect to the employment of transport workers, and in particular for regulating their engagement, service and discharge.

The GG made the Waterside Employment Regulations which required that priority be given to members of the Waterside Workers’ Federation when hiring new workers.

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The Act did not make any reference to such priority. Vic Stevedoring was prosecuted by Dignan, a Navigation Dept Inspector for

employing a worker not a member of the Federation. The company appealed against the conviction on the basis that the

Regulations were invalid. It argued that the provision in the Act authorising the GG to make

regulations was an attempt to grant to the Executive a portion of the legislative power vested in the Parl by s 61 and therefore infringing the doctrine of the separation of powers.

HELD : the company failed. The Cth Parl could validly delegate a subordinate and dependent law making power to the Executive govt without infringing the principle of the separation of powers in s 61. Accordingly, the Regulations were a valid exercise of the trade and commerce power in s 51(i).

“The existence in Parl of power to authorise subordinate legislation may be ascribed to a conception of that legislative power which depends less upon juristic analysis and perhaps more upon the history and usages of British legislation and the theories of English law” : per Dixon J.

The power of the Cth Parl to delegate a law making power to the Executive is subject to two limitations :

(i) the power delegated cannot be so wide or uncertain that it is incapable of being characterised as a law with respect to one of the Cth heads of legislative power; and

(ii) the Parl must retain ultimate control over the delegation.

Giris PL v. Federal Commissioner of Taxation (1969) : Legislative power of the Cth - delegation of discretion; The Income Tax Assessment Act 1936 (Cth) provided that unless the

Commissioner of Taxation was satisfied that it was unreasonable, the income earned by a trust was to be assessed at a higher rate than income earned by individuals.

Giris PL was a trustee of income producing property and objected to the Commissioner allowing the automatic assessment of the trust’s income to stand.

The company argued that the provision in conferring power upon the Commissioner to exercise a complete discretion constituted an abdication of power by Parl.

HELD : the company failed. Parl had delegated a discretion which was subject to judicial review for excessive exercises of that discretion. The delegation was not so complete as to constitute an abdication of legislative power.

B. Separation of Judicial Power and Non-judicial Power (ie Legislative and Executive Power) :

(i) Judicial power can only be vested in s 71 Courts :

NSW v. Cth (1915) : The Wheat Case : separation of powers - judicial power of the Cth; The Inter-State Commission, as provided for in s 101, investigated a seizure

of wheat, in the course of interstate trade, by the NSW Govt under the Wheat Acquisition Act 1914 (NSW).

The Inter-State Commission Act 1912 (Cth) declared the commission to be a ‘Court of record’ which could hear and determine any complaint or grant any relief.

The commission held that the NSW Govt’s actions were in breach of s 92. It issued an injunction to restrain any further interference in the interstate

movement of wheat. NSW appealed against the decision on the basis that the Inter-State

Commission did not have jurisdiction to grant the injunction. The question for the court was whether the Inter-State Commission could

exercise the judicial power of the Cth. HELD : the judicial power of the Cth could only be entrusted to the courts.

As the Inter-State Commission did not fall within either class of court in s 71, it could not exercise judicial power and did not have jurisdiction to determine the complaint and issue an injunction. The Inter-State Commission Act was similarly invalid.

Brandy v. Human Rights and Equal Opportunity Commission (1995) : Judicial power of the Cth - only to be exercised by court; Bell lodged a complaint against Brandy and ATSIC under the Racial

Discrimination Act 1975 (Cth). The HREO Commission was empowered by that Act to hear the complaint

and make a determination. The HREO Commission found that the complaint was substantiated and

ordered Brandy and ATSIC to apologise and pay damages to Bell.

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The determination alone was not binding. The Commission was obliged to register it with the Federal Court whereupon it had the effect of an order of that Court.

Brandy challenged the constitutional validity of the determination on the basis that the Commission, which was not a s 71 court, had been vested with judicial power in breach of the doctrine of separation of powers.

HELD : Brandy’s challenge was unanimously upheld by the HC. As the provisions of the Act combined to make a determination of the HREO Commission binding, authoritative and enforceable, those provisions purported to invest the Commission with the judicial power of the Cth. This was constitutionally impermissible because the Commission was not constituted in accordance with ss 71 and 72.

“An order which takes effect as an exercise of judicial power cannot be made except after the making of a judicial determination. Thus [the Act] purports to prescribe what the Constitution does not permit” : per Mason CJ, Brennan and Toohey JJ.

(ii) Non-judicial power cannot be vested in s 71 Courts :

R v. Kirby; Ex parte Boilermakers’ Society of Australia (1956) : The Boilermakers’ Case : separation of powers - judicial power to be exercised by courts; The Cth Court of Conciliation and Arbitration exercised s 51(xxxv)

resolutions of industrial disputes. The Court was a s 71 court and empowered to issue awards and enforce

those awards. HELD : issuing awards was a legislative power because it was creating new

rights. The enforcement of those awards was a judicial power and therefore the only valid power of that Court because it was enforcing existing rights.

“In a federal system, the absolute independence of the judiciary is the bulwark of the Constitution against encroachment whether by the executive or the legislature” : Viscount Simonds (PC).

(iii) Erosion of the Boilermakers’ Principle : Criticism of the Principle or “Persona Designata” rules : a. personal appointment of federal judges to non-judicial tribunals allowed. Drake v. Minister for Immigration and Ethnic Affairs (1979).

b. conferral of non-judicial power on federal judges in their personal capacity allowed.

Hilton v. Wells (1985) : judicial power of the Cth - exercise by particular persons; The Telecommunications (Interception) Act 1979 (Cth) prohibited the

interception of communications made to or from a telecommunications service except pursuant to a warrant authorised by a judge of the Federal Court.

Two Federal Court judges issued six warrants to Wells, a member of the Aust Federal Police, for the interception and recording of telephone conversations involving Hilton.

As a result of evidence obtained from the ‘taps’, Hilton was charged with conspiring to bribe a State Minister.

Hilton sought an order quashing the warrants on the basis that it was unconstitutional for the Federal Court to be vested with the power to issue warrants, an acknowledged administrative function.

HELD : the Act appointed judges as a designated group of persons to exercise the power, not the Federal Court. Accordingly, the principle of separation of powers was not infringed.

“Although the Parl cannot confer non-judicial powers on a federal court, or invest a State court with a non-judicial power, there is no necessary constitutional impediment which prevents it from conferring non-judicial power on a particular individual who happens to be a member of the court” : per Gibbs CJ, Wilson and Dawson JJ.

The recent HC decisions in Grollo v. Palmer (1995) and Wilson v. Minister for Aboriginal and TSI Affairs (1996) have established a qualification to these two decisions : the personal appointment and the conferral of power in a personal capacity cannot be incompatible with the exercise of judicial power.

Grollo v. Palmer (1995) : same facts as Hilton v. Wells above; ie an interception warrant was issued by

federal court justices against Grollo. HELD : the HC upheld Hilton v. Wells.

Wilson v. Minister for Abor and Torres Strait Islander Affairs (1996) : separation of powers - independence of judiciary from executive; Concerned the Hindmarsh Bridge. The Aboriginal and TSI Heritage Protection Act 1984 (Cth) vested power in

the Minister to nominate persons to submit reports to the Minister. The Minister nominated a Federal Court judge, Justice Matthews, to prepare

a report as an individual, not in her capacity as a judge.

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The plaintiffs sought a declaration that the nomination of Justice Matthews and her acceptance of that nomination were incompatible with her commission as a judge of the Federal Court.

It was accepted that no judicial power had been conferred upon the judge. The issue for the HC was whether the performance of the function of

reporting to the minister was a function that was constitutionally compatible with the holding of office as a judge appointed under Ch III of the Constitution.

HELD : the function of preparing a report was an integral part of the process of the minister’s exercise of power, and put the judge in the position of an adviser to the minister and required the judge to make decisions that were of a political character. The function was therefore constitutionally incompatible with Ch III. Further, as a person preparing a report under the Act is required to advise the minister on questions of law, the judge would have been required to provide advisory opinions to the minister which was also inconsistent with Ch III.

“Where a non-judicial power is purportedly conferred, constitutional incompatibility is ascertained by reference to the function that has to be performed to exercise the power” : Brennan CJ, Dawson, Toohey, McHugh and Gummow JJ.

State Level : In at least three States, their courts have held that the doctrine of separation of powers does not apply.

In the recent HC decision in Kable v. DPP (NSW) (1996) a majority held that the separation of judicial and non-judicial power required under the Cth Constitution imposed a limit on State legislative power. It was impermissible for the NSW Parl to vest a non-judicial power in the State Supreme Court which would be incompatible with the exercise by that Court of federal judicial power previously vested in that Court.

Kable v. DPP (NSW) (1996) : Judicial power of the Cth - exercise of non-judicial power by State court; The Community Protection Act 1994 (NSW) empowered the Supreme Court

to provide preventative detention of Gregory Wayne Kable, if the court was satisfied that he was more likely than not to commit a serious act of violence.

Kable challenged the validity of the Act because : (i) separation of powers at State level; and

(ii) the assertion that Ch III of the Constitution impliedly prevents the Parl of a State from conferring powers on the Supreme Court of that State which are repugnant to or inconsistent with the exercise by it of the judicial power of the Cth. HELD : (i) there is no legal principle in NSW of doctrine of separation of

powers because there is no provision in the NSW Constitution equivalent to s 71 of the Cth Constitution.

(ii) because the State courts are an integral part of the judicial system set up by Ch III, it also follows that no State or federal Parl can legislate in a way that might undermine the role of those courts as repositories of federal judicial power. The NSW Supreme Court was a Ch III court vested with federal jurisdiction in certain matters. Consequently, even though the Act was NSW legislation, it was incompatible with the exercise of Cth judicial power, and therefore invalid.

Parliament usurping the judicial process : Parl usurps the judicial process when it purports to exercise judicial power or to interfere in the judicial process.

Only if the doctrine of separation of powers applies, is Parl precluded from usurping the judicial process. Accordingly, the Cth Parl cannot usurp the judicial process, whilst the State Parls can.

Examples of usurping the judicial process :

(i) a Bill of Attainder (an Act that adjudges the guilt of a specific individual(s) and imposes punishment). Polyukhovich v. Cth (1991) : The War Crimes Act 1945 (Cth) provided that any person who committed a

war crime in Europe during WW2 was guilty of an indictable offence. Polyukhovich was charged under the Act and he challenged it’s validity

under the Constitution. HELD : the Act was not a Bill of Attainder because it did not establish guilt

of an individual, that was yet to be proven. The Act merely established a criminal law which operated retrospectively (ex post facto) and therefore was not a Bill of Attainder. NB it was held that the Cth cannot enact Bills of Attainder.

(ii) a law which interferes in the Judicial Process. Liyanage v. The Queen [1967] PC :

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In Sri Lanka, special retrospective legislation was passed which only applied to those charged in relation to a coup d’etat.

The Act redefined the relevant offences and penalties, special trials were held by three judges, normally inadmissible evidence was allowed. In effect, all provisions were designed to find a guilty verdict.

HELD : if Parl issues a direction to the court in order to conduct it’s proceedings, this is an interference in the judicial process and therefore invalid. In order to avoid this, the legislation must have wider application.

BLF (NSW) Case (1986) : NSW legislation authorised the Govt to cancel registration of the NSW

Branch of the BLF. One week before the judicial proceedings, the NSW Parl enacted s 3 of the

Act which was drafted in such a way as to direct the court in its proceedings. HELD : the NSW Parl had interfered in the judicial process of NSW Courts.

This would have been invalid BUT, there is no doctrine of separation of powers at the State level, therefore the Act was valid.

(iii) But not a law which interferes with substantive rights. BLF v. Cth (1986) : legislation was drafted more generally and therefore did not constitute an

interference with the judicial process.

Judicial Independence :

Threats to judicial independence : - manipulation in the appointment process. - threat of or actual dismissals. - manipulation of decisions of judges. - involvement in controversial political issues. - manipulation of law list. - abolishment of courts. - transfer of jurisdiction of court. - inadequate funding for staff. - inadequacy of judicial salary. - public denigration of court.

There are four constitutional mechanisms which are designed to protect judicial independence :

1. Security of tenure. i. Historical background :

- Act of Settlement 1701 s. III judges appointed “during good behaviour”; removal by crown on an address from both houses.

ii. Appointment of judges : - the GG in Council (ie. Executive) appoints judges in Australia. - 1977 Referendum HC judges must retire at 70 years of age.

iii. Removal of judges : - Cth s 72(ii) : by GG in Council on an address from both houses on the grounds of proved misbehaviour or incapacity.

eg. Lionel Murphy : previously Foreign Minister in Whitlam Govt and appointed to HC bench. A conversation between Murphy and Chief Stipendiary Magistrate was

taped. A friend of Murphy’s was to appear the next day in front of the Magistrate. Murphy asked : “What about my mate?” Parliamentary Commission of Inquiry Act 1986 (Cth) was enacted to deliver

a report on Murphy, written by three former justices. Murphy died of cancer before any action was taken. Sir George Lush in Murphy Report : “proved misbehaviour is conduct which

shows the judge to be unfit for office or which tends to undermine the judge’s authority or public confidence in the court.”

- Qld s 16 of the Qld Constitution : by Governor on an address from Legislative Assembly on any ground; OR s 8 of the Supreme Court Act (Qld) 1867 : by forfeiture proceedings in the Supreme Court.

2. Contempt of court. May be defined as conduct which challenges, denies or interferes with judicial authority and impedes the administration of justice.

3. Judicial immunity.

4. Doctrine of separation of powers. This topic covered above.

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Topic 5 - Express Restrictions on Power

Inconsistency of laws - (s 109) :

s 109 : “When a law of a State is inconsistent with a law of the Cth, the latter shall prevail, and the former shall, to the extent of the inconsistency, be invalid.”

Three basic issues in application :

i. The meaning of ‘law’ : The essential prerequisite to the operation of s 109 is that there be a valid Cth law and a valid State law. For the purposes of s 109, the Cth and State laws may be any of the following :

- Acts of Parl. - Regulations. - State or Federal Industrial Awards (technically these are not laws, but

in effect, they are). - A Ministerial Order pursuant to an Act of Parl. - Rules of Industrial Organisations sanctioned by Act of Parl. - Title to land. - Common law.

ii. The meaning of ‘to the extent of the inconsistency be invalid’ : Despite the reference to ‘invalid’, an inconsistent State law is not rendered void by s 109, rather it simply becomes inoperative for the period the inconsistency exists.

Only those provisions of the State law which are inconsistent with the Cth law become inoperative, unless severance is not possible.

iii. The meaning of ‘inconsistency’ : Inconsistency between Cth and State laws may be either direct or indirect.

DIRECT inconsistency may arise in three ways : 1.) When it is impossible to obey both laws.

R v. Brisbane Licensing Court; ex parte Daniell (1920) : Qld Act required a referendum to be held on the same date of the next

Federal Senate Election.

Cth Act prohibited the above proposition. HELD : Cth law overrode Qld Act.

2.) When one law permits that which the other law prohibits.

Colvin v. Bradley Bros PL (1943) : Cth federal award allowed women to be employed on milling machines. NSW Act prohibited the above proposition. HELD : the State Act was directly inconsistent with the federal award as it

prohibited the activity allowed by the award. “S 109 applies wherever there is an inconsistency between a State law and a

Cth law, or between orders and awards made under such laws. If the Cth law is valid it prevails over any State law which is inconsistent with it, even though that State law may have been made as part of a legislative scheme which the Cth Parl could not have enacted in all its parts” : per Latham CJ.

3.) When the Cth imposes an obligation or confers a right and the State modifies it.

Clyde Engineering v. Cowburn (1926) : NSW Act provided that a worker’s ordinary hours should not exceed 44

hours per week. A federal award made by the Cth Court of Conciliation and Arbitration

provided that a worker’s ordinary hours should not exceed 48 hours per week.

HELD : the NSW Act attempted to alter the terms of the federal award because it was inconsistent with it. Accordingly, the State Act was invalid under s 109.

“Two enactments may be inconsistent, although obedience to each of them may be possible with the other. Statutes may do more than impose duties; they may for instance, confer rights; and one statute is inconsistent with another when it takes away a right conferred by that other even though the right be one which might be waived or abandoned without disobeying the statute which conferred it” : per Knox CJ and Duffy J.

INDIRECT inconsistency may arise where the Cth attempts to ‘cover the field’ and State law trespasses upon that field. This is the more difficult form of inconsistency to determine because it requires consideration of three matters : 1.) Does the Cth law intend to cover the field?

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This intention may be expressed or implied. Three factors may indicate such an implied intention : the subject matter of the law, the comprehensive nature of its provision, and the need for uniformity in the law.

Wenn v. AG (Vic) (1948) : Inconsistency between Cth and State laws - intention to cover the field; Vic legislation provided that preference was to be given to ex-servicemen in

relation to hiring and promotion. Cth legislation also made provision for preference to be given to ex-

servicemen in relation to hiring but NOT promotion. The Vic AG argued that the Acts were not inconsistent because the Cth Act

did not make any reference to promotions. HELD : the Vic Act was inconsistent with the Cth Act, as the latter covered

the field of employment of ex-servicemen personnel. “In the Cth Act now under consideration, however, the Cth Parl has not left

this matter to be determined by inference (possibly disputably) from the nature and scope of the statute. The Parl has most expressly stated an intention which in the other cases mentioned was discovered only by a process of inference. If such parliamentary intention is effective when it is ascertained by inference only, there can be no reason why it should not be equally effective when the intention is expressly stated” : per Latham CJ.

Ex parte McLean (1930) : Inconsistency between Cth and State Laws - direct inconsistency; Cth legislation provided awards covering the shearing industry. McLean was a shearer who nipped too may sheep and was consequently

dismissed by his employer. The employer prosecuted McLean under NSW legislation which made it an

offence for an employee to neglect to fulfil a contract of employment. McLean raised s 109 because under Cth award there were penalties imposed

and initially he had been convicted under the State Act. The question for the court was whether the State Act was inconsistent with

the federal award within s 109. HELD : the State Act was inconsistent with the federal award as it dealt

directly with default in an industrial relationship which the federal law punished in a different manner.

“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 intention 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” : per Dixon J.

Ansett Transport Industries (Operations) PL v. Wardley (1980) : Inconsistency between Cth and State laws - no intention to cover the field; Vic legislation (the Equal Opportunity Act 1977) prohibited employers from

discriminating against any person on the ground of sex in making offers of employment.

The Act also authorised the Equal Opportunity Board to inquire into complaints made under the Act and to make orders for compliance.

The Board had ordered Ansett to employ Wardley as a pilot. Ansett claimed that the Act was inconsistent with a Cth Agreement, which

had the same force as a Cth award (the Airline Pilots Agreement 1978). The Agreement authorised an employer to dismiss a pilot by seven days’

notice in writing during the first six months of employment. Ansett argued that the Agreement gave it an unqualified right to dismiss its

pilots. The issue for the court was whether the Act was inconsistent with the

Agreement within s 109. HELD : the Vic legislation was not inconsistent with the Agreement, as the

Agreement did not cover the field, nor was there any direct collision. The provisions of the Agreement were intended to operate subject to the general law, which included the State Act.

“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 Vic community to a broad social policy concerned with the status of women in that community” : per Stephen J.

The Cth may indicate that it does not intend to cover the field in which case only if there is a direct inconsistency will s 109 apply.

McWaters v. Day (1990) : Inconsistency between Cth and State laws - no intention to cover the field; Day was a member of the Aust Regular Army stationed in Qld. He was involved in an accident while driving within the confines of the

barracks.

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He was subsequently charged by McWaters, a member of the Qld State Police, while driving under the influence of alcohol contrary to the Traffic Act 1949 (Qld).

The Magistrates Court was restrained by an order nisi for prohibition from proceeding on the charge on the ground that since Day was a member of the defence forces driving on service land, his behaviour was governed by the Defence Force Discipline Act 1982 (Cth).

Day claimed that the Traffic Act was inconsistent with the Cth Act within s 109, and was therefore invalid, as the two Acts imposed different penalties for the same offence.

HELD : there was no inconsistency between the two Acts as the federal Act was not intended to be an exhaustive statement of the criminal liability of defence force personnel.

“It is true that a difference in penalties prescribed for conduct prohibited by Cth and State laws has been held to give rise to inconsistency between those laws for the purposes of s 109... equally, a difference between the rules of conduct prescribed by Cth and State laws might give rise to such inconsistency. But the mere fact that such differences exist is insufficient to establish an inconsistency in the relevant sense. It is necessary to inquire whether the Cth statute, in prescribing the rule to be observed evinces an intention to cover the subject matter to the exclusion of any other law” : per Mason CJ, Brennan, Deane, Dawson, Toohey, Gaudron and McHugh JJ.

However, the Cth cannot give retrospective effect to such a declaration not to cover the field exclusively.

University of Wollongong v. Metwally (1984) : Inconsistency between Cth and State laws - retrospective validation ineffective; Metwally, a student of the University, made a complaint of racial

discrimination against the University under the relevant NSW legislation, in February 1982.

In May 1983, the HC declared the Act to be inconsistent, and therefore invalid, with the equivalent Cth legislation.

Following that decision, the Cth Parl amended that Cth legislation to expressly state that the Act did not intend to exclude the operation of State or Territory laws that furthered the objects of an International Convention on racial discrimination.

The NSW Anti-Discrimination Tribunal then held that Metwally’s complaint had been established and ordered the Uni to pay damages.

The University appealed on the basis that the State Act was still inconsistent with the Cth Act at the date of the alleged incident.

HELD : the State Act had been declared to be inconsistent and inoperative at the time when the alleged discrimination against Metwally occurred. The amendment did not operate to retrospectively validate the State Act as Cth Acts cannot override the Constitution.

“The fact that the Cth Parl legislates retrospectively to introduce the fiction that, for the purposes of the 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 that State law, nor for the period in which the Cth Parl, 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” : per Deane J.

2.) Which ‘field’ is covered?

3.) Has the State intruded on this field?

NSW v. Cth (1983) : Hospital Benefits Case - inconsistency between Cth and State laws - cover the field test; The National Health Act 1953 (Cth) provided for a scheme of contributory

health insurance, whereby private, non-profit hospital benefits organisations formed under State law could be registered to obtain substantial tax advantages.

Registration was dependent upon compliance with rules imposed by the Minister.

The Act required each organisation to establish a fund to which all income was credited and from which payments out were strictly limited to benefits for contributors and costs incurred in carrying on the business.

The Health Insurance Levies Act 1982 (NSW) and the Hospital Benefits (Levy) Act 1982 (Vic) each required that an organisation carrying on the business of providing hospital benefits should pay a levy calculated on the basis of the number of members.

Pursuant to s 73B(1) of the National Health Act, the Minister imposed a further condition that registered organisations not pay the monthly levies imposed by the State Acts.

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The issue for the court was whether the two State Acts were inconsistent with the National Health Act and whether that Act authorised the Minister to impose the conditions.

HELD : the State Acts were not inconsistent with the federal Act as there was no intention in that Act to exclude the operation of State laws. Further, s 73B(1) was limited to authorising further conditions relevant to the relationship between a registered organisation and its members.

“The subject with which the Act reveals an intention to deal exclusively or exhaustively is the relationship between the organisation and the contributor, particularly the nature and amount of the benefits to be provided to contributors and the purposes for which moneys in the fund may be applied. Not only does the Act not evince any intention to exclude all operation of State laws on registered organisations but it expressly recognises the continued operation of such laws and their capacity to make an impact on the fund” : per Gibbs CJ, Murphy and Wilson JJ.

Love v. AG (NSW) (1990) : Inconsistency between Cth and State laws - no intention to cover the field; Warrants were issued by the Supreme Court of NSW, authorising the use of

listening devices pursuant to the relevant NSW legislation. The devices were to be used in investigations conducted by the State and

Cth police, into alleged federal and State narcotics offences. The warrants were expressed to authorise the use of listening devices by a

named State police officer and on his behalf by named State and Cth officers.

Love was subsequently charged with offences under State law. During the committal proceedings, the Crown indicated that it would seek to

use evidence obtained by the use of the devices. Love objected to the tender of the tapes and claimed that the warrants were

invalid. The Customs Act 1901 (Cth) prohibited the use of listening devices by the

Federal Police for the purposes of narcotics inquiries unless used in accordance with a warrant issued by a Federal Court judge.

Love argued that the NSW Act was inconsistent with the Cth Act and was therefore invalid under s 109.

HELD : there was no inconsistency between the Customs Act and the NSW Act as the Customs Act was only intended to apply to the use of listening devices in the course of federal narcotics inquiries. Although the warrants issued under the State Act could be interpreted as purporting to authorise what would otherwise be a breach of the Customs Act, they should be

construed so as not to do what the State Act itself did not purport to do, namely, authorise a breach of the Customs Act.

Freedom of religion - (s 116) :

s 116 : Cth not to legislate in respect of religion - “The Cth shall not make any law for establishing any religion, or for any religious observance, or for prohibiting the free exercise of any religion, and no religious test shall be required as a qualification for any office or public trust under the Cth.”

What is a religion? The Church of the New Faith v. Commissioner for Pay-roll Tax (1983) : HELD : religion is a belief in the supernatural; an organisation with canons

of conduct or beliefs. Does not include the belief not to believe eg. Atheism.

This section acts only to restrict Cth power; and, it guarantees not to make laws in relation to four things :

i. No law for establishing any religion

It was stipulated in the DOGS case: that one can’t create national religion, but it was held that the law may indirectly assist the practice of a religion. On the contrary the U.S bans any law respecting religion.

ii. No law for imposing any religious observance as in Gallagher

iii. No law for prohibiting the free exercise of any religion

In Krygger v Williams, the respondent sought to evade conscription on the grounds that it was contrary to his religious beliefs, and consequently raised s 116 as a defence.

It was held that free exercise of religion is the freedom to worship. Therefore, Conscription is not relevant to that freedom because there was nothing to prevent the respondent from worship or exercising his religion.

iv . States that no re l ig ious test shal l be required as a qual i f icat ion for any off ice or publ ic trust under the Commonwealth.

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Rights of residents of different States - (s 117) :

s 117 : Rights of residents in States - “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.”

Street v. Qld Bar Association (1989) : Rights and freedoms - interstate discrimination; The Rules of the Supreme Court of Qld required every person, previously

admitted as a barrister in another State and applying to be admitted as a barrister in Qld, to file an affidavit that he had ceased to practice in the other State(s) and was now resident in Qld.

Street was a barrister in NSW seeking to be admitted in Qld. The Qld Supreme Court refused his application on the basis of his failure to

comply with the Rules. Street sought a declaration that the Rules were contrary to s 117 and

therefore invalid. HELD : the Rules were invalid under s 117 as they subjected the plaintiff to

a disability or discrimination which would not be equally applicable to him if he were a resident of Qld.

“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 illusory” : per Mason CJ.

Goryl v. Greyhound Australia PL (1994) : Rights and freedoms - freedom from interstate discrimination; Goryl, a resident of NSW, was a passenger on a bus owned and operated by

Greyhound, a company incorporated in Qld. Goryl was injured during the trip when the bus was involved in an accident. She sued for damages in the District Court of Qld. Qld legislation restricted the level of damages recoverable by a non-resident

of Qld to the amount recoverable in their own State. Qld residents who were injured in another State could still maintain a

common law action in Qld. Goryl argued that the Act infringed s 117 and was invalid. HELD : s 117 relieved Goryl from the discrimination restricting her to

recovery of a lesser amount than is she was a resident of Qld.

“The object of s 117... 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 federation” : per Dawson and Toohey JJ.

Topic 6 - Implied Restrictions

Cth and State immunity

Concerned with the issues : - whether the Cth can regulate State Govts and their instrumentalities;

and conversely, - whether the States can regulate the Cth Govt and its instrumentalities.

Two preliminary issues : 1. Does the legislation purport to bind the Crown? (Crown as the embodiment of Executive power) : The test is the intention of Parl which may be express or implied. The recent decision in Bropho rejected the inflexible approach that the Crown would be bound by necessary implication only if it is “manifest from the very terms of the statute”, adopting a more flexible approach to implying such an intention.

Bropho v. WA (1990) : HELD : HC reversed previous trends and made it easier to find intention to

bind the Crown. Is there express or implied intention?

2. Who falls under the “umbrella” of the Crown? Apart from the Govt (ie. Ministers, their Depts, and public servants), statutory bodies may also come within the Crown depending upon the extent to which they are subject to ministerial control State Bank of NSW v Commissioner of Taxation (1992).

If the law intends to bind another Crown, is it valid? A. Look to the Constitution : Although the issue of intergovernmental immunities inevitably arises in any federal system, it is surprising that the Cth Constitution addresses this issue in only a few minor respects:

- s 51(xiii) : the Banking power does not extend to “State banking” unless it extends beyond the limits of the State concerned.

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Bourke v. State Bank of NSW (1990) : Banking power - Cth unable to regulate State banking; Bourke sued the State Bank for damages under the TPA 1974 (Cth) alleging

misleading and deceptive conduct. The bank’s business was principally conducted within NSW. In its defence, the bank argued that the Act did not apply to it due to the

prohibition on regulation of State banking in s 51(xiii). Bourke argued that the Act did not cease to be a valid exercise of the power

in relation to financial corporations in s 51(xx), because it may also be characterised as a law with respect to State banking.

The issue for the court was whether the words “other than State banking” in s 51(xiii) imposed a general limitation upon Cth power or are merely intended to confine the ambit of the banking power itself.

HELD : the TPA was invalid to the extent that it purported to apply to a State bank in the conduct of its banking business not extending beyond the limits of the State concerned. The words “other than State banking” in s 51(xiii) were not merely intended to confine the ambit of the banking power but imposed a restriction upon Cth power generally.

- s 51(xiv) : the Insurance power - s 52(i) : exclusive Cth places (Allders).

- s 114 : prohibits both the Cth and the States from imposing any tax on each other’s property.

- also note ss 106, 107 and 109.

s 114 has been interpreted very narrowly, not to prevent the Cth imposing customs duty (one form of tax) on goods imported by a State Govt, nor to prevent the imposition of the Cth’s fringe benefits tax on benefits provided by State Govts to their employees.

B. Look to HC Authority : The HC has been left with the task of resolving this issue of intergovernmental immunities in the absence of any clear guidance from the Constitution: no clear position exists.

The judicial developments can be divided into the following : i. 1904 - 1920 Acceptance of a doctrine of intergovernmental immunity :

During this period the HC recognised that the governments of the Cth and of the States were immune from each other’s laws. This doctrine of intergovernmental immunity followed from the Court’s adoption of the doctrine of State reserve powers.

ii. 1920 - 1947 Rejection of the doctrine of intergovernmental immunity : In 1920, the Engineers Case rejected both the doctrine of State reserve powers and the doctrine of intergovernmental immunity. The new approach espoused by the Court was to interpret the Cth’s heads of power according to their natural meaning giving them full scope and effect without reserving any part of their scope for State responsibility. Accordingly, the Court upheld the application of s 51(xxxv), the conciliation and arbitration power, to the settlement of industrial disputes involving State Govts and their instrumentalities.

Amalgamated Society of Engineers v. Adelaide Steamship Co Ltd (1920) : The Engineer’s Case - Cth-State relations - rejection of doctrine of implied prohibitions; The Engineers Society was a national trade union which served a log of

claims on employers throughout Aust for increased wages and improved conditions.

Among the employers who were served with the log of claims were WA Govt enterprises.

The society began proceedings in the Cth Arbitration Court seeking to resolve the dispute.

The Conciliation and Arbitration Act 1904 (Cth) gave the court jurisdiction to prevent and settle all industrial disputes extending beyond the limits of any one State, including disputes in industries carried on under the control of a State or public authority.

The WA Minister for Trading Concerns argued that the federal Act could not apply to State govt enterprises.

The President of the Arbitration Court, Higgins J, stated a case for the Full HC : “Has the Parl of the Cth power to make laws binding on the States with respect to conciliation and arbitration for the prevention and settlement of industrial disputes extending beyond the limits of one State?”

HELD : the Act was a valid exercise of the power in s 51(xxxv) and there was no basis on which to exclude the States from the operation of the Act.

“It is beyond any doubt that the doctrine of ‘implied prohibition’ can no longer be permitted to sustain a contention, and so far as any recorded decision rests upon it, that decision must be regarded as unsound” : per Knox CJ, Isaacs, Rich and Starke JJ.

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One decision of note occurring during this period is Aust Railways Union v. Vic Railways Commissioners (1930) which, while upholding the application of a Cth industrial award to State railway employees, recognised that the Cth could not force appropriation of State revenue to satisfy award rates of pay.

The Engineers Case left open whether the Cth could tax State Govts (outside s 114) or affect their royal prerogative rights. These matters were resolved later.

iii. 1947 Melbourne Corporation Principle - A qualification to Engineers Case : In Melbourne Corporation v. Cth (1947), a majority of the HC held invalid s 48 of the Banking Act 1945 (Cth). It is important to appreciate the different views and reasoning expressed by the majority justices. However, today what is referred to as the Melb Corp principle consists of two limbs :

(1) a prohibition against discrimination which involves the placing on the States of special burdens or disabilities; and,

(2) a prohibition against laws of general application which operate to destroy or curtail the continued existence of the States or their capacity to function as governments.

Melbourne Corporation v. Cth (1947) : The State Banking Case - Cth-State relations - interference with State banking; The Banking Act 1945 (Cth) provided that, except with the consent of the

Treasurer, a bank shall not conduct any banking business for a State or State authority, including a local govt authority.

The practical effect was that the Treasurer was never going to give his consent and therefore the States had to bank with the Cth.

The Cth Treasurer notified Melb Corporation (a local govt authority in Vic), that the Cth Bank was in a position to provide full banking facilities, as private banks were no longer legally able to conduct such business.

The issue for the court was whether the Cth could interfere with the banking activities of a State and its authorities.

HELD : the Act was not a valid exercise of the banking power as the Constitution impliedly prohibited discriminatory interference with a State by the Cth. The Act effectively was prohibiting the State Govts from transacting with banks and therefore breached the first limb because it was discriminatory against Melb Corp.

“In my opinion the invalidity of a federal law which seeks to control a State governmental function is brought about by the fact that it is in substance a law with respect to a subject as to which the Cth Parl has no power to make laws” : per Latham CJ.

“The efficacy of the federal system of govt logically demands that, unless a given legislative power appears from its content, context or subject matter so to intend, it should not be understood as authorising the Cth to make a law aimed at the restriction or control of a State in the exercise of its executive authority” : per Dixon J.

The first limb prohibits laws which single out the States and discriminate against them. In both Melb Corporation and QEC v. Cth invalidity arose from a breach of this limb.

QEC v. Cth (1985) : Cth-State relations - implied prohibition against discrimination; The Conciliation & Arbitration (Electric Industry) Act 1985 (Cth) was

introduced by Parl to alter the normal procedure for hearing of industrial disputes before the C&A Comm BUT only in respect of disputes involving Qld Electric Authorities.

The QEC sought a declaration that the Act was invalid for violating an implied prohibition in the Constitution against discriminating against States.

HELD : the Act was invalid as it subjected a State govt agency to special burdens or disabilities. Therefore the first limb of the Melb Corporation principle was infringed because the Act singled out the QEC and discriminated against them.

“A law may discriminate against a State even if it subjects some others (eg private employers) as well as agencies of the States to a special burden or disability. In such a situation the true effect of the law may be to isolate the State agency and the private employers from the general law. This is the effect of the Act. It discriminates against the State of Qld by singling out disputes to which employers in that State are parties” : per Mason J.

In Richardson v. Forestry Comm the court recognised that the nature of a legislative power may permit special treatment of a part of a State without infringing the Melb Corporation principle.

The second limb prohibits laws of general application only if they are of a rather drastic nature : if they operate to destroy or curtail the continued existence of the States or their capacity to function as govts.

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Given the narrow scope of this limb, no instance of its breach has arisen yet.

Cth v. Tas (1983) : Tas Dams Case Tasmania Govt argued that preventing the dam building would freeze

Tasmania in a world heritage state. HELD : rejected this argument.

Re Aust Education Union; Ex parte Victoria (1995) : Cth-State relations - implied prohibition on interference with a State; A number of proceedings had been commenced in the Aust Industrial

Relations Comm by various federal unions of employees, seeking a finding of a dispute and for making of a federal industrial award.

The unions had served demands on States and Territories relating to the terms and conditions of employment of employees of govt and govt agencies.

In each of the proceedings, the Comm made a finding of a dispute under the Industrial Relations Act 1988 (Cth), and in some proceedings made an interim award.

The State of Victoria argued that the C&A power in s 51(xxxv) did not authorise the Comm to make any of the findings of the existence of a dispute.

It sought to support that argument on two grounds. First, it was put that the exercise of power by the Comm was precluded in this case by the implied limitation on the exercise of Cth legislative powers which prohibits interference with or curtailment of the governmental functions of the State, or with its capacity to function as a govt.

The second ground was that the disputes were between the State and its agencies on one hand and their respective employees on the other, and that therefore the industrial disputes in question were not disputes extending beyond the boundaries of any one State.

HELD : the action was premature, as the Commission had not advanced beyond the making of findings of an industrial dispute. It was no objection to the validity of those findings that the Comm lacked the power to make awards containing all of the provisions sought in the logs of claims. Secondly, the fact that the State of Victoria’s jurisdiction and activities were limited to its own boundaries did not prevent the disputes being part of a wider interstate dispute.

The majority, comprised of Mason CJ, Brennan, Deane, Toohey, Gaudron and McHugh JJ, formulated the implied limitation on the Cth’s power to interfere with the governmental capacity of the States, pursuant to the exercise of a special legislative power as follows : “The limitation consists of two elements : (1) the prohibition against discrimination which involves the placing on the States of special burdens or disabilities (‘the limitation against discrimination’), and (2) the prohibition against laws of general application which operate to destroy or curtail the continued existence of the States or their capacity to function as governments.”

They went on to hold that “critical to that capacity of a State is the government’s right to determine the number and identity of the persons whom it wishes to employ, the term of appointment of such persons and, as well, the number and identity of the persons whom it wishes to dismiss with or without notice from its employment on redundancy grounds. An impairment of a State’s rights in these respects would, in our view, constitute an infringement of the implied limitation. On this view, the prescription by a federal award of minimum wages and working conditions would not infringe the implied limitation, at least if it takes appropriate account of any special functions or responsibilities which attach to the employees in question. In our view, also critical to a State’s capacity to function as a government is its ability, not only to determine the number and identity of those whom it wishes to engage at the higher levels of government, but also to determine the terms and conditions on which those persons shall be engaged.”

iv. Cth regulation of the States : The position here follows the Engineers Case even in relation to the two areas left open in that case : taxation and royal prerogatives. No degree of State immunity has been recognised apart from the limited protection afforded by the Melb Corporation principle.

The Cth can tax the State and its instrumentalities.

Vic v. Cth (1971) : The Pay-roll Tax Case - taxation power - power to tax States; The Pay-roll Tax Act 1941 (Cth) imposed a pay-roll tax on all employers in

Aust. The Pay-roll Tax Assessment Act 1941 (Cth) defined an ‘employer’ to

include the State Crowns.

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The State of Victoria sought a declaration that the Acts were invalid so far as they purported to impose the tax on the State.

The Cth asserted that the Acts were authorised by s 51(ii). HELD : the Acts were valid exercises of the taxation power and there was

no warrant for excluding the States from the operation of the Act. “The principle to be derived from the Engineers Case is that the Cth Parl is

exercising its legislative power as to any of the enumerated topics is able by its law to bind the Crown in right of a State except in relation to those topics which contain an express exception or limitation” : per Barwick CJ.

The Cth can also abrogate State royal prerogative powers.

Vic v. Cth (1957) : The Second Uniform Tax Case The States Grants (Tax Reimbursement) Act 1946 (Cth) authorised the

annual payment of money to a State as financial assistance on the condition that the State had not, in the current year, imposed its own income tax.

The Income Tax Assessment Act 1936 (Cth) provided that a taxpayer must pay Cth income tax before any State income tax.

Vic and NSW sought declarations that the Acts were invalid. The issues for the court were whether the Reimbursement Act was a valid

exercise of the power in s 96, and whether the Assessment Act was a valid exercise of the taxation power in s 51(ii).

HELD : the Reimbursement Act was a valid exercise of the power in s 96 as it did not interfere with the States’ power to impose their own tax. The attempt to give priority to the payment of the federal income tax was not authorised by s 51(ii) as the section did not give the Cth power over the whole subject of taxation.

“To support [the Assessment Act] 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 by the Cth 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 be 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 Cth, until it reaches into the exercise of the constitutional powers of the States” : per Dixon CJ.

v. State regulation of the Cth :

The position as regard State regulation of the Cth is both complex and unsettled. However, it appears to be accepted despite the Engineers Case that the Cth enjoys some degree of immunity from State regulation. The views expressed of the width of this immunity vary from total to partial immunity. As well, s 109 - the inconsistency provision - provides the Cth with a mechanism by which to protect itself. Even if complete immunity from State regulation is accorded to the Cth, the Cth remains subject to State law by being ‘affected’ by State law and by virtue of ss 64, 79 and 80 of the Judiciary Act 1903 (Cth).

Judiciary Act 1903 (Cth) - s 64 : in any suit to which the Cth or State are a party, the rights of the

parties, as nearly as possible, are the same. Cth submits itself to both substantive and procedural laws. The word “suit” appears to confine it only to civil proceedings. S 64 may provide the cause of action. S 64 will not apply inconsistent law.

The following provides an outline of the development of this issue in the HC - 1. Application of the Engineers Case : Pirrie v. McFarlane. HELD : Cth defence personnel NOT immune from State traffic laws. 2. Recognition of Cth immunity: Essendon HELD : a State, by a local govt authority, could not impose rates upon the Cth’s occupation of the land under the defence power. Cth v. Bogle: HELD : Cth Hostels Ltd was not an agent or instrumentality of the Cth Crown and accordingly was subject to the Vic Prices Regulation Act. In both of these cases, wide views of general Cth immunity were expressed by Dixon and Fullagar JJ. Cth v. Cigamatic PL HELD : Therefore, the Cth does enjoy immunity from State law in respect of its ‘fiscal and governmental rights’. 3. Section 109 :Whatever degree of immunity is enjoyed by the Cth, it always possesses the capacity to protect itself from State regulation by enacting inconsistent regulation which will prevail over the State law by virtue of s 109.

Despite any doctrine of Cth immunity but subject to s 109, the Cth has subjected itself to State law pursuant to the Judiciary Act 1903 (Cth) ss 64, 79 and 80.

Freedom of Political Discussion :

A. The foundation of this implied right : Nationwide News Ltd v. Wills (1992) :

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A section of the Industrial Relations Act 1988 (Cth) made it an offence to write words calculated to bring a member of the Commission into disrepute.

Wills alleged that a Nationwide News article had brought the Comm into disrepute and therefore was in breach of the Act.

Nationwide News argued that the Act was beyond the legislative competence of the Cth and that the Constitution contained an implied right of freedom of political discussion.

Wills agued that the Act was a valid exercise of the C&A power in s 51(xxxv).

HELD : the HC was unanimous on the invalidity of the section, but for two different reasons. The majority held that the section was invalid because it breached the implied freedom in the Constitution of political discussion. The minority found that the section was invalid because it could not be characterised under the C&A power or any other head of power in the Constitution. “Inherent in the Constitution’s doctrine of representative govt [ss 7 and

24 : “directly chosen MP’s”] is an implication of the freedom of the people of the Cth to communicate information, opinions and ideas about all aspects of the government of the Cth, including the qualifications, conduct and performance of those entrusted (or seek to be entrusted) with the exercise of any part of the legislative, executive or judicial powers of government which are ultimately derived from the people themselves” : per Deane and Toohey.

Aust Capital Television PL v. Cth (1992) : The Political Advertising Ban Case; Cth legislation prohibited political advertisements on radio and TV during

all election periods. Aust Capital TV sought declarations that the Act was invalid as a

contravention of an implied guarantee of freedom of communication. HELD : the Act contravened an implied guarantee of freedom of

communication at least in relation to public and political discussion. “Freedom of communication... is so indispensable to the efficacy of the

system of representative govt for which the Constitution makes provision [ss 7 and 24 : “directly chosen MP’s”] that it is necessarily implied in the making of that provision” : per Mason CJ.

It is important to note in both of the above cases that that court found the doctrine of ‘representative govt’ from ss 7 and 24 of the Constitution. These sections outline the election procedures for Senators and Members as requiring

them to be “directly chosen” by the people of the Cth. From ‘representative govt’ the court found the doctrine of ‘representative democracy’ and consequently ‘freedom of political discussion’ implied in the text and structure of the Cth Constitution.

The case below is an example of the HC refusing to extend the implication of representative govt/democracy too far because the text and structure of the Constitution did not provide for it.

McGinty v. WA (1996) : Implication of representative democracy; Certain provisions of the Constitution Acts Amendment Act 1899 (WA) and

the Electoral Distribution Act 1947 (WA) provided for disparities between the number of voters enrolled in the metro and non-metro districts for the election of members of the Legislative Assembly of WA.

The plaintiffs challenged the validity of these provisions arguing that the principles of representative democracy and equality of voting power were implied incorporated in the Cth Constitution and the WA Constitution.

HELD : there was nothing in the Cth Constitution or the federal constitutional structure that required implication of the principle of ‘one vote, one value’. As there was no implication of that principle at the federal level, the Constitution did not therefore impose the obligation on State elections. Similarly, it was not possible to derive the implication of that principle from the WA Constitution.

The principles of representative govt and representative democracy are not enshrined in the Constitution in toto. A constitutional principle can only be taken from the text and structure of the Constitution itself.

“... it is clear beyond question that implications may only properly be drawn where they are necessary or obvious” : per Dawson J.

“... such implications may only be drawn when they are logically or practically necessary for the preservation of the integrity of that structure” : per McHugh J.

B. Issues regarding to the implied freedom : process of implication from the Constitution referred to above; scope of the implied freedom? generally given wide interpretation by the

HC; NOT an absolute freedom restriction allowed if reasonably appropriate

and adapted to fulfilling a legitimate purpose; a restriction on State power?

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C. Constitutional defence to defamation : Theophanous v. Herald & Weekly Times Ltd (1994) : Theophanous was a member of the H of Reps who commenced proceedings

against the defs concerning published articles criticising his views and conduct as chairman of the Joint Parl Standing Committee on Migration Regulation and chairman of the ALP’s Federal Caucus Immigration Committee.

Among the defences raised was the claim that the words were published pursuant to the implied freedom to political discussion in the Constitution relating to the performance and suitability of the members of Parl.

The questions for the court were whether such a freedom existed, and if so, whether the publication must be reasonable and without malice.

HELD : the publication questioned Theophanous’ fitness to hold office as an MP and, therefore clearly fell within the concept of ‘political discussion’. Further the common law defences which protect the reputation of persons who are the subject of defamation proceedings do so at the price of significantly inhibiting the freedom of communication and the efficacious working of representative govt. Accordingly, the defendant was required to establish that it was unaware of the falsity of the material published, that it did not publish the material recklessly and the publication was reasonable in the circumstances.

Stephens v. WA Newspapers Ltd (1994) : The pltfs were members of the WA Legislative Council. They commenced an action for damages concerning three articles published

by the defendant criticising an interstate and overseas trip taken by the pltfs as members of the Standing Committee on Govt Agencies.

The defendant claimed that the articles were published pursuant to an implied Constitutional freedom of political discussion.

HELD : the freedom implied in the Constitution extends to the public discussion of the performance, conduct and fitness for office of members of the State legislature. A similar freedom is implied in the State Constitutions. The implied freedom will afford a defence if the defendant was unaware of the falsity of the material published, did not publish the material recklessly and the publications were reasonable in the circumstances.

In the two cases above, the court extended the Cth Constitutional implied restriction to the States. Therefore, the practical effect of these judgements is that it is not necessary to imply the restriction from particular State

Constitutions because the Cth Constitution delivers this protection at the State level also.

Lange v. ABC (1997) : The plaintiff, a former NZ PM, brought an action for defamation against the

defendant in respect of comments made during a TV program. In its defence, the ABC relied on the Theophanous and Stephens decisions

and pleaded that the broadcast was protected by the implied Constitutional protection of freedom of political discussion.

The ABC also raised the issue of ‘qualified privilege’ under the Defamation Act 1974 (NSW).

Lange argued that neither the decision in Theophanous nor Stephens had any application to the discussion of matters involving the Govt of NZ.

Following prompting from Dawson J, he further argued that Theophanous and Stephens were wrongly decided.

HELD : the Constitution was intended to, and to the extent allowed by its text and structure, clearly does provide for the institutions of representative and responsible govt. Freedom of communication between electors and candidates concerning govt and political matters is central to that system of representative govt and is created by the direction that the members of the H of Reps and the Senate are to be “directly chosen by the people”. While the Constitution necessarily protects that freedom of communication, the protection is not absolute. The Constitution only precludes the curtailment of the freedom by the exercise of legislative or executive power, it does not confer personal rights on individuals. Accordingly, the defence based on Theophanous and Stephens was bad in law. The court then held that the Defamation Act was reasonably appropriate and adapted to serving the legitimate end of protecting personal reputation without infringing the implied freedom of communication. However, in circumstances where the claim for qualified privilege under the Defamation Act is based upon the fact that the publication took place in the course of discussion of govt or political matters, then the defendant must establish that its conduct was reasonable. In this case, the further particulars were required in order to bring the publication within the defence.

The court held that it was prepared to reconsider Theophanous and Stephens as it was arguable that neither decision contained a binding statement of constitutional principle. This was due to the fact that in each of those cases, although Deane J agreed with the orders proposed by the joint judgment of Mason CJ, Toohey and Gaudron JJ, his Honour had formed the view in the joint judgment and had not adopted the reasons for those orders. The court

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then held that while Theophanous and Stephens should be regarded as deciding that the common law rules of defamation must conform to the requirements of the Constitution, the reasoning of the decisions should be reconsidered in order to settle constitutional doctrine.

Levy v. Vic (1997) : Levy did not hold a valid hunting licence and was charged with three

offences of entering into a hunting area, during the duck shooting season, while protesting against the Vic hunting laws.

He claimed that the Wildlife (Game) (Hunting Season) Regulations 1994 (Vic) were invalid as they contravened an implied freedom of political discussion in the Cth and Vic Constitutions.

HELD : the Regulations did not infringe any implied right of freedom of communication, as they were appropriate and adapted to serve the legitimate end of ensuring the safety of persons with conflicting aims who would be likely to be in the vicinity of duck shooting.

Topic 7 - Role of the High Court and Constitutional Reform

A. Nature of the HC’s jurisdiction

i.) Establishment of the Court : The HC of Aust is the only federal court required to exist pursuant to s 71. It was established by the Judiciary Act 1903 (Cth). The necessity for and role of the Court were the subject of intense debate at

the time.

ii.) The composition of the Court : Presently comprised of 7 justices, appointed by the GG in Council, and must

retire at 70 years of age (s 72). There is no maximum number of justices prescribed by the Constitution. Removal by the GG in Council on an address from both houses of Parl (s

72), only on the grounds of proved misbehaviour or incapacity. The HC comprises at present (Dec 1998) :

Gleeson CJ - appointed May 1998. Gaudron, McHugh, Gummow, Kirby, Hayne and Callinan JJ.

Each justice is entitled to write his or her own judgment. Joint judgments arise only when the other Justice(s) agree with the entire judgment.

iii.) the Constitutional and Appellate Jurisdiction of the HC :

The jurisdiction of the HC is conferred by the Constitution and the Judiciary Act 1903 (Cth).

The HC’s jurisdiction is both appellate (s 73) and original (ss 75-76). Almost all constitutional cases come before the HC in its original

jurisdiction - usually heard by all 7 justices. Constitutional challenges may be brought by a State or an individual with

sufficient interest or standing. The majority of non-constitutional cases come before the Court in its

appellate jurisdiction after being granted special leave to appeal from the highest State court or from the Full Federal Court.

Usually 5 justices hear appeals except in cases involving important legal issues when the CJ usually decides that all 7 should sit.

iv.) The Constitutional role - power of judicial review : The power of the HC to decide the validity of legislation or other govt

activity, whether of the Cth, State or Territory (ie the power of judicial review) is assumed by the Constitution (eg s 76(i)) and has never been questioned.

The drafters of the Constitution acted on the basis that the Court would assume the same constitutional role as that adopted by the US Supreme Court and upheld in Marbury v. Madison (1803) (USA).

The most important decision of the HC which affirms its power of judicial review is the following case. Aust Communist Party v. Cth (1951) : Parl attempted to legislate to get rid of the Communist Party. HELD : the HC invalidated the legislation because it endeavoured to deem the Communist Party as an external threat under the defence power and to oust the court’s power of judicial review. “The stream cannot rise above its source.”

NB. The power of judicial review is only exercised when a matter of constitutional validity is raised by parties in legal proceedings.

The range of matters which requires the Court to interpret the Constitution include the following :

- determining the validity of Cth legislation - determining the validity of Cth executive activity.

- determining the validity of State legislation - determining the grounds of disqualification of MP’s (ss 44-45).

B. Judicial method

The method by which the judiciary resolves constitutional disputes (as distinguished from the executive or legislature).

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Most of the decision of the HC since federation have concerned the capacity of the Cth to enact legislation within its specific heads of legislative power. The HC has approached this task in this way : 1. It searches for relevant heads of legislative power/ordinary mean (Engineers

Case). 2. Characterises the impugned law to see whether it falls within the scope of

that head of power. It does it first by examining the legal effect of the law to see whether it has sufficient connection with the head of power. If not, it will consider its practical operation or purpose. If a sufficient connection is found then it is likely to be within the incidental scope of the power, ie a matter the regulation of which is necessary to give effect to the main head of power.

3. Restrictions on the head of power are then considered. These may be express or implied and they have the effect of reducing the prima facie scope of the head of power.

The HC has developed legal principles for each of these steps. In so doing, the HC decides the constitutional validity of legislation according to the rule of law rather than on the basis of any political policy.

This judicial method was elegantly described by Dixon CJ as the application of “strict and complete legalism.” Therefore, the HC is not endeavouring to please the govt, pressure groups, etc.

The significance of the judicial method is heightened by the incapacity of Parl to reverse the HC’s interpretation of the Constitution. This can only be done by a referendum (s 128).

The principles of interpretation of the ConstitutionConnotation and denotation : Connotation - a fixed meaning of core characteristics as at 1901. Denotation - a flexible meaning which covers new developments.

Use of historical material : Reference is allowed to drafts of the Constitution and historical colonial

material. Later in Cole v. Whitfield (1988), reference allowed to constitutional

convention debates but only “for the purpose of identifying the contemporary meaning of language used...”

Interpretation of heads of Cth power : In 1920, the HC in the Engineers Case stated that the heads of Cth power

should be given full scope and effect by according to them their ordinary meaning, without reading into the words any restrictions or limitations not clearly expressed by the words themselves.

The practical effect of the Engineers Case was that the Cth’s power to settle industrial disputes extending beyond a State was held to extend to such a dispute involving WA Govt instrumentalities.

It is clear the Engineers Case was motivated by a desire on the part of the HC to accord greater national power to the Cth.

Characterisation of Cth laws : The court looks to either (a) the direct legal effect of the law; and/or (b) its

practical operation or purpose. (a) the direct legal effect of the law :

- as well as having to interpret the various heads of power in the Constitution, the HC must also determine whether a particular Cth law is a law “with respect to” that head of power. This is a process of characterisation; the law must be characterised as a law “with respect to” one or more heads of power.

- the test adopted by the HC in Fairfax v. FCT (1965) is to look for the direct legal effect of the law; the extent to which the law changes or affects one’s legal obligations.

- this approach enables the Cth to indirectly affect various activities otherwise outside the scope of its enumerated powers. (b) its practical operation or purpose :

- when the direct legal effect of the law is not directly connected with the subject matter of the head of power. eg. a law which regulates the operation of tourist resorts may not have a direct connection with the I/S and O/S trade and commerce power in s 51(i), but because the practical effect of the law is to increase the no of tourists visiting Aust, this will provide benefits to our international airlines which are engaged in international commerce. See O’Sullivan v. Noarlunga Meats Ltd (1954) and Airlines of NSW v. NSW (No 2) (1965).

- when the head of power is a “purposive power”. eg. the defence power in s 51(vi).

Core and incidental power : Relevant distinction in identifying the degree or nature of connection which

exists between the law and the power.

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C. Legalism v. Activism

The HC performs an important role in the constitutional/political system. Its constitutional judgments have inevitable political consequences. This was recognised by the drafters of the Constitution and Parl in establishing the Court in 1903.

Legalism - Substance v. Formalism : Recently the HC has indicated reliance on form over substance in determining whether express or implied restrictions on power have been infringed. See Hematite Petroleum v. Vic (s 90); Cole v. Whitfield (s 92); Street v. Qld Bar Assoc (s 117); Ha (s 90).

Proportionality may arise in at least two situations : (1) Restrictions on legislative power/propor. of the legislative measures Castlemaine

(2) Characterisation: Nationwide News PL v. Wills (1992) where Mason CJ applied the doctrine of proportionality to the exercise of the incidental power to invalidate the legislation in that case - the other justices relied upon the implied freedom of political discussion. A lack of proportionality may be evidence that the practical effect of the law

is not within the purpose of the head of power. However, this will rarely arise.

Constitutional implications : The drawing of implications from the Constitution (eg. freedom of political discussion) especially which impose restrictions on Cth power, have been met with accusations of creative law-making.

It is now firmly established that implications can only be drawn from the text and structure of the Constitution.

Injection of values and policies : The opportunity for the injection of values and policies is limited. But it has occurred in the following situations, General approaches to constitutional interpretation. There is no doubt that

certain values and policies lie at the foundation of some fundamental principles of constitutional law - eg doctrine of reserve State power, the federal balance, separation of judicial power, implied rights.

Tas Dams Case - as to the meaning of an ‘external affair’.

Interpretation of express restrictions - as to the purpose or object of eg excise duties (s 90), or freedom of I/S trade (s 92).

The derivation of implied restrictions - eg Melb Corporation, separation of judicial power, implied freedom of political discussion.

The weighing up of competing interests in the application of these restrictions - the concept of proportionality.

Which values? In all of the above situations, one or more of the following values were injected : Maintenance of the federal system (eg. Melb Corporation)/State’s rights/National purpose of the Cth Constitution (eg. Ha)/Deference to Parl; recognition of the limits of the judicial role (seen in the direct legal effect test of characterisation eg. SA v. Cth Vic v. Cth Interests of practical government (eg. Adamson’s Case. Representative democracy. Procedural fairness. Protection of individual liberties - (as far as the Constitution provides). Enable Aust to participate within the international community in accordance with international law (eg. Tas Dams Case). The difficult issue is whether these are legitimate values and whether they are enduring community values.

D. Academic criticism

Prof Brian Galligan : Argues that the HC has been very successful at masking its decisions in the

rhetoric of legalism to legitimise its political function. He prefers the HC to adopt the interpretativist approach which he defines as

deciding the constitutional validity “by reference to the Constitution, either its actual language and structure or the values and intentions of the founders which it embodies.”

Jeffrey Goldsworthy : Responds to Galligan by saying that the interpretativist approach he

advocates is “sensible legalism”. He argues that the HC’s acceptance within the community has been due

more to the obscurity of its pronouncements and the marginal relevance to laymen.

He observes that “there is clearly a point at which flexible and purposive interpretation becomes amendment...”

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Stephen Gageler : Claims that the drafters of the Constitution failed to consider the nature and

form of the judicial review to be performed by the HC. Because of the uncertainty, it is preferable for the HC to defer to the Cth

Parl in the scope of its powers. Therefore, where there is doubt about the constitutional validity of Cth law, the Cth Parl should be given the benefit of the doubt.

Prof Greg Craven : Accepts that the literal approach applies to those provisions which are clear. But where there is ambiguity, such as in the s 51 heads of power, then the

HC must endeavour to extract the drafters’ intentions by reference to the Convention Debates, the drafts of the Constitution, and even contemporary speeches and other writings.

Finally the HC needs to explicitly pronounce that this is the manner in which it has proceeded.

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