LAWS 2150
FEDERAL CONSTITUTIONAL LAW
WK 1.2
20/7/00
Introduction
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Essentially a course on federalism; we look at s 51 of the Constitution (the main pwr
conferring section), prohibitions on the Cth, & the fed division of legislative pwr.
When drafting the Aust Const in 1890s, 2 essential models were analysed:
- Canada
- USA
USA:
- basic federal principle is that certain pwrs (leg, exec & jud) were given to the
United States (fed gov’nt) & residue remained with States.
- because it is a gov’nt of limited pwrs, always have to explain where it gets its
pwr from (expressly or impliedly) – ie, can only do what is authorised.
- whereas the States in the US only have to show pwr is not taken away.
- 10th Amendment in Bill of Rights adopts this fed principle.
Canada:
- in 1860s looked at US & saw States too strong, & therefore, differed in their
federal balance.
- created a central gov’nt much stronger (residue with centre & not States).
- but today the reality is that the provinces in Canada are now much stronger.
Australia:
- adopted US principle.
- therefore, Cth is, like US, a gov’nt of limited pwr.
- local equivalent is s 107 – States retain all pwrs not exclusively vested in the
Cth (analogous to 10th Amendment).
- Cth is a gov’nt of limited pwr – therefore, whether leg, exec or jud, has to point
to express or implied pwr given to it.
- State only has to show pwr not taken away.
Technique of Constitutional Analysis
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Look at validity of Cth law > see law as a provision (section or subsection).
Always 2 qs to ask:
1) is there a Cth pwr or authority to enact it? If not, invalid; if yes
2) is there relevant prohibition (like implied right which prevents Cth from enacting
it)?
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1st issue is that of characterisation (there has been a change in HCA from single to
multiple characterisation).
Cth is given leg pwr in 3 main sections – ss 51 (principal one), 52 & 122.
So, to see is Cth law is valid, firstly as what is the character of the law – look at s 51 &
the 39 placita (placitum) under it to see if Cth has the topic.
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Eg: under the Marriage Act 1960, if parents of illegitimate child married then child
was legitimised. In A-G (Vic) v Cth (1962), the q of what is this law’s topic arose. Is
it ‘status’ or ‘children’ (Cth has no pwr over either of these)? Therefore, because of
the difficulties of single characterisation, HCA adopted multiple subject
characterisations – ‘status’, ‘children’ or ‘marriage’, & therefore provision was valid.
2 kinds of leg pwr
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All pwrs in s 51 (main pwr conferring section) are concurrent (that means Cth & State
can both exercise it).
But there is a resolution of inconsistency (s 109 says that Cth prevails over State).
s 51(xxii) – divorce
s 122 – pwr over territories
s 52 – also analogous to territories
connotation 1900 (ie, look at ‘original’ or ‘essential’ meaning which is ‘fixed’ from
time of Federation); denotation 2000 (what is denoted by it; meaning of the words
today) – Const is evolving in a changing society.
Eg: assume transportation provision (there isn’t one) – diff in 1900 than in 2000.
Eg: assume Cth given pwr over marriage [s 51(xxii)] – does it incl de facto? We take
def’n of 1900 & whatever falls within it today does so; does it incl gay marriage?
Doctrine of ‘reserved state pwrs’
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Basic fed principle in s 107 – certain pwrs given to Cth & residue remain with States.
Look at law & see if it is the list.
Engineers (1920) exploded the doctrine of ‘reserved state pwrs’.
Doctrine of ‘reserved state pwrs’ is the doctrine used by the 1st 3 judges of HCA –
certain pwrs reserved for the State > therefore, read Cth pwrs more narrowly.
R v Barger (1908)
- s 51(ii) – make laws with respect to taxation.
- Cth not intended to have pwr over labour law.
- analysed s 107.
- read down taxation.
- used a pres that certain matters left to State in order to read down pwrs given to
Cth.
- Isaacs & Higgins JJ opposed reserved pwrs doctrine.
Engineers (1920) said reserved pwrs doctrine is wrong.
ie, look to Cth & then because of general principle, if Cth does not have it, then look to
State & if it is not taken away.
WK 2.1
24/7/00
Trade & Commerce
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Why do we start with this particular pwr?
s 51(i) is potentially the largest & most general Cth pwr.
Though they have not gone as far as US cts, Aust cts will do so in the future.
This section raises interesting qs of interpretation (earliest interpretative pwr).
Unsatisfactory because most recent case (in 1976) does not represent the current
position.
Cases concerning this section have been decided on narrow & unsatisfactory grounds.
People talk about this as if it were interstate & foreign but the actual words are
commerce with other countries & among the States (broad concept) – s 51(i) & s 92.
‘Interstate’ means movement across State boundary whereas concept of commerce
‘among the States’ may not require that but that it requires more than one State.
H C Sleigh v SA (1977)
- oil refineries were not in every state so they entered into agreement to supply
each other in diff’nt States.
- was this agreement among the petrol cos an agreement involving commerce
among the States.
- HCA said that you need movement across State boundary.
- Murphy J dissented & said commerce among the States meant commerce
which concerns more than one State.
What movement is required by HCA?
3 things/pwrs that extend s 51(i):
1) implied incidental pwr
2) express incidental pwr – s 51(xxxix)
3) s 98
1) Implied Incidental Pwr (p 173)
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It is a general principle of common law that where pwr/grant is given to anybody,
there is automatically enough additional pwr granted to make the original grant
effective.
This applies to public pwrs & private pwrs (eg in wills & deeds).
Doctrine applies to leg, exec & jud pwrs.
Eg: authorised to drive car & therefore enough sufficient pwr to get inside garage to
get to car (implied incidental pwr).
Eg: if Cth sets up ct & gives it pwr to issue orders but does not expressly say can
enforce it, there will be an implied judicial pwr (if given pwr to issue orders, can then
have implied incidental pwr to enforce them).
2) Express Incidental Pwr – s 51(xxxix)
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Authorises Cth Parl to make laws on matter incidental to execution of any pwr vested
in any of the branches.
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Diff betw’n express & implied is:
i)
express incidental pwr is a legislative pwr only
ii)
implied incidental pwr applies to all branches & also to priv law
iii)
incidental to execution (express) as opposed to incidental to subj matter
(implied)
3) s 98
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Provides for Cth’s pwr in relation to trade & commerce to extend to incl interstate &
foreign navigation & shipping (among the States & overseas).
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s 51 is subj to constitutional prohibitions:
i)
express prohibition (area where pwr is denied) – eg: for s 51(i) they are ss 92
(guaranteeing freedom of trade, commerce & intercourse), 99 & 100 (not
often).
ii)
implied prohibition
- limitation on degree to which Cth can treat States.
- implied rights (freedom of political communication).
Additional points
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There was to be a body set up called the ‘Interstate Commission’ (ss 101-104).
This was 1st set up in 1912 & was challenged in the Wheat Case (1915) on the basis
that it was given jud pwr.
In 1975 Whitlam gov’nt passed Interstate Commission Act which was never
proclaimed; this was then approved by Hawke in 1978 but in 1988/9 the Interstate
Commission Act went together with Industries Commission.
The prob is that the Const says there will be such a body & it does not exist today –
HCA is also set up by Const, so there is the possibility of gov’nt getting rid of HCA.
s 51(i) needs to be read with s 51(xx) because they complement each other.
s 51(xx) deals with Cth pwr over, among other things, trading corporations.
A lot that you cannot do under s 51(i), you can do under s 51(xx).
A lot of the modern activity is on s 51(xx) & not s 51(i) but you still have to bother
about s 51(i).
Main issues (p 173)
1) Pwr is for interstate & commerce not for intrastate trade & commerce – to what extent
does s 51(i) enable Cth to regulate intrastate trade & commerce?
2) To what extent besides interstate & foreign, can Cth regulate matters antecedent or
subsequent to it?
Cases
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W & A McArthur v Qld (1920) p 165
- important case on s 92; overruled in 1936 by Privy Council.
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Knox CJ, Isaacs & Starke JJ said that “trade & commerce” requires
transportation – transportation is part of commerce & necessary to interstate
commerce.
transport is a “truism” – movement across boundary is regarded by HCA as
necessary.
this passage is still used by HCA.
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Bank of NSW v Cth (1948)
- see Dixon J who gave a wide def’n to “trade, commerce & intercourse” in s 92.
- Dixon J said movement & transportation is part of commerce & it is generally
accepted that movement across boundary is necessary (see Murphy J who
disagreed).
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Airlines Case (1945)
- gov’nt set up an airline to engage in interstate & territorial commerce & gave it
a monopoly (nationalisation). 2 issues addressed were establishment &
monopoly.
- challenged TAA’s existence by arguing that Cth could not establish it as an
airline:
i)
s 51(i) only gives pwr to Cth to regulate commerce & not to engage in
it.
ii)
transport is not commerce but is merely ancillary to it.
Both these args were rejected [i) was read widely & ii) see Dixon J].
- trade is narrow & is included in commerce; commerce does not require a
commercial element (see Dixon J p167).
- movement across border would be interstate commerce (no element of reward
– see Bank Nationalisation Case & US interpretation).
- TAA established & monopoly created [had to sever within Part IV concerning
interstate monopoly (not sever territorial monopoly)]. Ct felt it was able to
sever monopoly from establishment & also within the monopoly matter
because of structure of ANA Act 1945 (Cth).
- s 15A of Acts Interpretation Act 1901 (Cth) authorises ‘reading down’, says
construe provisions to be compatible with Const if possible & authorises
severance (for State leg’n use IA 1987) – not going to use severance if result is
radically diff’nt from what was intended.
- s 15A leads to a presumption of independence of provisions and therefore
counteracts interdependence.
- Held: s 51(i) enabled Fed Parl to incorporate a company to conduct an
interstate or export trading & commercial business & also that interstate
transportation, certainly when conducted for profit, does satisfy trade &
commerce.
Summary (Airlines Case):
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A lot depends on drafting & if doubts as to its validity, make sure it is set out neatly so
that sections can be severed – ie, structure & arrangement of Act makes a big
difference.
3 main points:
1) Cth is not confined to regulating priv activity under s 51(i) but can engage in that
(interstate & foreign) activity & can do so via corporate form.
2) Established that transport was commerce if for reward, & probably if not for
reward (see also McArthur).
3) Way in which ct handled severance:
i)
s 15A of AIA (Cth) is a presumption in favour of independence of
provisions
ii)
structure & drafting of Act is VIP in allowing for severance
WK 2.2
27/7/00
Note:
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Pwrs can be divided into purposive & non-purposive.
The principal pwr that is purposive is s 51(vi) relating to defence.
Most of the other pwrs relate to subj matter – eg: s 51(i) trade & commerce, s 51(xxix)
external affairs, s 51(xxxv) conciliation & arbitration, s 51(xix) aliens, s 51(xx)
artificial persons like corporations.
If a pwr is purposive then its purpose becomes relevant & imp test to see whether pwr
falls within its purpose is q of proportionality (contains concept of due process) – ie, if
you have a purposive pwr, then pwr must be proportional to its purpose.
If a pwr is non-purposive then the purpose for which it is exercised is not imp so long
as it falls within subj matter
s 51(i) is thought to be a non-purposive pwr; the pwr can be exercised for whatever
purpose, or with whatever motives, Parl thinks fit, whether or not they be
‘commercial’ – this was est in Huddart Parker v Cth (1931) & reaffirmed in
Murphyores v Cth (1976).
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Huddart Parker v Cth (1931)
- s 3 of Transport Workers Act authorised a reg’n requiring that in employment,
engagement or picking-up of waterside workers for overseas & interstate
vessels priority should be given to persons who were members of Waterside
Workers’ Fed.
- HCA said this provision was a valid law under s 51(i).
- HCA said not a purposive pwr but a subj matter pwr & if exercise the latter for
whatever purpose, it is okay.
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Murphyores (1976)
- modified version of Huddart.
- Cth wanted to prohibit mining of mineral sands until gov’nt env enquiry.
- Cth has no pwr over mining, so could not prohibit this.
- Cth therefore prohibited exportation without permit (ie, limit export which was
the purpose of mining).
- HCA held that the reg’n was a valid exercise of trade & commerce pwr, as it
dealt with export of goods overseas; the consideration of the env matters did
not affect its validity.
- Mason J: by imposing a prohibition on exportation, the law is dealing with
something at the core/heart of trade & commerce pwr (p 171).
2 things come out of this case:
1) prohibit to foreign – yes; prohibit to interstate – prima facie yes but subj to s 92
(governs freedom of trade).
2) was law exercised for an improper reason (for env & not commercial purpose)?
HCA rejected this saying motives are irrelevant (see Mason J p172) – ie, s 51(i) is
a non-purposive pwr, it is a subj matter pwr.
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To what extent can Cth regulate intrastate commerce whilst regulating interstate & foreign
commerce? (issue relating to implied incidental pwr)
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Despite the 3 cases to be discussed, the current pos’n is still unclear.
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R v Burgess (1936)
- concerned prosecution of pilot who flew without a licence intrastate.
- Cth reg’n of Air Navigation Regulations prohibited persons flying “within the
limits of the Cth”; did not distinguish betw’n interstate, intrastate & foreign
jumps.
- could Cth regulate such commerce (intrastate jumps)?
- 2 args were made to ct:
i)
general: interstate (& foreign) commerce & intrastate were so linked
that intrastate became part of interstate [rejected by HCA].
ii)
narrow: focus on air navigation, & because of physical intermingling in
air routes & airports (“commingling” theory), Cth had to control all air
navigation [rejected by HCA because not enough evidence but left
the door open – see next case].
See Latham CJ (prob of evidence), Dixon J (could regulate intrastate if
necessary) & Evatt & McTiernan JJ (reject “commingling” theory).
Summary:
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Reg’n of intrastate aviation failed because:
1) distinction betw’n physical & non-physical aspects of aviation was not drawn by
reg’n.
2) physical interconnections could be proved more powerfully only 30 yrs later (vol
of traffic higher, etc).
Why didn’t ct break up the line “within the limits of the Cth” into
a) for foreign jumps
b) for interstate jumps
c) for intrastate jumps
so that it could be read down (using s 15A of AIA) to exclude intrastate (ie, so that it
could be severed accordingly)?
Because ct won’t distribute or define the provision if Parl doesn’t. Ct will not read
down composite or undistributed expressions (as this would be legislating & not a
judicial role) unless Parl has distributed/defined them (eg: Australian National Airlines
Act 1945 in which there could be severance in the def’n) or indicated pwr it is relying
on (although this latter point concerning placita does not bind HCA).
See Concrete Pipes Case (1971) & Re Dingjan (1995) which discuss severance &
reading down & confine Burgess.
Airlines of NSW (No 2) (1965)
- the limits of Cth’s pwr to secure a uniform sys of air navigation regulation by
using s 51(i) were made clear in this case.
- reg’ns under ANR.
- more convincing effort made to ct to show interdependence off all aviation &
need for one authority to control all aviation to avoid disaster (ie, safety issue)
– doc’ntary evidence & charts presented to demonstrate physical link betw’n
all aviation.
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regs 198 (keeping planes out of air) & 199 (in regard to licence application,
must consider “safety, regularity & efficiency” of air navigation) – physical
aspects relating to aviation.
reg 200B (authorised aviation & extended it beyond physical aspects to incl
eco factors like profitability) – went beyond & said anyone authorised could
fly.
in relation to 198 & 199, ct applied Dixon J’s judgment in Burgess & said it is
necessary to use intrastate to make interstate & foreign aviation effective
[valid]. Barwick CJ rejects “commingling” but says that there are cases in
which, for safety reasons, the reg’n of interstate & foreign trade & commerce
in the area of air navigation should include intrastate activities.
200B was held to be invalid.
why did HCA hold 198 & 199 valid, & 200B invalid? Because of proximity:
1) if guaranteeing safety of interstate & foreign commerce, then allowed to
monitor intrastate because of interdependence [physical connection in
relation to safety].
2) but when talking about mere economic aspect it is too remote to support
interdependence (see Kitto J).
Distinguish the above 2 cases:
In Burgess, reg’n sought to regulate all commerce across border & did not distinguish
betw’n physical & economic (safety & non-safety), & broad “commingling” theory
rejected.
In Airlines of NSW (No 2), evidence was very powerful.
Notes (p 182):
1) Upholding regs 198 & 199 as they apply to intrastate air operations is not compatible
with Dixon CJ in Wragg v NSW (1953) because Dixon CJ in Wragg, repeating what
he said in Burgess, said that Const distinguishes betw’n diff’nt types of commerce
(inter, intra) & this has to be maintained.
2) There is no constitutional basis for the distinction made by Kitto J betw’n safety &
“merely consequential” matters like financial considerations. [safety is allowed
because important]
Constitutional basis is some form of reserved state pwr although that should not be
there.
3) This distinction is not consistent with Barwick CJ’s statement that Cth pwr is not
merely to protect but also to “foster & encourage” interstate & foreign trade &
commerce.
If pwr to regulate is to incl “foster & encourage”, then cannot limit it to just safety.
4) Yes.
5) Does Airlines of NSW (No 2) apply to roads? Aviation is sui generis (ie, trying to
isolate this case off but logically the principles do apply) – never been litigation on this
subj. [Winterton says that on major interstate highways, probably can be controlled,
but on local roads, probably not]
6) All main airlines are now trading corporations and therefore this problem of interstate
& intrastate can be solved today under s 51(xx). [s 51(xx) applies to all forms of
trade]
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Western Australian Airlines Case (Ansett) (1976)
- unsatisfactory case; decided unnecessarily on s 51(i); does not represent law
today, although last case on it.
- relying on ANA Act, Cth sought to authorise TAA to fly betw’n Perth/Darwin
& Darwin/Perth (can do so under s122); but journey not economically viable &
therefore made stop over in Port Hedland (which was purely intrastate –
relying on s 19B of ANA Act).
- HCA (5 members) held:
1) s 19B was valid under territories pwr s 122 by 3:2 (Stephen J, Mason J &
Murphy J as opposed to Barwick CJ & Gibbs J) & invalid under s 51(i) by
3:1 (Barwick CJ, Gibbs J & Stephen J as opposed to Murphy J).
2) ie, case stands for proposition that valid under one pwr & invalid under
another.
- why did Mason J not have to decide s 51(i)? Because there was no interstate
pwr issue but a territory issue.
- ct able to sever territorial commerce from interstate because s 19 was able to be
severed – see s 19(2)(a), (b), (c) & (d).
- neither ‘necessity’ nor the economic interdependence of intrastate & interstate
trade & commerce will provide a sufficient ground for reg’n of intrastate trade
& commerce under s 51(i).
- ie, Cth could authorise if part of territorial journey, not part of intrastate
journey – ie, Cth could authorise Syd to Goulburn if going on to Canberra but
not Syd to Goulburn if going on to Melb.
WK 3.1
31/7/00
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Airlines of NSW (No 2) states that Cth can regulate intrastate aviation (the physical
aspects of it) when necessary to make interstate & foreign effective.
“necessity to make effective” (Dixon J in Burgess) is link betw’n intrastate &
interstate & is indicative of implied incidental pwr.
so allowed to regulate not because fell within core pwr (because not interstate or
foreign) but because of physical aspects (dangers of multiple control said to be
incidental).
What about if economic necessity to regulate intrastate so as to make effective
regulation of interstate? This was not argued in the true sense in Airlines of NSW
(No 2). Reg 200B held invalid.
“necessity to make effective” does not extend beyond physical aspects – Kitto J (pp
180-1) distinguishes betw’n eco (consequential matters) & safety (preservation of
actual conduct).
Why diff betw’n eco & physical factors (in particular safety)? Try to preserve a field
of intrastate trade for the States (isn’t this ‘reserved state pwrs’ thinking – see Barwick
CJ quoting Dixon J in Wragg).
Western Australian Airlines Case (Ansett) Ctd
- necessity does not mean absolute necessity – diff’nt judges adopt diff’nt views
[eg: Mason J is more liberal & sees necessity as meaning not strict necessity
but “what is appropriate”].
- journey was from Perth to Darwin via Port Hedland [there is no constitutional
prob with going Syd-Goulb-Can but there is one with Syd-Goulb-Melb (unless
if just refuelling in Goulb latter is seen as interstate)].
- always a journey to territory.
- Stephen J: without stop over in PH, TAA was not interested in P-D [stop over
was economically necessary (for TAA’s purpose)].
- Barwick CJ & Gibbs J: economic health of airline was not a relevant factor
under either pwr [s 122, s 51(i)] and therefore prov was wholly invalid; TAA
could not authorise stop over. [they still mention ‘reserved state pwrs’]
- Stephen J: s 51(i) is constrained by fact that intrastate commerce must be kept
separate but not constrained by s 122 [‘reserved state pwr’ reasoning (?) –
when you define Cth’s pwr by saying what is left to the State, this is ‘reserved
state pwr’ thinking].
- Mason J: read down s 19(2), & therefore valid to territories & rest take out; no
rigid reasoning to separate/distinguish eco & non-eco factors (p 190 para 1).
- Murphy J: to suggest American commerce clause is narrower than Aust is
wrong; discusses s 51(i) & accuses maj of ‘reserved state pwrs’ thinking.
- Stephen J: can take eco factors into consideration but if you are merely using
eco nexus in order for Cth to regulate intrastate commerce, this is wrong [ie, to
use eco factors when considering intrastate commerce under s 51(i) is
incorrect]; you can use eco factors when considering interstate (& things
ancillary or subsequent to interstate commerce like production which is neither
intrastate nor interstate) & in relation to s 122.
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See Mason J’s article (p 190) in which he states that improvements in transportation
& communication have led to a merging of economies. Integration of Aust market has
meant that interstate & foreign commerce has gotten larger.
See Zines (p 191) who sets out 4 views regarding eco & commercial factors [view (d)
that they always provide a sufficient basis is the modern view held by Mason &
McHugh JJ]. However, with the rather conservative approach of HCA today, it would
be difficult see how many of the justices would depart from precedence (in particular
Dixon J).
Notes (p 189):
1) 4 justices considered s 51(i) when no interstate commerce was involved & s 19B could
be read down to apply only to intrastate flights in the course of territorial commerce
because it was argued & therefore felt obliged to answer to it (strictly unnecessary –
Mason J).
2) Outcome on s 51(i) would not have differed if s 19B(2) had spoken of economic
necessity rather than “the efficient, competitive & profitable conduct” of TAA’s
business because as Mason states (p 189) effectively the form of the leg’n is what
amounts to necessity.
3) Yes, Murphy J is right in accusing others of using “reserved state pwrs” thinking
(although Barwick CJ would disagree).
4) s 122 says that Cth can make laws for gov’nt of the Territory and can therefore be
concerned with financial integrity of Territory (in 1976, it was before self-gov’nt, &
Cth was gov’nt & TAA belonged to gov’nt). AS Murphy J states, this was for gov’nt
air transport. So if Ansett were priv airline, diff’nt story.
5) Today, diff’nt because Qantas is privatised & NT has self-gov’nt (s 122)
Today, as opposed to 5 yrs ago, HCA is more conservative & in relation to decision
under s 51(i), it would be same.
US approach
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Absolutely no distinction betw’n physical & economic factors drawn in this area of
trade & commerce.
Congress can regulate intrastate commerce where it is economically necessary to do so
(“substantially affects interstate or foreign commerce”).
US commerce clause has been interpreted more broadly than s 51(i), enabling the
reg’n of intrastate activities which have an eco impact on interstate or overseas trade.
2 reasons why HCA has not adopted US approach:
1) too loose & anything can be seen as having a substantial affect on interstate
commerce.
2) we have many more commercial pwrs than US:
- pwr over trading corporations [s 51(xx)]
- pwr over telecommunications [s 51(v)]
- arbitration over industrial disputes [s 51(xxxv)]
- banking [s 51(xiii)]
- insurance [s 51(xiv)]
& because US does not have these, everything goes under the commerce pwr in the
US [see Mason’s article on p 190 where he describes the all-encompassing reach
of the commerce clause in the US Constitution].
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United States v Wrightwood (1942)
- Congress wanted to regulate minimum price of interstate milk & therefore
needed to fix the price of intrastate milk (otherwise could undercut, so had to
regulate everybody).
- Stone CJ: necessary means appropriate; do not look at what is regulated
intrastate but whether it has a sig affect on interstate commerce (“It is the effect
upon interstate commerce or upon the exercise of the pwr to regulate it, not the
source of the injury which is the criterion of Congressional pwr” p 193).
- control over intrastate milk was necessary & appropriate to make regulation of
interstate commerce effective.
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Contrast this with Ansett where view is diff’nt (because in case above decided on eco
nexus & not physical/safety factors).
To what extent can Cth regulate matters ancillary or subsequent to interstate or foreign
trade & commerce? (issue relating to implied incidental pwr)
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ie, to what extent can Cth regulate production of commodities/goods to be exported?
ambit of it is unclear; unsatisfactory because evidence is very limited & decided on
narrow factual basis.
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O’Sullivan v Noarlunga Meat (1954)
- SA reg’ed slaughter of meat for export.
- Cth regs reg’ed matters concerning meat for export (reg 4B & 5).
- was there inconsistency betw’n these 2 (if so, Cth prevails).
- reg 4B provided that anyone who exported meat had to have a Cth licence.
- reg 5 (this was the ambiguous one causing the prob) said all premises used for
slaughter of meat shall be registered.
- is it merely an ancillary prov to reg 4B (slaughter & export separate) or is it
going beyond reg 4B & says may not slaughter until registered.
- on issue of regulating slaughter (potential inconsistency), HCA was divided 3:3
[NB: if HCA equally divided, decision of CJ or Senior Justice prevails if it is
an original jurisdiction; if it is an appeal, decision of lower ct prevails].
- HCA was equally divided & it went onto appeal to PC about inconsistency
issue & judgment of Fullagar J, Dixon CJ & Kitto J stood.
- Fullagar J considered whether s 51(i) empowered Cth to regulate slaughter of
meat for export & said it does.
- Was it in core of pwr or incidental pwr? Fullagar J [relying on 1st case that
recognised ‘implied incidental pwr’ in HCA, D’Emden v Pedder (1904)] said
regs valid under implied incidental pwr to regulate prod’n of goods to be
exported & within leg pwr conferred by s 51(i). The whole process was
destined for export & all meat (goods) destined for export (does not matter if
process is diff’nt) – see pp 194-5.

O’Sullivan (No 2) (1956)
- 2 issues in O’Sullivan: betw’n 2 valid laws & inconsistency.
- PC ruled on inconsistency point but on issue of valid law, had to rely on HCA
because couldn’t get a certificate.

If objectifiably recognised export process, Cth can regulate this. O’Sullivan
concerned slaughter for export overseas. Would this apply to interstate? Yes.

Swift (1962)
- what if it is not an objectifiable export process? (ie, can Cth regulate prod’n of
a commodity of which only a portion was to be exported?) Eg: if some meat
was for export (interstate & foreign) & some for intrastate, because cannot
distinguish should Cth regulate all?
- concerned chickens, most of which went intrastate; issue is whether Cth regs
could apply?
- majority of HCA held that Cth regs did not purport to apply to such a sit’n
(upon statutory construction of whether Cth sought to regulate such an activity,
held that it was not intended).
- Owen J dissented: only way Cth could regulate the prod’n of commodity to
export & ensure the quality of meat is okay is to regulate it all because could
not separate it out & know which poultry goes where (either export or
intrastate/home consumption – can’t tell) – therefore, whole operations should
be governed by Cth regs [ie, regulate all meat prod’n, even if only a small %
goes overseas].

Redfern v Dunlop Rubber (1964)
- an Act said that any contract dealing with interstate commerce that was in
restraint of trade (monopolisation) was void; in the contract was put an
intrastate provision; q is what was effect of all this?
- HCA said Cth can nullify such a contract (ie, the Act applies to contracts
combining overseas or interstate with intrastate matters).
- Owen J’s dissenting judgment in Swift is strengthened by the principle in this
case, enunciated by Menzies J.
Note:


What if Cth wanted to regulate all prod’n? No, it couldn’t.
All goods for export. Could State regulate prod’n of those goods? Yes, States could
(unless inconsistent with Cth law) because s 107 says that anything not given
exclusively to Cth or if not taken away from State or if given to s 51(i) [which is not
exclusive], the State can have.
WK 3.2
3/8/00
Revision




Issue of Cth reg’n over prod’n.
Industrial relations over factories dealing with prod’n going into interstate or foreign.
US: Cth could regulate industrial relations over factories producing goods going
interstate or foreign.
Aust: not so broad view.

In Huddart Parker v Cth (1931), Cth could provide that, in regard to interstate &
foreign stevedoring, preference should be given to a particular union & it was
generally accepted by HCA that Cth can regulate industrial relations of interstate &
foreign on basis that it is incidental. In this case, the implied incidental pwr enabled
s 51(i) to extend to the reg’n of employment relations betw’n stevedoring cos &
waterside workers.

O’Sullivan also fell within the implied incidental pwr as it was held that Cth could
control physical conditions of factory so as to control quality of goods (also incl
matters like health of workers, & ? as to inclusion of other industrial relations matters
like wages).

The effect of Swift (where only some of goods were exported as opposed to all) is
really that Cth not permitted to regulate such a sit’n; Owen J was of view that have to
regulate all prod’n because cannot separate out export from intrastate. In this case,
however, ct was reluctant to give Cth more incidental pwrs with it.

Cth can regulate a journey betw’n 2 states (Syd-Melb) at least for reward. There is no
requirement that journey be in one unit/component (only one journey).
Central Station (Syd) to Flinders Station (Melb) incl airport stops – yes.
On principle of Ansett Case (1976), those getting off at airport, can’t do so.
But bear in mind s 122 concerning Perth-Port Hedland-Darwin. Therefore, Central
Station (Syd) to airport to Canberra, because territory (& not Melb) is okay & could
provide for people to get off at airport & Central Station.
Central Station (Syd) to airport to Melb – under Ansett Case (although questionable
since a while ago) could not provide for people to get off at airport.




United States Commerce Clause




Commerce clause/pwr could be useful basis for Bill of Rights.
Early authority in 19th C gave the pwr a liberal interpretation.
In 20th C, pwr has been given a mixed interpretation (results contradictory).
Sup Ct from 1937 to 1995 gave it a liberal interpretation (increasing breadth).

Wickard v Filburn (1942)
- Congress set a quota on prod’n of wheat (idea was to reduce supply by
increasing price).
-
-
wheat was not going to interstate or foreign commerce but was going to feed
family on farm (home consumption).
Sup Ct said that Congress intended & could regulate it under commerce clause
because the wheat grown on farm had substantial impact on interstate
commerce:
1) neg impact > wheat grown on farm would not go to market.
2) if price was right, wheat grown for personal use would go on market (as
surplus).
intro of aggregate cumulation (small amounts could be cumulated into large
amount based on size of country & can therefore have significant effect on
interstate commerce).

In Civil Rights Act 1964, Congress provided for the desegregation of places of public
accommodation (like hotels & restaurants) that engaged in interstate trade &
commerce.

Heart of Atlanta Motel v United States (1964)
- downtown Atlanta hotel with a large interstate cliental.
- yes, Congress could regulate such a sit’n as the hotel was engaged in interstate
commerce in 2 respects:
1) a lot of travellers to hotel were from interstate.
2) there was a lot of interstate trouble concerning segregation.
- if segregation the prob, then desegregation was the sol’n.

Katzenbach v McClung (1964)
- principal ground for desegregation in this case was not because near interstate
routes but because 46% of food purchased from outside Alabama.
- Black J said it was imp to not get too remote.

Daniel v Paul (1969)
- ludicrous case.
- concerned exclusive priv club that engaged in swimming, boating & snack bar.
- was it engaged in interstate commerce? Yes because it would be unrealistic to
assume that none of its visitors were from interstate (could come from nearby
airforce base) & food (75% of it had interstate components) & entertainment
(music from interstate) had connection to interstate commerce.
- Black J dissented, saying that connection was far too remote.

Russell v United States (1985)
- concerned a federal arson statute which made it a federal offence to burn any
building used in any activity concerning interstate or foreign commerce.
- q: did this apply to a rental building in suburban Chicago?
- held: rental real estate business is interstate commerce (by def’n).

United States v Jones (2000)
- did the above statute apply to a priv apartment (not rental)?
- held: Congress did not intend it to apply to non-commercial properties &
therefore avoided it (rather than say Cth could not do it).

United States v Lopez
- 1st time since 1937 that Sup Ct had struck down any law for extending beyond
commerce clause.
- fed law (Gun Free School Zones Act 1990) made it an offence to possess
firearm within short distance from school.
- could it do so validly?
- Sup Ct said ‘no’ it could not (5:4):
1) it did not regulate economic activity at all (mere possession of firearm is
not an eco activity).
2) Sup Ct did not purport to look to earlier decisions.
3) there were no Congressional findings (& lack of finding did influence Sup
Ct’s decision).
- minority regard decision as outrageous, contrary to long line of authority,
arguing that school violence has a “substantial affect” on interstate commerce
(violence > education > commerce).
- majority criticises this by saying then Cth should control family law (same
reason).
- Thomas J (in maj in both Lopez & Morrison) said “substantial affect” test
should be out.

After Lopez, q was ‘is this the beginning of the end’?

United States v Morrison (May 2000)
- concerned validity of fed law which provided a fed civil remedy for victims of
gender-motivated violence.
- q: was leg’n of Congress under which she sues because raped valid?
- Sup Ct (5:4) said law invalid for same reasons as Lopez:
1) because earlier cases were not questioned.
2) rape was not an eco activity.
- held: not dealing with act that affects interstate commerce.
- minority: had made Congressional findings concerning impact of rape on
interstate commerce (by rape possibly deterring her from interstate travel &
involvement in interstate business/employment) & therefore law should have
been upheld.
Summary:


In light of Morrison, one has to put a little less weight on legislative findings.
Critical test in US is that Congress can regulate anything that “substantially affects”
interstate commerce provided that it is a commercial activity (& if it is purely noncommercial, ct will be weary).
Topic Summary – s 51(i):
1) Cth can itself undertake interstate or foreign commerce; not confined to regulate priv
activity – Airlines Case (1945).
2) Transport, at least if for reward, & probably if not, is commerce – Airlines Cases.
3) In considering ambit of s 51(i) & to what extent it extends to reg’n of intrastate
commerce, q is whether reg’n of intrastate commerce is necessary to make effective
interstate commerce.
Physical or at least safety factors can supply such a necessity, but economic factors
can’t.
See Airlines of NSW (No 2) (1965) & Western Australian Airlines Case (Ansett)
(1976).
Is this the current pos’n? The more conservative HCA today, as opposed to liberal one
5 yrs ago, would probably follow Dixon J & maintain a rigid physical, economic
distinction. But this is diff’nt to the Masonic liberal view.
4) Cth can prohibit the export or import of goods absolutely or on any condition it wishes
regardless of motive, subject to s 92 (in regard to interstate commerce) – Huddart v
Parker & Murphyores.
5) s 51(i), like all pwrs, has an implied incidental pwr & under that Cth can regulate
prod’n of goods to be exported - but unsettled q of what limitations are.
- where distinctly objectifiable export process, Cth can (O’Sullivan).
- but where not all destined for export (Swift), unclear whether Cth could
regulate prod’n, unclear as to whether Owen J’s judgment would represent the
current pos’n (Winterton believes it should).
- prod’n is not itself commerce (because obj not completed) but falls within
implied incidental pwr.
6) s 51(xx) enables a lot that cannot be done under s 51(i) to be done under s 51(xx) – eg:
following Tasmanian Dam Case (1983) Cth can regulate prod’n of goods by trading
corporation no matter what destination (interstate, intrastate, foreign).
Limitation of s 51(xx) is that it has to be a trading corporation, & not the issue of
whether it is interstate, intrastate or foreign.
WK 4.1
7/8/00
Inconsistency




There are more cases on this topic than any other because there are potentially so
many practical sit’ns concerning its application (not because law in this area is
incorrect).
s 109 of the Const says that “When a law of a State is inconsistent with a law of the
Cth, the latter shall prevail, & the former shall, to the extent of the inconsistency, be
invalid”.
ie, s 109 speaks of an inconsistent State law as being invalid (invalid means
inoperative, not void). The significance of this is that if inconsistent, when Cth law is
repealed, State law still exists & springs back.
Wenn v A-G (Vic) (1948) held that State law on preference of re-employment of
returned soldiers was inconsistent with Cth law. However, by the time of Butler v AG (Vic) (1961), the Cth law had been repealed, so the State law was still on the books
& sprang back.
3 Tests of Inconsistency


There are 3 tests of inconsistency.
The first 2 tests are called “egs of direct inconsistency”. See Mason J in Ansett v
Wardley (1980).
1) Impossibility of simultaneous obedience test

Simultaneous obedience is impossible as there is a direct clash betw’n 2 laws –
Daniell (1920).
2) Denial of rights



One law may create certain rights (rather than obligations) which are impaired, altered
or detracted from by the other law. This widens the meaning of “inconsistent” &
scope of s 109.
See Dixon J in Victoria v Cth (the Kakariki Case) (1937): “When a State law, if valid,
would alter, impair or detract from the operation of a law of the Cth Parl, then to that
extent it is invalid”.
See Colvin v Bradley Bros (1943).
3) Indirect inconsistency – “Covering the field test”


If the Cth intends to cover the field (expressly or impliedly), then there will be an
inconsistency with any State law on that field.
See Clyde Engineering v Cowburn (1926).
Cases

Clyde Engineering v Cowburn (1926)
- this case est very clearly the “covering the field” test & was enunciated by
Isaacs J.
- NSW law provided for 44 hr working week & Cth award provided for 48 hr
working week.
- HCA held that there was inconsistency on both 2nd & 3rd tests. On 2nd test
because one law was taking away a right given by the other (44 vs 48). On 3rd
test, where Cth intends to cover the field, then any State law on the field (even
if same words) becomes inoperative. Why? Because Cth is saying this is the
law & this shall be the only law on the topic.
- Cth can cover the field expressly or impliedly (nowadays it is most likely that
it is express).

Colvin v Bradley Bros (1943)
- this case is a classic 2nd test inconsistency.
- State law prohibited employment of women in certain industry (milling
machines) & Cth allowed it.
- there was no 1st test inconsistency because did not have to employ women [if
obligation rather than rights, like “must” rather than “may”, there is
inconsistency via 1st test].
- one gave right to women employment & other took it away.

Ex Parte McLean (1930)
- this case dealt with a potential inconsistency betw’n a Cth award & a State law.
- many inconsistency cases (2/3) arise in case of industrial relations & many of
them involve dispute betw’n Cth award of IRC & State law.
- Cth does not have direct pwr over industrial relations [s 51(xxxv) allows for
setting up of conciliation & arbitration body to resolve industrial disputes &
issue awards – quasi-judicial awards (exercise of leg, admin pwr)]. These
awards can cover broad topics & hence increase chance of inconsistency.
- Dixon J: under the covering the field test, inconsistency depends upon whether
or not Cth intended the Cth law to “completely, exhaustively, or exclusively”
state the law in the field covered by or on the subj matter reg’ed by that law.
- If you have a potential inconsistency betw’n Cth award of IRC & State law, do
you have a potential inconsistency betw’n 2 laws in relation to s 109 (ie, is IRC
award a law? No). Then, if not law, what is the prob? The awards are given
force of law thro statute (ie, behind the award stands the Act & it is this Cth
Act that gives the award legal force vs State law, and therefore 2 s 109 laws).
- It may be that practical effect of saying you could have inconsistency betw’n
Cth award & State law is diff’nt to saying inconsistency betw’n 2 Acts
(because potential area of Cth awards is huge).
- If you deal with clash betw’n 2 Acts (Cth law & State law), then topic of Cth
law would not matter.
- If clash betw’n Fed award & State law, only 3rd test inconsistency will occur
where State law deals with same narrow topic as Cth award does.
- In this case, there was State law inconsistency because dealing with same
narrow industrial relations topic as Cth.


ie, where there is a clash betw’n 2 laws, it probably does not matter if not on same
topic (but need same field) – eg: one concerns animals, the other concerns industrial
relations (if both deal with harm to sheep, then probably 3rd test inconsistency).
ie, where there is a clash betw’n Fed award & State law, take narrow view & say State
law is only inconsistent if it deals with same narrow industrial relations topic as award
deals with.

MTIAA v AMWSU (1983)
- potential inconsistency betw’n Cth award & State law.
- Cth award concerned metal industry & allowed for summary dismissal of
employees.
- State law said that before summary dismissal of an employee, you needed to
see Registrar & go thro’ steps (ie, summary dismissal not allowed).
- Was there inconsistency? HCA said ‘yes’ because of denial of rights &
because covering the field (both dealing with same narrow industrial relations
topic).

Collins v Charles Marshall (1955)
- this case maintains Dixon J’s approach.
- potential inconsistency betw’n a Cth award (Metal Trades award) which
provided for all usual industrial relations aspects (like annual leave) but did not
mention long service leave, & Vict Act which provided for long service leave.
- both deal with industrial relations.
- no direct inconsistency because one is silent.
- no inconsistency because although both dealing with industrial relations, Cth
Act did not intend to cover the issue of long service leave.
- Note: T A Robinson v Haylor (1957) said that to incl long service leave, Cth
would have to expressly state it in the award (p 134).

Ansett v Wardley (1980)
- potential inconsistency betw’n Fed Pilot’s Act which dealt with hiring & firing
of pilots, & Vict’s Equal Opportunity Act that prohibited sexual discrimination
in employment or dismissal.
- Equal Opp Board found that Ansett refused to hire her on basis of her sex, &
ordered Ansett to employ her. Ansett challenged this, arguing inconsistency.
- HCA said there was no inconsistency & Wardley successful (3:2).
- There is in a sense a hybrid betw’n an express & implied intention to cover the
field.
- Eg: if Cth Act appears to assume the continued existence of State law or
expressly states that it is not intending to cover the field & keep State law on
the field, Cth is not covering the field. There can also be an express allusion to
State law which means State law continues or Cth can also impliedly indicate
that it is not intending to cover the field (eg: a sparse reg’n on the field). [See
Mason J on p 140]
- Where gen law is in an area of civil rights, ct will look to subj matter of 2 laws
& lean against an interpretation that Cth intended to cover the field.
- Mason J said that there was an assumed existence of State law & therefore Cth
did not intend to cover the field.

O’Sullivan v Noarlunga Meat (1954)
- HCA split as to whether Cth is dealing with same topic.
- State > slaughter; Cth > export.
- HCA maj:
- There was 2nd test inconsistency. Although drafting of reg 5 of Cth was bad
(“No person may slaughter meat for export unless place is reg’ed”), HCA
implied that to mean that if you did register, you can export. This is in
contradiction with State law that said you must register with us as well (to
export you need to be reg’ed). This implied reading results in inconsistency.
- There was also inconsistency on 3rd test. Fullagar J said the Cth impliedly
covered the field because of the detailed set of requirements that had to be
complied with before reg’n of place for slaughter of meat for export (materials,
etc).
- Therefore, both 2nd & 3rd tests inconsistency (which is common in licensing
sit’ns) – see Raptis v SA (1978) in which HCA said there was 2nd & 3rd test
inconsistency concerning a fishing licence.
Note:

Airlines of NSW (No 2) (1965)
- also concerned inconsistency.
- regs 198 & 199 were held valid, 200B invalid.
- were regs 198 & 199 inconsistent with State law?
- Cth’s pwr over intrastate commerce was a rather tenuous field. Cth has pwr
over safety aspects of intrastate commerce (to make interstate & foreign
commerce effective) & State law dealt with intrastate air navigation (in the
form of character, suitability & fitness of licence applicants).
- HCA said laws dealt with diff’nt subj matters, & therefore, no inconsistency
issue arose.
- HCA said if there is a clear intention by Cth to cover the field, then there is
inconsistency, otherwise not [ct leans against it covering the field if Cth does
not make it clear].
WK 4.2
10/8/00
Summary:







Where Cth expressly states it is covering the field, State law becomes inoperative.
Strongest general indication that it wants to cover the field is when it expressly says
that it is doing so.
Then there can also be an implied intention to cover the field, in which case the subj
matter is imp to discover this intention.
Can Cth expressly indicate its intention to cover the field & also stay silent? In Wenn
v A-G (Vic) (1948), Cth Act provided for preference only in employment of returning
soldiers & incl an express covering the field provision, whilst Vict Act provided for
preference in employment & promotion of returning soldiers. HCA said there was
inconsistency.
Could Cth expressly cover the field & do so in such a way by leaving some of the field
vacant? HCA said ‘yes’ Cth could expressly cover the field & yet only regulate part
of it.
Could Cth expressly decline to cover the field? Yes. Fed law may evince an intention
not to make exhaustive or exclusive provision with respect to the subj with which it
deals, thereby enabling State laws, not inconsistent with Cth law, to have an operation.
See GMAC Case (1977) & Native Title Case (1995).
Where Cth law intended to cover the field, a law is valid even if it is characterised as
being on the topic (because of multiple characterisation).

HCA clarified sit’n in:

WA v Cth (Native Title Case) (1995)
- concerned validity of provision.
- case makes 2 things clear:
1) Cth Parl could not forbid State Parl from enacting a law. See Brennan J in
Gerhardy v Brown (1985) on p 147.
2) Cth can provide that its law covers the field & applies to the exclusion of
State law (even expressly). See Native Title Case on p 149.

Botany Municipal Council v Federal Airports Corporation (1992)
- confirms the provision in issue.
- HCA said reg 9(2) was valid.
Notes (p 152):


What is the effect of express prov that Cth is not intending to cover the field? Is that
binding? In reality ‘yes’ but ultimately a q for the cts.
Is a statement that Cth does not intend to cover the field a barrier to a holding of direct
inconsistency? No because not talking about the same thing. See Mason J in GMAC
Case.
Express & Implied intention to cover the field





Cth can expressly indicate its intention to cover the field – Dixon J in McLean (1930);
MTIAA v AMWSU (1983).
Cth can expressly indicate its intention not to cover the field – GMAC Case (1977). In
reality ‘yes’ although theoretically not conclusive.
If direct inconsistency is an issue, then a statement relating to indirect inconsistency is
not determinative (although can be relevant).
Cth can’t prohibit State Parl from enacting the law – Gibbs CJ & Brennan J in
Gerhardy v Brown (1985).
Cth can impliedly indicate an intention to cover the field – Isaacs J in Clyde
Engineering v Cowburn (1926). This can be done by considering the nature & scope
of the Fed law – Wenn v A-G (Vic) (1948).
Criminal Law Cases

Kelly v Shanahan (1975)
- Cth has Crimes Act 1914 & offence to steal Cth prop.
- Qld has Cim Code & offence to steal prop incl Cth prop.
- stole public phone (Cth prop).
- was there inconsistency? Yes.

R v Loewenthal (1974)
- demo in Bris that resulted in smashing of a Cth plate glass door.
- Qld Crim Code – offence to wilfully destroy prop.
- Crimes Act – offence to wilfully destroy Cth prop.
- person was prosecuted under State code > was that a valid prosecution?
- were the State laws inoperative because of Cth?
- arg for non-inconsistency: the more laws that protect prop, the better.
- arg for inconsistency: implied intention to cover the field (because no express).
- HCA held: there was an implied intention to cover the field.

R v Gregory (1983) CCA NSW
- a person convicted of a Fed offence imprisoned in State gaol & escaped.
- this was an offence under State Prisons Act (escaping from State prison) &
Crimes Act (escaping whilst under custody for Fed offence).
- did Cth intend to cover the field? Yes.

R v O’Brien (1981)
- Cth hosp in Perth & nurse held at gunpoint & drugs seized, constituting 2
offences.
- WA – offence of robbery (stealing with violence).
- Crimes Act – does not have offence of robbery, only stealing.
- Therefore, robbery under State law & stealing under Cth law.
- Did Cth impliedly intend to cover the field (of all stealing type of offences)?
- Because well recognised distinction, the failure to mention robbery meant that
Cth did not want to cover it & therefore wanted to cover only stealing.
- Classic eg where no mention to cover the field because clear distinction at
common law betw’n 2 crimes & therefore Parl did not intend to cover it but
only the field they dealt with.

Clixby v Western (1988)
- 2 potential offences: person stole Cth car & someone else was passenger.
- NSW – joyriding.
- Cth – does not have an offence of joyriding, only stealing.
- complication – NSW provided that joyriding shall be deemed to be larceny
(which is stealing).
- is there an implied intention to cover the field?
- held: diff offence; mere fact it is deemed means in relation to penalty.
- has the Cth intended to cover the field? Probably in relation to stealing but not
joyriding.

R v Stevens (1991) CCA NSW
- Cth limited largely to importation of drugs, & State can deal with use of drugs.
- Conspiracy to import drugs contrary to Cth law, & conspiracy to supply drugs
contrary to State law.
- Did Cth impliedly intend to cover the field?
- Ct said there was no intention to cover the field as purpose of 2 Acts diff’nt
(Cth concerned with importation & State concerned with use, supply &
possession of drug in NSW) – ie, no inconsistency.

Note: every Cth law expressly deals with the topic, but for the Cth law to expressly
cover the field, it must expressly say “this law is intended to cover the field” or say
what State law’s pos’n should be.

Uni of Wollongong v Metwally (1984)
- In Viskauskas v Niland (1983), HCA held that RDA 1975 (Cth) covered the
field & was inconsistent with Anti-Discrimination Act 1977 (NSW).
- After Viskauskas v Niland was decided, RDA was amended to provide that it
“is not intended, & shall be deemed never to have been intended, to exclude or
limit the operation of a law or Territory (emphasis added)”.
- There is no doubt that Cth could prospectively indicate that it did not intend to
cover the field.
- What was the validity of the retrospective part? HCA held 4:3 (Gibbs CJ,
Murphy, Brennan & Deane JJ; Mason, Wilson & Dawson JJ dissenting) that it
was not effective & Cth Parl could not retrospectively revive State law
previously rendered inoperative by s 109. Cth Parl was bound by s 109 &
cannot therefore make consistent what Const rendered inconsistent (can’t
revive State law which Const has rendered inoperative).
- Note: none of the judges denied that Cth can legislate retroactively
(retrospectively).
- Mason J (dissenting) said s 109 is not particularly concerned with rights. In
order to decide if there is inconsistency:
i)
see if Cth has intended to cover the field
ii)
Cth can retrospectively legislate
iii)
Cth can retrospectively legislate that it intended to cover field or not.



The reasoning in Metwally is unsatisfactory. HCA did not deny that Cth could enact
retrospective laws but maj said Cth could not retrospectively revive State law so that
the Cth did not cover the field. Therefore diffs are created.
Whilst Cth can plainly indicate that it intends to cover the field or not, Metwally
suggests that Cth cannot retrospectively indicate that it did not intend to cover the field
(unsure as to whether it could).
What happens to rest of State law? If inconsistent part can be severed & rest can
survive, then it survives thro’ State equivalent of s 15A of AIA (q is can it survive on
its own, is remaining part viable).
Operational Inconsistency

Hybrid sit’n where laws are not inconsistent but merely the operation of them is.

Victoria v Cth (Kakariki Case) (1937)
- Cth & State made provision for removal of shipwrecks.
- Cth dealt with ships in waters used for interstate or international trade.
- State was more general.
- HCA said no inconsistency but at most, there was operational inconsistency (if
there were simultaneous attempts by Cth & State to remove the same wreck).
If you had ordinary inconsistency, then the State law would be inoperative.

Re Tracey; Ex Parte Ryan (1989) per Gaudron J
- people in armed forces could be tried for crim matters in military cts or crim
cts.
- State law not rendered inoperative but if tried in military ct, then there is an
operational inconsistency in that particular case.
Topic Summary – s 109:
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Apply the 3 tests in order so as to determine whether there is inconsistency.
Firstly, apply the “impossibility of simultaneous obedience test” (direct inconsistency)
– ie, apply both laws simultaneously to see if there is inconsistency.
Then there is the “denial of rights” test (direct inconsistency) – ie, there is an
inconsistency of rights (issue is whether one law takes right away from the other. See
Dixon J in Kakariki Case.
Thirdly, there is the “covering the field” test – whether Cth has expressly (express
words saying it intends to cover the field, thereby rendering State law inoperative) or
impliedly (look at whether there could be a hybrid sit’n where Cth is assuming the
continued existence of State law; look at issue, coverage, nature, scope & subj matter
of Cth law to see if is impliedly covering the field) intended to cover the field.
WK 5.1
14/8/00
External Affairs
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
By s 51 (xxix) of Const, Cth has pwr to legislate for ‘External affairs’
Pwr to make laws with regard to Aust’s relations with other countries.
Introduction to Aust’s independence
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There is some debate as to when Aust became an independent nation.
When Aust was formed it was a self-governing colony in British Empire (ie, it was not
independent).
In 1901, Aust did not have independent relations with other countries, & the pwr to
regulate Aust’s relations legislatively was with Br & Emp. There would be possible
expansion in later yrs as the grant of pwr with respect to defence & external affairs
were seen as “indications that the Const created a polity with potential nationhood”
(Zines). As Barwick CJ said in NSW v Cth (Seas & Submerged Lands Case) (1975),
these pwrs are indicative of the fact that Aust would become the nation state,
internationally recognised & independent”.
Colonies before Fed were self-governing colonies in Br Emp that had separate
independent relations with Br Emp. From 1887, there was a growing movement
towards Fed.
What happens after Fed? Aust was a Cth at the Colonial Conferences.
Vondel incident (1902) concerned a Dutch ship which called at Adelaide; seaman
escaped & was captured & roughed up by Adelaide police; Dutch demanded
compensation; issue was who would pay the compensation – Cth (Aust colony within
the Br Emp).
In 1907, at Colonial Conference, again the Cth was invited.
Aust ctd as a self-governing colony (issues relating to foreign affairs, & ‘war & peace’
were handled by Br).
Br declared war on behalf of the Empire in 1914. War feeling made the Br Dominions
(ie, Can, Aust, NZ, Sth Afr, Newfoundland & Irish Free State) think about
‘autonomy’.
Imperial War Conference of 1917 > Dominions were “autonomous nations of an
Imperial Cth”.
1926 Imperial Conference > defined pos’n of Dominions as “autonomous
communities within Br Emp & equal”.
Versailles Treaty & Imperial Conference of 1930 > increase in asserting their
independence.
The political reality of the degree of independence actually enjoyed by Aust & other
British colonies was recognised in resolutions passed at Imperial Conferences of 1926
& 1930.
Statute of Westminster 1931 – legal statement of independence (Br statutes could no
longer apply to Dominions & in these colonies, laws could be passed contrary to Br
ones); adopted in Aust in 1942 but backdated to 1939 > Aust became a sovereign
nation both politically & legally (gradual process without amendment to text of
Const). This Act accorded Cth pwrs appropriate to political status Aust had acquired
in world community.
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But States did not have pwr to enact leg’n contrary to Br until 1986 with Australia Act.
Aust began asserting its independence in 1939. Br declared war in WWII for itself &
not on behalf of Br Emp as a self-governing colony (like Canada), although Menzies
believed that Aust should declare war because Br did.
So, in terms of when Aust truly became independent, it is still a matter of debate.
Some say 1926 or 1931 & asserted by WWII, or if incl States, some say 1986.
Therefore, Aust speaks to world in one voice, & is a sovereign nation recognised by
world community on international scene (Zines).
Treaties

There are 3 categories of treaties:
1) Major political treaties (Br made these on behalf of Emp until 1926).
2) Commercial treaties (also made by Br on behalf of Emp until 1926 but diff was
that there was increasing recognition that Dominions had right to opt out or in).
3) International agreements (like contracts) – do not go thro’ Br.

Treaties are made by Crown (gov’nt); it is an exercise of exec pwr & is made under
s 61 of Const.
It has been accepted since 1926 that Crown Gov’nt can make treaties on any subj
matter. Gibbs CJ in Koowarta (1982) said “The Gov-Gen, exercising the prerogative
pwr of the Crown, can make treaties on subjects which are not within the legislative
pwr of the Cth” (p 274), & Stephen J in Koowarta said “The pwr of the federal Exec to
conclude treaties upon any subj-matter it sees fit is undoubted” (p 288).
Negotiators from diff countries meet & swap ratification doc’nts. Treaty is then
recorded by United Nations.
In Aust, treaties made by exec have no force in domestic legal sys until they are
implemented legislatively (ie, for the treaty to fall into domestic law, it must be
incorporated by statute).
Exec can make treaty which is then recorded by UN. Ratification is an act by which
exec commits itself to international law. However, s 1 of Const says that such treaties
do not become part of domestic law until they are legislatively passed by Cth Parl (ie,
s 1 does not allow treaties to have domestic effect).
In Bradley v Cth (1973), HCA said that a UN Act does not incorporate it into Aust
domestic law.
Whilst there is pressure if exec has made a treaty to honour it by having Cth Parl
legislatively incorporating it into domestic law, this is purely political & diplomatic
pressure (Zines calls this “international obligation”) & not legal pressure. However,
by s 1 of Const, Cth Parl does not have to pass it. Regardless, a treaty terminating a
state of war is automatically incl in domestic law (Koowarta per Mason J on p 280).
Eg: Racial Discrimination Convention has been implemented into domestic law (& if
it had not been, Aust would have appeared hypocritical).
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There are 2 ways in which a treaty can be implemented (incorporated into domestic
law):
1) Easy way: treaty annexed to this Act is to be part of domestic law, & have a few
machinery provisions. Eg: Racial Discrimination Act 1975 (Cth). This way is safe
but unsatisfactory.
2) Other way: try & enact a statute that embodies the purpose of the treaty.
Treaty implementation
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2 issues:
1) is there any subj matter limitation?
2) if treaty can be implemented, whether it has been.
Eg: defence treaty can be implemented under s 51(vi), GATT treaty under s 51(i). So,
if the subj matter of the treaty corresponds with a subj of federal pwr, no constitutional
prob arises. Only if there is no corresponding subj of fed pwr do you need to rely on
“external affairs” of s 51(xxix).
Zines says that the most controversial issue for many yrs was whether Cth pwr to
legislate under s 51(xxix) to give effect to international agreements was limited to
those that dealt with subjects of a particular kind – ie, were there some agreements
which raised matters of external affairs, whilst others did not? If so, what was
criterion?
R v Burgess; Ex Parte Henry (1936)
- All said that Cth could implement all treaties subject to 1½ limitations (subj to
express & implied Const prohibition; it must not be a sham treaty).
- Even on narrow view, treaty could be implemented > therefore, this case is not
considered to have really decided the matter.
- Cth enacted leg’n regulating air navigation – relied on s 51(i) & failed, & also
relied on ‘external affairs’ pwr (implementing treaty).
- HCA was divided on issue of whether Cth could implement all treaties (3 said
‘yes’, 2 said ‘no’ although probably ‘yes’).
- Latham CJ: Cth could implement any matter; no subj matter as per se was
outside the area of international significance (see p 278 – “To-day all peoples
are neighbours”).
- Evatt & McTiernan JJ: agreed & went further; Cth could not only implement
all treaties but could also implement international recommendations (this is the
broadest view). They regarded a recommendation by an international
organisation as providing a sufficient basis for leg’n under the external affairs
pwr.
- Starke J & Dixon J adopted the narrow view & said Cth, under s 51(xxix), can
only implement treaties if they deal with matters that are themselves external
affairs. Dixon J said if treaty dealt with matter that was “indisputably
international in character”, it could come under ‘external affairs’. Starke J,
adopting Willoughby’s view, said laws would be in pwr only if matter was of
“sufficient international significance” (& Paris Air Navigation Convention
dealt with a matter truly international in character).
- Majority held that the Act departed too greatly from Paris Convention &
therefore invalidated the regs.
- Summary: Burgess shows judicial endorsement of a broad reading of the
external affairs pwr (3:2). The broad view was adopted by Latham CJ, & Evatt
& McTiernan JJ. The narrow view was endorsed by Starke J & Dixon J. The
diff’nt view, however, was not critical in this case.

Koowarta v Bjelke-Peterson (1982)
- 1st case in which it was critical as to which view was endorsed.
- 3 issues:
1) whether Racial Discrimination Convention could be implemented.
2) whether it had been. Qld said ‘yes’ & majority said ‘yes’
3) whether Racial Discrimination Act 1975 (Cth) could be valid under
external affairs pwr without the treaty.
- RDA implemented the terms of RDC (a Convention signed & ratified by Aust)
as a law with respect to external affairs.
- Could Cth implement all treaties? (remember broad view of Latham CJ, &
Evatt & McTiernan JJ; narrow view of Dixon J & Starke J).
- In this case, broad view of pwr to implement treaties was adopted by Mason,
Murphy & Brennan JJ, narrow view was endorsed by Gibbs CJ, Aickin &
Wilson JJ, & a broad/liberal view of narrow view was adopted by Stephen J.
Therefore, it is an unsatisfactory case (in particular since it was Stephen J’s last
day on the job).
- Leg’n was upheld (4:3) > held valid by Stephen, Mason, Murphy & Brennan
JJ.
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-
-
-
Gibbs CJ:
Narrow view was premised on notion of ‘federal balance’. This means the
Const is a federal doc’nt & every prov of Const must be read in context.
Give narrow view to s 51(xxix) so as to preserve the federal balance; resolve
ambiguity in favour of maintaining a federal balance (allow States to retain a
sphere of exclusive authority).
Should not interpret external affairs pwr in such a way as to give it unlimited
legislative authority (limitless potential).
Mason & Murphy JJ criticised this doctrine as being ‘reserved state pwrs’
thinking.
However, it is worth noting the distinctions betw’n these two doctrines. With
‘reserved state pwrs’, there is the assumption that State has a list of what State
can do & what Cth cannot do. The notion of ‘federal balance’ does not assert
that there is a list but says that States must be left with something (with certain
things). This latter notion does not take s 107 as its basis, but rather, is derived
from the overall character of the Const as a federal instrument & from fact that
Cth leg pwr is limited to a defined list of subj matters.
Adopted the narrowest test ever for treaty implementation (p 294.5): pwr only
extended to a treaty whose provs could be described as a matter of external
affairs, apart from fact that it imposed an international obligation or gave rise
to an international concern. Eg: if it regulated relations betw’n Aust residents
& those of other countries (ie, relations with countries, persons & things
outside Aust).
Mason J:
Rejects ‘federal balance’ as being ‘reserved state pwrs’.
Says 2 main things:
1) It is not a viable criterion to distinguish treaties from others > political
judgment as to whether something is appropriate for international action
(see p 283.9).
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2) Policy: Aust needs a broad treaty implementation pwr (in this day & age) to
be an effective operator. Aust’s international stance & participation in
world affairs would be seriously weakened if it is unable to give effect to
its obligations (see p 281.3, 283.3, 283.7).
Aust is party to an international treaty & is therefore bound with other nations
to enact domestic leg’n to achieve the common objective of eliminating all
forms of racial discrimination.
Brennan J:
Agreed with Murphy & Mason JJ & said there is no need to have a separate
international concern.
Criterion: treaty itself is enough evidence to support implementation under
s 51(xxix).
see p 287.1, 287.2
Stephen J:
Treaty had to possess an additional character: it had to be a matter of
“international concern”. For that purpose it was necessary to look at history of
matter, terms of negotiations, recommendations, agreements & diplomatic &
other actions by other countries. From these factors one could deduce the
importance of the matter to Aust’s international relations. If there was
evidence of a sufficient degree of international concern then the subj matter
was one of ‘external affairs’.
ie, whether subj matter affects our relations with other countries.
Racial discrimination was indeed a matter of international concern, evidenced
by 3 decades of diplomatic activity & UN action (minority said irrelevant
because convention concerned racial discrimination within each country & was
not confined to nationals or residents of other countries – subj of convention
therefore did not satisfy external affairs matter).
On the issue of whether RDA could be valid under s 51(xxix) without treaty:
Stephen J: RDA would probably have been valid without treaty because subj
matter seen as against “customary international law”; Aust has an international
obligation to suppress all forms of racial discrimination out of respect for
“human dignity & fundamental rights” (p 291.8).
Mason J: it would have been implemented as both customary international law
or international concern.
Brennan J: said you do not need to discuss if there was no treaty because there
is one.
Like in Burgess, all recognised the 1½ limitations upon s 51(xxix).
See discussion of “sham treaty” which is basically an “escape clause” & is
bullshit (Mason J 284.4; Brennan J 287.3; Stephen J 281.5/8; Gibbs CJ 293.8).
Summary of Koowarta
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Can Cth implement treaties on all subj matters (issue 1)?
Args for & against made more fully here than in Tasmanian Dam Case (1983), esp on
‘fed balance’ & args for & against broad & narrow view. Now in favour of broad
view.
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Mason, Murphy & Brennan JJ saw external affairs pwr as enabling Cth Parl to
legislate to implement treaty obligations.
On other hand, Gibbs CJ, Aickin & Wilson JJ adopted view that a law which gave
effect within Aust to an international agreement would only be a valid law under
external affairs pwr if the agreement was with respect to a matter which itself could be
described as an external affair.
Although Stephen J sided with Mason, Murphy & Brennan J to uphold the leg’n, he
took the view that treaty had to be a matter of “international concern” for the external
affairs pwr to be used.
RDA would probably have been valid under this pwr [s 51(xxix)] even without treaty
because dealing with
- customary international law (Stephen J, Mason J)
- international concern (Mason J, Murphy J)
WK 5.2
17/8/00
External Affairs ctd
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The only relevant issue today from Koowarta is whether RDA Act was valid without
treaty (to which 3 judges said ‘yes’).
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Tasmanian Dam Case (1983)
- This case resolved the issue of treaty implementation.
- There were 3 issues:
1) whether there is any subj matter limitation on Cth’s treaty implementation
pwr (ie, whether Cth could implement all treaties or only those dealing with
external affairs). It was held that Cth could potentially implement all
treaties subj to 1½ limitations. So, subj to Cth prohibition, Cth can
implement all treaties.
2) dealt with the test of treaty implementation – this is the main prob Cth
faces ( the issue is not whether it can but whether has it done so).
3) whether treaty implementation is only talking about implementing
obligations – answer is ‘no’.
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The 1st issue was dealt with by Koowarta.
HCA is not technically bound by its own decision but if it does not give leave
to challenge it or re-examine it, it will follow it.
What did Koowarta stand for? HCA said it stood for representing the view of
Stephen J – narrowest view of maj decision (?).
Minority in Dam (Gibbs CJ, Wilson & Dawson JJ) hypothetically took the
view of Stephen J but thought it was too loose & decided Act was even invalid
on Stephen J’s view.
Mason J notionally took Stephen J’s view & then demolished it & held Act
was valid even if use Stephen J. Maj upheld s 9(1)(h).
Federal balance doctrine was also dealt with.
Mason J, adopting O’Connor J’s view in Jumbunna Coal Mine (1908), said
you should lean to broad view.
Gibbs CJ said to keep federal balance, you should lean toward narrow view.
He says that s 51(xxix) is inherently ambiguous & when interpreting it you
should read it in context (that is unexceptionable) & not give it such an
interpretation so as to render rest of Const unnecessary. If Cth can implement
all treaties, it means Cth could potentially occupy a very large field (p 306.6).
Therefore, to preserve federal balance, adopt a narrow interpretation.
Dawson J said external affairs is a broad pwr, & for treaty implementation,
treaty must deal with external affairs.
Majority in Dam (Mason, Murphy, Brennan & Deane JJ) adopted broad view
(4:3), exemplified by Mason J. Mason J looks to Stephen J because seen as
binding notionally, but sees it as too elusive & that there is no acceptable
standard to determine whether it is of “international concern” (see pp 300-1).
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For Mason J, “international concern” is established by entry into treaty (“The
existence of international character or international concern is established by
entry by Aust into the convention or treaty” p 301).
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Gibbs CJ:
Adopted narrow test; would want more precise test that Stephen J but it does
not matter because there is no “international concern” here (p 307.8).
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Deane J:
It is Deane J’s test that has been adopted. Richardson (1988) established this
as the appropriate test.
“The law must be capable of being reasonably considered to be appropriate &
adapted to achieving what is said to impress it with the character of a law with
respect to external affairs” (p 312) – ie, there is a ‘margin of appreciation’. Ct
is asking whether Parl could reasonably have believed the law to be
appropriate & adapted to … [reasonable, appropriate, adapted test with a
margin of appreciation].
This is a more liberal test but it was narrow because Deane J held all provs of
s 9(1) invalid except (h), whilst Mason J said all of those were valid.
Deane J said his test needed to be looked at with the issue of “reasonable
proportionality” (for a law to reasonably be considered to be appropriate &
adapted to achieving what is said to provide it with the ‘external affairs’
character, there needs to be a reasonable proportionality betw’n the designated
purpose or object & the means which the law embodies for achieving or
procuring it).
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Summary: in later cases like Richardson, judges said that ct majority had
adopted Deane J’s test with its ‘margin of appreciation’.
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The 3rd issue concerned whether treaty implementation is only talking about
implementing obligations.
When you undertake obligations, you should honour them.
Tasmania said you need obligations, & argued that this (p 296) is not &
therefore cannot implement them – this arg failed by 4:3.
In Richardson, Brennan J says that in Dam he argued that treaty
implementation refers to benefits & not just obligations.
Maj in Dam said there is no need for obligations (Mason J on 303.2 & 304.2/5,
Murphy J on 309.1, Deane J) – ie, external affairs pwr in relation to
international agreements was not confined to fulfilment of obligations.
Brennan J (in maj) said he did not need to decide issue of obligation because
there was one here (treaty was obligatory).
Gibbs CJ, Wilson & Dawson JJ said you do need obligation & there is not one
here.
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Summary of Tasmanian Dam Case
1) Can Cth implement treaties on potentially any subj matter? Yes.
2) What is the test of implementation? Deane J’s statement with its margin of
appreciation.
3) Treaty implementation is not just confined to obligations, but can also incl benefits.

Richardson v Forestry Commission (1988)
- area of Tasmania that Cth wanted to know if had important World Heritage
status, & therefore, set up a royal commission to check this.
- pending the outcome of commission’s inquiry, Cth imposed a regime on that
area prohibiting desecration (prevent logging in interim period of 1 yr).
- RC said only part was World Heritage.
- q in meantime was whether this law (temporary 1 yr moratorium) was valid.
- HCA said Act was valid – similar leg’n, same treaty.
-
test of implementation:
HCA (all members) indicated that ‘margin of appreciation’ test of Deane J in
Dam was appropriate.
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Majority: leg’n aimed at stopping logging pending result; upheld leg’n & said
external affairs pwr extended to “support a law calculated to discharge not only
Aust’s known obligs but also Aust’s reasonably apprehended obligs”.
Deane & Gaudron JJ, who dissented, said yes leg’n was aimed at stopping
logging pending result but if you analyse leg’n, it was disproportionate (there
was a lack in ‘reasonable proportionality’ betw’n prohibitions & designated
obj) – could not lift up a leaf without breaching Act (too extreme).
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Whether you could have restrictions imposed on anticipated obligations of
treaty implementation?
Mason CJ & Brennan J said ‘yes’ “if reasonably apprehended obligations”.
Industrial Relations Act Case (1996)
- complex IRA.
- 4 points come out of this case:
1) implementation: HCA again affirms Deane J’s test with its margin of
appreciation (p 314.2, 315.1) – “To be a law with respect to ‘external
affairs’, the law must be reasonably capable of being considered
appropriate & adapted to implementing the treaty”.
Only purposive pwr is defence pwr [s 51(vi)]. Dawson J says that external
affairs is not a purposive pwr & so you cannot use ‘reasonable
proportionality’.
Nobody asserts that s 51(xxix) is a purposive pwr but the treaty
implementation aspect of it is a purposive pwr & therefore, as Deane J
says, it is appropriate to use ‘reasonable proportionality’ (see p 312.6,
289.9, 316.3/5).
HCA says: apply ‘margin of appreciation’ test & do not worry about
proportionality.
Winterton says: treaty implementation is purposive & therefore it is wise to
employ ‘reasonable proportionality’.
2) partial implementation: almost never the case that every prov of treaty is to
be implemented (does not even have to all be in 1 Act).
Deane J in Dam distinguishes betw’n partial implementation & inconsistent
implementation. If you implement benefit & not detriment (in a
dependency sit’n), it is inconsistent implementation. If you do X & Y, but
subj to A & B, this is also inconsistent. But implementing some of obligs
& not all is OK.
3) aspirations: they pick up & adopt a passage from Zines (p 291) & say there
has to be some sort of specificity in treaty (p 313.6).
4) recommendations:
UN General Assembly Res’n is not a treaty & not binding in international
law. What about implementation of statements (not treaty & not binding)?
There is no answer. Evatt & McTiernan JJ in Burgess say ‘yes’. Murphy
& Deane JJ in Dam say ‘could be’. Strongest case is IRA which relied on
Burgess (p 317 Note 5 & Zines p 318.9) in relation to ILO conventions &
recommendations. HCA said that ILO recommendations implementing a
treaty that Cth has adopted is OK.
UN convention is a treaty; ILO convention is a treaty; ILO
recommendation implementing a treaty adopted by Cth is OK.
Recommendations per se have not yet been answered.
Geographical externality
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Polyukhovich (1991) p 275, 735
- In 1988 Cth amended War Crimes Act to provide for trial of Austs who had
committed war crimes in Europe during WWII.
- Was this valid under external affairs pwr?
- It was held that external affairs pwr applied & leg’n valid because war crimes
in Europe were matters geographically external to Aust.
- External affairs pwr extends to “places, persons, matters or things physically
external to Aust” (Dawson J).
- 2 judges (Brennan & Toohey JJ) disagreed. The mere fact that was something
geographically external was not enough > need also a sufficient interest.
Toohey J said there was an interest (war Aust was involved in & war criminal
was resident of Aust). Later in IRA, they agreed with other judges & said it
was OK.
- 5:2 > mere fact that something was geographically external to Aust is enough
to fall into ambit of external affairs pwr. Toohey J was also liberal but added
interest.

Horta v Cth (1994)
- Aust & Indonesia entered into treaty agreement. Aust’s implementation of
Timor Gap Treaty was challenged by Horta on basis that treaty was contrary to
international law.
- This case confirms:
1) Cth can regulate on matters geographically external to Aust & Timor
Treaty was such (p 276.8).
2) International law is not a constitutional limitation. Const can breach
international law (p 277.4).
Relationship betw’n s 51(x) & s 51(xxix) – see Zines p 25

Bonser v La Macchia (1969)
- s 51(x) gives Cth pwr over fisheries in Aust waters beyond territorial limits.
- This was interpreted to mean:
Aust waters > waters up to 200 miles from coast
territorial limits > 3 miles
(traditional broad view – ie, 3-200)
- States had control over fisheries within 3 miles of coast but Cth had control
over other 197 miles.

NSW v Cth (Seas & Submerged Lands Case) (1975)
- Cth claimed sovereignty over sea via geographical externality.
- territorial ended at coast; territorial sea was therefore geographically external.
- Cth had leg pwr under geographically external aspect over everything beyond
low-water mark.
- Does this change Bonser?

Everything is under geographically external to Aust, & Aust ends at coast, therefore
does s 51(x) limit s 51(xxix).
So, therefore, everything except fisheries which only can from 3 miles out.
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s 51(xiii) gives Cth pwr over banking except State banking.
s 51(xx) gives Cth pwr over financial corporations (which normally incl banking
corporations).
Can Cth regulate a State banking corp? Does s 51(xiii) limit s 51(xx)? HCA said
‘yes’.
s 51(xxxi) says Cth can acquire prop on just terms (compensation) if acquisition is
within leg pwr. See Bank Nationalisation Case (Zines p 25).
HCA sees s 51(xxxi) as an important civil rights prov. Does it apply to all pwrs? Yes
(except possibly the territories pwr).
Is the sit’n betw’n s 51(x) & s 51(xxix) analogous to sit’n betw’n s 51(xiii) & s 51(xx),
& s 51(xxxi)?
There is no authoritative answer yet.
In Raptis (1977), 3 (Brennan, Gibbs & Stephen JJ) said s 51(x) does limit s 51(xxix),
whilst Murphy J said ‘no’. John Waugh said same as 3 judges.
Winterton says there is no analogy as s 51(x) is not limited to being phrased as a
restriction like others are.
Murphy J’s summary from Dam of ‘external affairs’ pwr

To be a law with respect to external affairs it is sufficient that it:
a) implements any international law
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ie, implements a rule of customary international law.
no actual decision established it but probably accepted by HCA.
today there is dicta in its support:
- Murphy J in Dam.
- Stephen & Mason JJ in Koowarta – even without treaty, RDA may have been
valid under this pwr because of customary international law.
- Brennan & Toohey JJ in Polyukhovich (although both held that Act had not
done so) – if you purport to implement a rule of customary international law,
do so.
easy way of implementation is not easy for public.
b) implements any treaty
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yes (subj to 1½ exceptions).
this is law (Dam) & followed in subsequent cases.
Dawson J in IRA – against it but whilst Dam stands, he said he accepts it.
if more Coalition-appointed judges to HCA, it is likely that Dam will be reopened.
c) implements any recommendation or request
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no decision on this but it is VIP because covers a wide range of topics than treaty.
never been established by decision of ct.
probably would not represent maj of ct (Kirby J would accept that).
there is dicta in support:
- Evatt & McTiernan JJ in Burgess.
- Deane & Murphy JJ in Dam.
issue in IRA – precedent supporting implementation of recommendations when deal
with implementation of treaties adopted by Aust (ancillary treaty).
What is implementation test for recommendations? Treaty implementation is the
liberal test of Deane J (in Dam & followed in Richardson & IRA) & incl ‘margin of
appreciation’. For recommendations, HCA would not adopt the same test & doubt that
‘margin of appreciation’ would be included. It would be was this necessary way
rather than appropriate way & not incl ‘margin of appreciation’ (ie, close
implementation to preserve federal balance).
d) fosters (or inhibits) relations betw’n Aust or political entities, bodies or persons within
Aust & other nation States, entities, groups or persons external to Aust
1) deals with Aust’s relations with other countries.
2) & deals with Australians & persons/orgs overseas.
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1) – this is the core of the pwr, as noted by Brennan J in Koowarta.
R v Sharkey (1949) – HCA said external affairs pwr supported Crimes Act which
made sedition (words alleged to cause trouble) a criminal offence (“disaffection
against the gov’nt or Const of any of the King’s Dominions”). HCA said external
affairs pwr did support this because Cth Parl can authorise action to prohibit activities
in Aust that will affect our relations with other countries (eg: in relation to Yugoslav
protests – but now subj to implied freedom of speech).
Sharkey has been endorsed by many (see Mason J in Koowarta who says this extends
to friendly relations with other countries, not just with Dominions – p 284.9).
Re Blair (1988) – case of full Fam Ct; was prov in Family Ct Act regarding reg’n &
enforcement of foreign custody orders valid? Yes, valid under ‘external affairs’ pwr
as it deals with other countries, Austs & relations with people in other countries (d) &
matter of international concern (f) – ie, relied on (d) & (f).
2) – broader pwr.
could support laws indicating who you may communicate with overseas, regulating
relations of people in Aust with other people & orgs overseas.
again no decision other than Blair which is not HCA.
there is dicta that suggests ‘yes’ it is valid:
- in Polyukhovich (not only matters geographically external to Aust but also
relations).
- Murphy J (on left) in Dam.
- Gibbs CJ (on right) in Koowarta (see p 294.5).
- therefore, probably not even Callinan J would deny this.
e) deals with circumstances or things outside Aust



ie, geographical externality.
established by HCA in Polyukhovich & Horta, & as dicta in IRA.
Brennan & Toohey JJ said you need something extra but later in IRA agreed with
other judges & said it was OK.
f) deals with circumstances or things inside Aust of international concern


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
no decision established this other than Blair (Fam Ct case).
debatable but has support from Mason & Murphy JJ in Koowarta purely on matter of
international concern; from Stephen J in relation to treaty implementation.
prob: potentially limitless.
Brennan J, therefore, has tried to intro limit (if international community established
standards, then observation of standards might be regarded as a matter of international
concern).
difficult because limitless topic.
Mason J in Dam (p304/5): all topic is ‘international concern’; treaty (with narrower
ambit) will be regarded as narrowing the topic.
WK 6.1
21/8/00
Corporations
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A corporation is an artificial body given legal personality (not physical person).
Therefore, can have bodies with limited liability & if it goes bust, corporation does &
not indiv.
s 51(xx) gives Cth pwr over 3 types of corporations:
- foreign (corporation incorporated overseas)
- financial (type of activity & not its solvency)
- trading
‘Corporation’ means s 51(xx) or Const corporation. Non-corporation means not 1 of 3
(eg: charity corporation).
The main issues are issues of ambit (breadth of pwr) & issues of scope
Ambit:
1) Can Cth incorporate bodies under s 51(xx)? No.
2) Can Cth regulate internal relations/affairs of these bodies?
3) Regulate external relations?
4) Regulate incidentals (incidental pwr) – reg’n of non-corporations involved in the
activities of corporations; whether pwr extends to holding cos (if 1 of 3 it is OK,
prob only if not 1 of 3).
2 issues of scope:
1) What is meaning of trading, financial (or foreign) corporation?
2) Does pwr extend to individual corporations?
Strickland v Rocla Concrete Pipes (Concrete Pipes Case) (1971)
- Like in Koowarta as to whether Murphy J should have sat, in this case it was
Barwick CJ since Act was dear to his heart.
- 3 issues need to be addressed:
1) What is status of Huddart, Parker?
2) Whether leg’n in the form in which held invalid in Huddart, Parker would
now be valid.
3) Reading down.
-
-
-
Facts:
Case concerned constitutional validity of provs of TPA 1965, &, specifically,
whether provs which regulated the intrastate trading activities & practices of
trading or financial corporations could be supported by s 51(xx).
TPA 1965 was unsatisfactory.
Agreements had to be lodged with gov’nt & checked with TP Commissioner.
s 35 did not take note of Cth’s pwrs & intro s 7 (‘reading down’ section) > prob
with reading down is that if it fails, whole Act fails, which is what happened –
better to ‘read up’ (p 216.1).
Huddart held invalid s 5(1) & s 8(1) of Australian Industries Preservation Act
which prohibited corporations from engaging in anti-competitive behaviour &
incl intrastate stuff. HCA held leg’n invalid by 4:1 [1st 3 (Griffith CJ, Barton
& O’Connor JJ) applied ‘reserved State pwrs’ doctrine, & Higgins J, with
Isaacs J dissenting].
-
Issue: since ‘reserved State pwrs’ was basis for reasoning in Huddart, once
doctrine exploded in 1920 in Engineers’ Case, does this liberate the pwr? This
was looked at in the Bank Nationalisation Case (1948), but only 4 out of 7
judges looked at this pwr.
-
Barwick CJ:
Was Huddart correctly decided?
Looks at leg’n & reasoning in Huddart.
s 51(i) gives interstate & foreign commerce to Cth; in terms of intrastate, s 107
says that what is not given exclusively to Cth, stays with States [strong pres
that can be rebutted].
s 51(xx) is ambiguous & does not say whether intrastate is included –
therefore, read as subj to notion that intrastate commerce is left to States.
Huddart stated that s 51(xx) does not incl intrastate trading corporations as this
had been reserved for States.
Q: was that view in Huddart correct? Barwick CJ & rest of HCA say ‘no’
because ‘reserved State pwrs’ doctrine is incorrect (‘reserved State pwrs’ was
“exploded & unambiguously rejected” in 1920).
Says that ‘reserved State pwrs’ reversed the Const (p 206.9). Huddart based
on ‘reserved State pwrs’ & therefore should be overruled, & s 5(1) & s 8(1)
were valid because they regulated matters at heart of pwr, mainly “trading
activities of trading corporations”. Huddart was overruled – “ss 5(1) & 8(1),
in my opinion, were valid because they were regulating & controlling the
trading activities of trading corporations & thus within the scope of s 51(xx)”.
Note:
1) Corporations falling in s 51(xx) incl not only corporations incorporated by
State but also by Cth (Barwick CJ p 206.7).
2) Suggestion that pwr does not extend to incl regulating everything about
trading corporation (Barwick CJ p 207.7).
3) Adopted by Murphy, Mason, Deane & McHugh JJ.
-
-
-
-
On scope issue, Gibbs CJ dissented & upheld Cth provs, & Menzies J said it
extended to regulating the business of these corporations (p 214.1).
-
Relating to 3 issues of this case:
1) Huddart, Parker has been overruled.
2) If leg’n limited to regulating trading corporations, whether it is valid?
‘Yes’ if regulating trading activities.
3) Was Act a valid exercise of pwr? ‘No’ because s 7 failed.
-
Without s 7, relevant part of s 35 could not be read down because it is
undistributed. Confirmation of Burgess principle of ‘reading down’ [cannot
use s 15A to read down undistributed or composite phrases].
If s 7(1)(a) stood alone, then s 35(1) could have been read down – trade &
commerce >interstate & foreign & therefore law under s 51(i).
If s 7(2) stood alone, then again s 35(1) could have been read down – to make
valid under s 51(xx) by referring to agreements made by s 51(xx) corporations.
s 35(1) cannot be “disintegrated” by s 7 into series of paras.
s 7(1)(a) read Aust commerce down; s 7(2) limit persons; could not read down
these things simultaneously.
-
-
McTiernan J & Gibbs CJ said you could work out by applying common sense;
read down to extent that you have to; read as series of provs – all kinds of trade
limited to persons & all kinds of persons limited to trade.
Summary (Concrete Pipes Case):

Concrete Pipes Case established that the pwr extends to regulating the trading
activities of trading corporations, & may well be wider.
WK 6.2
24/8/00
Corporations ctd

Actors & Announcers Equity Association v Fontana Films (1982)
- 2 main issues:
1) Corporations pwr issue & scope of s 51(xx).
2) Validity of s 45D(5) > Communist Party Case.
1) Corporations pwr – What does this case add to corporations pwr?
- s 45D(1)(b)(i) prohibited trade unionists engaging in a boycott of a trading
corporation in relation to where likely effect of action was to cause “substantial
loss or damage to the business of the 4th person or of a body corporate that is
related to that person”.
- This law was not directed to corporations; here law was directed at noncorporations (individuals) to protect corporations.
- In corporations pwr, it is directed at corporations (restricting trading
corporations).
- HCA held valid because basically same subj matter in both cases (trading
activities of corporations) – one is restricting, one is protecting.
- 3 points:
1) Law can be valid under s 51(xx) even if not directed at s 51(xx)
corporations pwr [did not extend law here because also trading activities in
both cases].
2) Barwick CJ in Concrete Pipes said could be wider than trading activities
but not here. In this case, many judges said do not have to limit it to any
particular activity (see Mason J on p 219.3; see Murphy J who said it
applied to everything).
3) Slight expansion because what is protected here is the business (argued that
business is wider term than trading activities).
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s 45D(1)(b)(i) was valid under s 51(xx) because law in respect to corporations because
it protected by direct legal effect the trading activities.
On wider ambit of pwr, Mason J said it was wider although not necessary in this case.
Murphy J took wider view (wider than anyone else’s; p 227.4 – 225) & said pwr
extends to every conceivable topic. This view is even wider than Deane J’s [who says
it extends to formation in the Incorporation Case (1990)].
3 judges (Mason J on p 220.8, Aickin J & Stephen J) said it extends to holding cos
(body or corporation that has no other claim to be in s 51(xx) than the fact that it is a
holding co; it controls a s 51(xx) corporation). Murphy J disagrees. There is no clear
decision yet.
See also Barwick CJ (p 207.6).
See also Gibbs CJ (p 221.8) who says law that incl in its sweep other matters can still
incl trading activities.
Q: when law is not directed at trading activities but indivs, how do you determine it is
a law with respect to trading activities? See Gibbs CJ (pp 221-222), Brennan J
(p 223.5, 224.2).

Law here was regulating trading activities & therefore fell within pwr. In Concrete
Pipes it restricted & here it protected (ie, converse in this case of Concrete Pipes).
Discrimination & significance not important here.
2) Validity of s 45D(5)? HCA held invalid by 5:2.
- Const confers pwr on Cth with regard to various subjs & when pwr is exercised
there must be link with those subjs (& it is up to judiciary to determine that
link).
- If Cth is relying on s 51(i) to regulate on interstate & foreign commerce, then
there has to be presence of interstate & foreign commerce.
- Can only regulate bodies that exist in real world (determined by judiciary) –
constitutional fact must exist & it cannot be deemed & it is up to judiciary to
determine if fact exists.
- Eg: if Cth deems Syd-Bathurst is foreign commerce, it is
i)
acting ultra vires in that purporting to regulate something not in pwr.
ii)
breaching SOP because takes away judiciary’s role.
-
-
-
-
Communist Party Case (1951)
In Dec 1949, Menzies’ policy was to outlaw Communism & passed Act in
1950.
Act declared Communist Party a banned organisation & prohibited members
from certain public service & seized assets.
Act was held invalid by 6:1 (Latham CJ dissenting) – not because Cth could
not ban subversive gps but because went about it wrong way.
Cth had pwr under s 51(xxxix) (implied pwr) to protect the Const. But could
not declare something was a threat & then ban it [need to leave to judiciary to
determine whether threat – ie, up to ct to determine if link really existed in real
world (if gp was subversive), otherwise Cth can do anything – dangerous].
Fullagar J: “a stream cannot rise higher than its source” (p 87.5). See also
“lighthouse” eg (p 87.7).
The constitutional fact must exist & has to be left to judiciary to see if it exists
& cannot be deemed (ie, must be determined by judiciary).
Cormick v Cormick (1984)
Under marriage pwr of s 51(xxi), Cth can regulate children of the marriage
(children of either party to the marriage).
Cth wanted to extend its pwr over children to incl children that were members
of the household (ie, deeming someone to be a child of the marriage).
HCA said not valid by 6:1 (Murphy J dissenting).
Maj said child of marriage is a narrower concept; up to ct to determine.
Murphy J dissented not on principle but felt that child of marriage is wide
enough to incl that.
3 principles:
1) Cth Parl cannot deem constitutional facts.
2) It can, however, reverse the onus of proof regarding constitutional facts
(see p 227).
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-
-
-
-
-
-
-
ie, Cth Parl can say something should be deemed to be the case unless it is
proved that it is not because still leave cts to decide (if ct unable to prove
negative, then positive applies).
In Williamson v Ah On (1926), certain people should be deemed to be
immigrants unless they proved they are not.
In Milicevic v Campbell (1975), anyone in possession of drugs is deemed to
have imported them unless prove otherwise (might be difficult to prove
negative).
Q: What if make onus of proof particularly hard? Eg: above case deeming
prov with “unless proved beyond reasonable doubt” added to it (ie, raise
standard of proof). HCA would probably hold it invalid, although no law on
this.
3) It can, however, subject to possible dissenting views of Gaudron & Murphy
JJ, deem non-constitutional facts.
Eg: it can deem Japanese visits to be Brazilian ones.
It cannot say a non-alien is an alien, but it is within pwr to say Japanese visit is
a Brazilian visit.
Within its pwr it can deem whatever it likes but it cannot deem something into
the pwr.
s 45D(5) said that if 2 or more trade unionists engage in secondary boycott
which damages business of corporation, union deemed to be part of it unless it
can show it took reasonable steps to prevent them.
Constitutional fact: damages business of corporation.
Q: is there a link betw’n trade union & damages business of corporation?
HCA held the law invalid by 5:2 & said no necessary link [anti-unionists saw it
as valid; more neutral saw it as invalid]. Stephen, Mason (p 225.8), Murphy,
Aickin & Brennan JJ held invalid for breaching Communist Party Case.
Mason & Brennan JJ said they are not same evidentiary provs like in
Williamson & Milicevic. Mason J: has to go further to escape deeming – it is
law about trade unions & no connexion with corporations (it is beyond pwr).
Brennan J: do not merely reverse ordinary onus of proof but they preclude
inquiry into whether org has engaged in such conduct to which liability is
attached (beyond reach of law).
Murphy J: Communist Party principle involves an interference with fed jud
pwr by requiring cts to find something to be the case which is not (p 227.1).
Gibbs CJ (dissenting) is aware of Communist Party principle but finds that
facts here do not breach it. They are not denying any Constitutional fact
because it exists (there is damage to business of corporation); ct asked by Parl
to suppress activities considered detrimental – falls within incidental pwr
conferred by s 51(xx) to deem union [see p 228.3/6].

R v Ludeke; Ex Parte BLF (1985)
- Under leg’n, Fed Min could de-register a union if there had been a finding by
IRC that they had breached an award.
- In leg’n there was a prov that said if 2 or more unionists breach award, union
deemed unless show it took reasonable steps to prevent. Was this valid?
- s 45D(5) was invalid in Actors Equity. Here it should also be invalid.
- HCA, however, distinguished Actors Equity by saying in this case it fell into
category 3 – deeming but deeming a non-constitutional fact. It was deeming
within registration/de-registration pwr (within industrial relations pwr).

Tasmanian Dam Case (1983)
- Pwr not limited to just trading activities & incl activities for the purpose of
trade.
- Use corporations pwr to stop building of dam.
- Trying to regulate something antecedent to selling of electricity, the dam [dam
> hydro-electric pwr station > electricity].
- Main sections were ss 10(2) & (3), & s 10(4) [latter relied on intermediate
ambit of pwr; wider than trading activities but not widest pwr].
- 5 judges held s 10(4) valid (Mason, McHugh, Brennan & Deane JJ & Gibbs
CJ).
- ss 10(2) & (3) held valid by 4:3 (Gibbs CJ, Wilson & Dawson JJ dissenting,
saying that ambit is regulation of trading activities). Mason J in maj adopts
Griffith CJ in Huddart.
- See Murphy J who says corporations pwr extends to any command affecting
behaviour of corporation (p 232.7).
- See Deane J who cannot divorce trading from non-trading acts.
- In this case, only 3 judges take broad view.
- Sig of this case is that a clear majority upholds s 10(4) which means pwr
extends to regulate activities done for purpose of trading (this is not necessarily
a trading activity).
- Gibbs CJ, Wilson & Dawson JJ dissented on s 10(4), latter 2 almost taking a
purposive view of pwr.
Summary (Dam):
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

s 10(4) valid – pwr extends to regulation of activities which are not necessarily trading
activities but are done for purposes of trade.
What if it does not make that clear? It is still OK.
Dawson J in a speech commented on impact of case (pp 237-8): says that wider view
(natural Griffith CJ view) is view of maj in Dam. Winterton says this is incorrect
because wider view was only endorsed by 3 judges in Dam (Mason, Murphy &
possibly Deane JJ).
Summary:

Look at 3 levels of pwr:
1) Lowest: extends to regulation of trading activities of trading (& financial)
corporations > this is unanimous view of all judges (Concrete Pipes) & everyone.
2) 2nd level: extends to regulation of activities for purposes of trade (these do not
need to be trading activities) > majority in Dam (5).
3) Widest: Griffith CJ natural construction (any law that says trading corporation
should or should not do is within pwr subject to Constitutional prohibition) > see
Dawson J’s speech & Winterton’s comments above.
WK 7.1
28/8/00
Corporations ctd

Re Dingjan; Ex Parte Wagner (1995)
- Complicated case because 1st time HCA faced sit’n that appeared Cth Parl was
trying to regulate act not directly related to corporation.
- Eg: would it be in pwr to regulate the driving of person driving vehicle made
by a s 51(xx) corporation (subj to Act)?
- In this case, contractors (Wagner) made contract with Dingjan (sub-contractor)
to supply timber to Wagner who was going to sell it to Tasmanian Pulp &
Forest Holdings (trading corporation).
- ie, contract betw’n A & B for supply of timber by B to A & A then supply it to
trading corporation.
- Relevant contract is betw’n A & B (p 239.8).
- s 127A(b) – in relation to business of a s 51(xx) corporation. Because contract
betw’n A & B (which A was going to sell to trading corporation), was this a
sufficient link betw’n prov & trading corporation?
- HCA said ‘no’ by 4:3 because there was no inevitable impact of the matter
regulated on the business of the trading corporation at all.
- Could it be read down? HCA said ‘no’ (this was excessive & purely for policy
reasons – ct saying to Parl do not just throw in trading corporation anywhere &
expect us to say it is a s 51(xx) corporation because we won’t).
- It did relate to business but prob was that you could have had provs in contract
that had nothing to do with it [s 127A contained other provs, & if (b) severed &
kept others, IRC would not be happy anyway].
-
-
-
-
2 points of maj:
Q: When can Cth regulate non-corporations under s 51(xx)?
Brennan J (pp240-1): to be in s 51(xx), Cth needs to discriminate betw’n
s 51(xx) corporations & those that are not. He notes Gibbs CJ’s test of
‘significance’ (note that Gibbs CJ & Stephen J do not agree on ‘significance’
anyway) [p 241.5].
VIP passage from Brennan J is on p 242. A law in respect of constitutional
corporations must affect them in a “discriminatory manner”. Brennan J does
not endorse the widest view in Dam.
Dawson J says that it is a law on constitutional corporations if the “personality
of the persons bound is a significant element of the law itself” (p 243.5).
Toohey J says there must be a “substantial connection” (p 243.9 & see Mason J
in Dam on p 232.1) – this is the q anyway.
The relevant test is that of McHugh J: a law will be under s 51(xx) if it will
have some practical or legal significance (ie, impact) for the corporation.
See p 245.3 (& Mason J in Dam on p 231.9) & p 245 para 3.
Correct interpretation of Murphy J’s test is that any law directed at corporation
telling it to do or not do something will suffice. This is analogous to wide view
of Mason, Murphy & Deane JJ in Dam. It represents an endorsement of 3rd
approach (most liberal) in Dam.
Law can regulate activities, functions, relationships or business of a s 51(xx)
corporation. By reference to activities or functions of a s 51(xx) corporation, a
-
-
law regulates conduct of those who control, work for, or hold shares or office
in those corporations [ie, extends to regulation of corporations & its
employees, shareholders & officers].
Eg: way you drive car will not have impact on business of corporation.
Reading down:
Cannot read down composite or undistributed phrases. Toohey J states that for
s 15A of AIA to operate, the law must indicate a “standard or test” that can be
applied so as to limit & preserve the validity of the law.
s 127C(1)(b) – in so far as it relates to or substantially affects the business.
See Gaudron J on ‘reading down’ (p 248.8/9).
Summary (Re Dingjan):


Deals with situations where law is not directed at s 51(xx) corporations, & there the
test is that of McHugh J who says law will only be within s 51(xx) if it has some
practical or legal significance for the corporation.
It can also apply where it is directed at s 51(xx) corporations like in Actors Equity
(protect business from secondary boycotts).
Notes (p 250):


In IRA Case, Brennan CJ, Toohey, Gaudron, McHugh & Gummow JJ said that a law
preventing 3rd parties from entering into agreements with a s 51(xx) corporation for
the purpose of preventing or hindering the corporation in its trading activities, is
closely connected with the regulation of its trading activities so as to be a law with
respect to a s 51(xx) corporation.
Authority for regulating employees is Murphy & McHugh JJ in Dam. For internal
management of corporations, see Zines pp 104-7.
Scope

What is the meaning of trading or financial corporation?

St George County Council (1974)
- Raised the issue of whether you look at the purpose for which the body was
formed (this would be easier) or at its current activities (character can change).
- HCA divided on the issue.

Adamson (1979)
- There was a clear HCA decision in favour of “current activities”.
- Was football club a trading corporation?
- 2 issues:
1) What is test? Is it “current activities” or “purpose” in order to characterise
corporation?
2) How do you deal with proportionality (where trading is not sole activity or
where it is trading for some ulterior purpose)?
- HCA held by 4:3 that you look at “current activities”, & club & league were
held to be trading corporations in view of its promotion of football.
-
-
Most of maj: trading was principal activity of these bodies.
Min: said look at purpose for which it was formed (promote football) & Gibbs
J said even if you looked at activities, it should be a high one (ie, what is the
predominant or characteristic activity).
Maj: look at activities & ask out of all them is trading a substantial proportion
of them (Barwick CJ, Mason, Jacobs & Murphy JJ).

State Superannuation Board (1982)
- Dealt with a financial corporation.
- Vic SSB is a gov’ntal body with 2 functions:
1) administers the Vic Public Scheme.
2) invests the contributions from members (investment in various financial
markets was quite substantial & a lot of employees employed for that
purpose only).
Was this a financial corporation?
- HCA maj held it was a financial corporation (3:2 because Brennan J had been a
judge earlier in the matter & Dawson J had been Counsel in the matter).
- All agreed that test of whether financial or not, or trading or not, is the same
(whether “current activities” or “purpose”).
- Maj & probably min said you do not have to exclude one to be another (can be
both).
- What is the test? Maj says “current activities” (p 252.3). Min, following
precedent (Adamson), says “current activities” (p 254.6). So, unanimously, the
test is that of “current activities”.
- So both maj & min say look at “current activities”. They disagree as to what
degree of “current activities”.
- Maj applied Adamson & said look at all activities, & ask is financial acts a
substantial proportion of them (& if financial acts undertaken for ulterior
motive was beside the point – p 254.2).
- Min says do not follow quantum (p 256.1) & adopt an artificial one – whether
financial acts are a predominant or characteristic activity. Min said that
finance was ancillary or incidental to its primary activity of administering the
scheme. (p 256.3).
- Summary: the test is “current activities”, & maj test is whether “current
activities” are a significant/substantial proportion of that kind (trading or
financial).

Fencott v Muller (1983)
- Corporation called “Oakland” that was a “shelf company” was acquired to
wind up a business run by trust (pay debts & give $ to beneficiaries).
- Was this body a trading corporation?
- How do you characterise a body before it has done anything? One would
expect on views in Adamson & State Superannuation Board where look at
“current activities”, that you therefore look at its intended activities (never
going to trade, only wind up business & then be defunct).
- But maj said look at purpose of body – look at memos & articles (this does not
mean anything really). Maj said it had pwr to trade & was a trading or
financial corporation.
- To what extent does this apply to current corporations?
-

Result: anything that before it does something is a trading or financial
corporation because it can engage in trading or financial acts [this only gave
ammunition to the min].
Tasmanian Dam Case (1983)
- Was HEC a gov’nt body/corporation?
- It built dams & sold electricity. It gave gov’nt advice on hydro-electric policy,
env policy. It also had certain gov’nt functions (licensing electricians).
- Was this a trading corporation?
- Yes – Mason, Murphy, Brennan & Deane JJ (because traded on substantial
scale; ie, trading was a substantial proportion).
- No – Gibbs CJ, Wilson & Dawson JJ. Min said test is predominant or
characteristic activity (State Superannuation Board) & cannot say
predominant or characteristic activity of this gov’ntal body is trading. See
effect of Fencott v Muller on Gibbs CJ who is happy to use purpose (p 257
note 3).
Incidental Power

Fencott v Muller (1983)
- TPA 1974 imposed civil liabilities on “persons involved in the contravention”.
- Was it valid? Yes.
- This fell within the incidental pwr (p 271.3). Corporations act thro’ natural
persons &, in order to be effective, a regulation of the activities of corporations
calls for imposition of duties on those natural persons who might participate in
the corporate activities [Mason, Murphy, Brennan & Deane JJ].
- There is clear authority that it falls within implied or express incidental pwr to
impose liability on non-s 51(xx) corporations involved in breaches of law by
corporations (ie, could impose civil liability on corporate officers).
Incorporation

NSW v Cth (Incorporation Case) (1990)
- Can Cth incorporate bodies under s 51(xx)? No.
- Uniformity of law (national law) to cover whole field.
- Corporations Act 1989 provided for incorporation of bodies under Fed law but
it was clumsy.
- To get incorporated, needed to lodge an activity statement with Cth every yr
(substantial proportion of your activities were trading or financial).
- Could Cth incorporate bodies? Leading eg of constitutional interpretation:
text, purpose, precedent & policy (p 269 note 2).
1) Text is what meaning given to word “formed” > means already formed,
therefore no pwr to form them (p 261). Maj says s 51(xx) treats foreign,
trading & financial corporations in same way. Since there is no pwr to
incorporate foreign, & since pwr to all 3, there is no justification to say
other 2 are in a diff’nt sit’n. Secondly, maj says when Const gives pwr, it
does so expressly.
Deane J says do not just look at “formed”, look at whole clause “formed
within the limits of the Cth” (p 265.8). Deane J wins on additional point
since Airlines not in s 51(i).
-
-
2) Intention/purpose. Maj (on p 263) says Bill presented to 1st Convention in
1891 on basis that it did not extend to incorporation; then intro again in
1897 in modern form & is still the same.
Deane J says there is no justification on that basis.
3) Precedent. All judges in Huddart, Parker said it did not extend to
incorporation (even Isaacs J who dissented & was not overruled by
Concrete Pipes).
Deane J says that Isaacs J’s judgment is bizarre (p 266).
4) Policy. Maj says that if you give Cth pwr to incorporate bodies, it gives
Cth difficulties (p 264 line 5) – activity statements, etc.
Deane J responds:
1) Practicality is a matter for Parl.
2) Convenience of national Companies Act outweighs any concern of
alleged inconvenience (p 268 para 1).
3) Suggests def’n of trading corporation (a corporation which either was
formed to trade or does trade – therefore, don’t worry about activity
statements). This is a wider view than Murphy J’s.
Deane J successful but in dissent (6:1).
It would be foolish to challenge the incorporation issue today as Gummow &
McHugh JJ are still there, & if you expect more pro-Cth from Callinan J,
Gleeson CJ & Gummow J, you are stupid. Kirby J would of course dissent &
agree with Deane J.
Cth cannot incorporate bodies under s 51(xx).
Topic Summary – s 51(xx):

Issues of ambit & scope.
1) Can Cth incorporate bodies under s 51(xx)? No.
 Incorporation Case – relying on earlier support of Huddart, Parker unanimously & 4
judges in Bank Nationalisation Case (Latham CJ, Rich, Starke & Williams JJ).
 In favour of incorporation – Murphy J (Actors Equity) & Deane J (Incorporation
Case).
 See Zines on pp 102-4. Zines suggests (p 104.1) that if you take Deane J or Murphy
J’s def’n & say incl bodies not only trading but those formed to trade, then you may
overcome practical probs concerned with activity statements (Fencott v Muller would
suggest as bodies are trading corporations).
 Prob: if you give corporation all pwrs of a natural person, how can Const get this?
(giving more pwr than it can actually exercise itself).
2) Whether Cth can regulate the internal management/relations of corporations (ie,
shareholders, directors & employees)?
 No direct authority.
 Treated as aspect related to 1) (p 269 note 4).
 Internal affairs governed by association & created at time of formation – Williams J in
Bank Nationalisation Case & see Zines on p 106 para 3.
 But there are dicta – divided as to whether Cth can regulate internal management.
- No: Rich & Williams JJ in Bank Nationalisation Case; Huddart, Parker (incl
Isaacs J – p 266).
-





Yes: Murphy J in Actors Equity (p 224) & Dam (p 232) & Deane J in
Incorporation Case (p 266.7).
On q of regulating corporation & its employees, dicta:
- Murphy J in Actors Equity.
- McHugh J in Re Dingjan (pp 245-6).
- p 250 note 4.
In terms of shareholders:
- McHugh J in Re Dingjan (pp 245-6).
- Deane J in Incorporation Case (p 267.7).
Broad view: Mason, Murphy & Deane JJ (in Dam) & McHugh J (in Re Dingjan) –
they all, except for Mason J, say regulate all internal matters.
Intermediate view: trading acts would seem to cover the internal matters (so
shareholders, directors & employees incl because these are associated with activities
done for the purposes of trade).
On q of dissolution of corporations: internal matters seen as related to incorporation,
so some have seen dissolution as also being associated with incorporation (see Zines
on p 106.9; Dixon CJ & Kitto J who say it is possible under bankruptcy or
insolvency).
- There is no direct authority.
- No: Rich & Williams JJ in Bank Nationalisation Case.
- Yes: Deane J in Incorporation Case (p 267.6); s 51(xvii) under bankruptcy
laws.
3) External relations (ie, betw’n corporation & public).
 Most authority has been in this area.
 3 levels (Zines pp 92-3):
1) Cth can regulate trading activities of these bodies (Concrete Pipes, Actors Equity
& Dam – all unanimous).
2) Cth can regulate activities done for the purposes of trade (need not be trading
activities)
- Dam on s 10(4) held valid by 5:2.
- Re Dingjan – Mason J says that even if not mention for purposes of trade it is
still OK (p 249.7).
3) Griffith CJ (?) – any law that corporation should or should not do something is
valid (Mason, Murphy & Deane JJ in Dam & McHugh J in Re Dingjan).
 Where law not directed at corporations but at non-corporations associated with them –
McHugh J test in Re Dingjan (does the law legally or practically affect the business of
such a corporation?). See p 245.
4) Role of incidental pwr in this topic.
1) Pwr extends to regulating non-s 51(xx) corporations who are implicated in the
activities of the corporation (eg: corporate officers – Fencott v Muller p 271).
2) Holding or subsidiary companies:
- Holding: dicta in Actors Equity on whether Cth can regulate a holding
company of a s 51(xx) corporation [Mason, Stephen & Aickin JJ said ‘no’,
Murphy J said ‘yes’ (p 225)] – ie, 3:1 against.
- Subsidiary: never dealt with.
3) Re Dingjan is broad enough to incl incidental pwr because not regulating the
corporation – maybe whole case is related to incidental pwr.
Scope
1) What is meaning of trading & financial corporation?
 Test is: “current activities” – look at all of them & see whether trading or financial
activities represents a substantial proportion (not unanimous because min q is what is
predominant or characteristic activity).
2) Corporation that has not yet had any activities.
 Authority is Fencott v Muller which says look to pwrs given by Const of corporation,
look at purpose of body (but this was decided before abolition of ultra vires
incorporation law).
3) There is a wider view of trading corporation.
 See Murphy J in Dam (p 257.2) & Deane J in dissent in Incorporation Case (p 268.3).
 A corporation will be a trading corporation if either “current activities” or purpose of
formation will lead one to conclude that substantial proportion is related to that.
4)






Whether pwr extends to a specific corporation?
Could Cth pass a law regulating BHP?
No direct authority.
But there is dicta in Dam (p 259 note 4):
- Murphy J says ‘yes’.
- Wilson J says ‘no’.
What is other prob if want BHP Act? Can only regulate it for as long as it remained a
trading corporation – ie, condition it on BHP remaining a trading corporation.
See Zines on p 100 concerning s 51(i) vs s 51(xx).
Interesting to contrast narrow legalistic view of s 51(i) with apparently more broad
approach of s 51(xx).
1) Interpretation of s 51(xx) is a natural interpretation (as noted by Griffith CJ in
Huddart, Parker).
2) s 51(i) cluttered by early precedent whereas s 51(xx) overruled Huddart, Parker.
WK 7.2
31/8/00
Freedom of Interstate Commerce




1st para of s 92 of Const says that on imposition of uniform duties of customs, “trade,
commerce, & intercourse among the States, whether by means of internal carriage or
ocean navigation, shall be absolutely free”. Thus, s 92 contains open-ended phrases,
& Isaacs J saw this.
A lot of cases on s 92.
HCA had diff’nt views on this pwr until 1988.
4 general approaches to adopt to s 92:
1) political – no one suggested.
2) contextual – stronger claim: look at context to see what s 92 is making interstate
commerce free from (customs duties; Murphy J says “discriminatory fiscal
imposts” on p 466.6); but this is not the current approach.
3) literal – freedom from all regulation (law); in essence this is approach taken by
HCA till 1988.
4) purposive – this is the modern approach: work out what s 92 was intended to do &
give it an interpretation that would allow it to accomplish that (no more, no less).
Issue of Discrimination




Discrimination against interstate trade (treating adversely trade of what is not your
State relative to your own).
Accepted from beginning that presence of discrimination will prima facie be fatal to
law’s validity. If no discrimination, it will be valid.
HCA said lack of discrimination not critical because even if not discrimination, it
could still be invalid.
Prima facie & rebuttable because in some cases, law may discriminate for good
reason.

Fox v Robbins (1909)
- Discriminated against out-of-State liquor.
- If for public health/safety or consumer protection for adverse treatment of other
State, law could be valid.

Bank Nationalisation Case (1949)
- Basic test lasted from 1949-1988.
- Cth nationalised banks which meant all banking had to be done by Cth & priv
banks could only operate via consent of Cth.
- Challenged on basis of s 92.
- Act prohibited all banking & was not discriminatory.
- Fact that it treats interstate & intrastate banking the same is beside the point.
- 2 elements to the test (& s 92 is breached only if both held invalid) – see p 466:
1) s 92 violated if there is a direct effect (legally) on interstate commerce
[‘criterion of operation approach’].
2) a law would not breach s 92 if it was regulatory [if reasonable restriction
relating to mode or manner, there is no breach of s 92].


Privy Council: in no case are we to be taken to say that nationalisation always
breaches s 92 [rider].
Originally, economic factors seen as indirect. Barwick CJ, however, felt that
economics could be direct &, by 1975, he had changed others’ views on 1).
Barwick CJ destroyed 1) by 1975 & tried to reduce the concept of regulation (narrow).

Clark King (1978)
- Destroyed Bank Nationalisation test.
- Set up Australian Wheat Board to market commodity.
- In order to obtain a good price, all States & Cth gave AWB a monopoly – all
thro’ AWB.
- An interstate contract person said s 92 breached because of nationalisation.
- HCA held scheme valid by 3:2.
- Maj: Murphy J said only “discriminatory fiscal imposts” breached s 92, &
Mason & Jacobs JJ held scheme valid on 2 grounds:
1) Did not discriminate against interstate trade – interstate & intrastate trade
treated same [1st time since 1945 that lack of discrimination regarded as
positive].
2) Applied rider (p 455 para 2) – monopolisation was the only practical &
reasonable way to regulate wheat.
- Min: Barwick CJ & Stephen J applied Bank Nationalisation test (orthodox).

Uebergang v AWB (1982)
- Demonstrated that ct divided.
- Barwick CJ said kill the rider.
- Stephen, Wilson & Aickin JJ conceded rider can be applied but not really.
- Murphy J had his own view.

Cole v Whitfield (1988)
- Looked at intention of framers & outlined test that satisfies purpose.
- 7 points:
1) 1st modern case that clarifies what to look at in Const debates (p 459.5) –
not for intention but to look at:
i)
way lang used
ii)
what Const was trying to address (mischief)
2) What history & context (p 467.8) revealed was that s 92 intended as a
prohibition on protectionist discrimination (pp 462.4, 463.5).
3) Distinguish betw’n 2 limbs of test – freedom of interstate trade &
commerce; freedom of interstate intercourse (distinct). There are 2
prohibitions in s 92: interstate trade & commerce (broad liberal right) &
intercourse (might be broader) [see pp 460.9, 462.9].
4) Emphasised freedom from discriminatory burdens extends beyond
monetary burdens (p 463.7).
5) 3 points:
i)
Noted failings of prevailing doctrine.
The criterion of
liability/operation approach was artificial & focussed too much on
legal rather than eco & practical effects (pp 465.9, 466.3).
ii)
Gave s 92 too broad a construction. HCA said the doctrine “created
protectionism in reverse” (p 467.1).
Filter was too fine; too little law got thro’; s 92 was stopping too
much useful law (p 467.3).
6) Test: a law will breach s 92 if it is discriminatory against interstate
commerce de jure (law appears neutral but in reality is not) or de facto (in
fact even though in law it does not appear to be) & is protectionist in
intention or effect.
See pp 463.5, 467.8, 468.2; 464.9, 468.3; 468.5.
7) Application here. Parties agreed on facts. Tas & other States had laws
prohibiting taking of undersized crayfish, but Tas had a higher size as limit;
person imported from SA not undersize there but undersize in Tas; did this
law contravene s 92? Was it protectionist? Did it discriminate?
HCA applied test & said no discrimination was intended – Tas law was
aimed at conservation.
What about practical discrimination &
protectionism (against SA) > not relevantly discriminatory [see p 469.2].
iii)

Note: in order to breach s 92, law would have to be relevantly discriminatory &
protectionist; if avoid breaching s 92 must show not relevantly discriminatory & not
protectionist.
WK 10.2 & 11.1
19/10/00 & 23/10/00
Excise Duties




Most important of the exclusive pwrs are the pwrs to levy duties of customs & excise,
which were vested exclusively in Cth by s 90 of Const, which provides:
“On the imposition of uniform duties of customs the pwr of the Parl to impose duties
of customs & of excise, & to grant bounties on the production or export of goods, shall
become exclusive”.
ie, s 90 prohibits States from levying a duty of excise.
An excise is a form of tax.
Const does not define a duty of excise but s 93 hints at one – basically a tax on
production.

Peterswald v Bartley (1904)
- Decided by 1st 3 judges of HCA.
- Demonstrated ‘reserved State pwrs’ thinking but actual def’n did not.
- Adopted a narrow def’n of excise on their understanding of s 93.
1) What is the tax levied upon? (excise is a tax on goods – q is what dealing
with the goods attracts the tax)
2) How closely related is the tax to the goods?
- Tax on local prod’n.
- On issue of proximity, they said it had to be close – in relation to quality or
value of goods.

Petrol Case (1926)
- What about tax on 1st sale – sale by producer?
- HCA said it was an excise – 1st sale is a tax on producer which is essentially a
tax on prod’n.
- Rich J adopted a broad view of what constitutes excise duties – he did not limit
excises to taxes on prod’n (p 495.2/3). He is the founder of the current HCA
maj view.

Matthews v Chicory Marketing Board (Vict) (1938)
- A Vic tax on producers of chicory at the rate of 1 pound per ½ acre of land
planted with the crop was held to constitute a duty of excise (3:2).
- Imposed on producers of chicory (so prod’n > OK).
- Relevant commodity was harvested chicory & amount you plant does not
necessarily equal amount you harvest – so, was 2nd component critical?
Latham CJ & McTiernan J dissented & said ‘yes’. Maj (incl Rich & Dixon JJ)
took broad view & said does not need to be a direct correlation betw’n tax &
goods.
- Dixon J: there does not have to be a direct, close mathematical relationship but
in this case there was a natural relationship (more you plant, more you harvest)
& computed quantitatively there was some relationship betw’n tax & goods.

Parton v Milk Board (Vict) (1949)
- Up to 1948, still was a tax on prod’n & must be relation betw’n tax & good
(not direct, close).
- What about sales tax? Maj said ‘yes’ sales tax was an excise (Latham CJ &
McTiernan J dissented).
- Purely tax on manufacture > tax on sale (negative because deprived States of a
potential revenue).
- Dixon J: if you tax prod’n, tax will go down to consumer & will affect demand.
Tax at any point has same effect (economists disagree) – see pp 496-7.
- Parton effectively excluded States from field of sales taxes, but its full impact
was not felt until Ha v NSW (1997). 2 factors combined to hold Parton
largely at bay for all those yrs: “franchise cases” & legalistic “criterion of
liability” approach to the interpretation of “excise” developed by Kitto J &
adopted in later yrs by Gibbs CJ, Wilson & Dawson JJ.

There are 3 principal modern approaches to the interpretation of “duties of excise”
in s 90.
Unsophisticated approach:
- This is the “substantial operation” approach (the Mason/Dixon line).
- Represents current maj view.
- Look at Const & purpose was Cth gain monopoly over customs & excise (s 90
intended to cover both) – really on importation & production.
- Customs is a tax on imported goods & excise is a tax on locally produced
goods (p 499.8).
“Criterion of liability” approach:
- Above approach was applied in a constipated legalistic way by Kitto J in
Dennis Hotels (1960).
Sophisticated approach:
- This is the Fullagar/Murphy line.
- What customs & excise have in common – traced back to Isaacs J (p 495.1),
Fullagar J in Dennis Hotels, Murphy J, Toohey J, Gaudron J & Dawson J.
- Represents current min view (Gaudron J).
- Fullagar J in Dennis Hotels: “The duties of customs & duties of excise
contemplated by Const are, I think, alike duties which are imposed as a
condition of the entry of particular goods into general circulation in the
community – of their introduction into the mass of vendible commodities in a
State. When once they have passed into that general mass, they cease, I think,
to be proper subject-matter for either duties of customs or duties of excise”
(p 506.7).







Eg: NSW levies a 50% sales tax on all car tires imported & locally produced.
Mason/Dixon: this is a tax dealing with goods, sales & its excise; s 90 concerns both
customs & excise; so tax is invalid.
Kitto: agree because taxing sale, closely related to value, clearly excise & invalid.
Fullagar: not taxing entry into market; it is a non-discriminatory sales tax which is
neither & thus valid.

Dennis Hotels (1960)
- 3 modern approaches:
“Substantial operation” approach – Dixon CJ (McTiernan & Windeyer JJ).
“Criterion of liability” approach – Kitto J (Taylor J).
Sophisticated approach – Fullagar J.
[Menzies J adopted a peculiar approach]
- Sale of liquor in Vic was regulated (need licence to sell liquor & licence was
taxed). Victualler’s licence fee was 6% & was backdated. For temporary
licence, you paid in current period.
- HCA held 4:3 > backdated – valid (not excise), temporary – invalid (excise).
-
-
-
-
-
Dixon CJ (substantial/operation approach):
Looking at Vic liquor arrangement substantively, all liquor basically has 6%
sales tax, & following Parton, that is an excise.
See p 499.2 & p 500 para 2 line 5.
Kitto J (criterion of liability approach):
A duty of excise is a tax (“It is now established that for constitutional purposes
duties of excise are taxes directly related to goods imposed at some step in
their production or distribution before they reach the hands of consumers” –
Bolton v Madsen (1963). This is maj view in Ha, minus the word “directly”).
Adopts a legalistic view: taxing sale of goods & taxing right to sell goods is
different.
Looks at leg’n & says what criterion of taxpayer renders taxpayer liable to pay
is the grant of the licence.
Neither fee was an excise – the right was taxed & not the sale itself.
This means that if a “licence” was slipped in, it allowed States to argue that it
was a tax on licence to sell & not a tax on sale [see Dennis Hotels, Dickenson
& H C Sleigh (1977)]. This helped States build up revenue.
See p 502 line 1, p 502.4 & p 504.8
Fullagar J (sophisticated approach):
A non-discriminatory sales tax would be neither customs nor excise & since
rejected Parton, the fee was valid; if licence to produce liquor then different
view.
Must it be a tax on goods? Yes. Must it be imposed on prod’n or manufacture
of goods? Yes. Must it be imposed by reference to quantity or value of goods?
No. Not close relation; fact that it adds to price of goods is enough.
An excise is a tax on prod’n no matter how calculated.
Menzies J:
backdated: valid (cannot say for certain that fee/tax would inevitably be
imposed).
temporary: invalid (because current, can say for certain that have to pay).
Taylor J:
Purpose of leg’n was regulatory because dealing with licensing of commodity
that is potentially dangerous – therefore, not excise.
Dixon CJ criticises Taylor J (see p 500.7 & p 501.8).

Dickenson’s Arcade v Tasmania (1974)
- Dixon J in Parton: if you tax prod’n, tax will go down to consumer & will
affect demand. Tax at any point has same effect (economists disagree) – see
pp 496-7.
- There are 2 taxes:
1) tax similar to Dennis Hotels
2) tax on consumption of tobacco
- Dennis Hotels should be followed in an analogous way.
- Tas Act imposed a 2½ per cent (max) licence fee backdated 6 mths on retail
sale of tobacco.
- Tax on consumption should legally be an excise but because Dixon J in 1949
said it was not, they said a tax on consumption was not an excise.


There were 2 cases before Dickenson’s Arcade (1974) & Hematite (1983).
In Bolton v Madsen (1963), excise was defined (see above, p 510.1) – this is the view
of maj today (except take out word “directly”) & Dixon CJ appears to adopt Kitto J’s
“criterion of liability” approach.
In Anderson’s v Vic (1964), Barwick CJ adopted def’n of “excise” in Bolton v
Madsen but did not accept the “criterion of liability” approach. He adopted a factorial
approach.


Hematite Petroleum v Vic (1983)
- Only 6 judges sat.
- Before Hematite, law was that an excise could be imposed on prod’n or sale,
any point up to point of consumption, but still had to be relation betw’n tax &
goods.
- On prevailing law, not excise because fixed fee but 4:2 held it was an excise.
- All 3 modern approaches:
Substantial operation (Mason, Brennan & Deane JJ).
Criterion of liability (Gibbs & Wilson JJ) – dissenting.
Sophisticated (Murphy J).
-
Criterion of liability (p 510.1 def’n):
Could not be excise on either of 2 points.
Not directly related to goods (because fixed fee).
Not on prod’n but on right to produce (Gibbs J).
-
Murphy J (old Fullagar J view):
An excise was a tax on local prod’n no matter how calculated.
This was a Vic tax on Vic natural gas – therefore, tax on Vic prod’n &
therefore excise.
-
Mason J:
Several points:
1) Purpose of s 90: classic purpose of unsophisticated approach. See s 90 as
intended to give Cth monopoly of all taxes on goods (p 515.1/8/9, p 508.1).
2) Adopts reasoning of Parton (not just holding but all of it with emphasis of
economic effect on demand). Parton said reason for sales tax is because
eco effect of it is same as prod’n tax – adds to cost of goods & passed onto
consumer & affects demand (p 514.5).
3) Strong rejection of “criterion of liability” approach (Bolton v Madsen
approach) & strong argument for practical substantial operation (p 516.7).
Mason J is right because you should not be able to slip in a licence & say it
is a tax on licence to sell not tax on sale (Kitto J). Mason J adopts a
substantive approach.
So, both maj & min in Ha adopt pragmatic, substantive approaches, not
legalistic ones.
4) This case takes it further that you do not need a direct relation betw’n tax &
goods for it to be a duty of excise. Excise has to be a tax on goods. “To
justify the conclusion that the tax is upon or in respect of the goods it is
enough that the tax is such that it enters into the cost of the goods & is
therefore reflected in the prices at which the goods are subsequently sold”
(p 516, p 519 note 2 & p 520).
Vic Parl knew quantity going thro’ pipes & fixed fee. This is not absolute
strong authority that a large fixed fee on prod’n of goods will be a duty of
excise because 1 of maj judges (Mason J) did not find it a fixed fee because
Parl would have had some relation (p 517, p 520 note 4).
5) Factors – p 517 para 2 & 3. A small fixed fee might only be regarded as a
tax on licence & not goods, but that is not the case here.
i)
Only attracted to 3 pipelines & quantity would be clearly known.
ii)
Not a tax on licence because already hold licence.
iii)
Special fee.
iv)
Essential step in prod’n – core idea of excise is prod’n.
-
Mason J: large fee on prod’n; not totally fixed fee such that it does not have
any relation to goods.
Murphy, Brennan & Deane JJ: where you have a fixed fee but because on
prod’n, it was an excise; further you are away from prod’n, the more it matters.
Summary (Hematite):







Last of the non-Dennis Hotels cases.
Established that a large fixed fee on prod’n can be (not always) an excise but 1 of maj
judges (Mason J) said it was not a fixed fee.
3rd pipeline refined gas taken to Melb households (already sold).
Gibbs CJ & Wilson J:
- Adopt broad def’n, criterion of liability approach.
- Is this a tax directly related to goods, in step of prod’n or distribution?
- Fixed fee, so no relation to goods.
- Criterion of liability is the licence not the sale.
- Not an excise.
Murphy J:
- Fullagar J view; takes a substantive view on q “is this a tax on local prod’n?”.
- If gas is in pipes that are inevitably Vic, it is an excise.
Mason, Brennan & Deane JJ:
- Getting further from core (prod’n) but still close enough to have same result
(fee was invalid).
All fees held invalid, even though 3rd not determined by HCA.

Gosford Meats v NSW (1985)
- Arose in the Dennis Hotels stream (licence on fee with backdate).
- Maj of 4:3 held that Dennis Hotels & Dickenson did not apply to fees on
licences to produce goods.
- Backdated licence fee on prod’n (not sale like in Dennis Hotels &
Dickenson’s) of meat by NSW with certain amount per animal in past period.
- Gibbs CJ, Wilson & Dawson JJ (min) dissented on grounds of precedent
(Dennis Hotels, Dickenson & H C Sleigh) & principle. There should be no
distinction betw’n a licence to sell & produce (otherwise inconsistent with
Parton). They applied criterion of liability laid down in Bolton v Madsen
(licence fee was on privilege & no natural or practical relation betw’n tax &
goods – so not an excise).
- Mason, Brennan & Deane JJ (maj) took opposite view on principle (Dennis
Hotels is bullshit & cannot be applied when we talk about the “heartland”
which is prod’n) & precedent (Dennis Hotels would have been decided
differently if it was a licence to produce rather than sell because Fullagar J
would have held it invalid as a duty of excise), & said it was excise.
- Murphy J said a NSW tax on abattoir operations, relevant commodity was meat
> NSW tax on NSW prod’n & is clearly excise.

Ha v NSW (1997)
- Raised Dennis Hotels issue.
- Concerned a licence to sell tobacco > in line of Dickenson & Philip Morris
(1989) but main diff was Dickenson (2½ per cent) & here it was 100%, & alos
less backdated (more proximate here, 2 mths back).
- Mason CJ & Deane J retired, replaced by Gummow & Kirby JJ.
- Only case overruled by Ha was Philip Morris.
- Substantial operation approach (unsophisticated) adopted by maj of 4.
- Sophisticated approach adopted by min of 3 (should be excise on prod’n).
- Asked HCA to open Parton, & maj affirmed Parton (p 523).
- Held: principle of Parton affirmed; Dennis Hotels & Dickenson confined to
narrow factual sit’ns. Min wanted to overrule Parton (this would give States a
lot of revenue & could reach Dennis Hotels results on rational ground).
-
-
Maj (Brennan CJ, McHugh, Gummow & Kirby JJ):
1) Excise is not confined to a tax on Aust prod’n but also incl taxes on sale.
Authority long established (p 524.5, 528.8 & 529.3). Reaffirmed Parton
(p 529.2).
2) Regard substantial operation approach as established since Philip Morris in
1989 (p 524.7).
3) Define object of Federation in a more limited way: free trade with uniform
tariff (p 525.9, 508 note 1). A wide view of excise is necessary to
accomplish this (p 527.8).
4) Dennis Hotels & Dickenson not overruled (?) – p 532. It would not be
excise if tax on privilege (right to run business or licence) but here it is
revenue raising & high (100%) & attempt to undo what s 90 aims.
5) Ct unanimously agreed that it would not engage in prospective overruling
as this would be an exercise of non-judicial pwr.
If Hematite tax with regulatory purpose, would regulatory purpose save it? –
stupid.
-
Min (Dawson, Toohey & Gaudron JJ):
1) They say object of Federation was customs union (common external tariff)
& free trade, not an eco union.
2) Non-discriminatory tax cannot impair Cth tariff policy (p 533.9 & 535.3).
3) Reject reasoning in Parton:
i)
supposed policy reason (complete monopoly)
ii)
eco theory of Parton (they reject the notion that tax at any time
results in same effect).
They are on strong ground here (see p 539.9).
4) Test for them: is this a tax discriminating on local prod’n? (p 538.7 &
539.5). This is a q of substance, not form. Leave open whether local
means State or Aust.
Summary (Ha):
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Min: excise is only tax on local prod’n (State or Aust).
Maj: broad Parton view > tax on any dealing with goods (prod’n or sale, except
consumption) will be an excise.
Only complication: where Dennis Hotels kind of tax (licence with backdated fee) –
seems there the q would be determined by analysing whether “was it to regulate the
sale of the commodity rather than raise $”. Whether the tax is regulatory is relevant
elsewhere is open.
States lost out in Ha but States not so bad today because GST [Cth tax under s 51(ii)
paid to States].
WK 11.2
26/10/00
Taxation
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s 51(ii) confers pwr on Cth Parl to make laws with respect to “Taxation; but so as not
to discriminate betw’n States or parts of States”.
ss 53 & 55 are formal restrictions (see pp 337-340).
Laws imposing taxation must commence in the House of Reps. Senate cannot amend
such bills (laws imposing taxation) but can make suggestions. This is based upon
HOL, HOC distinction > “Compromise of 1891” at Convention.
s 53 speaks of proposed laws (bills) imposing taxation.
s 54 speaks of proposed laws (bills) imposing revenue.
These are not justiciable – cts reluctant to intervene in legislative process.
Once bill is enacted, it is no longer a bill & no longer governed by the section.
s 55 is main prov’n (it is justiciable).
s 55 para 1: Laws imposing taxation shall deal only with imposition of taxation, & any
other matter is void.
s 55 para 2: Laws imposing taxation shall deal only with one subject of taxation; laws
dealing with imposition of customs shall deal only with customs; laws dealing with
imposition of excise shall deal only with excise.
Meaning of taxation – what is a “tax”?
There has been a lot of movement on this topic in HCA but in the wrong direction.
s 53 does mention some alternatives to tax – fines & other pecuniary penalties, fees for
licences or for services, royalty, fee for privilege & fee for acquisition or use of
property, are all not taxes.
Economists say a tax is unrequited payment.
HCA moved ludicrously to give tax a broad def’n with several consequences. It
expands role of s 55 (also stupidly interpreted) & gives s 51(ii) a broad scope.
Tax must not be rational.
Limitations incl:
s 51(ii) – laws on topic of taxation must not discriminate betw’n States & parts of
States.
s 99 – laws dealing with revenue must not grant preference to State or part of State.

When is a law considered to be a law with respect to taxation under s 51(ii)?

R v Barger (1908)
- 2 doctrines applied by HCA – reserved State pwrs & single-subject
characterisation combined with “substance” of leg’n prevailing over “form”.
- Classic eg of reserved State pwrs like Huddart, Parker.
- Policy of new protection – Cth sought to extend practical reach of Industrial
Relations Awards by imposing an excise on agricultural goods (thro’ eco
incentive) but allowed an exemption if you can show you complied with
Awards.
- Where was this pwr? Cth said taxation pwr.
- HCA rejected by 3:2 – maj had reserved State pwrs thinking; Isaacs & Higgins
JJ in dissent.
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Reserved State pwrs > HCA said that word “taxation” read naturally might be
broad enough to incl controlling behaviour & not just raise revenue. But
should read it in light of fact that certain pwrs reserved to States (one of them
was reg’n of industrial arbitration) & therefore read down “taxation” & give it
a narrow meaning.
“The primary meaning of ‘taxation’ is raising money for the purposes of gov’nt
by means of contributions from indiv persons” (p 358).
“We are thus led to the concl that the pwr of taxation, whatever it may incl,
was intended to be something entirely distinct from a pwr to directly regulate
the domestic affairs of the States, which was denied to the Parl” (p 358).
See also p 360 which mentions that meaning of “taxation” is limited by notion
that matters reserved exclusively to the States.
Kitto J said in Fairfax (1965) that maj in Barger took proposition that
“taxation” in s 51(ii) has a special meaning, that it refers only to taxation not
imposed as a means of regulating the domestic affairs of the States (p 365.9).
So, tax pwr did not cover this.
HCA went on to say that really in substance it is not a law on taxation but on
regulating manufacture & labour relations which is not a Cth topic (p 359.7/9).
These 2 doctrines destroyed the leg’n.
Engineers (1920) destroyed reserved State pwrs but no single case rejects
single-subject characterisation with “substance” over “form”.
Kitto J says both dead because HCA adopted multiple-subject characterisation
(although technically Barger not overruled).
Isaacs & Higgins JJ in dissent is regarded as the current pos’n of HCA
(Higgins J is quoted in Fairfax).
It is fine to look at “substance” of leg’n over “form” (but they reject reserved
State pwrs) but determine “substance” by asking what are the rights & obligs
granted by the leg’n – what conduct is rendered unlawful?
If the only unlawfulness was not to pay tax/excise, then it is a law on tax.
If conduct unlawful, then what is calling itself a tax is really a penalty.
See p 360.9, 361.5.
Fairfax (1965)
- Classic modern case.
- Leading judgment is that of Kitto J.
- Issue: Cth granted taxation benefits to trustees investing in gov’nt securities –
was it a law on topic of taxation or on trust (which is normally a State topic).
- HCA unanimously held that it was valid under s 51(ii).
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2 points:
Barger no longer applies (reserved State pwrs gone because of Engineers &
single-subject characterisation gone in favour of multiple-subject
charaterisation).
See p 366.4, 367 line 4.
Substance test on p 363.9 – “by reference to the nature of the rights, duties,
pwrs & privileges which it changes, regulates or abolishes … is it in its real
substance a law upon, ‘with respect to’, one or more of the enumerated
-
subjects, or is there no more in it in relation to any of those subjects than an
interference so incidental as not in truth to affect its character?”.
Raising of revenue might still be valid – what is the legal oblig (same as Isaacs
& Higgins JJ in Barger).
Cannot be penalty if conduct punished is not unlawful.
See p 367.9, 368.1 & 366.5.
Notes on p 368:
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In Murphyores (1976), Mason J said that Fairfax should be regarded as sweeping
away Barger.
Second Fringe Benefit Tax Case (1987)
- Argued that it breached Fairfax because supposed purpose was to eliminate
fringe benefits.
- Revenue raising device (not eliminating fringe benefits).
- HCA upheld law on s 51(ii) – Menzies J gave no explanation for his strange
point; this is not a ‘prohibitive’ tax; Menzies J’s illustration is contrary to real
principle of Fairfax (as stated by Kitto J).
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Northern Suburbs (1993)
- This case adds nothing. It is a modern repetition.
- Cth gov’nt scheme to induce employers to appropriate funds for training
employees & to encourage them to do so, passed leg’n that said any employer
who did not provide this should pay a training guarantee charge to gov’nt (any
shortfall payable to Cth). Cth made grants to States.
- HCA said it did not fall under s 51(ii) because not a tax.
- 3 args made:
1) Not tax but penalty (primary purpose of this was not revenue raising).
2) Not tax because fee for services.
3) Not tax because it was arbitrary.
- All args failed, & held valid:
1) A law can be a law with respect to taxation even if revenue-raising is a
secondary purpose (p 371).
Only penalty if there is antecedent obligs (p 370.3, 373.4).
2) Rejected on ground that no clear specific service provided to fee payer
(p 370.8).
3) Not arbitrary – McCormick v FCT (1984) is leading case.

Air Caledonie v Cth (1988)
- Modern case that loosened excessively (& this is opinion of min) what is
meaning of tax.
- Concerned Airport arrivals tax (fee for immigration clearance).
- Migration Act 1958 & its amendment in 1987.
- Law imposing taxation & when combine with rest of MA, it would breach s 55
para 1.
- Held unanimously a law imposing taxation, but combined rest & said breached
s 55 para 1 because rest deals with not only taxation but also migration (this is
a ludicrous result).
- Looked at Latham CJ’s def’n of tax from Matthews v Chicory Marketing
Board (Vict) (1938): “a compulsory exaction of money by a public authority
-
-
for public purposes, enforceable by law, and … not a payment for services
rendered” (p 341).
HCA said this def’n is not a good guide because almost all factors pointed out
could be absent & it could still be a tax.
Fee for privilege > cannot be this because although might be privilege for
aliens, it will not be Aust citizens to whom this is a right & not a privilege.
Fee for services > arguable that it was a fee for services for immigration
clearance (check face, computer, etc) but rejected by HCA because leg’n did
not identify any particular service (p 344.3).
So, it was a law imposing taxation & breached s 55 para 1.
Summary (Air Caledonie):
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Breaks down Latham CJ’s def’n. None of elements seen as essential.
Highlights need for specificity in fee for service.
Establishes that can combine leg’n when looking at s 55.
Notes on p 344:
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A compulsory fee could be a fee for services (note 1).
Has to be proportionality betw’n fee & service (p 342.2).

Australian Tape Manufacturers (1993)
- Copyright Act 1968 was amended in 1989 to overcome prob dealing with
breach of copyright when blank tape used to privately copy. Imposed a blank
tape levy/royalty paid by vendor of blank tapes & ultimately by co & paid to
collective agency to artists.
- Was s 55 breached?
- Arg was ‘yes’ because this levy was a tax – 1989 law imposing taxation was
tax & when combined with 1968 breached s 55 & invalidated 1989 Act.
- Virtually today any levy is regarded as a tax unless falls into exceptions.
- Can a levy be a tax if not payable to gov’nt? Yes. So, if required to pay $20
per yr in David Jones, yes it can be a tax.
- Did it fall within exceptions (like royalty, fee for licences, payment in return
for property right)?
- HCA said it was neither royalty nor fee for licence (pp 345-6).
- Min said too carried away in Air Caledonie – when not have to have public
purpose, ct went too far. It may not be a royalty but it was analogous to fee for
licence (right to record & not be in breach of copyright).
- Note: Maj suggests that had 1989 stood alone it would have been invalid for
breaching s 81 (requirement that revenues or moneys raised by Exec Gov’nt be
paid into Consolidated revenue Fund).
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ATM (1993) ctd
- Picked up Air Caledonie & said a levy not for public purpose could be a tax.
- Applying Air Caledonie, HCA said ‘yes’ it was a tax (4:3).
- It does not have to be gov’nt money to be a tax. Public purpose does not
necessarily equal public $ (p 349.4/8).
- In this case, public scheme > public purpose (so more than likely a tax).
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Prima facie, a levy of money will be a tax (pres that levy is a tax) unless fall
into exceptions (p 350.9). These exceptions incl: royalty (payment for a right
& should be some proportionality betw’n right & value), fee for licence.
Maj said it was not a royalty (no right given by artists) & not a fee for licence.
Maj:
1) Can be a tax if money not paid to gov’nt.
2) Took pedantic view on royalty & fee for licence.
Min:
1) Said HCA got carried away in Air Caledonie; it must be public $ for it to
be taxation (must be payable to gov’nt) – this is in line with Sup Ct of USA
& Canada.
2) More pragmatic view – not technically a royalty but analogous to a licence
(P > V – record without breaching copyright).
But maj is the law.
Summary (ATM):
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Widened concept of tax.
Any levy of $ will be prima facie a tax unless it falls within one of the exceptions
(royalty, fee for licence or service rendered, charge for acquisition or use of property,
fine or penalty).
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Harper v Minister for Sea Fisheries (1989) – commodity is scarce
- Unusual case.
- Abalone was a finite but renewable resource.
- To preserve, Tas put in place regime to grant licences for which people had to
pay a fee.
- H said did not have to pay tax because excise; Tas said not even a tax.
- HCA unanimously agreed it was not a tax.
- It was a fee for acquisition of property or analogous to it (analogous to a profit
a prendre) & was essentially upheld by HCA. It was not a tax.
- Brennan J: amounts payable to obtain licence are of same character as a charge
for acquisition of property & do not bear character of taxes – they are not
duties of excise (p 492.5).
- Dawson, Toohey & McHugh JJ: in order for it to be analogous to property
rather than be a tax, there must be a relation betw’n fee & benefit granted.
- Mason CJ, Deane & Gaudron JJ: unique case, a case supported by conservation
principles (p 492.8) – not a mere device for tax collecting.
Summary:
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For a q on s 90 – whether a State tax is an excise, 1st must look to see if it is a tax.
For a q on s 51(ii) – if in substance it imposes a tax.
WK 12.1
30/10/00
Grants
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s 96 of Const: “During a period of 10 yrs after the establishment of the Cth &
thereafter until the Parl otherwise provides, the Parl may grant financial assistance to
any State on such terms & conditions as the Parl thinks fit”.
Background to Federal financial relations
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The principal sources of revenue for States before Federation were duties of customs
& excise.
This was taken from the States & given exclusively to Cth by s 90.
Where would States get their revenue if principal sources had been taken away? By
s 87 (“Braddon Clause”), States got ¾ of customs & excise collected by Cth (State
entitlements were better because of remaining ¼, States would get surplus). At end of
1898 Convention (draft Const from final Convention), States got ¾ of customs &
excise + surplus revenue of Cth in proportion.
NSW was a free State (low tariff); Vic was protectionist.
NSW never keen on s 87 because if get ¾, there would be pressure for high tariff.
Bill went to referendum in all 4 States (not Qld or WA) & although ‘yes’, said it had to
reach 90,000 which it did not, & therefore treated as ‘no’.
Changes made in 1899 – s 87 limited to 10 yrs.
“Braddon Clause” ended in 1910, & States have been in financial trouble ever since.
Cth took over State debts, made per capita payments from 1910, & States intro income
tax.
As noted by Mathews & Jay (p 389), the main sources of revenue for the States were:
- Cth grants (but can come with strings attached, therefore not much
independence)
- State income tax (ended in 1942)
In 1942, a uniform tax was intro for period of war but most realised at time of
enactment that the scheme would probably become permanent & that federal financial
supremacy would become entrenched (p 399 note 3).
SA v Cth (The First Uniform Tax Case) (1942)
- States income tax pwr was ended by 4 Acts:
1) Income Tax Act: imposed Cth tax at higher rate more or less equal to
combined Cth & State income tax rates before the scheme.
2) Income Tax Assessment Act: required that Cth income tax be paid ahead of
State income tax.
3) States Grants (Income Tax Reimbursement) Act: under s 96, granted to
States more or less what collected before scheme on condition they had not
levied any income tax.
4) Income Tax (War-time Arrangements) Act: took over State income tax dept.
- All but 1st were temporary Acts – they were to expire at end of 1st financial yr
after war (30 June 1947).
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All Acts were upheld:
1) A law with respect to taxation (exacts from citizens a contribution to public
revenue); it does not infringe any of limitations like s 51(ii) & s 55.
2) Upheld under s 51(ii) or, for McTiernan J, under defence pwr.
3) Upheld under s 96 (one dissent – Starke J on p 398).
4) Valid by 3:2 under defence pwr [s 51(vi)].
Arg: this scheme was to prevent State from levying income tax, & Cth did not
have pwr over this. This arg split into 2 (possibly 3):
1) Condition in Grants Act that States not levy income tax was not a condition
envisaged by s 96.
2) Must look at all together as a scheme & was designed to coerce States to
abandon income tax.
3) Based upon discrimination – s 51(ii) – because amounts paid to diff’nt
States varied, there was some discrimination among taxpayers (implausible
arg & failed).
Basic arg: this was a scheme to stop States from levying income tax.
HCA looked at form.
Latham CJ:
1) To look at nature of law (its substance), one should look at legal rights &
obligs it grants (as Kitto J says in Fairfax) – p 396.3.
2) Cth could not force State by law to abandon the levying of tax or forbid
State from exercising this pwr over tax incomes (p 394.7, 395.2/8).
See Hematite (pp 408-9) where Mason & Murphy JJ said that Cth could
effectively legislate pursuant to s 51(ii) to prevent States from levying
taxation, at least by prohibiting persons from paying State taxes.
3) VIP: There is no legal compulsion – only temptation, & temptation is not
compulsion (p 394.8, 395.4).
Cth could not compel States legally to abandon income tax; can induce
via $ (voluntary).
4) Confirmed decision of Moran’s Case (1939) that s 96 is not subj to s 99 –
ie, nothing to stop Cth from granting to States diff’nt amounts (p 396.8,
397.2).
5) Not much point in too many legal limitations because in reality Cth could
not be stopped from doing what it wanted to (pp 397.8 – 398.2).
s 96 was held to be a pwr to give “assistance” & not a pwr to pass coercive
laws (“temptation was not compulsion”).
Notes on p 399:
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How important was war to this case? Look at 2 levels:
- Defence pwr > only supported one of the Acts (War-time Arrangements Act).
Sawer says most imp Act but Winterton says the 1st 2 Acts are most imp. Also
played a reasoning in McTiernan J’s judgment.
- Defence considerations > played a role in getting HCA to take a legalistic form
rather than a substance view.
1st 2 Acts would have been enough & they did not rely on defence. At time of
enactment, realised that scheme would probably become permanent.
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Vic v Cth (The Second Uniform Tax Case) (1957)
- Menzies Gov’nt elected in Dec 1949; new Federalism > give States back their
income tax (p 400.9); weaker States wanted to retain scheme.
- NSW & Vic challenged scheme in HCA; handled effectively – attack more
narrowly focussed on 2 pieces of leg’n.
- It was time of peace; Dixon CJ (seen as a Federalist) now sat (in previous case
he was serving as Australian Minister in Washington).
- 2 cases before The First Uniform Tax Case – Vic v Cth (Federal Aid Roads
Case) (1926) & Moran’s Case (1939).
- In Federal Aid Roads Case (1926), Cth offered $ to States for roads on
condition that for every $4 granted by Cth, States had to give $3, with Cth
determining the roads & having discretion. This was challenged by State &
was unanimously rejected by HCA in 4 lines. Dixon CJ summarised it in this
case:
Pwr conferred by s 96 is well exercised although
1) State bound to apply $ to defined object.
2) Grant will be upheld even if outside Cth’s pwrs.
3) At Cth’s discretion.
4) States have to contribute.
It was held that grants can relate to any purpose.
- In Moran’s Case (1939), HCA said prohibitions like discrimination did not
burden s 96. Nothing prevented Cth from granting diff’nt amounts to diff’nt
States (see Latham CJ).
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-
There were 2 main args in The Second Uniform Tax Case:
1) Attack on condition in grant (that States not levy income tax).
2) Attack on prov’n that taxpayer pay Cth income tax in priority to State.
HCA rejected 1) & States might have victory under 2) but Dixon CJ says not
make a difference because uniform tax still be around (now part of GST).
Dixon CJ’s points:
1) Only point of s 96 is that law be non-coercive (p 403.2, 404.9) – it is a pwr
to make grants of $ & to impose conditions on the grant (no pwr to compel
acceptance of grant).
2) This was Dixon CJ’s 1st case on s 96. Dixon CJ sees s 96 as more limited
than how HCA had seen it up to this case.
HCA had said that s 96 satisfied if $ given to State despite the fact that in
exercise of pwr to impose terms & conditions State is required to pay over
$ to people connected with State so as to fulfil some purpose pursued by
Cth & one outside its pwr to effect directly (ct placed no limit on terms or
conditions it was competent to Cth to impose under s 96).
How would s 96 be reformed?
See Dixon CJ’s more limited view (p 404.2/7).
Focussed on “assistance” which indicated that it assisted States by going
into their treasuries. Indicates that was requested so condition should relate
to the purpose for which requested.
3) Could not apply his view (p 405 para 2-4).
-
Pwr relies on s 51(ii) & s 51(xxxix).
Held s 221(1)(a) regarding solvent people, invalid (4:3).
Held s 221(1)(b) dealing with insolvent, unanimously valid under bankruptcy
law – s 51(xvii).
Summary (The Second Uniform Tax Case):
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In relation to grants pwr:
- Not add a lot to 1st; it is an affirmation outside defence context.
- Suggests a narrower interpretation of s 96 (that of Dixon CJ’s) but Dixon CJ
said weight of precedence too strong (? as to if this was the reason – legal
requirements will be ultimately pointless).
So long as the terms & conditions of assistance provided by the Cth under s 96 are
voluntary, the Cth enjoys a plenary pwr to grant $ to the States which can be used in a
way which circumvents the restrictions which might operate in respect of its other
heads of pwr.
Notes on p 408:
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In The First Uniform Tax Case, it was said that Cth could not have compelled States
from levying tax.
In Hematite, Mason & Murphy JJ said that under s 51(ii) Cth could prevent State from
levying a tax. See also Gibbs CJ & Deane J. What do make of this dicta?

DOGS Case (1981)
- DOGS challenged Cth leg’n which granted financial assistance to States on
condition that it was paid to non-gov’ntal schools, saying it contravened s 96.
- Distinguished Moran on 2 grounds: voluntary arg (here Cth made the choice &
no practical effect for States to deny this); States used as conduits betw’n Cth
& schools so that States did not receive “financial assistance”.
- HCA unanimously rejected 2 args, saying that these are differences without
any legal distinction.
- 3 judges (Wilson, Stephen & Gibbs JJ – most States’ rights) said Moran is
worth challenging.


Saunders Article (p 412)
3 points:
1) Influence of Federal Aid Roads Case on subsequent cases.
2) Each of subsequent cases have had unusual features that complicate precedence –
eg Moran’s Case was not only on s 96 but also s 51(ii); First Uniform Tax Case
was at time of war. Results less settled than supposed.
3) Far from settled where outer limits are set – concept of ‘voluntariness’ does not
provide an adequate theoretical framework.
WK 12.2
2/11/00
Grants ctd


What is the only limitation on s 96? Everything must be formally voluntary. States
must be legally free to say ‘no’.
Other limitations – one that States can legally accept (not really).
Use of s 96 to evade limitations (circuitous devices)



Several restrictions apply to Cth from which States are exempt:
s 51(ii) – discrimination
s 99 – preference
s 51(xxxi) – Cth must pay for compensation but States do not have to
s 116 – freedom of religion
Since s 96 enables Cth to co-opt States in the execution of Cth policies, can Cth
employ s 96 to evade these limitations?
Moran (1939)
- Classic case of substance vs form.
- Addressed case of Homebush Flour Mills (1937) in which States wanted to
levy tax on flour & pay proceeds to wheat growers. Trouble was tax on flour
was an excise (contravened s 90) & States cannot levy excise. So, tried to
evade s 90 (prohibition). State would compulsorily acquire flour from all
millers & pay a certain price that was fixed & allow millers to buy it back at a
higher price (diff being tax) – leg’n did not say it was a higher price. There
were lots of inducements intro into leg’n to make sure States did not keep it.
This was challenged in HCA as a tax (excise). It was held that in substance it
was a tax but in form it was something diff’nt (masquerading as something
else). HCA said in substance it was a tax & unanimously struck it down
(looking for substance over form).
- In Moran, States not able to levy & so called Cth in for assistance. Cth
assisted – Cth would levy an excise on flour (no prob because Cth has
monopoly), proceeds paid to States & States give to wheat growers. Prob was
that no wheat growers in Tas.
- Cth had to levy a uniform excise [s 51(ii) – discrimination] on flour. Paid
proceeds to States & States gave it to wheat growers. In Tas, returned it to
taxpayers.
- This was challenged – to return proceeds of tax to taxpayers means that you are
not taxing them but are really exempting them (amounted to a tax only in
mainland States – so discrimination).
- Maj of HCA held leg’n valid as an eg of a legalistic, non-pragmatic approach,
with a pwrful dissent by Evatt J.
- 3 pieces of leg’n valid, & cannot add them together to make an invalid scheme:
1) Cth Tax Act which taxes flour – s 51(ii) [must not & did not discriminate].
2) Grants Act by which Cth granted $ to States [did discriminate (diff’nt
amounts to diff’nt States) but s 96 is not subj to s 99 (revenue interpreted to
mean taxation; so tax is subj to s 99 but not appropriation – so this should
be re-opened by HCA) – affirmed in First Uniform Tax Case (p 417.5).
-
3) Tasmania Act – got $ from Cth & returned $ to Tas taxpayers [State leg’n
is not limited by anything].
See p 417.9.
Evatt J dissented, & is a strong eg of substance over form. He looked at
scheme & said it was an attempt to evade s 51(ii) & impose tax only in 5
States. To pin that down legally, Evatt J has to make a dramatic conclusion >
Cth Grants Act [this is the Act that is really contravening s 51(ii)] is in
substance a tax Act. Holds a prov’n of Grants Act a law with respect to
taxation & strips s 14 of its “disguise” (p 418.5/6, 419 line 6).

Moran [1940] – Appeal to PC
- Leg’n upheld & judgment was analogous to earlier HCA decision (it was a
swing betw’n Latham CJ’s legalistic view that if all 3 Acts valid, scheme is
valid, & Evatt J’s strong dissent which was praised on p 421).
- Take on board Latham CJ’s notion (p 417.5) that s 96’s purpose is to adjust
inequalities betw’n States which may arise from applying uniform nondiscriminatory Fed laws to States of varying wealth.
Discrimination per se > out.
Discrimination in line with s 96 > OK.
This discrimination is OK because an attempt to ameliorate inequalities.
See p 421.
- How would Moran be decided today (see Saunders)?


Evading limitation of s 51(xxxi) thro’ s 96.
Magennis v Cth (1949)
- Cth & State wanted to acquire property for settlement of returning soldiers for
undervalue.
- Cth has to pay fair compensation on just terms for compulsory acquisition of
property. This applies only to Cth & not to States.
- NSW & Cth agreed on scheme; NSW would compulsorily acquire prop after
war but at 1942 prices (ie, not fairly because undervalue) & Cth would fund
this; this was set out in agreements & statutes – all could read it (stupid).
- Challenged in HCA – basically a Cth acquisition of prop & not on just terms,
contravening s 51(xxxi) & struck it down:
1) s 51(xxxi) is broad enough to incl acquisition by someone other than Cth,
so could incl State.
2) In any case, looking at substance, State acts as agent for Cth; it is a joint
venture – Latham CJ says this is a scheme to evade s 51(xxxi).
- Dixon & McTiernan JJ dissented because Cth leg’n did not acquire prop, only
authorised making of contract.
How do you get around this? Do not put it in writing. They did this.
Pye v Renshaw (1951)
- No agreement mentioned.
- HCA unanimously upheld it.
- No acquisition by Cth; no s 51(xxxi) issue.
- It was a State acquisition, Cth Act granting $ > that is it.




Can only say s 96 is limited by s 51(ii), s 99, if you say it is masquerading as a tax – ie,
in substance it is a tax.
Only apply s 51(xxxi) to some Cth law that relates to acquisition of prop.

DOGS Case (1981)
- s 116 says that Cth shall not establish religion & shall not prohibit freedom of
religion.
- Does this apply to s 96? Yes.
- Did it breach it in this case? HCA said ‘no’:
1) s 116 is a general prohibition that applies to s 96 (covers all mechanisms).
2) Maj said that leg’n did not breach s 116.
Summary of s 96:


General limitations – law must be legally voluntary.
Interesting q on issue of circuitous devices:
Mason more substantive than Dixon ct.
Current HCA slightly less substantive than they were.
WK 13.1
6/11/00
Constitutional Rights







Why do we not have a Bill of Rights?
Never proposed to adopt a Bill of Rights.
There was consideration of an equivalent to 14th Amendment – guarantee due process
& equal protection of laws. This was rejected for 2 reasons:
1) All Englishmen & we do not break rights; common law & democracy are
sufficient.
2) We do not want to guarantee equal protection to non-Whites.
Aust Convention did not overlook this but deliberately decided not to adopt it.
See Deane J in Street v Qld Bar Assoc (1989) on ‘rights’ (p 548): separation of
judicial process & due process which flows from that; prohibiting discrimination; etc.
Has been proposal to incl express rights in Const; modern dev’nt is in implied rights
(freedom of political communication).
ACTB v Cth (1992)
- Concerned validity of Cth leg’n prohibiting TV ads at election & referendum
time.
- Purpose: idealists say to prevent powerful financial interests from dominating
media; realists say to prevent poor Labor being dominated by wealthier
Coalition.
- 2 things:
1) Prohibit broadcasting of political affairs (excluded news & current affairs).
2) Made provision for broadcasting of free airtime, favouring established
political pties (people not pol candidates therefore did not have free time).
- This was challenged. Prima facie fell in pwr [s 51(v)] but allegation that
breached implied prohibition (restricting political speech).
- Leg’n held invalid by 5:2 (Brennan & Dawson JJ dissenting) but 6 judges
mentioned political freedom (& probably Dawson J did as well).
-
-
Maj (principally Mason CJ):
No express prov’n for political communication in Const – has to be derived by
implication.
Const provides that there is direct election of members of Parl via ss 7 & 24 >
inferred that we have a sys of representative gov’nt.
i)
Public needs to be informed of policies & people.
ii)
Need to instruct/indicate to reps what we feel – need communication
about gov’nt betw’n public, & betw’n public & members of Parl.
Implied freedom of political communication is essential to our sys of
repres gov’nt (p 621) but cannot be absolute, it must be subj to some
constraints – adopted Castlemaine Tooheys (is it in pursuit of some
legitimate gov’ntal objective & is it proportional to accomplishing it?).
Balancing the need to have freedom of pol comm’n with gov’nt it
protected.
There is nothing more at core than to discuss election matters at time of
election.
Maj held that it failed (not satisfy proportionality).
-
Broadcasting election issue at time of election is essential (putting restriction
on free time was bad).
-
Brennan J dissented because he allowed a margin of appreciation (p 632) –
could Parl have reasonably believed that what it was doing was reasonably
proportional to …
Brennan J looked more at the ads issue whereas others looked mostly at free
time which was more agregious.
-

Can’t have restriction of material that prevents an intelligent vote [Dawson J].
Not only voting booth but also election period [McHugh J].
All times (State & Cth matters) [Mason CJ, Brennan, Deane & Toohey JJ].
How can you divide pol from non-pol > maybe there has to be freedom of
speech in general [Gaudron J].
Or maybe there has to be freedom all together.
Right of equality.
Where do you draw the line with this implied freedom? This is still an
unfinished process today.
ACTB v Cth (1992) ctd (imp pts)
-
Leg’n held invalid by 5:2 (Brennan & Dawson JJ dissenting & holding it
valid).
Several imp issues:
1) issue of implications:
- View expressed after Engineers was that Engineers opposed the making of
implications – this is not true (p 618.7, 619.2 line 6). Mason CJ regards that
this might not be right to say (p 619 para 2). Necessity may be too stringent a
test from the textual implication (can be more liberal like “appropriate”) but
not from the structural implication. See also pp 641-2 Notes 5 & 6.
2) Cannot infer a Bill of Rights. Framers expressly rejected a due process clause.
See p 620.4, 633.2, 640-1 Note 3 (dialogue betw’n Deane J, who said we
cannot be ruled by framers, & Mason CJ, who said we should be influenced by
Const writers). See also Toohey’s silly speech on p 643 Note 9.
3) Representative gov’nt established by Const. This is inferred from ss 7 & 24.
This has 2 connotations – reps are accountable to people & have responsibility
to take people’s views into account (Mason CJ on pp 620-1).
4) Indispensable to representative gov’nt is freedom of communication re: public
affairs & political matters (Mason CJ on p 621.8 & 647.2, Gaudron J on p 628
para 2, Brennan J who says pol & eco matters on p 631.9).
5) Freedom of communication will incl communication among people & betw’n
people & resps (Mason CJ on p 622.3, Gaudron J on p 629.3, McHugh J on p
637.8).
6) Freedom of communication is so indispensable that it is implied into Const
(implied prohibition in Const guaranteeing freedom of political
communication). See Mason CJ on p 623.
- What is the ambit of the implication? Few leave open speech & not just
political (Mason CJ on p 624.1 & 621.8, Gaudron J on p 629.1, McHugh).
7) Incl State political matters & not confined to Cth.
- See Mason CJ on p 624.3, Deane & Toohey JJ on p 625-6, Gaudron J on p
630.8/9).
- Dawson J did not agree because did not agree with the implied freedom.
- Brennan & McHugh JJ did not express opinion.
8) Freedom is not absolute.
- See Mason CJ on p 624.8, Deane & Toohey JJ on p 626.7, Gaudron J on p
631.1, McHugh J on p 639.5.
- Brennan J dissented on this pt.
-
-
What is the test for infringement?
Several judges called on US distinction > restrictions going to content & those
to mode & manner. See Mason CJ on p 624.9, McHugh J on p 639.9-640,
Deane & Toohey JJ on p 643 Note 7.
2 elements:
Content: Following US approach, if you have a restriction going to content
(restrictions operate with respect to the character of the ideas or info), you will
need a compelling justification. Q is “are there less restrictive means of
accomplishing the objectives?”.
See Mason CJ on p 624.9-625.1, McHugh J on p 640.2.
Mode/manner: Restrictions imposed on an activity or mode of communication
by which ideas or info are transmitted are more susceptible of justification. Ct
asks “is the restriction reasonably necessary & proportional to accomplishing
the gov’ntal objective?” (Castlemaine Tooheys test).
See Mason CJ on p 625.2, McHugh J on p 640.1, Gaudron J on p 631.5.
9) Conclusion:
- Here there was a content restriction at the core of protection > so examined
with “scrupulous care” (Mason CJ p 625.7) & failed.
- It depended on who focussed on what more (Brennan J looked more at ads
whilst others looked at free time issue).
-
Gaudron J: Appropriate limit/balance betw’n free speech & defamation is the
common law (p 631).
McHugh J: Left open whether freedom extends beyond election period (now
against that it goes beyond).
Brennan J: Allowed a “margin of appreciation” – ie, gave greater weight to
Parl’s judgment.
Dawson J: Dissented completely & said there is no implied freedom of
political communication.
Summary (ACTB):



Established a 6:1 maj (great deal of agreement) that there is an implied freedom of
political communication derived from representative gov’nt.
It is not absolute.
Essentially you have a Castlemaine Tooheys test to determine whether limits have
been breached with more serious restrictions when goes to content not mode (a la US).

Next q: What impact, if any, did implied freedom of political communication
have on law of defamation?

Issue arose 1st in New York Times v Sullivan (1964)
- There was an ad in NYT about civil rights in Alabama & polce commissioner
took exception to this & sued in Alabama cts.
- Feared that law of defamation could be used to stifle public officials.
- Sup Ct said that 1st Amendment & law of defamation did not exist in separate
streams; public official can sue for defamation only if publisher is guilty of
malice.

Theophanous v Herald (1994)
- HCA followedabove approach & constitutionalised law of defamation. (p
645.5).
- Defamation of public official or political candidate will not be actionable if
publisher can establish (p 651):
i)
Unaware of falsity
ii)
not published recklessly
iii)
publication was reasonable in all circs
- Treated implied freedom as a constitutional right & constitutionalised
defamation (it is an implied Const principle).
- 4:3 in favour of implied freedom (narrowing law of defamation). Mason CJ,
Toohey & Gaudron JJ, & Deane J (he was radical & said complete freedom of
speech) vs Brennan, Dawson & McHugh JJ who said that law of defamation
had developed over yrs to strike an effective balance betw’n principle of free
speech & protecting reputation.

Lange v ABC (1997)
- Concerned a defamation action by former NZ PM against ABC.
- ABC had pleaded a Theophanous defence.
- HCA considered Theophanous.
- 2 things to note:
1) Brennan CJ, Dawson & Toohey JJ about to resign & might be fearful that
Howard would appoint Conservatives not keen on freedom of speech. There
was a joint judgment with all 7, with least change from Brennan CJ.
Brennan CJ: in Theophanous said current current law of defamation
represented appropriate balance betw’n freedom of speech & protection of
reputation; here said ‘no’ not that.
Dawson J: here endorsed implied freedom (before he rejected it).
Toohey & Gaudron JJ: had adopted Theophanous principle of
constitutionalism of defamation; here they abandoned it.
McHugh J: moved like Brennan CJ but also abandoned that view that it only
applied to political elections.
-
-
-
What they did with Theophanous:
Mere change in Const does not mean HCA must change its view.
In First Territories Representation Case (1975), it was held by 4:3 that
Territories could be represented in Senate (Barwick CJ, Gibbs & Stephen JJ
dissented). Second Territories Representation Case came out the same as 1st.
HCA saw maj in Theophanous was created artificially (because of Deane J) &
showed no unity.
HCA held:
Theophanous constitutionalised law of defamation (defamation was affected
by implied freedom). Lange regarded that as an incorrect approach. Accepted
implied freedom of political communication but tried to narrow it along lines
of people who showed concern like McHugh J (put it on a firmer basis).
ss 7 (directly elected Senate) & 24 (directly elected House)
s 64 (implying the principle of resp gov’nt)
s 128 (referendum prov’n)
HCA recites these 4 provs & think they are getting back to text > imply
freedom from that (mostly using ss 7 & 24).
What is protected is freedom of communication relating to elections to the Cth
Parl. State politics & international politics related to that are left open.
Interpret it in line with ACTB (not absolute, limited by Castlemaine Tooheys)
– same pts are clarified. Does not relate to all speech (like Gaudron J said) &
not confined to election period (like McHugh J said) but extends to all time.
2) On pt of defamation:
- Implied freedom is an immunity from law, not a right – it is a limitation on Cth
pwr (if have free-standing right, could sue for breach of that right).
- Is current law on defamation in line with implied freedom of political
communication? Brennan, McHugh & Dawson JJ in Theophanous said ‘yes’
(balance) but here say ‘no’, it needs to be liberalised.
- Defence of qualified privilege which would allow publication with certain
limits did not extend to areas of reciprocity. Kept defamation law separate
from Const, but made it compatible & more liberal by expanding qualified
privilege to incl sit’ns of mass communication (ie, there was a need to expand
qualified privilege to incl these sit’ns).
- Extent of qualified privilege & impled freedom occupied the same territory but
qualified privilege is probably wider.
- In this case, it was defamation of a former NZ PM. Did qualified privilege
extend to defamation of foreign leader? Yes.
Summary (Lange):



Limited freedom by tying it to 4 sections (?).
Not much change in analysis of how you view the breach (they don’t look at or deny
conduct & mode/manner).
Left defamation unconstitutionalised – so common law subj to Statute.
6 important pts from Lange:
1) Essence of what Theophanous decided was that law of defamation must be
compatible with Const & they accept this (p 669).
2) Freedom of communication is one regarding political, gov’ntal matters relating to the
Cth (p 674.6). Freedom has no constitutional protection about State matters.
See p 674.6, 670.5/8, 671.2 & 680.5.
Emphasise that implied freedom is based on Const text (p 672.1, 676.9, 679.8).
It is not a personal right; it is a freedom (p 671.3).
Not confined to election period; it applies to all periods (p 671.5/6/8).
3) Freedom is not absolute (p 671.9) & note the test (p 672 para 1 & 674 para 2). Latter
is VIP:
i)
No mention of Cth.
ii)
Castlemaine Tooheys test.
4) Common law must conform with Const (p 673.3).
In Theophanous combine Const & law of defamation.
Here common law must be compatible.
5) Common law of defamation & Const protection must be coterminous. Does it incl
States & Terrs? (p 673.4, 677.3) Defamation does whereas in relation to Const
protection it was left open.
6) Conclude that common law needs to be reformed to fit freedom but that NSW Act is
compatible with the freedom.
7) Defamation:
- Extend qualified privilege to masses.
- Publication must be reasonable. Reasonableness is the basic criterion adopted
in NSW Defamation Act.
- It must not be actuated by malice [improper purpose] (p 679.2).
- Publication agaisnt your political opponent is not malice (p 679.5).




No constitutional defence (p 680.2), Theophanous defence struck out.
Do not constitutionalise defamation but conform common law to be in line with Const.
On implied freedom, try to tie it closely to 4 sections; it extends to all time; repeat
limitation from ACTB.
So, qualified privilege did incl State matters whereas implied freedom was left aside
by HCA (left open).
WK 13.2
9/11/00
Constitutional Rights ctd

Levy v Vic (1997)
- Last HCA case on this topic.
- Vic law restricted entry to duck shooting areas. Reg 5 prohibited access to
duck shooting at beginning of season. Persons trying to get in to get info
against duck shooting & argued that restrictions impaired their freedom of
political communication. 3 issues were brought up to HCA:
1) Communication regarding State law could fall into implied freedom.
2) Whether you can have non-verbal communication (could incl non-verbal
activities like entry into an area, silent protest, etc).
3) Whether restrictions were basically proportional to achievement of gov’ntal
obj.
- Law was upheld.
-
1st issue was waded by HCA.
Lange left pos’n open (not State because there was foreign issue).
ACTB & other cases of Mason ct say State would be incl.
Brennan CJ & McHugh J said they would probably not consider State matters
in the implied freedom (against it).
Today, issue of implied freedom relating to State matters is left open (not
decided). Current HCA would be less expansive than Mason ct.
See p 683.6, 685.5.
-
On q of non-verbal communication, HCA said this was covered by implied
freedom (all HCA agreed). See p 682.
-
Restrictions were proportional & were aimed at protecting safety (barrier to
ensure they did not meet) – therefore, did not consider 1st issue.
Reasonable & concerned safety. They were in proportion to gov’ntal obj.
They were proportional to safety.
It was a mode/manner restriction, not content (not even pro-duckshooters
allowed in area).
See p 685 Note 1.
-
Summary (Levy):
 What does Levy add to Lange?
1) Clarifies qualified privilege might be wider than the implied freedom (Lange left State
matters open).
2) Clarifies that non-verbal activity can represent communication.
3) Provides an eg of what falls within the qualification.
Other implied guarantees

Leeth v Cth (1992)
- Represents zenith of implied constitutional freedoms.
- Here they go from implication to invention.
- Cth law required judges sentencing people for fed offences to apply these State
rules concerning allegibility for parole under State in which they were tried &
convicted.
- Fed prisoners housed in State gaols. There would be unequal parole (arbitrary
discrimination). Argued that this law infringed an implied principle of equality
before the law.
- HCA came close to adopting this implied freedom.
- Argued on 2 grounds that there was an implied protection of equality:
1) It was an implied feature of fed judicial pwr – accepted by Gaudron J
(struck law down), Deane & Toohey JJ (but thought law did not breach
this); Mason CJ, Dawson & McHugh JJ rejected this arg; Brennan J did not
discuss this pt.
2) There is an implied constitutional prohibition against arbitrary
discrimination, based upon common law which recognised equality. This
was supported by Deane & Toohey JJ, & to some extent by Brennan J, &
opposed by Mason CJ, Dawson & McHugh JJ.
- Law was held valid by 4:3 (Mason CJ, Dawson & McHugh JJ dissenting). On
each issue, it was 3:3. No issue had a maj vote.
-
-
-
-
Gaudron J:
She took the view that fed jud pwr had to be exercised in accordance with jud
process, & notion of equality before the law was an inherent part of that
process (all judges agree with these 2 pts).
She says not just procedural but also actual rules of law that ct applies should
be the same (this extra pt is supported by Gaudron J only). See p 869 para 1 &
p 735 Note 1.
Deane & Toohey JJ:
Based on arg in Preamble. People agree to unite in a federation – all people &
all people equally (p 868).
It is Gaudron J’s arg above.
Const does contain some prohibitions on discrimination (eg: ss 90, 92, 116,
117, etc). See p 869.
Also say common law recognised equality before the alaw but some exceptions
like women & Crown (p 868.5) – therefore, fundamental implied prohibition
on arbitrary discrimination.
Mason CJ, Dawson & McHugh JJ:
No general requirement in Const that Cth laws should have a uniform
operation throughout Cth (p 865 line 1).
Important pts from Leeth:




Mason CJ, Dawson & McHugh JJ: found no limitation regarding substantive equality
& therefore law was valid.
Brennan J: accepted arg 2 but said what implied prohibition prohibited was irrational
discrimination & here you had rational discrimination.
Gaudron J: law unequal & invalid.
Deane & Toohey JJ: law did not breach 1st ground (jud pwr pt – not breached because
no inequality, same rule applied in each case [local parole regime]) but did breach 2nd
ground (rationality depends on where gaoled & not sentenced).
Summary (Leeth):



Leeth left pos’n unclear.
2 gds – deadlocked at 3:3.
4 out of 7 did recognise some ground for equality (some potential possibility of some
constitutional entrenchment of prohibition on inequality).

Kruger v Cth (The Stolen Generation Case) (1997)
- Law was upheld.
- Q of legal equality.
- Arg was that the law authorising removal of Abos from their fams represented
breach of implied right of equality.
- Deane J was gone from HCA & replaced by Gummow J. Mason CJ gone &
replaced by Kirby J (who did not sit).
- Argued on Leeth.
- Repetition by Gaudron J (inherent in notion of fed jud pwr that was equality
before law) & Toohey (implied prohibition against irrational discrimination).
- Brennan CJ, Dawson, McHugh & Gummow JJ rejected both grounds in Leeth.
- So, 4:2 rejected equality.
- Rejected equal opportunity clause; recognises procedural but not substantive
due process (p 731.5, 735.2).
- Notion of equality before the law has been rejected by HCA (4:2).
- Winterton says we should change Const & get an equal opp cl like in US.

Polyukhovich v Cth (1991)
- Cth War Crimes Act.
1) Lack of leg pwr > HCA upheld law under geographical externality by 6:1.
2) Contravened separation of judicial process (no pwr to enact retroactive
crim laws) > HCA upheld leg’n by 4:3.
-
-
On 2nd issue:
Cth Parl could not enact a Bill of Attainder (a Statute that declares people
guilty of crime & sentences them to death; any leg’n that imposes crim liability
on specific person).
Cth Const does not expressly prohibit Bill of Attainder nor ex post facto laws
(US prohibits both).
Sep of pwrs means that leg cannot enact a B of A because it is a judicial pwr.
Cth Parl cannot impose crim liability on specific class of people (might extend
to civil).
-
Retroactive crim law – possible (except for Toohey J who said criminal there
but not in Aust at the time).
Summary (Polyukhovich):



Retroactive crim laws are valid (except prob of Toohey J who did not endorse it as a
universal proposition).
Retroactive crim laws are valid but no clear maj saying in all cases:
3 said OK (Mason CJ, McHugh & Dawson JJ).
Toohey J said sometimes ‘yes’, sometimes ‘no’, but valid here because not contrary to
rational (behind the concerns).
Deane & Gaudron JJ saying invalid.
Brennan J had no comment because no pwr to enact the law.
Kable v DPP (1996) NSW
- Made threats whilst in prison.
- NSW passed special Act saying application could be made to Sup Ct for
preventive detention.
- B of A (imprisonment of person) – Cth Parl could not have enacted it but this
was a State Act.
- Was there a SOP in State Const? No, by a unanimous HCA.
- If non-jud funct’n given to State ct by State, State must not besmirch integrity
of Ch III of Const.
- Maj was McHugh, Gummow, Toohey & Gaudron JJ. Brennan CJ & Dawson J
dissented.
- Kable principle: States must not vest non-jud funct’ns in their cts of such a
kind that would lead an ordinary, reasonable member of public to conclude that
cts are not independent.
Summary (Kable):
1) Entire ct recognised that still no separation of State jud pwr (subj to Kable principle).
State can enact a Bill of Attainder.
See McHugh J on p 50.4, 57.3, & also Brennan CJ, Dawson & Toohey JJ.
2) Because of Ch III ss 71 & 77(iii), fed jud pwr invested in State cts.
States must retain a jud sys headed by Sup Ct.
See Gummow J on p 51.1/8/9, 52.1.
3) Ct saw Aust ct sys as more integrated. There is one common law.
See p 52.6, 54.5.
4) Because Const Ch III envisages appeals from Sup Ct to HCA, States do not have pwr
to abolish right of appeal to HCA & also to Sup Ct.
5) Neither Cth nor State could undermine the scheme envisaged by Ch III of Const &
therefore State cannot invest in Sup Ct non-jud functions incompatible with the
exercise of fed jud pwr (p 55.3).
Incompatible functions are those that would lead people to believe Sup Ct is not
independent. See Gaudron, Gummow & Toohey JJ (p 56.2, 57.4).
6) State can invest non-judicial functions in Sup Ct but not so many that it loses its
identity as being a s 77(iii) ct.
See p 56.4.
7) Conclusion > Kable principle (endorsed by 5) was contravened by a variety of factors:
- Interim order could be made in absence of def.
- Sup Ct is making an order for detention of person on civil standard (balance of
probabilities).
8) Bearing in mind Ch III (protecting integrity of State cts), there was nothing from
stopping NSW Parl to make leg’n imprisoning Kable. Prob was that it incl the cts (but
note this was more preferable because left to ct & therefore looked better).


There is no State separation of pwrs but Ch III of Fed Const does impose some limits
on what States can do with their judiciaries because:
1) Cth Parl can vest federal jurisdiction in State cts (should not vest in their cts nonjudicial functions in sit’n where public would conclude cts are not independent &
therefore there is a lack of confidence in cts).
State gives judiciary non-judicial but not such that it is incompatible with exercise
of fed jud pwr.
2) State cts must retain character of cts – s 77(iii) & s 71. If give non-judicial
functions, must not be unproportional.
3) Envisages appeals, therefore must retain judiciary, Sup Ct & appeals.
Leg’n invalid because invested non-judicial functions in Sup Ct, thereby undermining
confidence on part of public.
Distinguish 5 levels of rights (Winterton)

The lower the level, the greater the legitimacy.
1) Express rights
 The strongest case are express rights (conferred by Const) – ss 51(xxxi), 80, 92, 116,
117, etc.
 HCA has interpreted most of express rights narrowly.
 Eg: s 80 says that a trial of indictable fed offences should be by jury. A superficial
reading would suggest that it guarantees trial by jury. It has really been interpreted by
HCA to mean guarantees trial by jury on indictable fed offences.
 In 1937, Dixon & Evatt JJ dissented in Lowenstein & favoured a more rational
approach. Deane & Kirby JJ take on their view but never have nos to overturn this
legalistic view.
 Same story with s 116 (religion).
 Property interests have been interpreted broadly (s 92 has been cut back, however,
since Cole v Whitfield).
2) Where common law notions of rights are used to interpret constitutional
provisions
 Similar to long-standing approach that use common law to interpret statutes.

In Coco (1994), HCA used judicial principle of ‘rule of law’ to read down leg’n. In
Cheatle’s Case (1993), HCA unanimously interpreted s 80 in accordance with
common law history of criminal trial by jury at Fed’n, & said s 80 required unanimous
votes. In Bicentennial Authority Case (1988), s 51(xxxix) was interpreted via
common law notions re: freedom of speech.
3) Rights implied from express provs (express provs that are not themselves rights
provs)
 Eg: McHugh J in ACTB in which he implied from ss 7 & 24 that you need free speech
at election time but limited himself via text (kept to election time).
 Best modern eg is Lange – freedom of speech should be moved from category 4 to
category 3 (from ss 7, 24, 64 & 128, freedom of polirical communication rights were
implied).
4) Rights implied from general Const provs or from the structure of the Const
 General Const provs:
In Leeth, Deane & Toohey JJ purported to imply equality from Preamble.
Wider views from ACTB. In ACTB Mason CJ said ‘necessary’ was too strict a test –
from text more liberal [3] (more legitimate, closer to text, more liberal); from structure
less liberal.
 Structure of Const:
Eg: SOP doctrine (Boilermakers’).
5) Rights can be implied from the common law & converted into a constitutional
prohibition
 Modern version of Dr Bonham’s Case.
 See BLF Case (1986) per Street CJ.
 See ACTB per Gaudron J where implied rights from fact that we are a free society (p
628.9-629.1) & per Dawson J (p 635.9).
 HCA not commented much on this issue.
 Union Steamship v King (1988) – Zines p 418:
HCA says 2 things:
1) Thro’ expression of “peace, order & good gov’nt” were words thro’ which you
could limit pwr & imply rights (see Street CJ & Priestley J in BLF) – HCA
rejected this & said these are not words of limitation.
2) There were fundamental rights deeply rooted in common law & our democratic
society (Cook) – HCA leaves this door open.
WK 14.1
13/11/00
Engineers’ Revisited

Engineers’ Case (1920)
-
-
-
-
-
Background:
After Fed’n, q was whether gov’nts could control others. Can Cth tell what
States should do & vice versa? Yes Const says something on this:
s 114: neither Cth nor State can tax the property of the other (interpreted as
prohibiting property taxes). HCA has adopted a “criterion of liability”
approach when asking themselves that relationship betw’n tax & property but
does not incl all taxes. If had rates – property. Income tax & incl income
derived from property (“criterion of liability” is the earning of income).
ss 106 (preserves State Consts until amended in accordance with their own
provs: any Cth law applying to State Const could be incl) & 107 & 108.
Q: s 106 is said to be subj to this Const & also s 51 is subj to it – which
prevails (mutual subjection to Const)? See Zines on pp 336-341. Zines offers
a sol’n on p 340 (this is not the view of HCA) > s 106 should be seen as subj to
rest of Const as well as s 51, & s 51 subj to Const should be seen as subj to
limitations on Cth’s pwrs (like s 92, etc).
See Australian Railways Union Case (1930) per Dixon J.
As with US, there have been several periods on Cth binding the States. Is Cth
bound by State instrumentalities & vice versa?
1st period (1904-1920): period of immunity of instrumentalities – D’Emden v
Pedder (1904) – States could not make laws binding the Cth, & Cth could not
bind the States. This was influenced by intention of framers & US cases.
2nd period: non-immunity. Cth can make laws binding the States (Engineers).
We are still in this period but should regard ourselves in a sub-branch. New
limitations recognised in State Banking Case (1947) re: general principle of
non-discrimination.
Cth industrial leg’n could apply to WA gov’nt sawmill.
Q: Could CTh law bind a State instrumentality established under State leg’n?
Several points:
1) Holding:
 Cth could bind the State under s 51(xxxv) – see p 753.4.
 There are said to be 3 resevations (only 1 was an exception):
i)
Not discussing State activity under Royal Prerogative (putting aside issue of
RP) – this was not an exception (said in 1940s).
ii)
What we say about s 51(xxxv) might not apply to s 51(ii) – why? Not clear –
not an exception.
Can Cth tax States? Yes.
iii)
Only true exception: discriminatory law – laws that discriminate against the
States not between them (treating the States differently against people) – State
Banking Case (1947).
 US pos’n distinguished on 2 grounds:

i)
We have resp gov’nt & they do not (gov’nt resp to Parl) – p 755.6 Note 9.
ii)
Common sovereignty of Crown (we still have Crown) – p 751-2.
This doctrine was seen as reciprocal > Cth can regulate States, & States can regulate
Cth > this is not the case.
2) Exploded doctrine of “reserved State pwrs”
 See p 752.8 (“But it is a fundamental & fatal error to read s 107 as reserving any pwr
from the Cth that falls fairly within the explicit terms of an express grant in s 51, as
that grant is reasonably construed, unless that reservation is as explicitly stated”).
3) Concerns issue of interpretation.
 Symbolic role is exploding doctrine of “reserved State pwrs”.
 Decided that doctrine of “immunity of instrumentalities” (doctrine of implied
prohibitions) is incorrect.
 In construing the Const, there is focus on text (p 746.9, 749.8, 751.5).
 HCA did not deny making of implications:
Mason J
Latham CJ in SA v Cth (1942) & Dixon J in West v Commissioner of Taxation
(NSW) (1937) – Engineers is not opposed to making of implications (p 754 Note 5).
Abuse of pwr is dealt with by politics.
It really decided that one should interpret lang of Const by focussing on text, but
implications could be drawn when they are necessary.



RTE Latham (on p 757) criticises the case in 1937, saying that it cut us off from more
political astute thinking of US, & placed Aust into a strict, rigid, legalistic Br pattern
(this is sort of true).
Real rationale of case was change in Aust circs – growth of nationalism as a result of
WWI (per Windeyer J). Changes in Const interp – not necessarily to correct error but
because of changing society (p 758).
Jeffrey Goldsworthy (p 759 Note 2) who attacks Windeyer J – either Const says
something or not; either it implies a limit or not; can’t change times.
WK 14.2
16/11/00
Intergovernmental Immunity

State Banking Case (1947)
- This is politically & legally an imp case.
- In Banking Act 1945 (Cth), Cth provided that no bank could deal with a State
without permission of Cth.
- Challenged that this prov contravened limitation on Cth pwr.
- Law held invalid by 5:1.
- Discriminated against States relative to rest of country (States could not deal
with private banks).
- 4 strands of reasons:
1) Now obsolete > When law of Cth discriminates against States, its true topic
is the States & Cth has no pwr in s 51 to legislate on topic of States. View
of Latham CJ & Williams J in State Banking Case, & Barwick CJ in
Payroll Tax Case (1971), & was destroyed by Mason J in QEC (1985).
2) Cth cannot discriminate against States but there is a wider prohibition >
Cth cannot excessively interfere with State functions. This originated in
judgment of Rich & Starke JJ. The doctrine was pinned down in Dam by
Mason J, & was recognised as 2nd limb in test in QEC & Education Union
Case (1995). This is a sensible doctrine.
3) Discrimination doctrine (Dixon J). Generally speaking, a Cth law cannot
discriminate against the States. If it does, it is invalid. Applied
occasionally (eg: in QEC in 1995).
Some pwrs seen as envisaging discrimination but maj do not.
“The federal sys itself is the foundation of the restraint upon the use of the
pwr to control the States” (p 764.8).
“But, to my mind, the efficacy of the sys logically demands that, unless a
givel legislative pwr appears from its content, context or subj matter so to
intend, it should not be understood as authorising the Cth to make a law
aimed at the restriction or the control of a State in the exercise of its
executive authority” (p 766).
The inference > from fed sys that Cth can’t discriminate against the States
– why? Because if States singled out, don’t have protection as if the laws
were to apply generally.
Cth > “no person may use a cheque” > falls under s 51(xvi) & valid > can
vote out gov’nt.
Cth > “no State may use a cheque” > State not protected.
4) Dissenting view of McTiernan J > “justifiable” discrimination. Either says
Engineers or perhaps more rationally saying this fell into exception if pwr
envisages discrimination, there can be (p 767).
This is the view of Brennan & Deane JJ in QEC in dissent, but the maj
view in Lemonthyme (1988) & Australian Education Union Case (1995).
Summary (State Banking Case):

Case’s holding is as per Dixon J. Invalid because discriminated against States. This
was not a pwr that envisaged discrimination.

QEC v Cth (1985)
- Total ban against laws discriminating against States. Applied once in State
Banking, & now in QEC.
- Leg’n arose out of Qld pwr dispute. Concerned State Elec Comm. Cth passed
Conciliation & Arbitration Act (Cth) regulating disputes in Qld elec pwr
industry.
s 6: “electricity disputes” – s 6(1) applied Act to current dispute; s 6(2) applied
to future disputes.
s 7: “expeditious” – disputes had to be resolved (by IRC).
s 8: “must decide” – provided that IRC had to decide the disputes & could not
put off to State Tribs.
s 9: “full bench” – IRC had to hear this with a full bench rather than 1 & then
full bench (in interests of expedition).
- Impact on State would not have been enormous.
- HCA endorsed the 2 implied prohibitions. HCA held leg’n invalid (Brennan J
dissenting, & also Deane J) for breaching the State Banking principle
(discriminating against the State).
- Endorsed 2 implied prohibitions:
1) General prohib’n against discriminatory laws (State Banking principle) –
placing on States special burdens or disabilities. With discrimination
prohib’n, there is a low threshold.
2) Applies to non-discriminatory laws (general laws). Prohib’n against laws
of general application which operate to destroy or curtail the continued
existence of the States or their capacity to function as gov’nts (Mason J
following his arg in Dam). Has a high threshold > impairment of capacity
to function as State gov’nt not interference with functions (everything
interferes with functions).
-
Several points:
1) Applies to discr’n of 1 or all of them.
Discr’n against the States, not betw’n them (betw’n them is not
constitutionally imp) – p 769.2.
2) Applies to State leg as well, not just State exec, & also to State cts.
3) Applies to not just States but also to their instrumentalities.
Also Elec Comm, city of Melb (not a State).
Applies in a substantive way even if discr’n is not 100%.
-
There are exceptions to this general prohib’n:
1) Will not apply where it is a removal of a State privilege (restoring State to
equality is not discr’n) – p 770.3.
2) If terms of the pwr [s 51 (…), s 52] or its nature or subj matter envisage
laws that discriminate agaisnt States, then it will not apply to those pwrs –
eg: s 51(vi) [DixonJ].
-
Q: Does s 51(xxxv) envisage discr’n? HCA divided on this pt.
Maj said s 51(xxxv) does not envisage discr’n (p 770).
It discriminates agaisnt States.
Does s 51(xxxv) envisage discr’n? No > therefore, invalid, even though this
Act has little impact.
3% priv producers.
97% is almost 100 % > therefore, effectively discriminates against the States.
-
Dissents by Brennan & Deane JJ.
Both Brennan & Deane JJ recognise that s 51(xxxv) envisages laws dealing
with particular ind disputes.
Deane J held s 7 valid, ss 8 & 9 invalid.
Brennan J: Cth can make law dealing with an ind disp but discr’n must be
rational or proprtional (ie, Cth can make law dealing with an ind disp so long
as reason for signalling this out is related to the pwr & is proportional) – p 772,
773. Held s 6(2) valid but all rest invalid.
Summary (QEC):



Case clearly est the 2 limbs of implied prohib’n even though on 2nd limb (nondiscriminatory aspect) it was dicta.
On 1st limb it clarifies:
can apply to discr’n against less than all States
can apply to discr’n less than 100%
State Banking principle (discriminating against the States) still applies.
Brennan J: imp decision on rational discr’n (originally McTiernan J in State Banking
& Williams J in Second Uniform Tax Case).
Brennan J’s approach of rational discr’n is now accepted as HCA’s approach today.

Lemonthyme (1988)
- Cth wanted to determine if on WH List.
- Pending the inquiry, Cth said there should be no logging.
- Leg’n challenged:
1) Did not fall within “external affairs” pwr.
2) Discriminated against Tasmania because this area was public land owned
by Tas & was singled out – discriminated against State. But HCA rejected
arg. Act was valid because discr’n was rational (singling it out because of
its heritage properties). This was 1st time HCA endorsed rational discr’n
(no dissent on this pt).

Education Union Case (1995)
- HCA held 6:1 that IRC had juris. Dawson J dissented on gd that there was lack
of pwr.
- 7 pts of maj:
1) HCA confirmed 2 implied prohib’ns (2 elementsof prohib’n) – see p 778.7:
i)
prohib’n against discriminatory laws.
ii)
prohib’n against general (non-discriminatory) laws which destro States
or impair their ability to function.
- Don’t really address s 106 (p 779.1). Zines suggests (p 340) that s 106 should
not be a factor – this is sensible (HCA not yet adopted this).
- Distinction betw’n gov’ntal & non-gov’ntal functions (reject it but do keep it
for higher & lower stage of gov’nt).
2) When is States capacity to function impaired?
- Look at Deane J in QEC, & say “to control the States” (why “control” gives
more guidance than “impairment of capacity”).
-
-
Distinguish betw’n highest levels of gov’nt (Parliamentarians, judges, etc) &
rest (school teachers). See p 780-1.
Cth can control minimum wages of lower public servants & leave open
whether Cth can control promotion & tfr.
Cth can control wages & working conditions of lower public servants but not
the number of employees (State must be uncontrolled in size of its public
sector).
Higher officials – Cth cannot control anything re: them.
5) & 6) Rational discr’n:
- Cth IRC could refrain from hearing an industrial dispute (p 782 line 2).
- Discr’n here was rational; it was not arbitrary (applied QEC) – p 782.9.
7) Confuse disputes against States with disputes betw’n States.
- s 111 disputes were all industrial disputes (not just those in public sector).
Summary (Education Union Case):




It clarifies as ratio, not dicta, the 2nd implied general prohibition:
Discriminatory law: law discriminates against States (1 or more). Eg: QEC (Cth
statute applied only to Qld pwr).
This case > general law cannot impair capacity of States – all disputes, not just States
but also priv sector disputes (applied to all people). 1st time said Commission didn’t
have some pwr.
Essential limitation re: reg’n of State employment by Cth is that Cth can’t control
employment conditions of high officials or removal of lower (redundancy, because
State should control size of its public sector – no., identity & redundancy with States).
Ordinary terms & conditions of public sector can be controlled.
Represents a further endorsement of rational discrimination (endorsed in
Lemonthyme).
Vic v Cth (Industrial Relations Act Case) (1996)
- Adds nothing.
- Raised both gen & discr limbs.
- Claimed that leg’n gave IRC juris over State beyond that accepted via
Education Union.
- HCA said:
1) We endorse Education Union.
2) We can avoid leg’n as breaching the limits by reading down.
3) Raised discr’n pt on p 786 para 4.
i)
Does not excessivley impinge on WA.
ii)
If it did, it was rational.
- Endorses previous case (Mason CJ replaced by Gummow J, & Dawson J goes
along with it).