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LWZ204 Constitutional Law
Week 6 – Corporations Power and Defence
Power (Intro)
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Part
A: Corporations
Power
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Is the corporation a foreign, trading or
financial corporation?
• Foreign corporation:
• A corporation
formed
outside
the limits
of the
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Commonwealth (New South Wales v
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Commonwealth
(Incorporation
169 CLR 482 at 497-8)
• A corporation formed in France that isn’t
involved in trade or finance?
• A corporation formed in New South Wales that
only conducts activities in France?
Trading corporations: principles
A trading corporation is one for which trade
a significant
or substantial
of its
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activities.
your
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Trading activities are business activities carried
on with a view to earning revenue.
R v Federal Court of Australia; Ex parte WA
National Football League (1979) 143 CLR 190
• Question: Whether certain football leagues and clubs were trading
corporations
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• Mason J:
• Activities test: do the trading activities of the corporation form a
sufficiently significant proportion of its overall activities as to merit
its description as a trading corporation?
• Trading activities: not limited to buying and selling goods at a profit,
but extend to business activities carried on with a view to earning
revenue
• Application: The Leagues and Clubs were trading corporations
because they engaged in business activities which generated
significant revenue. Those activities formed a substantial part of
their overall activities
• Majority: Barwick CJ, Mason, Murphy and Jacobs JJ
• Dissent: Gibbs, Stephen and Aickin JJ
Where the corporation hasn’t started
operations: Fencott v Muller (1983) 152 CLR 570
• Test: Absent current activities, the character of the
corporation must be found in its purpose, principally as
disclosed by the corporation’s constituting documents or
legislation
• Majority (Mason, Murphy, Brennan and Deane JJ): The
company’s memorandum and articles of association
revealed the objectors of the corporation were to
engage in a wide variety of activities and businesses, so
it could be a trading or financial corporation
• Dissent (Gibbs CJ, Wilson and Dawson JJ): The clauses in
the memorandum and articles of association were
generic and not a true guide to the corporation’s
purpose
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Public corporations?
• A corporation might be a trading or financial
corporation even though it has substantial
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and/or policy
functions:
v Tasmania
(Tasmanian
Dam Case)
your• Commonwealth
cover,
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page.
(1983) 158 CLR 1: Hydro-Electric Commission
• Communications Union v Queensland Rail (2015)
256 CLR 171: Queensland Rail
• The same test applies
Was the corporation “formed within the
Commonwealth”?
• Only need to ask for trading and
financial
corporations
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•
The
corporation
must
already
exist
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• The corporations power does not
authorise the Parliament to legislate for
the act of incorporation: New South
Wales v Commonwealth (Incorporation
Case) (1990) 169 CLR 482
• The Corporations Act 2001 (Cth) is a
cooperative arrangement: s51(xxxvii)
Financial corporations: principles
A financial corporation is one for which finance forms a
significant or substantial part of its activities.
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Financial
(In Re
Ku-ring-gai
Co-operative
Buildingcover,
Society (No.then
12) Ltd (1978)
22 ALRthis
621, 642):
your
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page.
…transactions in which the subject of the transaction
is finance (such as borrowing or lending money), as
distinct from transactions (such as the purchase or sale
of particular goods for monetary consideration) in
which finance, although involved in the payment of
the price, cannot properly be seen as constituting the
subject of the transaction.
State Superannuation Board of Victoria v Trade
Practices Commission (1982) 150 CLR 282
• Mason, Murphy and Deane JJ:
• Activities Test: do the financial activities of the corporation form a
sufficiently significant proportion of its overall activities as to merit its
description as a financial corporation?
• Application: the Board was a financial corporation because it engaged
in substantial financial activities, even though the purpose of this was
to administer the fund
• The same test applies to trading and financial corporations
• A corporation may be a trading or financial corporation even if it only
engages in trade or finance for some other dominant purpose (public
service)
• Where a corporation has not begun activities, might need to employ a
purpose test
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• Gibbs CJ and Wilson J in dissent: predominant activities test
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or persons
be
your What
cover,activities
then delete
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page.
regulated?
Rules
(a) A law which has as its subject matter constitutional corporations, in
the sense that it imposes a right, duty or obligation on those
corporations will be supported by the head of power (core)
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(b) A law
regulates the
other persons,
including the
employees or agents of a constitutional corporation, as part of
your
cover,
thenof constitutional
deletecorporations
this page.
regulating
the relationships
with other
people will be supported by the head of power (core/incidental)
(c) A law which regulates the behaviour of third parties, to the extent
that behaviour has the purpose or effect of causing loss or damage to
the constitutional corporation, will be supported by the head of
power (incidental)
Cases
• Laws which target constitutional
corporations: Commonwealth v Tasmania
Case) (1983)
1
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on InsertDam
> new
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to CLR
choose
• Laws regulating the relationship of
your
cover, then
deletewith
thisothers:
page.
constitutional
corporations
Re
Dignan; Ex parte Wagner (1995) 183 CLR 323
and New South Wales v Commonwealth
(Work Choices Case) (2006) 229 CLR 1
• Laws protecting constitutional corporations:
Fencott v Muller (1983) 152 CLR 570
Re Dignan; Ex parte Wagner (1995) 183
CLR 323
• The Industrial Relations Act 1988 (Cth),
gave the
Commission
the
power
to
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on
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examine:
your(a)a
cover,
thiscorporation
page. is
contractthen
to whichdelete
a constitutional
a party;
(b)a contract relating to the business of a
constitutional corporation; and
(c) a contract entered into by a constitutional
corporation for the purposes of the business of
the corporation.
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B: Defence
Powerthis page.
yourPart
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The Defence Power – Section 51(vi)
The Parliament shall, subject to this
have
power to
maketo
laws
for the
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peace, order, and good government of the
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page.
Commonwealth
with delete
respect to…the
and
military defence of the Commonwealth and of
the several States, and the control of the forces
to execute and maintain the laws of the
Commonwealth.
Purposive power
• The defence power is a purposive power, not a subject
matter power: Farey v Burvett (1916) 21 CLR 433
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cover,
thentodelete
• A law
is one
with respect
defence this
when page.
it is
reasonably appropriate and adapted to the defence of
the nation
• E.g. Andrews v Howell (1941) 65 CLR 255
The power is elastic
• The defence power waxes and wanes
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• In times of total war, the power is almost absolute
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• In times of peace it reduces to a core set of powers
• It transitions between war and peace
The power is elastic
War only
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War to peace
Peace to war
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Peace and
War
The assessment is fact dependent
• Whether it is a time of peace, war or
depends
on the
facts to choose
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• Andrews v Howell (1941) 65 CLR 255 at 278
your
percover,
Dixon J: then delete this page.
“though its meaning does not change, yet
unlike some other powers its application
depends on the facts, and as those facts
change so may its actual operation as a
power enabling the legislature to make a
particular law.”
Total war – fullest scope
• Farey v Burvett (1916) 21 CLR 433 per Isaacs J
• Victorian
of Manufacturers
v Commonwealth
(Women’s
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onChamber
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Employment Case) (1943) 67 CLR 347
your
• Factscover, then delete this page.
• Result
• R v Commonwealth Court of Conciliation and Arbitration; Ex parte
Victoria (1944) 68 CLR 485
• Limits
War – other cases
Valid
Regulations providing for the control and pricing of
essential goods: Stenhouse v Coleman (1944) 69 CLR
457;
Invalid
Regulations for the making of insect sprays:
Werheim v Commonwealth (1945) 69 CLR
601;
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Regulations this
for lighting
of factories: Victorian
Regulations prohibiting Christmas advertising, because
it would lead to spending on non-essential goods:
Ferguson v Commonwealth (1943) 66 CLR 432;
Regulations controlling rents: Silk Bros Pty Ltd v State
Electricity Commission of Victoria (1943) 67 CLR 1;
Regulations adjusting contract terms to take account of
war conditions: Peacock v Newtown Marrickville and
General Co-operative Building Society No. 4 Ltd (1943)
67 CLR 25;
Regulations restricting drinking hours: de Mestre v
Chisholm (1944) 69 CLR 51
Chamber of Manufacturers v Commonwealth
(1943) 67 CLR 413.
Post-war – reduced scope
• Rv Foster; Ex parte Rural Bank of New Wouth Wales
(1949) 79 CLR 43
• Facts
• Result
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• Factors:
• Length of time
• Subject matter
Peace - core
• Uncontroversial aspects:
• Armed forces;
• Military Discipline;
• Others?
• Australian Communist Part v Commonwealth (1951)
83 CLR 1, at 253-4, per Fullagar J said the power
included:
…such matters as the enlistment (compulsory or
voluntary) and training and equipment of men and
women in navy, army and air force, the provision of
ships and munitions, the manufacture of weapons
and the erection of fortifications…
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Borderline cases in peacetime
• Commonwealth v Australian Commonwealth Shipping
Board (1926) 39 CLR 1
• Facts
• Result
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• Attorney-General (Vic) v Commonwealth (Clothing
Factory Case) (1935) 52 CLR 533
• Facts
• Result
Peacetime with threats: early approach
• The Communist Party Case
• Facts
• Decision
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•your
Principles:
cover, then delete this page.
(a) The Parliament cannot recite itself into power.
(b) The dichotomy between war and peace is not always
straightforward – there may be a middle ground.
(c) That middle ground won’t support all measures which would be
supported in a time of war.
(d) It is ultimately for the Court to determine the facts and whether
a law is really one for a defence purpose on those facts.
Peacetime with threats: modern approach
• Thomas v Mowbray (2007) 233 CLR 307
• Facts
• Decision
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•your
Principles:
(a) The power is not limited to external threats from foreign
states.
(b) The power is not limited to protecting bodies politic, but
extends to protecting parts of the public at large.
(c) The extended scope is broader in these circumstances
than what was contemplated in the Communist Party case.