Final Exam Notes

LWB242 Constitutional Law

Semester 1, 2011
Lina Terresa Bui

ACQUISITION

ON JUST

TERMS
EXAM SUMMARY 1. Has there been an acquisition? Compulsory By someone for Commonwealth Restriction on use of property no acquisition Tax, penalty or forfeiture no acquisition Resolution of genuine competing claims no acquisition Impairment - must be effective sterilization Reciprocal liability 2. Has property been acquired? Real and personal property Rents and services Rights of way Right of profit Choses in action 3. Have just terms been provided? Assessment Procedure 4. Is there a purpose in respect of which Parliament has power to pass laws?
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RELEVANT HEAD OF POWER

s 51 The Parliament shall, subject to this Constitution, have power to make laws for the peace, order and good government of the Commonwealth with respect to: (xxxi) The acquisition of property on just terms from any State or person for any purpose in respect of which the Parliament has power to make laws

INTRODUCTION
Section 51(xxxi) is a dual provision - it is a grant of power and qualification to other powers. It is not a free standing power as any acquisition must be for the purpose of another head of power (Magennis). This restriction does not apply to State Parliaments (Durham Holdings). Although it had been thought that s 122 was a separate plenary power not subject to separation of powers and just terms, the majority in Wurridjal held that the limitation in s 51(xxxi) applied to the territories power.

ACQUISITION
There must be an acquisition of the property in question by someone for a Commonwealth purpose. This refers to a taking however that is effected. The following will not amount to an acquisition: An acquisition is not effected when property rights are merely affected by a Commonwealth law e.g. where State is restricted from using its land in a certain way as a result of the operation of a federal statute (Tasmanian Dam). The mere extinction or diminution of a proprietary right residing in one person does not necessarily result in the acquisition of a proprietary right by another (Australian Tape Manufacturers Association).

COMPULSORY ACQUISITION

The power only applies to compulsive acquisitions so that a voluntary acquisition is outside its scope (Poulton v Cth). Acquisition must be by the method of requisition and not by the method of agreement (John Cooke & Co Pty Ltd v Commonwealth). IF acquired through negotiation and agreement: Where the Commonwealth acquires property through negotiation and agreement, it is assumed that the terms agreed are just terms (Trade Practices Commission v Tooth & Co Ltd). IF entry into exclusive possession: Entry by the Commonwealth into exclusive possession of land is an acquisition (Dalziels Case).

ACQUISITION BY SOMEONE FOR COMMONWEALTH

By who? Not necessary for Commonwealth or its agent to acquire the property in question. The property may be acquired by someone else for the purposes of the Commonwealth (McClintock v Commonwealth). McClintock v Commonwealth HELD that the Commonwealth could use s 51(xxxi) to compel pineapple growers to deliver their produce to agents of the Commonwealth.

Where the Commonwealth gets the states to acquire property to transfer to the Commonwealth, the provisions still applies because of the Acts intention to avoid the provision of just term. However, where there is an executive agreement between the Commonwealth and States, no such restriction applies (Pye v Renshaw). 3 Lina Terresa Bui

PJ Magennis Pty Ltd v Commonwealth Majority of the High Court held that the War Service Land Settlement Agreements Act was a law with respect to the acquisition of property, but it was invalid because it did not provide just terms The Commonwealth wished to acquire the land on somewhat less than just terms By way of an Appropriation Act the Commonwealth advanced money to the State and stipulated that the States were to pay less than market value for the property The Act approved an agreement made between the Commonwealth and NSW government under which the NSW government was to acquire the land (for distribution to discharged members of the defence forces) This acquisition was valid because it referred to a State law (however, the Act was held invalid because the property was not acquired on just terms)

Trade Practices Commission v Tooth & Co Ltd A provision of the TPA prohibited a corporation which was the lessor of land from refusing to renew a lease of that land for the reason that the lessee was doing business with a competitor of the corporation Held (Barwick, Mason and Aickin JJ) it provided a means whereby the lessee or tenant may acquire an interest in land by requesting a renewal of the existing lease, a request the owner may not lawfully refuse Gibbs J a Commonwealth law providing for acquisition by a person other than the Commonwealth would fall within s 51(xxxi).

Mutual Pools No 2 Here the HC held that the Commonwealth parliament could legislate so as to limit the rights of a manufacturer to recover from the Commonwealth moneys paid by the manufacturer by way of unconstitutional tax The legislation was supported by s 51 (ii) of the Constitution and did not contravene s 51(xxxi) Therefore the HC recognises that certain Commonwealth legislative powers permit interference with property interests independently of the protection guaranteed by s 51(xxxi)

Nintendo Co Ltd v Centronics Systems Pty Ltd Centronics had been making Nintendo chips under loophole in the law copying and burning the chip manufactured and designed by Nintendo Burning from a chip wasnt protected by any copyright or intellectual property etc laws The legislation was giving designers of chips embedding program copyright in them and those who had stock in chips some time to dispose of them before it became illegal. Centronics Systems was caught still owning to sell and keep the chips High Court said there is a genuine dispute about how far intellectual property goes and there is a bona fide attempt to resolve competing claims and not allowing Nintendo to acquire property of Centronics Here the Circuit Layout Act which created a right in the designer of an electronic circuit to restrain the use of that electric circuit by others was not a law for the acquisition of property of those whose use of the circuit was affected by the Act The legislation was a law for the adjustment and regulation of the competing claims, rights and liabilities of the designers or first makers of original circuit layouts and those who benefit from the work, and was therefore beyond the reach of s 51(xxxi)

Must be acquired by someone To be an acquisition, someone must acquire the property right. Thus, merely extinguishing a right does not fall within the ambit of the section. If the right is expressly subject to other rights, there will be no acquisition (Telstra).

RESTRICTION ON USE OF PROPERTY

There will be no acquisition where someone is merely restricted from using their property in a particular way (Waterhouse v Minister for the Arts). In this case, there was held to be no acquisition where a valuable painting was sold in the UK, brought back to Australia, export was prohibited. Could still sell it, but only within Australia at a lower price than would have otherwise. However, where the restriction is such as it sterilises the property, an acquisition may be deemed (Tasmanian Dams Case per Deane J). Similarly in Newcrest Mining, a prohibition was placed over mineral recovery by the extension of a national park. Though the mining grants werent extinguished the court held that there was effective sterilisation of the interest and therefore acquisition. 4 Lina Terresa Bui

TAXES, PENALTIES AND FORFEITURES

The imposition of a penalty or the seizure of property as a sanction for a breach of the law will not be caught by s 51(xxxi) (Re DPP; Ex Parte Lawler). Re DPP; Ex parte Lawler Commonwealth legislation authorising the forfeiture of a ship used for illegal fishing was a law with respect to fisheries in Australian waters was held to be supported by s 51(x) and not an acquisition of property under s 51(xxxi)

Theophanous v Commonwealth Prosecuted for corruption in dealing with migrants visa applications and misusing office of Parliament by charging money for visa upgrades. There are Commonwealth provisions superannuation legislation providing that if convicted of an offence then you forfeit your superannuation earned as a Member of Parliament He forfeited superannuation as well as his wifes Not an acquisition to which s 51(xxxi) applies

The acquisition of an aliens property during war time is not an acquisition under s 51 (Schmidt). However, there may be a duty under common law to compensate for such losses to the extent that the property wasnt in imminent danger of capture during war (R v Burmah Oil).

RESOLUTION OF GENUINE COMPETING CLAIMS

Resolution of genuine competing claims to property are not subject to the provision of just terms (Mutual Pools No 2; Nintendo; Air Services).

AN IMPAIRMENT

For an impairment to amount to an acquisition the impairment must amount to effective sterilization of the right (Newcrest). Furthermore in Mutual Pools it was held that to be acquired someone must get a benefit or advantage.

RETROSPECTIVITY

An acquisition extends to the extinguishment of a vested cause of action where: The extinguishment results in a direct benefit or financial gain; The cause of action is one that arises under common law.

Position is different where the right has no existence apart from statute. Prima facie, a right which has no existence apart from statute is one that, of its nature, is susceptible of modification or extinguishment. A retrospective alteration of entitlements under a statutory scheme which provides benefits from public funds will not amount to an acquisition of property or purposes of s 51 (xxxi). Such statutory entitlements are inherently susceptible to variation (Peverill). However, where the right is of a common law nature, this does not arise (Georgiardis). Georgiadis An ex-employee of Telecom had the opportunity to claim workers compensation or common law damages after his accident The action for common law damages was removed through legislation This amount to an acquisition of property as the Cth gained a direct, measurable financial gain The extinction of a statutory right, where the right involves reciprocal liability on behalf of the Cth, can be an acquisition Court drew a distinction between statutory rights and common law rights holding that the extinguishment of statutory rights would not be an acquisition under s 51(xxxi) statutes always susceptible to alteration.

RECIPROCAL LIABILITY

The extinction of a statutory right or proprietary interest, where the right involves a reciprocal liability on the part of the Commonwealth, is an acquisition of property (Newcrest Mining). Mining leases An extinction of a mining lease on Commonwealth land is an acquisition because the commonwealth gains additional rights (Newcrest). 5 Lina Terresa Bui

However, where the rights are off-shore, the Commonwealth has no property, so the extinction of the mining permit is not acquired by anyone (WMC Resources). Newcrest Mining Newcrest Mining had a mining lease in NT which the Commonwealth cancelled by legislation as a clamp down on uranium mining and exploration in NT The Commonwealth left open in act that compensation would be payable if possible Held the Commonwealth has the overriding ownership of the land the Commonwealth has increased its rights and it has acquired property and has to compensate on just terms

Commonwealth v WMC Ltd Mineral rights under land were compensable because they were a recognised proprietary right, even though granted under statute, but petroleum exploration rights at sea were not compensable because they only existed under statute Extinguishing the rights attached to a permit to explore for petroleum in the Timor Sea effected an acquisition of the property represented by the licence holders interests Black CJ the extinguishment of the rights and of the correlative obligations of the Commonwealth produced identifiable benefits for the Commonwealth The Commonwealth was free to deal with the Timor Sea unencumbered by the licence holder.

PROPERTY
Concept of property has been interpreted broadly and liberally by courts (Bank of NSW v Commonwealth). Property extends to any interest in any property, tangible or intangible and every species of valuable right and interest. (Dalziel). In this case, Starke J @ 209 said that the term includes the following: Real and personal property; Incorporeal hereditaments such as rents and services; Rights of way; Rights of profit or use in land of another; and Choses in action.

In the Bank Nationalisation case, it was held that s 51(xxxi) extends to anomalous interests. Therefore there is no need for a recognisable estate or interest. Cases involving recognised property Some examples of property include: Land (Blakeley) Chattels and fungible goods Any tangible or intangible thing which the law protects under the name of property e.g. licence to use land to run a car park (Dalziel) Innominate or anomalous interests (Bank of NSW v Commonwealth) Choses in action e.g. right of action, at least to enforce common law rights (Georgiadis) Intellectual property rights (Nintendo) Mining leases (Newcrest Mining) however with respect to acquisition which results in such leases that are off-shore are not applicable Statutory rights (Peverill)

Minister of State for the Army v Dalziel The Minister took possession of land of the def. under National Security Regulations The def was a tenant from week to week of the land who had a license to run a car park The legal owner of the property was compensate on just terms but D received no compensation The question to be determined was whether the acquisition of a leasehold interest amounted to an acquisition of property and therefore came within the operation of s.51(xxxi) The High Court held that Commonwealth regulations authorising the Commonwealth government to enter into possession of privately owned land for an indefinite period did constitute an acquisition of property within s 51(xxxi) Property signified any tangible or intangible thing which the law protected under the name of property 6 Lina Terresa Bui

Therefore according to McTiernan J the acquisition of the possession of land is an instance of the acquisition of property Rich J Possession is the most characteristic and essential rights of a right to property (especially where the property is tangible)

Bank of NSW v Commonwealth (The Banking Case) The Banking Act 1947 enabled the Commonwealth Bank (agent for Federal Govt) to acquire the business of all private banks in Australia The Federal Govt contemplated 3 methods to achieve this end The Commonwealth Bank was authorised to buy shares in the private bank The Federal Treasurer given the power to direct that shares in private banks be vested in Commonwealth Gave itself power to nominate new boards of directors to the banks with full power to run the bank Legislation was challenged on a number of grounds, including that the provisions relating to removal of the private bank directors constituted a compulsory acquisition of property on other than just terms Held that this was an acquisition of a proprietary right since a proprietary interest is characterised by the capacity to exercise real and effective control over the property concerned Held to be an acquisition of directors and overseas shareholders innominate interests without just terms

Georgiadis v Australian & Overseas Telecommunications Commission Majority of the High Court held that Commonwealth legislation extinguishing an injured workers common law right to sue his employer (a Commonwealth authority Telecom) for damages effected an acquisition of property The legislation was invalid because it did not provide just terms Position affirmed in Mewett

Health Insurance Commission v Peverill Held that the Commonwealth Parliament could legislate to reduce retrospectively the amount of Medicare benefits payable, under s 20 of the Health Insurance Act, to a pathologist for the provision of medical services The majority of the court regarded the pathologists right of payment of benefits as a form of property, BUT the legislation reducing the pathologists entitlements was not caught by s 51(xxxi) in this case because the right created by the Health Insurance Act was a right inherently susceptible to variation

JUST TERMS
A law for acquisition must be on just terms otherwise it is invalid (Banking Case). IF silent on terms: Where the Commonwealth has inadvertently omitted to spell out just terms, the court may validate the acquisitive law by reading in payment on just terms (Dalziel). It appears that such a term will only be implied where the statute has an intent to pay something, but there are no details as to quantum. IF no intention to pay on just terms: If the Commonwealth manifests an intention not to pay on just terms then it appears that the court will not read in just terms and the law will be invalid (Grace Bros). Grace Bros v Commonwealth As the acquisition was made under a statute, the court upheld the rules of acquisition even though there was a perceived injustice The Lands Acquisition Act states that compensation must be calculated as its market value prior to the date of the announcement of the acquisition In this case the land had increased in price since the notice of the acquisition HELD that the method for assessing the compensation was fair (in the fact that it was standardized and placed in legislation) even though in this case it was unjust to Grace Bros Comes from the idea that the Court will look at the process and the method and the not the result stemming from the acquisition.

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ASSESSMENT OF JUST TERMS

Terms provided should reflect the properties market value and if there is no market, the price that would be agreed on by a willing but not anxious vendor and a willing but not anxious purchaser (Nelungaloo v Commonwealth). The provision of just terms cannot be discounted for benefits to the community, except to the extent that it protects the commonwealth funds from exploitation (Grace Brothers). Despite the discount, the Commonwealth must intend to provide just terms (McGuiness).

PROCEDURE

The assessment of just terms includes rules of natural justice, so the assessing body cannot represent the Commonwealth alone and the measure of justice must be determined by impartial tribunal (Nelungaloo v Commonwealth) The tribunal cannot make an assessment without a hearing and any determinations of the tribunal must be amenable to judicial review (Apple and Pear Board v Tonking). Owner of the property must have an opportunity to be heard (Johnston Fear & Kingham v Commonwealth). Loss of profits may be relevant to justness (Re Fish Steam Laundry). The court has discretion to award interest from date of acquisition to payment as part of the compensation (Australian Apple and Pear Marketing Board v Tonking). Damages and costs do not form part of just terms (Bank of NSW). In some circumstances, the peculiar value of the property must be taken into account in determining just terms (Johnston Fear & Kingham v Commonwealth). Johnston Fear & Kingham v Commonwealth HELD that the compulsory acquisition by the Commonwealth of a three-colour offset press electronic printing machine would require more than the mere payment of the price of the goods because such machines were rare.

FROM ANY STATE OR PERSON

The requirement of just terms applies to natural persons, companies and States. The Commonwealth cannot only acquire from ordinary people and companies it can also compulsorily acquire from the States.

PURPOSE
The acquisition must be for some purpose in respect of which the Parliament has power to make laws. Every law supported by s 51(xxxi) must also be supported by at least one additional legislative power (Magennis). The purpose must be for an active or passive use, and not merely to deprive the current owner of the property. Possibly only valid where acquired for an actual use, not just to deprive current owner (Clunies Ross).

WURRIDJAL v COMMONWEALTH OF AUSTRALIA

Facts The Commonwealth Parliament introduced a package of 5 bills in response to a range of problems in indigenous communities in the Northern Territory. A part of this measure was the grant of 5 year leases over certain land in favor of the commonwealth. The act provided for the provision of compensation where it was required under the constitution. Native Title in the relevant areas would be suspended but not extinguished.

The plaintiffs argued that: The grant of leases to the commonwealth required compensation 8 Lina Terresa Bui

The removal of the permit system removed the right of exclusive possession, requiring compensation

The commonwealth argued that there was no relevant acquisition of property, and in the alternative, that the act provided for just terms. Summary of Reasons Does s 51 (xxxi) limit s 122

Outcome

Acquisition of property

Just terms

Statutory lease was an acquisition, but the permit system was not additional (permit system provided exclusive control but lease diminished this). French CJ allowed Yes Although legislative rights are subject to modification, this is not always the case; here, the property was virtually held in fee simple. The right was not identical to a fee simple, but close enough to be treated as such. Gummow & Hayne JJ allowed Yes Argued that fee simple is regulated, but statutory modification still attracts (xxxi). Thus acquisition.

The legislation had provision for just terms if required. This satisfied the requirement.

Legislation provide just terms. The drafting used was valid. Suggestion that sacred sights may not be able to be compensated with money

Dismissed Virtually the same as G & H. The drafting was valid, but drew the distinction between compensation and just terms suggestion that removal of sights of spiritual significance may be not compensatable by money.

Kirby J

Not necessarily on substance, but wanted full hearing, so didnt allow the demurrer

Their interest was one of property. Yes The 5-year lease did acquire property the schemes intent was to diminish land rights.

Heydon J

allowed

Yes

acquisition of property

Recognised that money may not be sufficient in certain circumstances, but here, the right to visit sacred sites was not removed and there was criminal sanctions for intrusions. Just terms provided. It did not matter that the right was contingent on legal action.

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Crennan J

allowed

Did not decide

The interest, created by statute with rules regulating the rights, was inherently susceptible to change, and was therefore not the acquisition of property

No need to consider

Kieffel J

allowed

Yes (but not quite as clearly as others) 6 justices said yes

Should be treated in the same manner as fee simple It was an acquisition of property.

Defect in pleadings that didnt argue that just terms were not provided, but rather the minister couldnt acquire.

Outcome

Allowed demurrer 6:1

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APPROPRIATIONS

POWER

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RELEVANT HEAD OF POWER

Section 81: All revenues or moneys raised or received by the Executive Government of the Commonwealth shall form one Consolidated Revenue Fund, to be appropriated for the purposes of the Commonwealth in the manner and subject to the charges and liabilities imposed by this Constitution

COMMONWEALTH PURPOSE
The scope of the appropriations power is determined by the meaning of for the purposes of the Commonwealth. Two views have been proposed: Narrow view: legislation may only appropriate money for purposes for which the Commonwealth already has legislative power under the Constitution Wide view: purposes is a decision for the government and Parliament, not for the court and the legislation can appropriate for any purpose.

The appropriations power was initially read down to restrict the commonwealth to appropriate money only within the 4 corners of the constitution (Pharmaceutical Benefits Case). NARROW VIEW FIRST SUGGESTED IN PHARMACEUTICAL BENEFITS CASE Attorney-General (Victoria); Ex rel Dale v Commonwealth (Pharmaceutical Benefits Case) An Act imposed a series of controls on medical practitioners and pharmacists It established a scheme for pharmaceutical benefits and appropriated money for the purposes of the Act, affecting the relationships between doctors and patients, chemists and customers etc Many of the Acts provisions related to public health (it purported to regulate conduct in areas outside the Commonwealth legislative power) The government then appropriated money for the purposes of the Act (which was not actually an Appropriation Act) HELD by the High Court that the Act was invalid Majority (Rich, Starke, Dixon and Williams) adopted a narrow interpretation of the phrase and concluded that a Federal scheme to provide free medicine had to fit within the four corners of the Constitution, that is, it must be supported by an express constitutional power and subject to any express or implied limitations on that power Latham CJ and Dixon J stated that the Act was about more than authorising appropriation and regulated conduct in areas outside the Commonwealths legislative powers it was an Act about public health and the Commonwealth didnt have the power to legislate on public health Power was based on specific legislative powers rather than on s 81, however the powers could support a relatively broad range of appropriations. This includes whatever is incidental to the existence of the Commonwealth as a State and to the exercise of the functions of a national government (i.e. nationhood) Starke J said that the Act was about non-Commonwealth matters Latham CJ and McTiernan J stated that the purposes of the Commonwealth were a matter for the Parliament to determine. Section 81 conferred a general, not a limited power of appropriation of public moneys. It is general in the sense that it is for the Parliament to determine whether or not a particular purpose shall be adopted as a purpose of the Commonwealth

However in the AAP Case, a wide view was adopted which give the commonwealth the power to make appropriate on almost any subject matter. WIDE VIEW OPENED UP IN VICTORIA V COMMONWEALTH Victoria v Commonwealth (AAP Case) The case concerned the validity of an appropriations law which granted about $6m to the Australian Assistance Plan, a welfare scheme to be administered by Regional Councils for Social Development. There was no statutory provision for this plan and existed only as an administrative scheme. The Appropriation Act didnt say much about the purposes for which this money was being appropriated. Victoria argued that s.81 was not a source of a separate spending power and that purposes of the Commonwealth in s.81 were to be limited by reference to the Constitution (challenged the basis of AAP). HELD action should be dismissed (McTiernan, Stephen, Jacobs and Murphy JJ Barwick CJ, Gibbs and Mason JJ. dissenting).

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McTiernan and Murphy JJ. Adopted a wide view of the power and said that purposes of the Commonwealth meant any purpose that the Commonwealth determined so that the Appropriation power was a power to appropriate for any purpose. The executive power enabled the Commonwealth to engage in activities to carry out the purpose. Murphy said s 51(xxxix) allowed a legislative source of the power.

Stephen J. said that the Ps didnt have standing to challenge the legislation. He based this on his idea that an Appropriation Act wouldnt generally be susceptible to legal challenge.

Jacobs J. Assumed the narrow view of s 81 but without deciding. Even on the narrow view, purposes of the Commonwealth was sufficiently wide to cover the scheme. He felt that this scheme could be justified by reference to s.61and the incidental legislative power in s 51(xxxix). He also relied on the inherent nationhood power and offered a broad view of that (said that the Commonwealth could engage in national programs of planning and coordination). He said the validity of an Appropriation Act should be regarded as not justifiable. (He was close to a wide view).

Mason Adopted an intermediate approach and said that s 81 permitted the Commonwealth to appropriate for any purpose (he noted the difficulties of trying to review every Appropriation Act and every item of expenditure for constitutionality powerful argument in favour of the wide view does the HC really want to plough through every item in an Appropriation Act?) He drew a distinction between appropriation and expenditure the Commonwealth can appropriate money for any purpose, but if the Commonwealth wants to spend the money, the Commonwealth cant engage in activities associated with the spending unless those activities are otherwise within Commonwealth power. (One could still satisfy Masons approach if the Commonwealth appropriated money and then gave it to someone else to engage in activities)

Barwick CJ and Gibbs Barwick CJ and Gibbs J adopted a narrow view and felt that the purpose of the Commonwealth had to be determined by examining the particular powers of the Commonwealth. They accepted that you could look at the Commonwealths inherent nationhood power. On that basis the law wasnt one for the purposes of the Commonwealth and you couldnt justify the expenditure of the money.

Summary: Appropriations Act could not be challenged 4:2 Stephen: the pls did not have standing. Whether the spending could be stopped 3:3 with dismissing as standing again.

WIDE VIEW CONFIRMED IN DAVIS V COMMONWEALTH This approach was affirmed in Davis v Commonwealth, where the court held that appropriation acts were generally not justifiable. Davis v Commonwealth (Bicentennial Authority Case) The Commonwealth established the Bicentennial Authority incorporated in ACT with the object to plan and implement celebrations to commemorate the Bicentenary in 1988 of European Settlement The Commonwealth passed the Australian Bicentennial Authority Act payable to authority such moneys appropriated for the purposes of the authority The High Court held that under the Executive power and the Commonwealth power, the Commonwealth had power to establish the authority The court understood that the AAP Case was authority for a wide view of appropriation Mason CJ, Deane and Gaudron JJ the AAP Case stands as an authority for the proposition that an appropriation Act is not ordinarily susceptible to effective legal challenge on basis that it wasnt for purposes of the Commonwealth An appropriation for a valid exercise of the executive power of the Commonwealth is necessarily an appropriation for the purpose of the Commonwealth within the meaning of s 81.

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LEGISLATIVE RESTRICTIONS
An appropriation law may only deal with appropriation; any other law has no effect (s 54). A law dealing with appropriation must originate in the House of Representatives (s 53). The Senate may remit legislation to the lower house, but may not amend the legislation themselves (s 53).

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CORPORATIONS

POWER

EXAM SUMMARY 1. Classify the corporation a) Foreign corporation b) Trading corporation c) Financial corporation 2. Activities test unless it is a shelf company 3. Purpose test where shelf company 4. Does it fall within the scope of the power?
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RELEVANT HEAD OF POWER

s 51 The Parliament shall have power, subject to this Constitution, to make laws for the peace, order and good government of the Cth with respect to: (xx) foreign corporations, and trading or financial corporations formed within the limits of the Cth. The Commonwealth Parliament is conferred with power to make laws with respect to foreign Corporations, and trading or financial Corporations.

TYPE OF CORPORATION
The Commonwealth cannot regulate all or any corporations, only those listed in s 51(xx). The provision refers to three types of corporations which may be formed: foreign, trading and financial.

WHAT IS A CORPORATION?
An association of people who join for particular purposes, such as the conduct of business. Has a distinct legal identity from the individuals who form it, including legal rights and duties under statute and at common law such as the capacity to sue and be sued etc. A corporation is an artificial person recognised by the law it can sue and be sued in its own name, make contracts, hold property etc and has a corporate seal in place of a signature of a natural person.

FOREIGN CORPORATION

A foreign corporation is a corporation formed outside the limits of the Commonwealth that carries on business within the Commonwealth (NSW v The Commonwealth). It includes syndicates, joint ventures formed in countries with different corporations laws (WA Football League). Includes a corporation formed outside Australia that carries on business in Australia (Re Dingjan; Ex Parte Wagner). If the corporation is incorporated outside the Commonwealth, the Commonwealth has power to make laws relating to that Corporation when it is operating within the limits of the Commonwealth.

TRADING CORPORATION

Includes buying and selling, negotiations, bargains, transport for reward and the purchase or sale of money, credit, news or information, tangibles or intangibles. Buying and selling are at the heart of trading (St George Council Case). Current activities test: A corporation comes within the trading aspect of the corporations power if a substantial or sufficiently significant proportion of its activities comprise trading activities (Ex parte Western Australian National Football League).

FINANCIAL CORPORATION

A financial corporation describes a corporation that engages in financial activities, that is, those transactions the subject of which is financial exchange e.g. borrowing, lending or investing money, currency or funds). The activity of borrowing in order to lend at interest are activities that give a financial corporation its character (Re Ku-Ring-Gai Co-Operative Building Society (No 2) (1978) 22 ALR 621) A financial corporation engages in financial activities, such as the buying and selling of money. Financial activities include transactions in which the subject of the transaction is finance (i.e. borrowing or lending money), as distinct from transactions (i.e. purchase or sales of particular goods for money) (Ku-Ring-Gai Cooperative Building Society (No 1)). It is not necessary for a financial corporation to have a profit motive (Ku-Ring-Gai Cooperative Building Society (No 1)).

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Re Ku-Ring-Gai Co-Operative Building Society (No 2) Issue was whether the Trade Practices Act 1974 (Commonwealth) applied to the Ku-Ring-Gai and Dee Why Cooperative Building Societies, which were set up to provide low interest rate loans to their members for housing, but with only the ancillary objective of making a profit from providing this finance. HELD the building societies were financial corporations, even though they were not set up for a profit. Brennan J: Its predominant activity is the activity which it was formed to undertake the borrowing of moneys to lend to its members, the lending of those moneys, the receipt of repayments and the ultimate repayment of the moneys to the source from which they came. These are money dealings. The activities of borrowing in order to lend and lending at interest are financial activities which give to each corporation the character, and place it within the category of a financial corporation.

This was extended in State Superannuation Board v Trade Practices Commission (1982) 150 CLR 282, where financial corporation included a corporation who deals in finance for commercial purposes, whether by way of making loans, entering into hire purchase agreements or providing credit in other forms.. The court held that this activity need not be the predominant activity, but must still be substantial A financial corporation deals in finance for commercial purposes, whether by way of: making loans; entering into hire purchase agreements; or providing credit in other forms and this activity is not undertaken for the purpose of carrying on some other business (State Superannuation Board v Trade Practices Commission).

State Superannuation Board v Trade Practices Commission The State Superannuation Board, which provided superannuation benefits to retired public servants, invested moneys for financial gain and loaned moneys to members. HELD by a majority (Mason, Murphy and Deane JJ) to be a financial corporation. They do no more than describe a corporation which engages in financial activities or perhaps is intended so to do a financial corporation deals in finance for commercial purposes, whether by way of making loans, entering into hire purchase agreements or providing credit in other forms, and this activity is not undertaken for the purpose of carrying on some other business. A corporation which is formed by an employer to provide superannuation benefits for its employees and those of associated employers may nevertheless be a financial corporation if it engages in financial activities in order to provide or augment the superannuation benefits.

CATEGORISING CORPORATIONS
It is not settled as to which test should be applied to determine whether the corporation is a trading or financial corporation. The two competing tests - the purposes and activities tests - were first discussed in R v Trade Practices Tribunal; Ex parte St George County Council. The better view may be that where there are some activities, the activities test is to be applies, but if not, the purpose test should be applied. However, both views will be considered.

PURPOSE TEST

Earlier view was that a corporation was defined by reference to its purposes, rather than its activities (St George County Council). In this case, the court adopted the purposes test and held, by a majority, that St George County Council was not a trading corporation but a public utility supplying goods and services to the public. St George County Council Question was whether provisions of the Federal Trade Practices Act extended to the St George County Council. St George CC was a corporation set up under Pt XXIX of the Local Government Act 1919. Formed to buy and sell electricity in a local government district in NSW, and it also sold electrical appliances, from which it derived profits. LGA provided that the council should endeavour to conduct each trading undertaking in such a way that without any loss being incurred the service, product, or commodity of the undertaking may be supplied to the consumer as cheaply as possible St George CC argued that there were a public service organisation and should not be subject to the Federal TPA. HELD Council was not a trading corporation. 17 Lina Terresa Bui

McTiernan J @ 547 characterised the Councils activities as a municipal trading undertaking and the Council as having a public purpose rather than a private enterprise purpose. Accordingly it was not a trading corp. Menzies J @ 551-3 considered that the character and purpose of the Council was to serve the public interest, and that the Council was properly characterised as a municipal corporation rather than a trading corporation Gibbs J @ 562 emphasised the provisions of the LGA and the intention that councils do not engage in activities for profit and concluded that it was nota s 51(xx) corporation because it was not set up for the purpose of engaging in trading activities Minority (Barwick and Stephen JJ) held it was a trading corporation, having regard to its activities. There was evidence of activities and the money earned from selling and buying.

ACTIVITIES TEST

In subsequent decisions HC has preferred a test which makes reference to the actual activities of the corporation rather than the purposes for which they were incorporated. The activities test examines whether the current activities of the corporation involve trading or finance (Adamsons Case). Character of corporation as trading/financial corporation determined by reference to its objects contained in its memorandum and articles of association. Court will examine the actual activities of a corporation to determine whether it is a s 51(xx) corporation (Adamsons case). Adamsons case Australian Rules football player named Adamson, who alleged that the WA National Football League, the SA National Football League and the West Perth Football Club Incorporated had contravened the TPA by disallowing him from leaving a WA football club to join Norwood, a SA club. In order for the TPA to apply, the WA and SA Leagues would have to be found to be trading corporations within the meaning of the Act and s 51(xx). The object of each of the Leagues and Clubs was to promote football. The Leagues earned substantial income from matches, broadcasting, fees, advertising, membership subscriptions and club patrons. The Leagues also had non-profit objectives including the promotion of the sport of ARF. HELD by majority (Barwick CJ, Mason, Jacobs and Murphy JJ) that the Leagues and Clubs were trading corporations by reference to their activities. Barwick CJ @ 208 said they had substantial trading activities Mason and Jacobs JJ @ 233 stated that it will be a trading corporation when its trading activities form a sufficiently significant proportion of its overall activities. Murphy J @ 239 stated that as long as the trading is no insubstantial, the fact that trading is incidental to other activities does not prevent it being a trading corporation.

IF not a major social or sporting club but local: Mason J in Adamson stated that where the principle activity of a corporation was religion or education and the trading activities are slight and incidental, it cannot be described as a trading corporation. Our facts are more similar to that in Hughes v WA Cricket Association, where a Cricket Club was held not to be a trading corporation. Despite some bar trade, it was quite insubstantial in the context of its overall activities. IF government owned corporation: A corporation which engages in financial activities to facilitate its primary function is still a financial corporation (State Superannuation Board v Trade Practices Commission) it is not necessary to show that trading (or finance) is the corporations dominant or characteristic activity. A corporation which engages in trading or financial does not cease to engage in those functions because they are entered into in the course of or for the purpose of carrying on a primary or dominant undertaking not described by reference to trade (State Superannuation Board v Trade Practices Commission). One case that considered the status of government owned corporations was State Superannuation Board v Trade Practices Commission. In this case, a government corporation that took super contributions and invested them argued that its main activity was not financial. The majority of the Court rejected this and found finance to form a significant part of the overall activities. State Superannuation Board v TPC The SSB, established under the SA and continued in existence by the SA, administered the superannuation fund for Victorian public servants. It engaged in financial activities by way of investing in housing loans, purchasing property, providing commercial finance, and other borrowing and lending activities. 18 Lina Terresa Bui

The purpose of these activities was to provide retirement benefits to the beneficiaries of the fund. The SSB was required to provide the TPC with documents, as part of an inquiry into alleged prohibited practices under s 47(1) of the TPA. The SSB argued it was a statutory instrumentality, not a financial corporation, and its main purpose or dominant activity, was to provide pension benefits; the financial transactions were merely incidental to that purpose. HELD by majority (Mason, Murphy and Deane JJ) that the SSBs financial activities were substantial enough to satisfy its classification as a financial corporation A corporation which is formed by an employer to provide superannuation benefits for its employees and those of associated employers may nevertheless be a financial corporation if it engages in financial activities in order to provide or augment the superannuation benefits. Court acknowledged that some corporations could be characterised as both trading and financial corporations and the two activities were not necessarily exclusive.

Similarly in Tasmanian Dams it was argued that the Hydro-Electric Commission was only a government body that invested money in building dams. The majority held that because power was sold on a very large scale, it was a trading corporation. Tasmanian Dam The Hydro-Electric Authority was given the status of a corporation. It argued that it was not a trading corporation because it was a governmental body, which invests money in building dams. It sold power on a very large scale though it did not constitute a big fraction of all activities. Functions where therefore supplying electricity, building, constructing, operating, maintaining plants and dams. HELD by majority that because it sells power on a very large scale, this makes it a trading corporation. The trading in electricity was a sufficiently significant proportion of overall activities - used the activities test. Fact that it was carried out largely in the public interest did not prevent it from being characterised as trading.

IF university: In Quickenden v OConnor, the University of Western Australia was held to be a trading corporation because at least 28% of the universitys revenue came from trading activities and this pointed to substantial trading activities that formed a significant proportion of the universitys overall activities. IF charitable institutions: In E v Australian Red Cross Society it was held that the Australian Red Cross Society and the New South Wales Division of the Society of the Prince Alfred Hospital were s 51(xx) corporations. However, neither the Red Cross nor the Hospital provided blood transfusions in trade and commerce. HOLDING COMPANIES AND SUBSIDIARIES Mason and Aickin JJ in Actors Equity stated that a subsidiary or the subsidiary of the holding company was beyond the reach of s 51(xx). SHELF CORPORATIONS A shelf company is one that is formally established, but has no current trading activities. Such a legal entity can be regulated as a trading or financial corporation if the purposes for which it was created anticipate trading or financial activities (Fencott v Muller). In this case, majority reserved a purposes test for shelf companies, but retained the activities test for operating companies. Fencott v Muller This case involved a shelf company which had been bought by for the purposes of a transfer of a business. Its objects were widely drawn encompassing trading and financial activities. Replaced a company as trustee of a unit trust and began negotiations with creditors. Alleged breach of s 52(1) TPA during negotiations but company argued it was not a trading or financial corporation and was immune to TPA. All the shelf corporation had done was send a letter in its name, so they argued they did not engage in any trading activities. HELD by majority (Mason, Murphy, Brennan and Deane JJ) that the company had not engaged in trading or financial activities, as per test in WA Football. They applied a supplementary purpose test - this should be done where the corporation has not begun or has barely begun to carry on business. The purpose test can be used where the corporation has not engaged in any activities. Look at memorandums or letter to examine the purposes. 19 Lina Terresa Bui

SCOPE OF THE POWER

DEVELOPMENT OF SCOPE

Early view in Huddart v Parker The early view of the High Court in Huddart Parker in 1909 was that s 51(xx) had a limited scope, and could not be used to regulate intrastate activities of trading or financial corporations. Higgins J construed it narrowly to prevent the Commonwealths accretion of power over a possibly limitless subject matter. Griffith CJ, Barton, Higgins and OConnor JJ applied the State Reserved Powers Doctrine, and concluded that the power to regulate intrastate corps was reserved to the States. Issacs J, in dissent, took a wide view of the section, relying on ordinary principles of construction to find that a law with respect to such a corporation drew the head of power. He expressed the view that s 51(xx) could be used to regulate external and intrastate trade. This finding was held to be inconsistent with the interpretational approach in the subsequent Engineers Case. Accordingly, the High Court in Strickland v Rocla Concrete Pipes overturned Huddart v Parker and held that laws regulating competition fell within s 51(xx) because they regulated trade. This approach directed that A law may be a law with respect to a trading, foreign or financial corporation formed within the limits of the Commonwealth notwithstanding that it affects the corporation in the conduct of its interstate trade. Strickland v Rocla Concrete Pipes Ltd (1971) Provisions in TPA required companies to register with Commonwealth any restrictive trade practice agreements they entered into (e.g. monopoly). Rocla was a party to an RTA re trade within Qld (i.e. intrastate trade). The lower court followed Huddart Parker but the TP Commissioner appealed to the HC TPA substantive provisions applied to persons in general wide application (s35), ie. Not just to trading and financial corps for eg. (applied to restrictive agreements between persons similar to current s45 TPA) clearly too broad to fit within any heads of power restrictions under s 7 were to include those restrictions in interstate or overseas trade and commerce or accepted by a foreign corporation or a trading or financial corporation MAJORITY Barwick CJ said s 35 and s 7 would each be valid independently but not together said they were incompatible Use of include in s 7 sin committed was obvious reliance on a power, but rather using include so that it was meant to apply wherever there was a coverance by power, rather than showing a standard of reading down as suggested by HCA in Pidoto Huddart Parker was tainted by reserved powers doctrine and no longer good law (unanimous in this court). Sections 5 and 8 of the earlier act were valid as they regulated and controlled activities of trading corps which is right at the heart of the power By then earlier law had been appealed Adopts Isaacs Js dissent and suggests that his distinction between internal/external activities may still be alive A law may be a law wrt a trading, foreign or financial corporation formed within the limits of the Cth notwithstanding that it affects the corporation in the conduct of its intrastate trade. Clear from all Js that s 51(xx) would extend to regulate trading activities of trading corps and therefore allow the Cth to regulate financial activities of financial corps. Cth control of foreign corporations is limitless. However here the provisions purported to govern ALL companies, not just trading & foreign companies and therefore provisions ultimately invalid as the court was not willing to read them down, nor sever them Barwick CJ said s 51(xx) allows Cth to regulate trading activities of trading corporations but it also covers a wide range of activities not necessarily limited to trading activities it should not be approached a narrow or pedantic manner HOWEVER It does not follow that any law which includes foreign corps or trading or financial corps formed within the Cth is necessarily a law wrt s 51(xx)

In Actors Equity, laws which protected the trading and financial activities of corporations were held to be valid, although the scope of s 51(xx) was not decided. Gibbs CJ and Wilson J adopted a narrow view, requiring the law to be related to their trading and financial activities. On the other hand, Mason, Aickin and Murphy JJ adopted a wider view and held that s 51(xx) supports laws that directly regulate any of the companys activities.

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Actors and Announcers Equity Association v Fontana Films Section 45D(1) of the TPA penalising acts of trade practices that caused loss or damage to a corporations business. The union demanded the FF to agree to employ only those actors who were members of the union but the FF refused. The union declared that no member would work for the FF and exerted pressure on agents not to supply actors - the company ceased production because it couldnt get actors. FF received an injunction and the union was found to have breached the TPA. They applied to the High Court on the constitutionality of the provision. HELD unanimously that s 51(xx) extends to the regulation and protection of trading activities of trading corporations. The provision was upheld. BROAD view from Mason, Murphy and Aicken JJ was that s 51(xx) supports laws that directly regulate any of the companys activities. The Constitutional grant of power should be construed liberally, not narrowly or pedantically. Power should be read free of unexpressed limitations. The power was intended to confer comprehensive power with respect to the subject matter to ensure all conceivable matters of national concern would be comprehended. NARROW view from Gibbs and Wilson JJ was that the power should be read as limiting the scope of the Commonwealths power to those corporate activities which were directly related to the nature of the corporation in question. Here the law regulates conduct of others, however the conduct is designed to cause substantial loss to the business of a trading corporation and therefore relates to trading activities of a trading corporation.

Similarly, in Tasmania Dams the doctrine was extended to activities done in relation to trading or financial activities. Therefore, the Commonwealth can use the corporations power to pass a law that regulates the activities of constitutional corporations done preliminary to, preparatory to, or for the purposes of later trading activities. The Commonwealth can, at the very least, regulate the trading activities of trading corporations, as well as activities done for the purposes of trade (Tasmania Dams). Commonwealth v Tasmania The World Heritage Properties Conservation Act 1983 (Cth) was enacted to prevent damming of the Franklin River in south-west Tasmania. The Tas HEC intended to build a dam to generate and sell electrical power. Section 10(2) prohibited foreign and trading corporations from conducting certain activities on identified property such as felling or damaging trees, excavating and using explosives, without the consent of the relevant Commonwealth Minister. Section 10(4) prohibited a trading corporation from carrying out those prohibited activities if the activities were done for the purposes of trading activities Issue was whether s 10 was a valid use of s 51(xx). HELD by Mason, Murphy and Deane JJ that all of s 10 was valid, upholding the BROAD view articulated by Mason J in Actors Equity. Section 51(xx) supported laws regulating any activities of trading corporations, including, for example, tree-felling, excavating or other dam-building activities. On this approach, there did not need to be a nexus with trading activities at all, once the law aimed at a constitutional corporation. HELD by Gibbs CJ, Wilson and Dawson JJ that s 10(1) had no connection with the trading activities of trading corporations, adopting the NARROW view. Dawson J @ 316 For a law to be valid with respect to a trading or financial corporation the fact that it is a trading or financial corporation should be significant in the way in which the law relates to it. Mason, Murphy, Deane, Brennan JJ and Gibbs CJ found s 10(4) to be valid, as the corporations power supported a law that regulated the activities of constitutional corporations done preliminary to, preparatory to, or for the purposes of later trading activities. However, Gibbs CJ and Brennan J concluded that s 10(4) was valid for different reasons. They found that the core of the corporations power related to the regulation of the trading activities as a trading corporation. Thus, the Commonwealth could regulate acts done by constitutional corporations for the purposes of trade as an expression of incidental power. So, in their view, s 10(4) was a valid exercise of incidental power under s 51(xx) while the other three justices making the majority on this point found s 10(4) to be within the core power. If s 51(xx) authorised regulation of all of a constitutional corporations activities, it obviously authorised the regulation of activities done for the purposes of trade.

In Re Dingjan the High Court encouraged an approach that addressed the question whether the challenged law has a sufficient connection with s 51(xx). McHugh J stated that the grant of power in s 51(xx) is a plenary one (@ 368) and explained that the Commonwealth law will be within the head of power if it regulates the activities, functions, relationships or business of a corporation. However, the law would be ultra views if it only refers to or operates on corporate behaviour.(@ 369). Mason CJ found that even if the direct legal effect of a law is not upon a corporation, if there is a substantial or sufficient connection with corporations, the law may be within the head of power (@ 334).

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Re Dingjan; Ex parte Wagner Case arose out of timber gathering arrangements involving Tas Pulp and Forest Holdings Ltd, its contractors, Mr and Mrs Wagner, and their subcontractors, Mr and Mrs Dingjan and Mr and Mrs Ryan. Tas Pulp contracted for the harvesting and transport of timber to individual harvest contractors, who performed their obligations partly by their own efforts and partly by subcontracting to owner-drivers. At the relevant time, Mr and Mrs Wagner had entered into subcontracts with Mr and Mrs Dingjan so that they could satisfy their contracts with Tas Pulp. When Tas Pulp altered its practices and requirements the Wagners in turn altered their arrangements with the subcontractors. The union to which Mr Dingjan belonged and other subcontractors then made an application for review of the subcontracts under provisions of the Industrial Relations Act. These provisions authorised the AIRC to review and vary contracts for services which bind an independent contractor and which relate to the performance of work by the independent contractor, other than work for the private and domestic purposes of the other party to the contract. Another provision of the law tied these review provisions back to s 51(xx) by requiring that the contracts relate to the business of a s 51(xx) corporation. The issue was whether the Commonwealth could use s 51(xx) to regulate contracts entered into for the purposes of the business of a trading corporation. Was there sufficient connection between the s 51(xx) corporation (A) and a subcontract entered into by B with C for the supply of services that would ultimately affect the business activities of A? HELD by the majority (Brennan, Dawson, Toohey and McHugh JJ) that the provisions were invalid. Mason CJ (dissenting) o Adopted wide approach to the ambit of the power that he had previously taken in Tas Dams. o The corporations power construed as a plenary power with respect to the categories of corporations mentioned in s 51(xx). o Not confined in its application to the trading activities of trading corporations and the financial activities of financial corporations. o Not limited to the regulation of the functions, activities and relationships of constitutional corporations. o The proposition that the characterisation of a law is to be determined by reference to its direct legal operation according to its terms means that the character of the law is to be ascertained by reference to the nature of the rights, duties and privileges which it creates, changes, abolishes or regulates. o Law that exhibits in its practical operation a substantial or sufficient connection with the relevant head of power is a law with respect to that power. o Relevant provisions allowed the AIRC to exercise its power to review in relation to a contract relating to the business of a constitutional corporation. o On these facts, a practical relationship existed between the subcontract and a s 51(xx) corporation, and this was sufficient to satisfy the requirement of connection. Brennan J (majority) o Section 51(xx) is expressed as a power with respect to persons. o Not enough that the law applies to constitutional corporations and to other persons indifferently. o Law must discriminate between constitutional corporations and other persons, either by reference to the persons on whom it confers rights or privileges or imposes duties or liabilities or by reference to the persons whom it affects by its operation. o A law conferring power to vary or set aside a contract between a constitutional corporation and an independent contractor for work to be done for the purposes of the corporations business where the contract is unfair or harsh or contrary to the public interest would be a law supported by s 51(xx). o Connection in circumstances was fortuitous and adventitious, therefore insufficient Dawson J (majority) o Phrase trading or financial corporation understood as composite expression embracing both corporate nature of entity as well as its trading or financial character. o For law to be valid, fact that it is trading or financial corporation should be significant in way in which law relates to it. o Commonwealth provisions invalid because they regulated contracts, including contracts that may not be connected to s 51(xx) corporations in any way relevant to their character. Toohey J (majority) o Section 51(xx) is plenary power, construed with all the generality which the words used admit. o Test of characterisation: whether there is sufficient connection between law and subject matter to be able to say that the law is one with respect to that subject matter. o Connection must be substantial, not merely tenuous. o Law must operated on rights, duties, powers or privileges of corporations in such a way as to evidence sufficient connection between law and corporations. o Not enough to identify corporations as reference point o Contract might have only the most indirect effect on corporation or none at all, therefore invalid. Gaudron J (dissenting) 22 Lina Terresa Bui

o o

Section 51(xx) is plenary power, construed according to its terms, not by reference to unnecessary implications and limitations. Law expressed to operate on or by reference to the business functions, activities or relationships of constitutional corporations is law with respect to those corporations.

Current test The High Court in the Workchoices case concluded that the wide view of s 51(xx) was correct and rearticulated the broad view, now better described as the object of command approach. With the exception of Kirby J, the Court adopted similar reasoning to the dissenting judgment of Gaudron J in Re Dingjan, holding that s 51(xx) must be construed without regard to notions of federal balance. Laws that affect the rights and obligations of corporations therefore fall within s 51(xx) (Workchoices Case). New South Wales v Commonwealth (Workchoices Case) Commonwealth sought to regulate employment contracts and conditions through the use of the corporations power. Traditionally, these types of arrangements were regulated using the industrial disputes power in s 51(xxxv), which has limited scope. The Workplace Relations Amendment Act amended the Workplace Relations Act. The object of the amending Act was to secure an immediate extension of federal coverage of workplace relations in Australia to 85% of Australian employees. In its national application to corporations and their employees, the new laws established minimum entitlements of employment regulating matters such as basic rates of pay and casual loadings, maximum ordinary hours of work, annual leave, personal leave, parental leave and related entitlements. The Act excluded the state industrial relations laws, and made their long-established regulatory systems largely redundant. The issue was whether this use of the corporations power was valid. HELD by the majority (Gleeson CJ and Gummow, Hayne, Heydon and Crennan JJ) that laws prescribing the industrial rights and obligations of constitutional corporations and their employees and the means by which they are to conduct their industrial relations are laws with respect to constitutional corporations. Therefore, the legislation was constitutionally valid and the powers were within the corporations power.

INCIDENTAL SCOPE
Section 45D of the TPA was challenged - it made trade unions vicariously liable for the actions of its members and officers where those actions constituted a secondary boycott. Liability could be avoided only if the trade union could prove that it had taken all reasonable measures to prevent its member or members from engaging in such conduct. Issue was whether such a law was within the incidental scope of the corporations power. There were divergent views on the incidental scope

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DEFENCE

POWER
EXAM SUMMARY 1. Determine what the subject matter that the Commonwealth is attempting to legislate for. 2. What are the circumstances in which it is enacted? 3. Does it fall within the primary or secondary aspect of the defence power? a) Profound peace does not permit Commonwealth to engage in commerce (Shipping Board case) b) Uneasy peace compare and contrast Clothing Factory and Shipping Board cases. Is the activity subsidiary to the main purpose? Was the same equipment used? c) War preparedness certain economic and social controls are allowed. Are there objective criteria? Compare and contrast ACP and Capital Issues cases. d) War time must be required for the efficient prosecution of war time. Price and employment control Regulation industrial conditions Rent control Power to detain where threat e) Post war reasonable period to facilitate transition to peace (R v Foster)
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RELEVANT PROVISION
51. The Parliament shall, subject to this Constitution, have power to make laws for the peace, order, and good government of the Commonwealth with respect to: (vi) The naval and military defence of the Commonwealth and of the several States, and the control of the forces to execute and maintain the laws of the Commonwealth.

OTHER RELEVANT PROVISIONS

Power s 51(32) s 68 & s 69 Application gives the commonwealth control of railways for military purposes set out that the Governor-General is vested with formal command of the armed forces prohibits the States from raising their own armies unless the consent of the Commonwealth is obtained protects the states from domestic violence executive power combined with s 51(39) express incidental power

s 114

s 119 s 61

BACKGROUNG AND APPLICATION

The defence power is not exclusive to the Commonwealth (Carter v Egg & Egg Pump Marketing Board). The States may assist and engaged in efforts that would be categorised under the defence power.

DEFENCE PURPOSE
The defence power is a purposive power, meaning that the law must be for a defence purpose or need (Stenhouse v Coleman). Due to the purposive nature of the defence power, the permissible subject matter is not constant, and depends on the factual circumstances, both domestic and international (Stenhouse v Coleman). Judicial notice There are some limitations upon the material which a court can receive or take into account. Ordinarily the court does not go beyond matters of which it may take judicial notice, unless law is conditional upon existence of some fact, which may be difficult or impossible to prove (Stenhouse per Dixon J). Fullagar in Australian Communist Party suggested that there was a two step approach: 1. 2. The first stage is to take judicial notice of some basic fact (such as war) by reference to which the power can operate Secondly, then inquire whether the law in question is a measure directed towards dealing with the defence need or situation.

Whether judicial notice is relied on at that stage will depend on the circumstances of each particular case, there are some instances where the court will allow evidence to be adduced.

PURPOSE WHICH WOULD JUSTIFY THE LAW?

Section 51(vi) authorises any activity if sufficiently connection with the purpose of defence if it can reasonably be considered that there is a real connection between the subject matter of legislation and defence (Dawson v Commonwealth).

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Stenhouse v Coleman A national security Act had been made to regulate some regulations for WWII. A minister could regulate supplies and services of an essential kind. One regulation was that a baker needed a license to bake and supply bread. Mrs. Stenhouse was baking bread without a licence. Mrs. Stenhouse was baking bread without a license- the issuing of licences for essential products during war was incidental to the running of the war. The court upheld this provision because you have to look towards the purpose of the Act w.r.t defence or war. HELD that the court will look at the instrument in question the facts to which it applied and the circumstances which called it forth.

PRIMARY ASPECT
The primary aspect of the power deals with matters that are directly connected or concerned with defence and the defence forces. Laws which are directly related to defence are always within the scope of s 51(vi) (ACP v Commonwealth). It would include the following: enlisting and training of soldiers, training and equipment of men and women in navy, army, air force the provisions of ships and munitions manufacture of weapons erection of fortifications

It also extends to incidental matters such as the prevention of activities which might obstruct defence preparations. Generally, however, in peace time the primary aspect doesnt extend to the facets of national life.

SECONDARY ASPECT
The secondary aspect of the power concerns topics which support a defence effort in a general sense. This covers laws to control and marshal the countries resources and commodities. Laws which deal with secondary aspects of the power, that is economic and social regulation, may be valid depending on the defence situation at the time passed (ACP v Commonwealth).

PROFOUND PEACE

Profound peace is characterised by the absence of tensions. Everyone is happy, there is amity in the international community, there are no immediate problems threatening Australias safety and there are no conflicts or potential conflicts. The secondary aspects of the power are the narrowest at this time. Shipping Board case (compare with Clothing Factory case below) In Commonwealth v Australian Shipping Board, the court held that in profound peace, the defence power did not permit the Commonwealth to engage in commerce. In this case, the HC held that the provision of a contract for the supply of turboalternators was wholly unconnected with any purpose of naval or military defence. Commonwealth v Australian Commonwealth Shipping Board Period of profound peace before the rise of Nazism in Germany and before Japanese Militarist expansion Aftermath of WW1, therefore not prepared to engage in another war anytime soon The Sydney Municipal Council called for tenders to erect and maintain some turbo alternators for its powerhouse A number of terms tendered and the Australian Commonwealth Shipping Board won the tender The Board was established under statute the statute gave the board the power to engage in the business of manufacturer, engineer, dock owner, ship builder and repairer for the Commonwealth and any other business incidental to that The unsuccessful tenders challenged the power of this Shipping Board to engage in this commercial work HELD by the High Court that the Board was not authorised by its statute to enter into these sorts of contracts (outside of its power) 27 Lina Terresa Bui

As extensive as the defence power was, it did not authorise the establishment of businesses for the purpose of trade and wholly unconnected with any purpose of naval or military defence An argument was raised that it was necessary for this Board to have these orders so that it could keep operating Court said that despite the practical difficulties facing the Commonwealth in maintaining its stockyards, the defence power did not warrant these activities in the ordinary conditions of peace, whatever might be the position in times of war

UNEASY PEACE

Uneasy peace is characterized by some international tension, but something falling short of anything in the nature of war-like hostilities. The secondary power in s 51(vi) during times of uneasy peace is slightly wider. Clothing Factory case In the Clothing Factory case, the Commonwealths clothing factory used to manufacture naval and military equipment and uniforms engaged in trade during peace time. The Court upheld these actions as valid, distinguishing the Shipping Board Case, on a number of issues, but primarily that the climate was not as peaceful. The following factors also influenced the Courts decision: Exactly the same equipment was used to trade as for military production; A more detailed defence was put forward that stated that the reason for trading was to maintain efficient and trained staff; The commercial supply was subsidiary to the main purpose of keeping the factory in a prepared state.

A-G for Vic v. Commonwealth (the Clothing Factory Case) (1935) In 1935 there were issues of fascism in Europe and militarism in the Orient (Japan). The Commonwealth Clothing Factory was authorised under the Defence Act to manufacture military uniforms and it also made clothing for public departments Some disappointed clothing contractors made the A-G challenge the validity of the clothing factory engaging in outside orders The factory provided detailed factual evidence as to how the factory was running in the defence concern However, in this situation, the non-defence orders were a comparatively small part of the total output and no extra machinery was required. HELD that there was a direct connection with the defence power as it allowed for defence preparedness Continuing the employment of specially trained staff could well be considered necessary for defence matters and the outside orders were considered as incidence in for the maintenance for war purposes of an essential part of the munitions branch of the defence arm The purpose of navel and military defence was pressed upon the factory from its commencement Rich J - The supply to outsiders was a minor character and subsidiary to the main purpose of keeping the factory in going order, there was no inversion of the main purpose because of the incidental matter Some criticism that you cant distinguish between these two cases Power has an expanded operation in this uneasy peace and the Commonwealth also put up a fight unlike the previous case in 1926.

WAR PREPAREDNESS

War preparedness is characterised by the significant deterioration of relationships where nations are getting ready for war-like hostilities. Under this state, certain economic and social controls are allowed. ACP v Commonwealth In ACP v Commonwealth, a law which allowed the Commonwealth to seize the property of the ACP and declare bodies and persons as unlawful in times of war preparedness was held to be invalid. The following factors influenced the Courts decision: There was attempt by legislature to exercise judicial roles Defence power is purposive and there is a requirement for some objective criteria that could connect the Act with defence needs there was no objective criteria in this case The Act was a drastic invasion of civil liberties. 28 Lina Terresa Bui

ACP v Commonwealth Facts Attempt to outlaw the communist party of Australia Communist party Dissolution Act- Cold War was in development and the communist party had taken over China Menzies Govt decided that the CP needed to go Claimed that the communist party could endanger Australia as a nation Declared that the communist party had a revolutionary and violent nature, asserted its connection with the world wide communist movement Declared the party unlawful and dissolved it and forfeited its property In regard to other related associations they became unlawful if the G-G said that they were unlawful. The G-G could form an opinion that an association was sympathetic to the party and would dissolve the association and its property forfeited (they had 28 days to appeal) A person could be labelled someone who was prejudicial to the security of Australia and you couldnt hold office of Cth or an industrial occupation (most blue collar occupations were covered) The Act reversed the onus of proof making someone prove that they werent communists (issues with civil liabilities)

Outcome Dixon, McTiernan, Williams, Fullgar and Kitto JJ 1. The Act was NOT shown to be a law for the defence of the Cth in the peace time context of the Act There was a suggestion by the Court that a law like this could be valid during war-time. (Dixon J) Draw authority over an immense field and most due to very nature ample discretion of war and organising resources, controlling economy

2.

The validity of the Act did not depend on the allegation in the preamble The legislation in question purported to assign its connection with the defence power to what the Parl said in the preamble and also as to the opinion of the Executive. There was a Legislative and Executive usurpation of the judicial role. Judicial disgust at Cth trying to write itself into power

3.

Neither the legislatures preamble or the G-Gs opinion barred the HC from inquiring into the constitutionality of the legislatures and G-Gs actions Fundamental ground for invalidity - you had here a legislative and executive trying to take over the role of the court because the legislation purported to establish the connection with defence by the preamble and the opinion of the executive and the court reiterated that there is right of judicial review. Fullagar J said that the validity of a law does not depend on the opinion of the law-maker or the person who is to do the Act. It was felt that parliament and the legislature couldnt recite themselves into an area of power, the court always had the discretion to decide whether there was a defence need or purpose.

4.

If the Act had prohibited conduct then the Ct could look at that and see whether there was a defence purpose or need involved. But the Ct held that here, there was a law that didnt penalise conduct, it penalised affiliation and belief (the mere fact that a person was a member of the Communist Party). The majority of the Ct held that there must be objective criteria by which the Ct could connect the law to a defence need. Kitto J - felt the law could not be justified at any time. In times short of war-time, the Ct felt that objective criteria were needed, with which you could test the application of the power. Dixon J - if the act had forbidden a particular course of conduct or of facts so that you could see a connection between the law and defence then the act would be valid Secondary power - extends to many things not regulated in normal conditions Decision based on the defence power and judicial review but also had undercurrents of civil liabilities and rule of law You have Govt under the constitution and the rule of law underlined the constitution and it would be impossible to say that a law of this particular character that it conformed to the rule and this is an affront to the rule of law as it has no objective criteria as to the use of the power Latham CJ - dissented he said it was valid because the provisions were matters that should be left to the opinion of the parliament and the executive

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Marcus Clark & Co Ltd v Commonwealth (Capital Issues case) In Marcus Clarke & Co v Commonwealth (Capital Issues Case), the court held that the Treasurer could validly refuse consent for a company to raise loans and share capital. A decisive factor in this case was that free capital raisings could potentially crowd-out government capital raisings to fund the war. Marcus Clark & Co. Ltd v. Commonwealth (The Capital Issues Case) (1952) About the time of a fear of another World War In 1951 they enacted a Defence Preparedness Act that had a preamble like the Communist party case Regulations consent of the Commonwealth treasurer was needed for the granting of loans and shares for businesses Marcus Clark was a retailer and required funds for remodelling its stores and factories and had to pay its employees, so it proposed to borrow money and to raise capital by a share issue. But, the consent of the Treasurer was refused. It was challenged before the HC The court UPHELD the validity of the Act in a time of tension The Court took Judicial notice that there was an international emergency and that there was high inflation and the difficulty of the Commonwealth in embarking on increased defence expenditure in comp with private expenditure In this case there was a connection to the defence preparedness of Australia, on the application of the objective test The recitals in the present Act were different from those in the Communist Party case, because they only amounted to a statement of the purposes within which the Act was to operate rather than being an attempt by the Legislature to itself determine that its law was within power. There were requirements in the regulations for the treasurer to state his grounds for denying consent, this allowed the court to examine the reasons of the refusal In periods of marked international tension falling short of war the Commonwealth can validly enact legislature that brings about significant economic controls.

WAR TIME

During war time, the defence power is at its widest and the secondary aspect can extend to everyday life. The law will be within the defence power where the measure is required for the efficient prosecution of the war effort (Farey v Burvett). The power has previously extended to: Price control e.g. regulations fixing the price of bread (Farey v Burvett), legislation controlling the prices of goods sold in Australia during WWII (Price Regulation case) and Commonwealth regulation of prices of goods in Australia (Vic Chamber of Manu v Commonwealth). Employment control e.g. Commonwealth general labour employment controls (Reid v Sinderverry) and employment of women (Womens Employment case). Regulation of industrial conditions Giving a minister power to detain any person perceived as a threat to Commonwealth defence (Lloyd v Wallach). Rent control for domestic housing (Silk Bros v State Electricity Com Vic).

Farey v Burvett (1916) Concerned War Precautions regulations which authorised the making of a price fixing order which prescribed a maximum price of bread. This was a measure that could conduce to the successful prosecution of the war and the defeat of the enemy, and the defence power extends to economic powers to help the war effort Griffith CJ noted that such laws (with regard to the control of basic foodstuffs) had always been common war measures and there could be infinitely various means for securing efficiency in war In times of dire defence and emergency s 51(vi) could overcome other provisions in the constitution Isaacs J However, the broad view is normally taken so that the power is subject to the prohibitions in the constitution

SA v Commonwealth (1st Uniform Tax Case) (1942) Commonwealth took over the monies from income tax Power was at its greatest Power was a War time arrangements acts- it transferred state offices and records used for income tax to the Commonwealth Rich J McTiernan J and Williams J- in majority Dissenting Latham and Stark JJ 30 Lina Terresa Bui

However the egg couldnt be unscrambled i.e. any provisions passed in wartime as a valid exercise of the defence power could not be challenged later on the basis that at that time, they would not be justified by s 51(vi).

LIMITS The power in s 51(vi) during war time is not unlimited. For example, in Adelaide Co of Jehovahs Witnesses v Commonwealth (1943), laws that allowed the seizure of property on premises of declared bodies and the prohibition of any doctrine advocated by those bodies, were held to be invalid. The court held that the laws were not sufficiently related to defence and went beyond what was required for the defence of the country. As such, it appears there is some test, on similar grounds to the reasonably appropriate and adapted test that might apply to the defence power. Adelaide Company of Jehovahs Witnesses Inc v Commonwealth (1943) National security subversive organization regulations during WW2 which aimed at outlawing subversive bodies prejudicial to the war effort. 2 regulations were being challenged One regulation permitted the Commonwealth to occupy the premises of a declared organisation if property of the organisation remained on the premises. Another regulation prohibited the publication of unlawful doctrines and they were defined to include any doctrine advocated by declared bodies. HELD there was no sufficient relationship between these regulationss and defence. With regard to the first regulation, the Ct said that the criterion for occupying the premises was the mere presence of property, it didnt matter whether the use of the property was lawful or unlawful as to the second regulation, the Ct said that the criterion for illegality was merely that the doctrines were advocated by declared body, it didnt depend on the content of the doctrines, or whether the doctrines were indeed prejudicial to the war effort. Latham CJ said that the ten commandments would fall w/i the scope of unlawful doctrines (he pointed this out as a problem the law was too widely cast), that the law didnt have a sufficient relationship with a defence need or purpose. (The Ct upheld all sorts of economic and social regulations - price controls, controls of industrial conditions, restrictions on Christmas advertising, controls of the sale of land, shares, rent, housing, motor carsalso the fixing of drinking hours).

IF limitation on number of students admitted to University: In R v University of Sydney; Ex parte Drummond it was held that controls on the number of students who could be admitted to University were invalid as they had no relationship to defence.

POST WAR TRANSITION

In the period following a war, the defence power will be wider than that in a period of profound peace, and maybe even uneasy peace. War-time controls may remain in place for reasonable periods after the end of hostilities to facilitate the transition to peace (R v Foster; Ex parte Rural Bank of NSW). In R v Foster, the court held laws regulating the employment of women, petrol rationing and occupancy of premises invalid 3 years after the end of the war. The power does not extend to everything affected by the war, but areas particularly relevant to defence such as repatriation, veterans benefits and rebuilding of damaged cities are within the power. R v Foster; Ex parte Rural Bank of NSW An attempt by the Commonwealth to continue certain wartime regulations, three years after the war Womens employment regulations, liquid fuel regulations (petrol rationing) and certain moratorium regulations (to protect the rights of service personnel) HELD that these measures could no longer be recognised were invalid for going what was beyond proper at that point in time Some post-war regulations could be necessary as incidental to the wartime The court also noted that the effects of WW2 would continue for centuries and the mere fact that there had been a law doesnt mean the Commonwealth can legislate with respect to anything that may have been in some way affected by

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war but the Parliament could legislate to continue some war-time controls and it may be that some matters that were profoundly affected by the war could perhaps be subject to some limited Commonwealth legislation In particular, the HC was prepared to accept that after a war, the Commonwealth could maintain its system of benefits for ex-service personnel

Illawarra District County Council v Wickham Concerned the validity of legislation enacted in 1945 gave preference to ex-serviceman in employment Legislation extended to apply 13 years after the war Ex-serviceman attempted to rely on preference when someone else had been employed by the council HELD the connection between regulation and defence power was too remote to be justified by s51(6) Could be originally justified (i.e. closer to the war date) with force of time it eventually became insufficient Crown could be provided on a continuing basis for benefits and sufficient entitlements of ex-service personnel - out of own revenues and resources General law that affected the civil rights of others in reference to employment and from the rights of employers.

Dawson v The Commonwealth Act allowed Commonwealth controls on transfer of land The demands of the recent war had required a coordinated and systematic series of measures which must reshape the economy of the country, and that the reversion to a peacetime economy required further leg measures which the defence power was sufficient to authorise. The power must, by consequence, also extend to sustaining for some reasonable internal of time the laws and regulations in force at the end of hostilities so as to enable the lag to proceed with the task. (Dixon J).

LIMITS ON DEFENCE POWER

As the defence power in s 51(vi) is subject to the Constitution, the express and implied Constitutional limits will apply: Section 92 - freedom of interstate trade Section 51(xxxi) - acquisition on just terms

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33 Lina Terresa Bui

DISCRIMINATION

ON BASIS OF

RESIDENCE
OUT OF STATE

EXAM SUMMARY 1. Is the person a subject of the Queen? 2. Is the person a resident? 3. Does it fall within the scope of s 117? Test in Street from Stephen J Does a State law subject the complainant, resident in another State, to a disability or disadvantage compared to hypothetical or notional person who is identical in all respects to the complainant except that s/he resides in the first State? 4. Do any of the limitations apply? Residence requirements for voting State social welfare
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RELEVANT PROVISION
s 117 provides that A subject of the Queen, resident in any State, shall not be subject in any other State to any disability or discrimination which would not be equally applicable to him if he were a subject of the Queen resident in such other State.

APPLICATION
Section 117 guarantees freedom from discrimination that is based upon ones residence in another state, and confers immunity from state laws imposing a disability or discriminatory treatment on interstate residents when compared to in-state residents. In other words, State laws cannot subject an Australian citizen who resides in another state to a disability or discrimination that are not equally applicable to residence of their own state. It applies to Commonwealth and State laws, but there have been no cases concerning Commonwealth Laws. What it does not do: It does not apply to corporations (Ceil Comfort Insulation v ARM Equipment Finance). It is not a general prohibition on discrimination It does not prevent discrimination between people living in major cities or rural areas It des not prevent discrimination on the basis of former residence in another state (Lee Fay).

STATE THE ISSUE

The issue that arises on our facts is whether [relevant section or provision] is in breach of s 117 which states that no subject of the queen in any state shall be subject to any disability or discrimination, which would not apply if he were a resident in such other state.

SUBJECT OF THE QUEEN

The phrase subject of the queen has been held in Nolan v MIEA to mean subject of the Queen in right of Australia - this would include an Australian citizen. In Street, it was left open by Toohey and Brennan JJ in Street as to whether the section could apply to aliens.

RESIDENT OF A STATE
Residency may be long-term or short-term (Davies and Jones). In Commissioner of Taxation v Parks, a law that imposed differential tax rates applied to a sailor who merely had a home base in another state. Therefore, a sailor who merely has a home base in NSW was allowed to challenge a Queensland law on the basis that it discriminated him as a NSW resident (Commission of Taxation v Parks). Davies and Jones v WA The court here decided that the Administration Act (WA) did not offend s 117, although the section discriminated between a person who was a resident of and domiciled in another State and a person who was in fact a resident of and domiciled in WA. Barton J said that s 117 aimed at discrimination on the sole ground of residence outside the legislating state, and none of the justices conceded that domicile was a concept which incorporated the concept of residence.

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SCOPE OF SECTION 117

The narrow interpretation of s 117 adopted in cases including Davies and Henry v Boehm was overturned in 1989 by Street v Queensland Bar Association. In Street, the relevant test was stated: does a state law subject the complainant, resident in another State, to a disability or disadvantage compared to a hypothetical or notional person who is identical in all respects to the complainant except that (s)he resides in the first state? The Court must examine the practical effect of the impugned legislation. Street v Qld Bar Association Street, a resident of NSW applied for admission to the Qld Bar The Qld Bar Rules, which were authorised by Qld Law, required that persons applying for membership of the Bar had to be residents of Qld for a period of 1 year or they must practice principally in Qld This would have required Street to give up his practice in NSW He challenged the constitutional validity of the Rules on the basis that it subjected him to a disability or discrimination contrary to s 117 All judges agreed that s 117 would have to be subject to some exceptions (e.g. residence requirements for voting and to qualify for State social welfare) Different formulations (reasons) ranging from necessary implication to appropriate and adapted. Mason CJ o A State would have to show that it had a compelling justification and that to disallow the discrimination would threaten its autonomy. Deane J o Discrimination would be allowed only if it flowed naturally from the Constitution of the State or the nature of the particular subject matter of the law. Dawson J o Would allow discriminations the basis of which isthe ordinary and proper administration of the affairs of the State Toohey J o Laws would be allowed, if the difference is a natural consequence of legislation aimed at protecting the legitimate interests of the State community Gaudron J o Would allow different treatment if it is reasonably capable of being seen as appropriate and adapted to a relevant difference McHugh J o Allowed that some exceptions must arise by necessary implication from the assumptions and structure of the Const and that the question is whether, by necessary implication, the matter is so exclusively the concern of the State and its people that an interstate resident is not entitled to equality of treatment in respect of it Brennan J o Held that any exception of necessity (i.e. necessary implication) should be narrowly confined but also held that a State could impose conditions on the grant of a benefit or the avoidance of a burden if the condition has a rational and proportionate connection with some legislative objective

In Goryl v Greyhound Australia, s 117 was held to have been breached where a Queensland Act purported to apply NSW law to NSW residents who were victims of motor vehicle accidents, while applying the Queensland common law to Queensland victims. Goryl v Greyhound Australia Pty Ltd The HC applied s.117 to override s.20 of the Motor Vehicles Insurance Act 1936 (Qld), which restricted recovery of damages for MV injuries sustained by a NSW resident to a lesser rate than if she were resident in Qld. McHugh J claimed that it was only necessary implication that could support exception. Others didnt discuss test but none thought that the limit on NSW residents damages was justified.

In Sweedman v Transport Accident Commission, s 117 was held not to have been breached where the Victorian act allowed The Transport Accident Commission to sue the driver of the car registered in another state. It was held that it was quite likely that some NSW residents would have a car registered in Vic. In Re Loubie, Dowsett J held that the reverse onus of proof required when a NSW resident sought bail, was a breach of s 117.

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In Ceil Comfort Insulation v ARM Equipment Finance, it was held that a rule allowing the Court to order the plaintiff to give security for the defendants costs if the plaintiff does not reside in the state, breaches s 117.

LIMITATIONS
In Street, the Court unanimously held that the prohibition was not absolute, and it not extend to residence requirements for voting and to qualify for State social welfare. Mason CJ suggested that a state would have to show a compelling justification and to disallow the discrimination would threaten its autonomy. Deane J suggested that if the discrimination flowed naturally from the constitution or the subject matter of the law than this would be an exception. McHugh J suggested a similar exception. Brennan J held an exception of necessity of narrow construction while Gaudron J thought that if the law was reasonably capable of being seen as appropriate and adapted for a relevant difference it would be ok. However, the test for determining the limitations of s 117 was not clear. It ranged from necessary implication to appropriate and adapted. In Gorgyl v Greyhound Australia, McHugh suggested that appropriate and adapted test was too weak. This would mean that the applicable test should by that of necessary implication. However, in Sweedman v Transport Accident Commission, the court referred to the exception in terms of the appropriate and adapted test and proportionality.

EFFECT OF BREACH
Strictly speaking, a law that breaches s 117 is not invalid, it is merely pro tanto inoperative.

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EXTERNAL AFFAIRS POWER

EXAM SUMMARY 1. Does it fall within the treaty aspect? Can the Parliament enact the Act? Scope of the power Do any of the limits apply? 2. Does it fall within the non-treaty aspect? Does it concern a person, thing or circumstance internal to Australia? Or does it concern a person, thing or circumstance external to Australia? Customary international law Recommendation of international bodies Matters of international concern
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RELEVANT HEAD OF POWER

51. The Parliament shall, subject to this Constitution, have power to make laws for the peace, order and good government of the Commonwealth with respect to: (xxix) external affairs.

INTRODUCTION
The Commonwealth Parliament is conferred with power to make laws with respect to external affairs in s 51(xxix). It has a number of aspects: power to implement international treaties and conventions, power over external matters, power over relations with other nations and possibly the power to legislate over matters of general international concern.

TREATY IMPLEMENTATION ASPECT

Treaties are agreements between or among states governed by international law, imposing obligations under international law. They require nation states to undertake certain obligations under international law. Here, the [relevant provision or section] is seeking to ratify the [treaty] so it is necessary the treaty implementation aspect of s 51(xxix). Thos aspect of the external affairs power allows the Commonwealth to alter federal laws in a manner that would be beyond power, or ultra vires, were the Parliament to seek to use any other head of power granter under the Constitution. The existence of a treaty is sufficient to put subject matter within s 51(xxix), no need for the subject to be one of international concern (Tasmania Dams). The legislation will reasonably conform to the treaty if it is reasonably appropriate and adapted to implementing the treaty (Tasmanian Dam).

ENTRY INTO A TREATY

The treaty here was entered into by the Australian executive. The power to enter into treaties lies solely with the Commonwealth executive through the prerogative powers under ss 2 and 61 of the constitution. The capacity to negotiate and accede to international agreements is unlimited (Tasmanian Dam). The Commonwealth may enter into a treat on any subject matter. The Commonwealth has international personality and the States are not recognised with international personality (R v Burgess; Ex parte Henry). States can, however, enter into contractual obligations. Entry into a treat may occur through 3 ways: 1. 2. 3. Signature - the country has authenticated the text, but did not agree Accession - consent without having signed the treaty Ratification - consent and signing

EFFECT OF TREAT ON DOMESTIC LAW

A treaty will not form part of Australian domestic law until it has been implemented in a valid federal law (Walker v Baird). Treaty ratification does not introduce the terms of that treaty into the laws of Australia. International obligation assumed by Australia cannot displace or override any domestic legislation which may be inconsistent with the obligation (Koowarta v BjelkePeterson). However, indirect effects may be seen through: Interpretation of statutes to comply with international law (Polites v Cth) Interpretation & development of common law (Mabo (No 2)) Creation of legitimate expectation in admin law (MIEA v Teoh).

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CAN PARLIAMENT ENACT THE TREATY?

SCOPE OF THE POWER

Whether or not a treaty can be implemented has been subject to two views, these being the narrow and wide view. The differing views immerged in R v Burgess. The scope of the views are: Narrow Only treaties of international subject-matter or significance can be implemented Broad Any bona fide treaty, irrespective of subject-matter can be implemented

NARROW VIEW The narrow view was first formulated in R v Burgess by the minority Dixon and Starke JJ. Under the narrow view, only treaties of international subject matter or significance can be implemented. Dixon J held that it would have to be some matter indisputably international in character while Starke said that it would have to be of sufficient international significance. Barwick CJ in Airlines of NSW v NSW (No 2) subsequently rejected the wide view in support of a more narrow view. In Koowarta v Bjelke-Peterson, Gibbs, Wilson and Dawson JJ held that a treaty would only fall within the scope of s 51(xxix) if it was international in character. Stephens J also held that it would need to be of international concern. Following the decision in the Tasmanian Dams Case, it has been established that the broad view is to prevail. BROAD VIEW Under the broad view, s 51(xxix) grants the Commonwealth power to incorporate all its treaty obligations into domestic law (R v Burgess). The majority in R v Burgess held that the fact of an international convention about a subject matter brings that subject matter into the field of international relations. In respect of the scope of the power, Evatt and McTiernan JJ confirmed that it extends not only to the execution of treaties and conventions but also to draft international conventions and recommendations of international bodies. The views of Evatt and McTiernan JJ in Burgess were subsequently followed by the majority in Koowarta. Mason, Murphy and Brennan JJ held that s 51(xxix) allowed the executive to implement any bona fide treaty. The deciding case was the Tasmanian Dam case, in which the bare majority (Mason, Murphy, Brennan and Deane JJ) adopted the wide view proposed in Koowarta. The bare majority in Tasmanian Dam was converted into unanimous acceptance in Ricardson v Forestry Commission. In that case, the High Court found that the external affairs power will sustain laws designed to discharge Australias reasonably apprehended obligations under a treat (@ 295). That is, the Commonwealth can legislation on matters that are reasonably incidental to treaty obligations. In Victoria v Commonwealth, the majority view in Tasmanian Dams was applied to uphold a Commonwealth industrial relations law, which implemented international standards set out by the International Labour Organisation. Therefore, it is accepted that the external affairs power is not confined to external aspects of the other heads of power enumerated in s 51, nor is it limited to topics of international concern or having international character. Any topic on which the Commonwealth has entered into a treaty becomes an external affair, despite it being a topic on which the Commonwealth Parliament otherwise would lack power. Formulation of the wide view in Burgess R v Burgess; Ex Parte Henry (1936) Henry was convicted of offences under an air navigation act (1920) Regulations were made to give effect to international convention on aerial navigation (signed 1919) Convention prohibited pilots/planes from flying below a certain height limit in airport landing areas but provided for a neutral zone adjacent to the landing area in which craft could manouveure on the ground The Domestic regulation prohibited flying below the height limit throughout the whole aerodrome Henry, who ran joyflights in the neutral zone breached this regulation and challenged its validity on the ground that there were substantial differences between the Convention obligations and the regulations relating to the use or airports and landing places 40 Lina Terresa Bui

Henry argued that the Commonwealth had no constitutional power to extend any limitations on flying height applicable to landing areas

Majority (Evan and McTiernan JJ) Embraced a broad view of the power External affairs is an expression of wide enforcement and cover the whole series of relationships between states in times of peace or war It extends to implement international treaties Parliament may well be deemed competent to legislate to characterise recommendations of international bodies or draft international conventions

Majority (Latham CJ) Minority Starke J did agree that the power relates to other nation states, but subject to constitutional limits and the power was comprehensive in its terms BUT a law would be in the power only if the subject matter was of sufficient international significance Dixon J said that it was not an easy power to apply Probably the case that the treaty would have to concern some matter indisputably international in character An extreme view that merely because the executive entered into the treaty, the parliament gained the power to implement. Adopted the wide view, but at least not to put limits on the outset Scope of the agreements inherently different Stressed relations between Australia and other countries at the heart of the power (s 51(29)).

Wide view almost prevails in Koowarta Koowarta v Bjelke-Petersen 1982 In 1975 Australia ratified the International Convention on the elimination of Racial Discrimination. In 1975 the Commonwealth Parliament enacted the Racial Discrimination Act pursuant to the treaty. Koowarta applied for federal funding to buy a Crown pastoral lease in Queensland. The Queensland Minister for Lands refused to transfer the land on the basis that it was contrary to State Government Policy to grant consent to large Aboriginal land claims. K challenged this decision on the basis that it was racially discriminatory and unlawful under the Racial Discrimination Act. QLD Govt argued that the Act could not be supported by the external affairs power on the basis that the mere existence of the Convention was not an external affair. HELD by majority (4:3) that ss 9 and 12 were valid. Mason, Murphy and Brannan JJ adopted the wide view of Burgess and allowed the legislature to legislate any bona fide treaty. Held that treaties concern relations with other countries and the ability to legislate treaties is at the heart of the external affairs power Stephen J required that the subject matter of a treaty independently of the existence of the treaty had to be an international concern. Reached the conclusion that racial discrimination was of international concern. Minority (Gibbs, Wilson and Dawson JJ said that the law only went to distribution of land in Australia and could not be caught by the Commonwealth Racial Discrimination Act 1975. They also had concerns relating to the potential for abuse of the external affairs power that is the use of the power to subvert the federal balance (the position of the States should not be eroded).

Wide view prevails in Tasmanian Dams Tasmanian Dams Case 1983 Australia had ratified a Convention for the Protection of the World Cultural and Natural Heritage. The Tasmanian Parliament had enacted the Gordon River Hydro-Electric Power Development Act which authorised the Hydro-Electric Commission to construct a Dam on the Gordon River within one of the Parks nominated for listing in the World Heritage List. The construction of the dam had commenced. The Commonwealth Parliament then enacted the World Heritage Properties Conservation Act which was said to implement the Convention and the World Heritage List.

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The Act prohibited any person to carry out excavation works, drilling in connection with mining, erecting buildings or structures, destroy or damage a building or structure, kill, cut down or damage any tree, to construct roads, use explosives of any area listed HELD by majority (4:3) that the Commonwealth had valid lawmaking power under s 51(xxix). Mason J said the fact of entry into, and ratification of, an international convention, evidences the judgment of the Executive and of Parliament that the subject matter of the convention is of international character and concern and that its implementation will be a benefit to Australia. Murphy, Brennan and Deane JJ adopted similar findings. Gibbs CJ, Dawson and Wilson JJ dissented, finding the relevant treaty could only be incorporated into domestic law under s 51(xxix) if it concerned a matter of international concern. According to the minority, the subject matter at hand, the protection of world heritage sites, was nota burning international issue.

OBLIGATION? The law is not settled as to whether the treaty must impose an obligation upon Australia. The requirement of an obligation is not required where the treaty confers benefits to Australia (Airlines of NSW v NSW (No 2)). The test appears to be whether the international community sees the treaty, as a matter of fact, as imposing an obligation on Australia, now or in the future, by examining the importance by which the international community place on it (Queensland v Commonwealth). This element is related to that of specificity. If the treaty is too broad, this is not indicative of an obligation (IR Act Case)

LIMITS ON THE POWER

There are a number of express and implied Constitutional limits as to what treaties the Commonwealth may enter. SPECIFICITY The law must implement a specific course that the treaty requires to be adopted, not merely one of multiple means that the may achieve an ideal (IR Act Case @ 486). However, the imprecise nature of international law causes problems in this respect and the court is unlikely to enforce this requirement too strictly (IR Act Case). EXPRESS CONSTITUTIONAL LIMITS As with all s 51 powers, s 51(xxix) is subject to all the express and implied constitutional guarantees and limitations. BONA FIDE TREATY The Commonwealth may not enter into an international treaty merely as a device to attract jurisdiction to itself which it would not otherwise have (Tasmanian Dams). It has been suggested that the Commonwealth can only implement treaties that have been entered into in good faith - that is, they are bona fide and not a device to gain legislative power over an otherwise unavailable topic (Brennan J in Koowarta @ 260). CONFORMITY It is now clear that the implementing law must sufficiently conform to the terms of the treaty (Tasmanian Dams). IF direct implementation: There will be no problems with conformity if the relevant section/treaty has been directly implemented IF implementation does not strictly follow the convention, but has a similar or same effect: In Lemonthyme Forest it was held that Parliament should be given some leeway as to the means employed in adopting a Treaty, but it will always be a question for the court to determine whether the law is appropriate and adapted. IF provision is delaying assessment of future activity: In Lemonthyme Forest that case that held that because the act was only an interim period while assessments for world heritage listing, occurred parliament was within its power.

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IF partial implementation: Generally, partial implementation is permitted (Seas & Submerged Lands Act Case). However, where the deficiency is so substantial as to deny the character of the law as one implementing the convention, or when coupled with other law, it becomes inconsistent with the convention, the deficiency will be fatal to the laws validity. IF the convention breaches international law: Whether this will effect conformity was considered in Horta v Commonwealth. The court held that even if the treaty was void or illegal under international law the Act would be valid because it was implementing an agreement between Aust and Indonesia. Therefore the illegality of the treaty will not be fatal (Horta). R v Burgess Regulations made under the Air Navigation Act 1920 (Cth) were challenged for lacking conformity with an international convention for the regulation of aerial navigation. The primary issue was whether the Commonwealth had power to regulate air navigation, as it had no power over that topic granted in the Commonwealth Constitution. The secondary issue was whether the regulations were ultra vires. HELD by Latham CJ @ 627 that any statute may properly be applied to new facts and new conditions if the words of the statute properly construed are such to include such facts and conditions. Latham CJ found the regulations were ultra vires - they did not conform to the convention. The remaining justices agreed that the Commonwealth, whilst possession power to implement the convention, using s 51(xxix), had exceeded that power as the regulations purposed to go beyond what the convention required.

NSW v Commonwealth (Seas and Submerged Lands Case) (1975) The Commonwealth Parl attempted to claim sovereignty in respect of the Territorial Sea and exclusive rights over the continental shelf under the Seas and Submerged Lands Act 1973. The boundaries of the States ended at the low water mark. Re: exclusive rights over the continental shield, the Ct accepted that this was within the external affairs power; and Re: sovereignty in respect of the Territorial Sea, a majority of the Ct held that the Commonwealth Parl could pass legislation to this effect. Those judges that upheld the law on the basis of the external affairs power, accepted the fact that the Commonwealth Parl was here legislating to implement the terms of 1958 Geneva Conventions on the law of the Sea, but a majority also held that the Commonwealth could, under its external affairs power, legislate with respect to any matters or circumstances geographically external to Australia. Judges who accepted the use of the external affairs power, acknowledged that the Commonwealth was only partially implementing the terms of these Conventions, but that didnt matter.

Victoria v Commonwealth (Industrial Relations case) 1996 The Commonwealth parliament had inserted new provisions into the IRA to protect workers entitlements from possible erosions of the state legislation Relying on various heads of power but also the external affairs power including conventions of the ILO (labour organisation) Scope of the power- should go back to the international concern test from Stephen J- still adopted the wide view and the content of the power had increased since its creation, affirmatively said that the Tas Dams case was correctly decided Addressed the specificity issue- the treaty must be specific as to the action that must be taken- if you have a treaty that is expressed in such a way that expressed we would like this to happen and that implementation could happen in a wide array of methods The law had to prescribe a regime that the treaty has defined with sufficient specificity as to the general course that the general course that must be taken However an absence of precision doesnt mean an absence of obligation Joint judgment- law had to be reasonably appropriate and adapted Purpose is not something found in the head of power, you look at the purpose to see if the law is reasonable capable to giving effect to the treaty Doctrine of reasonable proportionality- will not always be helpful Partial Implementation Acceptable but they do say that there is a qualification Brennan CJ, Gaudron, McHugh and Gummow JJ held that the law will be invalid if the deficiency is so substantial as to deny the law the character of implementing the convention or it makes the law substantially inconsistent with the convention 43 Lina Terresa Bui

Starke J in Burgess first stated the above provisions as accepted by a majority in the Industrial Relations Act case Deane J in Tasmania Dams case you can partially implement but not if the Act contains provisions substantially inconsistent with the provisions of the treaty

Richardson v Forestry Commission A Commonwealth Act established a Commission of inquiry to determine whether 2 areas of Tasmania qualified for inclusion on the World Heritage List (Commonwealth relying on the UNESCO Convention) Part 3 of the Act provided for an interim protection period to protect these areas during the course of the inquiry. 4.5% of Tas land was locked up in this arrangement HELD that the measures were valid (the inquiry and reporting provisions and the interim protection measures were valid). Deane and Gaudron JJ dissented The High Court affirmed the Tas Dams Case Toohey and Gaudron (dissent) expressed their support for the Tasmanian Dams Case, and joined Mason, Brennan and Deane JJ Wilson and Dawson JJ reluctantly accepted the Tas Dams Case Court also accepted that the Tas Dams Case did not require that a treaty impose an obligation before it could be implemented under s 51(xxix) The Convention did not impose a specific obligation to make inquiries, there was only a general commitment to preserve the World Heritage There was a broad obligation that was sufficient (but not necessary). Parliament should be given some leeway as to the means employed in adopting a treaty, but it will always be a question for the court to determine whether the law is appropriate and adapted

Qld v Commonwealth (Qld Rainforest Case) There was a proclamation under the same Act that had been employed in the Tas Dams Case, a proclamation to prohibit the doing of prescribed acts with regard to an area of wet tropical rainforest in North East Australia This area had been included in the World Heritage List Qld challenged the validity of the proclamation and argued that the property was not one in respect of which a proclamation could be made and also said that the inclusion of the property in the World Heritage List was not conclusive of it being part of Australias natural heritage Held by High Court that the inclusion of the property in the World Heritage list enlivened the external affairs power (brought it into play) and was conclusive of the fact that the property was part of the natural heritage Court looked at whether there was a international duty of obligation to protect the property and said whether there is such a duty is to be decided as a matter of fact and the duty depended upon the construction that the international community would give to the Convention Court said that they will give effect to this There was a duty under the Convention and there was no suggestion of bad faith in either the nomination or the listing on the World Heritage list Dawson agreed (but was separate and seemed a bit fed up with the external affairs power). He said that this result was the consequence of a broad reading of the power (its almost unlimited)

Horta v Commonwealth There was a challenge to the Treaty between Indonesia and Australia in regard to the exploitation of the Timor Gap offshore area (exploiting petroleum and other resources) The Treaty established a zone of cooperation between East Timor and Northern Australia Horta wanted to challenge the Commonwealths ability to enter into this sort of arrangement with Indonesia HELD that this was a valid exercise of the Treaty-making power and said that in any event, the area is geographically external to Australia (so the Treaty is valid) Even if there were no Treaty, the Act would be valid Court said that it didnt matter that there might be an argument that the Treaty breached customary international law. Even if the Treaty were void or unlawful under international law, the Act itself would be valid

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NON TREATY ASPECTS

CUSTOMARY INTERNATIONAL LAW

The Commonwealth can legislate to give effect to customary international law, which regulates relations between countries in the absence of treaties. It was held in Tasmanian Dams that the implementation of customary international law is within the scope of s 51(xxix). IF CIL applies: If the practice is widespread and accepted, it would be customary international law and therefore fall within the scope of s 51(xxix). IF CIL does not apply: Brennan & Toohey JJ in Polyukhovich v Commonwealth, held that customary international law did not impose an obligation to prosecute axis war criminals. The Court in the IR Act Case held that there was no right to strike under customary international law.

PERSONS, THINGS AND CIRCUMSTANCES INTERNAL TO AUSTRALIA

Section (xxix) extends to persons, things and circumstances internal to Australia to the extent that it covers: Matters concerning relations with other countries, such as sedition against other governments; Matters concerning foreign nationals, residents or entities within Australia (e.g. regulating their transactions with Australia and Australians).

In McArthur v Williams, the extradition of fugitives was held to fall within the scope of s 51(xxix). The extradition or deportation of aliens was held to fall within the scope of s 51(xxix) in Robtelmes v Brenan.

PERSONS, THINGS AND CIRCUMSTANCES GEOGRAPHICALLY EXTERNAL TO AUSTRALIA

It was established in Seas and Submerged Lands Act Case that the power in s 51(xxix) can apply to any person, places, matters or things external to Australia, all that is required is geographical externality. This was confirmed in Polyukhovich v Commonwealth where the Court held that mere geographical externality is sufficient to bring a law within s 51(xxix). Similarly in Horta, the Court was prepared to uphold the Commonwealth law on the basis that even though there was no treaty, the subject was external to Australia. In the recent case of XYZ v Commonwealth, the Court upheld the principle of geographic externality and upheld a law which applied to child sex tourism overseas. Polyukhovich v Commonwealth Section 9 of the War Crimes Act provided that persons who committed a war crime in Europe as defined between 1 Sept 1939 and 8 May 1945 were guilty of an indictable offence under the Act. For most part the Act dealt with acts outside Australia and the allegations about the plaintiff related to acts done in the Ukraine during WWII Plaintiff challenged the Act on the basis that it was NOT a valid exercise of external affairs Majority accepted that the mere fact of geographical externality would be sufficient Mason and Dawson held there is no need for Australia to have an interest or concern in the subject matter of the legislation Brennan & Toohey JJ expressed the need for some connection between the external matter and Australia Toohey J concluded that Australias participation in WWII was a sufficient interest

XYZ v Commonwealth Crimes Act 1914 (Cth) was amended by Crimes (Child Sex Tourism) Amendment Act 1994 to prohibit certain sexual crimes committed by Australians, outside Australia. XYZ, an Australian, was charged with sexual activities with a child whilst in Thailand.

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XYZ argued that Polyukovich was wrongly decided, and that s 51(xxix) is only a power to make laws with respect to relations between Australia and other countries. HELD by majority in favour of Commonwealth. Gleeson CJ confirmed that the external affairs power includes a power to make laws with respect to places, persons, matters of things outside the geographical limits of, that is, external to, Australia. In his view, this represents the current doctrine of the Court on the external affairs power, and should be maintained because it is correct @ [10] Gummow, Hayne and Crennan JJ agreed. Kirby J upheld the legislation, but expressed reservations, stating that arguments raised by the plaintiff have planted a doubt in my mind concerning the geographical externality principle.

RECOMMENDATIONS OF INTERNATIONAL BODIES

It is not clear whether the implementation of recommendations of international bodies fall within s 51 (xxix). There is dicta that suggest that these can bring legislation within the scope of s 51 (xxix), however there is no authoritative case. In Burgess Evatt and McTiernan JJ felt s 51(xxix) allowed the Commonwealth to legislate to implement any international convention and including draft international relations and recommendations of international bodies. In Tasmanian Dams Case Murphy J also said the power would extend to recommendations. Deane J added the qualification that there must be some obligation attached to the recommendation or some evidence of international concern. Brennan J in Polyukhovich also held recommendations could be implemented. The situation was again considered in Industrial Relations Act case. In that case the Court accepted that recommendations made in connection with a treaty could be legislatively implemented however it was left undecided whether or not this extended to recommendations made independent of an treaty. However, where the recommendation is related to a treaty, it is highly likely that this will be brought within the scope of s 51 (xxix) (IR Act Case). Limits 1. 2. 3. Conformity requirement will probably still apply, similarly to the treaty aspect of the external affairs power The Ct might wish to see evidence of international concern independently of the recommendation Would probably not impose need for obligations the very nature of recommendations are that there is no obligation.

MATTERS OF INTERNATIONAL CONCERN

The Court in Tasmanian Dams held that matters of international concern fell within the scope of s 51(xxix), however Murphy J was the only justice to hold that it could be sustained independent of a treaty. However such a proposition was criticised by Callinan and Heydon JJ (dissenting) in XYZ v Commonwealth, who suggested that international concern in the absence of a treaty would not be sufficient. What is sufficient international concern? Brennan J in Polyukovich sought to impose a qualification that the standard must be broadly adhered to internationally.

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FEDERAL JUDICIAL POWER

EXAM SUMMARY 1. Is the body a Chapter III court? Does it have s 72 tenure? Is it a federal court, or a court vested with federal jurisdiction? 2. If yes, it can only exercise non-judicial power if auxiliary and incidental to the judicial power (Boilmakers). No function can be conferred that is incompatible either with the Judges performance of his or her judicial functions or with the proper discharge by the judiciary of its responsibilities as an institution exercising judicial power. 3. If no, it cannot exercise judicial functions.
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FEDERAL SEPARATION OF POWERS

The pure doctrine of separation of powers prescribes that the functions of the three arms of government be clearly and institutionally separated. Thus, the legislature should legislate, the executive should administer and the judiciary should adjudicate on the law; non should cross into the others domains. Section 1 vests legislative power in the federal parliament. Section 61 confers executive power on the Queen, exercisable by the Governor-General. However, a full separation of powers is not conferred as s 64 requires members of the executive council be members of parliament. Section 71 confers judicial power on the High Court and whatever other courts the Parliament creates, and those which they vest federal jurisdiction. Section 72 guarantees that judges of these courts will not be removed except on the address of both houses, and their salary was not to be reduced {. Although s 71 does not say that federal executive power can only be vested in those courts, s 72 would be pointless if this was not implied.

The separation of judicial power and its vesting in independent courts under Ch III helps to ensure the maintenance of the rule of law by requiring that all people, associations and governments obey the law (ACP v Commonwealth). The separation of judicial power from legislative and executive power has a number of consequences: 1. 2. First, only Ch III courts can exercise judicial power. Second, Ch II courts can only exercise judicial power, and powers that are incidental to judicial power.

FEDERAL POWER MUST BE VESTED IN CHAPTER III COURT

A federal Act that vests judicial power in something other than a Ch III court will be invalid. Only a Ch III court can exercise judicial power.

CHAPTER III COURT

71 Judicial power and Courts The judicial power of the Commonwealth shall be vested in a Federal Supreme Court, to be called the High Court of Australia, and in such other federal courts as the Parliament creates, and in such other courts as it invests with federal jurisdiction. 72 Judges' appointment, tenure, and remuneration The Justices of the High Court and of the other courts created by the Parliament: (i) shall be appointed by the Governor-General in Council; (ii) shall not be removed except by the Governor-General in Council, on an address from both Houses of the Parliament in the same session, praying for such removal on the ground of proved misbehavior or incapacity. Federal judicial power is only to be exercised by Ch III courts. A Ch III court is recognised by its s 72 tenure, or in the case of a State court, vested with power under s 77(ii). Therefore, we must determine the following: Do they have tenure? Do they have wages that cannot be reduced?

Brandy v. Human Rights and Equal Opportunity Commission The Court was unanimous in holding that sections of the Racial Discrimination Act 1975 (Cth) were invalid because those sections had the effect of conferring judicial power on the Human Rights and Equal Opportunity Commission. Where the Commission decided that an act of racial discrimination had been committed, that decision could be registered with the federal court and would take effect as if it were an order of that court unless the court reviewed the decision. The courts review was not based on new evidence except with the leave of the Court.

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Huddart Parker The Comptroller of Customs had a power to demand answers to questions about importation Also had power to impose penalties on those who did not answer Answers were admissible, right against self-incrimination could not be relied upon HP, a shipping coy, challenged the constitutionality of the power vested in that comptroller because the comptroller of Customs does not have tenure until the age of 70 (in those days life). HELD that the power to demand answers to questions was held to be valid because it was only preliminary to Court action, it was not a judicial action Analogy drawn by HP about Magistrates answering questions not valid because in that case Magistrates were exercising administrative power Generally, preliminary investigations not judicial as not a definitive determination of the rights of a person The Comptroller did not reach binding decisions on guilt or innocence (a hallmark of judicial power) Court remarked in dicta that if it had been judicial then it could not be vested in the comptroller.

JUDICIAL POWER
THE PRINCIPLE

There is no clear definition of judicial power (R v Davidson). However, it usually involves legally enforceable decisions as to oreexisting rights of parties to a dispute (Huddart-Parker v Moorehead). This was confirmed by the High Court in Ranger Uranium where they added prima facie judicial power is anything where a person is making a decision as to the pre-existing rights of the parties to a dispute based on pre-existing law, which is directly enforceable. A decision may be non-judicial even if it appears to be judicial if the outcome is not legally enforceable i.e. they need a court to enforce or punish (Tas Breweries). COMMON CHARACTERISTICS OF JUDICIAL POWER IF members have tenure: One identifying characteristic of a federal court is that its members must have tenure. All federal judges, including High Court justices, sit until 70 years of age, when they must retire. This was the result of a constitutional amendment in 1977, which altered s 72s original requirement that justices have life tenure. In 2007, the federal courts include the High Court, the Federal Court, the Family Court and the Federal Magistrates Court. IF the discretion conferred is wide: The wider the discretion conferred upon the decision maker, the more likely the functions are administrative and policy based, rather than judicial in nature (R v Spicer; Ex parte Australian Builders Labourers Federation). Tasmanian Breweries The Trade Practices Tribunal was hearing applications for non-adherence of trade practices The first step was to decide whether a practice was a deciding the rights of parties based on applying a pre-existing law This was also the same conclusion that the court had to draw in hearing Trade Practices applications The court found that this was not a violation of the independence of the judiciary as the Trade Practices Board could not enforce a penalty, they still had to bring an offender before the court once they reached the finding that there was a breach of the TPA

IF decision is final and binding: Where the decision about existing rights is final and binding (even if subject to appeal) it is more likely to be treated as judicial in nature. Administrative tribunals may come to findings of fact and law, but in this context they may not be considered final and conclusive, as a hearing de novo is usually available (Rola Company v Commonwealth). Rola Company v Commonwealth A disputes board under the Conciliation and Arbitration Act was deciding issues about industrial classifications (i.e. who was qualified to perform a job) and then ruling on their findings 49 Lina Terresa Bui

However, the ruling was not enforceable in itself If the employer continued to defy the ruling, the board had to take the employer before the court Once before the court the Coy in question were able to obtain all the benefits of a separate judiciary (i.e. a defence council, cross-examination etc) The court found that this was not a transfer of judicial power for this reason.

Judicial findings are binding and enforceable on the parties while decisions of non-judicial bodies may not be strictly enforceable. Enforcement of administrative decisions occurs after enforcement proceedings are concluded in a court. Brandy v Human Rights and Equal Opportunity Commission Amendments to the Racial Discrimination Act 1975 (Cth) in 1992 authorised the Human Rights and Equal Opportunity Commission (HREOC) to register its decisions with the Federal Court. Once registered, HREOCs decisions were enforceable as if they were Federal Court judgments. Brandy challenged the amendments, arguing that the HREOC was impermissibly conferred with judicial and non-judicial powers. HELD that the HREOC determinations had many characteristics of judicial power, but until the 1992 amendments, they where unenforceable and thus non-judicial. The 1992 amendments authorised the enforcement of the decisions of a non-judicial body. By providing a method for making decisions enforceable, they took on a judicial character. The amendments where thus invalid. Deane, Dawson, Gaudron and McHugh JJ said @ 268 There is one aspect of judicial power which may serve to characterise a function has judicial when it is otherwise equivocal. That is the enforceability of decisions given in the exercise of judicial power

Therefore if the decision is expressed not to be final and conclusive, that may tend towards a finding that the power is nonjudicial (British Imperial Oil). The use of the word appeal in the Act is thus some evidence of judicial function (British Imperial Oil) although it is not conclusive (Shell). British Imperial Oil Co v Federal Commissioner of Taxation (1925) Taxation Board of Appeal had power to determine appeals from taxpayers who disagreed with decisions of government. Power to determine questions of fact conclusively and questions of law with right of appeal to the HCA or state SC HELD that a non-Chapter III court could not decide questions of law OVERTURNED in Shell Where non-Chapter III court determined a mixed question of fact and law, it could not be conclusively determined by a non-judicial body.

Shell Co v Federal Commissioner of Taxation (1930) (Privy Council of BIO) Taxation Board of Review able to answer questions of fact and law arising from taxation determinations Right of appeal to a Chapter III court on a question of law allowed this scheme to stand within the limits of the separation of powers The Board may act judicially here as it determines the law as it sees it, but it is not a conclusive decision because it can be reviewed by a court

Re Cram; ex parte Newcastle Wallsend Coal Co (1987) Coal Industry Tribunal had power to hear application from parties for interpretation of industrial award, and determine claim for wages owing HELD that the forming of the opinion as to the interpretation of the award was allowed by a non-Chapter III court But the making of a binding, conclusive decision as to legal rights of parties was judicial power.

IF immediate enforceability: A tribunals power is likely to be non-judicial if its decision is not immediately enforceable, that is, if it cannot enforce anything on the parties, and separate proceedings in a court are required to enforce the effect of the decision (Rola Co v Commonwealth and Tas Breweries). This also applies if the body can enquire but cannot make a legal determination (Huddart Parker). R v Trade Practices Tribunal; ex parte Tasmanian Breweries (1970) The TPA conferred power on Tribunal to determine 1) subject matter (whether the agreement or practice existed); 2) whether it is contrary to public interest 50 Lina Terresa Bui

If a corporation is engaging in anti-competitive conduct the Trade Practices Tribunal had to decide whether there was a breach of the Act, and then had the power to authorise the breach of the Act if the conduct produced a surplus of public benefit over public detriment. However, if the organisation kept participating in the conduct, the TPT didnt punish it, the TPC had to separately take the corporations to the Federal Ct to punish them.

IF creation of new rights and duties: The creation of new rights and duties is a characteristic of non-judicial decisions, while judicial decisions tend to authoritatively identify and declare existing rights and obligations arising from past conduct (Lutton v Lessels). As the making of an industrial awards creates new rights, this power is non-judicial (Waterside Workers Federation). Similarly, the handing down of industrial awards for different industries and employers is a non-judicial function (Boilmakers case). IF history of the function is relevant: In some cases, a power has been said to be judicial because it has traditionally been exercised by the courts, even though as a matter of analysis it could be made an administrative task (R v Davison). On the other hand, the exercise of clearly judicial powers by non-judicial bodies has been allowed on historical grounds Courts-martial in the army, judges are appointed from the army and dont have life tenure, but can exercise judicial powers (Re Colonel Aird; Ex parte Alpert) Public service disciplinary tribunals disciplinary tribunals within the public service exercising judicial powers are valid as long as they were only demoting, docking pay etc (R v White; Ex parte Byrnes). Parliaments own power to punish for contempt Parliament has the right to conduct trials for contempt (R v Richards; Ex parte Fitzpatrick and Browne).

If nature of the rights affected is relevant: If the rights involved are not one of the basic rights which traditionally are judged by the independent judiciary but instead is granted by the Act which empowers a non-judicial official to take it away, a tribunal may make a decision regarding such rights and it need not be done by a Ch III court (Quinn). Quinn This case was about the power of a registrar of trademarks to cross a trademark off the register (looks like judicial power, there were criteria for striking off a trademark, it was applying pre-existing law to pre-existing fact). The exercise of this power by a non-judicial body was challenged The HC said that this was all right because the point of the separation of powers was to preserve the rights of individuals, to preserve the traditional rights and liberties The right to a trademark is not one of the traditional rights that people would protest about, its a right granted by statute and it can be taken away by statute Thus as it could be taken away by legislation, nothing wrong with such power being exercised by a non-judicial body.

IF decision involves consideration of policy: If the tribunals decision is determined not merely be the application of legal principles, but by considerations of policy as well, it will not be exercising judicial power (Tasmanian Breweries). Tasmanian Breweries The TPA conferred power on Tribunal to determine the subject matter (whether the agreement or practice existed) and whether it is contrary to public interest If a corporation is engaging in anti-competitive conduct the Trade Practices Tribunal had to decide whether there was a breach of the Act, and then had the power to authorize the breach of the Act if the conduct produced a surplus of public benefit over public detriment. Determination of public policy and the public benefit/detriment weighing up clearly a matter of economics and not a judicial power.

PDH v Wills Court to determine if there had been a breach of the takeovers code for the fair operation of the stock market Could make draconian orders free shareholders, void the transfer of shares etc Determination of breach was on basis of breach of public policy of an open market Thus based on economic policy and able to be exercised non-judicially 51 Lina Terresa Bui

CASES ESTABLISHING PRINCIPLE

In the Wheat case, the Court held that the doctrine applied to the Inter-State Commission, despite s 101 of the Constitution which granted them adjudication powers. The Court held that the Commission could only exercise powers of adjudication if it was incidental and ancillary to executive functions. New South Wales v Commonwealth (the Wheat case) The case concerned the Inter-State Commission, a body set up under Federal legislation pursuant to s 101 of the Constitution and given powers to determine disputes involving interstate trading and commercial issues and to issue certain remedies including an injunction. The Commissioners were given 7 year terms under s 103 of the Constitution The validity of this structure was challenged on the basis that the Inter-State Commissions powers of adjudication under s 101did extend to the exercise of judicial power of the Cth which could only be exercised by Chapter III courts. Commissioners did exercise some powers that seemed to be judicial terms of record, jurisdiction, power to award damages/penalties It was submitted that the power to issue an injunction was a type of judicial power which could not be exercised by the Commission. HC said they knew that there were powers in s 101, but s 71 says judicial power is vested in Courts with s 72 tenure and therefore the powers in ss 101-104 can only be powers that are ancillary to the other powers. HELD that a full grant of powers of adjudication to a body with 7 year terms was invalid even though it looked like it was complying with the Constitution. Held that s 101 must be read down and that Commission could exercise some judicial power only if it was incidental and ancillary to its executive powers Strong dissent on the grounds that it was specifically allowed by the Constitution Discussed the need to keep the judicial power pure Commission abolished after this as it had no teeth, but was temporarily revived by Whitlam

The Wheat case was upheld in WWF v JW Alexander. The Commonwealth Court of Conciliation and Arbitration had judges with 7 year appointments. The court had the power to make awards and impose penalties for breach. The Court held that the Court of Conciliation and Arbitration couldnt impose penalties because they were not tenured. Waterside Workers Federation v J W Alexander Concerned the Court of Conciliation and Arbitration, set up under s 51(35) and for many years the same body heard industrial disputes, handed down awards and if an award was breached, punished breaches Members of the Court were called judges Court made an award which was binding on the WWF. The Federation breached the award and the Court was asked to punish the breach HELD that this was not a real Court because the judges only had 7-year appointments This case entrenched the proposition that the Cth Parliament could confer judicial functions only on the Courts listed in s 71 Punitive power exercised by the judges was judicial and could not be exercised without life tenure under s 72 The decision also established that a central characteristic of a federal court created by the Cth Parliament was the tenure which provided for the Courts members.

CLEAR CASES OF JUDICIAL POWER Only a s 71 court can exercise the following functions, which are generally indicative of judicial power: The adjudgment and punishment of criminal guilt (WWF v Alexander, Industrial Lighting) The declaration of invalidity of an Act (Wheat case) Declaration that dismissal of worker is contrary to an award (Austin). However, making new rules as to when dismissal is unfair, that is, to clarify what the law is, is non-judicial (Ranger Uranium). Granting injunctions against breaches of an Act (Mikasa) Power to make control orders limiting a persons travel and communication (dicta in Thomas v Mowbray) Committing for contempt for breach of an injunction (Boilermakers) Orders for recovery of possession of land (Silk Bros v SEC) A power, in the executive, to order the involuntary detention of people, with a section in the Act providing that a court could not order the detainees release from custody (Chu Keng Lim v Minister for Immigration) Declaration that dismissal of worker is contrary to award (R v Austin ex p Farmers & Graziers)

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INVOLUNTARY DETENTION Generally, involuntary detention exists exclusively as an incident of the judicial function of adjudging and punishing legal guilt (Lim v Commonwealth). Exceptions The executive do have some powers to detain: (a) (b) (c) (d) (e) prior to trial, subject to bail for mental illness for infectious disease illegal aliens for the purpose of deportation for childrens own safety (R v Kruger)

In Ak Kateb v Goodwin and MIMIA v Al Khafaji, the court held that an act that allowed indefinite dentention of aliens was valid, provided that the Commonwealth had an eventual purpose of removal. In Behrooz v Secretary of DIMIA, an escapee of Woomera argued that the conditions of detention were so harsh that it was not authorized by the act, and/or amounted to punishment, and was therefore constitutional. The court held that although the act didnt authorize inhumane treatment, the detention was still valid and there were other remedies apart from escaping.

PARLIAMENT EXERCISING JUDICIAL POWER

The parliament cannot exercise judicial power by: A Bill of Attainder {providing that a specific person shall be executed or exciled}; A Bill of Pains and Penalties {a penalty imposed on a specific person, which is usually done by courts} (Polyukhovich {that act was held to be valid as it applied to a class of persons (war criminals), not to a specific person}). Enacting a law preventing appeal against imprisonment (Lim v Commonwealth); Trying to declare facts to put an act within the Commonwealths constitutional power (ACP Case).

COURTS MUST NOT BE GIVEN NON-JUDICIAL POWER

HISTORY

A Federal Court must not exercise non-judicial power unless it is auxiliary or incidental to its judicial power (Boilmakers case). This rule was stated for the first time in Peacock v Newtown Marrickville. In this case, the court was given power to vary contracts which were suddenly made unfair by the outbreak of war. One of the parties challenged this as a non-judicial power. The court held in this case that the power of the court to vary contracts was valid by drawing an analogy with Money-Lenders Acts which may alter the contracts. Peacock v Newtown Marrickville The court was given power to vary contracts which were suddenly made unfair by the outbreak of war Plaintiffs aggrieved by this argued that the court didnt have the power to alter contracts The court held in this case that the power of the court to vary contracts was valid by drawing an analogy with MoneyLenders Acts which may alter the contracts The important thing to note is that dicta in this case developed the doctrine that federal courts must not exercise nonjudicial power, except if it is auxiliary or incidental to judicial power

Re Judiciary & Navigation Acts (Advisory Opinions Case) In the Judiciary Act, the Parliament had inserted a section which said that the HC could be asked to give an advisory opinion on the validity of legislation. Parliament later passed the Navigation Act and the A-G wasnt sure whether it was totally valid, so he went to the Parliament to get an advisory opinion. Federal Courts can only hear matters listed in ss 75-76. Here the HC held invalid Pt XII of the Judiciary Act 1903 (Commonwealth). The part authorised the A-G to refer to the HC for its determination any question of law as to the validity of any Act or enactment of Parl. The majority of the Court held that this function, of making an authoritative decision on the validity of legislation, was judicial; but that it could not be exercised by the HC because it was not part of the judicial power of the Commonwealth. 53 Lina Terresa Bui

The HC concluded that Ch III of the Constitution did not allow Parliament to confer power upon the HC to determine abstract questions of law without the right or duty of any body or person being involved.

In Queen Vic Mem Hospital, a court was given complete discretion to review an employers decisions, on the same grounds as the employer. The court held that this was a clear ground for it being non-judicial and therefore, it was invalid. Queen Vic Mem Hospital A Magistrate exercising federal jurisdiction can only be given proper judicial matters by the Federal Parl. It was about preference to ex-service personnel. The employer was told to give preference on certain criteria. The parties then had a right of appeal to the Magistrate and the M was then to make a decision on exactly the same criteria. HELD that the criteria were too broad to amount to judicial power and in DICTA said that non-judicial functions could be validly granted to a Ct where they were incidents of a strictly judicial power. Here they held that the non-judicial powers were not mere incidents, they were in fact most of the power.

Boilermakers Case The Court of Conciliation and Arbitration were given life tenure following Alexander. In 1956, after the Court had been operating for 50 years, a Union challenged the status of the Court. The Court was issuing injunctions not to breach awards, as well as making them (which is non-judicial, as an award lays down a new rule to be obeyed in the future). The Court, by majority, and later the Privy Council, applied the dictum from Queen Vic Mem that a Court must not exercise non-judicial power except where its auxiliary or incidental to judicial power. Here, the main job of the Court was to do non-judicial things, and the judicial power was just a small part of it. The Unions got what they wanted because the awards were still valid and the power to punish them was invalid. In this case, the so-called Court of Conciliation and Arbitration was primarily non-judicial because they spend most of their time making industrial awards and a small proportion of time enforcing them. Therefore the awards all stay valid and the power to punish for breach became invalid. Later, the Parliament separated the Court from a Commission and split the functions.

CURRENT POSITION

There appears to be different rules for conferring non-judicial powers upon courts and judges. In Boilermakers, the Court held that courts should not exercise non-judicial powers that arent incidental to their judicial function. PERSONA DESIGNATA Federal justices are normally treated the same as Ch III courts, and cannot carry out non-judicial functions. However, they may carry non-judicial roles in their personal, as opposed to their official, capacity. This is known as the persona designata exception. In Grollo v Palmer, the court held that non-judicial functions could be conferred on judges as persona designata if two conditions are met: 1. 2. A non-judicial function that is not incidental to the judicial powers, cannot be conferred upon a judge without their consent; and No function can be conferred that is incompatible with: a. The Judges performance of their judicial powers; or b. The judiciarys discharge of its responsibilities as an institution exercising judicial power.

It has been suggested that the second condition may arise when: Performance of judicial functions are hindered by the non-judicial functions; The performance of non-judicial functions may compromise the capacity of the Judge to perform judicial functions with integrity - this is an objective test; The non-judicial function might diminish the public confidence in the integrity of the judiciary or in the capacity of a single judge.

If the integrity and independence of the federal judiciary are compromised, or public confidence in the federal judiciary is prescribed by such a conferral, the conferral may be incompatible with the holding of federal judicial office, and be found unconstitutional for breach of Boilmakers principles.

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Limitations In Grollos case, the High Court elicited two important limits to the persona designata exception: 1. 2. Non-judicial functions of this kind cannot be conferred without the judges consent; and No function can be conferred that is incompatible with the judges performance of his or her judicial functions or with the proper discharge by the judiciary of its responsibilities as an institution exercising judicial power.

It was held in Grollo v Palmer that the incompatibility condition may arise in a number of different ways. 1. 2. 3. Incompatibility might consist in so permanent and complete a commitment to the performance of non-judicial functions by a Judge that the further performance of substantial judicial functions by that Judge is not practicable; It might consist in the performance of non-judicial functions of such a nature that the capacity of the Judge to perform his or her judicial functions with integrity is [objectively] compromised or impaired; or It might consist in the performance of non-judicial functions of such a nature that public confidence in the integrity of the judiciary as an institution or in the capacity of the individual Judge to perform his or her judicial functions with integrity is diminished.

APPLICATION OF GROLLO In Grollo, the power to issue phone-tap warrants was held to be a non-judicial function, but each judge voluntarily accepted the power. In Wilson, a Federal Court Judge was appointed to report on an inquiry into the Hindmarsh Bridge. The fact that the Judge was required to report to the minister may indicate to the public that the judge was part of, or subservient to the executive. Kable Kable was a man that had been convicted of a serious assault and had threatened to kill everyone who had testified against him The NSW government was worried about letting him out so they passed a law that stated its purpose was to provide for the continued detention of Kable The Act specifically named Kable and provided that the Attorney could apply for further preventive detention of a year which Kable could defend against The court held that this was a breach of the Grollo v Palmer principle because the task given to the judge crossed over to doing the executives will The State Parliament could exercise the power itself or give it to a non-judicial body, but not to a judicial body that had Federal judicial functions

Wilsons Case This case held that the appointment of Federal Court judge to handle a controversial inquiry into the Hindmarsh Bridge scandal involving secret womens business was invalid because the judges independence was questionable Federal Minister appointed a Federal Court judge to conduct a public inquiry and prepare a report pursuant to Federal Aboriginal heritage protection legislation The minister would then consider the report and decide whether the report should be implemented Whether such a nomination could lawfully be made = q 1 Whether the functions assigned to the judge were incompatible with the appointees judicial office HELD separation of judicial functions from the political functions of government is not so rigid as to preclude the conferring on a Ch III judge with the judges consent of certain kinds of non-judicial powers Difficult question is determining the dividing line b/n the kinds of non-judicial powers that can and cannot be conferred

North Australian Aboriginal Legal Aid Service v Bradley Bradley appointed Chief Magistrate of NT with salary determined for 2 years Section 6 of the Magistrates Act (NT) allows that a Chief Magistrate will be appointed in accordance with ss 4 and 5 of that Act and that they will be allowed remuneration and allowances on such terms and conditions as will be determined from time to time by the Administrator The NAALAS contended that this grant of salary was invalid as not in accordance with s 6 of the Act and that the appointment was invalid Bradley took no part in the proceedings, NT was the main defendant HELD any court capable of exercising judicial power must be and appear to be independent and impartial in exercise of judicial functions due to constitutional scheme of Chapter III Magistrates Act (NT) read in such a way that a magistrates salary could not be decreased during his term of office Extended Kable doctrine to all courts, right down to Magistrates courts 55 Lina Terresa Bui

Joint judgment of McHugh, Gummow, Kirby, Hayne, Callinan and Heydon JJ (Gleeson CJ agreed for different, but similar reasons): Remuneration of a value for only 2 years does not make Bradley dependent on executive action to retain his position, his tenure is dependent effectively on good behavior under other provisions of the Magistrates Act The arrangements under s6 would not lead an ordinary and reasonable member of the community to consider that the judiciary was not impartial and was influenced by the executive government Appeal by NAALAS dismissed

Baker v R Baker was convicted of murder and sentenced to life with recommendation for non-release, back when life was mandatory There was a subsequent amendment to make life a maximum sentence only, and provision for lifers to apply for reconsideration There was also a further amendment to limit the latter right to reconsideration where the prisoners (like Baker and a few others) were subject to non-release recommendations HELD by 6:1 majority that the Act would be valid even if it was a Commonwealth Act, so clearly within state power

Fardon v Attorney-General (Qld) An Act providing for continuing detention of sex offenders was passed by Qld Parliament It was much more carefully drafted than Act in Kable The High Court held that it was valid (6:1) The reasoning for this was there was nothing to suggest that the Supreme Court is a mere instrument of government policy The court held that the determination of future risk is normal part of judicial power in (e.g. sentencing, custody and decisions). If a sentence was for prevention rather than punishment, then that is part of normal sentencing.

CHAMELEON PRINCIPLE

Where the court could be exercising a function that could be described as either judicial or non-judicial, they are expected to exercise it judicially (Bayer v Bayer Pharma).

EXTENT OF THE FEDERAL JURISDICTION

JURISDICTION OF THE HIGH COURT

APPELLATE JURISDICTION Section 73 of the Constitution outlines the appellate jurisdiction of the High Court. It gives appellate jurisdiction to the High Court but allows Parliament to regulate some matters. The High Court can hear appeals from judgments, decrees, orders and sentences of original jurisdiction of the High Court other federal courts, or a court exercising federal jurisdiction Supreme Court of a State (or a State court from which appeal lay to Privy Council in 1901, or Interstate Courts on matters of law) This gives Australia a unified common law and unlike the American System where the Supreme Court may only hear constitutional matters. In effect there exist 50 different common law systems in the US. The Commonwealth Parliament can prescribe exceptions and regulations as to who may appeal to the High Court (Collins v Charles Marshall), but not as to appeals from Supreme Court where the appeal lay to the Privy Council on 1/1/1901. ORIGINAL JURISDICTION The original jurisdiction is derived from ss 75 and 76. Section 75 provides that the High Court shall have original jurisdiction in all matters (i) arising under any treaty; (ii) affecting consuls or other representatives of other countries; 56 Lina Terresa Bui

(iii) in which the Commonwealth, or a person suing or being sued on behalf of the Commonwealth, is a party; (iv) between States, or between residents of different States, or between a State and a resident of another State; (v) in which a writ of mandamus or prohibition or an injunction is sought against an officer of the Commonwealth. Section 76 provides that the Parliament may make laws conferring original jurisdiction on the High Court in any matter (i) (ii) (iii) (iv) arising under this Constitution, or involving its interpretation; arising under any laws made by the Parliament; of Admiralty and maritime jurisdiction; relating to the same subject-matter claimed under the laws of different States.

However, the Judiciary Act also gives it power to remit to matters other than s 75(v) (i.e. administrative matters) to other courts, and also gives it s 76(i) jurisdiction. The High Court is also the Court of Disputed Returns under Constitutions s 47, and it has similar function for referenda and elections. Therefore the High Court only effectively now exercises original jurisdiction over only in Constitutional (s 76(1)), administrative (s 75(5)) and electoral matters. This means that in effect it is simply now a Constitutional (and admin and electoral) court and an ultimate appellate court.

JURISDICTION OF OTHER COURTS

FEDERAL COURT The Federal Court may be original jurisdiction in matters in s 76. It currently has jurisdiction over most Commonwealth Acts (s 76(ii)). There are exceptions for the Family Law Act and Family Court. Therefore federal jurisdiction and federal judicial power are limited to the 9 matters found in s 75 and s 76. Neither the States nor the Commonwealth can use cross-vesting legislation to vest Federal courts with State jurisdiction (Re Wakim; Ex parte McNally). Federal jurisdiction is also limited by the concept of a matter. A matter does not mean any dispute, it means a justifiable issue between parties, which doesnt include advisory opinions on the validity of an Act (Re Judiciary and Navigation Acts). This means that Parliament may not bring an Act to the High Court before it was legislated to seek an opinion of whether it was valid. As to the 9 matters which the courts have jurisdiction, s 78 sets out that Parliament may legislate a right to sue the Commonwealth or State. This is the source of the power of s 64 of the Judiciary Act.

JURISDICTION OVER CONSTITUTIONAL MATTERS

This is part of the federal jurisdiction (s 76(i)). It is granted to the High Court (Judiciary Act, s 30), and all State courts (Judiciary Act, s 39(2)). Even if this jurisdiction was not vested expressly by an Act, it is arguably a logical part of every superior courts jurisdiction. However, when a constitutional issue arises the court must not proceed until the Attorney-Generals have been advised and have had reasonable time to reply (Judiciary Act, s 78B). The Attorney-Generals also have a right to intervene (Judiciary Act, s 78A). The High Court may remove a matter into the High Court on application of a party and shall remove it on application of an Attorney-General (Judiciary Act, s 40).

LAWS REGULATING EXERCISE OF FEDERAL JURISDICTION

It is clear that the Parliament can enact laws which are incidental to the execution of judicial power (Nicholas v R). As such, laws have been held valid when they relate to: reverse burden of proof for defences (Milicevic v Campbell (1975)) admissibility of evidence (Rodway v The Queen (1990)), even directing courts to ignore complicity of police in a controlled operation to catch drug dealers (Nicholas v R [1998] HC 9).

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LIMITS

In Nicholas, Guardron J held that a court could not be asked to operate contrary to its essential character as a judicial body and therefore must ensure: equality before the law, impartiality and the appearance of impartiality, the right of a party to meet the case made against him or her, the independent determination of the matter in controversy by application of the law to facts determined in accordance with rules and procedures which truly permit the facts to be ascertained and, in the case of criminal proceedings, the determination of guilt or innocence by means of a fair trial according to law. It means, moreover, that a court cannot be required or authorised to proceed in any manner which involves an abuse of process, which would render its proceedings inefficacious, or which brings or tends to bring the administration of justice into disrepute.

The statement in Nicholas was affirmed in Bass v Permanent Trustee, but has not been used to invalidate a law. APPLICATION The Nicholas test was relied upon when seeking to undermine the Act in Thomas v Mowbray, where the Court found that the powers conferred upon the Court to make ex parte orders were valid provided that a prompt contested hearing was contemplated. REGULATION OF SPECIFIC SECTIONS OF CONSTITUTION Section 73 - appellate jurisdiction of the High Court The Parliament can prescribe exceptions and regulations on the appellate jurisdiction of the High Court to hear appeals from judgments, decrees, orders and sentences, except in relation to appeals from supreme courts where an appeal lay to the Privy Council at the start of 1901. Section 75(v) - jurisdiction over Commonwealth officers The Parliament cannot limit the scope that the High Court has under s 75 (v) to order writs against an officer of the commonwealth (R v CC∾ Ex parte AEU). In Abebe v Commonwealth, the act gave jurisdiction to the FCA but limited the grounds for appeal to the High Court. This was held to be invalid as it limited the HCs jurisdiction. In Plaintiff S157 v Commonwealth, the court held that an act that purported to make decisions unreviewable by any court would be invalid if it included decisions made by jurisdictional error. However, the court read the section down, so as to mean a bad decision was not a decision at all, meaning that the law would not apply to them.

VESTING FEDERAL POWER IN STATE COURTS

When vesting Federal Judicial Power in State Courts, the Commonwealth must generally take the courts as they find them (Le Mesurier v Connor). In Russell v Russell, the court held that the Commonwealth could require the justices not to wear robes, but could not require that they sit in a closed court. In HCF v Commonwealth, the State rules provided that Master exercised some of the power of the Court. It was held that if the State law has given judicial power to a non-judicial power, the Commonwealth can pick that up as part of the Courts power.

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FREEDOM
OF

INTERSTATE
INTERCOURSE

59 Lina Terresa Bui

RELEVANT HEAD OF POWER

s92 On the imposition of Uniform Duties of Customs, trade, commerce and Intercourse among States, whether by means of internal carriage or ocean navigation shall be absolutely free.

INTRODUCTION
The freedom of intercourse provision in s 92 protects the right to travel and communicate between states. The guarantee does not guarantee free travel with Australia, only movement between states (Gratwick v Johnson). There is no requirement that the law restricting intercourse be protectionist (Cole v Whitfield).

WHAT IS INTERCOURSE?
The term intercourse literally means communication but was applied in the early cases to right of travel. In R v Smithers; ex parte Benson, a law that prevented persons who had served more than 12 months in jail in the past 3 years from entering NSW was held to be invalid. R v Smithers; Ex parte Benson A NSW law made it a criminal offence for persons convicted and sentenced to a term of imprisonment of one year or longer to enter within 3 years after completing their term of imprisonment Benson was charged with the offence upon entering NSW 3 weeks after his release from a Victorian Prison where he had served 10 months for vagrancy HC held that NSW could not prevent through the Influx of Criminals Prevention Act persons resident in another State entering NSW within 3 years of completing a sentence of imprisonment. Isaacs J Borders of the States were not to operate as barriers to free movement in the Commonwealth HELD that the Act was invalid.

In Gratwick v Johnson, it was held that the defence power was still subject to freedom of intercourse in s 92. Gratwick v Johnson The High Court considered the constitutional validity of an order made under defence regulations which prohibited interstate travel without a permit granted by a federal agency Johnson was refused a permit on the grounds that her reasons for travel were insufficient, yet travelled to Perth from Sydney without a permit to visit her fianc High Court concluded that a Commonwealth law prohibiting unauthorised rail travel from one State to another infringed the absolute freedom of interstate intercourse guaranteed by s 92 The government cannot impose a barrier to such transit access simply because it is interstate The defence power is subject to s 92 Like in R v Smithers, while civilian travel might well be within the defence power, a regulation which is simply based on the interstateness of the journeys it assumes to control, is bad (Dixon J) As Starke observed the people of Australia are free to pass to and fro among the States without burden, or hindrance of restriction

SCOPE OF THE POWER

In Cole v Whitfield the court noted that freedom of intercourse given under s 92 may have a wider scope than the freedom of trade and commerce. The suggestion is that there is little room for dilution of this freedom for reasons of public interest and that discrimination in a protectionist sense was not required. However this was left open to some qualifications. In Nationwide News, Brennan J considered s 92 in terms of ideas. His Honour held that ideas cannot move but the expression of them can and this can attract s 92 protection. Furthermore, he found that discrimination is not needed for a breach of this second limb. Brennan J also offered a framework to go by when assessing a law, which attempts to burden interstate movement. 60 Lina Terresa Bui

1. 2.

A law enacted chiefly for the purpose of burdening interstate movement is primia facie bad. The purpose of the law can be found by looking to the laws purpose or effect A law for some other purpose that imposes an incidental burden is ok provided that the law is appropriate and adapted to that other purpose.

Brennan J also stated that an exception was where the law was protecting the state from injury. In ACTV Dawson J also took a similar approach to Brennan J but used the language of objects rather than purpose and talked about appropriateness and proportionality of the law. Secondly, also seemed to view the exceptions as being caught within the framework in limb 1. In AMS v AIF, the court interpreted the same wording of s 92. Here it was held that the law must restrict interstate intercourse no more than is reasonably required. The mother wanted to move the child from Perth to Darwin and the father objected. The father obtained an order under WA Family Law legislation to prevent the move. Gleeson CJ, McHugh and Gummow JJ noted that the relevant act and order didnt expressly prohibit interstate movement, it merely stated that the mother may not change address. But it did hinder interstate movement in its operation. They said the question then becomes whether the impediment was greater than reasonably required to achieve the objectives of the WA Act.

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FREEDOM OF INTERSTATE TRADE AND COMMERCE

EXAM SUMMARY In order to breach s 92 the following must be established: 1. Discriminatory burden on interstate trade for the purpose of protecting intrastate trade Cole v Whitfield Burden can be found in legal form of legislation or practical effect (Cole) Trade and commerce has same meaning as under s 51(i) (James v Commonwealth) 2. Does the State or Commonwealth have a defence? Cannot equalise the playing field to remove disadvantage caused by geography or other state laws (Bath v Alston Holdings) If small burden, may be valid as a reasonable regulation provided the burden is only incidental and not disproportionate to a legitimate end (Castlemaine Tooheys v SA)
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RELEVANT HEAD OF POWER

Section 92 of the Constitution provides that On the imposition of uniform duties of customs, trade, commerce, and intercourse among the States, whether by means of internal carriage or ocean navigation, shall be absolutely free.

BACKGROUND
Section 92 was intended to create a free trade area and to deny the Commonwealth and States the power to prevent or obstruct the free movement of people, goods and communications across state boundaries. It was to stop states from introducing state protectionist laws by indirect means. Section 92 demands that there be an equality of treatment between interstate and intrastate trade, as the purpose of the section was to eliminate interstate tariffs, or border duties. On that basis, s 92 prohibits legislative measures that impose discriminatory protectionist burdens on interstate trade and commerce. TRADE AND COMMERCE Trade and commerce has the same general meaning that applies in s 51(i). Stated in St George County Council that buying and selling are at the very heart of trade and there is no essential element of profit required. Trade has been held to include both: The act of transportation for reward (ANA case) The preliminary communing, negotiation and bargain (W & A McArthur v Queensland). However, any manufacturing process has been held as not in itself trade but preparatory to it (Grannall v Marrickville Margarine).

BEFORE COLE V WHITFIELD

Prior to the decision of Cole v Whitfield, the Courts adopted the individual rights theory which conferred upon traders rights of protection. Laws which impeded interstate trade were often struck down, even where they applied equally to intrastate trade. In the Bank Nationalisation case the Privy Council stated two qualifications to the freedom guaranteed by the section, which became the basis of most of the case law for the next 39 years: That reasonable regulation of trade is compatible with its absolute freedom That s 92 is violated when a law restricts the trade directly and immediately as distinct from creating some indirect and consequential impediment which may be fairly be regarded as remove

WAS THE REGULATION REASONABLE? If some aspect of interstate trade (for example, road transport) was made subject to licensing requirements, the granting of any wide discretion to the licensing authority would violate s 92 of the Constitution (Hughes and Vale Pty Ltd v New South Wales (No 1)). The imposition of a tax at a reasonable rate, so as to recover the cost of road repairs, was reasonable regulation (Armstrong v Victoria (No 2)). State consumer protection laws were reasonable regulation (Samuels v Readers Digest Association Pty Ltd). Commonwealth trade practices laws were reasonable regulation (Mikasa (NSW) Pty Ltd v Festival Stores). However, when the High Court had to decide whether laws imposing agricultural marketing schemes were "reasonable", it was obviously open to differing views depending on the Judge's political instincts, and the Court split widely in many cases in the early 1980's (Uebergang v Australian Wheat Board). DIRECT RESTRICTIONS Under Dixon CJ, the High Court tended to interpret whether a law directly interfered with interstate trade by looking at the text of the law to see whether it took a fact or event or thing itself forming part of trade, commerce or intercourse and proceeded by 63 Lina Terresa Bui

reference thereto ... to impose a restriction, a burden or a liability, without considering economic effects. This became known as the criterion of operation test (Hospital Provident Fund Pty Ltd v Victoria). However, Barwick CJ preferred to look as well at economic effects on trade, and persuaded a majority of the High Court to take that approach (North Eastern Dairy Co Ltd v Dairy Industry Authority of New South Wales).

COLE V WHITFIELD
The decision of Cole v Whitfield swept aside all the previous confusion governing s 92. The High Court unanimously held that s 92 guaranteed interstate trade and commerce against discriminatory burdens of a protectionist kind. That is, the law must not discriminate interstate trade for the protection of local trade. Section 92 will prevent governments from applying non-fiscal controls such as quotas and standards, which discriminate against interstate trade so as to protect intrastate trade against competition. The concept of discrimination in this context will include factual discrimination, as well as formal or legal discrimination. The decision had the following effects on both the Commonwealth and State law: Commonwealth laws Commonwealth law under s 51(i) will not ordinarily be discriminatory if they apply to all transactions of a given kind within the reach of Parliament. However, if the law applies only to certain transactions or only to different parts of States, then it may be discriminatory.

State laws The constitutionality of State laws is resolved by means of a consideration of the nature of the impugned law. If it applies to all trade and commerce, inter-State and intra-State alike, it is less likely to be protectionist than if there is discrimination appearing on the face of the law. But where the law in effect, if not in form, discriminates in favour of intra-State trade, it will nevertheless offend against s 92 if the discrimination is of a protectionist character. A law which has as its real object the prescription of a standard for a product or a service or a norm of commercial conduct will not ordinarily be grounded in protectionism and will not be prohibited by s 92.

Cole v Whitfield Tasmanian crayfish regulations (drafted with no regard to the origin of the crayfish, perfectly non-discriminatory) set a minimum size for the sale of crayfish smaller size than SA regulations required Reg 31(1)(d) of the Sea Fisheries Regulations (Tas) declared that no person should have in their possession or under their control male crayfish below 11 in size or female crayfish below 10.5 whether or not the fish taken from State fishing waters. Thus some imports of crayfish which were legal in SA were illegal in Tas W managed a business in Tas of crayfish farming which purchased and sold live crayfish. W bought live crayfish from a SA fishing business. All were above the minimum size prescribed by SA legislation but below that in Tasmanian regs. W subsequently charged with possession of undersized crayfish. Importer argued that this was interference with freedom of interstate trade as similar restrictions did not apply in SA Tasmania defended charge and when notices of constitutional challenge sent to all A-Gs, all other States and Cth joined action and argued that law was valid In defence of the regulations it was argued that the protection of the Tasmania crayfish, a scarce natural resource was warranted. HELD that s 92 is intended to catch only those laws which subject interstate trade to a discriminatory burden of a protectionist nature Whether a law is discriminatory/protectionist can be judged on the face of the law or by its practical effect (stops an evasion on a technical argument) Prohibited burdens include quotas as well as discriminatory taxes Section applies to both Cth and State law, but Cth less likely to impose a discriminative burden (and Cth laws could breach it passed under heads of power other than 51(i)) A Cth-state scheme of uniform legislative action would be unlikely to breach s92 Held the law was not discriminatory on its face or in its practical effect The court noted that that the regulation applied alike to crayfish caught in Tas and those that are imported hence there was no discriminatory protectionist purpose..on the face. 64 Lina Terresa Bui

General hallmark of measures which contravene s 92 is their effect: as discriminating against interstate trade and commerce in a protectionist sense The regulations did not have the effect of providing intrastate traders with a competitive advantage over interstate traders, or protecting the trade of crayfish within Tas Even if there was some small discriminatory effect, it was probably a reasonable regulation; they were able to buy from any State so long as the requirement was satisfied. SA would just have to put some crayfish into the SA-only box and be selective about what it imported into Tas

IMPOSITION OF DISCRIMINATORY BURDEN

Discrimination (Cole v Whitfield) Discrimination is a departure from equality of treatment The concept of discrimination in its application to inter-State trade and commerce necessarily embraces factual discrimination as well as legal operation A law will discriminate against interstate trade or commerce if the law on its face subjects that trade or commerce to a disability or disadvantage or if the factual operation of the law produces that result

Protectionism (Cole v Whitfield) Protectionism means protection of domestic industries against foreign competition. It makes importing and dealing with imports difficult or impossible. This can be achieved by, for example o o o tariffs that increase the price of foreign goods differential rates or licensing schemes interstate border customs

IS THERE A BURDEN?

A beneficial law could be a burden (Vacuum Oil v Queensland). However it is not enough that the law may look like a burden - it must be aimed to discriminate between interstate trade in a protectionist nature (Cole v Whitfield). Vacuum Oil v Qld (1934) Motor Spirit Vendors Act 1933 (Qld) required anyone who buys petrol for sale must also buy some power alcohol as well. Fact was that no petrol was commercially produced in Qld and power alcohol was a product peculiar to Qld. HELD that it was a breach of s 92 because the practical effect was that it was a local trade promotion law promoting power alcohol at the expense of inter-state trade in petrol. Dixon and Evatt JJ suggested that s 92 could be breached by placing a burden on the outside State trader, as well as by selecting a benefit that has been bestowed on an intrastate trader. Even though the old tests were applied, the outcome would be the same if the test in Cole v Whitfield had been applied.

In Cole v Whitfield it was held that the discrimination should be judged on the face of the law or by its practical effect. Therefore in our case it is necessary to consider the form and effect of the law.

DOES IT DISCRIMINATE AGAINST INTERSTATE TRADE OR COMMERCE?

A law may be discriminatory on its face, or by its factual operation (Cole v Whitfield). Therefore, it is necessary to examine: 1. 2. Whether the law on its face is discriminatory; Where the law is not on its face discriminatory, whether its application imposes a burden of a discriminatory kind.

Commonwealth laws under s 51(i) will not ordinarily be discriminatory if they apply to all transactions of a given kind within the reach of Parliament, although it may (Cole v Whitfield). IF there is no distinction: Our facts are similar to that in Cole v Whitfield, in that no distinction has been made between anyone and the law applies equally in this state as it would anywhere else. Therefore, the form of [section or provision in question] supports the view that there is no discriminatory protectionist purpose. 65 Lina Terresa Bui

IF there is a distinction: On our facts, the [section or relevant provision] distinguishes between parties and locations. Therefore this structure supports the view that the law has a discriminatory protectionist purpose. IF compulsory acquisition scheme: In this case the scheme enacted is a compulsory acquisition scheme. The constitutional validity of such a scheme was considered in Barley Marketing Board v Norman. In that case all barley grown in NSW was vested in a board and any private contracts for sale were void. It was held that mere discrimination was not sufficient and as the scheme only applied to NSW growers it did not breach s92. However it was stated that if the acquisition amounted to a restricting on import that favoured NSW growers then there would be a breach. Barley Marketing Board (NSW) v Norman The New South Wales barley marketing scheme, established under the Marketing of Primary Products Act 1983 (NSW), operated to vest compulsorily in the States Barley Marketing Board all barley grown in New South Wales (s 56 of the Act) and to void all contracts for the sale of barley by New South Wales producers (s 58 of the Act) All barley had to be sold to the Board, otherwise, it was void The powers and functions of the Board included marketing and making arrangements for the establishment of approved grades, the appointment of agents and maximising returns to New South Wales growers In November 1988, a barley grower in New South Wales agreed to sell barley then growing on his land to a maltster in Victoria and to deliver it to the maltster Issue whether ss 56 and 58 of the Act were incompatible with s 92 of the Constitution. HELD that the barley marketing scheme did not impose a discriminatory burden of a protectionist kind upon interstate trade and commerce. The scheme did not contravene s 92. Even though the purpose of the Act was to protect the barley industry in New South Wales, the Act did not do so by discriminating against commercial interests in other states The legislation was not shown to restrict the supply of barley to out-of-state purchasers, nor to impose a greater burden on interstate traders than the burden on intrastate traders The Act neither resulted in the exclusion of one group but not the other from any market nor did it lead to any difference in the price of product to maltsters in the two States.

IF fee only charged if goods obtained from another State: Section 92 will be breached where a fee is only charged if the goods are obtained from another state (Bath v Alston Holdings). Bath v Alston Holdings Law requiring retailer to have license calculated as 25% of product sold, except that which was purchased from Victorian suppliers. The Defendant was unlicensed and purchased tobacco from Queensland When charged, used s 92 as a defense. HELD by a 4:3 majority that the act breached s 92 because it imposed the license fee solely with reference to the state the tobacco was purchased from. This constituted a burden of a protectionist kind.

DOES LAW DISCRIMINATE IN PROTECTIONIST NATURE?

Whether the burden is of a protectionist kind is a matter of degree. Where the law is in the pursuit of an object that is not protectionist (e.g. prescribing quality standards), it will generally not impose a protectionist burden. However, where the pursuance of the non-protectionist object is to an extent that causes it to be characterized as protectionist, s 92 will apply (Cole v Whitfield). As such, the court applies a test similar to whether the law was reasonably appropriate and adapted to its purpose (Castlemaine Tooheys v SA).

LEVEL PLAYING FIELD DEFENCE

The imposition of an equalizing tax on interstate products, so that they lose a competitive advantage usually enjoyed because of a lower tax rate in their home state, will contravene s 92. 66 Lina Terresa Bui

Bath v Alston Holdings Case concerned provisions in Victorian legislation requiring that persons selling tobacco brought in from other States be licensed. The cost of the licence was a nominal amount, plus an amount equal to 25% of the value of the tobacco sold by the applicant in the course of tobacco retailing in the relevant period other than tobacco purchased in Victoria from the holder of a wholesale tobacco merchants licence. The defendant imported tobacco from Queensland and sold it in Victoria, and the plaintiff sought an injunction in the Supreme Court of Victoria to restrain this unlicensed activity. The defendant argued that the regulation infringed s 92; that by requiring Victorian retailers who purchased their tobacco from interstate wholesalers to pay a higher licence fee, the law was discriminatory. The defendant said the law was also protectionist because it conferred an advantage on those holding Victorian licenses. HELD by High Court that the mere requirement that a person be licensed in order to sell tobacco brought in from another State did not infringe s 92. However, the HC differed in their treatment of the effect of the provisions which imposed a different fee in respect of tobacco purchased from interstate wholesalers. Mason CJ, Brennan, Deane and Gaudron JJ concluded that the provisions were discriminatory and protectionist in form and in substance by distinguishing tobacco purchased in Victoria from a licensed wholesaler from tobacco purchased from other interstate wholesalers and in substance, by protecting local wholesalers from competition with interstate wholesalers. The majority stressed that the regulation infringed s 92 because it operated at the wholesale level - the point of supply of the tobacco to the Victorian retail market.

LEGITIMATE PURPOSE EXCEPTION

It was indicated in Cole v Whitfield that even if the regulations did impose a small burden, it was in pursuit of a legitimate purpose, this being protection of the environment and crayfish preservation. This exception was confirmed in the Castlemaine Tooheys, and more recently reiterated in Betfair. In Castlemaine Tooheys, it was held tat laws which are appropriate and adapted to the resolution of the problem will be valid under s 92, as long as the burden on interstate trade is: 1. 2. Incidental; and Not disproportionate to the achievement of the laws objectives.

Castlemaine Tooheys v SA (1990) A SA Act made deposits/refunds on bottles compulsory and imposed a higher deposit on non-refillable bottles than on refillable bottles purpose to encourage recycling It was also compulsory for retailers to accept non-refillable bottles Castlemaine Tooheys and Bond (CT&B) who had their breweries in other States were the ones that used non-refillable and SA Brewery (SAB) used refillable bottles Castlemaine argued that this scheme was discriminatory and protectionist, on the basis that: o the different return rates for the different types of beer bottles discriminated against interstate producers who bottled their beer in non-refillable bottles and o that the requirement that suppliers make their own arrangements to collect their bottles imposed a significant burden on interstate traders in a price-sensitive commodity. Evidence was led by the Plaintiff that the object and effect of the legislation was to disadvantage trade in beer in nonrefillable bottles. SAB had lobbied for stronger Act. Was the new Act passed to help the environment or to help the local manufacturer, or was it a mixture of both? SA Govt argued that the objectives of the legislation were the control of the litter and the preservation of natural gas resources. The legislation applied to both local and interstate producers HELD not to be discriminatory between states on its face, but discriminatory because of the different rates of refund and the collection requirements imposed on interstate traders who used non-refillable bottles. The practical effect was to prevent the plaintiffs incursion into the SA beer market. The legislation was also protectionist because it gave SA brewers a competitive advantage by raising the price and production costs of the plaintiff. However legislation which discriminates against interstate traders may be valid if the burdens imposed on interstate trade are a necessary means for achieving the conservation of the natural resources or other public object which the legislation seek to protect or promote. Any purpose which is not protection of local industry is a legitimate purpose 67 Lina Terresa Bui

Where there is such a rational ground for action by the Legislature, HCA said that laws which are appropriate and adapted to the resolution of the problem will be valid under s 92, as long as a burden on interstate trade is: Incidental to the legitimate purpose; and Not disproportionate to the achievement of the laws objects. Court weighed social and economic factors to determine whether discrimination justified. SA admitted that a lower difference in levels of deposit would achieve equal returns of fillable and non-refillable bottles, therefore it was not a proportional law to the purpose that they were using to justify it ie. The state legislation went too far and did not stop the evil it attempted to control. They held that there was no justification for the compulsion in terms of litter control (the system was not preserving the SA natural gas because the wasteful bottles were manufactured outside the State). Therefore, although the sections of the Act relating to non-refillable bottles were directed to a good purpose, they were disproportionate and thus invalid. A law prohibiting the manufacture of non-refillable bottles would be effective in achieving States objective and would not have imposed a serious competitive disadvantage on the interstate.

IF environmental purpose: Here the incidental purpose is the protection of the [environment]. Similarly to Castlemaine Tooheys, it was argued that the desired purpose of the legislation was to protect the environment by conservation of the natural resources. The court held that the law was not reserving SA natural resources as the bottles where manufactured elsewhere. It was also stated there was no justification for compulsion in terms of litter control. IF racing industry purpose: Here the incidental purpose is the [protection or preservation] of the integrity of the racing industry. In Betfair, it was held that the WA prohibitions were not necessary for the protection or preservation of the integrity of the racing industry as they were not proportionate, appropriate or adapted to the propounded legislative object. IF other reason mentioned in Castlemaine: The Court in Castlemaine Tooheys provided some purposes which may warrant a burden if it is not disproportionate to the burden: Conservation of a natural resource or Public object @ 468 Social or economic problems @ 472 Safety, health & wellbeing @ 469

NOT DISPROPORTIONATE TO THE ACHIEVEMENT OF THE LAWS OBJECTIVES

In Betfair, the court said this criterion necessarily involves the existence of a proportionality between, on the one hand, the differential burden imposed on an out-of-State producer, when compared with the provision of in-State producers, and, on the other hand, such competitively neutral objectives as it is claimed the law is designed to achieve that is, a criterion of reasonable necessity. To work out proportionality, the court said one must consider the constraint upon market forces operating within the national economy by legal barriers which protected the in-State operator against the out-of-State operator. Betfair Pty Ltd v WA [2008] 11 Betfair held a licence under Tasmanian law to operate a betting exchange, by which bets may be laid on a horse or a team losing as well as winning. Customers from all over Australia could place bets by telephone or internet. Between 28 August 2006 and 24 January 2007, Mr Erceg, who lived in Western Australia, used the internet to place bets with Betfair on horse and greyhound races and other sporting events in Western Australia and elsewhere. Western Australias Betting and Racing Legislation Amendment Act 2007, made betting with a betting exchange an offence. In all other States, Betfair was authorised to conduct its operations by its being licensed in one State (Tasmania). Betfair and Mr Erceg, with the support of Tasmania, began proceedings in the High Court to challenge the validity of these amendments, which they claimed were contrary to s 92 of the Constitution. In particular, Betfair and Mr Erceg challenged two provisions introduced into the Betting Control Act: o Section 24(1aa) stated that a person who bets through a betting exchange commits an offence attracting a penalty of $10,000 or two years imprisonment or both. o Section 27D(1) provided that publishing or making available a WA race field without approval attracted a fine of $5000. HELD that the two sections were unconstitutional as they imposed discriminatory and protectionist burdens on interstate trade. The Court noted that in Castlemaine Tooheys it applied the appropriate and adapted criterion to the relevant legislation to ensure that its impact on interstate trade was incidental and not disproportionate to the achievement of its objective. 68 Lina Terresa Bui

This criterion necessarily involves the existence of a proportionality between, on the one hand, the differential burden imposed on an out-of-State producer, when compared with the provision of in-State producers, and, on the other hand, such competitively neutral objectives as it is claimed the law is designed to achieve that is, a criterion of reasonable necessity. The WA prohibitions were not necessary for the protection or preservation of the integrity of the racing industry they were not proportionate, appropriate or adapted to the propounded legislative object. What was proportional involved a consideration of the constraint upon market forces operating within the national economy by legal barriers which protected the in-State operator against the out-of-State operator. The prohibitions resulted in an unfair commercial restraint. The inhibition to competition presented by geographic separation of the States, between rival suppliers and between supplier and customer, were reduced by the accessibility of the internet and the ease of its use.

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FREEDOM

OF RELIGION

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RELEVANT PROVISION
Section 116 The Commonwealth shall not make any law for establishing any religion, or for imposing any religious observance, or for prohibiting the free exercise of any religion, and no religious test shall be required as a qualification for any office or public trust under the Commonwealth.

INTRODUCTION
The right in s 116 has four distinct aspects: 1. 2. 3. 4. The Commonwealth shall not make any law for establishing any religion (No Establishment Clause) The Commonwealth shall not make any law for imposing any religion of service The Commonwealth shall not make any law for prohibiting the free exercise of religion (Free Exercise of Religion Guarantee) No religion test is required as a qualification for any office or public trust under the Commonwealth.

These operate as a limit on the exercise of Commonwealth power, none have had a significant effect due to the formalist interpretation adopted by the High Court. Most cases have focused upon the establishment and the free exercise aspects of s 116, and the freedom these could afford has been consistently limited by the court. Section 116 has no application to the States (Grace Bible Church v Reedman). However, s 116 does apply to Australian Territories (Lamshed v Lake).

APPLICATION TO CONSTITUTION

When applying s 116 to the Constitution, it is necessary to consider the following: 1. 2. 3. 4. Is a law of the Commonwealth involved? Is a religion involved? Has a religion been established? Has the free exercise of religion been interfered with?

IS A RELIGION INVOLVED?
The concept of religion has not been defined in the leading cases. In Jehovahs Witnesses, the mainstream churches gave evidence that the Jehovahs Witnesses were not Christians but the Court accepted without discussion that they followed a primitive form of Christianity. Another leading case on the meaning of the term religion is Church of the New Faith v Commissioner of Pay-Roll Tax. Church of the New Faith v Commissioner of Pay-Roll Tax Question whether the Church of the New Faith, or Scientology, was exempt from liability under State pay-roll tax legislation on the basis that it was a religion. Mason ACJ and Brennan J acknowledged that the definition of religion is critical to the scope of the freedom. Their Honours said that any definition should be flexible enough to accommodate minority groups and new religious beliefs. However, it would be inappropriate to adopt a definition which allowed any group who asserted their belief to be religious to enjoy the protection of the provisions. Their Honours concluded that the criteria of religion are twofold: 1. Belief in a supernatural Being, Thing or Principle; and 2. The acceptance of canons of conduct in order to give effect to that belief, though canons of conduct which offend against the ordinary laws outside the area of any immunity, privilege or right conferred on the grounds of religion. Wilson and Deane JJ approached the task of defining the term religion with caution, and stated the following 5 indicia: 1. Belief in the supernatural; belief that reality extends beyond that which is capable of perception by the senses; 2. The ideas relate to mans nature and place in the universe and his relation to things supernatural; 71 Lina Terresa Bui

The ideas are accepted by adherents as requiring or encouraging them to observe particular standards or codes of conduct or to participate in specific practices having supernatural significance; 4. However loosely knit and varying in beliefs and practices adherents may be, they constitute an identifiable group or identifiable groups; and 5. The adherents themselves see the collection of ideas and/or practices as constituting a religion. HELD therefore the Church set up by the Scientologists was a religious body.

3.

HAS A RELIGION BEEN ESTABLISHED?

A Commonwealth law will be unconstitutional if the purpose of the law is to establish a religion. The prohibition on the establishment of any religion has been given a narrow reading by the High Court and only a very specific type of law would offend this aspect of s 116. The Commonwealth is prohibited from supporting or favoring one religion over others, to the degree that the favored religion becomes the established religion of Australia. Attorney-General (Victoria); Ex rel Black v Commonwealth (the DOGS case) The Commonwealth passed State Grants Acts which gave financial assistance to the States subject to conditions, including, in this instance, that a portion of the monies be given to non-governmental schools. Non-governmental schools are typically operated by religious groups. It was argued that the Grants Acts were laws establishing a religion in the sense that the provided financial support to these religions, or alternatively, that the laws established religions because they provided preferential sponsorship to those religions that operated schools. HELD that the legislation was constitutional because the grants law was not a law which was specifically designed to establish a religion. Rather, it was specifically designed to improve the education in Church related schools. The No Establishment Clause of s 116 is only violated in circumstances where the law is for the establishment of religion - the purpose approach. Barwick CJ - establishing a religion involved an identification of the religion with the civil authority so as to involve the citizens in a duty to maintain it. That is, the establishment of State Church or State Religion, which would involve a reciprocal relationship between the Commonwealth and the religion, owing rights and duties. Gibbs J and Stephen J - s116 only prevented the Commonwealth from making any law conferring the status of a State religion or State Church upon a particular religion or religious body. Wilson J if the Commonwealth showed preference to one religion over another, it would highlight the existence of a reciprocal relationship between the Commonwealth and would constitute the establishment of religion. But he noted that that would go much further than offering financial assistance.. In dissent, Murphy J held that any support for a religion or church would violate the No Establishment Clause.

HAS THE FREE EXERCISE OF RELIGION BEEN INTERFERED WITH?

Where a law has an overly anti-religious purpose, it will offend the free exercise aspect of s 116. Such a provision must not do more than merely inhibit religious freedom, it must demonstrate the purpose of inhibiting religious practice. The purpose test may carry a measure of proportionality as suggested by Starke J in Jehovahs Witnesses. This is the leading case on the meaning of free exercise. Jehovahs Witnesses The Jehovahs Witnesses were an association incorporated in SA occupying a place in Adelaide called a Kingdom Hall where they held meetings of a religious character. The JW proclaimed and taught publicly both orally and by means of printed books and pamphlets that the British Empire and also other organized political bodies are organs of Satan, and that members must have no part in the political affairs of the world and must not interfere in the least manner with war between nations. They must be entirely neutral and not interfere with the drafting of men of nations that go to war.. accordingly they refuse to take an oath of allegiance to the King The National Security (Subversive Associations) Regulations prohibited the advocate of doctrines which were prejudicial to the prosecution of the war in which the Commonwealth was engaged. It provided for the dissolution of associations propagating such doctrines and vested their property in the Commonwealth. The Jehovahs Witnesses challenged the constitutional validity of the regulations. HELD the regulations did not contravene s 116. 72 Lina Terresa Bui

Latham CJ noted that the free exercise of religion does not empower individuals because of their religious beliefs to break the law of the country - a person cannot be exempted from the ordinary civil or criminal law of the grounds of their religion.

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GRANTS POWER

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RELEVANT HEAD OF POWER

s 96. During a period of ten years after the establishment of the Commonwealth and thereafter until the Parliament otherwise provides, the Parliament may grant financial assistance to any State on such terms and conditions as the Parliament thinks fit.

INTRODUCTION
Section 96 was included to safeguard the states from financial disaster, immediately after Federation. The Commonwealth now uses the grants power to deal with a variety of state activity, such as education, health, housing and transport. The power appears to have originally intended to be transitional, however it has now become an entrenched aspect of the centralisation of revenue-raising by the Commonwealth government. The issue here is whether the Commonwealth can rely on its grants power in s 96 to fund the grant. This will depend on how this section has been interpreted.

TYPE OF GRANT GIVEN

There are three types of Commonwealth grants of financial assistance to States: 1. 2. 3. General revenue grants give revenue to the States to ensure that they have basic revenue capacity Special assistance grants assistance granted to needy States Specific purpose grants those that impose conditions that are designed to implement Commonwealth policies. The Commonwealth relies on the broad view of s 96.

INTERPRETATION
The interpretation of s 96 was first considered in the Federal Roads case. It was established in this case that the Commonwealth has power to impose a wide variety of conditions in its Grants Acts. These proviso can influence the means by which the states exercise their own legislative powers. In the Federal Roads case, the Commonwealth government granted funding to the states on the condition that they use it for certain roads and that the roads were properly maintained. The grants were challenged on the basis that they were outside federal power. The HC unanimously interpreted s 96 broadly holding that the Commonwealth was not restricted in imposing conditions on funding. Victoria v The Commonwealth (Federal Roads case) The Federal Aid Roads Act 1926 (Cth) purported to make conditional grants to the states; the conditions required that the states used the grant funds to construct Federal Aid Roads as directed by the Commonwealth Government, and that states had to contribute funds to the Roads. Victoria submitted that the Parliament could not use s 96 with conditions attached, if the conditions amounted to an attempt to exercise legislative powers beyond the scope of s 51 of the Constitution. HELD that the grants were valid as they were plainly warranted by the provisions of s 96 and not affected by s 99 or any other provisions in the Constitution. No other reasons were given.

This interpretation was affirmed in the First Uniform Tax case. SA v Commonwealth (First Uniform Tax Case) Involved a Federal Legislative scheme of 4 statutes with the object of securing to the Commonwealth the exclusive power to levy income tax. One law in the scheme imposed a rate of income tax which made it politically impossible for States to levy a concurrent income tax. Another law (the grants act) authorised by s 96 made grants to the States as financial assistance on the condition that they do not levy income tax (the grants equaled the amount that the States would have earned from their own Income Tax)

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Challenged on a number of grounds, including that the laws form a single legislative scheme which is to prevent the States of the Commonwealth from exercising their respective constitutional rights and powers to levy and collect income tax The judges (except Starke J) upheld the Act because it did not compel the States to do anything, it merely offered a powerful inducement to the States. Temptation is not compulsion. Commonwealth legislation may be valid even though it weakens or destroys some state activity. The Commonwealth Act did not purport to deprive nor repeal the law giving State Parliament the power to impose an income tax (it cant do that). The Grants Act simply offered an inducement to the State Parliaments not to exercise their powers (but the continued existence of those powers was recognised). There was no legal compulsion for the States to yield. Section 96 contemplates that money can be given to a single state (i.e. discrimination or preference allowable) - no express provision preventing discrimination nor any general prohibition in Constitution.

In the Second Uniform Tax case, the reasoning in the First Uniform Tax case reinforced. The High Court sustained the Commonwealths power to make grants to states, conditional on the states not collecting income taxes. Victoria v Commonwealth (the Second Uniform Tax case) After the war ended, it was expected that the Commonwealth would give the states the opportunity to resume imposing taxes. However, the Commonwealth informed the states that it intended to continue to collect high income taxes and to reimburse the states through s 96 grants. New South Wales and Victoria challenged the scheme once again, basing their attack on the prevailing grants act, the States Grant (Tax Reimbursement) Act 1946 (Cth), and again on s 221 of the ITAA. Of the four original impugned Acts, it was not clear that the Income Tax Act, maintaining a high level of Commonwealth income tax, was a valid exercise of power under s 51(ii). The Wartime Arrangements Act had been repealed after the war. HELD that the scheme was valid. Dixon J suggested some ways in which you could limit s 96 maybe it was conceived as a transitional power the course of judicial decision had put any such limited view of s 96 out of consideration. He said the power was susceptible to a very wide construction in which few, if any, restrictions could be implied. The course of judicial decisions had put such a limited reading of s 96 out of consideration. Dixon J noted that s 96 was limited to granting money to government and said it wasnt a power to make laws with regard to a general subject matter. He held that there was nothing in s 96 which would enable the making of a coercive law, but the grant of money could supply the inducement to comply with a term or condition. Dixon J suggested that s 96 was only a power to grant financial assistance thus no real problem with giving it a wide interpretation. Other judges generally agreed that you couldnt place narrow limits on s 96 and that it had to be given a literal interpretation. Williams J held that the conditions that the Commonwealth might wish to require had to be those with which a State could lawfully comply. Fullagar J said the State would have to be constitutionally capable of complying with any condition. Webb J said that any terms or conditions must be consistent with the nature of a grant and coercive laws are not justified under s 96.

Attorney General for Victoria; ex rel Black v Commonwealth (State Aid or DOGS case) Commonwealth Grants Acts relying on s 96 provided for payment of financial assistance to the States as long as those States paid out the money to non-government schools that were identified by the Commonwealth and at a rate laid down by the Commonwealth Argued that s 96 was not complied with because the Grants Acts didnt give financial assistance to the States, the States were merely conduits through which money was being passed to someone else. The Court rejected that argument strongly, even though the judges acknowledged that the Grants Act didnt give the State discretion in administering this scheme. It did not matter that the subject matter of the grant was not with regard to broad law-making power of the Commonwealth. It was noted that this was a non-coercive law which gave money to the States and the States were free to accept or reject the grant It was not necessary that the grant should benefit the State Treasury directly, and it was not necessary that the purpose of the grant had to be in the express legislative power of the Commonwealth. It was not necessary that the State should have instituted the scheme or be party to it.

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CONSTITUTIONAL LIMITATIONS
The Commonwealth can utilize s 96 to wield enormous political power in areas outside its legislative control under the Constitution. Very few limits are identified.

DISCRIMINATION IN SECTIONS 51(2) AND 99

The validity the grant will not be subject to the express prohibitions in ss 51(ii) and 99 of the constitution as it was held in WR Moran v Deputy FCT for NSW that these sections only applied to taxation and not grants. WR Moran v Deputy FCT for NSW (1940) Commonwealth State scheme to provide financial support to wheat growers at the expense of flour-millers. The Commonwealth passed some tax Acts which imposed excise tax on flour that was in the hands of flour millers. Those taxes were equal as between the States and didnt infringe s 51(ii) or s 99, but then the Commonwealth passed an Industry Assistance Act under which the Commonwealth provided for payments to the States in proportion to their wheat production of monies which were the equivalent to what was being raised by the excise tax. The grants were made on condition that each State would distribute the money to their local wheat growers. There were no wheat growers in Tasmania but there was a flour milling industry Under the Commonwealth Grants Act, a particular sum (the equivalent amount taxed by the Commonwealth) was granted to Tasmania without any specified conditions, but it was understood that Tasmania would pass the money onto their flour-millers. NSW challenged the Taxing Acts and the scheme generally on the basis that there was a discrimination contrary to s 51(ii) - a discrimination in favour of Tasmania. The court UPHELD the scheme (Evatt J dissenting). Latham CJ noted that s 96 was a means to enable the Commonwealth to adjust inequalities between States that might arise as a result of uniform and non-discriminatory federal laws and said that this was necessary to overcome a federal disability. Section 96 essentially relied on the judgment of Parliament and the section was not limited by any prohibition of discrimination there is no limit as to s 96 with regard to discrimination and there is no general prohibition in the Constitution. Discrimination may be just or unjust and by discrimination he meant a wise differentiation based on relevant circumstances (this was necessary for national policy). Latham said that the remedy for abuse of the power under s 96 is political and not legal, so the remedy should remain in the political process.

On Appeal to the PC PC upheld the judgment of the majority of the HCA. The PC referred to the fact when you look to the powers with regard to taxation in s 51 and other s 51(ii) powers that those powers were expressed to be subject to the Constitution. Section 96 is not limited in that way. The PC thought that s 96 was in some ways superior to s 51(ii) in that it wouldnt be limited by the restrictions or qualifications in s 51. The Ct also noted that s 51(ii) was not concerned with matters of equality of burden, but the implication was that s 96 was. Section 96 did not prohibit discrimination (s 96 was being used here to prevent unfairness or injustice to Tasmania).

COMPULSORY ACQUISITION IN SECTION 51(xxxi)

The validity of the grant may be defeated as it was in PJ Magennis v Commonwealth. In that case the Commonwealth granted money to the states so the states could acquire land at less than just terms. The act referred to the agreement. The HC held that the act was invalid as it was an act with respect to land acquisition as well as grants and therefore subject to just terms. To overcome the effects of this limitation can be overcome by not referring to the agreement in the legislation (Pye v Renshaw). PJ Magennis v Commonwealth The Commonwealth and NSW entered into an agreement to provide for the settlement of ex-service personnel on the land in the aftermath of WW2 This agreement was approved by the Commonwealth in the Ware Service Land Settlement Agreement Act and the agreement was set out in the first schedule to the Act Under the agreement, the Commonwealth undertook to grant financial assistance to the States for the acquisition of land for the scheme but a term of the agreement required that the States would acquire the land compulsorily at below market value and the basis of compensation would not comply with the just terms requirement of s 51(xxxi) 77 Lina Terresa Bui

HELD by majority that the Commonwealth Act was a law with respect to the acquisition of property and therefore it had to provide for just terms for the person whose property was acquired Compensation at below market value was not on just terms, even though under the agreement the property was to be acquired by the State of NSW, which was not subject to the Constitutional requirement of just terms Therefore the Act was rendered invalid However, the Commonwealth and State got around this by doing an executive arrangement without Commonwealth backing and this was valid (see Pye v Renshaw below) Therefore, the Commonwealth could offer money to the States and impose conditions (to compulsorily acquire property on less than just terms)

Pye v Renshaw This case concerned the second stage of the Magennis case After the decision in Magennis, the agreement between the Commonwealth and NSW was continued without Commonwealth statutory authorisation, it was merely an executive arrangement Pursuant to this arrangement NSW would compulsorily acquire land on terms that were unjust and the Commonwealth would then pay money to the States in an Appropriation Act, in an Act that studiously made no reference to or incorporation of, the actual agreement There was just an informal understanding with the States To try and link up s 96 to some requirement in s 51(xxxi) was rejected by the High Court previously and there was therefore no basis here to challenge what the Commonwealth was doing The Commonwealth and the States were therefore able to continue with their agreement without legislation.

RELIGIOUS FREEDOM IN SECTION 116

In the DOGS case it was observed that a state grant would be subject to a general prohibition such as the freedom of religion provision in s 116. Attorney-General (Victoria); Ex rel Black v Commonwealth (DOGS Case) Majority of the Court found that the provision of government funds to church-owned schools could not be described as establishing any religion The whole court indicated that laws made under s 96 were subject to the restrictions imposed by s 116 Sections 96 and 116 should be read together because s 116 is an express prohibition in the Constitution.

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IMMIGRATION

AND
EMIGRATION

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RELEVANT PROVISION
Section 51(xxvii) The Parliament shall, subject to this Constitution, have power to make laws for the peace, order, and good government of the Commonwealth with respect to: (xxvii) immigration and emigration;

INTRODUCTION
This head of power enables the parliament to enact assisted migration schemes and can also support beneficial laws for assistance with immigration and emigration. Historically the White Australia policy was justified under the immigration power, now, however, the Immigration Act seems to have a basis more in the aliens power than within the immigration power. The White Australia policy required that a person was a prohibited immigrant where they were unable to pass a dictation test in any European language. The language the test was required to be given in was held by the High Court to be a European language used (R v Wilson; Ex parte Kisch).

SCOPE OF POWER
The scope of the immigration power was held in Potter v Minehan to extend to the control of entry by British subjects from other countries within the Empire but not to the re-entry of Australian citizens. However the power may extend to Australians where they take up permanent home elsewhere (Donohoe v Wong Sau). A person domiciled in Australia may also be an immigrant (Ah Yin v Christie) and it has been held that the power does also extend to mere temporary visitors (Irish Envoys case). Potter v Mineham Potter was a Chinese-Irish man born in Australia His parents were never married and therefore he was considered to be domiciled in Britain because his mother was British He went to China with his father at the age of 5 and returned aged 32 Potter claimed that he had always intended to come back to Australia HELD him to be member of Australian community coming home (not an immigrant, and therefore the Commonwealth does not have the power to refuse entry) Dicta here said that anyone born in Australia is a member of the Australian community and not subject to the immigration power (compare later)

Walsh & Johnson; In re Yates Held that the power to deport didnt extend at all to a person who was in Australia before 1901 as was the case with Walsh He was born in 1885, migrated 1905 and naturalized 1913 He was found to be beyond the migration power by 3:2 majority

DEPORTATION UNDER IMMIGRATION POWER

In Irish Envoys case, Issacs J stated the equivalent of once an immigrant always an immigrant. However in Walsh v Johnson the majority took the position that once a person is absorbed into the Australian community they were out of reach from the immigration power. In Ex Parte Henry, Jacobs and Murphy JJ held that the beneficial aspects of the power could continue operation after absorption. Therefore whether the plaintiff can be deported depends on whether or not s/he is A member of the Australian Community; or 80 Lina Terresa Bui

Absorbed into the Australian community.

IS THE PERSON A MEMBER OF THE AUSTRALIAN COMMUNITY?

There are a number of different scenarios which may arise in determining whether the person is a member of the Australian Community. Australian citizen If a person is an Australian citizen then they are a member of the Australian community and have a basic right to re-enter Australia, since the Commonwealth Parliament lacks a head of power to make laws stopping them (Potter v Mineham). Never been to Australia If the person has never been to Australia and are not connected with it in any way then they will not be a member of the Australian Community. It will be necessary to decide whether they have been absorbed in Australia. Pre 1949 - born in Australian, moved and are now returning Here, [person] was born in Australia prior to the passing of the Citizenship Act. The issue will be whether or not they are considered to be a member of the Australian community. In the case of Potter v Minehan, Griffith CJ observed that that a person who born in Australia was an Australian citizen, and an Australian citizen coming home could not properly be described as immigrating. However, a born Australian citizen coming to start a new life back in Australia is within the scope of the immigration power (Ah Yin v Christie and Donohoe v Wong Sam). Therefore whether the person is coming home or starting a new life will depend on their characteristics and life so far. In Potter v Minehan, Minehan had a long intention of always returning to Australia with a degree but it took him a considerable time to obtain it. This intention showed that Minehan was returning home rather than starting a new life. This can be distinguished from Wong Sam and Ah Yin who could not properly answer the description of a person coming home, but rather was a person coming to start a new life. Ah Yin v Christie Ah Yins father was domiciled in Australia. AY was born in China but he was arguing that he should take his fathers domicile. HELD that despite his technical domicile AY was not a member of the Australian community as nothing about him was Australian and everything about him was Chinese.

Donohoe v Wong Sam W was born in Australia but left age 6 and didnt return until age 41. He was not Australian in point of language up-bringing, education, sentiment, marriage or anything else HELD not to be a member of the Australian community coming home but rather a person starting a new life.

ABSORBED INTO THE AUSTRALIAN COMMUNITY

If the person has been absorbed into the Australian community they will be considered to be out of the reach of the immigration power (Ex Parte Henry). Assimilation into the community is comprised of two parts: The acts of the immigrant that point to an intention to settle permanently in Australia, and Community acceptance of that intention to permanently settle.

Intention to permanently settle in Australia In R v G of the MG, it was held by Sholl J that the combined acts of coming to Australia with a view to settle here permanently included obtaining a job, beginning to learn English and investing money in the country would be enough for a person to be considered absorbed. Some acts have been held indicia with an intention: Marriage(O'Keefe v Calwell and Walsh v Johnson) Acquisition of a home and schooling for children(O'Keefe v Calwell) Holding public office, obtaining employment and investing (R v Governor of the Metropolitan Gaol; Ex parte Molinari) 81 Lina Terresa Bui

Learning English (R v Governor of the Metropolitan Gaol; Ex parte Molinari) Naturalization (Walsh v Johnson) Lengthy residence without departure (Walsh v Johnson)

Similarly, some acts have been held to show that an intention has not occurred: Absorption into a particular racial group but not the community at large i.e. racial isolationism (Molinari) The commission of certain criminal acts such as sedition or espionage although not ordinary crimes (Molinari).

Acceptance by the community Absorption is not something which can result from an immigrants unilateral acts but requires community acceptance of absorption. A person who secretly enters Australia without permission (despite intention to settle) or who has merely been given an exemption certificate (as in OKeefe) or temporary protection visa (TPV), or illegally is without the formal community acceptance. Community acceptance is necessary and is obtained in a formal way from authorities acting on behalf of the community. In OKeefe v Calwell Latham CJ at 276 found that laws with respect to immigration may properly control not only the act of entry into Australia but also the conditions upon which a person not already members of the Australian community may be permitted to remain. Formal permission to reside may be given in two ways: 1. A temporary entry permit for a specified period (Koon Wing Lau v Calwell) There is no community acceptance in this case as the TEP imposes conditions and therefore the stay is conditional (Wing Lau). It would also be possible for the Commonwealth to issue successive temporary permits thereby preventing the grantee from ever becoming absorbed (R v Green; Ex parte Cheung Cheuk To). 2. An ordinary entry permit which contemplates ultimate absorption but subject to a reasonable probation period In Wing Lau it was held that this contemplates absorption but subject to the reasonable period. This period has been accepted as five years (Molinari). OKeefe v Calwell Mrs OKeefe then Mrs Maas was evacuated with her husband to Australia when the Japanese attacked during WWII. Mrs Maas and her husband had another child whilst in Australia. Unfortunately Mrs Maas husband died shortly after (while working for the Dutch secret service) and so she remarried and Australia. Up until her Husbands death Mrs Maas had no intention of permanently staying in Australia, but after his death she did form the intention to stay. To that end she obtained a certificate of exemption, which prevented her being designated as a person prohibited from remain in the commonwealth.

REFUSAL OF ENTRY BASED ON DICTATION TEST

If the person is an immigrant entry into Australia can be refused on arbitrary grounds. This is demonstrated by Australias use of the dictation test to enforce the white Australia policy. The case of Kisch demonstrates the powers of refusal. Kisch The plaintiff was a left wing activist invited to Australia pre WW2 for a peace conference. The Australian Government did not wish him to enter. They issued him a dictation test however he spoke English, German, French, Czech and Slavic. The immigration officers gave the test to him in Scottish Gaelic. The issue before the HC was whether this was a European Language for the purposes of the test. HELD that this was not a European language as it was not spoken in the governance of the country.

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OTHER ASPECTS OF THE POWER

Section 6 of the Immigration (Guardianship of Children) Act 1946 makes the Minister the guardian of an immigrant child who enters Australia other than in the custody of parents or relations. In R v D-G of Social Welfare (Vic); Ex parte Henry, the High Court unanimously upheld this as a law with respect to migration in that it dealt with the special needs of migrants. While confirming that the power lapsed once a migrant was absorbed, Jacobs and Murphy JJ suggested that the power would permit laws reaching out of former migrants provided such laws were beneficial. In Cunliffe v Commonwealth, the High Court held that the provisions of the Migration Act providing for the licensing of migration agents were valid, as incidental to the power. By a 4:3 majority, it also held that provisions limiting the kind of advice that agents could provide were not in breach of the implied freedom of political communication.

EMIGRATION
Under this power, the Commonwealth has the power to regulate the act of voluntarily leaving the country to take up permanent residence in another country. Forced deportation could only occur by relying on another power such as the immigration power, the aliens and defence power.

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IMPLIED
GUARANTEE
OF POLITICAL

SPEECH

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INTRODUCTION
The freedom of political communication is not a guarantee of a personal or individual guarantee capable of conferring private rights; because s 7 and s 24 confer no rights, they preclude the curtailment of the protected freedom by the exercise of legislative or executive power (Lange @ 560). It is sometimes referred to as a shield, not a sword because citizens have immunity from the adverse affects of laws that curtail political communication, rather than having rights in the strict freestanding sense. The guarantee applies to State political matters (Stephens v West Australian Newspapers Ltd).

HISTORY
The freedom of political communication attracted the support of the majority of the High Court and was applied in Australian Capital Television v Commonwealth and Nationwide News v Wills. In Australian Capital Television, the High Court 6:1 held that the system of representative democracy implied a guarantee of freedom of communication on political matters. However, the High Court appeared to warrant laws that restricted such speech if the laws were required by a legitimate interest. Australian Capital Television v Commonwealth This case concerned the constitutional validity of provisions of the Political Broadcasts and Political Disclosures Act 1991 (Cth) which inserted a Pt IIID into the Broadcasting Act 1942 (Cth). Division 2 of the new Pt IIID prohibited radio or television broadcasting of particular material during election or referendum periods. With the exception of material relating to the machinery for conducting the election or referendum, s 95B prohibited all political advertisements, which were defined to include advertisements that contained material intended or likely to affect voting. Section 95A made an exception, provided that nothing in the new Pt IIIC prevented commends on talkback radio. A new Div 3 of Pt IIID required television broadcasting licensees to provide free time to political parties subject to a condition that 90% of the free time was to be granted to political parties which were already represented in parliament and as far as practicable, in proportion to their respective voting shares at the previous election. Division 3 of Pt IIID enabled a broadcaster to broadcast the policy launch of a political party once only and free of charge. The plaintiffs, a number of broadcasters, challenged the validity of the law on a number of grounds, including the ground that the legislation infringed an implied guarantee of freedom or access to, participating in, and criticism of, federal and State institutions amounting to a freedom of communication in relation to the political and electoral purposes. The court UPHELD the challenge by majority and six judges recognised the existence of an implied freedom of political communication.

In Nationwide News, the Court affirmed Australian Capital Television, holding that a law that was reasonably appropriate and adapted to a legitimate purpose would not be invalid. Nationwide News v Wills This case concerned the validity of s 299(1)(d)(ii) of the Industrial Relations Act 1988 (Cth) which made it an offence to use words calculated to bring the Australian Industrial Relations Commission into disrepute. The defences which were ordinarily available to persons charged with such an offence had been removed. Wills, an officer of the Australian Federal Police, laid an information before the Federal Court alleging that in publishing an article that was critical to the integrity and independence of the Industrial Relations Commission, the applicant was guilty of contravening the provision. The article said that the IRC was an official Soviet-style agency operating as a corrupt and compliant judiciary staffed by corrupt labour judges. Nationwide News argued, amongst other things, that there is to be implied into the Constitution a guarantee in favour of the people of Australia that the Parliament has no power to make a law which impairs their capacity to perform the functions and responsibilities entrusted to them by the Constitution. In a representative democracy, parliament can regulate but not abrogate political criticism. Mason CJ, Dawson and McHugh JJ held that s 299(1)(d)(ii) was invalid on the ground that it could not be supported by s 51(xxxv) of the Constitution, which otherwise authorised the creation of the IRC. Nor could it be supported by s 51(xxxix), the Commonwealths incidental power. 85 Lina Terresa Bui

Mason CJ applied what he referred to as the reasonable proportionality test the majority in Davis enunciated and that in assessing whether an impugned law was reasonably proportionate to the Commonwealth powers invoked to support it, it was material to ascertain whether adverse consequences result. In particular, any infringement of fundamental values traditionally protected by the common law, such as freedom of expression. Dawson J disagreed with Mason CJs approach, rejecting the reasonable proportionality test completely. He concluded that the provisions simply lacked a sufficient connection with the subject matter of the legislative power invoked to support it which is directed to the topic of conciliation and arbitration for the prevention and settlement of industrial disputes extending beyond limits of any one State. McHugh J held that the provision went well beyond protecting the Commission and its members against unwarranted attacks and consequently the proper conclusion is that that paragraph goes beyond what is reasonably and appropriate adapted to the ends which s 51(xxxv) of the Constitution seeks to achieve

DEFAMATION In Theophanous v Herald & Weekly Times Ltd, the Court held the implied guarantee as a defence to defamation, because the common law and statute must conform to the guarantee. In Stephens v West Australian Newspapers, Theophanous was affirmed, and the principle was extended to state politics. In Lange v ABC, the Court held that the law of defamation effectively burdened the freedom of political communication, and the law of qualified privilege, as traditionally understood, did not qualify that burden consistently with the freedom. The law of defamation has developed to conform to the guarantee, so that there is a reformulated defence of qualified privilege. Thus, to be effective, the conduct of the publisher must be reasonable and the publication must not be actuated by malice.

CURRENT POSITION
In Langes case the Court set out a two-stage test for the validity of laws thought to interfere with the freedom. 1. 2. The first stage is to examine whether the law burdens freedom of communication about government or political matters either in its terms, operation or effect. If it does so, the second step is to assess whether the law is reasonably appropriate and adapted to serve a legitimate end in a manner that is compatible with the maintenance of the constitutionally prescribed system of representative and responsible government.

WHAT IS POLITICAL SPEECH?

The freedom to receive and disseminate information concerning government and political matters is not confined to election periods. The concept of what is political covers a wide variety of issues. In Theophanous, Mason CJ and Toohey and Gaudron JJ suggested that it extended to the following @ 124: Discussion of the conduct, policies or fitness for office of government, political parties, public bodies, public officers and those seeking public office; and Discussion of the political views and public conduct of persons who are engaged in activities that have become the subject of political debate e.g. trade union leaders, Aboriginal political leaders, political and economic commentators.

Both verbal and non-verbal communication is protected (Levy Victoria). Discussion of animal welfare The discussion of animal welfare is a legitimate matter of governmental and political concern, relevant to the activities of a federal or state parliament (ABC v Lenah Game Meats). Not all expressions of opinion are political, thus advocacy of commercial products or services is not protected (APLA v Legal Services Commissioner).

LIMITS TO THE FREEDOM

The freedom is not unlimited - it can be overridden by laws that are reasonably appropriate (or appropriate and adapted) to legitimate objectives. The freedom of political communication is not breached by a law whose object is compatible with the maintenance of the constitutionally prescribed system of representative and responsible government or with the procedure for 86 Lina Terresa Bui

submitting a proposed constitutional amendment to the people, so long as the law is reasonably appropriate and adapted to achieving that legitimate object (Lange). In Coleman v Power the High Court clarified its position, stating that the requirement of compatibility with the representative and responsible government and the referendum process applies to both the legitimacy of the object as well as the means chosen to achieve it. Therefore, the test laid down in Lange and modified in Coleman v Power, contains 2 limbs: 1 Limb:
st

Does the law effectively burden freedom of communication about government or political matters in its terms, operation or effect? If so, is the law reasonably appropriate and adapted to serve a legitimate end in a manner which is compatible with the maintenance of the system of government prescribed by the Constitution?

nd

Limb:

Coleman v Power Coleman protested in the Townsville Mall, using abusive language and alleging police corruption Coleman appealed his own conviction for using insulting works in a public place under Queensland vagrancy laws Coleman argued that this law which restricted his right to protest in the Townsville Mall was contrary to the implied freedom of political communication HELD 4:3 that the conviction should be set aside Although s 7(1)(d) was validly enacted for the purpose of preventing breaches of the peace and preventing the intimidation of participants in debates on political and governmental matters, the provision was an unqualified prohibition on the use of insulting words, going beyond what is reasonable appropriate and adapted for preventing breaches of the peace in a manner compatible with the system of representative government Thus the provision was read down so as to only apply where the insulting words are intended, or likely, to provide unlawful physical retaliation.

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INCONSISTENCY

BETWEEN
COMMONWEALTH

AND STATE LAWS

EXAM SUMMARY 1. There must be two valid laws, one Commonwealth and one State 2. The State law must be inconsistent with the Commonwealth law in one of three different ways Mutually contradictory commands - direct One law confers a right or privilege and other takes it away - direct The Commonwealth law covers the field - indirect 3. The law will be inoperative to the extent of the inconsistency If only part of the law is inconsistent, must determine whether it is severable It is only inoperative to the extent of the inconsistency so if the Commonwealth law is repealed or becomes invalid, the State law will revive
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RELEVANT HEAD OF POWER

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

INTRODUCTION
The issue here is whether s 109 operates here to invalidate the state law and if so to what extent. For s 109 to be invoked, there first must be a valid Commonwealth law, and a valid State law. Therefore, there is no need to rely on s 109 where one of the laws is invalid e.g. The Commonwealth law is beyond power, or there is no head of power; or The State law relates to an exclusive Commonwealth power (e.g. s 90 excise duties)

But where a State law which is generally on some other topic happens to collide with a Commonwealth law passed under an exclusive power, s 109 will still be relevant (R v Brisbane Licensing Court; Ex parte Daniell). There are three broad issues that arise concerning the operation of s 109. They are the identification of a law for the purposes of s 109 inconsistency, the operation of the three tests for when an inconsistency arises and the consequences of invalidity for the state law.

DEFINITION OF LAW
In this context, law refers to any of the following: Acts of Parliament Statutes (Engineers Case) Regulations (Noarlunga Meat) Other forms of subordinate or delegated legislation (Noarlunga Meat) Industrial awards if made under the authority of a Commonwealth law, they will be treated as Commonwealth laws and thus can override inconsistent state industrial awards made under the legislation (Ex parte McLean) Laws made under the Territories power (Lambshed v Lake)

Executive or administrative orders and directions, made by members of the executive, are not laws and do not override inconsistent state laws (Airlines of NSW v NSW). Ex parte McLean (1930) HC found inconsistency between Masters and Servants Act 1902 (NSW) and Conciliation and Arbitration Act 1904 (Commonwealth) because scope of industrial award made under latter act. The award itself was not a law but since its provisions were terms of the Commonwealth act it prevailed over State awards. State law is not inconsistent with the actual regulations, it is held to be inconsistent with the section of the Commonwealth Act allowing the regulations to be made (pedantry of Dixon J and others) Dixon J s 109 gives paramountcy to the Fed statute so empowering the tribunal so that the State law cannot operate where the tribunal has exercised its authority.

Airlines of NSW v NSW HELD that instructions and directions issued to civil aircraft operators by the Director-General of Civil Aviation under the Air Navigation Regulations (Commonwealth) could not displace state legislation Despite the fact that section in Commonwealth act gave the directions the force of law, similarly to the Industrial Arbitration Act Seems inconsistent with other cases

Colvin v Bradley Bros Pty Ltd (1943) Inconsistency between state ministerial order under a NSW factories & shops Act on the one hand and on the other, a clause in a federal metal trades award under the Cth Conciliation & Arbitration Act. 89 Lina Terresa Bui

Order made under Factories & Shops Act (1912) prohibiting employment of women on milling machines. However award made by arbitration court under Cth Conciliation & Arbitration Act declared that an employer party to the award may employ females to work in the industries HELD that state law inconsistent and thus inoperative

TA Robinson & Sons Pty Ltd v Haylor (1957) HC indicated the restricted view of arbitral award raised little problem to s 109. A State law would give way to a federal industrial award because the Conciliation and Arbitration Act under which the law was made intended to confer power upon the arbitrator to cover the ground to the exclusion of any other State provision

It does not include royal prerogatives (Uther) nor does it apply to the common law, because any legislation will override it (Felton v Mulligan). Uther v FCT (1974) Latham CJ held that State legislation overrode the Cth prerogative, treated s 109 as concerned only with Cth and State legislation

Cth v Cigamatic Pty Ltd (1962) HC overruled Uthers case and held that State legislation could not displace or modify a Cth prerogative right However Dixon CJ was dismissive of the effect and relevance of s 109

ARE THE LAWS VALID?

The law must be within the power of the respective Parliaments. It will be necessary to consider the following: Is the Commonwealth Law supported by a head of power Is the State Law valid? Where a State Law relates to an exclusive Commonwealth power (e.g. s 90), it is invalid, so there is no need to rely on s 109. Do the laws go against any of the prohibitions?

MUTUALLY CONTRADICTORY COMMANDS

The earliest interpretations of s 109 restricted findings of inconsistency to situations where it was impossible to obey both the state law and the Commonwealth law. Where one law commands what the other forbids, or one law compels disobedience of the other, inconsistency is apparent. The laws will be inconsistent where both cannot be obeyed (Clyde Engineering). Differences are not sufficient, they must be contradictory (McWaters v Day).

ONE LAW PERMITS OR COMMANDS, AND THE OTHER FORBIDS

Government activity In Daniell, a Queensland Act provided that there was to be a referendum on liquor trading held on the Senate Election Day. The Commonwealth had also passed a law stating that no State government election or referendum can be held on the same day as senate polling day. The High Court declared the 2 laws were inconsistent as State officials could only obey the State law by disobeying the Commonwealth law. R v Licensing Court of Brisbane; Ex parte Daniell Queensland legislation required a referendum on liquor licensing to be held on the same day as Senate elections, while the Commonwealth Electoral Act prohibited referenda on days when Senate elections where being conduction. HELD by majority that it was impossible to simultaneously obey both laws, thus the state law was found invalid for inconsistency. 90 Lina Terresa Bui

Medical services In McBain v Victoria, a state law which compelled discrimination in fertility treatments on the basis of marriage status was held to be inconsistent with a Commonwealth law which prohibited a person from refusing to provide services to another person on the ground of the other persons martial status. McBain v Victoria Section 8 of the Infertility Treatment Act 1995 (Vic) compelled discrimination in fertility treatments on the basis of marriage status, by providing that to be eligible to undergo fertility treatment a woman must either be married or be living with a man in a de facto relationship. Section 22 of the Sex Discrimination Act 1984 (Cth) prohibited a person from refusing to provide services to another person on the ground of the other persons martial status. Dr McBain wished to provide infertility treatment to a single woman not living in a de facto relationship. HELD that Dr McBain was unable to obey both laws when providing treatment. Accordingly, the state Act was found inconsistent with the Commonwealth Act, rendering the state Act invalid to the extent of the inconsistency.

Prohibitions on citizens In Colvin v Bradley Bros, a State law restricted women from working in certain classes of factories. There was Commonwealth subordinate legislation to the opposite effect. The court held that the state law had to give way to the Commonwealth. Commonwealth law specifically invalidates certain type of State law In Mabo v Queensland (No 1), Queensland denied the existence of the Meriam peoples rights by a State law, which was challenged by Mabo on the basis that the State law was contrary to the Commonwealth Racial Discrimination Act 1975. High Court held that if Mabo could establish Native Title, the State law was inconsistent with the Commonwealth law, and the Commonwealth law specifically invalidated the State law. Commonwealth body not subject to state law In Telstra Corporation Ltd v Worthing, Worthing sued Telstra for workers compensation. However, a Commonwealth law said that people covered in the Telstra statutory compensation scheme were not eligible for compensation under State law, and therefore there was no claim under the State Act.

BOTH LAWS FORBID ACTIVITY BUT HAVE DIFFERENT PENALTIES ETC

Negligent navigation of a ship causing collisions In Hume v Palmer, both the Commonwealth and state law made it an offence in regulations to cause collisions while navigating a ship. However the state law differed from the Commonwealth in that there was a different penalty and it was classed as a different type of crime. It was held that that state law was inconsistent. Damages to Commonwealth property In R v Loewenthal, damage to Commonwealth property was held to be a breach under both state and Commonwealth Acts, but they differed in the provision of penalty. The High Court held that the state law was inconsistent and had to give way. Offences under Victorian Evidence Act In R v Winnecke; Ex parte Gallagher, Gallagher was charged with failing to answer questions under a royal commission, but claimed that the Victorian legislation was inconsistent with the Royal Commission Act. The commissions where being conducted simultaneously under both Acts. It was held that although both were being conducted under the same commission, they were two separate enquiries. Driving under the influence In McWaters v Day, a Queensland law made an offence punishable by a fine of $1400 or 9 months jail, but it was also a federal offence to drive under the influence on defence land (e.g. military grounds). Court held that there was no inconsistency and that the Commonwealth laws were supposed to apply above the State law (i.e. cumulatively; on top of the State law).

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ONE CONFERS, ONE TAKES AWAY OR MODIFIES RIGHT

A state law will be invalid if it alters, impairs or detracts from the operation of a federal law. Two laws will be inconsistent with each other under s 109 when one law takes away a right conferred by the other.

STATE LAW PRESCRIBES HIGHER CONDITIONS THEN COMMONWEALTH LAW

Industrial awards In Clyde Engineering Co Ltd v Cowburn, the High Court held that two awards were inconsistent where they prescribed different numbers of hours in the working week. Clyde Engineering Co Ltd v Cowburn The Forty Four Hours Week Act 1925 (NSW) provided that a workers ordinary working hours were to be 44 hours per week (with overtime rates payable beyond that period). The Commonwealth award made under the Commonwealth Conciliation and Arbitration Act 1904 (Cth) set the ordinary working hours at 48 hours; deductions had to be taken out of the standard wage for fewer hours worked. Cowburn worked the 44 hour week as fixed by the state Act, but Clyde deducted an amount in reliance on the Commonwealth 48 hour standard. Simultaneous obedience was possible, as the employee could work a 44 hour week, and then have his pay docked four hours for failing to work the 48 hours required under Commonwealth legislation. The issue was whether there was any inconsistency between the two laws. HELD by majority that the state law was invalid to the extent of the inconsistency, and was inapplicable to workers under the Commonwealth award. Knox CJ, Gavan and Duffy JJ found the state law diminished the rights conferred on the employer to expect a 48 hour week to be worked, and the right of the worker to be paid the full rate for 44 hours.

In Blackley v Devondale Cream (Vic) Pty Ltd, different minimum wage legislation were held to be in direct collision as obedience to one was disobedience to the other. Radio broadcast In Commercial Radio Coffs Harbour Ltd v Fuller, the High Court found no inconsistency where the Commonwealth requires a radio licence with certain conditions for the purpose of efficient broadcasting, and the State required permission for planning law. Each law covered a different subject matter. Listening devices In Love v A-G, a Commonwealth Customs Act dealt with listening devices relating to narcotics, but the State Act only dealt with listening devices generally. It was held that there was no inconsistency between the two laws. Licensing requirements Australian Industrial Insurance v Workers Compensation Commission Cth law under insurance power said no-one was to set up insurance company without a licence from the insurance Commissioner State law saying only certain licensed insurers can enter workers compensation market in state Insurance company argued because they have licence under Cth they were empowered to be involved in all forms of insurance The court drew a distinction the Cth law did not say that once a company had a Cth licence they could do anything within the field, rather it just said they could not do anything until they had a licence

COMMONWEALTH LAW COVERS THE FIELD

On our facts, there appears to be an indirect inconsistency as the Commonwealth has passed a law which appears to cover the field, and the State Act is also covering the same subject matter. The State law will be inconsistent if the Federal legislature evidences an intention to cover the whole field (Clyde Engineering Co Ltd v Cowburn).

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The supplementation of State law does not cover the field (Ex parte McLean). In Clyde Engineering, Isaacs J suggested that the following questions be asked to determine the issue: 1. 2. 3. What is the field? Does the Commonwealth intend to cover the field, so that that the law is THE law to govern that area? Does the State law attempt to regulate that area?

THE FIELD

The courts adopt a narrow approach in determining whether laws cover the same subject matter. The principles or indicia of how to identify the field apply to both state and Commonwealth laws, and involves identifying the subject matters of each of the laws. In the Airline case it was held that even though both acts invoked a licensing system for aircraft, the licenses were to deal with different subjects and therefore there was no mutual inconsistency. Similarly in the Hospital Benefits Case the HC held that there was no inconsistency between the National Health Act and the Health insurance act of NSW as the Commonwealth act dealt with relationship between registered health benefits and organization whereas the state acts legal operation that was imposing a tax but not affecting rights. In Noarlunga Meat it was held that export regulations and the state export abattoirs act had the same subject matter. OSullivan v Noarlunga Meat (1964) Both Commonwealth and state laws regulated the use of abattoirs. The Commerce Regulations (Cth) established a licensing regime for premises used for export meat production, and regulated hygiene and production quality standards. The Metropolitan and Export Abattoirs Act 1936 (SA) also regulated the slaughter of stock for export purposes, but it was concerned with the licensing of fit and proper persons and that abattoirs were located appropriately. HELD by majority that both laws concerned the same subject matter; the regulation of slaughtering stock for export. Fullagar J cast the fields as overlapping, and that the Commonwealth intended to cover the field, so the state legislation was held inapplicable due to indirect inconsistency. The approach of the bare majority was affirmed by the Privy Council in 1956.

INTENTION TO COVER THE FIELD

If it is found that the Commonwealth does not intend to cover its field as the exhaustive expression of law on the subject matter, there is no indirect inconsistency, even if Commonwealth and state laws or fields overlap. The Commonwealths intention may be demonstrated by express word or implied. EXPRESS INTENTION The Commonwealth may declare their intent to cover the field (Wenn v Attorney-General (Vic)). Commonwealth can also declare that it does not intend to cover the field (R v Credit Tribunal; Ex parte General Motors Acceptance Corporation). However, the Commonwealth cannot express their intention to avoid s 109 retrospectively (University of Wollongong v Metwally). Wenn v Attorney General Two laws about giving preference to ex-servicemen, which happened to differ in one detail. Commonwealth law only applied to employment, i.e. dismissal or re-employment, but didnt refer to promotion, State law referred to promotions as well as the original employment. HELD despite the fact that the Commonwealth had left that one detail out, HC still looked at the Commonwealth Act & said that since it had gone in to so much detail in everything else that it seems that it did intend to cover the field - there was no room for the State Act to work side by side with it.

Botany Municipal Council v Federal Airports Corporation Express declaration of Commonwealth intent that FAC is not to pay local rates BMC litigated it all the way to the high court (perhaps publicity stunt) 93 Lina Terresa Bui

R v Credit Tribunal; Ex parte General Motors Acceptance Corp (GMAC case) (1977) For several years prior to Pt V TPA, all states had various Sale of Goods Acts. In 1974 Commonwealth introduced TPA. Which law governs consumer & contracting parties in the sale of goods? HELD that s 40 Consumer Credit Act 1972 (SA) not inconsistent with Pt VTPA 1974 (Commonwealth) Section 75 of the Commonwealth legislation declared that Pt V was not intended to exclude or limit the concurrent operation of any State or Territory. Therefore the state act could operate side by side with the Commonwealth act. TPA didnt display intention to cover the field However Mason J observed that an express indication of intention not to cover the field could not avoid direct inconsistency where it was impossible to obey both laws.

General Motors Accident Corporation v SA Certain sections of the TPA, where the Commonwealth in putting sections which are parallel with the Sale of Goods Act, made it quite clear that it is not intended to exclude the SGA, that a consumer can choose between the Commonwealth and State Act. Concerned implied terms sections of TPA The HC gave that declaration of intention effect

Telstra v Worthing Should not infer declaration not to cover field where another explanation possible Section of act referred to when an employee has collected workers compensation under the State Act Worthing argued that that inferred that the Commonwealth act was not trying to say that state workers comp were not to apply High Court said there were enough inferences in the rest of the act to override that suggestion from the one dualcollection section

Wollongong University v Metwally (1984) About the Commonwealth and State Anti-discrimination Acts. An earlier case (Viskauskas v Niland) had held that the Commonwealth Act was so comprehensive that there was no room for the parallel operation of a State Act. The Commonwealth Executive and Parliament made an amendment to the Discrimination Act declaring that it was not intended and never had been intended to operate to exclude parallel State Acts (right from first enactment) Discrimination against Metwally before the amendment to the Act by the Commonwealth The HC said that that doesnt work, s 109 has an automatic operation. They held that although the Commonwealth Act did not continue to invalidate the State Acts, it couldnt retrospectively rescue the State Act as of before the date of the amendments. Section 109 applies to what is in and at the time, cannot apply to fictions So discrimination which occurred before the amendment by the Commonwealth is covered by the law as it was then, which was that the Commonwealth law covered the field and the State laws were inconsistent and had no operation

Majority (Gibbs CJ, Murphy, Brennan & Deane JJ) Commonwealth Parliament could not achieve the retrospective revival of any State law which the court had earlier held invalid because of inconsistency with Commonwealth, through retrospective renunciation of intention to cover the field. Gibbs CJ the invalidity of a State law affected by s 109 cannot later be excluded by retrospective declaration because Commonwealth statutes cannot prevail over the Constitution. @ 455-8: stated that s 109 deals with a matter of prime importance in the constnl framework. Mainly the effect of an inconsistency b/t the enactment of 2 legislatures, both which operate in the same territories. s 109 critical in adjusting the relations b/t the 2 legislatures, and also of great importance to the ordinary citizen [which of 2 inconsistent laws they are required to observe]. Brennan, Murphy and Deane JJ considered that Commonwealth could however vacate a field and open the way for State parliament to re-enter retrospectively the field from which it had earlier been excluded. Murphy & Deane JJ Commonwealth parliament could also retrospectively occupy or cover a field so as to prevent a State legislature from entering that field or excluding State legislation already present in the field. Gibbs CJ rejected the proposition.

Minority (Mason, Wilson & Dawson JJ) Commonwealth Parliament could legislate to retrospectively remove or create inconsistency with State law where the inconsistency depended upon Commonwealth Parliaments intention to cover the field 94 Lina Terresa Bui

Beyond Commonwealth legislative capacity to revive a State law which remained inconsistent with a Commonwealth law. However the Amendment to the Act in effect removed the inconsistency which attracted s 109 operation. Considered that: The invalidation of the State law occurred because Commonwealth Parliament had indicated its intention to cover the field in the act; That the Commonwealth could expressly declare its intention not to cover the field; What the Parliament could enact prospectively could also be enacted retrospectively.

IMPLIED INTENTION Where there are no express words in an Act to indicate the Commonwealths intention, it is necessary to examine the Parliaments intention to cover the field. The High Court has indicated two bases for implying the Commonwealths intention: 1. 2. The detail of the legislative regime; and The subject matter of the legislation.

Detail of the legislative regime The width, multiplicity and detail of the Commonwealth Act can demonstrate that they intended to cover the field (O'Sullivan v Noarlunga Meat). In this case, Fullagar J examined the terms of the regulations and found them to be extremely elaborate and detailed, compelling him to conclude that they evince the intention to provide the exhaustive legal requirements relating to the field of slaughter of stock for export. An absence of detail in the Commonwealth legislation does not always indicate intention to clear the field; sometimes such a lack has been found to demonstrate the Commonwealths intention to cover the field (ABC v Industrial Court of SA). Inference of type of law Some types of law give rise to the assumption that Parliament intended to cover the whole field. This will be the case when the field or subject matter is one in which a uniform approach is considered necessary. Commonwealth laws on certain federal subject maters will be treated as the exclusive, exhaustive expression of regulation, thus displacing relevant state laws. IF crime on Commonwealth places: In R v Loewenthal; Ex parte Blacklock, the very fact that the Commonwealth had passed an Act which made it an offence to damage Commonwealth property suggested that the Commonwealth intended this to be an exhaustive code about damaging Commonwealth property and to leave no room for State Acts to run in parallel. IF listening devices: In Miller v Miller, the fact that the Commonwealth had passed an Act about the use of listening devices connected to the Commonwealth telephone system made it clear that there was no room for State laws regarding listening devices to operate in parallel with the Commonwealth law. IF racial discrimination: In Viskauskas v Niland, it was argued that there was no room for the State anti-discrimination law, in so far as it relates to racial discrimination, to stand side by side with the Commonwealth Racial Discrimination Act. The HC agreed and held that if the Commonwealth is implementing an international treaty, it seems unlikely that it would intend that this treaty would only be implemented in a partial way and be able to be varied from State to State by contrary State laws. IF prevention of collisions at sea: In Victoria v Commonwealth, the prevention of collisions at sea was held to be a subject matter requiring uniform legislation. IF preferential employment for discharged military personnel: In Wenn v A-G, the preferential employment for discharged military personnel was held to be a subject matter requiring uniform legislation.

WHERE NO INTENTION - CONCURRENT LAWS

It is possible for the Court to decide that a law does not cover the field and thus make room for concurrent laws. 95 Lina Terresa Bui

State law creating long service leave can stand with a Commonwealth award that does not mention it (Collins v Charles Marshall Ltd, Robinson & Sons v Haylor) A federal law regarding the terms of dismissal paid no regard to sexual discrimination (ATI (Ops) v Wardley) A Queensland traffic Act can stand side by side with a Commonwealth Discipline Act where the latter contemplated parallel systems (McWaters v Day) Commonwealth licence and regulations did not cover surplus poultry not intended for export (only 5% exported ) (Swift Aus v Boyd P). Seaman able to make claim under Workers Compensation Act in NSW when not entitled to under the relevant Commonwealth legislation. It was held that the Commonwealth Act barred compensation under both Acts. As a result, the federal Act recognised a state Act could exist in that area. Federal act construed as not covering the field so it was not inconsistent (Union Steamship Co of Australia v King)

DOES STATE LAW ATTEMPT TO REGULATE THAT AREA?

The method the courts seem to use involves identifying the subject matter and then considering the direct legal effect of the law, rights and liabilities rather than the practical effect.

EFFECT ON STATE LAW

If there is inconsistency, the aspects of the state law that are inconsistent become inoperative (Clyde Engineering Co Ltd v Cowburn). Where severance would make no sense, the law is completely invalid (Wenn v Attorney-General (Vic)). The State law will revive if the Commonwealth law is repealed (Butler v Attorney-General (Vic)).

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INHERENT
NATIONHOOD

POWER

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INTRODUCTION
Section 61 in combination with s 51(xxxix) regarding matters incidental to the execution of any power vested in the Constitution is said to give rise to an implied nationhood power. This authorises the Commonwealth Parliament to legislation with respect of matters incidental to the exercise of the executive power. This power is used to spend revenues and implement national initiatives such as the establishment of the Australian Institute of Sport, the Commonwealth Scientific and Industrial Research Organisation and the National Library and National Gallery. Similarly, it grounds Acts such as the Australian Nuclear Science and Technology Organisation Act 1987 and the Tourism Australia Act 2004. It is not a power to regulate any matter of national interest, irrespective of the enumerated Commonwealth powers (Brennan J in Davis).

SCOPE
The scope of the nationhood power is imprecise and subject to variation according to the circumstances. There does not appear to be a single test, however dicta from various cases establish some guides as to the powers application. The power appears to include: scientific research, exploration, public health inquiries, the arts, culture & heritage (AAP Case). Matters of national security and protection of the nation are within the scope of this implied power (Burns v Ransley). It can also be read as supporting and supplementing the defence power in s 51(vi). Gibbs CJ in Tasmanian Dams required the issue to be sufficiently complex such that it required co-ordinated national action; mere convenience of national concern is not sufficient. Deane J in Tasmanian Dams suggested that the power be confined to areas where there was no real competition with the states. The law must be reasonably appropriate and adapted to the fulfilment of the objective that is within the nationhood power (Bicentennial Case). Positive rather than coercive laws are more likely to fall within the power {permitted coercive to prevent disruption but not to bad the use of words etc The fact that the subject is of national concern is not sufficient. The power cannot be relied upon to overcome any of the limitations in the constitution (Tasmanian Dams per Deane J). It appears that the power will be most likely to apply where national co-ordination is the only effective way of implementing, commonwealth funding is required & there is difficulty co-ordinating the states.

CASES
The leading case is the Bicentennial Authority Case, which saw the establishment of the Australian Bicentennial Authority to coordinate celebrations was upheld under the nationhood power. However, laws that made it an offence to use its name or prescribed expression was held to be outside the power. In Tasmanian Dams, Gibbs CJ, Wilson, Deane & Dawson JJ, held that the power did not apply, but discussed the scope of the power. Gibbs CJ did not see the issue as of such importance as to warrant national action, while Deane J held that the power should be confined to areas where there is no real competition with the states. In the AAP Case, the scope of the nationhood power was considered. The Commonwealth engaged in the development & delivery of welfare plans and services. Barwick CJ, Gibbs & Mason JJ held it not to be within the power, while McTiernan, Murphy & Stephen JJ did not decide the issue. However, Jacobs held that the growth of national identity was sufficient to attract the power, finding the program to be within power.

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JURY TRIAL

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RELEVANT PROVISION
Section 80. The trial on indictment of any offence against any law of the Commonwealth shall be by jury, and every such trial shall beheld in the State where the offence was committed, and if the offence was not committed within any State the trial shall be held at such place or places as the Parliament prescribes.

INTRODUCTION
Section 80 was the result of compromise between two rival proposals, and appears on its face to be meaningless. As Higgins J said in R v Archdall, if there be an indictment, there must be a jury; but there is nothing to compel procedure by indictment. On this basis the Commonwealth could simply provide for summary trial of the most serious offences and negate the supposed effect of s 80. The majority in the High Court has so far taken this view, but there has been a significant minority, which has tried to give the section some force. R v Archdall The High Court considered provisions of the Crimes Act (Cth) which provided that some offences could be punished either on indictment or on summary conviction, and provided for lesser maximum penalties on summary conviction. HELD, following argument about the definition of summary conviction, that this case was a summary matter and therefore s 80 was not infringed.

The literal approach has been criticised on many occasions. White v Director of Military Prosecutions (2007) 231 CLR 570 per Kirby J at [167]: In past cases, a majority of this Court has favoured the tautological view that s 80's guarantee of trial by jury is limited to cases in which the Parliament and the Executive provide for the commencement of prosecution by filing an indictment. However, a persistent minority has rejected this view as inconsistent with the function of s 80 as providing a guarantee of jury trial which could not so easily be circumvented. With respect, I favour what is presently the minority view. It is more harmonious with the language, constitutional context, purpose and function of the section. The contrary view renders trial by jury for the applicable federal offences optional in the hands of the very governmental agencies against whom jury trials can be a precious protection for the individual. That cannot be the meaning of the Constitution. When Australian judges and lawyers become more accustomed to reasoning by reference to fundamental rights, they will see the truth of this proposition more clearly.

LIMITS
These are some of the limits on s 80: it does not apply to the States or Territories; it does not extend to courts martial; the right to trial by jury cannot be waived by the accused.

Section 80 does not limit the legislative power of the States (Byrnes v The Queen). DOES NOT APPLY TO STATES OR TERRITORIES The phrase law of the Commonwealth does not include laws passed under s 122 for Territories; therefore there is no requirement for jury trial even upon indictment in the Territories (R v Bernasconi). DOES NOT EXTEND TO COURTS MARTIAL The power of the Commonwealth to make laws with respect to defence and, incidentally, military discipline, were not subject to the constitutional guarantee of trial by jury in respect of Commonwealth indictable offences (Re Tyler; Ex parte Foley). CANNOT BE WAIVED BY ACCUSED If a federal law provides for proceedings on indictment, then the words of s 80 literally require that there shall be a trial by jury and the accused cannot waive this right (Brown v R). 100 Lina Terresa Bui

JURIES MUST BE UNANIMOUS In Cheatle v R, it was held that a person charged with an indictable offence against a Commonwealth law who is tried in a State Court in accordance with state procedural law could not be convicted by a majority jury verdict provided for in state legislation. A unanimous verdict is required. Such a State law will be inconsistent with s 80 of the Constitution. A unanimous jury of six, or 10, but not 12 is required (Brownlee v R).

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NATURALISATION

AND ALIENS

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RELEVANT PROVISION
s 51 The Parliament shall, subject to this Constitution, have power to make laws for the peace, order, and good government of the Commonwealth with respect to: (xix) naturalisation and aliens;

BACKGROUND
Naturalisation is the process whereby an alien or non-citizen becomes an Australian citizen. Parliament has the power to determine who is an alien, but cannot stray beyond a person who could not possibly be considered to be an alien in the ordinary sense of the word.

WHO IS AN ALIEN?
NON-AUSTRALIAN BRITISH SUBJECTS

In Nolan v MIEA, the court held alien to include people born outside of Australia whose parents were not Australian citizens, and who had not become an Australian citizen. It also extends to a person who ceased to be a citizen through denaturalization. Where a person is born abroad by has citizen parents, they are a citizen and not an alien. Nolan v Minister for Immigration & Ethnic Affairs (1988) Nolan was a British citizen, who came to Australia at 9 years old in 1967; by 1985 been in Australia for 18 and had spent half of his time in prison. An order to deportation was made under the Migration Act. Nolan argued that he wasnt a non-citizen. HELD by majority (Mason CJ, Wilson, Brennan, Deane, Dawson and Toohey JJ) that as the change in relationship between the citizenship/British subject was crystallized after the enactment of citizenship laws in 1948, a British subject would still be an alien and could still be legislated against in the power. Acceptance of indivisibility of the crown was also a consideration here Even after 1948 (and the Citizenship Act was passed), it was still considered to have special significance if someone was a British subject only in 1987, when the provisions relating to a British subject were removed, does that mean a British subject could be an alien In the Act, a person was not an alien where a British subject changed in 1987. While this statutory change doesnt indicate the definition from the constitution, it does indicate the historical underpinnings of what is an alien

The High Court altered its position in Re Patterson; Ex parte Taylor. In this case, the Court considered a British subject who entered Australia in 1966 as a child. He had been convicted of child sex offences and was subject to deportation. The court was divided as to the cut off date for a British subject to be considered an alien. Gummow and Hayne JJ held that anyone born in the UK after the commencement of the Citizenship Act was an alien. Gleeson CJ felt that the Parliament could determine the meaning. McHugh J held that a British subject that enters after the commencement of the Royal Style and Titles Act 1973 would be an alien. Gaudron, Kirby and Callinan JJ held that a British subject who arrived here before 1987 could not be an alien. IF arrived after 1987: It would appear from the case of Re Patterson that after 1987 no British subject would be an Australian citizen. IF arrived between 1973 and 1987: The position is unclear as to the status of those who have arrived between 1973 and 1987. The High Court recently altered its position in Shaw v MIMA. In this case, Shaw arrived in 1974. A majority of the court held that Nolan was right and Taylor was wrong. They stated that the Constitution contemplates changes in political relations. McHugh, Kirby and Callinan JJ in dissent held that Taylor should not be overruled and based their date on the enactment of the Australia Acts. 103 Lina Terresa Bui

Therefore, an alien is considered any non-Australian whose parents were not Australians, and who had not been naturalised after 26th Jan 1949.

AUSTRALIAN BORN PEOPLE

Although Australia had traditionally determined citizenship by birth within Australia, in 1986, an amendment to s 10 of the Citizenship Act 1949 deemed a person to be an Australian citizen if: (a) a parent of the person was an Australian citizen at the date of the persons birth; or (b) the person has been an ordinarily resident in Australia throughout the period of 10 years commencing on their day of birth. The amendment was upheld in Singh v Commonwealth, meaning that birth in Australia does not necessarily equate to citizenship. Singh v Commonwealth Singh was born in Australia and her parents were born in India and are both citizens of India. Neither of Singhs parents is an Australian citizen or a permanent resident. Singh was a citizen of India. Singhs father was refused protection visa and as unlawful non-citizens they were to be removed from Australia. Singh commenced proceedings in the High Court, relying on her status as a person born in Australia, to resist any risk of her being removed. HELD by a 5:2 majority that s 10 of the Citizenship Act was valid. Gleeson CJ at [29], [30] held that the legal and historical context at the time of the drafting did not support a conclusion that aliens excludes Singh. At [32] he concluded that since Singh was a citizen of a foreign state, she is an alien. Gummow Hayne and Heydon JJ at [157] held that there was no fixed legal meaning of aliens. Their honours found that the central characteristic of the status of being an alien is, owing obligations ("allegiance") to a sovereign power other than the sovereign power in question (here Australia). They also made reference to the judgement in Nolan where it was said that alien meant 'nothing more than a citizen or subject of a foreign state." Kirby J at [249] also rejected a fixed meaning of words in the constitution. His honour stated that the ambit of the word aliens was not closed at the time of Federation. It was not a word devoid of meaning. But neither was its meaning fixed by what the word meant to lawyers, or the laity, in 1901 or even 1980. He stated that alienage is status and that notions of status change over time and therefore The word must respond to the disappearance from the Australian context of the British Empire.

The principle in Singh applies even to the extent that a person may be stateless (Koroitamana v Commonwealth).

POLITICAL RIGHTS OF EX-MIGRANTS

RIGHT TO VOTE

Sections 30 and 51(xxxvi) of the Constitution provide that Parliament can make laws regarding the qualification of electors. Section 93 of the Commonwealth Electoral Act provides that you can vote and enroll if: 18 years old; and Either an Australian citizen or other British subject who was already on the roll at 26 January 1984.

This is the same in all States.

RIGHT TO STAND FOR ELECTION

Section 44(1) of the Constitution provides that any person who is under any acknowledgment of allegiance, obedience, or adherence to a foreign power, or is a subject or a citizen or entitled to the rights or privileges of a subject or a citizen of a foreign power shall be incapable of being chosen or sitting as a senator or a member of the House of Representatives. When a migrant is naturalised, the law of the former may 1. 2. 3. automatically strip them of their previous citizenship; still regard them as a citizen until they take official steps to renounce citizenship; or still regard them as citizens no matter what.

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PROHIBITION ON
DISCRIMINATION

OR PREFERENCE

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RELEVANT PROVISIONS
51(ii) the Commonwealth shall have power to make tax so not as to discriminate between states and parts of states. 99 the Commonwealth shall not by any regulation of trade, commerce or revenue give preference to one state or any part of thereof over any other state or part thereof.

INTRODUCTION
The anti-discrimination requirement of s 51(ii) only affects the Federal Parliaments taxation power - it does not limit the power of the Parliament to grant money to the States pursuant to s 96 in a way that discriminates against the States or parts of the States. Section 99 only applies to laws which are supported by ss 51(i) or (ii) (Morgan v Commonwealth). To establish that s 99 has been contravened, three things must be established: 1. 2. 3. The impugned Commonwealth law or regulation is one of trade, commerce or revenue (Crowe) There is a preference The preference is given to one State or part of it over another State or any part of it.

DISCRIMINATION OR PREFERENCE
A discrimination means a lack of uniformity or a difference in legal standards. A preference must be tangible and definite. FORM OF THE LEGISLATION The form of the legislation is critical to determining whether it gave preference or discriminated. A law which contains a uniform rule, but the operation and effect differ because of conditions within a State, the law will be valid because it is non-discriminative on its face (even if in practice it produces different outcomes) (Colonial Sugar Refining Co v Irving). A law that is discriminatory on its face will be invalid (James v Commonwealth). James v Commonwealth Dried Fruits Act (Commonwealth) set up a licensing system for the interstate trade in dried fruits Part of an attempt to rationalize the dried fruit industry in which supply considerably exceeded demand A grower was forbidden to deliver his or her dried fruit for interstate carriage except under a licence issued by a prescribed authority in the growers State Licensing authorities were prescribed for NSW, SA, VIC and WA only states where dried fruit were produced in commercial quantities The Court held that this law was invalid as it gave a preference to the four States because a grower in Qld or TAS could not obtain a license and therefore unable to deliver his or her dried fruit interstate according to the Act What was critical was the legal form of the legislation On its face the legislation gave preference to one State over another.

Cameron v Federal Commissioner of Taxation Commonwealth tax income regulations prescribed the value to be assigned to livestock in different States of Australia when calculating the profit made on the sale of that stock The values assigned differed between the States HELD that the law was invalid The simple fact is that they are different, and those different legal standards being applied simply because the subject of taxation finds itself in one State or the other there arises the discrimination by law between States which is forbidden

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Colonial Sugar Refining Co v Irving The Excise Tariff Act exempted from duties of excise, goods on which customs or excise duties had been paid under State legislation before 8 October 1901 The Privy Council held the provision to be valid The rule laid down by the Act is a general one, applicable to all states alike The fact that it operates unequally arises not from anything done by the Parliament, but from inequality of the duties imposed by the States themselves

Conroy v Carter The Poultry Industry Levy Collection Act established processes for the collection of a special tax from poultry farmers The Act provided that the Commonwealth might make an arrangement with a State for that States Egg Board to collect the levy in the State on behalf of the Commonwealth Section 6(1) provided that where such an arrangement was made, the State authority could deduct the amount of the levy from any money which the state authority owed to a poultry farmer The High Court was split (3:3) on whether this was a merely a product of different circumstances (in which case the law would be valid) or of a different rule (the law would be invalid) Menzies J, Barwick CJ and McTiernann J said s 6(1) exposed poultry farmers in a State where an arrangement had been made to a particular disadvantage at law to which a person in respect of hens kept in a State which had no arrangement with the Commonwealth is not exposed The differentiation amounts to unlawful discrimination Taylor J on the other hand said that any difference between taxpayers in one State and taxpayers in another State arose from the fact that arrangements had not been made with all States so that s 6(1)(b) would be incapable of application in some State and this is not discrimination

Crowe v Commonwealth Dried Fruits Board had 2 representatives from Victoria One representative each from the other dried fruits States No representatives from Tasmania or Queensland HELD that the law was not discriminatory as it did not enable the Board to give any preference

BETWEEN THE STATES

The preference or discrimination must be between States or parts of States. The meaning of the phrase parts of states is an unsettled area of law and has resulted in differences of opinion. Two views have been presented on the issue. The more expansive view, from the majority of Griffith CJ, Barton, and OConnor JJ in R v Barger was that the words states or parts of states must be read as synonymous with parts of the Commonwealth or different localities within the Commonwealth. Isaacs J in the same case adopted a narrower, perhaps literal view, which was that the view begins with the system of federated States. The interpretation then goes on to forbid discrimination as between parts of States just because they are parts of States. This view was approved in Cameron v Deputy Federal Commissioner of Taxation (1923), by the Privy Council in Deputy Federal Commissioner of Taxation v W R Moran Pty Ltd (1939) and formed the basis of the reasoning in Elliott v Commonwealth (1936). The narrow approach was severely doubted in C of T v Clyne (1958) but the remarks were obiter because the court disposed of Clynes action on another ground. The interpretation in Elliott has been followed by a majority of the High Court in Permanent Trustee Australia: differential treatment and unequal outcomes will not infringe s99 if based on distinctions that are appropriate and adapted to a proper objective Loophole Section 96 grants or direct expenditures under s 83 are not subject to s 99. The High Court has accepted schemes where the Commonwealth imposes a uniform tax, then refunds to only some States or differentially between States (Moran; Grasstree Poultry).

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RACE POWER

EXAM SUMMARY 1. Definition of race - used to identify group of persons with common characteristics (Tasmanian Dams) 2. What is deemed necessary is for Parliament to decide (Kartinyeri) 3. A special law includes laws which are of their nature special to people of particular race, due to special needs or because of special threat of problem (Koowarta)
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RELEVANT HEAD OF POWER

s 51 The Parliament shall, subject to this Constitution, have power to make laws for the peace, order, and good government of the Commonwealth with respect to: (xxvi) The people of any race for whom it is deemed necessary to make special laws;

INTRODUCTION AND HISTORY

The races power ins s 51 (xxvi) was originally intended to empower the Commonwealth to make detrimental laws for the races as demonstrated by the use of the head of power to deport pacific Islanders in Robtelmes v Brenan. In 1967 by referendum the words other than the Aboriginal race in any State were taken out. The government of the day campaigned that it was so beneficial laws could be passed. In Hindmarsh Island Case the court found that there was nothing in the parliamentary record to show that the section was only intended to benefit the aboriginal people. To fall within the scope of the races power, the Act must first be changing, regulating or abolishing rights, duties, powers or privileges of the people of any race for whom it is deemed necessary to make special laws or be reasonable appropriate and adapted to this purpose (Fairfax).

PEOPLE OF ANY RACE

The term race has not been precisely defined although it does contain a biological element (Brennan J in Tasmanian Dams). Brennan J in Tasmanian Dams said that race characterization is based upon: common history religion spiritual beliefs culture biological origins physical similarities

Gibbs J in Koowarta stated that race included the Aboriginal race. However, the race power does not just include the Aboriginal race by itself, it also contemplates the racial sub-groups among the Aboriginals (Tasmanian Dams).

SPECIAL LAWS
A law is special when it confers a right or benefit or imposes an obligation or disadvantage especially on the people of a particular race. However, despite the conferral of a general benefit, if the law provides a benefit of special significance to a certain race, it will be considered a special law (Tasmanian Dams). To be a special law, the law cannot apply equally to all races (Koowarta). It is not fatal that only a segment of the race benefit (NT Act Case). Nor is it fatal if the law is for an identifiable sub-group of people of a particular race (Kartinyeri). Tasmanian Dams case It was held in Tasmanian Dams that a special law may be one that protects the cultural heritage of a particular race. In this case, a piece of legislation sought to protect sites of historical and archaeological significance, although they would probably be of no special spiritual significance to any Aboriginal person. It was held 4:3 that the race power gave the Commonwealth the power to make laws that protect cultural and spiritual heritage of a race (see specifically Deane J), or preserve the material evidence of the history and culture of a race (see Murphy J). Tasmanian Dams Where the Tasmanian government was seeking to build a dam upon some Aboriginal culturally significant areas 109 Lina Terresa Bui

The government sought to legislate to protect these areas enacted laws relating to the aboriginal race. HELD these laws were valid, as they sought to protect the cultural and spiritual domain of the aboriginal people. Majority (Mason, Murphy, Brennan and Deane JJ) Law may discriminate between races in its operation if not in its terms Operation of act preventing dam acted specially on the aboriginal people as it protected sites of particular significance to them as a race/sub-group of a race Law, even though in operation protects sites of significance for everyone will be a law with respect to the aboriginal people if those sites are of particular importance to that race The legislative power includes power to protect sites of particular importance to one race Hypothesized that if it was shown in Koowarta that racial discrimination was something particular to the aboriginal people, then decision would have been different Minority (Gibbs CJ, Wilson and Dawson JJ) A law will be special if it has some special connection with the people of a race Gibbs CJ A law will not be a special law where it protects sites/items which are of universal significance The law does not change aboriginal rights, liabilities etc even in the area protected by the Act, aboriginals have no different rights than everyone else

Native Title Act case In WA v Commonwealth, the Native Title Act 1993 was held to be a special law because it conferred a benefit upon Aboriginal and Torres Strait Islanders. WA v Commonwealth Native Title Act Case Law conferred benefit on some indigenous people only - those who still held native title under Mabo principles WA challenged the Native Title Act Doesnt confer a benefit on all indigenous power exists where it has not been extinguished and people have maintained connection with the land. Many indigenous people have no right of claiming under the Native Title Act Holding (6:1) first cited Tasmanian Dams Case, that law is special even when it confers a benefit generally, provided the benefit is of special significance to the people of a race. Extended to case where benefit is conferred only on some people of a race [and observed that this law may confer an indirect benefit on all people of Aboriginal and TSI races] Their Honours referred to the undoubted significance of security in the enjoyment of native title for Aboriginal people, given the fact that their relationship to their land laid at the heart of their traditional culture and traditional life Act conferred a benefit uniquely on Aboriginals and Torres Strait Islanders

DEEMED NECESSARY
As a general rule, the judgment as to necessity is for the parliament to decide although the majority in the Native Title Act case held that the court has a supervisory jurisdiction to examine the question of necessity against the possibility of a manifest abuse. In Kartinyeri, Gaudron J held that the parliament must have some material that might reasonably allow them to form a political judgment that there is a difference requiring the law. Whereas, Gummow and Hayne JJ suggested that the court will find the law invalid under this power where there is a manifest abuse. It is unclear to what each of these tests overlap, however it appears that only in extreme cases will the court find a law invalid under this element.

DOES IT SUPPORT BENEFICIAL AND DETRIMENTAL LAWS?

There is general agreement in both Koowarta and Tasmanian Dams that the power extends to both beneficial and detrimental laws. In Kartinyeri, the court was called upon to decide whether an act that removed Aboriginal and Torres Strait Islander land from Heritage protection was invalid because it was detrimental to Aboriginal people. A majority (5;1) held the laws to be invalid, but for different reasons. Brennan CJ and McHugh J found no need to decide whether the power extended to detrimental laws, as they held that the power to make laws carried with it the power to repeal laws;

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Gummow and Hayne JJ held that the race power extended to beneficial or detrimental laws, subject to review on the grounds of manifest abuse; Gaudron J held that the law must be reasonably capable of being views as appropriate and adapted to a relevant difference. However Gaudron came to the same conclusion as the CJ, that the power to enact, carried with it the power to repeal. His Honour also said that there must be some difference pertaining to the people of the race involved or their circumstances or, at least, some material difference of that kind.

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STATE
RESTRICTION

CUSTOMS EXCISE

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RELEANT PROVISION
90. On the imposition of uniform duties of customs the power of the Parliament to impose duties of customs and of excise, and to grantbounties on the production or export of goods, shall become exclusive.

INTRODUCTION
Section 90 of the Constitution vests the power to impose duties of customs and of excise exclusively in the Commonwealth. It deals with the following three topics: 1. Customs duties - a type of tax imposed on import or export of goods. On 8 October 19010 at 4pm the Commonwealth imposed a uniform system of customs duties and the power to levy customs duties has been exercised exclusively by the Commonwealth from that date. Duties of excise - a tax on goods within a trading area, such as Australia. Bounties - a financial incentive which may be given to produce or export certain types of goods. This power is exclusive to the Commonwealth.

2. 3.

EXCLUSIVE POWER

The Commonwealths exclusive power to levy duties of customs and excise is exclusive of the States (Peterswald v Bartley). It is also exclusive of the Territories (Capital Duplicators v ACT).

PURPOSE OF SECTION 90

Dixon J in Parton v Milk Board stated that s 90 was intended to give the Parliament a real control of the taxation of commodities and to ensure that the execution of whatever policy it adopted should not be hampered of defeated by State action. This statement was approved by the majority in Capital Duplicators v ACT (No 2).

WHAT IS AN EXCISE?
DEVELOPMENT

To determine the extent of the Commonwealths exclusive power under s 90, it is first necessary to consider the meaning of the word excise. The term excise duties was initially defined to mean a tax imposed at the time of production or manufacture by reference to the value or quantity of goods (Peterswald v Bartley). The scope of excise was widened by relaxing the strict requirement that the tax be in relation to quantity or value (Matthews v Chicory Marketing Board), and including exactions at any point before it reached the consumer (Parton v Milk Board (Vic)). In Bolton v Madsen, the High Court unanimously agreed on a definition of excise which was originally from Kitto J in Dennis Hotels. They held that an excise is a tax directly related to goods and imposed on them at some step in their production, manufacture, distribution or sale before they reach the consumer. A judicial shift occurred in the Franchise cases (Dennis Hotels, Dickensons Arcade and HC Sleigh), where the High Court proceeded down a line of reasoning that held a licensing fee imposed by reference to sales from a previous period was not an excise duty. Thus, the Court held that to be described as an excise duty, the exactions criterion of liability was the levys relationship to the quantity or good sold in the relevant period. Dennis Hotels Pty Ltd v Victoria High Court considered the validity of South Australian legislation which imposed a licence fee to conduct liquor retail business calculated as a percentage (6%) of the value of all liquor sold in a previous 12 month period. A second licence fee for temporary licences imposed a 6% charge on daily sales. The first scheme was upheld and the second struck down. Kitto J described the criterion of liability approach in the following way: a tax is not a duty of excise unless the criterion of liability is the taking of a step in a process of bringing goods into existence or to a consumable stage, or passing them down the line which reaches from the earliest stage in production to the point of receipt by the consumer @ 559. 113 Lina Terresa Bui

The criterion of liability approach to characterisation enabled the State to evade s 90 by using the backdating device which broke down the connection between the levy and the sale of goods.

After these decisions, the High Court attempted to restrict future use by constraining the operation to retail licenses (MG Kailis v WA), where the legislation operated on indistinguishable terms (Capital Duplicators).

THE CURRENT APPROACH

In Ha v NSW, the High Court affirmed the substance approach, rather than the criterion of liability approach adopted in the Franchise Cases. In doing so, the Court overruled the Franchise cases, revitalizing the law in Parton that a duty of excise was a tax imposed with respect to goods at any point before it reached the consumer. Ha v New South Wales The High Court had to consider the constitutional validity of State legislation which prohibited the sale of tobacco whether by wholesale or retail without a business franchise licence calculated by reference to 100% of the value of the tobacco sold in a previous month. Brennan CJ, McHugh, Gummow and Kirby JJ HELD that the law was invalid on the basis that the licence fee was in substance a tax on goods, and they made the following remarks relating to the characterization of laws that are alleged to infringe a constitutional prohibition: o When a constitutional limitation or restriction on power is relied on to invalidate a law, the effect of the law in and upon the facts and circumstances to which it relates - its practical operation - must be examined as well as its terms in order to ensure that the limitation or restriction is not circumvented by mere drafting devices. o In recent cases, this court has insisted on an examination of the practical operation (or substance) of a law impugned for contravention of a constitutional limitation or restriction on power.

Ha v NSW was subsequently approved in Roxborough v Rothmans and in British American Tobacco Australia v WA.

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STATE
LEGISLATIVE

POWER
EXAM SUMMARY States were created by the Constitution and their existence is guaranteed by s 106. State Parliaments have plenary power to legislate (McCawley) on any topic for the peace, welfare and good government of the State. Therefore, a State law will be prima facie valid (s 2 Constitution Act 1867 (Qld)), unless one of the following limitations or restrictions apply: a) The State law offends an exclusive Commonwealth power e.g. Commonwealth places - s 52(i) Commonwealth public service - s 52(ii) Customs and excise - s 90 Defence - ss 51(vi) and 114 Coinage - ss 51(xii) and 115 b) The State law is inconsistent with a valid Commonwealth law - s 109 - or a law from another State c) The State law infringes one of the express prohibitions in the Constitution Freedom of interstate trade and commerce - s 92 Discrimination on grounds of State residence - s 117 d) The State law infringes implied prohibitions in the Constitution Political communication, right to vote, intergovernmental immunities Separation of judicial power from Ch III of the Constitution, to the extent that it applies to State courts (Kable) e) The State law is bound by a manner and form restriction imposed by a previous State Parliament.

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INTRODUCTION
STATE CONSTITUTIONS

The colonial Constitution Acts for were originally enacted by the UK Parliament, but the states were allowed to amend or re-enact their constitutions. As such all states except WA have re-enacted its constitution. NSW: Constitution Act 1902 SA: Constitution Act 1934 Victoria: Constitution Act 1975 Tasmania: Constitution Act 1934 WA: the original Constitution Act 1890, enacted by the UK Parliament, has to be read with the Constitution Acts Amendment Act 1899.

The general amending power (and the possible limits on that power) were restated in s 5 of the Colonial Laws Validity Act 1865.

MANNER AND FORM

The State Parliaments also had the power to insert new restrictions on the manner and form of amendment of particular provisions in the Constitution Acts. Rather than provisions for tabling in London and personal assent by the Queen, the manner and form restrictions inserted in modern times by State Parliaments tend to provide that a Bill must be either: passed by an absolute majority of both Houses or submitted to the electors at a referendum and passed by a majority of those voting.

Otherwise a State Constitution is an ordinary Act of Parliament and can be amended by a later ordinary Act. Therefore, there are two sets of rules involved: 1. 2. One set of rules for ordinary section; and One set of rules for the entrenched sections i.e. those entrenched by the manner and form requirements.

QUEENSLAND CONSTITUTION

Main legislation is the Constitution Act 1876 which was supplemented by the Constitution Act Amendment Acts and other legislation. The manner and form restrictions exercised by the state parliament in 1934 and 1977 on both occasions requires a proposed amendment of the Constitution Act to be put to a referendum. Consolidation of most the different acts into Constitution of Queensland 2001. It re-wrote most of the old constitutional documents in plain English. Extended the tenure of Supreme Court Justices to District Court Judges, with conditions for dismissal specified more clearly. However, as some of the older acts were protected by manner and form provisions, the government left them how they were to avoid a referendum. These Acts were included as attachments in the new Constitution: The eight remaining sections of the Constitution Act 1867 The Constitution Act Amendment Act 1890; and The Constitution Act Amendment Act 1934.

JUDICIAL INTERVENTION IN THE LEGISLATIVE PROCESS

The question of validity of an Act will often arise after enactment, but can the Judiciary intervene prior to this? Although the law has not been clear in the past, the position appears to be that the Courts do have the power, but only in exceptional circumstances (Eastgate v Rozzoli). The courts appear to only be able to intervene where the Bill is a clear breach of an express prohibition in the Constitution (Bignold v Dickson), or the Bill would, if enacted, take away the Plaintiffs legal basis to challenge the legislation (Eastgate v Rozzoli).

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HISTORY The State Courts have generally favored judicial intervention. In Taylor v Attorney-General (Qld), the Queensland Supreme Court granted injunction on referendum where it had been passed by legislative assembly, but not legislative council. It was concluded that intervention was justified because the alternative procedure was not validly available for the passage of the proposed legislation. Ultimately went to High Court, where it was held that the process was valid. In Trethowan v Peden, the Supreme Court issued an injunction to prevent the Parliament from presenting two bills to the governor for royal assent. It was prohibited by a section of their Constitution. Street CJ held it did not interfere with the house of parliament, but prevented a breach of the prohibition. In McDonald v Cain, an injunction granted by single judge from the presentation of a bill to the Governor for royal assent, pending the Courts determination as to whether it was valid under s 60 of their constitution. Supreme Court held that s 60 did not apply to the bill. But still held that it was possible to make a declaration or injunction in appropriate circumstances. In Clayton v Heffron, the NSW Supreme Court declined to issue injunction restraining a referendum where it had been passed by the legislative assembly, but blocked by the legislative council based on merits of the case, not reluctance to intervene but held there may be circumstances where there would be jurisdiction at 768 per Evatt & Sugarman JJ stated that because the act was to replace the legislature with only one house - degree of convenience makes it necessary to determine the Acts validity & it is in the public interest to determine the validity of an act early. However, the High Court has been reluctant to allow such intervention in the following cases. In Hughes and Vale Pty Ltd v Gair, the High Court refused to grant an injunction to prevent the presentation of a bill to the Governor that was alleged to contravene s 92 of the Federal Constitution. Dixon J distinguished the case from Trethowan v Peden because in that case it was an express prohibition, but that was not the case in this place; Dixon J indicated that he did not like judicial intervention expressly doubted Trethowan v Peden. In Clayton v Heffron, the High Court held that there was no failure to comply with certain provisions of the Constitution of NSW. However a number of judges considered whether it would have been appropriate if there was such a failure. The justices said that looking into acts prior to being passed was not an action that courts initially undertook. In Cormack v Cope, the issue was whether non-compliance with SA constitution allowed an intervention. Again cast doubt on the appropriateness of judicial intervention. However, Barwick J suggested that it could be done in appropriate circumstances where challenge more difficult after passage, and Gibbs & Mason JJ left scope in the case of an improper double dissolution.

NO MANNER AND FORM PROVISIONS

GENERAL RULE

The Queensland Government has the power to make laws for the peace, welfare and good government of Queensland. This is as plenary and ample as the power of the imperial parliament (Powell v Apollo Candle Co).

RESTRICTED BY PEACE, WELFARE AND GOOD GOVERNMENT?

The words peace, welfare and good government do not limit state power (Union Steamship Co of Australia Pty Ltd v King). Union Steamship Co of Australia Pty Ltd v King The NSW Compensation Court made an order under s 46 of the Workers Compensation Act 1926 (NSW) awarding King, an employee of Union Steamship on a ship registered in NSW, compensation for boilmakers deafness. Union Steamship challenged the award on two grounds in the High Court - that s 46 was not a valid law for the peace, welfare and good government of NSW, and that the provisions of the State law were inconsistent with the Seamens Compensation Act 1911 (Cth), thus rendering the State law invalid to the extent of its inconsistency by virtue of s 109 of the Constitution. The High Court rejected the application, confirming that the phrase peace, welfare and good government in s 5 of the Constitution Act 1902 (NSW) describes a plenary power. The word plenary means not subject to limitations or exceptions.

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AMENDMENT OF STATE CONSTITUTION

Where there is no manner and form provisions, States can enact inconsistent legislation without first repealing the Constitution (McCawley v The King). McCawley v The King Section 15 of the Constitution Act 1867 said that judges commission for the Supreme Court of Queensland were to remain in force during their good behavior. However, the Industrial Arbitration Act provided that judges would be appointed to the Industrial Court for 7 year terms, and that they could then be appointed to the Supreme Court as additional judges. McCawley was appointed as the Chief Justice of the Industrial Court, then as an additional Supreme Court judge. The validity of his appointment was challenged by the leaders of the Bar. HELD by the Supreme Court 4:1 that the IA Act was inconsistent with the CA and, following Cooper, that it was therefore invalid and McCawley was not appointed to the Supreme Court. The High Court of Appeal affirmed this decision by 4:3. On appeal to the Privy Council, it was held that constitutions are either controlled or uncontrolled and one that was neither could be unique in constitutional history. Apart from s 9, the Queensland Constitution was uncontrolled. The IA Act impliedly amended the CA and McCawley had a 7 year term.

EXTRATERRITORIAL LAWS
Section 2(1) of the Australian Act 1986 (Cth) confirms that the States have power to pass legislation with extraterritorial operation. As a qualification, however, there must be a connection between the State and the matter regulated.

BASIC CONNECTION TEST

The basic test for the extent of extra-territorial power was stated in BH South v C of T (NSW). Dixon J put forward the connection test and held that a State can make a law with effect outside the State if: Liability is based on a fact, occurrence, circumstance or thing that is in or connected with the State; or The person who is liable has a connection with the State by presence, residence, domicile, carrying on business, or an ever remoter connection. If some connection is established, it is not important that the liability is disproportionate to the territorial connection.

CONFIRMATION IN THE 1970s The basic connection test put forward in BH South was confirmed in the case of Pearce v Florenca. Pearce v Florenca Florenca, a fisherman in Geraldton, Western Australia, was charged under State fisheries legislation with the offence of possession of undersized rock lobsters. The Western Australian law referred to Western Australian waters which were defined to include, among other places, the sea from high water mark to three nautical miles from low-water mark. It was alleged that Florenca had committed the offence some one and a half miles off the coast of Geraldton. A Western Australian magistrate dismissed the charges on the basis that the Seas and Submerged Lands Act 1973 (Cth), a federal law regulating Australias off-shore waters, rendered the Western Australian law inoperative in any area below the low-watermark of the coast of Western Australia. The High Court was asked to consider whether the federal law rendered the State Act inoperative by virtue of s 109. A threshold question was whether the State law was invalid. Gibbs J said that the test of State extraterritorial power should be liberally applied, and that legislation should be held valid if there is any real connexion - even a remote or general connexion - between the subject matter of the legislation and the State @ 518. HELD that the law had a sufficient connection with Western Australia.

CONNECTION TEST POST 1986 The Coastal Waters (State Powers) Act 1980 and Coastal Waters (State Title) Act 1980 Act were enacted by request of the States under the Commonwealth Constitution s 51(xxxviii). It provided that States could exercise powers and hold title in the three-mile strip as if it was the territory of a State. It also provided for the joint control of fisheries by Commonwealth-State agreements. 118 Lina Terresa Bui

However, it does not save a State law if inconsistent with a valid Commonwealth law and the Commonwealth cannot be make any law at all in the strip because its a law with respect to external affairs. Therefore, State laws are not valid within a three-mile strip simply under the CW(SP) Act. The connection test will only be needed outside the three-mile limit.

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TAXATION
EXAM SUMMARY Commonwealth If the Commonwealth charge is not a tax, it must be justified under another head of power otherwise it is invalid. If the Commonwealth charge is a tax, it will be invalid if it has not met the requirements of ss 55, 88, 99 or 114.

State If the State charge is a tax, it may possibly be a customs or excise duty and therefore invalid under s 90. If the State charge is not a tax, there is no danger of it contravening s 90.

1. Does it come within s 51(ii)? Is it a tax? Legally or practically compulsory; Has the purpose of raising revenue (i.e. by a public authority or for public purposes); Not a fee for service, unless there is no reasonable relationship between the fee and the service rendered; Not a fee for licence (unless there is not reasonable relationship between the fee and the value of the thing acquired); Not an arbitrary exaction (i.e. there is a reasonably method of calculating the tax or determining the liability); Not a penalty, although provisions for the recovery of tax money probably comes within the incidental power.

2. Does it discriminate between States or parts of States? If so, it is not within the power. 3. Does it breach s 55? 4. Does it breach s 90? Is it an excise duty (States cannot impose excise duties). 5. Does it breach s 99? Does it give preference to a State or part of a State? If so, it is invalid. 6. Does it breach s 114? Is it a tax on the property belonging to the Commonwealth or State? If so, it is invalid.
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RELEVANT HEAD OF POWER

Section 51(ii) of the Constitution states The Parliament shall, subject to this Constitution, have power to make laws for the peace, order, and good government of the Commonwealth with respect to taxation; but so as not to discriminate between States or parts of States.

BACKGROUND
Pursuant to s 51(ii) the Commonwealth has power to make laws with respect to taxation. This includes the power to impose customs and excise duties. The States also have power to enact taxation laws under their general power to legislate for the peace, welfare/order and good government of the States, but it is restricted by s 90 and 114 of the Commonwealth Constitution.

IS THERE A TAX?
Latham CJ in Matthews v Chicory Marketing Board (1938) described a tax as a compulsory exaction of money by a public authority for public purposes, enforceable by law, and is not a payment for services rendered. It can be divided into the following sub-elements: A compulsory exaction Of money By a public authority For public purposes Not a payment for services rendered

Matthews v. Chicory Marketing Board Victorian agency to levy producers of chicory. Money to be used to meet industry needs such as payment of insurance, repayment of borrowings and pay expenses, improving the quality of chicory etc. HELD this levy did not impose a tax and it was an excise duty.

In the subsequent case of Air Caledonie, the HC emphasized that this was not an exhaustive definition. The tax need not be collected by a public authority or for a public purpose. Additionally, the negative attribute not a payment of services rendered should be seen as intended to be an example of various special types of exaction which may not be taxes even though the positive attributes are all present. Air Caledonie International v Cth An immigration clearance fee was imposed on all people entering Australia It was argued that this was a fee for service and not a tax. (Amendment to the Migration Act) HELD the Act imposed a tax. Definition formulated from the unanimous judgment of the High Court: a fee or charge exacted for particular services provided or rendered individually to, at the request or direction of, the particular person required to make the payment it was a compulsory exaction as it was unrealistic to expect people not to pay it. There is no reason why a compulsory exaction of money could not be properly seen as taxation notwithstanding that it was by a non-public authority or for purposes which could not properly be described as public. This could be taxation non-public authority, non public purpose.

The following are examples of special types of exactions of money which are unlikely to be properly characterised as a tax even though they exhibit the positive attributes (Air Caledonie): a charge for the acquisition or use of property; a fee for a privilege; a fine or penalty imposed for a criminal conduct or breach of statutory obligation; a payment of a fee for a license.

In Northern Suburbs the Court stated that various special types of exaction may not be taxes even though the positive attributesare all present. Provided contemporary definition of a tax: compulsory but not arbitrary charge enforceable by statute, 121 Lina Terresa Bui

which is not one of that class of charges which is not properly characterised as a tax (including, but not limited to fees for services rendered, charges for the acquisition of property, or fines & penalties)

COMPULSORY EXACTION
A critical element of a tax is compulsion if a person has no choice but to pay the charge this will be sufficient for the charge to be considered (Victoria v The Commonwealth). Will generally be of money, but does not necessarily have to be (Air Caledonie). If there is a legal or practical compulsion to pay there would be tax (Homebush Flour). IF person is not impacted directly: Held in MacCormick v FCT that the compulsory nature of the charge need not impact on the taxpayer directly. Therefore in this case the fact the party is practically compelled to pay a tax imposed on the person will satisfy the compulsory element. IF there is an arbitrary exaction: In MacCormick v FCT a scheme was established were a company who did not pay tax could have assets stripped and sold, this was reliant on a certificate being issued. The court held that because there was no opportunity to challenge the cert. this amounted to a compulsory extraction. Vacuum Oil v. Qld The Motor Spirit Vendors Act 1933 (Qld) prohibited any person from selling petrol in Qld with out a licence required that every licensee should purchase and pay for locally-produced power alcohol equivalent to 2% of the volume of the licensees sales of petrol. HELD the MSV Act did not impose a tax. Dixon J stated the compulsory payment required of the suppliers of petrol does not answer the description of taxation. It is not a liability to the State, or to any public authority, or to any definite body or person authorised by law to demand or receive it. The liability to make the payment is not imposed by the enactment itself, but arises only when the suppliers of petrol proceed to fulfil the requirements of the enactment and purchase power alcohol; and the liability arises exclusively out of the contract of sale.

AG (NSW) v Homebush Flour Mills A NSW Act required flour millers to sell their flour to the government and either be 1. compensated for it, or; 2. buy it back for a higher amount. HELD If the millers did not buy their flour back, they would go out of business. This is practical compulsion to pay the difference meant that it was a tax. Dixon J stated When the desired contributions are obtained not by direct command but by exposing the intended contributor, if he does not pay, to worse burdens or consequences which he will naturally seek to avoid, the payment becomes an exaction. The fact that no legal obligation to pay is imposed or enforced by direct legal remedies, civil or criminal, will not, in my opinion, prevent the exaction fulfilling the description of a tax; because in truth it is exacted by means of sanctions designed to that end, sanctions consisting in the detriments arising from the adoption by the taxpayer of the alternative left open by the legislation Dixon J emphasised that it was the effect of the law that must be taken into account, not just its substance and form making the key idea here is the practical effect of the legislation Rich J- the substance of the legislation is imposing a tax subject to a means of escape which no one would adopt if he considered the business and the pecuniary consequences. This is a compulsory exaction.

PUBLIC AUTHORITY
Traditional view from Matthews is that the charge is to be imposed by a public authority. However in Air Caledonie the Court held that the charge could be imposed by anyone undertaking a public task. Confirmed in Tape Manufacturers Association v Commonwealth where a collecting society collected a fee imposed on the sale of blank audiotapes. The majority in this case held that the nature of the body is not important just that it is performing a public function. This concept covers any public body formed under statute. 122 Lina Terresa Bui

The minimal requirement is that there must be a definite body authorised by law to receive the exaction (Vacuum Oil Case). The statutory body need not be a federal body, but can be an accommodating State body that levies on behalf of the Federal Government. Majority in Tape Manufacturers expanded the notion of public authority by stating that there is no requirement that a tax be levied by a public authority. They stated that it would be a remarkable consequence if a pecuniary levy imposed for public purposes by a non-public authority acting pursuant to a statutory authority falls outside the concept of a tax simply because the authority is not a public authority. Australian Tape Manufacturers Association v Cth Fee imposed on sale of blank audiotapes. Created a fund to be paid as royalties to copyright owners who make a claim. The levy was not paid to the Executive, but directed to a collecting society (a separate entity) consisting of relevant copyright owners or their agents. The Cth argued that the law did not impose a tax because the government did not receive the monies levied and that the law fell within the scope of the intellectual property power. Was the society that was collecting the fees for the tapes a public authority? HELD the nature of the body is not important. Whether it was the Govt or some other department. The collecting society was performing a public function so in that extent it is a public authority A misnomer to describe an authority as non public when ones of its functions is to levy demand or receive exactions to be extended for a public purpose- this should be a public authority- Latham CJ- look at the function that the authority is performing The royalty charge was a tax and as a consequence the scheme was invalid under s.55. Minority This Company is not a public authority, even though it is endowed with certain statutory powers.

PUBLIC PURPOSE
IF funds go into the CRF: The public purpose requirement will be met if the compulsory exaction goes into the Consolidated Revenue Fund (1st Uniform Tax Case). This however is not determinative of whether the tax is for a public purpose. IF for purpose of raising revenue: The current test comes from the Airservices Case and requires the fee to be imposed for the purpose of raising revenue. In that case lien was over a liquidating companies leased plane. The owner, Canadian airlines was liable for the charge and didnt want to pay for it. It was held not to be a tax. Thus if the matter is something that can be considered of public importance or exists for the purpose of raising revenue than this is a public purpose. Australian Tape Manufacturers HELD (majority): losses to copyright owners is a problem of public importance, thus the exaction is for a public purpose. Here it was in the public interest and was designed to provide a solution of public importance. Minority held that the exaction must be for the purpose of raising revenue (and ordinarily added to Consolidated Revenue) to demonstrate public purpose. This was not the case here because the funds were of a compensatory nature.

Logan Downs v Commissioner of Taxation The Wool Tax Act (Cth) imposed a levy on wool growers, the exaction of which went into the CRF. Logan Downs (LD) asked the HCA for a declaration that the WTA was invalid, by pointing to the Wool Industry Act (Cth) (WIA) which estd the Australian Wool Board (AWB). The WIA appropriated out of the CRF and paid to the Board for its purpose the amounts equal to the amounts received by the Cer of Taxation in respect of tax imposed by any WTA. LD argued that the WTA was not a law w.r.t taxation and it was a law w.r.t. for a non Cth purpose. HELD the WIA did no more than reveal why Parl had imposed the taxation in question.

The WTA was accepted on its face as a valid taxation law

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Airservices Australia v Canadian Airlines International Compass went into liquidation Had not paid charges owed the Cth (aviation charges) Civil Aviation Act allowed for a lien to be executed on aircraft until charges paid Compass was leasing a Canadian Airlines plane and the plane could not be used or repossessed until the monies owed were paid HELD a tax must be imposed to raise revenue. In this case the monies were simply a penalty.

Lutton v Lessels Constitutional validity of the Child Support (Registration and Collection) Act 1988 (Commonwealth) and the Child Support (Assessment) Act 1989 (Commonwealth) was challenged. HELD that even though the money was paid into the Consolidated Revenue Fund, it was not a tax because the legislation had neither the purpose not the effect of raising revenue for the Commonwealth. Rather, the legislation created an obligation in the form of a debt payable by the liable parent to the eligible carer, and the creation of a legal obligation, enforceable by a private action, to pay for the support of a child, is not taxation (Gleeson CJ and Kirby J).

NOT A FEE FOR SERVICES

Fees for services rendered are not taxes. Fees only cease to be taxes if they are exacted for particular identified services provided individually to the particular person required to make the payment (Air Caledonie). To be a fee for service it must be a fee or charge exacted for particular identified services provided or rendered individually to, or at the request or direction of, the particular person required to make the payment. IF fee put toward product or promotion Here, the facts are similar to Harper v Vic. In this case the owners of eggs were required to pay a fee towards the grading, testing and marking if eggs. The court held in that case that the fee was to defray the cost of services rendered therefore the charge was not a tax. IF based on quantity as opposed to provision of services In Parton v Milk Board (Vic) the fee was held to be a tax and not a fee for service because it was calculated by reference to the quantity of milk sold as opposed to the provision of services. There must be a relationship or connection between the fee and the service provided. Otherwise, the fee is a tax (Northern Suburbs General Cemetery Reserve Trust v Commonwealth). Harper v Victoria Victorian marketing of primary products legislation imposed a levy on egg producers to defray the expenses incurred by the Victorian Egg Board in grading, testing, marking and stamping the eggs to ensure a satisfactory grade, quality and standard of eggs. The fee was determined by the services provided (i.e. grading, testing and marking) HELD the egg levy was a fee for services rendered to the egg producers and therefore not a tax. It didnt matter that it was compulsory; the amount was determined by the cost to the authority of rendering the services. There was a direct link between the fee payable and the services rendered.

Parton v Milk Board (Vic) The Milk Board Act 1933 (Vic) provided for the establishment of a Milk Board, which promoted milk consumption, licensed dairies, and paid for various administrative expenses. The Act provided for the imposition, by the Board, of a milk levy by dairymen, who distributed the milk. The milk levy was one-tenth of a penny per gallon of milk sold or distributed. The levy was fixed to be imposed on operators in the dairy industry. The levy was not related to any particular services provided (it was for a fund for sales promotions) and even though the Boards activities could be beneficial, the Board didnt conduct services for which the levy was payable. 124 Lina Terresa Bui

HELD the Victorian leg did impose a tax when it required dairy distributors to contribute money to a fund administered by a govt agency. Dixon J at 258 it is not a charge for services. No doubt the administration of the Board is regarded as beneficial to what may loosely be described as the milk industry. But the Board performs no particular service for the dairymen or the owner of the milk depot for which his contribution may be considered as a fee or recompense. As the fee payable was closely linked to the quantity of the milk sold and not as payment for the services provided to the dairymen, the fee was a tax and not a marketing levy. Fee calculated on the quantity of milk sold so this was not a fee for services

Air Caledonie International v. Cth To be a fee for services rendered, it would need to be a fee or charge exacted for particular identified services provided or rendered individually to, or at the request or direction of, the particular person required to make the payment There must be a discernible relationship between the fee and the value of what is acquired. Otherwise, tax.

Northern Suburbs General Cemetery Reserve Trust v Commonwealth Plaintiff challenged the validity of the legislation that set up the training scheme Employers were required to expend money on workforce training and if they did not spend the required amount, they were required to pay the shortfall to the Commonwealth The money collected was then to be expended by the States or Territories on facilities and services relating to workforce training. HELD that the levy was a tax and not a fee for services, even though the proceeds of the levy were to be paid to the States and Territories, which were to apply the payments on providing training programs for those employers who had paid the levy. The legislation did not establish a sufficient relationship b/w the liability to pay the charge and the provision of employment related training by the ultimate expenditure of the money collected to allow the levy to be described as a fee for services. The rationale is this discernable relationship- legislation did not connect the charges made with the benefit provided. Money didnt go specifically to the people who had paid the fee; the only relationship was that it was all related to work force training. However, the fee was not expended solely on people who have paid the fee.

NOT A FEE FOR LICENCE

A tax or charge for the acquiring of a right to exploit a resource is a right akin to the acquisition of property and cannot be labelled a tax in most cases. Here the facts are similar to that in Harper v Minister for Fisheries. In this case the law prohibited fishing without a licence which could be purchased for a fee. The court held that statutory licence fees are not regarded to be taxes so long as the fee is reasonably related to the value the privilege provided or the actual costs of providing the privilege. However the court did note that if there was not a discernable relationship there would be a tax. Harper v Minister for Fisheries Tasmanian law prohibited abalone fishing without a license, for which a fee was payable The license fee was calculated by reference to the abalone taken HELD that it was a fee for a license as it was akin to a profit a prendre (right of access), or a right to acquire property, or part of a system for preserving a limited resource, not a tax. Because abalone was a limited natural resource, which was liable to damage, exhaustion or destruction by uncontrolled exploitation by the public, the fee charged for the privilege of exploiting that limited natural resource was a charge for the acquisition of a right akin to property. But, a fee aimed at preserving a natural resource may be a tax, if no discernible relationship to value of what is acquired can be proven. Dawson, Toohey and McHugh JJ stated that it was possible to discern a relationship between the amount paid and the value of the privilege conferred by the license, namely, the right to acquire abalone for commercial purposes in specified quantities. In discerning that relationship it is significant that abalone constitute a finite but renewable resource which cannot be subjected to unrestricted commercial exploitation without endangering its continued existence.

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NOT AN ARBITRARY EXACTION

The Commonwealths legislative power with respect to taxation does not allow it to impose an arbitrary exaction. This can be classified as an exaction that cannot be contested with a judicial review. A tax must not be an arbitrary exaction - it must be referable and open to challenge (MacCormick). The persons upon whom the liability is imposed must have the opportunity to challenge the liability through some judicial process by showing that his or her circumstances do not attract the liability. MacCormick v FCT A scheme was established to deal with tax avoidance If company tax was not paid, shares could be sold and assets stripped from the company This scheme relied on a certificate of tax liability issued by the Commissioner of Taxation The certificate, which stated that company tax was due and payable and remained unpaid, was conclusive evidence of the matter stated in the certificate for the purpose of assessment of the recoupment tax HELD that this was an arbitrary exaction no opportunity to challenge the certificate. The purported tax is thereby converted to an impost which is made regardless of whether the circumstances of the case satisfy the criteria relied upon for characterization of the impost as a tax and for characterization of the law which imposes it as a law with respect to taxation. Such an incontestable impost is not a tax in the constitutional sense. Under the Constitution liability for tax cannot be imposed upon the subject without leaving open to him some judicial process by which he may show that in truth he was not taxable The constitutional objection to an arbitrary extraction does not preclude the exercise of some admin discretion in the creation of a tax liability. Gibbs CJ, Wilson, Deane and Dawson JJ adopted Dixon CJs proposition from Deputy Federal Commissioner of Taxation v Brown and stated that under the Constitution, liability for tax cannot be imposed upon the subject without leaving open to him some judicial process by which he may show that in truth he was not taxable or taxable in the sum assessed, that is to say that an administrative assessment could not be made absolutely conclusive upon him if no recourse to the judicial power were allowed.

NOT A FINE OR PENALTY

A penalty is attracted by some irregular course of conduct, such as conduct that constitutes an evasion of an already imposed tax liability or conduct that constitutes a crime. A tax is attracted by a regular or acceptable course of conduct, e.g. earning income or selling or importing goods. The nature of a penalty was considered in Re Dymond. In this case, there were additional fees for people who did not furnish tax returns. The court held that this extraction was punitive and only indirectly fiscal and not aimed at raising revenue. It will not be a tax where the penalty operates only where there has been a failure to discharge antecedent obligation on the part of the person on whom the exaction falls. Re Dymond This case concerned s 55 of the Constitution. There was an attempt by D to move to be discharged from bankruptcy. The Cer denied this and said that there was additional tax under s 46 of the Sales Tax Assessment Act. The section read, any person who failsto furnish any return (tax)shallbe liable to pay additional tax at the rate of (etc.)or the sum of One pound, whichever is greater HELD the provision was a penalty and not a tax. Liability was imposed not as a consequence of sale of goods, but as a consequence of an attempt to evade payment of tax. The exaction is exactly punitive and indirectly fiscal - it is imposed for the protection of revenue. Fullagar J at 22 the liability is imposed by the Act not as a consequence of a sale of goods but as a consequence of an attempt to evade payment of a tax on a sale of goods. The exaction is directly punitive, and only indirectly fiscal. It is imposed for the protection of the revenue, but as a sanction and not for the sake of revenue as such. It is not a tax on the sale of goods, and it is not a tax on anything else.

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CHARACTERISATION OF TAX
To come within the scope of s 51(ii) the law must be in respect to taxation or reasonable incidental or substantially connected to taxation (Fairfax). Multiple characterisation is permissible. Revenue raising may be merely secondary to the attainment of some other object (Northern Suburbs General Cemetery). Fairfax v Federal Commissioner of Taxation Income tax law deemed that superannuation would not be taxed if specified amounts were invested in public securities. HELD that the fact that the tax is imposed to encourage investment in public securities does not mean it is not a tax. The Court disregarded the policy motivations of the Parliament and focused merely on the question whether the law may properly be regarded as a law with respect to taxation.

IF the legislation has other objectives: Objects of the Act do not prevent an exaction being characterized as a tax. For example, a land tax aimed at preventing one person from holding a large quantity of land. The Court in Fairfax stated that the question is always one of subject matter to be determinedby reference to the nature of the rights, duties, powers and privileges which it changes, regulates or abolishes. The scheme was held to be valid under s 51(ii) because the legal effect of the law was concerned with regulating duties and privileges of taxation. In Training Levy Mason CJ, Deane, Toohey, Gaudron and Brennan JJ held that If a law, on its face, is one with respect to taxation, the law does not cease to have that character simply because the parliament seeks to achieve, by its enactment, a purpose not within Commonwealth legislative power. IF the Commonwealth is preventing the States from collecting taxes: Here the Act gives the Commonwealth priority in collecting their tax. The Uniform Tax scheme was introduced by the Commonwealth during World War II and was based on four Commonwealth statutes: 1. 2. 3. 4. Income Tax War-Time Arrangements Act 1942 transferred State income tax offices and officers to the Commonwealth. Income Tax Act 1942 imposed a rate of income tax equal to a combination of the former Commonwealth tax and state tax. Income Tax Assessment Act 1942 conferred priority on the payment of Commonwealth income tax. State Grants Income Reimbursement Act 1942 provided for reimbursement to states tax collected on condition it did not impose its own income tax.

South Australia v Cth (First Uniform Tax Case) HELD the legislation is valid. There is no legal compulsion on the States to stop taxing income. (If there was, would have breached intergovernmental immunities rules). It may be argued that the priority to pay comes within the heart of the power as it is a laws which allows taxes to be collected.

Victoria v Cth (Second Uniform Tax Case) (1957) HELD the priority rule is not within incidental power: It is not necessary to effectuate the federal tax. This is because State and Commonwealth taxation powers are independent and concurrent and therefore there will never be an inconsistency under s 109 and the Commonwealth is unable to cover the taxation (excluding the operation of s 90). It goes too far otherwise Commonwealth could tell people not to pay their phone bills before paying tax, etc.

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DOES IT DISCRIMINATE BETWEEN STATES OR PARTS OF STATES?

SCOPE OF THE POWER
Section 51(ii) prohibits discrimination between the States in respect of taxation. Section 99 only applies to laws made under the Trade and Commerce power and the Taxation power, and only extends to laws regarding trade, commerce or revenue power (Morgan). A law will discriminate or give preference when it provides a different rule for different parts of Australia. A discrimination means a lack of uniformity; a difference in legal standards. A preference must be tangible and definite. The following must be established in order to show s 99 has been contravened: the impugned Commonwealth law or regulation is one of trade, commerce or revenue (Crowe v. Commonwealth) that there is a preference the preference is given to one State or any part of it over another State or any part of it.

IF there is a uniform rule, but the operation and effect differ due to conditions within State: A law will be valid if it contains a uniform rule, but the operation and effect differ because of conditions within a State. Even though it produces different outcomes in practice, it is non-discriminative on its face (Colonial Sugar Refining Co v Irving). IF the law is discriminatory on its face: A that is discriminatory on its face will be invalid (James v Commonwealth; Cameron v FCT). James v Commonwealth Dried Fruits Act (Commonwealth) set up a licensing system for the interstate trade in dried fruits Part of an attempt to rationalise the dried fruit industry in which supply considerably exceeded demand A grower was forbidden to deliver his or her dried fruit for interstate carriage except under a licence issued by a prescribed authority in the growers State Licensing authorities were prescribed for NSW, SA, VIC and WA only states where dried fruit were produced in commercial quantities HELD that this law was invalid as it gave a preference to the four States because a grower in Qld or TAS could not obtain a license and therefore unable to deliver his or her dried fruit interstate according to the Act What was critical was the legal form of the legislation On its face the legislation gave preference to one State over another.

Cameron v FCT Commonwealth tax income regulations prescribed the value to be assigned to livestock in different States of Australia when calculating the profit made on the sale of that stock The values assigned differed between the States HELD to be invalid. The simple fact is that they are different, and those different legal standards being applied simply because the subject of taxation finds itself in one State or the other there arises the discrimination by law between States which is forbidden

Colonial Sugar Refining Co v Irving The Excise Tariff Act exempted from duties of excise, goods on which customs or excise duties had been paid under State legislation before 8 October 1901 HELD the provision to be valid The rule laid down by the Act is a general one, applicable to all states alike The fact that it operates unequally arises not from anything done by the Parliament, but from inequality of the duties imposed by the States themselves

Conroy v Carter The Poultry Industry Levy Collection Act established processes for the collection of a special tax from poultry farmers The Act provided that the Commonwealth might make an arrangement with a State for that States Egg Board to collect the levy in the State on behalf of the Commonwealth 128 Lina Terresa Bui

Section 6(1) provided that where such an arrangement was made, the State authority could deduct the amount of the levy from any money which the state authority owed to a poultry farmer The High Court was split (3:3) on whether this was a merely a product of different circumstances (in which case the law would be valid) or of a different rule (the law would be invalid) Menzies J, Barwick CJ and McTiernann J s 6(1) exposed poultry farmers in a State where an arrangement had been made to a particular disadvantage at law to which a person in respect of hens kept in a State which had no arrangement with the Commonwealth is not exposed The differentiation amounts to unlawful discrimination Taylor J on the other hand said that any difference between taxpayers in one State and taxpayers in another State arose from the fact that arrangements had not been made with all States so that s 6(1)(b) would be incapable of application in some State and this is NOT discrimination

Crowe v Commonwealth Dried Fruits Board had 2 representatives from Victoria One representative each from the other dried fruits States No representatives from Tasmania or Queensland HELD that the law was not discriminatory as it did not enable the Board to give any preference

BETWEEN THE STATES

The preference or discrimination must be between States or parts of States. The meaning of the phrase parts of states is an unsettled area of law and has resulted in differences of opinion. Two views have been presented on the issue. More expansive view is from the majority in R v Barger, consisting of Griffith CJ, Barton and OConnor JJ. They held that the words states or parts of states must be read as synonymous with parts of the Commonwealth or different localities within the Commonwealth. Isaacs J (minority) in the same case adopted a more narrow view. He stated that the treatment that is forbidden, discrimination or preference, is in relation to the localities considered as part of States, and not as mere Australian localities or parts of the Commonwealth considered as a single country the pervading idea is the preference of a locality merely because it is a locality, and because it is a particular part of a particular State (@ 107-8). This view was approved in Cameron v Deputy Federal Commissioner of Taxation (1923), by the Privy Council in Deputy Federal Commissioner of Taxation v W R Moran Pty Ltd (1939) and formed the basis of the reasoning in Elliott v Commonwealth (1936). Elliott v Commonwealth Federal transport regulations which made provision for the licensing of seamen, with licensing officers appointed at prescribed ports, including Syd, Melb, Bris, Newcastle and Port Adelaide. No other ports were specified, and thus there was no prescribed port in WA and Tax. Argued that the regulation preferred WA and Tas because there was no port in either of those States to which the regulation applied. Latham CJ: while the regulations were discriminatory, something more than discrimination or lack of uniformity needed to be shown before s 99 could operate. Starke J @ 680 the preference prohibited is preference to localities, though the practical result may be a preference to persons or goods HELD the law provided no preference to Fremantle. The law discriminated against some ports, but laws under s 51(i) can discriminated, though they may not provide preferences. To infringe s 99 it would be necessary to demonstrate that the federal law gave an express preference to a State or part of a State rather than a port or ports in Australia, as such.

The interpretation in Elliott has been followed by a majority of the High Court in Permanent Trustee Australia. Differential treatment and unequal outcomes will not infringe s99 if based on distinctions that are appropriate and adapted to a proper objective. Permanent Trustee Australia Limited v Commissioner of State Revenue (Vic) The Commonwealth Places (Mirror Taxes) Act 1998 (Cth) was designed to ensure that State tax laws continued to apply in Commonwealths exclusive places. Section 6(2) declares that the excluded provisions of a State taxing law, as in force at any time before or after the commencement of this Act, apply, or are taken to have applied, according to their tenor, at that time, in relation to each places in the State that is or was a Commonwealth place at the time 129 Lina Terresa Bui

Section 6(1) defines excluded provisions as meaning he provisions of a state taxing law that would be excluded by s 52(i) of the Constitution. A State taxing law according to s 3 of the Act, is a State law listed in the Schedule to the Act or a State law imposing taxation that is prescribed by regulations. Section 8(2) and (4) of the Act contemplates that State Treasurers could modify taxation liabilities to ensure that taxpayers in Commonwealth public places would have, as nearly as possible, the same taxation liabilities as taxpayers in the State who were not in Commonwealth public places. In 2001 the Comm of State Revenue made an assessment of stamp duty in respect of an instrument of lease that concerned a hotel development on land at Melbs Tullamarine Airport. The land had been previously vested in the Cth, which had leased it to a company for use as an airport. Permanent Trustee had a financial interest in the development. It objected to the assessment on a number of grounds, including that a law made under s 52 of the Constitution is subject to the manner and form requirements in s 55 and also to the anti-preference provision in s 99. HELD Act did not infringe s 99. [91] The scheme of the Mirror Taxes Act may produce differences in revenue outcomes between the States, but that mirrors the differences that exist between the different taxation regimes from State to State. The differential treatment and unequal outcome that is involved here is the product of distinctions that are appropriate and adapted to a proper objective. There is no benefit or advantage enjoyed in or in relation to a Commonwealth places that is not shared by the remainder of the State in which it is located.

DOES IT BREACH SECTION 53 OR 55?

SECTION 53
Section 53 provides that proposes laws appropriating revenue or moneys, or imposing taxation, shall not originate in the Senate. Section 53 limits the power of the Senate in respect of money bills and then ss 54 and 55 qualify the supremacy of the HOR so that it cannot take unfair advantage of s 53 by tacking non-money provisions onto a money bill.

SECTION 55
Laws imposing taxation shall deal only with the imposition of taxation, and any provision therein dealing with any other matter shall be of no effect. Laws imposing taxation, except laws imposing duties of customs or of excise, shall deal with one subject of taxation only; but laws imposing duties of customs shall deal with duties of customs only, and laws imposing duties of excise shall deal with duties of excise only. Section 55 requires that laws imposing taxation should only deal with the imposition of taxation. The purpose of s 55 is to prevent the tacking of extraneous matter to a tax bill as under s53 the senate cannot amend tax bills but only make recommendations (Osborne v Commonwealth). LAWS IMPOSING TAXATION SHALL DEAL ONLY WITH THE IMPOSITION OF TAXATION What is a law dealing only with the imposition of taxation? A threefold division was enunciated in Re Dymond between: 1. 2. 3. provisions which actually impose taxation; provisions which deal with the imposition of taxation, though they do not actually impose it; and provisions which are laws with respect to taxation generally, but dealing with broader aspects and not dealing with its imposition.

This was the law up until Permanent Trustee Australia. A law imposing taxation A law imposing taxation is a law which itself provides the actual imposition of tax (Collector of Customs (NSW) v. Southern Shipping Co). It is a law that literally and simply imposes a tax of a particular kind, at certain rates and specifies the rates (Re Dymond). A law dealing with the imposition of tax Law dealing with the imposition of tax can, not only impose a tax, but also concern itself with other matters (Re Dymond). 130 Lina Terresa Bui

These other matters must still be matters closely associated with the imposition of taxation and not merely matters associated with taxation generally. Eg exemptions, rebates and deductions. A law dealing generally with taxation Federal Parliament cannot include in the one taxation law a provision which actually imposes taxation and provisions on more general taxation matters (Re Dymond). General taxation matters are those that must be dealt with if the imposition of the tax is to be effective: oblige taxpayers to furnish returns of sales, income etc.; make assessments of tax due; collect and recover that tax; appoint a commissioner etc; create offences, penalties and fines etc. Re Dymond An Assessment Act provided matters on general taxation, such as taxation provisions on furnishing returns, collecting sales tax etc. However, it also included a provision (s 46) that stated that any person who failsto furnish any returnshallbe liable to pay additional tax at the rate of ten per centum (of the tax assessable to him)or the sum of one pound, whichever is the greater. D argued that a taxpayer might not in fact furnish a return because the taxpayer thought it would have made no difference anyway, since the taxpayer was not liable for sales tax in the current year. HELD by the majority (Dixcon CJ, Fullagar, Kitto and Windeyer JJ) that a narrower scope for laws dealing with the imposition of tax ought to be adopted. Drew a distinction between matters that dealt with the imposition of tax and those that dealt with tax generally. This is why tax laws have been broken into two Acts a brief one that does the "imposing" of tax, and another with all the details of assessment, collection. Minority (McTiernan, Taylor and Menzies JJ) thought the scope of the phrase dealing with the imposition of taxation included all provisions for assessment, collection and recovery of tax. This approach would go close to collapsing categories 2 and 3 above.

CURRENT VIEW Permanent Trustee Australia adopted the broader view of the minority in Re Dymond. HELD the Mirror Taxes Act was not invalid on the ground that, contrary to s 55, it imposed taxation and dealt with a subject matter or subject matters other than the imposition of taxation. The Act, by applying State taxation laws to Commonwealth places, dealt with one subject matter of taxation only, in conformity with s 55. A law deals with the imposition of taxation, for the purposes of s 55, if it contains provisions which are fairly relevant or incidental to the imposition of a tax on one subject of taxation or are incidental and auxiliary to the assessment and collection of the tax. A law that, in addition to imposing a tax, contains provisions for the assessment, collection and recovery of that tax, is a law dealing with the imposition of taxation, within the meaning of s 55.

DOES IT BREACH SECTION 114?

A state shall not, without the consent of the Parliament of the Commonwealth, raise or maintain any naval or military force, or impose any tax on property of any kind belonging to the Commonwealth, nor shall the Commonwealth impose any tax on property of any kind belonging to a State. A TAX ON PROPERTY OF ANY KIND Concept of property given a broad interpretation by High Court (Bank of NSW v Commonwealth). In this case Dixon said that s 51(xxxi) extends to Innominate and anomalous interests and includes the assumption and indefinite continuance of exclusive possession and control of any subject of property. Narrow view developed in Steel Rails Case. High Court held the tax must be for the ownership or holding of property. Mason, Deane and Gaudron JJ stated @ 248 that a tax on property for the purposes of s114 will exist if and only if it is imposed on a tax payer in reference to a relationship between the tax payer and the property and the relationship is such that it represents a tax on ownership or holding of property. The court also stated that to establish whether a tax was a transaction tax or a tax on property they said one must always look to the substance rather than the form. 131 Lina Terresa Bui

Held in State Bank of NSW that where a attaches to the use of property and that use is central to the concept of ownership that is enough to bring the tax within the ambit of s 114. Steel Rails Case Customs tax issued by Commonwealth on all importations of steel rails. NSW imported rails, and argued they should not be subject to the Commonwealth tax. HELD A customs tax is not a tax in regards to s 114 of the Constitution, as it doesnt relate to property (per Griffith CJ, Barton, OConnor, and Higgins JJ). Therefore, the s 114 exclusion doesnt apply therefore customs tax was required to be paid.

IF State tax on banks business form: Here the Commonwealth is imposing a sales tax on business forms that the bank manufactured for its own use. The same occurred In DCT v State Bank NSW. It was held in that case that to be a breach of s 114 as the tax attached to the use which was central to the concept of ownership. The same will apply in the present situation. IF capital gains tax from the sale of property: In this case the tax is a capital gains tax from the sale of Commonwealth/State property. In South Australia v Commonwealth (1992) the court found this type of tax was within s 114 as the right to dispose of the relevant property is a right central to the concept of ownership of property. Therefore in the present case as the tax is on the sale of property, like in SA v Commonwealth s 114 would operate. South Australia v Commonwealth A Commonwealth income tax levied on the interest derived from the investments of a State instrumentality was not a tax on property within s 114 HELD that an income tax levied by the Commonwealth upon capital gains derived by a State upon the sale of its property was a tax on property belonging to the State within s 114 and therefore invalid Majority said that the course of judicial decisions had confined the operation of s 114 so as only to protect the States (and the Commonwealth) against a tax imposed by reason of the ownership or holding of property In this case it was said that the tax was on income rather than a tax on the ownership or holding of property On the other hand, the capital gains tax derived on the sale of the banks property was imposed by reason of the banks exercise of its right to dispose of the relevant property a right central to the concept of ownership of property

Deputy Commissioner of Taxation v State Bank of NSW A Commonwealth sales tax imposed upon the sale value of goods manufactured by the State Bank of NSW for its own use was a tax on property belonging to a State and therefore invalid Majority said the sales tax was a tax on the use by the State of property belonging to the State Court also held that the State Bank of NSW, a statutory corporation established by the State Bank Act (NSW) was a State for the purposes of s 114 Therefore, as the activities of the government were carried on not only through the departments of government but also through corporations, which are agencies or instrumentalities of government, those were all part of the functions of government for the purposes of interpreting s 114.

IF customs duty: This case is similar to the facts in Steel Rails case. In that case customs duty was levied by the Commonwealth on the importation by a state of steel rails. The court concluded that this was not a tax on the property itself but a tax on the movement of goods. In that case a customs duty on imports was held not to be a tax in the holding of property. The same would apply in the present situation. IF tax on mere use: In SA v Commonwealth it was held not to be a tax on the holding of property as tax was on income rather than a tax on the ownership property. The same would apply in the current situation and therefore s 114 would not apply. IF fringe benefits: In this case the Commonwealth/State is taxing fringe benefits. A tax with regards to fringe benefits is not a tax on ownership or st holding. Rather it concerned benefits that employees had by virtue of their employment: 1 Fringe Benefits case. Therefore s 114 would not apply here.

132 Lina Terresa Bui

IF tax on transaction: In the Steel Rails Case it was held that the movement of property is not the ownership or holding of property, it is a tax on importation and therefore a tax on the transaction itself.

STATE ISSUE - IS TAX A CUSTOMS OR EXCISE DUTY?

The power of the Parliament to impose duties of customs and of excise, and to grant bounties on the production or export of goods, shall become exclusive. Purpose of s 90 is to protect Commonwealth tariff policy, effectuate free trade in the Commonwealth (Ha) and give the real Commonwealth control over the tax of goods (Parton). The Commonwealths exclusive power to levy duties of customs and excise is exclusive of the States (Peterswald v Bartley) and of the Territories (Capital Duplicators v Australian Capital Territory). WHAT IS AN EXCISE? Early view from Peterswald v Bartley is that excise were taxes on the production and manufacture of articles. This narrow view attracted support in Ha. Broader view was approved in Capital Duplicators v ACT and HA - excise duty was a tax in respect of goods at any time in the production or distribution to the point of consumption or an inland tax on a step in production, manufacture, sale or distribution of goods. Ha v. NSW (1997) This case concerned franchise licence fees upon wholesale and retail sale of tobacco. The licence was a monthly licence and the relevant period for the backdating device was defined as the month commencing 2 months before the commencement of the licence (similar to previous cases). The rate of the fees concerned were up to 100% of the value of tobacco sold in the previous period. HELD that these franchise licence fees were duties of excise. The majority (Brennan CJ, McHugh, Gummow and Kirby JJ) dismissed the contention that such fees were merely fees for a licence to carry on a business; in reality, the fees were revenue-raising taxes imposed on the sale of tobacco. o They applied the dissenting judges (Brennan and McHugh JJ) from Philip Morris. o Necessary to uphold the wide view of excise so as to truly maintain free trade within the Cth o Section 90 intended to give the Cth a strong revenue base, at the expense of the states Minority (Dawson, Toohey and Gaudron JJ) that s90 was not intended to create one economy or prevent states from revenue raising o or prevent states passing taxes that fall on local and imported goods equally at the sale stage o purpose of s 90 was to prevent protectionist policies and create free trade, but to achieve this, dont need to stop state taxes on anything further than production/manufacture

The majority in Ha v NSW formulated a new test that looks at the practical effect of the tax. The Court said in determining whether it is an excise look at: 1. 2. 3. 4. 5. 6. Length of tax period (if the length of the tax period is small it indicates a close proximity to goods so the tax is probably an excise) Ad valorem (arithmetic relationship between quantity/value of goods and tax) (This indicates a close proximity to goods so the tax is likely to be an excise.) Item taxed (If the item is crucial to the production process, it is likely to be an excise.) Who pays (if the tax increases the price of goods, it is likely to be an excise) Number of times tax imposed (if only once it is likely to be an excise) Size of the tax (If large, Revenue raising=excise, if small may indicate a fee for privilege.)

133 Lina Terresa Bui

TRADE
AND

COMMERCE

134 Lina Terresa Bui

RELEVANT PROVISION
Section 51. The Parliament shall, subject to this Constitution, have power to make laws for the peace, order, and good government of the Commonwealth with respect to: (i) trade and commerce with other countries, and among the States.

IS IT TRADE AND COMMERCE?

Trade and commerce are not accorded a strict definition, they are treated as terms of common knowledge. A wide range of commercial, employment and transportation laws can be supported, and even in early cases, the terms were given a broad meaning. buying and selling are the very heart of trading (R v Trade Practices Tribunal, ex parte St George County Council). TRADE AND COMMERCE Trade includes the following: Transport or delivery - including the act of transporting or delivering for reward (ANA v Commonwealth). In this case, a law authorizing the government to conduct a transport service for inter-State trade was held to be a law with respect to trade and commerce amongst the State. Activities preliminary to trade - the activities preliminary to trade fall within the scope of the trade and commerce power (W&A McArthur v Qld). In this case, mutual communing, the negotiations, verbal and by correspondence, the bargain, the transport and delivery were all held to fall within the scope of trade and commerce. Intangibles - trade and commerce covers intangibles (Bank of NSW v Commonwealth). In this case, it was held by Dixon J that trade and commerce covers intangibles as well as the movement of goods and persons, the supply of gas, transmission of electric current, visual signals, transportation, traffic, movement and communication. Financial transactions - this provision may be relied upon in order to regulate financial transactions (Bank of NSW v Commonwealth). Creation of government owned transport services - this provision may be relied upon in order to create government owned transport services (Huddart Parker v Commonwealth). Regulation of crews on ships, ports and airlines - this provision may be relied upon in order to regulate crews on ships, ports and airlines (Huddart Parker v Commonwealth). Importation and exportation of goods - a law imposing a conditional prohibition on exportation is a law dealing with exportation of goods, a matter at the heart of trade and commerce with other countries (Murphyores v Commonwealth). Irrelevant that the conditions are made by reference to criteria having little or no apparent relevant to trade and commerce Regulation of hygiene, transport and labeling of export meat - in OSullivan v Noarlunga Meat the High Court held that a law that regulated hygiene, transport and labeling of export meat in premises in SA was a law within the scope of s 51(i) as it only regulated meat for export out of Australia.

Just because an activity is an essential preliminary condition does not automatically mean that it is within the trade and commerce power (Grannall v Marrickville Margarine). Grannall v Marrickville Margarine Dixon CJ explained that s 51 extends to allow the Commonwealth in some cases to regulate manufacture or production, where there is a direct connection for effectuating something within the heart. The words with respect to require a relevance to or connection with the subject assigned to the Commonwealth. Every legislative power carries with it authority to legislate in relation to acts, matters and things the control of which is found necessary to effectuate its main purpose. Thus carries with it power to make laws governing or affecting many matters that are incidental or ancillary to the subject matter.

NOT TRADE AND COMMERCE In Granall v Marrickvile Margarine Dixon CJ, McTiernan, Webb and Kitto JJ recognised that manufacture, production or importation might be an essential preliminary condition to trade and commerce between the States in merchandise but that does not deem it trade and commerce among the States (@ 71-72). Even if it is for interstate trade, it is not part of trade and commerce because interstate trade begins with the movement of goods. There is, however, an exception where the goods are objectively geared towards overseas or interstate trade (OSullivan v Noarlunga). 135 Lina Terresa Bui

NEED FOR A PROFIT The motive of profit is not essential (R v Trade Practices Tribunal, ex parte St George County Council). R v Trade Practices Tribunal, ex parte St George County Council Issue was whether the County Council was a trading corporation. CC bought electricity in bulk from the NSW Electricity Commission and on sold to consumers. Legislation that set up CC said it had to supply it as cheap as possible - no profit motive CC had to supply to all at the same rate on the same terms. HELD it was a trading corporation, even though there was no profit motive and no discriminating terms.

ARE PROFESSIONALS ENGAGED IN TRADE OR COMMERCE? It is unclear whether a professional is engaged in trade or commerce. Dentist was not found to be a trader (R v Small Claims Tribunal, ex parte Gibson) Consulting Construction Engineers supply services in trade or commerce (Bond Corporation v Thiess Contractors) Lawyers found to be engaging in trade or commerce (lawyers will however remain largely immune as they are rarely in interstate trade) (Goldfarb v Virginia State Bar (US Case)) Australian Red Cross was not a trading corporation but the RPA Hospital was found to be a trading corporation (E v Australian Red Cross) Universities were trading corporations (Quickendon v OConnor)

WITH OTHER COUNTIRES OR OTHER STATES

Section 51(i) only covers interstate and international trade and commerce, as opposed to intrastate trade and commerce. WITH OTHER COUNTRIES Section 51(i) enables the Commonwealth to prohibit, regulate and control the importation and exportation of goods for any purpose (Murphyores Inc v The Commonwealth). Murphyores Inc v Commonwealth Regulations prohibited the export of mineral sands from Australia except with the approval of a Commonwealth Minister = heart of power Minister would made it clear that he would deny approval if the extraction of the concentrates would damage the environment of Fraser Island Murphyores held a mining lease obtained by the Qld Government over Fraser Island Murphyores applied export approval prior to commencing mining operations Murphyores sought an injunction against the Minister and a declaration that the Minister could not consider environmental issues when deciding whether or not to approve the export proposal The validity of a Commonwealth law was to be assessed by the legal operation of the law by what the law commanded or prohibited (e.g. export unless approval) HELD that the fact that the Minister for Minerals and Energy had regard to environmental considerations in making a decision to refuse permission to export did not affect the validity of the regulation. Regulation prohibited export of a commodity and that prohibition determined the character of the law as one with respect to trade and commerce with other countries Once the approval was within the heart, reasons for withholding approval irrelevant Therefore it is irrelevant that the criterion has little or no relevance to trade and commerce It is enough that the law deals with the permitted topic and does not cease to deal with that topic by a factor extraneous to the topic may be taken in account in the relaxation of the prohibition.

The power in s 51(i) authorises the following: Laws regulating charges to be paid for air flights in respect of travel to or from Australia on all sectors of flights to overseas destinations - including sectors beyond the first stopping place outside Australia (R v Halton; Ex parte AUS Student Travel). Commonwealth may compel persons engaged in trade and commercial transactions within Australia involving prohibited imported narcotics to pay pecuniary penalties in respect of particular dealings, even transactions that take place after the process of importation has come to an end (R v Smithers; Ex parte McMillan). 136 Lina Terresa Bui

The regulation of extraterritorial trading activities connection to overseas trade, including the conditions of sale of goods arriving in a foreign destination (Crowe v The Commonwealth). The regulation of investments in foreign countries (R v Hughes).

AMONG THE STATES If the law applies to transport, anything that crosses a border is interstate trade and commerce. Movement of intangibles (like credit) across borders is interstate trade and commerce (Bank of NSW v Commonwealth). IF law applies to making of a contract: If the law refers to the making of a contract, rather than the delivery, the contract must, expressly or by necessary implication, contemplate delivery across a border (W & A McArthur v Queensland). W & A McArthur v Queensland The Sydney company, with no warehouse or stocks of calico in Queensland, conducted its business in Queensland through sales representatives who would enter into agreements of the following types which included: a) Agreements to sell goods of particular description sold by the company to be delivered in Qld; or b) agreements to sell goods of that description but stipulating that goods are to be dispatched from Sydney warehouse and delivered to purchasers in Qld. HELD only the (b) type agreements were within the scope of s 92, as in the case of the others, the K could have been effected entirely within Queensland. Need express stipulation or necessary implication that goods to come from Sydney for it to be interstate T&C. A deal that might result in movement of goods across borders is not enough must be by express stipulation or necessary implication

If there is a business in multiple states: A business in two States is not necessarily doing trade and commerce among the States (Hospital Provident Fund Pty Ltd v Victoria (1953) 87 CLR 1).

CHARACTERISATION
HEART OF THE POWER
The power conferred by s 51(i) enables the Parliament to prohibit, regulate and control the importation and exportation of goods as these matters are at the heart of trade and commerce with other countries (Murphyores Inc Pty Ltd v Commonwealth). Murphyores Inc Pty Ltd v Commonwealth The Customs Regulations enacted under the Customs Act prohibited the export of the mineral zircon without Ministerial approval. In 1974, Murphyores sought the approval of the relevant Minister, in order to commence extraction of zircon from ecologically fragile Fraser Island. The Minister advise the company that approval would not be given until an environmental impact study was completed. The Minister was fulfilling a requirement under the Environmental Protection Act. Murphyores sought an injunction to the prevent the environmental study proceeding in anticipation of a report unfavourable to the mining proposal, and rejection by the Minister. HC rejected Ms submission that Minister was not permitted to take environmental matters into account when making an export decision. It also rejected the application to prevent the environmental report form being presented to the Minister. HELD by Mason J @ 19 that the power to legislate with respect to trade and commerce with other countries necessarily comprehends the power to select and identify the persons who engage in, and the goods which may become subject of that activity. By imposing a conditional prohibition on exportation, the law is dealing with exportation of goods. Irrelevant that the conditions are made by reference to criteria having little or no apparent relevance to trade and commerce.

The power conferred by s 51(i) also enables the Parliament to regulate trade and commerce internationally or between states regarding: Who can be employed (Huddart Parker Ltd v Commonwealth); 137 Lina Terresa Bui

Conditions of work (R v Wright; Ex parte Waterside Workers Federation of Australia {international}; R v Foster; Ex parte Eastern and Australian Steamship Co Ltd {interstate}).

The power conferred by s 51(i) also enables the Parliament to protect interstate and overseas trade and commerce (Seamens Union v Utah Development). Commonwealth participating in interstate or overseas trade and commerce, including creating a corporation to do so (Airlines of New South Wales Pty Ltd v New South Wales (No 2)).

INCIDENTAL MATTERS
The Commonwealth can regulate other areas of activity, or even activity that appears to occur wholly within a state, where it does so ancillary to, or in order to, property regulate trade and commerce interstate and overseas. The regulation of production or manufacture may be within the scope if it is incidental to the regulation of trade and commerce, despite it being wholly within a state (Grannall v Marrickville Margarine Pty Ltd). Every grant of power in the constitution includes an implied power to legislate on those matters that are incidental or ancillary to the grant of power itself (Grannall v Marrickville Margarine Pty Ltd). The accepted ways a law may be incidental to a grant of power: a) b) c) d) Incidental to subject matters Substantially connected to subject matter Having a direct or casual effect on subject matter Power needed so the direct power is not ineffective.

In terms of the trade and commerce power, this means that the Commonwealth may be able to regulate activities carried out within a state where those activities are inexorably linked with interstate or international trade in a particular commodity (Noarlunga Meat). Fullagar J in Noarlunga Meat: ... all matters which may affect beneficially or adversely the export trade of Australia in any commodity produced or manufactured in Australia must be the legitimate concern of the Commonwealth. Such matters include not only grade and quality of goods but packing, get-up, description, labelling, handling, and anything at all that may reasonably be considered likely to affect an export market by developing it or impairing it. It seems clear enough that the objectives for which the power is conferred may be impossible of achievement by means of a mere prescription of standards for export and the institution of a system of inspection at the point of export. It may very reasonably be thought necessary to go further back, and even to enter the factory or the field or the mine. How far back the Commonwealth may constitutionally go is a question which need not now be considered, and which must in any case depend on the particular circumstances attending the production or manufacture of particular commodities. But I would think it safe to say that the power of the Commonwealth extended to the supervision and control of all acts or processes which can be identified as being done or carried out for export.

VERTICAL INTEGRATION The Court in Grannall v Marrickville held that the Commonwealth can legislate with respect to interstate and overseas trade and commerce, thereby allowing it to regulate all matters necessary for effectuating something within the heart of the power. This is known as vertical integration of the trade and commerce power. Noarlunga and Crowe are examples of how vertically integrated processes come within the trade and commerce power. In Noarlunga the Commonwealth regulations prohibited the export of meat not slaughter in accordance with the regulations. This was clearly within the heart of the power. The regulations also stated that all premises used for the slaughter of meat for export were to be carried out in accord with the regulations. Fullagar J held that the s 51(i) extended back to include power to control the quality of export commodities. However his honour stressed that the process on the facts was identifiable and clearly distinguishable from the domestic market. OSullivan v Noarlunga Meat Ltd (1954) 92 CLR 565 Noarlunga owned meatworks and slaughtered for domestic & overseas sale. Noarlunga met Commonwealth statutory license requirements but not state requirements Prosecuted under state act for slaughter of lambs (all for export) without state licence 138 Lina Terresa Bui

Noarlunga argued that as they were registered under Cth law and the Cth law prevails over the state law by s109, they could not be prosecuted under the state act for not holding a state licence HELD that within every grant of power under the constitution there was a Cth power to legislate and control those matters, which if the Cth could not control, would render the core power ineffective Power for trade and commerce includes the power to control the quality of goods for export Extends to a power to control any matter which may affect beneficially or adversely the export trade of Australia in any commodity produced or manufactured in Australia as this is the legitimate concern of the Cth Would extend to grade and quality of goods, and packing, get-up, description, labelling, handling etc Anything that might reasonably be considered likely to affect an export market (by developing or impairing it) This control may not be achieved by setting standards and inspecting at point of export the Cth may have to go back further into the factory or the field or the mine slaughter for export is objectively different to slaughter for home consumption due to different slaughtering, freezing and packaging procedures (fussy importers eg. Iran, the US) Stated that the same reasoning may not apply to other commodities eg. wheat etc as sowing wheat for export may have no objective element Thus, Cth regulations within power under s51(i) Cth held to cover the field and thus the state act was inconsistent (decided 3:3 and so Dixon CJ had casting vote [s23(2)(b) Judiciary Act 1903 (Cth)] and held acts inconsistent)

INTRASTATE TRADE AND COMMERCE

The Commonwealth power can reach into intrastate trade or commerce when there is a real connection with interstate or international trade and commerce or where the two are so intermingled (R v Burgess; Ex parte Henry). In Redfern v Dunlop Rubber Australia Ltd the High Court held that the Australian Industries Preservation Act could apply where there was a mingling of inter and intra state trade, but not where there was solely intrastate trade. In Swift v Boyd Parkinson the High Court held legislation relating to poultry killing and processing because about 5% were for export, to be valid, but found that the commonwealth did not intend to over-ride QLD legislation for the 95% of production. In Airlines of New South Wales Pty Ltd v New South Wales (No 2), the court held that regulations relating to airlines were valid even with respect to intra state flights because it may have an impact on international and intrastate trade and commerce because they had become inseparable. Swift Australian Co Pty Ltd v Boyd Parkinson (1962) Swift operated a poultry abattoir in Nth Qld 5% of output sold overseas, the balance sold in Qld or interstate Plant registered under Cth regulations but not under Qld regulations Swift prosecuted for breach of Qld Poultry Industry Acts Swift argued the Qld Act was invalid by s109 as inconsistent with the Cth regulations Further argued that Cth could regulate the whole of commercial activity where interstate or Overseas cannot be separated from intrastate activities HELD (by Dixon CJ, McTiernan, Kitto, Taylor, Windeyer and Menzies JJ that the Commonwealth regulations were only intended to cover processing of poultry for export or interstate trade and therefore no inconsistency. McTiernan said that that the regulations were not within power because the distinction between interstate and intrastate could not be maintained. Menzies, Taylor and Owen JJ held that the regulations were within power where a factory had mingled output. For export standards to be maintained, Commonwealth must have power to control the whole factor. The Commonwealth can regulate all aspects of meat/poultry works where there is no separate production line for output intended for the local market.

Redfern v Dunlop Rubber Australia Ltd (1964) There was an agreement b/w the manufacturers of motor vehicle tyres, by which they agreed not to supply their produce to a retailer who was selling tyres at a discount They were prosecuted under s4(1) of the Australian Industries Preservation Act (Cth) which prohibited restraint of trade contracts Some manufacturers had factories producing tyres only in Victoria, where the retailers was, and argued before the HCA that s 4(1) could not apply to them as within intrastate trade Other manufactures involved had interstate factories 139 Lina Terresa Bui

HELD the trade and commerce power could be used to regulate contracts with respect to interstate trade even if they also related to intrastate trade Power can only extend in this way where the intrastate trade and commerce is inseparably connected with the interests trade and commerce Recognised that some commercial activities have a composite character and Cth cannot only regulate the interstate parts of them Integrated character may derive from way persons set up their business ie the manufacturers here did not split up their contracts into refusals to supply from their Victorian and interstate factories

Airlines of NSW Pty Ltd v NSW (No. 2) (1965) 113 CLR 54 Regulations regarding licensing system covering ALL air navigation, not just interstate and international services. Reg 198: prohibited use of aircraft for transport unless licensed. Reg 199: empowered the Director-General, when issuing licence for intrastate airline service, to consider matters concerned with safety, regularity and efficiency of air navigation and no other matters Reg 200B: where a person had a licence under reg 198 they were able to conduct any air public transport regardless of state law HELD that regulations 198 and 199 were both were within the incidental area of s 51(i) because they protected against danger of physical interference with interstate operations. The regulations protected against physical interference with interstate air traffic (a topic squarely within federal power) and thus were with respect to interstate trade and commerce Otherwise the Cth would not be able to effectively regulate overall interstate and overseas airline travel (i.e. use same airports etc). The ability to control safety aspects of intrastate air traffic unique, much emphasis placed on the nature of the activity Stressed that if the effect on interstate air traffic was purely consequential (ie a loss of profit) that would not put the laws within Cth power: Kitto J Reg 200B outside power because stopping laws applying which stopped persons running a certain route (which the state law purported to do) did not protect interstate trade from physical interference so preventing the state laws from having effect did not lead to physical safety of the interstate routes

140 Lina Terresa Bui