Precedent

What is the doctrine of precedent (stare decisis)?

Australian Agricultural Co v Federated Engine-Drivers & Firemen’s Association (Engine-

Drivers’ Case) (1913) HCA
Isaacs J
 Rule: Whilst fully sensible of the weight to be attached to such decisions, their Lordships are at the same time
bound to examine the reasons upon which the decisions rest, and to give effect to their own view of the law.
 Conclusion: Where the prior decision is manifestly wrong, then, irrespective of consequences, it is the
paramount and sworn duty of this Court to declare the law truly.

John v Federal Commission of Taxation (1989) HCA

Mason CJ, Wilson, Dawson, Toohey and Gaudron JJ
 In Cth v Hospital Contribution Fund (1982), Gibbs J specified 4 matters which in that case justified departure
from earlier decisions:
1. The earlier decisions did not rest upon a principle carefully worked out in a significant succession of cases.
2. A difference between the reasons of the justices constituting the majority in one of the earlier decisions.
3. The earlier decisions had achieved no useful result but on the contrary had led to considerable
inconvenience.
4. The earlier decisions had not been adequately acted on in a manner which militated against
reconsideration.

EXTRACT: Leslie Zines, The High Court and the CON

 Argument: The Court should not allow adherence to precedent to divert it from what it now regards as the
true interpretation of the CON.
 Counter-argument: Instability may result when each judge construes the CON individually. The authority of
the court as an institution may also be at stake.
 Opinion: It is highly inappropriate in the case of a CON intended to endure for a very long time and to serve
the needs of succeeding generations, that past decisions should not be departed from when new social
problems arise or later experience shows those decisions to be inadequate or socially damaging.

Stevens v Head (1993) HCA

Background
 There have been examples of refusal by members of the HC to defer to precedent when this conflicts with
their own perceptions of what the CON requires, e.g. Deane and Gaudron JJ.

Deane J (dissenting)
 I am fully conscious of the weight of the considerations which support the view that a decision of the Court
which still enjoys majority support should be treated by an individual member of the Court as being as binding
upon him or her as it is on the members of every other Australian court.

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  There are, however, weighty statements of authority which support the proposition that, in matters of
fundamental constitutional importance, the members of this Court are obliged to adhere to what they see as
the requirements of the CON of which the Court is both a creature and the custodian.

Gaudron J (dissenting)
 The CON prevails over the pronouncements of this Court.

Qld v Cth (Second Territory Senators Case) (1977) HCA

Barwick CJ (dissenting)
 It is fundamental to the work of this Court and to its function of determining, so far as it rests on judicial
decision, the law of Australia appropriate to the times, that it should not be bound in point of precedent but
only in point of conviction by its prior decisions.
 In the case of the CON, it is the duty of each Justice, paying due regard to the opinions of other Justices past
and present, to decide what in truth the CON provides.
 The fact that a particular CON has long been accepted is a potent factor for consideration: but it has not
hitherto been accepted as effective to prevent the members of the Court from departing from an earlier
interpretation if convinced that it does not truly represent the CON.
 To refuse to decide in a constitutional case what one is convinced is right because there is a recent decision of
the Court is to deny the claims of the CON itself and to substitute for it a decision of the Court.

Gibbs J
 No Justice is entitled to ignore the decisions and reasoning of his predecessors, and to arrive at his own
judgment as though the pages of the law reports were blank, or as though the authority of a decision did not
survive beyond the rising of the Court.
 “Changes in the number of appointed Justices can … never of themselves furnish a reason for review” of a
previous decision, per Barton J. This is because there is “the need for continuity and consistency in judicial
decision”.
 Conclusion: It is my duty to follow WA v Cth, although in my view it was wrongly decided.

Shaw v Minister for Immigration and Multicultural Affairs (2003) HCA

Facts
 In Re Patterson (2001), McHugh, Kirby and Callinan JJ joined Gaudron J – who had dissented alone in Nolan
(1988) – in overruling Nolan; but in Feb 2003 Gaudron J resigned and was replaced by Heydon J.
 Thereupon, in Shaw, Heydon J joined Gleeson CJ, Gummow and Hayne JJ in overruling Patterson and
reinstating Nolan, leaving McHugh, Kirby and Callinan JJ in dissent.

Kirby J (dissenting)
 This Court should not use chance happenings affecting its composition to change its recent statements of the
governing law.
 Those who recognise the stabilising element of the doctrine of precedent in our legal system will ordinarily
accept a determination of a rule, especially where that determination is recent and concerns exactly the same
legal issue. Otherwise, every important constitutional decision will be resubmitted for redetermination
following new appointments until the dissenter gets his or her way.

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  Conclusion: The view endorsed in Nolan but overruled in Re Patterson should not continue to revisit this
Court awaiting the hoped for arrival of a majority to give effect to an opinion about the CON dismissed in the
past in an authoritative decision on the point.

Gleeson CJ, Gummow and Hayne JJ

 The ruling of the four judges in Re Patterson was not “authoritative”, since the four judges had given different
emphases to the factual elements on which the application of their ruling depended.
 The Court should be taken as having departed from a previous decision, particularly one involving the CON,
only where that which purportedly has been overthrown has been replaced by some fresh doctrine, the
elements of which may readily be discerned by the other courts in the Australian hierarchy.

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 THE HIGH COURT AND CONSTITUTIONAL INTERPRETATION - A
Pre-Engineers
Reserved State Powers

R v Barger (1908) HCA

Facts
 Challenge to s 2 of Excise Tariff Act 1906 (Cth) as invalid exercise of taxation power in s 51(ii).
 Section 2 provided that excise on agricultural goods not payable where goods manufactured according to
labour conditions judged by Cth to be fair (either because remuneration fair or because in accordance with
Conciliation and Arbitration Act 1904 (Cth)).

Issue
 Was s 2 a law w.r.t. “taxation” under s 51(ii) of the Con?

Held
 Section 2 could not be supported by s 51(ii).
 True character of Act is not taxation law but law regulating labour conditions.
 Invalid because reg of labour conditions within States is an internal/domestic matter, falling under reserved
State power.
 Essential majority argument: “it is clear that the power to pass such an Act must be vested either in
the P’ment or in the State legislatures.” Because the subject-matter lay within State legislative
power, it therefore could not lie within the Cth’s taxation power.

Griffith CJ, Barton and O’Connor JJ

 The grant of the power of taxation is a separate and independent grant. In interpreting the grant
it must be considered not only with reference to other separate and independent grants, but also with
reference to the powers reserved to the States.
 The power to pass such an Act must be vested either in the P’ment or in the State legislatures. If
the tax is an Excise duty within the meaning of s 90, the power of the P’ment is exclusive, and
the State could not impose it.
o Reg of the conditions of labour is a matter relating the internal affairs of the States, and is
therefore reserved to the States and denied to the Cth, except so far as it can be brought
within one of the powers enumerated in s 51.
 What is the substance of this impugned law? If it is in substance a law relating to taxation, the Cth can
legislate w.r.t. it. If it is in substance something else – it infringes the Con.
o The substance of the excise would be a reg of the conditions of labour in the industry in
question.
o It is not an exercise of the power of taxation conferred by the Con. Therefore the leg’n is
invalid, i.e. because the subject-matter lay within the State legislative power, it therefore could not
lie within the Cth’s taxation power.

Isaacs and Higgins JJ (dissenting)

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  In construing the CON, one must first give full effect to the specific grants of Cth power. Any
concept of a residue retained by the States can only meaningfully refer to what is left over after
the Cth’s powers are determined.

The Engineers’ case

Amalgamated Society of Engineers v Adelaide Steamship Co Ltd (Engineers’ Case) (1920) HCA
Facts
 Claim by a union of engineers in the Cth Ct of Conciliation and Arbitration for an award relating to 843
employers across Australia.
 In WA, the employers included three govtal employers.

Issues
 Did award made under Cth industrial relations leg’n bind govt employers in WA?
 Clearly not, if doctrine of implied immunity of instrumentalities was good law – but was it?
 Was the leg’n in question validly enacted under s 51(xxxv) power to make laws w.r.t. conciliation and
arbitration for prevention and settlement of interstate industrial disputes?

Knox CJ, Isaacs, Rich and Starke JJ

 The existing authority is lacking in principle and not based on text of CON but on implications said to be
necessary but really based on ‘personal opinion’ of judge.
 To restore order, and in keeping with its proper institutional function, Court needed to return to literal
meaning of CON interpreted as ordinary statute.
 The CON is the political compact of the whole of the people of Australia, enacted into binding law by the
Imperial P’ment, and it is the chief and special duty of this Court faithfully to expound and give
effect to it according to its own terms, finding the intention from the words of the compact, and
upholding it throughout precisely as framed.
 Chief argument of the States: Relied on the implied immunity of instrumentalities.
 Response: Griffith CJ said: “It is manifest that, since the rule is founded upon the necessity of the
implication, the implication is excluded if it appears upon consideration of the whole CON that the Cth, or,
conversely, the State, was intended to have power to do the act the validity of which is impeached.” Then,
how is that intention to be ascertained? The CJ ascertains it by reference to outside circumstances, not of law
or constitutional practice, but of fact.
o It is an interpretation of the Con depending on an implication which is formed on a vague,
individual conception of the spirit of the compact  it is arrived at by the Ct on the
opinions of Judges as to hopes and expectations respecting vague external conditions.
o This method of interpretation cannot provide any secure foundation for Cth or State action, and must
inevitably lead to divergences and inconsistencies more and more pronounced as the decisions
accumulate.
 Argument: American cases are irrelevant.
 American authorities are not a secure basis on which to build fundamentally w.r.t. our own Con.
 Reasons: It is essential to bear in mind 2 cardinal features of our political system: (1) common sovereignty of
all parts of the British Empire; and (2) the principle of responsible govt.

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 o Lord Haldane: The institution of responsible govt is almost the creature of the Legislature. This is not
so in America.
 We therefore look to the judicial authorities which are part of our own development, which have
grown up beside our political system, have guided it, have been influenced by it and are consistent with it, and
which, so far as they existed in 1900, we must regard as in the contemplation of those who, whether in the
Convention or in the Imperial P’ment, brought our Con into being, and which, so far as they are of later date,
we are bound to look to as authoritative for us.
 Method: The “settled rules of construction” are to be applied.
 The first, and “golden rule” or “universal rule”: Exclude consideration of everything excepting the state
of the law as it was when the statute was passed, and the light to be got by reading it as a whole. Read the
language of the statute in what seems to be its natural sense.
 Must look to the terms of the instrument by which, affirmatively, the legislative powers were created, and by
which, negatively, they are restricted. If what has been done is leg’n, within the general scope of the
affirmative words which give the power, and if it violates no express condition or restriction by which that
power is limited it is not for any Court to inquire further, or to enlarge constructively those conditions and
restrictions.
 When the text is ambiguous recourse must be had to the context and scheme of the Act.
 The doctrine of political necessity, as means of interpretation, indefensible on any ground.
 Reasons:
o From its nature, it is incapable of consistent application.
o It is inappropriate for the judicial branch to determine political necessities.
o A possible abuse of powers is no reason for limiting the natural force of the language creating them.
o The extravagant use of the granted powers in the actual working of the Con is a matter to be guarded
against by the constituencies and not by the Courts.
 Application to present case:
o Section 51(xxxv) is in terms so general that it extends to all industrial disputes in fact extending
beyond the limits of any one State, no exception being expressed as to industrial disputes in which
States are concerned; but subject to any special provision to the contrary elsewhere in the Con.
o Section 107 contains nothing which in any way either cuts down the meaning of the expression
"industrial disputes" in s 51(xxxv) or exempts the Crown in right of a State, when party to an industrial
dispute in fact, from the operation of Cth leg’n under s 51(xxxv).
o It is a fundamental and fatal error to read s 107 as reserving any power from the Cth that falls fairly
within the explicit terms of an express grant in s 51, as that grant is reasonably construed, unless that
reservation is as explicitly stated.
o The moment State leg’n encounters repugnant Cth leg’n operating on the same field the
State leg’n must give way.
o The principle we apply to the Cth we apply also to the States, leaving their respective acts of leg’n full
operation within their respective areas and subject matters, but, in case of conflict, giving to valid Cth
leg’n the supremacy expressly declared by the CON, measuring that supremacy according to the very
words of s 109.
 Conclusion: States, and persons natural or artificial representing States, when parties to industrial disputes in
fact, are subject to Cth leg’n under s 51(xxxv) of the Con, if such leg’n on its true construction applies to them.

Reactions to the Engineers’ case

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 VIC v Cth (Payroll Tax Case) (1971) HCA
Windeyer J
 I have never thought it right to regard the discarding of the doctrine of the implied immunity of the States and
other results of the Engineers' Case as the correction of antecedent errors or as the uprooting of heresy. To
return today to the discarded theories would indeed be an error and the adoption of a heresy. But that is
because in 1920 the CON was read in a new light, a light reflected from events that had, over twenty years,
led to a growing realization that Australians were now one people and Australia one country and that national
laws might meet national needs.
 As I see it the Engineers' Case, looked at as an event in legal and constitutional history, was a consequence of
developments that had occurred outside the law courts as well as a cause of further developments there. That
is not surprising for the CON is not an ordinary statute: it is a fundamental law. In any country where the spirit
of the common law holds sway the enunciation by courts of constitutional principles based on the
interpretation of a written CON may vary and develop in response to changing circumstances.

EXTRACT: RTE Latham, “The Law and the Cth” (1937)

 The revolutionary Engineers’ Case marks the point at which the minority’s heterodoxy became the new
orthodoxy.
 The case was decided on high constitutional ground, when a much simpler argument would have sufficed.
 It cut off Australian constitutional law from American precedent, a copious source of thoroughly relevant
learning, in favour of the crabbed English rules of statutory interpretation, which are one of the
sorriest features of English law, and are particularly unsuited to the interpretation of a rigid CON.
 The majority judgment was self-contradictory in two ways:
1. It declared that the Con was to be interpreted by its words alone; yet the court, in reaching that very
proposition, took notice of responsible govt, a matter far more extrinsic to strict law, and far less
admissible by the English rules of statutory construction themselves, than the close verbal
correspondence with the US Con upon which the early HC had relied to bring American authorities in
point.
2. This very judgment which abandoned American precedents would not have been possible if the
majority had not followed the loose American rather than the strict English view of the binding
authority of precedent.
 Fundamental criticism: Its real ground was nowhere stated in the judgment. The real ground was the view
that:
o The Con had been intended to create a nation, and that it had succeeded.
o That in the Great War the Nation had in fact advanced in status while the States stood still, and that
the peace had not brought a relapse into the status quo ante bellum.
o That a merely contractual view of the Con was therefore out of date, and its persistence in the law
was stultifying the Cth industrial power, which they believed to be a real and vital power.
o That the words of the Con permitted the view of the federal relationship which the times demanded.

The Jumbunna Principle

Jumbunna Coal Mine NL v Victorian Coal Miners’ Association (1908) HCA
O’Connor J
 We are interpreting a Con broad and general in its terms, intended to apply to the varying conditions which
the development of our community must involve.

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  Where the question is whether the CON has used an expression in the wider or in the narrower sense, the
Court should always lean to the broader interpretation unless there is something in the context or in the rest
of the CON to indicate the narrower interpretation will best carry out its object and purpose.

Pape v Commissioner of Taxation [2009] HCA

Summary
 Heydon J, dissenting, tried to rein in indiscriminate use of dicta from these three cases.
 Constitutional grants of power should not be given wide meaning where context indicates otherwise
 Context includes federal nature of CON and history of its enactment

Heydon J (dissenting)
 O’Connor J’s approach in its totality: From O’Connor J’s judgment in the Jumbunna case: “unless there is
something in the context or in the rest of the CON to indicate that the narrower interpretation will best carry
out its object and purpose.”
o O’Connor J’s concerns: to look at context, to view the CON as a whole, and to examine the
circumstances surrounding the enactment.
o For him, a key element in the “context”, the “other provisions” and the “historical facts surrounding
the bringing of the” Con into existence was the federal nature of the CON.
 Misapplication of O’Connor J’s approach
o Wrong approach: If there is a controversy about a constitutional expression, one of whom
advocates a “wide” meaning, and the other of whom advocates a “narrow” meaning, the former
should always be adopted.
 Original meaning: It is wrong to assume that the Con has changed since 1901. O’Connor J’s reference to
applying the broad and general terms of the CON to the varying conditions which the community would face
after 1901 does not stand alone in his judgments.
o While the meaning does not change, the meaning is broad.
o Since the CON is a statute, and is to be construed as a statute, the idea that a statute can change its
meaning as time passes, so that it has two contradictory meanings at different times, each of which is
correct at one time but not another, without any intervention from the legislature which enacted it, is,
surely a minority opinion.

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 THE HIGH COURT AND CONSTITUTIONAL INTERPRETATION – B
Why is the method of constitutional interpretation the Court adopts important?
 Judicial interpretation of the CON has importance consequences, not just for the immediate parties to the
litigation but also for the validity of leg’n and executive acts.
 The judicial invalidation of leg’n contradicts the express wishes of the elected representatives of the Australian
people, and must therefore be justified according to some or other theory of the judicial function in a
constitutional democracy.
 It is not enough to point to the fact that the CON and the Judiciary Act clearly give the HC the power to
interpret the Constitution (s 76(i) of the Constitution read with s 30(a) of the Judiciary Act), because this
power may be exceeded.
 To avoid this charge, the Court’s method of interpretation needs to appear to be neutral, i.e. not influenced by
anything else other than purely technical legal considerations, and certainly not by the judges’ personal
preferences as to who should win/lose, or what the law should be.
 The more it appears that the Court is simply giving effect to the democratic choice made by the CON’s
framers, as expressed by the language of the Constitution, the more legitimate the exercise of the Court’s
powers will appear to be.
 The debate over the correct method of constitutional interpretation must thus be understood as a debate
about the most legitimate method.
 Ideally, the Court should adopt one method, because the use of multiple methods, each capable of producing
a different result, undermines the sense that the Court is doing law and not politics.

Literalism and legalism

EXTRACT: Swearing in of Sir Owen Dixon as Chief Justice (1952)
 The court’s sole function is to interpret a constitutional description of power or restraint upon power and say
whether a given measure falls on one side of a line consequently drawn or on the other, and it has nothing
whatever to do with the merits or demerits of the measure.
 There is no other safe guide to judicial decisions in great conflicts than a strict and complete
legalism.

EXTRACT: Retirement of Sir Garfield Barwick as Chief Justice (1981)

 The problem for the Court always, is to decide on the extent of Cth power.
 There seems to be a growing tendency to want to put a brand on a constitutional lawyer or a judge that he
either favours the Cth or he favours the State. But the truth is he has no choice.
o His task is to decide on Cth power and after that the Con works itself out.
 The Engineers’ Case established this: you take the words, you decide on the Cth power and you do not
decide on the Cth power looking over your shoulder as to what effect your decision will have on State power.
The Con will take care of that.
 Because attention is focused on the Cth power, the tendency is to think that the Court is advancing Cth power,
whereas, in fact, it is only inducing it, bringing it out and making it plain.

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  We need to be very wary that the triumph of the Engineers’ Case is never tarnished and that we maintain
stoutly that notion, that the function of the Court is to give to the words their full and fair meaning and leave
the Con which places the residue of the states to work itself out.

B&W
 For Barwick CJ, the emphasis was on the words of the CON, that is, on “literalism”.
 Sir Owen Dixon’s emphasis on “legalism” has a different focus – pointing not so much to the words as to the
technique by which they should be interpreted.
 Barwick CJ spoke as if the Court must “give to the words their full and fair meaning” (i.e. the meaning they
already have). His specific reaffirmation of the refusal, in the Engineers’ Case, to interpret the words by
reference to a presupposed context of reserved State powers seems intended to exemplify a more general
rejection of reference to any interpretative context: the words, as they are, are to speak for themselves.
 This would be very different from the willingness of Isaacs J in the Engineers’ Case to consider not only “the
words of the CON … but also any recognized principle of the common law underlying the expressed terms of
the CON”; not only “to read it naturally’ but to do so “in the light of the circumstances in which it was made,
with knowledge of the combined fabric of the common law, and the statute law which preceded it”.
 The additional aids to interpretation emphasized in the Engineers’ Case as qualifications to “literalism” lie
outside the constitutional text; but they all involve reference to authoritative legal materials, and therefore still
fall within Sir Owen Dixon’s conception of “legalism”. “Legalism” does not insist that interpretive or justificatory
reasoning be limited to any one source, but only that all its sources be located within a self-contained
autonomous body of law.

EXTRACT: Judith Shklar, Legalism: Law, Morals, and Political Trials (1986)
 The tendency to think of law as “there” as a discrete entity, discernibly different from morals and politics,
has its deepest roots in the legal profession’s view of its own functions, and forms the very basis of most of
our judicial institutions and procedures.
 The dislike of vague generalities, the preference for case-by-case treatment of all social issues, the structuring
of all possible human relations into the form of claims and counter-claims under established rules, and the
belief that the rules are “there” – these combine to make up legalism as a social outlook.
 As law serves ideally to promote the security of established expectations, legalism with its concentration on
specific cases and rules is, essentially, conservative.

Arguments in favour of literalism

 It is "objective", in the sense that there is no need to have resort to considerations extraneous to the
document; it promotes certainty, in the sense that the Con may be applied simply as it is written and as it is
read; and literalism is, as a method of interpreting the Con, profoundly easy, at least in the sense that it
provides a self-contained, intensely narrow regime of constitutional construction. Thus, the basic appeal of
literalism undoubtedly lies in an apparent objective simplicity.

Arguments opposing literalism

 The CON is the product of a complex range of historic intentions of the Founding Fathers. In this connection,
what literalism inevitably means in practical terms is the de-emphasising of this historic constitutional
intention. Literalism, with its exclusive emphasis upon the words as they appear in the text, must ultimately be
destructive of any recourse in direct terms to notions lying at the heart of the Founders' vision, such as a
broad concept of strongly decentralised federal govt.

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The Intention of the Framers
TAS v Cth and VIC (1904) HCA
Facts
 Section 88 of Con provided that there should be a uniform system of customs duties within two years of
establishment of Cth.
 Pending the establishment of such a system, s 89 provided that the Cth should collect customs using the
officials previously employed by the State departments, deduct its expenses (actual and pro rata) and credit
the remaining revenue to the State concerned.
 Section 93 provided that this scheme should continue for a further five years after the imposition of uniform
duties of customs, but that customs collected on importation should be credited not to the importing State, but
to the State of ultimate consumption.

Tasmania’s argument
 The consumption-based system (s 93) should apply to goods imported after establishment of Cth but before
imposition of uniform duties.
 The draft bills of the Con and the debates of the Convention should be used to interpret the
ambiguity of the sections of the Con.

Griffith CJ
 It is always a question of construction, whether we are called upon to construe the terms of a section, or to
decide whether powers are necessarily to be implied in addition to those which are expressed. The same rules
of interpretation apply that apply to any other written document.
 Rules of construction:
 Sussex Peerage Case (1844): The only rule for the construction of Acts of P’ment is, that they should be
construed according to the intent of the P’ment which passed the Act. If the words of the Statute are in
themselves precise and unambiguous, then no more can be necessary than to expound those words in their
natural and ordinary sense. The words themselves alone do in such a case best declare the intention of the
law-giver.
 Hardy v Fothergill (1888): Cannot construe a piece of leg’n with reference to and considerations of policy,
except so far as that policy may be apparent from, or at least consistent with, the language of the legislature
in the Statute.
 It is manifest that whatever scheme was adopted was a purely arbitrary rule. One was finally adopted, and
what that is to be ascertained from the language of the Con, and all we have to do is to interpret that
language.

Barton J
 The Court has not right to be influenced by a consideration of the hardships which Tasmania suffers.
 The Court has to declare what seems to be the proper meaning of the language, and to arrive at that meaning
by reference to the words themselves and to the history of the law.

O’Connor J
 The Court’s duty in interpreting a Statute is to declare and administer the law according to the intention
expressed in the Statute itself. In this respect, the Con differs in no way from any Statute of the Cth or
State.

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  The only safe rule is to look at the Statute itself, and to gather from it what is its intention. To take a
different course is to abandon the office of Judge, and to assume to province of leg’n.
 The intention of the enactment is to be gathered from its words. If the words a plain, effect must be given
to them; if they are doubtful, the intention of the legislature is to be gathered from other provision of the
Statute aided by a consideration of surrounding circumstances.
 In all cases in order to discover the intention you may recourse to contemporaneous circumstances – to
the history of the law, and you may gather from the instrument itself the object of the legislature in passing it.
o In considering the history of the law, you may look into previous leg’n, you must have regard to the
historical facts surrounding the bringing into law into existence.
 You may deduce the intention of the legislature from a consideration of the instrument itself in the light of
these facts and circumstances, but you cannot go beyond it.

B&W
 These judgments did not permit any reference to what had been said in the Convention Debates.
 However, the HC did allow the use of other historical material, such as the drafts of the CON. It also permitted
reference to a detailed contemporary B&W on the drafting of the Con that makes extensive use of the
Convention Debates.
 Hence, the Court was prepared to use secondary material – the accuracy of which has sometimes been
questioned – but not the primary material upon which the secondary material itself relied.
 The unanimous decision in Cole v Whitfield (1988) marked a break from this restrictive tradition.
o The court reinterpreted s 92 of the Con with the aid of the Convention Debates.
o Held: Regard could be had to the history of a section of the CON, including the relevant Convention
Debates “for the purpose of identifying the contemporary meaning of language used, the subject to
which that language was directed and the nature and objectives of the movement toward federation”;
but not “for the purpose of substituting for the meaning of the words used the scope and effect – if
such could be established – which the founding fathers subjectively intended the section to have”.
 The HC opened the way to the interpretative approach (originalism).
 Originalism: The attempt to discover the meaning of the constitutional text, not by looking exclusively to the
“intention” to be gathered from the text itself by traditional methods of statutory interpretation, but by looking
to historical evidence of what was in fact the intention of the framers.

EXTRACT: Greg Craven, “Original Intent and the Australian CON – Coming Soon to a
Court Near You?” (1990)
Theory of originalism
 Proposes that in interpreting a written CON, the sacred and supreme duty of the judiciary is to ascertain the
intentions of those who wrote that document and to give effect faithfully to those intentions.
 It is the wishes of the Founders that are paramount  this lies at the heart of original intent.
An “originalist” court
 Ultimate duty: to find the intention of the framers of the CON.
 The judge is unlikely to view the bare words of the CON which he or she is applying as ultimately controlling.
 In the event that the words in question do not truly reflect the intention of the Framers, then that judge will
be duty-bound to give effect to the intention over the words.

12
Shades of originalism
 “Overriding originalism”
 “Modified originalism”

Case for originalism

 Words, including the words of a CON, are mere tools of communication to convey the intention of those from
whom they emanate. Naturally, words are imperfect. When this occurs in a constitutional context, the
imperfect words should not prevail over the intention: rather, the intention, should overcome the deficient
words. Words are the servants of intention, but not the other way around.
 Those who framed the CON were the elected representatives of the Australian colonies and their peoples
chosen for the specific purpose of drawing up a federal CON. these men were the authors of the Con, its
words are their words, and those words were selected by them for the sole purpose of conveying their
intentions concerning the federal compact which they were drafting. Their debates and deliberations were
public and published. Their wider activities were heavily publicised, and were followed and discussed by the
public at large.
 The populations of the colonies ratified the acts of their agents and adopted the CON which they had drafted,
a CON which consists of nothing more than words chosen by the Framers to reflect their intentions.
Accordingly, it is the duty of the courts to give effect to the intentions of the Founders, as these intentions
are ultimately backed by the last authentic democratic expression of the will of the Australian
people on the subject of their constitutional dispositions.
o Any changes can be democratically achieved in accordance with the vision of the Founders
themselves.

Reasons why originalism is more plausible in Australia than America

1. The process by which the Australian founders were appointed, and the process by which the result of their
labours was ratified, were far more founded in democratic principle than were their equivalents in the US.
2. It is far easier to determine the intentions of Framers operating 90 years ago than it is in the case of those
whose views are almost two centuries old as in the US.
3. The ends to which literalism and progressivism have been put by the HC are far less attractive than those
to which the expansive interpretation of the US CON has been directed by the Supreme Court.

Conclusion
 Since Engineers, judges, counsel and commentators have been playing a losing constitutional hand, seeing
themselves as being forced to operate within the literalist construct for fear of being labelled as adherents of
“reserved powers”, when the very acceptance of literalism virtually concludes the issue against them in
advance.
 Original intent would present the possibility of a new game with new rules, one in which they may not win, but
might at least break even.

EXTRACT: Jeffrey Goldsworthy, “Originalism in Constitutional Interpretation” (1997)

B&W
 Argument is for a form of “moderate” originalism – which would:
o look to the founders’ intentions only insofar as they are ascertainable from publicly available evidence;
o give primacy to the founders’ conception of the principles and purposes adopted but not necessarily of
their application to particular factual contexts; and
13
 o recognise that, where evidence of their intentions is ambiguous or inconclusive, there may still be a
legitimate role for the creative judicial process.

Reasons why moderate originalism (M/O) differs from, and is superior to, extreme versions of
originalism:
1. M/O holds that the meaning of the CON depends on evidence of the founders’ intentions which in 1900
was readily available to their intended audience, but not on other evidence of their intentions.
2. The object of M/O is to clarify the meaning of the provisions which the founders enacted [enactment
intention], and not to discover their beliefs about how those provisions ought to be applied [application
intention]. That is, law-makers enact the law, and judges apply it according to its true meaning, regardless of
the law makers’ opinions and preferences.
a. Makes a distinction b/w enactment intentions (more general intention, the intention of using the
words) and application intentions (how they intended the law to operate).
b. Enactment intentions are described by Goldsworthy to be more legitimate, e.g. obscene means some
word that would cause offence to an ordinary and reasonable person. This meaning is relevant. What
is not relevant is what was actually obscene at the time the leg’n was passed, or what falls under the
category of obscene – that is, application intent is irrelevant.
3. M/O concedes that resort to the founders’ intentions cannot answer all interpretative disputes. If relevant
evidence of those intentions does not resolve a dispute, then judges may be forced to act creatively, and
after considering matters such as consistency with general legal doctrines and principles, public policy and
justice, stipulate what the disputed provision should thenceforth be taken to mean. Some of the traditional
maxims and presumptions of statutory interpretation can possibly be understood as contributing to this
creative process, rather than to the logically prior cognitive process of discovering a statute’s pre-existing
meaning.

Arguments against originalism

 Argument: The very idea of a collective legislative intention is incoherent or fictional.
 Response: The idea of a collective intention is not, of course, that there can exist an ontologically queer
“group mind”, which somehow transcend the individual minds of the members of the group. It is simply that
people collectively engaged in a co-operative enterprise can knowingly hold the same or interrelated intentions
w.r.t. it.
o Who are “the founders” whose intentions are relevant? It is often not necessary to choose
between those who drafted and debated the CON and the voters who approved it because evidence of
the original intention applies equally to both – beliefs and values were widely shared at the time.
 Argument: No good reason can be given for today’s generation being ruled by “the dead hand of the past”.
 Response: This is really an argument against having a CON, or indeed any law, at all, since it is of the
essence of law that decisions are governed by norms laid down in the past.
o Today’s generation of Australians is not restricted by the dead hand of the past in any invidious sense
because the CON can be altered by popular referendum pursuant to s 128.

NSW v Cth (WorkChoices Case) (2006) HCA

Issue
 Could s 51(xx) of the Con (“corporations power”) be used to refashion the legislative regime that had
previously relied on s 51(xxxv) (conciliation and arbitration in relation to interstate industrial disputes)?

14
Majority judgment summary
 Referring to the Convention Debates, the judges found support for an inference that s 51(xxxv) was intended
as “an authority for legislative experimentation”, but not supporting any inference that s 51(xxxv) was
intended to be “the sole method open to the P’ment of the Cth for legislating for industrial leg’n”.
 As to the intended scope of s 51(xx), however, the judges declined to draw an inference from the Convention
Debates at all.

Gleeson CJ, Gummow, Hayne, Heydon and Crennan JJ

 To pursue the identification of what is said to be the framers’ intention, much more often than
not, is to pursue a mirage. It is a mirage because the inquiry assumes that it is both possible and useful to
attempt to work out a single collective view about what now is a disputed question of power, but then was not
present to the minds of those who contributed to the debates.
 Even if a statement about the framers’ intention can find some roots in what was said in the course of the
Convention Debates, care must be taken lest the assertion assumes the answer to the very question being
investigated: is the law in issue within federal legislative power?
 The answer to that question is not to be found in attempting to attribute some collective subjective intention
to all or any of those who participated in the Convention Debates.
 In the case of s 51(xx) the statements made in the course of the Convention Debates were so few and
equivocal as to provide no foundation for a conclusion about what those who spoke in debate thought would
be the scope or meaning of s 51(xx).

Callinan J (dissenting)
 It is inconceivable that the founders visualised a power as broad as the one now asserted.
 Support for “originalism”: The CON should be construed in the light of its history. It should be construed
purposively. The founders’ intentions and understanding, to the extent that they can be seen to be generally
consensual, are relevant. The evidence in the Debates is valuable.
o The CON should not be construed to enable the Court to supplant the people’s voice under s 128 of it.
The CON should not in general be read as if it were intended to confer powers in duplicate.
o “Originalism” so-called, is no less a proper interpretative tool than any other, and will often be an
appropriate one. It is useful here.

Originalism and other ‘isms’

EXTRACT: Jeffery Goldsworthy, “Originalism in Constitutional Interpretation” (1997)
 There must be limits beyond which flexibility cannot be called interpretation in any real sense of the term. The
problem is to find the boundary between legitimate interpretative flexibility, and illegitimate judicial
amendment; to identify the way in which the meaning or application of a statute or CON can in some sense
change, consistently with the fundamental principle of original, intended meaning.
Methods by which the CON can be given a flexible operation:
1. Method 1. Application and enactment intentions
a. In deciding what a statutory or constitutional provision means, the law-makers’ enactment intentions
may be critical. But once its meaning has been determined, and the question is how it applies in a
particular sense, their further intentions are irrelevant.
b. The law consists of the provision which the law-makers actually enacted, and not their possibly
mistaken beliefs about its meaning or proper application.

15
 c. The rule of law and the separation of powers require that judges decide for themselves how a law
should be applied, according to its meaning, rather than slavishly deferring to whatever the law-
makers may have expected or wanted.
d. It must be conceded that enactment and application intentions are not mutually exclusive, and the
distinction between them may be very difficult to apply, and perhaps in some cases illusory.
2. Method 2. Connotation and denotation
a. The HC has often said that the “connotation” of a constitutional provision must stay the same,
although its “denotation” can change.
b. Denotation: Comprise of all the things in the world which the word refers to.
c. Connotation: Consists of the criteria which define it, and thereby determine its denotation.
d. The connotation/denotation distinction can be invoked justify many changes in the practical operation
of the CON.
3. Non-literal, purposive approach
a. Interpret the words according to their spirit rather than their letter.
b. This principle is not necessarily inconsistent with the principle of original, intended meaning, because
that meaning may not be the same as the original, literal meaning.

EXTRACT: Greg Craven, Conversations with the CON (2004)

Methods by which a court can interpret a CON:
1. Intentionalism: According to the intentions of those who wrote it.
a. Justification: Democratic.
b. Argument: The founders and their drafting process were indifferently democratic.
i. Response: Not convincing in the context of a popularly ratified CON, drafted by elected
representatives, and amendable by referendum.
c. Argument: Even if we want to abide by the founders’ intentions we cannot, because it is impossible
to ascertain what they were.
d. Response: The founders left behind them volumes of transcribed debates.

2. Literalism: Give literal effect to the CON’s written words.

a. Appeal: Simple, certain, and warranted not to provoke political or intellectual argument. It is both
objective and programmed.
b. Justification: The safest way to understand a document is to read its words.
c. Assumption: The words of a document are the best guide to its authors’ intentions.
i. In this sense, literalism is a very narrow version of intentionalism – it accepts that the HC is
trying to find the founders’ intention, but argues that the written words are the only one safe
source of that commodity.
d. Problem: Ambiguity – it assumes that each term of the CON has a more or less clear meaning.

3. Progressivism: Constantly update the CON to accord with the contemporary needs of the Australian people.
a. Appeal: It offers a way of achieving radical change without the necessity of asking the Australian
people.

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 b. Justification: Democracy must involve more than majority rule. The court must save democracy from
itself by restraining the people and politicians from their animal appetites. The judges have always
made law, and there is nothing special about the CON. In any event, the founder never intended the
CON as a straitjacket for the court.
o Counter-argument: The HC is not elected.
o Argument: Progressivism is intrinsically result-oriented – its ultimate justification is that it produces
desired constitutional outcomes: human rights, more centralized power and so forth.
 Problem: Even lawyers concede that constitutional interpretation involves more than the
“right” answer. The court should be able to identify, explain and defend its method.
o Judges have a temptation to think progressively but act cowardly – when conforming the meaning of
the CON to some direct policy choice, judges are tempted to dress up the fact of progressivism as
some implausible literal interpretation or even a grotesque distortion of the founders’ intentions. All
too often, the HC has produced judgments that conceal rather than expose its reasoning.

B&W
 There seems to be at least 3 factors that can legitimately be taken into account:
1. The literal meaning of the words.
2. Extrinsic evidence of the framers’ intention.
3. An element of judicial creativity.
 Contentious issue: Can all three factors be weighed together (as they often are) or it is possible or desirable
to prescribe a priority rule?
 Theophanous v Herald & Weekly Times (1994) per Deane J: Invoking the idea that the CON now derives
its authority from its “acceptance by the people”, he saw this as a reason for refusing “to construe the CON on
the basis that the dead hands of those who framed it reached from their graves to … deprive what was
intended to be a living instrument of its vitality and its adaptability to serve succeeding generations”.
o To counter the “errors of such a dead hands theory of construction”, he invoked the authority of
Andrew Inglis Clark, describing him as “the primary architect of our CON”.

EXTRACT: Andrew Inglis Clark, Studies in Australian Constitutional Law (1901)

 The CON was not made to serve a temporary and restricted purpose, but was framed and adopted as a
permanent and comprehensive code of law, by which the exercise of the govtal powers conferred by it should
be regulated as long as the institutions which it created to exercise the power should exist.
 The CON must be read as declaring the will and intentions of the present inheritors and possessors of
sovereign power, who maintain the CON and have the power to alter it, and who are in the immediate
presence of the problems to be solved.

Another approach, advocated by Kirby J, is to see the CON as relatively fluid – see it as a living organism (e.g. a tree)
which would allow the CON to respond to contemporary needs.

Brownlee v The Queen (2001) HCA

Kirby J
 If the text of the CON must be given meaning as its words are perceived by succeeding generations of
Australians, reflected in this Court, it is imperative to keep the mind open to the possibility that a new
context, presenting different needs and circumstances and fresh insights, may convince the Court, in
later times and of later composition, that its predecessors had adopted an erroneous view of the CON.

17
  Constitutional expressions must be given contemporary meaning, as befits the character of a national basic
law, which is extremely resistant to formal amendment, but which must, of necessity, apply to new,
unforeseen and possibly unforeseeable circumstances.
 Because the world of the framers was not that of today’s Australians, it is misleading, and prone to result in
serious error, to accept as the applicable principle of constitutional interpretation the “intention” of those who
framed it.
 Because the CON is a special statute of a peculiar kind for particular purposes and unique operation, the
rules of construction applicable to it include some that are special, particular and unique. Even with ordinary
leg’n, expected to have an extended operation, it is increasingly accepted that language lives and meaning
adapts to changed circumstances. Words are not necessarily confined to the meaning that would
subjectively have been ascribed to them by the P’ment that enacted them. This is even more true of
constitutional words and phrases.
 A recognition of this fact does not render wholly irrelevant the consideration of history - as in the
debates that preceded adoption of the CON. But it does limit the utility of such searches when the real
consideration is what those words and phrases mean in their contemporary institutional setting and as they
must operate in accordance with the "accepted standards of a modern democratic society", such as the CON
was adopted to provide.
 It may be expected that the unreliability of the past criterion, and the demonstrated ambivalence of past
practice, will indicate ever more clearly the error inherent in "faint-hearted originalism".

In counterpoint to these judgments by Kirby J, McHugh J has defended the view that the judge’s responsibility is to
give effect to the “intention” of the text, as ascertained by traditional methods of legal interpretation.

Eastman v The Queen (2000) HCA

McHugh J
 The reason for the Court's interpretation is that the relevant intention of constitutional provisions is that
expressed in the CON itself, not the subjective intentions of its framers or makers. It is an intention that is
determined objectively.
 Because the intention of the makers of the CON is one to be determined objectively, the present generation
may see that the provisions of the CON have a meaning that escaped the actual understandings or
intentions of the founders or other persons in 1900.
 The traditional approach to constitutional interpretation in Australia is probably best described as
textualism or semantic intentionalism. It is not literalism, if by literalism is meant no more than that a statute
is to be interpreted by reference to its words according to their natural sense and in the context of the
document. The Court has frequently taken into account the consequences of particular interpretations in
determining the meaning of constitutional provisions, as well as the history and circumstances of their making.
 Although the majority justices in the Engineers' Case emphasised the necessity to construe the words of the
CON, their approach is probably better regarded as one of legalism with textualism the instrument of that
legalism. The majority justices in the Engineers' Case emphatically rejected the use of external political
principles or policies to interpret the CON, and thereby committed the Court to the strict legalism of which Sir
Owen Dixon became the leading proponent. However, the Engineers' Case did not rule out the history or
background of the CON as interpretative aids. The majority justices in that case expressly said that the CON
was to be read in the light of the circumstances in which it was made with knowledge of the combined fabric
of the common law and the pre-CON statute law.
 Our CON is constructed in such a way that most of its concepts and purposes are stated at a sufficient level of
abstraction or generality to enable it to be infused with the current understanding of those concepts and
purposes. This is consistent with the notion that our CON was intended to be an enduring document able to
apply to emerging circumstances while retaining its essential integrity.
 Those who made and enacted the CON intended it to endure, to be responsive and relevant to the community
in which it would operate, and to be sufficiently malleable to account for circumstances and conditions that
18
 they could not have foreseen. According to this view, the CON is not "a rigid blueprint" but rather "an outline
or broad framework for national govt capable of adjusting to changing conditions and circumstances.”

Re Wakim; Ex parte McNally (Cross-vesting Case) (1999) HCA

McHugh J
 The judiciary has no power to amend or modernise the CON to give effect to what the judges think is in the
public interest. The function of the judiciary, including the function of this Court, is to give effect to the
intention of the makers of the CON as evinced by the terms in which they expressed that intention.
o That necessarily means that decisions, taken almost a century ago by people long dead, bind the
people of Australia today even in cases where most people agree that those decisions are out of touch
with the present needs of Australian society.
 The starting point for a principled interpretation of the CON is the search for the intention of its
makers. That does not mean a search for their subjective beliefs, hopes or expectations. Constitutional
interpretation is not a search for the mental states of those who made, or for that matter approved or
enacted, the CON. The intention of its makers can only be deduced from the words that they used in the
historical context in which they used them.
 Many words and phrases of the CON are expressed at such a level of generality that the most sensible
conclusion to be drawn from their use in a CON is that the makers of the CON intended that they should
apply to whatever facts and circumstance succeeding generations thought they covered.
 The meanings that we now place on the CON may not entirely coincide with the meanings placed
on it by those who drafted, approved or enacted that document. That is because a CON contains
implications, inferences and propositions as well as words, phrases and clauses. Experience derived from the
events that have occurred since its enactment may enable us to see more in the combination of particular
words, phrases or clauses or in the document as a whole than would have occurred to those who participated
in the making of the CON.

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 THE HIGH COURT AND CHARACTERISATION
The characteristion process
Bank of NSW v Cth (Bank Nationalisation Case) (1948) HCA
Facts
 The leg’n in question was the Banking Act 1947 (Cth) which nationalised Australian banking by
progressively prohibiting the carrying on of banking business by private banks.

Issue
 Was a law that effectively closed down private banks a law within banking power in s 51(xiii)?

Held
 Majority finds portions of Banking Act invalid, not for falling outside banking power, but for violating duty not
to acquire property except on just terms (s 51(xxxi)) and for violation of s 92.

Dixon J
 Dixon J’s judgment foreshadows modern approach: citing Jumbunna Coal, holds that Court should ‘lean to the
broader interpretation’ of a particular head of power unless the context or the CON suggests otherwise. On
this approach, no reason to restrict banking power to laws regulating banking as an ongoing activity, or
‘transactions entirely consensual’, or ‘transactions between subject and subject’.
 How liberally should the CON be interpreted?
 O’Connor J in Jumbunna Coal: “where the question is whether the CON has used an expression in the wider
or in the narrower sense, the Court should, in my opinion, always lean to the broader interpretation
unless there is something in the context or in the rest of the Constitution to indicate that the narrow
interpretation will best carry out its object and purpose.”
 Remember that it is a CON, a mechanism under which laws are to be made, and not a mere Act which
declares what the law is to be. The CON must not, therefore, be cut down by "a narrow and technical
construction" but given a "large and liberal interpretation".
 Purpose of s 51
 Not to define or delimit the description of law that the P’ment may make upon any of the subjects assigned to
it. Speaking generally, the legislative power so given is plenary in its quality. The purpose of the enumeration
is to name a subject for the purpose of assigning it to that power. More often they are the most general
names of general topics.
 Application to the present case – Banking power
 The power w.r.t. banking seems to me a plain example of the designation of a broad subject without any
indication of the means by which it is to be dealt with or of the existence of limits upon the description of laws
to be made with respect thereto.

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  Of course "banking" describes an activity which is carried on and in that sense continues. But no-one would
feel that it was anything but an ordinary use of the word to say that a statute declaring that banking should no
longer be carried on was a law about banking.

Re Dingjan; Ex parte Wagner (1995) HCA

McHugh J
 In determining whether a law is ‘w.r.t.’ a head of power in s 51, two steps must be taken:
1. The character of the law must be determined. That is done by reference to the rights, powers,
liabilities, duties and privileges which it creates.
2. A judgment must be made as to whether the law as so characterised so operates that it can
be said to be connected to a head of power conferred by s 51. The practical, as well as the
legal, operation of the law must be examined.
 If a connection exists between the law and a s 51 head of power, the law will be ‘w.r.t.’ that head
of power unless the connection is ‘so insubstantial, tenuous or distant’ that it cannot sensibly be
described as a law ‘w.r.t.’ the head of power.

Grain Pool of WA v Cth (2000) HCA

Facts
 The leg’n in question was the Plant Variety Rights Act 1987 (Cth) and Plant Breeders’ Rights Act
1994 (Cth) which provided for the grant of “plant variety rights”, a novel form of intellectual property.

Issue
 Whether, in creating such rights, the Acts possessed a sufficient connection with the power over “Copyrights,
patents, of inventions and designs, and trade marks in s 51 (xviii) of the CON.

Gleeson CJ, Gaudron, McHugh, Gummow, Kirby, Hayne And Callinan JJ

 Law on characterisation summarised in the form of five principles:
o Principle 1: Construe constitutional text ‘with all the generality which the words used admit’
[Engineers principle].
o Principle 2: Determine character of law by reference to rights, powers, liabilities, duties and
privileges which it creates.
o Principle 3: Examine practical and legal operation of law to determine if there is sufficient connection
between law and head of power [sufficient connection principle].
o Principle 4: Disregard fact that law may be characterised in another way that can’t be brought under
head of power, even if no ‘independent connection’ between the two subject matters [dual
characterisation principle].
o Principle 5: If a sufficient connection with head of power exists, the justice and wisdom of the law,
and the degree to which the means it adopts are necessary or desirable, are matters of legislative
choice.
 Application to the present case
 Consistently with the general principles which we have identified above, an appropriate approach to the
interpretation of s  51(xviii) is that appearing in what was then the dissenting judgment of Higgins J in
Attorney-General for NSW v Brewery Employees Union of NSW ("the Union Label Case").

21
  Higgins J observed that trade marks were "artificial products of society". Further, whilst "we are to ascertain
the meaning of 'trade marks' as in 1900", trade marks usage in 1900 "gives us the central type; it does not
give us the circumference of the power" w.r.t. trade marks provided for by s 51(xviii). The centre of the
thing named - trade marks - was to be taken with the meaning as in 1900 to find the circumference of the
power. However, it would be "a mistake to treat the centre as the radius".
 Higgins J continued: "Power to make laws as to any class of rights involves a power to alter those rights, to
define those rights, to limit those rights, to extend those rights, and to extend the class of those who may
enjoy those rights. In the same clause of s 51, power is given to make laws w.r.t. 'copyrights' (rights of
multiplying copies of books, &c); w.r.t. 'patents' (rights to make or sell inventions); and w.r.t. 'trade marks'
(rights to use marks for the purposes of trade). The power to make laws 'w.r.t.' these rights, involves a power
to declare what shall be the subject of such rights.
 Conclusion: The boundaries of the power conferred by s 51(xviii) are not to be ascertained by identifying
what in 1900 would have been treated as a copyright, patent, design or trademark.

Trade and commerce

Section 51(i): The P’ment shall, subject to this Constitution, have power to make laws for the peace, order and good
govt of the Cth w.r.t.:
(i) Trade and commerce with other countries, and among the States.

W & A McArthur Ltd v Qld (1920) HCA

Summary
 Case considers meaning of phrase ‘trade, commerce, and intercourse’ in s 92 but applicable to s 51(i) as well.
 Court declines to give precise legal definition, deferring rather to commercial understandings.
 All that it is prepared to say is that phrase not confined to ‘transportation’.

Knox CJ, Isaacs and Starke JJ

 The particular instances that may fall within the ambit of the expression “trade, commerce and intercourse”
depend upon the varying phases and development of trade, commerce and intercourse itself.
 “Trade and commerce" between different countries has never been confined to the mere act of transportation
of merchandise over the frontier. That the words include that act is, of course, a truism. But that they go far
beyond it is a fact quite as undoubted. All the commercial arrangements of which transportation is
the direct and necessary result form part of "trade and commerce." The mutual communings, the
negotiations, verbal and by correspondence, the bargain, the transport and the delivery are all, but not
exclusively, parts of that class of relations between mankind which the world calls "trade and commerce."

Australian National Airways v Cth (ANA Case) (1945) HCA

Facts
 Australian National Airlines Act 1945 created govt-owed airline service operating interstate to exclusion of
all other airlines.

Issue
 Validity under s 51(i) challenged on basis that that head of power restricted to ‘reg’ of interstate trade and
commerce, rather than creation of govt-owed company that would itself engage in interstate trade and
commerce, and monopolistically at that.
22
Dixon J
 A law authorising the govt to conduct a transport service for inter-State trade, whether as a monopoly or not,
appears to me to answer the description, a law w.r.t. trade and commerce amongst the States.
 In relation to the provision of air services to a Territory: We should avoid pedantic and narrow
constructions in dealing with an instrument of govt. It is absurd to contemplate a central govt with authority
over a territory and yet without power to make laws for the establishment, maintenance and control of
communications with the territory governed. The legislative power is extensive enough to cover such a matter.

Dual characterisation
Fairfax v Federal Commission of Taxation (1965) HCA
Facts
 Section 11 of the Income Tax and Social Services Contribution Assessment Act 1961 (Cth) denied
tax exemption on investment income of super fund unless certain amount invested in ‘public securities’ (Cth or
State bonds, debentures, stock or other securities).

Issue
 Did this provision validly fall within the taxation power such that it can be validly carried out as a law w.r.t.
taxation? Or instead should it be characterised as in substance relating to superannuation and investment (for
which there is no relevant head of power)?
 Crucial issue was that the obligation that was imposed was the taxation obligation (satisfying the direct
characterisation test) whereas it could not be said that super fund managers were obliged by the law to invest
in public securities.

Arguments
 Fairfax: Section 11, though it is couched in terms of taxation and wears the badge of a tax law, really
operates to expose trustees of super funds to a liability which it miscalls a tax, a liability which in truth is a
penalty/sanction for a failure to pursue a prescribed course of conduct by such trustees w.r.t. the investment
of moneys. Therefore, s 11 is in substance not a law upon taxation but only a law upon the subject of the
investment of such moneys.
 Cth: (1) If a law can be validly characterised w.r.t. a head of Cth power, in the instant case taxation, it does
not matter that it also affects a matter not included in the heads of Cth power. The earlier characterisation is
decisive of the question. (2) In characterising a law the focus should be on its direct legal operation, as
ascertained from its text and from the legal rights and liabilities affected thereby.

Held
 It was enough that the law could be characterised as dealing with taxation (s 51(ii)).

Kitto J
 Need to focus on the substance, not the mere form of the law.
o A speculative inquiry as to which of the topics touched by the leg’n seems most likely to have been the
main preoccupation of those who enacted it, has nothing to do with the question of constitutional
validity under s 51.

23
 o Under that section the question is always one of subject matter, to be determined by reference
solely to the operation which the enactment has if it be valid, that is to say by reference to the nature
of the rights, duties, powers and privileges which it changes, regulates or abolishes; it is a
question as to the true nature and character of the leg’n: is it in its real substance a law upon,
"w.r.t.", one or more of the enumerated subjects, or is there no more in it in relation to any of those
subjects than an interference so incidental as not in truth to affect its character?
 While affirming that in deciding whether a law is supported by the taxation power it is irrelevant
to inquire into the ultimate indirect consequences of the operation of the law.
o From R v Barger: On the face of the law, is the substantial purpose, on the one hand, to raise
revenue or, on the other hand, to regulate the conduct of persons by providing for a sanction in the
form of a pecuniary impost to be incurred by departure from a specified course?
o It is by no means a settled doctrine that a law which purports to provide for a tax upon behaviour is in
substance not a law w.r.t. taxation if it exhibits on its face a purpose of suppressing or discouraging
the behaviour and is to be explained more convincingly as a means to that end than as a means to
provide the Govt with revenue.
 To espouse such a doctrine would be to fall into the error of confusing the distinction between
form and substance with the distinction between the major and the minor importance which a
reading of the Act that those who passed it may have attributed to the various aspects of its
operation.
 Kitto J agreed with the approach taken by Dixon J – if a law has an actual and immediate operation within a
head of power, it is the end of the analysis.
o "Speaking generally, once it appears that a federal law has an actual and immediate operation within a
field assigned to the Cth as a subject of legislative power, that is enough. It will be held to fall within
the power unless some further reason appears for excluding it. That it discloses another purpose and
that the purpose lies outside the area of federal power are considerations which will not in such a case
suffice to invalidate the law”.
 In order to reach this conclusion, Kitto J had to overcome the Barger case and did so on two linked basis:
1. Barger, which relied on the doctrine of the reserved powers of the States, was exploded in the
Engineer’s case.
2. United States v Sanchez (1950): "It is beyond serious question that a tax does not cease to be valid
merely because it regulates, discourages, or even definitely deters the activities taxed”. That is, the
effect (usually of deterrence) of the tax, or the purpose of the tax, is completely irrelevant in
considering the constitutional validity of that piece of leg’n.
 Present case: The raising of revenue may be of secondary concern. But the enactment does not prescribe or
forbid conduct. Its character is neither fully nor fairly described by saying that it makes trustees of super funds
liable to pay for failing to do what the legislature wishes.
o The substance of the enactment is the obligation which it imposes, and the only obligation
imposed is to pay income tax. In substance as in form, therefore, the section is a law
w.r.t. taxation.

Menzies J
 Whether or not a law is one w.r.t. taxation cannot be determined by looking at its economic consequences,
however apparent they must have been at the time of its enactment; nor is an enquiry into the motives of the
legislature permissible.
 The problem in every case is to ascertain from the terms of the law impugned its true nature and character.
 Present case: There is no reason for denying to s 11, which relates to exemption from income tax, the
character of a law w.r.t. taxation. The consequences and imputed motives do not deprive the law of its
character as such a law.
24
Purposive and non-purposive powers
ANA Case (1945) HCA
Rich J
 This Court is not concerned with considering whether an impugned law, is politically, economically, or socially
desirable or undesirable.
 It is concerned only with the questions whether it is within the constitutional powers of the Cth P’ment to pass
an Act, or for the reg-making authority to make a reg, of the type which has been called in question, and if so
whether the Act or reg is, in whole or part, a valid exercise of power.
 Our task is purely legal.
 It is to examine those provisions of the CON which confer legislative power upon the Cth P’ment and to see
whether the leg’n which has been challenged wholly, or if not wholly to some extent, within one or more of
the powers which the framers of the CON thought fit to confer upon it.

Stenhouse v Coleman (1944) HCA

Dixon J
 In most of the paragraphs of s 51 the subject of the power is described either by reference to a class of legal,
commercial, economic or social transaction or activity (as trade and commerce, banking, marriage), or by
specifying some class of pubic service (as postal installations, lighthouses), or undertaking or operation (as
railway construction), or by naming a recognised category of leg’n (as taxation, bankruptcy).
o In such cases it is usual, when the validity of leg’n is in question, to consider whether the
leg’n operates upon or affects the subject matter, or in the last case answer the
description, and to disregard purpose or object.
 But “a law w.r.t. the defence of the Cth” is an expression which seems rather to treat defence or war as the
purpose to which the leg’n must be addressed.
 This peculiarity in the power has caused no departure from the practice that excludes from
investigation the actual extrinsic motives and intentions of legislative authorities.
 BUT whether by the words – “scope”, “object”, “pith”, “substance”, “effect” or “operation”, the connection of
the reg with defence can scarcely be other than purposive, if it is within the power.

Murphyores Incorporated v Cth (1976) HCA

Facts
 Customs Act 1901 (Cth): Gave power under s 112 to make regs prohibiting exports.
 Customs (Prohibited Exports) Regs (Cth): Provided in reg 9(3) that the exportation of minerals was
prohibited except by the approval of the Minister.
 Murphyores were engaged in sand mining on Fraser Island in Qld. They sought approval under reg 9(3). They
were informed that no decision would be made until an inquiry had been undertaken under s 11 of the
Environment Protection (Impact of Proposals) Act 1974 (Cth).
 Section 11 of that Act empowered the Minister to conduct an inquiry into the environmental aspects of any
matter referred to in s 5, which declared that the purpose of the Act was to ensure that environmental issues
“are fully examined and taken into account” in the “making of, or the participation in the making of, decisions
and recommendations” by the Australian govt or on its behalf.

25
Issue
 Are the regs, the Environmental Protection Act, and the Customs Act, valid?

Held
 All the leg’n and regs are valid.

Mason J
 The power to legislate w.r.t. trade and commerce with other countries, including as it does power to prohibit
and regulate the exportation of goods from Australia, necessarily comprehends the power to select and
identify the persons who engage in, and the goods which may become the subject of, that activity.
o It is then for P’ment in its wisdom or for the person to whom P’ment delegates the power
to decide who may export and goods may be exported. The means and the criteria by
which this choice is to be made are for P’ment to decide.
o There is nothing in the subject matter of the constitutional power which justifies the implication of any
limitation on P’ment's power of selection. Section 51 does not control or limit the criteria.
 It is enough that the law operates on the topic of trade and commerce with other countries. A law which
absolutely or conditionally prohibits exportation of goods is a law that operates on that topic. It is
not a law which ceases to deal with that topic because it confers a discretion, unlimited in scope, to permit
exportation of particular goods.
o In this respect it differs from a law whose connection with the subject matter of power is more
remote, where the limits of a statutory discretion may become important in characterising the law.
 By imposing a conditional prohibition on exportation, the law is dealing with exportation of goods, a matter at
the heart of trade and commerce with other countries. It is not to the point that the selection may be made by
reference to criteria having little or no apparent relevance to trade and commerce; it is enough that the law
deals with the permitted topic and it does not cease to deal with that topic because factors
extraneous to the topic may be taken into account in the relaxation of the prohibition imposed by
the law.

Stephens J
 The federal P’ment, having power to legislate w.r.t. overseas trade and commerce, is legislating concerning a
matter at the very heart of that subject matter when it prohibits the exportation of specified classes of
goods, and none the less so when its leg’n takes the form of a power to make regs prohibiting all export of
particular classes of goods coupled with a dispensing power. Such a reg remains one within the four corners of
the trade and commerce power since its subject matter is the exportation of goods.
 In those instances in which the legislative power of the Cth is granted in purposive terms, it is necessary to
have regard to purpose and this applies no less to administrative acts than to leg’n.
o But where the source of power is found in non-purposive subject matter, as in s 51(i) the same
problem does not present itself.
o Thus once leg’n addresses itself to the subject matter of the prohibition of exports, central to the trade
and commerce power, a reg implementing that prohibition will inherently be within subject matter; so
also will be an administrative decision relaxing, or failing to relax, that prohibition in a particular case;
so long as that is the nature of the decision it will be within power.
 The considerations in the light of which the decision is made may not themselves relate to matters of trade
and commerce but that will not deprive the decision which they induce of its inherent constitutionality for the
decision will be directly on the subject matter of exportation and the considerations actuating that decision will
not detract from the character which its subject matter confers upon it.

26
Incidental power
D’Emden v Pedder (1904) HCA
Griffith CJ
 Where any power or control is expressly granted, there is included in the grant, to the full extent of the
capacity of the grantor, and without special mention, every power and every control the denial of which
would render the grant itself ineffective.
 This is a necessary rule of construction of all grants of power.

Grannall v Marrickville Magarine (1955) HCA

Dixon CJ, McTiernan, Webb and Kitto JJ
 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, and thus carries with it power to make laws
governing of affecting many matters that are incidental or ancillary to the subject-matter.

Wragg v NSW (1953) HCA

Dixon CJ
 The distinction between interstate trade and the domestic trade of a State for the purpose of the power
conferred upon the P’ment by s 51(i) is a distinction adopted by the CON and it must be observed however
much interdependence may now exist between the two divisions of trade and commerce.
 A legislative power, however, w.r.t. any subject matter contains within itself authority over
whatever is incidental to the subject matter of the power and enables the legislature to include
within laws made in pursuance of the power provisions which can only be justified as ancillary or
incidental.
 The distinction which the CON makes between the two branches of trade and commerce must be maintained.
Its existence makes impossible any operation of the incidental power which would obliterate this distinction.

Incidental power and s 51(i)

R v Burgess; Ex parte Henry (1936) HCA
Facts
 Section 4 of Air Navigation Act 1920 (Cth): Authorised the making of regs for control of air navigation in
all of Australia.
 Relied on State leg’n referring this power to Cth as provided for in s 51(xxvii).
 But only Tasmania enacted relevant referral leg’n, opening leg’n to constitutional attack.

Issue
 Whether the Cth could rely on s 51(i) to regulate intrastate trade and commerce since it was incidental to
creating uniform laws of air navigation.

Cth argument

27
  There is a plenary power over interstate trade and commerce, and a limited power over intrastate trade and
commerce. In order to have effective control over interstate traffic, there must be control over intrastate
traffic.
 The Cth has power under the trade and commerce power to make regs in relation to aircraft engaged in
interstate trade and commerce, and, to ensure the safety of interstate commerce the Cth can make its air-
navigation regs applicable also to aircraft flying intrastate.

Held
 Cth argument failed.
 Although air navigation “in the Territories” could be regulated under s 122 of the CON, air navigation “in the
Cth” was a general subject-matter that the Cth could regulate only in limited aspects.
 Section 51(i) implied a clear distinction between interstate and intrastate trade and commerce, to which a
general provision for “air navigation in the Cth” could not conform.

Latham CJ
 Considerations of wisdom or expediency cannot control the natural construction of statutory language. The
CON gives to the Cth P’ment power over inter-State and foreign trade and commerce and does not give to it
power over intra-State trade and commerce, although these subjects are obviously in many respects very
difficult to separate from each other.
 Although foreign and inter-State trade and commerce may be closely associated with intra-State trade and
commerce, the court has uniformly held that the distinction drawn by the CON must be fully recognized, and
that the power to deal with the former subject does not involve an incidental power to deal with the latter
subject.
 The problem is to be solved by some form of co-operation between the Cth and the States. Therefore, need to
get the States to give up their powers (refer). There is a provision which allows the States to refer powers to
the Cth precisely for this situation. In the absence of a referral by the States in the present case, the Cth
cannot make such leg’n regulating intrastate trade and commerce.
 Conclusion: If the Cth P’ment has power to legislate w.r.t. interstate and foreign navigation, it does not
necessarily follow that it also has the power to regulate intrastate aviation.

Dixon J
 The inconvenience and difficulty of maintaining the distinction between interstate and intrastate trade needs
no demonstration. But the legislative power is to make laws w.r.t. inter-State commerce, and, under the
power, the domestic commerce of a State can be affected only to the extent necessary to make effectual its
exercise in relation to commerce among the States.

Evatt and McTiernan JJ

 It is impossible to accept the theory of the Cth that its power to legislate w.r.t. interstate trade necessarily
extends to all aircraft engaged solely in intrastate trade, by reason of the possible “commingling,” in air routes
and air ports, of the aircraft proceeding intrastate with the aircraft proceeding interstate.
 The rejection of the “commingling” theory does not deny that there may be occasions when parts of intrastate
aviation will be seen to occupy so direct and proximate a relationship to interstate aviation that the agents
and instruments of the former will be drawn within the ambit of the Federal power, for otherwise the particular
Cth reg of interstate commerce would be entirely frustrated and nullified.

28
The following case marks a slight shift in approach, as majority here was prepared to accept commingling argument
insofar as it applies to reg for purpose of physical safety.

Airlines of NSW v NSW (No 2) (Second Airlines Case) (1965) HCA

Facts
 The First Airlines Case (1965) held that a NSW licensing system for aircraft operating solely within the
State was not inconsistent with Cth regs made under the Air Navigation Act 1920 (Cth).
o In part, this was because reg 6 of the Cth regs were expressed to have no application to purely
intrastate flights.
 Following that decision, both govts amended their leg’n, and returned to the HC in this case.
 (New) Reg 6(1)(f): Extended regs to “all air navigation within Australian territory of a kind not specified”, i.e.
to purely intrastate aviation.
 Reg 198: Prohibited use of aircraft in regular public transport operations unless licensed by D-G of Civil
Aviation.
 Reg 199(3): A Cth licence for “other than an interstate service” may be issued “upon such conditions, in
addition to compliance with these Regs, as the Director-General considers necessary”.
 (New) Reg 199(4): In deciding whether to issue a licence for purely intrastate aviation, the D-G shall “have
regard to matters concerned with the safety, regularity and efficiency of air navigation and to no other
matters”.
 Airlines of NSW had acquired a licence under this reg for regulate intrastate flight, but wanted to avoid having
to comply with NSW licensing provision.
 To do this, it had to have Cth reg declared valid, and then NSW reg declared invalid as being inconsistent with
Cth reg under s 109.

Held
 Both regs 198 and 199 valid.
o Intrastate trade may be regulated under s 51(i) where ‘the law, by what it does in relation to
intrastate activities, protects against danger of physical interference the very activity itself which is
within federal power’.
 But reg 200B, which allowed reg 198 licencees to operate feeder flight to hubs irrespective of contrary State
laws, was struck down, i.e. incidental power doesn’t extend to regulating intrastate trade so as to make
interstate trade more profitable.

Kitto J
 The licensing system in its application to wholly intrastate air services is limited so as to serve only the purpose
of aiding and protecting the safety, regularity and efficiency of air navigation generally.
 Question: In so far as regs 198 and 199 aid and protect the safety, regularity and efficiency of intrastate air
navigation, have they the character of a law w.r.t. any subject or subjects of federal legislative power?
 Principle: Upon consideration of economic effects, the reach of the commerce power extends to “those intra-
State activities which in a substantial way interfere with or obstruct the exercise of the granted power”.
o The doctrine rests on the premise that “in certain fact situations the federal govt may find that reg of
purely local or intra-State commerce is ‘necessary and proper’ to prevent injury to inter-State
commerce”.
 The question must be considered in light of the nature of the particular form of commerce to which the law
relates. It is a question as to whether, when the factual situation in which the law operates is understood, the

29
 law by its operation upon the intrastate section of the relevant form of commerce is seen to operate also
upon the actual conduct of an activity or collection of activities in respect of which federal power exists.
o Where the intrastate activities, if the law were not to extend to them, would or might have a
prejudicial effect upon matters merely consequential upon the conduct of an activity within federal
power, that mere fact would not suffice to make the law a law “w.r.t.” that activity itself.
o But where the law, by what it does in relation to intrastate activities, protects against danger of
physical interference the very activity itself which is within federal power, the law is within the grant of
federal power.
 The question must also be answered in the light of the nature of air navigation as it exists as a
phenomenon of life in Australia and its Territories at the present time.
 A federal law which provides a method of controlling regular public transport services by air with regard only
to the safety, regularity and efficiency of air navigation is a law which operates to protect against real
possibilities of physical interference the actual carrying on of air navigation, and therefore is, in every
application that it has, a law "w.r.t." such air navigation as is within federal power, and none the less so
because it is also leg’n w.r.t. that intra-State air navigation which is not within the power.

The following case confirms distinction drawn between physical and economic integration of intrastate and other trade
in Airlines of NSW (No 2).

A-G (WA) v Australian National Airlines Commission (1976) HCA

Facts
 Australian National Airlines Commission established under Australian National Airlines Act 1945 (Cth).
 Section 19: Authorised Commission to transport passengers between States, between a State and a
Territory, and within a Territory (but not in trastate).
 Section 19B added in 1973: Authorised intrastate transport for purposes of ‘efficient, competitive or
profitable’ conduct of the Commission’s business, i.e. economic integration.
 Rationale: To allow Commission to operate a flight from Perth to Darwin stopping in Port Hedland (WA).
 Ansett, a competitor airline operating on this route, challenged the validity of s 19B.

Issue 1
 Was s 19B valid?

Held
 Majority: Upheld Airlines of NSW (No 2) distinction between physical and economic integration and declared s
19B to be outside power conferred on Cth by s 51(i).

Issue 2
 Can the valid operation of s 19B be saved from its invalid operation under s 15A of the Acts Interpretation Act
1901 (Cth) by being “read down” to exclude its invalid operation?

Held
 Different majority: Section 19B upheld under s 122 subject to reading down s 19B so as to apply only to
State-Territory flights, i.e. economic factors considered irrelevant to incidental characterisation under s 51(i)
but relevant to s 122.

30
Stephen J
 Question: Does s 51(i) incidentally include a grant of power to legislate for intrastate trade and commerce
when its only relationship to interstate trade and commerce lies in the fact that the purpose of engagement in
such intrastate activity is to conduce to the efficiency, competitiveness and profitability of the interstate
activity?
o Answer: No.
 The nature and subject of the particular head of power in question will be critical in determining
what is incidental to that particular power.
 The CON draws a distinction between those aspects of trade and commerce assigned to Cth legislative
competence and that which is left to the States.
o The effect of this has led to a quite narrowly confined ambit being given to the incidental
power in the case of s 51(i), at least where what is in question is possible intrusion into the field of
intrastate trade and commerce.
 Second Airlines Case:
o Barwick CJ: Cth power might include within its sweep intrastate trade and commerce if it were
necessary for the Cth law to be “effective” as to interstate trade. The fact that international or
interstate carriage by air may profit by, or to a significant degree depend upon, the level of intrastate
carriage by air did not warrant the conclusion that the Cth might stimulate and encourage the latter so
as to foster the former.
o Kitto J: There is a distinction between a law protecting from the danger of physical interference an
activity within power and one which prevents prejudice to matters merely consequential to such an
activity. Only the former would be within power.
o Taylor J: Adopted test of extent of power whether its exercise was necessary to the safety and
efficiency of interstate air navigation.
o Menzies J: There is power to control air navigation “if necessary for the effectual control” of
interstate air navigation; was it “necessary to make effectual” the latter?
o Windeyer J: Required some imperiling of the safety of interstate air navigation before intrastate air
navigation could come within Cth competence.
 The permitted exercise of the power conferred by s 19B, and which is described in ss (2) as “incidental”,
extends beyond the ambit of that incidental power which s 51(i) carries with it. It follows that the validity of s
19B cannot gain any support by reliance upon s 51(i); nor can the resultant deficiency of power be wholly
made good by recourse to s 122, whose deficiencies do not lie only in areas relates to Cth Territories, where
alone s 122 can be called in aid.
 Conclusion: Section 19B is ultra vires the legislative power of the Cth. However it does not wholly fail; s 15A
of the Acts Interpretations Act may come to its aid affording it validity over a restricted range of application.
The section will apply in its full vigour in relation to territory air services and to air services between a Territory
and other parts of Australia.
In holding that the Territories power could support landing rights at Port Hedland, Stephen J did not necessarily rely
on “implied incidental power” at all. It might be sufficient to say that the power to legislate for the Territories under s
122 is “plenary”.
 A law which has as its object the reduction in cost of or the improvement in the efficiency of some
govtal activity related to a Territory is a law w.r.t. the govt of that Territory.
 It is not clear that any question of implied incidental power can arise in the case of s 122, which itself confers
a plenary legislative power, leaving little room for any implication of incidental power.
 If there be implied incidental powers in connection with s 122, neither authority nor general principle calls for
their restriction to that which is “necessary” or “essential” to the effective exercise of the express power to
31
 legislate for the govt of a Territory; and if not so restricted it should extend to the authorisation of that which
will render a function of territorial govt more efficient, competitive and profitable.
 The taking of steps to promote the efficiency of those airline services is very much a part of the subject matter
described as “the govt of a Territory”.

As to s 51(i), Murphy J dissented. He argued for a wide interpretation of the power, uninhibited by any distinction
between intrastate and interstate trade.
Murphy J (dissenting)
 “Trade and commerce … among the States” is a comprehensive phrase and should not be construed
narrowly.
 The scope of the legislative power w.r.t. trade and commerce among the States should not be ascertained by
assuming a division between interstate and intrastate commerce.
o The CON does not mention intrastate trade and commerce and contains nothing which suggests a
rigid separation between the two.
 Even if there were such a division and mutual exclusion, legislative power w.r.t. trade and commerce among
the States and legislative power w.r.t. intrastate trade and commerce would not be mutually exclusive. The
States were not given exclusive power over intrastate trade and commerce.
o The Cth may override the suggested dividing line, for the words “w.r.t.” in s 51 and the incidental
aspect which is attached to each head of power authorise laws dealing not only with trade and
commerce among the States but with intrastate trade and commerce and with acts or transactions
which are not trade and commerce, as long as these are w.r.t., that is relevant to, trade and
commerce among the States.
 Conclusion: The sections in question authorise interstate transport for the purposes of efficient competitive
and profitable conduct of the interstate transport of the Commission. These criteria adopted by P’ment are well
within the scope of the commerce power. It is permissible for P’ment to take account of commercial effects in
legislating under the commerce power.

O’Sullivan v Noarlunga Meat (1954) HCA

Facts
 Commerce (Meat Export) Regs (Cth) was made pursuant to the Customs Act 1901 (Cth).
 Reg 5: Premises used for slaughter of meat for export have to be registered.
 Reg 4B: Elaborate health requirements with which registered premises are to comply.

Issue
 Under s 109 of the CON, were these regs inconsistent with similar SA leg’n (so that the holder of a Cth licence
would have no need for a State licence as well)?
 Was reg 5 was valid under trade and commerce power?

Held
 Dixon CJ, Fullagar and Kitto JJ: Found an inconsistency.
 McTiernan, Webb and Taylor JJ: Found no inconsistency.
o The CJ’s view prevailed pursuant to the Judiciary Act 1903 (Cth).
 Webb and Taylor JJ: Finding no inconsistency, expressed no view on the validity of the regs under s 51(i).
32
  Other four judges: Held regs to be valid.
 Trade and commerce power includes power to make provision for the quality of goods to be exported.
 Cth has legitimate concern in any matter that may affect beneficially or adversely Australia’s export trade.
 Power of Cth extends to ‘supervision and control of all acts or processes which can be identified as being done
or carried out for export’.

Fullagar J
 The Cth is legislating to ensure that only meat of a certain grade and quality shall be exported, and reg 4B is
clearly a law w.r.t. trade and commerce with other countries. The power given by s 51(i) extends to
authorising the total prohibition of the export of any commodity, and a fortiori it includes a power to prohibit
the export of any commodity except upon compliance with prescribed conditions.
 But the regs go further than this. Reg 5 prohibits the use of any premises for the slaughter of meat for
export unless those premises are registered, and a penalty is imposed on any use of premises which is in
breach of reg 5.
 Question: Does the Cth power w.r.t. trade and commerce with other countries extend to authorising leg’n
regulating and controlling the slaughter of meat for export?
o Answer: Yes.
 The expression “slaughter for export” is used as a composite expression which would be understood
objectively in the trade.
 Argument: The course of commerce with other countries does not begin until a later stage.
 Response: The regs must be held valid on the broad general principle of constitutional interpretation, i.e.
“Where any power or control is expressly granted, there is included in the grant, to the full extent of the
capacity of the grantor and without special mention, every power and every control of the denial of which
would render the grant itself ineffective”.
 It is true that the Cth possesses no specific power w.r.t. slaughter-houses. But it is undeniable that the
power w.r.t. trade and commerce with other countries includes a power to make provision for the
condition and quality of meat or of any other commodity to be exported.
o Moreover, by virtue of that power 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 Cth.
 Conclusion: The power of the Cth extended to the supervision and control of all acts or processes which can
be identified as being done or carried out for export. The “slaughter for export” of stock is such an act or
process, and, the regs are within the legislative power conferred upon the Cth by s 51(i).

Nationwide News v Wills (1992) HCA

Facts
 Section 299(1)(d)(ii) of Industrial Relations Act (Cth) protected Industrial Relations Commission
against verbal or written criticism.
 Cth relied on s 51(xxxv), a subject-matter power.

Summary
 Four judges held the provision was invalid on the basis of implied freedom of political communication (week
10).

33
  Mason J decided the law was invalid as well, however, on basis that means adopted in law not proportionate
to ends.
o Does not restrict ratio to purposive powers, but takes view that wherever a law is defended on
grounds that its purposes are within incidental power the Court is entitled to assess whether the
means it adopts are proportion to the ends it seeks to achieve.
o The question whether a law is sufficiently connected to a head of power is a question of
degree but it is one that the Court is entitled to examine within its general power to
enforce the CON.

Mason CJ
 To sustain the validity of s 299(1)(d)(ii) on the footing that it comes within the scope of the incidental reach of
the power, it must appear that there is a relevant and sufficient connection with the subject-
matter of the power.
 In determining whether such a connection exists, it is material to have regard to the purpose of the
provision and to the reasonableness of the connection between that law and the subject-matter
of the power.
 If the purpose of the impugned law is within power, that is enough, not matter that the connection between
the law and the subject-matter is remote and that the difficulties created for many persons affected are out of
all proportion to the advantage gained.
o This may also appear to suggest that matters of degree are for P’ment and not for the Court.
 It is for the Court to determine whether there is a reasonable connection between the law and
the subject-matter of the power and this is very often largely a question of degree.
 In characterising a law as one w.r.t. a permitted head of power, a reasonable proportionality must exist
between the designated object or purpose and the means selected by the law for achieving that object or
purpose.
o The concept of reasonable proportionality is now an accepted test of validity on the issue
of ultra vires.
 Davis v Cth (1988):
1. Even if the purpose of a law is to achieve an end within power, it will not fall within the scope of what is
incidental to the substantive power unless it is reasonable and appropriately adapted to the pursuit of an
end within power, i.e. unless it is capable of being considered to be reasonable proportionate to the
pursuit of that end.
2. In determining whether that requirement of reasonable proportionality is satisfied, it is material to
ascertain whether, and to what extent, the law goes beyond what is reasonably necessary or conceivably
desirable for the achievement of the legitimate object sought to be attained and, in so doing, causes
adverse consequences unrelated to the achievement of that object.
a. In particular, it is material to ascertain whether those adverse consequences result in any
infringement of fundamental values traditionally protected by the common law, such as freedom
of expression.
 Present case: In considering whether the protection sought to be given to the Commission is so
disproportionate as to lead to the conclusion that the protection stands outside the incidental scope of the
substantive power, two points are of paramount importance.
1. One argument is that the Commission’s reputation needs a greater deal of protection than the courts.
However, it is outweighed by the strength of the public interest in public scrutiny and freedom to criticise.
2. The Court must take account of and scrutinise with great anxiety the adverse impact of the impugned law
on such a fundamental freedom as freedom of expression.

34
 INCONSISTENCY

Section 109. Inconsistency of laws When a law of a State is inconsistent with a law of the Cth, the latter shall
prevail, and the former shall, to the extent of the inconsistently be invalid.

Three tests
1. SIMULTANEOUS OBEDIENCE TEST: If it is impossible to obey both laws.
 Logical impossibility – one law requires that you must do X, the other that you must not do X.
 R v Brisbane Licensing Court; Ex parte Daniell (1922): A State referendum on liquor trading areas was
fixed by State law for the same day as a federal Senate election. The Cth law provided that a State
referendum could not be held on that day.
 Cf. Australian Boot Trade Employees Federation v Whybrow (1910): Cth law prescribing higher
minimum wage than State law in particular State – possible to obey both by paying higher minimum wage,
so not inconsistent on this test.
 Ex parte McLean (1930): Where Cth and State laws prohibit same conduct, with differing penalties, Cth
law will prevail.
 But where same conduct gives rise to separate offences under Cth and State laws both may be valid.
o R v Winneke; Ex parte Gallagher (1982): Failure to answer questions at joint Federal and
State inquiry.
o Melvatas v Day (1989): Soldier DUI may be convicted both under State driving law and Cth
military law.

2. CONFERRAL OF RIGHTS TEST: If one law purports to confer a legal right, privilege or entitlement
that the other law purports to take away or diminish.
 One law says you can do X, the other says that you cannot do X.
 Colvin v Bradley Brothers (1943): A Cth provision affirmed that employers in certain industries could
employ women to work on certain machines; the State provision made it an offence to do so. It was
impossible to obey both laws, since nothing in the Cth law required the employment of females.
 This type of inconsistency may require a more subtle analysis than test 1. For one thing, test 1 is more
likely to be apparent on the face of the laws, whereas the reasoning involved in test 2 may require a
working-out of the actual effect of both in an individual case. But once test 2 is found to be applicable, it
too can be reduced to a contradiction.

3. “COVERING THE FIELD” TEST: If the Cth law evinces a legislative intention to “cover the field”.
35
  There need not be any direct contradiction. It may even happen that both require the same conduct, or
pursue the same legislative purpose. What is imputed to the Cth P’ment is a legislative intention that its
law shall be all the law there is on that topic. What is “inconsistent” with the Cth law is the existence of
any State law at all on that topic.
 Two questions:
1) Is the Cth law intended to be exclusive, that is, the only law on the topic?
a. Straightforward where the Cth law evinces an express intention that it is to be exclusive
within its field.
b. In other cases, the Court will look to a variety of factors, e.g. the subject-matter of the
law and whether for the law to achieve its purpose it is necessary that it be a complete
statement of the law on that topic.
2) Does the State law operate in the same field as the Cth law?
a. Can be problematic, since it may require a subjective assessment of the scope and
operation of the State and Cth laws.
 Inconsistency arises where the answer is “yes” to both questions.

Clyde Engineering Co Ltd v Cowburn (1926) HCA

Facts
 NSW Act: prescribed 44 hour working week.
 Federal award under Cth Act: fixed 48 hour week with deductions from pay where fewer hours worked.
 Cowburn, relying on the NSW Act, worked a 44 hour week. His employer, relying on the federal award, then
deducted wages for hours not worked.
 Employer’s right to expect 48 hours of work denied by State law and workers’ right to full wage for working 44
hours denied by federal award.

Isaacs J
 Cover the field test: If a competent legislature expressly or impliedly evinces its intention to cover the whole
field, that is a conclusive test of inconsistency where another legislature assumes to enter to any extent upon
the same field.
o If such a position be in fact established, the inconsistency is demonstrated, not by comparison of
detailed provisions, but by the mere existence of the two sets of provisions.
 Denial of rights test: If one enactment makes or acts upon as lawful that which the other makes unlawful,
or if one enactment makes unlawful that which the other makes or acts upon as lawful, the two are to that
extent inconsistent.
 Present case: State laws are inconsistent under both the above tests.

Knox CJ and Gavan Duffy J

 A simple test of logical contradiction (test 1) was “not sufficient or even appropriate in every case”, and
enunciated test 2: “Two enactments may be inconsistent although obedience to each of them may be possible
without disobeying the other. Statutes may do more than impose duties: they may, for instance, confer rights;
and one statute is inconsistent with another when it takes away a right conferred by that other even though
the right be one which might be waived or abandoned without disobeying the statute which conferred it”.

36
 Ex parte McLean (1930) HCA
Facts
 Section 44 of the Conciliation and Arbitration Act 1904 (Cth): A person in breach of an award was
liable to a penalty not exceeding a maximum to be fixed by the Court of Conciliation and Arbitration or by a
Conciliation Commissioner.
 Section 4 of the Masters and Servants Act (NSW): Any person who “absents himself from” or “neglects
to fulfil” a contract of service was liable to a penalty not exceeding 10 pounds.
 Fredrick Firth, a grazer, alleged that James McLean, an itinerant shearer, had “neglected to fulfil” his contract
through incompetence.
 McLean argued that, because both he and Firth were bound by a 1927 award made under the Cth Act, the
State Act was rendered invalid by s 109 of the CON.
 An inconsistency was said to arise because the same acts or omissions were made subject to the penal
sanctions of a Cth enactment as well as to the other different penal sanctions of a State enactment.

Dixon J
 When the Cth P’ment and a State P’ment each legislate upon the same subject and prescribe what the rule of
conduct shall be, they make laws which are inconsistent, notwithstanding that the rule of conduct is identical
which each prescribes, and s 109 applies.
 But the reason is that, by prescribing the rule to be observed, the Federal statute shows an intention to cover
the subject matter and provide what the law upon it shall be.
 If it appeared that the Federal law was intended to be supplementary to or cumulative upon State law, then no
inconsistency would be exhibited in imposing the same duties or in inflicting different penalties.
 The inconsistency does not lie in the mere coexistence of two laws which are susceptible of simultaneous
obedience. It depends upon the intention of the paramount Legislature to express by its
enactment, completely, exhaustively, or exclusively, what shall be the law governing the
particular conduct or matter to which its attention is directed.

Telstra Corporation v Worthing (1997) HCA

Facts
 Worthing made a claim under the Workers Compensation Act 1987 (NSW) in respect of injuries he
sustained while working as a Telecom linesman in 1986 and 1988, and a further injury in 1993 (by which time
the name of his employer had been changed to “Telstra”).
 However, it was held that none of the three injuries was compensable under State leg’n.
 At the time of the earlier injuries the State law in force was the Workers Compensation Act 1926 (NSW);
but that law was not binding on the Cth, and by s 21(3) of the Telecommunications Act 1975 (Cth),
Telecom and its successors were not subject to any obligation/liability under a law of a State to which the Cth
was not subject.
 As for the 1993 injury, it was covered by the workers compensation regime for Cth employees introduced by
the Safety, Rehabilitation and Compensation Act 1988 (Cth); and because the compensation under
that Act was different from that available under the State Act, the State Act would have the effect of qualifying
or impairing the Cth Act, and to some extent directly negating it.
 Hence an inconsistency arose under test 2 (and perhaps under test 1).

The Court
37
  VIC v Cth (1937) per Dixon J:
1. “When a State law, if valid, would alter, impair or detract from the operation of a law of the Cth P’ment,
then to that extent it is invalid.”
2. “Moreover, if it appears from the terms, the nature or the subject matter of a Federal enactment that it
was intended as a complete statement of the law governing a particular matter or set of rights and duties,
then for a State law to regulate or apply to the same matter or relation is regarded as a detraction from
the full operation of the Cth law and so as inconsistent.”
 The second proposition may apply in a given case where the first does not, yet, if the first
proposition applies, then s 109 operates even if, and without the occasion to consider whether,
the second proposition applies.
 Present case: To apply the State law to the claim made would qualify, impair and, in some respects, negate
the application of the federal law, with the consequence that, to the extent of the inconsistency thereby made
out, the State law was invalid.
o It would be no answer that the subject-matters of the two laws are not co-incident. Rather, the State
law, by granting certain rights, would deny or vary a right, power or privilege conferred by the federal
law.

Commercial Radio Coffs Harbour v Fuller (1986) HCA

Facts
 Broadcasting and Television Act 1942 (Cth): Provided for the provision of a Cth licence for a new
commercial radio station in Coffs Harbour.
 A condition of the licence required the erection of two antennae.
o Section 132(1): Any person who fails to comply any condition of a licence is guilty of an offence.
 A committee took proceedings in the NSW Land and Environment Court, seeking a further environmental
impact assessment under the Environmental Planning and Assessment Act 1987 (NSW).
Held
 No inconsistency under all three tests.
 The two laws were directed to different purposes, and therefore occupied different fields: one concerned with
the technical requirements of broadcasting, the other with the environment; hence, there was no
inconsistency under test 3.
 The licence condition requiring the company to erect the two antennae was construed as stopping short of
giving an authority to do so; hence, there was no inconsistency under test 2.
 The duty imposed by s 132(1) was construed as impliedly stopping short of requiring a licensee to disobey any
relevant law of a State; hence there was no inconsistency under test 1.

Gibbs CJ and Brennan J

 Ordinarily, a provision which imposes a duty under penalty to do a thing specified in the provision would be
construed as conferring on the person on whom the duty is imposed a power or authority to do that thing.
o But an alternative construction may be warranted: If it is impossible to do the thing specified in the
provision without contravening another law, the provision may be construed either as authorising the
doing of that thing (so that it is inconsistent with the other law) or as imposing a qualified duty which
stops short of requiring contravention of the other law.
 Present case: It would be erroneous to construe s 132(1) as conferring authority to do the many and diverse
things which fall within its scope if the doing of those things is prohibited by other laws.
38
 o The better construction is to read s 132(1) as not applying to a failure to comply with a condition
where compliance is impossible without contravening another law.

Wilson, Deane and Dawson JJ

 The Cth Act does not purport to state exclusively or exhaustively the law with which the operation of a
commercial broadcasting station must comply.
 The licence confers on the grantee a permission to broadcast. There is nothing in the Act which suggests
it confers an absolute right or positive authority to broadcast so that the grantee, because he has
a licence, is immune or exempt from compliance with State laws.
o On the contrary, in concentrating on the technical efficiency and quality of broadcasting services, the
Act leaves room for the operation of laws, both State and Cth, dealing with other matters relevant to
the operation of such licence.
 The intention of the Cth Act is to maintain the provision of high quality and technically efficient broadcasting
services which are commercially viable and receptive to the needs of the community. It does so by the
prohibition of broadcasting except under licence granted subject to certain conditions. But the relaxation of the
prohibition by the granting of a licence does not confer an immunity from other laws, Cth or State. The Act
does not purport to lay down the whole legislative framework within which the activity of broadcasting is to be
carried on. It is intended to operate within the setting of other laws with which the grantee of a licencee will
be required to comply.

Ansett Transport Industries (Operations) v Wardley (1980) HCA

Facts
 Award under Conciliation and Arbitration Act 1904 (Cth) gave airlines right to dismiss employees without
following standard procedures within first 6 months.
o Clause 6B: Provided that Ansett could dismiss pilots of less than six months’ service by giving seven
days’ notice in writing.
 Equal Opportunity Act 1977 (Vic): Prohibited discrimination on grounds of sex or marital status.
 Wardley (female) dismissed contrary to State law after being employed for 6 months.
 The Victorian Equal Opportunity Board found her dismissal unlawful and ordered her re-employment.
 Ansett argued that Cth law gave unrestricted rights to dismiss, overriding State law.

Held
 Majority, with Barwick CJ and Aicken J dissenting, dismissed Ansett’s challenge.
 Intention behind Cth award was only that dismissal procedure should not be restricted, not grounds for
dismissal, which are subject to State law.
 Provision in award allowing for dismissal on 7 days’ notice should be read subject to substantive criteria
supplied by State industrial law.
 State law does not detract from rights conferred by Cth law (test 2) because Cth law did not confer absolute
right to dismiss anyone for any reason whatsoever.

Stephen J
 Denial of rights test

39
 o The right of termination which cl 6 confers is not an absolute right. The right which it confers
is not one which is capable of exercise regardless of the unlawfulness under State law of the ground
for its exercise. On the contrary it is a right the nature of which is to be understood against the
background to its operation which general laws of the land, whether State or federal in origin, provide.
o The Agreement is not to be read as if creating a partial vacuum, within which the relationship
between Ansett and its pilots lies wholly withdrawn from the operation of those general laws of the
land which are applicable to other members of the community.
 The present industrial agreement, made in settlement of an industrial dispute, is concerned
with industrial matters and its terms should be construed accordingly.
o There is nothing in cl 6B in its quite unexceptional wording to suggest that it should stand
inviolate, unresponsive to a general law applicable to the community at large and directed to the
prevention of some evil practice which, of its nature, may manifest itself in a variety of ways.

 Cover the field test

o The effect of the State Act does not in any way destroy or vary “the adjustment of
industrial relations established” by the Agreement. Moreover the respective natures of those
two measures are such that collision is not likely to occur between them, and this because they are
laws on different subjects.
 Where the ground for dismissal with which a State law deal is unrelated to industrial
considerations and instead relates to discrimination, the existence of a federal award or
industrial agreement will present no situation of inconsistency.
o There is, a fortiori, no such inconsistency arising under the doctrine of “covering the field”, and this
very much for the reasons in dealing with direct collision. Whatever field the Agreement may cover,
the question of dismissal upon the discriminatory ground that the pilot is a woman is no part of it.
o See p. 383 for important factors considered in this case.

Mason J
 “Direct inconsistency” is a description which has always been applied to cases in which it is impossible to
obey both laws [test 1]. It is also a description which has been applied to cases in which the Cth law grants a
permission or a right and the State law prohibits that which is permitted or prohibits the exercise of the right
[test 2]. Cases of this kind have sometimes been treated as a separate head of inconsistency, though even
when so treated they have generally been related to the “cover the field” test [test 3].
 As the various tests which have been applied by the Court are all designed to elucidate the issue of
inconsistency it is not surprising that they are interrelated and that in a given case more than one
test is capable of being applied so as to establish inconsistency.
o Relationship between test 1 and test 2: If, according to the true construction of the Cth law, the
right is absolute, then it inevitably follows that the right is intended to prevail to the exclusion of
any other law. A State law which takes away the right is inconsistent because it is in conflict with the
absolute right and because the Cth law relevantly occupies the field. So also with a Cth law that grants
a permission by way of positive authority. The Cth legislative intention which sustains the conclusion
that the permission is granted by way of positive authority also sustains the conclusion that the
positive authority was to take effect to the exclusion of any other law. Again it produces inconsistency
on both grounds, where the permission for which Cth law has provided was neither absolute nor
comprehensive.
 Conclusion: The Agreement should not be viewed as a general industry award which seeks to determine
exhaustively the respective rights of employer and employee. Its emphasis is on setting out in exact detail the
manner and procedure governing the advancement of a pilot in terms of seniority and rights dependent
thereon.

40
 o Clause 6B does not deal with the substantive right of dismissal. It merely assumes the right
to dismissal for which the general law provides.
o The right of an employer under the general law to dismiss an employee has been altered by the State
Act. The Agreement is to bread in the light of this alteration in the general law. Also cl 6B does not
seek to cover the field of the employee’s right to dismiss.

Aickin J (dissenting)
 Direct conflict question: The Agreement makes an express provision for dismissal of such a pilot, or
termination of his employment without restricting in any way the grounds upon which such termination may
be given. The State Act would enable such a decision to be set at nought by the Board ordering reinstatement
or re-employment, and apparently payment in respect of any period between the termination and the
reinstatement. This appears to involve inconsistency in the sense that the State Act would if valid
"impair alter or detract from the operation of" the Agreement.
 The two different aspects of inconsistency are no more than a reflection of different ways in which the
P’ment may manifest its intention that the federal law, whether wide or narrow in its operation,
should be the exclusive reg of the relevant conduct.
o The central question is the intention of a particular federal law.

Australian Mutual Provident Society v Goulden (1986) HCA

B&W
 Like Ansett, this case involved interaction of State anti-discrimination law.

Facts
 Goulden, who was blind, sought to vary life-insurance policy by adding a clause that provided that he would
not have to pay premiums if disabled by illness, accident or injury.
 Section 78(1) of the Life Insurance Act (Cth): A company shall not issue any policy unless the rate of
premium chargeable under the policy is a rate which has been approved by an actuary as suitable for the class
of policy to which that policy belongs.
 AMP’s refusal to grant variation found to be discriminatory under s 49K(1) of the Anti-Discrimination Act
1977 (NSW).

Held
 AMP’s refusal was overturned.
 At first blush, case looks exactly same as Ansett.
o Distinction seems to be that effective carrying out of AMP’s business depended on its being able to
make the sort of discriminatory risk assessment at issue, i.e. that blind people would pose a higher
risk of total disability and therefore could not be offered the premium waiver option.
 Life insurer’s capacity to manage risk seen as being to advantage of insured persons generally, and therefore
essential to proper functioning of Cth Act.
o This line of reasoning appears to subordinate principle of non-discrimination to business interests.
 Had AMP been forced to offer premium waiver, it could have mitigated risk by higher premiums.

The Court

41
  The Life Insurance Act should be understood as giving expression to a legislative policy that the protection
of the interests of policy holders is to be achieved by allowing a registered life insurance company to classify
risks and fix rates of premium in its life insurance business in accordance with its own judgment founded upon
the advice of actuaries and the practice of prudent insurers.
 It would alter, impair or detract from the Cth scheme of reg established by the Life Insurance Act if a
registered life insurance company was effectively precluded by the leg’n of a State from classifying different
risks differently.
 In particular, State leg’n which, either absolutely or subject to qualifications and exceptions, made it generally
unlawful for a life insurance company to take account of physical impairment in determining whether it would
or would not accept a particular proposal or the terms upon which it would grant insurance cover would be
inconsistent with the essential scheme of the provisions of the Act regulating the issue of policies and
the fixing of premiums.
 Indeed, such leg’n would undermine and, to a significant extent, negate the legislative assumption of the
underlying ability of a registered life insurance company to classify risks and fix rates of premium in
accordance with its own judgment based upon actuarial advice and prudent insurance practice.

Operational inconsistency
APLA v Legal Services Commissioner (NSW) (2005) HCA
Facts
 Legal Profession Amendment (Personal Injury Advertising) Reg (NSW): Prohibited advertisement for
services related to personal injury claims.
 Various Cth states provided rights to compensation for personal injury victims.

Held
 Section 109 did not apply.
 Majority: Distinguished AMP on grounds that discrimination ‘is of the essence of life insurance’ whereas ‘none
of the federal leg’n depends for its efficacy upon the unrestricted promotion of legal services’.
 Callinan J: Drew distinction between significant and marginal impact on Cth law, saying impact here so
marginal as to be inconsequential.
 Kirby J (in dissent): AMP rule supported plaintiffs’ contention that State prohibition on advertising for legal
services detracted from various Cth scheme for recovery of compensation.
o To vindicate rights, personal injury claimants must know what their rights are.

Kirby J (dissenting)
 Question: Is any State law inconsistent with the federal provisions because its operation would “alter, impair
or detract from the operation of a law of the Cth P’ment”?
 Clearly, the Federal P’ment’s purpose was to create new rights, remedies, duties and powers in order to carry
into effect the objectives identified in the Trade Practices Act.
o It cannot be imagined that P’ment, in enacting such federal laws, regarded it as sufficient to put them
on the federal statute book as a pure symbol or hollow injunction to good conduct.
 Unless persons affected may be informed about the existence of such rights, and how they may
go about enforcing them, the rights will in many cases be entirely theoretical.
 In some ways the position in the present case is akin to that which arose in Goulden. There, a State law
purported to prohibit discrimination on the basis of physical disability. However, that State law was held
42
 inconsistent with “the essential scheme” of the Life Insurance Act which contemplated differential premium
rates.
o If such an intersection of a particular State law and a general federal law was inconsistent with the
CON in a defined and well-intentioned field of State lawmaking, it is difficult for this Court acting
consistently, to uphold the present blunderbuss of State prohibitions when they directly impinge upon
the effectiveness of rights conferred by remedial federal leg’n.
 “Operational inconsistency”: An inquiry into the practical operation of the State law that is impugned and
whether, if it operates as its language provides and its purpose appears to intend, it would alter, impair or
detract from the operation of the federal law.

Gleeson and Hayden JJ

 In Goulden, it was held that it would alter, impair or detract from the Cth scheme of reg if a registered life
insurance company was prevented by State leg’n from classifying different risks differently or from setting
different insurance premiums for different risks. Discrimination in that sense is the essence of life insurance. If
State anti-discrimination leg’n prevented life insurers from differentiating between sick or disabled persons and
others, then the federal scheme of reg would be set at naught. That was the context in which reference was
made to impairment of a federal scheme of leg’n.
 Present case: Preventing lawyers from advertising does not impair federal leg’n.
o None of the federal leg’n depends for its efficacy upon the unrestricted promotion of legal services.
The rights, powers, and jurisdictions created have full legal effect and operation regardless of
whether, at any given time, the States or Territories permit or restrict advertising by lawyers.

Callinan J

 The notion that a restriction upon advertising by solicitors soliciting personally injured or other clients, alters,
impairs or detracts from the pursuit of remedies made available under federal leg’n is far-fetched.
o People pursuing them are in no way impeded from doing so because lawyers may be subject to State
rules about the way in which they may promote themselves or offer their services.
 A slight or marginal or insignificant impact upon a federal law will not give rise to a
constitutional inconsistency. The impact must be one of some significance and such as would
have the effect, if the State law were valid, of precluding, overriding or rendering ineffective an
actual exercise of federal jurisdiction.

B&W
 On the one hand, the concept of “operational inconsistency” is potentially more far reaching than “cover the
field”, since it may arise even when two laws are addressed to completely different fields.
 On the other hand, it is potentially narrower in the sense that what it would render inoperative is not the
whole of the State law, but only those particular applications of it which impact on the Cth law.
 Possibility still exists, however, that in appropriate case Court might refuse to enforce State law
on grounds of operational inconsistency where ‘cover the field’ test would not have produced
inconsistency (because fields regulated by Cth and State not the same).

Express intention clauses

West v Commissioner of Taxation (NSW) (1937) HCA
43
Evatt J
 Attempts by the Cth P’ment to manufacture “inconsistency” between its own leg’n and that of the States will
often be essayed only at the price of making the Cth leg’n ultra vires.

B&W
 Later attempts to apply Evatt J’s reasoning have failed.

Wenn v Attorney General (Vic) (1948) HCA

Facts
 Wenn was a member of the Victorian Public Service, who claimed that he was entitled to promotion to a
position as Senior Warder.
 He was not a discharged serviceman, but would have been entitled to be promoted to the position unless the
Public Service Board of Victoria was bound by the State Act to promote a discharged serviceman in priority to
him.

Issue
 General: Could the Cth scheme for preferential employment of ex-service personnel after WWII override a
similar State scheme?
 Precise: Could s 27 of the Re-establishment and Employment Act 1945 (Cth), which made no provision
for preference to ex-service personnel in promotions, override the aspect of the Discharged Servicemen’s
Preference Act 1943 (Vic), which provided for preference in promotions? The crucial provision was s 24(2).

Held
 The State Act was overridden by the Cth Act.
 Latham CJ and McTiernan J: Section 24(2) was especially important because the substantive provisions in s
27 of the Cth Act, silent as they were on the precise question of preferential promotion, would not have been
enough to override the Victorian provision on that question.
o The inconsistency that brought s 109 into play, thereby excluding the Victorian Act, depended on s
24(2).
 Dixon and Rich JJ: Section 24(2) was merely part of the material on which the Cth Act was judged to have
“covered the field”.

Latham CJ
 Cover the field test: It has been held that it may be ascertained by inference from the nature and scope of
the provisions of a Cth statute that it was the intention of the P’ment that the provisions of the statute should
be the only law to be applied to the subject, so that it can be seen that the Cth P’ment intended that there
should be no State law dealing with the particular subject matter in question.
 Where such inference can properly be drawn the Cth leg’n prevails over any state law by virtue of s 109.
 In the Cth Act now under consideration, however, the Cth P’ment has not left this matter to be determined by
an inference from the nature and scope of the statute. The P’ment has most expressly stated an intention. If
such a P’mentary intention is effective when it is ascertained by inference only, there can be no
reason why it should not be equally effective when the intention is expressly stated.

44
  Present case
o The “rehabilitation” of discharged members of the forces is a matter which falls within the legislative
power of the Cth P’ment.
o Section 24(2) is a provision prescribing the area within which Federal law is to apply to the exclusion
of State law in respect of a subject area as to which the Cth P’ment has full legislative power.

Dixon J
 The Federal Act discloses a legislative determination by the Federal P’ment of the question what shall be the
extent of the legal obligation to give preference in matters of employment; and the decision embodied in the
Act is that the legal obligation shall not apply where the employer appoints a person already employed by him.
o Between s 10 of the State Act, providing as it does for preference to discharged servicemen in
promotion, and the Federal leg’n there is consequently an inconsistency which must be fatal to the
section under s 109.
 Sections 24 and 27 appear to justify the conclusion that, on the one hand, the Federal P’ment intended to
define the extent to which the duty to give preference should go and to do it so as to exclude promotion, and,
that on the other hand, it intended to provide in this and other respects what would be the only rule upon the
subject and so would operate uniformly and without differentiation based on locality or other conditions.
o This is a case where the Federal leg’n undertakes a reg or statutory determination of the very subject
and then goes on to express an intention that it shall be an exhaustive declaration of the law on that
particular subject.

Botany Municipal Council v Federal Airports Corporation (1992) HCA

Facts
 Cth sought to build a third runway at Sydney Airport.
 Two Sydney Councils sought an injunction arguing that the dredging of the bay floor required an additional
environmental impact statement under the Environmental Planning and Assessment Act 1979 (NSW).
 Before the matter could be heard the Cth made regs under the Federal Airports Corporation Act 1986
(Cth). The regs unmistakably evinced an intention on the part of the Cth to “cover the field”.
o Thus the only real prospect for success was to argue that the regs were invalid.
 Regs 7 and 8: Established a system by which “works” would be undertaken and “rights” exercised by
licensees.
 Reg 9(1): A person who is not a licensee must not carry out any part of the “works” or exercise any of the
“rights”.
 Reg 9(2): A licensee is authorised to carry out the part of the works in spite of a law or a provision of a law
of the State of New South Wales.
o There then followed a long list of NSW laws specifically overridden, including the Environmental
Planning and Assessment Act.

Held
 The regs, including reg 9(2), were valid.
 Two bases on which implied intention may be inferred:
o From the detail of the legislative regime (generally, the more exhaustive the detail, the more likely
that an intention to cover the field will be inferred – but in some cases the absence of detail founds
inference of intention to cover field).
45
 o From the subject matter of leg’n (does subject matter by its nature require uniform regime across all
States? E.g. currency, intellectual property, weights and measures, quarantine).
 Either or both of these indicators may be used, but neither is decisive.

The Court
 Applicant’s principal challenge: If all the Regs seek to do is to render the State leg’n inoperative, they are
invalid.
 Answer: The Regs have a wider purpose. They establish a licensing regime regulating the engagement of
contractors who are to carry out any part of the works or exercise any of the rights within or over either or
both the airport or the dredging site.
 Reg 9(2) is designed to ensure that the carrying out of the works and the exercise of the rights is governed
by, and is in accordance with, the environmental standards as defined by the Regs, i.e. the Cth standards, and
to ensure that the work authorised by Cth law is neither prevented nor hindered by State law.
o Leg’n which attains those objects and confers that immunity is necessarily inconsistent with State law
and therefore becomes inoperative by operation of s 109. Viewed in this way, reg 9(2) is plainly valid.
 This is not a case in which the Cth law is aimed at preventing or controlling State legislative action rather than
dealing with a subject matter assigned to the Cth P’ment. Nor is it a case in which the Cth law invalidly seeks
to displace or expand the operation of s 109.
 There can be no objection to a Cth law on a subject which falls within a head of Cth legislative power
providing that a person is authorised to undertake an activity despite a State law prohibiting, restricting,
qualifying or regulating that activity.
o Indeed, unless the law expresses itself directly in that way, there is the possibility that it may not be
understood as manifesting an intention to occupy the relevant field to the exclusion of State law.

Clearing the field

R v Credit Tribunal; Ex parte General Motors Acceptance Corporation (GMAC Case)

(1977) HCA
Facts
 Section 75 of Trade Practices Act 1974 (Cth):
o Provides that Act ‘not intended to exclude or limit the concurrent operation of any law of a State or
Territory’.
o Also prohibits double criminal punishment under Cth and State law.

Held
 Section 75 valid.

Mason J
 A Cth law may provide that it is not intended to make exhaustive or exclusive provision w.r.t. the subject with
which it deals, thereby enabling State laws, not inconsistent with Cth law, to have an operation. Here again
the Cth law does not of its own force give State laws a valid operation. All that it does it to make it clear that
the Cth law is not intended to cover the field, thereby leaving room for the operation of such State laws as do
not conflict with Cth law.

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 o Qualification: A provision in a Cth statute evincing an intention that the statute is not intended to
cover the field cannot avoid or eliminate a case of direct inconsistency or collision.
 But where there is no direct inconsistency, where inconsistency can only arise if the Cth law is intended to be
an exhaustive and exclusive law, a provision of the kind under consideration will be effective to avoid
inconsistency by making it clear that the law is not intended to be exhaustive or exclusive.
 Present case: There is a very clear expression of intention that the Trade Practices Act is not an exhaustive
enactment on the topics with which it deals and that it is not intended to operate to the exclusion of State
laws on those topics.

Covering the field summary

Step 1: Identifying or characterising the field
 Process of identification of subject matter is similar to that followed in characterisation (what is the law
about?)
 Cover the field test is open to judicial discretion/manipulation at this point as much depends on how widely or
narrowly the two fields are defined.
 E.g. Noarlunga Meat, fields defined as licensing of premises for slaughtering of meat for export, thus
overlapped, whereas on narrow definition Cth law dealt with matters of hygiene and production quality, and
State law with identity of proprietor (‘fit and proper persons’) and location of abattoir.
 Airlines of NSW (No 2) – both Cth law and State law set licence conditions for operating commercial aircraft
but found not to overlap (or to conflict?) because different considerations set for grant of licence in each case.

Step 2: Decide whether State law encroaches on field covered by Cth law.
 Ansett Transport Industries v Wardley
o Did State law on discrimination encroach on Cth award reg conditions of dismissal?
o There was a clear overlap between two areas of reg, as the facts of the case illustrated, but majority
decided that the two laws in effect dealt with two separate fields (industrial relations and
discrimination).
 Commercial Radio Coffs Harbour v Fuller
o Ratio station argued that, having been granted a licence to broadcast under Cth Act, its broadcasting
activities could not be restricted by State leg’n.
o Court held that Cth law did not ‘purport to state exclusively or exhaustively the law with which the
operation of a commercial broadcasting station must comply’, but merely prohibited broadcasting
without a licence.
o Grant of licence therefore did not exempt licensee from compliance with State law.
 Australian Mutual President Provident Society v Goulden
o AMP refused to vary policy to permit waiver of premium benefits in event of total disability
o Cth Act found to cover field of insurance to exclusion of NSW Act prohibition discrimination on ground
of disability.

Step 3: Decide whether Cth law intended to cover the field.

 Intention may either be express or implied.
 Express intention may either be to cover the field or to leave it open for complementary State laws.

47
  Wenn v A-G (Vic)
o Post WWII Cth law silent on question whether preferential treatment should be given to returned
servicemen in employment promotion, whereas Victorian Act expressly provided for such preferential
treatment.
o Cth contained express intention clause saying that its provision were in general intended to override
inconsistent State law.
o Express intention clause crucial to Court’s determination that the Cth leg’n’s silence on this issue was
deliberate, i.e. that it intended to override State law.
o Provided subject of Cth leg’n within power, a statement that the Cth law overrides State law not
invalid interference with State legislative power.
 Obviously, clause in Cth law expressing intention to cover the field will fail where Cth has no legislative power
over issue in question (Airlines of NSW (No 2)).

Retrospective laws and the purpose of section 109

University of Wollongong v Metwally (1984) HCA
Facts
 Metwally was an Egyptian postgraduate student at Wollongong University. He successfully lodged a complaint
of victimisation against the university under Anti-Discrimination Act 1977 (NSW).
 University appealed to NSWCA, and then to HC.
 Question of inconsistency between State Act and Racial Discrimination Act 1975 (Cth) had been decided
by HC in Viskauska v Niland (declaring State Act inconsistent with Cth Act).
 Cth Act amended in 1983 expressly to indicate intention not to exclude State law, and that intention should be
deemed never to have been to do so.
 Alleged discriminatory treatment had occurred in period covered by retrospective application.

Held
 Gibbs CJ, Murphy, Brennan and Deane JJ: Section 6A could not retrospectively revive the NSW Act.

Gibbs CJ
 “Invalid” in s 109 means, not void, but “inoperative”, so that if a State law, which was inconsistent with a law
of the Cth, was not repealed by the State legislature and remained on the statute book, the expiration/repeal
of the Cth law would have the result that the State law would come into force.
o It follows that if a Cth statute which, on its proper construction, had revealed an intention to cover
exclusively and exhaustively the subject matter with which it dealt, so that in consequence a State
statute dealing with the same subject matter was rendered inoperative, were subsequently amended
in such a way as to manifest an intention that it was not intended to exclude the operation of the
State law, the operation of the State statute would thereupon revive.
o When the Amendment Act came into force, the Anti-Discrimination Act again became
operative in NSW.
 Argument: Since the Cth P’ment has power to make its enactments retrospective, it could retrospectively
amend the Cth Act, so as to indicate an intention not to exclude the operation of the State law, and thereby
cause the Anti-Discrimination Act to have a valid operation from its inception, notwithstanding that in truth it
was inconsistent with the Cth Act at all times before the Amendment Act was passed.
 Response: The acceptance of this argument would mean that the Cth P’ment could enact a law which would
retrospectively deprive s 109 of its operation.
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 o In other words, the Cth law itself could vary the effect which s 109 had produced at the relevant time;
it could give to a State law a valid operation as at a time when s 109 had rendered it invalid.
o But Cth statutes cannot prevail over the CON.
 The P’ment cannot exclude the operation of s 109 by providing that the intention of the P’ment
shall be deemed to have been different from what it actually was and that what was in truth an
inconsistency shall be deemed to have not existed.
 Present case: Since an inconsistency in fact existed, the provisions of s 109 were called into play and their
effect cannot later be excluded by retrospectively declaring that the truth was otherwise than it was.

Deane J
 Section 109 is not concerned merely to resolve disputes between the Cth and a State as to the validity of
their competing claims.
o It serves the equally important function of protecting the individual from the injustice of being
subjected to the requirements of valid and inconsistent laws of Cth and State P’ments on the same
subject.
o For so long as inconsistency exists, s 109 deprives the State law of its validity with the consequence
that he or she has the constitutional right to ignore it.
 A p’ment cannot objectively expunge the past or "alter the facts of history".
 Section 109 is not concerned with legal fictions. It is concerned with the reality of contemporaneous
inconsistency between a valid law of the Cth and an otherwise valid law of a State.
o If there is inconsistency between an otherwise valid law of a State and a valid law of the Cth the State
law shall be, to the extent of the inconsistency, invalid. It is not the Cth law which operates to make
the State law invalid. It is the CON itself.
 The fact that the Cth P’ment legislates retrospectively to introduce the fiction that, for the purposes of its law,
its inconsistent law never existed or had a different operation to that which it in fact had cannot alter the
objective fact that at the previous time when s 109 operated that inconsistency did exist. Nor can it alter the
fact that the immediate and self-executing provisions of s 109 had already operated upon that inconsistency to
invalidate the State law not for the period in which the Cth P’ment, by the introduction of a fiction for its
purposes, has subsequently said that its law had a different operation to that which it in fact had but for the
period in which the fact of that inconsistency existed.
 While the Cth can retrospectively legislate for itself it cannot retrospectively impose as State law the provisions
of a law which the CON has said was invalid because of contemporaneous inconsistency which has
subsequently been removed.
 Present case: The Cth P’ment, being subordinate to the CON, could not, by its 1983 Amending Act, reverse
the past operation of s 109 which had rendered invalid or inoperative the relevant provisions of the NSW Act.
o That being so, the position remains that the relevant provisions of the NSW Act were not operative at
the time the acts complained of in the present case were committed and the conduct for which the
appellant has been held responsible was not unlawful under the provisions of the NSW Act.

Mason J (dissenting)
 What the P’ment can enact prospectively in the exercise of its legislative power it can also enact
retrospectively. Just as a Cth law can validly provide that it is not intended to operate as an exhaustive or
exclusive reg of the subject-matter so it may validly provide that it never was intended to so operate.
 Point of departure: When the retrospective operation of the Cth statute displaces an inconsistency or cause
of inconsistency with a State law which has previously arisen. This is because the Cth statute is attempting to
give a valid operation to a State statute which was rendered inoperative by s 109.
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 o This mistakes the legal operation of s 6A. It says nothing about the State Act; it amends the Cth
Act by altering its prospective and retrospective operation. In so doing, it removes the inconsistency
with the State Act. And in removing the inconsistency, s 6A does not attempt to contradict the
operation of s 109. What the statutory provision does is to eliminate the basis on which s 109 can
operate.
 Section 109 is not a source of individual rights and immunities except in so far as individual
rights and immunities are necessarily affected because the section renders inoperative a State
law which is inconsistent with a Cth law. Nor is the section a source of protection to the
individual against the unfairness and injustice of a retrospective law.

THE EXTERNAL AFFAIRS POWER - A

Section 51(xxix): The P’ment shall, subject to this Constitution, have power to make laws for the peace, order, and
good govt of the Cth w.r.t.:
(xxix) External affairs.

Relations with other countries

R v Sharkey (1949) HCA

Facts
 Section 24A of the Crimes Act 1914 (Cth) defined “seditious intention” to include an intention “to excite
disaffection against the Govt or Constitution of any of the King’s Dominions”.

Latham CJ
 Relations of the Cth with all countries outside Australia, are matters which fall directly within the subject of
external affairs. Preservation of friendly relations with other dominions is an important part of the
management of external affairs.
 The prevention and punishment of the excitement of disaffection may reasonably be thought by P’ment to
constitute an element of preserving friendly relations.

NSW v Cth (Seas and Submerged Lands Case) (1975) HCA

Stephen J
 It is international intercourse between nation states which is the substance of a nation’s external affairs.
Treaties and conventions to which a nation become a part form an important part of those affairs, but
“external affairs” will also include matters which are not consensual in character; conduct on the part
of a nation, or of its nationals, which affects other nations and its relations with them are external
affairs of that nation.

Barwick CJ
 The external affairs power extends to anything “which in its nature is external to … Australia”.

Mason J
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  The external affairs power extends “to matters or things geographically situated outside Australia”.

Matters external to Australia and other aspects

Polyukhovich v Cth (War Crimes Act Case) (1991) HCA

Facts
 Section 9 of War Crimes Act 1945 (Cth) provided that an Australian citizen or resident who had
committed a ‘war crime’ between 1939-45 could be indicted in Australia.
 In 1988, P’ment tried to legislate to identify certain crimes committed in Europe during WWII as “war crimes”
and to provide for the trial, in present-day Australia, or persons who are now Australian citizens/residents who
might have committed such crimes.

Deane J
 Any law which can properly be characterised as a law w.r.t. any matter, thing or person occurring
or situate outside Australia is a law w.r.t. “External affairs” for the purposes of s 51(xxix).
o That conclusion is supported by the consideration that Cth laws w.r.t. matters, things or persons
outside Australia are likely to operate in areas where there will commonly be no competing State
interests with the result that, in the absence of Cth legislative power, there would be a lacuna in the
plenitude of combined legislative powers of the various P’ments of the Australian federation.
 Present case: To that extent they provide for the trial and punishment of Australian citizens and residents for
acts committed outside Australia and having a specified relationship with the 1939-1945 war or armed conflict
which occurred in Europe, the provisions of the Act are clearly a law or laws w.r.t. matters or things which
occurred or were done outside Australia.

Brennan J (dissenting)
 The powers conferred by the CON are not to be expanded beyond their true scope merely to supply what is
thought, from the public viewpoint, to be a desirable or convenient power.
o The legislative powers of the P’ment are limited by the terms of the CON, and the connotation of the
phrase “external affairs” must be ascertained from its context and purpose.
 The phrase “external affairs” does not sweep into Cth power every person who exists or every relationship, set
of circumstances or field of activity which exists or occurs outside Australian territory.
o The “affairs” which are the subject matter of the power are the external affairs of Australia; not
affairs which have nothing to do with Australia.
 Must be some nexus, not necessarily substantial, between Australia and the “external affairs”
which a law purports to affect before the law is supported by s 51(xxix).
 If the legislative judgment cannot reasonably be supported, the law will be held to be outside the power
conferred by s 51(xxix).
 It leaves no great lacuna in the plenitude of Australian legislative power to deny the character of a law w.r.t.
external affairs to a law which does no more than affect something or somebody unconnected with Australia
occurring or existing outside Australia.
o The limits of the power conferred by s 51(xxix) are, in a real sense, a guarantee of the immunity
from harassment by Australian law of persons who, having no connexion with Australia, engage
in conduct elsewhere which does not affect Australian interests or concerns.
 Present case: The fact that the leg’n is limited to prosecution of persons who are now Australian resident or
citizens is not a sufficient “Australian connexion” .
51
Toohey J
 There is a need for some “Australian connexion”. He agreed with Brennan J on this point.
 However, there is a sufficient connection in the mere fact of Australia’s involvement as a belligerent in WWII.

Gaudron J
 Externally located “external affairs” must have an element of Australian interest or concern. She agreed with
Brennan J on this point.
 However, P’ment’s decision to legislate shows conclusively that this element was present. She agreed with
Mason J on this point.

Mason J
 It is enough that P’ment’s judgment is that Australia has an interest or concern.
 It is inconceivable that the Court could overrule P’ment’s decision on that question.

Horta v Cth (1994) HCA

Facts
 Bilateral treaty between Australia and Indonesia regarding exploration for, and exploitation of, petroleum
resources in Timor Gap (outside territorial waters of both).
 Leg'n passed pursuant to this treaty challenged on basis that East Timor not part of Indonesia and therefore
that Indonesia did not have power to enter into treaty.
 Argued that treaty was invalid under international law and so could not be validly implemented under s
51(xxix).

The Court
 Regardless of whether the mere fact that a matter or thing is territorially outside Australia is of itself sufficient
to bring a matter or thing within the phrase “External affairs” for the purposes of s 51(xxix) or whether one or
other of those additional factors is necessary, it is clear that the area of the Timor Gap and the
exploration for, and the exploitation of, petroleum resources within that area all fall within that
phrase.
o Each of those matters is geographically external to Australia. There is an obvious and substantial
nexus between each of them and Australia. They are all matters which the P’ment recognises as those
affecting or touching Australia.
o That being so, the enactment of a law w.r.t. one or all of those matters is prima facie
within the legislative power conferred by s 51(xxix).
 There can be circumstances in which a law which is prima facie within the legislative power conferred by s
51(xxix) is nonetheless outside the legislative powers of the P’ment by reason of some other provision of
the CON, express or implied, to which the legislative power conferred by s 51(xxix) is subject.
o However, no such circumstances exist in the present case.
 Even if the Treaty were void or unlawful under international law or if Australia’s entry into or
performance of the Treaty involved a breach of Australia’s obligations under international law,
the Act and the Consequential Act would not thereby be deprived of their character as laws w.r.t.
“External affairs” for the purposes of s 51(xxix).

52
 o Neither s 51(xxix) itself nor any other provision of the CON confines the legislative power w.r.t.
“External affairs” to the enactment of laws which are consistent with, or which relate to treaties
or matters which are consistent with, the requirements of international law.
o There is no basis that the legislative power conferred by s 51(xxix) must be confined within the limits
of “Australia’s legislative competence as recognized by international law”.

XYZ v Cth (2006) HCA

Facts
 Challenge to ss 50BA and 50BC of Crimes Act 1914 (Cth) (inserted in 1994) prohibiting Australian citizens
and residents from engaging in sexual intercourse or committing acts of indecency with persons under 16
while outside Australia (‘child sex tourism’).
 Plaintiff asked Court to restrict external affairs power to power to make laws w.r.t. relations between Australia
and other countries (by overruling Polyukhovich and Horta).

Summary
 Gleeson CJ, Gummow, Hayne and Crennan JJ: Reaffirmed the externality principle and upheld the leg’n
on that basis.
 Kirby J: Had doubt about externality principle but found it unnecessary to resolve the doubt because law
could be upheld as “one w.r.t. the international relationships of Australia with other nation states and
international organisations”.
 Callinan and Heydon JJ (dissenting): Geographic externality not enough to sustain law.
 RATIO: Matters, things, events, persons outside Australia are within this aspect of the power
without there being any need to show a particular nexus or interest of Australia.
 Ratio of Polyukhovich stated as being that external affairs power extends to Australia’s relations with other
countries and ‘to make laws w.r.t. places, persons, matters or things outside the geographical limits of, that is,
external to, Australia’.
 Gleeson CJ decides unnecessary to consider Cth’s alternative argument, based on allegation that sex tourism
clearly an issue of ‘international concern’.
o Implies that this criterion is not an additional criterion that needs to be met.
 Gummow, Hayne and Crennan JJ decide on basis that Industrial Relations Act Case authoritative.

Arguments against the acceptance of mere externality as a source of power

1. Criticism of the following argument: Given the limits on the power of the States to legislate with
extraterritorial effect, there would be a gap in the plenitude of Australia’s legislative power if the Cth were not
able to do so. This argument underestimated the States’ ability to legislate extraterritorially, especially since
the Australia Act 1986 (Cth); and that in any event it was always possible for the States to procure Cth leg’n
by request or concurrence under s 51(xxxviii).
a. Response: Reliance on these ways of filling any gap “assume at a theoretical level a common
legislative purpose among the States”, whereas “practical considerations suggest that a common
purpose may sometimes be absent”. In any event, it is contrary to basic principle to limit a head of
Cth legislative power by reference to the possibility of action under some other head of power.
2. The Court’s willingness to accept mere externality is a novelty. Such an approach is inconsistent with R v
Burgess; Ex parte Henry.

53
 a. Response: Given the “continuing evolution” in Australia’s external relations both before and after
Federation, there can be no justification for limiting the meaning of the express “external affairs” to
the meaning it had in 1900.
3. If Australia has power to criminalise activities in other countries, the power may be used in respect of activities
which are not contrary to law in the country where they occur. This would not only be inherently anomalous
but might also lead to problems with extradition, which is usually subject to a “double criminality” requirement.
a. In particular, law relating to sexual offences with children below the age of consent might encounter
this problem in relation to countries where the age of consent is lower than in Australia.
b. In its impact on the “externality” argument this appeared to be relied on only as an argument from
inconvenience; but Callinan and Heydon JJ relied on it also as giving rise to difficulties with Kirby J’s
reliance on “relations with other countries”.

 In Koowarta Stephen J suggested that the mere recognition of a problem as a cause for “international
concern” might itself be sufficient as a basis for Australian legislative action under s 51(xxix).
o That suggestion has often been adverted to in later cases, never as a basis for decision.
o In XYZ Callinan and Heydon JJ had necessarily to reject an argument based on “international concern”
as well; but the rest of the Court left this issue unresolved.

Treaty implementation – an initial approach

R v Burgess; Ex Parte Henry (1936) HCA
Facts
 Section 4 of Air Navigation Act 1920 (Cth): Authorised making of regs for control of air navigation within
the Cth and Territories.

Evatt & McTiernan JJ

 The fact of an international convention having been duly made about a subject brings that subject
within the field of international relations so far as such subject is dealt with by the agreement.
 The legislative power of the Cth over “external affairs” certainly includes the power to execute within the
Cth treaties and conventions entered into with foreign powers.
o The legislative powers in s 51 is granted “subject to this Constitution” so that such treaties and
conventions could not be used to enable the P’ment to set at nought constitutional
guarantees elsewhere contained.
 But it is not to be assumed that the legislative power over “external affairs” is limited to the execution of
treaties or conventions; the P’ment may well be deemed competent to legislate for the carrying out
of “recommendations” as well as the “draft international conventions”.
 No suggestion has been made that the entry into the convention was merely a device to procure for the Cth
an additional domestic jurisdiction.

Starke and Dixon JJ both speculated as to possible limitations on power.

Starke J (dissenting)
 The Cth cannot do what the CON forbids. But otherwise the power is comprehensive in terms and must
be commensurate with the obligations that the Cth may properly assume in its relations with other Powers or
States.

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  It may be that the laws will be within power only if the matter is “of sufficient international significance
to make it a legitimate subject for international cooperation and agreement”.

Dixon J
 It seems an extreme view that merely because the Executive undertakes with some other country that the
conduct of persons in Australia shall be regulated in a particular way, the legislature thereby obtains a power
to enact that reg although it relates to a matter of internal concern which, apart from the
obligation undertaken by the Executive, could not considered as a matter of external affairs.

The case established that the implementation within Australia of some international treaties was valid. Since Cth
power arises from the purpose of implementing a convention, the resulting leg’n must be confined to that purpose in
order to be valid.

Evatt and McTiernan JJ

 The particular laws or regs which are passed by the Cth should be in conformity with the convention which
they profess to be executing.
 Any departure from such a requirement would be completely destructive of the general scheme of the Cth
CON, for it is only because, and precisely so far as, the Cth statute or regs represent the carrying into local
operation of the relevant portion of the international convention, that the Cth P’ment or Executive can deal at
all with the subject matters of the convention.

Starke J dissented on whether the regs were valid. He reaffirmed the legitimacy of a broad choice of legislative means.
Starke J (dissenting)
 All means which are appropriate, and are adapted to the enforcement of the convention and are not
prohibited, or are not repugnant to or inconsistent with it, are within power.
 The powers must be construed liberally, and much must necessarily be left to the discretion of the
contracting States in framing leg’n, or otherwise giving effect to the convention.
 A construction of the power that enables a ready application of the convention to various circumstances and
conditions is preferable to one that insists upon an inflexible and rigid adherence to the stipulations of the
convention.

B&W
 After R v Burgess, new regs were made under the Air Navigation Act. They laid down rules for the use of
aerodynamic aircraft.
R v Poole; Ex parte Henry (No 2) (1939)
 Facts:
- Henry used a light aircraft to take members of the public for joyrides along the perimeter of Mascot
aerodrome.
- In R v Burgess he had been prosecuted for flying without a licence; that prosecution failed when the
regs were held to be invalid.
- Under the new regs he was prosecuted again. He was charged with breaching r 51(1). This raised the
question of whether the rule was a valid implementation of r 39(a) of the Convention.
- By r 38 a “neutral zone” may be set apart for aerodynes maneuvering on the ground. Henry’s flights
were in the “neutral zone” and, since the Convention prohibited low flying only in the “landing area”, he
was not in breach of the Convention.
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 - He was in breach of the Australian rule because it extended to the whole “aerodrome”.
 Held:
- Rich, Starke, Evatt and McTiernan JJ: r 51(1) valid.
- Rich J: The wider Australian prohibition was “a not improper method” of ensuring strict obedience to the
Convention rule.
- Evatt J: “The added area is ancillary to the landing area proper, so that the prohibition imposed may
fairly be regarded as incidental” to that stated in the Convention. Hence r 51(1) could be regarded as
“sufficiently stamped with the purpose” of implementing the Convention.
- McTiernan J: No discrepancy; Convention rule could not be interpreted as strictly confined to the
“landing area”.

THE EXTERNAL AFFAIRS POWER - B

Treaty implementation – modern jurisprudence
Koowarta v Bjelke-Petersen (1982) HCA
Facts
 Qld Minister for Lands (Bjelke-Peterson) had refused to transfer pastoral lease to Aboriginal Land Fund
Commission because of policy against acquisition by Aborigines of large parcels of land.
 Sued under Racial Discrimination Act by aggrieved member of affected aboriginal tribe.
o That Act was enacted to implement Australia’s obligations under the 1966 International Convention on
the Elimination of All Forms of Racial Discrimination.
 Minister in defence impugned validity of ss 9 and 12 of the Act as invalid exercise of races power and external
affairs power.
 Challenged sections prohibited racial discrimination generally (s 9) and racial discrimination in respect of
disposal of interests in land in particular (s 12).
 Races power challenge succeeded as Act held by majority not to be a special law for people of any race.

Held
 4:3 majority: Upheld Act as valid exercise of external affairs power implementing 1966 International
Convention on the Elimination of All Forms of Racial Discrimination.

Summary
 Mason, Murphy and Brennan JJ: Saw no limitation on Cth legislative power to implement international
agreements – provided law can be related to implementation of bona fide agreement, it will be valid, even if
the resulting Cth law addresses purely domestic issues.
 Stephen J: Adding crucial fourth vote, preferred test of ‘international concern’, but decided that this condition
was satisfied.

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  Gibbs CJ, Aickin and Wilson JJ (dissenting): Adopted qualified view that subject matter of agreement
must itself be an external affairs in sense that it ‘in some way involves a relationship with other countries or
with persons or things outside Australia’.
 Result: No majority view on test, but four judges held that external affairs power not unqualified.
 Difference between judges attribute to different conceptions of the extent to which the need to reserve some
power to the States over purely domestic affairs may be factored into interpretation of s 51(xxix).

Gibbs CJ (dissenting)
 Crucial question: Under the power given by s 51(xxix), can P’ment enact laws for the execution of any
treaty to which it is a party, whatever its subject-matter, and in particular for the execution of a treaty which
deals with matters that are purely domestic and in themselves involve no relationship with other countries or
their inhabitants?
 Arguments for limitation:
o If the P’ment is empowered to make laws to carry into effect within Australia any treaty which the G-G
may make, the result will be that the executive can, by its own act, determine the scope of Cth power.
o The power might be attracted not only by a formal agreement, such as a treaty, but also by an
informal agreement.
o The executive could, by making an agreement, formal or informal, with another country, arrogate to
the P’ment power to make laws on any subject whatsoever.
 Of course it has been established, since the Engineers’ Case, that it is an error to adhere to the “reserved
States power” doctrine. However, in determining the meaning and scope of a power conferred by s 51 it is
necessary to have regard to the federal nature of the CON.
 Criticism of Evatt and McTiernan’s limitation: It would be unlikely that an international agreement would
be entered into as a mere device. It would not be enough to establish bad faith to show that the executive,
when it made a treaty, was fully aware that the P’ment had no legislative power to deal with the subject-
matter of the treaty except what which would arise under s 51(xxix) once the treaty was concluded.
o The doctrine of bona fides would at best be a frail shield, an available in rare cases.
 The view of Evatt and McTiernan JJ must be rejected, and a law which gives effect within Australia to an
international agreement will only be a valid law under s 51(xxix) if the agreement is w.r.t. a matter which
itself can be described as an external affair. I consider that a law which carries into effect the provisions of an
international agreement will only have the character of a law w.r.t. external affairs if the provisions to
which it gives effect answer that description.
 Any subject-matter may constitute an external affair, provided that the manner in which it is treated in some
way involves a relationship with other countries or with persons or things outside Australia. A law
which regulates transactions between Australia and other countries, or between residents of Australia and
residents of other countries, would be a law w.r.t. external affairs, whatever its subject-matter.
o However, a matter does not become an external affairs simply because Australia has entered into an
agreement with other nations with regard to it.
 Present case: The fact that many nations are concerned that other nations should eliminate racial
discrimination within their own boundaries does not mean that the domestic or internal affairs of any one
country thereby become converted into international affairs.

Murphy J
 It is no valid objection that the Racial Discrimination Act deals, as it does, with internal affairs.

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  The P’ment, in exercising the external affairs power (as well as its other powers), is entitled to make laws for
the peace order and good govt of the Cth, that is, of the people as a whole, notwithstanding the
opposition of any State Govt or P’ment.
o The exercise of that power is not an intrusion upon the people of the States. The people of the States
are entitled as well as obliged to have the legislative and executive conduct of those affairs which are
part of Australia's external affairs carried out by the P’ment and Executive Govt of Australia.

Stephen J
 Where the grant of power is w.r.t. "external affairs" an examination of subject-matter, circumstance and
parties will be relevant whenever a purported exercise of such power is challenged.
o It will not be enough that the challenged law gives effect to treaty obligations.
 The quality of being of international concern remains, no less than ever, a valid criterion of whether a
particular subject-matter forms part of a nation's "external affairs".
o A subject-matter of international concern necessarily possesses the capacity to affect a country's
relations with other nations and this quality is itself enough to make a subject-matter a part of a
nation's "external affairs". And this being so, any attack upon validity, either in what must be the very
exceptional circumstances which could found an allegation of lack of bona fides or where there is said
to be an absence of international subject-matter, will still afford an appropriate safeguard against
improper exercise of the "External affairs" power.
 It will be open to the Court, in the case of a challenged exercise of the external affairs power, to adopt an
analogous approach, testing the validity of the challenged law by reference to its connection with
international subject-matter and with the external affairs of the nation.
 Conclusion: The prohibition of racial discrimination, the subject-matter of the Racial Discrimination Act,
now falls squarely within the concept as undoubted.
o That a consequence would seem to be an intrusion by the Cth into areas previously the exclusive
concern of the States does not mean that there has been some alteration of the original federal
pattern of distribution of legislative power. What has occurred is, rather, a growth in the
content of “External affairs”. This growth reflects the new global concern for human rights and the
international acknowledgement of the need for universally recognised norms of conduct, particularly in
relation to the suppression of racial discrimination.
 Even were Australia not a party to the Convention, this would not necessarily exclude the topic
as a part of its external affairs.
o The subject of racial discrimination should be regarded as an important aspect of Australia’s external
affairs.
o The failure of a nation to take steps to suppress racial discrimination has become of immediate
relevance to its relations with the international community.

Cth v Tasmania (Tasmanian Dam Case) (1983) HCA

Facts
 Liberal govt in Tasmania authorised construction of dam by Hydro-Electric Commission on Franklin River for
purposes of generating electricity.
 New Hawke federal Labor govt issued regs under s 69 of National Parks and Wildlife Conservation Act
1975 (Cth) prohibiting construction of dam without consent of Minister.
 Regs under this Act purported to give effect to 1972 UNESCO Convention for the Protection of the World
Cultural and Natural Heritage.

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  Regs later backed up by passing of World Heritage Properties Conservation Act 1983 (Cth), which
prohibited much of the same conduct as the regs (but not dam construction specifically) and provided for
payment of compensation.
 Proclamation made under s 6(3) of 1983 Act identified area of dam as under threat, and brought into
operation s 9(1) prohibiting certain conduct, including construction work of various kinds.
 Section 5 of the Act clearly drafted with prior cases in mind, seeking to defend legislative conferral of power
to issue proclamation either as implementation of treaty obligation, or as fulfillment of an international law
obligation generally, or as addressing an issue of international concern.

Held
 National Park regs struck down as well as various provisions in World Heritage Act, but s 6 and prohibition
on dam construction in s 9(1)(h) upheld under external affairs power.

Summary
 4:3 majority (Mason, Murphy and Brennan JJ – the Koowarta threesome – joined by new judge Deane
J) adopt wide unqualified view of external affairs power as authorising implementation of any treaty
obligation, and thus s 6(2)(b) valid exercise of this power.
 Mason J: Rejects ‘international concern’ test as being too ‘elusive’ and yielding no ‘acceptable criteria or
guidelines’:
o ‘The existence of international character or international concern is established by entry by Australia
into the convention or treaty’.
o Court cannot second-guess executive and legislative judgments of this sort.
 Brennan J: Adds qualification, viz. that a law must implement obligation (not recommendation), failing which
Stephen J’s test for ‘international concern’ in Koowarta should be applied.
 Minority (Gibbs CJ, Wilson and Dawson JJ): Follow Stephen J’s ‘international concern’ test as lowest
common denominator ratio in Koowarta.
 Because of qualification in Brennan J’s judgment, the ratio in this case was restricted to implementation of
international legal obligation (as opposed to non-obligatory aspects of international agreement).

Gibbs CJ (dissenting)
 Settled for the “lowest common denominator” of Koowarta – the international concern test.
 Whether a matter is of international concern depends on the extent to which it is regarded by the nations
of the world as a proper subject for international action, and on the extent to which it will affect Australia's
relations with other countries.
 Present case: It is decisive the fact that the Convention does not impose any obligation on the Cth to enact
leg’n for the protection of any part of the national heritage within Australia; and of course the recommendation
does not purport to do so. The relations with other countries are not likely to be significantly affected by
whatever action Australia takes in relation to the protection of the Parks.

Mason J
 Rejected the test of “international concern” as too “elusive” and as yielding no acceptable criteria or
guidelines.”
 There is no acceptable criteria or guidelines by which the Court can determine the “international character” of
the subject-matter of a treaty or convention.

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 o The existence of international character or international concern is established by entry
by Australia into the convention or treaty.
 The fact of entry into, and of ratification of, an international convention, evidences the judgment of the
Executive and of P’ment that the subject matter of the convention is of international character and concern
and that its implementation will be a benefit to Australia.
o The Court should accept and act upon the decision of the executive govt and upon the expression of
the will of P’ment in giving legislative ratification to the treaty or convention.

Murphy J
 Did not reject the test of “international concern” but treated it as only one of several different criteria, any one
of which was sufficient to attract power under s 51(xxix).
 To be a law w.r.t. external affairs it is sufficient that it:
(a) implements any international law, or
(b) implements any treaty or convention whether general (multilateral) or particular, or
(c) implements any recommendation or request of the UN Organization or subsidiary organizations, or
(d) fosters (or inhibits) relations between Australia or political entities, bodies or persons within Australia
and other nation States, entities, groups or persons external to Australia, or
(e) deals with circumstances or things outside Australia, or
(f) deals with circumstances or things inside Australia of international concern.
 The fact that a subject becomes part of external affairs does not mean that the subject becomes,
as it were, a separate, plenary head of legislative power.
o If the only basis upon which a subject becomes part of external affairs is a treaty, then the legislative
power is confined to what may reasonably be regarded as appropriate for implementation of
provisions of the treaty.
o This does not mean that either all of the provisions must be implemented or else none can be
implemented. It does not mean that there must be any rigid adherence to the terms of the treaty.
 Present case: The world's cultural and natural heritage is, of its own nature, part of Australia's external
affairs. It is the heritage of Australians, as part of humanity, as well as the heritage of those where the various
items happen to be. As soon as it is accepted that the Tasmanian wilderness area is part of world heritage, it
follows that its preservation as well as being an internal affair, is part of Australia's external affairs.

Brennan J
 Sympathized with the wish to set limits on treaty implementation under s 51(xxix), but adhered to his own
view in Koowarta that this could be done by insisting on the strictly controlled implementation of a treaty
obligation.

Deane J
 Argued that the whole issue had been settled by R v Burgess. He read the judgment of Latham CJ along with
that of Evatt and McTiernan JJ as yielding a binding majority view.

Richardson v Forestry Commission (1988) HCA

Facts

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  Lemonthyme and Southern Forests (Commission of Inquiry) Act 1987 (Cth) established Commission
to investigate whether Lemonthyme and Southern Forests areas in Tasmania could qualify to be nominated as
a world heritage area under the 1972 Convention.
 Section 16(1): Prohibited forestry operations and road construction in areas under investigation.

Held
 Clear majority upholds Act as valid exercise of external affairs power.

Summary
 Dawson J: Re-iterates view that Tasmanian Dam Case wrongly decided, but decides that he is now bound by
precedent established in that case, viz. that ‘the legislative implementation of an international treaty in good
faith is within the ambit of the external affairs power’.
 Deane and Gaudron (dissenting): Remaining condition is that a law purporting to give effect to a treaty
must be ‘appropriate or adapted’ to the implementation of the obligations it is purporting to implement.
o This has since grown into separate ‘conformity doctrine’.

Dawson J
 In the Tasmanian Dam Case, the majority took the view that, subject to express constitutional prohibitions,
any matters covered by a bona fide international treaty are, by their very inclusion in the treaty, brought
within the ambit of the external affairs power.
o The fact that an agreement is international in character does not necessarily mean that
the matters with which it deals cease to be of a domestic nature and become part of the
country's external affairs.
 Precedent must, however, have a part to play, even in the interpretation of a CON. Considerations of
practicality make it necessary that the law should, as far as possible, take a consistent course. The constant
re-examination of concluded questions is incompatible with that aim.
o The parties in the present case did not seek to question the decision in the Tasmanian Dam Case.
In these circumstances it is proper to proceed upon the same basis as did the argument in
this case and to assume the authority of that decision.
 In reality, as the decision in the Tasmanian Dam Case shows, the fact that a matter is the subject of a bona
fide treaty makes it difficult to say that it is not a matter of international concern and, if international concern
is the touchstone, why is a treaty necessary at all? Why is international concern over a matter not sufficient of
itself to bring it within the external affairs power?
 If the scope of the matters which may be the subject of treaties has greatly expanded in recent years, the
scope of those matters which may be the subject of international concern is even wider. It is not, therefore,
surprising to find a search for some limit to the breadth which, upon this expansive view, the external affairs
power apparently possesses.

VIC v Cth (Industrial Relations Act Case) (1996) HCA

Facts
 1993 amendment to Industrial Relations Act 1988 (Cth) relying partly on external affairs power (Pt VIA)
and partly on corporations power (Pt VIB).
 Part VIA, dealing with various workers’ rights relied on various ILO Conventions and on recommendations of
General Conference of ILO.

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Summary
 Mostly upheld in joint judgment of Brennan CJ, Toohey, Gaudron, McHugh and Gummow JJ.
 Joint judgment stresses that scope of s 51(xxix) will expand as subject matter of international agreements
expands.
 Specificity principle: To provide basis for leg’n under s 51(xxix), international agreement must
not be merely aspirational, but must specify the manner of implementation required of signatory
states.
 Conformity doctrine: Also confirms Deane and Gaudron JJ’s view in Richardson that exercises of external
affairs power by way of treaty implementation will be scrutinised to ensure that law is
‘reasonably capable of being considered appropriate and adapted to implementing the treaty’.
 Majority then applies this test to strike down certain provisions of Part VIA which it considers go beyond what
was required by ILO Convention Concerning Termination of Employment at the Initiative of the Employer.
 No decision on whether recommendations of General Conference of ILO could independently found power to
legislate on subject matter of recommendation, rather used to reinforce decision on whether relevant measure
‘appropriate and adapted’ to implementation of main Convention.

Brennan CJ, Dawson, Toohey, Gaudron, McHugh and Gummow JJ

1) Rejection of argument that a certain application of the external affairs power could not have been
foreseen a century ago.
 The phrase "External affairs" was adopted in s 51(xxix) of the CON in preference to "foreign affairs" so as to
make it clear that the power comprehended both the relationship between the Cth of Australia and
other parts of the then British Empire and the relationship with foreign countries.
 It would be a serious error to construe par (xxix) as though the subject matter of those relations to which it
applied in 1900 were not continually expanding. Rather, the external relations of the Australian colonies
were in a condition of continuing evolution and, at that time, were regarded as such.
o Accordingly, it is difficult to see any justification for treating the content of the phrase "external
affairs" as crystallised at the commencement of federation, or as denying it a particular application on
the ground that the application was not foreseen or could not have been foreseen a century ago.
 The legislative power was designed to authorise the implementation of treaty obligations which bound
Australia. It was at least implicit that it would authorise the implementation of treaty obligations accepted
independently by the Cth, if and when the Executive attained the competence to do so.
 The treaties which were part of the subject matter of foreign relations in 1900, and the treaties that have
since been made, embrace an ever-expanding range of topics.

2) The joint judgment also resisted any attempt to limit the ratio decidendi of the Tasmanian Dam Case.
 It is not to the point that the same result might have been achieved by application of the view previously
taken by Stephen J.
 The intrusion of Cth law into a field that has hitherto been the preserve of State law is not a reason to deny
validity to the Cth law provided it is, in truth, a law w.r.t. external affairs.

3) The treaty must embody precise obligations rather than mere vague aspiration, and the leg’n must be
“appropriate and adapted” to the implementation of those obligations.
 The law must prescribe a regime that the treaty has itself defined with sufficient specificity to direct the
general course to be taken by the signatory states.

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  To be a law w.r.t. "external affairs", the law must be reasonably capable of being considered appropriate and
adapted to implementing the treaty. Thus, it is for the legislature to choose the means by which it carries into
or gives effect to the treaty provided that the means chosen are reasonably capable of being considered
appropriate and adapted to that end.
 Where a treaty relating to a domestic subject matter is relied on to enliven the legislative power conferred by s
51(xxix) the validity of the law depends on whether its purpose or object is to implement the treaty. In this
context, purpose is not something found in the head of power. Rather, it is a test for determining whether the
law in question is reasonably capable of being considered as giving effect to the treaty and therefore as being
a law upon a subject which is an aspect of external affairs.

4) Pursuant to this test, at least on the evidence available, certain elements in the leg’n could not be
supported as “appropriate and adapted” to the purpose of implementing the relevant Conventions.

Conformity doctrine
Tasmanian Dam Case (1983) HCA
Summary
 Brennan and Deane JJ: Law giving effect to treaty must ‘be capable of being reasonably considered to be
appropriate and adapted to achieving what is said to impress it with the character of a law w.r.t. external
affairs’.
 Deane J: Applying this test, invalidated all but ss 9(1)(h) and 9(2).
 The test followed approach first taken in R v Burgess, i.e. that the Air Navigation Regs went too far in
implementing the 1919 Int. Convention for the Reg. of Aerial Navigation.
 Likewise, Deane and Gaudron JJ in dissent in Richardson would have invalidated s 16 of Lemonthyme and
Southern Forests (Commission of Inquiry) Act 1987 (Cth) on grounds that it afforded general
environmental protection rather than protection of world heritage, as required by 1972 Convention.

Deane J
 A law would not properly be characterised as a law w.r.t. external affairs if it failed to carry into effect or to
comply with the particular provisions of a treaty which it was said to execute or if the treaty which the law was
said to carry into effect was demonstrated to be no more than a device to attract domestic legislative power.
 The law must be capable of being reasonably considered to be appropriate and adapted to achieving
what is said to impress it with the character of a law w.r.t. external affairs.
 “It is apparent that the nature of this power necessitates a faithful pursuit of the purpose namely, a carrying
out of the external obligation, before it can support the imposition upon citizens of duties and disabilities which
otherwise would be outside the power of the Cth” per Dixon J in Burgess’ Case.
 There is a need for there to be a reasonable proportionality between the designated purpose or object and the
means which the law embodies for achieving or procuring it.

Industrial Relations Act Case (1996) HCA

Summary
 5-judge joint judgment confirms conformity doctrine, which has two parts:
1. To found legislative power under s 51(xxix), treaty must be specific about the obligations imposed on
State parties, not merely aspirational; and

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 2. The means adopted in Cth law must be appropriate and adapted to the fulfilment of these specific
obligations.
 It is in this sense that the external affairs power has a purposive aspect:
o Laws purporting to be valid under external affairs power because they implement treaties are only
valid to the extent that the means they adopt are reasonably capable of being considered appropriate
and adapted to implementing the treaty in question.
 This formulation of test is preferred to ‘reasonably proportionality’.
 Applying this test, majority invalidated several provisions in Industrial Relations Act 1988 (Cth) as going
beyond what was required to implement the relevant ILO Convention.
 Conversely, the fact that law only partially implements treaty not necessarily fatal, unless this leads to
inconsistency or to doubt about characterisation.

RACES POWER

Section 51(xxvi): The P’ment shall, subject to this Constitution, have power to make laws for the peace, order, and
good govt of the Cth w.r.t.:
(xxvi) The people of any race for whom it is deemed necessary to make special laws.

Special Laws for the People of any Race

Koowarta v Bjelke-Petersen (1982) HCA
Issue
 Was the Racial Discrimination Act 1975 (Cth) valid under the races power?

Summary
 5-judge majority decided that Act not supported by races power as it extended protection from
discrimination to all races, and was thus not a ‘special law’ w.r.t. the people of any one race.
 Mason J: Did not decide this issue because he had decided that the Act was valid under the external affairs
power.
 Murphy J (dissenting): Act was supported by races power. Section 51(xxvi) could only be used to support
beneficial laws because the word ‘for’ must be construed to mean ‘for the benefit of’.
 Other dicta tend to reject the view that races power had changed character by reason of 1967
amendment to become power to be used exclusively for positive discrimination in favour of historically
disadvantaged races, but no conclusion on this issue.
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  RATIO: FOR A LAW TO BE CONSIDERED A VALID EXERCISE OF THE RACES POWER, IT MUST AFFECT A
PARTICULAR RACE, EITHER NEGATIVELY OR POSITIVELY, RATHER THAN CONFER A BENEFIT ON THE
AUSTRALIAN PEOPLE GENERALLY.

Gibbs CJ
 It would be a mistake to suppose that the purpose of s 51(xxvi) was to enable P’ment to make laws only for
the protection of people of particular races. Laws made under s 51(xxvi) might validly discriminate
against, as well as in favour of, the people of a particular race.
 Section 51(xxvi) was intended to enable Cth to pass the sort of laws which before 1900 had been passed by
many States.
 Under s 51(xxvi), in its present form, the P’ment has power to make laws prohibiting
discrimination against Aboriginal people by reason of their race.
 A law which applies equally to the people of all races is not a special law for the people of any
one race.

Wilson J
 If the Act can apply w.r.t. the people of any race at all who may happen to be the victims of discrimination on
account of their race, then it is not a special law. It is a general law directed to the elimination of all racial
discrimination in the community.
 The power contained in s 51(xxvi) is activated when P’ment discerns circumstances which in its view give rise
to a necessity to make a special law. That necessity can arise only from circumstances considered to
be compelling in relation to a section of the community.
 The power is apt to enable P’ment, if it considered it necessary to do so, to prohibit racial discrimination
against the people of the Aboriginal race.

Tasmanian Dam Case (1983) HCA

Facts
 Cth relied on races power to support ss 8 and 11 of the World Heritage Properties Conservation Act
1983 (Cth).
 Section 8: Expressly deemed that s 8, as well as ss 11, 13(7) and 14(5), were special laws necessary to be
enacted for Aboriginal race.
 Section 8 and 11: Gave G-G power to issue proclamation restricting development on aboriginal site where
likelihood of damage or destruction.
 After proclamation, various development activities listed in s 11 could only proceed with written consent of
Minister.

Summary
 Mason, Murphy, Brennan and Deane JJ: Upheld use of races power for this purpose, although ss 8 and 11
ultimately invalidated because Deane J found that they provided for the acquisition of property without just
terms.
 Koowarta distinguished on basis that Act had special significance for Aboriginals, although all ‘mankind’ was
interested in preservation of Aboriginal sites.

Gibbs CJ
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  Cth asserts that the proposed inundation would result in the loss and destruction of irreplaceable evidence
concerning the occupation and settlement of an entire river system by Ice Age man and his more recent
Aboriginal descendants, and that the flooding of the archaeological cave sites of the lower Franklin River valley
would destroy their outstanding universal cultural and historical value.

Mason, Murphy, Brennan and Deane JJ held that this use of s 51(xxvi) was valid.

Brennan J (dissenting)
 The primary object of the race power is beneficial. The passing of the Racial Discrimination Act
manifested the P’ment’s intention that the power will hereafter be used only for the purpose of discriminating
conferring benefits upon the people of a race for whom it is deemed necessary to make special laws.
 Where P’ment seeks to confer a discriminatory benefit on the people of the Aboriginal race, par (xxvi) does
not place a limitation upon the nature of the benefits which a valid law may confer, and none
should be implied.
 It was submitted that, as ss 8 and 11 do not confer legal rights, powers or privileges upon Aboriginal people in
addition to the legal rights, powers or privileges conferred upon the public generally, those provisions are not
supported by par (xxvi).
o Is it sufficient that the discriminatory benefit is found in the special importance or
significance which the people of a race attach to the rights, powers or privileges generally
conferred?
 As the people of a group identify themselves and are identified by others as a race by reference to their
common history, religion, spiritual beliefs or culture as well as by reference to their biological origins and
physical similarities, an indication is given to the scope and purpose of the power granted by par (xxvi).
o The kinds of benefits that laws might properly confer upon people as members of a race
are benefits which tend to protect or foster their common intangible heritage or their
common sense of identity.
 A law which, on its face, does not discriminate in favour of the people of a race, may nevertheless
be valid if it discriminates in favour of those people by its operation upon the subject-matter to
which it relates.
 Conclusion: Par (xxvi) does not require the law to be “special” in its terms; it suffices that it is special in its
operation. Section 8 ensures that s 11 is special in its operation.

Deane J
 The power conferred by s 51(xxvi) remains a general power to pass laws discriminating against or benefiting
the people of any race. Since 1967, that power has included a power to make laws benefiting the people of
the Aboriginal race.

It first appears that Deane J is reaffirming the majority view in Koowarta that the power in s 51(xxvi) may be
exercised for or against the interests of a particular race. However, it can also be read as asserting that, contained
within the general power to legislate for the benefit or detriment of particular races, there is now, since the 1967
referendum, a power relating to Aboriginals which can only be used for their benefit.
 The meaning given to the phrase “people of any race”:
o The words have a wide and non-technical meaning.
o It is apposite to refer to all Australian Aboriginals collectively.
o It is also apposite to refer to any identifiable racial sub-group among Australian Aboriginals.

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 o “Australian Aboriginal” means a person of Aboriginal descent, albeit mixed, who identifies himself as
such and who is recognised by the Aboriginal community as an Aboriginal.
 The dual requirement that a declaration can only be made in respect of a site if it is both “of outstanding
universal value” and “of particular significance to the people of the Aboriginal race” means that only those
Aboriginal sites which are of extraordinary significance qualify for protection and conservation
under ss 8 and 11.
 A law protecting such sites is, in one sense, a law for all Australians. However, a law whose operation is
to protect and preserve sites of universal value which are of particular importance to the
Aboriginal people is also a special law for those people.
 A special law which protects the persons or the property or the activities of Aboriginal people is not only a law
w.r.t. the prohibited actions against such persons, property or activities. It is also a law w.r.t people of the
Aboriginal race.
 A law which protects those – and only those – endangered Aboriginal sites included in the “cultural heritage”
which satisfy the requirement that they are of particular significance to people of the Aboriginal race is not
only a law w.r.t Aboriginal sites.
o It is a law which comes within the primary scope of the grant of legislative power to make
laws w.r.t. the people of any race for whom it is deemed necessary to make special laws.
 “People of any race” includes all that goes to make up the personality and identity of the people of a race.
 “W.r.t.” the people of a race includes the power to make laws protecting the cultural and spiritual heritage
of those people by protecting property which is of particular significance to that heritage.

By contrast, for Gibbs CJ, Wilson and Dawson JJ, a law for the preservation of archaeological relics “of significance to
all mankind” was not a “special law” for the people of any one race.
Gibbs CJ (dissenting)
 To come within s 51(xxvi) a law must be a law w.r.t. the people of a particular race, and it must be a special
law. A law will be special if it has some special connection with the people of a race; it will not answer that
description if it applies equally to people of all races.
 “For” means “with reference to” rather than “for the benefit of” – it expresses purpose rather
than advantage.
 A site which may be of very great significance to the people of the Aboriginal race will not be
within the section if it is not of outstanding universal value.
o The prohibitions in s 11 are directed to the protection of the site generally, and not to the preservation
of any particular feature of the site which may give it significance to members of the Aboriginal race.
o What is more important, members of the Aboriginal race have no special rights or privileges, and no
special obligations, in relation to a site to which s 11 applies. They have no greater right of access to
the site than anyone else, and they are affected by the prohibitions in the same way as other people.
 Conclusion: Sections 8 and 11 confer no rights and impose no duties on members of the Aboriginal race as
such, or on other persons in relation to their dealings with members of the Aboriginal race. The sections are
not a law w.r.t. people of the Aboriginal race.

WA v Cth (Native Title Act Case) (1995) HCA

Facts
 Challenge to Native Title Act 1993 (Cth) enacted post-Mabo.
 Act provided for the determination of future claims to native title, and also for the validation of
extinguishments of native title occurring after the Racial Discrimination Act came into force in 1975.

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Summary
 6-judge joint judgment decides extent of HC’s review powers w.r.t. Cth P’ment’s judgment that
particular law ‘necessary’ for the people of any race:
o Where law ‘necessary’ is a ‘political value judgment’ for P’ment, not Court, to make.
o If the Court retains some supervisory jurisdiction to examine the question of necessity against the
possibility of a manifest abuse of the races power, this case is not the occasion for an examination of
that jurisdiction.
 On the other hand, the word ‘special’ qualifies ‘law’ (not ‘necessary’), and thus question whether law is ‘special’
is justiciable.
 Test: Whether ‘law confers a right or benefit or imposes an obligation or disadvantage especially on the
people of a particular race’.
 Confirms Tasmanian Dam that the benefit may be conferred generally (on all Australians) provided that it
has ‘special significance or importance to the people of a particular race’.
 Held: Act confers unique benefit and thus is special and valid.

Mason CJ, Brennan, Deane, Toohey, Gaudron and McHugh JJ

 If the requirement that a law enacted under s 51(xxvi) be special were held to evoke a judicial evaluation of
the needs of the people of a race or of the treat/problems that confronted them in order to determine whether
the law was, or could be deemed to be, “necessary”, the Court would be required to form a political
value judgment. Yet it is clear that that judgment is for the P’ment, not for the Court.
 The removal of the common law general defeasibility of native title by the Act is sufficient to demonstrate that
the P’ment could properly have deemed that Act to be “necessary”.
 “Special” qualifies “law”; it does not relate to necessity. Therefore the special quality of a law must be
ascertained by reference to its differential application upon the people of a particular race, not by
reference to the circumstances that led P’ment to deem it necessary to enact the law.
 A special quality appears when the law confers a right or benefit or imposes an obligation or
disadvantage especially on the people of a particular race.
 The law may be special even when it confers a benefit generally, provided the benefit is of special significance
or importance to the people of a particular race.
 Conclusion: The Act is “special” in that it confers uniquely on the Aboriginal and Torres Strait Islander
holders of native title (the “people of any race”) a benefit protective of their native title. Perhaps the Act confers
a benefit on all the people of those races. The special quality of the law thus appears.

Kartinyeri v Cth (Hindmarsh Island Bridge Case) (1998) HCA

Facts
 Declaration under s 10 of Aboriginal and Torres Strait Islander Heritage Protection Act 1984 (Cth)
for protection of Aboriginal area threatened by proposed bridge overturned on review after investigation by
Prof Cheryl Saunders found to be procedurally flawed.
 Second report stopped when objection taken to nomination of judge to prepare report.
 Hindmarsh Island Bridge Act 1997 (Cth) enacted to preclude further possibility of proclamation under s
10.
 Section 4: Expressly excluded application of Heritage Act to construction of Hindmarsh Island bridge.

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Issue
 Was the Bridge Act valid under the races power, even though it was being used to enact adversely
discriminatory leg’n?

Summary
 Brennan CJ and McHugh J: Decided case on basis that ‘the power which supports a valid Act supports an
Act repealing it’.
 Thus the case did not produce a clear majority on positive discrimination point.
 Gaudron J: Question whether law was necessary was justiciable to extent that Court could determine
reasonableness of P’ment’s judgment in this respect, and that the relevant test was whether the law was
‘reasonable capable of being viewed as appropriate and adapted to’ a ‘relevant difference’ between the races.
This test would tend to give s 51(xxvi) a positive discrimination slant in respect of Aboriginal Australians
because of their situation of ‘serious disadvantage’.
 Gummow and Hayne JJ: Races power, even if it may not support discriminatory laws, at least supports law
withdrawing statutory benefit previously extended to Aboriginal people.
 Kirby J (dissents): Draws on Convention debates and debates surrounding 1967 referendum to conclude
that s 51(xxvi) provides only for law beneficial to targeted race.
 Four judges (Gaudron, Gummow, Hayne and Kirby JJ) decided races power did support a law w.r.t. a
sub-group of a particular race – the only actual rule emerging from this case.

Gaudron J
 The view that “for” means “for the benefit of” cannot be maintained in the face of the constitutional debates.
 The criterion for the exercise of power under s 51(xxvi) is that it be deemed necessary – not
expedient or appropriate – to make a law which provides differently for the people of a particular race or, if it
is a law of general application, one which deals with something of “special significance or importance to the
people of [that] particular race”. Clearly, it is for P’ment to deem it necessary to make a law of that kind
o To form a view as to that necessity, however, there must be some material upon which
P’ment might reasonably form a political judgment that there is a difference of that kind.
 What follows is:
(1) Section 51(xxvi) does not authorise special laws affecting rights and obligations in areas
in which there is no relevant difference between the people of the race to whom the law is
directed and the people of other races.
(2) The law must be reasonable capable of being viewed as appropriate and adapted to the
difference asserted.
 Prima facie, at least, the circumstances which presently pertain to Aboriginal Australians are circumstances of
serious disadvantage, which disadvantages include their material circumstances and the vulnerability of their
culture. And prima facie, at least, only laws directed to remedying their disadvantage could
reasonably be viewed as appropriate and adapted to their different circumstances.
 TEST: Is the law in question reasonably capable of being viewed as appropriate and adapted to a real and
relevant difference which P’ment might reasonably judge to exist?
 Conclusion: Prima facie, at least, s 51(xxvi) presently authorises laws which operate to the benefit of
Aboriginal Australians.
 Present case: The validity of the Heritage Protection Act is not in question. There is no reason to doubt that
it has been and continues to be a valid law under s 51(xxvi). Section 51(xxvi) not only authorises the Heritage
Protection Act but it also authorises its partial repeal.

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Gummow and Hayne JJ reached the same conclusion as Gaudron J as to the 1967 referendum, but not as to the scope
of s 51(xxvi). They emphasised that the rights withdrawn from the Ngarrindjeri women were statutory rights, as
distinct from rights subsisting in the common law.
Gummow and Hayne JJ
 The Bridge Act curtails the operation of another law of the Cth, not the enjoyment of any substantive common
law rights. It demonstrates the general proposition that what P’ment may enact it may repeal.
 A law will only answer the constitutional description in s 51(xxvi) if it (i) is “deemed necessary” (ii) that
“special laws” (iii) be made for “the people of any race”.
 The judgment as to what is “deemed necessary” is that of the P’ment. Nevertheless, it may be that the
character of a law purportedly based upon s 51(xxvi) will be denied to law enacted in “manifest abuse” of
that power of judgment.
o Even if such a restraint exists there is no occasion for its application to the Bridge Act.
There is no “manifest abuse” of its power of legislative judgment for P’ment to accelerate matters by
determining that the Ministerial power of declaration was withdrawn. It was for the P’ment to make its
assessment of the circumstances which led it to deem it necessary to enact the Bridge Act.
 The requirement that the Bridge Act be “special” does not relate to the matter of necessity. The presence of
this special quality of the Bridge Act is to be ascertained “by reference to its differential operation upon
the people of a particular race”.
o Here, “the people of a particular race” are those spoken in s 51 of the Heritage Protection Act.
o “Differential operation” is that which gives to any law based upon s 51(xxvi) its character as a
“special” law. Once it is accepted that a law may make provision for some only of a particular race, it
follows that a valid law may operate differentially between members of that race. This is the situation
with the Bridge Act.
o “A special quality appears when the law confers a right or benefit or imposes an obligation or
disadvantage especially on the people of a particular race.” Here, the Bridge Act imposes a
disadvantage. The disadvantage is in the contraction of the field of operation of the Heritage
Protection Act, itself a law which is to be taken as supported by s 51(xxvi).

Kirby J (dissenting)
 Conclusion: The race power does not extend to the enactment of laws detrimental to, or discriminatory
against, the people of any race by reference to their race.
 Textual and contextual indications of non-discrimination
1. The power is not simply to make laws w.r.t. “the people of any race”. In par (xxvi), words have been
added which must have work to do. The requirement that laws made under par (xxvi) by reference to race
should be “deemed necessary” and should be “special” cannot be dismissed as mere surplusage. The
additional words must clearly have the purpose of putting a limitation on what would
otherwise be an unbridled race power.
2. The words of qualification must be read as a composite idea. As a matter of language, the words are
consistent with an operation that is non-detrimental and has no adverse discrimination about
it. The word “for” is ambiguous. It could mean “for the benefit of”. Or it could mean “in respect of”. The
history of the power in its original form tends to favour the latter meaning.
a. The concept of what it is, in the nature of law, that may be deemed “necessary” and in a “special”
form for the people of a race, by reference to race, cannot, and should not, be understood as it
might have been in 1901. Such a static notion of constitutional interpretation completely
misunderstands the function which is being performed.

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 3. A crucial element in the history of the constitutional text is the amendment of par (xxvi) in 1967. To
construe the resulting power in par (xxvi) as authorising the making of laws detrimental to,
and discriminatory against, people on the ground of race, and specifically Aboriginal race,
would be a complete denial of the clear and unanimous object of the P’ment in proposing the
amendment to par (xxvi).
4. Although the source and application of the protection from adverse discrimination on the ground of race
differs in the USA, it is helpful to consider the approach of that country’s Supreme Court to such laws.
There, leg’n that enacts detrimental discrimination on such grounds is considered
“constitutionally suspect”. Such enactments will therefore be subject to the “most rigid scrutiny”, and
held to be “justiciable only the weightiest of considerations”.
 Unworkability of the “manifest abuse” test
 If s 51(xxvi) permits all discriminatory leg’n on the grounds of race excepting that which amounts to a
“manifest abuse”, many of the provisions which would be universally condemned as intolerably racist in
character would be perfectly valid under the Cth’s propositions. The criterion of “manifest abuse” is inherently
unstable.
 By the time a stage of “manifest abuse” and “outrage” is reached, courts have generally lost the capacity to
influence or check such laws.
 It cannot be accepted that in late C20th Australia par (xxvi) supports detrimental and adversely discriminatory
laws when the provision is read against the history of racism during this century and the 1967 referendum in
Australia intended to address that history.
 Conclusion: The race power permits special laws for people on the grounds of their race. But not so as
adversely and detrimentally to discriminate against such people on that ground.

THE CORPORATIONS POWER - A

Section 51(xx): The P’ment shall, subject to this Constitution, have power to make laws for the peace, order, and
good govt of the Cth w.r.t.:
(xx) Foreign corporations, and trading or financial corporations formed within the limits of the Cth.

A ‘persons’ power
Huddart, Parker & Co v Moorehead (1909) HCA
Facts
 Challenge to ss 5 and 8 of the Australian Industries Preservation Act 1906 (Cth).
 Prohibited foreign corporations and trading or financial corporations formed within the limits of the Cth
(‘constitutional corporations’) from engaging in certain restrictive trade practices.
 Provisions unremarkable, except that there was no obvious head of power that allowed Cth to regulate
domestic (intrastate) activities of corporations in this way.
 Company and manager fired for refusing to answer questions relating to suspected offences.
 Constitutional validity of fines challenged under s 51(xx).

Summary
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  Four-judge majority: Corporations power should be narrowly construed in context of federal CON that left
reg of intrastate trade to States, and therefore challenged provisions were invalid.
 Griffith CJ, Barton and O’Connor JJ (part of majority): Decided case on basis of reserved State powers
doctrine.
 Higgins J (part of majority): Decided case consequentially, on basis of list of ‘horribles’.
 Isaacs J (dissented): The key to understanding this head of power is deciding 2 questions:
o What types of corporations may be regulated under this power?
o What activities of corporations may be regulated?

Higgins J
 This list of horribles outlines the possible consequences if an expansive interpretation to the head of power
was adopted.

Isaacs J (dissenting)
 The power over corporations is exercisable wherever these specific objects are found, irrespective of whether
they are engaged in foreign or Inter-State commerce, or commerce confined to a single State.
 Next, it is clear that the power is to operate only on corporations of a certain kind, namely, foreign,
trading, and financial corporations.
 Corporations to come within the legislative reach of the Cth must be corporations already existing. It is not
a power to create corporations.
 It is a power to act upon certain beings, which are found and remain in actual existence, possessing a fixed
identity, a defined ambit of potentiality, having certain capacities and faculties unalterable by the Cth, beings
ready to act within their sphere of capabilities in relation to the people of the Cth. Necessarily you cannot
legislate for such corporations except w.r.t. some extraneous circumstances or events, whether trade, or
finance, or contracts, etc. and there is nothing in the CON which says anything about the object, primary or
secondary.
 The power does not look behind the charter, or concern itself with purely internal management, or mere
personal preparation to act; it views the beings upon which it is to operate in their relations to outsiders, or, in
other words, in the actual exercise of their corporate powers, and entrusts to the Cth P’ment the reg. of
the conduct of the corporations in their transactions with or as affecting the public.
 Whether any given provision is part of the federal power or not must depend on whether it includes or is
necessarily incidental to the control of the conduct of the corporations in relation to outside
persons.

Strickland v Rocla Concrete Pipes (Concrete Pipes Case) (1971) HCA

Facts
 Challenge to s 35 and ss 41-43 of Trade Practices Act 1965 (Cth).
 Provisions required all corporations (i.e. not just trading and financial corporations) to provide particulars of
anti-competitive agreements to Cth Commissioner of Trade Practices.
 Rocla Concrete Pipes charged under Act for entering into anti-competitive agreement w.r.t. concrete pipe
manufacture, even though its trading activities were restricted to Qld.
 Case raised squarely question whether Cth could regulate intrastate trading activities of trading corporations.

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Summary
 Unanimous HC overturned Huddart Parker as being incorrectly decided on basis of defunct reserved State
powers doctrine.
 But declared challenged provisions invalid on different ground, i.e. that Trade Practices Act was not
restricted, as it should have been, to constitutional corporations.
 Case is nevertheless start of new approach to corporations power because clear that Cth could henceforth
regulate all trading activities of trading corporations.
 Case does not, however, conclusively answer either of the two main questions raised by the corporations
power, i.e. what corporations fall under the ambit of this power and which of their activities are covered, apart
from the sorts of trade practices at issue in Concrete Pipes.

Barwick CJ
 The reasoning of this Court in Huddart, Parker & Co Pty Ltd v Moorehead was in error and that it ought
not be accepted now by this Court.
o The influence of the then current reserved powers doctrine was so strong that the Court was driven to
emasculate the legislative power given by s 51(xx) and to confine it in substance to the statutory
recognition of corporations falling within the terms of the paragraph and the fixing of the conditions
upon which the might enter trade in Australia; for the rest, their trading activities in intra-State trade
were a matter for the State leg’n exclusively.
 Sections 5(1) and 8(1) were valid and the Court’s decision to the contrary in Huddart, Parker & Co Pty Ltd
v Moorehead should be overruled.
o Those sections were clearly laws regulating and controlling the trading activities of foreign
corporations and trading and financial corporations formed within the limits of the Cth. They dealt with
the very heart of the purpose for which the corporation was formed, for whether a trading or financial
corporation, by assumption, its purpose is to trade, trade for constitutional purposes not being limited
to dealings in goods.
 It does not follow that any law which in the range of its command or prohibition includes foreign
corporations or trading or financial corporations formed within the limits of the Cth is necessarily
a law w.r.t. the subject matter of s 51(xx). Nor does it follow that any law which is addressed
specifically to such corporations or some of them is such a law.
o Sections 5(1) and 8(1) were valid because they were regulating and controlling the trading activities of
trading corporations and thus within the scope of s 51(xx).
 Barwick CJ declined to set the outer limits of the reach of the power. He said that the law develops case by
case, and that the Court in each case decides so much as is necessary to dispose of the case before it.
 Conclusion: A law requiring the reg of trading agreements restrictive of trade to which a foreign corporation
or a trading or financial corporation formed within the limits of the Cth is a party, and requiring the corporation
to give particulars of such an agreement under penalty of a fine for failing to do so, appears to clearly be a law
w.r.t. corporations of the kind described.

Menzies J
 Menzies J was also not prepared to attempt to define the limits of the power conferred by s 51(xx).
 A law such as s 5 of the Australian Industries Preservation Act governing the conduct of its business by a
trading corporation formed within the limits of the Cth is within the power of the P’ment by virtue of s 51(xx).

Trading and financial Corporations

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What is a constitutional corporation?
 Foreign corporation:
o Any corporation, whether trading or financial, incorporated under the law of a foreign country
(Incorporation Case (1990)).
 Trading corporation:
o R v Trade Practices Tribunal; Ex parte St George Country Council (1974)
 Country Council’s only current activities were supply of electricity and electrical appliances, but
had originally been incorporated for broader local govt purposes.
 Issue: Was it a trading corporation for purposes of TPA?
 Court split 2:2 over whether test should be activities-based or based on purposes of
corporation, with McTiernan J joining two judges favouring purposes test, but on slightly
different grounds.
o Adamson’s Case (1979) swung pendulum decisively in favour of activities test.
 Adamson was a Perth-based AFL player who had been prevented from transferring to another
club in SA by WA National Football League – claimed restraint under TPA.
 Issue: Were West Perth football club and SA and WA football leagues ‘trading corporations’
covered by Act?
 4-judge majority applies activities test to answer in affirmative, but does not clarify whether
trading activities have to be the corporation’s predominant activity or merely a substantial part
thereof.
 Financial corporations:
o Re Ku-ring-gai Co-operative Building Society (No 12) (1978) defines financial transactions
as ‘transactions in which the subject of the transaction is finance (such as borrowing or lending
money)’.
o State Superannuation Board (Vic) v Trade Practices Commission (1982) applied current
activities test to decide that the SSB was a financial corporation for purposes of TPA.
 Primary business was provision of super benefits, but to do this it engaged in financial
activities such as investment of funds in housing and granting of commercial loans.
 Two judges said that these activities had to be the predominant activity, but 3-judge majority
opted for test that is satisfied if financial activities form a ‘substantial’ proportion of
overall activities or are of ‘sufficient significance’ (without completely excluding
consideration of purposes).
 Inactive corporations:
o Current activities test does not work where corporation not trading or engaging in any activities, as is
case with shelf companies.
o Fencott v Muller (1983)
 Majority reverts to purposes test based on corporations objects and powers as manifest in
memorandum and articles of association.
 Minority (Gibbs CJ) applies subjective-intention test: what activities did the directors intend?

TRADING CORPORATIONS
R v Trade Practices Tribunal; Ex parte St George County Council (1974) HCA
Can be said to have established the purposes test.
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Issue
 Should the attempt to bring Council within the TPA as a “trading corporation” be assessed by reference to the
original purposes for which the Council was incorporated, or by reference to current activities?

Barwick CJ and Stephen J

 Preferred activities test
 Held: The Council was a “trading corporation” because of its substantial trading.

Gibbs & Menzies JJ

 Preferred purposes test (McTiernan J agreed but slightly different reasons)
 Held: The Council was not a “trading corporation” because constituted for purposes of local govt to provide
service to residents.

R v FCA; Ex parte WA NFL (Adamson’s Case) (1979) HCA

Can be said to have established the activities test.
Facts
 AFL rules restricted clubs fielding players registered with another club unless given clearance by appropriate
State league. Adamson (WA player) requested to play for SA but was refused – brought action under TPA
claiming restraint of trade. The TPA was applicable only if the football clubs and leagues were “trading
corporations” within the meaning of s 51(xx) of the CON.
 The object behind the various football leagues was to promote football. In the process of doing that, the
various leagues earned a lot of money from ticket sales, from selling broadcasting rights etc.

Issues
1. Were football clubs and leagues ‘trading corporations’ within the meaning of s 51(xx)?
2. Do the trading activities of a corporation need to be its predominant activities for it to be a trading
corporation, or need they only be a substantial part of its business?

Held
 Barwick CJ, Mason, Murphy and Jacobs JJ: Applied activities test. Held that corporations engaged in
league football were “trading corporations” because of their substantial trading activities.
 Gibbs J (dissenting): Applied purposes test. Held that the league corporations were no “trading
corporations” because of their original purposes.
 Stephen and Aickin J (dissenting): Used an amalgam of the purposes and activities test to reach the same
result as Gibbs J.
 Barwick CJ and Murphy J: Trading activities need only be a substantial part of business.
o Murphy J: Activities need only be “not insubstantial”.
 Mason J: Gave obiter support to above approach, but based decision on a finding that the corporation’s
“principal activity” was trading.
 Adamson’s Case did not settle the second issue.

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Mason J
 “Trading corporation” is a description or label given to a corporation when its trading activities form a
sufficiently significant proportion of its overall activities.
 Not every corporation which is engaged in trading activity is a trading corporation. The trading
activity of a corporation may be so slight and so incidental to some other principal activity, viz religion or
education in the case of a church or school, that it could not be described as a trading corporation.
 The trading activities of the football leagues are so extensive as to leave no doubt that they are
trading corporations.
o The sport is promoted and encouraged as a means of ensuring the receipt of the large financial
returns which are associated with it. The financial revenue of the Leagues is so great and the
commercial means by which it is achieved so varied that it must be concluded that trading constitutes
their principal activity.
o The concept of trading is not limited to buying and selling at a profit; it extends to
business activities carried on with a view to earning revenue.

Stephen J (dissenting)
 The Club does what it does to promote football, the income that comes its way being no doubt eagerly
gathered in, but only as a means of better promoting its predominant purpose, the fostering of football.
 The League takes advantage of the opportunities to it to derive profits, but only those opportunities which
arise incidentally in the carrying out of those very activities which it engages in the furtherance of its
principal objects. In doing this it of course trades.
o To engage in trade is not in itself to be a trading corporation.
 Conclusion: The purpose for which the League was formed was not that of engaging in trade, nor have its
activities deviated from the effecting of the purposes of its formation; its intended functions have proved to be
its actual functions and these do not consist of the engaging in trade. Such trading as it undertakes is
incidental to and a by-product of its principal activities and is undertaken the better to perform those activities.
Accordingly it is not to be regarded as a trading corporation.
 There is a distinction between trading which is incidental to, and is undertaken in the course of
carrying out, some other principal non-trading activity and trading which is engaged in as a
distinct and unconnected activity.

Cth v Tasmania (Tasmanian Dam Case) (1983) HCA

Facts
 Liberal State govt proposed construction of hydro-electric dam on Franklin River by Tasmanian Hydo-Electric
Commission.
 The HEC’s activities included generation and distribution of electricity and construction and maintenance of the
generation plants, including dams.
 But HEC was State authority with extensive public powers, including policy-making.
 Federal labour govt enacted World Heritage Properties Conservation Act 1983 (Cth) in part to stop
construction.

Issue
 Was HEC a trading corporation?

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Held
 Majority (Mason, Murphy, Brennan and Deane JJ): Applied current activities test to decide that
‘sufficiently significant proportion’ of HEC’s overall activities constituted trade in electricity.
 Gibbs CJ (dissent): Persisted in view that Court must search for ‘true character’ of corporation, based both
on activities and purposes – on facts, HEC was a public authority with public purposes, and thus not, a trading
corporation.

Mason J
1. The decision in R v Trade Practices Tribunal; Ex parte St George County Council is no longer regarded
as correct. A majority in R v FCA; Ex parte WA National Football League considered it to have been
wrongly decided.
2. The connection of the corporation with the govt of a State will not take it outside s 51(xx).
3. It has been decided in a previous case that the Commission is an independent statutory corporation and is not
a servant or agent of the Crown.
4. The Commission’s operations are largely conducted in the public interest.
5. However, Adamson’s Case demonstrates that these corporations do not exclude the Commission from the
category of “trading corporations”. A trading corporation whose trading activities takes place so that it may
carry on some other primary or dominant undertaking (which isn’t trading) may still be a trading corporation
(State Superannuation Board).
6. The Commission sells electrical power in bulk and by retail on a very large scale. This activity in itself
designates the Commission as a trading corporation.
7. Question: Is it possible to treat a corporation as a trading corporation in relation to its trading activities and
as a non-trading corporation in relation to its non-trading activities?
a. Answer A: The legislative power is not confined to the trading activities of trading corporations.
b. Answer B: Section 51(xx) designates as the subject of the power the corporate persona itself, i.e. the
artificial person created by incorporation. There is no suggestion in the paragraph that it is looking to
some hypothetical or notional incorporation which covers only the trading activities of a trading
corporation.

Gibbs CJ (dissenting)
 In deciding whether a corporation answers the description of “trading corporation”, it is necessary to
determine its true character.
 The Court must consider all the circumstances relating to the corporation – its activities as well
as the purposes of its formation.
 The Commission is not a trading corporation.
o It discharges a public function of vital important to the State. It performs other govtal functions. It is
some respects subject to ministerial power, and is accorded special powers and privileges. It is “a
public authority with public purposes as distinct from a private undertaking engaged upon a merely
commercial enterprise, and its powers are to be exercised for the good of the State”.
o Its trading activities, although significant, do not indicates its true character.

FINANCIAL CORPORATIONS
State Superannuation Board v Trade Practices Commission (1982) HCA

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Facts
 Victorian Superannuation Board managed and authorised a super fund providing pensions for public servants.
 Board required to furnish information and produce documents to the Trade Practices Commission relating to
loans made by Board.
 Commission alleged that loans may have amounted to exclusive dealing under s 47(1) of the TPA.

Issue
 Was the Board a financial corporation for the purposes of s 51(xx)?

Held
 Mason, Murphy and Deane JJ: A corporation is a “financial” corporation if it engages in financial activities.
o In order for a corporation to be a “financial corporation”, its financial activities need not be its
predominant activities, but need only form a substantial proportion of its total activities.
 Gibbs CJ and Wilson J (dissent): A financial corporation is characterised by its predominant financial
activities.
o Test not satisfied because “the business of dealing in finance” was merely “ancillary or incidental to
the primary activity of administering the superannuation scheme”.

Mason Murphy and Deane JJ

 The Court’s approach to the ascertainment of what constitutes a “financial corporation” should be the same as
its approach to what constitutes a “trading corporation”.
o The two classes are not mutually exclusive – a corporation may be a financial as well as a trading
corporation.
 The words “financial corporation” do no more than describe a corporation which engages in financial activities
or perhaps is intended so to do.
o The nature and the extent or volume of a corporation’s financial activities needed to justify its
description as a financial corporation do not call for much discussion in the present case. A finance
company is an obvious example of a financial corporation because it deals in finance for commercial
purposes.
o However, just as a corporation may be a trading corporation, notwithstanding that its trading activities
are entered into in the course of carrying on some primary or dominant undertaking, so also with a
corporation which engages in financial activities in the course of carrying out its primary or dominant
undertaking.
 Conclusion: The Board engages in financial activities on a very substantial scale. Even if attention is confined
to aspects of the Board’s investment activities as involve the making of commercial and housing loans, its
business in this respect is very substantial and forms a significant part of its overall activities. No doubt these
activities are all entered into for the end purpose of providing super benefits to contributors, but this
circumstance constitutes no obstacle to the conclusion that the Board is a financial corporation.

INACTIVE CORPORATIONS
Fencott v Muller (1983) HCA
Applied purpose test to find that a shelf company was a ‘trading or financial corp.’
Facts
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  Oakland Nominees had no current activities. It was a shelf company formed to facilitate conveyancing
transaction.
 The company CON listed purposes that would have brought it within the trading corporations.
 The shelf company hadn’t done anything yet.

Held
 Mason, Murphy, Brennan and Deane JJ: Applying the “purposes” test, the corporation was a “trading or
financial corporation”.
o In the absence of any current activities, the character of the corporation should be determined by the
purposes for which it was created.
 Gibbs CJ, Wilson and Dawson JJ (dissented): The corporation was not a s 51(xx) corporation under
either the activities test or the purposes test.

Mason, Murphy, Brennan & Deane JJ

 Question: Can a corporation with objects and powers appropriate for a trading or financial corporation bear
that character before it engages in any trading or financial activity?
 Where a corporation has not begun, or has barely begun, to carry on business that its constitution, including
its objects, assumes particular significance as a guide.
 Present case: Oakland’s memorandum and articles of association reveal that the objects for which it was
established include engaging in financial activities and carrying on large variety of businesses, though it lay
dormant – “on the shelf” – after its incorporation.
o Conclusion: In the circumstances of the present case, there is no better guide to its character than
its constitution and its constitution establishes its character as a trading or financial corporation.
o It is immaterial whether it is a trading corporation or a financial corporation or which of those
characters its future activities may give it.

Gibbs CJ (dissenting)
 In deciding what are the purposes for which a corporation is formed, the objects clause of its memorandum of
association is an inadequate and may be a misleading guide. For many years it has been the practice of those
drawing memoranda of association to give to companies powers to engage in multifarious activities, many of
which bear no relation to the actual or intended affairs of the company.
o To accept that the intended as well as the actual functions of the corporation are relevant for the
purpose of determining its character, does not mean that it is permissible to look at the memorandum
of association alone for that purpose.
 The whole of the evidence as to the intended operations of the corporation is relevant and is likely
to show, as it shows in the present case, that many of the objects in the memorandum were inserted out of an
abundance of caution, with no intention of describing the activities in which the company is actually engaged
or is likely to engage.
o The evidence shows that at no time during its existence has Oakland been intended to engage, and at
no time has it engaged, in trading or financial activities. It is not a corporation of the kind to which par
51(xx) refers.

The Incorporation case

NSW v Cth (Incorporation Case) (1990) HCA
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Facts
 Corporations Act 1989 (Cth) created on assumption that s 51(xx) empowered Cth to legislate for incorporation
of a company if the intention was that its activities would be substantially trading/finance activities.

Held
 Section 51(xx) does not enable the Cth to regulate the process of incorporation.
o The power is delineated by reference to “trading or financial corporations formed within the limits of
the Cth”, i.e. to corporations which have already been formed.

Mason CJ, Brennan, Dawson, Toohey, Gaudron and McHugh JJ

 The expressions “trading or financial” and “formed within the limits of the Cth” serve to restrict the classes of
domestic corporation which can be the subject of Cth power.
 To fall within one limb of the power, a corporation must satisfy two conditions:
1. It must be formed within the limits of the Cth.
2. It must be a trading or financial corporation.
 To fall within the other limb, a corporation must be a foreign corporation, i.e. a corporation formed outside the
limits of the Cth.
 Grammatical analysis of phrase ‘formed within the limits of the Cth’.
o The word “formed” is a past participle used adjectivally, and the participial phrase “formed within the
limits of the Cth” is used to describe corporations which have been or shall have been created in
Australia.
o The power is one w.r.t. “formed corporations”. That being so, the words “formed within the limits of
the Cth” exclude the process of incorporation itself.
 Drafting history (Convention Debates and 1891 and 1897 draft constitutions).
o The history of s 51(xx) confirms that the language of the paragraph was not directed towards the
subject of incorporation.
o The successive drafts of s 51(xx) before it reached the form in which it appears in the CON confirmed
that the paragraph is concerned with existing corporations and was not intended to confer power to
legislate for their creation.
o There is no ground for thinking that s 51(xx) was framed with the intention of conferring upon the Cth
the power to provide for the incorporation of companies. Indeed, the history of the paragraph plainly
indicates that the draftsmen of the provision did not contemplate that it should confer any power
otherwise than in respect of corporations already formed.
 The fact that this aspect of Huddart Parker not affected by abandonment of reserved State
powers doctrine in Engineers (as applied to corporations power in Concrete Pipes).

Deane J (dissenting)
 Incorporation means the acquisition or conferral of corporate personality under the law.
 Plenary legislative power "w.r.t." particular kinds of corporation extends, as a matter of mere
language, to laws dealing with both the incorporation and the liquidation of such corporations
just as a plenary legislative power w.r.t. "copyrights", "patents", "designs" or "trade marks" extends to laws
dealing with the creation and extinguishment of those particular kinds of industrial property.

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  The legislative power could not, so it was said, extend to authorize laws governing the formation of such
corporations since, until they are formed, they do not exist as the subject-matter of the power. Any superficial
appeal of that argument does not survive close examination.
o One objection to it is that it fails to distinguish between the abstract subject-matter of the legislative
power and concrete instances of that subject-matter.
o Another objection is that the argument fails to accord proper scope to the words "w.r.t." in s 51 or to
the settled principle which requires that par (xx), which is a constitutional grant of plenary legislative
power, be liberally, and not narrowly or technically, construed.
 The word “formed” should be properly understood as use of a past participle as part of an adjectival phrase
which is without temporal significance.
 In response to the argument that there was support by the Convention Debates that the corporations
power did not extend to legislating for the process of incorporation:
o It is not permissible to constrict the effect of the words which were adopted by the people as the
compact of a nation by reference to the intentions or understanding of those who participated in or
observed the Convention Debates.
 In response to the argument that to construe par (xx) as conferring a legislative power w.r.t. the incorporation
of those corporations only would produce inconvenience and difficulty:
o While that consideration [of inconvenience] might well be seen by the P’ment as calling for restraint in
the exercise of the legislative power, it does not provide any legal justification for denying the
generality of a plenary grant of legislative power w.r.t. the designated class of corporation.

THE CORPORATIONS POWER - B

Power w.r.t. trading activities

Actors and Announcers Equity Association v Fontana Films (1982) HCA
Facts
 Section 45D(1)(b)(i) of TPA: Prohibited secondary boycotts, i.e. trade union activity aimed at persuading
suppliers not to supply goods and services to a targeted company.
 Actors Equity in dispute with Fontana Films over closed shop arrangement, i.e. over demand that Fontana
Films employ only actors registered with it.
 When Fontana Films refused, Actors Equity tried to persuade theatrical booking agents not to contribute actors
to Fontana Films, violating s 45D(1)(b)(i).
 Federal Court imposed restraining order, against which Actors Equity appealed to HC.

Issue

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  Was s 45D was valid?

Held
 Upheld s 45D(1)(b)(i) on basis that corporations power could be used to regulate activities of natural
persons in order to protect trading corporations (cf. Brennan J: ‘discriminatory protection’).
 A good example of Fairfax direct characterisation test: s 45D(1)(b)(i) conferred rights on trading
corporations to resist secondary boycotts and therefore was a law w.r.t. corporations, even though it did not
regulate the trading activities of trading corporations per se.
 Decision not conclusive as between broad and narrow views.

Gibbs CJ

 This law in the present case does not regulate or govern activities of trading corporations; it regulates the
conduct of others. But the conduct to which the law is directed is conduct designed to caused, and
likely to cause, substantial loss to the business of a trading corporation.
o There is no reason in principle why such a law should necessarily fall outside the scope of s 51(xx).
o A law may be one w.r.t. a trading corporation, although it casts obligations upon a person
other than a trading corporation.

Stephen J
 Focused on characterisation of s 45D(1)(b)(i).
 A law may possess several distinct characters  it follows that the fact that only some elements in the
description of a law fall within one or more of the grants of power in s 51 or elsewhere in the CON will be in
no way fatal to its validity.
o If a law can be fairly described both as a law w.r.t. a grant of power to it and as a law w.r.t. a matter
or matters lefts to the States, that will suffice to support its validity as a law of the Cth.
 It will be enough if the law fairly answers the description of a law "w.r.t." one given subject matter appearing
in s 51, regardless of whether it may equally be described as a law w.r.t. other subject matters.
 Present case: s 45D(1)(b)(i) may be seen clearly enough to possess the character of a law w.r.t. trading
corporations, whatever other characters it may also possess.
o A law forbidding certain acts of third parties for the reason that they were both intended, and also
likely, to harm aliens would surely be as central to the grant of power w.r.t. aliens as a law which
required aliens to do or refrain from particular conduct: the intended object of another’s conduct is no
less central, no less significant, in bestowing a character upon a law than is the actor to whom that
law directly speaks.

Mason J
 Prohibition on secondary boycotts “necessarily has an effect on corporations in their trading
activities”.
 When we speak of a law which protects the trading activities of a trading corporation, it may be understood as
signifying a law which operates directly on the subject of the power. So understood the law is within power
and valid.
 Submission: If there is a power to prohibit the activities or the trading activities of trading corporations, it
necessarily follows that there is a legislative power to protect these activities.

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 o Response: This is correct so long as it is understood that by a law which protects the trading
activities of trading corporations it means a law which has a direct legal operation on the subject
matter of the power. Such a law is within power and valid.
 Section 51(xx) is not limited to such “trading activities”.
 Nowhere in CON is there to be found a secure footing for an implication that the power is to be read down to
relate to the “trading activities of trading corporations” and, correspondingly to the financial activities of
financial corporations and perhaps to the foreign aspects of foreign corporations.

Murphy J
 Took an ever broader approach.
 The power is, of course, plenary; it enables P’ment to make comprehensive laws covering all internal and
external relations of foreign trading and financial corporations. It extends to authorise a “Companies Act”
providing for the formation, operation and dissolution of trading and financial corporations.
 The power is not confined to laws dealing with the trading or financial operations of trading or financial
corporations (nor to foreign operations of foreign corporations). It extends to laws dealing with industrial
relations so that in relation to such corporations P’ment may legislate directly about the wages and conditions
of employees and other industrial matters.
 The corporations power is not confined to trading corporations nor to protecting them only from those who
deal with them. It enables P’ment to protect trading, financial and foreign corporations from others and to
protect others from such corporations.

Brennan J
 His approach seemed consonant with a broader view of the power. This was that a law authorised by s 51(xx)
is one that discriminates between corporations and other legal persons, in the sense that corporate
involvement is the discrimen by which the sphere of operation of the law is identified.
 Question: If a law augments or alters the rights and duties of one or more of the classes of corporations
mentioned in par (xx) and thereby discriminates between those corporations and the public at large, is that
sufficient to bring the law within the head of power? Or is it necessary that the rights and duties which the law
augments or alters should be rights or duties affecting particular activities or relationships? And, if so, what are
those particular activities or relationships?
 Charaterisation: Where the subject matter affected by a law is trading activity, the law affects the heart of
the purpose for which trading corporations were formed or a significant activity in which they are engaged.
But if the law affects also more peripheral matters, it does not necessarily lose its character as a law w.r.t.
trading corporations.
 Conclusion: Section 45D discriminates between trading corps and the public at large, protects the trading
activities of those corporations together with any non-trading businesses carried on by them, and confers upon
them rights of action to enforce the protection which the provision accords. It is a law w.r.t. trading
corporations within the power conferred upon the P’ment by par (xx).

Tasmanian Dam Case (1983) HCA

Facts
 Already seen that case decided that HEC was a trading corporation and thus in principle subject to reg under s
51(xx).
 Second part of corporations power issue in this case was whether s 51(xx) supported reg of HEC’s activities in
ss 7 and 10 of World Heritage Properties Conservation act 1983 (Cth):

83
 o Section 7: Allowed G-G to declare property threatened by development to which s 10 applies.
o Section 10: Made it unlawful for trading corporation to carry out various construction activities, either
at all (sub-ss (2) and (3)) or when done ‘for the purposes of its trading activities’ (sub-s (4)).
 P’ment inserted this provision because if trading Corporations alone was too wide
and held invalid, then the narrower provision of 10(4) would be applicable to at
least some trading corporations.

Summary
 5 judges found s 10(4) valid:
o Gibbs CJ and Brennan J: Section 10(4) regulated activities undertaken for purposes of trading and
was therefore incidental power on narrow view; and
o Mason, Murphy and Deane JJ: Section 10(4) applied to trading corporations on broad view.
 Also found s 10(2) and (3) valid on broad view (no majority).
 RATIO: S 51(XX) SUPPORTS POWER TO REGULATE NON-TRADING ACTIVITIES OF TRADING
CORPORATIONS UNDERTAKEN ‘FOR THE PURPOSES OF ITS TRADING ACTIVITY’.
 This went further than Concrete Pipes, but still left broad/narrow views open.

First issue – s 10(4)

Whether section 10(4) was valid
 5:2 majority held s 10(4) was valid.
 Gibbs J: Held that the true character of this section is not that of a law w.r.t. trading corporations.
o The connection with the trading activities of trading corporations – that brought s 10(4) within the
corporations power i.e. there was a sufficient connection.
Whether the Commission was a trading corporation
 Brennan and Deane JJ: hHeld the Commission was a trading corporation.
 Gibbs J: Did not accept the Commission was a trading corporation.

Second issue – s 10(2)(c) – obiter as question 1 was satisfied

 Only 3 judges held it was valid – Mason, Murphy and Deane JJ.
 Mason J: In response to the submission that the corporations power should be limited to “such aspects of a
business corporation” had 3 objections.
o You have to look at the placitum as a whole. If you have that limitation for trading corporations, then
you should have that limitation for financial and foreign corporations. And such a limitation is not
plausible for financial and foreign corporations.
o Goes against principle that constitutionally conferred legislative power should be construed liberally.
o “A power to make laws w.r.t. corporations would seem naturally to extend to their acts and activities”.

A general test?
Re Dingjan; Ex parte Wagner (1995) HCA

Facts
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  1992 amendment to Industrial Relations Act 1988 (Cth) gave Industrial Relations Commission power to
set aside or vary a contract that was unfair, harsh or against the public interest if the contract was one relating
to the business of a s 51(xx) corporation.
 Mr. and Mrs. Dingjan and Mr. and Mrs. Ryan were sub-contractors to independent contracts, Mr. and Mrs.
Wagner, who had entered into timber supply contract with a constitutional corporation.
 Sub-contractors sought review and variation of contract under s 127B of the Act read with s 127C(1).
 Independent contractors raised validity of s 127C(1)(b) of Act under s 51(xx).
o This provision allowed review of contracts relating to ‘the business of a constitutional corporation’.

Issue
 Could the provision that gave the IRC power in the IR Act be supported by s 51(xx) – OR was the
connection with trading corporation too remote?

Summary
 All 7 judges changed question from type of activities that may be regulated to question whether law in
question within s 51(xx) power to make laws w.r.t. constitutional corporations.
 4-judge majority: Section 127C(1)(b) beyond power because contracts affected not necessarily have any
‘significance for the activities, functions, relationships or business of s 51(xx) corporation’.
 Minority: Felt this issue could have been dealt with by reading down, and that corporations power generally
extended to any attempt to regulate business functions, activities and relationships of constitutional
corporations (effectively, the wide view).

McHugh J
 Leading judgment but has diminished in significance since the Work Choices Case.
 Although laws that regulate the activities, functions, relationships or business of corporations are clearly law
w.r.t. corporations, the power conferred by s 51(xx) also extends to any subject that affects the
corporation.
o As long as the law in question can be characterised as a law w.r.t. trading, financial or
foreign corporations, the P’ment may regulate many subject matters that are otherwise
outside the scope of Cth legislative power.
 However, the law must be a law “w.r.t.” a corporation of the kind described by s 51(xx). That
means that the law must have “a relevant to or connection with” a s 51(xx) corporation.
o It is not enough, however, that the law “should refer to the subject matter or apply to the subject
matter”.
 In determining whether a law is “w.r.t.” a head of power in s 51, two steps must be taken:
1. Determine the character of the law by reference to the rights, powers, liabilities, duties and privileges
which it creates.
2. Make judgment as to whether the law as so characterised so operates that it can be said to be
connected to a s 51 head of power. This is done by examining the practical, as well as the legal,
operation of the law.
a. If a connection exists, the law will be “w.r.t.” that head of power unless the connection is “so
insubstantial, tenuous or distant” that it cannot sensibly be described as “w.r.t.” the head of
power.

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  The law must have some significance for the activities, functions, relationships or business of the
corporation.
o Includes laws that regulates the activities, functions, relationship or business of a s 51(xx) corporation.
o Includes laws that regulate the conduct of those who control, work for or hold shares or office in those
corporations.
o Excludes laws that merely refers to or operates upon the existence of a corporate function or
relationship or a category of corporate behaviour.
o Excludes laws operating on the conduct of outsiders unless that conduct has significance for trading,
financial or foreign corporations.
 In most cases, that will mean that the conduct must have some beneficial or detrimental
effect on trading, financial or foreign corporations or their officers, employees or shareholders.
o Excludes laws that do no more than make some activity of a s 51(xx) corporation the condition for
regulating the conduct of an outsider. If a law regulates conduct that has no significance for s 51(xx)
corporations, it is not a law w.r.t. corporations even if that conduct is connected to or even based on
what a corporation does.
 Present case
o The validity of s 127C(1)(b) does not depend upon the directness or indirectness of the relationship
between the contract and the business of a s 51(xx) corporation but upon whether a contract referred
to in s 127A has significance for such a corporation.
 A contract would have significance if it conferred some benefit or imposed some detriment
on a s 51(xx) corporation of if it affected the activities, functions, relationships or business of
such a corporation.
o But the jurisdiction conferred by s 127C(1)(b) is not dependent upon the contract having any effect
on, or any other significance for, the corporation. The Commission is given jurisdiction to intervene
and set aside a contract on the bare condition that the contract relates to the business of s 51(xx)
corporation.
 Whether the unfairness, harshness or contrariety to the public interest of the contract has any
consequences or significance for the corporation is of no relevance whatsoever.
 Conclusion: Jurisdiction to make orders arises once a relationship between the contract and
the business of a s 51(xx) corporation exists. That is not enough to make ss 127A, 127B and
127C(1)(b) a law w.r.t. a 51(xx) corporation.

Brennan J
 Adhered to his own earlier test of “discriminatory operation”: a law is valid under s 51(xx) if it selects the
involvement of trading or financial corporations as the discrimen that determines its ambit of operation. He
also assimilated this test to that of “significance”.
 If the constitutional character be “significant” to the relationship with the law, it must be because the
character of the corporation is the factor which attracts the operation of the law.
o If that be so, there is no distinction between that test and a test of discriminatory operation.
 The legislative power conferred by s 51(xx) is not a power to make laws w.r.t things relating to corporations or
things relating to the businesses of corporations.
o The law is within power only if the relationship governed by the law affects the
constitutional corporations in a discriminatory manner.
o Constitutional corporations must be affected in some respect sufficiently material to give
significance to their discriminatory treatment.

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Gaudron J (dissenting)
 She thought it sufficient that a law be “expressed to operate on or by reference to” “the business functions,
activities or relationships of constitutional corporations”. For her there was no superadded requirement of
“significant” or “substantial” connection.
 When s 51(xx) is approached on the basis that it is to be construed according to its terms and not by
reference to unnecessary implications and limitations, it is clear that, at the very least, a law which is
expressed to operate on or by reference to the business functions, activities or relationships of
constitutional corporations is a law w.r.t. those corporations.
 The power conferred by s 51(xx) extends, at the very least, to the business functions and activities of
constitutional corporations and to their business relationships.
 Present case:
o Sections 127A and 127B operate no differently from a law providing that a person who contracts with
a constitutional corporation to procure the performance of work by or in consequence of which it, the
corporation, carries out its business activities shall not procure that work on terms that are unfair,
harsh or against the public interest.
o That operation, being an operation on persons who are in a business relationship with a constitutional
corporation in respect of matters the subject of their particular relationship, is within the power
conferred by s 51(xx).

Mason J (dissenting)
 Section 51(xx) must be construed as a plenary power not limited to the reg of the functions, activities and
relationships of constitutional corporations which can be described as business functions, activities and
relationships.
 The characterisation of a law is not to be determined solely by reference to its direct legal operation.
 A law should be characterised in a way that secures its validity whenever it exhibits in its practical operation a
substantial or sufficient connection with the relevant head of power.
 Present case: It is enough that the contract ‘relates to’ the business operations of the corporation in a
substantial and significant practical sense.

NSW v Cth (WorkChoices Case) (2006) HCA

Facts
 Section 51(xxxv) power to legislate w.r.t industrial relations very limited.
 Howard govt instead relied on corporations power to enact the Workplace Relations Amendment (Work
Choices) Act 2005 (Cth), comprehensively redefining workplace relations along free-market lines
(‘flexibilisation’).
 Constitutional corporations one of several federal system employers under the Act.
 On basis of definition of constitutional corporation, Act applied to all trading and financial corporations,
including some NFP bodies that had ‘significant’ or ‘substantial’ trading activities (following activities test first
adopted in Adamson’s Case).
 Act covered between 75-85% of work force.

Plaintiff’s argument
1. Corporations power did not extend to reg of internal affairs, such as corporation’s relationship with workforce.
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2. Scope of corporations power must be read down in line with s 51(xxxv).
 Plaintiffs asked HC to prefer narrow ‘distinctive character’ test to broad ‘object of command’ test.

Summary
 Gleeson CJ, Gummow, Hayne, Heydon and Crennan JJ: Rejected arguments. The Act was valid. The
repeal of the older provisions based on s 51(xxxv) was a valid exercise of power under s 51(xxxv); their
replacement based on s 51(xx) was a valid exercise of the latter power.
o Clear rejection of the “narrow” view of s 51(xx), and to that extent appeared to vindicate
the “wide” alternative view.
 Kirby and Callian JJ: Dissented.
 Major difference between majority and dissenters concerns whether scope of Cth’s legislative power under s
51(xx) may be restricted by reference to the ‘federal balance’ struck in 1901.
 On the scope of the corporations power itself, the majority held:
o Distinction between constitutional corporation’s internal and external relationships
inappropriate transposing of a distinction originating in choice of law rules w.r.t. foreign companies.
o Such a distinction has no support in Convention debates or drafting history.
o In any case, corporation’s relationship with its employees may be regarded as external.
o Gaudron J’s dissenting view on the scope of the corporation power in Re Dingjan should be adopted,
viz. that the power extends ‘at the very least’ to the business functions and activities of
constitutional corporations and to their business relationships.
o The power also extends ‘to the persons by whom and through whom they carry out those functions
and activities and with whom they enter into those relationships’.
o Distinctive character test wrongly inserted ‘additional filter’ in characterisation process.
o All other attempts to impute distinctions into corporations power, or to read down provisions as having
done so, are based on unsustainable concept of federal balance.
 Kirby and Callinan JJ in dissent:
o Gaudron’s judgment in Re Dingjan taken out of context and in any case dissenting.
o Some weight should be attached to the fact that corporations power has long been regarded as
inadequate to support expansive Cth industrial relations leg’n, as evidence by successive (failed)
attempts to amend CON so as to expand the Cth’s power to regulate in this area.

Gleeson CJ, Gummow, Hayne, Heydon and Crennan JJ

 Gaudron J’s reasoning proceeded by the following steps:
o Step 1: The business activities of corporations formed within Australia signify whether they are
trading or financial corporations, and the main purpose of the power to legislate w.r.t. foreign
corporations must be directed to their business activities in Australia.
o Step 2: It follows that the power conferred by s 51(xx) extends “at the very least” to the business
functions and activities of constitutional corporations and to their business relationships.
o Step 3: It follows that the power “also extends to the persons by and through whom they carry out
those functions and activities and with whom they enter into those relationships”.
 The power conferred by s 51(xx) “extends to the reg of the activities, functions, relationships and the
business of a corporation described in that sub-section, the creation of rights, and privileges belonging to
such a corporation, the imposition of obligations on it and, in respect of those matters, to the reg of the
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 conduct of those through whom it acts, its employees and shareholders and, also, the reg of those whose
conduct is or is capable of affecting its activities, functions, relationships or business.”
 The power conferred by s 51(xx) “extends to laws prescribing the industrial rights and obligations of
corporations and their employees and the means by which they are to conduct their industrial relations”.
The majority’s references to Re Dingjan might appear to imply that an acceptance of the main point of consensus in
that case: namely, that rather than trying to determine the precise metes and bounds of the power
conferred by s 51(xx), the Court, in any particular case, should simply focus on the question whether the
impugned law has a “sufficient connection” with s 51(xx).
Inevitably, however, the case has been argued as turning on the choice between a “narrow” view and a “wide” view of
s 51(xx), now reformulated respectively as a “distinctive character” test and an “object of command” test.
While not perhaps fully endorsing the “object of command” test, the joint judgment decisively rejected the
“distinctive character” test, and with it one possible reading of Dingjan.
Gleeson CJ, Gummow, Hayne, Heydon and Crennan JJ
 “Distinctive character” test: The fact that the corporation is a foreign, trading or financial corporation
should be significant in the way in which the law relates to it if the law is to be valid.
 “Object of command” test: A constitutional corporation is an ‘object of command’ of a law, permitting or
prohibiting a trading or financial corporation from engaging in conduct or forming relationships.
There was an attempt to confine the scope of s 51(xx) by limiting to the reg of activities and
relationships “external” to a corporation, as distinct from its “internal” arrangements. The joint judgment
rejected the whole distinction, and in any event suggested that its application was not clear-cut. They also argued that
the idea of excluding legislative interference in a corporations “internal” affairs was derived from the “choice of law
rule” enjoining comit in the treatment of foreign companies; but that whatever utility such conceptions might have in
that context, it was inappropriate to import them into a constitutional context.
In relation to the test of “discriminatory operation”, the joint judgment initially assumed that “on its face”, the
test of “discriminatory operation” “would be satisfied by any law which singled out constitutional corporations as the
object of statutory command” (and hence by any law in the form: “A corporation shall …” or “A corporation shall not
…”). The plaintiffs adopted “discriminatory operation” as an alternative but equivalent version of their own preferred
“distinctive character” test. The majority judgment did not accept this equivalence. Instead, it proposed a new
interpretation, treat the test as one of “discriminatory operation” – i.e. as “intended to apply chiefly, perhaps only”
to cases where the law applies on its face “to constitutional corporations and to other persons indifferently”, but its
practical operation has a particular impact on its corporate subjects.
The practical effect of the explanation adopted by the plaintiffs was that “distinctive character” and “discriminatory
operation” became, in effect, alternative versions of the limit which they sought to imposed on s 51(xx) – and,
however, it was expressed, the majority declined to impose any such limit.
In short, the joint judgment refused to treat the “distinctive character” test as a mere explanation or
elaboration of what is required to establish a “sufficient connection” with s 51(xx), and treated it
instead as “an additional filter” interposed cumulatively upon the process of ascertaining “sufficient
connection”.
In response to “federal balance”, the joint judgment reaffirmed the Engineers Case as rejecting any such
presupposition, since both of the doctrines overturned in that case had arisen out of a failure to start from “the
constitutional text, rather than a view of the place of the States that is formed independently of that text”.
Perhaps most controversially, the new statutory regime based on s 51(xx), like the old regime based on s 51(xxxv),
provided for the registration of trade unions and employers’ associations with the Industrial Relations
Commission, and also for the incorporation of organisations so registered. The trade unions now argued
strongly that the new provisions could not be upheld as reasonably incidental to leg’n under s 51(xx). The five majority
judges disagreed.
Gleeson CJ, Gummow, Hayne, Heydon and Crennan JJ
 If it be accepted that it is within the corporations power for the P’ment to regulate employer-employee
relationships and to set up a framework for this to be achieved, then it is also within power to authorise
registered bodies to perform certain functions within that scheme of reg. It also is within power to
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 require, as a condition of registration, that these organisations meet requirements of efficient
and democratic conduct of their affairs.
In short, the 2005 leg’n was upheld in its entirety, and any attempt to set limits to the use of the
corporations power in this context were dismissed.

THE DEFENCE POWER

Section 51(vi): The P’ment shall, subject to this Constitution, have power to make laws for the peace, order, and
good govt of the Cth w.r.t.:
(vi) The naval and military defence of the Cth and of the several States, and the control of the forces to execute and
maintain the laws of the Cth.
Note: Section 114 expressly prohibits the States from raising or maintaining military forces, and s 119 obliges the
Cth to protect the States.

General scope
The Nature of the Power

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 Andrews v Howell (1941) HCA
Facts
 National Security (Apple and Pear Acquisition) Regs (Cth): Object was “to minimize the disorganization
in the marketing of apples and pears likely to result from the impracticability of exporting sufficient quantities
… because of the effects upon shipping of the present war”.

Held
 The Regs were valid.

Dixon J
 The operation of wide general powers conferred upon the Executive by the P’ment in the exercise of the
power conferred by s 51(vi) is affected by changing facts.
 The existence and character of hostilities, or a threat of hostilities, against the Cth are facts
which will determine the extent of the operation of the power.
 Whether it will suffice to authorise a given measure will depend upon the nature and dimensions of the
conflict that calls it forth, upon the actual and apprehended dangers, exigencies and course of the
war, and upon the matters that are incident thereto.

Stenhouse v Coleman (1944) HCA

Held
 Regs conferring on the Minister a wide discretionary power to make orders controlling the sale or distribution
of “essential articles” was valid, provided that his actual orders had a sufficient connection with defence.

Dixon J
 When the question is whether a measure is incidental or conducive to the prosecution of a war that is being
fought, the solution of the question is bound to depend much less upon the abstract formulation of the general
test or criterion to be applied than upon a correct ascertainment of the true nature and operation of
the provisions impugned and of their bearing upon the prosecution of the war.
 Ordinarily the court does not go beyond matters of which it may take judicial notice. This means that for its
facts the court must depend upon matters of general public knowledge.
o Reason: Much of the difficulty and uncertainty that attends the discussion of the validity of a
purported exercise of legislative power, defined like the defence power by reference to the ends to
which it is directed, arises from the inferential, not to say speculative, character of the grounds
connecting the provision with the prosecution of the war.
 Where the validity of a legislative instrument is affected by what is planned or is going forward in relation to
the prosecution of the war, the presumption of validity is reinforced by the respect which the court pays to
the opinion or judgment of the other organs of govt with whom the responsibility for carrying on the war rests.
o The court does not substitute for that of the Executive its own opinion of the appropriateness or
sufficiency of the means to promote the desired end. But it is finally the court which must form and
act upon a judgment upon the question whether the leg’n is a true exercise of the legislative power
w.r.t. defence.
 The defence power involves the notion of purpose or object. The purpose must be collected from the
instrument in question, the facts to which it applies and the circumstances which called it forth. Among
these circumstances the character of the war, its notorious incidents, and its far-reaching consequences must
take first place. From them will appear the cause and the justification for the challenged measure.

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  The character of a war and the state of emergency at a given time may justify measures which at another
time would be unwarranted. One difficulty to which this elastic application of the defence power gives
rise is that regs, the necessity or justification for which would be conceded during the emergency which called
them forth, may continue unrevoked when the emergency may have passed and conditions may have
assumed a normal appearance.

Polyukhovich v Cth (War Crimes Act Case) (1991) HCA

Facts
 Ivan Polyukhovich was the first person to be tried in Australia (but eventually acquitted) under the War
Crimes Amendment Act 1988 (Cth).
 The Act permitted the prosecution and trial in Australia of Australian residents alleged to have committed war
crimes in Europe during WWII.

Held
 Act was within Cth legislative power w.r.t. “external affairs”.
 Thus 6 judges did not need to consider the “defence” power. Despite this, Toohey and Gaudron JJ briefly did
so and agreed with Brennan J.

Brennan J (dissenting)
 Brennan J rejected the argument that the Act might be conducive to future defence needs as it would help
Australia establish strong international standards against wartime atrocities which might protect Australian
men and women fighting in future wars.
 The validity under s 51(vi) of a law enacted in a time of peace depends upon whether the P’ment
might have reasonably considered the means which the law embodies for achieving or procuring
the relevant defence purpose to be appropriate and adapted to that end, a question of reasonable
proportionality.
 In times of war, laws abridging the freedoms which the law assures to the Australian people are supported
in order to ensure the survival of those freedoms in times of peace.
o In times of peace, an abridging of those freedoms – in this case, freedom from a retrospective
criminal law – cannot be supported unless the Court can perceive that the abridging of the freedom in
question is proportionate to the defence interest to be served.
 What is necessary and appropriate for the defence of the Cth in times of war is different from
what is necessary or appropriate in times of peace.
 Present case: The means which the Act adopts to secure future adherence to the laws and customs of war
not only trample upon a principle which is of the highest importance in a free society, namely, that criminal
laws should not operate retrospectively, but also select a specific group of persons from a time long past out
of all those who have committed, or are suspected of having committed, war crimes in other armed conflicts.
Respect for the laws and customs of war cannot be secured by a law having such an oppressive and
discriminatory operation.

War
EXTRACT: Brian Galligan, Politics of the High Court, 1987
 The HC allowed enormous expansion of the s 51(vi) defence power during this period (WWII) of grave
national emergency.

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  During the national crisis of WWII Australia’s federal system of fragmented powers was effectively suspended.
Under the defence power, Australia had, for all practical purposes, a unitary govt.
 P’ment delegated virtually the whole area of defence to the executive.
o Under the National Security Act the executive was given sweeping powers “for securing the public
safety and the defence of the Cth … and for prescribing all matters which … are necessary or
convenient … for the more effectual prosecution of the present war”.
 Presiding over and sanctioning this transformation of the Australian CON was the HC.
o Rich said that a country with a federal form of govt that becomes involved in a war which necessitated
the direction of its whole resources to defence, “cannot hope to survive unless it submits itself for the
time being to what is in effect a dictatorship with power to do anything which contribute to its
defence”.
 In the spirit of Farey v Burvett, the Court first upheld the National Security Act that allowed the executive to
govern by national security leg’n. It subsequently allowed regs controlling prices, the workforce and the
production and distribution of goods. These regs were typically drawn in the broadest terms and gave the
appropriate minister absolute discretion.
 Many of the regs that the Court allowed as valid exercises of the defence power were only very indirectly
linked to defence. E.g. the Court upheld a national marketing scheme for apples and pears on the basis that
the export of the crop was now subject to war restraint on shipping.
o Starke accused the Court of accepting arguments that led to the conclusion that “in time of war the
Cth had complete power to legislate in respect of the social and economic conditions of Australia”.
o The Court even went as far as declaring constitutional the restriction of drinking hours in the name of
national defence.
 The defence power, however, was not completely without limits.
o The Court disallowed the federal govt’s attempt to regulate the working conditions of state public
servants engaged in routine administrative work that had nothing to do with the war effort.
o It also overruled a mixed bag of federal attempts to regulate admission to universities, to control the
making of inspect sprays, and to set general standards for artificial lighting in factories.
 The defence cases demonstrate the broad discretion that judges have for greatly expanding one
part of the CON when they are convinced that circumstances warrant such expansion.

Victorian Chamber of Manufactures v Cth (Women’s Employment Case) (1943) HCA

Facts
 WEB initially established by regs made under National Security Act to determine wages and conditions for
women entering labour force to replace men in armed services.
 When Senate disallowed these regs, new legislative basis for WEB provided by Women’s Employment Act
1942 (Cth), which restored determinations made under disallowed regs.

Issue
 Whether the Women’s Employment Act was valid; i.e. whether it had a sufficient connection with the
defence power.

Summary

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  Point of contention was that Act did not just cover women working in war-related jobs (category 1), or women
working in jobs vacated by men going to war (category 2), but all jobs for which women had previously not
been employed (overarching category 3).
 Latham CJ, McTiernan and Rich JJ: Upheld Act on broad basis that it regulated new economic conditions
prevailing as consequences of war, and therefore ‘reasonably necessary’.
 Williams J: Read down Act to apply to categories 1 and 2 only.
 Starke J (dissent): Rejected that there was a distinct test for defence power as purposive power, and
dissented on grounds that Act not sufficiently connected to subject of defence.

Latham CJ
 The leg’n deals with a problem which has arisen from the war, and with which it may reasonably be
considered to be necessary to deal in order to promote the successful prosecution of the war.
 Leg’n to deal with a war-created problem (whether considered in relation to the general
community or to the fighting services) is within the power to legislate w.r.t. the naval an military
defence of the Cth conferred upon the P’ment by s 51(vi).
 The method of dealing with the problem and the extent to which it should be dealt with are matters for the
consideration of the legislature and not of the courts.
 Leg’n w.r.t. the encouragement and reg of the employment of women has a real and substantial relation
to the prosecution of the war and is calculated in an appreciable degree to advance it.

Williams J
 Williams J considered that the Act should have made it clearer that the employment of women in industry was
only a temporary measure limited to the duration of the war.
 In order to determine whether leg’n is within the defence power it is necessary to examine the substance
and purpose of the leg’n in order to ascertain what it is that the legislature is really doing.
o But if the real substance and purpose is such that the leg’n is capable even incidentally of aiding
the effectuation of the power then it is within the ambit of the power.
 Laws which can only be justified by the enlarged operation of the defence power which occurs in an
emergency must not extend beyond what is reasonably required to cope with such abnormal and
temporary conditions.
 The reg by Cth leg’n of the terms and conditions of employment of “new women” can aid in the
prosecution of the war. The industries in which they may in some instances become employed may be
industries which are not associated with the prosecution of the war, but it is employment in industry which in
the case of the first two classes has become vacant because of the war and in the third class has been created
by the war.
 The operation of the ambit of the defence power in time of war must be enlarged to enable the P’ment to
exercise more control over industry than it is able to exercise in time of peace.
 A sudden transfer of males due to the war from certain industries and the substitution of females in their place
can obviously create new industrial conditions which ought to be controlled by leg’n. These conditions would
exist throughout the Cth and could only be effectively and expeditiously dealt with by the Cth P’ment.
o As the Act has the character of a law w.r.t. defence, it is a matter of Cth P’ment to decide
the nature of the leg’n by which these conditions shall be controlled, including the
question as to what work in the 3 defined cases is suitable for the employment of the
“new women”.

Starke J (dissenting)

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  Starke J insisted on seeing the issue as one of “subject matter”.
 The fundamental question is: To what subject matter in substance the law or the reg relate?
 Present case: The Women's Employment Regs are not regs w.r.t defence either in substance or in form
but regs for the purpose of regulating and controlling the employment of all women in certain categories
regardless of the question whether the work to be performed relates or does not relate to defence.
o Conclusion: The Federal P’ment is not authorised to make any such law, and the Act and Regs are
consequently invalid.

B&W
 In R v Cth Court of Conciliation and Arbitration; Exp parte Victoria (1944) the balance shifted.
o Rich and Williams JJ voted with Starke J to prohibit an application of the Women’s Employment Act
to female assessors in the taxation branch of the Victorian Treasury.
o The original Women’s Employment Regs (Cth) had been limited to “women employed in industry”.
Now that limit had been repealed.
 Australian Woollen Mills Ltd v Cth (1944):
o National Security (Female Minimum Rates) Regs (Cth) empowered the Cth Court of
Conciliation and Arbitration to increase the minimum rates of pay for women in “vital industries”.
There was no suggestion that this was confined to “new women”.
o Starke J: The regs “do not fall within the category of laws w.r.t. naval or military defence, but within
the category of laws for the improvement and betterment of the social and industrial conditions of
females engaged in certain specified industries, which is a subject matter within the constitutional
power of the States”. This reflected his insistence on “subject matter” rather than “purpose”.
o Other judges found that regs were valid.
 Australian Textiles v Cth (1945):
o Amendments had increased the protection for women in “vital industries” by requiring that the wages
for adult women should not be less than 75% of “the corresponding minimum male rate”.
o Held: Amendments were valid.

Post-War

R v Foster (1949) HCA

Facts
 The Court heard challenges to the continued operation of 3 sets of regs.

Held
 Unanimous judgment: Put an end to all 3 regs and laid down what amounted to a policy statement for all
such issues thereafter.

The Court
 When actual hostilities have ceased the scope of application of the defence power necessarily diminishes, but
the cessation of hostilities leaves behind various matters which can legitimately be made the subject of Cth
leg’n as being incidental to the execution of the defence power in the past.

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  After hostilities have ceased laws may be sustained under the defence power as valid because they
deal with conditions which have been brought about by the exercise of the defence power itself.
 The CON does not confer upon the Cth P’ment any power in express terms to deal with the consequences of
war, but there are some consequences which undeniably fall within the scope of the legislative
power w.r.t. defence.
o Repatriation and rehabilitation of soldiers is an obvious case. Rebuilding of a city would be another
case.
o Laws relating to such matters would, however, be valid not merely because they dealt with
consequences of a war, but because such law can fairly be regarded as involved incidentally in a full
exercise of a power to make laws w.r.t defence.
 It is a question which must depend upon that aspect of the defence power which authorises leg’n
on matters incidental to the termination of hostilities, to the disestablishment and disposal of
arrangements set up in the course of prosecuting the war and to the restoration of the country to
conditions of peace.
o It may be incidental to defence to continue the control and reg of a particular subject matter for a
time after the cessation of hostilities and also to maintain such control while legislative provision is
being made for the necessary re-adjustment.
 The Court must see with reasonable clearness how it is incidental to the defence power to
prolong the operation of a war measure dealing with a subject otherwise falling within the
exclusive province of the States and unless it can do so it is the duty of the Court to pronounce
the enactment beyond the legislative power.
 To point to the war as a contributory cause can hardly be enough.
o To determine whether any given attempt to continue laws or regs in force for an extended period after
the end of hostilities is valid, it is necessary to consider in detail the nature and application of the
particular measure.

Peace
Cth v Australian Commercial Shipping Board (1926) HCA
Facts
 Defence power used to legislate for establishment of dockyard on Cockatoo Island.
 Board was incorporated under the Cth Shipping Act 1923 (Cth).
 Shipping Board = managing body responsible for dockyard.
 Authorised to engage in general manufacturing and engineering activities.

Held
 Argument that this was justified by need to maintain dockyards in state of readiness for war failed.
 Section 51(vi) did not extend to a statutory provision empowering the Board to enter into an agreement for
the supply, delivery and erection of 6 steam turbo-alternators.

Knox CJ, Gavan Duffy, Rich and Starke JJ

 There is no power which enables the P’ment or the Executive to set up manufacturing or
engineering business for general commercial purposes.
 The defence power does not authorise the establishment of businesses for the purpose of trade
and wholly unconnected with any purpose of naval or military defence.
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  Despite the practical difficulties facing the Cth in the maintenance of its dockyard and works (as it was argued
that the contractual revenue supports activities for defence purposes), the power of naval and military defence
does not warrant these activities in the ordinary conditions of peace, whatever be the position in time of war
or in conditions arising out of or connected with war.

A-G (Vic) v Cth (Clothing Factory Case) (1935) HCA

Held
 Cth could, under s 51(vi), establish a clothing factory to manufacture uniforms not only for the defence forces
but for other bodies.

Gavan Duffy CJ, Evatt and McTiernan JJ

 The maintenance of a factory to make naval and military equipment is within the field of legislative power.
o In particular, the retention of all members of a specially trained and specially efficient staff might well
be considered necessary, and it might well be thought that the policy involved in such retention could
not be effectively carried out unless that staff was fully engaged.
 Consequently, the sales of clothing to bodies outside the regular naval and military forces are not to be
regarded as the main or essential purpose of this part of the business, but as incidents in the
maintenance for war purposes of an essential part of the munitions branch of the defence arm.
 Distinguished Australian Shipping Board: The statement of the majority in that case in relation to the
defence power that "extensive as is that power, still it does not authorize the establishment of businesses for
the purpose of trade and wholly unconnected with any purpose of naval or military defence" does not assist
the present plaintiff, because the purpose of naval and military defence has been impressed upon the
operations of the clothing factory from the very commencement.

Cold War: The Communist Party Case

Communist party Case (1951) HCA
Facts
 Challenge to Communist Party Dissolution Act 1950 (Cth):
o Act declared ACP unlawful and provided for its dissolution.
o Other measures target affiliated organisations and individual communists.
 Preamble claimed that dissolution of ACP was necessary for ‘security and defence of Australia’ (s 51(vi)) and
for execution and maintenance of CON and Cth laws (s 61 read with s 51(xxxix)) (referred to as ‘the other
power’).
 General question: Whether Court could second-guess legislature’s judgment about threat posed by ACP.
 At time of royal assent, Australian forces active in Korea, but country not ‘at war’.

Summary
 6:1 majority struck down Act as beyond defence power.
 First principle: P’ment cannot ‘recite itself into power’, i.e. factual assertions made in preamble to Act are not
conclusive of the facts that need to be proved in order to establish basis for exercise of defence power.
 Dixon J:

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 o Mere fact that Australian forces involved in hostilities does not mean that Australia ‘at war’ in sense
required for expansive use of defence power.
o Defence power may not be used to confer ‘unreviewable discretion’ on executive to decide whether
circumstances justifying the deprivation of civil liberties exist.
o This is especially the case where the leg’n deals with subject matter that is not obviously within power.
 Fullagar J:
o Distinguishes b/w use of defence power for purpose immediately related to defence, and ‘secondary
aspect’ of power used to address circumstances arising in consequence of war, and also circumstances
such as these, where country ‘not at war’ but engaged in hostilities.
o Where secondary aspect of power relied on in time of peace, there is no exception to general rule of
constitutional law that the Court may review whether the grounds for the valid exercise of a
constitutional power may exist:
 ‘A stream cannot rise higher than its source … The validity of a law … cannot be made to
depend on the opinion of the law-maker … that the law … is within the constitutional power
upon which the law in question itself depends for its validity’.
o Since there were no notorious facts that justified the exercise of the secondary aspect of the defence
power (i.e. of which the Court could take judicial notice), the power could not be validly exercised.

McTiernan J
 Main question: Whether the Act is valid or invalid.
 Preliminary question: Whether the decision of the main question depends on the judicial determination or
ascertainment of the facts stated in the recitals of the preamble.
 The Court gives to recitals the effect which they have as such and no judicial inquiry into the facts stated in
them is necessary to determine that matter, the effect of the recitals.
o The recitals are in no way decisive of the question whether the Act is valid or invalid, for
that is a judicial question which only the judicature has the power to decide finally and
conclusively.
o If any fact stated in a recital is material to the question whether the Act is valid or invalid, the fact
would need to be judicially determined or ascertained.
 Conclusion: The CON does not allow the judicature to concede that P’ment can conclusively “recite itself” into
power.

Dixon J
Was particularly troubled that ss 5(2) and 9(2) gave the Executive an unreviewable discretion to proscribe
organisations and persons that it viewed as prejudicial to Australia’s defence.
With reference to “the other power”:
 It would be impossible to say of the law in the present case, which depends for its supposed connection with
the power upon the conclusion of the legislature concerning the doings and the designs of the bodies or
persons to be affected and affords no objective test of the applicability of the power, that it is a law upon a
matter incidental to the execution and maintenance of the CON and the law of the Cth.
 The Act would have the effect of making the conclusion of the legislature final and so the
measure of the operation of its own power.
In relation to the defence power:

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  At the date of royal assent Australian forces were involved in the hostilities in Korea, but the country was not
upon a war footing, and the situation bore little relation to one in which the application of the defence power
expands because the Executive has become responsible for the conduct of a war.
o The matter must be considered substantially upon the same basis as if a state of peace
ostensibly existed.
 The essential matter here is a statement to the effect that persons or bodies of persons have been guilty of
acts which might have been penalised in advance under the defence power and have a propensity to commit
like acts, this being recited as affording a supposed connection between the defence power and the operative
provisions enacted, provisions dealing with the persons or bodies directly by name or description.
 It must be evident that nothing but an extreme exception and extension of the operation or
application of the defence power will support provisions upon a matter of its own nature prima
facie outside Federal power, containing nothing in themselves disclosing a connection with
Federal power and depending upon a recital of facts and opinions concerning the actions, aims
and propensities of bodies and persons to be affected in order to make it ancillary to defence.

Fullagar J
Contrasted laws with the “direct and immediate object” of defence with “the secondary aspect” of s 51(vi).
 The power given by s 51(vi) has 2 aspects:
(1) Section 51(vi) authorises the making of laws which have, as their direct and immediate object, the naval
and military defence of the Cth and of the several States. This power is clearly not confined to time of
war. It extends to matters “which could reasonably be considered to be a threat to the safety of Australia
in the event of some future war”.
(2) Secondary aspect: The power extends to an infinite variety of matters which could not be regarded in
the normal conditions of national life as having any connection with defence. E.g. prices of goods and the
rationing of goods, rents and the eviction of tenants, the transfer of interests in land, and the conditions
of employment in industry generally.
i. It may be that this secondary aspect depends wholly on s 51(xxxix). On this view, the effect of a
national emergency is that the matters become “matters incidental to the execution” of the power
of the Executive to deal with the emergency.
ii. The application of the power depends upon facts. The “facts” referred to are the basic facts which
give rise to the extension of the power. Such facts have always hitherto been matters of public
knowledge, and matters, therefore, of which court can and will take judicial notice. But given the
basic fact of (say) war, the question will still arise, whenever the validity of a particular law is in
question, whether that law can be related to the extended power, or whether it is a law w.r.t. a
matter incidental to the power of the Executive to wage war.
iii. The matter is taken in 2 stages. (1) The existence of war or national emergency is recognised as
bringing into play the secondary or extended aspect of the defence power. This is done simply as a
matter of judicial notice, and it provides the justification for a presumption of validity which
might not otherwise exist in the case of an enactment which on its face bore no relation to any
constitutional power. (2) The enactment is examined with regard to its character as a step to
assist in dealing with the emergency. This question may itself turn on particular facts as distinct
from the overriding general fact of war or national emergency. Such facts may relate to the
operation of the law in question or to a state of affairs which calls for its enactment.
 That under the defence power a law may, at least in time of war, be made to operate upon the opinion of a
designated person, and that that opinion may supply the only link between the defence power and the legal
effect of the opinion is well established.
o It may be thought that herein lies an exception to an elementary rule of constitutional law: a stream
cannot rise higher than its source. That is, the validity of a law cannot be made to depend on the

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 opinion of the law-maker, that the law is within the constitutional power upon which the law in
question itself depends for its validity.
As to “the other power”, Fullagar J said: “I think that it is so far of a different nature from the defence power that a
law cannot be made under it imposing legal consequences on a legislative or executive opinion which itself supplies
the only link between the power and the legal consequences of the opinion. Fullagar J concluded that the validity of
the Act must turn on the fact that it was directed to a particular voluntary association.
 Section 4 purports simply to declare a particular unincorporated voluntary association unlawful and to dissolve
it. It is to be classed as a public enactment as distinct from a private enactment, but it is a privilegium.
o If P’ment enacts a privilegium which on its fact bears no relation to any head of legislative power, it is
likely to be extremely difficult to justify it under any head of power. In such a case (and s 4 is an
example) there can be no presumption of validity, and the Act, if it is to be upheld at all, can only
be upheld on the basis of special and particular facts relating to the person or class who or which
is the subject of the privilegium.
 Nothing depends on the justice or injustice of the law in question. It is only because the legislative
power of the Cth P’ment is limited by an instrument emanating from a superior authority that it arises in the
case of the Cth P’ment.
 This Act can only be supported, if it can be supported at all, as an exercise of the defence power
in its extended or secondary aspect.
o It cannot be supported under the other power because the provisions of the Act operate on opinions,
and those opinions include an opinion as to matters on which the validity of those provisions depends.
 The question whether the Act can be supported by an exercise of the defence power in its
secondary aspect must depend entirely on judicial notice. It is only when the existence of the
secondary aspect has been established by judicial notice of an emergency that evidence has ever
been admitted to connect the enactment in question with power.
 Conclusion: One cannot judicially notice in this case a state of affairs which would justify holding a measure
having the peculiar features of the Communist Party Dissolution Act valid as an exercise of an extended
defence power.

B&W
 Use of “the other power” was rejected because that power can never extend to a law “imposing legal
consequences on a legislative or executive opinion which itself supplies the only link between the power and
the legal consequences of the opinion”.
o By contrast, Fullagar J held that the “secondary” or “extended” aspect of the defence power might
extend this far, i.e. the defence power might confer an uncontrolled discretion to determine the facts
on which the exercise of the discretion depends, but only at the fullest extent of its “secondary”
aspect.
 Thus the question was whether, not on the basis of legislative recitals, but on the basis of facts
of which the Court could take judicial notice, there was a sufficiently serious national or
international emergency to extend the power that far.

Latham CJ (dissenting)
Latham CJ had established a reputation as a committed anti-communist.
 Powers: The defence power and the power to make laws to protect the existence of constitutional govt.
o The exercise of these powers can be intelligent only when they are used in relation to some national
objective which is concerned with protecting the country against what is regarded as a danger.
o Most important question: Whether leg’n for such a purpose approved by P’ment cannot be valid
unless it is also approved b a court after hearing evidence as to the existence of national danger.
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  The preservation of the existence of the Cth and of the CON takes precedence over all other matters with
which the Cth is concerned.

 The exercise of these powers to protect the community and to preserve the govt of the country under the CON
is a matter of the greatest moment. Their exercise from time to time must necessarily depend upon the
circumstances of the time as viewed by some authority. The question is – “By what authority – by
P’ment or by a court?”
Latham CJ set out matters that can be considered when determining whether dangers exist. They included “ extensive
examination of the international situation, the views upon which may determine whether action should be taken
against an external power … and whether another country is a friend or not – whether a change in its govt or in the
policy of its govt is likely”. He saws these as “matters of judgment, not of fact in the ordinary sense”.
 It is not for a court to ask or to answer the question whether or not it agrees with the view of P’ment that the
ACP is an enemy of the country. It is for the Govt and P’ment to determine that question, and they have
already determined it.

 The only question for a court is whether the provisions of the Act have a real connection with the
activities and possibilities which P’ment has said in its opinion do exist and do create a danger to
Australia.
Latham CJ held that such a connection existed and thus that the Act was valid.

Marcus Clark & Co v Cth (Capital Issues Case) (1952) HCA

Facts
 Case was decided 18 months after the Communist Party Case.
 The Korean War had escalated. It seemed that Australia was faced with an emergency requiring extensive
defence preparation.
 The Defence Preparations Act 1951 (Cth) was prefaced with a series of recitals. Section 4 authorised the
G-G to “make regs for or in relation to defence preparations”.
 The Defence Preparations (Capital Issues) Regs (Cth) were made pursuant to s 4. These prohibited the
borrowing of money upon security and the issue of share capital over a certain limit unless accompanied by
the consent of the Treasurer.
 Marcus Clark Co sought to borrow money, partly for renovations to their outlets and partly for a factory. The
Treasurer refused his consent and the company sought a declaration that the regs were invalid.
 However, unlike the Communist Party Dissolution Act, the Capital Issues Regs had made elaborate
provision for judicial review of the Treasurer’s decision.

Held
 4:2 majority held that the Act and the regs were valid. The Communist Party Case was distinguished.

Dixon CJ
 This case does afford objective tests by which its connection, or want of connection, with the defence power
may be seen or ascertained.
 The judicial remedies available to ensure that the judgment/discretion of the Treasurer does not go beyond
what is the true scope and meaning of “defence preparations” may or may not prove adequate to the purpose
but at all events it is the intention of the regs that his determination of that question should not be conclusive.

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Fullagar J
 The Act and the regs which are in question do not possess the exceptional character which belonged to ss 4, 5
and 9 of the Communist Party Dissolution Act.

Thomas v Mowbray (2007) HCA

Facts
 Challenge to Division 104 of Part 5.3 of the Criminal Code (Cth) authorising imposition of control order
on person to protect public from terrorist attack.
 Control order, which must be issued by the Fed Ct, the Fam Ct or the FMC, may prohibit range of activities and
restrain freedom of movement.
 Section 104.4: Provides that court must be satisfied that prohibition or restriction is ‘reasonably necessary,
and reasonably appropriate and adapted, for the purpose of protecting the public from a terrorist attack’.
 Cth defended control order provisions as valid exercise of defence and/or external affairs power.

Issue
 Whether the defence power is restricted to defending Australia against:
o External threats, e.g. conventional war; and
o Threats against collective bodies politic (Cth and States) rather than citizens.

Summary
 Gummow and Crennan JJ: Rejected both contentions and held that measures to protect Australians against
domestic terrorist acts fell within core of power.
o Draw analogy b/w threat posed by domestic terrorism and crime of treason in English law, which
covered internal threats.
o Conclude that s 51(vi) not limited to leg’n dealing with threat of aggression from foreign nation.
o Fact that s 51(vi) refers to ‘Cth and the several States’ cannot be used to restrict power to countering
threats posed to entire body politic as opposed to individual citizens/inhabitants and their property:
 ‘The notion of a “body politic” cannot sensibly be treated apart from those who are bound
together by that politic.’
o Combating of terrorist acts falls squarely within heart of power.
 Callinan J (concurring):
o Criticises ACP majority for being naïve about threat posed by international communism.
o Suggests that case might have been decided differently had facts known today about communism
been known then.
 Kirby J (in dissent):
o It is precisely when threats to nation are highest that respect for civil liberties must be enforced.
o Curtailment of civil liberties in Div 104 excessive in relation to threat posed.
o Thus no disagreement as to test, only as to application.

Gummow & Crennan JJ

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  The defence power is purposive in nature and a notion of proportionality is involved in relating ends to means.
 The submission that s 51(vi) is concerned only to meet the threat of aggression from a foreign nation, should
not be accepted.
o Reason: There was a long history in English law before the adoption of the CON which concerned
defence of the realm against threats posed internally as well as by invasion from abroad, e.g. treason.
 The submission that the words “the Cth and the several States” refers to those “collective” bodies politic rather
than the citizens or inhabitants of the Cth or the States and their property, should not be accepted.
o Reason: The notion of a “body politic” cannot sensibly be treated apart from those who are bound
together by that body politic.
 Present case:
o Restrictions aimed at anticipating and avoiding the infliction of suffering from terrorist acts are within
the scope of federal legislative power.
o The defence power itself is sufficient legislative support without recourse to any implication of a
further power of a kind identified by Fullagar J in the Communist Party case.
o A concentration upon sufficiency of connection is not called for when dealing with the interim control
order system. This turns upon the operation of the definition of “terrorist act”. What was proscribed by
that definition falls within a central conception of the defence power. Protection from a “terrorist act”
as defined necessarily engages the defence power.

Callinan J
 The Communist Party Case is instructive here because:
(1) It was concerned with leg’n enacted, as here, to enhance national security.
(2) Reliance for its validity was placed in substance up the defence power.
(3) It was enacted at a time when there was a perception that a particular ideology presented a current and
future risk to Australia.
(4) The leg’n sought to make a factual connection with point 3.
(5) It came to the Court by way of a form of stated case.
 Distinctions from the Communist Party Case:
o The timing of the enactment of the CPA differs from the timing of the leg’n here.
o In this case there is an abundance of uncontradicted, cogent, factual and notorious matter, having the
character of constitutional and other facts upon which this Court may and should act.
o The Cth in the Communist Party Case sought to rely, for the establishment of the constitutional
facts justifying the invocation of the defence power, factually solely on the allegations made in the
preamble to the CPA.
 Here, not only are the relevant facts proved and uncontradicted, but they are also the subject
of provisional findings by the Court whose decision is sought to be challenged.
 Threats to people and property against which the Cth may, and must defend itself, can be internal as well as
external.
 It is for the courts, and not the P’ment to have the final say on whether leg’n is within constitutional power or
not.
 Present case: The facts established here are facts in respect of which the Cth may legislate under s 51(vi).
That conclusion is so right and obvious that reference to authority is really unnecessary.

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  Real question: Is the Cth or its people in danger, or at risk of danger by the application of force,
and as to which the Cth military and naval forces, either alone or in conjunction with the State
and other federal agencies, may better respond, than State police and agencies alone?
o If affirmative, then are the enacted measures demonstrably excessive, or reasonably
within the purview of the power, or, “reasonably necessary” or “reasonably appropriate
and adapted” to protection against terrorism?
 The aspects of the judgment of Dixon J in the Communist Party Case are questionable: the drawing by his
Honour of a distinction, as if there were a clear line between them, between times of peace and serious armed
conflict, and internal and external threats.
o To regard war as a declared war only, to assumed that a nation’s foes would all identify themselves,
and rarely act covertly, that they would act logically, and that they would not be people drawn from
the Australian community was even then however to be somewhat naive.

Kirby J (dissenting)
 See p. 16.

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 THE TAXATION POWER
Section 51(ii): The P’ment shall, subject to this Constitution, have power to make laws for the peace, order, and
good govt of the Cth w.r.t.:
(ii) Taxation; but so as not to discriminate between States or parts of States.

Definition of taxation
Matthews v Chicory Marketing Board (Vic) (1938) HCA
Issue
 Was a Victorian levy upon produces of chicory an excise duty?
 If so, it infringed s 90 of the CON; and since excise is a form of taxation (loosely, a tax on goods), it was
necessary first to determine whether the levy was a “tax”.

Latham CJ
 Classic definition of a “tax”: A tax “is a compulsory exaction of money by a public authority for
public purposes, enforceable by law, and is not payment for services rendered”.

Air Caledonie International v Cth (1988) HCA

Facts
 Section 7 of Migration Amendment Act 1987 (Cth): Sought to impose a “fee for immigration clearance”
upon international airline passengers entering Australia.
 It this by inserting s 34A into the Migration Act.
 The “fee” was set at $5.
 Plaintiff’s argument: The “fee” was a “tax” for the purposes of s 55 of the CON and thus that s 55
prevented the insertion of s 34A into the Migration Act, which dealt with matters other than the
“imposition of taxation”.

Held
 The “fee for immigration clearance” was a tax, and hence its introduction into the Migration Act infringed s
55.

The Court
 Lecture notes on Latham CJ’s definition of tax:

o It should not be seen as providing an exhaustive definition of tax.

o Implicit in the reference to “a payment for services rendered” is that the services be “rendered to” – or
at the direction or request of – “the person required” to make the payment.
o The negative attribute – “not a payment for services rendered” – should be seen as intended to be but
an example of various special types of exaction which may not be taxes even though the positive
attributes mentioned by Latham CJ are all present.

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  A compulsory and enforceable exaction of money by a public authority for public purposes will not necessarily
be precluded from properly seen as a tax merely because it is described as a “fee for services”.

 If the person required to pay the exaction is given no choice about whether or not he acquires the services
and the amount of the exaction has no discernible relationship with the value of what is acquired, the
circumstances may be such that the exaction is, at least to the extent that it exceeds that value, properly to be
seen as a tax.

Australian Tape Manufacturers Association v Cth (1993) HCA

Facts
 Copyright Amendment Act 1989 (Cth) had inserted Part VC into the Copyright Act 1968 (Cth).
 The 1989 Act was passed to deal with the widespread practice of taping of sound recordings in breach of
copyright.
 Part VC provided that royalty be paid to copyright owners in return permitting copying recordings for private
use.
 Section 135ZZp(1): “Royalty” was payable by the vendor of each blank tape when first sold, let or hired or
otherwise distributed in Australia. The “royalty” was payable to a “collecting society”, a company whose
members were copyright owners.

Held
 4-judge majority: Section 135ZZp(1) imposed a tax and the 1989 Act was therefore invalid as infringing s
55 of the CON.
 Dawson, Toohey and McHugh JJ dissented.

Mason, Brennan, Gaudron & Deane JJ

 It would seem to be a remarkable consequence if a pecuniary levy imposed for public purposes
by a non-public authority acting pursuant to a statutory authority falls outside the scope of a tax
simply because the authority which imposes the levy is not a public authority, when the amount
of the levy is to be expended on public purposes, more particularly, if those purposes are Cth
purposes.
o It is not essential to the concept of a tax that the exaction should be by a public authority.

 Neither principle nor Australian authority provides any support for the proposition that an exaction is not a tax
if it not to be paid into the Consolidated Revenue Fund.

 Proposition: The expression “public purposes” is to be equaled to “govtal purposes”. By the use of the
adjective “govtal” there is a notion that the critical purposes are such that they can be effectuated only with
the expenditure of moneys standing to the credit of the Consolidated Revenue Fund.
o Response: If that proposition be correct, then an exaction not raised or received by the Executive,
e.g. an exaction raised and received by an independent statutory authority pursuant to a power
conferred by statute, could not constitute a tax. As P’ment has power to authorise a statutory
authority to levy and receive a tax, that general proposition must be rejected.
 Argument: An expropriation from one group for the benefit of another as an incident of legislative reg of
interests on a subject-matter within power, with a view to bringing about what is conceived to be an equitable
outcome, is not an exaction for public purposes and is therefore not a tax.

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 o Response: In truth, the legislative solution to the problem proceeds on the footing that it is imposed
in the public interest. Indeed, the purpose of directing the payment of the levy to the collecting society
for ultimate distribution of the net proceeds to the relevant copyright owners as a solution to a
complex problem of public importance is of necessity a public purpose.
 Conclusion: The levy is a tax. It has the characteristics of an excise.

McHugh J (dissenting)
 A compulsory exaction of money under statutory authority is not by itself sufficient to constitute
a payment of tax.
 If it was, any compulsory transfer of money from one person to another, pursuant to a statutory scheme
would constitute taxation.

 The chief feature of a tax is that it is raised to finance govt expenditure.

 Before a compulsory exaction of money under statutory authority can constitute a tax, it must be raised for
some public, i.e. govtal, purpose.

 Present case: The levy imposed by s 135ZZP does not constitute a tax. It is not paid into Consolidated
Revenue, and it is not imposed for the purposes of govt or of any public or statutory authority.

Northern Suburbs General Cemetery Reserve Trust v Cth (1993) HCA

Facts
 Training Guarantee (Administration) Act 1990 (Cth): Set out a minimum level of expenditure that
employers should spend on employment-related training.
 Under the Act, the employer was liable to pay the amount of the “training guarantee shortfall” to the Cth.
Such amounts were to be paid into a Training Guarantee Fund.

Held
 Acts were valid.
 The exaction imposed was characterised as a tax rather than a penalty.

Mason CJ, Deane, Toohey and Gaudron JJ

 The fact that revenue-raising burden is secondary to attainment of some other object is not a reason to treat
charge otherwise than as a tax.

 If law, on its face, is one w.r.t. taxation, it does not cease to have that character simply because
P’ment seeks to achieve a purpose not within Cth legislative power.
 The considerations pointing to a tax rather than a penalty are decisive.

o Neither the Act nor the Administration Act mandates or proscribes conduct of any kind.

o The legislative provisions do not make it an offence to spend the minimum training requirements; nor
do they provide for the recovery of civil penalties for such a failure.
o Consequently, the charge is not a penalty because the liability to pay does not arise from any failure
to discharge antecedent obligations on the part of the person on whom the exaction falls.

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 o The fact that the legislature has singled out those who do not spend the minimum training
requirement as the class to bear the burden of the charge and to quantify the amount of the liability
by reference to the shortfall does not deprive the charge of the character of a tax.

Luton v Lessels (2002) HCA

Facts
 Child Support (Registration and Collection) Act 1988 (Cth) and Child Support (Assessment) Act
1989 (Cth): Provided that a person caring for a child, and entitled to child support, can choose to register
those payments under those Acts. Thereupon the liability to make the payments becomes a debt owing to the
Cth.
 Payments are collected by the Cth and paid into the Consolidated Revenue and amounts equivalent to those
collected are paid out of Consolidated Revenue to the person caring for the child.

Held
 Despite this use of Consolidated Revenue, it was unanimously held that the liabilities thus created did not
involve a “tax”.

Gaudron and Hayne JJ

 Every tax that is raised must be paid into the Consolidated Revenue Fund. But the converse is not universally
true. Not every sum that statute requires to be paid to the Cth, and which is paid into the Fund, is
a tax.
 Imposing a financial burden on one group in society for the benefit of another group in society will often
constitute a tax. Under the Registration and Collection Act, however, the obligation to make a
payment to the carer of the child is replaced by the obligation to pay the same amount to the Cth.
That obligation is coupled with the creation of a new right in the carer to have the Cth pay the carer whatever
the payer thereafter gives up.
o The combination of these features – the substitution of a new obligation to the Cth equal to an
existing obligation which is terminated, coupled with the substitution of new rights in the carer against
the Cth equal to the extent to which the payer performs his/her obligation to the Cth – takes this
compulsory exaction outside the description of “taxation”.

Callinan J
 The purpose of the Acts is not to raise revenue for the Cth. The scheme does not contemplate any benefit to
the Cth. The scheme does not confer any direct benefit upon the general community. It does not seek to exact
money from the community. The beneficiaries of the scheme are of a limited class.
 The Collection Act extinguishes the debt payable pursuant to the Assessment Act by a liable parent to an
eligible carer: it creates a debt payable by a liable parent to the Cth.

 The amounts payable under this scheme are paid to the Cth by a particular debtor in relation to a particular
child or children, and an equivalent amount is paid to the particular person entitled to that amount of child
supported. It is this feature which makes Australia Tape Manufacturers distinguishable.
 Conclusion: This scheme does not involve an exaction by a public authority for a public purpose of the kind
discussed in Air Caledonie International. A person assessed under this scheme may have no ultimate
choice but to pay the assessment to the Cth, but the compulsion to pay only arises, and only if, the payer has
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 not otherwise discharged the obligation that a parent owes to his/her child/children. It is parenthood that is,
and continues to be the source of the obligation.

Fees for services

Air Caledonie International v Cth (1988) HCA
Cth argument
 Fee imposed by s 34A of the Migration Act (Cth) could not be a tax because it was a fee for services.

Held
 Argument was rejected. Fee imposed was a tax.

The Court
 It is necessary to consider whether there was something special about the fee (e.g. a “fee for services”) or the
circumstances in which it was purportedly exacted (e.g. a penalty for an offence) which, notwithstanding the
presence of Latham CJ’s positive attributes, might preclude its characterisation as “taxation”.

 The fee was payable by, and in respect of, both citizens and non-citizens arriving on an international airline
flight. The right of an Australian citizen to enter Australia is not qualified by any law. In the case of such a
returning citizen, the impost could not be regarded as a charge for the privilege of entry.
 The provisions of s 34A applied indifferently w.r.t. returning citizens and visiting non-citizens. That being so, s
34A was a law “imposing taxation” if the fee which it purported to exact from, or w.r.t., returning citizens was,
for relevant purposes, properly to be characterised as a tax.

 The phrase “fee for services” refers to a fee or charge exacted for particular identified services
provided or rendered individually to, or at the request or direction of, the particular person
required to make the payment.
 A requirement that a returning citizen submit, in the public interest, to the inconvenience of such
administrative procedures at the end of a journey cannot properly be seen as the provision or rendering of
“services” to, or at the request or direction of, the citizen concerned. Nor is it possible to find in s 34A any
identification of particular services provided or rendered to the individual passenger for which the impost could
relevantly be regarded as a fee or quid pro quo.

 The second reading speech confirms that the moneys intended to be raised by the purported impost were not
related to particular services to be supplied to particular passengers but were intended to provide, when paid
into consolidated revenue, a general off-setting of the administrative costs of certain areas of the relevant Cth
Department.

Airservices Australia v Canadian Airlines International (1999) HCA

Facts
 Section 66 of the Civil Aviation Act 1988 (Cth): Empowered Civil Aviation Authority (CAA) to impose
charge upon aircraft operators to recoup cost of providing certain services.
 Charges were based on maximum take-off weight of aircraft, and were set at a level that would defray the
cost of CAA across its Australian “network” and include a further rate of return of 7.5% on assets of CAA.

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  Section 67: Provided that the amount of the charge “shall be reasonably related to the expenses incurred” by
CAA and “shall not be such as to amount to taxation”.
 Charges were levied against Compass Airlines for air traffic, rescue and fire fighting and meteorological
services.
 In order to secure payment after Compass went into liquidation, CAA imposed a statutory lien on aircraft used
by Compass.
 The aircraft were leased by Compass, and the owners of aircraft brought proceedings.

Arguments
 The charges infringed s 67, i.e. the charges were said to be taxes, and not fees for services, because they did
not accurately reflect the actual cost to CAAA for providing the services to Compass.
 Compass was indirectly subsidising other aircraft operators because it would have been assessed for lower
charges if certain factors had been included in the calculation.

Held
 The charges were not taxes.

Gleeson CJ and Kirby J

 Question: What is it that would give a charge the character of one which was such as to amount to taxation?

 Answer: Most likely possibility would be that the charge was “devoted to building up consolidated revenue”.

o Present case: The charges were not set so as to provide the Cth with a source of additional revenue.

 The critical matter is said to be the lack of relationship between the manner in which the charges were
calculated and the value to Compass of, or the cost to the CAA of providing to Compass, the particular services
and facilities which it used.
o The question is not whether this makes the charges unfair; the question is whether it
makes them taxes.

 Question: Do charges bear the legal character of taxation because some individual user or consumers pay
more than the cost of the particular services which they use?
 Answer: It is not to the point that such pricing of services may have an economic effect, equivalent, or
similar, to taxation. What is presently in issue is whether what is involved is taxation within the meaning of s
67.

 An objective of raising revenue is not a universal determinant. Even so, the presence or absence
of such an objective will often be significant.
 Present case: The charges were not imposed to raise revenue; the charges were undoubtedly charges for
the provision of services and facilities; the charges were imposed to recover the cost of providing such services
and facilities across the entire range of users; the charges for categories of services were reasonably related to
the expenses incurred in relation to the matters to which the charges related; the services and facilities were,
of their nature, part of an activity which must be highly integrated in order to be effective; there was a rational
basis for such discrimination between users as existed.

Gaudron J

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  Charges are properly characterised as fees for service if 3 conditions are met:

o They are levied only against persons who use the services.

o They are levied against all such users.

o There is a commercial justification for discriminating between different users.

McHugh J
 Focuses on the relationship between the charge and the actual services provided, and in doing so sought to
clarify how “fees for services” should be understood in light of contemporary govt “user pays” practices.
 Characterisation: In characterising a charge as a fee for services or taxation, it is legitimate to take account
of the changing circumstances of govt which are exemplified by the devolving functions from govt
departments to statutory authorities or other corporate bodies, under the terms of their enabling statutes,
have a monopoly on the provision of a certain service and are directed by the legislature to provide those
services on a “user pays” basis.
o They should not be approached as if they were imposed simply to raise revenue for the general govt
of the country.
 Elements that indicate that the charges are properly characterised as fees for services:

o The services were provided by a statutory authority which had as one of its statutory functions the
provision of those services or services of that general type.
o The position of the statutory authority in providing the services approximated that of a natural
monopolist.
o The statutory authority was directed under statute to recover the costs of providing those services
from the users of those services.
o The statutory authority exhibited a large degree of financial independence from the executive and was
intended to operate on a commercial basis.
o The pricing structure which gave rise to a lack of discernible relationship between the value of the
services provided on a particular occasion and the charge levied for those services was a reasonably
and appropriately adapted means of achieving a legitimate public purpose (other than revenue raising)
which was related to the functions, powers or duties of the statutory authority.

 Where the total charges recovered for providing the services exceed the total cost of providing the services, a
rebuttable presumption naturally arises that the pricing structure is employed for a revenue-making
purpose.
 Present case: There is no suggestion that the figure of 7.5% is an unreasonable rate of return on the assets
in question.
o Question: But can that 7.5% rate of return be properly included in the “costs” of the Authority?

 Answer: The degree of financial autonomy of the Authority from the executive indicates that a reasonable
rate of return on assets from the Authority to the Cth may be legitimately considered to be the cost to the
Authority of utilising capital provided by the Cth to provide the services in question.

 The rate of return required by the Cth arose as an incident of the Cth utilising the Authority to provide the
services in question.

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 o But the overarching purpose of the requirement was to allow the Authority to provide the
services in question while minimising the opportunity cost to the Cth. It was not to
“replenish the Treasury”.
 The lack of a discernible relationship between the charge levied for, and the value of, a particular service
provided on a particular occasion, does not destroy the prima facie character of the charges as fees for
services.

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