APLA Ltd & Ors v Legal Services Commissioner of New South Wales & Anor

[2004] HCATrans 492

[2004] HCATrans 492

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S202 of 2004

B e t w e e n -

APLA LTD

First Plaintiff

MAURICE BLACKBURN CASHMAN PTY LTD

Second Plaintiff

ROBERT LESLIE WHYBURN

Third Plaintiff

and

LEGAL SERVICES COMMISSIONER OF NEW SOUTH WALES

First Defendant

STATE OF NEW SOUTH WALES

Second Defendant

GLEESON CJ
McHUGH J
GUMMOW J
KIRBY J
HAYNE J
CALLINAN J
HEYDON J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON TUESDAY, 7 DECEMBER 2004, AT 10.20 AM

(Continued from 6/10/04)

Copyright in the High Court of Australia

__________________

MR S.J. GAGELER, SC:   If the Court pleases, I appear for the plaintiffs with MR J.K. KIRK and MR P.K. CASHMAN.  (instructed by Maurice Blackburn Cashman)

MR M.G. SEXTON, SC, Solicitor‑General for the State of New South Wales:   If the Court pleases, I appear with my learned friend, MS A.M. MITCHELMORE, for the second defendant.  (instructed by Crown Solicitor’s Office (New South Wales))

MR D.M.J. BENNETT, QC, Solicitor‑General of the Commonwealth of Australia:   If the Court pleases, I appear with my learned friends, MR R.G. McHUGH, who is not in Court today, and MR B.D. O’DONNELL, for the Attorney‑General of the Commonwealth of Australia, intervening.  (instructed by Australian Government Solicitor)

MR R.J. MEADOWS, QC, Solicitor‑General for the State of Western Australia:   May it please the Court, I appear with my learned friend, MR S.J. WRIGHT, on behalf of the Attorney‑General for the State of Western Australia, intervening.  (instructed by Crown Solicitor for the State of Western Australia)

MR C.J. KOURAKIS, QC, Solicitor‑General for the State of South Australia:   If the Court pleases, I appear for the Attorney‑General for the State of South Australia with my learned friend, MS A. RAO.  (instructed by Crown Solicitor for the State of South Australia)

MS P.M. TATE, SC, Solicitor‑General for the State of Victoria:   May it please the Court, I appear with my learned friend, MR S.G.E. McLEISH, for the Attorney‑General for the State of Victoria, intervening.  (instructed by Victorian Government Solicitor)

MR P.D.T. APPLEGARTH, SC:   May it please the Court, I appear with my learned friend, MR G.R. COOPER, for the Attorney‑General for the State of Queensland, intervening.  (instructed by Crown Law Queensland)

MR J. BASTEN, QC:   May it please the Court, I appear with MS R.A. PEPPER for the amici.  (instructed by Public Interest Advocacy Centre)

GLEESON CJ:   Yes, Mr Gageler.

MR GAGELER:   Your Honours, the parties have agreed on an allocation of time that will see us finish within the day. 

GLEESON CJ:   Thank you.

MR GAGELER:   Your Honours, we have no desire to repeat what is in our supplementary written submissions. We propose to structure our oral submissions by reference to, and in the order of, the three questions notified by the Court in the Registrar’s letter of 12 November. The first question asks, to what extent does the practical operation or practical analysis, practical effect analysis, developed in the section 92 cases apply to section 109 cases? Our answer to that question is, to the same extent, and for essentially the same reason.

The reason is that section 109 deals with what on any view is “a matter of prime importance in the constitutional framework”. Those are the words of Chief Justice Gibbs in University of Wollongong v Metwally (1984) 158 CLR 457. Justice Isaacs, in one very early case, went so far as to describe section 109 as “essential to the very life of the Commonwealth”. That was the Federated Sawmill Case (1909) 8 CLR 465 at 530. In our submission ‑ ‑ ‑

KIRBY J:   That seems a doubtful proposition, with respect, because if it had not been there, the court would have had to fashion a principle, as it did with Marbury v Madison, and it is pretty clear that it would have fashioned the principle of federal priority.

MR GAGELER:   Precisely, because federal priority is essential to the very life of the Commonwealth.  Your Honours, it follows from that ‑ ‑ ‑

McHUGH J:   The United States Supreme Court has had no trouble developing a comparable doctrine.

MR GAGELER: No. I want to come to that, because it is very important to the interpretation of section 109. What I was going to say before I come to that, and I will come specifically to it, is that that constitutional status alone, in our submission, leads one to the conclusion that section 109, like section 92, like section 90, like section 117, is properly construed as addressed to the substance and not merely to the legal form of the Commonwealth and State laws to which it refers; the substance of a law being, lying in, its practical operation or practical effect.

Before coming to the American cases and the section 109 cases which, in our submission, show its historical derivation and show that construction already at work, may we take your Honours very briefly to the statement of general constitutional principle that appears in Ha v State of New South Wales (1997) 189 CLR 465 at 498. We read this passage in the joint judgment of four members of the Court, including three of your Honours, as a statement of what is now orthodox constitutional principle and what should now be regarded as general constitutional principle.

At page 498 there is, towards the top of the page, a quotation from Peterswald v Bartley  There is then a quotation from Justice Isaacs in the Commonwealth Oil Refineries Case, a quotation which, in our submission, captures, albeit in slightly different words, the notion that one can see running through later section 90 and 92 cases even during the era of the criterion of legal operation, and that is the notion that those sections will be infringed where a State law seeks to achieve its purpose indirectly by a circuitous device.  One then sees immediately after that quotation the following statement:

When a constitutional limitation or restriction on power ‑ ‑ ‑

GUMMOW J:   That is not 109.

MR GAGELER:   Not in the sense of a denial of legislative power, no –

is relied on to invalidate a law, the effect of the law in and upon the facts and circumstances to which it relates – its practical operation – must be examined as well as its terms in order to ensure that the limitation or restriction is not circumvented by mere drafting devices.  In recent cases, this Court has insisted on an examination of the practical operation (or substance) – 

we see the terms as interchangeable – 

of a law impugned for contravention of a constitutional limitation or restriction on power.

Now, the footnote is a footnote to cases on section 90, section 92, section 117. Your Honours could also have added cases dealing with section 51(xxxi). All of them are of a piece, if one looks at substance. In our submission, although your Honour Justice Gummow is absolutely right, that one is concerned with section 109, at least not with the same sort of limitation or restriction on power, the principle so expressed is particularly apt to the operation of section 109 for two reasons.

The first is that the function of section 109, as correctly identified by Quick & Garran in the half page that they devoted to section 109, that is, page 939 of their work, is to place beyond doubt the principle of the supremacy of federal law, but, as your Honour Justice Kirby has already pointed out, would, in any event, and was, in any event, seen by Quick & Garran as implicit in the structure of the Australian Constitution. That was, as your Honour Justice McHugh said, dealt with in the United States Constitution by reference to the doctrine of pre‑emption.

McHUGH J:   Can I raise for your consideration one potential problem.  Is the notion that you take into account the practical operation of the law for 109 purposes consistent with constitutional doctrine concerning 109, having regard to the three theories of 109, namely, textual collision, covering the field or operational inconsistency?

MR GAGELER:   Yes.

McHUGH J:   To fit in with covering the field, is there any tension between the notion of the covering the field test, that is to say, if there is not textual collision it must cover the field, and say here that you can take into account the practical?

MR GAGELER:   We believe not, because on one view – and I have come across a passage in a judgment of Sir Owen Dixon which I just could not relocate this morning – on one view, the covering the field test is properly seen as a test that focuses on the substantive operation, the intended practical operation of the Commonwealth law. So when we look at section 109 and look at the inconsistency between laws, in our submission, one is looking at the substantive operation of both laws, and, on one view, the covering the field test is one of simply looking at the intended practical operation of the Commonwealth law.

HAYNE J:   Well, do you not seek to invert the process?

MR GAGELER:   Pardon, your Honour? 

HAYNE J:   Are you not seeking to invert the process?

MR GAGELER:   I believe not.

HAYNE J:   That is, by looking at what you are saying to be the practical operation of the impugned State law?

MR GAGELER:   No, I hope not, your Honour.  What we are seeking to do is to look at the intended practical operation of the Commonwealth law, that is, if there is a right and it is intended to be exercised or enjoyed.  If there is a jurisdiction, then it is intended to be effectively exercised.  So we start with that proposition as to the substance ‑ ‑ ‑

GUMMOW J:   The question is why you only have practical operation for one of the comparators. 

MR GAGELER:   We do not.  Emphatically, we do not. 

KIRBY J:   The Commonwealth in its submissions rightly, in my view, points out that we have to be a little careful with these three explanations, and any other explanations.  Ultimately, the text talks of “inconsistency” and the explanations are simply attempts by judges to explain what that word means. 

MR GAGELER:   We embrace that, your Honour, we embrace that. Can I just come back to the point that I had reached of saying that there are two reasons why a substantive operation in respect of section 109 ought be accepted. One is its historical derivation from the American doctrine of pre‑emption. Your Honours will ‑ ‑ ‑

KIRBY J:   What did the Canadians do?  Do they have a specific express provision?  Of course, they have different distribution, but ‑ ‑ ‑

MR GAGELER:   The structure of the British North America Act was different.  As your Honour might recall, there were seen to be mutually exclusive fields of legislative power.

McHUGH J:   They relied heavily on…..in substance.

MR GAGELER:   Yes, which influenced our early High Court up to the time of the Engineers’ Case, yes, but the structure is sufficiently different that the Canadian position can be entirely put to one side, your Honour.

KIRBY J:   The Indians have followed Ex parte McLean in the Indian Constitution.

MR GAGELER:   I was not aware of that.

KIRBY J:   Yes, they have adopted very largely the jurisprudence of this Court.

MR GAGELER:   Your Honours, in our written submissions – these are our further submissions of 20 October – we have in paragraph 20 a reference to the modern US Supreme Court decision in Nash v Florida Industrial Commission.  That is a very useful illustration of the United States Supreme Court applying the doctrine of pre‑emption by reference to the practical operation of both the federal and the State law involved.  In that case, the provision of the State law that was held invalid was one that denied a benefit under State law to a person who exercised a right conferred by federal law.

The provision was held to be invalid because of its practical effect.  The court said its obvious practical effect was to impede the exercise of the federal right.  The federal right still existed and it could still be exercised, but the State gave a financial disincentive to its exercise.  That was held to give rise to invalidity by reference to the doctrine of pre‑emption.  What is important, in our submission, for present purposes is to recognise what is pointed out in the quotation that we have set out in paragraph 20 – it is at the last page, I think, of the reported judgment of the court in the US Reports – and that is the consistency and antiquity of the doctrine that was being applied by the United States Supreme Court.

In our submission, it is instructive to compare the language of Chief Justice Marshall in McCulloch v Maryland, the first of the early cases referred to there, with the later language adopted by Sir Owen Dixon in Victoria v The Commonwealth and approved and applied more recently by this Court in the joint judgment in Telstra v Worthing.  I will come to that in a moment.

KIRBY J:   I think there is an extra verb thrown in.

MR GAGELER: There are similes, your Honour, but essentially it is expressing the same notion. The second reason why we say it is particularly apt to adopt a substantive operation or construction of section 109 – that is, one that focuses on substance rather than form – is that the effect of the Engineers’ Case has been to give section 109 a pivotal, and possibly the pivotal, place in the constitutional structure in respect of the relationship between the Commonwealth and the States.

It is instructive to look at what was said about section 109 in the Engineers’ Case (1920) 28 CLR 129 itself. Your Honours have the Engineers’ Case I think as a photocopy. At page 154, in a passage that your Honours will have looked at many times, towards the bottom of the page, there is a reference to section 109. In the last four lines on that page, after the reference to section 109, it is said:

This is the true foundation of the doctrine stated in D’Emden v Pedder in the so‑called rule quoted, which is after all only a paraphrase of sec 109 of the Constitution.

What is “the so‑called rule quoted”?  That is the rule that appears at page 144, earlier in the judgment.  Your Honours will see D’Emden v Pedder referred to in the middle of the page, and then immediately after that the rule referred to is in these terms – and this is a direct quote from Chief Justice Griffith in D’Emden v Pedder:

“When a State attempts to give to its legislative or executive authority an operation which, if valid, would fetter, control, or interfere with, the free exercise of the legislative or executive power of the Commonwealth, the attempt, unless expressly authorized by the Constitution, is to that extent invalid and inoperative.”

GUMMOW J:   Well, that invites attention to say…..does it not, which operates outside 109, on one theory of it.

MR GAGELER:   On one theory, yes.  In respect of what is said there about executive authority, perhaps that could be put to one side, but in relation to legislative authority, I do not ask your Honours to go back to D’Emden v Pedder at all.  If you will look at D’Emden v Pedder, what Chief Justice Griffith was doing was consciously relying on the analysis in McCulloch v Maryland, in saying that that is implied into the Australian Constitution.  What the Court in the Engineers’ Case was saying was that that McCulloch v Maryland type formulation is the true construction of section 109 of the Constitution.

KIRBY J:   That is not exactly right, is it, because it was a reciprocal limitation in D’Emden v Pedder.  Perhaps we should reread D’Emden v Pedder.

MR GAGELER:   No, your Honour is right.  There is a lot of American constitutional history here, of course.  As stated in McCulloch v Maryland, it was not a reciprocal limitation, but after the United States Civil War ‑ ‑ ‑

GUMMOW J:   Collector v Day.

MR GAGELER:   Collector v Day, it was made into a reciprocal limitation and, in a sense, what the Engineers’ Case did was to take one back to the Marshall days of the Supreme Court’s jurisprudence and to say that that is the true meaning of section 109 of the Constitution.

KIRBY J:   And to the text of 109.

MR GAGELER:   That is the proper construction of the text of section 109, yes. Your Honours, to some extent, this is brought together in Sir Owen Dixon’s extra‑curial writing. Your Honours have been given an extract from Jesting Pilate, which is Sir Owen Dixon’s speech on Marshall and the Constitution, and there is, at page 177 to page 178, a reference to Marshall intertwined with references to section 109. I will not read the entire passage, but your Honours will see that it begins with the first full paragraph on page 177:

Marshall’s principles of federal supremacy have had no application that has proved of more real importance in Australia than the invalidation of State laws where the ground is taken by federal legislation. 

His Honour points out at the bottom of the page that in Australia, the matter does not depend entirely on implication, we have section 109, and on page 178, referring to some of the early narrow views that had been expressed on the operation of section 109, your Honours will see, about point 8 of the page:

But at first there seemed to be for some judges of the High Court a fascination in the idea that if you could obey one law without breaking the other and if there was no other flat contradiction between the two, there could be no inconsistency. It appeared possible that the specific Australian provision in s. 109 instead of adding strength to the principle of supremacy might operate unexpectedly in a way which might actually weaken it. For a moment it looked as it the word “inconsistent” might receive a pedantic construction drawn rather from a verbal formalism than essential conceptions of federalism. In the end however the Court did not forget that it was a constitution it was expounding -

et cetera. 

GUMMOW J:   Well, there is a reference to Clyde v Cowburn which is to covering the field, I guess.

MR GAGELER:   Yes, and as I said, we see the covering the field test as a test which, in essence, involves looking at the substance and intended practical operation of the Commonwealth law really as the reciprocal, we say, of the way in which one should look at the substance and intended operation of the State law.

GUMMOW J:   Yes, but the question is does that exhaust the genus?

MR GAGELER:   No, it does not, on either side.

McHUGH J: Is it not difficult to reconcile the practical operation doctrine in section 109 with a decision like the two decisions in Airlines of NSW v NSW.  I mean if ever a practical operation of a Commonwealth law was thwarted, it was by the regulations or the law of New South Wales and yet it was held that you had to get licences under both Acts.  This Court said well, if it is deadlocked the answer lies in co-operation.  I think that is what Justice Menzies said in that case.  So it was just deadlock.

MR GAGELER:   Yes, your Honour, I cannot remember the detail of that case, I am afraid.  I remember the two licensing systems and I thought that the explanation was that they could work together but I ‑ ‑ ‑

GUMMOW J:   Well, by very, very dexterous textual analysis.

MR GAGELER:   Yes.

GUMMOW J:   Not the sort of language at page 178 of this extract from Jesting Pilate.

MR GAGELER:   No, and it is interesting as we look back through the Dixonian statements on section 109 which have really been picked up and applied most recently by the Court. Sir Owen Dixon was quite often in dissent on section 109 cases through that period.

McHUGH J:   Yes, it is not easy to, in substance, to reconcile a case like Airlines of NSW with say Botany Municipal Council v Federal Airports Authority.

MR GAGELER:   No, and your Honour it would be in vain for us to pretend that we can explain every section 109 case that has been decided. We can pick up the threads of constitutional principle and certainly those that have received the most recent endorsement by the Court and we can ‑ ‑ ‑

McHUGH J:   Or even the preferentials to servicemen cases like Wenn v Attorney General and Illawarra v Wickham.

MR GAGELER:   Well, Wenn v Attorney General, I think, works quite well.  I mean that was a case where the State law was held invalid. 

McHUGH J:   Invalid, yes.

MR GAGELER:   Invalid, because the ‑ ‑ ‑

McHUGH J:   What I mean is it is difficult to reconcile Wenn with the Airlines cases.

MR GAGELER:   Yes, your Honour, I confess that I have not looked again at the details of the Airlines Case, in this respect.

KIRBY J:   Professor Lane used to pretend that they were all very consistent and taught us so, but now we are little bit more realistic, I think. 

MR GAGELER:   I hope so, your Honour, yes. Of the section 109 cases can I mention just four of them. One of them is Telstra v Worthing (1999) 197 CLR 61.

GUMMOW J:   That was a case which had been decided below on the basis of no textual collision.

MR GAGELER:   Yes, exactly.  Your Honours at page 76 ‑ ‑ ‑

GUMMOW J:    . . . said that is not the full story.

MR GAGELER:   Absolutely.  Your Honours, at page 76 in paragraph 28 set out and differentiated between two propositions stated by Sir Owen Dixon in Victoria v Commonwealth and your Honours, of course, went on to apply the first of those propositions which is the proposition that we seek to invoke in the present case.

Your Honours in the previous paragraph, paragraph 27, instanced Australian Mutual Provident Society v Goulden as an example of the operation of the first of those principles.  We want to turn to Goulden in a moment but can we go, first, not to Victoria v The Commonwealth that your Honours there cited, but to the first statement of exactly the same principle by Sir Owen Dixon in his dissenting judgment in Stock Motor Ploughs v Forsyth 48 CLR 128. At 136 your Honours will see at about point 8 of the page the early version of the Victoria v The Commonwealth formulation where his Honour said:

In this Court an interpretation of sec. 109 of the Constitution has been adopted which invalidates a law of a State in so far as it would vary, detract from, or impair the operation of a law of the Commonwealth.

What we want to focus on is the sentence that precedes that sentence, the context of which is that the Court in Stock Motor Ploughs was concerned with a State Moratorium Act which prevented, without leave of the Court, the bringing of proceedings to enforce a right to damages that was conferred by a Federal Act, that is the Bills of Exchange Act (Cth).  So that the consequence of the State Act was to leave the Commonwealth right intact, that is the right to damages still existed, it is just that the State law prevented or, more properly, suspended its enforcement.  What Sir Owen Dixon said in that context is that:

A provision which prevents or suspends the enforcement of an accrued right cannot do otherwise than impair the enjoyment of that right.

At page 139, his Honour in passages that I will not read, made clear that the Commonwealth Act in question, the Bills of Exchange Act, for the most part was supplementary to or cumulative upon State law, including State Limitation Acts that his Honour saw as being picked up by section 79 of the Judiciary Act.  You will see that reference towards the bottom of the page.

But he said at page 140 that the State Moratorium Act was different.  It stood outside the general class of State laws upon which the Commonwealth law was cumulative, and your Honours will see at the top of page 140 a reference to “the peculiar nature” of the Act in question, and at about point 7 of page 140, a reference to the Moratorium Act being “concerned with”, if you like, aimed at, “accrued rights”, and what device that his Honour saw in the Moratorium Act was whereas the Commonwealth conferred rights implicitly on the basis of those rights would be able to be enjoyed or exercised, the Moratorium Act seized upon those accrued rights and sought to prevent their exercise.

GUMMOW J:   That can be compared with what Justice Evatt said at 150, the second last paragraph of his judgment, there seems to be a characterisation, I think:

In the present case the plaintiff’s rights have been suspended, not because –

but because?

MR GAGELER:   If his Honour were approaching the question as one of characterisation ‑ ‑ ‑

GUMMOW J:   It looks like it.  It is a long way away from substance there?

MR GAGELER:   It is, although any section 109 case will necessarily involve an assessment of what it is that the Commonwealth Act is seeking to do and what it is that the State Act is seeking to do. It would be probably our position that your Honours would take the view that Stock Motor Ploughs was wrongly decided, although we do not have to go that far.  We are concerned with the principle, and it is really Sir Owen Dixon’s statement of principle that is being picked up and applied later.

KIRBY J:   The problem with taking all of these single instances is that each one of them calls forth an assessment and verbal formulas such as “not impair” or “impinge on” and so on, and your concession, properly made, that there are de minimis cases and a traffic law that is not going to, as it were, run into this problem.  Somewhere between that de minimis case and the case of a clear deliberate infraction upon federal law, there are going to be these borderline cases ‑ ‑ ‑

MR GAGELER:   We accept that, your Honour.

KIRBY J:   It is impossible really to find a verbal formula that is entirely satisfactory to explain what ultimately is to be found in the text of the Constitution.

MR GAGELER:   Can I answer it this way, your Honours. There is a verbal formula that really dates from 1819, and with very little change to the verbiage it has come through as the true doctrine of section 109 to the present. The application of that verbal formula will obviously involve questions of degree upon which minds may differ as is illustrated by many cases over the intervening couple of hundred years, but if your Honours leave section 109 really just aside for a moment and think about the Melbourne Corporation principle or think about separation of powers or think about many other constitutional doctrines which we see as implicit rather than explicit in the Constitution, one does not have the same concern about the inability to express in very precise terms the principle involved, nor does one have any great concern about the application of the principle to a particular case. Minds might differ. Indeed, we live with the ambiguity. It is part of the constitutional – it is a constitutional necessity, in a sense.

GLEESON CJ:   But section 109 is concerned with inconsistency of laws, not inconsistency of policy.

MR GAGELER:   I accept that, but it is concerned, in our submission, with the inconsistency of laws in their substantive operation, the substantive operation involving the practical effect and intended practical effect of laws. So policy, imputed policy, the policy imputed to the legislature in enacting a law is something that is taken into account in a section 109 case.

McHUGH J:   In Ex Parte McLean 43 CLR 484 Justice Dixon expressly referred to “affected”. He said, after referring to the Conciliation and Arbitration Act said –

But the provisions of that Act itself, which establish awards made under its authority, may have a meaning and effect consistently with which State law could not further affect a matter for which such an award completely provides ‑ ‑ ‑

MR GAGELER:   Yes, so the reference to “affect” is there.  In better answer perhaps to your Honour the Chief Justice’s question, can I come to AMP v Goulden 160 CLR 330, which is the case referred to in Telstra as an illustration, a useful illustration of this principle at work.

GLEESON CJ:   There, the inconsistency was with the scheme of federal regulation.

MR GAGELER:   Yes, your Honour.

GLEESON CJ:   Of life insurance business.

MR GAGELER:   Absolutely, and your Honour, that is right, and not with any particular provision.  In fact, it was impossible, as we read the judgment, to point to inconsistency between what the State law was doing and any particular provision or right conferred by the Commonwealth Act.  It was rather an inconsistency with the – we would put it in terms of practical operation, but the court put it in terms of underlying assumption in the Commonwealth Act as to how the life insurance companies would operate.

GLEESON CJ:   I thought there was an inconsistency with section 78 of the Life Insurance Act, was there not?

MR GAGELER:   Well, almost, your Honour.  The case, as your Honour the Chief Justice is well aware, was one that concerned the State law which prohibited discrimination on the grounds of physical impairment that was said to be invalid in its application to the setting of insurance premiums by a life insurance company, registered under the Life Insurance Act (Cth).  Your Honour, the reference to section 78 is at page 336.  Before I get to that, your Honours might note at page 335 there is a statement at about the middle of the page that:

The Life Insurance Act (“the Act”) is framed on the basis that it will operate in the context of local laws of the various States –

and that is elaborated upon.  Then at the bottom of that page, it says:

Among the matters in respect of which the Act makes special provision are the statutory funds of life insurance companies, the actuarial investigation of their affairs, the rates of premium charged and various aspects of life insurance policies.  In the context of the statutory scheme of registration which confines the carrying on of life insurance business in Australia to companies registered under the Act, those provisions are directed towards ensuring adequate supervision and regulation of the insurance practices of life insurance companies –

et cetera.  It is then said:

Central to the practices of the insurance companies which the provisions of the Act are designed to regulate and control are the classification of risks and the setting of premiums.  They are the essence of life insurance business.  Subject to s. 78, to which we shall refer in a moment, the Act does not attempt to restrict the business judgment of a registered life insurance company in classifying risks and setting premiums.  To the contrary, the Act proceeds on the underlying legislative assumption that, subject to some qualifications for which the Act provides, the life insurance business of such a company is more likely to prosper and the interests of its policy holders are more likely to be protected, if it is permitted to classify risks and fix rates . . . in accordance with its own judgment –

Then it was said that section 78 really was the source of the qualifications.  If you read on – and I will take your Honours to the next page – we read the judgment as saying that the inconsistency arose because of the inconsistency – I am speaking loosely but for the purposes of emphasis – between the State law and the underlying legislative assumption of the Commonwealth Act, not specifically section 78, upon which that assumption was ‑ ‑ ‑

McHUGH J:   I do not suggest for a moment that Goulden was wrong but I have always thought it is very difficult to reconcile it with Wardley’s Case, the case of the female pilot.  There the Court said there was no conflict between the equal opportunity legislation and the Commonwealth award provisions.

GLEESON CJ:   The State Act in Goulden’s Case purported to say that when you are fixing life insurance premiums you cannot discriminate between people who are seriously disabled and other people.

MR GAGELER:   That is right.  If I can just go to the passage at page 337, about point 2, it is said in the words of Justice Dixon in Victoria v The Commonwealth:

it –

that is the State Act –

“would alter, impair or detract from” the Commonwealth scheme of regulation established by the Act . . . Indeed, such legislation would undermine and, to a significant extent, negate the legislative assumption of the underlying ability of a registered life insurance company –

et cetera.

KIRBY J:   That was a much stronger case than this one though, was it not, really?  That is a case where there was a federal Act, it was specific to a particular topic, insurance.  There was a State Act that then entered into and invaded the federal field and expressly dealt with insurance, whereas ‑ ‑ ‑

MR GAGELER: It may be stronger, your Honour, but all I am seeking to do at the moment is gain support in the cases for taking the substantive practical operation of both the Commonwealth and the State Act as the basis for the operation of section 109.

KIRBY J: The reason for a degree of caution in finding inconsistency is that in any federal polity you are going to necessarily have interface all the time between consequences of federal and State legislation. If you have too sharp a criterion, then the co‑operative nature of the Federal Government is not going to operate as the Constitution envisages.

MR GAGELER: We embrace that, your Honour. I do not seek to confine the operation of section 109 to three specific tests and I accept that when one goes beyond any criterion of legal operation, one is in the area of degree and judgment, and we do not shy away from that.

KIRBY J:   If this had been legislation which might well have been passed by a State Parliament 20 years earlier defending the propriety, dignity, decency, traditions of the legal profession and had forbidden all advertising because it was unseemly for professional people to do that, then would you have had an argument?

MR GAGELER:   We would have had the conceptual basis for an argument, but whether the argument ‑ ‑ ‑

KIRBY J:   But would you have been able to attack it under section 109?

MR GAGELER:   We would have the conceptual basis for an argument under section 109, the question being whether the State Act or State regulation, as it would have been in the days your Honour is referring to, in its practical or substantive operation, altered, detracted, or impaired the exercise of a federal right, or the exercise of federal jurisdiction.

In our submission, two things would have to be borne in mind in the scenario that your Honour is referring to.  One is that the degree of impairment or detraction, we accept, would need to be seen to be substantial in the sense, at least of being non – trivial.  That is a point made by the Commonwealth in its submissions.  It is a point that we think we have made in our submissions.

Looking at it just in terms of substantiality or not may produce different answers on the basis of different regulations considered at different times, but separately, your Honours, we say that the degree of impairment must be judged by reference to the contemporaneous operation of the Commonwealth law and the State law involved, and historical analogues - we have regulations enacted for avowedly different reasons in a completely different historical setting - in our submission, are not particularly helpful in addressing the present problem.

KIRBY J:   You also have going for you in this case, if it is relevant, and I think it probably is, the intent.

MR GAGELER:   Yes.

KIRBY J:   That the purpose and intent and stated object was to cut down on just such litigation, and unless you know of a lawyer and can know of the terms you can get them, then that is, as it were, the intention of the State legislation.

MR GAGELER:   Well, we have that, your Honour.  If nothing else, the intention of the State legislature is a guide to the substantive or practical operation of the State law.  It is the intended practical operation of the State law.  It is the substantive operation.  Finally, your Honours, can I mention the fourth of the cases, and it is really just a snippet in Kable 189 CLR 51.

GUMMOW J:   I wanted to take you to that – paragraphs 22 and 23 of your written submissions, that you are picking up, I think, and it goes back to what has been said there.  It goes back to Ffrost v Stevenson, I think, which you quote.

MR GAGELER:   It does.

GUMMOW J:   Footnote 18.

MR GAGELER:   Yes.

GUMMOW J:   What is being talked about seems to be section 76(ii), is it not?

MR GAGELER:   Yes.

GUMMOW J:  

focus on the grants of federal jurisdiction in relation to the identified provisions –

Looks like 76(ii).

MR GAGELER:   Probably - 76(ii) or 77(iii).

GUMMOW J:   Yes.

MR GAGELER:   One of the two.

GUMMOW J:   Why are we not there talking about exclusive federal power?

MR GAGELER:   It is question 3, your Honour.

GUMMOW J:   Yes.

MR GAGELER:   And can I come to that.  It is an extremely good question.

GUMMOW J:   And I know I have said it, lots of other people have said it, but you just wonder how it started up.  It seems to have started up in Ffrost v Stevenson.

MR GAGELER:   Yes, if it is wrong ‑ ‑ ‑

GUMMOW J:   That has nothing to do with 109, just an absence of State power.

MR GAGELER:   I will come back to it.

GUMMOW J:   Yes, all right, but I think it is more than a snippet, that is all.

MR GAGELER:   The answer is almost yes.  Kable 189 CLR 51 at 143 and it is in your Honour’s Justice Gummow’s judgment. The point is that your Honour almost decided Kable on a section 109 point and that appears page 143 about point seven of the page where, under the heading “Inconsistency – s 109 of the Constitution” your Honour refers to sections 39 and 68 of the Judiciary Act and then says in the next paragraph:

A State law which, during the operation of an investment of federal jurisdiction in this way, would alter or impair the operation of the Judiciary Act by removing a condition or characteristic of a court such as the Supreme Court, which is essential to the investiture, is an attempt to alter or impair the operation of the federal law.  Accordingly, the State law is inconsistent with it and invalid. 

And your Honour instances Stock Motor Ploughs in the passage that we have taken your Honours to as authority for that.  Williams v Hursey picks up the same principle.  Of course, when your Honour is referring to the State law removing a condition or characteristic of the Court, your Honour must be looking to questions of substance and degree in the operation of the State law.  Indeed, your Honour used that sort of language at the top of page 134 in referring to the operation of the State law.

KIRBY J:   I do not remember in any of the Kable series anybody raising this argument, that is to say, in the five or six unsuccessful attempts to resuscitate Kable since then, most recently in Fardon and the other one.

MR GAGELER:   I do not know what that says, your Honour, but ‑ ‑ ‑

KIRBY J:   Well, it says that counsel did not think there were any legs in it.  Maybe they had other things to ‑ ‑ ‑

MR GAGELER:   Your Honour might recall, this case had a history as well.  One gets focused on particular aspects of doctrine and perhaps does not survey the field sufficiently.  Your Honours, that is really what we wanted to say about the first question. 

The second of the three questions asked by the Court through the Registrar is, if section 109 is engaged, does the application of section 109 put to one side any difficulties of severance under interpretation legislation that would arise if there was invalidity on other bases? Our answer is yes, and to elaborate on that answer, the effect of section 109 is that the State law is rendered invalid in the sense of being inoperative by virtue of section 109 itself to the extent of the inconsistency with Commonwealth law. The State law is not, by virtue of section 109, ultra vires. That means it is not taken beyond the legislative power of the Commonwealth; it is rather held in a state of suspended animation. The best authority for that is Butler v Attorney General for the State of Victoria (1961) 106 CLR 268, particularly in the judgment of Sir Wilfred Fullagar at page 274, but the most colourful statement of the principle your Honours will find in the judgment of Justice Higgins in Ex Parte Daniell (1920) 28 CLR 23 at 33, where his Honour said:

the State law . . . still lives, subject to the pressure of the Federal Act – like Jack‑in‑the‑box under his lid. 

The consequence of that operation of section 109, if your Honours turn to section 31 of the State Interpretation Act your Honours will see that section 31 really in its terms has no application, because section 31 is concerned with the circumstances where an Act or instrument must be construed as operating ‑ ‑ ‑

GUMMOW J:   It is talking about power.  It is talking about excessive legislative powers.

MR GAGELER:   Absolutely. It is just not addressed at all to the circumstance of the operation of section 109 and, as we see it, nor could it be. Nor could it be, because it is concerned with the intention to be imputed to the State Parliament or State authority exercising delegated legislation at the time of enacting the Act or promulgating the relevant instrument. Section 109 can result in invalidity of State law from time to time as Commonwealth laws are enacted and repealed or as they operate by reference to particular circumstances, as is illustrated by Butler’s Case itself.

So, in our respectful submission, section 31 (a) does not speak to section 109 inconsistency, and (b) probably could not speak to section 109 inconsistency. The extent of invalidity is something that is dealt with in the terms of section 109 itself. So that when one comes to section 109 invalidity, the only question that arises is one entirely under section 109 itself. It takes the State law as it is written and asks, relevantly, how much of that State law is inconsistent with a Commonwealth law? In the present context, how much of the regulation detracts from or impairs the operation of the Commonwealth laws? In our submission, the answer here is the whole.

GUMMOW J:   Can you say that again?  The whole?

MR GAGELER:   The whole. That is, one does not, in the context of section 109, read in anything at all or read down. That is an exercise in interpretation that comes from the State Interpretation Act.  You put that entirely to one side.

GUMMOW J:   It does say “to the extent”.

MR GAGELER:   Exactly.  But if one has, as one has here in regulation ‑ ‑ ‑

GUMMOW J:   You want to say that 109 brings down the whole of the State’s legislation.

MR GAGELER:   Not the entire system, your Honour.

GUMMOW J:   When I say “bring down”, it puts it into Justice Higgins’ box.  The whole of it.

MR GAGELER:   Yes. It pushes the prohibition. There is a prohibition in regulation 139. What section 109 does not do is allow you to engage in the interpretative exercise of reading down that section 15A of the Acts Interpretation Act or section 31 of the Interpretation Act might otherwise allow you to do. You take the law as it is written, there is regulation 139. You can ask, “Is it any particular part of regulation 139 that clashes with the Commonwealth law?”, and, if so, then it is just that part that is inconsistent. But if it is the regulation in the terms in which it is written that clashes, then it gets pushed into the box, yes. There is very little authority on this point of the operation of section 109.

GUMMOW J:   That is right.

MR GAGELER:   But there is something said again in Sir Owen Dixon’s judgment, your Honours will have seen, in Wenn v Attorney‑General for Victoria (1948) 77 CLR 84 at 122. I will just read half a sentence at about point 3 of the page ‑ ‑ ‑

GUMMOW J:   Page?

MR GAGELER:   Page 122, the last page in the judgment, where his Honour says at about point 3 of the page:

The same thing is put in another way by saying that every part of a completely interdependent and inseparable legislative provision must fall within “the extent of the inconsistency.”

The point being made in Wenn is that there may well be other sections of the same Act that would fall because they cannot stand by themselves.  But here we have one relevant operative provision, that is, regulation 139, and, in our submission, regulation 139 must be taken as a whole, and it gets pushed back into the box.

Before leaving the second question, perhaps because it is implicit in it, can I say something about the difficulties of severance that we say would arise in any event if one were to apply section 31 of the Interpretation Act. Now, New South Wales’ submissions say, well, the problem would be solved – and they are talking about the section 109 problem, but they are probably also seeking to say the Chapter III problem – would be solved by reading into the definition in regulation 138 the words “other than in proceedings in federal jurisdiction”.

The difficulty with that proposal that we see is twofold.  One is, even if you read down the regulation in that way, it would, in our submission, still be invalid, that is, if the definition were read down, it would still make it an offence for Mr Whyburn to publish an advertisement saying, “Robert Whyburn can help you with a personal injury claim”, which is the substance of one of the advertisements that your Honours will see in the special case book.  That prohibition would still have the practical effect of impeding the bringing of proceedings in federal jurisdiction, and that is because you just cannot know, at the time at which the prohibition speaks, the myriad of circumstances that might affect the existence or non‑existence of federal jurisdiction.

That is point one, reading it down would not help.  But point two is, we do not see that one can, as an exercise of interpretation, which after all is all that section 31 of the Interpretation Act authorises, read it down in the exercise of judicial power, and that is because the fairly glib statement “other than in proceedings in federal jurisdiction” really masks what is in truth a whole series of exceptions.  When you say that, what you mean is, “other than in proceedings where there is a claim under a Commonwealth law or in which there is a cross‑claim or a defence under Commonwealth law, other than in proceedings in which the defendant is the Commonwealth, other than in proceedings in which the defendant is another State”, et cetera.

GLEESON CJ:   But, by hypothesis, there are no proceedings when this regulation bites.

MR GAGELER:   By hypothesis that is correct, but what one is looking at – and I do not want to go back over the arguments already put – but the intended practical operational substantive effect on the ability of a person to communicate for the purposes of commencing such procedures, we say there is that practical impediment.  Once one has created those exceptions and you add those to the exceptions that are already enumerated in regulation 140A, you have substantially rewritten the regulation and you have substantially produced a regulation that is so filleted in its operation that it can hardly answer the description that one sees set out in the explanatory note - your Honours need not turn to it – in the special case book, volume 2, page 451 of a regulation that is intended to broaden what has been the current restrictions and to prohibit the publication of an advertisement that makes any reference to personal injury.  You produce something that is a long way from what the legislature avowedly intended.

Your Honours, the third question is the most difficult.  It is in three parts.  If we can paraphrase ‑ ‑ ‑

KIRBY J:   That is even harder than Turandot.

MR GAGELER:   Pardon, your Honour?

HAYNE J:   Just before you go on with this third question, the reamplitude of the result that you attribute to 109, not simply in its operation in respect of this particular regulation, may perhaps reflect on the content that you are giving to 109.  If in particular, as I understand your submission to be, practical effect is perhaps to be judged as non‑trivial negative impact, it is then leading to a very large consequence because of the difficulties of reading down that you identify.  Does that reflect back on the content of the proposition from which you are beginning?

MR GAGELER:   No, it demonstrates that there may be questions of degree and judgment involved in its application, as there was in Stock Motor Ploughs v Forsyth where ‑ ‑ ‑

HAYNE J:   And against what standard, by what criterion, are those questions of judgment and degree being assessed?

MR GAGELER:   Stated at an abstract level, I would not seek to take the formulation beyond the Marshall/Dixon Telstra v Worthing formulation deliberately, but in the application ‑ ‑ ‑

HAYNE J:   Because those are statements which can be viewed as statements of conclusion which, where you are concerned with practical effect, do not identify the process of reasoning that has got you to the conclusion, “alter, impair, detract”, et cetera.

MR GAGELER:   I would almost agree with your Honour.

HAYNE J:   Almost, but not quite, Mr Gageler.

MR GAGELER:   They identify what one is looking for and one may find it in different ways ‑ ‑ ‑

HAYNE J:   It is becoming Justice Douglas’ territory at that point.

MR GAGELER:   Well Justice Douglas was the author of the judgment upon which we rely in the United States Supreme Court ‑ ‑ ‑

HAYNE J:   I was thinking of another field of discourse, but there we are.

MR GAGELER:   Pardon, your Honour?

HAYNE J:   I was thinking of another field of discourse, in pornography.

MR GAGELER:   Yes, I know exactly what your Honour is referring to and it is purely coincidental that his Honour was the author of Nash.

KIRBY J:   Justice Douglas wrote some very good opinions in the Supreme Court of the United States.

MR GAGELER:   Nash is one of them, your Honour.

KIRBY J:   Yes, and Dennis in the United States, he dissented on the Communist Party Smith Act in a very powerful opinion which has been vindicated by time.

MR GAGELER:   Yes, he wrote compellingly. Your Honours, the third question is in three parts. The first is, what is the implication from Chapter III upon which we rely. The second is, do we rely on the exclusive nature of Commonwealth legislative power to confer federal jurisdiction, and then the third which flows from the second, I think, is what, if any, implication does the exclusive nature of Commonwealth legislative power to confer federal jurisdiction have for the argument based on section 109?

As to the implication from Chapter III upon which we rely, we have a primary or broader implication and we have a secondary or narrower implication.  The primary or broader implication is the implication in the terms in which I previously formulated it at pages 49 to 50 of the transcript of 5 October, and again, at page 67 of the transcript of 6 October, and substantially it amounts to this, that there is implicit in the terms and structure of Chapter III, sections 73, 75, 76 and 77 in particular, that the people of the Commonwealth will have the capacity or freedom to communicate so as to ascertain their legal rights and assert those legal rights before courts, at least courts exercising federal jurisdiction.

Now, from that implication we submit that it flows that any law, State or Commonwealth, which in its practical or legal operation burdens that freedom in a manner or to an extent that is greater than is demonstrably necessary in the sense of appropriate and adapted for the preservation of an ordered society or the resolution of legitimate claims of citizens in such a society, is invalid.  That implication, that broader implication is ‑ ‑ ‑

GUMMOW J:   Which governs both the Commonwealth and the State.

MR GAGELER:   That is the point, it governs both the Commonwealth and the States, and it derives as much from sections 73 and 75 as it does from 76 and 77. 

There is a secondary or narrower implication, which is there in our submissions in reply of 30 September in paragraph 7, and is there in our further submissions of 20 October, paragraph 22, the paragraph your Honour Justice Gummow took me to a little earlier.  It is an implication that is concerned with a limitation on, or absence of, specifically State power, and that narrower implication does rely, in part, on the exclusive nature of the Commonwealth legislative power in respect of Chapter III.

GUMMOW J:   Do you then have to say that the incidental power, both the general incidental power and the 51(xxxix) incidental power, in its relation to Chapter III, likewise are exclusive?

MR GAGELER:   No, I do not.  Your Honour, the way  ‑ ‑ ‑

GUMMOW J:   It strikes me that a lot of these Judiciary Act provisions are really 51(xxxix) in their source.

MR GAGELER:   Yes, which is a concurrent ‑ ‑ ‑

GUMMOW J:   Yes, which is concurrent.  How does that all work out? For example, the licensing of lawyers ‑ ‑ ‑

MR GAGELER:   Yes.  In Federal jurisdiction?

GUMMOW J:   Yes.

MR GAGELER:   One would think that the positive Commonwealth power to do it would be in 51(xxxix). That does not necessarily mean that the negative limitation on State power needs to come from section 51(xxxix). Obviously, it does not. It can come more broadly from Chapter III or from the conferral of federal jurisdiction pursuant to section 76(iii).

GUMMOW J:   I think the Solicitor for New South Wales agreed earlier that New South Wales could not pass a law saying who could and who could not appear in federal jurisdiction.

MR GAGELER:   Yes.

GUMMOW J:   Now, the question is, why not?  Why do you say they could not?

MR GAGELER:   Your Honours have addressed precisely this sort of question in ASIC v Edensor  ‑ ‑ ‑

GUMMOW J:   That is through 109.

MR GAGELER:   That is through 109.  Well, partly through 109.  If I can state the principle and then take your Honours ‑ ‑ ‑

GUMMOW J:   It is put in two ways.  It is put in terms of repugnancy and it is put in terms of 109 ‑ ‑ ‑

MR GAGELER:   Exactly.

GUMMOW J:     ‑ ‑ ‑ but it is not further analysed.

MR GAGELER:   That is all true.

GUMMOW J:   We were waiting for another case, and for your arrival. 

MR GAGELER:   As I read it, your Honours put it in terms of repugnancy – I will draw back, I will say the principle, as I understand it, your Honours, and then I will come to the application ‑ ‑ ‑

GUMMOW J:   Repugnancy to Chapter III and 109.

MR GAGELER:   One has a conferral of federal jurisdiction which, in accordance with the passages from the Boilermakers’ Case  ‑ ‑ ‑

GUMMOW J:   Which is an exercise of 76.

MR GAGELER:   Yes, well, it may be. One has federal jurisdiction  ‑ ‑ ‑

GUMMOW J:   Parliament may make laws.

MR GAGELER:   ‑ ‑ ‑ that carries with it all that is necessary for its effective exercise. That is the nature of the thing that is given. Now, how is that thing given? It is given either by virtue of the Constitution itself, section 75, or it is given by laws enacted under 76 or 77. Now, a State law that seeks to – if you like, to use the same formulation – alter, detract from, or impair the effective exercise of that federal jurisdiction is repugnant to the jurisdiction so conferred. Now, what is the nature of the invalidity that that repugnancy gives rise to? Well, as we see it, as we see what your Honours were saying, it is that in relation to the section 75 jurisdiction there is repugnancy to the Constitution itself, because it is the Constitution itself that confers the jurisdiction.

In relation to the section 76 and 77 jurisdiction there is repugnancy, if you like, or in constitutional terms, inconsistency with the law enacted under section 76 or 77 that confers the jurisdiction. We are content to live with that analysis. It is really the analysis that is in P v P and it is the analysis that we see in Edensor and it is also picked up in British American Tobacco.

GUMMOW J:   No, but it is an analysis that does not focus on section 51(xxxix) at any stage.  It did not need to because we are out towards the boundaries here with this case, I think.

MR GAGELER:   We do not see it as being necessary, your Honour, to get to section 51(xxxix).

GUMMOW J:   But it does have a consequence because of the different nature of reading down that you have been explaining to us.

MR GAGELER:   Yes.  The alternative, and I am happy enough to embrace it, it is just that we do not ‑ ‑ ‑

GUMMOW J:   We need to know whether we are in or out of the New South Wales Interpretation Act if we are going to find in your favour.

MR GAGELER:   Yes.

GUMMOW J:   I know you have told us that it was imprudent to address on matters of severance and so on.

MR GAGELER:   I have broken that rule already.

GLEESON CJ:   There is, is there not, a State law that says you cannot give legal advice for reward unless you are a registered legal practitioner, whatever is exactly the expression.  In other words, as I understand it, there is no prohibition on anybody giving legal advice to anybody else but the prohibition is on giving it for a fee.

MR GAGELER:   Yes.

GLEESON CJ:   That law is not subject to any qualification in relation to federal jurisdiction, is it?

MR GAGELER:   No.  The answer is no, it is not.  It is in the Legal Practitioners Act and it is not subject to any qualification of federal jurisdiction.

GLEESON CJ:   Do you suggest that ‑ ‑ ‑

MR GAGELER:   That law is invalid?

GLEESON CJ:   Or inoperative in relation to giving legal advice in relation to matters of federal jurisdiction?

MR GAGELER:   No.  There are the two implications and I think I went through the broader implication on the previous occasion and I will not go back to that, but on this narrower implication the question would be whether such a law in its substantive operation alters, detracts from or impairs the operation of the effective exercise of rights in federal jurisdiction or the effective exercise of federal jurisdiction.

That law, your Honour, which is in the Legal Practitioners Act is one that is not stated as an absolute prohibition but it is a registration scheme and you cannot be giving legal advice for reward unless you are registered and to be registered you have to be legally qualified.  On analysis, such a prohibition within such a legislative scheme would not, in our respectful submission, alter detract from or impair, indeed would enhance the effective exercise, effective jurisdiction.

GUMMOW J:   Does that involve notions of reasonable regulation?

MR GAGELER:   Akin to reasonable regulation but, your Honour, it is really not the same analysis.  I cannot pretend that it is hermetically sealed from such analysis but it is not the same analysis.  I do not think I have fully come to grips with your Honour Justice Gummow’s question.

GUMMOW J:   We have to decide whether this law is invalid or inoperative?

MR GAGELER:   Yes.

GUMMOW J:   That depends on whether we go through repugnant to Chapter III in some way and, therefore, outside the power, or whether we go through section 109?

MR GAGELER:   Yes.  Your Honours would go, I think, logically ‑ ‑ ‑

GUMMOW J:   We cannot say you are happy with either.  I am sure you are.

MR GAGELER:   I will deal with it. Logically, your Honours have to go first to the constitutional implication, and if you find that the State law passes muster under the constitutional implication, your Honours would find a valid State law which – I mean, a non‑ultra vires State law, a law within the competence of the State Parliament, which may or may not then be inconsistent with Commonwealth laws, so your Honours would, as a matter of, I think, constitutional logic, deal with the constitutional implication first, but your Honours may find it convenient to deal with section 109 because, on any view, it applies.

HAYNE J:   But the existence and ambit of any implication is affected by consideration of the exclusivity of Commonwealth power, is it not?

MR GAGELER:   Not greatly, your Honour.  As we said, a State law, which to use the ASIC v Edensor terminology, stultifies or using other terminology, alters, detracts from or impairs the exercise of federal jurisdiction, would be invalid on two possible bases. One is that it is inconsistent with the constitutional conferral of that jurisdiction, either directly by section 75 in the case of this Court, or under sections 76 or 77 through the operation of a Commonwealth law. Really, that is the way in which it has been analysed.

I am putting this badly because it really is very difficult to encapsulate, but it would be possible, but contrary to a whole line of authority, to say that the inconsistency in the case of a conferral of jurisdiction on a State court, arises not between the State law and the Commonwealth law conferring that jurisdiction, but between the State law and section 77(iii) of the Constitution itself. That would be really inconsistent with Foster v Stevenson, Felton v Mulligan and a great line of cases.  We are opening up enough.  We do not see it as necessary to seek to open up that line of cases as well.  Your Honours, I have reached the end of my allotted time.

GLEESON CJ:   Can I just ask you a formal question about a formal matter before you conclude?  Why does the further amended statement of claim in paragraph 35(e) refer to sections 38J and 38JA of the Legal Profession Act?  I thought they were irrelevant because I thought they expanded the regulation‑making power after the making of the regulations with which we are concerned, and I thought we agreed on the last occasion that there was no challenge to the regulations on the basis that they were beyond the ambit of section 216.

MR GAGELER:   Your Honour is absolutely correct about our agreement and about the scope of our challenge, but I am not sure ‑ ‑ ‑

GLEESON CJ:   Am I not right in thinking that the regulations with which we were concerned were made before the amendments to sections 38J and section 38JA which expanded the regulation‑making power?

MR GAGELER:   That is correct, yes.

GLEESON CJ:   So can we ignore the reference to sections 38J and 38JA?

MR GAGELER:   Yes.

GLEESON CJ:   Thank you.  Yes, Mr Basten.

MR BASTEN:   Your Honours, I have a footnote or two to add to my learned friend’s answers to questions 1 and 2. Could I start by saying something about question 3. We start with the proposition that constitutional limitations, whether arising from the express terms of section 92 or from constraints in relation to the exercise of judicial power imposed by Chapter III or, indeed, constraints necessarily implied from those sources, will, of course, limit both the legislative powers of the Commonwealth and State Parliaments. In relation to Federal Courts created under section 71 of the Constitution, the Commonwealth, we say, will have exclusive legislative power. Similarly, in relation to the conferral of federal jurisdiction under sections 75, 76 and 77, it follows from what this Court said in Wakim that the power of the Commonwealth Parliament we understand to be exclusive. 

To the extent that Part 14 of the regulations falls within the zone of exclusive federal legislative power, the State regulation must be invalid.  If that conclusion is correct, no issue necessarily arises in the present case as to the scope either of express constitutional protections or implied protections.  We understand that it may have been in part because the argument on the previous occasion focused on such area of constitutional protection exclusively that the Court sought submissions in relation to what really may be seen as an anterior question, namely, whether the power to legislate under Chapter III is really an exclusive power of the Commonwealth.

Your Honours, might I start in relation to the first proposition with a passage in your Honour Justice McHugh’s judgment in Wakim (1999) 198 CLR 511 in a passage which flows through paragraphs 59 through to 61. At the bottom of page 558 in paragraph 60, three lines up, your Honour noted that “The creation of a federal court says nothing about its jurisdiction”, and the conferral of jurisdiction must arise as a result of the exercise of legislative power – this is at the top of 559 – “to be found in ss 75, 76 and 77 of the Constitution”. Back at paragraph 59, in the first sentence, your Honour had noted that the negative implications arising from Chapter III of the Constitution mean that no State can invest jurisdiction in the federal courts. That is the conclusion – and I jump a little – reached at the beginning of paragraph 61.

There is a passage to similar effect in the joint judgment of your Honours Justices Gummow and Hayne, in which your Honour the Chief Justice agreed, at paragraph 111 at the foot of page 575 in the report, to the effect – and I need only take the last line:

that no other polity –

that is, other than the Commonwealth –

can –

a matter of power –

confer jurisdiction on a federal court.

We say that relevantly for present purposes the content of the federal jurisdiction encompasses matters arising under any laws made by the Parliament within 76(ii) and it follows that only the Commonwealth can legislate with respect to jurisdiction concerning the resolution of disputes arising under Commonwealth laws such as those which we identify in our written submissions which include the Social Security Act and the Health and Other Services legislation.

In the Boilermakers’ Case 94 CLR, to which the Court’s question referred, and this is a point to which Mr Gageler has adverted, in particular at page 269 at point 5 in the page, the joint judgment of the Chief Justice and Justices McTiernan, Fullagar and Kitto noted:

Had there been no Chap. III in the Constitution it may be supposed that some at least of the legislative powers would have been construed as extending to the creation of courts with jurisdictions appropriate to the subject matter of the power. This could hardly have been otherwise with the powers in respect of bankruptcy and insolvency . . . and with respect to divorce and matrimonial causes . . . The legislature would then have been under no limitations as to the tribunals to be set up or the tenure of the judicial officers by whom they might be constituted.

And their Honours go on to note that Chapter III imposes relevantly constraints on the exercise of such a power sourced in section 51, but the source of power in section 51 in relation to matters arising under a Commonwealth law will provide sufficient support for the Commonwealth to establish a system of tribunals to resolve disputes arising in relation to federal rights and obligations and as Boilermakers notes, it is only when the resolution of the dispute requires the exercise of judicial power that the constraints imposed by Chapter III operate. 

GUMMOW J:   Now this statement at the top of 270 that 51(xxxix) “must operate through or in conformity with Chap. III” rather suggests it is exclusive.

MR BASTEN:   Yes, I was going to come to that.  There is less reference perhaps to 51(xxxix) now than there was in the past and one accepts that most of these powers have their own implied power.  If that were the case then, of course, any exclusive power found in Chapter III would be an exclusive implied incidental power and we would not think that 51(xxxix) has any different effect when it is operating, with respect, as it expressly purports to do in relation to Chapter III powers.  So, we might answer your Honour’s question slightly differently to the answer given by our learned friends.

But subject to the questions of constitutional limitation, the exercise of the powers of the Parliament under section 71 establishing, for example, the Federal Court and under section 76(ii) vesting jurisdiction in that Court in relation to matters arising under Commonwealth laws must extend to laws with respect to the operation of the Court. On the last occasion your Honour the Chief Justice asked about three matters, namely, the establishment of Court filing fees, the regulation of appearances before the Court and the conferral of a monopoly on the legal profession with respect to representation.

We would say that all of those matters would fall within the exclusive power of the Commonwealth when dealing with a federal court exercising federal jurisdiction, and it may not be necessary to reach 51(xxxix) in order to reach that conclusion.  There is a real and sufficient connection with the powers to create courts and confer jurisdiction.

A law which requires people to represent themselves in court or appear by a legal practitioner not only falls within the power conferred on the Parliament under Chapter III, but also has the effect of constraining the ability of an individual to assert his or her rights under the Commonwealth law.  There is no doubt that the Parliament could so legislate, constitutional protections aside. 

The question for present purposes is whether the State can legislate for the purpose and with the intended effect of limiting the ability of a citizen to pursue his or her federal rights, or seeking to clarify the extent of an obligation arising under a federal law.  At least in theory, we would say the answer to that question may differ, depending on whether one is dealing with an exclusive Commonwealth power or a concurrent power.  In the latter case, the answer would in principle depend upon whether the Commonwealth had covered the field, not merely of creating rights and obligations, but providing a mechanism for their enforcement.

But the distinction may have little practical consequence, except in the manner in which the court approaches the question as noted above in relation to the questions that were asked this morning.  For example, in relation to an obligation to repay a social security benefit resulting from the receipt of a compensation payment, the Parliament has legislated to create the benefit, impose the obligation, provide for an administrative decision‑making process, including by way of review, in matters of controversy, and, in relation to the legal limits of the power, it has conferred on the Federal Court jurisdiction to determine any dispute.

As may be appreciated, that example is apposite.  It is one which is likely to arise in many, if not all, damages claims where there is any significant level of disability, for reasons which we have set out in our written submissions.  It is thus clear that the Commonwealth has legislated in a manner which, perhaps as a mixture of exclusive and concurrent power, covers the field of the creation of rights and resolution of disputes in relation to them.  This is a field into which the State cannot validly intrude.

The State’s regulation does intrude into this field because it has three elements.  Part of the area of legal rights affected by the regulation includes the federal rights, in a sense which is neither unintended nor trivial.  Secondly, its purpose is to affect and limit the circumstances in which people with particular kinds of problems will have contact with legal practitioners, being those persons who, in accordance with federal law, provide important services with respect to federal courts, namely, legal practitioners.  We see the monopoly given in relation to representation as flowing from the Judiciary Act and not from anything in State law.

Thirdly, the effect of the regulation is to diminish the ability of persons in New South Wales to enjoy the benefits given under the Commonwealth laws, both substantive and procedural.  So that the answer that we would give to the third question raised by the Court in the two parts, A and B, which are referred to in the Registrar’s letter, must be, we think, in these terms.  Firstly, the restriction or implication confining State legislative power is derived not solely from Chapter III, but from a combination of Chapter III and the Commonwealth law creating relevant rights.  It is that which a State law cannot diminish, impair or fetter the enjoyment of, where the right is conferred under the federal law, including by placing limits on the capacity of persons to obtain assistance in litigating disputes with respect to the operation of such a right or obligation.

In relation to the second part of the question, the answer is that part of the constraint on State power flows from the fact that the Commonwealth has exclusive power to make laws to give effect to so much of Chapter III, as involves the creation of courts, the investiture of federal jurisdiction, and all the authority which is necessary to make effective those courts and the exercise of federal jurisdiction.

In a sense, your Honours, the point may be illustrated by a matter raised on the last occasion.  If the continued enforcement of rights to compensation is considered by the State to be, in a policy sense, untenable, at least as far as State law goes, it can restrict, limit or abolish the rights to compensation.  Of course, it could not do any of those things in relation to any right arising under federal law.  It should not be surprising, we would say, that whilst the State can validly take steps to limit the enforcement of rights arising under State law, it cannot do the same in relation to rights arising under federal law.

Your Honours, may I then turn back to the first question asked, to which the answer logically flows from what, I think we have just been saying.  Perhaps I should deal first with the second question, the question of severance.  I am sorry to take this out of order.  The point that we seek to make in our written submissions in relation to severance is that the reason why there can be no severance is that the exercise of State and federal jurisdiction, when considered in the abstract, is inextricably intertwined, the one with the other.  The defendant, the State, at paragraph 3.5 of its submissions, seeks to take issue with our argument in that regard by saying that a dispute about the operation of some Commonwealth law does not mean that a claim for damages for an injury becomes a claim in federal jurisdiction.  Your Honours, that was not the way in which we sought to put the argument.

GUMMOW J:   So this is 3.2 of the New South Wales.

MR BASTEN:   Paragraph 3.5, your Honour, of New South Wales’ submission where they deal with our severance argument.

GUMMOW J:   Thank you.

MR BASTEN:   They make the point at about point 8 on the page, “It is necessary to distinguish advice sought and legal proceedings brought in relation to personal injury and the tax treatment and other consequences under Commonwealth laws of any compensation awarded”.  They make the same point about the material on which we sought to rely in that part of our submissions of 26 October, which deals with severance, at paragraphs 8 and following.  The point that we sought to make may be illustrated by reference to the bundle of statutory material which we refer to in the written submissions and which has been provided to the Court.  Might I briefly indicate how the issue arises. 

If your Honours have that bundle, at page 2 there is an extract from the Social Security Act section 17(1), which identifies, by definition “compensation” and “compensation affected payment”.  “Compensation” is a definition I will come to.  “Compensation affected payment” covers virtually any welfare benefit provided under the Act which can arise in relation to an injury or some loss of ability to earn income.  At page 4, 17(2) is in broad terms and it defines “compensation” as meaning:

(a)      a payment of damages; or

(b)      a payment under a scheme of insurance or compensation . . . 

(c)      a payment (with or without admission of liability) in settlement of a claim for damages –

Then at the end, at the top of page 5, the payment must be one:

that is made wholly or partly in respect of lost earnings or lost capacity to earn resulting from personal injury.

Those are the two key terms.  If I can do this briefly, at page 9 your Honours will see section 1166 of the Social Security Act, which says:

(1)      If: 

(a)      a person receives or claims a compensation affected payment; and

(b)      the person or the person’s partner is, or, in the Secretary’s opinion, may be, entitled to compensation; and

(c)      the person or the partner: 

(i)       has taken no action to claim or obtain the compensation; or

(ii)      has taken no action that the Secretary considers reasonable to claim or obtain the compensation;

the Secretary may require the person or the partner to take the action specified by the Secretary.

That is obviously an issue which arises in relation to that aspect of a possible claim before one gets to court.

GUMMOW J:   I thought there was some subrogation provision in here as well.

MR BASTEN:   Yes.  The provisions at page 12 and following in effect provide that where compensation is claimed, then a compensation affected payment may be recovered from the person.  Section 1178(1):

the Secretary may, by written notice to the person, determine that the person is liable to pay –

an amount to the Commonwealth and may give a notice.  Section 1179 identifies that:

The recoverable amount under this section is equal to the smaller of the following amounts:

(a)      the compensation part of the lump sum compensation payment;

(b)      the sum of the payments of the compensation affected payment –

That is the benefit.  And, your Honours, there are similar subrogation provisions under the Health and Other Services (Compensation) Act 1995, which are set out at pages 15 and following. I do not think I need take your Honour to those materials.

Our point was rather that the effect of such provisions is to result in an inextricable intertwining of the aspects of federal and State law which are inevitably involved in giving any advice or assistance to any person who is considering a claim for compensation for personal injury which is the subject matter of Part 14 of the Regulation.

It is for that reason, your Honours, in addition to the matters raised by Mr Gageler that we say that the regulation fails.  It does so in a way which makes it clear why the investiture of federal jurisdiction in a State court has, in effect, necessitated the imposition by way of the Judiciary Act of federal laws prescribing what laws and rules and procedures State courts must follow in giving effect to federal jurisdiction.  In other words, as a practical matter, the autochthonous expedient in relation to the courts and the combined operation of State and federal laws before getting to court mean that the distinctions sought to be drawn cannot be drawn.

The other footnote that I sought to make to my friend’s answers relates to the first question. The qualification, and perhaps it is not a qualification of significance which we would understand to apply in relation to the answer he gave, is simply that section 109 can operate in different ways in a range of different circumstances. A different issue may arise where a Commonwealth law establishes rights from one which confers powers on a government authority or otherwise deals with a particular circumstance or situation.

So that the discussion in the Kakariki Case, Victoria v Commonwealth, involved the conferral of concurrent powers by State and Commonwealth laws on two governments.  The powers which were considered in P v P involved the exercise of power by the federal Family Court in relation to an order approving a sterilisation operation, and the possibility that such an operation might, absent appropriate authority, be unlawful under a State law.

With respect, we would understand that there will inevitably be need for reference to the practical operation of a power in such cases.  When one comes to the question of rights conferred on individuals, the answer may be more complex, and we may not need to go for present purposes beyond the textual implications and the covering the field test which looks simply at the purpose and intent, firstly, of the Commonwealth law and then of the State law.

In answer to the question that your Honour Justice Kirby put to my learned friend, if one goes back to consider how the old advertising rules may have operated in relation to federal jurisdiction, that question does not give rise, as we would understand it, to any question of practical operation or inconsistency on that basis.  The answer will almost certainly flow from the application of a characterisation test.

What we have here, as we have said on more than one occasion, is not a law which generally purports to maintain the professional standards of lawyers.  We have a law which is, by its purpose and effect, directed at minimising litigation for personal injury, so that the answer may be derived from the way one characterises the law and it may be different in each case.

In response to your Honour the Chief Justice’s question about the giving of advice in relation to federal matters, the significance of that question, as we would apprehend it, is that the answer may require one to draw the line, which I have said perhaps may not need to be drawn in this case, between the exclusive and the concurrent powers of the

Commonwealth.  If it is correct to say that the giving of advice in relation to tax matters is within the concurrent powers of the Commonwealth, then presumably until the Commonwealth exercises a power, then a State law can operate validly in accordance with its terms, it will be a matter of whether the State law purports to cover giving of advice in relation to matters under federal law.  That would be a matter of construction.

In effect, the answer is demonstrated by what happened in Cunliffe’s Case where the Commonwealth, unusually perhaps but not uniquely, sought to create its own system of regulation of those who could give advice and assistance outside the courts in relation to migration matters. That exercise of power was upheld by this Court.  No question of the State exercising such a power arose.  Whether it was a matter which was within exclusive power or not might give rise to separate questions and the answer to those questions would not be identified by any form of balancing test.  It would rather be answered perhaps in the way that your Honours suggested in Paliflex 78 ALJR 87 at paragraph [24], namely one looks at the State law and simply asks this question: could this law have been properly made by the Commonwealth?

We say in relation to Part 14 that in relation to federal laws and federal rights, it is clearly a law which could have been made by the Commonwealth.  It is therefore not a law which can appropriately be made by the State.  If the Court pleases.

GLEESON CJ:   Thank you, Mr Basten.  Yes, Mr Solicitor.

MR SEXTON:   If the Court pleases.  We propose to address the questions, your Honours, in reverse order and then to say something more generally about the question of severance which we have already covered in our written submissions.  I realise that question 2 deals with severance but I was intending to deal with that question in two parts.  

Can I deal first with question 3. Our short answer to question 3 is that there is no implication to be applied in this case. We do not deny, of course, that the Constitution gives protection to litigation of federal claims but, in our submission, that protection would normally be made effective by section 109 of the Constitution. To that extent, we would say that it is not necessary to have an implication from Chapter III to achieve that end and certainly not to do so in these proceedings.

I should say that when we refer to protection from State legislation that would interfere in some way with the litigation of federal claims, we do not include in that legislation that would affect the substantive claim itself in the way that occurred in Bachrach, for example.  We are talking about legislation that was directed to the conduct of the litigation itself.

McHUGH J: Mr Solicitor, there is a difference between an implication derived from Chapter III and a law which is invalid under section 109, and it is this. If there is an implication to be drawn from Chapter III, in almost all cases it will withdraw power from the States, so that there is no law that can validly operate at the State level, whereas 109 always has a valid law but it is inoperative for the time being. That has been the doctrine ever since Carter v Egg Marketing Board and Wenn’s Case and other cases.  So there is a difference.

MR SEXTON:   There is, your Honour, and your Honour will appreciate why we put it in the way that we do for our part.  In Australian Capital Television Chief Justice Mason talked about the drawing of implications, structural or textual, and the notion of necessity. That is why we say in this case that if section 109 is effective to deal with the problem of interference with the conduct of federal claims, then in those circumstances one would not draw an implication from Chapter III.

McHUGH J:   But why not?  I mean, as Justice Gummow’s judgment in Kable demonstrates, you could have reached the same results through 109 or through Chapter III.  His Honour preferred, as did other members of the Court, to deal with the matter through Chapter III.

KIRBY J:   There are two gateways. I mean they are two different parts of the Constitution, and both of them bind. Both of them have to be given effect.

MR SEXTON:   Of course, except for this, your Honour, that our proposition is that, if section 109 is effective in that way, it is not necessary to make the implication. By definition, the implication suggests that it is not to be found squarely in the text.

McHUGH J:   But 109 does not start to operate unless there is a Commonwealth law on the subject and a State law.

MR SEXTON:   That is so, your Honour, but there are a range of Commonwealth laws on the subject, and the question is then, if there were a State law that was argued to be inconsistent to detract from those rights, then would section 109 come into operation? In this case, my learned friends, of course, put their argument on the basis of section 109 as well. Your Honours, if the implications that my learned friends rely on were to be drawn from Chapter III, and to strike down the legislation in this case, it is hard to see why, in our submission, those implications - they vary slightly in the form in which my learned friends put them, would not also affect legislation that, for example, prohibited contingency fees in relation to litigation that prohibited the operation of legal practices from doctors’ surgeries, that denied the provision of legal aid in some or all civil claims.

It is also the example that was given by the Chief Justice of the limitation on legal practice for reward, which would, of course, in every State apply equally to matters that are in federal jurisdiction, so in our submission ‑ ‑ ‑

KIRBY J:   That may be so.  We may just have to deal with those matters, if they are brought to us.  It does not horrify me.

MR SEXTON:   I am not sure I was seeking to horrify ‑ ‑ ‑

KIRBY J:   Well, it sounded as though you were.  You were trying to frighten me off.

McHUGH J:   Yes, your argument seems to be a return to a doctrine of Justice Evatt’s, which I thought was exploded, the doctrine that he did run in Forsyth, and he ran it again in West’s Case, namely that the Commonwealth - the scope for invalidity under 109 is limited because most of the time the State and federal law will be dealing with different fields.  I mean there was a resurgence of that idea in Wardley’s Case where the Court said the anti – discrimination law of Victoria was in one field and the arbitration award was in another field.  A different result was reached in Goulden’s Case, where the Court said they were not in different fields, but ‑ ‑ ‑

MR SEXTON:   Your Honour accused me last time of trying to resurrect another exploded doctrine, but ‑ ‑ ‑

KIRBY J:   That is the role of a State Solicitor‑General.

GLEESON CJ:   Did you mix that metaphor yourself?

MR SEXTON:   I have to say, your Honour, it is not what we are trying to do. We accept the importance of section 109, but we just say that it is to deal with cases of genuine inconsistency.

CALLINAN J:   Genuine.

MR SEXTON:   Well, of course, I appreciate, your Honour, the value‑laden nature of the phrase, but we say that the cases on section 109 indicate the kinds of collisions between federal and State legislation that will result in the State legislation being invalidated.

McHUGH J:   But in Forsyth’s Case Justice Evatt denied – I think it was Forsyth – he denied that 109 gave a general supremacy to Commonwealth laws.  He gave it a narrower reading.  Sir Owen Dixon certainly did not agree with that in his speech at Harvard in 1955, and I do not think the cases support Justice Evatt’s view.

MR SEXTON:   We do not put forward that proposition, your Honour, but the reason I gave those examples was to illustrate the breadth, in a sense, of my learned friend’s argument, the ambit that it would have in its effect upon State legislation. Now, your Honour would say that if that is the result of a proper application of section 109, then that is the result, but we say that the one thing that can be taken into account is the remoteness, if one likes, from the Commonwealth legislation that is relied on. I will come to that in terms of section 109 here in relation to question 1.

McHUGH J:   It may often have effects that States do not like.  You first have to catch your Commonwealth law and see what it cooks, and then you cannot have a State law that impinges on the cooking. 

MR SEXTON:   Well, it is a long way from the main course here, we say, your Honour, really. 

McHUGH J:   But contingency fees seem to me to be a case in point.  I would have thought that a State law that forbade lawyers from taking contingency fees, and which, on its proper application, applied to federal lawsuits, would be in serious danger of invalidity.

KIRBY J:   Do you agree with that?

MR SEXTON:   No, I do not, your Honour, and I will come to section ‑ ‑ ‑

KIRBY J:   But in practical terms, in practical terms for the operation, the impingement would really interfere with the operation of the federal law, because we all know that that is the way in which ordinary citizens can get at the courts.

HAYNE J:   Well, not by contingency fees, I think.

MR SEXTON:   I am sorry, your Honour?

HAYNE J:   “No win, no fee”, yes.  Contingency fees where there is a percentage of verdict is perhaps a separate issue.

MR SEXTON:   “No win, no fee” is another aspect as well, your Honour.

KIRBY J:   Do you accept “No win, no fee” would ‑ ‑ ‑

MR SEXTON:   No, I do not, your Honour.  It comes under the question your Honour, but let just answer that now ‑ ‑ ‑

KIRBY J:   You are not accepting anything today.

MR SEXTON:   It is part of my job, your Honour. Looking at it in relation to section 109, that is where we say there is no federal right that is impaired. We look at the range of federal legislation about the conduct of federal claims and we say that that does not extend to a situation, prior to the formation of the lawyer client relationship, where you have legal advertising. Now, your Honour says that people will not be able ‑ ‑ ‑

KIRBY J:   But advertising is a huge, massive industry.  It is the way by which citizens get information and if this is the only way that many citizens can get information about how they go about pursuing their rights, in default of which they will not pursue those rights, why is that not an impingement if the legislation can be so construed, upon the effectiveness of the Federal law providing remedies? 

MR SEXTON:   Well, your Honour, the history indicates that in fact before there was any advertising of this kind people were able to pursue those claims.

KIRBY J:   Some were, maybe not enough.

McHUGH J:   Perhaps in New South Wales, I am not sure in other States.

MR SEXTON:   What your Honour raises is really the question of whether there is a collision between the federal and the State laws and we say that – and I had used the word in a sense remoteness before – at some point the establishment of rights under federal legislation and establishment of courts for people to pursue those rights in, at some stage that must stop extending to a more general field of regulation in the State sphere.

KIRBY J:   Well, I understand that but why should the Court not take you at face value.  Your declaration was that the purpose of this was to restrict or to diminish litigation.  Why do we not just take that at face value?  If the question is impairment and if your purpose was to reduce litigation, why is that not impairment?

MR SEXTON:   Because it is to reduce litigation that is achieved by drumming it up by way of advertising.  It is not to ‑ ‑ ‑

KIRBY J:   But if that is the pursuit of lawful entitlements, so what?  What is so wrong with that?

MR SEXTON:   There is nothing intrinsically wrong with it, your Honour, but the question is whether ‑ ‑ ‑

KIRBY J:   This is the market operating.  We are told now the magic hand of the market must operate everywhere.

MR SEXTON:   But the question is whether the rights that are created under those federal statutes are impaired by that form of litigation being perhaps made less likely.  That is the question.

GLEESON CJ:   When it is suggested that a State law impairs the operation of a federal law, how do you identify the operation of the federal law?

MR SEXTON:   Well, by its subject matter essentially, your Honour.  The laws on which my learned friends rely here largely establish rights that can then be pursued by way of litigation except for the Judiciary Act which establishes rights of audience and representation and perhaps the Federal Court Act which is – well perhaps it fits into that first category more broadly in any event.  So if that is their subject matter, the question is then how are those rights impaired by this particular piece of State legislation?  We say they are not impaired.

KIRBY J:   It is a clash of ideologies, really.  When Attorney‑General Murphy was there he saw the Trade Practices Act as an important piece of consumer protection that would be available to ordinary citizens to pursue their rights in federal jurisdiction and then later comes along this new ideology that there has been too much litigation, we have to cut that down and we are going to stop it by stopping the advertising.  Well, if the federal ideology is you have these rights and you should be able to pursue them, then a subsequent State law that impairs that is not going to be compatible with the federal theory.

MR SEXTON:   It is true, of course, to say, your Honour, it is not a complete answer to what your Honour says, that the majority – probably the great majority – of cases that would be affected by this particular State legislation are not within federal jurisdiction.

KIRBY J:   I accept that, but we are dealing with the case of a clash, and testing it by that proposition.

McHUGH J:   Do you concede that there will be an impingement of the federal rights if the practical operation of the State law is to modify conduct that would be pursued in pursuit of the federal law?

MR SEXTON:   I will come to practical operation.  I think the short answer is no, your Honour, but the only conduct that we know definitely, of course, will be modified is that of the persons advertising.  We cannot be certain about who would ‑ ‑ ‑

McHUGH J:   That concentrates on it from the point of view of the lawyer.  As I suggested on the last occasion, it may be that the proper way to look at it is to look at the effect on the citizen.

KIRBY J:   Governments, federal and State, do a tremendous amount of advertising, especially at certain times, to inform people of their rights so that they can go and pursue them and think what good governments they have.  What is wrong with the lawyers helping people to get to their rights by informing them of what they will do at certain costs?

MR SEXTON:   As I said, your Honour, there is nothing intrinsically wrong with it, but the question is whether the rights under that body of federal legislation involving the bringing of federal claims – whether that right is impaired by the absence of that advertising.

McHUGH J: You have to look at the practical operation. Let me give you an illustration from the section 92 jurisprudence, the North Eastern Dairy Case. New South Wales law said, “You cannot sell milk in this State unless you have a certificate of pasteurisation within this State”. Victorian milk had been pasteurised and it could not be pasteurised again. So the practical operation of the New South Wales law was to prevent milk that had been pasteurised in Victoria from being sold in New South Wales. The result was a breach of section 92 of the Constitution. Now, that is an illustration. The law did not touch it, in one sense, but its practical operation was to require something to be done that could not be done in pursuit of a constitutional right.

MR SEXTON:   I will say something about practical operation under question 1, but, your Honour, we say there is a difference there between 109 and sections like section 92. North Eastern Dairy was, it might be thought, a pretty transparent case, in terms of the legislation ‑ ‑ ‑

McHUGH J:   Well, I am not sure, until it was decided, it would not have been decided the other way a few years before, on the criterion of operation doctrine.

MR SEXTON:   I will come to practical operation, your Honour.  Can I say just one more thing, perhaps, about question 3, which is the notion of exclusive power.  We would say that it cannot be right to say that the regulation of advertising generally, or the regulation of advertising by lawyers, if one puts that more particularly, would be an area of exclusive Commonwealth power.  It may be that the subject matter of the State legislation here could be addressed by the Commonwealth, perhaps not entirely, we would say, in reliance on various powers, but we would say that it could never be said that it was an area of exclusive power, and therefore that the State legislation was struck down on that basis.

GUMMOW J:   Why?  Why not?

MR SEXTON:   It is a question, we say, there is no ‑ ‑ ‑

GUMMOW J:   Do you say that the provisions in the Judiciary Act about licensing lawyers, to put it crudely, are beyond power?

MR SEXTON:   No, your Honour.

GUMMOW J:   Merely an exercise of concurrent power?  That the States could do that?

MR SEXTON:   The licensing of lawyers in federal ‑ ‑ ‑

GUMMOW J:   Yes, in federal ‑ ‑ ‑

MR SEXTON:   No.  I suppose, if the Commonwealth had not legislated on that subject, there might be an argument, but in general we do not suggest that that is an area, of course, of State power.  To some extent, it is a question of subject matter, and that, of course, is something that is peculiarly part of the conduct of litigation in the federal courts, or, in the State courts, in federal jurisdiction.

GLEESON CJ:   There would not be any doubt, would there, of the power of the State to legislate for rights of appearance in State courts exercising federal jurisdiction?

MR SEXTON:   No, we would say not, your Honour.

GUMMOW J:   Why is it different?

MR SEXTON:   Why is it different from ‑ ‑ ‑

McHUGH J:   Supposing New South Wales said nobody can appear as counsel in the Supreme Court unless they hold a master of laws degree.  Why would that not be invalid insofar as it prevented legal practitioners from representing people in federal jurisdiction?

MR SEXTON:   It is State legislation?

McHUGH J:   Yes, general State legislation.  Supposing it said “You cannot appear in the Supreme Court of New South Wales for anybody unless you hold a Master of Laws degree from Sydney University”.

GLEESON CJ:   There already is a law like that, is there not?  It says you cannot appear in the Supreme Court of New South Wales unless you are a barrister or a solicitor.

MR SEXTON:   Yes, it is not quite in those ‑ ‑ ‑

McHUGH J:   The difference may be that qualification is not such a burden that impinges, but the illustration I have given might be in a different category.

MR SEXTON:   I am not suggesting it could be a burden.

GUMMOW J:   There was federal legislation passed when Mr Ellicott was Attorney, requiring State courts to admit practitioners from other States to appear in federal jurisdiction matters.  It was greatly resisted.  In matters of taxation and intellectual property, where there was a small group of specialist counsel from other States, it was difficult to get them into State courts that were exercising federal jurisdiction, so 55B and so forth were introduced.  No one ever said that was invalid.

MR SEXTON:   No, no, your Honour.  Your Honour, we do not contest that there is an area of no doubt exclusive power in relation to the ‑ ‑ ‑

GUMMOW J:   In other words, those sections hopped the dingo fence.

MR SEXTON:   Yes, your Honour, but in an area of exclusive power in relation to the Commonwealth for the conduct of litigation in relation to federal claims.  But the question is whether that would extend to advertising by lawyers, some of that advertising which would embrace claims in federal jurisdiction.  That is the leap in our submission.

GLEESON CJ:   But leave aside legislation that imposes some kind of discriminatory burden.  An argument against you in this case is that these regulations in one respect do that, but putting that aside, the rights of appearance in State courts by lawyers are governed by general laws that do not depend for their operation on whether the State courts are exercising federal jurisdiction, do they?

MR SEXTON:   That is so, your Honour.

GLEESON CJ:   Indeed, we see many examples of the fact that courts are exercising federal jurisdiction without anybody realising it.

MR SEXTON:   Well, the rights of appearance, for example, and audience are obviously to some extent governed by both the State system and by the Judiciary Act in relation to claims in federal jurisdiction.

GLEESON CJ:   Presumably that is an aspect of the federal system taking the State courts as it finds them.  The people who have the rights of appearance in State courts exercising federal jurisdiction, people who have that, being people who have that right of appearance in virtue of their position as officers of the State courts.

MR SEXTON:   Or it may indicate that as well that to some extent the Commonwealth’s powers in that area can be exercised by the States as well unless the Commonwealth chooses to override them by way of section 109.

GLEESON CJ:   Now, putting aside the position of self‑represented litigants, State courts operate on the basis that the only people who can appear before them are people who are officers of those courts, amenable to the standards and discipline and regulation of those courts.

MR SEXTON:   What that indicates, your Honours, in our submission, is that there is a concurrency about the two systems, and that if there is an area of exclusive power in relation to – and we do not suggest that there may not be an area in relation to the Commonwealth’s own system of courts and federal claims, that that area does not extend indefinitely, and certainly does not extend to the kind of legislation that is before the Court in this case.  That is why we refer, in a sense, to the distance between the activity that is regulated here and the subject matter of the various federal statutes that are relied upon.  Now, your Honours, that is what we have to say, essentially, in relation to question 3.

As to question 2, I can be brief.  We would say that the answer is probably yes, but that one would be likely to reach the same result by the application of, for example, section 31 of the Interpretation Act (NSW).  To some extent it is a question of the starting point in the exercise.  We would, however, draw attention to Justice Dixon’s remarks in Wenn.  My learned friend, Mr Gageler, has already taken your Honours to that case ‑ ‑ ‑

GUMMOW J:   Have they been repeated later in other cases?

MR SEXTON:   I do not think precisely in those terms, your Honour.

GUMMOW J:   The case law just seems a bit thin in that area of the phrase “to the extent that”.

MR SEXTON:   I think that is so, your Honour. 

GLEESON CJ:   How can you make your qualification, which is the basis of your proposed severance, work when the regulations operate at a point anterior to the exercise of any jurisdiction?  The qualification you propose, as I understand it, is to just write in the words “save in the exercise of federal jurisdiction” or something like that.  But this advertising activity goes on before anybody is exercising any jurisdiction.

MR SEXTON:   That is so, your Honour, but it would depend upon the terms of the advertisement.  If the advertisement, for example, referred to one or more types of federal claims, then it would fall within the exemption.  If not, not.  The fact that at some stage a general advertisement might later turn out to have attracted someone who might have a federal claim, in our submission, would not negate the proposition that we make in regard to severance.

In other words, this could be addressed by the terms of the advertisements.  Mr Gageler took your Honours to Wenn 77 CLR 84 and at page 122 we simply draw attention to the fact that Justice Dixon said there that:

The burden of establishing interdependence – 

between the consistent and the inconsistent provisions was perhaps “not a light one”.  To make the point that Justice Gummow has referred to the fact that the section produces invalidity to the extent of the inconsistency, and that in those circumstances one would be cautious, in our submission, about ‑ ‑ ‑

GUMMOW J:   Yes, but if you have the notion of covering the field, that then, as it were, gives some real reach to the Commonwealth extent.  It seems to expand what will be reached by the Commonwealth.

MR SEXTON:   We accept that, your Honour.  We do not see this as a covering the field case here.  I will come to 109, nor a case of a textual inconsistency.

GUMMOW J:   I know, but it is then said covering the field is a species of practical operation.

MR SEXTON:   Yes, I think that is so, your Honour, but ‑ ‑ ‑

GUMMOW J:   Once you get into practical operation, when you read Wenn, it becomes clear you are not going to save much, I think.  I may be wrong.

MR SEXTON:   I have to come to practical operation as well, but what is put against us here is really the impairment of a ‑ ‑ ‑

GUMMOW J:   Because you would have to reform the rival ideology in the State sphere, as it were.

MR SEXTON:   What is put against us here is the impairment of a right under federal statutes.  Whether that is another species or whether it is different from covering the field and textual inconsistency, that is the way it is put against us here.  We would say that, therefore, if it is not a covering the field case, any question of practical operation does not really arise.  I will come to that when we deal with question 1.  I was about to go to question 1, your Honours.  Is that a convenient time?

GLEESON CJ:   Yes.  We will adjourn until 2.15.

AT 12.45 PM LUNCHEON ADJOURNMENT

UPON RESUMING AT 2.18 PM:

GLEESON CJ:   Yes, Mr Solicitor. 

MR SEXTON:   If the Court pleases. Your Honours, I got to question one. Can I say by way of preference on section 109 generally that, in our submission, it is obvious that there is no direct or textual inconsistency in this case between the State legislation and any of the federal statutes that are nominated by the plaintiffs, and nor, we would say, could it be reasonably argued that any of those statutes cover the relevant field, which we would say here is advertising by lawyers.

On that point, we would say that both Goulden and Telstra v Worthing, to which my learned friends referred before lunch, are in effect cover the field cases, and that is why there was inconsistency between federal and State legislation in both of those cases.  There was a comprehensive federal regime which did not allow for the operation of the State legislation in question. 

In this case, one of the groups of statutes that my friends rely on, the Trade Practices Act and those other statutes that create rights of action, we would say deal with how those statutory causes of action are to be litigated. 

The relevant provisions of the Federal Court Act deal more generally with the same subject, and the relevant provisions of the Judiciary Act deal with the jurisdiction of federal courts, together with rights of audience and representation in those courts, which is why we say that there is no overlap between the respective subjects.

KIRBY J:   The problem is not audience, the problem is getting somebody there to ask for audience.

MR SEXTON:   Which the Judiciary Act, we say, does not deal with, your Honour.

KIRBY J:   Unless you get in there, you are not going to be asking for the opportunity to speak for someone.  Unless somebody can get a lawyer, you do not have any cause of action that you pursue.

MR SEXTON:   But your Honour’s question, in our submission, demonstrates why they are different subjects.

KIRBY J:   Well, it is a question of whether the practical effect, which is what we are supposed to be looking at, enlivens the field that the Judiciary Act occupies.

MR SEXTON:   Well, I was just about to come to practical effect and section 109. We say it is not the relevant test in relation to section 109, that it is not really apposite in the way that it is in those other areas, your Honour. I will come to that in two minutes, your Honour. The final, perhaps, head of section 109, if it be a separate head, is the question of impairing or detracting from the operation of the relevant federal statutes or impairing the enjoyment of a federal right established by them. We say that, again, it is only, in a sense, necessary to state the different subject matters to see that that has not occurred in this case.

My learned friend, Mr Gageler, referred to Nash v Florida as an example from the United States system, a very different kind of case, in our submission, where state benefits were cut off because the plaintiff in that case had brought a complaint under the federal system.  It would seem, we would say, to be an obvious example of where a federal right has been impaired by the action of the state in that case. 

In relation to practical effect, it is true that in the case of some of the constitutional guarantees, such as sections 90, 92, 117, 51(xxxi), a test of substance rather than form has been employed in order to avoid a circumvention of the guarantee by a drafting device.  That is referred to in Ha 189 CLR 465 at 498; I think my learned friend took your Honours to that passage. But, in our submission, this exercise is not relevant to section 109, which is engaged rather by a collision between legislation from two different polities. The question of whether there is in fact a collision is determined by an examination of the two legislative provisions to see whether they are inconsistent on their face or by reason of the area that the Commonwealth legislation intends to cover.

On the question of practical effects, it is to be noted, we would say, that in a number of cases practical effect did obviously not seem to be the test that was used in relation to section 109. Justice McHugh referred before lunch to Airlines of New South Wales and the same comment could be made, in our submission, about Coffs Harbour (1986) 161 CLR 47 where the broadcaster had a federal licence to operate a radio station but could not build the towers necessary for its operation without obtaining a consent under the State legislation.

McHUGH J:   But was not the difference in Coffs Harbour that the joint judgment took the view that the Commonwealth had deliberately left open areas for State regulation, that it only concentrated on technical efficiency and so on of the services?

MR SEXTON:   The more so here, we would say, your Honour, where none of the statutes touch on the notion of advertising by lawyers in relation to proceedings in federal jurisdiction or anything like it.  The real point about Coffs Harbour in terms of practical effect is that the practical effect was that the person with the federal licence could not go ahead and broadcast.

McHUGH J:   That was because you had to erect two radio antennae, was it not?

MR SEXTON:   Yes, your Honour.  Your Honour’s example of Airlines of New South Wales is really to the same effect. It indicates, we would say, that that is not the analysis that is applied under section 109, although it is, of course, in relation to those other provisions of the Constitution that provide some guarantees.

Your Honours, that is all we have to say about question 1.  Can I say finally and briefly something about the question of severance.  I will not repeat what we have put on this subject in our supplementary written submissions, because we have addressed that there and there has already been some reference to that earlier this morning, except to deal with the point that is raised by my learned friend, Mr Basten, which we do say in those submissions, but it was raised again this morning – that is, that the provisions of the Social Security Act and the Income Tax Assessment Act that he refers to do not, in our submission, stand in the way of severance. 

We say your Honours, of course, will not get to that question, but it is necessary, we say, to distinguish between the advice that is sought and legal proceedings that are brought in relation to personal injury and the tax treatment and other social security consequences of any compensation that is awarded.  Nothing in the State legislation prevents a legal practitioner from advertising to provide advice on questions of taxation or social security law, so that that problem that is raised by Mr Basten, in our submission, would not cause a difficulty for the State legislation in this case on the severance front, assuming that your Honours were to get to that question, which, as we say, your Honours will not need to do. 

Unless there are any other matters, your Honours, those are our submissions.

GLEESON CJ:   Thank you.  Mr Solicitor for the Commonwealth.

MR BENNETT:   May it please the Court, I propose to deal first with what I might call the minor premise relevant to the first and third questions and then separately with the broader issues raised by the first and third questions.  On the second question we simply adopt what has been said and written by my learned friend, the Solicitor for New South Wales.

In relation to the minor premise it raises very much the same question of whether one looks at constitutional implication under Chapter III or inconsistency with general provisions of the Judiciary Act and the like under section 109 because in each case one has to say what is it said to be inconsistent with or contrary to. If one looks at what Part III does, that is the text and substance of Chapter III, one sees an exclusive power to create federal courts and to confer jurisdiction on federal courts in certain areas.

GUMMOW J:   And we must not forget 77(ii):

defining the extent to which the jurisdiction of any federal court shall be exclusive of that which belongs to or is invested in the courts of the States –

Without that there would be nothing to stop, I think, State courts entering upon consideration of federal laws pursuant to covering clause 5.

MR BENNETT:   Yes.

GUMMOW J:   And then go to the Privy Council in the old days.

MR BENNETT:   Yes.

GUMMOW J:   It was in reliance on 77(ii) that that was shut out.

MR BENNETT:   Yes. But the point we make is a very short and simple one, that whatever one says about practical effect, one has to say practical effect on what? At their highest, the various statutes concerned create causes of action and create jurisdiction in courts, and the Constitution gives an ability to create jurisdiction in courts. Where is there anything in any of that, we ask rhetorically, which affects the exhortation of a person to exercise the rights the person is given?

We all know from the numerous examples one can cite, of situations where conduct is perfectly lawful, but the advertisement or exhortation of that conduct may not be.  A regular cri de coeur which one hears from tobacco companies is that they ought not to be prohibited from advertising because cigarette smoking is legal.  That argument, of course, is quite specious, it is a non sequitur.  The one level at which a government may choose to deal with the problem of smoking is to say it is permitted but you may not advertise it. 

We saw in Langer an example of a situation where a particular method of voting was lawful, might have a partial effect or did have a partial effect, but it was prohibited to exhort people to engage in it.  This Court held that because it fitted with the general scheme that people ought not to be encouraged to vote that way, there was nothing wrong with doing that.  There are examples one can think of in many areas of legislation ‑ ‑ ‑

McHUGH J:   Yes, but the analogies seem to me to be flawed.  When you are talking about Langer, you are talking about a right – and you keep using the word “permission”, but you would be talking about a right that was given by federal law and was defined by federal law to prevent certain conduct.  But here, we are dealing with a situation of a right conferred by federal law, and a State law that arguably detracts from the practical enforcement of that right.

MR BENNETT:   Well, your Honour, my short point is, put in more general terms, that if federal law says you have right X and State law says one may not advertise encouraging people to exercise rights of a class to which that belongs, the second is simply not inconsistent with the first.  The person still has the right.

McHUGH J:   But it is burden in a practical sense. I mean certainly in the section 92 cases it was said that you cannot antecedently remove a subject from the field of trade and commerce. It was said in Bierton v Higgins 106 CLR.  You cannot have some State law which seeks to exclude the subject matter, that is what the argument for the State is in this case.  They say, “We operate before you walk in the door of the Court”.

MR BENNETT:   Your Honour, I put it a little differently.  What I put is that there is nothing inconsistent between the Commonwealth saying “You have a right” and the State saying “You may not exhort a person to exercise that right”.  I exclude, for the moment, cases like West or like the dictum in West where one has a State law specifically targeted only at the federal situation.  We are not talking about that type of case.  We are not talking here about any impediment whatsoever being put in the way of a person who wishes to sue.  One is simply having a prohibition against a certain form of encouragement of that activity. 

There are numerous situations where people have rights, but, if they all exercised them, anarchy would ensue.  The simplest and the most obvious, I suppose, is the most sacred of common law rights, the right to plead not guilty to a criminal charge.  It is well known that if everyone pleaded not guilty to every charge, the courts would be totally clogged up and the system would break down.  If someone was advertising for some political objective, “If you are charged with anything, plead not guilty.  That will show them, that will clog up the system and that is what we want to achieve” ‑ ‑ ‑

KIRBY J:   This is exactly what the Council for Civil Liberties does.  It gives out brochures telling you to do just that, that that is your right.

MR BENNETT:   There is difference in a brochure saying that is your right ‑ ‑ ‑

KIRBY J:   Next you will be banning that.

MR BENNETT:   There is a difference, your Honour, between a brochure saying that that is your right, and a brochure advocating the activity regardless of whether or not one is not guilty.  The point I make is that one can prohibit particular forms of advertisements or encouragement of conduct and that is not in any way inconsistent with, nor does it impair, the grant of a right.  The grant of the right is the right to sue.  People have the right to sue.  This legislation does not prevent anyone being told that they have the right to sue.  It does not prevent advertisements telling people what their rights are, telling people that if they have a personal injury they should see a lawyer.  It does not stop them advising people that there lawyers who do things on spec. 

All those things are perfectly permitted by this legislation.  All it does is prevent a particular form of promotion, the promotion or advertising of a particular lawyer or particular lawyers in an advertisement that mentions personal injury.  To prohibit that does not in any way inhibit a person’s ability to exercise the right given to that person by statute or indirectly by Chapter III. 

HAYNE J:   It seems to me the argument you are advancing seeks to distinguish – validly or invalidly may be the real question – between a law that seeks to impede the formation of a wish to sue and a law that impedes a right to sue.

MR BENNETT:   Yes, your Honour, they are chalk and cheese.

HAYNE J:   Is there anything more to your point than that?

MR BENNETT:   Well, your Honour, one ‑ ‑ ‑

HAYNE J:   It is either good or bad, but is there more to it than that?

MR BENNETT:   That one falls on one side of the line and one falls on the other, I suppose, your Honour, whether one takes the practical operation test or one takes the various inconsistency tests – whatever test one takes.  The problem with the plaintiffs’ argument is that it conflates the right to sue with volume of litigation.  It says, “The intention and effect of this legislation is to reduce the volume of litigation to produce a result that fewer people choose to sue”, and it conflates that with some interference with the right to sue, and perhaps the way in which cases are decided, which Chapter III may have something to say about.  But this has nothing to do with it.  It is not because it is antecedent, it is simply that it is not concerned in any way, it does not interfere in any way, with the exercise of the right.  There is no one who is prevented by this legislation from suing. 

A smaller number of people may choose to sue, but that is because of the power of persuasion.  We all know that an advertisement which says, “Buy Smith’s widgets”, and does not say anything about their quality, will induce some people to buy Smith’s widgets.  The persuasion is something which happens every day in the world, and advertising, of course, is an essential part of it.  It is a large jump from that to say that the prohibition of advertising or exhorting certain conduct in any way is something which impedes, detracts from, or interferes with the legal right.  It simply does not.

HAYNE J:   There may be a further conflation in the way in which you are putting it, conflating the choice to claim followed, if needs be, by the choice to sue, for the steps are distinct.

MR BENNETT:   Yes.

HAYNE J:   And if the claim is unarguably right, suit is not inevitable.

MR BENNETT:   No, it is not, your Honour, because many people who have claims decide not to sue, or are  ‑ ‑ ‑

GUMMOW J:   Many defendants settle.

MR BENNETT:   Many defendants settle.  If my friends were right, a State activity designed to encourage mediation rather than litigation would be unlawful, would be invalid.  If he were right, a State law which prohibited a whimsical group, if one can imagine one, which started to advertise, “Do not fall for mediation or alternative dispute resolution.  If you have a right, sue” – if a State chose to ban that sort of advertising, then my learned friend would say it would be invalid.  Yet it is generally accepted today to be considered desirable social policy to encourage alternative dispute resolution.

There is no virtue in litigation as such, nor is that a value which one can find in the Constitution or in any of the legislation my friend relies on. The value – the norm, if one likes – is the right to sue. It is that which must not be interfered with. Something which may have the effect that people are not encouraged to sue and their numbers are not increased by advertisements is simply not something which is protected by whatever norm or value we find in the Constitution or in the federal legislation.

GLEESON CJ:   Are you familiar with legislation which requires mediation or an attempt at mediation before claims by banks against rural producers are enforced in courts?

MR BENNETT:   I am aware of its existence.  I am not familiar with it.

GLEESON CJ:   Is it federal or State legislation?

MR BENNETT:   That is State legislation, as I understand it, your Honour.  One finds in the rules of many courts now provisions under which judges can put various forms of pressure on parties to mediate.

HAYNE J:   Yes, like make an order.

MR BENNETT:   Yes.

HAYNE J:   That is some pressure.

MR BENNETT:   Yes, it is.  Also, of course, there is the ‑ ‑ ‑

McHUGH J:   Yes, but there may be serious questions about whether such laws can operate in the federal sphere.

MR BENNETT:   There is also the federal commercial arbitration legislation which provides, in effect, that where there is a submission to a foreign arbitral tribunal, a Federal Court must stay the proceedings pending the determination of the arbitrators.  The validity of that was upheld in a case called ‑ ‑ ‑

GUMMOW J:   Tanning Laboratories.

MR BENNETT:   No, there was another one, your Honour.  It was in September 1998.  The defendant had a long Japanese name.  It was a shipping company.  I have forgotten the name of the plaintiff, but I can have it looked up for your Honours.  The Federal Court has upheld legislation which said that the Federal Court shall – Hi-Fert Pty Ltd, it was called – which required it to stay proceedings pending a foreign arbitration.  That was federal legislation.  All these are examples of the fact that the ‑ ‑ ‑

GUMMOW J:   That is enforcing a negative contractual stipulation.

MR BENNETT: Yes, that is what it was doing. All these are examples of the fact that there is no virtue in the volume of litigation as such. That is not what is protected by any of this legislation or by the Constitution but it is that which is said to be interfered with. What might be ‑ ‑ ‑

McHUGH J:   You cannot interfere with the volume of litigation unless you interfere with individual rights, and that is its purpose – to restrain each individual.

MR BENNETT:   Your Honour, it is not to affect any individual’s right.  It is to prevent people exhorting that individual to exercise those rights, at its highest.

HAYNE J:   To exercise a claim to those rights.  The claim may be ill‑founded, the claim may be fanciful.  It may be better for the defendant to pay them a small amount to be rid of them rather than confront the trauma and time and effort, et cetera.  So we are at the point of claims.

MR BENNETT:   Yes, we are at the point of claim – well, that makes my point stronger, I would submit, your Honour. It is even further from what is conferred directly by the legislation and indirectly by the Constitution. That is why when my friends use phrases like “alter, impair or detract from” one has to ask alter, impair or detract from what, and it is not from the existence of a right. What is impaired or altered or detracted from is the number of people who may in practice choose to attempt to enforce their rights.

McHUGH J:   Take a State law which prohibited a newspaper from advertising polling booths, and let it be assumed there was no federal law directing the site of polling booths to be advertised, would the State law be valid?

MR BENNETT:   Your Honour, that would run into the West problem of the law which particularly singles out the Commonwealth or Commonwealth activity.

McHUGH J:   Let it be assumed it is a general law, general State law.  It says, “No newspaper shall advertise a place where votes may be cast in any election”.

MR BENNETT:   Yes, that, your Honour, might on its face look like a general law but it might, in fact, be construed as simply a composite of two laws, one of which was directed at the Commonwealth.  If one had a general prohibition against any form of advertisement in newspapers, if one said all newspapers shall simply have news and articles and photographs and shall have no advertisements in them at all, if one had such a law then, in my respectful submission, that would raise the issue squarely, and the answer would be the same as the answer I am proffering.  That does not interfere with the exercise of any person of the right to vote.

If the law prohibited informing people of where polling booths were, as opposed to exhorting them to vote or to go to them, it might be a little different, but the example does have some other difficulties, your Honour, and the answer to it would not necessarily dictate the answer in this case where it is much more remote. So that is the first problem. The question of what is the law said to alter, impair or detract from or be inconsistent with, and that, as I say, affects both the implication from Chapter III and the problem concerning section 109.

GLEESON CJ:   It is said to impair the operation of the federal law, but it may depend upon the level of abstraction at which you describe the operation of the federal law.  You could say the operation of the federal law is to give citizen X a right to sue Y or the federal government or whatever, or you might say the operation of the federal law is to confer rights of action upon people who suffer harm as a result of this kind of conduct, generally.  Is the operation of the law to permit an individual to sue somebody else or is the operation of the law to provide for litigation?

MR BENNETT:   Your Honour, the operation is, we would submit, simply to give a person a right to take a certain course of action – no pun on “cause of action” intended.  That is all.  The operation of the law is not to produce a volume of litigation or to make defendants pay or anything like that.  That is not the operation of the law.  The operation is that people are given rights which they may choose to exercise.  Now, a State law which fines them of exercising those rights, like in the Florida Case ‑ ‑ ‑

GUMMOW J:   The right is a right, hopefully, to have someone else observe their obligations which are imposed on them by federal law.  Ordinarily, if that happens, you do not get anywhere near Chapter III.

MR BENNETT:   Your Honour, the payment of damages is not an obligation, normally, outside the obtaining of an order.

GUMMOW J:   The Commonwealth law will have been performed in the first place.

MR BENNETT:   Your Honour, if one takes a simple tort situation, a person who negligently injures another does not have any obligation to pay any money to that person or to obtain medical services or anything else.  All the person has is the liability, if sued and if sued to judgment, to pay the amount of that judgment.  That is the obligation that is imposed.

HAYNE J:   That is an unusual way of describing judicial power.  Judicial power, relevantly – in the area we are discussing, what the citizen has is the right to resort to the application of the judicial power of the Commonwealth in vindication of a right.  In vindication of, not in creation of.

MR BENNETT:   Yes.  This appears in some of the cases about interest on judgments where there is discussion about the obligation of the defendant tortfeasor in the absence of a judgment.  The right is not a right to be paid as such.  The right is a right to go to court and the court, if one likes, translates the facts and the existence of the right of action in the fact that the plaintiff has come to court into a judgment, which then gives rise to certain further obligations.  Now, the court decides that on the basis of pre‑existing norms and its determination of pre‑existing facts, but the actual obligation to pay in the case of damages does not arise until verdict, unlike a debt where there may be an obligation to pay and a breach of contract or whatever, if one does not pay, which may or may not have certain other legal consequences.

GUMMOW J:   What I was putting to you, Mr Solicitor, is this, the Corporations Law is now a Federal Act and imposes on company directors various obligations as to how they conduct themselves in the discharge of their office.  Hopefully, they will do so.  That is their obligation.  If they fail to do so, the Corporations Act also confers on a range of people, regulatory authorities and private people, certain rights to go to court to obtain remedies.

MR BENNETT:   Yes.

GUMMOW J:   Now, you do not advance matters, really, by not starting at the beginning.  The question is, what was the initial obligation imposed by the federal law?  Then, to what extent does the federal law go on to invoke Chapter III to enforce it?

MR BENNETT:   Well, your Honour, in my submission it is no part of the intention, purpose ‑ ‑ ‑

GUMMOW J:   We looked at some of this in that Macquarie Road Case, you will remember.

McHUGH J:   Truth About Motorways.

MR BENNETT:   Your Honour, my submission is it is no part of the intention or purpose of any of the relevant Federal legislation or for that matter Chapter III that in every case where a right exists, it ‑ ‑ ‑

GUMMOW J:   What you are really saying is it is not the Parliament’s intention that people will observe the norms imposed upon them.

MR BENNETT:   Well, your Honour, precisely.  In the same way ‑ ‑ ‑

GUMMOW J:   By denying access to those whose activities would bring about enforcement of the parliamentary obligation imposed on them.

MR BENNETT:   That applies in all these areas.  That applies to pleas of not guilty.  The parliamentary intention is not that every single person charged would exercise his or her right to plead not guilty.  The parliamentary intention is not, in creating these rights, that every person who has any legal right created by Commonwealth law should enforce it to the full.  That is simply not a correlative of the creation of the right.  The correlative of the creation ‑ ‑ ‑

GUMMOW J:   I am talking about creation of the obligation, I will not go back and say it again.

MR BENNETT:   Of the obligation, your Honour, by the creation of the obligation.  I think in Hohfeldian terms ‑ ‑ ‑

GUMMOW J:   It is a distinction that runs right through the jurisprudence in this area.  It is the Truth About Motorways Case exemplified. 

MR BENNETT:   Truth About Motorways was about locus standi, was it not, your Honour? 

GUMMOW J:   Exactly.

McHUGH J:   It was about matter.

MR BENNETT:   Yes, and about a provision in an Act which provided, in effect, that anyone had locus standi in relation to certain types of conduct, but that is not what is done in relation to the creation of rights of action.  Where a right of action is created one person has that right of action and no doubt, in creating that right of action and considering the economic effects of it, the legislature says to itself in all probability X per cent of people who have this right of action will choose to exercise it and another legislature may choose to prevent a distortion of that by people being exhorted to sue.

The norm, the obligation if one likes, is not one which must be applied in every case, in much the same way as in the criminal law.  It is common knowledge and, indeed, much written of today that the decision to prosecute is an important aspect of the criminal law and the question of whether it is likely that there will be a conviction or whether the person has committed the offence is only one of the factors.

We do not take the attitude taken by various English societies in the 19^th century that it is absolutely essential whenever there is a breach of any law that there be a prosecution.  All the law on decision to prosecute and, indeed, the law in New South Wales on section 556A of the Crimes Act and its corresponding provisions in other States, recognises that there are many breaches of the law ‑ ‑ ‑

GUMMOW J:   Well, the next time a responsible Minister stands up in the Federal Parliament introducing some new regulatory regime with criminal sanctions attached and says that, there might be a bit of a response, I suspect.

MR BENNETT:   No, your Honour, there ‑ ‑ ‑

GUMMOW J:   We do not really mean it.  We only mean it some of the time.

MR BENNETT:   There is a jump from saying that the law provides civil or criminal remedies or obligations or liabilities in certain cases and that in every case to which the law applies, it ought to occur.  There is simply a jump between those two.  The second is not a norm implicit in the first. 

GUMMOW J:   Well, I look forward to the explanatory memorandum speeches on CLERP10 and CLERP11, Mr Solicitor.

MR BENNETT:   Yes. Well, your Honour, that is what I have called the minor premise. I will be fairly brief on the other matters because most of what I wish to say has been or will be said or is in our submissions. In relation to the first question, we simply stress that the cases which talked about operation in section 92 were talking about direct and substantial effect, they were not talking about any inhibition whatsoever. So that jurisprudence has to be looked at with that in mind.

One also needs to bear in mind that under section 109 it is always open to the Commonwealth to deal with the particular problem by legislating to make it clear that its legislation is intended or not intended to cover the field, and in that way section 109 can be fully vindicated.

No one has suggested in any of the cases what seems to be implicitly suggested here, that one looks for the purpose or implication or policy behind the federal legislation, and then sees whether the State legislation in any way impedes that purpose.  That simply cannot be the test, and the Commonwealth does not submit that it goes to anything like that extent.

It would not be inconsistent, for example, with a law imposing a tax on the importation or growing of tobacco that a State banned smoking or banned smoking in particular cases.  That might, in one sense, have an operation which would prevent one consequence of the Commonwealth Act, but it would not be inconsistent, we would submit, in the relevant sense.  That is not the type of operational effect which one is talking of.

Interestingly, there is an irony in the plaintiffs’ submissions, because one reason why we would submit the Court would be reluctant to give so broad a view to section 109 is that it would make it very difficult, in relation to vast quantities of State legislation, to ascertain its validity. If one could find some Commonwealth policy evinced in some Commonwealth Act which might be impeded by an effect of that legislation, that would make the law very much harder for the citizen to know what to do about. In my respectful submission, section 109 does not have so wide an effect.

In relation to the third question, the question of inconsistency and the effect of exclusivity on that, our submission is very simple.  It is that what is exclusive is the power to confer federal jurisdiction on State courts, the power to create Federal Courts and so on.

GUMMOW J:   There is no implied incidental power?

MR BENNETT:   Your Honour, if ‑ ‑ ‑

GUMMOW J:   To these heads of legislative power under Chapter III?

MR BENNETT:   Yes, there may be, your Honour.  There is, but the incidental power does not have the – necessarily operates in areas where it is concurrent.  As in most cases with the incidental power, it enables the Commonwealth power to extend into areas of concurrency.  That is what occurs, for example, with regulation of the legal profession and with matters of that sort.  That is before one gets to the question of the extent to which the legislation here assumes the existence of State‑created rights, powers, obligations - section 78, for example, which indirectly incorporates provisions of State law concerning the admission of lawyers. 

Incidentally, it has been held by the Full Federal Court that section 78 of the Judiciary Act does not carry with it any implications in relation to legal professional privilege.  That is the case, your Honours, of Esso Australia Resources Ltd v Dawson (1999) 87 FCR 588, a decision of Chief Justice Black and Justices Sundberg and Finkelstein. That held that a provision of Victorian law which in part overrode legal professional privilege in certain circumstances was not inconsistent with section 78 of the Judiciary Act.

Stack v Coast Securities 154 CLR 261 is a good example of a case defining what is exclusive and what is not exclusive. There it was said that the accrued jurisdiction was concurrent, as of course ‑ ‑ ‑

GUMMOW J:   It was said to the contrary since.

MR BENNETT:   I am not sure it has been said that if one has a matter which otherwise would be under State law as to which the Federal Court could exercise jurisdiction because of the existence of concurrent federal proceedings in the Federal Court that thereby without more the State court is unable to exercise jurisdiction.  I do not think any case has yet gone that far. 

In any event, it is merely an example of the fact that there are aspects of Chapter III jurisdiction in the courts which are exclusive and aspects which are concurrent, and the powers, of course, which are concurrent are not, we would submit, matters which in any way inhibit legislation of the type referred to here.  Your Honours, in relation to the second question ‑ ‑ ‑

GUMMOW J:   I do not understand this Esso Case by the way, Esso v Dawson.  This is a case in the Federal Court.

MR BENNETT:   Yes, your Honour.

GUMMOW J:   Why are they worried about the Evidence Act (Vic)?  Other than being picked up by some federal law.

MR BENNETT:   I think because it was picked up, your Honour.  I assume that ‑ ‑ ‑

GUMMOW J:   They talk about being inconsistent with section 78 of the Judiciary Act.  I do not understand it at all.  It had no force of its own.

MR BENNETT:   I am sorry?

GUMMOW J:   How did it get into the Federal Court, any question of what the Victorian Evidence Act is, of its own force?

MR BENNETT:   I suspect, your Honour, because it involved a matter arising under the Constitution, or involving its interpretation, concerning the validity under the Federal Constitution of a provision of Victorian law, and ‑ ‑ ‑

McHUGH J:   Well, they ran a Kable point, which would raise federal jurisdiction.

MR BENNETT:   Yes.

McHUGH J:   It would be in federal jurisdiction.

MR BENNETT:   And also an inconsistency point, I think.

GUMMOW J:   In the Federal Court, proceedings have been commenced on behalf of consumers, seeking damages as a result of the interruption of the supply of gas.  Anyhow, there may be some explanation for it, but it does not immediately shine forth as a great beacon.

MR BENNETT:   Yes.  Your Honour, in relation to the question of severance, we simply adopt New South Wales’ arguments.  May it please the Court.

GLEESON CJ:   Thank you.  Mr Solicitor for Western Australia.

MR MEADOWS:   May it please the Court, in view of the time, the constraints that are on us and that what I will be saying will essentially cover the same field, so to speak, we would like to hand up an outline of the submissions that we were hoping to make ‑ ‑ ‑

McHUGH J:   I think it is the document we have.  Notes of submissions?

MR MEADOWS:   Yes, it is, your Honour.  If we could just hand those up as ‑ ‑ ‑

GLEESON CJ:  

WESTERN AUSTRALIA’S NOTES OF SUBMISSION ON QUESTIONS RAISED BY THE COURT.

MR MEADOWS:   Yes, I did not realise it had been handed up.

GLEESON CJ:   That is a document of nine pages.

MR MEADOWS:   It is, your Honour.

GLEESON CJ:   Yes, we have it.

MR MEADOWS:   If we could seek to rely on that?

GLEESON CJ:   Very well.  Mr Solicitor for South Australia.

MR KOURAKIS:   If the Court pleases, in my submission, covering the field is not a species of some form of practical operation test that comes out of, or is authorised by, section 109. Rather, in my submission, the examination of the practical operation of both statutes might reveal whether the Commonwealth Parliament intended to cover the field, that is, exclude the operation of all State law, on the one hand, or, alternatively, intended the impugned State laws to supplement the Commonwealth law. So the examination of the practical operation simply informs that ultimate question which rests with discernment, identification, of the intention of the Commonwealth Parliament.

In effect, that was the approach that the Court took in Coffs Harbour.  A very different result might have been reached by the Court in Coffs Harbour, if the State legislation simply prohibited the construction of any tower of a height that was necessary to transmit the telecommunications for which the licence had been granted.  Ultimately, that also was the approach, in my submission, in Stock Motor Ploughs v Forsyth, the difference between the majority and his Honour Justice Dixon being simply a matter of construction of the scope of the right conferred by the Commonwealth statute.

The plaintiff relies on the decision of the Supreme Court of the United States in Nash v Florida.  Several paragraphs before the one read, the court there reached a conclusion that the federal statute evinced an intention to cover the field and all that was said thereafter flowed from that first finding, that is, that the relevant Commonwealth or federal legislation there covered the field.

Your Honours, section 109 demands a comparison of the laws themselves. If the continued operation of the State law, and the rights and obligations it imposes and confers, vary, impair or detract from the rights and obligations conferred by the Commonwealth legislation, then there would be an inconsistency. Section 92, on the other hand, and other constitutional limits on power demand an investigation of the effect of the law on the protected subject matter. That question cannot be approached without a consideration of the practical operation of the Commonwealth law. The relationship between the law and the subject matter is at the heart of the question. For the reasons that I have put, section 109, on the other hand, deals with the identification of the particular laws.

If one stays with the question of what is the Commonwealth Parliament’s intention, of course, then the measure against which State laws can be tested to see whether they vary, detract or impair from a Commonwealth law will be found in the Commonwealth legislation itself. There is no need to consider the formulation of tests out of section 109. The litmus test will always be the scope of the rights and obligations conferred by the Commonwealth legislation.

Your Honours, they are my submissions on the question of the practical operation test advanced by the plaintiffs.  Can I turn to make some submissions on the question of the exclusive power or extent to which there is an exclusive power under Chapter III to provide for representation in federal courts.  Can I do so by turning to the provisions of the Judiciary Act which are conveniently set out in an appendix to the plaintiffs’ submissions at pages 15 and 16.

In my submission, they illustrate examples of regulation, some of which fall within the exclusive power and some fall within the concurrent power.  Your Honours, the provisions in 55A and 55B are provisions which, in my submission, the Commonwealth has an exclusive power to make because they concern the practice in the Federal Courts themselves.  In my submission, the power to create a court takes or carries with it the power to regulate those who appear before it as an inherent aspect of the power to create the courts.

On the other hand, the provision in section 55A(4) which provides a right of appearance for practitioners admitted in one State to appear in the court of another State when that court is exercising federal jurisdiction is a power which, in my submission, can only be a concurrent power, will prevail by reason of section 109, but is not a – that, if it is within the exclusive power of the Commonwealth. Of course, if it ever was, it would mean that any State legislation, absent subsection (4) which purported to limit the right of representation in State courts in federal jurisdiction was simply invalid for lack of power, and in my submission, any such regulation is valid but it may be inconsistent once a provision such as ‑ ‑ ‑

GUMMOW J:   Is that by way of qualification, taking State courts as one finds them, expounded in relation to 77(iii)?

MR KOURAKIS:   Your Honour, it may be and it involves what, in my respectful submission, is a difficult question of the extent to which the right of appearance or persons who have a right of appearance are part of the constitution of the court, and the answer may lie there.  But in one way or another, probably for the reason I have just advanced, it may be a qualification.  On the other hand, your Honours, similarly, regulation of legal practitioners giving advice even in matters which if prosecuted would fall within the federal jurisdiction of a court is also a matter over which the Commonwealth has concurrent power and is not an exclusive power.

Your Honours, having made those submissions, can I just go back to the question of the section 109 inconsistency, and the practical operation test is the final submission I have to make. If there is a State law such as the one that has been postulated in the course of argument, for example, restricting admission to practice to those who have masters degrees or who have practised for 10 years or more, in my submission, on the tests advanced by the plaintiff, those measures would practically impair the rights to bring proceedings in federal jurisdiction.

In my submission, however, the test of their inconsistency with section 109 does not depend only on that; rather, the question must always be whether the Commonwealth legislation in question meant to operate against the background of those State laws, that is, accepting them as supplementary State laws. Your Honours, if it were otherwise and if section 109 was the source or provider for the inconsistency of State laws, if in a practical way they impaired the operation of Commonwealth laws, quite apart from a cover the field test, the effect of section 109 would be in many cases to increase the reach of Commonwealth power.

GUMMOW J:   Is that a wicked thing?

MR KOURAKIS: No, not necessarily, but it would be a surprising thing in section 109. I say it for this reason, your Honours, it may well be not a matter within power for the Commonwealth to prohibit smoking, for example, but on the example that my learned friend, the Solicitor‑General for the Commonwealth, advanced, State legislation prohibiting smoking might impair the collection of taxation. If that were to operate, then the net effect would be that the taxing statute – and the power to enact it under that particular taxing head of power – extends to something that it would not otherwise extend to, that is, the prohibition of smoking.

Similarly, in the case of a State law which provided that no person shall be admitted to practice if they had less than 10 years experience, if, as

I have suggested, that imposes a practical burden and impairs a right given by the Commonwealth to sue, the effect of the plaintiffs’ approach to section 109 would be to invalidate that restriction on admission to practice in the State, although there is no obvious or apparent head of power under which the Commonwealth could do so directly. If the Court pleases.

GLEESON CJ:   Thank you.  The Solicitor‑General for Victoria.

MS TATE: May it please the Court. Your Honours, if I might approach the three matters raised by the Court in this way, the plaintiffs point to two alternative sources of invalidity, one based on constitutional inconsistency under section 109 and one based on the claim that the regulation is repugnant to an implication derived from Chapter III of the Constitution. While we accept that these are alternative sources of invalidity, it is our submission that in this case in truth both arguments rely upon a single principle, namely, that a law which in its practical effect inhibits or detracts from the effective exercise of federal jurisdiction is invalid, or, with respect to the implication, that the law is prima facie invalid until saved by the second limb, the qualification.

The basis relied upon by the plaintiffs for the implied freedoms is that they are necessary to ensure the effective exercise of federal jurisdiction, and that the regulation is invalid because it detracts from that effective exercise.

Similarly with respect to section 109, the argument is that the regulation alters, impairs or detracts from the effective operation of the federal laws. We submit that this principle is not supported by the authorities, and not supported by constitutional doctrine. If I might make our point generally, and then develop it with respect to the argument based on section 109, and then with respect to repugnancy to the Constitution.

In the course of our submissions, I will indicate our responses to the three matters raised by the Court, but might I indicate at the outset that our response to question 1 is to say that the practical effects test developed in the section 92 cases is not applicable to section 109. To question 2 we say that if section 109 is engaged, it is necessary to determine how much of the law will fall, and that may involve an exercise of reading down to determine if the law would have a different effect read down from that which the Parliament would have intended.

To question 3 we say that no implication should be identified, and insofar as the plaintiffs’ contention rests on the infraction of exclusive federal power, we submit that it is unfounded.  In essence, our argument is that the notion of a practical or factual detraction from the effective exercise of federal jurisdiction is a notion which is properly applied in the context of operational inconsistency.  It is in that context, for example in P v P, that this Court has considered whether a State law would frustrate or interfere with the actual exercise of federal jurisdiction, and on that basis, struck down the law. 

This notion of frustration or detraction occurs where a federal law and a State law each authorise the exercise of a power in the same factual circumstance, and the Commonwealth law intends that that power be exercised exclusively.  This has the result that there is an operational inconsistency between the two laws, and the State law is invalid only to the extent that it provided the source of authority for that particular exercise of power. 

No inconsistency arises until the powers are actually exercised, and the inconsistency has a temporal and confined connotation.  We say that this principle cannot be more generally applied.  Firstly, we say that the principle that I have enunciated, if made out, would leave covering the field inconsistency with no work to do.  If a State law could be invalid simply by reason that it detracted from the effective practical operation of a federal law, there would be no need to inquire whether a Commonwealth law intended to exclusively and exhaustively govern a field, or whether the State law, properly characterised, intruded into that legal field.

It would be enough that the efficacy of the federal law had been impaired.  An alternative way of making this point is to say that the principles upon which the plaintiffs depend is one which would attribute to every federal law, an intention to exclusively and exhaustively govern a field, namely, the field of the operation of that law, for a practical detraction from efficacy could only be problematic if the law was intended to be exclusive.

Thus, detraction from efficacy arises in the context of operational inconsistency only because the power under the federal law was intended to be exercised exclusively.  If the operation of the law or the exercise of the power is not intended to be exclusive, then there will, of course, invariably be interaction between various laws, some of which might have the practical effect of detracting from the wholly effective operation of a federal law. 

In the absence of operational inconsistency or direct inconsistency alternatively, this form of inevitable interaction between State and federal laws on matters where there are concurrent powers has been tolerated within a federation.  Indeed, one might ask, what would be the force of an express intention, such as is found in the Trade Practices Act, that the law not cover the field?  If it is possible for a State law to be invalid, or at least prima facie invalid, simply because it detracts from the effective operation of that law, then one asks, what will be the force of a specific, express intention found within the law?  We further say that the principle that I have enunciated ‑ ‑ ‑

McHUGH J:   It was held in Re Credit Tribunal; Ex parte General Motors, was it not, that the Federal Parliament could specifically say that they did not intend to cover the field.  On the other hand, in Metwally Justice Mason said that the Parliament could not say there was no inconsistency with State law if the fact was that there was an inconsistency. 

MS TATE:   Indeed, your Honour, the Commonwealth Parliament cannot declare that there is no inconsistency, but the Commonwealth Parliament can declare within a law, as your Honour says, upheld in GPAO, that a federal law may expressly intend not to cover the field. Now, the question we ask is, what is the force and effect of such an express intention in circumstances in which it is submitted by the plaintiff that a section 109 inconsistency can arise simply because a State law detracts from the practical, effective operation of the federal law?

HAYNE J:   The answer made must be that the legislative statement is of assistance in identifying the effective operation of the relevant federal law.  Now, that is the answer that must be made.  What, if any, is the riposte to that?

MS TATE:   Well, your Honour, indeed, the expression that the Act is not intended to cover the field is to be construed as an intention on its sphere of operation, but if one considers, for instance, in relation to the Trade Practices Act that before 2001 there were different limitation periods in the Trade Practices Act from the State Fair Trading Act and, in particular, in relation to the consumer protection provisions, one might have said that as the Trade Practices Act had a limitation period of three years, it was the intention of the Commonwealth Parliament that the sphere of liability in relation to the consumer protection provisions ought to arise only for that period.  Now, it is accepted, of course, that as the Act contains a statement that it is not intended to cover the field, clearly it was intending to permit the operation of a State law in that relevant field.

McHUGH J:   Subject to this proviso, that in the GMAC Case, that South Australian case, Justice Mason said the legislative declaration could only have effect insofar as there was no inconsistency.  The Commonwealth could not say there is no inconsistency here.

MS TATE:   Indeed, your Honour, that may be the foundation of an answer to Justice Hayne’s question, that if there is an inconsistency generated because of the practical operation of the Commonwealth law in relation to the State law, then it may be that there is an inconsistency regardless of the statement of intention by the Commonwealth Parliament.

McHUGH J:   I think that is the effect of what Justice Mason said in that General Motors Credit Case.

MS TATE:   Indeed, your Honour.  The second reason we say that the principle upon which the plaintiffs depend is not generally extendable to a context beyond a context of operational inconsistency is because the very notion of efficacy or effectiveness is a notion which is inherently vague and uncertain.  We submit that those notions make sense in the context of the actual exercise of a specific power where one can speak of a power as having been frustrated, or indeed in relation to the effect of court orders.  One can consider whether there has been proper compliance with those court orders or whether those court orders were sufficient to avoid the problem which the parties came to the court to have remedied, but we say that it is too vague a notion to found a constitutional implication, or indeed to found the inconsistency which the plaintiffs require.

Our third reason for saying that the principle cannot be extended is to say that the principle offends the doctrine recently reaffirmed in Fardon that the framers of the Federation chose to proceed by means of the autogenous expedient whereby State courts were constricted by the Federal Parliament to exercise federal jurisdiction and that as a consequence the Commonwealth Parliament must take State courts as it finds them.  This has been accepted, as Justice McHugh noted in Fardon v Attorney‑General for Queensland (2004) 78 ALJR 1519 at paragraph [38] on the basis of Commonwealth v Hospital Contribution Fund (1982) 150 CLR 49 at page 59, that the structure of a State court may provide for certain matters to be determined by a person other than a judge such as a master or registrar who is not a component part of the court.

If the Parliament of the Commonwealth invests that court with federal jurisdiction in respect of those matters, the investiture does not contravene Chapter III of the Constitution and that person may exercise the judicial power of the Commonwealth, yet it might be said indeed that the practical effect of the failure of the State court to provide for those matters to be determined by a judge and not by a master or registrar would be to detract from the effective exercise of federal jurisdiction. It might be argued indeed that the exercise of federal jurisdiction requires for its efficacy that State courts be open for longer hours, that there be a special list where trials are given expedition, that all accused ought to be entitled to be legally represented and not simply entitled to appear by counsel, and that without such procedures federal jurisdiction is inhibited.

It is our submission that it has never been sufficient to establish a constitutional inconsistency that one can show that a Commonwealth law might operate more efficiently or more effectively if the State law did not apply.  There will be laws, of course, made by a State governing the procedures, powers and functions of State courts, which will inevitably operate upon the exercise of federal jurisdiction.  The interaction of those laws may have, as a practical consequence at times, that there is an inhibition upon the effective exercise of federal jurisdiction.

If I might turn then to the issue of the exclusivity of federal power. Relevantly, we accept that the Federal Parliament has the exclusive power, of course, to confer, define and invest federal jurisdiction under sections 71, 76 and 77 of the Constitution. We accept, of course, that the States cannot abolish their Supreme Courts. They must remain in existence to receive federal jurisdiction under section 77(iii) and from which appeals can be brought to this Court under section 73.

We also accept, of course, that the States cannot stultify federal jurisdiction, and if I could refer your Honours to an example of stultification, it is an example considered by the Court in ASIC v Edensor Nominees (2001) 204 CLR 559 at paragraph 68. In our submission, it is an instructive example. It is at page 591 at paragraph 68, where your Honours the Chief Justice, Justice Gaudron and Justice Gummow said that:

It is well established from the decisions under s 79 of the Judiciary Act . . . that a State statute may be applicable as a source of rights and remedies in federal jurisdiction even though, on its own terms, that law identifies only the courts of the enacting State as the courts to provide those remedies.  Indeed, as Gibbs J indicated in John Robertson & Co Ltd (In liq) v Ferguson Transformers Pty Ltd, were that not so the operation of federal jurisdiction might readily be stultified.

and this is the example, your Honours –

There might be withdrawn from courts exercising federal jurisdiction (including this Court) the effective authority to quell controversies in respect of which, by reason, for example, of the identity of parties, s 75 of the Constitution had conferred original jurisdiction upon this Court and s 77 empowered the Parliament to grant authority to the other federal courts and to State courts exercising federal jurisdiction. An attempt by State law to achieve that result would, as to this Court, be repugnant to s 75 of the Constitution. Where jurisdiction was conferred by a law made by the Parliament in exercise of its powers under s 77 of the Constitution, the State law also would be invalid for inconsistency under s 109 of the Constitution.

Now, your Honours, it is our submission that in that example the reason for the stultification of federal jurisdiction was that the State law interfered with the exercise of exclusive legislative power. A State law could not withdraw from this Court the original jurisdiction conferred under section 75 of the Constitution to hear matters where the Commonwealth was a party to those matters. Nor could it withdraw from the jurisdiction of the State courts such jurisdiction, because to do so would be to interfere and stultify the exercise of federal jurisdiction.

But we say here that there is no general exclusive legislative power under Chapter III in relation to federal jurisdiction.  We say that the powers conferred under Chapter III do not form a general, all‑embracing, exclusive legislative power of the type to be found under section 52.  We submit that
States can make laws, in relation to federal jurisdiction, and indeed, we have handed to the Court an example of such a law.  This is a rule made by the judges of the Supreme Court of Victoria in the exercise of their delegated legislative power.  It forms one of the rules of the rules of civil procedure of the Supreme Court, Order 19, and your Honours should have been furnished with a copy of Order 19.

Now, Order 19 makes its own provision for the issuing of section 78B notices, when a matter comes before the Court, which raises a matter which arises under the Constitution. Provision is made for the filing and service of such notice, and behind the first page there is a form 19A, which is a prescribed form by the judges of the Court, as to the manner in which a notice arising under the Constitution should be formulated.

KIRBY J:   There is a real question as to the validity of this in my mind.  I mean, why did they do it?  Why is it needed?  Why is the whole matter not dealt with by the federal statute?

MS TATE:   Well, indeed, your Honour, there may be a real question about whether it is necessary given ‑ ‑ ‑

KIRBY J:   And also whether it is valid.  If the Federal Parliament has made a law on this matter, it really is not for a State lawmaker to engage itself in making another law on the matter.  Insofar as it is the same, it is unnecessary.  Insofar as there is the slightest difference, it is invalid.

MS TATE:   Your Honour, we distinguish between questions of absence of power from questions of inconsistency, and we would say that there is, in the terms of Order 19, there would be no inconsistency with the terms of section 78B.

KIRBY J:   The real question could arise if, for example, there were a flood of migration cases, and ‑ ‑ ‑

MS TATE:   Yes, your Honour.

KIRBY J:    ‑ ‑ ‑ under some order of a Supreme Court of Victoria, or State Supreme Court or State Court provision was made for grouping them and dealing with them and having procedures for them, that may well be valid, but where you have an exact co‑incidence between 78B and Order 19 of the Rules of the Supreme Court of Victoria, it really is a question as to whether that can be done.

MS TATE:   Well, perhaps your Honour, I could proffer another example.  It is our submission that it would be a valid law of the State, for the State to enact legislation which obliged all legal practitioners of the Supreme Court of Victoria to undertake continuing legal education courses in the subject of ‑ ‑ ‑

GUMMOW J:   In federal jurisdiction.

MS TATE:    ‑ ‑ ‑ in this subject of federal jurisdiction.

GUMMOW J:   Well, they need it, yes.

MS TATE:   Indeed, your Honour, it might be thought that following the BAT Case, that it would be important for state practitioners to have an acquaintance, and an expertise, with federal jurisdiction.  It would be our submission that the States could impose such a qualifying requirement upon legal practitioners within the State, and that that law, as Order 19, would be a law, with respect to federal jurisdiction.

McHUGH J:   Can I just say this.  There is a serious 109 problem with Order 19.03.  It says:

Service of a copy of the notice need not be effected on an Attorney‑General if steps have been taken that could reasonably be expected to cause the matters to be notified to be brought to the attention of that Attorney‑General.

That seems to conflict with 78B that says that a court exercising federal jurisdiction is not to proceed unless it is satisfied that the Attorney‑General has received notice.

KIRBY J:   Maybe your instruction in federal jurisdiction needs to go higher.

MS TATE:   There may be a question as to what it is to be satisfied that an Attorney has received notice.  Certainly, it is my experience, your Honours, that this Court will often make an informal inquiry as to whether a State Attorney‑General has received notice of a matter, not in a particular form.

McHUGH J:   Justice Hayne points out that 78B(3)(a) might – your rule seems to reflect that subsection.

MS TATE:   Yes, your Honour.

GUMMOW J:   Anyhow, your point from the other example is that there is a measure of exclusive legislative power, but that at some stage the boundary is reached and it becomes concurrent.

MS TATE:   Yes, your Honour.

GUMMOW J:   Your example about further training would be an instance of that, and you say this legislation in issue in this case, likewise, is on that side of the line.

MS TATE:   Yes, your Honour, we would say ‑ ‑ ‑

GUMMOW J:   And, moreover, being in the concurrent area, you go on to say that there is no inconsistency, because of what you have said about the inappropriate reliance on the practical operations test.

MS TATE:   Indeed, your Honour.  We say, further, that the plaintiffs can draw no comfort from Boilermakers to provide the necessary foundation for the implication.  If I could refer your Honours to Boilermakers (1956) 94 CLR 254 at 278, the observation was made there by the Court that:

The judicial power, like all other constitutional powers, extends to every authority or capacity which is necessary or proper to render it effective.

It is our submission that that observation is a comment about the powers and functions that can be exercised by a Chapter III court.  More specifically, although a Chapter III court has as its exclusive purpose the performance of judicial functions, nevertheless Chapter III courts can lawfully perform whatever other functions are incidental to the performance of judicial functions, whatever functions are necessary to render effective the exercise of judicial power.

Thus, the observation is directed to the principle that any grant of power includes by implication anything necessary to effectuate the purpose of the power and that it is ‑ ‑ ‑

GUMMOW J:   That statement in that first paragraph on 278 is a restatement of the ordinarily understood implied incidental power.

MS TATE:   Exactly, your Honour.  It does not go further than that.  It is not the foundation for saying that there is a general principle whereby a State law will be invalid, or prima facie invalid, if it inhibits or detracts from the effective exercise of federal jurisdiction.  We say that the interpretation put upon it by Justice Gummow is supported clearly by the reference made to Davison’s Case, which concerned whether the judges of the court could make Rules of Court in the exercise of delegated legislative power, and it was held that delegated legislative power of that sort was merely an incidental power of the judicial power, that those powers are not to be treated as fully mutually exclusive.

We say, further, on the implication, that the plaintiffs place considerable reliance upon the second limb of the prohibition that they formulate, namely, whether a law is necessary for the preservation of an ordered society.  This second limb was used to filter out those forms of restrictions, for example, a court’s capacity to declare a litigant vexatious, which are clearly valid.  We say that there are problems associated with the second limb which do not enable it to perform the function which it is necessary for it to perform. 

We say that the second limb used in respect of the implication in Lange as applied in Coleman v Power amounted simply to an assessment of whether the law was compatible with the basis of the freedom; in that case, whether the law was compatible with the maintenance of representative and responsible government.

We say that here, because the basis of the freedom and the principle upon which it depends is defective and vague, it is not tenable to apply a second limb which draws simply upon compatibility or incompatibility with the freedom, as the plaintiffs are forced to formulate a second limb which requires an assessment of the objects of the law directly on its merits. 

We say that this second limb as formulated by the plaintiffs, at least on their broad formulation of the implication, is a test based on matters which are not justiciable and which fly in the face of the acceptance expressed in Union Steamship v King (1988) 166 CLR 1 at 10 that it is not for this Court:

to strike down legislation on the ground that, in the opinion of a court, the legislation does not promote or secure the peace, order or good government of [a State]. 

We say, further, on section 109 that the practical effect analysis developed in the section 92 cases is not applicable to the section 109 cases, and this is our response to question 1. It is our submission, as Justice Gummow indicated earlier this morning, that the practical effect analysis developed in section 62 cases has been directed at assessing whether as a matter of substance, if not form, a State law has infringed a constitutional guarantee.

Thus, we say, in those circumstances such as in North Eastern Dairy, which Justice McHugh raised this morning, it may be necessary to consider the practical operation of the law to determine if a constitutional guarantee has been circumvented, and here we would refer your Honours to North Eastern Dairy (1975) 134 CLR 559 at 607 Justice Mason and 623 Justice Jacobs.

We say that in a context when it is necessary to determine whether a law on its terms appears not to flout a constitutional guarantee such as to be found in section 92, or a prohibition such as to be found in section 90, or a guarantee such as in section 117, then it is relevant to consider the substance and not merely the form of the law to determine if there has been a means of circumventing the strict terms of the guarantee. But we say that the purposes for which the practical effects test has been employed in that context do not come into play under section 109. Under 109 one is not considering whether a legislature has circumvented a constitutional limitation on its legislative power, but rather whether there is an inconsistency between two otherwise valid laws.

Finally, we say that with respect to severance and reading down, we say that in Pidoto v Victoria (1943) 68 CLR 87 at page 109, Chief Justice Latham said that in interpreting legislation it was necessary in reading down laws to ensure that two requirements must be satisfied. The first was that the law itself must indicate:

a standard or test which may be applied for the purpose of limiting, and thereby preserving the validity of, the law -

Without such a standard or test indicated by the law, a reading‑down exercise would impermissibly require the Court to perform a feat which is, in essence, legislative and not judicial.

The second requirement is that it is necessary for the Court to determine whether such reading down would alter the policy or operation of

the statute.  In Re Macks; Ex Parte Saint (2000) 204 CLR 158, Justice Gaudron at pages 190 to 191 considered whether a reading down was required after she had determined that there was an inconsistency in the appeal provisions of the State Jurisdictions Act and the Federal Court Act. There, your Honours, Justice Gaudron determined that having found that inconsistency, there was a need to consider whether the extent of the inconsistency was such that the whole of the law required to be struck down and she undertook a reading‑down exercise and concluded that the law with the sections in relation to the appeal provisions removed, she concluded that that indeed would not give the State law a different operation from the operation that the Parliament had intended.

We say then that with respect to a section 109 inconsistency, having determined that there is an inconsistency, there is a need to determine whether the law would operate differently from the operation intended by the Parliament if only a portion of the law was to be excised and to that extent we submit that there is a form of reading‑down exercise that must be undertaken by the courts. May it please the Court, those are the submissions for Victoria.

GLEESON CJ:   Mr Applegarth. 

MR APPLEGARTH:   May it please the Court. We propose to address briefly the section 109 issue, and then respond to the three questions that have been posed by the Court. On section 109, the starting point for a consideration of any potential section 109 inconsistency is to construe the relevant Commonwealth law, to determine the scope and operation of it. The Commonwealth laws in this matter are concerned with the creation of rights and the conferral of jurisdiction. The Commonwealth laws are not concerned with how persons ascertain their rights, how persons communicate about them, or the extent of their enforcement.

The plaintiffs in this case appropriately acknowledge that the Commonwealth Parliament, in enacting legislation such as the Trade Practices Act, did not intend to cover the field of how persons might communicate about rights, remedies and jurisdiction.  They acknowledge, quite appropriately, that the Commonwealth laws do not make any statement, let alone an exclusive, exhaustive statement, about how persons are informed about their rights. 

As the plaintiffs acknowledge, the Commonwealth provisions were “intended to operate within the setting of other laws”.  The Commonwealth laws create legal rights and leave room for the operation of State laws dealing with communications about legal rights, including the content of such communications, the persons who may conduct legal practice to assist in the enforcement of such rights, and advertising by legal practitioners.  Part 14 of the New South Wales regulation does not impair any legislative scheme created by the Commonwealth laws, because the legislative scheme of the Commonwealth says nothing about how rights are ascertained or the extent of their enforcement. 

The second point we wish to make is that section 109 is concerned with inconsistencies between laws. We submit that it is unhelpful to inquire whether a State law undermines or negates an assumption which is not part of the Commonwealth law, but if it assists to refer to assumptions, as the plaintiffs’ written submissions do, then we submit that the Commonwealth laws firstly make no assumption that people will be informed about their rights in any particular manner, and the Commonwealth laws assume that State laws will or might regulate communications about legal rights, remedies and jurisdiction.

GLEESON CJ:   Well, presumably, except in the case of people who actually end up in court, the Commonwealth laws do not say anything about the provision of legal services in relation to the rights and obligations they confer or impose.

MR APPLEGARTH:   Yes, your Honour.

GLEESON CJ:   In other words, litigation aside, the provision of legal services is a matter for State law.

MR APPLEGARTH:   Yes, and we say if one is talking about assumptions, to quote the plaintiffs’ submissions again, of the efficacy and availability implied in the identified provisions and about – again, their words – meaningful legal rights and remedies exercisable in courts, then the assumption is that the Commonwealth Parliament intended those rights and remedies to be as effective and as available as the legal, social and economic environment into which they are allowed, including the provisional nod of legal aid and the like.

It is because the Commonwealth Parliament did not provide a scheme for communication about rights it is taken to have envisaged that information and advice about legal rights, remedies and jurisdiction will be regulated by other lawyers that we say that no point of inconsistency arises.  For example, at the time the Trade Practices Act was passed and at the time the Federal Court Act of 1976 was passed, solicitors in Queensland were only allowed to advertise in certain legal publications and on certain strict conditions in newspapers.  So if one is talking about the intended operation of those laws, they were presumably intended to operate in the legal environment in which there was a prohibition upon solicitors advertising, irrespective of what the purpose of that restriction may have been.  So we submit that the Commonwealth laws simply do not address how and by whom persons are informed about rights.  Accordingly, there is no conflict between them and State laws.  The two laws simply do not meet.

As to jurisdiction, the State law does not impede courts exercising authority to quell controversies since, on the plaintiffs’ argument, the law impeded controversies from arising.  On the plaintiffs’ argument, potential claimants who are unable or unwilling to ascertain their rights by some means or other than the prohibited advertisements do not generate controversies. 

The plaintiffs’ fundamental proposition is that a law is inconsistent within the meaning of section 109 if its practical operation would detract from or impair the operation of the Commonwealth law, but, as your Honour the Chief Justice observed before lunch, one has to inquire, what is the intended operation of the Commonwealth law? We submit the operation of the Commonwealth law is to create rights and to confer jurisdiction. The laws do not seek to regulate communication about those rights by lawyers or non‑lawyers. They certainly do not seek to regulate the conduct of the legal profession in general.

If it be the case that State laws when enforced means that the rights for which the plaintiffs contend are enforced to a lesser extent than would be the case if those State laws did not exist, for example, laws that constrain who can practise law and laws that constrain advertising by those who are authorised to practise, then, of course, there must be the consequence that rights are enforced and exercised to almost the extent than otherwise would be the case.  But we simply make the point that that is a consequence of the legal setting in which the Commonwealth laws were intended to operate.

If, as the plaintiffs contend, a State law is inconsistent because its practical operation reduces the extent to which rights are enforced and thereby detracts from the operation of the Commonwealth laws, then many other State laws will be inconsistent.  Laws that prohibit persons from practising law unless they are admitted to practice probably have the practical effect of reducing the extent to which rights are enforced.

So, too, the laws that prohibit ambulance‑chasing lawyers promoting their services in hospital wards.  Those laws arguably detract from the enforcement of legal rights, but they and other State laws provide the setting in which the Commonwealth laws were intended to operate.

May we turn to the three questions posed by the Court.  On the question of practical operation, may we adopt the submissions that have been advanced this afternoon by the Attorney‑General for Western Australia.  On the question of reading down and severance, we adopt what has recently been said on behalf of the Attorney‑General for Victoria,

section 109 has its own processes of saving valid revisions from invalid ones and its operation is discussed in Wenn’s Case and we do not think we can take that matter any further.

On the second part of the third question about exclusive legislative power may we adopt what has been said and submitted by the Solicitors‑General for Western Australia and Victoria.  On the other part of question 3 about implications drawn from Chapter III, we submit that no implication drawn from Chapter III really can avail the plaintiffs in this case.  The State law does not interfere with the working of the federal judicial system set up by Chapter III.  It is not incompatible with the institutional integrity of Chapter III courts if, and we emphasise “if”, because it depends upon evidence and inference, if the practical operation of the law is to prevent certain controversies from being litigated in federal jurisdiction then the occasion for the Court to quell a controversy does not arise. 

Chief Justice Griffith in Huddart, Parker & Co v Moorehead (1908) 8 CLR 330 at 357, stated in respect of the judicial power of the Commonwealth:

The exercise of this power does not begin until some tribunal which has power to give a binding and authoritative decision (whether subject to appeal or not) is called upon to take action ‑ ‑ ‑

GUMMOW J:   That is a definition of judicial power.  It is not a definition of legislative power to confer jurisdiction.

MR APPLEGARTH:   Yes, I accept that, your Honour.  If there is to be an implication drawn from Chapter III, it is that a State law cannot interfere with the integrity of the judicial institutions created by Chapter III.  We submit that that implication does not apply in this case, because advertising to potential clients is not necessary for the preservation of the integrity of the judicial institutions for which Chapter III provides.  May it please the Court.

GLEESON CJ:   Thank you, Mr Applegarth.  Yes, Mr Gageler.

MR GAGELER:   Your Honours, four points in, I hope, three minutes.  Point No 1 is that your Honour Justice Gummow asked, has Sir Owen Dixon’s discussion in Wenn been taken up in later cases?  It was taken up by the joint judgment of four members of the Court in Clarke v Kerr 94 CLR 489 at 503, indeed, the passage I drew the Court’s attention to. The second point is that support for the view that covering the field is a species of looking at the practical or substantive operation of the Commonwealth law can, upon reflection, be found in Victoria v The Commonwealth itself, 58 CLR 618 at 630, in the very passage quoted in Telstra v Worthing, because the passage reads as follows:

Moreover, if it appears from the terms and nature of 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 Commonwealth law and so as inconsistent.

I think your Honour Justice McHugh also mentioned the well‑known formulation in Ex parte McLean.  Can we also refer your Honours without taking your Honours to the very last page of the judgment in Ex parte McLean 43 CLR 472 at 487 where Sir Owen Dixon again is talking in terms of the efficacy of the Commonwealth law in the context of covering the field.

The third point concerns the distinction drawn by the Commonwealth Solicitor‑General, and as we understand it also the Attorney-General for the State of Queensland, between a right to sue on the one hand, which is said to be unaffected by this legislation, and on the other hand, the choice to assert the right so conferred.  As we understand the Commonwealth Solicitor‑General he was saying you can have a legal right and, presumably, he would be forced to say you can have a legal duty, but you can be prevented from being told about it.

That was the scenario that was considered by the Court in Watson v Lee 144 CLR 374 in the context of considering the validity of delegated legislation that nobody was told about. Chief Justice Barwick said that the scenario “would be a mark of tyranny”. He said that at page 379, point 4, and Justice Stephen in the same case at page 395 quoted from Lord Justice Scott in the Blackpool Corporation Case the following half sentence:

“vital to the whole English theory of the liberty of the subject, that the affected person should be able at any time to ascertain what legislation affecting his rights has been passed”.

There is also reference in the same extended quotation to doing that through a legal adviser.

GUMMOW J:   We referred to that in 187 CLR 595, various passages, and also, I think, in the Bond Case – one of those cases in 199 CLR 13.

MR GAGELER:   Yes.  I am told Palmer v Ostrowski. That does not ring a bell with me, but so I am told. He says – according to the Commonwealth Solicitor‑General, it was a response both to the section 109 argument and the Chapter III argument, but, really, just compare that with the reasoning adopted in Lange.  The Commonwealth Solicitor‑General would be forced to say, “Well, you still have your right to vote.  It does not matter if you cannot talk about it, even during an election period”.  But in Lange 189 CLR 520 at 560 to 561, in the critical passage, the Court says, well, look, sections 7 and 24 of the Constitution are talking about a real informed right to vote. To pick up the language at the top of page 561:

If the freedom to receive and disseminate information were confined to election periods, the electors would be deprived of the greater part of the information necessary to make an effective choice at the election.

A right is meaningless unless you are equipped with the means of effectively exercising that right, and the very first step is being able to be informed about that right.  The last point ‑ ‑ ‑

KIRBY J:   The New South Wales Attorney said, well, that may all very well be correct, but the federal legislation which is raised that you take, the Judiciary Act, is simply not addressing that issue.  It is addressing the issue of audience and not the issue of how you make audience effective, and therefore there is not a clash.

MR GAGELER:   The federal laws of various sorts are conferring rights; it being implicit in the conferral of those rights that they are to be enjoyed or exercised.  It really goes back to the moratorium legislation ‑ ‑ ‑

GLEESON CJ:   That is the Trade Practices Act, the Safety Rehabilitation, et cetera and the Superannuation Act.

MR GAGELER:   Yes.

GLEESON CJ:   What have any of those Acts to do with insurance and insurance premiums, or, put it the other way, what have insurance premiums to do with any of those acts?

MR GAGELER:   I am not sure where your Honour is going?

GLEESON CJ:   I am just looking at the motive and purpose of these regulations. 

MR GAGELER:   That is a good question.  I am not sure ‑ ‑ ‑

GLEESON CJ:   You cannot insure yourself against contravening section 52 of the Trade Practices Act, can you?

MR GAGELER: No, if your Honours were to go down the track of our preferred Chapter III implication and your Honours were weighing up means and ends, then your Honours would consider this legislation a very blunt instrument to deal with the problem of insurance premiums. Finally, your Honours, in relation to the existence and scope of any incidental power implied into section 77(iii), can we just give your Honours a reference to Russell v Russell 134 CLR 495 at 530 in the judgment of Justice Stephen, where it seems that the previous cases are usefully gathered together. If the Court pleases.

GLEESON CJ:   Do you get another go, Mr Basten?

MR BASTEN:   I do not ask ‑ ‑ ‑

GLEESON CJ:   Then we will reserve our decision in this matter and we will adjourn until 10.15 tomorrow morning.

AT 4.17 PM THE MATTER WAS ADJOURNED