Attorney-General (Vic) v Andrews

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HIGH COURT OF AUSTRALIA

GLEESON CJ,
GUMMOW, KIRBY, HAYNE, CALLINAN, HEYDON AND CRENNAN JJ

ATTORNEY-GENERAL FOR THE STATE OF VICTORIA                   APPELLANT

AND

KEVIN JAMES ANDREWS, MINISTER FOR
EMPLOYMENT AND WORKPLACE
RELATIONS & ORS  RESPONDENTS

Attorney-General (Vic) v Andrews [2007] HCA 9
21 March 2007
M83/2005

ORDER

1.          Appeal dismissed.

2.          Appellant to pay the costs of the first, second and third respondents.

Representation

P M Tate SC, Solicitor-General for the State of Victoria with M K Moshinsky for the appellant (instructed by Victorian Government Solicitor)

D I Star for the first and second respondents (instructed by Australian Government Solicitor and Phillips Fox)

Submitting appearance for the third respondent

P J Hanks QC with R J Orr for the fourth respondent (instructed by Corrs Chambers Westgarth)

Interveners:

D M J Bennett QC, Solicitor-General of the Commonwealth with D I Star intervening on behalf of the Attorney-General of the Commonwealth (instructed by Australian Government Solicitor)

R J Meadows QC, Solicitor-General for the State of Western Australia and R M Mitchell intervening on behalf of the Attorney-General for the State of Western Australia (instructed by State Solicitor's Office (Western Australia))

M G Sexton SC, Solicitor-General for the State of New South Wales and M J Leeming intervening on behalf of the Attorney-General for the State of New South Wales (instructed by Crown Solicitor for New South Wales)

C J Kourakis QC, Solicitor-General for the State of South Australia with S A McDonald and J-A Lake intervening on behalf of the Attorney-General for the State of South Australia (instructed by Crown Solicitor's Office (South Australia))

Notice:  This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.

  1. GLEESON CJ. The issue in this appeal is whether ss 104(1), 108(1) and 108A(7) of the Safety, Rehabilitation and Compensation Act 1988 (Cth) ("the Commonwealth Act") are invalid. They are said to be invalid because they infringe what has been described as the proviso, concerning State insurance, in s 51(xiv) of the Constitution.

  2. The impugned provisions, and the wider statutory context in which they are contained, appear from the reasons of Gummow, Hayne, Heydon and Crennan JJ. Those reasons also explain the intersection between those provisions and Victorian legislation which provides for workers compensation, deals with common law entitlements of injured workers, provides for compulsory insurance in respect of employers' liabilities, and gives the Victorian WorkCover Authority, in effect, a monopoly in respect of that insurance business. The Commonwealth provisions, if valid, enable the third respondent ("Optus") to operate, not under the Victorian compensation scheme, but under the Commonwealth compensation scheme. Optus is a competitor of Telstra Corporation Ltd ("Telstra"), a corporation that was previously a Commonwealth authority, and is within the class of potential eligible corporations described by s 100 of the Commonwealth Act. Because Optus is a competitor of Telstra, and because Telstra is covered by the Commonwealth Act, Optus applied to be made an eligible corporation, and to be licensed under…

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Details
Case
[2007] HCA 9
Decision Date

CaseChat Overview and Summary

The Attorney-General of Victoria appealed to the High Court of Australia against a decision of the Federal Court concerning the interaction between Commonwealth and Victorian workers' compensation legislation. The dispute arose when Optus Administration Pty Ltd was granted a licence under the *Safety, Rehabilitation and Compensation Act 1988* (Cth), which subjected Optus to the federal scheme. The Attorney-General argued that the Victorian *Accident Compensation Act 1985* and the *Accident Compensation (WorkCover Insurance) Act 1993* were invalid to the extent that they were altered, impaired, or detracted from the operation of the federal Act.

The High Court was required to determine two principal legal issues. Firstly, whether the Victorian legislation was invalid due to inconsistency with the Commonwealth Act, specifically concerning the impact of the federal licence on Optus's obligations under Victorian law. Secondly, the Court had to consider whether certain provisions of the Commonwealth Act were invalid as laws with respect to "State insurance" within the meaning of s 51(xiv) of the Constitution, and conversely, whether the Victorian scheme constituted "State insurance" that the Commonwealth Act could not legislate upon.

The Court reasoned that the question of inconsistency under s 109 of the Constitution depended on the substance and operation of the legislation. Drawing on established principles, particularly from *Bourke v State Bank of New South Wales* and *Fairfax v Federal Commissioner of Taxation*, the Court affirmed that the characterisation of legislation is determined by the rights, duties, powers, and privileges it changes, regulates, or abolishes. The Court rejected the submission that the Commonwealth Act indirectly circumvented the exclusion of "State insurance" in s 51(xiv) of the Constitution. The Court found that the licensing provisions of the Commonwealth Act, in their true substance, were not laws with respect to insurance in a way that would invalidate them by reason of their incidental effect on State insurance obligations.

The appeal was dismissed, and the appellant was ordered to pay the costs of the respondents.

Orders

Orders of the court

1. Appeal dismissed. 2. Appellant to pay the costs of the first, second and third respondents.

Background

Background to the litigation

Undeniably, Chapter III courts play a vital role in upholding the federal compact. I see little point in repeated declarations about the vital need to protect the integrity of Chapter III courts and federal jurisdiction under the Constitution[52] if, whenever an appeal is made to this Court to fulfil that role, the party making that appeal is rebuffed and seemingly never-ending accretions to federal legislative power are upheld and enhanced.[52]See eg R v Kirby; Ex parte Boilermakers' Society of Australia (1956) 94 CLR 254 at 267‑268, 274‑276; Wilson v Minister for Aboriginal and Torres Strait Islander Affairs (1996) 189 CLR 1 at 12‑16; Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51 at 102‑103, 116‑117, 134; Re Wakim; Ex parte McNally (1999) 198 CLR 511 at 569 [94], 574‑575 [110]‑[111].The facts, legislation and common ground The facts: The background facts of these proceedings are described in the joint reasons. Set out there is an account of the course of the proceedings in the Federal Court and the decision of Selway J, who dismissed VWA's challenge to the extension to Optus of the federal compensation legislation, the Safety, Rehabilitation and Compensation Act 1988 (Cth) ("the federal Act")[53].[53]Joint reasons at [21]-[30]. There were attractions for Optus (and distinct disadvantages for its employees) in moving from State regulation of workers' compensation entitlements of employees in Victoria to regulation under the federal Act. Importantly, as the primary judge found, entitlements to sue for "common law" damages, in addition to statutory workers' compensation benefits, are significantly larger under the Victorian scheme[54]. The "cap" on the amount payable for non-economic loss under the federal Act was, at the relevant time, $110,000. By comparison, the maximum amount payable for non‑economic loss under the Accident Compensation Act 1985 (Vic) ("the State Compensation Act") was $438,000. As well, there are severe election requirements under the federal Act, as a pre‑condition to the pursuit of a claim for "common law" damages. These introduce traps and burdens for insured employees seeking compensation for civil wrongs by their employer. [54]Victorian WorkCover Authority v Andrews [2005] FCA 94 at [9]. Inferentially for these and other reasons, on 10 June 2004, the federal Minister for Employment and Workplace Relations ("the Minister"), the first respondent, was presented with an application by Optus requesting a declaration under s 100 of the federal Act that Optus was entitled to the grant of a licence under Pt VIII of that Act. On 7 July 2004, the Minister declared that Optus was so eligible. In consequence, on 1 November 2004, the Safety, Rehabilitation and Compensation Commission established under the federal Act ("the Commission"), the second respondent, authorised its chairman to sign a licence under ss 103 and 104 of the federal Act, granting Optus authorisation to accept liability and to manage claims under the federal Act commencing from 1 December 2004. This authorisation was twice varied, effectively such that the licence to Optus came into operation on 30 June 2005. It is that licence, with the purported effect it had to exempt Optus from the operation in Victoria of the State Compensation Act and the integrated provisions of the Accident Compensation (WorkCover Insurance) Act 1993 (Vic) ("the State Insurance Act"), that occasioned these proceedings.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

GLEESON CJ GUMMOW, HAYNE, HEYDON AND CRENNAN JJ KIRBY J CALLINAN J
The appellant submits that s 51(xiv) of the Constitution does not permit the valid operation of the Commonwealth Compensation Act to "remove" by "indirect" means the liabilities of Optus in relation to which the State law imposes the compulsory obligation to obtain and keep in force a WorkCover insurance policy. The impugned provisions were said to have "the effect of dissolving or removing the obligation imposed by [s 7(1)(a) of the] State law to hold insurance with a State insurer". The presence of the State law and the effect which, if valid, the federal law would have upon it were said to render invalid the federal law so as to deny it that effect. Accordingly, in so far as the federal law "annihilated" the application of s 82 of the Victorian Compensation Act to Optus, it was restricting and altering the obligation of Optus to take out State insurance and so was invalid.Conclusions These submissions should not be accepted. It is necessary in that regard first to return to Bourke. That case decided two further points of present importance. First, the Court rejected any suggestion that the protection by s 51(xiii) of "State banking" amounts to what is "an exclusive State power preventing Commonwealth law from touching or affecting State banking in any way"; this suggestion was said to have "strong overtones of the discredited reserved powers doctrine"[29].[29](1990) 170 CLR 276 at 288. Secondly, Bourke decided that the phrase in s 51(xiii) "other than State banking" requires that a law of the Parliament which can be characterised as a law with respect to banking (whether or not it can also be characterised as a law with respect to any other subject-matter of legislative power) nevertheless "does not touch or concern State banking, except to the extent that any interference with State banking is so incidental as not to affect the character of the law as one with respect to banking other than State banking"[30].[30](1990) 170 CLR 276 at 286, 288‑289. In the above formulation of principle respecting s 51(xiii), the Court relied expressly upon the well‑known statement by Kitto J in Fairfax v Federal Commissioner of Taxation[31], namely:"Under [s 51 of the Constitution] the question is always one of subject matter, to be determined by reference solely to the operation which the enactment has if it be valid, that is to say by reference to the nature of the rights, duties, powers and privileges which it changes, regulates or abolishes; it is a question as to the true nature and character of the legislation: is it in its real substance a law upon, 'with respect to', one or more of the enumerated subjects, or is there no more in it in relation to any of those subjects than an interference so incidental as not in truth to affect its character?"That case also is authority for affirming the rejection of reserved powers notions which had influenced the majority decision in R v Barger[32].[31](1965) 114 CLR 1 at 7.[32](1908) 6 CLR 41. What then is the nature of the rights, duties, powers and privileges which, with respect to Optus, the licensing provisions of Pt VIII of the Commonwealth Compensation Act change, regulate or abolish? Does the answer indicate that the substance of those provisions is a law with respect to insurance of any description?

Ratio Decidendi

Legal Principle Established

Established by: GLEESON CJ, GUMMOW, HAYNE, HEYDON AND CRENNAN JJ, KIRBY J, CALLINAN J

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