Attorney-General (Vict); Ex rel Black v The Commonwealth

[1981] HCA 2

HIGH COURT OF AUSTRALIA

Barwick C.J., Gibbs, Stephen, Mason, Murphy, Aickin and Wilson JJ.

ATTORNEY-GENERAL (VICT.); EX REL. BLACK v. THE COMMONWEALTH

(1981) 146 CLR 559

2 February 1981

Constitutional Law (Cth)

Constitutional Law (Cth)—Commonwealth laws providing for grants to States and Territories—Grants required to be applied towards assistance of non-governmental schools—Whether laws for establishing a religion—Validity of laws—States Grants (Schools) Acts 1972 to 1976 (Cth)—States Grants (Schools Assistance) Acts 1976 to 1978 (Cth)—Schools Commission Act 1973 (Cth)—Independent Schools (Loan Guarantee) Act 1969 (Cth)—Appropriation Acts 1972 to 1979 (Cth)—The Constitution (63 &64 Vict. c. 12), ss. 96, 116.

Decisions

1981, February 10.
The following written judgments were delivered: -
BARWICK C.J. The Attorney-General of the State of Victoria on the relation of a number of Australian citizens interested in various capacities in the education of children in Australian States and in federal Territories sues the Government of the Commonwealth and certain of its Ministers for declarations of constitutional invalidity of several statutes enacted by the Commonwealth Parliament. The defendants assert the validity of the impugned statutes. States of the Commonwealth other than Victoria have intervened to support the legislation. (at p575)

2. The claimed ground of invalidity is infraction of s. 116 of the Constitution of the Commonwealth, in so far as that section forbids the passage of a law for establishing any religion. It may be as well to set out immediately the full text of the constitutional provision:
"The Commonwealth shall not make any law for establishing any religion, or for imposing any religious observance, or for prohibiting the free exercise of any religion, and no religious test shall be required as a qualification for any office or public trust under the Commonwealth." (at p575)

3. The statutes which are said to infringe the terms of the section are Appropriation Acts in so far as they appropriate consolidated revenue to fund the implementation of various statutes granting money to the States of the Commonwealth and the granting statutes themselves. These statutes, so far as they are attacked by the plaintiffs, provide for grants to the States on condition that the money so granted is paid by the States to non-government schools to finance their educational programmes, including the erection of buildings therefor. Some of the intended recipients are schools owned and run by religious bodies, as it happens, in large part by the Roman Catholic church or its agencies. (at p576)

4. A great deal of evidence was given as to the extent of the financial support thus provided from Commonwealth funds and as to the manner in which the non-government schools owned and run by religious bodies were conducted. As well, much statistical material, largely in the public domain, was aggregated. Having regard to the opinion I have formed and which I shall shortly express, I have no need to discuss this body of evidentiary material or to attempt to resolve such conflicts as it contains. In my view, it is in truth for the most part irrelevant to the resolution of the question whether the nominated statutes, individually, collectively or in any combination, are or contain a law for establishing a religion. (at p576)

5. In the course of the argument of the case, a considerable number of points have been raised. But in the long run, in my view, few of them need to be resolved. Later in the course of expressing myself I shall mention the more substantial of them. But I proceed immediately to the central question for decision. (at p576)

6. Section 116 in terms applies to all laws, in my opinion, without exception. The Parliament "shall not make any law for establishing any religion". I can find no acceptable reason for excluding from this universality an Appropriation Act or an Act granting money to a State pursuant to s. 96. Whilst there may no doubt be difficulty in forming the conclusion that any such Act is a law for such establishment the possibility cannot be denied. Nor is there, in my opinion, anything in the nature of an Appropriation Act or an Act granting financial assistance which necessarily precludes the application of the description "a law for establishing any religion". (at p576)

7. I should add, perhaps unnecessarily, that each operative provision of a statute is itself a law: and there is no difficulty in applying that concept to the items of an appropriation, or a granting, statute. (at p576)

8. When it is necessary to determine what a statute does or what purpose it affects to achieve, its meaning and operation must be considered in the light of the state of the law then existing; that is to say, the concurrence of the existing statutory law may bring an enactment into collision with such a provision as s. 116 whilst that statute if passed in a void might not offend. It is for that reason that it has been necessary in this case to consider the impugned statutes not merely in isolation but in combination; and, as I have said, to do so, if need be, item by item, or section by section. I might mention, however, that no other existing statutory provision, either of the Commonwealth or of the States, appears to be relied upon to convert what would not otherwise infringe into an offending statute. (at p577)

9. Further, validity will need to be considered against the background of relevant aspects of the current situation of the community at the date of the passage of the statute. But, for my own part, nothing in that current scene is critical to validity in this case. (at p577)

10. It was submitted for the Commonwealth that s. 116, not being a provision granting legislative power but, on the contrary, a provision denying it, ought not to be read as largely as a facultative provision should be read. This submission was based on the view expressed by Sir Owen Dixon in Wragg v. New South Wales (1953) 88 CLR 353 . With the greatest respect to an opinion of Sir Owen, I am unable to accept this submission. I can find no reason why the words of the Constitution should not be given their full effect, whether they be expressed in a facultative or prohibitory provision. In particular, in this case, the emphatic universality of the language of s. 116 seems to me to brook no restraint sought to be imposed by any such doctrine as the submission propounds. The control of the legislature by the Constitution is of the essence of its text. (at p577)

11. An attempt was also made in argument to develop some restriction on the language of s. 116 from the position it occupies in the Constitution being included as it is in Ch. V which bears the heading "The States". But, in my opinion, the language of the section is not in the slightest affected by the position in which the section is placed in the text of the Constitution: nor can its meaning be determined thereby. To suggest that, because of that placement, it should be read as in any sense a direction to the States is to deny effect to simple and direct English. The section plainly says "The Commonwealth shall not" and its final words deal only with any office or public trust under the Commonwealth. (at p577)

12. Before turning to the interpretation of the language of s. 116, having regard to the various submissions made as to its meaning, I wish to say something as to the use in that connexion of material extraneous to the text itself. First, as to the use of the Convention debates: the settled doctrine of the Court is that they are not available in the construction of the Constitution: and, in my opinion, rightly so. An academic exercise to explain historically why the Constitution was cast in a particular form is one thing. To identify the meaning of the words in which the Constitution is expressed by examination of its discursive development is quite another. The former, in my opinion, has no place in the task of construing the text of the Constitution except perhaps in the case of an ambiguity in that text which cannot otherwise be resolved. But, absent the possibility which such ambiguity may present, the task of educing the meaning of the words constitutionally employed derives, in my opinion, no assistance from a consideration of the process by which that text came into being. Indeed, attention to the course of the convention debates might well distract the mind from the proper meaning of unambiguous words in the text. (at p578)

13. That is not to say, however, that that meaning must be assigned without regard to the sense in which the words of the text were understood in the day of their expression. As I have said elsewhere, the then current meaning of the words used in the text is the meaning, the connotation, they must thereafter bear, though in application in later times they may achieve results not within the contemplation of those who wrote the text. In other words, the denotation of the words may expand whilst their connotation remains fixed. (at p578)

14. Secondly, the use of historical material generally is, in my opinion, subject to the same observations and limitations. (at p578)

15. Thirdly, there is the resort to the text of the American Constitution, and in this instance to the text of the Bill of Rights, and to the decisions of the American courts, particularly those of the Supreme Court in construing these texts. The plaintiffs have placed considerable emphasis on this material: indeed, it has formed a major element in their submissions. (at p578)

16. Again, the text of our own Constitution is always controlling. Even similar or identical language in the American instrument to that in our Constitution can, in my view, rarely, if ever, be controlling. But divergencies in the respective texts must inevitably weaken, if indeed they do not destroy, any support which might be sought to be derived from the American text or its construction. In the case of ambiguous language in our own text, language reasonably capable of bearing more than one meaning, a consideration of the American text and of its judicial interpretation, particularly that which preceded the expression of the Australian text, may assist to determine which of those meanings the language of our text should bear. But, in this case, in my opinion, there is no ambiguity in the relevant text. (at p578)

17. Further, in the instant case, not merely is there difference between the Australian text and the language of the relevant provisions of the Bill of Rights, but that language had received an interpretation before the adoption of our Constitution. It later had further and at times different interpretation. The adoption of such diverging language thus has a more than usual significance. It can scarce be said with reason that the use of different, and as I think radically different, language in our Constitution, indicated an intention thereby to achieve what the American courts had decided to be the result of the American text. I am not called upon here to discuss these judicial pronouncements. It suffices to say that, for myself, I would not necessarily agree with them; indeed, in some respects I could not accept them. But, more importantly, the very divergence in the language of our text from the corresponding terms of the Bill of Rights, assuming those decisions rightly assigned meaning to them as at the time of our federation, makes it in my view more than unsatisfactory to attempt to apply to our text the meaning and operation given to the relevant portion of the Bill of Rights. (at p579)

18. I find the language of s. 116 in the relevant part quite unambiguous and have no need to attempt to give it meaning by analogy of, or by derivation from, that of the Bill of Rights or from the interpretations it had received. Consequently, I have no need to dwell on the radical difference in the nature of the Bill of Rights as a whole and that of our Constitution and of s. 116 in particular and the consequences that difference in nature may have on any attempt to use the language and circumstances of the one as an aid to the construction of the other. (at p579)

19. The divergence in language to which I have earlier referred is apparent from the use of the word "respecting" in the American text and the word "for" in s. 116. What the former may fairly embrace, quite clearly the latter cannot: and that is so, in my opinion, even without placing critical significance on the purposive nature of the Australian expression and the lack of such an element in the American text. (at p579)

20. However, in the interpretation and application of s. 116, the establishment of religion must be found to be the object of the making of the law. Further, because the whole expression is "for establishing any religion", the law to satisfy the description must have that objective as its express and, as I think, single purpose. Indeed, a law establishing a religion could scarcely do so as an incident of some other and principal objective. In my opinion, a law which establishes a religion will inevitably do so expressly and directly and not, as it were, constructively. (at p579)

21. The inhibition of s. 116 is directed to the making of any laws for establishing any religion. Although, in my opinion, not critical in the instant case, the word "religion" in s. 116 is not really satisfied by a sect or department of the one religion. Hence, the Christian faith, though practised according to particular doctrines by different churches, is in truth one religion. Islam provides another, and so on. I gravely doubt whether it is correct to regard the different Christian churches as separate and distinct religions for the purposes of s. 116. (at p580)

22. It may well be possible to conclude from this circumstance that the section is not in any wise directed against discrimination of one church in relation to others. But I find no need in this case to seek support for my own opinion by any such construction of s. 116. Maybe what I am about to say further explains why I do not here pursue the possibility. (at p580)

23. The establishment of any one of the Christian churches would, in my opinion, amount relevantly to the establishment of the Christian religion and a law to establish that church would be a law for establishing a religion. Thus, in practical terms, there is really no need finally to decide in this case whether the expression "any religion" in s. 116 is equivalent to any church or section of a religion. Whatever the conclusion in this connexion, the Commonwealth may not make any law for establishing one of the Christian churches because that, in my opinion, would be to establish the Christian religion within the meaning and operation of s. 116. (at p580)

24. The operative words of s. 116 are addressed to the Commonwealth and inhibit the making of laws by the Commonwealth. That means they are directed to the Parliament. Included in the laws the making of which the section proscribes are laws which authorize the making of subsidiary laws in the form of proclamations, statutory rules or by-laws. The prohibition will include such subsidiary legislation which is within the authority of an Act of the Parliament but which in itself offends the terms of the section. It may be, of course, that in authorizing subsidiary legislation which could offend the constitutional provision, the authorizing statute may itself offend. But room must be left for the rare occasion when this result does not necessarily follow. If, of course, the subsidiary legislation is outside or beyond the scope of the statutory authority, it will be invalid for that reason though it might also, if it were valid, in its terms transgress the inhibition of the section. (at p580)

25. Here, we are only concerned with the activity of the Parliament itself, with statutes passed by the Parliament, with laws made by it. (at p580)

26. The next observation I wish to make as to s. 116 is that it is directed to the making of law. It is not dealing with the administration of a law. But, if that administration is within the ambit of the authority conferred by the statute, and does amount to the establishment of a religion, the statute which supports it will most probably be a statute for establishing a religion and therefore void as offending s.116. That is so, not because of the manner of the administration but because the statute, properly construed, authorizes it. I say most probably, because the purposive content of the expression "for establishing" must, in any case, be satisfied. (at p581)

27. The time at which to determine vis a' vis s. 116 the validity of a law is therefore the time of its making, of its passage by the Parliament. As I have said, it will be tested against the situation of law and fact current at the time of its enactment. It must then be judged for what in that situation it does and what upon its reasonable construction it authorizes. The manner of its administration can have no independent effect. What may lawfully be done in its administration forms part of the consideration of the validity of its enactment: and what can be lawfully done is determined by the construction of the statute, the determination of its meaning and its operation. (at p581)

28. These considerations emphasize the dominant importance of the terms of the statute itself when a question as to the application of s. 116 arises. It is the making of the law which is proscribed. Consequently, the construction of the statute and the determination of its operational effect will be the determinant. Thus, in my opinion, the question in this case could have been decided on demurrer, even if a cautious defendant wished to plead as well as demur. (at p581)

29. I have now to deal with the meaning of the operative words of s. 116 before applying them to the statute under challenge in this case. (at p581)

30. As I have already indicated, I find no ambiguity in the language of s.116. The meaning which "establishing" in relation to a religion bore in 1900 may need examination. But that is not because of ambiguity but to ensure that the then current meaning is adopted. However, whilst I have considered what was the current significance of "establishing any religion" in 1900, I am of opinion that there has been no real change in the significance of the words over the years which have intervened. Doubtless, because of our colonial origins and our remoteness from England, the reality of an established religion has not often been borne in upon the public of this country. Further, even in England, the ramifications or consequences of the existence of an established church have become both less and less apparent. But what would be involved in establishing a religion has, in my opinion, remained constant. In my opinion, as used in an instrument brought into existence at the turn of the century, establishing a religion involves the entrenchment of a religion as a feature of and identified with the body politic, in this instance, the Commonwealth. It involves the identification of the religion with the civil authority so as to involve the citizen in a duty to maintain it and the obligation of, in this case, the Commonwealth to patronize, protect and promote the established religion. In other words, establishing a religion involves its adoption as an institution of the Commonwealth, part of the Commonwealth "establishment". One can perceive these concepts in the decision of the House of Lords in General Assembly of Free Church of Scotland v. Lord Overtoun (1904) AC 515 . I feel no doubt that this is the sense in which the relevant part of the language of s. 116 was used when our Constitution was formed. As I have indicated, I think the words would mean the same if constitutionally used today. Thus what s. 116 forbids is the passage of a law which will erect a religion into such a relationship to the body politic of the Commonwealth as I have attempted to describe. (at p582)

31. It is apparent to my mind that, if for no other reason, the inclusion in s. 116 of the prohibition of any law imposing any religious observance or for prohibiting the free exercise of any religion and the proscription of any religious test indicate clearly enough the precise limits of the total inhibition of the section. The absence of any prohibition upon the giving of aid to or encouragement of religion from the entire collocation of s. 116 is eloquent. No imposed observance: free exercise of religion: no religious test. No established religion. Otherwise the powers with respect to subject matter and in the nomination of the conditions of a grant to States is plenary and without limitation except in so far as the description of the subject matter may import limitation. (at p582)

32. Here, the impugned legislation in substance appropriates, and authorizes the disbursement of, part of the consolidated revenue of the Commonwealth for the financial support of the education of Australians by and according to the regiment of non-government schools, including such schools as are owned and conducted by bodies professing and practising the Christian religion, albeit according to the doctrines of a particular church. The financial aid is expressly limited to the educational activities of such schools. (at p582)

33. Let it be supposed for the purposes of this discussion, though it must not be thought that by the assumption I am expressing a concluded view in that sense on my own behalf, that opportunity is taken by those in control of such educational activities to utilize some part of the time set aside for such educational activities to foster the practice of the Christian religion, albeit according to the practices or doctrines of a particular church, and let it be supposed that buildings to the cost of the construction of which money derived from the legislation has been applied, are on occasions used for some religious activity of the owner of the premises: I do not think the material proffered on behalf of the Attorney-General of Victoria or the relators on whose behalf he sues takes the matter any further than the assumptions I have just described. (at p583)

34. Can it be said that, therefore, the law made by the Parliament is a law for the establishment of a religion in the sense which I am prepared to give to those words, and thus in breach of the inhibition imposed on the Parliament by the Constitution? Nothing in the laws made by the Parliament expressly authorizes the use of Commonwealth funds for those purposes, though it might justly be said that no provision of that law expressly or adequately prohibits the schools or those conducting them from using the occasion or the buildings assisted or built with money provided for support of educational activities to so use the occasion or the buildings. I cannot think that it can rationally be said that by not preventing such a use of the occasion or buildings which I have assumed, the law providing the funds for the forwarding of the education of Australians by non-government schools is a law for establishing a Christian religion. A law which in operation may indirectly enable a church to further the practice of religion is a long way away from a law to establish religion as that language properly understood would require it to be if the law were to be in breach of s.116. It would not be enough that the law allowed such activity on the part of the owners of the schools. The law must be a law for it, i.e. intended and designed to set up the religion as an institution of the Commonwealth. (at p583)

35. It might be that the same result might well follow even if it be right and proper to treat the situation I have assumed as authorized by the legislation under attack. But I have no need to decide the question for I have been unable to find any statutory authorization by the Commonwealth of any religious activity on the part of the non-government schools in the course of their educational activities. That there is no statutory prohibition of such religious activities in the course of authorized educational activities is scarce enough to make the appropriation and granting statutes, laws for establishing a religion in the only sense, in my opinion, those words can have in the Constitution. What the Constitution prohibits is the making of a law for establishing a religion. This, it seems to me, does not involve a prohibition of any law which may assist the practice of a religion and, in particular, of the Christian religion. It is the establishment of such a religion which may not be effected by a law of the Commonwealth designed to do so. I have already, though perhaps only incidentally, indicated that the text of s. 116 refers to legislation which is designed to establish a religion, which intends and seeks that end, which is in that sense purposive in nature. I have concluded, therefore, that, even on the assumptions I have made, the challenge to the validity of the Acts here challenged should fail. (at p584)

36. A separate attack was made on the granting statutes. It was said that, because of the detailed nature of the conditions attached to the grant, the granted State became a mere conduit pipe to transmit the granted amount of money from the Commonwealth to the designated recipients for purposes in respect of which the Commonwealth has no legislative power. From this, it was said, the conclusion follows that these grants were not grants of financial assistance to the States. (at p584)

37. The submission gains no support from the decisions of this Court. In fact, the Court has earlier decided that grants on like detailed conditions relating to matters over which the Commonwealth lacks legislative power are validly made under s. 96 and that the conditions are enforceable according to their terms. Perhaps the extreme case was seen in the Uniform Tax legislation in which the condition of the grant was the abstention by the recipient State from exercise of its own legislative power. (at p584)

38. But, in any case, in my opinion, the submission is not acceptable. The conditions of the grant in this case relate to a subject matter of State power. Education is within the State legislative area: and its furtherance is undoubtedly a concern of the State. The operation of the conditions depends on the State's acceptance of the grant. It is no answer to the consequence of this fact that economically speaking a State may have little choice. Again, I should think the Uniform Tax conditions were a dramatic illustration of economic necessity. But the granting legislation had the support of this Court. The State's acceptance must involve the conclusion that the provision of funds to the recipients indicated by the conditions of the grant was, at least in general, in line with State policy. I say "in general", because it may be that whilst the State would favour expenditure, e.g. on non-government schools, if it were sufficiently in funds without Commonwealth assistance, it might choose to distribute its funds in some different manner and perhaps with different safeguards, though broadly with the same objective. In such circumstances, it cannot, in my opinion, be said with reason that the funds granted by the Commonwealth are of no assistance financially to the States. Further, however much a State might prefer to pursue the objective of better educational facilities for the dwellers in that State, it cannot be denied, in my opinion, that the receipt and expenditure of the grant lessens the demands on the Treasury of the State. The submission of the plaintiffs in this respect is, in my opinion, unacceptable. (at p585)

39. I have now read the reasons for judgment prepared by my brother Wilson. The detail of the impugned statutes and of the statistical material aggregated in the course of the case is there set out. (at p585)

40. I agree with the conclusions to which my brother has come and which he expresses in his reasons for judgment. I agree substantially with the reasons he gives for arriving at those conclusions. Any divergencies can be seen in the reasons I have myself expressed for concluding that the claims of the Attorney-General for the State of Victoria are insupportable and that his action should be dismissed. The statutes attacked in the action are valid laws of the Commonwealth and not in any wise in breach of s.116. (at p585)

GIBBS J. This action is brought to challenge the validity of a number of Acts of the Commonwealth Parliament under which financial assistance in provided to schools in the States and in the internal Territories of the Commonwealth. The legislation is challenged in so far as it results in benefits being provided to schools which are not conducted by or on behalf of the government of a State or of the Commonwealth ("non-government schools"), particularly such schools as are conducted by or on behalf of, or are associated with, religious bodies ("church schools"), although if one ground on which the attack is made proves successful it will also invalidate the legislation in its application to government schools. The Acts under which financial assistance is or has been provided to schools in the States are the various States Grants (Schools) Acts and States Grants (Schools Assistance) Acts passed in and between the years 1972 to 1979 (there are eleven such Acts) and the plaintiffs claim that those Acts are beyond the powers of the Commonwealth Parliament and invalid. The plaintiffs also assert the invalidity of the Schools Commission Act 1973 which constitutes a Commission whose functions include advising the Minister on matters which in fact are relevant to the exercise of his discretion under the Acts. Payments to or for the benefit of schools in the Australian Capital Territory and the Northern Territory have been made under the authority of general Appropriation Acts, and certain loans to school authorities in those Territories have been guaranteed by the Treasurer on behalf of the Commonwealth under the Independent Schools (Loans Guarantee) Act 1969, and the plaintiffs claim that the Appropriation Acts to the extent to which they appropriate moneys to be spent on church schools in the Territories, and the Independent Schools (Loans Guarantee) Act 1969, are also invalid. (at p586)

2. The first plaintiff, the Attorney-General for the State of Victoria, sues on the relation of a number of persons, some of whom also sue individually. The remaining fourteen plaintiffs are persons who reside either in Victoria, New South Wales, Tasmania or the Australian Capital Territory and who pay taxes to the Commonwealth. Some of those plaintiffs are the parents of children who attend government schools. The defendants are the Commonwealth, three Ministers of State of the Commonwealth, and two representatives of non-government schools. (at p586)

3. After evidence had been taken before Murphy J., the case was referred to the Full Court for argument. I intend no disrespect to the very thorough and careful case presented by the plaintiffs when I say that it will be sufficient for the purposes of this judgment if I state only in the barest outline the facts in the light of which the validity of the legislation has to be considered, and the nature of the legislation itself. Throughout Australia primary and secondary education is compulsory for all children below a specified age. Pupils may receive that education either at government schools or at non-government schools. Most of the non-government schools are church schools, and of those most are Roman Catholic schools. The non-government schools, whether or not they are church schools, impart education in ordinary secular subjects, generally speaking in accordance with the same curriculum as that adopted in government schools, and to an academic standard comparable with that in government schools, and under a system of supervision provided by State law. Some of the non-government schools provide a very high standard of education. Of course, most church schools give religious as well as secular instruction and, at least in the case of schools conducted by some religious denominations, are intended to serve the purpose of inculcating in their pupils the religious beliefs and values of the church concerned. It may be accepted that in some cases, if not in most, church schools are seen by the church as fulfilling a religious as well as a purely educational purpose: their functioning is regarded as an integral part of the religion which supports the schools. (at p587)

4. Non-government schools derive income from fees and other private sources, and receive financial assistance from the States as well as that which the Commonwealth provides under the statutes whose validity is now in question. The statutes passed from time to time vary in detail, but it is sufficient to take the States Grants (Schools Assistance) Act 1979 as an example. That Act provides that "financial assistance is granted to a State" in respect of expenditure in relation to government and non-government schools in the State. In the case of non-government schools, the expenditure may be in respect of an approved building project or equipment project (s.16). Such a project shall not be approved by the Minister if the sole or principal object, or one of the principal objects, of the project is to provide facilities for use, wholly or principally, for or in relation to religious worship: s. 15(2). The financial assistance provided may also be in respect of recurrent expenditure, whether of an approved school system (s.18) or of a non-systemic school (s.19) or in connexion with migrant education (ss. 21 and 22) or disadvantaged schools (ss.24 and 25) or special schools (s.27). The amount payable in each case depends on the discretion of the Minister, subject to specified statutory limits. No express restriction on expenditure for religious purposes, similar to that contained in s.15(2), appears in these sections. Each of the sections under which these grants may be made imposes conditions on the grant. These conditions oblige the State to pay to the approved authority of the school or school system as the case may be an amount equal to that paid to the State in relation to the project, school or school system. A further condition is that the State shall not make a payment unless the approved authority has agreed with the State to ensure that the money is applied for the purpose for which it was approved, and that if it does not fulfil any condition it will, if the Minister so determines, repay to the State such amount (not greater than that paid) as the Minister determines. By s.29 further conditions are imposed on the State-(a) to pay to the Commonwealth any amount repaid by or recovered from an approved authority under the conditions of the agreement and (b) to repay to the Commonwealth such amount (not greater than that paid to it) as the Minister determines if the State does not fulfil any of its conditions. The condition requiring an agreement of the kind mentioned above to be made between the approved authority and the State was first introduced by the Act of 1977; before that time, the relevant condition was that the State should make a repayment to the Commonwealth if the school authority did not fulfil the conditions of the grant. (at p588)

5. The argument on behalf of the plaintiffs is that this legislation is invalid for two reasons--first, because it is not authorized by s.96 of the Constitution--the section under which the Commonwealth claims that the legislation may be supported--and secondly because the Acts are laws "for establishing any religion" and therefore infringe s. 116 of the Constitution. The laws which provide financial assistance for church schools in the Territories are said to be invalid only on the second of these grounds. (at p588)

6. At the outset there arises the question whether the plaintiffs or any of them have standing to bring this action. In my opinion it is clear that the Attorney-General for Victoria has a locus standi to sue for declarations of the invalidity of the Acts in question in so far as they apply to schools in Victoria. Indeed in Victoria v. The Commonwealth (the Roads Case) (1926) 38 CLR 399 proceedings were brought by two States and their Attorneys-General to challenge the validity of an Act on the ground that it was not a proper exercise of the power conferred by s. 96, and the Court said (1926) 38 CLR, at p 407 , that the action was properly constituted. In Attorney-General (Vict.) v. The Commonwealth (the Clothing Factory Case) (1935) 52 CLR 533, at p 556 , Gavan Duffy C.J., Evatt and McTiernan JJ. said:

"In our opinion, it must now be taken as established that the Attorney-General of a State of the Commonwealth has a sufficient title to invoke the provision of the Constitution for the purpose of challenging the validity of Commonwealth legislation which extends to, and operates within, the State whose interests he represents."

In Attorney-General (Vict.) v. The Commonwealth (the Pharmaceutical Benefits Case) (1945) 71 CLR 237, at p 272 , Dixon J. said that this statement expressed the settled doctrine of the Court, and himself restated the principle by saying that the Attorney-General of a State has "a locus standi to sue for a declaration wherever his public is or may be affected by what he says is an ultra vires act on the part of the Commonwealth or of another State". Those statements of principle would I think be applicable in the present case, where the Acts operate on the State of Victoria itself, and on schools within the State. It does not seem to me material that the State of Victoria has accepted the grants of financial assistance made under the Acts. The State is perfectly entitled to say that it will accept the financial assistance if the Acts are valid and the conditions are binding, but that it nevertheless wishes to challenge the validity of the Acts and the conditions. The Commonwealth however says that the Appropriation Acts under which moneys are paid for the assistance of schools in the Territories, and the Independent Schools (Loans Guarantee) Act 1969 under which guarantees are given to enable such schools to borrow money, have no operation in Victoria, and that the Attorney-General for Victoria has no standing to challenge their validity. With all respect I cannot agree. I remain of the opinion which I expressed in Victoria v. The Commonwealth and Hayden (the A.A.P. Case) (1975) 134 CLR 338, at p 381 , which was the case of a challenge to an Appropriation Act, that "it is involved in the very nature of the Constitution that either the Commonwealth or a State should have standing to institute legal proceedings when the other has exceeded its constitutional authority." Mason J. expressed a similar view in the same case (1975) 134 CLR, at pp 401-402 , but Stephen J. disagreed (1975) 134 CLR, at pp 387-390 and Murphy J. was inclined to agree with him, although he said that if it were claimed that the appropriation or expenditure were in breach of any constitutional prohibition then the position might be different (1975) 134 CLR, at pp 424-425 . In my opinion even where no question arises as to the limits interse of the powers of the Commonwealth and the State, the Attorney-General of a State may sue to compel the Commonwealth to observe the fundamental law of the Constitution, which the citizens of any State has an interest to maintain, although it may not be such a special interest as would enable them as individuals to bring the suit. On the other hand, as at present advised, I gravely doubt whether the other plaintiffs have standing to sue; I hardly think that the fact that they are taxpayers, and in some cases parents of children at government schools, gives them a special interest in the subject matter of the action within the principles stated in the cases collected in Australian Conservation Foundation Inc. v. The Commonwealth (1980) 146 CLR at pp 526-528 . However in Canada an exception to the general principle appears to have been recognized in constitutional cases (Thorson v. Attorney-General(Canada) (No. 2) (1974) 43 DLR (3d) 1 ) and since, for reasons which will appear, it is unnecessary to decide whether these individual plaintiffs have standing, I would express no concluded opinion on the question. (at p590)

7. I turn then to consider whether the Acts in question were Acts by which the Parliament granted financial assistance to the States within s. 96 of the Constitution. That section provides as follows:
"During a period of ten years after the establishment of the Commonwealth and thereafter until the Parliament otherwise provides, the Parliament may grant financial assistance to any State on such terms and conditions as the Parliament thinks fit." (at p590)

8. The argument on behalf of the plaintiffs was that the Acts gave financial assistance not to the States but to the schools, or, in the case of capital grants, to the owners of the property on which the schools were conducted. The moneys granted did not enure for the benefit of the State Treasuries, but were given to the States to be passed on immediately to the schools. The States played no part in deciding what schools got the money, how much was to go to each recipient or how the moneys should be spent, and were, it was said, no more than passive instruments by which the Commonwealth transmitted its moneys to the persons whom it had decided to assist. (at p590)

9. The submission that a grant made in these circumstances is not authorized by s.96 cannot be upheld without overruling the decision of this Court in Deputy Federal Commissioner of Taxation (N.S.W.) v. W.R. Moran Pty. Ltd. (1939) 61 CLR 735 , which was affirmed by the Judicial Committee (1940) 63 CLR 338; (1940) AC 838 . In that case it had been agreed by the Commonwealth and all the States that it was necessary to take action to stabilize the price of wheat, and for this purpose the Commonwealth Parliament imposed an excise duty on flour, and thus obtained funds out of which moneys could be paid to assist wheat growers. However, since Tasmanaia alone among the States produced very little wheat, so that only a very small part of the money raised in Tasmania by the excise would be returned to wheat growers in that State, it was decided to make a special provision in relation to Tasmania. It was not possible to except Tasmanian consumers from the excise, for that would have been contrary to s. 51 (ii) of the Constitution. Acts were passed which provided that the proceeds of the excise should go into a fund which was to be applied in making payments to the States in proportion to the quantity of wheat produced, and that these grants should be paid to each State upon condition that the money received should be distributed to the wheat growers in that State in proportion to the amount of wheat sold or delivered for sale by each wheat grower in the relative year. Provision was made for an extra grant to Tasmania which it was intended should be distributed among the persons in that State who had paid the excise. It was held that the grants to the States on the conditions stated were validly made under s. 96. The effect of this decision was stated by Dixon C.J. in Victoria v. The Commonwealth (the Second Uniform Tax Case) (1957) 99 CLR 575, at pp 606-607 as follows:

"Now it might have been thought that these provisions were outside s.96 because they gave no assistance to the State as a body politic but used it only as a conduit or an agency by which the moneys would be distributed among the wheat growers of the State. . . . In fact, however, the provision was considered to amount to financial assistance to the State notwithstanding that the State was bound to distribute the money it received to the wheat grower. The decision, which was affirmed in the Privy Council, without express reference to this use of s. 96, must mean that s. 96 is satisfied if the money is placed in the hands of the State notwithstanding that in the exercise of the power to impose terms and conditions the State is required to pay over the money to a class of persons in or connected with the State in order to fulfil some purpose pursued by the Commonwealth and one outside its power to effect directly. I should myself find it difficult to accept this doctrine in full and carry it into logical effect, but the decision shows that the Court placed no limitation upon the terms or conditions it was competent to the Commonwealth to impose under s. 96 and regarded the conception of assistance to a State as going beyond and outside subventions to or the actual supplementing of the financial resources of the Treasury of a State."

None of the parties in the present case asked us to overrule Deputy Federal Commissioner of Taxation (N.S.W.) v. W.R. Moran Pty. Ltd., but the plaintiffs sought to distinguish that case on the ground that the legislation there in question was promoted by the States, and on the further ground that the conditions of the grants left it to the States to select the individual persons to whom the moneys were to be distributed and the amount payable to each. The fact that the States combined to give effect to the scheme shows that they were prepared to accept the conditions of the grants, but that fact has no bearing on the question whether, in the circumstances mentioned, it was right to say that there was a grant of financial assitance to a State, or whether the conditions of the grant were valid. Further, the circumstance that a State was called upon to apply the formula laid down in the condition of the grant does not alter the fact that the State received the money only on condition that it be paid out in the manner indicated by the Commonwealth. I find it impossible to distinguish Deputy Federal Commissioner of Taxation (N.S.W.) v. W.R. Moran Pty. Ltd. (1939) 61 CLR 735 from the present case. That case decides that if money is granted by the Commonwealth to a State, there is a grant of financial assistance to the State within s. 96 notwithstanding that the condition of the grant requires the State to pay all the moneys away. The State cannot be compelled to accept the moneys, and the fact that it does accept them may be regarded as an acknowledgement of the fact that the moneys granted are of assistance to the State. (at p592)

10. The question that next arises is whether the Commonwealth can, by a condition of a grant made under s. 96, evade the prohibition contained in s. 116 of the Constitution. That section is in the following terms:

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

The question is whether if the conditions of a grant of financial assistance require the State to which the grant is made to establish a religion within the meaning of that section, the Act by which the grant is authorized is invalid as contrary to s. 116. It is plain, as Deputy Federal Commissioner of Taxation (N.S.W.) v. W.R. Moran Pty. Ltd. shows, that a condition may be imposed under s. 96 for the purpose of persuading a State to do something which the Commonwealth itself could not do. Pye v. Renshaw (1951) 84 CLR 58 provides another example. The cases show that the Parliament has wide power to fix the terms and conditions of a grant made under s. 96. In Victoria v. The Commonwealth (the Roads Case) (1926) 38 CLR, at p 406 , it was said that the Federal Aid Roads Act 1926 was "plainly warranted by the provisions of s. 96 of the Constitution, and not affected by those of s. 99 or any other provision of the Constitution", and the statement that grants made under s. 96 are not affected by any other provision of the Constitution was repeated in Deputy Federal Commissioner of Taxation (N.S.W.) v. W.R. Moran Pty. Ltd. (1939) 61 CLR, at pp 763, 771 . On the other hand, in Adelaide Company of Jehovah's Witnesses Inc. v. The Commonwealth (1943) 67 CLR 116, at p 123 , Latham C.J. said that s. 116 "prevails over and limits all provisions" (of the Constitution) "which give power to make laws", and McTiernan J. (1943) 67 CLR, at p 156 said that the section "imposes a restriction on all the legislative powers of Parliament". I consider that the ordinary rules of statutory construction should be applied, and that ss. 96 and 116 should be read together, the result being that the Commonwealth has power to grant financial assistance to any State on such terms and conditions as the Parliament thinks fit, provided that a law passed for that purpose does not contravene s. 116. It is one thing to say that the Parliament, by a condition imposed under s. 96, could achieve a result which it lacks power to bring about by direct legislation, but quite another to say that the Parliament can frame a condition for the purpose of evading an express prohibition contained in the Constitution. As the Judicial Committee pointed out in W.R. Moran Pty. Ltd. v. Deputy Federal Commissioner of Taxation (N.S.W.) (1940) 63 CLR, at pp 346-347; (1940) AC, at pp 855 , the powers given by s. 51 of the Constitution are expressly made "subject to this Constitution" which includes s. 96. On the other hand, s. 116 is not expressed to be subject to the Constitution. Of course the same is true of s. 99, but that section speaks of "any law or regulation of trade, commerce or revenue" and a law under s. 96 cannot properly be regarded as such a law: see Deputy Federal Commissioner of Taxation (N.S.W.) v. W.R. Moran Pty. Ltd. (1939) 61 CLR, at p 775 . However, whether or not the provisions of s. 51 can be "completely disregarded" in deciding upon the validity of a law made under s. 96 (as to which see W.R. Moran Pty. Ltd. v. Deputy Federal Commissioner of Taxation (N.S.W.)) (1940) 63 CLR, at pp 349-350 , I consider that the Parliament, acting under s. 96, cannot pass a law which conflicts with s. 116. To take an unlikely example, an Act which granted money to a State on condition that the State would prohibit entirely the exercise of a particular religion would, in my opinion, be a law for prohibiting the free exercise of that religion, and would be invalid. (at p593)

11. It remains a question whether s. 116 applies to laws made under s. 122 for the government of any Territory. This question is relevant to the validity of the Independent Schools (Loans Guarantee) Act 1969. There are strong dicta, in addition to those in the Jehovah's Witnesses Case (1943) 67 CLR 116 which I have already cited, which support the view that s. 116 does apply to such laws: Lamshed v. Lake (1958) 99 CLR 132, at p 143 ; Teori Tau v. The Commonwealth (1969) 119 CLR 564, at p 570 , but those dicta are in my opinion very difficult to reconcile with the decision in R. v. Bernasconi (1915) 19 CLR 629 , where it was held that the power given by s. 122 is not restricted by s. 80 of the Constitution - see also Spratt v. Hermes (1965) 114 CLR 226, at p 250 . If s. 122 is limited by s. 116, the latter section will have a much larger operation in the Territories than in the States, for although s. 116 is contained in Ch. V of the Constitution which is headed "The States" it is not expressed to bind the States. However, for the reasons already given, it is in any case necessary to consider the effect of s. 116 in the present case, and in view of the conclusion which I have reached on that question I need not finally decide whether the section is applicable to laws made under s. 122. (at p594)

12. I then come to what is the most important question in the case, whether any of the laws now challenged is a law "for establishing any religion" within the meaning of s. 116. The primary argument submitted for the plaintiffs is that the relevant words of s. 116 - "the establishment clause" - prohibit the Commonwealth from making any law which provides any recognition, aid or support (financial or otherwise) to one or more religions or to religion generally, and that the legislation in question provides financial assistance to the religions which conduct, or are closely associated with, the schools that receive the moneys. Alternatively it was submitted that s. 116 should be construed as prohibiting the giving of recognition, aid or support to one or more religions in preference to other religions, and that the legislation is invalid within that test, because it does not prohibit the Minister from giving preference to some non-government schools over others on account of their religious affiliation, and because in the nature of things some religions must benefit more than others from the assistance provided under the Acts, because more schools are conducted by, or associated with, some denominations than by others. A further alternative submission was that the legislation, and in particular the Schools Commission Act 1973, requires the Commonwealth to be excessively involved in religion and that that is a contravention of s. 116. (at p594)

13. Whether any of these arguments can succeed depends in the first place on the proper meaning of the expression "establishing any religion" in s. 116. "Establish" has in its ordinary sense a variety of meanings. According to the Oxford English Dictionary those meanings include: "2. To fix, settle, institute or ordain permanently, by enactment or agreement . . ."; "3. To set up on a secure or permanent basis; to found . . ."; "4. To place in a secure or permanent position; to install and secure in a possession, office, dignity, etc; to 'set up' . . . in business."; and "5. To set up or bring about permanently (a state of things) . . . . Also, to secure for oneself, gain permanently (a reputation, a position)." However the meaning which is most apposite when used in relation to religion is described by the Oxford English Dictionary as follows:

"7. From 16th c. often used with reference to ecclesiastical ceremonies or organization, and to the recognized national church or its religion; in early use chiefly pass. in sense 2 (esp. in phrase by law established, i.e. 'prescribed or settled by law'), but sometimes with mixture of senses 3-5. Hence in recent use: To place (a church or a religious body) in the position of a national or state church."

The word "established" is defined in Halsbury, 4th ed., vol. 14, par. 334 as follows: "The word 'established' in relation to a church is used in various senses. In one sense every religious body recognized by the law, and protected in the ownership of its property and other rights may be said to be by law established. In another sense the words 'established church' are used to mean the church as by law established in any country as the public or state-recognized form of religion. The process of establishment means that the state has accepted the church as the religious body which in its opinion truly teaches the Christian faith, and has given to it a certain legal position and to its decrees, if given under certain legal conditions, certain legal sanctions. What is called the 'establishment' principle in relation to the church is the principle that there is a duty on the civil power to give support and assistance to the church, though not necessarily by a way of endowment, and where this principle prevails a church is said to be established when it receives such support and assistance. In the fullest sense a church is said to be established when all the provisions constituting the church's system or organization receive the sanction of a law which establishes that system throughout the state and excludes any other system. The Church of England is established by law in England." (at p595)

14. It seems to me that the word "establish", when used in relation to religion, has four possible meanings. The widest of these meanings is simply to protect by law. The word was used in that sense by Lord Mansfield in Evans v. The Chamberlain of London (1842) 2 Burn's Eccl Law 207 "when, speaking of the Toleration Act, he is reported to have said, that non-conformity is rendered by that act 'not only innocent but lawful', and that the protecting clauses of the statute 'have put it, not merely under the connivance, but under the protection of the law - have established it'.": see Attorney-General v. Pearson (1817) 3 Mer 353, at p 420 (36 ER 135, at p 157) . Secondly, and this is the most usual modern sense, the word means to confer on a religion or a religious body the position of a state religion or a state church. In Marshall v. Graham (1907) 2 KB 112, at p 126 , Phillimore J., speaking of the Church of England, said:

"The process of establishment means that the State has accepted the Church as the religious body in its opinion truly teaching the Christian faith, and given to it a certain legal position, and to its decrees, if rendered under certain legal conditions, certain civil sanctions."

In Fielding v. Houison (1908) 7 CLR 393, at p 423 , Barton J. also used the word with this meaning when, speaking of course of Australia, he said:

"The Statute book shows amply that the Church of England and Ireland after the constitution of a legislature never was, nor was any other religious body, an established Church."

Thirdly, when used in relation to the establishment principle discussed in General Assembly of Free Church of Scotland v. Lord Overtoun (1904) AC 515 the word means to support a church in the observance of its ordinances and doctrines. In that case Lord Robertson (1904) AC, at p 674 , pointed out that the establishment principle can be held by churches that are unconnected with the state, and are supported by voluntary contributions alone. Like other members of the House of Lords in that case, he thought that the establishment principle was enunciated in Art. III of Ch. XXIII of the Westminster Confession, which read as follows:

"The civil magistrate . . . hath authority, and it is his duty, to take order, that unity and peace be preserved in the church, that the truth of God be kept pure and entire, that all blasphemies and heresies be suppressed, all corruptions and abuses in worship and discipline prevented or reformed, and all the ordinances of God settled, administered and observed."

As to this Lord Robertson said (1904) AC, at pp 680-681 :

"On the specific question about the 23rd chapter of the Confession of Faith, I own that I read with some surprise that doubts had been entertained by learned judges as to the effect of the words that it is the duty of the civil magistrate to 'take order that' 'the ordinances of God' be 'duly settled, administered and observed'. I must still take leave to think that those words do describe what we call Establishment; and I observe that in the Campbelton Case . . . where these observations were made, the question before the court was State endowment, which is a different thing."

And Lord Alverston C.J. said (1904) AC, at p 707 :

"It was strongly urged by the respondents that that article does not enunciate the principle of Establishment or Endowment. As regards Endowment the observation is probably well founded, but even taking the article by itself, in my opinion it distinctly embodies the principle of Establishment."

A fourth possible meaning of the word "establish" is simply to found or set up a new church or religion, but that is obviously not the meaning used in s. 116. (at p597)

15. The first of these meanings - to grant legal status, recognition or protection - is obsolete and inappropriate in the context of the Constitution. The word was used in that sense when there was an established church, but legal recognition was nevertheless accorded to other churches. If the Commonwealth were forbidden to make any law for establishing any religion in that sense, it would mean that a Commonwealth statute could not validly recognize the existence of any religion or extend to it the protection of the law. For example, laws which recognized the existence of ministers of religion for any purpose (such as the celebration of marriages) would be invalid. There could have been no possible reason for such a constitutional prohibition, and it would be inconsistent with the spirit of the further provision that no law shall be made prohibiting the free exercise of any religion. (at p597)

16. The third possible meaning is also inappropriate in s. 116. When used in that sense the word is contrasted with endowment, and is used to refer to support of a legal or moral rather than a financial kind. However, it is not the usual sense of the word but is used in a special sense in relation to the "establishment principle". If the word were used in that sense in s. 116 the other provisions of that section would be rendered otiose. If the word "establish" in s. 116 simply meant support, a law imposing a religious observance, or the requirement of a religious test as a qualification for office, would amount to the establishment of a religion, and the express provisions of the section forbidding these things would have been unnecessary. (at p597)

17. The natural meaning of the phrase "establish any religion" is, as it was in 1900, to constitute a particular religion or religious body as a state religion or state church. If that sense is applied to the word in s. 116, there is no inconsistency with, or repugnancy to, the other provisions of the section. On ordinary principles of construction it is the meaning that ought to be given to the words of the section unless sufficient reason is shown for adopting another meaning. (at p598)

18. It is strongly argued on behalf of the plaintiffs that since s. 116 was closely modelled on part of the First Amendment to the Constitution of the United States it must be taken to have been intended to have the same meaning as that which had been attributed to the First Amendment in the United States before 1900 when the Constitution was enacted, and further that the United States decisions since that date provide a useful guide to the meaning of the section. In deference to this argument I shall turn to some of the American authorities, but it is necessary to notice that there are a number of differences between s. 116 and the First Amendment to the American Constitution. The First Amendment is in the following terms:
"Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances."
It has been held in the United States that these provisions have been extended to the States by the Fourteenth Amendment. The final clause of s. 116 (prohibiting religious tests) is modelled on Art VI, s.3 of the United States Constitution. The establishment clause in the First Amendment is contained in a provision which guarantees a number of fundamental rights, and that circumstance may have influenced the approach of the courts in the United States to the question. More importantly, the words of s. 116 did not reproduce verbatim those of the First Amendment. The latter speaks of a law "respecting an establishment of religion" and those words appear wider than those of s. 116 which refer to "any law for establishing any religion" - words which look to the purpose of the law rather than to its relationship with a particular subject matter, and which suggest that it is the establishment of one particular religion rather than of religion generally that is proscribed. Moreover s. 116 contains an express prohibition of the imposition of any religious observance - a prohibition which is not included in the First Amendment and which, as I have said, would have been unnecessary if "establishing" in s. 116 meant "giving assistance or support to". These matters, and the different histories of the two countries, provide reasons why the American decisions as to the meaning of the First Amendment do not necessarily provide any safe guide to the meaning of s. 116 of our Constitution. (at p599)

19. In any case, with all respect to the argument of the plaintiffs, it had not been established in the United States by the time Federation occurred in Australia that the First Amendment forbad the Congress to give aid, financial or otherwise, to one or more religious bodies. It is true that the Supreme Court had already adopted, as a guide to the meaning of the First Amendment, a statement made by Thomas Jefferson in reply to an address made to him by the Danbury Baptist Association. That statement, which has proved influential in determining the attitude of American Courts to the establishment clause in the First Amendment, is cited in Reynolds v. United States (1878) 98 US 145, at p 164 (25 Law Ed 244, at p 249) , and was as follows:

"Believing with you that religion is a matter which lies solely between man and his God; that he owes account to none other for his faith or his worship, that the legislative powers of the Government reach actions only, and not opinions, - I contemplate with sovereign reverence that act of the whole American people which declared that their legislature should 'make no law respecting an establishment of religion or prohibiting the free exercise thereof', thus building a wall of separation between church and state."

In that case the court was dealing with the effect of the free exercise clause, not the establishment clause, and the courts of the United States before 1900 had not had occasion to translate Jefferson's metaphor into terms of specific and practical guidance. The only decision before 1900 in which the Supreme Court considered whether the provision of financial assistance to a body connected with a church violated the establishment clause appears to have been Bradfield v. Roberts (1899) 175 US 291 (44 Law Ed 168) . There an appropriation for buildings to be constructed on the grounds of a hospital, a private eleemosynary corporation, was held valid. The facts that the members of the corporation were members of a Roman Catholic sisterhood, and that the title to its property was vested in the sisters, were said to be "wholly immaterial" (1899) 175 US, at p 298 (44 Law Ed, at p 170) . It was submitted for the plaintiffs that it was implicit in that decision that if the hospital could have been characterized as a religious corporation, or a corporation that existed for religious purposes, the appropriation would have been invalid. However Peckham J., who delivered the judgment of the Supreme Court, said (1899) 175 US, at p 297 (44 Law Ed, at p 170) :

"If we were to assume, for the purpose of this question only, that under this appropriation an agreement with a religious corporation of the tenor of this agreement would be invalid, as resulting indirectly in the passage of an act respecting an establishment of religion, we are unable to see that the complainant in his bill shows that the corporation is of the kind described, but on the contrary he has clearly shown that it is not."

It seems to me that the learned justice expressly left open the question what the consequence would have been if the hospital had been a religious corporation, and the actual decision of the case does not seem to give the least support to the argument of the plaintiffs, according to which the expenditure of public money on lands owned by a religious body would amount to an establishment of religion. Indeed later mention of the case in the American authorities does not support the plaintiffs' argument as to the significance of the decision. In Quick Bear v. Leupp (1908) 210 US 50 (52 Law Ed 954) it was held that a statutory limitation on the expenditure of public funds, forbidding contracts for the education of Indians in sectarian schools, did not apply to the expenditure of treaty and trust funds administered by the government for the Indians, and that a contract under which it was intended that the Bureau of Catholic Indian Missions should be paid out of Sioux trust funds, a certain amount for each Sioux in its schools, was not invalid. The question there was primarily one of statutory construction, but in the course of his judgment Fuller C.J. said (1908) 210 US, at p 81 (52 Law Ed, at p 964) :

"Some reference is made to the Constitution, in respect to this contract with the Bureau of Catholic Indian Missions. It is not contended that it is unconstitutional, and it could not be. Roberts v. Bradfield (1898) 12 App DC 475 ; Bradfield v. Roberts (1899) 175 US 291 (44 Law Ed 291) ."

More recently in Tilton v. Richardson (1971) 403 US 672, at p 679 (29 Law Ed 2d 790, at p 799) , Burger C.J. said; "The simplistic argument that every form of financial aid to church-sponsored activity violates the Religion Clauses was rejected long ago in Bradfield v. Roberts (1899) 175 US (44 Law Ed 168) ." (at p600)

20. Moreover American commentators, before 1900, had not understood the establishment clause to have the effect of forbidding financial aid to church schools. Thus Cooley in his Principles of Constitutional Law, 3rd ed., (1898), said, at pp. 24-25, that by establishment "is meant the recognition or setting up of a state church, or at least the conferring upon one church of special favours and advantages which are denied to others". This passage provides some support for the alternative submission of the plaintiffs but is opposed to their primary contention. (at p601)

21. It seems that it was not until 1947 that the Supreme Court first gave extensive consideration to the effect of the establishment clause on the provision of financial aid to church schools. In Everson v. Board of Education (1947) 330 US 1(91 Law Ed 711) . Black J., who delivered the judgment of the majority, said (1947) 330 US, at p 16 (91 Law Ed, at p 723) :

"No tax in any amount, large or small, can be levied to support any religious activities or institutions, whatever they may be called, or whatever form they may adopt to teach or practice religion. Neither a state nor the Federal Government can, openly or secretly, participate in the affairs of any religious organizations or groups and vice versa. In the words of Jefferson, the clause against establishment of religion by law was intended to erect 'a wall of separation between church and State'."

All the judgments appear to favour the view that the establishment clause requires a separation of religious and civil activity and forbids any state aid to religion. Nevertheless, the court, by a majority of 5 to 4, rejected the challenge made in that case to the right of a board of education to reimburse parents for money expended in conveying their children by bus to (amongst other) Catholic parochial schools. The case illustrates the difficulty that one sometimes finds of reconciling a broad statement of principle with the actual decision in cases of this kind. Indeed Jackson J., who dissented in that case, speaking of the majority judgment, said, that "the undertones of the opinion, advocating complete and uncompromising separation of Church from State seem utterly discordant with its conclusion yielding support to their commingling in educational matters." (1947) 330 US, at p 19 (91 Law Ed, at p 725) . (at p601)

22. Since that time the meaning of the establishment clause in the First Amendment has been the subject of what Blackmun J. in the course of a dissenting judgment in Committee for Public Education and Religious Liberty v. Regan (1980) 444 US 646, at p 664 (63 Law Ed 2d 94, at p 109) , described as a "continuing and emotional controversy". Although the Supreme Court has evolved a test for the constitutionality of statutes affording aid to church schools, there have been strongly expressed differences of opinion as to the result of the application of that test in particular cases. The test now accepted was stated as follows in Lemon v. Kurtzman (1971) 403 US 602, at pp 612-613 (29 Law Ed 2d 745, at p 755) :
"First, the statute must have a secular legislative purpose; second, its principal or primary effect must be one that neither advances nor inhibits religion. . . ; finally, the statute must not foster 'an excessive government entanglement with religion'."
This third element is of comparatively recent origin and its inclusion was strongly criticized by White and Rehnquist JJ. in Roemer v. Maryland Public Works Board (1976) 426 US 736, at pp 767-768 (49 Law Ed 2d 179, at p 200) ; and since it appears to have suggested one of the arguments put by the plaintiffs in the present case, I may say immediately that it finds no support in the words of the establishment clause in s. 116. It would serve no useful purpose for me to discuss the cases on both sides of the borderline, in which the Supreme Court has considered the validity of legislative provisions which authorize the giving of financial aid to church schools, but it is clear that the Supreme Court has not taken the view that the establishment clause entirely forbids the grant of any financial aid to church schools. A few examples will suffice. The Supreme Court has held valid a statute which authorized grants to schools and universities for the construction of buildings and facilities used exclusively for secular educational purposes (Tilton v. Richardson (1971) 403 US 672 (29 Law Ed 2d 790) ), a statute whose purpose was to provide assistance, primarily through the issue of revenue bonds, for higher education in the construction, financing and re-financing of building projects, not including any facility used for sectarian instruction, religious worship or the study of divinity (Hunt v. McNair (1973) 413 US 734 (37 Law Ed 2d 923) ), a statute which provided grants to colleges provided that the moneys should not be used for sectarian purposes (Roemer v. Maryland Board of Public Works (1976) 426 US 736 (49 Law Ed 2d 179) ) and a statute reimbursing schools for performing various testing and reporting services required by state law (Committee for Public Education and Religious Liberty v. Regan (1980) 444 US 646 (63 Law Ed 2d 94) ), although, in each of these cases, church schools as well as secular schools benefited under the statutes. On the other hand there are many decisions of the Supreme Court which have invalidated legislation giving aid to church schools, and some of those cases are - at least for someone from another jurisdiction - difficult to reconcile with those to which I have just referred. (at p602)

23. Even if the United States authorities were treated as applicable to s. 116, they would not give to the argument advanced by the plaintiffs the support which the plaintiffs sought to draw from them. But in any case, for a number of reasons, I cannot regard the United States decisions as containing an exposition which should be treated as authoritative in its application to s. 116. In the first place there are the differences, to which I have already referred, between that section and the First Amendment. Secondly, the history of the United States, which provides the background to the Constitution of that country, has been very different from that of Australia. Thirdly, as I had occasion to point out in Attorney-General (Cth); Ex rel. McKinlay v. The Commonwealth (1975) 135 CLR 1, at p 47 , the courts of the United States, in construing the Constitution, have recourse to material which it is our practice to reject. It would seem paradoxical if we, although forbidden to consider the debates of our own constitutional conventions for the purpose of discovering what the delegates thought was the meaning of a particular provision accepted by the Convention, should nevertheless, in construing s. 116, indirectly give weight to the opinions of Thomas Jefferson as to the meaning of the similar words of the First Amendment. Finally, the course of the decisions in the United States shows that the test which has been adopted in that country, so far from being clear and predictable in its operation, has led, in its application, to continuing controversy. In any case, we should not substitute for the words of s. 116 a test which those words do not appear to warrant, particularly when it does not commend itself by any obvious considerations of justice or convenience. (at p603)

24. It was submitted on behalf of the plaintiffs that the words of s. 116 should be given as broad and liberal a construction as possible. That would not justify giving the words of the establishment clause an expanded meaning which they do not naturally bear. In any case, the establishment clause imposes a fetter on legislative power, and unlike the words which forbid the making of any law prohibiting the free exercise of any religion, does not do so for the purpose of protecting a fundamental human right; indeed, the purpose for which it was inserted in the Constitution remains obscure. There is no reason to give such a provision a liberal interpretation. In the end it remains necessary to determine the meaning of the words of s. 116 themselves. (at p603)

25. For the reasons I have given, I consider that the words "The Commonwealth shall not make any law for establishing any religion", where they appear in s. 116, mean that the Commonwealth Parliament shall not make any law for conferring on a particular religion or religious body the position of a state (or national) religion or church. (at p604)

26. It may be a question of degree whether a law is one for establishing a religion. However, on no view of the evidence in the present case can it be said that any of the laws in question infringes s. 116, if that section is given the meaning which I have attributed to it. If it be assumed that in some schools religious and secular teachings are so pervasively intermingled that the giving of aid to the school is an aid to the religion, and if it be further assumed that some religions, which conduct more schools than others, will receive more aid than others, it still does not follow that any religion is established by the legislation. If the administration of the Schools Commission Act 1973 requires that officers of the Commonwealth be closely involved with religious authorities, that also does not mean that the Act establishes any religion. The primary purpose of the challenged legislation is the advancement of education within Australia. That would, no doubt, not be decisive if the legislation had the further purpose of establishing any religion. However, it is impossible to say, on any view of the statutory provisions in question or of the evidence in the case, that the challenged legislation has the purpose or effect of setting up any religion or religious body as a state religion or a state church, even for limited purposes only. None of the laws in question is a law for establishing religion within s. 116. (at p604)

27. No doubt some members of the public hold strong and sincere views on the question whether any government should provide financial aid to church schools, but the resolution of the differences that exist must be left to the democratic processes which exist under the Constitution; s. 116 does not resolve them. (at p604)

28. For the reasons I have given I consider that the plaintiffs cannot succeed in their action and that judgment should accordingly be given for the defendants. (at p604)

STEPHEN J. The judgment of Wilson J. relieves me of the need to describe the facts and circumstances of these proceedings. That judgment describes the character of the parties to and intervenors in the proceedings, the plaintiffs' submissions, the legislation of the Commonwealth which is impugned and the factual background against which that legislation operates. (at p604)

2. At the heart of this case is the question whether Commonwealth laws offend against s. 116 of the Constitution when they grant financial assistance to the States on condition that the States apply the sums granted in paying for capital projects and recurrent expenses of non-government schools. A similar question arises concerning moneys appropriated for spending on such schools in the Territories. (at p605)

3. Section 116 is as follows:

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

Some things about the section are self-evident. It is not, in form, a constitutional guarantee of the rights of individuals; with it may be contrasted s. 117 which, like s. 80, at least gives promise of guaranteed rights, however illusory that promise may so far have proved in practical operation: R. v. Archdall and Roskruge; Ex parte Carrigan and Brown (1928) 41 CLR 128 and Henry v. Boehm (1973) 128 CLR 482 . Section 116, like s. 99, instead takes the form of express restriction upon the exercise of Commonwealth legislative power. (at p605)

39. Furthermore, it seems to me that the words "for establishing" are not comparable with the words "respecting an establishment". The former words convey the sense of "in order to establish", and speak quite specifically of the purpose of the law in terms of the end to be achieved. "Respecting" conveys the notion of "in respect of" a particular subject-matter, namely, an establishment or religion, thereby providing a broad frame of reference. (at p653)

40. I accept that the word "establishment" has no fixed connotation, but having regard to the other clauses which are contained in s. 116, and to the precise manner of their expression, I infer a legislative intent to adopt a narrow notion of establishment, namely, that which requires statutory recognition of a religion as a national institution. The precise status, responsibility and privileges that attend such establishment may vary a good deal, and it is not necessary to consider its features in detail; the point to be made is that establishment involves the deliberate selection of one to be preferred from among others, resulting in a reciprocal relationship between church and state which confers and imposes rights and duties upon both parties. The nature of the responsibility of the state towards an established church is clearly exposed in the judgments of their Lordships in the House of Lords' decision in General Assembly of Free Church of Scotland v. Lord Overtoun (1904) AC 515 where the basic principle of "establishment" is asserted as "the right and duty of the civil magistrate to maintain and support an establishment of religion in accordance with God's Word" (1904) AC, at pp 646, 656, 677 . It identifies a relationship which goes much deeper than financial assistance, whether casual or regular, from time to time, because it is expressive of a duty to maintain and support, or, in other words, a duty to "promote religion" as embodied in the doctrine and standards of the Church (1904) AC, at p 694 . Conversely, correlative to the right in the church to the protection and patronage of the state, the church is under a duty to pray for the civil magistrate and faithfully to conform to the church's doctrine and standards. (at p653)

41. If it seems remote from reality to be speaking in terms such as these about a constitutional provision, it must be remembered that the eighty years that have elapsed since federation have witnessed a marked change in the status and role of the church in the Australian community with a corresponding diminution of the sense of authority that formerly attached to the ecclesiastical realm. (at p654)

42. Furthermore, it may be thought to be surprising that a prohibition of the kind that I have described was included in the absence of any express legislative power whereby the Parliament could ever have pursued such an objective. It may be that the explanation for any such incongruity is to be found in the chequered history of the clause in the constitutional conventions in the eighteen-nineties, and in an anxiety lest an inference of power was to be drawn from the acknowledgment of Almighty God in the preamble to the Commonwealth of Australia Constitution Act. While on present authority it is not permissible to seek the meaning of s. 116 in the convention debates, I may say that I find it interesting that in the course of the conventions the religion clause began as a denial of power to the States, then was re-addressed to both the States and the Commonwealth, and finally took its present form. The separationist view of establishment, for which the plaintiffs contend, does not sit well with the form of s. 116, addressed as it is only to the Commonwealth Parliament. The objective sought to be achieved by a clause construed consistently with the plaintiffs' contention could so easily be subverted by any of the State legislatures, which remain free to give such aid or support to religious bodies as they wished. But no State legislature could establish a national religion, and hence the prohibition was rightly directed to the Commonwealth. It will also be recalled that the 1898 Convention was invited to adopt a form of words for the religion clause which would have placed the present issue beyond doubt, when an amendment from Tasmania to the effect that the clause include the words "nor appropriate any portion of its property for the propagation or support of any religion" was proposed and defeated. Be these things as they may, I believe it would be wrong to attach undue significance to the history of the clause. The actual words of the text supply the only firm ground on which to base a conlusion. (at p654)

43. I have already adverted to the other clauses contained in s. 116 as lending support for a narrow construction of the establishment provision, but the observation may deserve further brief explication. If the first clause is to be read, as the plaintiffs contend, as requiring the erection of "a wall of separation" between the church and the state, then it is difficult to see what room is left for the operation of the following clauses. The Commonwealth must not make any law for imposing any religious obervance, but clearly such a law would offend the separationist principle. The same would be true of a law for prohibiting the free exercise of any religion, for one could hardly find a more glaring example of state interference in the religious realm. Again, the imposition of a religious test as a qualification for any office or public trust under the Commonwealth is clearly inconsistent with a prohibition of state involvement with religion. In other words, if the contention of the plaintiffs is correct, the first clause more than covers the entire field to which the section refers, leaving nothing to be contributed by the remaining clauses. If such a result reflected the intended operation of the section, then in my opinion it would have been expressed, as it easily could have been, and was in the Tasmanian amendment which was rejected, in clear and unmistakable terms. On the other hand, if the establishment clause carries the meaning that I have given it, each of the following clauses has a distinct, intelligible and consistent area of operation. (at p655)

44. Some argument has proceeded between the parties concerning the word "religion", but I do not find it to be a significant issue in the present case. Whilst I confess to some difficulty in thinking of the different denominations of the Christian faith as separate religions, as distinct from different forms of the one religion, it does not seem to me to do any violence to the wording of the first clause of s. 116 to read it as forbidding any law for establishing any religion or any form of any religion. (at p655)

45. It is against this background understanding of s. 116 that I examine the submissions of the plaintiffs. They argue, inter alia, that the legislation in question is necessarily struck down by s. 116 because: (a) in the case of capital grants, the only relevant restraint is that which, for example, in s. 15 of the States Grants (Schools Assistance) Act 1978, provides that grants shall not be used in respect of facilities used wholly or principally for or in relation to religious worship; (b) in the case of recurrent grants, there is no restraint at all in respect of religion within the school; and (c) the administration of the Commonwealth scheme requires close consultation with and support of religious agencies. It follows, in their submission, that buildings and other facilities provided with the help of Commonwealth funds are used for religious instruction, that recurrent grants aid the religious activities of church schools and assist the religious mission of the religion sponsoring the school. In so doing, the laws satisfy the description of laws for establishing any religion. (at p655)

46. Given the interpretation of s. 116 that I have expounded, it would seem to follow as a matter of course that these contentions must necessarily fail. Nevertheless, it is appropriate that I should make some observations about the scheme embodied in the legislation. In my opinion, the summary of the provisions of the States Grants (Schools Assistance) Act 1978 that appears earlier in these reasons clearly reflects a secular legislative purpose, that of upgrading the quality and range of education in primary and secondary government and non-government schools throughout Australia. Even if one accepts the plaintiffs' submissions on the facts, it cannot be said that the primary effect of the legislation is to advance religion. It may be true that in many cases one effect may be to advance religion appreciably, but, even so, such a result is not central to the operation of the legislative scheme. It is an incidental or indirect consequence of the pursuit of the educational purpose. In no case is religion a criterion which attracts a grant. Even the most "religious" of the schools which have received assistance are first and foremost educational institutions which are required to strive for a range and quality of education which is at least comparable to government schools. The amount of time devoted to secular instruction in such schools is necessarily substantial, the cost of which obviously forms the major part of the recurrent expenditure of the school. Similarly, the fact that some school buildings may be used for religious instruction for some periods each week cannot obscure the predominantly secular user reflected in the general balance of the secular purpose to the religious goal. The third of the schedules which appear earlier in these reasons makes it clear that, notwithstanding increased contributions from both Commonwealth and State legislatures, non-government schools are still required to fund a substantial part of their expenditure from private sources. (at p656)

47. The plaintiffs' submission with respect to the Commonwealth's involvement with religion recalls attention to the Schools Commission Act 1973. But here again, I think that the attack is misconceived. It may be that the Commonwealth has chosen to pursue its purpose of aid to education in a manner that reserves to a Commonwealth agency, the Schools Commission, a great deal of detailed administrative work associated with the delivery of that aid to non-government schools. No doubt there were alternative methods of implementing the scheme that could have been chosen, and that would have occasioned less "entanglement" of Commonwealth officers with the representatives of non-government schools. But, in any event, the association between government and school is not based in religion. The fact that many administrators of non-government schools may be church administrators as well does not spell an entanglement of government with religion. The sole purpose of the collaboration is the pursuit of an educational goal.

Section 96. (at p657)

48. I have already expressed the opinion that a law which finds its authority in s. 96 is nevertheless subject to s. 116. For the purpose of examining the validity of the States Grants legislation by reference to the latter section I have assumed that the laws were otherwise authorized by the former section. I turn now to consider the plaintiffs' attack based on s. 96. The section reads as follows:

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

The plaintiffs focus by way of example on the States Grants (Schools Assistance) Act 1978, and cite ss. 15 and 16 with respect to capital grants, and s. 18(9) and s. 19(9) with respect to grants towards recurrent expenditure in relation to systemic and non-systemic schools respectively. These provisions are described or set out earlier in these reasons. The plaintiffs submit that the essential feature of the scheme is that it is the Commonwealth, either the Parliament or the Minister or his delegate, that makes every relevant decision in connection with a grant. The State may elect whether or not to accept the grant, and that is all. The only function of the State is to pay money, in amounts fixed by the Commonwealth, to a school or school system nominated by the Commonwealth, to make an agreement with the school authority in terms which are determined by the Commonwealth, to receive repayment from a school authority of such amounts as the Commonwealth determines ought to be repaid by a school authority in the event of a breach of the agreement with the State, and then to repay that amount to the Commonwealth. In many cases, capital grants paid to a school enable the erection of buildings owned by the religion sponsoring the school. The conditions attached to the grant require the school authority of the school or school system as the case may be to relate directly to the Commonwealth, for example, in accounting for moneys spent, and in the provisions of statistical information. (at p657)

49. In these circumstances, the plaintiffs submit that the grants cannot be described as grants of financial assistance to the States within the meaning of s. 96. They give no assistance to a State as a body politic but use it merely as a conduit or an agency by which moneys are distributed to schools and school systems upon conditions fixed by the Commonwealth. (at p658)

50. In the Second Uniform Tax Case (1957) 99 CLR, at p 605 , Dixon C.J. observed:

"There has been what amounts to a course of decisions upon s. 96 all amplifying the power and tending to a denial of any restriction upon the purpose of the appropriation or the character of the condition."

The Chief Justice then proceeded to review Victoria v. The Commonwealth (the Federal Aid Roads Case) (1926) 38 CLR 399 , Deputy Federal Commissioner of Taxation (N.S.W.) v. W.R. Moran Pty. Ltd. (1939) 61 CLR 735; (1940) 63 CLR 338; (1940) AC 838 , and South Australia v. The Commonwealth (the First Uniform Tax Case) (1942) 65 CLR 373 . In speaking of Moran, Dixon C.J. said (1957) 99 CLR 575, at pp 606-607 :

"Now it might have been thought that these provisions were outside s. 96 because they gave no assistance to the State as a body politic but used it only as a conduit or an agency by which the moneys would be distributed among the wheat growers of the State. . . . In fact, however, the provision was considered to amount to financial assistance to the State notwithstanding that the State was bound to distribute the money it received to the wheat grower." "The decision, which was affirmed in the Privy Council, without express reference to this use of s. 96, must mean that s. 96 is satisfied if the money is placed in the hands of the State notwithstanding that in the exercise of the power to impose terms and conditions the State is required to pay over the money to a class of persons in or connected with the State in order to fulfil some purpose pursued by the Commonwealth and one outside its power to effect directly. I should myself find it difficult to accept this doctrine in full and carry it into logical effect, but the decision shows that the Court placed no limitation upon the terms or conditions it was competent to the Commonwealth to impose under s. 96 and regarded the conception of assistance to a State as going beyond and outside subventions to or the actual supplementing of the financial resources of the Treasury of a State."

It may be noted that the Second Uniform Tax Case did not confront Sir Owen Dixon with the need to determine for himself the Moran doctrine about which he expressed misgiving in the passage which I have just cited. Later in his judgment (1957) 99 CLR 575, at pp 610-611 he accepted the earlier decisions of the Court, including Moran, as establishing "the entire exclusion" of the limited operation that might have been assigned to s. 96 based on the view "that there must be a need for relief or a reason for giving assistance which is not itself created by the Commonwealth legislation connected with the grant". (at p659)

51. The cases to which I have referred give a meaning to s. 96 which, at least for the time being, must be taken as settled. The Court is not asked to reconsider them in any respect. The plaintiffs accept them as authoritative and argue that they do not go so far as to require a determination that the legislation now in question is valid. The defendants rely upon them as conclusive in their favour on this particular question. Several of the States, while intervening in support of the validity of the legislation, indicated a wish at an appropriate time to re-argue the cases, but in the meantime were content to accept them as current authority. (at p659)

52. The plaintiffs distinguish Moran (1939) 61 CLR 735 , notwithstanding an apparent similarity to the present case, as basically different. They observe that the legislation in that case, the Wheat Industry Assistance Act was promoted by the States, that the Commonwealth was a partner in the scheme and made the grants at the instigation of the States as bodies politic, albeit that they were eventually to be paid to a class of persons. The machinery of State government was necessarily involved in the administration of the scheme, and it was wrong therefore to describe the States as mere agents of the Commonwealth, with no discretionary responsibility. (at p659)

53. I must confess that I have great sympathy with the plaintiffs' argument. The legislation provides a striking contrast in the discretion that is accorded to the States in the administration of the grants for government schools and the virtually total disregard of the States, save only for the barest acknowledgement of the formalities required by s. 96, in the administration of the grants for non-government schools. The contrast is all the more remarkable in the context of a constitution which in the distribution of power within the federation does not confer on the Commonwealth Parliament a specific legislative power with respect to education. (at p659)

54. But, unfortunately for the success of their argument, the plaintiffs mistake policy for law. The Court is not concerned with the wisdom or the expediency of the former, and the features of the scheme of which the plaintiffs complain are of this character. In the present state of the authorities, the legislation satisfies the requirements of s. 96 for a valid law. It is a non-coercive law which in terms grants money to each of the States "by way of financial assistance to the State". The freedom of each State to decide whether to accept or reject the grant, however restricted it may be in a political sense, is legally fundamental to the validity of the scheme, and its existence as a matter of law cannot be denied. The conditions attaching to the grant are those to be determined by the Commonwealth, but this has always been so. It is not necessary that the grant should benefit the State Treasury directly, or that the purpose of the grant should be within the express legislative power of the Commonwealth, or that the State should be the instigator or even a party to the initiation of the scheme. (at p660)

55. In addition to the significance of the State's decision to accept the grant, the necessity for it then to enter into an agreement with the eventual recipient of a grant is also significant. The State enters into that agreement, not as an agent for the Commonwealth, but as a principal. (at p660)

56. In any event, the plaintiffs have no answer, in my opinion, to the defendants' contention that the legislation does extend financial assistance to the States. It satisfies the most stringent tests that can be applied to that criterion. The States have assumed a governmental responsibility for all primary and secondary education within their bounds. If there were no other contributors, the total financial responsibility would fall on the State, as until recently it always has done in the case of government schools. In such a situation, the initiative and sacrifice assumed by those responsible for the existence of a non-government school system affords relief directly to the State Treasury, without relieving the State of the general responsibility of oversight that it has assumed. The participation of the Commonwealth is a further source of help. In my opinion, there can be no doubt that Commonwealth grants to non-government schools within a State must have the effect of easing the claim that such schools would otherwise make upon State financial resources. It must not be forgotten that these schools are already receiving substantial financial assitance from State governments, and the level of this assistance must be affected by the existence of the Commonwealth scheme.

The Territories. (at p660)

57. As I have already indicated, the only question at issue in relation to grants to non-government schools in the Australian Capital Territory and the Northern Territory, apart from standing, is whether the legislation contravens s. 116. It will be clear from what I have already said as to the proper construction of that section, that in my opinion the legislation is valid.

Standing. (at p661)

58. The case raises questions of far reaching importance on the subject of standing, including the following: (a) whether the Attorney-General of a State, suing on the relation of citizens of the State, has standing to challenge the constitutionality of an Appropriation Act authorizing the expenditure of moneys in the Territories, and the Independent Schools (Loans Guarantee) Act 1969 which is a law of the Commonwealth operative only within the Territories; (b) whether the individual plaintiffs, suing in their capacity as taxpayers and parents of children attending government schools, and resident in a State or a Territory, have standing to challenge all or any of the statutes in question; (c) whether the decision of the Supreme Court of Canada in Thorson v. Attorney-General (Canada) (No. 2) (1974) 43 DLR 3d 1 , should be followed in Australia in a case in which a citizen seeks to challenge the constitutionality of a statute in circumstances where he has been unable to secure the fiat of an Attorney-General. (at p661)

59. However, I have found it convenient to deal with the substantial merits of the case. My conclusion is that the challenged legislation is valid, with the result that the plaintiffs have failed to make out a case for any relief. The question of standing is therefore only of academic interest, and firm decisions on these important issues ought to wait for another case which requires their resolution, and when there might be greater opportunity for more concentrated oral argument than was available in the present case. (at p661)

60. I would dismiss the action. (at p661)

Orders

Judgment for the defendants.

The plaintiffs to pay the costs of the defendants the National Council of Independent Schools and Reverend Father Francis Michael Martin (representing the non-government schools in the Commonwealth of Australia).

No other order.