Defence Housing Authority, Ex parte- Residential Tenancy Tribunal & Henderson

[1996] HCATrans 377

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S75 of 1996

In the matter of -

An application for a writ of prohibition against  -

THE RESIDENTIAL TENANCIES TRIBUNAL OF NEW SOUTH WALES

and

KRIMHILDE HENDERSON and ARVIN T. HENDERSON

Respondents

Ex parte -

THE DEFENCE HOUSING AUTHORITY

Prosecutor

BRENNAN CJ
DAWSON J
TOOHEY J
GAUDRON J
McHUGH J
GUMMOW J
KIRBY J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON TUESDAY, 3 DECEMBER 1996, AT 10.21 AM

Copyright in the High Court of Australia

MR R.J. ELLICOTT, QC:   If the Court pleases, I appear with MR S.J. GAGELER, for the Defence Housing Authority, the prosecutor.  (instructed by Bruce & Stewart)

MR K. MASON, QC, Solicitor-General for the State of New South Wales.  I appear with my learned friend, MR L.S. KATZ, SC, for the first respondent and for the Attorney‑General for New South Wales.  (instructed by the Crown Solicitor for New South Wales)

MR B.W. WALKER, SC:   If it please the Court, I appear with my learned friend, MR M.J. LEEMING, for the second respondents.  (instructed by the Public Interest Advocacy Centre)

MR G. GRIFFITH, QC, Solicitor-General for the Commonwealth.  If the Court pleases, I appear with my learned friend, MS M.A. PERRY, intervening on behalf of the Attorney-General for the Commonwealth in support of the prosecutor.  (instructed by the Australian Government Solicitor

MR W.C.R. BALE, QC, Solicitor-General for the State of Tasmania:   May it please the Court, I appear with my learned friend, MR T.J. BULLARD, for the Attorney-General for Tasmania, intervening in the interests of the respondents.  (instructed by the Crown Solicitor for Tasmania)

MR P.A. KEANE, QC, Solicitor-General for the State of Queensland:   May it please the Court, I appear with my learned friend, MR R.W. CAMPBELL, on behalf of behalf of the Attorney-General for the State of Queensland, intervening in the interests of the respondents.  (instructed by the Crown Solicitor for Queensland)

MR D. GRAHAM, QC, Solicitor-General for the State of Victoria:  May it please the Court, I appear with my learned friend, MR C.M CALEO, on behalf of the Attorney-General for the State of Victoria, intervening in support of the respondents.  (instructed by the Victorian Government Solicitor)

MR R.J. MEADOWS, QC, Solicitor-General for the State of Western Australia:   May it please the Court, I appear with my learned friend, MR G.R. DONALDSON, on behalf of the Attorney-General for Western Australia, intervening in support of the respondents.  (instructed by the Crown Solicitor for Western Australia)

MR M.D. WALTER:  If it please the Court, I appear with my learned friend, MS G.L. EBBECK,  for the Attorney for the State of South Australia, in support of the respondents.  (instructed by the Crown Solicitor for South Australia)

BRENNAN CJ:   Yes, Mr Ellicott.

MR ELLICOTT: May it please your Honours. Your Honours, there are a number of points that have been raised in our written submissions. I propose to deal with these matters in this order. There is a question of inconsistency, the question of section 52(ii) of the Constitution, and there is what is referred to as the Cigamatic principle.  The learned Solicitor for the Commonwealth will deal with some of those matters and we have agreed to share the time that we have which, I understand, is three and three-quarter hours, but we may be less than that.  I note that it is now 10.23, your Honours.

BRENNAN CJ:   If the rest of your argument is as accurate as the preliminary part, Mr Solicitor, we will be advantaged.

MR ELLICOTT:   I do not think it will be, your Honour, as the emotion arises.  Your Honours, there are two Acts that are germane to this.  One is a Commonwealth Act and the other, of course, a State Act.  The Defence Housing Authority Act lies at the heart of the Commonwealth’s and the Defence Housing Authority’s case.  Can I shortly take your Honours to ‑ section 4 establishes an authority by the name of the Defence Housing Authority.  It is function:

is to provide adequate and suitable housing for:

(a)  members of the Defence Force and their families;
(b)  officers and employees of the Department and their families; and
(c)  other persons;

in order to meet the operational needs of the Defence Force and requirements of the Department.

(2)  The Authority shall provide such housing as the Minister, by notice in writing given to the Authority, directs is necessary for the Authority to provide in order to meet the operational needs of the Defence Force and the requirements of the Department.

Manner of performing function

6.  The Authority shall endeavour to perform its function in a manner that:

(a)  is in accordance with the policies of the Commonwealth; and
(b)  is in accordance with sound commercial practice.

There are then set out a number of powers which are itemised, but:

7.  (1)  The Authority has power to do all things necessary or convenient to be done for, or in connection with, the performance of its functions -

Your Honours will appreciate from the application book and the affidavit that is therein set out that it has been the policy of the Commonwealth through the Defence Housing Authority to lease land from individuals, in this case by assignment, the Hendersons, so that they become the landlord.  The Defence Housing Authority is the tenant and then it sublets to the Commonwealth as such and the Commonwealth then enters into arrangements, subletting arrangements with members of the Defence Force.  That is how it is done in practice.

It could, of course, be done in other ways but, because we do not refer to all the activities of the Defence Housing Authority, in this case it is of specific importance that the Defence Housing Authority does lease land from third parties - in this case, the Hendersons - and it is because of that that it is sought to apply the provisions of the Residential Tenancies Act 1987, New South Wales.  I would just like quickly to take your Honours to that.  Your Honours will see, first of all, that section 4 provides that the:

Act binds the Crown, not only in right of New South Wales but also, so far as the legislative power of Parliament permits, the Crown in all its other capacities.

We assume that includes the Commonwealth, and the Crown in the right of the United Kingdom, et cetera, et cetera.  But certainly it apparently includes the Commonwealth.  Section 8(2) and following deals with residential tenancy agreements, and there is a standard form.  Section 11:

A term of a residential tenancy agreement is void to the extent to which it is inconsistent with any term included in the agreement by Part 3.

Part 3, which commences with section 17, contains a number of provisions which imply terms in tenancy agreements which of course, if this Act applies, would include the agreement between the Defence Housing Authority and the Hendersons and would also include a lease agreement between the Commonwealth and a member of the Defence Forces.

That part also provides, for instance, in section 29 - and this is how this matter arises - that:

(1)  It is a term.....

(a)  the landlord shall provide and maintain such locks -

et cetera.  There is provision in subsection (5) that:

The Tribunal may, on application by a landlord or a tenant under a residential tenancy agreement:

(a)  make an order authorising the landlord or the tenant to alter, remove or add any lock -

et cetera, and may order the provision of a key.  Although it may seem a somewhat insignificant matter to have brought this matter to the High Court, it is the provision of a key which in a sense is the cause of these proceedings.  Nevertheless, it could have been what some people may think a much more significant matter, because the Act also purports to enable rentals to be fixed.  So that the Act in its purview purports to descend upon tenancy arrangements between the Commonwealth or between the Defence Housing Authority, be they as landlord or as tenant or as sub‑landlord or as sub‑tenant.

GUMMOW J:   Section 29(2) is picked up by section 125 dealing with penalties, is it not?

MR ELLICOTT:   It is, I think, your Honour.  Your Honour is quite right, yes.

GUMMOW J:   And 127, I suppose.

MR ELLICOTT:   Yes.

GUMMOW J:   Would they apply to the Authority, those sections?

MR ELLICOTT:   They would, on the face of it, purport to apply to the Authority.  So that it has very wide ramifications so far as tenancy arrangements entered into between the Commonwealth or the DHA.  There is a question, your Honours, as to whether the Defence Housing Authority, my client, is the Commonwealth, and I do not propose to address that.

BRENNAN CJ:   Why not?

MR ELLICOTT:   There does not seem to be any issue in relation to it.

BRENNAN CJ:   Why is that, Mr Solicitor?

MR ELLICOTT:   I am sorry, your Honour.

BRENNAN CJ:   Why is it that you would not wish to address that question?

MR ELLICOTT:   It does not mean we do not want to put the matter to the Court.  We certainly do.  I think your Honours would find at page 7 of our written submissions we deal with the matter there and, really, what I am saying, your Honours, is that I do not want to add anything to those written submissions.  I do not mean that ‑ ‑ ‑

GAUDRON J:   Well, Mr Ellicott, I do have a problem with relation to it in this context:  I have a problem in the context of an Act which distinguishes between the department and the Authority, which is created by the Act.  I have a problem in a factual context where there is a difference in legal personality, apparently, between the Authority and the Commonwealth and I have a difficulty in an historical context in which there is a tendency for outsourcing and privatisation of what have hitherto been governmental functions.  It is a matter for you whether you or anyone else wishes to deal with it, but I think in fairness to you, I should note that I have real problems in those three areas.

MR ELLICOTT:   Your Honour is very kind.  Your Honour, I shall attempt to address those issues.  The fact that there is a - your Honour calls it “outsourcing”, that seems to be a term of art; it is not found in the Act.  What the Act does is to say, as is consistent with what one might hope would happen if they were trying to do it within the bounds of the department itself, as they did in the past prior to 1987, perform its function in a manner that is in accordance with sound commercial practice and, of course, they are asked if they will endeavour to make a profit and they endeavoured to do that and if they make a profit they pay a dividend to the Commonwealth; the Act provides for that.

So as far as the commercial practice aspect of it is concerned and the notion that it is there to carry out its activities in the business-like fashion, is not inconsistent with it being an agency of the Commonwealth.  Right at the heart of it ‑ ‑ ‑

BRENNAN CJ:   Can I just add, Mr Ellicott, that for my part I have a difficulty of the same kind as Justice Gaudron has outlined, but perhaps I could express it in another way and that is once the Commonwealth Parliament creates a legal personality that has a discretionary power to act in a manner that is not completely controlled by the executive, is that legal person any longer to be regarded as an emanation of the Commonwealth?

MR ELLICOTT:   Your Honour, first of all, again looking at the statute, 6(a):

The Authority shall endeavour to perform its function in a manner that:

(a) is in accordance with the policies of the Commonwealth -

Section 31:

(1)  Except as provided in this section or as otherwise expressly provided by this Act, the Authority is not subject to direction by or on behalf of the Commonwealth Government.

(2)  Where the Minister is satisfied that it is desirable in the public interest to do so, the Minister may, by notice in writing to the Authority, give directions to the Authority with respect to the performance of its functions and the exercise of its powers.

(3)  The Authority shall comply with any direction under subsection (2).

(4)  Where the Minister gives a direction to the Authority under subsection (2), the Authority shall include particulars of the direction in its annual report.

Your Honours, we would submit that this is, in substance - and it is not a matter of mere legal form - the Commonwealth establishing a body to do that which it could do itself.  The fact that it gives it an element of discretion does not stop it from being an agency of the Commonwealth, and it is common, we would submit, for that to happen.  It has been happening for a long time that there will be areas of discretion which an agency has but nevertheless they are subject to control by the Minister in the course of carrying out their activities.  That is exactly, we would submit, in substance what is happening here.

The entry into the matter of a desire on the part of the Commonwealth that its Authority should in some way involve themselves in activities in accordance with commercial principles is not, as it were, antipathetic to government; it is simply a principle which is emphasised more these days than it has been in the past, and the law, we would submit, will accommodate to that.

So that both from the commercial point of view, from the point of view of control, from the fact that it is a separate entity, from any of those points of view none of those, we would submit, prevent this body from being an agency of the Commonwealth.  Now, the Solicitor-General for the Commonwealth may well want to add to that, but we would adopt the submissions which are found at pages 7 to 10 on that matter, and I did not mean to treat it as an unimportant matter but, obviously, your Honours regard it as of some significance and that will no doubt be dealt with by the Solicitor-General for the Commonwealth.

Your Honours, on the question of consistency, your Honours will have noticed that under the - and, of course, this question may arise independently of the question of what the status of the Defence Housing Authority is.  Some of the issues that we have to argue are dependent on that, such as the Cigamatic question does depend on it, but this and, we would submit, section 52(ii) itself, are not dependent, but certainly inconsistency is not dependent on the agency issue.

But what is significant is that under its authority, the Defence Housing Authority has the function and the power to lay down the terms and conditions upon which it will lease land to or from others and it does so, we would say, on behalf of the Commonwealth, but whatever it does it does within the charter that is laid down under the Defence Housing Act, and in so doing it is, we submit, doing no more and no less than what would be done by the Australian Broadcasting Commission, for instance, in laying down the terms and conditions of employment.

Both these matters are consensual in the sense that when you think of - and I am obviously referring to the case, Australian Broadcasting Commission.  When one thinks about the position of the Australian Broadcasting Corporation in that case, it had power to fix the terms and conditions of employment.  But those terms and conditions, of course, it could not impose on anybody because they had to be agreed to by employees.  What this Court said was that there was inconsistency between that and other provisions in that case.  We seek to draw an analogy between that in this case, because in this case the Defence Housing Authority is able to lay down the terms and conditions upon which it will enter into arrangements with others in relation to leasehold interests and, to that extent ‑ ‑ ‑

McHUGH J:   As a matter of law, or a matter of contract?

MR ELLICOTT:   As a matter of law, in the sense that it has the power; as a matter of contract, in the sense that it does not have to enter into arrangements otherwise than on that basis.  And likewise, the Australian Broadcasting Corporation - although the terms of the Act were much more positive and sounded as if they were as a matter of law, it was really as a matter of power because, at the end of the day, they only became binding on others by contract.  That is the analogy that we seek to draw.

McHUGH J:   But is it a valid analogy?  In Dao what was sought to be done was to declare unlawful, under a State Act, a provision which the ABC insisted upon, or the Postal Commission insisted on, concerning height and weight.  But here, any rights that the Authority has depends upon the general law, does it not?  They can only enforce their rights under the general law; they do not enforce them under this statute.

MR ELLICOTT:   That is so, your Honour.  But we are dealing with a question of inconsistency, and inconsistency of laws.  There is nothing in section 109 that requires one to find a law which is necessarily enforceable through the means of, say, an award, or through some regulations, or whatever they may be.  If there is an intention on the part of the Commonwealth to cover the field - and we say the field here is the contractual relationships which will exist between the Commonwealth, or the Defence Housing Authority and others - if it has passed such a law, then a State law that comes along and descends on that to change the terms and conditions that may be agreed upon, falls foul of section 109.  That is the essence of our submissions on that particular matter.

McHUGH J:   But section 87 only deals with the capacities of the legal personality which the Act brings into existence.  It does not seem to me at the moment, Mr Ellicott, that the Act itself enforces the law of contract that the Authority enters into.

MR ELLICOTT:   Well, your Honour, that is the point I am making that it does not matter to section 109.  What the Act does is to provide seriously, not for fun, but seriously, the establishment of a Defence Housing Authority to carry out one of those functions which are so close to the heart of the Defence Force and could be done by the government itself and to do it through the terms of this Act.  One only has to think of the consequences of the Residential Tenancies Act descending on these arrangements to understand the conflict between the two provisions.

DAWSON J:   If you look at section 11, Mr Ellicott, where the Authority has power to:

acquire, hold and dispose or real and personal property;

Well, now, presumably, you can only do that by the law of property existing in the particular State by the law of contract.

MR ELLICOTT:   Yes.  That is the means by which it performs its functions, or one of the means, but it does not follow from that that behind it is not a law - that is to say, the Act itself - which covers the field within which the Commonwealth is purporting to deal with, to the extent to which it does, leasehold arrangements between it through the Defence Housing Authority and others, and having done that ‑ ‑ ‑

TOOHEY J:   It cannot have covered that field if the law relating to leasehold is the State law.

MR ELLICOTT:   Well, your Honour, it provides its own legal system because what it does is enable the Defence Housing Authority to enter into contractual arrangements.

TOOHEY J:   That is just merely to say that it creates an entity.  There is no doubt about that.

MR ELLICOTT:   I am going further than that, your Honour, I am saying ‑ ‑ ‑

TOOHEY J:   I know.

MR ELLICOTT:    ‑ ‑ ‑ that not only does it create an entity but it gives the entity functions and it gives the entity powers and those powers when fulfilled create legal rights and obligations and those legal rights and obligations, it does not matter, are enforceable at law, and one could say, subject to the first point that we argued about that that was federal jurisdiction.

TOOHEY J:   There is a problem with that though in the light of section 62, is there not, which provides:

Nothing in this Act shall be taken to impose on the Authority a duty that is enforceable by proceedings in a court.

In other words, it suggests that the obligation must arise dehors the Act.

MR ELLICOTT:   Your Honour, I am not saying that that escapes the provisions of the Administrative Decisions (Judicial Review) Act.  I assume - but that does not mean that the Commonwealth by dent of this law has not indicated an intention that henceforth this is the way in which the relationships of landlord and tenant in relation to the Defence Forces, putting it very obliquely and parenthetically, should be governed.  I would submit - we do submit, that, therefore, section 109 applies.

McHUGH J:   Well take a section like 129(b) of the New South Wales Conveyancing Act, dealing with forfeiture of leases.  Now, does that apply in the context of a lease in which the DHA is involved?

MR ELLICOTT:   Your Honour, it would not apply, perhaps for other reasons, other reasons being other arguments that we have to put to the Court, but in relation to inconsistency, just cutting it off from the rest of the argument, then that would apply.  Forgetting about whether that is a law that is seeking to control the Commonwealth, that could apply, but in terms of inconsistency it may not apply.  It will depend on the law and I am really submitting that so far as this Act is concerned, that is the Defence Housing Authority Act, it provides its own code within which the rights and obligations of the Commonwealth in relation to defence housing, will be determined.  That is our argument, your Honour.

McHUGH J:   So does that mean the Contracts Review Act cannot apply to this lease or cannot apply to any contract made by the DHA for, say, the furnishing?

MR ELLICOTT:   It could mean that, your Honour, yes, and why not?  I do not ask your Honour to answer that, but why not?  Why should not the Commonwealth be able to provide, within those areas, its own answer to those problems?

GAUDRON J:   Well, it is not a question of why it should not be able to provide; it is a question of what can you point to in the Act where it does so provide?

MR ELLICOTT:   Well, it has done it.  That is all I can say to your Honour; it has done it and it has done it in those sections I have referred to.  It has set up an authority with power and functions.

KIRBY J:   It is a very austere set of sections, very skeletal.  When the Commonwealth could have done so much and provided so much, it has done it in a very elliptical way.

MR ELLICOTT:   Yes, but the sanctions lie within the law.  I mean, if the Commonwealth enters into a lease arrangement, that lease arrangement will have terms and conditions.  Those terms and conditions are the terms and conditions upon which, whether it is the Federal Court or this Court or some other court, will ultimately determine the rights and obligations of the Commonwealth to those other people.  But that provides the coverage required to protect the rights of the Commonwealth and those with whom it contracts.

KIRBY J:   Have you called attention to the only provisions of the Act that you rely on as suggesting that the Commonwealth has legislated here in a way that expels the State law?

MR ELLICOTT:   Yes, your Honour, I think I have.  There are none others referred to.

KIRBY J:   Well, that is it, it will not rise any higher, the Act is there.

MR ELLICOTT:   No, it does not need to, and it is a misconception, with very great respect, that section 109 depends upon some law that is mandatory.  It does not.

McHUGH J:   You have to have a conflict between laws or inconsistencies.

MR ELLICOTT:   Yes, and the inconsistency is that the Commonwealth has said, through its Parliament, this is the means whereby arrangements shall be entered into of a leasehold nature in relation to members of the Defence Force.

DAWSON J:   Mr Ellicott, does the argument go something like this, and correct me if I am wrong?  It would certainly be inconsistent with the DHA Act if there was State law saying that the Authority had no capacity to enter into certain leases, or no capacity to enter into leases, and what you say about the Residential Tenancies Act is it does not go as far as that, but it does say that certain sorts of leases are forbidden.  That is where the inconsistency arises.  It is denying a capacity to the Authority that is given to it by the Act.

MR ELLICOTT:   Yes.  That in part, your Honour, but also the whole of the Act itself is inconsistent with the notion that the Commonwealth can freely, through the Defence Housing Authority, enter into leasehold arrangements agreed to by the third party or by the Defence personnel, it can freely enter into those arrangements without being affected by an inconsistent State provision.

DAWSON J:   So that where a law is facultative, it is not inconsistent, but where it is not facultative, it is inconsistent.

MR ELLICOTT:   With respect, no, your Honour.

DAWSON J:   That seems to be what you are saying.

MR ELLICOTT:   No.  I am saying that it can be facultative and be inconsistent.  It can provide the area or the means whereby the Commonwealth deals with a particular subject matter and it can deal with it, that Parliament can deal with it as it sees fit and not otherwise.  It does not have to impose sanctions against people.  It does not have to say ‑ ‑ ‑

McHUGH J:   I appreciate that, Mr Ellicott, but, I mean, take section 7, the Authority may develop land, it may build houses.  That, on your argument, must mean that the DHA can disregard town planning laws, it can disregard local government ordinances, it can disregard the New South Wales ‑ ‑ ‑

MR ELLICOTT:   No, your Honour, I am not saying that.  I am simply pointing to the basic functions of the Authority and its powers.

BRENNAN CJ:   Mr Ellicott, is this the proposition?  The Commonwealth Act confers certain powers.  The powers that it confers and the manner of their exercise is to be judged, in the first instance, by reference to the operation of that Act in the context of the common law.  If there be a State law which infringes the freedom that is thus ascertained, then a question may arise as to inconsistency under section 109.

MR ELLICOTT:   Your Honour, that to me, with respect, is an acceptable way of putting it.

BRENNAN CJ:   Then if that is the way in which you would put it, it is a bit too broad brush, is it not, to say that the New South Wales Residential Tenancies Act, as a whole, is inconsistent.  What you must do is to find the provisions of that Act which so impinge upon the freedom created by the Commonwealth Parliament as to create the inconsistency.

MR ELLICOTT:   Those are found in Part II and Part III of the Act.

BRENNAN CJ:   They may be found there, but is your argument still, as I understood it to be, that the whole Act is inconsistent?

MR ELLICOTT:   Your Honour, it would leave so little that - when one refers to Part II and III and the powers of the Tribunal under the Act to adjudicate between the Commonwealth or the Authority and a third party, then it leaves so little that it really, in substance, is the whole Act.  That is how we put it, your Honour. 

Your Honours, in our submissions, we pass on to deal with section 52(ii). Our submissions there are found at page 16. There has been a discussion, indeed a judgment, in relation to the effect of section 52(ii) in Australian Postal Commission v Dao (1985) 1 NSWLR at 565 in the judgments of Justice Kirby and Justice Samuels. I do not mean any disrespect when I say that I do not propose to read those judgments in full, but simply refer the Court to them and say that we adopt them in terms of their analysis of the meaning and effect of section 52(ii) of the Constitution.

I may come to certain parts of it shortly, but I just wanted your Honours to be aware of that as I understand is the basic authority as to the meaning and effect of section 52(ii), and we ask your Honours to endorse those judgments. I do not think Justice McHugh was quite as ‑ ‑ ‑

McHUGH J:   I do not think I was favourable to you.

MR ELLICOTT:   No, you were not, your Honour.  I have not mentioned your Honour’s name.  I will in other respects later, I promise.  But in 52(ii), your Honours will recall it says - and this paragraph is in very wide terms:

The Parliament shall, subject to this Constitution, have exclusive power to make laws for the peace, order, and good government of the Commonwealth with respect to -

Then there is the seat of government, and then (ii):

Matters relating to any department of the public service the control of which is by this Constitution transferred to the Executive Government of the Commonwealth.

Now, it is our submission that this Act is an Act which has been passed - although it could be passed in reliance on the power under section 51(vi), it nevertheless comes within the purview of 52(ii).  There have been arguments, but they are laid to rest in Dao’s Case, we respectfully submit, as to whether 52(ii) is a provision of some transitional nature. 

Now, your Honours will recall that section 69 of the Constitution provided for the transfer to the Commonwealth of various departments, and included in them were those for naval and military defence. So that there is no doubt that the Defence Department was one of those which was transferred and, therefore, whether or not section 52(ii) should be given a wider meaning to now refer to all departments, it is clear that it includes the Department of Defence.

It has been sought to take out of the words transferred some transitional characteristic. We would submit that, had it been intended to do that, one would not have found such a provision in 52(ii) alongside matters such as the seat of government and three other matters declared to be within the exclusive power of the Parliament. Section 52(ii), we submit, is an ongoing power of the federal Parliament, and it covers the control and management and administration of the executive government in relation to Defence.

Something that lies at the very heart of the defence of the Commonwealth, of course, is the provision of housing for Defence personnel.  They say that an army marches on its stomach, but it also, these days, depends very much, in times of peace, on, obviously, the provision of proper housing to Defence personnel and their families, and proper arrangements in relation to it, and proper terms and conditions.

So that it is not something that is purely incidental, it lies right at the very heart, and when this Act was introduced into the Parliament, this was emphasised in the second reading speech.

Now, your Honours, at page 579 of - because this appears to be what one might suggest the main attack, that this is purely transitional - his Honour Justice Kirby - this is page 579 of Dao’s Case in the Court of Appeal - deals with reasons why section 52(ii) is not transitional, and he refers to:

First, the context in which section 52(ii) appeared makes such a transitional operation unlikely.

Secondly, this conclusion is confirmed when it is remembered that specific provision was made in the Constitution for transfer of officers and transfer of the property of the States -

under section 84 and 85.

Thirdly, the terms in which the powers are conferred is relevant.....the opening words of section 52 are generous in their amplitude.  They confer legislative power in the most ample terms.  There is nothing in their expression which suggests transitional provisions or the intention of a transitional effect.  On  the contrary, the language and context suggests the handsome conferral of powers intended to endure.

Fourthly, there is the policy of the section.

And his Honour goes on to deal with that.  I do not mean any disrespect in not reading that in full, but we would say that that is a clear analysis of the reasons why this is not a transitional provision, contrary to something that had indeed been said in Carter v Egg and Egg Pulp Marketing Board 66 CLR 571 by Chief Justice Lathan, who had suggested it might be transitional. But there are many references to section 52(ii) in conjunction with other provisions relating to the transfer of departments, which rather see it as part of a reason, in the earlier cases, why the defence power was even exclusive. Now we are not submitting that it is exclusive here today, but one of the sections that was referred to in the earlier cases was section 52(ii) to buttress an argument that, in effect, the defence power was exclusive.

So contrary to what the Chief Justice said in Carter’s Case, we would submit the basic thinking, judicially, in relation to section 52(ii) has been that it is not transitional. Now, at page ‑ ‑ ‑

BRENNAN CJ:   Mr Ellicott, do you say that the Department of Defence, as at the time of the enactment of the DHA Act, was a department of the public service in each State within the meaning of that phrase in section 69?

MR ELLICOTT:   I think we do, your Honour. 

BRENNAN CJ:   I mean, that is the key, it it not?

MR ELLICOTT:   I must say I had not traced it historically, but I think that is our submission that there was a Department of Naval ‑ ‑ ‑

BRENNAN CJ: I mean, the department to which 52(ii) refers must in this context be the institution that is referred to in section 69?

MR ELLICOTT:   Yes, in one sense, that it identifies the function that was taken over from colonies.

KIRBY J:   You say the words that begin “the control of which” down to “Commonwealth” is an adjectival clause describing the departments of the public service?

MR ELLICOTT:   Yes, and therefore, in the fullness of time will embrace any aspect of the Department of Defence’s relationship with Defence personnel, be it housing or the provision of other materials in order to deal with the defence of the Commonwealth.  At page 588 there is a passage in the judgment of Justice Samuels where his Honour also deals with the question of whether this is a transitional provision and we rely on that. 

There was a recent decision of this Court which does assist to understand, in our submission, the way in which section 52(ii) would operate in this case. One can ask the question, for instance, would the State law, if it was passed solely in relation to Defence tenancies, if I can call them that, would it be a law under 52(ii), and we would say it would be. The Defence Housing Act itself, we say, is a law passed under 52(ii). In Allders’ Case your Honours will recall there was an attempt to push aside another earlier decision of this Court in Worthing’s Case.  At page 3 of your Honour the Chief Justice’s judgment, at the top, your Honour referred to a passage from Justice Menzies in Worthing:

“To the extent to which section 52 grants legislative power to the Parliament, it denies legislative power to the Parliaments of the States.  The denial is measured by the grant.”

The denial of power to the Parliaments of the States does not depend upon the enactment of a law in exercise of a power conferred on the Commonwealth Parliament by section 52.  Section 52, unlike section 109, does not suspend the operation of a valid State law.....it denies the validity of a measure enacted by a State Parliament to the extent that section 52 confers on the Parliament of the Commonwealth a power to enact a measure having the same operation.

At page 10, your Honour the Chief Justice, said, referring to 52(i):

That paragraph invalidates the State law which operates on any act, matter or thing which has such a connection with a Commonwealth place as would support a law expressed to apply to that act, matter or thing.  A Commonwealth law which would tax the creation of a leasehold interest in land within a Commonwealth place would have a direct and close connection with the locality, irrespective of the fact that the lessee alone is accountable.

That is a Commonwealth law:

By imposing a tax which burdens the demise of.....premises within a Commonwealth place, the Act applies to a transaction affecting the ownership of proprietary interests in a Commonwealth place.  The operation of the Act which brings the instrument to charge thus reveals a nexus with a Commonwealth place that invalidates that operation.

May I say, with respect, that that is a very broad application of section 52(i).  It moves, in a sense, factually, not in principle, but factually, beyond Phillips’ Case and Worthing’s Case and it, obviously, gives great amplitude and fullness to section 52(i).  Now, 52(ii) should be construed in the same way.  There is a similar passage at pages 52 and 53 of the judgment of Justices McHugh, Gummow and Kirby. 

So it is in that context that we submit that the Defence Force Housing Act is an exercise of power under section 52(ii) and the State law also is a law which, in so far as it operates, it does not have to be aimed at it on its face, it can be a general law as the section 52(i) cases illustrate, if it invades the area then it is invalid, and we would submit that the Residential Tenancies Act is invalid. 

Your Honours, I come now to the argument that we put forward in relation to Cigamatic.  I do not know whether the Court has actually said it wants to go into Cigamatic or not, but I have come here to argue it on the basis that it does.

GAUDRON J:   Before you come to that, you do not wish to address anything further whether the DHA is in fact a department, the department?

MR ELLICOTT:   Your Honour raised that with me in relation to the first matter.  In relation to this ‑ ‑ ‑

GAUDRON J:   Particularly in the light of the Chief Justice’s observations to you about the lack of ministerial control.

MR ELLICOTT:   Your Honour, section 31 does give the Minister quite a degree of control.  He can give directions in the public interest.  The question to ask is not, we would submit with great respect, “Has this been put beyond the ministerial control in all respects?”  The question to ask is, “Is this a way of organising the executive government, or the Department of Defence, in relation to the defence of the Commonwealth?”  In that respect, it is open to the Parliament to decide that it will do this through an agency.

GAUDRON J:   It is certainly open to the Parliament to do it, but by so doing it, is it the department that is doing it?

MR ELLICOTT: The word “department” should not be seen as limited to the Department of Defence. The word “department” should be given a broader meaning, but one thing that is even perhaps more significant is that the terms of section 52(ii) themselves say it has to be with respect to:

Matters relating to any department of the public service -

and that does not mean, therefore, that we have to say that the Defence Housing Authority is the Department of Defence.  What we are submitting is that this is a matter which relates to that department in the sense that a function of the Department of Defence surely has to be the provision of housing for Defence personnel.

BRENNAN CJ:   Or it may be a function of the Department of Administrative Services.

MR ELLICOTT:   It could be if a government so chose, but that is in the minds of a politician who is administering the Commonwealth.

BRENNAN CJ:   It may be.  Who is the Minister administering this Act?

MR ELLICOTT:   This particular Act?

BRENNAN CJ:   Yes, under the regulations who is the Minister?

MR ELLICOTT:   The Minister for Defence but, your Honour - and I do not mean this critically ‑ ‑ ‑

GAUDRON J:   Or the Minister for Defence Personnel.

MR ELLICOTT: It is the Constitution and it is dealing with a phrase:

any department of the public service the control of which is by this Constitution transferred -

It would not matter what Minister had control of it.  It is the Department of Defence, as it turns out.  It is the Minister of Defence who has control of it, and the housing of Defence personnel lies at the heart of the defence power of the Commonwealth.

BRENNAN CJ:   Which way are you putting it?  Are you putting it on the basis that this relates to the Department of Defence or are you saying that this is the Department of Defence wearing another guise?

MR ELLICOTT:   I am saying that it relates to the Department of Defence.

BRENNAN CJ:   So it matters not whether it is part of the executive government or not; is that the argument?

MR ELLICOTT: No, your Honour, it is not the argument. It is an aspect of the executive government, most surely, but the Parliament in its wisdom has chosen to do it this way, that is to say by setting up a Defence Housing Authority, because no doubt it found that doing it in another way, which I do not have to describe - it is no doubt described in the second reading speech - was not satisfactory, so they decided to do it this way. That is a matter that relates to the Department of Defence. To that extent this Act comes within the purview of section 52(ii). But at the same time what it is doing is performing what would be a function and is no doubt a continuing function and a matter of considerable interest to the Department of Defence - that is the provision of adequate housing to Defence Force personnel. One would imagine in the Department of Defence there are people who are keeping an eye on the Defence Housing Authority. That is how we put it, your Honour.

Your Honours, that brings me I think to Cigamatic.  I had raised the question whether or not the Court had decided to consider the question.

BRENNAN CJ:   Mr Ellicott, when you say you have come to Cigamatic, do you mean to say that you adhere to the judgment in Cigamatic and you wish to expound it?

MR ELLICOTT:   Yes, your Honour.

BRENNAN CJ:   Then there is no reason why you should not.

MR ELLICOTT:   No, if your Honour pleases.  Well, I will do that, but I will do it by reference to some basic propositions which lie at the heart of what we say is the appropriate and proper constitutional principle, and that is State laws cannot, of their own force, bind the Commonwealth.  That is the basic thrust of the cases which led up to Cigamatic, and which Cigamatic represents.  There has been an attempt to read them down but, at the end of the day, that is what those cases are saying. 

Now, can I just refer your Honours to what we say are basic propositions which will be found in the cases. But in considering this particular principle, it is immensely important to see them in this light, because you will not find them in so many words written into the Constitution. But this argument does raise a fundamental issue about the nature of the Constitution, and how it came about, and what the Commonwealth represents. First of all, there is this proposition. The new Commonwealth would, of necessity, have social, political and legal relationships with its subjects. It sounds simple enough, but it is, we say, a basic proposition.

There was brought into existence a new Commonwealth, and part of its being and its raison d’etre was to do just that. Indeed, it could not function unless it did. Now, some of those relationships - and this is the second proposition - some of those relationships would be governed by the Constitution, or by statute passed by the Commonwealth Parliament. And the third proposition: to the extent to which those laws were inconsistent with State laws, they would prevail under section 109. Having in mind the recent decision of this Court in Kable’s Case, one can say, we would respectfully submit, that to the extent to which State laws are inconsistent with Chapter III judicial power, they are invalid.

That is in the area of law making, both in relation to Chapter I and Chapter III. But what about Chapter II? Now, some of the relationships are governed, or would be governed, by the prerogative, or by contractual, for instance, relationships entered into by the Commonwealth with its subjects. That is clear enough. Now, what is important, and which brings me to the next proposition, is that the subjects of this new Commonwealth were, of necessity, a much wider group of people than those resident in a particular State, and they were the people - the Australian people, or the people of the States as the Constitution describes it in the preamble - who called the Commonwealth into existence. They called it into existence so that it could represent or symbolise their nationhood. That is basic to our argument; basic to an understanding of the Constitution, and what it does when the Commonwealth is brought into existence.

It is a truism to say that the States or the colonies did not bring the Commonwealth into existence, they did not, and the States themselves did not, in a sense, pre-exist the Constitution or the Commonwealth; they themselves are the creatures of the Constitution. There were colonies, and sections 107 and 108 and 106, they have their own interpretation and meaning and content, but at the end of the day the States themselves were not the creators of the Commonwealth nor were the colonies, and it is important that, right at the outset, the people of the Commonwealth call it into existence, and they call it into existence for a relationship between them and the Commonwealth that they have created.

Now that relationship is about contractual relationships, it is about laws, it is about a host of things, it is about the prerogative if it continues to exist, or the prerogatives as they are modified, but it is that relationship between the Commonwealth and the people that lies at the whole basis of our Constitution, and the reason why the people of the Commonwealth see it as the expression of nationhood. Now that is not a motive political statement, with great respect; that represents a view consistent with the Constitution that, to some extent, we drew from in drafting our own, and that is the United States Constitution.

DAWSON J:   But they saw it as an expression of federation as much as nationhood.

MR ELLICOTT:   Yes, but the problem with just saying it is an expression of federation tends to reduce the argument down as if it is some combination of States.  The States or colonies could not agree; it was the people, historically, who called the Commonwealth into existence, and when section 5 of the covering clauses makes a statement, it says that the law “shall be binding on” the peoples of all the States, as well as, of course, the States and others, in the would-be territories that would appear.  But the same thought is in McCulloch v State of Maryland, and may I just read it.  Your Honours have probably had it read or read it many times before:

If any one proposition could command the universal assent ‑ ‑ ‑

McHUGH J:   What page, Mr Ellicott?

MR ELLICOTT:   Page 403 in - I was not sure your Honours had been given the reference.  I will just get your Honours the reference.

BRENNAN CJ:   It is 4 Wheat 315, I think, 1819.

MR ELLICOTT:   And I am reading at page 405 of the report:

If any one proposition could command the universal assent of mankind, we might expect it would be this - that the government of the Union, though limited in its powers, is supreme within its sphere of action.  This would seem to result, necessarily, from its nature.  It is the government of all; its powers are delegated by all; it represents all, and acts for all.  Though any one state may be willing to control its operations, no state is willing to allow others to control them.  The nation, on those subjects on which it can act, must necessarily bind its component parts.  But this question is not left to mere reason; the people have, in express terms, decided it by saying ‘this constitution, and the laws of the United States, which shall be made in pursuance thereof,’ ‘shall be the supreme law of the land,’ and by requiring that the members of the state legislatures, and the officers of the executive and judicial departments of the states, shall take the oath of fidelity to it.

Now there is a tendency to disparage our own Constitution, as if it does not have the expression of these ideas, but actually it does, and I have no need to tell your Honours that, but I say it again because it is simply part of our argument, and an understanding of why the Cigamatic principle should be enshrined in the judgments of this Court, as it has been in the past, and if one goes to the preamble, and the recital:

Whereas the people.....have agreed to unite in one indissoluble Federal Commonwealth under the Crown -

et cetera, and then covering clause 5:

This Act, and all laws made by the Parliament of the Commonwealth under the Constitution, shall be binding on the courts, judges, and people of every State and of every part of the Commonwealth, notwithstanding anything in the laws of any State;

Now, the we, the people notion, is well and truly embodied in our Constitution, and the notion that it is the supreme law of the land is well and truly embodied in covering clause 5.

That notion, we would submit, is not available to be destroyed by the fine print of intellectual analysis. It is a fundamental part of our constitutional arrangements and the coming into being of the Constitution. The Commonwealth was the political entity, therefore, in which the people of the States had agreed to unite, and they were its subjects. The States - and I do not mean to disparage them, but they are here in their numbers - they were but part of the Commonwealth; they were but part of the Commonwealth. The Commonwealth did not pre‑exist the Federation - it is clear enough. The colonies had no control or other relationship with the Commonwealth which could be carried forward into Federation.

Sections 106 to 108 could not be the source of any power by a State over the Commonwealth.  There was nothing to bring forward.

DAWSON J:   I have never understood that, I must confess, Mr Ellicott. 

MR ELLICOTT:   Never understood what, your Honour?

DAWSON J:   There are a lot of things that did not - what you are just saying, the passage you were just reading from, that merely because the Commonwealth did not exist before Federation it therefore follows that the States have no powers over it.  If those powers extended to something like that when it came into existence, why should not they?

MR ELLICOTT: Because it would need to find something; something in the Constitution that would enable the States to exercise some power over the Commonwealth.

DAWSON J:   Well, you find individuals who are acting on behalf of the Commonwealth to which a State law prima facie applies, and they are doing things to which the State law can apply.  How does it help the situation to say the Commonwealth only came into existence in 1901?

MR ELLICOTT:   It simply cuts off some means of argument that some people may use in order to - and it has appealed to the minds of others of considerable eminence in the law, and some of them came from Victoria, your Honour, who saw it as a very ‑ ‑ ‑

DAWSON J:   I am not saying it is wrong, I am just saying I do not understand it.

MR ELLICOTT:   I will try and take your Honour to the passage in question out of which the uno ictu reference ‑ ‑ ‑

DAWSON J:   Yes, I am familiar with that, too.

MR ELLICOTT: Your Honour will be familiar with that and I will take your Honour to that passage and see if I can explain something of it to your Honour to remove that view. I would submit that the reasoning is that because the Commonwealth is the creature of the Constitution, because it was brought into existence, as I have submitted, and is the fact, by the people, it was not there to be subjected to the control of the States.

DAWSON J:   One can understand that perfectly well in the sense that ‑ ‑ ‑

MR ELLICOTT:   Your Honour, that is immensely important.

DAWSON J:   ‑ ‑ ‑ for example that the State could not pass a law saying what the duties of the Governor‑General were.  But, when you have people who act on behalf of the Commonwealth doing things which otherwise the State has power over, why should it cease to have power merely because they are doing it on behalf of the Commonwealth.

MR ELLICOTT: That may have been a reasonable proposition to argue about in the constitutional conventions, but we would submit that there is nothing in the Constitution, either by implication or otherwise, to support it. If there was any implication, it is the other way and, we would submit with very great respect, political and constitutional common sense would dictate but if we, as a people, have brought into existence, the Commonwealth, and have given the States residual powers, then it is not to be implied that somehow the States are then to be able to - and this is the important word - control the Commonwealth.

I am not trying to put forward any submission that says the Commonwealth or its agents or officers are never subject to some State law, that is a different issue.  The emphasis is on the word “binding” the Commonwealth or “controlling” the Commonwealth, and our submission is that basic to an understanding of the Cigamatic principle, as I elliptically call it, is that notion that the States did not have a pre-existing right, nor did the colonies, to control the Commonwealth, that is obvious.  It is another way of saying you do not bring something into existence as powerful as the Commonwealth which, after all, has the subjects of the whole of the country and not just one State, to somehow then use the powers of the States to subject it to some form of control, be it by way of taxation or otherwise.  That is, we submit, a basic proposition to that.

The next proposition is this:  the Commonwealth having had vested in it enumerated legislative powers, the Engineers’ Case had decided that the Commonwealth could pass a law which bound the States.  Obviously, that was carried through into Victoria v The Commonwealth in this Court in 1970, and that decided that the Payroll Tax Act was valid in so far as it taxed the States and it was a law with respect to taxation.  That is bread and butter constitutional law and I hope I do not need to push that - that is the Engineers’ Case - but the Engineers’ Case has not been overruled, it is still with us.

In a sense, what the States are trying to do is to get the Engineers’ Case and use it against the Commonwealth and say, “Oh, well, it was all right for you to say, ‘a la Engineers’ Case’, that the Commonwealth could bind the States”.  We say that a consequence of that is that the States combine the Commonwealth.  That has always been the argument since 1924 and the States have continuously come to this Court with a view to try and get that proposition established.  For just a while, they succeeded in Uther’s Case, but those in their wisdom who understood the Constitution but waited for the moment, as some justices do, expressed a different view in Cigamatic, but it was inconsistent with the Engineers’ Case, in some minds, it is an expression of it.

One of the reasons is this, and it is the next proposition.  The States, however, only had the residue of power.  They cannot argue, “Oh, we’ve got the power to make laws with respect to” and, of course, if they were able to argue that way, then it might help them to get the Engineers’ Case up and construe the Constitution that way so that the Commonwealth with respect to this, the States with respect to that. It did not happen that way. They get the residue of power, and they pass laws not with respect to matters, they pass laws for the peace, order and good government of the State.

Now, it may be that in the course of doing that they combine the Crown in the right of the United Kingdom, or of another State, or, if there is such, of a Territory.  Maybe they can do that.  But that is a different matter, because none of those entities has power over the subjects - if I can call them that - within that particular State, and they are passing a law for the peace, order and good government of that State.  But the Commonwealth has the same subjects - the very same subjects - but not only those subjects, it has the whole of the subjects of the Commonwealth.  And when the State of New South Wales seeks to impose something on the Commonwealth, what it is purporting to do is to impose a law not on the people of New South Wales alone, but the whole of Australia.  That points up a weakness, and a fundamental weakness, in the argument.

DAWSON J:   With respect to activities in New South Wales.

MR ELLICOTT:   Yes, but binding on the whole of the people of Australia.  That is what they are doing.  They are saying, “You the people, through the Commonwealth, you have, in your wisdom, decided to set up a Defence Housing Authority that is going to be able to enter into arrangements on behalf of the people of the Commonwealth ‑ ‑ ‑

DAWSON J:   That is what a New South Wales law does, Mr Ellicott.

MR ELLICOTT:    ‑ ‑ ‑  in relation to New South Wales.”

DAWSON J:   Yes, but that is what a New South Wales law does.  It is binding on everyone in the Commonwealth who carry on those activities in New South Wales to which the law applies.

MR ELLICOTT:   No, your Honour.  With respect, what it is doing is, a law of New South Wales is simply saying, “We, on behalf of the people who reside within New South Wales, pass this law for the peace, order and good government of New South Wales - a Residential Tenancies Act - and it will apply to people who are resident within New South Wales,” if that is the test.

DAWSON J:   No, who carry on those activities in New South Wales and, in that sense, it applies to people throughout Australia.

MR ELLICOTT:   It is not answered by the question, we would submit, your Honour, as to whether it has a connection or a nexus with the State; that would be another attempt to apply some literal application of the Engineers’ Case to the powers of a State. That is not what the Constitution does. What the State is purporting to do, however, is to bind all Australians, through their Commonwealth, to a law of New South Wales, saying, “In that respect, you are not just subject to the law of New South Wales as residents of New South Wales, you are subject to it completely, whether you be in New South Wales or not.”

Now, although the Engineers’ Case had laid to rest the earlier doctrines of implies prohibition, it did not mean that there were no implications to be made in the Constitution. That is another proposition that lay before Bogle and Cigamatic, that is to say, that in Melbourne Corporation it was made quite clear - indeed, it had been made clearer earlier that there was room for implications in the Constitution. This principle which we espouse, and which this Court has espoused and adopted, has been here now for some 30 or 40 years and not challenged really. That principle is based very largely, one must say, on implication. It is a question of whether you will imply it in order to give substance and meaning and reality to the Constitution, or whether you will treat the Constitution as if it is some document which simply divides up powers between the State and the Commonwealth. That, we submit, is not what the Constitution can be described as, as such.

Another proposition which is basic, some will argue about it and try and put it aside, and maybe it can be put aside.  It has been stated differently in different cases, but it is largely this:  the Crown was not bound by a statute unless it had expressly assented to it.  A State may have assented to be bound by a statute it passed but the Commonwealth inevitably would not.  That notion of assent to be bound in the context of a political entity that has jurisdiction and power within a State, unlike the United Kingdom or another State, is a fairly compelling principle when it comes to determining whether or not the States can by law control or bind the Commonwealth.

KIRBY J:   I do not quite understand that theory, given that the State in respect of another State, the Crown in respect of another State, may not have given the assent.

MR ELLICOTT:   Because the Commonwealth runs within the State.  It is there within the State as a political entity.  It is part of the law of the State, whereas another State is a different State.  Its law may for some reason have an extraterritorial effect but its jurisdiction does not run within that State, nor does the United Kingdom or any other Crown in right of anything.

BRENNAN CJ:   What is meant by this term “bind”?  How does one apply it across the whole spectrum of legislative activity?

MR ELLICOTT:   I was just coming to it, your Honour.

BRENNAN CJ:   Good.

MR ELLICOTT:   The Cigamatic principle is fundamentally concerned with executive power.  That is what it is directed to.  Can I just give these two examples which may help to point up what we say about it.  Inevitably the Commonwealth executive will enter into contractual relationships and there will be State laws such as the Sale of Goods Act which will apply if the Commonwealth agrees that they shall apply.  In other words, the Sale of Goods Act says “unless the contrary intention appears”.  It will only apply if the Commonwealth agrees that it will apply.

BRENNAN CJ:   Can I just interrupt you for a moment.  When you say “if the Commonwealth agrees it shall apply”, do you mean legislatively or by executive action?

MR ELLICOTT:   By executive action agrees in a contractual arrangement that it will apply.  It is there ‑ ‑ ‑

BRENNAN CJ:   But not if the executive contractual arrangement says no.

MR ELLICOTT:   No.  It simply means this, that if the executive enters into a contract which may be governed by the law of New South Wales, that they can determine in that contract whether or not they will agree to the Sale of Goods Act applying to that contract to determine the rights and obligations under that contract.

BRENNAN CJ:   Are you saying anything different than the fact that the executive may, in exercising the function of contracting, exercise the same freedom of contractual action as any individual?

MR ELLICOTT:   Any individual could do exactly the same thing.

BRENNAN CJ:   Then what is the significance of the Crown executive in light of the Commonwealth not being bound?  I do not understand that.

MR ELLICOTT:   Your Honour, I am trying to draw the distinction that your Honour was seeking from me.  I have made that statement.  Now may I make this one?  However, where the Commonwealth enters into a relationship, for example, of landlord and tenant, and there is a State law which purports to control that relationship, whether the Commonwealth agrees or not the State law would be invalid.  So that under the one, the Sale of Goods Act, it can subject itself to because it says - the Sale of Goods Act says, unless the contrary intention appears, that is the effect of it, but if the ‑ ‑ ‑

McHUGH J:   But there is a difficult practical point, is there not, Mr Ellicott?  What is the manifestation by the Commonwealth executive that it is bound, and when does that manifestation have to arise?  I mean, the Commonwealth buys some goods, it might be an oral contract.  Does the Sale of Goods Act apply in that situation just simply because they have bought some goods under an oral contract?

MR ELLICOTT:   It could, your Honour, yes, but this is the point.  I am looking at the law of the State.  The law of the State does not purport to bind the Commonwealth whether it agrees or not, and that is where, we say, the line has to be drawn.  If a State purports to bind the Commonwealth by a law, whether the Commonwealth agrees or not, it is invalid.  If a State passes a law, like the Sale of Goods Act which is Commonwealth is free to abide by or not, or allow to govern the transaction or not, it is outside.

McHUGH J:   I understand.  The Sale of Goods Act, no problem; Hire Purchase Act, Money Lenders Act, they are invalid because they purport.

MR ELLICOTT:   Yes, in so far as they purport to bind transactions entered into by the Commonwealth.

DAWSON J:   Statute of Frauds?

MR ELLICOTT:   I am not sure where it is coming from?

BRENNAN CJ:   I think we are on the same wave length and that is this:  if the Defence Housing Authority manager goes along to the vendor of a parcel of land, agrees the price and all particulars of the contract orally, the vendor decides not to complete action for specific performance by the DHA, defence of the Statute of Frauds, what happens?

MR ELLICOTT:   If the Statute of Frauds binds the situation, your Honour, in the sense that it applies to the situation, well, that is all right.

BRENNAN CJ:   We have got no other facts but that, what is the result in law?

MR ELLICOTT:   The result in law will be if that is a statute which is attempting to control the Commonwealth then it may, of course ‑ ‑ ‑

DAWSON J:   Well, is it?

MR ELLICOTT:   I would have to look at it but I would suspect ‑ ‑ ‑

DAWSON J:   We are asking you.  You are no doubt familiar with the Statute of Frauds, Mr Ellicott?

MR ELLICOTT:   Yes, I am, but I suspect it would bind the Commonwealth because it says it shall be void, and if it says that ‑ ‑ ‑

McHUGH J:   This seems a paradox, does it not?  Your argument seems to lead to the conclusion that the Commonwealth is bound when the Act does not say it is bound, but if the Act says it is bound, it is not bound.

MR ELLICOTT:   No, your Honour.  If the Act purports to bind the Commonwealth, then it is bad.  If it purports to control the Commonwealth, then it is bad, it is invalid.

McHUGH J:   Well, let me give you an illustration.  The Commonwealth, this department, enters into a contract for the sale of land, to sell land, and the purchaser defaults, the Commonwealth forfeits the deposit, the purchaser brings an application under section 54(a) of the New South Wales Conveyancing Act for the return of the deposit.  It relies purely on the statute.  Is the Commonwealth bound by that statute?

MR ELLICOTT:   No.

McHUGH J:   It does not purpose - a law of general application?

MR ELLICOTT:   A law of general application like the Residential Tenancies Act.

McHUGH J: So the New South Wales Supreme Court cannot order, leaving aside 64 of the Judiciary Act?

MR ELLICOTT:   That is another issue.

McHUGH J:   Yes.

MR ELLICOTT:   Indeed, it may provide an answer.  It may or may not provide an answer depending on the particular law involved and that may be an answer to the Statute of Frauds.

McHUGH J:   Statute of Frauds.

MR ELLICOTT:   If we are dealing with the simple proposition - and that is how I am dealing with it, apart from section 64, then the proposition - and I do not depart from it - is that the State cannot bind the Commonwealth.  State law cannot bind the Commonwealth.  The Commonwealth may subject itself to it, it may allow it to bind it, but at the end of the day the State cannot pass a valid law which binds the Commonwealth.

DAWSON J:   How does it allow itself to be bound?

MR ELLICOTT:   It may not do anything about it, that is all.  I am not speaking legally when I say that, your Honour.  I am just simply saying that you may have instances where the Commonwealth does subject itself to certain laws.

DAWSON J:   By entering into a transaction?

MR ELLICOTT:   It may not object.  I have known of circumstances where the Commonwealth does not object to going through certain procedures but it does not mean it does not have the power to say they do not - or does not have the right, rather, to say, “Those procedures don’t apply to us.”  That is all that I mean, that it may, as part of comity, subject itself but that does not mean that the laws themselves are valid.

DAWSON J:   So you enter into a contract with the Commonwealth and you just do not know until some dispute arises what the law is that applies to it is?

MR ELLICOTT:   You do know if it is a law - subject to section 64 and whatever effect that has, you do know, on this principle, that if it depends on a law of a State binding the relationship, you do know as a third party, that that law is invalid.  That is where the line is drawn.

DAWSON J:   Although the Commonwealth may, as a matter of grace and favour, observe the requirement of that law.  That is what you are saying?

MR ELLICOTT:   It may, or it may, in its wisdom, pass section 64 or whatever section it is that is to be looked to, subjecting the Commonwealth to actions in contract and tort.  There is nothing more surprising in this than the proposition that you do need a Crown proceedings type of Act to subject the Crown to actions by the subject.  There is nothing unusual about this proposition in those terms.  Nothing surprising.  It is no more black and white than that.

McHUGH J: Do you place any reliance at all on section 78 of the Constitution in relation to the Cigamatic doctrine?  Do you rely on it to assist you in any way?

MR ELLICOTT:   I did look at it, your Honour.  At page 30 of our submissions we deal with that.  What we say is in the absence of such a right to proceed being conferred, the Commonwealth may be sued only where it voluntarily subjects itself to the jurisdiction of a court.  State Parliaments do not have power to legislate so as to render the Commonwealth liable to suit.  We do rely on it, your Honour.

GUMMOW J:   The specific performance action that was mentioned would be federal jurisdiction under section 75(iii), would it not?

MR ELLICOTT:   Yes, your Honour.

GUMMOW J:   And then the question would be what law was picked up ‑ ‑ ‑

MR ELLICOTT:   It would be a question of whether section 75(iii), first of all, is only jurisdictional.

GUMMOW J:   Yes.  I am not necessarily putting this against you, but there is discussion of an action for specific performance where the contract is made with the Commonwealth.  The Commonwealth sues for specific performance.  If the Commonwealth sues it must be suing under section 75(iii).

MR ELLICOTT:   Yes.

GUMMOW J: The question then is where does the substantive law come from? Is it picked up by section 79 or 80? If it is picked up, it is picked up by a Commonwealth law, and if that is right ‑ ‑ ‑

MR ELLICOTT: It will be picked up by laws passed under section 78. Some might think it is picked up by the incidental power ‑ ‑ ‑

GUMMOW J:   Is not all of this relevant in working out what Cigamatic means when one talks about surrendering and so on?

MR ELLICOTT:   It is relevant in the sense that it ‑ ‑ ‑

GUMMOW J:   Being bound and so on.

MR ELLICOTT: That when you use the expression “binding the Commonwealth” then it justifies the proposition in terms of the surprise which people might express that such a proposition should be stated because it is no different, in effect, to section 78 which has behind it the notion that unless the Parliament does make such laws then people cannot sue the Commonwealth, and that would be, to the man in the street not knowing of section 78, an astounding proposition.

McHUGH J:   It is probably the case that it is only a very small percentage of matters that the Cigamatic principle applies, because of the Judiciary Act sections 56, 64, 79 and 80 which tend to apply the law generally to the Commonwealth.

MR ELLICOTT:   Yes, your Honour.

GAUDRON J:   One other area that might tend to have that effect, and it seems to me to be relevant in determining the true scope of the so‑called Cigamatic principle is this; it seems to me that the ordinary principles of estoppel might operate to say if an organisation such as the DHA does not alert its prospective lessor to the fact that State laws which apply to every other lessee do not apply to it, it might be estopped from asserting that it is not bound.  That would seem to have some relevance to what is the true ambit of the doctrine.

MR ELLICOTT:   But with respect, your Honour, we would submit that would only mean that that person would not have any remedy in estoppel unless that person could sue the Commonwealth in respect of it, and that would go back ‑ ‑ ‑

GAUDRON J:   Well, no, he sues the Commonwealth - well, he brings proceedings.  It may not work in this case, of course, but there may be other instances where it does operate, where it may be that the estoppel would simply operate to say, “Well, you cannot raise that issue.”  Maybe it would work here.

MR ELLICOTT:   Yes. But it will not work other than, in our submission, in the context of a law such as whether it is section 64 or some other provision - 56 of the Judiciary Act- which, pursuant to section 78 of the Constitution, does subject the Commonwealth to suit in which an issue such as estoppel could be raised. Now, your Honours, those, we submit, are the basic propositions which underlie the application of the principle. There are a number of cases which I should refer your Honours to which emphasise these propositions. Needless to say, the Engineers’ Case 28 CLR 129 is basic to a consideration of it. There is a passage at the foot of page 151 - a short passage - that I just wanted to refer to:

When the people of Australia, to use the words of the Constitution itself, “united in a Federal Commonwealth,” they took power to control by ordinary constitutional means any attempt on the part of the national Parliament to misuse its powers. If it be conceivable that the representatives of the people of Australia as a whole would ever proceed to use their national powers to injure the people of Australia considered sectionally, it is certainly within the power of the people themselves to resent and reverse what may be done. No protection of this Court in such a case is necessary or proper. Therefore, the doctrine of political necessity, as means of interpretation, is indefensible on any ground. The one clear line of judicial inquiry as to the meaning of the Constitution must be to read it naturally in the light of the circumstances in which it was made, with knowledge of the combined fabric of the common law, and the statute law which preceded it, and then lucet ipsa per se.

Now I know that is what some would call basic law school proposition but it needs to be borne in mind in approaching the interpretation of the Constitution to see whether there is to be implied the proposition for which we are contending and which has been adopted in this Court.

In West’s Case 56 CLR 657, pages 681 and 682, Sir Owen Dixon, not in dissent, said, just over halfway down:

In the ordinary course of administration many obligations not created or defined by statute are contracted by the Commonwealth and discharged out of moneys lawfully available for the purpose. This is done in the exercise of the powers conferred by the Constitution.....Surely it is implicit in the power given to the Executive Government of the Commonwealth that the incidents and consequences of its exercise shall not be made the subject of special liabilities or burdens under State law. The principles which have been adopted for determining for the purposes of section 109 whether a State law is consistent with a Federal statute are no less applicable when the question is whether the State law is consistent with the Federal Constitution. Since the Engineers’ Case a notion seems to have gained currency that in interpreting the Constitution no implications can be made. Such a method of construction would defeat the intention of any instrument, but of all instruments a written constitution seems the last to which it could be applied. I do not think that the judgment of the majority of the court in the Engineers’ Case meant to propound such a doctrine.  It is inconsistent with many of the reasons afterwards advanced by Justice Isaacs himself for his dissent in Pirrie v McFarlane. Indeed, he there refers to “the natural and fundamental principle that where by the one Constitution separate and exclusive governmental powers have been allotted to two distinct organisms, neither is intended, in the absence of distinct provision to the contrary, to destroy or weaken the capacity or functions expressly conferred on the other.” He add: “Such attempted destruction or weakening is prima facie outside the respective grants of power.” There is little justification for seeking to find in the Engineers’ Case authority for more than was decided.

And he goes on. Now, your Honours, I cite that to indicate - I think it is the first time, and your Honours will know this - where Sir Owen Dixon raised the question of implications in the Constitution after the Engineers’ Case.

BRENNAN CJ:   But before you leave that passage, why is not the key to the problem to be found in the words “shall not be made the subject of special liabilities or burdens under State law” rather than the more general proposition that the State law cannot bind the Commonwealth?

MR ELLICOTT:   Your Honour, this passage, historically, is more akin - and I am quoting it simply to point to the point where implication started to raise its head again after implied prohibitions had been thrown out the window.  It is more to do with the Melbourne Corporation principles than it has to do with the proposition that we are now addressing, your Honour.  In other words, the notion of aimed at or directed at a State or at the Commonwealth neither can direct or aim at the other.  That notion comes out of this passage, but the other notion that was developed in the later cases ‑ and this particular notion was applied in Melbourne Corporation, but it is a different one to the one that we are concerned with.  The later one, that is the Bogle and Cigamatic one was based on a different view and that is that the State cannot bind the Commonwealth, and that I will come to.

In Farley’s Case 63 CLR 278 at 308 there was a dissent. His Honour Justice Dixon relied on a different ground, namely a constitutional ground, and it was not a dissent, but at the top of page 308 now one finds the proposition emerging:

It appears to me that the substantial nature and purpose of the priority belonging to the debts due to the Commonwealth is decisive against the power of the State to impair or destroy it by legislation. The priority is a right of the executive government, founded.....upon motives of public policy, in order to secure an adequate revenue to sustain the public burdens and discharge the public debts. The administration of assets and the winding up of companies are matters over which the State legislative power extends. But it does not follow that, as an incident of providing a complete set of rules for the application of assets in an administration or winding up, the State legislature may detract from or adversely affect governmental rights of the Commonwealth. In many respects the executive government of the Commonwealth is affected by the condition of the general law. For instance, the general law of contract may regulate the formation, performance and discharge of the contracts which the Commonwealth finds it necessary to make in the course of the ordinary administration of government. Where there is no Federal statute affecting the matter, an exercise of the legislative power of the State over the general law of contract might incidentally apply in the case of the Commonwealth alike with the citizen. In the practical administration of the law, the decision of questions of that sort depends less upon constitutional analysis than on sec 80 and perhaps sec 79 of the Judiciary Act.  There is, however, a clear distinction between the general law, the content or condition of which, though a matter for the legislatures of the States, may incidentally affect Commonwealth administrative action, and, on the other hand, governmental rights and powers belonging to the Federal executive as such.  The priority of debts due to the Crown has always been treated as a matter of prerogative and falls under the latter head.  I am, therefore, of the opinion that the New South Wales Companies Act could not operate to introduce into the winding up of companies an order of priority which postponed a debt due to the Commonwealth and, accordingly, that it does not draw in so much of sec 84.....as places assessed Federal income tax for one year -

et cetera.  Now, as I say, his Honour was not in dissent there.  He just arrived at the decision by a constitutional path as distinct from the other Justices.  The conflict came in Uther’s Case 74 CLR 508. A full reading of the relevant passage would require one to read from 527 to 531, but can I just confine my reading to some passages at page 528 and following. A third of the way down 528:

We are here concerned with nothing but the relation between the Crown in right of the Commonwealth as a creditor for public moneys and the subjects of the Crown as creditors for private moneys.  There are no conflicting claims between State and Commonwealth.  The conflict is between the Commonwealth and its own subjects.  What title can the State have to legislate as to the rights which the Commonwealth shall have as against its own subjects?

That is important, only historically, in the sense that I think it is the first time Sir Owen Dixon started to introduce the notion of the relationship between the Commonwealth and its subjects.

The fact that the priority claimed by the Commonwealth springs from one of the prerogatives of the Crown is an added reason -

not the only reason but an added reason -

a reason perhaps conclusive in itself, for saying that it is a matter lying completely outside State power.  But there is the antecedent consideration that to define or regulate the rights or privileges, duties or disabilities, of the Commonwealth in relation to the subjects of the Crown is not a matter for the States.

If that is to be read literally, it means that the Act in question here is invalid.

General laws made by a State may affix legal consequences to given descriptions of transaction and the Commonwealth, if it enters into such a transaction, may be bound by the rule laid down. For instance, if the Commonwealth contracts with a company the form of the contract will be governed by s 348 of the Companies Act. Further, State law is made applicable to matters in which the Commonwealth is a party by s 79 of the Judiciary Act.  But these applications of State law, though they may perhaps be a source of confusion, stand altogether apart from the regulation of the legal situation which the Commonwealth, as a Government, shall occupy with reference to private rights.  Take two examples.  At common law the King in virtue of his prerogative might effectually assign, or take an assignment of, a legal chose in action, at all events if it were for a debt or thing certain.  No law of the State could deprive the Crown in right of the Commonwealth of this special capacity or impose, for instance, the necessity of notice in writing.

That is a little bit closer to the Statute of Frauds notion.

Again, in the interval before the Claims against the Commonwealth Act 1902 made the Commonwealth liable for tort no State law could have done so.

That must be right.

Indeed it is interesting to notice -

and he goes on to deal with Washington v The Commonwealth and United States v Standard Oil.  Then down the bottom, the last paragraph:

A federal system is necessarily a dual system. In a dual political system you do not expect to find either government legislating for the other. But supremacy, where it exists, belongs to the Commonwealth, not to the States. The affirmative grant of legislative power to the Parliament over the subjects of bankruptcy and insolvency may authorize the enactment of laws excluding or reducing the priority of the Crown in right of the States in bankruptcy and it has been held that the taxation power extends to giving the Commonwealth a right to be paid taxes before the States are paid. But these are the results of express grants of specific powers, plenary within their ambit, to the Federal legislature, whose laws, if within power, are made paramount. Because of their content or nature, the express powers in question are considered to extend to defining the priority of debts owing to the States or postponing State claims to taxes. The legislative power of the States is in every material respect of an opposite description. It is not paramount but, in case of a conflict with a valid Federal law, subordinate. It is not granted by the Constitution. It is not specific, but consists in the undefined residue of legislative power which remains after full effect is given to the provisions of the Constitution establishing the Commonwealth and arming it with the authority of a central government of enumerated powers. That means, after giving full effect not only to the grants of specific legislative powers but to all other provisions of the Constitution and the necessary consequences which flow from them.

Now, it has to be remembered that his Honour is dealing with the implication, and he is pointing to factors - and I pointed to them in those propositions - which lead, he says, to the view that we are propounding here:

It is a fundamental constitutional error to regard the question of the efficacy of section 282.....as if it were an exercise of an express grant, contained in the Constitution, to the States of a power to make laws with respect to the specific subject of the winding up of insolvent companies. It is a provision enacted in intended pursuance of a general legislative power to make laws for the peace, welfare, and good government of New South Wales in all cases whatsoever. The content and strength of this power are diminished and controlled by the Commonwealth Constitution. It is of course a fallacy, in considering what a State may or may not do under this undefined residuary power, to reason from some general conception of the subjects which fall within it as if the they were granted or reserved to the States as specific heads of power. But no fallacy in constitutional reasoning is so persistent or recurs in so many and such varied applications. In the present case the fallacious process of reasoning could not begin from section 107 as the error has so commonly done in the past. For it is not a question whether the power of the Parliament of the a Colony becoming a State continues as at the establishment of the Commonwealth. The Colony of New South Wales could not be said at the establishment of the Commonwealth to have any power at all with reference to the Commonwealth. Like the goddess of wisdom the Commonwealth uno ictu sprang from the brain of its begetters armed and of full statue. At the same instant the Colonies became States; but when did the States obtain the power to regulate the legal relations of the new polity with its subjects? It formed no part of the old colonial power. The Federal constitution does not give it. Surely it is for the peace, order and good government of the Commonwealth, not for the peace, welfare and good government of New South Wales, to say what shall be the relative situation of private rights and of the public rights of the Crown representing the Commonwealth, where they come into conflict. It is a question of the fiscal and governmental rights of the Commonwealth and, as such, is one over which the State has not power.

Just a short part of the passage, two‑thirds of the way down:

Such a prerogative right of the Crown is exercisable by the Executive Government of the Commonwealth.  It may be relinquished or modified by and with the consent of the Parliament of the Commonwealth.  But from its very nature it must be outside the power of a State to detract from it.

That, of course, puts the argument much better than one can by reading some propositions.  Your Honours will see that those propositions were intended to encompass what his Honour said there.            Now, if your Honours want to see where the opposing point of view is put your Honours will read the judgment of Sir John Latham on pages 519 to 521. 

In Bogle 89 CLR 229, the matter was revisited and there the facts were a little closer to this. Commonwealth Hostels was dealing with migrant lessees and there was an appeal to the Prices Regulation of Victoria to fix the rent or to reduce the rent and it was said that that was interfering with the Commonwealth executive, that law in this particular case. As it turned out the proposition or the decision was that the Court did not have to apply the principle but before they went into the question whether or not the Commonwealth Hostels represented the Commonwealth, they went to the trouble, as they would, to decide, “Well, is it worth our while going into this? Is there a principle which we would then apply if it happened to be the Commonwealth?” At page 259 Justice Fullagar said this, “ In the view which I”, and takes a slightly different approach, just slightly different, but there is another reasoning that is applied as to why this principle should be adopted:

In the view which I have ultimately taken of this case it is not necessary to decide whether the Commonwealth is bound by the Prices Regulation Act (Vict.).  I think I should say, however, that, in my opinion, the Commonwealth is not bound by that Act, and, if I had thought that the Commonwealth, as the party with whom the defendant contracted, was the proper plaintiff in this action, I should have held that the defence to which I have referred failed.

Now, there is no doubt that that is an expression of view which, adopted as it was by other members of the Court, would mean that the Prices Regulation Act of Victoria was invalid in so far as it purported to bind the Commonwealth.  It would have to follow that the Residential Tenancies Act of New South Wales was invalid:

To say that a State can enact legislation which is binding upon the Commonwealth in the same sense in which it is binding upon a subject of the State appears to me to give effect to a fundamental misconception. The question whether a particular State Act binds the Crown in right of a State is a pure question of construction. The Crown in right of the State has assented to the statute, and no constitutional question arises. If we ask whether the same statute binds the Crown in right of the Commonwealth, a question of construction may arise on the threshold. In considering that question we are, or should be, assisted by a presumption that references to the Crown are references to the Crown in right of the State only. If the answer to the question of construction be that the statute in question does purport to bind the Crown in the right of the Commonwealth, then a constitutional question arises. The Crown in right of the State has assented to the statute, but the Crown in right of the Commonwealth has not, and the constitutional question, to my mind, is susceptible of only one answer, and that is that the State Parliament has no power over the Commonwealth. The Commonwealth - or the Crown in right of the Commonwealth, or whatever you choose to call it - is, to all intents and purposes, a juristic person, but it is not a juristic person which is subjected either by any State Constitution or by the Commonwealth Constitution to the legislative power of any State Parliament. If, for instance, the Commonwealth Parliament had never enacted s. 56 of the Judiciary Act 1903-1950 -

as his Honour saw it -

it is surely unthinkable that the Victorian Parliament could have made a law rendering the Commonwealth liable for torts committed in Victoria. The Commonwealth may, of course, become affected by State laws.  If, for example, it makes a contract in Victoria, the terms and effect of the contract may have be sought in the Goods Act.....But I should think it impossible to hold that the Parliament of Victoria could lawfully prescribe the uses which might be made by the Commonwealth of its own property, the terms upon which that property might be let to tenants, or the terms upon which the Commonwealth might provide accommodation for immigrants introduced into Australia.

Now, that is squarely in favour of the proposition that I am putting, and in favour of the view that the Residential Tenancies Act, on that basis, would be invalid.  The Chief Justice Sir Owen Dixon at 377, Sir Frank Kitto at 341, Sir Douglas Menzies at 389, Sir Victor Windeyer, Sir William Owen at 390, all ‑ ‑ ‑

McHUGH J:   Sorry, what are you citing from here?

MR ELLICOTT:   I am just giving your Honours the references on the transcript to where the other Justices agreed with Mr Justice Fullagar.

McHUGH J:   Your references cannot be correct, Mr Ellicott.

KIRBY J:   You gave us 390.

MR ELLICOTT:   I am sorry.

McHUGH J:   You may have been referring to Cigamatic, were you?

MR ELLICOTT:   I am.  I am sorry, your Honours, you are quite right, I have gone down in my notes.  Chief Justice Sir Owen Dixon at page 249 - I apologise for that - Sir William Webb at page 255, Frank Kitto at page 274 and Sir Alan Taylor at page 284.  I put a question mark against Sir Alan Taylor because when it comes to Cigamatic he did not want to upset Uther’s Case.  I do not want to squeeze too much out of Sir Alan Taylor.

BRENNAN CJ:   Will we need to compare the provisions dealing with Commonwealth Hostels and those dealing with Defence Housing Authority in this case?

MR ELLICOTT:   I put my argument in relation to that.  I could not say it would not be a material matter to do, to look at the two matters, but one is clearly an authority, we would submit, established by statute, subject to ministerial control with defined functions; whereas here you have a company set loose under the Companies Act of the particular State.  Their Honours, one might conclude quite properly, found that it was not, in that case, the Commonwealth.

Cigamatic 108 CLR - and I can still recall the look on Sir Owen Dixon’s face as this matter was argued, your Honours, because it was, I think, the last matter he had to attend to before he retired from the Bench, and that was the dealing with Uther’s Case.

BRENNAN CJ:   No doubt our brother McHugh is able to do the same.

MR ELLICOTT:   That is right, your Honour, I am sure he does.  At page 376 at the foot of the page, he said:

In the first instance the Commonwealth rests its claim on the right at common law of the Crown to priority of payment when in any administration of assets debts of equal degree due to the Crown and due.....come into competition.  This right arose from the sovereignty of the Crown -

he deals with that, and he says, after referring to Uther’s Case:

The proposition that is implied is that an exercise of State legislative power may directly derogate from the rights of the Commonwealth with respects to its people. It is a proposition which must go deep in the nature and operation of the federal system. There can be no doubt as to the nature or the source of the right of the Commonwealth in an administration of assets to be paid in preference.....It springs from the nature of the Commonwealth as a government of the Queen. Therefore to treat those rights as subject to destruction or modification.....must mean that under the Constitution there resides in a State or States a legislative power to control legal rights and duties between the Commonwealth and its people.

An attempt might be made by some minds to read this judgment down and say it is ratio therefore only relates to the prerogative, but what his Honour was seeing there was a wider proposition because the prerogative is only one instance of the relationship between the Commonwealth and its people.  He drew from that the proposition it:

must mean that under the Constitution there resides in a State or States a legislative power to control legal rights and duties between the Commonwealth and its people.

Then there is a reference to the judgment of Mr Justice Rich.  Then he says, further down:

Believing, as I do, that the doctrine thus involved is a fundamental error in a constitutional principle that spreads far beyond the mere preference of debts owing to the Commonwealth, I do not think we should treat Uther’s Case as a decisive authority upon that question which we should regard as binding. It is not a question, as it appears to me, of interpreting some positive power of the State over a given subject matter. It is not a question of making some implication in favour of the Commonwealth restraining some acknowledged legislative power of the State. If you express the priority belonging to the Commonwealth as a prerogative of the Crown in right of the Commonwealth, the question is whether the legislative powers of the States could extend over one of the prerogatives.....If, as in modern times I think it is more correct to do, you describe it as a fiscal right belonging to the Commonwealth as a government and affecting its Treasury it is a question of State legislative power affecting to control or abolish a federal fiscal right. It is not a question of the authority of the power of a State to make some general law governing the rights and duties of those who enter into some description of transaction, such as the sale of goods, and of the Commonwealth in its executive arm choosing to enter into a transaction of that description. It is not a question of the exercise of some specific grant of power which according to the very meaning of the terms in which it is defined embraces the subject matter itself: for it is not the plan of the Constitution to grant specific powers.....It is, I think, a question which cannot be regarded as simply governed by the applicability of the principles upon which Melbourne Corporation.

And that, your Honour the Chief Justice, is the point where he departs from that proposition in the earlier case that your Honour referred to:

In truth it imports a principle which if true would apply generally with respect to the legal rights of the Commonwealth in relation to its subjects.

In that case, Sir Frank Kitto at 381, Sir Douglas Menzies at 389 and Justices Windeyer and Owen at 390 agreed with his Honour.  There is a passage in Victoria v the Commonwealth 122 CLR 353 at 373, and may I also refer your Honours to Australian Postal Commission v Dao (1985) 1 NSWLR 565 and to the judgment of Justice McHugh, Judge of A
ppeal as he then was, at page 593 to 599.  His Honour there has performed an analysis of the cases and not unlike that which I have sought to do, but his Honour does it in a much more incisive way and we adopt what his Honour has said in those passages.  There is one passage I would like to refer to, it is on page 595, because this just points up what has to happen if the Commonwealth does not want to be bound by State laws.  People say it has always got section 109, can use it, and his Honour points this out at B on page 595:

In Victoria v The Commonwealth Barwick CJ and Walsh J expressed the view that the States have no power to bind the Commonwealth. Barwick CJ said that this was because the Crown in right of the Commonwealth does not submit itself to the legislatures of the States. I would prefer to say, however, that the immunity of the Commonwealth from State legislation rests on the ground that the States have no power under the Constitution to bind the Commonwealth with respect to a right, power or duty, authorised by a Commonwealth legislative or executive power. Every valid activity of the Commonwealth is carried out pursuant to a power expressly or impliedly granted by the Constitution itself. Nothing in the Constitution indicates that the activities of the Commonwealth are subject to State power. The nature of Australian federalism in my opinion indicates the contrary.

GUMMOW J:   Well, in so far as the Cigamatic principle is concerned with binding the Commonwealth executive, I do not myself see how it is an answer to refer to section 109.  The executive may not be in a position to procure legislation through both Houses of Parliament.

MR ELLICOTT:   No, your Honour, that is true, but it has been suggested that ‑ ‑ ‑

GUMMOW J:   It is often repeated, but I just cannot see how it necessarily follows.  It is not necessarily an answer, it seems to me.

MR ELLICOTT:   No, but I am not suggesting it is an answer; all I am saying is that if it is supposed to be the answer then what an inconvenient one it is because it means that the Commonwealth is supposed to ferret its way through all the State laws and decide those subject to which it is not going to be, and pass a law to that extent.  But the inconvenience of there being a provision of one State or perhaps of two States but not of other States which bind the Commonwealth in relation to particular relationships which are supposed to be uniform, one would hope, throughout the Commonwealth is obvious.  In other words, if there is a Residential Tenancies Act in New South Wales and Victoria but none in the rest of Australia which govern the rights of tenants dealing with the Commonwealth in relation to Defence housing, then what a pot‑pourri of rights and obligations there would be, what inconvenience there would be, what misunderstanding on the part of members of the Defence Forces, that in New South Wales you are subject to some rent control and in Western Australia maybe you are not.  In other words, that is a practical result of not applying this principle.

KIRBY J:   You make it sound so burdensome but the other burdens can also be great and the confusion large that you are then forced in respect of some residential tenancies to the special tribunal and in other ones you have to go up to the general courts.

MR ELLICOTT:   Yes.

KIRBY J:   I mean, there is inconvenience either way.  It is a matter of working out how the polity is expected to work.

MR ELLICOTT:   Not, we would submit, if the Commonwealth is not bound.  In other words the same rights would apply and the same remedies would apply.

KIRBY J:   Well, it goes into business. It has its body. Its body is told to act in a commercial way. It goes into residential tenancy arrangements. It uses the same lease but it is, you say, just too inconvenient to submit it to the general law. If the Constitution requires that, well, so be it, but I do not think the appeal to the burdens on the other side should overlook the burdens on the side of your argument.

MR ELLICOTT:   Your Honour, I have not made it clear, I am sorry.  What I meant by that inconvenience, and it would have been made much clearer had I located earlier the passage from Justice McHugh which I wanted to refer to.  It is at page 598 and 599.

McHUGH J:   Page 598.

MR ELLICOTT:   His Honour said at F:

A constitutional doctrine which has the support of Chief Justice Dixon, Justices Fullagar, Webb, Kitto, Taylor, Menzies, Windeyer, Walsh and Barwick, not to mention the dissenting judgments of Justices Isaacs and Rich in Pirrie v McFarlane is not likely to be erroneous.

That pays them great attention:

Although the decision in The Commonwealth v Cigamatic Pty Ltd (In Liq) appears to have more critics than supporters -

there are certainly more here today, critics than supporters, if that is accurate -

it is, in my opinion, the doctrine which best serves the needs of Australian federalism.  If it was overturned, the difficulties which would face the Commonwealth Parliament in determining what State statutes should or should not apply to the Commonwealth would be enormous.  Even if a list of State statutes which were to apply to the Commonwealth was enacted, it would soon be out of date.  State legislation would require continual monitoring.  On the other hand, the blanket exclusion of State laws might result in the exclusion of laws which the Commonwealth and its citizens might in particular situations find useful and appropriate.  The doctrine, expounded by Chief Justice Dixon and Justice Fullagar, when coupled with the Judiciary Act.....enables the courts to proceed on a case by case basis.  This provides for flexibility in the application of State law without any real loss of that certainty which is an essential attribute of the administration of justice. 

Your Honour Justice Kirby, that is the inconvenience that I was referring to, and I would submit that that is a powerful reason for supporting the common sense, as it were, of the Cigamatic principle. 

Your Honours, unless there is anything else, those are our submissions.  There is a question as to whether section 64 - assuming we only succeeded in relation to the Cigamatic proposition - can remedy the situation. It is our submission - and we have dealt with this - that that can only assist if the Tenancy Tribunal is a court within the meaning of section 64 of the Judiciary Act and we submit it is abundantly clear that it is not a court and that section 64 cannot apply to it and that section 64 cannot apply to proceedings other than in courts.  Now, I understand that a submission may be put to the contrary but I will have to deal with that in reply.  If the Court pleases.

BRENNAN CJ:   Yes, thank you, Mr Ellicott.  Mr Solicitor for the Commonwealth.

MR GRIFFITH:   If the Court pleases.  Well, of course, the prosecutor is a corporation and separately represented here, so I make submissions for the Attorney-General.  However, I could indicate to your Honours that ‑ ‑ ‑

GAUDRON J:   It does not do the prosecutor’s case a lot of good for the Commonwealth to be separately represented, I must say, in this sense that it does draw the distinction between the identity of the prosecutor and the Commonwealth, a distinction which it wishes to elide at every point.

MR GRIFFITH:   Yes, could I make my position clear on that.  Accepting the force of your Honour’s observation, it is the re-agitation of Cigamatic which has attracted the Attorney’s attention and it was thought there was also an issue of re-agitating Evans Deakin in section 64, a matter not touched upon in the judgment of your Honours in the State Superannuation Case and I could assure your Honours that absent those two issues, then the Attorney would not have seen it appropriate to intervene.  But, your Honour, now we are here it is necessary to be drawn into the complete argument to some ‑ ‑ ‑

McHUGH J:   But in any event, you are intervening on behalf of the Attorney, are you not, not of the Commonwealth?

MR GRIFFITH:   Yes, exactly, your Honour, exactly.  Well, Attorney General of the Commonwealth, indeed, your Honour, I should say. Now, your Honours, however, in an aspect of amiable co‑operation, your Honour, between the prosecutor and the Attorney-General of the Commonwealth, the original written submissions as filed are joint submissions, and your Honours would be aware that there were short supplemental submissions which were filed, but three pages, dealing with particularly the consequences of the State Authority Superannuation Board Case and the Allders’ Case and the main addition is in paragraph 4.10 under the section 52 argument, there is the addition of paragraphs 4.10A to 4.10F, picking up the approach of your Honours in the Allders’ judgment to indicate the test of exclusivity under section 52 being far stronger, of course, than the inconsistency test under section 51.

So, your Honours, I would hope would have those additional parts, and there also is an addition to paragraph 5.32, dealing with what your Honour Justice McHugh and Justice Gummow said in the State Authorities Case, with respect to indivisibility of the Crown, so if those submissions could all be read together.

Your Honour, there is also a supplementary volume of materials dated 25 November 1996.  Your Honours are now aware that we, by and large, for identification purposes, use the colour green but, unfortunately, in this case there seems to be quite a few green volumes and I might have to identify them both by the title on them and their thickness, but the volume dated 25 November 1996 is again a joint submission and, your Honours, if I could explain that your Honour the Chief Justice’s restrictions as to time to be allocated by agreement between the parties in default by order of your Honour the Chief Justice has meant that we have sought to reproduce as much material as possible in the written form so as we will not run into any time problems, indeed, possibly finish in less time.

GAUDRON J:   Can you give a short indication within minutes of what is relevant in it, though?

MR GRIFFITH:   Yes, indeed, your Honour.

GAUDRON J:   Because I find that the Commonwealth’s materials are getting, not so much in this case but in other cases, more and more voluminous and one spends a very great deal of time after the case is reserved picking through it to find some gem of relevance, often without much luck.

MR GRIFFITH:   Your Honour, could I say that, first, I regret that your Honour has that experience, but we have two functions, your Honour.  Firstly, we seek in our written submissions, your Honour, to say succinctly exactly what our points are and, your Honour, sometimes rather than to, in our written submissions, go on a digression which might take several pages from the succinct points, we do provide a proposition which refers to a summary of materials which, in the case of this volume, appear under tab 1 in merely three pages, pages 3, 4 and 5.  Your Honours, we do fully footnote that summary, but we thought, your Honour, and perhaps we are mistaken in this, for the assistance ‑ ‑ ‑

GAUDRON J:   What relevance, for example, is it to the legal and constitutional principles involved in this case that 60 per cent of housing stock was found to be substandard?

MR GRIFFITH:   Your Honour has made the point as to whether or not this corporation could be regarded as an emanation of the Crown. Now, your Honour, the function of this summary is to indicate how directly the functions of this body carry out a Crown function. There is also a relevance, your Honour, with respect to the issue of whether or not a separate corporate body may be regarded as being within the ambit of exclusivity under section 52(ii). It is our submission that this material, your Honour, is relevant to the point of view of characterisation as whether or not this is a matter concerning the department. Our submission is, your Honour, notwithstanding the fact that it is a separate corporate body, by reason of these matters which we summarise in these three pages, it can be fairly said that this statutory corporation is directly concerned with matters concerning a department and, in that way, it comes within section 52(ii).

It is our understanding if we do not establish that connection then the argument on section 52(ii) will fall to the ground. It seemed to us that that was a matter to be established by reference to both the legal structure and, also, to the underlying factual circumstances and, for that reason, we have made our propositions in three pages - 3 to 5 of this volume - and, your Honours, we thought it would assist the Court to give it extracts of the footnote and material. But if the Court indicates that that is not of assistance because of its volume, your Honour, we will just rely on the three pages.

GAUDRON J:   I think I speak for myself in these matters, Mr Solicitor.

GUMMOW J:   We are all enriched by having no less than 20 pages of Professor Zines’ latest writing.

MR GRIFFITH:   The reason for that, your Honour, is that it is recently published.

GUMMOW J:   Yes, I know.

McHUGH J:   1997, it bears the date.

MR GRIFFITH:   Perhaps after this judgment your Honour will have to have an edition 4A.  But the reason for that, your Honour, is that we wish to indicate to the Court without taking you to this material, that by and large we agree with Professor Zines’ analysis up to the last paragraph where he says that Pirrie v McFarlane is right, Uther’s Case is right and all the rest is wrong.  I wanted as a matter of succinct argument to say there, as Justice McHugh traced through the course of argument, that the point where we say - perhaps it is the decisive point if one follows Zines up to that point ‑ to say how then can you depart from that when you then immediately come into these points which have just been engaged in discussion between Justice McHugh and Mr Ellicott and Justice Kirby with respect to the consequences of the reverse.

Your Honours, I do not intend to set homework for the Court, but the intention in preparing these materials is to make the Commonwealth’s position clear so that it does not require iteration before the Court.  On this question of the materials of whether or not this body is a corporation or not, firstly the Attorney’s position is that is a matter for the prosecutor.  Secondly, the Attorney’s position is that is a matter which has been spelt out specifically in the materials as they have been filed.  The exchange between my learned friend and the Court on that issue with respect to the matter of corporate status is something which we say nonetheless is to be settled either in my learned friend’s submissions or his reply.  But we do refer the Court to assist it to the decision of Inglis v The Commonwealth Trading Bank of Australia (1969) 119 CLR 334.

GUMMOW J:   Yes, but that may have this about it, may it not?  May it not be that this corporation is the Commonwealth for the purposes of section 75(iii), may it nevertheless be that it is not the Commonwealth for the purposes of the Cigamatic doctrine?

MR GRIFFITH:   Your Honour, that may be the case, but our basic position is that is not the issue on which we intervene.  If that is the case, Cigamatic falls to the ground as an issue in this case and remains, we say, as it is at the moment, authority of this Court of age of some 32 years or 34 years.  So we would accept that, your Honour, if that is the case.  We do not wish to detain the Court to putting a supplemental argument on that. 

Your Honours, at the risk of then incurring Justice Gaudron’s censure, but I hope not, your Honour, could I indicate we did, intending to assist, file another volume of materials with the Court this morning which has as its first four pages what was, we thought, a useful answer to the case which has been put against us on the question of section 52(ii) by New South Wales and we do in detail in that volume, and it may assist the Court because it seems it is difficult for the Court to be given thick volumes on these issues, we have those pages of submission which are merely four pages, if I can give to the Court copies of those loosely and ask the Court to just attach them to the first volume of joint written submissions, which indicate our detailed answers on this transitory point. It is found in that last volume the Court just has.

Your Honours, what we there do is seek succinctly to address by reference to what my learned friend the Solicitor‑General and Mr Katz made in their submissions on the transitory provision point, in effect, to answer the conclusion made by Justice Kirby in the Dao Case on that point and as part of that argument, your Honours, we must refer to the convention debates for the legislative history of section 52 and also to the gazettes whereby one sees that these departments were, firstly, the Department of Defence was gazetted on the first day of the Commonwealth and, secondly, that with effect from 1 March before Parliament first sat the Department of Defence was transferred to the Commonwealth and the point we wish to make from that is that if section 52(ii) is regarded as mere transitory, it would not have had anything to do because there was nothing to transit and, your Honour, we support that by reference to the extracts from the relevant convention debates which merely support that by their terms of the text of the provision and from the gazettes which are attached to that supplemental volume. Perhaps this is a convenient time.

BRENNAN CJ:   Yes, thank you, Mr Solicitor.  The Court will adjourn until 2.15.

AT 12.48 PM LUNCHEON ADJOURNMENT

UPON RESUMING AT 2.18 PM:

BRENNAN CJ:   Yes, Mr Solicitor.

MR GRIFFITH:   Your Honours, before lunch, we gave the Court the loose parts which are bound in the last volume filed today of our submissions being our response on the transitory provision argument made by my learned friends, Mr Mason and Mr Katz.  If I could then, your Honours, just make one other point on this transitionary argument, and that is, we submit that the purpose of transferring the State departments, including Defence, was to give the Commonwealth control of those departments and, in so doing, take control away from the States.

We say that is exactly what section 52(ii) does and we say it is entirely consistent with its natural reading and, of course, when one has regard to it, section 52(ii) is sandwiched between two other sections which plainly do just that so far as giving exclusive power to the Commonwealth is concerned.

KIRBY J:   It is a very odd place to put a transitional provision, if that is what it is.  It may be what the language requires, but it is a very odd place.

MR GRIFFITH:   Your Honour said that in Dao at page 575 and we would submit your Honour was right then and your Honour is right in this Court to put that proposition to me also.

KIRBY J:   The only question is whether the phrase is an adjectival clause or whether it is part of the grant of power, controls the grant.

MR GRIFFITH:   Well, your Honours, we do rely specifically on our written submissions.  We say it answers that question only one way, but perhaps my learned friend has something extra to add that we might refer to in reply.

McHUGH J:   Mr Solicitor, in paragraph 4.8 of your written submissions you said that:

Defence housing.....is a “matter relating to” a department -

MR GRIFFITH:   Yes, your Honour, I was coming to that next.

McHUGH J:   Are you coming to it?  Well, as you come to it, what is your explanation for the fact that in Pirrie v McFarlane the Commonwealth did not rely on that, because surely driving an army vehicle on a State road would be a “matter relating to” a department.

MR GRIFFITH:   My first explanation is, your Honour, I was not there; my second explanation ‑ ‑ ‑

McHUGH J:   You probably were not even born; you were not.

MR GRIFFITH:   Although I did know Sir John Latham, your Honour, but getting back, and indeed - well your Honour, I better not reminisce, but our second explanation, your Honour, is we wish to say - I hope my time does not run out, but I am going to say it one way or another before this case is over - that Pirrie v McFarlane is wrong and we would like also to add that our submission is simplicity overruled by Allders.  And we have something else to say.  We say what your Honour said about Pirrie v McFarlane, your Honour was very polite in Dao, and we would invite your Honours to be not so polite now you are sitting on the High Court.  Everything your Honour said there was right, but it can be put more straightforwardly if one is not worrying about authority.

Your Honours, I would like to also refer briefly to the argument about inconvenience, if one construes section 52(ii) as having a continuous operation, so far as exclusiveness is concerned compared with the operation of the defence power under section 51. We say the meaning of section 52 is not to be determined by what is a convenient result; we had enough of that when considering the issue of Commonwealth places under section 52(i), and of course any argued inconvenience was quickly, and in the same year, dealt with after the Worthing v Rowell decision by the Commonwealth Places (Application of Laws) Act, which might not be the plainest form of legislation, but certainly had the effect of dealing with what was a very complicated problem, and this is exactly the same point made by your Honours Justice McHugh, Justice Gummow and Justice Kirby at page 46 of the transcript of the Allders’ judgment point 4, and I will not read that because it is no doubt very fresh in at least the mind of the three of your Honours. But, we say, your Honour, that whatever the balance of convenience, the meaning of section 52(ii) must be given its plain meaning, as section 52(i), and then we can work out the inconvenience later, and there is no difficulty about that.

KIRBY J:   Subject to the point Justice McHugh has raised, is that enough for the prosecutor to succeed?

MR GRIFFITH: On this point - no, your Honour; we have to keep going, we have to say that for section 52(ii) to apply, firstly it is not transitory. If it is, on that we are gone.

KIRBY J:   Yes.

MR GRIFFITH: We next say it does not matter whether it is a department or not; so we try to avoid the first step. Your Honour Justice Gaudron’s question, in effect, is whether it is. We say whether it is or not, section 52(ii) still applies. In any event we say it is a department, and mainly, we say that for the reason that your Honour referred to in Dao at page 576 with respect ‑ ‑ ‑

GAUDRON J:   Why really does it relate to the department when what is concerned is the lease between the authority and the lessors and not the sublease between the Commonwealth and the defence personnel?  I can well see why a law impacting on the sublease might come within it.  The law impacting on the terms and conditions of the sublease, but what we are talking about is the head lease.

MR GRIFFITH:   Your Honour, the head lease is made for the purpose of the sublease for the next sublease.  That is the whole function.

GAUDRON J:   It may be that is why it is made - the purpose of it - but how does the operation of the law on the head lease become a law relating to the department?

MR GRIFFITH:   Your Honour, we say the law operates on a head lease which is held by the corporation and that is carrying out, we say, matters relating to the Department of Defence.  We establish that, your Honour, by reference to that unfortunately thick volume of materials your Honour may have referred to before lunch.  What we say is that, firstly, we pick up, as I refer to by our supplemental ‑ ‑ ‑

GAUDRON J:   But the sublease, as I understand it, is between the Commonwealth and the Defence.

MR GRIFFITH:   There are two subleases, your Honour; there is a lease to the corporation - there is a sublease corporation to the Commonwealth, and Commonwealth to the Defence personnel, and this is intended - the corporation’s function is to provide housing for that very purpose, so every Defence personnel will have adequate standard of housing in the course of the discharge of their duties.  Also, your Honour, we say that the material we summarised in the three pages ‑ ‑ ‑

GAUDRON J:   That is a function that could, of course, be done, as the Chief Justice pointed out, by the Department of Administrative Services.  It could be done by anyone.

MR GRIFFITH:   It used to be done by Defence, your Honour, and it did not work properly, so it has been - the same function is now carried out through this corporate structure to better effect, we say, the Defence purpose; namely, to provide housing for employees.

GAUDRON J:   Were the function carried out by the Department of Administrative Services - the head lease function - could it be said that the State law was a law on a matter relating to the Department of Defence?

MR GRIFFITH:   Your Honour, we say it would make absolutely no difference but, in fact, it is not being carried out by Administrative Services, it is being carried out by this emanation which is controlled by the Minister of Defence ‑ ‑ ‑

GAUDRON J:   Or which is not controlled, as the case may be.

MR GRIFFITH:   Defence, Science and Personnel, who also is sworn in as the Minister of Defence.  There are two Ministers of Defence.

GAUDRON J:   This is the Minister of Defence, Science and Personnel?

MR GRIFFITH:   Your Honour, there are two Ministers, but they are both sworn in to the entire department, but there is one particular Minister who has the primary charge, but each Minister can act completely, so it can be regarded as the Minister of Defence for the purpose of argument.

GAUDRON J:   So either Minister can, within the limits which the Act allows, direct the Authority?

MR GRIFFITH:   That would be my understanding, your Honour, but it is expected that the junior Minister would be the one who would do it under the direction of the senior Minister, or in co‑operation with.

GAUDRON J:   They are not separate departments?

MR GRIFFITH:   No, they are not, your Honour.  Although there is more than one Minister, regarded as senior and junior in some ministries, there is only one department and each Minister is sworn in for the entire department, not a part of.  There are not sub‑departments and not separate departments.

GUMMOW J:   This follows from a particular view of section 64, does it, about parallelity of Ministers of State within one department?

MR GRIFFITH:   Yes, a particular and one hopes, correct view, yes, your Honour.  It seems clear from the words of the section, yes, your Honour.  Your Honour, it is known there is more than one Minister in some departments and that is how it works.  They are sworn in for the entire department.  There are not mini or pretend departments invented for the purpose.  Justice Gaudron, I hope I sufficiently answered your question by saying our submissions make no difference, but, in fact, it does not arise, there is a matter of difference?

GAUDRON J:   I understand your argument that the Authority is the department.  I have difficulty in seeing how the application of the Act to the head lease is a matter relating to the department if the Authority is not the department.

MR GRIFFITH:   Your Honour, may I say quickly how we put it, and, unfortunately, because of time constraints, I might not be able to say much more unless I be permitted another writing, your Honour.  How we put it is firstly we pick up the inverse characterisation test which we have noted was decided by this Court in Allders and we deal with this in our supplemental submissions, paragraphs 4.10A to 4.10F, which I referred to shortly before lunch, as a convenient means of determining whether State law impermissibly trespasses in the exclusive area of operation of Commonwealth power under section 52.

We say that, quite apart from whether or not the Authority is a department, if one applies the test of Allders, the State Act here is an Act which on its prescribed terms could affect the Authority as it enters into leases with the Department of Defence for the purpose of providing accommodation to meet the department’s operational needs because it confers power on a tribunal to make orders to ensure compliance with terms and to impose further obligations in addition to the prescribed terms of the State Act in connection with these leases.  We say that is sufficient to say that there is a real and substantial connection with the subject matter of section 52, namely matters relating to the Department of Defence.

We say that this conclusion is reinforced by the fact that the whole function, the raison d’etre of the Authority, is to provide accommodation needs for members of the Defence Forces and members of the Department of Defence.  The Department of Defence has a special need to maintain a mobile Defence Force and supporting personnel and this carries with it a corresponding need to ensure that accommodation is available for those personnel.  This is particularly so as the materials show which we have filed where there are postings in remote areas and where accommodation is scarce.

Related to this is the fact that provision of accommodation is regarded as a condition of service, so the relationship between the provision of accommodation for Defence personnel and other employees and the effective administration of the department has been emphasised by not only the second reading speech, which we extract in page 14 of our materials, but also by the entirety of this volume of materials which I will not take the Court to other than to say that we have summarised under tab 3 in three pages the thrust of this material which we say highlights and identifies the fact that the State Act does trespass into this subject matter, namely the provision of an adequate standing of housing for those who serve within the Defence Department and who are entitled as a condition of service to have that adequate standard of housing provided.  I hope that is sufficient outline, subject to being filled in by the materials, to say how we say there is the necessary connection, your Honour Justice Gaudron.  I could say more but I do not have time to.

Your Honours, then we say, in any event, our submission is the Authority is to be regarded as a department for the purpose of section 52(ii), and if I could indicate that - well, your Honour, I always found Dao an unsatisfactory case to plead, but it is the case, in our submissions, we do say that both your Honour Justice Kirby’s observations on this point at page 576 which are extracted in our materials at paragraphs 4.4 and 4.5 on pages 16 and 17 of our first written submission, are correct to refer to the issue of whether or not it may be appropriate to regard a modern emanation of the department which is incorporated as nonetheless constituting the department for the purpose of section 52.

DAWSON J:   How do you say that the effect of section 52(ii) is to exclude all State laws including those of general application?

MR GRIFFITH:   Because, your Honour, we say that it is just as much as under section 52(i).

DAWSON J:   Is a very different thing. Section 52(i) refers to a place, and one can understand, or I can, the exclusion of all laws. I mean, I can never understand how the Constitution Acts do not apply to Commonwealth places because it is still a part of Victoria, but put that on one side. You are talking about a place there. This is not talking places. You are talking about matters relating to something.

MR GRIFFITH: Yes. Your Honour, what we say is that, just as for Commonwealth places, it is an exclusion, so there may be a gap which can be filled up by the Commonwealth Places Act, so, too, in respect of matters pertaining to a department, your Honour. If there is any issue of application of State laws, that also can be done by Commonwealth laws.

DAWSON J:   But there may be matters which affect a department.  Laws of general application may relate to something which is not the department, but the department has to be bound.  You have got to define there some area of exclusivity.

MR GRIFFITH:   Your Honour, we certainly define it to include something such as a State law which proscribes standards with respect to leases, provisions which may deal with the right of access, right to possession might cut across the rights otherwise that could be contracted for by the Authority under the terms of its powers and functions under its Act.

DAWSON J:   Why is that a matter relating to the department?

MR GRIFFITH:   Your Honour, because it relates to the capacity of the department to provide leased housing for its employees to discharge its requirements for its employees.

DAWSON J:   So you read the word “relating” as the equivalent of “effecting”?

MR GRIFFITH:   Your Honour, for some purpose it may be, but perhaps not necessarily coterminous for all purposes.  Your Honour, perhaps my answer to this is related to the other issue which was, I think, taken up ‑ ‑ ‑

DAWSON J:   It is just that I do not think section 52(i) is helpful in construing section 52(ii). Places are one thing, matters relating to something are another.

MR GRIFFITH:   Your Honour, I am happy to stay in 52(ii) and make my points on that, although I have already made those of the fact that there are three exclusive powers we say that are all exclusive, but your Honour’s question is at the next level, “Well, what is it that’s exclusive?”  On that basis, your Honour, it is a matter of saying, well, it is necessary to identify the essence of what it is that is referred to, your Honour.

KIRBY J:   You have to have a concept of section 52, which is for the seat of government for Commonwealth places and for the departments, the public service. These are matters which the Constitution has said is exclusively kept to the Commonwealth.

MR GRIFFITH:   Yes, your Honour.  We kept that.  Might we say that is different from defence, itself, but what we say is that a law dealing with matters of employment - and here we are dealing with the provision of housing, not just for the purpose of defence, but where there is an entitlement as a term of employment to housing of an adequate standard under circumstances of difficulty, that in that case, whatever might be the limit - we accept, of course, there are limits - that this is within four square to say......  If it were not for the connection with Defence Housing for employees of the Department of Defence, then one might be in the area of a number of uncertainty or even outside of it.  Our submission is this goes to the heart of that which it is stated to be exclusive, namely, the term of employment.  It is just as much a term as would be an entitlement to a motor vehicle or perhaps even a term as to superannuation and how superannuation moneys were to be invested - something of that sort.

McHUGH J: Have you any explanation as to why section 52(ii) only deals with departments of the public service that are transferred, and not to Commonwealth public service departments.

MR GRIFFITH: Your Honour, I did, but I was intending not to enlarge on that too long because I was worried about the time factor. Possibly, if I could be permitted to put those points together tomorrow. Our basic answer is that those who drew the Constitution chose by section 69 to specifically identify some departments which were regarded as essential ones for transfer, and we have the effect of customs excise was transferred on Federation, itself. The other departments, your Honour, on the very day of Federation, provision was made for the creation of the federal Department of Defence - we will just confine ourselves to Defence and post office - and within a matter of days, I think 14 August - the gazette is in the volume of materials - shortly after the death of Queen Victoria who barely survived the whole process, your Honours, there is provision made for gazettal of the transfer which took effect, I think, on 1 March, before the Commonwealth Parliament first sat.

So that there was a clear identification of matters of national control, and I think your Honour Justice Kirby also referred to this in your judgment in Dao, they are the essential departments in the minds, obviously, of those who were drawing the Constitution and ones which they made mandatory and quick provision in the Constitution for transfer, also with the provisions, of course, dealing with the transfer of staff and dealing with a transfer of property, and which were transferred before there would be any opportunity for the federal Parliament to, indeed, exercise any legislative function with respect to those aspects of transfer. They were physically transferred before Parliament first met.

GUMMOW J: But does not section 52(ii) suggest that with respect to other departments created under section 64 the power of the Parliament of the Commonwealth is not exclusive.

MR GRIFFITH:   Your Honour, it could well be that that is the case because then one comes back with the question such as discussed, we say unsatisfactorily in Carter’s Case, by the Chief Justice as to whether or not when one exercised plenary powers under section 51, one has sufficient power with respect of those departments.  Your Honour, the difference, and that is illustrated by the Allders’ judgment, is that one can just apply conventional constitutional law with respect to inconsistency with respect to those departments as any power exercised under section 51; but, with section 52, there is a specific scheme. It might be that things would have worked well enough without that, just as for Commonwealth places it may well have worked well enough without section 52(i), but there it is. We say that it must be given effect according to its terms, and if one gets to a position where one says it is unsatisfactory, for example, for the landlords, as in this case in New South Wales, not to know where their position is, we submit that that is no answer to the Constitution taking effect, just as it was in Worthing’s Case. 

In any event, we would submit that it would seem when one just applies conventional law including the Constitution and Judiciary Act, the position as it now exists is quite satisfactory for landlords as in the position of the Hendersons. They have a lease which they evented, or which the transferee - they bought the property from the original lessor - regarded as quite satisfactory as a commercial lease to rent that property, presumably at a commercial rate, and that lease is, if nothing else, a contract. In the event that there is a dispute with respect to that, section 56 would make the Commonwealth liable in contract; the Defence Housing Authority might be sued in contract in any State court. If it is an emanation to Commonwealth it could be sued in this Court. When one said, “What law is to apply?”, one would say you would pick up from sections 79, 80, 64, the relevant law to apply.

If there was an issue as to whether or not section 64 picked up the New South Wales Act, that would only be an issue of whether it was picked up by operation of Commonwealth law, not an issue of whether it was picked up by operation of the State law itself by its specific terms, and that would be an issue to be determined.  Now, it may be that certainly Mr Ellicott would argue that it would not be picked up.  Others might argue that it would.  But that would be really not a constitutional issue, but a consideration of the operation of section 64; the matter, of course, of which the Attorney is willing and anxious to engage the attention of this Court because of the difficulties as to the continued operation of that section.

In our submission, your Honour, it will not be a situation that landlords do not know where they stand. They have got a contract, and they have a right to sue the Commonwealth in contract, and the law will be applied according to the Constitution and the Judiciary Act to that contract, without any occasion to say there is a situation of operative uncertainty because it is alleged that the State Act does not apply according to its terms, it will only apply if it is picked up by operation of Commonwealth law under section 79, section 80, and section 64. So, that is our answer on that point.

We say that there is no problem about it and, indeed, that is the conventional and correct operation of the Constitution and the Judiciary Act with respect to the issue of contractual or tortious liability of the Commonwealth.  So, if these people want a key - want a right of access, they have the terms of their lease, they can take proceedings to get it.  But what they say is that they are entitled not to go to a court - and, after all, the Commonwealth cannot vest judicial power in this tribunal; it is not a court - but what they say, they are entitled, assuming the Authority is the court, to go to the court to the exclusion - there is an exclusionary provision with respect to much of the jurisdiction of the tribunal from other courts of the State.  You must go to the tribunal. 

I do not think it is asserted by anyone here it is a court and, in the exercise of a matter concerning a Commonwealth body, a matter which, on its face, would seem to require the exercise of judicial power - the picking up of sections 56, 79, 80, 64 of the like in a court - the argument of the protagonists against that is to say, “You must go to a tribunal which is not a court and you apply a State law which is express by its own terms to cut across the terms of the agreement which you have by agreement made with the Commonwealth which entitles you to extra things such as a key, a right of inspection and, of course, if you sell the property, it entitles you to a right to claim possession notwithstanding the terms of the lease.”

KIRBY J:   You sound horrified by this, but you have entered into a contract and this is what you would have to do if you were a citizen, or at least Mr Ellicott’s client has entered into a contract.

MR GRIFFITH:   The Authority ended it because it was not a citizen, your Honour, so it is horrified to be told that the position is quite separate.  It has got a house for the CO in Darwin and it is told that the Henderson’s are entitled to a front door key, walk in anytime, and see the secret communications room that might have defence secrets there.  Now, your Honour, the Authority is entitled to say, “That cuts across the terms of our lease.”

GAUDRON J:   They are allowed to take it home, are they?

MR GRIFFITH:   Your Honours, I was not intending to speak with passion, but merely to keep moving because I have only got another half an hour, unfortunately, unless I can persuade the Chief Justice that the indications are from my learned friends that they expect not to take their full allotted time, so, if I could reduce the passion and continue the content, your Honours.  We do submit that there are real answers to the conundrums which were thrown up in the questioning this morning saying, “Well, if this is right, there’s a complete gap.”  There is nothing of the sort.  The Henderson’s got exactly what they contracted for when they bought the property and took an assignment of this lease.  They bought the property subject to these terms.  I am sorry, I sound like I am passionate again, but that is exactly what they bought, then they ask for something more, a key, and not from a court construing the terms of the lease exercising federal jurisdiction, but from something that is not a court, that cannot exercise federal jurisdiction, but it is alleged combined an emanation of the Commonwealth.  I assume, for my purposes that it is an emanation of the Commonwealth. 

BRENNAN CJ:   Mr Solicitor, could I just ask you one further question in relation to 52(ii) before you leave it.

MR GRIFFITH:   I was not leaving it yet, your Honour.

BRENNAN CJ:   You were not leaving it?  Well, then, I will not be interrupting you as badly as it might have been.  The Residential Tenancies Act would not be characterised as a law with respect to matters relating to a department of the public service, would it?

MR GRIFFITH:   Or, your Honour, any department of the public service.  We would say - the Residential Tenancies Act ‑ ‑ ‑

BRENNAN CJ:   As a matter of characterisation of the law?

MR GRIFFITH:   The law itself - it is not as a law itself, no, your Honour, it is non‑discriminatory.

BRENNAN CJ:   Why are we concerned with the question of the reciprocity of the power and denial of power?

MR GRIFFITH:   Your Honour, the State may pass a non‑discriminatory Act.  If it were perfectly valid and effective according to its terms, then unless for some reason it does something which is for this purpose unconstitutional.  If it imposed an excise, your Honour, it would be of no effect.  If it imposes a legal obligation on a matter which is a matter relating to the Department of Defence, it equally is invalid.  It is not a question of ‑ ‑ ‑

BRENNAN CJ:   Well, I hear you say so.  It is just that there seems to me to be a logical leap there.  You are translating the concepts which were expressed with respect to 52(i) which focussed not upon the characterisation of a law, but with respect to operations within a particular place to 52(ii), and if you want to pick up from the 52(i) cases this concept of reciprocity do you not have to pick it up in terms of characterisation for the purposes of 52(ii)?

MR GRIFFITH:   Your Honour, we would say firstly, no, but perhaps one has a chain through the - inasmuch as the State Act deliberately purports to bind the Commonwealth - it is not just non‑discriminatory, your Honour, it comes into the Commonwealth - we say it must do it subject to the exclusions of section 52.  It cannot come into a Commonwealth place.

BRENNAN CJ:   It only purports to do so so long as it may?

MR GRIFFITH:   Yes.  That is an interesting question your Honour asked, but what we submit is that the exclusion must be regarded as one which prevents State laws operating so that they are operating what may be said to be a matter relating to any department.  If they do that, your Honour, we say they trespass into the area of exclusivity just as much as did, say, the Stamps Act with respect to section 52(i) area exclusivity.

BRENNAN CJ:   Well, that is your answer?

MR GRIFFITH:   That is my answer, yes.  I am indebted to your Honour pointing out that connection which hitherto has been ignored by argument, but we say that that must be the only way to give content to section 52 prohibition, otherwise one would only be talking about State laws which seem directed at three or four departments which were formerly departments of State, and that would seem to be absurd that you would have any such law of that sort, your Honour.  The State would not pass such a law and it would seem ‑ ‑ ‑

BRENNAN CJ:   Well, it may not now; it may have in 1901.

MR GRIFFITH: Your Honour, of course Garran expresses a view that a State could not have passed a law from 1 January till 14 February 1901 because of the operation of this provision. We are not quite sure whether that is right or wrong but, whether it is right or wrong, we would submit that after 14 February when the gazettal was made, or certainly after 1 March when it came into effect, then the prohibition would attach. So that a State just could not pass such a law after that date directed at a department. That is the prohibition, your Honour. It would seem an absurd thing to have in section 52(ii), given that one has section 69 and sections 84 and 85 dealing with these elements of transfer of the department - why have a provision such as 52(ii) if it only has such a limited effect to State Acts after Federation which apply specifically to departments which are completely transferred?

BRENNAN CJ:   It is not necessary to engage in hypotheses about this, but one thought might well be the entitlement of X State public servants to benefits.

MR GRIFFITH: Yes, your Honour, although the Constitution does protect them. Indeed, that is coming up now on the transfer of the quarantine service. There is a constitutional provision dealing with that. Another provision to preserve the position would seem to be otiose and indeed confusing, we would submit.

Your Honours, I did start to say it but I did not quite finish it, but may I deal quickly with why we say that the Authority may be regarded as a department.  I refer to the fact that we accepted your Honour Justice Kirby’s observations at page 576 in Dao which are on pages 16 to 17 of our written submissions. We say that the power to incorporate is implicit in a power to regulate, such as that contained in section 52(ii). If a limb of department may be incorporated, it would seem to follow that the concept of a department under section 52(ii) can embrace statutory corporations. In Allders this Court said that section 52 must be construed with the same generality as any other legislative power, and we take it the reference was to section 52(ii) as a whole. We say the noun “department” is not something to be narrowly construed as indicating what is traditionally regarded as a department of State created merely by executive order or by proclamation.

KIRBY J:   Is there any other consideration of this issue apart from Dao?  It was mentioned in Peters, I think, but is there any other decision or any decision in this Court?

MR GRIFFITH:   Your Honour, we tried to get something out of McCulloch v Maryland.  With a bit of a push one can find something there as well.

KIRBY J: It seems curious that for a hundred years almost of our Constitution this has lain in wait for this case.

MR GRIFFITH: Your Honour, if I may say so, it seems curious that a doctrine that seems to have worked quite well without qualification for 32 or 34 years and which, 96 years into our Constitution, is regarded by those who are arguing to the contrary, so far as the Cigamatic doctrine is concerned, is something which is completely erroneous.  But we seem to be getting through the first hundred years without dealing with some of these fundamental points.  But we agree with your Honour’s point.

In paragraph 2.16 of our joint written submissions we have referred to matters we rely on as indicating that it is to be regarded as an emanation of the Crown. We say those matters should equally need to be regarded as a department for the purpose of section 52(ii).

I have indicated on the first point of whether it is the Crown; I will leave that to my learned friend to carry the weight of establishing that in the Court.  Of course, if that is not established, then the Cigamatic argument will need not to be considered and, I suppose, the Attorney then can say there is no occasion for the Court to be concerned further with his intervention because that is principally the reason we are here.

The third point we would like to make about legal personality is that the capacity to have legal personality, of course, can be conferred for a greater or lesser number of functions; you might have corporation for some limited purposes and it would seem very curious if, for example, a limited department was incorporated for a limited purpose or its activities, as a part of the department, were regarded as being separate from the concept of its activities as a department.  It just seems to be a curious dichotomy, we submit, to say that “department” must mean something which is established only by executive order or by proclamation or by administrative order and not something which could by legislation.  I mean, it would be quite possible by legislation to establish departments without incorporating them.  In our submission, it makes no difference to constitute a department or part of a department, the corporate body, for some purposes.

BRENNAN CJ:   It seems a curious notion though, does it not, that the emanation of the Commonwealth being the DHA should be the lessee of the owners of the property and be the lessor to the Commonwealth that is not its own emanation as the sublessee.

MR GRIFFITH:   Yes, your Honour.  Well they pay fringe benefits tax on my motor car, your Honour; it is all very curious.

BRENNAN CJ:   That is a matter, no doubt, of administrative arrangement, but in terms of the legal personality which becomes both the lessor and the lessee, it seems to me a curiosity beyond all comprehension.

MR GRIFFITH:   Your Honour, it is explained, because one sees from the materials I have filed there is an intention that the authority should operate with a cash flow and a profit and a contemplation that the department might make a serious loss on rents which are fixed at no more than 15 per cent of salary, and by adopting that process, your Honour, as one reads the structure of what is done from the reports and legislation, it ensures that the authority can provide housing to the requisite standard by appropriate financing arrangements and that the department can discharge its function providing housing to the requisite standing and that the financial costs of that falls on the department, where it should be.  That might be one explanation, your Honour, but ‑ ‑ ‑

TOOHEY J:   Well, except it goes beyond administrative arrangements and it is built in to the lease which the Authority takes, is it not?

MR GRIFFITH:   Well yes, your Honour, it is ensured that it will work ‑ ‑ ‑

TOOHEY J:   It will have the right to sublease to the Commonwealth which in turn has the power to grant a tenancy arrangement.

MR GRIFFITH:   Of course, your Honour, because it has to ensure that it has the necessary security and cash flow to enter its arrangements.

TOOHEY J:   Yes, I understand that, but in terms of identifying the legal entities involved, it does give some force to the argument that they are different.

MR GRIFFITH:   That is accepted, your Honour, but what we say is that, nonetheless, it is discharging the function of the department but, your Honours, I have indicated this is a fall-back argument because our first position is it does not make any difference, and I did not intend to say much more than that.

KIRBY J:   I have a recollection that there has been some academic discussion of Dao.  Do you know about it?  It is not footnoted in your - perhaps if you could just see if you could find that.

MR GRIFFITH:   There is, your Honour, because Dao has several streams in it, your Honour.

KIRBY J:   Yes, I realise that.

MR GRIFFITH:   So we will see if there is any relevant stream.  We will do that and let your Honours know tomorrow.  On the question of inconsistency, I do not intend to make submissions, but I would like to supplement an answer that my learned friend Mr Ellicott gave in that he was asked at one stage whether there were other provisions of the Act.  I have not checked with him, but I am sure his answer was meant to embrace the particular provisions that are referred to in our joint written submissions.  We there do seek to refer to the particular provisions in the structure of the Act which we rely upon from the point of view of the inconsistency argument, but I do not desire to say anything more on inconsistency other than we say the written submissions make out what we refer to as the requisite inconsistency.

Your Honours, may I now move to the Cigamatic principle.  Your Honours would have seen from our original joint submissions that the principle we develop departs from the traditional explanation of the Cigamatic principle and reflects, we say, the understanding of our constitutional structure which has developed and matured somewhat over the years since Bogle and Cigamatic, although of course your Honour Justice McHugh and also Mr Ellicott have my envy because they were there, as it were, but, nonetheless, we say that the statements of principle which were made, for example, by Justice Dixon and Justice Fullagar read by my learned friend this morning remain true, but they are correctness, we say, is now more clearly and refreshingly revealed by understanding an appreciation of our Constitution, particularly since the passing of the Australia Acts.

What we submit is those who argue against us are arguing from what we see as a default onus that they allege lies on the Commonwealth to establish a non-applicability of State laws, and we deny that that is a correct starting point. We say that the Court has to make a positive decision one way or another because a decision that the State laws can operate to bind the Commonwealth must be based itself upon an implication from the Constitution exactly as is the converse, which we contend is the established position, that State laws cannot bind the Commonwealth.

Each proposition must have a secure basis on its foundation rather than it being, in effect, a default setting, that in the absence of, it is put, it seems to us, on the submissions made against us, if we do not establish that Justice Dixon was entirely correct - do not worry about the ratio of Cigamatic at the moment, but unless we establish that he was entirely correct - it is put therefore the Commonwealth is bound.  We deny that.  We say the Court positively, if it comes to Cigamatic, has to find the correct answer.  We suggest that this approach is something which was certainly reflected in what Sir Owen Dixon said in Uther’s Case.  This is paraphrased in the extract from Zines which we have in today’s volume of materials.  One reason Justice Gummow will not have it is because we did not refer to it in our list of authorities filed in the Court, so we had to produce it to the Court.

At page 362 - I hope,because the author is in Court, he does not mind me trespassing into his literary copyright - he paraphrased Sir Owen Dixon by saying - and that is extracted in the volume of materials under tab 4 - he said at page 362:

In a federal system you do not expect one government to make laws for another.  The conferral of express affirmative and enumerated powers on the Commonwealth, however, authorises the making of laws affecting the operations of the States.  As the States do not have affirmative powers, the federal assumptions operate to their full extent so the Commonwealth cannot be controlled by the State laws.

BRENNAN CJ:   You are on page 362 of Mr Zines’ ‑ ‑ ‑

MR GRIFFITH:   Of Mr Zines’ extract, yes.  That is today’s volume, Justice Dawson, which is dated 3 December.  That is also, of course, in his book.

BRENNAN CJ:   Yes.

MR GRIFFITH:   We say, also, that section 107 does not impose a default onus on the Commonwealth merely by continuing State laws; we say that it is still for the State to show that the Commonwealth is bound by operation of section 107 and to sort of advance to the result, we submit that your Honour Justice McHugh was entirely right in Dao, particularly at 595 when you, we say, refuted the argument section 107 provides the result that the States are arguing for. In essence, your Honours, why I refer to Justice McHugh, the position that the Attorney adopts in these submissions is the position taken by Justice McHugh at page 595 in Dao, and that is where your Honour said:

the immunity of the Commonwealth from State legislation rests on the ground that the States have no power under the Constitution to bind the Commonwealth with respect to.....legislative or executive power. Every valid activity of the Commonwealth is carried out pursuant to a power expressly or impliedly granted by the Constitution itself. Nothing in the Constitution indicates that the activities of the Commonwealth are subject to State power.

Your Honour went on to say that in your opinion the nature of Australian federalism indicates to the contrary. In paragraphs 5.7 to 5.41 of our written submissions, we develop the argument that the federal structure of the Constitution necessarily reveals that State Parliaments have no capacity to bind the Commonwealth. So, if I may adopt completely those submissions and just make what might be referred to be dot points in respect of them. We say, firstly, the Commonwealth government - both as a Parliament and as the executive - is the national government, which is not confined by State boundaries; its boundaries are those of the nation. Thus the laws of the Commonwealth are binding throughout the Commonwealth.

The Parliament is constituted so as to represent the whole of the people of the nation. We say the principle of responsible government embedded in the Constitution is embedded in the fabric of the Constitution, so the Commonwealth executive is equally representative of the whole of the people. We say, secondly, that the legal relationship between the States and the Commonwealth - and, in particular, the component part of the Commonwealth to bind the whole - cannot be divorced from this fundamental conception of the Commonwealth government as it is conceived under the Constitution.

It has the consequence that the proposition that State laws may, of their own force, bind the Commonwealth one of being necessarily incompatible with the role of the Commonwealth executive under the Constitution, the role of the Commonwealth Parliament and the national character of Commonwealth laws. We do see much force in the point that his Honour Justice Gummow made this morning to my learned friend that section 109, of course, is no assistance in dealing with problems of inconsistency with respect to executive action.

States can no more, we say, legislate in a manner which is incompatible with the exercise of the Commonwealth executive of its powers and functions in accordance with section 61, or with the exercise of Commonwealth Parliament of its functions, than they can legislate in a manner incompatible with the exercise of judicial power of the Commonwealth. Of course, the courts in which that is invested - and this view, of course, was reflected recently in the decision of this Court in Kable ‑ it is also foreshadowed by Justice Isaacs’ compelling judgment in Pirrie v McFarlane 36 CLR at pages 204 to 205.

Our fourth point is that to hold that the State Parliaments have legislative power to bind the Commonwealth executive would be incompatible with section 61 of the Constitution because the national character of the Commonwealth Government requires the Commonwealth to perform its executive functions nationally. This can only be done if they are capable of operating in a consistent manner throughout the Commonwealth. And, again, if I can refer to Justice Isaacs in Pirrie v McFarlane he said for Commonwealth purposes, Australia is one undivided Territory holding one undivided people and knowing no State boundaries for effectuating its natural purposes.  Your Honour Justice McHugh spoke to similar effect in Dao at page 596.

Our last point of these propositions is that we say while the Constitution provides that laws made by the Commonwealth are binding nationally, if they cannot be executed and maintained by the executive nationally, then national character is lost. Commonwealth laws would apply differently in different States. If the application of federal laws were fragmented in this way, the national character of the legislative powers of the Commonwealth Parliament would be undermined.

Your Honours, we say that a number of these strands have been developed by Professor Zines in his fourth edition, which is under tab 4 of our last volume today which we have extracted.  Your Honour, the problem we have about Professor Zines is that we do not accept his conclusion at pages 363 and 364, where he prefers the contrary result.  We say not so much with respect to him being here as a result of a reasoned rejection of the authority or of the arguments, but expressing a personal preference, which seems to be one conceded by lack of constitutional support, to prefer the result of Pirrie v McFarlane which, as we indicate it is our submission is wrong, and Uther which, of course, has been overruled.

We say the matters that we refer to expose the error of asserting that the Commonwealth is just like everyone else, or like every other Crown.  We say the Commonwealth is not comparable with other persons; it is not comparable even with other Crowns.  Its position in the federal structure dictates otherwise.  I am sorry about this repetition, with apologies to Justice McHugh, we say at page 596 in Dao your Honour explain why that is so.  We submit, and we agree with what your Honour does say as being correct, that there is only one Commonwealth which exists on a national plane and not within the boundaries of several States.  To admit Parliaments of the State to legislate for the Commonwealth, in our submission, is to diminish the sovereignty ‑ ‑ ‑

DAWSON J:   That is to beg the question because the legislation may not be legislative to the Commonwealth but a general application.  If you adopt that particular approach you are denying what is said in Cigamatic.

MR GRIFFITH:   Your Honour, I was seeking to deal with the “affected by” doctrine in due course, but our basic proposition is, your Honour ‑ ‑ ‑

DAWSON J:   “Affected by” means nothing more than bound by, and there are some State laws which bind the Commonwealth.  If it does not mean that, I do not know what it means.

MR GRIFFITH:   If you have facultative laws, as your Honour referred to them this morning, there is no real problem in that, for example, in actions against the Commonwealth ‑ ‑ ‑

DAWSON J:   The point you are putting is that State laws cannot bind the Commonwealth.

MR GRIFFITH:   Of their own force, yes.

DAWSON J:   Yes, well, that is just not consistent with Cigamatic.

MR GRIFFITH:   Your Honour, that perhaps, with respect, identifies the point of difference.

DAWSON J:   What Cigamatic says is that no special disabilities, if you want to put it that way, should be imposed upon the Commonwealth by a State law, or if you want to put it another way, that the capacities of the Commonwealth under the common law or the Constitution cannot be reduced in any way by the States, but it does not say that if the Commonwealth, in exercising its capacities, comes within an area of operation of a State law, the State law does not apply. That is just exactly what Cigamatic does not say.

MR GRIFFITH: Your Honour, if I may put that into context with our opening submission which was, really we would say what your Honour says, identifies the point of difference. What we say is that the Commonwealth is bound by State law only if the Constitution does it. Our point is, your Honour, that for the reasons that we point out, the necessary implication from the constitutional structure is that it does not do it.

DAWSON J:   It is not a matter of implication.  Sir Owen Dixon is clear on that point; he makes it specific.

MR GRIFFITH:   Your Honour, we say our submission is it certainly does not make the Commonwealth liable expressly.

DAWSON J:   What does not make the Commonwealth liable expressly?

MR GRIFFITH:   The Constitution.

DAWSON J:   No, it does not say anything about that except - - -

MR GRIFFITH:   Exactly, your Honour, so it is an implication ‑ ‑ ‑

DAWSON J: What it does do is to give the Commonwealth certain powers, immunities, privileges, capacities, if you like - and those, because they are given by the Constitution, cannot be affected by State legislation, but it does not say that the Commonwealth is not affected in the sense of “bound” by State legislation when it chooses to exercise those powers, privileges, capacities - whatever you want to call them - to enter into a sphere of operation which is governed by State laws.

MR GRIFFITH: Well, your Honour, the point we wish to make is that if that proposition is right, that is not to say the Constitution says the Commonwealth is bound.

GAUDRON J: But section 52(ii) itself suggests that there may be circumstances in which it is bound by explicitly acknowledging one area in which it cannot be bound. It would appear to leave open that there are other areas in which it may be bound.

MR GRIFFITH: Well, your Honour, one must find them from the Constitution, in our submission.

GAUDRON J:   Yes, but 52(ii) points in favour of an implication that it may be bound by State laws.

MR GRIFFITH:   Well, with respect your Honour, it is a circular way to approach it, we submit, your Honour.

GAUDRON J:   It does not point in favour of your Cigamatic implication.

McHUGH J:   I thought you would answer that by saying, it refers to “matters”; it is matters that are taken outside.

MR GRIFFITH:   Your Honour reminds me it was put to me that there is, I think Professor Sawer said once that of a matter was argued for three days before the court with the intervention of counsel occasionally, so I am very grateful for your Honour saying that I disappointed your expectations in suggesting that, but yes, your Honour ‑ ‑ ‑

DAWSON J:   But the point that I am making with you is that if you are putting what you are saying as being an explanation of Cigamatic, then I cannot accept it; you are going right beyond what Cigamatic says.  Now, if you want to do that, you are entitled to do it, of course, but you cannot do it under the guise of applying Cigamatic.

MR GRIFFITH:   No, your Honour, we are not talking about overruling or not Cigamatic; what we say is that Cigamatic was right ‑ ‑ ‑

DAWSON J:   But did not go far enough, is that what you are saying?

MR GRIFFITH:   But it has other bases for support, but the ones we refer to, your Honour, which confirm it was right.

DAWSON J:   Well as long as you can see that the argument that you put now is not a Cigamatic argument, well then, go ahead.

MR GRIFFITH: Well, your Honour, what we are seeking to say is that there may be arguments each way; we are seeking to point to those which we say clearly show that there is this implicit result in the establishment of the Commonwealth by the Constitution, the Commonwealth is not to be bound by State laws, but what we do say is that a factor such as that your Honour refers to does not, in itself, establish the contrary is the case, that the Commonwealth is bound. It is a matter that may be referred to as an indication, your Honour, but we say that if there is a balance on this, the clear compelling implication, for the reasons that we have enlarged on, as well as uplifting the statements of Justice Fullagar, Justice Dixon, all those other judges listed by Justice McHugh in his judgment in Dao, all point to that same result.

BRENNAN CJ: I am having a difficulty in this way, Mr Solicitor, that they are starting on an argument of whether or not the Commonwealth can be bound by State laws, as though that was the starting point of it all. Why is the starting point not that governments, whether of Commonwealth or State, are bound by the law of Australia? After all, the Constitution has the common law as its matrix, and then the question becomes whether or not a particular law, whether emanating from Commonwealth or State, governs the given transaction. The next question after that is whether or not the State positive law, that is, legislative action by the State, is one which has either attempted to control a power, right or privilege of the prerogative of the Commonwealth, in which case it is excluded by implication from the Constitution, or whether it has endeavoured to affect a power, right or privilege of the Commonwealth Executive, where that power, right or privilege is conferred by the statute of the Commonwealth, in which case it falls by reason of section 109.

MR GRIFFITH:   Your Honour, this is a problem.  That is why I have opened up on the question of there is no default onus on the Commonwealth here.  Our submission is, your Honour, one must just start and say, “This is the question, ‘Is the Commonwealth bound by a State law?’”.  Your Honour, for the reasons stated by Justice Dixon; they were expressed in a slightly different way by Justice McHugh; they were expressed most recently by Professor Zines by reference to a federal principle.  One can start from the proposition that neither government may bind the other in the absence of specific provisions. 

Then when one looks to the Constitution one sees specific provisions which provide for powers to be vested under section 51. You see provisions that enable, by reasons of section 109, exercise of the Commonwealth legislative powers within power to prevail. You have a result whereby you can say, “Well, the Constitution makes provision to alter the result”, that the Commonwealth laws cannot bind the State, that they can and when there is an inconsistency of the Commonwealth laws within power, well, then, they have effect, but, our submission is, your Honour, one then does not say, looking at the point of view of the Commonwealth as against the States, there is a reverse position, that the Commonwealth is bound by all State law unless one can make out either a valid Commonwealth law which by reason of section 109 operations prevents the operation of a State law which is otherwise valid, and which, if that was the approach would leave the whole question of State law affecting the executive power effectively untouched because it is very difficult to have effective Commonwealth law which would prevent the operation of State laws with respect to the whole generality of exercise of the executive power.

We say from Kable, just as it not possible for the States to come in and trespass in the area of exercise of federal jurisdiction and judicial power, we say that the same result, but even more strongly, follows in respect of exercise of legislative and executive power.  I think your Honour’s question to me does identify the difficulty one might fall into, if I may put it with respect, of starting with a starting point such as your Honour’s first postulation to me because then one thing leads to another.

BRENNAN CJ:   If I understand your proposition correctly from your starting point, the Commonwealth executive is bound only by Commonwealth law and by the common law.  Is that right?

MR GRIFFITH:   Yes, your Honour.

BRENNAN CJ:   That is all?

MR GRIFFITH:   Yes.

BRENNAN CJ:   That seems to me to leave great gaps in the legal framework which the executive might well be minded to have filled up.

MR GRIFFITH:   Well, your Honour, it has been filled up in many ways by operation of the Constitution and the Judiciary Act.

BRENNAN CJ:   In many ways, in many ways.

MR GRIFFITH:   Your Honour, our position still remains that apart from section 56 dealing with contract and tort and any other specific provision, the Commonwealth has legal immunity. I know that is a matter perhaps still under debate, your Honour, but in our submission that approach does reflect faithfully constitutional history and one gets to the position the Commonwealth liability is liability that the Commonwealth, either generically or specifically, calls down on itself.

DAWSON J:   That is because there is at common law a special relationship between the Commonwealth Crown and its subjects in relation to tortious liability just as there was in relation to priority of debts.  It says nothing about laws which applied generally.

MR GRIFFITH:   Your Honour, our position is ‑ ‑ ‑

DAWSON J:   And that was the basis of Cigamatic.

MR GRIFFITH:   Your Honour, our submissions are not just rooted in Cigamatic, but what we submit, your Honour, is the position is it is for the Commonwealth to call down.

DAWSON J:   Yes, there are contrary to Cigamatic because they cannot stand with what was said.  What Cigamatic said, Bogle said, is that laws of general application do apply to the Commonwealth.

MR GRIFFITH:   Your Honour, it certainly did not say that all ‑ ‑ ‑

DAWSON J:   Do affect them, do bind them.

MR GRIFFITH:   Your Honour, it might be (a) what is a question of the law of general application; (b), your Honour, with respect, those cases did not say ‑ ‑ ‑

DAWSON J:   Laws which do not affect a special relationship.  That is what the law of general application is.

MR GRIFFITH:   Your Honour, it might then become a matter of what is a special relationship.

DAWSON J:   It was explained in Cigamatic.  It was a relationship which was different from other relationships between the Commonwealth ground and other subjects with respect to debtors.

MR GRIFFITH:   With respect, your Honour, that is dealing with what could be regarded as a narrow view of Cigamatic dealing with the aspect of prerogative powers.

DAWSON J:   All right, but you have to explain where you draw the line.  If you do not draw it there, that was where it was drawn in that case.

MR GRIFFITH:   We certainly do not draw it there, your Honour.  We say that ‑ ‑ ‑

DAWSON J:   You do not draw it all.  You say that no State laws, other than the common law, if that could be regarded as a State law and probably it cannot, bind the Commonwealth.  That is not what Cigamatic said.

MR GRIFFITH:   Your Honour, we say that is the starting point subject to the operation - - -

DAWSON J:   It is the ending point too, is it not, of your argument?

MR GRIFFITH:   No, your Honour, because then, just as the Commonwealth Places, your Honour, as need arises ‑ ‑ ‑

DAWSON J:   That is a matter of legislation.

MR GRIFFITH:   Yes.

DAWSON J:   But we are talking about the bare constitutional position.

MR GRIFFITH:   We say the bare constitutional position is the same as it was for Commonwealth Places, even if it takes some time to vindicate that.  That is our submission.

DAWSON J:   That is certainly not what Cigamatic says.

McHUGH J:   Mr Solicitor, there is always one matter that has troubled me about Sir Owen Dixon’s doctrine and that section 114 of the Constitution. Why was it necessary in 114 to say that the State shall not impose a tax on the property of the Commonwealth which is, in effect, a tax on the Commonwealth given the premise of the Cigamatic doctrine as you would expound it?

MR GRIFFITH: Your Honour, one reason might be that those who were drafting the Constitution did not know as much about the Cigamatic doctrine as we do.  It is something that one can say ‑ ‑ ‑

McHUGH J:   That is a rather weak argument, Mr Solicitor.

MR GRIFFITH: Your Honour, another reason these fiscal issues were of pre-eminent importance to those who drew the Constitution, and one cannot be surprised if they really wanted to stitch it up, as it were, to make provisions, firstly, with respect to duties of customs and excise; secondly, with respect to the issue of Commonwealth revenues, the distribution of surplus et cetera, and one can regard this provision as fitting within that desire to provide exactly for what were the fiscal consequences rather than to leave it for this Court some years later to determine that issue.

We would say, your Honour, absent that section, were a State to seek to impose a tax on Commonwealth property, one could provide a formidable argument, your Honour, that that law could not apply, even quite apart from Cigamatic points but, anyway, it is there, so the case has never come up.  I do not know whether that assuages your Honour’s complete worry but we would hope that section 140 will not control the answer here.

I was making the proposition that we say the Commonwealth is not just like anyone else or like any other Crown, and I accepted your Honour Justice McHugh’s explanation at page 596 of Dao why that should be so. But we would like to pick up a point which was referred to by Mr Ellicott and say that it is removed from realities of government to assert - and this is an assertion also made by Professor Zines at page 364 as well as by the intervening States - that if the Commonwealth finds it inconvenient to be bound by a State law, it could always legislate to the contrary and take the benefit of section 109. Justice Isaacs in Pirrie v McFarlane 36 CLR recognised the practical impossibility of imposing an “opt out” approach in his powerful dissent in Pirrie v McFarlane at page 211.  We have this quote extracted at paragraph 5.40 of our original joint submissions.  Your Honour Justice McHugh made the same point which was read by my learned friend from your judgment at page 598 in Dao.

We just make the additional point that this practical reality is demonstrated by the consequences from the Evans Deakin decision with respect to section 64 in that it was just not possible to draft a

Commonwealth law to provide an “opt out” approach to the operation of State substantive laws.  Your Honours will have in today’s volume of materials, the 3 December volume, an extract of the copy of the Bill which is under tab 5 which was introduced in 1990 to adopt what was thought to be a workable result to work out Evans Deakin an “opt in” approach to enable the federal government by regulation to opt in to State laws, which was thought to be a workable result.

The only difficulty is that it seems that Parliaments do not pass laws dealing with optings in and optings out, so the practical reality is that the only way to make the system work is to come back to this Court.  I am sorry to put it so bluntly to the Court, but it is clear that it is not possible for the Commonwealth to exercise power on the basis of opting out line by line of State laws.  If there is an unsatisfactory result that could only be cured by that approach, I invite the Court to act on the basis that, unlike the position of the Commonwealth Places, it will not work.

KIRBY J:   What happened to this Bill, it was withdrawn or it lapsed?

MR GRIFFITH:   It lapsed, your Honour, but it was not going to pass anyway.  It is a bit like having a referendum against freedom.  It is not the sort of thing that runs.

BRENNAN CJ:   Mr Solicitor, I should say that you have had some interruptions and if you would wish to calculate your times on the basis of having another quarter of an hour you are at liberty to do so.

MR GRIFFITH:   I would be delighted because I think that would just do me nicely, if your Honours please.  Thank you.  That is not taking it from my learned friend, I hope, because we think we have agreed on the basis of seniority of practise on that.

In this case, if the Commonwealth were subject to the State Act it would mean that the power of the Act under the Act to the Minister to give directions could be negated.  I have already made the point that in dealing with this entire State Act and the establishment of exclusive jurisdiction in the tribunal, section 71 of the State Act makes the jurisdiction exclusive for many of the substantial purposes, and as far as one can gather, it is intended to be - perhaps Mr Mason can indicate if it works that way - exclusive for really all landlord and tenant matters.  It does seem very curious that these aspects which would otherwise be regarded as matters of exercise of the federal judicial power are, effectively by the State, removed to a tribunal where the Commonwealth would be without power to vest judicial power in that tribunal because it is not a court and where by operation of that State law, not only can the Commonwealth vest its own judicial power in that tribunal, it is not able to go to State courts who otherwise may exercise the common law judicial power, for example, with respect to matters that deal with tenancies, leases and landlord and tenant, because of the operation of section 71.  That seems a rather odd result, in our submission, and goes to negate what one would regard as a constitutional mandate, including Chapter III.

It was suggested at paragraph 3.16 of the Western Australian submissions that a State can legislate for the Commonwealth in the same manner as it may legislate for the Crown in other capacities.  We say that that is to ignore the critical and special nature of the Commonwealth in relation to the States.  Your Honours Justice McHugh and Justice Gummow, in your judgment in the Superannuation Case of 21 November 1996, particularly at pages 19, 32 and 33, discussed the myth of the Crown remaining one and indivisible and say that that has been exploded and cannot assist in determining the mutual legal relationships between the States.  We say that even less can it assist in determining the legal relationship in the Commonwealth and the States.  We say that that is a doctrine that was not intended for reply.

May I now briefly refer to Pirrie v McFarlane, that I have already foreshadowed?  Our submission is that it is a decision which is now shown to be incorrect.  We say it was wrong when it was decided, perhaps because of the oversight for those arguing of the Commonwealth to put the relevant arguments, but they are very eloquently put by Justice Isaacs in his dissent.  We say that the decision must be regarded as impliedly overruled by the Allders’ decision, and we say that it is plain that the majority in Pirrie v McFarlane accepted the Commonwealth could make laws under section 52 to the same effect as State laws.  If the majority accepted that, it would follow from the test arising from the Allders’ decision that the State law was invalid as trespassing within the Commonwealth areas of exclusive power.

Your Honour Justice McHugh made the also correct point in Dao at page 598 that the discussion of inconsistency was based on the view of section 109, which has since been discredited with respect to being able to comply with two mandates, and your Honour Justice McHugh also said that it is inconsistent with the State Banking Case and Cigamatic.

At page 360 to 361 of his 4th Edition Professor Zines said the decision in Pirrie v McFarlane is doubtful, even though he goes on to say he likes the result.  Our submission is that it is worse than that, it is wrong, and we say effectively it is already gone.  And we would refer in passing to Justice Isaacs eloquent, if somewhat dated, example at page 211 of the dispatch rider, who had to ride from Sydney through Victoria to Adelaide, having to stop at each State border to obtain the requisite State driving licence, but that just really makes what was a point obvious at the time.

May I mention something briefly with respect to the “affected by” principle in addition to the points which I made with apparently some passion earlier this afternoon.  Our submission is that one has no difficulty with facultative laws, such as goods Acts, with respect to a contract; perhaps ordinary Property Law Act provisions with respect to a lease, which is also a contract, because of the operations of the federal scheme, with respect to the liability of the Commonwealth as a juristic person and emanations of the Commonwealth, because one would find that in the ordinary course there would be amenability to suit in the State court, there would then be an application of the relevant State laws by operation of the provisions of the Judiciary Act and one would then engage in inquiry of the sort which still could be engaged in this case, whether in the event that the Hendersons took proceedings in the State court for an order that they be given a key, pursuant to provisions of the State Act, whether or not that provisions was picked up and made applicable by any provision of the Judiciary Act.  We say that that is a perfectly satisfactory result, which gives the Hendersons exactly that which they acquired when they bought the property, subject to the lease and took a transfer as the assignee/lessor under the lease.

We say that it is not difficult to envisage situations where a comprehensive mandatory scheme applying to residential tenancies could substantially interfere with the Housing Authority’s ability to carry out its functions and one can find examples under this Act readily enough, such as section 56, which enables lessors to terminate residential tenancies on notice because the property is being sold under a contract of sale where they are required to give vacant possession. Our submission is that such provisions cannot by force of the terms of the State Act, without being made applicable by reference applicable Commonwealth law, be regarded as operative provisions, which are valid in their operation in the Commonwealth or an emanation of the Commonwealth.

Now there may be, when one has regard to the Cigamatic principle, one might say, well, why cannot the Crown in right of the Commonwealth agree to submit to laws of a State in the same way in which ordinary people may agree to submit to a particular legal situation in the area of contract? But when one considers the general operation of Commonwealth laws with respect to Commonwealth liability, in our submission it is not necessary to inquire whether or not there has been a specific submission, for example, in a goods Act situation, in a leasehold situation and the ordinary law with respect to a lease, because one would find then the legal situation is worked out sufficiently by operation of the Constitution and the Judiciary Act provisions.

Your Honour Justice McHugh in Dao at 597 discussed this issue of “affected by” and dealt with this question of whether or not, as we read what your Honour said, one obtained a satisfactory result with respect to picking up provisions by operation of the Judiciary Act and we would agree with that approach.  It is also discussed in the Zines extract at page 357 to 361.  If I could finally refer the Court to the quotation of Justice Fullagar at paragraph 5.44 of our materials, where his Honour there refers specifically to the issue of leases.  That is on page 33 of our original joint submission and there, in Bogle, Justice Fullagar, by accepting Commonwealth may be affected by State laws, said:

“...I should think it impossible to hold that the Parliament of Victoria could lawfully prescribe the uses which might be made by the Commonwealth of its own property, the terms upon which that property might be let to tenants, or the terms upon which the Commonwealth might provide accommodation for immigrants introduced into Australia.”

In our submission, that is exactly what the State law seeks to do in this case.  Your Honours, although the New South Wales ‑ ‑ ‑

GAUDRON J:   But not of the Commonwealth’s property.  You see, the difference is that it is Mr Henderson’s property.

MR GRIFFITH:   Your Honour, what we say is it is Commonwealth property because the Commonwealth takes the leasehold which is regarded as property.  That is the interest the Commonwealth has and that leasehold ‑ ‑ ‑

GAUDRON J:   The second clause refers to the Commonwealth’s own property.

MR GRIFFITH:   Your Honour, perhaps I should withdraw the description precisely.  We say it is completely analogous, but it can be distinguished on that ground, but we say that the reasoning should be equally applicable and not turn on the question of whether it is leasehold rather than freehold in the Commonwealth’s name.  Your Honours, although New South Wales did not leave section 64 in issue, counsel for the Hendersons in their submissions have referred to section 64 and Miss Perry will address the Court very very briefly on that issue.

BRENNAN CJ:   Thank you, Mr Solicitor.  Yes, Miss Perry.

MS PERRY:   Thank you.  Aside from the limited issue raised by the Hendersons to which I will come shortly, the question whether section 64 could operate to appropriate sections 24(4) and 29(5) of the Residential Tenancies Act is not in issue.  It has now been conceded by the first respondent and New South Wales intervening that the particular powers invoked in the present case do not involve a suit within federal jurisdiction.  It is implicit in this that they concede that the tribunal is not a court and that it is exercising administrative and not judicial power.  Accordingly, it would appear that the question raised in the joint submissions as to whether Evans Deakin was correctly decided is one which must await another day. 

Mr and Mrs Henderson do not seek to argue that the Residential Tenancies Tribunal is a court, but rather put the argument in their submissions that the condition precedent to section 64 in any suit ought to be construed as including proceedings in an administrative tribunal as well as proceedings in a court vested with the judicial power of the Commonwealth.  Accordingly, it is said that section 64 can operate to pick up sections 24(4) and 29(5) so as to empower the tribunal to make orders upon the Hendersons’ applications.

The argument is not taken up by any of the intervening States and is argued with little confidence by the Henderson’s who rightly concede at paragraph 27 of their submissions that there are powerful textual indications that the reference to a suit in section 64 is a reference to litigation in a court.  The subject matter of the Judiciary Act and its constitutional context render it untenable to suggest that the word “suit” in section 64 could refer to anything other than a suit in a court properly vested with federal jurisdiction.  The Judiciary Act is concerned with the vesting of jurisdiction in federal and State courts in accordance with Chapter III of the Constitution, in particular, of course, sections 73, 76 and 77, and with other subjects related to that, including the laws and procedures to be applied by such courts in the exercise of federal jurisdiction.

The construction which the Henderson’s seek to impose upon section 64 would require a radical departure to be made from the manner in which that section has been construed to date.  All of the members of the Court in Evans Deakin were of the view that satisfaction of the condition precedent for the operation of section 64 required that an action be brought in a court invested with federal jurisdiction and thereby affirmed the decision in Commonwealth v Anderson.  Without taking your Honours to those passages I will give you the citations to them.  With respect to Commonwealth v Anderson (1960) 105 CLR 303 at page 310, in the

judgment of Chief Justice Dixon with Justices McTiernan, Fullagar, Kitto and Windeyer agreeing. The relevant passages in Commonwealth v Evans DeakinIndustries (1986) 161 CLR 254 at page 263 with respect to the judgment of their Honours Chief Justice Gibbs, Mason, Wilson, Deane and Dawson and at 269 in the judgment of Justice Brennan, as he then was.

Further references can be found in footnote 111, or our joint submissions at page 36.  Consistently with this, the majority in Evans Deakin regarded section 64 as having been enacted pursuant to section 78 of the Constitution, even if that was not the sole source of the power to enact law with respect to the Commonwealth’s liability and that point is made at the page to which I have already referred in Evans Deakin. 

It is also said by the Henderson’s that the Constitution and the Judiciary Act should not be interpreted so as to thwart or unduly restrict the growth of administrative tribunals. This proposition we find contrary to every principle of constitutional and legislative construction and would subvert the Constitution to governmental policy. Those are the submissions for the Commonwealth.

BRENNAN CJ:   Thank you, Ms Perry.  Mr Solicitor, you are appearing for the first respondent as well as for the intervening Attorney‑General?

MR MASON:   Yes, your Honour.

BRENNAN CJ:   Yes, Mr Solicitor.

MR MASON:   Your Honours, the reason for the statements in paragraph 1 of our outline of submissions focuses not so much upon the tribunal as a whole but upon the particular powers that have been invoked in this case.  With reference also to something my learned friend Mr Ellicott said when he was arguing that when the Commonwealth enters into a contract for sale of goods it, through its own contractual processes, in effect agrees to take on board the Sale of Goods Act, I would draw the Court’s attention to the fact that the particular powers here do not operate through the process of contractual implication but are in the nature of powers which the tribunal can through its order assert.  Section 24(4) appears to be an order not based upon an antecedent contractual right or implication but just because it seems a good thing to do.  Section 29(5) perhaps makes this even more clear in that the power to order the removal or addition of a lock can be invoked if the tribunal is satisfied that it is reasonable in the circumstances to do so.  We say nothing about the general aspect of the tribunal as a constitutional court but the focus is more upon these particular powers as not being what you would describe as suits in federal jurisdiction.

Your Honours, in the context of both the section 109 issue and the Cigamatic issue, there has been one common theme.

GUMMOW J:   Just before you leave that, Mr Solicitor, section 4 of the New South Wales Act says it binds the Crown in right of New South Wales certainly.  How does that then fit in with section 125 which backs these requirements you have been referring to in sections 24 and 29, backs them with criminal law?

MR MASON:   There is a separate question whether the criminal law sanction is superadded upon what I will call the sanctions flowing from the exercise of administrative power.

GUMMOW J:   What is the tribunal doing?  If it is not modifying a contract, what in terms of legal analysis is it doing other than engaging the sanction of criminal law?

MR MASON:   It may be creating a duty which could be enforceable through administrative law processes but, in addition and in the main course, it is creating an obligation, breach of which sounds by way of penalty.  Then you do have the additional question of construction, Cain v Doyle, as to whether it extends to the Crown in its various manifestations.  I am not saying that it does not but, even if 125 is not engaged, the sections can have operation standing alone.

GUMMOW J:   Given the proposition that it binds the Commonwealth, the first question might be to find out what binds the State and what the relevant “it” is that binds either polity.  That is what has me mystified.

MR MASON:   Clearly, if a statutory corporation, State or Commonwealth, is involved, then applying the principles discussed in Bropho’s Case there would not be any - there might be a presumption but there would not be the same restraint upon finding a criminal offence provision as there would be if the offence were imposed upon the entity known as the Crown or the Queen.  That is the distinction, as I understand it, the Court was drawing in that context in Bropho.

BRENNAN CJ:   So far as the administrative remedy that you postulate is concerned, do you suggest that section 75(v) might come into play?

MR MASON:   That would require, I think, the DHA to be a Commonwealth officer, and it would also have to be a matter arising in federal jurisdiction.  So, at least in that context the question of whether it is a court would be involved.  But my understanding of 75(v) is that a corporation of this nature would not qualify as an officer of the Commonwealth for 75(v) purposes.

BRENNAN CJ:   So what would be the ‑ ‑ ‑

MR MASON:   I am reminded of a case called Businessworld Computers, which your Honour Justice Gummow decided in the Federal Court.  I cannot give your Honours the citation.

GUMMOW J:   There is a case in this Court called Cram, is there not, about the Coal Authority?

MR MASON:   Yes.  That was a tribunal, not a corporation.

BRENNAN CJ:   I am just wondering what the administrative law remedy would be.

MR MASON:   Against the Commonwealth?

BRENNAN CJ:   Against the DHA.

MR MASON:   Well, could it not be in the nature of mandamus?  If it is a duty imposed upon it by a valid statute, then it could be directed to perform that duty, or restrained from acting inconsistently with it or there could be a declaration that it has the duty, which one assumes would be as good as an order to that effect.  Your Honours, I was saying that there is one thing common to the 109 and the Cigamatic principle, and it is the fact that both issues are being debated in the context of a legal system that is no longer a common law legal system.

Professor Calabresi wrote a book called The Common Law for the Age of Statutes and what, in essence, is involved in this case is a Constitution for the age of statutes because, if the high Cigamatic principle espoused by my learned friend the Solicitor‑General for the Commonwealth were adopted, one presumably has the situation that officers of the Commonwealth, or agents of the Commonwealth, are bound by the common law but entirely immune from State statute law.  

Now, apart from the difficulties and the discrimination that would be involved, there may well be some disadvantages as well.  One hesitates to think what the common law of the offence of the murder would be, both as to procedure and punishment.  And I cannot imagine that an officer of the Commonwealth, if he or she contravened the general criminal law of the State, surely - and this is where Pirrie v McFarlane, in my submission, must be correct - when one talks of a general law of a State it includes the general enacted criminal law of the State.

If it were otherwise, if one has to draw some line between common law and statute law, one virtually creates an ever‑widening area of discriminatory immunity for agents of the Commonwealth, let alone - leave aside the Commonwealth itself, but for agents of the Commonwealth, because it is hard to think of any aspect of common law that is not now regulated by statute.  People talk about common law rights of injured workers.  The common law rights of injured workers have a system whereby the common law doctrine of contributory negligence has been modified, et cetera, et cetera.

Now, in the context of the section 109 argument, our submission is that section 7 of the Defence Housing Authority Act, rather than seeking to repel the general law - by that I mean common law and statute law - embraces it.  The example given of developing land that was raised in argument, building, demolishing houses, renting, it is impossible to conceive of the law of landlord and tenant any more as being a purely common law construct, and yet an Act passed in 1987 must, as a matter of positive intention, we would submit, have intended to engage that law, fairly uniform though it is, but differing obviously in particular respects from jurisdiction to jurisdiction.

The analogy is that of the Ansett Transport Industries v Wardley Case - and I will not take the Court to the passage that are cited at the bottom of page 1 - where the Court held that there was with respect to the particular area of law no intention to repel but, rather, generally to engage.  The essential fallacy of the prosecutor’s argument, in our submission, is that it seeks to see sections 5, 6 and 7 as going beyond an enabling provision, a charter, as it were, for the establishment of a statutory corporation setting out its capacities and seeks to go further and to see that as a positive authority - I am using the language of Justice Mason in Wardley - to do something free of otherwise applicable State law, be that common law or statute law.

If the test is,”Iis there a conferral of positive authority to do something in a law free context?” - and for “law-free” presumably one is meant to read that as “statute law free” context - then one has the inconvenience, if not the absurdity, that you have to somehow or other construct the common law of landlord and tenant and make sure you do not take on board any statutory modifications of it unless perhaps you can bring them in through this “affected by” doctrine that was advanced by my learned friend, Mr Ellicott.

We submit that the case is quite distinguishable from Dao, because the particular power that was there involved was one which conferred on the post office, the Postal Commission, the power to determine - that power was in fact exercised to determine the terms on which it engaged its employee, and it was the exercise of that power that was challenged ex post and there was an application made to say, “What you have done was unlawful because it contradicted State law”.

Your Honours, we refer to section 63 of the Defence Housing Authority Act as a very clear example of how the Commonwealth Parliament may and can repel State law in a particular field by occupying it in an exclusive way.  We refer to that, not only as an example of how it might be done, but also as an expressio unius.  At the bottom of page 3 of the outline of the submissions we pray in aid  the passage from the joint judgment of your Honours Justices Dawson, Toohey and Gaudron in the State Authorities Superannuation Board Case itself where an intention to bind the Crown in one respect was held, construing the statute, to not bind it elsewhere.  In section 63, it is a section that attempts to do a number of things.  It provides an exemption from laws:

of the Commonwealth or of a State or Territory;

That is subsection (1).  That is subject to subsection (4) which provides:

the regulations may provide that subsection (1) does not apply in relation to:

a specified law.....; or

laws in a specified class of laws -

One goes then back to subsection (2):

The Minister may, by notice in writing.....declare that stamp duty, or a similar tax.....is not payable by the Authority.....under a law of the Commonwealth or of a State or Territory in respect of -

particular dealings, and that is elaborated in subsection (3).  So that is a very clear example of how State laws can be engaged and repelled conditionally and it stands in marked contrast to section 7. 

May I turn then to the section 52(ii) arguments. In the Commonwealth’s submission that was filed on 3 December, today, our argument on section 52 is in some respects misconstrued. The opening paragraph of those submissions states:

Section 52(ii) of the Constitution is not a mere transitory provision which operated only until the State departments set out in section 69 were transferred to the Commonwealth.

Now, the use of the expression “transitional provision” has perhaps tended to add more confusion than light to the point that is being made with respect to section 52(ii). We are certainly not saying that the transition is confined to the period before transfer. It would strike down any law before or after transfer if it was a law that was characterised as a law with respect to the transferred departments. Now, I am not saying that that is a provision that will last forever although if a transferred department can include officers - well, presumably they are all dead - obligations or property, and we take those from sections 84 and 85 where those three elements of a department are identified, there may well still be in existence property that was part of the property of a transferred department and a law of a State which sought to regulate that would be repelled by section 52(ii), but the primary reason why section 52(ii) must not be read as laws with respect to the Commonwealth Department of Defence which, in effect, is the way the Commonwealth parties wish to have it read, is because of the contrast the Constitution draws between Commonwealth Department and transferred State Departments.

In section 64 of the Constitution, the Governor-General is given the power to establish:

departments of State of the Commonwealth -

and in appendix A to our submissions, the proclamation establishing the Department of Defence on 1 January 1901; the Commonwealth Department of Defence is attached.  So there was a single Commonwealth Department of Defence established by exercise of executive power of the Governor under section 64.

What happened some weeks later was that the six State Departments of Defence were transferred across; that could have happened some time later, it might never have happened at all. The only department that was automatically transferred across was Customs and Excise, which is dealt with in the last sentence of section 69. But we do know, and as contemplated, the State Departments of Defence were transferred, occurring on 20 February, and one assumes largely by way of merger into the single pre‑existing Commonwealth department. I say “largely” because such evidence as there is shows that not all members of the State departments were transferred into the single Commonwealth department, but perhaps nothing turns upon that.

Sections 84 and 85 of the Constitution address the transfer of officers and transfer of property of a State and in so doing inform the reader as to what really is involved in the notion of departments or departments transferred. Section 84 provides that:

When any department of the public service of a State becomes transferred to the Commonwealth, all officers of the department shall become subject to the control of the Executive Government of the Commonwealth.

Section 85(i) and (ii) deal with ‑ ‑ ‑

KIRBY J: But that highlights the point, if you are looking at juxtaposition of language, that when you contrast 52(ii) and that provision in section 84, it talks of the public service of a State, whereas in 52(ii) looking forward, it talks of the Department of Public Service, the control of which is transferred. So that that tends to suggest that where they are talking about transitions, they talk as they do in 84; where they are talking about a head of power, which is what you would expect the little subsection jammed in between the undoubted heads of power, 52(i) and 52(iii), that they do not talk in that language. I mean, it is just very difficult to say that 52(ii) is a transitional provision, in my respectful opinion.

MR MASON:   To say that one does not expect to find a transitional provision in section 52(ii) is, in my respectful submission really basically circular reasoning and does not ‑ ‑ ‑

KIRBY J:   No, it is not.  It is standard construction of statutory language including constitutional language, to look at the structure - you look at section 51, then you look at section 52, and section 52 is exclusive and it deals with things that you would expect to be exclusive, and it is not dealing with things that you would expect to be transitional.

MR MASON:   The very fact that it confines its exclusivity to transferred departments and not to all federal departments tends to suggest that it is - one still has to ask exclusivity in respect to what. The class of sections 51 and 52 items are so varied that to apply noscitur a sociis to section 52 is, respectfully I would submit, not a strong approach to construction. Section 85 speaks about ‑ ‑ ‑

GUMMOW J: Just stopping there for a minute, Mr Solicitor, do you rely on this construction of section 52(ii) as to non‑exclusive powers for, on the way you put it, any department of State established under section 64 as significant for indicating limits of Cigamatic principle?

MR MASON:   I never thought of the connection between 52 - well, certainly that 52 ‑ ‑ ‑

GUMMOW J:   I thought that you were saying that this means the States have concurrent legislative power in respect of any department established under section 64?

MR MASON:   Well, certainly the very fact that section 52 has addressed exclusive powers, I rely upon as an implication that the Constitution has dealt with exclusivity by its express terms, rather than leaving it to the so‑called Cigamatic principle.  I think you are putting a slightly narrower ‑ ‑ ‑

GUMMOW J:   You say dealt with it exclusively, only for the purposes of transition; moving the public servants and their desks and the rest of it out of the State and into the Commonwealth - - -

MR MASON:   Yes.

KIRBY J:   Your submission is that it is spent.

MR MASON:   Well, practically, yes.

KIRBY J:   There is some ancient warrior, is there, that is left to ‑ ‑ ‑

MR MASON:   No, no, some ancient piece of property may still be left.

KIRBY J:   I see.

MR MASON:   I do not know what happened to Pinchgut, whether it was part of the State Department of Defence, but it is practically spent, yes.  And I say respectfully, why not?

KIRBY J:   Section 52(i) is not spent, that is the seat of government, and that Commonwealth’s places is very much alive.  52(iii) is not spent, but 52(ii), squeezed in there, is exhausted.  It has had it.

MR MASON:   Because of the language used, yes.  Because of the distinction between 52(ii) on the one hand and 69 on the other, and because of the use of the plural - well, it is not the plural:

any department of the public service the control of which is by this Constitution transferred to the Executive Government -

The subject matter is what comes in, not what it comes into.

McHUGH J:   That is a difficult argument in the light of the language, is it not?  It is not a power with respect to departments of the public service; it is a power with respect to matters relating to any department of the public service.

MR MASON:   Yes, but any State department or public service, that is the question, not any federal department that is established independently by the government.

McHUGH J:   But “matters” is an abstract conception.  It is not talking about property, is it?  It is not talking about persons?  It is talking about matters.

MR MASON: Yes, it then goes on to qualify, “matters relating to”, and then one has to construe the words that follow, and the words that follow speak to the transferred State departments, not the established Commonwealth department, and we know with this very department, the Commonwealth department was formed before the transfer or merger, if I can call it that, occurred. Yet the argument has been put against me is that somehow or other section 52 expands to embrace everything of concern to the merged - to the antecedently created federal department into which these State entities were merged and any corporate manifestation of it established by later statute law. Section 85(i) speaks of:

property of the State of any kind, used exclusively in connexion with the department -

and that is speaking of any department of the public service which is transferred to the Commonwealth.  So we know from that that 52(ii) can look at property, and 85(iv) speaks of:

obligations of the State in respect of the department transferred.

There is plenty of work to be done for 52(ii) in that sense, and one does not need to strain to give it more, all the more so because section 51 gives the Commonwealth concurrent and, on this argument, overlapping, or partially overlapping power, with respect to all of the federal departments into which these State departments presumably become merged.  But the very fact that 51 gave concurrent power in some respects, and 52 gave clearly more narrowly expressed exclusive power, is a distinction we embrace.

KIRBY J: But on that argument you did not really need section 52(ii) because you could have just done it under section 51 in respect of that matter which was relevant to the federal head of power for which the department was formed.

MR MASON:   No, you needed section 52 to swat away State laws without the need of an inconsistent federal law.  It was to stop the State Parliaments enacting laws to enable their public servants, as they went across to the federal department, coming in with particular benefits or particular preferences.

KIRBY J:   But that overlooks the word “matter” as distinct from ‑ ‑ ‑

MR MASON:   No, a State law that said that a State public servant who is in a transferred department shall have a particular set of benefits - let us assume a State law passed in 1901 - would be repelled by section 52(ii) without the need of an inconsistent federal law. By that means, uniformity was established. The States were discouraged from giving a particular leg‑up to their departing public servants.

DAWSON J:   That very problem arose just a few years ago when Quarantine was transferred.  It was only transferred two, three, four years ago?

MR MASON:   Yes.

DAWSON J:   That was the very argument that arose.

MR MASON:   So there is a very real need to create this narrow, but necessarily exclusive realm of error.  I say a “need”; the fact is, the founding fathers chose to do so, but the question is, how widely did they create an exclusive realm.

In our submission, Chief Justice Latham was quite correct in Carter’s Case66 CLR 557. The passage is at page 571. Carter’s Case, it is true, the argument proceeded on the basis of an exclusive power derived from 51(vi), but both Chief Justice Latham and Justice McTiernan dealt with section 52 in the course of their reasoning.  I accept this is obiter, but nevertheless I submit it is persuasive and correct obiter.  At page 571, in the judgment of the Chief Justice, the middle of the page:

Section 52(ii) relates to the control of matters relating to transferred departments. The transferred departments are -

and he sets out section 69.

Power to legislate with respect to the subject matters with which such departments deal is conferred, in my opinion, not by section 52(ii), but by section 51(v), 51 (vi), 51(vii) and 51(ix). These provisions would be quite unnecessary if section 52(ii) conferred exclusive, and therefore complete, legislative power in relation to these subject matters.

And, really, when the prosecutor and my learned friend, the Solicitor‑General for the Commonwealth, tried to make good the section 52 argument they really were saying the subject matter of this law is the needs of Defence personnel and were clearly engaging in the sort of reasoning that has been dealt with by Justice Latham.

McHUGH J:   Well, what Sir John Latham is fair enough when one is considering departments which could be set up under these paragraphs of section 51, but what about other departments such as CSIRO and social welfare departments before the 1946 amendments?  Where do they get their protection from?  What legislative power would the Commonwealth use to protect them?

MR MASON:   Section 109 and O’Reilly’s Case.  I mean, the Commonwealth could create those departments and immunise them through federal law from inimical State laws.

McHUGH J: But that assumes that the Commonwealth can only set up a department under section 61 - section 64 in respect of matters of which it has a head of power.

MR MASON:   No, I was not intending to go that far.  So if you are dealing with a department purely by the executive as it were.

McHUGH J:   Yes.

MR MASON:   Well, that really just brings you to the start of the Cigamatic question.

McHUGH J:   Maybe 51(xxxix) ‑ ‑ ‑

MR MASON: Section 51(xxxix) - certainly the Commonwealth would have power to protect them, but it would be very clear that they do not spring into life like the goddess of wisdom with section 52(ii) hanging around their necks because they are not 52(ii) transferred departments and we ask, “Why the distinction that 52(ii) draws?” The answer is that its primary subject matter is the transferred departments, not the merged federal department to which they became.

The balance of that passage on page 571, we would submit, is correct and, we would submit with respect, is inconsistent with the reasoning of Justices Kirby and Samuels in Dao’s Case and is to be preferred having regard to the matters to which we have drawn attention.  One feels diffident challenging a judgment, as it were, straight on and, in fact, inviting your Honour Justice Kirby not to follow your earlier decision and in due course I will be asking your Honour Justice McHugh not to do likewise.  In Megarry’s Miscellany-at-Law at page 314 there is a passage from an American case where a Justice Bronson said that:

“There is nothing in the nature of the thing which makes it improper for a judge to sit in review upon his own judgments.  If he is what a judge ought to be - wise enough to know that he is fallible, and therefore ever ready to learn; great and honest enough to discard all mere pride of opinion, and follow truth wherever it may lead; and courageous enough to acknowledge his errors - he is then the very best man to sit in review upon his own judgments.  He will have the benefit of a double discussion.  If right at the first, he will be confirmed in his opinion; and if wrong, he will be quite as likely to find it out as anyone else.”

With great respect, I read that passage.

KIRBY J:   Last week in Zickar I revealed error in a decision of mine in the Court of Appeal.

MR MASON:   Your Honours, in paragraph 13 of our outline, we have endeavoured to summarise, as it were, to engage in the reasoning in Dao’s Case and to put the submission why that case should not be followed.  That deals with what is loosely called the transition problem, but there are two other reasons why 52(ii) does not assist in this present case.  The first is the simple one, that the DHA is not a department.  Even if 52(ii) is to be read as dealing with Commonwealth departments rather than transferred State departments, the DHA is not a Commonwealth department.  Now it might have been, but the fact is the federal Parliament chose not to conduct this activity through a Commonwealth department, and one knows from section 64 how Commonwealth departments are established, and that is by proclamation of the Governor-General.  We know that the DHA was established by statute of Parliament and that it is quite distinct from the department, because there are references in the Act itself drawing the distinction at sections 5 and section 60.

McHUGH J:   But does it really matter much in this case?  The real question is whether there is a matter relating to a department that we do know exists.

MR MASON:   Well, it might be possible to posit a federal law which, although it does not address a department, is a matter relating to a federal department and, therefore, within the realm of exclusive federal competence.  But I do submit there are two distinct points; that if one is asked to characterise the State law and to say, “Is this a law with respect to the Commonwealth Department of Defence?”, in its application in the present case, the answer is clearly no, because the Commonwealth Department of Defence is not the lessee of this transaction, and that is because the federal Parliament have chosen to do it that way.

The second, and I submit distinct issue, is the characterisation one which we address at paragraph 15 and following. Our submission is that even if we fail on the transitional issue, the subject matter of section 52(ii) is something narrower that Defence. It must be something along the lines of what Justice Starke said in Carter’s Case was the administrative control of the department.  Our submission is that the activity of the DHA - let it be assumed it is a department - in acquiring premises for the purpose of Defence personnel and others, is not fairly within the subject matter of 52(ii); that one has to give some meaning to the words “relating to any department of the public service” and the contrast between 51(v) or (vi) relating to Defence.

We invoke Justice McTiernan’s words - they are set out at page 7 of our outline - in the application in Carter’s Case, because both Justice McTiernan and Justice Latham held that 52(ii) did not invalidate State legislation relating to the supply of eggs for Defence purposes.

Here we in fact agree with Mr Ellicott that an army marches on its stomach.  If that principle was not good enough to bring the supply of eggs

to the Defence personnel within 52(ii), how can the supply of houses to Defence personnel be closer?  So, on that third principle, the characterisation principle of construing 52(ii) and applying it to the State law in question, it cannot be fairly characterised as a matter relating to departments.  The mere fact that it affects the department is not enough to give it that character.

BRENNAN CJ:   Yes, thank you, Mr Solicitor.  The Court will adjourn until 10.15 tomorrow morning.

AT 4.17 PM THE MATTER WAS ADJOURNED
UNTIL WEDNESDAY, 4 DECEMBER 1996