Maurici v The State of South Australia - [2008] SASC 145

SUPREME COURT OF SOUTH AUSTRALIA
(Civil: Application)
MAURICI & ANOR v THE STATE OF SOUTH AUSTRALIA
[2008] SASC 145
Reasons of Judge Burley a Master of the Supreme Court
3 June 2008
CONSTITUTIONAL LAW
Representative action - group of ratepayers seeking declaratory relief - whether provisions of State Constitution and Act of Parliament invalid - inherited law at time of settlement of Colony of South Australia - whether State Parliament has power to change inherited law.
The Constitution Act 1934 (SA) Sections 5 and 64A; Local Government Act 1999 (SA) Chapter 10, referred to.
Grace Bible Church v Reedman (1984) 36 SASR 376, applied.

MAURICI & ANOR v THE STATE OF SOUTH AUSTRALIA
[2008] SASC 145

JUDGE BURLEY: This is an application by the defendant for summary judgment that the proceedings be dismissed. The defendant relies upon Rules 193 and 232 of the Supreme Court Civil Rules 2006. The first Rule provides that the Court may dismiss proceedings if the pleadings disclose no reasonable cause of action or if the proceedings are frivolous, vexatious or an abuse of process. The second Rule relied upon enables the Court to give summary judgment where, if the applicant is a defendant, “there is no reasonable basis for the claim against the applicant”.
The defendant pursues the application by reference to the pleadings. Specifically, for the purposes of the application only, the defendant accepts the accuracy of relevant factual assertions made in the statement of claim.
The plaintiffs bring the action as a representative action pursuant to R 80. They are the registered proprietors of land at Aberfoyle Park. They bring the action on behalf of “a group people who are respectively also ….. owners of land situated within numerous local government Council areas in the State”. The plaintiffs’ property is situated within the local Council area known as the City of Onkaparinga. Paragraph 4 of the statement of claim pleads generally that the City of Onkaparinga is a body corporate “purportedly” established pursuant to the provisions of the Local Government Act 1999 (“the LGA”). The defence of the defendant is more specific. By paragraph 2 of the defence, the defendant pleads:
(2)Says in response to paragraph 4 of the statement of claim, that the City of Onkaparinga was established in 1997 pursuant to the Local Government Act 1934 (SA) and was continued for the purposes of the Local Government Act 1999 (SA) by s 12 of the Local Government Implementation Act 1888 (SA).
The plaintiffs seek declaratory relief in relation to the LGA, namely that Chapter 10 is beyond the power of Parliament and is invalid. It is common ground that the Act was passed by the Parliament of the State of South Australia invoking the powers conferred upon Parliament by s 64A of the Constitution Act 1934 (SA) (“the Constitution”) in respect of which declaratory relief is also sought.
Between paragraphs 6 and 21 of the statement the plaintiffs make a number of assertions which for the most part are assertions of law. The defendant correctly identifies, in paragraph 4 of the defence, that those paragraphs do not plead material particulars of fact. Rather the paragraphs set out the legal argument which, the plaintiffs’ contend, lead to the granting of the declaratory relief referred to in Part 2 of the statement of claim, namely:
The orders sought are:-
AA declaration that s 64A of the Constitution is invalid and of no force and effect; or in the alternative
Ba declaration that Chapter 10 of the [LGA] is beyond the power of Parliament and is invalid; or in the alternative
Ca declaration that local government Councils in South Australia may only levy and recover rates in accordance with the Rating Principles.
At the hearing of the defendant’s application, Mr Wait appeared as counsel for the defendant and Dr Walsh as counsel for the plaintiffs. As I understand it, Dr Walsh, in response to the submissions of Mr Wait, sought to make out as matters of law the various propositions contained in paragraphs 6-21 of the statement of claim. I think it appropriate to set out those paragraphs, so that the respective submissions of counsel may be better understood:
6At all material times Parliament was subject to and had powers and functions conferred upon it by, inter alia, sections 5 of The Constitution Act, 1934 (the New Constitution).
7The powers and functions of the Parliament could not and did not exceed those possessed by the Legislative Council pursuant to the Imperial Act 13 and 14 Victoria, entitled “An Act for the Better Government of Her Majesty’s Australian Colonies” 1850.
8The powers and functions of the Parliament could not and did not exceed those possessed pursuant to the Constitution Act 1855 (the Original Constitution).
9At all material times the Parliament relied upon Section 64A of the New Constitution to enact and purportedly pass the Act referred to in paragraph 4 above.
10By the Act a local government council is given the power, inter alia, to fix and levy rates assessed upon land and persons (which rates are in reality taxes) and to recover such taxes from the owners of land within the boundary of each local government council area within the State.
11The State is subject to British laws including the Australian Courts Act 1828, the Colonial Laws Validity Act `1856, and the Act for the Better Government of Her Majesty’s Australian Colonies 1850.
12The system of local government as established pursuant to the Act referred to in paragraph 4 above did not exist at the time the British Colony of South Australia became a State as a consequence of the federation of the Australian colonies following the enactment of the British Colony of the Commonwealth of Australia Constitution Act 1900 (63 and 64 Vict) (the Commonwealth Constitution).
13Apart from the limitations referred to in paragraphs 7 and 8 above the Parliament and the State are constrained by the Commonwealth Constitution and are limited by Chapter 111 and Sections 106 to 109 of the said Commonwealth Constitution.
14In 1900 the system of local government and the powers of local government councils to levy and recover rates from land owners was based upon the system of local government in force at the time of the Commonwealth Constitution.
15This system referred to in paragraph 14 above was itself based on the system of local government of the United Kingdom of Great Britain and Ireland the United Kingdom) in force at the time of settlement of the British Colony of South Australia (Settlement).
16The principles upon which local government councils in the United Kingdom levied rates at the time of Settlement of the Colony of South Australia was to recover rates for actual costs incurred by such councils in supplying and maintaining roads and public ways within its own local government area (“Rating Principles”).
17At the time of Settlement and further in 1900 local government councils and their activities and charges were subject to review on all matters by the courts of common law.
18Further to paragraph 17 above the local government councils have since 1995 subject to the Trade Practices Act 1974 (Commonwealth).
19All courts including State courts exercising jurisdiction pursuant to paragraph 18 above do exercise federal jurisdiction.
20By Chapter 10 of the Act referred to in paragraph 4 above Parliament purported to invest Councils with powers to levy and recover rates and taxes which exceeded the Rating Principles and was therefore beyond the power of Parliament and invalid.
21The incorporation and recognition of local government as enacted pursuant to the Act by the Parliament into the Commonwealth Constitution has been expressly rejected at referendums in both 1974 and1998.
Each counsel filed an outline of argument. Mr Wait, in his oral submissions, developed the points referred to in the outline.
Section 64A of the Constitution is as follows:
(1)    There shall continue to be a system of local government in this State under which elected local bodies are constituted with such powers as the Parliament considers necessary for the better government of those areas of the State that are from time to time subject to that system of local government.
(2)    The manner in which local governing bodies are constituted, and the nature and extent of their powers, functions, duties and responsibilities shall be determined by or under Acts of the Parliament from time to time enforced.
(3)    No Bill by virtue of which this State would cease to have a system of local government that conforms with subs (1) of this section shall be presented to the Governor for assent unless the Bill has been passed by an absolute majority of the members of each House of Parliament.
Chapter 10 of the LGA deals with rates and charges on land which may be levied by local councils.
Paragraph 16 of the statement of claim contains factual assertions about the existence of a system for the recovery of rates by local councils in the United Kingdom at the time of the settlement of the colony of South Australia. For the purposes of this application, the defendant accepts the factual assertions inherent in paragraph 16.
It is the plaintiffs’ contention that the Rating Principles became part of the inherited law of the Colony of South Australia at the time of settlement and that the State legislature established by the Constitution does not have the power to alter that inherited law. This is asserted in paragraph 20 of the statement of claim which is to the effect that Chapter 10 of the LGA purported to invest local councils with powers to levy and recover rates and taxes which exceeded the Rating Pprinciples and to that extent was beyond the power of Parliament and therefore invalid.
Rule 232.
Mr Wait referred me to the decision of Bleby J in JT Nominees Pty Ltd v Macks (2007) 97 SASR 471 where his Honour dealt with how Rule 232(2)(b) was to be interpreted. His Honour concluded that the words “no reasonable basis for the claim” should be given their ordinary meaning. To apply phrases used in relation to Rule 25 of the Supreme Court Rules 1987 such as “manifestly groundless” and “does not admit a reasonable argument” or “cannot succeed on any view of the facts or law” are likely to distract attention from the proper test to be applied. His Honour specifically said that the requirements of Rule 232(2)(b) are less stringent than the requirements of 25.04 of the 1987 Rules.
It was the defendant’s submission that that there was no reasonable basis to the plaintiffs’ claim that s 64A of the Constitution and Chapter 10 of the LGA were invalid as being beyond the power of the State Parliament. His argument was founded upon s 5 of the Constitution Act 1934 (SA) which provides:
The Legislative Council and House of Assembly shall have and exercise all the powers and functions formerly exercised by the Legislative Council constituted pursuant to s 7 of the Act of the Imperial Parliament, 13 and 14 Victoria, Chapter 59, entitled ‘An Act for the better Government of Her Majesty’s Australia Colonies’.
The Imperial Act referred to in s 5 is called the Australian Constitutions Act 1850, s 14 of which provides:
14The Governors of the said colonies of …… South Australia ….., with the advice and consent of the Legislative Councils to be established in the said colonies under this Act, shall have authority to make laws for the peace, welfare and good government of the said colonies …..
It was common ground that it was this power which was conferred upon the Legislative Council and House of Assembly by s 5 of the Constitution. The extent of the power has been the subject of many decisions which are collected at footnote 2 in Selway The Constitution of South Australia Chapter 5 at page 63. Mr Wait referred in particular to one of the decisions cited at that footnote, Grace Bible Church v Reedman (1984) 36 SASR 376 at 383-384, per Zelling J, and 390 per Millhouse J.
Zelling J said (at 383):
Mr Shelley’s last point was that the law which impinges upon the inalienable right of freedom of religion and religious instruction is outside the power of the State to legislate for the peace, order and good government of South Australia. The plenitude of power enjoyed by the Parliament of a colony, or now of a State, was discussed many years ago in a trinity of cases which are always referred to on this topic: The Queen v Burah; Hodge v The Queen and Powell v Apollo Candle Company [citations omitted]. Those cases show conclusively that the powers of the Parliament of a State are the same as those of the Imperial Parliament, except for constraints of extraterritoriality, and in Australia for such constraints as may arise by reference to s 109 of the Commonwealth Constitution or any other constitutional prohibition applying to the Parliaments of the States. I cannot see that this State either inherited, or has ever created, an inalienable right of religious freedom of education, nor if it had, that such a right could not be invaded by an act of Parliament of the State.
Mr Wait, for the purposes of the application, has conceded that the Rating Principles as set out in the statement of claim form part of our inherited law, but he relied upon Zelling J’s statement that such principles could “be invaded by an act of Parliament of this State”.
In paragraph 6 of his written outline of submissions, Mr Wait referred to the plenary power of the State legislature and contended “[t]his power was confirmed by s 2(2) of the Australia Act 1986 (SA). The plaintiff’s response to that aspect of the defendant’s argument was that the Australia Act 1986 is invalid for a number of reasons including the fact that it is in conflict with the Constitution of the Commonwealth of Australia. Such an argument raised the requirement for notices under s 78B of the Judiciary Act 1903 (Cth) to be given. Mr Wait, in his submissions in reply, obviated this necessity by not relying upon the provisions of the Australia Act 1986 and by accepting, for the purposes of this application, that the plaintiff’s contention that the Act was invalid as accurate.
The Plaintiffs’ submissions.
I now turn to the plaintiff’s submissions. Dr Walsh referred in his outline of submissions to the procedural requirements of the application. He relied on well-known authorities such as Dey v Victorian Railways Commissioner (1949) 78 CLR 62 and General Steel Industries Inc v Commissioner of Railways NSW (1964) 112 CLR 125. Those authorities, however, are applicable to the procedural rules relating to summary judgment prior to the 2006 Rules. It is clear from the decision of Bleby J in JT Nominees Pty Ltd (supra) that the old authorities, which set a more stringent test, do not apply to the new rules.
At paragraph 5 of his written submissions, Dr Walsh stated that the plaintiffs would bring evidence to the effect that the South Australian Parliament does not have plenary or absolute power and cannot legislate to grant such powers to local councils. This submission would only have force if there was before the Court a pleading which set out the material facts said to support such a contention. There is nothing like that in the pleading, nor was any application made by the plaintiffs to adduce affidavit evidence at the hearing of the application. Provided that it is admissible, affidavit evidence may be admitted on an application for summary judgment, if only to serve the purpose of demonstrating that there are material disputes of fact between the parties which preclude a summary determination. No application was made to adduce evidence by the plaintiffs.
Paragraph 6 of the plaintiffs’ written outline refers to the Australia Act 1986. I have already dealt with this aspect of the matter.
Paragraph 7 of the written submission confirms what I said about the statement of claim at the commencement of these proceedings, namely that many of the paragraphs between paragraphs 6 and 21 of the statement of claim set out the plaintiffs’ argument in support of their contention that the declaratory relief ought to be granted.
Paragraph 6 of the statement of claim refers to s 5 of the Constitution which I have set out above. The plaintiffs rely on this section as defining the powers of the State Parliament. The defendant accepts that the powers and functions of Parliament could not exceed those of the Legislative Council as referred to in s 5.
There is then a reference to the Constitution Act 1855 but that is not material because the defendant accepts that the extent of the State Parliament’s powers (and the extent of any limitations on its powers) is to be found in s 5 of the Constitution.
Paragraph 9 refers to s 64A of the Constitution which I have set out above. The remainder of the paragraphs are to the effect that the Rating Principles formed part of English law as at the time the colony of South Australia was established and that they formed part of the inherited law of the colony, and thereafter the State. As such, it was contented, the State legislature did not have power to change that inherited law.
It seems to me that the contention advanced by the plaintiffs is a variation on a theme first established by Boothby J in the early days of the Supreme Court of the then Colony. The erroneous views applied by Boothby J were set to rest by the passing of the Colonial Laws Validity Act 1865.
I accept that the contentions advanced by the plaintiffs in their statement of claim raise a different point, namely that the State legislature does not have the power to change inherited law. In my opinion, based on the authorities cited by Mr Wait, an example of which is Grace Bible Church v Reedman (supra), the contention of the plaintiffs is clearly wrong. The power conferred on the South Australian Parliament by s 5 of the Constitution Act 1934 is a plenary power subject to limitations which do not apply to this case. It was clearly within the legislative competence of the Parliament of South Australia to enact s 64A of the Constitution and in turn to enact Chapter 10 of the LGA. Nothing put by the plaintiffs either in the written outline of submissions or in the oral submissions advanced by Dr Walsh at the hearing detract from that conclusion.
Dr Walsh said (T 32.10 et seq):
What is submitted in brief that the Parliament of South Australia has got the power to provide for the peace, order and good government of South Australia provided it meets, if required, the manner and form provisions that it does not have the power to change the inherited law, and secondly it does not have the power to set up another system of government subservient or inferior to itself with the power to tax citizens of the State.
The plaintiffs do not contend that the provisions which it says are beyond the legislative competence of the State Parliament are invalid because of the failure to follow manner and form provisions contained in previous legislation.
At one stage, during the course of submissions, I thought that Dr Walsh was advancing the proposition that the State legislature did not have power to set up a subsidiary form of government in the form of local government under the LGA. If that were the case, it was not something that was raised in the statement of claim. However, Dr Walsh later explained (T 34) that it was not the plaintiffs’ contention that there was no power to establish local government. The limitation pursued by the plaintiffs was that, if local government was set up, its revenue raising powers could go no further than what was provided for in the inherited law, namely the Rating Principles.

During the course of his oral submissions, Dr Walsh referred to the decision of the High Court in Kable v Director of Public Prosecutions (1996) 189 CLR 51. That case involved constitutional limitations in relation to the exercise by State courts of Federal jurisdiction and the power of the State Parliament to confer functions incompatible with the exercise by the State courts of Commonwealth judicial power.
He submitted (T 37.44):
…… that proceedings in courts have to meet the requirements of Chapter III of the Constitution; that is, that the courts are locked in time, as it were, to what the courts were in 1900 and that the judicature section of the Constitution recognises the State courts are given, under the Constitution, power to exercise Federal jurisdiction.
He later said (T 38.10):
In relation to control of government, it must be in accordance with what was the position in 1900 and that’s the essence of what we say in relation to the rating principles: that unless there is a fundamental change, local government is constrained to what it was in 1900.
Again, he said (T 38.19):
There needs to be a constitutional change to say “we are setting up a third tier of government with the power to run businesses and act like a government, rather than just an entity that keeps the streets clean and looks after the local area”. That, in essence, is what the complaint is and that’s why this representative group of people have come to court, to say “we want local government curtailed to what it was, what was intended”.
In my opinion, such a concern on the part of the plaintiffs and the persons they represent may only be resolved in a political way. The legal arguments advanced to support the contention that the relevant legislation was beyond the powers of the State Parliament are without foundation. In my opinion, the defendant has made out a case for dismissal of these proceedings under Rule 232 and Rule 193. No reasonable cause of action has been disclosed in the pleading., Insofar as Rule 232 is concerned, this translates into a finding that there is no reasonable basis for the claim against the applicant.
If this matter proceeded solely in pursuant to Rule 193, consideration would have to be given to whether or not the defect in the pleading could be remedied by amendment. In my opinion, the defect is fundamental and could not be remedied by amendment. Consequently an order may be made pursuant to Rule 193 dismissing the action.
When the discretion arising under rule 232 is concerned, it is also clear that the proceedings should be dismissed. When asked why both Rules 193 and 232 were relied upon by the defendant, Mr Wait explained that reliance on Rule 193 was a fallback position in case the Court considered that a summary judgment under Rule 232 was inappropriate. He argued, correctly in my view, that if the proceedings were dismissed under Rule 232, res judicata would apply, but that would not necessarily arise if the order were confined to the powers conferred by Rule 193.
In my opinion there should be an order for dismissal of the proceedings pursuant to Rule 232(1). I will hear the parties as to costs