McCloy & Ors v State of New South Wales & Anor

[2015] HCATrans 142

[2015] HCATrans 142

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S211 of 2014

B e t w e e n -

JEFFREY RAYMOND McCLOY

First Plaintiff

McCLOY ADMINISTRATION PTY LIMITED

Second Plaintiff

NORTH LAKES PTY LIMITED

Third Plaintiff

and

STATE OF NEW SOUTH WALES

First Defendant

INDEPENDENT COMMISSION AGAINST CORRUPTION

Second Defendant

FRENCH CJ
KIEFEL J
BELL J
GAGELER J
KEANE J
NETTLE J
GORDON J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON THURSDAY, 11 JUNE 2015, AT 10.15 AM

(Continued from 10/6/15)

Copyright in the High Court of Australia

____________________

FRENCH CJ:   Yes, Mr Solicitor.

MR DONALDSON:   If your Honour please.  Your Honours, in dealing with the second Lange question it is important, in our respectful submission, to deal with the issues that arise in sequence.  The first step in the sequence, of course, is determining what the purpose of the impugned legislative provisions are and, secondly, whether those purposes are legitimate in the sense in which legitimate is used. 

Your Honours, prior to oral submissions, it occurred to us that there was really no issue in respect of this particular matter here for this reason.  New South Wales had proffered what it contended to be the purpose of this legislation, and that is at paragraph 8 of its written submissions, which was the purpose of the legislation which was found to exist in Unions NSW as Justice Kiefel observed yesterday.  So, that was the purpose that was proffered and the question then is whether that purpose is legitimate and the following – and the other inquiries follow. 

During the course of oral submissions yesterday there were various other purposes suggested or contended for.  Can I make this observation, your Honours?  It is a risky course for any party to determine what the purpose of impugned legislative provisions are, as it were, on the run, or for others to seek to restate what the purpose contended for by those defending the legislation is.  There are a number of reasons for that, the most obvious is, of course, the purpose of provisions such as this can be stated with almost infinite variety.

It is for the party defending the legislation to state what it contends is the purpose.  If there is no rational connection – I will come back to what that means – or if there is no obvious link between the contended for purpose and the practical operation of the legislation, that is, if the Court cannot discern that purpose, then you have a position such as Unions NSW and the inquiry simply stops there. 

The process is not, in our respectful submission, to try and work out a better purpose or a more accurate purpose or another purpose than that contended for by the party seeking to defend the validity of the legislation.  If we are wrong in that, your Honours, there were various purposes contended for, or ventilated, during oral submissions yesterday.  We have set out one or two of them in our outline.

BELL J:   Mr Solicitor, can I inquire, when the issue is the validity of legislation and the determination of that issue turns on considerations of statutory purpose, your submission is the Court is bound by the conduct of the party defending validity?

MR DONALDSON:   It would be a rare occasion in which it was not, your Honour, if I could put it that way, and the Court responding to – I am sorry, I think I cut across your Honour there.

BELL J:   No, not at all.

MR DONALDSON:   But the Court responding to a contended for purpose that the Court concludes is simply not open, having regard to the practical operation of the legislation, simply says, as this Court did in Unions NSW, we simply do not see that purpose reflected in the legislation.  If I am wrong on that, your Honour, we are happy to deal with the purposes ‑ ‑ ‑

BELL J:   It seems a somewhat surprising position against a background that the Court is not bound on questions of law by the ‑ ‑ ‑

MR DONALDSON:   No, your Honour, but one assumes, with respect, that if New South Wales comes before your Honours and says, well, this is the purpose of our legislation, then that is the purpose of their legislation.  If the Court cannot discern the giving effect to that purpose in that legislation, then the Court deals with such a submission in the way the Court did in Unions NSW.

BELL J:   It is a question of law, is it not?

MR DONALDSON:   It is, your Honour.  One of the other difficulties with it, of course, is if the Court comes up with its own version or its own formulation of purpose and that formulation of purpose, of course, cascades through to the other inquiries but, in our submission, your Honour, it would be a rare circumstance that the Court would not accept the articulation of purpose proffered ‑ ‑ ‑

FRENCH CJ:   By the Executive Government of New South Wales?

MR DONALDSON:   In relation to its own ‑ ‑ ‑

FRENCH CJ:   It is not the Parliament before us.

MR DONALDSON:   Well, in relation to its own statutory scheme which it is defending.

KIEFEL J:   But any party, New South Wales included, cannot state what the purpose of legislation is as a question of law.  It states what it contends for.  In Unions NSW, the Court implicitly accepted the contention.  That is quite different from saying that the Court is compelled to accept it.  It is not.  It cannot proceed upon a false premise in relation to a constitutional matter, which is what you are suggesting, if the purpose contended for by a State is wrong as a matter of statutory construction.

MR DONALDSON:   Well, I am not going to argue with your Honour, as it were, but in relation – if what your Honour says is the course to be followed, it would have been – one might have expected that in a case such as Unions NSW, the Court would have articulated what the actual purpose of the legislation was.

KIEFEL J:   It did.  It accepted the submission put by New South Wales.

MR DONALDSON:   Yes.

KIEFEL J:   But it was not bound to accept it.

MR DONALDSON:   Well, your Honours, can I ‑ ‑ ‑

KIEFEL J:   What do you say about purpose, in any event?  Instead of telling us what we are bound to do, perhaps you could tell us what the purpose is.

MR DONALDSON:   Well, we say the purpose is that contended for by New South Wales, your Honour, in this case.

KIEFEL J:   Yes.

MR DONALDSON:   In relation to the different matters that came up in relation to purpose yesterday, we have set out certain of those as we understood them to come from various members of the Bench.  Justice – I hope I am not verballing your Honour Justice Bell in articulating what we heard from your Honour yesterday.  If that is the purpose of the legislation, which we have set out in our oral outline, then clearly, with respect, that is a valid legislative purpose.

We have also sought to deal with Justice Nettle’s observations yesterday as well.  As we understood Justice Nettle’s articulation – your Honour Justice Nettle’s articulation of purpose, really in response to submissions from my learned friend, Mr Bennett, one of them was that the purpose is:

to preclude property developers from stating their political views.

We say, your Honour, that could not be the purpose, or is not the purpose, of this legislation because, of course, property developers are perfectly at liberty to express their political views in any way that they wish.

FRENCH CJ:   You should understand, of course, that what is put from the Bench are not articulations of positions.  They are testing propositions.

MR DONALDSON:   I understand that, your Honour, and I am simply dealing with those testing propositions, particularly on the understanding that the Court is free to determine its own purpose of this legislation.  It may have been that what we have set out in the oral outline misstated Justice Nettle’s observations yesterday and what his Honour really had in mind was that the purpose is to preclude classes of persons who are – I think your Honour’s expression was disliked or unliked – from stating their political views.  Well, again, this legislation does not have the effect of precluding the statement of political views at all.

Even if the purpose of this legislation could be understood as precluding or limiting classes of persons who are disliked or unliked from making political donations, even if that were the purpose, your Honours, there would not be any real issue in this matter because there has not been ‑ my learned friend, Mr Bennett, has expressly disavowed the contention that the making of a political donation is communication in itself.  That case has never been put and has been expressly disavowed so the Court, in our respectful submission, cannot proceed on the basis that what is being contended for here is the effect on communication is the preclusion from communicating by means of making a political donation.

Again, your Honours, if it is sought to reformulate the purpose of this legislation in line with my learned friend, Mr Bennett’s submissions, which I think go more to burden but I will deal with them in this context as well – what my learned friend might say is the purpose is of limiting or excluding corporate property developers from paying money to a parliamentarian or candidate so as to gain access for the purpose of influencing that parliamentarian or candidate; of course, what my learned friend Mr Bennett would say is that that is an illegitimate purpose.

That is, in the sense that it is incompatible with the system of representative and responsible government established by the Constitution. In our submission, your Honours, one simply has to articulate that to understand its falsity. So, in our submissions, your Honour, on the basis of the purpose articulated by New South Wales that, for the reasons I have dealt with should be, with respect, accepted and that is, in our submission, plainly legitimate.

Your Honours, we have a heading in our outline of submissions and we dealt with it in our written submissions of this notion of “rational connection”.  The only point we wish, your Honours, to make about that is we do not understand it to be the consequence of various of the judgments in Tajjour, referring back to passages in Unions NSW, and it is principally in the joint judgment of Justices Crennan, Kiefel and Bell at the paragraphs I have outlined there, that this notion of rational connection is, as it were, a separate step in the process.  In the way in which it was used in Unions NSW, this terminology, it was used simply for the purpose of explaining that there was no link, as it were, between the articulatible stated purpose and the practical operation of the legislation.  So, in our respectful submission, your Honours, the impugned provisions, or the purpose of the impugned provisions are legitimate.

The next aspect of the sequence or the next step in the sequence, of course, your Honours, is whether that purpose – that legitimate purpose is reasonably appropriate and adapted or proportionate.  In this case, your Honour, as in pretty much most of these cases, that issue really boils down to whether the party contending invalidity can establish that there are other less drastic equally practicable and available means that are obvious and compelling of achieving that legitimate object.

That is a rather clunky formulation that we have drawn from judgments in Monis and in NSW and we have given your Honours the references there in Unions NSW; it was from the joint judgment and in Monis from the joint judgment of Justices Crennan, Kiefel and Bell.  In our written submissions, your Honour, we also spent some time with this notion of margin of appreciation or deference and that is where that issue comes into the Lange steps.  

KIEFEL J:   Where does it come in in the Lange steps?

MR DONALDSON:   It comes in, as we understand it, your Honour, at that step, that is, that the Court should provide to the legislature a margin of appreciation in respect of the means that it has adopted.  Your Honours, in our respectful submission, that issue of means of appreciation or judicial deference pretty much falls away as a discrete issue having regard to the formulation of obvious – or the formulation that I have articulated in relation to alternative ‑ ‑ ‑

FRENCH CJ:   Well, you say it is subsumed in the notion of obvious and compelling in the threshold that that sets.

MR DONALDSON:   We do, your Honour.  So, the issue – and I think your Honour’s word is the best word; it is subsumed within really the bar of obvious and compelling.  In relation to the height of that bar, your Honours, could we direct your Honours – if your Honours would not mind turning up Tajjour (2014) 88 ALJR 860 and at page 876, paragraph [36] in the judgment of the Chief Justice – and Justice Keane has said the same thing to the same effect in various judgments. Your Honours, we urge this paragraph upon the Court:

The cautionary qualification that alternative means be “obvious and compelling” ensures that consideration of the alternatives remains a tool of analysis in applying the required proportionality criterion.  Courts must not exceed their constitutional competence by substituting their own legislative judgments for those of parliaments.

So again, your Honours, I think, in our respectful submission, that states the requirement and the height of the bar that it imposes.  Your Honours, before we go to deal quickly with the alternatives that have been proffered here by the plaintiffs, that they contend are obvious and compelling, could we deal with one further – or a preliminary issue, or a prior issue – and that is the question of whether if a plaintiff can establish that there are other less drastic practicable, obvious and compelling alternatives, is that the end of the inquiry?  Here, your Honours, we apprehend a division of opinion in the Court in Tajjour.  We have in our outline referred your Honours to the paragraphs in the judgment of Justices Crennan, Kiefel and Bell, at paragraph [116].  I can simply read out the short passage, your Honours.  Their Honours said this:

if other means are shown to be available and equally practicable, the impugned legislation has gone further than is reasonably necessary.  It would follow that the legislature has exceeded the limits of its power to make laws which burden the freedom and no further inquiry is necessary.

We understand Justice Gageler to state otherwise at paragraph [152] of his Honour’s judgment, and what his Honour – if your Honours turn that up – what Justice Gageler stated at that paragraph is:

Alternative means of achieving the end which are less burdensome on communication on governmental or political matter have long been recognised as relevant to the inquiry.  But their presence or absence will not necessarily be decisive.  The weight they will be accorded will vary with the nature and intensity of the burden to be justified.

In our respectful submission, if there is a difference in approach, and we apprehend that there is, the statement of principle of Justice Gageler ought be preferred.  We say that, your Honours, for this essential reason.  These issues – all of these Lange issues, your Honours really come to the question of what is the burden that is being placed on communication?  It is all about the practical effect of legislation on political communication.  The lodestone of this, or the principal inquiry, is really as to the extent of the burden.  Even though to get to these questions we have gone through the first Lange question, the first Lange question, your Honours, has really got to the point of not being a question at all, subject to Justice Keane’s view ‑ ‑ ‑

KIEFEL J:   When you say the essential question is, what is the extent of the burden, once you have determined, for instance, that the extent of the burden is quite great, what do you do then?

MR DONALDSON:   Well, if the extent of the burden is quite great, your Honour, there is a very real doubt as to validity.

KIEFEL J:   Well, how do you resolve the doubt?  What test do you apply?

MR DONALDSON:   On the extent of the burden?  That comes to ‑ ‑ ‑

KIEFEL J:   No, no.  You have determined the extent of the burden.  You are left with a doubt about validity.  How do you determine validity?

MR DONALDSON:   Well, your Honour, you ‑ ‑ ‑

KIEFEL J:   There has to be something else that has to weigh against the extent of the burden to provide the justification.  What is it?

MR DONALDSON:   Well, your Honour, you do not get to burden until you have got through these other steps.  So, the Court is not satisfied that there are other ‑ ‑ ‑

KIEFEL J:   No, you said that the essential question is the extent of the burden.  You have come to – by whatever process, you have come to the point where you have to determine what the extent of the burden is.  Is it slight, medium, great?  You say that if it is substantial or great, an onerous burden, undue, as was said in Lange ‑ ‑ ‑

MR DONALDSON:   Then the law is invalid.

KIEFEL J:   If you get to that point, how do you resolve the question of validity?

MR DONALDSON:   Well, it is invalid. 

KIEFEL J:   On that basis alone?

MR DONALDSON:   Well, you have gone through everything ‑ ‑ ‑

KIEFEL J:   That means that there can be no justification.

MR DONALDSON:   Sorry, your Honour.  You have gone through everything else to get there.  We understand that the sequence that ‑ ‑ ‑

KIEFEL J:   But what you are saying is that even if there is a significant burden on the freedom, that there can be no question of a Parliament justifying it, for instance, by saying that the objective – that the purposes of the legislation have such a profound public benefit, public interest, that in this exceptional sphere that it is operating in that the burden might have to be accepted.  You are denying that kind of approach?

MR DONALDSON:   Your Honour, I was expecting that I would be asked about the Commonwealth’s submission at paragraph 33 which is where this issue ‑ ‑ ‑

KIEFEL J:   Well, you are.

MR DONALDSON:   I know I am – which is where this question was really brought to the fore, I will deal with it.  But that is actually a slightly different question than the one I am in fact dealing with here.  I am in fact dealing with the question based on the joint judgment in Tajjour of, well, if you can show an alternative means you do not even get to burden.  Your Honour’s question is, well, if you have got a very ‑ ‑ ‑

KIEFEL J:   Well, no, if you can show that there is an alternative means, the legislation fails at that point, you do not go on to discuss then whether or not there is a further justification that needs to be addressed.

MR DONALDSON:   Well, I just understood what your Honour said ‑ ‑ ‑

KIEFEL J:   Perhaps the problem is your reading of the passage may be somewhat at fault.

MR DONALDSON:   I am sorry, your Honour.  I just understood from paragraph [116] that what your Honour and Justices Crennan and Bell were saying is that if it can be demonstrated that there is a compelling alternative means that is the end of the inquiry.

KIEFEL J:   It is shown that ‑ it then fails the test of proportionality set out in Lange, it fails at that point.  But, on the other hand, if there had been no such means shown, there remains a question whether or not there is a further inquiry in the second limb given rise to by the words “undue” and how one balances the extent of the burden.

MR DONALDSON:   Correct, and then your Honour’s question is to me, if it can be shown that there is an undue burden, is that the end of the inquiry.  That is, does that determine invalidity?

KIEFEL J:   Well, undue burden is perhaps the conclusion.  On the way to the conclusion that it is undue you have to identify the extent of the burden and then identify the factor which might be said to justify the burden.

MR DONALDSON:   Yes.  So let us call it a large effect, or a large burden, for the purposes of this.

KIEFEL J:   Yes.

MR DONALDSON:   No doubt everybody listened with great interest to Mr Gleeson’s answer to your Honour’s question yesterday as to this, that there may be some kinds of legislation in certain historical circumstances or contexts – war – that might give rise to that.

KIEFEL J:   Well, I am sure the Solicitor would forgive me for saying, it is not a novel proposition, it is pretty well established in proportionality analysis.

MR DONALDSON:   No.  I do not know whether it is novel or not, your Honour, but that is what my friend said.  My answer to your Honour’s question is this.  I would like to see legislation of that type.  That is, it is difficult to ‑ ‑ ‑

KIEFEL J:   You mean, you cannot think of an example?

MR DONALDSON:   I find it pretty tough, your Honour.  That is, where there is in your Honour’s and my discourse a large burden, but in any event the law is ‑ ‑ ‑

KIEFEL J:   Time of war, perhaps?

MR DONALDSON:   Yes.  I am not saying no, your Honour; I am simply saying ‑ ‑ ‑

KIEFEL J:   You may be right to the extent that if the burden on the freedom was great, it would be an extraordinary public benefit which could be seen to outweigh it.

MR DONALDSON:   Yes.

KIEFEL J:   But ‑ ‑ ‑

MR DONALDSON:   Well, that is our answer, your Honour.

KIEFEL J:   It is possible.

MR DONALDSON:   Yes, I am not saying it is not possible, your Honour, but it is a pretty hard one to answer without an example in front of ‑ ‑ ‑

KIEFEL J:   But most legislation will not fall into that category.  Most legislation will either have slight effect or ‑ ‑ ‑

MR DONALDSON:   Exactly.

KIEFEL J:   ‑ ‑ ‑ some effect and it will probably be countervailed by other factors within the legislation, which is why they call the process balancing.

MR DONALDSON:   Yes, which is what we understood Justice Gageler to be stating at paragraph [152] and it is obvious we have misread your Honour’s and Justices Crennan and Bell’s judgment in paragraph[116].

KIEFEL J:   I think it is mentioned elsewhere in the judgment that we did not consider that the question of what we understood to be strict proportionality had actually been argued in this Court.  That is why it has not been addressed.

MR DONALDSON:   No.  Well, your Honour said to me in oral submissions during that matter ‑ ‑ ‑

KIEFEL J:   But now we have an argument.

FRENCH CJ:   I was going to ask you if you could just step back for a moment and metaphorically speaking in words of one syllable set out what you say are the steps for the application of the second limb.

MR DONALDSON:   The first question is what is the purpose of the legislation?  The second step is, is that purpose legitimate, which is a paraphrasing of the question is that purpose compatible with the system of representative and responsible government established by the Constitution?  One then asks the next question, are the means adopted by the impugned legislation proportionate to the achieving of that legitimate object or are the legislative means reasonably and appropriately adapted to achieve that legitimate end? 

Subsumed within that question of ends and means, and almost invariably the only question that arises at that stage is the question of whether the party contending for invalidity can establish that there are other practicable, available, obvious and compelling means to achieve that legitimate end.  If that can be shown by a plaintiff, then on any analysis we then go on to the question of whether the burden imposed by the legislation, the burden on political speech, is undue.

FRENCH CJ:   The obvious and compelling alternatives are alternatives which ex hypothesi impose no or a lesser burden?

MR DONALDSON:   They could not be obvious and compelling in the sense used unless that is right, I think, your Honour, and obvious and compelling is to be understood in the way in which your Honour has described it in Tajjour in the passage we have taken your Honours to.

GAGELER J:   The words “less drastic” within the formulation mean a lesser burden.

MR DONALDSON:   Yes, a lesser burden.  I actually left those – I think they were in my initial formulation but in my quick paraphrasing there left them out, but less drastic would put that up undoubtedly, your Honour.

GAGELER J:   Well, does it mean something else?

MR DONALDSON:   No, I do not think so, your Honour.  Because, it is difficult to know what else it could mean – that is, to what else it could be directed – the word “drastic” in that circumstance.

Could I deal quickly, your Honours, then with – although my friend, Mr Kirk, has dealt largely with this so I will not take really any time on it – and they are the alternatives that are proffered here by the plaintiff.  Your Honours, in our submission, it is for the plaintiff, or the party contending for invalidity, to come up with the obvious and compelling alternatives.  We say that largely for this reason.  If the party contending invalidity does not come up with it, it is pretty hard to contend that it is obvious and compelling.  If it is not obvious or compelling to them, it is pretty hard to see that it is obvious and compelling.

What my learned friend has come up with in relation to the property developer ban is that there should only be – what is obvious and compelling is that there should be a prohibition on:

political donations from property developers who have an intention to corruptly solicit favour.

That is in my learned friend’s submissions at paragraph 79.  Our response to that, your Honours, for the reasons that Justice Keane identified yesterday, that is not equally practicable in achieving the same end because that particular intention – or corrupt intention – is a very difficult matter to establish.  So, it is not equally practicable in achieving the end.

Justice Kiefel and, I think, the Chief Justice came up yesterday with – suggested yesterday that – or put to parties another alternative which is simply having caps.  So, the property developer ban goes and there is simply a cap that applies.  There are two things to say about that.  Of course, my learned friend, Mr Bennett, completely disavowed that as an alternative.  So, he did not think it was obvious and compelling.  Secondly, your Honours, if we get into questions like that, that really is making a political judgment in this case.  What cap?  On whom?  Is the cap of whatever the monetary limit is ‑ ‑ ‑

FRENCH CJ:   Well, that is just another way of saying it is not obvious and compelling.

MR DONALDSON:   Perhaps, your Honour, it is.  I think that is what we do say.  It is just not obvious and compelling.

FRENCH CJ:   It is not a unique solution which presents itself immediately because the answer that was put to me, I think, by the Solicitor‑General for New South Wales, was that there are a number of variables involved which inform the judgment as to whether you put it on local government or not, for example.

MR DONALDSON:   Yes.

FRENCH CJ:   That seems to be the nature of the response I am getting.

MR DONALDSON:   That is right.  Your Honour, I think we could say this.  It is another solution.  It might even be, for some people, a better solution but it is not obvious and compelling having regard to what that means in this formulation, in our submission.  So, your Honours, in our respectful submission in this matter, the plaintiffs have not demonstrated an obvious and compelling alternative.  Therefore, the impugned provisions are proportionate or reasonably appropriate and adapted to achieve the legitimate legislative purpose. 

Then, your Honours, we come to the question – the final issue in the sequence, or question in the sequence, as to whether there is undue or unjustified burden.  Your Honours, in some respects this can be seen as a sort of a quantitative type requirement.  But, your Honours, there can be no doubt that, for instance, the preclusion of a single individual from engaging in political communication could be an undue burden.

We do not doubt that.  If what is sought to be done is to quieten a person from expressing – an individual person – from expressing a particular matter, we do not say that that is incapable because it only affects directly one person of being an undue burden.  We do not say that at all.  But, your Honours, the question when we come to burden is not as my friend, Mr Bennett, would have it.  We look at what effect this has on his client, or on property developers who want to make donations, or even on people who want to make larger donations on the cap.

The question of burden is on political communication, entrenched – in the way that that derives from sections 7 and 24 of the Constitution. Your Honours, we have not put it in our outline, but that proposition about the burden being properly understood as being on political communication and not on an individual or a right of an individual, that is dealt with in Tajjour – most recently in Tajjour – and I can simply say to your Honours in Justice Hayne’s judgment, it is at paragraph [91], and in the joint judgment of Justices Crennan, Kiefel and Bell at paragraph [133].  I know your Honour Justice Gageler dealt with it as well, I simply do not have a note of your ‑ ‑ ‑

GAGELER J:   I remember.

MR DONALDSON:   Yes.  Now, your Honours, in relation to burden, can I say this in relation to the property developer’s ban.  The plaintiffs do not contend in this matter that donation making is a form or means of political communication.  It might have been an interesting case if they had, but they do not.  So, that matter is affected – has no effect on political communication if that is the contended for communication.  It is also not put in this case, as it was in Unions NSW, that the effect of this legislation is – the effect on political communication of this legislation is on the capacity of donees to engage in political communication, as it was in or as it was contended to be in Unions NSW.

So what my learned friend says the burden is, can I also say, your Honour, in relation to the caps donation, again, because there is no contention as to donation making being communication, that falls away, and your Honour, there is nothing to sustain a finding that because of the donation cap, there will be fewer donations made or lesser quantum of donation.  So, again, it cannot be suggested that the donation cap has any effect upon the capacity of political parties or parliamentarians or candidates to engage in the political process. 

In relation to both the property developer ban and the donation cap, your Honours, neither of those, in our respectful submission, impede a property developer or any person from communicating with members of political parties, parliamentarians, candidates or electors.  They are perfectly entitled to ring them up and say to them whatever they wish.

The property developer prohibition, your Honours, does not impede members of political parties, parliamentarians or anybody else from speaking with property developers.  You can speak to any property developer they wish and, your Honours, the donation cap has no effect upon the capacity of a donor, non‑donor or donee to communicate with anybody about anything.

GAGELER J:   Mr Solicitor, if we do not infer that the donation cap limits the funding available for political candidates and parties to engage in political communication, how do we get through the first limb of Lange, in your submission?

MR DONALDSON:   I am not sure you do get through the first limb of Lange, your Honour.  I have not addressed the first limb because it was conceded.

GAGELER J:   I just do not know how you can be talking about less drastic means, how you can meaningfully engage in a second limb analysis without working out what the burden on the freedom is.

MR DONALDSON:   Your Honour, the burden contended for here – I am essentially saying these are not burdens as – these are not put as burdens.  Of course, what is put as the burden here by my learned friend is that what these limitations do is limit the capacity of, well, corporate property developers, who are not voters, accessing and having the opportunity to seek political influence with politicians.  That is the burden which is put here. 

As my learned friend, Mr Gleeson, said yesterday, it is put with disarming directness, your Honours, that that is the burden.  So, that is the burden which the Court has to consider that that is affected.  Of course, your Honours, underlying that proposition is this proposition, or is two sub‑propositions, if you like.  One is that donations buy access and influence and, secondly, the more you pay the more access you get and the more influence you have. 

Now, your Honours, it can readily be accepted that consequences – the consequences which my friend has set out, flow from this legislation.  That is, those who wish to pay lots to get lots of access and lots of influence cannot do that through donation making.  The question is whether that is a burden on political communication.  In our respectful submission ‑ ‑ ‑

FRENCH CJ:   Just before you get to that, in 15 second dot point you say there:

It is not put that the ban affects “the funds available to political parties –

MR DONALDSON:   Yes.

FRENCH CJ:   I am just looking at paragraph 16 of the plaintiff’s written submissions.  They seem to adopt the burden identified in Unions NSW.

MR DONALDSON:   Sorry, your Honour, I must have misunderstood that.  Well, can I say, your Honour, if that is the case there is nothing – there is no basis for your Honours to actually conclude that here. 

GAGELER J:   Is it not conceded?

MR DONALDSON:   Sorry?

GAGELER J:   I thought it was conceded, perhaps even on the pleadings.

MR DONALDSON:   Well, there you go. 

BELL J:   It is conceded on the pleadings. 

MR DONALDSON:   I withdraw that submission, your Honours.

GAGELER J:   So where do we go?

MR DONALDSON:   Well, your Honours, it is still not a burden in this sense, your Honour.  That limitation – or these limitations do not have an effect upon political communication in this sense, in our submission.  Rather, these bans or these limitations enhance political communication and rather than burden it they enhance it in this way.

NETTLE J:   It is my edification you are talking now about the restriction on flow of funds to political parties the result of the prohibition?

MR DONALDSON:   Yes, and the property developers’ ban as well, your Honour.

NETTLE J:   Yes.

MR DONALDSON:   What they do is create a perception and a reality among electors in New South Wales that access to politicians for the purpose of seeking to influence them cannot be bought by means of political donation.  That is what this legislation gives rise to.  That is the perception it creates and the reality that it creates.

KIEFEL J:   So that is enhancing public confidence.

MR DONALDSON:   Well, it is enhancing communication, your Honour, because the consequence of that is it encourages all electors to communicate with parliamentarians or candidates, and even people who cannot afford to make political donations.  Your Honours know that access is not only for those who can pay and greater access is not for those who can pay most.  On that understanding, your Honours, in our submission, there is no undue burden on communication at all but, in fact, there is an enhancement of it by means of this legislation.

Could I finally, your Honours – I am sorry, I have taken a little more time than I intended – could I deal with one other matter that fell from my learned friend, Mr Bennett, yesterday?  It was really this notion that in a sense this legislation is very unfair on property developers and people who want to make political donations because those who have lots of money and want to spend it by influencing politicians have a natural – or have an advantage which is no different from the advantage of certain others.

It was not entirely sure to us what step in the Lange sequence that went to, but we understood it perhaps best to be put into the notion of burden.  Perhaps the contention is that this burden is unjustified because there are others who will continue to seek to influence politicians through means other than paying money for it.  Anyway, I am not quite sure where it emerges in the sequence, but to the point that my learned friend made, your Honours, could we make this observation?  I think your Honour, the Chief Justice, dealt with this yesterday as well in referring to “preferred access”.

The answer to that contention wherever it fits in the sequence, your Honours, is this.  That there would be no difficulty, in our submission, with laws that, for instance, provided for a cooling off period for ex‑staffers or ex‑politicians from accessing politicians or candidates for the purpose of seeking to influence them.  Legislation to that effect, your Honour, we do not see any difficulty with that at all.  So that deals with the access through knowing them or being a former employee or associate.

Equally, your Honours, we would not see that there would be an issue of invalidity in relation to a law that precluded family members from lobbying a family member politician, or something along those lines.  So my friend’s contention about unfairness, if that is what it is, is really met, your Honours, by the contention that, well, if the legislature chose to impose limitations on these others, and my friend says have unlimited access, they would be valid also.  They are our submissions, your Honours.

FRENCH CJ:   The Solicitor‑General for Queensland.

MR DUNNING:   Thank you, your Honours.  Your Honours, beyond our support for the submission of New South Wales, Queensland seeks to develop really only one issue and that is regarding the first inquiry of the second limb of Lange, and as your Honours will have seen from our oral outline, we only want to touch on that very briefly orally.  The point we really wish to make good is this.

Mr Bennett in his submissions regarding rational connection, as it were, takes that beyond the use of that concept in Tajjour as if it were now a freestanding requirement of the second limb of Lange.  That is, to say that there needs to be something more than legitimate legislative purpose, there needs to be some rational connection with that legitimate purpose.

As it were, that becomes a weigh point to then say, well, if there has to be a rational connection, if there can be shown to be better means of doing it, they are more rational and ultimately the means being employed are irrational, thus there is not a legitimate statutory purpose.  To some extent, that is really what the diagram at paragraph 3 of our learned friend’s oral outline document ‑ ‑ ‑

KIEFEL J:   Do you say they are two different – two entirely different – matters?

MR DUNNING:   No, I do not say they are entirely different matters.  I say that rational connection is really a tool that is used, when necessary, for the purpose of determining whether there is a legitimate purpose.  The test is, in our respectful submission, and ought remain, is there a legitimate legislative purpose, and on most occasions that will be able to be answered promptly and without the necessity of an analysis of rational connection.

NETTLE J:   It is just a matter of statutory interpretation, is it not?

MR DUNNING:   Correct, Justice Nettle, yes.

KIEFEL J:   Yes.  Just what I was going to suggest to you – that rational connection is only an aspect of the necessary construction of the statute.

MR DUNNING:   Indeed, and that is precisely the point that we would wish to make, and it should not be seen as some freestanding necessary obligation, because in most cases that statutory construction exercise will readily reveal that there is a legitimate purpose.  It might be a contestable purpose, but a legitimate purpose nonetheless.  Where rational connection was employed was in Unions NSW, where the question of whether there was a legitimate purpose was not capable of that prompt answer because, ultimately – as the Court held – no rational connection could be found, as the Court put it, even if one resorted to speculation, it could not discern a rational connection.

The submissions we would wish to make are that one should not now approach a question such as these the way the plaintiffs do, and that is to say, well, let us pick up the piece of legislation and let us inquire as to its rational connection, and compare that to other, better ways that the legislative purpose might have been achieved.  They are, therefore, more rational and, thus, there is not the legitimate purpose here.  Can I perhaps illustrate the point by reference to our learned friend’s written submissions?  Can I ask your Honours please to go to paragraph 53 – starting at paragraph 52?  Your Honours will see that the analysis starts under the heading:

Division 4A: no rational connection with a legitimate end ‑

And what is said is paragraph 52 is obviously unobjectionable, but then in 53, it is said ‑

The text of Div 4A does no more than impose a blanket prohibition upon the making of donations by specified classes of person –

And then at the end of 54 –

The question thus becomes whether the text and operation of Div 4A provide a rational connection with preventing that consequential evil.

Then, if one goes to paragraphs 57 to 58, can I invite your Honours to read all of 57 and the last sentence of 58, and then the first sentences of each of paragraphs 60 and 61.  In our submission, that is what is reflected in diagram at paragraph 3 of our learned friend’s oral outline document and it is neither necessary nor desirable for quietening the first inquiry of the second limb of Lange.

Rather, the inquiry ought remain and ought remain in terms of our respectful submission, is there a legitimate purpose, something that will typically be able to be readily answered, and it is only in an exception case like Unions NSW where it is not apparent that there is a legitimate legislative purpose that resort to the tool, the method of statutory construction of rational connection, needs to be overtly engaged because to do otherwise you end up with the sorts of arguments one has here where, as I say, it becomes almost a bootstraps argument because I can point to a better formulation, therefore there is some lack of rationality in the formulation that the Parliament has adopted.

FRENCH CJ:   You are proceeding on the basis that if the purpose identified is nothing more than prevention, for example, of the conduct which is prohibited by a provision, that is, defined by the terms of the provision itself, one does not get into the use of notions of rational connection.  That would arise when one is trying to identify a broader statutory purpose beyond that defined by the terms of the provision itself.

MR DUNNING:   Yes, Chief Justice, and I would add to that, and where that broader purpose is not readily apparent, because no doubt there would be occasions where the broader purpose of the provision is readily apparent from not only the text of the section ‑ ‑ ‑

FRENCH CJ:   Well, there might be a broader purpose.  It might be stated in the objects of the Act, for example.

MR DUNNING:   Yes.

FRENCH CJ:   Then there might be a question of the connection between the particular provision which is impugned and that broader purpose, if that is the only alternative available purpose.

MR DUNNING:   That is so, your Honour, yes.

FRENCH CJ:   Apart from the provision itself.

MR DUNNING:   Yes, indeed, and in our respectful submission the correctness of the approach that we contend for is really reflected in the reasoning of your Honour the Chief Justice at paragraph [42] in Tajjour 313 ALR 239, and your Honours will see from that passage of his Honour the Chief Justice it was really a similar argument that was being pressed in Tajjour as is being pressed here.  That is, the net is cast too widely.  It is picking up people who it ought not pick up and, as his Honour the Chief Justice ‑ ‑ ‑

FRENCH CJ:   You should bear in mind I was on my own in the result in Tajjour.

MR DUNNING:   Yes, I was about to say, true it is your Honour was in dissent in the outcome of the case, but we do not understand respectfully anything in the other reasons of the Court to be in any way intentioned with that reasoning and it identifies crisply the difficulty in the approach that the plaintiffs take here.

Your Honours, beyond that, there are only two other matters we wish to briefly touch upon.  That is, the first of those is this criticism that there was some lacuna in the New South Wales provision because it does not deal with bribery.  Now, apart from the fairly obvious answer, well, it does not matter if it does not deal with bribery, we think there is a more fundamental answer.  It is not particularly surprising that in legislation that in terms and in substance is directed at election funding, it is not concerning itself with bribery.

Bribery is not and never has been electoral funding.  Bribery, in the State of New South Wales, is dealt with at the common law and under the Crimes Act and that is where that matter which is criminal in character is properly to be located.  Laws regarding electoral funding are rather to regulate what would otherwise be the lawful activity of making a donation in cash or kind in respect of any particular political cause one might expect.  It is not an obvious place in which to deal with questions of bribery because they are not properly characterised as electoral funding. 

Finally, your Honours, there was an exchange between his Honour the Chief Justice and our learned friend, Mr Bennett, yesterday where Mr Bennett’s submission, as we recall it, is that there is really a fine line between those legislative judgments as to what is appropriate and the second limb of Lange.  Your Honour the Chief Justice’s response, as I recall it, was a distinction that must be maintained.  We, with respect, would additionally submit that it is not a fine line, rather it is a bright line.  It is really revealed most recently in cases such as Tajjour.

Our learned friend, Mr Donaldson, the Solicitor‑General for Western Australia, took your Honours to the Chief Justice’s reasoning at paragraph [36].  We have given some other paragraphs, but they are to a like effect.  The requirement being that the alternative is obvious and

compelling.  Again, it says, in our respectful submission, that there is anything fine about that distinction between what is properly a matter for legislative prerogative on the one hand and a matter that engages by way of offending the second limb of Lange on the other hand.  Unless we could assist your Honours any further, those are our submissions.

FRENCH CJ:   Thank you, Mr Solicitor.

MR DUNNING:   Thank you, your Honours.

FRENCH CJ:   Mr Evans.

MR EVANS:   Thank you, your Honour.  Just briefly, firstly, in respect of Division 2A and section 96E of the Election Funding, Expenditure and Disclosures Act, South Australia relies on its written submissions and also adopts the Commonwealth’s oral submissions.  We see in the outline of oral argument that has been handed up, the other two points that I wish to make are quite confined.  The first is that to the extent that it may have been suggested in paragraph 20 of the written submissions of the Commonwealth that the second limb of Lange may be in need of some reformulation, we do not accept that.

In fact, the Commonwealth in its oral submissions, with respect to the second limb of Lange in answer to question from your Honour, the Chief Justice, I think it was, accurately reflected what we would say is the position that the focus of the inquiry is directed to the degree of fit between the means adopted and the legitimate end and that is consistent with comments of his Honour Justice Gageler in Tajjour v New South Wales at paragraph [149] and we have dealt with that in our written submissions at paragraph 34. 

The transcript reference to the Commonwealth’s oral submissions in relation to that in this matter is set out in the oral outline.  That is at lines 3,482 to 3,490 of the transcript.  The degree of fit is concerned with the justification for the burden imposed as his Honour Justice Gageler referred to in paragraph [149] again of Tajjour.

In relation to the question of hypothetical laws, just a brief point, that the references to hypothetical laws, in our submission, must be treated with caution to the extent that any consideration of alternative legislative approaches is necessary.  It is our submission that such references will only be useful if alternative, less restrictive, or alternatives with no restriction, a fortiori less restrictive means are obvious and compelling, and again we refer to the references set out in paragraph 5 of the written oral outline.

GAGELER J:   What does compelling mean in that context?

MR EVANS:   It adds an element of – it is more than simply obvious but it is something which draws you to that lesser restriction, that alternative restriction, and more compatible with the constitutional protection.  The presence or absence of alternative means, in our submission, will not necessarily be decisive.  It may be but not necessarily, it goes into the weight.  That is consistent with the Commonwealth’s oral submissions.  Thank you, may it please the Court.

FRENCH CJ:   Thank you.  Yes, Ms Walker.

MS WALKER:   If the Court pleases.  Can I commence by indicating that principally we rely on our written submissions.  In addition, we adopt the Commonwealth’s oral submissions in relation to the issue of the level playing field, a matter which was ventilated in our written submissions and then dealt with also by the Solicitor‑General for the Commonwealth and we adopt what the Solicitor said. 

Can I also just on that point indicate that in relation to the submission made by Western Australia that your Honour Justice Bell might have postulated some alternative purpose not, in fact, raised by the parties, that we would say that the what I am calling the level playing field justification, which is what I understand your Honour Justice Bell was dealing with yesterday is raised by the defence of New South Wales in paragraph 62 and also dealt with in paragraph 68 of the submissions for New South Wales and, of course, dealt with by Victoria in its written submissions.

Can I then elaborate, your Honours, really on one issue and that is the question of the role and effect of the identification of hypothetical or otherwise alternative means of achieving the legitimate end.  Your Honours will see this as point 1 of the oral outline.  The authorities, as your Honours are well aware and as the parties have directed the Court to the references, the authorities indicate that such alternatives must be equally practicable and effective and obvious and compelling.  Now, the submission for Victoria is that that formulation allows room for legislative choice within a range of reasonable alternatives.

We would adopt what your Honour the Chief Justice said earlier today, that in a sense that proposition is subsumed in the phrase “obvious and compelling”, so that the requirement of proportionality – at least when being addressed at this stage of the analysis – does leave room for legislative judgment or choice between reasonable options, which may involve varying degrees of restriction on the implied freedom.

FRENCH CJ:   Can one parse that term or unpack it, or is it really just a high threshold flag to the judiciary?

MS WALKER:   Well, I think it would be probably unwise to attempt to divide it into its two parts.  In my submission, it is intended to direct the Court to the proposition that there is room for legislative judgment about different ways of dealing with a particular social problem, but that there may be on occasion alternative means that one can say are so clearly both less drastic and an obvious and compelling and practicable alternative that they should have been adopted, and as a consequence, one might conclude that the measure in fact adopted was disproportionate.

FRENCH CJ:   So, how would you respond to the proposition that capping is an obvious and compelling alternative to ‑ ‑ ‑

MS WALKER:   Well, in that regard, that perhaps takes me ‑ ‑ ‑

FRENCH CJ:    ‑ ‑ ‑ the political development prohibition.

MS WALKER:   ‑ ‑ ‑ immediately to what I wanted to say in point 3 of the outline, because – and perhaps before I go to point 3, I just make this point.  The exchange yesterday between the Solicitor‑General for New South Wales and both your Honour the Chief Justice and Justice Kiefel concerned firstly, potentially capping a loan as an alternative to the prohibition on property developers, particularly at local government level where there is no general camp, but the response of Mr Sexton was to point out that capping is not, in this scheme, used alone – it is used with a system of public funding, and that system of public funding of course ameliorates the effect of the cap on the recipients of donations, because a cap would have some effect on the source of funds, or at least the amount that can be obtained from any one source of funds, for a candidate or party.

To that extent, it could be seen to burden the implied freedom.  But, it is ameliorated by the provision of public funding to ensure that the burden – to the extent there is a burden – is a minor burden.  For that reason, we would say, your Honour, that to simply substitute a cap without the rest of the scheme, particularly at local government level, firstly would not achieve the same end, but secondly, would potentially have a greater impact on the implied freedom, and in that sense would not be a less drastic means. 

Now, then your Honour Justice Kiefel asked, well, why not apply the whole scheme to local government, which would include a general cap on donations, a cap on expenditure, and also the provision of public funding.  Now, in that regard, could I ask your Honours to go to the extract from Professor Barak that I have handed up with the oral outline.  Your Honours will no doubt recall that in the joint judgment in Tajjour, your Honours Justices Kiefel, Crennan and Bell at paragraph [114] referred to the work of Professor Barak, and indeed quoted from it for the proposition that “To qualify as a true alternative” the alternative:

must be as capable of fulfilling that purpose as the means employed by the impugned provision, “qualitatively, quantitatively and probability‑wise” ‑

and we would certainly embrace that proposition.  On the same page, Professor Barak went on to elaborate on the circumstances in which a proposed alternative might be considered to be a true alternative.  If I could take your Honours to about halfway down the page on page 324, I have provided some extra context, but really I want to take your Honours to page 324 at about point 5 in the paragraph commencing, “The same is true regarding the means”, about three lines down your Honours will see the passage:

The necessity test assumes that the less limiting means has an identical effect to that chosen by the law in every respect.  Accordingly, the necessity test is not met when the law’s purpose can be fulfilled through means whose limitation of the constitutional right is lesser, but requires additional limitations or expenses.

A similar point is made further down the page in really the last sentence on the page, commencing:

The necessity test cannot be used as a pretext for selecting a less limiting measure when the latter would lead to an expenditure of state funds, a re‑ordering of the national budgetary priorities, or to further limitation on other rights of the same person or of the rights of others.

Professor Barak then goes on to refer to a South African case, the Manamela Case, where he identifies some passages there which I will not read to your Honours but which we say make the same point.

GAGELER J:   In a human rights context, of course.

MS WALKER:   Of course in a human rights context, your Honour.

GAGELER J:   Even in that context, these are not absolute propositions.

MS WALKER:   That is absolutely right, your Honour, they are certainly not absolute.  But one of the factors that Professor Barak and the South African court is pointing to is the – and this really goes back to the question of identifying a way to deal with the problem from a range of reasonable options – when making that choice, the legislature has in mind not simply the effect on rights, and here of course I mean in the Australian context the implied freedom – not simply the effect on the implied freedom, but also issues of cost, of practicability and so forth, and those we say are matters for legislative judgment.

So, to come back to the question about why the imposition of the scheme that applies to State elections is not simply the obvious and compelling alternative to the way the scheme applies to local government elections and prohibited donors, is the proposition that, assuming that one cannot or should not separate caps from public funding, one would then be saying that the alternative is an alternative that requires considerable expenditure of public funding.  If New South Wales in order to deal with the problems it has identified at local government level is required to adopt a system that involves the expenditure of public funds, then, in our submission, that is not an obvious and compelling alternative.

FRENCH CJ:   I suppose the other consideration might be that to impose capping at the local government level affects so much a wider class of person than the property developer category.

MS WALKER:   That was really my first point, your Honour, that is right.  Although, of course, we would put it not so much the effect on the individual who wants to make the donation but on the recipient, but it certainly affects the – a general cap would affect the ability of local government candidates or parties to obtain funds for electoral expenditure from a very wide class of person, much wider than the narrower class selected.  For that reason, we say that to simply take a cap would involve a greater burden than to simply prohibit property developers.

Can I also just to finish draw your Honours’ attention to a passage that, we say, supports the proposition that allowing legislatures a choice from a range of reasonable options is consistent with the constitutional roles of the courts and the parliaments.  Now, that proposition, we say, is already reflected in the Australian jurisprudence, particularly, of course, of this Court, but we would also draw your Honours’ attention to a passage from the case of Harper v Canada (2004) 1 SCR 827 and could I ask your Honours to go to paragraphs 110 to 111.

FRENCH CJ:   What page in the report is that?

MS WALKER:   Yes, my apologies, your Honour ‑ page 888, your Honour.  Now, this is the part of the judgment of the majority given by Justice Bastarache where the majority is dealing with the question of minimal impairment.  Your Honours can see there that paragraph 110 commences with the proposition that:

To be reasonable and demonstrably justified –

of course, using the Canadian constitutional text ‑

the impugned measures must impair the infringed right or freedom as little as possible.

Then there is a quotation from RJR‑MacDonald which sets out the appropriate standard:

The impairment must be “minimal”, that is, the law must be carefully tailored so that rights are impaired no more than necessary.  The tailoring process seldom admits of perfection and the courts must accord some leeway to the legislator.  If the law falls within a range of reasonable alternatives, the courts will not find it overbroad merely because they can conceive of an alternative which might better tailor objective to infringement.

Thus, the impugned measures need not be the least impairing option.

This case, of course, was dealing with the context of electoral funding.  Paragraph 111 of the judgment goes on:

The contextual factors speak to the degree of deference to be accorded to the particular means chosen by Parliament to implement a legislative purpose . . . In this case, the contextual factors indicate that the Court should afford deference to the balance Parliament has struck between political expression and meaningful participation in the electoral process . . . “[t]he Court should not substitute judicial opinion for legislative choice in the face of a genuine and reasonable attempt to balance the fundamental value of freedom of expression against the need for fairness in the electoral process”.

KIEFEL J:   There might be differences of view about whether or not the notion, or the word “deference” and what it implies is appropriate in our constitutional context, but it may be more a matter of language than anything else.  For this reason, that misunderstood the notion of deference might suggest that the court steps back from its role of undertaking a judicial task, and allows the Parliament to do that.  So, on that view, there is a black and white test of this either is a judicial task, or it is not, and the question is to determine where that line is.  The German Constitutional Court prefers the expression “legislative discretion” and, of course, they have a very long word for that ‑ ‑ ‑

MS WALKER:   One that I cannot pronounce, your Honour.

KIEFEL J:   ‑ ‑ ‑ but it is perhaps a more neutral term than “deference” or “margin of appreciation”.

MS WALKER:   It is, your Honour, indeed.  Victoria does not put either “margin of appreciation” or “deference” as the appropriate formulation in the Australian context, but we do say the notion that when responding to a pressing social need, one might put it – and, of course, at this stage of the analysis we have identified a legitimate end for the law, so when furthering that legitimate end there will often be a range of ways in which that end can be furthered, and so long as Parliament has selected one from such a reasonable range of options ‑ ‑ ‑

FRENCH CJ:   Anything that was constitutionally open.

MS WALKER:   Absolutely, your Honour.

FRENCH CJ:   And it is a matter of just the constitutional boundaries between the court’s functions and that of the Parliament.

MS WALKER:   Precisely, your Honour, and that is really the point that we say emerges from a number of passages in this Court’s authorities to which your Honours have already been taken, but which is reinforced by the way in which the majority dealt with minimal impairment in Harper and, in particular, the observation that the options selected by the legislature need not be that which is least impairing.  The assessment is more nuanced than that, and we really then bring that back to the concept of “obvious and compelling”, and the proposition that, of course, the alternative must be equally practicable and effective.  It is through that lens that one sees the relationship between this Court and the Parliament being maintained.

GAGELER J:   Where does effect on minority voices fit into the analysis?  Does that go to the question of reasonableness?

MS WALKER:   It would play a role in that context, your Honour, yes.  If a law in fact – so, in terms or effect – had the effect of silencing or restricting minority voices, we would say that would be one aspect of whether the regime was one of a range of reasonable options, but it also might play a role in, in effect, what might be called the third question, the question that remains somewhat unresolved in this Court, and that is the balancing between the object and the means.

GAGELER J:   Well, where would the decisive point in ACTV fit into this staged analysis?  That is, that the legislation, although it set out a general rule, affected outsiders disparately from the way it affected incumbents.  Where does that fit?

MS WALKER:   Well, in my submission, your Honour – I suppose it depends a little bit on whether your Honour is asking me how it fitted into the judgments of the Court or how it could theoretically fit into the analysis.  In my submission ‑ ‑ ‑

GAGELER J:   It is the second I am asking you.

MS WALKER:   The second.  In my submission, it would fit better into the third step but it may fit into the second step insofar as one might be able to identify an alternative that did not have that discriminatory impact.  If one could do that, then one might be able to say, the Parliament has not selected from a range of reasonable options because of the disparate impact on a particular segment.  But, even if one could not identify that alternative option, it might be that in the third step that disparate impact could then be brought into the analysis.

KIEFEL J:   I think your observations as to ACTV are borne out at page 143 of 177 CLR.  The second step is referred to in the first complete paragraph and the third step of proportionality analysis, to an extent, comes into the last paragraph on that page where the Chief Justice speaks about “balancing of the public interest” in a proportional sense – in the context of there being some restriction so that the concept there of the extent and nature of the burden on the one hand and the competing public interest which competes with the freedom is taken into account.

MS WALKER:   Yes, thank you, your Honour. 

FRENCH CJ:   Is there any application of the Lange principle which would distinguish between a burden imposed by reference to the activities of defined interest groups within the community and other classes of burden?  In other words, is there any basis within the Lange criteria which would direct more anxious scrutiny, if I can use that term – I know it has a lot of baggage – to a prohibition directed to a class of person, property developers, today perhaps gay rights activists, tomorrow ‑ ‑ ‑

MS WALKER:   Your Honour, I think it would be safe to say that the singling out of a group and the imposition of a burden on the ability of that group to engage in political communication would – without, perhaps, needing to go into the question of whether we have a strict scrutiny standard – certainly invite close attention, but that is not this law.  Fundamentally, this law – and, of course, here we are speaking only of the Division 4A ‑ ‑ ‑

FRENCH CJ:   Yes.

MS WALKER:   ‑ ‑ ‑ prohibited donors.  This law, firstly, does not – and, important, we would say – discriminate between people on the basis of their political viewpoint, and I mean political viewpoint broadly to encompass both party political and views on other political issues.  But, secondly, it does not impose any burden on the political communication that those persons can engage in.  The burden as it imposes as has been said, I think, several times, is on the ability of those persons to pay money and that is not an act of communication.  So, it may be that the example your Honour has put to me would invite a different assessment by this Court but that is very much not the territory, we submit, that the Court finds itself in.

KEANE J:   And so far as ACTV is concerned, this law does not discriminate between incumbents and outsiders?

MS WALKER:   Certainly not the challenge to provisions, your Honour, no, that is correct.  It is not the same kind of law that was in issue in ACTV, and the real vice in ACTV was that it did have a discriminatory effect on the basis of whether one had been already participating in the political process or had not, and in fact whether it had an effect on those who may never seek to stand for office but would nonetheless have something to say about the matters that arise in a federal election and might seek to engage in political advertising, and we see that as dramatically different from the nature of this law which targets the payment of money.  If there are no further questions, they are the submissions for Victoria.

FRENCH CJ:   Thank you, Ms Walker.  Yes, Mr Bennett.

MR BENNETT:   May it please the Court.  I will deal with the submissions of my learned friends in the order in which they were put to the Court, but may I start by picking up something your Honour the Chief Justice put at one stage, which is the relationship, if one likes, between the case on Part 2A and the case on Part 4A.  That is simply to make the obvious proposition that if I fail in relation to the cap provisions, that strengthens my case in relation to the developer provisions for the obvious reason that the type of corrupt or semi‑corrupt payment which the Act is said to be aimed at is far less likely to occur under the caps than over it.  So, if I fail in relation to caps, that strengthens my position on the other part of the case.

BELL J:   But only insofar as the caps apply in relation to State government elections.

MR BENNETT:   Yes.

BELL J:   There remains the question in relation to local government, which by reference to the material in the special case might be thought to be not without significance.

MR BENNETT:   Yes, and one possible result – I have not addressed your Honours about severance or dividing it up, but certainly one possible conclusion to which your Honours could come is that the developer provisions are valid in relation to local government, but not in relation to State government, but I do not advocate that as such except as a fall back position. 

Now, the second matter is this.  Your Honour Justice Gageler asked my learned friend Mr Sexton a question in relation to his submission that once there was a legitimate end, one could if one wished just achieve some of it, or could just take a bit of it and achieve it in relation to that.  Your Honour asked him if that permitted arbitrary selection for that purpose.  We would submit that the answer to that question is found in the plurality judgment of Justices Gummow, Kirby and Crennan in Roach v Electoral Commissioner 233 CLR 162, and it is paragraph 85, where in discussing the concept of proportionality, there of course in relation to an exclusion from voting, at the end of that paragraph, their Honours said this:

What upon close scrutiny is disproportionate or arbitrary may not answer to the description reasonably appropriate and adapted for an end consistent or compatible with observance of the relevant constitutional restraint upon legislative power.

Now, if the legitimate end is to prevent political donations being made by people who might seek to influence politicians in their interests in a semi‑corrupt way, then simply to apply that to the random groups selected here – the developers, liquor, et cetera – is, we would submit, arbitrary in the sense used in that paragraph.  That may prevent that part of the Act from being reasonably appropriate and adapted for an end consistent or compatible with the observance, et cetera, within the second limb of Lange.

FRENCH CJ:   Well, they are not selected at random, are they?  They are selected because of some perception of a particular problem arising in relation to political funds emanating from these groups.

MR BENNETT:   Well, I have made the submission, your Honour, that there are other groups which have a greater dependence on ‑ ‑ ‑

FRENCH CJ:   I know that, but it does not follow from that that these are randomly selected.

MR BENNETT:   Well, your Honour, when one looks at them they are obviously selected for their unpopularity, in a sense.  That seems to be the common feature rather than any demonstrated tendency to make corrupt or semi‑corrupt payments. 

Now, my learned friend, Mr Sexton, a number of times said that my argument was that the right to buy access was constitutionally protected.  Your Honours, that is the extreme of the position, but one does not need to put it at that level.  A better way of putting it might be this, that the primary effect of the restrictions is to reduce the money available to politicians for electoral expenses.  Now, I have taken your Honours to the sections and shown how they do exactly that.  That is the primary violation of the constitutional provision.

There may be a minor secondary one in relation to the fact that it prevents access lying where it falls, and I have dealt with that in‑chief.  The third aspect is this, that one of the matters put against us is that the purpose of preventing the buying of access is itself a legitimate end within the second limb of Lange, and in relation to that we simply point out that that so‑called legitimate end is itself concerned with the making of political communications.

Now, my friends at one stage have tried to blur our position by talking about access and influence.  We are not talking about influence.  We are talking about access, access for the purpose of making representations which, of course, are political communication.  Now, in relation to developers themselves, I have said again most of what I want to say, but my learned friend appears not to resile from the proposition that developers as a group are somehow more likely to engage in corrupt activity, or quasi‑corrupt activity, and he gets that simply from the fact that they can make large profits from successful development applications.

I have given the answer, of course, that many people can make large profits from government decisions or the absence of government decisions.  But there are other aspects to communication, and communication in relation to pending development applications.  Suppose, for example, that a special State 95 per cent tax was imposed on profits from land development.  Suppose that a group of property developers formed a political party – we will call it the Developer’s Party – to represent the interests of developers and to argue against that sort of legislation.  Now, that party, under this legislation, would not be able to obtain funds from its primary promoters.

They would be forbidden to donate to it for the purpose of it being able to communicate a view in the political arena.  Also, of course, with the current controversy about land values in Sydney, one would have thought that property developers would have a useful contribution to make to that debate.  Now, I accept, as a number of my learned friends have pointed out, that this legislation does not prevent that sort of communication, but what it does do by preventing the making of donations which may, as one of their effects, facilitate access, reduce the access available for that sort of political representation.  One does not need to put it as highly as purpose of silencing developers to demonstrate that that is a significant effect of this legislation.

The next matter – yes, I just want to mention this.  My learned friend relied on the judgment of Justice McHugh in Australian Capital Television at paragraph 238.  I will not take your Honours to that but I do point out two things about it.  His Honour referred to the possibility of caps as a means of achieving a result, but I do point out not only that it was a dissenting judgment, as my friend himself pointed out, but it is obiter in a dissenting judgment.  It was a sentence which – a suggestion that was completely unnecessary for the case with respect to his Honour.  So, it is a piece of obiter in a dissenting judgment a long way from the case before the Court and, in my respectful submission, it is of much less weight than the many other passages which have been referred to in the course of this case.

Now, in relation to my submission about the ‑ your Honours recall my submission about the neighbourhood organiser, or union secretary, who might be able to influence or achieve a large number of small donations.  My friend said, the neighbourhood organiser is merely exercising a freedom of political communication.

Well, that is right but, with respect, irrelevant.  The point is that this legislation distorts the ability to make payments by favouring the neighbourhood organiser or union secretary who is able to cause a large number of small ones and disfavouring the person, or persons, who wish to make a small number of large ones, having the same total.

My learned friend then made some submissions about the effect of the disclosure requirements.  This was in response to my submission that the evil being addressed, the so‑called legitimate end, was something that was already achieved, largely by two things:  the disclosure requirements and the law of bribery.  Now, in relation to disclosure requirements, my learned friend said, they have a minimal deterrent effect.

We would submit it is a very substantial deterrent effect in the area with which we are most concerned in this case.  The large development which is decided upon by the Minister for local government or the government itself as a whole and it is in that area that the disclosure requirements have their greatest practical effect.  The example I gave of the large public development and the 50 storey block of flats on the South Head of Sydney Harbour – one has a large development, a highly controversial development ‑ and if there has been a large donation by that developer to the Minister’s party or members of that party which have been disclosed there is little doubt that the press are going to go on the net and obtain those details and splash them very loudly.  That means that when the Minister comes to make a decision, the Minister is going to say to himself or herself, just a minute, what inference is the press going to draw?  What is going to be on the front page of the paper tomorrow if I allow this development?

That will be a substantial factor against the Minister finding in favour of the developer.  That, in turn, means that the developer will know at the time of making the donation that it is highly likely to be counterproductive.  So far from having the effect that a bribe might have of inducing the Minister to decide in his favour, it is going to have a very large counterproductive effect of causing the Minister to find against him.  So, that is an example and a very common, we would submit, example of why the disclosure provisions are likely to have a very substantial effect of preventing the evil which the legitimate end is said to be directed to.

My friend then said that the bribery provisions were not very effective and referred to the 1994 case of R v Glynn.  We say a number of things about that case.  I do not want to take your Honours to the detailed facts and so on, but it is a case where there quite clearly was no bribe.  The Minister did not know of the payment and could not have done anything about causing it to be returned if he had.  It is a case, if anything, where the harm is that there is the appearance of corruption, even if there was no actual corruption.  There was no actual causative effect between the payment and the decision and for that reason the court’s dismissal of the prosecution is clearly correct.

But that is a case where disclosure, had the disclosure provisions been in force at the time, would have alleviated the problem completely because once the disclosure was there, the factors I have referred to would have operated and probably the payment would not have been made.  So Glynn’s Case is actually quite a good example of a case where, had there been disclosure provisions, it probably would never have happened.

KEANE J:   Is it permissible to consider these arguments on the basis that sometimes people may not obey the disclosure provisions?

MR BENNETT:   I am sorry, sometimes?

KEANE J:   Is it permissible to look at the suite of provisions on the basis that sometimes people may not obey the disclosure provisions?

MR BENNETT:   Your Honour, if they do not obey the disclosure provisions, one would not assume that they would obey the cap provisions or the developer provisions.

KEANE J:   Well, that throws into the mix the possibility that a bit more deterrence might achieve that result.

MR BENNETT:   Well, your Honour, if one is giving a brown paper bag in secret, the disclosure cap and developer provisions are all going to be irrelevant.  It is hard to see why an additional breach, bearing in mind the likely penalties, is going to make a great deal of difference.

KEANE J:   But that judgment, surely, is a matter for a legislature?

MR BENNETT:   Your Honour, it is, but where that legislature is detracting from the freedom of political communication to the extent that it is here – and I will come back to that – one has to look at the extent to which there is a necessity, or a reason, to achieve the legitimate end.  If it is already achieved by other aspects of the legislation, or substantially already achieved, that must detract from the second limb.  The other way of putting that, of course, is that one simply wraps it all up in the proportionality submission.  There again, it is hardly proportionate if the result has already been achieved by something else, or is substantially achieved by something else.  It goes to the necessity of the provision.

Finally, in relation to my learned friend Mr Kirk’s submissions, I come to section 96E, and the matters are – he referred to the difficulties of valuation.  There is provision in regulation 37, which is in the materials your Honours have, for an independent valuer to be appointed.  Now, my friend then said – he picked up on the fact that I said that the question of valuation could be subjective, and he said, we do not know if you are talking of value to the donor or value to the donee, so how can valuation be easy?  There are two answers to that.  The first is, one could easily say that it is one or the other.  But secondly, it is obviously the objective value, which is the value to the donee.

So, in the example that I gave of the potential donor who does not have much cash but has some unused office space, and therefore it is very easy, it does not cost him much to make that office space available for the candidate.  There is no difficulty, we would submit, in valuing that as the objective rental value to the donee.  As I say, there is provision in regulation 37 for an independent valuer.

Now, your Honour Justice Bell asked about the first payment, whether that fell within section 96E.  I understood my learned friend, Mr Kirk, to accept that it does and, as I say, locus standi is not challenged.  I come to the Commonwealth’s submissions and my learned friend referred to paragraph 9 of his outline of oral argument and in that paragraph my learned friend put three features as being critical in demonstrating the validity of the caps on donations. 

The first was that the ends served by the impugned legislation are protective of the constitutionally mandated system of government.  Our simple answer to that, your Honours, is the table on page 1 of our submissions.  It is simply not appropriate and adapted.  It deals with a totally different aspect and it is both too broad and too narrow.  It is not simply a question of whether it could have been done in some other way, it is just not dealing with the problem and dealing with matters that go beyond the problem.  The second matter in that paragraph is the suggestion that the caps ‑ and I assume he would also say the developer provisions ‑ are not shown to prevent political parties amassing the necessary resources for effective advocacy.

Now, your Honour, we would submit that the amounts have been shown to be quite large.  I will not take your Honours through the figures, which are quite tedious, but at page 343 of volume 1 of the special case book, there is a table.  That table demonstrates a huge difference in the total reportable donations when the caps came in.  It shows that there is a very significant effect on the amount available to political parties for the purpose of political advertising.  We remind your Honours in this regard of paragraph [38] in Unions NSW.  Then, my friend says, thirdly, that unlike ACTV or Unions NSW, the provisions do not have a differential effect favouring some political views over others.

Well, your Honour, that is always a matter for debate.  In Unions NSW, it had a particular effect which substantially affected donations by trade unions.  As I have shown here, the cap provision and the developer provisions interfere with donations by developers while permitting the union secretary or organiser who can influence a large number of small donations, so there is the same overall general difference.  Also, of course, the people referred to in the developer provisions are directors or officers of corporations who are likely to be people higher up the socio‑economic ladder within those corporations than the labourers.  Those effects are very diffuse but it is not, we would submit, a basis on which Unions NSW can be distinguished.

Your Honours, I come to the submissions made today and starting with Western Australia.  First, my learned friend combines access and influence and, as I have said my submissions are primarily based on access.  One does not have a right to influence.  One has a right to engage in political communication and in some cases, influencing may be part of one’s purpose but one does need to separate them.

My learned friends suggested it would be permissible to require no access at all for family or employees and friends and so on.  It is hard to see how that could work.  It is hard to imagine legislation which says one’s family may not make political representations to a member or that one’s friends may not.  It is inconceivable that one could draft legislation which would effectively achieve that result and, in any event, that would also, if it could be achieved, be a significant, and we would submit, invalid burden on political communication.

My learned friend from Western Australia also submitted that there was need for some deference.  Now, I do not need to remind your Honours of the passage in Coleman v Power (2004) 220 CLR 1, where in paragraph 87 his Honour says:

The Attorneys‑General for the Commonwealth and New South Wales also criticised the reasonably appropriate and adapted test.  They urged the Court to adopt a test that is more deferential to the judgment of the legislature than the reasonably appropriate and adapted test.  They contended that the appropriate test was whether the impugned legislation was “reasonably capable of being seen as appropriate and adapted”.  Although Justices of this Court have used that formulation on previous occasions, a majority of the Court has not accepted it in any case concerned with the constitutional protection of political communication.

In my respectful submission, the doctrine referred to in Harper of a margin of appreciation or deference, whatever one calls it, has not been adopted by this Court in relation to any aspect of proportionality.

In relation to the submissions made by the Attorney‑General for Queensland, again there is the submission that one can go part of the way to achieving the result by picking on a particular group and doing one step.  Our answer to that again is the passage from Roach.  My learned friend also cited Tajjour 88 ALJR 860 at paragraph [239]. That, of course, was a case where part of the factors being considered by the Court was the width of the net. One may obviously – and there is some cases where there is a legitimate objective – cast a wide net. The problem here is not only that one has cast a wide net, but also that one has cast a net which is too small. It is, for the reasons I have given, both too wide and too narrow to be appropriate and adapted.

Now, there is nothing additional I need to say about the submissions of the Attorney‑General for South Australia, and in relation to the submissions of the Attorney‑General for Victoria, although my learned friend eschews reliance on “deference” or “margin of appreciation”, her submissions, in my respectful submission, very much move in that

direction.  We rely, again, on the passage in Justice McHugh’s judgment in Coleman v Power.  Those are our submissions in reply, if your Honours please.

FRENCH CJ:   Yes, thank you Mr Bennett.  The Court will reserve its decision.  The Court adjourns until 10 o’clock tomorrow morning.

AT 12.08 PM THE MATTER WAS ADJOURNED