Ravbar & Anor v Commonwealth of Australia & Ors
[2024] HCATrans 91
[2024] HCATrans 091
IN THE HIGH COURT OF AUSTRALIA
Office of the Registry
Sydney No S113 of 2024
B e t w e e n -
MICHAEL RAVBAR
First Plaintiff
WILLIAM LOWTH
Second Plaintiff
and
COMMONWEALTH OF AUSTRALIA
First Defendant
ATTORNEY‑GENERAL OF THE COMMONWEALTH
Second Defendant
MARK IRVING KC
Third Defendant
GAGELER CJ
GORDON J
EDELMAN J
STEWARD J
GLEESON J
JAGOT J
BEECH‑JONES J
TRANSCRIPT OF PROCEEDINGS
AT CANBERRA ON WEDNESDAY, 11 DECEMBER 2024, AT 10.02 AM
(Continued from 10/12/24)
Copyright in the High Court of Australia
____________________
GAGELER CJ: Mr Solicitor.
MR DONAGHUE: Your Honours, yesterday at the end of the day, I identified the purpose of Part 2A and the foundations for that purpose in the text and extrinsic materials. In our submission, the plaintiffs have not seriously contested that purpose. Instead, their argument on purpose appears to be that, in addition to the purpose that I identified yesterday, Part 2A – or some of its provisions – also have two substantial illegitimate purposes, those purposes being said to be the suppression of political communication of the division and its members, and the punishing of the division for actual or alleged breaches of antecedent standards of conduct. Mr Wood will address the second of those purposes, the submission I am about to make are addressed to the first.
EDELMAN J: You are assuming their purposes rather than means to a purpose.
MR DONAGHUE: Your Honour, I do not think I am assuming that. I am understanding the argument against me to be that they are purposes.
EDELMAN J: But you are not accepting that they are purposes?
MR DONAGHUE: I am not accepting – the submission I am about to make is that neither of them are properly identified as purposes of the law. The plaintiff supports the first of what I have called the purposes that they allege by relying, as we understand it, on three matters: first, on certain speeches given by opposition members in Parliament proposing an amendment to the Bill to ban political donations; second, a letter to Senator Cash by Minister Watt dated 14 August, which is now in the supplementary special case book; and third, a letter by Mr Irving to Minister Watt dated 19 August. I propose to deal with those three materials in that order.
As to the opposition amendments, the materials before the Court and the debates – and I do not need to take your Honours back to it – reveal that the opposition was calling for some 20 amendments to the Bill prior to its passage, and some of them were made and some of them were not.
You can see a list of those 20 amendments in volume 3 of the special case book on page 1274, but your Honours do not need to go there. One of the amendments that was not made is, of course, the proposed amendments banning political donations by the Construction and General Division of the CFMEU. In our submission, the short answer to this point is that if a Bill did not have a particular purpose before an amendment was proposed, the purpose of the Bill, or the Act, when enacted, cannot have changed if the proposed amendment was withdrawn or voted down. The Bill did not somehow come to address a new and different mischief even though nothing about it changed.
The plaintiffs’ theory seems to be that anything that motivates individual members of the Parliament to vote in favour of a Bill, at least in circumstances if their vote is needed in order for the Bill to pass, contributes to the identification of the mischief or purpose, so you heard Mr Walker refer a few times yesterday to the numbers in the Senate and the fact that the opposition support was needed. In our submission, one can see that kind of submission in our friends’ reply in paragraph 6 in writing, which makes the submission:
that Parliament only passed the Bill because the Administrator indicated he would not permit the C&G Division to make party‑political donations –
In our submission, with respect, that is to ask the wrong question. It is an error to ask why Parliament passed the Bill. To borrow the words of Justice Taylor in Fairfax v Federal Commissioner of Taxation, the argument reveals:
confusion between the operation of the law and the motives of the legislature –
To illustrate that point, we submit it is notorious that it is often the case that, for example, crossbenchers or other Members of Parliament might agree to support Bill A if the government agrees to make certain amendments to Bill B. On the plaintiffs’ approach, Bill A would have the purpose of achieving the objects of the amendment to Bill B, because it was only because of the amendments to Bill B that the certain members or Parliament were prepared to vote in order to enact Bill A. If one then extends the hypothetical to different crossbenchers having different purposes, it might be that – one can readily see how unworkable it would become.
GAGELER CJ: Mr Solicitor, we are looking at what the Parliament sought to achieve in fact by enacting the text that was enacted, are we not?
MR DONAGHUE: Yes.
GAGELER CJ: And if the opposition and the government agree that they are seeking to achieve a particular outcome, is that not something that bears upon the discernment of that purpose?
MR DONAGHUE: Your Honour, in my submission – and I will come to this more with the letters – there is no agreement to that effect, for reasons that I will come to. But, in my submission, the way that the plaintiffs are seeking to identify – one of the ways they are seeking to identify this purpose is that they are saying, well, the opposition only voted for it because they thought that it would achieve the objective of banning these donations, and because they thought that, that should be identified as the purpose of the Bill. My basic point is that unless you can get that prohibition from somewhere else, the argument must fail, because you cannot get it from the fact that the members of the opposition, for whatever reason, withdrew their proposed amendment and supported the Bill.
EDELMAN J: It should not matter, though. It should not matter whether or not the reasons for support come after the text of the Bill or even before the text of the Bill. In both cases, the reasons for supporting something is the motive, and the motive is different from the purpose. The purpose is what is achieved or what is designed to be achieved; the motive is the reasons by which that end is to be achieved.
MR DONAGHUE: Your Honour, I entirely embrace that. That distinction that your Honour just put to me – and I will not take the time of the Court going to it – but in Mineralogy in paragraph 83 – it is in volume 11, tab 50 – that precise distinction between the motives or intention of the Minister and the members of the Parliament is identified as something different from the purpose of the law to be identified from the operation and effect of the law. That is our submission. So, it does not matter, in a nutshell, why Parliament passed the Bill. What one has to do is identify the object and effect of the Bill and the purpose – the mischief to which it was responding.
That then takes me to the letter Minister Watt sent to Senator Cash, which your Honours will find in the supplementary special case book. The text of the letter is the last page of that book – it is page 20 of that book. Once your Honours have that, you will see that, in the first paragraph, the Minister refers to the Bill; second paragraph, he refers to the then‑extant application by the general manager before the Federal Court, and that the scheme proposed provides the starting point for what the scheme might look like. Then he says this:
Subject to passage of the Bill, the Government commits to considering whether it is in the public interest to make a scheme of administration that includes the follows features:
One of which was:
Limitations on donations to political parties (subject to seeking legal advice from my department) –
We make a few points about that letter. First, in our submission, it is plain that the government, or the Minister, was not suggesting that the Act itself prevented political donations by the CFMEU or the Construction and General Division, and it certainly did not represent that the Act had that operation. It said the government committed to considering whether the scheme under the Act should contain such a prohibition. So, it was contemplated, if at all, that this topic depended upon what would be put in the scheme made under 323B.
Second, the indication given was highly contingent. It was not that the scheme would contain such a prohibition, it was that the government would consider whether it was in the public interest to make a scheme with that content. No higher than that. And even then, that was subject to legal advice on the topic. All of that, we submit, is well short of an assurance that the scheme would include a ban of that kind. Indeed, to read it in that way is inconsistent with its terms.
It might be said at its highest that it contemplates that it might be within the scope of the power that the Act confers to give the scheme that content. I accept one could read it in that way but, for the reasons I am going to come to when we get to the implied freedom, you would not construe the scheme as extending to an unjustified burden on political communication. So, there might be a margin between a limit on political donations that can be justified against the implied freedom versus other forms of non‑political communication that would cross the threshold. But what I am answering now is – well, this purpose argument infuses all sorts of different aspects of our friends’ attack, but insofar as it relates to the implied freedom, the challenge is put at the level of the Act and at the level of the determination, and in our submission, one cannot find either at the level of the Act or at the level of the determination a ban on political donations.
GLEESON J: Mr Donaghue, do you accept that a letter of this kind could be assimilated into the identification of the legislative purpose of the Act?
MR DONAGHUE: This, I think, goes to a question Justice Edelman raised yesterday about the public nature of these documents. Neither this letter, nor the next letter from Mr Irving are the type of material that one would ordinarily have regard to as an extrinsic material in ascertaining the purpose of the legislation. So, in my submission, the better answer is no. There was a reference to this letter that your Honours have in front of you now in the parliamentary debates.
GLEESON J: I accept that is a separate question.
MR DONAGHUE: So, that raises a slightly different issue.
GLEESON J: There is also a separate question about whether the content of this kind of letter could be assimilated into the identification of the legislative purpose.
MR DONAGHUE: My short answer to that, your Honour, is that you should identify the legislative purpose in the completely traditional way, which I attempted to do yesterday, by reference to the text of the Act and the usual extrinsic materials, and that is where you should stop, and that you would identify the purpose for Part 2A in the terms that are set out in paragraph 3 of our outline and that that is the only purpose that this law pursues. Can I ask your Honours, finally, to look at the ‑ ‑ ‑
EDELMAN J: Well, the other point about that is – I mean, if a law is a public document and it is addressed to the public, then how could the public be expected to understand the meaning of a law by reference to private communications that are not accessible?
MR DONAGHUE: I accept that, your Honour, and that is why 15AB has a list of things, all of which are things that are accessible and does not include these letters. I am going to them because I understand them to be the foundation of the case against me, not because I am suggesting that your Honours should be relying upon them in the way that it is being put.
As to Mr Irving’s letter, it is in volume 3 of the special case book behind tab 62, page 1279. At the bottom of 1280, the end of the letter, Mr Irving advises that:
I intend, should I be appointed as Administrator, to vary the rules of the Construction and General Division of the CFMEU to prohibit the making of party‑political donations or the funding of party‑political campaigns.
There is no suggestion in the terms of this letter that that is the only possible way that the administrator could exercise his powers – that is, that he would be bound by either the Act or the scheme to exercise the powers in that way – and that is important because, as I say, the challenge is to the Act and the scheme, not to the exercise of powers of the administrator under the Act or the scheme. That is our first point.
The second point is that, really, the highest this letter goes, or might go, is that it appears from the public record that it did affect the way some members of Parliament decided to vote. So, we accept that Senator Cash said, by reference to this letter, that is good enough for me and I will not press the amendment for the ban, but that comes back to my earlier submission about motive. It just explains why – it might explain why some members might have voted in particular ways, but that just does not tell us anything about the relevant question for constitutional purposes as to the purpose of the Bill.
For all of those reasons, in our submission – as I said a moment ago – the Court should identify the purpose, and the only purpose sought to be pursued by Part 2A in the way that we stated in paragraph 3 of our oral outline and in our written submissions, and should not find that there was any other purpose. The validity challenge should then proceed testing against that purpose only, in our submission.
Can I turn, then, to the question of head of power. Your Honours will appreciate that we have two quite‑independent arguments in answer to the head of power challenge, both of which relate to section 51(xx). The first argument – one of the arguments, rather – is that CFMEU is itself a trading corporation and Part 2A is a law with respect to trading corporations. The second argument is that, whether or not the CFMEU is a trading corporation, Part 2A is still supported by 51(xx) on the same basis that Work Choices held that the whole of the Fair Work (Registered Organisations) Act is supported by 51(xx).
If the Court accepts either one of those arguments, we accept it is not necessary to address the other argument, and ‑ ‑ ‑
GAGELER CJ: Mr Solicitor, the Incorporation Case, I think – for better or for worse – established that 51(xx) does not enable the Commonwealth to create a trading corporation, I think.
MR DONAGHUE: Your Honour, in my submission, that must be qualified by reference to the holding in Work Choices, because Work Choices holds that it is possible to create registered organisations – employer or employee associations – which have body corporate status by reason of being registered under that Act. So, in the incidental area of – clearly it is the case, based on the Incorporation Case, that you cannot straight to 51(xx) and the enact an incorporations Act that then allows you to create corporations.
GAGELER CJ: You can do it circuitously.
MR DONAGHUE: Well, not circuitously, but in aid of another purpose, in the same way that not all, but many other Commonwealth heads of power will allow, as part of their incidental operation, the incorporation of bodies in order to achieve the objects of that head of power. Work Choices so holds in relation to 51(xx). And if you cannot create an incorporated registered incorporation, Work Choices should have been decided differently.
GAGELER CJ: No, there is no problem about that, but then, did you not want to bootstrap into the core of the power by having it undertake activities? You create it in the incidental area of the power.
MR DONAGHUE: Create the organisation, yes.
GAGELER CJ: Correct, and then you want to make it a trading corporation within the centre of the power, something you cannot do directly.
MR DONAGHUE: Well, your Honour, I do not want to make it that – having given it legal existence as a body corporate, the question is then what it does, if it does trading activities, it makes itself a trading corporation, but it can – unless there can be no new unions post the shift in the statutory foundation from 51(xxxv) to 51(xx), it must be possible to create new registered bodies.
GAGELER CJ: No problem with that.
MR DONAGHUE: Yes. Then the question is: when those bodies do things – if they are corporations, and do things – is there a different test for them than there would be for everybody else? In our submission, there is no reason why there should be, the jurisprudence of the court does not suggest that. But one of the reasons that we give your Honours two pathways home, is that, in my submission, both pathways get you there.
GORDON J: But why do you need the first?
MR DONAGHUE: I do not need either of them, if you accept the other ‑ ‑ ‑
GORDON J: Well, Work Choices says what Work Choices says.
MR DONAGHUE: And if your Honours accept, which I submit that you should, that Work Choices provides a complete answer to the head of power challenge – and that is the submission I am about to make – it is a straightforward path home and you do not need to think about whether the CFMEU is a trading corporation. Your Honours may well think it inappropriate to do so, if you do not need to go into that constitutional territory in order to resolve the challenge.
So, your Honours should not understand me as doubting in any way that Work Choices is a complete answer to the case, but, of course, our friends say it is not, and I cannot gamble on the proposition that your Honours will agree with me when I have another argument that allows me to answer their case. So, that is why I have both ‑ ‑ ‑
GORDON J: Maybe it is the order in which you are doing them.
MR DONAGHUE: Well, your Honour ‑ ‑ ‑
GORDON J: I am not being critical.
MR DONAGHUE: Reading the room, so to speak, I have flipped the order from the order in the oral outline and I propose to go to Work Choices first. Work Choices (2006) 229 CLR 1 – and I will take your Honours to it in a moment; it is volume 14, tab 56 – held that, amongst the many things that that case held, that the Fair Work (Registered Organisation) Act is supported by 51(xx) because 51(xx) authorises Parliament to set up a framework to regulate employer‑employee relationships and that, having set up that framework, it can require registered bodies to perform certain functions within the framework and to meet legislative requirements for their lawful and efficient democratic conduct.
I say that it so held in relation to the Fair Work (Registered Organisation) Act because although when you read Work Choices the discussion is all about something called Schedule 1, headed “Registration and Accountability of Organisations”, what later occurred was that the balance of the Act was repealed, Schedule 1 became the body of the Act, and the Act was renamed the Fair Work (Registered Organisation) Act. So, it is actually exactly the same Act that was upheld in Work Choices that is now before you, and you can see that pathway traced in the special case at paragraph 20.4. So, it is not – I do not think anything turns on it, but it is not that Work Choices was about the predecessor legislation; it was about the same legislation.
The reasoning in Work Choices for upholding Schedule 1 starts at paragraph 309 on page 151 of the report with a reference to the heading and the stated objects, which are the objects in section 5 that your Honours saw yesterday, including setting out “standards” that have to be met:
in order to gain the rights and privileges accorded to associations under the new Act –
In 311, it is contemplated that – there is a discussion of who can apply for registration and, reading three lines down:
An association of employees may apply if it itself is a constitutional corporation –
So, the Act contemplated the possibility that a union might be a constitutional corporation, or if:
the majority of its members are federal system employees –
There is a summary, which I will not take your Honours through, at 316 of some of the rights and privileges that an organisation gained on registration. At 319, it was accepted that it might be the case:
that Sch 1 was drafted with a view to it standing as a distinct statute.
As, of course, it now is. But it said:
Whatever the situation . . . may be . . . Sch 1 is supported as an exercise of the power with respect to constitutional corporations.
The main reason for that appears in paragraph 322. Once it is accepted:
that it is within the corporations power . . . to regulate employer‑employee relationships and to set up a framework for this to be achieved, then it is also within power to authorise registered bodies to perform certain functions within that scheme . . . It is also within power to require, as a condition of registration, that these organisations meet requirements of efficient and democratic conduct of their affairs.
So, the Court has held that. The plaintiffs do not challenge that. They accept that the Fair Work (Registered Organisations) Act is valid on that basis. The whole argument, as we understand it with respect to Part 2A, is that what Part 2A does differs too much from what the Fair Work (Registered Organisations) Act does, because there are insufficient tethers – or “anchors” were the words that were being used – to the subject matter of the Fair Work (Registered Organisations) Act. Our answer to that argument is that, in fact, there are at least four tethers that are sufficient to create a sufficient connection between Part 2A and 51(xx). I will go through the four tethers we rely on in turn.
The first is that Part 2A applies only to an organisation that is registered under and owes its ongoing existence to the Fair Work (Registered Organisations) Act. That was a question your Honour the Chief Justice put to Mr Walker yesterday. The relevant provision is section 27 of the Act. The union was actually incorporated – and this is traced in the special case – under earlier provisions, and it is, via transitional provisions, as the industrial legislation has changed, had its corporate existence continued, but now it owes its existence to section 27.
This Court has for a very long time recognised that when Parliament creates organisations and gives them functions under industrial relations law, that Parliament has very wide powers over the organisations it has so created. Most of the cases discussing that are, I accept, cases under section 51(xxxv), but, in our submission, there is no relevant reason for a difference in relation to Parliament’s ability to control organisations that it has created to serve the same purpose under Commonwealth law, and we do not – our friends, at least to date, have not identified such an argument.
GORDON J: In relation to that, at paragraph 178 of Work Choices, their Honours refer to the earlier reasons of Justice Gaudron ‑ ‑ ‑
MR DONAGHUE: Yes.
GORDON J: ‑ ‑ ‑ where her Honour sets out probably – arguably, a more broad description of the extent of 51(xx) in relation to such organisations.
MR DONAGHUE: Your Honour, in our submission, that paragraph is – if there is a ratio of Work Choices, that is it, paragraph 178 and what follows, and as your Honour knows, at the end of it, it states a very wide view as to what 51(xx) does. It says:
It follows, as Gaudron J said, that the legislative power conferred by s 51(xx) “extends to laws prescribing the industrial rights and obligations of corporations and their employees and the means by which they are to conduct their industrial relations”.
So, it is reasonably unequivocal. In terms of the earlier case law, can I ask your Honours to go to one authority, which is R v Ludeke; Ex parte BLF (1985) 159 CLR 636, volume 15, tab 65. In a very real sense, this case is an echo of that case, because that case is the challenge to the deregistration of the BLF in circumstances not dissimilar to those that have led to the current law, and the BLF – that law was challenged on head of power grounds, on acquisition of property grounds and on Chapter III grounds; the implied freedom had not yet been recognised, so there was no implied freedom challenge, but there are evident similarities.
Now, obviously, there are differences in the detail. The Court rejected all of those arguments, and in rejecting the head of power argument, at page 647 and following, their Honours say, in the middle of the page:
It is firmly settled that it is incidental –
there, to the conciliation and arbitration power:
to provide for the registration as organizations and consequential incorporation of associations of employees or employers –
Then, a few lines down:
It follows from the fact that the Parliament may make laws for the registration of such organizations and for the effect of registration that it may regulate and control the organizations which it has created and may provide for the cancellation –
of regulations. Then there is – I will not take your Honours through it, but there is a discussion of a number of other authorities that support that extensive power of regulation and control, including Justice Mason’s judgment in Sweeney, discussed in the middle of page 649.
So, we submit that there is – as I said briefly a moment ago – no reason why, at least no reason we can see, the power of the Parliament to regulate or control industrial organisations created as an incident of the wider industrial relations framework should be any different as between sections 51(xxxv) and 51(xx). So, that the fact that this part, Part 2A, is only about a registered organisation that owes its existence to the scheme itself provides a sufficient tether to 51(xx) to conclude that the law is within power. But if that be wrong, there are three other tethers upon which we rely.
The second is that, as your Honours saw yesterday, the power to make the scheme, which is a power to make delegated legislation in 323B, is expressly conditioned on satisfaction that it is in the public interest to do so, having regard to the purposes in section 5. It is, in our submission, very well settled, by cases going back to Dignan – S152/2002 at paragraph 102 is an example of that, I will not ask your Honours to go to it, but there the Court said:
It is well settled that the . . . Constitution does not preclude the Parliament from authorising in wide and general terms subordinate legislation under any of the heads of its legislative power.
The limit, really, is where the power is so general that you cannot tell that the delegation is with respect to any head of power.
In our submission, 323B is a far more specific conferral of power to make delegated legislation than is usually the case. As your Honours know, most regulation‑making powers are just expressed in terms of what is necessary and convenient. This one, in an Act specifically about a registered organisation, is conferring a power that can be exercised only having regard to the mandatory considerations, being the purposes of the Registered Organisations Act. And while it is true that it is conditioned in the public interest, that in no sense is an indicator of invalidity.
Again, I will not take your Honour to it, but there are many, many cases concerning Commonwealth statutory provisions conditioned by reference to the public interest. We have cited some of them in our written submissions. One is Pilbara Infrastructure Pty Ltd v Australian Competition Tribunal, which is volume 3, tab 59, where the Court said:
It is well established –
citing many cases:
that, when used in a statute, the expression “public interest” imports a discretionary value judgment to be made by reference to undefined factual matters.
The Court then goes on to say it:
is “neither arbitrary nor completely unlimited” but is “unconfined except in so far as the subject matter and the scope and purpose of the –
statute so provide. So, in our submission, there is nothing in the complaint as to the width of 323B. Parliament delegates legislative power in much wider terms than that commonly, and has done so since Dignan. The public interest reference through section 5 provides the second tether we rely upon.
The third tether picks up a question that your Honour Justice Gordon asked Mr Walker yesterday by reference to 323B. Your Honours will recall that 323B(3) deals with matters that:
the scheme must provide for –
and there is quite a long list. As we understood your Honour’s question, you were pointing out that many of those matters that the scheme must provide for are the very same matters that are dealt with in the Fair Work (Registered Organisations) Act, so there is required to be a commonality of subject matter in what the scheme provides for and in the matters that are dealt with under the Fair Work (Registered Organisations) Act. That is tether number three.
Tether number four is that, as your Honours saw yesterday, 323K(5) requires the administrator to administer the Act:
in the best interests of the members –
and:
have regard to the objects . . . in the rules –
The concept of members of an organisation and the concept of rules of an organisation both being grounded, again, in provisions contained in the Fair Work (Registered Organisations) Act. This, your Honours, is a head of power challenge. The question is: is there at least, or more than, a tenuous insubstantial or distant connection between Part 2A and section 51(xx)?
In our submission, any one of the four tethers that I have just identified provides more than a tenuous, insubstantial and distant connection. When you put them all together, they comfortably satisfy that requirement, and so your Honours should hold that Part 2A is wholly within power on that basis. If that were wrong, for some reason, and some particular aspect of the scheme – our friends rely, for example, on the fact that the scheme under 323B can provide for not only the mandated matters in (3) but also may provide for other matters as the Minister considers it appropriate.
If the Minister sought to exercise that power in a way that did not have a sufficient connection to 51(xx), that would classically, in my submission, produce a scenario where 15A of the Acts Interpretation Act would bite. I do not think Mr Walker denied that possibility. We cannot see how you would get there, but if you did, the consequence would not be that the whole of Part 2A lacks power, it would be that some particular things that lacked the requisite connection to power would fall. So, that is the – I think it is fair to say – most straightforward answer we give to the head of power challenge. The submissions I have just made are, in my submission, enough to answer that part of the case.
I apprehend that I may be trying your Honours’ patience with the other part of the case. Can I try, because it is put against me, to deal with as quickly and efficiently as I can. Can I do so by inviting your Honours to take up our friends’ reply and go to paragraph 13. I am seeking to demonstrate to your Honours why I want to say something about this. There our friends say, in answering this question as to whether the CFMEU is a trading corporation:
That the CFMEU has some trading activities does not render it a trading corporation, because those activities are not by any measure its core or characteristic activities, nor are those activities dominant as a proportion of the activities of the CFMEU as a whole. The CFMEU is a trade union; its characteristic activity is industrial advocacy and the kinds of trading activities it conducts are either supportive of that core activity, or so insubstantial as to be insignificant.
Can I leave aside those last words “or so insubstantial as to be insignificant”. The rest of that paragraph, in my submission, is contrary to settled authority in this Court. None of those propositions are right. The last one, the “insubstantial as to be insignificant” is a fair question to ask on the existing authorities.
We would not wish your Honours to think that any silence on our part was in any way acquiescence to that. Indeed, your Honour the Chief Justice in your judgment, in Queensland Rail at paragraph 72, pointed out that a “predominant or characteristic activity” test, which is what we say we see in paragraph 13, was rejected:
in each of Adamson’s Case, State Superannuation Board v Trade Practices Commission and The Commonwealth v Tasmania (Tasmanian Dam Case).
We respectfully embrace that conclusion. The idea that activities might not be trading activities because they are conducted in a way that is supportive of a core non‑trading activity was expressly rejected in State Superannuation Board in the middle of page 304 in terms. The plaintiff also makes the submission that I will not ask your Honours to turn to, but in paragraph 22 of their original submissions where they assert that:
the authorities recognise that some corporations with particular purposes may not be trading corporations (seemingly despite potentially engaging in trading activities).
Again, we submit the authorities recognise no such thing. So, can I try to deal with this – as I say, I will try to do it quickly – by taking your Honours to two other cases, Adamson and State Superannuation Board, to make good what I have just said. Adamson (1979) 143 CLR 190 is volume 15, tab 64. It was about whether the Western Australian Football League, the South Australian Football League, and the West Perth Football Club, each of which were formed for non‑trading purposes, were nevertheless trading corporations. The majority held that they were.
Justice Mason gave a judgment with which Justice Jacobs agreed, and Mr Walker took you to that yesterday – or to one passage in that judgment – on page 233. Can I ask your Honours to go back there. Your Honour Justice Edelman asked, was this the passage that was endorsed in Work Choices. It is quoted in Work Choices in a passage in a part of the judgment where their Honours are going through all of the 51(xx) cases, but after the quote, their Honours said it was not necessary to address the correctness of that statement, which is something that their Honours said in several different places in Work Choices, so, in our submission, the Court should not read Work Choices as having endorsed that passage as the law. The part our friends rely on is, after having said:
“Trading corporation” is not and never has been a term of art –
It is said:
Essentially it is a description or label given to a corporation when its trading activities form a sufficiently significant proportion of its overall activities as to merit its descript as a trading corporation.
In our submission, that should not be properly read as stating a test that requires attention to be directed on a proportionate basis to activities – trading activities versus others. I say that for a couple of reasons. The first is that, having said that the term is not a term of art, what Justice Mason does over the next page or so is it discuss the concept. In my submission, one has to read what his Honour says in that paragraph with what happens and what he says over the page and with the way that the test is actually applied.
You see, in the application of the test in this case, no hint of a proportional analysis. Justice Mason is looking at whether there are significant or substantial trading activities without trying to balance them in any way against the non‑trading activities, which is understandable, and which will often be understandable, because the non‑trading activities may be very hard to quantify. They often may not be revenue‑generating.
GORDON J: Is his Honour’s analysis not captured in the first full paragraph on 234?
MR DONAGHUE: Precisely, your Honour. That was the next one I was going to go to and that is what – I precisely agree. In particular – so:
Not every corporation –
that trades:
is a trading corporation . . . may be so slight and so incidental to some other principal activity, viz. religion or education in the case of a church or school, that it could not be described as a trading corporation.
It is:
a question of fact and degree.
But “so slight and so incidental” appears to contemplate that slight activities, if they are nevertheless the main activity that you engage – say, the milk bar, the corner store, it does not engage in much trade, but that is all it does. That is a trading corporation. Sorry, not “that is all it does” – it engages in a small amount of trade, but it is not incidental to something else; it is a trading corporation. On the other hand, even if it is incidental to something else, once you have trade that is above the “so slight” amount, once you have a significant amount of trade, then it does not matter that it is incidental to something else; it is still a trading corporation.
So, his Honour was certainly not saying that a school or a church cannot be a trading corporation. Indeed, he was, in our submission, strongly implying that they would be unless the trading activities were so slight or so incidental. So, if you have a tuckshop or a uniform shop, or a gift shop at a church, that is not going to affect the character, but if you do substantial trading activities, it does.
BEECH‑JONES J: Has there been much discussion of what we actually mean by a “trading activity”? Because there is a reference there to school. Now, the concept of education may have changed in the last three decades – people pay for schooling.
MR DONAGHUE: People do now. Sorry – in my submission, there is a discussion in this judgment, actually – not a lengthy discussion – but if you go to the bottom of page 234, there is a list of activities that the League had engaged in. Receipts from football matches:
receipts from broadcasting and television . . . income from promotion, sponsorship and advertising; (d) rent for use of part of its premises; (e) catering . . . advertising revenue –
all of those things. And then, over the page, his Honour at 235, about point 8, just above the last paragraph, says:
I treat all their activities which I have listed and which produce revenue as trading activities. I do not limit the concept of trading to buying and selling at a profit; it extends to business activities carried on with a view to earning revenue.
So, a private school would be trading.
BEECH‑JONES J: And you will come to whether a union member subscribing to the union ‑ ‑ ‑
MR DONAGHUE: I will, although my primary submission will be, applying that kind of approach ‑ ‑ ‑
BEECH‑JONES J: It does not matter?
MR DONAGHUE: ‑ ‑ ‑ even if – it does not matter, we get over the line on activities that are of the same kind as listed there, but if it matters, I will come to it.
And as I said, I will not take your Honours through it, but at 235 and 236, his Honour applies that approach. Page 236 might be worth noting in the middle of the page because of its possible relevance to the question your Honour Justice Beech‑Jones just asked me. In the middle of 236, his Honour said:
The fact that West Perth is a club and that therefore its sales of liquor and food are largely made to members does not in my view affect is character as a trading corporation. There is no reason why an incorporated club which is heavily engaged in trading activities should not be held to be such a corporation, despite the fact that its trading activities are related to its character as a club and that it provides social functions, amenities and services for its members.
So, one might draw a parallel. Now, can I ask your Honours also to turn to Justice Murphy’s reasons which are important, in my submission, for two reasons: one, your Honour the Chief Justice adopted some statements from this judgment in Queensland Rail; two, as you will see in a moment in State Superannuation Board, in a joint judgment of Justices Mason, Murphy and Deane in that case, their Honours say in terms the differences between their reasons in this case – in Adamson – are differences of emphasis only, that they did not have as different concept of how the test applied.
Justice Murphy very evidently was not applying a proportionality analysis. He was just looking at, do you have substantial – sorry, your Honour the Chief Justice, I should say, endorsed this statement subject to the qualification that the activities had to be substantial, which his Honour does not say in terms. At 239, halfway down the page, is the key part of the reasons:
Even though trading is not the major part of its activities, the description, “trading corporation” does not mean a corporation which trades and does nothing else or in which trading is the dominant activity. A trading corporation may also be a sporting, religious, or governmental body. As long as the trading is not insubstantial, the fact that trading is incidental to other activities does not prevent it being a trading corporation. For example, a very large corporation may engage in trading which though incidental to its non‑trading activities, and small in relation to those, is nevertheless substantial and perhaps exceeds –
those of a smaller trader that is – or organisation that is clearly a trader. So, his Honour in terms is not accepting a proportion‑based analysis, and Justice Mason says in State Superannuation Board there is no difference between us.
That approach has been applied in lower cases I will not take your Honours to. A fairly well‑known one is E v Red Cross, for example, where Justice Wilcox held that the Red Cross was a trading corporation because it engaged in about 18 million of annual trade, even though that was dwarfed by other sources of government funding that were of 112 million, so 18 million of trade versus a large amount of non‑trading nevertheless allowed a conclusion of a trading corporation. I will not take your Honours to it, but Chief Justice Barwick at 208, point 6, also applies an equivalent test.
In State Superannuation Board, I will just show your Honours one page of the judgment, if I may – it is volume 16, tab 72. The key part of the reasoning is 304 – it probably starts on the last line of 303. Their Honours note that Adamson disapproved St. George County Council, rejected the purpose test, then:
Secondly, the judgments of the majority in Adamson make it clear that, in having regard to the activities of a corporation . . . the Court looks beyond its “predominant and characteristic activity” –
So, that is rejecting the kind of test that you see in paragraph 13 of our friends’ reply. There is then a summary of the tests from the various judgments in Adamson. Then, about halfway down the page, their Honours say:
it was essential to the majority’s approach and to its rejection of St. George that a corporation whose trading activities take place so that it may carry on its primary or dominant undertaking, e.g., as a sporting club –
and I would insert, as a union:
may nevertheless be a trading corporation. The point is that the corporation engages in trading activities and these activities do not cease to be trading activities because they are entered into in the course of, or for the purpose of, carrying on a primary or dominant undertaking not described by reference to trade.
So that, we submit, is directly contrary to the submissions our friends have put against us on this. Then, at the bottom of that page, the beginning of the last full paragraph:
If there be any difference in the comments made by the majority in Adamson it is one of emphasis only.
That same approach, the activities test, was applied in Tasmanian Dams. Professor Stellios in the latest edition of Zines – I have not actually checked whether Zines said it in his own editions – says that Tasmanian Dams also shows there is not much difference between Justices Mason and Murphy – the latest edition of Zines says that on page 113.
Your Honour the Chief Justice’s reasons in Queensland Rail, particularly at 68 to 72, are likewise entirely consistent with the way that Justice Murphy framed the test. Your Honour said if you have substantial trading activities or you are “incorporated for the purpose of trading”, either one is enough to render you a trading corporation, and it is not a “predominant or characteristic activity” test.
Our friends at one point seemed to suggest – and they certainly have suggested in writing – that these questions were open in some way by reference to the fact that in both Work Choices and Williams (No 2) the Court heard argument about the activities test and did not decide it. In our submission, our friends have never identified what it is exactly that they say has been left open despite the line of authorities I have just taken your Honours to – it is true that in those cases the Court said, we do not need to say anything about it, but that was just consistent with the usual prudential approach in constitutional cases, not to proffer a view on constitutional issues that were not necessary to the decision. It would be necessary to reopen and overrule these cases in order to depart from the activities test as articulated in the passages I have just gone to, and your Honours have no application to do that.
So, the question then is: does the CFMEU engage in substantial trading activities? We have given your Honours what we have described as an aide‑mèmoire to try to make this as painless as possible, and could I ask your Honours to turn to that. I should say by way of explanation, all of the material in this document was drawn from the special case. The figures that you will see on the second page in table A were all drawn from the CFMEU’s accounts.
The figures were not confined to the Construction and General Division because the question is whether the legal entity that is the CFMEU is a trading corporation, not whether a particular division is a trading corporation, and so we have looked at the trading activities of the entirety of the CFMEU. We have not included revenue from membership fees of the kind that your Honour Justice Beech‑Jones asked me about because they are in contest. So, what this document is trying to do is to identify trading activities that we do not apprehend are in contest. So, if membership fees are included, they are added.
In addition to the figures that you see at the bottom – along the bottom row of the table, which are in themselves clearly, in our submission, substantial figures, in the tens of millions of dollars – there is also revenue – and you see this described in paragraph 3:
Revenue not accounted for in Table A –
across the five years in question, totalling $38.6 million. The reason that we have not included that in the table is that the information in the special case did not enable us with accuracy to attribute it to particular reporting periods in the time, so we have just – and you can see where that figure comes from, note 15 lists some 27 different sources of the revenue that comprised that.
But if one, for the sake of argument – because, in the end, this is a question of fact and degree – pro ratas that amount referred to in paragraph 3, you would add about 7.7 million to each of the years along that bottom row in the financial year total. So, each figure is the figure you have there, plus a little under 8 million, roughly.
GLEESON J: So, the provision of training services and OH&S services, are those figures referable to receipt of grants?
MR DONAGHUE: In some cases, your Honour. Not exclusively, but in some cases, yes. You can see where – the endnotes point to where we have come from, but our submission about that – thank you for asking, Justice Gleeson – is that if the CFMEU, for the sake of argument, provides training to a group of apprentices at one of its training locations and the government pays for that by way of a grant, in our submission, that is a trading activity in the same way as it would be if the student paid for the fee themselves. There is a service being provided, money is being paid for the provision of that service; it is revenue‑generating, to use Justice Mason’s definition.
In the special case itself – so, in volume 1 of the special case, at paragraph 37 – the agreement of the parties is – this is page 134 of the book – there is a heading, “Other revenue”, and what the parties agreed was:
The CFMEU also generates revenue from engagement in activities, including –
And then there is a list. The list includes, at 37.1.3:
The CFMEU also receives grants and government subsidies to provide training.
So, in our submission, it is agreed on the facts that revenue‑generating activity is as I have just described it.
In our submission – and I will not take detain your Honours with the detail of it, our friends have not to date made any criticism of this table, but looking down what we would call trading activities in the left‑hand column – all of those activities are revenue‑generating in the way that Justice Mason’s definition suggested. They are, in many cases, the very same kinds of activities as are discussed in Adamson. We submit that to ask, are they so slight or so incidental as not to be characterised as trading activities; or to ask, are they substantial trading activities, can only admit one answer: they are. Even – well, indeed. Just at the last financial year, if one pro ratas the figure from paragraph 3, you would have $45 million, even leaving out the membership fees. On that basis, we submit your Honours should conclude that the CFMEU is a trading corporation.
If proportion was relevant, and for the reasons I have already given I submit that it is not, but if proportion was relevant, you have, in the special case, figures about the total revenue of the CFMEU in paragraph 31. And for the last financial year, 2023 to 2024, the special case records, at 31.5, that the revenue was $150.8 million in total. So, if you were asking a proportional question about 45 million as a proportion of a little under 151 million, it is around about 30 per cent, if you were asking that question, but we submit you should not.
As to the membership subscriptions, if you needed to go further than the table – and we submit you do not – your Honour Justice Beech-Jones asked a question of Mr Walker about what you get in return for membership. There is evidence about that again in the special case. You get industrial representation you would expect, but you also get, in the case of CFMEU – this is paragraph 36 I am referring to on page 133 to 134:
As part of their membership, members receive a range of benefits that the CFMEU has procured on members’ behalf pursuant to agreements with third parties. These benefits vary by division and within the C&G Divisional Branches, but include benefits such as insurance (including income protection insurance and travel insurance), legal services and ambulance cover.
And there is some details in Annexure 4. So, there is a range of evident value that the CFMEU gets for its members.
Now, going out to contract with third parties to obtain those benefits for members is itself a trading activity, we submit – our friends, I think, accept that in their reply, paragraph 11. Providing it to members in return for the membership fee, we submit, is also an activity that is capable, if your Honours get there, of being so characterised. It is said against us that that submission is inconsistent with the Full Federal Court’s judgment in a case called ALDI Foods v Transport Workers Union of Australia (2020) 282 FCR 174. Can I ask your Honours to turn to that again briefly – it is volume 19, tab 88, it is only a few paragraphs that are relevant.
The argument that had been put by ALDI was that the provision of industrial advocacy services was trading activity. That argument was rejected by the court, the reasoning being at 64 and 65. It was said at 64:
No evidence was adduced by ALDI to show that the TWU undertook any material activities beyond those stated in cl 2 of its Rules.
which are quoted above:
The primary judge found that, while some branches of the TWU sold some union merchandise, the sales involved sums of about $1,000 or less.
We are comparing, in that case, nothing except the evidence of very slight sales by the union with what you have now seen as to the extensive activities summarised in the aide‑mémoire. So, we do have evidence. That is one point of distinction. But 65 then says the:
membership fees does not convert the TWU’s core activities (industrial advocacy) into a commercial or business activity.
Why not? Because:
The advocacy activities of a union cannot be characterised as the supply of a service (advocacy) for reward (membership fees) in a trading or commercial sense because the service (advocacy) lacks a defined content. Such advocacy is incapable of being conceived in a contractual framework which is the foundation and touchstone of trading and commercial activity.
Then their Honours say a little later:
That is not to suggest that a union is incapable of conducting a commercial or business activity; for example, a union may provide training or similar services for reward.
Tying back into your Honour Justice Gleeson’s question. Here, whatever the case may have been with the TWU, the union itself characterises its membership fees in its accounts as, quote:
revenue from “contracts with customers”.
That is how they deal with it, and I do not think, given timing constraints, that I will take your Honours there, but can I invite you, if you are pursuing this line of inquiry, to look in volume 1 of the special case book at 334, which is annexure 11, in the first paragraph, and then to look, by way of example, at the ACT divisional statements on pages 461 and 475 – and there are equivalents to that in the Queensland, Northern Territory, South Australian, Western Australian, Manufacturing Division and MUA accounts. The short ‑ ‑ ‑
STEWARD J: Sorry, can you just give those references again?
MR DONAGHUE: Sorry, yes. So, it is special case book volume 1, page 334, paragraph 1, and then 452, 461, 475 – 461 in particular explains that the union accounts for the arrangements from its revenue from contracts with customers – meaning, members – which it describes as “enforceable” and containing:
promises . . . to transfer goods or services –
So, it accounts for them once the service being provided is sufficiently specific, so that it can be determined when the performance obligation has been satisfied. So, the vagueness that was the source of the concern in TWU at 65 does not appear to exist in the case of the unions. But all of this, your Honours, is territory that I submit you do not need to reach, because even if you reach the trading corporation argument, you can answer it on the aide‑mèmoire.
GLEESON J: Mr Donaghue, the paragraph 36 of the special case does not identify training services as a benefit that is provided in return for membership fees. Do you contend that it is one of those benefits?
MR DONAGHUE: The advocacy services?
GLEESON J: No, the training.
MR DONAGHUE: The training.
GLEESON J: The provision of training is not included in paragraph 36.
MR DONAGHUE: I do not contend that members of the union receive training as part of their membership fee. I do not contend that. They may have received training from the union, paid for in other ways, but not by reason of the membership fee.
GLEESON J: Thank you.
MR DONAGHUE: If, your Honours, the CFMEU is a trading corporation because it has substantial trading activities, for any of the reasons I have addressed, in our submission, there can be no doubt that Part 2A is a law with respect to trading corporations, essentially because of the paragraph from Work Choices to which Justice Gordon referred earlier, paragraph 168 of Work Choices.
GORDON J: Paragraph 178.
MR DONAGHUE: I am sorry, 178. Thank you, your Honour. I misspoke. Paragraphs 178 and 181 we rely upon particularly, but this is a law about a division of the CFMEU. If the CFMEU is a trading corporation, then this law affects who controls that corporation, it effects the disposition of the property of that corporation, it effects the vacation of the offices of former members and puts it all in the hands of the administrator. It is plainly sufficiently connected to constitutional corporations, as a law that is just about all of those aspects that are – or many of those aspects that can be drawn from 178 of Work Choices.
Our friends, I think, suggest – Mr Walker did not suggest orally, but in writing they suggested that even if the CFMEU was a trading corporation, there was still some problem with the connection to the head of power. Reliance was placed on Spence. I think the argument was the connection would still only be incidental, and because it is incidental it is outweighed by other impacts. Our answer to that is there is nothing at all incidental about the operation of this law with respect to the CFMEU, for the reasons I just gave. It is removing officers from that organisation directly, it is installing an administrator to control the property and affairs of that corporation; it is a direct effect.
The connections that are identified in 178 of Work Choices were said explicitly in Spence, at paragraph 58, to concern the core or primary operation of 51. I may have said that unclearly, but if your Honours – in fact, can I take your Honours to it? Can you go to Spence, volume 16, tab 71. So, this is in a discussion of sufficiency of connections to powers and it said in 58, it may:
appear without more if the law has a direct legal operation on the subject matter –
A discussion of Huddart Parker and Murphyores. Justice Mason, with Justices Gibbs and Jacob in agreement, saying:
“it is enough that the law deals with the permitted topic” and explained . . . “[it] is now far too late in the day to say that a law should be characterized by reference to the motives which inspire it or the consequences which flow from it”. So also in the Work Choices Case –
Footnote (127) is to – there is a slight peculiarity here. So, the footnote is to 198 but it says:
referring to Re Pacific Coal –
the Justice Gaudron paragraph. Paragraph 198 is the summary of the part of the discussion in which the paragraph that your Honour Justice Gordon has – so it is not clear whether that is a footnoting error or if the Court deliberately referred to the summary of the whole discussion, but either way, their Honours are saying:
this Court concluded that a law which prescribes norms regulating the relationship between –
corporations:
and their employees is a law with respect to such corporations –
et cetera:
It must be understood, however, that these cases were concerned with laws that operated directly on the subject matter of a Commonwealth legislative power.
So, Spence denies that the Work Choices paragraph that we rely on is incidental in the way that might then be subject to the kinds of limitations that our friends rely on.
BEECH‑JONES J: But just to be clear, this is a law regulating, effectively, the internal arrangements. Assuming the CFMEU is not a trading corporation, this is a law regulating the internal arrangements of a body representing employees who deal with trading corporations, this would be within the incidental area of the power.
MR DONAGHUE: Sorry, the argument that I am advancing right now, your Honour, is not connected to the Work Choices basis, it is connected only to the trading corporations basis.
BEECH‑JONES J: I understand, I am sorry.
MR DONAGHUE: So, if it is a trading corporation, in my submission, it is fine, but otherwise I accept what your Honour says.
BEECH‑JONES J: Yes, all right.
MR DONAGHUE: Well, I should qualify that, your Honour. Work Choices does not actually use the word “incidental” at any point in describing how the connection is to be drawn between Schedule 1 and – but I can certainly see the force of the argument that that is how you draw the connection and I think that is what the Chief Justice said to me earlier, but I do not think the Court has decided that point. But all I am saying, for present purposes, is that ‑ ‑ ‑
Can I just illustrate it this way. Your Honours can say with absolute confidence that any compensation received under section 323S would not go to either of the other divisions – that is the point that I have just made to your Honour Justice Steward – because that would be to treat a payment made to compensate in respect of a sphere of activities concerning, for example, construction workers as if it instead concerned the sailors. Your Honours will have seen that for example the C&G Division has a branch office in Melbourne. If that was acquired and there was just terms paid for that, under the rules, applying, in particular, 27(ii) and (iii), those moneys would inevitably go to the division and not to the other two divisions.
That leaves as a possible alternative only what I am describing as the supplicant superstructure – the national bodies – but again, we say, recalling something that both your Honour Justice Steward and Justice Jagot are very familiar with, the notion that these things are often a pastiche put together from entities that are later amalgamated and are therefore to be applied in a practical and commonsense way.
That, we say, would not be a sensible and practical construction of the rules because it would be placing those funds under the control of the national executive, which the rules contemplate, it is true, will receive some portion of the membership fees, but otherwise do not disclose, and your Honours will see this in the accounts that we have included in the aide‑mèmoire, a reference to receive very little other funding, because it is essentially a superstructure which does, no doubt, certain important things, but is, in that sense, subordinate to what happens below it.
BEECH-JONES J: Mr Lenehan, in that Part 2A, when you pick up 323S, and you ask yourself, what particular provision of this Part appears more likely than any other to effect an acquisition which that is trying to save – is it not 323K?
MR LENEHAN: That must be so, your Honour. Yes.
BEECH-JONES J: Would this not be a case of the legislative intention wholly missing its target?
MR LENEHAN: No, because the whole point of the Act – it may well have proceeded beyond what is constitutionally valid, but it directly hit its target, because the whole point of this whole Part was to give to the administrator comprehensive powers, including over the property of the division.
BEECH‑JONES J: No, I mean 323S would miss its target.
MR LENEHAN: Well, yes, but 323S has to be read in the context of the other provisions of the Act, or the Part, and all of those things seem to have in mind that you are dealing, in a very rules‑specific way, with the C&G Division. So, that is also my answer to Justice Steward’s question.
EDELMAN J: Why would not 323S operate to provide or to require payment of compensation but not to allocate the payment of compensation, so that if there is a gap in the rules, the compensation just does not get allocated until that gap disappears?
MR LENEHAN: Well, your Honour, that is back with my – the compensation is at the door of the union scenario.
EDELMAN J: Yes.
MR LENEHAN: The rules known to Parliament and with which this whole Part intersects envisaged that it is going to the C&G Division. Now, can I then very briefly deal with the point about 323K(5) and “best interests”, which was said by Mr Wood to be a basis for distinguishing Bank Nationalisation. It is not, because, if you think about it this way, a requirement to make a decision “in the best interests of the members” does not mean that there is going to be one singular correct decision in members’ best interests made in accordance with that requirement. There will inevitably be a range, and that immediately puts you in mind of what happened in Bank Nationalisation, where you had directors who, no doubt, had directors’ duties requiring them to equally think about the interests of the corporation. And so, we say that is wrong.
GORDON J: Can I ask a question about just the rules in that way? It has not been a matter that has been addressed, but under rule 52, there is an ability for 10 per cent, if not more, but:
not less than 10% of the financial members of the Branch –
can ask for a petition, in effect, of any matter to be brought to the attention of the members. Why does that not, in effect, itself provide an additional distinction between that which was the position in Bank Nationalisation? In other words, these rules themselves have mechanisms for the members, independently – as you would expect – to be able to bring a matter to their attention. I mean, there are other referendum provisions, but that is one of them.
MR LENEHAN: So, your Honour then has to read that against the important provision that Justice Gleeson drew attention to this morning, that is, 323F, which is directed to giving Mr Irving power to do what he thinks appropriate, exercising his very broad powers, regardless of the rules. It is intended to drive a bulldozer through the rules, because otherwise the broad powers conferred by Parliament would be frustrated.
GORDON J: The ability to consult, hold a referendum and to enter into – to seek views.
MR LENEHAN: If Mr Irving determined that that was not to be done, then 323F tells you that that is not an obstacle to him doing what he sees fit, subject, of course, to the requirements of the Part.
Now, something short was said about my submissions about Emmerson and reaching back to Justice Brennan’s decision in Mutual Pools, and Mr Wood sought to draw from the newspaper article that the learned Solicitor‑General noted this morning some connection with property. Our short submission about that is something similar to what your Honour the Chief Justice said in Emmerson, that is that even if some of those allegations were concerned with some property, this is a scheme that takes the lot – it takes all of the property of the division. And so, we say – and this is the point that I ended with, I think, on that aspect yesterday – the asserted legislative purpose simply cannot explain the – we call it forfeiture or taking that has in fact been done by the Act.
Now, that leads me to say something short about 323M, which I too quickly passed over yesterday and which Mr Wood quite rightly picks me up on, because the wording is different. So, the problem for me is that (2) provides, it is true, that:
The remuneration is to be paid –
not from the funds of the division, but:
from the funds of the CFMEU.
So, to be entirely upfront, if that has in mind that those funds are to come from something other than the division, we lose on that point. But can I briefly attempt to persuade your Honours otherwise. First, if you look to the text of 323M, you will see subsection (1) has in mind that this work is to be – the remuneration, rather, is:
for necessary work . . . performed by the administrator in relation to the administration.
And the administration, of course, is of the division and its branches, and not any other division, so that suggests – given, again, this whole Part is intersecting with the particular rules of a singular body – that it will be the funds of the division, as identified in the rules, from which remuneration is to be paid. So, if the division is receiving the work of the administrator, then we say you can read 323M as having in mind that it is the division which is to fund it. So, in short, we say that your Honours would read 323M in a similar fashion.
Can I then move to Chapter III, and at the outset, in terms of what I will call the Wotton‑Palmer idea to say that Justice Edelman is correct. What seems to underlie our friends’ submissions in respect of the executive power to punish – that part of our argument – is that if there is a discretion, then all of that falls to be determined in some proceeding that is not before this Court. But, of course, if your Honours think on the recent decision of this Court – Benbrika (No 2), Alexander, both of which involved a discretion also in terms of the public interest; also, for that matter YBFZ, which had a form of negative discretion, using the term “reasonably necessary” – all of that illustrates that what your Honour Justice Edelman said is right, and this kind of discretionary power – we have described the consequences as essentially binary – can be determined, its validity, at the level of a statute.
That then leads me briefly to the other points that we make. Now, the focus of our argument in chief was that the Act was enacted because Parliament had concluded that the division was acting unlawfully. To pick up on the point that your Honour Justice Beech‑Jones has now made a number of times, you can see that not only in the extrinsic materials that I took the Court to yesterday but also 323D(2A) and the limit that that imposes on the Minister’s power to vary or revoke the scheme and, critically, the notion of “functioning lawfully”.
That, we say, is a clear textual hook which indicates that Parliament presumes that the division is not doing so. That is consistent with – I will not take you back to it – the revised explanatory memorandum which your Honours have in the joint bundle at tab 116, and paragraph 22, where it was said that:
By allowing the Division to be placed under administration, the Bill addresses allegations . . . that members and associates of the Division are not respecting the law of the land, and the legislative amendments proposed in the Bill are necessary to facilitate the Division’s return to democratic control by those who do respect those laws.
We say, putting those things together, your Honours can see a clear legislative judgment at the time of enactment that there is presently and feared ongoing unlawful activity. In that sense, we do distinguish Duncan and the submissions that Mr Wood made about what your Honours find in the Act here, because one does have that legislative hook which reflects Parliament’s determination.
Now, the explanation that both Mr Wood and the Solicitor‑General offered was that this, in fact, reflects the history of civil penalty findings in respect of the C&G Division. That history, your Honours undoubtedly do see in the extrinsic material, but we do say that the better inference from the overall context is that the Act is dealing with the media reporting of new allegations.
But assume that I am wrong there and assume that Mr Wood and the Solicitor‑General are right, if what Parliament was doing there was attaching consequences to the past civil penalty contributions, then that would, we say, still be punitive. Your Honours recall from Benbrika last year that the majority concluded that the Executive could not add to the punishment previously determined by a court for criminal wrongdoing.
The upshot of what the Commonwealth’s submissions lead to is different, we accept, but still impermissible, because what would be involved, we say, is the addition of severe detriments because a court had
found that you had previously contravened, again, norms of conduct in a way that warranted non‑punitive civil penalties, and then by adding further penalties to that non‑punitive civil outcome, the overall package can therefore be considered to be punitive, whereas what the court had imposed was not. So, we say even if you accept that argument, that does not lead to our friends escaping the Chapter III limitation.
Can I quickly finish with two points. The first is to add to a point that your Honour Justice Jagot made to Mr Wood about what was involved in the vacation of offices, which we embrace. Can I note – and a point that I failed to make yesterday – that same robustness one sees to the rights in issue here applies also to the right to vote in elections.
Your Honours will see at point 11 of our outline we have referred to two cases, Craddock and Osborne, where that right was considered to be a proprietary right, and before your Honour Justice Edelman asked me difficult questions about equity, that seems to be a sort of circular idea in the sense that it was proprietary in the sense that an injunction would issue. Regardless of the basis for it, it does tell your Honours something about the robustness of the rights that are in issue here.
As my last point, can I say something again about Roche and Jehovah’s Witnesses. It is true, as I said yesterday about the wartime cases, they are also pre‑Lim, pre‑Boilermakers. Your Honours will see, in Jehovah’s Witnesses, which is joint bundle of authorities, volume 4, tab 23 – just to give your Honours the reference – at pages 167 to 168, in dissent, Justice Williams, anticipating this Court’s entire more recent body of jurisprudence, saw the question of judicial power as clear as burning daylight in, again, an equally short judgment, but we say his Honour is right.
Unless your Honours have any further ‑ ‑ ‑
BEECH-JONES J: I just have one quick question that I should ask. When you were referring to “punishment”, who do you say is being punished? Is it the CFMEU?
MR LENEHAN: Yes, and also its leadership.
BEECH-JONES J: I see.
MR LENEHAN: May it please the Court.
GAGELER CJ: Thank you, Mr Lenehan. The Court will consider its decision in this matter and will adjourn until 10.00 am tomorrow.
AT 4.12 PM THE MATTER WAS ADJOURNED
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