Spence v State of Queensland

[2019] HCATrans 47

[2019] HCATrans 047

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Brisbane  No B35 of 2018

B e t w e e n -

GARY DOUGLAS SPENCE

Plaintiff

and

STATE OF QUEENSLAND

Defendant

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

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON FRIDAY, 15 MARCH 2019, AT 9.45 AM

(Continued from 14/3/19)

Copyright in the High Court of Australia

KIEFEL CJ:   Yes, Ms Solicitor.

MS WALKER:   If the Court pleases.  As your Honours would recall, yesterday afternoon I was about to take the Court to some authorities.  By way of introduction to those authorities, we say that what they show, your Honours, is that when this Court has considered the basis for laws that do not, by the rights, duties and liabilities that they create, operate directly on the machinery for elections, such as voting, ballot papers, election disputes, the behaviour of the AEC and so forth, but laws that in a sense could be described as protective of the electoral process, that those laws have been understood to be justified as having a sufficient connection with the power to make laws with respect to elections because they are incidental to that power.  That concept of laws being incidental, as I will attempt to demonstrate, has potentially been both on the basis of the implied incidental power and the express incidental power. 

The first case I wanted to take the Court to is the ACTV Case, which is in the joint bundle at volume 3, tab 20.  Your Honours were taken to some passages in this case already.  In particular, the Commonwealth took your Honours to some passages from Justice Gaudron’s judgment at pages 219 to 220 of the report.  I wanted to focus on some aspects of that that the learned Solicitor‑General for the Commonwealth did not mention to your Honours to make good the proposition that Justice Gaudron understood the scope of the elections power relevantly for the purposes of the law in issue in the ACTV Case to be relying on the incidental power, including expressly section 51(xxxix).

Your Honours, the Solicitor‑General for the Commonwealth took the Court to a passage commencing on page 219, and going across to the top of page 220.  What he did not read was her Honour’s reference at the top of page 220, where she says:

of course, s. 51(xxxix) confers power to legislate with respect to “the execution of any power vested by [the] Constitution in the Parliament” –

Now, of course, that is a direct reference to the express incidental power.  Her Honour goes on there to say, in the next paragraph:

It is doubtless correct to say that, by virtue of the combined operation of the provisions in Ch. I conferring legislative power and s. 51(xxxvi) and (xxxix), the Commonwealth has plenary power with respect to Commonwealth elections.

Then she deals with some of the specifics of Chapter I, but goes on to make the proposition that:

Power to regulate election advertising or election campaigning must be found in s. 51 –

Now, in my submission, that reference at the bottom of the paragraph is a reference back to the suite of powers, including the express incidental power and, in a sense, including, but her Honour is not explicitly referring to, the implied incidental power that would be found in section 51(xxxvi). So that is how we say Justice Gaudron’s judgment is to be understood – that her Honour did see the incidental power as being relevant to an analysis of the law in issue in Australian Capital Television, of course, being a law that regulated not elections per se but political advertising.

We say the same features are manifested in the judgment of Justice McHugh, at pages 225 to 226 of the report. At this point in time his Honour is dealing with the contentions of the parties. One of the points that emerges from his Honour’s judgment here, under the heading “The contentions of the parties” on page 225 is that the Commonwealth expressly sought to justify the political advertising regime on the basis of sections 10, 29, 31, 51(xxxvi) and 51(xxxix) – again, the express incidental power. That proposition is also reflected in the argument, as recorded at page 118 of the report, but I need not take your Honours back to that.

So ACTV was argued on the basis that the express incidental power was invoked and it was, in that sense, I think understood by the judges that that was the basis, if there be a legislative basis, for the legal regime.  His Honour goes on in that paragraph to say, at about point 9 of the page:

Subject to any express or implied prohibitions in the Constitution, the powers conferred by ss. 10, 29, 31, 51(xxxvi) and 51(xxxix) of the Constitution are wide enough to authorize the provisions of Pt IIID so far as they apply to elections held by the Commonwealth. However, the provisions of Pt IIID apply to State, Territory and local government elections as well as Commonwealth elections. Because the provisions of ss. 10, 29, 31, 51(xxxvi) and 51(xxxix) of the Constitution do not authorize the provisions of Pt IIID in so far as those provisions apply to State, Territory and local government elections, the Commonwealth found it necessary to rely on the –

telephonic and other like services power in 51(v). His Honour then moves to a consideration of that power. It is obviously not relevant for present purposes. Now, not only does his Honour’s judgment there demonstrate the relevance of the incidental power, and his Honour notes that the incidental power does not support a law regulating State elections; his Honour also clearly recognises the distinction drawn or recognised by the Constitution between federal elections and State elections, the first being a topic over which the Commonwealth has power and the second being a topic over which it does not. That will be important at a slighter later step in my argument, but I am just leaping ahead a little to avoid having to come back to this judgment.

So, those two judges, we say, expressly understood the protective regime, and plainly the regime in ACTV had a protective purpose.  Obviously it failed for other reasons.  But those judges understood that, to the extent the regime was supported by a head of power, it turned on the incidental power.  The learned Solicitor for the Commonwealth took the Court to the passage from Justice Brennan’s judgment.  Justice Brennan did not in his analysis that your Honours were taken to refer to the incidental power.  However, of course, sometimes when one is dealing with the implied incidental power it is not necessary to refer to the incidental power.

But in addition, immediately prior to the passages that the Solicitor took the Court to, Justice Brennan recorded the fact that the submission was that the regime was supported on the basis of the incidental power, the express incidental power, and I do not want to take your Honours back to it, but it is at page 152 of the report.  So, again, Justice Brennan’s judgment must be understood in the context of the way in which the Commonwealth there sought to justify its law.  It sought to justify it on the basis of the express incidental power and all of the judgments need to be understood in that light.

The Commonwealth ‑ I will leave ACTV for now – also referred the Court to judgments in Mulholland and Unions which were said to demonstrate a very broad understanding of what is a law with respect to elections.  That may be accepted because we say that if a law is properly understood as within the implied incidental power it is a law with respect to elections.

In those cases, Mulholland and Unions (No 1), it was not necessary for the Court to decide whether the power was within the core or within the incidental scope of the power.  The point was a law was supported by a head of power.  So, in my submission, ACTV has the assumption, in a sense, built into it of the express recognition by two judges that the law there in question was supported by the incidental power.

We say that, in addition, Smith v Oldham is to be understood as a case turning on the incidental power.  Can I take your Honours briefly to it.  I understand of course your Honours have been taken to it before but I do just want to make a slightly different point about Smith v Oldham.  It is in volume 12 at tab 67 and can I ask your Honours to go to page 358.  That is the judgment of Chief Justice Griffith.  I will start with the first full paragraph:

It is contended that this enactment is beyond the power of the Federal Parliament.

Again, the learned Solicitor for the Commonwealth took your Honours to a part of the passage but not to the whole of the passage.  His Honour goes on:

It is not disputed that the Parliament has power to make laws for the regulation of federal elections.

Again, we do not dispute that either.  Here of course the Chief Justice does say that this is an exclusive power, and we of course do not accept that proposition, but putting that to one side, he goes on:

Perhaps, “regulation of elections” is an inexact term.  What is really meant is regulation of the conduct of persons with regard to elections.  The main object of laws for that purpose is, I suppose, to secure freedom of choice to the electors.  Incidental to the freedom of choice is the prevention of, amongst other things, intimidation and undue influence.

Then his Honour goes on to effectively analogise the particular provision in issuance in Smith v Oldham with the kind of laws that prevent intimidation and undue influence.  So we say that his Honour then understood the kind of laws that again do not regulate elections per se - the law in Smith v Oldham regulated newspapers in relation to commenting on matters relevant to an election - but it was valid because it was incidental to laws securing the freedom of choice to electors.

Justice Barton at page 361, we accept, said that the law was within the core of the power. It was not incidental; it was within the core. But he goes on – and this is at about point 6 on the page - to say that, even if it was not within the core, it would be covered by section 51(xxxix). Then we have Justice Isaacs on page 362, like the judges in ACTV that I took your Honours to, expressly deals with the express incidental power.  His Honour observes:

Secs. 31 and 10 and sub‑secs. (xxxvi.) and (xxxix.) of sec. 51 of the Constitution empower the Parliament to legislate with reference to parliamentary elections and all matters incidental. But, say the appellants, the challenge provisions are neither the direct object of the power nor matter incidental.

Then he advanced the argument.  The Solicitor‑General for the Commonwealth took your Honours to the next paragraph, but can I ask your Honours to go to the second‑last paragraph:

It is admitted that the Parliament can forbid and guard against fraudulent misrepresentation.  It would shock the conscience to deny it.  On what ground can so much be conceded, unless because it is an incidental power to protect the voters from intended deception?

So we say, your Honours, that the law in Smith v Oldham, which was upheld as valid, was understood by two judges to be a law that was valid because it was incidental to the powers that deal with federal elections.  Can I pause briefly while I am in the area of Smith v Oldham to say that we do not say that Smith v Oldham needs to be overruled in relation to the exclusive power issue.  The decision was correct.  The law in issue in Smith v Oldham was a valid law of the Commonwealth, and existing similar laws are also valid laws of the Commonwealth because the Commonwealth has an incidental power to enact a provision such as section 181AA of the Commonwealth Electoral Act; that is, a law that requires publications that comment on parties or candidates to be signed by the author giving their true name and address.

We do say that, to the extent the reasoning of the Court depended upon the proposition that the Commonwealth’s power over elections is exclusive, was wrong.  That step in the reasoning, we say, was wrong.  But we would say that your Honours can treat the decision as a decision standing as authority for what it decided, namely the validity of the law.

Just as in Ha v New South Wales (1997) 189 CLR 465 - which I do not want to take the Court to - in the majority judgment at page 504 the Court there, in relation to duties of excise, declined to overrule Dennis Hotels and Dickenson’s Arcade, but said they simply stand as authority for the validity of the imposts imposed in those particular regimes, we say that the Court can deal with Smith v Oldham in the same way.

The decision was not wrong in terms of the proposition that the Commonwealth had the power to enact the law it enacted.  It was merely a step in the reasoning which we say was wrong.  We might, of course, also say if your Honours did consider it necessary to overrule it, then your Honours should overrule it, because we would say it is plainly infected by the reserve powers doctrine, but I need not dwell on that further.

Finally, can I take the Court to Daniell’s Case, again a case that your Honours have been taken to.  It is in volume 10 of the joint bundle at tab 57.  There is a particular passage commencing at page 30 of the judgment, and running across to page 31.  Now, there was some debate about whether this passage was directed to establishing exclusive power for the Commonwealth or not.  I do not want to say very much about that, other than to say that we adopt the analysis put to your Honours by Queensland, which is that this passage was responding to an argument not about exclusivity, but an argument that the Commonwealth lacked any power to enact a law of the kind in issue, the law of course being one that said a State shall not hold an election on the same day as the Commonwealth is holding an election.  Now, what the joint judgment says is:

The respondents, however, strongly contended that such an enactment was beyond the competency of the Commonwealth Parliament.  They so contended on two grounds.  First they argued that the prohibition of State elections on the same day was not incidental to the acknowledged power to legislate as to Commonwealth elections.

That argument was an argument about the incidental power, and it was that argument that was rejected.  The Court simply says:

We are distinctly of opinion that the argument is unsound.  The Commonwealth Parliament clearly has power to secure, so far as legislation can secure, the fullest opportunity it thinks desirable to the people of the Commonwealth to elect their Parliamentary representatives . . . It would be pedantic to say more on that subject.

But we would say implicitly, your Honours, what is being accepted is that such a law is incidental to the Commonwealth’s power over elections.  Again, this is a law that did not operate directly in terms of rights, liabilities and duties created on a federal election.  It operated directly on a State election.  But it was within power because it was incidental to the Commonwealth’s power over its own elections to protect, if you like, the day on which a Commonwealth election is to be held.             In addition, your Honours, at the bottom of that paragraph, we again see a reference to the express incidental power at about line 8:

Now the Commonwealth Parliament, under the combined provisions secs. 10, 51(XXXVI.) and 51(XXXIX.), has power to regulate its own elections apart from the times and places of elections of Senators. Sec. 14 of the Commonwealth Act is such a regulation –

and they reject the second argument as well.  So, in my submission, those cases demonstrate that of course the Commonwealth has power to regulate things other than actual elections.  It has power to enact laws that protect Commonwealth electoral processes but it finds that power in the incidental power either implied or express and it matters not for present purposes which of those is invoked. 

Now, with that in mind, can I then turn to specifically address section 302CA.  So, really what I have been saying until now is that yes, the Commonwealth has really quite a broad penumbra associated with the power over elections and we accept that, that that broad penumbra would include a law such as section 302D regulating foreign donations to members of political parties and candidates as defined where those donations are to be used for the purpose of incurring Commonwealth electoral expenditure. 

We accept that laws about political donations fall within the incidental power.  They are laws, in that sense, with respect to elections but then the question is, well, what of section 302CA - and this is, of course, directed to question (d) of the special case.  We say that section 302CA, again, by focusing on the rights, duties and liabilities it creates, does not operate directly on elections for the Federal Parliament.  The question is can it be justified as something incidental to that power. 

Now, we note that the Commonwealth initially accepted that it relied upon the incidental power.  Your Honours will see and we need not go there but your Honours will see if you go to the written submissions of the Commonwealth, the principal written submissions at paragraph 44 that the Commonwealth said that section 302CA:

is supported by ss 10 and 31 of the Constitution read with s 51(xxxvi) (and the implied or express incidental power).

That is how the case was put when the Commonwealth first articulated its case.  That approach, of course, is also consistent with how the Commonwealth put its case in ACTV and how the Court understood the case in ACTV. 

Now, it does seem that in its reply submissions and in its oral submissions, the Commonwealth has now abandoned that submission and says, well, we do not need to rely on the incidental power.             In paragraph 32 of its reply submissions the Commonwealth says that:

Section 302CA does not depend upon any incidental power . . . it has a sufficient connection with federal elections. 

We say that misunderstands the operation of the incidental power.  A law that is within the incidental power does have a sufficient connection with federal elections, that is why it is valid, but it is, nonetheless, within the incidental power.  Our submission, of course, is that when one looks at the operation of section 302CA, it does not fall within the incidental power, but in order to develop that submission a little more fully, can I just say something more about how one determines whether a law falls within the incidental power or not.  We say here that it is necessary to look at the nature and subject matter of the power but also the purpose of the law.  That proposition is derived principally from his Honour Chief Justice Dixon’s judgment in the Second Uniform Tax Case which I will take your Honours to but I will not take you there quite now.  But what his Honour said there was:

But when you are considering what is incidental to a power not only must you take into account the nature and subject of the power but you must pay regard to the context in which you find the power . . . Further, you must look at the purpose disclosed by the law said to be incidental to the power.

That approach is consistent also with what his Honour said in Burton v Honan about the incidental power, which is that the:

powers given by s. 51 make all laws which are directed to the end of those powers and which are reasonably incidental to their complete fulfilment.

We say there is a consistent body of jurisprudence around the way in which the incidental power is to be approached.  Now, the learned Solicitor‑General for the Commonwealth took your Honours to Leask.  Can I also take your Honours to Leask.  Certain pages were handed up to the Court yesterday.  In addition, we have provided some additional pages that we need to take your Honours to, so I am hoping that your Honours have both the Commonwealth’s handed‑up extract and some additional pages from Victoria.  In particular, the focus here is of course on the judgment of Justice Dawson which, broadly speaking, did reflect the majority of the Court in Leask, and we have no quarrel with a focus on what his Honour Justice Dawson had to say.

Your Honours, at page 602 is the first passage that – my apologies, I withdraw that - one of the passages that the learned Solicitor for the Commonwealth took the Court to.  He commenced at about point 6 on the page and stopped just before the point that I wish to take the Court to, which is at about point 9, the sentence commencing:

No doubt as one moves closer to the outer limits of a power, the purpose of a law which lies at “the circumference of the subject [matter of the power] or can at best be only incidental to it” becomes important, because “by dividing the purpose of a law from its effect and operation, its connection with the subject of the power may appear more clearly”.  “Purpose” in that connection is merely an aspect of what the law does in fact and the test remains one of sufficient connection.  If that connection is established, it matters not how ill‑adapted, inappropriate or disproportionate a law is or may be thought to be.

From that additional passage that I have read to the Court, we say that Justice Dawson accepted that when one is in the realm of the incidental power, the purpose of a law is important, and that is consistent with what his Honour Chief Justice Dixon said in the Second Uniform Tax Case.  What his Honour Justice Dawson was concerned about in Leask was the idea that one might use a test of reasonably appropriate and adapted or proportionality to assess the validity of a law said to be supported by the incidental power.

His Honour then goes on, commencing immediately below the passage I took the Court to, to deal with the judgment of Chief Justice Mason in Cunliffe, and he deals with that judgment at some length because the Chief Justice in a sense brought in a concept of proportionality to the incidental power.  I do not want to dwell on that analysis, but your Honours will see it commences on page 603 and it travels across page 604 in the additional extract.  His Honour Justice Dawson also considers Justice Deane’s judgment in the Tasmanian Dam Case.  Then in a paragraph commencing at about point 4 on page 605, his Honour says:

For these reasons, it is my view that the relevant test of the validity of a law made under one of the substantive heads of power in s 51 of the Constitution is that of sufficiency of connection with its subject matter. That is so whether or not in characterising the law it is necessary to invoke the implied incidental power. As I said in Cunliffe, the disproportion of a law to an end asserted to be within power may suggest that the law is actually a means of achieving another end which is beyond power.  And no doubt there is a question of judgment involved in deciding whether a law exhibits a sufficient connection with the subject matter of a head of power.  But that does not involve a judgment as to the desirability of legislation, and the danger with expressing the test in terms of proportionality is that it suggests that the Court is concerned with the desirability of legislation.

So that is really his Honour’s concern to deal with the proposition that proportionality is an element of characterisation in relation to the incidental power.  But what his Honour did not say – in fact, what his Honour said was the – sorry, your Honours, let me start that again.  What his Honour did not say is that purpose is irrelevant.  To the contrary, his Honour says that purpose may be relevant, particularly when one is in the realm of the incidental power.  So, in my submission, his Honour’s judgment does not depart from the proposition articulated by Chief Justice Dixon in Burton v Honan and the Second Uniform Tax Case.  What his Honour was careful to do was to depart from the approach adopted by Chief Justice Mason in Cunliffe.

GAGELER J:   And he was not departing from his own approach in Nationwide News.

MS WALKER:   He was not; that is correct, your Honour.  If your Honours have the outline, moving to paragraph (d) of our point 2, which is to say this, that ‑ ‑ ‑

EDELMAN J:   Are you moving away now from the test for the incidental power?

MS WALKER: No, I am further developing it, your Honour. So this next step in paragraph 2(d) of our outline is to say that, in circumstances where the Constitution recognises or creates a distinction between the two levels of government - Commonwealth and State - in relation to a grant of power, it is necessary to give a narrowly confined ambit to the incidental power so that that distinction is not obliterated. Here, your Honours, we rely on three cases, but principally Attorney‑General (WA) v Australian National Airlines Commission, in the judgment of his Honour Justice Stephen where his Honour quotes Chief Justice Dixon in Wragg’s Case, and that is where the language of “narrowly confined ambit to the incidental power” so that that distinction is not obliterated, comes from.  That is a quote from Wragg.

If I can take the Court to the National Airlines Commission Case, it is at volume 3, tab 18, and I wish to take your Honours to page 505 in the first instance, simply to articulate initially what the case was about.  Page 505 your Honours will see at about point 8 on the page, commencing the judgment of Justice Stephen.  His Honour explains:

It has long been recognized that . . . the Commonwealth may establish an airline service authorized to carry passengers and goods on interstate routes and on routes to, from and within territories . . . By the Australian Airlines Act 1945 the Australian National Airlines Commission was created for this purpose and has conducted airline services on such routes ever since.

So that is airline services in interstate trade, and that was valid. The question for the Court in this case was the validity of section 19B, which your Honours will find set out on page 507. That section authorised the Commission, to the extent provided by subsection (2), to:

transport passengers or goods for reward . . . between places in the one State.

In other words, intrastate carriage of passengers and goods for reward.  Subsection (2) provided that that power could be:

exercised for the purposes of the efficient, competitive and profitable conduct of the business of the Commission . . . or otherwise as incidental to the carrying on of that business.”

Over on page 508, his Honour Justice Stephen commences his consideration of the validity of section 19B, and it is really the first full paragraph where his Honour has dealt with the construction of the section and said that:

although the extent of the power to carry intrastate is in all cases confined to what the sub‑section describes as “incidental” to the carrying on of the business of the Commission . . . the word “incidental” is here used with a relatively wide meaning. If s. 51(i) of the Constitution is to be relied upon as supporting this grant of power to the Commission to carry intrastate –

leaving to one side section 122:

it must be upon the ground that the penumbral incidental power which the subject matter of s. 51(i) attracts to itself is at least as wide as that which s. 19B of the Act purports to confer.

So, then his Honour says, well, the question is whether the grant of power over interstate trade incidentally includes a grant of power to legislate for intrastate trade and commerce in circumstances where the relationship is that described.  Then his Honour comes to the authorities in this Court on the scope of that implied incidental power which attaches to each specific grant of power and he says those authorities:

provide, in my view, a clear negative answer to the question posed. It is primarily to decisions upon s. 51(i.) that attention must be directed since, as Dixon C.J. pointed out in Victoria v. the Commonwealth the nature and the subject of the particular head of power in question will be critical in determining what is incidental to that particular power –

That, of course, is a reference to the Second Uniform Tax Case.  His Honour also refers to the judgment of Justice Dixon in Federal Commissioner of Taxation v EO Farley, which I will not take the Court to but I will just at this point note that his Honour Justice Dixon in that case develops an argument very similar to the approach his Honour took in the Second Uniform Tax Case to understanding the incidental power.  Justice Stephen then goes on to say:

It is notable that in considering the extent of the incidental power in the case of s. 51(i.) particular emphasis has always been placed upon the distinction drawn by the Constitution between those aspects of trade and commerce assigned to Commonwealth legislative competence and that which is left to the States.

He refers there to R v Burgess; Ex parte Henry, then his Honour refers to Wragg v New South Wales, a judgment of Chief Justice Dixon where his Honour says that the Chief Justice:

again referred to that distinction which, he said, must be observed and maintained in the application, to s. 51(i.) of the doctrine of implied incidental power; that distinction made “impossible any operation of the incidental power which would obliterate the distinction”.

Then, his Honour refers to some additional cases making that same point.  So, his Honour concludes:

The effect of this constitutional division of power over trade and commerce between the Commonwealth and the States has led to a quite narrowly confined ambit being given to the incidental power in the case of s. 51(i.), at least where what is in question is possible intrusion into the field of intrastate trade and commerce.

So, your Honours, what we take from that is the proposition that if one is dealing with a power where there is this distinction between State power and Commonwealth power, the implied incidental power is to be understood narrowly.  We have also given the Court some references to passages in Gazzo v Comptroller of Stamps which I will not - in the interests of time I think I will not take the Court to but we say they further reinforce that same proposition in the context of a different power. Now, we then say, your Honours, and moving to point 2(e), that the Constitution ‑ ‑ ‑

EDELMAN J:   Before you move on to the application then of this, how does the purpose point that you were developing from Leask interrelate with the narrow ambit that one gives to the incidental power where there is an overlap between State and Commonwealth?

MS WALKER:   I am not quite at application, but the intersection in this sense is that purpose is, we say, always relevant.  But when one is in the context of the implied incidental power in relation to a power in which a distinction is drawn between the Commonwealth and the State levels, then where the law has a purpose of intruding into the State sphere, that will reveal that it has gone beyond the scope of the implied incidental power.

EDELMAN J:   Always?  Or is it a type of proportionality question as to whether the extent of the law is reasonably necessary for that purpose?

MS WALKER:   Well, we have not put the case on the basis of a proportionality argument.  We do not think it is necessary to go there.  But we do accept that what one ultimately is looking for is a sufficient connection between the law and the head of power.  We would say that there will be some laws that are, in a sense, directed to the State level of government, that will not necessarily be invalid just because they are directed to the State level of government.  The law in issue in Daniell’s Case would be an example.  We would not say that law was invalid.

EDELMAN J:   That is why I am trying to work out how you use purpose to tailor back the scope of the incidental power.  What is the role, precisely, of purpose?

MS WALKER:   Well, the role, in a sense, is to identify whether one can see the connection.  So in Daniell’s Case, the law was very narrowly tailored.  It only prohibited the States from having an election on one day, which was the day of a federal election.  One could see that its purpose was to protect the ability of the Commonwealth to hold its election without distraction and interference by some other electoral processes going on on the same day.

So the purpose, in that context, provided the sufficient connection, even though the law, by its rights, liabilities and duties, did not operate on Commonwealth elections.  So the purpose can provide the sufficient connection.  But one of the things the cases do say, and this is probably said more expressly in Gazzo than in the other cases, although I think Justice Stephen said it as well, is that where the law trespasses into the State territory, it requires much greater scrutiny.

One needs to examine very carefully an asserted purpose in relation to Commonwealth elections to understand really whether the law does have that sufficient connection.  But I do want to develop that more precisely in relation to section 302CA, and what we say about its purpose – and that might take the matter somewhat further.

But before I get there, I simply want to make the next logical step in our argument, which is that in relation to elections, the Constitution does draw this distinction between federal elections and State elections and really I sought to make that point through Justice McHugh’s judgment in ACTV that I took the Court to earlier. But we do say it is apparent in the text of the Commonwealth Constitution that what the Commonwealth is given power over is federal elections and not State elections. So we say in that context one has to narrowly circumscribe the operation of the implied incidental power and, in addition, as Chief Justice Dixon said in Second Uniform Tax Case, one has to pay regard to the purpose of the power.

Could I take the Court to the Second Uniform Tax Case, volume 13, tab 75.  Again, I do not want to dwell on it for too long because your Honours have been taken to some of the passages, but can I ask the Court to start at page 613 of the report, which is the judgment of his Honour the Chief Justice. 

After making the observations that the Solicitor-General of the Commonwealth took your Honours to yesterday that the law in question, section 221(1)(a), is simply a command directed to the taxpayer not to pay the State tax pending the assessment and payment of the Commonwealth tax, quite independently of any consideration beyond the existence of the two taxes in the same field for the same year.  So the law did concern circumstances where there are two taxes in the same field for the same year, but really that was all.  Then his Honour says:

Where is to be found a legislative power in the Parliament of the Commonwealth which will suffice as authority for such an enactment? . . . The power by which it has been supported is that given by s. 51(ii.) –

the taxation power:

carrying with it, as the power does, everything incidental to the main purpose of the power. Inevitably there is added the power conferred by s. 51(xxxix.) . . . It is unnecessary for the present purpose to distinguish between the incidental power contained in the grant of the main power and that derived from s. 51 (xxxix.).

Then really the paragraph that we rely upon commences with his Honour saying “The first observation” and we rely on the totality of that paragraph.  I will not read it to the Court – your Honours may well have read it already – but we do say that his Honour’s analysis applies mutatis mutandis to section 302CA.  But can I also say that at the end of that paragraph his Honour says:

Section 221(1) opens with the words “for the better securing to the Commonwealth of the revenue required for the purposes of the Commonwealth”.

So, unlike the present case, section 221 contained a statement of the purpose of the section, and the purpose of the section was to secure to the Commonwealth the revenue to better enable the Commonwealth to collect its taxation.  His Honour says:

This recital may be read as a statement of the kind of purpose seen in par. (b) but both the nature and history of par. (a) make it clear that it refers really to the occupation of the field of income tax to the exclusion of the States.  Recitals do not suffice to bring statutes within legislative power -

Then his Honour goes on to give the various analogies and so forth which we also rely on as relevant in the present case.  If I can then perhaps, before coming to the purpose of 302CA, deal with the way the Commonwealth seeks to put the sufficiency of connection.  The Commonwealth says purpose is irrelevant, although it does proffer some purposes, and I will come to those.  But the Commonwealth seeks to demonstrate that section 302CA has a sufficient connection with federal elections by pointing to four matters:  the identity of the recipients, being participants in the federal electoral process; the purpose for which the gift may be used; the fact that only State electoral laws are excluded, not other State laws; and the fact that section 302CA leaves some room for even State electoral laws to operate.

Now, we say, and I think the Commonwealth accepted, that none of those alone would be sufficient to support the connection between 302CA and the power with respect to federal elections, that is, there is no plenary power to regulate political entities as defined in relation to every aspect of what they do.  The Commonwealth connects the entities with the use to which the money they receive may be put.  Likewise, we think that the use to which a gift may be put would not alone be sufficient to justify a law regulating the gift.  You do have to at least attempt to connect it with a participant in the federal electoral process.

Now, matters three and four, we say, in fact do not demonstrate any real connection with federal elections.  All they do is allow for the operation of some State laws.  So in our submission, those matters really should be put to one side when one is asking is there a sufficient connection.  The real question is whether one and two together, the identity of the recipient and the possible use of the funds, provides that sufficient connection – and Victoria contends that it does not.

We say that the bare possibility, to use your Honour Justice Gageler’s language, that a recipient might use a gift to incur federal electoral expenditure, is not sufficiently connected with federal elections even if the recipient is a federally registered political party or another political entity.  So we would say simply on that basis that the connection is missing, that the possible use of funds does not provide the connection to federal elections.

But we say that that is reinforced by attention to the purpose of section 302CA.  We say attention to that purpose is appropriate in light of the authorities that I have taken the Court to, and including Chief Justice Dixon’s judgment in the Second Uniform Tax Case.  Of course, we also add that because this law reaches in to restrict the ability of the States to legislate in relation to the protection of their own political institutions, that requires a limited operation for the incidental power, the incidental power will not, in these circumstances, as it did not in the Second Uniform Tax Case, allow the Commonwealth to go that far where there is, in a sense, no other sufficient connection.

NETTLE J:   Are factors three and four relevant at that level?

MS WALKER:   No, your Honour, in the sense that although they mean that some laws of the State can operate, it is nonetheless plain that the provision as a whole will exclude various State electoral laws.  So they are relevant, I suppose, to understand the extent to which the law extends into the sphere of the State’s realm of concern, constitutional realm of concern.

So I could not say they are irrelevant, but we would say that ultimately – and perhaps the simpler point is this.  They do not reveal the purpose of section 302CA, because the exceptions do not provide the purpose.  The purpose is to be found otherwise, and perhaps I might, in that sense, answer your Honour in a slightly longer way.

NETTLE J:   I appreciate that they do not bespeak any degree of connectedness, but are they not relevant in suggesting perhaps that a lesser degree of connectedness is sufficient because the intrusion into the State sphere is the more limited because of them?

MS WALKER:   That would be an available mode of reasoning if those exclusions enabled the State to properly regulate the integrity and corruption issues around its own political institutions.  It may turn, to some extent, on the breadth or otherwise of those exception.  We also of course come back to the proposition that because the Commonwealth has sought to control what has been described as the “unallocated middle” – what we would refer to as untied gifts – that that reaches too far into the State sphere, even though there is some exception for the States to also regulate, because really what the Commonwealth appears to be leaving to the States to regulate is not the untied gift or the unallocated middle; it is only the gifts that are separately identified and ultimately used for State electoral purposes. 

I think Queensland and South Australia perhaps both made this point. The narrowness of that exception does not allow the States to respond to the real vice which is, from Queensland’s perspective, the giving of the gift. And what the Commonwealth law permits is the giving and receipt of the gift and at that moment one has the risk of actual or perceived clientelism or corruption. The exceptions do not, in my submission, allow sufficiently for the operation of a law such as section 275 of the Electoral Act (Qld). They do not allow for a State to prohibit the gift. What they allow a State to do is say, “Well, if you give a gift you have to put it into a State account and use it for State purposes”, and in those circumstances the State law can operate. But they really do not seem to allow for a State to simply prohibit outright.

EDELMAN J:   Is that really effectively to say that factors 3 and 4, if they are put in terms of the way that you expressed the role of “purpose” earlier, are not sufficiently narrowly tailored to protect the interest of the States when one is construing the scope of the incidental power?

MS WALKER:   That would be one way to put it, and I would probably add to that, your Honour, though, that they are also not sufficiently tailored to focus on the concern of the Commonwealth, which is the provision of funds to parties for electoral expenditure.  So it is a sort of flipside of what your Honour says.  But we would say that, at best, propositions 3 and 4 might go to understanding the extent to which the Commonwealth law intrudes into the realm of the State constitutional regulation of its own political institutions, but what they do not do is demonstrate a connection between section 302CA and federal elections.  All they demonstrate is that the Commonwealth has gone some way to allowing some State laws to operate.

Can I make some submissions on the purpose of section 302CA. The section is found, of course, in Division 3A of Part XX of the Commonwealth Electoral Act. The purpose of Division 3A is set out in section 302C and, I think, as it might have been your Honour Chief Justice Kiefel said on the first day, the purpose that one sees in section 302C cannot be the purpose of section 302CA. The submission for Victoria is that by analogy with the Second Uniform Tax Case which, as I have said, we say that that reasoning is appropriate, but that the purpose of 302CA is directed to effectively removing the operation of many - not all but many - State laws that regulate political donations. 

Can I take your Honour to some material in the Commonwealth’s additional bundle.  The Commonwealth provided some legislative history to the Court in relation to section 302CA.  The first thing that the learned Solicitor for the Commonwealth to was the exposure draft - and I am not going to go back to that - but that was at tab 1 and the exposure draft, as my learned friend said to the Court, contained section 302CA in its original form which did not include the exceptions that one sees in subsections (3) and (5).  It was a much more absolute provision.  The Commonwealth has also provided at tab 2 the supplementary explanatory memorandum to that exposure draft and we say that is significant because this is, at least on the materials we have here, the first articulation of the purpose of section 302CA, albeit in a different form, but nonetheless the first articulation of that purpose.

GAGELER J:   Is that tab 2?

MS WALKER:   Tab 2, your Honour.

GAGELER J:   We are missing it.

KIEFEL CJ:   We have a faulty – we are missing ‑ ‑ ‑

MS WALKER:   I see.  I wonder if someone might be able – or perhaps your Honours could share?  Would your Honour be assisted by a complete bundle handed up?

GAGELER J:   Yes, thank you.

MS WALKER:   So just on the very first page, but it is page 35 in fact of the document, your Honours will see the heading “Amendment 114: Relationship with State and Territory laws” and then the subheading “302CA Relationship with State and Territory laws”.  What is said here is:

New section 302CA clarifies the interaction between similar State and Territory and Commonwealth electoral funding schemes.  New section 203CA ensures that provisions of State and Territory laws that relate to political donations cannot restrict the making or receipt of donations that could be used for Commonwealth electoral purposes.

These State and Territory laws dealing with electoral laws will be invalidated to the extent that they would detract from the right to give or accept a donation under the Electoral Act. That is, if Division 3A of the Electoral Act does not prohibit the making of a gift . . . then this cannot be prohibited by State or Territory law if the gift could be used for Commonwealth electoral purposes.

So that, in my submission, is the purpose of the law.  The purpose of section 302CA, when first conceived was to exclude State and Territory laws in relation to money that could be used – not must be used; could be used - and that ties back to the language of 302CA as initially introduced.

Of course, later the carve‑outs were added into section 302CA that reduced that broad scope, undoubtedly, but those carve‑outs cannot supply the purpose.  All they do is reveal that in its original form section 302CA went too far in excluding State laws, but the provision is nonetheless directed to preventing the States from regulating untied donations ‑ donations that could be, but might not be, used for Commonwealth electoral purposes.

NETTLE J:   It is both, is it not, both which must be and could be?

MS WALKER:   Yes, absolutely.  It certainly deals expressly with those which must be, but it also deals with those which might be or might not be.  The plaintiff on the first day said that the core aim of section 302CA is to preserve the operation of State law to a significant extent.  That was transcript page 17, line 727.  With the greatest respect to my learned friend, Mr Kirk, that submission is not sustainable.  It is true that ‑ ‑ ‑

GORDON J:   It is sustainable to this point, is it not, and that is that the exclusion of 302CA is limited to State electoral laws, so you have carve‑outs in that sense.  It preserves everything that is not a State electoral law, so you have that position.  Then to the extent you have the carve‑out of the State electoral laws then you pick up in conflation with Queensland the idea that the States permit gifts for personal purposes.

MS WALKER:   Undoubtedly the effect of the carve‑outs is to allow for the operation of some State laws, including State laws that are not electoral laws.  But what we say is that those carve‑outs are not the purpose; the exceptions are not the purpose.

GORDON J:   I thought you had said that the core aim of 302CA was what you challenged.

MS WALKER:   Yes, because we say that is not the core purpose of 302CA.  The exceptions are not the core purpose.  The purpose is to exclude State laws, but then the scope of that exclusion of State laws is narrowed by adding in the carve‑outs.  But the carve‑outs themselves – the preservation of the operation of some State laws, in my submission, is not the core aim or purpose of section 302CA.

Quite differently, the Commonwealth does not put the purpose in that way.  The Commonwealth says that the purposes – plural ‑ of section 302CA are threefold:  first, certainty as to the laws applying to donations; secondly, protecting federal electoral processes by ensuring participants in these processes are not starved of funds; and, thirdly, to facilitate participation by members of the Commonwealth in public debate and public affairs by making donations.

The first of those, certainty, or as the EM put it, clarity, we submit is really simply saying that the purpose is to exclude, and clearly exclude, the operation of State laws, that that is really a disguised way of identifying the operation of section 302CA which is to, quite expressly in its text, say that certain State laws will not apply.

Now, the third purpose facilitating participation by members of the Commonwealth in public debate and public affairs by making donations comes close, in my submission, to articulating a proposition rejected by this Court and that is the proposition that the giving of a political donation is a form of political communication. 

Now, I appreciate the learned Solicitor did not put it in those terms.  They say it comes close to identifying the giving of money with participation in political debate.  We say that is not an accurate way to describe the donation of money.  But even assuming both the second and third of the Commonwealth’s purposes to be available, what we say is that the regulation of donations that might or might not be used for Commonwealth electoral purposes lacks the sufficient connection with those purposes, that is, donations where there is just a bare possibility that they will be used for Commonwealth electoral purposes, does not have a sufficient connection with the head of power – but even perhaps first, is not really rationally connected to the purposes that section 302CA is said to serve. 

Then we add to that, that is particularly so where we are in a realm where the Constitution distinguishes between the State and federal levels of government, and where the law plainly reaches into the area of State responsibility, and seeks to preclude a State from making what it considers to be appropriate regulation to govern the integrity of its political institutions. That really I think is the way I wish to put the argument about section 302CA.

KEANE J:   Your last proposition sounded as if you were sliding into Melbourne Corporation.  What is the line between these submissions you are putting to us and the effect of application of Melbourne Corporation?

MS WALKER:   That is a very good question, your Honour, and it is one I have given some thought to because, of course, Chief Justice Dixon was the architect of the Melbourne Corporation doctrine as well as being the architect of the proposition in the Second Uniform Tax Case.  I think the answer is this.  The analysis that I am putting, focusing on the head of power, is anterior to the Melbourne Corporation question because it is possible for a law that operates on the subject matter of a head of power, leave to one side the incidental power, a law that is within the core power for the Commonwealth Parliament can contravene the Melbourne Corporation doctrine. 

So Melbourne Corporation, in a sense, is focusing on a different question. Once you have gotten through the head of power gate, have you nonetheless intruded upon and curtailed the ability of the States to function as governments? That is possibly a – well, I think it is a different question that is being posed. The earlier question focuses on whether there is a sufficient connection between the Commonwealth law and a head of power and as part of, but not the entirety of, the question, asks whether the law trespasses into an area that the Constitution, in a sense, recognises is an area of State power and I, of course, do not mean to suggest any doctrine of reserved powers.

So I think conceptually it is a different question, and it arises at a different point in the analysis.  But I accept that there is a degree of similarity in the question his Honour the Chief Justice posed in the Second Uniform Tax Case, and the question that one might later pose in relation to Melbourne Corporation.

KEANE J:   If the Commonwealth law is not sufficiently connected to the power, even if the power is exclusive, the Commonwealth law would be invalid.

MS WALKER:   Yes, your Honour.

KEANE J:   If the Commonwealth law making power is exclusive, that is an answer to Melbourne Corporation.

MS WALKER:   Not necessarily, I think, your Honour.  I confess I had not turned my mind to that.  I was not proposing to address the Court on Melbourne Corporation, but in my submission it is at least theoretically possible that a law falling within exclusive Commonwealth power – and I cannot for the moment come up with an example – but if it were a law that was such as to impair the capacity of the States ‑ ‑ ‑

KEANE J: Well, obviously a Commonwealth law that purported to say there shall not be a State Parliament would be contrary to section 107.

MS WALKER:   Yes.  But that is a different question, I think.

KEANE J: But is there a practical case, a practical example you can give us of the kind of case where a law that is within exclusive Commonwealth power – something in section 52, for example – where Melbourne Corporation could nevertheless be invoked to invalidate that law?

MS WALKER:   I do not think I can do that on the run, although I am just going to invite my junior to contemplate the question.  Partly I am conscious of time, your Honours.

KEANE J:   Sure.

GAGELER J:   What about a law that said a State Premier cannot come to the seat of government?

MS WALKER:   Yes, I think that would probably be quite a good example, your Honour, and I am happy to adopt that example.  I suppose, really, to come back to your Honour Justice Keane’s questions, we say that there is a distinct order of analysis.  The first question is:  is a law within the head of power?  That is really what I have been addressing, and really only on 302CA, not on exclusive power.  Then the second question would be, well, even if it is within a head of power and in fact even if it is within an exclusive head of power, does the law nonetheless contravene the Melbourne Corporation doctrine?

So they are sequential questions.  They ask different questions and the analysis is really, I think, a little different in both but, as I said, I do accept that what his Honour said in the Second Uniform Tax Case has a similarity to the kind of question one is asking for Melbourne Corporation.

Can I make briefly some remarks about the Bayside Case, which was handed up by the Commonwealth.  The Commonwealth sought to rely on Bayside to say well, in that context, which was a head of power in relation to telephonic and like services, it is very broad.  We can regulate carriers and we can give them an immunity from State laws.

Can I ask your Honours to go to the passage in Bayside.  It is page 624, your Honours, and the paragraph was paragraph 26.  I am not going to read it, but we say that the Commonwealth’s analogy with Bayside fails and it fails for three reasons.

Firstly, we say the head of power in issue, telephonic and like services, is not a head of power where the Constitution recognises or draws a distinction between federal and State powers. So the principles that I have been putting to your Honour from the cases have been focused on a head of power where that distinction is drawn. That distinction is not relevant to an assessment of 51(v).

Secondly, the focus here was on conferral of an immunity from discriminatory burdens.  I did not end up taking the Court to Gazzo, but in Gazzo the Court held that an immunity for people who had entered into some sort of family law maintenance agreement or were the subject of Family Court orders, an immunity for those agreements or orders from State levies or charges was invalid as being outside the incidental power. 

But what his Honour Justice Stephen, I think, expressly said was that it might be different if the law was discriminating against a particular class of persons, discriminating against married people – the State law, that is, was discriminating.  It might be open for the Commonwealth to exclude discriminatory laws.

In Bayside that is precisely what the Commonwealth was focusing on – laws that singled out carriers for a discriminatory burden.  That is not present here.  The State law does not single out participants in the federal electoral process for some different treatment.  What it says is if you participate in the State electoral process, we will regulate you and we will regulate you even if you also happen to participate in the federal electoral process.  So that element of discrimination is missing.

Thirdly, and perhaps in a sense relatedly, the focus in Bayside in the last sentence of the paragraph to which the learned Solicitor took your Honours said that the law imposed discriminatory burdens in their capacity as carriers.  So we would say that to the extent the analogy holds at all, it would hold in relation to an immunity conferred on participants in the federal electoral process insofar as they give or receive funds for federal electoral purposes, but not insofar as they receive untied funds which might never be used for Commonwealth electoral purposes.

I am conscious of time.  In relation to the incidental power, our primary argument has been to focus on the validity of section 302CA and to say there simply is not that sufficient connection.  We also say the incidental power is relevant to the analysis of the asserted exclusive power of the Commonwealth.

Your Honours will see at point 3 on our outline we will rely on our written submissions for the proposition that in fact the Commonwealth’s power in relation to federal elections is not exclusive, but can I briefly make the point that, as an alternative, if your Honours were minded to consider that the Commonwealth has some exclusive power in relation to federal elections, then the scope of exclusivity ought to be confined to the core of the power and ought not to encompass the incidental reach of the power, bearing in mind how broad the incidental reach of the power would be.

KIEFEL CJ:   How would you describe the core of the power?

MS WALKER:   We have used the shorthand of “machinery for elections”.  That would include a myriad of things.  It would certainly include matters around the ballot paper, who may vote, the operation of the Australian Electoral Commission, the issue of the writs, the return of the writs, the resolution of disputed elections and so forth. 

It would include laws that directly operate in relation to the rights, liabilities and duties they create on federal elections, but it would not include the penumbra, if you like, or the circumference of the power that authorises protective laws.  That, in our submission, would fall outside the scope of any exclusive power.  I think, perhaps, in light of the time, I will simply make that very short point unless I can be of further assistance to the Court?

KIEFEL CJ:   Thank you, Ms Solicitor.  Solicitor‑General for Western Australia.

MR THOMSON:   May it please the Court. I propose to start by making some brief comments about the effect on State elections of the prohibition in section 275 of the Electoral Act (Qld) insofar as section 275 operates to ban political donations which shall be or may be used for Commonwealth electoral expenditure. In the oral summary I have described the donations which shall be used for Commonwealth electoral expenditure as Commonwealth donations and donations which may be used for that purpose which are for unspecified electoral purposes as untied donations which, I think, has also been referred to as “the unallocated middle” by the plaintiff.

Similarly, your Honours will see that the decision is a reserved one.  You will see from page 23 the case appears to have been heard on 22 March 1920 and delivered a month later on 22 April 1920.  In our respectful submission, there is nothing to suggest that the point was somehow overlooked by the Court or abandoned by those persons who were pursuing it and, as we earlier pointed out, Daniell itself is not consistent with a “touches and concerns” test as promoted by our friends for the Commonwealth.

Secondly, your Honours, the Commonwealth submit that Queensland has to legislate alive to the legal and practical world in which it is legislating.  That proposition is not gainsaid by anything that Queensland makes submissions on.  On the other hand, the fact that people are organising their affairs at the moment on one basis is not – and there is no statement of principle to say that that denies a legislative power to legislate in a way that would alter that.

Can we also deal with the submission that it is said that the position taken on head of power would have a profound implication on the Commonwealth system.  In that regard, it is first appropriate to observe, as was apparent from Mr Kirk’s submissions in this regard, Queensland perhaps puts it less broadly than some of the intervening States, and ultimately it is the focus on our submissions in that regard.  It is no part of our case – and I will not rehearse where it is in the outline, as your Honours will see in the outline – but it is no part of Queensland’s case to say that the States are saying that they can regulate these areas to the exclusion of the Commonwealth case.  It has not been put to your Honours in that way either orally or in writing and we simply wish to make clear that the line on the submissions was already made.  We do not press for such an approach to the matter.

An issue was raised in relation to the reading down in that it did not apply in relation to section 109.  I thought we made clear, but if we had not, that the reading down argument pressed was only in response to exclusive power.  We had not made the submission, I did not understand, in relation

to the 109 point.  Unless there are any questions, that is our submission in reply, thank you.

KIEFEL CJ:   Yes, thank you.  The Court reserves its decision in this matter and adjourns to Wednesday, 20 March at 10.00 am.

AT 12.55 PM THE MATTER WAS ADJOURNED