Spence v State of Queensland

[2019] HCATrans 46

[2019] HCATrans 046

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 THURSDAY, 14 MARCH 2019, AT 10.01 AM

(Continued from 13/3/19)

Copyright in the High Court of Australia

KIEFEL CJ:   Yes, Mr Solicitor.

MR DONAGHUE:   Your Honours, there are two remaining topics that I need to address.  One is the subject matter of the Commonwealth Parliament’s power with respect to federal elections and the other is Melbourne Corporation. 

Before I do that, can I return briefly to a question your Honour Justice Gageler asked Mr Kirk yesterday about 302D.  Your Honour will recall you asked does that prohibit a foreign donation to a political party even if earmarked for a State electoral purpose?  In our submission, the answer to that is no, by reason of subsection (1)C of that provision.

GAGELER J:   Thank you.

MR DONAGHUE:   On the question of the subject matter of federal elections, I have already taken your Honours to Leask v The Commonwealth in the middle of page 601 for the proposition that a law is within power if it operates on or affects the acts, facts matters or things within the subject matter.  That of course raises the question, what are the acts, matters, facts or things that fall within the subject matter of elections to the Senate or the House of Representatives?  It is to that topic that my submissions are now addressed.

The starting point is the well-established principle that, in answering that question, the Court should construe the words used in conferring power with all the generality that the words admit.  Can I ask your Honours to go briefly back to Work Choices, which is in volume 10 of the joint book of authorities, as a convenient encapsulation of the settled characterisation principles. It is (2006) 229 CLR 1 and the relevant passage is paragraph 142 at the foot of page 103. In that passage, five members of the Court say:

The general principles to be applied in determining whether a law is with respect to a head of legislative power are well settled.  It is necessary, always, to construe the constitutional text and to do that “with all the generality which the words used admit” –

and their Honours cite a number of authorities for that proposition. 

The character of the law must then be determined by reference to the rights, powers, liabilities, duties and privileges which it creates.  The practical as well as the legal operation of the law must be examined.  If a law fairly answers the description of being a law with respect to two subject matters, one a subject matter within s 51 and the other not, it is valid notwithstanding there is no independent connection between the two subject matters.

So the question is:  is there the sufficient connection with federal elections?  If there is, it does not matter whether there is also a connection with State electoral processes in terms of determining the validity of a Commonwealth law and of course:

the justice and wisdom of the law, and the degree to which the means it adopts are necessary or desirable, are matters of legislative choice”.

While your Honours have Work Choices could you also turn to Justice Callinan’s judgment at page 316, paragraph 765, where his Honour repeats in the opening sentence the principle that:

constitutional provisions, especially those conferring powers, should be read “with all the generality which the words used admit” –

and there is a longer citation of authorities in the Court dealing with that.  I ask your Honours to go to that for the passage over the page at paragraph 767 where his Honour sets out in full a familiar quote from Jumbunna Coal, referring in the first paragraph of the quote to the importance of the fact that in construing a:

Constitution broad and general in its terms, intended to apply to the varying conditions –

It is important that a broad construction – or that it be remembered that it is a document of that kind and that has the consequence:

For that reason, where the question is whether the Constitution has used an expression in the wider or in the narrower sense, the Court should, in my opinion, always lean to the broader interpretation unless there is something in the context or in the rest of the Constitution to indicate that the narrower interpretation will best carry out its object and purpose.”

Now, in our submission, for the reasons that I have already developed yesterday, the context here, rather than pointing against the broader construction supports it because of the narrow, specific grant of powers to the States in contrast with this scheme of conferring powers on this topic with respect to the Commonwealth. So we submit that the starting point is that if your Honours are in any doubt the wider rather than the narrower sense of federal elections should be adopted in giving content to the subject matter of the power conferred by sections 10, 31 and 51(xxxvi).

That is, in our submission, how the Court has approached the matter in the past and I am going to take your Honours very briefly to passages in three cases to make that good.  The first is ACTV v Commonwealth (1992) 177 CLR, which is in volume 3 behind tab 20.  If your Honours, when you get that, could turn first to page 152, just to show your Honours the provision in question or one of the key provisions in question. 

So there were a number of similar provisions challenged in this case but one of them was 95B which, as your Honours can see set out at the bottom of the page, imposed obligations on broadcasters.  The object of the power was a broadcaster rather than a participant in a federal electoral process but the broadcaster was prohibited in various different ways dealt with by the different paragraphs from broadcasting any matter rather than exempt matter on behalf of the government or of the Commonwealth of a Territory or of a State in the various different subsections.

All of the judgments in ACTV proceeded on the basis that that prohibition on the broadcaster would have been within power, but for the implied freedom of political communication.  There were two powers, the broadcasting power, but also the federal election power was relied upon, and discussed in some of the judgments.  The passage I am going to take you to is in Justice Brennan’s judgment, which is where you are at the moment, a few pages on at page 156.  At the bottom of page 156, Justice Brennan says:

Section 95B is also a law with respect to Commonwealth elections.

His Honour approves the analysis of Justice Isaacs that I took your Honours to yesterday in Smith v Oldham:

it was argued that “[l]egislation which goes beyond securing the free collection of opinions of the people and which seeks to limit the material from which those opinions derived –

is not with respect to election.  Then his Honour quotes with approval Justice Isaacs’ rejection of that submission.  Then under the quote, there is a reference to Evans v Crichton-Browne where the Court said the:

statement “is no doubt true as a statement of general principle” –

That is Justice Isaacs’ statement.  Then about five lines down in that paragraph:

The legislative power of the Parliament over elections thus extends to the making of laws governing the publication of material calculated to affect the voters’ electoral judgments, even to the extent of prohibiting the publication of misleading information.  It is precisely because the power is so broad that it is necessary to imply –

the limitation.  So part of, in his Honour’s analysis, the reason for the implied freedom of political communication is that we start with a very wide legislative power with respect to federal elections.  There is no suggestion there that prohibiting broadcasters from publishing advertising material is only valid by reason of some incidental connection with federal elections.  In my submission, his Honour is recognising that the power itself to make law with respect to elections extends to prohibiting material calculated to affect voters’ electoral judgments.  So we have gone well beyond the actual mechanics of casting and counting votes.

Similarly, in Mulhollandv Australian Electoral Commission (2004) 220 CLR 181, which is in volume 9 of the joint book behind tab 51, if your Honours turn to the – when you get it, to page 205, paragraph 61, there is a heading at the bottom of page 205:

Representative government under the Constitution

The scope of Commonwealth legislative power with respect to elections –

That is what his Honour is dealing with.  Over at the top of 201 about four lines down you will see that the powers that are identified are the same powers as in issue here 9, 10, 31, 51(xxxvi).  So, it is those powers that are the subject of the discussion at – sorry, your Honours, I am told I misspoke – page 206, four lines down, there is the identification of the powers. 

The discussion to which I am directing your Honours’ attention is that on page 207 – 64 is relevant but I would pass over it.  Paragraph 65 his Honour sets out in full a passage from Justice Gummow’s judgment in McGinty about the various ways in which the Constitution leaves it to the Parliament of the Commonwealth to develop the electoral system and in the bottom half of that quote from about halfway down, amongst the different matters that are identified as the subject of this power, there is:

the question of voluntary or compulsory registration of voters and of voting itself; the control of electoral rolls; the conduct of the ballot –

probably none of that is controversial, but it continues:

limitations on the electoral expenses of candidates; the financial deposits to be made by candidates and the conditions of their forfeiture; the role of political parties at elections; the question of financial support for political parties –

So, all of those, again, we submit, are wide‑ranging topics treated by his Honour as part of the subject matter of laws with respect to federal elections and then in paragraph 66 his Honour applies the conventional characterisation principles including as setting out in Work Choices to determine whether there is a sufficient connection with respect to elections – so, from the top of the page:

A law of the Parliament is made “with respect to” the subject matter of a power when it relates to or affects that subject matter –

That is Leask:

and the connection is not “so insubstantial, tenuous or distant” that it cannot properly be described as a law with respect to that subject matter.  A law that regulates the method of voting in a federal election is a law with respect to elections, as is a law which protects the electoral or voting system that the Parliament selects . . . Thus, a law which proscribes conduct that interferes with the electoral system that Parliament has chosen is a law with respect to elections.

Well, that is this case, in our submission.  What the State – what 302CA does is excludes State laws that interfere with the electoral system allowing some – prohibiting some donations, allowing others subject to a disclosure regime and all Parliament is doing, in the same way as it did in Bayside that I took your Honours to yesterday, is excluding State law to the extent that it cuts across that system.  It is a law with respect to federal elections.

Finally, your Honours, the last case is Unions (No 1) (2013) 252 CLR 530 which is in volume 13 at tab 70. If I could start with the judgment of your Honour Justice Keane page 574, paragraph 121, at the bottom of the page where your Honour is dealing with the relationship between political campaigning and political communication, in the second half of the paragraph:

No doubt some political communication occurs without the need for payment; but, equally, there can be no doubt that a restriction on the availability of donations will substantially diminish the extent of political communication.

We respectfully adopt that statement and, if it is right, then it shows that there is more than a tenuous or insubstantial connection between laws concerning political donations and federal elections, and that is all we need to answer the head of power challenge.  In my submission that statement is entirely consistent with the statement in the plurality at paragraph 38 of the reasons, which is back on page 554, where the plurality hold that the section in question, 96D:

effects a restriction upon the funds available to political parties and candidates to meet the costs of political communication by restricting the source of those funds . . . The party or the candidate will therefore need to fund the gap.

Then at paragraph 39 it is held that that constitutes a burden on political communication. As I think I briefly submitted yesterday, in our submission, once one concludes that an electoral law is burdening political communication, it must follow that that law, at least in that application, has more than a tenuous or distant connection with federal elections, because it cannot both burden political communication in a way that enlivens the implied protection from all of these constitutional provisions ‑ 724 et cetera – without there being a connection between the political communication that is to be ‑ sorry, I will start that again. There cannot be a tenuous or remote connection with federal elections in circumstances where there is, by the law in question, a burden on the operation of the political system for which the Constitution provides.

GAGELER J:   That is very difficult to accept in light of cases like Levy, for example, the Duck‑Shooting Case.

MR DONAGHUE:   Your Honour, that is why I said at least in its relevant application.  So obviously the Commonwealth could not enact a law generally regulating duck shooting in reliance on its electoral power, but where the laws in question here are – as they are, of course, in the Unions Cases and in McCloy ‑ we are talking not about State laws of general application, but State electoral laws that are burdening political communication.

In my submission, those laws – I might need to qualify the submission slightly.  Those laws, where they operate only in a State context, are held to engage an implied freedom because of the indistinguishable nature of all the topics of federal and State political communication.

But here, the proposition that I am advancing is, I accept, slightly narrower than the way that I put it earlier.  It is that in circumstances where the Commonwealth law, which is sought to be supported as a head of power, is connected with a topic, the regulation of which burdens political communication, so that connected here with the topic of political donations related to federal elections, if the connection to which Justice Keane drew attention in the passage I have taken your Honours to is right, then regulating donations does necessarily involve regulating something that has a nexus to political communication concerning electoral choice at the federal level.

EDELMAN J:   Is not one difficulty with that submission, though, that in a way it is circular because you only have a burden on political communication, or a substantial burden upon – or not unreal or tenuous burden on political communication if the law is within power?  If the law is not within power, it does not place any burden.

MR DONAGHUE:   That would be so, your Honour, but here my endeavour is to address the question of whether a law regulating the availability of donations has a connection to the subject matter of federal elections – that is all I am trying to do.  My submission is that if the availability of donations substantially diminishes the extent of political communication, then the availability of donations is doing something that has more than a tenuous connection with federal elections because, leaving aside the position in the State context, and I accept I may have spoken too widely there, at the federal level, if it be true that the availability of donations at the federal level, a restriction on that will substantially diminish the extent of political communication at the federal level, then that is a nexus – a sufficient nexus between regulating donations and federal elections.  It is an example of an application of the broader approach reflected in Smith v Oldham, ACTV and Mulholland in the donations context, and that is really the only reason I have taken your Honours to it.

GAGELER J:   Could I just go back for a moment to your submissions on the scope of the power with respect to elections?

MR DONAGHUE:   Yes.

GAGELER J:   The submissions to some extent differentiated, and to some extent, I suspect, failed to differentiate between the subject matter of the power, that is, elections, and the scope of the power to make laws with respect to elections.  But when you got Mulholland and drew upon that to make your submission in respect of the circumstances of this case, I thought you accepted that this law that you are seeking to defend is a law with respect to elections because it protects the electoral process.  Is that the way you put it?

MR DONAGHUE:   One of the ways I put it is that it protects the electoral process from interference from State laws.  It says, notwithstanding any State electoral law, you are a participant in the federal electoral process and may receive this donation, this being a donation that the federal law does not prohibit because (1)(d) makes that one of the criteria, and that ceases to be protected once the funds cease to be available for a federal electoral purpose by being allocated to a State model and that requires disclosure.

GORDON J:   Is that not the point?  When Mulholland and the other cases talk about context, here the context is not just 302CA.  The context is the context in which that provision sits within the part, where you have got disclosure both of donations and of expenditure.

MR DONAGHUE:   Absolutely, your Honour.

GORDON J:   So is your answer to Justice Gageler’s question limited in the way in which you have just put it; that is, that it is a law with respect to elections which protects electoral process?  It is not just limited to the exclusion of the States, is it?  In other words, as I understood your earlier argument, it seeks to protect the electoral process in the context in which it sits – this regime that the Federal Parliament has set up.

MR DONAGHUE:   That is so, and I am not conscious of having said anything that departed from that, but I did not intend to do so.  Focusing on the specific work that 302CA does, all it is doing is excluding prohibitions under State or Territory law, but it is doing so within that wider context to which your Honour refers and all of that, in my submission, gives it a connection with federal electoral power.  It is operating - the connection is, in my submission, of relevantly a closely analogous kind that identified in Bayside where, again, the law in question was a law excluding State and Territory law and the Court said that had a direct and substantial connection with the subject matter of the power.

If that set of submissions I have just made is right, then one concludes the head of power challenge without needing to reach any question of incidental power, whether implied incidental power in the area of 10, 31 and 51(xxxvi) or express incidental power under 39.  We therefore submit one does not need to get to the incidental power questions. 

But I undertook to address your Honours on the Second Uniform Tax Case (1957) 99 CLR 575 which, in my submission, is principally relevant if we are in the territory of incidental power. That case is in volume 13 of the joint book, behind tab 75. This was a decision, while your Honours are getting it, that was decided by a 4‑3 majority of the Court, holding that a particular provision of the Income Tax and Social Services Contribution Act was invalid.  The particular provision is set out in the middle of page 612 of Chief Justice Dixon’s judgment and the effect of it was that a taxpayer was required not to pay any income tax under State law until federal income tax had been paid for the relevant year of income.  At the bottom of the next page, 613, or about point 6 or point 7 on the page, at the end of the line there is a sentence beginning with the word “Its”.  Chief Justice Dixon said:

Its intended operation is not dependent upon the amount of the federal tax for which a taxpayer is prospectively liable nor upon the existence of claims of the State that actually do compete with those of the Commonwealth at any given time.

So it did not depend on some assessment that there was a risk that, if the State tax was paid first, the taxpayer would not be able to pay the Commonwealth.  The Chief Justice said:

It has nothing to do with bankruptcy, insolvency or liquidation or any other administration of assets.

So it was not a case where there was a limited pool of funds that would be available and indeed the Court upheld the provision.  Chief Justice Dixon said he would unhesitatingly uphold the provision that gave the Commonwealth priority in a bankruptcy or winding‑up type situation.  So the provision in question - and his Honour put this in terms at about point 8 on the page:

It simply is 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 –

Now, that being the legal effect of the provision, his Honour asked the question immediately below what I have just read, what power supports a law of that kind?  The suggested answer was 51(ii), the power to make law with respect to taxation, and the either implied or express incidental power – which his Honour said at the top of 614:

It is unnecessary for the present purpose to distinguish between –

Then in the next paragraph on 614, his Honour notes that the tax power in 51(ii) has been construed by this Court as referring only to the topic of federal taxation for federal purposes and because 51(ii) is only about federal taxation for federal purposes, and because the law in question was a command not to pay State tax, his Honour says, in the middle of 614:

Clearly enough s. 221(1)(a) can find no justification unless it be as something incidental to the main power.

The discussion that then follows is about the ambit of the incidental power.  That is why I say, if your Honours accept what I have said about the subject matter of federal elections, you do not need to get to this case.  What the Chief Justice then held, discussing the incidental power, was that one had to look at the nature and subject matter of the power in determining its scope, that purpose would assist.  His Honour said:

Here the purpose is to make it more difficult for the States to impose an income tax.

That is in the middle of 614.  Victoria has picked up that concept and said that the purpose of 302CA is to make it more difficult for the States to regulate State elections.  We say, well, that is where the argument falls down because as a matter of construction, for all the reasons that I have addressed, that is not a reasonable characterisation of the purpose of 302CA, and I will not repeat any of the reasons we have given for that. 

But even if we are in the territory of incidental power, and even if one approaches this question in the way that is set out at the bottom of 614, in our submission, the case is distinguishable because, given that 221(a) had all the features that I have just identified, not linking the obligation not to pay the federal tax to anything other than the existence of the State tax, not requiring there to be any connection between the existence of that tax and inability to pay the federal tax, there were not the additional connections with power that, in our submission, exist in this case, and that I have already addressed your Honours on.  So, for example, at the top of 615, about seven or eight lines down, the Chief Justice asks:

why should a debt for State income tax be picked out as the indebtedness the discharge of which would lessen the taxpayer’s ability to pay.

Any other debts might also impact on the capacity to pay federal income tax.  So there was an irrationality, if you like, to the selection of the State tax as the target of the Commonwealth provision, which we submit again simply is not replicated in this regime.  Here, the regime looks at State electoral laws to a particular category of participants who, in our submission, are persons who, having received a donation, can reasonably be expected to spend that donation in connection with the activities of those recipients, being federal campaigning or State campaigning – it is going to be spent for one of those.

Campaigning is probably too narrow – purposes, State electoral purposes or federal electoral purposes, it is going to be spent on one or the other.  So there is the regulation of that money is a topic that is connected by way of subject matter.  Obviously, the connection is strongest where the gift is a gift that is required to be used.  I accept that there are stages so that at the level of money required to be used, as referred to in 302CA, we have, in our submission, a very strong connection.  Where one moves to only to gifts that may be used I have not put that that connection is itself enough to make the law a law with respect to federal elections but your Honours do not need to and, in my submission, should not fix just on that criteria divorced of the other aspects of the statutory scheme that point to the connection with federal electoral power. 

For that reason, we submit that we are not in the territory of, for example, the telephone services example and the payment of the debt because we have the additional connections that were not present in the regime in issue there.  I do not know if that addresses your Honour Justice Gageler.

GAGELER J:   Thank you.

MR DONAGHUE:   Very briefly, then, against that background, Queensland’s argument about absence of power does not seem to contest that if your Honours apply the principles I have just been dealing with the Commonwealth law would be within power.  Their proposition is that if the Commonwealth has exclusive power the State must have an equivalent, reciprocal power and that is what takes the Commonwealth law beyond power. 

Our answer to that can be very shortly put. The Commonwealth exclusive power as we have developed it has its constitutional grounding in the set of provisions in the Constitution that give narrow and specific powers to the State and extensive powers to the Commonwealth. There is simply no equivalent constitutional foundation for implying the same exclusivity at the State level.

One cannot take an argument grounded on a set of provisions that leads to a conclusion for the Commonwealth and then without an equivalent set of provisions seek to achieve the same answer at the State level and that is really why the jurisprudence of this Court has long recognised that because one is dealing in the Commonwealth context with a Parliament with a list of enumerated powers, the question and the only question that one asks in identifying the validity of the Commonwealth law is, is there a sufficient connection to one of those powers.  That is it. 

One does not seek to draw some sort of balance by implication between the Commonwealth and the States of the kind that is implicit within Queensland’s assertion that there must be balance if the Commonwealth has an exclusive power for the State to have an analogous one.

Can I deal very briefly with Melbourne Corporation?  The most recent, I think, formulation of the principle by this Court is in Fortescue (2013) 250 CLR 548, which is in volume 6 of the joint book at tab 35. In the joint reasons of Justices Hayne and Justices Bell and Keane starting at page 609, the principle was set out quoting Justice Dixon in Melbourne Corporation recognising:

“The foundation of the Constitution is the conception of a central government and a number of State governments separately organised.  The Constitution predicates their continued existence as independent entities.”

But, then, in the second half of paragraph 130 their Honours said:

Hence, as the decisions in Austin and Clarke each demonstrate, the Melbourne Corporation principle requires consideration of whether impugned legislation is directed at States, imposing some special disability or burden on the exercise of powers and fulfilment of functions of the States which curtails their capacity to function as governments.

The extent and importance of the States’ function of managing their lands and mineral resources must be acknowledged.  But the plaintiff’s submissions contended for a view of the Melbourne Corporation principle which, if accepted, would subvert not only the position established by the decision in the Engineers’ Case but also s 109 of the Constitution.

That is a reference back to the passages that Mr Kirk took you to at 119 and 120 that I will not repeat.  Looking at this law, 302CA, it is not directed at the States.  It does not impose a special disability or burden on the States.  The law is directed to the capacity of participants in the federal electoral process to receive donations.  It does not, in our submission, discriminate against the States as polities or impose special disabilities or burdens on them. 

What it does is express the relationship between the Commonwealth law, including the whole regulatory regime to which Justice Gordon referred earlier, and a State regime that potentially intercepts with it and that is a common thing for the Commonwealth to do.  It is dealing with the intersection of laws rather than burdening the States as polities or their high officials or their capacity to function and it is not, in our submission, an operation – a provision of a kind that in any way engages Melbourne Corporation, hence the very short shrift the equivalent submission received in Bayside in the context of an equivalent provision.

The force of the observation at 131 about subverting Engineers’ in 109, it is rather borne out by the – in our submission, somewhat astonishing proposition in Queensland’s reply at paragraph 20 that in order to avoid Melbourne Corporation invalidity, the Commonwealth needs to modify its laws by establishing separate campaign accounts, et cetera, so as to make sure it does not intrude into the area regulated by the State law, that is, the Commonwealth should do to avoid Melbourne Corporation the very thing that the States would do to avoid the operation of 302CA and that is just, in our submission, a reversal of the priority for which the Constitution provides.

There is extensive reliance in a number of the State – Queensland and the State submissions on Justice McHugh’s statements in ACTV that I will not take your Honours back to where his Honour referred in one sentence to the fact that the powers of the Commonwealth do not extend to interfering with the constitutional and electoral processes of the State.  It is true that his Honour said that but both before and after that passage in at least three places, his Honour put the principle more precisely as a principle that prevents laws whose immediate object is to interfere with the electoral processes of the State.

The provision that caused his Honour to say that was a provision in subsection 95D(3) and (4) which prohibited State Governments and candidates in State elections from advertising in State elections.  That was the provision that was held to be invalid on Melbourne Corporation grounds in ACTV by a number of members of the Court.

So that is a law that is aptly described as a law, the immediate object of which is to interfere with State elections – State parties, State governments, State elections.  Interestingly, other provisions were also challenged on Melbourne Corporation grounds, including provisions that prohibited State Governments from advertising in the context of Commonwealth elections. 

Justice Brennan, having upheld the Melbourne Corporation challenge to the State provision I have just identified, dismissed the Melbourne Corporation challenge to those other grounds, that is, his Honour upheld the provisions that prevented State Governments advertising in the context of Commonwealth electoral campaigns as not interfering on Melbourne Corporation grounds.

Ultimately, the State’s Melbourne Corporation submission reduces to the proposition that Melbourne Corporation gives them unfettered choice in their chosen regulatory model in relation to State elections, even if that choice goes beyond regulating State elections and affects federal elections so that they say that 302CA(3), by leaving only a zone free for State laws to

operate if they go beyond State electoral processes and affect the Commonwealth elections, they say by leaving only that area unoccupied the Commonwealth has constrained electoral choices in a way that infringes the Melbourne Corporation principle.

That submission fails to recognise that in any area of concurrent legislative power Commonwealth laws may constrain the capacity for the States to enact valid overlapping laws.  That is a just a feature of our constitutional system.  The passages upon which they rely in Austin and Clarke, which I will not take your Honours to in the light of the time, are passages that do not go so far as they suggest. 

Those were cases involving Commonwealth laws, not of general application that specifically concerned the remuneration of senior State officials – judges, parliamentarians – and that was a point emphasised in Clarke, at paragraphs 72 to 75, and it was in the context of specific Commonwealth laws concerning those high officeholders that constrained the choices of the State as to the remuneration of the high officeholders that Melbourne Corporation was held to be engaged.  That is a context far removed from that now before the Court.  Your Honours, unless there are any further questions on that part of the case, Mr Herzfeld could address your Honours on Metwally.

KIEFEL CJ:   Yes, Mr Herzfeld.

MR HERZFELD:   Thank you, your Honour.  Your Honours, the Metwally issue arises on the premise that section 302CA(3)(b)(ii) disapplies subsection (1) retrospectively.  Queensland’s submission is that section 302CA as a whole is invalid because this retrospective operation is contrary to Metwally.  We advance three propositions in answer to that, and they are set out in our oral outline at point 7.

The first proposition that we advance is that Metwally does not result in the invalidity of Commonwealth law.  To demonstrate that, can your Honours please turn to Metwally 158 CLR 447, which is in volume 13 of the joint bundle of authorities at tab 73. I am conscious of the time, so I will seek to do this as quickly as I can.

EDELMAN J:   Sorry, what tab was it, again?

MR HERZFELD:   It is tab 73, your Honour.  Your Honours can see in the reasons of Chief Justice Gibbs at page 452 of the report, the facts first set out, and then the issue at about point 8 of the page which was whether the amendment in 1983 of the Racial Discrimination Act (Cth) by section 3 of the 1983 Act which inserted a new section 6A into the Racial Discrimination Act (Cth), which your Honours can see set out relevantly at the top of page 453, effectively whether that removed with retrospective effect the inconsistency between the Racial Discrimination Act (Cth) and the State Anti‑Discrimination Act that had been recognised in Viskauskas and whether that removal meant that retrospectively there was no longer any inconsistency, so that the State Act could then operate once again in relation to past actions.

The questions which were removed into the Court are set out at the bottom of page 453, over to the top of page 454.  Relevantly, the first question asked:

Whether the enactment of the provisions of s. 3 of the Racial Discrimination Act 1983 was beyond the power of the Parliament of the Commonwealth –

So the first question was cast in terms of the validity of the Commonwealth law.  Now, the conclusion of the majority, comprising Chief Justice Gibbs and Justices Murphy, Brennan and Deane, was that the new provision did not re‑enliven retrospectively the provisions of the New South Wales State Act.  But none of their Honours concluded that the Commonwealth provision was invalid.

Your Honours can see that first of all in the answers given to the questions.  If your Honours turn to page 459 in the reasons of Chief Justice Gibbs, at about point 4 of the page, his Honour said that:

The questions are not felicitously phrased.  I do not find it necessary to answer question (i) –

which was the question about the power of the Commonwealth.  His Honour simply answered question (ii), effectively by saying that the New South Wales provisions remained inoperative.  His Honour Justice Brennan agreed with those answers at 475, at about point 5 of the page.  Perhaps the clearest explanation as to why that is so can be found in the reasons of Justice Murphy.  If your Honours turn to Justice Murphy’s reasons at page 469, at about point 8 of the page his Honour explained, in the passage beginning “Neither federal nor State Parliament can render”, that relevantly the Federal Parliament could legislate to remove an inconsistency and:

although the federal Parliament cannot undo the previous invalidating effect of s. 109, it can clear the way for the State Parliament to make a fresh State Act to apply retrospectively –

So that both Parliaments, acting together, can, in substance, achieve a retrospective alteration of the effect of section 109. His Honour then returned to the answers to the questions at page 470 at about point 8 of the page. His Honour said:

The wording of the questions creates a difficulty.  Parliament is entitled to spell out its intention retrospectively –

that is the Federal Parliament:

The purported retrospective operation . . . does not deny the operation of s 109 –

but the federal legislation is not invalid.  His Honour then went on to explain the answer to the questions that he would favour.  A similar analysis which I will not take your Honours to in the interests of time can be found in the reasons of Justice Deane starting at page 479 at point 2 of the page down to about point 7 of the page and then over the page on 480, beginning “The second matter”.  In fact, it is because the Commonwealth law is not invalid that the solution described by his Honour Justice Murphy can work.  The Commonwealth law retrospectively clears the field.  It on its own does not re‑enliven the State law but that law is valid – the Commonwealth law is valid and a new State law retrospectively can then occupy that field without any inconsistency.

In fact, Queensland relies on this prospect at paragraph 18 of its reply as a reason that Metwally should not be overruled because the submission is that Metwally produces no inconvenience because any unintentional covering of the field by the Federal Parliament can be overcome by both the Federal Parliament and the State Parliaments acting together. I will say something about that prospect shortly but, if it is right, as Justices Murphy and Deane said, the Commonwealth law cannot be invalid. It is valid but it is incapable on its own of reversing the effect, as the majority had it, of section 109 once that section has already rendered a State law invalid.

So, assuming the approach of the majority in Metwally applies here, it would not result in the invalidity of any part of section 302CA.  All that would follow is that the retrospective disapplication of subsection (1) by subsection (3) would not work to re‑enliven any State laws.  No part of subsection (3) would be invalid; simply the State laws which subsection (3) seeks to re‑enliven on this view of the world would not be re‑enlivened.

EDELMAN J:   Unless they were re‑enacted retrospectively.

MR HERZFELD:   By the States, that is right.  So, for that reason, Queensland cannot rely on Metwally to invalidate any part of section 302CA.  It cannot rely on Metwally to remove 302CA and therefore remove the inconsistency between 302CA and the impugned Queensland provisions.

GAGELER J:   So, it is not invalid; it is just not legally effective.  Is that what you are saying?

MR HERZFELD:   It is not legally effective to remove the effect of section 109.

GAGELER J:   Which is all it purports to do, is it not?

MR HERZFELD:   Subsection (3) has both ‑ ‑ ‑

GAGELER J:   Subsection (3)(b)(ii) operating retrospectively.

MR HERZFELD:   In its retrospective operation, that is what it purports to do, yes, but subsection (3) would not be rendered invalid and as a result section 302CA as a whole would not be rendered invalid and therefore Queensland cannot rely on this principle to get rid of 302CA, which is the cause of the inconsistency between the Commonwealth legislation and the impugned Queensland provisions.

The second proposition that we advance is that Metwally is distinguishable but in light of what Mr Kirk has already said on this topic, and the time, I will simply rely on our written submissions in reply, paragraphs 22 to 24, and I will not develop that proposition orally.

The third proposition is that, if the point is reached, we submit that Metwally should be reopened and overruled.  The minority, consisting of Justices Mason, Wilson and Dawson, held that the amendment to the Racial Discrimination Act did retrospectively remove the inconsistency upon which section 109 had acted and as a result the State was retrospectively rendered valid.

KIEFEL CJ:  It altered the basis upon which section 109 operates.

MR HERZFELD:   That is so.

KIEFEL CJ:   And you adopt that reasoning.

MR HERZFELD:   We do, your Honour.

KIEFEL CJ:   Metwally has not, I think, been applied by this Court.

MR HERZFELD:   No, it has not.  In Queensland’s submissions in reply at footnote 19 they refer to two decisions where it has been referred to, the first which is the Native Title Act Case.  The proposition for which the majority reasons stand was cited, but it was held in that case that it did not apply.  The second reference that Queensland gives is the reasons of Justice Gummow in Momcilovic, and again his Honour simply cited the case but did not apply it.

So we do rely on the reasons of the minority. In our submission, they follow logically from four basic propositions about section 109 and the scope of Commonwealth power. The first proposition is that the Commonwealth Parliament can make retrospective laws, and of course I am using “retrospective” in its true sense of “retroactive”. The second proposition is that the Commonwealth Parliament can address the relationship between Commonwealth and State laws, including by specifying an intention not to cover the field, which is what was at issue in Metwally.

The third proposition is that the operation of section 109 depends on the content of the Commonwealth and State laws. The fourth proposition is that the effect of section 109 is to render a State law inoperative during the period of any inconsistency with Commonwealth law, but not to render it void.

In our submission, it follows from those propositions that, if there is at a particular point in time an inconsistency between Commonwealth and State law but the Commonwealth law is retrospectively amended to remove the inconsistency, the basis upon which section 109 rendered the State law inoperative is retrospectively removed. Contrary to the reasons of the majority, this does not involve the Commonwealth law in any way overriding or contradicting with section 109. It simply alters with retrospective effect the basis upon which section 109 operates.

EDELMAN J:  The third proposition that you make really needs to be that section 109 depends on the content of existing and future retroactive federal and State laws, or federal laws, not just those laws which might be read just as being existing laws.

MR HERZFELD:   That is so but that, we would say, follows from the first proposition, which is that the Commonwealth can make laws of that kind.

GAGELER J:   And your fourth proposition makes it rather difficult to accept the explanation given by Justice Murphy, I suspect.

MR HERZFELD:   Yes.

GAGELER J:   The thing can be cured by retrospective State legislation, because the State legislation was never invalid, in the sense of creating a void that needed to be filled.

MR HERZFELD: That is right, and we would rely on the exposition which covers some of these matters, in the reasons of Justice Mason at pages 460 to 461, and Justice Dawson at 485. The central outcome of the majority’s reasons is to find in section 109 a limit to the effectiveness of Commonwealth retrospective legislation and, in our submission, there is simply nothing in section 109 to support such a limit. There is nothing in the text of section 109, which does not speak of Commonwealth power or the validity of Commonwealth laws at all and, in our submission, it cannot be the source of an implied limitation of that kind, simply having regard to its function. Again, we rely on the reasons of Justice Mason at pages 461 to 463 and the reasons of Justice Dawson at page 486.

In terms of the reasons often relied upon by this Court in deciding whether a previous decision should be reopened and overruled, we would make these points.  The first is that, with respect, the reasons of the majority are contrary to basic principle, they being the four propositions that I have identified.  The second is the matter that I have already raised in answer to a question from the Chief Justice, that Metwally has not subsequently been relied upon in any decision of this Court.  It also has not been relied upon by the Commonwealth or the State Parliaments or Executives in such a way that would militate against overruling it. 

The final point on that topic is that the majority’s approach which was to some extent driven by a desire to protect the citizen from the operation of retrospective Commonwealth laws, only very imperfect protection is provided, precisely because the effect of the majority’s reasons can be overcome by the Commonwealth and State Parliaments acting together.  Conversely, the decision does cause inconvenience, because it means that if there is an unintentional covering the field by the Commonwealth, for example, it cannot be cured by the Commonwealth acting alone. 

The final point is this.  If what I have said is incorrect and the retrospective operation of that part of section 302CA is invalid, it is obviously only that part of section 302CA that is invalid; that is, the retrospective operation of (3)(b)(ii).  In our submission, it should not be concluded that without that retrospective effect, the whole of section 302CA was intended not to operate.  So, if the Queensland submissions are correct that that retrospective operation is beyond power, the provision should be read down, and the reading down is that subsection (3)(b)(ii) should not have any retrospective operation.  That is, any disapplication of subsection (1) would apply only prospectively from the time that the gift is

identified as being for a State or Territory purpose.  That does not have to happen at the time of receipt of the gift.  It could happen later.  But on this reading down, it is only when that happens later that prospectively the State laws are then allowed to operate, by the operation of subsection (1).

In any event, if this point is reached on this reading down, the balance of section 302CA would remain operative and in force and would still provide a basis for the Queensland provisions to be inconsistent with federal law.  If the Court pleases.

KIEFEL CJ:   Solicitor‑General for Queensland.

MR DUNNING:   Thank you, your Honours.

KIEFEL CJ:   Mr Solicitor, the Court will not require further submissions on whether the basis for or justification for the Queensland legislation is distinguishable from that in McCloy. 

MR DUNNING: Thank you, your Honour. Your Honours, can I commence, if I may, in this way. In our respectful submission, what ultimately falls for determination in this case notwithstanding the range of issues that the parties have framed before the Court, they ultimately lead to the inquiry about whether the Constitution provides a coherent scheme whereby the ongoing existence of the States as separate polities preserving their own forms of representative and responsible government, they might protect by efficacious legislation of their own Parliaments.

In that regard, can I deal with some matters at the outset, and this starts with what appears in paragraph 3 of our oral outline.  In our respectful submission, it is an important consideration and an important consideration in addressing the way the case is framed against Queensland by each of the plaintiff and the Commonwealth that there is an assumption of composite objectives of political parties and as a result of that assumption the Queensland laws are to be tested against that.  In our respectful submission, there is neither a constitutional nor even an existing legal basis for that assumption.

Your Honours have already been taken to the definition of “political parties” in each of the relevant Electoral Acts and I will not trouble your Honours to take it up again, but critical for present purposes is that in each case they provide that a political party is an organisation whose object - or one of whose objects - is the promotion of election of candidates to the House or Houses of Parliament relevant to that particular polity.  It is the case that many, though not all, political parties have chosen to have composite objects so, for example, objects of electing members not only to the Legislative Assembly in Queensland in the case of the LNP, but also to members of the House of Representatives and the Senate.  That is not a legal requirement of the Electoral Act (Qld). It is not a legal requirement of the Commonwealth Electoral Act; much less is it any constitutional obligation.

Once one accepts that as a proposition, which in our submission one must, then whether the Queensland Act is engaged in a way complained of by the plaintiff and the Commonwealth, it really falls to how parties choose to organise themselves.  We accept that historically political parties in Australia have organised themselves, at least many of them, by way of a national party with State divisions, some but not all having composite objectives and, no doubt, for a long period of time when there was a relatively homogenous set of electoral laws in Australia that was convenient.

But times and circumstances change and if, as we submit here, what has happened is that the imperative necessary to protect the systems of representative and responsible government at the Commonwealth level are different to those steps that need to be taken to ensure the efficacious protection of that like system of government at the State level, resulting in different electoral schemes targeting different perceived problems, then the price of that might be that there will no longer be homogenous electoral laws.

I accept, as I must, and it is no part of the State’s case to say that that involves any novel reading down of the ordinary operation of section 109, but it does involve a recognition of the central importance to any independent polity of its capacity to regulate and ensure that it has an efficacious electoral system by which it can fairly determine those who are going to represent it. Now, once one accepts that, it would be possible to have, for example, an LNP party that has as one of its objects the election of members to the Legislative Assembly in Queensland but not an object for the election of members to the House of Representatives.

KIEFEL CJ:   What follows from this in terms of the issues before the Court, Mr Solicitor?

MR DUNNING:   In terms of the alternative, that is there would be a federal party that would be capable of taking donations to prosecute the federal interests that have been agitated by our friends for the Commonwealth and for the plaintiff which would be untouched by the section 275 relevantly of the Queensland Act because it would not be a political party for that purpose.

KIEFEL CJ:   Is this in aid of the submission that the Queensland Act is not directed to federal elections?

MR DUNNING:   That is one aspect of it, your Honour, yes.

GORDON J:   Just so that I understand, is your submission saying that there is this practical solution and therefore that provides the answer to it all?  Is that where this is going?

MR DUNNING:   No.  I cannot take it ‑ ‑ ‑

GORDON J:   Then you have to deal with the entities as you find them and at the moment they are structured in the way they are.

MR DUNNING:   In our submission, we would not embrace a proposition as wide as that.  Parliament is free to legislate and if the ‑ ‑ ‑

GORDON J:   Queensland chose not to in the way in which South Australia, Victoria and New South Wales had.

MR DUNNING:   That is correct, but that in itself is, in our respectful submission, not a metric of the invalidity of ‑ ‑ ‑

GORDON J:   I am just trying to work out where this submission goes.  True that they could be structured in a different way, but they are not.  When Queensland drafted their legislation they must have known that.

MR DUNNING:   Yes, they obviously drafted it against the law as it stood - obviously 302CA was not part of the law.

GORDON J:   No, but against the facts that are set out in the special case, which identify the way in which they are structured – entity.

MR DUNNING:   Yes.  Your Honours, can I deal with one other matter at the outset and that is what is described as the unallocated middle.  Our learned friends have, in our respectful submission, assumed that there must always be an unallocated middle.  Justice Gordon, I appreciate that this will touch upon an issue you have just raised with me.  But it is wrong, in our respectful submission, to proceed from the assumption that there is an unallocated middle.  There might be, and the consequences of that would need to be determined, but it is not essential or necessary that there be an unallocated middle.

If I can give your Honours an illustration – and it is only intended to be an illustration – for example, each of the Commonwealth and the State could pass laws that say you must have campaign accounts.  Only funds for electing members to the federal election or the Legislative Assembly – as the case may be – may be deposited into that account.  Only moneys may be drawn out of it for the purpose of participating in that election.

That would be one scheme which would provide no – as our learned friends have described it ‑ unallocated middle because in the end the donor – and the recipient for that matter ‑ would have to either choose between a donation into a federal campaign account, from which only federal elections can be funded or, alternatively, the State campaign.  There would be no unallocated middle amount.  I accept that would present issues in relation to how, for example, State headquarters and things like that might be funded.  But the fact is it would be possible to do and, in our submission, to proceed from an assumption that there is this thing called the unallocated middle is a misconceived way to approach it because it assumes that which, ultimately, falls to be determined.

EDELMAN J:   It assumes that a sharp line cannot be drawn between a purpose that is directed towards federal elections and a purpose that is directed towards State elections.  But that assumption does seem to underlie quite a number of the implied freedom of political communication cases.

MR DUNNING:   They do but, in our respectful submission, it is not the same inquiry.  True it is that political discourse does not admit the bright line that your Honour has just raised with me, but it would not be right to say that, in our submission, that same bright line may not be imposed in respect of political funding.  It would be open to, for example – it would be open to any Parliament to say if you want to participate in our electoral process and elect members to our House or Houses of Parliament, you must source funds only for that purpose and from those funds you must apply them only to that purpose and you would thereby draw that bright line. 

To give an illustration, you could force the Liberal Party or the Labor Party to have two headquarters in Queensland or you could force them when they wanted to run federal elections to do it out of a hotel room in Queensland rather than use the State headquarters.  But, it is possible to create that bright line. 

It is not possible in the terms of political discourse, for the reasons the Court has previously explained, and that is why, in our respectful submission, the analogy with the implied freedom cases effectively falls down at that point because it is capable here of theoretically a bright line, practically a substantial and workable demarcation in a way that does not exist in terms of political discourse.

EDELMAN J:   Which side of the line would the example given by the Solicitor‑General fall - that is the example of a donation given for the purposes of advertising in relation to infrastructure where infrastructure is a major issue at both State and federal elections?

MR DUNNING:   Well, that would ultimately depend upon how the electoral schemes were set up and do they, for example, fix upon how you deposit the money or do they fix upon - as in the campaign accounts, or do they fix upon who the – that is the entity to whom the donation is being made.  The topic itself is one that may be – or is incapable, let us assume for the purpose of answering your question, Justice Edelman ‑ ‑ ‑

GORDON J:   Mr Dunning, would you mind speaking up, I cannot quite hear you.  I apologise.

MR DUNNING:   My apologies.  The topic itself might be incapable of demarcation between State and federal – let us say we are talking of a road, spending money on roads for which – or a highway for which one could see federal and State, local if you like, as well, context - you may well not be able to create a demarcation about the discourse as to what level of government that applies to but in terms of how each polity regulates how people might fund and, therefore, embark upon that discourse, you can regulate it and create those demarcations. 

Ultimately, in answer to your Honour’s question, it is illustrations like that that show that the analogy with the implied freedom cases is not a sure one because the implied freedom cases are concerned with the free discourse in the Australian community of those issues incapable of demarcation.  The funding provisions or the disclosure provisions, on the other hand, are concerned with ensuring the efficacy of the electoral process and require and do impose that form of demarcation.

KIEFEL CJ:   That might be a convenient time for morning break.

MR DUNNING:   Excuse me, Chief Justice, just before we break, I take it your Honours want no submissions – your Honours are not looking for any submissions on the implied freedom at all?

KIEFEL CJ:   That is correct.

MR DUNNING:   Thank you.

KIEFEL CJ:   The Court will adjourn for 15 minutes.

AT 11.15 AM SHORT ADJOURNMENT

UPON RESUMING AT 11.30 AM:

KIEFEL CJ:   Yes, Mr Solicitor.

MR DUNNING:   Thank you, your Honours.  Your Honours, may I move to the question of whether there is an implied exclusivity of Commonwealth power over federal elections, paragraph 10 of our oral outline.

KEANE J:   Mr Solicitor, just before you do.

MR DUNNING:   Of course.

KEANE J:   Going back to what you were talking about before the break, the Solicitor for the Commonwealth says donations to political parties are either used for federal election campaigns or State election campaigns.  Is there anything in either the authorities or the stated case that justifies that proposition?  In other words, is political communication – you can have political communication in which political parties are involved, other than campaigns.

MR DUNNING:   Correct, yes.

KEANE J:   So is there anything in the stated case, in the facts of the stated case or the authorities that justifies the notion that political communication in which political parties are involved is either a federal election campaign or a State election campaign?

MR DUNNING:   Justice Keane, I believe not.  But can I ask that we check the special case again, but I believe not.  Certainly not in the authorities, and to the best of my recollection, nothing in the special case that would say that.

KEANE J:   Thanks.

MR DUNNING:   Your Honours, in terms of the question of exclusivity of Commonwealth power over federal elections there, in effect, are these differences in the way the parties have framed the case.  Obviously on my side it is contended that there is no Commonwealth exclusivity at all.  Amongst the Commonwealth and the plaintiff, who make common cause of exclusivity, they do so in relevantly different ways.

Indeed, the plaintiff would, in effect, say that it contends more for an immunity necessarily than an exclusivity and the plaintiff, in substance, in our submission, is contending that that exclusivity or immunity is one that one deduces from the nature of the Commonwealth as a polity, and what is attended with that, as opposed to the Commonwealth’s submission which is essentially textual, and, we should add, to some extent structural, but essentially textual.

Now, in terms of the question of whether for a polity to have power over its electoral process - is a defining feature of a polity that it have power over its electoral processes – there is no controversy between the plaintiff and the defendant on that.  There is a controversy as to whether it is an exclusive power.  But as to the existence of such a power, there seems to be no controversy at all.

If we focus then upon the way in which the Commonwealth develop it, the Commonwealth develop it via the text. So what they tell us is that in reality we will see in sections 10 and 31 effectively the conferral of that power and, conversely, in sections 7, 9 and 29 we see the conferral of a limited grant of power on the States to participate in legislation regarding federal elections. In our submission, the Commonwealth’s attitude to that first asks too much of sections 10 and 31 inasmuch as the Court is asked to glean from that that there is not only a power, which there undoubtedly is, but that it is an exclusive power.

In our respectful submission, rather than sections 7, 9 and 29 being consistent with a limited grant of power to the States to legislate in respect of federal elections, we submit that when one looks at them, both textually and contextually, they are in fact consistent with a recognition that there was concurrent legislative power of the States together with the Commonwealth in relation to Commonwealth elections. Put another way, sections 10 and 31 in fact connote that there would be federal concurrent Commonwealth and State legislative power over federal elections. Those provisions provided both the distribution of such powers and the mechanism for the Commonwealth to introduce over time its legislative power in that regard and act upon it.

NETTLE J:   Is that submission consistent with Smith v Oldham?

MR DUNNING:   No, Justice Nettle.  Well, it is not consistent with all of the members in Smith v Oldham, no.

NETTLE J:   Is it consistent with the majority in Smith v Oldham?

MR DUNNING:   No, I do not think I would go as far as to say that that submission is consistent with it.

NETTLE J:   Does it follow that Smith v Oldham, in your submission, was wrongly decided?

MR DUNNING:   Yes, and we have dealt with that in our written submissions.  I was not proposing ‑ ‑ ‑ 

EDELMAN J:   That the result in Smith v Oldham was wrongly decided?

MR DUNNING:   No, the reasoning in relation to exclusive power.  In fact, in our written submissions, Justice Edelman, we at one point actually say that the only criticism we offer of Smith v Oldham is in terms of exclusivity.

NETTLE J:   That is a case which has stood for the better part of a century and never been questioned on that point.  Indeed, it has been endorsed time and again.

MR DUNNING:   In that regard, Justice Nettle, I was proposing to take your Honours to the decision in Daniell, which you have not yet been taken to which, in our respectful submission, would not be consistent with that.  In fact, I might do that now.  I was going to do it a little later but I might do that now because the holding of this Court in Daniell would not be consistent with embracing the decision of exclusivity in relation to Commonwealth elections.  Can I ask your Honours please to take up Daniell now? It is 28 CLR 23. Can I just identify a couple of passages in the headnote for your Honours just so you understand what was actually in issue in Daniell.

MR EDELMAN:   It is tab 57.

MR DUNNING:   My apologies, your Honour, thank you.  You will see on the first page at about point 8 it set out what section 14 of the Commonwealth Act said, which was an embargo upon States conducting a referendum or vote of electors on the same day as a Senate or general election.  If I can then take your Honours please to page 24 at about point 3, on 5 May 1917 the Governor proclaimed necessarily for the election of Senators for Queensland.  Then in the next sentence:

On the same day a local option poll was taken in the Local Option Area consisting of the Electoral District of Toowong –

and there was an outcome.  Then Ms Daniell challenges that outcome.  She was the owner of the Regatta Hotel.  Then your Honours will see that at the foot of that page about four lines up there is reference to proceedings being commenced in the Supreme Court of Queensland to restrain proceeding any further in respect of the vote that had been taken on that day.  At the foot of that page, it was said that it was contrary to law because it was held on the same day as the day for the election of the Senate.  Then at about point 5 on page 25, the last sentence in that paragraph:

The Supreme Court refrained from adjudicating upon either order nisi –

and the matter was removed to this Court.  Could I then take your Honours to the arguments that were put on behalf of the prosecutor which appear at about point 6:

The Commonwealth Parliament has exclusive power to legislate as to Federal elections.

Smith v Oldham is cited.  Then an alternative argument is put that:

The power, if not exclusive, exists under sec. 9 of the Constitution, and, having been exercised in sec. 14 –

of the Act I took you to, it prevailed over the relevant provision of the Liquor Act which had required the election on that day.  So what your Honours see is that the issue of Commonwealth exclusivity in relation to electoral matters was squarely raised.  The correctness of Smith v Oldham was squarely raised and, correctly, that issue was treated in argument as anterior to any issue of section 109, because obviously if there was an exclusive power one would never have got to the 109 point.

Your Honours, there are two judgments. There is the joint judgment of Chief Justice Knox and Justices Isaacs, Gavan Duffy, Powers, Rich and Starke, and there is an additional judgment of Justice Higgins that starts on page 32, but on this topic they are in agreement. The topic of exclusive Commonwealth power does not get dealt with in the judgment, though plainly was argued and plainly, had the argument been accepted, there would have been no occasion to move to section 109. Can I show your Honours how the case was in fact disposed of by the members of this Court. Starting page 29, at about point 4 of the page:

We think the words of sec. 14 are an express and unambiguous prohibition of the thing itself, the vote . . . Supposing the Commonwealth Parliament competent to enact such a prohibition, the result is not doubtful. There arises upon the construction a conflict, or inconsistency, between the State Act authorizing and commanding the vote on that day and the Commonwealth Act, assumedly competently made, forbidding the vote on that day. Then sec. 109 of the Constitution enacts that in such a case the State law, to the extent of the inconsistency, is invalid.

Then, your Honours, at the foot of page 30, those members of the Court start a discussion about whether the provision in question was beyond State power.  At page 31, and I am taking your Honours to this really for showing that the matter is fully agitated in argument.  At about point 4:

The second argument was founded on the Constitution itself. It was said that sec. 9 enacts that “The Parliament of a State may make laws for determining the times and places of elections of Senators –

and then goes on to refer to section 14 as a “fetter.”  Then at about point 7, it says:

But the Liquor Act, not attempting to fix any time for the election of Senators proceeded to fix a time for a local option vote. That was the exercise of power not under sec. 9 of the Constitution but the ordinary State Constitution.

Then it goes to deal with those provisions.  Can I then take your Honours, please, to Justice Higgins’ reasons?

NETTLE J:   You left out the part at the top of page 31 where it was clear beyond peradventure that there was power to legislate, as the Commonwealth had done?

MR DUNNING:   Yes, but ‑ ‑ ‑

NETTLE J:   Was that not the important issue?  There was exclusive Commonwealth power to legislate with respect to federal elections, which included stopping other things going on, on the same day.

MR DUNNING: But, in our submission, Justice Nettle, if that were the case, one did not need to go to the section 109 analysis because at that point it would have trenched on an area of exclusive Commonwealth power in the way that is complained of us here, and one would not need a 109 analysis to deal with it.

GORDON J:   I must say I had read that first bit at the top of page 31 dealing with the first argument, and then it proceeds to deal with the second argument.

NETTLE J:   Exactly.

GORDON J:   So it is dealing with both arguments.  The first argument seems to be, as I had understood it, addressing the Commonwealth exclusive power argument and saying, “Well, that is enough and then I am going to go on and address the second argument, just in case”.

NETTLE J:   I mean, surely it cannot be anything else in those top few lines of 31.  These are the very judges, or at least some of them, that have decided Smith v Oldham.

MR DUNNING:   Yes, that is correct.

KIEFEL CJ:   You are dealing with the defendant’s arguments, of course, not the prosecutor’s.

MR DUNNING:   Yes.  I must admit, I had not read it that way, Justice Gordon.  Can I consider that over lunch and come back to it?  Thank you.

GAGELER J:   Another possible reading is, if you read the sentence beginning “First they argued” with the “We are distinctly of opinion that the argument is sound.”

GORDON J:   “Unsound.”

GAGELER J:   “Unsound”.  I am sorry, I withdraw it.  Thank you.

NETTLE J:   Rather corroborates the point.

KIEFEL J:   Do not let our conversation keep you from your submissions.

MR DUNNING:   Justice Gordon, what I might do is deal with Justice Higgins after lunch as well.

GORDON J:   That is fine; I apologise.

MR DUNNING:   No, not at all.  Thank you.

NETTLE J:   Just before you depart, is Daniell the only riposte to Smith v Oldham?

MR DUNNING:   In terms of authority, yes.

EDELMAN J:   Could Smith v Oldham be read in a way which, on one view, Justice Dixon might have been reading it in Nelungaloo to be talking about exclusivity not as in the nature of the power but just as a matter of fact, in other words, talking about exclusivity as the nature of the Commonwealth power simply because there was, as a matter of fact, then, no conceivable reason why the States would have any concern or interest in legislating over that particular area.  I think Justice Dixon used a phrase like “is of no concern to the States”.

MR DUNNING:   Yes.  The difficulty with accepting that proposition, Justice Edelman, is if the States have plenary legislative power and it is not otherwise taken away from them, it is difficult to see how they would, as it were, lack a concern in respect of that matter.  I will think carefully about the point your Honour has put to me.

EDELMAN J:   It is a concern in the sense of a practical concern, so there would be no practical concern in a case like Smith v Oldham of the States as to whether or not somebody would be signing an advertisement in a federal election.

MR DUNNING:   Yes, because it did not concern itself with the election of members to its legislature but rather to the Commonwealth.

EDELMAN J:   In that sense it might be said to be exclusive because it is exclusive because it is not a power that the States would, as a matter of practical reality, be legislating over.

MR DUNNING:   In that sense, yes, and perhaps consistent with that and a point picked up by South Australia is that, even if one talks of exclusivity, it is exclusivity of what, that is, the Commonwealth has an undoubted power over federal elections.  Let it be assumed, for the purpose of argument, it has some exclusive power in that regard.  It does not necessarily follow that all of that power need be exclusive, particularly in circumstances where we are not looking at an express grant of such exclusivity but rather one that is to be deduced or inferred from the text.  Your Honours, if I can then move to ‑ ‑ ‑

NETTLE J:   Just before you come back to that this afternoon, you might want to factor in, as it were, the sort of general proposition that, to the extent that there is exclusive power, it includes power to exclude State regimes.

MR DUNNING:   Yes, certainly.  Can I then turn to what is said to emerge from sections 7, 9 and 29 and, in our submission, far from being characterised as a grant of power where none had previously existed for the States it contemplated the existence of the concurrent State power in that regard.  I think I have already dealt with that point.  We say that what follows from that is there is nothing in that textual analysis that would denote the exclusivity for which the Commonwealth contends.

In our submission, it is unlike the position in respect of Chapter III. Sections 10, 31 and 51(xxxvi) do not exclusively provide for the Commonwealth power to make laws with respect to federal elections. The Commonwealth obviously can and does rely on concurrent powers. The use of the telegraphic power in ACTV is an illustration of exactly that.

Now, it is said against the State that it cannot legislate with respect to subject matters that came into existence at Federation and, in our respectful submission, that is not a proposition that your Honours should accept.  There are two cases in that regard we would take your Honours to.  The first is Carter v Egg and Egg Pulp Marketing Board (1942) 66 CLR 557, which is the joint bundle of authorities volume 5, tab 29. Can I take your Honours, please, first to page 572 in the reasons of Chief Justice Latham. As your Honours no doubt recollect, the comparison here is with the defence power and at about point 8 on the page, referring to Justice Higgins in Australian Workers Union:

“the State of Victoria has not the war power” in its strict sense means no more than that the power to declare or make war does not belong to the States.  It was not, I think, intended to mean that a State Parliament cannot pass any Act to assist in the defence of the Commonwealth.

Obviously, the defence of the Commonwealth was not a power that could have existed prior to Federation.  One sees a similar line of reasoning at 582 of the report in the reasoning of Justice Starke.  At the foot of that page at about point 9:

The broad principle of this federal system is to be found, as regards the States, in the provision of the Constitution Act, that their powers are left unaffected except in so far as the contrary is provided -

If one then goes to about point 4 to point 5 on page 583:

But except as provided, as already mentioned, the Constitution does not make the legislative power of the Commonwealth in respect of naval and military defence exclusive of the power of the States . . . though if a State law is inconsistent with a law of the Commonwealth the latter prevails -

Now, again, that was not something that would have existed at Federation.

BELL J:   I must say, Mr Solicitor, I had understood the Commonwealth’s argument to be not as broad as a contention that the States lacked power to legislate on a subject matter not in existence at the time of Federation but, rather I understood the Commonwealth to submit that one reads Justice Isaacs’ analysis in Smith v Oldham in much the same way as Chief Justice Latham’s observation in Carter v Egg Marketing Board at page 571 where his Honour at about point 8 illustrates a proposition by looking at the concept of the Commonwealth creating a department and his Honour observes:

Any State legislation professing to control a Commonwealth department would be invalid, because no State Parliament has or ever has had any power to legislate upon such a subject.

It is, as I would see it, a narrower proposition directed to a subject that springs into existence because of Federation, here, a Commonwealth Government department in Smith v Oldham once Parliament has prescribed or provided for the topic of a federal election, that is, as I understand the argument.  I would note I think it is the plurality in Re Residential Tenancies; Ex parte Defence Force Housing Authority that agrees with his Honour’s observations in that part of his reasons in Carter v Egg Marketing Board. 

MR DUNNING:   We had not taken the Commonwealth – we are not taking the submission to be as limited as that.  We are taking it to be relied upon as the proposition that if it was not a power that – sorry, if it was not something the States could have legislated of pre‑Federation because it did not exist then the States did not enjoy power to legislate in respect of it post‑Federation.

BELL J:   I may have misapprehended the Commonwealth’s submission but perhaps just if you address the issue of concern to me which is the narrower construction that I put to you.  What do you say to that and to that explaining Justice Isaacs in Smith v Oldham and if that is the correct way to read it what is wrong with that proposition?

MR DUNNING:   Justice Bell, our response would be this, firstly, the passage your Honour has taken me to at 571 of Chief Justice Latham is really now an issue that would be picked up by the Cigamatic principle and, secondly, that Justice Isaacs’ reasoning in Smith v Oldham, we submit, is not confined – it does not suggest that it is confined in the way that your Honour has put it to me, rather it seems to stand for the – and express the straightforward proposition to say that if this was not something that existed prior to Federation then the States could not have had a legislative power over it because it did not exist and, therefore, they do not have a power over it now.  We did not read Justice Isaacs as injecting that sort of nuance or limitation to the matter.

Your Honours, can I just take you quickly to the other references in that particular case.  Your Honours will see like reasoning by Justice McTiernan, starting at about point 9 on page 589 starting with “The core of the power” through to the end of that page, and over to the third line of the next page.  Similarly, Justice Williams at 597 to 598.  But the critical part of – it is essentially captured at 598 from about point 4, starting with “Legislation on these subjects” to the end of that paragraph. 

Similarly, we would call in aid Justice Gageler’s reasons in Burns v Corbett (2018) 92 ALJR 423, which is volume 5, tab 25, at page 442 in paragraph [72] such that we would submit that there is no basis for arriving at a conclusion of Commonwealth exclusivity on the basis that it was a topic that had not existed prior to Federation and thereby depriving the States of the capacity to have a legislative power in that regard.

But in any event, your Honours, our submission is that the Queensland provision, in particular section 275, deals with subject matters of State and local government elections in Queensland and unarguably that was a matter that Queensland had a position to legislate in respect of at the time of Federation.

In any event, Queensland has a clear interest in regulating donations made to political parties that are participating in its political process and the fact that those parties might have composite objects in no way, in our submission, impacts upon that interest.  It is contended for, by the plaintiff at least, that there should be a reverse Melbourne Corporation principle.  We intend to deal with this matter very briefly.  It is dealt with in writing at paragraphs 39 and 67 of our primary submissions, and paragraph 14 of our submissions in reply.

The essence of the point is simply this.  The Melbourne Corporation principle exists for the States because it is necessary to preserve their continued existence as an independent polity, itself entrenched in the Constitution. To the extent that the protection of the Commonwealth as a polity is necessary, that is already sufficiently dealt with, first of all by the principle in Cigamatic, which ensures that Commonwealth executive power cannot be trenched upon by the States in a way that would deny it the ability to conduct itself as a polity and beyond that section 109 is the existence of section 109 in the constitutional architecture that means there is no requirement for a reverse Melbourne Corporation principle.

Now, it is said against us well, here we are in March and there is a federal election, let us say, in May and when the Parliament is prorogued one of the State legislatures might go and legislate so as to trench upon the Commonwealth and in a way that it could not legislate to avail itself of section 109, to which really there are two responses. Each alone is adequate to answer any force in that submission.

The first is one does not test propositions like this by speculating as to extreme examples of State Parliaments waiting for Commonwealth Parliament to be prorogued so as to pass laws to adversely impact upon the Commonwealth until such time as it can reconvene its Parliament. That is just not a secure way of testing propositions such as this. The second is, even if you were to accept it, it does not take you anywhere. If you accepted that as a proposition, there would still be the necessity to go and engage in the litigation and have determined that the State law was invalid under section 109.

Now, none of that is practically going to happen between the prorogation of the Parliament, the State Parliament acting with such alacrity that it passes this offensive legislation, proceedings commenced and they are determined.  It offers no rational basis, in our respectful submission, for adding to the existing regime of Cigamatic and section 109, which not only conceptually and rationally provide the protection to the Commonwealth as a continuing polity but as a matter of experience have done so as well. For those reasons we would respectfully submit your Honours would reject the notion of some reverse Melbourne Corporation principle in favour of the Commonwealth.

Your Honours, even if there were to be a finding of exclusivity, it then raises a large question as to what does an exclusivity of Commonwealth power in relation to federal elections actually mean and, as our learned friend the Solicitor‑General for the Commonwealth frankly conceded, the question over what would be the appropriate test is one that is not easy.

Our test is characterised by our friends for the Commonwealth as an extreme test.  We rather hope it is not and instead is a principle test.  What I might do now is, if I can, take your Honours to this Court’s decision in Bourke, which your Honours will find in volume 4 of the joint book of authorities at tab 23, to endeavour to make good that proposition.  I appreciate your Honours have already been taken to Bourke and I will endeavour to deal with it in a way that avoids repetition. 

As your Honours will be aware, the decision itself is a unanimous decision of the whole Court.  Can I ask your Honours please to page 286 of the Court’s reasons.  Your Honours will see at about point 2 on the page - and here we are concerned with banking “other than State banking” - might I invite your Honours to read at the conclusion of the words through to the end of the first full paragraph on page 287, and there is just a couple of passages that I would like to emphasise.  Your Honours, might I particularly emphasise these passages.  At about point 3 on 286, two broad alternatives are possible.  If the Court turns to the first:

First, it may be that the Commonwealth is positively prohibited from making laws with respect to State banking.  In that event it would be necessary to determine what might be the proper test for deciding whether to characterize a law as one with respect to State banking . . . The first of these alternatives involves the implication of an exclusive State legislative power.  If there is such a power, then the ordinary tests of characterization are not adequate to determine whether or not a law of the Commonwealth intrudes into the forbidden territory . . . Further, it would not be possible to characterize a law as one with respect to an exclusive as well as an inclusive power.

This last consideration might suggest that notions of sole or dominant characterization such as are employed in relation to the mutually exclusive distribution of legislative powers in Canada would be appropriate when an Australian court is called upon to decide whether a law is or is not one with respect to State banking.

Then there is reference to Chief Justice Barwick’s dissenting reasons in the Pay‑roll Tax Case, the rational being that, as his Honour there says:

[W]hen a law may possibly be regarded as having either of two subjects . . . a decision must be made as to which is in truth the subject matter of the law.

Then over at the top of the page, that ordinarily that is not an appropriate course when you are dealing with an enumerated topic, but then says:

the decision of what is the subject matter of the law may be approached somewhat in the manner the validity of a law claimed to be within one of the two mutually exclusive lists in the Canadian Constitution is determined.  The law must be upon one or other of the subjects.  It cannot be on both.” 

Then, at about point 4:

On the other hand, if the relevant law has as its substance two subjects, one of which is exclusively within State legislative power, the observations of Barwick C.J. have greater force, as was recognized by Stephen J.

Now, in our submission, our learned friends – in the end the Court do not adopt that test and the reason that the Court does not adopt that test in that case is because they were not dealing with exclusive power.  There was a conclusion that banking other than State banking was not a conferral of exclusive power and that is why, in our submission, the analogy sought to be drawn by the Commonwealth is one that your Honours ought to reject on this topic and that, in fact, the test that their Honours identified there and as identifying as having an appropriateness in relation to exclusive power is one that would properly inform the test that ought be applied here, in the event that your Honours arrived at the conclusion that there is an exclusivity of Commonwealth legislative power over Commonwealth elections. 

GAGELER J:   For that reasoning to apply, you need two lists of exclusive powers, as in the Canadian Constitution, and then you look at the pith or substance of the law.  But it does not necessarily apply where you just have one area of exclusive power.

MR DUNNING:   In our submission, Justice Gageler, in terms of arriving at, I accept that.  I accept that this is not a precise instance of the occasion that is there referred to, but what is called upon here is to arrive at what is the appropriate test in the event the Commonwealth has exclusive legislative power over Commonwealth elections.  When one looks at the potential consequences of the test that is posited by the Commonwealth, touches and concerns tenuously, to use a shorthand expression for it, then the capacity for the States to legislate in respect of matters of proper concern would be unduly constrained.  Now, that is not to call in aid any concept of any reserve power or anything like that.  It is simply to ask, in the event that the Commonwealth has an exclusive power over Commonwealth elections, what does that actually mean for residual State powers and, in the circumstances of this case, particularly in relation to legislating in respect of State elections.

I am reminded that Chief Justice Barwick in the Pay‑roll Tax Case was himself not concerned with two exclusive powers.  He was rather talking about an area within power, being the Commonwealth taxation power, and one outside, because of the operation of the Melbourne Corporation.  So his Honour’s resort to it was in circumstances where it was other than for two exclusive powers and he was considering how one might arrive at an appropriate test.

If I can then turn to why, when one looks to the test, that would be appropriate for this exclusivity of Commonwealth power, the “touches and concerns” test is one that would see the States deprived of the ability to legislate over a range of topics, and the instant case is a paradigm example of how it would operate in that way because it would prevent the States from being able to legislate in respect of, effectively, a vital issue for them; that is, how they ensure the efficacy of their own electoral systems because one can so readily, on the test as the Commonwealth posited, engage in an area of Commonwealth electoral activity, because your Honours will recollect from the connections that our learned friends for the Commonwealth posited they needed, in reality, very little.

It did not need the money to be paid to somebody for conducting a federal election.  The bare possibility that was ultimately accepted was sufficient.  So, if we adopted a “touches and concerns” test, what it would actually distil to in a case such as this is that a State may not legislate in respect of something as vital as the efficacy of its own electoral system if there was the bare possibility that to do so would impact upon a participant in the federal electoral process.

Now, that would be to strip from the States the ability to regulate what is one of their core functions and, in our submission, there being no existing decision of this Court as to what test to be applied, they would be powerful considerations for not adopting a test of the kind that the Commonwealth has posited.  Conversely, by parity of reasoning, though, Justice Gageler, we accept not precisely the same situation, the first alternative in Bourke that is ultimately rejected because of the nature of the power there is one that would provide a sufficiently sure guide and is one that would ensure that the States would not be stripped of their legislative power simply because of the bare possibility that it might impact upon a player in the federal electoral process.

As I made the submission a moment ago, the present case is a paradigm example of the problem that would arise, but can I give some others; for example, a State law that sought to ban or even just regulate political advertising.  Let us take one we are all familiar with, a law that banned political advertising in a finite period in the lead-up to election day, let us say a 24-hour media blackout, something like that, in the lead‑up to election day.

Well, on the test that our learned friend for the Commonwealth posits, that would touch and concern the Commonwealth electoral process because it would impact on the discourse of matters that they rely upon and it would impact upon participants in the Commonwealth electoral system.  Other illustrations ‑ that I think will suffice for present purposes.  What it does is it sets the trigger for engaging - offending such an exclusive power far too lightly and deprive the State of its legislative power.

Your Honours, I will come back to paragraph 19 of our outline after lunch when I deal with Daniell.  Can I then move to paragraphs 20 and 21.  I have effectively developed the issue in relation to Bourke and we make the submission that the appropriate test if you have exclusivity is a sole or dominant test and if one applied that sole or dominant test to section 275 of the Queensland Act, no issue arises in the present case of in any way intruding upon an area of exclusive Commonwealth activity.

But we would make the submission we make in 21 that, even on the ordinary principles of characterisation, these are not laws with respect to federal elections.  What they regulate are gifts to parties – to use a shorthand expression – in relation to State and local government elections.  That is all they purport to operate upon.  That is all their legal operation is upon.  They are engaged by either a party with the object or an individual endeavouring to get elected to the Legislative Assembly in Queensland.

Your Honours, can I then move to our argument in relation to Metwally and to start that discussion, can I ask your Honours please to take up the two provisions in question - 275 of the Queensland Act and 302CA of the Commonwealth Act. And when one looks at the legal operation of these provisions, this is what happens. A property developer in Queensland seeks to make a donation of $1,000 to the LNP. Section 275(1) says that is unlawful. A property developer is within the definition of “prohibited donor” and the giving of the gift to the LNP would be the making of a political donation. So on the day on which the $1,000 is to be handed to the party, there would be relevantly that contravention of section 275.

If one then goes to look to see how 302CA operates on that same day, 302CA(1) would say, despite section 275, that property developer may give that gift to the LNP and (b), that the LNP may retain that gift, then if we go to (e), if the gift, relevantly for the purposes of this argument, may be used for the purposes of incurring federal electoral expenditure. So on that day section 275 of the Queensland Act says you may not give the money and section 302CA(1) - effectively (a) and (e), or (a), (b) and (e) - says you may give and you may receive the money. It is the most obvious case of a collision between the two legislative schemes, and I think we were asked or invited to say we have not suggested that there anything other than an inconsistency between 302CA and 109, obviously enough. So on that day there is the collision.

Section 109 says, well, in those circumstances, assuming the validity of the laws, you do not have to comply with section 275 of the law. You are free to give the money because of that provision. Two years later, the LNP, or whichever political party it is, decides that it will spend that money on a State electoral purpose, which will take us then to 302CA(3), and it says that subsection (1), which I have just taken your Honours to, will not apply to that $1,000 if - (b)(ii) - the political party identifies that gift to be used only for a State electoral purpose which, as is conceded and as must be the case, it spent that way.

So, two years later, that which the Commonwealth law had said you were free to do because by section 109 it operated to suspend the operation of the State law, now says that is not the case. In fact, the State law now applies to you two years after the money has been spent and long after the donor can now do anything in relation to it. So that is how the provision operates and, as was identified in argument yesterday, the note and the example are accepted as not only part of the Act required to construe it, but accepted as setting out accurately how the Act would apply to a circumstance like that which I have just posited to your Honours.

Our friends for the Commonwealth say all that really happens there is that the immunity that had been conferred two years earlier by 302CA(1)(a) was just contingent or defeasible or a condition precedent, and two years later that condition passes.  Now, our friends say that that is not an application of the principle in Metwally and we would respectfully disagree that that is a proper view of the reasoning of the majority in Metwally.  In that regard can I take your Honours please to the Court’s decision in Metwally.  Can I first of all take your Honours, please, to Chief Justice Gibbs’ reasoning at page 458 at the top of that page where the Chief Justice says, speaking of 109:

Its provisions are not only critical in adjusting the relations between the legislatures of the Commonwealth and the States, but of great importance for the ordinary citizen, who is entitled to know which of two inconsistent laws he is required to observe.

His Honour then refers to Justice Evatt’s reasoning in Victoria v The Commonwealth and then says:

If there is an inconsistency between a law of a State and a law of the Commonwealth there is no other rule than that laid down by s. 109 by which the inconsistency may be resolved. In the present case, since an inconsistency in fact existed, the provisions of s. 109 were called into play and their effect cannot later be excluded by retrospectively declaring that the truth was other than it was.

Yet that is exactly what would happen in the illustration I have just given because on the day the $1,000 was donated, by operation of section 109, the law was that the donor could give the money and the political party could accept the money because it may be used for federal electoral purposes. Two years later it is spent on a State electoral purpose. So it is said subsection (1) is rolled back and the money is taken to have been unlawfully donated and that would be declaring the truth to be other than what it was.

EDELMAN J:   Surely not if it is subject to a condition subsequent.  If it is subject to a condition subsequent, it is only lawful to the extent that the condition subsequent does not arise.

MR DUNNING:   The gift itself could have been made the subject of a condition and the statute itself contemplates that, but when our friends for the Commonwealth talk about a condition subsequent they are talking about one that is actually implied by the existence of subsection (3)’s capacity to roll back.

EDELMAN J:   Yes.  It is treating subsection (3) as though it were a condition subsequent on legality.

MR DUNNING:   If one treats it as a condition subsequent, it is one that is not only entirely out of the control of one of the parties - now, that, in itself, is not a reason to deny something the capacity to be a condition subsequent but it purports to not adjust a set of rights that the parties freely agreed to but rather to engage a legislative provision, or disengage more accurately a legislative provision that had been effectually engaged at some time in the past and, in our respectful submission, it is not even an orthodox method of statutory construction to contemplate that a legislative provision is subject to a condition precedent.

A legislative provision operates according to its terms and therein lies the vice in respect of the Metwally principle.  According to its terms and according to the reasoning of the majority in Metwally, on the day the money was paid, section 109 operated to say that it was lawful and section 109 was not and could not be fettered by any notion of a condition precedent. So that there is no basis for arriving at the conclusion that there is a mode of statutory construction that would permit a section to be read as if it imposed a condition precedent so that it might later be lifted in that way.

NETTLE J:   Mr Solicitor, it is not suggested that it imposes a condition precedent; rather, a condition subsequent.

MR DUNNING:   Sorry – I am sorry, Justice Nettle.

NETTLE J:   Such that it is lawful for so long and until the condition subsequent is satisfied, at which point it ceases to be lawful.  So that if a donor gives a gift to a political party otherwise than upon a stipulation that it be used for federal purposes, he knows that he is at risk of committing an offence under State legislation.  What is wrong with that?

MR DUNNING:   Because it gives a conditional operation to that person’s entitlement to know whether which of two laws then apply to him because ‑ ‑ ‑

NETTLE J:   Well, he knows that both apply and he knows that unless he takes particular action he is at risk of one of them imposing a criminal sanction on him.

MR DUNNING:   Well, it is the large part of that that we would respectfully not embrace and would say is inconsistent with what the majority in Metwally are reasoning and that is that section 109 operates at a moment in time and that moment in time is the payment over of the money and it does not and ought not contemplate the idea that its operation might, in practical terms, be suspended by a condition precedent of the kind that is posited for here.

GORDON J:   Condition subsequent – you keep saying “condition precedent”.  You mean “subsequent”, do you not?

MR DUNNING:   I am sorry, I meant “condition subsequent” – my apologies.  Then can I ask your Honours please to go to page 477 in the reasons of Justice Deane.  At about point 2 on that page, his Honour records:

So viewed, s. 109 is not concerned merely to resolve disputes between the Commonwealth and a State as to the validity of their competing claims to govern the conduct of individuals in a particular area of legislative power. It serves the equally important function of protecting the individual from the injustice of being subjected to the requirements of valid and inconsistent laws of the Commonwealth and State Parliaments on the same subject . . . The decisions to that effect, while perhaps making the ascertainment of the law sometimes more difficult, leave intact the essential protection which s. 109 affords a person faced with the competing, and conceivably impossible, demands of inconsistent Commonwealth and State laws. In that predicament, he or she cannot be subjected to the ordeal of being legally required to comply with both. For so long as inconsistency exists, s. 109 –

deprived it of the operation. Justice Nettle, if I can return to the question you asked me. In our respectful submission, passages such as the passage in Justice Deane’s judgment that I have just taken your Honour to, are inconsistent with the notion that in a section 109 context one can be left with the “condition subsequent” style argument, such that at a later point in time, it is said that section 109 will or will not have operated when it did or did not operate at an earlier point in time.

Can I then move to our learned friend’s criticism of Metwally and the reasoning that underscores the view of the majority.  In that regard, our friends for the Commonwealth posit four considerations that are said to justify the reopening of the decision.  We accept obviously that the Commonwealth Parliament is competent to make laws of retrospective operation, though that in itself is not a reason for reopening the field and, true it is, the Commonwealth can address by not covering the field but again that does not justify itself a reopening.

The third proposition, in our respectful submission – so, the first two, we say, one does not have to dispute them.  They just do not lead to a serious reason for reconsidering, much less considering incorrect the reasoning of the majority in Metwally. As to the third consideration – that section 109 depends on the current state of the law – in our respectful submission, your Honours would not accept that as a proposition and, really, for the reasons that were touched upon by Justice Edelman’s question to our learned friends because this is not just a case concerned about the current state of the law. It is about the current law and whatever any future law might be.

Then, the fourth proposition that it renders the State law inoperable rather than invalid, and whatever difficulties that may or, in our submission, do not present in the present case, again is not a matter that would justify the reopening of it.

BELL J: Was the third proposition that the operation of section 109 depends on the current state of the law as distinct from the content of the law?

MR DUNNING:   Yes.

EDELMAN J:   So, my question was not suggesting that the third proposition required the content to be the content of existing and future laws.  It was the content of all existing laws but including existing laws that would have retroactive effect such as a condition subsequent, and so on.

MR DUNNING:   Yes.

BELL J:   That, I think, was the Commonwealth’s response.  One did not need to add “in future” to the concept of the content of the law because it is taken up by the first proposition which you accept.

MR DUNNING:   To accept the first proposition – that does not, in our submission, yield an answer to the point that Justice Edelman had raised and which I regrettably expressed poorly as I was describing it a little earlier.  Your Honour, is that a convenient time?

KIEFEL CJ:   Yes.  How are we proceeding in terms of time for completion?  Are we back on track?

MR DUNNING:   I think we are back on track.  At the rate I am going, I would expect I will finish ‑ ‑ ‑

KIEFEL CJ:   Be finished at about a quarter to three.  I think that was the initial assessment.

MR DUNNING:   Yes.  Whether it is quite – put it this way, I will certainly finish before the end of the afternoon.  I will endeavour to be finished by a quarter to three, Chief Justice.

KIEFEL CJ:   I am not requiring you to.  I just want to know where we are for tomorrow.

MR DUNNING:   I think, in terms of tomorrow, there should be no reason why we will not finish by lunchtime as had been anticipated.

KIEFEL CJ:   Yes, thank you.

MR DUNNING:   Thank you.

KIEFEL CJ:   The Court will adjourn until 2.15 pm.

AT 12:44 PM LUNCHEON ADJOURNMENT

UPON RESUMING AT 2.15 PM:

KIEFEL CJ:   Yes, Mr Solicitor.

MR DUNNING:   Thank you, your Honours.  Your Honours, can I just finish off the Metwally point, which I was close to finishing before we broke, and then deal with those two questions I said I would deal with in relation to a question from Justice Keane and also the decision in Daniell.

To finish off the submissions on Metwally, can we ask your Honours to take up our written submissions at paragraph 90.  There we use the language the Commonwealth were then using of “contingent”.  Our learned friend the Solicitor for the Commonwealth has said that perhaps “defeasible” or “condition subsequent” would have been a better expression.  In our respectful submission, they are, for present purposes, relevantly synonymous, but the point really is this.

We extract at the end of 90 the relevant provision of section 109 and in the end an acceptance of the proposition put forward is that 109 would, in truth, be read as meaning “when the law of a State is conditionally inconsistent with the Commonwealth” and that is simply not what section 109 provides for. It does not, as a matter of language, comprehend a conditional operation. In fact, in our respectful submission it contemplates the opposite.

That leads to the vice we have identified in paragraph 91. Because it makes it contingent or it makes the condition subsequent this later event, then the right to act contrary to the State law will have occurred before section 109 has been engaged to sterilise the State law because at that stage there will only be at best for that argument conditional entitlement to do so. We say that as a matter of language that is not what section 109 provides for nor is it consistent with how it has been dealt with in the past.

Can I then move, please, to just add a few brief submissions beyond what we have in writing about whether Metwally ought to be overruled.  Now, it was said by way of criticism by the Commonwealth that one of the difficulties with Metwally is the Commonwealth elects to vacate the field.  The State law then becomes operative again as a result of it doing so and under the principle in Metwally the State then has to enact a further law and that that is an undesirable thing. 

In our respectful submission, the opposite is the case and is so for this reason. Section 109 will have operated to have rendered a law inoperative and people can have organised their affairs around that. The Commonwealth vacate the field. So, going forward, the State law becomes operative again and will regulate persons subject to it according to its terms.

Whether there should be a retrospective dealing with those persons during that period of a lack of operation of the State law is not a matter for the Commonwealth to decide unilaterally and is much better a matter resolved by the State Parliament.  It was its law that was rendered inoperative attending to the contingencies and demands of its government and as a result of the Commonwealth vacating the field it is it who ought to decide whether there should be some retrospective operation in respect of events passed.   So that rather than being a criticism of the majority in Metwally, it is in fact a matter that justifies not only the correctness of the decision, but it not being reopened and its continuation. 

Can we also deal with the suggestion that Metwally has not become sufficiently engaged, as it were, in the fabric of Australian law, that it might be overturned without concern in that regard.  We have passed up to your Honours an extract out of the Native Title Case 183 CLR 373. We have not passed up, obviously, all of the case to your Honours because it is quite lengthy. Can we simply ask your Honours, please, to notice these aspects of it. At 456 of the extract we have passed to your Honours, at about point 4, your Honours will see section 19(1) of the Native Title Act, which was the provision enacted, in our submission, in response to the law as it stood as a result of Metwally.

Might we ask your Honours then, please, to go to the foot of page 454 and might I invite your Honours to read that and the rest of the paragraph, going over to 455.

GORDON J:   Starting with the words “The provision authorising”?

MR DUNNING:   Yes, that paragraph, Justice Gordon.  Might we particularly ask your Honours to note footnote (304) and that is in aid of the proposition in the first sentence which, in our respectful submission, is the considered acceptance by this Court of the operation of the law without a hint that there was anything undesirable in it.

The other case we passed up to your Honours over lunch is a decision of the Full Court of the Federal Court in Doyle v Queensland [2016] FAFC 189; 343 ALR 260. Again, we passed your Honours just passages of it. It is a joint judgment of Justices North, Barker and White. Can we ask your Honours please to go to paragraph 39.

I should preface that, your Honours, by saying that in fact starting on page 266 at paragraph 27 is the discussion by the Court of the Metwally principle, the decision in that case.  It had been subsequently considered, I do not need to trouble your Honours to read all of that.  But can I direct your Honours’ attention, please, to paragraph 39 on page 269 and, in particular, after the quote of the plurality, where their Honours say:

This was a confirmation of the operation of the Metwally principle.

Then their Honours go on in 40 and 41 to describe its operation.  Then at 43:

As can be seen, the plurality in the Native Title Act Case regarded s 19 as indicating that a State law which is not otherwise inconsistent with the RD Act or the NT Act may “confer” validity on past invalid acts. Such a law does not infringe the Metwally principle.

Then, your Honours, at paragraph 45, at about lines 40 to 45 – perhaps about line 36:

This led to some submissions before this Court, as it had in the proceedings at first instance, as to whether the quoted passages from the Native Title Act Case constituted part of its ratio decidendi or were obiter dicta.  In the view we take of the matter, this is a somewhat arid argument.  Whether or not the quoted passages are part of the ratio or are dicta, it is plain that they were at the heart of the reasons of the plurality in the Native Title Act Case concerning the constitutional validity of provisions in the NT Act relating to the validation of past acts which would otherwise have been invalid.

So in our respectful submission, it is not right to contend, as our friends have, that Metwally has not attracted either approval or has been acted upon in a way that would be a material consideration into not only refusing to reopen it – but also, in any event, not coming to a different view as to the correctness of the law.

Finally in that regard, your Honours, and I will not trouble to take you to the cases themselves, but can I ask your Honours, please, to go to paragraph 83(a) of our written submissions. We simply ask your Honours, please, to note the cases that we refer to at footnotes 149 and 150, of the importance of section 109 in relation to the citizen knowing where she or he stands and the particular application of that consideration to the present case, which leads ultimately to us conclude there is not an appropriate reason to look to reopen Metwally.

In any event, the reasoning is reasoning that is sound – contestable, no doubt, but sound and it has been acted upon in a way subsequently that would tend against either its reopening or an alteration of the law, so that it might protect against cases precisely such as this.  Unless your Honours have any questions, that is all I was proposing to say about Metwally.

Justice Keane, can I take up a point that you took up with me before lunch and that was your question about whether there was anything either in the state of the authorities or the special case that donations had to be either State or federal.  My answer to you was that there was nothing in the authorities and we did not think there was anything in the special case.  We checked over lunch and we could not see anything in the special case that would evidence such a conclusion.

In that regard, we would also draw the Court’s attention to what the consequences of that are. If we can ask your Honours please to take up 302CA again and if we go to subsection (1), it has the consequence in respect of section 275 of the Queensland Act to say that, despite section 275, the person may give a gift to, let us say for the present illustration, the political party, so let us say it is a property developer and it gives it, on the strength of (1)(e).

When one goes to the rollback in subsection (3), the rollback only occurs in circumstances where, relevant for present purposes, (3)(b)(ii) is engaged. That has the consequence that, unless it is used only for a State electoral purpose – and a State electoral purpose is in respect of a State election – then it will not engage the rollback position. Consequently, the property developer makes a donation in contravention of section 275 because it is ineffective.

It is not just that that money might be spent on federal purposes some time down the track.  The rollback will only occur if all of those funds are applied to the conduct of a State election, which will leave potentially a large area for donations to be made which will inure to the benefit of the campaign or the operation of a political party for seats in the Legislative Assembly.

It is really the point Justice Keane you touched on I think yesterday, that you in effect free up money for other purposes.  So the property developer will be left free to donate to the State party, focused amongst other things on getting candidates elected to its Legislative Assembly and provided that money is not identified as all going to a State election, the rollback will never be engaged, notwithstanding it does not go anywhere near a federal election issue.  If it be necessary, similar illustrations would be at State party headquarters, State secretary, that style of thing, even a telephone bill.

Finally, Justices Gordon and Nettle, can I return to the topic of Daniell and may I ask your Honours please to take up Daniell again?  Justice Nettle, I apologise, I think I might have been slightly at a cross‑purpose in responding to your Honour’s question about what appears at the top of 31 and I hope I will clear that up by the submissions I am about to make. 

Can I ask your Honours, please, to go to page 25 again and your Honours will recollect I took you to part of the argument and I identified Smith v Oldham and then I identified the sentence that starts “The power, if not exclusive”.  In the interests of speed and expediency I may have told not enough of the story.  Can I take you to the third argument that was in play on behalf of the prosecutor and that is the one that you will see about halfway in that paragraph:

If sec. 14 is not otherwise authorized, it is valid under the defence power –

so that what was, in fact, being contended for on behalf of the prosecutors was that the validity of the law could be determined in three ways.  One was as a matter of exclusivity.  The second was if not exclusive then nonetheless it was validly enacted under the power that the Commonwealth had in respect of Commonwealth elections and if the Commonwealth wanted for power in that regard, it was justified under the defence power.

Can I take you then, please, to the respondent’s submissions and the importance, Justice Nettle, is I am ultimately going to submit that what is at the top of 31 is, in fact, in relation to the case that the respondent was propounding, not the applicant or the prosecutor.  So, if I can take your Honours, please, to the top of page 26, the respondent was saying section 14 of the Commonwealth Act is invalid:

The power given by sec. 9 of the Constitution to a State Parliament to fix the days on which Senate elections shall be held is exclusive. Sec. 14 is an attempt to cut down that power –

So there was a contrary argument being run that said the time and place provision in section 9 of the Constitution was an exclusive power of the State and section 14 of the Commonwealth Act was offensive to that exclusive power and, therefore, invalid.

Your Honours will recollect that I took you to page 29 and the passage there regarding inconsistency.  What the reasons seem to do is deal with the prosecutor’s argument first and then deal with the respondent’s argument.  That is perhaps most clearly made this way.  Can I ask your Honours to go to page 29 and about point 7 on the page your Honours will see the expression, speaking of the Commonwealth Act, “assumedly competently made”.  So, it seems the way that their Honours in the plurality dealt with the matter was to deal with the prosecutor’s argument on the assumption of validity and then come to deal with the respondent’s argument as to invalidity.

Then if we go to the foot of page 30, the respondent, however, strongly contended that such an enactment was beyond the competency of the Commonwealth Parliament ‑ two grounds.  The first one is that the prohibition of State elections on the same day was not incidental to the acknowledged power to legislate as to Commonwealth elections. 

It was not an adoption, in our respectful submission, of there being an exclusive Commonwealth power in relation to elections; rather it was the manner in which their Honours were dealing with the respondent’s argument that the Commonwealth wanted for power because it was trenching upon the exclusive power of the State by section 9 of the Constitution.

In our submission, what their Honours record through to about point 3 or 4 on the page, to the point where they start the second argument makes that clear. In our submission, it is also made clear by the passage at about point 6 or point 7 where their Honours say that that was the exercise of power not under section 9 of the Constitution but under the ordinary State Constitution. Now, the Commonwealth Parliament, under its combined provisions, has power to regulate its own elections. Section 14 is such a regulation. The second argument as to incompetency therefore fails.

If what their Honours were there talking about was section 14 enacted as an exercise of exclusive power, on the strength of Smith v Oldham and on the basis upon which it had been put to them by the prosecutors, your Honours would not, in our respectful submission, have expected their Honours to have expressed it that way.  So, Justice Nettle in particular, that is the response we would give to your Honour in relation to that.

I did not deal with Justice Higgins until I went back to check that matter.  Can I deal with Justice Higgins’ reasons now as well.  Can I ask your Honours, please, to go to page 32, at about point 4, at the start of his judgment ‑ ‑ ‑

EDELMAN J:   Where we get to then, or where you get to in your submissions in relation to the joint judgment is that they just have not dealt with the submission about exclusivity?

MR DUNNING:   I would take it further than that, Justice Edelman.  They must have implicitly rejected it and I make that submission for these reasons.  First, it was squarely raised in argument and, secondly, it was necessarily a proposition that had to be dealt with anterior to 109 and really anterior ultimately to the ‑ well, if not anterior to the respondent’s arguments as to incompetency, at least alongside it.

So that if you were dealing with an argument that the problem with section 14 was that it offended the State’s exclusive power under section 9 of the Constitution, you really would have needed to have dealt with exclusivity there. Given the number of judges involved, one, in our respectful submission, cannot read it other than by implication a rejection of the concept of exclusivity in Smith v Oldham.  But I cannot take your Honour to anything on any of the pages that says that in terms.  I accept that.  Can I take your Honours, please, then to Justice Higgins’ reasons.  At about point 4 on page 32, his Honour says:

I am of opinion that sec. 14 of the Commonwealth Electoral (War‑time) Act is within the power of the Commonwealth Parliament.

So his Honour in fact does seem to have dealt with the respondent’s competency argument first.  So his Honour in fact does seem to have dealt with the respondent’s competency argument first.  Then on page 33, at about point 3:

We are dealing with a territory which is subject to two different Parliaments, each competent to make laws within its own ambit of powers.

Then his Honour recounts what the sections were. 

The words of sec. 172 stand; and if sec. 14 of the Federal Act were repealed to‑morrow, the direction in the Queensland Act to take the poll on the day of the Senate election would be binding, as part of the Queensland law, without re-enactment.

The standard application of principles in relation to 109.  Then we see at about point 8:

Under sec. 109 of the Constitution, the State law is invalid only “to the extent of the inconsistency”; . . . For the purpose of sec. 109 of the Constitution the two Acts are to be regarded as Acts otherwise valid but in collision; and the State law yields only to the extent of the collision.

Where, in our respectful submission, that leaves the state of the law on exclusivity is there was a three‑member panel of this Court in Smith v Oldham, and your Honours will have seen in writing the arguments about whether it is right to say that it was the ratio of the case that the power was exclusive, but we accept the statements of each of the members who have been referred to regarding exclusivity.

But the fact is that some eight years later the very issue comes before this Court, and a Court of seven, having the argument pressed upon them and not in any sense of urgency because it had been removed from the Supreme Court, necessarily reject exclusivity of Commonwealth legislative power as a basis for deciding the case, not only in the way that it had been framed by the person prosecuting the argument, but as had necessarily been invoked by the person resisting the argument such that, in our respectful submission, a determination about Commonwealth exclusivity of legislative power is not about a decision regarding whether your Honours should or should not follow Smith v Oldham.  It is really a question about whether your Honours should or should not reject what was necessarily determined by their Honours in Daniell.  Just before I leave Daniell, can I make one final submission in relation to it.

EDELMAN J:   Daniell does not necessarily say that there is no exclusive power.  It just says you might read it as implicitly saying, well, if there is an exclusive power, this is not it.  The core would be narrower.

MR DUNNING:   We respectfully submit, Justice Edelman, narrower in the extreme because this was a case about a competing State electoral law.  So we are not talking about the intersection of State and federal laws on the fringes.  This was a State law that says if you are going to have a Senate election, you should conduct one of these polls on the same day.  I accept what your Honour says and accept that the matter admits the possibility that there might be a core amount of Commonwealth exclusivity but it is, relevantly for the purposes of this case, nowhere near what would be necessary for the purpose of invalidating 275 of the Queensland Act. 

NETTLE J:   Can I ask you one question?

MR DUNNING:   Yes, of course, Justice Nettle.

NETTLE J:   It follows from that, I take it you would say that there is no exclusivity in either polity in relation to the undifferentiated middle.

MR DUNNING:   It is unnecessary for me to make that submission, so yes.  Sorry, the answer to your Honour’s question is yes.  There is a reason for that but ‑ ‑ ‑

NETTLE J:   Do you contend that the State has any legislative power with respect to donations which are expressly for the purpose of Commonwealth electoral purposes or do you concede – I do not mean that pejoratively.

MR DUNNING:   No, I understand.

NETTLE J:   But do you concede that that is within the ambit of exclusive legislative power of the Commonwealth?

MR DUNNING:   No, I do not concede it in the terms in which your Honour puts it to me, and for this reason.  The State would have a legitimate interest in legislating in respect of donations for federal purposes, as in for the purposes of maintaining a presence that served both federal and State members in its location.  So it comes to, when one talks about federal purposes, what we mean for that, yes, there would be a limit, undoubtedly where the State could not legislate beyond, because it might be for purely federal purposes.  But there would plainly be areas where there would be a relevant connection, and the States’ concurrent legislative power would entitle it to legislate there, even though it might have some impact.

NETTLE J:   Would that State power, do you contend, go into a gift for electoral purposes as defined in the Commonwealth Electoral Act?

MR DUNNING:   No, I do not think I could take it that far.  No, because if it was fixed on – no, I will take that back.  If it is received by a body with composite objects, even if it is tied to Commonwealth electoral purposes, it would still have a sufficient connection.

GORDON J:   To the State power?

MR DUNNING:   Yes.

EDELMAN J:   Is that because the Commonwealth electoral purposes might themselves, in some circumstances, coincide with the State electoral purposes?

MR DUNNING:   Yes, that is correct.

NETTLE J:   For example, Adani.

MR DUNNING:   Certainly in that situation it would.  I was thinking of much more micro donations to, for example, a federal candidate to enable him or her to pay the nomination fee.  But there would come a very small area where you would say, “Well, there could not possibly be an interest.”  But if we take an issue like, “Do you want to agitate against a matter that is prominent in public discourse and bears upon State and federal elections?” - and Adani would be a good one - there are federal implications in relation to the approval, there are State implications in relation to the approval.  Things like jobs, in the other direction, would be said to touch on both.  So yes, there is something that would have the relevant composite objective and the State would have an appropriate connection to legislating in that regard.

GAGELER J:   You would say, surely, that your proceeds of crime legislation would be able to pick up a gift to a Commonwealth political party for Commonwealth political purposes subject to something inconsistent in the Commonwealth legislation?

NETTLE J:   We are not talking about that though.  We are talking about a prohibition upon a donor making a donation to a federally registered political party specifically for the purpose of electoral purposes as defined in the Commonwealth Electoral Act.  We are not talking about proceeds of crime that might be traced into a gift, which is obviously not the subject of this discourse.  We are talking about legislation which specifically in terms prohibits a gift to a Commonwealth registered party for Commonwealth electoral purposes, and you say the State has power to go into that?

MR DUNNING:   If it was a party with composite objectives, yes.  Justice Nettle, part of the reason we would make that submission is this law is directed at the favour that might be thought to be obtained by the giving of the gift.  What in fact the policy objective behind legislation like this is doing is actually regulating the giving of the gift, because that is in fact the vice that you are looking to stop or to moderate.

Your Honours, might I then move, please, to the last two topics on our outline, and that is the question of whether the Commonwealth has a head of power and the Melbourne Corporation.  The reasoning in ACTV is of utility to both, so I thought I might deal with some of it to some extent together so that we did not need to revisit ACTV.  Can I ask your Honours, please, to take up that decision.  Your Honours will find it in volume 3 of the joint bundle, tab 20. 

First of all, can I ask your Honours, please, to go to page 163 of the report - in fact, 162, to the reasons of Justice Brennan as his Honour then was.  Your Honours will recollect you were taken to this passage yesterday.  It was about 95D, which purported to prohibit broadcasts in relation to State elections.  Justice Brennan deals with this point, relevantly for our purposes, from the top of 163 onwards.  His Honour records on the third line:

The Constitution is constructed on the footing that each State has a Parliament . . . The Constitutions of the respective States are continued as they were “as at the establishment of the Commonwealth”. Representative government in the States is a characteristic of their respective Constitutions, and the legislative power of the Commonwealth cannot be exercised substantially to impair the freedom of discussion needed to maintain representative government . . . However, another implication drawn from what Dixon J. in Melbourne Corporation v. The Commonwealth called “the very frame of the Constitution” bears upon the validity of s. 95D.

His Honour then refers to the Constitution being predicated on the continued existence of States as independent entities, and then cites that oft‑cited passage from Melbourne Corporation your Honours will see there.  His Honour records, as we accept, that:

the laws of the Commonwealth can validly facilitate the functioning of the States –

But then in the fourth line:

a law which purports to control, for good or ill, political discussion relating to State elections purports to burden the functioning of the States with the constraints it imposes.

In our respectful submission, one could interpolate there, in fact possibly with even greater force, that a law which purports to control the capacity of a State to regulate the efficacy of its electoral system, suffers from that vice.  If we can then take your Honours please to page 164 at about point 4 at the end of that first paragraph:

Although s. 95D(3) and (4) is a law with respect to broadcasting, it is offensive to the implication which protects the functioning of the States from the burden of control by Commonwealth law. It is invalid on that account.

Then can we ask your Honours, please, to go to page 242 in the reasoning of Justice McHugh.  His Honour’s discussion in this regard starts at about point 7 on page 241 under the heading “Does Point IIID represent a substantial interference with the functioning of the States?”.  His Honour records at the outset that his Honour considered those provisions invalid.  Then at the foot of that page:

At federation, each of the colonies had its own legislature and executive, governed and controlled by a Constitution, based on the institutions of representative government and responsible government. The terms of ss. 106 and 107 of the Constitution necessarily give rise to the inference that, subject to the alteration of the Constitution under s. 128, the States are to continue as independent bodies politic with their own Constitutions –

His Honour then sets out sections 106 and 107. Then can I ask your Honours please to read the next paragraph that starts “To be consistent”. We would obviously draw particular attention to the words in the middle of the paragraph:

The inference to be drawn from the continuance of the States . . . is that, subject to a plain intention to the contrary, the powers of the Commonwealth do not extend to interfering in the constitutional and electoral processes of the States.  It is for the people of the State, and not for the people of the Commonwealth, to determine what modifications, if any –

Now, in our respectful submission, that is an accurate statement of the law in this regard.  It fortifies the argument we make in relation to a want of Commonwealth power to legislate in the way the Commonwealth has and justifies the challenge made on Melbourne Corporation grounds.  Can I deal with the first of those, the head of power issue?  In the end, and this matter is dealt with extensively in writing and I am mindful of the time - in the end it really distils to this.  The plaintiff and Queensland accept that the power to legislate in respect of your electoral processes is a necessary incident of being a polity but that does not tell us whether it is, in fact, exclusive. 

The plaintiff says, well, you can infer exclusivity from that matter and it would seem by parity of reasoning if you can infer it from the States you can infer from the Commonwealth and the passages I have just taken you to in ACTV would seem to support that.  On the other hand, the Commonwealth say, well, one finds it from the text. 

Ultimately, Queensland only puts this submission in the alternative inasmuch as the submission is only put on the basis that if there is a Commonwealth exclusive power in relation to Commonwealth elections by parity of reasoning there will be one in respect of State elections and then one has to deal with the interaction between the State and Commonwealth law as the interaction between two exclusive powers. 

If your Honours do not find that there is Commonwealth exclusivity then we have not pressed your Honours to decide the question of State exclusivity because it does not necessarily arise in the case and I would have to accept particularly in ‑ ‑ ‑

KIEFEL CJ:   Is it a standalone argument or is it in aid of the Melbourne Corporation argument?

MR DUNNING:   Your Honour, it is a standalone argument but even if it were rejected it would plainly be in aid of the Melbourne Corporation argument. Ultimately, it distils to be if your Honours accepted that there was an exclusivity of Commonwealth power because it is in the nature of a polity like the Commonwealth to have such an exclusive power then one would find a like exclusive power for the States. If one arrives there on the textual analysis by the Commonwealth of the Constitution, the point for the State exclusivity would not be as strong but still well available.

EDELMAN J:   Does your Melbourne Corporation argument add anything to the argument that the scope of the power that the Commonwealth has to affect State elections is to be confined in the way, for example, described by Justice McHugh in ACTV?  In other words, if you were not successful in confining the power as Justice McHugh had described it to – so that it was a power that could affect, in this case, the States because it did not interfere with the constitutional premise of the States continuing as bodies – independent bodies politic, could you succeed on the Melbourne Corporation argument?

In our submission, we could, for this reason.  It would be possible to come to the view that the Commonwealth might have a power to legislate in this general area, but the manner in which it has legislated would offend the Melbourne Corporation principle.  The short answer to your Honour Justice Edelman’s question is no.  Practically, there is plainly much force in the point your Honour has just put to me because an acceptance – perhaps if I can reflect back in this way. 

If one of your Honours were to accept for Melbourne Corporation purposes, as had been accepted by the judge in ACTV I have just taken your Honours to, that the law was obnoxious to the continuation of the States in the way that offended the Melbourne Corporation principle, then one could see powerful reasons why that same judge would also conclude that the Commonwealth legislation simply did not have an adequate connection to Commonwealth power.  But could you completely exclude the possibility?  I think the answer is no.

Sorry, Chief Justice Kiefel, did I finish answering the question that your Honour had asked me?

KIEFEL CJ:   Yes, I think you did.

MR DUNNING:   Very good, thank you.  Where that leaves us on this point is that whatever else might be the disposition of the issues in the case, once you get to this head of power/Melbourne Corporation point ‑ I take the force on a practical level of the point Justice Edelman has just made and our learned friend, Mr Kirk, for the plaintiff said as much when he said really, the head of power point is, if you succeed on it, will just be a species of Melbourne Corporation and I think what it shows is how closely aligned those questions are, but whatever else gets decided in the case, once you get to the point of determining those last two propositions, undoubtedly, 302CA(3)(b)(ii) is obnoxious to the continuing existence of the States because it plainly goes out of its way to render inutile a State legislative scheme that goes to the very core of the State of Queensland or to any of the other States or Territories, for that matter, as an independent body politic because it attacks a piece of legislation that is designed for good reason to ensure the efficacy of that legislative scheme.

That would be a sufficient basis on which to dispose of the case, although we accept logically your Honours will obviously deal with – we accept that it is an analysis that comes at the end after questions of validity would ordinarily have been otherwise determined in the way the parties have framed then.

Your Honours, we did not intend to say anything more about the section 109 general invalidity than we have already said in writing. Finally, in relation to any reading down, we have reflected upon the topic, having been raised a few times. If your Honours were to find that section 275 was offensive as a result of it offending the Commonwealth’s exclusive power, then section 275 could be read down, in accordance with section 9 of the Acts Interpretation Act (Qld), so as not to apply to donations made on terms which require the donation to be used for federal electoral purposes. It is not a reading‑down point, but it is a lack of inconsistency point, if I can put it this way.

If the prohibition on taking a donation under 275(1) were struck down by your Honours, that would not invalidate 275(4) and its cognate provisions about the entitlement of solicitation simply because the federal Act is silent on that.  Your Honours, unless we can assist you any further, they are the defendant’s submissions.

EDELMAN J:   You do not say anything then about reading down, or more properly that species of severance that involves reducing the scope of application of a provision such as 302CA - your so‑called reading‑down submission is only confined to the Queensland legislation?

MR DUNNING:   In terms of anything that is capable of being read down, yes.  Perhaps I should have dealt with that, Justice Edelman.  The reason you cannot read down 302CA, in our respectful submission, is that it would give the section an operation that cannot have been intended – that is most powerfully in respect of 302CA(3) because were you to read – in our respectful submission it would not be right to conclude that the legislature would have intended, assuming they have power to do it, to have enacted the protection in 302CA(1) to enable a gift by incapacitating the State law, but without the rollback provision in (3).  When one looks at it, it is a scheme that was designed – and that is the way it has been put to your Honours.  It is a scheme that was designed to touch lightly on State legislative power.

EDELMAN J:   Even under a section 15A type of severance where if the question were entire invalidity or only a little bit of invalidity it could be reduced in its application or disapplied or severed in its application?

MR DUNNING:   To which our response is that once one tries to sever it, it is impossible to sever it without turning it into a different section.  It was a section, as has been pressed upon your Honours, that was designed – my language - to touch lightly on the State legislative scheme.  Now, we hope we have demonstrated it does precisely the opposite to that.  It is for that reason that one cannot practically either read down or sever aspects of it without producing a different section, operating in a different way that there

is no reason to think the legislature had intended.  Unless there is anything further, they are our submissions.  Thank you, your Honours.

KIEFEL CJ:   Thank you, Mr Solicitor.   Solicitor‑General for New South Wales.

MR SEXTON:   If the Court pleases.  In light of your Honour the Chief Justice’s comments this morning, I will not say anything about the implied freedom.  We did want to make one point about the Melbourne Corporation question that has been raised in the proceedings. 

Your Honours have been taken to the principles underlying that doctrine in the various authorities but if I could just ask your Honours to look at section 302CA again and subsection (3) and your Honours will note that if the circumstances are such that one does not fall within paragraph (a) or paragraph (b)(i) then what happens under (b)(ii) is that effectively the Queensland prohibition on donations from property developers is suspended either in its entirety or for however long the donation is held before its use or other identification for use for State electoral purposes. 

So, in either instance, there is, we would say, in terms of the Melbourne Corporation doctrine, a significant impact on the ability of the Queensland Parliament to protect its own electoral process.  The extent of that impact is, in a sense, determined by the construction of (b)(ii).  Your Honours have heard some submissions about that. 

The Commonwealth has made the submission that, in effect, the provision is rolled back to the – when the donation is used or identified for use that the provision is, in effect, rolled back to the original donation.  If that were correct then, of course, the Queensland provision would not be suspended in its entirety or indefinitely and the Commonwealth relies for that submission as to the construction on the note to (b)(ii) and certainly there is support for that submission in the note, although, given the effects that there might be for the original donor in those circumstances there must be, we would say, some doubt as to what is the – of those choice of two constructions as to which is the correct construction of that particular provision.

But, in any event, whether it is suspended in its entirety or whether it is suspended in a sense pending the use or identification for use, we would say that that provision interferes with the capacity of the State to function as a government by undermining a measure chosen by the State to protect its electoral processes.  That is the only point we wanted to make about the Melbourne Corporation.  Unless there are any other matters, your Honour.

KIEFEL CJ:   Solicitor‑General for the Australian Capital Territory.

MR GARRISSON:   May it please the Court.  Your Honour Chief Justice, in terms of your observations earlier, since the Attorney‑General for the Australian Capital Territory was intervening only in relation to question (a) we have no oral submissions to put and will simply rely on our written submissions of 25 February.  Thank you.

KIEFEL CJ:   Solicitor‑General for Tasmania.

MR O’FARRELL:   May it please the Court.  Your Honours, the sole point on which we are instructed to intervene is the validity of section 302CA and we do so for the purpose of attempting to protect the integrity of Tasmania’s electoral processes which, compared to the other States who are here today, are relatively under‑developed, if I can put it that way.

Now, your Honours, I will not trouble your Honours too much with points 2 to 5 of my outline, except to say they are statements which I expect are relatively uncontentious.  But at the front end of the submission is what Justice Isaacs said in Smith v Oldham that the power to regulate federal elections is with that subject matter and we submit that that ought to be borne steadily in mind when examining 302CA.

The real point of contention in this case arises under our paragraph 6, which is the extent to which section 302CA ceased to control a gift that may be used for electoral expenditure in relation to a federal election.  To that extent an unallocated gift, which is equally available – and we say almost certainly available – also for State electoral purposes is, by section 302CA, put beyond the power of the States if 302CA is valid.  So the State’s power to ward off threats to its electoral process in the manner of its choosing is significantly curtailed.  We just refer in our submissions to the threat posed to electoral processes, which was identified in McCloy, for example.

So, when we look at section 302CA, your Honours, we submit that properly construed it does not operate at a federal electoral level, it operates at a transactional level before the election process, that is to say that the purpose and effect of the provision is to identify the parties to the gift and also the terms, if any, on which it is given. 

Now, in the case of the power to make section 302CA, we submit that this notion of expenditure that may be used at some indeterminate time in the future for the purpose of Commonwealth electoral expenses is at the outer limits, to pick up the words of Justice Dawson in Leask, of the power.  So, at that point, the purpose and effect of the provision becomes all important. 

We would submit that on a proper construction of 302CA, it affects not only the sorts of provisions that we have been talking about for the past few days, it would affect a State law that seeks to regulate a gift transaction, not by a prohibition on a particular donor or a class of donors or a class of recipients but by the conduct of the parties to the transaction. 

I will give your Honours an example.  We would submit picking up the sorts of conduct provisions that are used in the competition law, for example, a hypothetical example of a provision that a State might look to pass short of prohibition of a gift at all might be something to the following effect, if I can just read this to your Honours:  “A property developer who gives to a political entity a gift that may be used for a State electoral purpose must not, in giving the gift, make an arrangement or arrive at an understanding, the purpose or effect of which is to secure or obtain a pecuniary advantage or benefit for the property developer in the course of a property development business in Tasmania”. 

Now, we submit, that a provision of that nature which is directed at Tasmania to Tasmanian property developers in order to deter them from entering into arrangements that can be made by a nod or a wink would be caught by (1) - 302CA(1) and not excused by (3).  That, we say, is the extent to which or one extent to which the reach of section 302CA can be gauged.  It is an enormous reach, we say, and at the outer limits of the power, as we say, the purpose and effect of 302CA is really quite stark.

So with Tasmania’s blank canvas, as it were, the operation of the provision is really quite stark, because at the end of the current review into Tasmania’s electoral laws, the State’s field of action when it enters it, when it opens the gate and walks into the field, it will find the Commonwealth there, with significant hurdles as to the legislative choice that the State is then able to make.

So with that, your Honours, we do not really have much more to say.  We say that section 302 is invalid, and we put two separate arguments.  The first relates to the proposition that if it is an exclusive power, in whatever sense the Commonwealth finally lands on that power, we say then it results in no real operative change to anything that the Commonwealth or people who wanted to contribute to a Commonwealth political purpose, could do before section 302CA was made.

If the State has no power to trench on Commonwealth electoral purposes, then a person could donate to a Commonwealth political entity for that purpose and no State legislation could touch it.  We apprehend that this is similar to the standalone argument advanced by my learned friend, Mr Dunning.  So we say that, in those circumstances, 302CA would have no actual or immediate operation in relation to federal elections.  So at best,

its connection to the subject of federal elections is insubstantial, tenuous or distant.

We would also submit that the four points that my learned friend, the Solicitor for the Commonwealth, makes in order to connect the provision to the power, may be apt to describe the power at its core, but not at its outer limits.  On the other hand, your Honours, if the power is not exclusive then like everyone else, we retreat to the Melbourne Corporation, and enough has been said about that.  If your Honours please.

KIEFEL CJ:   Thank you, Mr Solicitor.  Solicitor-General for South Australia.

MR BLEBY: May it please the Court. On the topic of exclusivity of Commonwealth power in relation to federal elections, in the absence of any express provision in the Constitution to the effect that the Commonwealth Parliament’s power to legislate with respect to federal elections is exclusive, of course any conclusion of exclusivity can only arise by necessary implication, having regard to the nature and subject matter of the power.

South Australia’s submission is that, even if there is some aspect of the Commonwealth power to legislate in relation to federal elections that is properly regarded as exclusive, it does not follow that all aspects are.  Consequently, South Australia takes issue with the position of the Commonwealth that State Parliaments do not have power to make any laws relating to federal elections, with all the breadth that that phrase imports, other than by the specific and limited grants in sections 7, 9 and 29.

Each of those sections of the Constitution, together with sections 10, 31 and 51(xxxvi), give the Commonwealth Parliament paramountcy on the topics they regulate. The Commonwealth submissions then transpose the topics in 7, 9 and 29 to claim exclusive power in relation to federal elections.

The Commonwealth relies therefore really on a contrast in grants of power under the Constitution but that, in our respectful submission, is an insufficient analysis. Other matters have to be taken into account. First, the States’ power to regulate their own electoral processes is as broad as the Commonwealth’s is with respect to its processes, being laws of course for the peace, order and good government of the States, and that includes of course the regulation of political donations.

Second, a State law that does so regulate political donations may also touch on a subject matter of concern to federal elections and do so not insubstantially, because it concerns donations to an organisation whose activities include the promotion of the election of candidates to a house of the State Parliament and a house of the Federal Parliament. That does not alter the character of the law as regulating State elections. Third, and of course of particular importance to any thesis of necessary implication of exclusivity, the Commonwealth legislative powers with respect to federal elections are paramount by reason of section 109.

Now, any exclusive power of the Commonwealth operates as a prohibition on State legislative power.  We see this in sections 52, in part, 114 and section 115.  The Commonwealth of course has offered a thesis as to the content of that prohibition by analogy with Bourke, but it is nonetheless a prohibition, and this implied prohibition is asserted notwithstanding the States’ indisputable ability to regulate the conduct of their own elections as independent constituent parts of the Federation and notwithstanding that the consequence of such an implied prohibition would be that the States cannot regulate any aspect of their own election which also concerns federal election, unless that connection is insubstantial, tenuous or distant.

EDELMAN J:   Effectively as though there is an implication of a provision that says the States have power in relation to State elections, but not federal elections.

MR BLEBY:   I am sorry, I missed the premise for that question, your Honour.

EDELMAN J: It is as though the implication of a power in the Constitution provides for the States to have power in relation to State elections, but not federal elections.

MR BLEBY:   In absolutist terms, yes. Of course, this asserted implied prohibition that the Commonwealth raises is extrapolated from grants of power in sections 7, 9 and 29 in the first instance and the assumption that the Commonwealth says is built in to sections 10 and 31. But that extrapolation does not account for the base or premise, of course, that powers are concurrent and the saving power of the State Parliaments in section 107, given the matters that I have just identified and been through. The effect of the Commonwealth’s thesis is that those specific grants are the basis - and we say a terribly thin basis - from which to imply a prohibition.

The Commonwealth then as a matter of precedent relies on Smith v Oldham and specifically the conclusion of exclusivity of the power to regulate federal elections on the basis of this being a matter on which the States have no concern.  That was the phrase that Chief Justice Griffith used at page 358 and it was echoed at least in substance by Justice Barton from page 359.  I will ask the Court to go to Smith v Oldham in a moment, but that proposition that the States have no concern in federal elections cannot now be universally correct.

I will explain that in this way.  State electoral matters have always been of concern to the States - uncontroversial.  Colonies had power to enact laws to prohibit electoral donations.  Queensland had a power to enact the law that it has now enacted and has that power now unless it has been withdrawn.  I ask the Court to take up Smith v Oldham which is in volume 12 at tab 67 - of Justice Barton’s judgment at page 359 of the report.  Right at the bottom we have the statement that:

No power was given to any State to make laws with regard to federal elections, but existing State laws as to State elections were made applicable to federal elections –

during the transitional period.

GORDON J:   Do you accept that is subject to 7, 9 and 29?

MR BLEBY:   Of course, your Honour, and then - but my point about raising that paragraph is the emphasis on the otherwise lack of a grant.  Then we go to page 360 and following that lengthy paragraph, we have the statement right at the bottom:

Surely the proposition that States have and the Commonwealth has not the power to deal with the conduct of citizens in respect of federal elections is too grotesque to be entertained.

That, in my respectful submission, confirms that his Honour has approached this from a reserve powers position and put it as an either/or proposition.  Third, we then go to page 361 at about point 2 on the page:

We are asked, however, to regard the enactment as dealing with the conduct of the press, a subject within the competence of State legislation.  It certainly does deal with the conduct of the press, but in relation to federal elections –

and then my emphasis:

only.  It deals with it as the conduct of a body of citizens whose actions may, and often will, affect the result and issues of federal elections.  No State has anything whatever to do with such a subject as that.

That is echoed essentially but Justice Isaacs at page 365 where at about point 6 his Honour concluded that:

If then, the State does not possess the power, the Commonwealth must.

The subject matter of the present enactment is transparently beyond the competency of the State to control.

But rather than the Queensland laws dealing with federal elections only, States have always had the power to regulate organisations that promote candidates for election to a house of a State Parliament, and also to protect the integrity of their own essential organs, including by prohibiting donations to organisations that promote election of candidates to their Parliament – one of their essential organs.  Where that requires the States to step into the area of federal elections, my submission is that that consequently is necessarily a matter of State concern.  That, to be clear, is a thesis that distinguishes Smith v Oldham, or at least says that the reasoning behind the ultimate conclusion cannot be maintained now in its breadth. 

Can I move briefly to the reverse Melbourne Corporation question.  The plaintiff’s claim of exclusive Commonwealth power is expressly premised on a reverse Melbourne Corporation, which is of course a novel proposition.  Our submission is that Melbourne Corporation has no application to the question of Commonwealth immunity from State laws.  Melbourne Corporation states a limitation that is implied from the text and structure of the Constitution and based on the fundamental principle of the continued separate existence of the Commonwealth and the States as bodies politic to which the Constitution distributes powers of government.

That fundamental progenitor of the doctrine is addressed by the plurality in the Defence Housing Authority Case which is at joint book volume 11, tab 62.  The passage that I rely on is a little lengthy and I do not propose – it is page 440 of the report.  I do not propose to read through the entire passage.  It starts at about point 2 or 3 on the page, where the plurality begins:

In the application of the principle, however, it is necessary to differentiate between the Commonwealth on the one hand and the States on the other.

GORDON J:   Did you say page 440?

MR BLEBY:   Page 440, your Honour.  What we get from that passage, really down to the bottom of the page, is that Melbourne Corporation and Cigamatic have the same progenitor but they are different places of the polities in the Federation, especially having regard to the enumerated powers of the Commonwealth and section 109 lead to different consequences.

The plaintiff, in relying on this case in support ‑ they reverse Melbourne Corporation – referred the Court to this judgment of the plurality at page 443.  I will not take your Honours back to that but that is a statement purely about the question of interfering with executive capacities and of course, as the plaintiff acknowledged, Justice Brennan, at pages 425 to 426, especially disavowed any idea of reverse Melbourne Corporation.  In fact, it was only Justice Kirby in that case, at page 507, who considered the Melbourne Corporation:

seems a much sounder foundation from which to derive a coherent implied immunity of the Commonwealth than any offered in the Cigamatic line of cases.

So my submission is really it is supplementary to that of the Solicitor‑General for Queensland that, in the absence of any authority for a reverse Melbourne Corporation, your Honour the Chief Justice on Tuesday asked, given the existence of section 109, why such would be necessary. The plaintiff’s first answer was that an immunity arises prior to any exercise of Commonwealth power.

Now, that might be the case when it comes to a particular question of application of a recognised immunity, but it does not answer, in my respectful submission, whether, when examining the text and structure of the Constitution, a reverse Melbourne Corporation doctrine is necessary given the express existence of section 109.

So the plaintiff then looks to derive necessity for the implication from – I would summarise it as political and temporal considerations and that summary is in paragraph 23 of the plaintiff’s reply submission.  That approach to a constitutional implication we say is impermissible and for the reason that was probably, with respect, well expressed by Justice McHugh in McGinty v Western Australia –at tab 45 of volume 7 of the book of authorities - his Honour said at page 232:

that it is not legitimate to construe the Constitution by reference to political principles or theories that are not anchored in the text of the Constitution or are not necessary implications from its structure. I pointed out –

His Honour was referring to his judgment in Theophanous:

that the Engineers’ Case had made it plain that the Constitution was not to be interpreted by using such theories to control or modify the meaning of the Constitution unless those theories could be deduced from the terms or structure of the Constitution itself. It is the text and the implications to be drawn from the text and structure that contain the meaning of the Constitution.

In our respectful submission, the plaintiff’s submissions on temporal and political consideration transgress that directly.

EDELMAN J:   Does that mean your submission is that apart from Cigamatic there is no scope at all for any implied immunity at the Commonwealth level?

MR BLEBY:   That is my submission.  It follows then that at least in the area of regulating political donations the powers are concurrent and it is possible then to draw what the Commonwealth has described as a workable line between State and federal elections that represents a reasonable accommodation of competing Commonwealth and State interests.  But any such workable line can only be a policy decision on the part of the legislatures.

The plaintiff submits that the validity of the Commonwealth Electoral Act provisions and the Queensland amending Act is to be determined on the fact that political parties are organised across different government levels and on their practical effect.  That submission derives from a statement of the plurality in Unions New South Wales (No 1), which is at volume 13 of the joint book, tab 70.  Paragraphs 24 and 25 of that are drawn upon.  At paragraph 25 the plurality said, at page 550 of the report:

The complex interrelationship between levels of government, issues common to State and federal government and the levels at which political parties operate necessitate that a wide view be taken of the operation of the freedom of political communication.

That of course says nothing to answer whether a Commonwealth law is invalid for breaching a Melbourne Corporation doctrine and I turn to that.  South Australia’s submission is that – and I would be completely clear, especially in answer to a matter that your Honour Justice Nettle raised shortly previously – even a Commonwealth law, with a dominantly federal area of regulation, is capable of breaching Melbourne Corporation.

To make that good I need to be very clear about what it is that we submit here is necessarily protected by Melbourne Corporation.  It is not, as the Commonwealth has attributed to each of the interveners in its reply submission at 35, that the States have substantially unfettered choice in the regulation of gifts bearing on State electoral processes.  We do not go that far.  What is critical to the existence and the nature of the States is that they be free to protect their essential organs, including the Parliament and the ministry, from corruption and undue influence.  The importance of that was stated by the plurality in McCloy at paragraph 7.  McCloy is in volume 7 at tab 45.  At paragraph 7, the plurality said:

it was accepted that this purpose –

That was the purpose of the EFED Act:

is to secure and promote the actual and perceived integrity of the Parliament and other institutions of government in New South Wales.  A risk to that integrity may arise from undue, corrupt or hidden influences over those institutions, their members or their processes.  That risk arises largely from the need, on the part of political parties and candidates, for large donations in order to compete effectively in election campaigns.

I would ask your Honours to - I will not take you them now - but also just to mark paragraphs 34 and 38 of the same judgment to similar effect.  The importance of protection from that risk had of course earlier been highlighted by Justice Brennan in ACTV, which is volume 3, tab 20.  His Honour said, at about point 2 on page 156:

The Parliament chosen by the people –

and this of course is talking about the Commonwealth Parliament, but it transposes without difficulty:

not the courts, not the Executive Government – bears the chief responsibility for maintaining representative democracy in the Australian Commonwealth. Representative democracy, as a principle or institution of our Constitution, can be protected to some extent by decree of the Courts, and can be fostered by Executive action but, if performance of the duties of members of the Parliament were to be subverted by obligations to large benefactors or the parties to which they belong were to trade their commitment to published policies in exchange for funds to conduct expensive campaigns, no curial decree could, and no executive action would, restore representative democracy to the Australian people.

Now, the Commonwealth Solicitor‑General commenced his oral submissions by submitting that this case is not about the power of the States to protect the integrity of representative and responsible government by regulating donations that are made for State electoral purposes.  South Australia’s submission, in answer to that, is that this case raises for consideration the power of the Commonwealth to prevent the States from protecting the capacity of its essential organs to function, by prohibiting donations that have the potential to corrupt and unduly influence those essential organs.

If the States are unable to prohibit, from the outset, political donations of organisations whose objects or activities include the promotion of the election of endorsed candidates to a House of a State Parliament, the States are impaired in protecting their institutions from the threat of clientelist corruption – and that threat arises at the point of receipt of a donation.  As has already been observed, the potential risk of party‑based clientelism in the modern party political structure arises whatever use donations are ultimately put to, including where that use is for the dominant purpose of influencing a federal election or, of course, where it is unallocated but is simply filling the party’s coffers.

So, a State needs if it wishes and, pause here – of course, South Australia – the South Australian Parliament has today not seen this need contrary to the Queensland Parliament, but it needs to be able to ban political donations across the board subject to the implied freedom because otherwise donors will be able to continue to make donations as long as they specify that they are for federal purposes.  Legislation that seeks to protect essential State organs from corrupting influences given the fact that political parties operate across State and federal lines will be entirely undermined.  That is why we confine our argument to protection of the integrity of the State’s essential organs rather than the broader concept of electoral processes.

EDELMAN J:   Do you mean absolute protection or do you mean that the States have an unfettered choice as to how they will enact policies to protect their institutions?

MR BLEBY:   It is difficult to answer that, your Honour, without a concrete example – I am just trying to think where that might ‑ ‑ ‑

EDELMAN J:   Well, if the Commonwealth law had the effect of imposing greater restrictions than a State law.

MR BLEBY:   Yes, then we are in a nice question and it would really depend on the facts because on one view it might be that it is not doing anything other – it is not eroding the protection that the State has determined to put in place.  On another view, it might be that it is – in effect, seizing control to make that decision over and above the State. 

I wrestled with this question about where it might land and I am not sure of the answer.  It may well be – it might just depend on detail.  It may well be that is prohibited but absent really working it through and giving an example it is actually quite hard to answer that in the abstract.  I am sorry, your Honour.

NETTLE J:   What if, for example, the State took the view that it was sufficient protection to have caps but no prohibitions and a newly elected Commonwealth Government took the view that there should be prohibitions?

MR BLEBY:   Yes, well then it might be that the States are moved…..also by a view that protection of institutions is formed by the free flow of funds, in which case the Commonwealth is usurping that protection.  That is why, your Honour, I say it really does depend on the particular case and I do not think there is a single answer to the global proposition.

NETTLE J:   Is it always then just the one way, the Commonwealth cannot impinge upon the State but the State can impinge all it likes on the Commonwealth or is there a limit?

MR BLEBY:  The limit is section 109? That is the answer.

NETTLE J:   But subject, you would say, to Melbourne Corporation?

MR BLEBY:   I am sorry, your Honour, yes, subject to Melbourne Corporation because whatever else, the position is the State’s entitlement is protective.

NETTLE J:   Yes.  You say that as a result of Melbourne Corporation the Commonwealth cannot legislate in a way which impinges upon the free choice of the State as to how it regulates its political regime, putting it shortly.

MR BLEBY:   Yes.

NETTLE J:   But you contend that the State, in doing that – that is to say legislating for its own regime – may impinge all it likes on the Commonwealth, or to some lesser degree than that?

MR BLEBY:   If that is the necessary consequence of the State’s judgment, that is the consequence.

NETTLE J:   It may impinge all it likes.

MR BLEBY:   Yes.

NETTLE J:   Thank you.

MR BLEBY:   Assuming that is what it is doing.  The Commonwealth argument in respect of Melbourne Corporation, the essential argument is that section 302CA is not a law directed at the States in the sense that was expressed by the plurality in Fortescue – which is at volume 6 at tab 35 of the books and it was paragraph 130 of the judgment.

South Australia’s talent in this case is not of the kind that was unsuccessful in Fortescue.  The Commonwealth in that case had submitted that the States remained free to impose royalties as they chose.  That submission was accepted.  The statement at paragraph 130 of the judgment as to the text must be read in context when the Commonwealth legislation does curtail, that is the context of when the Commonwealth legislation does curtail capacity of States to function of governments.  The words directed there stand directed at standing on their own but the conclusion in Fortescue is at paragraph 137, where it was concluded by the plurality:

The MRRT legislation is not aimed at the States or their entities as was the legislation considered in each of Melbourne Corporation, Queensland Electricity Commission, Austin and Clarke.  The MRRT legislation does not impose any special burden or disability on the exercise of powers and fulfilment of functions of the States which curtails their capacity to function as governments.  The MRRT legislation does not deny the capacity of any State to fix the rate of royalty for minerals extracted by miners, and no burden upon a State attaches to any decision by the State to raise or lower that rate.

In that sense, if there is a special burden or disability which curtails the capacity to function as governments, my submission is, at least for the purposes of the general statement of the test at paragraph 130, it must then be taken to be directed at the States.  I make that good in this way.  The burden imposed here on the States to secure the integrity of their essential organs is of course unique to the States by the very definition of the area in which it has been regulated.

So, simply to say that there is not an overt direction as was, for example, in Austin or Clarke singled out the States from other classes of the community.  That does not mean that there is no unique directed burden here when the area of regulation is by definition only capable of applying to the States. 

Now, can I just give an example to make my broad Melbourne Corporation proposition good.  Take the example of a gift into a mixed fund.  The plaintiff’s submission is that it can be identified as being used for State electoral purposes at the point of ultimate expenditure on a State electoral purpose and it can be so because of disclosure regimes - money in, money out. 

Commonwealth law, of course, does not require tracing. Annual returns are based on total amounts. I will not take your Honours to the section, but section 314AB and 314AC deal with total amounts received and to donors but it does not trace any greater detail than that. But if we cannot trace a property developer’s donation then there is no basis for saying that the State’s effort to protect from clientelism has been other than entirely undermined because the indivisibility of the problem of clientelism which occurs at the point of the donation illustrates the mischief. Once the party has the money, that is it.

Second, for the reasons that Queensland has submitted, we say that section 302CA(3)(b)(i) can never be engaged.  A State law cannot simultaneously prohibit a donation that is to be used only for a State or territory electoral purpose and also require that donation to be identified separately in respect of the same donation.  South Australia has taken that latter course of identification, Queensland has taken the former.  It is, in my respectful submission, a nonsense.  It is inconceivable to have both those two things working together.  The paragraph cannot work in a prohibition sense.

Finally, South Australia has interpreted the exception in section (3)(a) and also the…..in (b), the word “only” as meaning exclusively for a State or Territory electoral purpose.  The Commonwealth’s criticism of the State’s construction was in not terribly nuanced form that this was wrong.  If we are wrong it does not say the provision but it would for the States be reassuring, at least, in part.  The difficulty we perceive is this.  Section 287 defines “State electoral purpose”.  The words that are in parentheses exclude only expenditure or communications with the dominant purpose of influencing electors in a federal election.

The definition in section 287, “State electoral purpose,” is otherwise very broad – it uses the words “relating to.”  The Commonwealth submits that given that all that is carved out from that definition is that that has the dominant purpose of influencing electors in a federal election, any dual‑purpose gift that is not so dominated would meet the definition of State or Territory electoral purpose.

The difficulty that we apprehend with that is that the carve‑out is an “avoidance of doubt” clause, that is, it appears to be saying that a purpose is not a State or Territory electoral purpose if it is subordinate to a federal electoral purpose.  Secondly, it is then difficult to see what use the word “only” would have in both of its iterations in subsections (a) and (b) – the

word “only” becomes otiose in that interpretation.  Third, there is the revised explanatory memorandum, which is at volume 14, tab 90, page 5852 of the volume.  Paragraph 230 reads:

However, paragraph (3)(b) acknowledges that section 302CA does not prevent the States or Territories from regulating gifts that are kept or identified separately to be used exclusively for a State or Territory electoral purpose.  States and Territories, or gift recipients, could ensure that subsection 302CA(1) does not apply to a gift by –

et cetera.  It does appear, at least, to have been the intention, on the basis of the extrinsic materials, that this “only” was “exclusively”.  Now, the Commonwealth also submitted that section 302CA sets a demarcation between State and federal elections and it criticised South Australia’s submissions for demarcating on topics.

The language that is deployed in 302CA is that of electoral purpose, and of course, “State electoral purpose” is defined as, “relating to a State election,” that is 287.  So if a person gives a gift that is, in the final analysis, to be used for a dual purpose of influencing voters at both federal and State elections, it is difficult to see how the exemption would apply.  That dual purpose might arise because of a common topic, for example, infrastructure, energy.  That is the mischief.  May it please the Court.

KIEFEL CJ:   Thank you, Mr Solicitor.  Solicitor‑General for Victoria.

MS WALKER:   If the Court pleases.  The Court should have the outline of oral argument indicating, as your Honours will see, that we propose to address really, in a sense, one topic but relate that topic to two different questions in the special case.  So the topic that I propose to address is the question as to whether the regulation of political donations by the Commonwealth falls within the incidental power and the consequences, if that be right.

In relation to implied freedom, plainly, the Court need not hear from us.  In relation to the Melbourne Corporation argument, can I indicate that we rely on our submissions at paragraphs 73 to 84, but can I simply note that, like South Australia, Victoria contends that the Commonwealth has adopted an unduly narrow characterisation of Victoria’s submissions. 

Victoria’s submissions around Melbourne Corporation are directed to the proposition that the laws in issue in Queensland are directed to the integrity of the institutions of government in terms of avoiding risks of corruption and clientelism, and not simply at the electoral process.  Other than that, your Honours, I do not propose to say more about Melbourne Corporation and I also do not propose to address the Court on Metwally.

Can I start then, your Honours, with the first proposition on our oral outline, which is that the Commonwealth legislative power to regulate political donations stems from the implied and possibly express incidental powers. Now, the Commonwealth’s legislative power in relation to federal elections arises textually in the terms of the Constitution from a variety of provisions.

Of course, your Honours have been taken through these and I do not want to dwell on them for too long. We do note that certain sections, in particular, sections 9 and 27 confer power directly on the Commonwealth Parliament but most of the other sections in Chapter I dealing with powers in relation to elections – and I will not list them; your Honours are familiar with them – confer power on the Parliament via the mechanism of section 51(xxxvi). They are matters for which the Constitution makes provision until the Parliament otherwise provides.

Now, we say in relation to the nature of the provisions in Chapter I is that they are directed in terms to what we have used as a shorthand, directed to machinery of elections, so who may stand for elections/election, who may vote, the system of voting, the conduct of elections, the resolution of disputes about elections.

But we do of course accept that the express powers conferred on the Commonwealth Parliament, including section 51(xxxvi), carry with them an implied power to make laws incidental to the subject matter of the power. In addition, of course the express powers attract the operation of section 51(xxxix) of the Constitution, the powers to make laws incidental to the execution of the other powers vested in the Commonwealth Parliament.

Can I, perhaps, point out something that I need not point out but just for completeness, that it is commonly the case that it is not necessary for a court to distinguish between the implied incidental power and the express incidental power.  That was recognised by Chief Justice Dixon in Burton v Honan (1952) 86 CLR 169. I do not need to take the Court to it, but I specifically refer to the passage from the Chief Justice’s judgment at pages 177 to 178.

Briefly, what his Honour said there was that in that particular context being forfeiture, the distinction is, for present purposes, and the distinction he is referring to is between the implied and the express incidental power, that distinction is, for present purposes, immaterial because it produces the same result, namely that the Parliament may in the exercise of any of the substantive powers given by section 51, make all laws which are directed to the end of those powers and which are reasonably incidental to their complete fulfilment. 

Now, not only is it often not necessary to distinguish between the implied and express incidental powers, it is often not necessary for a court, this Court or any other court, to identify whether a particular law is supported by the core of the power or the incidental aspect because if the question is whether a law is within a head of power, it will be sufficient that it falls within the incidental scope of the power, and it is not in many cases, necessary for the court to delve into the question of whether a particular law falls within the core of the power or the incidental aspect of it.

Now, can I make some response to the submissions of the learned Solicitor‑General for the Commonwealth.  The learned Solicitor‑General, as I understood his submissions, seemed to suggest that so long as something has more than a tenuous or remote connection with federal elections, it falls within the core of the power.  In my submission, that is a misunderstanding of the way the incidental power operates, because if something has no more than a tenuous or remote connection with federal elections, it will be neither within the core of the power nor the incidental scope of the power. 

In order to fall within the incidental scope of the power, the law must have more than a tenuous or remote connection with federal elections.  So we contend that the way one ought to understand the incidental power, at least in the context of federal elections, is to ask whether a law operates on the subject matter of the power, namely elections for present purposes, or whether it is incidental to the subject matter and thereby valid because it has a sufficient connection with power.

In that regard, we do not disagree with the Commonwealth that the test is whether there is a sufficient connection with power, but we say that that connection may be supplied through an analysis of the incidental or penumbral aspect of the power just as much as it can be supplied by a law that operates directly on the subject matter. 

Nor is it right to say that a matter that is valid because it is incidental to a particular head of power is somehow less important or that the incidental penumbra of a power is, in some way, less important that those things that fall within the core of the power.  Rather, the analysis is a conceptual one, as I have indicated, focusing on whether the law regulates the subject matter or whether the law regulates something incidental to the subject matter.  But those incidental things might, nonetheless, be significant and important for the regulation of the subject matter. 

The contention for Victoria is that the regulation of political donations is within Commonwealth power because it is incidental to the powers conferred by sections 51(xxxvi), 10 and 31 of the Constitution. We say that it is incidental because we say that the regulation of the giving of

money from person A to person B, neither of whom is an institution of the Commonwealth, neither of whom is conducting an election, neither of whom necessarily even need be a candidate for an election is not a law that directly operates in terms of the rights, liabilities and duties it creates on elections. 

But, we say, it might well fall within the incidental power for the Commonwealth to regulate that kind of behaviour because it is incidental to the regulation of elections to regulate political donations, in large measure for some of the reasons that have been explored in this Court in the authorities to which your Honours have been taken – cases such as McCloy, Australian Capital Television and so forth.

So, we do not say that a Commonwealth law regulating political donations for use in the federal electoral process is not a law with respect to federal elections.  We say it may very well be a law with respect to federal elections because it is incidental to the regulation of such elections.  We further say that a number of cases support this understanding of the division between the core power and the incidental power.  I do note the time, your Honours.  I do propose to take the Court to some authorities if ‑ ‑ ‑

KIEFEL CJ:   That is a convenient time, thank you, Ms Solicitor.  The Court will adjourn until 9.45 am tomorrow.

AT 4.15 PM THE COURT ADJOURNED
UNTIL FRIDAY, 15 MARCH 2019