Spence v State of Queensland
[2019] HCATrans 45
[2019] HCATrans 045
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 WEDNESDAY, 13 MARCH 2019, AT 10.05 AM
(Continued from 12/3/19)
Copyright in the High Court of Australia
MR KIRK: Your Honours, before I proceed to the next topic, which relates to the Melbourne Corporation argument put by the States vis-à-vis section 302CA, can I just make three brief points tidying up from yesterday. First, right at the commencement of my submissions at line 94 I gave an incorrect date. I said that the Queensland amending Act commenced on 2 October 2008. It should of course have been 2018. I apologise for the error.
Secondly, briefly, in relation to some of the questions asked of me yesterday relating to section 109 and the absence of positive Commonwealth provision in relation to property developers I should have referred of course to a leading decision of this Court in relation to that sort of issue, namely Wenn v Attorney‑General (Victoria) (1948) 77 CLR 84, where that issue is dealt with, including what Justice Dixon called where an area of liberty has been designedly left. See page 120.
Thirdly, in relation to the last topic I dealt with yesterday, namely what we put as the Commonwealth’s immunity analogous to or based on Melbourne Corporation, your Honours would be aware that in ACTV (1992) 177 CLR 106 Justices Brennan, McHugh and also Dawson needed to address in the way the case fell out a Melbourne Corporation‑type challenge to section 95D(3) and (4) of the scheme there under attack. Those provisions regulated, so it was Commonwealth regulation of political advertising during State election periods and local government election periods. Justices Brennan and McHugh would have held those two subsections invalid; Justice Dawson would have held them valid on that basis.
The point I wanted to make is that analogously here, where in ACTV the Commonwealth had no relevant legitimate interest in regulating advertising during State and local government election campaigns, so too here the States, specifically Queensland, have no legitimate interest in regulating donations directed to federal electoral actors, in the sense I was using that phrase yesterday, or purposes, in particular where the donations are specifically directed to be used at the federal sphere. To do so intrudes on the area of sole legitimate concern of the Commonwealth.
As I put yesterday, but just to conclude that point, if we succeed in relation to that Commonwealth immunity, then we do not need to reach 109 inconsistency or 302CA. That being said, can I now turn to deal with the Melbourne Corporation argument put by the States, directed to 302CA. The difference between the Commonwealth law and the State, the Queensland law, for the purposes of these immunities is that, as I have put, the Queensland law seeks to cover the whole field, where the Commonwealth law does not if the gift is designated by the giver for State or Territory electoral purposes, if the State law operates by providing for keeping a donation separately for State electoral purposes, or if the recipient keeps or identifies it as held for State or Territory electoral purposes.
Can I give your Honours just a quick illustration of how the second of those categories work, namely where the State law operates by providing for keeping it separate. I referred yesterday to the South Australian provision; it is the Electoral Act 1985 (SA). It is in volume 1 of the joint bundle at tab 6 - relevantly, Part 13A, Division 3, section 130k. The heading of Division 3 is “State campaign accounts”.
Your Honours will see in 130K(1) that, in essence, relevant actors “must keep a separate account” with an authorised deposit‑taking institution for State electoral purposes. Pursuant to 130L, they must ensure, acting through their agent, that “each gift that is an amount of money received by” them:
is paid into the State campaign account –
unless to do so would be in contravention of the part, or (b):
the gift is not intended by the registered political party to be used for State electoral purposes -
So there the State of South Australia is quite properly and necessarily acknowledging political actors here tend to cover both levels and so we need to allow for operation of federal actors; or (c) “otherwise”.
That then links up, over the page, to 130N. The correlative of all that is that money out for the purpose of political expenditure must come from the State campaign account and in that way South Australia provides for its own stream of donations to be received for State electoral purposes and allows room for Commonwealth law to operate. It is that sort of provision which is picked up or given room to operate by 302CA(3)(b)(i) of the federal law.
In terms of the Melbourne Corporation challenge put by Queensland and its supporting States the argument is said to be that it is that 302CA regulates functions central to the existence of the States. The key dispute here, in a sense, relates to that middle territory – what I called yesterday the unallocated middle, although, as I will seek to show in a minute, the consequence of the States’ arguments – it comes out most clearly in Victoria’s submissions – is that in fact they seek to impose their policy across the whole spectrum.
KIEFEL CJ: But what you call the “unallocated middle” – that description implies some kind of neutrality on the part of the donor where moneys are exempt or are permitted under the Commonwealth Act to be made for any purpose. Bribery could be one of those purposes. So to call it an “unallocated middle” is perhaps not to see the point of Queensland’s concern.
MR KIRK: Well, to put it in terms of bribery would itself breach, I have no doubt ‑ I do not have the provisions to hand – other provisions of the federal law, if not indeed of the common law. There were, I think, common law offences related to this.
KEANE J: But you say there cannot be effective State laws.
MR KIRK: Let me put it this way. In relation to what I have called the unallocated middle there cannot be two sets of laws applying simultaneously or at least, if there are, that is in effect to allow the States to give predominance to their concerns over those of the Commonwealth. The Commonwealth, as I sought to put yesterday, has made its own judgments as to the threat to integrity from gifts, including in what I have called the unallocated middle, and it has made its policy judgment that it does not consider there is a threat to the integrity of the federal electoral process from such donations in relation to bribery and so forth and I am sure there are other provisions dealing with it.
KIEFEL CJ: Well, not from this particular source, anyway. It has identified other sources as its concern.
MR KIRK: That is true, of course, your Honour. It has made that judgment. The State has made a contrary judgment for its own purposes, for local government and State government purposes, but it seeks to regulate the unallocated middle. So if there is a donation to, say, the ALP by a property developer, if 302CA is invalid for some reason, including Melbourne Corporation, the effect is that the State law wins. The State policy judgment that these types of donations are too great a risk predominates over that of the Commonwealth and that raises the question ‑ ‑ ‑
KEANE J: Not insofar as the Commonwealth says that donations made for the purpose of funding federal campaigns are not touched by the Queensland law and 302CA does that. But it does more because it says “may be used, either required or may be”. So that insofar as the federal – insofar as this question about the ability of the Commonwealth to ensure that its law prevails in respect of elections to the Commonwealth Parliament, that purpose could be achieved fully effectually without having the provision “or may be used” that is in 302CA.
MR KIRK: I would submit in response that exactly the same could be said about the States. So, the States undoubtedly, as I have conceded, have a legitimate interest in regulating donations directed to the use for State electoral purposes.
KEANE J: Not just State electoral purposes – just the defraying of the ordinary overhead expenses of political parties operating within the State because defraying – moneys used to defray the ordinary overhead expenses means that other financial resources are freed up for other purposes.
MR KIRK: I accept all that. I accept all that entirely and thus I conceded yesterday that the States had a legitimate interest in regulating what I called the unallocated middle. But so does the Commonwealth because what your Honour just put to me, exactly the same could be said about the federal ALP or the federal LNP. But when it has a donation, not specifically directed to be spent on the forthcoming federal election campaign, but company X says “We support your principles; here is $10,000. If you want to use it to pay your human resources manager, fair enough”, the Commonwealth has a legitimate interest in regulating that, just as the State does.
So then the question becomes, in this area where both parties, both levels have a legitimate interest who, if anyone, is entitled to predominance where you cannot have both because if you do have both if, for example, in the unallocated area it is some special constitutional area where 109 does not apply but both laws can operate, that means in practice the State policy wins because in Queensland company X cannot give $10,000 to the federal ALP if it is a property developer, even to pay the human resources director of the federal ALP.
KIEFEL CJ: Mr Kirk, you say the Commonwealth has an interest in regulating, and you seem to have allied the Commonwealth interests with the State’s interest so they both have an interest - does the Commonwealth really have an interest because the policy decision you say that has been made is that it does not perceive a risk. It does not have the same concern that the States have. Indeed, it does not have a concern with respect to property developers. This tends to point up the different purposes of the provisions, does it not? New South Wales and Queensland legislation is directed to a protective purpose, protective of their electoral systems. The Commonwealth’s is directed to freeing up the flow of funds.
MR KIRK: The consequence of allowing, by whatever constitutional means, the State policy to predominate, is to override that federal policy. This is, to use Justice Dixon’s words, an area of liberty designedly left by the Commonwealth. The Commonwealth has made a policy judgment. There is no doubt that the Commonwealth could regulate to prevent ‑ ‑ ‑
KIEFEL CJ: But what I am really trying to say to you is it has made a policy judgment. Any political decision is a policy judgment. But it does not have - unlike the States it does not share a concern. It is not protecting its electoral system. It is simply saying that it does not want the States to be there. That is what it is directing itself – its legislation to.
MR KIRK: We respectfully disagree with that characterisation. The Commonwealth has decided to protect its electoral system, to a limited extent, and beyond that it has decided there is no threat sufficient to warrant regulation and it has decided that in that further area the law should be this far and no further. That is the point of 302CA. It is a classic win and an Attorney‑General of Victoria type of provision.
KIEFEL CJ: How do you describe the connection between freeing up – or this area of immunity that it creates and the protection of the electoral system? What is the connection?
MR KIRK: The connection is that, for example, in relation to foreign donations, for reasons which might readily be understood ‑ ‑ ‑
KIEFEL CJ: Accept the foreign donations as a separate category.
MR KIRK: So foreign donations and to an extent also anonymous donations because of the disclosure requirements and so forth.
KIEFEL CJ: Yes.
MR KIRK: So those are the two categories it regulates. Beyond that ‑ ‑ ‑
KIEFEL CJ: But donations from anywhere else - freeing them up is protective of the electoral process because?
MR KIRK: Well, the Commonwealth has made the choice such protection is not warranted. It is balancing up competing objectives.
KIEFEL CJ: So you do not contend for a protective purpose?
MR KIRK: No, I am saying – what we are submitting is that they have made their protective judgment and it is that far. So in making the policy choices, as your Honour quite rightly says, with respect, policy judgments are imbued in all these decisions, it has to weigh up the dangers to the system for which protection is needed.
KIEFEL CJ: You say there is no danger to the system so that there is no reason why there should not be a flow of money to political parties.
MR KIRK: Precisely so. The Commonwealth must weigh up, and implicitly has weighed up, the dangers from the full panoply of potential donors, with the benefits of donations because by allowing donations to political parties you are facilitating, amongst other things, political communication and discussion in all the advertisements we are about to see on the television. It has made that policy choice. The fact that it does not perceive the same degree of danger from property developers vis-à-vis the federal level, as the States do, does not alter the fact that it has necessarily made a judgment about that and the protective judgment it has made is thus far and no farther.
NETTLE J: Mr Kirk, is not really the judgment of the Commonwealth that rather than deal with corruption by total prohibition it does so by a scheme of returns and reports set out in Part XX.
MR KIRK: Yes, I should have added that. That is consistent with what your Honour Justice Gordon said to me yesterday.
NETTLE J: That is the judgment, is it not?
MR KIRK: Correct.
NETTLE J: Instead of prohibiting, it will be controlled.
MR KIRK: Correct, with respect.
GAGELER J: Mr Kirk, while we are talking about the scheme and Part XX, you took us yesterday to section 302D which is one of the two main prohibitions.
MR KIRK: At page 173.
GAGELER J: Am I right in understanding that a foreign donation to a political party is prohibited by that provision, even if it is earmarked for use only in a State election?
MR KIRK: Your Honour, the honest answer is I have not thought about that, because it is not part of the many issues in this case. As to what the answer is, I am not sure. Your Honour may be right, but it is a complex and long provision, so I would prefer not to give an answer straight away, if I may. But as I say, it is not one of the many issues in this case with which we have to deal.
GAGELER J: If I am right in my reading of it, and I may be wrong, but if I am right in my reading of it, it suggests a policy concern that the vice lies in the receipt of the gift that gives rise to the response of reciprocity, rather than in how the funds given might ultimately be used.
MR KIRK: It might do, it might do. I do not think I can say anything more useful about it, your Honour. I am just aware of the time. Can I make a few more brief points in relation to Melbourne Corporation, and then I will deal with the Metwally argument fairly briefly, before handing to my learned friend, Mr Hastie.
Part of the Melbourne Corporation complaint of Queensland and some of the States is that it is suggested that insofar as 302CA talks about State provision for separate accounts of the kind South Australia has, that is constraining legislative freedom of States because it is giving them an out, but an out that they must positively choose. We would make two points about that.
First, that is only one of the three scenarios. Secondly, in this area where, as I have put a number of times, both levels have legitimate interests, this is an unusual sort of area and although members of this Court in Austin did speak about the fact that there might be a constraint on legislative freedom as being relevant to the Melbourne Corporation analysis - true, it is a factor - but where you have legitimate overlapping interests it is inevitable there is going to be some degree of bumping up against each other, if both seek to regulate.
The Melbourne Corporation principle must take account of the context and the practical reality, and so some room must be allowed here – that is the first point. The second point is so much is implicit in Queensland’s submissions because Queensland speaks with two tongues on this issue. Without going to it, at paragraph 112 of their primary submissions, they make the point I just put, namely, by reference to Austin, this is to impair the liberty of action of the State. But then in their reply, at paragraph 20, in answer to attacks that we made on its legislation by reference to Melbourne Corporation, it said:
It –
that is, the Commonwealth:
could have established a system of federal campaign accounts, or required that parties which promote candidates in federal elections have no other objects or activities. Either would have immunised donations for federal purposes from State prohibitions, without the vice which engages Melbourne Corporation here.
It has it both ways. That recognises that one has to be practical here. The great difference between the two legislative schemes is that the Commonwealth has allowed room for movement for the States; the State has allowed no room for movement and made no recognition of the legitimate interests of the Commonwealth.
KIEFEL CJ: But from Queensland’s perspective, do you deny that these provisions are necessary to protect its electoral processes from corruption and the perception of corruption?
MR KIRK: Yes, because in particular insofar as they regulate donations directed to federal electoral purposes that is not its concern. That leads me to an argument actually raised on that point by Victoria. This is the last thing I will say about Melbourne Corporation – voluntarily anyway. What Victoria says at paragraphs 77 to 83 of its submissions ‑ and see also South Australia at 44, Western Australia 49 to 50 – is that it submits that property developers could give to parties specifying it is to be used for Commonwealth electoral purposes but still in effect expect payments from the party, potentially at State level.
That argument would lead to the conclusion that the State policy, the State interest, can lead to full regulation of the spectrum, even for donations specifically directed to the federal level, which is to reverse the proper constitutional position. It is to allow predominance of the State’s interests over that of the Commonwealth. Once again that is reminiscent of what was put in Fortescue; it is contrary to the constitutional structure. The Commonwealth is entitled certainly to regulate donations to its level, and we would say it is entitled to predominance in the unallocated middle because of 109 and its constitutional position.
My final topic with which I will be fairly brief is in relation to Metwally. I touched on this a bit yesterday. Your Honours appreciate that the State’s attack here is focused just on, as we understand it, 302CA(3)(b)(ii), the provision we were discussing construction of yesterday about keeping or identifying the gift separately in order to use only for a State or electoral purpose.
Can I take your Honours briefly to Metwally (1984) 158 CLR 447 which is at joint bundle 13 and I want to make a couple of points about it. It is at tab 73 of joint bundle 13. The provision is at page 453 in the Chief Justice’s judgment. Your Honours will recall the context was a previous High Court decision - Viskauskas v Niland – where a 109 problem had been recognised between discrimination legislation. The Commonwealth enacted, at the top of 453:
This Act is not intended, and shall be deemed never to have been intended, to exclude or limit the operation of a law of a State or Territory that furthers the objects of the Convention and is capable of operating concurrently with this Act.
So, it was a law different in kind, we would submit, from 302CA, or, at the very least, different in degree in that it was a retrospective deeming law to say what we previously said as a Parliament we should not be taken to have said because the Court had previously construed the Parliament as having said they relevantly covered the field. That is not this type of law where it is not a retrospective fix up. At most, it has some retroactive operation, at least on the broader construction that we were discussing yesterday. But it is retroactive operation known in advance.
Now, your Honour Justice Keane asked me some questions yesterday about how it might apply. I am not going to go back over the construction issue again. But I would make this practical point – recognising it is just a practical point – namely, if a party – so you have an unallocated donation and a party decides ultimately to allocate it to a State purpose and it is traceable to a property developer.
Your Honour put to me yesterday, and with some force, with respect, that that may, on the broader construction, mean that even the donor is retrospectively put in breach of the law because the donor is not permitted to have made the donation. True, on the broader construction. But the party would do that knowing the consequence. It would do it knowing that if we allocate this donation off to the State purpose we will put ourselves, and, by the way, the donor, into breach. I just wanted to make that construction point.
There is another point – and I will seek to be brief about this – about Metwally. The Commonwealth is going to develop this further, and I will not pre‑empt what they are going to say, but close attention is needed to the questions asked in the case and the answers given. There is a real question as to whether the Court, the majority, held that the Commonwealth law was invalid as opposed to inoperative. I will let the Commonwealth develop that submission.
If it was suggesting the law was invalid, one possible reason for that may have been that given in all the majority judgments but it is sufficient to go to Justice Brennan’s at page 475 – just before the end of his Honour’s judgment at about point 2. Justice Brennan said:
Though a law of the Commonwealth can be give a retrospective operation, it cannot retrospectively endow a State law with the force and effect of which s. 109 deprived it before the retrospective Commonwealth law was enacted.
Similar points were made by Justice Deane at 478 to 479 and by Chief Justice Gibbs at 457 and Justice Murphy at 5275. One view of the problem, if there is a validity problem, is that the Commonwealth law was, in effect, seeking to reinvigorate State law, qua State law, as though State law. One could well see why that might give rise to a constitutional difficulty not dissimilar to the problem with the provision in the Native Title Act giving effect to common law or at least analogous to it. That is not what 302CA seeks to do. It is just, on the broad construction, rolling back operation of the Commonwealth law leaving room for the State and Territory laws to apply.
The other point we seek to make in relation to the Metwally argument ‑ and I dealt with this in substance yesterday and it is in our written submissions – is that the provision, if there is a problem, could be read down. Your Honour Justice Nettle put to me quite correctly, with respect, that that would be on one reading down contrary to the example and the note.
That being said, one has to also take account of 15A of the Acts Interpretation Act that, if there is a constitutional problem leading to invalidity, then the very work that section does, as your Honour knows, is to say we would have construed it that way, but so to construe it leads to a problem; we thus construe it this way, aided by the direction of Parliament through section 15A.
Alternatively, it could be severed. In relation to severance, (3)(b)(ii) could readily be struck out. Queensland suggests at paragraph 93 that the Parliament should be taken to have intended the whole of 302CA to stand or fall together and that to sever it would give the permission a radically different character.
To sever one of a number of permutations is a classical sort of severance operation. It does not change the operation of the law and to suggest that Parliament would have intended the whole of 302CA to depend on that provision, where incidentally that type of policy is not even found in subsection (5), as I pointed out yesterday, relating to use is not, with respect, a plausible construction of the Act.
Finally, the Commonwealth makes submissions in its written response submissions at paragraphs 25 to 28 that if necessary and in the further alternative Metwally should be overruled and we respectfully adopt those submissions. Unless I can assist your Honours further, other than on
the implied freedom, those are the submissions for the plaintiff and I now hand over to my learned friend, Mr Hastie.
KIEFEL CJ: Yes, Mr Hastie.
MR HASTIE: Thank you, your Honour. Before I deal with the facts, which are important, in our respectful submission, in this case, can I just deal with two matters of principle? The first one is to do with the basis for the freedom – I will only deal with it briefly. But it is important to emphasise that the basis of the freedom is based on the Constitution, sections 7 and 24 in particular, where there is a guarantee that the Parliaments of Australia would be elected by the people and there is a conception referred to in Lange 189 CLR 520, in particular at 557 by the full members of the Court - the authorities book is volume 7, and it is tab 41 - in the opening paragraph at page 557 their Honours refer to:
Sections 7 and 24 of the Constitution, read in context, require members of the Senate and the House of Representatives to be directly chosen at periodic elections –
and their Honours refer to:
the free election of representatives -
Later on, their Honours then come to the conclusion that because of that system of free elections, electing the representatives in a Legislative Assembly occupying a powerful position in the Constitution, at page 560 of the report, that those sections:
necessarily protect that freedom of communication between the people concerning political or government matters which enables the people to exercise a free and informed choice as electors.
The underlying principle is taken a step further in the same volume, your Honour, in McCloy 257 CLR 178, which is behind tab 44, and in particular I wanted to take your Honours to the remarks of his Honour Justice Gageler at 226. After discussing at the commencement of 222 and explaining why the freedom exists, his Honour refers to, at paragraph 111 – that the concept of electoral choice acted on the constraint and the exercise of not only Commonwealth legislative power, but also executive power and the latter was indirect because it is a product of the Parliament. But it is the constraint - elections were a constraint on the way in which both powers were able to be exercised.
That leads then into the next important principle, which is how you conduct elections. We mentioned that they were free, and that was a matter dealt with by His Honour Justice Keane in the Unions NSW (No 1) 252 CLR 530, which is in volume 13 of the book of authorities, tab 70. The passage I wanted to take the Court to was at page 574 where his Honour was particularly referring to section 96D in the discussion in that case. But his Honour, at the end of paragraph 120, refers to the facts agreed establishing:
the importance of funding from corporations and industrial associations to campaigning.
Towards the end of the next paragraph, his Honour refers to campaigning being:
an essential part of political communication.
The matter that is very significant is the last sentence:
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.
It is our respectful submission then that that is the crux of this case. Given that there is undoubtedly a burden on the campaigning – and I will come to dealing with that in a moment – can I just deal with then how the Court is to deal with it and that is it requires the defendant to justify. There are a number of decisions to that effect, but a convenient place to commence is in Unions (No 2) to show what it is that the defendants must do to do it. If your Honours could go then, please, to that case which is a recent decision, 93 ALJR 166 - it is in volume 13 of the book of authorities, tab 70. In this case the plurality, at paragraph [45], refers to the law that:
Parliament does not generally need to provide evidence to prove the basis for legislation which it enacts. However, its position in respect of legislation which burdens the implied freedom is otherwise. Lange requires that any effective burden be justified.
In terms of justification and how that is to be achieved there are a number of judges in that case that dealt with how that might be dealt with. I have already mentioned that the plurality discuss the need for evidence, in effect, to justify it and there is a further discussion by his Honour Justice Gageler in the same case, at page 186, and in particular starting with paragraph [93] and then in particular [94] where his Honour refers to it being a question of law but it:
“sometimes depend on facts, facts which somehow must be ascertained by the court responsible for deciding the validity of the law”.
Over the next page, paragraph [95]:
If a court cannot be satisfied of a fact the existence of which is necessary in law to provide a constitutional basis for impugned legislation, however, the court has no option but to pronounce the legislation invalid.
This is just to emphasise the importance of the facts. His Honour Justice Nettle in the same case on page 191 at paragraph [116] refers to Harper v Canada about demonstration of facts and then his Honour, in paragraph [117], says:
There is more force in those submissions . . . Lange requires that any effective burden on the implied freedom be justified.
As his Honour said some of it might be self‑evident but others might need to be dependent on expert reports or commissions of inquiry:
the fact that a plaintiff is unable to identify any obvious and compelling alternative productive of a significantly lesser burden on the implied freedom may be enough to conclude that the impugned law is needed.
But then his Honour refers to the expert panel’s report in that case and the fact that it just did not go anywhere. That was a fact in that case. It is our respectful submission in this case that, whilst the Court is obviously not bound by what a commission of inquiry might have thought or recommended, it forms part of the factual basis for which the defendant in this case relies upon for its justification of the law, just as the defendant did in the Unions NSW case. It is our respectful submission in this case that if one looks at the facts then one cannot find in Queensland a justification for the law.
There is just one other matter that it is necessary to refer to, and that is this question of acting prophylactically. Her Honour Justice Gordon in the same case referred to Australian Capital Television. That is at page 196 at [146]. Can I just take the Court briefly to that case and the often‑quoted statement of his Honour the Chief Justice. That is ACTV v The Commonwealth (1992) 117 CLR 106. It is behind tab 20 in volume 3 of the book of authorities. In the middle of the page there is the oft‑quoted statement by his Honour:
the Court should scrutinize very carefully any claim that freedom of communication must be restricted in order to protect the integrity of the political process. Experience has demonstrated on so many occasions in the past that, although freedom of communication may have some detrimental consequences for society, the manifest benefits it brings to an open society generally outweigh the detriments. All too often attempts to restrict the freedom in the name of some imagined necessity have tended to stifle public discussion and criticism of government. The Court should be astute not to accept at face value claims by the legislature and the Executive that freedom of communication will, unless curtailed, bring about corruption and distortion of the political process.
That is what is being claimed here, that unless there is a curtailment of the freedom in this respect there will be a corruption at State level. In our respectful submission, there is a factual basis for concern about the corruption at a local level. That is demonstrated partly in Queensland but mostly in New South Wales, but there is, as I will come to and show, nothing the same in the case of Queensland.
KIEFEL CJ: Are you going to differentiate Queensland from New South Wales?
MR HASTIE: I am, and the facts in this case. Can I just briefly deal with the facts in this case quickly again. The defendants refer to the decision of the Court in Brown ‑ that is, the plurality – where they had in turn referred to McCloy. The decision in Brown v Tasmania 261 CLR 328 is in volume 5 of the book of authorities, behind tab 24. At paragraph 94 your Honours Kiefel, Bell and Keane refer to the:
discriminatory burden but impose only a slight, or a less than substantial –
and McCloy being an example of such a law. The facts are referred to in the middle of that paragraph:
The provisions were not considered to effect a substantial burden on the freedom because their effect was indirect, given that their direct effect was to enhance freedom of political speech generally by levelling the playing field, and there were many other available methods of communicating –
I will just deal with that quickly. There is no suggestion in this case about levelling the playing field. Your Honours will recall that part of the matters – or one of the matters in dispute in McCloy was to do with the caps on the level of donations that anyone was entitled to make and that was held to be, along with the rest of it, valid.
There is no suggestion here of levelling the playing field, but to the extent there is the facts are to the contrary. Can I just mention briefly the agreed facts in the special case. It is on page 119 of the special case. There are two facts which are mentioned. The first one is in paragraph 26 which follows the statements his Honour Justice Keane made in Unions (No 1) about:
public funding does not meet the electoral expenditure incurred . . . political parties generally spend monies substantially in excess of those receivable from public funding.
But, the second one is in paragraph 27, that prior to that enactment that we are talking about:
the Liberal National Party received a materially greater amount of donations than the Labor Party (Queensland) from entities which are involved in the development of property and which may meet the definition of a “property developer” –
There is quite a distinction between the facts in this case and the facts in McCloy. Your Honours will recall McCloy was concerned with a developer who wanted to donate. My client is on the receiving end and wants to campaign and is denied a materially greater amount than from a particular source than would be sourced – would go to any other party, or at least from the Labor Party. As I said, we are not concerned with a claim by the State that it is going to level the playing field.
The other matter is this that was mentioned by their Honours, and that is the issue of participating otherwise. It was not dealt with in McCloy in the same way as we want to mention it here. McCloy, as I mentioned, was concerned with a developer who wanted to donate. We are concerned with a person who may be a developer – or, implicitly, namely the defendant admits that Mr Spence was a developer. But, in any event, we are concerned with the recipients of those moneys, that is, people who wish to procure developers to donate. The section of the Act makes it an offence for a property developer to procure a donation from a property developer.
BELL J: If one considers the evident object of a preclusion on donations to political parties by property developers a concern about the risk of corruption, having regard to the significance to property developers of the sorts of decisions that those holding political power are in a position to make, how does it assist your argument that a political party may wish to cultivate donations from property developers? The risk is the same, surely.
MR HASTIE: What the party wishes to do is to have following for campaigns from any source.
BELL J: Yes.
MR HASTIE: Apart from foreign donations essentially, everyone else is entitled to receive money from any donor, and there is a section of the community that my client gets a greater amount of money from the Labor Party. The reason for my introducing the topic was to answer the suggestion that was made and relied upon from the decision in McCloy, that there are other means of property developers being involved in the political process. That is true, but they cannot really be office bearers of a political party.
BELL J: Well, they cannot solicit funds if they happen to be officers of a political party.
MR HASTIE: That is right. It probably takes it – and of course an officer could be a branch chairman or could be the president, anyone who might be placed in a position where they are expected to get money from a property developer. But it is also a bit more complicated than that because there is a provision about gifts by property developers. There is an exclusion in the case of their membership of an amount not exceeding $1,000, but that is all there is. So, in other words, if they were to go to a function which one would have thought might have a profit margin on it for the party, that would amount to a gift.
So it is one thing to say that you could be a member, but you would have to be a silent member. You could hand out how to vote cards, I suppose, or attend the street corner meetings, but you probably could not attend a convention because there is probably a profit margin involved in delegate fees. You would not be able to attend a dinner if there would be a profit margin in that. You might not be able to attend even a branch meeting if there is a profit margin when you would have to pay for a cup of tea; I do not know.
BELL J: Expensive cup of tea.
MR HASTIE: But it shows the minutiae, does it not, because it is “any gift”. You cannot donate and the party cannot receive. It would be one thing to say, well, we will cap it, or to say anyone can spend or gift $2,800 or whatever the New South Wales provision is, or $5,000, whatever amount, but in this case there is none. So it is not quite right to say – well, it is not right at all to say that they can participate in a political party.
We accept that your Honour’s statement in a general way is right and we accept that in the local sphere it is certainly correct, or at least we are certainly not challenging it, but it is another thing to say, well, you can participate in some other way, because the ways are severely limited unless you decide to go off and - you could not be able to start your own ‑ ‑ ‑
GORDON J: You can participate by spending your own money and doing it publicly, as long as it is not gifted.
MR HASTIE: You could.
GORDON J: You can spend your money as much as you like, advertising as much as you like.
MR HASTIE: Yes, and there are well-known examples of particularly wealthy people who do that, but most developers are not in that situation. My client, I think the evidence - the particulars were there is a block of units at Toowong; five units, so not the sort of - I do not know how much you make from that, but not the sort of money that would justify advertisements in a national paper or even in a State paper or on TV.
You could say, well, the property developers could have their own lobby group, but in the end there will be a third-party campaign contributor which sooner or later will be the subject of proper legislation in the State - in Queensland, I should say, but we do not have that in Queensland. We do not have any caps of any sort on expenditure or donations. That is just overkill.
Can I deal with then the question of the justification which was offered by the Minister in his reading speech, and it is instructive, if your Honours could please go to it. It is in volume 14 and it is behind tab 87 and the relevant page is page 190. It is a convenient place to begin with because the justification offered is essentially four. The Minister refers to, at the second paragraph, an inquiry by the CCC – the Crime and Corruption Commission – implicitly saying, well, they have recommended it, they are independent people, so that is a justification that the people of Queensland, and presumably the Court, should recognise. That goes on for so many paragraphs, but can I take you to the paragraph in the middle of the page.
NETTLE J: Which page?
MR HASTIE: Sorry, your Honour, page 5808.
NETTLE J: Thank you.
MR HASTIE: There is a paragraph commencing:
To implement the government’s response to recommendation 20 –
The Minister refers to:
The bill extends the ban to members of state parliament.
Then again the Minister refers to:
the Belcarra report that close connections between councillors and donors can lead to a perception in the community that donors expect to, and do, receive something in return –
and the Minister quotes the CCC.
GORDON J: Is not the next paragraph also important to explain?
MR HASTIE: Yes, that is the second one, because then the Minister says:
Queenslanders expect transparency –
That is a very general sort of thing. Then the Minister says in the middle of it:
The Premier has stated that she will not make rules for local government that she is not prepared to follow herself.
That is perhaps the second justification, the Premier’s leadership, and he calls on those opposite to endorse what he describes as the level of transparency, but it is really the Premier’s view about rules for the State being the same as the rules for the local authority without regard, in our respectful submission, to the facts.
Then the next paragraph is the third justification because of what the Minister described as the State’s significant role in planning, and I will come to that in a moment. The final one in the next paragraph is the reports by the Independent Commission Against Corruption in New South Wales. So, it is those four things that I want to deal with. But I will not need to deal much with what the Premiers thought about applying the rules because that is the antithesis of what is required in this Court, or by this Court, which is to say the facts have to justify the burden at the State level. You do not do it by saying, “Well, we have done it to the local authority. We’ll do it to the State.”
KIEFEL CJ: Do you take issue with the statement about the State’s significant role in Queensland planning framework given, in particular, the powers and the role given to the Planning Minister?
MR HASTIE: Yes, we do, your Honour.
KIEFEL CJ: Even historically in Queensland?
MR HASTIE: Well, the history that is agreed in the special case goes back three or four years.
KIEFEL CJ: I was thinking of a little further.
MR HASTIE: I will take your Honour to Mr Hinze – we can take your Honour to it now. Mr Hinze was a very special case, and it is relied upon by the State because they say, well, there is some reason to be concerned about it. Sorry, just before I do that, can I just emphasise that there is nothing in the Minister’s speech that talks about corruption at State level. There is a perception and risk and things like that, but nothing historically in the Minister’s speech that deals with any government, even historically, being involved in corruption; nothing is offered.
GORDON J: You mean in Queensland?
MR HASTIE: Yes, in Queensland.
GORDON J: Because it does rely upon the New South Wales investigations.
MR HASTIE: It does, and I will come to that in a moment. Well, the reliance on the reports – there are other instances of actual corruption in New South Wales by various ministers, but we are not concerned with those. We are concerned with the extent to which they might relate to planning and planning decisions, and I will come to those decisions that are relied upon as a factual matter shortly. But I will take your Honours firstly to the instances in the State sphere. I suppose the simplest place to deal with that is – firstly, can I just deal with Mr Nuttall, who was a minister of the Crown.
In the agreed special case, the facts on page 145 of volume 1, there is an agreed fact which relates to a plea, I think, by the defendants in their defence, that there was a finding of corruption by Mr Nuttall receiving secret commissions and perjuring. Can I deal with it this way, subparagraph (c) at the top of that page, 145 of the volume, says those charges were quite unrelated to “payments by property developers”. While we are on it, there was another former Minister, Mr Mackenroth, who was accused of something, but at the time he was accused of that he was a lobbyist, and your Honours will see that in subparagraph (d), that that was as a lobbyist, not as a decision‑maker.
NETTLE J: Does history record where Mr Nuttall’s bribes came from?
MR HASTIE: It is not recorded as a fact here. I think there was an appeal, and I will be able to find the authority that dealt with the decision on appeal; which will tell us that matter, your Honour, without any chance of my getting it wrong.
NETTLE J: Thank you.
MR HASTIE: But we have agreed that it is nothing to do with a property development.
KIEFEL CJ: I am sorry, it was nothing to do?
MR HASTIE: With a property development. My recollection, it was to do with mining, but as I said we will find, if we can, the decision.
NETTLE J: Thank you.
MR HASTIE: He was Minister for Industrial Relations, Health and Primary Industries and Fisheries at the time, but I think it was to do with mining. The facts in relation to Mr Hinze are dealt with also in the special case book that is part of the Fitzgerald report, volume 1. If your Honours go to page 208 of volume 1 of the special case book your Honours will see the start of the colourful history of Mr Hinze. There is a table at the bottom of that page which refers to donations of various kinds going from various people to either Mr Hinze or his wife or, over the next page, to his company.
The Fitzgerald report was written in a neutral way. In other words, it just stated the facts: payments in, payments out, whether it was repaid and the like. That goes then on for a number of pages where the inquiry dealt with all these payments having been made to Mr Hinze and the way in which they were used in one way or another, and one of the facts referred to – I cannot remember whether it is in the special case or the defence – was a particular payment by Mr Herscu.
KIEFEL CJ: He was convicted as well, was he not?
MR HASTIE: Yes, he was, your Honour.
KIEFEL CJ: And he was a property developer.
MR HASTIE: Yes, your Honour. Page 216 deals with the payments to him. Your Honours, I think it is right, Mr Hinze died before anything happened, but Mr Herscu was convicted and sentenced to gaol, so your Honours might have a degree of confidence that these payments were corrupt. But that is a while ago. It is not to say that it is – I think my learned friend, Mr Dunning, described it as living memory, which if one goes back to the time the payments were being made and this inquiry, that would be living memory for most people in this room.
KIEFEL CJ: Mr Seymour was a property developer.
MR HASTIE: He was. I think it is all to do with property, your Honour.
KIEFEL CJ: Yes. What is the point you are trying to make or not make?
MR HASTIE: Making a concession. There was a finding of corruption a long time ago in relation to a particular kind of person.
KIEFEL CJ: You say it was a long time ago. It might be within the memory of the Queensland public if we are talking about perceptions.
MR HASTIE: It would be in the memory of a certain section of the Queensland public, not just older people but people to take notice of what happens in life. Whether or not you can extend it any further than that is an open question because it is well known ‑ ‑ ‑
KIEFEL CJ: More recently renewed by matters in New South Wales. In relation to New South Wales, do I take you to say that there are no lessons to be learned by Queensland from more recent events in New South Wales?
MR HASTIE: There are lessons to be learnt in the sense that you could properly ban, for reasons I will take you to in dealing with New South Wales, donations from property developers at local level. But you cannot take that lesson to Queensland for a ban at State level. That is our respectful submission.
KIEFEL CJ: Why do you say that when the Ministers of State have such great powers in relation to property development, including trumping local authorities and ‑ ‑ ‑
MR HASTIE: They can call in, if that is what your Honour is referring to, and they could also change rezoning.
KIEFEL CJ: Yes, they can do a number of things.
MR HASTIE: But it is not only a question of how it is the law – what powers might exist and how the law exists but how, in practical circumstances, the law affects things. Can I take you to the agreed facts in the special case book, in volume 1. I will take your Honours in a little bit more detail, if I get a chance, to them. I do not want to diminish this, but if your Honours go to pages 134 and 135 you will see a table – sorry, I do not want to diminish the extent of the powers that your Honour Chief Justice Kiefel has referred to. But if your Honours go to the table there is a brief summary of the decisions – a number of decisions that are made with respect to planning decisions in Queensland. The first four in that table – and I will take your Honours to them – are to do with local authorities and they add up to something like 96 per cent, 97 per cent.
BELL J: But, surely, the number of decisions is not a particularly helpful criterion when we are looking at the perceived risk of corruption in connection with planning decisions in circumstances in which it is accepted that, amongst other things, at the ministerial level there is a power with respect to rezoning decisions. Is that right?
MR HASTIE: It is.
BELL J: Is that not sufficient?
MR HASTIE: Not in our respectful submission because, in a practical way, these decisions are all made at a local authority level, so you could say that most of them made ‑ ‑ ‑
GORDON J: Yes, most of them are probably to do with home renovations.
MR HASTIE: Yes.
GORDON J: The four per cent in dollar terms is a different question, is it not? I mean, this is bare numbers, this bare mathematical assessment of 96 per cent or 97 per cent is of no assistance in assessing the risk at that level.
MR HASTIE: Well, it is a concession that there is a risk at local authority level to say most of the decisions are taken at that level.
GORDON J: That is not the question, is it? The question is whether or not there is a perception of risk at the State level. We have New South Wales telling us there is. We have Queensland saying “We think there might be; it is prophylactic. Let’s pass a law to protect it.”
MR HASTIE: Well, Queensland is saying because there is some experience in New South Wales we want ‑ ‑ ‑
GORDON J: It is a bit more than that, I think.
MR HASTIE: Well, there is an assertion by the ministers of concern about a perception and a risk.
KIEFEL CJ: Perhaps more to the point, Mr Hastie, is what you say in paragraph 32 of your outline and that is that State governments are usually drawn in in relation to large projects.
MR HASTIE: Yes, and I was going to take ‑ ‑ ‑
KIEFEL CJ: I would have thought that is more against you than for you.
MR HASTIE: It would be one thing to say, all right, if you were going to exercise powers under the State Development and Public Works Organisation Act, which is the main Act that deals with large projects, then that would be a different consideration because they would be larger projects and you could say all right, we are going to ban people who bring applications under that and for approval under that from donating to any political party.
KIEFEL CJ: But logically it is very simple, is it not? There is just much more at stake at State level when you have the State government involved in relation to large projects, as happens they sometimes have to be, because of things like need for rezoning or special ministerial approvals.
MR HASTIE: That might justify that kind of prohibition for those kinds of decision making under that Act, but if we are talking about the normal kinds of decisions that are made at a local government level, in my respectful submission there is no justification.
GORDON J: It is odd, is it not? You have prohibition at the local government level because there is a perceived risk which you do not challenge, an acceptance that there is a risk of large decisions at a State level and then there is, to adopt the language of Mr Kirk, an unallocated middle, where it is okay, there is no risk. One wonders where the two lines join.
MR HASTIE: I am not adopting the unallocated risk to this case. I am conceding that if there is a major project then mostly it is not the sort of thing that would be the subject of an application by a property developer. They would be more likely an application by a mining company or an industry or a manufacturer who are seeking to significantly change the infrastructure in that area and seeks approval to change the waterways and the railways.
EDELMAN J: Mr Hastie, even if one were to assume that the State Parliament in Queensland were perceived to be an entirely corruption‑free zone, both historically and at the time of the legislation, why is it not possible to look to developments in other States, as Queensland says, for prophylactic reasons?
MR HASTIE: The problem with prophylactic reasons is the very reason that I took you to the ACTV Case, because if you say we want to prevent corruption, there could be no end to where you stop.
EDELMAN J: But this is looking to other legislative constitutional facts in other States as the foundation for a prophylactic concern.
MR HASTIE: Well, the facts in New South Wales were essentially to do with local authorities as well, not to do with the State, and all of those decisions in reports were to deal with property developers and councillors at a local level. This Court found that there was enough decision making by ministers at the New South Wales level to determine that it was sufficient justification in McCloy, but there was no analysis done of any practical way in which the planning laws operated.
KIEFEL CJ: That might be a convenient time for a break. The Court will adjourn.
AT 11.16 AM SHORT ADJOURNMENT
UPON RESUMING AT 11.33 AM:
KIEFEL CJ: Yes, Mr Hastie.
MR HASTIE: Thank you. During the intermission, we have been able to locate the reference to Mr Nuttall’s case in the Court of Appeal. It is [2010] QCA 64 and there was a Crown appeal against sentence [2011] QCA 120. I should say a number of the charges related to a mining lease. One related to the appointment of a person he knew to the WorkCover Board, and another charge related to a contract he let as Health Minister to a particular person. But we will be able to provide the Court copies of those judgments.
NETTLE J: Thank you.
MR HASTIE: Can I just go back to the planning part, but not for long. Your Honour Chief Justice Kiefel will no doubt recall the days particularly of Mr Hinze when amendments were made to local plans, and it was all hushed and secret and no one really knew what it was about. The legislation was changed significantly, I think not long after the Fitzgerald inquiry, to require disclosure of ministerial directions, at least in certain respects. If your Honours go to the special case book, two of the directions that the Minister has power to make – could your Honours go to page 125. The top of that paragraph has:
the Minister is entitled to direct local governments as to the contents of their local planning instruments where it is necessary to ensure that they are consistent with State planning instruments –
and your Honours will see the very few number of directions that were made in the last number of years, since in fact February 2009. In subparagraph (b) there is a reference to directions that can be given to assessment managers, but:
The minister is required to report to the Legislative Assembly –
and has only done so on two occasions in any event. Subparagraph (c) refers to directing:
a referral agency to reissue a Referral Response –
in certain circumstances, but that has only happened once. Your Honours, subparagraph (d) refers to the “call in” powers that unfortunately used to be exercised. It would perceptibly be a matter of concern. That has to be reported to the Legislative Assembly. There are more of those that have been called in than the other types of directions, as your Honours will see from the numbers, which is 51 since 1999. But our respectful submission is that is an indication of, in practical terms, how many decisions are actually made at State level and your Honours did not have the benefit of that kind of analysis when considering the case in McCloy.
It was simply, it would seem, said as a matter of law that the Minister had power – and that was the justification provided by the State for saying well, we should extend it to the State government level. They pointed out, in that case – and your Honours did too – that there had been an unhappy coincidence of reports by ICAC, starting with Mr Roden’s report, up to the north coast – on the north coast developments which did concern the State.
But the other reports by ICAC all referred to payments being made – and when I say “payments being made” – bribes – most of them were findings being made of actual bribes, criminal misconduct, not a case of donations to an alderman for the purposes of a campaign but a bribe under the table to get a deal done. It is quite different from a donation to a political party which has to be disguised.
Your Honours, I will not take you through to them because of the time constraints, but there is a summary of these facts in the special case commencing at paragraph 82, from pages 152 to 155. I have to say immediately that not all of the decisions set out easily what actually happened in each of them, particularly the one for the North Coast Land Development which is quite extensive and a number of parties and people were involved and it does not always disclose who is it and the components that we have put in the special case. But it is sufficient to say what was agreed in subparagraph (a) about:
corrupt conduct against local government councillors and State government –
officials. All the others, though, are cases where aldermen – or, in the case of Randwick, the chief town planner – were involved in bribes to get particular developments through. In our respectful submission, that is all quite different from the sorts of matters we are talking about here which is a donation which has to be publicly disclosed.
GORDON J: What is the purpose of going to these, Mr Solicitor?
MR DONAGHUE: The purpose of Leask is (1996) 187 CLR 579 is to identify what we submit is the received approach of the Court in relation to core incidental powers and I am going to take your Honours to one passage in Justice Dawson’s reasons, which emphasises the point – if I could take your Honours to it. The relevant pages are 601 to 603. In the middle of 601, his Honour records what, in my submission, is a conventional approach to characterisation and linkages of Commonwealth laws to heads of power. The question is whether:
the acts, facts, matters or things upon which it operates fall within the description of one or more heads of power.
I should note that while that formulation talks about the acts, facts, matters or things on which the law operates, it is also not uncommon for the Court to formulate that idea as “operates or affects”. So one sees that Justice Gummow used that formulation in Leask at 624. Justice Dixon used it in Stenhouse v Coleman. So one is looking to see how the Act operates on or affects the regulated things.
There is a quote from Justice McHugh in Dingjan which is, we submit, reflective of the settled approach, which finishes with his Honour using the words I have been using – “insubstantial, tenuous or distant” as the connection requirement. But the reason I am taking your Honours to the case really is the bottom half of 602 and the top of 603 where Justice Dawson is talking about the incidental power. In particular, he is addressing a submission that seeks to introduce the concept of proportionality to limit the incidental power. In the middle of that bottom paragraph, he says:
incidental power which is to be implied as an aspect of each of the substantive heads of power in s 51, that is to say, the power to legislate with respect to all those things which are reasonable incidental to the complete fulfilment of the power. In this context it is important to appreciate that, whilst it is correct to speak of implied incidental powers, each head of power is but one grant of power. As Brennan J said in Cunliffe: “the core and incidental aspects of a power are not separated; the power is an entirety.”
Then going over the page:
“Purpose” in that connection is merely an aspect of what the law does in fact and the test remains one of sufficient connection.
So, in our submission, that passage is a convenient encapsulation of the doctrine of the Court in recognising that, while it is familiar to speak and the Court has at various times in its history spoken of core and incidental powers, ultimately one is concerned simply with the question of whether there is a sufficient connection with the identified head of power.
Now, in the passage in the Uniform Tax Case, which your Honour Justice Gageler discussed with Mr Kirk yesterday, the provisions in question concerned the tax power and the issue was about priority of debts in the recovery of tax, whether or not someone could use particular funds to pay a State tax debt before a Commonwealth tax debt.
That law, in my submission, was clearly not a law with respect to the imposition of taxation. It was not within the core of the power because it was dealing with a topic that was related ‑ perhaps said to be necessary to give effect but not surprising in that context that the discussion was of whether or not the incidental power would support a law of that kind. Here, in my submission, that distance does not appear because the core, if I can use that phrase, of the power with respect to elections is not just at the point of the mechanical casting and counting of the votes. The core goes further, as I will support by references to authority in just a moment.
GAGELER J: I am sorry, just so I understand what you are speaking of when you say “the core”, do you mean the actual expenditure of funds? Is that the core or does “the core” encompass the receipt of funds that might be used for that expenditure?
MR DONAGHUE: The core to which I was referring was the core of the power; that is, the power to make laws with respect to elections. In my submission, the topic “law with respect to elections” embraces not just the casting and counting of votes but laws to stop people misleading electors, laws providing for the funding of participants in the electoral process, laws capping expenditure, laws regulating donations – all of those topics.
EDELMAN J: Everything that is incidental.
MR DONAGHUE: In my submission, they are not incidental. That is the submission that I am making. They are part of the electoral process. That is why this Court has defended them in the context of the implied freedom context. The laws that have restricted those matters have burdened political communication because of the integral nature of those matters in the process of electoral choice for which the Constitution provides.
It would, in my submission, be a strange result if the implied freedom derived from provisions in the Constitution about electoral choice prevented laws that burdened matters such as donations or expenditure if those matters do not have more than an insubstantial or tenuous connection with elections. One is related to the other and the connection between donation and expenditure and political communication emerges very clearly through the Unions Cases and McCloy, in particular.
But the other case that we have handed to your Honours is a case that in some respects is quite similar to the case that your Honours now confront, albeit that it does not concern elections. It is Bayside City Council v Telstra Corporation (2004) 216 CLR 595. This case concerned the challenge to the validity of a provision that your Honours will see recorded in the middle of page 619 at paragraph 13, which was clause 44 of Division 8 of Part 1 of the Telecommunications Act which provided that:
a law of a State or Territory has no effect to the extent to which the law discriminates, or would have the effect . . . of discriminating, against a particular carrier –
The question in the case concerned the application of that clause – that provision excluding the operation of State law to a local council rates regime which levied rates on land that was occupied by telecommunications cable but that did not levy rates on land used for electricity or gas networks. So, it was treating telecommunications cable differently from electricity or gas networks.
The section that I have just shown you in paragraph 13 was challenged on both head of power and on Melbourne Corporation grounds which is why I say that there is some evident similarity both in the exclusionary operation of the Commonwealth law and in the grounds upon which the provision was challenged and both of those challenges failed. The challenges are relevantly dealt with at paragraph 26 and following in the joint reasons of Chief Justice Gleeson and Justices Gummow, Kirby, Hayne and Heydon. As to the head of power point, dealing here with the telecommunications power, it was said that:
The power conferred by s 51(v) –
extended, looking about six lines down in that paragraph to conferring upon communications services, the:
powers and immunities in connection with the activities undertaken by them pursuant to the chosen regulatory framework.
So, the conferral powers and immunities was connected to the head:
The federal object of promoting the development of the telecommunications industry, and ensuring that telecommunications services would be provided to meet the needs of the Australian community, falls within a head of the legislative power . . . Conferring upon carriers an immunity from discriminatory burdens imposed upon them by State or Territory laws in their capacity as carriers has a direct and substantial connection with the power.
So, the exclusion of State laws of a particular and identified kind from operating upon the subject of the power was thought by five members of the Court in Bayside to be directly and substantially connected to the power and we say the same is equally true of 302CA. It then said in 27:
It is not to the point that cl 44 is also a law with respect to discrimination. A law may bear more than one character –
and that is developed by reference to the capacity for a law about corporations with respect to corporations to protect the object of the power, say trading corporations as in Actors Equity, so even though such a law did not operate upon the trading corporation, there could still be laws protecting them. Then, there is at 28, familiar references again to characterisation principles upon which we rely but the point I really seek to get from the case in terms of connection is the conclusion the Court reached in the end of paragraph 26.
Then, and really just because it is convenient having taken your Honours to Bayside, if I could briefly note what the Court did in relation to the Melbourne Corporation argument because, again, as you can see from 29, the argument was quite similar to the argument your Honours are confronted with. It was said that the clause excluding the State laws:
is an attempt to dictate the content of the State law -
So, the vice was States would have to legislate in a particular way to get around the operation of section 44. That was said to offend Melbourne Corporation and the Court gave very short shrift to that argument:
Whatever the balance struck by the Constitution, it must give effect to ss 51(v) and 109. Clause 44 is no less a law with respect to the services of the kind described in s 51(v) by reason of the fact that the immunity it confers, or attempts to confer, covers only discriminatory State laws.
Then, at 31:
The Melbourne Corporation doctrine presents an inquiry whether the federal law in question, looking to its substance and operation, in a significant manner curtails or interferes with the capacity of the States –
and then, in a passage picked up in the Native Title Case:
although the purpose of the doctrine
“is to impose some limit on the exercise of Commonwealth power in the interest of preserving the existence of the States . . . the implied limitations must be read subject to the express provisions of the Constitution. Where a head of Commonwealth power, on its true construction, authorises legislation the effect of which is to interfere with the exercise by the States of their powers to regulate a particular subject matter, there can be no room for the application of the implied limitations.”
Their Honours finish on this in paragraph 33 quoting Justice Dixon from Melbourne Corporation:
“The prima facie rule is that a power to legislate with respect to a given subject enables the Parliament to make laws which, upon that subject, affect the operations of the States and their agencies. That . . . is the effect of the Engineers’ Case stripped of embellishment –
So your Honours will recall that Mr Kirk mentioned Fortescue, which also talked about an attempt to deploy Melbourne Corporation to reverse 109 and Engineers’ – and I will come briefly to Fortescue tomorrow – but it is the same idea being expressed there. The Court, perhaps not quite summarily, but very briefly, rejected the argument that a State law of an obviously analogous kind to 302CA came close to interfering with the Melbourne Corporation doctrine.
Perhaps, finally, your Honours, before the Court adjourns, could I deal with what we understand to be the foundation for Victoria’s submission that the Commonwealth needs to rely upon the implied freedom – sorry, needs to rely upon the incidental power in order to support the validity of the law. That appears from paragraphs 69 and 48 of Victoria’s submissions to be based upon the particular remarks made by Justice Gaudron in ACTV. So, if your Honours could go to ACTV (1992) 177 CLR 106 – it is in volume 3 of the joint book, tab 20.
Victoria relies on this passage – this part of Justice Gaudron’s reasons from 219 to 220, in support of the idea that the power with respect to elections itself is confined to machinery and that to go wider one needs the incidental power. In our submission that is not what Justice Gaudron was saying at all in this part of her judgment. So starting on page 219, in the middle of the page, her Honour makes the point:
Power is conferred on the Parliament of the Commonwealth with respect to specific matters relating to Commonwealth elections by various provisions in Ch.1 -
and there is reference to some provisions we have already been through today, sections 9, 27 for example.
Provision is also made in Ch. 1 as to what should happen in relation to certain other aspects of elections “until the Parliament of the Commonwealth otherwise provides”. Thus, for example, ss. 10 and 31 -
Then at the bottom and a couple of lines on the top of the next page:
Power to legislate with respect to “[m]atters in respect of which [the] Constitution makes provision until the Parliament otherwise provides” is conferred by s.51(xxxvi).
So, her Honour is drawing the same distinction that I drew this morning between some of the provisions in Chapter 1 that are themselves sources for legislative power that one sees in Chapter 1, and other provisions where you have to go to 51(xxxvi) to get the source of legislative power. Having drawn that distinction, her Honour says:
It is doubtless correct to say that, by virtue of the combined operation of the provisions in Ch. 1 conferring legislative power and s.51(xxxvi) and (xxxix), the Commonwealth has plenary power with respect to Commonwealth elections -
citing amongst other things Smith v Oldham at 362 to 363, which I read to your Honours this morning.
However and leaving aside s.14, the powers conferred by Ch. 1 are either circumscribed by the terms of grant or expressly conferred “[s]ubject to [the] Constitution”. And, of course, Ch. 1 confers power only with respect to particular aspects of the election process: it does not confer power with respect to elections generally -
In my submission, where her Honour is there talking about Chapter I, she is not talking about sections 10 and 31 read with 51(xxxvi), and that is clear from the next sentence:
Power to regulate election advertising or election campaigning must be found in s. 51 and that power is “subject to [the] Constitution” and, hence, subject to the implied freedom –
So the distinction that is being drawn is between the Chapter I powers that are not expressly made subject to the Constitution and powers that arise only via 51(xxxvi) that are expressly made subject to the Constitution, but none of that supports the idea that the Commonwealth’s power to regulate elections at its core, that the 51(xxxvi) power read with 10 and 36 is in any sense confined simply to machinery.
The machinery provisions to which her Honour is referring are the much more narrow and restrictive ones identified in Chapter I. That is a rather longwinded way of saying that the particular foundation for the submission that the Commonwealth needs the incidental power cannot be made good. Tomorrow morning I will briefly take your Honours to some cases that more directly address the extent of the power to make laws with respect to elections and that describe that power in much more expansive terms than Victoria has suggested. I see the time.
KIEFEL CJ: At some point tomorrow we need to revisit the proposed time at which this concludes. Needless to say, the Court would be assisted if it concluded around lunchtime on Friday.
MR DONAGHUE: I think the estimates have us concluding a little before lunch. Obviously, we are tracking a little bit behind where we intended to be.
KIEFEL CJ: Yes. Perhaps if we revisit it around lunchtime tomorrow.
MR DONAGHUE: Thank you, your Honour.
KIEFEL CJ: The Court will adjourn to tomorrow, 14 March at 10.00 am.
AT 4.16 PM THE MATTER WAS ADJOURNED
UNTIL THURSDAY, 14 MARCH 2019
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