Spence v State of Queensland

[2019] HCATrans 44

[2019] HCATrans 044

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 TUESDAY, 12 MARCH 2019, AT 2.16 PM

Copyright in the High Court of Australia

MR J.K. KIRK, SC:   May it please the Court, I appear with my learned friends, MR P.A. HASTIE, QC and MS M.J. FORREST, for the plaintiff.  (instructed by ClarkeKann Lawyers)

MR P.J. DUNNING, QC, Solicitor‑General of the State of Queensland:   May it please the Court, I appear with my learned friends, MR S.J. KEIM, SC, MR G.J.D. DEL VILLAR and MS F.J. NAGORCKA, for the defendant, State of Queensland.  (instructed by Crown Solicitor (Qld))

MR S.P. DONAGHUE, QC, Solicitor–General of the Commonwealth of Australia:   May it please the Court, I appear with my learned friends, MR P.D. HERZFELD and MR C.J. TRAN, for the Commonwealth Attorney‑General intervening.  (instructed by the Australian Government Solicitor)

MR M.G. SEXTON, SC, Solicitor–General for the State of New South Wales:   If the Court pleases, I appear with my learned friend, MS E.S. JONES, for the Attorney‑General for New South Wales who intervenes in the proceedings.  (instructed by Crown Solicitor’s Office (NSW))

MR P.J.F. GARRISSON, SC, Solicitor General for the Australian Capital Territory:   May it please the Court, I appear with my learned friend, MS H. YOUNAN, on behalf of the Attorney‑General for the Australian Capital Territory.  (instructed by ACT Government Solicitor)

MR M.E. O’FARRELL, SC, Solicitor‑General for the State of Tasmania:   May it please the Court, I appear with my learned friend, MS J.L. RUDOLF, for the Attorney‑General of Tasmania, intervening.  (instructed by Solicitor‑General of Tasmania)

MR C.D. BLEBY, SC, Solicitor‑General for the State of South Australia:   May it please the Court, I appear with my learned friend, MS K.M. SCOTT, for the Attorney‑General of South Australia, who intervenes.  (instructed by the Crown Solicitor’s Office (SA))

MS K.L. WALKER, QC, Solicitor‑General for the State of Victoria:   If the Court pleases, I appear with my learned friend, MR M.A. HOSKING, for the Attorney‑General for the State of Victoria, intervening.  (instructed by the Victorian Government Solicitor)

MR J.A. THOMSON, SC, Solicitor‑General for the State of Western Australia:   May it please the Court, with MR J.M. MISSO I appear on behalf of the Attorney‑General for Western Australia.  (instructed by State Solicitor’s Office (WA))

KIEFEL CJ:   Yes, Mr Kirk.

MR KIRK: Your Honours, can I begin by enumerating the rather numerous issues in the case, and then identify the order in which we propose to address them. There were different ways of divvying up the issues but, in essence, there are six: first, whether Part 3 of what we call the amending Act of Queensland is invalid as inconsistent with the freedom of political communication by prohibiting donations from property developers at State government level, and that is question (a) in the special case.

Questions (b) and (c), the second issue, relate to whether Parts 3 and 5 of the amending Act, so that is the restrictions at both State and local government level, are invalid either by intruding on an area of exclusive Commonwealth power, or infringing an intergovernmental immunity protecting the Commonwealth.

The third issue is whether Parts 3 and 5 are inconsistent with section 302CA of the Commonwealth Electoral Act or inconsistent with provisions of that Act more generally – see questions (g) and (h).  I note at this point there seems to be no dispute about inconsistency between the State law and 302CA, rather the main answer there is to attack the validity of 302CA, and that is what the remaining three issues relate to.

So the fourth issue is whether 302CA is invalid by infringing an area of exclusive State power, or is otherwise beyond Commonwealth legislative power - that is question (d); fifth, whether 302CA is invalid by infringing the Melbourne Corporation principle – that is question (e); sixth, whether it is invalid by infringing the principle manifest in Metwally v University of Wollongong, and connected to that the nature of that principle, and whether it should be maintained – that is question (f). 

We will address the issues in a somewhat different order.  It is convenient, obviously, first to go through the competing State and federal legislation, and then to seek to establish the inconsistency, before dealing with the challenges to 302CA.  So I will deal with those in terms of whether it is within Commonwealth power, no relevant State exclusive power, at least beyond what is protected by the Melbourne Corporation principle, and then I will deal with the immunities, the intergovernmental immunities at Commonwealth and State level.  Then I will deal with Metwally.  Finally, my learned friend, Mr Hastie, will address the freedom of political communication issue, so we will deal with that last, no doubt tomorrow.

Can I turn then directly to the legislation. Your Honours would appreciate by way of background that what we call the amending Act, which is reproduced in full – I will not go to it in this form, but the amending Act as amending Act is reproduced at joint book of authorities volume 2, tab 14. It commenced on 2 October 2008. Part 3 amended the Electoral Act 1992 (Qld) and Part 5 amended the Local Government Electoral Act 2011 (Qld) in very similar terms.

It is sufficient for our purposes to focus on Part 3 amending the Electoral Act so that I will make one brief reference to provision in the Local Government Electoral Act.  Can I take your Honours to the Electoral Act 1992 as it now stands, which is in joint bundle 1, tab 5, and I will go through relevant provisions in essence in numeric order. If your Honours turn to page 326 of the authorities book, volume 1 as I said, within section 2 of the Queensland Act you will find a key definition for the purposes of the whole argument at the bottom of the page, namely “political party” defined to mean:

an organisation whose object, or 1 of whose objects, is the promotion of the election to the Legislative Assembly –

of Queensland, obviously enough:

of a candidate or candidates endorsed by it or by a body or organisation of which it forms a part.

To make a small point, “political party” is to be distinguished from “registered political party”.  If your Honours go page 329:

registered political party means a political party that is registered in the register of political parties.

By way of background, if your Honours then turn to page 332, you will see Part 6 of the Queensland Act is headed “Registration of political parties”.  Section 70 provides for a register of political parties.  Section 71 provides for applications for registration.  Again by way of background, in 71(4), your Honours will see that:

(d)if the application is for a Queensland parliamentary party‑set out the name of 1 member of the party who is a member of the Legislative Assembly; and

(e)if the application is for a party that is not a Queensland parliamentary party –

you must meet what is sometimes called the 500 rule, namely, that you have 500 members.  Of course, there are similar provisions in other electoral schemes around the country.

There is, of course, no requirement that political parties be incorporated.  There are various benefits to registration of parties – again, by way of background to give an example – in Part 11, Division 5, a party which is registered is eligible for policy development funding.  But that is really just background.

Part 11 commences at page 335.  It is headed “Election funding and financial disclosure”.  There is no perfect way of doing this but can I pick up the definitions first and then your Honours will see how they plug into operative provisions.  At page 336, your Honours will see – about point 4 of the page:

elected member means a member of the Legislative Assembly.

There is a definition ‑ ‑ ‑

BELL J:   For those of us working off the Act, could you give us the section number?

MR KIRK:   I am sorry, your Honour.  So, it is section 197.

BELL J:   Thank you.

MR KIRK:   I am sorry.  So, it is the definition of “electoral expenditure” which is fairly early in the section.  Relevantly:

(b)for division 8, subdivision 4 –

which is the relevant subdivision:

means expenditure incurred for the purposes of a campaign for an election, whether or not the expenditure is incurred during the election period –

Without going back to it, “election” is defined in section 2 to mean election of the Legislative Assembly.

If your Honours then jump to Division 8, within Part 11 – so that is page 369 of the authorities book.  The division is headed “Rules about particular gifts and loans”.  Subdivision 1 – again, really, background – is gifts of foreign property.  Subdivision 2 at page 373 is anonymous gifts.  Subdivision 3 at 375 is loans from entities other than financial institutions.  The heart of the case is focused on Subdivision 4 which, in the book, commences at page 376, at section 273 of the Act.  Your Honours will see in 273(1) that “prohibited donor” is defined to mean:

(i)a property developer; or

(ii)an industry representative organisation, a majority of whose members are property developers; but

(b)does not include an entity for whom a determination is in effect under section 277.

By way of background, that is a mechanism for the Electoral Commissioner to make a ruling on whether you fall within or without the criteria.  It just gives some certainty as to whether you are within or without; it does not change the substance of the scheme. Section 273(2) indicates:

each of the following persons is a property developer -

I will let your Honours read the definition.  Your Honours will appreciate it includes builders, for example, large and small, along with close associates.  It is focused, I would note, on corporations, plus close associates. There is a carve‑out in subsection (3) which is not material, but by way of background, it is for people who do development in essence for their own ends – so that is kind of the Woolworths or the Bunnings who regularly develop properties, but so that they can run their own enterprises there.  Subsection 5 on page 377 defines “close associate”, that being part of the definition of “property developer”.  Your Honours will see that it includes “a related body corporate”, which is further defined down the page: 

(b)a director or other officer of the corporation;

(c)a person with more than 20% of the voting power ‑

or a spouse of a director or a significant shareholder.  Your Honours will also note, jumping over (e) and (f), that in (g):

if the corporation is a trustee, manager or responsible entity in relation to a discretionary trust –

any beneficiary of the trust is also deemed to be a close associate.  So that would capture, for example, if one had a home builder operating through a discretionary trust, all beneficiaries of that discretionary trust would be close associates and thus property developers and thus prohibited donors. 

There is a definition of “relevant planning application” towards the bottom of that page.  I will not go through the detail of that - that is more relevant to the implied freedom argument, which my learned friend, Mr Hastie, will develop.  If I could then jump to section 274, headed “Meaning of political donation”, it identifies:

each of the following is a political donation–

(a)a gift made to or for the benefit of‑

I should note “gift” is defined earlier in fairly standard and expected terms. 

(i)a political party -

So that was the definition I first showed your Honours in section 2.  Your Honours will note that it need not be a registered political party, it is any political party; that being where one object is to elect members to the Legislative Assembly.  Next, an “elected member” - that is defined in section 197 to be “a member of the Legislative Assembly” or a candidate in an election defined in section (2) – election, that is, to the Legislative Assembly.  So it covers donations, in essence, to parties, members and candidates.  The definition of “gift” I should have noted is in section 201 at page 340, but your Honours need not go back to it - (b) covers indirect gifts, and (c) covers some loans – it is not necessary to dwell on those.  Subsection (2) provides that:

If a gift is made by a person in a private capacity to an individual (the recipient) for the recipient’s personal use and the recipient does not intend to use the gift for an electoral purpose –

then it is not a political donation when made but if any part of it is subsequently used for an electoral purpose, then for the purposes of the prohibition – which I am coming to – it is a political donation and the recipient is taken to accept that part of the gift at the time of use.  Over the page in subsection (3), “electoral purpose” is defined to be:

a reference to using the gift to incur electoral expenditure or for the recipient’s duties as an elected member.

“Electoral expenditure” is defined in section 197 and links to elections for the Legislative Assembly, unsurprisingly.

Your Honours will see that no part of the definition of “political donation” limits it to donations for State electoral purposes.  The only reference to “electoral purposes” is that in subsections (2) and (3) which relates to where it is given in the first instance in a personal capacity for personal use but that is then changed over.  It thus encompasses any gift to or for the benefit of a political party as defined for any purpose – is thus a very broad definition. 

The prohibition is then in 275.  Broadly speaking, your Honours will see that it applies to the giver, the donor and the recipient – and, interestingly, in subsections (4) and (5) it also prohibits donors – sorry, it prohibited donors from soliciting political donations.  So, someone such as my client, for example, Mr Spence, who was President of the Liberal and National Party until recently in Queensland and who was a director of companies involved in property development would not – and assuming for the moment that makes him a property developer - be able to solicit donations on behalf of the Liberal/National Party even though he is doing it in no connection with his own business but doing it as the then President of the political party.

There are two consequences or two possible consequences for breach of what is made unlawful in 275.  First, under 276, if the person accepts a prohibited donation, so that is the recipient, that becomes a debt owing to the State and if they knew it was unlawful at the time it is twice that amount payable to the State.  The second consequence is criminal.  At sections 307A and B, which are at page 398 ‑ ‑ ‑

KIEFEL CJ:   Just before you go there, is the breadth of the operation of section 274, relating to political donations, affected by the definition of “political party” and the width of the objects not being limited to State purposes?

MR KIRK:   Precisely so.  So the only limitation down to a State connection is that there need be one object but only one of the party to elect members or to seek to endorse members to the Legislative Assembly.  But it need not be the primary or the sole or the main object; it simply need be one.  The prohibition, your Honours will see, is in 307A.  Then 307B ‑ your Honours are well familiar with these schemes now – is a circumvention provision.  I do not need to dwell on that.

Following from your Honour the Chief Justice’s question, there is no recognition in the Act that political parties may operate across different levels of government as it is the fact, and it must surely have been well known, that they do.  Can I take your Honours to the special case book, volume 1, at page 114, which is where the amended special case commences?

I will just identify for your Honours some key facts - page 114.  Your Honours will see in paragraph 2 that the LNP is a “voluntarily unincorporated association”.  It is registered as a political party under both the federal and the State law – and I will come to the federal law shortly.  Your Honours will see in paragraph 6, by way of background, that things do get a bit messy, in a sense, in that both the Liberal Party and the National Party are also registered parties under the Commonwealth Electoral Act.  But that does not change the fact that the LNP is registered of itself and it is the main representative of Liberal National Party interests in Queensland, as is shown over the page. 

To summarise, in paragraph 8, it holds a number of seats in opposition in the Legislative Assembly.  In paragraph 9, members of the LNP are numerous in both the House of Representatives and the Senate.  In paragraph 11 there are also councillors from the LNP on the Brisbane City Council.  In relation to the ALP, as your Honours certainly know from past cases, paragraph 12, it is an unincorporated association, established in 1891.  In paragraph 13, the Labor Party Queensland is registered under both State and federal Acts.

Paragraph 17, it of course forms government in Queensland and also has councillors on the Brisbane City Council.  The Katter’s Australian Party, paragraph 19, has a member in the House of Representatives and three members in the Legislative Assembly.  It is registered under both State and federal Acts.

Paragraph 20, Pauline Hanson’s One Nation – now, here there is a slightly different name of registration.  So in the Commonwealth sphere it is registered as “Pauline Hanson’s One Nation”.  In the State sphere it is registered as “Pauline Hanson’s One Nation Queensland Division”.  It is not apparent whether or not that is a difference of any substance.  There is no reference to it being incorporated, for example.  In any event, there is one member of the Legislative Assembly and one senator, being Senator Hanson herself, from Queensland – or I should say now one senator from Queensland.

Paragraph 21 - the Queensland Greens have a registration under both the Queensland and federal Acts.  They have a member of the Legislative Assembly.  They have, I think, at least one senator and one councillor on the Brisbane City Council.  That is summarised in paragraphs 21A to 21C and your Honours will see in 21C:

Every political party that is represented in the Queensland Legislative Assembly is also represented . . . in the House of Representatives the Senate, or both.

The effect of the legislation, the Electoral Act as now amended, is that all significant political parties in fact operating in Queensland cannot accept donations from property developers or close associates thereof, as defined.  That prohibition in 275 applies, even if the gift is given on condition that it only be used for federal electoral purposes.  So, if a gift were given today for use in the forthcoming federal election and the express term is you can only use this for electoral purposes federally, it would still purportedly be prohibited by section 275 insofar as it applied to the ALP or the LNP, for example.

GAGELER J:   Mr Kirk, you took us to a number of provisions within Part 11, but is the focus of your challenge to section 275(1) in its application to a gift to a political party?

MR KIRK: The answer is yes insofar as that is the way we focus the argument, but can I add this. There has been no suggestion by Queensland of any reading down or severance being available. Queensland seems to accept that the amendments made by Part 3 of the amending Act stand or fall together for all purposes.

GAGELER J:   You took us to subsection (4).  We are not going to hear a separate argument based on subsection (4), are we?

MR KIRK:   Subsection (4) of?

GAGELER J:   Of 275.

MR KIRK:   No.  The reason I mentioned it is that it will figure as a small part of the complied freedom argument but it is not a central plank of the other arguments I am developing where I have the rest.  The prohibition in 275 applies, as I mentioned, even if the party is not registered under the Electoral Act (Qld), so long as one object is the one that I mentioned.

I will mention a number of times in the course of my submissions the issue of what we called in writing the unallocated middle.  There is obviously a spectrum of possible political donations.  There are donations for State electoral purposes, that is to say, the donor says this is for the Queensland election, which is next year I think.  At the other end of the spectrum you have donations of a kind I mentioned a minute ago, expressed to be for the purpose of federal electoral purposes.  There is then the potential unallocated middle, where it is just a donation to the party saying, “Use it as you see fit.”

It will be part of my argument to acknowledge in a number of places as I go along that both levels of government may have a legitimate interest in regulating that unallocated middle.  It will also be part of my argument that insofar as the Commonwealth does so and does not of course intrude on the Melbourne Corporation principle, it is entitled to precedence because of section 109.

But what Queensland has done is not merely regulate donations for State electoral purposes or even just the unallocated middle; it seeks to regulate the whole spectrum save only for the link that I mentioned earlier, namely that there be at least one object of election to the Legislative Assembly.  No attempt whatsoever has been made by the State to recognise the dual nature of political parties or to leave any room for Commonwealth law to operate.

GORDON J:   Is that right?  It is clear from the definition of “political party” that it had turned its mind to the fact that there were these entities that had dual purposes.

MR KIRK:   In a sense, that illustrates that it is seeking to regulate the whole field because something like ‑ ‑ ‑

GORDON J:   That is why I thought that was your argument rather than not having recognised ‑ ‑ ‑

MR KIRK:   No, I am sorry.

GORDON J:   Your argument is they have recognised and they have gone too far.

MR KIRK:   You are right.  Sorry, yes, your Honour is right.  There is just one provision I wanted to show to your Honours in the Local Government Electoral Act which is in volume 2 of the joint book of authorities at tab 13.  So, that is the Local Government Electoral Act 2011. It is very much in parallel terms but I wanted to show to your Honours the definition of “political party” which is at page 607. For your Honour Justice Bell, it is in the dictionary which is right at the back of the Act. So, it is page 607. It is very similar but actually just a tad broader. It is defined to mean:

an organisation or group whose object –

and it now adds the words:

or activity –

In the definition in the Electoral Act, it is just “object”:

or 1 of whose objects –

New words:

or activities, is the promotion . . . to an office of councillor of a local government.

That, of course, is any local government.  That is the only provision I wanted to draw your Honours’ attention to specifically in that.  Can I then turn to the Commonwealth legislation which is, again, within volume 1 of the bundle of joint authorities at tab 3?  Again, forgive me, if I go through, essentially, in numeric order picking up some definitions, all of which are going to slot in to a very rolled‑up provision towards the end.  Can I start in section 4 at page 63 of the authorities book in relation to definition of “political entity”?  So, a political entity means any of:

(a)a registered political party –

So, that is registered under Part 11 of this Act:

(b)a State branch (within the meaning of Part XX) of a registered political party;

(c)a candidate . . . in an election . . . 

(d)a member of a group –

I will pick up shortly – there is a further definition of “State branch” but it is a State branch of the same party.  It is not referring to something else.  Underneath that, your Honours will see a definition of “Political party” which is in similar terms to, in fact, the one in the LocalGovernment Electoral Act (Qld). It refers to “object or activity”.

At page 67, section 4AA, there is a definition of “Electoral matter”.  Subsection (1) is the key.  There is further delineation but it is not material for current purposes.  Your Honours will see that it expressly builds in a federal element of influencing the way electors vote in relation to a federal election.

At page 81, Part XI of the Act is headed, “Registration of political parties”.  Just again by way of background, really, in section 123(1) there is a definition of “eligible political party”, so meaning eligible for registration.  Similar to the Queensland scheme, you have to either be a parliamentary party, in other words you already have a member, or meet the 500 rule – your Honours will recall the 500 rule was the subject of challenge in Mulholland v Australian Electoral Commission. 

To give your Honours a reference, in the Commonwealth submissions, paragraph 29, footnote 45, without going to it, the Commonwealth has listed some of the benefits of registration of a political party within the context of the federal statutory scheme.

Can I then jump to Part XX, which is the relevant part, commencing at page 125. Can I indicate how I am going to proceed in the next few minutes. It is obviously central to our case to rely on 302CA, which is the express 109‑type provision, but 302CA is challenged on the three grounds I mentioned earlier. We thus have an alternative argument, which I will seek to develop fairly quickly, because it is very much down the batting order, that even if 302CA is invalid, there is still a section 109 problem because Part XX regulates the subject matter of gifts to relevant political parties, entities, candidates and so forth.

KIEFEL CJ:   This has not been part of your written submissions to this Court.

MR KIRK:   It is in our written submissions.  It is dealt with fairly briefly, but it is our written submissions - someone will tell me very shortly – and it is mentioned again in reply, actually.  It was actually the original way we were going to put the 109 argument, but then the Commonwealth Parliament came in and ‑ ‑ ‑

GAGELER J:   I am not sure it made it into the questions, Mr Kirk.

MR KIRK:  It is in (g) and (h), questions (g) and (h) - so that is at page 163 of volume 1 of the special case book - which are expressed generically in terms of whether the amendments are invalid for inconsistency with the Commonwealth Electoral Act.  As I said it was the original way we were going to put it but we got a bit of a hand up from the Commonwealth Parliament.

KIEFEL CJ:   Speaking of which, the parties have not thought it was obviously of much interest to us to be taken to the legislative history of, in particular, section 302CA and the extrinsic materials which refer to it.  Perhaps the Solicitor‑General is going to do that for us at some point, including the passage through the Joint Standing Committee on electoral matters. 

MR KIRK:   I am sure he is now.  Thank you, your Honour.  So that is why I am seeking to go to some of these provisions.  It also serves to work contextually.  All that being said I am not going to spend long on it because it is a secondary argument as I mentioned.  Can I start with 286A, at the beginning of Part XX, so that is at page 125 of the volume.  This is the simplified outline.  We rely on the first two sentences, “This Part deals with”, as a delineation of the subject matter being dealt with by Part XX.

Some of what I am now going to go through is relevant both to the broader 109 argument but also then fits in the definitions to 302CA.  So if your Honours turn the page to section 287(1), which is the interpretation provision for Part XX, your Honours will see:

candidate has a meaning affected by subsection (9) –

to which I will come.  There is a reference to “disclosure threshold”, which fits into some of the provisions.  On the next page: 

entity means:

(a)an incorporated or unincorporated body;

(b)the trustee of a trust.

Over on page 128, “gift” is defined, again, in unsurprising terms.  “Group” is defined to mean:

a group of 2 or more candidates nominated for election to the Senate -

Your Honours are again well familiar with that.  That is the grouping process for above‑the‑line voting.  So you have to register a group to be, say, ALP - you registered 11 candidates or the 12 candidates for Queensland, and that is a group.

“Political campaigner”, on 129, is someone registered as such under 287L, to which I will come.  Page 130, your Honours will see the definition of “State branch”, which fits back into the definition of “political entity”:

in relation to a political party, means a branch or division of the party –

So the definite article is why I said earlier that it is just, in effect, a subdivision of the same federal party.  It is not referring to something which is separate from the party being dealt with for federal purposes.  It reflects the fact that for political parties, as for trade unions, for example, they are often organised into State branches or divisions.  

“State or Territory electoral law” is defined in fairly bland and unsurprising terms.  “Third party” is someone who incurs electoral expenditure, but they are not required to register as a political campaigner and that is because they have not spent enough.  I will come to explain that momentarily.

These definitions fit into 302CA, amongst other places, which is why I am going through them.  If your Honours then jump to page 133, section 287AB, there is an important definition of “electoral expenditure” to mean:

expenditure incurred for the dominant purpose of creating or communicating electoral matter, except to the extent that –

and then there are a couple of exceptions which are not material for current purposes.  Your Honours will recall that “electoral matter” is defined in 4AA essentially as being something which has the dominant purpose of influencing voting at federal elections.  So, although there is no express federal element in the definition of “electoral expenditure”, it is implied by referring to “electoral matter”.

If your Honours then jump to Division 1A, relevantly, page 138, section 287F, “Requirement to register as a political campaigner” - so if a person or entity spends more than half a million dollars over three years or $100,000 – I am simplifying it a bit – over a year, it is required to register as a political campaigner, otherwise, it may be a third party if it falls into the lower category.  Then the actual registration is under I think 287L, but it is 287F which does the relevant work.

Then if I could ask your Honours to jump to Division 3A at page 169 of the book - it is headed “Requirements relating to donations”.  As a little bit of legislative history, this whole division was inserted by the amending Act enacted in November of last year so Division 3A is wholly new.  Again, there is a simplified ‑ ‑ ‑

KIEFEL CJ:   And it is after the commencement of this litigation.

MR KIRK:   Correct.  There is again a simplified outline.  Again we rely particularly on the first sentence as being a delineation of the subject matter that the division seeks to regulate, namely, gifts to registered political parties, et cetera.  There is then an explanation of particular provisions relating to foreign donors.  I will explain those provisions very briefly.

If your Honours turn the page, 302C is the object of the division which is focused on foreign persons.  Section 302CA, I will come back to shortly because it is obviously central.  If your Honours jump to 302D, in essence, without going through the detail, there is a prohibition on accepting donations if you are a political entity or a political campaigner from a foreign donor over $1,000.  A “foreign donor” is defined, for completeness, in 287AA, at page 132.  There is a reference to “acceptable action” which essentially means that if it happens you have to either return it or pay it to the Commonwealth.

KIEFEL CJ:   Would you be arguing that that is the object of section 302CA?

MR KIRK:   No.  Well, yes and no, your Honour, in the sense that these are – what 302D and some related provisions I will outline very briefly illustrate is that the Commonwealth has sought to regulate donations to some extent – but then only to some extent.  Otherwise, it seeks to keep the field free such that donations not prohibited by this division may be made to political parties, registered campaigners, third parties, candidates and so forth.  So, this is part of what has been prohibited.  Section 302CA then says, and otherwise there may be donations or gifts.

That is 302D.  Section 302E is foreign donations to third parties.  So they are the ones a bit less than political campaigners.  I need not focus on that.  Section 302F, for completeness, there is a lower threshold of $100 instead of $1000 if the gift is intended by the giver or recipient to be used for electoral expenditure or communicating electoral matters. 

If I could then jump briefly to Division 4 beginning at page 187 - this is a disclosure provision.  For my purposes, the summary and the simplified outline is sufficient in the first two sentences:

Candidates and members of groups in an election who receive gifts must disclose –

Particularly, there is a notion of disclosure threshold which requires a particular level of disclosure with names and addresses, for example.  So that is then dealt with in the substance of Division 4.  Division 5, at page 199, is disclosure of electoral expenditure.  So, 4 is donations, 5 is “EE”, electoral expenditure.  Again, it is sufficient, for my current purposes, to refer to the first paragraph of the simplified outline, section 307A, which explains sufficiently the point.

Then Division 5A at page 204 is a requirement for annual returns by registered political parties and political campaigners and it is sufficient to refer to the simplified outline at 314AAA, which requires annual returns to the Electoral Commissioner essentially setting out expenditure and money in – so money in, money out.

They are the key operative provisions as a miscellaneous provision.  To then briefly make the broader 109 argument before I come to the focus on 302CA, which is our main focus, in our respectful submission Divisions 3A, 4, 5 and 5A manifest the Commonwealth regulating the giving and receipt of and disclosure of donations in various careful ways.  There is every reason to think the Commonwealth sought to do so in an exclusive and exhaustive way, even apart from 302CA. 

It has addressed the topic of donations, specifically through foreign donations, and also when one works it through in effect there is a limit on anonymous donations because of the requirement to disclose ultimately names and addresses.  There is no general concurrent operation provision.  The closest one comes, of course, is 302CA.  I note for completeness there is a similar provision to 302CA in relation to disclosure - 314V, page 213.  Again, I do not need to get bogged in that.  Again, it shows that Parliament has sought to delimit where State law may apply but otherwise it has sought to regulate the field.

Given these factors, we suggest that there is reason to conclude that Parliament meant to be exhaustive.  The topic covered, the subject matter covered, the field is sufficiently identified in 302A, in the first sentence, regulating gifts:

made to registered political parties, candidates, groups, political campaigners and third parties.

The defendant makes two arguments in response to this point.  First, it says that – their primary submissions at 115.  The Commonwealth Electoral Act does not regulate the topic of donations for federal purposes, as we had put it, but rather:

regulates the making of gifts to participants in federal elections –

In our respectful submission, that is a distinction without a difference.  If you are regulating ‑ ‑ ‑

KIEFEL CJ:   Is that not pointing to the problem with connection?

MR KIRK:   Yes, indeed.  It is also illustrated by the practical point here that I made.  No middle parties operate; all current significant political parties in the sense of 92 out of 93 members of the Legislative Assembly are also represented at the federal level.  So, all significant current political parties operate at both levels.  So there is a clash in practice.  As I said earlier, the Queensland laws currently forbid receipt of donations for significant political parties for federal electoral purposes so long as they have one object - the elected parties have one object, et cetera.

The second argument the defendant makes is that the very presence of 302CA undermines the existence of an implicit negative stipulation, a “covering the field” stipulation.  Our answer to that is that the core aim of 302CA, to which I am about to turn, read as a whole, is in fact to preserve to some significant extent the operation of State and Territory law.  Thus one can equally read that section as presuming there would otherwise be a conflict and the section seeks to delineate and moderate that.

There I will leave the broader 109 arguments, and can I now turn to 302CA, which is at page 170 of the authorities book, and go through it with a little bit of care.  It does, as I alluded to earlier, have a lot rolled up within it, because of the definitions.  So subsection (1):

Despite any State or Territory electoral law -

That notion being defined in 287(1):

a person or entity may:

(a)give a gift to, or for the benefit of, a political entity -

See the definition in section 4.

a political campaigner or a third party -

or receive or retain it, or someone can receive or retain it on behalf of the recipient.  The notion of “political entity” is tied to federal notions because as per the definition in section 4(1), it means a registered political party, a State branch of such, which as I said, is still a State branch of the same party, a candidate or a member of a group, both of which have federal links.

A candidate - sorry, I did skip over this earlier, and I apologise.  “Candidate” has a meaning effected by 287(9), which is back at page 132.  Nothing turns on it much, except to illustrate that it is plain from the expansion of “candidate” in 287(9) that it means a candidate for federal electoral purposes.

GAGELER J:   Mr Kirk, again, there is a lot of detail here, but is the focus of your argument on section 302CA in its application to a political entity, that is, either a registered political party or a State branch of a registered political party?

MR KIRK:   Yes, that is the focus of my argument.  As I said earlier, the consequence, it seems to be accepted, that if we are right about all this, it still leads to wholesale invalidity, but that is our focus.  So every aspect of (1)(a) and, indeed, (b) and (c), has a federal element:

political entity, a political campaigner or a third party –

all ties back to notions with federal links.  Going on in the provision, (d) sets out the negative criterion.  So, for example, a party may receive a gift or be given a gift if the negative criterion “the division does not prohibit it” – so that links to the answer I gave to your Honour the Chief Justice earlier.  Then there is a positive criterion, (e).  Positively, the gift, or part of it:

is required to be, or may be, used for the purposes of incurring electoral expenditure, or creating or communicating electoral matter, in accordance with subsection (2).

So pausing there, “electoral matter” has the federal link I referred to earlier.  “Electoral expenditure” links to “electoral matter”, and thus also has federal links.

KIEFEL CJ:   But the words “or may be” may take it out of the federal context.

MR KIRK:   What that does, your Honour, in our respectful submission, is that it is dealing with what I called earlier the unallocated middle.  So in other words, it has not been allocated to State or Territory purposes – that is what follows from the subsections I am about to come to.  But it has not positively been limited to federal electoral purposes, so it is the unallocated middle.  To then develop that point, subsection (2):

A gift, or part of a gift, is required to be, or may be, used for a purpose of incurring electoral expenditure, or creating or communicating electoral matter –

if either the terms explicitly require or allow that, so require or allows it to be spent on federal linked matters or the provision does not set terms relating to the purpose, so that is why I said the unallocated middle.  Subsection (3) then spills out three instances, as your Honours see, without limiting when subsection (1) does not apply but elucidating three specific instances where subsection (1) does not apply. 

Now, subsection (1), of course – before I go through (3) – is a classical section 109 provision. It is creating in theoretical terms a Hohfeldian liberty, that is to say you breach no duty if you fall within these terms. You breach no other law. In other words, the Commonwealth has made exhaustive and exclusive provision if you come within (1)(a), (b) or (c) and otherwise within the terms of the section.

Subsection (3) says “Without limiting” when it does not apply, here are three specific instances where that liberty in (1) does not apply.  So the first, in subsection (a), is really just the corollary of subsection (2).  It is where any term set by the giver requires it only to be used for a State or Territory electoral purpose.  So if it is in that part of the spectrum I identified earlier it is directed to State or Territory purposes.  You are not within subsection (1) and State and Territory law applies.  The second, in (b)(i), is where:

the effect of a State or Territory electoral law is to require the gift or part to be kept or identified separately –

and you then have to read that with the words under (ii):

in order to be used only for a State or Territory electoral purpose.

So that is recognising that some States in fact do have provision for separate State or Territory accounts.  South Australia, for example, has such a provision, which is referred to in the South Australian Attorney’s submissions.  Subsection (b)(ii) is the third exception from the liberty in subsection (1) where the gift recipient themselves:

keeps or identifies the gift –

So, in other words, they make some determination that it is to be used only for a State or Territory electoral purpose.  Now, your Honours will see it does not expressly have a temporal identification in subsection (ii) as to when the gift recipient must do that.  The note and the example suggest it can be done post receipt.

As explained in our submissions – in fact, explained in Queensland submissions, too – the note and the example are taken to be part of the Act.  I think section 13 of the Acts Interpretation Act, along with section 15AD, they, prima facie, cast light on such temporal aspect as there is of 3(b)(ii).  Later, when dealing with the Metwally argument, I will put in the alternative a reading‑down submission that if there is a Metwally problem, which we say there is not, one could read in a temporal element to that.  But I will come back to that.

Turning over the page, subsections (4) and (5) deal with using gifts.  Subsections (1) to (3) deal with giving, receiving and retaining, (4) and (5) deal with use, and again there are links to federal elements by the reference to electoral expenditure or electoral matter.  For some reason, in subsection (5) – I do not think this is going to be the focus of anyone’s argument in particular ‑ subsection (5) is a slightly more limited exception than subsection (3) is because it only deals with where the effect of a State or Territory electoral law is to require that it be kept separately.  So that is the equivalent of (3)(a) and it does not have the (3)(b) variance.

It probably does not make much difference in practice because to be able to use the money you need to have received it, broadly speaking.  So you need to get through the gateway of subsections (1) to (3) anyway.  I do not know if anything turns on that.  Subsection (6) elucidates for the purposes of both (3)(b) and subsection (5) something about how gifts can be kept or identified separately.  That can be done either by keeping it in an account or simply the recipient designating it as an amount to be used in that way.

The overall effect of 302CA, in our respectful submission, is that it delineates the area where Commonwealth law relating to donations to the relevant categories of person is exhaustive and exclusive, that that is done with respect to entities that all have significant federal links in the way the scheme works and for electoral expenditure, electoral matters that have a dominant link to the federal arena.

It leaves an area for operation of State and Territory law where the gift is directed into State or Territory electoral purposes in one of the, in particular, three ways identified in subsection (3).  It overrides State and Territory laws in relation to donations for federal electoral purposes, speaking a little bit loosely, and for the unallocated middle, at least, unless and until something within the unallocated middle is assigned, one way or another, to State electoral purposes or Territory electoral purposes.  Once it is so assigned, it falls within 3(b)(ii) or (iii).  I will say a little bit more about that shortly because there is a little argument of construction about that.

As I said earlier, I think, it does not appear to be disputed that if 302CA is valid there is inconsistency between the federal scheme and the whole of Parts 3 and 5. No argument has been directed by Queensland to the contrary.

KIEFEL CJ:   I thought they said they were different subject matters.

MR KIRK:   That I think was for the purposes of a broader 109 argument, not for the 302CA argument.

KIEFEL CJ:   Not this narrower argument?

MR KIRK:   Not as I understand it, your Honour, no.  Can I turn then to deal, first, in relation to defending 302CA, why we say it is within Commonwealth power and not within some exclusive State power?  To explain that point, or points – Victoria, at least, says 302CA seemingly is not within Commonwealth power, on any view of it.  Queensland says we do not think there is an exclusive Commonwealth power over elections.  But if there is an exclusive Commonwealth power over elections, there is an exclusive State power over elections and if there is that 302CA trenches upon the exclusive State power over elections.

So, can I deal with those two arguments at this point because it is a convenient place to deal with them?  I will deal with Queensland’s argument first, namely, that it is not a law with respect to federal elections.  For convenience, this is set out in Queensland written submissions at paragraphs 94 to 104.  There is no basis in authority for the claim that there is State exclusive power over State elections.  That, of course, is the start of an argument, not an end of it. 

We submit that insofar as you can speak at all of exclusivity here, for State power over their own electoral systems, it would only be as a label of conclusion for that freedom they have as a result of the Melbourne Corporation immunity, which I am going to come to deal with.  So, one can label that as an exclusive area of power but only in the sense that for the Commonwealth to trench upon it would be to infringe the Melbourne Corporation principle.  Otherwise, there is no State exclusive power. 

The way Queensland puts its arguments is reminiscent, we respectfully suggest, of the argument put in Fortescue Metals v Commonwealth (2013) 250 CLR 548. If I can take your Honours briefly to that, it is in joint bundle 6, tab 35. If I could take your Honours to page 2260, which is page 606 within the report in the plurality judgment of Justices Hayne, Bell and Keane, paragraphs 119 to 120.

Your Honours will recall this was a different sort of argument but it has some similarities to that put here.  It was about the federal new mining resource tax.  At the top of page 606, second line, there is a quote from Melbourne Corporation about:

“The position of the federal government is necessarily stronger than that of the States . . . And s 109 gives supremacy to the valid exercise of the federal Parliament’s legislative powers. The plaintiffs’ arguments sought to invert that structure by asserting that the ambit of the Parliament’s power under s 51(ii) to make a law with respect to taxation depends upon whether and how States have legislated for the different, if closely related, subject of mineral royalties.

Then, jumping to paragraph 120:

Since Amalgamated Society of Engineers . . . it has been securely established that the legitimate extent of the law‑making power of the Commonwealth is not to be limited by first assuming the existence of State laws or law‑making power, or by according precedence to State laws made in the exercise of State law‑making power . . . The plaintiffs’ arguments for invalidity cut directly across these basal principles.

There is an element of reserve powers flavour to the way Queensland puts this argument as though one needs to identify and construe some State exclusive power and then abstract that from Commonwealth power. The relevant constitutional powers here are sufficiently found in sections 10 and 31 of the Constitution, the operative phrase of which is that the Commonwealth’s power is one “relating to elections”. That is obviously a very similar phrase to the words “with respect to” in section 51 relating to “with respect to”.

Without going to it, in Mulholland v Australian Electoral Commission (2004) 220 CLR 181 at paragraph 66 Justice McHugh expounded on those words “relating to elections” and expounded upon them in broad terms. Then, of course, there is Smith v Oldham, which my learned friend, the Solicitor‑General for the Commonwealth, will deal with. 

There is no warrant to take a narrow approach to these powers and there is a danger of trying to be too definitive here about what is exclusive because, as I frankly acknowledged, both levels of government do have some legitimate interests which overlap for the unallocated middle, for example, recognising the practical reality that political parties in Australia now are registered at both levels.  So, there are some overlapping interests which we frankly recognise. 

As the cases on the freedom of political communication illustrate there are well‑recognised dangers for governance in relation to the actual or perceived corrupting influences of political donations.  Different parliaments may take different views from time to time as to what laws should be regulating political donations, as they have done here.  The Commonwealth takes a different view to the State of Queensland. 

It cannot be doubted that these are topics which are part of regulating the electoral process and a legitimate matter for concern and policy judgment at each respective level.  A law regulating political donations to entities operating at the federal level in relation to federal electoral matter or electoral expenditure is, in our respectful submission, plainly within Commonwealth power. 

KIEFEL CJ:   Incidental power?

MR KIRK:   Victoria seeks to place it within the incidental power.  Where one has a generically expressed criterion such as relating to elections, to seek to delineate what is incidental and what is not becomes a little bit arbitrary, in a sense.

KIEFEL CJ:   Could be rather important, could it not?

MR KIRK:   Well, we respectfully submit not.  It is certainly at least within the incidental power but we would say it is actually captured directly by the notion of “relating to elections” because “relating to elections” captures the operators, the people who take part in the political system so that includes candidates, members, political parties who are, of course, a direct part of the federal electoral system because of the Senate ballot paper and it extends to regulate the way those bodies operate.  So, it does not need to be seen as being within the incidental power. 

We would also refer to Justice Brennan’s judgment, of course, in Cunliffe v The Commonwealth and the Court’s judgment in Leask v The Commonwealth, I do not have references, I am sorry, as to the difficulties and somewhat arbitrariness sometimes of seeking to delineate with some degree of definiteness as to whether you are within an incidental area of power or the central area of power.

GAGELER J:   Mr Kirk, it is traditional in this field to be rather precise about the legal operation of the law and then to relate that legal operation either legally or practically to the subject matter of the power.  Are you going to do that?

MR KIRK:   I will do that right now.  So, the legal operation of Part XX, including Division 3A specifically, is to regulate, including in a criminal way, but broadly regulate what donations may be accepted by the relevant political actors who are identified in that division and I will not go through all the details again but political entities, most notably, political campaigners.

So it regulates what donations they can receive.  They are receiving them, in the way I have sought to lineate, for the purposes of expenditure as electoral expenditure and/or on electoral matters, both of which have federal links.  It is thus directly operating on what actors within the federal electoral system, what those actors may receive in terms of donations, both in terms of what they may not receive and what they may receive for the purposes of being engaged in the federal electoral process.

KIEFEL CJ:   That is to say it is facilitating electoral expenditure, but it is not directly connected with the electoral process itself.  I suppose that depends on how you define “electoral process”.  But on one view, it is not related directly to the conduct of elections.  It is how candidates and parties can position themselves within the conduct of elections, is it not?  It is facilitating them, for the purpose of something which the Electoral Act otherwise will directly regulate.

MR KIRK:   Yes.  I think that is a fair characterisation, with respect, your Honour, yes.  Again, as your Honour indicated, as to whether that is within the electoral process or not ‑ ‑ ‑

KIEFEL CJ:   But it is not to do directly with the conduct of elections.

MR KIRK:   Not in the sense of who is on the ballot paper, how the votes are counted, what hours are the election and so forth.  But that would be a fairly jaundiced view of what the electoral process is about.  In our respectful submission “conduct of elections” is a much broader notion.  I mean, in the section 44 context, of course, this Court has said that the relevant process commences with nomination and finishes with the declaration.  Now, I am not saying that is directly relevant, but it is an illustration of how a broader notion of electoral process might well be justified.

KIEFEL CJ:   But with respect to the conduct of elections, what does section 302CA actually do?

MR KIRK:   It regulates the activities of persons ultimately involved in the conduct of elections, by way of being candidates or by endorsing candidates, or by expending electoral expenditure or money on electoral matters, seeking to influence votes within the electoral process.  Ultimately, of course, this is very much about influencing choice within a section 7 and 24 notice, the notion – the direct choice by the people, it is about influencing choice. 

In Smith v Oldham, as I said again, the Commonwealth is going to deal with that aspect of it, but in Smith v Oldham, the Court recognised that bribery and intimidation of candidates, for example, is something long regulated as part of regulating the electoral process and this is somewhat similar, we would put it.

KIEFEL CJ:   You are putting that forward as a purpose of section 302CA?

MR KIRK:   Not to regulate bribery, but to regulate the receipt and expenditure of money by participants in the federal electoral process.  That is its legal operation, and then a purpose of that ‑ ‑ ‑

GAGELER J:   Let us break that down, Mr Kirk.  This applies to any gift to a political party, where the gift might possibly be used for the purpose of federal electoral expenditure.  I think that is its legal operation.  Is that correct?

MR KIRK:   As opposed to State or Territory electoral expenditure, because if and when it is so used it falls outside the operation of 302CA.

GAGELER J:   So it is the bare possibility of the gift being used by the political party for Commonwealth electoral purposes. 

MR KIRK:   Yes.

GAGELER J:   Yes.

MR KIRK:   Yes.  A key part of the State’s argument is to say – they say that there should be a sole characterisation test applied here because they say, in their alternative arguments, an exclusive power and they say the dominant character of 302CA is that of a law with respect to State elections.  See their primary submissions at paragraph 103.  But that is not so for the reasons I have sought to articulate.  It is very much focused on federal actors and federal electoral expenditure or communicating electoral matter. 

KIEFEL CJ: On the other hand you said earlier that it was part of your argument that the purpose of section 302CA is to work with section 109.

MR KIRK:   Yes.

KIEFEL CJ:   And reduce the inconsistency. 

MR KIRK:   Yes.

KIEFEL CJ:   Is that another purpose or is that one of the purposes?

MR KIRK:   It is, in a sense, the other side of the coin because in doing what 302CA(1) does, creating the liberty, it is an express statement of the law goes thus far and no further and thus beyond this point you have freedom of action.  So it is still regulating federal actors for federal purposes, but saying you have to do X, Y and Z within this division, beyond that you are free. 

KIEFEL CJ:   It is an interesting counterpoint to the State - New South Wales and Queensland provisions if one has regard to purpose because one can readily see that the purpose of those laws in the prohibition is to protect the electoral process itself and so held by this Court to be valid on that account.  But if one is looking for a purpose with respect to section 302CA, the highest you can put it is an area of immunity for donors and donees.

MR KIRK:   But when New South Wales and Queensland banned, for example, property developments or when they – when New South Wales caps donations, Queensland does not, what those laws are doing are saying thus far and no further.  So you can donate in New South Wales, I forget what the limit is, but $2,000 or something, but not beyond that per annum.  If you are a property developer, or in New South Wales a tobacco company or a liquor or gaming company you cannot donate, but other companies can.  So BHP can and Woolworths can and so forth.  Thus far and no further, and that reflects the policy choice of those Parliaments because ‑ ‑ ‑

KIEFEL CJ:   Well, probably a deeper concern with respect to activities, which are much closer to them at both local government and Executive Government level than they are for the Commonwealth Government. 

MR KIRK:   So they have – well, indeed, your Honour and so a policy judgment has been made by those Parliaments that the risks there, and obviously we are attacking the Queensland one, but leave that aside for the moment, the risks there are too great for us so we regulate it.  The Commonwealth has made a contrary judgment, so not only can BHP and Woolworths make donations, as they can in New South Wales or Queensland, but so too can companies associated with Mr Spence, for example, and that is reflecting its own assessment – the Commonwealth’s own assessment of the risks to the integrity of the Commonwealth process and it has made a judgment that those risks warrant ruling out foreign donations and limiting anonymous donations but not prohibiting property developer donations. 

GORDON J:   They took the view that there were other provisions dealing with disclosure of donations and then disclosure of expenditure as the mechanisms for dealing with them.  It is a different structure.

MR KIRK:   Indeed.

KIEFEL CJ:   But if that had been the Commonwealth’s concern, could it not have done so rather more simply by saying that it preserves to itself simply the field of donations for federal electoral purposes?

MR KIRK:   That is a - do not ask me to defend Commonwealth drafting in all its aspects, your Honour. 

KIEFEL CJ:   Well, it is not drafting, it is a policy decision, as you say.  It is looking for that middle.

MR KIRK:   But that is the policy maintained here, save that yes, the Commonwealth has regulated not only donations for federal electoral purposes but also the unallocated middle, just as Queensland does.  As I have acknowledged, both have a legitimate interest in regulating the unallocated middle but, pursuant to 109, if both do the Commonwealth is entitled to take precedence because when - if BHP gives a donation to the LNP – I should not focus on a particular company – company X gives a donation to the LNP in Queensland, then if it does not say for what purpose then it is entirely legitimate for the Federal Parliament to say well, insofar as that is going to be – it is unallocated, it can be used for federal purposes, and so it is subject to federal regulation.  But if it is directed off voluntarily to State or Territory electoral purposes, then we remove ourselves from the field.  That is what 302CA does.

EDELMAN J:   Does it go beyond the unallocated middle in, for example, a mixed fund?

MR KIRK:   Can I deal with that.  I was going to come to that.  I will deal with that now, if I may.

GORDON J:   While you are finding your spot, I assume that this will also address the note which is set out at the foot of subsection (3) which seems to identify this temporal issue?

MR KIRK:   Yes.  The issue of the unallocated middle – Queensland makes the argument – and it comes up in a couple of places in their submissions, including in relation to Melbourne Corporation – that 302CA makes compliance with State law voluntary and interferes with gifts actually used in State elections – see, for example, paragraph 111 of their submissions.

The nub of the point seems to be that, say, a party may keep unallocated amounts in a mixed account and end up spending it on State elections for State purposes without ever having kept or identified it separately for the purposes of State law.  So Queensland argues that as a matter of construction you can circumvent the whole State regime by just sticking it in a mixed account and then spending it on, say, State elections and you do not fall within 302CA.  Our submission is that the very fact of expending it on State elections means that the spender, the recipient, will have identified it as being used for State electoral purposes.

EDELMAN J:   What is the “it” in a mixed fund?  Is it any dollar that is spent from that mixed fund, no matter how little the amount that is contributed by the donor?

MR KIRK:   There is always, as your Honour well appreciates, a potential tracing type issue from mixed accounts, but under the way both the federal and the State schemes work is that in the end, because of disclosure provisions, you need to indicate money in and money out.  So, whilst the particular set of dollars from a mixed account obviously is all mixed up in a fund, there needs to be delineation of well, in the end we received money here, we received for this election campaign $3.5 million and we spent $3.4 million and here are the accounts which show it.  So there needs to be an allocation even from a mixed account.

As to the construction argument, I think Queensland’s argument is that in such an instance where you just spend it from a mixed account it has not been kept separately, but it will have been identified.  So if your Honours go to 3(b)(ii), if it is spent in such a way, the gift recipient, by the very expenditure, will have identified the gift as being used for a State or Territory electoral purpose, and that ties with what I just said to your Honour Justice Edelman as well.  That that is so is confirmed actually by the note in the example.

GORDON J:   Is it?  That is my question.

MR KIRK:   We respectfully submit it is.

GORDON J:   The reason I ask is at what point does 275 of the Queensland Act bite, given the way in which it is expressed, which I assume is what the note is addressed to?

MR KIRK:   Yes.  To answer your Honour’s second question, 275 bites most pertinently at the point of acceptance.  So 275(3):

It is unlawful for a person to accept a political donation that was made . . . by or on behalf of a prohibited donor.

KIEFEL CJ:   But you will not know that until it is used, will you, the point of use?

MR KIRK:   That raises a temporal issue and a construction issue.  The construction which the Commonwealth appears to have intended by its note and example is that if you then so use it 302CA(3)(b)(ii) relevantly, in effect rolls back the operation of federal law, leaving in place the State or Territory electoral law, and as the note says, in the second sentence:

A person who gives, receives or retains a gift . . . in contravention of a State or Territory electoral law may be liable to a penalty under the State or Territory electoral law.

Now that is to, in effect, give some retroactive operation, albeit prospectively, in the sense that 302CA(3) is applied prospectively, but it can have a retroactive operation if the note is right.

KEANE J:   But the note says:

A person who gives, receives or retains a gift that is used for a . . . purpose in contravention of a –

State law.  The State law in question is contravened when there is a giving and receipt by an entity of a particular description.  Does 302CA somehow retrospectively, in either subsection (1) or subsection 3(b)(ii), does it somehow retrospectively make the donor guilty of an offence when the donor has done nothing other than make the gift that 302CA(1) purports to make lawful?

MR KIRK:   It would only be an offence if it was an offence pursuant to State law to begin with, save for the operation of 302CA.  So, yes, it is within the – it has be within the realm of the operation of 275.  If your Honours look at the example given, it does appear to contemplate that not just the use, but the giving and the receipt and retention must comply with the State or Territory electoral law.  It is that operation, that rolling back of the federal law, which leads rise to the Metwally issue, because ‑ ‑ ‑

KEANE J:   So the rolling back, there is a retrospective rolling back?

MR KIRK:   Well, I will come to that when I deal with the Metwally argument.

KEANE J:  And a retrospective offence committed.

MR KIRK:   There is certainly – sorry.

KEANE J:   By someone who did not commit an offence when he made the gift.

MR KIRK:   It would have been an offence but for 302CA, under State law.  So it is then that the 109 operation of the Commonwealth law no longer applies in that circumstance.

NETTLE J:   If the offence is not committed until then that is the final element of it, is it not, that is to say, the immunity is lifted at that point and thus the final element of the offence is created.

MR KIRK:   There are a couple of ways of reading this.  That is one way of reading it.  Another way is the way your Honour Justice Keane has put it, namely that it goes right back to the beginning, or simply that henceforth the State laws apply.

NETTLE J:   Why would it be anything other than henceforth?  That is the way it reads.  It is immune until and unless the thing is used for stated purposes, and then it ceases to be immune.

MR KIRK:   Yes.  It is, with respect, not pellucidly clear drafting, but that is certainly one construction.  Since we are focusing on this, can I make now an argument that we make for Metwally purposes?  If there is a Metwally problem, and we submit that there is not, and the Commonwealth submits Metwally should be overturned anyway, but if there is a Metwally problem, all of that can be avoided by reading down of (3)(b)(ii) and/or severing of (3)(b)(ii).  The reading down, there are – and it depends a bit on which construction is adopted first.

On the construction your Honour Justice Nettle has mentioned to me, there may actually be no need for any further reading down because it is only applying henceforth, so there is no retroactive operation.  If the construction your Honour Justice Keane put to me applies, then either one could go for that construction, or there is another possible construction which is that in (3)(b)(ii), the reference to keeping or identifying requires some choice by the recipient as at the time of receipt, but overall the preferable construction may in fact be the one raised by your Honour Justice Nettle because it is ‑ ‑ ‑

NETTLE J:   Your last proposition would be contrary to the note, would it not?

MR KIRK:   Yes.

NETTLE J:   Particularly the example.

MR KIRK:   It would be contrary to the note, that is true. 

NETTLE J:   And, therefore, an unlikely construction.

MR KIRK:   No, because we are only in this territory – remembering I am foreshadowing a Metwally answer.  We are only in this territory if there is a Metwally problem.  But that Metwally problem leads to invalidity – that, itself, being an argument addressed by the Commonwealth that it does not.

GORDON J:   For my part, I am not really interested in the Metwally problem.  I am interested in the question of construction – which is where we are starting, are we not?  We are trying to work out how it is that 302CA – in particular (3)(b)(ii), works.

MR KIRK:   Can I just finish with the Metwally point and then come back to that if I may?  In that circumstance, 15A of the Acts Interpretation Act applies to allow reading down.  So, yes, it is contrary to the note in the example but 15A gives licence for reading down in those circumstances.  Alternatively, it could ultimately be severed.

To come back to the point raised by your Honour Justice Gordon, it is not pellucidly clear drafting.  There is an intent manifest in the note and the example to capture the circumstance and allow operation to State and Territory law where, having been kept in, for example, a mixed account, it is identified as going off to the State or Territory level of expenditure.

GORDON J:   So, the fact that it is set out in the note, as I understand it, is a circumstance where you have a payment to an entity which is what you described as the unallocated middle and at a subsequent point someone determines that it should be used for State purposes.

MR KIRK:   Yes. 

GORDON J:   That is what we are dealing with.

MR KIRK:   Yes.  So, that raises ‑ ‑ ‑

GORDON J:   Then the question which arises is the rolling back of the federal law - is your submission.  The next question is what is the effect of that rolling back consistent with the way in which 275, which is the provision which we have to look at in the Queensland Act, works - is the giver in breach in contravening the provision from the beginning, which is the creation of the problem identified by Justice Keane – or is it to be something where the offence is only created at the time when the decision is made?

MR KIRK:   I confess that we had read it in the first way your Honour articulated which was the way your Honour Justice Keane put it to me.

GORDON J:   That is, at the time that the gift is given ‑ ‑ ‑

MR KIRK:   Yes, that it has a retroactive operation – hence, the argument about Metwally and so forth.  As I said, it is not pellucidly clear drafting and I accept – I very much accept – that the alternative construction is open, as raised with me by your Honour Justice Nettle.

KEANE J:   Mr Kirk, it does not seem to be a question of – or an answer – that it is not pellucidly clear drafting.  It does seem to be a deliberate policy choice.  If one looks at 302CA(1), the problem arises because of 302CA(1)(e):

the gift, or part of the gift, is required to be, or may be, used –

If one compares that with 314B – which is the other provision you mentioned dealing with the relationship with State and Territory laws – in 314B(1)(c)(i):

the amount is required to be used –

So, in that provision, there is no reference to “or may be”.

MR KIRK:   Yes. 

KEANE J:   So, is there an intelligible policy difference between what 314B is dealing with and what 302CA(1) is dealing with because the problem we are dealing with now is a problem that is avoided in 314B?

MR KIRK: Yes. It reflects different policy choices. Section 314B – dealing with disclosure – that is at page 213 of the joint book – there disclosure is not required.

GORDON J:   Is it not because it has not been determined and that is why it is picked up in subsection (2)?

MR KIRK:   Yes, sorry, your Honour is right.  That is precisely why because at some point it can be held in the unallocated middle, as I have called it, for a while but in the end it is going to go to one or other stream and when it goes to one or other stream ‑ ‑ ‑

KEANE J:   Then you disclose.

MR KIRK:   You disclose.  So that is the reason for the different policy choice.  Then to come back to 302CA(3) ‑ ‑ ‑

KIEFEL CJ:   The temporal point is use, is it not?

MR KIRK:   Sorry, your Honour.

KIEFEL CJ:   The temporal point, which affects the Queensland law, is the point of use.

MR KIRK:   That is certainly an open construction and on that construction I note the whole Metwally point falls away because as a matter of construction there is no retroactive operation given or allowed, I should say, to the State law.  It is simply thenceforth the State law applies.

KIEFEL CJ:   But you might have a larger Melbourne Corporation problem.

MR KIRK:   I will see when I get to it. 

KIEFEL CJ:   When you reflect upon it.

MR KIRK:   I might move on, if I may, your Honours, because I only have so much time.  There is an argument put by Victoria, if I can seek to deal with that very briefly, where Victoria argues by reference to the Second Uniform Tax Case that the purpose of 302CA is to make it more difficult for the States to regulate political donations to candidates or parties fielding candidates in a State election.  This takes it beyond the incidental area of power. 

The Second Uniform Tax Case, a 4-3 decision itself, not without controversy, related to the – where both – the view the majority, sorry, the view the whole Court took was that the power to tax was a concurrent and parallel one.  It did not enable per se the Commonwealth to exclude the States from exercising their taxation power.  The provision in question, this was about income tax, required taxpayers to pay federal income tax before State income tax and that is what the Court held invalid 4-3.  Chief Justice Dixon took the view that the purpose of the law was to make it more difficult for the States to impose an income tax and Victoria says it is the same here.

In our respectful submission, that conflates purpose with possible effect. It is entirely orthodox to have some delineation of where and when the Commonwealth law trumps State law, that is what section 109‑type provisions do. Any effect on State regulation here is a result of the fact that, first, parties commonly operate at both levels and other entities; secondly, there is this issue of both sides having an interest in the unallocated middle but, ultimately, this is not like taxation where you can have dual taxation, if there is a set of restrictive, ultimately, criminal laws, in the absence – unless the Commonwealth says there can be concurrent operation, it is open to the Commonwealth to say this far and no further and that is what the Commonwealth has done.

It is notable, by the way, that in the Second Uniform Tax Case, although the provision about the taxpayer having to give priority to the Commonwealth tax was held invalid 4-3, section 221B of the relevant legislation giving the Commonwealth priority in bankruptcy or liquidation was upheld because there you need an answer.  They cannot both have number one priority, there needs to be an answer.  Here it is open for the Commonwealth to say this is the answer in relation to actors in the federal sphere and actual or potential federal donations, this is the law that applies.  So, it is not like the Second Uniform Tax Case.

GAGELER J:   Mr Kirk, do you have the case to hand?

MR KIRK:   If your Honours give me a moment.  Does your Honour have the volume it is in?  Actually, I have it.  It is all right, sorry.

GAGELER J:   It is 99 CLR.

MR KIRK:   It is in volume 13, tab 75, yes, your Honour.

GAGELER J:   Page 615 of the report.

MR KIRK:   Yes.

GAGELER J:   Sir Owen Dixon gives a number of analogies.

MR KIRK:   Yes, telephone bills.

GAGELER J:   I wonder - this is a poor analogy, but would it be analogous to take the position a Commonwealth law that conferred an immunity from any State prohibition on the recipient of a gift that might be used to pay a telephone bill?

MR KIRK:   Well, no, we would not accept that analogy, your Honour, because remember that the gifts in question are to, to use an umbrella term, federal actors; actors in the federal electoral system.  So they are already in the sphere, and they are receiving a donation.  It is just that the donation, relevantly, is not specifically delineated by the giver as being, “You can only use this for federal purposes”.  But they are in a federal sphere already.  And so our core submission, relevantly, is it is open for the Commonwealth to regulate that sphere.  Even if the particular donation given by company X just says, “Liberal National Party, we believe in your principles.  Here is $1,000”.

KIEFEL CJ:   You say “regulate the sphere”.  That covers a multitude of sins really, does it not?  What does it actually do?  It allows people to receive money.

MR KIRK:   Yes.

KIEFEL CJ:   Not necessarily for federal election purposes.  It allows people to receive money. 

MR KIRK:   It allows actors ‑ ‑ ‑

KIEFEL CJ:   That is regulation?

MR KIRK:   That is just a manifestation of the Commonwealth saying, as it commonly does, and can, “This far and no further”, that the regulatory scheme goes this far and no further.

KIEFEL CJ:   You mean the State’s regulatory scheme goes this far and no further?  That is what it is directed at, is it not?

MR KIRK:   But any regulatory scheme.  So it is saying - it is manifesting a Commonwealth policy that for actors within the federal sphere, to use the umbrella term, those actors are permitted to receive donations from, inter alia, property developers, tobacco companies, and so forth, because the Commonwealth’s policy is that such donations are acceptable, that such donations implicitly do not constitute a threat to the actual or perceived integrity of the federal system.

KIEFEL CJ:   I understand your argument about the policy choice.

MR KIRK:   Just as it would be open for the Commonwealth to take the contrary view, if the Commonwealth can prohibit donations from property developers - and there is no reason to think it cannot - it can also permit them.

KIEFEL CJ:   For federal electoral purposes, or any purpose?

MR KIRK:   For actors within the federal electoral sphere, for use ultimately for federal electoral purposes.

KIEFEL CJ:   But the use does not really matter.  Not on this drafting, it does not matter.

MR KIRK:   But ultimately if it is used for State or Territory electoral purposes, so if the LNP, for example, directs it off to Queensland purposes or local government purposes, then it falls back into the operation of State or Territory law.

BELL J:   And when it falls back into that operation, if it be that the wind‑back occurs at the point of identification, namely, use, where does 275 in any of the subsections bite?  This is if you do not accept Justice Keane’s construction.

MR KIRK:   Yes.

BELL J:   The property developer who has made the political donation is unaffected.  The person who has solicited the donation is unaffected.  The person who has accepted the donation is unaffected.

MR KIRK:   I have to accept your Honour is right about that.  For this Queensland law, it would not apply on that construction, as opposed to the construction Justice Keane was putting to me. That is true.  Self‑evidently, another State law might prohibit use of such donations because you have got the steps – solicitation, giving, receiving, retaining, use.  But 275 is not directed expressly to use.

Can I then turn to the next part of our argument, which is that the – so, here I am moving, for the purposes of the next part of the argument, from a defence of 302CA -I am going to come back to further aspects of the defence to 302CA - but deal with our attack on the Queensland provisions.  So leave aside 302CA and what the Commonwealth has actually done.

Now, there are two variants in this argument, broadly speaking, between ourselves and the Commonwealth.  The Commonwealth picks up Smith v Oldham and talks about the power to regulate federal elections broadly being an exclusive power, and I will leave the Commonwealth to develop that argument by reference to Smith v Oldham, and nothing I say seeks to undermine that argument.

We seek to put a different and, in many respects, narrower argument, namely, that the Queensland law intrudes on a Melbourne Corporation‑type implication protecting the Commonwealth.  One can describe that as leading to exclusive power in the sense that it is again a label of conclusion that, because the States cannot infringe this principle, that leads to exclusive power.  But it is a narrower version of the argument.  There are two steps I need to make out for the argument.  First, that there is such a principle protecting the Commonwealth - Queensland, at least in its primary submissions, disputes that point - and secondly, seeking to show that it is infringed.  So can I seek to deal with those in turn.

Can I make clear in relation to the existence of the principle that though no doubt there are some overlaps, we are not seeking to rely on a Cigamatic‑ type argument because Cigamatic is focused on the extent to which the States can regulate Commonwealth executive action – defence personnel driving along the road, for example.  It is not that type of issue because here the Queensland laws regulate third party conduct.  Rather, we are very much relying on a converse principle of the so‑called Melbourne Corporation principle. 

Can I start by taking your Honours to Melbourne Corporation (1947) CLR 31, which is in joint bundle 7, tab 47. Can I just pull out – and I am seeking to be fairly quick, if you will forgive me – some statements by members of the court, starting with Chief Justice Latham at page 55 of the report, which is 2902 of the volume. I recognise of course that there are differences of approach here. Chief Justice Latham took more of a characterisation approach than Justice Dixon. But if your Honours look at 55 at about point 7:

But this principle does not mean that the States are in the position of subjects of the Commonwealth . The Constitution is based upon and provides for the continued co‑existence of Commonwealth and States as separate Governments, each independent of the other within its own sphere. The Engineers’ Case recognizes, in the case of State legislation, a difference between “provisions which apply generally to the whole community without discrimination” and “an act of the State legislature discriminating against Commonwealth officers.”

So his Honour was recognising that there is a correlative principle here about continued existence of both levels of government.  Without going to it, his Honour also expanded on that at page 61.  Justice Starke, at page 74 at about point 5, at the beginning of the paragraph, said:

So we may start from the proposition that neither federal nor State governments may destroy the other nor curtail in any substantial manner the exercise of its powers or “obviously interfere with one another’s operations”

So again manifesting a correlative principle.  Again, can I refer your Honours to Justice Starke earlier at page 70 without going to it.  Also page 75 actually, I will go to that, at about eight lines down:

It is a practical question, whether legislation or executive action thereunder on the part of a Commonwealth or of a State destroys, curtails or interferes with the operations of the other –

et cetera, and the next sentence as well.  So his Honour was implicitly recognising a mutual principle.  Then Justice Dixon at page 82, near the top of the page, the third line – I think his Honour may have been referring to American and Canadian constitutions, but the point is of broader significance:

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

So both levels.  Then at the bottom of the page, the last six lines through to nine lines in, so up to where it says “Dixon J” on the next page.

KIEFEL CJ:   Is his Honour not identifying that there is a difference at the foot of 82?

MR KIRK:   Yes, but if your Honour then reads on:

These two considerations add great strength –

So, if anything, his Honour did see a difference but saw that as giving greater strength to the implication protecting the Commonwealth by way of its predominate position compared to the States because the States – let me start that again.  The Commonwealth have enumerated powers which the States were to be subjective to the exercise of, whereas there is no exact correlative the other way.  That was said in Melbourne Corporation itself.  Then if I could take your Honours to Residential Tenancies Tribunal, which is in joint book 11 at tab 62, this of course was dealing with a Cigamatic‑type argument, but a number of the justices discussed the issue in part.  If I could start with the plurality at page 443 and ask your Honours to read the middle paragraph beginning, “When Dixon CJ spoke of general laws”, to the end of that paragraph. 

Now, their Honours were focusing in on the more the Cigamatic‑type issue about effect on executive capacities, but were doing so by reference to and informed by cases relating to the so‑called Melbourne Corporation principle insofar as it protects the States.  So implicit within that an acceptance, we would submit, that a correlative principle applies; then within his Honour Justice McHugh’s judgment at page 457 to 458, so the last three lines of 457 and the first seven lines of 458.

For completeness, without going to it, Justice Dixon in West at the relevant passage, was talking about discriminatory State laws – sorry, State taxes being invalid.  So, that is supportive of the principle we advocate.  Then within Justice Kirby’s judgment at page 507 to 508, I should note strictly speaking Justice Kirby was dissenting, but that is because his Honour took a different view as to a 109 question, not relevantly, if your Honour looks to where it says “Conclusion” on 507 through to about the first seven lines of 508.  So that is squarely supportive. 

In Victoria’s submissions, without going to it, but I note at footnote 20 of Victoria’s submissions they refer to a couple of other authorities which also give support to the principle.  One of the ones they refer to is Commonwealth v Western Australia (1999) 196 CLR 392 at paragraph 122. It is not in the joint bundle, but I note that in that paragraph, his Honour Justice Gummow referred, amongst other things, approvingly to this passage by Justice Kirby. Against the submission we seek to put, if your Honours go to Chief Justice Brennan at page 425, so under the quote, beginning:

The Melbourne Corporation principle could have no application –

Then after the quote from Justice Mason in QEC at 426, his Honour says:

This principle is irrelevant to the scope of any State legislative power. 

So we accept that that is against us but, with respect, the Honourable Chief Justice did not seek to grapple with the issues we are now raising in depth because it was not really an issue; it was just part of the reasoning for a Cigamatic‑type point.  The point we are not seeking to raise, namely, that a Melbourne Corporation principle applies to protect the Commonwealth, was not at issue in that case.

NETTLE J: Mr Kirk, assuming it does, how does it avail you more than having co‑ordinate power with respect to the undifferentiated middle in section 109?

MR KIRK:   Can I come back to that, because that might be called the minor premise.  Can I just finish dealing with the major premise?

NETTLE J:   Certainly.

MR KIRK:   But I obviously need to make good that line of premise and I will seek to do so, your Honour, if I may.  In relation to the major premise, we note in our written submissions -I will give your Honours the quote – Professor Zines in his book regarded it as quite clear that:

any implied limitations on Commonwealth power to affect the States will, generally speaking, apply to restrict State power to affect the Commonwealth.

That is actually in the materials.  Without going to it, joint bundle 14, tab 93, page 5891.  Professor Zines explained that that was so because the basis of Melbourne Corporation is the concept of federalism:

federalism “is necessarily a dual system” –

involving:

separately organised and independent Commonwealth and State governmental systems.

GORDON J:   What paragraph of the book is that?

MR KIRK:   Sorry, your Honour, we give the reference at our primary submissions, paragraph 56, page ‑ ‑ ‑

GORDON J:   I can look it up, Mr Kirk, it is fine.

MR KIRK:   Footnote 59.  As to what the principle would be, in our written submissions we have quoted a recent statement of it at paragraph 56 on page 16 of our submissions from the plurality in Austin v The Commonwealth.  We would respectfully submit that captures the same principle that would apply to protect the Commonwealth, but obviously inserting the words “the Commonwealth” where it refers to the States and so both aspects of - or what have been identified as both aspects of the Melbourne Corporation principle, namely, discriminatory laws and laws curtailing the capacity to function as governments, are captured by the principle.

In its submissions in‑chief, still dealing with the major premise, Queensland says such a principle is not a necessary implication, because the Commonwealth can protect itself by legislation aided by section 109, and so too South Australia at paragraph 27. We seek to answer that as follows. The immunity arises logically prior to any exercise of Commonwealth power because it is protective of the Commonwealth. It restricts the States before one gets to requiring any exercise of Commonwealth power.

KIEFEL CJ:   That does not answer whether it is necessary.

MR KIRK:   That then leads to some practical points.  The ability of the Commonwealth to pass legislation through both Houses of Parliament is never guaranteed.  That is especially so in circumstances of political controversy where such Commonwealth/States disputes may well involve political controversy.  There may also be temporal issues insofar as if, for example – I think the Commonwealth makes this point – a State legislated in relation to this sort of topic shortly before a Commonwealth election or by‑election, it may not be practical to have some legislative response.   Furthermore, of course, the argument put by Queensland and South Australia is inconsistent with the statements I have gone to, save for Chief Justice Brennan in the cases I have referred to.  So that deals with the major premise.

Can I then seek to come to dealing with why the principle is infringed.  It comes back to what I put earlier.  The Queensland laws do not regulate just donations for State or Territory electoral purposes.  They do not regulate just the unallocated middle.  They regulate donations expressly for, that is, expressed to be by the giver for federal electoral purposes. 

So if company X donates $1,000 to the LNP or the ALP and says, “I require you to spend this only on the forthcoming federal election” that will still be captured by 275, a matter centrally, uniquely, the concern of the Commonwealth.  That infringes the principle, in our respectful submission.  It does so because it interferes in the federal electoral process where the federal electoral process – we actually would agree in substance with what Queensland said at paragraph 95 of its primary submissions, namely:

it is a defining feature of a self‑governing, democratic polity that it has the power to regulate the conduct of its elections to ensure that the governed have a fair opportunity to select who is to govern them.

So, where it seeks to regulate the whole spectrum, so long as one object of, in particular, parties is election to the Legislative Assembly or the local council where in practice that captures every significant political party in Queensland, that goes beyond its legitimate area of concern and intrudes directly into the unique matters of concern to the Commonwealth.  It reaches too far.

KIEFEL CJ: Why is not section 109 the answer, apart from pointing out that the immunity arises at an earlier point?

MR KIRK:   Well, I have sought to answer that as best I may by making the point that it arises logically prior, there may be difficulties getting through Parliament, there may be temporal issues ‑ ‑ ‑

NETTLE J:   There might be, but they do not arise here, do they?  You have your legislation.  It is up and running.  The contest is whether it is any good.

MR KIRK:   Well, there is a contest both ways.  Section 302CA is challenged and obviously it might be held by your Honours to be invalid.  We still say – actually it is quite a good example, in a way.  Even if 302CA is valid where we have, what, two more sitting days or whatever it is until a federal election, the immunity applies to protect operators for the forthcoming federal election.

GAGELER J:   Is that all on that point?

MR KIRK:   In relation to the immunity, sorry, your Honour, I will just quickly review my notes, if I may.  Can I just make an answer to one argument put by Victoria?  Victoria says in its submissions at 40 to 41 that:

The most that could be said is that the donation provisions might reduce the amount of money available for use by political parties and candidates in a federal election. 

That interference may be significant.  It may preclude some parties or interests from standing or pursuing their interests effectively.  We would note that in applying the Melbourne Corporation principle in Re Australian Education Union, this Court unanimously identified that setting the terms and conditions of employment of those engaged at high levels of government went beyond federal power as undue interference in functioning as governments, regardless if it was a minor regulation of judges or politicians or senior public servants, so, per se breach. 

In Austin v The Commonwealth and Clarke v Commissioner of Taxation, this Court accepted that in relation to taxation of super entitlements of such senior persons – judges and politicians – again, even though it was just taxation of a portion of income, there was an infringement, and so too here.  Victoria also says:

it is within the power of political parties . . . to avoid the operation of those provisions by re‑ordering their affairs.

See paragraph 41 of their submissions.  Queensland makes a similar point.  Victoria says:

A party could, for example, establish branches that are not registered under the Qld Electoral Act, so that those branches, and their candidates . . . will not be subject to the Qld Electoral Act. 

First, in fact, Queensland Act applies even to unregistered parties, as I said earlier.  It might of course be possible to establish some new set of parties which do not have objects of electing to local councils or Legislative Assembly.  To do so would be a significant exercise of reorganisation by every significant political party in Queensland.  It is also a little meaningless in a sense where many, if not most, parties are unincorporated associations.  They are groups of people gathered together for a common political purpose.  They are not different little incorporated entities.

Insofar as it involves establishing new parties without current members, you would need to move the 500‑member rule under both laws.  It does not change the effect of the law, nor its practical operation, including with regard to the forthcoming federal election.  So that is not an answer, in our respectful submission.  That is it, your Honour Justice Gageler.

GAGELER J:   I will not provoke you to more.

MR KIRK:   Is that a convenient time, your Honour?

KIEFEL CJ:   Yes, thank you.  The Court will adjourn to 9.30 am tomorrow for the pronouncement of orders, and otherwise to 10.00 am.

AT 4.16 PM THE MATTER WAS ADJOURNED
UNTIL WEDNESDAY, 13 MARCH 2019