State of New South Wales & Ors v Commonwealth of Australia
[2006] HCATrans 216
[2006] HCATrans 216
IN THE HIGH COURT OF AUSTRALIA
Office of the Registry
Sydney No S592 of 2005
B e t w e e n -
STATE OF NEW SOUTH WALES
Plaintiff
and
COMMONWEALTH OF AUSTRALIA
Defendant
Office of the Registry
Perth No P66 of 2005
B e t w e e n -
STATE OF WESTERN AUSTRALIA
Plaintiff
and
COMMONWEALTH OF AUSTRALIA
Defendant
Office of the Registry
Adelaide No A3 of 2006
B e t w e e n -
STATE OF SOUTH AUSTRALIA
Plaintiff
and
COMMONWEALTH OF AUSTRALIA
Defendant
Office of the Registry
Brisbane No B5 of 2006
B e t w e e n -
STATE OF QUEENSLAND
Plaintiff
and
COMMONWEALTH OF AUSTRALIA
Defendant
Office of the Registry
Brisbane No B6 of 2006
B e t w e e n -
AUSTRALIAN WORKERS UNION
First Plaintiff
AUSTRALIAN WORKERS UNION OF EMPLOYEES QUEENSLAND
Second Plaintiff
and
COMMONWEALTH OF AUSTRALIA
Defendant
Office of the Registry
Sydney No S50 of 2006
B e t w e e n -
UNIONS NSW AND QUEENSLAND COUNCIL OF UNIONS
First Plaintiffs
PUBLIC SERVICE ASSOCIATION AND PROFESSIONAL OFFICERS’ ASSOCIATION AMALGAMATED UNION OF NEW SOUTH WALES AND NEW SOUTH WALES LOCAL GOVERNMENT, CLERICAL, ADMINISTRATIVE, ENERGY, AIRLINES & UTILITIES UNION AND ELECTRICAL TRADES UNION OF AUSTRALIA, NEW SOUTH WALES BRANCH AND NATIONAL UNION OF WORKERS, NEW SOUTH WALES BRANCH AND NEW SOUTH WALES TEACHERS FEDERATION AND QUEENSLAND TEACHERS UNION OF EMPLOYEES AND COMMUNICATIONS, ELECTRICAL, ELECTRONIC, ENERGY, INFORMATION, POSTAL, PLUMBING AND ALLIED SERVICES UNION – QUEENSLAND BRANCH (CEPU ELECTRICAL DIVISION)
Second Plaintiffs
and
COMMONWEALTH OF AUSTRALIA
Defendant
Office of the Registry
Melbourne No M21 of 2006
B e t w e e n -
STATE OF VICTORIA
Plaintiff
and
COMMONWEALTH OF AUSTRALIA
Defendant
GLEESON CJ
GUMMOW J
KIRBY J
HAYNE J
CALLINAN J
HEYDON J
CRENNAN J
TRANSCRIPT OF PROCEEDINGS
AT CANBERRA ON FRIDAY, 5 MAY 2006, AT 10.01 AM
(Continued from 4/5/06)
Copyright in the High Court of Australia
__________________
GLEESON CJ: Yes, Mr Walker.
MR WALKER: May it please the Court. Yesterday, the Chief Justice asked me how did 51(xx) arise in the Bank Nationalisation Case 76 CLR. Perhaps the most convenient way of giving references to that is to three illustrations from Dr Evatt’s argument, upon which I will not dwell nor will I go to them. The references are at 49 point 7, 61 point 3 and 61 point 6. In short, there was reliance among all the other grounds which were relied upon on section 51(xx) to support the legislation in its operation and there was, of course, contest about that. Sir Garfield Barwick’s argument is recorded at 7 point 3.
While, however, and not connected with that topic, on the Bank Nationalisation Case, could I remind your Honours of a reference I gave yesterday to the reasons of Justices Rich and Williams in a passage starting at page 255. That is where the assimilation or part or apparent assimilation of the position of foreign corporations to local trading and financial corporations for the purposes of understanding 51(xx) is addressed by their Honours and they use, as I drew to attention yesterday, the notion of them carrying on business. One finds, for example, that at about point 7 on the page – it is a very dense paragraph. The sentence starts, “The language of the placitum”, and it includes the expression:
subject to the performance of which, corporations of all kinds created beyond Australia and trading and financial corporations incorporated in Australia should be entitled to carry on business –
and then in the next sentence, I did not yesterday draw to attention but should in light of the questions raised with me about conditional prohibition, their Honours go on to deal with a contention that:
the power was sufficiently wide to enable the Commonwealth Parliament to prohibit such corporations carrying on business at all in Australia.
That appears, following on from the earlier passage, to be a reference to both foreign and local corporations. Their Honours respond to that:
But the power operates on such corporations as existing entities –
an expression which captures to some measure the notion of the given quality of the constitutional description upon which I addressed yesterday, and their Honours go on:
we think that it would be inconsistent with a power to legislate depending on such a basis, particularly where corporations formed within the limits . . . to construe the power as wide enough to authorize the Commonwealth Parliament simply to prohibit one or more –
et cetera.
HAYNE J: Now, that, I think, is consistent with what you find in 1st edition Halsbury which gives as its root for the proposition that you cannot prohibit a foreign corporation comity of nations.
MR WALKER: Yes, but subject to the sovereignty of control. Now, the comity of nations, it has to be said at that time, included not merely a descriptive but to some extent an idealistic and normative position because there were countries which did not observe, to the extent considered desirable by some of those writers, that degree of comity.
GUMMOW J: This passage in the Banking Case reflects the idea that as between the States the corporations would be foreign corporations.
MR WALKER: I did not hear the last part of your sentence, your Honour.
GUMMOW J: It reflects the idea that as between the States, State‑formed corporations would be foreign corporations ‑ ‑ ‑
MR WALKER: Yes.
GUMMOW J: So it reflects that ‑ ‑ ‑
MR WALKER: Very much a mark of the time which has been – which is now anachronistic. On the other hand, with respect, entirely orthodox law at the time ‑ ‑ ‑
GUMMOW J: That perception reflects the Privy Council case referred to yesterday between Victoria and Western Australia – they were just treated as foreign corporations.
MR WALKER: Foreign territories, yes. As your Honour knows, there was a strand of thinking at the same time which raised the question whether there was a difference within the imperial family and between members of the imperial family and outside that group, but that had never been pushed to the extent of denying this notion of properly calling all such polities foreign to each other for the purposes not only of private internal law but to some measure in terms of public international law as well.
HAYNE J: But bound up with or commonly arising in connection with winding up.
MR WALKER: Yes.
HAYNE J: Can a Victorian court wind up an English chartered bank?
MR WALKER: It is not merely late 19th century or early 20th century conduct which shows that there was a very deliberate, very overt difference by one court to another, a court sitting in London, a court sitting in Adelaide or Victoria. The difference ‑ ‑ ‑
HAYNE J: Not so in Re Oriental Banking 10 VLR 154.
MR WALKER: The difference did not always work or was not always appreciated, but that was not simply an old‑fashioned matter.
GUMMOW J: But another thing that comes out of that passage in the Banking Case is that “formed within the limits of the Commonwealth” is a word of limitation. In other words, if you just said foreign corporations, it would have included everything. It would have included what we call foreign corporations and any corporation formed in any State. That is why they had to say “formed within the limits of the Commonwealth” and cut down that subclass in domestic situations.
MR WALKER: The federal council provisions ‑ ‑ ‑
GUMMOW J: They are about status.
MR WALKER: Yes, but they had already used different expressions for designating corporations formed in other colonies, and by that I mean Australasian colonies. With respect, if the word “foreign” had been used in an Australian Constitution, in our submission, it could not or would not have been interpreted so as to mean, for the purposes of national legislation, Australian corporations.
GUMMOW J: I agree, but then you have to come up against the reasoning of Justice Isaacs in Huddart, Parker which assimilates it back again.
MR WALKER: Now, your Honours, I would need to draw to attention the foot of 255 and the top of 256 in the reasons of Justices Rich and Williams and in particular your Honours will appreciate that we rely upon the way in which their Honours put it as persuasive of the kind of scope that ought to be afforded to the kind of conditions that might be imposed upon a conditional prohibition. One sees:
All that the Commonwealth Parliament could do would be to impose conditions appropriate to the carrying on –
et cetera. Now, it may be that that would raise the question as to how does that fit with what I will call an understanding of Murphyores which in turn would raise a question of exactly what is the degree of connection, if any, between the environmental regime imposed by condition in Murphyores and exporting.
HAYNE J: But it is also reflective of the idea you find in Huddart, Parker in Mr Justice Isaacs’ judgement that notions of personal law of a corporation are relevant – that is, personal law as spoken of by conflicts lawyers are relevant to questions of constitutional heads of power to pass legislation. Now, that it is a confluence of two radically separate thoughts.
MR WALKER: Yes, however it is clear that the Convention considered itself as helping to prepare a Constitution for adoption by the people which would, among other things, address how the new national Parliament was to be empowered to deal with those kinds of matters with, as it were, the sword of legislation as opposed to pre‑existing public or private international law.
GUMMOW J: Paragraph 302 of the 3rd edition of Westlake published in 1890, which seems to have been Justice Isaacs reading, says:
The English court will not interfere in the internal disputes of foreign corporations.
That thought from conflicts law seems to be the seed of Huddart, Parker.
MR WALKER: Yes, your Honour.
GUMMOW J: Translated across even into domestic situations in Australia with different State corporations.
MR WALKER: Yes. It remains for me to say in relation to the conditional prohibition question which was raised with me several times yesterday that it may be that with foreign corporations, depending upon the kind of condition in question, there would be other restrictions imposed upon the Commonwealth Parliament. One imagines, for example, in an attempt to regionalise foreign investment, a law which forbad foreign corporations of a particular kind, or a with a particular kind of enterprise, carrying on business in all but a particular State of Australia or carrying on business in any more than one particular State of Australia.
That might require to pass muster under section 92 if it was thought that the regionalisation was designed, for example, to protect the industries competing in that enterprise in a particular part of Australia from another part of Australia where foreign corporations were to be welcomed. That is an example, in our submission, of the need contextually to read the capacity to make laws with respect to foreign corporations which might include the conditional prohibition to which Justices Rich and Williams referred in the Bank Nationalisation Case, but contextually read so as to include, as appropriate, depending upon both the connective qualities and the substance of the conditions which might be imposed, to be run through the filter of provisions such as section 92.
HAYNE J: Can I just go back to this question of personal law and Westlake. Justice Isaacs referred to the 1905 edition at particularly 359 but at 358 to 359, Westlake says:
The regulation of any artificial person, in matters concerning only itself or the relations of its members, if any, to it and to one another must depend on the law from which it derives its existence. That law is its personal law . . . If in other countries it enters into relations with outside parties –
You can see where Justice Isaacs’ thought has been formed.
MR WALKER: Yes.
HAYNE J:
the first question to be asked is whether by the laws of those countries it is permitted to do so in its artificial character.
But non constat that making a contract with a worker is internal.
MR WALKER: Quite so, your Honour. That is not a passage upon which we could rely to say that the whole of the possibilities had been canvassed. They obviously had not in that passage and it is for the reasons I put yesterday, which I do not wish to repeat, that in drawing a line it ought to be located, as we submit clearly Justice Isaacs thought it should be located, by regarding employees, for all the reasons I put yesterday, as being the internal equipment of the corporation used for the purposes of carrying on the trade and not themselves the object or partners in trade of the corporation. They are, by representing the corporation, the corporation in trade with the other; they are not the other in trade with the corporation, but I do not wish to return to repeat what I put yesterday about that.
I said yesterday that our submissions also obviously derived support from the approach taken by Chief Justice Gibbs. The particular passage to illustrate that, that we would wish to take your Honours to, is in Fontana Films. It starts at 150 CLR at 181 – I am, of course, not going to read it all, your Honours are familiar with it. The passage continues over to the top of page 185. May I draw to attention not merely the way in which the passage in question starts by noting that:
The paragraph of the Constitution presents considerable difficulties in interpretation –
that is at point 7 on 181, but at 182 ‑ ‑ ‑
GUMMOW J: I am not convinced by what the Chief Justice says at the bottom of 181, actually, about aliens. There is a long tradition in English law that aliens could not own land.
MR WALKER: That, of course, could well be justified as an alienage‑related matter.
GUMMOW J: Well, it would be a special law.
MR WALKER: That is that local land should not be owned by people who do not owe loyalty. That might well be something which in the sense that the Chief Justice appears to be referring could legitimately be ‑ ‑ ‑
GUMMOW J: I just think it is a statement that would have profited by some further historical reflection.
MR WALKER: Certainly things have moved on somewhat ‑ ‑ ‑
GUMMOW J: No, historical reflection as to what had gone before.
MR WALKER: ‑ ‑ ‑ but they have also moved on thereafter. In our submission, the current position would not permit of simply saying – and we have addressed this in our written submissions – that under the power with respect to aliens there could be legislation to provide, as it were, an entirely universal complete code of conduct in all respects. That is yet to be tested.
On page 182, after referring to the argument of inconvenience, after referring to the textual reconciliation necessary with the other parts of section 51 and referring in particular to Mr Justice Menzies’ reasons in Strickland v Rocla, upon which we have relied in our written submissions, the Chief Justice turns at about point 6 to a passage upon which we particularly rely. His Honour said:
The authorities in which s. 51 (xx) has been considered are opposed to the view that a law comes within the power simply because it happens to apply to corporations of the kind described in that paragraph. The descriptive adjectives –
upon which I addressed yesterday –
“foreign”, “trading” and “financial” are important.
In our submission, nothing has changed and this Court ‑ ‑ ‑
GUMMOW J: There is another difficulty with this passage too. Of course, aliens are humans, natural persons with natural rights. Foreign corporations are not; they are fictional people. But why could you not have legislation – or perhaps there was legislation – restricting the ownership of land by foreign corporations?
MR WALKER: You could have. This passage is not a passage, in our submission, in which the Chief Justice – that is, the passage to which Justice Gummow has drawn attention, that is not a passage in which the Chief Justice was saying a law with respect to aliens could not include restrictions or prohibitions on land ownership. He is not saying that.
GUMMOW J: I am not talking about that. I am talking about his treatment of foreign corporations.
MR WALKER: Yes, and the answer to your Honour’s question is ‑ ‑ ‑
GUMMOW J: They being the artificial, as it were, the equivalents of natural persons for this consideration.
MR WALKER: Yes. Your Honours, so as I say, point 7 on page 182, we rely in particular upon the importance accorded by the Chief Justice to the descriptive adjectives. Yes, 51(xx) has to be construed (a) as a whole and (b) in context, but in doing so one pays regards to the words chosen, and we know chosen after considerable deliberation. In our submission, it is appropriate to give then the weight and substance as a matter of constitutional technique to those adjectives in the way the Chief Justice proceeds to do. At the foot of page 182, of course, that culminates to:
in the case of trading and financial corporations, laws which relate to their trading and financial activities will be within the power.
Of course, his Honour then makes clear that this does not mean that it is only the simple form of law such as section 52 of the Trade Practices Act illustrates which will be within power. There are, of course, all the other kinds with the relevant connections to the trading or what I would call constitutional characterising activities of the corporation dealt with by the Chief Justice on page 183 and particularly, of course, the passage at about point 3, the sentence:
But the conduct to which the law is directed is conduct designed to cause, and likely to cause, substantial loss or damage –
et cetera, leading to what might be called the Fontana Films phrase which your Honours have seen reproduced in section 496(2) of this Act in this case. There is a discussion at page 184 of business upon which we rely for the purposes that we put yesterday and at the foot of page 184, the top of 185 your Honours see the way in which the Chief Justice disregards for the purposes of the characterisation exercise in that case such difference as clearly does possibly exist between business and trade, capturing the notion that one must not be “narrow or pedantic”, to use Chief Justice Barwick’s words, which are then quoted on 185.
The last passage is to return to the foot of 182 and 183 with respect to the foreign corporations point. This is a refutation of an argument that your Honours appreciate from our written submissions might be attributed to Justices Mason and Deane in relation to the use of the adjectives that if trading and financial are used to designate a zone of legislative action, what does one do about the corresponding epithet for foreign corporations? The Chief Justice addresses that at the foot of 182 and the top of 183, including by reference, as his Honour says, ex hypothesi to the covering words of section 51, namely “for the peace, order, and good government of the Commonwealth”.
Of course, Chief Justice Gibbs was not putting that as if they are justiciable words, either directly or in any other way, but, in our submission, it supports the proposition that the fact that a foreign corporation wishes to enter into business or operations in Australia, or is already doing so, is the nexus that provides the touchstone of validity for the exercise of power under that part of 51(xx). This is not to deny extraterritoriality, which would be (a) futile and (b) inconvenient in the 18th century sense of that word when construing the Constitution for a government. It is rather to say that the assertion in 51(xx) of legislative power is one which, as has been put to me both yesterday and this morning, needs to be understood as having derived from an understanding of the place that a new nation would be taking in relation to the regulation of international commerce in light of the desirable comity of nations.
HAYNE J: At line 4 on 183 the Chief Justice says:
that the fact that the corporation is a foreign corporation should be significant in the way in which the law relates to it.
What do you submit would be a relevant content to give to that word “significant”?
MR WALKER: First, it is difficult. Second, so is “with respect to” difficult. Third, in the sense I have already tried to explain, if I may do it by compendious reference, the fact that they are intending to or are carrying on business or operating within territorial limits or within extraterritorial places such as Australia has an interest to regulate, is required to be a criterion of the application of the law. It is required to be “significant”, to use the Chief Justice’s words, that is, to have a meaning other than incidental or coincidental.
In relation to the 19th century statutes and in the interests of time we have reduced to writing something which I hope has now been made available to your Honours. It is dated today. It is headed “NOTE of NEW SOUTH WALES re HISTORY”. It is very much only a note and it contains argumentative submission. In particular, may we draw attention to the differentiation to which reference has already been made yesterday in questions from the Bench and noted, for example, in paragraph 3. The long title of the 1862 legislation, as we note in paragraph 2, actually included the epithet “trading” in the expression ‑ ‑ ‑
GUMMOW J: Yes. Now, Smith v Anderson 15 Ch D 247 to which you referred yesterday and which is referred to in Fontana was such case.
MR WALKER: Yes, and included consideration of just what derivation of revenue was or was not trade on the facts of that case.
GUMMOW J: Yes. Farmers were in business but did not trade. Banking, we are told, is not a trade.
MR WALKER: And some rentiers were and some were not. So none of that, in our respectful submission, however, will assist the Court ultimately in making the choice available to the Court in the interpretation of 51(xx). It is historical context, but even in a dictionary sense we could not respectably give this material to your Honours and say this drives connotation of “trading” as used in the Constitution.
Your Honours will note the reference to the state of affairs, both preceding and postdating this regulation, in the last part of the 19th century to which we draw attention in paragraph 8. In paragraph 11 we attempt to revisit the matter raised with me yesterday by the Chief Justice, in particular concerning the scope of 51(xx) as it may relate to the possible exercise of legislative power to regulate the relations, if I may use the preposition, within or inside the company as, for example, occurs in an oppression suit, and we add very slightly to what I said in one of my alternative answers to that in that paragraph.
GLEESON CJ: This is an example of the difficulty involved in looking at what was intended by the founding fathers. You will find in the report of Huddart, Parker v Moorehead statements by two of the founding fathers as to their understanding of what was intended that are completely contradictory.
MR WALKER: Yes.
GLEESON CJ: You compare what Justice O’Connor said in argument at page 334 of 8 CLR with what Justice Isaacs said in his judgment at page 395 on the point that you are on now and they each expressed radically different understandings of what was in contemplation.
MR WALKER: Yes.
CALLINAN J: Mr Walker, so far as outsiders are concerned, provident societies and friendly societies are probably engaging in trading activities. There is a mutuality element. It is for the benefit of the members that they be doing things, for example, investing in properties or perhaps other companies.
MR WALKER: Some might, your Honour.
CALLINAN J: It is difficult to think of any that would not, Mr Walker.
MR WALKER: I think there is a variety of friendly society whose constitutions I have seen previously where the dealings are almost entirely among the members and produce, by reason of what I will call a hoped for continuation of subscription ‑ ‑ ‑
CALLINAN J: I am familiar with those but ‑ ‑ ‑
MR WALKER: ‑ ‑ ‑ the ballot outcome for particular members ‑ ‑ ‑
CALLINAN J: But even those societies you would find would probably have funds on deposit with other financial institutions with a view to earning interest and therefore trading or being themselves financial in that respect.
MR WALKER: Yes, factually that would be correct, but may I, with respect, demur at the suggestion that by lending money to another person, a bank or otherwise, in return for a promise of the payment of interest I am in trade.
CALLINAN J: You may not be in trade but you are in finance.
MR WALKER: But I would not be, were I a corporation, a financial corporation by being a bank depositor. Now, that is in danger of being a mere ‑ ‑ ‑
CALLINAN J: I am not so sure about that. You may be right, I am not saying you are wrong, but I do not see why financial corporation might not be elastic enough to – and I do not think this is against you, really – include anybody who deals in finance, as it were.
MR WALKER: But that may be all of us.
HAYNE J: The point is considered in Shaw v Benson 11 QBD 563, Re Thomas 14 QBD 379 which seemed to be cited as authority for the proposition that those organisations are formed for the purpose of gain.
MR WALKER: Friendly societies, your Honour?
HAYNE J: No, but a society of the kind that Justice Callinan was putting to you in argument. The intersection between the friendly society and the companies legislation was a very fraught topic.
MR WALKER: Quite and with mutuals even today - perhaps not today, but until very recently ‑ with mutuals there was always the contrast, critical, as it happens in relation to tax, between those that had no profit to tax and those which were a mixture of a receptacle for the mutually subscribed funds plus also had profitable operations upon which they, of course, were taxed. So that it will depend upon a case‑by‑case determination as to whether one would characterise a corporation of that kind as a trading or financial corporation. Being a mutual will not mean you are not, manifestly, but being a mutual that lends money to a bank, in the sense that it deposits funds from time to time in a bank, would not make you a financial institution on its own any more than it would make you a trading financial on its own.
We would submit, with respect, that a financial corporation - and I confess this may involve taking colour from the word “trading” used next door to it – but financial corporation will require more than simply having money with which some use is made, not simply by spending it, but for example by lending it or by investing it in the hope of capital gain or by investing it in property from which rent might be derived or by buying shares from which dividends might be achieved. But one would not be - because money was the medium of exchange – a financial institution merely thereby.
HAYNE J: But again you have to be conscious of the fact that in the 19th century companies were different from corporations. Limited liability drove much of the development.
MR WALKER: Yes.
HAYNE J: But friendly societies wanted to become incorporated if that brought with it limited liability. You had a number of ideas in play and the constitutional expression “trading or financial corporation” may reflect some but by no means all of those ideas.
MR WALKER: The way we use that to advance our argument is to point out that therefore meaning has to be given both to the noun “corporation” as well as to the adjectives “foreign”, “trading” and “financial” in the way we put yesterday. One cannot simply take out “activities” for 51(xx), an “activities power” because trading and financial are characters which one achieves by activities being observed, and I do not want to repeat what I said yesterday, otherwise the history in our submission simply shows that there was a lively awareness of a mischief which included the matters to which Justice Hayne has just referred and we would particularly include limited liability.
GUMMOW J: I think what does appear is that, in a time of some conceptual ferment, this expression in 51(xx) was perhaps chosen for its comprehensiveness to look to the future as things would pan out in this current ferment.
MR WALKER: Well, we are bound to concede that it looks to the future. It has to be seen, like all of the provisions of section 51, as looking to the future. We are bound to concede the Convention Debates show us that the word “corporation” was used because it was regarded, correctly it turns out ‑ ‑ ‑
GUMMOW J: Well, they did not use “company”, you see.
MR WALKER: But because it was regarded correctly, it turns out, to be sufficient to encompass those entities known as companies. The word “companies” was suggested, as your Honours know from the debates, as something to be used either alongside or instead of “corporations”. There was a late suggestion in debate, “Why do we not just drop ‘corporations’ and have ‘companies’?” “Corporations” it was understood would include the incorporated companies, I stress the incorporated companies. That is why the word “corporation”, with what we have tried to make about the inside/outside line, is important in understanding the scope of the power.
The Chief Justice’s question yesterday, why cannot or what is wrong with section 51(xx) being used to authorise a law commanding constitutional corporations to give each employee three weeks holiday a year may thus be answered by way of conclusion of our submission as follows. That is a formulation which it is to be seen eschews any connective phrase with a characterising activity of a kind that one finds in the references I gave yesterday.
In Strickland, the notion of carrying on businesses that are competitive; in Fontana, causing loss or damage to the business of the constitutional corporation; in Tasmanian Dam, activities for the purposes of its trading activities. That is the first observation about the law. The second is that it follows from that that the employees in question may be employees who have nothing to do with, that is form no part of the facts by which the corporation would be characterised to have a constitutional character. In our submission, the law would, therefore, be including an effect which on any view went into an area outside that where it could be said that those characters had significance for the law or were sufficiently connected with the law.
The next proposition is that if it cannot be done directly, for the reasons we have put, could it be done indirectly by way of prohibition and conditional permission to trade so long as you contracted to give each of your employees three weeks holiday. I have already said what I wanted to say about the need to be wary about the conditions also possibly requiring a connection of significance to the characterising activity. That will require a proper understanding of the relation, if any, of the environmental regime to the export licence in Murphyores and will await ‑ ‑ ‑
GUMMOW J: This is a revised Bargers argument, I think, Mr Walker.
MR WALKER: I think it was during Murphyores a judicial response to Mr Hughes’ argument was to say, “This is the very worst kind of Barger argument”. We wish not to be putting any Barger kind of argument. Murphyores, nonetheless, has to be read and understood ‑ ‑ ‑
GUMMOW J: This word, “indirectly”, carries Barger’s baggage.
MR WALKER: It does, but with respect, Murphyores certainly stands for the proposition that the ‑ ‑ ‑
GUMMOW J: It is not just Murphyores, it is the use of the tax power.
MR WALKER: Fairfax is, with respect ‑ ‑ ‑
GUMMOW J: Yes, and you find it hard to connect the nature of the condition with the nature of the taxpayer.
MR WALKER: Fairfax, with respect, is a better example for my purposes.
GUMMOW J: Not just Fairfax, the whole modern structure by the Commonwealth for controlling superannuation funds comes through the tax power, as we said in Breckler.
MR WALKER: Your Honour, I am not suggesting this is special or confined, I am simply saying these are examples of an unremarkable proposition that the Commonwealth can, by legislation, achieve indirectly that which it could not achieve directly. With respect, those adverbs may be creating more trouble than they are worth because if the Commonwealth can achieve something then it can achieve something and it is not to the point whether it be direct or indirect.
The purpose, however, and why those expressions remain useful is that they draw to attention the difference and the importance in substance of the difference between purporting directly to regulate in terms and activities, such as is raised with me by the Chief Justice’s question, and the power which may exist to achieve the same end by using another power which could not, in terms, have been used to force the particular outcome directly. That is the sense in which those adverbs remain useful and, for our argument, they emphasise that there is a difference between an act in one form and an act in another.
This Act is not an Act which to any extent takes the form of prohibiting a constitutionally characterising activity, such as trading or carrying on financial activities, on condition that a certain employment code be observed by the participants in that industry. It is not surprising to reflect why a law would not take that form legally, politically or socially, because in order to make the condition a true condition of a licence to lift a prohibition it would need to be sanctioned, either criminally or by civil penalty or by invalidation – a fairly confronting structure of a law if one were to take that route. It has not been taken by the Commonwealth Parliament in this case.
So one is left then with the proposition, can it be constitutionally true that if you could achieve something indirectly by conditional prohibition, then it means you can skip that step and directly do the thing. The short answer is, for all the reasons that arise from the cases to which Justice Gummow referred in his last observation to me, no, these are not mere matters of form; these are important legal matters of constitutional form. Such an Act does not arise in this case and therefore one is left with the proposition, as we submit it to be ‑ ‑ ‑
KIRBY J: Mr Walker, can I raise with you – I see you are getting to your peroration – some matters that concern me. If one does not give a lot of weight to the 19th century except as a historical context setting matter, and looks simply at the language of the Constitution, giving it under Engineers the full ambit that the words connote, the problem then presented is that if the Commonwealth’s submission is correct that the Commonwealth, the Federal Parliament, can make laws with respect to corporations as designated. Given the enormous importance today and likely greater important in the future of corporations as such eo nomine, you really then present the risk that the Federal Parliament has enormous powers effectively to deal with matters such as housing, education and many other things that in the past it has not done.
That in a sense requires one to pause and look at what you called constitutional technique and to look again at where logic is driving us; that is, if you take the view that the federal scheme of the Constitution is absolutely central to it and therefore something that is worth preserving, as I am inclined to do.
Now, if one comes to that position, it may be that lawyers’ logic will take us down one path and looking at the whole Constitution will require us to pause and see where our logic is taking us, and it has always to be remembered that the opening words of section 51 say “The Parliament shall, subject to this Constitution” and that is often thought to take you outside section 51 to the other provisions of the Constitution, especially Chapter III, but subject to this Constitution also includes section 51.
So the question I am asking is, have you been bold enough – I mean, why, if you are looking at section 51, do you not, as Justice Callinan has repeatedly suggested, have to as it were find meaning for a particular paragraph by reference to other paragraphs? In an ordinary legal document you would do that without question, and the argument against it in the past has been, “Well, we don’t do it in section 51 because they’re grants of power”.
But where you have a particular provision such as section 51(xxxv) which has addressed, for historical reasons that we know, the particular issue of industrial relations regulation, why does one not, in order, as it were, to preserve the federal scheme, read the grants of power, including to under paragraph (xx), as having to find its meaning in the context of a section which also provides a particular and special and limited regime for industrial disputation, and therefore that you have to read the two together.
Now, that is contrary to what the Court has said in the past, but we are now looking down a tunnel which has very great significance not just for this case but for the whole federal scheme and therefore it may be that it requires us as lawyers to see where our logic is leading and then to pause, not to undue the whole Engineers’ notion, but at least to undo the notion that you just do not have any regard to what is said in other paragraphs for the purpose of interpreting paragraph 20.
MR WALKER: Your Honour, our written submissions, as your Honours appreciate, include reliance on many of the considerations that your Honour has raised with us. In particular, we have argued – and I think I argued yesterday – that it is simply not the case that the Court proceeds to interpret section 51(xx) as if the other heads of power did not appear. That has not been done in the past and there is no authority ‑ ‑ ‑
KIRBY J: There is the authority under (xxxi), is there not? There is authority that says you do not read down a particular paragraph by reference of others.
MR WALKER: That is the next point to which I needed to come. The first proposition is that, of course, context has to be taken into account. To recap what I said about that yesterday at the very outset of my address, 51(xxxv) is a constant accompaniment to everything we are saying. Lest there be – usually under the banner of plenary from the Commonwealth – a notion of what we would prefer to describe as the inconvenience argument, would it not be a terrible thing if the Commonwealth Parliament did not have all this power, or it would be convenient if we could fill in gaps here and there and get uniformity thereby. One answer to it is always: but the persons who were responsible for 51(xx) – and I do not just mean the people in the Convention Debates; I mean those who approved the Constitution – approved 51(xxxv) in relation to industrial disputes, which it might be thought in some respect at least is much more specific, even if the players are not confined to corporations ‑ ‑ ‑
CALLINAN J: It is the only place in the Constitution where “industrial” is used.
MR WALKER: Yes. Well, “industrial disputes”, yes.
CALLINAN J: Why would you not start with the proposition that each power was – and this is a matter of objective interpretation – intended to be discrete?
MR WALKER: So long as being discrete does not mean they are not read contextually because ‑ ‑ ‑
CALLINAN J: No, rather the contrary.
MR WALKER: Quite. Now, discrete in context means that they must bear a relation with each other but ‑ ‑ ‑
GUMMOW J: Why would you not?
MR WALKER: One does always. They always bear a relation ‑ ‑ ‑
GUMMOW J: Is there not a judgment somewhere in the early years of Justice Gavan Duffy, or one or other of them, saying the powers in section 51 are like the powers of a trustee?
MR WALKER: But the powers of a trustee will each be read with the other. They would be read with the other as well. That is they are not each read as if they did not come with context. Indeed, in a trust deed, with respect, one would have more liberty to say here is the specific power as to how you invest in mining companies and that will try and favour the general power of investment. That would be much easier in a trust deed than in this Constitution.
CALLINAN J: No doubt there is some overlapping on occasions, but it is a reasonable proposition with which to begin that as little overlapping as possible was intended, because they did not intend to repeat themselves.
MR WALKER: Your Honour, I do not wish to be putting arguments that appear to be against our case and our case, as I have noted, includes a contextual reading of 51(xx) which observes that for industrial disputation, prevention, conciliation and arbitration there is specific provision made, clearly considered within its terms as adequate for the new nation.
CALLINAN J: And, in fact, as we now know, because particularly of paper disputes, a very, very broad power indeed.
MR WALKER: Yes.
CALLINAN J: An enormous industrial power with national implications.
MR WALKER: Now, your Honour, I do not wish to at all tend against what your Honour is putting to me there for consideration. We have urged it that 51(xxxv) is there and available. What we do, however, submit about the approach to the heads of power is that you cannot privilege the power which is in question in a particular case by, as it were, treating the others as mere accompaniments so that it becomes the dominant one simply because it is the one to which all the language and thought is devoted in that case. That is illogical.
KIRBY J: No, but the basic problem is that if the Commonwealth’s central submission, absolutely central to its submission, the eo nomine submission, if that is correct, you just do not need the other. You do not need it at all. It may as well not have been there. That is the thing that makes you pull back from the logic to which our techniques have been driving us in the past.
CALLINAN J: Yes, they would not have even bothered putting it there on the Commonwealth’s submission.
MR WALKER: It is fair to say that there are a number of other powers that on the Commonwealth’s submission are supererogatory in relation to the pervasive conduct of, upon and sufficiently directly affecting corporations, which is a lot of coverage. However, in our submission, it would not be right simply to say that as constitutional technique one should avoid overlap. Overlap may be precisely what might be called a boilerplate or belt and braces approach entirely appropriate to the making and operation of a constitution.
Overlap in itself perhaps ought not to be avoided and it could lead to some dangers, particularly when it came to the question: when it comes to a decision between – take the simple example – two powers that might be thought to overlap, which one yields and by how much? The fact is that there is overlap between more than two powers in most areas.
GUMMOW J: Take 51(vi) and 51(xxii).
MR WALKER: Yes, (xxii)?
GUMMOW J: I am sorry, (xxxii). The founding fathers were obsessed with railways.
MR WALKER: Yes, quite.
GUMMOW J:
the control of railways with respect to transport for the naval and military purposes of the Commonwealth.
MR WALKER: Yes.
KIRBY J: Migration and aliens also has in some cases a ‑ ‑ ‑
CALLINAN J: I do not suggest that it does not occur.
MR WALKER: And (xxi) and (xxii) are the classic overlaps.
CALLINAN J: I am not suggesting it does not occur, but surely a canon of constitutional construction should be that it should be minimised as much as possible.
MR WALKER: Could I attempt to put it this way, which I hope is not seen by your Honour Justice Callinan as contradictory of the suggestion your Honour makes. It is this, that not so much avoiding overlap as ensuring that the fair full meaning of the words of each of the powers is not to be detracted from by either a priori assumptions about the width of Commonwealth power or by any judge‑made paramountcy of one of the powers over another, leaving (xxxix) out of that. Now, as to the 38 or 39, as it turns out, of the 40, in our submission, there is no call for any paramountcy. There is obvious overlap, but each is to be given a full fair reading.
GUMMOW J: I am not sure – there is a temporal scale in all of this. You are reading 51 with the understanding of what these concepts meant in 1901, or looking at it today and saying, “Oh, gee, this would be the consequence reading it today in the light of what has happened up to today”, and therefore you somehow treat it as now meaning some unspecified time, as having some different meaning to what it had at the beginning?
MR WALKER: No.
HAYNE J: And do you determine questions of overlap according to the place that the corporation may now have in the economy of today compared with the place it had as an employer ‑ ‑ ‑
MR WALKER: No. What I am talking ‑ ‑ ‑
HAYNE J: ‑ ‑ ‑ in 1900, where I would have thought a great deal of employment was individual or partnership rather than corporate. Witness the shearer’s strike.
MR WALKER: Your Honours, it is not possible to submit that there is not overlap and to be determined simply textually.
KIRBY J: Paramountcy is not the notion. Particularity might be the notion.
MR WALKER: Thank you, your Honour, yes. That is what I was about to come to. When one is talking about ‑ ‑ ‑
GUMMOW J: The particularity with a view at what time? There is every reason for looking at things in 1900 to see that 51(xxxv) and 51(xx) did not drastically ‑ ‑ ‑
KIRBY J: But I have asked you to indulge me, Mr Walker, on the view that we are not locked into 1900, that we are looking at this as an instrument of government addressing us today. I am just asking for a little humouring here.
MR WALKER: Can I try to respond to all of those last three questions in this way ‑ ‑ ‑
GUMMOW J: You cannot have your feet in three camps at once, Mr Walker. At some point you have to make a choice on your feet.
HAYNE J: He is doing his best.
MR WALKER: It is difficult enough at the lectern without trying that, your Honour.
GUMMOW J: That is what you are here for.
CALLINAN J: I do not know how inconsistent the camps are. I am not too sure that there is not some common ground and at your camp there are four.
MR WALKER: Quite.
KIRBY J: Yes. The Court sometimes has given meanings of 1901 and many times has given meanings, as in Sue v Hill and many other cases, with a much more modern flavour. So I am just asking you to indulge me for the moment.
MR WALKER: First of all, though they be used in an old‑fashioned way, for convenience and brevity there is, of course, the connotation/denotation approach, upon which your Honours do not need to hear me further. Second, it has never been the approach in this Court and we do not submit that an ahistorical approach could ever be right. Third, we do not submit, in our submission, the sweep of the history in this Court does not permit a view that there is a limitation to be observed to the application of the words evolved in the 1890s and becoming effective at the beginning of 1901 regardless of consequences emerging and casting fresh light on the potentiality of the words as they became effective in 1901.
On the other hand, neither do we seek to submit that you could ever say of a power that it alters in its scope by reason of later developments. Later developments reveal that its scope encompasses things which had not either been appreciated, had they existed back then ‑ ‑ ‑
KIRBY J: That is right, and that is dangerous territory for your client because when one looks at the corporations power as expressed, looked at in today’s eyes – that is the expression Justice McHugh used to use – the corporations power is apt to us to pick up the huge role that corporations play in the modern economy, national and international. That brings us to the tunnel that if the Commonwealth is right and you can make laws with respect to corporations, you have really changed the nature of our federal arrangements, radically and forever
MR WALKER: Your Honours, in our submission, the last thing I said was not against our case because if one takes that to which Justice Gummow has referred today and the Chief Justice yesterday, namely, the huge increase in the proportion of enterprise conducted through corporations now compared with the position in the 1890s, it would be impossible to articulate a constitutional technique by which at some time, presumably between then and now, the power became truncated by reason of an increase in numbers. That could not be right.
So it must be that the same meaning existed as in 1901 and it provides a scope of power which, because the object of the power is more numerous, will be more pervasively felt. That is unremarkable and it is not against our case, although the potential, clearly, explicitly recognised by the people who made and approved the Constitution, for the growth of corporations – globalisation not being new in relation to international commerce and the growth of enterprise being one of the aims of Federation – that cannot be said to be a potential unknown to those who made the Constitution with 51(i) and 51(xxxv), just to name two cardinal points in considering the overlap, as it plainly is, of the powers.
Our point is simply this. In a full and fair reading of the words of each of 51(i) to (xxxviii), without privileging one over the other, one asks: how does one give full and fair meaning to a specific power, and particularly where there are limitations imposed on its exercise, if one includes as an available choice – and I stress an available choice – in a range of meanings for another power more generally expressed in the same general area, if one includes a meaning of the general power which eliminates the specific.
Now, that has to be a case‑by‑case determination in relation to these powers. What I was bound to concede at the outset of my argument needs to be noted again. The obvious overlap in this case is with (xxxv), but another very obvious one is with 51(i).
GLEESON CJ: And where does that leave the Trade Practices Act?
MR WALKER: Quite. In our submission, as I said in opening my address, the way in which Mr Justice Isaacs dealt with that argument, that 51(i), which – this is an argument that won the day in Moorehead – that, in our submission, is not open to us unless we successfully seek leave to challenge, I think, every governing authority in this Court on how you approach the interpretation of 51, that we would be ‑ ‑ ‑
HAYNE J: Does it come to this then, Mr Walker, that the social consequences, and thus the political reason, to enact a law saying, “No corporation shall”, is now very different from what it was in 1900?
MR WALKER: It is more actualised. The potential was always there and those who thought of a growing Australia, as many did, would have known that it was potentially very large.
HAYNE J: But growing through corporations, perhaps, perhaps not.
MR WALKER: Well, 51(xxxv), with its interstateness, could hardly be said to be calculated to the sole trader. Not everyone was Mr Kidman.
CALLINAN J: Well, there would not have been anything new in 1901 about the ubiquity and power of trading corporations and, indeed, Justice Isaacs expressly talks about that at pages 406 and 407 of Huddart, Parker. He said:
the comparatively vast and far-reaching transactions of foreign and trading or financial corporations.
HAYNE J: And Salomon v Salomon was not decided until November 1896 after, I think, the last of the drafting had been done.
KIRBY J: If you take a particularity test, then there is no problem for trade practices. The trade practices are part an aspect of the trading of the corporation. But in that matter which is relevant to the prevention and settlement – and I emphasise prevention – of industrial disputes, then at least it is arguable that section 51(xxxv) hives that off and says, corporation or individual or partnership, or Starr-Bowkett, when you seek federal law on this subject, you have to fit within the power of section 51(xxxv).
MR WALKER: I do not wish to cut more across my friend, the Solicitor for Victoria, either temporally or by way of argument, than I already have, save to say this last thing in response to Justice Kirby ‑ ‑ ‑
GUMMOW J: Is there any overlap with the power in 51(xvii) for bankruptcy and insolvency?
MR WALKER: Yes, insolvency in particular.
KIRBY J: I sat there very quietly whilst all this talk of 1900 was going on and I do need your assistance on the matter that is concerning me, because I have my constitutional obligation as well.
MR WALKER: Yes, your Honour. In the full and fair meaning to be given to both 51(xxxv) and 51(xx) – and I stress it is only for brevity that I include only those two; there are of course the others – where choices are available, and they mostly are, particularly with the more general powers and always because of the connective “with respect to”, which drives both the difficulty and the outcome, then, in our submission, what we have offered in relation to the characterising qualities – foreign, trading, financial – and particularly by saying that one trades by dealing with someone outside you, that one is a financial corporation by conducting financial business with people outside you, that you are doing business here with others outside you when you are foreign corporation, that that is a reading, an available choice of 51(xx), which, without committing implied prohibition reasoning, which we eschew, gives both full and fair meaning to the corporations power and permits full and fair meaning and operation to be given, for example, to 51(xxxv).
That I think, with respect to Justice Kirby, is our attempt to give effect to the need not to rank section 51 powers as if the general powers, that is, a power which is general according to the subject matter in question,
always trumps a specific power. That would be a paramountcy approach unjustified in construing a list of powers.
KIRBY J: I do not have a paramountcy view.
MR WALKER: I am not suggesting your Honour does.
KIRBY J: Could I ask that you do not forget my request for a note on the 1993 Act and how its references to the corporations power to give force to certain provisions of that Act is different from what is done in the present Act as amended?
MR WALKER: May I just say about the overlap point, your Honours will have gathered from what I said about 45D in answer to Justice Callinan yesterday that we do not say that the argument I have just put in answer to Justice Kirby means that 51(xx) was not available to support 45D, but of course 45D describes a form of conduct which many people would have included in a genus of industrial action.
CALLINAN J: It was the industrial aspect that I had in mind when I asked ‑ ‑ ‑
MR WALKER: Yes.
GUMMOW J: I think that note, Mr Walker, as Dingjan illustrates, will have to cope with the Industrial Relations Act 1988. This goes back nearly 20 years.
MR WALKER: Yes. If it please the Court.
GLEESON CJ: Thank you, Mr Walker. The Solicitor‑General for Victoria.
MS TATE: May it please the Court. May I begin by indicating the structure of Victoria’s submissions. Might I address the issues before the Court in the following way. First, might I make some general submissions about the nature of the challenge before the Court and what it is the Court has been asked to decide. Secondly, might I address the Court on what we submit is an interrelationship between the heads of power under 51(xxxv) and 51(xx). Thirdly, might I indicate the approach to 51(xx) which we submit is all that is necessary for the rejection of the primary submissions of the Commonwealth and, in the alternative, might I make submissions on the approach to 51(xx) which we submit has the greatest support from the authorities. Finally, might I make some submissions directed specifically at the invalidity of Part 16 of the Act, the part which deals with freedom of association.
If I might turn then first to the nature of the challenge before the Court. Might I emphasise the particularity of the task facing the Court. The Court is asked to determine the validity of a particular Act. It is not asked to draw a general conclusion about the outer limits of the power under 51(xx) of the Constitution, nor is it invited to endorse a test of characterisation that would yield a definitive answer in relation to any proposed law as to whether that law was a law with respect to trading and financial corporations. What this Court must determine is the validity of a particular Act.
Now, might I draw your Honours’ attention to the Bank Nationalisation Case (1948) 76 CLR 1 in the judgment of Chief Justice Latham at page 152. At about point 3 of the page the Chief Justice says:
The constitutional validity of a statute, it should be observed at the outset, cannot be determined by the fact that Parliament desires or hopes to attain a particular object by the legislation . . . Thus in the present cases the questions are whether the particular provisions of the Act are valid. It is not a general question as to whether the Commonwealth Parliament has power by some means or other to acquire a monopoly of banking (other than State banking) for a corporation controlled or controllable by the Commonwealth. The question of power must be separately considered in relation to the particular means adopted in the Act; for example, the acquisition provisions, the prohibition provisions – are these specific provisions within power or beyond power? Another operation of the Act, if valid, is to enable directors appointed by the Governor of the Commonwealth Bank and approved by the Commonwealth Treasurer to control Australian banks. Is such legislation valid? Another operation of the Act, if valid, will be to prevent some or all of the private banks from carrying on any banking business in Australia. Is such legislation valid? These are examples of the actual operation of the Act. It is such particular and precise matters which have to be considered in relation to the provisions of the Commonwealth Constitution.
KIRBY J: I take the force of that, but if you sit here it is very important that you test your propositions, in particular cases, by general propositions otherwise next week you are liable to find that what you said in one case is not really consistent with what the next case requires. So you have to have general concepts. You cannot just stumble from one particular to another.
MS TATE: Of course, your Honour, there must be general concepts, but I what I seek to emphasise is that the task that this Court faces is to consider the Act and its validity in the particular terms in which that Act has been drafted. Now, with respect to that, your Honour, we might seek to clarify that the Act under challenge is the amending Act. It is the Workplace Relations Amendment (Work Choices) Act 2005, Act No 153 of 2005.
It should be apparent from the pleadings that all the plaintiff States and the AWU and the New South Wales Unions have sought declarations that the amending Act as a whole be struck down as invalid. The States and the AWU seek this relief in the alternative to having particular sections of the Act, that is, the Workplace Relations Act as amended, declared invalid. The New South Wales Unions seeks a declaration of invalidity of the whole of the amending Act as its only form of substantive relief. If the amending Act as a whole was struck down, this would include of course the sections which repeal the provisions of the previous or the pre‑reform Act.
GUMMOW J: Yes, what are those repealing provisions? Can you just give me the numbers, Solicitor?
MS TATE: We have set this out, your Honour, in the joint submissions on the operation of the Act.
GUMMOW J: I am looking at 153 of 2005.
MS TATE: It is quite difficult to find the repealing provisions, your Honour, but perhaps if I could draw your Honour’s attention to page 51 of the government print of the amending Act. If your Honours have the amending Act itself, your Honours will see there is clause 71 of Schedule 1 to the amending Act. So that is page 51 ‑ ‑ ‑
KIRBY J: This is in volume 2, is it?
MS TATE: No, your Honour, it is a completely separate Act.
GLEESON CJ: Volumes 1 and 2 are of the Act as amended.
MS TATE: Volumes 1 and 2 are of the Act as amended.
GLEESON CJ: You are directing our attention to Act No 153 of 2005.
MS TATE: Volume 1 of the sections of the Act. Volume 2 consists of the schedules to the Act.
KIRBY J: Which clause?
MS TATE: And the amending Act itself, your Honour, on page 51 of the government print of the amending Act – it is clause 71 of Schedule 1. Your Honour will see there that clause 71 repeals Part VA, Part VI and Part VIAAA. Clause 72 of this schedule is to be found at page 345. Clause 72 then inserts further provisions into the Act. But, your Honour, in the joint submissions on the operation of the Act we do seek to set out each of the repealing provisions.
At page 360 of the government print, there is clause 80 of Schedule 1 and that then repeals sections 170BH, 170BHA and 170BI. Clause 81 there are various subdivisions omitted and then clause 82 inserts a new 170CA, and so on. But the most substantial repealing clause is that clause 71 and there are further repealing clauses on page 365, where your Honours will see that clause 100 repeals the definition of “Commonwealth public sector employee”, 101 then inserts a definition of “Court”, 103 repeals the definition of “Federal award employee”, and so on.
GUMMOW J: Thank you.
MS TATE: Your Honours, it is the whole of that ‑ ‑ ‑
GUMMOW J: So the previous law would still stand?
MS TATE: It would still stand. It would still stand in its entirety, your Honour. There is no challenge, clearly, to the clauses of the schedule which specifically repeal matters on their own, but we would say they are inextricably intertwined with the material that they substitute and on that basis we would say that the whole of the Act should be struck down.
GUMMOW J: Thank you.
MS TATE: Your Honour, if I could draw your Honour’s attention to Strickland v Rocla Concrete Pipes Ltd (1971) 124 CLR 468 at 490 to 491 Chief Justice Barwick expressed the same degree of caution in an approach to a determination of the validity of the law under 51(xx) as had been expressed by Chief Justice Latham in the Bank Nationalisation Case. Chief Justice Barwick says at 490 about point 5:
We were invited in the argument of these appeals to set as it were the outer limits of the reach of the power under this paragraph of s. 51. This for my part I am not prepared to do: and indeed I do not regard the Court as justified in doing so. The method of constitutional interpretation is the same as that with which we have been long familiar in the common law. The law develops case by case, the Court in each case deciding so much as is necessary to dispose of the case before it . . .
Of course frequently in order to dispose of a case the Court must state and discuss general principles –
exactly as your Honour Justice Kirby put to me –
or express concepts which are of value in subsequent cases. But that is a very different thing from setting out to decide at one blow the full ambit of a constitutional power. Indeed, to my mind one of the fundamental errors into which the Court was led by the reserved powers doctrine when deciding Huddart, Parker & Co. Pty. Ltd. v. Moorehead was the endeavour to do that very thing rather than merely to decide whether the law which it had before it was a law with respect to the topic of granted power.
GLEESON CJ: Bearing in mind that the Court in Strickland held the legislation invalid, what was the Court doing in Strickland deciding whether or not Huddart, Parker v Moorehead was correctly decided?
MS TATE: Indeed, your Honour, that may be so but the caution that is expressed is not simply a caution about formulating the outer limits of the power but it is also a caution which is expressed in relation to the establishment of a test of characterisation that could be used definitively in respect of any law to determine whether or not that law is a law with respect to trading and financial corporations. Chief Justice Barwick continued at the bottom of page 490:
We were also invited in the argument of these appeals to express some criteria by which a law may be held to be a law with respect to the topic of s.51(xx.). But such a submission in my opinion both misconceives our function and fails to realize that the constitutional formula is sufficient in itself. Efforts I know have been made to offer synonyms and explanations of that formula but, with great respect to those who have made the endeavour, the result cannot be definitive. An assumption of the Constitution in providing this Court as the arbiter of constitutional validity was that the Court would be able on being presented with a law made by the Parliament to answer the direct question whether properly construed and understood it was law with respect to one or more of the granted heads of power. The Constitution itself provides the criterion of validity: the law must be with respect to a topic of granted power. For my part the formula requires no explanation: in any case, it is the text and no commentary upon it however helpful may displace it. The constitutional formula requires a substantial connexion between the topic and the law. What will suffice in any particular instance to require an affirmative answer to the question whether it is a law with respect to the subject matter necessarily involves a matter of degree co‑related to the nature of the power and to the provisions of the Act as they would operate in the area in which it is held they were intended to operate.
Now, your Honour, we would say that here the principal issue that is before this Court can be simply expressed. The issue is, is the criterion of validity established in this case? Is there a sufficient connection between the amending Act and the head of power under 51(xx)?
KIRBY J: Can I tell you a problem with this bit by bit common law approach?
MS TATE: Yes, your Honour.
KIRBY J: The problem is that you may start with a piece of legislation, say, the 1988 amending Act that followed the inquiry into industrial relations, and then you take a few more steps in 1993, then a couple more in 1996 and they look innocent enough, but then you get the full panoply of the consequence of the logic and at that point the lawyer’s mind has to draw back and say, well, where does this lead for the whole polity?
MS TATE: Yes, your Honour, we are certainly ‑ ‑ ‑
KIRBY J: It is really Immanuel Kant’s approach to logic, that you have to test each proposition ultimately by what is the consequence if it becomes the general rule?
MS TATE: We certainly would not want to dissuade your Honour from considering what the consequences of a finding here in this Court that the corporations power is an unrestricted and limitless head of power. Clearly, in our submissions ‑ ‑ ‑
KIRBY J: Because if it is, then you are undoing the federal scheme which is absolutely central to the nature of the Constitution.
MS TATE: Indeed, your Honour, and in our reply submissions in particular, we made the submission that it was necessary to consider what the general consequences might be if 51(xx) was to be construed as limitless in scope.
KIRBY J: It is not limitless but it is very, very large.
MS TATE: Very, very large, indeed, your Honour.
KIRBY J: I heard a figure yesterday - 85 percent, 90 percent of the business activity is done by corporations. I would not be surprised with that figure and many of them are now doing with privatisation and the like the sort of activities which, at least hitherto, have been activities carried on by States in this country with the consequences for Federation that that entails.
MS TATE: Indeed, your Honour. As I said, we would not seek to dissuade you from considering what the consequences might be of treating the scope of the power under 51(xx), as your Honour puts it, as very, very large. What we do say though is that the task that is before the Court is not a task to pronounce what the outer limits of the power might be but rather simply to determine whether there is a sufficient connection between the amending Act and the head of power under 51(xx). Might I add to those questions before the Court the subsidiary question, “Does this amending Act satisfy any implied limitation or restriction which is applicable to it or to any part of it?” Might I turn then to the question ‑ ‑ ‑
HAYNE J: Sorry, what is “it” in the proposition you have just put, “Does it satisfy any implied restriction?”
MS TATE: Which is applicable to the amending Act or to any part of the amending act.
HAYNE J: Thank you.
MS TATE: Might I turn then to the question of the implied limitations and the relationship between 51(xxxv) and other heads of power, a relationship for which we will contend. Might I begin by considering what we submit is the basic proposition for the construction of the Constitution, namely, that each provision of the Constitution is to be read with other provisions in the same instrument. The principle that the Constitution is a single and unified coherent instrument and should be read as such is, we submit, the overriding principle of constitutional interpretation. The primacy of the coherence principle has been acknowledged by this Court throughout its history and most particularly in the Bank Nationalisation Case and more recently in Newcrest Mining v The Commonwealth (1997) 190 CLR 513.
GUMMOW J: That tries to face up to the problems of the territories power.
MS TATE: Yes, it does, your Honour. Might I take the case of Newcrest Mining as an illustration where the coherence principle formed the basis of the Court’s reasoning. I do not wish to take your Honours to Newcrest Mining initially; there are other cases to which I wish to draw your Honours’ attention.
KIRBY J: That was the Teori Tou Case, was it not?
MS TATE: Yes, that is right, your Honour.
KIRBY J: The Court’s reasoning may have been coherent, but it was very divided.
MS TATE: It was divided, your Honour, and Teori Tou was ultimately not overruled.
KIRBY J: Because Justice Toohey jumped.
MS TATE: Because Justice Toohey was not prepared to overrule it but prepared to endorse propositions that may have been in some degree of tension with it.
We seek to use Newcrest Mining as an illustration where the coherence principle formed the basis of the Court’s reasoning. Now, that case concerns, as Justice Gummow has noted, of course the question whether section 122 of the Constitution, which is the power of the Commonwealth Parliament to “make laws for the government of any territory”, whether section 122 was subject to section 51(xxxi) and the restriction which it imposes that any law made for the acquisition of property must be on “just terms” and for a “purpose in respect of which the Parliament has power to make laws”.
The Court held by majority that section 122 was indeed so restricted. We are not concerned with the actual decision in that case, but the case is useful, in our submission, as an illustration of the primacy and force of the coherence principle and the observations made about the construction of the paragraphs of section 51. In arriving in its decision in Newcrest Mining, the Court disapproved of an earlier decision of the Court, as Justice Kirby has noted, Teore Tau v the Commonwealth (1969) 119 CLR 564, in which it held that section 122 was not limited or qualified by section 51(xxxi) and that it held in effect that section 122 should be seen as disjoined from the operation of the Constitution as a whole.
In Newcrest Mining the Commonwealth relied upon Teore Tau and argued that 122 should be seen as falling outside of the stretches of 51 as dealing with matters wholly unrelated to section 51. The Commonwealth argued that section 122 should be viewed as unrestricted in scope, in part because the power under section 122 was not expressed to be subject to this Constitution and in part because the power was to be construed as a plenary power.
Now, the majority of the Court rejected the Commonwealth’s submissions and it did so on the basis that to regard the power - if I might just summarise – conferred by 122 as disjoined from the operation of the Constitution was to flout what was described in that case as the basic proposition of constitutional construction, that the Constitution is to be read as a single coherent instrument with every provision read as part of a whole. The majority also dismissed the suggestion that the absence of the phrase “subject to this Constitution” precluded the application of the coherence principle or diminished its force. Further, the limited utility of the phrase “plenary power” was also exposed.
Now, before I take your Honours to particular passages in Newcrest Mining, might I mention a significant consequence which follows from the coherence principle. This consequence was recognised by Sir Owen Dixon in Attorney-General v Schmidt (1961) 105 CLR 361. The consequence was accepted by all the other members of the Court. Might I draw your Honours’ attention to the judgment of Sir Owen Dixon at page 371. At page 371 at about point 3 of the page, Sir Owen Dixon endorses a passage of his own judgment from the Bank Nationalisation Case:
Moreover, when a constitution undertakes to forbid or restrain some legislative course, there can be no prohibition to which it is more proper to apply the principle embodied in the maxim –
it is not permissible to do indirectly what is prohibited directly –
In requiring just terms, s. 51(xxxi) fetters the legislative power by forbidding laws with respect to acquisition on any terms that are not just.
Sir Owen Dixon goes on to say that:
The decisions of this Court show that if par. (xxxi) had been absent from the Constitution many of the paragraphs of s. 51, either alone or with the aid of –
the express incidentals power –
would have been interpreted as extending to legislation for the acquisition of land or other property for use in carrying out or giving effect to legislation enacted under such powers. The same decisions, however, show that in the presence in s. 51 of par. (xxxi) those paragraphs should not be so interpreted but should be read as depending for the acquisition of property for such a purpose upon the legislative power conferred by par. (xxxi) subject, as it is, to the condition that the acquisition must be on just terms.
Now, this case – the case of Schmidt – was concerned with the retention of German assets after the war held under the Trading with the Enemy Act. During wartime, of course, as your Honours will know, the High Court had power to appoint a controller of a trading corporation, the proprietors of which were German. The controller could wind up the company and place any realised funds into a fund of the High Court. After the war, the Act was amended to provide that money in the Court fund was to vest in the controller of enemy property, and it is in that context that the question arose as to whether that amounted to an acquisition of property not on just terms.
But at the bottom of page 371 Sir Owen Dixon states a principle, which has been used and applied in many other authorities including Bourke v State Bank of New South Wales which is an authority I will take the Court to in due course, but the statement of principle is as follows:
It is hardly necessary to say that when you have, as you do in par. (xxxi), an express power, subject to a safeguard, restriction or qualification, to legislate on a particular subject or to a particular effect, it is in accordance with the soundest principles of interpretation to treat that as inconsistent with any construction of other powers conferred in the context which would mean that they included the same subject or produced the same effect and so authorized the same kind of legislation but without the safeguard, restriction or qualification.
He then makes some further observations including the observation that one cannot take that principle and apply it to:
s. 51 in a too sweeping and undiscriminating way.
He then states what might be a qualification on the principle. He says at about point 3 on page 372:
The other observation is that the principle does not apply except with respect to the ground actually covered by par. (xxxi) of s. 51. For example, no one would doubt that under the power to make laws with respect to bankruptcy, property of the bankrupt may be sequestrated and property of others which has been left in his order and disposition may be vested in the Official Receiver and that s. 51 (xxxi) has no bearing on the matter . . . It must be borne in mind that s. 51 (xxxi) confers a legislative power and it is that power only which is subject to the condition that the acquisitions provided for must be on just terms.
We would construe that passage of Sir Owen Dixon as suggesting that the principle that he has stated is a principle which is subject to a contrary intention, manifest either in the terms of the power – another power ‑ or manifest in the terms of the particular law. So clearly section 51, which is a power to make laws - it is not simply a safeguard or a guarantee, it is an affirmative grant of power to make laws - the safeguard within section 51(xxxi) could not apply to laws with respect to bankruptcy, and clearly that is obvious those type of laws manifest a contrary intention. He then states at page 373 at about point 4:
But the vesting in the Controller of Enemy Property does not do more than leave the ultimate disposition of the moneys etc. vested subject to the operation of s. 13E . . . The whole subject is altogether outside the scope of s. 51 (xxxi).
We rely on that principle in Schmidt and we rely on it for several points and they are these. We say that what can be discerned from those passages is that the Constitution, including the legislative powers it confers under section 51, must be read as a whole and must be read consistently. This will require that when a legislative power is construed as incorporating a safeguard restriction or prohibition then that will affect the operation of the other legislative powers, but we also discern from Schmidt that that rule of construction is, as I say, clearly subject to the manifestation of a contrary intention. The principle which we rely upon is save for the manifestation of a contrary intention ‑ ‑ ‑
KIRBY J: That is contrary intention in the Constitution?
MS TATE: Contrary intention in the Constitution or, indeed, it may be in the nature of the law, your Honour, if the law is by means of forfeiture or the imposition of a penalty then it may be ‑ ‑ ‑
KIRBY J: That is a different matter. That is applying the Constitution.
MS TATE: That is applying the Constitution but those are the sorts of examples that have been considered in the cases as ones where either the terms of another power manifest a contrary intention or the particular law made under one or other power manifest a contrary contention. We would say save for that manifestation of a contrary contention, if a legislative power was subject to an express restriction or prohibition, then the other powers to make laws must be read consistently as subject to that same restriction.
It is our submission that not to construe the other powers as subject to that same restriction is to breach the maxim that it is not permissible to do indirectly what is prohibited directly, a maxim of most significance applied in a constitutional setting. Now, the rule of construction for which we contend was further considered in the case of Nintendo v Centronics Systems (1994) 181 CLR 134.
KIRBY J: This is the Schmidt principle?
MS TATE: The Schmidt principle. Yes, your Honour.
KIRBY J: It has been applied many times.
MS TATE: It has been applied many times but in particular it has been applied within this context, your Honour. Here the law was made under 51(xviii), the power to make laws with respect to “copyrights, patents of inventions and designs, and trade marks”. The Act with which the case was concerned was the Circuit Layouts Act which recognised and protected intellectual property rights in relation to plans showing the location of components of complex electronic circuits which were used in video game machines. The rights conferred included the exclusive right to exploit commercially the layout plan. In defence to an action for infringement, Centronics argued that the Act was invalid, and I think it is described as a sort of desperate attempt within the judgment as a final point of defence, but they argued that the Act was invalid as it breached section 51(xxxi).
That argument was rejected on page 160 where their Honours considered the operation of 51(xxxi). At the top of page 160, in a joint judgment of the Chief Justice Mason, Justices Brennan, Deane, Toohey, Gaudron and McHugh, they say:
It is well settled that s. 51(xxxi)’s indirect operation to reduce the content of other grants of legislative power is through the medium of a rule of construction, namely -
and then they set out the Schmidt principle. Further down they say:
That operation of s. 51(xxxi) to confine the content of other grants of legislative power, being indirect through a rule of construction, is subject to a contrary intention either expressed or made manifest in those other grants. In particular, some of the other grants of legislative power clearly encompass the making of laws providing for the acquisition of property unaccompanied by any quid pro quo of just terms. Where that is so, the other grant of legislative power manifests a contrary intention which precludes the abstraction from it of the legislative power to make such a law.
They then go on to consider whether the power under 51(xviii) manifests that contrary intention and they hold that it does. They also say at page 161 at about point 3:
The cases also establish that a law which is not directed towards the acquisition of property as such but which is concerned with the adjustment of the competing rights, claims or obligations of persons in a particular relationship or area of activity is unlikely to be susceptible of legitimate characterization as a law with respect to the acquisition of property for the purposes of s. 51 of the Constitution.
Now, we say that is important, your Honour, because our argument is an argument which depends upon the manner in which other laws are characterised. It is a confined argument. It is an argument which is confined to Parts 8 and 9 of the Workplace Relations Act.
GLEESON CJ: There are two possible ways in which this principle might operate in the present case. One would be to say that the Commonwealth Parliament may not make a law with respect to trading corporations formed within the limits of the Commonwealth, which is a law for conciliation and arbitration for the prevention and settlement of industrial disputes purely within the limits of any one State.
MS TATE: Yes, your Honour.
GLEESON CJ: A different approach based on a similar principle might be to say when you come to construe paragraph (xx), you seek a construction that would minimise the possibility of empowering Parliament under paragraph (xx) to make a law with respect to conciliation and arbitration for the prevention and settlement of industrial disputes within the limits of any one State.
MS TATE: Your Honour is suggesting ‑ ‑ ‑
GLEESON CJ: The second I take to be the approach that was urged by Mr Walker.
MS TATE: Yes, your Honour.
GLEESON CJ: Is the former the approach that you are urging?
MS TATE: It is the approach that we are urging, yes, your Honour.
GLEESON CJ: That really is the point of departure?
MS TATE: That is the point of departure between Victoria and New South Wales. However, of course, we support in the alternative the argument that is put by New South Wales to this Court that even if the express restriction within 51(xxxv) does not operate as a substantive limitation on 51(xx), nevertheless it provides a powerful reason for favouring a narrow construction of 51(xx) as opposed to a broad construction. So we support the submissions of New South Wales, but we put them in the alternative. We seek to argue that there is a substantive limitation that can be drawn from 51(xxxv).
Your Honours, if I could draw your attention then to the case of Newcrest Mining 190 CLR 513. We would submit first that all of these principles are applied in Newcrest Mining: the principle of coherence, the principle that is drawn from Schmidt’s Case, the consideration of whether the grant of the power manifested a contrary intention and, fourthly, whether the particular law was susceptible to the relevant form of characterisation. The relevant law considered in Newcrest Mining was the National Parks and Wildlife Conservation Act 1975, an Act which prohibited mining in Kakadu National Park. Under a series of proclamations under that Act the area of the park was extended with the Commonwealth absorbing Newcrest’s interests in land and minerals.
Now, if I could draw your Honours’ attention to some passages in the judgment of your Honour Justice Gummow at page 593. At the top of page 593 your Honour refers to a judgment of Chief Justice Mason in Mutual Pools which is to the same effect as the principles I have already enunciated. Your Honour then confirmed that it is a principle of construction. At the bottom of page 593 your Honour summarises the position of the appellants which was a position whereby they sought to establish that:
while s 122 does authorise the making of a law with respect to the acquisition on just terms of property for the government of any territory, it does not authorise the making of a law which does not provide for just terms.
Then at page 595 your Honour says:
There is, the appellants submit, no relevant distinction between the text of s 122 and that of s 51 in the application of par (xxxi) to other heads of power in the Constitution. These submissions should be accepted.
At the bottom of page 595 your Honour notes, of course, that:
There are laws in respect of which “just terms” is an incongruous notion. Thus, laws imposing a fine or a forfeiture do not involve acquisitions that permit of just terms. Otherwise, and as a general proposition, when par (xxxi) applies to another subject matter of the legislative powers of the Commonwealth, it is to be regarded as limiting legislative power with respect to the acquisition of property for that purpose.
Then your Honour says the proposition is clearly subject to “any contrary intention” and your Honour then sets out the passage from the joint judgment in Nintendo to which I have already taken your Honours. Then at the bottom of page 597, your Honour enunciates the basic proposition for the construction of the Constitution. Your Honour says:
The basic proposition is that each provision of the Constitution, including s 122, is to be read with other provisions in the same instrument. Accordingly, and at least prima facie, par (xxxi) of s 51 and s 122 should be read together. Section 122 is not to be torn from the constitutional fabric.
At about point 5 of the page, your Honour, in referring to a judgment of Justice Mason in Western Australia v The Commonwealth, said:
His Honour proceeded on the footing that the Constitution is to be treated as one coherent instrument for the government of the Federation –
Then at page 604, at about point 5 of the page, your Honour then emphasised the limited utility of the phrase “plenary power”, and I think in this case your Honour has already indicated that it is not an expression which your Honour is prepared to use. Your Honour says:
The phrase “plenary power” appears first to have entered the constitutional discourse in what was then the British Empire in a trilogy of Privy Council decisions. These concerned respectively the powers of the subordinate legislatures of India, Ontario and New South Wales. The phrase “plenary power” was used in the course of rejecting submissions that by reason of those legislatures themselves being delegates of the Imperial Parliament they were incompetent to pass what would now be identified as delegated legislation. These decisions were not concerned with the respective legislative powers inter se of the components of a federation.
Your Honour points out that, nevertheless, they were relied upon in the Engineers’ Case. Then at 605, at about point 2, your Honour continues:
The phrase “plenary power” thus entered Australian federal constitutional law not with reference to s 122, but to emphasise the nature of the grants in s 51.
Your Honour then says – and this is a passage upon which we rely:
Those grants are nonetheless “plenary” despite the operation of par (xxxi).
Then your Honour draws the inference:
There is no apparent reason why s 122 should be any the less “plenary” in nature if the constitutional guarantee also is applicable to laws made under that head of power.
Then at page 606, at about halfway down that page, your Honour deals with the submission from the Commonwealth that in 122 there is an absence of the words “subject to this Constitution”. Your Honour says:
The phrase “subject to this Constitution” also serves in s 51 to emphasise that the subject matter with respect to which the Parliament otherwise may make laws under s 51 is restrained by provisions such as ss 92, 99, 100 and 116 of the Constitution.
And here is the passage upon which we place particular emphasis:
But the same result would follow from the operation of the prohibitions in which those sections are expressed without the confirmatory warning in s 51 itself. No particular conclusion follows in this respect from the presence (in s 51) or the absence (from s 122) of the phrase “subject to this Constitution”. It can hardly be suggested that s 122 operates other than subject to the Constitution, and, in particular, that it is not to be read with the Constitution as a whole.
Then at the bottom of page 607 your Honour concludes:
Neither the identification of s 122 as conferring “plenary power” nor the absence from the section of a phrase such as “subject to this Constitution” supplies the necessary contrary intention to displace what otherwise, upon a textual analysis of the Constitution as a whole, is the operation of the constitutional guarantee upon laws made for the government of the Northern Territory.
Now, Justice Gaudron in this case agreed with Justice Gummow at page 561, and I will not take your Honours to that judgment, but she also offered an alternative analysis, namely that the law was supported by the external affairs power, in any event, and the external affairs power was clearly subject to the restriction in section 51(xxxi), and your Honour Justice Gummow agreed with Justice Gaudron in acknowledging that the law was supported by multiple heads of power.
Justice Kirby at page 654 adopted a similar analysis, agreeing with Justice Gaudron and dealing with the arguments that the restriction under (xxxi) could not apply because the power under 122 was a plenary power and your Honours will see ‑ ‑ ‑
KIRBY J: I put the word “plenary” in inverted commas to show that I had a similar view to Justice Gummow and I suggested that it had led the Court into error in respect of the so-called plenary view of section 122.
MS TATE: Yes, your Honour. Your Honour indeed endorsed the principle from Schmidt’s Case at page 654, the Owen Dixon principle, and your Honour noted:
That principle has been applied by this Court many times in relation to the interaction of s 51(xxxi) and other heads of legislative power in s 51. The same rule applies, with precisely the same force, in respect of the other grants of legislative power appearing in the Constitution, including s 122.
KIRBY J: Where was the reference to Schmidt?
MS TATE: The reference to Schmidt, your Honour, is at page 654 at footnote (473), and your Honour actually sets out that passage to which I have taken the Court. But in paragraph 4, which is about point 7 of the page, your Honour Justice Kirby says:
The foregoing –
that is, the principle in Schmidt’s Case –
is not to deny that the territories power in s 122 may properly be described as “plenary”. Nor does it refute the amplitude of the power or its analogies to the general powers of government enjoyed by a State in relation to its own domain. But where there is an express constitutional safeguard, restriction or qualification, it does not erase the plenary power. It simply controls its exercise in relation to that particular subject matter specifically provided for.
KIRBY J: Does that present a distinction from this case in that with the acquisition of property you either give just terms or you do not, whereas with the settlement of what might loosely be called industrial disputes or industrial concerns, you can do it through arbitration and conciliation but there have traditionally been other ways to do it. Wages boards was one way and, as now presented, direct legislation is another, and the States could directly legislate because they were not subject to the restriction in section 51(xxxv). So is that a point of distinction between this line of territory and the present case?
MS TATE: Well, we would say not, your Honour. We would say what is important to keep in mind is that the application of this principle will depend upon how one characterises the particular law at issue. We would say that a law which provides for what I think Justice Hayne described as the establishment or the securing of industrial harmony, we would say that such a law was not a law for the prevention and settlement of industrial disputes. We would accept the distinction that your Honour was drawing between a law which had the effect of establishing industrially harmonious conditions, which indeed may be by the provision of minimum entitlements to an employee. We have not challenged those parts of the Act which prescribe minimum entitlements for an employee on the basis of this argument.
GUMMOW J: Just remind me again, which parts do you attack relying upon this submission, Ms Tate?
MS TATE: Only two parts, your Honour, and that is Part 8 and Part 9.
GUMMOW J: Parts 8 and 9.
MS TATE: Part 8 is concerned with workplace agreements and Part 9 ‑ ‑ ‑
GUMMOW J: And 9 with industrial action.
MS TATE: ‑ ‑ ‑ with industrial action and, indeed ‑ ‑ ‑
HAYNE J: In particular, there is no challenge to Part 13, the dispute resolution process, is that right?
MS TATE: No, your Honour – well, there is no challenge to Part 13.
KIRBY J: What is the logic of that, given that the dispute resolution mechanism can be done through conciliation and arbitration or in other ways? Has the Constitution in paragraph 51(xxxv) indicated that the mandated way for federal legislation is conciliation and arbitration by an independent body?
MS TATE: Your Honour, perhaps if I could have an opportunity to give further reflection to that question over the luncheon adjournment, but we have sought to confine the argument so that ‑ ‑ ‑
GUMMOW J: Well, I can understand what you say as to the link with Part 9, which is industrial action, but how do you get a footing into Part 8 from your argument about the construction of 51(xxxv)?
MS TATE: The provisions in Part 8 which provide for the formation of workplace agreements, your Honour, part of the terms of those agreements will be provisions for the resolution of disputes. Indeed, there is a model dispute resolution scheme provided which can be ‑ ‑ ‑
HAYNE J: It was that to which I drew your attention, Part 13.
MS TATE: Part 13 only applies if there is a dispute resolution agreement in Part 8, which incorporates that process from Part 13. But perhaps if I could return to the specifics of that, your Honour, that in principle our argument is this, that if there are laws within the amending Act which can be characterised as laws for the prevention and settlement of industrial disputes, then those laws ‑ ‑ ‑
GUMMOW J: By conciliation and arbitration?
MS TATE: No, your Honour.
GLEESON CJ: You seem to be leaving the words “conciliation and arbitration” out of paragraph (xxxv).
MS TATE: No, your Honour, I am not doing that. What I intend to do is to offer an argument for the construction of the power under 51(xxxv) which says that the core subject matter of that power is that it is a power for the prevention and settlement of industrial disputes ‑ ‑ ‑
GLEESON CJ: By conciliation and arbitration.
MS TATE: ‑ ‑ ‑ and then, your Honour, it is our argument that there are two restrictions imposed upon that power. One is that the disputes must be disputes extending beyond the limit of any one State. The other restriction is that the prevention and settlement of the dispute must be by means of the process of conciliation and arbitration. I will take your Honours to the Convention Debates to make good that construction of the scope of the power.
HAYNE J: Just before you depart, and I know you are coming back to this after the adjournment, but can I draw particular attention to your pleading, because it is not apparent to me that there is a challenge in your pleading to Part 13. It is not a question of identifying what the argument is; it is a question of identifying what the matter is. That is your pleading.
MS TATE: Yes, your Honour. Certainly, we would hope that at least within the pleading it is apparent that this argument is only directed at Parts 8 and 9. Whether it ought to have been directed at other parts is something that I will take an opportunity to consider to at least be able to reflect upon it. But, your Honours, the principles for which we contend, as I say, are apparent through the authorities to which I have already taken your Honours with respect to 51(xxxi). What I would now seek to do is to consider how the endorsement of the coherence principle and the rule of construction from Schmidt’s Case have affected the construction of other powers under section 51 independently of the context of 51(xxxi).
The most striking example is to be found in the relationship between the power under 51(xiii) to make laws with respect to banking other than State banking, and the power to make laws with respect to trading and financial corporations, 51(xx).
Now, this relationship was recognised in the Bank Nationalisation Case and it was recognised and confirmed in the more recent case of Bourke v State Bank of New South Wales (1990) 170 CLR 276, but if I could take your Honours first to the Bank Nationalisation Case. In that case, of course, the Court famously held as invalid those laws which provided for the compulsory acquisition by the Commonwealth Bank of Australian shares in Australian private banks. It also held invalid the laws insofar as they provided for the management of Australian banks by directors chosen and appointed by joint action of the Commonwealth Bank and the Treasurer of the Commonwealth, and also invalid a prohibition on the carrying on of banking business in Australia by private banks.
The Act did not apply to State banking, that is, banking controlled and conducted by the States as banker, but otherwise it purported to give a monopoly of banking to the Commonwealth Bank. Now, four of the six Judges made observations about the relationship between 51(xiii) and 51(xx). In particular Chief Justice Latham considered the relationship, and he did this at page 184 of the report in what we submit is an important passage. At about point 2 of the page Chief Justice Latham said:
Under s. 51 (xx.) of the Constitution there is power to make laws with respect to financial corporations formed within the limits of the Commonwealth. Under s. 51 (xiii.) there is power to make laws with respect to banking other than State banking. A State bank would almost certainly be a corporation, and, if so, it would be a financial corporation. If pl. (xx.) were construed to mean that the Commonwealth Parliament could pass any law whatever which touched and concerned financial corporations, then the Commonwealth Parliament could make laws controlling State banks. The result would be that the exception of State banking from the power conferred by pl. (xiii.) would mean nothing. When the two provisions are read together it is a reasonable conclusion that pl. (xx.) was not meant to reduce to complete insignificance the specific provision excluding State banking from Federal legislative power.
Thus the Constitution must be read as a whole, and each power conferred upon the Federal Parliament must be read in the context of the words prescribing the other legislative powers of the Parliament.
The Constitution assigns only specific legislative powers to the Commonwealth Parliament. It is a Federal Constitution, not a unitary Constitution. This has been emphasised again and again in the judgments of this Court, and in no case more clearly than in the Amalgamated Society of Engineers v Adelaide Steamship Co. Ltd. where reference is made to the conclusion “as to which this court has never faltered, that the Commonwealth is a government of enumerated or selected legislative powers” . . . “It is undoubted that those who maintain the authority of the Commonwealth Parliament to pass a certain law should be able to point to some enumerated power containing the requisite authority.” Accordingly, no single power should be construed in such a way as to give to the Commonwealth Parliament a universal power of legislation which would render absurd the assignment of particular carefully defined powers to that Parliament. Each provision of the Constitution should be regarded, not as operating independently, but as intended to be construed and applied in the light of other provisions of the Constitution. Thus an endeavour should be made to “reconcile the respective powers . . . and give effect to all”.
Now, we submit that this passage supports the proposition that where a specific power contains an express restriction, as does the banking power under 51(xiii), a more general power such as 51(xx) ought not to be construed as authorising the making of laws which would reduce to insignificance the specific restriction upon a power.
KIRBY J: Was that thought behind the prohibition on the making of federal general rules, that you could not make an award that established a common rule?
MS TATE: That 51(xxxv) did not extend to the making of general rules.
KIRBY J: Common rules.
MS TATE: Common rules.
KIRBY J: That if federal law was to intrude into the matter of industrial relations, it had to be limited to the interstate aspect which, as Justice Callinan keeps reminding us, was rather undone by the paper disputes.
MS TATE: Yes, your Honour, we accept that it is a very ‑ ‑ ‑
KIRBY J: But it also had to be done through this New Zealand invention of conciliation and arbitration of industrial disputes to replace the strife that had occurred in the 1890s.
CALLINAN J: I think in one of the cases – I just cannot remember which one it is now – but this Court acknowledged that the distinction between, in effect, paper disputes and common rules was a very technical one.
MS TATE: Indeed, your Honour, reading through all of the old 51(xxxv) cases, one can see that the power was given more and more breadth, and we do not decry the breadth of that power.
KIRBY J: But it still brought you to the umpire, which was the central idea of the industrial relations power.
MS TATE: Yes, your Honour.
CALLINAN J: Well, Justice Windemeyer said in (1959) 107 CLR 208 at 268 in R v The Commission:
To permit the creation of a malady so that a particular brand of physic may be administered must still seem to some people a strange way to cure the ills and ensure the health of the body politic. But the expansive expositions by this Court of the meaning and effect of par. (xxxv.) . . . have brought a great part of the Australian economy directly or indirectly within the reach of Commonwealth industrial law –
The first part does not sound like a legal statement. It sounds like a political one. But that is settled law in this Court.
MS TATE: Well, certainly the notion of what falls under the concept of an industry was clearly expanded and expanded. But if I could just clarify exactly the proposition that we rely upon from Chief Justice Latham’s judgment, it is not a proposition based on the question of whether a general power might subsume a specific power. It is not a question of saying that there cannot be overlap or that one power might not have been included for the avoidance of doubt, and we refer your Honours but do not take your Honours to the case of Seas and Submerged Lands ‑ ‑ ‑
CALLINAN J: Excuse me, Solicitor, I think you were going to give us some other references in the Bank Case, were you? Is that correct, or is it just Chief Justice Latham?
MS TATE: Perhaps, your Honour, if I am able to also mention that after the luncheon adjournment, your Honour. I have some of the references but it is not complete.
KIRBY J: It will take all your lunch hour to read that case.
MS TATE: It does not matter, your Honour, it is an important case. We would say that we can distinguish the Seas and Submerged Lands Case (1975) 135 CLR 337 at 471, where the Court there held that the external affairs power, 51(xxix), was not to be read down by the existence of the specific provision in 51(xxx) that the Commonwealth Parliament had the power to make laws with respect to “the relations of the Commonwealth with the islands of the Pacific”. We would say that the Seas and Submerged Lands Case is authority for the proposition that the presence of a more specific provision does not in itself reduce the content of a more general power.
We do not put our argument on the basis of the distinction between the general and the specific, as I think my learned friend, Mr Walker, did. For us it is not a question of saying that if one construes the general power without any restriction, then there is a risk that the specific power will be rendered otiose. That is not our argument. Our argument is that if the general power is construed, is not being subject to the restriction on federal legislative power, which is within a specific power, then what is defeated is the restriction on that power. As Chief Justice Latham says ‑ ‑ ‑
KIRBY J: It is a hard argument to run in relation to external affairs, is it not? It is just another head of power subject to the Constitution. You therefore read it subject to 51(xxxi). It is pretty hard to justify a distinction of that head of power and all the other heads of power. What is so special about it? It is just another head of power.
MS TATE: I do not see 51(xxix) as a special power in that sense, your Honour. It is just that when this Court came to consider the scope of 51(xxix), the external affairs power, an argument was put that that power needed to be understood as reduced in content because of the presence of the specific power in 51(xxx) which was a power ‑ ‑ ‑
KIRBY J: Sounds like a special case.
MS TATE: Well, that argument was rejected and we say that it is authority for the proposition that the mere presence of a specific power without a restriction – there is no restriction in 51(xxx) - the mere presence of a specific power is not sufficient to reduce the content of the general power, but where you have a specific power that is subject to a restriction or a prohibition, then to construe the general power as not also subject to that restriction or prohibition is to reduce the restriction to nothingness.
GLEESON CJ: Central to your argument is the proposition that paragraph (xxxv) conveys a prohibition against dealing with industrial matters other than by conciliation and arbitration?
MS TATE: It is one of the restrictions, your Honour. The other restriction, we say, is a prohibition on dealing with the prevention and settlement of industrial disputes ‑ ‑ ‑
GUMMOW J: Not just industrial matters, industrial disputes.
MS TATE: That is right, your Honour. We do not put it as broadly as industrial matters, industrial disputes.
CALLINAN J: In the same way as the banking and insurance power precludes dealing with State banks and State insurance corporations.
MS TATE: Yes, exactly, your Honour.
CALLINAN J: But you mentioned the Seas and Submerged Lands Act Case. Despite what has been said, it remains difficult to reconcile it with Bonser v La Macchia. One sees attempted reconciliations, they are not convincing.
MS TATE: Your Honour, in this area, the area of the interrelationship of the powers, it is very difficult to distil exact principles. We would say that ‑ ‑ ‑
CALLINAN J: That is why I said yesterday there has been a lot of contradiction in this Court over the years, self‑contradiction.
MS TATE: Your Honour, we would say for instance that the judgment in Russell v Russell (1976) 134 CLR 495 can be distinguished from the argument that we put. There the affirmation of the grant of power within the matrimonial causes power, 51(xxii), which is a power with respect to:
divorce and matrimonial causes; and in relation thereto, parental rights, and the custody and guardianship of infants –
in that case the presence of ‑ ‑ ‑
GUMMOW J: The question arises, what happens to the custody of an infant which is the child of a marriage when his parents are not being divorced?
MS TATE: Yes, your Honour, that is right. Of course, we accept the authority of Russell v Russell that the presence of 51(xxii) and, indeed, the terms in which 51(xxii) has been formulated should not be read so as to reduce the content of the legislative power in 51(xxi) in the marriage power. But there, we would say, the terms in which 51(xxii) have been formulated are terms where there is an articulation of the scope of the affirmative grant of power. There is there, in 51(xxii), no prohibition or restriction on the power, it is not like 51(xiii), it is not like 51(xiv), it is simply, as I say, an articulation of what it is that the power includes. In that sense, the presence of 51(xxii) and its terms ought not to be used to construe the scope of the marriage power more narrowly. We accept the authority of Russell v Russell and we say it can be distinguished from the submissions that we put today.
GUMMOW J: What do you say of the proposition that 51(xxxv) provides a special kind of machinery for dealing with a special kind of dispute? That was said by Mr R.G. Menzies, KC in a paper he delivered in 1933, reproduced in studies in the Australian Constitution by what was then the newly founded Institute of Political Science at page 56? Is that not right, “a special kind of machinery for dealing with a special kind of dispute”? Then we get into industrial disputation generally, then we get into industrial relations, then we get some sort of implicit negative.
MS TATE: We would say, your Honour, that we do not gainsay the description that Sir Robert Menzies gave to that power. It is a particular power for dealing with particular disputes, namely, industrial disputes. We would say it is a dispute ‑ ‑ ‑
GUMMOW J: You want to say, “and not otherwise”.
MS TATE: “And not otherwise”, yes, your Honour.
CALLINAN J: Contrary to what Mr Menzies said, what the Court said in Australasian Meat Industry Employees Union; Ex parte Aberdeen Beef (1993) 176 CLR at 159, where the Court referred to a community of interest being sufficient, if the people who have been served with the log of claims have a community of interest that goes far, far beyond any 1930s doctrine of what is an industrial dispute.
GUMMOW J: Yes. Sir Robert also said:
The history of the interpretation of the conciliation and arbitration power is a perfect illustration of the way in which politico-legal philosophy of personally disinterested judges can affect their interpretation of constitutional documents.
He said that at page 58 and he repeated it later in his memoirs after he retired.
HAYNE J: The view expressed by Mr Menzies reflects also the view expressed by Higgins in New Province, is it not? If you go to the articles on which New Province law and order was based – they begin in 29 Harv L Rev 13 ‑ there are three of them, they are then published as the book ‑ it begins by saying:
The new province is that of the relations between employers and employees. Is it possible for a civilized community so to regulate these relations as to make the bounds of the industrial chaos narrower, to add new territory to the domain of order and law?
Special treatment - conciliation and arbitration for special kinds of dispute, industrial disputation, adding a particular character, interstateness.
MS TATE: Yes, your Honour. If I could turn just immediately ‑ ‑ ‑
GUMMOW J: After lunch.
MS TATE: No, your Honour, I may be able to arrive at that stage of the argument before lunch but your Honours will appreciate it is a structured argument – step by step as my learned friend, Mr Walker, would say.
CALLINAN J: Solicitor, you are not going to answer Justice Hayne’s question. I am not critical - you were interrupted before - I just wanted to know what the other authority was to similar effect to what Chief Justice Latham said in the Banking Case. I think you said there was a later case in which ‑ ‑ ‑
MS TATE: Yes, Bourke v Bank of New South Wales 170 CLR 276, your Honour.
GUMMOW J: You have a case coming up in August, do you not, on the insurance section?
MS TATE: Yes, that is right. Indeed, your Honours, I will be addressing your Honours on the whole of the judgment of Bourke’s Case, the joint judgment in Bourke’s Case, in that case, but I will not attempt to do that here today.
CALLINAN J: At which pages, Solicitor?
MS TATE: The case that is coming up before this court ‑ ‑ ‑
CALLINAN J: No, I am sorry, Bourke.
KIRBY J: The State Bank Case.
CALLINAN J: Do you want to cite any passages? Do not read them, just give ‑ ‑ ‑
MS TATE: Your Honour, 285 is a very useful passage, but it is actually a short judgment but a very dense judgment. So it is actually rather the whole of the judgment that is relevant to these questions. The case that is about to be heard by the Court is the case of Andrews v Victorian WorkCover Authority, in case your Honour Justice Callinan was interested.
If I could just turn immediately to the question that the Chief Justice asked me in relation to our point of departure from the New South Wales submissions, what we seek to emphasise is that from the principles that I have stated one can draw a substantive limitation and not simply a direction about favouring a narrow or broad construction. The substantive limitation was drawn in the Bank Nationalisation Case at pages 203 to 204. If I could take your Honours to that. At 203 at about point 8 Chief Justice Latham says:
Any banking corporation carrying on business in Australia must be either a foreign corporation or a corporation formed within the limits of the Commonwealth. If under pl. (xx.) there is therefore complete power to pass any law of any description in so far as it is made applicable to banking corporations, pl. (xiii.) in relation to “banking” would be required only for the purpose of giving power to make laws with respect to individual persons carrying on banking business – which would be a rather surprising result.
There is, in my opinion, a decisive argument against the suggested interpretation of s. 51 (xx.). It is, in my opinion, impossible to reconcile that interpretation with the provisions in pl. (xiii.) relating to State banking. Upon that interpretation, if State banking were carried on by a corporation, that corporation, being a financial corporation formed within the limits of the Commonwealth, would be completely subject to any Federal law made under pl. (xx.). The result would be that the exclusion of State banking from the banking power would be entirely deprived of effect in all such cases.
And here I emphasise again that it is not simply the power that is reduced to nothing but it is the reducing to nothing of the exclusion.
The Constitution should not be construed so as to bring about a result so unreasonable if another construction is reasonably open.
There we have the construction basis.
In my opinion such a construction is reasonably open. The difficulties to which I have referred disappear if s. 51 (xiii.) is interpreted as a special provision which provides for the whole legislative power of the Commonwealth Parliament so far as laws with respect to banking corporations and banking are concerned. This is a proper occasion for interpreting a provision “as excluding cases expressly dealt with elsewhere . . . notwithstanding the generality of the words”: John Deere Plow Co. Ltd. v. Wharton. Upon this view pl. (xx.) should be regarded as not applying to corporations so far as they are engaged in banking. Accordingly, in my opinion s. 51 (xx.) is irrelevant for the purposes of determining the validity of any provisions of the 1947 Act.
KIRBY J: What was that page, please?
MS TATE: Your Honour, that was at page 204.
GUMMOW J: But he was postulating or talking about a law that said only the Commonwealth Bank will carry on the business of banking across the country, and on the face of it that could be supported by either of the two heads of power subject to the exception for one of them.
MS TATE: Yes, your Honour.
GUMMOW J: How are you talking about in Part 8 of a law that could be supported by 51(xxxv) carving out admittedly the purely State activity? It does not seem to be an analogy that is on all fours.
MS TATE: No, your Honour, we would say it is not contested that Parts 8 and 9 do not satisfy the restrictions that are present in 51(xxxv), so if ‑ ‑ ‑
GUMMOW J: But they could not be passed under 51(xxxv), even with the restriction.
MS TATE: They could not have been passed under 51(xxxv) and that appears to be conceded, your Honour. So if we were right in the argument ‑ ‑ ‑
GUMMOW J: It is an apples and oranges situation perhaps, which it was not in the Banking Case.
MS TATE: Perhaps it depends upon the ‑ ‑ ‑
GUMMOW J: There were concurrent sources of power for the law. There is no concurrent source for power of this law.
MS TATE: No, but, of course, had the Commonwealth sought to rely upon 51(xxxv) ‑ ‑ ‑
GUMMOW J: That is another question.
MS TATE: ‑ ‑ ‑ no doubt it would have drafted it in such a way that those restrictions were satisfied. We would say that ‑ ‑ ‑
GUMMOW J: Of course, but the question then becomes one of intruding on a political choice of legislatures of the day as to which way they go in dealing with a particular political problem.
KIRBY J: Well, if the Constitution requires it, that is what we have to do.
MS TATE: Yes.
GUMMOW J: That is the area of debate, I think.
MS TATE: We would say, your Honour, that it is not simply a matter of choice at a political level as to which ‑ ‑ ‑
GUMMOW J: Unless constrained by the Constitution.
MS TATE: Yes, unless constrained by the Constitution.
GUMMOW J: Of course, but then the question is: how is it constrained where there is not a concurrent head of power with a restriction in one but not in the other?
MS TATE: Yes, your Honour.
HAYNE J: Which leads to this at the moment unbridged gap of, what is the restriction that is present?
MS TATE: Yes, your Honour. The inference we seek to draw from those passages to which I have just taken the Court is that the inference can be one of a substantive limitation on another power. In that passage to which I have taken the Court, the inference was indeed that there was a mutual exclusivity of power between 51(xx) and 51(xiii).
This Court in Bourke v State Bank of New South Wales did not approach the matter as a question of exclusivity. That is to say that mutual exclusivity is to say that 51(xiii) contains the whole of the power for banking and there can be no overlap with 51(xx), so a law must be supported either by one or the other. The approach taken by this Court in Bourke v State Bank is not really, in our submission, of that form; rather there, although a substantive limitation was inferred, the substantive limitation was rather one which recognised that of course a law might be supported by a whole range of powers. It might be supported by 51(xx) and it might be supported by 51(xiii), as it were, at the same time, but if it is a law with ‑ ‑ ‑
GUMMOW J: That is the doctrine of the Court, is it not?
MS TATE: That is right. If it is a law with respect to banking, then even if it is supported by the corporations power, it must satisfy the restrictions of 51(xiii). We read the judgment in Bourke as not endorsing an approach whereby the powers are mutually exclusive; we read the judgment in Bourke v State Bank of New South Wales as rather adopting that alternative formulation which I have just put to the Court.
If I could take your Honours to Bourke v State Bank, there are only a couple of passages to which I wish to take your Honours. A lot of the judgment was concerned with what is the appropriate test for characterising as a law a law as a law with respect to State banking. That is the restriction, and a law must not be a law with respect to State banking made by the Commonwealth Parliament. Really, the bulk of the judgment is concerned with what is the proper test to apply. Is it the same as the ordinary test or is it ‑ ‑ ‑
GUMMOW J: The net result of this case was that the State Bank of New South Wales could engage in misleading or deceptive conduct.
MS TATE: Probably not a direct consequence, your Honour.
GUMMOW J: Without control by a federal law.
MS TATE: In any event, your Honours, much of the judgment, as I say, is taken up with those considerations, but if I could simply refer your Honours to page 285 of the judgment. Perhaps I should simply first explain that this case was an illustration of the application of the principle in Schmidt’s Case ‑ ‑ ‑
GUMMOW J: There is that word “plenary” at 284, about 10 lines from the bottom.
MS TATE: Yes, your Honour.
GUMMOW J: Then where do we go from there?
MS TATE: Well, I was just explaining that the general context of this case, your Honour, which was a section 52 setting – obviously the prohibition on misleading and deceptive conduct by corporations and trade and commerce. The definition of “financial corporation” in section 4 of the Act was to:
a financial corporation within the meaning of paragraph 51(xx) of the Constitution and includes a body corporate that carries on as its sole or principal business the business of banking (other than State banking not extending beyond the limits of the State concerned) . . .”
Now, that definition was held at first instance by Justice Wilcox to include all corporations that had banking as their sole or principal form of business. He held that providing State banking within the limits of the State was not the sole or principal business of a bank, then the bank fell within the definition of the Act. Now, this, of course, meant that prima facie it appeared that the Act transgressed the contravention or transgressed the prohibition in 51(xiii). At the top of page 285 their Honours, having referred to Schmidt, say:
In this context, some qualification must be made to the general principle that a law with respect to a subject‑matter within Commonwealth power does not cease to be valid because it affects a subject outside power or can be characterized as a law with respect to a subject‑matter outside power . . . The principle cannot apply when the second subject‑matter with respect to which the law can be characterized is not only outside power but is the subject of a positive prohibition or restriction. If a limitation is found to be of general application, then the fact that it is contained within one of the paragraphs of s. 51 does not deny it a wider operation; the remaining paragraphs are then to be construed as being subject to the limitation.
So there we say that is the basis of our submission that one can infer a substantive limitation upon power from the presence of an express restriction or prohibition within another specific power.
GUMMOW J: But is not critical to the Court’s analysis the point made at 286, the first paragraph there:
Two broad alternatives are possible. First, it may be that the Commonwealth is positively prohibited from making laws . . . Alternatively, Commonwealth legislative power might simply not extend . . . to the extent that those laws touch or concern State banking.
Now, how do you then apply that reasoning to 51(xxxv), which is talking about conciliation and arbitration for the prevention of disputes?
MS TATE: We would say, your Honour, that of course our argument does depend upon how one characterises the scope of the power, and indeed this is Justice Hayne’s question. Is it to be construed as a power with respect to conciliation and arbitration, which we accept was perhaps a casual and abbreviated way in which that power had often been described.
GUMMOW J: Yes, but I have not made myself clear, Solicitor. Look at the bottom of 288, about 10 lines from the bottom:
The only satisfactory solution to this problem –
and the two possibilities are put up –
is to accept that there is no exclusive State power to make laws with respect to State banking. But the words of s. 51(xiii) still require that, when the Commonwealth enacts a law which can be characterized as a law with respect to banking, that law does not touch or concern State banking –
Now, how do you apply that reasoning to Part 8 of the Act we are dealing with today?
MS TATE: Well, firstly, your Honour, we would accept that of course we are not suggesting that there is an exclusive State power. We accept that that is not a proper approach. What we say is that if Parts 8 and 9 can be characterised as a law with respect to the prevention and settlement of industrial disputes ‑ ‑ ‑
GUMMOW J: That is only part of the head. That is your problem, is it not?
MS TATE: Well, we would say if it can be characterised as a law with respect to the prevention and settlement of industrial disputes, then that law must satisfy each of the restrictions within the power, both the restriction that the disputes extend beyond the limits of any one State and the restriction that the ‑ ‑ ‑
GUMMOW J: But you leave out that part of the head of power about conciliation and arbitration.
MS TATE: Well, your Honour, indeed we see that as a second and additional restriction. We have made that clear in our written submissions.
GUMMOW J: It is not so much a restriction. It is the content in the first place. It is what Justice Higgins was telling the Americans about.
MS TATE: We would say, your Honour, that if the power ‑ ‑ ‑
GUMMOW J: This was the new way of solving the problem. They had been shooting strikers.
KIRBY J: And the only way available to the Commonwealth
GUMMOW J: They had been shooting strikers in the streets of Chicago in the 1890s, in the famous Pullman strike. There was this judge from Australia coming and saying, “Look, we’ve got the answer”.
MS TATE: We accept, your Honour, that that was the perhaps novel and preferred means of dispute resolution for industrial disputes, but we would say that if there were two simple alterations to the terms in which paragraph (xxxv) was formulated, we say our argument would be unanswerable. The two changes would be though these, that if 51(xxxv) had been formulated as a power to make law with respect to the prevention and settlement of industrial disputes extending beyond the limits of any one State by conciliation and arbitration – that involved two changes: the introduction of the word “by” and the shifting of the terms “conciliation and arbitration” to the end of the paragraph – we would say that had it been formulated in those terms, then it clearly would have followed that the analysis that we are suggesting was the appropriate and applicable analysis. We then say that those two very minor changes in the text of the paragraph could not be responsible for altering the whole of the analysis and the whole of the conceptualisation of that paragraph.
GLEESON CJ: Is that a convenient time?
MS TATE: Yes, your Honour.
GLEESON CJ: Solicitor-General, we will add 15 minutes to the time allotted to you because of the time taken by New South Wales this morning and we will resume at 2.00 pm.
MS TATE: Thank you, your Honour.
AT 12.45 PM LUNCHEON ADJOURNMENT
UPON RESUMING AT 2.02 PM:
GLEESON CJ: Yes, Solicitor-General for Victoria.
MS TATE: May it please the Court. Could I begin by responding to Justice Callinan’s question as to the page numbers of the other three Justices in the Bank Nationalisation Case who considered the relationship between 51(xx) and 51(xiii). It is Justices Rich and Williams at page 256 and Justice Starke at 301 to 304.
Might I turn then to the question asked by Justice Hayne in relation to Part 13 and whether that ought to have been included as a part of the Act which we challenged on this ground. May I say at the outset that we accept that we ought to have challenged Part 13. We will seek leave to amend the statement of claim to reflect that fact and if perhaps I could, first of all, just explain the operation of Part 13. If I could draw your Honours’ attention to section 353 of the Act, subsection (2) states that:
If a workplace agreement does not include dispute settlement procedures, the agreement is taken to include the model dispute resolution process mentioned in Part 13.
So Part 13 is a model dispute resolution process essentially providing for mediation in relation to entitlements that have been conferred by the Act or by agreement or by an award. It operates as a default procedure, your Honour, and we would say that insofar as that model dispute resolution process is included within agreements, then if we are successful in striking down Part 8, we would strike down the application of Part 13 with respect to those agreements. Similarly, Part 13 will apply to workplace determinations under section 503.
If I could refer your Honours to section 694, first of all, in Part 13, which sets out the model dispute resolution process provided for in that division, and then under subsection (2) it says:
The model dispute resolution process does not apply in relation to a particular dispute, unless it applies in relation to that dispute because of a provision of this Act, other than one contained in this Division, or a term of an award, a workplace agreement or a workplace determination.
So the model dispute resolution process can function as a default resolution process in those four circumstances. If it is contained within a workplace agreement, then, as I say, if we are successful in our challenge to Part 8, then Part 13, insofar as it applies to workplace agreements, would come with it. Similarly, if it applies by reason of workplace determinations – and for that I refer your Honours to section 503, which states when a workplace determination is to be made, essentially the defining section, and section 504(6) provides that:
The workplace determination must require disputes about matters arising under the determination to be dealt with in accordance with the model dispute resolution process (see Part 13).
So, again, if we are successful in relation to Part 9, then, insofar as the model dispute resolution process applies to a workplace determination, it is also struck down. But that does leave two other circumstances, namely, when that model process is provided for directly by the Act or where it is provided for by reason of a term of an award. We would say that in those two respects we accept for consistency’s sake we ought to have brought this challenge in relation to that and, as I say, we seek leave to amend our statement of claim in relation to that. There may be no need for an order to be made.
GLEESON CJ: Yes, it will need to be done formally, but we will have to hear what the Commonwealth says about it in due course.
MS TATE: Yes, your Honour. Then could I return to the question also asked of me by Justice Hayne as to why it is that Part 8 and Part 9 can be characterised as laws with respect to the prevention and settlement of industrial disputes. Particularly I think the concern arose in relation to Part 8 which, of course, is a provision in relation to agreement making.
We would say, first of all, that we do not believe that it is in contest that Part 8 and Part 9 can be so characterised, but further we would rely upon a passage of Justice Callinan’s in Amcor Ltd v CFMEU (2005) 79 ALJR 703 at 727 [131] where Justice Callinan emphasises that an industrial agreement can have a multiplicity of purposes, some of which is the settlement and prevention of industrial disputes. At [131] Justice Callinan says:
An industrial agreement has a number of purposes, to settle disputes, to anticipate and make provision for the resolution of future disputes, to ensure fair and just treatment of both employer and employees, and generally to promote harmony in the workplace.
Then his Honour considers the particular clauses of the agreement. Now, Justice Kirby agreed with that description of the function and role of agreements in an industrial context at paragraph [103] on page 721.
Now, further, we would draw your Honours’ attention to the decision of Caledonian Collieries Limited v Australasian Coal and Shale Employees’ Federation [No 1] (1930) 42 CLR 527 at 552 in the judgment of Justices Gavan Duffy, Rich, Starke and Dixon. At 552 their Honours say near the bottom of the page:
It is equally well established that to constitute an industrial dispute there must be disagreement between people or groups of people who stand in some industrial relation upon some matter which affects or arises out of the relationship.
Now, we would say that statutory provisions which provide for agreement making for those people or groups of people who stand in those industrial relations can therefore properly be characterised as laws with respect to the prevention and settlement of industrial disputes. But also perhaps if I just give your Honours the reference to the judgment of this Court in Waterside Workers’ Federation of Australia v Commonwealth Steamship Owners’ Association (1920) 28 CLR 209 at 218. We say in the judgment of Chief Justice Knox there is support for the proposition that the power under 51(xxxv) ought to be construed as a power for the prevention and settlement of industrial disputes subject to two restrictions, namely, the interstate restriction and the restriction that the process for the prevention and settlement be one of conciliation and arbitration.
GUMMOW J: You keep using this word “restriction”. It is not an exceptional reservation from the grant; it is of the nature of the grant. It is “conciliation and arbitration for” – right?
MS TATE: Yes, your Honour.
GLEESON CJ: The way Dr Evatt put it in argument in the Bank Case in relation to a different power was to say, inform it as an affirmative exception or exclusion, not something outside the primary lines of definition.
MS TATE: Well, your Honour, I accept that it is difficult to determine whether something is within the primary and affirmative grant of a power or whether it should be construed as a restriction. I accept that that is difficult. We would say that Chief Justice Knox in the Waterside Workers’ Case at page 218 characterised the scope of the power in exactly the way that we submit is appropriate. Chief Justice Knox at about point 2 of page 218 said:
Under s. 51 (xxxv.) of the Constitution the Parliament has power to make laws with respect to conciliation and arbitration for the prevention and settlement of industrial disputes extending beyond the limits of any one State. This power may be paraphrased as a power to make laws with respect to the prevention or settlement of industrial disputes subject to two conditions, viz., that the prevention or settlement shall be effected by means of conciliation and arbitration, and that the disputes to be dealt with shall be confined to those which extend beyond the limits of one State.
HAYNE J: Now, be it so. Let us assume that that is complete and sufficient statement. You began this branch of the argument by saying, as I understood it, that there was a restriction or qualification derived from section 51(xxxv) that applied to 51(xx). Do I sufficiently encapsulate the starting point for this branch of your argument?
MS TATE: Yes, your Honour.
HAYNE J: What exactly is the restriction or qualification derived from 51(xxxv) that applies to 51(xx)?
MS TATE: We would say both of those restrictions, your Honour. We would say that if a law is supported by 51(xx) and it is a law that can be categorised as a law for the prevention and settlement of industrial disputes, then that law must satisfy each of the two restrictions or conditions, as Chief Justice Knox put it, of the power under 51(xxxv).
HAYNE J: One aspect of the operation of the impugned laws is to provide minimum conditions: a constitutional corporation shall not pay its workers less than, it shall not provide less leave than. In that operation the law takes out from the realm of disputation the minimum conditions that may be afforded to a worker. What is the connection between 51(xxxv) and 51(xx) that you say is engaged in respect of that operation of the law?
MS TATE: We would say there is no restriction with respect to that operation of the law, your Honour. We draw a distinction between the prescription of minimum terms and conditions of employment by a law and laws which provide for agreement making between particular parties. We would say that the link to a dispute or a potential dispute from the prescription of minimum conditions is too remote. So there is no challenge to Part 7 of the Act on this basis and no challenge to the further provision of minimum entitlements, Part 12 of the Act, your Honour. So we accept that distinction that your Honour has drawn.
Your Honours, if I might seek to make good the proposition that the core of the subject matter of the power is a power with respect to prevention and settlement of industrial disputes and if I could do that by taking the Court to the Convention Debates and most conveniently by reference to the compendium provided by New South Wales with respect to those debates. Under tab 24 of the compendium, your Honours, we have a record of the debates on 9 March 1891 and at page 164, at about point 4 of the page, we have the observation made by Mr Kingston that:
It seems to me that there are no matters of greater importance, in view of our vast commercial and manufacturing interests, than the adjustment of disputes between employers and employees.
Similarly, tab 25, page 688, on the right-hand side column ‑ ‑ ‑
GUMMOW J: You have to read the next sentence, have you not:
Various efforts are being made in the different colonies for the establishment of boards of conciliation and arbitration having this end in view . . . local legislation is incompetent to deal satisfactorily –
et cetera.
MS TATE: But we would say, your Honour, that of course there was a recognition that there might be alternative procedures adopted. The founding fathers chose this particular process, your Honour.
GUMMOW J: Exactly.
MS TATE: We submit that it was chosen as the preferred mechanism, as the mechanism which the Commonwealth Parliament was to use if it was to make laws for the prevention and settlement of industrial disputes. Then at tab 25, your Honour, in the right-hand column of page 688 at about point 3, Mr Kingston again says:
It is impossible, having regard to the disastrous effects which are occasioned to society generally, to leave the contending parties to fight the matter out to the bitter end . . . Conciliation and arbitration therefore seem to me the only means of doing anything towards the settlement of the difficulties to which I refer.
Similarly, at tab 28, page 180, we see Mr Higgins at about point 4 in the left-hand column, says:
What I wish is that the Federal Parliament shall have power to make such regulations as it thinks fit for the termination and prevention of widespread industrial disputes . . . I simply wish to give the Federal Parliament power to legislate on the subject.
Next column, point 3:
It is quite true that in the American Constitution there is no such provision; but at the time it was framed there was not the industrial difficulty that exists now . . . A change is going on, whether we approve of it or not, and we should do our best to meet it, and to prevent even by temporary means, the disaster and distress which must follow upon diversion of trade and industrial disputes. Every morning there appear telegrams in the newspapers dealing with the engineers’ dispute in England, or the dispute in the cotton trade, and we are not without our own experience of shearers’ disputes and shipping disputes.
Then Dr Quick at page 183, left‑hand column at point 2:
At any rate, I concur with Mr Higgins in his argument that industrial disputes of late years have assumed such magnitude and importance in all civilized countries that it is incumbent upon any Parliament having jurisdiction to grapple with the question and to find some means of solving it.
So there was a prescription of the means, your Honour, and there a further ‑ ‑ ‑
GUMMOW J: Where are you reading from Sir John Quick?
MS TATE: That was at page 183, your Honour.
HEYDON J: Line 4.
MS TATE: At 188 Mr Isaacs, as he then was, in the right‑hand column about point 4, says:
We know that, unfortunately, these great evils of labour disputes do arise, and are, in fact, becoming more extensive as time goes on; and we are all desirous of providing some comprehensive and sufficient power of dealing with them.
KIRBY J: This is a well‑known tale and it has been told many times and it was quite dramatic and it was a near run thing. What do you get out of it?
MS TATE: I am using it for the purpose, your Honour, of construing the scope of the power to say that the core subject matter of the power was that it was a power intended to address the mischief, if one can put it that way ‑ ‑ ‑
GUMMOW J: Only power, you have to say.
MS TATE: ‑ ‑ ‑ of industrial disputes.
KIRBY J: This is pure originalism. Once it is in the Constitution and is adopted as the basic law of this nation, this can be useful in telling us what was in the minds of those who made it, but it does not govern and totally give the content to what it says today.
MS TATE: I accept that, your Honour, it does not give the total content. It is rather just being used for support to say that, particularly as there has been an abbreviated way of referring to the powers ‑ the conciliation and arbitration power – it seemed to me that it was important to demonstrate that the mischief that was actually being sought to be addressed was the presence of industrial disputes. It is a labour dispute resolution power. That is how we would characterise it, your Honour.
We then say as the final part of this argument that if our analysis of 51(xxxv) is accepted, then it is not contested that the amending Act – in Parts 8 and 9 which the amending Act introduced into the Workplace Relations Act does not satisfy those restrictions under 51(xxxv).
If I might turn then to the question of what connection is relied upon by the Commonwealth as providing the required sufficiency of connection which I spoke of at the commencement of our submissions between the Act and 51(xx) and what we say is all that is necessary to reject the primary submissions of the Commonwealth.
Mr Walker took the Court to section 496 of the Act yesterday and contrasted subsection (1) and subsection (2) of that section. I will not take your Honours in detail to those subsections again. What we do seek to emphasise is that subsection (2), which provides what the Chief Justice has called the Fontana Films connection, is absent from subsection (1).
Not only is that connection absent from subsection (1), by considering the difference between subsections (1) and (2) one can see that what the Commonwealth has done is to provide as a substitute connection for the Fontana Films connection nothing more than a specific addressing of the corporation. That is to say, there is nothing more in subsection (1) than a direction to a corporation that it is prohibited from doing something or permitted to do something. The Commonwealth have chosen a connection which depends only upon the corporation being the object of a law’s command as sufficient and as, as it were, a substitute for the kind of connection that is otherwise provided by a Fontana Films link.
Now, your Honour, we have set out in our submissions in writing in detail the volume of authority which says that it is not sufficient for a law to have the character of a law with respect to trading and financial corporations for the corporation to be simply the object of command and I will not repeat those submissions. I might just mention that, in our submission, if this Court finds that that connection is not sufficient, then that is all that this Court need find to determine the invalidity of the principal disputed provisions of the Act, that is, those provisions that depend upon the section 5 and section 6 definitions of “employee” and “employer”.
The Commonwealth have in their submissions sought to formulate a range of alternative tests and in our reply we have dealt with each of those tests and said with the exception of the test which is a kind of Fontana Films sort of test, that you protect the business of the corporation from substantial loss or damage. I think the Commonwealth offer seven alternative tests. One of those tests has that form of connection and we do not challenge that, but we say it is inapplicable to any of the provisions of the Act other than 496(2) which is not under challenge, but with respect to the alternatives tests we say that each of them are not supported by authority.
Perhaps I could just say something quickly in relation to the alternative test that we submit is an appropriate test of adoption for characterisation if the court were so minded to consider endorsing a particular test. We submit that the test which we have described as the distinctive character test is the appropriate test to determine whether a law is a law with respect to trading and financial corporations. We would say that there is only a sufficient connection if the law fastens upon attributes or activities of the entity that make the entity a trading or financial corporation.
Now, we submit that this approach is the approach which is best supported in the authorities and perhaps I could illustrate this by responding to a question that the Chief Justice posed to Mr Walker yesterday, that is, whether Justice Brennan in Re Dingjan, when he spoke of discrimination, whether all he meant by discrimination was that the law must address trading corporations and not the general public. It is our submission that to understand the test adopted by Justice Brennan in Re Dingjan one needs to consider the test that Justice Brennan adopted in Cunliffe v Commonwealth (1994) 182 CLR 272 at 315-316 where Justice Brennan draws an express association between the power with respect to aliens, another persons power, and the power with respect to corporations. At the bottom of page 315 his Honour said:
The power to make laws with respect to aliens, unlike the majority of the powers conferred by s. 51 of the Constitution, is not a power to make laws with respect to a function of government, a field of activity or a class of relationships: it is a power to make laws with respect to a class of persons. If, in its operation, a law affects a class of persons with respect to whom there is a power to make laws, the law may have the character of a law with respect to persons of that class. But it is neither necessary nor sufficient that the law should change, regulate or abolish the rights, duties, powers and privileges of the relevant class treated merely as members of the general public or of a substantially wider class than the class of persons who constitute the subject matter of the power. For example, a law which requires notification of symptoms of a disease after entry to Australia by aliens and citizens indifferently is not a law with respect to aliens ‑ though it may be a law with respect to quarantine. But if and to the extent that the law discriminates between the public at large and the relevant class of persons (whether textually or in its operation), there is an indicium that the law is a law with respect to persons of that class. That indicium may suffice to give the law the character of a law with respect to persons of that class and, if the discrimination is in a matter peculiarly significant to that class, the law will bear that character. In this respect, the aliens power is similar to the corporations power considered in Actors and Announcers Equity Association of Australia v. Fontana Films Pty. Ltd.
GLEESON CJ: In what sense is trade “peculiarly significant” to trading corporations, as distinct from trading individuals or trading firms?
MS TATE: Your Honour, the current test for what it is that makes a trading corporation a trading corporation is that it engages in a certain threshold of trading activities or derives its income from a certain general threshold, a significant threshold ‑ ‑ ‑
GUMMOW J: Yes, but that is distinguishing between corporations. What is the distinction between traders, you see?
MS TATE: Clearly, your Honour, the distinction between natural persons who are traders and trading corporations is the corporateness of the corporation. We would say that that is one of the distinctive elements of a corporation. We would say all those laws which fasten upon the corporateness of a trading corporation are laws which would satisfy the sufficiency of connection test ‑ ‑ ‑
GLEESON CJ: Would a law that says no alien may own real estate in Australia involve discrimination in a matter “peculiarly significant” to aliens?
MS TATE: This is similar to the example, I think, that was put to Mr Walker this morning about whether there could be a law with respect to foreign corporations that restricted their acquisition of land.
GLEESON CJ: Well, in relation to aliens, do you say that there could be a law that says no aliens may own real estate in Australia?
MS TATE: Yes, I think there could be, your Honour.
GLEESON CJ: Then in what prospect is the ownership of land “peculiarly significant” to aliens?
MS TATE: Your Honour, I think Mr Walker answered a similar question by speaking of the allegiance that might be owed by a group of people to Australia. It might be felt, and this would be a matter purely for the political wisdom of the Parliament of the day, as to whether or not somebody who was an alien might not have a sufficient allegiance to this country to be permitted to own land.
GLEESON CJ: That example tends to show, does it not, that Justice Brennan by “peculiarly significant” cannot have meant exclusively significant.
MS TATE: Indeed, your Honour, we would say that ‑ ‑ ‑
GUMMOW J: That is the ordinary meaning of “peculiar”, is it not? He meant particularly, I think.
MS TATE: I think he meant particularly. Sometimes the word “peculiar” is used in a sense that it is simply tantamount to distinctive or particular.
GLEESON CJ: Specially?
MS TATE: Or specially, but certainly not unique. The submissions of the Commonwealth rather misconstrued our approach as an approach which said it would only support those laws which reflected some feature of trading corporations which was unique to trading corporations. That is not our approach at all. We would say all that there need be is something within the law which fastens upon the character of the trading corporation, whether it be its corporateness or whether it be the fact that it engages in trading activities or, with respect to financial corporations, whether it engages in the business of providing finance.
HAYNE J: But if you express that, as you just have, as a string of alternatives, do you not give away the case, because if corporateness is sufficient, what is wrong with “a trading corporation shall”, “a trading corporation shall not”? You have to have them as cumulatives, have you not, Solicitor, rather than as alternatives, as you just expressed them.
MS TATE: Well, we would say, your Honour, it will always depend upon the nature of the command. It is not sufficient that the corporation be an object of command. So those laws which say “a corporation shall” or “a corporation shall not”, we say there is not a sufficiency of connection with the head of power. But if it was to say “a corporation shall not engage in misleading and deceptive conduct in the course of its trading activities” or whatever, clearly that would be a law which was supported by the distinctive character approach.
GLEESON CJ: I can think of another legal context in which “peculiarly” does not mean what it appears to mean or what it sometimes appears to mean. In the context of weighing evidence, courts often talk about knowledge that is peculiarly – or something that is peculiarly within the knowledge of a witness.
MS TATE: Yes, your Honour.
GLEESON CJ: They do not mean, I think, matter which is exclusively within the knowledge of the witness, but they do mean, I think, knowledge about which that witness is likely to be much better placed to speak than anybody else.
MS TATE: Yes, exactly, your Honour.
GLEESON CJ: So there is still a little puzzle in my mind about what this concept of “peculiar significance” conveys in this context.
MS TATE: We would submit that it ought to be construed as a broad and flexible test and it is only through consideration of the authorities as to when it has been applied that one can see the proper content of the test, and we would say that assistance might be gained from the other persons powers.
GLEESON CJ: Well, then you have to come to the question of why a trading corporation’s relations with its customers are more significant to it than its relations with its employees.
MS TATE: We would say that the relations with its customers are relations which take place in the course of trading activities. It is clear in their support for this in Bank Nationalisation that the relationship between an employee and an employer is not a relationship of trade.
GLEESON CJ: Well, of course, what may be more important here is relations between a corporate employer and a prospective employee. I am not sure where Mr Walker’s distinction between insiders and outsiders left prospective employees negotiating about a proposed contract of employment. They seem to me to be on the outside.
MS TATE: We have not relied upon the internal management argument as part of our submissions, your Honour. But perhaps just finally, your Honour, I could mention two things: one, the Part 16 which is concerned with freedom of association which is a part which does not depend upon the defined definitions of “employer” and “employee” but a rather ‑ ‑ ‑
GLEESON CJ: This is a quite separate argument?
MS TATE: Quite separate argument. “Employer and employee” takes its ordinary meaning in that part. We deal with that in our written submissions extensively, both in our submissions‑in‑chief and in reply. I will not take the Court’s time with that now. Just finally, could I mention that it had been initially part of our challenge that the Commonwealth in Part 21 of the Act, which is the part dealing with the Victorian specific regime which is supported by the referral, was part of our challenge that the Commonwealth had exceeded the matters referred to it.
GLEESON CJ: But you are content with that now?
MS TATE: But the Commonwealth have now undertaken to clarify the scope of the exclusions of State laws and have said that they will do that as soon as possible, certainly within two months and, of course, on that basis we do not press that part of the challenge.
GLEESON CJ: Yes, I think you made that clear in your reply.
MS TATE: Yes, your Honour. May it please the Court.
GLEESON CJ: Thank you, Ms Solicitor. Mr Hutley. Mr Hutley, there is a question of amendment, is there not?
MR HUTLEY: Yes, your Honour.
GLEESON CJ: Is that opposed by anybody?
MR HUTLEY: I think the order has actually been made.
GLEESON CJ: The order has been made.
MR HUTLEY: It has already been made, your Honour. The document I think has been filed.
GLEESON CJ: Thank you.
MR HUTLEY: It just did not get into the joint application book, your Honour. If it would be convenient to your Honours we will have copies of it circulated, but the Registry is probably quicker than we are.
GLEESON CJ: Thank you.
MR HUTLEY: Your Honours, our submissions are concerned with the amendments made to what is now called Schedule 1 of the Act and particularly whether those amendments were an exercise of power under the various heads of power relied upon by the Commonwealth to support what I will refer to as the Act as opposed to the schedule for convenience. This, of course, must take as its point of departure appreciation of the structure of the amendments made to the main Act and your Honours have been taken through that in quite a deal of detail and I will refer shortly to the conspectus of involvement of industrial organisations, and I will use the term not in the defined sense of “organisations”, “industrial organisations”; when I am referring to the Act, I will refer to organisation.
The conspectus of regulation and involvement of industrial organisations which is contemplated by the Act is summarised in the submissions both of the Commonwealth and ourselves, and I will point your Honours to the relevant provisions in due course. However, before doing that, it is important to appreciate the manner in which the amendments to the schedule were affected to place the issue which arises in proper context.
Prior to the amendment, the schedule took a form not radically different from its current form in that it was constructed on a basis that identified characteristics which associations of employees had to possess in order to become registered as “an organisation”, in the defined sense of section 4, for the purposes of the Act. Those characteristics which an association had to possess to obtain registration covered a variety of topics.
Of importance is clause 18 of the Act in its then form, and your Honours will find that referred to, for convenience, in our submissions at page 624 of the joint demurrer book, and it is paragraphs 8 and 9. Rather than give your Honours the whole Act, it is easier dealt with here. It provided that an association could apply for registration if it was relevantly:
“an association of which some or all of the members are employees who are capable of being engaged in an industrial dispute -
and as we set out in paragraph 9 of our submissions, “industrial dispute” was defined by reference to the constitutional meaning given to section 51(xxxv). The other characteristics which an organisation had to possess were essentially defined in clause 19 of the schedule which in most respects remains as it was post‑amendment, and your Honours will find that at page 699 of the reprint.
There have been small amendments to this clause of the schedule and particularly an amendment to 19(1)(a)(i) to refer to the new requirements for a capability to apply which is in clause 18 of the amended Act. But the characteristics which were required prior to the amendment of interest are particularly (d). Your Honours will see that there be 50 employees in an association. Point (f) there is a requirement that:
the association make provision as required by this Schedule to be made by the rules of organisations -
and your Honours will find those in chapter 5 of the schedule at page 805, and those in substance have remained identical. Paragraph (h) required a resolution either by:
the members present at a general meeting of the association, or an absolute majority of the committee of management –
“absolute majority” not being defined, but one takes it be what it would mean in the usual corporate sense of 75 per cent, I take it.
GLEESON CJ: I thought it normally meant a majority of all the members as distinct from majority of the members present and voting?
MR HUTLEY: All the members present, yes. Thank you, I stand corrected, and (i) that is an amendment, your Honour. I will not take your Honours to it then, but anyway, they were the types of criteria or characteristics which the Act required of an organisation to become registered. Registration, your Honours, was provided for by clause 26 which is at page 707. That is unamended, and the consequence of registration, namely, incorporation was effected by clause 27.
GLEESON CJ: Section 27, actually, for a reason ‑ ‑ ‑
MR HUTLEY: Yes, your Honour, sometimes it is referred to as “item”, sometimes it is referred to as “section”, sometimes it is referred to as “paragraph” and sometimes it is “clause” so far as I can work out. I think there was a community of draftspersons and we will come to the significance of that ‑ ‑ ‑
HAYNE J: There has to be a better collective than “community” for that gathering, Mr Hutley.
MR HUTLEY: They met after the event, your Honour. We will come to some of those in due course. Then incorporation was effected by section 27. There are various chapters and could I tell your Honours just shortly what the chapters deal with because in great part they have not changed.
Part 3 of chapter 2 dealt with cancellation of registration, chapter 2 generally dealing with registration. Chapter 3, which your Honours will find at 717 dealt with amalgamation of organisations, that is registered organisations. Chapter 4 dealt with orders, what were called representation orders, in relation to registered organisations which were, in effect, orders dealing with permitted coverage by registered organisations in relation to employees who were capable of becoming members to one or more organisations, such things as demarcation dispute-type issues.
Chapter 5, which your Honours will find at page 805, dealt with the rules of organisations and specified various matters which are, in essence, essentially the same. Chapter 6 dealt with membership and entitlement to become members of organisations. Chapter 7 dealt with issues associated with the democratic control of organisations - your Honours will find that at page 43. There were provisions, such as chapters 8 and 9, which dealt with the general management of the organisations, auditing and the like. I think that is sufficient for present purposes.
The structure which existed reflected the constitutional underpinning of the predecessors to the Act in its now post-amendment form, namely, section 51(xxxv) of the Constitution, and derived from the course of decisions in this Court commencing with the Jumbunna Coal Mine NL v Victorian Coal Miners’ Association 6 CLR 309 and the cases which followed those. In our submissions, we have set out the major cases in the sequence such as the Federated Iron Workers’ Association and the deregistration cases in which that field was investigated.
Those cases determined that such a structure was one which was reasonably and appropriately adapted to the scheme of regulation adopted by Parliament from time to time for the resolution of section 51(xxxv) disputes. The amending Act, with certain peculiarities, which we will come to, has essentially adopted that structure. However, critically, it has excised old section 18 and replaced it with a new collection of sections.
It has also added a new section 5 and it will be necessary to come to that because section 5 at 675 of the reprint provides a statement of the intention of the Parliament in enacting the schedule and can I take your Honours to that shortly? It says:
(1)It is Parliament’s intention in enacting this Schedule to enhance relations within workplaces between federal system employers and federal system employees -
Your Honours will note immediately that what has not been adopted in this schedule is the definition of “employer” in section 6 and it is analogue for “employees” in section 5. I will come to the detail of that in a moment. It provides secondly that:
(2)Parliament considers that those relations will be enhanced and those adverse effects will be reduced, if associations of employers and employees are required to meet the standards set out in this Schedule in order to gain the rights and privileges accorded to associations under this Schedule and the Workplace Relations Act.
It then sets out the standards which it is expected will be established. Can I say that recitation of standards, (a) to (d), is taken from the former section 5 of the schedule in its unamended form. Can I then pass through the definitions for a moment and can I take your Honours to the new 18? Your Honours will find that at page 692. It provides:
Any of the following associations may apply for registration as an organisation –
and of particular relevance is:
(b) a federally registrable association of employees –
I would ask your Honours to note (a) and (c). Section 18A deals with federally registrable employer associations, 18B deals with federally registrable employee associations and has within it the concept of a federal system employee in 18B(2). Its precise analogue is in 18A in the federal system employer. Now, that provides:
(1) An association . . . is federally registrable if:
(a) it is a constitutional corporation –
and “constitutional corporation” has the defined term of being a foreign, trading or financial corporation, so such a corporation appears to be established as being federally registrable. Secondly:
(b) the majority of its members are federal system employees.
I am sorry, “or” - I accept the disjunct. Then one moves to (2) and then “federal system employee” lists a series of categories of employees:
(a) employed by a constitutional corporation; or
(b) employed in an enterprise –
“enterprise” being defined, your Honours, in section 4 of the schedule at page 680 and that –
(i)operates principally within or from a Territory; or
(ii)is engaged principally in trade and commerce –
and so on. The form – I will come to the detail of that in a moment. Could I then move on, it then passes on through (b) to identify a series of enterprises which are principally engaged in activities which are identified by reference to particular constitutional heads of power, again noting, that these have no direct analogue in the definition of “employer” and therefore “employee” in section 6. For example, your Honours will recall that section 6 limits the employees engaged in trade and commerce by reference to operations essentially in transport and on the waterside. So the characteristic of a “federally registrable employee association” is attached to a concept of “employee” broader than and different to that which is adopted in section 6. I will take your Honours to the detail when we develop the argument. There are then provided other types of employee in (c), (d) and (e) which variously seek to track the employees identified in the main Act, give or take a few points of detail.
Could I take your Honours then to 18D. Section 18D is a provision which seems to have been drafted on a view that what was being done in the balance of 18 was invoking particular sources of power generally by reference to the characteristics or the heads of power referred to directly or implicitly in the definitions of “federal system employee” and “federal system employer”. Can I make that point good. If your Honours go to 18D and I will deal with (3) and (4) because (1) and (2) deal with associations of employees in exactly the same terms. It says:
If the Parliament would not have sufficient legislative power to provide for the registration of an association of employees if a particular class of person mentioned in paragraphs 18B(2)(a) to (e) were included when working out whether the majority of its members are federal system employees, subsection 18B(2) applies as if it did not include a reference to that class of employees.
It appears to have been contemplated that the identification of a particular class might not have a sufficient constitutional basis and if it did not then that should be deleted and the majority ascertained should have regard to classes other than that class. Section 18D(4) provides:
If the Parliament would only have sufficient legislative power to provide for the registration of a particular association of employees if the membership of the association were entirely made up of one or more of the following:
(a) federal system employees;
(b) persons specified in subsection 18B(4) –
which is a subclass, your Honours –
(c) officers of the association;
then, despite subsection 18B(1), the association is not federally registrable unless it is either a constitutional corporation or made up in that way.
So, in other words, if it were to be found that you could not support federal registration by a majority test, then, using the various heads, you would move to a 100 per cent test, other than in the case of a constitutional corporation, for federal registration. The issue which we submit ultimately lies before the Court in relation to this schedule is whether the new position constitutes an effective exercise of the power which underpins the amending Act which relies upon the various heads of power adverted to. Now, section 19 is, as I observed earlier, essentially in the same form except that 19(1)(a) has drawn in clause 18 to deal with federally registrable association of employers and federally registrable association of employees.
The critical provision of the main Act, section 6, identifies the employers whose relations with employees are regulated by the main Act. That of course has to be qualified to an extent insofar as it deals with the position of Victoria on the reference, but other than that I think that is correct. We accept for the purposes of this argument that the power relied upon by the Commonwealth, having adopted a system of regulating relations between employers within section 6 and their employees, would extend, because it would be reasonably adapted and appropriate way of taking that course, to regulating means of bargaining and other associated matters concerning their relations by regulating industrial organisations acting in their interests, but only if that process of regulation is reasonably and appropriately adapted to that exercise adopted by the Commonwealth.
In other words, the characteristics which the Commonwealth chooses for an organisation to participate is not at large. The Commonwealth cannot provide, for example, that a characteristic would be that no member votes for a particular political party, et cetera, because like the scheme of regulation which maintained before the amending Act, what we have here is essentially an exercise of an incidental power – I am not using that in the 51(xxxix) sense, but a power incidental to the exercise of power undertaken by the Commonwealth in regulating the relations between employers and employees within the meaning of section 5 and 6.
Now, our primary position, your Honours, is that the structure adopted of limiting the identity of federally registerable employee associations to those that satisfy the criteria identified in 18B of the schedule is not reasonably or appropriately adapted to any exercise of the power which underlies the Act.
There are three central aspects to the characteristics adopted by Parliament and they are, firstly, that the corporation is either a constitutional corporation, the association is either a constitutional corporation, or the association has a majority of members which fall within a number of categories and, thirdly, the categories in a number of respects are expressed in terms of various heads of power and in various ways drawn from the Constitution which find no precise or even approximate analogue in the definition of “employer” found in section 6 of the Act.
In respect of each of those aspects, in our submission, the scheme of regulation is neither reasonably or appropriately adapted in the manner in which that formula is understood in the jurisprudence of this Court. The criteria for registration in section 19 specify a minimum number of members of an association, and it is important in this respect, your Honours, to note that the 50 employees identified in section 19 are not 50 federally registerable employees – federal system employees; they are 50 employees.
Now, thus it would appear that as a result of the amendments to the Act a union of 50 members, 26 of whom were federal system employees, would be registerable. It does not appear that any one or more of them had to be an employee whose relations with his or her employer would be the subject of section 6.
Oddly, an industrial organisation with 1,000 members, 499 of whom happened not to be federal system employees, could not be registered. Another way of pointing to the same difficulty, if an association of employees had 100 members, each employed by a particular employer within the meaning of section 6, whether it could or could not become federally registrable would be a function of the happenstance that a majority of its membership, whatever that may be made up of, happened to fall within the definition of “federal system employee”.
KIRBY J: How does this operate on the Moore v Doyle problem, that is to say, the counterpart State unions for the previous federally registered organisation?
MR HUTLEY: Your Honour, that will create an enormous series of problems, as I understand it, where, for example, I am told there are many unions which have a small proportion of federal employees, for various reasons: historical, expertise and the like. When I say a small proportion, quite significant numbers had larger numbers of State employees.
KIRBY J: But often they are ‑ ‑ ‑
MR HUTLEY: Yes, but then under the rules they are members of both, because under the old regime, as long as you had 50, you could be registered, and they have assets and the like. Your Honour immediately sees the problem. What one has now is, if that maintains by virtue of the adoption of this formula and the use of the majority, it will not be registrable, but if ‑ ‑ ‑
GUMMOW J: They miss out on the benefits of the Act.
MR HUTLEY: I accept that, your Honour, and one accepts ‑ ‑ ‑
GUMMOW J: It is not compulsory.
MR HUTLEY: Precisely, your Honour, we accept that completely. What we say is in it not being compulsory, as it was not compulsory in any regime, the criteria for registration has to be rationally and reasonably and appropriately adapted to the end sought to be achieved and therefore one has to look at the end.
GUMMOW J: You want to stay outside the tent.
MR HUTLEY: No, it is not a question of staying outside a tent. Often you may desperately want to get into the tent and you simply cannot. You may have thousands of members or hundred of members, you may be dealing with many employers, you may be a very significant union, but because of the piquant choice of majority – not numbers, majority – you are sent into the darkness. That is why I took your Honours to 18D.
This choice does not appear to be a choice which had anything to do with any apparent object of the Act. It appears to have been driven by some conception by the draftsperson or persons that the enacting of the definitions was an independent exercise of power under the various heads which are tracked in it as opposed to what it truly was and could only truly be is an exercise of the incidental power, in the way that I have expressed, to the enactment of the body of the amending Act. That is what has produced – and I will take your Honours through the many other difficulties – results which can only be described as irrational and absurd.
GUMMOW J: What do you say about the Commonwealth’s submissions on this point in reply? Paragraphs 540 and following, I think it is, on page 131.
MR HUTLEY: Your Honour, we accept for the purposes of this argument that as part of the incidental powers, appropriately adapted regulation of industrial organisations can be done on the Jumbunna principle. What we say is this does not have that character. The Commonwealth’s submissions, with respect, go to a different point. They go to the point whether you can support this structure alone by reference to independent heads of power, and we submit that just simply cannot be right for the following reasons.
If you cannot exercise a power to regulate a union, for example, of postal workers, because that is not a law with respect to the postal power, it is a law and can only be a law with respect to a union. You can do it, and we accept, if it is incidental to an exercise of power falling within the power with respect to postal and telegraphs, that is, employment relations, but they have not done that. It is not a valid exercise of the power to say, “You may be registered as a federal union if employees of an employer in that field are members of your organisation”. That is no exercise of the power because what one is talking about here is inherently incidental because there is no direct or immediate operation on the subject matter of the power.
It is about what can happen to an association of people who have members who are in an employment relationship with an organisation which is doing activities within the power, but you are not, for the purposes of this submission, regulating that activity, any activity in the postal and telecommunications field, regulating even the employment relations between an employee and an enterprise acting in the telecommunications fields. You have chosen to seek to set a criteria for registration which is only meaningful in the context of the Workplaces Relations Act in relation to employers who are defined without reference to the telecommunications power. What happened, with respect to this regulation, was a complete misconception by the draftsperson as to what they were doing.
Now, a majority, in our respectful submission, serves no other object than informing one that there are more of something than other things. It can be perhaps tested this way. If they had said “minority” instead of “majority”, the position would be in no way advanced or disadvantaged, and 18D(4) gives some key also as to how this all came about, because 18D(4) points to the 100 per cent rule, that, in effect, if you cannot do it by majority, let us go to 100 per cent. Then one asks the question: how could it ‑ ‑ ‑
GUMMOW J: I am sorry, 18D?
MR HUTLEY: I do apologise, your Honour, 18D. So it, in effect, says – it does not succeed for reasons of drafting but it appeared that the draftsperson conceived of the possibility that there may be a problem with respect to a majority test and therefore conceived that one could set a criterion to move to a 100 per cent test and that might overcome the problem of the majority.
HAYNE J: That occurs if, but only if, Parliament would only have power to do this in majority. So what is the point you make by hypothesis for consideration of (4) is ‑ ‑ ‑
MR HUTLEY: What it does is point to what was being thought about rather than what was being done. So we submit that the majority test serves no reasonably adapted or appropriately adapted end.
The next difficulty we observe and submit arises from section 18B’s definition of “federal system employee”. Under section 18B(2)(b), categories of employees are identified which can contribute to the ascertainment of the majority and the categories have broadly two common features. One, the relevant enterprise has to operate principally in some area or field or geographic space, and the area, field or space is identified by reference to a constitutional head of power. That creates an immediate disconformity with section 6.
For example, if I could ask your Honours to have open before your Honours 6(1)(f) of the main Act and 18B(2)(b)(i) of the schedule. Section 6(1)(f) of the definition of “employer” seeks to define “employer” in relation to the territories power by reference to:
a person or entity (which may be an unincorporated club) that carries on an activity (whether of a commercial, governmental or other nature) in a Territory in Australia, so far as the person employs, or usually employs, an individual –
If one then compares it with 18B(2)(b)(i), what one has is:
A person is a federal system employee if the person is:
. . .
(b) employed in an enterprise that:
(i)operates principally within or from a Territory –
Now, immediately one has a disjunct between the two classes and thus it would appear that employees who would be federal system employees are counted for a majority, even though there appears to be no capacity by virtue of that attachment to regulate them in 6(1)(f) of the definition of “employer”. They seem to hark to the same topic ‑ ‑ ‑
HAYNE J: But have you not just inverted it? Is not 6(1)(f) a class ‑ ‑ ‑
MR HUTLEY: Section 6(1)(f) is narrower – I do apologise, your Honour, I missed the point.
HAYNE J: I think you did, that 18B(2) is narrower than 6(1)(f).
MR HUTLEY: But, your Honour, an organisation may operate principally from a Territory without acting within the Territory and the person or entity is carrying on an activity in a Territory. In effect, they pass, on one view, in the night. Now, next, if one compares 18B(2)(b)(ii) with 6(d) of the Act, your Honours will see that for section 6 there has been invoked the trade and commerce power to a limited extent of employer. In respect of a federal system employee, the full breadth of the operation of section 51(i) seems to be adopted. It of course also shows how – I will come back to that, your Honour.
GUMMOW J: What is all this coming to, that there are many people who will be federal system employees who will not be employed by an employer?
MR HUTLEY: Quite, and they contribute to a so‑called majority as a criteria for determining whether one can register as a federal union and we say that is not reasonably appropriately adapted ‑ ‑ ‑
GUMMOW J: To what?
MR HUTLEY: To a system of regulation ‑ ‑ ‑
GUMMOW J: To an exercise of power of some sort?
MR HUTLEY: Exactly, your Honour. To an exercise of power in the amending Act which adopts a scheme of regulation of the relations between employers in section 6 and employees. In effect, there is no rational basis for the discrimen that have been chosen for determining whether a union to which an employee within 6 is a member in determining whether that union is in a position to become registered and represent that person’s interests.
GLEESON CJ: The problem of disconformity stems from the fact, does it, that there will be a lot of registered associations or registered unions who have many members, perhaps even a majority of members, who do not fall within section 6?
MR HUTLEY: Yes, and majority bears no – the first point is, majority is per se irrational for the examples given. If you have a minimum of 50 – I am sorry, your Honour.
GLEESON CJ: I could understand the problem if it was the opposite situation, but what is the problem involved in having registered associations, many of whose members, perhaps most of whose members, cannot be dealt with under section 6?
MR HUTLEY: Your Honour, the problem is if you adopt a criteria for regulating the relations between employers/employees and you then adopt as part of the incidental power a regulation of unions to participate in that procedure, we submit the criteria for determining whether a union can participate, ie, be registered, has to be reasonably appropriately adapted to a scheme which seeks to promote the representation of section 6 employees in that scheme and if, in effect, the criteria you use for determining whether a union can or cannot represent such an employee are irrational, those criteria are not reasonably and appropriately adapted to the task undertaken.
KIRBY J: Is this a new principle of constitutionality, that laws must be rational?
MR HUTLEY: No, your Honour, if one accepts that one is in the incidental aspect of the exercise of the power, and I accept that is the point of departure ‑ ‑ ‑
GUMMOW J: You do not deny that there could be such a registration system?
MR HUTLEY: I accept that there could be a registration system, your Honour, for the purposes of this argument à la Jumbunna. That is why I pointed to the criteria or characteristics which were specified under the old system, which was 50 members and your members had to be employees capable of being involved in a constitutional dispute. Now, that was a system of characteristics which was both reasonably and appropriately adapted to the scheme which Parliament had chosen to adopt in exercise of a power under 51(xxxv).
GUMMOW J: What would be an example of a system that was rationally connected?
MR HUTLEY: You could have done it exactly the same: 50 members who are employees within the meaning of section 6. You could have done it by absolute identical analogue.
GUMMOW J: It would have to be majority as well?
MR HUTLEY: It would not have to be a majority even, because you would only have to have 50 members who are capable of being involved in an interstate dispute. You may have many members under the old system who are simply ‑ ‑ ‑
GUMMOW J: No, I am talking about the new system. How could the new system be fashioned that would have escaped this sort of attack?
MR HUTLEY: If I could take your Honours back to the old form of clause 18 which are in our written submissions, conveniently, it is in the Act of course, if your Honours have the Act in its unamended form. We have Reprint No 6, I think, your Honour. If your Honours go to Schedule 1B, clause 18 ‑ ‑ ‑
GUMMOW J: This is the old system?
MR HUTLEY: It is the old system. Schedule 1B, if your Honours please. Clause 18, your Honours would find at page 464:
(1)Any of the following associations may apply for registration as an organisation:
. . .
(b)an association of which some or all of the members are employees –
within the meaning of section 6 of the main Act. Then you would have the criteria in section 19 which said that you have to have at least 50 and no complaint could be made.
GUMMOW J: But some or all would be enough?
MR HUTLEY: Some or all, yes, because, for example, if you have 100 employees who are in that characteristic, having the section 6 connection, whether you could be federally registered now depends upon the happenstance of the majority, which we say is just simply not rational. Can we say to show that the majority ‑ ‑ ‑
GUMMOW J: Does the Commonwealth meet your point in its written submissions?
MR HUTLEY: Yes.
GUMMOW J: What do they say?
MR HUTLEY: Your Honour, I gave notice to my learned friend, the Solicitor‑General for the Commonwealth, that this argument was really an evolution.
GUMMOW J: It looks like it, yes, and it may be very good because of that.
MR HUTLEY: That was an evolution of the argument. So to be fair to the Commonwealth, the precise details of meeting this, your Honours may not find it, but they defend the old structure in the way indicated.
HAYNE J: They are three arguments back, are they, Mr Hutley?
CALLINAN J: Our jurisprudence has evolved, so do not worry about that.
MR HUTLEY: Exactly, your Honour, and there were conflicts in submission. Anyway, that is the position. Your Honour, the effect of it, of course, is that it serves merely to prevent the employers from dealing with unions by reference to really quite sort of piquant events. To show that the ‑ ‑ ‑
HAYNE J: Can I just interrupt you? Can I make sure I understand? The two hinges about which it turns, the argument as it presently stands turns, are (1) majority is irrational and (2) disconformity, even if over‑inclusive, takes it beyond what is appropriate and adapted? Are those the two hinges?
MR HUTLEY: They are the two. I want to deal with one other thing, your Honour. Then, firstly there is a reading down provision in 18B(3) which I took your Honours to. But, in effect, perhaps if the disconformity in (2)(b) comes from the manners which we have identified, one could overcome that difficulty by striking all of them out and then being left with a structure which effectively went from (a) to (c), (d) and (e). The difficulty with that is that that itself would be a structure which was not reasonably and appropriately adapted because it would effectively exclude consideration of those parts of (b) which truly find analogues in section 6 because they could not be bought to bear in a consideration of the majority, the trade and commerce one, for example.
Therefore, the structure, by deleting, would necessarily itself become not reasonably and appropriately adapted. Therefore you cannot delete because you can only delete, in a sense, to save the constitutionality, make it constitutional. Therefore the whole thing fails. Similarly, your Honours, if one turns to 18B(2)(a) on page 693 ‑ ‑ ‑
GUMMOW J: Yes, constitutional corporation.
MR HUTLEY: Again, we point to the fact that that seems to have contemplated that it was reasonably adapted for a foreign corporation to be an association of employees, but, your Honour, what it does point out is that it does not require one member of the constitutional corporation to be a section 6 employee because the only requirement then which exists is the section 19 requirement which is 50 employees, none of whom have to be constitutional under section 6 employees.
HAYNE J: The Commonwealth’s answer to that is, “So what, they would not want to join the system if they have no members” – I think, the answer made by the Commonwealth, is it not?
MR HUTLEY: I understand precisely, your Honour, but it absolutely shows how the majority is irrational because let that be accepted ‑ ‑ ‑
HAYNE J: We have just gone – you are looking at 18B(1)(a)?
MR HUTLEY: Quite, yes, but what we say is it points up a number of things. The Commonwealth says it is all right because they would not want to join. We accept that as far as it goes. We then say one has to look at this thing as a whole for rationality. It points to the fact that the majority test is not of any rational or appropriate significance because even if it be accepted that a constitutional corporation would not apply if it did not have members ‑ and let us accept that for the argument ‑ all they would have to have is 50 members and if they had one constitutional employee that would be sufficient.
One asks rhetorically, if that is the case, why is the majority test there? It cannot be there because it is considered that a majority is necessarily or reasonably appropriate because obviously with a constitutional corporation it does not matter. If (b) falls, we would say ‑ ‑ ‑
HAYNE J: Does not the Commonwealth answer that by saying that if it is a constitutional corporation we can make a law or Parliament can make a law directed to such a body and questions of reasonably, appropriate and adapted do not intrude?
MR HUTLEY: Your Honour, we submit this is not a law with respect to a constitutional corporation. This is a law – because all it says is, a constitutional corporation may apply for registration which is necessarily incidental to the other ones. In effect, it is identifying a characteristic, not exercising a power with respect to a constitutional corporation.
We further say that if it be found, your Honours, that if 18(1)(b) falls, 18B(1)(a) must also fall because that of itself is not reasonably appropriately adapted to the exercise of power in the main Act, because a system which provides solely for the registration of constitutional corporations to represent the industrial interests of section 6 “employees”, is itself not reasonably appropriately adapted and might be described as, frankly, weird. As mentioned by my learned junior, it has the effect if right of inhibiting employers from dealing with industrial organisations to advance the interests which are sought to be advanced in this legislation.
KIRBY J: If we take on the responsibility of fixing up all “weird” legislation our duties will be even more onerous.
MR HUTLEY: Quite, your Honour. Those are our submissions, if your Honours please.
GLEESON CJ: Thank you, Mr Hutley. Yes, Mr Solicitor for Western Australia.
MR MEADOWS: May it please the Court. I seem to have got the deathwatch; some might say that is appropriate and perhaps adapted. If it please the Court, needless to say we adopt what we say in our written submissions and seek to make oral submissions in relation to three issues, first of all, the effect and validity of section 16 of the Act which provides for the exclusion of State and Territory laws; secondly, the effect and validity of Part 15, Division 5 of the Act which purports to impose conditions on the exercise of rights of entry to premises by an official of an organisation under State law and thirdly, the effect and validity of section 783 in Part 16 of the Act which provides for the application of the provisions of the Act relating to freedom of association to organisations and their employees and to conduct in relation to an organisation.
There are two other aspects of the case dealt with in our written submissions which have fallen to us to deal with which we do not intend to address oral submissions about to the Court and they are in relation to the validity of section 327 of the Act and the validity of sections 335 and 336 of the Act. These have been dealt with in our written submissions and in our submissions in reply and we do not feel the need to address any oral submissions in relation to those issues.
HEYDON J: Do you mean 365 and 366?
MR MEADOWS: Yes, your Honour. Sorry, I beg your pardon, 335 and 336. I am going to have to correct myself again, your Honour, I am sorry, it is 365 and 366.
Before I turn to those issues, though, perhaps I could say something about the corporations power and, in particular, identify the four strings that we say we have to our bow in relation to that. We would say that all of these strings fire independently of the other and any one of them would see us through in having the Act held to be invalid. Now, I do not propose to rehearse what has been said by those who have gone before me, but just simply to identify what we say are the four strings to our bow.
The first is the argument dealt with by New South Wales that the power does not extend to regulation of the relationship between a constitutional corporation and its employees. The second is the argument that the Act cannot be characterised as a law with respect to constitutional corporations. The third is Victoria’s alternative or additional submission in relation to the interaction between section 51(xx) and 51(xxxv) of the Constitution and, fourthly, South Australia’s alternative argument, which we are yet to hear, in relation to the extent of the power to the effect that it does not extend to the regulation of the relationship between a trading or financial corporation and those of its employees whose employment is unconnected with the corporation’s trading or financial activities.
KIRBY J: How does that distinguish itself from the first submission?
MR MEADOWS: Well, perhaps it would be best left to South Australia to elaborate on that, but can I say this, it is a rather more restricted construction.
KIRBY J: It narrows the first submission.
MR MEADOWS: Yes, and as I say, it comes as an alternative to the first. Perhaps before I leave the question of the corporations power, could I raise with some temerity the issue of Western Australia having made a concession in the Industrial Relations Case 187 CLR 416. Your Honours will not be surprised ‑ ‑ ‑
GLEESON CJ: I do not think anybody thinks you are bound by that.
MR MEADOWS: Thank you, your Honour.
CALLINAN J: Constitutions do not belong to the government of the day. They do all sorts of things in a political expediency.
MR MEADOWS: That was what I was going to say, your Honour, and what is more, your Honours will not be surprised that I was not counsel in that case.
GLEESON CJ: You are pushing at an open door, Mr Solicitor.
MR MEADOWS: Thank you, your Honour. I was going to add, but I should not, that I am not noted for making concessions of any description, let alone ‑ ‑ ‑
GLEESON CJ: That is why you are embarrassed.
MR MEADOWS: Logically, I should now turn to the argument about section 783 of the Act which is an extension of the argument put forward by Victoria and also, in part, by the unions of New South Wales in relation to freedom of association. First of all, I would seek to adopt what Victoria has said in its submissions in relation to Part 16 of the Act, which my learned friend, the Solicitor for Victoria, relied on. Also I would seek to rely on what we say in paragraphs 82 to 87 of our submissions which are in demurrer book volume 2, tab 39, pages 453 to 458. What I am about to say may be a little at odds with the submissions that have just been put by my learned friend, Mr Hutley, at least as I perceive them, but, nevertheless, they do flow from what his clients put in their submissions at paragraphs 39 and following at page 636 of volume 2 of the demurrer book under tab 44.
May I take your Honours then to section 783, which is at page 571 of the Act in volume 1. The section provides:
This Part applies to:
(a)conduct by an organisation; and
(b)conduct by an officer of an organisation acting in that capacity and;
(c)conduct carried out with a purpose or intent relating to a person’s membership or non-membership of an organisation.
We submit that this provision or section is invalid for a number of reasons. It is important to appreciate in considering the meaning of the section that it talks of an organisation and that means, of course, an organisation as defined in section 4(1) ‑ ‑ ‑
GUMMOW J: Registered. So if Mr Hutley has been correct this division collapses.
MR MEADOWS: I beg your pardon, your Honour.
GUMMOW J: If Mr Hutley has been correct as to the registration system it would collapse.
MR MEADOWS: Yes, it would, but we would say it collapses for other reasons.
GUMMOW J: Other reasons as well.
MR MEADOWS: Now, it is necessary to understand how existing organisations, that is organisations that were registered under the Act prior to amendment continue to be organisations in relation to this Act as amended and in order to get to the bottom of that one has to go to clause 24 of Schedule 4, Part 2, which is at page 758 of the Workplace Relations Amendment Act. That is No 153 of 2005.
GUMMOW J: What page in that Act, Mr Solicitor?
MR MEADOWS: It is 758, your Honour.
GUMMOW J: Thank you.
MR MEADOWS: Which provides that:
Despite the amendment made by item 306 of Schedule 1, subparagraph 30(1)(c)(v) of Schedule 1B to the amended Act does not apply for the period of 3 years after the reform commencement in relation to an organisation whose application for registration was granted before that commencement.
Now, subparagraph 30(1)(c)(v) of Schedule 1B now finds itself as Schedule 1, Chapter 2, Part 3, section 30 which you will find at page 713 of volume 2 of the amended Act.
GLEESON CJ: Mr Solicitor, is that a convenient time?
MR MEADOWS: It is, your Honour.
GLEESON CJ: Solicitor‑General for Victoria, could you let us have your amended statement of claim by close of play on Tuesday?
MS TATE: Yes, of course, your Honour.
GLEESON CJ: Thank you. We will adjourn until 10.15 on Monday.
AT 3.59 PM THE MATTERS WERE ADJOURNED
UNTIL MONDAY, 8 MAY 2006
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