Unions NSW and Ors v State of New South Wales

[2013] HCATrans 264

[2013] HCATrans 264

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S70 of 2013

B e t w e e n -

UNIONS NSW

First Plaintiff

AUTOMOTIVE, FOOD, METALS, ENGINEERING, PRINTING AND KINDRED INDUSTRIES UNION KNOWN AS THE AUSTRALIAN MANUFACTURING WORKERS’ UNION (AMWU)

Second Plaintiff

NEW SOUTH WALES LOCAL GOVERNMENT, CLERICAL, ADMINISTRATIVE, ENERGY, AIRLINES & UTILITIES UNION

Third Plaintiff

NEW SOUTH WALES NURSES AND MIDWIVES’ ASSOCIATION

Fourth Plaintiff

NEW SOUTH WALES TEACHERS FEDERATION

Fifth Plaintiff

TRANSPORT WORKERS’ UNION OF NEW SOUTH WALES

Sixth Plaintiff

and

STATE OF NEW SOUTH WALES

Defendant

FRENCH CJ
HAYNE J
CRENNAN J
KIEFEL J
BELL J
KEANE J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON WEDNESDAY, 6 NOVEMBER 2013, AT 10.19 AM

(Continued from 5/11/13)

Copyright in the High Court of Australia

____________________

FRENCH CJ:   Yes, Mr Kirk.

MR KIRK:   If it please the Court.  Your Honours, before I pick up where I left off yesterday, can I come back to your Honour Justice Crennan’s question of me relating to third‑party campaigners and there is something I need to add?  Could I take your Honours to the legislative material bundle at page 75 and it is section 96AA of the Act?  Your Honours will see in subsection (1) that:

It is unlawful for a third‑party campaigner to make payments for electoral communication expenditure incurred during a capped expenditure period, or to accept political donations for the purposes of incurring that expenditure, unless:

(a)the third‑party campaigner is registered –

So I was strictly right yesterday to say there is no requirement that they be registered, but in practical terms if there is a wish to engage in ECE or accept donations for that purpose the third‑party campaigner does need to be registered.

If I could pick up then where I left off yesterday and I was seeking to go through some aspects of the legislative scheme to put it in context and having done so I will then come back to your Honour Justice Bell’s question about the purpose of the provision which was also raised by your Honour Justice Kiefel, of course, yesterday.  I was dealing or about to deal with the donation caps.  Can I take your Honours to section 95A which is at page 64 of the legislative materials and in subsection (1) the donation caps are set out in terms no doubt familiar to your Honours.  The relevant caps here are:

$5,000 for political donations to . . . a registered party –

Your Honours will note also that for groups, which I explained yesterday in (d), it is the same cap.  The cap for third party campaigners in (f) is $2,000 and there is also a cap for candidates or for members which is also $2,000, see subsection (e) or (c), but the relevant cap here is the cap for parties which is $5,000.  I note these caps commenced on 1 January 2011 and are indexed but for simplicity I propose to refer just to the statutory amounts.

Can I just say something, briefly, about the practical effect of those caps, for example, with respect to the NSW ALP in relation to unions – that being a focus of the plaintiff’s attack?  There are 21 trade unions affiliated to the NSW ALP – without going to it, (c) at paragraph 18 of the special case.  If all want to donate the maximum to the ALP, that is 21 times $5,000 or $105,000 a year or, over a four‑year electoral cycle, $420,000.  Most of the restriction, in our submission, on the availability of private funding to political parties in New South Wales is done by that donation cap, the caps I have just taken your Honours to.  In a sense the plaintiffs do not appear to disagree with that proposition because they repeatedly refer in their written submissions to what they call the relatively modest caps, by which they appear to mean caps allowing only modest donations, as reducing any tendency to undue influence or perception of influence.  In that context, the further restriction imposed by section 96D is limited – not insignificant – but limited.

A further point raised by the plaintiffs in their written submissions in two ways related to some practical effects.  In their primary submissions at paragraph 43, your Honours will recall that they indicated that section 96D would have a severe impact on the amount of funds available to all the major political parties except the Greens.  In their reply, for the first time, they suggested there might be some particular burden on the NSW ALP, albeit – they do say they take from the ALP as an example so it is not quite clear how strongly the argument is put ‑ but they say that is because – and this is in their reply at page 3, paragraph 9(e)(ii) that in recent times 98 per cent of ALP donations have been from non‑individuals and two per cent from individuals.  For the NSW Liberal Party, for example, that is a 75/25 ratio.

HAYNE J:   What is the point that you are making, Mr Kirk, that there is no burden?  The burden does not matter?  I thought the premise that you established yesterday was that 96D constitutes more than an inconsequential indirect burden, is that so?

MR KIRK:   No, I do not think that is what I was seeking to put yesterday.  I accept it is more than an inconsequential burden for the purposes of the first limb, but I do put it is an indirect burden and I will not go back to the submissions about direct burden.  But it is an indirect burden and it is of limited practical effect, and it is to that proposition which I am currently directing my submissions.

HAYNE J:   Well, what exactly then is the proposition you are advancing?  You say that it is more than an inconsequential burden.  By reference to what legal principle do you say it is relevant for us to determine whether it is of large, minor or some other qualitative description, practical effect?

MR KIRK:   Because for a couple of overlapping reasons perhaps.  The authorities in this Court from Lange onwards, as we understand them, indicate that a necessary first step, or one of the steps in analysis, is to identify clearly the nature, effect, extent of the burden, both by legal operation and practical effect.  Secondly, to answer perhaps more directly your Honour’s question, if it is in, for example, to a proportionality analysis by reference to what the plurality in Monis called the undue burden analysis, what is sometimes called in a European context proportionality in a strict sense, it is necessary to take account of the practical significance of the burden placed on the constitutional freedom and the underlying constitutional imperatives in order to assist that against the justification advanced for the burden, and it is in that context that I am seeking to advance these propositions.

KIEFEL J:   But Lange does not expressly say that in relation to the undue burden test, which is the first aspect of the strict proportionality test, it does not actually say that you look at the importance of the legislative purpose if you are speaking of justification in that sense.  It leaves that untouched.

MR KIRK:   Yes, and that, as your Honour, with respect, well appreciates is one of the ‑ ‑ ‑

KIEFEL J:   It goes so far in relation to strict proportionality and then pulls up and that is a question that I do not think, since ACTV has ever really been addressed in this Court.

MR KIRK:   No, and as your Honour, with respect, well appreciates, it is one of the debates about proportionality in a broader context in Europe about the institutional ability of courts to make that sort of assessment, and your Honour Justice Hayne touched on that in part in Monis, too, in talking about the comparisons that are made, but I accept what your Honour says.

KIEFEL J:   It  brings into issue matters which have been not agitated but mentioned in written submissions before the Court in this matter, which is whether or not you then go into margins of appreciation or discretions of legislature, as they might say in Europe because that, I think, really comes into focus when you are looking at the importance of the legislative object and that is when you get into deference, but I do not think those topics really arise unless there is an acceptance that the full aspect of proportionality, in the strict sense, is in the picture.

MR KIRK:   May I say this about margins of appreciation, and as many members of this Court have said in various judgments – Chief Justice Gleeson in Mulholland and a number of judgments since ‑ in a sense the labels attached are not what really matters here, it is the operative mechanisms and tests that are applied.  So one does not want to get too hung up on whether one uses the label of margin appreciation.  There has been some controversy in the literature about that because it is said that that is a European concept applied in a multi‑state community where one has to take account of differences between different nations.

KIEFEL J:   But at a domestic level, I think in the German constitutional court, it would be called perhaps more accurately at the national level, a margin of legislative discretion and that is the area that we are talking about, and in our constitutional setting there is a large question, I suspect, about whether or not with the roles that the judiciary ‑ this Court has said the judiciary should be involved in, whether that is something that would be readily accepted.

MR KIRK:   In our respectful submission, whatever label is attached to it, and at the risk perhaps of being a tad controversial ‑ ‑ ‑

KIEFEL J:   I accept what you are saying about labels, but one also has to be clear about what one is doing.

MR KIRK:   I was about to address that, if I may and if I might be a little controversial, whatever label is attached to it, that notion is already implicit in the Australian case law, in our respectful submission.  It is implicit a range of ways.  It is implicit, for example, in the regular theme picked up in Hogan v Hinch by both your Honour the Chief Justice and by the plurality judgment.  As to the incidental or indirect burden, your Honours will remember what Chief Justice Gleeson said about that in Mulholland which was picked up in Hogan v Hinch, that is reflecting some of the same ideas.

It is picked up in the section 92 case law where to talk of reasonable necessity in the way that was done in Betfair v Western Australia appeared to suggest quite a high degree of scrutiny, what the Americans would call a stricter degree of scrutiny, implicit in which is that we have something of a sliding scale as to the level of scrutiny applied.  It is also picked up in the sorts of authorities referred to by the statutory majority in Monis where reference was made to in that necessity level, the means have to be equally practicable and available, and I think your Honours used the phrase, “an obvious and compelling alternative”, that allows a degree of what the Europeans would call “a margin of appreciation for legislative judgment”.

KIEFEL J:   I am not sure that that is right, Mr Kirk.

CRENNAN J:   To the extent that limiting donations and expenditure affects the flow of information is not the effect direct rather than indirect as you were just putting before questions?

MR KIRK:   We would seek to put it, your Honour, as indirect and incidental.  It is indirect first in that it is – I accept the point your Honour is making, but it is indirect in that it is a burden - such burden as we recognise is on the recipients, but that leads to your Honour’s question about, well, it is still potentially restricting their speech.  It is an incidental and limited ‑ ‑ ‑

CRENNAN J:   Well, communication is less free given the limits on donations and expenditure.

MR KIRK:   I agree with your Honour with respect to this extent:  there is less money available potentially to expend, but that of course leads to the point I will shortly try to get to, which is that the amount that can be spent anyway is capped on the key ECE expenditure.

CRENNAN J:   One reason I suppose the plaintiffs seem content to refer to the caps as “modest caps” is that that aspect may of course feed into the second Lange test in relation to section 96D, the legitimate purpose being, as everyone has articulated, to avoid the risk or the reality of corruption or undue influence.

MR KIRK:   Yes, which picks up a point I will come back to which is that – and as I submitted to your Honour Justice Kiefel yesterday, there is no doubt there are a range of possible mechanisms available here to seek to deal with that core issue, a core issue which is not in dispute, it has been recognised around the world.  What has been employed in this Act is a range of mechanisms to a range of extents and in a sense one of the arguments put against us by the plaintiffs is that we should have gone further, or we could have, if we wished, gone further on one mechanism, which is restricting donations as against everybody instead of stopping halfway in terms of restricting donations as against everyone, restricting them from a certain portion completely, that is, prohibiting them completely from a certain proportion of people and restricting it as against others.

There is no constitutional principle, in our respectful submission, which requires that any particular mechanism be pursued to the nth degree.  It is reasonable, in our submission, to say we have four or five mechanisms here, we are going to pursue all of them to various degrees in terms of travelling part of the way down to achieving the legislative goal.  To tie that back in a sense to my exchange with your Honour Justice Kiefel, in terms of making the judgment as to how far to go down that path, that in the end has to be a political judgment because there is no right or wrong stopping point as to how far one goes down in pursuing one particular mechanism versus another. 

That is not to say one gives up on the Lange test and says, well, we have to look at the nature and extent of the burden and assess that against the justification, but where here the plaintiffs say an alternative means was to restrict donations even more significantly, which is what they do say in paragraph 62c of their submissions - they say we could have gone further with one lever so we should not have used the other lever - that is very much in the realm of legislative choice, in our respectful submission, because you can do this in any combination of ways.

KIEFEL J:   Well, Lange, at least, understood by some, suggests that you test it against legislative purpose.  Whether or not one goes further than Lange would presently expressly suggest and say one should weigh the extent of the burden against the importance of the legislative object which is the strict proportionality test.  Some would argue that because it is within the realm of the court and the court has to provide an answer in relation to a burden on a constitutional freedom, it is obliged, even though it is taking on something of a value judgment, it is obliged to answer that question.

The question in the Australian context might be whether or not the court, properly seized of the matter, has to do so or whether or not it simply does not take on that task at all.  Now, that large argument has never been really agitated and it is not, I do not think, in this matter fully ventilated either.

MR KIRK:   It is obviously a large question insofar as that a third level proportionality balancing as it is sometimes called, proportionality in the strict sense, is to be employed.  There would be those who argue that one cannot look at just one side of the equation.  The burden without having some sense of the justification on the other ‑ ‑ ‑

KIEFEL J:   That is quite right.  Lange leaves it hanging in the air.  That is fairly obvious.  Going back to your strict scrutiny, you seem to be applying strict scrutiny in a general way to proportionality.  It really only applies, does it not, to the first – what the Lange test does look at and that is the undue burden question because it is concerned with the extent – strict scrutiny is concerned with the importance of the particular freedom in question.  It applies more generally in relation to human rights because there are human rights of varying levels of importance in a social sense, so various levels of scrutiny will be applied to it, but it is much harder to apply that in the context of the very limited question which Lange appears to pose, whether there is an undue burden.  It is hard to see what other work it can have in the Lange test.

MR KIRK:   The point I would seek to add to that, with respect, is that insofar as one is engaging in balancing exercises and reflecting the practical and institutional difficulties your Honours alluded to, it would be our submission for the State that if that is to be done, great care and deference must be taken as to the legislative judgment.  That might depend on the area, as your Honour has indicated.  It might be it is different in a human rights context from other contexts.  In general, because it is inherently about subjective, value driven, often political judgments, that is what the political branches are there for rather than, of course, this branch.

KIEFEL J:   Then it would be argued that, at least by Europeans probably, that the reasonable necessity test itself involves something of a value judgment and that it is not perhaps – one cannot suggest that as objective as the Court would like to be that it can be entirely objective in making that assessment and yet that has been done in section 92 cases.  It has always been done.

MR KIRK:   I would respectfully agree with your Honour that at that necessity level of assessment there are value judgments to be made and, if I might respectfully suggest this, in a sense that is implicit in what your Honours in the plurality in Monis said at paragraph [347]. I have the ALR version which is 295 ALR 259. I am not sure if that or the ALJR version was on the list – which is also 87 ALJR 340 and at paragraph [347] your Honours in the statutory majority referred to:

the proper role of the courts in assessing legislation for validity, such a conclusion would only be reached where the alternative means were obvious and compelling, as was the Tasmanian legislation in Betfair –

Now, implicit in that sentence ‑ ‑ ‑

HAYNE J:   That is at page 408 of the ALJR.

MR KIRK:   I am sorry, your Honour.  Thank you.  Implicit in that sentence, in our respectful submission, is a notion – picking up on what your Honour Justice Kiefel has just said – that even in applying the necessity analysis it is not a simple mechanistic exercise, that there are issues of degree involved, for example, as to how close it needs to be to be equally practicable and available how obvious and compelling that alternative needs to be because it is often the case that one can say, “Well, you could have just tweaked the legislation a little and done it a little differently”, but one has to look at it in a more substantive level.

KIEFEL J:   Some might suggest it goes to a question of onus of proof.

MR KIRK:   Which, yes, is also perhaps tied up in there and was touched upon in Betfair v Western Australia, by implication, and does not extend expressly, I think, picking up on North Eastern Dairy.

FRENCH CJ:   Now, you were going to take us to the question of purpose in 96D, were you not?

MR KIRK:   I am.  Can I just postpone that?  I am not avoiding it, but ‑ ‑ ‑

FRENCH CJ:   I hope not too long.  I think it is a fairly critical issue.

MR KIRK:   Not for too long.  I just want to finish going over the statutory scheme and then I will deal with purpose.  I recognise the importance of that issue.  I was just wanting to say something first about the possible submission that this is unfair with respect to either major parties versus minor parties or the ALP versus other major parties.  First, as to the effects on the major parties versus the Greens, if I could take your Honours to the special case book, volume ‑ ‑ ‑

HAYNE J:   What is the proposition you are getting to, Mr Kirk?

MR KIRK:   I am just seeking to answer an argument put, your Honour, that is all.  The proposition put against us, as I understand it, is that this legislation might be seen to target the ALP and I am seeking to answer that proposition, currently.

HAYNE J:   I would have thought that the identification of the ALP as a party with affiliates might be a point at which you would start in that point, but you take whatever course you want to take, Mr Kirk, but can we get on with the argument?

MR KIRK:   I am going to deal with that, your Honour, but I am trying to deal with a range of arguments and can I deal with this one first briefly.  If I could take your Honours to page 73 of volume 1 of the special case book which is within the special case ‑ there is the figures with respect to the breakup between individual and non‑individual donations for four of the parties in the period 2008 through to 2012.

BELL J:   Could you just give me that page number again, I am sorry?

MR KIRK:   I am sorry, your Honour, page 73 of volume 1 of the special case book which is paragraph 47 of the special case.

BELL J:   Thank you.

MR KIRK:   Now, if one casts one’s eyes over those figures what emerges is that, yes, there is a significant difference with the Greens in that they are very much dominated by individual donations.

FRENCH CJ:   These are particular applications or examples of the application of the law.  We are concerned, ultimately, with its construction and operation as a generality, are we not?

MR KIRK:   No, absolutely.  The point – and I will seek to summarise it very quickly – insofar as there is any benefit to minor parties, that is, the obverse of what was the criticism in ACTV which your Honour Justice Keane referred to yesterday, it illustrates that no scheme here is perfectly neutral.  You can never do something which does not have effects slightly more one way or the other.

Here, if anything, we have gone the reverse from what was criticised in ACTV.  There is no material difference between the ALP and the other parties.  If one looks at the Nationals, for example, they are around about 90 per cent, so that attack is not a valid one and as your Honour the Chief Justice said, one has to look at the overall effect, not the minor detail.

In relation to the effect of 96D on expenditure, I have referred to the caps on ECE.  I will not take your Honours through that, but in practical terms a party can spend – which fields in all 93 Legislative Assembly seats has an ECE cap in the capped six month period of $9.3 million ‑ $100,000 per seat.  That then leads to the submission I alluded to about amelioration by public funding.  There are two relevant and major sources of public funding.  The first is with respect to the Electoral Communication Expenditure.  That is dealt with in Part 5 of the Act.  We summarise the effect of it in our written submissions at paragraph 25 because the detail of the scheme is a bit complicated.

As summarised there, where one gets to is that for parties they can receive back up to 75 per cent of their ECE.  It is slightly different for candidates but that is the relevant figure.  The other source of funding is what is called the Administration Fund which is dealt with in Part 6A, Division 2.  If I can summarise the effect of that, it leads to, currently, a potential annual payment to parties who meet the criteria and who are major parties – that is, they have at least 25 seats in the two Houses combined – of $2.276 million annually.

Doing some quick calculations, that over the four‑year electoral cycle, is a figure of about $9.1 million.  To put that in some practical context, for the ECE funding, if one fields in all 93 seats, you will receive back – and assuming full expenditure – just under $7 million – $6.975 million.  If you can claim the full admin funding, that is $9.1 million.  The total over the four‑year cycle is $16.075 million if fielded in all Legislative Assembly seats.  For the ALP, which fielded in 88 seats, it gets a bit less ECE and that would lead to a figure of $15.7 million.

One can compare that to what the ALP – just taking that as an example – actually spent in the last four‑year cycle we have figures for, which is at page 71 to 72 of the first volume, over that four‑year cycle they spent just under $15 million – $14.972 million if one adds it up.  To summarise, the public funding now available to the ALP is a sum of some $15.7 million which exceeds what they spent in the previous four‑year cycle.  I do not suggest that that completely ameliorates the burden.  It does not for this reason.  The ECE funding, we only give up to 75 per cent, we do not give 100 per cent.  They need to raise that 25 per cent themselves.  That is a relatively low amount.  If one fields in 88 seats, it is a figure of $2.2 million.  If one fields in all 93, it is $2.325 million.  That is the amount of money they need not provided by public funding to compete on the sort of terms they have been doing over the last four years.

FRENCH CJ:   Do you put this as an amelioration of a global prohibition, which is not in terms limited to particular political parties, albeit it may operate differentially for particular reasons, particularly in relation to affiliates, but what is the legal significance of that kind of amelioration when we are talking about the generality of the prohibition imposed by section 96D?

MR KIRK:   The figures I have just given are figures for a major party fielding in all 93 seats, it is not directed to any particular one.  What it illustrates is that the practical amount of money that needs to be raised is very limited.  The significance of that for 96D is that, first, the practical effect of 96D, vis‑à‑vis the donation caps, is limited because much of the work that the legislation does in restricting how much money can be raised is by the donation caps.  But, secondly, there is not much money they need to raise and so the claimed significance of 96D, which, for the 21 affiliated unions might be $420,000 over a four‑year electoral cycle is not that significant, particularly when one realises that the relevant amount that they need to raise for ECE where they get ample funding for administration is of the order of $2.2 million to $2.3 million.

FRENCH CJ:   I suppose it obviously leads into the question, if it is not significant what is it there for?

MR KIRK:   That leads me now to the purpose of section 96D.

FRENCH CJ:   Thank you.

MR KIRK:   A long delay.  Can I deal with that first at the general level of the statute, recognising that that is a start, not an end, and then come to linking that in to 96D in particular?  I do not think there is any dispute about the general purpose about minimising the actual and perceived potential for persons and entities to exercise undue, corrupt or hidden influence, I think I made the point yesterday we are not talking just ‑ ‑ ‑

HAYNE J:   Well, it is a slogan with no content, Mr Kirk; you have got to unpack it.

MR KIRK:   Well, let me put this way, if I may, your Honour?  We are not talking just about overt corruption in the sense of bribery and so forth, we are talking about a deeper – or including a deeper and more insidious issue about gaining access to and influence over political players, either at the State level or the local government level, because of donations.  Because politicians and parties need to raise money to be re‑elected, at least that is the general perception, and they would not be spending all this money if they did not genuinely believe they needed to do it to compete, they have the significant need to raise money to compete politically, they need to persuade people to donate, it is an inevitable human truth that that may create either a sense of entitlement in the donor, a sense of obligation in the recipient or the perception of such in either.  These are not novel propositions, these are propositions recognised around the western world and reflected, for example, in the parliamentary library paper my learned friends handed up yesterday which referred to legislation dealing with this sort of issue around Australia.

KIEFEL J:   Which shows that uniformly the methods thought to be necessary to deal with it are a register and public disclosure of donations, together with a capping of donations.

MR KIRK:   Might I make a couple of submissions about that, your Honour?  Things evolve.  New South Wales has been through a particular period which has led to this legislation.  Now, there is no doubt that this legislation goes further than other States have gone, as I understand it, other States and Territories have gone.

KIEFEL J:   Well, it has done it in two stages, has it not?  These are the 2012 amendments.  The 2010 legislation was pretty much on a par with the other States.

MR KIRK:   Yes, it has continued to ratchet up over the last few years in the way your Honour has outlined.  I think my learned friend said it is a much amended Act and that is true.  It may be relevant to take account of what other States and Territories do but the obvious danger is that one does not hold back any new legislative development by reference to some lowest common denominator approach.  I am not saying that is irrelevant to look elsewhere, but one has to be aware of that danger. 

KIEFEL J:   That may be so, but it still calls for an explanation.

MR KIRK:   Yes.  Can I give converse examples, which is that in the United States at federal level and in Canada at federal level they have donation bans on corporations, including labour organisations.  We have referred to that in our written submissions - sorry, I will give your Honours the reference to that in a second.  So that illustrates there are a range of responses around the world.

To come back to the general purpose, to the extent that access to or influence over decision‑makers is easier because of money provided or to be provided, that means the operation of governmental process are not dependent on need or merit, or at least that may be the perception, and that is contrary to principles of representative and responsible government and contrary to the equality that is inherent in the notion of universal suffrage, accepted by majority of the Court in Roach.  There is also an issue referred to in a range of contexts ‑ ‑ ‑

HAYNE J:   How?

MR KIRK:   Sorry, your Honour?

HAYNE J:   How?  An election yields a winner and a loser.  Typically, you have 52/48 split.  How is this contrary to universal suffrage, Mr Kirk?

MR KIRK:   I said it was contrary to the principles of equality ‑ ‑ ‑

HAYNE J:   Yes, how?

MR KIRK:   That access to and influence over government decision‑makers should depend on having made a donation or promising a donation and it is recognised around the world and in Australia that to make a donation or to promise a donation has in the past gained access to Ministers, to MPs and that is preferential access based on money, and to give preferential access based on money to Ministers or politicians, that is what, in our respectful submission, is contrary to principles of representative and responsible government.

There is also a principle which I think your Honour Justice Keane alluded to yesterday that - I think it was your Honour - to the extent that money talks in gaining access and influence, to reduce that imperative promotes the possibility of all voices, in particular the voices and interests of ordinary electors being heard and not drowned out by the economically dominant; that sort of consideration was referred to, for example, by the Canadian Supreme Court in upholding very significant third‑party campaigner expenditure restrictions.  Without taking your Honours to it, it is Harper v Canada [2004] 1 SCR 827 at paragraphs 86 to 87.

A similar notion was referred to by the House of Lords in a case which was not in our written submissions called R (Animal Defenders International) v Culture Secretary [2008] 1 AC 1312, see especially Lord Bingham at paragraphs 27 to 28 and Baroness Hale at paragraphs 47 to 48, and I note for completeness that case, or a variant of that case, went to the European Court of Human Rights which also rejected the challenge.

KIEFEL J:   What was the year of that decision, Mr Kirk?

MR KIRK: Sorry, your Honour, [2008] 1 AC 1312 and the European Court of Human Rights decision is called Animal Defenders International v United Kingdom.  I could not find a medium neutral citation but it was handed down on 22 April of this year. 

Now, can I then go to the key point of seeking to link section 96D to that general purpose or, to put it another way, as your Honour Justice Hayne asked me, what does it matter where the money comes from?  First, because 96D represents a significant step down the path to banning all donations, all donations can create the potential and the potential appearance of the preference I have just outlined.  By banning a significant source of donations as the State has done, it advances the objective of just cutting off that stream of money and that danger altogether.

CRENNAN J:   What about participatory democracy in the context of that submission?

MR KIRK:   The only restriction placed on participation of whether it is individuals or churches or interest groups or so forth is donations.  It does not restrict any form of communication by those groups.  If it did, that would be quite a different case but it does not.  I recognise that a question might arise about the third‑party campaigner expenditure caps but that is not this case and I have already noted Harper v Canada where far more significant third‑party campaigner caps were upheld. 

There is no significant restriction on principles of participatory democracy.  The real burden that I sought to recognise yesterday is an indirect burden, as I put it, on the recipients, the parties, primarily, not those who wish to speak, not those who wish to donate.  So the churches, for example, if the churches wish to be heard on some particular issue, there is absolutely nothing restricting them, save that they cannot donate to a particular party.

CRENNAN J:   Corporations may on occasion donate to both sides of politics on the basis that there is a value in a stable democracy, that is to say the donation is to support the democratic system.  It creates stable environment for trading purposes, for argument’s sake. 

MR KIRK:   Your Honour, I would certainly not want to be heard to say that every donation is for the purpose of gaining preferential access.  It is not.  I am not making that submission.

FRENCH CJ:   What about a $20 donation from a non‑elector?

MR KIRK:   There are issues of degree, your Honour.

FRENCH CJ:   That is picked up by this, is it not?

MR KIRK:   That is true.  It is picked up and it may be that for de minimis donations of the kind your Honour has spoken about, then there is no significant danger.  That would be accepted.

FRENCH CJ:   It takes us, though, to the global character of this prohibition.  It does not seem to be nuanced or calibrated in such a way as to lead to a ready inference that it is directed at problems of access and undue influence.  I mean, if a political party, for example, were to set up some kind of internet donation system, I imagine perhaps they do, where small donations were sought and then - I think this happened in the first Obama presidential campaign - anybody who is not an elector, they could not receive donations, however small, from anybody who was not an elector.

MR KIRK:   Well, of course, that is part of the American law that they cannot receive donations from foreigners, for example.

FRENCH CJ:   Yes, but I am just talking about this.

MR KIRK:   Yes.  But the attack, to deal with the substance of your Honour’s point as I understand it, the attack made on us and made on 96D is not that we prohibit $20 donations from the unions.  It is that we prohibit more significant donations than that.

FRENCH CJ:   Well, you prohibit all donations from non‑electors and that goes to the question which, as I understood it, lay at the heart of the submission made by the plaintiffs.  What is the rational connection between this prohibition and the overarching purposes of the legislation which you have referred to?

MR KIRK:   I am seeking to draw two.  The first is that it is a significant advance down the path to banning all donations where all donations raise a concern.

FRENCH CJ:   Well, that just tells us what it is, it does not tell us about purpose.

HAYNE J:   Well, I do not agree it tells us what it is.  It tells what it might become later.  Really, Mr Kirk.

MR KIRK:   Well, we would respectfully submit, it is plainly a complete prohibition for certain people, those people being non‑electors.  Now, for reasons I will seek to develop in a couple of minutes, that is a constitutionally significant distinction between electors and non‑electors, but I will develop that shortly.

KIEFEL J:   But it does not work against those who are enrolled as electors who are individuals who may have a lot of money and wish to influence.  It does not address that area at all.  In fact it permits that to continue.

MR KIRK:   Up to the donation caps, that is true.  That leads me to the second point I was going to make, but I recognise that the submissions I am about to put raise issues of degree, but a view has long been taken in some jurisdictions around the world, of which New South Wales is now one, that particular concerns arise in relation to bodies corporate.  We have dealt with this in our written submissions, but I will briefly summarise.  That is so because of their aggregation of resources by virtue of their collective nature, their intrinsic self‑interest.  I would also refer your Honours to the two articles in the special case book; I will not take your Honours to them.  At volume 5 there is one by Professor Ramsay and others, page 2243, and immediately following one by Mr Ian McMenamin.

HAYNE J:   But can you state in proposition form the two objects pursued?  One I have noted as being a step towards banning all donations.  What note do I take about number two?

MR KIRK:   That distinctive concerns arise with respect to bodies corporation such as to warrant a particular prohibition.

CRENNAN J:   But are they not dealt with by the caps on donations, those concerns?  You are talking about their size and financial clout and so forth.

MR KIRK:   Yes, part of the way, part of the way.  I accept the force of what your Honour puts to me, that the State has, to a significant extent, dealt with the danger in one way by capping, to a significant extent, but it has also gone further through another mechanism where it is implicit in the plaintiff’s submissions that we could have gone even further in our caps because one of the alternative means they proffer, paragraph 62e, is more significant general caps.  Well, in a sense, we do have more significant general caps, save that we only apply them to particular people.  In a sense what lies at the heart of the plaintiff’s complaint is a discrimination complaint, that we discriminate against a particular range of people instead of going all the way and banning it from everybody.

I will come back to that in a second, but just to finish my second proposition, the pursuit of self‑interest of companies is distinct from that of their shareholders, potentially distinct from the views even of the management of the board.  It is not true to say, as the plaintiffs do, paragraph 33 of their written submissions, that expression of opinion by a body corporate is simply an “expression of the collective opinion of the constituent members” and there is also a danger that artificial entity status could lead to creation of new entities to circumvent the restrictions.

To come back to the point your Honour Justice Kiefel raised, to put it strongly against me, could not a lot of those be said about well‑resourced persons – leave aside some of the particular nature of bodies corporate.  Can well‑resourced persons still donate?  Yes, they can.  But the view has been taken, not just in New South Wales, that there are differences of degree between bodies corporate which are the main actors in our society and economy, including trade unions, compared to individuals and, further, that if we are stopping the line as to how far we ban donations, it is a constitutionally significant stopping point to say, well, we will not go all the way, we will stop vis-à-vis electors because electors have particular status.

KIEFEL J:   What the legislation has also done is to identify corporations – or donors who are usually corporations – who have particular interests and who are likely to wish to seek to influence more in the provisions of prohibited donors in Division 4A.

MR KIRK:   Yes.

KIEFEL J:   So it has identified problem corporations.  Why does it have to be the whole?  On one view of it, what the scheme of the legislation seems to be to prohibit particular donors and then apply an aggregation system which discriminates, particularly, against affiliates which will be unions.  Effectively, you have got two kinds of prohibitions.  It is just that they are expressed in different ways.

MR KIRK:   I will come back to deal with the 95G(6) point.  As to the Division 4A point, which is the property, developers, tobacco, liquor and gaming, I think, are the four types of entity targeted, that was part of the ratcheting‑up.  It might have actually been the 2008 changes but, in any event, it was one of the ‑ ‑ ‑

KIEFEL J:   Earlier changes.

MR KIRK:    ‑ ‑ ‑earlier changes.  So we had donation caps, we ratcheted it up to prohibit some corporations and we have now ratcheted it a step further to say all corporations.  It may have been that those four types of corporation and business were seen as raising particular integrity concerns – property, for very obvious reasons.  But that is not to see that more general integrity concerns do not arise more broadly than that for other types of corporations and, indeed, as I have sought to submit, for all donations.

HAYNE J:   This is not to do only with corporations.  It says anybody except an elector.

CRENNAN J:   All private donors except electors on the roll.

MR KIRK:   Yes.

HAYNE J:   If the concern is corporations, deal with corporations.

FRENCH CJ:   The notion of entity as defined in section 84 picks up unincorporated bodies.  It picks up trustees of trusts.  The prohibition in subsections (2) and (3) of 96 are related to any individual – elector or not – to make a donation on behalf of a corporation or other entity which picks up those other categories I mentioned.  And, similarly, in (3) – going the other direction – corporations or other entities cannot, as it were, channel donations through individuals, whether they are electors or not.

MR KIRK:   Yes, yes.

CRENNAN J:   Think for a minute of the RSPCA.  They are caught.  They want to have a campaign on the issue of no live exports of cattle.  Individual people may wish to make some very small donations to the RSPCA so there is a collective effort in relation to that particular issue.  How does that scenario relate to the concern with the size of corporations advancing sectional interests?

MR KIRK:   First, there would be no problem with electors donating to the RSPCA.  Secondly, of course, the issue only arises insofar as the RSPCA wants to mount a political campaign by accepting the example ‑ ‑ ‑

CRENNAN J:   Would they be a third‑party campaigner?

MR KIRK:   If they are going to spend more than $2,000 in a capped period then, yes.  So if they are spending more than $2,000 on ECE during a capped expenditure period, which most significantly is the six months leading up to the end of March election then, yes, they would.

CRENNAN J:   Well, that will certainly burden the flow of information on political issues.

MR KIRK:   Well, it may be an indirect burden in that it is conceivable the RSPCA will receive less donations than they would otherwise have received but electors are still free to give to the RSPCA.  The RSPCA is still free to advertise up to its cap, which is not currently in issue, and there is a relatively limited restriction, in our respectful submission.  As to the point I think your Honour Justice Hayne raised, it is not just corporations, that is true.

The focus of the plaintiff’s attack, as we understood it, was on the bodies corporate, which is why I am emphasising that in response, but also yesterday mentioned was minors, for example.  Each raises its own distinct question because with minors, for example, there are in a sense two ways of dealing with illegal activity by minors; one is to have a bright line test, which is what we now have here, the other is to have a Gillick type test or something analogous to a Gillick type test, namely, one which depends on the minor’s understanding of the particular issue and the particular consequences and so forth.

Now, reasonable views can be taken as to whether for this particular legal issue the consent to medical procedure or entering a contract or making a donation that a Gillick type test or a bright line test should be applied.  We have applied a bright line test which is not on an arbitrary age, it relates to the age at which they are eligible to join the rolls.  But, furthermore, to focus on the donors in a sense loses track of what the real burden is, at least as we put it.  The burden, such as it is, is an indirect burden on recipients, not on the 17‑year old apprentice who is still free to write to the paper or mount a campaign as he or she wishes.

HAYNE J:   I have seen a lot of 17‑year‑old apprentice campaigns of that type.  Yes, go on, Mr Kirk.

MR KIRK:   On the internet these days it is not unusual to have such campaigns.  At the heart, in a sense, of the plaintiff’s complaints about targeting bodies corporate and other non‑electors is a discrimination complaint and that emerges clearly in their reply submissions at paragraphs 11 and 12, they overtly use the language of discrimination and the usual discrimination test, but in our respectful submission, in all the discussion in the cases since Lange and, indeed, more generally apart perhaps from the mention by Chief Justice Mason in ACTV and apart from two cases I will mention in a second, it has never been suggested by members of this Court that there is some general discrimination norm built into the Lange issue.

Now, it was argued, as some of your Honours will recall, in Mulholland v Australian Electoral Commission (2004) 220 CLR 181 and if I could take your Honours briefly to that. In that argument there was an attack on the Commonwealth requirement for 500 distinct members before – could register before a party could be registered which was said to be unreasonable discrimination between parties.

Now, the challenge to the provision was rejected unanimously. The discrimination argument was essentially dismissed as not made out, but could I draw to your Honours’ attention paragraph 147 in the joint judgment of your Honour Justice Hayne and Justice Gummow on page 234 - it is the entirety of that paragraph - and also I draw to your Honours’ attention for another reason, paragraph 148. In other words, to pick up particularly the last sentence in paragraph 147, which we respectfully adopt, the necessary focus is on the text of the Constitution and the requirements of the Constitution beginning with the issue of direct choice. Any argument is not assisted by a generic notion such as discrimination. One has to test that against the provisions.

Now, in some instances where legislation plainly distorts the operation of the political landscape, for example, significantly to benefit one type of political group over another, one can see that would lead potentially to an argument that that was a distortion of a direct choice by the people, and that argument could be dealt with.  There is another type of distortion argument which relates to, for example, discrimination based on personal characteristics where if it were said that by reasons of sex or property or being in prison certain persons should be limited in the way they could participate in the electoral system that would fall to be determined by reference to the constitutional language, as was done in Roach v Electoral Commissioner.

If I could take your Honours briefly to that, that is (2007) 233 CLR 162, and turning first to the Chief Justice at page 173, in paragraph 6, about 10 lines in his Honour says:

Could Parliament now legislate to remove universal adult suffrage? If the answer to that question is in the negative (as I believe it to be) then the reason must be in the terms of ss 7 and 24 of the Constitution –

and so forth to the end of that sentence.  His Honour developed that at page 174, paragraph 7, about the last 10 lines, beginning:

That, however, leaves open for debate the nature and extent of the exceptions.

His Honour went on to pick up a phrase from Chief Justice Brennan in McGinty about “substantial reason for exclusion”.  A similar theme is found in a plurality judgment at page 198, paragraph 83, beginning “In McGinty Brennan CJ”.  Just over the page, and at the end of paragraph 83, the plurality said:

In this way, the existence and exercise of the franchise reflects notions of citizenship and membership of the Australia federal body politic.

Then at paragraph 85, first sentence, their Honours and your Honour Justice Crennan said:

The question with respect to legislative disqualification . . . becomes a not unfamiliar one.  Is the disqualification for a “substantial” reason?

Now, in our respectful submission, that sort of analysis is very much built on the statutory language.  It is not some generic notion of discrimination.  It is the statutory language.  In our respectful submission, that is consistent with the emphasis given by this Court in Lange to not some generic notion of representative government but that form of representative and responsible government given effect by the constitutional provisions. One should always come back, in our submission, to the text and structure of the Constitution.

So understood, there is no general discrimination prohibition and there are rational constitutionally based reasons to say, well, if you are thinking about going all the way down a path but you choose to stop by allowing some continued liberty in electors but not in non‑electors, that is a rational stopping point in constitutional metric with which we are dealing. 

One of the arguments put against us relates to the instrumental virtues of communication by non-electors.  That argument falls away, in our respectful submission, when one understands that the real burden, such as it is, is on the recipients not the donors.  In any event, the argument is inconsistent because the plaintiffs accept the permissibility of donation caps.  Indeed, they say we could have gone further.  If we could have gone further in restricting donations, it is inconsistent to complain that we have only gone so far in cutting off sources for funds. 

In relation to the necessity analysis, the availability of alternative means, the plaintiffs at paragraph 62 of their primary submissions suggest three alternatives.  That is on page 13 of their submissions.  The first is greater disclosure of donations, the second is great disclosure of meetings, dealings and interactions and the third, as I have said, is greater restrictions on donations.

As to the first two, we do not dispute that they may go part of the way.  Disclosure and transparencies is plainly for the good in achieving the broad end we have outlined, but they are mechanisms, in a range of mechanisms available, and those particular mechanisms do not address directly the parties’ need for money to compete nor their resulting indebtedness to those who give it, actual or perceived indebtedness.  Nor, incidentally, does it address the issue of lack of membership control over use of funds, which arises with respect to bodies corporate.

As to option (c), that is, if anything, in our submission, a more restrictive option, not a less restrictive one.  To suggest that we should have gone further down the path of banning all donations is a greater restriction.  In our submission, it was open for us to do so; it remains open for us to do so but as to how far the State goes, that is a matter of legislative judgment, not dissimilar by broad analogy to the issue of how far the Commonwealth went in saying a party needs 500 members to register instead of 300 or 700.  In our respectful submission, to quote the plurality in Monis, those alternatives are not obvious and compelling, nor equally practicable and available to achieve the same end.

As to undue burden, we respectfully submit, as I have sought to outline, that the burden is limited.  It is indirect and we draw on the line of cases I have already referred to in Hogan v Hinch at paragraphs 95 to 96 about indirect and incidental burdens.  As to freedom of association, I have already drawn your Honours’ attention to what was said by your Honours Justice Hayne and Justice Gummow in Mulholland at paragraph 148. We seek to rely on that to say it relevantly adds nothing. But two particular points were made by my learned friend; one, that section 96D prevents people making donations collectively. By that my friend meant through a corporate body. Nothing in the scheme prevents members themselves donating, nor does it prevent them donating in concert. It is quite easy for them if they wish to make a greater splash to donate in concert, so long as they do so in their own names.

A second point was made that it prevents people collectively affiliating with the ALP, and it was suggested in my friend’s written submissions, it prohibits a long‑established form of political association between the ALP and affiliated unions.  In our respectful submission, it does no such thing.  It prevents unions, amongst many others, from paying donations which include affiliation fees.  It does not prevent affiliation and, indeed, as your Honours would be aware, section 95G(6) which I am about to turn to illustrates that the Act assumes that such affiliations may continue.  It does not prevent, contrary to my friend’s written submissions, union members from saying, we are affiliated with the ALP New South Wales.  For those reasons, we submit section 96D is valid.

HAYNE J:   Can I just understand exactly the propositions that you have made?  You identify the object of 96D as being:  one, to take a step towards complete prohibition on donations; two, as being to deal with distinctive concerns about corporations, notably, concerns arising from aggregation and pursuit of self‑interest and associated matters of the kind described.  Do I capture accurately the identified objects?

MR KIRK:   Yes, your Honour, within that broader general purpose that I have also outlined, yes.

HAYNE J:   Each of the objects is or is directed towards an end which your side seeks to identify as legitimate by reference to the avoidance of a disfavoured form of influence over governmental decision‑making, is that right?

MR KIRK:   Yes, actual or perceived, I think your Honour said that, yes.

HAYNE J:   Very well.

MR KIRK:   Unless there were any other questions about 96D, I was proposing to move to 95G(6), and here I can be briefer.  It is not in dispute, of course, that this provision operates in the context of the ECE caps.  Those caps, caps on electoral communication expenditure, act of course to limit expenditure during cap periods on paid communication.  Any burden on communication of the caps is entirely neutral as to the content of the communication.  It goes only to the means of communication, whether paid or not.  It only applies in limited periods and it only applies to ECE.  There is no challenge to the caps here, but the reason I have mentioned what I have just mentioned is because we do not dispute that the communication expenditure caps restrict what can be spent in relation to political communication and because the caps are an incident of that scheme but, yes, there is some burden such as to satisfy the first limb of Lange imposed by the caps on ECE of which section 95G(6) is one part.

As to the purpose of the caps, fairly evidently it is to restrict the expenditure which restricts the ever driving need to raise more funds which goes back to the broader concern I have outlined.  There is also the related purpose again of well‑resourced voices drowning out other voices, as referred to in Harper v Canada. 

There are a series of aggregation provisions in section 95G all sharing the same broad purpose which is to fairly and in a reasonable way avoid circumvention of the caps by use of affiliates.  The question ultimately becomes, to put it in very broad terms, the reasonableness of the criterion of aggregation selected.  So if I can take your Honours to 95G(6) which is at page 71 of the legislative materials bundle.  The criteria of what is an affiliated organisation are set out in subsection (7) and there are two alternative ones.  First, that the affiliate is:

authorised under the rules of that party to appoint delegates to the governing body of that party –

or secondly, that the affiliate is authorised under the rules of that party -

to participate in pre‑selection of candidates for that party –

Now, characteristics of those criteria are that the identified links are formal.  They arise under the rules of the party, that the links are in the control of the party because they arise under the rules of the party.  There are also elements of choice, of course, in the affiliate.  Both criteria raise matters of significance to the party, in our submission. 

The appointment of delegates to the governing body indicates that they, the affiliate, have a seat at the table of the body which determines the nature and direction of the party.  They have a seat at the heart of the party.  To “participate in pre‑selection” means that the affiliate is involved in selecting the political representatives of the party who if elected will be the ones actually exercising political power.  Both criteria give the affiliate an opportunity to shape the policy, the strategy, the political representatives and through them, the political communications of the party. 

Now, why would an organisation wish to affiliate?  It is not to donate money because if they wish to and if they are permitted to and, of course, 96D would not permit them, leave that aside, otherwise if they wish to donate there is no need to be affiliated to donate.  The presumptive reason an affiliate would wish to be affiliated is because it gives direct and significant political influence in the party.  It gives them a place at the table.  That being so, in our respectful submission, it is entirely reasonable to conclude that they are intricately intertwined with the party such that their ECE should be aggregated. 

The attack of the plaintiffs comes down, as we understand it, to three core points:  one, that there is a practical difficulty with compliance, what my friend called the “chilling effect”; two, that the criteria selected do not ensure identity of opinions; and, three, that criteria selected do not amount to control.  Can I deal with those in turn?

First, as to the practical difficulty - we accept that there are some practical issues that arise in knowing what the expenditure will be and in getting up as close as one can to the caps.  But that practical difficulty is inherent in any cap on expenditure and the caps here are not challenged.  If affiliates are going to spend money on ECE, they face the same issue.  They need, carefully, to monitor what they spend for fear of breaching their own cap – the third‑party campaigner cap.  Every player who is engaged in electoral communication and related expenditure must be aware of what they are spending.  The effect of the affiliation ‑ ‑ ‑

HAYNE J:   And control what they can control.

MR KIRK:   I am going to come back to control, your Honour.  A close eye has to be kept on it.  The effect of 95G(6) is that it has to be co‑ordinated.  It is said by my friends in reply that that involves the parties seeing into the private affairs of others.  There is no doubt that these are distinct corporate entities.  But, in our respectful submission, that is not a fair characterisation – looking into the private affairs of others – when one understands the intricately intertwined linkages between the affiliates who meet the criteria and the party.  Furthermore, if the practical difficulties are too great, there is a simple remedy which is to disaffiliate.  If affiliates and parties wish to have the freedom to spend independently ‑ ‑ ‑

HAYNE J:   Well, if that is the proposition, Mr Kirk, has not the baby just left the bath with the bathwater?

MR KIRK:   I hope not.

HAYNE J:   Have you not, by proposing disaffiliation, given, perhaps, a tolerably clear indication of the effect of this legislation on political discourse in the State of New South Wales.

MR KIRK:   No, in our respectful submission, because the point I was wishing to make was that if this is a burden – and we do not accept it is an undue practical burden – so that is perhaps the real answer to your Honour’s question, but if some parties perceive it to be, if they wish to have the freedom to spend completely independently, then they have to be independent.  In our respectful submission ‑ ‑ ‑

FRENCH CJ:   When you say “independent”, you mean in a formal sense.  A third‑party campaigner with strong informal links and influence upon a party is not affected by these aggregation provisions. 

MR KIRK:   That is right.  So is the scheme perfect?  No, it is not.  But, there are difficulties ‑ ‑ ‑

FRENCH CJ:   Well, is it elevating form over substance?

MR KIRK:   No, in our respectful submission, your Honour, because there are always difficulties in drawing the lines here.  The plaintiffs do not contest the legitimacy of aggregation per se.  They accept that it is legitimate to seek to aggregate to avoid circumvention.  It is a problem well known to the law to say – when one is seeking to regulate in one way – that one then has to regulate affiliates.  It rises in a whole range of legal areas – criminal law and elsewhere – corporate law.  Lines have to be drawn as to how far one goes.  Legislative choices have to be made.  Could we have gone further?  Yes.  In this sort of area it is always possible to say one could have gone further, but it is not as though – and this is perhaps an important point – we have simply targeted, sotto voce, the ALP.  If one looks at 95G(1) and (2), particularly 95G(1)(c), which is then picked up by 95G(2), if parties – to quote (c):

form a recognised coalition –

the effect of subsection (2) is that their party caps are aggregated.  Coalition parties are aggregated.  There is not just targeting here of an historical practice of the Labor Party.

HAYNE J:   Is there any other party to which 95G(6) presently has application?

MR KIRK:   There is no fact in the special case indicating either way.  The question might also be asked though, might I respectfully say, of 95G(1)(c).  The second line of attack by my learned friends is as to what ‑ ‑ ‑

HAYNE J:   Well, your side does not point to any other party to which this would apply?

MR KIRK:   There is no fact either way in the special case.  As to identity of opinion, no doubt there may well not be complete identity of opinion between affiliates and the party, but as to agreement on core political objectives one can presume there is in light of the closeness of the criteria in subsection (7).

HAYNE J:   Why?  Are we to ignore 100 years of history in this country, Mr Kirk?  Are we to shut our eyes to what has been observed over the last decades?

MR KIRK:   I would not ‑ ‑ ‑

HAYNE J:   Apparently so.

MR KIRK:   No, I would not ask your Honours to do that.  But that 100 years of history certainly discloses the close affiliation of trade unions and the Labor Party and I am not disputing that.  It also discloses, if one is permitted to talk about the 100 years of history, that it is not uncommon for political campaigns to be mounted by, let us say, a party and its affiliates for common goals and to make the application of the communication expenditure caps fair, neutral and applicable to all coalition parties are treated together and affiliates who are closely interlinked are also treated together with the party. 

As to identity of opinion, if identity of opinion was the relevant criterion one would not aggregate coalition parties.  If identity of opinion was required one would almost never aggregate because in practical terms, particularly in the political playing field, even close affiliates are in practice never going to have completely identical opinions.  If they did they may as well be part of one and the same party. 

That brings me to control.  We accept that the criteria set out in subsection (7) do not amount to control.  We never said that it did.  But the links, in our submission, are close and intimate and the question comes down to this:  how close is close enough to say that the expenditure should fairly be treated as part of one and the same substantial source?  If control was to be the criteria or the key criteria, again in practice that would defeat aggregation.

Political parties are not like wholly owned subsidiaries in the corporate world which are subject to practical control of the parent.  They, of their nature, tend to have disparate controls spread through a range of persons and bodies.  If one applied control, for example, to independent parties in coalition one would not aggregate, and yet most people would say if one is imposing caps on expenditure you have to recognise the reality that parties in coalition, they do not control each other, they sometimes disagree, but in substance they are part of the same political force and the same is true, regardless of control, of those dealt with in 95G(6) and (7).

Your Honour Justice Hayne yesterday raised an issue with my learned friend as to whether the control is the wrong way around, as I understood it, because the party does not control the affiliates.  In our respectful submission, the issue is not control, it is whether it is reasonable, in a broad sense, to treat this expenditure as in substance part of the same political force.

There is, as I have sought to put, no one right answer here.  There is no simple solution as to where you draw the line on the increasing spread of affiliation.  For that reason, to pick up on a point raised by your Honour Justice Kiefel yesterday, it is not an issue, in our respectful submission, of suitability because this does draw the line at a particular place of affiliation.  The real attack made by our learned friends, if one seeks to put it in a proportionality analysis, is that it goes too far out in drawing the line which might be said to be an undue burden.  It is not a necessity issue for much the same reason.  To draw the line closer in, for example, by reference to control, is not to achieve the same end to the same degree, it is to achieve it to a different degree.

The real complaint here, in proportionality terms, is undue burden and, in our respectful submission, where this is not just a one‑sided measure, there is the correlative earlier in the section where the links are of the formal and intimate kind that we have sought to identify, where the principle of aggregation is not challenged, where no practical alternatives have been proposed by the plaintiffs to achieve the same end and where there is wide room for a reasonable difference of opinion this is not a case, in our respectful submission, where the legislation exceeds the permissible bounds.  Unless there is anything further?

FRENCH CJ:   Thank you, Mr Kirk.  Yes, Mr Williams.

MR WILLIAMS:   The Commonwealth’s oral submissions will be restricted mainly to construction of the Commonwealth Act under section 109.  In paragraph 1 of our outline we have referred to the detailed written submissions that we have advanced on construction.  Orally, we would wish to do no more than to adopt the oral submissions of New South Wales as to the limited scope of section 96D.

In paragraphs 2 and 3 of the outline we identify matters where the Commonwealth’s position differs from that of the States, at least the position the States articulated in writing. Paragraph 4 is a matter where the Commonwealth’s position differs from that of the plaintiff. We have developed in writing our submissions as to why donation does not of itself involve a relevant political communication focusing upon the limited nature of the implication coming from sections 7 and 24.

Can I merely add, orally, a reference to the point that your Honour Justice Crennan raised this morning?  One difficulty with treating donation as communication is that corporations sometimes, and I think commonly, donate to all major parties.  Just exactly what message is to be inferred from that is a matter of speculation but it points to one difficulty with that approach of the plaintiff.  In paragraph 5 we refer to another matter on which we differ from the States.

Turning to the second limb of the test, we are neutral, of course, on the ultimate application of the test in relation to ultimate validity.  We do enter the fray in paragraph 6 in relation to the permissible or legitimate ends, the objects which have been the subject of debate.  Could we refer, particularly, to paragraph 43 of our written submissions where we tease out in a way that is different to that of the defendant some possible objective purposes that can be inferred from section 96D?  In 43.1 we refer to limiting influence overall but particularly “limiting donations to those with a stake in the system”.

One can see that, in a sense, as embodying perhaps a notion of citizen’s democracy which is not far removed from the observations of the Chief Justice in Roach at paragraph 83 that Mr Kirk took the Court to this morning.  Paragraph 43.2 we deal ‑ and this does overlap with the submissions put by the State ‑ with the question of “undue and disproportionate influence by corporations” and others.  In 43.3 we deal with the circumvention, the objective of preventing circumvention.  Then those matters we develop further in the written submissions from 44 through to 47.  I do not wish to add further to those.

In paragraph 8 we formulate compendiously the question.  We have put submissions on the issues of principle that are involved here and we refer to those in paragraph 7.  In answer to the questions that your Honour Justice Keane posed to the Solicitor yesterday, the answers that we would give to those questions differ from those that New South Wales would give, or has given.  Each would, in our submission, depend on the precise legislative and factual context in the sense of constitutional factual context.  It would involve an application of the kind of compendious – of the test that we have compendiously formulated in paragraph 8 and circumstances could be imagined.  A party at a State level or a branch of a party that contained fifth columnist elements representing the interests of a hostile foreign power where there may well be a legitimate purpose in taking legislative action to, in effect, deregister the party, action of a kind that would be regarded as drastic in other circumstances.

Could I take the Court briefly to Justice McHugh’s observations in Coleman v Power (2004) 220 CLR 1? The relevant observation is at page 52 and it is in the middle perhaps of paragraph 98, talking here of laws that burden directly I think in the line beginning “compatible with the constitutional freedom”:

Thus, a law that sought to ban all political communications in the interest of national security would be invalid unless it could be demonstrated that at the time such a prohibition was the only way that the system of representative government could be protected.  In such a case, the issue would not be whether the needs of national security require the prohibition of communication on political and governmental matters.  It would be whether, at that time, the system of representative government is so threatened by an external or internal threat that prohibiting all communication . . . is a reasonably appropriate and adapted means –

Now, perhaps substituting proportional means that, in our submission, indicates the kinds of issues that might in some extreme circumstances give an affirmative answer to the questions that your Honour Justice Keane posed yesterday. 

Could I also mention briefly a matter that your Honour Justice Kiefel raised this morning, the difficulties in the court’s assessment of legislative decision making?  If we could simply add a reference there to the judgment of your Honour Justice Keane in Magaming at [105] in relation to that issue.  Your Honours, if I could then – of course we do not address the outcome, as I have indicated, of the application of the principles we identify in 8.

Could I turn then to the question of section 109 and the Commonwealth Act?  The first task, in our submission, is one of construction of the Commonwealth Act.  If your Honours have – it is on somebody’s list, the whole of Part XX of the Commonwealth Act, which I think includes the definitions.  It is a slightly wider version than that that was attached to the plaintiff’s submissions.  I propose to spend two or three minutes outlining the scheme of the Act before going to the particular provisions, the key provisions being found in Divisions 4, 5A and 6.

Could I start in the definition in section 4?  My print has page 6 at the bottom.  I am not sure whether that reference is of assistance, but there is a definition on that page of “political party” and your Honours see that it has some similarities with the State definition.  Then over the page on page 7 at the foot of the page, “registered political party”, like the State system there is no obligation to register but there are benefits that flow from registration such as capacity to have a joint ticket, capacity to distribute collective electoral material and, if it be a benefit, capacity for the money to be paid directly to the registered organisation rather than the candidates when one is considering the public funding.

Could I take the Court then through to Part XX which starts on page 310, Division 1 - there are I think seven divisions.  I will summarise the divisions and then come back to the particular provisions.  Division 1 deals with preliminary matters, but before passing beyond it, can I take the Court to page 313, where there is a definition of “State branch”.  About point 6 on page 313 “State branch” is defined, simply accounting in these definitional provisions for the possibly different forms of political organisation that one might find within a federal polity. 

On page 316, Division 2 starts and it deals with “agents” and in short a political party and groups of candidates and candidates need an agent for various purposes.  Division 3 starts on page 321.  It deals with public funding of election campaigns and the principal provision perhaps is in section 294 on page 321, a $1.50 per first preference vote. 

Division 4, which is one of the critical divisions, starts on page 332.  It deals with disclosure of donations.  I will return to this division to deal with a number of specific provisions.  Division 5 is on page 344.  It deals with disclosure of electoral expenditure.  None of the particular provisions of that are relevant but your Honours will infer from the heading what the subject matter of it is.  On page 348 - and this again is important - Division 5A, “Annual returns by registered political parties and other persons” and then on page 354, Division 6 is found - miscellaneous provisions in which one finds section 327 upon which the plaintiff bases much of their section 109 inconsistency case. 

Could I then, returning to paragraph 12 of our note of oral argument, summarise the nature of the provisions that I will take the Court to in slightly more detail in a moment?  They are provisions that impose disclosure and repayment obligations in respect of gifts made by both natural persons and corporations and combined with some prohibitions to make those obligations effective.  If I could take the Court back into Division 4, perhaps to section 304, the first of the provisions that the plaintiffs rely on, it imposes obligations on an agent to disclose gifts. 

Section 305A on page 334 deals with gifts to candidates.  The language here is deliberately neutral as between corporations and natural persons:

(1)A person must provide a return in accordance with this section if:

(a)the person makes a gift or gifts . . . 

(c)at the time the person makes the gift –

et cetera.  That neutrality of language is carried through in the other subsections.

The same is found in section 305B, “Gifts to political parties”.  These are obligations on the individual donor where the gift is more than $10,000, and again it is in neutral language.  Section 305B does include specific reference to “a State branch of a registered political party” and that is a matter that the plaintiffs put some emphasis on but, in our submission, that is just the precise delineation of the obligations that the Act imposes in circumstances where it recognises, as a federal Act, that there will be different forms of political organisation possible within the federal polity and there is no implication, in our submission, of an unqualified permission in State branches to receive gifts.

Section 306 imposes in the passive voice a prohibition on parties, State branches or persons acting on their behalf from receiving gifts anonymously.  Moving then into Division 5A, from page 348, there are correlative obligations in 314AC.  There are obligations on the party to disclose those matters that individuals should have disclosed.  In 314AEC, which is on page 352, annual returns are provided for.

So, turning then to the critical provision in section 327, which the plaintiff characterises as evidencing a permission in the earlier provisions in the Division 4 and Division 5A provisions, a permission to make gifts of these kinds including to State branches which are expressly referred to, it is apparent from the language of 327, and perhaps I will mention subsection (1) first - we deal with subsection (1) in 16.1, but I will not deal with that further because the plaintiff has not developed it orally at all but the critical point that the plaintiff depends upon orally in the oral argument is 327(2).

The important point about 327(2), in our submission, is that while the person first referred to is general and includes, as will become apparent, both corporate and natural persons, the other person, the “discriminate against another person” is a reference only to natural persons and that is clear when one goes to the specific terms of (a) through to (d) in subsection (2).  The specific “him or her” is used instead of the general “person” in each case.  At least in the case of the first three rights, if I could put it in that way, the protections, perhaps, the protections concern matters relating to natural persons rather than corporate persons.  Subsection (d) is expressed more generally, but nonetheless it is restricted to “him or her”.

The critical point, in our submission, coming from this is that the protection against discrimination in section 327(2) does not match up with the classes of donors in Divisions 4 and 5A which is, in our submission, inconsistent with any implication of construction coming back from section 327(2) into the earlier divisions.  In a sense, it is that implication that the plaintiff seeks to make orally founds its suggestion of an implied freedom to donate, as it were.  In 16.2 we identify the purposes.  We identify the particular aspects of 327(2).  It criminalises discrimination against natural persons on the ground of donations.  It does not mesh with the disclosure obligations but, importantly, in the third dot point, a discriminative section, 96D, in the State Act, is the characteristics of donors and not the fact of making a donation to a political party.  So the two sections – 327(2) and 96D – are directed at different subject matters.  There is no relevant discrimination on the prescribed ground and legislative discrimination by the NSW Parliament does not fall within 327(2).

If I could take the Court to just one reference in relation to section 109, it is in 244 CLR 508 in Jemena Asset v Coinvest.  We have given a series of specific references.  Firstly, in our paragraph 15 we have referred to Jemena.  We have also given specific references to Momcilovic but I do not need to take the Court to that.  If I could take the Court to page 525, paragraphs 41 and 42?  I invite the Court’s attention to paragraphs 41 and 42.  Having regard to those tests and the factual matters – I am sorry, the particular aspects of the legislative schemes to which I have referred, there is, in our submission, no section 109 inconsistency.

Could I turn then to section 95G(6) of the State Act?  We submit ‑ and again I think we differ from the States in their written submissions at least ‑ we submit that there is a burden for the same reason that we have submitted in relation to 96D.  We identify in paragraphs 18 and 19

permissible purposes, but again the validity of the provision depends on whether it is proportionate in the sense of being sufficiently tailored to the end and in a manner that is compatible with the constitutional imperative.  We refer to constitutional leeway in that respect, but again the Commonwealth puts no submissions as to the application of that test.  Unless there are matters with which I can assist, those are our submissions.

FRENCH CJ:   Thank you, Mr Williams.  Solicitor‑General for Queensland.

MR SOFRONOFF: Your Honours, in our respectful submission, it is necessary in order to determine this case, whichever way that determination ultimately is made, to have regard to the essence of the freedom of communication that is protected by virtue of the Constitution. If your Honours would indulge me this far that I read the passage from Lange at page 561 that we have referred to, the Court said at page 561 towards the foot:

However, the freedom of communication which the Constitution protects is not absolute. It is limited to what is necessary for the effective operation of that system of representative and responsible government provided for by the Constitution.

That point was reinforced, has been reinforced a number of times, at least has been – but the borders of the freedom have been stated and re‑stated many times.  But could I, your Honours, refer the Court to a dictum of Justice Dawson which, in our respectful submission, is important for present purposes and your Honours will find that in Levy v Victoria 189 CLR at 608. His Honour referred to the Lange test but after quoting it at the top of page 608 his Honour observed that it is necessary always to bear in mind that however one frames a test, the ultimate question is a different one.  The test is an aid to answering that question.  Just below the quote, his Honour said:

There can be no objection to approaching the matter in this way, provided that it is borne in mind that, putting to one side the situation under s 128, the ultimate question is whether the law is compatible with the elections which the Constitution requires.

And in the paragraph – could I invite your Honours to read the paragraph beginning with the words “Free elections do not require”?  So, your Honours, we seek to draw attention to those passages in those two –

HAYNE J:   Do you emphasise the last words of that par?

MR SOFRONOFF:   Of that paragraph?

HAYNE J:   Yes.

MR SOFRONOFF:   Excuse me, your Honour.

HAYNE J:   Because if you do, how do you say they are engaged here?

MR SOFRONOFF:   Your Honour means ‑ ‑ ‑

HAYNE J:   “Reasonable regulation in the interests of an ordered society”.

MR SOFRONOFF:   Is your Honour asking me how those words are engaged in this case?

HAYNE J:   Yes.

MR SOFRONOFF:   We would submit that first one has to identify a communication.  When one identifies a communication, one can then identify who is the person who has made or would be likely to make the communication because that is a person whose freedom is said to be impinged upon.

Then having identified the person who enjoys the freedom and the communication, if there is one, that is said to be affected one turns one’s attention to whether there is any relevant effect – could I use that neutral expression – relevant effect upon that freedom to make that communication or communications within that class. 

We have referred in paragraph 4 of the oral outline to the dicta of your Honour Justice Hayne in Monis and we would accept that the relevant effect might be by obstructing or prohibiting a communication or obstructing or prohibiting certain content to be contained within communications.  This is not a case concerned with content, it is a case concerned with communication, so it is said. 

We would then submit that if there is an effect of that kind upon a relevant communication then the next question to determine is whether the law that has been passed and which is impugned is a law, the objective of which is consistent with the maintenance of parliamentary democracy at the federal level and, secondly, whether the means adopted by the legislature in crafting the law is proportionate to the end that is sought to be obtained.

HAYNE J:   I am sorry, could you restate the first of those propositions?

MR SOFRONOFF:   Yes.  We would submit that one has to determine whether the aim to be achieved by the impugned law is consistent with the maintenance of responsible and representative government at the federal level and also whether the means adopted to achieve whatever end that is are reasonably proportionate, having regard to the fact that we have already accepted, having reached that stage, that there is an effect upon relevant communications.

In our respectful submission, in order, in any case, to analyse the position in those terms one has to have regard to the terms of the Act.  Your Honours have been taken through the Act but may I do so again with respect to some provisions of it for this reason.  This statute is a statute in which there are provisions which attempt to a very great degree to quarantine the limitations upon collection of money and the spending of money to State matters. 

Now, of course, no such attempt can succeed entirely because of the necessary overlap in some degree in any broad political environment but this statute attempts very hard to quarantine the limitations upon collecting money and spending money for State matters.  To demonstrate that could I take your Honours to the provisions of the Act that, in our submission, have that effect.

Where I want to go then is this, that if one has regard, both to the limitations themselves, apart from their limited scope in State matters, and if one has regard to the limitations themselves and to the further limit for their operation confined to State matters, it is then that one asks the question what is the communication, who is the communicator, how has that communication or that prospective class of communications been influenced or effected upon by this statute?  Then one can apply the Lange tests. 

Could I ask your Honours to go first to section 83 of the Act?  The whole Act of course is concerned with protecting the system of voting in New South Wales State elections, and local government elections, but could I ignore them?  In section 83 that is made clear in subparagraph (a).  Then when one turns to section 85, where the expression “political donation” is defined, in our submission that section must be read as referring to a political donation made to a party or for the benefit of a party in relation to a State election. 

There is more than section 83(a) for that, but could I begin by submitting that by virtue of section 83(a) itself there is that limitation imposed upon the definition of “political donation”.  There are other indicators, and I turn to them now.  If your Honours would go to section 95AA, I am dealing just with income now, with collection, I will deal with expenditure separately, 95AA(1) provides that this division, which deals with political donations:

does not apply to donations in relation to local government elections –

That language is significant, in our submission, because it emphasises what is not said, that it applies to donations in relation to State Government elections and does not apply in relation to donations for federal elections.

HAYNE J:   Well, 95AA(2)(a) makes it plain.

MR SOFRONOFF:   Yes, makes it plain, that is right, your Honour, but it does so in a slightly narrower form because it says a reference:

to an election is a reference that relates to a State election –

whereas the effect of those two subsections together is to limit the provisions of this division to State electoral matters.  One then goes to 95A which imposes the caps and again we would submit that one reads the expression “political donations” as political donations in relation to State elections, so that caps are inapplicable to donations for other purposes.  Section 95B then makes it unlawful for a person to accept, upon our argument, a political donation in relation to a State election.

FRENCH CJ:   So you say that every provision here where there is not an express exclusion is to be read as though 83 is distributively inserted?

MR SOFRONOFF:   Yes, and there are other indicators apart from section 85 which I will point to.  The next one is section 95B(2).

CRENNAN J:   Just before you do, 95B(2) seems to allude to a degree of interconnectedness between a party at the State level and at the Commonwealth level.

MR SOFRONOFF:   Yes, your Honour, and, of course, any party, all of the important parties, operate locally, at State level, national level and interstate, and so a person can furnish money generally or for a particular purpose.  What subsection (2) draws attention to is this, that it apprehends two things.  One is that there will be certain accounts, to which we will come, into which the State electoral money must be put.  But the second thing is it contemplates that moneys will be donated in excess of the caps and there is no problem with that under the Act provided that money is not received for State electoral purposes in excess of the cap.  But one can receive as much as one wants from donors provided that the amount applicable for State electoral purposes is the capped amount.

Now, as your Honours know, the provisions in relation to capped amounts for income are not under challenge in this case.  Then if your Honours would go to subsection (4) of that same section, the same provision as applies to federal matters applies to third‑party campaigners insofar as it is not to be used for State matters.

Then section 96 contains provisions obliging parties to maintain accounts.  Relevantly, subsections (3) and (4) require a State campaign account to be kept as a separate account, and subsection (5) does not oblige political donations to be paid into that account but provides that they may be paid into that account.  Your Honours will see then subsection (6) provides in subclause (b) that an amount of a political donation to the party that exceeds the cap may not be paid into the account.  In short, there is no restraint by way of upper limit on donations except in relation to State elections.

Then could I deal with the expenditure side of it, your Honours?  Section 87 defines electoral expenditure and electoral communication and, in our submission, one would import necessarily expenditure of both categories as expenditure in relation to State elections because of the language of subsection (1), for example, “election of a candidate”, “the voting at an election”, and that refers to the relevant State election.  So the expenditure that the Act is concerned with is also referrable – concerned only with State electoral expenditure.

Section 95E provides that the caps which follow apply to State elections only.  Section 95F then imposes the caps, and section 95H then is most important because it requires that the caps be obeyed only during a limited period, namely, from October in the year before the election to the election, namely, March ‑ six months ‑ otherwise the caps do not apply.

There are provisions in the Act which define expenditure to catch attempts to evade it so that you can spend a million dollars on advertising a year before but if the advertising is given in the six months you are deemed to have incurred the expenditure within that six months, but nothing turns on those things.

FRENCH CJ:   Incidentally, just going back to 87(1) for a moment, is the definition of electoral expenditure limited to expenditure in connection with an election because I notice it covers promoting a party and if it is to be limited to expenditure in connection is that drawn from 83?

MR SOFRONOFF:   Which provision is your Honour drawing my ‑ ‑ ‑

FRENCH CJ:   Section 87(1):

electoral expenditure is expenditure for or in connection with promoting . . . a party –

MR SOFRONOFF:   Yes, in our submission, the promotion of the party must be in relation to a State election.

FRENCH CJ:   That is because of 83?

MR SOFRONOFF:   Also because of what follows in the rest of (1):

the election of a candidate –

which is defined as a candidate in a State election ‑ ‑ ‑

FRENCH CJ:   Yes, it is disjunctive, that is all, I am just picking up the disjunctive terms.

MR SOFRONOFF:   That is right.  One then comes, your Honours, to 96D – excuse me, your Honours, I have just lost my place.  Yes, 96D which restricts the ability of anybody to donate money to parties, candidates and third‑party campaigners unless the person is an elector “enrolled on the roll of electors for State elections”, but that restriction upon companies and non‑electors donating relates only to donations for the purposes of State elections.  Against that background of an attempt by the statute to quarantine the limitations upon income and expenditure to State elections, one then has to ask what is the communication here and who would make it?

The “who” is a union or political party, as we understand the plaintiff’s case.  The communication would be a communication made in the course of a State election and, of course, we would accept that a communication in the course of a State election might well be a communication of a kind protected by the freedom.  That is the communication and the communication is to be made by a party.  I do not include non‑voters and companies who are not free to donate because of 96D because, in our submission, for reasons others have advanced, the making of a donation is not an exercise of speech by conduct or otherwise.  It might be, in some circumstances, but generally, in our submission, it is not for reasons that others have advanced and, indeed, as we understand it, for reasons which the American Supreme Court has accepted in Buckley, to which I will come.

So then one has to ask, how has the communication by parties and so on – third‑party campaigners – been affected by these limitations?  The onus, in our submission, is upon the plaintiff to demonstrate a relevant effect.  What the plaintiffs do is to point to a feared, and let us say likely, reduction in political donations and to equate that directly with an ability to speak not just generally but about relevant federal issues and, in our submission, while it might be accepted at the extreme case where political donations were prohibited absolutely, or expenditure on advertising was prohibited absolutely, that one can see a direct connection between a limitation upon income or expenditure and free speech.

One cannot infer it automatically in the case of any particular limitation upon income or expenditure.  Something more has to be shown, in our submission, to demonstrate that a particular party – let us take the ALP only because its name has been mentioned – something more has to be demonstrated than that the ALP will receive, it thinks, substantially fewer funds than it otherwise would have done because of these restrictions.

It would also have to be shown that as a consequence of that, together with the additional funding it receives from the State, communications of the protected kind will be more difficult to make and, in our submission, it just does not follow from any of the material in the special case.  The most that has been shown is that funding will be affected negatively but how much of that funding that is denied will result in something not being able to be said, or being able to be said only at a less effective level, is not anything that has been demonstrated and, in our respectful submission, the Court is being invited to proceed upon the assumption that it is self‑evident that if you limit political parties receipt of income and expenditure to any significant degree then freedom of speech is affected.

In our submission, there is no logic in that line of reasoning and something more than a mere matter of impression concerning effect and certainly more than a matter of impression concerning proportionality is required to be put forward before this Act is struck down.  Indeed, in the last sentence of paragraph 7 of our outline we submit that it may be that the restrictions will make political communications more effective.  We do not know but it is not impossible to think that potentially slightly fewer funds will make for better communication by reason of the absence of the freedom of unlimited funds upon judgment.

FRENCH CJ:   What about the linkage between the definition of – the prohibition in 96D covers political donations.

MR SOFRONOFF:   Yes.

FRENCH CJ:   Political donations in 85 include gifts:

to enable the entity or person to make, direct or indirectly, a political donation or to incur electoral expenditure –

and electoral expenditure is in 87(1):

for or in connection with promoting or opposing, directly or indirectly, a party –

et cetera.  Does that not really bring in to the prohibition in 96D donations for the purposes of promoting particular parties, candidates which really would seem to lie at the heart of political communication?

MR SOFRONOFF:   Which was the provision in the 80s that your Honour directed me to?

FRENCH CJ:   Yes.  I looked at the definition of – what is prohibited by 96D is political donations.

MR SOFRONOFF:   Yes.

FRENCH CJ:   Section 85 defines political donation – particularly 85(1)(d), inter alia, by reference to:

a gift made . . . 

(i)to enable the entity or person . . . to incur electoral expenditure -

and then the term “electoral expenditure”, is defined in 87(1):

for or in connection with promoting or opposing –

et cetera. 

MR SOFRONOFF:   Yes.

FRENCH CJ:   I am just suggesting that there is textual link there which rather points one in the direction of political communication.

MR SOFRONOFF:   Your Honour, in relation to 96D, we would make the submission that the donations enjoined there are donations for State electoral matters in the same way as other references to donations in the statute have that effect.

FRENCH CJ:   We have the entanglement issue, of course.

MR SOFRONOFF:   Yes, of course, your Honour, but the second thing – really the primary thing that we would wish to submit about 96D is this.  What is prohibited is the making of political donations by other than electors, therefore, leaving out as potential donees, companies, trustees as such, unincorporated associations as such and persons who are not on the roll.  In our respectful submission, the argument cannot be sustained that the making of a donation by such persons is a form of political communication and far from it being a form of political communication in relation to relevant communications.

Secondly, if that is accepted, then while section 96D prevents political donations for any purpose, that is to say, assume I am wrong and that the expression “political donation” in 96D means a political donation to a party – excuse me, your Honours, I have been reminded that regulation 34A of the Act – I do not know if your Honours have that – provides, relevantly, the making of a political donation that is to be paid into an account kept exclusively for the purposes of Federal Government election campaigns is exempt from sections 96D, et cetera, of the Act.

HAYNE J:   But in the end, Mr Solicitor, are you advocating a different construction of the Act from New South Wales or are you advocating making a different submission about the quality of the effect of this legislation on federal political discourse from that which was advanced by New South Wales?

MR SOFRONOFF:   I am certainly doing the second, your Honour, and I suspect I am doing the first as well but ‑ ‑ ‑

HAYNE J:   There is then confronted this oddity of an intervening State advocating a different construction and different effect from the enacting State.  I do not say that is barred to you but it is at least an odd result.

MR SOFRONOFF:   Your Honour, could I confront that directly?  Leaving aside the status of an intervener for the moment, in our respectful submission, in order to determine the validity of this statute, the Court will have to construe it correctly.

HAYNE J:   Plainly.

MR SOFRONOFF: Therefore, if anybody advocates a construction which the Court accedes to, indeed, if a different construction is open and commends itself to a person entitled to appear, which could bear upon the effect of the Constitution upon the statute, indeed, one could say one is duty bound to put it. So, that we put a different construction of the Act, in our submission, is just part of our function of appearing here.

HAYNE J:   I do not want to stay to debate that ‑ ‑ ‑

MR SOFRONOFF:   No, I am sure you ‑ ‑ ‑

HAYNE J:   ‑ ‑ ‑ I remark upon it, but in paragraph 7 of your oral outline, you seek to say that 96D, for example, has at most indirect and remote effect on federal political communication.

MR SOFRONOFF:   Yes.

HAYNE J:   Does that go further than the position that you understood to be adopted by New South Wales?

MR SOFRONOFF:   I think it does, your Honour, yes, because in our submission, what has been demonstrated in this case by what is before the Court, funding will be reduced, funding is used to pay for communications.  Some of those communications, but how many one does not know, will be of a protected character.  One does not know from the material before the Court whether the limitations in the statute can possibly have any effect upon those communications.  That is why we say in paragraph 7, the effect, if it exists, is indirect and remote.  It is indirect because it affects funding not speech directly, remote for the same reason.

HAYNE J:   Now, understanding that to be your proposition, that is a proposition that stems, does it not, largely, query entirely, from the observation of capping of donations, does it not?

MR SOFRONOFF:   Which ‑ ‑ ‑

HAYNE J:   Well, why does the forbidding of donations from anyone save an elector, or how does that prohibition relate to the conclusion you assert, that the effect is indirect or remote?

MR SOFRONOFF:   Because if one accepts for the purposes of argument that the making of a donation is not speech or a communication ‑ ‑ ‑

HAYNE J:   I understand that point.

MR SOFRONOFF:   ‑ ‑ ‑ if it is then that is the end of it, possibly, but if it is not then the only effect in prohibiting some donations is to reduce the amount of funds because the people ‑ ‑ ‑

FRENCH CJ:   Available, inter alia, for electoral expenditure.

MR SOFRONOFF:   Yes, yes, that is right.

FRENCH CJ:   Which is the point I took you to.

MR SOFRONOFF:   Available, inter alia, for electoral expenditure.  Your Honours, that limitation is ameliorated greatly by the provision for third‑party campaigners because anybody can be a third‑party campaigner.

HAYNE J:   But does it not reduce the range of political discourse, and is it not avowedly intended to reduce the range of political discourse by silencing the influence of associations in influencing what parties say in the course of, let us confine it to a State election campaign.  Do we not thereby alter political discourse?  In particular, do we not thereby diminish political discourse by silencing voices?

MR SOFRONOFF:   In our submission, nobody is silenced except to the extent that it could be said that they have been silenced insofar as they wanted to buy an opportunity, but that is what the Act wants to strike at, buying the opportunity wrongly.

HAYNE J:   All the work in that proposition is done by “wrongly”.

MR SOFRONOFF:   The word “wrongly”.  I should not have used the word “wrongly” – but the reason I used that, your Honours, is this.  Could I take your Honours to Australian Capital Television v Commonwealth 177 CLR 106.

FRENCH CJ:   We will sit through to one o’clock, Mr Solicitor.

MR SOFRONOFF:   Thank you, your Honour.  At page 239, the Court was concerned there, of course, with a prohibition upon publications during a period and the question of proportionality or being reasonably adapted to an end was put, and could I invite your Honours to read the paragraph at the top of page 239 in Justice McHugh’s reasons.  Your Honours, we would submit that it is difficult to be precise in legislative drafting or to draft a statute with a very narrow and almost surgical focusing of effect but this statute does attempt to achieve the end that is described in the paragraph by the means that we have sought to explain and to do so without impinging upon the only thing relevantly that is protected and that is free speech of the protected kind. 

So, the legislature of New South Wales thinks it is best to keep companies and trustees and other business structures out of the class of donors.  Could I say something about that?  It is common, of course, in speaking about companies to speak about them as legal persons possessing all of the possible attributes of a person that an artificial entity could possess.

HAYNE J:   Not if you grew up on the Companies Act 1961, Mr Solicitor.

MR SOFRONOFF:   I was not around when Salomon’s Case was decided, your Honour, but since then ‑ ‑ ‑

HAYNE J:   I feel as though I was.

MR SOFRONOFF: In our respectful submission, in considering accounting matters, economic matters and most legal matters – commercial legal matters certainly, contract and liability for tort and so on, it is convenient to accept as a truth the legal fiction that a company is a person because the rest of the law then dovetails easily with these business structures without the need for anything more to be done. When one is considering the law in relation to human rights or the application of our Constitution in a way consonant with a discussion of human rights and freedoms then, in our submission, it is necessary to go underneath the fiction and to look at the ultimate reality of what is a company.

In our submission, a company is this, in its essence:  a group of corporators, would‑be corporators, seek to conduct an affair which might be a business or some other affair in a way that will protect them from liability except to a limited extent.  The law furnishes them with an opportunity to do that provided certain preconditions are met, registration and a constitution being involved and matters of that kind, and provided they appoint quasi‑agents, directors and other officers to conduct the business for them, then they can conduct the business with limited liability but in a corresponding way legal relationships instantly arise so that there is the so‑called shareholder and company contract.  There are fiduciary duties owed by directors and the Corporations Act, of course, imposes other legal relationships upon the parties.

But in truth what is happening is humans are conducting an affair and the people we style, directors and officers, are running a business in the same way as humans run businesses without the corporate structure.  So when one sees in 96D that a company may not donate, then what the section is saying is if you are a natural person and you wish to donate to a political party, then you may not afford yourself the use of this structure to do so.  You can do it in any other way, but you cannot use that structure, or the structure of a trustee – a trust – or the structure of an unincorporated association, but as a natural person you are perfectly at liberty to make all the donations you wish.

So when one in the course of this kind of a discourse sees a restriction upon companies, they are not people, and one has to bear in mind, in our respectful submission, that companies are not people at all in this context.  The people running them are those concerned and they are denied access to this structure by which to funnel money to political parties and candidates.  So that is, in our respectful submission, an important part

of the analysis in considering whether 96D offends against the implied freedom.  In our submission, it does not because people are free, first, to contribute themselves and, secondly, to do anything else politically that they may wish to do and, thirdly, it only relates to State elections anyway, if that matters.  Those are our submissions, your Honours.

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

MR McLEISH:   If the Court pleases. I wish to address two topics by way of our oral submissions. The first is at a level of general principle to address the implied freedom under the Commonwealth Constitution and to attempt to articulate a framework within which the Court ought to approach the questions which that issue presents. Victoria, like the Commonwealth, does not make submissions as to the actual outcome in terms of the impugned legislation in this case and I do not want to go back over questions of construction or to go beyond what is in our written submissions in relation to the way in which the freedom applies in this case, but I do want to make submissions as to the constitutional framework and the tests which the Court should be applying.

The second issue I wish to address concerns the application of sections 7A and 7B of the Constitution Act (NSW) on the assumption that there is an implied freedom under the Constitution. I should note our oral hand‑up document does refer to the Williams v Hursey issue in paragraph 8 but I do not wish to say anything further about that.

Victoria’s argument in relation to the implied freedom under the Commonwealth Constitution is a variation on the argument put by the Solicitor for New South Wales yesterday, to the effect that the implied freedom has nothing effectively to say about State electoral processes. The alternative, on our submission, to there being an area that the implied freedom does not touch is to identify the particular way in which the implied freedom operates where State electoral laws are impugned. In our written submissions we have proposed two approaches. One is based on a specific test to cover that situation, and the other looks to the way in which the Lange test should be applied in that particular context.

I want to concentrate on the first of those approaches, which is a specific test which it is submitted ought to be applied when the implied freedom of political communication is sought to be applied to a State electoral law. Of course, it is well established that the implied freedom under the Commonwealth Constitution does limit the power of the Commonwealth and the States, but it is equally well accepted that it is directed at the free and informed choice of electors to the Commonwealth Parliament only, leaving aside referendums under section 128. Since it is an implication from the Constitution it must be derived and applied having regard to the express terms of the Constitution and also, critically in this case, having regard to other implications which are drawn from other parts of the text and structure of the Constitution.

Justice McHugh made that point expressly in McGinty. I do not need the Court to go to it. It is referred to in paragraph 1 of our oral outline, 189 CLR 186 at pages 229 to 230 and 234. In the present case the other implication which we say is in play is that which underlies the Melbourne Corporation principle, namely, the fundamental premise to which the Solicitor for New South Wales has also referred of underlying the Constitution, that there continue to be State governments separately organised and, I would add, functioning as independent constitutional entities. The strength of that underlying premise was demonstrated by observations of most of the members of the Court in Street v Queensland Bar Association 168 CLR 461, and that case, of course, involved the express words of section 117 of the Constitution.

The feature of the judgments I wanted to draw the Court’s attention to is the way in which the Court read down the express words of section 117 by reference to the implication underlying the Melbourne Corporation principle which I have mentioned.  Without taking the Court to all the references can I invite the Court to go to page 512 of the judgment in Justice Brennan?  His Honour said at about point 7 of the page:

In my opinion, the guarantee of equality of treatment is qualified only by necessary implication from the Constitution itself ‑

and towards the bottom of the page he went on to say that ‑

The necessity to treat a protected person differently on the ground of out‑of‑State residence must therefore be found not in the powers vested in the institutions of government but in the existence of those institutions and in the protection of their functions.  The necessity to preserve the institutions of government and their ability to function is an unspoken premise of all constitutional interpretation.

It is submitted that much the same observation was made in the judgment of Chief Justice Mason at 491, point 9 to 492, point 5.  I do not need to take the Court to the particular passages.  Justice Deane at 528, point 4, Justice Toohey at 560, point 1 and Justice McHugh at 583, point 9 to 584, point 2.

KEANE J: Mr Solicitor, does section 107 of the Constitution have anything to do with this argument?

MR McLEISH:   It may, your Honour, insofar as it, of course, preserves the powers of the States and provides express support in that context for the Melbourne Corporation principle.  But, it certainly does not help ‑ it does not hurt this part of the argument, if I can put it that way.

It is submitted that it is clear that the Melbourne Corporation principle does protect the ability of States to make their own laws regarding the functioning of the political branches of the State, including laws bearing on the discussion of political matters relevant to the electors to State Parliament, and that those are matters central to a State’s constitutional functions.

That was expressly held in ACTV 177 CLR 106. I do not think I need to take the Court to the particular pages, but Justice Brennan upheld the challenge to laws affecting State elections on that basis at page 163 to 164. Justice McHugh did likewise at 241 to 242. Justice Dawson took the contrary view at 201 to 202 but, it is submitted, based on a different understanding of the effect of the laws. The other members of the Court did not address it, but it is submitted that it is as a matter of principle, in any event, fundamental to the constitutional functioning of the States that they – or it is within their central core of constitutional functioning that the States make laws with respect to their electoral processes.

I want to come to the Court’s decision in Muldowney.  To some extent what I am about to submit addresses the issue that your Honour Justice Kiefel raised with my friend, Mr Kirk, this morning.  We are not seeking of course to address the wider question of the relevance of the importance of the legislative object under the Lange test but it is submitted that the nature of the legislative object in the case of laws directed to the integrity of the State electoral system itself suggests a particular test which could be characterised, for reasons I will come to, as allowing a margin of legislative discretion which may not be, or is not necessarily available when it comes to the Lange test more generally.

ACTV of course concerned a Commonwealth law.  The only case which, like the present, concerned the application of the implied freedom to a State electoral law was Muldowney v South Australia (1996) 186 CLR 352. That was a challenge to a State law which proscribed the advocacy of a particular method of voting in South Australian elections. Although an implied freedom under the South Australian Constitution was conceded in that case, the Court primarily applied the Commonwealth implied freedom to uphold the law or at all events, treated the two as indistinguishable, but in particular Justice Gaudron addressed the need to reconcile the two implications which I have identified. If I can invite your Honours to go to page 376 of the judgment, at the top of the page, her Honour said:

Equally, although, perhaps, less obviously, the freedom which inheres in the Australian Constitution . . . does not operate to strike down a law which curtails freedom of communication in those limited circumstances where that curtailment is reasonably capable of being viewed as appropriate and adapted to furthering or enhancing the democratic processes of the States.  At least that is so if it does not interfere with the democratic processes of the Commonwealth.

That last sentence, it is submitted, does not state the test that her Honour was positing.  It is an exception to the test and it can be seen as referring to a law whose purpose is to interfere with the democratic processes of the Commonwealth.  The test which her Honour put forward there:

reasonably capable of being viewed as appropriate and adapted to furthering or enhancing the democratic processes of the States -

is, it is submitted, the appropriate reconciliation between the two implications in the Constitution to which I have referred.

KIEFEL J:   What does that involve?  What does the test involve?

MR McLEISH:   The test involves asking a somewhat different question as - instead of the second limb of the Lange test, your Honour, which looks at the purpose of the law and asks whether it is reasonably capable of being so viewed.

KIEFEL J:   I am sorry, what does that mean?

MR McLEISH:   It means that the question is not whether – the Court is not being asked to form its own opinion as to what is appropriate.

KIEFEL J:   It is a more objective test, is that what you are saying?

MR McLEISH:   It is allowing a greater latitude to the State in the enactment of its electoral laws.  It is not to say that the questions which the Court has heard argument on will not arise. Clearly, it is still necessary to construe the law.  It is necessary to see whether it can reasonably be viewed as appropriate and adapted, or proportionate would be an alternative way that the legislature has made a genuine attempt to further enhance the democratic processes of the States or whether for reasons that are apparent on the face of the law, or its operation, it can be said that really this is not within the class of laws which meet that description.

KIEFEL J: If the role of the Court, though, is essentially – I suppose the role of the Court is both to protect the constitutionally guaranteed freedom but also to ensure under the Constitution the implication of the States, you are saying that it ought to undertake a test which is somewhat different from that which it would undertake under its role relating to the implied freedom?

MR McLEISH:   That is right, your Honour.  In a sense there is – I hesitate to call it a clash of implications because they have to be reconciled but ‑ ‑ ‑

KIEFEL J:   Why would the test be different though?

MR McLEISH:   Because in giving effect to the requirement of free choice in Commonwealth elections, the Court also has to take cognisance of the Constitution’s requirement that the States be autonomous and have the ability to make electoral laws for their own circumstances. Now, whether or not this current law is so directed or so confined on matters on which the Court has heard argument and would, no doubt, fall to be decided under this test as well but recognising the genuineness of the attempt and it being able to be viewed as proportionate to the enhancing of the State’s democratic processes is, in our submission, enough and to go further involves taking – stepping too far into the realm of the States and their autonomous operation in relation to their electoral systems in order to – in relation to the Commonwealth system. Really, it is submitted the Court has to reconcile the requirements of the Constitution in relation to both systems.

KIEFEL J:   Are you saying that this approach is limited to State legislation which relates to its electoral processes and its electoral processes and governance, I mean, are there going to be margins of legislation?  But are you talking about this as operating in a much more confined area?

MR McLEISH:   I am talking about where the two implications meet or intersect, your Honour, which is, I could call it the Melbourne Corporation area.

HAYNE J:   That intersection depends for it is occurrence upon giving particular content to Melbourne Corporation and existential requirements for the States, in particular, electoral processes, and understanding the freedom in a particular way, that is, there is a clash only from including questions of the modes of participation in political discourse within the concept of the electoral process of a State.

MR McLEISH:   That is correct, your Honour.

HAYNE J:   Well, that itself is the step that I think needs identification and then justification.

MR McLEISH:   Your Honour, I do not want to take the Court back to the way in which the Act operates, but the Court has heard the submissions as to the way in which this is a law in relation to donations for the purpose of State elections, and that it is a law with respect to donations first and foremost, and any effect on political communication or discussion is indirect.  If those submissions are accepted then it is submitted that it is a law within the Melbourne Corporation area of operation.  If it is perceived as having a much wider operation outside the State’s electoral processes, and extending far into political discussion generally, then the Court might find that it is not within the Melbourne Corporation area.

KIEFEL J:   There are two questions inherent in the test that you propose.  One is whether or not the test you propose gives more freedom to the State legislature to burden the implied Commonwealth freedom than it does to protect the freedom, and the corollary of that is why is not the Lange test sufficient to allow the States to function in the way that they wish in terms of their electoral processes, why do you need to have a test which permits the wider margin, as you would say, or discretions, I would say?

MR McLEISH:   Your Honour, our alternative submission, which is in the written submissions, is that the Lange test does address these areas.  Our submission is that, however, because we are speaking about two implications here, that as a matter of principle the preferable approach is to identify a test which reconciles those two implications rather than starting with ‑ ‑ ‑

KIEFEL J:   But why does one reconcile it more than the other?

MR McLEISH:   One gives the court a test to apply where these implications intersect.  The other, I submit, arbitrarily selects one of the implications as the ruling implication ‑ ‑ ‑

KIEFEL J:   Yes, that might be so.

MR McLEISH:    ‑ ‑ ‑ and takes account of the other only in its application.

KIEFEL J:   So the choice might be which is your starting point for which you protect?

MR McLEISH:   Well, your Honour, we do not see an easy way in the Constitution for identifying the starting point.

KIEFEL J:   No, no.  Yes, thank you, Mr McLeish.

FRENCH CJ:   That might be a convenient moment.  The Court will adjourn until 2.15.

AT 1.00 PM LUNCHEON ADJOURNMENT

UPON RESUMING AT 2.14 PM:

FRENCH CJ:   Yes, Mr Solicitor.

MR McLEISH:   If the Court pleases.  Your Honours, first could I go back to the question your Honour Justice Hayne asked me this morning about whether or not I was drawing political discussion within the ambit of the Melbourne Corporation implication.  Just in further answer to your Honour’s question, could I invite the Court to go to the ACTV Case (1992) 177 CLR 106 at pages 163 to 164. I would invite your Honours to read the passage from 163, point 5 to 164, point 2. In that passage Justice Brennan puts political discussion relating to State elections squarely within the ambit of the Melbourne Corporation principle.  At the bottom of page 163 he says:

Among the functions of the State I would include the discussion of political matters by electors, the formation of political judgments and the casting of votes for the election of a parliament or local authority.  Laws which affect the freedom of political discussion in matters relating to the government of a State, whether by enhancement or restriction of the freedom, are laws which burden the functioning of the political branches of the government of the State with statutory constraints and restrictions.

So I rely on that, if the Court pleases.  If I could take the Court then back to Muldowney.

HAYNE J:   Just before you part from that, the central proposition you make is that the application of an implication essential for the preservation of the federal political system, application according to the Lange test may yet impinge upon the continued operation of the States and existence of the States. 

MR McLEISH:   I am sorry, I think I missed something in your Honour’s question.

HAYNE J:   Are you not saying that applying Lange, which is done in furtherance of the application of an implication in the federal Constitution that is essential to preservation of the federal political system, what, requires some additional, some different test in connection with what, a matter related directly or indirectly to State parliamentary elections?

MR McLEISH:   A matter within the sphere of State autonomy and constitutional arrangement which is protected from Commonwealth intervention by the Melbourne Corporation principle.  Underlying that is the implication that those are matters for the States.  Necessarily, that has to itself accommodate the implied freedom, but it is a two‑way process, it is submitted.

If I can take the Court back to Justice Gaudron’s judgment in Muldowney 186 CLR?  I had taken the Court to the top of page 376 where her Honour sets out the test that we submit should be adopted.  Her Honour ties that expressly to what I have called, in short, in the Melbourne Corporation implication at the bottom of page 376, “The States are constituent parts of the federation” et cetera, and over the page in the paragraph commencing, “It must be accepted” her Honour says:

the States are not merely constituent elements of the federation, but constituent elements of a federal democracy.

We do not read or rely on the next sentence.  It is not necessary for our argument but her Honour goes on to say:

And it also requires that the freedom of political discussion identified in Nationwide News and in Australian Capital Television does not operate to strike down laws which, in the sense earlier indicated, operate to further or enhance the democratic processes of the States, provided they do not interfere with the democratic processes of the Commonwealth.

CRENNAN J:   Does the “provided” carry the significant weight in relation to two implications being in conflict, as it were?

MR McLEISH:   Your Honour, it is addressing a different implication, it is submitted, but the proviso is not addressing the implied freedom, it is addressing the other side of the coin of the Melbourne Corporation principle, it is submitted.

FRENCH CJ:   But does it not subsume the implied freedom?

MR McLEISH:   No, your Honour, it really appears to be suggesting that the States cannot interfere with the Commonwealth in the same way that the Commonwealth cannot interfere with the States.  That is how I submit it needs to be read otherwise it subsumes all that has gone before.

Her Honour articulates that proviso a number of times including in the passage I first read at the top of page 376 and she does not elaborate on what she means but it is submitted that it is consistent with her judgment to see that as a reference to the symmetrical nature of the Melbourne Corporation implication.

BELL J:   The articulation of the principle includes the sentence that you omitted and which, in the context of the issues raised by this case, might be thought significant.

MR McLEISH:   It is submitted that is an additional – in my submission, her Honour is drawing two conclusions from the nature of the States is consistent with constituent elements of the federation.  The first one which I did not read out it is submitted is not necessary for this case but the second is.  Without taking the Court to it the test articulated by Justice Gaudron was also applied by Chief Justice Brennan – I will give your Honours the references at 366, point 8 to 367, point 2 and by Justice Toohey at 373, point 3. 

I submit that Justice Gummow applied a test that was not different in kind.  I say that because at 386, point 8 to 387, point 1 his Honour focused on what he described as the overriding concern of the Act and appeared to determine the case on that basis.  It is not a case in which - on that purposive basis – I will come back to the way in which Justice Gummow approached the case because there is a reference to the judgment in Levy which casts further light on it.  My submission is that three members of the Court in Muldowney applied the test for which we contend and Justice Gummow applied a very similar – took a very similar approach.

KIEFEL J:  But, Mr Solicitor, it is not a question of the Commonwealth enacting laws which have the effect that you are talking about. It is, on your approach, that the Constitution, albeit by reference to an implication, the Constitution is not to be applied in full measure. The Melbourne Corporation doctrine does not go that far, does it?

MR MCLEISH:   No, we rely on what was called the fundamental premise that underlies the Melbourne Corporation doctrine and is itself implied from the Constitution. Your Honours, granted the actual Melbourne Corporation principle is about Commonwealth power and has nothing to say in this case but the underlying premise of it is what I rely on, your Honour.  So it is submitted that the test that Justice Gaudron applied in Muldowney reconciles the two implications and also four distinctive features of State electoral laws. 

The first is the centrality of those laws to a State’s constitutional arrangements.  The second is the constitutionally protected ability of States to make a variety of electoral laws for their own systems of government.  The third is the practical difficulty of proving the actual or likely harm and the likely effect of remedial measures concerning the integrity of electoral arrangements and the fourth is the complex nature of political activities and the financing of political parties.  We have covered those matters in our written submissions so I do not want to take further time about it now.

HAYNE J:   Does it follow from your submissions that it would be open to a State Parliament to enact a ban on all reporting of political matters for the week preceding a State election?

MR McLEISH:   Yes, it does, your Honour, provided there was not at the same time a Commonwealth election.  One would extend – a week being a short period and, of course, the Commonwealth had similar provisions previously, but as the period became longer then, no doubt, that would not be the case.  Your Honour, Coleman v Power, it is true, rejected the reasonably capable of being seen as an appropriate and adapted test in relation to the Lange principle generally.  I am going to come back briefly to Coleman v Power, but the issue arose in that case partly because after Lange several members of the Court in Levy did apply the reasonably capable test.

I would just like to take your Honours to the judgment of Justices Toohey and Gummow in Levy 189 CLR 579, in particular at page 614. In the middle of the page there Justices Toohey and Gummow refer to Langer and Muldowney, distinguish those cases and say that:

There, the very curtailment of the constitutional freedom itself was supported as “reasonably capable of being viewed as appropriate and adapted to furthering the democratic process”.

Their Honours cite a number of passages in Muldowney for that proposition, and it is of note that the final passage they cite in footnote 122 is from the judgment of Justice Gummow to which I took your Honours before, and it is for that reason that it is submitted that his Honour’s judgment is consistent with that test in Muldowney.

The other references to the test in Levy are referred to in the oral outline, but it is Chief Justice Brennan at 598, point 6 to point 8. Justice Gaudron at 619 does not cite the test but does state that the test varies according to the purpose of the law in question. As I said, Coleman v Power rejected the test for which I contend as the test to be applied in relation to the Lange principle generally.

The argument in that case was essentially based – was an argument for deference, not an argument based on any different implication from the Constitution. That argument is apparent – I do not need the Court to go to it – 220 CLR 1 at pages 13 to 14 and 17 to 18, and it was held by Justices McHugh, Gummow, Hayne and Kirby that that argument had never commanded a majority of the Court at paragraphs 87, 196 and 212. However, it is submitted that that holding – address, as it was, to the Lange principle generally is not a bar to applying the Muldowney test in the manner for which we have contended.  

As I mentioned earlier, we have alternatively pointed to the ways in which it is submitted the Lange test should be applied if that is the correct test in the particular context of State electoral laws, in particular at paragraphs 29 to 35 of the written submissions. If I can then go briefly to the second issue, which was the application of section 7A and 7B of the New South Wales Constitution.

If the Court reaches the question whether there is an implied freedom of political communication under the New South Wales Constitution, as to which I make no submissions, the issue becomes whether the amending Act or the impugned provisions it enacted by infringing that freedom was required to be passed in accordance with the manner and form provisions in section 7A and 7B.

That involves two issues. The first is whether the amending Act or the impugned provisions repeal or amend the relevant provisions of the New South Wales Constitution, and the second is whether that Act or those provisions can be described as a law respecting the Constitution powers or procedures of the New South Wales Parliament within the meaning of section 6 of the Australia Act. 

The answer to the first question about amendment or repeal requires the identification of a provision that is impliedly repealed or amended, express repeal obviously not being in issue. It is a different question to that which arises under the Commonwealth Constitution because the freedom under that Constitution results from an absence of Commonwealth legislative power.

In the present case, there is only an absence of legislative power – what would result in an absence of legislative power is the manner and form provision, not the entrenched provisions themselves. So if there is something implied in the entrenched provisions, it is not a freedom in the sense of an absence of power. That freedom comes from sections 7A and

7B, not the entrenched provisions.  At best, it is submitted it might be a common law freedom or it might be an implication drawn from those provisions that affects the common law. 

So it is incumbent on the plaintiffs, it is submitted, to establish that one of the entrenched provisions has been repealed or amended and it is submitted that affecting a common law freedom that is drawn from those entrenched provisions is not necessarily the same thing as amending those provisions, which is of course what is required to trigger sections 7A and 7B.

In any event, as to the second question that arises, it is submitted on the authority of Marquet’s Case 217 CLR 545, which I do not think I need the Court to go to, that the laws in issue here are several steps removed from the description in section 6 of the Australia Act which is laws respecting the Constitution powers or procedure of the Parliament. That is because they are about the financing of political parties and their expenditure in connection with elections to the Parliament and not what was called the “nature and composition of the Parliament” in Marquet’s Case. 

The plurality in that case cites – I am sorry the “nature and composition” expression comes from paragraph 75 of Marquet’s Case.  The plurality at paragraph 77 referred to the decision in Clydesdale v Hughes with evident approval.  That was the case in which this Court held that a law removing a disqualification of a Member of Parliament from holding office was not a law altering or changing the Constitution of the Legislative Council.  The Court did say in Marquet that not every law that affects elections to the Parliament is a law respecting the Constitution powers or procedures of the Parliament.

If section 6 is not satisfied, then there is no barrier to amending the provisions that are referred to in sections 7A and 7B by ordinary legislation. That is because section 6 of the Australia Act is the only basis, it is submitted, on which a State Parliament, enjoying plenary grant of legislative power, may bind its successors as to the manner and form of passing of legislation.  We commend to the Court, in particular, the reasoning of Justice Kirby in Marquet at paragraphs 214 to 215 to that effect.  If the Court pleases.

FRENCH CJ:   Thank you, Mr Solicitor.  Solicitor‑General for Western Australia.

MR DONALDSON:   If your Honours please.  Your Honours, can I clarify, firstly, two matters arising from our written submissions?  The first of them is your Honours may have noticed that an alternative or different construction of the relevant provisions of the New South Wales legislation is referred to in our written submissions.  Your Honours, to the extent that there was any uncertainty or ambiguity in those provisions they have, in our submission, been clarified to a substantial degree by the regulation that was passed last week and we do not put any submission different to that of New South Wales in that respect.

Could I also clarify for your Honours that we will be making brief submissions in relation to the interaction between the Lange implication arising under the Commonwealth Constitution and its relevance to the States? In an odd way, your Honours, that particular issue concerns Western Australia less than the other States because this Court in Stephens, of course, determined that a direct Lange‑type implication emerges from the express terms of the Western Australian constitutional instrument and that was confirmed in McGinty. 

So, your Honours, if we could make some brief submissions, then, simply in relation to the interaction between the Commonwealth and State implications.  It is perhaps best done, your Honours, if I might direct your Honours to our written submissions.  Your Honours will see that we spent some time in those submissions dealing with what we have referred to ‑ and this is at paragraph 28, your Honours ‑ referred to as a “derivative State Freedom of Political Communication”.  Your Honours, we have set out ‑ and I will not take your Honours to the authorities which deal with this issue because we have dealt with it in some detail in our submissions ‑ we have set out there, your Honours, an extract from the judgment of Justices Mason, Toohey and Gaudron in Stephens and Justice McHugh in Theophanous.

As I have said, your Honours, for Western Australia the issue is moot in the sense that there is a direct implication from section 73 of the 1889 instrument but the reason, your Honours, that we have directed those submissions to the Court is that some of the early authorities which deal with this matter, in particular, Stephens, Muldowney and McGinty were decided prior to Lange where there was, in our submission, a reformulation of the basis of the implication of the freedom of political communication.  In our respectful submission, your Honours, following Lange some of the reasoning that might be viewed or might be seen in the earlier authorities such as Stephens and Muldowney might no longer be thought to be relevant.  In any event, your Honours, we have dealt with that in some detail in our written submissions.

The other issue, your Honours, I will address if I might, is the submission which your Honour Justice Hayne referred to as the cynical submission yesterday and it is seen also in the Commonwealth submissions in this matter at paragraph 26. That is the issue that might best be expressed this way, that because a particular substantive issue may arise or that might arise during the course of a State election campaign might also be a substantive issue that could, theoretically, arise during the course of a Commonwealth election or during the course of discourse between Commonwealth members and voters, then there is, as it were, an implication in relation to State communication drawn expressly from the terms of section 7 and 24. That, your Honours, if I might say, is obviously a very large proposition. The Solicitor for Victoria has dealt with that in some detail in his submissions, that is, that the breadth of that submission has to be understood in the context of other implications in the Constitution in relation to the constitutional position of the States.

The other way of addressing or approaching the issue of demarcation between State and federal issues in that respect is the approach which was taken by the Solicitor for New South Wales yesterday and formed the basis of Justice Kiefel’s questions a moment or two ago, and that is that the Commonwealth implication does not affect what your Honour referred to as the electoral processes of the State as opposed to substantive political matters which may overlap between the State and federal.  It might be thought, your Honours, that that reintroduces a distinction between substance and procedure but that would certainly be one way with refinement in future cases in which the two matters might be reconciled.

Can I go, then, your Honours, to make one short submission in relation to section 96D?  Your Honours, in our submission, 96D really raises a question of the first limb of Lange and it goes back, with respect, to the question that Justice Bell asked yesterday.  All that 96D prohibits as far as communication is concerned, relevantly, is receipt by a voter of a fact, a single fact, being that a non‑voter has made a donation.  That is all that 96D relevantly precludes for these purposes.

Because that particular fact, that is, that X company has made a donation can be construed or understood in any number of ways and as your Honour – I think it was Justice Crennan – observed this morning, that often corporations, for instance, donate to a number of political parties.  Non‑voters can donate for all sorts of reasons that are not ‑ ‑ ‑

FRENCH CJ:   This is put as an answer to the direct burden argument, is it?

MR DONALDSON:   Yes, the first limb, your Honour.

FRENCH CJ:   But the proposition that – by direct burden I mean the proposition that a political donation is itself a species of political communication.

MR DONALDSON:   I am sorry.  Of course, your Honour, yes.  Our point, your Honour, is simply that if one looks at what is actually being communicated it is nothing, relevantly, for these purposes.  And, of course, the position would be different if there were sought to be a ban on voters but that, of course, is not the position here.  All that is relevant here is to the receipt by voters of that one single fact.  So, in our submission, your Honour, it does not get past the first limb.

Your Honours will see in our outline of written submissions that there is a bullet point at the end, “Second”.  That is a contention, your Honour, which has been disavowed by New South Wales in this matter, that is, that the contention that 96D would result in less money being available to political parties to use for political advertising is an assumption which has been made.  New South Wales has accepted, your Honours, that that would be fact and so the matter proceeds on that basis.  Of course, different facts in the future may give rise to different submissions.  If your Honours please.

FRENCH CJ:   Thank you, Mr Solicitor.  Yes, Mr Walker.

MR WALKER:   May it please your Honours.  In relation to the submissions for New South Wales may I simply point out I think at one stage my friend, Mr Kirk, suggested that the affiliation fees were not such a concern in terms of amounts because of their limitation to $2,000.  That, of course, depends upon the system of affiliation that is operating because it is a limit of $2,000 per capita under section 95D(3)(b)(ii) in a case which happens to be, not surprisingly, what one finds in the Rules of the ALP in volume 2 of the special case book, page 468, rule A.42.  That is rather more than $2,000.

Next, in relation to the indifferent treatment at one level between parties and, relevantly for this purpose, third‑party campaigners, it is to be noted that third‑party campaigners cannot benefit from the public funding which can be made available to registered parties, but third‑party campaigners are equally deprived, or indifferently deprived, along with others, of being able to obtain funds under section 96D(1).  While on the question of third‑party campaigners, there is another side to that coin.  No answer really was given to the point that has been made that there is an aggregation, in effect, being practiced in relation to affiliates and parties for which there is no functional equivalent in relation to third‑party campaigners.

It was suggested by Mr Kirk that that is because there is no real difficulty in ascertaining what might be called “a unity” ‑ my word, not his ‑ between affiliates and a party, whereas the same would not be true of third‑party campaigners.  That last proposition is a bit difficult to maintain given that by definition third‑party campaigners have that character because they engage in a way which permits one to know whether they are supporting or opposing candidacies for election.  One sees that from section 87(1).  One notes also that there are controls in relation to third‑party campaigners that I think were drawn to your Honours’ attention in section 96AA that I need not go to in any further detail now.

It was said that there had been a deficiency in the identification of alternatives appropriate for the purpose of addressing whether or not these laws were reasonably appropriate and adapted.  At the risk of repetition, in our submission, one does not find in the defendant’s argument, or in the arguments of those supporting them, to the extent that they went into this question of the outcome, any explanation as to why a disclosure approach is not both obvious and more effective in terms of dealing with the problem of hidden influence and probably the problem of undue influence and very likely the problem of corrupt influence.  If disclosure were to extend, as we have proposed, to disclosure of access after the donation in the period when, on the State’s argument, the gratitude is being felt, the debt is being called in, the favours are sought, then one would have thought, in terms of efficacy, that is both very much more obvious than the device which has been adopted and likely to be very much more effective.

Of course, an understanding of the likely efficacy of preventing there being dealings by those in elected authority, called the Ministers, with people that are thought to have particular axes to grind, led in one of the previous iterations of amendment to this statute to the concept of prohibited donors which was referred to under Part 6, Division 4A.  Now, they are real estate developers, those who deal in tobacco, liquor and gambling.  It is met by simply prohibiting anything from them altogether, peculiarly or particularly, at least according to perception, disfavoured donors or at least, disfavoured as persons who can become later known as both the source of donation and the object of benefits from government. 

Now, one thing seems quite certain, subject to the argument about this being a step on a path to which I will come, one thing seems certain from the face of the statute, that donation in itself is not seen as an evil, not in the present statute, and indeed, not in any of the jurisdictions, both in Australia and elsewhere, but provide any of the comparative legislative action or juristic consideration of this problem.  Donation itself, supplying the sinews of political battle, in terms of persuading fellow voters, or voters, as to how they should cast the vote, that is simply not seen as a bad thing and neither can it be seriously proposed that it is to protect and enhance the democratic processes of the State, to borrow an important phrase, to have a law which turns its face against raising funds from those politically interested and turning it to taking the money from consolidated revenue, according to the fiat of Parliament from time to time, controlled as Parliament will be from time to time, by partisan forces, votes after all, being for a representative chamber where there are again votes to be had, votes between rivals.

This cadre of State funded parties, which would be the ultimate outcome of the path to which this is apparently to be seen proleptically as a step is, in our submission, a startling one if you compare it to the yardsticks which utterances in this Court to which copious reference have been made today suggest is the appropriate one.  No one has suggested any materials, let alone any in the special case book, that could possibly suggest that it is the exclusivity of public funding, statutorily manipulated support of political parties, always in all the forms that your Honours will be able to find, in arrears - you get the money after the event of expenditure in electoral success – no one has explained why that would be a protection or enhancement of democratic process. 

In relation to the prohibited donors, your Honours will have noticed the extremely curious provisions of section 96GAB which might be regarded as an anti‑double jeopardy provision.  But it is telling because, as the Act was brought to its present form with the provisions that we impugned, the provisions about prohibited donors were left, in effect, the legislative judgment that some donors were, by reason of their activities, all of them it may be said, self‑evidently directed to the earning of profit by business enterprise, that was left on the face of the statute.  Special effort was made to prevent one from being punished more than once, if you breach not only that, but also what is now the general prohibition of a donation.

That, in our submission, is a very sensible concrete demonstration, on the face of the statute, that there is a capacity to identify what might be called “tainted source” – a capacity which rather suggests there is nothing appropriate or adapted about the indifferent prohibition of donation, regardless of source, except for enrolled voters.

The argument was put, in effect – and I hope I do not misrepresent it – that there should be no concern about another aspect of the indifferent treatment of the prohibition on donation which swept up not only that which was supposed to be the large corporation and its supposedly deleterious effect on the democratic process but also what I will call, sentimentally no doubt, the widow’s mite.  The $20 was used in my friend’s argument. 

It does, with respect, depreciate the importance of participatory democracy and a representative Parliament not to appreciate, as popular discussion seems to suggest has been appreciated in the United States’ last two presidential campaigns, that the enlistment of those who vote, and those who have contact with those who vote, in a widespread program promoting small gifts – by corporate standards, tiny gifts, but in such numbers as to indicate an obvious relation to what the electoral contest is about.  The poor man’s vote is worth as much as a rich man’s vote when it comes to the ballot box. 

So, in our submission, to put to one side – I think the expression was actually used as “de minimis” – the prohibition on small donations by these, in different provisions is, in our submission, to ignore a very important aspect of what is appropriately called participatory democracy, the communication by the enthusiasm which is evinced by public displays of support by giving what one can.

Our argument was criticised because it employed the language of discrimination.  We do not shrink from it but, of course, we were not putting together as some freestanding doctrinal objection to such laws that they were unfair, that is, that they discriminated without justification as being in itself a self‑explanatory and complete demonstration of constitutional infirmity.  We do not put it that way at all.  On the other hand, in a determination of what is reasonably appropriate and adapted, insensible, that is, unjustified discrimination including the sweeping up of disparate categories not all of which could be seen to have any explicable relation to the perceived mischief, that is a form of discrimination which, in our submission, informs what is the appropriate inquiry about constitutional infirmity, and that is the sense in which we defend our resort to those concepts.

It was said that another of the justifications upon which the State depended was that these are provisions which recognise as a mischief appropriately addressed by their terms what might be regarded as the making of donations by corporations ‑ by implication, one should understand that that included registered industrial organisations such as my clients as well – contrary to the will of the members.  Now, of course, there is a lot contained within that proposition which, in our submission, needs attention before any weight is given to that proposition.  I showed you yesterday in the rules of the AMWU, for example, the elaborate provision for exemptions as matters of what might be called political opinion.  That is the first thing.

The second thing is commercial corporations, trading corporations and also unions have rules and objects which by one means or another, in both cases reinforced by statute in this regard and ultimately involving the judicial power, for the enforcement of that bargain.  It need hardly be said that in a commercial company the bargain is not that the board of directors will in no case spend the company’s money contrary to the will of a particular shareholder.  How absurd.  The bargain is the management of the corporation is given to the board and by analogy – not perfect, but for present purposes complete – the same bargain for voluntary membership of a trade union can be seen in the distribution of powers between general bodies and management bodies.

So this idea of a donation being made contrary to the will of the members, first of all, if it conjures up a coterie acting contrary to the majority of the members, that is a fantastic possibility for which there is no support in the special case book and for which there are already remedies.  Second, one does not test by reference to imagined abuse the possibilities to which the law is addressed.  Finally, of course, as your Honours will see in our written submissions, paragraph 55, item a, this is a problem that American judges have already considered and rejected as a possible justification for reasons which, with appropriate caution, in our submission, provide principal support to our argument here.

However, it does excite this possibility which leads into the next part of the State’s submissions to which I wish to reply ‑ a bit late for a shareholder in a commercial corporation after reading about a payment determined on by the board of directors.  He can sell his share afterwards, but there could be nothing done about it at the time, but a union can ‑ and your Honours can probably take into account it has been reported that they have in history threatened disaffiliation if dissatisfied with intended proposals by a party, and low and behold, that is exactly what the State’s argument proposes as a practical effect that is a State argued outcome for this law, disaffiliation, disaffiliation encouraged by the fact that by that means there will not be the aggregation about which we complain.

Now, in our submission, what is entitled then in this case to pose as a particular question, a sub‑question perhaps, is a law, the practical effect of which is seen by the enacting polity to encompass encouragement to disaffiliation of organisations with a party, is that in itself seen as something reasonably appropriate and adapted to protect and enhance democratic processes in the State without ‑ ‑ ‑

HAYNE J:   Well, that proposition invites attention to the matter I put to Mr Kirk.  You will recall that I identified to him the two objects which I understood him to assert about 96D and to say of each of those objects that it is or is directed towards an end identified as legitimate by reference to the avoidance of a disfavoured form of influence over governmental decision‑making.

MR WALKER:   Yes, your Honour.

HAYNE J:   We are concerned here with, on one view of things, laws regulating, matters associated with election of government, are we not?

MR WALKER:   Yes.

HAYNE J:   The end which I put to Mr Kirk is an end concerning the government which the electoral process yields.  It occurs to me that it may be a premise of the argument against you that confinement of the kinds of donor to parties to those who are electors assumes two things, not just one.  It assumes first that only electors have a stake in the electoral process.  It may also, however, I do not know, assume that only electors have a stake in the government which that process yields and that a party, I am not sure which it is, does not, should not, cannot, I am not sure which of those, represent, advocate, yield to, take account of again, and I do not know which, interests other than those espoused by individual electors.

MR WALKER:   Yes, now, your Honours, I do not remember when I put this yesterday but I did yesterday raise a matter which was an attempt to address that aspect of the matter that Justice Hayne has, with respect, identified as immediately raised by way of ramification from the justification of limiting donations to enrolled voters.  This is really only by way of elaboration of the propositions that Justice Hayne has just summarised.  It does not add anything but an extra point in our position is made by noting that, of course, it is not the exercise of Executive Government which flows from the election of a representative chamber or two, it is also the making of laws. 

The laws are made in such a way and with the expectation that in all but the most rare cases they apply to those within the jurisdiction and outside the jurisdiction with sufficient nexus.  They apply to artificial persons and the activities of artificial persons in very many cases.  Indeed, it is rare that in terms, for example, of business conduct that one would suppose that natural persons are singled out for regulation not applicable to corporations, although the converse is, of course, quite common. 

For those reasons, in our submission, the notion that in the contest for votes to be translated representatively into the contest for government, that is, for commission as Ministers, that there is something intrinsically less pressing, less important, less cogent about the opinions of a corporation - and I do not shrink from using that expression, I will come back to it - than the opinions of my 22‑year old son is, in our submission, sufficient to state it, to reject it - no disrespect to him. 

Your Honours, we can use, without just being lawyers, the expression “opinions of corporations” precisely for the reasons that have been put against us today, this morning.  Corporations are at base and ultimately, even if you have to dig a fair few layers, they are people.  They may not all be Australians, that is not the point, but they are people, and it is legitimate to say that when one sees one of those full‑paged ads with the huge coal scoop bucket in the background it is legitimate to say that there is a real opinion being promoted and it is an opinion which is fairly and factually attributed to a corporation because of the processes of corporate organisation, constitution administration and decision‑making which has the full‑paged ad purchased from corporate funds.

But it reflects as well, if only by default and assumed expectation, it reflects the collective will of the shareholders, including those who would have voted against it if consulted.  They have put their money in and that is how it has been reflected, according to those processes, which they have agreed to be bound by.

CRENNAN J:   That idea of electors having a stake in government really, I think, has its origins way back in the debates over the suffrage before there was universal suffrage – remember Thomas Paine, “No taxation without representation”, all that form of discourse.

MR WALKER:   And in particular, plural votes as well.

CRENNAN J:   Plural votes - I was just going to make – that is right.  A simple point, I think, in the current context is that the governed, as a group in a polity, is not confined to qualified electors.

MR WALKER:   Absolutely, quite so.  That is a point that, in our submission, it is not taken account of to any degree in the repeated, as if axiomatic proposition that there is nothing wrong and everything justifiable about restricting the source of donations not by reference to identified prohibited donors that they have already done, have kept on the books in some curious way, but also simply by reference to anybody who is not an enrolled voter and that is our response to those parts of the argument against us.

FRENCH CJ:   What does the concept of an unincorporated association encompass in the definition of entity?

MR WALKER:   A club.

FRENCH CJ:   Is this just any collection of people who come together for a common cause ‑ ‑ ‑

MR WALKER:   Yes.

FRENCH CJ:   Or do they have to have a constitution and rules or ‑ ‑ ‑

MR WALKER:   No, a club.

HAYNE J:   Just answer in one or two sentences the whole of the law about unincorporated associations, Mr Walker.

FRENCH CJ:   Give us your widest definition.

MR WALKER:   I was hoping that might come up in another case, your Honour, but, no, it is – no, it is not just any gathering of people on a footpath.

FRENCH CJ:   In this statutory setting.

MR WALKER:   No, I used the word “club” advisedly, with respect.  Do they have to have a written constitution?  No.  Will Australians who have a club have a written constitution?  Yes, including disputes about how to amend it, but, your Honours, there is no formality.

FRENCH CJ:   So it would include a book club?

MR WALKER:   There is no formality and that is - the breadth of this prohibition is that it selects people from the liquor selling casino at one end with real estate ambitions at one end to the bush regeneration group who are very anxious that a particular environmental standard be or not be in legislation.

HAYNE J:   But, to build on the point which Justice Crennan was putting to you, the governed being more than the electors.

MR WALKER:   Yes.

HAYNE J:   The governed include all forms of permitted associations which ‑ ‑ ‑

MR WALKER:   Yes, yes.

HAYNE J:   ‑ ‑ ‑ in this society include formally permitted forms of association, corporations, registered bodies ‑ ‑ ‑

MR WALKER:   Highly regulated forms.

HAYNE J:   Or, in this society, very loosely established bonds.

MR WALKER:   I think it is still legal in New South Wales to associate without prior government permission, your Honour, yes.

HAYNE J:   A very large proposition.

MR WALKER:   For some purposes.

HAYNE J:   A very large proposition, Mr Walker.

MR WALKER:   Yes, your Honour.  But, yes, and it is the whole gamut.  Our objection is to the whole gamut that this wears, on its face, no attempt to be appropriate and adapted.  That assonantal phrase, with respect, is not to be seen as a solidary notion.  It has emphasis from each element in it.  The broader, the less discriminating in another sense of that word – a good one – the more indifferent the means by which a prohibition on what is not a, per se, bad thing – that is, donation to a political party or to a third‑party campaigner – the more indifferent it is, the less likely it could ever be seen as reasonably appropriate and adapted to a legitimate end.

Your Honours, there was, in the Commonwealth’s submission, a comment to the effect that the notorious cases – I do not know whether they exist any more – of corporations drawing to attention that they have donated to opposing political parties, not always in equal sums, but, nonetheless, comment made that that was enough to put paid to the idea of donation being communication because of ambiguity.  But, regrettably, it is the human condition that you can speak and be ambiguous.  You can engage in conduct and it be ambiguous but the speech and the conduct is still communication.

Indeed, you might bewilder your audience as to whether you are or are not trying to persuade them to vote for a particular candidate or not.  You may, in fact, be to half your audience, demonstrating why they should not – either by your identity, your history or by what you say or how you say it.  So the fact that the message is sent out at risk of being either misunderstood or not understand at all is just not to the point about it being a communication, and the second thing, of course, is it is not, unfortunately perhaps, the case that most, or anywhere near most, donations to political parties are from those business enterprises so altruistically or self‑interestedly concerned with a stable political condition that they give to both sides, so that financial support including by people announcing their support in particular ways, including by statutory revelation, in our submission, will nearly always amount to the obvious communication, I/we/our union support this party and not another party.

Your Honours, reference was made in the Commonwealth submission to what might be called an earlier but still resonant attempt in this Court, Justice Dawson in Levy, to capture by words the kind of value judgment called for from the Court when the limits on legislative power of a kind that we contend for are in question, and the phrase no doubt to be taken from a now outmoded section 92 approach of reasonable regulation and then with the evocative phrase “in the interests of an ordered society” is one which, in our submission, has obvious cousinhood with provisions that one will find ‑ I do not mean derogation provisions, but provisions of that kind that you will find in many international instruments to do with human rights; the Canadian Charter is another obvious and explicit example.

That unquestionably explicitly announces the fact that there will be a value judgment to be made by the Court and we, with great respect, say of that, and so much the better that it be by the Court.  In our submission, whether one is talking about reasonably appropriate and adapted for the advancement or realisation or achievement of a legitimate end that has been identified, or whether one talks about reasonable regulation of interests of an ordered society, here particularly from the point of view of electoral matters and the democratic process of free choice, in our submission the laws we impugn in this case simply go nowhere near satisfying those requirements.

An ordered society does not mean a regimented society.  An ordered society does not mean a society subject to rules.  It has to be ordered for a particular purpose and in a particular way and here it is about the electorally required, that is, the requirement coming from the constitutional reference at both levels to elections and the need for society to be ordered so as to permit the electors’ choice to be of a certain kind, called conveniently, if succinctly, free, that involving the corollary of information and discussion and that involving of course, because it is a mass exercise - we all vote more or less at the same time but certainly for the same Parliament – that requires communication.  It is in that sense, in our submission, that whichever the phrase be used these laws simply come nowhere near it.

In Queensland’s submissions, apropros the reading of the New South Wales statute so as, if I may put it this way, distributively to limit everything including political donations to those things that are in relation to State elections – section 83 – may we simply – and in many cases of course that is explicitly done.  Elsewhere my friend said that that has to happen anyhow and, in any event, it is a saver in terms of preventing any engagement of the Commonwealth implication.  I do not want to repeat what I said in‑chief, but can I add these two observations from the statute?

It is really quite difficult to see how the statute can be read as intended to or in fact achieving such a distributive restriction to State elections when one comes to the subsection 85(3) party subscriptions.  It is very difficult to think in terms of an annual membership or an affiliation fee for a party that stands candidates locally, State and Commonwealth, as the occasion requires.  It is really difficult to see how or why one would even attempt to contemplate a distributive allocation.

FRENCH CJ:   Well, do you say 83 actually has a substantive operation or is it declaratory?  I mean are you ‑ ‑ ‑

MR WALKER:   It is, if I may use a different epithet, it is an attempt not entirely felicitous, to describe the scope of what follows in Part 6.  Now, we know that some such description is done in this Act to signify when it is State and when it is local or when it is State and local.  Elsewhere in the part, of course, there are explicit provisions about State elections.  Now, I want to come to one of those which is a bit odd, particularly bearing in mind what was argued against us. 

If one comes to section 96, this is part of the provisions that a number of my learned friends have referred to, the rather complex means by which through agency, through registration and through particular accounts the money that may be expended electorally is controlled.  But in section 96(7), you will see that out of the State campaign account, out of the State campaign account, there may be paid matters beyond electoral expenditure referred to in subsection (3) which is electoral expenditure for a State election campaign. 

So if there is something left over, according to these provisions, you can spend it on federal campaign or perhaps on something which applies in entangled fashion across the political bounds of Commonwealth and State, might be called a national issue.  Now, there is that difficulty with Queensland’s argument, then there is another oddity, paragraph 96(6)(a).  Part of this scheme for control of money in and money out is what cannot go into the State campaign account, remembering, of course, that State election expenditure must come out of such an account.

So for it to be spent for a State election it must be in that account and now one looks at what cannot go into that account.  You cannot put in a party subscription.  So the notion that 96D is somehow marrying up the electors and the State election is sort of exploded by that provision.  I am not sure I can entirely understand the rationale – explain the rationale of all of that to your Honours but it certainly puts paid to the notion of a comprehensive, easy to follow, distributive reading confined to State elections of all these provisions.

Queensland’s submission in relation to what was not prevented by the laws that we attack took, we respectfully submit, no account whatever that is treated as being of no importance, the associational and communicative aspect of the collective action of persons combining their donations, including their trade union’s donations, into the force of what might be called a message of support with money.  No account was taken of that in that part of Queensland’s argument.

In relation to Victoria’s argument, and in particular the question that Justice Keane asked, I do not suggest that the relation between sections 106 and 107 of the Constitution can be conveniently and compendiously described in brief, but this present context is one where you would certainly start by looking at section 106 with its “subject to this Constitution” phrase of such great import, which after all, is the means by which the Lange implication, if you will forgive the shorthand, is not merely a limitation on the legislative power of the Commonwealth but is also a limitation on the legislative power of the States, and, if it matters, the Territories.

The phase was used by my learned friend, the Solicitor for Victoria, as it were, warning about what we suppose to be consequences understood of our argument about the Court stepping too far into the realm of States, and for the reasons I have just put about 106 there is no distance or extra territory to be covered or anything unusual about the foray. This is a case which raises the most familiar form of federal constitutional question, namely whether, by reason of the Constitution, there are limitations which have been transgressed of legislative power, in this case of a State. There is no realm of a State into which this Court may not go in order to check for compliance with the supreme law.

Your Honours, reference was made – and, perhaps if I may put it this way respectfully, questions raised in particular, but not only, a propos the earlier formulation by Justice Gaudron in Muldowney 186 CLR 376 to 377 – I will not be going to it – and in the related argument by my learned friend, the Solicitor for Victoria, reference was made to the intersection and requisite reconciliation of tests with respect to the two implications. I do apologise if I have misunderstood. I think those two implications are what can be tagged Melbourne Corporation on the one hand and on the other hand Lange. 

In our submission, there is nothing applicable in this case, or useful to resolve if ever it be useful to resolve, in relation to Melbourne Corporation arising on the issues of this case.  There simply is no putatively exorbitant attempt by the Commonwealth through legislation to control or affect some – I will call it – peculiarly governmental aspect, and elections would surely be one of them, of a State, but that is not this case and so we do not get to the intersection in this case at all. 

Another possibility and, again, I apologise if I have misunderstood, is that, as it were, Baccarat‑style there was an attempt to explore what went by assumption in Muldowney – explicit assumption in Muldowney – namely, whether there was a difference in what I might call the potency of the implied need for immunity of political communication – again summarise it by calling it a freedom – as between that which comes from State constitutions in this country and that which comes from the Commonwealth Constitution. The first comment is an obvious one – namely, that makes a rather large assumption that the two spheres do not collide. I have used elsewhere the metaphor of entanglement and that, in our submission, is a first and rather important warning against proposing tests which have any substantive difference.

The second point we make is that there is no reason from the text of the respective Constitutions that there would be any difference because in all cases it is the reference to elections and grammatical cognates of that word or chosen, which after all is just the Anglo‑Saxon for that Latin.  So, in our submission, there is a second and substantive reason based in text for exactly the same approach to be taken.

FRENCH CJ: If you were to fail on the implied freedom based on the Commonwealth Constitution on grounds other than the entanglement question, could you succeed on the implied freedom derived from the State Constitution?

MR WALKER:   Yes, that is, arguments of the same kind as would have informed the Commonwealth would certainly in relation to the State apply and it would depend, obviously, on the grounds upon which one failed at the Commonwealth level. 

FRENCH CJ:   All right.  I am putting to you, let us suppose you failed on the basis of entanglement, in other words, the statute successfully quarantined all these prohibitions to State elections.

MR WALKER:   I am so sorry.  We suffer an identical fate on appropriate and adapted for the reasons I have been putting.  Yes, that, in principle, for the reasons I have just put must be so.  To put it another way, there is not going to be a different appropriateness and adaption calculus because the importance to the respective polities of free elections is if importance matters clearly the same.  I hope that answers what your Honour was asking.

In relation to the reference made by my friend, the Solicitor for Victoria, in ACTV 177 CLR at 163 to 164, it is, in our submission, critical to note that there is here, in this case that is, unlike the case towards which Justice Brennan was directing his comments in that passage, there is no question here at all of any Commonwealth legislation or the Commonwealth implication, if I can call it that, having any baleful effect on the State regulating State elections. Almost by definition the substance of the implication is such that that could not fall out.

As to the, with respect, significant matter of stare decisis in this area raised by my learned friend, the Solicitor for Victoria, apropos Coleman v Power, I will not go to all the references my learned friend has given, 220 CLR 1, we submit in reply that whether it be, as it probably is not, a reasonably capable test or whether it simply be reasonably appropriate and adapted with the appropriate explanations of that, in this case no different outcome is suggested, bearing in mind the nature of the legal and practical effect of both of the laws in question.

To put it another way, this is not a case where a greater level of judicial deference to State governmental legislative choice would appear to make the difference. 

In relation to Western Australia’s submissions, the comment was made that, in defence one supposes, of the approach to lawmaking by New South Wales in this case, that it perhaps would be different, said WA, if voters, that is, enrolled voters, electors, were prohibited from donating, and that brings us back to an important part of New South Wales’ submission.

First, nothing appears from the reasoning in the arguments against us as to why it would be different for voters to be prevented from donating because one assumes that caps applying indifferently, and no one complaining about caps, one assumes the same nefarious gratitude or illicit debt would be generated from voters’ money, that is, once you go down the path of saying there must not be money in politics, an extraordinary path bearing in mind that media magnates do not line up to donate airtime or paper space, or printers volunteer their work and materials, once one goes down that odd path, then by definition – by definition – to discriminate between source otherwise than by the means shown in the prohibited donors approach is, in our submission, incapable of being appropriate and adapted, let alone to be seen as such as would protect or enhance democratic process.

To prevent voters from providing impetus to the collectives, be they parties or third‑party campaigners, who are prepared to set aside the time and devote the professional attention to attract votes so as to obtain support on the floor of the popular house so as to obtain commissions from the Governor so as to start governing in accordance with policies that the individual voters collectively want, that, in our submission, cuts at the very heart of communication and association for the purposes of democratic processes.

That is why – my last submission in reply – the notion of this being an appropriate law because it is a step down the path of having no donations at all is, in our submission, something which demonstrates the severance of these laws from that no doubt large and various class of different ways including experimental methods by which a State Parliament may seek to attack the evils that have been identified as the object of this legislation.  May it please the Court.

FRENCH CJ:   Mr Walker, before you sit down, questions 2 and 5 in the special case at 78 of the special case book, refer to 95F and 95I, which I think reflects the declaratory relief you sought in your writ.

MR WALKER:   Yes, your Honour.

FRENCH CJ:   I presume references to those two provisions should be excised.

MR WALKER:   That is right.

HAYNE J:   Yes, I think in your written submissions you suggested that orders would be made in the form of declaration.  We have got to answer questions.

MR WALKER:   No.  Quite so, your Honour.  I am sorry ‑ ‑ ‑

FRENCH CJ:   I presume that there is no objection to that excision.

HAYNE J:   Do you propose, Mr Walker, to submit a set of proposed answers?

MR WALKER:   I am in the Court’s hands.  It perhaps would be in order for us to do so.

CRENNAN J:   New South Wales has done so.

MR WALKER:   Yes.

FRENCH CJ:   It would be helpful, Mr Walker.

MR WALKER:   Yes.

FRENCH CJ:   All right, thank you.  The Court will reserve its decision.

AT 3.38 PM THE MATTER WAS ADJOURNED