Unions NSW and Ors v State of New South Wales

[2013] HCATrans 263

[2013] HCATrans 263

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
GAGELER J
KEANE J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON TUESDAY, 5 NOVEMBER 2013, AT 10.15 AM

Copyright in the High Court of Australia

____________________

MR B.W. WALKER, SC:   May it please the Court, I appear with my learned friend, MR N.J. OWENS, for the plaintiffs.  (instructed by Holding Redlich Lawyers)

MR M.G. SEXTON, SC, Solicitor-General for the State of New South Wales:   If the Court pleases, I appear with my learned friends, MR J.K. KIRK, SC and MS A.M. MITCHELMORE, for the defendant.  (instructed by Crown Solicitor (NSW))

MR N.J. WILLIAMS, SC:   May it please the Court, I appear with MR C.L. LENEHAN, for the Attorney-General of the Commonwealth intervening.  (instructed by Australian Government Solicitor)

MR W. SOFRONOFF, QC, Solicitor-General for the State of Queensland:   May it please the Court, I appear with my learned friend, MR G.J.D. DEL VILLAR, for the Attorney-General for Queensland intervening.  (instructed by Crown Law (Qld))

MR S.G.E. McLEISH, SC, Solicitor-General for the State of Victoria:   May it please the Court, I appear with my learned friend, MR A.D. POUND, for the Attorney-General for Victoria intervening.  (instructed by Victorian Government Solicitor)

MR G.R. DONALDSON, SC, Solicitor-General for the State of Western Australia:   May it please the Court, I appear with my learned friend, MR C.S. BYDDER, for the Attorney-General of Western Australia intervening.  (instructed by State Solicitor (WA))

FRENCH CJ:   Yes, Mr Walker.

MR WALKER:   My friend Mr Williams, I think, needs to raise something.

FRENCH CJ:   I am sorry, yes.

MR WILLIAMS:   In the last two or three minutes, it has been brought to my attention that a member of the Court in a previous capacity has given advice that touched on the validity of section 96D of the New South Wales Act. Its precise terms are not at present available to me, and it was not an advice, I believe, over a Justice’s signature but was nevertheless authored by that Justice. I am endeavouring to obtain a copy of it, but I need to draw that to the Court’s attention at the outset. I have drawn it to the attention of the parties in the last couple of minutes.

FRENCH CJ:   We might adjourn briefly while the parties discuss the matter.

MR WILLIAMS:   May it please the Court.

AT 10.17 AM ADJOURNMENT

UPON RESUMING AT 11.34 AM:

MR WILLIAMS:   Your Honours, in clarification of my earlier observation the document was a signed advice.  The Commonwealth has no application to make.

FRENCH CJ:   Mr Williams.  Justice Gageler.

GAGELER J:   In my former capacity as Solicitor‑General of the Commonwealth I provided signed legal advice to the Attorney‑General of the Commonwealth in response to a request for advice which touched on the validity of provisions of the Election Funding, Expenditure and Disclosures Act (NSW), the validity of which is now challenged in these proceedings. The confidential nature of the contents of that legal advice, as well as of the fact of having given it, prevented me until now from being able publicly to disclose either the fact or the contents. The statement made from the Bar table this morning by counsel for the Attorney‑General of the Commonwealth allows me to disclose the fact of having given the advice but not the contents of the advice.

Before today I had given very careful consideration to whether the provision of the legal advice gave rise to a ground on which I ought to disqualify myself from the hearing of these proceedings.  Having regard to the fact and the contents of the advice and having regard to the principles stated in Ebner v Official Trustee (2000) 205 CLR 337 at paragraphs 6 to 8, I was not previously satisfied that a ground of disqualification existed. In the absence of such a ground, I regarded it as my duty to sit as a member of the Court at the hearing of this special case. Having regard, however, to the limited nature of the disclosure that has occurred this morning, that is, in particular, to the disclosure of the fact of having given the advice but not the contents of the advice, I feel obliged, having regard to those same principles and so as to dispel any apprehension of bias on my part, to recuse myself from the hearing. In the circumstances, that is the course I propose to take.

FRENCH CJ:   The Court will adjourn briefly to reconstitute.

AT 11.38 AM SHORT ADJOURNMENT

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

UPON RESUMING AT 11.44 AM

FRENCH CJ:   Yes, Mr Walker.

MR WALKER:   May it please the Court. Your Honours, may I take you directly to the first of the two parts of the argument that you see divided into the two parts in our outline of oral submissions, the first part being paragraphs 1 to 12, and the second paragraphs 13 and following. That course requires going directly to section 96D of the Election Funding, Expenditure and Disclosures Act 1981, relevantly in the areas that our argument covers a much amended statute leaving what might be regarded as more obvious scars of the changes than one sees often in enacted text. Can we come first to critical terms that are introduced by the words of section 96D(1), that which is rendered unlawful and in certain circumstances to which I will come, an offence is for a political donation to be accepted.

The passive voice notwithstanding it is clear that those who would commit the unlawfulness will be those to whom the donation is made, those in the phrase starting with the preposition “to”, namely “a party” and “elected member” means of the State Parliament, a “group, candidate or third‑party campaigner”, they being terms of art to which I will come as they are relevant. 

So acceptance of what is called a political donation, an important concept which is defined in a manner I am about to come to, acceptance is rendered unlawful unless, so the negative case removing the unlawfulness follows, “unless the donor is an individual”, which equates for all purposes to a natural person, “who is enrolled on” one of the three named rolls.  Immediately, in relation to natural persons whose contribution to political discourse including participation in various forms of communication involved in political discourse arise as not falling within that exception, thus, people who have not yet attained the age to vote, thus, people who are not entitled to vote because of citizenship but have, for example, permanent residency and are not British or came after a quite remote date.

There are many people part of the Australian community who will not be included, and very obviously so, notwithstanding they are natural persons participating in political discourse by reference to that phrasing.  Could I take your Honours first please, by way of definition – this has to be a somewhat piecemeal exercise given the style of drafting – to section 83?  This is a repeated element in the terms with which this case is concerned, but you see that Part 6, which is the relevant part, applies in relation to:

State elections and elected members of Parliament –

a term defined to mean “the State Parliament”.  Could I draw to your attention in section 84 a number of definitions?  “Donor” is very obviously defined; I need not pause on it.  The word “entity” is defined to mean –

(a)       an incorporated or unincorporated body, or

(b)       the trustee of a trust –

The latter, of course, could include a natural person, but as a trustee.  “Gift” is defined elaborately, but not in a way the details of which matter for our argument.  It is comprehensive, is what matters.  In subsection (6) of section 84, one sees a concept of association for the purposes of being taken to be “a single corporation” by dint of using the Corporations Act notion of relation, related corporations for corporations. That may become useful by way of some contrast. Section 85 is an important definition central to the prohibition of section 96D to which the first part of my argument is directed.

Could I note, in particular, the provisions of paragraph 1(d)(i) which includes this indirect notion of:

a gift made to or for the benefit of an entity or other person (not being a party, elected member, group or candidate), the whole or part of which was used or is intended to be used by the entity or person:

(i)to enable the entity or person to make, directly or indirectly –

so there is two levels of indirectness here –

a political donation or to incur electoral expenditure –

the two concepts which are distinct have overlapping policy aims to which we will come.  In subsection (2) I draw to your Honours’ attention that the amount that forms part of the proceeds of a venture or function is to be taken to be a gift paid by way of:

contribution, entry fee or other payment to entitle that or any other person to participate in or otherwise obtain any benefit from –

I think that means the rubber chickens are being valued at zero for the purpose of this scheme, but one sees the level of detail and relatively small sums, indeed, and the milieu that is sought to be regulated by these scheme of provisions.  Then we come to something that is really quite important, subsection (3):

An annual or other subscription paid to a party –

One lingers on the word “party” to contemplate what kind of party something could be if there were not, for example, members or, perhaps, affiliates but certainly members.  So ‑

An annual or other subscription paid to a party by:

(a)       a member of the party –

Presumably, that is meant to pick up by someone who proposes to become a member of the party by dint, among other things, of payment, and ‑

(b)       a person or entity (including an industrial organisation) –

words of explicit inclusion quite unnecessary for the definition but making quite plain the aim of the provisions –

(including an industrial organisation) for [what is called] affiliation with the party –

Now, we draw to attention that the natural way of reading (a) and (b), divided by the “or” is that whether or not they overlap there are at least distinct qualities to each of being a member or being an affiliate – if I may use that cognate – suggesting they are not the same.  Of course, as a matter of English, the most obvious way to be affiliated with a cause or a body of people or a group of colleagues is, of course, to be a member of a party or group to which everyone is also a member, but they seem to be different, the words are different, the concepts seem – if somewhat overlapping, they seem to be distinct.

But both of those indifferently, so long as it is an annual or other subscription of that character, they are all taken to be a gift to the party, so it is not being in return for membership or in return for affiliation, notwithstanding it is still a gift to the party.  There are provisions recognising the federal nature of matters to which I refer, for reasons which are obvious from our written submissions but without dwelling on them in section 85(3)(a).

One sees the intent in relation to “political donation” and its connection with electoral expenditure by the scheme set out in subsection (4) with the reversal in subsection (5).  So one starts that gifts in a private capacity for personal use not intended to be used:

solely or substantially for a purpose related to an election or to his or her duties as an elected member –

“are not political donations” but under subsection (5)

If any part of [such] a gift [was] . . . subsequently used to incur electoral expenditure, that part of the gift becomes a political donation.

Timing is not a matter that will be critical to any part of our argument but it is a – if I may call it this way neutrally – a rather elaborate and sophisticated scheme of controls by reference to periods which characterise this part of the Act to which, if I just may simply give you a reference, the notion of incurring is obviously going to be critical for counting amounts and for understanding of obligations to disclose and the like and for those purposes section 95J, which otherwise will not play any part in my argument, is important as one of the mechanical parts of this scheme.

“Electoral communication expenditure”, a phrase to which I will come in a moment, is taken to be incurred when the services for which the expenditure occurred are actually provided et cetera, et cetera.  Could I next come please to section 87?  Your Honours have seen already some of the connections between the concept of political donation and electoral expenditure.  Can I point out that in section 87 there is a genus and a species?  The genus is “electoral expenditure”, the species is “electoral communication expenditure”.

For present purposes, at this stage in my argument, could I dwell specifically on the terms of section 87(1) so as to make good the proposition that it is a very broad and functional concept which occupies the heartland of what might be called usual, not the only, but usual forms of political communication, particularly in relation to an election?  Because “electoral expenditure” is defined as “expenditure for or in connection with”, clearly, to have “in connection with” as well as the word “for” is expansive.

“Promoting or opposing”, that, of course, is the nature of the election contest.  It would be manifest ultimately by the expression of opinion by voters, electors, by vote “directly or indirectly”, again, a phrase which with whatever vagueness in operation is nonetheless very expansive.  “A party or the election of a candidate or candidates or for the purpose of influencing”, that being added means again more expansiveness given what has already been set out in subsection (1), “directly or indirectly”, yet more expansiveness, “the voting at an election”.

A phrase which, in our submission, not coincidentally ties this concept and the prohibitions which relate to both donations and expenditure to the notion found in both Constitutions that we invoke in our argument that the Parliament will be selected and representatives chosen by the expression of political opinion manifest in electors’ votes.  I should draw to attention section 87(3), redundantly or otherwise, perhaps pleonastically, it is noted that electoral expenditure does not include:

expenditure incurred substantially in respect of an election of members to a Parliament other than the NSW Parliament –

and then there are other matters which might be called the standing, establishment exception, in subsection (3)(b). Could I then go back to the terms of section 96D?

In subsections (2) and (3), provision is made to prevent what might be called evasion or circumvention of the prohibition in subsection (1) and it introduces a class called “a corporation or other entity”.  I have drawn to attention the definition of “entity”.  Of course, it is not only corporations or other entities who are forbidden by subsection (1) to make political donations to a party.  It is everyone who is not an individual who is enrolled on one of the rolls.  But from all those persons, natural or legal, singular or collective, from all of those a corporation or other entity is the object of the anti‑circumvention provisions of subsections (2) and (3).

Then one comes to subsection (4) which is at the heart of our argument in the first part of our case. Bearing in mind the definition of “political donation” which has to the fore the word “gift”, to which I drew attention in section 85, particularly subsection (1), subsection (4) is, we think, completely redundant, that is, it enacts something, the effect of which was already explicit by the combination of section 85(3) and section 96D(1).
However, it serves the valuable function of putting beyond any doubt whatever the intended purpose to be measured against the various constitutional yardsticks we have proposed of these enactments -

Annual or other subscriptions –

So the same phrases one finds in section 85(3) –

paid to a party by a person or entity (including an industrial organisation) –

Again, the words adapted very closely from paragraph 85 (3)(b) –

for affiliation with the party –

So there appears to be a selection here of some, but not all, of the matters covered by section 85 (3).  Whether there is, on a proper reading of 85 (3), 96D(1) and 96(D)(4), an exception made for membership subscriptions by persons who are not enrolled need not deter us at the moment.  It is, however, a curiosity of the provisions in question.

Under subsection (4), unnecessarily but very explicitly, those subscriptions paid are taken to be gifts if they are paid “for affiliation with the party”.  They are, parenthetically if unnecessarily, also enacted to be taken to be “political donations to the party”, which, of course, they would be by reason of section 85, in any event.  They are what is called “subject to this section”.  In case there was any doubt about what that meant, Parliament has gone on to enact, “Accordingly”, it is said, “payment of any such subscription”, and then the intent becomes extremely clear, “by an industrial organisation or other entity”, which, of course, will include corporations, “is unlawful under this section”.  We need not be concerned with the carve‑out in subsection (5).

Now, I referred in opening to the scars of amendment perhaps unusually shown on the face of this enactment.  Could I briefly take your Honours to two demonstrations of that in this regard, section 92(4) ‑ subsection (4) of section 92?  Section 92 is a very important provision of the scheme, self‑evidently.  It requires political donations to be disclosed, and your Honours are aware from provisions to which we have drawn attention in our written submissions, disclosed donations are in one way or the other also published or the information is available to the public.

So one can see for any legislation the avowed intent of which is to aim at the evil of undue or corrupt influence by money on parties and related political player concepts, it can be seen that disclosure must be obviously a very important and central provision.  Under subsection (4) one sees in paragraph (a) that there is required to be disclosure of:

the total amount of annual or other subscriptions paid to the party by members or affiliates –

This is obviously from a time when the receipt of money from affiliates, the acceptance of money from affiliates, was not regarded by Parliament as appropriate for the purposes of dealing with the supposed evil of the undue or corrupt influence of the receipt of money by parties.

Similarly, one will see in subsection 95D(2) another very important part of this scheme concerns caps, that is, caps on donations.  Under section 95D there is provision for exemptions from donation caps, that is, amounts not to be counted towards achievement of the cap.  The party subscription is to be disregarded except insofar as it exceeds the maximum.  The maximums are set out in subsection (3).  The maximums are expressed in terms which contemplate surely, one would have thought, but for what one knows about 96D(4) ‑ contemplate the lawful payment of subscription “in respect of affiliation” over the maximum of $2,000 or “$2,000 multiplied by the number of those members of the affiliate”, simply ensuring that any such excess is counted towards a donation cap.  A cap, I stress, is a limit on that which is permitted.  The whole concept of cap is, up to that you may, over that you may not.

So again we have in 95D a provision which obviously predates and comes from a time when the legislated policy did not include the notion that the subscriptions paid by affiliates were required to be forbidden to be accepted at all as part of the fight against the undue or corrupt influence of money on parties.  The donations prohibition one sees is not only directly to a party, one sees they are also to third‑party campaigners, and for those purposes could I take your Honours back please to the – it is a multi‑part definition I need to take you to, it starts in section 4(1):

third‑party campaigner means an entity or other person –

that includes a corporation –

(not being a registered party, elected member, group or candidate) who incurs electoral communication expenditure –

a concept I had drawn to attention earlier, during what is called a “capped expenditure period”, which is indeed defined in Part 6, to which I will come.  There is there a somewhat telling point of definition, that is, definition of one of the, I will call them participants, whose making of donations, indeed, receipt of donations and certainly incurring of expenditures is sought to be controlled by this scheme. 

In the definition one sees that money below $2,000 does not concern those who defined the terms by which the controls were exerted.  You will recall that $2,000, perhaps not coincidentally, was the amount provided as a maximum for membership subscriptions or affiliation subscriptions, either in toto or per capita.  In other words, clearly the statute on its face is not saying it is all money that presents a threat which may be appropriately controlled by complete prohibition.  On the other hand, the effect of 96D(4) is to forbid all donations, however small, and notwithstanding that in any event before that prohibition came in there were caps about which there is no material whatever in the special case book to suggest that they have not served their intended purpose.

While on the point about the scheme and the oddity of these iterative amendments, could I point out that one of the arguments of which a deal is made by our opponents and those supporting them is to note that there is what I will call a trade‑off to be taken into account whereby there are statutory subventions of parties available under what I will call generally the same legislative scheme and it is said that must be borne in mind when considering questions including the critical question of whether there is a burden on the form of communication that we contend is constituted by the payment of subscriptions for affiliation.

One thing that that argument makes crystal clear is that it is not the receipt and expenditure for partisan political purposes of money for those purposes that is any part of the scheme said by the State to be required in order to combat the undue or corrupt influence of money.  It is not the money itself.  The State goes out of its way by the scheme and in its argument here to maintain there is a benefit by way of the statutory subvention the parties get money to spend on purposes that make the donation, or make the receipt I should say, one that would, had it been received from someone other than the State, be a political donation. 

So we know it is not amounts of money under $2,000 which for a third‑party campaigner is necessary as a matter of definition, but we do know in 96D(4) that any money, a dollar and up, is something that ought to be prohibited according to 96D(4) when it is paid for affiliation, notwithstanding that before that was enacted in terms of the caps, that was money which was to be disregarded.

I do not need, I think, to dwell further on the matter we note in 1(c) of our outline, but could I draw to attention – it will not form any part of my argument – the fact of the regulation which we note there.  One sees then that the simplicity of the prohibition is a prohibition on the acceptance of money which is, in the senses I have noted, expansively defined by reference to its intended use for what I am going to call generally purposes of political participation.  It is there, in our submission, that there arises a very important premise of our contentions to which we turn, in particular in paragraphs 15 and following in our written submissions.  The subheading, we hope, still accurately signifies my purpose in this part of the argument.

The making of these payments, the acceptance of these payments, we call them donations, is itself a communication as well, I make it clear in another form of our argument, as a manifestation of a kind of association.  The premise I am interested in, in this stage of my argument is that the making and receipt of such donations constitutes communication, particularly not only between the donor and the donee but, in particular, by dint of the disclosure and publication provisions to the relevant concerned political world generally.

FRENCH CJ:   Do you posit any burden on the implied freedom other than by way of restriction on, or prohibition of donations, qua political communication?

MR WALKER:   I may not have understood your Honour’s question.  I am sorry.

FRENCH CJ:   Yes.  You are characterising donations as a form of political communication.

MR WALKER:   Yes.

FRENCH CJ:   You say that that prohibition imposes a burden upon that form of political communication.

MR WALKER:   Yes.

FRENCH CJ:   Is your argument critically dependent upon that characterisation being accepted, that is to say that the donation is a form of political communication?

MR WALKER:   No.  No, it is not.  As your Honours will have seen, we say as well that the effect of the prohibition, even if it not be itself communication, is upon the communications enabled with the sinews of political war ‑ ‑ ‑

FRENCH CJ:   Facilitated by the use of the funds.

MR WALKER:   Quite so.  So no, it is not.  I am sorry.  I apologise to the Chief Justice.  The short answer was, no, it is not critical.  It is our first arrow.  We have a second one, quite separately flighted.  May I now turn ‑ ‑ ‑

HAYNE J:   Can I understand this aspect of the argument?  Does it come to the proposition that the effect of the Act is that a corporate or unincorporated body may not make the political statement or communication constituted by paying for affiliation with a party?

MR WALKER:   Yes.  Now, the opening of your Honour’s formulation refers to some but not all of those who are caught by the interaction of subsections 96D(1) and (4).  Yes, incorporated and unincorporated bodies are entities, as are trustees, but the prohibition in 96D(1) applies to all who are not an individual enrolled ‑ ‑ ‑

HAYNE J:   Just so.  So that the scheme thus effected by the Act is that the only players are parties – must they be registered parties to fall within this?

MR WALKER:   Yes, your Honour.

HAYNE J:   I would have thought so.  Registered parties ‑ ‑ ‑

MR WALKER:   I should say that comes up various ways in terms of registration in terms of the capacity then for payments to be made, yes.

HAYNE J:   The only players in this arena are registered parties and registered electors.

MR WALKER:   No, that is too large a statement, because when your Honour says the “only players”, in terms of the acceptance of political donations we have as donees, parties, elected members, groups, candidates and third‑party campaigners.  They are those acceptance by whom of political donation is the subject of 96D.  The only source of political donations to each of those kinds of, I will call them vectors of political action, are enrolled individuals.  I do not know whether that means yes or something else to your Honour, but we are ‑ ‑ ‑

HAYNE J:   Am I buying or selling is your question there, Mr Walker.

MR WALKER:   Yes, we are saying that the effect of these provisions is markedly, hugely indeed, to narrow the field of those, all of whom it might be supposed have political interest, corporations have political interest, their annual reports would not refer to legislation so much if they did not, and 17 year olds have political interests, permanent residents who are not voters have political interests, et cetera, et cetera.  All of those persons are taken out so that the only source of donations one sees are the enrolled voters.

CRENNAN J:   That is a concept of representative government as only representing the electors.

MR WALKER:   Indeed so.  It says it is to sever, if I may put it this way, the notion of those permitted, or in this country, obliged, to participate in the choice of parliamentarian from those who are bound by, and obtain the protection of, the laws made by the Parliament.  In particular, one only has to think of the apprentice tradesman eligible to be a unionist working, paying tax and not yet enrolled by reason of age.  There was a time when the class was even bigger and, of course, one political issue concerns the law of the suffrage.  Those persons have obvious political interest; one does not need facts to prove that, it is a matter notorious.  The same is very much the case with permanent residents, equally part members of the community, bound by all the laws.

In our submission, there is a notion ‑ I do not want to put more respectable a label on it ‑ there is a notion underlying the way the prohibition has been devised in subsection 96D(1) that says of those enrolled to vote that it is their participation in this particular very important form of political participation, we say, communication, namely, the making of donation, as if, for example, communication of the traditional kind, listening to a speech and heckling, to use a hackneyed example, as if that could only help to inform the choice of the electors if only those entitled to vote were engaged in the dialogue.

In our submission, one need only posit the meeting with a guest speaker from abroad to warn of the evils of particular policy followed in his or her country proposed to be adopted by a party in this country as part of their election campaign to see the absurdity of proposing that in terms of the informing of choice or the influencing of choice or the promoting or opposing of the candidacy of somebody for one of the Houses, the absurdity of leaving out of account the contributions to that communication by somebody who is not an enrolled voter.  The same is obviously true when one moves to entities, churches, charities, residents’ groups, clubs, all of those – I should say, none of those is, of course, an individual enrolled to vote.

The notion of proposing ‑ whatever one’s feeling about ecclesiastical purity ‑ the notion of proposing that church’s voices ought not be heard in relation to politics, or the RSL’s voice ought not to be heard in relation to politics, or the Australian Conservation Foundation’s voice ought not to be heard in politics, need only be raised to be rejected.  The subset that we are interested in in this case is, of course, it should go without saying that freedom of political communication involves not only this etiolated dialogue between people, all of whom are enrolled voters, but participation in dialogue, debate, discussion and the circulation of information which nowadays, of course, will certainly not be confined to that sourced within New South Wales and may well be expressed in terms well‑nigh global in their import, equally applicable to New South Wales as, say, to India, if one thinks about climate change and the like.  So that the notion which apparently underlies 96D(1) is one which, in our submission, at its very outset and in every ramification it then sets in train, displays a fallacy about the nature of that form of political participation which is protected by the implied immunity.

The second way – I have anticipated this by answering the Chief Justice’s question ‑ the second and third ways that we note in 2(b) and (c) of our written outline do not need much further elaboration.  In our submission, the immunity has always and is currently – has always been understood and is currently understood as looking to the substance of the matter and the effect, both legal and practical, of the impugned law is one which can attract invalidation by reason of the immunity even if the impugned law itself does not in turns impose a burden on communication.  That was the purpose of my answering the Chief Justice’s question, no, it is not critical that we succeed in persuading your Honours of the premise that donation is itself a form of communication.

We need to confront at this point in our argument, as we need to as well in paragraphs 10 and 11 of our outline, the obvious interrelation, particularly made manifest in the party concept with branches between Commonwealth and State political matters, including Commonwealth and State electoral matters.  In our written submissions, could I draw in particular attention to the way we have put it in paragraphs 25, 26, 27 and 28.  I do not wish to spend time in address on those matters which are not of course common ground but, as we argue, draw upon propositions which are not challenged as coming from the case law.

FRENCH CJ:   So your characterisation of a donation to a political party as a political communication for the purposes of the implied freedom is really based upon the proposition, beginning at paragraph 26 of your submissions, that such an expression of support “is, at least potentially, relevant to federal issues”?

MR WALKER:   That is correct.

FRENCH CJ:   That is regardless of whether the donation is limited to a State branch or State-based party?

MR WALKER:   Quite so, and may I say on that point – and I do not need to dwell on this, I think - the very provisions of the legislation we challenge include a recognition of the, if you will forgive the word, interoperability of the accounts of branches and the federal emanations.  Those are excluded or exempted or unregulated flows that may happen and they are permitted to flow in both directions.  That is an extremely telling concrete demonstration within this legislation itself, an acceptance of the place and relevance and obviously the potential overlap, very considerable overlap of issues that may inform a choice of electors for a State House or a Commonwealth House.

One need only look at the face of our federal Constitution and the familiar, nearly common forms of our State constitutions to see that the existence of concurrent heads of power – even before you get to State referred powers, the existence of concurrent heads of power - true, with 109 looming over it in action, but simply the existence of the concurrent powers with the party system, that is not something that is pretended not to exist in this statute which is explicitly recognised adds up to, in our submission, an overwhelming case for the potential to which we refer in paragraphs 24 and 26, 24 that we emphasise that concept and 26, as the Chief Justice points out, where we draw on it to advance our argument.

The matters we touch on in 28 obviously spins out as a matter of political history, about which there need be no evidence.  The concurrent powers that one can formally analyse by looking at the respective constitutions in practice produce, and not only by referral of powers but by dint of section 96 legislation and by other forms of co‑operative scheme, have produced in this country a degree of involvement, some may say entanglement, of State and Commonwealth matters of political issue, all of which potentially affect the way in which voters may choose representatives in the respective Parliaments to such a degree that the explicit attempt, if you will forgive the word, to quarantine the effect of the laws we challenge by referring to State Parliament only, render it futile.  It obviously has an effect more generally.

BELL J:   It is sufficient for it to be a political communication that the inference to be drawn from the fact of the donation to one or other party is that the donor is generally desirous of supporting that party.

MR WALKER:   Yes.

BELL J:   I am raising with you the limits of the statements in Levy (1997) 189 CLR 579 respecting the idea that one can communicate non‑verbally a message, but one still has to give some content to the idea of the message.

MR WALKER:   Quite so.  Now, in an attempt to answer that, it is not left to inference when it comes to union affiliation fees and just let me provide the example from my client referred to in the letter from the Court to the parties.  In volume 1 of the special case book behind tab 8 at page 271 you will find the AMWU’s rules for its political fund and there can be no doubt that the whole of the so‑called objects, a word which is obviously reminiscent of the usage commented upon by Mr Justice Fullagar in the passage from Williams v Hursey (1959) 103 CLR 30 at 59 to 61 that the Court’s letter drew to attention, these objects involved as well powers and obligations.

I should, while I am on this page, take you to the next page of the rules.  It helps, I hope, to substantiate our answer to Justice Bell.  Yes, in certain circumstances the inference is extremely clear.  The message communicated by an affiliation fee, if one looks at page 271, is that:

The objects of the Trade Union shall include the furtherance of political objects –

by affiliating with and sustaining, with money, the Australian Labor Party which, as Mr Justice Fullagar pointed out, had its origins, indeed, as a committee of – emanating from trade unions.  If you turn to the next page one sees that this has to do with political opinion and so there are exemptions which are permitted and one knows that the statutory regulation of trade unions includes some care in relation to discrimination provisions on account of political opinion, but one knows then that the money that comes to a political fund from people who have - with people not seeking exemptions, the legal fun being for the purposes that are used when that affiliation fee is paid, that is the union and the members, as members putting their collective money where their collective mouth is in support of ALP candidates for election as well as more generally of ALP activities, all of which are definitionally political and all of which, when it comes to electoral expenditure, all are in the nature of communication, that is, they either pay directly, to use the words of the statute, for communication by paying the television channel or indirectly by permitting activities to be undertaken which spread the message.

FRENCH CJ:   So far as the connection between State and federal issues is concerned am I right in saying that what you posit as a contemporary constitutional fact is an entanglement of those issues rather than some in principle indivisibility?

MR WALKER: No – I mean yes. What I propose is what the Chief Justice has said. May I elaborate? That is not to say there is not, as I put earlier, on the face of the Constitution quite formally an argument which says these matters are not so readily severed one from the other, but that is not the way we wish to rest. That is only the very modest beginning of an argument. It is no doubt because of those constitutional frameworks that our history has occurred as it has, not least the dominance of the Commonwealth in taxation and, if I may put it in this way, in the contribution of this Court to that history in terms of the national fisc.

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

MR WALKER:   I am obliged to your Honours, thank you.  May I now come to a few further remarks for proposition 4 in our outline, most of which I have already anticipated.  In my criticism of what appears to be the underlying notion, the fallacious notion that informs 96D(1)’s singling out of enrolled voters as those who may make donations that it is lawful to accept, it is very important, in our submission, to concentrate on the foundation and rationale of the immunity which is the informed choice of the elector, the voters.  Nowhere in the nature of issues that may of their very nature and by an understanding of representative democracy inform a choice, also sensibly to be characterised as information, opinion, partisan declaration only by fellow voters. 

I have already given the example of the overseas herald of disaster being used to inform the choice of voters in this country.  The notion that there could be a law forbidding the making available of money for the publication of the views of a foreigner which are calculated to affect the votes of electors in this country is, in our submission, utterly alien to the notion of a representative democracy.  It is to be seen in examples like that that the fundamental need to concentrate on the communication for which the immunity is necessary, having as its purpose the enhancement of the choice by the electors that makes it quite clear that it, therefore, cannot be – cannot be only electors who can be parties to that communication. 

Now, I ought to say something in general terms, particularly given the longest footnote I have ever settled in my career, your Honours, on pages 3 and 4 of our written submissions.  What I want to say and perhaps, more significantly, want not to say about, if you will forgive the expression, foreign case law, I am not forbidding your Honours from being communicated with by foreign courts but rather I am saying that for the reasons we have tried in that footnote to thread the needle on, there is a deal to be gained, particularly from the United States material but surrounded by at least the usual, perhaps more than the usual, caveats as to its use. 

But your Honours will have seen in relation to the importance of communication by entities other than voters themselves, that is going beyond just voters themselves, in particular, corporations, there has been very close attention paid in the United States to matters of principle which are at least cognate with the argument I have just put to your Honours, namely, the source of the idea is not something which lends itself to control by reference to, in our case, identity as an enrolled voter because it is the communication of the ideas for the choice by the electors that is the point and it would, in our submission, be in the face of - to mix my metaphors - to subvert the fitting of the immunity to deny by permitting laws of this kind to flourish, to deny access to ideas from abroad, from the past, from dead people whose words are being communicated and, in particular, from corporations representing, if they are mercantile, the financial and investment aspirations of shareholders which ultimately they include, of course, enrolled voters but need not. 

There may simply be would‑be investors in Australia who may want electors in Australia to be aware that certain policies, be they of taxation or environmental regulation, could have employment consequences.  All of these are, in our submission, well and truly ploughed as jurisprudence in the United States and we respectfully submit that for the reasons we have put in writing, there are useful analogues that can, as I say, with the usual caveats be employed in support of our argument on this matter.  Apart from that, unless your Honours wish me to proceed otherwise, I do not intend to go to the American case law.  We have given the specific references with a view, we hope, to making those points.

Can I return to one matter to supplement my answer to the Chief Justice earlier?  The phrase that I should have used in my answer is the one found in the first line of paragraph 24.  We have explained those phrases in our written submission.  The communications can be constituted by the political donations – that is the first premise, but a separate one is that they interact with, that is, affiliation is a matter that can be the subject itself of communication, and that certainly communication is enabled by, that is, things can be paid for.

FRENCH CJ:   How does a political donation itself communicate something which is relevant to a federal – to a political issue?  It might be a donation that is absent the disclosure requirements, it would be done privately.  It might be just a lump of money given for reasons which are not disclosed.

MR WALKER:   We are assuming regularity.

FRENCH CJ:   Yes.

MR WALKER:   So these are disclosed donations and, furthermore, we are ‑ ‑ ‑

FRENCH CJ:   So is it in that context that they are characterised as political communications?

MR WALKER:   Certainly.  That is the only context.  We have no interest in communications of a kind which would well and truly fit the notion of undue or corrupt influence.

FRENCH CJ:   No, the statutory context requiring disclosure is essential to characterisation of donations as political communications.

MR WALKER:   Yes.  The provisions we complain about are provisions aimed at political donations which would be disclosed but for these provisions, and which would be capped but for these provisions.  So disclosed and capped – and when we say disclosed we do not just mean recorded somewhere, we mean some of them are on the internet and all of them are available for inspection, and with relatively timely lapse only between the election in question and the returns from the various donees or donors, as the case may be.  Those provisions are complex, the detail does not matter, but the notion that they are disclosed, with more or less detail depending upon their size or their source, that they are disclosed and published is critical to the argument we put.

CRENNAN J:   Do you therefore accept that there is a mischief, which I think you referred to earlier as undue, corrupt or hidden influence?

MR WALKER:   Bank notes in brown paper bags are ‑ ‑ ‑

CRENNAN J:   Undue, corrupt or hidden influence?

MR WALKER:   They are undue and corrupt financial influence.  They are also, obviously, bribery or offences of that nature.  The overlap is obvious and in the nature of such conduct.  Of course, we accept there is a mischief that can be described by the words I have selected from the various words used, and it is undue or corrupt influence of money in the political process.  Of course, there is an acceptance by us of that mischief, and we must also accept, and this is, I think, a concession that there are many more ways than one of skinning that cat, and it is not for this Court simply, as it were, to say, this is not either as effective or as attractive as it might be.  However, when we come to the next stages of our argument in relation to what I will call loosely, proportionality, appropriate and adapted, there has to be a judgment, a yardstick constituted by the mischief and the infringement, entrenchment, pressure placed by such laws on the communication which is the subject of the immunity.

KIEFEL J:   When you do come to discuss in that context the legislative purpose, will you be distinguishing between the purpose more generally of the Act as a whole and the legislative aim of the particular provisions which are sought to be impugned?  I say that from my point of view because the statement of claim appears to accept that the particular provisions have a legitimate aim.  I am just not sure whether it is said to be the broader anti‑corruption notion of the whole of the legislation or whether it is something more specific than that.

MR WALKER:   I will.

KIEFEL J:   Because the starting point for the proportionality analysis is purpose, of course.

MR WALKER:   Quite so.  We are assisted, if only forensically, by the way the defendant puts it, which I have obviously borrowed from in the way I have been putting it this morning.  Rather than attempt a full answer to Justice Kiefel’s question which, with respect, is a large part of the argument to which I have to come, could I simply say in short form, which I will elaborate later, that we certainly rely upon the – we certainly accept that there is a legitimate aim to regulate the acceptance and use of political donations for the purpose of addressing what we accept is a mischief or evil of the undue or corrupt influence of money in political process, yes.

KIEFEL J:   While you are interrupted, will you be referring us to any other legislation in any of the other States concerning this topic?

MR WALKER:   No.

KIEFEL J:   Is there no other legislation dealing with this subject matter in the other States?

MR WALKER:   Not the subject matter of the provisions that we are attacking.

KIEFEL J:   No, but the general purpose of legislation, which is to regulate the acceptance and use of political donations, as you say, by way of the less controversial factors such as requiring registration and capping.

MR WALKER:   Yes, well, I think they all have that, your Honour, but ‑ ‑ ‑

KIEFEL J:   I have in mind the comparison of legislative measures that have made in some of the section 92 cases.

MR WALKER:   May I take that on notice, your Honours?  It occurs to me, of course, that the iterative amendments to which I drew attention earlier with the really rather startling vestiges that it leaves, contains within this very statute a demonstration of different and less burdensome methods of addressing the mischief.

KIEFEL J:   I understand that that is your argument.  I was thinking of the broader complexities ‑ ‑ ‑

MR WALKER:   No, I do understand, your Honour, with respect, yes.  May I take your Honours please to volume 5 of the special case book – I think this may be some particulars relevant to the matter Justice Kiefel has raised.

HAYNE J:   At what page?

MR WALKER:   I am sorry, your Honours, it is tab 57, page 2210.  These are an attempt to answer questions about the conceded legitimate end.  Could I draw to your Honours’ attention at about line 15 or so at paragraph 12, without reading it?  One sees that it is in very general or high level terms, “the perception and reality of corruption and undue influence”, et cetera.  The words in parentheses are a little more specific and we do not, in our argument, seek to move away from that position.

HAYNE J:   You will, no doubt, in due time explain what is the connection between the end identified and 96D.  You say it is the end sought to be achieved.

MR WALKER: I will address that immediately. As your Honours will have gathered from the submissions I put as I took you to the terms and defined concepts used in section 96D(1) and then, as it was, spun out, as it were, in subsection (4), it is our position quite simply that 96D does nothing calculated to promote in an appropriate fashion the achievement of those ends.

Now, that is a rolled‑up proposition because in an appropriate fashion is a phrase one can use, and I have just used, to encompass the necessary understanding of the effect of the immunity, that is, what is protected conduct relevantly which is affected by the impugned propositions as well as, obviously, that degree of deference appropriate by the court to legislative choices where there is obviously one uniquely direct or available way of combating a mischief. 

We say that the prohibition on trade unions paying affiliation fees, the prohibition on non‑voters being members who pay subscription fees of however humble an amount, because there are caps here, relevantly $2,000, is impossible to explain as a contribution to the fight against the undue or corrupt influence of money and politics, not least because we know within the terms of this statute itself that the same figure, $2,000, is something which marks the beginning of the defined concept of third‑party campaigner, a very important concept in the scheme in terms of the effect of money on the electoral process, and not least because there is publication of the receipt of membership fees and affiliation fees.

KIEFEL J: But is not that to say that the legislative object of section 96D does not coincide with the wider general purpose of the legislation in question?

MR WALKER:   It is; that is another way.  We concede there is a legitimate end.  These provisions do not serve that legitimate end.

FRENCH CJ:   You say there is ‑ ‑ ‑

KIEFEL J:   But the legitimate – I am sorry.

MR WALKER:   There is another end.

KIEFEL J:   The legitimate end you are talking about is the wider purpose of the legislation, surely?

MR WALKER:   That is right.

KIEFEL J:   We are not talking about – you have not identified a legitimate purpose of the particular provisions.

MR WALKER:   We have not.  We say there is none.

KIEFEL J:   All right.  So we are just talking ‑ ‑ ‑

FRENCH CJ:   And it has no rational connection with the legitimate end which you accept for the legislation otherwise?

MR WALKER: That is right. Of course there is a legitimate end for all statutory attempts to regulate, such as by caps, such as by disclosure and such as by use, the receipt and expenditure of money by political parties for the reasons we have accepted. Section 96D, particularly when it is spelt out in 96D(4) just has no capacity to lend any useful contribution to any such scheme. It does not do so. What it does do is make it clear that that which is the tradition and history of the Labor Party is to be prohibited in New South Wales.

FRENCH CJ:   That might be a convenient moment, Mr Walker.  We will adjourn until 2.15 pm.

AT 12.58 PM LUNCHEON ADJOURNMENT

UPON RESUMING AT 2.14 PM:

FRENCH CJ:   Yes, Mr Walker.

MR WALKER:   If it please the Court.  We were up to proposition 7 in the outline.  I had already started on it.  The prohibition that I am presently addressing treats what the State calls in its defence the character and size of corporations and other organisations in which trade unions are included as the features by which there is an attempt to justify, as appropriate and adapted to the legitimate end in question, the complete prohibition of all donations including obviously of trade unions to the party.

HAYNE J:   What is it about association or aggregation for the purposes of contribution to parties or candidates that is identified as requiring special treatment?

MR WALKER:   Nothing in the statute.  The first thing is the statute does not contain by any discrimination at all an indication of what it is about the whole of the residue, that is, what is left out when you take out enrolled voters.  It does not indicate in the statute anything.  We know it is not the size of the donation because they are capped and in answer to Justice Kiefel I am going to come very soon to what we know from other practice in this country, other legislative practice.  So it is not the amount.  We know that it is not nefarious source, that is, ill‑begotten gains.  It is not a new way of laundering criminal proceeds because again it is completely indifferent as to the kind of corporations.  We know it is not to do with engagement in business generally because it will be “not for profit” trade unions obviously as well as charities alongside business enterprise organised for private profit.

We know it is not particular sectors.  Some of the comparative legislative addressing of the influence of money and politics has been expressed as your Honours probably know, though not in question in this case, by reference to an industrial segment or a kind of business enterprise, gambling or real estate, for example.  So the law does not contain any singling out.  One is therefore left to understand from the nature of things what it might be.  We come to the same conclusion, in our submission, that there is a complete indifference between corporations and unincorporated bodies, between charities, trade unions, business enterprises and, for that matter, natural persons who are not entitled to vote, a complete indifference in the application and operation of this law to anything that might sensibly fall within that very general expression “their character and their size”.  It is simply wrong to assert that there is a common character other than they not being enrolled voters, certainly, a common character of any relevance to an appropriate and adapted legislative means of combatting the influence of – undue influence of – or corrupt influence of money and politics.

HAYNE J:   The unspoken premise appears to be that party is the only form of aggregation – permitted form of aggregation for political purposes.

MR WALKER:   There is that suggestion and, we submit, in a particularly incomplete and inaccurate form because historically there is obviously one very important party, not alone in this regard but one very important party made originally by affiliation and maintained by affiliation.

That may be about to become a matter of history, but it is a matter of history, and if it happened once, it could recur.  There is nothing in the special case, nothing in the legitimate extrinsic materials which could possibly suggest that that model of party maintained by affiliation is in itself a factor which by elimination or reduction would appropriately address the issue of undue or corrupt influence of money.

We come to the other abstraction arbitrarily and inaccurately applied to all of these would‑be donors who are not enrolled voters, that is their size.  Little needs to be said about that, except that it is great and small, tiny and massive, all encompassed within the same category.  Size of the enterprise is surely irrelevant when there are caps.  It is for those reasons, in our submissions, that it is simply impossible to discern how it is that this is a law that could be said to impose a burden, true but nonetheless one which is appropriate and adapted to serve the legitimate end.

Now, Justice Kiefel’s question lends itself, I hope, to an answer in the following compendious form.  We have supplied copies to the Bench and our friends of a background note published by the parliamentary library on 19 March 2012 entitled “Political financing:  regimes and reforms in Australian states and territories” by Brenton Holmes of the Politics and Public Administration Section.  It is Appendix 1, which follows page 49, is a descriptive table which your Honours may find convenient.  The chapter and verse of the provisions in question are found in the text of that paper.

It requires updating in one respect only, which is we think not material.  Since that compilation the Australian Capital Territory enacted amendments to its regime by its Electoral Amendment Act 2012.  May I attempt these generalisations without taking your Honours to any detail of those documents or enactments?  Caps are near universal, or at least widely used.  Prohibition of donors is very rarely attempted and in a comprehensive fashion such as attempted in this legislation before this Court, not at all; it is unique.

We put in proposition 8 that which we accept as a matter of argument will often be perhaps necessarily part of the argument that the impugned provision is not reasonably appropriate and adapted, et cetera.  We put the proposition that there are alternative less drastic and we call them equally practical.  We think we may have been modest in that last expression.  I would substitute now, more efficacious means of achieving that legitimate end.

The comparative expedience referred to in the parliamentary library paper from around the country certainly suggests that capping of donations so that no one source be the collective source, like a trade union or a charity or a residents group or a business source, no one source will be responsible for, for example, a very large sum of money received by the party and capping may or may not lend itself to constitutional inquiry.  It is not part of this case and it will turn upon circumstances including quantum and the effect on operations of a kind which no doubt would require fairly complex and detailed facts to be ascertained.

In addition, as we have tried to emphasise this morning in address and throughout our written submissions, if one is combatting undue and corrupt influence of money in a milieu in which money itself is not regarded as per se bad, as indeed such a necessity that the taxpayers should supply it to the parties, then disclosure so as to enable attribution and identification is not surprisingly almost, but not quite, universally practised in the legislative expedients which have been attempted against this mischief.

In our submission, the combination of caps and disclosure, which it should be understood includes publication, that combination is obviously far more appropriate and adapted to achieve the legitimate end than stopping these disparate sources, none of which can be categorically stated on the basis of any facts in the special case book or that might otherwise be used by the Court from legitimate information, there is no one of those sources that can be categorically stated to be such as to create or have a propensity for corruption.

FRENCH CJ:   Now, just following up on, I think, some questions Justice Kiefel was asking you before we adjourned, do you put it that there is no object of the prohibition - given that you submit it is disconnected from the general object of the Act - there is no object of the prohibition other than the achievement of what it actually does?

MR WALKER:   Yes, and that is simply a burden without what I might call a countervailing or justifying purpose on the communication either – on the communication manifested by, involved with or permitted by the subscription.  Yes, your Honour, that is correct.  Could I make one more point about the argument to which we respond in paragraphs 44 to 48 of our written submissions?  I have made some reference to this this morning, namely, the contention that the statutory funding through the so‑called election campaign fund from consolidated revenue is an explanation and justification for the way in which the regime has been supplemented in the ways we challenge.

An aspect which does not come out from our written submissions that we should add to considerations of why reliance on that statutory funding does not suffice to justify what would otherwise be unjustifiable is this.  There is, in our submission, in relation to the funding of parties or candidates in relation to electoral contest, that is, where there is support and opposition being contended for and promised in the future by way of parliamentary votes - there is, in our submission, the world of difference between communication constituted by or enabled by moneys made available by supporters, by your partisans, by those who wish you well and are content to be identified as such on the one hand and, on the other hand, dependence on a statutory scheme which itself depends for its existence or level on continued government support for the legislation; government support, in other words, being the support in the opposed or opposing party rooms.

In our submission, that is most definitely a burden to be deprived of a source of funds into the future, present and future, from people who are willing to put their money where their mouth is and to have in its place, said by the State’s argument to be a complete substitute, this legislated subvention.  I should point out that the contemporaneous material makes it pretty clear that in any event, as we point out in paragraph 46 of our written submissions, the election campaign fund system was intended only “to partly compensate”. 

FRENCH CJ:   When you speak of government support ‑ ‑ ‑

MR WALKER:   I mean, the party – the ministerial party in the lower House plus a majority of votes in the upper House.

FRENCH CJ:   You mean the people who can change the law.

MR WALKER: The people who can, by votes in Parliament, change the law being normally, not always, normally overt partisans. In our submission, that is an element that needs to be added to what we have written. Could I briefly deal with proposition 9? I do not mean by the brevity to suggest that this is, as it were, not so important but the argument in relation to the associational aspects of matters is very largely the same argument about communication constituted by donation or communication permitted by – enabled by donation. Affiliation and membership - and affiliation is the one that matters, we think, for section 96D(4) - affiliation itself bespeaks an essential and important associational element.

In our submission, it is a statement of affiliation is itself a political communication.  It is also part of the association, relative freedom of which is necessary in order to permit the communication to be meaningful and to be appropriately broad for which the immunity is granted.  This is not theoretical, as we point out in proposition 9.  It is, of course, historical in the case of the Australian Labor Party that association by affiliation is no mere detail.  That may be true, of course, of new parties into the future.

Could I then move to an entirely different topic that concerns the argument based upon the provisions of the Constitution Act 1902 (NSW) with the character it has within the meaning of section 6 of the Australia Acts? This is paragraphs 66 to 71 of our written submissions. In supplementation of what we have there written, we simply want to draw to your attention the provisions of 7A and 7B of the Constitution Act.  The particular provisions to which we draw attention are paragraph 7A(1)(b) and paragraph 7B(1)(a) – they are respectively for the Council and the Assembly – and, in particular, the wording with respect to the provisions calling for elections of members, the wording of implied amendment in the expression “expressly or impliedly repealed or amended”.

As your Honours appreciate, the manner and form stipulations were not observed in this case.  In our submission, something as fundamental as the means by which electors may be informed so as to make their choice, that being the core provision of the suite of provisions referred to in this entrenchment requirement, answers the description of a law respecting the Constitution of the Parliament of the State.  It is constituted by an election, an integral rather than incidental feature of which is the requisitely informed by communication voters.

Next, may I come to a section 109 argument, proposition 12?  To that end, may I take your Honours please to the Commonwealth Electoral Act? Your Honours will see that there is a $10,000 threshold for disclosure of gifts by provisions, including section 304, 314AC, 314AEC, 305A and 305B. Then there are controls of a disclosure kind in 306, again with a threshold of $10,000, name and address. It is crystal clear from the reference in section 306B that donations by corporations are permitted, else there would be no need to provide for their recovery in the case of liquidation within a year.

There are important provisions ‑ we have listed them in our paragraph 79 of our written submission ‑ which echo rather the provisions of this State Act in their recognition of the different branches of parties.  Then, next, could I take your Honours to section 327 which is one of the safeguards of the system which contemplates – I wish I could rely on the subheading, “Interference with political liberty etc” it says, and it contemplates in subsection (2) a situation where a person is discriminated against because the person has made:

a donation to a political party, to a State branch or a division of a State branch of a political party –

et cetera, et cetera in particular ways, and an offence is provided.  Now, it would be odd if this Commonwealth enactment were to be construed as making it an offence to do something which according to the intendment of the Commonwealth Act could as well be itself prohibited and criminalised at State level.  So in section 109 terms section 327(2), we submit, is a powerful indicator that the liberty which its terms, so far as it is concerned, leaves for the donation by persons other than enrolled voters to political parties ought to be construed as one that cannot be impaired or detracted from by any consistent State legislation such as 96D.

Now, that is the way in which we had proposed to leave the section 109 question, however, in response to the letter from the Court may I add these following possibilities? If your Honours could go, please, to the Commonwealth Fair Work (Registered Organisations) Act 2009.

HAYNE J:   We would if we could, Mr Walker.

MR WALKER:   Your Honour, I will go no further.  If the Court does not wish me to ‑ I do this only because the letter was received by us.  Your Honours do not have the statute, I am sorry.

FRENCH CJ:   Perhaps you can put succinctly what you want to say about it.

MR WALKER:   Yes.  I am sorry, I had made an assumption which was unjustified and I apologise.  The statute in section 27 provides for the incorporation and the powers, including dispositions with property, of registered organisations.  Now, in itself, that is not going to give rise to any concern under 109.  Under section 149 there is a stipulation requiring that the rules of an organisation control the conduct of making donations.  In this case that control is found in the AMWU’s rules to which I took you before the break.  I do not need to take you to it.  It is in volume 1, tab 8, rule 6.  That is the rule that responds to the requirement of section 149 of the Act.  It is a level of authorisation requirement and a satisfaction by a management committee, et cetera.

The one that may engage 109 is section 164 which provides for a form of enforcement action of the rules of an association.  A member may apply for an order.  The order means an order giving direction for the performance or observance of any of the rules of an organisation by any person who is under an obligation to perform or observe those rules. 

Now, your Honours have seen in the AMWU Rules, 21, to which I took you before the break, that there are objects expressed in terms obviously bestowing power, query obligation, at least a negative obligation not to use the political fund for any purposes other than those stipulated and in that partial or tangential sense 164 gives a kind of statutory force to those rules and one may envisage an argument that says of State legislation such as that we challenge that it is invalid to the extent of the inconsistency it thus presents with the Commonwealth legislation contemplating that rules made for the making of donations of a political kind, rules 6 and 21 of AMWU in this case, may not be effectuated at all, that is, the Commonwealth legislation says, somebody can go and ask for the rule or obligations arising on it to be enforced, and that is plainly at odds with the State saying that you may not make a political donation at all.  That is all we wanted to say in response to the letter.  Could I then turn to the second part of our case, which is about section 95G(6), and can I take your Honours ‑ ‑ ‑

HAYNE J:   Mr Walker, can I ask you this?  What exactly are we meant to do with the last three minutes of your submissions?

MR WALKER:   Your Honour, I put that because I considered it proper to respond to a letter from the Court and I have ‑ ‑ ‑

HAYNE J:   Can I tell you what I take from it?

MR WALKER:   Yes, your Honour.

HAYNE J:   That if there is an elephant in the room we are not to look at it.

MR WALKER:   Well, in relation to that one client there is the argument I have just put.  It does not apply to the other plaintiffs.  We are certainly not saying that the Court should not look at the matter that I have raised.

HAYNE J:   It is not part of the matter, I would have thought.  It is not pleaded, not alleged, no 78B notice.

MR WALKER:   Your Honour understands that that explains why I have put it as I have.

HAYNE J:   Yes.

MR WALKER:   I feel obliged still to have responded to the Court’s letter but, with great respect, it is not in the pleading.  Your Honour, of course, that is so, and there are, as I further answered your Honour’s question to me, what can you do with the last three minutes.  As I hope your Honours have gathered, there are some, we submit, difficulties with the way in which the matter might be put, but doing the best we can, we have responded to the letter intending that that is as far as we can take it.  May I move to subsection 95G(6) please?

The concept of aggregation of caps is, of course, in itself completely unexceptionable.  It is obviously part of an appropriate and adapted set of provisions, of which there could be many legitimate variations, designed by capping to address the mischief of undue or corrupt influence of money in the political process, and it would be appropriate or adapted where the aggregation is stipulated in such a fashion as sensibly to apply to regulate the expenditures that are being capped from what ought, in substance, to be regarded for the purposes of the scheme against the mischief as something in the nature of a single source.

The provisions themselves work in the following fashion.  I have already drawn to attention the fact that expenditure is incurred upon certain events in the nature of services being provided or broadcasts being made; see 95J.  So expenditure incurred at the time identified by 95J is to be treated as exceeding the applicable cap, notwithstanding that number falls below it, if it and any other electoral communication expenditure ‑ a defined term to which I took your Honours this morning ‑ it does not say incurred but presumably that is to be understood ‑ by an affiliated organisation of that party, exceeds the applicable cap so specified for the party, so that a party and its affiliates, but not it has to be said a party and its members, are to be treated as single source.  Now the affiliated organisation is defined in subsection 7:

a body or other organisation –

which is why we do not have individual persons as members caught by this ‑

that is authorised under the rules of that party to appoint delegates to the governing body of that party or to participate in pre‑selection –

Now, it is a definition that will apply however great or small that level of appointed delegates are proportionally, however great or small the importance of the participation in pre‑selection.  The threshold is crossed as soon as the rules of the party have the appointment of any delegates and any kind of participation in pre‑selection.  I stress again, of course, this applies only to affiliated organisations and not to members.

The prohibition is importantly carried out by section 95I because one sees there that this aggregated meeting or exceeding of a cap bites by the unlawfulness of:

a party, group, candidate or third-party campaigner to incur –

again 95J applies ‑

electoral communication expenditure for a State election campaign during the capped expenditure period for the election if it exceeds the applicable cap on electoral communication expenditure.

So that there is a period during which in order to be lawful the party – and I will just use the party for convenience – the party must ensure that the expenditure by it and all affiliated organisations does not exceed the cap.  The first thing to observe, in our submission, is that it is almost impossible to see how this could work in practice without immediately reducing the expectation in the party of how much it would be able to spend.  Unless it made the cavalier assumption that no affiliate would spend anything then the party was going to be able to spend something less than the cap applicable to it.  How much less would be impossible to know because there is no scheme in the statute for preventing an affiliate rendering a party’s conduct unlawful by spending money on its own account.

Now, perhaps none of this would matter if one could say that affiliates are mere simulacra or avatars of the party, but that is plainly not correct, as a matter of history.  In our submission, even if one could assume – and it would be an heroic assumption – that affiliates always support the election of the party candidates, even if one made that assumption, it is utterly absurd to suppose that affiliates and the party will have anything like consensus on what should be said to the public and how it should be said to the public.

KIEFEL J:   Mr Walker, this aspect of your submissions, particularly outline paragraph 15, seems to be addressed mostly to whether or not the legislation is suitable or workable or productive of unfairness in the sense of exposure to potential prosecution.  How do you get from that point to a burden on the freedom in the way you were discussing the burden earlier?

MR WALKER:   First of all, we would respectfully accept the way your Honour characterised the burden of my most recent song, yes, but that is for that stage of the argument that, if there be a burden, moves to the question whether the law is nonetheless appropriate and adapted.  Certainly invidious and to a degree uncontrollable jeopardy of engaging in unlawful conduct will always be an important part of the consideration of what is appropriate in the sense of being reasonable.

KIEFEL J:   We might be having a difficulty with language here.  As you know, I have a problem with reasonably appropriate and adapted.

MR WALKER:   Yes, your Honour.

KIEFEL J:   Do you mean by that the legislation is not suitable?  Is that what you mean by reasonably appropriate and adapted?  Are we talking about something other than a test of proportionality?

MR WALKER:   I am not talking about anything other than a test of proportionality.  This certainly burdens avowedly 95I informed, as it will be, by the aggregation performed by 95G(6) is an overt burdening of conduct at the very heart of political communication because it renders electoral communication expenditure unlawful in certain circumstances, so there is the burden.  Unquestionably, the aggregation is an extra element of burden because it says to a party, and your cap is to be reduced by reference to any expenditures of that kind by your affiliates in the same period, so there is not only the burden which is the capping about which we do not complain; we say that is proportionate.

KIEFEL J:   That is part of the difficulty I am having.  Capping is not contentious but this is an extra level of capping that produces an outcome.

MR WALKER:   Yes, the burden is that the party does not have the simplicity of a cap.  It has the invidiousness of the unknown breaching of the cap by reason of affiliate’s expenditure.

KIEFEL J:   There is a kind of discrimination in the capping, is that part of the picture?

MR WALKER:   Yes, it is discriminating between organisations with affiliates and organisations ‑ ‑ ‑

KIEFEL J:   That would mean it does not have a legitimate end, does it not?

MR WALKER:   I am sorry, maybe this is a linguistic weakness of mine, your Honour.  There is overall a legitimate end of addressing the influence of such expenditure.  I have to put it that neutrally.  The law, subsection (6), in our submission, unlike the other aggregation provisions, is a provision which exceeds or does not serve properly that legitimate end because what it is stopping or what it is controlling is not conduct which represents the mischief at all.  That is, the spending of a party up to the applicable cap is something which, in the absence of affiliates is perfectly acceptable.

KIEFEL J:   How do you test what you call this proportionality analysis?  You do not test it by reasonable necessity or do you say you cannot go – the test is you cannot go any further than capping, that is it, capping generally?

MR WALKER:   Capping does not have, as it were, a constitutional quality, but in the context of this case, given capping and given that it applies generally to parties so that parties may, in the general case, spend up to the cap, it is the discrimination against parties that have affiliates preventing them in the fashion I have pointed out spending up to the cap which places this law as one which does not, in that regard, add anything to its efficacy in controlling excess expenditure on campaigning.

KIEFEL J:   Has no legitimate purpose.  That is what you are saying at the end of paragraph 16, I think.

MR WALKER:   That is right, your Honour.  That provision does not serve the legitimate purpose which other provisions do serve.  Other aggregation provisions, after all, genuinely aggregate those things which need to be aggregated in order to observe substance, not form, but because one cannot say of affiliates and parties that they are in substance just the same thing, all under the same control, all working to the same end, et cetera, and all choosing the same kind of language for their communication or conduct for their political communication – because of that, in our submission, subsection (6) cannot be said to serve any legitimate purpose.

HAYNE J:   Well, can I flesh that out a bit?  Aggregation of the party and the affiliated organisations you say is not founded in the proposition that the party controls the affiliates?

MR WALKER:   No.

HAYNE J:   It may be, it may not be, that some or several affiliates together may influence, even control, a party.

MR WALKER:   Yes, as one could say of a block of members.

HAYNE J:   But to provide, as these provisions do, that the party may not spend more on electoral communication expenditure than the affiliated organisations leave free entails an inversion.

MR WALKER:   That is right.

HAYNE J:   That you have got the control running the wrong way in that establishment.

MR WALKER:   Yes.  Of course, parties without affiliates are pretty much given the tip by this statute that it is in order to spend up to the cap, to incur electoral communication expenditure.  Parties with affiliates – we have called it “chilling”, perhaps it is more threatening even than chilling – have this Damoclean sword day by day; you will not know about it until after the event whether you are unlawful or not.

BELL J:   But in addition to that the party with the affiliates does not have the capacity to convey the communication that it wishes to convey.

MR WALKER:   Exactly so.  Contributing to its cap is what an affiliate has said, something which at head office may cause heart attacks.

CRENNAN J:   Not made any easier either, I suppose, by section 87(4).

MR WALKER:   No, that is right.  There are very difficult questions of assessment contemplated by that provision.

HAYNE J:   Is it necessary to your argument, Mr Walker, that you unpack at any stage this notion of prevention of corruption?

MR WALKER:   No.

HAYNE J:   Because at some point if that were a necessary step in either side’s argument you would come up, would you not, against the trite observation that politics is all about the gaining and exercise of power and influence?

MR WALKER:   Unquestionably. 

HAYNE J:   This is directed to controlling the assertion of influence and power in the political process by persons outside party other than registered electors.

MR WALKER:   Yes.  Bearing in mind the definition of “electoral communication expenditure”, in a respect that is at the very heart of the social behaviour protected by the constitutional immunity, so the social behaviour ‑ ‑ ‑

HAYNE J:   Well, constitutional limitation on legislative power, is it not?

MR WALKER:   Yes, it is, granting an immunity against the operation of legislation infringing it.  Yes, your Honour, yes.

HAYNE J:   The whole of your argument is cast in terms of the freedom, the immunity, et cetera, at some point.  You say these provisions are beyond legislative power?

MR WALKER:   Exactly, exactly so.  Do I need to unpack the notion of anti‑corruption more?  No.  In our submission, it suffices to observe from within this statute, and I fear I am about to repeat myself, I will try to do it briefly, that money itself is not damned by the legislation, so we could put to one side the idea that there should be no money in politics; second, that money for communication is considered to be something which can and should be funded; third, that capping is understood as calculated to have some beneficial effect; fourth, that disclosure and publication is certainly calculated to have considerable effect, and when one thinks about corrupt influence, the notion of disclosure is one which obviously is likely to add to a deal of political communication for a start, and in many cases perhaps to influence the choice of candidate by a voter.

It is, after all, not only disclosure of funds, receipts or expenditures that can come under the rubric of disclosure.  It is also disclosure of dealings thereafter with people to whom, for example, donations are attributed.  An open or partially open ministerial diary is an obvious expedient which would tackle corrupt or undue influence mediated through donation of money more than simply forbidding the thing itself from categories arbitrarily and, we submit, ineffectively chosen for prohibition.  May it please the Court.

FRENCH CJ:   Mr Solicitor.

MR SEXTON: If the Court pleases. Your Honours I think have our outline of argument. I was going to deal with paragraphs 1 to 10 of the outline and my learned friend, Mr Kirk, with paragraphs 11 to 24. So if I take the first of those issues, the applicability of the implied freedom under the Constitution, or not, as we would say, to the legislation in this case, the implied freedom is of course concerned with political government matters that enable electors to exercise a free and informed choice at federal elections and referendums.

There may of course be an overlap between political questions at the federal and State levels that might make it difficult to say in a particular case whether the implied freedom under the Constitution is engaged, but that is not this case, we would say. This case concerns some of the rules governing a State electoral process and so we would say, by definition, an area that is outside the scope of the implied freedom under the Constitution.

HAYNE J:   Why?

MR SEXTON:   Because, your Honour, there is a mutual exclusivity here in the sense that the States cannot legislate for the federal electoral process and we would say, vice versa.

HAYNE J:   Why is there a division of the kind you posit to be drawn since First Uniform Tax Case and beyond?  What State issue is ever agitated in the real world without some reference to “if only we had more funds provided by the Commonwealth”, or is that an unduly cynical approach to life, Mr Solicitor?  Probably.

MR SEXTON:   Your Honour, that of course is true – may be true in the case of discussion of political and government matters.  That is why I say we concede that there may well be an overlap and may be difficult in particular cases to separate those kinds of issues for the reason that to some extent your Honour has just given.  But this is a State constitutional process.

FRENCH CJ:   It is not just about process.  This is process of consequences and the argument you have to meet, is it not, is that the process, if one uses that word in a very loose sense, created by the legislation constrains the amount that people can donate and thus the resources available for the purposes of political communication.  I am just not sure what you are meaning by emphasising the word “process”.

MR SEXTON:   Well, we could call it procedure or rules, your Honour, but could I just put it this way, that this is part of the procedure under which the two Houses of Parliament are chosen for the State.  It is part of the constitutional exercise for the State that goes to the heart of that State Constitution which is why we say it is in a different category from a lot of the cases concerning political discussion where there is an overlap.

HAYNE J:   This goes well beyond whether there shall be a representative in responsible form of government in New South Wales, does it not?  This goes to the manner in which the representative government shall be elected.

MR SEXTON:   Yes, your Honour.

HAYNE J:   In particular, who are participants in the political process associated with election.

MR SEXTON:   Well, your Honour, how the Members of Parliament are chosen.

HAYNE J:   Not just how they are chosen but how debate about their choice may be funded, who may contribute, who may not contribute to those aggregations which constitute registered parties as participants in the particular form of representative government reflected in the State Constitution.

MR SEXTON: Yes, and that is why we say that it is outside the implied freedom under the Commonwealth Constitution. I will come to the State Constitution at some point, but assuming that there are aspects of political discussion that are outside the implied freedom under the Commonwealth Constitution, that there can be State matters that fall within that category, we would say that this is one of them.

KIEFEL J: But the question though, is it not - the first question is not whether one might view the question of State power separately, as you would say, functioning outside the Commonwealth notion of representative government, is not the question established by the authorities whether or not the implied freedom in the Commonwealth Constitution is burdened by the particular State legislation? That is the question. It is not a question of separateness or standing outside. It is whether there is an effect.

MR SEXTON: Yes, your Honour. Well, I think in a sense, what we are saying here is that there is no burden because the implied freedom under the Commonwealth Constitution is not applicable to this kind of State legislation.

FRENCH CJ:   Now, that does not depend upon characterisation of the legislation as establishing some sort of process in relation to regulation.  You still have to face the question of effect in relation to the implied freedom, do you not, whether you label it “process” or any other category?

MR SEXTON:   Well, your Honour, I was trying to avoid the word “process”, but ‑ ‑ ‑

FRENCH CJ:   Well, you used it.

MR SEXTON:   Yes, I know.  I started it.  Except that the electoral system, if I can call it that, we say is in a – there may be other aspects of the operation of the States that would give rise to the same argument, but we would say the electoral system is one that obviously gives rise to that argument.

CRENNAN J:   One of the most significant things about our electoral system is that the political parties operate in the federal sphere as well as in the State sphere.  How do you factor that consideration in in relation to the implied freedom?

MR SEXTON: At some stage, I was just going to address that but perhaps under the inconsistency arguments – but when I said that it would be not open to the States to legislate in relation to federal elections, I mean, we would say that in the same way that it would not be open to the Federal Government to intervene in that system at the State level. This legislation is premised on State elections, that is what it is directed to. As your Honour points out, there was an overlap between the parties, which is one of the phrases used in section 96D. There was an overlap between the parties under our – that is really a product of the fact that we have a federal system, Federation. But we would say that legislation, the intention of it is clear not to interfere with the federal election process.

HAYNE J:   But you are using this phrase “election process” or variance on it in a way which would encompass within it the occurrence of debate about competing political positions, not just compulsory or voluntary voting, compulsory preferential ‑ et cetera, the mechanisms of voting.  You are encompassing in the electoral process not only the method of election but the process of persuading electors, are you not?

MR SEXTON: In a sense, that goes to the question of electoral expenditure under the State legislation not, we would say, to the question of donations but, again, that notion of electoral expenditure is directed to – your Honour, our point is really that while there might be in the context of the State election campaign some discussion of issues that are common at both the federal and the State level that the State electoral system, which is what this legislation is concerned with, is outside the implied freedom under the Constitution.

The authorities assume – I will just mention one of them in a moment, but the authorities assume that there can be, subject to political discussion, that outside the implied freedom the – in Lange – I will not recite Lange, but at 571 in Lange what was said was that:

the Constitution requires “the people” to be able to communicate with each other with respect to matters that could affect their choice in federal elections or constitutional referenda or that could throw light on the performance of [federal] Ministers of State and the conduct of the executive branch of [the federal] government –

and it was accepted at 571 as well that there could be discussion of government or politics at State or Territory level that did not bear on matters at the federal level ‑

The nature and extent of the [implied] freedom is governed by the necessity which requires it –

to use the words that Chief Justice Gleeson and Justice Heydon said in APLA (2005) 224 CLR 322 at paragraph 27. As your Honours say, the textural source of the requirement is “ss 7, 24, 64 and 128 of the [Commonwealth] Constitution”.  This Act regulates electoral funding and expenditure in relation to State elections so it, we would say, very different from a situation where the electors are denied access to information necessary for the exercise of a real choice at a federal election or referendum.

We referred in our written submissions to Melbourne Corporation not to suggest that the principle is directly applicable here but to suggest that in construing the ambit of the implied freedom in its constitutional context – to use the words of Justices Gummow and Hayne in Austin 215 CLR 185 at paragraph 115, that one of the fundamental premises of the Constitution is that there will continue to be State governments separately organised. So there would be an assumption, in our submission, that the implied freedom would not operate to impair, in the same way that federal legislation would not impair, a State’s capacity to exercise those constitutional functions and the electoral system is in many ways at the heart of those functions.

The decision in Lange, of course, was ultimately concerned with the common law defence of qualified privilege but the Court assumed that a State statute governing defamation could be affected by the applied freedom, but that kind of statute is very different from one dealing with a subject such as this one concerning the electoral system of a State as a political entity within the Federation, the election of its members of its Houses of Parliament.

I should say something to your Honours about Muldowney (1996) 186 CLR 352, where the relevant South Australian provision concerned the marking of a ballot paper at a State election. Chief Justice Brennan at 365 to 366 noted that the implied freedom protected “the working of the system of government” of the Commonwealth and not of a State, so that it did not affect:

the method of election of the members of a State Parliament.

Justice Dawson at 370 and Justice Toohey at 374 seemed to suggest that the mode of State elections was outside the ambit of the implied freedom.  Justice Gaudron at 376 took the view that the implied freedom:

extends to matters within the province of the States –

but explained that it:

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.

HAYNE J:   Now, is not that view directed against you?  Her Honour casts the burden of the test on the second aspect of Lange, does she not?

MR SEXTON:   Well, she does accept – at the end there it talks about interfering with the democratic processes of the Commonwealth, which we would say could hardly be true in this case, and the other members of the Court did not consider that question directly.  Can I just refer to two other authorities that – it is true that three members of the Court in Stephens (1994) 182 CLR 211 referred at 232 to the implied freedom extending to?

discussion of political matters relating to government at State level –

That of course would be against the proposition that I am putting.  A majority of the Court expressed the same view in Australian Capital Television (1992) 177 CLR 106 at 142, 168 to 169 and 216 to 217, but we would say that that unqualified view could not stand in light of the decision in Lange, and in view of the more precise scope of the textual as well as the structural underpinning of the implied freedom identified in that case.  In Coleman v Power (2004) 220 CLR 1, a number of members of the Court assumed that some connection with federal matters was necessary for the operation of the implied freedom, see Justice McHugh at 70, paragraph 78; Justices Gummow and Hayne at paragraph 197; Justice Kirby at paragraph 232.

Your Honours, I was going to move to the question of an implied freedom under the Constitution Act (NSW). The Constitution Act (NSW), your Honours, some parts of the Act are in that set of legislation that is annexed to the plaintiff’s submissions, but I am not sure that your Honours need to – perhaps in the case of two of the sections your Honours do need to look at them.

The Act assumes the existence of two Houses of Parliament in Part 2, and elections at regular intervals for both Houses in Part 3. The existence of Legislative Council and its method of election, its powers, cannot be altered by simple legislation that requires a referendum in addition, section 7A. Similarly entrenched in the Legislative Assembly is its method of election and its duration by section 7B.

One of the matters, we would say, arising out of Lange is that the implied freedom in the case of the Commonwealth Constitution has its origins in the text and the structure of the Constitution, and we would say there is nothing in the text and structure of the Constitution Act (NSW) to suggest an implied freedom of political communication.

CRENNAN J:   But there is nothing, is there, in it, or do you point to something, that suggests it would be amended in such a way as to abolish representative democracy as that is understood?

MR SEXTON: I am happy to agree with your Honour that there are some assumptions there, for example, the existence of the two Houses of Parliament, elections at regular intervals, there is an entrenched provision about approximate equality of electorates, for example. I am not sure whether the scope of the franchise is perhaps, unlike the Commonwealth Constitution, something that is to be taken from the Constitution Act. So we do not say, your Honour, that there are no – call them implications or assumptions that are made of that rather basic kind, but the question is whether there is an equivalent to the implied freedom of communication under the Commonwealth Constitution and whether there would be an implication that is, in a sense, of the same scope. There is, of course, no equivalent of sections 7 and 24 in the Constitution Act (NSW), but your Honour says some assumptions can be drawn from it.

HAYNE J:   Well, section 28 would surely bear upon it, would it not, and the anti‑gerrymander provision.

MR SEXTON:   Yes, your Honour.  I said approximate.  I think it is a 10 per cent tolerance between electorate ‑ ‑ ‑

HAYNE J:   But the premise from which that is proceeding is, is it not, general, if not universal suffrage?

MR SEXTON:   I am not suggesting that there is any possibility of, in a practical sense, of any change to that system, but at one stage of course there was a more limited form of franchise, and I am not sure whether that is something that emerges as clearly from the Constitution Act (NSW).

Can I say that even - so that, I mean one question would be that, how far did those kinds of assumptions go under the NSW Act itself? In other words, why would one assume that there would be an implied freedom in exactly the same terms as there is under the Commonwealth Constitution? It may be, for example, that there would be an implication that would be contravened by some extreme forms of legislation, for example, a total ban on political meetings during the conduct of an election campaign. That might certainly raise a question about assumptions under the Constitution but the question from our point of view is why would one assume the existence of an implied freedom in substantially the same terms as there is under the Commonwealth Constitution.

I think, as Justice Gummow noted in McGinty (1996) 186 CLR 140 at his Honour at 291, that the doctrine of representative government at State level does not have to correspond in every respect to its federal counterpart. I should draw your Honours ‑ ‑ ‑

FRENCH CJ:   What does that say that is relevant to the drawing or not drawing of the implication ‑ ‑ ‑

MR SEXTON:   Well, only that it does not, that it would not necessarily be the same.

FRENCH CJ:   No.  The general rubric of representative democracy was in place in the States ‑ ‑ ‑

MR SEXTON:   Yes.

FRENCH CJ:   ‑ ‑ ‑ at the time of Federation.

MR SEXTON: Yes, well, as I say, I agree that some basic assumptions can be drawn but the question is whether one would draw the same kind of implied freedom as exists under the Commonwealth Constitution, given that the Constitution Act (NSW) is a different document and a different kind of document really. I should draw your Honours’ attention to the fact that in Stephens at 232 to 233 and 257, a majority of the Court considered that an implied freedom of communication existed in the Constitution Act 1889 (WA), although it was not the subject of argument in the case and there was one provision of that legislation that restricted the capacity of the legislature to enact legislation, providing that either House could be composed of members other than members chosen directly by the people, to use approximately the same words as the Commonwealth Constitution.

In Muldowney an implied freedom of communication in the South Australian Constitution equivalent to the federal freedom was conceded, although this concession was not considered by the members of the Court, except for Justice Dawson who appeared to reject it at page 370, and the other members of the Court did not have to consider it.  In the context of the Constitution Act (NSW) I should say something about my learned friend’s proposition that, in a sense, I think, the implied freedom or an implied freedom of communication, which I assume he would say to be of the same scope as the Commonwealth implied freedom, is entrenched in the Constitution Act (NSW) by sections 7A and 7B. There may be, it seems to us, to be a problem about the entrenchment of an implication. There is, of course, no reference to such an implied freedom in any of the categories of legislation set out in section 7A and 7B that are not to be enacted in the absence of a referendum following their passage through the Parliament.

In any event, we would say that the relevant provisions of the electoral funding law, that is, those that prohibit the acceptance of certain political donations and identify a relationship between political parties and affiliated organisations for the purpose of aggregating electoral communication expenditure, that those provisions do not relate to the Constitution powers or procedures of the New South Wales Parliament in the sense that that is referred to in section 6 of the Australia Act.  It can be noted in Marquet (2003) 217 CLR 545 at paragraph 77 the majority said that not every matter that touched the election of members of Parliament is a matter affecting the Parliament’s Constitution. In our submission, even if one were to draw that kind of implication that it could be altered by the legislation that has been enacted in this case.

Your Honours, I was going to move to questions of 109 and inconsistency and perhaps if I could just start by making some general comments about the interaction which is really the question that Justice Crennan raised, the interaction between federal and State entities or parties under the Australian political system. Your Honours will know from my learned friend’s submissions that section 96D employs a number of terms that are expressly confined to the State electoral exercise, that is, elected member, group, candidate, third‑party campaigner. Now, the one term that is not, on its face, confined in that way is the term “party”. It is defined in section 4(1) but in a way that might extend to some federal entities that have as one of their objects or activities the promotion of the election of endorsed candidates to the New South Wales Parliament.

But we would say that the text, the context, the structure of Part 6 of the Act indicates an intention that its provisions generally, and section 96D in particular, were not intended to operate in relation to political donations to a party, whether at the State or the federal level, that are accepted for use in funding activities related to federal election campaigns. The Act as a whole is concerned with the funding arrangements for State elections, reflected in its long title, and the scheme of the Act sets up an election funding authority in Part 2 whose functions in section 23 are to deal with applications for registration under Part 4, claims for payment under Part 5, 6A, disclosures and caps in relation to political donations and electoral expenditure under Part 6.

Your Honours, there are a number of provisions in Part 6 that support the construction of the legislation that we have just put forward.  Your Honours have been taken to some of these sections; I deal with them briefly.  Section 83 states that Part 6 applies in relation to:

(a)State elections and elected members of Parliament, and

(b)local government elections and elected members of councils (other than Divisions 2A and 2B).

Section 87(3) provides that:

Electoral expenditure (and electoral communication expenditure) does not include:

(a)expenditure incurred substantially in respect of an election of members to a Parliament other than the NSW Parliament -

Section 95AA(2) states that references in Division 2A, that is, to caps on political donations, to elections relate to a State election and to elected members, candidates or other persons, relate to persons “in connection with a State election”, and section 95B(2) provides that:

It is not unlawful for a person to accept a political donation that exceeds the applicable cap if the donation (or that part of the donation that exceeds the applicable cap) is to be paid into (or held as an asset of) an account kept exclusively for the purposes of –

amongst other things –

federal or local government election campaigns.

Similarly, section 95E(2) provides that references in Division 2B deals with caps on election communication expenditure, that references there to elections are to State elections and to candidates or other persons and applies to such persons in connection with a State election.

CRENNAN J:   Does that mean if the caps are exceeded that it would be open for the donee to elect to treat the money as being for federal purposes rather than State purposes?

MR SEXTON:   I think, your Honour, that there are provisions here in a sense that it can be paid into an account for the specific purpose of a federal election.  It may be that, even in the absence of that provision, if a donation was made and accepted on the basis that that was what it was to be used for, that that would be outside the provision of the legislation.

CRENNAN J:   But if it was accepted for the purposes of the State election and then it turned out the cap was exceeded could it be reallocated as money for federal purposes?

MR SEXTON: I think the legislation is premised on acceptance - the time of acceptance. Well, section 96D, which talks about donations, is premised on acceptance and I think that runs through Part 6. Division 3 of Part 6 requires the creation of a separate State campaign account for parties that must be used for any electoral expenditure for a State election campaign and limits the funds, including political donations that may be paid into such an account, while enabling political donations to a party to be used generally:

for the objects and activities of the party, including the administration of the party and community activities.

That is in section 96(1), and section 96E prohibitions indirect campaign contributions in the form of office assistance or other equipment for which no or inadequate consideration is paid if provided “for use solely or substantially for election campaign purposes”. As your Honours will have seen, my learned friend referred to clause 34A of the Election Funding, Expenditure and Disclosures Regulation 2009 that excludes the making, acceptance or soliciting of a political donation from the operation of section 96D and section 96GA where it is to be paid into or held as an asset of an account kept exclusively for the purposes of a federal election campaign.

As to the acceptance of donations by federal or interstate State bodies, parties outside New South Wales, there is no reason why Part 6 would have that extraterritorial operation and section 95D(5) specifically excludes from the operation of section 96D(1) dispositions of property from a federal or other State branch to the New South Wales branch of a party, or between associated parties which are caught by section 85(3A), and so fall within the definition of a political donation in section 85, although those transfers would be subject to the caps in section 95A by reason of section 95B.

Even if there is a problem, which we say there is not, about that construction of the legislation in relation to the text and structure of Part 6, the effect of section 31 of the Interpretation Act 1987 (NSW) would require, we would say, the reading down of, for example, section 96D so as to confine its operation to State elections on the basis that it would be beyond the powers of the New South Wales Parliament to legislate in relation to federal elections and their campaigns and associated events. Now, can I move from Part 6 ‑ ‑ ‑

KEANE J:   Just before you do, Mr Solicitor, can I just ask a question going back to the implied limitation on federal power or the implied limitation rising from the Federal Constitution?  Consistently with that limitation on the powers of the Commonwealth and the States, could the State of New South Wales abolish federal political parties operating in New South Wales or outlaw them?

MR SEXTON:   We would say not, your Honour.

KEANE J:   Could it abolish State branches of federal parties operating in New South Wales?

MR SEXTON:   Again, I think the answer is no to that, your Honour.

KEANE J:   Would it be also the case that it could not abolish some political parties in New South Wales?

MR SEXTON:   Some but not others ‑ ‑ ‑

KEANE J:   Some but not others?

MR SEXTON:   I think in the sense that because of the interaction between politics at a State and federal level in Australia, when your Honour talks before about federal bodies that the truth is that all the political parties including the State branches and the parties operating in the States at times take part, I think, almost inclusively, in federal election campaigns.

KEANE J:   So it cannot abolish them – it cannot abolish some but not others.  Can it burden some but not others?

MR SEXTON:   In relation to State elections in the same way that this legislation deals with State elections, it can regulate them and their activities.

KEANE J:   Can it select those parties that have affiliates for special treatment in terms of burdens?

MR SEXTON:   As part of that regulation because the parties themselves may differ, it may be that legislation operates differently in relation to some parties as opposed to others.

KEANE J:   If one goes back to the ACTV Case which was the fons et origo of all this, Chief Justice Mason accepted that there could be laws that level the playing field, as it were, by silencing those who because they have more money get to speak more loudly, but he struck the law down – he and the majority struck the law down in that case because it discriminated against some speakers, some who would engage in political speech.

MR SEXTON:   I think the problem or one of the problems in that case was that the impact of the law on new parties or parties that were not yet in existence as opposed to the established parties - it is not a problem with this particular legislation of the public funding.  There is a threshold in relation to the public funding but it is open to parties that are engaged in the elections for the first time and there are other funding provisions in relation to administration and policy development that are outside the electoral system as well. 

KEANE J:   Thank you.

MR SEXTON:   In relation to section 109, your Honours, can I deal with the specific provisions?  Part XX of the Commonwealth Electoral Act – again, these are part of the bundle that goes with the plaintiff’s submissions, but I will try and deal with them. My learned friend has taken your Honours to these. Part XX deals with election funding and financial disclosure. It is concerned with elections for the House of Representatives and the Senate; see section 287(1), section 303. I have already put the argument that section 96D is solely concerned with State elections, and I will not go over that again.

Division 4 of the Commonwealth Act is concerned with the disclosure of donations to federal candidates, and essentially it operates on a figure of $10,000, although that is indexed so that that amount will not be exactly what it is in the print that your Honours have of the legislation, and returns by political parties and by donors in relation to amounts of that quantity. Division 5A deals with annual returns by the registered parties and some other persons. Those returns by the parties require disclosure of the total amounts received and paid by a party during the financial year, and outstanding debts at the end of the financial year. A return must also set out particulars in relation to amounts received over $10,000; section 314AB, 314AC. Other persons must provide a return to relation to political expenditure over $10,000; section 314AEB.

None of these provisions, we say, expressly or impliedly confers a positive permission to make a political donation, nor do they confer an entitlement to receive gifts from any source or for any purpose whatever.  The authorities indicate the question of inconsistency is to be determined by the intention of the Commonwealth Parliament.  There is no problem here about complying with both sets of legislation and the Commonwealth legislation discloses no intention to deal with State elections, nor is any intention disclosed to deal with the amount of political donations or the kind of person who might be able to make those donations.

Could I just mention one case to your Honours, which is Commercial Radio Coffs Harbour Ltd v Fuller (1986) 161 CLR 47, where the applicant had a licence granted under federal legislation to operate a radio transmitter to certain specifications. This was held not, however, to exempt the applicant from the requirements of the New South Wales environmental planning legislation which required approval for structures of a certain height. Justices Wilson, Deane and Dawson at 56 quoted Justice Mason in Ansett Transport Industries as having stated the relevant principle that where Commonwealth law grants a permission by way of positive authority:

The Commonwealth legislative intention which sustains the conclusion . . . also sustains the conclusion that the positive authority was to take effect to the exclusion of any other law.

But their Honours considered at 57 to 58 that the Commonwealth legislation –

does not purport to lay down the whole legislative framework within which the activity of broadcasting is to be carried on . . . [but] to operate within the setting of other laws with which the grantee of a licence will be required to comply.

I should add that if that were not the correct construction of the Commonwealth legislation and it did intend to lay down the whole legislative framework for the making of political donations at all levels of government, there would be a real question again under Melbourne Corporation as to whether that legislation could deal with State elections in that way, but we say that that is not the construction that would be adopted in this case.  Now, your Honours, can I move to section 327 of the Commonwealth Electoral Act?  Section 327(1) prohibits a person from hindering or interfering:

with the free exercise or performance . . . of any political right or duty that is relevant to an election under this Act.

Section 327(2) prohibits discrimination against a person:

on the ground of the making . . . of a donation to a political party . . . [or] to a candidate in an election or by‑election or to a group –

by means of certain specified conduct.  Now, in relation to section 327(1) we say there is no right or duty relevant to a federal election that is hindered or interfered with in this case.  In any event, the Court has consistently held that the implied freedom does not confer any personal right on any individual, see, for example, Lange at 560, and as already submitted, section 96D does not operate on federal elections, and I have already referred to the regulation that excludes the making, acceptance or solicitation of a political donation to be paid into an account kept for the purposes of federal election campaigns.

Now, in relation to section 327(2), any impact by section 96D on the plaintiffs does not occur because of the making of a donation to a political party, so the relevant ground is not made out. In addition, it could not be said that a prohibition or acceptance or making of a political donation falls with any of the specified conduct in section 327(2)(c) or (d). The final one of those is the notion of “any other detriment”, which we say would take its meaning from the kinds of detriment identified in the earlier categories. There is a reference, of course, to State branches of political parties in 327(2), but, again, if that were legislation concerning State elections there would be a question there of, we would say, Commonwealth power because of its impact on those State elections, which is what this particular legislation in this case is concerned with.

It might be noted, I suppose, as well that both 327(1) and (2) are directed to persons which is probably not apt to describe the action of the New South Wales Parliament in passing this legislation so that would simply be another way in which we would say that those provisions would not be applicable to give rise to a problem under section 109 of the Constitution to result in any form of inconsistency between the two sets of legislation.

Now, the final question in relation to inconsistency is the one raised by the letter from the Court concerning the Fair Work Act (Cth) and the Fair Work (Registered Organisations) Act (Cth). As your Honours appreciate, it is the AMWU that is registered as an association of employees under section 19 of the Registered Organisations Act. As my learned friend, Mr Walker, has said, section 149 is a provision dealing with the steps to be observed in the making of a donation exceeding $1,000 by the organisation, and section 164 is a provision dealing with the enforcement of its rules, and rule 21 of the AMWU Rules have objects which include political activity.

The letter from the Court referred to Williams v Hursey (1959) 103 CLR 30 where the chief argument advanced by the appellants in that case was that the trade union in question did not have the power because of State legislation under which it was not registered, as it happens, to apply its funds to a purpose of a political nature and Justice Fullager, with whom Chief Justice Dixon and Justice Kitto agreed, made some references to the status of a registered organisation under what was then the Conciliation and Arbitration Act 1904. The comments are really at pages ‑ it is to similar effect at pages 61, 68, 69, 66 that it would not be open for a State statute to, as it were, interfere with the powers and functions of an organisation that was registered under the federal statute.

Well, we would say here that the powers of the AMWU, which are in a general sense bestowed by the Commonwealth legislation, are not qualified in any way by the provisions of the New South Wales legislation. It may well be that the way in which those powers are exercised are affected, for example, by section 96D, but the constitution of the body itself is not affected by the New South Wales legislation but having said that, it does not seem to us that it could be right and we would not assume that Justice Fullagar was intending to suggest that a registered organisation would be immune in its activities from all State law in relation to an exercise of its powers under its rules. For example, the rules might provide that a union could acquire land and build its headquarters on that site but it

would not, we would say, be immune from seeking planning approval and observing environmental standards that were required under State legislation. 

There was a brief reference to this question in cases AMIEUvMudginberri Station (No 2) (1985) 9 FCR 194 where at 211 Justices Smithers and Northrop said in the course of considering the position of organisations still then registered under the Conciliation and Arbitration Act 1904, they said nevertheless, organisations as corporate bodies are subject to the law of the land except where expressly or by necessary implication that law is excluded. That case when on appeal to this Court. The appeal was dismissed without any discussion of this particular question. I should just add to that ‑ ‑ ‑

HAYNE J:   Well, these matters not being raised by Mr Walker, Mr Solicitor, it seems unprofitable, at least to my mind, to examine whether they give any proper credence, recognition that the industrial and political objects of organised labour in this country have been intertwined for a very long time but these are matters which are not part of the issues before us.

MR SEXTON:   Well, your Honour, we thought that the question had been raised and we would deal with it briefly.  Can I just add that there is some reference to the operation of general laws at the State level on Commonwealth bodies.  There are quite a number of references:  I will not take your Honours to them, but in the Residential Tenancies Tribunal Case (1997) 190 CLR 410, there are quite a number of references almost all to the effect that in that situation that the general law that the federal ‑ ‑ ‑

HAYNE J:   All that proceeds on an assumption that industrial and political aims of organisations of this kind can be put into watertight compartments.  That may or may not be a debatable proposition.  We are not to debate it or decide it.

MR SEXTON:   We have noted that, your Honour, but – so I will not ‑ at any rate, that was what we wanted to say about the matter that had been raised by the letter from the Court.  Now, unless there is any other matters in relation to my submissions which deal with, as I said, those paragraphs 1 to 10 of the outline, I was going to ask Mr Kirk to deal with the remainder of those matters.

FRENCH CJ:   Yes, the Court will sit through to 4.30.

MR KIRK: If it please your Honours, may I say something to begin with about how I propose to structure my oral submissions which will, of course, reflect the three page outline but can I still put them in a little context. My focus is on the freedom of political communication arguments with respect to, and I will deal with first, section 96D, then 95G(6). I am, of course, doing so in the alternative to the submissions put by my learned leader as to, first, the Commonwealth freedom having no application to the issues here and secondly, there is no analogous freedom emerging from the State Constitution Act.

Can I also acknowledge to begin with that there are a series of overlapping strands ‑ I think at least five ‑ of legal argument in my learned friend’s case? In particular, first, the relevance and value of communication by non‑electors; second, discrimination, if I can use that term, against corporations and perhaps others; third, necessity issues; fourth, issues relating to undue burden on the constitutionally proscribed system of government and fifth, freedom of association. I will get to these. I say that, in a sense, by way of prophylactic plea. But what I want to focus on first, if I may, reflecting what is in paragraphs 11 to 13 of our outline, and deal with fairly carefully is, first, the legal and then the practical burden or effect of section 96D.

With great respect to my learned friend, Mr Walker, one might have understood from his address this morning that section 96D was directed to restricting foreign guests, warning of overseas perils, preventing churches or the RSL from being heard or focused on targeting the ALP. It does nothing of the sort, in our respectful submission. It is one of a number of provisions which limits and regulates the acceptance of political donations. Without taking your Honours to it, can I note in paragraph 13 of our written submissions, we have referred to some of the other provisions. But can I focus immediately and carefully on the terms of section 96D, if I could take your Honours back to it, which is found at page 77 of the legislative material bundle that was provided by the plaintiffs. The key prohibition is, of course, section 96D(1).

Now, what the subsection does is make unlawful and, in effect, prohibit the acceptance of political donations by ‑ and there is then a range of subjects of the law ‑ parties, elected members, groups, candidates or third‑party campaigners unless the qualification is met, namely, that it is from an individual who is enrolled on one of the three rolls.  The prohibition has effect with respect to a range of persons, as was acknowledged this morning.  In writing, at least, my learned friends focused their attack on the restriction with respect to bodies corporate and, in particular, unions.  My learned friend wandered a little wider this morning and I will come back to deal with that, but can I come back to the things which are regulated here in terms of acceptance of donations?

Your Honour Justice Hayne asked my learned friend, Mr Walker – and I think it was with respect to this section – whether there was an unexpressed premise that the sole means of aggregated political association was by parties. The answer to that question, in our respectful submission, is no, and can I seek to develop that a little? First, can I explain or seek to explain briefly what a group is, because it is not in a sense self‑evident. That is one of the targets of section 96D in terms of who is regulated from accepting donations. If your Honours go to the definition provision in section 4, relevantly at page 14 using the small numbers at the bottom of the legislative bundle ‑ your Honours will see that two‑thirds of the way down the page – it means:

in relation to State elections ‑ a group of candidates, or part of a group of candidates, for a periodic Council election –

and then there is a somewhat similar definition with respect to local government elections.  Now, if I can explain that in direct terms, a group in essence relates to what goes above the line in the Legislative Council ballot.  In New South Wales, as federally, although it works a little differently, we have above the line voting.  One of the requirements of being a group is not that you are a party.  You can actually have a group of independents, for example, who choose to aggregate together.  One of the requirements of being a group is that there be at least 15 in the list.  That reflects the fact that to be a valid Legislative Council ballot you need to number 1 to 15, either actually or by proxy, by putting “1” above the line in the group.

I will not take your Honours to these provisions because I regret to say they are not on our list of authorities, but can I give your Honours references?  First, there is a brief reference to groups in the sense I have just explained and this is actually in the legislative materials.  In Schedule 6 to the Constitution Act, clause 3 – I am sorry, your Honours, it is not jumping out at me, but I can actually read out clause 3 which says:

For the purpose of a periodic Council election, 2 or more candidates may, in the manner provided by law, be included in a group in such order as may be determined by them.

CRENNAN J:   It is in the Sixth Schedule.

MR KIRK:   Thank you, your Honour, page 171 of the legislative bundle of materials.  Sorry for not having that marked.  The real work in terms of explaining what a group is for legislative purposes is set out in the Parliamentary Electorates and Elections Act 1912. I will just give your Honours references ‑ section 81C and also sections 129EA and EB, and it is based on those sections that I have just given your Honours the explanation that I have given. So that is what a group is. As to what an elected member is, that relevantly at State level is a member of either House of the State Parliament. A candidate is a candidate at State level for either House of the State Parliament. This also applies, of course, to local government.

“A party”, if I can deal now with that – your Honour Justice Hayne asked if that meant a registered party.  It does not.  If one goes to section 4, back at page 15 of the legislative materials, I think my friend, Mr Walker, showed your Honours this definition, and that is to be distinguished from “registered party”, which is also defined on the next page as being:

a party registered under Part 4A of the Parliamentary Electorates and Elections Act –

The significance of that is that if one goes back to the definition of “party” it is:

a body or organisation, incorporated or unincorporated, having as one of its objects or activities the promotion of the election to Parliament or a local council of a candidate or candidates endorsed by it or a body or organisation of which it forms a part.

In other words, the very definition of “party” is some group putting up candidates.

FRENCH CJ:   They have to be representatives of a party, do they not - if one looks at the definition of “endorsed” or is that just a limb of it?

MR KIRK:   Yes, yes, that follows.

CRENNAN J:   What about third‑party campaigner?

MR KIRK: Yes, and that is the other key point, with respect to your Honour. The Act also recognises, not only in section 96D, but throughout a series of provisions, some of which I will take your Honour to, that there is this other notion of other people - they may be individuals or they may be an entity of any kind who wish to campaign, and the relevant definition is simply that they have incurred electoral communication expenditure, which, I hope you will forgive me, I am going to call it “ECE” because I am going to say it a few times, of over $2,000 in a capped period.

CRENNAN J:   I notice there seemed to be a system for them to be registered, but are they required to be registered?

MR KIRK:   There are certain consequences if they are not registered, including, in relation to the expenditure cap – I do not think they are required to be registered, I will check that overnight and correct myself if I am wrong, your Honour.  What that illustrates is not that parties ‑ ‑ ‑

CRENNAN J:   Division 2A does have a register of third‑party campaigners.

MR KIRK: Yes, there is certainly a register kept by the authority where the authority is the electoral commissioner and a representative of the two main sides. But it is not as though the Act is seeking to give some special benefit or boon to registered parties, at least not by reference to section 96D. Rather section 96D imposes a prohibition on donations from people who are not individuals on one of the three rolls. For all relevant type of people the Parliament has in a sense sought to cover the field of those who participate in political activity, whether it is parties, whether it is registered parties, whether it is groups of independents, for example, whether it is independents, whether it is candidates or members, whether it is third‑party campaigners. They are on the field of political battle. They are all caught by section 96D and they are all regulated in a series of other ways.

BELL J:   To what end, the legislative object of the provision?

MR KIRK:   Can I come back to that, your Honour, because that is quite a large and important question and I want to, in a sense, build up to it if I may.

BELL J:   Yes.

MR KIRK: That is it. I am obviously not going to depart from what we have pleaded and referred to in our submissions on that point, but I will address it at more length. What the section actually does, to come back to 96D, is to restrict acceptance of a gift of money or other property or services other than volunteer labour. Without taking your Honours through that, that follows from the definition of “political donation” in section 85; the definition of “gift” in section 84(1) and I note your Honours may wish to look down the track also at section 96E. What section 96D does not restrict in any way is any form of communication, leaving aside for the moment whatever communicative value there is in a donation itself and I will come to that almost immediately, but apart from that there is no restriction whatsoever on communication. To talk about foreign speakers or global warming or the RSL has nothing to do with section 96D.

KIEFEL J:   You mean no direct restriction?

MR KIRK: No restriction at all, actually, I think, your Honour. My learned friends put a direct burden and an indirect burden, and I will come to that after making just one more point, if I may. Section 96D also does not impose any restriction whatsoever on expenditure. There are other provisions which do that, and I am going to take your Honours through those quickly to put it all in context, because section 96D is just one cog in a fairly complex piece of statutory machinery. But all it does is prohibit donations in the sense defined from anyone who is not on one of the three rolls.

Now, my learned friends identify a claimed direct burden and a claimed indirect burden and in oral address my learned friend gave emphasis to the claimed direct burden this morning, and I will deal with that first.  In our respectful submission, there is no direct burden, at least none of any significance.  May I seek to explain why we put that submission? 

Making a donation is fundamentally a provision of property, including money, or services other than volunteer labour, that being what is prohibited by section 96D. The only communication necessarily involved in providing that property, money or service, the only necessary communication, is to the recipient - I am doing this for you, I am giving this to you.

If the donor or the recipient chooses to publicise that, that requires a further act of communication.  It requires a further communicative act.  You need words or some other form of action.  The plaintiffs, in their written submissions, rely on the State’s compulsory disclosure regime, but that only goes part of the way in that the State requires disclosure of the name of the donor if the donation is above $1,000, and if I can give your Honours quick references - see section 95(1), the definition of a reportable political donation at section 86, and see also section 92(2) about what needs to be disclosed - and that needs to be disclosed only within eight weeks of the end of the financial year, commonly, well after the donation.

It is disclosed in something approaching an Excel spreadsheet.  It is not exactly front page news material. 

In practical terms, if the donation is to be used as a form of political communication it needs a further act of communication by either the donor or the recipient. There is nothing in section 96D or in the Act which restricts speech by corporations or their representatives or any other unenrolled person to talk about having made such a donation or to talk about what they would have said but for the fact they had not been permitted to make the donation.

Furthermore, merely to disclose the fact of payment – let us say a press release is put out saying, “I, Smith Pty Ltd have paid $2000 to Jones’ party”.  That says nothing further – if that is the extent of the communication – than that an entity which has no right to vote wanted to support the recipients to the value of X dollars.  It says nothing, for example, about whether that was motivated by a concern about State issues or federal ones.  It says nothing about the motivation or reason for the donation as to whether ‑ ‑ ‑

FRENCH CJ:   Well, I suppose we can thrash this horse beyond the point of death, but ‑ ‑ ‑

MR KIRK:   Yes, well, it says nothing.

FRENCH CJ:   What about the question of the effect of restriction on donations upon the funds available, resources available, for the purposes of political communication?

MR KIRK:   Yes.  That is the indirect burden and to be clear we are not disputing that there is more than inconsequential indirect burden.

FRENCH CJ:   Well, is that a sufficient burden – added to the other arguments put by your leader – to engage in implied freedom?

MR KIRK:   Yes, but the reason I am seeking to emphasise these points is that it is not actually so much for first limb analysis as for second limb analysis because it is critical, in our respectful submission, to understand the nature, the significance, the practical effect of the burden in order to engage in second limb analysis, proportionality and so forth.  If I can just finish briefly with the direct burden and then I will come to the indirect burden. 

My learned friends this morning sought to give much emphasis to the slogan about putting your money where your mouth is.  Even the slogan, with respect, is revealing because it talks about backing up what you have said with your money.  It still requires a speech act.  In terms of what matters to electors about informing their choice, the fact that Smith Pty Ltd has paid $2,000 to Jones’ party does not say - and even if it says because we support their economic policies ‑ ‑ ‑

FRENCH CJ:   I do not want to cut you off, but I think it is a fairly plain argument and I think you have put it.  I think we understand the argument.

MR KIRK:   If it please the Court.  Can I note for completeness that similar arguments were accepted by the United States Supreme Court, for what that is worth, in Buckley v Valeo (1976) 424 US 1 at pages 20 to 21, which brings me to the indirect burden. Now, to be clear about this, because again, with respect, it did not come out clearly this morning perhaps, this burden, such as it is, is a burden on the recipients for the reason your Honour the Chief Justice gave, because it restricts the amount of money potentially that the recipient may have to speak. It is not a burden on the donor. It is a burden on the recipient. That may cut both ways for me, I accept, I am just making clear what the burden is.

What 96D does is close off a source of funding and a significant source of funding, being donations from non‑electors.  There is no direct evidence before the Court as to what effect that will have in practice in terms of the extent to which it can be replaced but we accept that it has a potential effect.  It was intended to have effect.  It was intended to have significant effect ‑ ‑ ‑

CRENNAN J:   You would have to read 96D with 95A because there is the prohibition on the donations other than by individuals, and then in relation to permissible donations, there are limits ‑ ‑ ‑

MR KIRK:   On expenditure, on the donations?

CRENNAN J:   On the donation itself – separate issue from the expenditure issue.

MR KIRK:   Exactly so.  Your Honour pre‑empts me, with great respect.  The effect of the 96D prohibition, in terms of what it actually does in practice out there in the real world in New South Wales, has to be seen in the context of first, the donation caps; second, the expenditure caps or “ECE” caps, electoral communications expenditure; third, public funding, and can I seek to put each of those in context in turn, starting with the donation caps.

HAYNE J:   Well, before you come to that, Mr Kirk, give us a glimpse of where you are going.  There are caps, there is public funding; all this is on the premise that there is more than an inconsequential indirect burden.  What is the source of the money? What is the importance of the source of the funds?

MR KIRK:   With respect, that is, we agree, of no importance.

HAYNE J:   Then why do we have the law?  What has the law doing in 96D?

MR KIRK:   Sorry, I need to qualify my answer.  Perhaps I misunderstood.

HAYNE J:   Just a little I would have thought.

MR KIRK:   Yes.  My learned friend, Mr Walker, was putting a submission this morning that it does matter where you got the money from.  In terms of that submission, we say it does not.  Political parties do not want money for romantic reasons because of where it came from.  They want it to spend.  They want it to persuade.  They want it to advertise.

HAYNE J:   They have a cap?

MR KIRK:   They have a cap.

HAYNE J:   Yes, so why 96D?  What is 96D on about?  Just give me a glimpse of what you say you are arguing.

MR KIRK: All right. Section 96D is part of a series of provisions which seeks to regulate and restrict donations because of significant and legitimate concerns about corruption, but perhaps more significantly, undue influence which arises because when political parties need money to advertise where that is the plain perception, right or wrong, that they need to advertise to compete – they need the money to do it – there is an ever driving need to raise more and more money, they become necessarily at least capable of being perceived to be in debt to those who pay. To quote the title of the report which was the subject of discussion in the Political Advertising Case, “He who pays the piper calls the tune”, whether in actuality ‑ ‑ ‑

KIEFEL J:   But fundamentally, given the other and pre‑existing provisions relating to public registration of donations caps, what is the legislative purpose to 96D?

MR KIRK:   Your Honour, there are a series of ways of seeking to deal with that large issue that I have raised ‑ ‑ ‑

KIEFEL J:   This is just another method, is it?

MR KIRK:   It is one of a range of methods ‑ ‑ ‑

HAYNE J:   Well, they are just words, Mr Kirk.  You are going to have put more than a little flesh on these bones at some point.

MR KIRK:   I will, your Honour.

FRENCH CJ:   At paragraph 67 of the written submissions you tie its purposes – that is of 96D – to its terms so that if one were to say what is the object of this provision, the object of the provision is to stop that which it prohibits and then you make, what I can best describe as a contextual link to wider purposes of the legislation as a whole.

MR KIRK:   Yes.

HAYNE J:   By uttering magic phrases like “corruption”.  Now, at some point you are going to have to unpack it.

MR KIRK:   Yes.  Well, your Honour asked for a taste of the purpose and I am proposing to unpack it.  I am still seeking to actually put it in context.  Your Honour also asked, and let me give a taste here too if I may, why does it matter about donation caps, expenditure caps and funding and let me seek to cut to the chase and then come back to the build up because the practical effect of 96D is very limited.  It is very limited first by reference to the donation caps because much of the work of restriction, much of the heavy lifting of restriction is done by the donation caps and I will seek to show that by reference to a few figures.

FRENCH CJ:   Well, perhaps now we have had the amuse‑bouche we will look forward to the main course tomorrow.  How long do you expect to be, Mr Kirk?

MR KIRK:   I would think about an hour and a half, your Honour.

FRENCH CJ:   All right.  The Court will adjourn until 10.15.

AT 4.27PM THE MATTER WAS ADOURNED
UNTIL WEDNESDAY, 6 NOVEMBER 2013