Williams v Commonwealth of Australia & Ors

[2014] HCATrans 93

[2014] HCATrans 093

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S154 of 2013

B e t w e e n -

RONALD WILLIAMS

Plaintiff

and

COMMONWEALTH OF AUSTRALIA

First Respondent

MINISTER FOR EDUCATION

Second Respondent

SCRIPTURE UNION QUEENSLAND

Third Respondent

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

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON WEDNESDAY, 7 MAY 2014, AT 10.20 AM

(Continued from 6/05/14)

Copyright in the High Court of Australia

____________________

FRENCH CJ:  Mr Solicitor.

MR GLEESON:   Good morning, your Honours.  Your Honours will see from our outline that I propose to make some remarks at the outset about the nature of the Program and funding agreement under challenge and also to identify the form of parliamentary approval of the program in a little more detail than the Court was taken to yesterday.  That will be both in 32B and in the Appropriation Act and the PBS statement.  The second topic we will cover is the validity of section 32B as a whole and hopefully, having disposed of that topic and the related points that we urge the Court not to get to, we will come to topic 4 which is the first key point of issue which is whether if 32B enlivened by the particular item in the regulation is or is not a law with respect to the provision of student benefits.

If we succeed on those points, that is all the Court needs to deal with.  If we do not, I then wish to deal – and I will deal with the application to reconsider Williams and the substantive argument if that argument is permitted, points 5 and 6.  Mr Donaghue I will invite to deal with points 7 to 9, if that is convenient, your Honours.  Your Honours, as to the program, this program is not the National Student Chaplaincy Program you dealt with in Williams (No 1).  Could I explain the chronology and the differences?  The legal significance of those differences I will pick up in the later argument.

The Court in Williams (No 1) reserved on 11 August 2011 in respect to the National School Chaplains Program.  At that time a public consultation process was underway and irrelevant to that case but relevant to this case.  Could I ask your Honours to go to volume 1 of the special case book, commencing at page 467; that is in the volume 1 of the special case book, not the yellow book.

HAYNE J:   This is not part of the core documents.

MR GLEESON:   No.

BELL J:   Could I get the page number again.

MR GLEESON:   Yes.  I am sorry, your Honour, page 467.  It is headed, “The National School 2011 Chaplaincy Program.  Have your say”.  It is a document put out in February of that year as a discussion paper.  The Court will see on page 471 in the first paragraph a reference to the then existing program and the intent to continue it for future years, and you will see in the right‑hand column in the last couple of paragraphs an indication of the reach of the then current program, close to 3,000 schools, and you see the division between the government sector and the private sector.

At page 472 in the right‑hand column under the heading, “Stage One”, it is indicated that consultation with the key stakeholders was occurring and they included the State and Territory departments and the non‑government school authorities, which are listed on page 486.  What you then see from page 473 is a summary of where that consultation has reached, and in the first item, it was reiterated that many stakeholders accepted a need to support adequately the social, emotional and spiritual development of all students with reference to the Melbourne Declaration.  The Melbourne Declaration is ‑ ‑ ‑

HAYNE J:   Just before you come to that, what are we looking at, constitutional fact?

MR GLEESON:   Yes.

HAYNE J:   What is the relevant constitutional fact, Mr Solicitor?

MR GLEESON:   Yes.  This will be relevant to three parts of the case, your Honour.  In relation to the Appropriation Act and the PBS, the PBS for the purpose of section 8(2), approved spending on an identified continuing program, and this document assists in identification of that program. Secondly, in relation to the argument based on section 32B, it has the same work to do. Thirdly, in relation to the question of the student benefits power, it is evidence as to relevant needs of students. Fourthly, it is relevant to the nature of the program for the purpose of section 61.

So if your Honours will bear with me, they are the four reasons I am going to it and I trust that you will find it helpful, and in fact important, and you will find it quite significant that you have not been taken to it so far, because what you see in this document, contrary to the howls of protest from the six States that their integrity is being impugned, and as Mr Sealy eloquently put, Andrew Inglis Clark’s vision is being destroyed.  What actually happened with this scheme is that the Commonwealth put out for discussion with everyone including the States, first of all, is there a relevant need of students which should see this program continue, and what is that need?  That question is answered at the part I have taken your Honours to.

Yes, there is a need.  It is a need which is referenced in the Melbourne Declaration, which you will see in footnote 1, is another collaborative exercise of the Commonwealth and all States and Territories setting joint goals for education in the nation.

CRENNAN J: Mr Gleeson, some might say, and perhaps it is too simple a view, that when there are many views in the community about a policy initiative under our democratic system that is resolved by Parliament having a debate in relation to a relevant law and if those who espouse view A are in the position that Parliament has voted for view B they accept that because that is part of the democratic arrangements that we have under the Constitution. Well, first of all, is that too simple a view, and secondly, how does this kind of process relate to that simple view that contested matters of social policy would normally be debated in Parliament?

MR GLEESON:   My answer is, with respect, it is too simple, and the reason is that if by definition you do need a law, an instrument creating rights, duties, obligations, immunities, et cetera, to carry forward practically a policy, then of course what your Honour says is correct.

CRENNAN J:   Also to authorise the implementation and the detail may well be left to the Executive.

MR GLEESON:   But, if one needs a law then what your Honour has said is correct.  The question we are grappling with when we come to the correctness of Williams is, when is it that the Executive, not just for contracting and spending but for a whole range of activities, must go to Parliament beyond appropriation, and that has within it really two aspects.  One aspect, which is why we want to say that Williams was wrong and fundamentally wrong, was there is an assumption in some judgments in Williams that the powers given to the Senate under the Constitution, including sections 53 and section 54, are deficient in terms of representative government.

HAYNE J:   So the point at which you begin your argument is that Williams (No 1) is wrong?  You take us to this on the assumption that Williams (No 1) is wrong?

MR GLEESON:   No, your Honour.

HAYNE J:   Is that not so?

MR GLEESON:   It is not so, your Honour.

FRENCH CJ:   Well, what is the purpose, for your argument in relation to 32B and its validity, of taking us to consultation processes which after all may or may not occur in relation to any program under 32B?

MR GLEESON:   Let me try and break it down so your Honours know where I wish to go.  In relation to section 32B the critical legal question is going to become, did section 32B as enlivened by item 407.013 constitute a law with respect to the provision of student benefits?  In answering that question, one issue is going to be what is the identification of the program which is thereby enlivened? 

We know its name from the way the item is described.  We know its objective.  We also know it is an existing and continuing program and it was referred to in Parliament as such when the Act was passed.  We wish to submit, contrary to what has been put by everyone except Queensland yesterday, it is permissible to look to material beyond the item in the regulation if it serves as constitutional fact to help you identify what is the program.

FRENCH CJ:   Well, what then is the point of referring to the participation of the States beyond a purely rhetorical point?

MR GLEESON:   For section 32B, its relevance is identification and that is not the point your Honour has just put to me.

FRENCH CJ:   No.

MR GLEESON:   Its relevancy is what is the program and so the passage I was taking your Honours to at 473 – linking to the Melbourne Declaration – assists us to know what is the need which the program seeks to target.  So that is the relevance for 32B.  For the Appropriation Act and the PBS, the relevance is the same.

CRENNAN J:   Well, they are the sort of issues you might expect to see in a second reading speech – an explanation of consultations for stakeholders and so on, that justify the institution of a new program.

MR GLEESON:   You may but you do not constitutionally have to, is our submission.  Then there is the reason I went to in answer to what Justice Crennan was putting to me because in answer to your Honour Justice Hayne, I am not starting with the incorrectness of Williams.  I am starting where I am at points 1 and 2.  But your Honour’s question – if I understood it correctly – took me to the larger and very important question of what does representative government require in respect to a new policy?  As I understand that question, that goes squarely to two matters.  It goes to Williams per se and whether it is correct and it also goes, perhaps, to the matter that we deal with in the outline at point 3.

CRENNAN J:   It goes to boundaries if they can be discerned ‑ ‑ ‑

MR GLEESON:   If they can be discerned.

CRENNAN J:   ‑ ‑ ‑ in relation to the relations between the Executive and the legislature.

MR GLEESON:   I fully accept it for that purpose.  Now, I have two courses, your Honours.  One is to indicate the whole of the material that I think is relevant from this document for both parts of the argument or I can do it more discretely.  I would prefer to do it once as a whole but I am happy to do it whichever way your Honours wish.  If it is to be done as a whole, the critical part I was then seeking to bring your Honours to is at page 478.  You will see in the first paragraph that one of the matters targeted by the new scheme which is different to the old scheme and different to what could be done simply State by State, is the establishment of:

nationally consistent employment standards for chaplains in relation to minimum qualifications, role and duty statements.

That is an element in this scheme which was not in the previous scheme.  Could I then take your Honours on the consultation topic to the right‑hand column on that page where the:

State education departments supported –

that aspect of the new scheme.  Then, critically, on page 479 at about point 7 under the heading “Some specific comments”, could I read this:

State and territory education departments consistently expressed that they do not wish to be involved in the administration of chaplaincy funding for the public education system.

So at least that far through the consultation process pace your Honour Justice Crennan, this is executive consultation.  I accept that.  Through that consultation process, the practical position reached was that the six States and Territories were content with the administration of this scheme being done (a) by the central government, (b) on a uniform basis and (c) with nationally consistent standards.

KIEFEL J:   Well, at least that is what the Executive is reporting in this document.  That is not really a great way to find a constitutional fact, is it, if that is what you are really relying on?

MR GLEESON:   Your Honour, that matter is then brought into the case in the core special case book; this is referred to at paragraphs 41 and 42.

KIEFEL J:   I am sorry, which page?

CRENNAN J:   Page?

MR GLEESON:   So, page 116 and 117, paragraphs 41 and 42.

KIEFEL J:   Speaking for myself, Mr Solicitor, consultations are way too early.  I can understand that you might wish to rely upon aspects of the program for an argument that you are not restricted to the regulation as identification of the program and the words it uses, but consultations are not going to assist me at least in relation to finding what the program that the regulation is referrable to.

MR GLEESON:   I accept that, your Honour.  The consultation is not relevant to the identification of the program.  It may be relevant, I submit it is, to the breadth of power at Commonwealth level because the logic of the argument put by the six States and the plaintiff is that it really has two elements to it.  The first is there is not legally significant difference between the Commonwealth doing a national uniform scheme and such States as wish to do it doing their own schemes, presumably under section 96.  That is an element to their case.  The second element which seems consequential upon that is if there is to be chaplaincy programs it can only be done by the States taking on the administration burden and asking for and agreeing to a section 96 grant even if States do not want to.

FRENCH CJ:   The section 96 grant could be conditional on adherence to national uniform standards and administration by Commonwealth agencies, could not it?

MR GLEESON:   Well, certainly in principle the former is available if every State agrees to common standards.

FRENCH CJ:   Yes, it is subject to agreement by the States in each case.

MR GLEESON:   Yes.  As to the latter, we would say yes, but lying behind that is an important and correct proposition that the Commonwealth executive power must extend to the ability to administer cooperative schemes of this character provided there is a sufficient element of consent.  It must extend at least that far, and one of the perhaps slight ironies of this case is that while I cannot point to an intergovernmental agreement, and if I could we would simply put ourselves in Duncan territory, we would wish to argue – the Commonwealth would wish to argue and I do, that whatever else be true, intergovernmental agreements at an executive level only are prima facie within the scope of section 61.

Certainly intergovernmental agreements which are backed by legislation have been held to be within the scope of section 61, but we would want to put that intergovernmental agreements at an executive level only are within the scope of section 61, and we would want to submit in the broader category that where there is acquiescence, as there essentially is here, that also is a factor going to the reach of section 61.

HAYNE J:   Sorry, the last proposition was acquiescence of the States affects the reach of section 61. Was that the proposition?

MR GLEESON:   No, the proposition was that in ascertaining the reach of section 61, within the proposition of there is a limit based on reasonably capable of being viewed as a national benefit and concern, acquiescence of the States is a relevant factor ‑ ‑ ‑

CRENNAN J:   But it is acquiescence plus national benefit, is it?

MR GLEESON:   Plus national benefit, yes.  Really, the elements that would enliven that formulation of the limit on the power are firstly some conception of national benefit.  There must be something which calls for the central government to engage its resources.  Secondly, that will often involve, as here, benefits that can be achieved through co‑ordination over and above individual action.  Thirdly, the consent of the States, or the acquiescence, can assist in that characterisation.

CRENNAN J:   What about heads of legislative power?  Are they factored into this scenario or not?

MR GLEESON:   The heads of legislative power can inform the boundary, or the limits, upon what would otherwise be a power to contract and spend.  So the heads of power would ordinarily play a very important informing role, and as we have sought to put that question, it is not a narrow mapping exercise, your Honour Chief Justice French raised that question in Williams (No 1).  It is not a narrow mapping exercise, but it may often be more than one head of power which together tell you something under this division of responsibilities is appropriately viewed as of national benefit and concern.

If one just takes a couple of examples, a national immunisation scheme, which is one of the items in the regulation, you do not find a head of power per se for national immunisation.  That is the preventative health scheme.  If you have a successful scheme it is not only good for the health of the community, but it probably saves you spending money in the future on hospital and sickness benefits.  Can the central government, within our federation, engage in a preventative health scheme if it thinks appropriate?  Our proposition would be that that would be within the scope of matters of national health or concern.

Let me take a second example.  Assume an international aircraft has gone down off the coast of one of the States of Australia.  Can the central government be called upon without recalling Parliament beyond an appropriation to say, “This is worthy of spending money”, and in particular, we now need to enter some contracts with commercial suppliers who will provide the equipment to try and look for the missing plane at the bottom of the ocean. 

Now, I am assuming in this example there is an appropriation, but I am assuming there is no other engagement, as your Honours put to me of the recalling of Parliament to debate whether we should be spending 50, 100, 150, 200 million on searching for the plane.  Why is it that that can be done by the Executive?  It is reasonably capable of being viewed as of national benefit and concern because, in particular, the external affairs power gives you a form of information that that is something that, subject to political judgment, the Executive, ultimately responsible to Parliament and the people, money might be spent on. 

That is not to say that Mr Donaldson’s State, if it wished to spend money on the program, separately or together, could not so do.  But, your Honours, as I start to give a few examples in answer to the question, one starts to think of issues which could be done.  It could be done if one is looking solely at resources on a State‑by‑State basis.

CRENNAN J:   I think examples that involve emergency situations and so on do have a dimension that will be absent from what I am about to put to you.

MR GLEESON:   Yes.

CRENNAN J:   One testing scenario I think is there is a contentious policy – a new policy, say – which has been the subject of debate prior to an election.  It has become the subject of a budget item.  It is in an Appropriation Act.  The Executive then seeks perhaps to enter contracts and to spend.  Then it comes before Parliament for the purposes of the passage of a relevant Bill.  The Bill does not get up.  Where does that leave the Executive in the account of executive power which you have just given?

MR GLEESON:   In your Honour’s example, that squarely raises the asymmetry point that we refer to because if that is the concern, namely, that new potentially contested policies need more parliamentary scrutiny than an ordinary Appropriation Act, that is a concern of perhaps responsible but certainly representative government and, given section ‑ ‑ ‑

CRENNAN J:   Both really.

MR GLEESON: Or both, and, given section 106 preserved the Constitutions of the State, and, given each State vigorously says to you they have no such limit in their Constitutions or required by our Constitution, we would say if that is a proposition ‑ and that is what is so radical and new about Williams ‑ that proposition does not apply at State level apparently.  If the concerns emanating are the ones your Honour has put, should not be deduced at federal level, that would be my first answer to it.

My second answer, which is where we are respectfully forced to make our application if Willliams is just wrong, is that the parliamentary control your Honour is suggesting would be desirable is available to Parliament through appropriation, and it is available through ordinary appropriation, and this is where we differ from a number of the judgments in Williams (No 1). It fundamentally concerns the difference between the role of the Senate as facilitated by the Constitution and a role of the Senate as required by the Constitution, and we differ here from Mr Walker in particular.

Let us take your Honour’s example.  If Parliament puts up in an ordinary No 1 Bill a contested policy from the election, if it is an administered expense, which it normally will be, under the process of Appropriation Acts not required by the constitutional Combet but in fact practised at present, it will appear in a section 8(1) and a section 8(2) item.  It will be in 8(1) because it will have to be within an outcome and it will most probably be in 8(2) as a specific program.

When the Senate receives that Bill from the House of Representatives, the Senate has the ability under the Constitution to scrutinise any and every program in that Act and it has the ability under section 53 and 54 to go back to the House of Representatives and say we request you delete program 95 from the No 1 Bill and we would like you if you wish to pursue that program to present that for us in a No 2 Bill, or perhaps as your Honour’s example in Williams of the HIH scheme, we would like it presented as a separate ‑ ‑ ‑

CRENNAN J:   Special appropriation.

MR GLEESON:   ‑ ‑ ‑ special standing appropriation.  So there are at least two things the Senate could say we would like.  We want it done as an annual but No 2 special, or we want it done as a standing where you will allocate 640 million to it for X years.

The Senate has that ability.  The material we sought to put before you by way of constitutional fact is that the Senate exercises those powers in the estimates process with the greatest of rigour and scrutiny.  So what they do is they look at programs that are in the PBS, particularly section 8(2) programs, and they ask the very questions your Honour is asking.  In that process, constitutionally the Senate is permitted to say, as I have said to the House of Representatives, we request an amendment. 

Now, we have given you the materials from Odgers and Odgers says, and it is perfectly correct, the only difference between 53 and 54 in the ordinary case and the non‑ordinary case is the Senate cannot reject the ordinary Bill but it can request an amendment and the effect, therefore, is one more passage of the Bill between the Houses of Parliament.  So, our answer to your Honour’s very important question about where does representative democracy deal with that new policy, is it deals with it by saying, under section 53 and 54, the Senate’s House, a representative in a sense of the States, has the full power to have that item removed from the Ordinary Annual Services of Government Bill and subjected to separate scrutiny. 

Now, if the Senate does not do that, the question then to be framed is, does the Constitution require there to be an additional process of discussion, debate and approval beyond the ones I have just mentioned in section 53 and our essential argument is the Constitution does not require that as an additional process. It is in the hands of the houses as to the degree to which the appropriation process provides the scrutiny that your Honour has asked for and in that sense we say that the States’ Constitutions are in the same position as the Commonwealth Constitution.

Now, that is a core proposition we put about the correct working of section 53 and section 54.  If it is correct, it meets the concerns of responsible and representative government.  It meets Mr Sealy’s impassioned plea because the States, through their representation in the Senate, have in their very hands the ability to decide what to do with these No 1 Acts presented by the House of Representatives. 

So, as your Honour has said, the disaster type examples might look, in a sense, intuitively easy. Your Honour’s example looks harder at first blush. Our answer is, at Commonwealth and State level, representative and responsible government are exercised through the mechanism in sections 53 and 54 and the Constitution does not require that balance to be reset by an additional requirement of statutory authority.

Since I am on that, could I just complete one or two other examples, which may not be in the pure disaster area but to illustrate the point?   Let us take issues of potential drought, flood, bushfire which may engage more than one State.  Let us assume the Commonwealth wishes, in a preventative, precautionary manner, to invest in resources to buy a group of water bombing helicopters which would then be available to such States as needed them.  We would say, that could be done subject to appropriation under the executive power and the Commonwealth would not be required to say, unless I can get an IGA with every State, I cannot deal with that need.

Now, let me then come to the heart of this case, closer to this case, and your Honours will decide whether, in effect, not just this program is bad, but whether the Department of Education is structured on a constitutional fallacy.  What the Department of Education does, and there is no power over education per se, of course, is the Department of Education says in the PBS, and I will take you to it, we consider that we properly have a national leadership role in the field of education and that is because education is so important, not just to the individuals, but to the society and, indeed, to Australia’s international standing. 

Your Honours know that Australia has set as a goal at Commonwealth level, agreed by the States, to raise levels of education internationally to a top five level within a certain number of years.  That is the goal.  When the Commonwealth carries out its national leadership role in education a large amount of money is spent in the departmental expenses.  Based on Combet the appropriation does not need to go any further than that and based on your Honour the Chief Justice’s judgment in Williams we would read, we would hope correctly, that the departmental expenses would probably bear a section 64 character and therefore not require a statute. 

The bulk of the Education Department’s portfolio is in fact administered, not departmental, and the bulk of the administered is section 96 grants, grants to the States for the State schools and for the non‑government schools.  One of the fundamental questions in this case is, is the constitutional role of the Department of Education limited to what I have described, namely, attempting to facilitate national goals plus channelling money under section 96, or is it entitled to do what it is doing, which is to say there are a fairly limited small number of areas where we believe that the national goals that we have set for education with the support of the States require some additional national programs. 

That is where the school chaplains program comes into the larger workings of this Department, but you know it is not the only one.  You know there is a program for children with autism.  You know there is a program for Teach Next Australia encouraging young students to get extra qualifications and perhaps go and work in the bush.

There are these range of programs which are a fairly modest, in financial terms, a fairly modest supplement or addition to the core administered programs of the Department which are being done pursuant to a view that a central government in its national leadership role is entitled to add these to what will be the core delivery of money, namely the section 96 grants where the States keep control, and if your Honours strike down the SUQ agreement, if you are required to do that you will, the legal effect of that is probably to say that a department like this should not be doing any of these supplemental activities, what it should ‑ ‑ ‑

KIEFEL J:   Well, I thought there was a view that that might be the case currently abroad, and to which I would add that the premise upon which you seem to be proceeding, and your continuous reference to the Department of Education are referring to a head of power which the Commonwealth does not have - education.

MR GLEESON: Yes. So, the reason I am putting these propositions to your Honour is this. Firstly, to the extent the concern is the one Justice Crennan raised with me, representative government, that is answered by the powers available to both houses including the Senate under section 53. That was one part of what I was doing. The second part of what I was doing is to say, if we are looking at the boundaries or the limits on the section 61 head of power and we are trying to strike those boundaries accepting there must be some, and we ask what informs those boundaries, we have put and maintain the submission that the heads of power play an informing role in determining those boundaries.

If one then gets to the point of your Honour’s question, if you are beyond provision of benefits to students or trading corporations, or some other head of power, is that where this department must stop?  That is where we seek to bring the square challenge to Williams and say, if you are in that outer circle you do not have to fit yourself into a narrow pocket of national crisis emergency, only you can do it.  What you can do is fit yourself within the circle of Justice Jacobs, for example, in AAP.  Is it a program where national formulation – national uniformity – could reasonably be thought to achieve something which individual programs may not achieve?

KIEFEL J:   I am sure you will come to it, but I suppose “national” has a particular meaning in a federation.

MR GLEESON:  Certainly it does.

KIEFEL J:   You will come back to that.

MR GLEESON:   Well, no, your Honour, I will deal with it now.  We cannot simply invoke national and say, therefore, we have power.  That, obviously, is not the beginning and the end of the exercise.  So, we need to ascertain within the formula we have offered near the end of the submissions, reasonably capable of being viewed by a central government as of national benefit or concern.  When that is then applied to the individual cases, what are the criteria which might bring you within that formula?  Some of the cases say mere convenience is not good enough.  But, a formula such as Justice Jacobs’ formula in the AAP Case is one situation where one might find the criteria which would then engage that expression.

FRENCH CJ:   Would you accept – I am just coming back to my question about 96 for a moment.  Would you accept that the executive power will extend to giving effect to a condition set out in the State Grants Act pursuant to section 96 that required a Commonwealth agency to administer some component of a program funded by a grant under such legislation?

MR GLEESON:   Yes.

FRENCH CJ:   So, the Education Department could be doing these things, subject to agreement by the States, of course, for the purposes of section 96, could be doing these things in the exercise of executive power in support of legislation made for the purposes of the section 96 grant.

MR GLEESON:   The answer to that is yes.

KEANE J:   And, even apart from administering the grants as an aspect of executive power of the Commonwealth, if one is concerned about justifying the existence of the Department of Education, would it not be justified as an aspect of executive power just in terms of the assessment and consideration of programs to be administered through section 96?

MR GLEESON:   Certainly justified in that very, very important and extensive part of its role. 

KEANE J:   So we have a justification for the Department of Education in relation to assessment, consideration of grants and the conditions subject to which they might be made.

MR GLEESON:   Yes, certainly that far.

KEANE J:   But you do not need to have a legislative power in respect of education to justify the existence of the Department of Education then.

MR GLEESON:   No, that is what we would put, your Honour.  Indeed, because the departments are constituted by the Governor‑General under section 64, the Governor‑General is not required to only constitute departments which map onto a head of power.  Some of them will map closely onto a head of power and, for instance, under section 70, and perhaps 69 also, some departments were transferred lock, stock and barrel from the States to the Commonwealth.

For instance, if one took the post, telegraphs or telephones departments, which came from the States to the Commonwealth, they came over then subject to section 64 ministerial responsibility and they came over subject to section 70 with all of the powers which were at that point vested in the Governor of the colony.  So to the extent that the Posts and Telegraphs Department of Queensland or New South Wales or Victoria was entering contracts, which it would be doing under a Bardolph notion, subject to appropriation, that whole power to contract came over under section 70.

All of that gives us a Department of Education, and it gives us substantial work for that Department to do, as your Honour Justice Keane has put to me.  To be practical in terms of where the rub in the case comes in, could I ask your Honours to go to the yellow book, which was my next topic, which was the actual appropriation, and at page 444 there is the 2012/13 appropriation.  That commenced on 28 June 2012.  At page 450, sections 7 and 8 were the relevant appropriations.

As to section 8(1), the administered items were permitted to be applied for relevant outcomes.  The outcomes are found on page 460 and the relevant outcome is outcome 2.  Essentially, the structure of the Department’s work is outcome 1 is early childhood learning, outcome 2 is improving schools, outcome 3 is transition to the labour market and outcome 4 is productive workplaces.

So looking at outcome 2, in the “Departmental” item there is $155 million appropriated and subject to any special facts ordinarily section 64 plus section 61 would give the authority to do that without any need for an extra statute. Then in the “Administered” items we have 520 million. That is the section 8 items.

If you then go to page 495 to the PBS, that amount on page 495 for outcome 2 is shown as $518 million.  Your Honours actually see from that page one of the matters we wish to put forward as a constitutional fact, that in terms of practice the annual Appropriation Acts now comprise somewhere between 10 and 20 per cent of Commonwealth expenditure, whereas on page 496 the special Appropriation Acts comprise somewhere between 80 and 90 per cent of Commonwealth expenditure and of course one of the criticisms of the special Appropriation Act if it is standing in character is that Parliament does not have to look at it again each year, and that is part of the surrender of power that Parliament has engaged in.

So that has taken us to item 2 with the amount of money that can be spent, and then at page 518 there is a description of what outcome 2 is about and it might be said, consistent with what your Honour Justice Keane put to me, that to establish a department which seeks to pursue an outcome of this character is consistent with the Constitution without there being a general power over education.

Your Honours see that the “Melbourne Declaration” that I referred to at line 30 provides a lynchpin for the outcome and your Honours see over the next two pages some of the things that are done pursuant to the outcome.  At page 519, line 15 there is a national curriculum; 519 about line 25, a website for transparency and so on.  Then if your Honours come to pages 521 to 522 we now get to how the Department is spending its money.

The document on 521 starts with “Program 2.2”.  They are the section 96 grants for the non‑government schools.  For some reason the section 96 grants for the government schools are found on page 524 at line 20.  But apart from those section 96 grants the extra money is then spent in programs 2.3 through to programs 2.15 and on page 522, if you go to about line 35, the totals by appropriation type are summarised and for the administered expenses the Ordinary Annual Services Bill is $518 million.  That is the $518 million from page 495.

FRENCH CJ:   Sorry, where does that appear?

MR GLEESON:   On page 522 at line 35.

FRENCH CJ:   Thank you.

MR GLEESON:   That is the $518 million which had appeared back on page 495 and that is a sum of ‑ if your Honours wish to make a note, it is a sum of the items for programs 2.3, 2.5, 2.6, 2.9, 2.10, 2.11 and 2.14.  So, I will come back to your Honour Justice Crennan’s questions about whether one needs more than an ordinary Appropriation Act to provide sufficient accountability.  What has happened is that each of the items or programs I have just mentioned have gone through the ordinary process and it was open to the Senate to ask for any of them to be dealt with in a different process.

Then the final link in the chain is if you go back to program 2.3 on page 521, which is $205 million, and then go to pages 529 to 531, one sees the breakdown of program 2.3, and one sees all the things that are in program 2.3:  National Trade Cadetships, Indigenous Ranger Cadetships, Teach Next, Helping Children with Autism, Positive Partnerships, then our program and then certain other ones continue.  Over on page 531, each of them has an allocation and the National School Chaplaincy Program has $74 million.  So could I draw a couple of ‑ ‑ ‑

CRENNAN J:   Are some of these things able to be characterised as just part of the ordinary annual services of government because they have been the subject of section 96 grant or in some other respect they are able to be characterised in that way?

MR GLEESON:   We say they can but not ‑ ‑ ‑

CRENNAN J:   Invoking the Bardolph distinction.

MR GLEESON:   Well, we say they can, but that might put us in tension with Williams (No 1), but I cannot point to a section 96 or a special Appropriation Act.  I am trying to show your Honour directly that the way this PBS has been approved, a range of things are in the ordinary Appropriation Act, each of them broken down with an identification of a program and a dollar figure so the Senate knows exactly what it is being asked to approve, and in an intramural sense, as per Western Australia and the Commonwealth between the houses, the House of Representatives has proposed to the Senate we wish to appropriate a total amount which will be broken down in these very specific ways and we regard 74 million on the National School Chaplaincy Program which we tell you is part of program 2.3 ‑ that is its immediate set of cousins – and then we tell you program 2.3 is part of outcome 2, that that is part of the way in which we wish to carry forth the work of our department.

Now, we would say, and I accept its intention with some statements in Williams (No 1) that, to the extent one applies Bardolph to the Commonwealth Constitution, an ordinary well‑recognised part of the business of the Department of Education is the National School Chaplaincy and Student Welfare Program. Why? Firstly, as in Bardolph, it has been done for a number of years, but that is not enough.  Secondly, it has been through the appropriation process, which is what happened in Bardolph.  It has been through the appropriation process in a very specific manner and the Senate has been content to approve it as part of the ordinary annual services of government.

Now, we are one step short of what your Honour Justice Crennan referred to in Williams, because I cannot say that it was framed in a separate Act and I cannot say that the Senate in fact said, we would like that removed and separately debated.

CRENNAN J:   Or that Parliament once debated it as an initial new policy or however you describe it.

MR GLEESON:   No, there was not that either.  We do know, of course, under section 32B that if anything was blindingly clear to Parliament when they passed that fairly quick legislation, the Attorney said, we are doing it in response to a case and one of the things we want to validate is the ability to engage in this very program.  Now, what that meant was that on the day that 32B was passed, and that is in addition to this Appropriation Act, the Parliament, both Houses, had every ability if they wanted to to say, we do not think that program should be engaging Commonwealth money, and they did not do it. 

That is why we may not get to points 4 and 5 of our outline because we say in terms of both this PBS process, which as your Honours have seen is minute in its identification of how I propose to spend the money, plus 32B, if one thing was true, the Parliament turned their mind to this program, amongst others, and said, we regard that as an appropriate use of money and in that sense, the Parliament, not just the Executive, took political accountability and responsibility for $74 million being spent on this program.

HAYNE J:   Which is another way of saying, appropriation is enough.  The argument you have just advanced can be distilled to the proposition, appropriation is enough.

MR GLEESON:   I do not think that is so, your Honour. 

HAYNE J:   Perhaps you might tell me at some point why it is wrong.

MR GLEESON:   It does not fully capture what I am putting.  We are certainly putting that appropriation plus the ability it provides both Houses, including the Senate, is sufficient to meet the needs of responsible and representative government that your Honour Justice Crennan has put to me, and to the extent that representative government extends to a Senate, which is a representative of States, we are putting appropriation is enough.

So to that extent my answer to your Honour would be, yes but there is more. The more is this: because, when one comes to conceive the limits and the boundaries of section 61, there are limits and boundaries and we have accepted there are at least seven limits and boundaries. Your Honours know them. We have attempted to tabulate them together in our submissions but, while we start from the proposition that, in general, a polity must have a power to contract and spend, that is really just to eliminate a question, is this polity so deficient in power that it cannot contract and spent. That is the only point of the entry point that your Honour raised a question about yesterday.

We then come to what we thought was also a fairly uncontroversial next point, which is that between the three arms of government, ordinarily the polity, the arm which will exercise the power of the polity to the extent it exists, will be the Executive.  I say ordinarily because, of course, Parliament can by statute direct that it be done differently.  For example, under section 17(2) of this Court’s Act, the Court has the power to enter contracts and so that is done as an incident of the exercise of the judicial power of the Court, that of an administrative character.

So, ordinarily, the Executive is the arm of government tasked with the business of entering contracts and spending money.  We then get to the question of the limits.  What are the limits or the boundaries on that power?  The Commonwealth, as we have tried to make clear in writing, is not submitting that any contract can then be entered.  What we have sought to do is, reflecting back on 100 years of cases in Australia and a few years in England, what are the limits which have been discerned in the tradition from the United Kingdom and then brought into our Constitution?

CRENNAN J: Of course, our Constitution does differ from the United Kingdom with the separation of powers, with federalism and democratic representation.

MR GLEESON:   We have to accommodate those features as well, so it is not just ‑ ‑ ‑

CRENNAN J:   Differs from the way England was in the 19th century, is the point I am making to you.

MR GLEESON: I agree. I accept that. So each feature in our Constitution has to be grappled with to answer the ultimate question which is, assuming a valid appropriation, in what other circumstances, if any, must you have an authorising statute before the Executive exercises the power to contract and spend.

CRENNAN J:   Let me say something very simple.  Mr Williams is a taxpayer and he has a view that he does not want taxpayer’s funds used to fund a chaplaincy program.  Is the answer to that, well, the Executive has the power to make a decision to authorise that program?

MR GLEESON:   The answer is the Executive has a ‑ ‑ ‑

CRENNAN J:   I understand it has the power to bring it forward and to implement it, but is it part of your argument that the Executive also has the power to authorise it?

MR GLEESON:   It has a bounded power to authorise it, a bounded, not an unbounded power to authorise it.  The importance is to identify the bounds.  The first bound we have accepted is that the exercise of power cannot so erect a scheme of regulation that it becomes legislative in character and it cannot turn into taxation because that has been reserved solely to the Parliament.  That is the first bound.  The second bound is that the Parliament, through both Houses, can always pass a law controlling, limiting, or removing the power from the Executive and that would be a valid law under section 51(xxxix).

HAYNE J:   Why?  Incidental to what head?

MR GLEESON: Incidental to the exercise of the executive power under section 61.

HAYNE J:   The argument is perfectly symmetrical because it is circular.  You assume executive power and it is incidental to executive power, but the question is, is it within executive power?  Do not assume the answer and then assert (xxxix).  As I say, the symmetry of circularity, Mr Solicitor.

MR GLEESON:   I would put it a little differently, which is that we have started from what we consider to be an uncontroversial proposition that the polity, the new Commonwealth, was sufficiently empowered to be a Commonwealth that could contract and spend – in general, before one asks the question which contracts and which expenditure and that in general the arm that will be doing the decision making is the Executive.  Why the Executive?  Because on a functional basis of the separation of powers, taken from the United States tradition, we know what judicial power is, we know what legislative power is and executive power is the residue which is not one of the other two characters of power. 

So the decision whether to make a contract or to spend, to do what your Honour put to me, to say there will be a program in a school that may affect Mr Williams’ money, as long as everyone else’s money, is executive in character unless Parliament has placed it on one of the other limbs of government.

We then – not having yet assumed the answer to the question – say, what are the bounds of power?  Number one, you cannot stray into legislation or into an area reserved for the legislature such as taxation.  Number two, you are always subject to a law passed by both Houses which controls, restricts or, in fact, reduces your power to a pure statutory power. 

That is a very important point because on our proposition about this Constitution the Parliament, through both Houses, retains the ability at all times to decide when to reduce what would otherwise be section 61 executive power to statutory executive power. One of the reasons we respectfully wish to challenge Williams is that instead of the law saying you must have a statute in these cases and no others, the Constitution has left it to the two Houses of Parliament, including the Senate, to decide when it will reduce non‑statutory executive power to executive power.

HAYNE J: Is this proposition accurately recorded as being that the legislature can reduce what would otherwise be section 61 executive power to statutory executive power? Is that the proposition accurately recorded?

MR GLEESON:   In general, yes. 

HAYNE J:   Because it contains within it the assumption which I just challenged you about by the words “what would otherwise be” 61 executive power?  That is the circularity I invite your attention to.

MR GLEESON: It is not circular for this reason, your Honour. The proposition we are putting is, in general, contracting and spending can be done and can be done by the Executive. But, we need to identify the bounds of that. We have identified seven and most probably eight bounds to that. Together, that allows you to answer the question. So you do not find the circle until you have looked at each of our limits. If at the end of the day you say our approach of a power with seven or eight bounds does not match the Constitution, we fail. But we considered that.

If you actually look at what the cases have held over the last hundred years – and no case really has had to try and tabulate them in one place – one actually sees the bounds.  So the third bound is appropriation.  We have done that.  The fourth bound is the Executive cannot dispense with the operation of law.  That is trite but incredibly important so that when the Executive devises one of these schemes, if it does, it cannot dispense with any law. 

The fifth bound is the accountability of the Executive to Parliament under section 64 and then of the Parliament to the people.  We ask your Honours not to treat that as somehow a deficient form of accountability which needs a further resetting.  It is not the whole answer but it is an important answer.

Now, one of the points we have sought to make is that those five first limits that I have identified, each of them has a trace back to the United Kingdom tradition.  Each of them has a trace.  But to deal with your Honour Justice Crennan’s point, one can also see in them a reflection of the tradition of representative government and separation of powers that has come from the United States because in each of them one can actually see a role that has been given to both Houses of Parliament and to the Senate in particular.

So, in each of those five matters I have mentioned, one can see the particular role that the Senate has been allocated under the Constitution. If the matter strays into an area for legislation such as taxation, the Senate has its role. If it is a question of passing a law to control the Executive, the Senate has its role albeit it is a negative control in the sense there would have to be an agreement with the House of Representatives. If it is appropriation, the Senate has its role under sections 53 and 54 which is the exact role it has been given and it should not be regarded as deficient. The Executive cannot dispense with the law. Therefore, if the Senate has made the law with the House of Representatives, it cannot be dispensed with.

Finally, under the political accountability of the people, it is very important to note that there can be no assumption that the Executive is identified simply with the party which holds a majority from time to time in the lower house, and your Honours know that for a range of reasons.  Firstly, you know that a number of Ministers sit in the upper house and are primarily responsible to that house, although they will have a corresponding Minister in the lower house.  Secondly, one only has to think of the last 20 to 30 years of politics in Australia to know that in general the party with the control in the lower house has not had ready control of the upper house, and the Senate has exercised a very vital role in deciding what goes forward and what does not go forward.

Now, that is a working out of political accountability and that is Andrew Inglis Clark’s vision operating, because his vision was to ensure that equal numbers of senators for each State, notwithstanding differences in population, meant that the two senators for Western Australia or the 10 senators had the same voting power as the 10 from much more numerous States. 

So, in those first five limits we have proposed, I want to put to your Honours that not only do they each derive from the British tradition but they each reflect the working of representative government and the working of the Senate. Now, what we have then said in our submissions, which is where it gets closer to the rub, is, are there any features of our Constitution which do not find a clear reflection in the British tradition and if there are they must be accommodated in the balance of the analysis. At that point we have to accept, and we do accept. We have section 106. We have continued existence of the States, separate existence, with their Constitutions.

Now, that is what has led the Court to the Melbourne Corporation principle which applies at the level of legislative power.  The Commonwealth has accepted, in our submissions, that a parallel proposition would apply at the level of executive power.  What that means is, in a case where there was actual competition, and your Honour the Chief Justice in Williams has referred to the questions of whether, if there is more Commonwealth power there is therefore less State power, and whether that is an attack or a diminution on the authority and the ability of the States, we have accepted that at a factual level in a particular case, depending upon the scheme, one might find that the parallel Melbourne Corporation limit could be offended.

It may well be that that is one of the explanations of the Wool Tops Case, because if your Honours recall, in the Wool Tops Case, under the war regulations the Commonwealth had complete control over the purchase and sale of wool tops so without their consent you could not sell.  The Commonwealth gave its consent on terms where either the Commonwealth became, in effect, an equity participant in the business or a substantial fee was paid. 

One of the things Justice Isaacs said in Wool Tops was that that effectively was the Commonwealth regulating intrastate trade with there being no other available head of legislative power and really the notion behind that was that on the facts had got to the area where that was so intruding upon the ability of the State to regulate an activity which was its sphere of activity that a limit was exceeded.

Now, that is an example of that sort of proposition.  The seventh limit we have accepted is the residential tenancies limit, again, a very important one, where the Court has accepted that the general proposition that the Commonwealth Executive cannot dispense from the statute law also extends to State statutes of general application. 

That is a critical limit when one thinks about the present case because in the present case this scheme does not provide authority for any person to enter any school in Queensland.  What it does is put SUQ in money, where SUQ is in a position to offer its chaplains, or secular welfare workers, to schools.  Whether those chaplains ever enter a school in Queensland is completely under the control of first, the school, and ultimately, Queensland.  You only get into a school if a chaplain invites you, so if it is a State school, no chaplain enters a school without the Executive of Queensland agreeing that that person enters the school.  If it is a non‑government school, Queensland has the power, through its Parliament, to pass a law of general application, the result of which is no Commonwealth funded chaplain enters the school.

So those sixth and seventh limits we have identified, the Melbourne Corporation analogous limit and the subjection to State laws of general application, go, we would submit, a very substantial way towards recognising the federal features of the Constitution. The critical question on that part of the case is then this: Have those limits we have identified sufficiently, in terms of implication, addressed the federal elements of this Constitution.

HAYNE J:   So, for example, have they paid any account to sections 86 to 96 of Chapter IV?  Leave aside reference to sections 51 and 52, but if we are to begin by taking as our paradigm UK constitutional law, and to draw deductions from that, we can see evident echoes of UK constitutional law and parliamentary practice in sections 54, 55, 53.  We can see evident echoes of UK parliamentary and constitutional practice perhaps in 81, 82 and 83.  But we then must also take account, must we not, of the remaining provisions of Chapter IV and also of the other provisions of Chapter II?

MR GLEESON:   Exactly, exactly.  So if one were to look at those provisions, one would find in section 86 an area where the Executive Government has passed from the States to the Commonwealth level.  One would see in section 88 uniform duties and one would see section 90.  So, one would identify certain areas of the functions of the States, including executive functions which have been transferred to the Commonwealth so as to make them exclusively Commonwealth.

One would see in section 92 a constitutional prohibition and protection which will clearly bind the Commonwealth Executive when it engages in its sphere of activity and that may also limit what the Commonwealth Executive can do.  If one travels through to section 96, there is a permissive provision which may be terminated which could see financial assistance granted to States on terms and conditions.

If one was looking for the understanding behind section 96, one would look to what Justice Mason said in AAP and also to what the Court earlier said in Moran’s Case.  In Moran’s Case the Court said two things about section 96.  First of all, the Parliament can delegate to the Executive the power to set the terms and conditions of the grant and, secondly, one of the purposes of section 96 is to allow grants which may be apparently unequal between the States for the purpose of dealing with what are otherwise inequalities between the polities. 

One immediately sees perhaps why section 96 would be a power given to the Parliament and not simply to the Executive because it is dealing so fundamentally with the relation between polities that it is reserved to the Parliament subject to the delegation ability I have mentioned.  So the Court would look to each of these provisions to see what further informing effect they have on the limitations, but we would wish to put the one thing you do not get, even once one has looked at these federal provisions, is a rule which says the Executive must in some cases, but not others, go to Parliament first for authority to contract and spend beyond an ordinary Appropriation Act.

One does not get a divide between the cases where you must go to Parliament and the cases where you need not go to Parliament, and what we respectfully wish to put is that the tradition of the cases in this country up until Williams dealt with the federal problem cautiously and on a case‑by‑case basis, but by seeking to ascertain whether there were any out of bounds or spheres of responsibility allocated by this Constitution which the central executive was exceeding. If there were, that would take it beyond power. If there were not, it was within power and it did not need to go to Parliament and get a statute.

KIEFEL J:   Are you saying, Mr Solicitor, that the starting point of the cases up to Williams was an assumption that executive power was unbounded?

MR GLEESON: No. I am saying the starting point was an assumption that there were bounds and, indeed, perhaps bounds beyond the seven limits I have given you. They were bounds to be ascertained by the provisions of this Constitution, but the bounds were never referable to whether heads of power had been exercised.

What they were referable to was a range of matters, a very important one of which was is there a head of power exercised or not?  The radical shift in Williams is to go from saying that that is an informing feature of identifying the bounds of power, that is, is there a head of power exercised or not to a proposition that often you cannot act unless you have a statute. 

KIEFEL J:   But you otherwise accept that executive power to spend or contract is not unlimited?

MR GLEESON:   Yes.  Sorry, it is not unlimited in that ‑ ‑ ‑

KIEFEL J:   So it should not have been put in quite the way it was in Williams (No 1).

MR GLEESON:   Your Honours, I have jumped around enormously and I will not at this point deal with my argument which says the Court did not have full argument in Williams (No 1), but I did want to just say this in answer to your question.  In Williams (No 1) the Commonwealth put two propositions – what it called the narrower proposition which became the common assumption was that if there is a relevant head of power, exercised or not, that will bring you within valid executive power, plus there were a few extra cases around the edges – nationhood‑type cases.  That was the narrower proposition.

It put a broader proposition which was in fact more limited than it may have appeared in the heat of battle.  As it was put, the language used in the Commonwealth’s written submissions and initially orally was a relevantly unlimited executive power.  That obviously sends off a signal what you mean is an unlimited head of power.  In fact, if one looked at those pages of the Commonwealth’s submissions, and it was then made a little clearer in the course of argument, the Commonwealth was accepting a number of the limits I have put to you today. 

Now, what did not happen in Williams (No 1), which is why I wish to put it to the Court so you at least have the best assistance we can offer, is in a structured way to say these are the limits the Commonwealth accepts.  These are the bounds.  We accept all of them and then you have all of those bounds and you then ask the question, having regard to the text of this instrument, have we sufficiently recognised its federal character or is some further bound needed.

So where we are getting beyond our seven limits or bounds is the conception which we say informed all of the cases which grappled with this issue, expressly or by assumption since Federation, which was that, amongst other things, the heads of power informed the exercise whether they were legislated or not.  One of the things I wish to do in the argument, and it may be convenient now, is I want to take your Honours to, what we say are seven cases from Federation which have taken an approach to this question which is different to the Williams approach.  If it is convenient to do that now ‑ ‑ ‑

FRENCH CJ:   Just let me understand the status of the seven limitations you have enunciated.  Do you say those seven limitations, assuming they are non‑exhaustive, can stand with Williams?

MR GLEESON:   That is correct.

FRENCH CJ:   The next proposition is that they are exhaustive.

MR GLEESON:   Well, the next proposition is that subject to the one matter I am trying to grapple with now which is, is there a further limit?  We have offered a formulation reasonably capable of being viewed as a matter of national benefit and concern, a limit which is a genus which covers a series of species, one of which is do you have a head of power which informs your activity; another is, is it section 64; another is, is it Justice Jacobs in AAP; another is, is it Pape, is it Davis?

So, they are species of the last and the hardest limit that we are trying to identify.  What we are really putting is, to the extent there is a problem or a concern beyond the seven limits, the core limits which the Court can in except put a stamp on because we accept them and they do not argue against them, they ignore them, were all the concerns the Court properly looked at in Williams (No 1) which were federalism, section 96, the Senate, representative government, are they (a) met by the seven limits and if not are they met not by a depth requirement, not by saying there are some contracts not others where you must go to Parliament, but are they met by what had more traditionally been the breadth requirement, are you straying into an area which is simply beyond that which this Constitution has reserved for the central Government?

The proposition I am putting from the cases is the – the cases I want to take you to show that either by assumption or by statement the approach prior to Williams was a breadth limit.  It was ultimately to say, there will be some cases where you have simply strayed too far beyond the conception properly available to a central government in the Federation, and for that purpose, if you have kept yourself within an unexercised head of power ordinarily that will be good evidence that you have not strayed beyond the limit.  Now, your Honour Justice Kiefel, if what I have put is different to Williams (No 1), that is what I wish to put, that is what the Commonwealth wishes to put.

We consider that it intellectually meets the tradition in this country for 100 years in the authorities.  We submit that it puts bounds on the Commonwealth Executive.  It preserves the existence of the States and what it fundamentally does is allow for what is now and has for a long time been a reality, which is there will be a large area for concurrent exercise of federal and State power where the ultimate resolution will simply be on the facts of the case and if either executive ends up being controlled by its own parliament one will then ask, are the laws inconsistent.  If they are not inconsistent the matter will continue.  If they are inconsistent 109 will solve the problem.

Your Honours, if it is convenient to take that step now, the first case I would ask you to go to, which is on our list, is Kidman v Commonwealth of Australia, which is reported in the Argus Law Reports in 1926, Argus Law Reports at page 1.  I think in Williams, your Honour, the Chief Justice dealt with this case, otherwise it may not have been dealt with. 

Your Honours will see from the right‑hand column on the first page, just above the arguments, that the essence of the case was an arbitration in which the award was made arising out of a contract to build ships for the Commonwealth and one can see, just over on page 2, Mr Maughan’s argument in reply, at about point 3, put the point squarely:

The question whether the contract was void in the absence of Parliamentary authority and that no Appropriation Act would suffice to validate it, is of great importance.

So, that is a Williams‑type proposition.  Appropriation is not good enough.  You needed a statute of Parliament.  Then a little further down, Mr Maughan refers back to Commercial Cable Co v Newfoundland Government and Viscount Haldane says:

In that case we distinctly laid it down . . . that the Governor‑General, as representing the Crown, could enter into contracts as much as he liked, and even, if he made the words clear, to bind himself personally.  But he was presumed only to bind the funds which might or might not be appropriated . . . if they were not . . . not enforceable because there was no res against which to enforce it.

Now, that is referring back to the position in British North America.  However, Viscount Haldane, a little further down, after referring to Auckland Harbor Board, says Auckland Harbor Board:

was founded upon the Newfoundland case.  We have had all these things dealt with quite recently in an Irish case ‑ ‑ ‑

and then he says the critical words -

How can you say that, under the Federal Act, this was null?  Just look at the section which gives the executive power –

He then reads out section 61 and he says section 61 -

goes beyond the Constitution of Canada, and it enables him, the Prime Minister of the Commonwealth, to enter into contracts; whether they are enforceable depends upon whether there was an appropriation ‑ ‑ ‑

Now, this is not a binding authority, of course, because it was an application for leave to appeal which was refused. Your Honours see the reasons for the refusal in the judgment Viscount Cave. He records the argument and he essentially says, “You’re not coming here, fellas”. So in that case there, as a first step, what do we see? We see the Privy Council without much difficulty seeing within section 61 essentially a Bardolph notion, provided you get an appropriation, otherwise you can enter your contracts and the proposition that you need a statute beyond appropriation is simply not countenanced.  So, that is the first case.

The second case I would ask your Honours to go to, just a couple of years earlier, is the Wool Tops decision, Commonwealth and Central Wool Committee v Colonial Combing, Spinning and Weaving (1922) 31 CLR 421. I mentioned this briefly earlier. The Court will see on page 423, the provisions of the War Precautions Act and, in short, all purchase and sale of wool tops was controlled and, indeed, prohibited, unless you contained the consent of the Commonwealth to the purchase or sale. 

Then there were some agreements set out and at page 426 at the top, under the first three agreements, the Commonwealth gave their consent on the basis that they would get half the net earnings of the business.  So the Commonwealth was purporting to use its consent power under this regulatory scheme to, in effect, become the joint venture partner in the business. 

The fourth contract is referred to on page 429 at about point 6, next to letter “(n)”, which was where the Commonwealth paid a sum of money to the company but otherwise the company worked as the agent for the Commonwealth.  That can be seen at the top of the page.  So those were the two structures.

Now, in the judgment of Chief Justice Knox and Justice Gavan Duffy at page 432 they approached the matter on the basis, at about point 3, that there was no relevant Act of Parliament and at the foot of that page they referred to section 64 as an indication that the Ministers would be authorised to make contracts on behalf of the Commonwealth as might from time to time be necessary in the course of the administration of the Departments, but it is not pretended that it is in that category.  They were simply made under the Prime Minister’s authority as a political activity.  For them that was enough to say this was not a departmental business, that is the end of the case.

Now, Justice Isaacs took a different approach and considered in much more detail the bounds of power.  You will see at page 433 in the last paragraph that he identified as the “vitiating cause” of the first three agreements that they were taxation “without parliamentary warrant”, so they offended the first of our seven limitations.  He looked beyond the form and said in substance you are extracting money compulsorily from this person for a public purpose.  Now, that is the summary of what he said.

In a little more detail, at page 437, he discusses, of course, the sources of executive power, and he traces section 61, in part, back to the UK tradition. On page 438, at about point 5, he says this:

Sec. 61, when carefully examined, simply applies to the new constitutional structure, the Commonwealth, but with the necessary adaptation, the basic principle of the law of the Empire that the King is indistinguishably the King of the whole Empire, but that the springs of royal action differ with locality.

So we respectfully submit this is more than just traces or evanescent remembrances of the tradition.  It is ‑ ‑ ‑

CRENNAN J:   It depends on a concept of the Crown which was discussed in Sue v Hill as you will recollect, which post the Australia Act 1986 is a conception of the Crown which it might be contended is quite distinct from the situation under our Constitution and the enumeration of executive power in section 61, partly because, if I may just explicate, sovereignty, if one wants to invoke that concept, is in a sense distributed under a separation of powers in a written constitution.

MR GLEESON:   There is a distribution.  This is an approach which is the approach that Mr Deakin displayed in the “Vondel Opinion” of the wellspring of the power has come from that tradition, but as Justice Isaacs says, with necessary adaption, and that is where we are in the critical battleground.  So what I wanted to draw attention to is at least in 1922 how did Justice Isaacs deal with the adaption problem accepting that it is not an identical translation, and the way he dealt with that at the foot of page 439 over on the next page was to say that - and this is about 10 lines from the bottom ‑ ‑ ‑

CRENNAN J:   Well, he is echoing Mr Deakin on the debate on the Judiciary Act at the bottom of the page.

MR GLEESON:   Yes, and that is there.  So if I could then just go to the bottom of 439:

But when the Federal Constitution of Australia was fashioned the new constitutional unit thereby created had to occupy (besides its own special territories) the same territory as the constituent States, and, so to speak, was superimposed upon them geographically. Two conditions had, therefore, to be satisfied. First, the constitutional domain of the new unit had to be delimited and distinguished from the respective constitutional domains of the States, and, next, that could not be done simply in terms of territory . . . In other words, the domain of the Commonwealth executive power is a special domain of governmental action within the whole physical territory of the Commonwealth . . . Of necessity, this domain is described but not defined in sec. 61 . . . It is clear now that there cannot be laid down as a rule of law that there is an unlimited application of the common law as exercised by the King’s Government in England.

So it is a question of how this adaption process is occurring, and a little further down:

Having ascertained in a given case that the constitutional domain has not been transgressed, we may have to go further and find whether on that field in the circumstances the power in fact exerted was lawful.

Now, with that background he then, on page 441, looks to the legality of the first three agreements and at about point 5 says:

The mere fact of the creation of the Executive Government carries with it some constitutional consequences, unwritten, it is true, but nevertheless very real, that Courts recognize and that are included in the terms “maintenance of the Constitution.” . . . One feature of outstanding importance, when the three first‑mentioned agreements came to be carefully scrutinized, is that they relate to internal trade of the States as well as to inter‑State and foreign trade.

Then that is apparently the factual case, and then his Honour says -

Primâ facie, at all events, that would be beyond the permitted region of the Commonwealth executive power as delimited by the third declaration in sec. 61. But not necessarily in the circumstances. Legislation, if valid, might at the time have brought it within the jurisdictional area –

Then over the page it is put:

the state of war of itself entitled the Government to make it by virtue of the Crown prerogative, and that the executive department of the Government was the sole judge of the necessity.

So, there is then a discussion of whether, although prima facie you have extended into a sphere beyond indicated by the head of power, namely 51(i), did 51(vi) indicate that you were within a sphere a power.  Your Honours see the answer to that on page 443 at about point 4:

The war power then – apart from statute – is inapplicable to warrant the entry into what is normally State jurisdiction only.  The consequence is that, in my opinion, were there no other reason than the transgression –

the agreement would be invalid.  Then, the other transgression is taxation which is looked at in detail.  Now, the whole of that analysis is using the heads of legislative power, whether exercised or not, as a marker point of a boundary.  If Justice Isaacs had been doing a Williams approach he would have, I respectfully submit, omitted these pages and simply said, you cannot point to a statute under section 51(i) or section 51(vi), therefore, you cannot act.  That is evidence of a breadth approach not a depth approach to the problem.  He applies the same approach when he deals with the fourth agreement.  With the fourth agreement, which he comes to on page 445, at about point 5, he discusses its context as being “made in war time” and he says:

I am not prepared to say without fuller consideration that – apart from one feature. . . it was, in the circumstances, outside the power of the Commonwealth Government.

So, because of the scope of 51(vi), even though there was no exercise of that by statute, prima facie this appeared to be within the scope of power.  The separate problem he found, of course, was the view he took on appropriation which has then been overtaken by Bardolph.

HAYNE J:   Is not the significance of the reference to war power the invocation of prerogative, and only the invocation of prerogative?

MR GLEESON:   No, it is an indication that – it is a power informed by the fact of section 51(vi) as the heads of legislative power plus the matter your Honour is referring to within the prerogative, but then in turn influencing the question, can I enter a contract without having a statute?  One thing your Honour’s question highlights is this, that a sharp distinction drawn in Williams (No 1) between a prerogative which can always be exercised without statute and other contracting and spending which often needs a statute but not always is one, we would submit, does not match the purposes of section 61.

What one would rather draw from this is that in terms of the bounds of your executive action, the wartime context and the prerogative will again help to define that you have kept within the sphere, but what is critical about it is that it is a breadth approach, not a depth approach.

HAYNE J:   But what I suggest to you is that the reference to “the war power” is distinct – see, for example, 443 – as distinct from the defence power is a matter of some real significance. 

MR GLEESON:   Yes.

HAYNE J:   The war power, relevantly, is the invocation of prerogative.

MR GLEESON:   I think I have to accept that, your Honour.  I accept that.

CRENNAN J: You accept that section 61 obviously encompasses prerogative powers?

MR GLEESON:   Yes, and where we seek to say there is no reason to draw a line is to say prerogative do not need a statute, everything else prima facie do, subject to exceptions.  Your Honours, the third case, if I could ask you to go to The Commonwealth v Bogle 89 CLR 229. This was the case where, as you see from the headnote, the Commonwealth established hostels for migrants and in due course the Commonwealth incorporated a company ‑ page 230 at the top – which took over the business. It took those two actions, which clearly involved contracting and spending, without any statute. In Justice McTiernan’s judgment on page 249, there are actually shades of a Bardolph approach where he says:

The management and conduct of a hostel is not ordinarily a function of government unless the hostel provides for special classes of people in whom the Executive has a special interest.  The people living in the hostels . . . came to Australia under a migration scheme conducted by the Executive.  The provision of food and shelter for these people fell within the sphere of the Executive’s responsibility.  Although it may be said that it did not become an essential function of government, the hostels . . . were established by the Government to meet the needs of the migrants.

That is the analysis.  What underpins that would appear to be a proposition that the Executive has a proper interest in not only bringing migrants to Australia but, once they are here, housing and providing for them.

HAYNE J:   Just before you develop that point, what were the questions in the case stated; that is, what were the issues to which these remarks were directed?  I see there seems to be frequent reference to the answers that are to be given, but where do I find the questions?

CRENNAN J:   Page 231.

MR GLEESON:   Yes, on 231 the nature of the case is set out and ‑ ‑ ‑

CRENNAN J:   Mr Holmes deals with the main questions.

MR GLEESON:   Yes, whether they were tenants of the premises and whether they were bound by the State legislation.  So this is a case in the category of assumed rather than decided.  I do not put this for consideration of it.  The proposition I am putting is that the assumption of this case was that for the Executive to first run a migration scheme but secondly then to provide for the migrants who have come to Australia without any suggestion of the need for a statute beyond appropriation provoked no surprise or comment.  Why?  Why is the question? 

If Williams is correct, the short answer should have been you cannot sue for money because the entire scheme was infirm for the lack of a statute.  What appears to underpin Justice McTiernan’s judgment is a Bardolph notion that the migration power at a legislative level helps inform the fact that executive activity within that sphere does not exceed the bounds of section 61.

KIEFEL J:   Was the migration scheme conducted by the Executive under legislative power?

MR GLEESON:   Your Honour, I have tried to check that, and I do not think I yet have a correct answer.  If one read Justice McTiernan literally, it was purely executive.  One thinks there was probably some statute at some point behind ‑ ‑ ‑

KIEFEL J:   It does not say migration scheme created by the Executive ‑ ‑ ‑

MR GLEESON:   Conducted by the Executive, yes.

KIEFEL J:   ‑ ‑ ‑it simply refers to the Executive conducting it, and his Honour poses the question at the end of page 249 as the question which arises as simply being the status in which the Executive was conducting the arrangements.

MR GLEESON:   Assume it is being conducted by the Executive with the statute in the back of it; that brings the people here.  This case concerned the fact of then ‑ ‑ ‑

KIEFEL J:   It might bring in the incidental powers though, might it not?

MR GLEESON:   It may do all of those things, your Honour, but the way it is framed, the business is the business of running a hostel, and then the next step is incorporating a company to take over that business, and that is dealt with on page 250.  Of themselves, Justice McTiernan is viewing them as executive action and it is provoking no question, well did ‑ ‑ ‑

HAYNE J:   The question at issue was the relationship between the non‑statutory corporation – the corporation which had been created and its tenants, and whether those were affected by relevant State, I assume, rent pegging laws and the like.

MR GLEESON:   That is why I say “assumed” because it would have been a good defence if Williams was correct to say not indebted particulars, the contract is invalid, because it lacked a statute.

CRENNAN J:   Well, it is impossible to know.  I mean, what the focus is on is on the management and conduct of the hostel, which would be a classic example of implementation of a policy, and the question was really whether that was done in the capacity of being an agent of the Commonwealth, so ‑ ‑ ‑

KIEFEL J:   There was no question as to the validity of the scheme or its implementation.

CRENNAN J:   No.

MR GLEESON:   Your Honours, I am not overstating the case.  Your Honour is correct.  Validity was not argued.  My proposition is that whereas in Kidman validity was argued and rejected, in Wool Tops it was expressly dealt with by Justice Isaacs as I have shown.  In this case, validity is not argued.  If Williams is correct, had validity been argued, this would have failed, because the answer would have been, my contract with you as a tenant has a fatal flaw to it.

KIEFEL J:   Well, we do not know the answer to that because we do not enough about the legislative background.

FRENCH CJ:   The most you can say is there might have been a common assumption.

CRENNAN J:   Well, you might even be able to say if the Commonwealth’s view of Williams is correct, something might have followed, as distinct from ‑ ‑ ‑

MR GLEESON:   I am sorry, your Honour, if I have elided.

CRENNAN J:   There may be some misunderstandings in that view.

MR GLEESON:   There may be, and one of the things I would like to do is to, as best I can, tease out what we apprehend the case to stand for.  If we have misapprehended the case, that may lead in a particular direction.  So that is Bogle.  The next case is AAP.

HAYNE J:   You pass by the Pharmaceutical Benefits Case and Justice Dixon, do you?  No matter, we will come to AAP, but I did think Justice Dixon had something to say about the subject.

MR GLEESON:   I am happy to deal with that, your Honour.

HAYNE J:   No, it is entirely a matter for you.  I have in mind 79 CLR particularly at – sorry, it is not 79, it is Dale, is it not?

KIEFEL J:   Volume 71.

HAYNE J:   Volume 71 at 269.

MR GLEESON:   So on that page his Honour says, in a context of a section 81 argument:

It was said that s. 81 . . . empowers the Parliament to expend money for any purpose that is for the benefit of the people of the Commonwealth, or for the advancement of their interest –

and so on –

That is not the view which in the past I have entertained . . . No‑one, I think, suggests, and I certainly do not, that any narrow interpretation or application should be given to these provisions.  Even upon the footing –

so that is an assumption, not a finding –

that the power of expenditure is limited to matters to which the Federal legislative power may be addressed, it necessarily includes whatever is incidental to the existence of the Commonwealth as a state and to the exercise of the functions of a national government.  These are things which . . . should be interpreted widely and applied according to no narrow conception of the functions of the central government of a country in the world of to‑day.  There is no reason why such matters should be taken to fall outside the province of Federal appropriation though ascertained and defined by reference to the legislative power of the Commonwealth.

A little further down:

The claim means that, though the Commonwealth is a government of defined and enumerated powers, the power to spend money is independent of the limitations which affect the other power of the Commonwealth and is not to be restricted by [those purposes].

Then his Honour says there is support both ‑ ‑ ‑

HAYNE J:   No:

by reference to the purposes for which, otherwise, the Commonwealth is conceived to have been established.

MR GLEESON:   Yes, and then his Honour says there are some who have taken a different view, I do not need to decide , the proposition is not relevant to this case.  I would put to your Honours that while that is the highly relevant page one does not see Williams on that page.  One sees Justice Dixon referring to the very proposition I have put that one might ascertain from the heads of legislative power assistance in understanding the bounds of the executive power. 

What one does not see Justice Dixon saying is, in many cases of Commonwealth contracting and spending your power has been reduced to a solely statutory power.  So, I would ask your Honours to consider that case also as consistent with the tradition that I am pointing to.  Then if I could come to the AAP Case, and if I could deal with the judgments in this order, and before I do so make one general proposition about AAP.

Of course, we now know that by reason of Pape the discussion in AAP was, in part, proceeding on a wrong basis about the scope of section 81.  To answer your Honour Justice Kiefel’s question, we do not challenge the ruling in Pape that appropriation is a necessary condition for an exercise of a spending power, but one needs to find a power and the power needs to be found in a proper reading of section 61, 64 or in a valid statute. We do put as a separate matter which is Mr Donaghue’s province that an Appropriation Act may, depending upon its construction, do both exercises and that that is a proposition which Pape did not have to grapple with.

Accepting that, if one stands back and looks at the real issue in AAP, the real issue was could the Commonwealth spend money on this Australian assistance plan.  It was framed in terms of an attack upon the appropriation, that being thought to be the way to attack it, but the real issue was could the Commonwealth spend money on a plan.  If Williams is correct, the whole of AAP was unnecessary because all the Court needed to say was, you cannot point to a statute. This is not in any of the pockets where you do not need a statute. This is not section 64. This is not Pape or Davis.  There is no national crisis.  There is no national emergency.  Where is your statute?  Of course, that is not the basis upon which the case was decided, but what we would put from that is, respectfully ‑ ‑ ‑

HAYNE J:   It was not the basis on which the case was pleaded.

MR GLEESON:   Pleaded?

HAYNE J:   It was not pleaded that way.

MR GLEESON:   Argued or decided.  The point I seek to put is that – and this is why we say that Williams does not sit with a well‑settled tradition and, in fact, sits opposite to the tradition.  If Williams were correct, it provided a one‑line answer to this case.  With that little preface, could I first go to the broader judgments and start with Justice McTiernan and then I will come back to the narrower judgments.  Justice McTiernan’s approach, commencing at 366, is to extensively quote and approve Chief Justice Latham in Pharmaceutical Benefits.  In the passage at the top of page 368, again quoting Chief Justice Latham, refers to a variety of Commonwealth endeavours such as:

Antarctic exploration, medical research, literary grants and pensions, subscriptions to international organizations. . . public health, assistance to distressed Australians abroad.

They are all seen to be proper subjects for the exercise of executive power.  On page 369, in the second last paragraph, he identifies that there is no head of legislative power with respect to the plan.  So, this is a case where the bounds cannot be informed by the heads of legislative power because you are beyond them.  You are in territory beyond that.  Nevertheless, his conclusion at page 370 is that the new council should be regarded:

as merely executive bodies within the Department of Social Security.  Their constitution does not involve the performance of functions beyond the province of the federal executive government.

So, in principle, that approach of Justice McTiernan is, can I find something in the heads of power, exercised or not, which brings this within a proper scope of central government activity?  No.  Nevertheless, is it permissible, having regard to my conception of the central government?  Yes.  Next, if I could go to Justice Jacobs and at page 404, at the bottom.  He was dealing with the proposition:

that Parliament may only appropriate moneys in respect of a purpose which is already the subject of legislation ‑

Now, although he is speaking in terms of appropriation, we may now perhaps read this as a proposition that the Parliament may only appropriate and spend moneys in respect of a purpose which is already the subject of legislation:

The Constitution does not say so and there is no place for such an implication –

There is a –

wide area in which moneys may be expended by the Executive Government, that is to say, the Queen exercising her prerogative through the Governor‑General on the advice of the Executive Council.  When the moneys are voted to the Queen by Parliament . . . it falls within the prerogative to determine whether or not those moneys will be expended for that purpose and how . . . Legislation is only needed when Parliament chooses to replace or affect the prerogative powers by legislation which either extends or limits or simply reproduces in the form of executive or other authority the powers previously comprehended within the prerogative.

CRENNAN J:   That is the passage which you said earlier we should accept.

MR GLEESON:   Yes.  This is one passage your Honours should accept from this judgment, your Honour should accept the whole judgment, but this is one critical part and can I dwell on it for these propositions.  Firstly, your Honour Justice Hayne yesterday raised the two Wade articles and the Wade article from 1985 used the prerogative in perhaps the narrower Blackstonian sense rather than the ‑ ‑ ‑

CRENNAN J:   Diceyan ‑ ‑ ‑

MR GLEESON: Diceyan sense. Justice Jacobs appears to be using it in the Diceyan sense that the prerogative is that whole bundle of powers, whether strictly the prerogative or capacities which, under the Constitution, have been reflected in section 61.

CRENNAN J:   You are urging us to prefer the Dicey view?

MR GLEESON:   Yes.

CRENNAN J: That is to say that the breadth of executive power can only be – which includes as you have said, section 61 encompasses the prerogative power bounds require some legislation or some Act of the Parliament which replaces, cuts down or affects the Diceyan view of the prerogatives of the Executive.

MR GLEESON: That is the proposition and what Justice Jacobs is saying here is I believe what was put to me as being, I may be wrong, circular but this is how we would put it. That you start with the whole bundle of powers which have been brought into section 61, the prerogative in the narrow sense capacities, the broad sense, legislation can cut down or reduce to pure statute that which otherwise inheres in section 61 and Justice Jacobs goes on to say:

The exercise of the prerogative of expending moneys voted by Parliament does not depend on the existence of legislation on the subject by the Australian Parliament other than the appropriation itself. This exercise of the prerogative is in no different case from the other exercises of the prerogative which fall within . . . s. 61 –

and we would urge your Honours in deciding where contracting and spending fits within section 61 not to do that in isolation but to look at a coherent view of section 61 and the limits that we have proposed, we would respectfully submit, apply not just to contracting and spending but will be a fairly good guide to the whole of the section 61 power. So, Justice Jacobs is squarely rejecting, we would say, a proposition which says you must have legislation. Then on page 406 ‑ ‑ ‑

HAYNE J:   Just before you pass to that, the prerogative power to spend, upon which this passage depends, is a prerogative power to spend any money appropriated by the Parliament in accordance with the appropriation.

MR GLEESON:   I believe that is correct.

HAYNE J:   Which puts us back, I think, to the argument repeated by the Commonwealth in every spending case that has ever been litigated in the Court that the Commonwealth may spend money as it chooses.

MR GLEESON:   Well, that is not the proposition we are putting ‑ ‑ ‑

HAYNE J:   No?

MR GLEESON:   Your Honours know that is not the proposition we are putting.

CRENNAN J:   But there has to be the distinction between the prerogative and the heads of power that must be taken into account in asking us to accept that passage.  I mean, the whole trajectory of the development of the prerogative power has been to narrow it, not widen it, if we are going to talk about British representative – sorry, responsible government and so forth.  In other words, asking us now to approach the boundaries in relation to executive power is really – by relying on this Diceyan analysis, is really urging that the Executive can make any decision about contracting and spending, where you cannot perhaps point to some piece of legislation that has taken them from that field.  That is very like having wide prerogative powers, is it not?

MR GLEESON:   I would just ask your Honours to recall, we accept the whole bundle of limits.  The one your Honour has just put to me, without being too schematic, is limit two.  Justice Jacobs is referring to limit two.  We go beyond Justice Jacobs, what he said expressly, and say there are ‑ ‑ ‑

CRENNAN J:   But your other six limits ‑ ‑ ‑

MR GLEESON:   There are at least seven and possibly, probably the eighth – the eighth being the hardest one, the eighth being the outer bound of the power to ensure that you are not, in truth, straying beyond in a breadth sense, your role as a central government.  So, I am going to Justice Jacobs for the purpose of rejecting the absolute proposition that you must have a statute, and then on page 406, in the middle paragraph, there is Justice Jacobs’ statement as to why legislation which controls the exercise of the prerogative is validly supported by section 51(xxxix).  He says:

The Parliament is sovereign over the Executive and whatever is within the competence of the Executive under s. 61, including or as well as the exercise of the prerogative within the area of the prerogative attached to the Government of Australia, may be the subject of legislation of the Australian Parliament. However . . . it does not follow that legislation is necessary before a prerogative power is exercised -

and says, well, for that purpose, the plaintiff would be denied relief.  Then goes on to say, however, the Commonwealth put in issue certain allegations about the nature of the plan and so with that larger body of material as to what the plan was, that lead Justice Jacobs to the second key passages that we rely upon, which are at the foot of 412 and the top of 413.  So, here, we are trying to identify whether one is still within the outer bounds, even though one may have travelled beyond an unexercised head of power, but where there is a sufficient national connection.

Your Honour Justice Kiefel asked me questions about whether national – how that test actually works, and this is an illustration of how national needs might bring one within the bounds of section 61. His Honour says:

the complexity and values of a modern national society result in a need for co‑ordination and integration of ways and means of planning for that complexity and reflecting those values.  Inquiries on a national scale are necessary and likewise planning on a national scale must be carried out.  Moreover, the complexity of society, with its various interrelated needs, requires co‑ordination of services designed to meet those needs.

Then the particular plan is:

an expenditure of money in the exercise by the Commonwealth of its executive power to formulate and co‑ordinate plans and purposes which require national rather than local planning . . . an expenditure of money which is incidental to the execution by the Commonwealth of its wide powers respecting social welfare.

Now, that passage we would embrace as indicating one of the ways in which the Commonwealth Executive may keep itself within the ‑ ‑ ‑

KIEFEL J:   But in these passages is not his Honour’s view very much tied up with the then notion of the legislative power of appropriation and the spending is simply consequent upon it?

MR GLEESON:   In one sense, yes, because it was taken as ‑ ‑ ‑

KIEFEL J:   A given.

MR GLEESON:   ‑ ‑ ‑ a given that the power was there.  However, once we ‑ ‑ ‑

KIEFEL J:   Well, it might not focus attention on the kind of question that Williams was addressing after Pape then.

MR GLEESON:   I have recognised that by saying in a sense with Williams and Pape you would have a different entry point to this entire analysis.

KIEFEL J:   Quite so.

MR GLEESON: However, to the extent that the issue in this case in substance was, can the Commonwealth spend public money on the AAP plan, what Justice Jacobs is saying about this being within the powers of the Commonwealth, I would submit to your Honours that he is thinking in section 61 terms. Even if the issue has not been framed without the appropriation distraction, what I took your Honours to back on page 405 to 406 shows Justice Jacobs framing it clearly in terms of power under section 61.

Now, in that sense, like Justice Mason in this case, Justice Jacobs in a sense was reaching for what the Court held in Pape. He was understanding that section 61 must be brought to account in understanding the scope of this executive power. So in that sense I would submit that what you have on page 413 your Honours might find to be useful.

BELL J:   Useful in informing what you accept might be the eighth limitation concerning the breadth of the power in the context of your submissions about powers suited to national coordination.  The difficulty with that and, with respect, with this passage is seeing it as in any way a limiting tool.  It is difficult to think of any activity that any government might regulate that one could not say, well, this is useful to do at a national level, ergo duty statements for people employed as welfare officers at schools.

MR GLEESON:   That is true, your Honour.  So, how do we try and deal with that?  One thing we urge is a case by case analysis rather than a prophylactic rule.  Williams (No 1), with respect, and, again, I may have misread it, but in a sense it has a prophylactic rule, save for categories A, B and C.  Ordinarily present your policy to Parliament, if Parliament does not approve it you cannot go ahead, et cetera.  That is the rule.  One of the concerns underpinning Williams, particularly in your Honour the Chief Justice’s judgment, is that rule is necessary to protect a federal balance.

Now, what we are seeking to put is to the extent those federal concerns are there they are not solved by that prophylactic rule, as is illustrated by the fact that in many cases there will be a concurrent field of power where the polities may be content for there to be national action, either unilaterality or through some form of consent.  So, recognising what your Honour says, that cannot be allowed to, in effect, create an unlimited power because then we have gone back to the problem we were trying to avoid. 

We nevertheless would submit that there is benefit in recognising that the Constitution permits that there will be cases where that sort of judgment can reasonably be made, and that is why in our formulation of the eighth limb, when we say reasonably capable of being viewed as a matter of national concern, the Court retains a role to adjudicate whether in fact the limb has been breached. The passage from Justice Murphy is well‑known and it is at page 418 through to 421, and we would rely upon that. I then wanted to go to the narrower judgments, first Justice Mason, and pick that up at the bottom of page 394 where his Honour said:

Over the years there have been many instances of appropriations made by the Parliament to persons and bodies and for purposes which appear to have little, if any, connexion with the functions and powers of the Commonwealth under the Constitution.

He then deals with a passage on section 96 that we commend to the Court explaining part of the role of section 96 to make it clear the Parliament has power to attach the conditions to the grants.  We submit that you do not gain an implication from section 96 that it provides a default means by which spending must occur.  He then discusses the US tradition and it is just interesting to observe there when your Honour Justice Crennan puts to me, have we sufficiently reflected the representative government separation of powers tradition of powers from the US, in fact the debate in the US was resolved very, very early between Hamilton and Madison in favour of Hamilton’s view that the only limit upon the federal spending power was where you strayed into matters which were too local.

His Honour Justice Mason refers to the slight ‑ I will remove the “slight” – refers to the difference in textual language with Article 1, section 8 of the US Constitution and he says on page 396 he does not think you can introduce the Hamilton/Story view into our Constitution. I just pause and observe that because as of 1900, had one been thinking in terms of the United States introduction of separation of powers, the short point is you would not have got a limit, that often you need to go to Parliament for a statute. Instead you would have had this limit and you would have had political accountability as the balance of the limit. Then coming to the present point he says at 396 at about point 5:

But this is not to say that the Commonwealth has an unlimited executive power –

and he says in the passage which prefaces Pape, “An appropriation” provides the “sanction for the withdrawal of money . . . and the payment or subscription . . . to a particular” person or for a purpose “but it does not supply legal authority for the” activity. Then says there is no legislation, so we have to have a look at the executive power, and he is clearly looking at section 61 here, so he is focused right in on section 61 and he says:

Although the ambit of the power is not otherwise defined by Ch. II it is evident that in scope it is not unlimited and that its content does not reach beyond the area of responsibilities allocated to the Commonwealth by the Constitution, responsibilities which are ascertainable from the distribution of powers, more particularly the distribution of legislative powers, effected by the Constitution itself and the character and status of the Commonwealth as a national government.

Now, pausing there, his Honour is finding the allocation of power through, in part, the heads of power exercised or unexercised.  It is the fact that the central government has a power over, say, defence or external affairs or immigration which will inform the scope of executive power.  His Honour is not adopting a rule that the head of power must be exercised before one finds the scope for the executive power. 

That, we submit, is consistent with, I will call it our eighth boundary, your Honour Justice Bell, consistent with our proposition that in the outer boundary one looks at heads of power, exercised or not, to ascertain something about the limits, and there is nothing here in Justice Mason that the head of power needs to be exercised in order to find this limit.  Now, then if I can go to page 397, he says you do not stop there, you go further, and in the familiar passage in the middle of 397 concludes by saying:

But in my opinion there is to be deduced from the existence and character of the Commonwealth as a national government and from the presence of ss. 51(xxxix.) and 61 a capacity to engage in enterprises and activities peculiarly adapted to the government of a nation and which cannot otherwise be carried on for the benefit of the nation.

A critical passage – Davis rings in our ears.  Pape rings in our ears.  Williams rings in our ears. Can I pause, though, on that passage? We would submit that his Honour was not there reducing the matter to a simplistic question: whenever one or more States have the legal or financial resources to do a program of character X then the Commonwealth cannot do a national program X. If that were right, when one thinks of the types of categories which are within this area, many of them would disappear into the air. No one seems to challenge that CSIRO, which his Honour refers to in the next paragraph, is a valid Commonwealth activity and supported by section 61.

CRENNAN J:   All this turns on – I think one needs to look at what his Honour says at about point 4 of the page:

the Commonwealth enjoys, apart from its specific and enumerated powers –

which he has accepted is a starting point for the bounds of executive power -

certain implied powers which stem from its existence and its character as a polity –

He has referred up above to two cases - Burns v Ransley and The King v Sharkey which throw up internal security‑type issues.

MR GLEESON:   Yes.

CRENNAN J:   So then he goes on to say:

So far it has not been suggested that the implied powers extend beyond the area of internal security and protection –

which would be part of the prerogative, on one understanding, in relation to -

disaffection and subversion.

But he goes on to say -

But in my opinion –

and this is the gravamen of it -

there is to be deduced from the existence and character of the Commonwealth as a national government and from the presence of . . . 61 a capacity to engage in enterprises and activities peculiarly adapted to the government of a nation and which cannot otherwise be carried on for the benefit of the nation.

So, two conditions are in there in relation to his conception of the notion that there are certain implied powers which the Commonwealth has as a polity which exceed the enumerated heads of power in section 51 – or 52.

MR GLEESON:   Taking up your Honour’s point in those two stages, at the first stage, his Honour is using the enumerated heads of power of a legislative power to inform, we would submit, the scope of executive power ‑ ‑ ‑

CRENNAN J:   Yes.

MR GLEESON: ‑ ‑ ‑ whether exercised or not. His Honour is not saying heads of legislative power turned into laws are what inform section 61, it is the existence of the head of power informing you that that would be an appropriate area for the Executive. He is then saying, but there is more, both in this area of security, and in this critical passage I am dwelling on. What I am putting to the Court is that the critical passage should not be read in any narrow sense, because the example his Honour goes on to give is the CSIRO.

Now, one can readily imagine that, depending upon a political judgment made at a particular point in the history of a nation, different views could be taken on how scientific research could be done.  One political view, for which people would be answerable to Parliament and then the people, would be that science can be done best by competition between institutes or universities, perhaps.  Private institutes or universities, perhaps, funded with some Commonwealth money.  The CSIRO does not reflect that political conception.  It reflects the conception of the benefits of doing scientific research in one place with Commonwealth funding for the nation are appropriate for the expenditure of public money.

CRENNAN J:   Is it part of your argument that the chaplaincy program is peculiarly adapted to the government of a nation and cannot otherwise be carried on for the benefit of the nation?

MR GLEESON:   Yes, when one understands this program at least on the facts we have, and that is not to say as Williams (No 1) concluded on the facts there and the facts were different - we did not have these facts in Williams (No 1).  In Williams (No 1) the essential facts were Queensland had done and was doing a similar scheme on a smaller scale and the Commonwealth was purporting to do a national scheme.  That was essentially what the court had.  The court in the majority in a factual finding said, well, if Queensland is doing a chaplain scheme, you can never get yourself within Justice Mason’s formula.

But the question is whether it is reasonably open to the Parliament to consider that the national uniform scheme which has the standards which I commenced to take your Honours to this morning which are to apply in every one of the 3,500 schools in Australia where the scheme is rolled out, could be viewed as providing something over and above or different to simply saying we will leave it to each State to have a scheme if they want to, in other words, seven or less State chaplains’ schemes will not necessarily equal one uniform scheme. 

So the reason I was dwelling on the CSIRO is, if you ask the question is it impossible for the States legally and practically to fund scientific enterprises which engage in the sort of work CSIRO does, the answer may well be no, as in it may be possible to conceive of science being done in seven or more than seven public and private institutions under State control.

But does the CSIRO, at least within an available political judgment, offer something which may not be achieved by seven or more parallel scientific institutions?  Answer, yes.  We would urge your Honours to read that critical paragraph in no narrow and limiting sense and to permit of judgments to which the Executive will be responsible to Parliament and Parliament to the people to allow for the sort of activity I have identified.

KIEFEL J:   Mr Solicitor, do I take it from what you have said that Queensland continues its scheme?

MR GLEESON:   The facts are Queensland continues a small scheme.  It spends about $1 million per year.  The Commonwealth scheme is $74 million.

KIEFEL J:   Bigger and better.

KEANE J:   Mr Solicitor, does it matter that when the CSIRO was established under that legislation in 1951, various countries around the world were setting off nuclear explosions – that this sort of scientific research involved necessarily matters of national defence?

MR GLEESON:   It does matter, your Honour, and that clearly is why it would be immune from challenge ‑ ‑ ‑

KEANE J:   And why no one ever thought to challenge it.

MR GLEESON:   No one thought to challenge it, and reasonably capable of being viewed of national benefit and concern, obviously yes.

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

AT 12.44 PM LUNCHEON ADJOURNMENT

UPON RESUMING AT 2.14 PM:

FRENCH CJ:   Yes, Mr Solicitor.

MR GLEESON:   Your Honours, what I will strive to do is conclude perhaps the Williams part of the case now that I have travelled there, including tying down what I have put to the actual judgments and identifying the criteria for reopening, then perhaps deal with section 32B fairly briefly and then deal with student benefits and hopefully hand over to Mr Donaghue about 3.30.

Your Honours, the concluding part in the judgment of Justice Mason in AAP, if I could go to it at page 400, bears on this notion of competition.  On page 400 in the second full paragraph what his Honour ultimately saw to be offensive about the scheme was that it was a deliberate step in a scheme calling for the setting up of regional councils throughout Australia operating not under the aegis of the States, but independently of and perhaps in competition with them and their institutions.  That, we submit, is the type of factual competition with State institutions that may take one beyond the boundary of permissible power, not a theoretical risk of competition merely because power is concurrent.  The last cases in this ‑ ‑ ‑

FRENCH CJ:   Does it matter if the States acquiesce?

MR GLEESON:   If a State acquiesces, one will not have the sort of impermissible intrusion on the States and their institutions which Justice Mason spoke of and, therefore, as I said this morning that may assist in indicating one is kept within the bounds of power.  So that is why we submit it is not a prophylactic rule, whenever there is concurrent power, the Commonwealth must not act without a statute.  It is a rule more concerned with whether there is a real‑life threat to the competence of the State institutions.  That is the point I wish to take up in Davis.

HAYNE J:   Just before you part from that, acquiescence expressed how?

MR GLEESON:   Sufficiently if there is a formal intergovernmental agreement - step one.  Step two, equally sufficiently if expressed by informal agreement as in the present case.  Your Honours, Davis is 166 CLR 79. At page 92 in the last full paragraph, the express question was whether the:

executive power under s. 61 of the Constitution extends to the incorporation of a company in the Australian Capital Territory having as its objective the commemoration of the Bicentenary –

In that sense, one of the issues in Bogle which is the executive power being applied to incorporate a company, was squarely placed in issue in this case.  The passages on page 93 speak to the distribution of powers, informed again by the heads of legislative power, but not only that.  At the foot of the page in the important passage, the judgment said:

Thus the existence of Commonwealth executive power in areas beyond the express grants of legislative power will ordinarily be clearest where Commonwealth executive or legislative action involves no real competition with State executive or legislative competence.

Could I just dwell on that passage.  Firstly, its premise is that if one is within the areas of express grants of power, exercised or unexercised, one will be within the executive power.  Then it seeks to see the broader reach of it and the language is clearly non‑preclusionary – “ordinarily”, “clearest”, and “involves no real competition with State executive or legislative competence” and they emphasise that word “competence”. 

Now, that is invoking notions similar to the Melbourne Corporation limit.  We have identified, namely, is there something about the Commonwealth exercise of power which really has placed it in competition with State, executive or legislative competence.

HAYNE J:   Let me then give an example close to the circumstances of this case.  If you go back into the history of the Education Acts of Victoria the triple mantra was free, compulsory, secular.  If you go to the Education and Training Reform Act 2006 (Vic), section 1.2.2(2)(a), we find:

Government schools‑

(i)will provide a secular education and will not promote any particular religious practice, denomination or sect; and

(ii)are open to adherents of any philosophy, religion or faith.

There is expressed there an overarching idea about the way the State of Victoria wishes to organise its State‑provided schools.  You speak of competition, you speak of acquiescence, how are those ideas to be engaged in the face of a provision of that kind?

MR GLEESON:   That kind would be dealt with squarely by our seventh limit which is that the law of the State of general application, which is entitled to mandate what may occur in the schools of those areas, cannot be interfered with or altered by the exercise of Commonwealth executive power.  That would mean for this scheme in Victoria no chaplain or secular worker enters any school, State or private, first without the consent of the principal and, second, subject to the operation of that provision:  cf, the problem in the AAP Case perceived in some judgments that this was truly setting up a parallel system of local councils which truly would intrude upon the ability of local councils, which are creatures of the States, to do their business. 

So, in that case our seventh suggested limit gives the State the priority it is entitled to through its exercise of legislative power and the only way the Commonwealth could trump that obviously is if it did have a head of power and it passed an inconsistent law, which it probably would not have.

HAYNE J:   Let it be assumed for the purpose of debate, and I do not wish to test the validity of the proposition, but let it be assumed for the purpose of debate, that the Victorian provision had the consequence that the provision of religious chaplaincy in the State schools of Victoria was not permitted.  Let us make that assumption regardless of whether the particular provision to which I have pointed has that effect.  What consequence has that for this notion of national program, national interest, et cetera?

MR GLEESON: That in that case, one of the relevant limits on the section 61 power would be engaged. You can contract and spend ‑ ‑ ‑

HAYNE J:   There could be no program because it cannot be national?

MR GLEESON:   It cannot be national.  Then ‑ ‑ ‑

HAYNE J:   There can be no program ‑ ‑ ‑

MR GLEESON:   The ‑ ‑ ‑

HAYNE J:   ‑ ‑ ‑ at all?

MR GLEESON: There could not then be this program in its national reach and ambition and if your Honour’s question then is, well, does the fact that Victoria has exercised its lawful legislative power to prevent that part of the national scheme, have an impact upon the ability to do it in, let us say, six other States and two Territories, five of the States and two Territories who do not have such an objection, our answer to that would be, the executive power would remain available to be exercised in those other States – full stop. That in fact would be the very working out of the separate preservation of the States and their ability to pass their laws subject to 109 and, on the other hand, the executive power under section 61, of which we have spoken and so the system is working in that situation.

Your Honours, the other aspect of Davis, to conclude it, was just in Justice Brennan’s important passage on page 111 at the top where he was denying a “cramped” construction of the power because it would deny Australia not only symbols but:

the benefit of many national initiatives in science, literature and the arts.

We would read those as words of expansion that these would be areas where on the facts it might be reasonably capable of being viewed as a matter of national benefit and concern.  He then quotes from Justice Mason in AAP and then, while saying that is an appropriate criterion, says it invites consideration of two things:

sufficiency of the power of the States to engage effectively in the enterprise or activity in question and of the need for national action (whether unilateral or in co‑operation with the States) to secure the contemplated benefit.

That is not simply, we would submit, a narrow formula.  Do the States have the legal and practical resources to do something similar on a separate basis but a broader question which allows one to look at the contemplated benefit and look at how it might be achieved?

Your Honours, the next step in Williams was to go to the judgments if I might for these purposes:  one, to indicate what we submit is its holding; two, to indicate the areas where the holding is not uniform amongst the four Justices in the majority; and, three, to indicate the key areas that we submit would call for reconsideration.  If I could start with Justice Crennan’s judgment at paragraph 534 the key holding is that ‑ ‑ ‑

HAYNE J:   What page?

MR GLEESON:   At page 355.  The key holding is that:

despite recognised exceptions, expenditure by the Commonwealth Executive will often require statutory authority beyond appropriation Acts –

and did so in that case.  The recognised exceptions are identified on page 342 at paragraphs 484 to 485.  They are three:  the prerogative in the narrow sense, the ordinary course of administration of a recognised part of government in the Bardolph sense and what I might describe as the Justice Mason formula from AAP picked up by Justice Brennan and subsequently in Pape.

Another key part of her Honour’s holding at page 354, paragraphs 531 to 532, is that the form of statutory authority necessary to meet the requirement might include what is described as “a special appropriation Act”.  We have provided your Honours with the Appropriation (HIH Assistance) Act 2001 there referred to and it simply appropriates the CRF to a maximum amount for a purpose described fairly succinctly. We would submit that one of the key animating principles of your Honour’s judgment is identified on page 346 as being to:

establish the equipoise between executive power under s 61 and the powers of Parliament –

That is, that the judgment is driven by responsible and representative government in the sense that has also been discussed this morning.

The effect of that judgment, we would submit, is that if one thinks of an inner circle, it contains the prerogative in the narrow sense and Bardolph and within that area no statute is needed.  If one thinks of the next circle it would involve all other areas where there is a head of Commonwealth legislative power unexercised.  In that case there is no executive power, you need to get a statute. 

It would then involve a third circle, which is a narrow Pape/Davis area, where the executive can act without a statute, and then beyond that perhaps there is a fourth circle where the executive cannot act and the matter is left to section 96 plus possibly some form of intergovernmental agreement.  All that is subject to the proposition that the sort of statute that is needed might include a special Appropriation Act, not simply an ordinary statute.  In the judgment of your Honour the Chief Justice there are some contrasts.  At paragraph 83 the recognised ‑ ‑ ‑

FRENCH CJ:   Sorry, page?

MR GLEESON: On page 216. The recognised categories in what I will call the inner circle not requiring a statute are firstly the prerogative in the same narrow sense, and secondly, the administration of departments of State in the sense used in section 64. Your Honour’s judgment does not expressly indicate whether Bardolph is an informing criterion in this exercise.  Your Honour had referred to Bardolph on page 212, paragraph 74 at the end, as analogous to section 64. However, on page 215, at the end of paragraph 79, had said that:

the issue before the Court in Bardolph did not involve consideration of the powers of the Executive Government of the Commonwealth acting under ss 61 and 65 of the Constitution.

One difference we would identify, respectfully, at that point is your Honour Justice Crennan’s judgment has used Bardolph in what I call the inner circle of non‑statutory executive power.  Your Honour the Chief Justice’s judgment, as we read it, has not adopted Bardolph, has adopted section 64, but your Honour’s did not need to and did not go into what section 64 might cover, and by that I mean, does section 64 extend to activities administered by a department? I say that because if your Honours would, while keeping this open, go back to AAP for one moment.  In AAP at page 362, Chief Justice Barwick at the end of the first paragraph drew a distinction between the servicing of the departments of State:

as distinct from the activities in which the departments seek to engage ‑

As we would read that distinction, which we would not commend, if that is applied to section 64 it might mean you can have your departmental expenses without prior statute, but the entirety of your administered expenses have taken you into the area of activities in which departments seek to engage. Your Honour the Chief Justice’s judgment did not need to and did not deal with whether an appropriation Act such as the HIH Act would be sufficient legislative authority. If I could move then to the principle which we submit informs your Honour’s judgment, it can be found inter alia in paragraph 83 itself at the foot of page 216, which is that in fields where:

the Commonwealth and the States have concurrent competencies subject to the paramountcy of Commonwealth laws –

under section 109 -

The character of the Commonwealth Government as a national government does not entitle it, as a general proposition, to enter –

the field -

by executive action alone.

The reason given is that that extension of power would, as Deakin predicted in the “Vondel Opinion”, correspondingly reduce the power of the States and compromise a truly federal government.  That, we submit, as an animating principle hinges on a federal conception which we would submit is not identical at least to the animating principle in your Honour Justice Crennan’s judgment and I need to respectfully submit, and I do, that there is a problem in this as an animating principle.

The effect of what is put there is that whenever there is a concurrent area of executive power, e.g. indicated by the heads of legislative power, the Commonwealth cannot act without a statute because that would compromise the States.  We would submit as a prophylactic rule that involves an element of significant overreach and does not govern the fact that in many areas of concurrent power the Commonwealth may act, the State may be content not to act or the State may act in its own manner and there will not necessarily be any competition which impinges on the federal balance.  I have asked for your Honours this morning to be given again the “Vondel Opinion” which I would ask you to go to for one moment for this purpose ‑ 12 November 1902.  In that opinion the part your Honour is referring to is at page 132 at the top and Deakin said:

As a general rule, wherever the executive power of the Commonwealth extends, that of the States is correspondingly reduced.

Read in the context of what comes just before it, as well as the whole opinion, Deakin was speaking of that category of cases where executive power has been distributed either exclusively to the Commonwealth or to the Commonwealth in a paramount sense, and he refers to that second conception on page 133 in the fourth full paragraph.

We would respectfully submit that what Deakin was predicting was that in areas where executive power is exclusively given to the Commonwealth, or given to the Commonwealth with paramouncy, there will be a corresponding reduction.  Deakin was not, we submit, making the different point that if you have concurrent power, then that of itself produces a reduction in State power.

HAYNE J:   But the fundamental premise of the Deakin opinion is at 131 in the last six lines.

MR GLEESON:   One of the fundamental premises, because I wish to submit that the Deakin opinion, in fact, is consistent with the manner in which this issue was dealt with in all the cases I have been to prior to Williams, and I say that because, if your Honours would commence on 130, before 131. On 130, in the paragraph at about point 3 which commences why any distinctions should be made, the first provision of the Constitution that Deakin goes to to illuminate the breadth of executive power is section 64, and your Honour the Chief Justice has referred to that in Williams, and we embrace that.  So, that is one aspect of the width of the power.  He then goes to section 70, as also indicating the width ‑ ‑ ‑

HAYNE J:   Just a moment.  The reference to 64 is in response to the argument being advanced.  The argument advanced, see page 129, item (a) at the foot of the page, refers to departments actually transferred.  Then, Deakin deals with that and why any distinction should be made between those transferred, those newly established.  Is not Deakin there simply dealing with the argument as advanced?

MR GLEESON: I would suggest that he is doing more, because he is saying, you have put forward a very narrow view of executive power, it is only the two categories, departments transferred and the cases of actual laws. That calls for me to look more broadly to what executive power is comprised of. I start with section 64. That must be there as well as section 70, so that says that the proposition that it is limited to departments actually transferred is too narrow. So, at that point, we have section 64, plus section 70, then goes to the larger point, which is, what else is there? At the foot of 130, says it is a:

wide sphere . . . flowing naturally and directly from the nature of the Federal Government itself, and from the powers, exercisable at will, with which the Federal Parliament was to be entrusted.

That is the point at which your Honour Justice Hayne says, the answer given to that is, if there is a head of legislative power, exercised or not, that informs the scope of the executive power.  So that is the second broad head of executive power in the opinion, and in the third head is the prerogative, explained on page 131.  We would suggest Deakin was using the prerogative in the Diceyan sense, on that page, and that then leads to the conclusion that we have come to. 

Finally, I might note on page 132, when Deakin quotes the draft version of section 61, which said the power extended to all matters in which the legislative powers may be exercised, and then with Griffith’s amendments different words were used but to the same effect. That supports Deakin’s proposition. In the third judgment of ‑ ‑ ‑

KEANE J:   Mr Solicitor, before you go from the Chief Justice’s judgment, that paragraph 83 ‑ ‑ ‑

MR GLEESON:   Yes.

KEANE J:  Is not the point that is being made there that insofar as it said that the Commonwealth Government as a national government has executive power that pertains to it as a national government, is not the point that is being made that, where there are concurrent powers, it is unlikely as a general proposition that it can truly be said that the relevant activity is an activity that obtains or pertains to a national government as such, because they are by definition activities that the Constitution recognises can be pursued by State governments. The necessarily federal distribution of these powers, with some of them remaining with the States, is necessarily inconsistent at least as a general proposition with the notion that they are powers that pertain to a national government as such. What is wrong with that proposition?

MR GLEESON:   What is wrong is this, your Honour.  Let us think about the concurrent powers or competencies that this is grappling with.  In particular, they are ones indicated by the heads of legislative power, so we are looking at postal, telegraph, defence, external affairs, immigration.  They are heads of power where there is, as we would read it, concurrent competencies in the sense that the Commonwealth Executive, we would submit, can act:  it is within its bounds of power, where the State can also act so far as it is within its territory or otherwise sufficient extra territorial.  That is seen to be a problem in this paragraph 83. 

It is seen to be a problem, if I take the area of say, immigration or aliens, that the Executive might be acting at the Commonwealth level and that the State might be able to act in respect to aliens within its territory and therefore, as a general proposition, it is said, you cannot enter such field of activity by executive action alone.  The consequence being, before you can do an executive act in the area of say aliens or immigration, as the national government, even though that is the head of power you have allocated to your legislatively, you must first get yourself a statute.  There is no parallel requirement on the State even though it is in a concurrent area.  It does not have to get itself a statute. 

So the effect of it is, in an area where both can act executively, the State can act:  the Commonwealth cannot act unless it first gets a statute.  What is wrong with it?  They are indicated as being matters suitable for a national government by reason of the allocation of legislative powers to the Commonwealth, even if concurrent.  And where paragraph 83, we respectfully submit, departs from not only Deakin but the entire tradition is that previously the fact that you are acting at least within a head of legislative power such as in Kidman, purchase of a ship for defence purposes, was enough to say, I may exercise my executive power even though a State could purchase a ship as well. 

Paragraph 83 says, you must first get a statute to authorise you to purchase the ship and indeed appropriation will not be good enough.  So what is behind it is, appropriation is not good enough for you to act within at least the areas indicated as your areas by the heads of legislative power.  Then why is it that the appropriation is not good enough is the final aspect I wish to go to in the judgment.  At paragraph 60 on page 205 - and this really comes back to the same point - in paragraph 60 the second sentence reads:

A Commonwealth Executive with a general power to deal with matters of Commonwealth legislative competence is in tension with the federal conception which informed the function of the Senate as a necessary organ of Commonwealth legislative power.  It would undermine parliamentary control of the executive branch and weaken the role of the Senate -

i.e., if you could enter areas of power indicated by the Constitution without going to Parliament and then there is a recording of the plaintiff’s submission which I would read as being accepted that an appropriation should be dismissed as a weak control. That part of the reasoning is what I addressed the Court on this morning, that we submit the role of the Senate through appropriation is not weak, is not a role that requires constitutional supplementation by a requirement of authorising legislation beyond the appropriation and it is for the Senate to exercise its powers under 53 and 54 to determine whether it is content with the appropriation offered to it or whether it wishes to see the matter dealt with by a different appropriation.

In the third judgment of your Honour Justice Bell and Justice Gummow on page 233 at paragraph 139 there is a recording of a submission made by the plaintiff in reply.  This was Mr Walker in the dying minutes of day three of the case when he finally affirmatively decided he did not believe in the common assumption and what Mr Walker put was that the ordinary course of administering a well‑recognised part of government, that is Bardolph, could be exercised without a statute and in this part of the formulation of it the servicing of the departments of State as referred to in section 64 is treated as part of Bardolph, and the judgment importantly goes on to say:

including the funding of activities in which the departments engage or consider engagement.

Footnote (302) - cf Barwick CJ in the AAP Case at 362. We would read that as being drawing a departure from Chief Justice Barwick and recognising that section 64 extends not just to the departmental expenses but can include the activities in which the departments engage, and that must be right because that is the political and ministerial responsibility of which section 64 speaks. The Minister is responsible to Parliament for all of these activities and expenses, not just the departmental ones.

Now, if that is correct as the starting point, that would give a relatively broad and expansive and open‑ended scope for what I am calling the inner circle – the activities of government which do not need a statute, and they can extend into the administered activities. Then, one asks the question, why did this program fail that test, because that submission is dealt with at 140, and the Commonwealth submission is recorded that because the program had commenced in 2007 and had continued for several years, that brought it within, as it were, section 64 and Bardolph, and the riposte was, well, you are assuming the answer to your question.

Now, pausing there, the judgment does not further expressly say why the program could not be brought within Bardolph or section 64. At 141, the judgment says that the Bardolph category could include intergovernmental agreements and it says particularly where there is a referral of legislative power.  We would read the “particularly” as not meaning exhaustively, meaning that this is an instance, but that intergovernmental agreements, even without legislative engagement, could come within the Bardolph formulation.  Then, from 142 onwards, to 146, the proposition is that this particular scheme needs a statute because it does not come within a Pape/Davis territory.  Pape and Davis are quoted in paragraph 144, and it might be noted that the quote from Justice Brennan deals with when he:

invited consideration of “the sufficiency of the power of the States to engage effectively in the enterprise or activity –

and that, of course, is the passage I took you to a little earlier that goes on to say, and also will involve the question of the need and the appropriateness of dealing with it at a national level. At 145, there is a proposition about the Senate that, as we would read it, if you only have a No 1 Appropriation Act, there has been a limited, and, might it be assumed, deficient engagement with the institution’s representative government, we would submit, no, not a deficiency – that is the engagement as provided for by the Constitution and taken up by the Senate and then in 146 ‑ ‑ ‑

CRENNAN J:   What about the last sentence in 145?

MR GLEESON:  

It is not engaged in the formulation, amendment or termination –

Answer:  that is correct, in fact, as to what happened.  If, however, the proposition is that what is necessary for the statutory engagement is what is in the last sentence of 145, and that is not said in terms in the judgment, that would impose a tighter constraint than your Honour Justice Crennan’s judgment, because the HIH would fail on that test.

That would be the most rigorous form of test, and on that form of test, it may be, although this point is not taken, section 32B might be in trouble, because you cannot simply identify programs, you must have the Parliament involved in front, middle and end of agreements under the programs.  Now, we do not read the last sentence as requiring that as the form of statutory authority, although that may be a matter for debate.  We read it as an observation that that did not happen.  We do respectfully criticise 145 as suggesting that the degree of engagement which occurred, in fact, due to the Senate exercising its power should be treated as deficient and requiring some extra requirement.  Then, 146, the ultimate conclusion is you are not within Pape territory because:

the States have the legal and practical capacity to provide for a scheme such as the NSCP.

To which we respectfully say, yes, so far as one looks at Queensland doing a Queensland chaplain scheme but not necessarily, yes, so far as one is speaking of a scheme with the national uniform benefits and ambition that I have spoken about.

So, in the end as we would reach this judgment, while it has started with a framework in 139 where – which is, perhaps, broader than your Honour the Chief Justice’s inner circle, at least as expressly stated because it is a very broad view of section 64 and it is a broad view of Bardolph and you do not need a statute there.  But, it seems to have in common with the other judgments that if you fall outside that circle the mere fact that you are within an area of concurrent competency – bringing me back to what I put to Justice Hayne – is not enough.  You do need a statute.  Beyond that, if you can get within Davis or Pape you do not.  Beyond that, the matter must be left, it would seem, to the States.

FRENCH CJ:   When you speak of an area of concurrent competency, do you judge that by reference to some hypothetical law?

MR GLEESON:   No.

FRENCH CJ:   How do you judge it?

MR GLEESON: You look to the indications in the Constitution which include the heads of federal legislative power to inform a conception of what are the boundaries beyond which a central government should not go. You do not hypothesise a law but you say, for instance, if I am incorporating a company to run a migrant hostel that seems fairly clearly within the boundaries because I have a power over immigration. In some cases, you will see a number of heads of power which together might create a web, as it were, of what is an area of national benefit or concern.

Your Honours, our conclusion on the effect of these judgments is that while it is clear that a scheme with the features of the NSCP cannot be supported under executive power of section 61, absent a statute beyond a No 1 Appropriation Act, there are then uncertainties as to what are the more precise limits of the principle and what is the form of Parliamentary approval necessary and what are the features of the Constitution which animate the principle.

In terms of the grounds for the Court to reconsider Williams, we have dealt with those at paragraphs 106 to 110 of our written submissions, and I might simply at this point refer your Honours to those four grounds.  The one matter I needed to address orally was the suggestion that the Court has no power to reconsider Williams or, put differently, Mr Williams as a citizen who won in case No 1 has a right not to have the Court reconsider the propositions established in the first case.

As to those matters, we would refer your Honours to Queensland and Western Australia 139 CLR 585 for the proposition that in that case one of the States raised the identical legal issue and identical claim – that is Queensland – and nevertheless the Court ruled it had power to reconsider its earlier decision. Western Australia raised an identical claim, differently framed, and the Court ruled likewise.

Mr Williams has suggested that because he is an individual he has some higher status even in constitutional matters than one of the polities and he can insist upon having the binding force of Williams (No 1) not reconsidered by the Court.  We would submit the Court should not adopt any such principle.  The effect of this case directly will govern SUQ’s funding agreement which affects several hundred schools in Queensland and the students and parents in those schools.  As a matter of ratio, it will probably affect the 3,500 schools, school students and parents across Australia which are part of the program.  It cannot be that the mere fact that it is the same plaintiff means that the Court cannot consider the correctness of the earlier decision.

HAYNE J:   May I take you back to a more general point informing the submissions you have made about Williams and executive power generally?  The submissions you make seek to proceed by identifying limitations on executive power, is that right?

MR GLEESON:   No, your Honour, they seek to identify ultimately a content for executive power which recognises limits or boundaries, and it has to start somewhere.  Our entry point is, what is the type of exercise of power in question?  It is not making a treaty.  It is not declaring war.  It is doing something different.  It is contracting or spending.  That is an entry point, no doubt, but it is not an exit point, and so we then seek to identify limits or boundaries on that type of power.

HAYNE J:   Confining then attention to your submissions about the executive power to spend or contract, you seek to define that power by limitation.

MR GLEESON:   My answer would be repetitive, but it would be content plus limitation.

HAYNE J:   Is there no point in persisting, Mr Solicitor?  You have made your answer.

MR GLEESON:   Well, your Honours, I am seeking to be helpful.  If I can do better to another question, then I will.

CRENNAN J:   May I ask you a question then, Mr Gleeson, if it is convenient?  In the “Vondel Opinion”, and you asked us to go back to that, if you look at the top of page 131 in the third full paragraph, the opinion is expressed that:

The executive authority of the Commonwealth, unlike its legislative authority, is derived in the first instance directly and immediately from its fountain‑head, the Crown.

That is recognisably a reference to the way in which the Crown was perceived in the United Kingdom prior to Federation. Now, having regard to an idea that when you have representative government sovereignty does not reside in a Crown, as it were, it resides in the electorate, and the expressions of sovereignty are then undertaken by separate arms of government, do you wish to make any comment about the distinctions which might be made between that conception of the fountainhead of executive power and the quite distinct conception in representative government, which is it is not the Crown which reposes all aspects of government represented by the three separate arms under Chapters I, II and III, but sovereignty in an ultimate sense resides with the voters.

MR GLEESON: No doubt that has to be brought to account and it is not brought to account in these pages written in 1902. One still asks, though, what are the circumstances in which the executive power, which bears this more than evanescent trace of the powers of the Crown, has been reduced by our Constitution to a purely statutory power for the purposes of that sovereignty of the people. We know that in certain areas, particularly where civil liberty is concerned, and this had happened even in the British tradition, it was made clear that while at one time the Crown could have detained any citizen, deprived a citizen of liberty, that could now not be done except under ‑ ‑ ‑

CRENNAN J:   Search warrants are another good example ‑ ‑ ‑

MR GLEESON:   There are examples ‑ ‑ ‑

CRENNAN J:   The Secretary of State deciding general search warrants are a good idea and the common law judges saying no, you cannot do that.

MR GLEESON:   Yes.  In part that is a function of the nature of the power that is being exercised, its impact upon the individual citizen, but also ‑ ‑ ‑

CRENNAN J:   It is highlighting, if you like, the lack of equality, as it were, in the conception of the various arms of government because under a separation of powers conception there is behind that – not that the boundaries will not be porous at some points, they might well be, but that you do not have the Executive overweening the legislature and you do not have the legislature overweening the Executive and the powers of the judiciary are to declare the law, so in a very simply paradigm, Parliament makes the law, the Executive implements it and administers it and if there is a debate about what a statute means, the judiciary declare what it means.

MR GLEESON:   In terms of the sovereignty of the people, one brings it to account and says, is the nature of power being exercised one which requires the power to be reduced from what it would have been in the tradition, namely, non‑statutory to statutory, and if so, why, and if so, in what circumstances.  What we respectfully put about Williams as we read it, we may have read it wrongly, what we respectfully put is, what it has said is that a type of exercise of power contracting and spending which within the tradition was regarded as sufficiently controlled by the people’s representatives, through the process of appropriation plus the other limits I have been to, not just appropriation but plus each of those other limits, is that power now to be identified as one which in some but not all circumstances needs an extra control which the Parliament must exercise before it can be exercised? 

Our answer to that is, no, and if there is to be such a limit, what are the circumstances in which the extra control bites, when it does not bite, and we say that once you look at the division between those circumstances as it has flown out in Williams, if the sovereignty of the people is the driving, animating force of the principle, it does not seem to sit very squarely with that, that for example you can do Pape/Davis activity which could be of the largest scale in the nation, assuming Pape, you did not need to engage the tax system and you just sent everyone $20 in the mail through the post, the ruling of Pape is that could done without the people’s representatives being engaged in Parliament beyond the appropriation and yet the effect of that on the people is probably far greater than many of the other schemes we have got. 

So, we respectfully say with Williams that the difficulties are firstly, you just should not find from the Constitution an extra requirement that when you are contracting and spending appropriation plus the other seven or eight limits we have identified are not good enough. If you are searching for an extra requirement, the formulation of when you need it and when you do not, we respectfully put, does not work from Williams and does not actually match the animating concern of sovereignty of the people.  It is not necessary for that concern and it does not match that concern.  If our broader reading ‑ ‑ ‑

CRENNAN J:   Well, political decisions are not just justiciable.  This is a point that is at the heart of this debate.  So in a sense you are putting, are you not, that the Executive, subject to your seven limitations, has unfettered power to contract and spend which would have the effect, would it not, that with novel policy, whether or not that is adopted for Australia is a decision made by the Executive, not by Parliament?

MR GLEESON:   Well, no, no.  It is a decision made by the Executive but subject to the relevant control of Parliament, (a) without being too repetitive, (a) because it lies in the hands of each House of Parliament including the Senate through appropriation to ensure that the policy is sufficiently scrutinised and I went through how all the Senate needs to do is to say ‑ ‑ ‑

CRENNAN J:   I am not asking you to repeat that.

MR GLEESON:   No.  So there is that control, and then there are the people’s representatives in Parliament ‑ ‑ ‑

CRENNAN J:   That is not the same is having a debate in Parliament about a policy about which there are multiple views in Australian society though, is it?

MR GLEESON:   Factually, it is not, but the question we are grappling with is, what is the minimum irreducible requirement that you must engage in because of the Constitution?  Laws of very grave moment may be passed with little debate in Parliament but on every occasion subject to the conscience of each parliamentarian and their ultimate accountability to the Australian people.  That is why you asked me about the sentence at the end of one of the paragraphs your Honour Justice Bell and Justice Gummow’s judgment, if the requirement was Parliament must be engaged in formulation, amendment and termination of the program, that is an even more strict notion ‑ ‑ ‑

CRENNAN J:   I do understand that.

MR GLEESON:    ‑ ‑ ‑ and we say one would not be going there.  But, when one comes back to where, just at a very practical level, with the hundreds and hundreds of Commonwealth programs, and one looks at Williams, one says with a program, what are the circumstances in which there is now the additional requirement beyond appropriation where I must refer to Parliament in some fashion?  What are the circumstances ‑ ‑ ‑

CRENNAN J:   But, when you talk about hundreds and hundreds, hundreds and hundreds will just be the ordinary – in the Bardolph sense there will nothing remarkable about them.

MR GLEESON:   Well, in the Bardolph sense we would be saying, when the Court had the constitutional fact on each of the programs in the schedule of section 32B many of them may satisfy the Bardolph ‑ ‑ ‑

CRENNAN J:   When one talks about contracting and spending it is not as though it exists in the abstract, it is usually contracting and spending in relation to some political decision about something which is to be undertaken.

MR GLEESON:   Yes, and ‑ ‑ ‑

CRENNAN J:   That is the significance of the legislative heads of power in this context to which must be added, of course, there is this separate element of the prerogative in relation to what the executive can do.  I am not seeking to deny that, but I am just pointing to the fact that the legislative heads of power are a guide to the sorts of topics which can be covered by political decisions, and contracting and spending is normally related to a political decision in relation to government.

MR GLEESON:   And the move in Williams is to say that even if – two things.  One is if you are within a head of power you must go to Parliament and get a separate law unless you can come within recognised exceptions, that is the first thing.  To that you might say, well, what is difficult about that except inconvenience or perhaps the positive benefit of exposing yourself to a law.  The answer to that is that the appropriation process as we have submitted sufficiently meets that concern.

The second effect of requiring a law is that in effect through a depth requirement, if you use that language, a breadth requirement has been introduced, because it means that you will only ever be able to do programs within the exercised heads of legislative power unless you get yourself within a narrow Davis/Pape exception, and in that sense the grand debate which AAP never finally resolved, at least some judges said you could go well beyond the heads of power or beyond them, has been resolved de facto by saying, under a prophylactic rule if you do not get a statute you do not act  If that is the rule, and that is why I have said we submit there is a difference in the animating principles in the judgment, that is not so much directly representative government, but that is ultimately paragraph 83 of your Honour the Chief Justice’s judgment that it is a conception of federalism as to what areas you can stray into.

FRENCH CJ:   Can I just take you for a moment to paragraph 152, just so I understand the role of this national benefit limitation?  Are you proposing – this is in 152 of your submissions – an overarching or substituted limitation of some kind because you are putting it in the alternative?  Can I just understand the way in which it fits with your other limitations?

MR GLEESON:   Yes.  The other limitations are there – they are given.  They are consistent with Williams and they are not withdrawn. The proposition is that the other limitations have met the requirements in the Constitution that we have been discussing.

FRENCH CJ:   Yes, I understand that.

MR GLEESON:   If they do not and there is something ‑ ‑ ‑

FRENCH CJ:   If they are not enough, you mean, to describe it?

MR GLEESON:   If they are not enough and if there is a further breadth requirement, what we are urging is that instead of simply seeing this as pockets of permissible non‑statutory activity, one identify that they are species of a genus and, in effect, we are inviting the Court to adopt, as the general proposition but to be applied in each case, constitutional validity depends upon whether it is reasonably capable of being seen as a matter of national benefit and concern as discerned from the text and structure and these are recognised categories of cases where the Court has found that to be so.

To be practical, in the present case, the effect of it would be that for this program we would certainly invoke 153.1 as a species that is relevant to the present case – 153.2 and 153.3 in the sense in which I have sought to explain them, we do not have 153.4.  We submit we do have 153.5 but the ultimate limit which we submit is a real one is the one identified in paragraph 152 as informed by these case‑by‑case developments.

FRENCH CJ:   If we go forward for a moment to 156 where you speak of the contract with a trading corporation ‑ ‑ ‑

MR GLEESON:   Yes.

FRENCH CJ:   ‑ ‑ ‑ relating to its existing activities, is that put on the basis that it is subject to that general limitation about national benefit and concern?

MR GLEESON:   It is an illustration of the general limitation and it is an illustration of 153.1.

FRENCH CJ:   It is enough that it is a trading corporation?

MR GLEESON:   Mr Donaghue is going to deal with that particular one.  Could I just leave that for him, your Honour, so we do not answer twice?

FRENCH CJ:   It is just so that I understand – the proposition is that if it engages with a trading corporation that answers the eighth limitation? 

MR GLEESON:   And it relates to the trading corporation’s existing activities.

FRENCH CJ:   Yes.

MR GLEESON:   You cannot bootstraps.

FRENCH CJ:   Yes.

MR GLEESON:   That is the proposition.

KIEFEL J:   Mr Solicitor, just before you go on from Williams, could I just ask you this?  In the way in which you have discussed the holdings in Williams, I take it that you do not regard them as particularly informed by what was held in Pape.

MR GLEESON:   Not in the critical holding as in Pape was resolved on the basis of we need to find a power, separate to appropriation, that ‑ ‑ ‑

KIEFEL J:   I meant in the reasoning of the various judgments in Pape and, in particular, I would like to come back to paragraph 152, whether or not you see anything there expressed as contrary to the reasoning expressed in Pape.

MR GLEESON:   I would submit it is not contrary to the reasoning.  No doubt, for instance, in Pape at paragraph 127, in your Honour the Chief Justice’s judgment, there was some foreshadowing of the ultimate width of section 61. On the application of Pape, the majority judgment was that it was sufficient to bring it within section 61, that there was the factual circumstance, shortly described as national crisis. Now, I probably do need to say to your Honour that we would identify, in the paragraph of the submissions, that a national crisis, if that is a category, should be seen as an illustration of the larger point as opposed to being a constitutionally defined category in its own right and in that sense ‑ ‑ ‑

KIEFEL J:   It is not a standalone, is what you are really saying.

MR GLEESON:   It is not a standalone.  What it has in common with the other categories is it is one of the areas where you might reasonably be able, as Parliament, to view it of national crisis and concern.  One of the criticisms of the minority in Pape was how does national crisis become a constitutionally informing criterion?  How much crisis, how much money is needed, at what point do States become incapable of ‑ ‑ ‑

KIEFEL J:   You probably do not need to go there, but you – your point is that you are, in a way, relying upon Pape.

MR GLEESON:   We are putting that under the umbrella, and inviting it to be put under an umbrella which does create a constitutionally suitable test for a court to apply, paragraph 152 and then 153.  Your Honours, can I change the song, although it is probably by now a very grating song, and talk about a statute, as briefly as I can – much of this was covered yesterday – and just invite your Honours to go to the section 32B and the regulations.

Section 32B has a distributive operation. It operates on an arrangement by arrangement basis. One looks at an arrangement. One assumes an absence of power to make, vary or administer it. That is an absence of executive power, typically, as your Honour Justice Bell suggested yesterday, because you lack a statute or perhaps because you are otherwise outside the reach of section 61. Then you ask is there an enlivening regulation in respect to the arrangement we are focusing on?

That regulation can be one of three sorts.  It can focus on the arrangement per se, the class of arrangements, or it can focus on the program.  We differ from Mr Hinton and Mr McLeish.  Under (b)(iii), what is to be specified in the regulations is the program, not the purpose, and the purpose is relevant in a statutory but not constitutional sense.  You must have a purposive link between the arrangement you are focusing on and the program that has been specified in the regulation.

KIEFEL J:   Section 32B(1)(b)(iii) would require both the arrangement and the purposes of a program to be specified to make sense, would it not?

MR GLEESON:   I would submit not, your Honour.  One looks to a program – it has to be sufficiently specified to enable you to carry out the purposive link, of course.  In that sense, it may do it.

KIEFEL J:   Yes.

MR GLEESON:   But Mr McLeish’s point was you must, as it were, state in terms, here is the purpose of my program in the schedule.  We would submit not.  What that leaves is a statutory question.  Given this particular arrangement, the SUQ arrangement, given the program specified in the regulations ‑ item 407.013 ‑ is one for the purpose of the other?  Now, in the present case, your Honours are not vexed by that question because it is accepted that the arrangement is for the purpose of the program specified.

KIEFEL J:   You say that under (1)(b)(iii) the connection with the statutory head of power can be ascertained through the purposes of the program being specified.

MR GLEESON:   They could be but they are not required.  What must be specified is the program.  As a matter of statutory law you must sufficiently specify something which is a program in order to be able to carry out the test, does this arrangement have a purposive link to it?

KIEFEL J:   If one were to assume that there is a link necessary between the regulation and a statutory head of power, you would say that at least (b)(iii) provides a possible link because the purposes of the program are at least there set out?

MR GLEESON:   Yes.

KIEFEL J:   But that would then put in stark contrast (i) and (ii) where no purpose at all is specified, and only the arrangement.

MR GLEESON:   So in (i) and (ii) the question you would ask is:  is this law ‑ 32B ‑ insofar as it is enlivened by a specification of the arrangement, sufficiently a law with respect to a head of power?

KIEFEL J:   But you would have no requirement for a purpose in relation to the arrangement.  It would be any arrangement at all.  That is the distinction between (i) and (ii) on the one hand, and (iii).

MR GLEESON:   Yes, and that is why Mr Walker’s suggestion that there are many ways you can read this down we submit is not reading down at all.  But if Parliament wants to draw the link with the head of power or heads of power through the specification of the arrangement or the class of arrangements, it uses (i) or (ii).  If it wants to use program as the link, it uses (iii).  So, because of the distributive operation of the section, you simply ask for the arrangement for which power is presumed lacking, in our case, when I look to the program specified in the regulations, has that brought into life a valid operation of 32B in respect to one or more heads of power?  That is distributive because the language is distributive.  There is no question of reading down; 32B is always valid.

The second critical step is the regulation‑making power under section 65 we would submit is a power to make regulations which are valid, not invalid. So the only regulations one can make are ones which will enliven a valid operation of 32B. That is the reason why the whole of the plaintiff’s case supported by some interveners that there would be something impermissible in permitting the Executive to make regulations does not even arise. If the plaintiff were correct in its argument - we submit it is not - that to delegate to the Executive would lead to things which were not laws or would somehow offend the role of the Senate, the result would be that one could not make regulations of that character and the effect of the Act would then be limited to regulations inserted by Parliament. Section 65, on that view, would have no scope to do.

We also ask the Court not to entertain those issues because they are truly hypothetical.  They would depend upon what is not before you in challenge, that is a case where the Executive has purported to make a regulation enlivening section 32B.  You do not have such a case.  You do not need to deal with those issues.

FRENCH CJ:   The program is specified in the regulations pursuant to the amending Act, which is, of course, the program in issue, can be varied, can it not, by executive regulation?

MR GLEESON:   Yes, and then so far as it could be varied one would then bring back into play the operation of the Legislative Instruments Act, which would provide ‑ ‑ ‑

FRENCH CJ:   Yes, the parameters of validity for any such variation will of course be, in your case, constitutional limitation, something referable to a head of power, and perhaps the limitations in 32B(1) at the end where there is subjection to compliance, et cetera, but there are no policy parameters or limitations, no purposes, no scope or subject matter beyond the fact that it is to do with things on which money may be spent.

MR GLEESON:   Yes.  The only link would be Work Choices paragraph 417, would it be rationally open to the Executive to conclude that for the purpose of the enlivening of a law for the expenditure of public money through arrangements or programs either this new one should be added or this old one should be varied, and, again, we would say, as that issue is not before the Court there is no instance of the Executive varying what Parliament approved, the Court should not entertain it.  If necessary to entertain it, we have our submissions on that topic.  The third critical construction point was ‑ ‑ ‑

KIEFEL J:   Could I just, before you move from that - I know what you are saying about the hypothetical and the members of the Court have asked the parties who are seeking to argue the whole question of validity rather than determining this matter on a narrower basis, but given their wider arguments, if one deconstructs section 32B, does it read in this way, that the Minister or Chief Executor may enter into, vary or administer a funding arrangement under which public money is payable if (1) the arrangement is specified in the regulations, or (2) is a class of arrangement specified in the regulations, or (3) the arrangement is for the purposes of a program specified in the regulations where, as is will commonly be the case, the Executive itself determines (1), (2) and (3)?

MR GLEESON:   I was going to…..your Honour up until the last couple of words about the Executive commonly determining the case.

KIEFEL J:   Well, the regulations being made.

MR GLEESON:   The Executive may determine that case through regulations.

KIEFEL J:   Yes, may determine.  I said commonly.  But the point being, if that is the case, the choice is the Executive’s with the full panoply of what is involved in the choice, questions of policy, priorities, all of those things.  So, my questions are how do you say the Executive goes about choosing to specify an arrangement in the regulations and how is that action to be tested if there are no conditions, as there do not appear to be on that deconstruction built into the section.

MR GLEESON:   How does the Executive go about doing it? The Executive starts ‑ ‑ ‑

KIEFEL J:   I am sorry, I should not say how do they - we know how they do in a general sense, but how can one say the section comprehends the Executive going about it, or is it truly leaving it entirely to the Executive?

MR GLEESON:   It is not leaving it entirely to the Executive.  The Executive starts knowing Parliament has approved the core programs of some hundreds.  The Executive is then asking itself is there a rational basis upon which we would extend the current set of arrangements or programs to a new one.  Then, in asking that question, the Executive knows that the exercise will be ineffective unless there will be a valid appropriation for the money.

So, in that sense, the Executive has a framework, if this is not something that is in a PBS, or an additional PBS that is going to be a vain exercise, but it otherwise asks itself the question about rational connection, and then what it knows is, that because it will lay it before both Houses of Parliament, for most, but not all purposes, its decision will be capable of disallowance by either House of Parliament, and the “most, but not all” comprehends Mr Walker’s point, that if there be a short‑term expenditure of money which you can start and finish before the disallowance period expires or is exercised, but if you have otherwise got an appropriation, you are going to need that anyway, then section 42 does not have any work to do.  That is the best I can do, your Honour, on what the limits are ‑ ‑ ‑

KIEFEL J:   To an extent that assumes that the appropriation had predated the arrangement coming into effect.  That will not necessarily always be the case.

MR GLEESON:   Not necessarily, but if the concern is the window period, before the Legislative Instruments Act bites, it will either be an appropriation before or an appropriation in that window ‑ ‑ ‑

KIEFEL J:   But how are they guided – how is the Executive actually guided in determining whether to specify an arrangement which has not been in existence at all before?  The Executive is exercising power to make arrangements, choose arrangements, set them up.  How does this tell the Executive to go about finding a new program and deciding where to find appropriation?

MR GLEESON:   No doubt it is wide and I cannot put any more limits than I have put, but it is not saying to the Executive spend in blank.  It is saying the way you must focus your mind is you must focus on an arrangement which, by definition, will have terms.  Whether it is written or not, do not worry about that.

KIEFEL J:   But they will be the Executive’s terms.

MR GLEESON:   They will be the terms.  Then it will say focus on whether it be that arrangement as an arrangement or whether it be that arrangement for the purposes of a program – a program for the proper expenditure of public moneys.  So that does not say there is no constraint upon you.  One is looking for a rational connection between whether this program is appropriate for the expenditure of public moneys as well, of course, as the question of being within a head of constitutional power. 

It is not like the example Mr Donaldson gave of Dignan’s Case where what you delegate is the power to make laws with respect to interstate trade.  It has not engaged in that activity.  It is dealing with what will be a subset of the head of legislative power – funding arrangements – and giving the Executive the ability to expand in the terms I have identified.

HAYNE J:   It may be necessary to distinguish sharply between the arrangement and the payment under it, may it not?  Does not 32B deal separately with grants from arrangements?

MR GLEESON:    Yes.

HAYNE J:   Albeit in the one paragraph or subparagraph?

MR GLEESON:   Yes.  So, with the grant ‑ ‑ ‑

HAYNE J:   Just back up a bit.  If an arrangement is approved, could a payment be made under that arrangement without appropriation?

MR GLEESON:   No.

HAYNE J:   Is an available approach to the issue presented by 32B to say that the Act – that is the whole of the FMA – particularly 32B and the regulation‑making power is to be read as operating within the limits of legislative power, step one?

MR GLEESON:   Yes.

HAYNE J:   Section 15A would require it, would it not?

MR GLEESON:   Yes.

HAYNE J:   Step two, the regulation‑making power would not authorise the making of regulations extending beyond the valid field of operation of the Act?

MR GLEESON:   Yes.

HAYNE J:   Does it follow, as step three, that 32B, therefore, validly authorises only the making of payments and arrangements for the making of payments referable to the legislative powers of the Federal Parliament?

MR GLEESON:   Yes, and the step four we would add is if there is Mr Walker’s constraint expressed in terms of needs to protect the Senate such that it can only be Parliament making the regulations, then they will be the only regulations that can follow.  Perhaps, step five – if I can use it that way – which is where we come to blue pencil which is when Parliament enacted the law which included 32B plus the insertions of the regulations the structure of the regulations is deliberately severable and divisible and Parliament, with or without 15A, clearly intended two things:  firstly, that each item in the schedule would operate separately to enliven a group of arrangements and if 407.013 enlivens a valid operation of 32B – Parliament intended that – it would not matter a jot if any one or more other ones did not have that effect.  Separately, whatever else be true, Parliament intended that the regulations it was putting into the Act would operate irrespective of whether the Executive could add to the programs.  So, the first of those points is, as it were, a blue pencil point but it is an inbuilt severance, it is been structured severally.  The second would be simply a proper construction of the regulation‑making power.

HAYNE J:   Like the DPP Act considered in Hughes, the purpose of the FMA Act is generally to regulate the financial dealings, or at least some aspects of financial dealings, with the Commonwealth, and it finds its head of power, does it not, from each of the respective heads of power which would support the financial dealing in question or is there some other way in which the matter is better analysed or properly analysed?

MR GLEESON:   No, that is the best we can offer.  It awaits enlivening through regulations, but as passed as a law it has called upon each and every head of power that could be utilised to justify spending of public money, and then as the regulations are made they complete the operation of the law by themselves drawing upon such heads of power as are appropriate to each of them.

KIEFEL J:   That is why you say that this can only be determined on a case by case basis?

MR GLEESON:   And therefore to determine on a case by case basis is not avoiding the substance of the plaintiff’s argument.  It is saying that the whole scheme was set up with a distributive section 32B and an internally severable set of regulations, therefore case by case.

FRENCH CJ:   So, if you were to formulate the characterisation you would say, in its application to the National Schools Chaplaincy and Welfare Program, it is a law with respect to the subject matter of 23A?

MR GLEESON:   Yes, or 51(xxxix), our other ‑ ‑ ‑

FRENCH CJ:   Well, whatever.

MR GLEESON:   Yes.

FRENCH CJ:   Anyway.

MR GLEESON:   Yes, so that is the exact framing, your Honour.  Insofar as that item has enlivened one operation of 32B does that joint package constitute a law with respect to, in particular, paragraph 23A?  For that purpose, the final step in the exercise is what is the material which the Court may look at to answer the question?  If one looks at the item, it not only has a name – 407.013 – but it is clearly referring to an existing and continuing program. 

The objective provides some further material to identify the program, but our critical difference with the plaintiff – and we here agree with Mr Dunning for Queensland – is that having identified that as the program then, as a matter of constitutional fact, if there is any other material which serves to further identify what program did Parliament have in mind, then the Court may have regard to it, and in the present case that further material consists of three things.  Firstly, the guidelines, from time to time; secondly, the funding agreement, which incorporates the guidelines; and thirdly, the consultation paper that I started with this morning.  So, one looks at that material to ask the 51(xxiiiA) question.

Your Honours, the cases that we have referred to mostly in writing upon this correct approach to the framing of the question include Justice Gummow in APLA Ltd v Legal Services Commissioner 224 CLR 322 at 104 to 105, citing Noarlunga Meat Ltd.  Another supporting authority for this approach is in fact Chief Justice Barwick back in, dare I mention it, AAP page 344 to 345 where in the context of what was there the Appropriation Act, his Honour said that because the schedule was drafted by way of items following each other, in truth each item had to be considered schedually, separately if a question of validity arose.  He put it this way, the schedule itself severs and separates:

each item in the schedule as a distinct and separate subject of [in that case] appropriation –

and that is essentially the way in which Schedule 1AA has been structured here and that form of reading the law severally because in effect you are told to within the law is also confirmed in Pidoto at page 110.  For completeness on that topic, I am asked to tell the Court two things; firstly, Mr Walker alluded yesterday to a matter which is an agreed fact between the three parties.  If I could just read it on the record, it concerns yet another variation of the funding agreement. 

It is an agreed fact between the three parties that on 2 May 2014, the Commonwealth and SUQ executed a deed of variation for the purpose of further varying the terms of the SUQ funding agreement, referred to at paragraph 75 of the amended special case.  Second, the parties agree that the Court’s answers to questions 1(c)(iii) and (iv) of the amended special case will apply equally to the SUQ funding agreement as varied by this deed of variation.  That saves more pleadings. 

The other matter for completeness, your Honour Justice Hayne asked yesterday whether the Court should safely assume that each item in the regulations could be traced back to a departmental or an administered item in the relevant PBS.  The short answer is essentially, yes, subject to the qualification I wish to make in order to be accurate which is that for the majority of items in Schedule 1AA, you will find that item per se in a PBS.  For a smaller number of items, you may not find the direct correlation between titles but you will find the program referred to either within a larger group of programs or grouping together other programs, if that makes sense.  So, I think the short answer to your Honour’s question is, for relevant purposes, yes.

Your Honours, time does not permit me orally to say much more about the point we say does not arise which is Mr Walker’s Senate point.  That is paragraph 58 of the further amended statement of claim.  What the plaintiff there is urging the Court to do is to find an implied limit on legislative power which goes beyond anything declared by the Court in Williams.  The implied limit seems to be that in any case of spending, the purposes of the expenditure must be approved by the Parliament and cannot be the subject of delegation, even if there is a scheme such as the Legislative Instrument Act to require Parliament in most cases to be able to disallow the executive action and even if there must be a valid appropriation.

If that proposition were accepted, it seems to completely sideline various categories in Williams where it was recognised that you can spend without parliamentary approval and, for that reason alone, we would urge the Court not to accept it.  In addition, to the extent that it urges the Court to place a limit on executive power, we would say it is inconsistent with the position under section 96, where in Moran’s Case, Parliament can delegate to the Executive the setting of the terms and conditions for an arrangement with a State and it is inconsistent with the recognition by the Court in a number of cases that the ability for Parliament either to disallow the instrument, number one, or number two, to recall the authority, is sufficient to avoid any difficulty.  We referred to those cases, including Permanent Trustee, in our written submissions.

Your Honours, my final topic is an important topic of 51(xxiiiA).  May I ask your Honours to go to our written submissions, to paragraph 61 and 64.  We submit in paragraph 61, consistent with the Court’s authority in Alexandra Hospital, that a law will have a sufficient connection to the provision of benefits to students power if the law meets three criteria.  This is not exhaustive, but this is sufficient.  The first is that the law provides for payments to be made by the Commonwealth to a third party in consideration of the third party providing a service.

HAYNE J:   To a person, Alexandra Hospital?  To a patient?  It was a per patient amount.

MR GLEESON:   I am going to come in about two moments to that and put the submission directly that what your Honour said in the similar but not identical context of Williams (No 1) on this point was wrong, and wrong for this reason.  No doubt the payment formula in Alexandra Hospital was expressed on a per patient/per day basis.  The question though is whether that was critical to the ratio in Alexandra Hospital, that is, was it the law within this head of power because, amongst other things, Parliament had chosen that particular payment formula, or was it a law within a head of power for the more general reason as the Court said, that the benefit in that case could be viewed in one of two manners.

The first is that the benefit was the payment to the nursing home proprietor.  The second was that the benefit was the provision of services by the nursing home proprietor to the inpatients of the nursing home.  The Court said it did not matter which way you looked at it, because what was occurring here was the relevant provision by the Commonwealth, through the nursing home proprietor, of a relevant form of benefit.

The Court, with respect, did not regard the payment formula as necessary to bring it within power and if I could ask your Honours to go to Alexandra Hospital 162 CLR 271 and pick up this point in one moment. Starting at page 279 in the last paragraph, the third to sixth lines say this as settled matters:

First, the reference to “the provision” of the relevant benefits ‑ ‑ ‑

HAYNE J:   What page are you at?

MR GLEESON:   Page 279 at about point 7:

the reference to “the provision” of the relevant benefits is to be confined to the provision of benefits by the Commonwealth ‑

So that is taken, must be a provision by the Commonwealth.  Then over to page 280:

Thirdly, the concept intended by the use in the paragraph of the word “benefits” is not confined to a grant of money or some other commodity.  It may encompass the provision of a service ‑

That is the point we have picked up as our proposition in paragraph 61.1.  The Court does not there say only a provision of a service in a circumstance where the law of itself provides a complete means of identifying who will be the persons who receive the service.  There is then a reference to Justice Dixon in BMA and there is a discussion of nursing services, and then Justice McTiernan is picked up:

“The material aid given pursuant to a scheme to provide for human wants is commonly described by the word ‘benefit’.  When this word is applied to that subject matter it signifies a pecuniary aid, service, attendance or commodity made available for human beings under legislation designed to promote social welfare or security -

No statement by Justice McTiernan that the law must identify the person or persons.  Then it drops down to the relevant provision in the Act, section 47(1), and that indicates the payment formula is as I have described.  Then the Court says, well, is that a benefit?  The Court says you could look at it two ways:

the intended ultimate beneficiary of any benefit paid is the patient in the nursing home to the proprietor of which the payment will ordinarily be made. 

So it is ordinarily made to the proprietor:

there is room for difference of opinion about the precise identification of the “benefit” –

Then the two ways of identifying the benefit are identified and the Court says it does not matter which way one views the benefit.  The Court has not said there it will only come within this head of power if you adopt that particular payment formula.  Let it be tested this way.  Assume the payment formula in Alexandra Hospital was the SUQ formula.  The SUQ formula would be, “We will pay you a lump sum of X dollars in consideration of you promising to house up to Y patients per year and provide them with nursing home services”.

Would that be a law with respect to the provision of hospital or sickness benefits?  We would say yes.  From the law I have just hypothesised, can you tell from the law who will be the ultimately beneficiaries?  You cannot tell directly from the law.  You know who they will be in the operation of the law.  They will be those persons who the nursing home proprietor chooses to admit and care for during the relevant period.  To confirm that is the manner in which the Court was thinking, if one ‑ ‑ ‑

HAYNE J:   Just before you proceed, what appears at page 281 is in direct response to the argument that was advanced in the case.  If you go back to the transcript of argument, not the report, the transcript of argument in Alexandra Private, you will discover that the argument that was advanced was a singular characterisation argument.  The argument advanced by counsel for the plaintiff was, this is not a law with respect to the provision of benefits, this is a law with respect to nursing homes and regulation of nursing homes, and what appears in the passage you have highlighted at 281 is the Court’s riposte to the singular characterisation argument.

MR GLEESON:   Accepting that, one comes back to the question, does the case, as a matter of ratio, stand for the proposition that had the formula been of the type I mentioned, that is, a different way of structuring the payment, a lump sum of money provided, a certain number of patients were housed over a certain period, would that alter the characterisation of the benefit, and we would submit not because the benefit could still be viewed as the payment of a lump sum of money to the nursing home proprietor as it is said in the quid pro quo for providing the service, or it could be viewed to pick up the second characterisation on 281, the benefit could be viewed as the nursing care provided to who, provided to the patients who seek admission and are admitted during the relevant period.

So, my proposition is different from your Honour’s proposition and clearly enough is this.  In order to bring it within the head of power must the law itself provide the means of identification of each and every ultimate beneficiary of the benefit or is it sufficient if the law has provided for benefits for an identifiable class of persons where the class of persons matches the description in the head of power?  Your Honour is shaking your head, but let me ‑ ‑ ‑

HAYNE J:   Because section 47(1) set out at 280, which was the Act in question, speaks of “each qualified nursing home patient, for each day”.

MR GLEESON:   No doubt, but the question for the Court, the question for your Honours is whether the ratio of the case is limited to a payment structure as per section 47(1) of the Act or whether in Parliament’s choice of what will be the method of provision of benefits by the Commonwealth to persons who meet the class, it is open to Parliament to approve different payment structures, and what we see as the critical lynchpin is, has the law sufficiently identified the benefit as going to, directly or indirectly, the relevant class.

So, in the case of the SUQ law what the law has said, once one reads the material we have gone to, is there will be a provision of services – let me come back to Mr Walker’s original proposition that he put in answer to your Honour Justice Crennan.  He said there are two things that are impossibly uncertain from this law:  first of all, what services; secondly, to whom? 

We would say when one reads the item of the program together with the permissible material which helps you identify the program the services being provided are the welfare services meeting the identified needs of students as called forth by the decision of the principal that there are such needs within the school and the to whom question, the to whom will be those students within the particular school who bring themselves forward to take advantage of those services.

Let me take another example.  In your Honour Justice Kiefel’s judgment in Williams on this question, your Honour referred to a series of benefits that would be within the head of the power, a fairly broad list of benefits which we would embrace.  Where we seek to go a step further than your Honour did in that list is to say that, first of all, the relevant need that is engaged here is a need of students which could call for a law – the relevant need being the welfare needs.  Secondly, your Honour gave the example of additional tutoring as being something potentially within the head of power.  One could envisage a law where Parliament said we will fund XYZ tutoring company to make itself available within a range of schools at the discretion of the principal for those students who have a need for additional tutoring. 

Now, that law would fail Justice Hayne’s test because you could not tell from the law who the persons would be other than that they would be selected by their need and by the principal’s judgment.  We would submit that that law would pass the test because additional tutoring being a response to an identified need, it being a student need, to indicate that the final decision as to whom will be made in consultation between the principal and those students who call forth a need would be within the range of choices available to Parliament as to how to provide benefits of this character.

KIEFEL J:   Would you say similarly that the provision of chaplaincy services to patients of the nursing home in Alexandra Hospital would have been a benefit?

MR GLEESON:   The answer is, most likely yes.

KIEFEL J:   Because it is a good thing wherever you look at it, is it not?

MR GLEESON:   Not because it is a good thing, but because ‑ ‑ ‑

KIEFEL J:   It will be a perceived need for almost anyone in any class in any group in society.  It would be seen as “of benefit”.  The difference is, it is not that it is “of benefit”, it is whether it is “a benefit” in a social welfare sense.

MR GLEESON:   If your Honours go back to our formulation in paragraph 61, I dealt with the first point which had provoked a question, 61.1.  Paragraph 61.2 is what I have just sought to deal with, namely it is sufficient if a service is “made available” to students who wish to take advantage of it from time to time or that if the service is not provided directly to the student one can see “indirect benefit”. 

So that is the question of whether it is restricted to the payment formula.  What your Honour has just raised with me is really what we address in paragraph 61.3, the service must be a “method of responding to a perceived need” of students or to provide for the “human wants” of students.  Now, we seek to accommodate your Honour’s point further in paragraph 64.  So we accept that it cannot be compulsory, but we also accept it would not be sufficient to engage the section, that the program merely happens to apply to students, for example, where a program is established to provide benefits to a wide class of persons, some of whom happen to be students.  So, that is outside the head of power.  But, this program does not fall foul of that constraint, and, if I could go back to Williams, we would respectfully invite the Court to ‑ ‑ ‑

KIEFEL J:   Could I ask you about 61.3?  Who perceives the need?  If you are going to have something that cannot be more objectively – I will not suggest that it is perfect – described as something which is a social benefit to a person in their position as a student, how does one – who is to determine what is the need in a “human want” situation of a need, which is the terms you use in 61.3?

MR GLEESON:   The answer is that a measure of choice is available to Parliament as to the way it answers your Honour’s question in the law.  In the present law the way Parliament answers the question is to say, the types of welfare needs that call up this type of service will be those we identify through the guidelines, which are then incorporated into the funding agreement.  We identify in quite some detail there what it is that these chaplains or welfare workers will offer to students, and I want to take your Honours shortly to the special case where that is taken a bit further.  So, that is the type of service.

Then one gets to the question of, to whom, and the to whom under this law and arrangement is dealt with in this way:  first of all, the principal has to call for the service and therefore has to make an assessment that there are sufficient students in the school who are in need of the type of service that is on offer, and then secondly, the precise need of the individual student or students is, in a sense, self‑selecting because it is a voluntary scheme.

KIEFEL J:   I think we know how it is gone about and how the guidelines operate, but where do you draw the line in relation to what might be a need?

MR GLEESON:   Well, first of all ‑ ‑ ‑

KIEFEL J:   When is a need a “benefit” referred to under the Constitution?

MR GLEESON:   It has to be a need which has of itself a connection with the class of persons defined in one of the eleven heads of power in 51(xxiiiA).  That is why we accept the limiting for 64.  It has to be something which is sufficiently targeted, as it were, to needs of students.  On that point, in Williams at paragraph 438, which we respectfully commend, Justice Heydon identified what would be the “numerous vicissitudes” which students might encounter:

Some may be closely connected with studies . . . Some may be more connected with the fact of being a young person –

and some –

may be rendered more acute by the school environment.

Those three identifications by Justice Heydon, we submit that those are needs of students.  So the needs of students ‑ ‑ ‑

KIEFEL J:   They are the needs of young people, are they not?

MR GLEESON:   I am sorry?

KIEFEL J:   They are the needs of young people facing various social problems.

MR GLEESON:   As his Honour has identified them, some are closely connected with studies.  Some are connected with being a young person and some are rendered more acute by the school environment.  They are the matters I will take you to in the stated case in a moment.  Now, as a set of needs of students, we would submit, that they are within the conception of the head of power.

Then if one compares those needs with the needs your Honour identified which is at paragraph 572 on page 367, your Honour identified a series of needs which we would embrace as within the power including:

provision of books, computers and other necessary educational equipment, or the provision of services, such as additional tutoring.

Now, why is additional tutoring a relevant need?  Well, it accepts that the school environment calls for the primary teaching framework but there can be with some students a special need on top of that.  If there is a need for additional tutoring we would say why not, in the case where there is a need for additional counselling for one’s welfare, closely connected with your position as a student, why is that not within a conception of the relevant need?

KIEFEL J:   Tutoring has regard to persons, students as a class.  Chaplaincy services do not.  It may be said that some students may feel the need for chaplaincy services.  It cannot be said that students as a class will require chaplaincy services.

MR GLEESON:   Not necessarily every student but let us consider the nursing home example and perhaps it comes back to your Honour’s question.  If Parliament was to say we have identified that in the nursing homes advanced dementia is a very particular and now increasingly prevalent problem, and what we want to frame is a program which specifically targets those people suffering that condition and we will fund a program, X dollars per nursing home per period, and the service provider goes in and provides the special service those people need ‑ ‑ ‑

KIEFEL J:   I think you might be coming very close to a class in a nursing home.  I mean, it would be large sections of patients in nursing homes, particularly as the years go on, that are dealing with the sort of questions you are dealing with as part of the – not only as part of the physical attributes of patients in the nursing home.

MR GLEESON:   No doubt true, and the power is not limited by, is it necessary for every person in the class or a sufficient number in the class ‑ ‑ ‑

KIEFEL J:   No, I am not suggesting that.

MR GLEESON:   ‑ ‑ ‑but what that example was designed to illustrate, one can think of a range of conditions which are presented by people within a class, whether it be students, nursing home patients, hospital patients and the like, which are not exhibited by everyone in the class, but which call for treatment through some form of a provision of a service and our view of the power is that the Parliament can then make the law which provides for the response to that service.

BELL J:   Accepting the limitations in your paragraph 64 that you identify, can you explain why benefits to students on this analysis is not a general power to make laws with respect to education, for people of any age?

MR GLEESON:   Yes, it is not a general power to make laws with respect to education for these reasons - just in bullet point form.  The first is it is only for the provision of benefits by the Commonwealth.

BELL J:   Excepting that.

MR GLEESON:   But a very important exception that it means that one cannot use the power to regulate the provision of services by other institutions.  Insofar as it is responding to perceived needs, the law assumes a class of persons. 

Now, what I am about to put to your Honour may be narrower than the views some might favour, but I am going to put it as a limitation anyway until I am howled down.  Provision of benefits to students assumes students, just as hospital benefits assumes hospital patients, therefore it is a power that does not readily call up the ability to create students and therefore not a power readily to create school environments, there must be students.  So, one then says, one has students, one has a school environment, are there needs which call for then the provision of a benefit?

One immediately then sees it is not a power to enable the Commonwealth to take over schools, the power to run schools, a power to regulate conditions in schools.  One then says, what are the types of needs thrown up by that school environment or, as Justice Heydon said, perhaps exacerbated by the environment which could call for the provision of a benefit which does not undermine the essential fact that you are not regulating the environment.  No doubt we accept that easy examples like extra books, perhaps extra tutoring, perhaps laboratories and so on readily come to mind as falling within that head.

We would submit, why not when the benefit seeks to deal with what is now recognised, perhaps not so clearly recognised in 1946 as one of the particular needs thrown up for students particularly because of their school environment, and the welfare needs are, if anything, as important or more important than what might be the more material needs of students.

KEANE J:   So, Mr Solicitor, could 51(xxiiiA) support the provision of funding by the Commonwealth to a private person to provide courses of study outside the school curriculum?

MR GLEESON:   It is no answer to say (a) that is a good question and (b) it is 4.15, so I will ask someone who might know the answer.  I am being told there are boundaries which may be crossed by that provision and so it might depend upon its connection with the environment that has created the students.  If I understood your Honour’s question correctly, it was for

instance the funding of a coaching college where any students who want to study more maths can go off to college X.  If it is that type of ‑ ‑ ‑

KEANE J:   No, it is subjects that are not available in the State curriculum.

MR GLEESON:   My answer to that would be no, there would be a problem.  There would be a problem because you would then be saying, in effect, we are seeking to use this Commonwealth power to reset the balance, shape and structure of an enterprise which is not ours to regulate or run, but when one then pulls back a step to the present scheme where what the Commonwealth says is, having consulted with everyone, including the people who run the schools and the States, everyone agrees there is a need within that existing school environment, which is an appropriate need to meet ‑ ‑ ‑

HAYNE J:   Well, a need in the sense of some may – all may, some should, none must.

MR GLEESON:   Fully accepted that, that is the way the Commonwealth seeks to meet the need, then that is a provision of benefits to persons who are sufficiently identified as students.  Your Honours, I have gone on a little long.  I have not quite finished, although, I have almost finished, so we will have gone a little over our estimate because – so, just for your Honours’ purposes for timing ‑ ‑ ‑

FRENCH CJ:   I think we are reasonably safe, Mr Solicitor.  Can I just ask you to perhaps consider one question overnight?  It takes us back to an earlier stage in your argument and that is, in terms of the definition of the program which is set out in 407.013, the National School Chaplaincy and Student Welfare Program, has the content of the program been varied particularly by reference to changes in the guidelines or in other ways since the amending Act was passed?

MR GLEESON:   Yes.  I will check, but the short answer is in no substantial manner that could alter the characterisation of the program, but I will check that that is the answer.

FRENCH CJ:    ‑ ‑ ‑ a surprising answer.  Yes, we will adjourn until 10.15 tomorrow.  Thank you.

AT 4.16 PM THE MATTER WAS ADJOURNED
UNTIL THURSDAY, 8 MAY 2014