Williams v The Commonwealth [No 2]

The High Court of Australia considered a constitutional challenge brought by the plaintiff, Mr Williams, against the Commonwealth and Scripture Union Queensland (SUQ) concerning funding provided by the Commonwealth to SUQ for the provision of chaplaincy services at a state school. The dispute centred on the validity of the legislative and executive authority for the Commonwealth to enter into and expend public moneys under a funding agreement with SUQ as part of the National School Chaplaincy and Student Welfare Program.

The legal issues before the Court included whether section 32B of the *Financial Management and Accountability Act 1997* (Cth) and associated regulations and amendments provided valid legislative authority for the funding agreement and payments made under it, and whether such expenditure was supported by the executive power of the Commonwealth. Specifically, the Court was asked to determine if the relevant provisions were supported by constitutional heads of power, including section 51(xx) (trading and financial corporations), section 51(xxiiiA) (benefits to students), or section 51(xxxix) (incidental powers). The Court also considered the plaintiff's standing to bring the challenge and the lawfulness of the payments made.

The Court reasoned that providing funds to an organisation to deliver chaplaincy services at a school did not constitute the provision of "benefits to students" within the meaning of section 51(xxiiiA) of the Constitution, as the benefits were not directed to the consequences of being a student. Furthermore, the Court held that the impugned legislative provisions, which authorised the Commonwealth to enter into agreements and make payments for the program, were not laws with respect to trading or financial corporations under section 51(xx), as they did not regulate the corporations themselves but merely provided a mechanism for expenditure. The Court also determined that the executive power of the Commonwealth did not extend to any and every form of expenditure of public moneys, and therefore, the funding agreement and payments were not supported by executive power.

Consequently, the High Court answered the questions posed in the special case. It found that the impugned legislative provisions were not valid in their operation with respect to the SUQ funding agreement and the payments made under it. The Court also concluded that the Commonwealth's entry into and expenditure under the agreement were not supported by the executive power. The Court affirmed the plaintiff's standing and declared the payments unlawful. The final orders directed that the plaintiff be granted such relief and costs as a single Justice deems appropriate, with the defendants ordered to pay the plaintiff's costs of the special case.