Commonwealth constitutional law

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David Weaver
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1 Commonwealth constitutional law Is Cth legislation valid Asking whether a Cth law is valid involves two basic questions Is there a head of power in the Constitution to support the law? o Characterisation the process of determining whether a particular Cth law is with respect to a head of power What does the head of power mean? What does the law do? Is there a sufficient connection between the two? Does the law infringe an express/implied limitation on Cth legislative power? o Is there state or Cth immunity? o Is there inconsistency? o Does it infringe on any rights? Corporations power 51(xx) foreign corporations, and trading or financial corporations formed within the limits of the Commonwealth Two issues; When is an entity a constitutional corporation? What laws can be enacted, that is what activities can be regulated? What is a constitutional corporation? Foreign corporation plainly a foreign corporation is a corporation formed outside the limits of the Commonwealth Work Choices Case Gleeson, Gummow, Hayne, Heydon and Crennan Current activities test Adamson s Case (1979) Key Points Are football clubs trading corporations and subject to Cth legislation? Look to the actual activities of the body Mason J trading activities form a sufficiently significant proportion of tis overall activities o Cf so slight and so incidental to some other principal activity Revenue NOT profit is the primarily concern

2 State Superannuation Board (1982) Key Points Activities test endorsed for financial corporations Financial activities were of a significant part of overall activities Purpose of those activities not determinative o financial à dealings or transactions in which the subject of the transaction is financial such as borrowing or lending money, as distinct from transactions which are about sales, provisions of goods or services Although purpose was pooling money for own members- investment activities were significant part of activitiesà financial corporation Fencott v Muller Key Points Shelf companyà no activities Recognised that absent activities have to turn to other indiciaà companies constitution including objective On facts objects included engaging in financial activitiesà constitutional corporation Note a trading corporation will not lose its character because its activities are carried out for another purpose Tasmanian Dams What is a corporation? Qld Rail [2015] Key Points Qld rail was established as a separate legal entity BUT legislation said it wasn t a body corporate Body bore all indicia of corporationà separate rights, duties, legal person, perpetual succession Look to substance NOT form à corporation Doesn t matter what state legislation said the state cannot determine limits of federal power NOTEà applied both activities and purposes test (challenge to Adams) Formed within limits of Cth Incorporation Case [2015]

3 Majority 6 judges Minority Deane Key Points Attempted to use 51(xx) to create a Cth corporation system Formed means already formed, already in existence Does not give Cth power with respect to creating financial and trading corporations Based on 4 planks o Language Formed means already formed/created o Authority No case that has suggested this power in Cth o Policy Terribly difficult to have regime that only controlled trading and financial corporations leaving all others in hands of states o Framer s Intentions Concerned framers intentions was not a good guide This does not mean that the Cth can never corporate Work Choices o if there is a sufficient connection between the head of power and the creation of the corporation o the incorporated entities were responsible for negotiating employee relations with trading corporation o the fact of incorporation wasn t only connectionà independent connection to power o e.g. can incorporate an airline à additional head of power under external affairs power Summary of lower court cases on the meaning of trading corporations What organisations have been considered a trading corporation? E v Australian Red Cross Society (1991) FCR o Red Cross was a trading corporationà Generated 2 million per year from operating shops, street stalls and first aid courses o RPA Hospital was a trading corporationà traded in medical and surgical services for profit Quickenden v O Connor (2001) *Full Court of the Federal Court o University WA was a trading corporation à bought/sold/rented properties, sold publications, student accommodation, invested money o Provision of education services through HECS did not count to it being a trading corporation Orion Pet Products v Royal Society for the Protection of Cruelty to Animals (Vic) Inc (2002) FCR

4 o RSPCA was considered trading corporationà revenue from accreditation services, pounds, animal training services, vet clinics Educang v Queensland Industrial Relations Commission ((Queensland Industrial Court) o Churchowned corporation operating private schools was a trading corporationà revenue from tuition, canteens o However government grants were not considered to be revenue Aboriginal Legal Services of WA Inc v Lawrence (2008) (Western Australia Supreme Court of Appeal) o ALS was NOT a trading corporation à largely funded by government grants and services provided largely for free Australian Workers Union of Employees, Qld v Etheridge Shire Council (2008) ALR o Local council was NOT a trading corporation à ran tourist centre, kiosk sales, hostel, childcare centre, rented out property, provided services to Centrelink, income from investments o BECAUSEà most of them ran at a loss and directed to public objectives, their scale was inconsequential and incidental to the primary activity and function of a local council o Note this appears to go against trend Bankstown Handicapped Children s Centre Association Inc v Hillman (2010) (Full Court of the Federal Court) o Operated disability services and a preschool o Although primary income from governmentà held that these services were considered to be provided on commercial terms for the state- o Engaged on a commercial basis by the government to provide services What activities? Trading activities Strickland Trading activities done for the purposes of trade 5 judges in the Tasmanian Dam Case (Murphy, Deane, Mason, Brennan, Gibbs) Protecting trading activities of trading corporations Can be sufficiently connected even if the conduct operates on people who are not the characterisation Fontana Films Object of command Work Choices Laws operating on other people were there is a sufficient connection to power Work Choices Gaudron s statement in Re Pacific Coal Work Choices Huddart Parker (1909) Key Points Narrow reading of corporations power 51(xx) read consistently with 51(i) trade and commerce with other countries and among the States Hence 51(xx) cannot undermine the distinction between intra and interstate trade Majority influence by reserved powers doctrine

5 Isaacs dissent 51(xx) independent head of power should be read separately rejected reserved powers doctrine Engineers Case (1920) Key Points Rejected intergovernmental immunities Engineers literalism i.e. interpret text literally, give words natural meaning read document as a whole instrument intended to last could draw NECESSARY implication Cf vague implication i.e. state reserved power Strickland v Rocla Concrete Pipes Key Points Concerned a Qld company purely dealing with trade within Qld Rejected distinction between intra and interstate trade from Huddart Any trading activities of trading corporations ok Restriction on object of command test Barwick o no corporation shall trading corporation object of command o IN this caseà Law directed to no person shall, where person included a constitutional corporation was not sufficiently specific o Person later defined as including a corporation o It is a law of general application o The fact that it happens to apply to a corporation is not a sufficient connection Quotes Barwick CJ The question in relation to the validity of a Cth Act is whether it fairly falls within the scope of the subject matter granted to the Cth by the Constitution. That subject matter will be determined by construing the words of the Constitution by which legislative power is given to the Cth irrespective of what effect the construction may have upon the residue power which the States may enjoy. Fontana Films (1982) Facts Legislation in question: causing substantial loss or damage to the business of the [trading corporation] People affectedà not the trading corporations BUT other people

6 Key Points Cth can legislate to protect the trading activities of trading corporations Law directed to corporations not their activities plenary power Valid even if operates on someone else Emphasised dual characterisation o Didn t lose character because could also be described as industrial action Quotes Gibbs CJ A law may be one with respect to a trading corporation, although it casts obligations upon a person other than a trading corporation A law will fall within power if the conduct to which it is directed is so relevant to the subject of the power that a law rendering such conduct unlawful can be described as a law with respect to that subject The words of para (xx) suggest that the nature of the corporation to which the laws relate must be significant as an element in the nature or character of the laws, if they are to be valid In other words, in the case of trading and financial corporations, laws which relate to their trading and financial activities will be within power.it means that the fact that the corporation is a foreign corporation should be significant in the way in which the law relates to it Stephen J Once it is recognised that a law may possess several distinct characters, it follows that the fact that only some elements in the description of a law fall within one or more of the grants of power in s 51 or elsewhere in the Constitution will be in no way fatal to its validity. So long as the remaining elements, which do not fall within any such grant of power, are not of such significance that the law cannot fairly be described as one with respect to one or more of such grants of power then, however else it may also be described, the law will be valid. Tassie Dam Case Majority Mason, Murphy, Dean, Brennan Minority Gibbs, Wilson, Dawson Facts State of Tasmania incorporated the Hydro Electric Commission to build dam Cth passed legislation preventing constitutional corporations from doing certain things in regards to prescribed land; o 10(2) except with ministerial consent, trading corporations cannot carry out certain acts

Per Kitto J in Fairfax v Federal Commissioner of Taxation (1965) 114 CLR 1 2

Per Kitto J in Fairfax v Federal Commissioner of Taxation (1965) 114 CLR 1 2 Question 1 a) We first address the issue of characterisation. In characterising a law, we consider the nature of the rights, duties, powers and privileges which it changes, regulates or abolishes : Fairfax