JURD7250 Federal Constitutional Law

Table of Contents The Constitution ............................................................................................................... 1

High Court & Constitutional Interpretation ....................................................................... 3

Literalism and Legalism .......................................................................................................... 3

Legalism .............................................................................................................................. 4

Literalism/Textualism ......................................................................................................... 5

Originalism .......................................................................................................................... 5

Living Constitutionalism ..................................................................................................... 7

Compromise Positions ........................................................................................................ 8

Judicial Activism ..................................................................................................................... 9

Freedom of Interstate Trade and Commerce (s 92) .......................................................... 11

Individual Rights Theory ....................................................................................................... 12

Cole v Whitfield .................................................................................................................... 13

Developments Since Cole v Whitfield .................................................................................. 14

Precedent and Overruling .................................................................................................... 17

Cth Legislative Powers .................................................................................................... 21

The Division of Legislative Power ......................................................................................... 21

Implied Immunities of Instrumentalities (agent or body representing) .............................. 21

Reserved State Powers ......................................................................................................... 23

The Engineers Case .............................................................................................................. 24

The Jumbunna Principle ....................................................................................................... 27

Characterisation ............................................................................................................. 31

Characterisation ................................................................................................................... 31

Dual Characterisation ........................................................................................................... 32

Interaction Between Heads of Power .................................................................................. 35

Primary Rule – No Reading Down .................................................................................... 35

Secondary Rule – The Exception ...................................................................................... 35

Subject Matter and Purpose Powers ................................................................................... 36

Subject Matter Power .......................................................................................................... 37

Sufficient Connection ....................................................................................................... 37

Role of Purpose................................................................................................................. 38

Incidental Powers ................................................................................................................. 39

Purpose Powers .................................................................................................................... 40

Constitutional Limitations ................................................................................................ 42

Trade and Commerce Power (s 51(i)) .............................................................................. 43

Scope .................................................................................................................................... 43

Incidental Aspect .................................................................................................................. 45

Corporations Power (s 51(xx)) ......................................................................................... 49

Which Corporations?............................................................................................................ 49

Foreign Corporation ......................................................................................................... 50

Trading and Financial Corporations .................................................................................. 50

Scope of the Power .............................................................................................................. 52

Taxation Power (s 51(ii)) ................................................................................................. 59

What is a Tax? ...................................................................................................................... 61

Fees for Services ................................................................................................................... 63

Grants Power (s 96) ........................................................................................................ 65

Early Cases ............................................................................................................................ 65

Uniform Tax Cases ................................................................................................................ 66

Limits on the Power ............................................................................................................. 67

External Affairs Power (s 51(xxix)) .................................................................................. 69

Relations with Other Countries ............................................................................................ 70

Matters External to Australia ............................................................................................... 71

International Law Other than Treaties ................................................................................. 73

Implementing Treaties – First Approaches .......................................................................... 73

Entering into Treaties ....................................................................................................... 73

First Approaches ............................................................................................................... 74

Implementing Treaties – Modern Jurisprudence ................................................................. 75

The Expanding Power ....................................................................................................... 75

Power Confirmed .............................................................................................................. 77

International Recommendations ...................................................................................... 78

Defence Power (s 51(vi)) ................................................................................................. 81

Nature of the Power ............................................................................................................. 82

Scope of the Power in War................................................................................................... 84

Scope of the Power Post-War .............................................................................................. 86

Scope of the Power in Times of Peace ................................................................................. 87

Cold War – Communist Party Case ...................................................................................... 88

Terrorism and National Security .......................................................................................... 91

Races Power (s 51(xxvi)) ................................................................................................. 95

Cth Power in Relation to Aboriginal People ......................................................................... 96

Special Laws Deemed Necessary for People of Any Race .................................................... 96

For the Benefit of a Race? .................................................................................................... 98

Inconsistency ............................................................................................................... 102

Tests of Inconsistency ........................................................................................................ 103

Manufacturing Inconsistency ............................................................................................. 109

Manufacturing Consistency ............................................................................................... 111

Reading Down and Severance ............................................................................................ 112

Reading Down ................................................................................................................. 112

Severance ....................................................................................................................... 113

Federal Compact .......................................................................................................... 115

Melbourne Corporation Principle ...................................................................................... 115

Restatement I: Two Principles............................................................................................ 118

Restatement II: One Principle ............................................................................................ 122

Express Guarantees: Trial by Jury .................................................................................. 127

Express Guarantees: Freedom of Religion ..................................................................... 133

Freedom of Political Communication ............................................................................ 139

History and Murphy Catalyst.............................................................................................. 140

Launch of the Implied Freedom ......................................................................................... 141

Expansion and Division ....................................................................................................... 144

Implied Freedom Confirmed .............................................................................................. 146

Expressive Conduct ............................................................................................................ 147

Politics of Protest ............................................................................................................... 148

Lange’s  Two  Questions ....................................................................................................... 150

Burdens on Political Communication ............................................................................. 150

Legitimate Ends and Proportionate Means .................................................................... 150

Judicial and Non-Judicial Detention .............................................................................. 153

Introduction........................................................................................................................ 155

Origins ................................................................................................................................ 156

Incompatibility Doctrine ..................................................................................................... 156

Preventative Detention ...................................................................................................... 158

Protective Detention .......................................................................................................... 161

Immigration Detention ....................................................................................................... 162

Control Orders .................................................................................................................... 164

1

The Constitution

Key features of the AUS Constitution:

1. SOP - Executive and legislature not as separate b/c executive drawn from leg. Based on the

responsible government basis of Westminster. Implied in Chapters 1-3. Thin recognition within

the Constitution. Overlaid on text, traditional approach.

The US constitution has strict SOP, reflected in articles. AUS uses chapters to imply a SOP. SOP

comes from structure of Constitution, not text itself.

2. Responsible government. Responsible government entails:

a. Parliamentary democracy

b. Executive accountability

3. Monarchy/GG powers (Chapter II) Monarchical element, ceremonial powers, reserve powers

(not written or identified ∴ hard to recognise ∴ limits on dumping monarchy). Not much on

actual powers of GG. Acts on advice and consent of executive (esp. PM). Section 61 reflects

responsible  government  and  also  demonstrates  limits  on  how  it’s  applied  (i.e.  not  formally  recognised).

4. Federalism

a. Holding together (e.g. Iraq, if it worked) Big part of post-conflict design approach

b. Coming together AUS approach – came together for trade within AUS. Second order

concern was to prevent invasion together.

c. Also consider symmetric/asymmetric (AUS is symmetric)

Section 51 – most important for federalism. We have Federal with defined powers, states with

the residue of powers. Section 107 compliments this.

5. Rights – few express rights included

d. S 51(xxxi) just terms for just terms for acquisition of property. Dubious as in in section

about legislative powers, not really a right

e. S 117 freedom of interstate travel

f. S 116 freedom of religion

g. S 80 trial by jury (limited)

Implied rights:

h. Implied right to vote if franchised (ss 7, 24)

i. Freedom of political communication

Items that should be included in a modern AUS Constitution:

1. Head of government determination (PM)

2. Third generation rights (e.g. right to water, environmental rights – s 100 for water rights) (ICCPR-

1st gen; ICESCR – 2nd gen; group, indigenous and self-governance rights – 3rd gen)

a. Equality before law/non-discrimination

b. Speech

c. Stronger religion

d. Privacy

e. Freedom from degrading treatment

f. Housing

g. Marriage equality

3

High Court & Constitutional Interpretation

Literalism and Legalism Range  of  factors  used  in  interpreting  the  Cons  (referred  to  as  ‘modalities’  by  Bobbitt):

1. Text language of the Constitution itself

Narrow v broad

2. History

a. Original meaning (old dictionaries, common law and equity cases for how lawyers

understood it at the time)(narrow interpretation)

b. Original intentions (convention debates)(broad interpretation) BUT what level of

generality do you apply to the framers? E.g. intention to regulate finical transactions for

Cth or only considering banking in the way understood in 1890s when Constitution was

written?

3. Common law, Constitutional precedents

a. Specific decisions by HCA e.g. Jumbunna  Coal  Mine  NL  v  Victorian  Coal  Miners’  Association (1908) 6 CLR 309 gives preference for broad reading of s 51

b. General interpretative pples or leanings

4. The structure of Constitution or intertextual comparisons (e.g. word used elsewhere within

Constitution, see if we can get meaning from elsewhere)

5. Values or policy (policy also linked to consequences)

6. Practical consequences

7. International law (plausible theory/impact on Constitutional interpretation but NOT accepted

within AUS Constitutional interpretation, plays a small role in constitutional law)

The relevance of specific factors varies from case to case.

x Origins (statutes: parliament; Constitution: public participatory involvement)

x Entrenchment/mode of change

x Fundamental nature of the Constitution sets preconditions of all other laws and statutes created.

Also superior/hierarchy

x Expressed norms and values of a people/population (MAYBE, for small c)

x Long lasting. Constitution needs to change to the times and last for all time

If the argument is made that the Constitution is a special document, it is less likely to be a strict legalist

argument, more likely to think living Constitution.

As a result, a constitutional decision is different to a simple common law decision in that the

Constitution must be interpreted ∴ requires an act of judgment. Further, statutes can override common

law decisions, not so much for Constitution (s 128). Constitutional decisions start with a text i.e.

statutory interpretation, while common law starts with precedent.

Interpretive theory:

1. What’s  in/out  – legalism v realism/functionalism

2. How do we deal with change – originalism (meaning as per 1900 dictionary v intentions of

framers) v living constitutionalism. Connotation and denotation is the most common approach

HCA adopts today.

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Literalism: take words or statements at their face value/literal meaning. Focusses on text (factor 1) only.

Legalism Literalism within a context of traditional legal pples and techniques, all sources for interpreting an

instrument come from a self-contained body of law; closed system of legal reasoning (J. Shklar 1986).

Ignores: factors 5-7 (policy, values, consequences), only uses factors 1-4 in some combination

Benefits: consistency (comes from body of knowledge); allows us to maintain our view of judges as

objective, consistent, predictable (in both appearance and substance)

Legalism is seen to have dominated the HCA since the Amalgamated Society of Engineers v Adelaide Steamship Co Ltd (Engineers Case) (1920)  28  CLR  129,  where  it  stated  that  the  “Constitution must be

read naturally in the light of the circumstances in which it was made, with knowledge of the combined

fabric of the common law, at the statute law which preceded it.”

CJ Dixon Swearing in Speech (1952): Cts sole function is to interpret the Constitutional description of a

power  or  role  and  determine  if  valid  i.e.  cts  have  a  passive  role  of  declaring  what  is  and  isn’t  the  law. Supports  the  use  of  ‘strict  and  complete’  legalism.

Gleeson (2000): there is no alternative to legalism. It is the only approach to be adopted, all others are

not considered to be law.

Gummow (2011): In supporting the use of legalism to interpret the Constitution, Dixon was not rejecting

the use of the structure of Constitution or intertextual comparisons. Instead, he was attempting to

highlight the different approach in logic and reasoning taken by the courts/judiciary. The different role

of the cts means that the executive and legislature are free to use a different approach. Explaining this

different understanding became very necessary in light of the unpopular decision in Australian Communist Party v Commonwealth (1951) 83 CLR 1.

Although legalism is defined as drawing on a pre-defied body of authoritative legal texts to determine

the legal answer to any issue, there is still a choice involved. Each judge decides between two (or more)

choices presented  by  the  legal  authoritative  body  and  determines  what  the  law  ‘ought’  to  be.  Judging

will always involve a measure of personal choice and thus also responsibility.

Mason (1986): values always part of a decision or interpretation. Promoted a more open policy

alternative  approach.  If  we  don’t  talk  about  policy,  doesn’t  mean  not  using it in interpreation. All judges

influenced by personal preferences and policy, better to be open ∴ transparent ∴ predicable in future.

Can also criticise and debate in policy terms.

Other alternatives to legalism:

Legal realism (recognition of personal views and beliefs in the making of a decision)

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Literalism/Textualism Uses language + historical meaning of words (factors 1 and 2(a)) to interpret the Constitution. Type of

legalism but one that gives preference for the text itself. Predominantly supported by Heydon and CJ

Barwick.

Benefits: anyone who picks up the Constitution should be able to read and understand it and relate to it

based on the text only. The Constitution needs to be objective and publically accessible. This approach

also connects to canonical status or origins of the Constitution as  “the”  text. Issues: often  can’t  relate  to  the  text  or  the  text  is  broad  (indeterminacy). The Constitution doesn’t  just

give us answers, needs to be interpreted. Also, over time, the practice of law and society changes ∴ does

it  still  “fit”  with  our  practice  of  law?

Retirement  of  Sir  Garfield  Barwick  (1981):  favoured  literalism  by  advocating  that  the  HCA  must  ‘give  words  their  full  and  fair  meaning’.

JD Heydon (2007): interpretation of the law relies upon more than just literalist notions, draws from the

historical context at the time of writing the legal instrument (based on Engineers’  Case (1920)).

Originalism Uses text and language plus original intention (factors 1 +2(b)) to interpret the Constitution;

interpretation should adhere to the original intent or understanding of the text. Places higher focus on

the intentions that the text itself. Justice Scalia most associated with it, Justice Thomas (US) also. Within

AUS, Prof. Greg Craven and Justice Callinan promote the approach. Tasmania v Commonwealth and Victoria (Drawbacks Case) (1904) 1 CLR 329 is example of gap b/w textualism and originalism.

Benefits: represents what was actually intended by the document; textual originalism incorporates the

approach used in other documents (e.g. wills, deeds etc). That’s  the  document  drafted,  carrying  over  the  law as it was intended by the democratic drafters, objective i.e. judges not making it up.

Issues: merits  in  1890’s  may  not  be  the  same  now  in  2014  (democratic  deficit problem i.e. dead hand);

range of intentions held by drafters ∴ which do we chose? Intention is indeterminate, not historically

recoverable and may never have existed in the first place (see Work Choices Case); Incomplete – didn’t  consider current problems; Change – how is change considered and incorporated? Originalists claim can

just amend Constitution if needed via s 128.

Incremental accommodation can also act to incorporate change into the meaning/interpretation of the

Constitution. One method is to use or argue for ambulatory language (p. 196) i.e. interpretation of the

language to include later developments is originalist in that the meaning in the 1900s was taken to

include or incorporate later meanings.

R v Brislan; Ex parte Williams (1935) 54 CLR 262

Taken  to  include  radio  with  ‘postal,  telegraphic,  telephonic  and  other  like  services’.

Jones v Commonwealth (No 2) (1965) 112 CLR 206

Same words expanded to include television.

6

Grain Pool of Western Australia v Commonwealth (2000) 202 CLR 479

Patents (s 51(xviii)) read to extended to planet variety rights, novel IP form.

Change can also be accommodated via connotation v denotation. The connotation of words in the

Constitution is fixed as at the 1900s (e.g. marriage= lifelong union between two consenting adults) while

its denotation may be subject to change as different kinds of instances or new instances arise (e.g. male

and female, same sex now). Core characteristics are fixed as at 1900s but these characteristics may

come to include new developments over time.

Street v Queensland Bar Association (1989) 168 CLR 461 (Dawson J) Attributes which the words signify will not vary, but as time passes new and different things may be

seen to possess these attributes sufficiently to justify application of the words to them.

Attorney-General (NSW) v Brewery Employees Union of NSW (Union Label Case) (9108) 6 CLR 469 (dissenting, now the common approach) (Higgins J) “So  long  as  these  developments  relate  to  the  same  subject  matter  the  power  of  the  Parliament  will  continue  to  extend  to  them.”

“The  usage  in  the  1900s  gives  us  the  central  type,  it  does  not  give  us  the  circumference  of  the  power.”

Davis v Commonwealth (1988) 166 CLR 79

Conceded that there may have been an increase in the denotation of the power since Union Label Case

decided

Grain Pool of Western Australia v Commonwealth (2000) 202 CLR 479

Notion of adopting 1900s boundaries on powers is insufficient to accommodate dynamism in some

areas (e.g. s 51(xviii copyrights, patents etc)) that were known in 1900.

Two types of originalism:

1. Intentional originalism (establish the subjective intention of the framers)

2. Textual originalism (determine the meaning of the words at the time of writing the document

and the general understandings of the time)

S. Fish (2008): Intention is one thing BUT what binds us are the words of the law/legislation/Constitution

– “it  is  only  the  laws  which  they  enact  which  bind  us.”

G. Craven (1990): words are designed to convey intention ∴ need to consider original intent. Use of

original intent in AUS is easier than the US for three reasons:

1. Founded by democracy not revolution ∴ constitutional intention of framers is more solid

2. Easier to determine intentions from 1890s than the 1700s

3. Literalism is less attractive within the HCA than in the US

New South Wales v Cth (Work Choices Case) (2006) 229 CLR 1: to pursue the framers intention is to

pursue a mirage. It is based on the assumption that it is possible and/or useful to establish a single

collective intention about a dispute that was not even present at the time of framing. It is not possible

7

to extract from the debates a single attribute of how the framers intended the Constitution to function

in light of social, legal and economic developments since the time of writing.

Callinan (dissenting): intention of the framers should be used to interpret the Constitution only to the

extent that they can be seen to be generally consensual.

Heydon (2007): textual originalism agrees with theories that have been used since the 1900s about the

construction of documents (wills, deeds etc). Based on the meaning of language used in a particular

context ∴ look at same language choices in other legal contexts to establish what the meaning of the

word was at the time of writing.

Theophanous v Herald & Weekly Times Ltd (1994) 182 CLR 104 (McHugh J): ‘The  true  meaning of a

legal text almost always depends on a background of concepts, principles, practices, facts, rights and

duties which the authors of the text took for granted or understood without conscious advertence, by

reason  of  their  common  language  or  culture.”

Living Constitutionalism Opposite of originalism. Also called the living tree or the purposive approach. Advocated by J Kirby,

Mason. Also Barak. Say that Constitution is not an ordinary statute.

This approach is a form of interpretation that reads language with a view for accommodating change

(technology and values) Rejects factor 2 above and uses history only to determine the broad purposes of

the Constitution. Allows for subtle impact of democracy and changes over time.

Issues: whose values should be included? Judicial subjectivity and opinions. Too much power to judges

(activism), gives judges power to make up the law.

Weems v United States [217 US 349, 373 (1909)] “[A]  principle  to  be  vital  must  be  capable  of  wider application than the mischief which  gave  it  birth.”

Gompers v United States [233 US 604 (1914)] Oliver Wendall Holmes

“But  the  provisions  of  the  Constitution  are  not  mathematical formulas having their essence in their

form; they are organic living institutions transplanted from English soil. Their significance is vital, not

formal; it is to be gathered not simply by taking the words and a dictionary but by consulting their origin

and  the  line  of  their  growth.”

A. Barak (2005): Interpretation should be guided by the subjective and objective purpose of the

constitution. Objective purpose may be found in its structure or in precedent. Combined together, these

form the ultimate purpose. However, objective purpose is favoured as it reflects modern perspectives.

A. Inglis Clark (1997): Social and politics change ∴ have to apply the Constitution to new situations ∴

must  be  read  and  construed  not  as  the  will  and  intentions  at  the  time  of  writing  but  as  “declaring the

will and intentions of the present inheritors and possessors of sovereign power.”

Sir A. Mason (1986): Constitution needs to be applied to situations unforseen by founders. It is

expressed in broad terms, intended to apply in changing conditions. Should be construed liberally unless

a narrower interpretation is indicated for its purpose.

8

Brownlee v the Queen (2001) 207 CLR 278 (Kirby J) “[T]he  text  of  the  Constitution  must  be  given  meaning  as  its  words  are  perceived  by  succeeding  generations of Australians, reflected in the this Court,, it is imperative to keep the mind open to the

possibility that a new context, presenting different needs and circumstances and fresh insights, may

convince the Court, in later times and of later composition, that its predecessors had adopted an

erroneous  view  of  the  Constitution.”

Re Wakim; Ex parte McNally (Cross-vesting Case) (1999) 198 CLR 511 (McHugh J) “Court has never hesitated to apply particular words and phrases to facts and circumstances that were

or  may  have  been  outside  the  contemplation  of  the  makers  of  the  Constitution  …  words  of  the

Constitution, for the most part, describe concepts and purposes that are stated at a sufficiently high

level of abstraction to enable events and matters falling within the current understanding of those

concepts and purposes to be taken into account …  once we have identified the concepts, express and

implied, that the makers of our Constitution intended to apply, we can give effect to the present day

conceptions  of  those  concepts.”

Compromise Positions A compromise position b/w originalism and living constitution is that of moderate originalism (p. 210)

(difference b/w other types of originalist).

Goldsworthy (1997): Moderate originalism differs in three ways:

1. Meaning of the Constitution depends on evidence of the founder intentions which was readily

available in 1900

2. Enactment intentions, not application intentions, are what matter

3. Founders intentions cannot answer all situations. If founders do not address situation at hand,

judges need to act creatively and consider legal doctrines and pples, public policy and notions of

justice.

Raises issues of whose intentions from 1900 – drafters of Constitution, endorsing voters, Imperial

Parliament who enacted it?

Also raises issues of being governed by the dead hand of the past BUT Constitution can be changed (s

128).

Alternative to the living tree as there is only so far it can take us, there must be a root and trunk and

that is the original document and intention. Constitution can also be given a flexible interpretation via:

x Distinction b/w the connotation of a word and its denotation

x Difference b/w enactment and application intentions of the framers

Today, HCA judges support an eclectic approach - legalists but will consider values etc, give different

weights to factors 1-4 in each case. Most eclectic on use of modalities and ability to accommodate

change.

In interpreting the Constitution, implications can be drawn from the structure of the Constitution(e.g.

SOP). Legalists do not outright reject them as factor 4 above (the structure of Constitution or

9

intertextual comparisons) considers structure. However, other smaller groups (i.e. textualists and

literalists) reject implications and leanings.

Judicial Activism Activism is a political label used to attack legitimacy of judicial decision making. It is not intellectually

coherent. There are (generally) simply better or worse interpretations of the Constitution.

The meaning of activism is generally:

1. Activism/robust v deference/restrained to other branches (Executive, Legislature)

OR 2. Activism v objective/legitimate interpretation (see mythical monsters section by French (2008) p

178-9 – no single right answer ∴ just reflects interpretative choice) Usually wrong – it’s  not the

situation that cts/judges are making a choice where there was none available. There is usually a

choice  to  be  made  between  options.  It  is  not  the  ‘deliberate  imposition  of  the  judge’s  own  preferences  in  defiance  of  the  Constitution”  (K.  Roosevelt  2006).

Discussion of activism needs to consider:

1. Method of interpretation (i.e. how did the cts get to their final decision)

2. How active is the ct bench (i.e. how often are they really going beyond making a choice between

various legal options)

A legalist may say that a realist using policy is a more activist approach i.e. using sources or modalities

that should not be considered or used in decision making.

Gaegler (2009): the cts should be unevenly differential.  The  cts  cannot  use  ‘activism’  to  promote  a  set  of  social or cultural values but can be used to protect the basic requirements of a democracy e.g. right to

vote, minority representation etc i.e. activism can be used when the cts can see that there is clearly

something defective in the political process.

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Freedom of Interstate Trade and Commerce (s 92)

Freedom of Interstate trade and commerce is derived from s 92 of the Constitution:

Trade within the Commonwealth to be free

On the imposition of uniform duties of customs, trade, commerce, and intercourse among the States,

whether by means of internal carriage or ocean navigation, shall be absolutely free.

But notwithstanding anything in this Constitution, goods imported before the imposition of uniform

duties of customs into any State, or into any Colony which, whilst the goods remain therein, becomes a

State, shall, on thence passing into another State within two years after the imposition of such duties,

History: Cole v Whitfield permitted the use of history/convention debates BUT only to:

1. Define a word at the time of writing

2. Determine the subject to which the language was directed (objective purpose of the relevant

provisions)

3. Determine the nature and objectives of movement towards Federation (objective purpose of

Constitution in general)(common defence and common trade were the two big motivations

behind Constitution)

Precedent/Stare Decisis:

x Weak (Wurridjal per French) or strong (Second Territory Senators Case) but not very strong

(Engine-Drivers)

x Four factors to consider per John:

1. Consistency of application

2. Strength of majority

3. Workability

4. Reliability

Freedom of Trade and Commerce: S 92 prohibits discriminatory burdens of a protectionist kind on interstate trade and commerce (Cole v Whitfield (1988)).

1. Is there trade or commerce?

2. Is there discrimination against out of state commerce (legally/formal (Bath) or informal

distinctions b/w inter and intra state trade (Cole; Castlemaine; Betfair)

3. Does the law have a legitimate non-protectionist objective/purpose?

Does it advance or is rationally related to a legitimate non-protectionist purpose. Protectionist is a specific economic idea to protect economy from forces of market-based competition.

4. Is  the  law  “appropriate  and  adapted”  or  not  disproportionate  (Castlemaine) or proportionate

(Betfair) to achieving this objective?

a. Is it rationally related to its objective?

b. Is it narrowly tailored to its objective or is there a regulatory alternative the is less

restrictive of onter-state trade and commerce and plausibly as effective?

i. Where do we find other alternatives? (Betfair: other states)

ii. Hoe doe we assess their effectiveness?

12

be liable to any duty chargeable on the importation of such goods into the Commonwealth, less any

duty paid in respect of the goods on their importation.

This section has at its core that trade and commerce among the states by internal carriage or ocean

navigation  (i.e.  goods  being  transported,  30%  AUS  economy  is  goods  based)  …  absolutely  free.  Pulling  out core meaning (as done here) is a structural analysis/modality.

Individual Rights Theory Bank of NSW v Commonwealth (Bank Nationalisation Case) (1948) 76 CLR 1

The Banking Act 1947 (Cth) s 46 sought to phase out private banks, left only with nationalised banks.

Challenged under s 92.

Held: seeking to nationalise the  banks  was  incompatible  with  the  ‘freedom’  to  conduct  business  interstate. Used precedent (James v Cowan (1930) 43 CLR 386 (HCA); James v Commonwealth [1936] AC

578 (Privy)) to argue for an individual rights approach – “[T]he  freedom  guaranteed  by  s  92 is a persona

right  attaching  to  the  individual.”  Further,  the  rights  idea  was  supported  by  the  HCA  grouping  of  s  92  with ss 116 (religious freedom) and 117 (freedom of residence) BUT these sections are not in the same

chapter ∴ argument against this approach (intertextual structural readings).

In deciding this case, the HCA decided that banking was/is trade and commerce for the purposes of s 92

∴ adopted a broad view of ‘trade and commerce” ∴ will include services. This view was echoed by the

Privy Council.

Commonwealth v Bank of New South Wales (Bank Nationalisation Case) [1950] AC 235 “The  business  of  banking  …  is  a  part  of  the  trade,  commerce  and  intercourse  of  modern  society  and,  in  so far as it is carried on by means of inter-State  transactions,  is  within  the  ambit  of  s  92.”

Outlined two general pples:

1. Regulation of trade, commerce and intercourse among the States is compatible with its absolute

freedom (i.e. some regulation is acceptable)

2. S 92 is violated only when a legislative or executive act operates to restrict such trade, commerce

and intercourse directly and immediately as distinct from creating some indirect or

consequential impediment which may fairly be regarded as remote

The test to be applied:

1. Whether the effect of the Act is in a particular respect direct or remote

2. Whether in its true character it is regulatory i.e. regulation is okay.

The  Privy  Council  took  ‘absolutely  free’  in  s  92  to  mean  that  some  restrictions  are  okay,  not totally free

from all restrictions. The decision permits indirect or incidental restrictions on the individual right to

engage  in  interstate  trade  and  commerce.  A  pragmatic  approach  as  to  what  constituted  ‘regulation’  was  adopted by the HCA. Further, the validity of the legislation was determined by the direct legal effect, not

the economic or practical effect.

S 92 often litigated b/c trade based ∴ have significant funds behind it or b/c money is likely to be won.

13

Cole v Whitfield The above approach to s 92 was overruled and modified by Cole v Whitfield.

Cole v Whitfield (1988) 165 CLR 360

Involved crayfish regulation. Tasmania and SA had different size limits being imposed on crayfish for

sale. The challenge came from the regulations prohibiting the sale of small crayfish in Tasmania –

prevented sale of crayfish caught in SA.

Held: regulation did not infringe on s 92. The current law had no discriminatory protectionist purpose as

it appeared on the face of the law. Overruled the individual rights theory and endorsed free trade view

of s 92 that says s 92 prohibits discriminatory burdens of a protectionist kind on interstate trade and

commerce.  ‘Free  trade’  was  taken  to  be  ‘an  absence  of  protectionism,  i.e.,  the  protection  of  domestic  industries against  foreign  competition.’  (based  on  historical  meaning  and  current  meaning). Cole included informal discrimination, places extra requirements on out of state trade. Law held to be

valid – impossible to enforce TAS law if you distinguish b/w where Cray caught as they all look the same.

In  reaching  this  view,  the  HCA  relied  upon  the  text  itself,  history  (e.g.  how  the  phrase  ‘absolutely  free’  was understood in 1891) and structure (e.g. grouped s 92 not with other rights-based sections (ss 116 &

117) but with ss 51(i), 90, 99 and 102 to show the desire of the founders was to prevent protectionist

views and approaches). The HCA concluded that ss 51(i) and 92 can be better reconciled together under

a free trade approach as opposed to an individual rights approach. While s 92 allows for free trade, it is

hard to reconcile with the fact the Cth can regulate regarding trade under s 51(i) if free trade under s 92

is seen as an individual right. How can a person have a right but the Cth can also regulate to control the

right?! There was a greater trust when creating the Constitution that the Cth would look at free trade

issues from a national perspective and not regulate to protect the specific state industry/interests.

Cole v Whitfield was also significant in that it permitted the use of history/convention debates for the

first time. BUT convention debates can only be used to:

1. Define a word at the time of writing

2. Determine the subject to which the language was directed (objective purpose of the relevant

provisions)

3. Determine the nature and objectives of movement towards Federation (objective purpose of

Constitution in general)(common defence and common trade were the two big motivations

behind Constitution)

The convention debate records cannot be used to substitute the subjective meanings of the individual

framers for the text or the interpretation of the Constitution. The ct can only use intentions that were

shared in a publically verifiable way.

In summary, Cole v Whitfield stands for:

1. The  modern  ‘free  trade’  interpretation

2. The use of historical debates/documents for three approved purposes (but not for one purpose)

NOTE: Cole was decided in 1988, 2 years after the Australia Acts abolished appeals to the Privy Council.

It is likely that if this case was heard any earlier that the Privy Council would have overruled the HCA and

favoured the individual rights approach.

14

Cole essentially over-rules precedent, by using one overruling to justify the second overruling. The issue

was getting over precedent!

Developments Since Cole v Whitfield What is a discriminatory measure? It can be formal/ de jure/facial or informal/de facto/practical types

of discrimination

x Formal: laws that explicitly distinguish b/w state of origin

x Informal: burden that is differential on interstate goods etc

Cole enforces against both formal and informal discrimination.

The modern test based on Cole is whether the law imposes discriminatory burdens of a protectionist

kind against interstate trade:

1. Is law imposing a discriminatory burden on interstate trade or commerce? (formal or informal

distinctions b/w inter and intra state trade)

2. Is it protectionist?

a. Does it advance or is rationally related to a legitimate non-protectionist purpose.

Protectionist is a specific economic idea to protect economy from forces of market-based

competition.

b. If so, are the means chosen necessary or appropriate and adapted (Castlemaine) (not

disproportionate response)

A law will be discriminatory of it imposes a competitive disadvantage on an interstate supplier of goods

and services as compared with intrastate suppliers of similar goods and services OR of different goods

and services which may appeal to a similar class of consumer.

A law will be protectionist if it restricts or impairs competition. (textbook, p. 1222).

Bath v Alston Holdings Pty Ltd (1988) 165 CLR 411 Business Franchise (Tobacco) Act (VIC)  provided  for  retail  tobacconist’s  licenses.  Under  s  10(1)  the  license fees included an ad valorem fee of 25% of the value of the tobacco sold in the period – ‘other  than  tobacco  purchased  in  VIC  from  the  holder  of  a  wholesale  tobacco  merchant’s  licence  or  a  group  wholesale  tobacco  merchant’s  license’.  In  effect,  the  Victorian  law  imposed licence fees on retail

tobacconists calculated as percentage of value of tobacco sold, but exempted tobacco purchased from

Vic wholesalers where licence fees had been already paid. The scheme was established to ensure fees

were not paid more than once.

The objective was to equalize the taxes. Prior to this, the interstate goods had an advantage of paying

fewer  taxes.  This  regulation  wanted  to  equalize  it.  The  ‘equalization’  consideration  was  held  not  to  be  relevant.

Held: held to infringe s 92. Discriminatory against interstate trade on the face of the law as it only

applies to out of state wholesalers. Majority (Mason CJ, Brennan, Deane and Gaudron JJ) held it to be

protectionist as the law offsets the disadvantage present against Vic wholesalers from the competitive

disadvantage of out of state whole sales. Minority (Wilson, Dawson and Toohey JJ) accepted the

equalization measure argument.