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During 1999 and 2000, the national corporations scheme[1] suffered a number of serious setbacks. First, the High Court invalidated provisions that purported to allow the Federal Court to determine matters arising under the Corporations Law of the States.[2] In two later cases,[3] the High Court held that the Commonwealth Director of Public Prosecutions (‘DPP’) could not bring appeals against sentence in relation to offences against the former co-operative scheme, because the relevant Commonwealth and State provisions did not, as a matter of statutory construction, confer that power. So, when Craig Hughes brought a constitutional challenge to the power of the Commonwealth DPP to prosecute State Corporations Law offences, some feared the worst.[4]
Mr Hughes was charged in the District Court of Western Australia (together with a Mr Bell) with offences under the Corporations Law of Western Australia. He applied to the District Court to quash the indictment on the basis that:
This part of the District Court proceeding was removed into the High Court, and a case stated by Gummow J for the consideration of the Full Court.[5]
The High Court’s decision[6] provided something of a reprieve for the national corporations scheme. In a joint judgment six members of the Court[7] rejected both of Mr Hughes’ arguments. It was held that neither the Commonwealth nor the Western Australian Corporations Acts attempted to convert offences against Western Australian law into offences against Commonwealth law. Moreover, the joint judgment held that the Commonwealth DPP had power to bring the prosecution in this particular case, although the issue of whether he or she had power to prosecute all State Corporations Law offences was left unresolved. Kirby J wrote a separate judgment reaching substantially the same conclusions. The challenge to the indictment was remitted back to the District Court of Western Australia to be dealt with in accordance with the High Court’s answers to the questions in the case stated and reasons for judgment.[8] This case note considers the Court’s reasoning and the effect of the decision on the national corporations scheme and co-operative legislative schemes[9] generally.
The various Corporations Acts state that an offence against the Corporations Law of a State is ‘taken to be an offence against the laws of the Commonwealth’, and is ‘taken not to be an offence against the laws’ of the relevant State.[10] Mr Hughes argued that these provisions were invalid, because a State could not convert an offence against State law into a Commonwealth offence, and the Commonwealth could not prevent an offence against a State law from being an offence against the law of that State. The Court held that this argument involved a misunderstanding of these provisions.
As well as enacting a uniform national Corporations Law, the national corporations scheme attempts to unify all the associated provisions connected with the administration and enforcement of the Corporations Law (for example, the law relating to sentencing). This result is achieved by:
The Court stated that the provisions implementing step (b) do not attempt actually to convert an offence against State law into an offence against Commonwealth law. Rather, the Corporations Acts provide only that for the purposes of the law of the enacting jurisdiction, Corporations Law offences were to be treated as if they were offences against laws of the Commonwealth.[13] So understood, these provisions were clearly valid.
The provisions in the State Corporations Acts that ‘picked up’ Commonwealth laws were also held to be valid. The Court rejected the argument that these provisions involve an abdication of legislative power.[14] The joint judgment noted that while the drafting technique of ‘picking up’ laws of another jurisdiction, without identifying which particular laws, may ‘give rise to textual awkwardnesses ... that prospect does not entail invalidity’.[15] Similarly, while Kirby J considered that in this case the drafting technique ‘imposes a most unreasonable burden on accused persons, prosecutors, trial judges and appellate courts’,[16] he did not consider that the provisions here imposed such an impermissibly vague burden on persons as to be constitutionally invalid.[17] He did suggest, however, that there might be a point at which laws would be so vague or over-broad and uncertain in their commands that they would be contrary to Ch III of the Constitution.[18]
Mr Hughes’ second argument was that, if offences against the Corporations Law of Western Australia were indeed State offences, the Commonwealth DPP did not have power to prosecute them. Earlier High Court decisions[19] had established that, subject to constitutional prohibitions,[20] there is no constitutional difficulty with Commonwealth officers (such as the Commonwealth DPP) performing functions under State laws, if it can be demonstrated that:
These general principles were accepted here.[22] The Court held further that, as a matter of statutory construction, the Western Australia Corporations Act conferred the function of prosecuting offences against the Corporations Law of Western Australia on the Commonwealth DPP,[23] and the Commonwealth Corporations Act (and other Commonwealth laws)[24] authorised the Commonwealth DPP to perform that State function.[25]
Mr Hughes argued, however, that the Commonwealth provisions purporting to authorise the Commonwealth DPP to prosecute State Corporations Law offences were invalid, because they were not supported by a head of Commonwealth legislative power. This raised the issue, left unresolved in the earlier cases, of the proper characterisation of the Commonwealth ‘authorisation’ in co-operative legislative schemes; in particular, whether the State functions that the Commonwealth may authorise its officers and authorities to perform are limited to functions that are connected with heads of Commonwealth legislative power.
It appeared from R v Duncan; Ex parte Australian Iron and Steel Pty Ltd that the purpose of the Commonwealth authorisation in a co-operative legislative scheme was merely to remove inconsistency between the relevant Commonwealth and State Acts for the purposes of s 109 of the Constitution.[26] On this view, the Commonwealth authorisation does not have any substantive operation, but simply ‘evidence[s] a particular legislative intention about the ambit of ... Commonwealth legislation’.[27] There were suggestions in the later case of Re Cram; Ex parte NSW Colliery Proprietors’ Association Ltd that the Commonwealth authorisation might also waive any constitutional immunity of Commonwealth authorities from State laws purporting to impose special duties or burdens on them.[28] On this view, the Commonwealth authorisation would be supported by an implied power of the Commonwealth to waive constitutional immunities.[29] Significantly, it was not suggested in either of these cases that it was necessary to relate the State function (the performance of which the Commonwealth provision ‘authorised’) to Commonwealth heads of legislative power.
In Re Wakim; Ex parte McNally, however, the Court appeared to require that there be a connection between the State function that is sought to be authorised and a head of Commonwealth legislative power.[30] Under the ‘cross-vesting’ schemes considered in that case, the States attempted to confer State jurisdiction on federal courts as part of a scheme to alleviate jurisdictional disputes. The Court held that Commonwealth provisions purporting to permit federal courts to exercise State jurisdiction would not be valid unless this State function (exercising jurisdiction over State matters) was ‘incidental’ to the Commonwealth’s powers to establish, and confer jurisdiction on, federal courts.[31] The majority held that the exercise of State jurisdiction was not incidental to these powers and, therefore, the Commonwealth provisions were invalid.[32]
In Hughes the prosecution and interveners argued that the substantive conferral of the function of prosecuting State Corporations Law offences was done by State law, and that the Commonwealth authorisation merely removed any constitutional impediments to the States’ conferring functions on the Commonwealth DPP, such as s 109 inconsistency or constitutional immunity. Wakim (it was argued) could be distinguished on the basis that, in that case, the Constitution impliedly prohibited the States from conferring the function in question.[33] Given this, the discussion in Wakim of the Commonwealth ‘authorisation’ could be seen merely as determining whether the Commonwealth could itself confer State jurisdiction on federal courts.[34] By contrast, there was no relevant constitutional prohibition here,[35] which meant (it was submitted) that the Commonwealth provisions in this case were supported either by the heads of power that supported the Director of Public Prosecutions Act 1983 (Cth), or by the implied power to waive constitutional immunities.
The Court accepted that the role of the Commonwealth ‘authorisation’ in a legislative co-operative scheme is, at least in part, to remove constitutional impediments to the conferral of functions on Commonwealth officers by State law.[36] The joint judgment held, however, that in this case the Commonwealth ‘authorisation’ went beyond removing s 109 inconsistency and constitutional immunity. In their view the relevant Commonwealth provisions imposed a duty on the Commonwealth DPP to perform the function of prosecuting State Corporations Law offences and, to this extent, required independent support under a head of Commonwealth legislative power.[37] This duty appears to have been implied from the fact that, under the national corporations scheme, the function of prosecuting State Corporations Law offences is conferred on the Commonwealth DPP exclusively.[38] The joint judgment concluded that, unless the Commonwealth DPP was under an obligation to perform this function, there would be ‘an abdication of State authority with no certainty of its effective replacement’.[39] (The joint judgment noted further that the Commonwealth provisions also had a substantive operation to the extent that they permitted the Commonwealth DPP to expend Commonwealth resources in the performance of State functions.)[40]
Kirby J did not decide whether the Commonwealth ‘authorisation’ imposed a duty on the Commonwealth DPP, but nonetheless agreed that these provisions needed to be independently supported by a Commonwealth head of power.[41] In his view this was especially the case when the function to be authorised (here, to prosecute State offences) has the potential seriously to affect the liberty and property rights of individuals.[42]
Having decided that it was necessary to establish a connection between the State function conferred on the Commonwealth DPP and Commonwealth heads of legislative power, the Court went on to consider whether there was a sufficient connection in this case. The first step was to identify the two things that must be connected.
The Court confirmed firstly that it was not necessary to establish a connection between the function conferred by the State (here, the prosecution of State Corporations Law offences) and functions actually conferred by the Commonwealth. Rather, it was sufficient if there was a connection between the State function and Commonwealth heads of legislative power (that is, functions that could be conferred by the Commonwealth).[43] This was important in this case, because the only function actually conferred on the Commonwealth DPP by the Commonwealth under the national corporations scheme was the prosecution of offences against the Corporations Law of the Australian Capital Territory. In most cases, it would not be possible to establish a link between this function and the prosecution of State Corporations Law offences.[44]
It was also necessary to identify with some precision the relevant State function (which would need to be connected with Commonwealth legislative power for the prosecution to be validly brought). This function could be defined at three levels of generality:
The Commonwealth authorisation was expressed in general terms — it provided that the Commonwealth DPP has ‘the functions and powers that are expressed to be conferred’ by or under (among other things) the Western Australian Corporations Act,[45] which in turn conferred on the Commonwealth DPP the function of prosecuting all offences against the Corporations Law of Western Australia.[46] Nonetheless, the Court held that this apparently general authorisation could be read down if necessary to apply only when the particular prosecution was supported by a head of power.[47] This aspect of the Court’s reasoning is discussed further below. Importantly for Mr Hughes, it meant that the Commonwealth DPP could validly prosecute him and Mr Bell if, in the circumstances of this prosecution, there was a connection between the State offence and heads of Commonwealth legislative power.
The offence with which Mr Hughes and Mr Bell were charged prohibited a person, other than a public corporation, from making available a prescribed interest.[48] The definition of ‘prescribed interest’ expressly included an interest in an activity outside Australia.[49] It was alleged here that Mr Hughes and Mr Bell had been engaged in a scheme that involved ‘a group of investors in Australia putting money offshore through a US securities house [under an arrangement whereby] the money and profit [would be] returned to the investors in Australia’.[50] In these circumstances, the offences charged related to the making of investments in the United States (which amounted to trade and commerce with another country for the purposes of s 51(i) of the Constitution). The offences also related to matters territorially outside Australia (and thus involved an ‘external affair’ for the purposes of s 51(xxix)).[51] Accordingly, the Commonwealth DPP had power to bring these prosecutions.[52]
The question of whether the Commonwealth DPP had power to prosecute Corporations Law offences generally was left unresolved. The joint judgment suggests that the Commonwealth DPP would have power to prosecute ‘perhaps the very great majority’ of State Corporations Law offences, because these offences could be enacted by the Commonwealth; in particular, under the corporations power (s 51(xx)).[53] The continuing debate about the exact scope of the corporations power (for example, whether it would support the offence in question here)[54] demonstrates that, in some situations at least, there may be some uncertainty as to whether s 51(xx) permits the Commonwealth DPP to prosecute a particular offence. An obvious example is the prosecution of offences relating to the incorporation of companies.[55]
Another possible source of power canvassed by the Court was the executive power[56] combined with the express incidental power.[57] The provisions authorising the Commonwealth DPP to prosecute offences against the Corporations Law of a State give effect to a 1990 Heads of Agreement between the executive governments of each jurisdiction,[58] which relevantly provides that all Corporations Law offences would be prosecuted by Commonwealth authorities.[59] The question then is whether there is a sufficient connection between Commonwealth heads of legislative power and the prosecution of State Corporations Law offences so as to enable the Commonwealth to implement the 1990 Heads of Agreement.[60] It was argued that the Commonwealth’s power over trading and financial corporations,[61] interstate trade and commerce,[62] and the implied nationhood power[63] provided the Commonwealth with the necessary authority.
The joint judgment stated that ‘[i]t may be’ that the executive power, together with the express incidental power, supported the Commonwealth provisions under consideration,[64] although this did not mean that the Commonwealth could legislate ‘in aid of any subject which the [Commonwealth] Executive Government regards as of national interest and concern’.[65] One difficulty, however, with relying on the executive power and the express incidental power here is that the extent to which these powers would support the conferral of coercive functions on Commonwealth officers ‘remains open to some debate’,[66] particularly in relation to functions conferred by a State. Kirby J was even more sceptical, stating that it was ‘highly doubtful’ that the executive power and the express incidental power, by themselves, could sustain the ‘serious and burdensome consequences of criminal proceedings’.[67] This case was not considered to be a suitable occasion to continue this debate because, as stated above, the Court concluded for other reasons that the Commonwealth DPP could validly bring these prosecutions against Mr Hughes and Mr Bell.
Some uncertainty therefore remains after Hughes about the operation of the national corporations scheme. The Commonwealth DPP is currently the only body that can prosecute State Corporations Law offences but, in order to bring a prosecution, it will be necessary in each case to determine whether the offences for which charges are brought (or at least the offence in the particular circumstances alleged) has a sufficient connection with Commonwealth legislative power. Determining whether the connection exists on a case-by-case basis would be a time-consuming exercise.[68] Moreover, while Hughes deals only with the power to prosecute, the principles it sets out would appear to cover other aspects of the national corporations scheme.[69] Unfortunately, while the High Court has signalled that there may be limits on the extent to which the gaps in the Commonwealth’s legislative power can be overcome by co-operative State action,[70] it is not easy to determine in advance exactly where these limits would lie.
The purpose of the national corporations scheme, however, was to create a scheme that was administered and enforced on a uniform national basis by bodies accountable to a single Minister.[71] The joint judgment left open the possibility that the scheme in its entirety is supported by the executive power and the express incidental power.[72] The continuing operation of the national corporations scheme at least will be supported by the States referring power over corporate regulation to the Commonwealth.[73]
If the reasoning in Hughes were applied to co-operative legislative schemes generally, the answers to the following questions could determine whether a Commonwealth officer may validly perform a function under State law:
The joint judgment emphasised that the State law cannot confer a wider power or authority than is authorised by the Commonwealth law.[74] There is an unresolved issue of whether it is still necessary for a Commonwealth law to authorise a Commonwealth officer to perform a State function if the function is conferred on the officer in his or her personal capacity.[75]
If there is not a duty, it appears that the Commonwealth officer may perform the State function, whether or not there is a connection between this function and a head of Commonwealth legislative power.[76]
If there is a duty, the Commonwealth authorisation will only be valid (that is, the Commonwealth officer may only perform the State function) if there is a connection between the State function to be authorised and a head of Commonwealth legislative power.[77]
It appears that a duty will be implied if the State function is conferred on the Commonwealth officer exclusively (that is, if State officers are precluded from also performing that function).[78]
If the function is not coercive, the Commonwealth authorisation may be wholly supported by the executive power and the implied incidental power, particularly if the co-operative legislative agreement is underpinned by a formal agreement between executive governments.
If the function is coercive, it is possible that the Commonwealth authorisation will only be valid if the Commonwealth could itself have conferred the function on the officer.[80]
Even if the Commonwealth could not have conferred the State function in its entirety, it may be possible to read down the Commonwealth authorisation to permit the officer to perform the function only in situations where there is the necessary connection with Commonwealth legislative power.[81]
In many ways Hughes represents a considerable achievement, as the Court was able to present virtually a unanimous view on a matter of national importance around two months after the case was heard.[82] Hughes also demonstrates, however, the limitations inherent in all joint judgments: the joint judgment here is carefully confined to the particular circumstances of this case, and does not examine the theory underlying co-operative legislative schemes in any detail.[83] The following discussion identifies three issues raised by Hughes that may require further elaboration in future cases, and then analyses further the joint judgment’s approach to two key issues.
As stated above, the joint judgment held that it was necessary for the Commonwealth authorisation here to be independently supported by a head of Commonwealth legislative power because these provisions (in their view) imposed a duty on the Commonwealth DPP to prosecute State Corporations Law offences.[84] It is not clear, however, whether this is the only situation in which a connection with Commonwealth power is required.[85]
One possibility is that a connection with Commonwealth power may also be required in order to authorise the performance of coercive functions (that is, functions which have the capacity adversely to affect the rights of individuals).[86] In discussing the executive power, the joint judgment indicates that a coercive function may require a closer connection with Commonwealth legislative power than a non-coercive function.[87] Would it be necessary, then, to show a connection with Commonwealth power to authorise a Commonwealth officer to perform a coercive function conferred by a State that the officer is merely permitted, rather than obliged, to perform? The following statement in the joint judgment suggests that, in this situation, it would not be necessary to relate the Commonwealth authorisation to a head of power:
The present case emphasises that for the Commonwealth to impose on an officer or instrumentality of the Commonwealth powers coupled with duties adversely to affect the rights of individuals, where no such power is directly conferred on that officer or instrumentality by the Constitution itself, requires a law of the Commonwealth supported by an appropriate head of power.[88]
Another possibility is that a connection with Commonwealth power may be required in order to authorise Commonwealth Ministers to perform functions under State law. In other contexts the Court has indicated that the power of one polity to make laws directly affecting persons engaged by another polity may be more limited in relation to persons engaged ‘at the higher levels of government’ (including Ministers and ‘high level statutory office holders’) than with lower-ranking officials.[89] The following passage in the joint judgment, however, does not appear to draw a distinction between the position of Ministers and other members of the executive government[90] under the national corporations scheme:
These points [that the Commonwealth provisions here go beyond removing s 109 inconsistency] may be emphasised by reference to s 46 of the [Commonwealth] Corporations Act. This operates in the present case to direct the Attorney-General with respect to the exercise of the powers in relation to the [Commonwealth] DPP conferred on the Attorney-General by ss 7 and 8 of the DPP Act. The Executive Government of the Commonwealth, which is provided for in Ch II of the Constitution (ss 61–70) and of which the Attorney-General is part, involves the execution and maintenance of laws of the Commonwealth, not those of the States.[91]
Another issue to be resolved is whether the Commonwealth authorisation in the national corporations scheme is wholly supported by the executive power combined with the express incidental power. As stated above, the joint judgment stated that these provisions ‘may be’ supported in their entirety by these powers, and indicated that this argument is stronger in relation to the conferral of non-coercive functions.[92] Kirby J, however, provided a clear indication that, in his view, the executive power and the express incidental power, by themselves, would not support these Commonwealth provisions.[93]
Of course, the executive power would add little to the Commonwealth’s other heads of legislative power[94] unless it could be argued that all that is required in this context is to establish a connection between Commonwealth heads of legislative power and the prosecution of State Corporations Law offences taken as a whole, rather than between Commonwealth legislative power and particular offences contained in the Corporations Law. If the executive power is seen as a purposive power,[95] then some support for this argument can be derived from statements that a Commonwealth statutory body may validly acquire shares in a company that engages in activities both within and outside the statutory body’s functions, provided it can be shown that the purchase of shares in that company is for the purpose of giving effect to the body’s statutory functions.[96]
As stated above, the Court was satisfied that, in this case, there was a sufficient connection with Commonwealth legislative power in the particular circumstances of the prosecution.[97] More significantly perhaps, the joint judgment held that ‘s 15A of the [Acts Interpretation Act 1901 (Cth)] may be applied to read down a provision expressed in general terms, including a power to prosecute so as to apply only where the particular prosecution is supported by a head of power.’[98] It seems likely, however, that there would be limits on the extent of permissible reading down — for example, could the Commonwealth DPP prosecute a murder because it happened to occur in a lighthouse?[99]
There are two competing principles at play here. It is clear, on the one hand, that it is not necessary for an Act to nominate the head of power under which it is enacted, because ‘[t]he question is not one of intention but of power’.[100] On the other hand, if a generally expressed law goes beyond the limits of Commonwealth power, s 15A of the Acts Interpretation Act 1901 (Cth) does not (and could not) give the Court ‘the legislative task of making a new law from the constitutionally unobjectionable parts of the old’.[101] The Court therefore generally requires the law under consideration (either in its terms or from its subject matter) to provide some indication of the limitation by reference to which it is to be read down.[102]
In this case, of course, the Commonwealth provisions referred in general terms to functions and powers conferred by a ‘corresponding law’ (such as the Western Australia Corporations Act). The joint judgment stated that these provisions could be interpreted as applying only to ‘those functions and powers in respect of matters within the legislative powers of the Parliament of the Commonwealth’.[103] It appears to have been significant, however, that the Corporations Law offences in question expressly referred to matters outside Australia (which provided the connection with s 51(i) and (xxix)).[104] This suggests that, in determining whether the Commonwealth authorisation can be read down, the Court will consider whether the connection with Commonwealth power can be discerned from some law, including the terms in which the function to be conferred is expressed in the relevant State law.[105]
As well as leaving unresolved a number of issues that did not strictly arise for decision, the joint judgment also leaves some questions unanswered in relation to two key issues.
The first issue is whether the Commonwealth provisions ‘authorising’ the Commonwealth DPP to prosecute State Corporations Law offences also impose a duty to perform that function. The joint judgment’s conclusion that a duty was imposed meant that it was necessary to link the Commonwealth authorisation (in effect, the State function to be authorised by the Commonwealth law) with Commonwealth heads of legislative power. The existence of this duty, therefore, creates the possibility that the Commonwealth DPP may not be able to perform all the Corporations Law functions that are sought to be conferred on him or her. Yet the joint judgment appears to assume, rather than explain, both the existence of a duty and that this duty is imposed by the Commonwealth provisions.
As stated above, the joint judgment concluded that the Commonwealth DPP must be under a duty to perform the function of prosecuting State Corporations Law offences because he or she is the only person who can perform this function.[106] This conclusion does not necessarily follow. Kirby J stated, for example, that the Commonwealth DPP may not be under any legally enforceable obligation to perform this function, and that the sanctions for non-performance may be merely ‘political and intergovernmental’.[107] Even if there were a duty, it does not necessarily follow (at least as a matter of statutory construction) that the duty, if it exists, must be imposed by a Commonwealth law.[108] The prosecution and interveners argued that any duty was imposed by State law.[109]
Of course, these statutory construction arguments could not be accepted if there were constitutional reasons for imposing a duty, or for concluding that this duty was imposed by a Commonwealth law. The joint judgment, however, expressly did not consider whether the duty, and the imposition of that duty by Commonwealth law, was implied as a ‘constitutional imperative’.[110]
In addition to their statutory construction arguments, the prosecution and interveners argued further that there was no constitutional reason for construing the Commonwealth authorisation as imposing a duty. Duncan and Cram both concerned a body (the Coal Industry Tribunal) on which the States conferred certain functions exclusively, and (it was argued) there was no suggestion in either of those cases that the Commonwealth authorisation imposed a duty on the Tribunal. The joint judgment in Hughes responded to this argument as follows:
That may well be so, but would not undermine the decision in Duncan. This is because the several judgments of Mason, Murphy, Brennan and Deane JJ in [Duncan] support the proposition that the powers in s 51(xxxv) and s 51(xxxix) support legislation to establish a tribunal to exercise federal and State powers where this may better achieve the object of preventing and settling interstate disputes in the coal industry. What is said above respecting the powers and functions of the DPP which derive from State law is consistent with that approach.[111]
The joint judgment appears to suggest that, because the necessary connection with a head of power would have existed in Duncan to support the imposition of a duty, the conclusion here that the Commonwealth authorisation imposes a duty (and therefore must be independently supported by a head of power) is consistent with Duncan. This is, at the very least, a narrow interpretation of Duncan.[112]
Curiously, the joint judgment in Hughes does not refer to the majority judgment of Gibbs CJ in Duncan.[113] That judgment does not support a proposition that, in some circumstances, the Commonwealth authorisation must be independently supported by a head of power. The Chief Justice stated in a well-known passage:
There is no express provision in the Constitution, and no principle of constitutional law, that would prevent the Commonwealth and the States from acting in co-operation, so that each, acting in its own field, supplies the deficiencies in the power of the other ... [to achieve] a uniform and complete legislative scheme.[114]
Equally, Gibbs CJ did not appear to require any link at all between the heads of Commonwealth legislative power and the functions being conferred by the State. For example, he stated that ‘[i]t would be an absurd result’ if a public servant could not be given power to collect State taxes as well as Commonwealth taxes,[115] even though collecting State taxes would not seem actively to promote the collection of Commonwealth taxes.[116] It can be seen, therefore, that there has been something of a shift in the approach of the Court to co-operative schemes between Duncan and Hughes.
The second key issue in Hughes was whether co-operative schemes of this sort are consistent, or not inconsistent, with the federal structure of the Constitution.[117] This issue is not addressed explicitly in the joint judgment.[118] Nonetheless, the joint judgment may have been influenced by a concern that co-operative legislative schemes could be used to undermine the federal division of executive power.[119] Significantly, the need to relate the Commonwealth authorisation to a head of Commonwealth power only arises, in practice, when a function is conferred on a Commonwealth body exclusively.[120] Even though co-operative legislative schemes (by definition) require the participation of the States, some might take the view that the federal structure is not just a division of governmental power, but also a division of political accountability.[121] On this view it might be thought that the result in Hughes was required to ensure that a State cannot pass political accountability for a function to the Commonwealth by conferring the function exclusively on a Commonwealth body.
This approach would be consistent with views expressed in other judgments about the nature of the Australian federation. Most notably, it has been argued that ‘at the heart of Re Wakim lies a conception of the Australian federation as consisting of separate, distinct “sovereigns” governing distinct “spheres”.’[122] This conception of federation emerges most clearly from the judgment of McHugh J in that case, who states that ‘[i]n a dual political system you do not expect to find either government legislating for the other’.[123] The opposing conception of federation, taken by Kirby J, is that the Constitution provides for the different levels of government to ‘co-operat[e] in a rational, harmonious and generally efficient way’.[124] These opposing conceptions of federation (what might be termed ‘co-ordinate’ and ‘co-operative’ federalism, respectively)[125] appear in other contexts, such as inter-governmental immunities[126] and conflict of laws.[127]
To a large extent, the choice of the ‘co-ordinate’ or ‘co-operative’ conception of federation will determine whether co-operative schemes of this sort are regarded as consistent with, or contrary to, a federation.[128] For example, if one adopts the ‘co-operative’ conception of federation, many of the concerns expressed above about whether co-operative schemes could undermine the federal division of executive power and political accountability can be readily answered. In relation to the federal division of power, it could be argued that the need for the participation of the States (and all States if a national scheme is to be effective) provides a sufficient practical limitation on the ambit of co-operative legislative schemes.[129] In relation to political accountability, it could be argued that co-operative schemes can actually promote political accountability, because the bodies administering the scheme are answerable to a single Minister[130] and that, in any event, the State retains political responsibility in some form, as the relevant Minister is accountable to the Parliament for the State’s involvement in the scheme.
It is not necessary here to determine which conception of federation is more appropriate for Australia; federalism provokes considerable disagreement both in Australia[131] and elsewhere.[132] Importantly, however, judges should not assume that the Constitution incorporates either the ‘co-ordinate’ or the ‘co-operative’ conception of federation; both are consistent with the text and structure of the Constitution.[133] The most that can be said, then, is that arrangements such as the national corporations scheme are neither necessarily consistent, nor necessarily inconsistent, with the Constitution. Some might take the view that the Court is primarily there to prevent unilateral encroachments on the power of one government by another level of government,[134] and preventing co-operative schemes of this sort merely impedes efficient government with no corresponding benefit.[135] Others, however, might take the view that co-operative schemes of this sort undermine the ‘fundamental purpose’ of federation of ‘secur[ing] to citizens the liberties that derive from the diffusion of sovereign power’.[136] It is to be hoped that the High Court approaches the remaining issues left unresolved in Hughes by acknowledging openly the choices confronting it, rather than basing its decisions on ‘tacit, but largely undefended assumption[s]’.[137]
GRAEME HILL[*]
[*] (2000) 171 ALR 155 (‘Hughes’).
[1] Consisting of the Corporations Act 1989 (Cth) (‘Commonwealth Corporations Act’) and the Corporations Acts of the States and the Northern Territory (eg, the Corporations (Western Australia) Act 1990 (WA) (‘WA Corporations Act’)).
[2] Re Wakim; Ex parte McNally [1999] VSC 227; (1999) 163 ALR 270 (‘Wakim’).
[3] Byrnes v The Queen [1999] HCA 38; (1999) 164 ALR 520 (‘Byrnes’); Bond v The Queen [2000] HCA 13; (2000) 169 ALR 607 (‘Bond’).
[4] See, eg, Malcolm Maiden, ‘High Court to Sink Corporate Law’, Sydney Morning Herald (Sydney), 18 March 2000, 103; Malcolm Maiden, ‘High Court May Drive Nail into Corporations Law Coffin’, The Age (Melbourne), 20 March 2000, C3.
[5] Under ss 40 and 18, respectively, of the Judiciary Act 1903 (Cth).
[6] Hughes (2000) 171 ALR 155.
[7] Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ.
[8] This order was made by consent on 8 May 2000.
[9] That is, complementary Commonwealth and State legislation that confers functions on a single body. For some examples of the ‘many such arrangements’ see Hughes (2000) 171 ALR 155, 185–6, fn 146 (Kirby J).
[10] See, eg, s 29(2) of the WA Corporations Act; see also s 45(1) of the Commonwealth Corporations Act.
[11] See ss 29(1) (in relation to the Corporations Law of WA) and 30(1) (in relation to the Corporations Law of another jurisdiction) of the WA Corporations Act.
[12] See ss 29(2) and 30(2) of the WA Corporations Act. These provisions ensure, for example, that general references in the applied State law (eg, to ‘the Attorney-General’) are interpreted as references to things of the Commonwealth, rather than the State. See also s 32 of the WA Corporations Act.
[13] Hughes (2000) 171 ALR 155, 161–2 (Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ), 179–80 (Kirby J).
[14] Ibid 162–3 (Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ), 181 (Kirby J). A similar argument had been rejected in Byrnes [1999] HCA 38; (1999) 164 ALR 520, 523–4 (Gaudron, McHugh, Gummow and Callinan JJ).
[15] Hughes (2000) 171 ALR 155, 162.
[16] Ibid 182. One example given of these difficulties is whether the guarantee of a trial by jury provided by s 80 of the Australian Constitution (‘Constitution’) applies to State Corporations Law offences: at 180–1.
[17] Ibid 182; see also the joint judgment, where it was held that s 29 of the WA Corporations Act is not ‘defective for want of sufficient specification of the command which, in an Austinian sense, it directs to the community’: at 162. Kirby J noted that, while similar problems arise in relation to s 79 of the Judiciary Act 1903 (Cth), it has not been suggested that s 79 is invalid: at 182.
[18] Ibid 182. This is, of course, a well-settled aspect of United States law relating to ‘due process’. During the course of argument, McHugh J remarked: ‘If we had a Bill of Rights with a due process clause, this legislation would be flat out passing muster, I think. How would the citizen really know what his or her rights were?’: Transcript of Proceedings, R v Hughes (High Court of Australia, Gleeson CJ, Gaudron, McHugh, Gummow, Kirby, Hayne and Callinan JJ, commencing 1 March 2000) 79.
[19] See especially R v Duncan; Ex parte Australian Iron & Steel Pty Ltd [1983] HCA 29; (1983) 158 CLR 535 (‘Duncan’). The Court had previously considered co-operative schemes (see, eg, R v Lydon; Ex parte Cessnock Collieries Ltd [1960] HCA 19; (1960) 103 CLR 15) without ruling on their constitutional validity: Duncan [1983] HCA 29; (1983) 158 CLR 535, 549 (Gibbs CJ), 561–2 (Mason J).
[20] Sometimes the constitutional difficulty lies with the function itself (eg, the Commonwealth and the States (whether acting separately or in co-operation) could not confer a function on a Commonwealth or a State officer that impermissibly impeded interstate trade and commerce, contrary to s 92). Sometimes, however, a constitutional difficulty can arise from a State function (valid in itself) being conferred on a Commonwealth officer or body. For example, in Wakim the Court held that it was contrary to Ch III of the Constitution for State jurisdiction to be conferred on federal courts.
[21] In both Byrnes and Bond the Court found that the relevant State and Commonwealth provisions, respectively, did not confer the necessary authority. The nature of the function under consideration in those cases (bringing appeals against sentence), and its potential to jeopardise the liberty of the defendant, meant that very specific authority was required: Byrnes [1999] HCA 38; (1999) 164 ALR 520, 536 (Gaudron, McHugh, Gummow and Callinan JJ), 543–4 (Kirby J); Bond [2000] HCA 13; (2000) 169 ALR 607, 613–14.
[22] Hughes (2000) 171 ALR 155, 163 (Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ), 177 (Kirby J).
[23] See ss 29 and 31 of the WA Corporations Act: Hughes (2000) 171 ALR 155, 163 (Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ), 183 (Kirby J).
[24] See s 47 of the Commonwealth Corporations Act and reg 3(1)(d) of the Corporations (Commonwealth Authorities and Officers) Regulations 1990 (Cth), which provide that the Commonwealth DPP has the functions and powers that are expressed to be conferred on it by or under a ‘corresponding law’ (here, the WA Corporations Act): Hughes (2000) 171 ALR 155, 160 (Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ), 185 (Kirby J). The joint judgment also refers to s 6(2)(a) of the Director of Public Prosecutions Act 1983 (Cth) (‘DPP Act’), which provides that the Commonwealth DPP’s functions include ‘functions that are conferred by or under any other law of the Commonwealth’ (emphasis added): at 159–60.
[25] Mr Hughes submitted that ss 43(2) and 45 of the Commonwealth Corporations Act purported to confer this function on the Commonwealth DPP. This argument was rejected, on the basis that these provisions operated only within the ACT: Hughes (2000) 171 ALR 155, 163, fn 18 (Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ), 178–9 (Kirby J); see also Byrnes [1999] HCA 38; (1999) 164 ALR 520, 540 (Gaudron, McHugh, Gummow and Callinan JJ).
[26] [1983] HCA 29; (1983) 158 CLR 535, 554 (Gibbs CJ; Murphy J agreeing: at 566, Wilson and Dawson JJ agreeing: at 567), 563–4 (Mason J), 579 (Brennan J), see also 592 (Deane J). Cf the interpretation of Duncan given in Hughes (2000) 171 ALR 155, 167–8 (Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ) (discussed further below in nn 111–116). In Wakim some of the majority judges considered that the role of the Commonwealth authorisation in that case could not be to remove the s 109 inconsistency, because the Commonwealth had no power over the relevant ‘field’: see especially Wakim [1999] VSC 227; (1999) 163 ALR 270, 292 (McHugh J). This overlooks the fact that an inconsistency can arise between a Commonwealth law and a State law, even though the Commonwealth would not have power to pass that State law: see Geoffrey Sawyer, Australian Federalism in the Courts (1967) 140–1. The example given by Professor Sawyer is R v Brisbane Licensing Court; Ex parte Daniell [1920] HCA 24; (1920) 28 CLR 23, where a Commonwealth electoral law forbade the holding of a State election on the same day as a Commonwealth election. Another example is the power of the Commonwealth to exempt private persons from State taxes, even though the Commonwealth’s taxation power (s 51(ii)) does not extend to State taxation: see Leslie Zines, The High Court and the Constitution (4th ed, 1997) 341–9; see also below n 116.
[27] As acknowledged by Gummow and Hayne JJ in Wakim [1999] VSC 227; (1999) 163 ALR 270, 306. On this view, the Commonwealth ‘authorisation’ is supported by whatever head of power supports the legislation whose ambit of operation is being delineated (here, the DPP Act).
[28] [1987] HCA 28; (1987) 163 CLR 117. The Court indicated that the reasons why the States could not unilaterally confer functions on a Commonwealth body might apply, mutatis mutandis, to the Commonwealth conferring functions on a State body: at 128. Clearly, s 109 would not be relevant in this situation: cf Wakim [1999] VSC 227; (1999) 163 ALR 270, 302 (Gummow and Hayne JJ). As to the immunity of State bodies or officials from Commonwealth laws, see, eg, Queensland Electricity Commission v Commonwealth [1985] HCA 56; (1985) 159 CLR 192.
[29] See State Chamber of Commerce and Industry v Commonwealth [1987] HCA 38; (1987) 163 CLR 329, 357 (Mason CJ, Wilson, Dawson, Toohey and Gaudron JJ) (‘Second Fringe Benefits Tax Case’).
[30] Wakim [1999] VSC 227; (1999) 163 ALR 270, 302, 306 (Gummow and Hayne JJ, Gleeson CJ and Gaudron J agreeing: at 281); see also 292–3 (McHugh J, Callinan J agreeing: at 345), 333–4 (Kirby J). Cf Gould v Brown (1998) 193 CLR 346, 382–3 (Brennan CJ and Toohey J), who stated that the Commonwealth authorisation merely removed the s 109 inconsistency.
[31] See ss 71 and 77 of the Constitution.
[32] Wakim [1999] VSC 227; (1999) 163 ALR 270, 280 (Gleeson CJ), 292–3 (McHugh J), 307–8 (Gummow and Hayne JJ). Unlike the majority judges, Kirby J considered the Commonwealth provisions were supported by the express incidental power (s 51(xxxix)) and, if needs be, the implied nationhood power: see 334–6.
[33] See Cheryl Saunders, ‘In the Shadow of Re Wakim’ (1999) 17 Company and Securities Law Journal 507, 516. In Wakim the majority held that Ch III of the Constitution sets out exhaustively the jurisdiction that can be conferred on federal courts and, therefore, by implication, prohibits the States conferring additional jurisdiction on those courts. For a more comprehensive analysis of Wakim, see, eg, Graeme Hill, ‘The Demise of Cross-Vesting’ (1999) 27 Federal Law Review 547.
[34] See Wakim [1999] VSC 227; (1999) 163 ALR 270, 305 (Gummow and Hayne JJ): ‘In the present cases the immediate question is whether the Commonwealth Parliament has any power either to consent to States conferring jurisdiction on federal courts or itself to confer State judicial power on federal courts’ (emphasis added). On the other hand, Gleeson CJ (at 279–80) and McHugh J (at 292) appeared to require a link with Commonwealth power, whether or not there was a prohibition. Similarly, Kirby J (who did not find that the States were prohibited from conferring jurisdiction on federal courts) nevertheless required that the Commonwealth provisions be independently supported by a head of power: at 333–4.
[35] In the context of Ch III, some judges stated that, because the Constitution makes express provision for the Commonwealth to confer federal jurisdiction on State courts in s 77(iii), and does not contain any provision empowering the States to confer State jurisdiction on federal courts, the States were impliedly prohibited from doing so: Wakim [1999] VSC 227; (1999) 163 ALR 270, 289 (McHugh J); Gould v Brown (1998) 193 CLR 346, 451 (Gummow J). By contrast, although the Constitution makes express provision for the States to refer legislative power to the Commonwealth in s 51(xxxvii) and (xxxviii) and does not expressly authorise co-operative legislative schemes, it is not the case that co-operative legislative schemes are therefore impliedly prohibited. Indeed, in Duncan Deane J held that s 51(xxxvii) and (xxxviii) (and other provisions) indicate that Commonwealth–State co-operation is ‘a positive objective of the Constitution’, and ‘[i]t would be inconsistent with that objective for there to be any general constitutional barrier to concurrent legislation by Commonwealth and State Parliaments’: [1983] HCA 29; (1983) 158 CLR 535, 589. Cf Gummow J in Gould v Brown: ‘It may be noted that, if the [cross-vesting legislation is valid], the legislatures concerned have achieved results that may have followed by pursuit of the forms of “co-operative federalism” contemplated by pars (xxxvii) and (xxxviii) of s 51’: (1998) 193 CLR 346, 443.
[36] Hughes (2000) 171 ALR 155, 163–4 (Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ), cf 176–7 (Kirby J).
[37] Ibid 164.
[38] Section 33 of the WA Corporations Act provides that, where a function or power is conferred on a Commonwealth officer or authority, ‘that function or power may not be performed or exercised by an officer or authority of the State’.
[39] Hughes (2000) 171 ALR 155, 164. The joint judgment notes that the Commonwealth DPP would retain its ‘prosecutorial discretion’ in relation to this State function: at 161. Given this, the difference between a ‘duty’ and the mere conferral of a power may not be as marked (at least in this case) as the joint judgment appears to assume. Even with a mere power, the decision-maker is under an obligation to consider whether to exercise that power: at 190 (Kirby J); see also Commissioner of State Revenue (Vic) v Royal Insurance Australia Ltd [1994] HCA 61; (1994) 182 CLR 51, 88 (Brennan J, Toohey and McHugh JJ agreeing: at 103).
[40] Hughes (2000) 171 ALR 155, 164 (Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ), see also 185 (Kirby J). The question of whether s 81 of the Constitution (which permits the appropriation of money ‘for the purposes of the Commonwealth’) would itself provide the necessary authority for the expenditure of Commonwealth money on the performance of State functions was not considered. The meaning of ‘the purposes of the Commonwealth’ in s 81 was left unresolved in Victoria v Commonwealth and Hayden [1975] HCA 52; (1975) 134 CLR 338 (‘Australian Assistance Plan Case’) and Davis v Commonwealth [1988] HCA 63; (1988) 166 CLR 79, 95–6 (Mason CJ, Deane and Gaudron JJ), 114–15 (Brennan J).
[41] Hughes (2000) 171 ALR 155, 189–90.
[42] Ibid 188–9. By contrast, it seems that the joint judgment considered that the coercive nature of the function would only affect whether the function was supported by executive power and the implied incidental power: at 167–8. Earlier, Kirby J stated that, ‘as with every federal law’, it was necessary to demonstrate the constitutional validity of the Commonwealth authorisation: at 186. This reflects his view that, in any co-operative legislative scheme, the Commonwealth authorisation must be independently supported by a head of power: see Wakim [1999] VSC 227; (1999) 163 ALR 270, 333–4; but see below n 128.
[43] If the Commonwealth could have enacted the offence itself, the Commonwealth law that authorises the Commonwealth officer to prosecute the State offence is itself a law with respect to the relevant subject matter: Hughes (2000) 171 ALR 155, 166 (Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ).
[44] As noted by Kirby J: ibid 186–7. In some circumstances, however, a connection might exist: see, eg, Matthews v Australian Securities and Investments Commission [2000] FCA 288; (2000) 97 FCR 396, 405–6 (Ryan, Lee and Branson JJ).
[45] See reg 3(1) of the Corporations (Commonwealth Authorities and Officers) Regulations 1990 (Cth).
[46] This is the effect of s 31(1) of the WA Corporations Act, read together with s 29.
[47] Hughes (2000) 171 ALR 155, 166–7 (Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ), 187 (Kirby J). The joint judgment refers to s 15A of the Acts Interpretation Act 1901 (Cth), which provides:
Every Act shall be read and construed subject to the Constitution, and so as not to exceed the legislative power of the Commonwealth, to the intent that where any enactment thereof would, but for this section, have been construed as being in excess of that power, it shall nevertheless be a valid enactment to the extent to which it is not in excess of that power.
[48] Section 1064 of the Corporations Law, now repealed.
[49] The definitions are reproduced in the joint judgment: Hughes (2000) 171 ALR 155, 158–9, citing Corporations Law s 9.
[50] See para 8 of the case stated as reproduced in Hughes (2000) 171 ALR 155, 159 (Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ).
[51] The joint judgment refers to Horta v Commonwealth [1994] HCA 32; (1994) 181 CLR 183, 193–4; see also Polyukhovich v Commonwealth [1991] HCA 32; (1991) 172 CLR 501 (‘War Crimes Act Case’).
[52] Hughes (2000) 171 ALR 155, 166 (Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ), 187 (Kirby J).
[53] Ibid 166.
[54] The prosecution and the Commonwealth argued that s 51(xx) would support an offence in the form of s 1064 of the Corporations Law, because s 1064 conferred a privilege on corporations (which, due to the nature of ‘prescribed interests’, were likely to be ‘financial corporations’) in relation to their financial activities. While two members of the Court indicated during the course of argument a preliminary view that the offence might come within s 51(xx) on this basis (Transcript of Proceedings, R v Hughes (High Court of Australia, Gleeson CJ, Gaudron, McHugh, Gummow, Kirby, Hayne and Callinan JJ, commencing 1 March 2000) 49 (Gaudron J), 51 (Hayne J)), the joint judgment expressly left this issue open: Hughes (2000) 171 ALR 155, 166.
[55] See George Williams, ‘Hughes Decision Heightens Uncertainty’, Australian Financial Review (Sydney), 5 May 2000, 33. In New South Wales v Commonwealth the High Court held that s 51(xx) does not include the power to incorporate companies: (1990) 169 CLR 482 (‘Incorporation Case’). In Hughes Kirby J stated that ‘[t]his narrow decision of the Court will, in my opinion, one day need to be revisited’: (2000) 171 ALR 155, 171. In any event, it might be argued that a less stringent connection with power is required when the Commonwealth is merely attempting to authorise a Commonwealth authority to perform a function conferred by a State law, rather than attempting itself to confer that function.
[56] Section 61 of the Constitution (‘the execution and maintenance of this Constitution, and of the laws of the Commonwealth’).
[57] Section 51(xxxix) of the Constitution (‘matters incidental to the execution of any power vested by this Constitution ... in the Government of the Commonwealth ... or in any department or officer of the Commonwealth’).
[58] The Heads of Agreement: Future Corporate Regulation in Australia, tabled in the Commonwealth Senate on 11 December 1990: Commonwealth, Parliamentary Debates, Senate, 11 December 1990, 5380 (Michael Tate) (‘Heads of Agreement’).
[59] Ibid cl 27.1.
[60] Some connection with heads of Commonwealth legislative power may be necessary in order to demonstrate that implementing the 1990 Heads of Agreement was for the purpose of the execution and maintenance of the Constitution and the laws of the Commonwealth: cf Hughes (2000) 171 ALR 155, 164–5 (Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ).
[61] Many of the persons subject to the Corporations Law will be either trading or financial corporations, or persons closely connected to those corporations. As to the extent to which s 51(xx) supports laws operating on persons other than s 51(xx) corporations, see, eg, R v Australian Industrial Court; Ex parte CLM Holdings Pty Ltd (1977) 136 CLR 235; Actors and Announcers Equity Association of Australia v Fontana Films Pty Ltd (1982) 150 CLR 169; Re Dingjan; Ex parte Wagner [1995] HCA 16; (1995) 183 CLR 323.
[62] Section 51(i) of the Constitution enables the Commonwealth to enact measures which promote interstate trade and commerce: O’Sullivan v Noarlunga Meat Ltd [1954] HCA 29; (1954) 92 CLR 565, 598 (Fullagar J, Dixon CJ agreeing at 576, Kitto J agreeing at 598). Arguably, the uniform national regulation of corporations promotes interstate trade and commerce, at least as carried on by corporations: see further below n 68.
[63] In addition to the legislative powers specifically conferred by the Constitution, the Commonwealth also has an implied legislative power to make laws concerning ‘enterprises and activities peculiarly adapted to the government of a nation and which cannot otherwise be carried on for the benefit of the nation’: Australian Assistance Plan Case [1975] HCA 52; (1975) 134 CLR 338, 397 (Mason J); see also Davis [1988] HCA 63; (1988) 166 CLR 79. On one view this power is merely a particular aspect of the executive power, in combination with the express incidental power: see, eg, Transcript of Proceedings, R v Hughes (High Court of Australia, Gleeson CJ, Gaudron, McHugh, Gummow, Kirby, Hayne and Callinan JJ, commencing 1 March 2000) 42 (Gaudron J); see also Australian Assistance Plan Case [1975] HCA 52; (1975) 134 CLR 338, 412–14 (Jacobs J); Tasmania v Commonwealth [1983] HCA 21; (1983) 158 CLR 1, 252 (Deane J) (‘Tasmanian Dams Case’).
[64] Hughes (2000) 171 ALR 155, 165, quoting Mason J in Duncan [1983] HCA 29; (1983) 158 CLR 535, 560.
[65] Ibid, citing Wilson and Dawson JJ in Davis [1988] HCA 63; (1988) 166 CLR 79, 102–3. This passage suggests that the joint judgment, in referring to s 61 in combination with s 51(xxxix), has in mind the implied nationhood power, rather than a connection with enumerated heads of power, such as s 51(i) or (xx).
[66] Ibid, quoting Brennan J in Davis [1988] HCA 63; (1988) 166 CLR 79, 113, who stated that ss 61 and 51(xxxix) would only support offences that were ‘necessary to protect the efficacy of the execution by the Executive Government of its powers and capacities’ (emphasis added).
[67] Ibid 188–9.
[68] For example, Hughes left open the question of whether the Commonwealth DPP can bring prosecutions for offences against s 1064 of the Corporations Law generally, because the Court relied on the fact that the scheme here involved overseas conduct to conclude that the prosecution was supported by s 51(i) and (xxix) of the Constitution. In this context the extent to which the Commonwealth can regulate intrastate trade and commerce under s 51(i) may again become a live issue. For example, in R v O’Halloran the NSW Supreme Court upheld the power of the Commonwealth DPP to prosecute offences in relation to the trading of shares, partly on the basis that the fact that shares are traded on the Stock Exchange Automated Trading System on a national basis provides a sufficient connection between these offences and s 51(i), even in relation to share trading occurring within a single state: [2000] NSWSC 704 (Unreported, Barr J, 7 July 2000), available on <http://scaleplus.law.gov.au> at 30 August 2000 (copy on file with author) [29]–[33].
[69] Cf Nicholas Reece, ‘Still Doubt on Crime Prosecution: ASIC’, Australian Financial Review (Sydney), 4 May 2000, 10; Chris Merritt, ‘ASIC Jurisdiction in Jeopardy’, Australian Financial Review (Sydney), 4 May 2000, 11. In GPS First Mortgage Pty Ltd v Lynch (High Court of Australia, No B51 of 2000) the constitutional power of ASIC (then the Australian Securities Commission) to register companies under the Corporations Law is being challenged: see Bernard Lane, ‘Feds Urge States to Cede Company Law Powers’, The Australian (Sydney), 14 July 2000, 26. On 22 June 2000 Callinan J removed the whole of these proceedings from the Federal Court into the High Court on the application of the Attorney-General of the Commonwealth (under s 40 of the Judiciary Act 1903 (Cth)).
[70] See especially Hughes (2000) 171 ALR 155, 189 (Kirby J): ‘Clearly, it is a fragile foundation for a highly important national law. The present accused fails in his challenge. But the next case may not present circumstances sufficient to attract the essential constitutional support.’
[71] ASIC’s predecessor, the National Companies and Securities Commission, was jointly established by Commonwealth and State legislation (as was the Coal Industry Tribunal considered in Duncan and Cram). It was considered that this had led to ‘fragmented administration, ineffective use of resources and the lack of consistent, co-ordinated and coherent direction in regulation and enforcement’: see the Second Reading Speech to the Corporations Legislation Amendment Bill 1990 (Cth), Commonwealth, Parliamentary Debates, House of Representatives, 8 November 1990, 3664 (Michael Duffy, Attorney-General). Some take a more agnostic view of the benefits of a national corporations scheme (see, eg, Ian Ramsay, ‘Company Law and the Economics of Federalism’ (1990) 19 Federal Law Review 169), while others suggest that only some aspects of corporate law should be regulated nationally: Michael Whincop, ‘The Political Economy of Corporate Law Reform in Australia’ [1999] FedLawRw 4; (1999) 27 Federal Law Review 77. Professor Sawer, however, while accepting that a problem does not become national merely because it is common to many regions observed that ‘[t]he integration of industry, commerce and finance has ... made a good deal of economic regulation inevitably national’: Geoffrey Sawer, Modern Federalism (1969) 129 (emphasis added).
[72] See above nn 64–66 and accompanying text; but see also above n 67.
[73] Attorney-General, Commonwealth of Australia, and the Minister for Financial Services and Regulation, Commonwealth of Australia, Historic Agreement on Corporations Law, Press Release (25 August 2000) <http://law.gov.au/aghome/agnews/2000newsag/jointAGHockeyCorps
.htm> at 30 August 2000 (copy on file with author). There is a lingering uncertainty whether a reference of power under s 51(xxxvii) that is not limited in time (cf for a fixed period) could be withdrawn, once given: see, eg, Board of Examiners under the Mines Safety and Inspection Act 1994 (WA) v Lawrence [2000] FCA 900 (Unreported, French, Lee and Carr JJ, 5 July 2000), available on <http://scaleplus.law.gov.au> at 30 August 2000 (copy on file with author) [17] (French J). While the validity of co-operative schemes generally could be put beyond doubt by amending the Constitution, conducting a referendum would involve expense and delay, even if it were successful: see, in relation to the corporations cross-vesting scheme, Bob Baxt, ‘The Wakim Decision: What Should Be Done to Overcome Its Impact?’ (1999) 17 Company and Securities Law Journal 518, 519.
[74] Hughes (2000) 171 ALR 155, 163–4. The State law would be inconsistent with the Commonwealth law for the purposes of s 109 of the Constitution, and inoperative to this extent. See also Bond [2000] HCA 13; (2000) 169 ALR 607, 610.
[75] This issue was raised, but not decided, in Bond [2000] HCA 13; (2000) 169 ALR 607, 611, 613.
[76] But see the discussion in below Part IV(A)(1).
[77] See further below Part IV(B)(1).
[79] Coercive in the sense that performance of the function has the capacity to adversely affect the rights of individuals: see Hughes (2000) 171 ALR 155, 167–8 (Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ). While the coercive nature of a function is clear in the criminal context, the anonymous referee has observed that there may be situations in which it is not as clear whether the performance of a function has the capacity adversely to affect the rights of individuals in the relevant sense, eg, the function of arbitrating an award, if breach of the award gives rise to legislative sanctions.
[80] Subject to the discussion in below Part IV(A)(2).
[81] See the discussion in below Part IV(A)(3).
[82] The matter was argued on 1–2 March 2000, and judgment handed down on 3 May 2000.
[83] This may be because agreement could only be reached on narrow issues specific to this case or, to the extent there was agreement on principle, the agreement was only at a high level of generality. Some argue that such ‘incomplete theorising’ is no bad thing in some contexts: see, eg, Adrienne Stone, ‘Incomplete Theorizing in the High Court: Review Essay — Cass R Sunstein, Legal Reasoning and Political Conflict’ [1998] FedLawRw 8; (1998) 26 Federal Law Review 195. There is a difference between the Court’s refusing to determine issues that do not properly arise in the case before it, and choosing to decide a case on narrower, rather than broader, grounds. The former may well be a constitutional necessity: see Bass v Permanent Trustee Co Ltd (1999) ALR 198 CLR 334, 414 (Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ), cf 421 (Kirby J dissenting); the latter (however advisable) is a matter of judicial choice. (For a discussion of the reasons for avoiding the determination of constitutional issues where possible, see, eg, Multicon Engineering Pty Ltd v Federal Airports Corporation (1997) 47 NSWLR 631, 642 (Mason P; Gleeson CJ and Priestley JA agreeing).) Notably, even Kirby J stated here that the validity of the Commonwealth authorisation ‘should be explored no further than is strictly necessary to establish validity in this case’: Hughes (2000) 171 ALR 155, 187.
[84] See text accompanying above n 37. By contrast, Kirby J said that a connection with Commonwealth power is always required, particularly in the case of a coercive function: see above n 42.
[85] For example, in Wakim McHugh J appears to suggest that a Commonwealth authorisation will always have some substantive effect, because it confers a capacity to receive State functions: see [1999] VSC 227; (1999) 163 ALR 270, 292: ‘This statement [that the Commonwealth authorisation removes s 109 inconsistency] makes sense only if the Parliament of the Commonwealth has power ... to create federal courts to receive non-federal jurisdiction from sources other than itself.’ This raises difficult questions about whether the necessary capacity could be conferred by the State: cf Re Residential Tenancies Tribunal of NSW and Henderson; Ex parte Defence Housing Authority (1997) 190 CLR 410, 424–5 (Brennan CJ), 440 (Dawson, Toohey and Gaudron JJ), but see 454–5 (McHugh J), 472 (Gummow J), and also whether a Commonwealth law that ‘authorised’ such a State law would need to be independently supported by a head of power (cf above n 29 and accompanying text). As to the ability of the Commonwealth legislatively to modify its executive capacities, see, eg, Brown v West (1990) 169 CLR 195, 205; Barton v Commonwealth [1974] HCA 20; (1974) 131 CLR 477.
[88] Hughes (2000) 171 ALR 155, 167–8 (emphasis added).
[89] See Re Australian Education Union; Ex parte Victoria (1995) 184 CLR 188, 233 (Mason CJ, Brennan, Deane, Toohey, Gaudron and McHugh JJ), who also point out that Ministers and judges are not employees as such: at 233. Presumably, the Commonwealth DPP would be a high level statutory office holder.
[90] Which would include public servants, as well as statutory office holders like the Commonwealth DPP: see ss 64 and 67 of the Constitution.
[91] Hughes (2000) 171 ALR 155, 164–5 (emphasis added).
[92] See above nn 64–66 and accompanying text.
[93] See above n 67 and accompanying text.
[94] Although, as stated above, the implied nationhood power can be seen as an aspect of s 61 in combination with s 51(xxxix): see above nn 63 and 65.
[95] That is, s 61 (in combination with s 51(xxxix)) supports laws enacted for the purpose of the execution and maintenance of the Constitution and the laws of the Commonwealth. The wording of s 61 is similar to the defence power (s 51(vi), which refers to ‘the naval and military defence of the Commonwealth and the several States, and the control of the forces to execute and maintain the laws of the Commonwealth’), which is seen as a purposive power: Stenhouse v Coleman [1944] HCA 36; (1944) 69 CLR 457, 471 (Dixon J).
[96] Kathleen Investments (Aust) Ltd v Australian Atomic Energy Commission [1977] HCA 55; (1977) 139 CLR 117, 154–5 (Mason J). Another (albeit weaker) analogy can be drawn with the treaty implementation aspect of the external affairs power. In that context the High Court has stated that a law implementing a treaty may depart from the terms of the treaty, provided any variation is not ‘so substantial as to deny the law the character of a measure implementing the [treaty]’ and there are no deficiencies which ‘when coupled with other provisions of the law, make it substantially inconsistent with the [treaty]’: Victoria v Commonwealth (1996) 187 CLR 416, 489 (Brennan CJ, Toohey, Gaudron, McHugh and Gummow JJ) (‘Industrial Relations Act Case’).
[97] See above nn 48–52 and accompanying text.
[98] Hughes (2000) 171 ALR 155, 167, see also 188 (Kirby J). Cf the general principle of statutory interpretation that the Court should prefer an interpretation that is constitutionally valid over an interpretation that would invalidate the statute: recently confirmed in Residual Assco Group Limited v Spalvins [2000] HCA 33; (2000) 172 ALR 366, 374–5.
[99] See s 51(vii) (‘lighthouses, lightships, beacons and buoys’). I have borrowed this example from the Solicitor-General of the Commonwealth.
[100] Ex parte Walsh and Johnson; Re Yates [1925] HCA 53; (1925) 37 CLR 36, 135 (Starke J).
[101] Re F; Ex parte F [1986] HCA 41; (1986) 161 CLR 376, 385 (Gibbs CJ), quoting Bank of NSW v Commonwealth [1948] HCA 7; (1948) 76 CLR 1, 372 (Dixon J); see also Pidoto v Victoria [1943] HCA 37; (1943) 68 CLR 87, 111 (Latham CJ).
[102] See, eg, Industrial Relations Act Case (1996) 187 CLR 416, 502–3 (Brennan CJ, Toohey, Gaudron, McHugh and Gummow JJ).
[103] Hughes (2000) 171 ALR 155, 167, referring to Bourke v State Bank of NSW [1990] HCA 29; (1990) 170 CLR 276, 291 and Wilson v Minister for Aboriginal and Torres Strait Islander Affairs [1996] HCA 18; (1996) 189 CLR 1, 10, 26 (Gaudron J). It may be noted that the cases cited in the joint judgment all concerned constitutional prohibitions (the doctrine of intergovernmental immunities (first expounded in Melbourne Corporation v Commonwealth [1947] HCA 26; (1947) 74 CLR 31), implications derived from the separation of judicial power in Ch III of the Constitution, ‘other than State banking’ in s 51(xiii) of the Constitution), rather than (as here) an absence of power.
[104] Hughes (2000) 171 ALR 155, 166–7 (Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ).
[105] In the case of the national corporations scheme, this approach derives further support from the fact that the Corporations Law of a State is itself derived from the text of a Commonwealth statute (the Corporations Law of the ACT). Re Pacific Coal Pty Limited; Ex parte Construction, Forestry, Mining and Energy Union v Commonwealth provides some indication that the Court will not read down a Commonwealth provision merely because, in a particular factual situation, there is a connection with a head of power. In that case the dissenting judgments of Gaudron and Kirby JJ, after holding that the Commonwealth provisions in question were not supported by s 51(xxxv) (as did McHugh J: at 292–3), held further that the fact that many of the employers covered by the relevant award were s 51(xx) corporations did not mean that these provisions could be supported by s 51(xx) in their application to that award: (2000) 172 ALR 257, 275 (Gaudron J), 332–3 (Kirby J), see also 263 (Gleeson CJ, who upheld the validity of the legislation).
[106] See above nn 37–39 and accompanying text.
[107] Hughes (2000) 171 ALR 155, 190. A State Minister would be able to put political pressure on the Commonwealth Minister to direct the Commonwealth DPP to perform this function. One of the Commonwealth laws ‘picked up’ by s 29 of the WA Corporations Act was s 8 of the DPP Act, under which the Commonwealth Attorney-General could issue directions to the DPP. (Section 46 of the Commonwealth Corporations Act authorised Commonwealth Ministers to perform functions conferred by a State Corporations Act.)
[108] Ibid 189–90 (Kirby J).
[109] As stated above, although the Commonwealth DPP would ordinarily have a constitutional immunity from State laws purporting to impose duties on him or her, the Commonwealth provisions (it was argued) waived that immunity: see above nn 28–29 and accompanying text.
[110] Hughes (2000) 171 ALR 155, 164.
[111] Ibid 167.
[112] It could not be suggested, for example, that Duncan merely stands for a narrow ground on which the case might have been decided: see Industrial Relations Act Case (1996) 187 CLR 416,
484–5 (Brennan CJ, Toohey, Gaudron, McHugh and Gummow JJ). See also Dennis Rose, ‘The Implications of The Queen v Hughes for Cooperative Commonwealth–State Schemes’ [2000] 10 Butterworths Corporation Law Bulletin 7.
[113] Wilson and Dawson JJ agreed with Gibbs CJ: [1983] HCA 29; (1983) 158 CLR 535, 567. Murphy J stated that he ‘agreed generally with the reasons for judgment’ given by Gibbs CJ at 566, and went on to state why, in his view, the Commonwealth could itself confer the functions in question on the Tribunal under s 51(i), (xx), and (xxxv), without needing to rely on a co-operative scheme: at 566–7.
[114] Ibid 552.
[115] Ibid 553. Of course, it is unlikely that the States would confer this function on Commonwealth officers exclusively, so it may well be that the approach of the joint judgment in Hughes would not prevent a Commonwealth public servant from collecting both Commonwealth and State taxes either.
[116] On decided authority, the Commonwealth’s power to make laws with respect to taxation (s 51(ii) of the Constitution) extends only to Commonwealth taxation, and not State taxation: Victoria v Commonwealth [1957] HCA 54; (1957) 99 CLR 575, 614–15 (Dixon CJ, Kitto J agreeing: at 658) (‘Second Uniform Tax Case’). See also Allders International Pty Ltd v Commissioner of State Revenue (Vic) (1996) 186 CLR 630, 646–7 (Dawson J dissenting).
[117] There seems to have been a change of approach between Duncan and Wakim. In the former case, the question was whether there was anything in the Constitution that prohibited cooperative schemes, whereas the question in the latter was whether there was anything in the Constitution that permitted them. For example, in Duncan Gibbs CJ stated: ‘[t]he Constitution effects a division of powers between the Commonwealth and the States but it nowhere forbids the Commonwealth and the States to exercise their respective powers in such a way that each is complementary to the other’: [1983] HCA 29; (1983) 158 CLR 535, 552 (emphasis added), see also 562–3 (Mason J), 583 (Brennan J) and 589 (Deane J). By contrast, in Wakim McHugh J stated: ‘[t]here is not a word in Ch III which indicates expressly or by implication that it authorises the Parliament of the Commonwealth to create federal courts to exercise State jurisdiction or State judicial power’: [1999] VSC 227; (1999) 163 ALR 270, 289, see also 344 (Callinan J).
[118] Cf Hughes (2000) 171 ALR 155, 173–6 (Kirby J). Kirby J notes that ‘in the Australian federation, unlike some others’, co-operative schemes of this sort are generally permitted: at 175 (emphasis added). The distinctive features of the Australian federation, in his view, include the large size of the Australian continent and its relatively small and scattered population (at 174), and the ‘national common market’ (sometimes called the ‘free trade area’) established by Ch IV of the Constitution: at 175. In Canada, an administrative body may perform functions conferred both by federal and provincial laws: see, eg, PEI Potato Marketing Board v HB Willis Inc [1952] 2 SCR 392; 4 DLR (2nd) 146; British Columbia (Milk Board) v Grisnich [1995] 2 SCR 895, 908–9; 126 DLR (4th) 191, 200–1 (La Forest, L’Heureux-Dubé and Gonthier JJ), whereas this would not seem to be permitted in the United States: see, eg, New York v United States, [1992] USSC 92; 505 US 144 (1992) and Printz v United States, [1997] USSC 77; 521 US 898 (1997). Interestingly, however, in Canada the legislative power of the federal and provincial governments is mutually exclusive (see ss 91 and 92 of the Constitution Act 1867 (Canada)), whereas in the United States (like Australia) the States mostly have concurrent legislative power over the topics of federal legislative power (subject to provisions such as ss 52 and 90 of the Australian Constitution and the Constitution of the United States of America art I, ss 8 and 10).
[119] For example, during the course of argument, McHugh J stated that ‘the Commonwealth executive power is not so extreme that it can be used to interfere with the traditional understanding of the distribution of Commonwealth and State functions and powers’: Transcript of Proceedings, R v Hughes (High Court of Australia, Gleeson CJ, Gaudron, McHugh, Gummow, Kirby, Hayne and Callinan JJ, commencing 1 March 2000) 86. A similar concern emerges in Wakim, when McHugh J refers to the possibility (if the cross-vesting legislation were valid) of federal courts being used as ‘curial vessels into which could be poured unlimited jurisdiction’: [1999] VSC 227; (1999) 163 ALR 270, 290.
[120] As stated above, the joint judgment refers in terms to there being a duty imposed on the Commonwealth DPP, but the duty appears to arise simply out of the exclusivity of the conferral: see above nn 38–39 and accompanying text. If the joint judgment is indeed motivated by federalism concerns, then the important feature is not whether there is a duty to perform a function, but whether the function is conferred exclusively. This difference in approach would be highly significant if, for example, the Commonwealth authorisation expressly provided that the Commonwealth officer was not under any duty to perform a State function conferred on the officer exclusively or, conversely, if the Commonwealth authorisation expressly imposed a duty on the Commonwealth officer to perform a function that was not conferred exclusively.
[121] The theme of political accountability emerges in Bond: ‘Does the political responsibility for that decision [to appeal against sentence] (which is a decision that can be attended by public controversy) lie with a Commonwealth or State Minister?’: [2000] HCA 13; (2000) 169 ALR 607, 610. See also 613.
[122] Nicholas Aroney, ‘The Constitutional Demise of the Cross-Vesting Scheme’ (1999) 7 Insolvency Law Journal 116, 130.
[123] Wakim [1999] VSC 227; (1999) 163 ALR 270, 289, citing Re Foreman & Sons Pty Ltd; Uther v Federal Commissioner of Taxation [1947] HCA 45; (1947) 74 CLR 508, 529 (Dixon J); see also Wakim [1999] VSC 227; (1999) 163 ALR 270, 303–4 (Gummow and Hayne JJ).
[124] Wakim [1999] VSC 227; (1999) 163 ALR 270, 325.
[125] These terms (and also ‘organic’ federalism) are used by Professor Sawer, above n 71, ch 8.
‘Co-ordinate’ federalism occurs where a level of formal equality exists between the units, and there is an absence of formal subordination among the units. This notion is ‘easier to apply to the relation of Regions with each other, than it is to the relations of a Region with the Centre’: at 117. ‘Organic’ federalism is where the central government ‘has such extensive powers, and gives such a strong lead to Regions in the most important areas of their individual as well as their co-operative activities, that the political taxonomist may hesitate to describe the result as federal at all’: at 125. Sawer argued that co-operative federalism depends on a basically co-ordinate position, because unless ‘co-operating’ governments have some bargaining capacity, ‘“co-operation” becomes a euphemism for domination by one party or another’: at 123.
[126] McHugh J stated in Re Residential Tenancies Tribunal (NSW) that: ‘[I]t is a necessary implication of the document that creates the federation that no polity in the federation can legislate for another’: (1997) 190 CLR 410, 451. Cf Kirby J, who stated that: ‘The Commonwealth and the States are intended by the Constitution to operate together, and in relation to each other, within the one federal polity, each making laws within the scope of their respective powers’: at 504.
One might expect the same divergence of views to arise when the Court considers whether, as a matter of statutory construction, legislation enacted by one polity applies to another polity within the federation. Recently, however, the Court unanimously agreed that the Mining Act 1978 (WA) did not, as a matter of statutory construction, apply to land held by the Commonwealth: Commonwealth v Western Australia (1999) 196 CLR 392.
[127] Cf Brennan, Dawson, Toohey and McHugh JJ in McKain v R W Miller & Co (SA) Pty Ltd [1991] HCA 56; (1991) 174 CLR 1, 36:
The laws of the States, though recognized throughout Australia, are therefore capable of creating disparities in the legal consequences attached in the respective States to the same set of facts ... That may or may not be thought to be desirable, but it is the hallmark of a federation as distinct from a union ...
and Kirby P in Thompson v Hill: ‘Australian courts persist with the fiction, increasingly odd and even sometimes offensive on its face, that, as Windeyer J said in Pedersen v Young [1964] HCA 28; (1964) 110 CLR 162, 170, the Australian States are “separate countries in private international law”’: (1995) 38 NSWLR 714, 717. There is a continuing debate about the effect of the Constitution on choice of law rules: see most recently Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ in John Pfeiffer Pty Limited v Rogerson: ‘the terms of s 118 indicate that, as between themselves, the States are not foreign powers as are nation states for the purposes of international law’: [2000] HCA 36; (2000) 172 ALR 625, 643, see also at 636–7 and 644 of the judgment. See also Lipohar v The Queen [1999] HCA 65; (1999) 168 ALR 8, 35 (Gaudron, Gummow and Hayne JJ).
[128] But this is not necessarily the case — here, Kirby J took (if anything) a narrower view than the joint judgment on which powers could be conferred on Commonwealth officers and authorities. This, however, was not because Kirby J considered that co-operative schemes were contrary to the federal structure. Rather, it was because he considered that the need for the Commonwealth authorisation to be supported by a Commonwealth head of power (which is undeniable) meant that it was necessary to relate the State function sought to be authorised to a head of power: see above n 42. This conclusion does not necessarily follow: see above nn 27 and 29 and accompanying text.
[129] Indeed, practical or political considerations are said to provide a sufficient limitation on the exercise of s 51(xxix) to implement treaties: Michael Coper, ‘The Role of the Courts in the Preservation of Federalism’ (1989) 63 Australian Law Journal 463, 466. Co-operative legislative schemes are even less likely to undermine the federal balance because, unlike treaties, they involve the participation and agreement of the members of the federation.
[130] This is cited as one of the benefits of the national corporations scheme: see above n 71 and accompanying text.
[131] See, eg, the different views expressed on the merits of ‘co-operative’ federalism in Brian Galligan, ‘What Is the Future of the Federation’ (1996) 55(3) Australian Journal of Public Administration 74, 77–9, and Martin Painter, ‘Public Sector Reform, Intergovernmental Relations and the Future of Australian Federalism’ (1998) 57(3) Australian Journal of Public Administration 52, 52–3. There is even a question whether there is an inherent conflict between federalism and the inherited British traditions of parliamentary supremacy and responsible government: see, eg, C H Sampford, ‘Responsible Government and the Logic of Federalism: An Australian Paradox?’ [1990] Public Law 90; David Meale, ‘The History of the Federal Idea in Australian Constitutional Jurisprudence: A Reappraisal’ (1992) 8 Australian Journal of Law and Society 25.
[132] See, eg, the sharp division of opinion within the United States Supreme Court in Alden v Maine, [1999] USSC 62; 527 US 706 (1999) and Kimel v Florida Board of Regents, 120 S Ct 613 (2000) as to whether Congress has the power to subject a State to suits (in a State court) by private individuals for breach of a federal statute. In Kimel Stevens J (with whom Souter, Ginsburg and Breyer JJ joined) stated: ‘The kind of judicial activism manifested in [cases relied upon in the opinion of the Court, given by O’Connor J] represents such a radical departure from the proper role of this Court that it should be opposed whenever the opportunity arises’.
[133] Professor Sawer observed that ‘[f]ederalism is not and was not in 1900 a precise set of principles, either political or legal’: Sawer, above n 26, 121. Professor Saunders argues that ‘co-operation can be described as an objective of the Australian Constitution only in a superficial sense’, and to this extent supports the view of co-operation taken by the majority in Wakim: Cheryl Saunders, ‘Administrative Law and Relations between Governments: Australia and Europe Compared’ (2000) 28 Federal Law Review 263, 266. As against this, the ‘co-ordinate’ conception of federation formed the basis of the ‘implied immunities of instrumentalities’ doctrine, which was overruled in Amalgamated Society of Engineers v Adelaide Steamship Co Ltd [1920] HCA 54; (1920) 28 CLR 129 (‘Engineers’ Case’). Moreover, it has been argued that the theory of ‘co-ordinate’ federalism, originally developed by Marshall CJ of the United States Supreme Court, ‘had no basis in constitutional text, nor in historic theories of federalism’: see Lawrence Claus, ‘Federalism and the Judges: How the Americans Made Us What We Are’ (2000) 74 Australian Law Journal 107, 111.
[134] Eg, Dr Whincop argues that, subject to protecting the constitutional rights of citizens, the Commonwealth and States should be free to agree to reallocate areas of responsibility (what he terms ‘inter-polity constitutional trade’): see Michael Whincop, ‘Trading Places: Thoughts on Federal and State Jurisdiction in Corporate Law after Re Wakim’ (1999) 17 Company and Securities Law Journal 489.
[135] See Kirby J in Wakim, who states that cross-vesting achieves ‘precisely the co-operation for the removal of inconvenient impediments to good government which the Australian Constitution fosters rather than forbids’: [1999] VSC 227; (1999) 163 ALR 270, 332–3.
[136] New York v United States, [1992] USSC 92; 505 US 144, 181 (1992). In Australia, by contrast, the ‘fundamental principle’ of federation has been described as ‘the allocation of the powers of government’: R v Kirby; Ex parte Boilermakers’ Society of Australia [1956] HCA 10; (1956) 94 CLR 254, 276 (Dixon CJ, McTiernan, Fullagar, and Kitto JJ) (‘Boilermakers’ Case’). This difference has been explained on the basis that, apart from the limitations on parliamentary sovereignty inherent in federation, ‘there was [otherwise] no antipathy amongst the colonists to the notion of sovereignty of Parliament in the scheme of government’: A-G (Cth) ex rel McKinlay v Commonwealth [1975] HCA 6; (1975) 134 CLR 1, 24 (Barwick CJ). This is not to deny that, in some situations, a decision on the reach of Commonwealth legislative power can have the effect of promoting individual liberty: see, eg, Australian Communist Party v Commonwealth [1951] HCA 5; (1951) 83 CLR 1.
[137] See Aroney, above n 122, 131. Even those who argue that Wakim can be justified by reference to federal values accept that ‘[i]f there is a legitimate criticism to be made of the High Court, it is that these ... values are not articulated with sufficient clarity either in Re Wakim or in the earlier case of Gould v Brown’: Brian Opeskin, ‘Commentary: A Valediction Forbidding Mourning’ in Adrienne Stone and George Williams (eds), The High Court at the Crossroads (2000) 216, 218.
[*] BA, LLB (Hons) (ANU); Constitutional Litigation, Australian Government Solicitor. The views expressed in this comment are those of the author.
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