University of Western Sydney Law Review
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Ricky J. Lee[*]
Since the federation of the former Australian colonies in 1901, the ability of the Commonwealth to bind the States and that of the States to bind the Commonwealth has been an issue of particular controversy. In particular, the question of whether State laws can apply to Commonwealth activities and Commonwealth land has remained somewhat uncertain throughout the history of the High Court’s jurisprudence. Although the extent of the States’ general legislative power has expanded in recent years in its application to the Commonwealth, the precise scope of such powers remains unclear.
Essentially the matter can be broken down into three practical issues. First, the extent of the application of the doctrine of implied intergovernmental immunity needs to be identified as, in its broadest approach, this would prevent the States and the Commonwealth from being bound by the other’s laws. Second, as most State laws do not bind the Crown, it is important to identify the coverage of the Crown in right of the Commonwealth and the extent of its exclusion from State law. Third, the extent to which s 109 of the Constitution may be relied on to remove any inconsistency between Commonwealth and State laws needs to be studied. In practice, all three of these issues would have to be considered in determining whether the State law applies to bind the Commonwealth in its activities or in relation to Commonwealth land.
It was intended by the founding fathers that the Australian system would be a dual system of government. This is particularly reflected in the dominant view expressed by Sir Samuel Griffith that the federal system was an agreement entered into between the States which gave the Commonwealth certain powers under the Constitution that are not to be interfered with. This is reflected in the judgment in D’Emden v Pedder, in which the High Court first espoused the doctrine of intergovernmental immunity.[1]
In that case, the question that arose was whether the Deputy Postmaster-General of Tasmania, a Commonwealth employee appointed under the Post and Telegraph Act 1901 (Cth), was required to pay stamp duty on the receipt he gave for his salary. The receipt was required under the Audit Act 1901 (Cth) and the stamp duty on which was imposed under the Stamp Duties Act 1882 (Tas). Griffith CJ, in his Honour’s judgment, stated the principle that:
Where a State is attempting to exercise its legislative authority in an operation which would fetter or interfere with free exercise of the legislative power of the Commonwealth, then the attempt, unless authorised by the Constitution, is invalid and inoperative.[2]
This was further extended by the maxim quando lex aliquid concedit, concedere videtur et illud sine quo res ipsa valere non potest, which in essence meant that this immunity of the Commonwealth would extend to any power and control that it asserted incidental to the power provided to it under the Constitution.[3] In its widest application, therefore, the States could not legislate to bind the Commonwealth or its civil servants, and nor could it legislate in relation to any validly acquired Commonwealth land.
Two years later, in Federated Amalgamated Government Railway and Tramway Service Association v New South Wales Railway Trafic Employees Association, this principle was held to be reciprocal.[4] In other words, the Commonwealth could not apply its legislation to interfere with what would have been essentially a State matter within the governmental functions of the State. In this case, the Conciliation and Arbitration Act 1904 (Cth) of the Commonwealth could not apply to regulate the rights of employers and employees of railways of the State of New South Wales as this would interfere with the control and operation of the railways.[5] The doctrine, in this way, continued to operate during the early years of federation.
In 1920, in Amalgamated Society of Engineers v Adelaide Steamship Co Ltd, the Court rejected the doctrine and held that the Commonwealth had the legislative power to bind the States provided the law related to a power expressly provided for under the Constitution.[6] In this case the Court held that s 51 (xxxv) of the Constitution allows the Commonwealth to make laws binding the States in relation to conciliation and arbitration of industrial disputes.
The doctrine was partially revived in the 1930s with the effect of preventing the Commonwealth from enacting legislation that discriminated against the States as governing entities or threatened their continued existence. These two limbs of the intergovernmental immunities doctrine were first espoused in Melbourne Corporation v Commonwealth.[7] In that case, Rich, Starke and Dixon JJ held that a law which discriminates against the States or a law which places a particular disability or burden upon an operation or activity of the States would be invalid.[8] Dixon J also made the distinction between Commonwealth laws of general application and laws that specifically applied to the States and held that the latter is an indicium of a law that discriminated against the States.[9]
In relation to the first limb of the doctrine, which prohibited discrimination against States, the Court has held that this is where the Commonwealth law imposed a special burden on the States by virtue of them being States.[10] Several High Court cases since Melbourne Corporation have entrenched this principle into the accepted practice of Australian constitutional law.[11] In Western Australia v Commonwealth (the Native Title Act Case),[12] the Court held that the test is whether a Commonwealth law actually singles out a State or the States together for discriminatory treatment.[13] In that particular case, the Court held that the differential effect on Western Australia of the application of the Native Title Act 1993 (Cth) was purely the result of historical and geographical factors and, as the law did not set out to discriminate against Western Australia or the States, the Commonwealth law was valid.[14] In any case, the Court was of the opinion that the race power under s 51 (xvi) by its nature allowed the Commonwealth to enact laws on the topic excluding all other applicable State laws.[15]
Although mentioned as obiter by the Court in Melbourne Corporation, no cases have successfully applied the second limb, which prevents the Commonwealth from threatening the continued existence of a State. In Re Australian Education Union; Ex parte Victoria,[16] the Court held that this limitation was directed at laws that interfered with the capacity of a State to function as a government rather than those which impaired government functions.[17] In this case, even though the adoption of a federal award by State government employees would restrict the freedom of the State to determine the employment conditions of its employees, it did not affect the State’s continued existence.[18] It appears to the author that only where the Commonwealth legislated to deprive a particular State of its ability to legislate or govern itself, or to render it penniless or defenceless would the State's continued existence be threatened by the legislation.
The question of whether States could bind the Commonwealth was answered in Engineers, in which the majority of the Court held that, just as Commonwealth laws of general application can bind the States, the rule also applied vice versa.[19] This was followed in Pirrie v McFarlane,[20] in which the Court held that a member of the Air Force was required to hold a Victorian driver’s licence when carrying out Commonwealth duties within that State that involved the operation of a motor vehicle. This meant that Commonwealth officers, employees and agents were required to comply with State laws of general application even when undertaking Commonwealth Government business. The same principle extended to the power of States to legislate an abrogation of a general common law rule that generally affected Commonwealth officers or entities within the relevant State.[21]
However, in Commonwealth v Cigamatic Pty Ltd (in liq),[22] the Court held that the States cannot bind the Commonwealth with laws that define or regulate Commonwealth rights or duties towards its subjects or which regulate or control its governmental rights.[23] Consequently, the Companies Act 1936-1960 (NSW) could not change the prerogative right of the Commonwealth to have priority over its subjects in recovering as a creditor of the company.
The case of Re Residential Tenancies Tribunal of New South Wales and Henderson; Ex parte Defence Housing Authority is the most recent High Court authority on the subject of intergovernmental immunity.[24] In that case, the Defence Housing Authority leased residences in New South Wales to accommodate defence personnel and their families. The owners sought permission from the Residential Tenancies Tribunal to inspect the premises as provided for under the Residential Tenancies Act 1987 (NSW). The Authority argued that the Act was invalid insofar as it purported to bind the Authority because of the implied intergovernmental immunity of the Commonwealth and its instrumentalities from the application of State laws.[25]
In determining whether the State law affected the capacities of the Commonwealth executive, Brennan CJ, Dawson, Toohey and Gaudron JJ made the distinction between the capacities of the Commonwealth and the exercise of those capacities.[26] In their Honours’ view, the States have no power to affect the capacities of the Commonwealth executive but State laws of general application may regulate the activities or transactions that the Commonwealth undertakes in the exercise of such capacities.[27] In support of this, Dawson, Toohey and Gaudron JJ referred to the judgment of Dixon J in In re Richard Foreman & Sons Pty. Ltd; Ut her v Federal Commissioner of Taxation and Cigamatic.[28] Since the Residential Tenancies Act was a law of general application that only affected the activities of the Commonwealth in exercise of its executive capacities rather than the nature or content of the capacities themselves, the Court held by majority that the leasing of residential premises by the Authority, being an exercise of the Commonwealth’s governing capacities, was subject to the Act.
McHugh and Gummow JJ, in separate judgments, both rejected the distinction made by the majority between the executive capacities of the Commonwealth and the activities undertaken in the exercise of such capacities. McHugh J took the broad approach from Cigamatic that the States have no power to alter the legal relationships existing between the Commonwealth and its subjects.[29] It follows from this that, once the Commonwealth has created legal rights and duties in accordance with the appropriate State law, the State has no power to change the consequences of such a relationship, even if the law is of general application.[30]
McHugh J then drew a distinction between executive powers of the Commonwealth arising from the Constitution and those arising from statute. His Honour held that the where the executive power arises by statute, the State law would apply subject to any inconsistency covered by s 109 of the Constitution.[31] Gummow J also made the same distinction in his judgment,[32] though his Honour sought also to confine the immunity of the Commonwealth to State laws 'which would detract from or adversely affect the very governmental rights of the Commonwealth'.[33]
Kirby J, who dissented in this case, limited the immunity of the Commonwealth to the inability of States to pass laws specifically subjecting the Commonwealth to discriminatory treatment or impairing the integrity or autonomy of the Commonwealth Government.[34] In other words, the content of the Commonwealth immunity is in reciprocal terms to the immunity of the States from the Commonwealth as stated in Melbourne Corporation.
From Henderson, one can extract four requirements that must be satisfied before a State law can apply to Commonwealth activities. First, the determination as to whether the statutory authority, department or officer of the Commonwealth can validly invoke the privileges and immunities of the Commonwealth must be made.[35] Second, the State law in question must be one of general application that regulates activities or transactions that the Commonwealth may engage in through the exercise of its capacities, rather than the relationships between the Commonwealth and its subjects or the nature or content of its governmental capacities. Third, the State law must be capable of being extended to the Commonwealth as a matter of construction. Fourth, the State law must not be inconsistent with a valid Commonwealth law, an issue that is considered below. Only where these four requirements are met would a State law be able to apply to an activity undertaken by the Commonwealth.
As the laws of most States expressly exclude the Crown from their application, an issue that often arises when dealing with intergovernmental immunity is the extent to which the immunity of the Crown extends to Commonwealth instrumentalities, agencies, departments and statutory corporations. The most notable case on this issue is the case of Bradken Consolidated Ltd v Broken Hill Proprietary Co Ltd, which considered the reverse scenario of a Commonwealth law applying to the Crown in right of the State.[36]
In Bradken, the applicants argued that contracts or arrangements entered into between the Queensland Commissioner for Railways and various contractors were in breach of the Trade Practices Act 1974 (Cth). The Court held that the Commissioner was an instrumentality, agent or authority of the Crown and therefore the Trade Practices Act did not apply to the Commissioner. The factors that the Court took into account were the fact that the Railways Act 1914-1976 (Qld) incorporated the Commissioner as a corporation sole 'representing the Crown' with 'all the powers, privileges, rights and remedies of the Crown';[37] the extensive ministerial supervision that the Commissioner was subjected to;[38] and the fact that income and moneys payable to the Commissioner were payable into Consolidated Revenue.[39] As a result, the Commonwealth law had no application to the State Commissioner.
This issue has been examined again by various Australian courts, including the High Court, on many occasions, especially in relation to the application of State law to the Crown in right of the Commonwealth. In the case of Ventana Pty Ltd v Federal Airports Corporation, the Federal Court held that the Federal Airports Corporation was intended to be equated with the Crown in right of the Commonwealth.[40] Ryan J held this because of the extensive actual and potential ministerial control over the Corporation and that the functions and powers of the Corporation were traditionally within the province of the central government.[41]
Similarly, in Woodlands v Permanent Trustee Co Ltd, the Federal Court held that Crown immunity extends to an agent of the Crown but would not extend to acts of that agent that were the result of the agent’s independent initiative in the absence of significant prejudice to the Crown.[42] The question to be asked, therefore, is whether the actions can be described as an implementation of a Crown project in accordance with express or implied Crown instructions.[43] This has particular relevance in the extension of Crown immunity to agents and contractors acting on behalf of, or in partnership with, the Commonwealth.
In essence, the current position of the law on this issue is that, for the Crown immunity to extend to the institution or person, several factors must be satisfied:
| 1) | the statute that created the institution must be able to display an intention that the rights and immunities of the Crown would extend to the institution; |
| 2) | there must be some form of actual or potential ministerial control over the activities of the institution; |
| 3) | the functions carried out must traditionally be those of the government that created the institution; and |
| 4) | the activities for which the immunity is sought must be carried out in accordance with the express or implied instructions of the Crown. |
It should be noted that it is not an issue to consider whether the exclusion afforded to the Crown in a State law is capable of protecting the Crown in right of the Commonwealth. This is because a State law that excludes its application to the Crown must impliedly exclude the Crown in all its capacities. If the State had enacted a law that excluded its application to the Crown in right of the State but not in right of the Commonwealth, it would be invalid by reason of it being discriminatory against the Commonwealth.[44] As a result, provided that a Commonwealth entity can be regarded as being within the scope of the Crown, it would enjoy the same exclusions afforded to the Crown in right of the state in the context of any State law.
The issue of inconsistency often arises through the purported application of s 109 of the Constitution, which provides for the Commonwealth law to prevail over any inconsistent State law. In the first twenty years of federation, the High Court took a very narrow approach to inconsistency by applying the 'obey both laws' test. This test provided that two laws are inconsistent where it is impossible to simultaneously obey both laws, in which case the Commonwealth law would prevail over the State law.
The first case on this point was Australian Boot Trade Employees Federation v Whybrow & Co.[45] In that case, the Commonwealth law fixed the minimum wage at 1s 1½p per hour while the State minimum wage was fixed at 1s per hour. The High Court held that employers could obey both laws by paying employees at 1s 1½p and that there was therefore no inconsistency between the two laws.
After 1920, when the Engineers case broadened the interpretation of Commonwealth powers, the possibility of inconsistencies between Commonwealth and State laws correspondingly increased. In Clyde Engineering Co Ltd v Cowburn,[46] the relevant Commonwealth law provided for longer working weeks than the State law. Knox CJ and Gavan Duffy J expanded the definition of inconsistency to include situations where one law takes away a right or privilege conferred by the other, even though it may well be possible to obey both laws.[47] In other words, where simultaneous obedience to State and Commonwealth laws is impossible or where one law takes away a right or privilege conferred by the other, a direct inconsistency arises between the two laws. In this case, therefore, as the Commonwealth Act removed a right or privilege conferred by the State law, s 109 operated to invalidate the provision in the State legislation.
Through the passage of time, the High Court made a distinction between two categories of inconsistency: direct or operational inconsistency and indirect inconsistency. The latter occurs where the State law would 'alter, impair or detract from' the operation of the Commonwealth law.[48]
It is clear from R v Winneke; Ex parte Gallagher that s 109 will operate at the time a power is exercised for which there is an inconsistent State law.[49] Consequently, no inconsistency will arise until that power is actually exercised. In other words, as the 'extent of the inconsistency' has a 'temporal as well as a substantive connotation', s 109 cannot operate until the Commonwealth executive has taken the action which the law authorises.[50] For a direct inconsistency to arise, therefore, the Commonwealth must have taken an action pursuant to a Commonwealth law where a State law would interfere with such an action.
In Clyde Engineering, Isaacs J developed the broader 'covering the field' test. In his Honour’s view, where the Commonwealth expressly or impliedly revealed an intention to 'cover the field' and a State law attempted to enter that field then there would be an indirect inconsistency.[51] As an analogy, where a domestic matter enters the sphere of international concerns, then it becomes appropriate that international law would operate to govern the matter.[52]
In Ex parte McLean,[53] the Court identified three stages to the 'cover the field' test. First, one needs to ascertain what field or subject matter does the Commonwealth law deals with or regulates. Second, one needs to determine whether there is a Commonwealth intention to cover the field, meaning an intention to regulate the subject matter completely and exhaustively. Third, one needs to assess the State law and determine whether it attempts to regulate some part of the subject matter.
The fundamental question is often the second one: ascertaining whether the Commonwealth intended to cover the field exhaustively and exclusively. In the Native Title Act Case, the Court held that the Native Title Act set out an exhaustive and complete régime for native title in Australia and therefore was intended to exclusively cover the field. The majority in that case held that this intention might be deduced from the terms or the operation of the law either expressly or by implication. The Commonwealth may also express an intention not to cover the field, but that would not eliminate the operation of s 109 in the case of a direct inconsistency between the laws.[54]
This latter proviso was illustrated in University of Wollongong v Metwally,[55] in which the Court held that an amendment to the Racial Discrimination Act 1975 (Cth), which stated that the Act was not intended to exclude the operation of State law, was invalid. This was because the Commonwealth cannot change the operation of s 109. The amendment was made because the Court held, in the prior case of Viskalskus v Nyland,[56] that the Commonwealth Racial Discrimination Act was inconsistent with the Anti-Discrimination Act 1977 (NSW). Notwithstanding the Commonwealth law being amended to express an intention of non-exclusivity, there would still be an inconsistency subject to the operation of s 109 as the Commonwealth cannot legislate out of the operation of s 109.
In Henderson, the majority held that although the Defence Housing Authority Act 1987 (Cth) provided a comprehensive and exclusive code concerning the functions of the Authority, it did not provide an exhaustive and exclusive code concerning how these functions were to be performed.[57] Dawson, Toohey and Gaudron JJ pointed out that there were no provisions on the creation and enforcement of the rights and duties relating to the purchase of land, the leasing of properties, inspection of property or the eviction of tenants. The Act was clearly intended to operate within the framework provided by common law and State law. In essence, unless the Commonwealth law showed a clear intention to oust the State law, the majority would not be inclined to find an inconsistency between the laws.
McHugh and Gummow JJ took the view that the intergovernmental immunity doctrine arose from s 109 of the Constitution rather than as an implied immunity from the Cigamatic principle.[58] Kirby J went further by stating that because the Commonwealth has power to override any provision of an inconsistent State law in an area in which the Commonwealth has power under the Constitution, there is no need to imply an immunity where none is actually expressed.[59]
In the view of Crommelin and Gladman, the approach of McHugh, Gummow and Kirby JJ to s 109 and the intergovernmental immunity doctrine may be more consistent with contemporary views on the Australian federation.[60] The approach of their Honours in limiting the immunity of the Commonwealth from State laws would allow the States more scope to operate as viable political entities. With the varying composition of the High Court, there is no certainty as to the approach that the majority of the Court will take in future cases.
Similar issues arise with respect to the application of State laws to Commonwealth land, the first of which was the extent to which s 52(i) provides exclusive legislative power to the Commonwealth with respect to land acquired by it for public purposes. In Worthing v Rowell and Muston Pty Ltd,[61] the majority of the Court held that once the Commonwealth had acquired land for public purposes, s 52(i) of the Constitution excluded the power of States to legislate in relation to this land, even if the law is one of general application.[62] Consequently a State law enacted after acquisition was found not to apply to the land which the Commonwealth acquired as an air force base. The minority in that case, comprising McTiernan, Kitto and Owen JJ, took the view that the State law in question must have a 'direct and substantial connexion' with the land for it to be invalidated by the exclusive power of the Commonwealth.[63]
The question then arose as to whether a State law enacted before acquisition by the Commonwealth would continue to apply to the land. In R v Phillips,[64] the majority of the Court held that State laws ceased to apply once the Commonwealth acquired exclusive legislative power over the land.[65] Mason CJ, Dawson and McHugh JJ questioned this conclusion in the later case of Capital Duplicators Pty Ltd v Australian Capital Territory.[66]
The third relevant case in 1970 was Attorney-General (NSW) v Stocks and Holdings (Constructors) Pty Ltd,[67] in which land that was formerly held by the Commonwealth was relinquished. During the time when the Commonwealth held the land, a planning scheme affecting the area was made under a State law. The Court, by majority,[68] held that although such a scheme was prospective, it was nonetheless an exercise of State legislative power with respect to a Commonwealth place and therefore invalid.
In Svikart v Stewart,[69] the majority of the Court[70] held that s 52(i) of the Constitution does not apply in relation to places acquired by the Commonwealth in the Northern Territory. In their Honours’ view, when the discussions of s 52(i) at the Constitutional Convention and s 122 are considered as well, s 52(i) should indeed be confined to land acquired from States.[71] This is presumably because the Commonwealth would in any event have the power to override laws of the Territories applying to Commonwealth land under s 122 of the Constitution.
In Allders International Pty Ltd v Commissioner of State Revenue (Vic),[72] the question was whether the Stamps Act 1958 (Vic) applied to impose stamp duties in relation to a lease by the Commonwealth to the appellant company of duty-free shop premises at Tullamarine Airport, situated on Commonwealth land. At first instance, Harper J held that stamp duties were payable as the law had a direct and substantial connection to the instrument of lease rather than the land.[73] In effect, Harper J followed the minority approach in Worthing.
On appeal to the High Court, the majority[74] held that the Stamps Act was not applicable to a lease of Commonwealth land. The majority held that as the duty imposed a burden on the leasing of the premises and affected the value of the leasehold property, there was sufficient connection with the acquired place.[75] In effect, the Court was of the opinion that once property was acquired for public purposes, as long as it was owned or possessed by the Commonwealth, it was subject to the exclusive and plenary legislative power provided for by s 52(i). The fact that the Commonwealth had granted the land to the Federal Airports Corporation and leased it to a private individual for a private purpose did not change the ownership of the land by the Commonwealth.[76]
Recently, in Chief Commissioner of Stamp Duties v Paliflex Pty Ltd,[77] Austin J of the Supreme Court of New South Wales held that stamp duty is not payable on the contract of sale of Commonwealth land to a private company. In other words, the Stamp Duties Act 1920 (NSW) was held to have no application to the land as it intruded upon the exclusive legislative power of the Commonwealth with respect to the property when it was still a Commonwealth place. This is because the Commonwealth retained legal title and possession of the land until the transfer to the purchaser was registered, and consequently State law could not apply to impose stamp duty on the contract of sale of Commonwealth land.
Other issues to be considered when determining the applicability of State laws to Commonwealth land were discussed in Commonwealth v Western Australia (the Mining Act Case).[78] In this case, the land involved was a defence practice area located in Western Australia. The area comprised three portions: the first comprised two parcels of land (the 'freehold land') of which the Commonwealth was the registered owner in fee simple. The second was a parcel of land that the Commonwealth leased from Western Australian under a Special Lease (the 'leasehold land') and the third was an area of unalienated Crown land owned by Western Australia (the 'perimeter area'). The fact that this case involved different types of land ownership helps to conveniently analyse the issues involved in this subject.
The freehold land and the leasehold land contained reservations with respect to minerals. The Mining Act 1978 (WA) identified 'land open for mining' on 'Crown Land', 'Public Reserves, etc' and 'Private Land'. For the purposes of this Act, any land alienated from the Crown in freehold and land subject to Crown leases were regarded as private land.[79] The Commonwealth Places (Application of Laws) Act 1970 (Cth) provided that the laws of a State apply according to their tenor in relation to Commonwealth places in that State.[80]
The Commonwealth laws with respect to the area include the Defence Regulations, where a chief of staff may authorise the carrying out of a defence operation in a defence practice area, and prohibit any person from entering upon the land without permission.[81] The Lands Acquisitions Act 1989 (Cth) permitted the making of regulations prohibiting or regulating the exploration for minerals and mining on Commonwealth land.[82] Further, the Lands Acquisitions Act 1955 (Cth) provides that the Governor-General may authorise mining leases, licences or easements over Commonwealth land under the Act.[83] The issues that arose in this case were whether the Mining Act applied to the land and whether there was any inconsistency between the State law and the Defence Regulations or the Lands Acquisitions Acts.
There are two reasons why the discussion above relating to s 52(i) does not apply to this case. First, both the freehold land and the lease to the Commonwealth contained mineral reservations to Western Australia and therefore this case can be characterised as one concerning the inconsistency between State and Commonwealth laws in dealing with the use of land and the reserved minerals. Second, a more important distinction is that Allders and its related cases were concerned with the application of stamp duty and taxation laws to Commonwealth land. Such laws are expressly excluded from the operation of the Commonwealth Places (Application of Laws) Act.[84] Consequently, other State laws of general application would apply to Commonwealth land by operation of this Act.
Consequently, with consideration given to the issues of intergovernmental immunity and inconsistency of laws, the Court in the Mining Act Case unanimously held that the Mining Act 1978 (WA) did not apply to the freehold land and the leasehold land of the Commonwealth in the defence practice area. The Court, however, adopted several different approaches in coming to this conclusion.
Gleeson CJ and Gaudron J, in their joint judgment, found that as the Mining Act exempted land owned or held by the State from being dealt with in the same way as private land under the Act. Their Honours refused to assume that the State would subject land owned or held by the Commonwealth to a régime that it considered inappropriate for land that it owned or held.[85] Their Honours consequently regarded the freehold land and the leasehold land as being excluded from the definition of Crown land and private land under the Act, just as they would be if the land was owned or held by the State for a public purpose.
Although Gleeson CJ and Gaudron J appear to have based their view on this issue as a matter of statutory interpretation, Gummow J took the same view but on the basis that the State cannot discriminate against the Commonwealth. In his Honour’s view, with which Kirby J agreed, a State cannot legislate to discriminate against the Commonwealth by placing it under a special burden or disability.
Therefore the Mining Act cannot apply to Commonwealth land in a way that it would not have applied to State land similarly held.[86]
Hayne J, with whom which McHugh and Callinan JJ agreed, took the same statutory interpretation approach as Gleeson CJ and Gaudron J.[87] His Honour went on to reject the view that treating Commonwealth land as private land would amount to discrimination against the Commonwealth.[88] This was also the view taken by Gummow J. The general view of the Court may be encapsulated by the following statement contained in the joint judgment of Gleeson CJ and Gaudron J:
[I]f it has been recognised by the [State] legislature that it would be inappropriate for legislation to apply to government property or personnel in the same way as it applies to individuals, it may be inferred from its silence with respect to other polities in the federation that it was not intended that it should apply to their property or personnel. This is because, if the legislature has recognised that a statute will or may have a different impact on government property or personnel, it ought not be assumed that it intended to subject the property or personnel of the other polities in the federation to a regime which it recognised was inappropriate in its own case.[89]
It is clear from this that, in the absence of any application of the Commonwealth Places (Application of Laws) Act and s 52 of the Constitution, a State law would apply to Commonwealth land provided that it did not infringe other constitutional law principles, such as the doctrine of intergovernmental immunities and any inconsistencies relevant to the operation of s 109 of the Constitution.
As s 52 of the Constitution vests the exclusive legislative power in relation to Commonwealth land acquired from States in the
Commonwealth Parliament, it is open to the Commonwealth to legislate to allow for the application of State laws. Consequently, s 4(1) of the Commonwealth Places (Application of Laws) Act, enacted as a legislative response to Worthing, provides that
The provisions of the laws of a State as in force at a time (whether before or after the commencement of this Act) apply, or shall be deemed to have applied, in accordance with their tenor, at that time in and in relation to each place in that State that is or was a Commonwealth place at the time.
In the Mining Act Case, the Court unanimously held that the Act would not affect their conclusion that the Mining Act did not apply. Gleeson CJ and Gaudron J pointed out the Mining Act does not apply to land acquired or held by the Commonwealth for public purposes. Since s 4(1) applies State laws 'in accordance with their tenor' rather than to rewrite them to apply to Commonwealth land, the section would not operate to apply the Mining Act to land that it has no application to in any event.[90] As Gummow J pointed out, this is reinforced by s 4(2) (b) of the Act, which ensures that the Act does not operate to rewrite State laws.[91]
The conclusion that may be safely drawn from this is that the operation of the Commonwealth Places (Application of Laws) Act is subject to the intention of the State legislation to bind the Commonwealth. If, by construction, the State law is intended to be capable of binding the Commonwealth and if there is no distinction made between private land and land owned or held by the State, then the Act would operate to apply that law to Commonwealth land.
The final issue in the Mining Act Case was whether there was an inconsistency between the Mining Act and the Lands Acquisitions Act or the Defence Regulations. If there was an inconsistency between the laws, then s 109 of the Constitution would operate to exclude the operation of the State law from the freehold land and the leasehold land as well as the perimeter area which was owned by the State and used by the Commonwealth as a defence practice area.
The majority of the Court, comprising Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ, took the view that there was no inconsistency between the Mining Act and the Defence Regulations. Their Honours held that no inconsistency had yet arisen but would arise if authority were granted under the Mining Act to enter the area at a time when a defence operation was being conducted.[92] This is because s 109 renders a State law inoperative only to the extent of its inconsistency with a law of the Commonwealth and only for so long as the inconsistency remains.[93] Similarly, no inconsistency will arise between the Mining Act 1978 (WA) and the Lands Acquisitions Acts until regulations are made under the 1989 Act, or declarations are made by the Governor-General under the 1955 Act, which negate the reservations of minerals in the land.[94] In other words, no inconsistency would exist until the authority granted by the latter two Acts is exercised to generate an inconsistency between the laws.
Kirby J, in his dissenting judgment with which Callinan J agreed on this issue, took a broader approach by stating that the inconsistency in question was between the two laws and not the activities to be performed under the two laws.[95] In other words, the comparison to be made is between the laws themselves, particularly where a State law 'would vary, detract from or impair the operation of a law of the Commonwealth'.[96] As an example, the Court in Australian Mutual Provident Society v Goulden held that a provision in a State law was invalid because it 'would qualify, impair and, in a significant respect, negate the essential legislative scheme of the Life Insurance Act'.[97] Kirby J held that, to the extent that the State law purports to be able to interfere with the operation of a Commonwealth law, the State law would have no application to the land to which the Commonwealth law relates. As Kirby J observed, if the reverse was correct, 'mining licensees could scurry in and out of the [defence practice area], avoiding the weapons and military exercises and confining their activities to compatible works, perhaps with a ‘pick and shovel’.'[98]
As Hopper observed:
The constitutional position of a Commonwealth place is anomalous. Although it remains part of the State within which it is situated, the law of the State has, in all likelihood, no application in relation to it. This uncertain and inconvenient situation could scarcely have been intended by the framers of the Constitution.[99]
In regard to the intentions of the founding fathers, it may be argued that the approach taken by the majority in the Mining Act Case was too narrow. Indeed, the majority of the Court appears to have confined itself to the direct inconsistency approach taken before Clyde Engineering or, at the very least, to have restricted the test for indirect inconsistency to the same terms as those espoused for direct inconsistency. The approach of Kirby J in finding inconsistency to be an inconsistency of laws rather than inconsistency of operations may well reflect the true meaning of the wording of the Constitution. Furthermore, as is evident in the Mining Act Case, the approach taken by Kirby J is far more feasible in its practical effects than that taken by the majority.
Indeed, it would seem strange for the Court to be applying a wide 'cover the field' test for indirect inconsistency and yet still require an operational inconsistency between the State and the Commonwealth law to resolve a case of direct inconsistency. It would be logical legal reasoning to find that, once two laws have the capacity of operating inconsistently with each other, s 109 would render the State law invalid to the extent that it has that capacity. This appears to be the view taken by Kirby and Callinan JJ in the Mining Act Case. However, until the issue is next revisited by the High Court, the majority view that there must be an operational inconsistency between the two laws will remain as binding authority in Australia.[100]
Where a determination has to be made on whether a non-taxation State law applies to a Commonwealth transaction, activity or piece of land, several steps must be undertaken.
First, the issue of whether the officer, agent, authority or department undertaking such an activity or transaction, or owning or holding the land, can validly assert the privileges and immunities of the Commonwealth must be considered. If the person or entity cannot be found to represent the Commonwealth, then provided that the law is not inconsistent with a Commonwealth law, the State law will bind the person or entity or their land.
Second, for a State law to apply, it must be of general application and must be capable of extending to the Commonwealth as a matter of statutory interpretation and construction.
Third, the applicable State law cannot subject the Commonwealth to a peculiar disability or burden nor can it impair the ability of the Commonwealth to function as a government.
Fourth, there must be no inconsistency between the applicable State law and the Commonwealth law by which the activity is undertaken or the land is being held. In determining whether there is an inconsistency between State and Commonwealth laws, the following questions must be considered:
| (a) | Is it impossible to obey both the State and Commonwealth laws? |
| (b) | Does the Commonwealth law carry an express or implied intention to cover the field of the subject-matter concerned? |
| (c) | Does the State law operate in a way that interferes with the operation of the Commonwealth law? |
| (d) | Does the State law have the capacity to operate in a way that interferes with the operation of the Commonwealth law? |
If an affirmative answer to any of the above four questions results from an analysis of the facts of the situation, then there would be an inconsistency between the two laws and s 109 of the Constitution would operate to render the State law invalid to the extent that it is inconsistent with the Commonwealth law. The operation of s 109 is both temporal and substantive in the sense that it only renders the State law invalid in the situation where there is an inconsistency with a Commonwealth law at the time of an inconsistent act under State law.
The applicability of Commonwealth laws to States and vice versa is an issue that is fundamental to any federal system of government, as similar tensions can also be found in other federal nations. In Australia, the implied intergovernmental immunity doctrine and the operation of s 109 of the Constitution where there is an inconsistency between Commonwealth and State laws have served to preserve the federal nature of the Australian nation. In Henderson and the Mining Act Case, the High Court appeared to favour approaches on this issue that expands the legislative power of the States over the Commonwealth, but the reasons given by the members of the Court were far from uniform. In the near future, the Court must provide clear responses to this important constitutional quagmire if Australia is to fulfil the dreams of its founding fathers and be a proud unified federation in the community of nations.
[*] LLM, LLB (Hons) BA (IntSt) (Hons), GDLP, PhD candidate, University of Western Sydney and MA candidate, University of Adelaide. Solicitor, Hunt & Hunt (Adelaide) and Lecturer, School of Law, University of Western Sydney. The views contained in this piece are those of the author only and do not necessarily reflect those of any organisation with which the author is associated.
[1] (1904) 1 CLR 91.
[2] Ibid. at 111 per Griffith CJ.
[3] See Victoria v Commonwealth (The Kakariki) [1937] HCA 82; (1937) 58 CLR 618 at 630.
[4] [1906] HCA 94; (1906) 4 CLR 488.
[5] Ibid. at 538-539.
[6] (1920) 28 CLR 129.
[7] [1947] HCA 26; (1946) 74 CLR 31.
[8] Ibid. at 66 per Rich J, at 74-75 per Starke J and at 81-82 per Dixon J.
[9] Ibid. at 81.
[10] Ibid.
[11] For example, Queensland Electricity Commission v Commonwealth [1985] HCa 56; (1985) 159 CLR 192; State Chamber of Commerce and Industry v Commonwealth [1987] HCA 38; (1987) 163 CLR 329; Richardson v Forestry Commission (Tasmania) [1988] HCA 10; (1988) 164 CLR 261.
[12] [1995] HCA 47; (1995) 183 CLR 373.
[13] Ibid. at 476-482 per Mason CJ, Brennan, Deane, Toohey, Gaudron and McHugh JJ.
[14] Ibid. at 481-482 per Mason CJ, Brennan, Deane, Toohey, Gaudron and McHugh JJ.
[15] Ibid. at 452-453 per Mason CJ, Brennan, Deane, Toohey, Gaudron and McHugh JJ.
[16] [1995] HCA 71; (1995) 128 ALR 609.
[17] Ibid. at 629-630 per Mason CJ, Brennan, Deane, Toohey, Gaudron and McHugh JJ.
[18] Ibid. at 631-632 per Mason CJ, Brennan, Deane, Toohey, Gaudron and McHugh JJ.
[19] (1920) 28 CLR 129 at 165.
[20] (1925) 36 CLR 170.
[21] In re Richard Foreman & Sons Pty Ltd; Uther v Federal Commissioner of Taxation [1947] HCA 45; (1947) 74 CLR 508.
[22] [1962] HCA 40; (1962) 108 CLR 372. It was Fullagar J in Commonwealth v Bogle [1953] HCA 10; (1953) 89 CLR 229 that first espoused this idea of Commonwealth immunity from State law.
[23] [1962] HCA 40; (1962) 108 CLR 372 at 378 per Dixon CJ.
[24] (1997) 190 CLR 410.
[25] This was followed in Austral Pacific Group Ltd (in liq) v Airservices Australia [2000] HCA 39; (2000) 203 CLR 136.
[26] Henderson, above n 4, at 439-442 per Dawson, Toohey and Gaudron JJ and at 426-427 per Brennan CJ. See also M Gladman, 'Re The Residential Tenancies Tribunal of New South Wales and Henderson; ex parte Defence Housing Authority (1997) 190 CLR 410: States’ Power to Bind the Commonwealth' (1999) 27 Fed LR 151.
[27] (1997) 190 CLR 410 at 439 per Dawson, Toohey and Gaudron JJ.
[28] Uther at 532 per Dixon J and Cigamatic at 379 per Dixon CJ.
[29] Henderson, above, n 24, at 453-454, referring to Cigamatic, above n 22, at 380-381 per Dixon CJ.
[30] Ibid, at 455.
[31] Ibid, at 458-459.
[32] Ibid, at 470-472.
[33] Ibid, at 437.
[34] Ibid, at 507-508.
[35] The question of whether the Defence Housing Authority represented the Commonwealth was not in issue in Henderson. For a discussion of the relationship between statutory authorities and corporations and the Crown, see Deputy Commissioner of Taxation v State Bank of NSW [1992] HCA 6; (1992) 174 CLR 219 and South Australia v City of Unley [1997] SASC 6228; (1997) 68 SASR 511.
[36] (1979) 145 CLR 107.
[37] Section 8(1) of the Act.
[38] Bradken, above n 36, 114 per Gibbs ACJ; 126-127 per Stephen J; and 133-134 per Mason and Jacobs JJ.
[39] At 115 per Gibbs ACJ; and 127 per Stephen J.
[41] Ibid, 418-419 per Ryan J.
[43] Ibid, 236-238 per Wilcox, Burchett and Olney JJ.
[44] Henderson, above n 26, at 507-508.
[45] (1910) 10 CLR 266.
[46] (1926) 37 CLR 466.
[47] Ibid, at 478.
[48] The Kakariki, above n 3, 630.
[49] [1982] HCA 77; (1982) 152 CLR 211 at 221 per Mason J and at 217 per Gibbs CJ.
[50] Butler v Attorney-General (Vic) [1961] HCA 32; (1961) 106 CLR 268 at 283 per Taylor J.
[51] (1926) 37 CLR 466 at 489-492.
[52] Minister of State for Immigration and Ethnic Affairs v Teoh [1995] HCA 20; (1995) 183 CLR 273.
[53] (1930) 43 CLR 472.
[54] R v Credit Tribunal; Ex parte General Motors Acceptance Corp [1977] HCA 34; (1977) 137 CLR 545.
[55] (1985) 56 ALR 1.
[56] [1983] HCA 15; (1983) 153 CLR 280.
[57] (1997) 190 CLR 410 at 432-433. Brennan CJ, McHugh and Gummow JJ expressed agreement on this point with the joint judgment of Dawson, Toohey and Gaudron JJ.
[58] Ibid. at 459 per McHugh J and at 470 per Gummow J.
[59] Ibid. at 504.
[60] M Crommelin, 'Federalism' in P Finn (ed), Essays on Law and Government, Vol 1 (1995) at 180; and M Gladman, above n 26.
[61] (1970) 123 CLR 89.
[62] Ibid. at 103 per Barwick CJ and at 131 per Windeyer J.
[63] Ibid. at 111 per Kitto J.
[64] [1970] HCA 50; (1970) 125 CLR 93.
[65] Ibid. at 121 per Owen J.
[66] [1992] HCA 51; (1992) 177 CLR 248 at 263.
[67] [1970] HCA 58; (1970) 124 CLR 262.
[68] Barwick CJ, Windeyer and Walsh JJ; McTiernan and Menzies JJ dissented.
[69] [1994] HCA 62; (1994) 181 CLR 548.
[70] Mason CJ, Brennan, Deane, Dawson and McHugh JJ; Toohey and Gaudron JJ dissented.
[71] [1994] HCA 62; (1994) 181 CLR 548 at 559-560 per Mason CJ, Deane, Dawson and McHugh JJ.
[72] At first instance in the Supreme Court of Victoria, (1995) 129 ALR 678; appealed to the Victorian Court of Appeal but removed to the High Court pursuant to s 40(1) of the Judiciary Act 1903 (Cth), Reported at [1996] HCA 58; (1996) 186 CLR 630.
[73] (1995) 129 ALR 678 at 682-683 per Harper J.
[74] Brennan CJ, Gaudron, McHugh, Gummow and Kirby JJ; Dawson and Toohey JJ dissenting.
[75] [1996] HCA 58; (1996) 186 CLR 630 at 677 per McHugh, Gummow and Kirby JJ.
[76] Ibid at 674-675 per McHugh, Gummow and Kirby JJ.
[77] [1999] NSWSC 889; (1999) 166 ALR 466.
[79] Part III of the Mining Act.
[81] Regulations 51, 53 and 54.
[83] Sections 51 and 53.
[84] Section 4(5) of the Act.
[85] (1999) 196 CLR 392 at 411-412.
[86] Ibid. at 435-436. In coming to this conclusion, Gummow J relied on Melbourne Corporation at 61, 74 and 99; Queensland Electricity Commission at 214-217; State Authorities Superannuation Board v Commissioner of State Taxation (WA) [1996] HCA 32; (1996) 189 CLR 253; Henderson, above n 24, at 507-508.
[87] (1999) 196 CLR 392 at 473-474.
[88] Ibid. at 474.
[89] Ibid. at 411-412.
[90] Ibid. at 414-418.
[91] Ibid. at 437.
[92] Ibid. at 417 per Gleeson CJ and Gaudron J and at 442-444 per Gummow J.
[93] Western Australia v Commonwealth [1995] HCA 47; (1995) 183 CLR 373 at 465 per Mason CJ, Brennan, Deane, Toohey, Gaudron and McHugh JJ.
[94] (1999) 196 CLR 392 at 417 per Gleeson CJ and Gaudron J and at 441-443 per Gummow J.
[95] Ibid., at 449-450 per Kirby J.
[96] Stock Motor Ploughs Ltd v Forsyth [1932] HCA 40; (1932) 48 CLR 128 at 136 per Dixon J.
[97] [1986] HCA 24; (1986) 160 CLR 330 at 339.
[98] (1999) 196 CLR 392 at 449-450.
[99] AW Hopper, 'Territories and Commonwealth Places: The Constitutional Position' (1999) 73(3) ALJ 181.
[100] The more recent case of Telstra Corp Ltd v Worthing [1999] HCA 12; (1999) 161 ALR 489 dealt with an issue of direct inconsistency and therefore did not make any observations on this matter.
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