LAWS1116 Lecture 3

Implied Immunities and Reserved Powers

Is a statute constitutional? Enquiry One: Power

  • look at “characterisation” in the broad sense
  • Is the federal law validly enacted under s51/52?
  • Interpretation – what is the scope of each part of s51/52?
  • Characterisation – narrow sense – characteristics of the statute – what is its subject matter?
  • Does the law (as characterised) fall within that power (as interpreted)?

Is a statute constitutional? Enquiry Two: Prohibition

  • Does it violate an express prohibition? (eg. s51 (xxxi) – ‘just terms’ or s80 – jury trial)
  • Does it violate an implicit prohibition? (inter-governmental immunities/limitations, freedom of political speech, etc.)

Eras of the High Court

  • Phase 1 – 1903-1919 (The constitution is a federal compact)
  • Engineer’s Case (1920)
  • Phase 2 – 1920-1947 (The constitution is an imperial statute, nothing more)
  • Melbourne Corporation v Commonwealth (1947)
  • Phase 3 – 1947 – Present (Constitution is our fundamental legal document – but it is federal in nature)

Jurisprudence of the High Court

  • Phase 1 – State reserved powers, immunity of instrumentalities, dominant characterisation
  • Phase 2 – Priority and supremacy of federal legislative powers
  • Phase 3 – Multiple characterisation, modified intergovernmental immunities

Phase 1 – The federal compact

  • Commonwealth was a federation of states – the states maintain full autonomy in all non-specified areas
  • Original High Court populated by founders intimately involved in creating the constitution (Headed by Griffith CJ)
  • Higgens and Isaacs (1906/07) join later – they were also founders, but had been in the minority during the constitutional drafting process. Outlasted the others, and eventually ushered in the second phase

D’emden v Pedder (1904) (Implied Immunities)

  • Issue: Do Tasmanian state taxes apply to a federal employee (The Tasmanian Deputy Postmaster-General)?
  • Ruling: No, they don’t. Statute read down to not apply to federal employees.
  • Justification: The commonwealth is sovereign within its sphere of powers, which include the post, and must be free from extrinsic/state control. States that could tax federal employees could effectively control them, so states were found to have no ability to tax federal employees.

The Controversy

  • After the ruling in D’emden v Pedder, the High Court also affirmed it in Deakin v Webb and Commonwealth v NSW. They refused leave to appeal to the Privy Council.
  • Eventually Webb v Outrim made it to the Supreme Court of NSW and sought permission to appeal directly to the Privy Council from there
  • Privy Council tried to overrule the doctrine of implied immunity, but the High Court kept applying it regardless (Baxter)
  • Their justification was that the Privy Council was trying to interpret the constitution as a British statute, not a federal compact.

Baxter v Commissioner of Taxation (1907) (Implied Immunities 2 – aka “take that, Privy Council”)

  • Issue: Can a NSW tax apply to the slaray of a Commonwealth customs official?
  • Ruling: No, it can’t.
  • Justification: The privy council had no ability to understand the constitution. They were an “astral intelligence” trying to interpret it with the “aid of a dictionary”. The High Court has the final say over federal issues between Commonwealth and State, as specified BY the constitution.
  • Demonstrated how the High Court saw Australia an Independent Nation

Railway Servant’s Case (1906) (Implied Immunities 3 – the State’s revenge!)

  • Issue: Did the Commonwealth’s power of industrial arbitration (s51) apply to an internal employer/employee disputes in which the state itself was the employer?
  • Ruling: No, it did not
  • Justification: It only applied to INTERSTATE disputes, not INTRASTATE ones
  • Effectively ruled that D’emden applied in reverse, protecting the states from Commonwealth interference in their spheres of power as well.
  • Relied on US authorities (fairly common pre 1920)

Peterswald v Bartley (1904) (Reserved Powers)

  • Issue: Did the exclusive Commonwealth control of duties and excises (s90) overwrite the NSW Brewery and Spirit Merchant Licensing Scheme?
  • Ruling: No, it did not.
  • Justification: The licensing fee was a flat rate – it did not scale, and as such did not meet the definition of an excise. It also applied only within the bounds of NSW, and the Commonwealth cannot regulate intrastate trade or affairs.

R v Barger (1908) (Reserved Powers 2 – The Reservening)

  • Issue: Did the Commonwealth’s power to tax (s90) grant the ability to structure a tax in such a way as to also control labour/wages
  • Ruling: No, it did not
  • Justification: The exemption granted to companies paying certain wage levels effectively exceeded the power of the Commonwealth, as it was an indirect attempt to set wage levels. Held that if the “wide” definition of taxation as accepted, the Commonwealth could invade EVERY aspect of state affairs, so it was struck down as unreasonable interference with domestic state affairs.

Union Label (1908) (Reserved Powers 3)

  • Issue: Are “Workers Trade Marks” included in the Commonwealth control of “trademarks” under s51(xviii)?
  • Ruling: No, not if they are only used within one state
  • Justification: The states had a reserved power to control trade within their borders (implicit in s107), and the fact that s51(i) only specified INTERSTATE trade implied that was the extent of the Commonwealth power.

Huddart Parker v Moorehead (1909) (Reserved Powers 4)

  • Issue: Did the Commonwealth “Australia Industries Preservation Act 1906” comply with the limits of the corporations power under section 51?
  • Ruling: No, as the Commonwealth could still only interfere with INTERSTATE trade
  • Justification: The federal structure of the constitution reserved the power of internal trade and commerce to the states

Phase 1 Summary

  • HC read federal “Heads of Power” narrowly
  • HC read the constitution as a federal compact
  • HC read immunities of each government within its separate sphere

Isaac Isaacs

  • Lost most of his proposals while drafting the constitution – was generally in the minority
  • Appointed to the HC with Higgins early in the 1900’s, but not one of the original appointees
  • Constantly dissented (but originally in the minority – Isaacs and Higgins were only 2 of 5)
  • 1919 – original 3 judges had retired/died
  • New replacements chose to follow Isaacs example
  • First key case – the “Engineer’s Case”

Premise of Phase 2 Interpretation

  • The Constitution is a statute of British Parliament
  • Therefore we should use British cases and rules of interpretation ONLY
  • Held that subordinate British statutes should be read widely, which included the Australian Constitution as a piece of subordinate colonial legislation
  • Effectively overruled the ideas of federation – instead opting for Commonwealth supremacy
  • Was read as modelled after Britain – effectively imported the “Parliamentary Supremacy” there as “Commonwealth Supremacy”
  • Removed immunities/reserved powers doctrines.