#7110 - Implied Intergovernmental Immunities Theory - Constitutional Law

• There is a common law presumption that statutes do not bind the Crown, and another presumption in our federal system is that statutes passed at one level of legislature do not bind the Crown in right of the other. These are now considered weak presumptions

• The presumptions are separate from constitutional immunity.

• D’emden v Pedder: Cth and its officers were impliedly immune from state Legislation

• Railway Servants Case (1906): State and its officers impliedly immune from Cth legislation.

• There were some exceptions since some legislative powers would not make sense if the governments were not permitted to bind each other

• Engineers brought industrial proceedings against 843 employers including three WA government employers.

• If the implied doctrine of intergovernmental immunities applied, those State government employers would have been immune from the jurisdiction of the court (since that jurisdiction had been established under a federal statute, the Conciliation and Arbitration Act 1904 (Cth)).

• DECISION: implied immunities doctrine abandoned. Commonwealth had the power to bind State government instrumentalities where it applied to them on a true construction of the legislation. Obiter authorised the exercise of reciprocal power by the States.

• S 48 of the Banking Act 1945 (Cth) provided that a private bank could not engage in business with a State government or government authority without the consent of the federal Treasurer. The section was intended to force State governments to bank only with the federally-owned bank.

• A local government authority, Melbourne Corporation, sought to bank with a private bank. The Treasurer refused permission and urged MC to switch to the Commonwealth Bank of Australia (which was federally-owned).

• MC sought a declaration that s 48 was invalid.

DECISION: s 48 invalid for discrimination as the law had no effect on other taxpayers. Rich J (with majority approving) held Cth laws could be impliedly limited if:

• The Cth law would prevent a State from continuing to exist and function as such (approved by majority). This could occur if

  • The Cth singles out a State or States for the imposition of restrictions (the Cth may not discriminate against the States by treating them differently to other legal persons)

  • the Commonwealth passes laws of general application which fundamentally impede the States from carrying out essential government functions

• Rich J also held that a law that fundamentally impedes a State in its performance of essential government functions would not validly apply to a State (a majority did not agree with this)

• QEC was a statutory body representing the Crown in right of Queensland. It generated 97% of QLD’s electricity and distributed it via government-controlled Electricity Boards.

• Electrical Trades Union was engaged in a dispute with QEC and the Boards, as well as electrical authorities in other States. QLD dispute was the most volatile.

• Conciliation and Arbitration (Electrical Industry) Act 1985 (Cth) imposed special rules regarding the resolution of certain disputes by the CAC, including that the CAC had to settle the dispute as expeditiously as possible, that the disputes be heard by the Full Bench of the CAC and that the CAC could not refrain from hearing s 6 disputes.

• S 6(1) provided that the Act applied to the existing dispute between the QEC and other State authorities and the Union, while s 6(2) extended that application to future disputes between unions and electricity authorities in Queensland. The special rules only applied to the dispute with the QLD authorities, so did not have to be applied to any dispute involving electrical authorities of other States.

• The QEC and Electricity Boards challenged the validity of the Act.

DECISION: Act invalid for discriminating against a State govt instrumentality. The anti-discrimination principle applies so as to prohibit discrimination against a single State (in addition to States collectively as in State Banking) and against statutory government instrumentalities.

• It was irrelevant that the private electricity providers who generated the other 3% of electricity in QLD were also affected, since discrimination is a question of substance, not form.

• Deane and Brennan J held that ‘rational’ discrimination (if the affected State had a special quality the legislation was calculated to deal with) was permitted

• Note that the majority in QEC also accepted that laws threatening the continued existence of the States or their functioning as States would be prohibited.

• Approved the principle that rational discrimination is not blocked by intergovernmental immunity

• Prohibition of certain acts in the two forests was not with the aim of discriminating against Tasmania, but merely because of the special qualities of the land within Tasmania. The same protection would apply if the land was in another State.

• Cth legislation prevented the Cth Industrial Relations Commission refraining from hearing or dismissing a matter (on the basis that further proceedings were unnecessary or undesirable in the public interest) where a State arbitrator could not deal with a dispute.

• The law at the time only applied to Victoria, whose government had abolished the State conciliation and arbitration system.

• DECISION: legislation valid. The legislation would apply equally to any other State in the same situation. The court said whether a law was discriminatory would depend on what the purpose of the enactment was (determined by reference to the substance and actual operation of the law in the circumstances). Here the purpose was to ensure that a power given to the Commission to refrain from proceeding in the public interest was only exercisable where an alternative system of compulsory arbitration is available.

• Cth legislation imposed a 2.5% payroll tax on all employer

• Victoria argued this breached a prohibition on laws that fundamentally impede the States in their performance of essential functions

• DECISION: court rejected the argument. The law had been in force for thirty years and had not prevented the States discharging their functions. There was less money available for public purposes but this could be said of any tax imposed on a State. Accordingly, a law that has a financial impact on a State will not be considered to impede the performance of its duties fundamentally unless it renders the continuance of its activity practically impossible.

• WA Govt challenged the Native Title Act as impermissibly hampering the capacity of States to govern by interfering with the States’ capacity to control the use of land (by requiring them to pay for diminutions or extinguishments of Aboriginal native title).

• DECISION: law held to be valid.

The court indicated some of the sorts of laws that would breach this prohibition were laws that:

• affect the machinery of the State government

• impair the constitution of the three branches of government

• affect the capacity of the States to engage the servants it needs

• impede the acquisition of goods and services

• impede the State’s ability to acquire land needed for the discharge of the essential functions of the State in a manner beyond requiring the payment of compensation

• Vic sought discontinuance of proceedings, argued that any orders by the Cth Industrial Relations Commission would infringe the doctrine of implied State immunities

• DECISION: six-justice majority confirmed the limitation prohibits ‘an impairment or curtailment of the capacity of a State to function as a government.” An interim award made by the Commission preventing termination of a number of health workers’ employment on redundancy grounds was set aside.

1. The Commonwealth cannot interfere with employment in respect of

   • The State government’s right to determine the number and identity of the persons whom it wishes to employ

   • The State government’s right to determine the number and identity of persons whom it wishes to dismiss with or without notice on redundancy grounds

2. The Commonwealth cannot interfere with the employment of high level government employees in respect of

   1. The State’s right to determine the number and identity of the persons employed or dismissed on redundancy grounds (as per first limitation)

   2. The State’s right to determine the terms and conditions on which these employees would be engaged (for example, the Cth would be prevented from fixing minimum wages and working conditions in respect of these employees ‘and possibly others’)

High level employees were stated to include: Ministers, ministerial assistants and advisers, heads of departments and high level statutory office holders, parliamentary officers and judges.

Unanimously ipheld the identified areas of State immunity from Re AEU.

• Federal legislation required State judges to pay a federal tax known as...