Week 1, Class 1: Constitutional Interpretation and Characterisation

- The manifestation of high principles. - Constitutionalism: the need to check power given human propensity to be corrupted by power and misuse it. The imperceptible change in one’s character when given power. - There have been people with great power that have been restrained due to constitutional checks. - Antigone: what laws do I obey? - People with power being restrained by memory of their education, precepts and ideals. Well read and educated men being more likely to be restrained in their exercise of power. - The need for institutional restraints to power o Power cannot be overly concentrated. However there is a balance in the need to be efficient. o To set up institutions that are not in and of themselves sovereign. They are to be governed by law. No person is to be without a higher law to restrain them. o The state exists for the benefit of the citizen and for individual human flourishing. The whole purpose of state apparatus is to encourage people to lead a good life. - Constitutionalism states that no person is ever a means to an end but is the end in themselves. - A number of principles have been diffused over English history which have been inherited in Australia.

The Australian Constitution

- British Act which gave Australia its Constitution. - The Federal Aspect of the Constitution o the dispersal of power, each with their own powers. The Constitution regulated this relationship o The relationship between the Legislature, The Judiciary and the Executive o The rights aspect: governs the limits on what can be done to citizens. Implied rights, in the absence of a bill of rights, are very important in our Constitution. - The trustee aspect of the Constitution: Trust gives certain powers over assets to the trustee. Usually to invest, manage the trust fund for the sake of a beneficiary. o In a similar vein, the Constitution gives power to various arms of government and they cannot overstep this power.

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Section 51: Legislative Powers of the Parliament

- If the Federal Parliament passes law that is not within what is defined in Section 51’s subject matters, then it is invalid. - The meaning of words will have enormous consequences: o The Parliament is the expression of the people’s will through their representatives. o The British usage of “peace, order and good government” means plenary power. o “Subject to the constitution”. Having the power to make laws does not mean that they are forever laws. They are subject to the Constitution. Ø Inquiries that must be made: is there another provision in the Constitution that the law might go against. Powers and Prohibition - When a court looks at the Constitutional Validity of the law, they treat it as the expression of the will of the people. The Court approaches it reluctantly. o The mere fact that law can be declared invalid goes against Parliamentary Sovereignty. o There is an element of liberality in interpretation of “with respect to” the subject areas. - What is critical in Constitutional Interpretation is the principle/methodology that the Court adopts. o A narrow interpretation would narrow power as opposed to a broad interpretation o The debates between the rival approaches are manifestations of debate about the appropriate role for a court of review in a constitutional democracy. - For example in Section 51(i) sets out that the Commonwealth Government can make law with respect to trade and commerce with other countries, and among the States. o This raises the necessary question of “what is the meaning of trade and commerce”

4 Constitutional Interpretation: Methodologies

- The Engineers Case (1920): The court defined for itself the dominant interpretational approach of strict legalism, textualism, and reference to context ONLY when there was a degree of ambiguity. Reference to the view of the framers was not permitted nor were philosophical and policy speculations. o Let the power lie where it falls resulting from textualist approach. - It is the duty of the court to expound and give effect to the Constitution according its own terms, finding the intention from the words of the compact, and upholding it throughout precisely as framed...The one clear line of judicial inquiry as to the meaning of the Constitution must be to read it naturally in the light of the circumstances in which it was made, with knowledge of the combined fabric of the common law, and the statute law which preceded it, and then lucet ipsa per se. o Rejection of: Ø Implied immunity of government instrumentalities § Commonwealth laws could not bind state governments and their public servants. Ø The doctrine of reserved state powers

- Strict Legalism could not be championed as it was impossible and so the tide turned in 1988. o Values of judges could not be avoided in some judgements. o Section 92 of the Constitution:” On the imposition of uniform duties of customs, trade, commerce, and intercourse among the States, whether by means of internal carriage or ocean navigation, shall be absolutely free.” o What is the meaning of free? Avenue for judges to pour out their own philosophical proclivities. Ø Some judges interpreted this as a constitutionally enshrined laissez faire market system. Ø Other judges said that this meant only being free from customs barriers

- Thus originalism started to have influence. Reference could be had to the framers. o Originalism which means that what the framers said and contemporary debates assist in the finding the meaning of the words in contemporary sense o American originalism is different: the words mean what they meant when they were written. Not taking into account modern community values. Ø Roe v Wade: SC inferred from implied right to privacy in the Constitution an implied right for an abortion. § Originalism: how can this be? How could the framers ever think that this right would mean abortion? § This highlights the effect on power and rights that methods of interpretation can have.

- “Living tree”/ Contemporary meaning and current community values approaches. o Who are judges to say what community values are? o Should it not be left to parliament instead of the judiciary?

5 - Comparative Cases in analogous jurisdictions o The decisions of the USSC are not binding in other jurisdictions o International law is often referred to in this approach to determine what terms mean. Eg: reference to treaties in rights cases and interpreting constitution to be consistent with treaty. Ø If Aus signs up to treaty then we should interpret Constitution consistent with these treaties? Ø This view is not universally accepted.

- Historical Approaches o Where parts of the Constitution rely on historical understandings o S.61 of the Constitution vests executive power in the Queen and GG extending to the maintenance of laws and the Constitution Ø What does this mean when there is no statutory authorisation for action? Ø The only guide is that executive government works upon responsible government which has certain principles which can only be understood via English History. § New doctrine of Nationhood Power: Exec has power to do what alone it can do for the benefit of the nation, without statute. v Historical approaches would be critical of this as this could expand executive power significantly without checks. v It could mean anything!

- What is the dominant approach? o Legalism and textualism o Where the text is clear, the Court will stick to it. o Revert to originalism where it is not clear, discussion of the Convention Debates.

6 Interpretation/Characterisation: Heads of Power

- The fundamental question that arises: Is an Act of Parliament valid? - In examining the constitutional validity of an Act, two fundamental steps are to be taken:

1. Interpretation of the relevant constitutional provisions: the meaning of the Constitution, defining the relevant head of power. 2. Characterisation of the Act to determine if the impugned legislation falls within the scope of the subject matter: interpreting the statute that one is checking for validity to determine what the subject matter of the statute is. o Rights, duties, powers and privileges which the law changes, regulates or abolishes (Fairfax, Grainpool) o Look at purpose of the legislation as well if the relevant head of power is purposive.

F Then one can see whether the subject matter comes within the Constitutional head of powers and is valid.

Relevant interpretation principles:

- Grainpool v Cth o The HCA when interpreting, cannot be stingy or narrow, but must ‘let the words speak’ with all the generality that the words permit. o The practical operation of the law must be examined to determine to see if there is connection to relevant head of power. v Even if on formal basis it is outside heads of power, look at the practical effect on subject matter.

Relevant characterisation principles:

- Fairfax v Federal Commission of Taxation (1965) o Government amended Income Tax Act such at Super Funds that invested in Government Bonds in a certain way, would pay less tax on income. v Government concerned about falling investment in government bonds and was encouraging investors to invest v Using taxation to encourage certain behaviour! o This was challenged on the basis that this statute is not in respect to taxation (a head of power) but rather, should be characterised with respect to providing incentive to invest in certain assets which is not a head of power. v (It’s not about this, it’s actually about that which is invalid”) o Court took approach that in order to see if statute was in power or not, had to seek its dominant characterisation. v Court then changed its mind on characterisation: adopted the dual characterisation approach v So long as one of its characterisations (not even its dominant one) comes within power, it would be valid.

7 o The character of the legislation is determined by reference solely to the nature of the rights, duties, powers and privileges which the operation of the legislation changes. v “is it in its real substance a law upon “with respect to”, one or more of the enumerated subjects” or is there no more in it in relation to any of those subjects than an interference so incidental as not in truth to affect its character.

Ø Characterisation in a minor way is enough. Ø Discover one characterisation of the statute that brings you within power is enough.

- Examine the provisions of the Constitution which confer legislative power upon the Cth Parliament and see if this legislation is wholly, or if not wholly to some extent, within one or more of the powers which the framers of the Constitution thought fit to confer upon it. (ANA v Commonwealth)

- This slight shift has broadened Commonwealth Power giving more opportunity for more power and less opportunity for law to be struck down. v Always think about what is happening to liberty and rights by slight changes

A Head of Power: The Trade and Commerce Power s 51(i)

Interpretation of the Trade and Commerce Power - Section 51(i) of the Constitution provides: The Parliament shall, subject to this Constitution, have power to make laws for the peace, order, and good government of the Commonwealth with respect to: trade and commerce with other countries, and among the States; o Cth regulation of trade intrastate might come under question then. - The meaning of trade and commerce? - What falls within the ambit of the phrase “trade and commerce” and “among the States”? o Production, agriculture etc. o Antecedent activities like the above are not in and of themselves are not for trade and commerce o Importation? Subsequent activity. Can they regulate this goods once they come into the country? Ø Cth might seek to prevent drugs, illegal pornography, firearms. Ø Cth might seek to say that it needs to regulate intrastate to give effect to its Importation Powers. Ø However, prima facie this intra state regulation power for subsequent activity is not valid. - Bank Nationalisation Case o Per Dixon J: Ø Covers intangibles as well as the movement of goods and person Ø Broadcasting, television

8 Ø “transportation, traffic, movement, transfer, interchange, communication are words which perhaps together embrace an idea which is dominant in the conception of what the commerce clause requires” Ø “to confine the subject matter to physical things and persons would be quite out of keeping with all modern developments…”

- W & A McArthur Ltd v Queensland (1920): o The particular instances that may fall within the ambit of the expression [‘trade, commerce and intercourse’] depend upon the varying phases and development of trade, commerce and intercourse itself...‘Trade and commerce’ between different countries...has never been defined to the mere act of transportation of merchandise over the frontier. That the words include that act is, of course, a truism. But that they go far beyond it is a fact quite as undoubted. o ‘Definition’ of in trade and commerce: All the commercial arrangements of which transportation is the direct and necessary result form part of ‘trade and commerce’. The mutual communings, the negotiations, verbal and by correspondence, the bargain, the transport and the delivery are all, but not exclusively, parts of that class of relations between mankind which the world calls ‘trade and commerce’. Ø Court willing to adopt meaning of trade and commerce understood by ordinary business people. Ø (Anything legislation that falls outside of this is outside the head of power and invalid.) o As to “among the States”, the activity adopted, albeit an accessory method, to initiate, continue and effectuate the movement of persons and things inter state are “among the States” as their substantial nature is such that they are essential for the acknowledged end. Ø Even activity inside a State can be inter-State as it may be part of a “larger integer” and having on the whole the distinctive character of commerce between the States. o Dixon J: profit is not essential for the activity to fall within “trade and commerce” Ø (crossing of the border for a picnic may come within the meaning of “trade and commerce”) Ø Is this not an expansion of commonwealth power such that it can reach to affect such small activities of private life?

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Reading Down and Severance

- HCA drawing line through the parts of the Act that are invalid to ‘save’ the rest of the Act - The Court is so solicitous in trying to save the Act as the Act is an expression of the will of the people through their representatives.

- Australian National Airways Pty Ltd v Commonwealth (1945) o Labor policy to nationalise industry. Passed Act which established ANA Commission, a government run airline operator and regulator, and could transport, for reward, passengers and goods between States (inter state, no problem!), territories and overseas (all good as well!) o Part IV effectively established government monopoly as it prohibited private operation of airline service. F Argument 1: The Commonwealth can regulate trade and commerce but cannot engage in it F The HCA rejected this and affirmed that Cth could engage in trade and commerce o Rejection of the view that “in trade and commerce” requires buying and selling and not merely carriage Ø Argument 2: The Cth cannot regulate “in trade and commerce” unless the passengers are paying for it. Ø HCA rejects this: even travel for private purposes still involved commercial elements (paying for tickets)

o What then about Part IV? Breaches S.92: “On the imposition of uniform duties of customs, trade, commerce, and intercourse among the States, whether by means of internal carriage or ocean navigation, shall be absolutely free.”

Ø A law authorizing the government to conduct a transport service for inter-state trade, whether as a monopoly or not, appears to me to answer the description, a law with respect to trade and commerce amongst the states. It is only by importing a limitation into the descriptive words of the power that such a law can be excluded. (Dixon J) F So, establishing monopoly was within the relevant heads of power as power to regulate means power to prohibit F But just because it is in head of power does not mean it is automatically valid, must always check for prohibitions that are being breached. F There is the need to harmonise s51(i) with s 92. If intra state trade and commerce is given a broad interpretation and thus gives the Commonwealth broad regulatory powers, this will have to be bounded by s 92 lest the Commonwealth infringes upon it.

10 Interplay between powers and prohibitions. All powers in the Constitution are subject to prohibitions contained therein.

Ø HCA said that Part IV was invalid as it breached s.92. § So, while the Cth was able to establish a government owned airline as to do so was to make a law with respect to trade and commerce, it could give that airline a monopoly as this would infringe on s 92. F Can the provision be read down? Can it be read down in such a way that it is not a monopoly? F If not, then we ‘go for the knife’ and sever to save the rest of the statute. 1 F Say we have read down/severed to bring the Act within the Constitutional head of power:

Þ However, if the invalid provision is embedded and is critical to the operation of the Act, then it cannot be severed. The whole Act is tainted and must go. Þ Further, if the Act does not make sense without the provision, then the whole Act must go. Þ Further, if what is left over after severance/reading down is clearly contrary to the will of Parliament, then the whole Act must go.

o The Constitution is “an instrument of government meant to endure and conferring powers expressed in general propositions wide enough to be capable of flexible application to changing circumstances” (Dixon J) o General understanding of the conception of inter-state commerce where the place given to the carriage /transportation of goods and persons is anything but subsidiary. Ø It is inseparable from the movement of things and of people Ø Transport is within “trade and commerce”

1 Acts Interpretation Act 1901 s 15A that gives statutory support for these principles of reading down.

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- NSW v Commonwealth (Work Choices Case) (2006), per Kirby J dissenting o Read down and sever so long as the legislation does not become something different from what was enacted by the Parliament. o Where invalidation is substantial and would strike down key provisions of a comprehensive and integrated legislative measure, the invocation of severance will be inappropriate.

- Monis v The Queen [2013] HCA 4 o Crennan, Kiefel and Bell JJ: Ø Rule of construction: legislation should, if possible, be interpreted so as not to make it inconsistent with the Constitution F Courts should assume that parliament does not intend to pass beyond constitutional bounds and that parliament intends that as much of the Act operate as possible even if struck down in part. F Legislation to be read in a way which would result in validity but only so far as the language permits. Ø Rule of legality F Presumption that the legislature will not infringe on constitutionally protected rights in statute without expressing such an intention with irresistible clearness Purposive and non purposive powers

o The power has a purpose in the Constitution attached to it. o It is not enough to legislate on the subject matter, the legislation must point out that it is for a purpose that the Constitution provides Ø Defence Power: maintenance of forces for the defence of the nation as set out in the Constitution. Ø Why has purpose been given to this defence power? v The forces could be used for tyranny v Our law prevents this through the purpose: any law that departs from the purpose in the Constitution would be invalid. v British distrust for standing armies, historical approaches.

o Taxation powers: Ø Non purposive. Ø Taxation can be used to punish and discourage/encourage (through tax breaks) certain behaviours Ø Power! Ø If taxation was limited to revenue raising, it would be difficult to use it for more than mere revenue raising.

12 Trade and Commerce Power: non purposive

- Murphyores v Commonwealth (1976)

o M had mining leases granted by QLD and conducted such activities on Fraser Island. o Under Customs Act, the export of minerals without written approval of the Crth Minerals Minister was prohibited. v Operates of the Act at the point of export. The government cannot prohibit (intrastate production is a state matter), but can regulate export. v Cth knows that it can ‘get them’ at the point of export as the purpose of mining is for export for profit o Minister denies approval as he wanted to conduct study on environmental impact of the mining activities. o M challenges this relevant regulation in the Customs Act as it permits the Minister to take into account factors that are not related to mining: environmental factors. v Issue of, if the Minster approves or not, can they take into account environmental factors? o The “in trade and commerce” power is non-purposive. Valid as it falls within the subject matter of exportation which is within “in trade or commerce” head of power. v The Act operated on licenses to export which is very much within the head of power. v But the environment is extraneous to “in trade or commerce?” F Mason J: it is no objection to the validity of a law otherwise within power that it touches or affects a topic on which the Cth has no power to legislate.

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Incidental power to grants of power in the Constitution

- Idea that there is residue of power beyond what is stated when it is necessary to effectuate the main head of power. - D’Emden v Peder (1904) the implied incidental power that is recognised in law. Every head of power is extended by a separate implied incidental power. v “where any power or control is expressly granted, there is included in the grant, to the full extent of the capacity of the grantor, and without special mention, every power and every control the denial of which would render the grant itself ineffective.” v An expansion of commonwealth power! v Every legislative power carries with it authority to legislate in relation to: F Acts, matters of things the control of which is found necessary to effectuate its main purpose. - Semantic shift in Nationwide News? “appropriateness” test by the HCA, following Mason J.

- Cth preventing the importation of illegal goods is a valid power. v Cth argues that it will have incidental power after importation (intra state) in order to make effective the actual, legitimate power they have after prohibition of importation - How far does this incidental power go? - Broad definition of incidental power will broaden power enormously! - Different principles emerge according to the scenarios:

Scenario A: Interstate v Intrastate “trade and commerce” - To what extent can Cth regulate intrastate trade and commerce and in order to make effective its interstate powers. - The principles here have emerged from particular scenarios. - We are still within “trade and commerce”, still within one head of power. - Drawing the distinction between physical integration of intrastate trade (within power) and economic integration (not within power). v Attorney General (WA) v Australian National Airlines Commission (1976): The Commonwealth wants more power… F S 19b of the Australian National Airlines Act 1945 (Cth) authorised a Cth body, TAA, to carry passengers and goods between two points in one state in order to contribute to ‘efficient, competitive and profitable’ conduct of TAA interstate operation. Trying to use the incidental power, based on economic factors , to regulate the intra state trade and commerce. F The supporting of the ‘efficiency, competitiveness and profitability of the interstate activity’ does not warrant the

14 conclusion that the legislative power involved is an incident of the power granted by s 51(i) F The incidental power cannot be given an operation that would obliterate the distinction between intra-state and inter-state trade and commerce (Gibbs J in AG (WA) v ANA, 1976) F Today, this remains good law. The limit is physical interference but economic factors cannot be used. Mason’s dissent in AG (WA) v ANA, 1976) is important here. Decision is clear but comments that suggest that the precedent is ‘weak’: Ä What would the Court say today? Ä Dicta in the case from Mason J that suggests there is no practical difference between economic and physical factors. Ä Seems to suggest that this distinction is artificial:”No distinction can or should be drawn between what is physically necessary and what is economically necessary…physical and economic considerations cannot be divorced or separated one from the other…” Ä Further, suggestions that the court will look at practical consequences of the statute. Consequences of regulation. Using Grainpool (generality the words permit), one could argue that there is no reason why power should be restrained. Ä In the USA, where there is liberal interpretation of ‘commerce power’, there is a limit that has been developed by their courts to the extension of the power. This might have bearing in Aus in that it would increase probability that if this case was decided today, economic factors would be relevant. F What about pure economic viability? Showing that economic activity would not be possible without intrastate regulation? The Courts have not commented on this yet. While economic efficiency has been expressly excluded, we could argue on basis of comingling that economic viability is within power. v Again, drawing the distinction between physical integration of intrastate trade (within power) and economic integration (not within power). F Airlines of NSW Pty Ltd v NSW (No 2) (1965): Where the law, by how it affects intra-State activities, protects against danger of physical interference the very activity which is within the

15 federal power, then the law is a law that is within the grant of federal power. A rejection of economic factors in applying the implied incidental power. S 6(1) of Air Navigation Regulations (Cth) expressly made Cth regulations applicable to intrastate air navigation. Ä Regulation 198 prohibited use to aircraft in public transport except pursuant to license issued by the Director General of Civil Aviation. Ä In granting a license under Regulation 199, the Director General was required to have regard to “safety, regularity and efficiency of air navigation and to no other matters” Ä Cth argument: These aspects of intrastate air navigation need to be regulated in so far as they relate to safety, regularity and efficiency in order to make effective the valid regulation with respect to inter state trade The Court accepted the Cth argument and said that the incidental power could be relied on just on the facts of the case. Ä The essential characteristic was the need to protect interstate trade and commerce from physical harm. Ä ‘efficiency’ and ‘regularity’ are not stand along concepts but as means by which safety of the air can be secured. Ä The law operated to protect against the real possibility of physical interference with the actual carrying on of air navigation Ä The regulations were more specifically drafted Kitto and Barwick expressly exclude economic matters as factors that could bring the law affective intra State trade within power. Ä cautioned that factors such as profit and other consequential matters would not bring a law affecting intra-State trade within power. Ä It’s not about ‘safety’, it’s about protecting interstate and overseas planes form physical harm, the former is within Cth power already. Cf to the mere economic integration in AG(WA) v ANA above Also, there is no reference to economic necessity Ä BUT it has not been rejected explicitly. This might be something used to argue.

16 A rejection of the broader and more liberal interpretation of “commerce power” as seen in the USA as this would mean no limit on Cth power.

- An example of a USA decision which would have been indicative of the status of the US position at the time of the above cases:

o USA v Wrightwood Dairy (1942) v Court held that Congress had the power to regulate the price of milk as interstate commerce and possessed every power needed to make that regulation effective v This power was not confined to inter state but extended to activities intra state which so affect inter State commerce to achieve the effective execution of the granted power v No form of state activity can constitutionally thwart the regulator power granted by the commerce clause: Ø The reach of that power extends to intrastate activities which interfere in substantial way or obstruct exercise of power Ø Extends to such control as is necessary and appropriate to make regulation of inter state effective

Scenario B: Trade and commerce per se v subsequent to trade and commerce; Production

- Whether something is or is not “in trade and commerce” - To what extent can I regulate subject matter that is not “in trade and commerce”: Production, Importation, in order to make effective commonwealth power. - Matters antecedent or subsequent to “trade or commerce” - For example, say that the Commonwealth wants to enhance the quality of meat exported from Australia. o Can impose certain conditions at the point of export. (Cannot export unless x y z) o This would involve checking the meat before the actual point of export. They may say that they need to regulate abbatoirs etc. o To what extent can the Cth reach back to regulate production when it is not trade and commerce itself. - Importation is trade and commerce but subsequent to that it might not be trade and commerce. o To what extent can the Cth come into the warehouse intra State to regulate the imported goods?

- R v Burgess, ex parte Henry (1936) o Unlicensed Pilot who was prosecuted for flying in NSW in contravention of the Air Navigation Regulations Cth s.6 . This regulation prohibited an unlicensed person from flying an aircraft ‘within the limits of the Cth’ v But this is intrastate!

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