Federal Limitations on the Legislative Power of the States and the Commonwealth to Bind One Another

AuthorAnne Twomey
DOI10.22145/flr.31.3.5
Published date01 September 2003
Date01 September 2003
Subject MatterArticle
FEDERAL LIMITATIONS ON THE LEGISLATIVE POWER
OF THE STATES AND THE COMMONWEALTH TO BIND
ONE ANOTHER
Anne Twomey*
INTRODUCTION
The principle that the legislature can enact laws which bind the executive is a familiar
one. The prerogative can be abrogated or abolished by legislation1 and the decisions of
the executive made subject to administrative review.2
More interesting, however, is the relationship within the federation between the
legislature of one polity and the executive of another. To what extent can the laws of
one polity bind the executive of another, or abrogate or abolish its prerogatives?
The High Court, over the last century, has had a very difficult time in answering
these questions. Fundamental though they be to our governmental system, there has
never been a clear and consistent principle established to provide ready answers to
them. After the centenary of federation, one would think we would understand how
the polities within that federation are intended to interact, but we do not.
This article addresses the current state of the law with regard to the power of the
legislature of one polity within the federation to bind the executive government of
another, and the legislative power of one polity to impose a tax upon another. In doing
so it provides critical analysis of the recent High Court judgment in Austin v The
Commonwealth3 and its effect upon the Melbourne Corporation4 principle. It then
analyses the fundamental Cigamatic5 doctrine and addresses its possible replacement
with a reverse application of the Melbourne Corporation principle, as a means of
providing a more coherent basis for determining the difficult question of the extent to
which one polity may legislate to bind or affect another.
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* BA/LLB (Hons) (Melb), LLM (Pub Law) (ANU). This article is a revised version of a paper
given at the Public Law Weekend at the Australian National University in 2002.
1 Attorney-General v De Keyser's Royal Hotel Ltd [1920] AC 508.
2 See, eg, Administrative Decisions (Judicial Review) Act 1977 (Cth); Administrative Decisions
Tribunal Act 1997 (NSW).
3 Austin v Commonwealth (2003) 195 ALR 321 ('Austin').
4 Melbourne Corporation v Commonwealth (1947) 74 CLR 31 ('Melbourne Corporation').
5 Commonwealth v Cigamatic Pty Ltd (In Liquidation) (1962) 108 CLR 372 ('Cigamatic').
508 Federal Law Review Volume 31
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POWER OF THE COMMONWEALTH PARLIAMENT TO ENACT LAWS
BINDING ON THE STATE EXECUTIVE
The High Court's initial constitutional approach to the issue of federalism was to
establish an implied immunity of instrumentalities, so that at least in the exercise of
their 'governmental' functions, neither the Commonwealth nor State executive
governments could be affected by the laws of the other.6 This implication was
overturned by the Engineers’ Case, so that the laws of the Commonwealth and the
States have full operation within the subjects upon which they have power to legislate,
subject to the application of s 109 to resolve inconsistent laws.7 Commonwealth laws
could therefore bind the States and State laws could bind the Commonwealth.
The Engineers' Case left open the possibility that different considerations may apply
to discriminatory laws, and laws concerning taxation or the prerogative.8 Laws
concerning taxation are discussed below. Subsequent cases have also held that the
Commonwealth may make laws affecting the prerogative of a State.9
The category of discriminatory laws was explored in Melbourne Corporation.10 There
a majority of the Court identified an implied limitation on the Commonwealth
Parliament's power to legislate with respect to the States. The implied limitation is
derived from the federal system of government which requires the existence of
separate governments exercising independent functions.11 The nature of this
limitation, however, varied in the judgments. Justice Dixon referred to 'a law which
discriminates against States' or which 'places a particular disability or burden upon an
operation or activity of a State' and 'upon the execution of its constitutional powers.'12
Justice Starke referred to a law which 'curtails or interferes in a substantial manner
with the exercise of constitutional power' by a State.13 Justice Rich referred to laws
which 'single out' the States and impose on them restrictions which prevent them from
performing the normal and essential functions of government, or laws of general
application which would have this effect.14 Justice Williams referred to the exercise of
power 'for the purpose of affecting the capacity of the other to perform its essential
governmental functions.'15 Chief Justice Latham focused upon issues of
characterization, to determine whether the Commonwealth law was one with respect
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6 D'Emden v Pedder (1904) 1 CLR 91; Federated Amalgamated Government Railway and Tramway
Service Association v New South Wales Traffic Employees Association (1906) 4 CLR 488.
7 Amalgamated Society of Engineers v Adelaide Steamship Co Ltd (1920) 28 CLR 129, 155 (Knox
CJ, Isaacs, Rich and Starke JJ) ('Engineers' Case').
8 Ibid 143–4, 156–7 (Knox CJ, Isaacs, Rich and Starke JJ). See also Australian Railways Union v
Victorian Railways Commissioners (1930) 44 CLR 319, 390 (Dixon J commenting on these
exceptions).
9 See, eg, Victoria v Australian Building Construction Employees' and Builders Labourers'
Federation (1982) 152 CLR 25, 92–3 (Mason J); Commonwealth v Tasmania (1983) 158 CLR 1,
140–1 (Mason J), 215 (Brennan J) ('Tasmanian Dams Case'), and the cases discussed therein.
10 (1947) 74 CLR 31.
11 Ibid 81, 83 (Dixon J), 66 (Rich J), 74–5 (Starke J), 99 (Williams J).
12 Ibid 79.
13 Ibid 75.
14 Ibid 66.
15 Ibid 99. Note, however, that his Honour then dealt with the issue as one of characterization.
2003 Federal Limitations on the Legislative Power 509
____________________________________________________________________________________
to State functions rather than one with respect to a head of Commonwealth legislative
power.16
The implied limitation identified by the High Court in Melbourne Corporation clearly
applied as a limitation on legislative power. There were also suggestions that it was a
limitation on Commonwealth executive power. Justice Starke was the clearest,
expressly referring to the implication as a limitation on executive power.17 Justices
Rich18 and Williams19 referred generally to the exercise of 'the constitutional powers'
of the Commonwealth or the States against the other, which presumably extends to
executive power as well as legislative power.
In a series of subsequent cases, the Melbourne Corporation principle was refined20 so
that the implied limitation was expressed as having two distinct elements:
(1) the prohibition against discrimination which involves the placing on the States of
special burdens or disabilities ['the limitation against discrimination'] and
(2) the prohibition against laws of general application which operate to destroy or curtail
the continued existence of the States or their capacity to function as governments …21
This split into two elements, which has since been overturned,22 was used not only to
describe the different types of laws which would breach the implied limitation, but
also to set different tests for determining whether a breach had occurred. It was a
means of drawing together the various descriptions, rationales and tests set out in the
Melbourne Corporation judgments.
The first element dealt with 'discrimination'. In the Queensland Electricity
Commission case, it was noted that this first element applied to discrimination against a
particular State, as well as against States generally.23 In order to determine if a law is
'discriminatory' it is necessary to look to its purpose, which is to be ascertained 'by
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16 Ibid 61.
17 Ibid 75. See also Queensland Electricity Commission v Commonwealth (1985) 159 CLR 192, 247
(Deane J) ('Queensland Electricity Commission'). Note, however, Aboriginal Legal Service of
Western Australia v Western Australia (1993) 9 WAR 297, 319–20 (Nicholson J) where his
Honour observed that it does not apply to resolutions of a House of the Parliament, as
these are not exercises of legislative or executive power.
18 Melbourne Corporation (1947) 74 CLR 31, 66.
19 Ibid 99.
20 Victoria v Commonwealth (1971) 122 CLR 353, 424 (Gibbs J), 391–2 (Menzies J), 410–11 (Walsh
J); Victoria v Australian Building Construction Employees' and Builders Labourers' Federation
(1982) 152 CLR 25, 93 (Mason J); Koowarta v Bjelke-Petersen (1982) 153 CLR 168, 191–2 (Gibbs
CJ), 216 (Stephen J), 225–6 (Mason J); R v Coldham; Ex parte Australian Social Welfare Union
(1983) 153 CLR 297, 313 (the Court); Tasmanian Dams Case (1983) 158 CLR 1, 139–41 (Mason
J), 169 (Murphy J), 214–15 (Brennan J), 281 (Deane J); Queensland Electricity Commission
(1985) 159 CLR 192, 206–7 (Gibbs CJ), 217 (Mason J), 226–7 (Wilson J), 231–3 (Brennan J),
245–9 (Deane J), 259–62 (Dawson J); Australian Capital Television Pty Ltd v Commonwealth
(1992) 177 CLR 106, 163–4 (Brennan J), 199–202 (Dawson J), 241–5 (McHugh J); Re Australian
Education Union; Ex parte Victoria (1995) 184 CLR 188, 228–33 (Mason CJ, Brennan, Deane,
Toohey, Gaudron and McHugh JJ).
21 Queensland Electricity Commission (1985) 159 CLR 192, 217 (Mason J); quoted with approval
in Re Australian Education Union; Ex parte Victoria (1995) 184 CLR 188, 231 (Mason CJ,
Brennan, Deane, Toohey, Gaudron and McHugh JJ) ('Australian Education Union Case').
22 Austin (2003) 195 ALR 321.
23 (1985) 159 CLR 192, 217 (Mason J), 235–6 (Brennan J), 247 (Deane J), 262 (Dawson J).

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