7. INTERGOVERNMENTAL IMMUNITIES Flashcards
First q and second q to ask in this topic
- is this a valid law?
2. prohibition
what 2 principles did engineers reject?
- Doctrine of reserve state powers; and
2. Doctrine of implied immunity of government instrumentalities (as an interpretative doctrine)
what are the Melbourne Corporations Principles?
A. DISCRIMINATION LIMB: Cth legislation that discriminates against a State or against the States as States (ie the States as opposed to other entities) will be invalid
B. STRUCTURAL INTEGRITY LIMB (of the Melbourne corporations principles): Cth legislation will be invalid if it undermines the ability of the States to function as such, or undermines their ability to exercise essential functions.
facts and holding of melbourne corporations
FACTS
- Impugned legislation was s 48 of the Banking Act 1945 (Cth).
- It provided that a bank could not engage in business with a State government, or government authority, without the consent of the Federal Treasurer. (State govt authorities were singled out)
- Melbourne Corporation (council) was a local municipal authority in city of Melbourne that wanted to bank with a private bank, the National Bank of Australia.
- The Treasurer would not grant such permission, and urged Melbourne Corporation to switch its business of banking to the Cth Bank, which was then owned wholly by the Cth.
- The policy behind this legislation was the plan of the Labor government to nationalise the banks by requiring and forcing all State governments and their instrumentalities to do their banking with the federal government’s Commonwealth Bank.
- Melbourne Corporation sought to have s 48 declared invalid.
HELD: S48 was invalid: (per Latham CJ, Starke, Rich, Dixon and Williams JJ; with McTiernan J dissenting)
A. Latham CJ and Williams J: (not really relevant for our purposes)- this reps the old view that you don’t look at Dixon principles but rather do pure characterisation
- The legislation was invalid based purely on characterisation:
B. All the other majority judges, led by Dixon J, constituting the critical basis for the present position:
- even if this was held to be within power under the banking power, nevertheless would have found this invalid
- They found the legislation was in fact within the banking power.
- Therefore, their basis for finding it unconstitutional was on the basis of some implications from the const based on the existence of the States.
o The states were created by the const and therefore cth laws couldn’t undermine their ability to come in and function as a state or to treat them at a disadvantage just because they’re states
- This involved the resurrection, or salvaging, of aspects of the intergovernmental immunities doctrine rejected in Engineers Brilliance of Dixon here
- Dixon J did the most to salvage, from within Engineers, two key limitations or the legislative competence of the Cth vis-à-vis the States; although Rich and Starke JJ set the basis of the second limitation.
Why s 48 invalid?
- On the discrimination point: Singles out the State instrumentality for special disadvantage by restricting its banking activities, not so restricting other (non-State) entities.
- On the structural integrity point: by severely limiting their independence in banking (which is essentially financing), s 48 was severely impairing the capacity of the State to function as a government.
o Borrowing money is essential for state expenditure
Payroll Tax Case 1971: Interesting aside, consolidation, albeit near demise.
Facts + holding + principle
Principle: Consolidation of the Melbourne corp principles (only just)
FACTS: The Payroll Tax Act 1941 (Cth) imposed a 2.5% tax on all wages paid by an employer. “Employer” included the Crown in right of a State or any public authority constituted under any act of a state. The law provided a few exemptions to private employers, but not States, but otherwise applied to all.
HELD: Held valid by all judges, but note the difference basis in a very close decision
Majority: Menzies, Windeyer, Walsh and Gibbs JJ: it did not breach either limb of the Melbourne Corp principles, which they accepted as the relevant guiding principles.
Minority: Barwick CJ, McTiernan and Owen JJ:
- it was not invalid on the basis of a pure characterisation.
- linked into the position adopted by Latham CJ and Williams J in Melbourne Corp that it was always a case of characterisation, subject to accepted constitutional prohibitions as existing and rejecting the majority position in that case based on structural integrity and discrimination.
Queensland Electricity Commission v Commonwealth: (1985)
EG of which limb?
facts?
held?
FACTS
- industrial dispute between Qld Govt. and electrical unions
- (Cth) Commissioner accepted that a dispute did exist under the Conciliation and Arbitration Act.
- The Cth Parliament then enacted the Conciliation and Arbitration (Electrical Industry) Act 1985 (Cth) that applied specifically to this dispute
- 6(1) stated that the Act applied to this specific Qld dispute.
- 6(2) stated also that it would apply to other disputes between unions and a Queensland electrical authority into the future
- It also provided for specific powers and duties to the Arbitration Commission in relation to this particular dispute:
- S7 required the Commission to settle this dispute as expeditiously as possible (to give it all priority)
- S8(1) removed any discretion allowing the Commission to dismiss or refrain from hearing the matter the law said you must deal with this matter
- S 9(1) required that the matter be heard by a Full Bench as opposed to a single judge
HELD
- All judges found that elements of the legislation were discriminatory, against Queensland as a state, and even though the law was within the conciliation and arb power, it breached discrimination limb of the Melbourne Corp. principles.
very important qualification from Brennan and Deane JJ: rational discrimination this qualification has been accepted in subsequent cases
- TEST: if there was a rational basis for the discrimination (singling out the state/states), then a degree of discrimination was permissible if it was rational and reasonable in the circumstances of the case
Re Australian Education Union; Ex parte Victoria
eg of what?
facts?
held?
Structural integrity
FACTS:
Industrial Relations Act 1988 (Cth)
- s111(1)(g): the Cth Industrial Relations Commission could refrain from hearing or dismiss a matter on the basis that further proceedings were unnecessary or undesirable in the public interest.
- However, s111(1A) prohibited the Australian Industrial Relations Commission from exercising its power under 111(g) when the dispute in issue was a dispute from a State where the dispute could not be heard by a State arbitrator.
- Victoria was the only State in the Commonwealth that lacked a State arbitration system.
- Industrial dispute between Victorian Government and public servants.
- No state arb system and it goes to the cth and the cth must hear
On the discrimination point: No. because any discrimination that arose here was Purely accidental it just so happened that VIC, because of it’s own action that removed its state arb system, but accepted the rational discrimination point from Qld Electricity.
The Structural Integrity Point.
- There was not enough here re structural integrity point – cth awards applying to state public servants was not enough to prevent the states from functioning as such but the court provided clear guidelines about when there would be a breach of the structural integrity point in context of industrial relos
- Court identified two precise circumstances in which structural integrity point might be successful :
o Different rules apply when dealing with Ordinary public servants VS higher level public servants
o Higher level public servants = heads of public departments, senior exec people, senior lawyers in AGs department, judges etc
Per Re Australian Education Union; Ex parte Victoria, re ordinary public servants when will there be a breach of structural integrity of the state and the law will be invalid if Cth law purports to regulate these things and these things only:
- number and identity of the persons whom the State wishes to employ
- the term of their appointment
- number and identity of the persons whom the wishes to dismiss, with or w/o notice, on redundancy grounds
Re Australian Education Union; Ex parte Victoria- Higher level State employees Cth law may not determine or regulate:
- The number and identity of the persons whom it wishes to employ
- the terms and conditions of their engagement – it cannot interfere with the industrial relos with high level employees at all (unlike public servants
State Supreme Court Judges Superannuation Case
Principle: Critical Point: Collapse of the discrimination limb into the structural integrity limb.
Say: there is discrimination, therefore structural integrity undermined, therefore law is invalid
FACTS:
- The key aspect of the facts is that the Commonwealth legislation did effect the superannuation entitlements of State judges, especially as it was a form of tax which was imposed as a superannuation surcharge tax on superannuation payments they received – more tax paid by judges
- But, unlike other State public servants, State judges did not pay any contributions into a superannuation fund.
- Rather they have a State statutory entitlement to receive a pension from the State Consolidated Revenue Fund after they have served for at least 10 years and retire from judicial office. Therefore, the tax imposed on them was based on a notional surcharge contribution factor
- The cth is affecting their entitlements and conditions of employment
Held, by Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ, Kirby J dissenting, that the Imposition Act and the Assessment Act were invalid in their application to Austin J (Supreme Court Justice) on the ground that they placed a particular disability or burden on the operations and activities of the State – interfering with Ts&Cs
what is the scaffold for this topic?
- Brief intro sentence:
a. Following, Engineers, in Melb Corp, Dixon J sought to qualify the rejection of the implied immunity of intergovernmental immunity doctrine by putting two qualifications on it
i. state the 2 principles
ii. consolidated in Payroll Tax Case- not pure characterisation focus anymore - Is there potential discrimination? (as above)
a. the Cth cannot validly enact a law which discriminates against the government or agencies of the States or a State (as States), in form or effect.
b. If yes, is the discrimination rational?
i. if there was a rational basis for the discrimination (singling out the state/states), then a degree of discrimination was permissible if it was rational and reasonable in the circumstances of the case Queensland Electricity Commission
c. If no discrimination, no breach of the Melb. Corp. principles and leg = valid
d. If yes = discrimination = breach of structural integrity = invalid leg State Supreme Court Judges Superannuation Case - Is there a potential structural integrity issue? (as above)
a. That is, the Cth cannot validly enact a law of general application which fundamentally impedes the States from carrying out essential government functions, or which prevents the State from continuing to function as a government.
b. Remember different rules for ordinary vs high level public servants State Supreme Court Judges Superannuation Case
c. If yes= breach of Melb Corp Principles = invalid leg
d. If no = valid leg
