Intergovernmental Immunities PDF

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Intergovernmental Immunities This refers to the idea that the commonwealth and the states might (impliedly) be wholly or partly immune from each other’s laws. This might be seen as a constitutional requirement that the autonomy and integrity of the two tiers of government be maintained Amalgamated Society of Engineers v Adelaide Steamship Co Ltd (Engineers Case) The Engineers' Case arose out of a claim lodged by a union of engineers in the Commonwealth Court of Conciliation and Arbitration for an award relating to 844 employers across Australia. In Western Australia, the employers included three governmental employers. The question was whether a Commonwealth law made under the "conciliation and arbitration" power regarding industrial disputes, section 51(xxxv), could authorize the making of an award binding the three employers. The case came before the Full Court on a case stated under section 18 of the Judiciary Act. The joint majority judgment of the Court was written by Isaacs J. He was joined by Knox CJ, Rich & Starke JJ. Higgins J wrote a separate opinion but came to a similar conclusion. Gavan Duffy J dissented. The more the decisions are examined, and compared with each other and with the Constitution itself, the more evident it becomes that no clear principle can account for them. They are sometimes at variance with the natural meaning of the text of the Constitution; some are irreconcilable with others, and some are individually rested on reasons not founded on the words of the Constitution or on any recognized principle of the common law underlying the expressed terms of the Constitution, but on implication drawn from what is called the principle of 'necessity', that being itself referable to no more definite standard than the personal opinion of the Judge who declares it. The joint majority opinion of the Court reviewed the jurisprudence of the Griffith Court and declared. The judgment then returned to first principles on how the Constitution is to be interpreted. The use of American precedent was rejected in favour of applying the settled rules of construction that gave primacy to the text of the Constitution and anchored its interpretation to its express words. Some "reservations" were made about State prerogatives and special Commonwealth powers (like over taxation); the reservations eventually became subsumed within some general intergovernmental immunity rules to emerge as the Melbourne Corporation doctrine. The Court considered its earlier decision in D'Emden v Pedder, which had been the foundation case for the original intergovernmental immunities doctrine. It has been said that Engineers attacks the reasoning in D'Emden, but rationalises the conclusion. A later case

(Attorney-General for Queensland v Attorney-General for the Commonwealth (1915) 20 CLR 148) that applied D'Emden was attacked as resting on opinions "as to hopes and expectations respecting vague external conditions". The joint majority judgment then went on to establish that the Crown in its various capacities is bound by the Constitution. The power of the Commonwealth to bind the States was seen as an aspect of the general conclusion. Its reasoning invoked the notion of the one and indivisible Crown, which is no longer part of Australian jurisprudence, but that conclusion is capable of being reached without such a notion. Passages of the joint majority judgment discuss the paramountcy of Commonwealth law, which foreshadow the later expansion of Constitution s109 inconsistency doctrine in Clyde Engineering Co Ltd v Cowburn. The language of the D'Emden v Pedder non-interference principle lives on in the second ("rights impairment") test of inconsistency. The Melbourne Corporation Principle The engineers case said that the principle we apply to the commonwealth we apply to the states. So too, those judgements in the immediate wake of that case which considered intergovernmental immunity moved even-handedly from what the commonwealth could do to the state, to what the state could do to the commonwealth However in the case of Melbourne Corporation v Commonwealth these vauge notions were notions coalesced into a doctrine that sets limits on what the commonwealth could do to the states FACTS: During WWII the commonwealth bank wasgiven power to oversee the private banks and to control the supply of money and credit The Banking Act sought to make these arrangements permanent. The prime minister and treasurer proposed to compel the states and their authorities to bank with the commonwealth Section 48 of the act provided that ‘except with the consent in writing of the treasurer, a bank shall not conduct any banking business for any state.’ The Melbourne city council was notified and sought to have s48 struck down. The court on a 6:1 majority agreed that the section was invalid. The Melbourne Corporation principle is an implied limit on Commonwealth legislative power under the Constitution of Australia. This is due to the express federal nature of the governmental structure described by the Constitution in having a federation of states combine into one Commonwealth. The principle renders constitutionally invalid any Commonwealth law that is otherwise valid under a head of power in s51 or some other part of the Constitution if it: 1. Denies the existence or ability of a State to govern itself or the federal structure of the Commonwealth; and

2. Singles out States. A recent case of Austin v Commonwealth (2003) conflated the original 2 limbed test of the original case into an expanded 1st limb so that a commonwealth law that affects a state's ability to administer itself is constitutionally invalid. This constitutional protection is one of the few reliable protections in the Australian Constitution against legislative and executive power, the other main protection being the Chapter III Separation of Powers Doctrine. Victoria v Commonwealth (Payroll Tax Case) The Commonwealth passed the Payroll Tax Act, which imposed a 2.5% tax on all wages paid by an employer. It also applied to all state employers. The Act was challenged on the grounds that it breached the Melbourne Corporation principles limiting the extent to which the Commonwealth can burden states. The court held that the Act was a valid one under the 'Melbourne Corporation' two-limbed principle. The majority spoke about the implications that could be drawn from the constitution. This came from the fact that the constitution contemplates the existence of the states. A law that fundamentally restricts their exercise of essential functions would go against the implication of the continued existence of the states. Windeyer J notes that the increased entry of the Commonwealth in areas of concurrent federal and state power was foreseen early on, and the progressive increased fiscal power of the Commonwealth was indicative of this notion. The states in the process of Federation agreed willingly to become a single federal entity giving up some of their powers without gaining any new ones. The gradual centralisation of power in the Commonwealth grew from this process. This view is particularly persuasive in the environment after Engineers which swept away reserved State powers and the doctrine of intergovernmental immunity. Queensland Electricity Company v Commonwealth In 1985, unions imposed a 24hour blockade in queensland to protest against the legislations curtailing trade union rightsand bannig strikes by electrical workers By the Conciliation and Arbitration Act the commonwealth sought to establish special procedure fro expedited settlement of the dispute in the commonwealth conciliation and arbitration commission Section 6(1) of the act applied to the industrial dispute between the electrical trades union and certain authorities that was found to exist. The QLD Elec Comission was a party to the dispute In a 6:1 majority the act was found invalid dueto discrimination against the state,focusing on just that state not the others = second limb

Austin v Commonwealth Austin was a judge of the Supreme Court of New South Wales who was challenging a Commonwealth law which imposed a superannuation contributions surcharge on judges. The Commonwealth law was part of a wider scheme imposing a superannuation charge on higher income earners, equalising the tax burden on judges vis-a-vis other high income earners. The surcharge was not imposed on states directly as employers because it could have infringed section 114 of the constitution, which outlaws taxation of state property. If a person was a judge since before 1987, the charge was not imposed as the liability to pay the charge could have run to hundreds of thousands of dollars. The New South Wales government, in response, amended the charge system to lower the burden that would have to be paid. Gaudron, Gummow and Hayne JJ rejected the separate discrimination limb found in the Melbourne Corporation principle. In their view, if Melbourne Corporation is read carefully, it is more concerned with a state's ability to function i.e. the structural integrity limb of the principle was paramount. For a law to infringe the Melbourne Corporation principles it must ultimately infringe the state's structural integrity. While they reject the two-limbed principle, they do not offer an alternative, instead conflating the principles into a single principle of structural integrity. In applying the facts, the majority stressed the importance of judicial remuneration in attracting suitable judges and securing their independence. They found this tax effectively forced the states to adjust their remuneration in order to safeguard judicial standards i.e. increase judges pay. For this reason, they found the law impaired the states' ability to exercise their essential functions. In a separate judgment for the majority Gleeson CJ found the discrimination element of the Melbourne Corporation was part of a broader principle of structural integrity. Hence the two-limbed test in Melbourne Corporation is reduced to a one-limbed test. The Commonwealth's imposition of the charge forced states to alter their remuneration arrangements, which impaired their constitutional status and integrity. McHugh J was the only judge to endorse the two-limbed Melbourne Corporation principle. He thought the two-limbed test was well-settled and there was no need to alter it. On application of the first limb (discrimination) he found the Commonwealth law in singling out (and thus discriminating against) state judges placed a burden upon the states and was thus invalid. His reasoning thus implicitly links the two limbs of the test. Kirby J agreed with the majority's assessment that the Melbourne Corporation principle is actually reducible to a one-limbed test. However, on application of this one-limbed test, he found that the burden on states of having judges with higher tax liabilities (i.e. a high state remuneration burden) was not heavy enough to impair state functioning. The effect, he

argued, was marginal at best. Kirby J noted that the other judges exaggerated the burden on states, and were sensitive to issues of judicial pay. He also pointed out that judge's salaries are subject to a wide variety of taxes and charges, asking how this single charge could affect a state's capacity to carry out its essential functions. Thus, while he dissented on the outcome, Kirby J agreed with the majority on the law.

Overall, the court confirmed its interpretation of the Melbourne Corporation principle, that it is a one-limbed principle concerning the structural integrity of the states and their ability to exercise their functions.

CLARKE V COMMISSIONER OF TAXATION – PG1107...