2 tiered system of government – legislative power shared by Commonwealth and States
Australian federalism modelled on US:
o Central & State governments
o Distribution of powers, with Federal powers limited
o Judicial determination of limits of power
o Federal supremacy of laws
o Rigid constitution
Influenced by Dicey & Bryce, saw constitutional supremacy as essential in a federal system
Preamble to the Constitution refers to Australia as an ‘indissoluble Federal Commonwealth’.
Federal power over the States: concurrent powers and inconsistency of laws
Concurrent powers listed in s51 - vests enumerated powers in the Commonwealth, many of which
are also enjoyed by States.
General residue of legislative power is then left to States: Attorney-General (Cth) v Colonial Sugar
Co Ltd (1913) 17 CLR 644 at 653–654.
Residue defined as what is left over after Fed legislative powers are given a wide and literal
Knox CJ, Isaacs, Rich and Starke JJ said:
“Sec 107 of the Constitution continues the previously existing powers of the Parliaments of the
States to legislate with respect to State exclusive powers and State powers which are concurrent with
Commonwealth powers; but does not reserve any power from the Commonwealth which falls fairly
within the explicit terms of an express grant in sec 51, as that grant is reasonably construed, unless
that reservation is explicitly stated.”
Principle of federal legislative supremacy reinforced by s109 - State laws are invalid to the extent of
their inconsistency with Federal laws.
Melbourne Corporation doctrine
Rejection of the doctrine of State reserved powers does not mean that the States are totally
subservient to the Commonwealth
“This principle does not mean that the States are in a position of subjects of the Commonwealth. The
Constitution is based upon and provides for the continued co-existence of Commonwealth and States
as separate Governments, each independent within its own sphere”
“Federal laws which “discriminate” against the States are not laws authorized by the Constitution.
Laws “discriminate” against the States if they single out the States for taxation or some other form of
control and they will also be invalid if they “unduly interfere” with the performance of what are
clearly State functions of government”
Rich J at 66
“There is no general implication in the framework of the Constitution that the Commonwealth is
restricted from exercising its defined constitutional powers to their fullest extent by a supposed
reservation to the States of an undefined field of reserved powers beyond the scope of
Commonwealth interference. But this is always subject to the provisions of the Commonwealth
Constitution itself. That Constitution expressly provides for the continued existence of the States.
Any action on the part of the Commonwealth, in purported exercise of its constitutional power,
which would prevent a State from continuing to exist and function as such is necessarily invalid
because inconsistent with the express provisions of the Constitution, and it is to be noted that all the
powers conferred by s 51 are conferred “subject to this Constitution”.
“Such action on the part of the Commonwealth may be invalid in two classes of case, one, where the
Commonwealth singles out the States or agencies to which they have delegated some of the normal
and essential functions of government, and imposes on them restrictions which prevent them from
performing those functions or impede them in doing so; another, where, although the States or their
essential agencies are not singled out, they are subjected to some provi-sion of general application,
which, in its application to them, would so prevent or impede them. Action of the former type would
be invalid because there is nothing in the Commonwealth Constitution to authorize such action by
Starke J at 74: In construing the Constitution “we may start from the proposition that neither Federal
nor State Governments may destroy the other nor curtail in any substantial manner the exercise of its
powers or obviously interfere with one another’s operations”
Dixon J at 79: Cth cannot burden the State’s execution of its constitutional powers. While the
Commonwealth could enact “a general law which governs all alike who come within the area of its
operation whether they are subjects of the Crown or the agents of the Crown in right of a State’, the
Commonwealth could not enact ‘a law which discriminates against States, or a law which places a
particular disability or burden upon an operation or activity of a State, and more especially upon the
execution of its constitutional powers”
The Commonwealth may not impose special burdens or disabilities on a State or States or destroy
or curtail the continued existence of the States or their capacity to function as governments.
Re Australian Education Union; Ex parte Victoria (1995) 184 CLR 188
Mason CJ, Brennan, Deane, Toohey, Gaudron and McHugh JJ at 231
“The limitation (recognised in the Melbourne Corporation case) consists of two 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”
This test was approved and applied by Brennan CJ, Toohey, Gaudron, McHugh and Gummow JJ in
Victoria v The Commonwealth (1996) 187 CLR 416 at 498.
Queensland Electricity Commission & Ors v The Commonwealth (1985) 159 CLR 192
Unless it is otherwise apparent from the nature of a Commonwealth legislative power or the language in
which it is conferred, a Commonwealth law will be invalid if it discriminates against the States or their
agencies (whether or not they represent the Crown or the State) in the sense that it imposes some special
burden or disability on them which is not imposed on persons generally.
Victoria v Commonwealth (1996) 187 CLR 416, Brennan CJ, Toohey, Gaudron, McHugh and
Held that the award prevented a State from exercising its ‘right to determine the number and identity of
the persons whom it wishes to employ, the term of appointment of such persons and, as well, the number
and identity of the persons whom it wishes to dismiss … on redundancy grounds’ and, in the case of
those employed at the higher levels of Government, the second limb of the prin-ciple precluded laws
which prevent the State from determining ‘the terms and conditions on which those persons shall be
Austin v The Commonwealth (2003) 215 CLR 195
Legislation disadvantaged State judges differently from other high income earners and federal judges.
Interfered with States for the remuneration of their judges, and recruitment and retention of judges to
perform an essential constitutional function of the State.
Concurrent & Exclusive powers
TWO types of legislative power: concurrent powers and exclusive powers.
Listed in s51 – enjoyed by C
State law can operate in field left open by Fed law – C concurrent powers do not automatically
reserve any topics: Pirrie v McFarlane (1925) 36 CLR 170, followed Engineers Case
Pirrie v McFarlane: P laid info charing M with driving on public highway without Vic license. M
member of Air Force and argued immune from State law as employed by C and doing C business at
time. s52 argued exclusive to C with respect to regulation of defence public servants.
o HC rejected: No Fed law immunising M from operation of State laws – so subject to State
laws and no inconsistency.
o Knox CJ at 184:
If Parliament choose, it can exempt them from the obligation to obey this provision of the
State law; but, in my opinion, it has not yet done so. No repugnant or inconsistent
Commonwealth legislation stands in the way of the State law on this subject, and such law
remains valid and binding in Victoria by virtue of sec. 107 of the Constitution”
Exclusive powers of the Commonwealth
C has exclusive power that gives it special immunity from operation of State laws.
These powers include:
s 52 (C has exclusive power to regulate its public service, the seat of government, and C public
s 90 (C has exclusive power to levy customs duties and excise duties: see further Chapter 14)
s 114 (C can enjoy exclusive power to regulate defence) and
s 115 (the States shall not coin money, making the currency power (s 51(xii) an exclusive power)).
Worthing v Rowell and Muston Pty Ltd (1970) 123 CLR 89
The leading case on s52 of the Constitution
Facts: Questioned whether State OHS law applied in a Royal Australian Air Force base, a C place.
“The Parliament shall, subject to this Constitution, have exclusive power to make laws for the peace,
order, and good government of the Commonwealth with respect to:
o the seat of government of the Commonwealth, and all places acquired by the Commonwealth
for public purposes;
o matters relating to any department of the public service the control of which is by this
Constitution transferred to the Executive Government of the Commonwealth;
o Other matters declared by this Constitution to be within the exclusive power of the
Barwick CJ, Menzies, Windeyer and Walsh JJ; McTiernan, Kitto and Owen JJ dissenting
Held: no. s52 gave the Commonwealth sole legislative authority in Commonwealth places,
excluding the legislative authority of the States in those places: at 103, 120, 131 and 139 respectively.
This means that a State law has no force in a place that is acquired by the Commonwealth.
Even where C gives up place, State cannot automatically take over: A-G (NSW) v Stocks and
Commonwealth Places (Application of Law) Act 1970
The effect of these cases has been reversed by Commonwealth law
s4 of the Commonwealth Places (Application of Laws) Act 1970 (Cth), entitled “Application of laws
in Commonwealth places”, reads (in part):
The provisions of the laws of a State as in force at a time (whether before or after the
commencement of this Act) apply, or shall be deemed to have applied, in accordance with their tenor,
at that time in and in relation to each place in that State that is or was a Commonwealth place at that
Subsection (1) of this section does not:
o have effect so as to impose any tax;
o have effect so as to confer any judicial power; or
o extend to the provisions of any law of a State in so far as it is not within the authority of the
Parliament to make those provisions applicable in or in relation to a Commonwealth place.
The purpose of the Act was to ensure that ordinary laws of the States, such as, for example, motor
traffic regulations, continue to apply in Common-wealth places in the States.
Federal powers that are, for all intents and purposes, exclusive to the Commonwealth
Language of some s51 powers indicate that power is exclusive to C.
s 51(iv) (‘Borrowing money on the public credit of the Commonwealth’);
s 51(xix) (‘Naturalization and aliens’);
s 51(xxx) (‘The relations of the Commonwealth with the islands of the Pacific’);
s 51(xxxi) (‘The acquisition of property on just terms from any State or person for any purpose in
respect of which the Parliament has power to make laws’);
s51 (xxxvi) (‘Matters in respect of which this Constitution makes provision until the Parliament
otherwise provides’); and
s 51 (xxxix) (‘Matters incidental to the execution of any power vested by this Constitution in the
Parliament or in either House thereof, or in the govern-ment of the Commonwealth, or in the Federal
Judicature, or in any department or officer of the Commonwealth’).
Federal powers with express or implied restrictions that let State have some exclusive powers
Eg. s51(i) – trade and commerce power, refers to t/c ‘with other countries and among the States’.
The sub-section does not confer a general power to regulate trade and commerce – cannot interfere
in intrastate trade.
BUT C may use some other power eg. s51(xx) corporations power to regulate intrastate trade of
State powers subject to Commonwealth consent/veto (and vice versa):
s112: State may levy import and export charges necessary for State inspection laws, but revenue is
for C to use and C may annul these inspection laws
s114: State shall not raise/maintain a navy or military force
s124: State can consent (or not) to increase, diminution, alteration to limits of State land and creation
of new State in State territory
ss51(xxxiii) (xxxiv): consent to C acquisition of railways and construction of railways.
State and Commonwealth assistance/cooperation:
o s120: State provide custody of offenders against C laws
o s119 and s51(vi) C must protect States against invasion and domestic violence
o s117: States may not discriminate against subjects of other States on basis of residence
o s118: States must give full faith/credit to public Acts, records and judicial proceedings of every State
s118: application of State laws in other States:
o s118: “Full faith and credit shall be given, throughout the Commonwealth to the laws, the public
Acts and records, and the judicial proceedings of every State” conflict between State laws?
o CL: to sue for wrong in another jurisdiction prove that relevant act/omission was wrongful under
the loci delecti (law of the place of the wrong) AND actionable in the forum: Phillips v Eyre.
o Breavington v Godleman: P recover damages in Vic over accident in NT. NT law exclude any
damages in action in Territory for loss of earnings/earning capacity. D argued s118 meant Vic court
had to apply NT law in matter.
HC: s118 applies to States and not Territories
Toohey: went no further.
Mason CJ, Brennan and Dawson JJ: narrow interpretation.
Wilson, Deane, Gaudron JJ: broad interpretation.
o Narrow view: McKain v Miller – majority. Dawson J:
s118 does not apply where there is a choice to be made between conflicting laws.
o Wider view: John Pfeiffer v Rogerson – full court.
Held: in intranational torts involving inter-State element, lexi loci deliciti applies.
Includes substance and procedure (limitation periods/damages) but NOT regulation of
mode/conduct of court proceedings.
References, cooperation and uniform legislation
s51(xxxvii) enables States to refer powers to C. eg. power over maintenance of post-nuptial children
and State juridiction over corporate law exercised by Fed Court after defunct cross-vesting scheme:
Re Wakim; Ex parte McNally (1999) 198 CLR 511
C and State pass complementary legislation or cooperative administrative arrangements eg. Financial
Agreement of 1927, public works schemes eg Snowy Mountains Hydro-Electric scheme.
The Queen v Hughes: unconstitutional for C Director of Public Pros to exercise State powers in
offences against State Corporations Law?
o Cross vesting of exec functions can be valid through cooperative State/Fed laws as long as
Fed P can point to relevant head of power to support the law concerned.
State cannot unilaterally vest functions in C officers, created by C law and powers invested by it: Re
Cram; Ex parte NSW Colliery Proprietors’ Association.
If C law gives power/authority to C officer to perform function under State law under cooperative
legislation, State law CANNOT grant some wider power/authority to that officer inconsistency
Chapter III of the Constitution and the States
Kable v Director of Public Prosecutions (1996) 189 CLR 51: K killed wife and threatened her
family whilst in jail. NSW P passed Act to give Supreme Court of NSW power to make
“preventative orders” to keep K in prison. K argued that: 1) law could not be for “peace, order and
good government of NSW”, 2) infringed basic CL rights, 3) inconsistent with separation of powers
in NSW Constitution.
o Gaudron J at 101, 103: Chapter III postulates an integrated Australian court system for the
exercise of the judicial power of the Commonwealth, with the High Court at its apex as a
court exercising appellate jurisdiction for the nation. States courts are, by s 77, part of this
system, which does not permit different grades or qualities of justice to operate as between
State and federal courts
o McHugh J at 110-111: The presence in the Constitution of covering cl 5, ss 51(xxiv), (xxv),
73, 77 and 118 indicates that a State court system, or at very least the existence of State
Supreme Courts, was contemplated by the framers of the Constitution
o McHugh J at 115: Neither the Commonwealth nor the States could legislate to undermine the
scheme set up by Ch III of the Constitution:
“Because the State courts are an integral and equal part of the judicial system set up by Ch
III, it also follows that no State or federal parliament can legislate in a way that might
undermine the role of those courts as repositories of federal judicial
power…neither…parliament…can invest functions in the Supreme Court of New South Wales
that are incompatible with the exercise of federal judicial power. Neither…can legislate in a
way that permits the Supreme Court while exercising federal judicial power to disregard the
rules of natural justice or to exercise legislative or executive power”
THUS: held unconstitutional as:
o Removed need for proof of guilt – along with ordinary protections in judicial process
o P cannot use court to execute legislature’s determination of K.
o No separation of powers in States Constitution, BUT may because State courts invested with
BUT Ch III limitation on State P power is limited.
o Fardon v Attorney-General (Q) (2004) 78 ALJR 1519: HC distinguished from Kable by
allowing Qld law to authorise Qld Supreme Court to incarcerate members of class of
Chapter IV and the States: ‘fiscal federalism’
C has significant source of taxation and revenue exercise national control over economic policy.
‘On the establishment of the Commonwealth, the collection and control of duties of customs and
excise, and the control of the payment of bounties, shall pass to the Executive Government of the
‘On the imposition of uniform duties of customs the power of the Parliament to impose duties of
customs and of excise, and to grant bounties on the production or export of goods, shall become
Excess revenues returned to States for specified period of time (transition from colonial to Federal)
‘During a period of ten years after the establishment of the Commonwealth and thereafter until
the Parliament otherwise provides, of the net revenue of the Commonwealth from duties of
customs and of excise not more than one-fourth shall be applied annually by the Commonwealth
towards its expenditure.
The balance shall, in accordance with this Constitution, be paid to the several States, or applied
towards the payment of interest on debts of the several States taken over by the Commonwealth.’
Until the imposition of uniform duties of custom–
The Commonwealth shall credit to each State the revenues collected therein by the
The Commonwealth shall debit to each State—
The expenditure therein of the Commonwealth incurred solely for the maintenance or
continuance, as at the time of transfer, of any department transferred from the State to the
The proportion of the State, according to the number of its people, in the other expenditure of the
The Commonwealth shall pay to each State month by month the balance (if any) in favour of the
During the first five years after the imposition of uniform duties of customs, and thereafter until
the Parliament otherwise provides--
The duties of customs chargeable on goods imported into a State and afterwards passing into
another State for consumption, and the duties of excise paid on goods produced or manufactured
in a State and afterwards passing into another State for consumption, shall be taken to have been
collected not in the former but in the latter State:
Subject to the last subsection, the Commonwealth shall credit revenue, debit expenditure, and
pay balances to the several States as prescribed for the period preceding the imposition of
uniform duties of customs.
AFTER set period: C has power to grant financial assistance “to any State on such terms and
conditions as the Parliament thinks”
‘During a period of ten years after the establishment of the Commonwealth and thereafter until
the Parliament otherwise provides, the Parliament may grant financial assistance to any State on
such terms and conditions as the Parliament thinks fit.’
Protection against C tax power - must not discriminate
Section 51(ii) - discrimination
‘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 Taxation; but so as not to
discriminate between States or parts of States’
Section 99 - preferences
‘The Commonwealth shall not, by any law or regulation of trade, commerce, or revenue, give
preference to one State or any part thereof over another State or any part thereof.’
Must be tax laws
Fed P may not include provisions dealing with subject matter other than the imposition of taxation in
tax laws: s 55.
‘Laws imposing taxation shall deal only with the imposition of taxation, and any provision therein
dealing with any other matter shall be of no effect.’
Sections 51(ii) & 99 + power of the Senate to withhold its consent to parliamentary bills (s 53) and s
55 protect State interests in matters of federal tax policy
Section 114: also, section 114 prohibits the Commonwealth from taxing State property
‘A State shall not, without the consent of the Parliament of the Commonwealth, raise or maintain
any naval or military force, or impose any tax on property of any kind belonging to the
Commonwealth, nor shall the Commonwealth impose any tax on property of any kind belonging to a
Taxing power history
History: colonial anxiety about taxing power and spending obligations of C is well founded. C
dominance in revenue raising (Engineer’s case).
Commonwealth’s Uniform Tax scheme covered the field in the area of income tax increasingly
significant source of revenue was closed off from States.
Uniform Tax Cases
Federal legislative scheme – to secure C with exclusive power to levy income taxation.
1. Rate of income tax made it politically impossible for States to levy concurrent income tax
2. Made grants to States on condition that they do not levy income tax.
3. Taxpayers must pay Fed tax before State.
4. Transferred apparatus of State income tax admin to C.
Challenged the laws ‘form a single legislative scheme the object, substance and effect of which is
to prevent the States of the Commonwealth from exercising their respective constitutional rights and
powers to levy and collect income tax and to make it impossible for such States to levy and collect
HC: upheld laws
Post-Melbourne Corporation challenge - failed (Victoria v Commonwealth (the Second Uniform Tax
case) (1957) 99 CLR 575). 3rd law was struck down – previously a temporary measure for war.
LOOK AT SLIDES.
Chapter V: “The States”:
s106: “Constitution of each State of the C shall, subject to this Constitution, continue as at the
establishment of the Commonwealth, or as at the admission or establishment of the State, as the case
may be, until altered in accordance with the Constitution of the State”
Guarantees existence of States and their constitutional powers: Vic v Commonwealth.
Protect State’s power over appropriation (Aus Railways Union v Victorian Railway Commissioners),
State courts (Re Tracey; Ex parte Ryan), and any manner/form provisions relating to alteration of
State Constitutions (WA v Wilsmore).
“Subject to this Constitution” – meaning?
o States subordinate to C to extent that Fed C expressly modifies State Constitutions; extends
protection beyond Melbourne Corp principle?: A-G (NSW) v Ray
o BUT recent support for – protection only extends to necessary function for government of
States, not ALL functions: Re Australia Education Union; Ex parte Victoria.
Chapter VI: Constitution and the States:
s123: power to withhold consent to attempts to change territorial boundaries
s124: States can agree to formation of new States
s128: to change Constitution and “indissoluble Fed C” it creates necessary to receive assent of
majority of people in majority of States.
Legislative power of the States: peace, welfare and good government
States enjoy general legislative power for “peace, welfare and good government”
Constitution Act 1902 (NSW), s 5:
The Legislature shall, subject to the provisions of the Commonwealth of Australia Constitution Act,
have power to make laws for the peace, welfare, and good government of New South Wales in all
Provided that all Bills for appropriating any part of the public revenue, or for imposing any new rate,
tax or impost, shall originate in the Legislative Assembly.
Union Steamship Co of Australia Pty Ltd v King (1988) 166 CLR 1
Within the limits of the grant, power to make laws for their peace, order and good government
conferred by the Imperial Parliament on the Australian colonial legislatures was as ample and
plenary as that possessed by the Imperial Parliament and had extraterritorial operation.
o Equated “peace, welfare…” as meaning plenary power – not subject to limitations or
Extraterritorial legislative power
Section 2(1) of the Australia Act 1986 (Cth) states:
2. Legislative powers of Parliaments of States
It is hereby declared and enacted that the legislative powers of the Parlia-ment of each State include
full power to make laws for the peace, order and good government of that State that have extra-
Pearce v Florenca (1976) 135 CLR 507: Gibbs J’s test:
o “legislation should be held valid if there is any real connexion – even a remote or general
connexion – between the subject matter of the legislation and the State”
Extent that State laws encroach on matters dealt with in other State legislation:
Mobil Oil Australia v Victoria: M challenged Vic law authorising conduct of group proceedings; law
wide enough to contemplate proceedings in respect to wrongs occurring in other States.
o M argued implication of Constitution that prohibits extraterritorial State law to affect
relationship between another State/Territory and its residents or determine legal
consequences of actions in another State/Territory.
o Held: rejected. Idea that all transactions/relationships can be located in ONE State/Territory
is unrealistic: Gleeson CJ.
Limits on State extraterritorial power:
Welker v Hewett: NSW impose penalty on director/board member/manager of company owning
commercial wehicles which fails to pay road registration fees. A resident of SA and owned truck
unregistered in NSW.
o Held: insufficient connection between director and road usage in other State.
o Kitto J: “a connexion between the person upon whom the liability is imposed and the
State…in the sense of a personal implication or involvement in that fact, circumstance or
Cox v Tomat: law that directors pay if vehicle used at time when relevant person was director. T
director, owned truck, which stopped in WA and charged.
o Applied Welker v Hewett – insufficient connection.
o Barwick CJ: State legislative power does not reach beyond those who are in a substantial
sense participant sin that event…necessarily involves the director in participation in the
LATER: unlikely to be decided same way due to broader view (Pearce v Florenca). Also regulation
of company directors under Federal law – no chance of consideration in future cases.
Extent of State extraterritorial power:
Once connection established (Pearce v Florenca) State has plenary power with respect to matter
Broken Hill South v Commissioner of Taxation (NSW): NSW law provide interest earned on money
secured by mortgage of NSW property is source in the State and subject to State income tax. Interest
paid outside NSW on NSW property subject to tax?
o HC: sufficient connection.
o Dixon J: “it is within competence of the State legislature to make any fact…the occasion of
the imposition upon any person concerned…to taxation or of any other liability….to base the
imposition of liability on no more than the relation of the person to the territory.
o If a connection exists, it is for legislature to decide how far it should go in exercise of its
o No importance that liability imposed is altogether disproportionate to the territorial
States parliamentary sovereignty.
The extent of State power to regulate the Commonwealth
State laws can ‘affect’ the Commonwealth in its ordinary capacities — that is, when it engages in
transactions as an ordinary legal person (for example, as a lessor of property): Commonwealth v
Bogle (1953) 89 CLR 229
BUT cannot restrict capacity of C to exercise its executive power – ie. power of the Commonwealth,
its servants or agents to execute C laws.
Re Richard Foreman and Sons Pty Ltd; Uther v Federal Commissioner of Taxation (Uther’s case)
(1947) 74 CLR 508 Latham C.J., Rich, Starke and Williams JJ.
That it is within the constitutional competence of the Parliament of New South Wales, in legislation
relating to the winding up of companies, to restrict or abolish the prerogative right of the Crown in
right of the Commonwealth to payment of debts due to it in priority to all other debts of equal degree
Dixon J (dissenting at 528–529)
The States may not restrict the capacity of the Commonwealth to exercise its executive power —
that is, the power of the Commonwealth, its servants or agents to execute the laws of the
The executive power of the Commonwealth “is a matter lying completely outside State power … to
define or regulate the rights or privileges, duties or disabilities, of the Commonwealth in relation to
subjects of the Crown is not a matter for the States. General laws made by a State may affix legal
consequences to (a) given description of transaction and the Commonwealth, if it enters such a
transaction, may be bound by the rule laid down … But these applications of State law, although
they may perhaps be a source of confusion, stand altogether apart from the regulation of the legal
situation which the Commonwealth as a government, shall occupy with reference to private rights”
“A federal system is necessarily a dual system. In a dual political system you do not expect to find
either government legislating for the other. But supremacy, where it exists, belongs to the
Commonwealth and not to the States”
Approved in Commonwealth v Cigamatic Ltd (in liq) (1962) 108 CLR 372, Dixon CJ:
“it seems to me now as it seemed to me then to imply a fundamental proposition about the power of
legislatures of the States which ought not to be entertained. The proposition that is implied is that an
exercise of State legislative power may directly derogate from the rights of the Commonwealth with
respect to its people. It is a proposition which must go deep in the nature and operation of a federal
system … to treat those rights as subject to destruction or modification or qualification by the
legislature of a State must mean that under the Constitution there resides in a State or States a
legislative power to control legal rights and duties between the Commonwealth and its people … I
cannot see how it could be thought that the State legislative power could directly deprive the
Commonwealth of the priority to which it is entitled under the law derived from the prerogative.
Believing, as I do, that the doctrine thus involve is a fundamental error in a constitutional principle
that spreads far beyond the mere preference of debts owing to the Commonwealth, I do not think we
should treat Uther’s Case as a decisive authority upon that question which we should regard as
binding”: at 377–378.
Re Residential Tenancies Tribunal of New South Wales & Ors; Ex parte Defence Housing Authority
(1996) 190 CLR 410, Dawson, Toohey and Gaudron JJ ag- Brennan CJ, McHugh and Gummow JJ
o In Cigamatic it was held that a State legislature had no power to impair the capacities of the
Commonwealth executive, but at the same time it was recog-nised that the Commonwealth
might be regulated by State laws of general application in those activities which it carried on
in common with other citi-zens. Dixon J had drawn the same distinction in FCT v Official
Liquidator of EO Farley Ltd: at 439.
o Both in Uther and Cigamatic a distinction is drawn between State laws affecting
Commonwealth executive capacities and State laws of general application regulating
activities carried on by the Crown in the exercise of those capacities in the same manner as
its subjects: at 442
o (However there) is nothing in the principle recognised in Melbourne Corp v The
Commonwealth or in any extrapolation of those principles to be found in the judgment of
Dixon J in Uther or in the reasons of the majority in Cigamatic which would suggest that the
Crown or its agents enjoy any special immunity from the operation of laws of general
application, State or federal. Indeed, the contrary is affirmed. The rule of law requires such a
result: at 443-444.
o Whilst the principle that executive power must be exercised in accordance with the law
applies to both Commonwealth and State government, the Commonwealth enjoys a
paramount position within its areas of legislative competence because of s 109 of the
Constitution: at 444.
Section 64 of the Judiciary Act
“In any suit to which the Commonwealth or a State is a party, the rights of the parties shall as nearly as
possible be the same, and judgment may be given and costs awarded on either side, as in a suit between
subject and subject.”
Tries reversing Cigamatic principle, subjecting the Commonwealth to the legislative authority of the
States: Maguire v Simpson (1977).
Territories created by surrender of territory by States and acceptance by Commonwealth (s111).
122. Government of territories – Territories Power
The Parliament may make laws for the government of any territory surrendered by any State to and
accepted by the Commonwealth, or of any territory placed by the Queen under the authority of and
accepted by the Commonwealth, or otherwise acquired by the Commonwealth, and may allow the
representation of such territory in either House of the Parliament to the extent and on terms which it
Fed P has constitutional power over its territories and can override any Territory laws.
Spratt v Hermes: “power is not only plenary but is unlimited by reference to subject matter. It is a
complete power to make laws for the peace, order and good government of the territory”
Territories power (s122) enables the Commonwealth to set up self-governing Territories:
Berwick Ltd v Gray (1976) 133 CLR 603: power is wide enough to enable passing of laws for direct
admin of Territory by Aus Gov without separate fiscus, BUT also wide enough to enable P to endow
Territory with separate political, representative and admin institution (control of its own fiscus).
Legislative assemblies of NT and ACT have plenary legislative power to make laws for “peace order
and good government of the Territory: NT (Self-Government) Act 1978 s6, ACT (Self-Gov) Act
(a) Once a sufficient connexion is shown to exist between a law and a territory the power conferred by s.
122 is a plenary power and is not subject to any limitation that any moneys raised by the law should be
expended exclusively for the purposes of that territory.
(b) Section 51 (ii.) applies to external territories in general and in particular to Norfolk Island which in
view of its history is to be regarded as part of the Commonwealth.
Territories power (s122) overrides self-governing Territories
Although Territories have self-gov, C can use Territories power to override Territory laws.
Northern Land Council v Commonwealth (1986) 161 CLR 1: argued that C did not have power to enact
legislation in NT after Self-Government Act.
Rejected argument – C can override Territory legislation at any time.
If a statute operates within a field of legislative power conferred on the Parliament, it is immaterial
that its operation depends on a statutory fiction.
Such a law is clearly supported by the power to make laws for the government of territories (s 122 of
the Constitution), for that is a plenary power "unlimited and unqualified in point of subject matter"
Laws supported by s 122 may have extraterritorial operation
Lamshed v Lake (1958) 99 CLR 132: Fed leg that trade, commerce and intercourse between Territory
and States was free. Lamshed argued that laws under s122 could not have operation outside of Territory
Dixon CJ, with whom Webb, Kitto and Taylor JJ agreed (McTiernan and Williams JJ dissented) at
141: “It is an interpretation of s 122 which I wholly reject. To my mind s 122 is a power given to the
National Parliament of Australia as such to make laws “for”, that is to say, “with respect to”, the
government of the Territory … once the law is shown to be relevant to that subject matter it operates
as a binding law of the Commonwealth wherever territorially the authority of the Commonwealth
Laws enacted by C via s122 power are laws of the C.
The different approaches: a plenary power?
Issue: does Federal constitutional provision limit the scope of the Territories power?
Teori Tau v The Commonwealth (1969) 119 CLR 564: P challenged C legislation supported by s122,
which made provision for compulsory acquisition of property. Argued that it must be on just terms
under s51 (xxxi).
Barwick CJ, for a unanimous High Court, said:
“Section 122 of the Constitution of the Commonwealth of Australia is the source of power to make
laws for the government of the territories of the Commonwealth. In terms, it is general and
unqualified. It is apt to confer, amongst other things, a power to make laws for the compulsory
acquisition of property …
While the Constitution must be read as a whole and as a consequence, s 122 be subject to other
appropriate provisions of it as, for example, s 116, we have no doubt whatever that the power to
make laws providing for the acquisition of property in the territory of the Commonwealth is not
limited to the making of laws which provide just terms of acquisition.
Power is plenary and no limited by s51 (xxxi)
Territory self-government legislation extends the protection afforded to the States by s 51(xxxi) to
the Territories, and reverse the effect of Teori Tau v The Commonwealth (1969) 119 CLR 564:
Northern Territory (Self-Government) Act 1978 (Cth) s 50; Australian Capital Territory (Self-
Government) Act 1988 (Cth) s 23(1)(a).
Spratt v Hermes (1965) 114 CLR 226:
Section 122 gives to the Parliament legislative power of a different order to those given by s 51.
That power is not only plenary but is unlimited by refer-ence to subject matter. It is a complete
power to make laws for the peace, order and good government of the territory — an expression
condensed in s 122 to “for the government of the Territory”.
Not limited by s51 subject matters.
Newcrest Mining (WA) Ltd v Commonwealth (1997) 190 CLR 513
Looked at difference between State and Territory relationship with Commonwealth
The territories power (s 122) stands in a separate chapter (Chapter VI), outside the chapter
containing the provisions which express the distribution of powers between the
Commonwealth and the States (Ch 1, Pt V): Newcrest Mining (WA) Ltd v Commonwealth
(1997) 190 CLR 513 at 535 per Brennan CJ, at 550-551 per Dawson J, at 577 per McHugh J.
McHugh: Territory power is unqualified unlike C powers (in s51) – not subject to Con
provisions and confined in subject matter to “in respect to”
Gaudron, Gummow, Kirby: Teori Tau v The Commonwealth should be overturned. s122
should NOT be interpreted as disjoined from rest of C.
WA v Ward: indicates trend towards thinking of Lamshed v Lake – that laws enacted by C under
s122 ARE “laws of the C” and thus subject to its provisions.
To what extent is the Territories power limited by other provi-sions in the Constitution?
R v Bernasconi – B charged in Central Court of Papua, a territory of Commonwealth. Appealed to
HC that conviction was wrongful due to constitutional guarantee of trial by jury s80.
o Held: Ch III (s80) “limited in its application to the exercise of the judicial power of the C in
respect of those functions of gov as to which it stands in the place of the states and has no
application to territories”.
Spratt v Hermes: Territory courts are federal courts for Ch III? And thus judicial tenure of s72?
o Barwick CJ: law made under s122 would be a law of the C and thus Ch III would apply.
o Cast doubt upon Bernasconi authority.
Capital Duplicators Pty Ltd v Australian Capital Territory (No 1) (1992) 177 CLR 248
o Approved Spratt v Hermes – s 122 limited by s90 so C’s power to levy excise duties were
exclusive to States and Territories.
Brennan, Deane and Toohey JJ at 272:
“the scope of s 122 may be qualified by other provisions in the Constitution. Although the
territories power has been said to be “a disparate non-federal matter” (Attorney-General (Cth) v
The Queen  AC 288 at 320) it is necessary to adopt “an interpretation which will treat the
Constitution as one coherent instrument for the government of the federation, and not as two
constitutions, one for the federation and the other for the territories” (Lamshed v Lake (1958) 99
CLR 132 at 154 per Kitto J).
Chapter III and the Territories
R v Bernasconi (1915) 19 CLR 629: Ch III does not apply to Territories.
Issacs J: Territories not part of Commonwealth nor were they fused with it – but annexed and
subordinate to it.
Griffith CJ: Ch III limited in its application….
Bernasconi broad rule led to:
Porter v The King; Ex parte Yee: C cannot give appellate jurisdiction to HC from Territory court
Mitchell v Barker: Special Magistrate of NT not Federal court
Waters v The C: HC did not enjoy original jurisdiction in Territory matters under s 75 of C
Re Governor, Goulburn Correctional Centre; Ex parte Eastman (1999) 200 CLR 322
Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ, Kirby J dissenting
s72 of the Constitution had no application to the Supreme Court of the Territory because Court
was not a court "created by the Parliament" within s72
Gleeson CJ, McHugh J and Callinan J
That the Court was established pursuant to laws made under s 122
The courts which the Parliament may create pursuant to s 71 of the Constitution were not courts
upon which the Parliament may confer federal jurisdiction but courts upon which the Parliament
may confer jurisdiction to be exercised throughout the Commonwealth in all or any of the
matters specified in ss 75 and 76 of the Constitution; and that a court, such as the Supreme Court
of the Territory, established or sustained pursuant to s 122 of the Constitution, was not such a
Gummow & Hayne JJ
The Supreme Court of the Territory was a court created by a law of the Legislative Assembly of
the Territory, not by a law of the Parliament.
BUT did not say that Ch III was wholly inapplicable.
Held: Ch III applies to Territories generally.
North Australian Aboriginal Legal Aid Service v Bradley (2004) 78 ALJR 922
A court of the Northern Territory may exercise the judicial power of the Commonwealth pursuant to
investment by laws made by the Commonwealth Parliament: at .
It is implicit in the terms of Ch III of the Constitution, and necessary for the preservation of that
structure, that a court capable of exercising the judicial power of the Commonwealth be and appear
to be an independent and impartial tribunal: at .
The requirement of continued attention to the preservation of adequate remuneration of magistrates,
as imposed on the Administrator by s 6 of the Magistrates Act, and enforceable in the Supreme
Court of the Northern Territory, is apt to defend the interests of judicial independence and
impartiality informing that legislation: at .
Relationship between s122 and s52(i) – public places.
Commonwealth enjoys plenary power over Territories and exclusive power with respect to
Commonwealth “public places”: s 52(i).
Svikart v Steward (1994) – Stewart charged under NT law, occurring on RAAF (C place).
Held: s52(i) does NOT apply to C placed in NT.
Other limits on legislative power
Constitutional guarantee of freedom of interstate trade, commerce and intercourse among States: s92
o Has territorial application in NT and ACT: Northern Territory (Self-Government) Act 1978
(Cth), s 49 (see ie. AMS v AIF (1999) 199 CLR 160) and Australian Capital Territory (Self-
Government) Act 1988 (Cth), s 69, respectively.
Commonwealth power to compulsorily acquire property also
o Applies to the Territories, guar-anteeing just terms in the event of an acquisition under s
51(xxxi): Northern Territory (Self-Government) Act 1978 (Cth), s 50; Australian Capital
Terri-tory (Self-Government) Act 1988 (Cth), s 23(1)(a).
ACT - excluded from power to make laws to certain matters:
o Provision of Australian Fed Police of police services in relation to T
o Classification of materials for censorship
o Laws with respect to company law and securities
o Military forces
o Coining of money
Implied freedom of communication restricts the legislative power of the Territories: Lange v
Australian Broadcasting Corporation (1997) 189 CLR 520 at 567.
Implied freedom of movement/association: differing views: Kruger v The Commonwealth.
o Dawson J: rejected existence of freedoms and application to T
o Toohey and Gaudron JJ: recognized and applied.
o McHugh: existed but did not apply.