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WK 5.2

17/8/00
External Affairs ctd

The only relevant issue today from Koowarta is whether RDA Act was valid without treaty (to which 3 judges said ‘yes’).

Tasmanian Dam Case (1983)

This case resolved the issue of treaty implementation.
There were 3 issues:

whether there is any subj matter limitation on Cth’s treaty implementation pwr (ie, whether Cth could implement all treaties or only those dealing with external affairs). It was held that Cth could potentially implement all treaties subj to 1½ limitations. So, subj to Cth prohibition, Cth can implement all treaties.
dealt with the test of treaty implementation – this is the main prob Cth faces ( the issue is not whether it can but whether has it done so).
whether treaty implementation is only talking about implementing obligations – answer is ‘no’.

The 1st issue was dealt with by Koowarta.
HCA is not technically bound by its own decision but if it does not give leave to challenge it or re-examine it, it will follow it.
What did Koowarta stand for? HCA said it stood for representing the view of Stephen J – narrowest view of maj decision (?).
Minority in Dam (Gibbs CJ, Wilson & Dawson JJ) hypothetically took the view of Stephen J but thought it was too loose & decided Act was even invalid on Stephen J’s view.
Mason J notionally took Stephen J’s view & then demolished it & held Act was valid even if use Stephen J. Maj upheld s 9(1)(h).

Federal balance doctrine was also dealt with.
Mason J, adopting O’Connor J’s view in Jumbunna Coal Mine (1908), said you should lean to broad view.
Gibbs CJ said to keep federal balance, you should lean toward narrow view. He says that s 51(xxix) is inherently ambiguous & when interpreting it you should read it in context (that is unexceptionable) & not give it such an interpretation so as to render rest of Const unnecessary. If Cth can implement all treaties, it means Cth could potentially occupy a very large field (p 306.6). Therefore, to preserve federal balance, adopt a narrow interpretation.
Dawson J said external affairs is a broad pwr, & for treaty implementation, treaty must deal with external affairs.

Majority in Dam (Mason, Murphy, Brennan & Deane JJ) adopted broad view (4:3), exemplified by Mason J. Mason J looks to Stephen J because seen as binding notionally, but sees it as too elusive & that there is no acceptable standard to determine whether it is of “international concern” (see pp 300-1).
For Mason J, “international concern” is established by entry into treaty (“The existence of international character or international concern is established by entry by Aust into the convention or treaty” p 301).

Gibbs CJ:
Adopted narrow test; would want more precise test that Stephen J but it does not matter because there is no “international concern” here (p 307.8).

Deane J:
It is Deane J’s test that has been adopted. Richardson (1988) established this as the appropriate test.
“The law must be capable of being reasonably considered to be appropriate & adapted to achieving what is said to impress it with the character of a law with respect to external affairs” (p 312) – ie, there is a ‘margin of appreciation’. Ct is asking whether Parl could reasonably have believed the law to be appropriate & adapted to … [reasonable, appropriate, adapted test with a margin of appreciation].
This is a more liberal test but it was narrow because Deane J held all provs of s 9(1) invalid except (h), whilst Mason J said all of those were valid.
Deane J said his test needed to be looked at with the issue of “reasonable proportionality” (for a law to reasonably be considered to be appropriate & adapted to achieving what is said to provide it with the ‘external affairs’ character, there needs to be a reasonable proportionality betw’n the designated purpose or object & the means which the law embodies for achieving or procuring it).

Summary: in later cases like Richardson, judges said that ct majority had adopted Deane J’s test with its ‘margin of appreciation’.

The 3rd issue concerned whether treaty implementation is only talking about implementing obligations.
When you undertake obligations, you should honour them.
Tasmania said you need obligations, & argued that this (p 296) is not & therefore cannot implement them – this arg failed by 4:3.
In Richardson, Brennan J says that in Dam he argued that treaty implementation refers to benefits & not just obligations.
Maj in Dam said there is no need for obligations (Mason J on 303.2 & 304.2/5, Murphy J on 309.1, Deane J) – ie, external affairs pwr in relation to international agreements was not confined to fulfilment of obligations. Brennan J (in maj) said he did not need to decide issue of obligation because there was one here (treaty was obligatory).
Gibbs CJ, Wilson & Dawson JJ said you do need obligation & there is not one here.

Summary of Tasmanian Dam Case

Can Cth implement treaties on potentially any subj matter? Yes.
What is the test of implementation? Deane J’s statement with its margin of appreciation.
Treaty implementation is not just confined to obligations, but can also incl benefits.

Richardson v Forestry Commission (1988)

area of Tasmania that Cth wanted to know if had important World Heritage status, & therefore, set up a royal commission to check this.
pending the outcome of commission’s inquiry, Cth imposed a regime on that area prohibiting desecration (prevent logging in interim period of 1 yr).
RC said only part was World Heritage.
q in meantime was whether this law (temporary 1 yr moratorium) was valid.
HCA said Act was valid – similar leg’n, same treaty.

Whether you could have restrictions imposed on anticipated obligations of treaty implementation?
Mason CJ & Brennan J said ‘yes’ “if reasonably apprehended obligations”.

test of implementation:
HCA (all members) indicated that ‘margin of appreciation’ test of Deane J in Dam was appropriate.

Majority: leg’n aimed at stopping logging pending result; upheld leg’n & said external affairs pwr extended to “support a law calculated to discharge not only Aust’s known obligs but also Aust’s reasonably apprehended obligs”.
Deane & Gaudron JJ, who dissented, said yes leg’n was aimed at stopping logging pending result but if you analyse leg’n, it was disproportionate (there was a lack in ‘reasonable proportionality’ betw’n prohibitions & designated obj) – could not lift up a leaf without breaching Act (too extreme).

Industrial Relations Act Case (1996)

complex IRA.
4 points come out of this case:

implementation: HCA again affirms Deane J’s test with its margin of appreciation (p 314.2, 315.1) – “To be a law with respect to ‘external affairs’, the law must be reasonably capable of being considered appropriate & adapted to implementing the treaty”.

Only purposive pwr is defence pwr [s 51(vi)]. Dawson J says that external affairs is not a purposive pwr & so you cannot use ‘reasonable proportionality’.

Nobody asserts that s 51(xxix) is a purposive pwr but the treaty implementation aspect of it is a purposive pwr & therefore, as Deane J says, it is appropriate to use ‘reasonable proportionality’ (see p 312.6, 289.9, 316.3/5).

HCA says: apply ‘margin of appreciation’ test & do not worry about proportionality.

Winterton says: treaty implementation is purposive & therefore it is wise to employ ‘reasonable proportionality’.

partial implementation: almost never the case that every prov of treaty is to be implemented (does not even have to all be in 1 Act).

Deane J in Dam distinguishes betw’n partial implementation & inconsistent implementation. If you implement benefit & not detriment (in a dependency sit’n), it is inconsistent implementation. If you do X & Y, but subj to A & B, this is also inconsistent. But implementing some of obligs & not all is OK.

aspirations: they pick up & adopt a passage from Zines (p 291) & say there has to be some sort of specificity in treaty (p 313.6).

recommendations:

UN General Assembly Res’n is not a treaty & not binding in international law. What about implementation of statements (not treaty & not binding)? There is no answer. Evatt & McTiernan JJ in Burgess say ‘yes’. Murphy & Deane JJ in Dam say ‘could be’. Strongest case is IRA which relied on Burgess (p 317 Note 5 & Zines p 318.9) in relation to ILO conventions & recommendations. HCA said that ILO recommendations implementing a treaty that Cth has adopted is OK.

UN convention is a treaty; ILO convention is a treaty; ILO recommendation implementing a treaty adopted by Cth is OK. Recommendations per se have not yet been answered.

Geographical externality

Polyukhovich (1991) p 275, 735

In 1988 Cth amended War Crimes Act to provide for trial of Austs who had committed war crimes in Europe during WWII.
Was this valid under external affairs pwr?
It was held that external affairs pwr applied & leg’n valid because war crimes in Europe were matters geographically external to Aust.
External affairs pwr extends to “places, persons, matters or things physically external to Aust” (Dawson J).
2 judges (Brennan & Toohey JJ) disagreed. The mere fact that was something geographically external was not enough > need also a sufficient interest. Toohey J said there was an interest (war Aust was involved in & war criminal was resident of Aust). Later in IRA, they agreed with other judges & said it was OK.
5:2 > mere fact that something was geographically external to Aust is enough to fall into ambit of external affairs pwr. Toohey J was also liberal but added interest.

Horta v Cth (1994)

Aust & Indonesia entered into treaty agreement. Aust’s implementation of Timor Gap Treaty was challenged by Horta on basis that treaty was contrary to international law.
This case confirms:

Cth can regulate on matters geographically external to Aust & Timor Treaty was such (p 276.8).
International law is not a constitutional limitation. Const can breach international law (p 277.4).

Relationship betw’n s 51(x) & s 51(xxix) – see Zines p 25

Bonser v La Macchia (1969)

s 51(x) gives Cth pwr over fisheries in Aust waters beyond territorial limits.
This was interpreted to mean:

Aust waters > waters up to 200 miles from coast

territorial limits > 3 miles

(traditional broad view – ie, 3-200)

States had control over fisheries within 3 miles of coast but Cth had control over other 197 miles.

NSW v Cth (Seas & Submerged Lands Case) (1975)

Cth claimed sovereignty over sea via geographical externality.
territorial ended at coast; territorial sea was therefore geographically external.
Cth had leg pwr under geographically external aspect over everything beyond low-water mark.
Does this change Bonser?

Everything is under geographically external to Aust, & Aust ends at coast, therefore does s 51(x) limit s 51(xxix).
So, therefore, everything except fisheries which only can from 3 miles out.

s 51(xiii) gives Cth pwr over banking except State banking.
s 51(xx) gives Cth pwr over financial corporations (which normally incl banking corporations).
Can Cth regulate a State banking corp? Does s 51(xiii) limit s 51(xx)? HCA said ‘yes’.

s 51(xxxi) says Cth can acquire prop on just terms (compensation) if acquisition is within leg pwr. See Bank Nationalisation Case (Zines p 25).
HCA sees s 51(xxxi) as an important civil rights prov. Does it apply to all pwrs? Yes (except possibly the territories pwr).

Is the sit’n betw’n s 51(x) & s 51(xxix) analogous to sit’n betw’n s 51(xiii) & s 51(xx), & s 51(xxxi)?
There is no authoritative answer yet.
In Raptis (1977), 3 (Brennan, Gibbs & Stephen JJ) said s 51(x) does limit s 51(xxix), whilst Murphy J said ‘no’. John Waugh said same as 3 judges.
Winterton says there is no analogy as s 51(x) is not limited to being phrased as a restriction like others are.

Murphy J’s summary from Dam of ‘external affairs’ pwr

To be a law with respect to external affairs it is sufficient that it:

implements any international law

ie, implements a rule of customary international law.
no actual decision established it but probably accepted by HCA.
today there is dicta in its support:

Murphy J in Dam.
Stephen & Mason JJ in Koowarta – even without treaty, RDA may have been valid under this pwr because of customary international law.
Brennan & Toohey JJ in Polyukhovich (although both held that Act had not done so) – if you purport to implement a rule of customary international law, do so.

easy way of implementation is not easy for public.

implements any treaty

yes (subj to 1½ exceptions).
this is law (Dam) & followed in subsequent cases.
Dawson J in IRA – against it but whilst Dam stands, he said he accepts it.
if more Coalition-appointed judges to HCA, it is likely that Dam will be reopened.

implements any recommendation or request

no decision on this but it is VIP because covers a wide range of topics than treaty.
never been established by decision of ct.
probably would not represent maj of ct (Kirby J would accept that).
there is dicta in support:

Evatt & McTiernan JJ in Burgess.
Deane & Murphy JJ in Dam.

issue in IRA – precedent supporting implementation of recommendations when deal with implementation of treaties adopted by Aust (ancillary treaty).
What is implementation test for recommendations? Treaty implementation is the liberal test of Deane J (in Dam & followed in Richardson & IRA) & incl ‘margin of appreciation’. For recommendations, HCA would not adopt the same test & doubt that ‘margin of appreciation’ would be included. It would be was this necessary way rather than appropriate way & not incl ‘margin of appreciation’ (ie, close implementation to preserve federal balance).

fosters (or inhibits) relations betw’n Aust or political entities, bodies or persons within Aust & other nation States, entities, groups or persons external to Aust

deals with Aust’s relations with other countries.
& deals with Australians & persons/orgs overseas.

1) – this is the core of the pwr, as noted by Brennan J in Koowarta.
R v Sharkey (1949) – HCA said external affairs pwr supported Crimes Act which made sedition (words alleged to cause trouble) a criminal offence (“disaffection against the gov’nt or Const of any of the King’s Dominions”). HCA said external affairs pwr did support this because Cth Parl can authorise action to prohibit activities in Aust that will affect our relations with other countries (eg: in relation to Yugoslav protests – but now subj to implied freedom of speech).
Sharkey has been endorsed by many (see Mason J in Koowarta who says this extends to friendly relations with other countries, not just with Dominions – p 284.9).
Re Blair (1988) – case of full Fam Ct; was prov in Family Ct Act regarding reg’n & enforcement of foreign custody orders valid? Yes, valid under ‘external affairs’ pwr as it deals with other countries, Austs & relations with people in other countries (d) & matter of international concern (f) – ie, relied on (d) & (f).

2) – broader pwr.
could support laws indicating who you may communicate with overseas, regulating relations of people in Aust with other people & orgs overseas.
again no decision other than Blair which is not HCA.
there is dicta that suggests ‘yes’ it is valid:

in Polyukhovich (not only matters geographically external to Aust but also relations).
Murphy J (on left) in Dam.
Gibbs CJ (on right) in Koowarta (see p 294.5).
therefore, probably not even Callinan J would deny this.

deals with circumstances or things outside Aust

ie, geographical externality.
established by HCA in Polyukhovich & Horta, & as dicta in IRA.
Brennan & Toohey JJ said you need something extra but later in IRA agreed with other judges & said it was OK.

deals with circumstances or things inside Aust of international concern

no decision established this other than Blair (Fam Ct case).
debatable but has support from Mason & Murphy JJ in Koowarta purely on matter of international concern; from Stephen J in relation to treaty implementation.
prob: potentially limitless.
Brennan J, therefore, has tried to intro limit (if international community established standards, then observation of standards might be regarded as a matter of international concern).
difficult because limitless topic.
Mason J in Dam (p304/5): all topic is ‘international concern’; treaty (with narrower ambit) will be regarded as narrowing the topic.

WK 6.1

21/8/00
Corporations

A corporation is an artificial body given legal personality (not physical person).
Therefore, can have bodies with limited liability & if it goes bust, corporation does & not indiv.
s 51(xx) gives Cth pwr over 3 types of corporations:

foreign (corporation incorporated overseas)
financial (type of activity & not its solvency)
trading

‘Corporation’ means s 51(xx) or Const corporation. Non-corporation means not 1 of 3 (eg: charity corporation).
The main issues are issues of ambit (breadth of pwr) & issues of scope
Ambit:

Can Cth incorporate bodies under s 51(xx)? No.
Can Cth regulate internal relations/affairs of these bodies?
Regulate external relations?
Regulate incidentals (incidental pwr) – reg’n of non-corporations involved in the activities of corporations; whether pwr extends to holding cos (if 1 of 3 it is OK, prob only if not 1 of 3).

2 issues of scope:

What is meaning of trading, financial (or foreign) corporation?
Does pwr extend to individual corporations?

Strickland v Rocla Concrete Pipes (Concrete Pipes Case) (1971)

Like in Koowarta as to whether Murphy J should have sat, in this case it was Barwick CJ since Act was dear to his heart.
3 issues need to be addressed:

What is status of Huddart, Parker?
Whether leg’n in the form in which held invalid in Huddart, Parker would now be valid.
Reading down.

Facts:
Case concerned constitutional validity of provs of TPA 1965, &, specifically, whether provs which regulated the intrastate trading activities & practices of trading or financial corporations could be supported by s 51(xx).
TPA 1965 was unsatisfactory.
Agreements had to be lodged with gov’nt & checked with TP Commissioner.
s 35 did not take note of Cth’s pwrs & intro s 7 (‘reading down’ section) > prob with reading down is that if it fails, whole Act fails, which is what happened – better to ‘read up’ (p 216.1).
Huddart held invalid s 5(1) & s 8(1) of Australian Industries Preservation Act which prohibited corporations from engaging in anti-competitive behaviour & incl intrastate stuff. HCA held leg’n invalid by 4:1 [1st 3 (Griffith CJ, Barton & O’Connor JJ) applied ‘reserved State pwrs’ doctrine, & Higgins J, with Isaacs J dissenting].
Issue: since ‘reserved State pwrs’ was basis for reasoning in Huddart, once doctrine exploded in 1920 in Engineers’ Case, does this liberate the pwr? This was looked at in the Bank Nationalisation Case (1948), but only 4 out of 7 judges looked at this pwr.

Barwick CJ:
Was Huddart correctly decided?
Looks at leg’n & reasoning in Huddart.
s 51(i) gives interstate & foreign commerce to Cth; in terms of intrastate, s 107 says that what is not given exclusively to Cth, stays with States [strong pres that can be rebutted].
s 51(xx) is ambiguous & does not say whether intrastate is included – therefore, read as subj to notion that intrastate commerce is left to States.
Huddart stated that s 51(xx) does not incl intrastate trading corporations as this had been reserved for States.
Q: was that view in Huddart correct? Barwick CJ & rest of HCA say ‘no’ because ‘reserved State pwrs’ doctrine is incorrect (‘reserved State pwrs’ was “exploded & unambiguously rejected” in 1920).
Says that ‘reserved State pwrs’ reversed the Const (p 206.9). Huddart based on ‘reserved State pwrs’ & therefore should be overruled, & s 5(1) & s 8(1) were valid because they regulated matters at heart of pwr, mainly “trading activities of trading corporations”. Huddart was overruled – “ss 5(1) & 8(1), in my opinion, were valid because they were regulating & controlling the trading activities of trading corporations & thus within the scope of s 51(xx)”.
Note:

Corporations falling in s 51(xx) incl not only corporations incorporated by State but also by Cth (Barwick CJ p 206.7).
Suggestion that pwr does not extend to incl regulating everything about trading corporation (Barwick CJ p 207.7).
Adopted by Murphy, Mason, Deane & McHugh JJ.

On scope issue, Gibbs CJ dissented & upheld Cth provs, & Menzies J said it extended to regulating the business of these corporations (p 214.1).

Relating to 3 issues of this case:

Huddart, Parker has been overruled.
If leg’n limited to regulating trading corporations, whether it is valid? ‘Yes’ if regulating trading activities.
Was Act a valid exercise of pwr? ‘No’ because s 7 failed.

Without s 7, relevant part of s 35 could not be read down because it is undistributed. Confirmation of Burgess principle of ‘reading down’ [cannot use s 15A to read down undistributed or composite phrases].
If s 7(1)(a) stood alone, then s 35(1) could have been read down – trade & commerce >interstate & foreign & therefore law under s 51(i).
If s 7(2) stood alone, then again s 35(1) could have been read down – to make valid under s 51(xx) by referring to agreements made by s 51(xx) corporations.
s 35(1) cannot be “disintegrated” by s 7 into series of paras.
s 7(1)(a) read Aust commerce down; s 7(2) limit persons; could not read down these things simultaneously.
McTiernan J & Gibbs CJ said you could work out by applying common sense; read down to extent that you have to; read as series of provs – all kinds of trade limited to persons & all kinds of persons limited to trade.

Summary (Concrete Pipes Case):

Concrete Pipes Case established that the pwr extends to regulating the trading activities of trading corporations, & may well be wider.

WK 6.2

24/8/00
Corporations ctd

Actors & Announcers Equity Association v Fontana Films (1982)

2 main issues:

Corporations pwr issue & scope of s 51(xx).
Validity of s 45D(5) > Communist Party Case.

Corporations pwr – What does this case add to corporations pwr?

s 45D(1)(b)(i) prohibited trade unionists engaging in a boycott of a trading corporation in relation to where likely effect of action was to cause “substantial loss or damage to the business of the 4th person or of a body corporate that is related to that person”.
This law was not directed to corporations; here law was directed at non-corporations (individuals) to protect corporations.
In corporations pwr, it is directed at corporations (restricting trading corporations).
HCA held valid because basically same subj matter in both cases (trading activities of corporations) – one is restricting, one is protecting.
3 points:

Law can be valid under s 51(xx) even if not directed at s 51(xx) corporations pwr [did not extend law here because also trading activities in both cases].
Barwick CJ in Concrete Pipes said could be wider than trading activities but not here. In this case, many judges said do not have to limit it to any particular activity (see Mason J on p 219.3; see Murphy J who said it applied to everything).
Slight expansion because what is protected here is the business (argued that business is wider term than trading activities).

s 45D(1)(b)(i) was valid under s 51(xx) because law in respect to corporations because it protected by direct legal effect the trading activities.
On wider ambit of pwr, Mason J said it was wider although not necessary in this case.
Murphy J took wider view (wider than anyone else’s; p 227.4 – 225) & said pwr extends to every conceivable topic. This view is even wider than Deane J’s [who says it extends to formation in the Incorporation Case (1990)].
3 judges (Mason J on p 220.8, Aickin J & Stephen J) said it extends to holding cos (body or corporation that has no other claim to be in s 51(xx) than the fact that it is a holding co; it controls a s 51(xx) corporation). Murphy J disagrees. There is no clear decision yet.
See also Barwick CJ (p 207.6).
See also Gibbs CJ (p 221.8) who says law that incl in its sweep other matters can still incl trading activities.
Q: when law is not directed at trading activities but indivs, how do you determine it is a law with respect to trading activities? See Gibbs CJ (pp 221-222), Brennan J (p 223.5, 224.2).
Law here was regulating trading activities & therefore fell within pwr. In Concrete Pipes it restricted & here it protected (ie, converse in this case of Concrete Pipes). Discrimination & significance not important here.

Validity of s 45D(5)? HCA held invalid by 5:2.

Const confers pwr on Cth with regard to various subjs & when pwr is exercised there must be link with those subjs (& it is up to judiciary to determine that link).
If Cth is relying on s 51(i) to regulate on interstate & foreign commerce, then there has to be presence of interstate & foreign commerce.
Can only regulate bodies that exist in real world (determined by judiciary) – constitutional fact must exist & it cannot be deemed & it is up to judiciary to determine if fact exists.
Eg: if Cth deems Syd-Bathurst is foreign commerce, it is

acting ultra vires in that purporting to regulate something not in pwr.
breaching SOP because takes away judiciary’s role.

Communist Party Case (1951)
In Dec 1949, Menzies’ policy was to outlaw Communism & passed Act in 1950.
Act declared Communist Party a banned organisation & prohibited members from certain public service & seized assets.
Act was held invalid by 6:1 (Latham CJ dissenting) – not because Cth could not ban subversive gps but because went about it wrong way.
Cth had pwr under s 51(xxxix) (implied pwr) to protect the Const. But could not declare something was a threat & then ban it [need to leave to judiciary to determine whether threat – ie, up to ct to determine if link really existed in real world (if gp was subversive), otherwise Cth can do anything – dangerous].
Fullagar J: “a stream cannot rise higher than its source” (p 87.5). See also “lighthouse” eg (p 87.7).
The constitutional fact must exist & has to be left to judiciary to see if it exists & cannot be deemed (ie, must be determined by judiciary).

Cormick v Cormick (1984)
Under marriage pwr of s 51(xxi), Cth can regulate children of the marriage (children of either party to the marriage).
Cth wanted to extend its pwr over children to incl children that were members of the household (ie, deeming someone to be a child of the marriage).
HCA said not valid by 6:1 (Murphy J dissenting).
Maj said child of marriage is a narrower concept; up to ct to determine. Murphy J dissented not on principle but felt that child of marriage is wide enough to incl that.

3 principles:

Cth Parl cannot deem constitutional facts.

It can, however, reverse the onus of proof regarding constitutional facts (see p 227).

ie, Cth Parl can say something should be deemed to be the case unless it is proved that it is not because still leave cts to decide (if ct unable to prove negative, then positive applies).
In Williamson v Ah On (1926), certain people should be deemed to be immigrants unless they proved they are not.
In Milicevic v Campbell (1975), anyone in possession of drugs is deemed to have imported them unless prove otherwise (might be difficult to prove negative).
Q: What if make onus of proof particularly hard? Eg: above case deeming prov with “unless proved beyond reasonable doubt” added to it (ie, raise standard of proof). HCA would probably hold it invalid, although no law on this.

It can, however, subject to possible dissenting views of Gaudron & Murphy JJ, deem non-constitutional facts.

Eg: it can deem Japanese visits to be Brazilian ones.
It cannot say a non-alien is an alien, but it is within pwr to say Japanese visit is a Brazilian visit.
Within its pwr it can deem whatever it likes but it cannot deem something into the pwr.

s 45D(5) said that if 2 or more trade unionists engage in secondary boycott which damages business of corporation, union deemed to be part of it unless it can show it took reasonable steps to prevent them.
Constitutional fact: damages business of corporation.
Q: is there a link betw’n trade union & damages business of corporation?
HCA held the law invalid by 5:2 & said no necessary link [anti-unionists saw it as valid; more neutral saw it as invalid]. Stephen, Mason (p 225.8), Murphy, Aickin & Brennan JJ held invalid for breaching Communist Party Case.
Mason & Brennan JJ said they are not same evidentiary provs like in Williamson & Milicevic. Mason J: has to go further to escape deeming – it is law about trade unions & no connexion with corporations (it is beyond pwr). Brennan J: do not merely reverse ordinary onus of proof but they preclude inquiry into whether org has engaged in such conduct to which liability is attached (beyond reach of law).
Murphy J: Communist Party principle involves an interference with fed jud pwr by requiring cts to find something to be the case which is not (p 227.1).
Gibbs CJ (dissenting) is aware of Communist Party principle but finds that facts here do not breach it. They are not denying any Constitutional fact because it exists (there is damage to business of corporation); ct asked by Parl to suppress activities considered detrimental – falls within incidental pwr conferred by s 51(xx) to deem union [see p 228.3/6].

R v Ludeke; Ex Parte BLF (1985)

Under leg’n, Fed Min could de-register a union if there had been a finding by IRC that they had breached an award.
In leg’n there was a prov that said if 2 or more unionists breach award, union deemed unless show it took reasonable steps to prevent. Was this valid?
s 45D(5) was invalid in Actors Equity. Here it should also be invalid.
HCA, however, distinguished Actors Equity by saying in this case it fell into category 3 – deeming but deeming a non-constitutional fact. It was deeming within registration/de-registration pwr (within industrial relations pwr).

Tasmanian Dam Case (1983)

Pwr not limited to just trading activities & incl activities for the purpose of trade.
Use corporations pwr to stop building of dam.
Trying to regulate something antecedent to selling of electricity, the dam [dam > hydro-electric pwr station > electricity].
Main sections were ss 10(2) & (3), & s 10(4) [latter relied on intermediate ambit of pwr; wider than trading activities but not widest pwr].
5 judges held s 10(4) valid (Mason, McHugh, Brennan & Deane JJ & Gibbs CJ).
ss 10(2) & (3) held valid by 4:3 (Gibbs CJ, Wilson & Dawson JJ dissenting, saying that ambit is regulation of trading activities). Mason J in maj adopts Griffith CJ in Huddart.
See Murphy J who says corporations pwr extends to any command affecting behaviour of corporation (p 232.7).
See Deane J who cannot divorce trading from non-trading acts.
In this case, only 3 judges take broad view.
Sig of this case is that a clear majority upholds s 10(4) which means pwr extends to regulate activities done for purpose of trading (this is not necessarily a trading activity).
Gibbs CJ, Wilson & Dawson JJ dissented on s 10(4), latter 2 almost taking a purposive view of pwr.

Summary (Dam):

s 10(4) valid – pwr extends to regulation of activities which are not necessarily trading activities but are done for purposes of trade.
What if it does not make that clear? It is still OK.
Dawson J in a speech commented on impact of case (pp 237-8): says that wider view (natural Griffith CJ view) is view of maj in Dam. Winterton says this is incorrect because wider view was only endorsed by 3 judges in Dam (Mason, Murphy & possibly Deane JJ).

Summary:

Look at 3 levels of pwr:

Lowest: extends to regulation of trading activities of trading (& financial) corporations > this is unanimous view of all judges (Concrete Pipes) & everyone.
2nd level: extends to regulation of activities for purposes of trade (these do not need to be trading activities) > majority in Dam (5).
Widest: Griffith CJ natural construction (any law that says trading corporation should or should not do is within pwr subject to Constitutional prohibition) > see Dawson J’s speech & Winterton’s comments above.

WK 7.1

28/8/00
Corporations ctd

Re Dingjan; Ex Parte Wagner (1995)

Complicated case because 1st time HCA faced sit’n that appeared Cth Parl was trying to regulate act not directly related to corporation.
Eg: would it be in pwr to regulate the driving of person driving vehicle made by a s 51(xx) corporation (subj to Act)?
In this case, contractors (Wagner) made contract with Dingjan (sub-contractor) to supply timber to Wagner who was going to sell it to Tasmanian Pulp & Forest Holdings (trading corporation).
ie, contract betw’n A & B for supply of timber by B to A & A then supply it to trading corporation.
Relevant contract is betw’n A & B (p 239.8).
s 127A(b) – in relation to business of a s 51(xx) corporation. Because contract betw’n A & B (which A was going to sell to trading corporation), was this a sufficient link betw’n prov & trading corporation?
HCA said ‘no’ by 4:3 because there was no inevitable impact of the matter regulated on the business of the trading corporation at all.
Could it be read down? HCA said ‘no’ (this was excessive & purely for policy reasons – ct saying to Parl do not just throw in trading corporation anywhere & expect us to say it is a s 51(xx) corporation because we won’t).
It did relate to business but prob was that you could have had provs in contract that had nothing to do with it [s 127A contained other provs, & if (b) severed & kept others, IRC would not be happy anyway].

2 points of maj:
Q: When can Cth regulate non-corporations under s 51(xx)?
Brennan J (pp240-1): to be in s 51(xx), Cth needs to discriminate betw’n s 51(xx) corporations & those that are not. He notes Gibbs CJ’s test of ‘significance’ (note that Gibbs CJ & Stephen J do not agree on ‘significance’ anyway) [p 241.5].
VIP passage from Brennan J is on p 242. A law in respect of constitutional corporations must affect them in a “discriminatory manner”. Brennan J does not endorse the widest view in Dam.
Dawson J says that it is a law on constitutional corporations if the “personality of the persons bound is a significant element of the law itself” (p 243.5).
Toohey J says there must be a “substantial connection” (p 243.9 & see Mason J in Dam on p 232.1) – this is the q anyway.
The relevant test is that of McHugh J: a law will be under s 51(xx) if it will have some practical or legal significance (ie, impact) for the corporation.
See p 245.3 (& Mason J in Dam on p 231.9) & p 245 para 3.
Correct interpretation of Murphy J’s test is that any law directed at corporation telling it to do or not do something will suffice. This is analogous to wide view of Mason, Murphy & Deane JJ in Dam. It represents an endorsement of 3rd approach (most liberal) in Dam.
Law can regulate activities, functions, relationships or business of a s 51(xx) corporation. By reference to activities or functions of a s 51(xx) corporation, a law regulates conduct of those who control, work for, or hold shares or office in those corporations [ie, extends to regulation of corporations & its employees, shareholders & officers].
Eg: way you drive car will not have impact on business of corporation.

Reading down:
Cannot read down composite or undistributed phrases. Toohey J states that for s 15A of AIA to operate, the law must indicate a “standard or test” that can be applied so as to limit & preserve the validity of the law.
s 127C(1)(b) – in so far as it relates to or substantially affects the business.
See Gaudron J on ‘reading down’ (p 248.8/9).

Summary (Re Dingjan):

Deals with situations where law is not directed at s 51(xx) corporations, & there the test is that of McHugh J who says law will only be within s 51(xx) if it has some practical or legal significance for the corporation.
It can also apply where it is directed at s 51(xx) corporations like in Actors Equity (protect business from secondary boycotts).

Notes (p 250):

In IRA Case, Brennan CJ, Toohey, Gaudron, McHugh & Gummow JJ said that a law preventing 3rd parties from entering into agreements with a s 51(xx) corporation for the purpose of preventing or hindering the corporation in its trading activities, is closely connected with the regulation of its trading activities so as to be a law with respect to a s 51(xx) corporation.
Authority for regulating employees is Murphy & McHugh JJ in Dam. For internal management of corporations, see Zines pp 104-7.

Scope

What is the meaning of trading or financial corporation?

St George County Council (1974)

Raised the issue of whether you look at the purpose for which the body was formed (this would be easier) or at its current activities (character can change).
HCA divided on the issue.

Adamson (1979)

There was a clear HCA decision in favour of “current activities”.
Was football club a trading corporation?
2 issues:

What is test? Is it “current activities” or “purpose” in order to characterise corporation?
How do you deal with proportionality (where trading is not sole activity or where it is trading for some ulterior purpose)?

HCA held by 4:3 that you look at “current activities”, & club & league were held to be trading corporations in view of its promotion of football.
Most of maj: trading was principal activity of these bodies.
Min: said look at purpose for which it was formed (promote football) & Gibbs J said even if you looked at activities, it should be a high one (ie, what is the predominant or characteristic activity).
Maj: look at activities & ask out of all them is trading a substantial proportion of them (Barwick CJ, Mason, Jacobs & Murphy JJ).

State Superannuation Board (1982)

Dealt with a financial corporation.
Vic SSB is a gov’ntal body with 2 functions:

administers the Vic Public Scheme.
invests the contributions from members (investment in various financial markets was quite substantial & a lot of employees employed for that purpose only).

Was this a financial corporation?

HCA maj held it was a financial corporation (3:2 because Brennan J had been a judge earlier in the matter & Dawson J had been Counsel in the matter).
All agreed that test of whether financial or not, or trading or not, is the same (whether “current activities” or “purpose”).
Maj & probably min said you do not have to exclude one to be another (can be both).
What is the test? Maj says “current activities” (p 252.3). Min, following precedent (Adamson), says “current activities” (p 254.6). So, unanimously, the test is that of “current activities”.
So both maj & min say look at “current activities”. They disagree as to what degree of “current activities”.
Maj applied Adamson & said look at all activities, & ask is financial acts a substantial proportion of them (& if financial acts undertaken for ulterior motive was beside the point – p 254.2).
Min says do not follow quantum (p 256.1) & adopt an artificial one – whether financial acts are a predominant or characteristic activity. Min said that finance was ancillary or incidental to its primary activity of administering the scheme. (p 256.3).
Summary: the test is “current activities”, & maj test is whether “current activities” are a significant/substantial proportion of that kind (trading or financial).

Fencott v Muller (1983)

Corporation called “Oakland” that was a “shelf company” was acquired to wind up a business run by trust (pay debts & give $ to beneficiaries).
Was this body a trading corporation?
How do you characterise a body before it has done anything? One would expect on views in Adamson & State Superannuation Board where look at “current activities”, that you therefore look at its intended activities (never going to trade, only wind up business & then be defunct).
But maj said look at purpose of body – look at memos & articles (this does not mean anything really). Maj said it had pwr to trade & was a trading or financial corporation.
To what extent does this apply to current corporations?
Result: anything that before it does something is a trading or financial corporation because it can engage in trading or financial acts [this only gave ammunition to the min].

Tasmanian Dam Case (1983)

Was HEC a gov’nt body/corporation?
It built dams & sold electricity. It gave gov’nt advice on hydro-electric policy, env policy. It also had certain gov’nt functions (licensing electricians).
Was this a trading corporation?
Yes – Mason, Murphy, Brennan & Deane JJ (because traded on substantial scale; ie, trading was a substantial proportion).
No – Gibbs CJ, Wilson & Dawson JJ. Min said test is predominant or characteristic activity (State Superannuation Board) & cannot say predominant or characteristic activity of this gov’ntal body is trading. See effect of Fencott v Muller on Gibbs CJ who is happy to use purpose (p 257 note 3).

Incidental Power

Fencott v Muller (1983)

TPA 1974 imposed civil liabilities on “persons involved in the contravention”.
Was it valid? Yes.
This fell within the incidental pwr (p 271.3). Corporations act thro’ natural persons &, in order to be effective, a regulation of the activities of corporations calls for imposition of duties on those natural persons who might participate in the corporate activities [Mason, Murphy, Brennan & Deane JJ].
There is clear authority that it falls within implied or express incidental pwr to impose liability on non-s 51(xx) corporations involved in breaches of law by corporations (ie, could impose civil liability on corporate officers).

Incorporation

NSW v Cth (Incorporation Case) (1990)

Can Cth incorporate bodies under s 51(xx)? No.
Uniformity of law (national law) to cover whole field.
Corporations Act 1989 provided for incorporation of bodies under Fed law but it was clumsy.
To get incorporated, needed to lodge an activity statement with Cth every yr (substantial proportion of your activities were trading or financial).
Could Cth incorporate bodies? Leading eg of constitutional interpretation: text, purpose, precedent & policy (p 269 note 2).

Text is what meaning given to word “formed” > means already formed, therefore no pwr to form them (p 261). Maj says s 51(xx) treats foreign, trading & financial corporations in same way. Since there is no pwr to incorporate foreign, & since pwr to all 3, there is no justification to say other 2 are in a diff’nt sit’n. Secondly, maj says when Const gives pwr, it does so expressly.

Deane J says do not just look at “formed”, look at whole clause “formed within the limits of the Cth” (p 265.8). Deane J wins on additional point since Airlines not in s 51(i).

Intention/purpose. Maj (on p 263) says Bill presented to 1st Convention in 1891 on basis that it did not extend to incorporation; then intro again in 1897 in modern form & is still the same.

Deane J says there is no justification on that basis.

Precedent. All judges in Huddart, Parker said it did not extend to incorporation (even Isaacs J who dissented & was not overruled by Concrete Pipes).

Deane J says that Isaacs J’s judgment is bizarre (p 266).

Policy. Maj says that if you give Cth pwr to incorporate bodies, it gives Cth difficulties (p 264 line 5) – activity statements, etc.

Deane J responds:

Practicality is a matter for Parl.
Convenience of national Companies Act outweighs any concern of alleged inconvenience (p 268 para 1).
Suggests def’n of trading corporation (a corporation which either was formed to trade or does trade – therefore, don’t worry about activity statements). This is a wider view than Murphy J’s.

Deane J successful but in dissent (6:1).

It would be foolish to challenge the incorporation issue today as Gummow & McHugh JJ are still there, & if you expect more pro-Cth from Callinan J, Gleeson CJ & Gummow J, you are stupid. Kirby J would of course dissent & agree with Deane J.
Cth cannot incorporate bodies under s 51(xx).

Topic Summary – s 51(xx):

Issues of ambit & scope.

Can Cth incorporate bodies under s 51(xx)? No.

Incorporation Case – relying on earlier support of Huddart, Parker unanimously & 4 judges in Bank Nationalisation Case (Latham CJ, Rich, Starke & Williams JJ).
In favour of incorporation – Murphy J (Actors Equity) & Deane J (Incorporation Case).
See Zines on pp 102-4. Zines suggests (p 104.1) that if you take Deane J or Murphy J’s def’n & say incl bodies not only trading but those formed to trade, then you may overcome practical probs concerned with activity statements (Fencott v Muller would suggest as bodies are trading corporations).
Prob: if you give corporation all pwrs of a natural person, how can Const get this? (giving more pwr than it can actually exercise itself).

Whether Cth can regulate the internal management/relations of corporations (ie, shareholders, directors & employees)?

No direct authority.
Treated as aspect related to 1) (p 269 note 4).
Internal affairs governed by association & created at time of formation – Williams J in Bank Nationalisation Case & see Zines on p 106 para 3.
But there are dicta – divided as to whether Cth can regulate internal management.

No: Rich & Williams JJ in Bank Nationalisation Case; Huddart, Parker (incl Isaacs J – p 266).
Yes: Murphy J in Actors Equity (p 224) & Dam (p 232) & Deane J in Incorporation Case (p 266.7).

On q of regulating corporation & its employees, dicta:

Murphy J in Actors Equity.
McHugh J in Re Dingjan (pp 245-6).
p 250 note 4.

In terms of shareholders:

McHugh J in Re Dingjan (pp 245-6).
Deane J in Incorporation Case (p 267.7).

Broad view: Mason, Murphy & Deane JJ (in Dam) & McHugh J (in Re Dingjan) – they all, except for Mason J, say regulate all internal matters.
Intermediate view: trading acts would seem to cover the internal matters (so shareholders, directors & employees incl because these are associated with activities done for the purposes of trade).
On q of dissolution of corporations: internal matters seen as related to incorporation, so some have seen dissolution as also being associated with incorporation (see Zines on p 106.9; Dixon CJ & Kitto J who say it is possible under bankruptcy or insolvency).

There is no direct authority.
No: Rich & Williams JJ in Bank Nationalisation Case.
Yes: Deane J in Incorporation Case (p 267.6); s 51(xvii) under bankruptcy laws.

External relations (ie, betw’n corporation & public).

Most authority has been in this area.
3 levels (Zines pp 92-3):

Cth can regulate trading activities of these bodies (Concrete Pipes, Actors Equity & Dam – all unanimous).
Cth can regulate activities done for the purposes of trade (need not be trading activities)

Dam on s 10(4) held valid by 5:2.
Re Dingjan – Mason J says that even if not mention for purposes of trade it is still OK (p 249.7).

Griffith CJ (?) – any law that corporation should or should not do something is valid (Mason, Murphy & Deane JJ in Dam & McHugh J in Re Dingjan).

Where law not directed at corporations but at non-corporations associated with them – McHugh J test in Re Dingjan (does the law legally or practically affect the business of such a corporation?). See p 245.

Role of incidental pwr in this topic.

Pwr extends to regulating non-s 51(xx) corporations who are implicated in the activities of the corporation (eg: corporate officers – Fencott v Muller p 271).
Holding or subsidiary companies:

Holding: dicta in Actors Equity on whether Cth can regulate a holding company of a s 51(xx) corporation [Mason, Stephen & Aickin JJ said ‘no’, Murphy J said ‘yes’ (p 225)] – ie, 3:1 against.
Subsidiary: never dealt with.

Re Dingjan is broad enough to incl incidental pwr because not regulating the corporation – maybe whole case is related to incidental pwr.

Scope

What is meaning of trading & financial corporation?

Test is: “current activities” – look at all of them & see whether trading or financial activities represents a substantial proportion (not unanimous because min q is what is predominant or characteristic activity).

Corporation that has not yet had any activities.

Authority is Fencott v Muller which says look to pwrs given by Const of corporation, look at purpose of body (but this was decided before abolition of ultra vires incorporation law).

There is a wider view of trading corporation.

See Murphy J in Dam (p 257.2) & Deane J in dissent in Incorporation Case (p 268.3).
A corporation will be a trading corporation if either “current activities” or purpose of formation will lead one to conclude that substantial proportion is related to that.

Whether pwr extends to a specific corporation?

Could Cth pass a law regulating BHP?
No direct authority.
But there is dicta in Dam (p 259 note 4):

Murphy J says ‘yes’.
Wilson J says ‘no’.

What is other prob if want BHP Act? Can only regulate it for as long as it remained a trading corporation – ie, condition it on BHP remaining a trading corporation.

See Zines on p 100 concerning s 51(i) vs s 51(xx).
Interesting to contrast narrow legalistic view of s 51(i) with apparently more broad approach of s 51(xx).

Interpretation of s 51(xx) is a natural interpretation (as noted by Griffith CJ in Huddart, Parker).
s 51(i) cluttered by early precedent whereas s 51(xx) overruled Huddart, Parker.

WK 7.2

31/8/00
Freedom of Interstate Commerce

1st para of s 92 of Const says that on imposition of uniform duties of customs, “trade, commerce, & intercourse among the States, whether by means of internal carriage or ocean navigation, shall be absolutely free”. Thus, s 92 contains open-ended phrases, & Isaacs J saw this.
A lot of cases on s 92.
HCA had diff’nt views on this pwr until 1988.
4 general approaches to adopt to s 92:

political – no one suggested.
contextual – stronger claim: look at context to see what s 92 is making interstate commerce free from (customs duties; Murphy J says “discriminatory fiscal imposts” on p 466.6); but this is not the current approach.
literal – freedom from all regulation (law); in essence this is approach taken by HCA till 1988.
purposive – this is the modern approach: work out what s 92 was intended to do & give it an interpretation that would allow it to accomplish that (no more, no less).

Issue of Discrimination

Discrimination against interstate trade (treating adversely trade of what is not your State relative to your own).
Accepted from beginning that presence of discrimination will prima facie be fatal to law’s validity. If no discrimination, it will be valid.
HCA said lack of discrimination not critical because even if not discrimination, it could still be invalid.
Prima facie & rebuttable because in some cases, law may discriminate for good reason.

Fox v Robbins (1909)

Discriminated against out-of-State liquor.
If for public health/safety or consumer protection for adverse treatment of other State, law could be valid.

Bank Nationalisation Case (1949)

Basic test lasted from 1949-1988.
Cth nationalised banks which meant all banking had to be done by Cth & priv banks could only operate via consent of Cth.
Challenged on basis of s 92.
Act prohibited all banking & was not discriminatory.
Fact that it treats interstate & intrastate banking the same is beside the point.
2 elements to the test (& s 92 is breached only if both held invalid) – see p 466:

s 92 violated if there is a direct effect (legally) on interstate commerce [‘criterion of operation approach’].
a law would not breach s 92 if it was regulatory [if reasonable restriction relating to mode or manner, there is no breach of s 92].

Privy Council: in no case are we to be taken to say that nationalisation always breaches s 92 [rider].

Originally, economic factors seen as indirect. Barwick CJ, however, felt that economics could be direct &, by 1975, he had changed others’ views on 1).
Barwick CJ destroyed 1) by 1975 & tried to reduce the concept of regulation (narrow).

Clark King (1978)

Destroyed Bank Nationalisation test.
Set up Australian Wheat Board to market commodity.
In order to obtain a good price, all States & Cth gave AWB a monopoly – all thro’ AWB.
An interstate contract person said s 92 breached because of nationalisation.
HCA held scheme valid by 3:2.
Maj: Murphy J said only “discriminatory fiscal imposts” breached s 92, & Mason & Jacobs JJ held scheme valid on 2 grounds:

Did not discriminate against interstate trade – interstate & intrastate trade treated same [1st time since 1945 that lack of discrimination regarded as positive].
Applied rider (p 455 para 2) – monopolisation was the only practical & reasonable way to regulate wheat.

Min: Barwick CJ & Stephen J applied Bank Nationalisation test (orthodox).

Uebergang v AWB (1982)

Demonstrated that ct divided.
Barwick CJ said kill the rider.
Stephen, Wilson & Aickin JJ conceded rider can be applied but not really.
Murphy J had his own view.

Cole v Whitfield (1988)

Looked at intention of framers & outlined test that satisfies purpose.
7 points:

1st modern case that clarifies what to look at in Const debates (p 459.5) – not for intention but to look at:

way lang used
what Const was trying to address (mischief)

What history & context (p 467.8) revealed was that s 92 intended as a prohibition on protectionist discrimination (pp 462.4, 463.5).
Distinguish betw’n 2 limbs of test – freedom of interstate trade & commerce; freedom of interstate intercourse (distinct). There are 2 prohibitions in s 92: interstate trade & commerce (broad liberal right) & intercourse (might be broader) [see pp 460.9, 462.9].
Emphasised freedom from discriminatory burdens extends beyond monetary burdens (p 463.7).
3 points:

Noted failings of prevailing doctrine. The criterion of liability/operation approach was artificial & focussed too much on legal rather than eco & practical effects (pp 465.9, 466.3).
Gave s 92 too broad a construction. HCA said the doctrine “created protectionism in reverse” (p 467.1).
Filter was too fine; too little law got thro’; s 92 was stopping too much useful law (p 467.3).

Test: a law will breach s 92 if it is discriminatory against interstate commerce de jure (law appears neutral but in reality is not) or de facto (in fact even though in law it does not appear to be) & is protectionist in intention or effect.

See pp 463.5, 467.8, 468.2; 464.9, 468.3; 468.5.

Application here. Parties agreed on facts. Tas & other States had laws prohibiting taking of undersized crayfish, but Tas had a higher size as limit; person imported from SA not undersize there but undersize in Tas; did this law contravene s 92? Was it protectionist? Did it discriminate?

HCA applied test & said no discrimination was intended – Tas law was aimed at conservation. What about practical discrimination & protectionism (against SA) > not relevantly discriminatory [see p 469.2].

Note: in order to breach s 92, law would have to be relevantly discriminatory & protectionist; if avoid breaching s 92 must show not relevantly discriminatory & not protectionist.

WK 10.2 & 11.1

19/10/00 & 23/10/00
Excise Duties

Most important of the exclusive pwrs are the pwrs to levy duties of customs & excise, which were vested exclusively in Cth by s 90 of Const, which provides:

“On the imposition of uniform duties of customs the pwr of the Parl to impose duties of customs & of excise, & to grant bounties on the production or export of goods, shall become exclusive”.

ie, s 90 prohibits States from levying a duty of excise.
An excise is a form of tax.
Const does not define a duty of excise but s 93 hints at one – basically a tax on production.

Peterswald v Bartley (1904)

Decided by 1st 3 judges of HCA.
Demonstrated ‘reserved State pwrs’ thinking but actual def’n did not.
Adopted a narrow def’n of excise on their understanding of s 93.

What is the tax levied upon? (excise is a tax on goods – q is what dealing with the goods attracts the tax)
How closely related is the tax to the goods?

Tax on local prod’n.
On issue of proximity, they said it had to be close – in relation to quality or value of goods.

Petrol Case (1926)

What about tax on 1st sale – sale by producer?
HCA said it was an excise – 1st sale is a tax on producer which is essentially a tax on prod’n.
Rich J adopted a broad view of what constitutes excise duties – he did not limit excises to taxes on prod’n (p 495.2/3). He is the founder of the current HCA maj view.

Matthews v Chicory Marketing Board (Vict) (1938)

A Vic tax on producers of chicory at the rate of 1 pound per ½ acre of land planted with the crop was held to constitute a duty of excise (3:2).
Imposed on producers of chicory (so prod’n > OK).
Relevant commodity was harvested chicory & amount you plant does not necessarily equal amount you harvest – so, was 2nd component critical? Latham CJ & McTiernan J dissented & said ‘yes’. Maj (incl Rich & Dixon JJ) took broad view & said does not need to be a direct correlation betw’n tax & goods.
Dixon J: there does not have to be a direct, close mathematical relationship but in this case there was a natural relationship (more you plant, more you harvest) & computed quantitatively there was some relationship betw’n tax & goods.

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