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Constitutional Interpretation in the Corporations Case

Published online by Cambridge University Press:  24 January 2025

Geoffrey Kennett
Geoffrey Kennett*
Affiliation:
Department of the Senate, Canberra
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Extract

In the recent decision in New South Wales v Commonwealth (hereafter referred to as the Corporations case), the High Court's interpretation of s 51(xx) of the Constitution frustrated the Commonwealth Government's attempt to create a single national system for the regulation of companies and securities by denying the Commonwealth Parliament the ability to legislate for the incorporation of companies. Corporate existence, and the privilege of limited liability which arises from it, flows from registration under applicable companies legislation. The Commonwealth's ability to displace State companies legislation and bring all or most corporations within its scheme would therefore be significantly enhanced by the ability to legislate with respect to the incorporation of companies. The Corporations Act 1989 (Cth) was, for reasons mentioned below, a complex piece of legislation. However, any effort by the Commonwealth to extend its control of corporate regulation without the ability to control incorporation would be likely to generate a system whereby companies came into being by registration under a State Act, but were then bound to conduct their affairs in accordance with Commonwealth legislation - a system which might almost have been constructed by opponents of federalism in order to demonstrate its absurdity.

Type
Research Article
Information
Federal Law Review , Volume 19 , Issue 3 , September 1990 , pp. 223 - 244
Copyright
Copyright © 1990 The Australian National University

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Footnotes

The views expressed are those of the author and not necessarily those of the Department, any of its other officers or any Senator. The author wishes to thank Mr Geoffrey Lindell for commenting on an earlier draft.

References

1 (1990) 169 CLR 482.

2 The scheme was contained in the following legislation: Australian Securities Commission Act 1989; Corporations Act 1989; Corporations (Fees) Act 1989; Securities Exchanges (Application for Membership) Fidelity Funds Contribution Act 1989; Securities Exchanges (Membership) Fidelity Funds Contribution Act 1989; Securities Exchanges Fidelity Funds Levy Act 1989; National Guarantee Fund (Reportable Transactions) Levy Act 1989; National Guarantee Fund (Participating Exchanges) Levy Act 1989; National Guarantee Fund (Members of Participating Exchanges) Levy Act 1989; Futures Organisations (Application for Membership) Fidelity Funds Contribution Act 1989; Futures Organisations (Membership) Fidelity Funds Contribution Act 1989; Futures Organisations Fidelity Funds Levy Act 1989; Close Corporations Act 1989; Close Corporations (Fees) Act 1989; Close Corporations (Liquidators' Recovery Trust Fund Contribution) Act 1989; Close Corporations (Additional Liquidators' Recovery Trust Fund Contribution) Act 1989.

3 Companies Code s 35(4); Corporations Act 1989 s 123(1); Ford, H A J, Principles of Company Law (5th ed 1990) Ch 3Google Scholar.

4 Eg “Interview with Mr A G Hartnell-Chairman of the Australian Securities Commission” [1989] 7 C&SU 381, 382; Senate Standing Committee on Legal and Constitutional Affairs: The Role of Parliament in relation to the National Companies Scheme (1987) Chs 3, 5.

5 See the Second Reading Speech on the Corporations Legislation Amendment Bill 1990 by the Attorney-General, the Hon Michael Duffy MP: House of Representatives, H Reps Deb 1990, 3663 (8 November 1990). The legislation has since been enacted: Corporations Legislation Amendment Act 1990.

6 (1990) 169 CLR 482, 495.

7 See Striclclandi v Rocla Concrete Pipes Ltd (the Concrete Pipes case) (1971) 124 CLR 468; R v Trade Practices Tribunal; ex parte St George County Council (1974) 130 CLR 533; Kathleen Investments (Australia) Ltd v Australian Atomic Energy Commission (1977) 139 CLR 117; Actors and Announcers Equity v Fontana Films Pty Ltd (1982) 150 CLR 169; Commonwealth v Tasmania (the Franlclin Dam case) (1983) 158 CLR 1.

8 (1982) 150 CLR 169.

9 (1983) 158 CLR 1.

10 (1982) 150 CLR 169, 182.

11 (1983) 158 CLR 1, 117 per Gibbs CJ; 201-202 per Wilson J; 316 per Dawson

12 (1982) 150 CLR 169, 207-208 per Mason J; 212 per Murphy J.

13 See his throwaway remark (1982) 150 CLR 169, 195.

14 (1983) 158 CLR 1, 148-149 per Mason J; 179 per Murphy J; 269-271 per Deane J.

15 Fontana Films (1982) 150 CLR 169, 218; Franklin Dam (1983) 158 CLR 1, 240-241.

16 (1983) 158 CLR 1, 272; cf Huddart, Parker & Co Pty Ltd v Moorehead (1909) 8 CLR 330, 348 per Griffith CJ.

17 See eg L, Zines, The High Court and the Constitution (2nd ed 1987) 87Google Scholar.

18 (1983) 158 CLR 1, 316 per Dawson J.

19 (1983) 158 CLR 1, 202 per Wilson J; 316 per Dawson J.

20 Eg Fontana Films (1982) 150 CLR 169, 181, 216; Franklin Dam (1983) 158 CLR 1, 148, 240, 269, 314. See also Koowarta v Bjelke-Petersen (1982) 153 CLR 168, 209, discussing the power conferred by s 51(xxvi) with respect to people of any particular race.

21 See eg Franklin Dam (1983) 158 CLR 1, 149 per Mason J; 269 per Deane J.

22 See eg Fontana Films (1982) 150 CLR 169, 207 per Mason J.

23 Franklin Dam (1983) 158 CLR 1, 149.

24 (1990) 169 CLR 482, 497.

25 Ibid 509, 512.

26 L, Zines, supra n 17, 89Google Scholar.

27 Id.

28 Fontana Films (1982) 150 CLR 169, 208 per Mason J.

29 (1982) 152 Cl.R 570.

30 Ibid 588 per Gibbs CJ; 601-602 per Mason, Murphy, Brennan and Deane 611; per Wilson 1; 622 per Dawson J.

31 (1982) 152 CLR 570, 602 per Mason, Murphy, Brennan and Deane n.

32 (1990) 169 CLR 482, 503.

33 Id..

34 Corporations Act 1989 ss 120, 121.

35 Corporations Act 1989 s 123(1).

36 Corporations Act 1989 s 113.

37 Corporations Act 1989 ss 156, 158.

38 (1990) 169 CLR 482, 503.

39 Cf L, Zines, supra n 17, 85-86Google Scholar.

40 (1983) 158 CLR 1, 155-157 per Mason J; 179 per Murphy J; 240 per Brennan J; 293 per Deane J; 116-117 per Gibbs CJ; 318 per Dawson J.

41 (1979) 143 CLR 190.

42 (1982) 150 CLR 282.

43 Ibid 305, 306.

44 See the Franklin Dam case (1983) 158 CLR 1, 116-117 per Gibbs CJ.

45 This position is supponed by eg Lindell, G J, “The Corporations and Races Powers” (1984) 14 FL Rev 219 at 242Google Scholar and Sir Maurice, Byers, QC, “Re: National Companies and Securities Legislation - Opinion” in Senate Standing Committee on Legal and Constitutional Affairs, supra n 4, 89, 94-95Google Scholar.

46 R v Judges of the Federal Court (1979) 143 CLR 190, 209.

47 (1983) 158 CLR 1, 179.

48 (1990) 169 CLR 482, 511-512. See also infra text at nn 95-118.

49 Ibid 512.

50 Ibid 503.

51 This argument had been put by M, Crommelin and G, Evans, “Explorations and Adventures with Commonwealth Powers” in G, Evans (ed), Labor and the Constitution 1972-1975 (1977) 24, 34Google Scholar and Sir Maurice, Byers, supra n 45 90-91Google Scholar.

52 (1990) 169 CLR 482, 498.

53 Cf eg Grannalli v Marriclcville Margarine Pty Ltd (1955) 93 CLR 55, 11; L, Zincs, supra n 17, 33Google Scholar.

54 (1990) 169 CLR 482,505.

55 Corporations Act s 123(1). Cf Companies Code s 35(4).

56 Isaacs I was clearly influenced by this consideration in Huddarl, Parker & Co Pty Ltd v Moorehead: (1909) 8 CLR 330, 394. However, he did not explain how it affected his reasoning. Similar concern, without explanation, can be found in W Harrison Moore, The Constitution of the Commonwealth of Australia (2nd ed 1910) 470, and in a one-liner from the majority in the Corporations case: (1990) 169 CLR 482, 498.

57 (1951) 83 CLR 1.

58 See eg (1951) 83 CLR l, 258 per Fullagar J; R v Portus; ex parte McNeil (1961) 105 CLR 537, 540-541.

59 Cf CommU11ist Party case (1951) 83 CLR l, 258.

60 (1990) 169 CLR 482, 506.

61 (1972) 127 CLR 617,661.

62 (1977) 139 CLR 117, 159.

63 Eg M, Crommelin and G, Evans supra n 51, 34Google Scholar.

64 See eg Huddart, Parker & Co Pty Ltd v Moorehead (1909) 8 CLR 330, 362 per Banon J.

65 (1990) 169 CLR 482, 498-499.

66 Statute of Westminster 1931 s 3; Statute of Westminster Adoption Act 1942 s 3.

67 R v Foster; ex parte Eastern and Australian Steamship Co Ltd (1959) 103 CLR 256, per Taylor J; 300 per Menzies J.

68 (1959) 103 CLR 256, 306 per Windeyer J. For discussion see L, Zines, “Nationhood and the powers of the Commonwealth” in L, Zincs (ed) Commentaries on the Australian Constitution (1977) 1, 44-45Google Scholar.

69 (1990) 169 CLR 482, 504-505.

70 Ibid 505.

71 Huddart, Parker & Co Ply Ltd v MooreMad (1909) 8 CLR 330, 363 per Barton J; 393 per Isaacs J; Corporations case (1990) 169 CLR 482, 499.

72 (1990) 169 CLR 482, 508 per Deane J. See eg Australian National Airways Pty Ltd v Commonwealth (1945) 71 CLR 29, 58

73 (1990) 169 CLR 482, 498.

74 (1909) 8 CLR 330.

75 Ibid 348-349 per Griffith CJ; 362 per Barton J; 369-371 per O'Connor J; 393-394 per Isaacs J; 412 per Higgins J.

76 Amalgamated Society of Engineers v Adelaide Steamship Co Ltd (1920) 28 CLR 129. The reference to instantaneous combustion was used by Barwick CJ in Striclcland v Rocla Concrete Pipes Ltd (1971) 124 CLR 468, 485.

77 (1971) 124 CLR 468, 484-485 per Barwick CJ (with whom McTieman J agreed onthis point); 507 per Menzies J; 512 per Windeyer J; 513 per Owen J; at 515 per Walsh J; 522-524 per Gibbs J.

78 (1990) 169 CLR 482, 499.

79 (1909) 8 CLR 330, 348-349. See also the Concrete Pipes case (1971) 124 CLR 468, 488 per Barwick CJ.

80 Ibid 410.

81 (1945) 71 CLR 29.

82 (1948) 76 CLR 1, 202 per Latham CJ; 255 per Rich and Williams JJ; 304 per Starke J. The point was not discussed in the judgment of the Privy Council on appeal ((1949) 79 CLR 497).

83 (1945) 71 CLR 29, 57.

84 (1948) 76 CLR l, 304.

85 Insurance Commissioner v Associated Dominions Assurance Society Pty Ltd (1953) 89 CLR 78, 86.

86 Eg the Concrete Pipes case (1971) 124 CLR 468, 490 per Barwick CJ; Commonwealth v Tasmania (1983) 158 CLR 1, 241 per Brennan J; 272 per Deane J; 316 per Dawson J.

87 (1990) 169 CLR 482, 501.

88 (1971) 124 CLR 468, 490.

89 Fontana Films (1982) 150 CLR 169, 212. See also Kathleen Investments (Australia) Ltd v Australian Atomic Energy Commission (1977) 139 CLR 117, 159.

90 (1990) 169 CLR 482, 501.

91 Convenlion Debates (Adelaide 1897) Vol III, 1230.

92 (1904) 1 CLR 329, 333, 350

93 Ibid 350-351.

94 Ibid 351.

95 Convention Debates (Sydney 1891) Vol I 686; (Adelaide 1897) Vol III, 439, 1230.

96 (1990) 169 CLR 482, 511.

97 Convention Debates (Sydney 1891) Vol I, 686.

98 This view is echoed by the Report of the Joint Committee on Constitutional Review (1959) 109 which opined that “it is uncertain what the founders intended”.

99 I, Quick and Garran, R R, The Annotated Constitution of the Australian Commonwealth (1901) 607Google Scholar; Sir Robert, Garran, “Memoranda on Constitutional Questions” in Commonwealth Parliamentary Papers 1934-1937, Vol II, 73Google Scholar.

100 Moore, W H, The Constitution of the Commonwealth of Australia (1902) 148Google Scholar; ibid (2nd ed 1910) 471-473.

101 (1988) 165 CLR 360.

102 Ibid 385.

103 Id.

104 (1989) 168 CLR 340, 376.

105 (1988) 165 CLR 360, 391.

106 (1990) 169 CLR 482, 501.

107 Ibid 502 (emphasis added).

108 Ibid 504.

109 Ibid 511.

110 (1988) 169 CLR 41, 132-133.

111 His Honour Expessed Similar concers during argument in Bourke v state Bank of NSW(NoS44 of1989) 6 March1990, Transcript, 49-52.that case is now reported (1990) 64 ALRJ 406.

112 For a much more sophisticated but somewhat difficult exposition of this position in a context far removed from constitutional law see R, Barthes, “The Death of the Author” in Barthes, , lmage-Music-Text (1977)CrossRefGoogle Scholar.

113 R, Dworkin, Law's Empire (1986) Chs 9-10Google Scholar; RA, Posner, “Legislation and its interpretation: a primer” (1989) 68 Nebraska Law Review 431Google Scholar.

114 Acts Interpretation Act 1901 s 15AB.

115 See DC, Pearce and RS, Geddes, Statutory Interpretation in Australia and New Zealand (2nd ed 1989) 33-42Google Scholar.

116 Cf R, Dworkin supra n 113, 364Google Scholar; M, Coper, “The High Court and the World of Policy” (1984) 14 FL Rev 294, 296Google Scholar.

117 Australian National Airways Pty Ltd v Commonwealth (1945) 71 CLR 29, 81 per Dixon J.

118 Eg Franklin Dam (1983) 158 Cl.R 1, 221 per Brennan J; Sir Anthony, Mason, “The Australian Constitution 1901-1988” (1988) 62 ALJ 752, 756Google Scholar.

119 Eg Attorney-General (Vic); ex rel Black v Commonwealth (1981) 146 CLR 559, 578.

120 L, Zines, supra n 17, 16Google Scholar.

121 (1990) 169 CLR 482, 506.

122 (1908) 6 CLR 309, 367-368.

123 (1964) 113 CLR 207, 225 per Dixon CJ, Kitto, Taylor, Menzies, Windeyer and Owen JJ.

124 (1964) 110 CLR 353.

125 Ibid 363 per Kitto J; 365-366 per TaylorJ; 369 per Menzies J; 370 per Windeyer J.

126 (1948) 76 CLR 1, 380-382.

127 (1983) 153 CLR 297, 312-314.

128 Eg Lansell v Lansell (1964) 110 CLR 353, 363 per Kitto J; 365-366 per Taylor J. See also R v Judges of the Federal Court 1979) 143 CLR 190, 261 per Mason J.

129 L, Zines, supra n 17, 19Google Scholar.

130 (1990) 169 CLR 482, 498.

131 J, Stone, Precedent and Law: dynamics of common law growth (1985) passimGoogle Scholar. See also “Current Topics” (1990) 64 AU 235.

132 L, Zincs, supra n 17, 18Google Scholar. See also 360-366.

133 M, Coper, supra n 116, 296-298Google Scholar.

134 Eg McHugh, M H, “The law-making function of the judicial process - Part II” (1988) 62 ALJ 116, 124Google Scholar.

135 For tentative beginnings see M, Coper, supra n 116, 297-298Google Scholar; L, Zincs, supra n 17 369-370Google Scholar.