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Friday, May 7, 2010

Chapter-23 Construction of federal and State Statues-Australia-Part-5

Nature of Problem of Inconsistency between State and Federal Laws -Australia

In Melville Homes Pty Ltd v Prime Ceramics Services Pty Ltd,[1][38] in the context of a discussion of the proper approach to the interpretation of the Commercial Arbitration Act 1984 (Vic), which had a legislative counterpart in all other State jurisdictions:

There is common commercial arbitration legislation throughout the Commonwealth. In R v Parsons [1983] 2 VR 499, the Full Court held that State courts should give a consistent meaning to a Commonwealth statute. In my opinion, by analogy the courts should attempt to give consistent interpretations to common State legislation. It would be undesirable if, in a dispute in Albury, s. 26 of the Commercial Arbitration Act was given a meaning different to that which might be given by this court in relation to a dispute in Wodonga.

This principle has particular force if the legislation under consideration and that with which it is compared had their origins in the same source. [39][2] The in pari materia principle extends to statutes in different jurisdictions[3].[40]

Inconsistency or repugnancy is a long-standing concept in the field of statutory law. Where the provisions of two statutes are in conflict, so much so that they cannot be reconciled one with the other, there is a consequential need to resolve the problem created by the conflict. In the case of conflicting statutes enacted by one legislature the problem is resolved by regarding the later statute as impliedly repealing the earlier statute to the extent of the inconsistency. In the case of conflicting statutes, one enacted by the Imperial Parliament, the other by a colonial legislature, the problem was resolved in favour of the primacy of the Imperial statute, even if it be the first in time[4]. And in a federal context, where the conflict is between a statute of the federal legislature and a statute of a state or provincial legislature, the conflict is resolved in favour of the primacy of the federal statute, even in the absence of a provision such as s.109. This is the position in Canada.[5] and in the United States[6]. In Victoria v. The Commonwealth[7]it wasobserved (at p 634):

"... as is shown by decisions on the Canadian Constitution, provisions like sec.109 do no more than declare a rule of last resort which would be applied irrespective of express provision."

This was the view which had been taken by Quick and Garran, The Annotated Constitution of the Australian Commonwealth (1901), p.939. And it has recently been endorsed by MURPHY J. in Australian Broadcasting Commission v. Industrial Court (S.A.)[8], at p 418. EVATT J has made an observation that:”Generally speaking, "inconsistency" and "repugnancy" are interchangeable terms. [9] Although there is authority for the proposition that the terms can be used interchangeably in relation to s.109 [10] in Ffrost v. Stevenson[11], DIXON J., citing Union Steamship, observed (at p 572) "It may be that the test of repugnancy under sec.2 of the Colonial Laws Validity Act 1865 is not the same as the test of consistency under sec.109".

It is significant that a conflict between a Commonwealth law and a territory law, which is unaffected by the provisions of s.109, is resolved in favour of the primacy of the Commonwealth law by reference to the same doctrine of inconsistency[12]. The comment made by BRENNAN J. in the last-mentioned case (at p 239) that"It is beyond the capacity of a law of the Northern Territory ... to affect the operation of a law of
the Commonwealth or to destroy or to detract from a right thereby conferred ..." echoes the observations of DIXON J. in
Stock Motor Ploughs Ltd. v. Forsyth [13], when, speaking of s.109, he said that inconsistency will result if a state law varies, impairs or detracts from the operation of a law of the Commonwealth. The important point is that when s.109 refers to inconsistency it looks to a well-established concept, subject to the possible qualification already mentioned, and does no more than provide explicitly that in this situation of conflict the Commonwealth law is to prevail to the extent of the inconsistency, the solution which, as Evatt J. noted, has been reached elsewhere in the absence of such a provision. Although in argument much was made of WINDEYER J.'s description of some "deeming" provisions, of which s.6A is an illustration, as involving a "statutory fiction" in Hunter Douglas Australia Pty. Ltd. v. Perma Blinds[14], at p 65, it is a notion which merely contributes another dimension of confusion to the question now under discussion. As his Honour pointed out, it is a convenient drafting technique for reducing the verbiage of an enactment, its effect being to prescribe the way in which a matter is to be adjudged. Generally speaking, no special legal consequences flow from Parliament's use of a deeming provision which involves a statutory fiction, though particular problems do arise in connexion with statutory definitions.[15]. It is because Parliament is sovereign and its legislative powers are plenary that there is no general objection to the enactment of laws which provide for a statutory fiction. It is not a ground of invalidity unless the provision takes the form of a provision to oust the jurisdiction of the Court to determine constitutional facts on which the exercise of legislative power may depend.[16] Here, of course, the question of inconsistency is one of law, requiring an ascertainment of the Commonwealth legislative intention for which s.6A makes specific provision.

19. Instead of employing the "deeming" technique, Parliament might have (a) expressed s.6A in different terms, stating that the Act never was intended to have an exhaustive or exclusive operation or (b) repealed the principal Act and replaced it with a new Act, expressed to have full force and effect from the date of commencement of the principal Act, containing a provision negativing its exhaustive or exclusive operation. It can scarcely be suggested that for the purposes of s.109 a distinction should be drawn between s.6A and the techniques in (a) and (b). In each case what was law at a given time has been altered. It is possible, I suppose, to say that in one sense the new law involves a fiction because it proceeds on the footing that the law as presently declared always was the law. But as a matter of both legal theory and legal reality, springing from the basic doctrine of parliamentary sovereignty, it is unquestionably correct to say that Parliament may proclaim that the law as presently declared always was the law. Indeed, it is instructive to recall that the common law rule was that if an Act expired or was repealed it was regarded, in the absence of provision to the contrary, as having never existed except as to matters and transactions past and closed.[17] 20. It is in this setting of fundamental common law principle and doctrine that s.109 finds its place in the Constitution. It seems scarcely necessary to add the comment that there is not the faintest hint of any suggestion in its provisions that it is concerned to draw any distinction between laws which provide for a statutory fiction and those that do not or between laws that are retrospective and those that are prospective[18].

Section 109 can be divided into two parts: the condition which governs its operation ("When a law of a State is inconsistent with a law of the Commonwealth"), and the operative provision ("the latter shall prevail, and the former shall, to the extent of the inconsistency, be invalid"). Section 109 operates upon a law of a State that is inconsistent with a law of the Commonwealth. Section 109 does not purport to affect the Commonwealth law; it makes the State law inoperative, leaving the Commonwealth law a clear field of operation.[19]. A law of a State that s.109 makes inoperative is incapable of creating or affecting legal rights or obligations: its legal force and effect are sterilized.

The condition governing the operation of s.109 on a State law has a temporal aspect. It is satisfied "When a law of a State is inconsistent" - that is, for so long as the inconsistency exists. It is only to that extent that there is inconsistency.[20]. When the inconsistency ceases, the sterilizing effect of s.109 ceases and the State law is, or is again, of full force and effect. As TAYLOR J. said in BUTLER (at p.283):

"The section is, of course, not dealing merely with instruments as such; it is dealing with instruments having the force of law and which are intended during the period of their operation to create rights and duties and to impose obligations according to their tenor. That being so it seems to me that the words 'to the extent of the inconsistency' must be taken to have a temporal as well as a substantive connotation.
Indeed the scheme of the section is consistent only with this view. The Federal Act can 'prevail' only whilst it remains in force and invalidity of the
State Act is produced only as the counterpart of the 'supremacy' of the Federal Act."

The period during which s.109 sterilizes a State law is the period during which the condition which governs its operation is satisfied; that is, while the Commonwealth law and the inconsistent State law are contemporaneously on the respective statute books. During that period, a legal right or obligation that would have arisen under the State law had it been operative does not arise. During that period, an act, matter or thing to which the State law would have applied is barren of the legal effect that the State law would otherwise have attributed to it. That consequence flows from the operation of s.109, not from the operation of the Commonwealth law with which the State law is inconsistent.
[21]. When and so long as the Commonwealth law and the inconsistent State law are on the statute books, the condition is satisfied and s.109 takes effect: it is self-executing.[22] When inconsistency between a Commonwealth law and a State law is removed by an amendment of the Commonwealth law, the condition which governs the operation of s.109 is no longer satisfied. As the temporal operation of s.109 depends on the satisfaction of the condition from time to time, the State law takes or regains its full force and effect with the amendment of the Commonwealth law but, in my opinion, a retrospective amendment of the Commonwealth law does affect the past operation of s.109 upon the State law. The period during which the State law was inconsistent with the Commonwealth law is a matter of history, not of legislative intention. If the retrospective amendment of the Commonwealth law were effective to satisfy retrospectively the condition governing the operation of s.109, the operation of s.109 would be contradictory: prior to the retrospective amendment, s.109 would have deprived the State law of legal force and effect, yet after the amendment it would be necessary to deny that s.109 had any operation on the State law during the same period. It is impossible to suppose that s.109 could so operate as to attribute to a State law no legal force and effect in its application to acts, matters and things that occurred or existed prior to the amendment of the Commonwealth law and, after the amendment, to acknowledge that the State law had full force and effect in its application to the same acts, matters and things.

Where the condition governing s.109 is in truth satisfied, it is not within the power of the Parliament to deem it not to be satisfied. The Parliament can remove an inconsistency, but it cannot deem an inconsistency to be removed. In R v. Credit Tribunal; Ex parte General Motors Acceptance Corporation, at p 563, Mason J. said:

" It is of course by now well established that a provision in a Commonwealth statute evincing an intention that the statute is not intended to cover the field cannot avoid or eliminate a case of direct inconsistency or collision, of the kind which arises, for example, when Commonwealth and State laws make contradictory provision upon the same topic, making it impossible for both laws to be obeyed."

If the Parliament is unable legislatively to deny the existence of direct inconsistency, it is equally unable legislatively to deny that the inconsistent laws existed contemporaneously. Satisfaction of the condition governing s.109 can be ascertained only from time to time by reference to the laws that are standing on the statute books of the Commonwealth and the States, and the operation of s.109 depends upon the fact that inconsistent laws are on the statute books at the same time. Though a law of the Commonwealth can be given a retrospective operation, it cannot retrospectively endow a State law with the force and effect of which s.109 deprived it before the retrospective Commonwealth law was enacted. It follows that the events upon which the first respondent's claims for relief were founded were, at the time when they occurred, devoid of legal effect under Part II of the State Act.[23]

Section 109 of the Constitution is not concerned with legal fictions. It is concerned with the reality of contemporaneous inconsistency between a valid law of the Commonwealth and an otherwise valid law of a State. According to its terms, its operation is immediate. Its terms are unqualified and self-executing. If there is inconsistency between an otherwise valid law of a State and a valid law of the Commonwealth the State law shall be, to the extent of the inconsistency, invalid. It is not the Commonwealth law which operates to make the State law invalid. It is the Constitution itself (see Federated Saw Mill &c. Employes of Australasia v. James Moore & Son Proprietary Ltd. [1909] HCA 43; (1909) 8 CLR 465, at p 536; Wenn v. Attorney-General (Vict.) (1948) 77 CLR 84, at p 120). It is the Constitution and not the Commonwealth Parliament which tells the citizen faced with the dilemma of inconsistent Commonwealth and State laws which both, according to their terms, apply to him or her that the State law is invalid and can be disregarded. If, at some subsequent time, the Commonwealth repeals or amends its law to remove the inconsistency, the State law will then become again valid or operative not from some prior date but from the time when there was, in fact, no longer inconsistency. The fact that the Commonwealth Parliament legislates retrospectively to introduce the fiction that, for the purposes of its law, its inconsistent law never existed or had a different operation to that which it in fact had cannot alter the objective fact that at the previous time when s.109 operated that inconsistency did exist. Nor can it alter the fact that the immediate and self-executing provisions of s.109 have already operated upon that inconsistency to invalidate the State law not for the period in which the Commonwealth Parliament, by the introduction of a fiction for its purposes, has subsequently said that its law had a different operation to that which it in fact had but for the period in which the fact of that inconsistency existed. So to say is not to construe s.109 of the Constitution as imposing a restriction on Commonwealth legislative power. It is simply to recognize that while the Commonwealth can retrospectively legislate for itself it cannot retrospectively impose as State law the provisions of a law which the Constitution has said was invalid because of contemporaneous inconsistency which has subsequently been removed. That is something which, if it is to be done, must be done retrospectively by the relevant State.

It follows that the Commonwealth Parliament, being subordinate to the Constitution, could not, by its 1983 Amending Act, reverse the past operation of s.109 of the Constitution which had rendered invalid or inoperative the relevant provisions of the N.S.W. Act. The Commonwealth Parliament possessed no power unilaterally to override that operation of the Constitution either by amending the terms of s.109 or by creating a legally effective illusion that the section had never operated at all by the introduction of a retrospective fiction into its law. That being so, the position remains that the relevant provisions of the N.S.W. Act were not operative at the time the acts complained of in the present case were committed and the conduct for which the appellant has been held responsible was not unlawful under the provisions of the N.S.W. Act.[24]

‘The way in which s.109 operates is well-established. A State law which is inconsistent with a valid Commonwealth law is not unconstitutional. If it is first in time it will have been in operation before the inconsistent Commonwealth law came into force and if it is still on the statute book when the Commonwealth law ceases to be in force it will come into operation again. It has no operation during the period of, and to the extent of, the inconsistency, but this is not because of any inherent vice. It is because the legislative field is occupied for the time being by the Commonwealth legislation. The word "invalid" in s.109 cannot mean that the inconsistent State law is ultra vires. It must mean that it is inoperative: see Carter v. Egg and Egg Pulp Marketing Board (Vict.) [1942] HCA 30; (1942) 66 CLR 557, at p 573 per Latham C.J.; Butler v. Attorney-General (Vict.) [1961] HCA 32; (1961) 106 CLR 268, at p 274 per Fullagar J.

When it is sought to apply s.109, then at that time the question must be asked whether there is any inconsistency between the relevant State law and the relevant Commonwealth law. If there is, then under s.109 the State law is inoperative to the extent of the inconsistency. If there is not, then s.109 has no operation and it matters not in my view how the absence of an inconsistency comes about - whether it be because the Commonwealth has passed no law on the relevant subject, or because the Commonwealth has repealed any law which it had on that subject, or because the Commonwealth law has ceased to be in force because of the disappearance of the power (e.g., the defence power) to support it. And if the Commonwealth can remove an inconsistency by repealing the law there is no reason, in my view, why it cannot do so retrospectively. Retrospective repeal cannot change the operation of s.109, but it may change the situation from one upon which s.109 previously operated to one upon which it has ceased to have an operation. Similarly, to deem the Parliament to have had an intention which it did not have at the time Commonwealth law was enacted, as s.6A does in this case, is to do no more than change the circumstances which govern the applicability of s.109 when it comes to be applied. To be sure, the effect may be to make operative a previously inoperative State law and so revive rights or obligations dependent upon the operation of the State law. But it is in the nature of a retrospective law that it changes things in the past and if in so doing it removes a past inconsistency then it removes the circumstance upon which s.109 operated and so denies its present application.

Plenary legislative power necessarily bestows the capacity to pass retrospective legislation - to say that henceforth a law is to be different, not only in the future, but in the past as well. That is what s.6A does. There is no fiction in the result even if the device which is used to achieve it - the deeming provision - may be described as a fiction. See Hunter Douglas Australia Pty. Ltd. v. Perma Blinds (1970) 122 CLR 49, at pp 65-66 per Windeyer J. The same result could have been achieved by other means. For example, the Commonwealth Parliament could have repealed the Racial Discrimination Act and re-enacted it retrospectively with a suitable declaration of limited intent. Or it could have repealed its legislation, retrospectively if that were necessary, and re-enacted it prospectively with a suitable declaration of intent. The State legislature might then have re-enacted its legislation retrospectively. In my view, s.109 does not operate as a guarantee of rights or immunities which have been acquired as the result of its operation upon inconsistent laws, but if it were to do so it would be ineffective unless it operated to curtail State as well as Commonwealth legislative power. No suggestion was made in argument that s.109 has such an operation and the reason, of course, is that s.109 does not curtail legislative power, state or federal. It curtails the operation of State laws when they are inconsistent with Commonwealth laws and just as the inconsistency may be created by the Commonwealth Parliament so it may be removed by it, prospectively or retrospectively.

14. If that means that because of the retrospective removal of an inconsistency between a State and a Commonwealth law, a State law is re-activated so that something that was lawful at the time it was done becomes unlawful or vice versa, then that is no more than the ordinary result of retrospective legislation. It is often an undesirable result but it would be quite wrong, in my view, and a distortion of s.109, to inhibit Commonwealth legislative power for that reason.[25]

This is so, whether the law in question is a federal, State or Territory law. It is so, whether the constitutional rule is one expressly stated or implied from the language and structure of the Constitution. Adopting this approach conforms to the longstanding instruction of this Court in cases of suggested constitutional invalidity[26]. It is an approach regularly taken where there is any possibility of doubt concerning the meaning and operation of the impugned law[27]. In R v Hughes[28] I explained why this approach is taken:

"In considering the validity or otherwise of the legislation ... said to be invalid, it is necessary, at the threshold, to elucidate the meaning and operation of the provisions in question. This is an elementary point. However it is important in the present case. If particular provisions claimed to be unconstitutional have no operation in the circumstances of the matter before the Court, it is irrelevant, and therefore unnecessary, to determine their validity. Constitutionality is not normally decided on a hypothesis inapplicable to the resolution of a particular dispute. If, upon a true construction of the legislation, it operates in a way that does no offence to the language and structure of the Constitution, it is irrelevant that, had it been construed in a different way, it might have done so. This Court will not answer constitutional questions on the basis of assumptions that have no practical or legal consequence."

[1] Melville Homes Pty Ltd v Prime Ceramics Services Pty Ltd [1991] 2 VR 211 at 213

[2] DC Pearce and KS Geddes, Statutory Interpretation in Australia (6th ed, 2006) at [3.36], citing inter alia, Ory and Ory v Betamore Pty Ltd (1990) 54 SASR 331 at 345

[3] DC Pearce and KS Geddes, Statutory Interpretation in Australia (6th ed, 2006) at [3.36], citing inter alia, Danziger v Hydro-Electric Commn [1961] Tas SR 20 at 24

[4] See, for example, Co-operative Committee on Japanese Canadians v. Attorney-General for Canada (1947) AC 87, at p 103, a decision on s.2 of the Colonial Laws Validity Act 1865 (Imp.)

[5] Laskin's Canadian Constitutional Law (4th ed., 1975), pp.23 et seq.)

[6] (Willoughby on the Constitution of the United States (1929), vol.1, ch.IV; Hines v. Davidowitz [1941] USSC 22; (1941) 312 US 52, at p 67)

[7] Victoria v. The Commonwealth [1937] HCA 82; (1937) 58 CLR 618, per EVATT J

[8] Broadcasting Commission v. Industrial Court (S.A.) [1977] HCA 51; [1977] HCA 51; (1977) 138 CLR 399, at p 418

[9] (see, for example, Attorney-General for Queensland v. Attorney-General for the Commonwealth [1915] HCA 39; (1915) 20 CLR 148, at p 168)

[10] Union Steamship Co. of New Zealand Ltd. v. The Commonwealth [1925] HCA 23; (1925) 36 CLR 130, at p 148, cf. p 158; Clyde Engineering Co. Ltd. v. Cowburn [1926] HCA 6; (1926) 37 CLR 466, at pp 524-525),

[11] Ffrost v. Stevenson [1937] HCA 41; (1937) 58 CLR 528

[12] (Federal Capital Commission v. Laristan Building and Investment Co. Pty. Ltd. [1929] HCA 36; (1929) 42 CLR 582, at p 588; Webster v. McIntosh [1980] FCA 128; (1980) 32 ALR 603, at pp 605-606; Re Kearney; Ex parte Japanangka [1984] HCA 13; (1984) 58 ALJR 231, at p 239)

[13] Stock Motor Ploughs Ltd. v. Forsyth [1932] HCA 40; [1932] HCA 40; (1932) 48 CLR 128

[14] Hunter Douglas Australia Pty. Ltd. v. Perma Blinds (1970) 122 CLR 49, at p 65

[15] see Muller v. Dalgety & Co. Ltd. [1909] HCA 67; (1909) 9 CLR 693, at p 696

[16] Australian Communist Party v. The Commonwealth [1951] HCA 5; (1951) 83 CLR 1).

[18] University [supra] per MASON J

[19] Carter v. Egg and Egg Pulp Marketing Board (Vict.) [1942] HCA 30; (1942) 66 CLR 557, at p 573; Butler v. Attorney-General (Vict.) ; [1961] HCA 32; (1961) 106 CLR 268, at pp 274,278,282-283,286

[20] Collins v. Charles Marshall Pty.Ltd. [1955] HCA 44; (1955) 92 CLR 529, at p 548

[21] R v. The Members of the Railways Appeals Board and the Commissioner for Railways (N.S.W.); Ex parte Davis [1957] HCA 22; (1957) 96 CLR 429, at p 439; R v. Credit Tribunal; Ex parte General Motors Acceptance Corporation [1977] HCA 34; (1977) 137 CLR 545, at p 563

[22]Federated Saw Mill &c. Employes of Australasia v. James Moore & Son Proprietary Ltd. [1909] HCA 43; (1909) 8 CLR 465, at p 536

[23] University of Wollongong v Mohamed Naguib Fawzi Ahmed Metwally & others [1984] HCA 74; (1984) 158 CLR 447 (22 November 1984) per BRENNAN J

[24] Univarsity [supra] per DEANE J

[25] University of Wollongong v Mohamed Naguib Fawzi Ahmed Metwally & others [1984] HCA 74; (1984) 158 CLR 447 (22 November 1984) per DAWSON J

[26] Bank of NSW v The Commonwealth [1948] HCA 7; (1948) 76 CLR 1 at 186 per LATHAM CJ

[27] The approach has been taken in several recent cases: Residual Assco Group Ltd v Spalvins [2000] HCA 33; (2000) 202 CLR 629 at 662 [81]; Behrooz v Secretary of the Department of Immigration and Multicultural and Indigenous Affairs [2004] HCA 36 at [106].

[28] R v Hughes (2000) 202 CLR 535 at 565-566 [66] (footnotes omitted)

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