Can't touch this: when will the State and the Commonwealth be immune from each other's laws?

The Commonwealth Constitution establishes the Commonwealth and continues the existence of the former colonies as States. However, at least textually, it leaves open many questions about the interaction of the Commonwealth and the States, including about the extent to which the Commonwealth can make laws that bind a State and whether a State can make laws that bind the Commonwealth?
 
The High Court initially thought that the Commonwealth and the States were largely immune from each other's laws. This changed in 1920.[1] The High Court has since clarified that the Commonwealth and the States enjoy limited (but important) implied immunities from each other's laws. The difficulty, of course, lies in understanding the limits of those immunities. 
 
You may need to consider this issue where you are either considering the potential application of a Commonwealth law to Victoria or the potential application of a Victorian law to the Commonwealth.

Initial question - are the laws meant to apply?

If the laws of one polity do not apply to the other, then questions of immunity will not arise. Therefore, the first step is to interpret the statue, bearing in mind presumptions about when statutes bind the Crown. 

If the relevant statute intends to regulate the conduct of the Executive government, or is intended to apply to land or property owned by the polity in question, then you might need to turn to immunity considerations.

State immunity from Commonwealth laws?

The States are immune from certain Commonwealth laws that curtail their capacity to function as governments. This is commonly known as the Melbourne Corporation [2] doctrine, more recently refined to in the cases of Austin and Clarke.[3] The test requires asking:

Whether, looking at the substance and operation of the Commonwealth law, there has been, in a significant manner, a curtailment or interference with the exercise of State constitutional power?

A ‘significant’ burden is a matter of evaluative judgment, not of evidence. It relates to the States as independent entities, and impairing the State's legislative choice or 'liberty of action'. Some examples include:

• industrial laws which prevent a State from managing:[4]
  • the number, identity, and term of appointment or dismissal of its employees
  • the terms and conditions of employment for people engaged at higher levels of government, such as Ministers and their advisers, heads of departments, high-level statutory office holders, parliamentary officers and judges
• laws applying a Commonwealth superannuation surcharge to the pension or superannuation benefits of State judges and State MPs

While the doctrine is now considered to have one test, the former discrimination 'limb' is still a highly relevant factor within the overall test. It applies where a special burden or disability is placed on the States or State officials.

Commonwealth immunity from State laws

The Commonwealth has a constitutionally implied immunity from State laws which interfere with its executive capacities (being the powers it has to execute and maintain the Constitution and Commonwealth laws). Until recently, this immunity was often referred to as the Cigamatic doctrine,[5] that is that:

State laws cannot validly affect (ie restrict or modify) the capacities of the Commonwealth Executive, but a State law of general application may validly regulate the exercise of those capacities.[6]

In Spence v Queensland, a majority of the High Court recognised that the Melbourne Corporation doctrine applies reciprocally to the Commonwealth and that the relevant inquiry in this context is whether a State law:[7]

… is directed at the Commonwealth so as to impose some special disability or burden on the exercise of powers and fulfilment of functions of the Commonwealth which curtails the capacity of the Commonwealth to function as a government.

It was ultimately unnecessary for the Court to determine the application of this 'reciprocal Melbourne Corporation' principle in Spence, so the precise limits of the principle, including its interaction with the Cigamatic doctrine, remain unclear.
 
Nevertheless, how the immunity applies will depend on various circumstances, such as whether the State laws in question apply to transactions the Commonwealth chooses to enter, or how the Commonwealth wishes to exercise its capacities — for example, what it wishes to do with property. 
 
Importantly, the concept of the 'Commonwealth' for the purpose of this immunity is narrow (i.e. the Executive). It does not necessarily apply to individual officers and may not extend to Commonwealth statutory bodies.

Other types of Commonwealth/State law interactions

Questions of implied immunity can sometimes be avoided, where the Constitution expressly deals with the interaction between Commonwealth and State laws. For example:

• Where State and Commonwealth laws address the same subject matter or operate inconsistently, s 109 of the Constitution might invalidate or render inoperative that State law to the extent of the inconsistency. 
• Where the Commonwealth has exclusive power to deal with certain matters, such as 'Commonwealth places' under the power s 52(i) of the Constitution.
• Where there is an express immunity, such as s 114 of the Constitution, which prevents the Commonwealth and the States from imposing taxes on each other's property.

Conclusion

Our federal structure gives rise to complex legal questions, including when a Commonwealth law potentially affects a State, or a State law affects the Commonwealth. The VGSO has extensive experience in identifying and advising on these issues — please get in touch if you would like our assistance.

[1] Amalgamated Society of Engineers v Adelaide Steamship Co Ltd (1920) 28 CLR 129.
[2] Melbourne Corporation v The Commonwealth (1947) 74 CR 31.
[3] Clarke v Commissioner of Taxation (2009) 240 CLR 272; Austin v The Commonwealth (2003) 215 CLR 185.
[4] Re Australian Education Union; Ex parte Victoria (1995) 184 CLR 188. 
[5] After The Commonwealth v Cigamatic Pty Ltd (1962) 108 CLR 372.
[6] As stated in Re Residential Tenancies Tribunal; Ex parte Defence Housing Authority (1997) 190 CLR 410.
[7] [2019] HCA 15, [108] (Kiefel CJ, Bell, Gageler and Keane JJ).

Contact our team

The VGSO regularly advises on the application of the implied freedom of political communication to Victorian legislation, and represents the State of Victoria in litigation in which the implied freedom is raised. If you are a Victorian Government department, agency or statutory authority looking for advice on the implied freedom, please contact us.

Alison O'Brien 
Assistant Victorian Government Solicitor, Public Law & Planning
Phone: 8684 0416
Mobile: 0409 385 343 
Email: alison.obrien@vgso.vic.gov.au

Jessica Cleaver 
Managing Principal Solicitor, Public Law & Planning
Phone: 8684 0402
Mobile: 0458 835 932 
Email: jessica.cleaver@vgso.vic.gov.au

The information is of a general nature only and does not convey or contain legal advice. If you would like to obtain legal advice in relation to any matter discussed on this page, please contact us.