Background

The plaintiff, Mr Gary Spence, was a former president of the Liberal National Party of Queensland. Mr Spence initiated a proceeding after Queensland amended the Electoral Act 1992 (Qld) (the Queensland Electoral Act) and the Local Government Electoral Act 2011 (Qld) (together, the Queensland Electoral Acts) in May 2018. The amendments prohibited property developers from making gifts to political parties which endorsed and promoted candidates for election to the Legislative Assembly of Queensland and to local government councils in Queensland.

In November 2018, the Commonwealth passed legislation inserting Div 3A into Pt XX of the Commonwealth Electoral Act 1918 (Cth) (the Commonwealth Electoral Act). Relevantly, this new Division included s 302CA. That section was framed to permit a gift to a political party registered under the Commonwealth Electoral Act, despite any State or Territory electoral law, if the gift, or a part of the gift, was required to be used or might be used to incur expenditure for the dominant purpose of influencing voting in an election to the House of Representatives or to the Senate.

Decision

The Special Case raised numerous questions. Those questions and their short answers can be found in the judgment of the majority – Kiefel CJ, Bell, Gageler and Keane JJ – at paragraph [112].

The majority also summarised the ‘gist of those answers’ at paragraph [5]. In effect, the majority held that s 302CA of the Commonwealth Electoral Act was beyond Commonwealth legislative power to the extent that it purported to immunise from State law the making of a gift which merely might be used to incur expenditure for the dominant purpose of influencing voting in a federal election. The majority found that the impugned State electoral laws were not invalid or inoperative on any of the various bases upon which they were challenged.

In dissent and each writing separately – Nettle, Gordon and Edelman JJ – found, among other things, that s 302CA was within Commonwealth legislative power.

Discussion

Validity of Queensland legislation – Commonwealth exclusive power in respect of elections

The primary argument advanced by the Commonwealth and the plaintiff was that the amendments introduced into the Queensland Electoral Acts were invalid because they trenched upon an exclusive power of the Commonwealth Parliament “to regulate federal elections”: [37].

This argument was unsuccessful. The impugned State laws were laws regulating State elections. That such laws may have a practical impact on the federal electoral process did not have the consequence that the laws were beyond State legislative power – even if the State laws ‘touch and concern federal elections more than incidentally’: [48], [50].

Section 109 and validity of Commonwealth legislation

The Commonwealth and the plaintiff argued that the 2018 amendments to the Queensland Electoral Acts were inoperative by force of s 109 of the Constitution to the extent of the application of s 302CA of the Commonwealth Electoral Act: [51].

The validity of s 302CA turned on the question of its characterisation and, in particular, the sufficiency of its connection with the subject matter of the conferral of legislative power – being ‘federal elections’: [70]. The majority appeared to support recourse to the concept of proportionality in this context, observing that ‘consideration of the purposes which the law is or is not appropriate and adapted to achieve may illuminate the required connection to the relevant head of power’: [63].

The majority considered that the ultimate purpose of s 302CA was to protect a source of funds which might, but need not, be deployed by a political entity in a federal electoral process: [79]. The connection of s 302CA to a federal election was considered ‘nothing more than a bare possibility’: [56].

The majority contrasted the tenuous connection between s 302CA of the Commonwealth Electoral Act and the federal electoral process, with the section’s purpose to confer an immunity from State laws in respect of subject matters outside the subject matter of Commonwealth legislative power. The majority concluded that s 302CA could not be supported as a law incidental to federal electoral processes to the extent that it authorised the giving, receipt and retention of a gift that might never be used for any federal electoral purpose: [83]

Being incapable of severance, s 302CA was found wholly invalid: [90], [91].

In dissent, Nettle J found that s 302CA was a valid law of the Commonwealth which prevailed over inconsistent State laws by reason of s 109 of the Constitution: [145]. His Honour observed that if this were not the case, Commonwealth control of donations for Commonwealth electoral purposes could be frustrated by the simple device of donors who intend and expect their donations to be used for Commonwealth electoral purposes stipulating that donations may be used for Commonwealth electoral purposes: [141].

Also in dissent, Gordon J found that s 302CA was within power: [156], [196]-[231]. In reaching this view, her Honour undertook a detailed analysis of the Commonwealth Electoral Act: [167]-[195]. In the view of Gordon J, it was not a bare or mere possibility that a gift may be used for federal electoral purposes that attracted the operation of s 302CA. To put it in that way overlooked both the character of the recipient as a participant in federal elections and the fact that exclusions applied if the gift was allocated for State or Territory electoral purposes: [189]. Justice Gordon found that the impugned State laws were directly inconsistent with s 302CA and were invalid on that basis [269]-[271].

Justice Edelman was also of the view that s 302CA was within Commonwealth legislative power: [357].

Implied freedom of political communication

The plaintiff also argued that the amendments introduced into the Queensland Electoral Act were invalid on the basis that they impermissibly burdened the constitutionally implied freedom of political communication. The impugned provisions reflected legislation upheld by the Court in McCloy v New South Wales (2015) 257 CLR 178.

The plaintiff sought to distinguish McCloy on the basis that Queensland did not have the same recent history of corruption associated with land development applications occurring at the level of State government as had New South Wales: [94].

The majority rejected this argument, observing that Australian States were not “little laboratories” required to conduct their own experiments or rely on their own experiences, before one State could be justified in taking legislative action to address a risk of harm to its system of government highlighted by occurrences in another State: [96]-[97].

Justices Gordon and Edelman also found the plaintiff could not succeed on this point: [264]; [326].

In contrast, Nettle J reiterated his Honour’s dissent in McCloy on the basis that the discriminatory nature of the prohibition, applying as it did to property developers, could not be justified: [114]-[119].

Inter-governmental immunity

The plaintiff also argued that the amendments to the Queensland Electoral Acts were invalid on the basis that they infringed the doctrine of inter-governmental immunities expounded in the Melbourne Corporation v Commonwealth (1947) 74 CLR 31: [98].

The majority acknowledged that the structural implication reflected in Melbourne Corporation had a reciprocal operation that was not displaced merely because s 109 allowed a Commonwealth law to be used as a shield: [103].

However, in order to transgress this principle, the test is whether the impugned State law imposed some special disability or burden on the exercise of powers and fulfilment of functions of the Commonwealth which curtailed the capacity of the Commonwealth to function as a government: [108]. The majority found that the impugned State laws did not have this operation: [109].

Justice Gordon also found that the State law was not invalid on this basis, as did Edelman J: [266], [320].

Spence raises a lot of issues that we may well see develop in subsequent decisions of the Court – such as the place of proportionality in the characterisation of legislation and the reciprocal or reverse application of the doctrine derived from Melbourne Corporation. In the meantime, it gives us much to think about.