McCloy v New South Wales

• Jurisdiction: Australia Federal only
• Court: High Court (Australia)
• Judge: French CJ,Kiefel,Bell,Keane JJ.,Gageler J.,Gordon J.
• Judgment Date: 07 October 2015
• Neutral Citation: [2015] HCA 34
• Docket Number: S211/2014
• Date: 07 October 2015

[2015] HCA 34

HIGH COURT OF AUSTRALIA

French CJ, Kiefel, Bell, Gageler, Keane, Nettle and Gordon JJ

S211/2014

Jeffery Raymond Mccloy & Ors

Plaintiffs

and

State of New South Wales & Anor

Defendants

Representation

D M J Bennett QC with I D Faulkner SC, A K Flecknoe-Brown and B A Mee for the plaintiffs (instructed by Toomey Pegg Lawyers)

M G Sexton SC, Solicitor-General for the State of New South Wales and J K Kirk SC with A M Mitchelmore for the first defendant (instructed by Crown Solicitor (NSW))

Submitting appearance for the second defendant

Interveners

J T Gleeson SC, Solicitor-General of the Commonwealth with C L Lenehan for the Attorney-General of the Commonwealth, intervening (instructed by Australian Government Solicitor)

G R Donaldson SC, Solicitor-General for the State of Western Australia with K A T Pedersen for the Attorney-General for the State of Western Australia, intervening (instructed by State Solicitor (WA))

P J Dunning QC, Solicitor-General of the State of Queensland with A D Keyes for the Attorney-General of the State of Queensland, intervening (instructed by Crown Law (Qld))

M G Evans QC with D F O'Leary for the Attorney-General for the State of South Australia, intervening (instructed by Crown Solicitor (SA))

K L Walker QC with A D Pound for the Attorney-General for the State of Victoria, intervening (instructed by Victorian Government Solicitor)

Constitution, ss 7, 24, 62, 64, 128.

Election Funding, Expenditure and Disclosures Act 1981 (NSW), Pt 6, Divs 2A, 4A, s 96E.

McCloy v New South Wales

Constitutional law — Implied freedom of communication on governmental and political matters — Provisions of Election Funding, Expenditure and Disclosures Act 1981 (NSW) impose cap on political donations, prohibit property developers from making such donations, and restrict indirect campaign contributions — Whether provisions impermissibly burden implied freedom of political communication.

Words and phrases — ‘appropriate and adapted’, ‘deference’, ‘implied freedom of communication on governmental and political matters’, ‘margin of appreciation’, ‘proportionality’.

ORDER

The questions stated by the parties in the special case dated 28 January 2015 and referred for the opinion of the Full Court be answered as follows:

Question 1

Is Division 4A of Part 6 of the Election Funding, Expenditure and Disclosures Act 1981 (NSW) invalid (in whole or in part and, if in part, to what extent) in its application to the plaintiffs because it impermissibly burdens the implied freedom on communication on governmental and political matters contrary to the Commonwealth Constitution?

Answer

In so far as Division 4A prohibits the making by a property developer of a political donation or acceptance of a political donation from a property developer, it is not invalid. It does not impermissibly burden the implied freedom of communication on governmental and political matters contrary to the Constitution.

iQuestion 2

Is Division 2A of Part 6 of Election Funding, Expenditure and Disclosures Act 1981 (NSW) invalid (in whole or in part and, if in part, to what extent) in its application to the plaintiffs because it impermissibly burdens the implied freedom of communication of governmental and political matters contrary to the Commonwealth Constitution?

Answer

No.

Question 3

Is s 96E of the Election Funding, Expenditure and Disclosures Act 1981 (NSW) invalid in its application to the plaintiffs because it impermissibly burdens the implied freedom of communication of governmental and political matters contrary to the Commonwealth Constitution?

Answer

No.

Question 4

Who should pay the costs of the special case?

Answer

The plaintiffs.

French CJ, Kiefel, Bell AND Keane JJ.

Introduction

1 The Election Funding, Expenditure and Disclosures Act 198(NSW) (‘the EFED Act’) imposes restrictions on private funding of political candidates and parties in State and local government elections in New South Wales. The plaintiffs contend in this special case that provisions of the EFED Act, which impose a cap on political donations, prohibit property developers from making such donations, and restrict indirect campaign contributions, are invalid for impermissibly infringing the freedom of political communication on governmental and political matters (hereinafter ‘the freedom’), which is an implication from the Australian Constitution.

2 As explained in the reasons that follow, the question whether an impugned law infringes the freedom requires application of the following propositions derived from previous decisions of this Court and particularly Lange v Australian Broadcasting Corporation1 and Coleman v Power2:

• A. The freedom under the Australian Constitution is a qualified limitation on legislative power implied in order to ensure that the people of the Commonwealth may ‘exercise a free and informed choice as electors.’ 3 It is not an absolute freedom. It may be subject to legislative restrictions serving a legitimate purpose compatible with the system of representative government for which the Constitution provides, where the extent of the burden can be justified as suitable, necessary and adequate, having regard to the purpose of those restrictions.

• B. The question whether a law exceeds the implied limitation depends upon the answers to the following questions, reflecting those propounded in Lange as modified in Coleman v Power:

  • 1. Does the law effectively burden the freedom in its terms, operation or effect?

    If ‘no’, then the law does not exceed the implied limitation and the enquiry as to validity ends.

  • 2. If ‘yes’ to question 1, are the purpose of the law and the means adopted to achieve that purpose legitimate, in the sense that they are compatible with the maintenance of the constitutionally prescribed system of representative government 4? This question reflects what is referred to in these reasons as ‘compatibility testing’.

    The answer to that question will be in the affirmative if the purpose of the law and the means adopted are identified and are compatible with the constitutionally prescribed system in the sense that they do not adversely impinge upon the functioning of the system of representative government.

    If the answer to question 2 is ‘no’, then the law exceeds the implied limitation and the enquiry as to validity ends.

  • 3. If ‘yes’ to question 2, is the law reasonably appropriate and adapted to advance that legitimate object 5? This question involves what is referred to in these reasons as ‘proportionality testing’ to determine whether the restriction which the provision imposes on the freedom is justified.

    The proportionality test involves consideration of the extent of the burden effected by the impugned provision on the freedom. There are three stages to the test — these are the enquiries as to whether the law is justified as suitable, necessary and adequate in its balance in the following senses:

    suitable — as having a rational connection to the purpose of the provision 6;

    necessary — in the sense that there is no obvious and compelling alternative, reasonably practicable means of achieving the same purpose which has a less restrictive effect on the freedom;

    adequate in its balance — a criterion requiring a value judgment, consistently with the limits of the judicial function, describing the balance between the importance of the purpose served by the restrictive measure and the extent of the restriction it imposes on the freedom.

    If the measure does not meet these criteria of proportionality testing, then the answer to question 3 will be ‘no’ and the measure will exceed the implied limitation on legislative power.

3 As noted, the last of the three questions involves a proportionality analysis. The term ‘proportionality’ in Australian law describes a class of criteria which have been developed by this Court over many years to determine whether legislative or administrative acts are within the constitutional or legislative grant of power under which they purport to be done. Some such criteria have been applied to purposive powers; to constitutional legislative powers authorising the making of laws to serve a specified purpose; to incidental powers, which must serve the purposes of the substantive powers to which they are incidental; and to powers exercised for a purpose authorised by the Constitution or a statute, which may limit or restrict the enjoyment of a constitutional guarantee, immunity or freedom, including the implied freedom of political communication. Analogous criteria have been developed in other jurisdictions, particularly in Europe, and are referred to in these reasons as a source of analytical tools which, according to the nature of the case, may be applied in the Australian context.

4 Acceptance of the utility of such criteria as tools to assist in the determination of the limits of legislative powers which burden the freedom does not involve a general acceptance of the applicability to the Australian constitutional context of similar criteria as applied in the courts of other jurisdictions. It does not involve acceptance of the application of proportionality analysis by other courts as methodologically correct. The utility of the criteria is in answering the questions defining the limits of legislative power relevant to the freedom which are derived from Lange.

5 As explained in the reasons that follow, while the impugned provisions effectively burden the freedom, they have been enacted for legitimate purposes. They advance those purposes by rational means which not only do not impede the system of representative government provided for by the Constitution, but enhance it. There are no obvious and compelling alternative, reasonably practicable means of achieving the same purpose. The provisions are adequate in their balance. The burden imposed on the freedom is therefore justified as a...