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CORPORATIONS POWER

CORPORATIONS POWER. S.51 (xx) Commonwealth Constitution. S.51 (xx) CORPORATIONS POWER. The Parliament shall have power to make laws with respect to: “ FOREIGN CORPORATIONS, AND TRADING OR FINANCIAL CORPORATIONS FORMED WITHIN THE LIMITS OF THE COMMONWEALTH”. S.51(xx) CORPORATIONS POWER.

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CORPORATIONS POWER

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  1. CORPORATIONS POWER S.51 (xx) Commonwealth Constitution

  2. S.51 (xx) CORPORATIONS POWER The Parliament shall have power to make laws with respect to: “FOREIGN CORPORATIONS, AND TRADING OR FINANCIAL CORPORATIONS FORMED WITHIN THE LIMITS OF THE COMMONWEALTH”

  3. S.51(xx) CORPORATIONS POWER HOW TO ESTABLISH WHETHER A CORPORATION IS A TRADING OR FINANCIAL CORPORATION

  4. S.51(xx) CORPORATIONS POWER • MEANING OF TRADING AND FINANCIAL CORPORATIONS: • R v Federal Court of Australia and Adamson; ex parte Australian National Football League: • Majority of HCA answered “yes” to Q whether football leagues and clubs are trading corporations • Majority applied ACTIVITIES test ie: -whether trading activities of a trading corporation form a sufficiently significant proportion of overall activities ofcorporation

  5. MEANING OF TRADING and FINANCIAL CORPORATIONS • R v Federal Court of Australia and Adamson; ex parte Australian National Football League • Majority in applying ACTIVITIES TEST overruled earlier St George County Council case, which applied purposes test • Judgments of: • Mason J • Stephen J (minority)

  6. MEANING OF TRADING and FINANCIAL CORPORATIONS • State Superannuation Board Victoria v Trade Practices Commission: • Majority HCA held SSB Vic was a financial corporation • For financial corporation, its financial activities do NOT have to be the PREDOMINANT activities of corporation • Financial activities need ONLY form a sufficiently significant proportion of all the financial corporation’s activities,BUT must not be insubstantial

  7. MEANING OF TRADING and FINANCIAL CORPORATIONS • State Superannuation Board Victoria v Trade Practices Commission: • Activities not prevented from being trading when done in undertakings not primarily referable to trade • Where corporation begins business (ie lack of trading activities) may need to look at formation purposes (eg articles of association) • Contrast Majority: Mason, Murphy, Deane JJ • Minority: Gibbs CJ and Wilson J

  8. REGULATING THE ACTIVITIES OF CORPORATIONS WHICH ACTIVITIES OF A CORPORATION CAN BE REGULATED UNDER THE S.51 (xx) CORPORATIONS POWER?

  9. REGULATING THE ACTIVITIES OF CORPORATIONS Q: What aspects or activities of a corporation can be regulated using the S.51(xx) Corporations power? . Actors and Announcers Equity Association v Fontana Films: . HCA upheld s.45D TPA as law with respect to corporations . S.51(xx) Corporations power covered BOTH the REGULATION and the PROTECTION of trading activities of trading corporations

  10. REGULATING THE ACTIVITIES OF CORPORATIONS • Actors and Announcers Equity Association v Fontana Films: • Discussion by HCA in context of S.45D TPA of HOW FAR the regulatory aspects of the s.51(xx) Corporations power might extend: • Gibbs CJ (narrowest reading) • Stephen J (see also Brennan J) (intermediate reading • Mason J (liberal reading) • Murphy J (even broader reading)

  11. REGULATING THE ACTIVITIES OF CORPORATIONS • Commonwealth v Tasmania (Tasmanian Dams Case) • Legislation: World Heritage Properties Conservation Act (Cth): key provisions ie ss 7 and 10 • Majority HCA (Mason, Murphy, Brennan and Deane JJ): • found Tas Hydro Electric Cmn WAS a TRADING CORPORATION • S.51(xx) would support the World Heritage Properties Conservation Act (Cth)

  12. REGULATING THE ACTIVITIES OF CORPORATIONS • Tasmanian Dam Case, 1st issue: • Judgments re HEC trading corporation status: • Mason J • Murphy J • Brennan J

  13. REGULATING THE ACTIVITIES OF CORPORATIONS • Tasmanian Dams Case, 2nd issue: • WHICH activities of trading and financial corporations can be controlled under s.51(xx)? • IE arises re validity of activities regulated under s.10 of World Heritage Properties Conservation Act (Cth) • Mason, Murphy and Deane JJ: s.51(xx) power extends to regulating corporate activities BEYOND trading activities • Brennan J: more restricted view • WHAT therefore 4 judge MAJORITY opinion stands for on this point

  14. REGULATING THE ACTIVITIES OF CORPORATIONS • Tasmanian Dams Case: • Contrasting judgments of: • Mason J • Gibbs CJ

  15. REGULATING THE ACTIVITIES OF CORPORATIONS • Re Dingjan; Ex parte Wagner: Tasmanian Pulp and Forest Holdings Ltd (The Constitutional Corporation - NOT a party to the contract) Timber harvested and transported to the mill by (The Independent Contractors – The Wagners) WHO Entered into sub-contracts with (The Dingjans- The Sub-Contractors, supported by TWU, sought review and variation of their contract under S.127A.TPA before HCA)

  16. REGULATING THE ACTIVITIES OF CORPORATIONS • Industrial Relations Act 1988 (Cth): IRC granted power to examine unfair contracts imposed on INDEPENDENT CONTRACTORS • S.127 B: A power to set aside the contracts wholly or in part or varied under s.127B

  17. REGULATING THE ACTIVITIES OF CORPORATIONS • S.127B power extended only to cases where the relevant contract fell within Commonwealth Constitutional power under S.127 C (1): • In relation to a contract to which a constitutional corporation is a party • In relation to a contract relating to the business of a constitutional corporation • In relation to a contract entered into by a constitutional corporation for the purposes of the business of the corporation

  18. REGULATING THE ACTIVITIES OF CORPORATIONS • Re Dingjan; Ex parte Wagner: • As the constitutional corporation was NOT a party to the contract, (the contract being between the Wagners and the Dingjans) (a) and (c) of S.127 were not available • THEREFORE, only basis for Act to apply is s.127 C (1) (b)

  19. REGULATING THE ACTIVITIES OF CORPORATIONS • Re Dingjan Ex Parte Wagner: IMPORTANT ISSUES • Relevance of aspects of ACTIVITIES TEST for the law to be a law WITH RESPECT to the s.51(i) CORPORATIONS POWER • Whether HCA now leans towards relevant test as CHARACTERISATION of the law as a law with respect to a head of constitutional power, as per the approach of Stephen J and Brennan J in Fontana Films • How, for the relevant law, (ie here the Industrial Relations Act 1988 (Cth))the degree of relevance to, or connection with, the s.51 (xx) Corporations power is in fact described and interpreted

  20. REGULATING THE ACTIVITIES OF CORPORATIONS • Re Dingjan; Ex parte Wagner: • HELD 4-3 that: • S.127 C (1)(b) “in relation to a contract relating to the business of a constitutional corporation” (here applying to non-corporations) could NOT be supported under s.51 (xx) Corporations power

  21. REGULATING THE ACTIVITIES OF CORPORATIONS • Re Dingjan; Ex parte Wagner: • Majority judgments: • Toohey J • McHugh J • Brennan J • Dissenting judgments: • Gaudron J • Mason CJ

  22. REGULATING THE ACTIVITIES OF CORPORATIONS • Quickenden v O’Connor: Full Court of Federal Court • Workplace Relations Act 1996 (Cth): • Q objected to being bound by certified agreement between UWA and NTEU • Q argued: • (a) UWA not a trading or financial corporation, therefore not a “constitutional corporation” for purposes of certified agreement provisions • (b) That certified agreement provisions not laws with respect to trading or financial corporations

  23. REGULATING THE ACTIVITIES OF CORPORATIONS • Quickenden v O’Connor: Application of Re Dingjan Ex parte Wagner: • Black CJ and French J: Corporations power validly supports a law that applies expressly or specifically to constitutional corporations in their capacity as such corporations OR to other persons or bodies in their dealings with such corporations or their conduct in relation to them

  24. REGULATING THE ACTIVITIES OF CORPORATIONS • Quikenden v O’Connor: Application of Re Dingjan Ex parte Wagner: • Carr J: • Constitutional validity of a law based on corporations power • Q of characterisation is now whether such a law relates in some way to trading activities of trading corporation • Q is to be answered by ascertaining whether there is a sufficient connection or some discriminatory application to corporations

  25. CONSTITUTIONAL POWER OF INCORPORATION S.51(xx) “FORMED within the limits of the Commonwealth” New South Wales v Commonwealth (Incorporation case) Corporations Act 1989 (Cth) s.114 unlawful to incorporate a company under the company law of a state or territory if the company would be, on incorporation, a trading or financial corporation

  26. CONSTITUTIONAL POWER OF INCORPORATION NSW v Commonwealth (Incorporation Case): States claimed Act invalid as it provided for the INCORPORATION OF COMPANIES or PREVENTED COMPANIES being incorporated under the company law of a state

  27. CONSTITUTIONAL POWER OF INCORPORATION • NSW v Commonwealth: • Majority denied Commonwealth power to provide for incorporation: • (1) Past tense of “formed” • (2) Drafting history of s.51(xx) against power to incorporate • (3) Huddart Parker: Unanimous judgment that subject matter of s.51(xx) confined to corporations in existence and does NOT extend to the creation of corporations • DISSENTING JUDGMENT OF DEANE J

  28. REFERRAL OF INCORPORATION POWER OF STATES TO THE COMMONWEALTH • Corporations Act 2001 (Cth) and Australian Securities and Investments Commission Act (Cth): new regulatory framework for corporations • Referral of power by States to Commonwealth as example of co-operative federalism under s.51(xxxvii) of Commonwealth Constitution: • “Matters referred to the Parliament of the Commonwealth by the Parliament or Parliaments of any State or States, but so that the law shall extend only to States by whose Parliaments the matter is referred, or which afterwards adopts the law”

  29. CONSTITUTIONAL POWER OF INCORPORATION • In effect re-enacts Commonwealth, State and Territory Corporations law as a single federal law • Aspect of incorporation now handled by Australian Securities and Investments Commission

  30. PPL LAW 203: CONSTITUTIONAL LAW END OF CONSTITUTIONAL LAW SECTION OF Principles of Public Law

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