September 14

High Court performing well

In three recent decisions the High Court has reminded the Federal Parliament that its powers are limited by the Constitution.  In an age of rampant centralism on both sides, this is timely. Their Honours are to be commended. They are doing what the Constitution intended.

Two of the decisions related to legislation introduced by the former Howard government, one by the Rudd government.

…federal taxation on State MP’s pensions…

The latest, Clarke v Commissioner of Taxation [2009] HCA 33  invalidated legislation introduced by former Treasurer Peter Costello to extend the 15% superannuation surcharge to state MP’s. The surcharge has since gone, but the media has presented this as state politicians escaping tax. It is far more important than that.

As Chief Justice French said, the legislation had significantly interfered with the remuneration arrangements made between the State and its legislators and, to that extent, significantly burdened the exercise by the State of its powers and functions in fixing the remuneration of its legislators.

The former Treasurer Peter Costello had earlier unsuccessfully tried to extend the surcharge to judicial pensions, which have long been non- contributory. Accordingly, retired judges received none of the concessions available to most people receiving superannuation.  The surcharge was unfair. This would have been most marked where the retired judge died soon after retirement and paying the very substantial surcharge. There would have been be no refund to his estate.   I was involved in lobbying about this; Mr. Costello would not yield but an earlier High Court decision found the surcharge on such pensions to be unconstitutional: Austin v Commonwealth (2003) 215 CLR 185  ( See Anne Twomey: Federal limitations  on the legislative power of the States and the Commonwealth to bind one another  )

…military courts replacing courts martial….

Then there was the military courts decision in August , Lane v Morrison [2009] HCA 29. The High Court found the legislation  establishing the courts said was not supported by the defence power. The  old courts martial were. If parliament wants to establish military courts, they must conform with the Constitution.

…” appropriations power”….

Earlier in Pape v Commissioner of Taxation [2009] HCA 23  the plaintiff   Bryan Pape challenged the validity of the legislation giving certain Australians a bonus of $900 as part of the government’s economic stimulus package. While upholding the validity of legislation, the Court indicated that the power of the Commonwealth to make appropriations is not unlimited.

That is, there are limits on the power of the Federal Parliament to spend the taxes collected from the population. These can only be allocated, as the Constitution says, for the “purposes of the Commonwealth.” 

This decision makes it clear that Parliament does not have an absolute discretion to determine those purposes – they have to be in accordance with the Constitution.

…costs disincentive…

One of the great disincentives to the sort of public interest case which Mr. Pape commendably brought is costs.  

These are not only the costs of the plaintiff; these are also the additional costs which can be awarded if the plaintiff loses. Normally a court will make an order against the losing party to pay an assessed part of the costs of the winning party.

In this case the parties agreed that each would pay his or its own costs. I asked Mr. Pape at the recent Samuel Griffith Conference in Adelaide how he had negotiated this. He said it was after the Chief Justice Robert French suggested he look at an earlier decision of his on costs in public interest litigation. After this the Commonwealth Solicitor General contacted Mr Pape to discuss this matter.

 The Chief Justice is to be commended for this; public interest litigation is important, particularly when significant constitutional issues are raised.

Some years ago when I chaired the Press Council I recommended we intervene in the case brought by former NZ PM David Lange against the ABC ( Lange v ABC 1997 [1997] HCA 25; (1997) 189 CLR 520) which raised freedom of speech issues of concern to the Council .   I recommended to the Council that we seek to file an amicus curiae brief rather than seeking leave to intervene. A major reason was that no order of costs was likely; whether the Court would allow me to present the brief at the hearing was another matter.

The Court did, also advising the journalists' union that while their application for leave to intervene was refused, they too might file an amicus curiae brief.



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