Section 51(xx) of the Australian Constitution, is a subsection of
Section 51 of the Australian Constitution
Section 51 of the Constitution of Australia enumerates the legislative powers granted to Federal Parliament by the Australian States at Federation.
The list contains 39 subsections, each referred to as a 'head of power' under which the parliamen ...
that gives the
Commonwealth Parliament
The Parliament of Australia (officially the Federal Parliament, also called the Commonwealth Parliament) is the legislative branch of the government of Australia. It consists of three elements: the monarch (represented by the governor-g ...
the power to legislate with respect to "foreign corporations, and trading or financial corporations formed within the limits of the Commonwealth". This power has become known as "the corporations power", the extent of which has been the subject of numerous judicial cases.
Jurisprudence to 1971
After the
High Court's decision in ''
Huddart, Parker & Co Ltd v Moorehead
''Huddart, Parker & Co Pty Ltd v Moorehead''. is a List of High Court of Australia cases, leading decision by the High Court of Australia that dealt with two issues under the Australian Constitution, the identification and extent of judicial pow ...
'' (1909),
the "corporations" power was largely ignored as a basis for Commonwealth legislation. The majority judges agreed in this case that the power should be construed narrowly, though they were unable to agree on any appropriate interpretation. Their approach reflected the perceived need to protect
"the reserved powers of the States", an idea abandoned in 1920 as a result of the ''
Engineer' case''.
[.] Justice Issacs dissent in ''Huddart, Parker & Co.'' gave a broad meaning to s 51(xx) but attempted to set limits to the power, in particular pointing out:
:* it is exerciseable wherever these specific objects are found, irrespective of whether they are engaged in foreign or interstate commerce, or commerce confined to a single State
:* the power is to operate only on corporations of a certain kind, namely, foreign, trading, and financial corporations
:* it is not a power to create or dissolve corporations
:* it is not restricted to internal company regulation
:* it is concerned with the regulation of the conduct of the corporations in their transactions with, or as affecting, the public
It was not until 1971, when ''Huddart, Parker & Co.'' was overruled in ''
Strickland v Rocla Concrete Pipes Ltd
''Strickland v Rocla Concrete Pipes Ltd'',. also known as the ''Concrete Pipes Case'', is a High Court of Australia case that discusses the scope of the corporations power in section 51(xx) of the Australian Constitution. This was an important c ...
'', that the modern development of the power began. In that case, the leading judgment was delivered by
Chief Justice Barwick, who, although agreeing that Isaacs' dissent in ''Huddart, Parker & Co.'' conformed to the reasoning in ''Engineers'', refused to define the scope of the corporations power. He stated instead that "the decision as to the validity of particular laws yet to be enacted must remain for the Court when called upon to pass upon them".
Corporations subject to the power
The High Court in ''
New South Wales v Commonwealth (1990)
''New South Wales v The Commonwealth'', the Incorporation Case,. was a decision handed down in the High Court of Australia on 8 February 1990 concerning the corporations power in s51(xx) of the Commonwealth Constitution. The states of New ...
'' (the Incorporation Case) confirmed that the ambit of the corporations power extends only to corporations that have already been formed, and, therefore, it does not include the power to incorporate them. It extends only to domestic corporations of a trading or financial character, and to all corporations formed outside Australia, and they are collectively referred to as "constitutional corporations".
In most of the early cases, the question of what aspects or activities of a corporation can be regulated under s 51(xx) was not directly addressed. Some incidental points were clarified in ''R v Australian Industrial Court; Ex parte CLM Holdings Pty Ltd''. That case established that, where the activities of a s 51(xx) corporation were validly regulated, the conduct of individual persons taking part in those activities, such as company directors, could incidentally be regulated as well.
In ''Actors and Announcers Equity Association v Fontana Films Pty Ltd'', the Court still did not deal directly with the regulation of a corporation's activities. The whole Court upheld a section that protected a corporation against a
secondary boycott
Secondary may refer to: Science and nature
* Secondary emission, of particles
** Secondary electrons, electrons generated as ionization products
* The secondary winding, or the electrical or electronic circuit connected to the secondary winding ...
. The legislative purpose thus upheld was ''protection'' of corporations rather than ''regulation'' of them. The case also provided an opportunity for extensive discussion of how far the "corporations" power might extend.
''
The WorkChoices case'' provides the current definition for the extent of the corporations power, as noted in its majority opinion:
:* the regulation of the activities, functions, relationships and the business of the specified types of corporation
:* the creation of rights, and privileges belonging to such a corporation
:* the imposition of obligations on it
:* the regulation of the conduct of those through whom it acts, its employees and shareholders and, also, the regulation of those whose conduct is or is capable of affecting its activities, functions, relationships or business
:* including laws prescribing the industrial rights and obligations of corporations and their employees and the means by which they are to conduct their industrial relations
Characteristics of trading and financial corporations
Whether a corporation falls within the group of "trading or financial corporations" has been the focus of much attention and debate. The dominant issues revolve around the type of corporation and the nature of the activities that characterise it as falling within s. 51(xx). In that regard:
:* A constitutional corporation can be a "trading corporation" and a "financial corporation" at the same time
:* A "trading corporation" is one where trading is a substantial or significant part of its activities, and that determination is irrespective of the purpose for which the corporation formed (''Quickenden v O'Connor'')
::* A trading corporation can be found to exist on the basis of the nature of its established activities (the "activities test"), or with respect to the objects for which it was incorporated (the "purpose test")
::* "Trading activities" are those that involve some form of buying and selling, and generate revenue, regardless of whether carried out at a profit (''R v Federal Court of Australia; Ex parte WA National Football League ("Adamson's case")'')
::* The type of ownership is not materiala State corporation established to generate electricity has been held to be subject to regulation (''
Tasmanian Dam case
''Commonwealth v Tasmania'' (popularly known as the ''Tasmanian Dam Case'') was a significant Australian court case, decided in the High Court of Australia on 1 July 1983. The case was a landmark decision in Australian constitutional law, and w ...
'')
::* Where a corporation has not yet commenced trading (i.e., a
shelf company
A shelf corporation, shelf company, or aged corporation is a company or corporation that has had no activity. It was created and left with no activity – metaphorically put on the "shelf" to "age". The company can then be sold to a person or g ...
), it can still be subject to regulation based on its objects of incorporation (''Fencott v Muller'')
::* however, the High Court, in a controversial ruling, has held that a municipal corporation was to be distinguished from a trading corporation, notwithstanding the fact that it carried out trading activities (''R v Trade Practices Tribunal; Ex parte St George County Council '')
:* A "financial corporation" is one that engages in substantial financial activities or intends to do so, but it is not necessary for such activities to be predominant or characteristic of ithowever, a corporation that carries on substantial financial activities in the course of carrying on its primary business will be classified as a financial corporation (''State Superannuation Board of Victoria v Trade Practices Commission'')
See also
*
WorkChoices
WorkChoices was the name given to changes made to the federal industrial relations laws in Australia by the Howard Government in 2005, being amendments to the ''Workplace Relations Act 1996'' by the ''Workplace Relations Amendment (Work Choices ...
*
Workplace Relations Act 1996
The ''Workplace Relations Act 1996'' was an Australian law regarding workplace conditions and rights passed by the Howard government after it came into power in 1996. It replaced the previous Labor Government's ''Industrial Relations Act 1988' ...
References
Further reading
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{{DEFAULTSORT:Section 51(Xx) Of The Australian Constitution
Australian constitutional law