French, Justice Robert --- "Co-operative federalism - a constitutional reality or a political slogan" (FCA) [2004] FedJSchol 21

Western Australia 2029;

A Shared Journey

State Conference 17-19 November 2004

Co-Operative Federalism

- A Constitutional Reality or a Political Slogan

Justice RS French

Federal Court of Australia

Introduction – How to think about cooperative federalism

Sometime in the late 1980s I heard a case in the Federal Court in which the application of an Act of the Western Australian State Parliament was raised. It was the Stamp Act. That Act required that certain documents could not be used in proceedings in Court unless stamp duty had been paid on them. Counsel who was trying to put an unstamped document in evidence argued that, in the Federal Court, the Stamp Act of the State of Western Australia should be treated as the law of a foreign country. On that basis, if his opponent wanted to rely upon it to exclude the document, he would have to prove the Stamp Act as a matter of fact. It was an argument borne more of desperation than ingenuity and was gently but swiftly put out of its misery. What was interesting about it was the vision it evoked of a federation comprising six foreign countries in a kind of antipodean version of the European Union.

Extraordinary as that vision is, it provides a starting point from which to think about the features of the Australian federation that allow it to operate as one country rather than as six. It invites consideration of the extent to which the tension between State autonomy and the need to function effectively as one nation in a competitive global environment can be resolved cooperatively and within the framework of the Constitution.

An analogous and historically based Western Australian way of looking at the question is to think about secession. Secession involves becoming a foreign country in relation to the rest of Australia. That is what many Western Australians wanted to do in the 1930s. The difficulties that generated their movement and led to the presentation of a case for secession to the British Parliament involved perceived discrimination against Western Australia by the policies of the national government. These included national policies on tariffs which were seen as favouring Eastern States manufacturing industries to the detriment of Western Australian export industries, discriminatory interstate public transport policies and conflicting State and Federal industrial relations regimes – see Sharman, Secession and Federalism, Proceedings of the Samuel Griffiths Society Vol 3 Ch 6.

Federation is and remains a widespread response to the problem of combining people from a variety of historical and sometimes cultural and ethnic backgrounds into viable national communities. The distinguished Australian constitutional scholar, Professor Geoffrey Sawer, writing in 1976, defined what he called the basic federal principles. They are:

(a) a country which, taken as a whole, is a nation state, an independent unit from the point of view of international relations and law, is provided with a set of institutions required for the work of government, having authority over the whole of that country;

(b) the country is also divided into a number of geographical areas, each of which is also equipped with a set of institutions required for the work of government in that area;

(c) the power to govern is distributed between the centre and the regions in such a way that each set of governmental institutions has a direct impact on the individual citizens and other legal persons within its area of competence;

(d) the distribution of competence between centre and regions is effected by a Constitution (usually written) having a fair degree of rigidity, so that its basic terms are ‘entrenched’. They cannot be amended at the sole discretion of the centre or of any region or combination of regions;

(e) the Constitution provides rules to determine conflicts of authority between the centre and the regions where, but for the conflict, the activity in question would have been within the competence of each of them;

(f) the distribution of competence between the centre and the regions is interpreted and policed by a judicial authority which can make authoritative determinations about the validity of governmental acts (including legislation) where these are said to be beyond the competence of the centre or a region or where the conflict rules referred to above have to be applied.

Although he thought it a futile exercise to try to define ‘federalism’ Professor Sawer considered it appropriate to speak of what another scholar had called ‘the spectrum of federalism’– that is the range of reactions to the situation in which:

‘geographical distribution of the power to govern is desired or has been achieved in a way giving the several governmental units of the system some degree of security – some guarantee of continued existence as organisations and as holders of power.’ [1]

Although there is a range of ways in which federations can be constructed, human nature being what it is, it seems impossible to devise a constitutional structure for a federal state that will immunise it against conflict or tension between its component parts. Federalism, involving as it does, a multiplicity of governments, transaction costs associated with that multiplicity and the potential for duplication and inefficiency are inescapable. This is particularly so when the governments of the component parts of the federation have differing and sometimes conflicting legislative and administrative programs and want to debate the distribution and application of public resources. Western Australians will be thoroughly familiar with the phenomenon of real and sometimes staged conflict between their State Government and their Federal Government. Indeed, they will have noticed that it does not seem to matter whether the Governments are of the same or a different political colour. The phenomenon still occurs and generates deep and long suffering cynicism.

The words ‘cooperative federalism’ have been used to describe a range of mechanisms to manage the conflict, duplication, costs and inefficiencies that can arise in the operation of a federation. The importance of such mechanisms to the effective functioning of the federation is obvious. Whether that importance is positively recognised in the Constitution is not so obvious.

In a judgment of the High Court given in 1999 in a case called Re Wakim,[2] the Court held that State Parliaments could not, even with the consent of the Commonwealth Parliament, confer jurisdiction on federal courts to hear and determine matters arising under State corporations laws as part of a national corporations scheme. McHugh J posed the constitutional question – How can a State Parliament invest a federal court with a jurisdiction which the Parliament of the Commonwealth, which has created the court, cannot invest in that Court? The answer to his own rhetorical question was a disturbing one:

‘Cooperative federalism is the chief answer given by the parties and the interveners supporting the validity of the legislation. But cooperative federalism is not a constitutional term. It is a political slogan, not a criterion of constitutional validity or power. It records a result reached as the result of a State and the Commonwealth legislating within the powers conferred on them by the Constitution.’[3]

His Honour did not deny that there is a concept of cooperative federalism. He denied that it has a part to play in constitutional interpretation. His comment probably sounds wider than it was. It was nevertheless applied, as was the reasoning of the majority of judges in that case, to strike down a sensible, cooperative arrangement to which the Commonwealth and all of the States had agreed. The existence of cooperation and agreement did not guarantee constitutional validity. There were many, however, who thought it ought to have mandated a more cautious approach by the High Court to constitutional construction in relation to cooperative arrangements.

Reactions by some academic critics were trenchantly critical. One of Australia’s most distinguished constitutional scholars Professor Leslie Zines referred to the reasoning of the Court as ‘doctrinal basket weaving’.[4] Dennis Rose QC described the majority judgments as ‘... deeply and pervasively flawed ... based on striking non sequiturs, a failure to take account of essential provisions of the legislation and of oral and written submissions to the Court’.[5] Professor George Williams, using less colourful language, accepted that the approach taken by the High Court in Re Wakim was open to it but that it was neither compelling nor necessary to do so. He said:

‘... in choosing between the available options, the majority did not take account of the rationale of the scheme and rejected as normative guidance the previously accepted notion that cooperative federalism ought, as a general rule, to be fostered and encouraged. Instead the majority reached a decision that served no countervailing policy choice.’ [6]

The distribution of power between Commonwealth and States set out in the Commonwealth Constitution reflects the objectives of what has been called ‘coordinate federalism’.[7] It involves the transferring of particular responsibilities and powers to the central government leaving the balance of the regions.

The distribution of power however brings into existence the boundaries which define it. Limits are placed on the powers of the centre and of the regions, in this case of the Commonwealth and the States. Because it involves divided powers the Constitution gives Australia no standard gauge railway for good government across the country and across the component parts of the federation. To solve national problems which cannot be covered by the legislative powers of the Commonwealth alone demands the coordinated and therefore cooperative use of governmental power from all units of the federation. This is cooperative federalism.

Having so stated the general problem it is helpful to consider briefly how the federation came to be, how the Constitution allows for the possibility of cooperative federalism and the mechanisms by which such cooperation can occur.

The Birth of the Commonwealth

On the occasion of the 175th anniversary of the establishment of Western Australia it is appropriate to look back briefly at its origins and how, with the other Australian colonies, it became part of a successful and stable federal democracy.

The world’s first federation was formed by the thirteen colonies of the United States in 1788. It was in that year that Governor Phillip arrived in Sydney to govern the new colony of New South Wales. That arrival began the process of the creation of the Australian colonies which were to become the States of the Australian Federation. In 1823, New South Wales established its first legislative body and a Supreme Court. In 1825, it hived off Tasmania as a separate colony.

In May 1829, the event occurred which we celebrate with this conference. The British Parliament passed the Swan River Colony Act 1829 [8]. It had a sunset clause under which it was only to operate for five years to 1834. It was extended by subsequent British Acts until it was overtaken by statutes of general application to the Australian colonies. It provided for a rudimentary legislature – 3 or more persons resident in the colony ‘to make, ordain and establish all such Laws, Institutions and Ordinances and to Constitute such Courts and Offices as may be necessary for the Peace, Order and Good government of His Majesty’s subjects and others within the said Settlements’. In 1834, South Australia was created as a province by Imperial Statute[9].

Representative government developed in the colonies through the passage of the Imperial Statutes known as the Australian Constitutions Act 1842 and the Australian Constitutions Act 1850. The Constitutions Act 1850 empowered the Australian colonies to make their own Constitutions. Tasmania’s was made in 1854 and New South Wales and Victoria followed suit in 1855. In 1859, Queensland was carved out of New South Wales pursuant to authority conferred upon the New South Wales legislature by the 1842 and 1850 Imperial Acts.

By 1859 the six colonies that were to form the States in the Australian Federation were in existence and were developing the institutions of representative government. The last of them to do so, Western Australia, did not establish its representative government until 1890 when the Constitution Act 1889 was authorised by the Imperial Parliament.

By 1890 there was one continent with six colonies with representative governments, each independent of the other and each deriving all of its powers from the authority conferred upon its legislature by the British Parliament. That independence and their early representative institutions were fearlessly defended. There were some top down attempts by the British authorities and particularly by Earl Grey in the 1840s to fast forward the development of a federal legislature. These were strongly resisted. Earl Grey did go so far as to commission Sir Charles Fitzroy, the Governor of New South Wales, with four separate commissions appointing him Governor of Tasmania, South Australia, Victoria and Western Australia as well under the general designation ‘Governor-General of all Her Majesty’s Australian possesses including the colony of Western Australia.

The real impetus for federation came from within Australia. It was apparent as Professor Darryl Lumb has observed:

‘The coexistence of six colonies on the Australian continent independent of each other in local policies, although united by common law, nationality and similar institutions of government, could not be the basis for a permanent constitutional system.’ [10]

The concept of nationality no doubt referred to the common status of the colonists as British subjects. But there was tied up with that concept of nationality a wider perception of a people or race. At the turn of the nineteenth century Australians used the term ‘people’ and ‘race’ interchangeably.[11] This was also an element which fed into early approaches to immigration restriction and the white Australia policy. Bob Birrell describes how, when Alfred Deakin introduced the Immigration Restriction Bill 1901 which supported the white Australia policy, he spoke of a desire to be one people without the admixture of other races. Birrell characterises his words as reflecting an aspiration for ‘a shared sense of peoplehood... to be expected from a nationalist initiating the process of nation building’.[12] It was reflected in Henry Parkes’ statement during the Constitutional Conventions of the 1890s when the Australian Constitution was being drafted that:

‘The crimson thread of kinship runs through us all.’

He had used the same metaphor in 1889 at the opening of a railway when he spoke of ‘the crimson fluid of kinship pulsing through all iron veins’.

Other concerns that underlay the push for federation included worry about the colonising activities of France and Germany in the Pacific region and the need to get rid of trade barriers between the colonies.

The Constitution was drafted through the Conventions of the 1890s, accepted by a referendum and then authorised by a Statute of the British Parliament. The Commonwealth came into existence on 1 January 1901. It may properly be said that the very distribution of powers in the Constitution was an emanation of an essentially cooperative vision adopted by the founding fathers. Its function and its content reflected the agreement reached by the six colonies and accepted by a majority of their people. Against this background, to speak of cooperative federalism as a ‘political slogan’ is to risk trivialising the historical process which was also a political process which brought the Constitution into being. These considerations lead to the next question, which is ‘What are the indicators that the Constitution in effect ‘recognises’ and creates opportunities for cooperative federalism?’

Textual Markers of Cooperative Federalism

The Constitution involves the agreed transfer of powers from colonial governments to the new Commonwealth covering a range of subject matter areas set out, for the most part in s 51. Even within those specified areas of Commonwealth power there are indicators of opportunities for cooperative federalism in the exercise of legislative powers. So the Commonwealth Parliament may make laws for the peace, order and good government of the Commonwealth with respect to:

‘(xxiv) The service and execution throughout the Commonwealth of the civil and criminal process and the judgments of the courts of the States.

(xxv) The recognition throughout the Commonwealth of the laws, the public Acts and records, and the judicial proceedings of the States.

(xxxiii) The acquisition with the consent of the State, of any railways of the State on terms arranged between the Commonwealth and the State.

(xxxiv) Railway construction and extension in any State with the consent of that State.

(xxxvii) 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 adopt the law.

(xxxviii) The exercise within the Commonwealth, at the request or with the concurrence of the Parliaments of all the States directly concerned, of any power which can at the establishment of this Constitution be exercised only by the Parliament of the United Kingdom or by the Federal Council of Australasia.’

Chapter III of the Constitution dealing with the judicature contains provisions under which the courts of the various States are to be repositories for the exercise of such federal jurisdiction as is conferred upon them by the Commonwealth Parliament. This is in addition to the power that the Commonwealth Parliament has to create its own courts and define their jurisdiction. Section 77 of the Constitution authorises the Parliament to make laws defining the jurisdiction of federal courts and laws:

‘77(iii) Investing any court of the State with federal jurisdiction.’

Section 80 of the Constitution, which requires that the trial on indictment of any offence against any law of the Commonwealth be by jury, also requires that ‘... every trial shall be held in the State where the offence was committed, and if the offence was not committed within any State, the trial such be held at such place or places as the Parliament prescribes.’ It is also linked to the Commonwealth’s ability to use State courts for the exercise of federal jurisdiction arising under the criminal law of the Commonwealth. It also is linked to the Commonwealth’s ability to use State prisons.

In Chapter IV there are provisions mandating distribution of Commonwealth revenue to the States – see ss 87, 89, 93 and 94. Section 96, which provides for conditional financial grants from the Commonwealth to the States, supported the uniform income tax scheme. The Commonwealth Parliament passed an Act to grant general revenue to the States on the condition that they did not impose their own income tax. Grants made under s 96 have, by way of the conditions attaching to them, allowed the Commonwealth to exercise powers with respect to education, health, housing, the environment and other areas not covered by its legislative responsibilities. It is in form, if not in substance, a provision which requires cooperation in the limited sense that no State is obliged to accept a financial grant under s 96 on conditions which it does not regard as acceptable.

Section 105 of the Constitution allows for the Parliament of the Commonwealth to take over from the States their public debts. Although initially limited to debts existing at the time of federation, that limitation was removed in 1910 by referendum. In 1928 s 105A was added to the Constitution by referendum. It authorises the Commonwealth to make agreements with the States with respect to their public debts.

The Constitutions of the States reflecting, in the case of Western Australia, its pre-federation colonial constitution, are continued by s 106 of the Commonwealth Constitution. The powers of the State Parliaments are saved by s 107, as are the laws of the various States by s 108.

States may surrender territory to the Commonwealth under s 111, again an essentially cooperative exercise. It was by such a surrender that the Australian Capital Territory was created and similarly the Northern Territory of Australia. Section 118 provides for full faith and credit to be given throughout the Commonwealth to the laws, public Acts and records and judicial proceedings of every State. Every State is required by s 120 of the Constitution to make provision for the detention in its prisons of persons accused or convicted of offences against the laws of the Commonwealth and for the punishment of the persons convicted of such offences. Other exercises of power which require the consent of the States, include the alteration of their limits and the creation of new States (ss 123 and 124).

As may be seen from this review the Constitution does make provision for what can properly be described as cooperative federalism in a way that takes that expression out of the scope of a mere political slogan.

The Ways in Which Cooperative Federalism is Achieved

Cooperation between the Commonwealth and the States may relate to the exercise of legislative, executive or judicial power.[13] By making suitable arrangements Commonwealth and States, acting together, can ‘... achieve objects that neither alone could achieve’.[14]

Legislative cooperation may involve the delegation of legislative power. An example of such delegation by the Commonwealth to a State was the Ashmore and Cartier Islands Acceptance Act 1933 which delegated legislative power over the external territory of the Ashmore and Cartier Islands to the Governor in Council of Western Australia. A similar result was achieved by somewhat different means in the application to the Cocos-Keeling Islands and Christmas Island territories of the laws of Western Australia.

The Constitution, in s 51(xxxvii) authorises the Commonwealth Parliament to make laws on matters that are not otherwise within its designated heads of power under the Constitution but which are referred to it by one or more of the States. Although not strictly a species of delegation this is a process by which the States can transfer, albeit temporarily if they wish, legislative power to the Commonwealth.

There have been a number of referrals under this power and it is becoming increasingly important. Referrals of power from the States have covered such diverse areas as meat inspection, State banking, poultry processing and air navigation. All States other than Western Australia referred to the Commonwealth the power to make laws in respect of child custody, guardianship, access and maintenance with a view to overcoming the artificiality of constitutionally derived distinctions based upon the reservation of powers about those matters to State Parliaments. Western Australia, with a State-based Family Court capable of exercising federal jurisdiction, does not have the problem of jurisdictional divides that exist in the other States and required the referral.

A significant example of the use of the referral power is that which led to the Mutual Recognition Act 1992 (Cth). The process which culminated in its enactment provides an interesting case study of consensus building towards a cooperative referral.

In 1991, a Commonwealth-State Committee on Regulatory Reform, which had been set up after the State Premiers’ Conference in 1990, promoted a process of national consultation about mutual recognition of qualifications and regulatory standards. A Discussion Paper was released. Seminars were held in every capital city. The problem identified by the Discussion Paper was the existence in Australia of barriers to trade in goods and services between States and Territories by reason of their differing regulatory environments. It was said in the Discussion Paper:

‘Mutual recognition allows all regulations throughout Australia to co-exist while reducing the current adverse impacts of those regulatory differences.’ [15]

A formal agreement between the Commonwealth, the States and the Territories was signed on 11 May 1992. The Commonwealth passed the Mutual Recognition Act 1992 (Cth) as a law of the Commonwealth following referrals of power by the Parliaments of New South Wales and Queensland. Each of those States enacted a Referral Act. It referred to the Commonwealth the power to make a Mutual Recognition Act in terms set out in the schedule to the State Act. This meant it was not giving the Commonwealth power to make laws generally about mutual recognition but only in terms of the law approved by the State Parliament. The Mutual Recognition Act 1992 passed by the Commonwealth Parliament was adopted by the other States and Territories. Under s 51(xxxvii) of the Constitution a State which has not referred the power may nevertheless subsequently adopt a Commonwealth law made pursuant to the referral of the power by another State. Upon its adoption that Commonwealth law then extends as Commonwealth law to the adopting State.

The mutual recognition legislation is backed up by an agreement between the Commonwealth and the States. Under that agreement undertakings have been given about the use of the power in respect of the referred matters, procedures have been specified for the alteration of the Commonwealth statutes and determination of the references and for a review of the operation of the scheme every three years.

Although the Commonwealth already has constitutional power to make laws with respect to corporations, that power does not extend to their formation. The referral by the States of legislative power with respect to corporations enables the Commonwealth law to deal with the formation of corporations. Because the Corporations Act is now a Commonwealth law, it also enables the Commonwealth to confer jurisdiction with respect to matters arising under the Act on the Federal Court and on relevant State courts. This overcomes the problem created by the decision of the High Court in Re Wakim which held that State parliaments could not, by State law, confer jurisdiction on the Federal Court. There was, as a result of that decision, no national court with original jurisdiction in the field of Corporations Law.

Recently various States have referred power to the Commonwealth to make laws with respect to terrorism. The Western Australian referral was done by a State Act known as the Terrorism (Commonwealth Powers) Act 2002 (WA). The substance of the Act involves reference of the text of an Act which the Commonwealth would be authorised to make pursuant to the reference.

There seems to be a considerable future for the use of the referrals power as a mechanism of cooperative federalism. The former Commonwealth Attorney-General, Darryl Williams QC, delivered a paper in Perth in May 2002 in which he said that serious consideration was being given to references under the Constitution as a simpler and more certain approach to cooperative federalism.

Despite the success of the referral procedure as an exercise in cooperative federalism in relation to corporations and other areas, Professor George Williams has sounded a warning note. The referral of power by the States has the potential to undermine their long term position as partners in the Australian Federation. Professor Williams says of the referral mechanism:

‘Such transfers not only refer legislative power, but may also cause a long term (and perhaps politically irrevocable) shift in political responsibility and policy leadership from the States to the Commonwealth. So long as Australia remains a federal system with a division of powers between the two tiers of government it is not realistic to expect the States to refer power over every issue for which a national scheme is needed.’ [16]

He also points out that the narrow ambit of the references made may be appropriate where the initial content and ambit of the legislation is largely uncontested:

‘...but it may not work in other evolving areas where a higher degree of legislative and policy flexibility is required.’

Fortunately referral is not the only mechanism of legislative cooperation. In 1995, the Commonwealth and State Governments entered the Competition Code Agreement. By that Agreement the States and Territories undertook to submit to their parliaments proposed legislation to implement competition law provisions contained in the schedule to the Agreement. The purpose of the scheme was to apply restrictive trade practices provisions found in Part IV of the Trade Practices Act through the passing of complementary State and Territory laws. Each of the States passed an adopting Act. In Western Australia the relevant Act is the Competition Policy Reform (WA) Act 1996. Each of the Competition Policy Reform Acts originally provided that the Federal Court of Australia had exclusive jurisdiction to hear and determine matters under the Competition Code of each State and Territory. These provisions, however, being provisions of State law purporting to confer jurisdiction on the Federal Court, were repealed following the decision of the High Court in Re Wakim. Proceedings under the Competition Code of the States can now be brought in State and Territory courts. This is an example of State parliaments adopting a common form of statute in the interests of national uniformity on issues seen to be of national significance. The relevant laws are laws of the State whereas laws made pursuant to referrals are laws of the Commonwealth.

States may apply Commonwealth laws as State laws subject to modification. There are a number of examples of this kind of cooperative federalism. A recent example is the adoption by the States of gene technology legislation passed by the Commonwealth and laws relating to research involving human embryos.

Anne Twomey points out that the issue of greatest concern about the adoption of laws is the mechanism for approving amendment to them. This may vary depending upon the terms of the backing agreement. Some require the unanimous support of all participating jurisdictions. Ms Twomey observes:

‘While the principle of unanimity protects the interests of all involved, it may also result in matters being frozen in time because agreement cannot be reached on changes.’ [17]

Mirror legislation is another means of achieving uniformity between the States. Such legislation is less stable than adopted legislation. Inconsistencies may creep in by reason of local modifications over time. The uniform Companies Acts were examples of mirror legislation by agreement between the States.

Cooperation may also be affected through the use of the executive power of the Commonwealth and the States. Joint authorities may be established to carry out particular tasks. Such authorities may involve representation of each of the States and Territories and of the Commonwealth. They may be subject to the approval of a particular ministerial council. One example is the National Road Transport Commission. The Commonwealth Parliament does not have any specific legislative power over road transport. Such powers lie with the States and Territories. Before the National Road Transport Commission was set up in 1991 coordination of the regulation of road transport was undertaken through the Australian Transport Advisory Council. The Ministers for Transport of the Commonwealth, the States and the Territories made up that Council. The impetus for the establishment of the National Road Transport Commission is described in McIntyre and Moore, The National Road Transport Commission: An Experiment in Cooperative Federalism.[18] The authors of the paper observed:

‘By the early 1990s, there was a widespread perception that the division of powers under Australia’s federal system was acting as an impediment to economic efficiency and that this impediment had to be addressed to enable Australia to maintain a competitive position in an increasingly difficult world economic environment. At this time there was a perception in the road transport industry and amongst transport policy makers that the efficiency of road transport was impeded as it was a national industry suffering from differential regulatory treatment by States and Territories.’

Some of the differences pointed out by the authors included standards for heavy vehicles, including their weights and dimensions, permitted hours of driving, work and vehicle charges. The Commission was established in January 1992. It operates under a Commonwealth Statute and intergovernmental agreements known as the Heavy Vehicles Agreement and the Light Vehicles Agreement are attached as schedules to the Act.

A still developing area of quite complex cooperative federalism relates to the establishment and operation of the national electricity market in the Eastern States of Australia. In 1989 the Industry Assistance Commission delivered a report to the Commonwealth Treasurer which described the gas and electricity industries as particularly inefficient.[19] A follow-up report delivered in 1991 found an urgent need for reform of the electricity and gas sectors. At a special premiers conference held in that year an agreement was reached that a National Grid Management Council be established to consider arrangements for an interstate electricity network. In the event the National Grid Management Council recommended to the Council of Australian Governments that there be established a competitive market in the trading of electricity. In May 1996 New South Wales, Victoria, Queensland, South Australia and the Australian Capital Territory entered into an agreement known as the National Electricity Market Legislation Agreement. Each of them agreed to enact a National Electricity Law with South Australia as the lead jurisdiction. The National Electricity Law is a schedule to the National Electricity (South Australia) Act 1996I (SA). It is applied as a law of South Australia by s 6 of that Act and has been applied and adopted as the law of the other participating States by their own State statutes. The National Electricity Law provides that the Ministers of the participating jurisdictions may approve a code of conduct called the National Electricity Code. The participating jurisdictions have also established a National Electricity Code Administrator (NECA) as a company incorporated under the Corporations Act 2001 and limited by guarantee. The participating jurisdictions are members of the company. NECA administers the national electricity market in accordance with the requirements of the National Electricity Code. The system is under further review, but provides an interesting and complex example of cooperative federalism, albeit the Commonwealth is not a party to the agreement or to the relevant legislation – for a more detailed account of the establishment of the National Electricity Market see Australian Gaslight v Australian Competition and Consumer Commissioner (No 3) [2003] FCA 1525; (2003) ATPR 41-966 at [20] – [31]. Further coordination is being developed with the recent passage of the Australian Energy Market Act 2004.

There is a large number of Acts of Parliament which allow arrangements to be made between Commonwealth and State governments to give effect to the statute or to confer functions or duties on officers of the other jurisdictions. One area of executive cooperation that has generated some difficulty is the conferring on Commonwealth officers of duties under State law. Under the old Corporations Law of the States breaches of the law were to be prosecuted by the Commonwealth Director of Public Prosecutions. In R v Hughes (2000) 202 CLR 535, the High Court held that a State Parliament does not have power to invest functions in Commonwealth officers directly. However the Commonwealth Parliament can through its incidental legislative power allow Commonwealth officers to carry out functions and accept appointments in addition to their Commonwealth office. The High Court, however, would have held invalid a provision of a State law purporting to impose a duty upon a Commonwealth officer.

The area of cooperative federalism in respect of the judiciary has already been mentioned in the context of Chapter 3 of the Constitution which expressly permits the Commonwealth Parliament to confer federal jurisdiction on State courts. There is no equivalent provision allowing State legislatures to confer jurisdiction on Federal courts to deal with matters of state law. There is nevertheless still ample room for cooperation within the judiciary. It is of particular interest to note recent instances in which members of one State Supreme Court have sat as temporary members of another. In a recent case involving an appeal to the New South Wales Court of Appeal in which Justice Heydon, formerly of that Court, was named as a respondent, Chief Justice Malcolm of the Supreme Court of Western Australia sat with Justice McPherson of the Queensland Court of Appeal and Justice Ormiston of the Victorian Court of Appeal to constitute a special bench of the New South Wales Court of Appeal. When Justice Ipp of the Western Australian Supreme Court was seconded to the New South Wales Court of Appeal for 12 months, judges of that Court visited Western Australia to sit on appeals in the Supreme Court of this State.

There is scope for the increased use of mixed interstate benches to determine issues of national importance which may not necessarily fall for consideration by the High Court within an appropriate timeframe. Decisions of such mixed interstate benches would also help to develop more consistency between the appellate courts of the States in matters of common significance. Such a bench could be constituted as a sitting of the Appeal Court of one of the States. The judges of other States and indeed a judge of the Federal Court could be appointed on a temporary basis to the particular court concerned to make a composite bench which could operate, in effect, as an intermediate national court of appeal. The availability of opportunities to sit in other courts might also have the effect of strengthening the sense of the whole Australian judiciary as one judiciary, despite the fact that there are separate State and Territory Supreme Courts. The opportunity to participate in the development of the law nationally may also make the State Supreme Courts more attractive to potential appointees.

Conclusion

It is a striking feature of the Australian Federation today that despite the frictions which exist between the Commonwealth and the States from time to time, there is an increasing incidence of sophisticated intergovernmental arrangements which, in a cooperative way, enable the Commonwealth and the States and Territories to address problems of national concern without the risks of constitutional challenge or the uncertain necessities of formal amendments to the Constitution. Such consensual arrangements leave room for the pluralism and diversity that can be a benefit of federation by providing opportunities for the cross fertilisation of ideas from one local setting to another.

Nevertheless it may be somewhere, sometime it will be thought appropriate to amend the Constitution in such a way as to provide more directly for cooperative arrangements and particularly for State laws conferring functions and duties by arrangement with the Commonwealth, upon Commonwealth officers.

Western Australia, which has sometimes had a reputation for being brought in as the last joiner in cooperative arrangements, as it was the last joiner in the Commonwealth Constitution, has the expertise to be in the forefront of the development of cooperative federalism in a way that preserves its own legitimate State interests.

[1] Sawyer, Modern Federalism Pitman (1976) at 2

[2] Re Wakim; Ex parte McNally(1999) 198 CLR 511

[3] Re Wakim at 557

[4] Zines, ‘The Present State of Constitutional Interpretation’ in Stone and Williams (eds) The High Court at the Cross Roads; Essays in Constitutional Law at 231, 238

[5] Rose, ‘The Bizarre Destruction of Cross Vesting’ in Stone and Williams (eds) at 186

[6] Williams G., Cooperative Federalism and the Rival of the Corporations Law: Wakim and Beyond (2002) 20 Company and Securities Law Journal 160 at 163

[7] Sawer op cit at 54

[8] 20 Geo IV c 22

[9] 4 and 5 Will IV c 95

[10] Lumb RD, Australian Constitutionalism (Butterworths 1983) at 47

[11] Birrell, Federation: The Secret Story, Duffie and Snellgrove (2001) at 287

[12] Ibid at 287

[13] For the descriptive overview that follows I have drawn in part upon the helpful outline of cooperative arrangements in Twomey The Constitution of New South Wales, Federation Press (2004) at 386 et ff.

[14] Deputy Federal Commissioner of Taxation (NSW) v WR Moran Pty Ltd [1939] HCA 27; (1939) 61 CLR 735 at 774 (Starke J)

[15] Commonwealth-State Committee on Regulatory Reform, The Mutual Recognition of Standards and Regulations in Australia Discussion Paper (Canberra 1991)

[16] Williams op cit at 168

[17] Twomey op cit at 822

[18] Paper presented to the Public Law Discussion Group, Faculty of Law, Australian National University, 17 July 2001.

[19] Industries Assistance Commission – Government (Non-Tax) Charges Vol 1 1989