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Simpson, Amelia --- "Sweedman v Transport Accident Commission: State Residence Discrimination and the High Court's Retreat into Characterisation" [2006] FedLawRw 13; (2006) 34(2) Federal Law Review 363

  • FACTS AND PROCEEDINGS BELOW
  • THE HIGH COURT DECISION
  • SOME CONCERNS ABOUT THE S 117 REASONING
  • CONCLUSIONS
  • SWEEDMAN V TRANSPORT ACCIDENT COMMISSION: STATE RESIDENCE DISCRIMINATION AND THE HIGH COURT'S RETREAT INTO CHARACTERISATION

    Amelia Simpson[∗]

    This Comment considers the High Court's recent decision in Sweedman v Transport Accident Commission.[1] The issue dealt with at greatest length in the judgments was the suggested conflict between New South Wales and Victorian enactments and the related suggestion that constitutional principles would enliven to resolve this conflict. A second issue, the potential application of the s 117 prohibition on State residence discrimination, attracted less detailed treatment. Nevertheless, the Court's resolution of this second issue is significant in its apparent departure from the approach taken in the landmark case of Street v Queensland Bar Association.[2] While this Comment will explain the Court's reasoning on both issues, analysis of the decision will focus on the s 117 issue.

    In short, my criticism is this: by treating the s 117 dispute as a question of characterisation, and avoiding all reference to the reasonableness of the Victorian regime and its policy on extending indemnity, the joint judgment seems to undercut the promise of a truly substantive understanding of discrimination in the s 117 context. The analysis in Sweedman retreats from the Court's earlier acceptance, evident in Street, of the significant judicial discretion that is implicated when judges apply comparative concepts like 'discrimination'. Whereas Street foreshadowed a shouldering of responsibility for the policy evaluation inherent in these assessments, Sweedman suggests that the present Court is unwilling to engage in the kind of candid exposition that is involved in discharging that kind of responsibility.

    FACTS AND PROCEEDINGS BELOW

    The case arose out of a car accident occurring in New South Wales on 20 July 2006. The accident involved Mrs Sweedman, a New South Wales resident driving a car registered in New South Wales, and Mr and Mrs Sutton, Victorian residents whose car was registered in Victoria.

    The Suttons claimed and received compensation for their injuries from the Victorian Transport Accident Commission ('TAC'), a statutory corporation established by the Transport Accident Act 1986 (Vic) ('the Victorian Act'). Broadly speaking, that Act establishes a no fault compensation scheme, administered by the TAC, for victims of road accidents occurring in Victoria and/or involving Victorian residents or vehicles.[3] By s 109 of the Victorian Act, a transport accident charge is collected from all owners of Victorian-registered vehicles. This money goes into the statutory fund out of which compensation payouts are made.[4] By s 94, owners and drivers of Victorian-registered vehicles are indemnified for loss and injury resulting from their involvement in accidents. Anyone not protected by s 94 — including non-Victorians driving vehicles not registered in Victoria — can be pursued by the TAC in an action to recover costs. Section 104(1) allows the TAC to seek indemnity from such persons where their fault contributed to injuries compensated under the Victorian Act.[5]

    In April 2002, the TAC invoked this statutory right to indemnity against Mrs Sweedman. It commenced proceedings in the County Court of Victoria, seeking to recover from Sweedman — in practice, from her third-party insurer — the amount paid to the Suttons as compensation under the Victorian Act. The County Court reserved a series of questions for the Court of Appeal of Victoria.[6] The essence of these questions was as follows:

    1 An extraterritoriality issue: Does the Victorian Act s 104(1), as a matter of construction, give the TAC rights against Mrs Sweedman?

    2 A choice of law issue: If the case involves the exercise of federal jurisdiction, does the Judiciary Act 1903 (Cth) ss 79, 80 affect the Victorian Act's operation?

    3 Commonwealth constitutional issues: Is the Victorian Act s 104(1) invalid or inapplicable to Mrs Sweedman by operation of ss 117 or 118 of the Constitution, or constitutional principles relating to inconsistency between State laws?

    Counsel for Mrs Sweedman evidently conceded the extraterritoriality point before the Court of Appeal — and the Court agreed that such an operation for s 104(1) of the Victorian Act was both intended and constitutionally permissible.[7] The Court of Appeal also rejected Sweedman's argument that the proceedings were in tort and in federal jurisdiction, such that the choice of law rule that would be 'picked up' by the Judiciary Act ss 79, 80 favoured the law of New South Wales. While it was accepted that federal jurisdiction and the Judiciary Act were enlivened, Nettle JA found the claim was not tort-based but rather was 'enforceable as a quasi-contractual cause of action in the nature of a quantum meruit'.[8] This meant that the applicable choice of law rule actually pointed to Victorian law as the law to govern the proceedings.

    On the constitutional issues, the Court of Appeal rejected Sweedman's argument that the Victorian Parliament lacked the constitutional competence to regulate the liability of New South Wales residents for accidents occurring in New South Wales.[9] It also rejected the claim of s 117 discrimination, finding that the Victorian legislative scheme's denial of benefits to persons who had not paid vehicle registration charges in Victoria was not relevantly discriminatory.[10]

    THE HIGH COURT DECISION

    In the High Court the case for the appellant Sweedman focused on the constitutional arguments that had been put, unsuccessfully, in the Court of Appeal.[11] The position of the respondent TAC was supported by the intervening Attorneys-General for Victoria and New South Wales. The Commonwealth, South Australia and Western Australia also intervened. In the result, a 5:1 majority dismissed the appeal, with Callinan J dissenting. This section of this Comment will examine the issues raised and the positions taken in the three High Court judgments. The next section will explore the significance of the majority joint judgment's reasoning on s 117 and raise some concerns about the approach taken there.

    Inconsistency as between State laws:

    The appellant contended for a principle of inconsistency, arising seemingly by implication from the federal principle underlying the Commonwealth Constitution, that would resolve 'clashes' between the laws of different States. Specifically, she asserted that various provisions of the Victorian Act, including s 104(1), came into conflict with provisions of the Motor Accidents Act 1988 (NSW) ('the NSW Act') when the former sought to attach legal consequences to accidents occurring in New South Wales. The suggested inconsistency principle was developed by the appellant in terms familiar from the High Court's s 109 inconsistency jurisprudence (eg, 'operational inconsistency') and also the common law constitutional jurisprudence on extraterritoriality (eg, 'nexus' test).[12] The appellant contended that the Victorian provisions depended for their operation, in this case, upon a pre-existing tort liability established by the NSW Act. Yet by also undermining the policy objectives underpinning the NSW Act, the Victorian provisions gave rise to an 'operational inconsistency' on the facts of this case. The appellant then contended that, of the two Parliaments, the New South Wales Parliament could claim the 'closer nexus' with those facts and the Victorian provisions must therefore be rendered 'inoperative' here.

    The majority joint judgment of Gleeson CJ, Gummow, Kirby and Hayne JJ began its analysis of the inconsistency issue with a series of general propositions. Their Honours noted that there was clearly a sufficient nexus to allow provisions of the Victorian Act an extra-territorial operation.[13] They next noted that inconsistency as between the laws of different States needs to be understood against a backdrop of choice of law rules. Application of those rules ought, in many cases, to resolve particular conflicts that might otherwise throw up inconsistencies.[14] The joint judgment noted, however, that part of the appellant's argument was that these choice of law rules might at times be displaced by 'constitutional imperatives' dictating a different result.[15] Next, the joint judgment noted the existence of a single national common law regime of choice of law rules, which would have dictated the same result in litigation between these parties whether initiated in Victoria or in New South Wales.[16]

    The joint judgment explained that the nature and purpose of the New South Wales legislation weighed against the appellant's claim of inconsistency between State laws. The NSW Act did not set out to establish an exclusive regime for dealing with road accidents occurring in New South Wales. Nor did it attempt to discourage or restrict claims for indemnity like that envisaged by s 104(1) of the Victorian Act, or displace the operation of choice of law rules.[17]

    The choice of law issue was approached in the joint majority judgment in two steps. First, their Honours determined the nature of the legal claim that the TAC was making against the appellant. They agreed with the Court of Appeal's finding that the TAC's action was not in tort, but rather was 'quasi-contractual … in the nature of a quantum meruit'.[18] On that basis, choice of law rules dictated that the governing law be that of whichever State had the closest connection with the obligation to indemnify. The joint judgment found that, on the facts of this case, Victorian law enjoyed the closer connection.[19] Second, the joint judgment considered the consequences, if any, of the proceedings being in federal jurisdiction. Their Honours noted that the enlivening of federal jurisdiction brought s 80 of the Judiciary Act into play. However, in this case, in the absence of any relevant statutory modification to the common law position on choice of law, s 80 simply picked up and applied, unaltered, the common law rule as just described.[20]

    Nevertheless, their Honours acknowledged that the s 80 rule is made subject to constitutional constraints.[21] The appellant suggested two relevant constitutional limits on s 80's operation, one being implied constitutional principles governing the resolution of inconsistencies between State laws, the other being the s 117 prohibition on discrimination based on State residence.

    As to the suggested principles governing inconsistency between State laws, the joint judgment accepted that some such principles must exist and would need to be called upon in some cases to resolve apparent 'clashes' between the laws of different States. However, they avoided committing to any particular formulation of such principles, on the basis that inconsistency was not a live issue on the facts of this case. There was, their Honours said, no direct inconsistency, in the sense of conflicting commands, between relevant provisions of the New South Wales and Victorian statutory regimes.[22] Moreover, any argument for inconsistency that depended overtly upon a 'cover-the-field'-style analysis, as applied under s 109 to inconsistency between Commonwealth and State laws, was considered inappropriate as between States, given that no State enjoys constitutional paramountcy over others.[23]

    The appellant's more nuanced argument for a 'clash' — pointing up the TAC action's tendency to undermine the policy objectives of the New South Wales regime — was also dismissed by the Court, on the basis that it required too great an abstraction from the specific context of the TAC's action against Sweedman.[24] From the vantage point of that action, 'the NSW Act does not speak in any way which impairs or detracts from the pursuit of [the TAC's] claim.'[25] Indeed, the joint judgment noted, actions such as the TAC's constitute such a small fraction of the claims made on NSW third-party insurance funds that they could interfere with the New South Wales Parliament's policy objectives in only the most marginal sense.[26]

    Thus, with no evident inconsistency on the facts, the joint judgment did not need to take a view on the appellant's suggested constitutional principles for resolving such clashes — essentially a test turning on the 'greater governmental interest' of one or other jurisdiction.[27] Nevertheless, their Honours expressed reservations about the proposed test. In particular, they envisaged problems of measurement and commensurability in the weighing of competing 'governmental interests'.[28] They did not, though, give any clues as to what they would regard as a more satisfactory rule or standard for the resolution of inconsistencies between State laws. This, the joint judgment said, 'awaits formulation on another occasion' in a case that raises the issue more squarely.[29]

    Justice Heydon, in a separate judgment, focused on demonstrating the lack of any relevant inconsistency between s 104(1) of the Victorian Act and relevant provisions of the NSW Act. When compared with the joint judgment, Heydon J's reasons give more thorough consideration to the detail of the appellant's inconsistency arguments. He identifies five distinct claims of relevant inconsistency within the appellant's arguments and explains his reasons for rejecting each of these. These explanations reveal a quite specific and narrow conception of what would amount to an inconsistency as between two State laws, a conception inimical to much of the appellant's case. In particular, Heydon J thought that the New South Wales Parliament's policy objectives concerning 'damages' claims could not be relevantly compromised by any rights the Victorian Parliament might create concerning upstream indemnity for damages paid, in view of the different nature of these two legal rights.[30] Moreover, on Heydon J's reading of the New South Wales Act, this latter form of liability had been contemplated by the Parliament and the absence of any provision to curb or control it was no oversight.[31] Having found that the appellant's claims 'satisfy no possible test for inconsistency', he saw no need to examine, or endorse, any of the tests mooted in argument.[32]

    Justice Callinan's dissenting judgment focused on the inconsistency and choice of law issues, opting not to discuss the s 117 issue. In keeping with a now familiar pattern, Callinan J's differences with the majority sprang from his uncompromising views about Australian federalism and the importance of the independence and integrity of States under the Constitution.[33] Justice Callinan characterised the Victorian Act's purported operation in this case as an instance of the 'excessive exercise of long-arm jurisdiction' and charged the majority with contributing to a 'disturbing trend' of 'jurisdictional overreach'.[34]

    Essentially, Callinan J found that there was a significant 'clash' between the laws of Victoria and New South Wales in the circumstances of this case — significant enough to require a constitutionally mandated solution.[35] The clash followed, he said, from important differences in the liability and compensation regimes established under the Victorian and New South Wales statutes.[36] In particular, he pointed to the importance of finality in determinations of liability under the New South Wales regime. He saw this as an intended benefit to New South Wales insurers which the Victorian Act, with its provision for findings of ongoing and extended liability, seemed to strip away, in so far as it exposed those insurers to indemnity claims.[37] It did not matter, he said, that the New South Wales regime had not attempted explicitly to block the application of other States' laws to injuries occurring in New South Wales — inconsistency could be inferred readily enough without such express advertence.[38]

    Justice Callinan's difference with the majority flowed not only from this finding of inconsistency — he also took a different view of the relevant choice of law principles and their application in this case. He explained at length his view that choice of law principles, when properly chosen and applied to the facts, revealed this dispute to be more closely connected with New South Wales than with Victoria. He found that the New South Wales Parliament had the greater connection with and interest in the factual event that gave rise to these proceedings — being a road accident occurring in New South Wales, and involving one vehicle registered there and one driver resident there. While Callinan J thought this dispute was essentially grounded in a tort claim, such that the choice of law principles for tort law would apply, he also took the view that New South Wales probably had the closer connection even on applying other choice of law principles, as the majority had done.[39]

    These two findings — as to inconsistency and choice of law — underpinned Callinan J's arrival at a constitutional solution. He found that the Constitution must recognise and protect New South Wales' pre-eminent — if not entirely sovereign — authority in respect of its own territory.[40] That pre-eminence was threatened here by the purported application of Victorian law that would frustrate 'the objects of the [New South Wales] Act of enabling the early investigation, assessment, and settlement of claims'.[41] The bottom line for Callinan J was that States should not have their legislated policy objectives thwarted by the 'long-arm' operation of another State's laws — and such a restriction on State legislative competency must be implicit in the Constitution's federal arrangements.

    Section 117 discrimination:

    The appellant argued that, by operation of s 104(1) of the Victorian Act upon her, she suffered discrimination on the basis of her State of residence, from which s 117 of the Constitution would immunise her. Had she been a resident of Victoria, she argued, the car she was driving at the time of the accident would likely have been registered in Victoria and she would, therefore, have enjoyed immunity from indemnity proceedings brought under s 104(1) of the Victorian Act.

    The joint judgment gave two reasons for finding s 117 inapplicable in the present case. First, their Honours noted that the appellant had urged the Court to focus upon the 'reality of the situation' before it, in keeping with the s 117 doctrine's emphasis on 'substance and practical operation'.[42] However, they said, this focus was not in fact to the appellant's advantage in this case. The burden of indemnifying the TAC would really be born by her third-party insurer, which as a corporation was not a 'subject of the Queen' enjoying s 117's protection.[43] Thus, if Sweedman suffered no burden in reality, the joint judgment thought it doubtful that there was any 'disability or discrimination' upon which s 117 could operate.

    The other problem that the joint judgment identified with the appellant's s 117 argument centred on the 'ground' on which the alleged discrimination was said to be based. Their Honours noted that s 94 of the Victorian Act — indemnifying owners and drivers of Victorian registered vehicles from liability for injuries caused — was 'not conditioned by residence.'[44] In other words, they thought it significant that the benefit of that indemnity attached because of the place of a vehicle's registration, rather than a person's place of residence. So, a Victorian resident driving a vehicle not registered in Victoria would not enjoy the s 94 indemnity. Conversely, non-Victorian residents would enjoy the indemnity, when driving vehicles registered there.[45] On this basis the joint judgment considered the exemption from liability conferred by s 94 to be 'in a practical if not also legal sense, the consideration for payment of the transport accident charge.'[46] Accordingly, their Honours understood the indemnity not as a privilege reserved to Victorians but rather as a benefit purchased by many Victorians, as well as some non-Victorians. The differential treatment, such that any existed, was not 'attributable to residence', as residence is not the 'discrimen [the law] chooses'.[47]

    Having found that the differential treatment of the appellant, under s 104(1) of the Victorian Act, was not dispensed by reference to her State of residence, the joint judgment saw no need to continue further with its s 117 analysis. That is, their Honours chose not to consider whether the differential treatment might be justified as appropriate and adapted to the attainment of a legitimate policy goal.[48]

    Justice Callinan found it unnecessary to consider the s 117 argument, having grounded his reasons in the inconsistency and choice of law points — though he did allude to the relevance here of the real detriments Sweedman would suffer, as he'd earlier mentioned.[49] Justice Heydon simply agreed with the joint judgment as to the s 117 issue.[50]

    SOME CONCERNS ABOUT THE S 117 REASONING

    As foreshadowed, the analysis in this Comment is directed to the s 117 issue. While the constitutional choice of law and inconsistency issues have been before the High Court several times in recent years and have benefited from detailed scholarly analysis,[51] s 117 has maintained a much lower profile of late. The Sweedman case presented the Gleeson Court's first significant opportunity to delve into discrimination on the basis of State of residence. The last time that the High Court had squarely faced s 117 had been twelve years earlier in Goryl v Greyhound Australia Pty Ltd.[52] The treatment given to the s 117 issue in Sweedman is, accordingly, significant, even while taking up just 13 paragraphs of the joint judgment. As is so often the case in judicial reasoning, what the Court left unsaid in Sweedman may reveal just as much about its position on s 117 as do the views made explicit.

    I will first discuss the emphasis placed on characterisation in the resolution of the Sweedman s 117 problem and explain how this departs, and retreats, from the approach to s 117 analysis outlined in the landmark decision in Street v Queensland Bar Association.[53] Most significant is the Court's fairly thin account of how 'substance' should inform s 117 analysis. This account led it, among other things, to neglect the 'natural concomitant' analysis foreshadowed in Street. Next, I will consider the joint judgment's failure to address the major fault line emerging between the judgments in Street, which concerns the appropriate way of undertaking the balancing necessitated by s 117's concern with discrimination. Finally, I will examine the joint judgment's apparent approach to the identification of the 'burdens' from which discrimination analysis must proceed: an approach which offers some guidance on questions of onus but little on questions of materiality.

    Characterisation over 'substance'

    One widely discernable marker of the High Court's recent return to more legalistic forms of analysis, in its constitutional jurisprudence as elsewhere, is the tendency to resolve disputes at the level of characterisation. Doing so often enables judges to reason to a conclusion in a way that circumvents the need for any sort of analysis — such as the application of a 'balancing' test — that might require overt judicial assessments of a law's 'reasonableness' or any other evaluation of non-legal policy issues and values.[54] In Sweedman, just this sort of manoeuvre is evident in the resolution of the s 117 issue.

    While the decision of the High Court in Street[55] was complicated by the fact that it comprised seven separate judgments, there is one thing on which the judges all agreed — the s 117 limitation should be understood and applied by reference to a substance-based test. It was unnecessary for the Court to elaborate on and refine this test in the subsequent Goryl case — there, the facial nature of the discrimination meant that the case was easily resolved.[56] In Sweedman, however, where the suggested discrimination was not evident on the face of the impugned law, the precise contours of a substance-focused test assumed greater importance.

    The joint judgment in Sweedman revealed a preference for a fairly 'thin' conception of the 'substance' that must inform the application of s 117. The joint judgment emphasises the need to isolate an impugned law's 'discrimen' — the basis on which it draws a distinction among legal subjects — in order to test it against the s 117 prohibition. Their Honours acknowledge, in keeping with Street, that the idea of a law's discrimen must be understood substantively — that is, that the basis on which the law distinguishes among different classes should be considered by reference to more than just the law's explicit terms. In the case before them, their Honours found that the relevant discrimen was, as a matter of substance, the place of a vehicle's registration, rather than the place of residence of its owner and/or driver.[57] Yet it is questionable whether that supposedly substance-focused view in fact scratched deep enough into the law's operational context to really be much of an advance on a form-focused determination.

    Section 104(1) of the Victorian Act, when read in conjunction with associated provisions, indeed did extend the suggested privilege — exemption from indemnity action — by reference to the place of a vehicle's registration. That was certainly true as a matter of legal form. But was it also true as a matter of 'substance', as the joint judgment insisted? The joint judgment noted that the Victorian regime allowed for non-residents to take advantage of its provisions, and so to share in the indemnity enjoyed by those within the scheme. Yet a finding that a legal benefit is theoretically open to all does not equate with a finding that, 'in substance', those benefits are not the preserve of one State's residents. The joint judgment in Sweedman said nothing about the proportion of vehicles registered in Victoria that corresponded to owners or drivers not resident in Victoria. Assuming that such instances represented a tiny fraction of registrations, a solid argument might be made that having one's vehicle registered in Victoria is a 'natural concomitant' of residence in Victoria that should be bundled with that residence for purposes of s 117 analysis.

    This idea of 'natural concomitants' of a person's State of residence emerged in Street. There, a range of views was expressed as to what kinds of distinctions, not themselves constructed around categories of residence and non-residence, might nonetheless amount 'in substance' to discrimination on the basis of residence. Several judges mentioned or alluded to the idea that certain 'natural concomitants' of a person's State of residence might, if used as the basis for a distinction from which disadvantage flowed, infringe the s 117 limitation.[58] Chief Justice Mason explained this idea in a way that emphasised its usefulness in weeding out intentional, but disguised, preferencing of in-State residents.[59] For Brennan J, the idea of natural concomitants of State residence seemed also to contemplate unintended disadvantage suffered by out-of-State residents through the practical operation of a State law.[60] On either understanding of the concept, it seems destined to take judges out of the realm of legalistic analysis, necessitating assessments of the broader social and economic realities against which laws have their impact. It is not surprising, then, that the current High Court, with its well-established majority preference for the avoidance of such assessments, would say nothing about 'natural concomitants' in the course of its analysis in Sweedman.

    The High Court's silence on the potential for this kind of reasoning is made all the more conspicuous by the fact that such analysis was undertaken carefully and at length in the Court of Appeal below. There, the leading judgment of Nettle JA considered carefully the argument that garaging, and thus registering, one's vehicle in Victoria is a natural concomitant of Victorian residence. He noted that under the Victorian Act 'a vehicle cannot or at least should not be registered unless it is ordinarily garaged in Victoria'.[61] This, when combined with 'the reality of car ownership' that people ordinarily garage their cars at or near their homes, led Nettle JA to conclude that the place of vehicle registration is indeed a natural concomitant of State residence. Accordingly, the former could be bundled with the latter for purposes of s 117 analysis.[62] On this footing Nettle JA found prima facie discrimination in s 104(1) of the Victorian Act and proceeded to the next stage of s 117 analysis.[63]

    The preferred balancing modality — continuing uncertainty

    By 'next stage' I am of course referring to the question of whether disadvantageous treatment of out-of-State residents is excusable on some basis, an aspect of s 117 analysis that was sidestepped in the Sweedman joint judgment. In Street there had been unanimous agreement that not all disadvantages referable to out-of-State residence will infringe the s 117 prohibition. While all judgments in Street envisaged some process of balancing the protection for out-of-State residents against competing considerations, they proposed divergent principles and tests for taking this qualification forward. Sweedman presented the High Court with a long awaited opportunity to consolidate, or at least express some preference among, these tests and principles. Disappointingly, though, the entire issue was ducked in the joint judgment, meaning that the long-standing uncertainty continues.

    The approaches to balancing taken in Street are conventionally thought to fall into two main camps. Most judges saw the limits of s 117's reach as best administered by making the prohibition explicitly defeasible. That is, after forming a preliminary view that an impugned law did indeed generate disadvantage for some, which was in substance referable to their State of residence, these judges would then ask a separate, supervening, question. That question, in essence, would be whether the different treatment could be justified by reference to legitimate State policy goals, reflecting the State's special responsibilities to its own citizens.[64] Justice Gaudron, and perhaps also Deane J, favoured a more holistic view. They saw any relevant policy considerations as factors going to the very existence of discrimination, which was defined as different treatment without adequate justification.[65] In the subsequent case of Goryl Dawson and Toohey JJ doubted that the difference that emerged in Street was material or meaningful, even while offering no explanation for this view.[66]

    Sweedman takes that denial a step further, by ignoring the difference altogether. The joint judgment did not even enter into a discussion of whether or not the impugned distinction in the Victorian Act was justifiable. In insisting that this distinction was not based on or referable to a person's State of residence, it deftly avoided engaging with questions of its reasonableness or justifiability. A fleeting nod to this aspect of s 117 analysis might be found in the comment that the transport accident charge, levied under s 109 of the Victorian Act, represented the 'consideration' for the indemnity extended to some under ss 94 and 104(1).[67] Beyond that, however, the only reference to balancing is in the joint judgment's refusal to engage in it. In concluding their s 117 discussion, their Honours insist:

    It is unnecessary to consider, on the footing that there was a disability or discrimination attributable to residence, whether this was appropriate and adapted (sometimes described as 'proportional') to the attainment of a proper objective.[68]

    Even while denying the need for any balancing analysis, the joint judgment is here issuing conflicting signals as to which approach might be favoured if and when the Court addresses the issue. On the surface, the quoted statement uses language that seems consistent with a preference for the layered, defeasibility-based approach to balancing. Yet the accompanying citation is to a case from a different constitutional discrimination context in which the holistic approach of Gaudron J was seemingly endorsed.[69]

    This elision, and non-discussion, of the distinct balancing models emerging from Street stands in sharp contrast with the approach taken in the Court of Appeal, where Nettle JA was at pains to tease out the alternatives and apply them systematically.[70] The High Court's non-clarification of this aspect of its s 117 jurisprudence means that litigants, and lower court judges, will be forced to continue the practice adopted by Nettle JA of considering particular problems against a string of differently formulated tests. Nettle JA's assured execution of this task shows that in particular cases it may prove merely cumbersome, rather than paralysing. Nevertheless, the States, at least, were likely hoping for some further clue as to how the Court will approach the balancing question in future cases. If nothing else this might clarify precisely where within the High Court's broader constitutional non-discrimination jurisprudence the most useful analogies might be found.[71]

    In any event, both of the alternative balancing modalities emerging from Street clearly involve judicial evaluation of the policy objectives underlying a State law and the reasonableness with which the law pursues those objectives. Hence it may not be surprising that the current Court would prefer to say nothing than to venture unnecessarily into this uncomfortable territory.

    Identifying 'burdens': issues of onus and materiality

    A further way in which the Sweedman majority seems to have curtailed the scope of the s 117 limitation concerns its approach to identifying the 'burdens' against which the limitation protects. Recall that the joint judgment attached significance to what it saw as the 'practical reality' of the suggested burden flowing from s 104(1) of the Victorian Act. Their Honours noted that 'it was not asserted that [the appellant] had any direct personal financial interest in the outcome of the case' and that her third-party insurer was evidently the bearer of any discriminatory burden flowing from s 104(1).[72]

    The significance of this is of course that third party insurers are not 'subjects of the Queen' and so do not enjoy the personal immunity conferred by s 117 of the Constitution. However, even if the appellant did not specifically advance the point, some degree of personal burden might nevertheless be deduced. Justice Callinan pointed out several bases for thinking that the appellant and other insured persons in her situation would not necessarily emerge from a s 104(1) indemnity action unscathed. These included: potential damage to a person's reputation in being named as defendant, especially where adverse judgment is entered; exposure to the stress and inconvenience of being called to give evidence interstate; and, more specifically here, provision in the NSW Act for insurers to claim a $500 excess from policy holders found to be 'at fault'.[73]

    Any of these burdens, if not equally felt by persons enjoying indemnity under s 104(1) of the Victorian Act, could be viewed as a potential trigger for State residence discrimination analysis. And while a burden like exposure to the $500 excess might not be self-evident, such that the onus of pleading it would fairly rest with the appellant, other potential burdens relating to reputation, inconvenience, and such like might seem much more self-evident. Yet the Sweedman joint judgment seems to imply that a litigant seeking to engage s 117 must specifically plead each potential burden, irrespective of how self-evident it seems — a potentially important procedural pointer that the joint judgment does not go out of its way to underline.

    Issues of materiality also arise when considering what kinds of factors are potential 'burdens' for s 117 purposes. In Sweedman, if the majority judges did give any thought to the potential 'burdens' relating to reputation, inconvenience, and such like these evidently did not reach whatever threshold of materiality those judges had in mind. Some advertence to this issue in the joint judgment would have been helpful. The kinds of imposition that will be sufficient to amount to a 'burden' — where such burdens are a precondition for any finding of discrimination — is an important issue of principle bearing on the scope of the s 117 limitation, and on which the Court's views are not yet known.

    CONCLUSIONS

    Given the Gleeson High Court's evident discomfort with the review of legislative policy determinations, we should not be surprised to see the Court baulking at the implications of any truly substantive analysis in Sweedman. Such analysis would have involved passing judgement on the fairness of the entire system of motor vehicle accident compensation in Australia and its State-based nature.[74] Some minds, including some members of the current High Court, would view such determinations as being beyond the High Court's competence and legitimate institutional bounds. Yet much of the reasoning in Street seemed to envisage policy questions of that breadth and magnitude being susceptible to review against the s 117 limitation. Indeed, the judgments in Street seemed to be in basic agreement that s 117 was included in the Constitution precisely to provide an outlet for resolving tensions and collisions between the Constitution's 'national unity' objectives and the expectation of some necessary State autonomy.[75] But while the Mason High Court might have been comfortable in the role of candid contributor to broad policy debates, the current Court has generally preferred to avoid such engagement.[76] Sweedman, on the s 117 issue, is entirely consistent with that trend.

    The focus in the joint judgment on isolating a law's 'discrimen' is characteristically legalistic. It reflects a thin understanding of the 'substance' that is supposedly s 117's concern, enabling the Court to sidestep the serious evaluation of suggested rationales for allowing particular State laws to have a different impact on locals and outsiders. The reinterpretation of s 117 in Street was intended to throw off the shackles of a legalistic view of discrimination, with most of the judgments committing to a substantive conception of discrimination, not just a substance-focused test. The reasoning in Sweedman seems a significant retreat from that commitment, with the potential to leave s 117 much depleted as an effective check on State parochialism.


    [∗] Lecturer, ANU College of Law.

    [1] [2006] HCA 8; (2006) 224 ALR 625 ('Sweedman').

    [2] [1989] HCA 53; (1989) 168 CLR 461 ('Street').

    [3] Transport Accident Act 1986 (Vic) s 35.

    [4] Transport Accident Act 1986 (Vic) s 27.

    [5] Transport Accident Act 1986 (Vic) s 104(1) provides:

    If an injury arising out of a transport accident in respect of which the Commission has made payments under this Act arose under circumstances which, regardless of section 93, would have created a legal liability in a person (other than a person who is entitled to be indemnified under section 94) to pay damages in respect of pecuniary loss suffered by reason of the injury, the Commission is entitled to be indemnified by the first-mentioned person for such proportion of the amount of the liability of the Commission to make payments under this Act in respect of the injury as is appropriate to the degree to which the injury was attributable to the act, default or negligence of the first-mentioned person.

    [6] The reference was made in the form of a special case pursuant to the County Court Act 1958 (Vic) s 76(1).

    [7] Transport Accident Commission v Sweedman [2004] VSCA 162; (2004) 10 VR 31, 36 (Callaway JA), 41–2 (Nettle JA). Winneke P agreed with Nettle JA's reasons: at 34.

    [8] Ibid 41 (per Nettle JA).

    [9] Ibid 54–5 (Nettle JA).

    [10] Ibid 39 (Callaway JA), 63 (Nettle JA).

    [11] The statutory construction aspect of the extraterritoriality claim – that is, the argument that the Victorian Parliament did not intend for the Victorian Act to have an operation beyond the State's borders – was downplayed in argument before the High Court. The majority joint judgment disposed of the issue speedily, in the respondent's favour: [2006] HCA 8; (2006) 224 ALR 625, 626 [2].

    [12] See the summary provided by Callinan J: ibid 642 [77].

    [13] Ibid 629 [18].

    [14] Ibid 629–30 [19].

    [15] Ibid.

    [16] Ibid 630 [20]–[21], citing the joint reasons in John Pfeiffer Pty Ltd v Rogerson [2000] HCA 36; (2000) 203 CLR 503, 518 [15].

    [17] Ibid 631 [23]–[24].

    [18] Ibid 631–2 [27]–[29], citing Transport Accident Commission v Sweedman [2004] VSCA 162; (2004) 10 VR 31, 41 (Nettle JA)

    [19] Ibid 632 [29]–[30].

    [20] Ibid 633 [33].

    [21] Ibid 633–4 [34].

    [22] Ibid 634 [35].

    [23] Ibid 634 [36], 636 [48].

    [24] Ibid 634 [38], 636 [45].

    [25] Ibid.

    [26] Ibid.

    [27] Ibid 635 [39]–[40].

    [28] Ibid 637 [51].

    [29] Ibid 637 [52].

    [30] Ibid 660–1 [145], 661 [147], 662–3 [151].

    [31] Ibid 661–3 [150]–[151].

    [32] Ibid 664 [153]–[154].

    [33] Ibid 639 [68], 645 [94]. See also Callinan J's emphasis on State sovereignty in, eg: Mobil Oil Australia Pty Ltd v Victoria [2002] HCA 27; (2002) 211 CLR 1, 75 [177], 77 [181], 81–2 [187]; Purvis v New South Wales [2003] HCA 62; (2003) 217 CLR 92, 172–3 [266], 174–5 [271]; Bayside City Council v Telstra Corporation Limited [2004] HCA 19; (2004) 216 CLR 595, 653–4 [119], 656–7 [126], 664 [149].

    [34] Ibid 648–9 [102]–[103].

    [35] Ibid 650 [106].

    [36] Ibid 644 [86].

    [37] Ibid 646 [96].

    [38] Ibid 658 [132].

    [39] Ibid 654 [120].

    [40] Ibid 655 [122]–[123].

    [41] Ibid 648 [100].

    [42] Ibid 638 [59].

    [43] Ibid.

    [44] Ibid 638–9 [60].

    [45] Ibid 638–9 [60], 639 [64], citing the Road Safety (Vehicles) Regulations 1988 (Vic) reg 203.

    [46] Ibid 639 [62].

    [47] Ibid 639 [64]–[65].

    [48] Ibid 639 [66].

    [49] Ibid 658 [136].

    [50] Ibid 664 [156].

    [51] Lipohar v The Queen (1999) 200 CLR 485; John Pfeiffer Pty Ltd v Rogerson [2000] HCA 36; (2000) 203 CLR 503; Mobil Oil Australia Pty Ltd v Victoria [2002] HCA 27; (2002) 211 CLR 1; Blunden v Commonwealth (2003) 218 CLR 330; James Stellios, 'Choice of Law and the Australian Constitution: Locating the Debate' [2005] FedLawRw 2; (2005) 33 Federal Law Review 7; Graeme Hill, 'Resolving a True Conflict Between State Laws: a Minimalist Approach' [2005] MelbULawRw 2; (2005) 29 Melbourne University Law Review 39; Graeme Hill and Adrienne Stone, 'The Constitutionalisation of the Common Law' [2004] AdelLawRw 5; (2004) 25 Adelaide Law Review 67; Stephen Gageler, 'Private Intra-national Law: Choice or Conflict, Common Law or Constitution?' (2003) 23 Australian Bar Review 184; Jeremy Kirk, 'Conflicts and Choice of Law within the Australian Constitutional Context' (2003) 31 Federal Law Review 247; Bradley Selway, 'The Australian "Single Law Area"' [2003] MonashULawRw 3; (2003) 29 Monash University Law Review 30.

    [52] [1994] HCA 18; (1994) 179 CLR 463 ('Goryl').

    [53] [1989] HCA 53; (1989) 168 CLR 461.

    [54] See, eg, Murray Gleeson, The Rule of Law and the Constitution (2000) 85, 97–99; Leslie Zines, 'Legalism, Realism and Judicial Rhetoric in Constitutional Law' (2002) 5 Constitutional Law and Policy Review 21; Haig Patapan, 'High Court Review 2001: Politics, Legalism and the Gleeson Court' (2002) 37 Australian Journal of Political Science 241, 241–2.

    [55] [1989] HCA 53; (1989) 168 CLR 461.

    [56] [1994] HCA 18; (1994) 179 CLR 463, 481–3 (Dawson & Toohey JJ). The discriminatory nature of the impugned Queensland statutory provision – Motor Vehicles Insurance Act 1936 (Qld) s 20 — was reflected in the provision's terms, capping the damages that could be awarded to out-of-State residents, but not Queensland residents, litigating in Queensland courts.

    [57] [2006] HCA 8; (2006) 224 ALR 625, 638–9 [60], 639 [64].

    [58] [1989] HCA 53; (1989) 168 CLR 461, 489 (Mason CJ), 509–11 (Brennan J), 525–8 (Deane J), 563 (Toohey J).

    [59] Ibid 489.

    [60] Ibid 509–11.

    [61] [2004] VSCA 162; (2004) 10 VR 31, 55–6 [79].

    [62] Ibid 57 [81].

    [63] Ibid.

    [64] [1989] HCA 53; (1989) 168 CLR 461, 492–3 (Mason CJ), 512-4 (Brennan J), 548 (Dawson J), 599–60 (Toohey J), 583–4 (McHugh J).

    [65] Ibid 528–9 (Deane J), 571–3 (Gaudron J).

    [66] [1994] HCA 18; (1994) 179 CLR 463, 485.

    [67] [2006] HCA 8; (2006) 224 ALR 625, 639 [62].

    [68] Ibid [66].

    [69] Permanent Trustee Australia Ltd v Commissioner of State Revenue (2004) 220 CLR 388, 423–5 (Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ).

    [70] [2004] VSCA 162; (2004) 10 VR 31, 57–63 [83]–[101].

    [71] Different balancing modalities seem to dominate in different contexts — eg, s 92 analysis seems to have reflected a two-stage defeasibility model, while a holistic approach has been taken in relation to s 99. I discuss these differences in a forthcoming piece, 'The High Court's Constitutional Conception of Discrimination: Origins, Applications and Implications'.

    [72] [2006] HCA 8; (2006) 224 ALR 625, 638 [59].

    [73] Ibid 645–6 [95].

    [74] Nettle JA accepted this to be the real s 117 question: [2004] VSCA 162; (2004) 10 VR 31, 62.

    [75] [1989] HCA 53; (1989) 168 CLR 461, 485 (Mason CJ), 512 (Brennan J), 522 (Deane J), 548 (Dawson J), 559 (Toohey J), 570 (Gaudron J), 583–4 (McHugh J).

    [76] See, eg, Re Wakim; Ex parte McNally (1999) 198 CLR 511; Fardon v A-G (Qld) [2004] HCA 46; (2004) 210 ALR 50; Permanent Trustee Australia Ltd v Commissioner for State Revenue (2004) 220 CLR 388; Re Woolley; Ex parte Applicants M276/2003 (by their next friend GS) (2004) 210 ALR 369; Combet v Commonwealth (2005) 221 ALR 621.


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