Section 51(xx) of the Australian Constitution, is a subsection of Section 51 of the Australian Constitution that gives the Commonwealth Parliament 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.
After the High Court's decision in Huddart, Parker & Co Ltd v Moorehead (1909),[1] 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.[2]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[1]
It was not until 1971, when Huddart, Parker & Co. was overruled in Strickland v Rocla Concrete Pipes Ltd,[3] 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 poweredit
The High Court in New South Wales v Commonwealth (1990) (the Incorporation Case)[4] 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".[5]
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.[6] 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,[7] 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. 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[8]
Characteristics of trading and financial corporationsedit
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)[9][10]
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")[11]
"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"))[5][12][13]
The type of ownership is not material—a State corporation established to generate electricity has been held to be subject to regulation (Tasmanian Dam case)[14]
Where a corporation has not yet commenced trading (i.e., a shelf company), it can still be subject to regulation based on its objects of incorporation (Fencott v Muller)[15][16]
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 )[17][18]
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 it—however, 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)[19][20]
^R v Federal Court of Australia; Ex parte WA National Football League ("Western Australia Football case") [1979] HCA 6, (1979) 143 CLR 190 (27 February 1979), High Court
^State Superannuation Board v Trade Practices Commission [1982] HCA 72, (1982) 150 CLR 282 (14 December 1982), High Court
Further readingedit
Carney, Gerard (1990). "Section 51 (xx): No Power of Incorporation". Bond Law Review. Bond University. 2 (1): 79–89. Retrieved 25 September 2012.
Dixon, Tom (12 October 2005). "51 (xx) - The ambit of the Corporations Power" (PDF). State Chambers. Retrieved 25 September 2012.
Ford, W.J. (2005). "Politics, the Constitution and Australian Industrial Relations: Pursuing a unified national system" (PDF). Comprehensive Labor Law and Policy Journal. University of Illinois. 26 (2): 161–180. Retrieved 25 September 2012.
December 03, 2023
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Section 51 xx of the Australian Constitution is a subsection of Section 51 of the Australian Constitution that gives the Commonwealth Parliament 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 Contents 1 Jurisprudence to 1971 2 Corporations subject to the power 3 Characteristics of trading and financial corporations 4 See also 5 References 6 Further readingJurisprudence to 1971 editAfter the High Court s decision in Huddart Parker amp Co Ltd v Moorehead 1909 1 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 2 Justice Issacs dissent in Huddart Parker amp 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 1 It was not until 1971 when Huddart Parker amp Co was overruled in Strickland v Rocla Concrete Pipes Ltd 3 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 amp 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 editThe High Court in New South Wales v Commonwealth 1990 the Incorporation Case 4 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 5 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 6 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 7 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 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 8 Characteristics of trading and financial corporations editWhether 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 9 10 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 11 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 5 12 13 The type of ownership is not material a State corporation established to generate electricity has been held to be subject to regulation Tasmanian Dam case 14 Where a corporation has not yet commenced trading i e a shelf company it can still be subject to regulation based on its objects of incorporation Fencott v Muller 15 16 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 17 18 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 it however 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 19 20 dd See also editSee also Category Corporations power in the Australian Constitution cases WorkChoices Workplace Relations Act 1996References edit a b Huddart Parker amp Co Ltd v Moorehead 1909 HCA 36 1909 8 CLR 330 7 June 1909 High Court Amalgamated Society of Engineers v Adelaide Steamship Co Engineers case 1920 HCA 54 1920 28 CLR 129 Strickland v Rocla Concrete Pipes Ltd Concrete Pipes case 1971 HCA 40 1971 124 CLR 468 3 September 1971 High Court NSW v Commonwealth the Incorporations case 1990 HCA 2 1990 169 CLR 482 8 February 1990 High Court a b Is your organisation a Constitutional Corporation PDF Retrieved 25 September 2012 R v Australian Industrial Court Ex parte CLM Holdings Pty Ltd 1977 HCA 6 1977 136 CLR 235 10 February 1977 High Court Actors amp Announcers Equity Association v Fontana Films Pty Ltd 1982 HCA 23 1982 150 CLR 169 11 May 1982 High Court NSW v Commonwealth the WorkChoices case 2006 HCA 52 at par 178 81 ALJR 34 231 ALR 1 14 November 2006 High Court Dixon 2005 p 9 Quickenden v Commissioner O Connor of the Australian Industrial Relations Commission 2001 FCA 303 23 March 2001 Federal Court Dixon 2005 p 8 Dixon 2005 p 16 R v Federal Court of Australia Ex parte WA National Football League Western Australia Football case 1979 HCA 6 1979 143 CLR 190 27 February 1979 High Court Commonwealth v Tasmania Tasmanian Dam case 1983 HCA 21 1983 158 CLR 1 1 July 1983 High Court Dixon 2005 p 13 Fencott v Muller O Connors Winebar case 1983 HCA 12 1983 152 CLR 570 28 April 1983 High Court Dixon 2005 pp 12 13 R v Trade Practices Tribunal Ex parte St George County Council 1974 HCA 7 1974 130 CLR 533 4 March 1974 High Court Dixon 2005 p 10 State Superannuation Board v Trade Practices Commission 1982 HCA 72 1982 150 CLR 282 14 December 1982 High CourtFurther reading editCarney Gerard 1990 Section 51 xx No Power of Incorporation Bond Law Review Bond University 2 1 79 89 Retrieved 25 September 2012 Dixon Tom 12 October 2005 51 xx The ambit of the Corporations Power PDF State Chambers Retrieved 25 September 2012 Ford W J 2005 Politics the Constitution and Australian Industrial Relations Pursuing a unified national system PDF Comprehensive Labor Law and Policy Journal University of Illinois 26 2 161 180 Retrieved 25 September 2012 Retrieved from https en wikipedia org w index php title Section 51 xx of the Constitution of Australia amp oldid 1034739372, wikipedia, wiki, book, books, library,
