Business Law in Australia - Constitutional Law

Sources of Australia Money, Business, Law - Australian Constitution

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Constitution Law and the Australian Government - Wikimedia Commons
Constitution Law and the Australian Government - Wikimedia Commons
Wealth in Australia is derived from Australia's commercial law, its constitution law and its form of private law. The many sources of law are key to business success.

As stated in Part I of this article, law is “an invention and gift of the gods, an opinion of wise men, a correction of willing and unwilling errors, and a city’s common covenant”

The most important source of Australian law are the written constitutions of each of the six states, and the written constitution of the Commonwealth of Australia. The Constitution of the Commonwealth of Australia, in essence, sets out the distribution of powers between the Commonwealth and the States. It divides Commonwealth power into three areas.

  • The Executive power, held by the Queen and executed by the Governor-General, the Ministers of State, and the civil service of the Commonwealth of Australia.
  • The Parliament, with the power of legislation, and arguably, the residual power of a court at the Bar of the Parliament. This latter power is derived from the popularly elected legislature of the City and County of London, known as the Hustings, which was ruled to have been constituted as a Court.
  • The Judicature, comprising the High Court of Australia, the Federal Courts System in Australia and also covering State Courts when exercising the jurisdiction of the Commonwealth.

Constitution Law – Australian Government

There are three areas of power in the distribution of power between the Commonwealth and the States.

  • Exclusive Power of the Commonwealth, such as section 52 of the Constitution;
  • Concurrent powers, in section 51 of the Constitution, held by both the Commonwealth and the States at the same time;
  • Residual powers of the States which were never handed to the Commonwealth for national jurisdiction, examples being education and health.

Constitution Law- the Concurrent Powers

The concurrent powers are set out in the many “placita” (singular is “placitum”) within section 51 of the Commonwealth of Australia. The following are examples of the concurrent powers, in which both the Commonwealth and the States may make laws.

  • Taxation - s.51(ii)
  • Corporations - s. 51(xx)
  • External Affairs - s. 51(xxix)
  • Defence - s. 51(vi)
  • Marriage - s. 51(xxi)

Constitution Law – Inconsistency between Commonwealth and State Laws

Consider the following conflicting laws:

  • State law: section 201. “there shall be a departure tax for travel out of the State to another country”
  • Commonwealth law: section 188BAZ. “there shall be no departure taxes for travel out of any State”

When a State and the Commonwealth each make a law, the one inconsistent with the other, a mechanism is needed to resolve the conflict. Such conflict is dealt with in section 109 of the Constitution of the Commonwealth of Australia, which states as follows:

S. 109. "When a law of a State is inconsistent with a law of the Commonwealth, the latter shall prevail, and the former shall, to the extent of the inconsistency, be invalid.”

In Clyde Engineering Ltd v Cowburn (1926) 37 CLR 466 at 500, Justice Higgins set out three broad categories of “section 109 inconsistency”:

  • When it is impossible to obey both laws;
  • One law confers legal right and the other takes it away;
  • When the Commonwealth law evinces an intention to cover the whole field.

Each of these three situations requires a different kind of analysis. However, in each case, to the extent of the inconsistency, the state law stops operating and the commonwealth law is valid and applicable.

Overview of Constitution Law in Australia

Each of the states has a written constitution. The distribution of powers between the states and the commonwealth is: exclusive powers; concurrent powers; and, residual powers. For concurrent powers, inconsistencies may arise, which will be resolved by s. 109 of the Constitution.

Sources and Links

Demosthenes 25.16, cited in George A. Kennedy, Progymnasmata – Greek Textbooks of Prose Composition and Rhetoric Society of Biblical Literature, Atlanta, 2003.

Business Law in Australia - Statutes and Enactments

Business Law in Australia - Equity Jurisdiction

Business Law in Australia - Sources of the Law

Gary Lilienthal Organizational Behaviorist, GL

Gary Lilienthal - Gary Lilienthal, journalist, speaker, academic.

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