Lecture Notes: Melbourne Corporation v Commonwealth (1947) and the Engineers Case

Introduction to the Engineer's Case

• Impact: The Engineer's Case of 1920 significantly altered the interpretation of the Australian Constitution.
  • Crushed the doctrine of reserved powers.
  • Dismantled the idea of implied immunities.
  • Established a new literal approach to constitutional interpretation.
• Federal Concerns: Raised questions about the role of states and the expansion of Commonwealth powers, potentially threatening the federal structure.

Melbourne Corporation v Commonwealth (1947)

• Background: A reaction to the broad interpretation of Commonwealth powers post-Engineer’s case.
  • Focused on imposing limitations on Commonwealth's expanding powers.

Case Facts

• Parties Involved: Melbourne Corporation, a local government authority, versus Commonwealth.
• Legislation: Banking Act 1945, Section 48 demanded state/local authorities bank with the Commonwealth Bank, unless exempted by the Federal Treasurer.
• Legal Question: Could the Commonwealth, under Section 51, control state authorities?

High Court's Decision

• Majority Findings:
  • Constitution implicitly prohibits Commonwealth interference in states.
  • Chief Justice Latham: Highlighted the sovereignty of state functions, invalidating the law as it targeted states, not a genuine banking law.
  • Justices Dixon, Rich, Stark, and Williams: Found the law could fit under Section 51 but imposed limits on Commonwealth application.

Key Judicial Opinions

• Chief Justice Latham: Emphasized that state and Commonwealth are sovereign; the law was discriminatory, targeting states improperly.
• Justice Dixon: Constitution ensures independence between Commonwealth and states.
  • Law discriminated against states, limiting their banking options.
• Justice Williams: Stressed the federal compact implies neither sphere should impair the other's functions.
• Justice Rich: Introduced two prohibitions:
  1. Discrimination against states in legislation.
  2. Laws general in nature that impede state functions.

The Melbourne Corporation Doctrine

• Prohibitions:
  1. Against discrimination by imposing special burdens on states.
  2. Against general laws curtailing state existence/functionality.
• Principle: Commonwealth cannot impair states' capacity to function as independent governments.
• Confirmation: Reinforced in later cases:
  • Victoria v Commonwealth (1971) - Payroll Tax Case.
  • Queensland Electricity Commission v Commonwealth (1985).

Conclusion

• Outcome: Section 48 of the Banking Act 1945 declared invalid.
• Doctrine Establishment: Melbourne Corporation Doctrine ensures states' functionality as independent entities and limits Commonwealth overreach.

Additional Notes

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Remember: The Melbourne Corporation Doctrine is distinct from prior implied intergovernmental immunities but serves to protect state autonomy against Commonwealth discrimination.