An urgent hearing of what became a ‘non-urgent case’: Unions NSW v New South Wales [2023] HCA 4
03.05.2023
On 15 February 2023, the High Court (the Court) delivered its judgment in Unions NSW v New South Wales [2023] HCA 4 (Unions NSW). Unions NSW was brought by way of special case in the original jurisdiction of the Court. Two key provisions of the Electoral Funding Act 2018 (NSW) (the EF Act), sections 29(11) and 35, were challenged on the ground they impermissibly burdened the implied freedom of communication (the implied freedom). Two weeks before the hearing of Unions NSW, the New South Wales (NSW) Parliament passed the Electoral Legislation Amendment Bill 2022, which repealed section 35 of the EF Act. This raised significant questions about whether a plaintiff retains standing to challenge a provision if that provision is repealed after the case commences.
This post considers this case in three parts. The first part briefly canvasses the facts and legal arguments. The second focuses on section 29(11) and associated judicial arguments, as well as the capacity of the Court to make a determination of legislative invalidity without full arguments or a contradictor. The final part considers section 35 and associated judicial arguments, gleaning the Court’s reasoning as to who possesses a ‘sufficient interest’ in seeking review of a repealed provision. Analysing the case through these lenses provides greater insight into the Court’s thinking around who has standing, the matters they may bring and whether the Court has the remit to hear and determine such matters.
Case overview
Unions NSW is the latest in a string of cases which concern NSW legislation on the constitutional validity of provisions regulating political donations and electoral expenditure. Previous cases include McCloy, Unions NSW [No 1] and Unions NSW [No 2]. In this case, the EF Act was the legislation in question. The EF Act provides for, among other things, the capping of electoral expenditure for election campaigns in NSW. The four plaintiffs, all trade union bodies, have registered as third-party campaigners (TPCs) for past NSW elections. The plaintiffs argued (at [3]) that both provisions ‘impair the capacity of TPCs to participate in the political discourse for elections in NSW’. The plaintiffs sought declaratory relief from the Court that both provisions were invalid. The defendant was the State of NSW.
Question 1 challenged section 29(11) of the EF Act, which capped electoral expenditure for a TPC in a by-election for the Legislative Assembly at $20,000. The plaintiffs highlighted (at [31]) how section 29(11) had in fact hampered their previous by-election campaign involvements; they cited the example of the 2021 Upper Hunter by-election, where the plaintiffs refrained from advertising on TV, radio and print media and did not procure flyers or how-to-vote cards. The plaintiffs argued (at [32]) that this showed the ‘demonstrable chilling effect’ this provision had on these political activities.
Question 2 concerned section 35 of the EF Act, which made it an offence (punishable by 400 penalty units and/or two years imprisonment) for a TPC to act in concert with other persons to incur electoral expenditure during an election campaign. In practice, this meant TPCs could not pool funds with other organisations that exceeded the relevant cap during an election campaign. Given that section 35 applied to all State election campaigns, the plaintiffs indicated (at [30]) that the first plaintiff (Unions NSW) had ceased certain activities, including communicating and pooling funding with other entities ‘[f]or fear of contravening s 35’, despite having previously undertaken these actions.
What was initially deemed by Keane J (sitting as a single Justice) as ‘probably the most important case before the Court towards the end of the year’ (given the upcoming NSW election and potential widespread impact on campaigning) became what Edelman J described as a ‘non-urgent case’, where ultimately the ‘central issues in dispute concerned whether there were sufficient issues in dispute’ (Unions NSW at [41]). While the case centred on the implied freedom, very little doctrine on the implied freedom was offered by the Court. Core considerations instead turned on issues of access to the Court, including ‘standing’ and affiliated interest thresholds; determination of a ‘matter’; and the factual landscape which allows the Court to hear and determine outcomes.
Section 29(11) and consideration of validity without argument or a contradictor
Question 1 opens a dialogue about how the Court may come to be informed of the relevant facts by parties, compared with the extent to which the Court can draw its own conclusions on legislative validity, absent a contradictor introducing or contesting relevant facts.
All parties acknowledged that section 29(11) imposed a burden on political communication, by restricting the capacity of TPCs to participate in political debate during by-election campaigns. Ordinarily, once a burden has been established as part of a proportionality analysis in an implied freedom matter, the Court would then consider whether the purpose of the legislative provision was legitimate, and if so, whether it was reasonably appropriate and adapted to advance the legitimate objective. However, in this case, after the hearings had taken place, the defendant altered their position on this question.
On 23 November 2022, the NSW Joint Standing Committee on Electoral Matters (JSCEM) tabled a report in the Parliament of NSW which recommended, among other things, the cap on TPCs for by-elections—which was capped by section 29(11) at $20,000—be increased to $198,750 (indexed). Shortly thereafter, the defendant advised the Court they now accepted that section 29(11) of the EF Act was invalid, and both parties now answered ‘Yes’ to question 1, being that section 29(11) was invalid in relation to the implied freedom.
Given that section 29(11) had not been repealed and the defendant had not said anything about a proposal to repeal or amend the section, the majority (at [34]) held that the plaintiffs retained a sufficient interest to seek relief on this question and that section 29(11) was invalid because it impermissibly burdened the implied freedom. For the majority (at [33]), the point of determinative significance in confirming invalidity was that after the release of the JSCEM report, the defendant no longer sought to justify the burden which section 29(11) imposed on the implied freedom. Accordingly, the majority considered that the proportionality assessment had been discontinued at the stage where the burden had not been justified, naturally meaning the law was invalid.
Despite the parties both agreeing on the same answer, the majority (at [33]) noted that questions concerning the validity of a law ‘cannot be decided by agreement of the parties’ and that it is ‘for the Court to be satisfied that a law is invalid before answering in that way a question reserved for the opinion of the Full Court and before granting any final declaratory or other relief’. Edelman J (at [73]) similarly agreed on this point, noting that the Court ‘is not bound by a concession of law made by a party’, and that ‘[t]he parties, in agreement between themselves, cannot dictate the answer to be given by the Court’.
However, Edelman J took a different approach in answering question 1, noting (at [82]-[83]) that it was ‘unnecessary’ and ‘inappropriate’ to answer. Steward J (at [94]) agreed that it was unnecessary to answer. Edelman J (at [63]) provided three grounds to justify his reasoning: (i) the weakness of the plaintiffs’ interest, (ii) the lack of any substantial controversy, and (iii) the prudential approach of not addressing constitutional questions, particularly those that have not been argued, when it is unnecessary to do so. The third of these grounds deserves further attention.
Edelman J (at [69]) asserted that, prior to the defendant conceding that section 29(11) was invalid, the Court could not have concluded it had an illegitimate purpose or was not justified without proper examination of complex constitutional questions arising from the material put by the parties to the Court. According to his Honour (at [74]), if the Court had answered question 1 prior to the defendant’s concession then it would have turned on whether the JSCEM report was ‘sufficient to satisfy the Court either that there is an illegitimate purpose for s 29(11) or that legitimate purpose cannot justify the extent of the burden upon political communication’.
Edelman J (at [75]) noted challenges in drawing judicial conclusions on the report, including that no substantial submissions were made about the report by either party; that it was unclear in what manner the report would be used in the justification stage of proportionality analysis; and that there was no contradictor to address or challenge the report’s effect on purpose or justification of the legislative provision. Steward J (at [86] and [90]) raised similar concerns, namely that ‘the material before the Court did not establish whether or not $20,000 was a reasonable amount [for by-elections]’, and that there was no proper contradictor present to oppose the plaintiffs’ declaration.
Section 35 and appraisal of ‘sufficient interest’
After section 35 was repealed, the plaintiffs amended their statement of claim to include question 1A, which asked a) if the Court has jurisdiction to hear and determine the invalidity of section 35, and b) should the Court, in its discretion, hear and determine the question on section 35. The plaintiffs argued (at [10]-[12]) that the Court retained jurisdiction to hear and determine the validity of section 35 despite its repeal, on the grounds that (i) past actions were constrained, (ii) the plaintiffs had reasonable grounds to believe that the State would reintroduce a similar provision to section 35 in the future, and (iii) legal costs for section 35 remained in dispute. The defendant and Commonwealth intervening disagreed, contending that the Court no longer retained jurisdiction.
To allow for a judicial answer to this question of section 35’s validity, the plaintiffs were required to demonstrate a relevant interest in relation to the matter. The plaintiffs contended (at [57]-[59]) that their standing in relation to section 35 arose due to the effect that this provision had on expenditure and campaigning in past elections, and the effect that a similar provision would likely have on future elections.
There was unanimous agreement among the bench that the Court was not required to answer question 2, as they did not have jurisdiction to determine the invalidity of section 35 following its repeal (Question 1A(a) – the majority (at [28], [36]), Edelman J (at [44]) and Steward J (at [94])). In answering ‘No’, the Court provided greater insight into issues of ‘standing’ in a ‘matter’ concerning legislation that had been repealed after the case commenced.
The rules on standing in Australian courts have evolved over time, in recognition that different classes of persons can initiate legal proceedings on a different basis. Standing is, in short, the capacity of a person or persons to instigate legal proceedings in a particular court. Standing is usually expressed through a person’s connection or interest in a relevant matter, and has been referred to in several cases as, for example, ‘sufficient interest’, ‘sufficient material interest’, ‘special interest’ or ‘real interest’. This interest can be considered the link between the person bringing a claim and the court that has jurisdiction to appropriately adjudicate the matter.
For example, former Chief Justice Gibbs stated that ‘[a] private citizen who has no special interest is incapable of bringing proceedings for that purpose’. Gibbs CJ noted that ‘special interest’ does not mean ‘a mere intellectual or emotional concern’, and that a person cannot be interested unless ‘he is likely to gain some advantage, other than the satisfaction of righting a wrong, upholding a principle or winning a contest, if his action succeeds or to suffer some disadvantage, other than a sense of grievance or a debt for costs, if his action fails’. The majority in this case (at [22]) adopted this statement from Gibbs CJ, noting ‘[t]he test for sufficient interest is broad and flexible’, and ‘is a question of degree, not a question of discretion’. The concept of standing is also ‘intrinsic to the existence of the matter’. A ‘matter’ has been defined by Gageler and Gleeson JJ in Hobart Airports (at [47]) as ‘a justiciable controversy between defined persons or classes of persons about an existing legal right or legal obligation’.
As the majority (at [14] and [15]) in this case noted, the function of the Court is ‘not the giving of legal answers or the declaration of legal principles — it is the resolution of a controversy about a legal right, duty or liability’. This phrase is drawn from the case of Re Judiciary. Tying a matter to a legal right, duty or liability in Re Judiciary was described by former Chief Justice Anthony Mason as a ‘restrictive view of the concept of ‘matters’ in Ch III and therefore of federal judicial power. In this case, the majority noted (at [16]) that once standing and a matter have been identified, it must be adjudicated through the exercise of judicial power, in a way which must be seen to produce ‘foreseeable consequences for the parties’.
The majority (at [23]) confirmed that when the plaintiffs commenced proceedings in June 2022, they had standing to seek a declaration of the invalidity of section 35, on the ground they were ‘TPCs registered under the EF Act whose expenditure and campaigning had been affected by that provisions and could be expected to be affected in future elections’. Edelman J (at [54]) also agreed that, prior to the repeal of section 35, the plaintiffs had a ‘sufficiently special interest’ concerning its validity.
However, the state of affairs changed on 2 November 2022 when section 35 was repealed. This fundamentally altered the plaintiffs’ connection to this matter, as the potential regulation and criminalisation of actions for future elections no longer existed. For parties seeking declaratory relief, the majority (at [18], emphasis mine) held that ‘a sufficient interest must continue to subsist up until the time at which relief is granted or refused’. In other words, just because the plaintiffs had standing when the matter commenced did not mean that standing would therefore remain throughout the case; actions can sever standing, even once a case begins.
The repeal of section 35 thus broke the connection between the plaintiffs’ interest and the issues in dispute, taking it outside the Court’s jurisdiction to hear and adjudicate the matter and grant relief. In other words, as the majority (at [18]) state, ‘[i]f after the commencement of a proceeding, a party ceases to have a sufficient interest in obtaining the relief sought, that party no longer has standing to obtain that relief, the “matter” ceases to exist and, in consequence, the jurisdiction of the Court comes to an end’.
As a result of the repeal of section 35, the majority highlight (at [25]) that ‘[t]he plaintiffs cannot and do not assert that any of their rights, duties or legal interests have been infringed by the past application of s 35’. The majority does, however, indicate (at [21]) that there are instances where a declaration of invalidity could still be made even though legislation had been repealed, for example where such declaration could assist a plaintiff to negative a statutory defence to a common law cause of action or where the plaintiff is being prosecuted for breach of the law. In this case, the plaintiff was not charged with an offence or being prosecuted, and ‘the EF Act no longer restricts the plaintiffs’ freedom of action or interferes with their activities’ (majority at [26]). As a result, the majority (at [26]) held that ‘[t]here is not a justiciable controversy and not a matter’.
Conclusion
Despite the lack of urgency eventually resulting, this case provides an interesting occasion to examine the Court’s thinking on facts required to make an appropriate decision, standing and a matter. Regarding the invalidity of section 29(11), the Court provided insight on legislative validity absent a full argument or contradictor. For the majority, they held the section to be invalid because the proportionality assessment was discontinued due to the defendant not justifying the burden. For Justices Edelman and Steward, they held it ‘unnecessary’ to answer and in Justice Edelman’s view it was ‘inappropriate’ to answer. This indicates a cleavage on how invalidity is determined, at least in a proportionality assessment.
In relation to whether there is a sufficient interest, there was unanimous agreement that the Court did not have jurisdiction to answer question 2 because the repeal of the legislation severed the plaintiff’s interest and thus connection to the matter. Given that the plaintiffs did not fall into one of the instances where a declaration of invalidity could be made (as the plaintiff was not charged or being prosecuted for example), there was thus, in the end, no matter for the Court to hear regarding section 35.
Josh Gibson is a PhD Candidate at UNSW Faculty of Law & Justice, and Senior Legal Officer at the Commonwealth Attorney-General’s Department. The views expressed here are his own, and not necessarily those of his employer.
Suggested citation: Josh Gibson, ‘An urgent hearing of what became a non-urgent case’: Unions NSW v New South Wales [2023] HCA 4’ on AUSPUBLAW (3 May 2023) <https://www.auspublaw.org/blog/2023/5/an-urgent-hearing-of-what-became-a-non-urgent-case-unions-nsw-v-new-south-wales-2023-hca-4/>