Williams v The Commonwealth

HIGH COURT OF AUSTRALIA

FRENCH CJ,
GUMMOW, HAYNE, HEYDON, CRENNAN, KIEFEL AND BELL JJ

RONALD WILLIAMS  PLAINTIFF

AND

COMMONWEALTH OF AUSTRALIA & ORS   DEFENDANTS

Williams v Commonwealth of Australia [2012] HCA 23
20 June 2012
S307/2010

ORDER

The questions stated in the Amended Special Case dated 26 July 2011 be answered as follows:

Question 1

Does the plaintiff have standing to challenge:

(a)        the validity of the Darling Heights Funding Agreement?

(b)the drawing of money from the Consolidated Revenue Fund for the purpose of making payments pursuant to the Darling Heights Funding Agreement during the following financial years:

(i)         2007-2008;

(ii)        2008-2009;

(iii)      2009-2010;

(iv)       2010-2011;

(v)        2011-2012?

(c)the making of payments by the Commonwealth to Scripture Union Queensland pursuant to the Darling Heights Funding Agreement during the following financial years:

(i)         2007-2008;

(ii)        2008-2009;

(iii)      2009-2010;

(iv)       2010-2011;

(v)        2011-2012?

Answer

(a)Yes.

(b)Unnecessary to answer.

(c)Yes.

Question 2

If the answer to Question 1(a) is Yes, is the Darling Heights Funding Agreement invalid, in whole or in part, by reason that the Darling Heights Funding Agreement is:

(a)beyond the executive power of the Commonwealth under s 61 of the Constitution?

(b)prohibited by s 116 of the Constitution?

Answer

(a)        Yes.

(b)        No.

Question 3

To the extent that the answer to Question 1(b) is Yes, was or is the drawing of money from the Consolidated Revenue Fund for the purpose of making payments under the Darling Heights Funding Agreement authorised by:

(a)        the 2007-2008 Appropriation Act?

(b)        the 2008-2009 Appropriation Act?

(c)        the 2009-2010 Appropriation Act?

(d)        the 2010-2011 Appropriation Act?

(e)        the 2011-2012 Appropriation Act?

Answer

Unnecessary to answer.

Question 4

To the extent that the answer to Question 1(c) is Yes, was or is the making of the relevant payments by the Commonwealth to Scripture Union Queensland pursuant to the Darling Heights Funding Agreement unlawful by reason that the making of the payments was or is:

(a)beyond the executive power of the Commonwealth under s 61 of the Constitution?

(b)prohibited by s 116 of the Constitution?

Answer

(a)The making of the payments was not supported by the executive power of the Commonwealth under s 61 of the Constitution.

(b)No.

Question 5

If the answer to any part of Question 2 is Yes, the answer to any part of Question 3 is No, or the answer to any part of Question 4 is Yes, what, if any, of the relief sought in the statement of claim should the plaintiff be granted?

Answer

The Justice disposing of the action should grant the plaintiff such declaratory relief and make such costs orders as appear appropriate in the light of the answers to Questions 1-4 and 6.

Question 6

Who should pay the costs of this special case?

Answer

The first, second and third defendants.

Representation

B W Walker SC with G E S Ng for the plaintiff (instructed by Horowitz & Bilinsky)

S J Gageler SC, Solicitor-General of the Commonwealth with G R Kennett SC and S J Free for the first, second and third defendants (instructed by Australian Government Solicitor)

R Merkel QC with G A Hill and J A Thomson for the fourth defendant (instructed by Norton Rose Australia)

Interveners

M G Sexton SC, Solicitor-General for the State of New South Wales with N L Sharp intervening on behalf of the Attorney-General for the State of New South Wales (instructed by Crown Solicitor (NSW))

W Sofronoff QC, Solicitor-General of the State of Queensland with G P Sammon and G J D del Villar intervening on behalf of the Attorney-General of the State of Queensland (instructed by Crown Law (Qld))

G L Sealy SC, Solicitor-General of the State of Tasmania with S D Gates intervening on behalf of the Attorney-General of the State of Tasmania (instructed by Solicitor-General of the State of Tasmania)

M G Hinton QC, Solicitor-General for the State of South Australia with M J Wait intervening on behalf of the Attorney-General for the State of South Australia (instructed by Crown Solicitor (SA))

S G E McLeish SC, Solicitor-General for the State of Victoria with R J Orr and N M Wood intervening on behalf of the Attorney-General for the State of Victoria (instructed by Victorian Government Solicitor)

R M Mitchell SC, Acting Solicitor-General for the State of Western Australia with F B Seaward intervening on behalf of the Attorney-General for the State of Western Australia (instructed by State  Solicitor (WA))

P D Quinlan SC with K E Foley appearing as amicus curiae on behalf of the Churches' Commission on Education Incorporated (instructed by Mallesons Stephen Jaques)

Notice:  This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.

CATCHWORDS

Williams v Commonwealth of Australia

Constitutional law − Executive power of Commonwealth − Commonwealth entered funding agreement with private service provider for provision of chaplaincy services at State school ("Funding Agreement") − Funding Agreement made pursuant to National School Chaplaincy Program − Whether executive power of Commonwealth extends to matters in respect of which Parliament may legislate − Whether s 61 of Constitution or s 44(1) of Financial Management and Accountability Act 1997 (Cth) ("FMA Act") source of power to enter Funding Agreement − Whether s 61 of Constitution or s 44(1) of FMA Act source of power to pay service provider.

Constitutional law − Powers of Commonwealth Parliament − Whether law providing for payments in circumstances identical to Funding Agreement would be law with respect to s 51(xx) of Constitution − Whether law providing for payments in circumstances identical to Funding Agreement would be law with respect to s 51(xxiiiA) of Constitution.

Constitutional law − Freedom of religion − Prohibition on religious tests as qualification for any office under Commonwealth − Under Funding Agreement, "school chaplain" to provide services − Whether "school chaplain" holds office under Commonwealth − Whether Funding Agreement or payments to service provider prohibited by s 116 of Constitution.

Constitutional law − Appropriations of moneys from Consolidated Revenue Fund − Commonwealth paid appropriated moneys to service provider pursuant to Funding Agreement − Whether Appropriation Acts authorised appropriations of moneys for purpose of payments under Funding Agreement.

Constitutional law − Standing − Plaintiff's children attended State school party to Funding Agreement − Whether plaintiff has standing to challenge validity of Funding Agreement − Whether plaintiff has standing to challenge validity of appropriations to pay moneys pursuant to Funding Agreement − Whether plaintiff has standing to challenge validity of payments to service provider.

Words and phrases – "appropriation", "benefits to students", "capacity to contract", "execution and maintenance of this Constitution", "executive power of the Commonwealth", "office under the Commonwealth", "ordinary and well-recognised functions", "religious test".

Constitution, ss 51(xx), 51(xxiiiA), 61, 64, 81, 96 and 116.
Financial Management and Accountability Act 1997 (Cth), s 44(1).

FRENCH CJ.

Introduction

1. In 1901, one of the principal architects of the Commonwealth Constitution, Andrew Inglis Clark, said of what he called "a truly federal government"[1]:

   "Its essential and distinctive feature is the preservation of the separate existence and corporate life of each of the component States of the commonwealth, concurrently with the enforcement of all federal laws uniformly in every State as effectually and as unrestrictedly as if the federal government alone possessed legislative and executive power within the territory of each State."

   In this case, that essential and distinctive feature requires consideration of the observation of Alfred Deakin, another of the architects of the Commonwealth Constitution and the first Attorney-General of the Commonwealth, that[2]:

   "As a general rule, wherever the executive power of the Commonwealth extends, that of the States is correspondingly reduced."

   In particular, this case requires consideration of the executive power of the Commonwealth, absent power conferred by or derived from an Act of the Parliament, to enter into contracts and expend public money.

   [1]Inglis Clark, Studies in Australian Constitutional Law (1901) at 12-13.

   [2]Deakin, "Channel of Communication with Imperial Government:  Position of Consuls:  Executive Power of Commonwealth", in Brazil and Mitchell (eds), Opinions of Attorneys-General of the Commonwealth of Australia, Volume 1:  1901-14 (1981) 129 at 132.

2. The plaintiff, Ronald Williams, calls into question the validity of a contract made by the Commonwealth with a private service provider, and expenditure under that contract, for the delivery of "chaplaincy services" into schools operated by the Queensland State Government. His claim concerns the provision of such services in the Darling Heights State School in Queensland, at which his children are students. Although the expenditure is said by the Commonwealth to have met the necessary condition of a parliamentary appropriation for each year in which it has been made, no Act of Parliament has conferred power on the Commonwealth to contract and expend public money in this way. The Commonwealth relies upon the executive power under s 61 of the Constitution. That section provides:

   "The executive power of the Commonwealth is vested in the Queen and is exercisable by the Governor-General as the Queen's representative, and extends to the execution and maintenance of this Constitution, and of the laws of the Commonwealth."

   The extent to which the executive power authorises the Commonwealth to make contracts and spend public money pursuant to them is raised in these proceedings partly because, as this Court has recently held[3] contrary to a long-standing assumption, parliamentary appropriation is not a source of spending power[4].

   [3]Pape v Federal Commissioner of Taxation (2009) 238 CLR 1; [2009] HCA 23.

   [4]An assumption reflected in the testimony of Sir Robert Garran to the Royal Commission on Child Endowment or Family Allowances that s 81 of the Constitution conferred "an absolute power of appropriation for general purposes": Australia, Report of the Royal Commission on Child Endowment or Family Allowances (1929) at 10; cf the opinions of Sir Edward Mitchell KC at 11, Mr Owen Dixon KC at 11-12 and Dr Evatt KC at 13. 

3. Initially there was another common assumption underpinning the written submissions in this case that, subject to the requirements of the Constitution relating to appropriations, the Commonwealth Executive can expend public moneys on any subject matter falling within a head of Commonwealth legislative power. The unanimity of that assumption did not survive oral argument and further written submissions were filed by leave after oral argument had concluded.

4. For the reasons that follow, s 61 does not empower the Commonwealth, in the absence of statutory authority, to contract for or undertake the challenged expenditure on chaplaincy services in the Darling Heights State School. That conclusion depends upon the text, context and purpose of s 61 informed by its drafting history and the federal character of the Constitution. It does not involve any judgment about the merits of public funding of chaplaincy services in schools. It does not involve any conclusion about the availability of constitutional mechanisms, including conditional grants to the States under s 96 of the Constitution and inter-governmental agreements supported by legislation[5], which might enable such services to be provided in accordance with the Constitution of the Commonwealth and the Constitutions of the States.  Nor does it involve any question about the power of the Commonwealth to enter into contracts and expend moneys:

   .in the administration of departments of State pursuant to s 64 of the Constitution;

   .in the execution and maintenance of the laws of the Commonwealth;

   .in the exercise of power conferred by or derived from an Act of the Parliament;

   .in the exercise of powers defined by reference to such of the prerogatives of the Crown as are properly attributable to the Commonwealth;

   .in the exercise of inherent authority derived from the character and status of the Commonwealth as the national government.

   What is rejected in these reasons is the unqualified proposition that, subject to parliamentary appropriation, the executive power of the Commonwealth extends generally to enable it to enter into contracts and undertake expenditure of public moneys relating to any subject matter falling within a head of Commonwealth legislative power. 

   [5]See Saunders, "Intergovernmental Agreements and the Executive Power", (2005) 16 Public Law Review 294.

   Procedural history

5. The plaintiff is the father of four children enrolled in the Darling Heights State School.  On 21 December 2010 he commenced proceedings in the original jurisdiction of this Court challenging the authority of the Commonwealth to draw money from the Consolidated Revenue Fund ("CRF") and to make payments to Scripture Union Queensland ("SUQ") to provide chaplaincy services at the Darling Heights State School.  The payments were made pursuant to the Darling Heights Funding Agreement ("DHF Agreement") between the Commonwealth and SUQ and were made for the purposes of the National School Chaplaincy Program ("NSCP"), established by the Commonwealth. 

6. SUQ was incorporated under the Corporations Act 2001 (Cth) as a public company limited by guarantee and is registered in Queensland. It is designated in its Constitution as "the Mission". Its objects are "to make God's Good News known to children, young people and their families" and "to encourage people of all ages to meet God daily through the Bible and prayer". In furtherance of these objects, SUQ shall "undertake … a variety of specialist ministries", "shall preach the need of true conversion and of holiness in heart and life" and "shall aid the Christian Church in its ministries."

7. In an amended writ of summons filed in the Court on 12 July 2011, the plaintiff sought declarations to the effect that Appropriation Acts enacted for the years 2007-2008 to 2011-2012 inclusive did not validly authorise the drawing of funds, pursuant to the DHF Agreement or any like agreement, and did not authorise the payment of funds to SUQ.  Declarations were also sought relating to the issue of drawing rights purporting to authorise the payment of public moneys to SUQ under the DHF Agreement or other similar agreements.  The plaintiff claimed injunctive relief to restrain officers of the Commonwealth from making such payments for chaplaincy services at the school. 

8. On 26 July 2011, Gummow J referred an amended special case for the opinion of the Full Court. 

9. A number of questions were posed for determination by the amended special case.  Question 1 was whether the plaintiff had standing to challenge the DHF Agreement and, for each of the financial years from 2007-2008 to 2011‑2012 inclusive, the drawing of money from the CRF and the payments by the Commonwealth to SUQ.  For the reasons given by Gummow and Bell JJ[6], I agree that the plaintiff had the requisite standing to support his challenge to the DHF Agreement and the payments made under it.  I agree that it is unnecessary to answer the question relating to the drawing of money from the CRF for the purpose of making payments under the agreement.  On the basis that the plaintiff had the requisite standing, the remaining questions were:

   [6]Reasons of Gummow and Bell JJ at [112].

   2.is the DHF Agreement invalid, in whole or in part, by reason that the DHF Agreement is:

   (a)beyond the executive power of the Commonwealth under s 61 of the Constitution?

   (b) prohibited by s 116 of the Constitution?

   3.is the drawing of money from the CRF for the purpose of making payments under the DHF Agreement authorised by:

   (a)     the 2007-2008 Appropriation Act?

   (b)     the 2008-2009 Appropriation Act?

   (c)     the 2009-2010 Appropriation Act?

   (d)     the 2010-2011 Appropriation Act?

   (e)     the 2011-2012 Appropriation Act?

   4.was or is the making of the relevant payments by the Commonwealth to SUQ pursuant to the DHF Agreement unlawful by reason that the making of the payments was or is: 

   (a)beyond the executive power of the Commonwealth under s 61 of the Constitution?

   (b) prohibited by s 116 of the Constitution?

   I agree, again for the reasons given by Gummow and Bell JJ, that neither the DHF Agreement nor the payments made under it were prohibited by s 116 of the Constitution[7].  The only limb of that provision relevant to this case was that which prohibits the Commonwealth from requiring any religious test "as a qualification for any office … under the Commonwealth."  The persons providing chaplaincy services under the DHF Agreement did not hold offices under the Commonwealth.  Questions 5 and 6 related to the relief sought, dependent upon the answers to questions 2, 3 and 4, and who should pay the costs of the special case.

   [7]Reasons of Gummow and Bell JJ at [107]-[110].

   Factual background

10. On 29 October 2006, Prime Minister Howard announced the introduction of the NSCP for the provision of chaplaincy services in schools.  The initial level of funding announced was $90 million over a three year period.  That level of funding was increased in 2007 to $165 million over three years.  Prime Minister Rudd announced an extension of the NSCP in November 2009.  That extension involved additional funding of $42 million over the 2010 and 2011 school years. 

11. Following Prime Minister Howard's announcement the Department of Education, Science and Training ("DEST") issued NSCP Guidelines.  The guidelines were administrative in nature.  They did not have statutory force.  Revised guidelines were issued on 19 January 2007.  Responsibility for the administration of the NSCP was brought under the Department of Education, Employment and Workplace Relations ("DEEWR") on 3 December 2007[8].  Further revised guidelines were issued on 1 July 2008 and 16 February 2010.  From July 2008 DEEWR made funds available under the NSCP for the provision of secular pastoral care workers in accordance with a Secular Service Providers Policy ("SSP Policy").  Where a school seeking funding under the NSCP had been unable to locate a suitable chaplain, it was given a copy of the SSP Policy. 

    [8]By operation of an Administrative Arrangements Order.

12. At the time of the Prime Minister's announcement in 2006, the Queensland Government had in place a procedural policy, published in 1998, for the supply of chaplaincy services in Queensland State schools.  The policy set out requirements to be met by Queensland State schools in providing such services.  Revised versions were published in July 2007 and April 2011 ("the Queensland Procedure").  Compliance with the Queensland Procedure was a condition of State Government funding.  The Queensland Procedure was applicable even if the funding for a particular school's chaplaincy service did not come from the Queensland Government.  Pursuant to the Queensland Procedure, SUQ entered into an agreement with the State of Queensland which required chaplains provided by SUQ to State schools to comply with a code of conduct and also with the Queensland Procedure as in force from time to time. 

13. On 9 November 2007, the Commonwealth entered into the DHF Agreement with SUQ for the provision of funding under the NSCP in respect of the Darling Heights State School.  That agreement was varied in October 2008 and again in May 2010.  It followed a standard form used for funding under the NSCP.

14. SUQ provided chaplaincy services at the Darling Heights State School and received payments under the DHF Agreement.  Three payments of $22,000 each were made on or about 14 November 2007, 15 December 2008 and 2 December 2009.  A further payment of $27,063.01 was made on or about 11 October 2010.  It covered the provision of NSCP chaplaincy services at the school for the period until 31 December 2011.  No further payments were due to be made by the Commonwealth pursuant to the DHF Agreement.  

    The Darling Heights Funding Agreement

15. On 4 April 2007 the Darling Heights State School lodged an application for funding under the NSCP for chaplaincy services.  The application was made in the name of the Deputy Principal of the school.  It was endorsed by the Principal and the President of the Darling Heights State School Parents' and Citizens' Association.  It was also endorsed by SUQ as the proposed chaplaincy service provider. 

16. The application was successful and led to the DHF Agreement.  The stated purpose of that agreement was "the provision of funding under the National School Chaplaincy Programme on behalf of Darling Heights State School." 

17. SUQ was required under the DHF Agreement to provide chaplaincy services in accordance with the application for funding under the NSCP.  The chaplain employed under the project was required to deliver services to the school and its community.  A key element of that service was the provision of "general religious and personal advice to those seeking it, [and] comfort and support to students and staff, such as during times of grief".  The chaplain was not to seek to "impose any religious beliefs or persuade an individual toward a particular set of religious beliefs".  SUQ was required to ensure that the chaplain signed the NSCP Code of Conduct which formed part of the DHF Agreement. 

18. The DHF Agreement provided for payments to be made in accordance with a payment schedule set out in Sched 1 to the agreement. The payments made to SUQ pursuant to the DHF Agreement have been set out earlier in these reasons.

19. The funding arrangements having been outlined, it is necessary now to refer to the legal bases for those payments, relied upon by the Commonwealth and challenged by the plaintiff.

    Bases for validity – the Commonwealth contentions

20. The Commonwealth submitted that the power of the Executive Government to enter into the DHF Agreement and to make payments to SUQ pursuant to the agreement and the NSCP derived from s 61 of the Constitution.

21. It should be emphasised at the outset that the executive power of the Commonwealth is to be understood as a reference to that power exercised by the Commonwealth as a polity through the executive branch of its government.  It is, as the plaintiff submitted, an error to treat the Commonwealth Executive as a separate juristic person.  The character of the Executive Government as a branch of the national polity is relevant to the relationship between the power of that branch and the powers and functions of the legislative branch and, particularly, the Senate. 

22. The Commonwealth submissions fall to be considered in relation to aspects of executive power identified in the decisions of this Court. Those decisions have been made in the context of particular controversies about specific applications of the power. They have not required a global account of its scope. Nevertheless, it can be said that the executive power referred to in s 61 extends to:

    .powers necessary or incidental to the execution and maintenance of a law of the Commonwealth[9];

    .powers conferred by statute[10];

    .powers defined by reference to such of the prerogatives of the Crown as are properly attributable to the Commonwealth[11];

    .powers defined by the capacities of the Commonwealth common to legal persons[12];

    .inherent authority derived from the character and status of the Commonwealth as the national government[13]. 

    [9]R v Kidman (1915) 20 CLR 425 at 440-441 per Isaacs J; [1915] HCA 58; Re Residential Tenancies Tribunal (NSW); Ex parte Defence Housing Authority (1997) 190 CLR 410 at 464 per Gummow J; [1997] HCA 36.

    [10]Victorian Stevedoring and General Contracting Co Pty Ltd and Meakes v Dignan (1931) 46 CLR 73 at 101 per Dixon J; [1931] HCA 34; Davis v The Commonwealth (1988) 166 CLR 79 at 108 per Brennan J; [1988] HCA 63; Pape v Federal Commissioner of Taxation (2009) 238 CLR 1 at 55 [111] per French CJ, 121 [343]-[344] per Hayne and Kiefel JJ.

    [11]Farey v Burvett (1916) 21 CLR 433 at 452 per Isaacs J; [1916] HCA 36; Barton v The Commonwealth (1974) 131 CLR 477 at 498 per Mason J, 505 per Jacobs J; [1974] HCA 20; Davis v The Commonwealth (1988) 166 CLR 79 at 93-94 per Mason CJ, Deane and Gaudron JJ, 108 per Brennan J.

    [12]New South Wales v Bardolph (1934) 52 CLR 455 at 509 per Dixon J; [1934] HCA 74; Davis v The Commonwealth (1988) 166 CLR 79 at 108 per Brennan J; Pape v Federal Commissioner of Taxation (2009) 238 CLR 1 at 60 [126] per French CJ. As noted in Inre KL Tractors Ltd (1961) 106 CLR 318 at 335 per Dixon CJ, McTiernan and Kitto JJ; [1961] HCA 8: "The word 'powers' here really means 'capacity', for we are dealing with the 'capacity' or a 'faculty' of the Crown in right of the Commonwealth."

    [13]Victoria v The Commonwealth and Hayden (1975) 134 CLR 338 at 397 per Mason J; [1975] HCA 52; R v Duncan; Ex parte Australian Iron and Steel Pty Ltd (1983) 158 CLR 535 at 560 per Mason J; [1983] HCA 29; Davis v The Commonwealth (1988) 166 CLR 79 at 93-94 per Mason CJ, Deane and Gaudron JJ, 110-111 per Brennan J; R v Hughes (2000) 202 CLR 535 at 554-555 [38] per Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ; [2000] HCA 22; Pape v Federal Commissioner of Taxation (2009) 238 CLR 1 at 63 [133] per French CJ, 87-88 [228], 91-92 [242] per Gummow, Crennan and Bell JJ, 116 [328]-[329] per Hayne and Kiefel JJ.

23. It is necessary to draw a distinction between that aspect of the executive power which derives its content from the prerogatives of the Crown and that aspect defined by reference to the capacities which the Commonwealth has in common with juristic persons.

24. The mechanism for the incorporation of the prerogative into the executive power is found in the opening words of s 61 which vests the executive power of the Commonwealth in "the Queen". This has been described as a "shorthand prescription, or formula, for incorporating the prerogative – which is implicit in the legal concept of 'the Queen' – in the Crown in right of the Commonwealth."[14]  As Dixon J said in Federal Commissioner of Taxation v Official Liquidator of EO Farley Ltd[15]:

    "This consequence flows from the fact that the executive power of the Commonwealth is vested in the Crown, which, of course, is as much the central element in the Constitution of the Commonwealth as in a unitary constitution."

    [14]Winterton, Parliament, the Executive and the Governor-General (1983) at 50.

    [15](1940) 63 CLR 278 at 304; [1940] HCA 13. See also The Commonwealth v Colonial Combing, Spinning and Weaving Co Ltd (1922) 31 CLR 421 at 437 per Isaacs J; [1922] HCA 62; In re Foreman & Sons Pty Ltd; Uther v Federal Commissioner of Taxation (1947) 74 CLR 508 at 514 per Latham CJ, 525-526 per Starke J, 531 per Dixon J; [1947] HCA 45; The Commonwealth v Cigamatic Pty Ltd (In Liq) (1962) 108 CLR 372 at 377 per Dixon CJ, Kitto J agreeing at 381, Windeyer J agreeing at 390; [1962] HCA 40.

25. The taxonomical question whether the prerogatives incorporated in the executive power of the Commonwealth include the common law capacities of a juristic person has been given different answers.  Blackstone said that "if once any one prerogative of the crown could be held in common with the subject, it would cease to be prerogative any longer"[16] and therefore that "the prerogative is that law in case of the king, which is law in no case of the subject."[17]  Dicey thought the prerogatives extended to "[e]very act which the executive government can lawfully do without the authority of the Act of Parliament"[18].  Professor George Winterton considered the dispute sterile and concluded that[19]:

    "there is neither a rational basis nor any utility in distinguishing the 'prerogative' in Blackstone's sense from the other common law powers of the Crown".

    In the United Kingdom that view has been said to be reflected in "the prevalence of judicial references to Dicey's definition of the prerogative and the relative marginalization of Blackstone's" indicating "a preference for the modern over the archaic, as Dicey's definition is read as functional and modern in emphasizing residuality and parliamentary supremacy."[20]  There is, nevertheless, a point to Blackstone's distinction in this case.  It avoids the temptation to stretch the prerogative beyond its proper historical bounds[21].  Moreover, as appears below, one of the Commonwealth submissions suggested that the exercise of the executive "capacities" was not subject to the same constraints as the exercise of the prerogative.  It is necessary now to turn to the Commonwealth submissions. 

    [16]Commentaries on the Laws of England (1765), bk 1, ch 7 at 232.

    [17]Blackstone, Commentaries on the Laws of England (1765), bk 1, ch 7 at 232. See also Chitty, A Treatise on the Law of the Prerogatives of the Crown (1820) at 4.

    [18]Dicey, Introduction to the Study of the Law of the Constitution, 10th ed (1959) at 425.

    [19]Winterton, Parliament, the Executive and the Governor-General (1983) at 112.

    [20]Cohn, "Medieval Chains, Invisible Inks:  On Non-Statutory Powers of the Executive", (2005) 25 Oxford Journal of Legal Studies 97 at 104.

    [21]Cohn, "Medieval Chains, Invisible Inks:  On Non-Statutory Powers of the Executive", (2005) 25 Oxford Journal of Legal Studies 97 at 108.

26. In its written submissions, filed before the hearing, the Commonwealth made what was presented as a limiting assumption for the purpose of its argument. The assumption was that the breadth of the executive power of the Commonwealth, in all of its aspects, is confined to the subject matters of express grants of power to the Commonwealth Parliament in ss 51, 52 and 122 of the Constitution, together with matters that, because of their distinctly national character or their magnitude and urgency, are peculiarly adapted to the government of the country and otherwise could not be carried on for the public benefit. The "aspects" of executive power so limited were said to be the prerogative in the "narrower sense"[22], the powers that arise from the position of the Commonwealth as a national government, and the capacities which the Commonwealth has in common with other legal persons. The limiting negative assumption was linked to a broad positive proposition that the executive power in all of its aspects extends to the subject matter of grants of legislative power to the Commonwealth Parliament. In oral argument at the hearing the Commonwealth nevertheless disavowed the proposition that the "executive power authorises the Executive to do anything which the Executive could be authorised by statute to do, pursuant to one of the powers in section 51". In later written submissions, filed after the hearing, in response to submissions by Tasmania and South Australia, the Commonwealth appeared to revive its broad proposition and contended that the executive power supports executive action dealing at least with matters within the enumerated heads of Commonwealth legislative power.

    [22]That is, in the sense used by Blackstone as outlined above.

27. The broad proposition in each of its manifestations should not be accepted.The exercise of legislative power must yield a law able to be characterised as a law with respect to a subject matter within the constitutional grant of legislative authority to the Parliament.  The subject matters of legislative power are specified for that purpose, not to give content to the executive power.  Executive action, except in the exercise of delegated legislative authority, is qualitatively different from legislative action.  As Isaacs J said in R v Kidman[23]:

    "The Executive cannot change or add to the law; it can only execute it".

    To say positively and without qualification that the executive power in its various aspects extends, absent statutory support, to the "subject matters" of the legislative powers of the Commonwealth is to make a statement the content of which is not easy to divine. Neither the drafting history of s 61 of the Constitution nor its judicial exegesis since Federation overcomes that difficulty.

    [23](1915) 20 CLR 425 at 441.

28. In reliance upon its broad premise, the Commonwealth submitted that the making of the DHF Agreement and the payments to SUQ were within the executive power in that:

    1.The DHF Agreement provided for, and its performance involved, the provision of benefits to students, a subject matter covered by s 51(xxiiiA) of the Constitution.

    2.The DHF Agreement was entered into with, and provided for assistance to, a trading corporation formed within the limits of the Commonwealth, a subject matter covered by s 51(xx) of the Constitution.

29. The Commonwealth referred to a number of authorities in support of its broad proposition.  The first of those was Victoria v The Commonwealth and Hayden ("the AAP case")[24]. The focus in that case, which concerned the validity of Commonwealth payments to regional councils to provide welfare services, was upon the term "purposes of the Commonwealth" in s 81 of the Constitution. Gibbs J said[25]:

    "We are in no way concerned in the present case to consider the scope of the prerogative or the circumstances in which the Executive may act without statutory sanction."

    Observations about the executive power made in the judgments in the AAP case were generally cast in a form reflecting the negative limiting assumption which stood at the threshold of the Commonwealth's initial written submissions in this case.  Barwick CJ said that the Executive "may only do that which has been or could be the subject of valid legislation."[26]  Gibbs J said that the Executive "cannot act in respect of a matter which falls entirely outside the legislative competence of the Commonwealth"[27].  The content of executive power as Mason J explained it "does not reach beyond the area of responsibilities allocated to the Commonwealth by the Constitution"[28].  His Honour did not define those responsibilities in terms of the subject matters of Commonwealth legislative competence.  Rather, he described them as[29]:

    "ascertainable from the distribution of powers, more particularly the distribution of legislative powers, effected by the Constitution itself and the character and status of the Commonwealth as a national government."

    This was no simplistic mapping of the executive power on to the fields of legislative competency.  His Honour described his view of the executive power as confirmed by the decisions of this Court in The Commonwealth v Colonial Combing, Spinning and Weaving Co Ltd ("the Wool Tops case")[30] and The Commonwealth v Australian Commonwealth Shipping Board[31].  In relation to the Wool Tops case his Honour referred in his footnote[32] to the joint judgment of Knox CJ and Gavan Duffy J, in which the impugned agreements were held invalid for want of constitutional or statutory authority[33].  His footnoted reference[34] to Commonwealth Shipping Board was to a passage in the joint judgment of Knox CJ, Gavan Duffy, Rich and Starke JJ in which their Honours held that an activity unwarranted in express terms by the Constitution could not be vested in the Executive[35].

    [24](1975) 134 CLR 338.

    [25](1975) 134 CLR 338 at 379.

    [26](1975) 134 CLR 338 at 362.

    [27](1975) 134 CLR 338 at 379.

    [28](1975) 134 CLR 338 at 396.

    [29](1975) 134 CLR 338 at 396.

    [30](1922) 31 CLR 421.

    [31](1926) 39 CLR 1; [1926] HCA 39.

    [32](1975) 134 CLR 338 at 397, fn 40.

    [33](1922) 31 CLR 421 at 432.

    [34](1975) 134 CLR 338 at 397, fn 41.

    [35](1926) 39 CLR 1 at 10.

30. In R v Duncan; Ex parte Australian Iron and Steel Pty Ltd[36], Mason J held that Commonwealth executive power extended to the making of inter-governmental agreements between the Commonwealth and the States "on matters of joint interest, including matters which require for their implementation joint legislative action", so long as the means used and the ends sought were consistent with the Constitution[37]. His Honour said that the executive power of the Commonwealth was not "limited to heads of power which correspond with enumerated heads of Commonwealth legislative power under the Constitution."[38]  Referring back to what he had said in the AAP case, he added[39]:

    "Of necessity the scope of the power is appropriate to that of a central executive government in a federation in which there is a distribution of legislative powers between the Parliaments of the constituent elements in the federation."

    These remarks are consistent with a concept of executive power in which the character and status of the Commonwealth as a national government is an aspect of the power and a feature informing all of its aspects, including the prerogatives appropriate to the Commonwealth, the common law capacities, powers conferred by statutes, and the powers necessary to give effect to statutes.  His Honour's conception of executive power was consistent with that most recently discussed by this Court in Pape v Federal Commissioner of Taxation[40].  It does not afford support for the broad proposition that the Executive Government of the Commonwealth can do anything about which the Parliament of the Commonwealth could make a law.

    [36](1983) 158 CLR 535.

    [37](1983) 158 CLR 535 at 560.

    [38](1983) 158 CLR 535 at 560.

    [39](1983) 158 CLR 535 at 560.

    [40](2009) 238 CLR 1 at 62-63 [131]-[132] per French CJ, 90‑91 [239] per Gummow, Crennan and Bell JJ.

31. In Davis v The Commonwealth[41] the Court was again concerned with the way in which the "character and status of the Commonwealth as the government of the nation" underpinned executive action and associated incidental legislation to celebrate the bicentenary of first European settlement in Australia.  It was in the context of that question that Mason CJ, Deane and Gaudron JJ held the executive power to extend most clearly "in areas beyond the express grants of legislative power … where Commonwealth executive or legislative action involves no real competition with State executive or legislative competence."[42]  It is necessary, in considering Davis, to have regard not only to the questions which fell for decision in that case, but also to the observation of Brennan J that[43]:

    "Section 61 refers not only to the execution and maintenance of the laws of the Commonwealth (a function characteristically to be performed by execution of statutory powers); it refers also to 'the execution and maintenance of this Constitution' (a function to be performed by execution of powers which are not necessarily statutory)."  (emphasis added)

    What his Honour said was not a prescription for a general non-statutory executive power to enter contracts and spend public money on any matter that could be referred to a head of Commonwealth legislative power or could be authorised by a law of the Commonwealth.  What Davis was about is encapsulated in the observation by Wilson and Dawson JJ[44]:

    "In this case it is enough to say that, viewing its powers as a whole, the Commonwealth must necessarily have the executive capacity under s 61 to recognize and celebrate its own origins in history. The constitutional distribution of powers is unaffected by its exercise."

    [41](1988) 166 CLR 79 at 94 per Mason CJ, Deane and Gaudron JJ.

    [42](1988) 166 CLR 79 at 93-94.

    [43](1988) 166 CLR 79 at 109-110.

    [44](1988) 166 CLR 79 at 104.

32. R v Hughes[45], also cited in the Commonwealth's submissions, concerned the validity of a State law conferring on the Commonwealth Director of Public Prosecutions the power to institute and carry on prosecutions for indictable offences against the law of the State. In the joint judgment, consideration was given to whether the provisions of the relevant Commonwealth Act authorising regulations conferring such functions on a Commonwealth officer could be supported as laws with respect to matters incidental to the executive power pursuant to s 51(xxxix)[46].  The underlying inter-governmental agreement was referred to in the joint judgment as a possible illustration of the propositions stated by Mason J in Duncan and referred to earlier in these reasons.

    [45](2000) 202 CLR 535.

    [46](2000) 202 CLR 535 at 554-555 [38] per Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ.

33. The Commonwealth also relied upon observations in the judgments of McHugh and Gummow JJ in Re Residential Tenancies Tribunal (NSW); Ex parte Defence Housing Authority[47].  As McHugh J correctly pointed out, much Commonwealth executive activity does not depend on statutory authorisation.  He said[48]:

    "In the ordinary course of administering the government of the Commonwealth, authority is frequently given to Commonwealth servants and agents to carry out activities in the exercise of the general powers conferred by the Constitution."

    Gummow J also said[49]:

    "The executive power of the Commonwealth enables the undertaking of 'all executive action which is appropriate to the position of the Commonwealth under the Constitution and to the spheres of responsibility vested in it by the Constitution'." (footnote omitted)

    [47](1997) 190 CLR 410.

    [48](1997) 190 CLR 410 at 455.

    [49](1997) 190 CLR 410 at 464.

34. There are undoubtedly significant fields of executive action which do not require express statutory authority. As was accepted by the Attorney-General of Tasmania in further written submissions, filed after the oral hearing, the executive power of the Commonwealth extends to the doing of all things which are necessary or reasonably incidental to the execution and maintenance of a valid law of the Commonwealth once that law has taken effect. That field of action does not require express statutory authority, nor is it necessary to find an implied power deriving from the statute. The necessary power can be found in the words "execution and maintenance … of the laws of the Commonwealth" appearing in s 61 of the Constitution. The field of non-statutory executive action also extends to the administration of departments of State under s 64 of the Constitution and those activities which may properly be characterised as deriving from the character and status of the Commonwealth as a national government. To accept those propositions is not to accept the broad proposition for which the Commonwealth contended, nor does such a proposition have the authority of a decision of this Court[50]. 

    [50]In a different context it was rejected in the Full Federal Court in Ruddock v Vadarlis (2001) 110 FCR 491 at 542 [192] per French J, Beaumont J agreeing at 514 [95].

35. The Commonwealth sought to support the challenged expenditure on two other bases.  The first was that the Commonwealth possesses capacities, in common with other legal persons, including the capacity to obtain information, to spend money lawfully available to be spent or to enter into contracts.  As initially formulated by the Commonwealth, these capacities were not limited in their exercise by reference to the subject matters of the legislative powers of the Commonwealth.  The second basis, put in oral argument, was that:

    "a relevantly unlimited power to pay and to contract to pay money is to be found in the character and status of the Commonwealth as a national government just as it would be inherent in the character and status of the Commonwealth were it a natural person." 

    The Commonwealth accepted that, unlike a natural person, its power to pay and to contract to pay money was constrained by the need for an appropriation and by the requirements of political accountability. 

36. In oral argument, the Commonwealth submitted that its capacity to contract, and to pay money pursuant to contract, extends at least to payments made on terms and conditions that could be authorised or required by an exercise of the legislative power of the Commonwealth under s 51. The metes and bounds of aspects of executive power, however, are not to be measured by undiscriminating reference to the subject matters of legislative power. Those subject matters are diverse in character. Some relate to activities, others to classes of persons or legal entities, some to intangible property rights and some to status. Some are purposive[51].  The submission invites the Court to determine whether there is an hypothetical law which could validly support an impugned executive contract and expenditure under such a contract.  There might be a variety of laws which could validly authorise or require contractual or spending activity by the Commonwealth.  The location of the contractual capacity of the Commonwealth in a universe of hypothetical laws which would, if enacted, support its exercise, is not a means by which to judge its scope.

    [51]As suggested by Dixon J in Stenhouse v Coleman (1944) 69 CLR 457 at 471; [1944] HCA 36. See also Murphyores Incorporated Pty Ltd v The Commonwealth (1976) 136 CLR 1 at 11-12 per Stephen J; [1976] HCA 20.

37. The Commonwealth submitted that the exercise by its Executive Government of its capacities does not involve interference with what would otherwise be the legal rights and duties of others, nor does the Executive Government thereby displace the ordinary operation of the laws of the State or Territory in which the relevant acts take place.  This is correct as far as it goes but does not provide an answer to the question of validity.  There are consequences for the Federation which flow from attributing to the Commonwealth a wide executive power to expend moneys, whether or not referable to a head of Commonwealth legislative power, and subject only to the requirement of a parliamentary appropriation.  Those consequences are not to be minimised by the absence of any legal effect upon the laws of the States.  Expenditure by the Executive Government of the Commonwealth, administered and controlled by the Commonwealth, in fields within the competence of the executive governments of the States has, and always has had, the potential, in a practical way of which the Court can take notice, to diminish the authority of the States in their fields of operation.  That is not a criterion of invalidity.  It is, however, a reason not to accept the broad contention that such activities can be undertaken at the discretion of the Executive, subject only to the requirement of appropriation. 

38. That aspect of executive power, which has been described as the "mere capacities of a kind which may be possessed by persons other than the Crown"[52], is not open-ended.  The Commonwealth is not just another legal person like a private corporation or a natural person with contractual capacity.  The governmental contract "is now a powerful tool of public administration."[53]  As Professor Winterton said of the capacities exercised by the Executive Government[54]:

    "Important governmental powers, such as the power to make contracts, may be attributed to this source, but the general principle must not be pressed too far.  It can be applied only when the executive and private actions are identical, but this will rarely be so, because governmental action is inherently different from private action.  Governmental action inevitably has a far greater impact on individual liberties, and this affects its character."

    Relevantly for present purposes, there is also the impact of Commonwealth executive power on the executive power of the States.

    [52]Davis v The Commonwealth (1988) 166 CLR 79 at 108 per Brennan J.

    [53]Seddon, Government Contracts:  Federal, State and Local, 4th ed (2009) at 65.

    [54]Winterton, Parliament, the Executive and the Governor-General (1983) at 121.

39. The Commonwealth submitted that the necessary condition, imposed by s 83 of the Constitution, for the exercise of the Commonwealth power to spend, namely that it be under appropriation made by law, had been met by the enactment of Appropriation Acts in each of the relevant years. It was not in dispute that, although a necessary condition of the exercise of executive spending power, an appropriation under s 83 is not a source of that power[55].  For the reasons given by Gummow and Bell JJ[56] it is not necessary in this case to deal with the sufficiency of the parliamentary appropriations relied upon by the Commonwealth.  No Act of Parliament existed which conferred power on the Executive Government of the Commonwealth to make the impugned payments to SUQ[57]. The lawfulness of the payments therefore depended critically upon whether s 61 of the Constitution supplied that authority. That question invites consideration of the construction of s 61 by reference to its drafting history and the concept of executive government which informed it.

    [55]Pape v Federal Commissioner of Taxation (2009) 238 CLR 1 at 55 [111] per French CJ, 73-74 [178]-[180] per Gummow, Crennan and Bell JJ, 113 [320] per Hayne and Kiefel JJ, 210-211 [601], 211-212 [603], 212 [606] per Heydon J.

    [56]Reasons of Gummow and Bell JJ at [113]-[117].

    [57]The Commonwealth's submission that s 44 of the Financial Management and Accountability Act 1997 (Cth) provided such authority is dealt with later in these reasons and in the reasons of Gummow and Bell JJ at [102]-[103].

    Executive power – prehistory and drafting history

40. There were elements of the drafting history of s 61 of the Constitution which reflected some of the Commonwealth's arguments about its scope. It is helpful to consider that history.

41. In November 1890, a few months before the first National Australasian Convention, Sir Samuel Griffith, then Premier of Queensland for the second time, proposed, by way of motion in the Legislative Assembly, a federal constitution for the Colony of Queensland involving the creation of three provinces.  The motion was a political response to a long-running separatist movement[58].Relevantly, he proposed executive governments of the provinces and a central "United Provinces" Executive Government.  Their functions, he said, "should correspond with the functions assigned to their respective Legislatures."[59] Queensland did not become a federation but Griffith's delineation of executive powers was to have some resonance in the drafting process which led to s 61 of the Constitution of the Commonwealth.

    [58]See Bernays, Queensland Politics During Sixty (1859-1919) Years (1919) at 506-524; Thomson, "Drafting the Australian Constitution:  The Neglected Documents", (1986) 15 Melbourne University Law Review 533.

    [59]Queensland, Legislative Assembly, Parliamentary Debates (Hansard), 11 November 1890 at 1331.

42. On 18 March 1891, the National Australasian Convention resolved in Committee of the Whole to approve of the formation of the framing of a Federal Constitution which would establish, among other things[60]:

    "An Executive, consisting of a Governor-General, and such persons as may from time to time be appointed as his advisers."

    A Constitutional Committee was created to draft a Bill.  Sir Samuel Griffith, Edmund Barton, Alfred Deakin and Andrew Inglis Clark were among its members.  A list of issues for decision by the Committee at its first meeting, probably prepared by Griffith[61], included an Executive with "[p]owers correlative to those of Legislature."[62]  A framework document subsequently produced by the Committee proposed an Executive Government but made no reference to its powers[63].

    [60]Official Record of the Proceedings and Debates of the National Australasian Convention, (Sydney), 18 March 1891 at lxii.

    [61]Williams, The Australian Constitution:  A Documentary History (2005) at 53.

    [62]"List of matters submitted to Constitutional Committee for decision preparatory to drafting Constitution. 19 March 1891" (Document 3) in Griffith, Successive Stages of the Constitution of the Commonwealth of Australia (1891, reprinted 1973).

    [63]"Memorandum of Decisions of Constitutional Committee.  Printed from day to day" (Document 4) in Griffith, Successive Stages of the Constitution of the Commonwealth of Australia (1891, reprinted 1973).

43. Inglis Clark prepared a draft Constitution which, in effect, became a working document in the drafting process that ensued in the 1891 Convention and the 1897-1898 Conventions. The initial draft was based upon the Constitution of the United States in so far as it assigned enumerated legislative powers to the Federal Parliament[64].  In relation to the "location, nature and exercise of the Executive power"[65] it followed the Constitution of Canada embodied in the British North America Act 1867 (Imp) ("the British North America Act")[66].  Section 9 of that Act provided:

    "The Executive Government and Authority of and over Canada is hereby declared to continue and be vested in the Queen."

    Nevertheless, Inglis Clark, perhaps having in mind the power of the central government under the Canadian Constitution, warned the delegates, in the memorandum that accompanied his draft, against[67]:

    "an Executive having an immense number of provincial offices at its disposal, and the reduction of the present local Governments to the position of large Municipal Councils with a Governor and a Ministry attached to each of them."

    A relevant contrast between the British North America Act and the Commonwealth Constitution was made by the Privy Council in Attorney-General (Cth) v Colonial Sugar Refining Co Ltd[68].  What was in the minds of those who agreed on the resolutions which gave rise to the British North America Act "was a general Government charged with matters of common interest, and new and merely local Governments for the Provinces", which were to have "fresh and much restricted Constitutions"[69]. The Constitution adopted by the Australian colonies was "federal in the strict sense of the term"[70], in which "States, while agreeing on a measure of delegation, yet in the main continue[d] to preserve their original Constitutions."[71]

    [64]Williams, The Australian Constitution:  A Documentary History (2005) at 68; La Nauze, The Making of the Australian Constitution (1972) at 25-26; Buss, "Andrew Inglis Clark's Draft Constitution, Chapter III of the Australian Constitution, and the Assist from Article III of the Constitution of the United States", (2009) 33 Melbourne University Law Review 718.  See generally, Winterton, Parliament, the Executive and the Governor‑General (1983) and Thomson, "Executive Power, Scope and Limitations:  Some Notes from a Comparative Perspective", (1983) 62 Texas Law Review 559.

    [65]Williams, The Australian Constitution:  A Documentary History (2005) at 67.

    [66]30 & 31 Vict c 3.

    [67]Williams, The Australian Constitution:  A Documentary History (2005) at 68.

    [68](1913) 17 CLR 644; [1914] AC 237.

    [69](1913) 17 CLR 644 at 652; [1914] AC 237 at 253.

    [70](1913) 17 CLR 644 at 651; [1914] AC 237 at 252.

    [71](1913) 17 CLR 644 at 651-652; [1914] AC 237 at 253. See La Nauze, The Making of the Australian Constitution (1972) at 27.

44. Clause 5 of Inglis Clark's draft Constitution provided that the executive power and authority of the "Federal Dominion of Australasia" would continue and be vested, subject to the provisions of the Bill, in the Queen[72].  Clause 6 provided for the Queen to appoint a Governor-General to exercise such "executive powers, authorities, and functions" as the Queen might deem "necessary or expedient to assign to him."[73]Charles Kingston's draft Constitution was to broadly similar effect[74].

    [72]Williams, The Australian Constitution:  A Documentary History (2005) at 80.

    [73]Williams, The Australian Constitution:  A Documentary History (2005) at 81. 

    [74]"Mr Kingston's Draft of a Constitution Bill prepared before the Convention", 26 February 1891 (Document 6) in Griffith, Successive Stages of the Constitution of the Commonwealth of Australia (1891, reprinted 1973).  See La Nauze, The Making of the Australian Constitution (1972) at 26.

45. The Constitution produced by the Constitutional Committee of the 1891 Convention, and submitted to the Convention, followed the Inglis Clark and Kingston model in relation to executive power. Clause 5 of the Inglis Clark draft became cl 1 of Ch II of the proposed Constitution, entitled "THE EXECUTIVE GOVERNMENT". It provided[75]:

    "The Executive power and authority of the Commonwealth is vested in the Queen, and shall be exercised by the Governor-General as the Queen's Representative."

    That clause was one of two precursors of s 61.

    [75]Williams, The Australian Constitution:  A Documentary History (2005) at 329.

46. The second precursor of s 61, a new provision with respect to executive power which had not appeared in either of the Inglis Clark or Kingston drafts, was cl 8 of the proposed Ch II[76]:

    "The Executive power and authority of the Commonwealth shall extend to all matters with respect to which the Legislative powers of the Parliament may be exercised, excepting only matters, being within the Legislative powers of a State, with respect to which the Parliament of that State for the time being exercises such powers."

    In speaking to the draft Bill, Sir Samuel Griffith said[77]:

    "It is proposed that [the Commonwealth's] executive authority shall be co-extensive with its legislative power.  That follows as a matter of course."

    The 1891 draft Constitution contained a paramountcy provision, cl 3 of Ch V, in terms identical to those which became s 109 of the Constitution[78].  That circumstance, and the non-exclusive character of most Commonwealth legislative powers, was at least consistent with the proposition that cl 8 was directed to cases in which the Commonwealth had exercised its concurrent legislative power on a particular subject matter.  The proposition is, to some degree, speculative because no explanation emerged at the time of what was meant by an executive power extending to matters with respect to which the legislative powers of the Parliament could be exercised. 

    [76]Williams, The Australian Constitution:  A Documentary History (2005) at 329.

    [77]Official Report of the National Australasian Convention Debates, (Sydney), 31 March 1891 at 527.

    [78]Williams, The Australian Constitution:  A Documentary History (2005) at 334.

47. In the course of consideration by the Convention in Committee in April 1891, cl 8 was amended, on Sir Samuel Griffith's motion, to read[79]:

    "The Executive power and authority of the Commonwealth shall extend to the execution of the provisions of this Constitution, and the Laws of the Commonwealth."

    In moving the amendment, Griffith said that it did not alter the intention of cl 8 and added[80]:

    "As the clause stands, it contains a negative limitation upon the powers of the executive; but the amendment will give a positive statement as to what they are to be."

    With what has been described as "an optimism that history has shown to be misplaced"[81] he said[82]:

    "That amendment covers all that is meant by the clause, and is quite free from ambiguity."

    The stated equivalence of the original and amended forms of cl 8 raised more questions than it answered.  As amended, the clause did not, in terms or by any stretch of textual analysis, describe an executive power to do any act dealing with a subject matter falling within a head of Commonwealth legislative power. 

    [79]"Copy Draft used in Committee of the Whole Convention.  1 April to 8 April, showing amendments made by the Committee" (Document 15) in Griffith, Successive Stages of the Constitution of the Commonwealth of Australia (1891, reprinted 1973). An identically worded provision was contained in a proposed Constitution for a federated Queensland submitted by Griffith to the Queensland Parliament in 1892. Clause 78 provided that the "Executive power and authority" of the United Provinces was to "extend to the execution of the provisions of this Constitution, and the laws of the United Provinces": Queensland Constitution Bill (No 2) 1892 (Q), cl 78. The Bill was defeated in the Legislative Council in October 1892.

    [80]Official Report of the National Australasian Convention Debates, (Sydney), 6 April 1891 at 777.

    [81]Crommelin, "The Executive", in Craven (ed), The Convention Debates 1891-1898:  Commentaries, Indices and Guide (1986) 127 at 131.

    [82]Official Report of the National Australasian Convention Debates, (Sydney), 6 April 1891 at 778.

48. The 1891 draft Constitution failed to secure support from the colonial legislatures[83]. Nevertheless, it became an important working document for the Drafting Committee of the Constitutional Committee of the National Australasian Convention which met in Adelaide in 1897. In debate at the Adelaide session, Edmund Barton, responding to a proposal to insert the words "in council" after "Governor-General" in s 61, described the executive power of the Crown as "primarily divided into two classes"[84]:

    "those exercised by the prerogative … and those which are ordinary Executive Acts, where it is prescribed that the Executive shall act in Council."

    The latter class he described as "the offsprings of Statutes."[85]  Quick and Garran summarised his observation as a statement that[86]:

    "Executive acts were either (1) exercised by prerogative, or (2) statutory."

    The draft Constitution, recommended to the 1897 Convention by the Constitutional Committee, made no substantial changes to the provisions of Ch II dealing with the location and nature of executive power. Sir Samuel Griffith, having become Chief Justice of Queensland, was not a delegate to the 1897-1898 Conventions. Nor was Inglis Clark present. His journey in 1897 to the United States, and his appointment in 1898 to the Supreme Court of Tasmania, precluded his attendance at those Conventions[87]. Nevertheless, Griffith and Inglis Clark offered written critiques of the draft Constitution under consideration in 1897. They did not propose any alterations relating to the location and scope of the executive power[88].  Nor did the Colonial Office beyond the suggestion, which was accepted, that the words "is exercisable" be substituted for the words "shall be exercised" in cl 60[89], the provision which evolved into s 61. That change was adopted at the Sydney Convention of 1897[90], along with other changes to Ch II which are not material for present purposes. 

    [83]La Nauze, The Making of the Australian Constitution (1972) at 88-89.

    [84]Official Report of the National Australasian Convention Debates, (Adelaide), 19 April 1897 at 910.

    [85]Official Report of the National Australasian Convention Debates, (Adelaide), 19 April 1897 at 910.

    [86]Quick and Garran, The Annotated Constitution of the Australian Commonwealth (1901) at 701.

    [87]La Nauze, The Making of the Australian Constitution (1972) at 93.

    [88]Griffith, "Notes on the Draft Federal Constitution framed by the Adelaide Convention of 1897", June 1897, reproduced in Queensland, Journals of the Legislative Council, vol 47 pt 1; Inglis Clark, "Proposed Amendments to the Draft of a Bill to Constitute the Commonwealth of Australia", reproduced in Williams, The Australian Constitution:  A Documentary History (2005) at 705.

    [89]Williams, The Australian Constitution:  A Documentary History (2005) at 715.

    [90]Official Record of the Debates of the Australasian Federal Convention, (Sydney), 17 September 1897 at 782.

49. After consideration by colonial legislatures, pursuant to enabling Acts establishing the 1897 Convention[91], the draft Constitution was revised by the Drafting Committee. As finally presented to the Melbourne Convention in 1898 the provisions which were to become s 61 of the Constitution were embodied in two clauses found in Ch II[92]:

    "60.The executive power of the Commonwealth is vested in the Queen, and is exercisable by the Governor-General as the Queen's representative.

    67.The executive power of the Commonwealth shall extend to the execution of this Constitution, and of the laws of the Commonwealth."

    Clauses 60 and 67, although not debated in Committee at the Melbourne Convention of 1898, were condensed into one clause by the Drafting Committee, namely cl 61, which became s 61 of the Constitution[93]. 

    [91]The Australasian Federation Enabling Act (South Australia) 1895, s 26; Australasian Federation Enabling Act 1895 (NSW), s 26; Australasian Federation Enabling Act 1896 (Vic), s 26; The Australasian Federation Enabling Act (Tasmania) 1896, s 26; Australasian Federation Enabling Act 1896 (WA), s 23.

    [92]Williams, The Australian Constitution:  A Documentary History (2005) at 1090 and 1092.

    [93]"Bill as proposed to be further amended by the Drafting Committee", (Melbourne), March 1898 at 17, reproduced in Williams, The Australian Constitution:  A Documentary History (2005) at 1091.

50. The two versions of cl 8 in the 1891 draft and Griffith's comment upon moving the amendment to the clause were relied upon in the "Vondel Opinion" signed by Alfred Deakin, as Attorney-General, in 1902. In that Opinion, Deakin gave a meaning to s 61 which, at least so far as the documentary record discloses, had not been exposed during the National Australasian Convention debates. He regarded executive power as existing "antecedently to, and independently of, legislation". Its scope was "at least equal to that of the legislative power – exercised or unexercised."[94]  Later in his Opinion he concluded[95]:

    [94]Deakin, "Channel of Communication with Imperial Government:  Position of Consuls:  Executive Power of Commonwealth", in Brazil and Mitchell (eds), Opinions of Attorneys-General of the Commonwealth of Australia, Volume 1:  1901-14 (1981) 129 at 131.   

    [95]Deakin, "Channel of Communication with Imperial Government:  Position of Consuls:  Executive Power of Commonwealth", in Brazil and Mitchell (eds), Opinions of Attorneys-General of the Commonwealth of Australia, Volume 1:  1901-14 (1981) 129 at 131.

    "the Commonwealth has executive power, independently of Commonwealth legislation, with respect to every matter to which its legislative power extends."

    Deakin's Opinion reflected that of the Secretary to the Attorney-General's Department, Robert Garran, who may have contributed to its drafting[96].  Garran, however, was later to resile from that opinion in testimony to the Royal Commission on the Constitution of the Commonwealth.  He told the Royal Commission[97]:

    "I used to have the view that some common law authority might be found for the executive; but, in view of those words in section 61, I think you must seek support for it either in the Constitution itself or in an act of Parliament."

    Deakin's Opinion contrasted sharply with that of Inglis Clark, expressed in 1901, that[98]:

    "It is evident that the legislative power of the Commonwealth must be exercised by the Parliament of the Commonwealth before the executive or the judicial power of the Commonwealth can be exercised by the Crown or the Federal Judiciary respectively, because the executive and the judicial powers cannot operate until a law is in existence for enforcement or exposition."

    It is not to be thought that Inglis Clark thereby took a narrow view of executive power. The power declared by s 61 of the Constitution to be vested in the Queen included "the discretionary authority of the Crown within the Commonwealth" and extended "to the maintenance and execution of the Constitution and of the laws of the Commonwealth."[99]  So far as the section referred to the Queen it was to be read as a declaration of an existing fact and not as an original grant of executive authority to her within the Commonwealth[100].

    [96]Garran would have played an important role in preparing drafts and settling opinions – see Brazil and Mitchell (eds), Opinions of Attorneys-General of the Commonwealth of Australia, Volume 1:  1901-14 (1981) at ix. 

    [97]Australia, Royal Commission on the Constitution of the Commonwealth, Report of Proceedings and Minutes of Evidence (Canberra), 27 September 1927 at 89.

    [98]Inglis Clark, Studies in Australian Constitutional Law (1901) at 38.

    [99]Inglis Clark, Studies in Australian Constitutional Law (1901) at 64.

    [100]Inglis Clark, Studies in Australian Constitutional Law (1901) at 64.

51. The extension of the executive power in the closing words of s 61 was not the subject of any exegesis by Quick and Garran, beyond their observation that the execution and maintenance of the Constitution and of laws passed pursuant to it would be "foremost" among the powers and functions conferred upon the Governor-General[101]. 

    [101]Quick and Garran, The Annotated Constitution of the Australian Commonwealth (1901) at 702.

52. The similarity between the words of extension in s 61 and the language of s 101 of the Constitution, which provides for the establishment and functions of the Inter-State Commission, is striking[102].  In New South Wales v The Commonwealth ("the Inter-State Commission case")[103], which was concerned with s 101, Isaacs J, with whom Powers J agreed[104], described s 61 as according with Blackstone's observation that[105]:

    "though the making of laws is entirely the work of a distinct part, the legislative branch, of the sovereign power, yet the manner, time, and circumstances of putting those laws in execution must frequently be left to the discretion of the executive magistrate."

    Barton J, dissenting in the result, equated the words "execute and maintain" with "enforce and uphold the laws of which they are the guardians."[106] 

    [102]Section 101 provides:

    "There shall be an Inter-State Commission, with such powers of adjudication and administration as the Parliament deems necessary for the execution and maintenance, within the Commonwealth, of the provisions of this Constitution relating to trade and commerce, and of all laws made thereunder."

    [103](1915) 20 CLR 54; [1915] HCA 17.

    [104](1915) 20 CLR 54 at 106; Powers J also agreed with Griffith CJ.

    [105](1915) 20 CLR 54 at 89, quoting Commentaries on the Laws of England (1765), bk 1, ch 7 at 261.

    [106](1915) 20 CLR 54 at 72.

53. Professor W Harrison Moore, writing in 1910, noted that the colonial constitutions were "almost silent on the subject of the powers as of the organization of the Executive."[107]   He identified as one function of the Executive the representation of the Commonwealth whenever necessary, "whether as a political organism, or as a juristic person making contracts and appearing as a party in Courts of justice."[108] That function required no express power. It flowed from the establishment of the Commonwealth as a new political community. The other functions were those conferred by the terms of s 61[109]. In relation to s 61, the Commonwealth Executive had more to do with the subject matters of Commonwealth legislative power than just giving effect to Commonwealth legislation[110]:

    "In relation to all such matters, the Commonwealth Executive does … represent the Commonwealth and all the States to the outside world, whether there has been any Commonwealth legislation or not".

    Further, where a power or duty committed to "the Commonwealth" under the Constitution was of a kind exercisable at common law by the Executive, the Commonwealth Executive was empowered to take such action as the common law allowed[111].

    [107]Harrison Moore, The Constitution of the Commonwealth of Australia, 2nd ed (1910) at 294.

    [108]Harrison Moore, The Constitution of the Commonwealth of Australia, 2nd ed (1910) at 295.

    [109]Harrison Moore, The Constitution of the Commonwealth of Australia, 2nd ed (1910) at 296. 

    [110]Harrison Moore, The Constitution of the Commonwealth of Australia, 2nd ed (1910) at 296.

    [111]Harrison Moore, The Constitution of the Commonwealth of Australia, 2nd ed (1910) at 297.  An example was the exercise of the discharge of the duty imposed by s 119 of protecting every State against invasion and, on the application of the executive government of the State, against domestic violence.

54. Professor A Berriedale Keith, in the first edition, published in 1912, of Responsible Government in the Dominions, described the executive power of the Commonwealth as "very large", adding[112]:

    "It includes in addition to the power conferred by Commonwealth Acts the power sole and exclusive over the transferred departments."

    In a subsequent edition, he also proposed that "[t]he executive power in the Commonwealth is little affected by considerations of the federal character of the Commonwealth."[113] 

    [112]Berriedale Keith, Responsible Government in the Dominions (1912), vol 2 at 811.

    [113]Berriedale Keith, Responsible Government in the Dominions, 2nd ed (1928), vol 2 at 623.

55. The Commonwealth submitted that it had been part of the accepted understanding of the Constitution, since the time of the National Australasian Convention debates, that the executive power of the Commonwealth supports executive acts dealing at least with matters within the enumerated heads of Commonwealth legislative power. There is no doubt that at the time of the Convention debates, the statement that the distribution of executive powers in a federation would follow the distribution of legislative powers was not novel. However, its meaning appears to have been no clearer then than it is now.

56. There is little evidence to support the view that the delegates to the National Australasian Conventions of 1891 and 1897-1898, or even the leading lawyers at those Conventions, shared a clear common view of the working of executive power in a federation. The Constitution which they drafted incorporated aspects of the written Constitutions of the United States and Canada, and the concept of responsible government derived from the British tradition. The elements were mixed in the Constitution to meet the Founders' perception of a uniquely Australian Federation. In respect of executive power, however, that perception was not finely resolved.

57. Quick and Garran distinguished the "Federal Executive power" conferred by s 61 from "the Executive power reserved to the States."[114]  The executive power of the Commonwealth as a united political community was divided into two parts:  "that portion which belongs to the Federal Government, in relation to Federal affairs … and that portion which relates to matters reserved to the States"[115].  Nevertheless, federal executive power and State executive power were "of the same nature and quality"[116].

    [114]Quick and Garran, The Annotated Constitution of the Australian Commonwealth (1901) at 701.

    [115]Quick and Garran, The Annotated Constitution of the Australian Commonwealth (1901) at 701.

    [116]Quick and Garran, The Annotated Constitution of the Australian Commonwealth (1901) at 702.

58. The tension between the operation of executive powers and functions under a system of responsible cabinet government and a federal constitution with a bi-cameral legislature, one element of which was a States' House, represented a difficulty for some leading figures in the Federation movement.  Professor Winterton wrote that there was "a direct conflict between responsible government as practised in Britain and the federal model the framers adopted from the United States."[117]  Quick and Garran attributed to Sir Samuel Griffith, Sir Richard Baker, Sir John Cockburn, Inglis Clark and Mr GW Hackett the view that "the Cabinet system of Executive is incompatible with a true Federation."[118]  At the 1891 Convention at Sydney, Hackett said, in words which have frequently been quoted, "either responsible government will kill federation, or federation … will kill responsible government."[119]  That sentiment was repeated by the Chair of Committees at the Convention, Sir Richard Baker, in a speech at Adelaide in 1897 in which he said[120]:

    "if we adopt this Cabinet system of Executive it will either kill Federation or Federation will kill it; because we cannot conceal from ourselves that the very fundamental essence of the Cabinet system of Executive is the predominating power of one Chamber."

    As Quick and Garran observed, the views of the objectors were not accepted. The system of responsible government under the British Constitution was embedded in the federal Constitution and cannot now be disturbed without amendment to that Constitution[121]. This Court has acknowledged the centrality of responsible government in the Constitution[122].  Quick and Garran predicted correctly that the system of responsible government would "tend in the direction of the nationalization of the people of the Commonwealth, and [would] promote the concentration of Executive control in the House of Representatives."[123]  To accept the correctness of that prediction is not to reflect upon the desirability or otherwise of the way in which the operation of our constitutional system of government has developed.

    [117]Winterton, Parliament, the Executive and the Governor-General (1983) at 5.

    [118]Quick and Garran, The Annotated Constitution of the Australian Commonwealth (1901) at 706.

    [119]Official Report of the National Australasian Convention Debates, (Sydney), 12 March 1891 at 280.

    [120]Official Report of the National Australasian Convention Debates, (Adelaide), 23 March 1897 at 28.  See also Baker, The Executive in a Federation (1897) at 3-4.

    [121]Quick and Garran, The Annotated Constitution of the Australian Commonwealth (1901) at 706-707.

    [122]R v Kirby; Ex parte Boilermakers' Society of Australia (1956) 94 CLR 254 at 275 per Dixon CJ, McTiernan, Fullagar and Kitto JJ; [1956] HCA 10. See also Victorian Stevedoring and General Contracting Co Pty Ltd and Meakes v Dignan (1931) 46 CLR 73 at 114 per Evatt J.

    [123]Quick and Garran, The Annotated Constitution of the Australian Commonwealth (1901) at 707.

59. Quick and Garran characterised s 61 as grafting the "modern political institution, known as responsible government" onto the "ancient principle of the Government of England that the Executive power is vested in the Crown"[124].  The difficulty, as they explained it, was[125]:

    "in a Federation, it is a fundamental rule that no new law shall be passed and no old law shall be altered without the consent of (1) a majority of the people speaking by their representatives in one House, and (2) a majority of the States speaking by their representatives in the other house; that the same principle of State approval as well as popular approval should apply to Executive action, as well as to legislative action; that the State should not be forced to support Executive policy and Executive acts merely because ministers enjoyed the confidence of the popular Chamber".

    Much has changed in the expectations and practices of government since the time of the Conventions. The financial dominance of the Commonwealth Government in relation to the States was no doubt anticipated by some delegates, although almost certainly not to the degree which has eventuated, particularly in the field of taxation, the use of conditional grants under s 96 and the erroneous reliance upon the appropriations provisions of the Constitution as a source of spending power. Another important development has been the expansion of the functions of government into "activities of an entrepreneurial or commercial kind which, in general, were previously engaged in only by subjects of the Crown."[126]

    [124]Quick and Garran, The Annotated Constitution of the Australian Commonwealth (1901) at 703.

    [125]Quick and Garran, The Annotated Constitution of the Australian Commonwealth (1901) at 706.

    [126]Re Residential Tenancies Tribunal (NSW); Ex parte Defence Housing Authority (1997) 190 CLR 410 at 438 per Dawson, Toohey and Gaudron JJ.

60. There is no clear evidence of a common understanding, held by the framers of the Constitution, that the executive power would support acts of the Executive Government of the Commonwealth done without statutory authority provided they dealt with matters within the enumerated legislative powers of the Commonwealth Parliament. A Commonwealth Executive with a general power to deal with matters of Commonwealth legislative competence is in tension with the federal conception which informed the function of the Senate as a necessary organ of Commonwealth legislative power. It would undermine parliamentary control of the executive branch and weaken the role of the Senate. The plaintiff submitted that the requirement of parliamentary appropriation is at best a weak control, particularly given the power of the Executive to advise the Governor-General to specify the purpose of appropriations. The inability of the Senate under s 53 to initiate laws appropriating revenue and its inability to amend proposed laws appropriating revenue for "the ordinary annual services of the Government" also point up the relative weakness of the Senate against an Executive Government which has the confidence of the House of Representatives. As the Solicitor-General of Queensland put it in oral argument, the Senate has limited powers to deal with an Appropriation Bill, whereas it has much greater powers with respect to general legislation which might authorise the Executive to spend money in specific ways.

567. The Commonwealth defendants' argument, on what they termed the "narrow basis", is put as an alternative to a broader argument as to the capacity of the Commonwealth to contract, a topic which will be dealt with later in these reasons. The narrow basis assumes that it is sufficient if the executive action of expenditure falls within the subject matter of Commonwealth legislative power in ss 51, 52 or 122 of the Constitution. The Commonwealth defendants do not acknowledge the need for legislative authority. On this approach, the questions concerning the validity of the Funding Agreement are to be answered by reference to legislative powers which might have been employed but were not, which is to say by hypothetical legislation.

568. The plaintiff, together with Queensland and Tasmania, takes issue with the correctness of such an approach and points to the absence of any authority which holds that the Executive has power to engage in activities which the Parliament could authorise, but has not. Queensland submits that the Commonwealth must point to a Commonwealth law, a provision of the Constitution, or something which inheres in the Commonwealth Executive, which would permit it to enter into the Funding Agreement.

569. It is not necessary in this case to resolve whether and in what circumstances legislative authority, or authority arising from the Constitution, is required. That is because the Commonwealth defendants identify two heads of power as appropriate to support the Funding Agreement – s 51(xxiiiA), by which "benefits" may be provided to students, and s 51(xx) respecting trading corporations – and reliance upon these heads of power is misplaced.

570. The inclusion of s 51(xxiiiA) in the Constitution, following a referendum, was a response to this Court's decision in the Pharmaceutical Benefits Case[700]. In the Second Reading Speech to the Constitution Alteration (Social Services) Bill 1946[701], the amendment was said by the Attorney-General of the Commonwealth to be necessary to "authorize the continuance of acts providing benefits in the nature of social services, and to authorize the Parliament in the future to confer benefits of a similar character."  The Bill was said not to seek an extension of the "appropriation power", but was "limited to benefits of a social service character and, in the main, to benefits of a type provided for by legislation already on the statute-book."[702]  The provision of benefits to students at that time primarily took the form of financial assistance[703], such as the payment of a student's tuition and other University fees and the provision of allowances[704]. A purpose of the introduction of s 51(xxiiiA) was to confirm the Commonwealth's power to continue providing assistance of that kind.

     [700](1945) 71 CLR 237.

     [701]Which became the Constitution Alteration (Social Services) 1946 (Cth), s 2 of which inserted s 51(xxiiiA) into the Constitution.

     [702]Australia, House of Representatives, Parliamentary Debates (Hansard), 27 March 1946 at 648.

     [703]See the former Education Act 1945 (Cth), s 14(c), which was one of the provisions said by the Attorney-General of the Commonwealth to be of doubtful validity: Australia, House of Representatives, Parliamentary Debates (Hansard), 27 March 1946 at 648; see also the former National Security (Universities Commission) Regulations (Cth), reg 17.

     [704]National Security (Universities Commission) Regulations, reg 17, par 2 of Second Schedule.

571. The word "benefits" is not limited to money; it may extend to services.  So much is clear from the meaning given to the term by McTiernan J in British Medical Association v The Commonwealth ("the BMA Case")[705], which was approved by the Court in Alexandra Private Geriatric Hospital Pty Ltd v The Commonwealth[706].  His Honour stated:

     "The material aid given pursuant to a scheme to provide for human wants is commonly described by the word 'benefit.'  When this word is applied to that subject matter it signifies a pecuniary aid, service, attendance or commodity made available for human beings under legislation designed to promote social welfare or security:  the word is also applied to such aids made available through a benefit society to members or their dependants.  The word 'benefits' in par (xxiiiA) has a corresponding or similar meaning."

     [705](1949) 79 CLR 201 at 279; [1949] HCA 44.

     [706](1987) 162 CLR 271 at 280; [1987] HCA 6.

572. It may be inferred from this description and the structure of s 51(xxiiiA) that the power to make provision for benefits to students is not a power to provide anything which may be of benefit to them. "Benefits" has a more tangible meaning than that. In the present context, it refers to social services provided to students. Social services provided to students might take the form of financial assistance, for example payment of fees and living and other allowances, or material assistance, such as the provision of books, computers and other necessary educational equipment, or the provision of services, such as additional tutoring. The term "benefits" in the context of s 51(xxiiiA) does not extend to every service which may be supportive of students at a personal level in the course of their education.

573. "Benefits to students" provided pursuant to s 51(xxiiiA) must be provided by the Commonwealth[707] to students.  Benefits may be provided to students through a third party.  The passage from the BMA Case quoted above recognises this. However, care must be taken not to give s 51(xxiiiA) a wider operation than was intended. The power given is to provide benefits to students, not funding to schools. The power to provide benefits to students is not one to assist schools to provide services associated with education which may be of some benefit to students. Moreover, benefits provided to students in reliance on s 51(xxiiiA) must be provided to students as a class. It is clear from the Funding Agreement itself that the chaplaincy services are to be provided not only to students, but to the school's staff and members of the wider school community. This suggests that there is a wider purpose to the Funding Agreement.

     [707]British Medical Association v The Commonwealth (1949) 79 CLR 201 at 243 per Latham CJ, 254 per Rich J, 260 per Dixon J, 279, 282 per McTiernan J, 292 per Webb J; Alexandra Private Geriatric Hospital Pty Ltd v The Commonwealth (1987) 162 CLR 271 at 279 per Mason ACJ, Wilson, Brennan, Deane and Dawson JJ.

574. The Funding Agreement does not provide benefits to students and is not a contract for the provision of such benefits. It is a contract to provide funds for the provision of chaplaincy services in a school, as part of the education-related program of the school. A hypothetical statute authorising the Funding Agreement could not be supported by s 51(xxiiiA).

575. The Commonwealth defendants' contention that the Funding Agreement might be authorised by s 51(xx), the corporations power, may be dealt with shortly. The question is not whether SUQ is a trading or financial corporation, as much of the argument assumed. The Guidelines did not require a party to a funding agreement entered into pursuant to the NSCP to be a trading or financial corporation. Any statute authorising the Funding Agreement could not be said to be concerned with the regulation of the activities, functions, relationships and business of a corporation, the rights and privileges belonging to a corporation, the imposition of obligations upon it, or the regulation of the conduct of those through whom it acts[708].  More generally, any legislation supporting the Funding Agreement would not single out constitutional corporations as the object of its statutory command[709].

     [708]Re Pacific Coal Pty Ltd; Ex parte Construction, Forestry, Mining and Energy Union (2000) 203 CLR 346 at 375 [83] per Gaudron J; [2000] HCA 34; New South Wales v The Commonwealth (Work Choices Case) (2006) 229 CLR 1 at 114-115 [178] per Gleeson CJ, Gummow, Hayne, Heydon and Crennan JJ; [2006] HCA 52.

     [709]New South Wales v The Commonwealth (Work Choices Case) (2006) 229 CLR 1 at 121 [198].

576. The Commonwealth defendants' alternative, and broader, submission is that there is no relevant limitation upon the power of the Commonwealth Executive to spend monies. That is so, it is said, because it has a capacity to contract that is not limited by reference to the division of legislative powers effected by the Constitution, a capacity which is analogous to that of a natural person. In the Commonwealth defendants' submission, the Commonwealth's power to contract to spend money is no less than that of a natural person, except that it is constrained by the political accountability of the Executive to Parliament and the need for an appropriation by Parliament before an expenditure can be effected.

577. One observation that may immediately be made about the submission concerns a difference between the Commonwealth Executive and a natural person contracting. When the Commonwealth contracts, it may be committing to the expenditure of public monies. But questions as to the capacity of the Commonwealth Executive to contract may be put aside for present purposes. They may be dealt with after consideration is given to the fundamental proposition which lies at the heart of the submission, namely that the Commonwealth Executive has a relevantly unlimited power to spend. That proposition raises questions about the relationship between the Executive and the Commonwealth Parliament and it raises questions about the position of the Commonwealth government under the Constitution.

578. A factor which was influential to Isaacs J's view in the Wooltops Case, that Commonwealth legislation or the Constitution was required to authorise the Executive's entry into contracts, was the doctrine of responsible government[710]. His Honour saw the doctrine as important to an understanding of the relationship between the six separate "constitutional units" in Australia, comprised of the six colonies that existed prior to federation. In this regard, he said responsible government was "the key to the full understanding and interpretation of the third declaration in sec 61 of the Constitution."[711]  And he saw its operation as a necessary control over expenditure[712].

     [710]The Commonwealth v Colonial Combing, Spinning and Weaving Co Ltd (1922) 31 CLR 421 at 438-439, 446-451.

     [711]The Commonwealth v Colonial Combing, Spinning and Weaving Co Ltd (1922) 31 CLR 421 at 439.

     [712]The Commonwealth v Colonial Combing, Spinning and Weaving Co Ltd (1922) 31 CLR 421 at 449-450.

579. The principle of responsible government, derived from parliamentary history and practice in the United Kingdom, is a central feature of the Australian Constitution[713].  The relationship it establishes between the Parliament and the Executive may be described as one where the former is superior to the latter[714].  Thus it was stated in Brown v West[715] that whatever be the scope of Commonwealth executive power, it is susceptible of control by statute.  Their Honours went on to say that a valid law of the Commonwealth may limit the exercise of executive power such that acts which would otherwise be supported by the executive power fall outside its scope.

     [713]Amalgamated Society of Engineers v Adelaide Steamship Co Ltd (1920) 28 CLR 129 at 146-147; [1920] HCA 54; R v Kirby; Ex parte Boilermakers' Society of Australia (1956) 94 CLR 254 at 275; [1956] HCA 10.

     [714]Winterton, "The Relationship between Commonwealth Legislative and Executive Power", (2004) 25 Adelaide Law Review 21 at 36.

     [715](1990) 169 CLR 195 at 202 per Mason CJ, Brennan, Deane, Dawson and Toohey JJ; [1990] HCA 7.

580. The decision in the Wooltops Case has been considered to have gone too far in one respect, in requiring that there be a valid Commonwealth law providing the necessary authority before the Executive could contract[716].  In New South Wales v Bardolph[717], Dixon J agreed that the principles of responsible government impose a responsibility on the Executive to Parliament and that Parliament retains control over expenditure of public monies and therefore the power of enforcing that responsibility, but said that the principle does not disable the Executive from acting without the prior approval of Parliament, nor from contracting conditionally upon appropriation by Parliament[718].

     [716]The Commonwealth v Colonial Combing, Spinning and Weaving Co Ltd (1922) 31 CLR 421 at 433, 455, 460-461.

     [717](1934) 52 CLR 455; [1934] HCA 74.

     [718]New South Wales v Bardolph (1934) 52 CLR 455 at 509, Gavan Duffy CJ agreeing at 493; and see also Ansett Transport Industries (Operations) Pty Ltd v The Commonwealth (1977) 139 CLR 54 at 61 per Barwick CJ, 113 per Aickin J, where their Honours appear to support that view; [1977] HCA 71.

581. Considerations as to the supremacy of Parliament which underlie the doctrine of responsible government may provide a basis for limiting executive power to certain of the legislative heads of power. As was pointed out by the plaintiff and the Solicitor-General of Queensland in argument, if the Executive's power to spend was unlimited, s 51(xxxix), when used to support the executive power, might operate to extend that power beyond those matters which may, expressly or impliedly, be otherwise the subject of legislative power. In that event the relationship between the Executive and the Parliament and the dominant position of the Parliament may be altered. Such an extension of power may enable the Commonwealth to encroach upon areas of State operation and thereby affect the distribution of powers as between the Commonwealth and the States.

582. The executive power may extend beyond the subjects of Commonwealth legislative power in that it includes prerogative powers and the power to carry out the essential functions and administration of a constitutional government.  It is not suggested that these powers are engaged in the present case.

583. The executive power also includes the capacity of the Executive to "engage in enterprises and activities peculiarly adapted to the government of a nation and which cannot otherwise be carried on for the benefit of the nation", of which Mason J spoke in the AAP Case[719].  That capacity is to be deduced from "the existence and character of the Commonwealth as a national government"[720].  This is the power upon which the majority in Pape relied[721].

     [719]Victoria v The Commonwealth and Hayden (1975) 134 CLR 338 at 397.

     [720]Victoria v The Commonwealth and Hayden (1975) 134 CLR 338 at 397 per Mason J; see also at 362 per Barwick CJ, 375 per Gibbs J.

     [721]Pape v Federal Commissioner of Taxation (2009) 238 CLR 1 at 63-64 [133] per French CJ, 91-92 [241]-[242] per Gummow, Crennan and Bell JJ.

584. Dixon J, in the Pharmaceutical Benefits Case[722], spoke of the position that the Commonwealth occupies as a national government and suggested that "no narrow view" should be taken of its powers.  But his Honour went on to identify limitations on the executive power of a kind mentioned earlier in these reasons, stating that "the basal consideration would be found in the distribution of powers and functions between the Commonwealth and the States."  Mason J in the AAP Case expressly acknowledged that the distribution of legislative powers necessarily limited the scope of the power to be implied from the position and status of the Commonwealth as a national government[723].

     [722]Attorney-General (Vict) v The Commonwealth (1945) 71 CLR 237 at 271-272.

     [723]Victoria v The Commonwealth and Hayden (1975) 134 CLR 338 at 398.

585. It is true that, until Pape, limitations on the scope of the executive power of expenditure were mostly viewed through the prism of s 81, which involved the question whether an undertaking was "for the purposes of the Commonwealth". Even so, the judgments in the AAP Case make plain that the executive power generally was viewed as subject to limitation.  And in Pape it was observed that no statement of this Court has suggested that the executive power of the Commonwealth is unbounded[724]. The limitation consistently observed was that arising from the distribution of powers effected by the Constitution as between the Commonwealth and the States. Isaacs J in the Wooltops Case, it will be recalled, considered the third declaration in s 61 as a constitutional delimitation as between the Commonwealth and the States[725].

     [724]Pape v Federal Commissioner of Taxation (2009) 238 CLR 1 at 119 [335] per Hayne and Kiefel JJ.

     [725]The Commonwealth v Colonial Combing, Spinning and Weaving Co Ltd (1922) 31 CLR 421 at 441.

586. In the AAP Case, Mason J observed that, although the ambit of the executive power is not defined in Ch II, "it is evident that in scope it is not unlimited and that its content does not reach beyond the area of responsibilities allocated to the Commonwealth by the Constitution, responsibilities which are ascertainable from the distribution of powers, more particularly the distribution of legislative powers, effected by the Constitution itself and the character and status of the Commonwealth as a national government."[726]  In R v Duncan; Ex parte Australian Iron and Steel Pty Ltd[727], Mason J added to these observations that "[o]f necessity the scope of the power is appropriate to that of a central executive government in a federation in which there is a distribution of legislative powers".  These statements by Mason J were approved in R v Hughes[728] and in Pape[729].

     [726]Victoria v The Commonwealth and Hayden (1975) 134 CLR 338 at 396.

     [727](1983) 158 CLR 535 at 560; [1983] HCA 29.

     [728](2000) 202 CLR 535 at 554-555 [38] per Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ; [2000] HCA 22.

     [729]Pape v Federal Commissioner of Taxation (2009) 238 CLR 1 at 63 [132] per French CJ, 114 [323], 115-116 [327] per Hayne and Kiefel JJ; see also at 181 [519], 188-189 [537] per Heydon J.

587. The reasons given by Mason J for the necessary limitation upon the power of the Executive Government to engage in activities "peculiarly adapted to the government of a nation" largely concern the division of responsibilities between the Commonwealth and the States.  His Honour said that it would be inconsistent with that division to effect "a radical transformation" of the Commonwealth's "area of responsibility under the Constitution"[730].  To do so, his Honour observed, would enable the Commonwealth to carry out programs outside the acknowledged heads of legislative power merely because it was convenient for the national government to formulate and administer them.  These observations are apposite to this case.

     [730]Victoria v The Commonwealth and Hayden (1975) 134 CLR 338 at 398.

588. In Davis v The Commonwealth[731], Mason CJ, Deane and Gaudron JJ said that the scope of Commonwealth executive power had "often been discussed but never defined."  Their Honours referred to the responsibilities derived from the distribution of powers and the character and status of the Commonwealth as a national polity and said[732] that "the existence of Commonwealth executive power in areas beyond the express grants of legislative power will ordinarily be clearest where Commonwealth executive or legislative action involves no real competition with State executive or legislative competence."

     [731](1988) 166 CLR 79 at 92.

     [732]Davis v The Commonwealth (1988) 166 CLR 79 at 93-94.

589. In Davis, Brennan J also observed[733] that the statement by Mason J in the AAP Case, that the Executive Government had power to engage in activities peculiarly adapted to the government of a nation and which otherwise cannot be carried on for its benefit, invites consideration of the sufficiency of the powers of the States to engage effectively in the enterprise or activity in question and therefore of the need for national action, whether unilateral or in co-operation with the States.

     [733]Davis v The Commonwealth (1988) 166 CLR 79 at 111.

590. In the present case it cannot be said that no competition may be involved between the State and Commonwealth Executives.  Both governments require adherence to their respective guidelines as a condition of funding and both governments publish those guidelines independently of each other and not co-operatively.  A party to a funding agreement, such as SUQ, is required to conform to the content of such guidelines as may be determined by the Commonwealth and the State of Queensland respectively.  There is clearly the potential for some disparity or inconsistency in what is required.

591. The answer to the question posed by Brennan J in Davis is tolerably clear in this case.  The Queensland Government is not only in a position to administer funding for chaplaincy services in schools of that State.  It funds some such services itself and it has been actively involved in the development of policy in that area.

592. The distribution of powers effected under the Constitution directs attention to s 96. It may be that s 96 enables the Commonwealth to intrude in point of policy and administration, by the conditions it attaches to grants, into areas outside the Commonwealth's legislative competence[734]. However, s 96 permits that course. Importantly, it also confirms that the executive power "is not unlimited and that there is a very large area of activity which lies outside the executive power of the Commonwealth but which may become the subject of conditions attached to grants under s 96."[735]

     [734]Victoria v The Commonwealth and Hayden (1975) 134 CLR 338 at 357 per Barwick CJ.

     [735]Victoria v The Commonwealth and Hayden (1975) 134 CLR 338 at 398 per Mason J.

593. The funding of school chaplains might be accommodated by grant on condition under s 96. That is the means by which funding for education-related purposes has been effected in the past. As Heydon J observed in Pape[736], if the Commonwealth executive power to spend is said to be unlimited, s 96 becomes otiose.

     [736]Pape v Federal Commissioner of Taxation (2009) 238 CLR 1 at 199 [569].

594. It may be accepted that the executive power extends to its prerogative powers, to subject matters of express grants of legislative power in ss 51, 52 and 122 and to matters which are peculiarly adapted to the government of a nation. None of these powers support the Funding Agreement and the payment of monies under it. By analogy with the approach taken by Gibbs CJ in The Commonwealth v Tasmania (The Tasmanian Dam Case)[737], there is nothing about the provision of school chaplaincy services which is peculiarly appropriate to a national government.  They are the province of the States, in their provision of support for school services, as evidenced in this case by the policy directives and funding undertaken by the Queensland Government.  Funding for school chaplains is not within a discernible area of Commonwealth responsibility.

     [737](1983) 158 CLR 1 at 109; [1983] HCA 21.

595. The contention of the Commonwealth defendants that the Commonwealth Executive should be taken to have a relevantly unlimited capacity to contract, by analogy with a natural person, is not to the point.  The question is not one of the Executive's juristic capacity to contract, but its power to act[738]. Actions of the Executive must necessarily fall within the confines of some power derived from the Constitution[739].  Such an approach is evident in the Shipping Board Case, where it was held that there was neither legislative nor executive power to set up the business in question. An activity not authorised by the Constitution could not fall within the power of the Executive[740]. The Executive is not authorised by the Constitution to expand its powers by contract.

     [738]See Victoria v The Commonwealth and Hayden (1975) 134 CLR 338 at 362 per Barwick CJ, 379 per Gibbs J, 396 per Mason J.

     [739]Victoria v The Commonwealth and Hayden (1975) 134 CLR 338 at 362 per Barwick CJ, 379 per Gibbs J, 396 per Mason J.

     [740]The Commonwealth v Australian Commonwealth Shipping Board (1926) 39 CLR 1 at 9-10.

596. So far as concerns the further contention of the Commonwealth defendants, which relied upon s 44 of the Financial Management and Accountability Act 1997 (Cth), I agree with Gummow and Bell JJ[741] that Pt 7 of that Act does not confer power to spend the monies to be advanced under the Funding Agreement.

     [741]At [103].

597. The foregoing is sufficient to dispose of questions 2(a) and 4(a). I agree with the answers to these questions proposed by Gummow and Bell JJ. It is not strictly necessary to answer questions 2(b) and 4(b), asking whether the Funding Agreement is invalid by reason of s 116 of the Constitution, which relevantly provides that "no religious test shall be required as a qualification for any office or public trust under the Commonwealth." However, I agree with Gummow and Bell JJ[742] that the plaintiff's case in this regard fails at the threshold, because the chaplains engaged by SUQ hold no office under the Commonwealth.

     [742]At [108]-[109].

598. I also agree with the balance of the answers proposed by Gummow and Bell JJ.