There is, of course, a preliminary question: on its true construction what is the scope of cl 44(1)? Is it confined in operation to prevent discrimination against a carrier by laws which affect the provision of telecommunications services? Or does it purport to grant a carrier exemption from all discriminatory State or Territory laws? The answer to the preliminary question will go a long way toward resolving whether the clause is valid. And for both purposes (construction and validity) it is necessary to have regard to the central features of the Telco Act. As to the first purpose (construction) it is not necessary to cite authority, for the proposition is trite. As to the second purpose (validity) it is sufficient to refer to the often cited passage from the judgment of Latham CJ in the Bank Nationalisation case: Bank of New South Wales v Commonwealth (1948) 76 CLR 1 at 186:
"In determining the validity of a law it is in the first place obviously necessary to construe the law and to determine its operation and effect (that is, to decide what the Act actually does), and in the second place to determine the relation of that which the Act does to a subject matter in respect of which it is contended that the relevant Parliament has power to make laws. A power to make laws with respect to a subject matter is a power to make laws which in reality and substance are laws upon the subject matter."
20 One of the main objects of the Telco Act is to provide a regulatory framework that promotes "the efficiency … of the Australian telecommunications industry": s 3(1)(b). That object may be achieved by promoting the effective participation, and thereby maximising the efficiency, of carriers (the holder of a carrier licence under the Act) and service providers (either a carriage service provider or a content service provider) which are the primary suppliers of Australia's telecommunications services. Subject to certain immaterial exceptions, an organisation that wishes to supply carriage services (defined in s 7 to mean "a service for carrying communications by means of guided and/or unguided electromagnetic energy") must hold a carrier licence: s 42. Provision is made for the application, grant, refusal and cancellation of a carrier licence in Pt 3, Div 3. If granted, a carrier licence is subject to the conditions specified in Sch 1: s 61. The conditions in Sch 1 include the following: (1) A carrier must comply with the Telco Act (Pt 1); (2) A carrier must have an industry development plan for the development, in connection with the carrier's business, of industries involved in the manufacture and supply of telecommunications infrastructure as well as research and development in those industries (Pt 2); (3) A carrier must provide other carriers with access to its facilities (Pt 3), to certain network information (Pt 4) and to its telecommunications transmission towers and underground facilities (Pt 5). Telstra Corporation, Telstra Multimedia and Optus Networks hold carriers licences.
21 Since Federation telecommunications services have been provided either by government (the Postmaster General), by a statutory corporation (eg Australian Telecommunications Commission) or by an ordinary public company (eg Optus) including a company in which the Government holds a majority of the shares (Telstra). It has always been necessary for the Commonwealth Parliament to confer powers upon the department or corporation (as the case may be) to conduct and operate the facilities that are necessary to provide telecommunications services. These powers are now to be found in Sch 3 which is given effect by s 484. The powers are summarised in Div 1 of Pt 1 in what is called "a simplified outline" of the relevant part of the Schedule. Much of what follows is taken from that outline. By Div 2 a carrier is given power to enter on any land (including public places) and carry out an inspection for the purpose of determining whether the land is suitable for the carrier's purposes. By Div 3 a carrier is given power to install certain types of facilities on the land. In Div 4 the carrier is empowered to maintain its facilities. A carrier may be authorised to install a facility by a facility installation permit. A facility installation permit will only be issued if, among other things, (a) the carrier has made reasonable efforts to negotiate in good faith with the owner of the land and any relevant administrative authority, (b) where the facility is a designated overhead line, each relevant administrative authority has approved the installation of the line, and (c) the telecommunications network to which the facility relates is or will be of national significance. In exercising its powers under Divs 2, 3 and 4 a carrier must take all reasonable steps to ensure that it causes as little detriment and inconvenience as is practicable: Div 5 cl 8. It must also take reasonable steps to ensure that if it engages in activity on any land, the land is restored to a condition that is similar to its condition before the activity began: Div 5 cl 9. Before a carrier can engage in an activity under Div 2, 3 or 4 in relation to any land, it must give written notice of its intention to do so to the owner and occupier of the land: Div 5 cl 17. In particular, it must give notice of its intention to cut down any trees or clear any undergrowth: Div 5 cl 18. It must also give notice to the responsible authority of its intention to close or narrow any road or bridge, install a facility on, over or under a road or bridge, or alter the position of a water, sewerage or gas main or electricity cable or wire: Div 5 cl 19.
22 Division 7 (comprising cls 36 to 39) is important. It is headed "Exemptions from State and Territory laws". Clause 36 provides that subject to the next clause, Divs 2, 3 and 4 do not operate so as to authorise an activity to the extent that the carrying out of the activity would be inconsistent with the provisions of a law of a State or Territory. Clause 37 sets out certain exemptions from cl 36. The clause provides that a carrier may engage in an activity authorised by Div 2, 3 or 4 despite certain laws of a State or Territory that would otherwise regulate that activity. The particular laws of a State or Territory in respect of which the exemption is given include laws about "(c) town planning … (e) the powers and functions of a local government body … [and] (f) the use of land." Clause 38 deals with the concurrent operation of State and Territory laws by providing that: "It is the intention of the Parliament that, if cl 37 entitles a carrier to engage in activities despite particular laws of a State or Territory, nothing in this Division is to affect the operation of any other law of a State or Territory, so far as that other law is capable of operating concurrently with [the Telco] Act." Clause 39 states that: "This Division [7] does not affect the liability of a carrier to taxation under a law of a State or Territory." (In passing we note that the respondents placed no reliance on this clause when dealing with the effect of cl 44. We attribute this decision to a view that, if valid, cl 44 is intended to cover all discriminatory legislation including taxation legislation).
Finally, reference must be made to Div 8 (comprising cls 40 to 55) which contains a number of miscellaneous provisions. Clause 42 deals with compensation and provides that "[i]f a person suffers financial loss or damage because of anything done by a carrier under Division 2, 3 or 4 in relation to" any of his property he is entitled to reasonable compensation from the carrier. Clause 43 is concerned with certain powers conferred by Divs 2, 3 and 4, and provides that those powers can also be exercised by an employee of the carrier, a person acting for the carrier under a contract, and an employee of that person. Clause 44 is set out in par 19. Clause 52 provides that "Divisions 2, 3 and 4 do not authorise a carrier to engage in any activity contrary to the requirements of another law of the Commonwealth."
23 This survey of Sch 3 shows that one of its objects is to make lawful the conduct of a carrier when engaged in the activities described in Divs 2, 3 and 4 that might otherwise be unlawful, either because of a provision of a State or Territory statute, such as a local government statute, or because of a rule of the common law, for example, trespass or nuisance. This is the context in which the operation of cl 44 must be considered. Once it is seen that the principal purpose of Sch 3 is to authorise a carrier to engage in the activities mentioned in Divs 2, 3 and 4, it is but a short step to conclude that the discrimination against which cl 44, if valid, gives protection must relate to the carrying out of those activities. To give cl 44 any wider operation would be to give it an operation which is inconsistent (in the general, not the constitutional sense) with the evident purpose of the provision, and an effect which is not in harmony with the other clauses in Divs 7 and 8 to which we have referred.
24 Viewed in this light it can be seen that the object cl 44 is designed to achieve (in the sense explained by Brennan CJ in Cunliffe v Commonwealth (1994) 182 CLR 272 at 319 and Leask v Commonwealth (1996) 187 CLR 579 at 591, or as Dawson J put it in Leask at 603 "what the law [cl 44] does in fact") is to prevent State or Territory legislatures from enacting potentially unfairly discriminatory legislation which would burden the activities of a carrier in the course of providing the telecommunications services for which the carrier holds a permit.
VALIDITY OF CLAUSE 44
25 Now that the scope and object of cl 44 have been ascertained it is possible to determine whether it is within a head of power. The Constitution provides in s 51(v) that the Commonwealth may make laws for the peace, order and good government of the Commonwealth with respect to "postal, telephonic, telegraphic and other like services." In R v Brislan; Ex parte Williams (1935) 54 CLR 262 at 277 Latham CJ said of this placitum:
"It appears to me to be impossible to attach any definite meaning to sec. 51(v) short of that which gives full and complete power to Parliament to provide or to abstain from providing the services mentioned, to provide them upon such conditions of licences and payment as it thinks proper, or to permit other people to provide them, subject or not subject to conditions, or to prohibit the provision of such facilities altogether."
Hence the power under s 51(v) extends to matters such as the establishment of a corporation that will provide telecommunications services, the licensing of a private organisation to provide those services, the imposition of conditions with which the provider of the services (government or private organisation) must conform, and the grant of special powers to enable the provider of the services to construct and maintain the requisite infrastructure: see generally Jones v Commonwealth (No 2) (1965) 112 CLR 206.
26 To determine whether a statute is within the relevant Commonwealth head of power one applies a test which in most aspects is uncontroversial. Once the true character of the law has been determined, having regard to both its text and practical operation, it must be shown that the law has a sufficient (that is a substantial) connection with the head of power: Strickland v Rocla Concrete Pipes Ltd (1971) 124 CLR 468 at 490‑491 per Barwick CJ; Leask at 591 per Brennan CJ, 605 per Dawson J, 616 per McHugh J, 621-622 per Gummow J. In Cunliffe, Mason CJ said (at 294):
"There is authority for the proposition that, for the purpose of determining whether a law can be described as one 'with respect to' a particular head of legislative power, the character of that law is to be determined by reference to its direct legal operation according to its terms. Thus, the character of the law is to be ascertained by reference to the nature of the rights, duties and privileges which it creates, changes, abolishes or regulates. But this is not to deny the validity of a law which exhibits in its practical operation a substantial or sufficient connexion with the relevant head of power. Nor does it necessarily mean that a law whose direct legal operation is upon the rights, duties and privileges of persons who ordinarily stand outside the head of power … can only be supported as a law which touches what is incidental to the subject matter of the relevant power."
Brennan J said (at 314) that the substantiality of the law's connection with the head of power was to be ascertained by reference to the law's operation and effect. He went on (at 315):
"The true character of [the particular law] must be ascertained by reference to both its text and its practical operation in the circumstances to which it applies. Its validity must be ascertained by reference to the degree of connexion between its text and operation on the one hand and the subject matter of the relevant head of Commonwealth power …on the other."
See also per Dawson J at 351.
27 Accordingly, if a connection exists between the law and a head of power the law will be "with respect to" that head of power. Of course there may be some cases where the connection is "so insubstantial, tenuous or distant" (to use the language of Dixon J in Melbourne Corporation v Commonwealth (1947) 74 CLR 31 at 79) that the law will not be within the head of power. For that reason "[e]stablishing the requisite connection is often a matter of degree": Leask at 602 per Dawson J. It will not matter that the law has more than one character, and that its other character or characters fall outside the head of power. Again reference should be made to the judgment of Dixon J in Melbourne Corporation where (at 79) he said:
"Speaking generally, once it appears that a federal law has an actual and immediate operation within a field assigned to the Commonwealth as a subject of legislative power, that is enough. It will be held to fall within the power unless some further reason appears for excluding it. That it discloses another purpose and that the purpose lies outside the area of federal power are considerations which will not in such a case suffice to invalidate the law."
28 The provisions of the Telco Act to which reference has been made, apart from the provisions in Divs 7 and 8, deal with the licensing of an organisation to act as a carrier, and establish the rights and duties of the licensed carrier. The provisions in Divs 7 and 8 show that for most, but not all, purposes a carrier is subject to all applicable laws of the land, whether they be Commonwealth, State or Territory. It could not be doubted that these provisions are within s 51(v). A head of power such as s 51(v) will also enable Parliament to confer a measure of protection on the organisation which has been granted permission to provide telecommunications services, including protection against what Parliament regards as unfair treatment at the hands of State or Territory legislation, such as discriminatory laws that could inhibit the efficient provision of telecommunications services. In this regard, reference need only be made to three decisions. The first case is Australian Coastal Shipping Commission v O'Reilly (1962) 107 CLR 46. The Commonwealth Parliament established the Australian Coastal Shipping Commission in exercise of the trade and commerce power in s 51(i) of the Constitution. The function of the Commission was to establish, maintain and operate shipping services. It was not in dispute that s 51(i) authorised the establishment of the Commission with authority to carry out its function: at 61. The question was whether s 36 of the enactment was valid. Section 36 provided that the Commission was subject to taxation under the laws of the Commonwealth, but was not subject to taxation under a law of a State or Territory. The High Court declared the section to be valid. Dixon CJ explained (at 55):
"The legislative power [s 51(i)]seems ample not only to enable the Parliament to establish a corporate agency of the Commonwealth to carry on an overseas and inter‑State shipping line, but also to protect the Commonwealth Government body from what may be considered the embarrassment of taxation by the various States. It is not material to enquire into the motive of the provision. Its validity depends upon its relevance to, or connexion with, the purpose."
29 The second case is Strickland v Rocla Concrete Pipes Ltd (1971) 124 CLR 468. The question to be decided in that case was whether certain provisions of the Trade Practices Act 1965 (Cth) were valid. In part the answer depended upon the correctness of Huddart Parker & Co Pty Ltd v Moorehead (1909) 8 CLR 330 where the High Court found that ss 5(1) and 8(1) of the Australian Industries Preservation Act 1906 (Cth) were invalid. Section 5(1) prohibited combinations with the intent to restrain trade or to injure any Australian industry by means of unfair competition. Section 8(1) rendered illegal certain monopolies. In Strickland, Huddart Parker was overruled. The High Court held that ss 5 and 8 were valid. The provisions both regulated and controlled the trading activities of corporations. Their object was to protect Australian industry and Australian trade and commerce and this brought them within the scope of the corporations power, s 51 (xx).
30 The third case is Actors and Announcers Equity Association of Australia v Fontana Films Pty Ltd (1982) 150 CLR 169 which considered the validity of the secondary boycott provisions, s 45D of the Trade Practices Act 1974 (Cth). The question was whether s 45D was authorised by the corporations power. The appellants argued that s 45D was invalid because it did not regulate the activities of the corporation and the corporations power did not permit the making of a law that was for the protection of corporations. The argument was rejected. There is a passage in the judgment of Mason J (at 205‑206) which is worth setting out in full:
"The appellants seek to draw a distinction between a law which regulates the trading activities of a trading corporation and a law which protects such activities. When we speak of a law which regulates the trading activities of a trading corporation we mean a law which controls the subject matter by prohibiting the corporation from engaging in certain trading activities or permitting it so to do either absolutely or subject to condition. Such a law is within power because it necessarily operates directly on the subject of the power ‑ it is a law about trading corporations. But when we speak of a law which protects the trading activities of a trading corporation our statement is not so specific. It may be understood as signifying a law which operates directly on the subject of the power. So understood the law is within power and valid. But it may be understood in a different sense so as to denote a law which, though it protects the trading activities of trading corporations, does so by a legal operation outside the subject matter of the power. A law which prohibits the levying of taxes and duties on trading activities generally may be said to protect or promote the trading activities of corporations, but it is neither a law with respect to corporations nor a law with respect to trading corporations. It protects the trading activities of non-corporations as well as protecting the trading activities of corporations and the protection which it gives to non-corporations is not merely incidental to the protection given to corporations. The law does not operate directly upon corporations and it cannot be characterized as a law about them."
According to this view, a law which protects the trading activities of a corporation will be within power provided it has a direct legal operation on the head of power.
31 Clause 44 is a valid exercise of power because it operates directly on the powers that have been vested in a carrier. The clause provides a measure of protection to the carrier when it exercises the powers conferred by Divs 2, 3 and 4. Put another way, the power to license a corporation to provide telecommunications services, and to empower that corporation to carry out those activities in particular ways, includes the power to protect the corporation when it carries out those activities. That last‑mentioned power is clearly an aspect of the subject matter of the power conferred by s 51(v).
DO THE STATE LAWS DISCRIMINATE AGAINST CARRIERS?
32 The next question is whether cl 44 is inconsistent with State law (s 611 of the New South Wales Act and Pt 8 of the Victorian Act) so that the State law becomes inoperative by the force of s 109 of the Constitution. So framed, the question has two parts: (1) is the State law inconsistent with cl 44 (a question which the primary judge found unnecessary to answer), and (2) does cl 44 engage the operation of s 109. Having regard to the position taken by the parties, both parts of the question must be considered.
33 Clause 44 seeks to displace State and Territory laws that discriminate, or would have the direct or indirect effect of discriminating, against a carrier. The distinction between a law that would discriminate and one that would have the effect of discriminating is a distinction between, on the one hand, a law which is on its face discriminatory and, on the other, a law which is discriminatory in the manner in which it operates. The question here is what is meant by "discrimination" in the present context. It is the creation of the exemptions referred to in pars 7, 8 and 14 that is said to give rise to discrimination.
34 The concept of discrimination is well known in the Constitutional context. Section 117 of the Constitution precludes the States from discriminating against residents of other States. There is an implied constitutional limitation that prevents the Commonwealth from passing laws that discriminate against the States: Melbourne Corporation v Commonwealth (1947) 74 CLR 31; Queensland Electricity Commission v Commonwealth (1985) 159 CLR 192; Leeth v Commonwealth (1992) 174 CLR 455. A law which imposes a discriminatory burden upon interstate trade can infringe s 92 of the Constitution: Cole v Whitfield (1988) 165 CLR 360; Castlemaine Tooheys Limited v South Australia (1990) 169 CLR 436.
35 The respondents place heavy reliance on the meaning given to the word "discrimination" in s 117. In Street v Queensland Bar Association (1989) 168 CLR 461 the validity of the Queensland Supreme Court's rules relating to the admission of barristers was called into question. The rules required a person who applied for admission to be a resident of the State and to cease to practise as a barrister in his home State. The High Court found that the rules did infringe s 117. In the course of her judgment Gaudron J dealt with the meaning of the word "discrimination". She said (at 570-571):
"Although in its primary sense 'discrimination' refers to the process of differentiating between persons or things possessing different properties, in legal usage it signifies the process by which different treatment is accorded to persons or things by reference to considerations which are irrelevant to the object to be attained. The primary sense of the word is 'discrimination between'; the legal sense is 'discrimination against'."
36 In Castlemaine Tooheys Limited v South Australia (1990) 169 CLR 436 the High Court was required to consider whether certain South Australian legislation (the Beverage Container Act 1975)was protectionist and discriminatory so that it infringed s 92 of the Constitution. Gaudron and McHugh JJ discussed what is meant by discriminatory for the purpose of determining whether a law infringes s 92. They said (at 478):
"In Street v Queensland Bar Association, Gaudron J made reference to the general considerations which, statute aside, result in particular treatment being identified as discriminatory. By reference to those considerations it is possible to identify the general features of a discriminatory law. A law is discriminatory if it operates by reference to a distinction which some overriding law decrees to be irrelevant or by reference to a distinction which is in fact irrelevant to the object to be attained; a law is discriminatory if, although it operates by reference to a relevant distinction, the different treatment thereby assigned is not appropriate and adapted to the difference or differences which support that distinction. A law is also discriminatory if, although there is a relevant difference, it proceeds as though there is no such difference, or, in other words, if it treats equally things that are unequal ‑ unless, perhaps, there is no practical basis for differentiation."
37 A different approach is evident when the question is whether a particular law discriminates between the States. In Queensland Electricity Commission v Commonwealth Gibbs CJ said (at 207):
"Obviously enough, laws may distinguish between the different needs of the various States. The laws forbidden by this principle are those which discriminate against all the States or any one of them by subjecting them or it to a burden or disability which is not imposed on persons generally, a law whose very object is to restrict, burden or control an activity of the States or of one of them."
After a review of the authorities Mason J (at 217) said that the applicable principle has two elements:
"(1) the prohibition against discrimination which involves the placing on the States of special burdens or disabilities; and (2) the prohibition against laws of general application which operate to destroy or curtail the continued existence of the States or their capacity to function as governments … The second element of the prohibition is necessarily less precise than the first; it protects the States against laws which, complying with the first element because they have a general application, may nevertheless produce the effect which it is the object of the principle to prevent." [Citations omitted]
38 There is a limit on how far one can take the cases that discuss the meaning of the word "discriminate" in a constitutional setting and apply them to the task of deciding the meaning of the word "discriminate" in a particular statute. Although the language in Street and Castlemaine Tooheys seems to be of general application, it should be confined to its constitutional setting. So much was recognised by the High Court in Leeth v Commonwealth (1992) 174 CLR at 468. Here we are dealing with a provision in which the word "discriminate" is to be given its ordinary English meaning, that is, its linguistic meaning having regard to the context in which the word is found. To the extent that the constitutional cases provide assistance in determining the ordinary meaning of the word, they can be considered. In the end, however, as with most cases involving the interpretation of a statute, little assistance is to be derived from other cases that involve different statutes.
39 In its ordinary signification discrimination means differential treatment, or put another way, the failure to treat all persons equally where there is no reasonable distinction to justify different treatment. The discrimination may be positive, such as by conferring a benefit, or negative, for example by imposing a restriction. Yet in each case there will be discrimination.
40 Do the State laws discriminate against a carrier in accordance with this meaning? In our view there is discrimination when a tax is imposed on a carrier in respect of certain of its activities, for example, on the occupation of a public place by underground or aboveground cables through which communications are sent, but is not imposed on other bodies which make a similar use of public places, such as electricity, gas or water utilities which lay pipes or cables over or under public places to transmit their "goods". It is discrimination against the carrier because it accords to it less favourable treatment than to the other occupiers of public space.
41 So far as authority is concerned we refer to only one case, a constitutional case, and to a dissenting judgment in that case. In Department of Revenue of Oregon v ACF Industries Inc 510 U.S. 332 (1994) the Supreme Court of the United States considered the effect of s 306 of the Railroad Revitalization and Regulatory Reform Act 1976. The statute forbade States from "imposing another tax that discriminates against a rail carrier providing transportation". Oregonhad imposed an ad valorem tax upon all real and personal property within its jurisdiction save for certain classes which were exempt. The respondents, eight companies that leased railroad cars to railroads and shippers, sought injunctive relief against the assessment and collection of the ad valorem tax against their railroad cars. The Court of Appeals upheld the respondents' argument, holding that the State tax was discriminatory because of the exemptions. The Court of Appeals said (at 961 F 2d 813 (1992), 822): "[A]ny exemption given to other taxpayers but not to railroads" is forbidden, perhaps apart from a de minimis level of exemption. This decision was reversed on appeal. The majority of the Supreme Court held that as a matter of construction the statutory exemption was not intended to apply to an ad valorem property tax. Stevens J was in dissent on this point of construction. Having found in the respondent's favour on that issue, he considered whether the anti-discrimination provision struck down the State law. He reached the same conclusion as the Court of Appeals that it did. He said (at 349):
"A State might discriminate against a disfavored class of taxpayers in a variety of ways. The absence in the 4‑R Act of a provision specifically addressing exemptions is no more significant than the absence of a provision addressing deductions, credits, methods of collecting or protesting state taxes, or penalties. Surely a state tax law that allowed a substantial tax deduction for all taxpayers except rail carriers would readily be recognized as discriminatory. That conclusion would not be affected by the fact that the antidiscrimination statute does not speak specifically to deductions. Indeed, the Court suggests that an exemption for all taxpayers except rail carriers would make the tax discriminatory."
The reasoning of both the Court of Appeals, and Stevens J in dissent, support the conclusion we have reached on the discriminatory effect of the State laws.
42 If it were necessary to go to the Explanatory Memorandum for assistance in the resolution of the meaning to be given to the word "discriminate" (as to the permissibility of which see s 15AB(2)(e) of the Acts Interpretation Act 1901 (Cth), and as to the common law position, see also TCN Channel Nine v Australian Mutual Provident Society (1982) 42 ALR 496 at 507-508 and Newcastle City Council v GIO General Ltd (1997) 191 CLR 85 at 99, following CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 at 408), that would also confirm our conclusion. The Explanatory Memorandum gave the following explanation of cl 42 of the Bill, which ultimately became cl 44:
"This clause provides that a State or Territory law has no effect to the extent to which it discriminates, or has the effect of discriminating, directly or indirectly against a carrier, or a user or potential user of a carrier's services. It is based on s. 120 of the 1991 Act. The clause is intended to deal with laws which have an indirect effect of discriminating against carriers or users of carrier services, not just a law which, for example, on its face treats a person differently to someone else. The indirect discrimination which this clause is intended to prevent includes the following examples:
· laws that impose a burden on facilities of a carrier that is not imposed on similar facilities (for example a tax on 'street furniture' which is in effect discriminatory against carriers because other bodies owning such equipment such as electricity authorities would be exempt from paying that tax);
· laws which have the effect of giving powers or immunities to a person or body in relation to the installation, maintenance or operation of a facility which do not apply to carriers generally (for example, where a public utility may rely on general land access powers given to that utility under State or Territory law to install telecommunication facilities without obtaining the approvals which would ordinarily be required for that activity under the law of that State or Territory); and
· laws which discriminate against people by reason of their use of the facilities of a carrier."
43 It is a rare day when an explanatory memorandum provides much assistance in the construction of a statute. It is even more unusual for an explanatory memorandum to give as an example of the mischief sought to be avoided, the very subject matter of the litigation. What is still more remarkable is that the explanatory memorandum gives an explanation of the meaning of a term which accords with what an ordinary lay person would accept as correct. Here the explanatory memorandum does each of these things.
44 Earlier we suggested that an application of the constitutional meaning of discrimination to the facts in this case should have produced the conclusion that the State laws were discriminatory. Let us explain what we mean. Assume for a moment that a Victorian instrumentality still operates an interstate freight railroad. Let it also be assumed that the engines and rolling stock travel over rail tracks in New South Wales owned by an instrumentality of that State. Now assume that New South Wales legislation taxes all carriers that use its tracks, but exempts all New South Wales railroad companies carrying passengers. Could Victoria claim that it had been discriminated against? According to the implied constitutional limitation cases, the answer would be yes. The same view would be reached by the officious railroad fanatic. Moreover, if, in the above example, the Victorian railroad operation were not conducted by the body politic, but by a resident of the State, the cases would show that to be discrimination contrary to both s 92 and s 117. The instant facts are analogous.
DOES CLAUSE 44 ENGAGE SECTION 109?
45 The second part of the question is whether cl 44 displaces the State laws. It is not necessary for this purpose to attempt to state an exhaustive test of inconsistency under s 109. It is sufficient for present purposes to make the following points. First, a State law, if valid, that would "alter, impair or detract from" a Commonwealth law is to that extent invalid: Victoria v Commonwealth (1934) 58 CLR 618 at 630 per Dixon J; Ex parte McLean (1930) 43 CLR 472 at 483 per Dixon J. Second, it is permissible for a Commonwealth law to exclude the operation of State law by express words such as may be found in cl 44. In Australian Coastal Shipping Commission v O'Reilly (1961) 107 CLR at 56-57 Dixon CJ explained the principle that was involved. He said:
"The argument that under a legislative power of the Commonwealth the operation of State laws cannot be directly and expressly excluded has been used without effect in a succession of cases beginning with The Commonwealth v Queensland. It may be worth remarking that the interpretation, long since adopted by this Court, of s. 109 is hardly consistent in thought with such an argument. The Court has interpreted s. 109 as operating to exclude State law not only when there is a more direct collision between federal and State law but also when there is found in federal law the manifestation of an intention on the part of the federal Parliament to 'occupy the field'. Surely, consistency with that doctrine demands that a legislative power, such as that given by s. 51 (i) together with s. 98, must extend to a direct enactment which expressly excludes the operation of State law provided the enactment is within the subject matter of the federal power. Indeed there can really be no other way of expressing the intention and accomplishing the federal legislative purpose." [citations omitted]
That is to say, if the Commonwealth Parliament intends to do no more than exclude State legislative power, that will be ineffective. But a Commonwealth law can prevent State law adding to the liabilities, duties, immunities, liberties, powers or rights that have been conferred by the federal law. Thus, in an earlier case, Wenn v Attorney-General (Vic) (1948) 77 CLR 84 at 120 Dixon J said:
"To legislate upon a subject exhaustively to the intent that the areas of liberty designedly left should not be closed up is, I think, an exercise of legislative authority different in kind from a bare attempt to exclude State concurrent power from a subject the Federal legislature has not effectively dealt with by regulation, control or otherwise. It is still more widely different from an attempt to limit the exercise of State legislative power so that the Commonwealth should not be consequentially affected in the ends it is pursuing. This is not a case which, in my opinion, falls within the description of legislation so powerfully attacked by Evatt J. in West v Commissioner of Taxation (NSW).
There is no doubt great difficulty in satisfactorily defining the limits of the power to legislate upon a subject exhaustively so that s. 109 will of its own force make inoperative State legislation which otherwise would add liabilities, duties, immunities, liberties, powers or rights to those which the Federal law had decided to be sufficient. But within such limits an enactment does not seem to me to be open to the objection that it is not legislation with respect to the Federal subject matter but with respect to the exercise of State legislative powers or that it trenches upon State functions. Beyond those limits no doubt there lies a debatable area where Federal laws may be found that seem to be aimed rather at preventing State legislative action than dealing with a subject matter assigned to the Commonwealth Parliament."
See also Botany Municipal Council v Federal Airports Authority (1992) 175 CLR 453 at 465; The Queen v Credit Tribunal; Ex parte General Motors Acceptance Corporation (1977) 137 CLR 545.
46 These cases show that the Commonwealth can evince an intention that its laws will make exclusive provision for the rights and immunities the Parliament has decided should be enjoyed, and thereby bring s 109 into operation. That is precisely what has occurred. Clause 44 is not a bare attempt to oust State law. It is but one aspect of the "liabilities, duties, immunities, liberties, powers [and] rights" which have been either afforded to or imposed upon carriers which, but for s 109, the State laws "would alter, impair or detract from". Because of s 109, the State laws are to that extent invalid.
47 This conclusion differs from that of the primary judge. Rather than summarise his views, it is best to set out a passage from his reasons where he provided his own summary. The areas of difference with our views will be apparent. The primary judge said (par 197):
"(i) Clause 44(1)(a) appears in legislation which is concerned with telecommunications, a matter within the legislative competence of the Commonwealth pursuant to s51(v) of the Constitution;