Introduction to Business Law Spring Session , 2013

1. Lecture 2: The Australian Legal System (Part 1) Introduction to Business LawSpring Session, 2013

2. Week 2 - Outline 1. Australian legal history 2. The Australian Constitution 3. Indigenous rights under Australian law 4. Key features of the Australian legal system

3. 1. Australian legal history

4. Overview • The continent now known as ‘Australia’ has a very long history of occupation. • Aboriginal people have lived on the continent for at least 40,000 years. European settlement of the continent has been relatively recent. • In order to properly understand the law of modern Australia, we need to look at the history of the continent and in particular, the different legal systems that have been in existence. These are: • Indigenous law; • English law; and • Australian law. • Each of these legal systems has influenced modern Australian law.

6. Aboriginal culture • When English settlers arrived at Sydney Cove in 1788, there were approximately 500 Aboriginal tribes living in different parts of the continent. The combined population of the tribes is thought to have been approximately 315,000. • The tribes spoke different languages and observed different cultural practices. All were nomadic and lived off the land by hunting and gathering.

7. Customary law • The members of each Aboriginal tribe observed detailed rules of conduct. The collection of rules observed by the tribes is today referred to as customary law (or tribal law). • Customary law was very different from modern Australian law. For example: the law was entirely oral (spoken, not written); the law did not make any provision for individual land ownership.

8. Customary law … /2 • Customary law has been recognised as a genuine legal system. • In 1971, the Federal Court of Australia examined the traditional way of life of the Yolngu people of Arnhem Land. Justice Blackburn had this to say about the regulation of tribal affairs among the Yolngu: ‘The evidence shows a subtle and elaborate system highly adapted to the country in which the people led their lives, which provided a stable order of society and was remarkably free from the vagaries of personal whim or influence. If ever a system could be called “a government of laws, and not of men”, it is that shown in the evidence before me.’ — Milirrpum v Nabalco (1971) 17 FLR 141

9. English Settlement of Australia • English colonisation of the continent of Australia occurred on 26 January 1788 with the arrival of the First Fleet at Port Jackson (modern-day Sydney). • The captain of the First Fleet, Arthur Phillip, became the first Governor of the new colony. Image: Early sketch of Sydney Cove

10. English Settlement andterra nullius • In the 1700s, new territory discovered by England was classified as either: • territory acquired by treaty or military victory, in which cases the existing legal institutions were retained; or • territory that was terra nullius, i.e. the inhabitants were not recognised and the English legal system applied. • For Australia, terra nullius was applied. • Customary law (the legal system of the local Aboriginals) was not recognised by the British Crown nor by the settlers themselves.

11. Early colonial law • In its early years, the colony of New South Wales was a penal colony (prison settlement). Most of the settlers who arrived with the First Fleet were convicts who had been transported to the colony as punishment for their crimes. • Key developments in the development of the colony: • 1823: establishment of the Supreme Court of New South Wales • 1824: establishment of the first legislative body (parliament) in New South Wales • 1833: introduction of jury trials • 1840: transportation of convicts to New South Wales ends.

12. Colonial law … /2 • Despite having its own parliament and courts, the colony of New South Wales remained dominated by English law. • Most of the laws that were in force in the colony were English laws. • The courts were obliged to follow the decisions of English courts. • The new Parliament of New South Wales was forbidden from enacting any new law that was inconsistent with English law.

13. Legal independence from Britain • The process of legal independence can be said to have begun in the year 1850. At this time, the territory of New South Wales included modern-day Victoria, Queensland and the Northern Territory. • The only other colonies in existence were Van Diemen’s Land (later Tasmania), Western Australia and South Australia. (Victoria became a separate colony in 1851 and Queensland in 1859). The Northern Territory was made part of South Australia in 1863 and did not achieve territory status until 1911.)

14. Legal independence … /2 • 1865: The British Parliament removed the requirement that colonial laws had to be consistent with British laws. This gave the colonial parliaments greater freedom to make their own laws. • There were now six colonies (New South Wales, Victoria, Queensland, South Australia, Tasmania and Western Australia) and each colony had its own system of government.

15. Federation • Difficulties were starting to emerge with the colonial system. Some of the problems included: • Difficulty travelling from one colony to another. • Trade between the colonies was restricted as some of the colonies charged taxes on goods from other colonies (tariffs). • Defence of the colonies from other European powers (such as France and Germany) could not be assured, as Britain was a long way away! • To overcome these problems federation (joining) of the colonies into a single nation, under a national government was proposed in 1867.

16. Federation … /2 • In order to form a federation, the colonies needed to agree to a federalconstitution. • The first draft constitution was presented to the colonial governments in 1891. • 1899: Draft Constitution put to referendum and approved. • 1900: Draft Constitution put to the British. • 1900: British Parliament passes the Australian Constitution Act. • 1901: Commonwealth of Australia came into existence on 1 January. The colonies now became States of the new nation, Australia!

17. Lingering ties to Britain • Despite formation of the Australian nation, with it’s own Constitution and national government, Australia was still not completely independent from Britain until 1986. • Up until 1939, the United Kingdom Parliament could still (technically) pass legislation that would apply by ‘paramount force’ to the Commonwealth of Australia - although they hardly ever did this. This situation continued for the States right up until 1986. • Decisions of the High Court of Australia could also be appealed to the British Privy Council until 1986.

18. Australia Acts • In 1986, the Australia Acts were passed at Australia’s request, which removed all the remaining ‘colonial ties’ to Britain. • For Constitutional reasons, there are two matching Australia Acts, one passed by the UK parliament and the other by the Australian (Cth) parliament. • Since 3 March 1986, when the Australia Acts came into force, Australia has been fully independent, in a legal sense, from Britain. There is no longer any appeal to British courts, and the UK has no legislative power over Australia.

19. (Optional) Video viewing – vUWSModule 1 Topic 3- Levels of Government

20. 2. The Australian Constitution

21. Commonwealth Constitution • As we saw earlier, to create a federation the colonies (now States) gave up powers, rights and duties to the new central government (called the Australian Government or the Commonwealth Government). • The powers, rights and duties of the new Commonwealth Government were set out in the Commonwealth Constitution. • The areas in which the Commonwealth parliament could pass legislation were set out in a list in the Commonwealth Constitution (section 51 is the main list; see also, eg, sections 52, 90). The items on the list are sometimes called Commonwealth ‘heads of power’.

22. Commonwealth legislative powers • There are 39 ‘heads of power’ in section 51 of the Commonwealth Constitution. You can look at the full list at by googling ‘Commonwealth Constitution s 51’, or at: http://www.austlii.edu.au/au/legis/cth/consol_act/coaca430/s51.html • Some heads of power that are important for businesses include: • Trade and commerce (apart from intra-State) • Corporations • Intellectual Property • Banking (apart from State banking) • Bankruptcy • Insurance • Tax

23. Restrictions on Cth powers? • Unlike in the United States, and every other Western nation, Australia does not have a Bill of Rights at the Commonwealth level. • There are Bills of Rights in Victoria and the ACT, and a movement to introduce one in NSW. • There are only a few restrictions on Commonwealth legislative power in the Constitution itself – perhaps the best known being the guarantee of Freedom of Religion.

24. Changing the Constitution • The Constitution can be amended, but the process is quite complicated by comparison with other nations. • Attempts to amend it have not usually succeeded (only 8 out of 40). You might recall the most recent failed attempt in 1999 on whether Australia should become a Republic. • The Constitution overall, and the list of Commonwealth powers has therefore had very little change since 1901.

25. Concurrent, exclusive and residual powers • Both the States and Commonwealth parliaments have the power to pass legislation in many of the areas just mentioned (called ‘concurrent powers’). • There are also some of these are ‘exclusive powers’ meaning only the Commonwealth Parliament can pass legislation on them, such as set out in sections 52 (eg, public service), 90 (customs and excise). • All areas that are not mentioned in the list of Commonwealth heads of power remain with the States (called ‘residual powers’).

26. Inconsistent Cth and State Acts • Because there are many areas where Cth and State Parliaments can both pass legislation (concurrent powers), inconsistencies can develop. • If your business is subject to both Cth and State Acts, but the Acts seem to require different things, what do you do? • The Commonwealth Constitution s 109 states that the Cth Act prevails to the extent of the inconsistency. In a broad sense this is the one that should be followed. • Very importantly though – if this happens to you, you should not simply decide for yourself that the Cth Act applies and ignore the State requirements. Get in touch with the relevant body and talk to them about the problem between the two Acts and how it is affecting your business. If you can’t resolve it this way, you should look for legal advice. There is a lot more to the law of inconsistency than we look at in this Unit, and it gets quite complex. Many businesses have made costly mistakes or got into trouble by relying on their own view of which Act applies to them.

27. 3. Indigenous rights under Australian law

28. Voting rights • Since the founding of New South Wales in 1788 there has been much debate about the rights and status of Aboriginal people. • Prior to 1967, there were several discriminatory State laws in place, and Cth powers were quite limited in this area. For example, many Aboriginal people were not entitled to vote in WA until 1962 or in Queensland until 1965, although they could vote in other States. • The Cth Constitution allows all who can vote in State elections the right to vote in Cth elections. Until 1949 this was interpreted in a narrow way such that Aboriginal people were consistently excluded from voting. • A Cth Act in 1949 made it clear that everyone who can vote in State elections can also vote in Cth elections, but not many Aboriginal people were made aware of this.

29. Constitutional reform • In 1967, the Constitution was amended to allow the Commonwealth Government: • to make ‘special laws’ for the ‘people of any race’ – the amendment simply took out words that excluded Aboriginal people from this power; and • to include Aboriginal people in the census. • This was one of the few successful attempts to change the Australian Constitution, and was by far the highest ‘yes’ vote ever in a Constitutional referendum – just over 90%. • Although it is often said that the 1967 referendum gave Aboriginal people the right to vote, this is incorrect – as we’ve just seen Aboriginal people already had that right. • Note too that the amended Cth power doesn’t just apply to Aboriginal people, although the amendment is usually discussed in this context.

30. Constitutional reform …/2 • What the change did was give the Commonwealth, rather than the States, the power to pass special laws that apply only to ‘people of any race’ – which includes Aboriginal and other indigenous people. • Any State Acts that are inconsistent with Cth Acts in this area would then become inoperative because of the inconsistency provisions we’ve just discussed. • Although the public perception was that the 1967 referendum was a vote for equal Aboriginal rights, it only gave the Cth the power to make laws specifically for Aboriginal (or any other) people – importantly though there was no actual guarantee that the Cth would use the power to improve Aboriginal rights, or those of any other groups.

31. Aboriginal rights • The two kinds of rights that Aboriginal people have claimed are: • Rights under customary law; and • Land rights. • Rights under customary law • Despite recognition as a genuine legal system, customary law has never been recognised as a distinct legal system in Australia. • The courts have asserted that the only enforceable system of law within Australia is the British-derived system.

32. Land rights Aboriginal groups have been much more successful claiming rights over their ancestral lands. These rights have been recognised by both the parliaments and the courts. • Rights conferred by the parliaments The Australian Parliament, and the parliaments of most of the states, have enacted land rights legislation giving Aboriginal groups rights over their ancestral lands. These laws provide Aboriginal groups with a measure of control over the lands including the right to be consulted before other persons use the land (for example, to mine minerals).

33. Land rights …/2 • Rights declared by the courts • The courts have recognised the existence of an additional legal right called native title. • Native title is the right to use ancestral lands according to the customs of the indigenous group holding the title. In most cases this will consist of the right to live and hunt on the land. • Native title also encompasses the right to prevent any dealing with the land inconsistent with these customary uses (for example, establishing an open-cut mine on the land).

34. Mabo Case study Mabo v Queensland (No 2) (1992) 175 CLR 1 These court proceedings were commenced by a group of islanders, led by Eddie Mabo, in response to attempts by the Queensland Government to subject the Murray islands (off the QLD north coast) to a land grants system. Mabo and his fellow claimants sought a declaration (ruling) from the courts that they enjoyed possessory rights over the islands arising from their membership of the Meriam tribe, which had hunted and fished on the islands continuously for centuries.

35. Mabo Case study … /2 Legal issue • The issue that the court had to decide was: did Mabo and his fellow claimants have any type of possessory interest over the islands? • If so then the Queensland Government would not be able to dispose of the islands without paying compensation to the claimants and others who held rights over the islands. • Image: Murray islands, as seen from space/satellite

36. Mabo Case study … /3 Decision of the court • The High Court agreed that Mabo and his fellow claimants had rights over the islands that should be recognised by the common law. • In so deciding, the court declared a new type of property interest known as native title. In so deciding, the court rejected the doctrine of terra nullius (the view that the Australian continent was ‘owned by no-one’ at the time of European settlement). Importance to businesses • Although the decision itself related to a small group of islands, the consequences of the decision went much further due to the doctrine of precedent. The success of the Mabo claim made it easier for other native groups to make similar claims over other parts of the Australian landmass, as they could rely on the Mabo decision as legal authority.

37. Native Title Act 1993 (Cth) • Following the Mabo case, the federal parliament passed the Native Title Act 1993 (Cth) and set up a National Native Title Tribunal to determine land claims. • States and territories passed native title legislation. • Native title is not a freehold property interest. The holder is not entitled to sell the land. However, the title may itself be sold or leased (for example, to a mining company).

38. 4. Key features of the Australian legal system 38

39. Representative government • Representative government derives from the liberal democratic tradition which maintains that the people should be free to elect their own government. • Representative government is a system of government in which laws are made by elected representatives who are directly chosen by the people. The members of parliament represent their electors in parliament. The Australian Constitution requires this system of government.

40. Responsible government • Responsible government is the principle that the executive government (the public service) is ultimately responsible to the electors. • In Australia, such responsibility is ensured by making the executive answerable to parliament. This is achieved by making the head of each government department a member of the legislature. • The principle of responsible government is sometimes known as the Westminster system of government.

41. Common law Australia’s legal system is a common law legal system based on the British model. As we discussed in Week 1, in common law legal systems the two main sources of law are legislation and case law (more on these in Week 3). The two key principles of all Common law systems are Parliamentary Sovereignty and the Rule of Law.

42. Parliamentary sovereignty • This principle originated in Britain where the Queen or King (monarch) was ‘sovereign’, meaning they decided all laws. • Following a long period of struggle between the Crown and Parliament through the 15th & 16th centuries, from 1688, the British Parliament claimed that ‘sovereignty’ and took over the role of setting all laws. Image: the British Crown

43. Parliamentary sovereignty … /2 • Parliamentary sovereignty means that laws of the parliament are supreme, in the sense that they must be obeyed. • The principle also means that Parliament can make any law (Act), because the parliament is elected by the people. • There is one major restriction on this principle: the Act must itself be lawful. Any Act of Parliament will stand, even if it seems like an unfair Act, unless there is a legal reason to challenge it’s validity.

44. Parliamentary sovereignty in Australia • In Australia, Parliaments are partially sovereign – the Cth Parliament is subject to the Commonwealth Constitution. • In order to be valid all Commonwealth Acts must be supported by (or made under) a head of power in the Constitution, and must not contravene any of its (admittedly few) restrictions. • Commonwealth Acts may be challenged in the High Court and if found invalid for either reason (not supported or contravening a restriction) will be struck down either wholly or in part. • This process is essentially what was portrayed in the film The Castle.

45. The ‘Rule of Law’ • This is the other central principle of common law systems. It means that power must be exercised in accordance with valid laws and not otherwise. The principle applies to both individuals and organisations (including governments). • There are four specific aspects to the rule of law: • persons are to be governed by valid laws and not by the arbitrary exercise of power; • every person and organisation, including the government, is subject to the same laws; • a person may only be punished for breach of the law and not otherwise; and • the ‘principle of legality’: the government must have legal authority for every action that it takes.

46. Constitutional democracy • Australia is a constitutional monarchy. This means that the Head of State is a monarch, specifically, the Queen. This is provided for by the Australian Constitution which also requires a democraticsystem of government. • The monarch is represented in Australia by: • the Governor-General in the Federal government, and • the State Governors in the various State governments.

47. http://www.peo.gov.au/students/library/pages/0071.html

48. Federal system of government • As discussed above, Australia was formed from the union of six separate British colonies. This was the process of federation. The resulting government structure, consisting of six state governments joined to one national government, is called a federal system of government. • One characteristic of federal systems is that power is shared between the state governments and the national government.

49. The ‘Federal Balance’ of powers • In federal systems the division of power between the central and other levels of government is sometimes called into question. • The original reason for the list of specific Commonwealth powers, described earlier, was to confine it’s powers to those topics and make sure the States kept the ‘upper hand’. At first the powers were read narrowly. • However, later cases established that the Cth heads of power should be read broadly instead, and nowadays it would be fair to say that they are read very broadly. As a result the Commonwealth can validly pass legislation on almost any issue. The Cth now has the ‘upper hand’. • Recent High Court cases have acknowledged that a balance of powers between the governments does not necessarily mean that they should have equal powers.

50. The division of government into separate branches (or ‘arms’) is known as the separation of powers. It’s role is to prevent accumulations of power and/or abuses of power developing. In Australia, government is divided into three branches according to the function of each branch: the legislature enacts laws, the executive administers the laws and the judiciary interprets and applies the laws. Separation of powers