Speaking notes from Professor Anne Twomey, Sydney Law School, University of Sydney, at ALRC Freedoms Symposium, Federal Court, Queens Square, Sydney, 8 October 2015.

McCloy and the revised test of proportionality

Yesterday, the High Court handed down a major judgment, McCloy v New South Wales, in which it upheld the validity of laws capping, and in some cases banning, political donations in relation to New South Wales elections.  The laws had been challenged on the ground that they breached the implied freedom of political communication.  While the Court accepted that there was a burden on the freedom, it was held to be for a legitimate end and proportional in nature. The cap on donations was unanimously upheld, while the ban on donations by property developers was upheld by six Justices, with Nettle J dissenting.

The case is particularly relevant for the new approach taken by a majority of four Justices of the High Court to proportionality, in which their Honours adopted the German approach to assessing proportionality. 

In a joint judgment, French CJ, Kiefel, Bell and Keane JJ re-wrote the existing proportionality test as set out in the Lange case, breaking down its elements into a number of more precise tests.  To emphasise their importance, the new tests were set down in para [2] of the joint judgment.  The implied freedom of political communication was described as a ‘qualified limitation on legislative power’.  It ‘may be subject to legislative restrictions serving a legitimate purpose compatible with the system of representative government for which the Constitution provides, where the extent of the burden can be justified as suitable, necessary and adequate, having regard to the purpose of those restrictions.’  From this summary, the test was then broken down into its elements.

The first question remained whether the law effectively burdens the freedom in its terms, operation or effect.  The second question was described as one that involves ‘compatibility testing’.  It requires the identification of the purpose of the law and the means adopted to achieve that purpose and asks whether they are compatible with the constitutionally prescribed system of representative government in the sense that ‘they do not adversely impinge’ upon it.  This clarifies previous uncertainty as to what amounts to a ‘legitimate end’ under the former Lange test. 

The third question was described as requiring ‘proportionality testing’.  It is broken up into three parts.  It asks whether the restriction imposed by the law on the freedom is justified as (a) suitable; (b) necessary; and (c) adequate in its balance.  A law is ‘suitable’ if it has a rational connection to its purported purpose.  It is ‘necessary’ if there is ‘no obvious and compelling alternative, reasonably practicable means of achieving the same purpose which has a less restrictive effect on the freedom’.  It is ‘adequate in its balance’ if the court makes the value judgment that the importance of the purpose served by the law outweighs the extent of the restriction that it imposes on the freedom.

The other three Justices, Gageler, Nettle and Gordon JJ, saw no warrant to change the Court’s approach to proportionality at this stage and did not consider that there had been sufficient argument to justify such a change. 

There are some obvious advantages to the majority’s approach.  From a teaching perspective, it is much easier to teach the doctrine to students when there are strict clear tests.  It may also give greater certainty to those who draft and enact laws and create greater stability in the jurisprudence concerning the implied freedom, as there will also be greater comparative jurisprudence to draw upon from Europe and Canada and more mechanical rules to apply.

However, I have some niggling concerns about this approach.  My first concern is that what started out as a relatively simple test has become overly complex in the last two decades.  The more rigid and mechanical the test becomes, with different layers of considerations and different factors applied at different stages, there is a real risk that we cease to see the woods for the trees.  The rules themselves take over, ceasing to be a means to an end and becoming the end itself.  They become disconnected from the constitutional principle that the implied freedom is intended to support. 

The basis for the implied freedom, as first identified in the Australian Capital Television case, is that ss 7 and 24 of the Constitution require that the Houses of Parliament be directly chosen by the people.  To be a genuine choice, it must be a free choice that is capable of being an informed choice.  Hence, political communication is impliedly necessary to allow the people to make a free and informed choice.  If this is the basis of the implied freedom, then all tests must be directed at achieving this end.  The tests must not become an end in themselves, being ticked off a list without any regard to the constitutionally required end of Houses of Parliament directly chosen by the people.

Alarm bells started ringing in my head about this back in 2010 as a consequence of the reasoning of the High Court in Rowe v Electoral Commissioner.  In that case French CJ appeared to have accepted that the High Court’s own jurisprudence about the evolutionary nature of representative democracy had taken over to such an extent that a law could be struck down as invalid for impliedly breaching ss 7 and 24 of the Constitution, even though it still resulted in Houses of Parliament that were directly chosen by the people. 

The same risk arises now in relation to the majority’s new approach to proportionality—that there is a disconnect with the constitutional principle it is intended to support and that laws may be held invalid (or valid) regardless of their effect upon ss 7 and 24 of the Constitution

This reservation was also raised by Gageler J in McCloy, who was concerned that the proportionality test adopted by the majority was not sufficiently connected to the reason for the implied freedom and was devised in a different environment to deal with express human rights (rather than an implied freedom that is not a personal right) in a multi-jurisdictional political environment with levels of deference and a margin of appreciation which did not apply in Australia. 

My second concern, also raised by Gageler J, is that the rigidity of the test might not always be appropriate in the circumstances.  One may end up with results from the application of these tests which are inconsistent with the purpose of the implied freedom.

The final point, which was clearly a sensitive one in the case, is about the level of intervention by the Court and the borderline of the doctrine of the separation of powers.  At what point is the Court really instructing the Parliament upon how it should have legislated and which choices it should make with respect to how a legitimate end is to be achieved?  The joint judgment accepted at [89] that the ‘balance struck between the importance of the purpose and the extent of the restriction on the freedom necessarily involves a value judgment’, but their Honours contended that this ‘does not entitle the courts to substitute their own assessment for that of the legislative decision-maker’.  It is hard to see how this is so.  If the Parliament decides that the importance of the legitimate end far outstrips the significance of the burden on the implied freedom, and the High Court then decides the opposite, surely it is substituting its own assessment for that of the Parliament in striking down the law?

The joint judgment asserted that the courts have ‘a duty to determine the limit of legislative power affecting constitutionally guaranteed freedoms’ and that even when this involves an assessment of public benefit, it does not ‘intrude upon the legislative function’.  Their Honours rejected the notion of deference to the extent that this entails ‘unquestioning adoption of the correctness of’ choices by the legislature.  They also rejected the relevance of a ‘margin of appreciation’ as used in the European context.

While it is certainly the case that it is the responsibility of the High Court to determine the boundaries of the law and what is constitutional, one heads into much more slippery territory when the Court starts making determinations on public policy grounds that involve the assessment of the weight of the public interest in achieving particular ends and how this is to be balanced against the importance of free political communication.  It may well be that there is no way around the High Court having to fulfil such a role, but a little bit of caution and soupçon of deference would not be a bad thing.

Published on 13 October 2015.