Border closures, COVID-19 and s 92 of the Constitution – what role for proportionality (if any)?
This is one of a special series of posts exploring the public law implications of the COVID-19 pandemic. For more information on the Gilbert + Tobin Centre’s work in the area of public law and public health, see here.
Shipra Chordia
05.06.2020
On 25 May 2020, Clive Palmer filed a challenge in the High Court of Australia to Western Australia’s border closure. The closure was brought into effect by the Quarantine (Closing the Border) Directions (the “Directions”) dated 5 April 2020, purported to be made under ss 61, 67, 70 and 72A of the Emergency Management Act 2005 (WA). Among other things, the Directions provide that a person must not enter Western Australia unless the person is an “exempt traveller” who has met certain criteria.
Mr Palmer was refused entry into Western Australia for falling outside the definition of “exempt traveller” in paragraph 27 of the Direction. Mr Palmer is challenging the validity of the Direction on two grounds: (i) that it impermissibly burdens the freedom of interstate trade and commerce; and (ii) that it impermissibly burdens the freedom of interstate intercourse (or movement of people). Each of these freedoms, or “guarantees”, is located in s 92 of the Australian Constitution, which relevantly provides: “trade, commerce, and intercourse among the States, whether by means of internal carriage or ocean navigation, shall be absolutely free”. It is the first of these grounds that is the subject of this post.
Interpreting section 92
Since coming into force in 1901, s 92 of the Constitution has been perplexing. It had been the subject of over 140 High Court cases; far more than any other single provision in the Constitution. This situation has arisen chiefly because the words “absolutely free” in s 92 are ambiguous. Did the framers of the Constitution really mean those words literally, such that a government could never impose internal restrictions for the purposes of limiting the spread of agricultural diseases, for example? And what, precisely, was trade, commerce, and intercourse intended to be free from? The uncertainty led to numerous theories being posited, each of which waxed and waned in popularity within High Court jurisprudence over time. Extra-curially, Gageler J has described the provision’s interpretation and re-interpretation as
a stress-trigger for judges, a source of income for legal practitioners, and a form of torture of law students.
A breakthrough came in 1988, with the landmark case of Cole v Whitfield. The case, in typically esoteric fashion, concerned the regulation of the size of crayfish that could be permissibly bought, sold or possessed in Tasmania, whether or not they originated from another state. After sifting through almost of a century of conflicting jurisprudence, the Mason Court unanimously decided that s 92 was directed at protecting against laws that imposed “a discriminatory burden of a protectionist kind”. That is, s 92 would not operate to invalidate all laws that restricted trade and commerce between the states in any way – as the High Court observed, an interpretation to that effect could lead to anarchy. Rather, the provision would only invalidate laws that were “discriminatory” and “protectionist” in the sense that they sought to protect local providers of business activity in a state against competition from those located in other states. That test – which has endured in the decades since – has brought a stability to the interpretation of s 92 that was previously absent. But how is it to be applied?
In Cole v Whitfield, the High Court recognised that a law could be protectionist in the purpose that it was pursuing or in the practical effect that it had. On its proper construction a law may be facially discriminatory such that it is obvious from the terms of the law alone, construed contextually, that it is pursuing a protectionist purpose. Commonly, the terms of such laws will treat entities engaged in trade and commerce located in one place differently from those located in another. On the other hand, there may be laws that – at least on their face – apply to everyone neutrally. It is only when one looks to how these laws operate in practice that it can be seen that, in actual fact, they impose a greater burden on some than others (an effect that is commonly referred to in other contexts as “substantive inequality”). It is these types of laws the High Court has suggested may have a discriminatory effect that could indicate that the law is protectionist. But deciding that second part – whether the law is protectionist when its practical effect is discriminatory – the High Court in Cole v Whitfield said involves “issues of fact and degree”. That is, pointing to a discriminatory practical effect is not enough in itself. One must consider whether, in all the circumstances (including its practical effect), the law is protectionist.
In this latter context, it has been suggested that s 92 involves a notion of “proportionality”. What this really means, however, and how precisely it connects to the test set down in Cole v Whitfield, has never been satisfactorily explained. Some have suggested that “proportionality” here means nothing more than assessing whether the law is reasonably necessary (see e.g. Betfair Pty Ltd v Western Australiaat [102]-[103]). Others have suggested it involves a balancing of the law and its impact on interstate trade and commerce against the purported (non-protectionist) purpose of the law (see e.g. Jeremy Kirk, ‘Constitutional Guarantees, Characterisation and the Concept of Proportionality’, and McCloy v New South Walesat [87]). The first of these suggestions shows a marked likeness to the “necessity” stage of structured proportionality, which since McCloy v New South Wales (2015) has become accepted as an appropriate analytical tool to assess challenges to laws based on the implied freedom of political communication. At the necessity stage, the Court asks if there is an obvious and compelling, equally practicable alternative means by which the law’s purpose can be achieved with a less restrictive effect on a protected freedom or guarantee. The second suggestion is not dissimilar to the “adequate in the balance” stage of structured proportionality. This stage involves considering – as a value judgment – whether a balance has been achieved between the importance of the purpose being pursued by the impugned law, and the extent that it restricts the protected freedom or guarantee. The obvious temptation is to contend that – just as it has become accepted in the context of the implied freedom of political communication – structured proportionality ought to be adopted as a methodological tool in the context of s 92 challenges too.
That temptation, for the reasons that follow, should be resisted.
Proportionality analysis in constitutional context
There are some critical differences between the implied freedom of political communication and the guarantee of freedom of interstate trade and commerce which would tend to suggest that while structured proportionality may be of assistance in the context of the former, the same does not follow in respect of the latter. The High Court has repeatedly said that the implied freedom of political communication is not absolute. That is, a law may burden the implied freedom if that burden – in nature and degree – is justified. The High Court has also told us that the implied freedom cannot be defined in the abstract. It is derived from a higher order principle – the system of representative and responsible government as embodied in specific provisions of the Constitution (principally, ss 7, 24 and 128) – which is itself abstract. Consequently, the implied freedom can only be instantiated within the concrete confines of a particular case upon engaging with facts of that case and the higher order values that underpin the freedom. Both of these features mean that challenges brought in reliance upon the implied freedom require case-by-case balancing. That is, the nature and degree of the intrusion upon the implied freedom by an impugned law, having regard to the freedom’s value within the system of government established by the Constitution, must be balanced against the value of the purpose being pursued by the law, in light of the way that it is seeking to achieve that purpose, in order to determine whether the law is impermissibly burdening the freedom. That is a kind of “balancing problem” to which the analytical tests that make up structured proportionality are well suited. Those tests were developed to a large extent in the context of bills of rights that provided for non-absolute rights to be balanced against other societal interests.
The jurisprudence on s 92, on the other hand, has led us down a different path. While s 92 does not operate absolutely in the broadest sense that the terms of that provision might permit, it does operate absolutely within the narrower confines of the interpretation that Cole v Whitfield has given it. That is, when a law imposes a “discriminatory burden of a protectionist kind” it is invalid because it has trespassed on the guarantee in s 92. Moreover, higher order principles accepted by the Court in Cole v Whitfield as motivating the inclusion of s 92 in the Constitution, such as the concept of free trade within the Commonwealth, have been baked into the definition of the guarantee. Those principles no longer have an abstract quality to them. The definitional approach to s 92 means that, upon application of the test, the available options are binary: either the law is protectionist and invalid or it is not protectionist and so survives challenge. There are no exceptions, and there is no need for case-by-case balancing of competing interests.
In the absence of case-by-case balancing, structured proportionality has limited analytical utility. Indeed, the application of structured proportionality in such a context would have the very real potential of weakening the stability introduced by the Cole v Whitfield test. If it was applied to challenges based on s 92, the consequence might be that even where a law is found to be “protectionist” it might nevertheless be held valid because, when the value ascribed to its purported non-protectionist purpose is balanced against the nature and degree to which it burdens interstate trade and commerce, the law appears – to whoever is deciding at least – justified. Such an approach would indicate a significant departure from the words of the Constitution which, as noted above, require interstate trade and commerce to be “absolutely free”. Even if those words are only given effect within a narrow confine, arguably they must still be given some effect. It would also introduce values-based decision-making into an area of constitutional jurisprudence that can avoid it.
The “necessity” test and section 92
Why then, you may ask, has it been suggested that proportionality might be of assistance here? And what about the reference in Cole v Whitfield to “issues of fact and degree”? The source of the confusion may be located in the “necessity” test. That test involves asking whether there are alternative laws which might achieve the same purpose as that to which the impugned law is directed with less impact on the protected freedom or interest. It is a test capable of being directed towards two quite distinct analytical ends. On one hand, it can be used, as it is in structured proportionality, as a test of justification. When used in this way, if the answer is “yes, there are available alternatives to the impugned law”, then the law is not justified as it has not realised an optimal balance between achieving its purpose and protecting the competing constitutional freedom or guarantee. If one of the available alternatives had been chosen and implemented by lawmakers instead, the purpose to which the impugned law had been directed would have been achieved and the protection of the competing interest or freedom would have been preserved to a greater extent. In this context, if the impugned law is not justified, it is constitutionally invalid.
The other, quite distinct, way in which the “necessity” test can be used is to “smoke out” an unconstitutional purpose. When used in this manner, the test is not one of justification but rather an aid to the characterisation process. It is particularly helpful in circumstances where a law’s purpose is relevant to that characterisation. Where there are alternative laws that could achieve the same purported purpose as the impugned law with less impact on a competing interest, the possibility arises that the law is not actually directed to the purported (constitutionally legitimate) purpose but rather a different (possibly unconstitutional) purpose. The law’s “overreach”, or failure to be narrowly tailored to its purported purpose, opens it to such an assertion. It is important to note, however, that while the “necessity” test applied in this way has the potential to assist in “smoking out” an unconstitutional purpose, its application is not enough on its own to render the law invalid. There may, for example, be surrounding circumstances which, when considered, suggest that while the law may not be sufficiently narrowly tailored, it is equally not directed to an unconstitutional purpose.
It is this second use of the “necessity” test – as an aid to characterisation rather than a test of justification – which is relevant to determining whether a law imposes a “discriminatory burden of a protectionist kind” for the purposes of s 92. In circumstances where the law is not facially discriminatory, but rather appears to have protectionist effects in practice, the question arises whether the law is protectionist in its purpose. The necessity test applied in such circumstances can assist in assessing the likelihood of whether any non-protectionist purpose asserted to support the law is indeed its real purpose. Where there are other laws that could achieve that same non-protectionist purpose with less protectionist effects, there is the possibility (perhaps even a strong probability) that the law is properly characterised as “protectionist”. That position may, however, be rebutted by evidence indicating otherwise.
While there is considerable overlap in their analytical form, maintaining the distinction between these two uses of the “necessity” test is important. The distinction marks a separation between tests of justification, which often require value-laden decision-making, and tests that aid characterisation, which are directed at the more technical exercise of determining whether a law falls within the scope of a definitional boundary or outside it. In the context of s 92, that definitional boundary was determined by the test set down in Cole v Whitfield, and any law that properly falls within the description of one that imposes a “discriminatory burden of a protectionist kind” falls foul of s 92. The provision has absolute operation within that boundary to invalidate any law that answers the relevant description. Introducing into this area value-laden justification tests directed at balancing competing interests, including via structured proportionality, is thus both ill-fitting and undesirable.
Clive Palmer’s High Court challenge
How does this relate to Mr Palmer’s challenge in the High Court? It appears that Mr Palmer will maintain that the Direction has a protectionist effect in respect of trade and commerce because “businesses that have their head offices or are managed from outside Western Australia will be commercially disadvantaged to those that have their senior management inside Western Australia”. If Mr Palmer is successful in establishing this practical effect, and further establishing it as being protectionist, then the next stage will be to suggest that the Direction is not reasonably necessary as there are other obvious and reasonably practicable alternative forms of regulation that could achieve a slowing of the spread of COVID-19 but with less protectionist effects. To that end, it may be open to Mr Palmer to maintain that a much lighter form of regulation – such as mandatory quarantine on arrival or limiting closures to vulnerable parts of the state only – would have less protectionist effects but achieve the same public health outcomes. If accepted, that may suggest that the Direction is, in reality, protectionist in its underlying purpose. Of course, it would be open to Western Australia to counter that contention on the basis that, notwithstanding its protectionist effects, having regard to the terms of the Direction contextually construed and to the wider circumstances in which the Direction was put into place, it was always directed to a public health rather than a protectionist purpose.
If the matter is heard, central to the Court’s decision will be characterising the Direction based on its true purpose and then determining whether that purpose is protectionist. Due to the nature of the test set down in Cole v Whitfield, assessing whether an optimal balance has been struck between the value to be ascribed to the Direction’s purpose and the nature and degree of intrusion upon the competing constitutional freedom embodied in s 92 is not relevant to the Court’s task. Accordingly, while a form of the “necessity” test may be of assistance to the Court, structured proportionality does not have a role to play in this context.
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Shipra Chordia is a barrister at the NSW Bar and a Fellow of the Gilbert + Tobin Centre of Public Law at UNSW
Suggested citation: Shipra Chordia ‘Border closures, COVID-19 and s 92 of the Constitution – what role for proportionality (if any)?’ on AUSPUBLAW (05 June 2020)