High Court Releases Reasoning in Spence v Queensland [2019] HCA 15

Friday 17 May 2019 @ 4.00 p.m. | Legal Research

In Gary Douglas Spence v State of Queensland [2019] HCA 15 (‘the Case’), the High Court of Australia considered the validity and operation of Commonwealth and Queensland laws that regulate the gifts made to political parties. On 17 April, the High Court held that the Queensland laws were valid and that a provision of the Commonwealth law was invalid. The Court published the reasons for this judgment on 15 May 2019.

Queensland Legislation

On 21 May 2018, the Local Government Electoral (Implementing Stage 1 of Belcarra) and Other Legislation Amendment Act 2018 (QLD)(‘the QLD Amending Act’) received royal assent and made amendments to the Electoral Act 1992 (QLD) and the Local Government Electoral Act 2011 (QLD). The amendments prohibit property developers from making gifts to political parties. Additionally, property developers are prohibited from making or receiving gifts to or for councillors of a local government or candidates or in a local government election.

These amendments were a response to the Queensland Crime and Corruption Commission’s report, Operation Belcarra: A blueprint for integrity addressing corruption risk in local government. The report found that there was a risk of corruption where donations were made with expectations that recipients would then deliver decisions to benefit the donor. This risk was further heightened due to the business interests that the donors held that would be affected by government decisions.

Commonwealth Legislation

On 30 November 2019, the Electoral Legislation Amendment (Electoral Funding and Disclosure Reform) Act 2018 (CTH) received royal assent and inserted Division 3A into Part XX into the Commonwealth Electoral Ac 1918 (CTH). Division 3A restricted gifts from foreign donors to political entities. Section 302CA was inserted as part of these amendments and deals with the electoral laws in the different jurisdictions.

High Court Decision

The problematic operation of section 302CA is explained at [4]:

“The section is framed to permit a person to make a gift to a political party registered under the Commonwealth Electoral Act, and to permit that political party to receive and retain that gift, despite any State or Territory electoral law, if the gift, or a part of the gift, is required to be used or might be used to incur expenditure for the dominant purpose of influencing voting in an election to the House of Representatives or to the Senate.”

As Kiefel CJ, Bell, Gageler and Keane JJ at [36] illustrates, the problem arises in a hypothetical scenario of a property developer who makes a gift to a Queensland political party which endorses and promotes candidates for both the Queensland Legislative Assembly and is also registered under the Commonwealth Electoral Act. If found valid, section 302CA would render the amendments in the QLD Amending Act inoperative following section 109 of the Commonwealth of Australia Constitution Act (CTH) (‘the Constitution’) which states that Commonwealth law shall prevail where it is inconsistent with State law.

However, sections 10 and 31 of the Constitution states that laws in force in each State are to apply, as much as possible, to elections in the State of members of the House of Representatives and senators of the Senate in the Federal Parliament. The majority of the Court held that section 302CA was invalid because it had gone beyond the limits of the Commonwealth’s legislative power conferred under section 51(xxxvi) of the Constitution in its application of sections 10 and 31 of the Constitution.

At [56], Kiefel CJ, Bell, Gageler and Keane JJ elaborated:

“The difficulty lies is with the breadth of the operation of s 302CA(1) insofar as it extends to protect from the operation of a State electoral law the giving, receipt and retention of a gift in circumstances where, the "gift (or part of it) may (or may not) be used for Commonwealth electoral  expenditure" and where, at the time it is given and received, use of the gift to create or communicate matter for a purpose of influencing voting at a federal election is nothing more than a bare possibility.”

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Gary Douglas Spence v State of Queensland [2019] HCA 15 (15 May 2019) and summaries and short particulars.

Local Government Electoral (Implementing Stage 1 of Belcarra) and Other Legislation Amendment Act 2018, related Bill, second reading speech and explanatory statement as published on TimeBase LawOne.

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