Federal and State Constitutional Law

Running head: FEDERAL AND STATE CONSTITUTIONAL LAW
FEDERAL AND STATE CONSTITUTIONAL LAW
Name of the Student
Name of the University
Author Note

2FEDERAL AND STATE CONSTITUTIONAL LAW
Issues
Victorian State University Pty Ltd is a non-profit corporation incorporated to provide
education as a service. Victorian State University is in contravention of provisions of two acts of
the common wealth namely the Scholarships and Postgraduates Act 2016 (Cth) (‘SAGA’) and
the Grants for Australian Students Act 2016 (Cth) (‘GASA’). Under the Scholarships and
Postgraduates Act 2016 (Cth) (‘SAGA’) the commonwealth directed Victorian State University
to award one scholarship for every 100 students enrolled. Under the Grants for Australian
Students Act 2016 (Cth) (‘GASA’) Victorian State University was given grants for each non-
victorian and aboriginal students they would enroll with the condition of displaying a banner on
its official website. Victorian State University distributed the money but removed the banner
subsequently. Thus it has been charged with penalties under both acts and is challenging their
constitutional validity. The issue identified here are:
1. Relating to Scholarships and Postgraduates Act 2016 (Cth) (‘SAGA’)
Can the common wealth make laws that regulate the functioning of corporations if they function
in domains separate from the ones mentioned under Section 51 (xx) of the Australian
constitution (education sector)? Would such a law be constitutional?
2. Relating to Grants for Australian Students Act 2016 (Cth) (‘GASA’)
Can the commonwealth parliament make laws that bypass giving financial grants to the state
government and directly provide financial assistance to entities?

3FEDERAL AND STATE CONSTITUTIONAL LAW
Answer for issue 1
Issue
If the Commonwealth Parliament can make laws for corporations functioning in the
education sector by virtue of the powers conferred under Section 51 (xx) of the Australian
constitution.
Rule
Section 51 of the Australian Constitution defines the powers of the Parliament. This
section defines various heads which would be regulated by laws made by the parliament. The
Commonwealth Parliament and the states enjoy concurrent jurisdiction over most of these heads.
Section 109 however provides that in case of any inconsistency the commonwealth laws will
prevail. Section 51 (xx) however confers powers to the Commonwealth Parliament to regulate
laws under that head to the extent that the heads function within the commonwealth’s
jurisdiction.
The Adamson’s case or R v Federal Court of Australia; Ex parte W.A. National
Football League (1979) 143 CLR 190 laid down a test to determine if a corporation could be
considered as a constitutional corporation. The test analyzed the current activities and functions
of the corporation and set out that any corporation would be considered a trading corporation if it
engaged in revenue raising activities even if the purpose was non-profit (Joseph, Castan and
Castan 2010).
In the Huddart, Parker & Co Pty Ltd v Moorehead (1909) 8 CLR 330 it was held that
the commonwealth could not regulate laws relating to the trading activities of a corporation in
Victoria as these are governed by state laws. The rationale behind this was that this would allow

4FEDERAL AND STATE CONSTITUTIONAL LAW
the commonwealth to enact laws governing all forms of corporate activities which would extend
to jurisdiction conferred under Section 51 (xx) of the constitution. Strickland v Rocla Concrete
Pipes Ltd (1971) 124 CLR 468 also known as the concrete pipes approach overruled the
judgment in Huddart, Parker & Co Pty Ltd v Moorehead and laid down that if the laws enacted
govern the trading activities of a trading company then it would fall within the ambit of the
powers conferred under Section 51 (xx) of the Australian constitution. Thus, this rejected the
idea that the commonwealth could not govern laws of corporations relating to activities
undertaken by them if those fall under the state’s jurisdiction. This case however did not
comment on if non-trading activities undertaken by the corporation could also be regulated by
laws enacted by the Commonwealth Parliament. This was clarified in the case Commonwealth
v Tasmania [1983] HCA 21. In this case Commonwealth Parliament wanted to prevent a
corporation from building a dam on the Franklin river by virtue of the powers conferred under
Section 51 (xx) of the Australian constitution by restraining the corporation from doing so. The
Commonwealth Parliament’s act was held to be constitutional and the case held that the
legislative power of the Commonwealth Parliament includes all trading and financial activities as
well as all activities undertaken for trading and finance (Joseph, Castan and Castan 2010). This
would thus now include the education sector and its related activities as well.
Additionally it was held by Actors and Announcers Equity v Fontana Films (1982) 150
CLR 169 that the provisions of Section 51 (xx) apply not only to trading companies but also
activities of other entities as long as these activities are related to trading activities of a
corporation covered by this section.