Dictators, Discretion and Systems of Public Law: Bell Group NV (in liq) v Western Australia

By Martin Clark

Bell Group Case Page

The High Court’s judgment in Bell Group was a nice rendition of the well-told story about s 109 of the Constitution. Section 109 provides that ‘[w]hen a law of a State is inconsistent with a law of the Commonwealth, the latter shall prevail, and the former shall, to the extent of the inconsistency, be invalid.’ Western Australian passed a law to create a body that was empowered to finally determine the liabilities owed to various creditors of the Bell Group companies in the fallout of their liquidation, the long saga of which is detailed by Katy Barnett here and here. The High Court held that this law was invalid because it conflicted with the federal tax laws, which created the rights of and liabilities owed to another government and another office holder in relation to these companies: the Commonwealth and the federal Commissioner of Taxation. As I wrote shortly after the decision came down, the plurality judges (French CJ, Kiefel, Bell, Keane, Nettle and Gordon JJ) held that:

The Authority’s purportedly absolute discretion to determine the existence of a liability of a WA Bell Company and to quantify that liability and the Governor’s powers to extinguish liabilities that would otherwise be owed to the Commonwealth meant that the Bell Act effectively created a scheme that stripped the Commonwealth’s tax debts of their existence, quantification, enforceability and recovery under the Tax Acts (at [57]–[60]). Because it overrides the Commonwealth’s rights under the Tax Acts as a creditor of the WA Bell Companies, the Bell Act alters, impairs or detracts from the rights accrued to the Commonwealth under the Tax Acts (at [61]).

The day after the High Court handed down Bell Group I heard the eminent British historian Gareth Stedman-Jones speak on the meaning of ‘dictatorship’. What followed was a great rendition (which I’ll recollect poorly shortly) of a well-told story in the history of political thought — the origins and development of the office of ‘dictator’ in Rome and beyond.

In this post, I attempt to make the otherwise fairly routine decision in Bell Group a little more interesting by framing it around the content of Stedman-Jones’s paper. This might seem a bit esoteric: what could the two have to do with each other? But I think that bringing Bell Group and the idea of ‘dictator’ together suggest one way in which the case is interesting: as a modern Australian episode in the long global history of the relation between discretion and systems of law. That relation is of fundamental importance to public law in general, and reflects some foundational aspects of the Australian constitutional system that were at play in Bell Group. Continue reading