The High Court has dismissed five appeals stemming from to a decision of the NSW Court of Appeal on anti-discrimination complaints made across State borders. Burns, a resident of NSW and an anti-discrimination campaigner, made complaints to the Anti-Discrimination Board of the NSW Civil and Administrative Tribunal about statements made by Corbett and Gaynor, who were, respectively, residents of Victoria and Queensland. At issue there was whether ss 28(2)(a) and (c), 29(1) and 32 of the Civil and Administrative Tribunal Act (NSW) (the NCAT Act), which lay out the general and appellate jurisdiction of NCAT, gave NCAT jurisdiction to hear cases between residents of different states (known as ‘diversity matters’). Hearing the various appeals stemming from these matters together, the NSWCA held that the NCAT had no diversity jurisdiction, and that only State courts, and not Tribunals, could hear such complaints under the High Court’s diversity jurisdiction.

The High Court unanimously dismissed the appeals. Four judges (Kiefel CJ, Bell and Keane JJ and Gageler J) held that the Constitution contains an implied limitation that prevents State parliaments from conferring diversity jurisdiction on State tribunals.

The Joint Judges (Kiefel CJ, Bell and Keane JJ)

Kiefel CJ, Bell and Keane JJ began by laying out the appeal as raising two issues: whether the Commonwealth Constitution precludes State parliaments from conferring jurisdiction in diversity matters on a tribunal that is not one of the ‘courts of the States’ referred to in s 77 (the ‘implication’ issue); and, if it does not, whether a State law purporting to do so is inoperative by virtue of s 109 of the Constitution, as inconsistent with a federal law covering the same issue, here, s 39 of the Judiciary Act 1903 (Cth) (the ‘inconsistency’ issue). The joint judges held held that the implication issue should be resolved affirmatively, and thus it was unnecessary to resolve the inconsistency issue (at [5], and see [4] on the distinctness of the issues). For the joint judges, the text, structure and purpose of Ch III compels the conclusion that State laws can only confer federal jurisdiction on State courts and not tribunals: Ch III exhaustively identifies the possibilities for adjudication by State organs, and organs other than courts of the States are not within those possibilities, and thus are excluded from them (at [2]–[3]).

After reviewing the history of the proceedings (at [6]ff), the constitutional and Judiciary Act provisions (at [15]ff), the reasoning the Court of Appeal (at [27]ff), and the parties submissions (at [33]ff), the joint judges turned first to the implication issue. Noting that the parties agree that they are residents of different states (at [38]), and ‘importantly’ that the NCAT is not a ‘court of a State’ for the purposes of Ch III (at [39]), the central contentious issue is whether Ch III denies the possibility that adjudication might be exercised by an organ of government that is not a Ch III court (at [40]).

Addressing that issue, the joint judges began with the ‘negative’ implications of Ch III. Ch III provides for authoritative adjudication of matters referred to in ss 75 and 76 of the Constitution by state courts, depending on the choices made by the Commonwealth Parliament (at [41]). The joint judges rejected the submissions of NSW and the other interveners that Ch III does not mandate a uniform national judicature, that the extent to which State Courts are ‘co-opted into the federal Judicature depends on the choices made’ by the Parliament, and that the existence of choices is fatal for the Commonwealth’s view of the implication (at [42], [43]):

But whatever choices may be made by the Commonwealth Parliament in this regard, adjudicative authority in respect of the matters listed in ss 75 and 76 of the Constitution may be exercised only as Ch III contemplates and not otherwise. Chapter III contemplates the exercise of adjudicative power only by this Court, by other federal courts created by the Commonwealth Parliament, by State courts invested with such power by the Commonwealth Parliament or by State courts to which such adjudicative authority belongs or in which it is invested. Accordingly, even if the Commonwealth Parliament had made no law under s 77(ii) or (iii), a State law purporting to authorise an agency of the government of a State other than a court to determine, for example, a dispute between residents of different States would be invalid because Ch III left no room for such an adjudication.

Noting the rhetorical question posed by the majority in the Boilermakers‘ Case [1956] HCA 10 — ‘What reason could there be in treating [Ch III] as an exhaustive statement, not of the powers, but only of the judicial power that may be exercised by the judicature?’ (at [44]ff) — the joint judges reformulated it as a response to arguments of NSW and the interveners: ‘what reason could there be in treating the arrangements made by Ch III for the adjudication of matters listed in ss 75 and 76 as an exhaustive statement only of the adjudicative authority that just happens to be exercised by the courts capable of comprising the federal Judicature referred to in Ch III?’. For the joint judges, there was ‘no good answer’ to this question: Ch III’s terms, structure and purpose ‘leave no room’ for any possibility that adjudicative authority might be exercised by or conferred on anything other than a Ch III court (at [46]). Even though State courts are creatures of State law, they remain State courts when co-opted into federal jurisdiction, and the Commonwealth Parliament ‘must take such courts as it find them’, and as the only State organs that can be co-opted (at [50]).

Turning to NSW’s argument that some matters covered in ss 75 and 76 involved jurisdiction which, prior to Federation, ‘belonged to’ State Courts and was not removed by Federation (see at [57]), the joint judges rejected it, making three points. First, that it fails to address the ‘negative effect’ of Ch III’s express language (see [58]). Secondly, that the expression ‘jurisdiction … which belongs to … the courts of the States’ in s 77(ii) itself indicates that the adjudicative authority to determine matters listed in ss 75 and 76 is exclusively the province of courts referred to there (see [59]ff). Thirdly, that NSW’s argument that the absence of any reference to tribunals in s 77 was a deliberate omission to preserve State legislative power over them fails to acknowledge that that cases dealing with these pre-Federation bodies often referred to them as courts, and that the distinction is a relatively modern one not used by the founders (at [62]ff).

The joint judges concluded that the challenged sections of the NCAT Act are invalid to the extent that they purport to confer jurisdiction on the NCAT to consider the matter between Burns, Corbett and Gaynor, and can be read down to avoid that conclusion (at [64], orders at [65]).

Gageler J

Gageler J agreed with the conclusion of the joint judges and ‘substantially’ agreed with their Honour’s reasoning on the implication issue, though Gageler J’s reasons involved first addressing the inconsistency issue (at [69]). Gageler J formulated the ‘ultimate question’ in this appeal as follows (at [67]):

The High Court has in the past made plain that, except with respect to the subject matters identified in ss 75 and 76 of the Constitution, a State Parliament can confer State judicial power on a State tribunal that is not a court of that State. The ultimate question now for determination is whether the exception is warranted.

Gageler J’s conclusion was that ‘the exception is warranted as a structural implication from Ch III’ (at [68]):

My opinion is that the exception is warranted as a structural implication from Ch III of the Constitution. The implication is needed because State legislative power to confer State judicial power on a State tribunal that is not a court of a State must be denied in order to ensure the effective exercise of the legislative powers conferred on the Commonwealth Parliament by s 77(ii) and (iii) to produce by legislation the constitutionally permissible result that an exercise of judicial power with respect to a subject matter identified in s 75 or s 76 occur only under the authority of Commonwealth law, in a forum which meets the minimum characteristics of a Ch III court, so as to give rise to a judgment or order that is appealable directly to the High Court subject only to such exceptions or regulations as the Commonwealth Parliament may prescribe under s 73(ii).

Turning first to the scope of s 77, Gageler J first laid out the meanings of its technical terms (at [70], [71]), before noting that State jurisdiction ‘cannot simply be equated with the jurisdiction which belonged to the courts of the colonies which on federation became States. On federation, everything adjusted’: at [72]. Colonial jurisdiction ‘transmogrified’ into State jurisdiction, which retained the subject-matter, geographical and personal jurisdiction previously held, but also in relation to classes of federal matters that had not existed prior to the establishment of the Commonwealth (at [72]). Gageler J emphasised that State jurisdiction of State courts ‘became subject to displacement by a law enacted by the Commonwealth Parliament under s 77(ii) or (iii)’, and that each power is ‘quite confined in its operation’ (at [73]). Gageler J rejected reading either of these provisions as permitting the Commonwealth Parliament to exclude the adjudicatory authority of State tribunals that are not State courts (at [77] regarding s 77(ii) and at [79] regarding s 77(iii)).

Moving to s 109, Gageler J clarified that the nature of the inconsistency between Commonwealth laws enacted under s 77(ii) lies in the federal law withdrawing an authority to adjudicate that is conferred by State law (at [80]). In the instance of the investment of State courts with federal jurisdiction by a law under s 77(iii), the inconsistency lies ‘in the disparity of the legal incidents of the dual sources of authority to adjudicate’: federal jurisdiction becomes the ‘sole operative source’ of that court’s jurisdiction in that matter (at [81]). For Gageler J, the ‘crux’ of the NSWCA’s judgment was that s 109 can operate with a law enacted under s 77(iii) to render inoperative State laws that confer State judicial power on a State tribunal that is not a court, but where the law would ‘”alter, impair or detract from the conditional and universal operation of the federal law”‘ (at [82], and see [83]). Gageler J rejected this argument (at [84]):

Respectfully, I disagree. If I were to assume that there is State legislative capacity to confer State jurisdiction on a State tribunal that is not a State court in a matter falling within s 75 or s 76, I would be unable to accept that s 109 of the Constitution would operate on a Commonwealth law enacted under s 77(iii) so as to invalidate a State law enacted in the exercise of that legislative capacity.

A State law cannot impair or detract from the operation of a Commonwealth law by impairing the Commonwealth law’s ‘conditional and universal’ application, except to the extent that it has a ‘legal operation or practical effect within the universe of the conditional legal operation of the Commonwealth law’ (at [87] and [89]). As applied to the present matter, impairing or detracting from s 39(2) of the Judiciary Act is to say that with that section the Commonwealth Parliament has made a complete, exhaustive and exclusive statement on federal jurisdiction: ‘It is necessarily to say that the Commonwealth Parliament has not only provided positively for the conditional investiture of federal jurisdiction in State courts but has also stipulated negatively for the non-investiture of any jurisdiction with respect to any of those matters other than in State courts.’ (at [91]). Gageler J noted the difficulty of finding any such ‘negative penumbra’ in the text of s 39(2), and stated that the more fundamental problem lies in finding a source of Commonwealth legislative power: namely that s 77(iii) does not allow Parliament to confer judicial power on a tribunal that is not a State court (at [92]).

Moving then to the implication question, Gageler J reiterated that the requirement for implying a ‘non-textual constitutional limitation’ on legislative power is that the limit be ‘”logically or practically necessary for the preservation of the integrity of [the constitutional] structure”‘ (at [94]). Here, the specific question is whether denying State legislative power to confer State judicial power with respect to federal matters on a State tribunal that is not a State court meets that threshold (at [94]). Noting the absence of a Commonwealth legislative power to achieve that result (at [95]), Gageler J stated that the necessity does arise: Ch III allows the Commonwealth Parliament to enact laws to allow State Courts to exercise federal jurisdiction (to the exclusion of their State jurisdiction), which may then be appealed to the High Court under s 73(ii), after which the Court will do complete justice to that matter (see at [96]–[98]). Allowing the possibility of State tribunal jurisdiction would undermine this system (at [99]):

The constitutional structure which enables attainment of that constitutionally permissible result, subject to that constitutionally mandated condition and with that automatic constitutional consequence, would be undermined to a significant extent were a State Parliament able to confer State jurisdiction with respect to a matter identified in s 75 or s 76 on a State tribunal that is not a State court. Were a State Parliament to have that power, the Commonwealth Parliament’s exclusion by a law enacted under s 77(ii) or (iii) of the State jurisdiction conferred on a State court could be circumvented by the simple expedient of conferring equivalent State jurisdiction on a State tribunal. The State tribunal would not need to have the minimum characteristics of independence and impartiality required of a Ch III court. The State tribunal’s judgments or orders would not need to be subject to any appeal on any question of fact or law to any court, much less the High Court. The tribunal would need to be subject only to the constitutionally entrenched supervisory jurisdiction of the Supreme Court of the State. The Supreme Court in the exercise of that supervisory jurisdiction would be able to grant an appropriate remedy only if the tribunal were to exceed or to fail to exercise the State jurisdiction conferred on it.

Gageler J then illustrated these undermining effects by exploring the Inter-State Commission, which the High Court had previously ruled could not be created by the Commonwealth Parliament (see [100]–[106]). Finally, Gageler J turned to historical arguments, noting that while history is important to constitutional interpretation, concentration on the minutiae can ‘distract from the discernment and exposition of constitutional principle’: the fixation on pre-Federation land boards, laws, practices and expectations are not necessarily useful in discerning whether a structural implication is necessary (see further [107]–[118]).

Nettle J

Nettle J noted that he had read the draft reasons of Gordon J and agreed with her Honour’s conclusions, though also offered his own set of reasons (at [123]). After reviewing the constitutional text (see [124]ff), Nettle J emphasised that because the legislative power granted by s 77 excludes jurisdiction that ‘belongs to or is invested in’ State courts, that power ‘draws with it, unexpressed but consequential, incidental and appropriate to its exercise, the power to prohibit State courts continuing to adjudicate such matters in the exercise of State jurisdiction’ (at [128]). Prior to the Commonwealth Parliament’s invocation of that legislative power in s 39(2) of the Judiciary Act, State courts and non-court State tribunals invested with State judicial power could adjudicated matters falling within ss 75 and 76 by exercising their State jurisdiction (at [129]). With the enactment of s 39(2), State courts were invested with federal jurisdiction, subject to the conditions of High Court appeal processes (at [130]).

After reviewing the competing views of s 39(2)’s operation — Walsh J’s view in Felton v Mulligan [1971] HCA 39 that s 39’s enactment withdrew state jurisdiction by operation of s 109, and Jacob J’s view in Commonwealth v Queensland [1975] HCA 43 that the withdrawal was necessarily implicit in Ch III itself, and thus occurred at Federation and prior to s 39 (see [131]ff) — Nettle J noted several issues with Jacob J’s approach (see [134] and [135]), the greatest and ‘ultimately determinative’ issue being that s 77 expressly leaves it to Parliament ‘to determine whether and to what extent the federal jurisdiction of federal courts should be exclusive of the jurisdiction which “belongs to or is invested in” State courts’ (at [136], and see [137]).

For Nettle J, then, the central questions in the appeal are whether ‘the Constitution armed the Parliament with legislative power to enact laws excluding the State jurisdiction of non-court State tribunals to adjudicate ss 75 and 76 matters; and, if so, whether by the enactment of s 39(2) of the Judiciary Act the Parliament has done so’ (at [138]). While it is clear that s 77 contains an implied power to prevent State courts from continuing to adjudicate ss 75 and 76 matters, whether that power impliedly carries the power to exclude the State jurisdiction of non-court State tribunals to adjudicate those matters ‘might appear more doubtful’ (at [139]). But authority makes it clear that the text and structure of Ch III implicitly provides that States cannot undermine the exclusive legislative power of the Commonwealth to invest and regulate federal jurisdiction: that power would be substantially undermined if the Commonwealth Parliament had no power to prevent non-court State tribunals from adjudicating ss 75 and 76 matters (at [140]):

In effect, it would mean that States would be free to conduct a system of non-court State tribunals vested with State jurisdiction – conceivably even to invest officers of the State executive with State jurisdiction – to do what the Parliament had determined in the exercise of its exclusive legislative power should be done within an integrated system of federal and State courts in the exercise of federal jurisdiction to the exclusion of State jurisdiction. It would render the Commonwealth’s exclusive legislative power to invest and regulate federal jurisdiction devoid of relevant content.

This possibility points to the need for an implied legislative power to stop it (at [141]), and s 39(2) was an exercise of this implied power, operating to exclude the State jurisdiction of non-court State tribunals (at [142], [146]). For Nettle J, this was effected by s 109: s 39(2) evinces an intention to cover the field in relation to ss 75 and 76 matters, ‘and so thereby does convey an implied negative stipulation that non-court State tribunals should not enter into’ that area of adjudication (at [145]). Section 39(2) should be construed as giving effect to the intention of preventing non-court State tribunals from adjudicating ss 75 and 76 matters (at [145]).

Gordon J

Gordon J held that State Parliaments cannot vest diversity jurisdiction: this conclusion does not depend on any implied constitutional limitation on State legislative power, but instead on the operation of s 39 of the Judiciary Act and s 109 of the Constitution (at [148]–[151]). After reviewing the history of the proceedings (at [152]ff), and the constitutional provisions on the nature and source of jurisdiction (at [158]ff), Gordon J noted that, significantly, s 39 made the jurisdiction of the High Court in relation to ss 75 and 76 matters exclusive, and conditionally reinvested the jurisdiction in State courts, making their source of authority to decide those matters exclusively federal (at [164]). Diversity matters were within the classes of matters in which State courts could exercise State jurisdiction prior to the Judiciary Act (at [168]), but following its enactment that authority could only come from a federal source (at [171]). The absence of any express reference to tribunals that are not State courts raises the question in this matter; whether a State Parliament can validly authorise a non-court tribunal with diversity jurisdiction (at [172]).

Gordon J rejected the Commonwealth’s central argument that there is an implied constitutional limitation that denies a State parliament that power (at [174]–[175]). First, the integrated judicial system said to be established by Ch III does not show that ss 75 and 76 matters should only be dealt with by federal judicial power, and ss 77(ii) and (iii) clarify that it is for the Commonwealth Parliament to legislate on the extent of investiture in State courts (at [176]). Nor do ss 75 and 76 establish any topics of ‘special’ federal concern, and the question of exclusivity of federal jurisdiction is not predetermined by constitutional structure, but rather the provisions of the Judiciary Act as an exercise of the legislative power in ss 77(ii) and (iii) (see [177]–[183]).

For Gordon J, once that is accepted, the Commonwealth’s submission raising concerns ‘about circumvention or fragmentation of [this] scheme by States choosing to vest jurisdiction in non-judicial tribunals loses much of its force’ (at [184]):

Any concern about States circumventing a national scheme in relation to matters within ss 75 and 76 can only arise at the point at which the powers in s 77 are actually exercised. Logically, that concern could only provide clear support for the Commonwealth’s primary submission if there were no other way in which such circumvention could be prevented once the powers were exercised … [and] that is not so.

The Commonwealth’s concern that States would be subject to federal control in regards to investing ss 75 and 76 jurisdiction in State courts, but free to also invest tribunals with that jurisdiction failed to appreciate that the control itself only arose with the Judiciary Act itself: ‘Until that power was exercised, there was nothing inherently problematic about State tribunals exercising’ diversity jurisdiction, and to the extent that it is incoherent or problematic for States to ‘continue to be free to confer such jurisdiction on tribunals’, that incoherence only existed after the enactment of the Judiciary Act (at [184]). Nor was there any historical basis for the Commonwealth’s claimed ‘closed scheme’ of courts only exercising jurisdiction in ss 75 and 76 matters in pre-Federation Local Land Boards (see [185]–[186]).

Gordon J concluded (at [187]) that given the Commonwealth Parliament’s powers to achieve federal control

[i]t is not possible to reason on that basis: (1) that the Constitution presupposes a particular scheme for how jurisdiction in ss 75 and 76 matters could be conferred and exercised; or (2) that Ch III exhaustively identifies the actors which could participate in that scheme. The former is not consistent with the actual operation of ss 75, 76 and 77 of the Constitution; and the latter remains no more than a statement of conclusion, without a clear principled or historical foundation.

Turning then to the inconsistency question, Gordon J reiterated the principles behind s 109 (see [189]ff), before emphasising that s 39 evinces the intention to bring about federal control over the jurisdiction exercised by State courts in relation to ss 75 and 76 matters (at [192]), and that the lack of an express mention of tribunals does not mean there is no inconsistency (at [193]):

The fact that neither s 39(1) nor s 39(2) of the Judiciary Act expressly refers to non-judicial tribunals does not mean that there is no inconsistency between s 39 and the conferral of State jurisdiction on such tribunals. Section 109 relevantly directs attention to whether such a conferral of jurisdiction alters, impairs or detracts from the operation of s 39 of the Judiciary Act. And if a State Parliament were free to confer upon State tribunals jurisdiction in relation to the matters on which s 39 of the Judiciary Act operates, without that conferral of jurisdiction needing to be subject to the conditions identified in s 39(2) of the Judiciary Act (or any other incidents of federal jurisdiction), that would plainly detract from the intended operation of s 39. That is because, to the extent that a State Parliament can respond to the limitations imposed by s 39 by vesting jurisdiction in a State tribunal that is not a court of the State, the efficacy of s 39 insofar as it operates on State courts is correspondingly reduced.

After rejecting the arguments of two intervening States grounded in the lack of express reference to state tribunals in s 77 (see [194]ff), Gordon J reiterated her conclusion that the Anti-Discrimination Act‘s jurisdiction provisions were invalid for inconsistency with s 39 (at [199]).

Edelman J

Edelman J saw the Commonwealth’s primary submission as being that Ch III, at Federation, impliedly withdrew State legislative power to confer jurisdiction jurisdiction on tribunals to decide diversity cases (see [203] and [204]). Edelman J rejected this implication: ‘There was, and is, no necessity for this proposed constitutional implication’: instead, s 77(ii) replicated the scheme that existed in the United States, albeit making explicit what was only implied in the US Constitution; namely, that Congress ‘had an implied power to make matters described in art III s 2 exclusive to federal courts’ (at [205]).

For Edelman J, the Commonwealth’s submission that the reference in s 77(ii) to excluding ‘that which belongs to or is invested in the Courts of the States’ carried the assumption that concurrent State jurisdiction could only be exercised by courts should be rejected for several reasons (at [214]–[215]).

First, this implication is inconsistent with the US model on which s 77 was based (at [216]–[217]). Secondly, it was not required by the text of s 77(ii), because that text excludes all other authority: ‘he reference to the possibility of jurisdiction “concurrent with that of the Courts of the States” was merely descriptive of the alternative to exclusive authority (ie concurrent authority). That alternative did not confine the power to make federal jurisdiction exclusive.’ ([222], and see at [218]–[224]). Thirdly, the implication was inconsistent with s 77(ii)’s historical context, namely the existence and practices of a range of administrative bodies which exercised judicial power over diversity, admiralty and maritime matters, and the assumption that these bodies would continue to operate after Federation goes against a background implication in Ch III that removed this jurisdiction (at [225], and see Edelman J’s examination of the details of these bodies from [226]–[237]). Fourthly, Edelman J rejected the Commonwealth’s arguments that there was a principled basis for the implication, in that the States could ‘easily defeat’ Commonwealth attempts to make federal courts the exclusive repository for jurisdiction in ss 75 and 76 matters: that argument rested on denying that the Commonwealth could exclude tribunals, which, under s 77(ii), it can (see [238]–[243]). Fifthly, Edelman J rejected the Commonwealth’s arguments that the implication was indeed already recognised in earlier case law (see [244]ff).

Turning to the Commonwealth’s alternative submission that ss 38 and 39 of the Judiciary Act excluded State diversity jurisdiction, Edelman J accepted that point (at [252]), but held that the State laws were rendered inoperative directly by those provisions: ‘it is not necessary that the State law be understood as rendered inoperative by reason of s 109 of the Constitution‘ (at [208]). For Edelman J, where an exercise of Commonwealth legislative power under s 77(ii) was intended to be a ‘complete statement’ of jurisdiction, s 109 need not operate to render State laws invalid: ‘the invalidity, in the sense of inoperability, can also be seen as arising directly from the exclusionary effect required by s 77(ii)’ (at [254]). Sections 38 and 39 constituted just such a full exercise of the power to exclude: their text was borrowed from s 77, and this ‘is a strong indication that those sections should be construed in the same manner as s 77(ii), and as an exercise of the full breadth of its power’ (at [256], and see [257] on purpose).

Edelman J concluded by suggesting that there was an important ‘practical difference’ between his Honour’s conclusions and reaching the same conclusion by a constitutional implication, in that a referendum would be required to return that power to the States: ‘If the pre-Federation, colonial legislative power to confer jurisdiction on non-court tribunals in diversity, admiralty and maritime matters had been impliedly withdrawn by a constitutional implication, then it would require a referendum, under s 128 of the Constitution, for that legislative power to be returned to the States.’ (at [260]).

High Court Judgment	[2018] HCA 15	18 April 2018
Result	Appeals dismissed
High Court Documents	Burns v Corbett
	Burns v Gaynor
	A-G (NSW) v Burns (S186)
	A-G (NSW) v Burns (S187)
	NSW v Burns
Full Court Hearings	[2017] HCATrans 249	6 December 2017
	[2017] HCATrans 247	5 December 2017
Special Leave Determination	[2017] HCATrans 136	22 June 2017
Appeal from NSWCA	[2017] NSWCA 3	3 February 2017
Trial Judgment, NSWSC	[2016] NSWSC 612	26 July 2016