Opinion Number. 1856

Subject

SNOWY MOUNTAINS SCHEME
VALIDITY OF SNOWY MOUNTAINS HYDRO-ELECTRIC POWER BILL: COMMONWEALTH CONSTITUTIONAL POWERS SUPPORTING BILL: SCOPE OF DEFENCE POWER: FUNCTIONS OF PROPOSED SNOWY MOUNTAINS HYDRO-ELECTRIC AUTHORITY

Key Legislation

CONSTITUTION ss 51(vi), (xxxi), (xxxix), 122: SNOWY MOUNTAINS HYDRO-ELECTRIC BILL

Date

We have considered the terms of the Bill relating to the Construction and Operation of Works for the Generation of Hydro-electric Power in the Snowy Mountains Area and the notes which were submitted to us with it. We have also had the opportunity of discussion with the acting Parliamentary Draftsman concerning the legislative authority under which it is proposed that the Bill shall be enacted and also concerning the terms of the Bill.1

The legislative authority under which it is proposed that the Bill shall be enacted is the power of the Commonwealth Parliament to make laws with respect to the naval and military defence of the Commonwealth and of the several States, the power conferred upon the Commonwealth Parliament by Section 122 of the Constitution to make laws for the government of any territory, the power to make laws with respect to the acquisition of property on just terms for any purpose in respect of which the Parliament has power to make laws and the incidental power conferred by Section 51(xxxix).

The Bill purports to set up an Authority to be known as the Snowy Mountains Hydro-electric Authority which is constituted a body corporate and invested (Clause 15) with the functions of

(a)  Generating electricity by means of hydro-electric works in the Snowy Mountains Area, and

(b)  Supplying electricity so generated

(i)  for defence purposes, and

(ii)  to the Australian Capital Territory.

For the purpose of performing its functions the Authority is given wide powers of constructing works of the general nature referred to in Clause 16 and a power to maintain, operate and manage such works. Further extensive particular powers are given to the Authority and in general these powers may be regarded as strictly ancillary to the declared functions of the Authority. Reference should, however, be made to the provisions of Clause 39 which provides that the Authority may sell to a State or to an authority of a State electricity generated by the Authority which is not immediately required for consumption for defence purposes or for consumption in the Australian Capital Territory.

The scheme thus envisaged involves the construction of works for the production of electricity and the maintenance, operation and management of those works by the Authority.  The Authority is empowered to supply such electricity in the first instance for defence purposes and to the Australian Capital Territory and to dispose of any surplus in bulk to any State or State Authority.

If it be held that the terms of Clause 15 specify the substantial purposes for the constitution of the Authority and the construction and maintenance of the works, then Clause 39 would in our opinion be rightly regarded as purely incidental and an Act in the terms of the Bill as it now stands would, we think, be held to be valid. On this hypothesis the primary powers of the Authority would be limited to the construction, operation and maintenance of works for defence purposes, which we feel must be held to be within placitum (vi) of Section 51 of the Constitution, and for the supply of electricity to the Australian Capital Territory, which for reasons which hereinafter appear, we think, is legitimate.

In considering the Bill we have had access to the Report dated November 1948 on the Proposals to Divert the Snowy River. We observe that in this Report a great deal appears concerning the necessity for the expansion of the electricity generating potential of the States for the purpose of meeting expanding civil requirements. In particular we note that ‘an estimate has been made by the electricity authorities of the States of the future demand for electricity from the relevant portions of New South Wales, Victoria and the Australian Capital Territory’ and the table furnished in the Report shows that ‘over the next 30 years additional capacity of 3,200,000 kilo watts will have to be made available by some form of power generation’. This estimate, it is said, does not take account of any marked increase in population by immigration, nor the establishment of any special industries requiring large amounts of power and the figures, it is further said, may be treated as conservative. Apart from these considerations reference is made to the defence aspect of the plan. In particular, reference is made to the location of the plants which will be established and the conservation of transport and coal supplies in the event of war. In addition to these matters reference is also made to the effect the plan would have upon decentralisation of industries. We are of the opinion that some of these matters would be held by the High Court at this stage to be remote from purposes of defence and insufficient to sustain the legislation. We think however that the matters referred to in the preamble show a sufficient nexus between the defence power and the legislation to justify it under placitum (vi) of Section 51. We have attempted to expand and elaborate these matters in a further draft preamble, a copy of which is attached to this opinion.

If it be established that the defence purposes disclosed in the preamble constitute legitimate defence purposes under Section 51(vi) of the Constitution, then the provisions of Clause 15 of the Act must be held to be valid although the question may arise concerning any particular exercise of the Authority’s functions under that Section whether it is for a legitimate defence purpose.

We have already referred in general terms to special powers conferred upon the Authority by Clauses of the Bill, but we think that particular reference should be made to the provisions of Clause 19. In view of the decision in Dalziell’s case2and the dicta of some of the members of the High Court in the Banking case,3 we think that the validity of these provisions should be considered on the assumption that an entry and occupancy pursuant to Clause 19 would constitute the acquisition of property. On this assumption we feel that we should refer to two matters:

1.  If the Bill, with the exception of Clause 15(b)(ii), be justifiable as legislation pursuant to the defence of the Commonwealth then the needs of the Australian Capital Territory could be provided for by a simple amendment of Clause 39, and

2.  If the defence purposes recited in the preamble be held to be not legitimate defence purposes in the sense that they may be said to be too remote from the defence power then the Bill in its present form could not be sustained. The effect of such a decision would be that Clause 15(b)(i) would be held to be invalid and the functions of the Authority would be limited to  those conferred by Clauses 15(a) and 15(b)(ii) and its powers restricted accordingly.

In discussing these matters we have considered the question of the power of the Commonwealth Parliament to make laws under Section122 of the Constitution and also its power to make laws under Section 51(xxxi). We are of the opinion that although the power of Parliament to make laws under Section 122 is not limited as to any specified subject matters any law for the acquisition of property which is made for the ‘purpose’ of Section 122 must be restricted by reference to the words appearing in Section 122 ‘for the government of any territory’. Accordingly while we are of the opinion that the Commonwealth may under Section 51(xxxi) make a law for the acquisition of land in any State for the ‘purpose’ of Section 122 such a law will be valid only if the authorised acquisition is for the government of the Territory. Consequently if the Bill in its present form depends, in the ultimate result, for its validity upon a consideration of the terms of Section 122 we think that Clause 15 will be valid only to the extent which we have already indicated.

In discussion with the acting Parliamentary Draftsman we suggested certain minor amendments to the Bill and we do not think it necessary to repeat these nor do we see any necessity for any further minor amendments except in the case of Clause 19. We think that the power conferred by this Clause upon the Authority should be expressed to be limited to a power for the purpose of performing its functions under the Act.

We understood from the acting Parliamentary Draftsman that it is possible that the provisions of Clause 39 may be amended and elaborated. The terms of any such amendment may affect our view of the Bill as it at present stands and we suggest that if any substantial amendment is made to Clause 39 that we be afforded the opportunity of considering it in its amended form and expressing our views.

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WHEREAS additional supplies of electricity are required for the purpose of defence works and projects and the construction of proposed defence works and projects will require further additional supplies of electricity from time to time.

AND WHEREAS greatly increased supplies of electricity will be required immediately on the outbreak of any war in which the Commonwealth shall be engaged.

AND WHEREAS by reason of the nature of modern armaments it is essential that provision should be made for such supplies of electricity to be available from generating stations which will be immune from enemy action or hostile attack.

AND WHEREAS by reason of the foregoing it is desirable that provision should be made for the Construction and Operation of Works for the Generating of Hydro-electric Power in the Snowy Mountains Area and by reason of the nature of such works it is essential that such provision should be made forthwith.

AND WHEREAS additional supplies of electricity are required for consumption in the Australian Capital Territory and the demand for supplies of electricity will increase within the said Territory from time to time.

[Vol. 38, p. 294]

1 The Snowy Mountains Hydro-Electric Power Act 1949 received Royal Assent on 7 July 1949.

2 Minister of State for Army v Dalziell Claimant [1944] HCA 4; (1944) 68 CLR 261.

3 Bank of NSW v Commonwealth [1948] HCA 7; (1948) 76 CLR 1.