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Where Section 35 Electoral Funding Act 2018 (NSW) was repealed before hearing, did the Plaintiffs continue to have standing to seek declaration of it's invalidity?

Unions NSW v New South Wales [2023] HCA 4 (15 February 2023)



There has been a series of cases in the original jurisdiction of this Court concerned with the constitutional validity of provisions of legislation in New South Wales regulating political donations and expenditure on campaigns for elections in that State. This is the second case dealing with the validity of caps on the electoral expenditure of third-party campaigners ("TPCs") – broadly, a person or entity, other than a political party, associated entity, elected member or candidate, who seeks to participate in a New South Wales election campaign and incurs over $2,000.

The Electoral Funding Act, 2018 (NSW) , among other things, makes "provision for the disclosure, capping and prohibition of certain political donations and electoral expenditure for parliamentary and local government election campaigns". It creates a comprehensive scheme regulating the extent and sources of funding for elections, and requiring regular disclosure to the New South Wales Electoral Commission of political donations and of electoral expenditure by parties, elected members, candidates, groups of candidates and associated entities, as well as by major political donors and TPCs in certain circumstances.

Each of the plaintiffs was registered under the EFED Act and EF Act as a TPC for past New South Wales State elections and by‑elections. Each plaintiff asserted an intention to be registered as a TPC under the EF Act for future NSW State elections and by‑elections, and asserted an intention to incur "electoral expenditure" during the "capped State expenditure period" in those elections and by‑elections, to the extent permitted by law. The plaintiffs contended that two provisions of the EF Act governing TPCs impermissibly burdened the implied freedom of communication on governmental and political matters protected by the Constitution, and sought declarations of invalidity.

The first provision, s 29(11) of the EF Act, caps TPCs' "electoral expenditure" in the "capped State expenditure period" before a State by‑election for the Legislative Assembly to $20,000 indexed for inflation. Section 29(11), read with s 33(1), prohibits TPCs from incurring electoral expenditure exceeding that $20,000 indexed cap.

After the Court reserved its decision on the validity of s 29(11) of the EF Act, the State informed the Court that, on 23 November 2022, the New South Wales Joint Standing Committee on Electoral Matters ("JSCEM") had delivered Report 2/57 entitled "Caps on third-party campaigners' electoral expenditure in s 29(11) and s 35 of the Electoral Funding Act 2018" ("the 2022 JSCEM Report"). Among other things, the 2022 JSCEM Report recommended that the expenditure cap for TPCs in by‑elections be increased to $198,750. In light of that Report, the State said that it now conceded that s 29(11) was invalid. Orders were made by the Court to supplement the Further Amended Special Case with the 2022 JSCEM Report. The invalidity of s 29(11) is addressed later in these reasons.

The second provision, s 35 of the EF Act, created an offence, applicable only to TPCs, for acting in concert with another person or persons to incur electoral expenditure in relation to an election campaign during the capped expenditure period that exceeded the cap applicable to the TPC for the election. Section 35(2) provided that a person "acts in concert" with another person if the person acts under an agreement, whether formal or informal, with the other person to campaign with the object, or principal object, of having a particular party, elected member or candidate elected, or opposing the election of a particular party, elected member or candidate.

Two weeks before the hearing of this proceeding, the New South Wales Parliament repealed s 35 of the EF Act[22]. Following the repeal, the plaintiffs amended their statement of claim to seek a declaration that s 35, as it stood from 1 July 2018 until 2 November 2022, was invalid. The plaintiffs submitted that the Court retains jurisdiction in the matter so far as it concerns the validity of s 35. The State, and the Commonwealth intervening, contended that, in the circumstances, the Court no longer has jurisdiction to determine the validity of s 35.


After the repeal of s 35 of the EF Act, the following questions were stated for the opinion of the Full Court:

"1. Is section 29(11) of the [EF Act] invalid because it impermissibly burdens the implied freedom of communication on governmental and political matters, contrary to the Commonwealth Constitution?

1A. As to proposed question 2 below:

Does the Court have jurisdiction to hear and determine the question?

Should the Court in its discretion hear and determine the question?

If the answer[s] to questions 1A(a) and (b) are 'yes': was section 35 of the [EF Act], as it stood from 1 July 2018 until 2 November 2022, invalid because it impermissibly burdened the implied freedom of communication on governmental and political matters, contrary to the Commonwealth Constitution?

Who should pay the costs of the special case?"


Question 1A – Jurisdiction to determine validity of s 35

The Court first heard argument on question 1A: whether, given the repeal of s 35, the Court had jurisdiction to hear and determine the constitutional validity of that section, and if it had jurisdiction, whether it should determine the question. At the end of argument, the Court informed the parties and the intervener that at least a majority of the Court would answer either question 1A(a) or 1A(b), "No". The Court therefore did not hear argument on question 2, as that question does not arise. What follows are the reasons for answering question 1A(a) "No", and question 1A(b) "Unnecessary to answer".

The requirement of a "matter"

The judicial power of the Commonwealth is vested by s 71 of the Constitution in the High Court, and such other federal courts as the Parliament creates or vests with federal jurisdiction. "Jurisdiction" is the "generic term" for the authority to adjudicate. Federal jurisdiction is the authority to adjudicate – the authority to exercise the judicial power of the Commonwealth – derived from the Constitution and laws passed by the Commonwealth Parliament under the Constitution. The extent of this Court's authority to exercise that power (and the authority of other courts invested with federal jurisdiction) is limited by the Constitution, reflecting notions of the separation of powers, and of responsible and representative government, found in the text and structure of the Constitution.

Consistent with those fundamental principles, the function of the Court is not the giving of legal answers or the declaration of legal principle – it is the resolution of a controversy about a legal right, duty or liability. The giving of answers or the making of declarations is an exercise of judicial power only where the seeking and giving of those answers or declarations arise in or out of the judicial determination of the rights and liabilities in issue in the dispute]. That understanding of the Court's function is reflected in the constitutional requirement that a dispute involves a "matter" for the purposes of Ch III of the Constitution.

Exceptional categories aside, there can be no "matter" within the meaning of Ch III of the Constitution unless "there is some immediate right, duty or liability to be established by the determination of the Court" in the administration of a lawand unless the determination can result in the Court granting relief which both quells a controversy between parties and is available at the suit of the party seeking that relief. Standing to seek relief is in that way "subsumed within the constitutional requirement of a 'matter'". While the concepts of standing and matter are not entirely co‑extensive, both are concerned to "mark out the boundaries of judicial power"; their attempted severance is "conceptually awkward, if not impossible".

What is required to establish standing varies with the nature of the relief that is sought and will apply differently to different sorts of controversies. Where, as here, the relief sought is declaratory of the invalidity of legislation, standing has traditionally been explained in terms of a requirement for the party seeking the relief to have a "real" or "sufficient" interest in obtaining the relief. That requirement is closely aligned with the requirement that, for the making of a declaration to constitute an exercise of judicial power, the declaration must be seen at the time of its making to produce foreseeable consequences for the parties.

Croome v Tasmania confirmed the "long-standing doctrine" that a "matter" can "consist of a controversy between a person who has a sufficient interest in the subject and who asserts that a purported law is invalid and the polity whose law it purports to be". The sufficiency of the interest in such a case provides standing to seek a declaration that the law is invalid. The immediate right, duty or liability to be established by the determination of the Court is the right to the declaration sought. The law that is administered by the Court is the Constitution.

As the standing of a party to seek declaratory relief depends on the sufficiency of the interest of that party in obtaining that relief, a sufficient interest must continue to subsist up until the time at which relief is granted or refused. If, after the commencement of a proceeding, a party ceases to have a sufficient interest in obtaining the relief sought, that party no longer has standing to obtain that relief, the "matter" ceases to exist and, in consequence, the jurisdiction of the Court comes to an end. But that is not to say that the interest must remain the same throughout the proceeding; the nature of a party's interest may change but still remain sufficient.

The need for standing, as a component of a "matter", to continue to exist throughout a proceeding for the Court to have jurisdiction to continue to entertain the proceeding is consistent with the settled understanding that a "matter" is a justiciable controversy identifiable independently of a proceeding. If a "matter" can exist whether or not a proceeding has been commenced, a "matter" can cease to exist after a proceeding has been commenced.

In this case, the question whether there is a justiciable controversy in relation to the constitutional validity of a law – s 35 of the EF Act – that was repealed after the proceeding had been filed is able to be addressed by asking if the applicable principles permit the plaintiffs to seek a declaration of invalidity.

Standing to seek a declaration

A plaintiff will have and maintain a real or sufficient interest in obtaining relief if and for so long as they seek a declaration of their own rights, legal interests or liabilities, or if and for so long as the declaration sought will directly affect their rights, legal interests or liabilities. Generally, such a declaration will have foreseeable consequences for the plaintiff because they will be able to legally enforce those rights, interests or liabilities. So, for example, a declaration of invalidity of a law (even where the law has been repealed or amended) may have foreseeable consequences for that plaintiff where such a declaration assists to negative a statutory defence to a common law cause of action such as an intentional tort, or where the plaintiff is being prosecuted for breach of that law. The past infringement of certain personal rights or interests of a plaintiff, such as reputation and liberty, may also be sufficient for seeking declaratory relief even where there are no other asserted legal consequences.

But when a plaintiff seeks a declaration not of personal rights or liabilities – for example, a declaration of invalidity of a law for breach of the implied freedom of political communication, which is not a personal right – a plaintiff must establish an interest other than that which any other ordinary member of the public has in upholding the law generally. A person is not sufficiently interested "unless [they are] likely to gain some advantage, other than the satisfaction of righting a wrong, upholding a principle or winning a contest, if [their] action succeeds or to suffer some disadvantage, other than a sense of grievance or a debt for costs, if [their] action fails". The test for a sufficient interest is broad and flexible, varying according to the nature and subject matter of the litigation. However, whether a plaintiff's interest is sufficient is a question of degree, not a question of discretion. The plaintiff must show that "success in the action would confer on [them] ... a benefit or advantage greater than [that] conferred upon the ordinary member of the community; or ... relieve [them] of a detriment or disadvantage to which [they] would otherwise have been subject ... to an extent greater than the ordinary member of the community". They must have more than a mere intellectual or emotional concern, and more than a belief, however strongly held, that the law or the Constitution should be upheld. As Croome demonstrates, a plaintiff may have a sufficient interest where their freedom of action is particularly affected by the impugned law. Other cases, such as Onus v Alcoa of Australia Ltd, demonstrate that the breadth of the categories of interest include economic, cultural and environmental interests.

No continuing matter in relation to s 35 of the EF Act

When the plaintiffs commenced these proceedings in June 2022, the matter within the Court's jurisdiction included the plaintiffs' challenge to the validity of s 35 of the EF Act. As TPCs registered under the EF Act whose expenditure and campaigning had been affected by that provision and could be expected to be affected in future elections, the plaintiffs had standing and a sufficient interest to seek a declaration as to the invalidity of s 35.

However, that state of affairs changed on 2 November 2022 when the Parliament of New South Wales repealed s 35. As mentioned, following that repeal, the plaintiffs amended the prayer for relief in their statement of claim to seek a declaration that s 35 of the EF Act, as it stood from 1 July 2018 until 2 November 2022, was invalid. The plaintiffs submitted that the Court retains jurisdiction in the matter so far as it concerns the validity of s 35, because the plaintiffs suffered for four years under the burden of the statutory norm in s 35 and modified their behaviour to avoid its criminal sanction. The plaintiffs also submitted that they have a reasonable apprehension that the State may reintroduce a provision in "materially similar" terms to s 35, and may do so before the State general election in May 2023. Neither of those matters assists the plaintiffs.

The plaintiffs have not demonstrated that they continue to have standing, or a real or sufficient interest, to seek a declaration as to the invalidity of s 35. The plaintiffs cannot and do not assert that any of their rights, duties or legal interests have been infringed by the past application of s 35. The plaintiffs are not the subject of enforcement action for any past breach of s 35, nor do they claim to have contravened s 35 in the past[58]. Nor do they assert that a declaration of invalidity would assist them in vindicating any right, duty or legal interest. The plaintiffs assert invalidity solely by reference to the implied freedom of political communication. That implied freedom is not a personal right[59]; it is a freedom from unjustified legislative interference.

For those reasons, the Court no longer has jurisdiction to hear and determine the plaintiffs' claim with respect to the purported invalidity of s 35 of the EF Act, now repealed. The scope of the constitutional "matter" before the Court has contracted and the only remaining issue is the validity of s 29(11). Question 1A(a) should be answered "No".
Given that conclusion, it is unnecessary to answer question 1A(b) – whether the Court, in its discretion, should hear and determine the question of the purported invalidity of s 35 of the EF Act, now repealed. That question was premised on the Court having jurisdiction to hear and determine that claim.

Question 1 – Validity of s 29(11) of the EF Act

It was accepted by the parties and the Commonwealth that caps on electoral expenditure (including s 29(11) of the EF Act) impose an effective and direct burden on political communication by restricting the capacity of the persons to whom they apply to participate in political debate during an election campaign[69], and that where a law imposes a burden on the freedom, it must be justified[70].

It was also accepted that the polity imposing the burden on political communication bears the persuasive onus of establishing that justification[71]. That is, at least in a practical sense, it is for the State defending the validity of the impugned provisions to justify the burden[72]. The Court must be satisfied of the existence of facts on which the State's justification for the burden depends[73]. That requirement was determinative in Unions [No 2].

As explained earlier in these reasons, shortly after oral argument had completed, the State told the Court that it now accepted that s 29(11) of the EF Act was invalid. The State said that it had changed its position because the JSCEM had just reported to the Parliament of New South Wales, among other things, that the cap on TPCs for a by-election should be increased to $198,750 indexed. The plaintiffs and the State consented to the 2022 JSCEM Report being brought to the attention of the Court. The parties submitted that the Court should answer question 1 stated for the opinion of the Full Court (which asked whether s 29(11) is invalid) "Yes".

Questions of the validity of a law cannot be decided by agreement of the parties. It is for the Court to be satisfied that a law is invalid before answering in that way a question reserved for the opinion of the Full Court and before granting any final declaratory or other relief. In the present case, the point of determinative significance is that the State no longer seeks to justify the burden which s 29(11) imposes on communication on governmental and political matters. And, as explained above, the polity imposing the burden bears the persuasive onus of establishing that the burden is justified.

The plaintiffs maintain their complaint that s 29(11) is invalid. This provision (unlike s 35) has not been repealed. It remains a purported law of New South Wales. The State has said nothing about any proposal to repeal or amend s 29(11). The plaintiffs have a sufficient interest to seek relief and the State accepts (by its agreement that question 1 should be answered "Yes") that there is continued utility in answering question 1 in that way. Only if that is done (and the law is declared invalid) are the plaintiffs relieved of the purported effect of s 29(11) on their electoral expenditure in future by-elections and the risk of the attempted enforcement of that provision. Section 29(11) imposes a burden on the implied freedom and that burden has not been justified. For those reasons, question 1 should be answered "Yes".


For those reasons, the questions stated by the parties for the opinion of the Full Court should be answered as follows:
Question 1: Yes.

Question 1A: (a) No.

(b) Unnecessary to answer.

Question 2: Does not arise.

Question 3: In relation to question 1, the defendant. Otherwise, there should be no order as to costs.

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