Court of Appeal Supreme Court New South Wales Medium Neutral Citation: Hoxton Park Residents Action Group Inc v Liverpool City Council [2016] NSWCA 157 Hearing dates: 2 February 2016 Decision date: 05 July 2016 Before: Beazley P at [1]; Basten JA at [235]; Macfarlan JA at [295] Decision: Appeal dismissed with costs. Catchwords: CONSTITUTIONAL LAW – Commonwealth grants of financial assistance to the States – Commonwealth of Australia Constitution, s 96 – whether impermissible for Commonwealth to provide funding in respect of objects outside areas of legislative competence – Commonwealth may provide funding outside areas of federal legislative competence subject to any relevant constitutional provision to the contrary CONSTITUTIONAL LAW – Commonwealth funding of non-government schools, including religious schools – Commonwealth of Australia Constitution, s 116 – whether legislation establishing funding regime, or funding itself, impermissible as contrary to s 116 – whether funding Acts laws for establishing religion, imposing religious observance or prohibiting the free exercise of religion – importance of legislative purpose STANDING – challenge to Commonwealth grants of financial assistance pursuant to Commonwealth of Australia Constitution, s 96 – whether plaintiffs have standing to challenge validity of Commonwealth laws and executive acts relating to funding of non-government school – whether standing limited to existing funding arrangements Legislation Cited: Australian Education Act 2013 (Cth), ss 3, 4, 6, 15, 21, 22, 23, 25, 26, 31, 71, 75, 77, 78; Pt 6 Australian Education Regulation 2013, ss 10, 41, 42, 43, 61 Constitution, ss 51, 80, 87, 92, 96, 116, 117, 122 Schools Assistance Act 2008 (Cth), ss 118, 119, 120; Pt 9, Div 3 Supreme Court Act 1970 (NSW), s 75A Uniform Civil Procedure Rules 2005 (NSW), r 13.4, 50.16, 51.36 Cases Cited: Adelaide Company of Jehovah's Witnesses Incorporated v Commonwealth [1943] HCA 12; 67 CLR 116 Agostini v Felton 521 US 203 (1997) Alphapharm Pty Ltd v SmithKline Beecham (Aust) Pty Ltd (1994) 49 FCR 250 AMS v AIF [1999] HCA 26; 199 CLR 160 Attorney-General (Vic); Ex rel Black v Commonwealth [1981] HCA 2; 146 CLR 559 Attorney-General for New South Wales v Brewery Employees Union of New South Wales [1908] HCA 94; 6 CLR 469 Bank of NSW v Commonwealth [1948] HCA 7; 76 CLR 1 Cheedy on behalf of the Yindjibarndi People v State of Western Australia [2010] FCA 690 Cheng v R [2000] HCA 53; 203 CLR 248 Church of the New Faith v Commissioner of Pay-Roll Tax (Vic) [1983] HCA 40; 154 CLR 120 Clunies-Ross v Commonwealth [1984] HCA 65; 155 CLR 193 Cole v Whitfield [1988] HCA 18; 165 CLR 360 Davis v The Commonwealth (1988) 166 CLR 79 Doherty v Liverpool District Hospital (1991) 22 NSWLR 284 at 294 Everson v Board of Education of Ewing Tp 330 US 1 (1947) Fox v Percy [2003] HCA 22; 214 CLR 118 Georgiadis v Australian & Overseas Telecommunications Corporation [1994] HCA 6; 179 CLR 297 Great Wall Resources Pty Ltd v O'Sullivan [2009] NSWCA 119 Hoxton Park Residents Action Group Inc v Liverpool City Council (No 2) [2011] NSWCA 363; 256 FLR 156 Hoxton Park Residents Action Group Inc v Liverpool City Council [2015] NSWSC 136 ICM Agriculture Pty Ltd v The Commonwealth [2009] HCA 51; 240 CLR 140 Insurance Australia Ltd v Checchia [2010] NSWCA 193 JT International SA v Commonwealth [2012] HCA 43; 250 CLR 1 Kruger v Commonwealth [1997] HCA 27; 190 CLR 1 Krygger v Williams [1912] HCA 65; 15 CLR 366 Lange v Australian Broadcasting Corporation [1997] HCA 25; 189 CLR 520 Leeth v Commonwealth [1992] HCA 29; 174 CLR 455 Lemon v Kurtzman 403 US 602 (1971) Mitchell v Helms 530 US 793 (2000) Mutual Pools & Staff Pty Ltd v Commonwealth [1994] HCA 9; 179 CLR 155 New South Wales v The Commonwealth [2006] HCA 52; 229 CLR 1 P J Magennis Pty Ltd v Commonwealth [1949] HCA 66; 80 CLR 382 Plaintiff M68-2015 v Minister for Immigration and Border Protection [2016] HCA 1 Pape v Federal Commissioner of Taxation (2009) 238 CLR 1; [2009] HCA 23 R v Winneke; Ex parte Gallagher [1982] HCA 77; 152 CLR 211 Radnedge v Government Insurance Office of New South Wales (1987) 9 NSWLR 235 Re McBain; Ex parte Australian Catholic Bishops Conference (2002) 209 CLR 372; [2002] HCA 16 Reynolds v United States 98 US 145 (1878 Right to Life Association (NSW) Inc v Secretary, Department of Human Services and Health (1995) 56 FCR 50 Smith v ANL Ltd [2000] HCA 58; 204 CLR 493 Street v Queensland Bar Association [1989] HCA 53; 168 CLR 461 Teori Tau v The Commonwealth (1969) 119 CLR 564 Victoria v Commonwealth [1957] HCA 54; 99 CLR 575 Wurridjal v The Commonwealth (2009) 237 CLR 309; [2009] HCA 2 Williams v Commonwealth of Australia [2012] HCA 23; 248 CLR 156 Zelman v Simmons-Harris 536 U.S. 639 (2002) Texts Cited: J Quick and RR Garran, The Annotated Constitution of the Australian Commonwealth (1901 ed, Legal Books, Sydney, 1976) Nadine Strossen, "Religion and the Constitution: A Libertarian Perspective" 2006 Cato Sup Ct Rev 7 at 18-19 Category: Principal judgment Parties: Hoxton Park Residents Action Group Inc (First Appellant) Marella Harris (Second Appellant) Liverpool City Council (First Respondent) Malek Fahd Islamic School Ltd (Second Respondent) Australian Federation of Islamic Councils Inc (Third Respondent) State of New South Wales (Fourth Respondent) Commonwealth of Australia (Fifth Respondent) Representation: Counsel: P E King (First and Second Appellants) Submitting Appearance (First Respondent) B Katekar and J Muir (Second and Third Respondents) Submitting Appearance (Fourth Respondent) S Free (Fifth Respondent) Solicitors: Robert Balzola And Associates (Appellants) Marsdens Law Group (First Respondent) Mitry Lawyers (Second and Third Respondents) Crown Solicitor's Office (Fourth Respondent) Australian Government Solicitor (Fifth Respondent) File Number(s): 2015/87043 Decision under appeal Court or tribunal: Supreme Court Jurisdiction: Equity Citation: Hoxton Park Residents Action Group Inc v Liverpool City Council [2015] NSWSC 136 Date of Decision: 03 March 2015 Before: Pembroke J File Number(s): 2009/289796 [Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.] Headnote [This headnote is not to be read as part of the judgment] The appellants commenced proceedings in the Supreme Court of New South Wales seeking declaratory relief in respect of certain funding paid to the second respondent, Malek Fahd Islamic School Ltd (Malek Fahd), in respect of its Hoxton Park campus. Malek Fahd operates the Malek Fahd Islamic School (the School), a non-government school with campuses at Greenacre, Beaumont Hills and Hoxton Park. The Hoxton Park campus is operated on lands leased by Malek Fahd from the third respondent, the Australian Federation of Islamic Councils Ltd. Funding for the Hoxton Park campus was provided to the School by the Commonwealth, in the context of Commonwealth educational funding grants to the States pursuant to the Schools Assistance Act 2008 (Cth) and the Australian Education Act 2013 (Cth). The appellants sought to challenge the constitutional validity of the relevant funding arrangements, alleging invalidity in respect of both the Acts themselves and the administrative actions taken under them. On 3 March 2015, Pembroke J dismissed the appellants' claims with costs. His Honour rejected the appellants' constitutional arguments, and held that the appellants' standing was confined to the challenge of existing funding arrangements. The principal issues for determination on the appeal were as follows: (i) whether the impugned Acts were invalid in providing for Commonwealth grants of financial assistance pursuant to s 96 of the Constitution in respect of matters beyond federal legislative competence; (ii) whether the impugned Acts, or the funding provided to the School thereunder, were invalid on the basis of s 116 of the Constitution; (iii) whether the appellants had standing and, if so, whether that standing was confined to the challenge of existing funding arrangements The appellants also made challenges in relation to the primary judge's factual findings and treatment of certain evidence. The Court held, dismissing the appeal with costs: In relation to (i): (1) The Commonwealth cannot provide financial assistance to the States pursuant to s 96 of the Constitution if to do so would be contrary to another provision of the Constitution. [52]-[61] (Beazley P); [239] and [246] (Basten JA); [295] (Macfarlan JA) Attorney-General (Vic); Ex rel Black v Commonwealth [1981] HCA 2; 146 CLR 559; ICM Agriculture Pty Ltd v The Commonwealth [2009] HCA 51; 240 CLR 140; P J Magennis Pty Ltd v Commonwealth [1949] HCA 66; 80 CLR 382; Victoria v The Commonwealth [1926] HCA 48; 38 CLR 399 (2) However, subject to the operation of other provisions of the constitution, the Commonwealth may provide financial assistance to the States under s 96 on such terms as it sees fit and notwithstanding that the object of the funding falls outside Commonwealth legislative power. [52]-[61] (Beazley P); [245]-[246] (Basten JA); [295] (Macfarlan JA) Attorney-General (Vic); Ex rel Black v Commonwealth [1981] HCA 2; 146 CLR 559; ICM Agriculture Pty Ltd v The Commonwealth [2009] HCA 51; 240 CLR 140; P J Magennis Pty Ltd v Commonwealth [1949] HCA 66; 80 CLR 382; Victoria v. The Commonwealth [1926] HCA 48; 38 CLR 399 per Basten JA: (3) It is unnecessary to rely on s 51(xxxvi) in order to provide a legislative basis for an exercise of power under s 96 of the Constitution. [240]-[246] Victoria v Commonwealth (1957) 99 CLR 575; Wurridjal v Commonwealth [2009] HCA 2; 237 CLR 309. In relation to (ii): (4) The terms of s 116 differ from those of the First Amendment to the Constitution of the United States, and United States authorities are accordingly of little assistance in the construction of s 116. [89]-[98] (Beazley P); [265]-[272] (Basten JA); [295] (Macfarlan JA) Attorney-General (Vic); Ex rel Black v Commonwealth [1981] HCA 2; 146 CLR 559 (5) In determining whether a law infringes one of the limbs of s 116, the relevant inquiry is the purpose of the law in question. A law will only infringe s 116 if it is a law for a proscribed purpose. [101]-[106] (Beazley P); [265] (Basten JA); [295] (Macfarlan JA) Attorney-General (Vic); Ex rel Black v Commonwealth [1981] HCA 2; 146 CLR 559; Kruger v Commonwealth [1997] HCA 27; 190 CLR 1; Yindjibarndi People v State of Western Australia [2010] FCA 690 (6) For a law to be invalid as a law for establishing any religion, the law in question must have, as its purpose, the establishment or recognition of a state religion or state church. [115]-[123] (Beazley P); [274]-[275] (Basten JA); [295] (Macfarlan JA) Attorney-General (Vic); Ex rel Black v Commonwealth [1981] HCA 2; 146 CLR 559 (7) Commonwealth funding of religious schools, in the context of a neutral and non-discriminatory regime for the funding of non-government schools, will not contravene the establishment clause of s 116. [124]-[128] (Beazley P); [276]-[279] (Basten JA); [295] (Macfarlan JA) Attorney-General (Vic); Ex rel Black v Commonwealth [1981] HCA 2; 146 CLR 559 (8) That a religious school in receipt of Commonwealth funding requires religious observances of its pupils will not invalidate a funding statute, or the funding thereunder, as a law for imposing religious observance. The imposition must be the purpose of the law, and not merely an incident of individual or parental choice. [132]-[135] (Beazley P); [280]-[281] (Basten JA); [295] (Macfarlan JA) (9) That a religious school in receipt of Commonwealth funding imposes religious restrictions on its pupils will not invalidate a funding statute, or the funding thereunder, as a law for prohibiting the free exercise of religion. [145]-[150] (Beazley P); [282]-[283] (Basten JA); [295] (Macfarlan JA) In relation to (iii) – per Beazley P, with whom Macfarlan JA agreed: (10) It does not follow from Williams v Commonwealth [2012] HCA 23; 248 CLR 156 that the mere participation of a State in proceedings raising questions of constitutional validity is sufficient to ground standing. [215]-[218] (Beazley P); [295] (Macfarlan JA) In relation to (iii) – per Basten JA: (11) The mere fact that a decision or law may have a physical or economic effect on a particular person does not mean that that person will have standing to challenge the decision or law. [290] (Basten JA) Re McBain; Ex parte Australian Catholic Bishops Conference [2002] HCA 16; 209 CLR 372; Alphapharm Pty Ltd v SmithKline Beecham (Aust) Pty Ltd (1994) 49 FCR 250; Right to Life Association (NSW) Inc v Secretary, Department of Human Services and Health (1995) 56 FCR 50 Judgment 1. BEAZLEY P: The appellants sought leave to appeal from the orders of Pembroke J made on 3 March 2015, dismissing proceedings brought by the Hoxton Park Residents Action Group Inc and an individual, Ms Marella Harris: Hoxton Park Residents Action Group Inc v Liverpool City Council [2015] NSWSC 136. This matter raises a matter of public importance and accordingly, leave, which was not opposed, should be granted. 2. The second respondent, Malek Fahd Islamic School Ltd (Malek Fahd), and the third respondent, the Australian Federation of Islamic Councils Inc (the AFIC) were jointly represented on the appeal. Liverpool City Council and the State of New South Wales (the State), the first and fourth respondents respectively, filed submitting appearances, although the fourth respondent was an active party in the court below. The fifth respondent, the Commonwealth, appeared both at first instance and on appeal. A reference to "the respondents" in these reasons is a reference to the active respondents only. Factual background 1. In the proceedings, the appellants claimed declaratory relief in respect of funding paid to Malek Fahd by the State, the source of the funds being moneys paid to the State by the Commonwealth. The relief sought by the appellants was in the following terms: "5. Declaration that the law of the Commonwealth and any declaration by and decision of the Minister thereof conferring power to approve funding of the project by payment of funds to or for the Second and/or Third Defendant for their purposes pursuant to any agreement or otherwise is void and of no effect. 6. Declaration that the Commonwealth law insofar as it provides for grants to the State of New South Wales on condition that the money so granted is paid by the State to Third Defendant to finance the project, including the erection of buildings therefore whether or not pursuant to agreement or otherwise between the Fifth and Fourth Defendants and between the said Defendants or either of them and the Second and Third Defendants is void and of no effect. Particulars of Statutes Schools Assistance Act 2008, Schools Assistance (Learning Together-Achievement Through Choice and Opportunity) Act 2004 as amended; Australian Education Act 2013 [Cth]; Appropriation Act 2008 to date. 7A. Declaration that Appendix F to the intergovernmental agreement on Federal Financial Relations and/or such informal agreement or arrangement between the Defendants and each of them with respect to the project is an unconstitutional agreement and is invalid and of no effect, or invalid and inoperative to the extent that it provides funds having the purpose or effect of a law prohibited in contravention of the Constitution section 116, and any part thereof." 1. The 'project' referred to in the claimed relief was the term used by the appellants in para (25) of their pleadings to encompass the purchase of land by the AFIC, the lease of that land to Malek Fahd, the construction on the land of substantial infrastructure "and the conduct of an establishment as and for the purpose of a place of worship … and for the purpose of a faith based educational facility". The project was pleaded to be part of a national network "of that and similar projects". Particulars of the "national network" referred to in para (25) were pleaded to include: "… 2 other campuses of [Malek Fahd and the AFIC] in NSW owned and administered by them since 1 January 2005 and campuses in other States and Territories." 1. Malek Fahd is a company limited by guarantee, which operates a school with multiple campuses, the Malek Fahd Islamic School (the School). The first campus opened in October 1989 at Greenacre. The Hoxton Park campus opened on 27 April 2011 and is located within the local government area of Liverpool City Council. 2. The Hoxton Park campus operates on land leased to Malek Fahd by the AFIC. There is a close relationship between those two entities. The Constitution of Malek Fahd prescribes for certain School board appointments and decisions to be made or approved by the AFIC, and for Malek Fahd's assets to vest in the AFIC in the event Malek Fahd is wound up. 3. The School has received Commonwealth funding throughout its operation, in particular, under the Schools Assistance Act 2008 (Cth) and the Australian Education Act 2013 (Cth). 4. The Schools Assistance Act was in operation between 2009 and 2013 and authorised the Commonwealth to provide financial assistance to the States for, or in connection with, non-government schools for recurrent expenditure, capital expenditure and targeted expenditure. The operation of the Schools Assistance Act with respect to recurrent expenditure was summarised by Pembroke J, at [28], as follows: "The operative scheme under the Schools Assistance Act was as follows: (a) funding by the Commonwealth for recurrent expenditure was paid to the State for provision to 'Approved Authorities' of non-government schools. The Approved Authority was required to administer the grant of recurrent expenditure; (b) a funding agreement with the Commonwealth governed the way in which the recurrent funding was to be administered by the Approved Authority. A payment could not be authorised for a school unless the Approved Authority for the school had made a funding agreement with the Commonwealth that complied with Part 3 Division 3 of the Act: Section 12(1); (c) the funding agreement required the Approved Authority to ensure that amounts received were spent for the purposes that were determined by the Minister and set out in the agreement: Section 16(1). The amount of funding that could be provided for recurrent expenditure was capped in accordance with the limits set in Part 4 of the Act." 1. Under the Schools Assistance Act, Malek Fahd was the Approved Authority for the School. A funding agreement was entered into between Malek Fahd as Approved Authority and the Commonwealth for the period 2009-2013 for the purposes of funding recurrent expenditure. Under the funding agreement, funding for recurrent expenditure could be applied for the purposes of paying teaching and ancillary staff salaries, for professional development of teachers and for maintenance and general operations. 2. Funding for the Hoxton Park campus was requested with effect from 27 April 2011. Although the Schools Assistance Act made provision for the funding of capital expenditure, his Honour held that the there was no such funding available to the Hoxton Park campus under those provisions. 3. From 1 January 2014, the Australian Education Act governed Commonwealth funding of the School. Under that Act, funding conditions are set out in the legislation itself rather than in individual funding agreements with Approved Authorities. Pembroke J described the operation of the legislative scheme as follows: "[34] As with the Schools Assistance Act, financial assistance is provided for 'approved authorities' for one or more schools. In the case of non-government schools, the approved authority is the body corporate which is approved by the Minister in respect of that school. A school is a 'participating school' if there is an approved authority in relation to one or more locations and the requisite level of education and the school is a non-government school. In the case of participating schools that are government schools, the approved authority is the relevant State or Territory. … [37] The Australian Education Act contains a transitional process. A body that was an approved authority for a non-government school under the Schools Assistance Act on 31 December 2013 is taken to be the approved authority for that school under the 2013 Act: Item 2(3) of Schedule 2 of the Australian Education (Consequential and Transitional Provisions) Act 2013. As at 31 December 2013 there were 828 approved authorities representing 2,727 non-government schools in Australia, of which 88.7% were considered to be affiliated with a religion. [38] Recurrent funding is provided under the Australian Education Act via the States and Territories: ss. 21, 23(2) and subject to a condition that the State or Territory must implement national policy initiatives for school education in accordance with the regulations: s. 22(1). All participating schools (ie including non-government schools with an approved authority) are entitled to receive recurrent funding as calculated in accordance with the Act. Part 3 of the 2013 Act contains provisions for calculating the amount of recurrent funding." 1. Pursuant to the relevant transitional provisions, Malek Fahd became an Approved Authority under the Australian Education Act from 1 January 2014. Pembroke J, at [42], recorded that Commonwealth funding for the School, including the Hoxton Park campus, had been made available under the Australian Education Act as follows: "(a) In late 2013 the system generated an estimate for the annual entitlement to recurrent funding for the second defendant of $17,663,122 (excl of GST). That is taken to be a decision of the Minister by virtue of s. 124(2). (b) On 7 January 2014 an amount was paid to the State for the second defendant comprising 50% of the estimated annual entitlement (ie $8,831,561 ex GST). (c) In June 2014 revisions were made to the estimate based on updated socio economic advantage data and language background data. A determination was made by the delegate of the Minister to vary the amount of the next two instalments. The Determination was made on 16 June 2014 under s. 25(1) of the AE Act. (d) On 7 July 2014 a further amount of $4,380,345 (ex GST) was paid to the State for the second defendant, bringing the amount paid to 75%. (e) In August 2014 the second defendant provided details of the number of students at each location on 'census day'. The information showed 11 teachers and 186 students at the Hoxton Park campus. (f) On 16 September 2014 there was a further revision of the annual estimate and change to planned payments using the new census data. The new annual estimate was $17,343,521 (ex GST). (g) On 7 October 2014 a third instalment of $4,109,341 was paid to the State. (h) On 16 October 2014 there was a final annual entitlement calculation, showing the final entitlement to be $17,589,958. That identified a shortfall in payment of $246,437. (i) On 7 November 2014 a final payment of $246,437 was made for 2014." 1. His Honour's summary of the provisions of the Act and its administration were not subject of challenge. 2. Malek Fahd's Constitution identifies as one of its objects the provision of "a balanced general education in an Islamic environment to Muslim and other children". Its Enrolment Policy includes as a criterion "[a] commitment from the family to support the School's Islamic ethos and values". However, there is no requirement for admission that its pupils be Muslim, although the School accepted that all of its pupils are Muslim. 3. The primary judge, at [5], observed that in New South Wales each school, whether religious or not, is required to implement a curriculum and adhere to a syllabus prescribed by the New South Wales Board of Studies, Teaching & Educational Standards (BOSTES). His Honour further noted, at [6], that the religious education at the school was consistent with the BOSTES requirements and that there was no additional religious education. A significant percentage of the teachers at the school were non-Muslim and it had a Catholic Executive Principal in 2013 and 2014. 4. Various practices of the Muslim faith are observed at the Hoxton Park campus. At first instance, the following facts were agreed and reduced to writing, which became Exhibit R, as to the religious practices conducted at the school: "1. Salaat [a form of prayer] is compulsory once each school day for pupils. 2. Wudu [cleansing religious ritual] is expected each school day. 3. Halal food [certified by [AFIC] or other Halal certification authorities for religious purposes] is available and/or sold at [the School's] tuckshops. 4. A head-cloth covering the hair as a mark of female distinction and modesty is compulsory for female students. 5. Religious studies in the Islamic faith are compulsory in primary schools. 6. At the mosque at Greenacre and in the primary school prayers halls, females are segregated from males. 1. It was also an agreed fact set out in Exhibit R that admission as a pupil to attend the school is governed by the terms of its Enrolment Policy. Issues on the appeal 1. The arguments advanced by the appellants were wide ranging, and adopted a sixfold classification of "errors", namely, the sectarian error; the motive error; the paternalism error; the characterisation error; the proof of purpose error; and the Constitutional writ error. The appellants' written submissions identified the grounds of appeal to which each "error" was said to relate. The "errors" overlapped: for example, ground 1 was identified with each of the alleged errors; grounds 2 and 3 were said to relate to the paternalism error, the proof of purpose error and the Constitutional writ error, and so forth. 2. Rather than adopt the appellants' classification of errors, I have considered that the preferable way to proceed is to identify the principal issues on the appeal by reference to the appeal grounds. The principal issues are as follows: 1. whether the Schools Assistance Act and the Australian Education Act are invalid because the States have exclusive power over matters of religion and education. This question raised the proper construction of s 96 of the Constitution (grounds 2, 6 and 7); 2. whether the Schools Assistance Act and the Australian Education Act are invalid because they contravene s 116 of the Constitution (grounds 1, 3, 4, 6; 8); 3. whether the appellants had standing to sue in respect of past allocations of funding (ground 9); 4. whether the primary judge erred in various findings of fact (ground 10); 5. whether the primary judge erred in failing to make findings in respect of certain matters (grounds 12 and 13); 6. whether the primary judge erred in refusing to admit certain evidence (ground 17). 1. The issues raised in grounds 5, 14, 15, 18 and 19 are also dealt with below. Grounds 11 and 16 were abandoned. 2. The appellants also sought, after the conclusion of the hearing of the appeal, to adduce fresh evidence said to relate to the provision of funding to the School and which had been the subject of newspaper reporting. For reasons given below, leave to adduce that evidence must be refused. Relevant Constitutional provisions 1. It is appropriate at the outset to set out the text of the relevant constitutional provisions. Sections 96 and 116 of the Constitution provide as follows: "96 Financial assistance to States … the Parliament may grant financial assistance to any State on such terms and conditions as the Parliament thinks fit. … 116 Commonwealth not to legislate in respect of religion The Commonwealth shall not make any law for establishing any religion, or for imposing any religious observance, or for prohibiting the free exercise of any religion, and no religious test shall be required as a qualification for any office or public trust under the Commonwealth." 1. The following provisions are also relevant: "51 Legislative powers of the Parliament The Parliament shall, subject to this Constitution, have power to make laws for the peace, order, and good government of the Commonwealth with respect to: … (xxxvi) matters in respect of which this Constitution makes provision until the Parliament otherwise provides; … (xxxix) matters incidental to the execution of any power vested by this Constitution in the Parliament or in either House thereof, or in the Government of the Commonwealth, or in the Federal Judicature, or in any department or officer of the Commonwealth." 1. Although not directly relevant to the issues, it is also convenient to set out the terms of s 51(xxxi), as that provision is discussed in certain of the authorities that are relevant and upon which the parties relied. That provision is in the following terms: "(xxxi) the acquisition of property on just terms from any State or person for any purpose in respect of which the Parliament has power to make laws …" The impugned legislation 1. Although the primary judge described the operation of the legislation, as set out above at [8] and [11], it is necessary to consider the provisions of the impugned legislation in some detail, so as to properly take account of the submissions advanced by the parties on the appeal. It is convenient to do so primarily by reference to the Australian Education Act and the Australian Education Regulation (the Regulation), being the Act and Regulation presently in force. 2. Under the Schools Assistance Act, funds were distributed in accordance with an agreement entered into between an Approved Authority and the relevant state. Malek Fahd was the Approved Authority for the School. Under the Australian Education Act, conditions for the grant of funds are contained in the legislation itself as is described more fully below. Pursuant to the transitional provisions, Malek Fahd became the Approved Authority for the receipt of funds under the Australian Education Act. It was not suggested that there was any provision of the earlier Schools Assistance Act which was different in a substantive way from the Australian Education Act and the Regulation, although, as the primary judge explained, the method of administration of the funding changed. 3. The Australian Education Act is "an Act in relation to school education and reforms relating to school education, and for related purposes". The Act commenced on 1 January 2014. Its objects, provided for by s 3, are as follows: "3 Objects of this Act (1) The objects of this Act are the following: (a) to ensure that the Australian schooling system provides a high quality and highly equitable education for all students by having regard to the following national targets: (i) for Australia to be placed, by 2025, in the top 5 highest performing countries based on the performance of school students in reading, mathematics and science; (ii) for the Australian schooling system to be considered a high quality and highly equitable schooling system by international standards by 2025; (iii) lift the Year 12 (or equivalent) or Certificate II attainment rate to 90% by 2015; (iv) lift the Year 12 (or equivalent) or Certificate III attainment rate to 90% by 2020; (v) at least halve the gap between Aboriginal and Torres Strait Islander students, and other students, in Year 12 or equivalent attainment rates by 2020 from the baseline in 2006; (vi) halve the gap between Aboriginal and Torres Strait Islander students, and other students, in reading, writing and numeracy by 2018 from the baseline in 2008; (b) to acknowledge the matters referred to in the Preamble; (c) to provide a needs‑based funding model for schools applied consistently across all schools which includes: (i) a base amount of funding for every student; and (ii) additional loadings for students and schools who need extra support; (d) to implement the National Plan for School Improvement. (2) The Commonwealth will work with the governments of the States and Territories, and non‑government education authorities, to implement the National Plan for School Improvement set out in the National Education Reform Agreement to meet the objects of this Act by addressing the reform directions set out in subsections (3) to (8)." 1. The Act also has the following objects: quality teaching: s 3(3); quality learning: s 3(4); empowered school leadership: s 3(5); transparency and accountability: s 3(6); data collection: s 3(7); meeting student needs: s 3(8). 2. As is immediately apparent from the stated objects of the Act, there is no reference to religion, nor could it be inferred from the text of the object provisions that there was any object or purpose of the Act concerning religion. The objects are all directed to the education of Australian children in what I will describe for convenience as the core secular disciplines of reading, mathematics, science, writing and numeracy. 3. Section 4, entitled "Guide to this Act", explains what the Act does, namely, make provision for Commonwealth financial assistance to schools under s 96 of the Constitution in the case of States, and s 122 in the case of Territories. The section further states that each school has an "approved authority". In the case of government schools, the approved authority is the State or Territory. For non-government schools, the approved authority is a body corporate approved by the Minister. 4. As s 4 further explains, financial assistance is provided directly to a State or Territory for its government schools and in the case of non-government schools, to the State or Territory which "must give it to the approved authority for the school". Section 4 also provides a "guide" in respect of recurrent funding and a statement that the Minister can determine other kinds of funding for any school under Pt 5. 5. The section also highlights the distinction between a "participating school" and a "non-participating school". Relevantly, a school is a "participating school" if there is an approved authority for the school and the approved authority is approved in relation to one or more locations of the school and a level of education provided by the school at any of those locations: s 6. 6. Section 15 makes provision for "levels of education" and specifies that the regulations may prescribe the level of education that constitutes primary or secondary education. 7. Part 2 of the Act makes provision for "Grants of financial assistance to states and territories". Section 21(a) provides that recurrent funding for a participating school is payable under Div 2 of Pt 3. Section 22 provides that payment of financial assistance under the Act is subject to the condition that the relevant State or Territory implement national policy initiatives for school education in accordance with the regulations. In a note to the section, the national policy initiatives are described as those agreed policy initiatives that States and Territories have responsibility for implementing for the school education system generally. 8. Section 23 makes provision for "conditions of financial assistance" and provides relevantly in s 23(1)(a) that recurrent funding for participating schools is subject to the conditions set out in s 23. Those conditions are described in the headings to subs (2) and (3) respectively as requiring the State or Territory to pay the funding to the approved authority for a school and to make the payment as soon as practicable after the amount is paid to the State or Territory. 9. Section 25 provides that the Minister is to determine the timing and amounts of recurrent funding. Section 26 provides for the Minister's determination of a State or Territory's total entitlement to funding. 10. Part 3 provides for recurrent funding for participating schools. Section 31 contains the Guide to the Part. The Guide states that: "Financial assistance for participating schools is payable by the Commonwealth each year, based on a formula in Division 2 of this Part." 1. It further states that all participating schools are entitled to a base amount and that there may be an entitlement to loadings. 2. The base amount for a school reflects the number of students at the school for the year, the schooling resource standard funding amount of the year for a student at the school and the capacity of the school's community to contribute financially to the school. 3. The loadings to which a school may be entitled relate to students with a disability, Aboriginal and Torres Strait Islander students, students with a low socio-economic status, students who have low English proficiency, schools that are not in major cities and schools that are not large schools. The dollar figure for these loadings is worked out in accordance with the formulae contained in Pt 3, Div 3. 4. Part 9, Div 4, s 126 states that the consolidated revenue fund is appropriated for the purposes of making payments of financial assistance under the Act in accordance with the determination made under the relevant provisions, in this case, s 25, in respect of recurrent funding. 5. Part 2 of the Regulation governs grants of financial assistance to States and Territories. Section 10 provides: "10 Conditions of financial assistance—implementing national policy initiatives relating to school education (1) This section sets out the national policy initiatives for school education that a State or Territory must implement for section 22 of the Act (whether or not the State or Territory is a participating State or Territory). (2) A State or Territory must do the following in relation to all students in all schools located in the State or Territory: (a) improve the provision of school education to meet nationally agreed outcomes, objectives and targets, including for students with particular needs; (b) implement policies and programs to ensure that all children are engaged in and benefit from schooling (including by supporting the most disadvantaged students agreed by the Ministerial Council); (c) implement policies and programs to support students to complete education to year 12 (or an equivalent level) and to achieve nationally agreed outcomes, objectives and targets; (d) take action to collect and provide data in relation to paragraphs (a) to (c) under nationally agreed performance reporting frameworks to allow governments to identify areas of need and direct resources accordingly. Note: The nationally agreed outcomes, objectives and targets are set out in the National Education Agreement which is set out in Schedule F to the Intergovernmental Agreement (within the meaning of section 4 of the Federal Financial Relations Act 2009). (3) A State or Territory must: (a) participate in the governance of, and provide financial and other support for, the national education institutions to progress the policy directions, and implement the national reforms, agreed by the Ministerial Council; and (b) provide effective regulatory oversight of all schools located in the State or Territory to ensure the quality and effectiveness of the provision of school education. Note: The national education institutions include ACARA, the Australian Institute for Teaching and School Leadership Ltd and Education Services Australia Ltd. (4) A State or Territory must continue efforts to improve the quality of teachers at schools located in the State or Territory: (a) having regard to nationally agreed professional standards for teachers; and (b) through initiatives agreed by the Ministerial Council for nationally consistent teacher registration and accrediting initial teacher education courses. (5) A State or Territory must: (a) implement the Aboriginal and Torres Strait Islander Education Action Plan 2010‑2014; and (b) develop and implement a new Aboriginal and Torres Strait Islander Education Action Plan to be in place after the Aboriginal and Torres Strait Islander Education Action Plan 2010‑2014 expires. Note: In 2013, the Aboriginal and Torres Strait Islander Education Action Plan 2010‑2014 was accessible at http://www.mceecdya.gov.au." 1. Part 5, Div 1 specifies the basic requirements for approved authorities. Division 2 deals with ongoing policy and funding requirements for authorities and bodies and includes provisions as to recurrent funding for approved authorities. Proper construction and application of s 96 1. The appellants challenged the funding provided to Malek Fahd and to its Hoxton Park campus through the statutory and agreement based grants as constitutionally invalid on the basis that the States have exclusive power over matters of religion and education. Reasons of the primary judge 1. The primary judge, at [45], held that the impugned legislation was within the scope of the Commonwealth's power to provide grants to the State under s 96 of the Constitution and that there was no support in the Constitution or in the case law for the appellants' contentions of invalidity. His Honour rejected the appellants' argument as contrary to accepted authority as to the scope of Commonwealth power under s 96: see Attorney-General (Vic); Ex rel Black v Commonwealth [1981] HCA 2; 146 CLR 559 at 659, 660. 2. His Honour stated, at [46], that the absence of a head of power in s 51 relating to religion or education was beside the point. In his Honour's view, the validity of the legislation was supported by s 96 in combination with ss 51(xxxvi) and 51(xxxix) of the Constitution. His Honour observed that under those provisions, the Commonwealth may enact laws that provide for the payment of grants to States on specified conditions and, provided that the conditions do not contravene an express or implied limitation on Commonwealth power, there is no limit on the subject matter or type of conditions that may be imposed. 3. In this regard, his Honour observed that in ICM Agriculture Pty Ltd v The Commonwealth [2009] HCA 51; 240 CLR 140, French CJ, Gummow and Crennan JJ at [35] and [46], and Heydon J (dissenting) at [174] and [222], held that s 51(xxxvi) is a relevant source of legislative power in association with s 96 grants. This was so, in his Honour's view, at [47], even if the grant concerned a matter in respect of which the Commonwealth had no specific legislative power under s 51: see ICM Agriculture per French CJ, Gummow and Crennan JJ at [34]; Ex rel Black at 592 per Gibbs J, 619 per Mason J and 649-650, 660 per Wilson J. 4. His Honour further observed, at [48], that there was no constitutional defect in the Commonwealth making a grant of funds to a state on condition that the funds be distributed to a third party: Victoria v Commonwealth ("Second Uniform Tax case") [1957] HCA 54; 99 CLR 575 at 605, 607. Appellants' submissions 1. The appellants complained that his Honour erroneously referred to their argument as being limited to the construction of s 51, and failed to deal with their argument that the funding power in s 96 could not be used to replace the exercise of State power within the States' exclusive sphere of legislative power and administrative functions. The appellants submitted that a constitutional power could not be used indirectly to achieve an object that would be impermissible directly: P J Magennis Pty Ltd v Commonwealth [1949] HCA 66; 80 CLR 382; Bank of NSW v Commonwealth ("Bank Nationalisation case") [1948] HCA 7; 76 CLR 1. 2. The appellants sought to demonstrate this proposition by positing the circumstance of the Commonwealth itself building schools and imposing conditions on their operation, as they contended the AFIC had done in respect of the Hoxton Park campus, or alternatively, by building a network of schools such as the AFIC had done. The appellants also submitted that the Commonwealth was "fully aware" that funds were being used for unconstitutional purposes. Respondents' submissions 1. The respondents submitted that his Honour's reasoning on this issue was correct and reflected long standing authority, to which he had correctly referred. Consideration 1. There was no error in his Honour's determination that the funding to the State under the legislation was constitutionally valid. The question of funding of schools, including those conducted by non-government entities with a religious affiliation, by the provision of financial assistance pursuant to s 96 was the subject of determination by the High Court in Ex rel Black. That case concerned funding to non-government schools conducted by religious bodies, in large part by the Catholic Church or its agencies: see Barwick CJ at 575-576. 2. Gibbs J, at 593, commented upon the operation of s 96 as follows: "… ss 96 and 116 should be read together, the result being that the Commonwealth has power to grant financial assistance to any State on such terms and conditions as the Parliament thinks fit, provided that a law passed for that purpose does not contravene s 116." 1. Mason J, at 618-619, dealt with the construction and operation of s 96 in the following terms: "The plaintiffs submit that the statutory provisions travel beyond the authority which s. 96 confers by depriving the States of any choice or freedom of action in relation to the moneys provided, other than the freedom to accept or reject the grant. When States accept the grant on the terms set out in the legislation they are obliged by those terms to pay money to schools and school authorities nominated by the Commonwealth and to enter into agreements the terms of which are fixed by the Commonwealth. As Wilson J. observes, the conditions attached to the grant require the school or school authority to account to the Commonwealth for moneys spent and to provide statistical information to the Commonwealth. But the course of judicial decision in this Court establishes that the Commonwealth may condition its grant under s. 96 so as to make the State a conduit pipe in channelling the fund to the intended recipient. As early as 1926, in Victoria v. The Commonwealth [1926] HCA 48; (1926) 38 CLR 399, the Federal Aid Roads Act 1926 was upheld, notwithstanding that it bound the State to apply money to an object selected by the Commonwealth, that the object was outside Commonwealth legislative power and that the amount of the payments was to be fixed by a Commonwealth Minister. Subsequently, in South Australia v. The Commonwealth (the first Uniform Tax Case) [1942] HCA 14; (1942) 65 CLR 373, the Commonwealth legislation introducing uniform taxation was upheld. A central element in that legislation was a provision in the States Grants (Income Tax Reimbursement) Act 1942 (s. 4) which provided for the giving of financial assistance to a State on condition that the State did not impose a tax on incomes in the relevant financial year. Latham C.J., Rich, McTiernan and Williams JJ. (Starke J. dissenting) held that the Act was not directed towards destroying or weakening the constitutional functions or capacities of the States and was therefore not invalid on that ground. The Court drew a distinction between a law which offers an inducement to a State not to exercise its powers and a law which creates or attempts to create a legal compulsion to do so (1942) 65 CLR, at pp 417, 464. Later, in Victoria v. The Commonwealth (the second Uniform Tax Case) [1957] HCA 54; (1957) 99 CLR 575, Dixon C.J., who had not participated in the first Uniform Tax Case, though suggesting that there was support for a more limited construction of s. 96, went on to say, 'the course of judicial decision has put any such limited interpretation of s. 96 out of consideration' (1957) 99 CLR, at p 609." (emphasis added) 1. Wilson J was of the same view. As his Honour stated, at 650: "The salient feature, for present purposes, of a s. 96 law is that through the exercise of the power to impose conditions to a grant of financial assistance the Commonwealth Parliament may pursue a particular purpose." 1. His Honour further explained, at 659-660: "It is a non-coercive law which in terms grants money to each of the States 'by way of financial assistance to the State'. The freedom of each State to decide whether to accept or reject the grant, however restricted it may be in a political sense, is legally fundamental to the validity of the scheme, and its existence as a matter of law cannot be denied. The conditions attaching to the grant are those to be determined by the Commonwealth, but this has always been so. It is not necessary that the grant should benefit the State Treasury directly, or that the purpose of the grant should be within the express legislative power of the Commonwealth, or that the State should be the instigator or even a party to the initiation of the scheme." 1. This construction of s 96, its scope and operation was reaffirmed in ICM Agriculture v The Commonwealth. That case concerned State legislation under which certain water entitlements under pre-existing legislation were reduced. The State offered compensation, which, it was alleged, had it concerned an acquisition under Commonwealth legislation, would not have constituted compensation on "just terms" within the meaning of s 51(xxxi). Notwithstanding that the water entitlements were granted under State legislation, the appellants relied upon funding arrangements between the Commonwealth and the State pursuant to s 96 of the Constitution in order to argue that any compensation paid by the State was required to be on just terms. 2. Insofar as is relevant to this case, French CJ, Gummow and Crennan JJ accepted, at [43], that s 51(xxxi) was a constitutional safeguard and had assumed the status of a constitutional guarantee. Their Honours noted at [45]: "… passages in the reasons of several members of the Court in Attorney-General (Vic); Ex rel Black v The Commonwealth, respecting the relationship between s 96 and the guarantee or prohibition provided by s 116 with respect to matters of religion, suggest that s 96 and s 51(xxxi) also should be read together." 1. Their Honours observed that Wilson J, at 650 in Ex rel Black, considered that P J Magennis v Commonwealth remained a persuasive analogy in respect of ss 96 and 116. Their Honours in ICM then referred with approval to the passage of Gibbs J set out above at [53]. Their Honours, at [46], held that the legislative power of the Commonwealth conferred by ss 96 and 51(xxxvi) did not extend to the grant of financial assistance to a State on terms and conditions requiring the State to acquire property on other than just terms. However, their Honours rejected the plaintiffs' case that the reduction in their water licences constituted an acquisition of property. 2. The reference by their Honours to P J Magennis v Commonwealth should be explained. In that case a law that approved an agreement between the Commonwealth and the State relating to war service land settlement was held to be invalid on the basis that the acquisition of land at a value determined at a date some years earlier involved an acquisition of property on other than just terms contrary to s 51(xxxi). Latham CJ, at 403, dismissed an argument that the law was valid based on s 96 as "giving financial assistance to States [and] therefore not a law with respect to the acquisition of property". It was this statement that Wilson J considered persuasive in Ex rel Black. 3. The effect, then, of the authorities in respect of s 96, so far as is relevant here, is that the Commonwealth cannot provide financial assistance to the States if to do so would be contrary to another provision of the Constitution. It is in this sense that it can be said that s 96 is to be read with other provisions of the Constitution under consideration in a particular case, relevantly here, s 116. However, subject to that qualification and the consideration of the appellants' s 116 arguments below, the Commonwealth may provide financial assistance to the States under s 96, notwithstanding that the object of the funding falls outside Commonwealth legislative power. The appellants' argument to the contrary must be rejected. Section 116 of the Constitution: preliminary matters 1. The question raised by the appellants was whether the fact that under the legislation funds are provided to a school which identifies itself as an Islamic school offends the first, second or third limb of s 116. Before turning to the operation and application of each of those limbs of s 116, it is necessary to consider a number of preliminary issues as to the proper construction and operation of s 116, and "constitutional guarantees" more generally. Submissions of the appellants 1. An initial point advanced by the appellants in support of their challenge to his Honour's reasoning in respect of s 116 was that, in accordance with modern Australian constitutional jurisprudence, s 116 is a "constitutional guarantee", as opposed to a mere fetter on power, and is thus to be construed liberally. They contended that the test for establishing a religion and its application required review. On this argument, on a liberal construction of s 116, the legislation offended one or more of the first three limbs of s 116. 2. The appellants contended that in approaching the construction of a constitutional provision it was permissible to refer to the constitutional debates, an approach that had been rejected in Ex rel Black but which is now permissible: see Cole v Whitfield [1988] HCA 18; 165 CLR 360. The appellants also submitted that the primary judge ought to have had regard to the jurisprudence of the United States Supreme Court on the establishment clause contained in the First Amendment to the Constitution of the United States. 3. The appellants contended that US authorities on the First Amendment, upon which they had relied at first instance but to which the primary judge failed to refer, supported a less restrictive interpretation of s 116. In particular, they submitted that there was a preparedness in the US cases to have regard to the effect and operation of a legislative or executive measure when considering the validity of that measure. 4. The appellants contended that the same approach should be taken to s 116 and that any Commonwealth involvement in faith-based establishment transgresses the principles stated in Lemon v Kurtzman 403 US 602 (1971). The appellants also submitted that the difference in language between the US and Australian provisions was not sufficient to make this approach impermissible. 5. The consequence for which the appellants contended was that, on the proper construction of s 116, regard was to be had to the end, object, result or effect of the legislation and that the legislation here under challenge was unconstitutional as offending one or more of the first three limbs of s 116. The appellants also sought to distinguish Ex rel Black on the basis that there had been no submission in that case that the effect of the funding was to establish a particular religion as distinct from a particular denomination in Australia. Submissions of the respondents 1. In addressing the appellants' arguments in respect of each limb of s 116, the Commonwealth advanced a number of submissions as to the proper construction of that section. In doing so, it contended that the appellants' submissions "openly invite the Court to abandon High Court authority". It was further submitted by the Commonwealth that the approach contended for by the appellants, including the reliance on US jurisprudence, was contrary to the text of s 116 and the reasoning of the High Court in Ex rel Black. 2. The Commonwealth also emphasised that, having regard both to the text of s 116 and High Court authority, invalidity requires that a "constitutionally impermissible end" be the object of the law. That is, the Commonwealth submitted that the purpose of the law in question was the sole criterion selected by s 116 for invalidity. The Commonwealth submitted that s 116 was directed to the making of laws and not their administration, and that it is "doubtful" whether s 116 operates as a constraint on the executive in administering Commonwealth laws. In any event, the Commonwealth contended there was no impermissible purpose even in the administration of the relevant funding regime. Section 116 as a "constitutional guarantee" 1. The appellants sought to support their submission that s 116 was a "constitutional guarantee" by reference to various observations of the High Court concerning constitutional guarantees, including those of French CJ, Gummow and Crennan JJ in ICM Agriculture v Commonwealth at [43]; French CJ in JT International SA v Commonwealth [2012] HCA 43; 250 CLR 1 at [41]; and Kirby J in Smith v ANL Ltd [2000] HCA 58; 204 CLR 493 at [74]. 2. A review of the authorities reveals that the High Court has referred to provisions of the Constitution as "guarantees" in at least two senses: one where the guarantee constitutes a fetter on power, and the other where the guarantee gives rise to a personal right. Section 51(xxxi) has been held to fall into the first category: see JT International SA v Commonwealth at [41]; Smith v ANL Ltd at [74]. Sections 80, 92 and 117 have been said to fall into the second: see, for example, Cole v Whitfield at 393; Street v Queensland Bar Association [1989] HCA 53; 168 CLR 461 at 485; AMS v AIF [1999] HCA 26; 199 CLR 160 at 177; Cheng v R [2000] HCA 53; 203 CLR 248 at 278-279. 3. It is convenient first to deal with the authorities upon which the appellant relied. ICM Agriculture v Commonwealth has been discussed above at [57] ff. The observation upon which the appellants placed particular reliance in support of the submission presently under consideration was the reference in that case at [45] to "the guarantee or prohibition provided by s 116 with respect to matters of religion" (emphasis added). That comment was made in the context of adopting the view that s 51(xxxi), like s 116, should be read together with s 96. Their Honours did not engage in any elaboration or exposition of their reason for stating that s 116 was, inter alia, a "constitutional guarantee", but the use of the phrase in combination with s 116 being referred to alternatively as a prohibition suggests that their Honours were characterising s 116 in the first of the senses referred to above. 4. JT International SA v Commonwealth was also concerned with the acquisition of property on just terms. In that context, French CJ, at [41], referred to s 51(xxxi) as embodying a "constitutional guarantee" of just terms and observed that it "is to be given the liberal construction appropriate to such a constitutional provision". There was no reference to s 116 in that case. 5. In Smith v ANL Ltd, Kirby J referred to s 51(xxxi) as a "constitutional guarantee", but one which operated as a limitation on power. As his Honour explained, at [74]: "That guarantee exists in the form of a limitation on what would otherwise be the extensive power which the Parliament would enjoy to enact a law postulated to be 'for any purpose in respect of which the Parliament has power to make laws'. Because of its object and function, the constitutional provision must not be given a pedantic, rigid, or narrow construction but one broad and ample such as befits the achievement of its objective." 1. Aside from the cases on which the appellants placed particular reliance, there are references to "constitutional guarantees" in other High Court authorities. In Adelaide Company of Jehovah's Witnesses Incorporated v Commonwealth [1943] HCA 12; 67 CLR 116, Latham CJ described s 116 as containing a "guarantee", although it is apparent that the Chief Justice did so on the basis that the provision operated as a limitation on government action. As his Honour observed, at 132, "[t]hat guarantee is intended to limit the sphere of action of the legislature". In the same case, Starke J, at 154, spoke of "the provision for religious liberty or freedom protected and guaranteed by the Constitution". 2. Stephen J in Ex rel Black distinguished s 116 from a constitutional guarantee of personal rights in terms that made it clear that his Honour considered s 116 to operate as a fetter on Commonwealth power. His Honour stated, at 605: "Some things about the section are self-evident. It is not, in form, a constitutional guarantee of the rights of individuals … Section 116 … takes the form of express restriction upon the exercise of Commonwealth legislative power." (emphasis added) 1. In Church of the New Faith v Commissioner of Pay-Roll Tax (Vic) [1983] HCA 40; 154 CLR 120, Mason ACJ and Brennan J, at 130, described s 116, in obiter, as containing a "guarantee of religious freedom". In the same case, Wilson and Deane JJ, at 173, referred to s 116 in the sense of "a constitutional guarantee against the establishment of a religion" (emphasis added). 2. In R v Winneke; Ex parte Gallagher [1982] HCA 77; 152 CLR 211 Murphy J, in his dissenting judgment, at 228, stated that "[s 116] is a broad guarantee that the Commonwealth shall not make any law impairing freedom of religion or freedom from religion". Importantly to the challenge made by the appellants, his Honour observed, in considering the taking of oaths under the Royal Commissions Act, that no Commonwealth law could impair that freedom. In Leeth v Commonwealth [1992] HCA 29; 174 CLR 455, Deane and Toohey JJ, at 487, referred to the "no religious test" limb in terms of a "guarantee that no religious test shall be required as a qualification for any office or public trust under the Commonwealth". 3. In Kruger v Commonwealth [1997] HCA 27; 190 CLR 1, which primarily concerned the free exercise limb of s 116, Gaudron J described s 116 as a "limited guarantee" in the sense of a fetter on power. As her Honour observed at 124-125: "By its terms, s 116 does no more than effect a restriction or limitation on the legislative power of the Commonwealth. It is not, 'in form, a constitutional guarantee of the rights of individuals'. It does not bind the States: they are completely free to enact laws imposing religious observances, prohibiting the free exercise of religion or otherwise intruding into the area which s 116 denies to the Commonwealth. It makes no sense to speak of a constitutional right to religious freedom in a context in which the Constitution clearly postulates that the States may enact laws in derogation of that right." (emphasis added) 1. Accordingly, when a provision such as s 116 is described as a constitutional guarantee, as the appellants sought to characterise it, it is necessary to understand the sense in which it may be so characterised. The appellants' characterisation has been stated in the broad, without any analysis of the nature of the guarantee or what it is that is said to be guaranteed. To the extent that s 116 has been described as a constitutional guarantee in the authorities upon which the appellants relied, it has been so described either in discussion at a high level of abstraction or on an expressed understanding that it operates as a fetter on legislative power. As this review of the case law demonstrates, the three limbs of s 116 upon which the appellants relied, are properly understood as guarantees in the sense of being restrictions on legislative power. The construction of "constitutional guarantees" 1. As with any question of construction, it is necessary to commence with the relevant basal principles. In Bank of NSW v Commonwealth [1948] HCA 7; 76 CLR 1, which concerned the acquisition of property on just terms, Dixon J, at 332, referred to the general principles of constitutional interpretation, the foundation of which were stated by Higgins J in Attorney-General for New South Wales v Brewery Employees Union of New South Wales [1908] HCA 94; 6 CLR 469, at 611-612, which his Honour quoted as follows: "… 'although we are to interpret the words of the Constitution on the same principles of interpretation as we apply to any ordinary law, these very principles of interpretation compel us to take into account the nature and scope of the Act that we are interpreting - to remember that it is a Constitution, a mechanism under which laws are to be made, and not a mere Act which declares what the law is to be.' His Honour proceeds to quote from Story, Commentaries, 2nd ed., s. 455: 'While, then, we may well resort to the meaning of single words to assist our inquiries, we should never forget, that it is an instrument of government that we are to construe' (1908) 6 CLR, at p 612." 1. His Honour also observed, at 349: "… when a constitution undertakes to forbid or restrain some legislative course, there can be no prohibition to which it is more proper to apply the principle embodied in the maxim quando aliquid prohibetur, prohibetur et omne per quod devenitur ad illud. ['when anything is prohibited, every means by which the thing may be accomplished is also prohibited']. In requiring just terms s. 51 (xxxi.) fetters the legislative power by forbidding laws with respect to acquisition on any terms that are not just." 1. It may be accepted that where a provision, such as s 51(xxxi) of the Constitution, has the status of a "constitutional guarantee" it will be given a liberal construction: Clunies-Ross v Commonwealth [1984] HCA 65; 155 CLR 193 at 201-202; New South Wales v The Commonwealth ("Work Choices Case") [2006] HCA 52; 229 CLR 1 at [501]. Thus, it has been said that a constitutional guarantee is not to be construed so as to prefer form over substance, nor "'pedantically' so that they may be circumvented by legislative provisions which purport to do indirectly what cannot be done directly": Kruger per Gaudron J at 131. 2. In a similar vein, Mason CJ, Deane and Gaudron JJ commented in Georgiadis v Australian & Overseas Telecommunications Corporation [1994] HCA 6; 179 CLR 297 at 305, importantly not only in respect of guarantees but also for constitutional prohibitions: "It is often said in relation to constitutional guarantees and prohibitions that 'you cannot do indirectly what you are forbidden to do directly'. That maxim is, in fact, an important guide to construction, indicating that guarantees and prohibitions are concerned with substance not form." (footnote omitted) 1. Their Honours' observation reflects the basic principles of constitutional interpretation referred to by Dixon J referred to above. See also Mutual Pools & Staff Pty Ltd v Commonwealth [1994] HCA 9; 179 CLR 155 at 169; Street v Queensland Bar Association at 485-486; JT International at [169]; ICM Agriculture v Commonwealth at [185]-[186]. 2. There is nothing in these principles of construction, however, that permits the construction of a constitutional provision other than in accordance with its terms. To put the matter simplistically, a "black cat" cannot become a "white cat" by the application of a liberal approach to construction. As Barwick CJ commented in Ex rel Black, at 577, the "simple and direct English" meaning of the words prevails and, as was explained by Gibbs J, at 603, in respect of s 116, a liberal construction "would not justify giving the words of the establishment clause an expanded meaning which they do not naturally bear". Rather, it remained "necessary to determine the meaning of the words of s 116 themselves". 3. In further support of their argument, the appellants also referred to the approach to construction of legislation in the context of the implied freedom of communication. In particular, the appellants referred to the first limb of the test of constitutional validity, namely, "does the law effectively burden 'freedom of communication' about government or political matters either in its terms, operation or effect?": See Lange v Australian Broadcasting Corporation ("Political Free Speech case") [1997] HCA 25; 189 CLR 520 at 567. In my opinion, construction in the context of the implied constitutional freedom does not assist in the construction of s 116, either as a constitutional guarantee or as a restriction on power. The relevant principles of construction are those discussed above. 4. As I have already indicated, the three limbs of s 116 that are in issue, albeit recognised as constitutional guarantees, are cast in the form of a fetter on Commonwealth legislative power. On a proper construction, the Commonwealth cannot enact legislation that indirectly does that which cannot be done directly. However, before determining whether the two Acts in question in this case contravene that principle, it is necessary, by the application of the principles of construction discussed, to construe each of the three limbs of s 116, viz "establishing any religion", "imposing religious observance" and "prohibiting the free exercise of religion". Before doing so, it is convenient to consider the reliance placed by the appellants on the American authorities and to refer to the appellants' reliance on the constitutional debates. Recourse to jurisprudence on the First Amendment to the United States Constitution 1. The appellants contended that US authorities on the First Amendment to the US Constitution support a less restrictive interpretation of s 116 and evince a willingness to have regard to the effect and operation of a legislative or executive measure when considering the validity of that measure. 2. The First Amendment to the Constitution of the United States of America is in the following terms: "Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances." 1. The so-called 'Lemon test' for the constitutional validity of a provision, was stated by Burger CJ in Lemon v Kurtzman at 612-613: "Every analysis in this area must begin with consideration of the cumulative criteria developed by the Court over many years. Three such tests may be gleaned from our cases. First, the statute must have a secular legislative purpose; second, its principal or primary effect must be one that neither advances nor inhibits religion; finally, the statute must not foster 'an excessive government entanglement with religion'." 1. In response to the argument in Lemon v Kurtzman that the legislation in question fostered an excessive entanglement of church and state, Burger CJ pointed out, at 616-617, that not all funding of faith-based schools will infringe the establishment clause: "Our decisions from Everson to Allen have permitted the States to provide church-related schools with secular, neutral, or nonideological services, facilities, or materials. Bus transportation, school lunches, public health services, and secular textbooks supplied in common to all students were not thought to offend the Establishment Clause." 1. More recently in Zelman v Simmons-Harris 536 U.S. 639 (2002), the Supreme Court of the United States upheld an Ohio school assistance program giving tuition aid to struggling Cleveland families, even though 82 per cent of the participating private schools had a religious affiliation. The Court stressed the importance of individual choice, the aid having been given to families directly, and that the underlying assistance program was neutral with respect to religion. 2. It is important, at the outset of any consideration of comparative jurisprudence, to identify any textual differences in the legislation in the respective jurisdictions. Thus, s 116 relevantly provides that "the Commonwealth shall not make any law for" each of the purposes identified in the first, second and third limb, that is, "for establishing any religion", "for imposing any religious observance", or "for prohibiting the free exercise of any religion". 3. In Ex rel Black, Barwick CJ, in considering the First Amendment and s 116, observed, at 579, that divergence between the two provisions was apparent from the use of the word "respecting" in the American text and the word "for" in s 116. The Chief Justice further observed that "what the former may fairly embrace, quite clearly the latter cannot" and that was so: "… even without placing critical significance on the purposive nature of the Australian expression and the lack of such an element in the American text." 1. Consistent with its text, s 116 has been interpreted as being directed to the purpose of the legislation and as only being infringed where religious establishment, or another prohibited purpose, is the object of the law: see Barwick CJ at 579. It followed, in the Chief Justice's view, that the establishment of religion had to be the sole object of an impugned provision for it to offend the first limb of s 116. 2. On the other hand, the establishment clause of the First Amendment is directed at laws respecting an establishment of religion. Arguably, this difference in language is one source of the breadth of the US jurisprudence on the establishment clause. As Burger CJ noted in Lemon v Kurtzman at 612: "A law may be one 'respecting' the forbidden objective while falling short of its total realization. A law 'respecting' the proscribed result, that is, the establishment of religion, is not always easily identifiable as one violative of the Clause. A given law might not establish a state religion, but nevertheless be one 'respecting' that end in the sense of being a step that could lead to such establishment, and hence offend the First Amendment." 1. The appellants contended that for the Commonwealth to be involved in funding "any such faith based establishment", that being a reference to the School as what the appellants termed a "faith based educational establishment", transgressed the three principles in Lemon v Kurtzman. I do not accept this submission. As I understand it, the jurisprudence of the United States Supreme Court on the establishment clause of the First Amendment does permit funding of faith-based education in some circumstances, as the passage cited above at [92] makes clear. Recourse to the Constitutional Debates 1. The appellants contended that notwithstanding the view of Barwick CJ in Ex rel Black, at 578 that it was not appropriate to seek to construe the provisions of the Constitution by reference to the constitutional debates, the High Court has subsequently altered its view on the appropriateness of recourse to the constitutional debates: see, for example, Cole v Whitfield at 385-392. 2. Accepting that to be so, the appellants did not refer the Court to any aspect of the Convention debates that was relevant to the construction of s 116 or to the present case. In my view, it is inappropriate for the Court to embark upon an examination of the debates without being directed to specific aspects of the debates and without any adequate submission explaining the import of the debates to the issue. The s 116 inquiry: the relevance of administration, operation and effect 1. Underpinning the appellants' submissions was the stance that the Court should have regard to the effect and operation of legislative and executive measures when considering their validity under s 116. In this regard, the appellants placed particular reliance on the US authorities, and recourse to "terms, operation or effect" in the context of the implied freedom of political communication. 2. As is evident from the analysis above, the approach contended for by the appellants is not permitted on existing High Court authority. However, given the prominence of this view in the appellants' submissions, it is appropriate to make some further brief observations on the position urged by the appellants on the Court. In Ex rel Black, Barwick CJ observed, at 580-581, that s 116 is "directed to the making of law. It is not dealing with the administration of a law". The Chief Justice accordingly noted, at 581, that the validity of a law is to be assessed by reference to "the time of its making, of its passage by the Parliament". In Kruger, Gaudron J observed, at 132, "purpose must be taken into account ... it is the only matter to be taken into account in determining whether a law infringes s 116". 3. Likewise, as McKerracher J recently observed in Cheedy on behalf of the Yindjibarndi People v State of Western Australia [2010] FCA 690 at [83], and as cited by the primary judge, s 116 is "directed to the making of Commonwealth laws, not with their administration or with executive acts done pursuant to those laws". 4. It may be acknowledged that Barwick CJ envisaged some limited relevance of the manner of a law's administration to the question of constitutional validity. Thus, his Honour observed, at 581, that: "… if that administration is within the ambit of the authority conferred by the statute, and does amount to the establishment of a religion, the statute which supports it will most probably be a statute for establishing a religion and therefore void as offending s.116." 1. In this regard, the appellants submitted that it is erroneous to treat the effect of a law as irrelevant to proof of its purpose. The acceptance of that limited proposition does not advance the appellants' case. At all times, the relevant inquiry is as to the purpose of the law in question. Any limited scope for recourse to effect does not shift the relevant inquiry from the purpose of the law to the conduct or purpose of those persons who may happen to receive funding pursuant to the law in question. Effect will only be relevant insofar as it is evident at the time of enactment, and insofar as can be discerned within the four corners of the law in question. So much is clear from the immediate context of the remarks of Barwick CJ extracted above. The Chief Justice observed: "… if that administration is within the ambit of the authority conferred by the statute, and does amount to the establishment of a religion, the statute which supports it will most probably be a statute for establishing a religion and therefore void as offending s.116. That is so, not because of the manner of the administration but because the statute, properly construed, authorizes it. I say most probably, because the purposive content of the expression "for establishing" must, in any case, be satisfied. The time at which to determine vis a' vis s. 116 the validity of a law is therefore the time of its making, of its passage by the Parliament. As I have said, it will be tested against the situation of law and fact current at the time of its enactment. It must then be judged for what in that situation it does and what upon its reasonable construction it authorizes. The manner of its administration can have no independent effect. What may lawfully be done in its administration forms part of the consideration of the validity of its enactment: and what can be lawfully done is determined by the construction of the statute, the determination of its meaning and its operation." (emphasis added) 1. Insofar as the appellants' submissions call for any broader inquiry as to the administration of funding under the impugned Acts, such recourse is inconsistent with High Court authority and contrary to the text of s 116 which is framed in terms of purpose. As Gaudron J remarked in Kruger at 132, "purpose is the criterion and the sole criterion selected by s 116 for invalidity". Whether the impugned legislation contravenes s 116: the establishment clause 1. The primary judge, at [51], observed that the appellants, in seeking to impugn the Schools Assistance Act and the Australian Education Act, and the executive decisions and actions made pursuant to them, relied on the first three limbs of s 116 of the Constitution. It is convenient to commence with consideration of the appellants' arguments in reliance on the establishment clause of s 116, namely, that the impugned legislation and funding are invalid as "establishing any religion". 2. As is immediately apparent from the stated objects of the Australian Education Act, there is no reference to religion, nor could it be inferred from the text of the object provisions that there was any object or purpose of the Act to establish any religion. The objects are all directed to the education of Australian children in the core secular disciplines of reading, mathematics, science, writing and numeracy. In this light, it will be necessary to consider in detail the manner in which the appellants sought to propound the Act's invalidity. Reasons of the primary judge 1. His Honour, at [54], considered that the approach of the majority in Ex rel Black was fatal to the appellants' challenge to the Schools Assistance Act and the Australian Education Act based upon the 'establishment clause' of s 116. In his Honour's opinion, there was: "... nothing in the body or intended operation of either Act to suggest that they were made 'for' establishing any religion. As with the legislation considered in Black, described by Wilson J at 656, the Schools Assistance Act and the Australian Education Act reflect a secular legislative purpose, namely supporting, funding and upgrading the quality of education in non-government schools. Religion or religious affiliation is not a criterion that attracts funding under either Act." 1. His Honour stated, at [55], that the "purpose and character" of the legislation could not be ascertained by reference to the character of the particular institutions that obtained funding under those laws. Further, his Honour observed that the evidence did not support the contention of the appellants that religion, or any of the characteristics of the school, played any part in the decision to provide funding to it. 2. His Honour, at [56], was also of the opinion that the appellants' argument in relation to the first limb of s 116 involved an erroneous approach to the concept of "establishment" within the meaning of s 116, in that the appellants had not demonstrated that the object or effect of the legislation or any executive act of the Commonwealth pursuant to the legislation had the object or effect of "establishing" the religion in the sense described in Ex rel Black. His Honour concluded: "56 … The relevant laws do not have the purpose or effect of making the Islamic religion a state religion having an institutional status or otherwise conferring upon Islam any particular status, let alone an official status in preference to other religions. 57 The fact that the Schools Assistance Act and the Australian Education Act are neutral on the question of religion is sufficient to dispose of the allegation that they are laws for establishing the religion of Islam. A law for 'establishing' a religion must, by definition, be a law for establishing one particular religion: Black at 598-599 per Gibbs J. The establishment clause in Section 116 reflects a concern with the establishment of one religion as against others: Black at 615 per Mason J (Aickin J agreeing at 635; see also Wilson J at 653). A law that could be said to benefit indiscriminately any number of religions indirectly through assistance to educational institutions which have religious affiliations, cannot meaningfully be said to 'establish' any or all of those religions." 1. His Honour rejected the view that there was any support for the appellants' case in the observation of Basten JA in Hoxton Park Residents Action Group Inc v Liverpool City Council (No 2) [2011] NSWCA 363, 256 FLR 156 at [28] and [34]-[35] that Ex rel Black may be distinguishable. 2. His Honour, at [64], also rejected the appellants' argument in relation to the invalidity of the executive acts of the Commonwealth in providing funding. His Honour observed that s 116 imposed a constraint on legislative power and that it was dealing with the making of laws, not with their administration: Ex rel Black per Barwick CJ at 580-581. 3. His Honour also rejected an argument that the funding provided under the Acts was ultra vires as achieving a constitutionally impermissible purpose. His Honour concluded, at [66], that the appellants had not identified any basis for doubting that the funding provided in respect of the Hoxton Park campus was funding within the terms and purposes of the legislation. His Honour stated that the funding was for recurrent expenditure on the terms and conditions specified in the Funding Agreements and Administrative Guidelines. The relevant authorities 1. The first limb of s 116 states that "The Commonwealth shall not make any law for establishing any religion". The leading authority in respect of the first limb of s 116 is the decision in Ex rel Black in which a challenge was made to the Commonwealth funding of non-government schools, including: "… such schools as are owned and conducted by bodies professing and practising the Christian religion, albeit according to the doctrines of a particular church …" where the financial aid was expressly limited to the educational facilities of those schools. In the course of determining the validity of the legislation under which that funding was provided, each of the members of the Court described what it meant for there to be the establishment of a religion. 1. Barwick CJ, at 580-581, pointed out that s 116 was "directed to the making of law … not … the administration of a law". The validity of a law was thus to be tested at the time of its making. His Honour recognised that if the administration of the impugned law was within the ambit of the authority conferred by statute and amounted to the establishment of a religion, it could be void as offending s 116. The Chief Justice then stated, at 582: "… establishing a religion involves the entrenchment of a religion as a feature of and identified with the body politic, in this instance, the Commonwealth. It involves the identification of the religion with the civil authority so as to involve the citizen in a duty to maintain it and the obligation of, in this case, the Commonwealth to patronize, protect and promote the established religion. In other words, establishing a religion involves its adoption as an institution of the Commonwealth … … what s. 116 forbids is the passage of a law which will erect a religion into such a relationship to the body politic of the Commonwealth ..." (emphases added) 1. Barwick CJ, at 583, considered whether a law that provided for funding of a non-government school would offend the first limb of s 116 where, for example, funds were applied to a building which was on occasions used for activities connected with the religion. His Honour reasoned as follows: "I cannot think that it can rationally be said that by not preventing such a use of the occasion or buildings which I have assumed, the law providing the funds for the forwarding of the education of Australians by non-government schools is a law for establishing a Christian religion. A law which in operation may indirectly enable a church to further the practice of religion is a long way away from a law to establish religion as that language properly understood would require it to be if the law were to be in breach of s.116. It would not be enough that the law allowed such activity on the part of the owners of the schools. The law must be a law for it, i.e. intended and designed to set up the religion as an institution of the Commonwealth." (emphasis added) 1. Gibbs J, at 595-597, undertook an insightful and interesting review of the possible meanings of "establishment" in s 116. His Honour identified four possible meanings of the word "establish" when used in relation to religion. On his Honour's analysis, the relevant meaning of "establish" in this case, as in Ex rel Black, is, "as it was in 1900, to constitute a particular religion or religious body as a state religion or state church". 2. Stephen J accepted that the establishment clause was linked to the provision in the First Amendment, but nonetheless stated, at 610: "… even if the framers of our Constitution had seen fit to adopt verbatim the terms of the First Amendment, they would have been doing no more than writing into our Constitution what was then believed to be a prohibition against two things, the setting up of a national church and the favouring of one church over another. They would not have been denying power to grant non-discriminatory financial aid to churches or church schools." 1. Stephen J, although not using the language of a constitutional guarantee, considered, at 610, that the first limb of s 116 provided an important safeguard in respect of religious freedom: "… at least so far as that freedom might otherwise be in jeopardy from laws of the Commonwealth. It does so by prohibiting three avenues of possible legislative encroachment upon that freedom – the elevation of one church above all others, the imposing of particular religious observances and the proscribing of any religious worship." 1. Mason J, at 616, stated that the establishment of religion meant "the authoritative establishment or recognition by the State of a religion or church as a national institution". In his Honour's view, the provision of financial aid to churches generally, and particularly when the aid was genuinely linked to expenditure on education, fell short of establishing a religion in the sense proscribed by s 116. 2. Wilson J rejected the view that the first limb of s 116 bore the same meaning as the First Amendment clause. In his Honour's view, at 653: "I accept that the word 'establishment' has no fixed connotation, but having regard to the other clauses which are contained in s. 116, and to the precise manner of their expression, I infer a legislative intent to adopt a narrow notion of establishment, namely, that which requires statutory recognition of a religion as a national institution. The precise status, responsibility and privileges that attend such establishment may vary a good deal, and it is not necessary to consider its features in detail; the point to be made is that establishment involves the deliberate selection of one to be preferred from among others, resulting in a reciprocal relationship between church and state which confers and imposes rights and duties upon both parties. The nature of the responsibility of the state towards an established church is clearly exposed in the judgments of their Lordships in the House of Lords' decision in General Assembly of Free Church of Scotland v. Lord Overtoun (1904) AC 515 where the basic principle of 'establishment' is asserted as 'the right and duty of the civil magistrate to maintain and support an establishment of religion in accordance with God's Word' (1904) AC, at pp 646, 656, 677. It identifies a relationship which goes much deeper than financial assistance, whether casual or regular, from time to time, because it is expressive of a duty to maintain and support, or, in other words, a duty to 'promote religion' as embodied in the doctrine and standards of the Church (1904) AC, at p 694. Conversely, correlative to the right in the church to the protection and patronage of the state, the church is under a duty to pray for the civil magistrate and faithfully to conform to the church's doctrine and standards." 1. His Honour further stated, at 654-655: "I have already adverted to the other clauses contained in s. 116 as lending support for a narrow construction of the establishment provision, but the observation may deserve further brief explication. If the first clause is to be read, as the plaintiffs contend, as requiring the erection of 'a wall of separation' between the church and the state, then it is difficult to see what room is left for the operation of the following clauses. The Commonwealth must not make any law for imposing any religious observance, but clearly such a law would offend the separationist principle. The same would be true of a law for prohibiting the free exercise of any religion, for one could hardly find a more glaring example of state interference in the religious realm. Again, the imposition of a religious test as a qualification for any office or public trust under the Commonwealth is clearly inconsistent with a prohibition of state involvement with religion. In other words, if the contention of the plaintiffs is correct, the first clause more than covers the entire field to which the section refers, leaving nothing to be contributed by the remaining clauses. If such a result reflected the intended operation of the section, then in my opinion it would have been expressed, as it easily could have been, and was in the Tasmanian amendment which was rejected, in clear and unmistakable terms. On the other hand, if the establishment clause carries the meaning that I have given it, each of the following clauses has a distinct, intelligible and consistent area of operation." Disposition 1. I have set out passages of their Honours' reasoning in Ex rel Black in some detail so as to ensure that the meaning of the establishment clause, as determined by the High Court, is fully apparent to any reader of this judgment. As their Honour's reasons in that case make strikingly apparent, there is no basis upon which the legislation under challenge in this case could be held to infringe the first limb of s 116. 2. There is no reference whatsoever in the terms of the Australian Education Act and the Regulation to religion in general or any particular religion. There is no reference to the promotion of a religion, to the teaching of a religion, or to the recognition of a religion. Importantly, there is no provision directed, intended or designed to set up the Islamic religion "as an institution of the Commonwealth" per Barwick CJ at 582-583; "setting up … a national church" or "favouring … one church over another" per Stephen J at 610; or recognising a church "as a national institution" per Mason J at 616. There is no "reciprocal relationship" between the Commonwealth and the Islamic religion: per Wilson J at 653. 3. Rather, the impugned Acts provide for the expenditure of Commonwealth funds for educational purposes, including by provision to schools that require of their students the observance of religious practices whilst those children are at school. This does not serve to create a reciprocal relationship with the Commonwealth. Indeed, Ex rel Black is authority that the Commonwealth may provide support, including financial support, to such entities. To explicate upon the matter further would simply be to reiterate in my own words the various statements made by the High Court to the effect that such payments are permissible in the sense of not being contrary to the first limb of s 116. Having set out the relevant passages above, it is not necessary to do so. 4. Finally, there is no basis upon which to distinguish Ex rel Black on the basis that there had been no submission in that case that the effect of the funding was to establish a particular religion as distinct from a particular denomination in Australia. This submission was not supported by any ground of appeal. Ground 6 of the appeal was confined to a contention that the primary judge erred in his interpretation and application of Ex rel Black. Nonetheless, I would reject the argument. 5. As I have already explained, the question in Ex rel Black was whether the impugned legislation, which made provision for the funding of non-government schools, infringed s 116. That is the same issue that arises in this case, although challenged through the prism of a school that practices, or observes the Islamic faith. There is no relevant point of distinction between the issue in this case as compared to Ex rel Black. Whether the impugned legislation contravenes s 116: religious observance Submissions 1. His Honour also rejected the appellants' submissions in relation to the second limb of s 116. His Honour, at [67], stated that even accepting the premise of the appellants' argument at its highest, namely, even if either Malek Fahd or the Hoxton Park campus imposed religious observance on those who attended the School, that did not establish that the legislation had the prohibited purpose or object of imposing religious observance. In his Honour's opinion, neither Act had the purpose or effect of requiring any person to attend the School or the Hoxton Park campus, or to engage in any religious observance or practice. Nor, in his Honour's opinion, at [68], did the funding have the purpose or effect of requiring any person to attend the School, or the Hoxton Park campus or to engage in any religious observance or practice. 2. The appellants contended that the Schools Assistance Act and the Australian Education Act contravened of s 116 on the basis that they constitute laws for imposing religious observance. The appellants contended that the religious practices of the school outlined at [16] above constitute "significant religious restrictions imposed on every pupil attending the School, whether they are religious by inclination or not". The appellants stressed that the respondents admitted, and the primary judge found, that the School requires religious observance by pupils during school hours. The crux of the appellants' submissions in this context was that, by virtue of the required observances at the Hoxton Park campus of the School it could be said that there was an imposing of religious observance. 3. The Commonwealth contended that the primary judge had correctly held that neither the Schools Assistance Act nor the Australian Education Act operated to impose religious observance on any person. The Commonwealth stressed that, on the law as expounded in Ex rel Black and in Kruger, a law will only be contrary to the s 116 prohibitions where it "has as its purpose, end or object (or has as one of its purposes, ends or objects …) one that is prohibited by s 116". The Commonwealth rejected the view that funding under the relevant Acts, and the Acts themselves, could have the prohibited purpose by virtue of the fact that funding was provided to the School and the School required its pupils to undertake certain religious observances. Consideration & disposition 1. For the reasons that follow, the primary judge did not fall into error and the appellants' submissions must be rejected. Notwithstanding the dearth of authority on this limb of s 116, as explained above and as correctly identified by the Commonwealth and the primary judge, s 116 is fundamentally concerned with legislative power, and more specifically, with proscribing the exercise of legislative power for particular purposes. The authorities of the High Court in relation to laws for establishing religion and for prohibiting free exercise are to the same effect: to be invalid on the basis of contravening s 116, the legislation in question must be a law for a prohibited purpose or object. This was clearly explained by Gaudron J in Kruger at 132: "In Adelaide Company of Jehovah's Witnesses Inc, Latham CJ observed in relation to s 116 that '[t]he word 'for' shows that the purpose of the legislation in question may properly be taken into account in determining whether or not it is a law of the prohibited character.' In my view, that is not entirely accurate. The use of the word 'for' indicates that purpose is the criterion and the sole criterion selected by s 116 for invalidity. Thus, purpose must be taken into account. Further, it is the only matter to be taken into account in determining whether a law infringes s 116." (emphasis added) 1. That pupils at the School are required to comply with certain religious observances may be accepted. However, as the primary judge correctly observed, at [67]: "Neither Act has the purpose or effect of requiring any person to attend the School or its Hoxton Park campus or to engage in any religious observance or practice" 1. Nor, as the primary judge also correctly noted, at [68]: "… has any of the funding provided … had the purpose or effect of requiring any person to attend the School or its Hoxton Park campus or to engage in any religious observance or practice." 1. There is no basis for either Act to be characterised as a law for imposing religious observance. Each Act made provision for Commonwealth funding of education, by means of state-mediated grants, subject to certain safeguards and requirements. Funding under the Acts was not limited to religious schools. Even in allowing for the funding of religious schools, the purpose of the Acts, both in their objects and in their specific provisions, was the funding of education and not the imposition of any religious observances incidental to the religious character of a recipient school. As the authorities clearly state, it is the purpose of the legislation to which regard must be had: see in particular the passages in Kruger to which reference was made above at [132]. On this basis, neither Act, nor the funding thereunder, is invalid as being a law for imposing religious observance. Whether the impugned legislation contravenes s 116: free exercise Reasoning of primary judge 1. His Honour, at [69], held that a law contravenes the third limb of s 116 only if made with the end, object or purpose of prohibiting the free exercise of religion: Kruger per Brennan CJ at 40; Toohey J at 86; Gaudron J at 132; and Gummow J at 160. His Honour referred to the statement of Gaudron J, at 132, that "purpose is the criterion and the sole criterion selected by s 116 for invalidity". His Honour, at [70], stated that it is not sufficient for a law to have the effect of impairing the free exercise of religion: see Toohey J in Kruger at 86. 2. His Honour, at [71], also expressed his opinion that there was no provision of the Schools Assistance Act that had: "… the end, object or even effect (noting that the effect of a law can be no more than a step in the inquiry for the purposes of Section 116) of prohibiting the free exercise of religion." 1. His Honour considered, at [72]: "The Schools Assistance Act and the Australian Education Act lack the relevant characteristic of having as one of their purposes, ends or objects the prohibition of the free exercise of religion." 1. His Honour observed, at [73], that to say that "certain religious practices" were prohibited at the School did not demonstrate that the legislation or any act of the Commonwealth pursuant to the legislation had "the unconstitutional purpose of prohibiting the free exercise of religion". 2. His Honour concluded: "74 On the plaintiffs' case, the Schools Assistance Act and the Australian Education Act are laws that facilitate the provision of Commonwealth funding to a school which imposes restrictions on religious activities at the school. However, it is not enough to characterise the 'project' or the School or the Hoxton Park campus as being a consequence of the Commonwealth funding, and seize upon one alleged aspect of the operation of the School itself. There is no basis for a contention that either the provisions of the Schools Assistance Act, or the Australian Education Act or the terms of Commonwealth funding, impose any legal prohibition on the carrying out of religious activities. Nor is it suggested that any provision of the laws in question, or any term or condition of the Commonwealth funding, has any connection to, or gives any legal force to, those characteristics which are said to constitute a prohibition against the free exercise of religion. 75 In the circumstances, even if there did exist some restriction or prohibition on religious activities at the School, it would not be a restriction or prohibition whose legal force arises expressly or impliedly from Commonwealth law or from the actions of the Commonwealth in providing funding for the School or its Hoxton Park campus. No law or action by the Commonwealth operates to compel any person to attend the School or its Hoxton Park campus. Even if there were such a restriction or prohibition, it would not provide a sound basis for the argument that the third limb of Section 116 has been contravened." 1. His Honour rejected, at [76], the contention that funding had been provided for capital works contrary to the Schools Assistance Act or s 116 of the Constitution. His Honour further observed that "the hypothesised funding is not funding for a constitutionally impermissible purpose, for the reasons already explained". 2. The appellants challenged the Schools Assistance Act and the Australian Education Act on the basis that each was a law prohibiting the free exercise of religion. In their written submissions, the appellants posed the question: "Can it be consistent with the free exercise of religion to require every pupil in a public funded faith based educational establishment to submit to the regime of a particular religion[?]" 1. The appellants contended that the answer must be "no". The appellants placed particular reliance on the following remarks of Gibbs J in Ex rel Black at 593: "I consider that the Parliament, acting under s. 96, cannot pass a law which conflicts with s. 116. To take an unlikely example, an Act which granted money to a State on condition that the State would prohibit entirely the exercise of a particular religion would, in my opinion, be a law for prohibiting the free exercise of that religion, and would be invalid." 1. The Commonwealth submitted that a law will only contravene the free exercise limb of s 116 if it is made with the end, object or purpose of prohibiting the free exercise of religion: see Ex rel Black at 583; Kruger at 132. The Commonwealth submitted that the appellants had failed to identify any feature of the Schools Assistance Act or the Australian Education Act which suggested either law had the requisite impermissible purpose, object or end. The Commonwealth further submitted that there was nothing in either Act in the nature of a legal prohibition on the free exercise of religion, and that the appellants erroneously fastened upon what the School requires of its students. Consideration & disposition 1. The primary judge was correct to conclude that neither the Schools Assistance Act nor the Australian Education Act constitutes a law for prohibiting the free exercise of religion. The authorities are clear that for a law to be held invalid as offending s 116, its purpose must be to achieve an object which is proscribed by s 116: Kruger per Brennan CJ at 40. 2. In Krygger v Williams [1912] HCA 65; 15 CLR 366, the High Court dismissed a challenge to provisions of the Defence Act, which provided for compulsory military training, on the basis that the Act constituted a law for prohibiting the free exercise of religion. Griffith CJ dismissed the constitutional challenge in the following terms, at 369: "Sec. 116 of the Constitution provides that 'the Commonwealth shall not make any law for ... prohibiting the free exercise of any religion' – that is, prohibiting the practice of religion – the doing of acts which are done in the practise of religion. To require a man to do a thing which has nothing at all to do with religion is not prohibiting him from a free exercise of religion. It may be that a law requiring a man to do an act which his religion forbids would be objectionable on moral grounds, but it does not come within the prohibition of sec. 116, and the justification for a refusal to obey a law of that kind must be found elsewhere. The constitutional objection entirely fails." Barton J expressed the following views at 372-373: "As to the constitutional objection, the Defence Act is not a law prohibiting the free exercise of the appellant's religion, nor is there any attempt to show anything so absurd as that the appellant could not exercise his religion freely if he did the necessary drill. I think this objection is as thin as anything of the kind that has come before us." 1. The free exercise limb of s 116 was also considered in Kruger. The same point was made as I have already emphasised. Brennan CJ noted, at 40, that "[t]o attract invalidity under s 116, a law must have the purpose of achieving an object which s 116 forbids". Toohey J made the following comments at 86: "Section 116 'is directed to the making of law. It is not dealing with the administration of a law'. The use of the word 'for' indicates that 'the purpose of the legislation in question may properly be taken into account in determining whether or not it is a law of the prohibited character'. 'Purpose' in this context 'refers to an end or object which legislation may serve ... it is the Court which must decide whether the measure possesses the requisite character'. It does not follow that there is only one purpose to be discerned in a law; there may be more than one." 1. Gaudron J observed, at 132, that: "The use of the word 'for' indicates that purpose is the criterion and the sole criterion selected by s 116 for invalidity. Thus, purpose must be taken into account. Further, it is the only matter to be taken into account in determining whether a law infringes s 116." 1. Likewise, Gummow J observed, at 160: "The use of the preposition 'for' in the expression in s 116 of the Constitution 'for prohibiting the free exercise of any religion' directs attention to the objective or purpose of the law in issue. The question becomes whether the Commonwealth has made a law in order to prohibit the free exercise of any religion, as the end to be achieved. 'Purpose' refers not to underlying motive but to the end or object the legislation serves." 1. The appellants' arguments in this regard must also be rejected. The appellants sought to characterise the requirements that the School imposed on its students as "religious restrictions imposed on every pupil attending the School, whether they are religious by inclination or not". That, however, is no basis for characterising either Act as a law for prohibiting the free exercise of any religion. As the authorities clearly state, it is the purpose of the legislation to which regard must be had: see in particular the passages in Kruger to which reference was made above at [132]. Nothing in either Act operates to compel any person to attend the School or its Hoxton Park campus, nor evinces a legislative purpose concerned with prohibiting the free exercise of religion. Conclusions on Constitutional issues 1. As the authorities to which I have referred make clear, ss 116 and 96 are to be read in combination: Ex rel Black at 592 per Gibbs J. In this regard, the observation of Barwick CJ in Ex rel Black at 576, that s 116 applies to all laws of the Parliament and in that regard there was no basis for excluding an Appropriation Act or an Act granting money to a State pursuant to s 96, is relevant. The principle, which is considered in detail above, was stated succinctly by Gibbs J at 593 as follows, "the Parliament, acting under s. 96, cannot pass a law which conflicts with s. 116". 2. Thus, on ordinary principles of statutory construction, and should resort need to be had to it, the principle of construction that a prohibition should be read so as to prevent being done indirectly that which cannot be done directly, the provision of financial assistance to a State pursuant to a grant made under s 96 on condition that the recipient State prohibit the free exercise of religion would be invalid as a contravention of s 116. However, the Schools Assistance Act and the Australian Education Act do not contravene the principle to which Gibbs J referred. Neither Act contains any express or implied prohibition on the free exercise of religion in general, or on any religion in particular. 3. The Acts authorise the funding of education and prescribe the criteria and mechanisms whereby that is to be done. There are conditions imposed on the provision of funding and means whereby funding may be recovered from a particular school if the conditions of a grant of funds are not complied with. No provision of the Act or the Regulations deals with or governs the establishment, the observance, or the exercise of religion. Nor is any such implication to be found in the legislation. 4. The fact that the School imposes various religious observances on those students whose parents have exercised a choice to send them to a school which engages in such observances, does not mean that the Acts are laws that have any of the prohibited purposes contained in s 116. As the Commonwealth pointed out, there is no law or action on the part of the Commonwealth which establishes any religion or church as a national institution, compels any person to attend the school and conduct any religious observances, or compels any person to exercise a religion that is not their own or refrain from the exercise of the religion that is their own. Other challenges to the primary judge's determination: factual issues 1. In light of the above determination as to the validity of the Acts, many of the factual issues raised by the appellants do not strictly fall for determination. This is so because the entire thrust of the appellants' case was that the constitutional question was to be determined by reference to the effect of the legislation, in particular by reference to the administration of the Acts and the use of funds by Malek Fahd. I have rejected the appellants' argument that s 116, on its proper construction, is to be so interpreted. Nonetheless, I will refer briefly to the other grounds of appeal in deference to the importance this matter has to the appellants. Challenge to factual findings: ground 10 1. The appellant contended that the primary judge erred in making the following factual findings: (1) The Hoxton Park works had been completed: at [10]; (2) The appellants had (sic) and have not standing to sue in respect of past impermissible and unlawful expenditures and in failing to have regard to works affecting adversely the property rights of the appellants and/or Malek Fahd and in failing to admit evidence in that regard: at [77]; (3) GST was not included in sums paid by the Commonwealth to Malek Fahd when the true position according to the evidence was that funds were claimed and paid to include GST and were then used by Malek Fahd for the religious purpose of Malek Fahd; (4) In the findings made as to the quantum of amounts paid to Malek Fahd and the years of payment: at [6] and [42]; (5) In finding that no funds were paid by the Commonwealth for capital expenditure and that no funds were used for that purpose when moneys were paid by the Commonwealth and used for the purposes of the project, and in failing to find that in excess of $5 million was paid to Malek Fahd expressly for capital purposes at its main campus; (6) There was no exclusivity of religion or religious observances at the School; (7) That Dr Refaat El Hajje was a disgruntled person, without hearing from him; (8) That Malek Fahd and the AFIC's evidence from Mr Barrett was not open to criticism and that the findings at [18]-[25] are not contentious; and (9) That there was no religious purpose in the provision of the educational services by Malek Fahd and the AFIC: at [60]-[62]. 1. Integral to the question whether a primary judge has erred in making a finding of fact is whether the finding, if made, formed an essential part of the judge's reasoning, or whether it should have done so. Procedural rules are also engaged when findings of fact are challenged. Thus the Uniform Civil Procedure Rules 2005 (NSW) (UCPR), r 51.36(2) provides: "(2) Submissions raising any challenges to findings of fact must include a statement in narrative form (not exceeding 2 pages) at the end of the submission setting out only the following: (a) the findings challenged and supporting references to the judgment of the court below, (b) the findings contended for and supporting references to the transcript and other evidence in the court below." 1. The appellants' narrative of facts did not comply with UCPR, r 51.36(2), being a 10 page document containing further submissions and extensive reference to case law. The rules were amended in 2015 in order to address the practice of the profession in using r 51.36(2) in its previous form in order to make further extensive legal submissions: see, for example, Insurance Australia Ltd v Checchia [2010] NSWCA 193. This practice was of little utility in relation to the challenge of factual findings on appeal, the court often finding little assistance in additional lengthy legal argument. 2. The appellants' failure to observe the provisions of the amended rule has caused the Court some difficulty in dealing with the appellants' case. On the one hand, the Court is required to deal with the arguments raised. On the other hand, the rules of court are directed to ensuring that the proper issues are brought before the court in a comprehensible manner, so that the Court is able to determine the matter in accordance with the requirements of the Civil Procedure Act, s 56. 3. In the circumstances, and in order to deal with this aspect of the appellants' case, the best way forward is to refer to the findings of fact that the appellants contended ought to have been made. As the rules make apparent, the findings of fact, if found to be erroneous, will only be relevant to the extent that there are facts that the appellants establish ought to have been made. To put the matter concisely, facts are only relevant if they go to an issue on the appeal. 4. The appellants contended that the following findings ought to have been made: * Each of the second and third respondents are religious institutions conducted for religious purposes; * The Islamic religion has by reason of the laws and their administration in the present case become identified with the Commonwealth, the civic authority funding the second and third respondent's activities; * The law in question is for establishing a religion, namely, the Islamic religion in Hoxton Park, which did not hitherto exist and which had the effect or purpose of recognising together with other similar projects in Australia or alone a particular religion as a national institution; * The law is for imposing religious observances, in that the School at each location imposes, directly or indirectly, on any child or person attending the facility, of whatever background, the regular religious observance of the said faith including the saying of prayers, liturgy, and the wearing of clothes and livery of a particular kind associated with the religion; * The law is for prohibiting the free exercise of religion, in that the project prohibits, restricts or excludes the free exercise of other religions and faiths and/or no religion at the said institution or facility within Hoxton Park; * That the appellants have standing to sue in respect of all issues in the further amended statement of claim and not just matters related to future funding. 1. Leaving aside the question whether these findings are 'facts' in the relevant sense, the following observations are immediately apparent. 2. First, the challenges referred to in paras (1), (3), (4), (5) and (7) of [150] do not coincide with any 'finding' that the appellants contend ought to be made. It is also not apparent that his Honour made the finding in respect of Dr El Hajje as alleged by the appellants in para (7). The alleged error in finding that no funds were paid for capital expenditure asserted in para (5) is dealt with further below. 3. Secondly, it is of no assistance to the Court to assert that the primary judge erred in characterising certain facts as not contentious unless the challenged finding is met by the identification of a factual finding supported by evidence that it is contended ought to have been made. Thus, the challenge raised in para (8) is not particularised in any way that facilitates or even permits appellate review. In any event, it is difficult to see that the matters about which complaint was made, particularly matters in [18]-[25] of the primary judge's reasons, are other than factual matters taken from evidence before the Court. The Court was not directed to any specific error in any of the facts found in those paragraphs. 4. Thirdly, the assertion that the primary judge erred in his view that there was no justification to criticise the second and third respondents for not calling witnesses other than Mr Barrett must be rejected. His Honour's statement in relation to Mr Barrett was a finding as to the reliability of a witness. The Court was not directed to any evidence or other basis upon which it could be said that his Honour erred in this assessment: see generally the principles stated in Fox v Percy [2003] HCA 22; 214 CLR 118. 5. Fourthly, the challenges raised in paras (6) and (9) do not accurately reflect what his Honour reasoned or found and appear to be inferences that the appellants sought to draw from a collocation of different facts and matters. It can be said in respect of these two challenges, however, that the facts established that the School operates as a faith-based school, that its current enrolment is of Muslim children only and that the delivery of education in the school includes various faith-based observances. There was nothing in his Honour's reasons to the contrary of these facts. 6. Finally, the challenge raised in para (2) is a legal question depending upon the facts that are established. Additional matters: capital expenditure 1. The primary judge found, at [76] of the primary judgment, that no funds had been provided "for the Hoxton Park campus under the Schools Assistance Act for the purpose of capital works". 2. The Commonwealth submitted that the primary judge had correctly found that there was no factual basis for the contention that funds had been provided for capital works in respect of the Hoxton Park campus. It was submitted that the appellants had not advanced any submissions to the contrary on the appeal. In oral argument, counsel for the second and third Respondents advanced the proposition that there was no evidence or submissions on this issue, and accordingly no case to answer. 3. By ground 10(g) of their notice of appeal, the appellants contended that the primary judge erred in finding that no funds were paid by the Commonwealth for capital expenditure and that no funds out of the moneys paid by the Commonwealth were used for capital expenditure. The appellants also contended that the primary judge erred in failing to find that over $5 million was paid for Malek Fahd expressly for capital purposes at its main campus. 4. In oral argument, counsel for the appellants pointed to the 2013 Malek Fahd annual report as demonstrating that "the vast bulk of the income, both recurrent and capital, was sourced from the Commonwealth public funds, 1% from the State, 24% from fees". Counsel for the appellants also referred to the McGrath Nichol Report as supporting the contention that "public funds were used apparently with the authority of the Commonwealth to assist in the building up of [a] national institution". In particular, the appellants placed reliance on the view expressed in the McGrath Nichol Report that rent was paid by Malek Fahd to AFIC in advance and in excess of market rate, to support the contention that funds were used "to expand the national network". The relevant passages of the report are as follows: "5.1.1.4 Rent in advance … The MFISL Board minutes of 30 March 2008 record that 'Br Ikebal explained that he had already signed the contract for the Hoxton Park Property [for AFIC]. The Board resolved that it would pay AFIC a rent of $1.3 million plus GST per annum in advance for a period of five years from 1 January 2008 top enable AFIC to purchase the property at 612 Hoxton Park Road, Hoxton Park'. 5.1.2.3 Payment of rent in advance The 2010 financial statements state that rent for the Hoxton Park property had been paid in advance until September 2013. The school provided us with an invoice dated 23 October 2008 for $2,750,000 and a bank statement showing that a cheque for that amount was banked on 30 October 2008, confirming that Hoxton Park rent has been prepaid until September 2013. However, we note that the prepaid amounts do not include any CPI increases and provisions for increases due to market reviews. As such, there is a risk that AFIC may request MFISL to make payments in the future to cover CPI and market review increases." 1. The appellants have not demonstrated error in the primary judge's finding that no funds out of the moneys paid by the Commonwealth pursuant to or under the impugned Acts were used for capital expenditure. Nor have the appellants demonstrated error in the primary judge failing to find that funds were paid by the Commonwealth for capital expenditure. 2. The appellants' reliance on the 2013 Malek Fahd annual report was entirely misplaced. The annual report identified the following sources of income: 1. Commonwealth Recurrent Grant: 75 per cent 2. Fees, Excursions and Other Charges: 24 per cent 3. Other State Grants: 1 per cent 4. Other Private Income: 0 per cent 5. Other Capital Income: 0 per cent 1. The annual report then identified sources of expenditure, including a capital expenditure of 0 per cent. There is nothing in this information which supports either of the errors alleged by the appellants. 2. Even if the views expressed in the McGrath Nichol report were taken at face value, and as demonstrating that Malek Fahd had paid rent in advance and in excess of market value for the purpose of allowing AFIC to acquire the Hoxton Park land, that does not reveal any error in the finding of the primary judge that no funds had been provided "for the Hoxton Park campus under the Schools Assistance Act for the purpose of capital works". 3. As I have sought to make clear elsewhere in these reasons, the effect or usage of the impugned funding regime is not the relevant inquiry in examining the appellants' constitutional challenge. If, in fact, funds have been misused or misapplied, that is a matter for the parties to resolve in the manner prescribed in the funding agreements or legislation, or otherwise by agreement. Misuse of funds says nothing about the logically anterior question of constitutional validity, which is to be examined by reference to the purpose of the relevant enabling legislation. Whether his Honour should have made findings in respect of the issues identified in ground 12 of the notice of appeal 1. This ground can also be disposed of briefly. The matters in respect of which the appellants asserted his Honour should have made findings were as follows: (a) Funds advanced by the fifth respondent to the second respondent were paid by it to the third respondent in the years 2004 to 2014 for the purpose of establishing a religion; (b) The object or purpose or role or conduct of the AFIC; (c) The failure of the second and third respondents to call the School's accountant, the Hoxton Park project manager, the head of the boards of the AFIC and the School (the same person) and the person swearing the defences of the second and third respondents. 1. As to para (a), the appellants adduced evidence in the form of a report, dated 8 December 2011 by McGrath Nicol, who conducted a forensic audit of the School for the Department of Education, Employment and Workplace Relations relating to the period 2008 to 2011. In summary, the report recorded that the School was a recipient of recurrent funding paid by the Commonwealth through the New South Wales Treasury. The report found that: "1.1.1 Commonwealth recurrent funding For the years 2008 to 2010, eligible expenses exceeded the Commonwealth recurrent funding received by MFISL. Therefore, it appears that MFISL expended its recurrent funding in accordance with the funding agreement and SA Act in the years 2008, 2009, and 2010. 1.1.2 Total government recurrent funding (including NSW government funding) For the years 2008 and 2009, eligible expenses after expenditure of Commonwealth recurrent funds exceeded the NSW recurrent funding received by MFISL. For the year 2010, there is a surplus of NSW government recurrent funding. However, as discussed in detail in Section 6.1.2, it appears reasonable that an amount equivalent to this deficit has been expended appropriately. Therefore, it appears that MFISL expended its total government recurrent funds on eligible expenses." 1. The report further stated: "Our analysis did not identify instances where MFISL had transferred surpluses to AFIC or any other party." 1. However, the report also stated: "In our analysis, we have identified a number of examples where payments made by MFISL to AFIC: + do not appear to be for market value; and/or + where MFISL has not demonstrated value-for-money." 1. The report confirmed that Malek Fahd paid the AFIC for services rendered and that there was a question as to whether those services were appropriately costed. However, the report also confirmed that the services provided were appropriate and not in breach of Malek Fahd's funding agreement with the State. Accordingly, a finding on the issue raised in para (a) was not relevant to the questions in issue. 2. The report was not restricted to the Hoxton Park campus. Even assuming there was evidence to support this point, it suffers from the same defect as the other factual matters that the appellants either challenge or assert. As his Honour found, and as a review and analysis of the authorities clearly establishes, the constitutional challenges raised by the appellants are not answered by considering the effect or usage of the impugned funding regime. If, in fact, funds have been used other than in accordance with the legislation and funding agreements, that is a matter for the parties to the agreement to resolve in the manner prescribed in the Agreements or legislation of otherwise by agreement. Misuse of funds says nothing about the logically anterior question of constitutional validity. 3. As to para (b), his Honour made a finding as to the objects of the AFIC at [18] of the primary judgment. The appellants did not specify what findings ought to have been made. See also the observations made as to this paragraph above. 4. As to the complaint in para (c) of [177] above, his Honour dealt with this criticism. The appellants have not identified any particular fact or inference they contend ought to have been drawn in their favour as a result of the second and third respondents not calling these witnesses. Whether his Honour should have made findings with respect to the issues in the amended statement of claim paras (28) and (34): ground 13 1. The primary judge set out the terms of para (28) of the pleading at [12] of his judgment. That paragraph asserted that the project provided "for a place or building to be used in Australia for the purpose of religious worship whether or not it is also used for social events and instruction by a religious group": para (a); and for a non-government faith-based educational facility: para (b). It should be noted that the pleading in paras (28) and (34) of the amended statement of claim were replicated in the further amended statement of claim, which is the pleading to which I have had regard. 2. As I understand his Honour's reasons, he accepted the fact asserted in para (b). Unless the appellants established that government funds provided under either Act were used to build places of religious worship, the allegation in para (a) goes nowhere. Paragraph (34) of the pleading was directed to this question, alleging that the Commonwealth had funded, managed and directed the project and had made payment of public funds to it in contravention of s 116. 3. The pleading, however, suffered from a number of defects, insofar as the argument advanced in support was concerned. First, the "project" was defined in wide terms in para (25) of the pleading: see above at [4]. Secondly, the evidence established that the School had been the recipient of funding for recurrent expenditure, not for capital expenditure. Thirdly, an audit of the use of funds by Malek Fahd concluded that there had been no wrongful use of the funding in the sense of having been used for purposes not authorised by the Funding Agreement, albeit questions were raised about whether the costing of services provided by the Federation of Islamic Councils. That, however, is a different question from whether funds were applied "to build places of religious worship" as alleged. 4. In any event, the question in issue is whether the impugned Acts contravened s 116. This was the issue that his Honour determined. To question whether his Honour should have made findings in respect of para (34) either fails to understand his Honour's reasons or is merely another way of the appellants asserting the result for which they contend on the appeal. 5. Further, even if buildings were constructed using funding provided under the impugned legislation, for the reasons already given, the appellants have not established the constitutional invalidity of either Act. A similar, although not identical, question was rejected in Ex rel Black. Barwick CJ posited a scenario in which funds provided by the Commonwealth under the impugned legislation in that case were used to construct buildings which were used from time to time for religious activities. Barwick CJ observed that such use of buildings constructed with funds provided under the impugned legislation was neither authorised nor prohibited by the impugned legislation. His Honour rejected the suggestion that the absence of any prohibition on such use made the law a law for the establishment of religion. As his Honour stated, at 583: "A law which in operation may indirectly enable a church to further the practice of religion is a long way away from a law to establish religion as that language properly understood would require it to be if the law were to be in breach of s. 116. It would not be enough that the law allowed such activity on the part of the owners of the schools. The law must be a law for it, i.e. intended and designed to set up the religion as an institution of the Commonwealth." (original emphasis). 1. This ground of appeal should be rejected. Whether the primary judge erred in distinguishing Hoxton Park Residents Action Group Inc v Liverpool City Council [2011] NSWCA 363: ground 14 1. The primary judge, at [60], stated that there was no support for the appellants' position in the suggestion made by Basten JA in Hoxton Park Residents Action Group Inc v Liverpool City Council (No 2) [2011] NSWCA 363 (the 2011 Court of Appeal decision) that Ex rel Black may be distinguishable. His Honour, at [60], noted that Basten JA had raised the possibility that: "… 'the direct funding of a religious institution for religious purposes' may raise a question of validity which is distinguishable from that considered by the High Court in Black." 1. The primary judge also observed that Basten JA, at [70], had referred to the possibility that the funding provided by the Commonwealth in respect of the Hoxton Park Campus may be proven to have had a "clear religious purpose" 2. As is apparent from [61] of the primary judge's reasons, his Honour rejected this argument on the evidence, stating: "The evidence in this case indicates that the possibility raised by Basten JA does not arise for determination. It could not be said reasonably that the Commonwealth has, by providing funding for the Hoxton Park campus under [the legislation] provided 'direct funding of a religious institution for religious purposes'. The funding for recurrent expenditure provided by the Commonwealth was not 'for religious purposes'. Rather, it was expressly for educational purposes. No regard was given to religious affiliations or purposes." 1. The 2011 Court of Appeal decision was concerned with the question whether the appellants' proceedings ought to have been dismissed pursuant to UCPR, r 13.4(1)(b) on the basis that no reasonable cause of action had been disclosed by the appellants. The Court held that the pleadings ought not to have been dismissed on that basis in circumstances where the pleaded facts differed from those in the authorities, including Ex rel Black and Kruger. 2. It is quite a different question when a case is heard in full and facts are found according to the evidence adduced. As I have pointed out in various aspects of these reasons, the appellants did not establish that funds had been provided by the Commonwealth to build places of worship. It is appropriate to reiterate that not only was the funding provided for recurrent expenditure for educational purposes, the time spent on religious education was consistent with the BOSTES requirements. Whether the primary judge erred in holding that it was necessary for the appellants' case to encompass an examination of all other independent schools of which there are 27,981 in Australia in 2015: ground 15 1. Appeal ground 15 was directed to [4] of the primary judge's reasons, where his Honour stated: "The plaintiffs' case did not encompass an examination of other schools and I was not in a position to make an evaluative comparative judgment about the School or its features in relation to other schools. However, other than in its religious orientation, the School's essential features were said to be no different in any material sense to those of other independent non-government religious schools in New South Wales." 1. It is apparent from his Honour's reasons in this paragraph that he did not make the finding or specify the requirement as alleged by the appellants in this ground of appeal. That is sufficient to reject this ground and there is no purpose in explaining the purport of his Honour's statement in [4], as it is apparent from what is stated not only at [4], but in the succeeding paragraphs. Whether the primary judge erred in rejecting the evidence of Ms Harris, Dr Refaat El-Hajje, the Worrells Report into the finances; Exhibits V, W, X and Y and evidence of the use of funds by the respondents: ground 17 1. The appellants directed three or possibly four paragraphs of their written submissions to this ground. In doing so, no reference was made to the Worrells Report. According to the index of the appeal book, Exhibits V and X were "not identified". Exhibit W was not included in the appeal book but was identified in the index as "Folder of documents produced by [the Commonwealth] and notice to produce dated 10/12/14". It was said to have been tendered at p 86 of the transcript of 25 February 2015. That portion of the transcript was not in the appeal book. 2. Exhibit Z was not included in the appeal book but was identified in the index as "Tax invoices, receipts and statements between [Malek Fahd] and Department of Education, Employment and Workplace Relations". The transcript reference where Exhibit Z was tendered identifies the tender as: "EXHIBIT #Z BUNDLE OF RECIPIENT-CREATED TAX INVOICES WITH ACCOMPANYING SCHEDULE SHOWING AMOUNTS PAID BY THE COMMONWEALTH FOR RECURRENT EXPENDITURE TO THE SECOND DEFENDANT FOR THE PERIOD FROM JANUARY 2005 TO OCTOBER 2013 TENDERED ..." 1. The transcript records that the exhibit was admitted without objection. 2. In the circumstances, that part of appeal ground 17 that relates to Exhibits V, W, X, and Z should be rejected. Evidence of Dr Refaat El Hajje 1. The appellants also contended that the primary judge erred "in rejecting the evidence of … Dr Refaat El-Hajje". The relevant passages of the primary judgment are as follows: "[15] I should preface my findings of fact by making clear that, in my view, the constitutional validity of the relevant laws is to be resolved by reference to the statutory language and syntax, read in conjunction with the discernible statutory object and purpose. It is not capable of resolution by reference to the effect of the laws on the School, or by reference to the intentions, actions and purposes of those who control the School, or by reference to the opportunities to which the relevant laws and executive acts and decisions give rise, or by reference to whether there has been any abuse or misconduct in relation to the funding provided to the School. Nor was it useful or necessary to consider the minutiae of the departmental administration of the relevant laws insofar as they related to the provision of funding to the School. [16] For that reason, I resisted during the hearing the repeated attempts of counsel for the plaintiffs to unreasonably broaden the forensic factual enquiry. On 25 February 2015 I disallowed certain questions and rejected an application by the plaintiffs to re-open their case to call evidence from a Mr Refaat El-Hajje …" 1. No particular error was identified in the primary judge's reasoning in this regard. In light of the views I have expressed above as to the relevant inquiry in assessing constitutional validity under s 116, the evidence of Dr El-Hajje was not relevant to any issue in the proceedings. It follows that no error has been demonstrated in the primary judge's approach. The Harris affidavits 1. The appellants also contended that the primary judge erred "in rejecting the evidence of Ms Harris". There were a number of affidavits sworn by Ms Harris, marked in the index to the appeal books as not read, not read save as to certain exceptions or disallowed. In oral argument, it became apparent that the appellants' complaint in relation to the evidence of Ms Harris concerned the question of standing. This is apparent from the following submission by counsel for the appellants at the hearing of the appeal: "The rejection in those circumstances of our evidence of injurious affectation of each of the appellants from the activities of the fifth respondent at Hoxton Park was in error, if his Honour was going to make that finding against us, having said that he accepted it, at least in relation to the second appellant." 1. In their written submissions, the appellants contended that the primary judge erred by refusing to admit any evidence to demonstrate "affectation of the second plaintiff's property". The appellants contended that the evidence excluded by the primary judge "went to the very issue of demonstrating that the Appellants had a special interest beyond that of any other member of the public" by reason of the injurious affectation to her property. 2. It is appropriate to defer consideration of this issue to my consideration below of the appellants' standing more generally. The Worrells Report 1. The Worrells Report, dated 21 September 2005, was a forensic accountant's report prepared for the AFIC. Amongst other things, the forensic investigation looked at the "adherence to the financial provisions of the Federation of Islamic Council's Constitution", as well as adherence to relevant regulatory laws. Another aspect of the investigation was in respect of payments made to various persons in the period 1999-2006, including to members of the executive committee, school principals and school board members, and relatives and associates of those persons. The Report recorded the following in respect of Malek Fahd: "144. Malek Fahd School contributed $900,000 to revenue in 2004. AFIC should consider whether this sort of contribution is sustainable. The school is currently generating surpluses. However, in time, its buildings will age, its teaching resources will need replacement or updating and its interest bearing borrowings ($7.9 million in 2003) will need to be repaid. 145. It was brought to my attention that the Queensland Government refused to allocate Government funding to a primary school set up by ABC Learning because it was perceived to be an institution which did not qualify for Government funding because two members of the school board were also directors of the parent company and there was a perceived lack of independence. 146. Whilst it is only speculation on my part, I suspect that the Government is concerned about the situation where a subsidiary school that is controlled by a parent entity diverts funding that was intended for educational purposes to the parent entity which then uses those funds in the pursuit of its own objectives. 147. I observed that the Boards of the Schools had a number of members that were also AFIC Executive Committee members. It is open for the State Governments to determine whether there is a perceived lack of independence. 148. Government subsidies represented 79% of Malek Fahd's revenue in 2003. 149. In the case of Malek Fahd School, I understand that AFIC charges the school rent because AFIC contributed the underlying land to establish the school. However, I have been informed that the basis on which rent is charged is the improved value of the property. That is, rather than rent being charged on the basis of what AFIC initially contributed – a vacant block of land – it is based on the value of the land and the improvements that have been made by the school itself. Arguably, the additional 'return' on the improvements should be for the benefit of the school." 1. The Report made a number of recommendations, including that the AFIC take legal advice on the Government's likely view of it charging rent on the basis of improved land value when it had made no contribution to those improvements. 2. Analogous observations may be made about this report as are made above in respect of the McGrath Nicol Report. I have said analogous, because the Worrells Report related to the accounts and finances of the AFIC whereas the McGrath Nicol Report was an audit of the School. There is nothing in the Worrells Report which relates to, reviews or reveals any funding from the Commonwealth or from the States made under any law of the Commonwealth or the State. For that reason alone, the Worrells Report was not relevant to an issue in the proceedings. It follows that there was no error in the primary judge rejecting the tender of the Report. Whether the primary judge erred in using emotional terms to describe the appellants' case, such as in "sorry logic" in [7] and "unsatisfactory litigation" in [3) of the reasons: ground 18 1. This ground of appeal should be rejected. Whether or not the comments about which the appellants complain were appropriate, they do not constitute an error of law or fact nor is it otherwise alleged that by those comments, his Honour led himself into error in the determination of the issues before him. Nor was any ground of bias was alleged. Whether the primary judge erred in getting insufficient or inadequate reasons for his decision, and for non-production of documents by Malek Fahd and the Federation of Islamic Councils and the State of New South Wales: ground 19 1. This ground of appeal should also be rejected. The primary judge's reasons adequately and sufficiently dealt with the essential issues raised by the appellants' claim. The provision of reasons serves a number of purposes and what is adequate in a particular circumstance depends upon the matters in issue and the evidence adduced. In the present case, although the appellants have complained that his Honour failed to make certain findings and wrongly rejected evidence, those grounds have not been made out, for the reasons given. The appellants also complained that his Honour failed to deal with the US authorities, but again, for the reasons given, I do not consider that those authorities would have caused his Honour to come to any different determination of the issues. Whether the appellants had standing: ground 2 1. The primary judge held, at [77], that the appellants had standing to challenge the validity of grants by the Commonwealth that remained current, that is, those grants made under the Australian Education Act. His Honour held, however, that the appellants lacked standing to challenge the legislation in respect of past expenditure. As his Honour explained, at [77]: "Such past expenditure gives rise to no contested legal right, subsisting or future, as between the plaintiffs and the Commonwealth or any other defendant which could properly be the subject of declaratory relief that would be of any utility: Gardner v Dairy Industry Authority (1977) 18 ALR 55 at 69, 71; Church of Scientology v Woodward (1982) 154 CLR 25 at 62; Williams v The Commonwealth (2012) 248 CLR 156 at 289-292. As observed in Pape v Federal Commissioner of Taxation (2009) 238 CLR 1 at 35, 68 in the Commonwealth context, questions of standing and jurisdiction are intertwined." 1. His Honour's reference to Pape v Federal Commissioner of Taxation was a reflection of the Commonwealth's submission to that effect. On the appeal, the Commonwealth submitted that the requirement to draw a distinction between past and present funding was unlikely to be of any practical significance in the case as the appellants had failed to identify any relevant difference between the Schools Assistance Act and the Australian Education Act, nor any relevant distinguishing characteristics between funding decisions affecting the Hoxton Park campus from time to time. 2. The appellants submitted that the respondents had initially made a formal admission of standing in relation to both appellants, but that the Commonwealth had subsequently withdrawn its concession as to the interest of the second appellant. It was further submitted that the primary judge refused the tender of evidence as to the interest of the second appellant on the basis of the original admission. The appellants also submitted that "the mere participation … in the action by the State was sufficient to give the action standing", citing Williams v Commonwealth of Australia [2012] HCA 23; 248 CLR 156 per French CJ at [9], and Gummow and Bell JJ at [112]. Disposition 1. In my opinion, the Commonwealth's submission was correctly made. Accordingly, even if his Honour wrongly determined that the appellants had no standing in respect of past expenditure, the outcome of the appeal would have been the same. As a result, it is also unnecessary to deal with the primary judge's rejection of the evidence of Mrs Harris. 2. It will thus suffice to express some brief remarks in relation to the appellants' standing. It is immediately apparent that the appellants' reliance on Williams is misplaced. It is appropriate to set out the relevant passages in full. At [112], Gummow and Bell JJ dealt with the issue of standing in the following terms: "The Commonwealth parties (which hereafter refers to the first, second and third defendants) and SUQ to varying degrees contest the standing of the plaintiff. But, in exercise of the right of intervention given by s 78A of the Judiciary Act 1903 (Cth), Victoria and Western Australia extensively support that part of the plaintiff's case which challenges the existence of the spending power and the validity of the Funding Agreement. In this respect, the questions of standing may be put to one side. Even without s 78A, any State would have a sufficient interest in the observance by the Commonwealth of the bounds of the executive power assigned to it by the Constitution to give the State standing. It should be added that New South Wales, Queensland, South Australia and Tasmania also intervene in support of the plaintiff, but on grounds more limited than those of Victoria and Western Australia." 1. French CJ expressed the following views at [9]: "Question 1 was whether the plaintiff had standing to challenge the DHF Agreement and, for each of the financial years from 2007-2008 to 2011-2012 inclusive, the drawing of money from the CRF and the payments by the Commonwealth to SUQ. For the reasons given by Gummow and Bell JJ, I agree that the plaintiff had the requisite standing to support his challenge to the DHF Agreement and the payments made under it." 1. I am not convinced that the decision in Williams supports the proposition drawn by the appellants, viz, that it was sufficient that there was a State which had entitlement to question the funding. Though French CJ expressed his views in terms of a conclusion that the plaintiff had standing, the reasons expressed by Gummow and Bell JJ bear a different complexion. It is clear that, in their Honours' views as expressed at [112], the issue of the plaintiff's standing could be put to one side. This was because of the commonality in the arguments of the plaintiff and the intervening States, it being accepted that the States had sufficient interest in the observance by the Commonwealth of the constitutional bounds of its power as to ground standing. The circumstances of this case were different. The fourth respondent, the State of New South Wales, did not take part in these proceedings as a party or intervener challenging the validity of the impugned Acts. The standing in question was that of the appellants, and that issue could not be avoided by recourse to the fact that the State of New South Wales would, had it challenged the Acts, have had standing. Notice of motion to adduce further evidence 1. By notice of motion filed on 16 February 2016, the appellants sought orders granting leave to reopen, to adduce further evidence and to seek such other or varied relief as to the Court seemed fit. In support of the notice of motion, the solicitor for the appellants, Mr Balzola, made reference to a decision of the Commonwealth Minister for Education and Training to withdraw funding commencing 8 April 2016 to Malek Fahd. In evidentiary support of that assertion, the appellants annexed a transcript of the press conference given by the Minister on 9 February 2016 as well as the transcript of an interview given on ABC radio on the same date. 2. On 4 March 2016, the appellants served upon the Commonwealth a notice to produce, inter alia, a copy of the decision of the Minister's delegate of 8 February 2016; the departmental brief to the Minister concerning the making of the decision and the advice of the Australian Government Solicitor to the Minister and the Department concerning the decision. An earlier notice to produce bore a date in 2014 for the production of documents and, in effect, was abandoned by the appellants. On 11 March 2016, the Commonwealth, by notice of motion, sought orders setting aside the notice to produce. Submissions 1. The appellants, in their submissions in support of the notice of motion, stated that the application to reopen was made in respect of the arguments under s 116, in particular, in relation to their reliance on the establishment clause of that section. The essence of the appellants' submission was contained in para (8) of the submissions dated 9 March 2016, as follows: "ESTABLISHING A RELIGION: The public funding power at issue under [the Australian Education Act] is an exercise by the Cth of its 96 power, which ICM Agriculture at [45] held, conformably with the continued broadening of constitutional principle first observed by Basten JA and since noted by Beck, is subject to the constitutional guarantee of freedom of religion. The funds were authorized for use as 'operating expenses' of MFIS under [the Australian Education Act] Pt 6 and used by it, to the knowledge of the Cth, to fund the whole operation of MFIS including the purchase and lease of land at Hoxton Park and expansion of the national network of 6 Islamic schools: see the 2011 McGrath Nicol Report to the Cth esp pp 13-15. As Barwick CJ in Black at p.581, and Beck in the 2 articles provided to the Court, explain, a law in its administration impairs the freedom against establishing of religion by the body politic, whether or not such law has that express purpose, where it has that operational effect, including [as necessarily follows from its nature] a funding law, and will be struck down under s15A Acts Interpretation Act 1901 to the extent required to prevent the impairment. That also includes funds covered by the Cth decision now made on 8 2 2016." 1. The Commonwealth submitted that an application to re-open and adduce additional evidence should only be allowed in exceptional circumstances and where the interests of justice so require. The Commonwealth noted that the requirement of "special grounds" does not apply to evidence concerning matters arising after trial, but nonetheless contended that the interests of justice did not require the application to be allowed. The Commonwealth contended that the evidence sought to be adduced was neither relevant to the issues on the appeal, nor highly probative. The crux of the Commonwealth's argument was that evidence of mismanagement or breach of funding conditions by the School could not change the object or character of the funding itself. 2. The Commonwealth, therefore, sought to have the 4 March 2016 notice to produce set aside on the basis that it was formally defective and on the basis that the delegate's decision was not under review in the proceedings, such that the documents sought could not rationally assist the resolution of the constitutional issues on the appeal. 3. The second and third respondents also opposed the appellants' application. They submitted that the Court has a general discretion to admit fresh evidence, but only in an exceptional case. They also submitted that finality of litigation is a significant factor in the Court determining whether to accede to the application. The second and third respondents submitted that evidence as to the alleged use of funds by a funding recipient after receipt, or as to a Commonwealth withdrawal of funding, could not impact on the question of whether the original grant was constitutional. Likewise, it was submitted that the manner in which a funding recipient applies funds after receipt can have no possible bearing on the way in which the Commonwealth administers the legislation. It was also contended that the transcript evidence was impermissible hearsay. Relevant principles 1. It is trite that, in appropriate circumstances, the Court may receive further evidence. Section 75A of the Supreme Court Act 1970 (NSW) relevantly provides: "75A Appeal … (7) The Court may receive further evidence. (8) Notwithstanding subsection (7), where the appeal is from a judgment after a trial or hearing on the merits, the Court shall not receive further evidence except on special grounds. (9) Subsection (8) does not apply to evidence concerning matters occurring after the trial or hearing." 1. In like terms, r 50.16 of the UCPR provides: "50.16 Conduct of appeal … (3) The higher court may receive further evidence. (4) Despite subrule (3), where the appeal is from a judgment after a trial or hearing on the merits, the higher court may not receive further evidence except on special grounds. (5) Subrule (4) does not apply to evidence concerning matters occurring after the trial or hearing." 1. As Gleeson CJ explained in Doherty v Liverpool District Hospital (1991) 22 NSWLR 284 at 294, the relevant subsections of s 75A are such as to compel a distinction between further evidence in a general sense, and further evidence concerning matters occurring only after trial: "The long-standing English rule, like s 75A, in its terms draws a distinction between evidence as to matters occurring before the date of the trial and evidence as to matters occurring after the date of the trial, and, further, in terms confers a general discretion in relation to evidence of the latter kind but limits the power to receive evidence of the former kind to cases where there are 'special grounds'." See also Great Wall Resources Pty Ltd v O'Sullivan [2009] NSWCA 119 at [27] per Macfarlan JA. 1. The power of the court to receive further evidence, though discretionary, is not completely unconstrained. In Doherty, Gleeson CJ, at 296, distilled the following principles from the relevant authorities: "It would be wrong to characterise the principles stated in Mulholland v Mitchell as rigid or inflexible. On the contrary Lord Wilberforce stressed the impossibility of laying down any precise formula by which the exercise of the general discretion is to be undertaken. In every case, he said, it is a matter of discretion and degree … What the decision emphasises, however, is that the exercise of the discretion is to be undertaken with regard to the context in which it arises and also to the general public interest in the finality of litigation. It should be added that the nature of the litigation in question may be a relevant feature of the particular context …" 1. As this passage makes clear, the public interest in the finality of litigation will be an important factor in considering any application to adduce additional evidence: see also Great Wall Resources per Macfarlan JA at [29]-[30]. 2. The following remarks of Mahoney JA in Radnedge v Government Insurance Office of New South Wales (1987) 9 NSWLR 235 at 251 serve to emphasise that the relevance of the evidence sought to be adduced is not a determinative consideration: "Obviously it was not intended that the test for admission of evidence tendered on appeal should be merely relevance to the issue. If that was the test, then the appeal would be a second trial. It was accepted that that was never intended. But if the relevance was not the principle on which the discretion was to be exercised — if evidence, though relevant, was to be rejected — it was necessary for the courts to formulate principles by reference to which they were to determine which of the relevant evidence should be admitted and which of the relevant evidence should be rejected." Disposition 1. It should be noted at the outset that the appellants, by their 9 March 2016 submissions, sought to have their application to adduce further evidence heard in open court. I am of the view that the appellants' notice of motion may appropriately be dealt with on the papers. The Court made directions that both the appellants' application to adduce further evidence, and the Commonwealth's application to set aside the notice to produce, be dealt with on the papers. No reason was identified as to why this was not an appropriate course. 2. In my opinion, the interests of justice do not compel the re-opening of this case and, accordingly, the appellants' application to re-open and adduce further evidence must be dismissed. Viewed solely in terms of potential relevance and admissibility, there is much to commend the view adopted by the Commonwealth that "[t]he application fails at [the] threshold". The appellants contended that the evidence sought to be adduced would help establish how Malek Fahd had used Commonwealth funding. As I have been at pains to explain throughout these reasons, the ultimate use or misuse of the relevant funding was not the relevant inquiry in these proceedings. The further evidence sought to be adduced could not rationally affect the assessment of whether the impugned Acts constitute laws for one of the proscribed purposes in s 116. 3. It follows that the Commonwealth's application to set aside the notice to produce should be allowed. As the Commonwealth noted, the appellants sought to compel production of documents relating to the decision to revoke the status of Malek Fahd as an "approved authority". That decision was in no way the subject of these proceedings. The potential basis of that decision, including any actual or alleged misuse of Commonwealth funds by Malek Fahd, cannot advance the appellants' challenge to the Schools Assistance Act and the Australian Education Act. The documents sought could not rationally assist the assessment of whether the Acts constitute laws for one of the proscribed purposes in s 116. Conclusion 1. For the foregoing reasons, I am of the opinion that the appeal should be dismissed with costs. 2. BASTEN JA: This appeal raises an issue as to the scope of the spending power of the Commonwealth. The expenditure in question, to a non-government school run by a religious institution, was undertaken pursuant to s 96 of the Commonwealth Constitution by way of a tied grant to the State of New South Wales. There was legislative support for the expenditure. 3. The challenge to the expenditure was mounted on two bases. First, it was said that s 96 of the Constitution failed to provide a basis for expenditure with respect to purposes which were outside the legislative power of the Commonwealth. Secondly, it was said that the purpose of the expenditure, as revealed in the conditions upon which the grants were made to the State, contravened s 116 of the Constitution, prohibiting certain kinds of laws in respect of religion. 4. This matter has been before the Court on appeal before: the first appeal challenged the decision of a trial judge who dismissed the proceedings summarily on the basis that the claims were unarguable. The Court upheld the appeal, limited to particular constitutional challenges to Commonwealth legislation for funding non-government schools. [1] Subsequently, the matter proceeded to trial but the appellants were unsuccessful, the constitutional challenge being dismissed. [2] Scope of s 96 1. Section 96 falls within Ch IV of the Constitution headed "Finance and Trade". Many of the provisions dealing with finance (ss 81-97) involve qualifications referable to the transitional period necessary to give effect to the creation of a federation. Section 96 was one such provision, which reads: 96. Financial assistance to States During a period of ten years after the establishment of the Commonwealth and thereafter until the Parliament otherwise provides, the Parliament may grant financial assistance to any State on such terms and conditions as the Parliament thinks fit. 1. The proposition that the Commonwealth cannot make grants to a State conditioned upon the allocation of funds for purposes beyond the legislative powers of the Commonwealth cannot succeed and was correctly rejected by the primary judge. As explained by Mason J in Attorney General (Vic); Ex rel Black v The Commonwealth: [3] "But the course of judicial decision in this Court establishes that the Commonwealth may condition its grant under s 96 so as to make the State a conduit pipe in channelling the fund to the intended recipient. As early as 1926, in Victoria v The Commonwealth, [4] the Federal Aid Roads Act 1926 was upheld, notwithstanding that it bound the State to apply money to an object selected by the Commonwealth, that the object was outside Commonwealth legislative power and that the amount of the payments was to be fixed by a Commonwealth Minister." [5] 1. In one respect, however, the reasoning of the primary judge may be open to question. [6] In reaching the inescapable conclusion that the particular challenge must fail, the primary judge referred to the legislation pursuant to which the grants were made as supported by s 96, s 51(xxxvi) and s 51(xxxix). In particular, the following statement appeared at [46]: "In ICM Agriculture [7] French CJ, Gummow and Crennan JJ at [35], [46] and Heydon J (dissenting) at [174] and [222] held that Section 51(xxxvi) is a relevant source of legislative power in association with Section 96 grants. See also Spencer v Commonwealth; [8] Pape v Commissioner of Taxation. [9] 1. It is not clear whether the reference to s 51(xxxvi) was in any sense necessary to the reasoning in the present case. That section provides as follows: 51. Legislative powers of the Parliament The Parliament shall, subject to this Constitution, have power to make laws for the peace, order, and good government of the Commonwealth with respect to: … (xxxvi) matters in respect of which this Constitution makes provision until the Parliament otherwise provides …. 1. Until the passages in Pape referred to above, the need to seek (or indeed the propriety of seeking) legislative power, not in s 96 itself, but in s 51(xxxvi) appears not to have been considered. Indeed, the use of the phrase "until the Parliament otherwise provides" in s 96 has been a source of puzzlement since 1901. Thus, Quick and Garran [10] stated, after referring to the identical introductory words of s 87: "In this section, however, it is very hard to give them any meaning. The phrase 'until the Parliament otherwise provides' is used, everywhere except in this section, in connection with some specific provision made by the Constitution – not in connection with a power given to the Parliament. Its effect is to lower such provision to the level of a mere law of the Federal Parliament, and to give the Federal Parliament full power to deal with the whole question. … But here, the Constitution of itself makes no specific provision. … According to the grammatical implication, it would appear that if the Parliament at any time after ten years 'otherwise provides,' it cuts away its legislative power under the section altogether; so that the Parliament by passing a law, can destroy its own power for the future." 1. Until recently, the accepted operation of this provision was that accepted by Dixon CJ in State of Victoria v The Commonwealth: [11] "One may guess that s 96 was regarded as connected with the Braddon clause, s 87, and that the purpose of the opening words was to enable the Parliament to terminate the operation of both together. [12] … On its face par (xxxvi) presupposes that the Parliament is authorised to provide otherwise as to 'matters' with respect to which the Constitution immediately provides: they will be matters defined, like those enumerated in s 51, in such a way as to be subjects 'with respect to' which laws may be made. Section 87 does deal with such a matter …. In the same way subject matters 'with respect to' which legislative powers may be exercised are specified by the other provisions of the Constitution, except s 96, in which the phrase occurs 'until the Parliament otherwise provides' …. In all such cases the Constitution makes directly an interim provision for the subject matter and s 51(xxxvi) operates to confer power on the Parliament to make thereafter such provisions with respect thereto as from time to time may appear appropriate. But s 96 does not deal with a legislative subject matter; it does not make some interim provision with respect thereto. It confers a bare power of appropriating money to a purpose and of imposing conditions. Either the power is terminated or it continues." 1. In other words, not only was s 51(xxxvi) not needed in order to provide a legislative basis for an exercise of power under s 96 by the Parliament, but s 51(xxxvi) was inapt for that purpose. 2. The relevance of the point for present purposes is not to seek to reconcile differing views expressed in the High Court, but to understand the possible relevance of reliance on s 51(xxxvi). The same may be said of the reference by the primary judge to s 51(xxxix), invoking the incidental power. One possible purpose of reliance on these provisions might be to constrain the power which would, pursuant to the chapeau of s 51, then be "subject to this Constitution" by constraints found in other provisions of the Constitution, including s 51(xxxi) (dealing with the acquisition of property on just terms) and s 116, being the prohibition on legislation by the Commonwealth in respect of religion, upon which the appellants rely. 3. At least in this Court, it is quite unnecessary to rely upon s 51(xxxvi) for this purpose. Such constraints had already been accepted as directly impinging upon the power under s 96, in Black, to which further reference is made below. In any event, less than two months before Pape was argued, the Court had delivered judgment in Wurridjal v The Commonwealth. [13] In Wurridjal the Court had rejected the proposition that s 122 (the territories power) was to be read as a freestanding provision altogether outside the scope of s 51(xxxi). [14] The Court overruled the contrary view taken in Teori Tau v The Commonwealth. [15] There was, therefore, no basis for thinking that the power conferred by s 96 would not be subject to both s 51(xxxi) and s 116. Scope of s 116 1. The primary basis upon which this Court thought the matter should proceed to trial was that the pleading included an allegation that the legislation (the Schools Assistance Act 2008 (Cth)) was said to support a grant to a religious institution for the purpose of constructing a place of worship. [16] At trial, the appellant eschewed any such claim, focusing upon the provision of funds for the ongoing operation and maintenance of an Islamic school. In this form the case ran squarely into the acceptance by the High Court of the validity of laws providing such funding in Black. In order to avoid the conclusion that the outcome is dictated by Black, the appellant needed to demonstrate that its challenge would not invalidate the relevant provisions of the Commonwealth legislation as they applied to all non-government schools run by religious foundations or institutions. In order to do that, the appellant contended that with respect to the Malek Fahd Islamic School, funding for which was the focus of the challenge, the law operated differently from its operation with respect to non-government schools generally. For reasons which will be explained, that attempt to isolate a particular operation of the law for the purpose of considering its constitutional validity must fail. 2. The hurdles in the way of a successful appeal did not stop with authority: the attempt to expand the constraints imposed on the Commonwealth by s 116 sought to create a separationist position under the Commonwealth Constitution of a kind which, even in comparative terms, would be considered extreme. That attempt found little support in the language of the section, let alone the social, legal and historical context in which s 116 was formulated. 3. At the outset, two matters favourable to the appellants' contentions may be recorded. First, s 116 of the Constitution establishes the Commonwealth as a secular polity. That is clear from the prohibition on the Commonwealth making a law establishing any religion (the first limb), imposing any religious observance (the second limb) and requiring compliance with any religious test as qualification for any office or public trust under the Commonwealth (the fourth limb). Further, the section protects individuals in "the free exercise of any religion" (the third limb). 4. Secondly, similar language in the First Amendment to the US Constitution has been held to prohibit direct government funding of religious institutions, including institutions operating schools. The language used in many US cases reflects the colourful language of Thomas Jefferson in 1802, describing the first amendment as "building a wall of separation between Church and State." [17] 5. However, neither in the US nor in Australia is the metaphor of an impregnable wall helpful as a description of social reality, nor reflective of legal principle. As explained by Burger CJ in Lemon v Kurtzman: [18] "Judicial caveats against entanglement must recognize that the line of separation, far from being a 'wall', is a blurred, indistinct, and variable barrier depending on all the circumstances of a particular relationship." 1. Religious institutions operate within and throughout social communities. On the one hand, to refuse them any form of government assistance or access to services would entrench significantly on their ability to exist and would therefore directly affect the free exercise of religion by their members, whatever their religion. It is clear that essential public services, including police and fire protection, waste disposal and the well-known gamut of governmental services are (and should be) provided on a non-discriminatory basis. On the other hand, religious institutions must equally be subject to necessary government regulation designed to protect public health and safety, including requirements relating to land use, planning and building construction. Similarly, religious practices are subject to the general criminal law. 2. Apart from the fine balance between public and private interests, there are varying rationales supporting separation. The primary rationale must, however, be the protection of individual freedom of conscience to follow religious beliefs and engage in religious activities, or indeed to refuse to participate. However, to say that the state has no interest in these matters, or should have no interest in them, is to assume that tolerance and harmony are more likely to prevail where the state maintains secular neutrality and intervenes only at the margins. 3. The first significant US case dealing with the establishment clause in the context of funding for non-government schools was Everson. [19] Everson concerned a challenge to a New Jersey statute authorising local school districts to make arrangements for the transportation of children to and from schools. The scheme worked by reimbursing parents for money expended by them on bus travel for their children. The challengers alleged that the State (bound by the First Amendment) had no power to authorise reimbursement to parents of children attending parochial schools, and in particular Catholic parochial schools. Justice Black, speaking for the Court said: [20] "The 'establishment of religion' clause of the First Amendment means at least this: Neither a state nor the Federal Government can set up a church. Neither can pass laws which aid one religion, aid all religions, or prefer one religion over another. Neither can force nor influence a person to go to or remain away from church against his will or force him to profess a belief or disbelief in any religion. No person can be punished for entertaining or professing religious beliefs or disbeliefs, for church attendance or non-attendance. No tax in any amount, large or small, can be levied to support any religious activities or institutions, whatever they may be called, or whatever form they may adopt to teach or practice religion." 1. Two broad propositions inhere in this passage. The first is that no law can provide aid to any religion, or even all religions. This is a very broad view of establishment and has no ready application in the context of s 116. Secondly, the government may not impose a tax "to support" any religious activity. Because no issue arose as to any form of taxation, the scope of the proposition need not be explored. However, it may reveal an underlying justification for the constitutional prohibition, namely that no citizen should be compelled to fund any form of religious activity, directly or indirectly. In any event, the broad statements in this passage were qualified. 2. The opinion then considered the indirect aid that was provided to parochial schools through generally available services such as "ordinary police and fire protection, connections for sewage disposal, public highways and sidewalks." Black J continued: [21] "Of course, cutting off church schools from these services, so separate and so indisputably marked off from the religious function, would make it far more difficult for the schools to operate. But such is obviously not the purpose of the First Amendment. That Amendment requires the state to be a neutral in its relations with groups of religious believers and non-believers; it does not require the state to be their adversary. State power is no more to be used so as to handicap religions, than it is to favor them." 1. In the context of state aid to non-government schools, the governing principle for many years was that articulated by Burger CJ, delivering the opinion of the Court in Lemon v Kurtzman: [22] "In the absence of precisely stated constitutional prohibitions, we must draw lines with reference to the three main evils against which the Establishment Clause was intended to afford protection: 'sponsorship, financial support, and active involvement of the sovereign in religious activity.' Every analysis in this area must begin with consideration of the cumulative criteria developed by the Court over many years. Three such tests may be gleaned from our cases. First, the statute must have a secular legislative purpose; second, its principal or primary effect must be one that neither advances nor inhibits religion; finally, the statute must not foster 'an excessive government entanglement with religion.'" 1. Three points arise from this set of criteria. First, on their face the criteria are not closely related to the constitutional language; secondly, although a secular legislative purpose is required, the second criterion looks to the effects, or at least the principal or primary effect, requiring neutrality as to advancement or inhibition of religion; thirdly, the final criterion concerning "excessive government entanglement" is remarkably imprecise and open to a variety of approaches in its application. More recently, the status of the concept of entanglement has been downgraded from a separate criterion to a factor or set of factors to be considered in identifying the primary effect. [23] 2. The protection of religious freedom was among the first freedoms to be enacted and, indeed, the prohibition on religious tests for officers or public trusts under the United States was included in the unamended Constitution. As one commentator has noted, [24] "the Constitution did not make race similarly irrelevant until almost a century later, after the civil war, [25] and it did not make gender similarly irrelevant until well into the twentieth century. [26] " Giving priority to removing religious considerations from the criteria for participation in public office, one would expect that government intrusion on freedom of religion would be subject to strict scrutiny and justifiable only by a compelling interest. However, more recent decisions have limited consideration of the effect of a particular measure in advancing or inhibiting religion and focused on the statutory purpose. The current approach to school funding is reflected in a decision delivered in 2000, Mitchell v Helms. [27] 3. Mitchell v Helms involved what Thomas J, delivering the judgment of four members of the Court, described as "part of a longstanding school-aid program known as Chapter 2," pursuant to which "the Federal Government distributes funds to state and local and governmental agencies, which in turn lend educational materials and equipment to public and private schools, with the enrolment of each participating school determining the amount of aid that it receives." [28] A question as to whether the law was one "respecting an establishment of religion" arose because many private schools were religiously affiliated. 4. The judgment continued: [29] "The Establishment Clause of the First Amendment dictates that 'Congress shall make no law respecting an establishment of religion.' In the over 50 years since Everson v Board of Education of Ewing, 330 US 1 (1947), we have consistently struggled to apply these simple words in the context of governmental aid to religious schools." 1. The judgment then referred to the fact that, in Agostini v Felton [30] the Court had modified the entanglement criterion, reducing it to a factor considered in relation to the primary effects of advancing or inhibiting religion. In Agostini, the Court had in fact identified three primary criteria in evaluating whether government aid does not have the effect of advancing religion, namely that "[i]t does not result in government indoctrination; define its recipients by reference to religion; or create an excessive entanglement." [31] The opinion then noted that "the question whether governmental aid to religious schools results in governmental indoctrination is ultimately a question whether any religious indoctrination that occurs in those schools could reasonably be attributed to governmental action." [32] In the course of argument in this Court, the concept of "religious indoctrination" was recast as "religious instruction", meaning instruction in the tenets of the particular religion of those running the school. 2. As Mitchell explained, the Supreme Court has upheld numerous schemes whereby government funds are distributed to schools for secular non-religious purposes, according to criteria which are neutral as to the nature of the school and in circumstances where the child attends the school as the result of a private choice by individual parents. 3. O'Connor J agreed with the joint reasons in upholding the validity of the law under review. Her concurring reasons (in which Breyer J joined), however, rejected the weight accorded in the plurality reasons to the principle of neutrality, and the effective diminution of emphasis given to the identification of impermissible effects. [33] A third judgment (in dissent) was delivered by Souter J (with whom Stevens and Ginsburg JJ joined). Souter J stated: [34] "There may be no aid supporting a sectarian school's religious exercise or the discharge of its religious mission, while aid of a secular character with no discernible benefit to such a sectarian objective is allowable. Because the religious and secular spheres largely overlap in the life of many such schools, the Court has tried to identify some facts likely to reveal the relative religious or secular intent or effect of the government benefits in particular circumstances. We have asked whether the government is acting neutrally in distributing its money, and about the form of the aid itself, its path from government to religious institution, its divertibility to religious nurture, its potential for reducing traditional expenditures of religious institutions, and its relative importance to the recipient, among other things." 1. The appellants did not seek to undertake a detailed review of the jurisprudence of the United States Supreme Court, nor to identify the extent to which that jurisprudence can properly inform the application of s 116 in this Court. Two factors suggest that further consideration of the American case law may not be productive. First, as was emphasised in Black, the language of s 116 departs from that used in the establishment clause of the US First Amendment. That provision demands that there be "no law respecting an establishment of religion." By contrast, s 116 prohibits the Commonwealth making "any law for establishing any religion". As explained by Barwick CJ in Black [35] the language in the American text is clearly wider than that in s 116, which has a more constrained "purposive content". 2. Given that s 116 is expressed as a constraint on legislative power, Barwick CJ considered that evidence relating to the administration of the law could have only a limited purpose: [36] "The next observation I wish to make as to s 116 is that it is directed to the making of law. It is not dealing with the administration of a law. But, if that administration is within the ambit of the authority conferred by the statute, and does amount to the establishment of a religion, the statute which supports it will most probably be a statute for establishing a religion and therefore void as offending s 116. That is so, not because of the manner of the administration but because the statute, properly construed, authorizes it. I say most probably, because the purposive content of the expression 'for establishing' must, in any case, be satisfied." 1. The linguistic difference was also relied upon by other members of the Court. Gibbs J, having noted the distinction, [37] concluding: [38] "The primary purpose of the challenged legislation is the advancement of education within Australia. That would, no doubt, not be decisive if the legislation had the further purpose of establishing any religion. However, it is impossible to say, on any view of the statutory provisions in question or of the evidence in the case, that the challenged legislation has the purpose or effect of setting up any religion or religious body as a state religion or a state church, even for limited purposes only." 1. Stephen J identified the linguistic variation as one of two problems confronting reliance by the plaintiffs in Black on US constitutional case law. He said: [39] "The argument is that words of the First Amendment are similar to those of the first restriction in s 116; that the First Amendment was, by the time of Federation, understood in a sense which would forbid the grant by the federal government of aid to church schools; and that, by using similar language, the framers of our Constitution must have intended that the first restriction in s 116 should have a similar operation. The argument fails on two counts. The more obvious is that the wording of the two measures differs in an important respect; the more telling is that the First Amendment had not, by the 1890s, come to bear the meaning which the plaintiffs would seek to assign to the first restriction in s 116." 1. To similar effect, Mason J stated: [40] "We speak of any 'law for establishing' any religion. The Americans speak of a law 'respecting an establishment' of religion. … Here, however, we are dealing, not with a grant of legislative power, but with a prohibition against the exercise of legislative power. In such a context 'for' is more limiting than 'respecting'; 'for' connotes a connexion by way of purpose or result with the subject matter which is not satisfied by the mere circumstance that the law is one which touches or relates to the subject matter. In this respect the first prohibition in s 116 is narrower than its American counterpart." 1. Again, Wilson J in Black stated: [41] "Furthermore, it seems to me that the words 'for establishing' are not comparable with the words 'respecting an establishment'. The former words convey the sense of 'in order to establish', and speak quite specifically of the purpose of the law in terms of the end to be achieved. 'Respecting' conveys the notion of 'in respect of' a particular subject-matter, namely, an establishment or religion, thereby providing a broad frame of reference." 1. The second difficulty flowing from the reliance on American case law, not adequately acknowledged by the appellants' submissions, involves the historical development of relevant social context and concepts. The first of the US cases referred to above was Everson, [42] decided in 1947. Nor, as explained by Gibbs J and Stephen J in Black, were the principles which developed in the mid-20th century recognised in form or substance in 1900. Accordingly, to the extent that reliance is placed upon the American case law as informing the views of those responsible for s 116 in the Australian Constitution, little support is to be gained from the relevant historical analysis. 2. In part that is a function of social conditions in the nineteenth century: government expenditure on health, education and welfare was far more limited than it became in the middle of the twentieth century and certainly bore no relation to the levels of funding identified by Wilson J from the evidence in Black. [43] Accepting that originalism cannot dictate a single understanding of the scope of constitutional provisions in different social circumstances, and further that later developments in constitutional law may well inform the construction of s 116, there is nevertheless a difficulty for the appellants in identifying which precise aspects of American jurisprudence are to be adopted. Establishment 1. A significant part of the appellants' case turned upon the submission that, even adopting the understanding explained in Black as to the meaning of "establishing" in s 116, the current legislation varied in significant respects from that considered in Black, thus requiring a different conclusion as to the validity of the legislation. 2. The concept of establishing a religion was described in various terms in the separate judgments in Black. Thus, Barwick CJ stated, in a passage relied on by the appellants: [44] "A law which in operation may indirectly enable a church to further the practice of religion is a long way away from a law to establish religion as that language properly understood would require it to be if the law were to be in breach of s 116. It would not be enough that the law allowed such activity on the part of the owners of the schools. The law must be a law for it, ie intended and designed to set up the religion as an institution of the Commonwealth." 1. Gibbs J stated that "[t]he natural meaning of the phrase 'establish any religion' is, as it was in 1900, to constitute a particular religion or religious body as a state religion or state church." [45] Stephen J also accepted that the verb "establish", in relation to religion meant, "to place (a church or a religious body) in the position of a state church". [46] However, he recognised that, as with the Church of England in England, the status was achieved not through demonstrating any single characteristic, but rather was constituted by "the sum total of all the mutual relations for the time being existing according to law between Church and State." [47] Such an approach was consistent with other limbs of s 116, "prohibiting three avenues of possible legislative encroachment upon that freedom – the elevation of one church above all others, the imposing of particular religious observances and the proscribing of any religious worship." [48] In similar terms, Mason J considered that establishment involved the creational recognition of a church "as a national institution", citing with approval the language of Quick and Garran [49] explaining establishment as involving "the erection and recognition of a State Church, or the concession of special favours, titles, and advantages to one church which are denied to others", although with the qualification that the conferral of concessions must result in an official religion of the State and the establishment of the religion as a national institution. [50] 2. The appellants' case in this respect focused on the manner in which financial assistance was made available to non-government schools. It was said that at least from the commencement of the Schools Assistance Act 2008 (Cth) funds were provided to "approved authorities", referred to in Pt 9 of that Act. The scheme was maintained under the Australian Education Act 2013 (Cth), Pt 6 of which continued a system whereby funds provided for government schools were provided to the relevant State or Territory as the approved authority for those schools and, for non-government schools, to a body corporate approved by the Minister as the approved authority for the school. [51] In substance, approved authorities are bodies which administer education through the particular school on a not-for-profit basis. [52] Each approved authority is subject to ongoing policy requirements [53] and is subject to detailed controls in respect of financial accountability. [54] By creating the religious institution, Malek Fahd Islamic School Ltd, as an approved authority, receiving recurrent funding for the Hoxton Park campus, the appellants contended that the legislation established that body as an institution or instrumentality of the Commonwealth. 3. For this purpose, reliance was also placed upon Pt 9, Div 3 of the Australian Education Act, which provided for review of various reviewable decisions relating to the provision of education at a school. Somewhat ambiguously, the table of such decisions in s 118 referred, in col 3, to the "relevant person for the reviewable decision" which, in most cases was the approved authority for the school. The ambiguity arose from the fact that it did not appear from s 118 whether the relevant person was the decision-maker or played some other role. However, reference to ss 119 and 120 demonstrates that the relevant person is the person affected by a decision and who may apply for review. It is therefore not correct to suggest that the provisions for review incorporate the approved authorities as parts of the Commonwealth system of review: rather the contrary, approved authorities are given standing to challenge certain decisions made by the Minister or other decision-maker under the Act. 4. Even putting this latter point to one side, it may be accepted that approved authorities whether they be the State, secular institutions or religious institutions, play an integral role in the funding scheme created by the Commonwealth legislation. Nevertheless, that feature does not assist the appellants in the present argument. 5. In the course of their submissions, the appellants complained that the trial judge had been in error in seeking to undertake a comparative exercise as to the particular effects or consequences of the legislative regime for Malek Fahd School, as compared with other secular or religious educational systems obtaining Commonwealth funding. The submission was based on the proposition that the establishment clause in s 116 precludes the provision of any financial assistance to any religious institution. That submission runs counter to the understanding in Black as to what is meant by establishing a religion. On that approach, it is not sufficient that the challenged law provides funding to religious institutions unless it discriminates in some way between them. Thus the concept of establishment accepted in Black involves the preferential treatment, arguably to the extent of creating a "state religion" directed to one particular religion or denomination or division, to the exclusion of others. By contrast, the regime established under the Australian Education Act (and its predecessors) is neutral and non-discriminatory as between secular and other religious institutions and as between different faiths. The appellants' submission cannot succeed without departing from this aspect of Black, a course which is not open to this Court. Free expression 1. Perhaps curiously, the appellants placed their primary arguments in this Court, not on the establishment clause, but on the prohibition against laws imposing any religious observance and prohibiting the free expression of any religion. The two clauses may be treated together because the arguments presented were closely related. The manner in which the Australian Education Act was said to impose religious observance relied upon the suggestion that a law of the Commonwealth which provided funds to a religious school, which included in its syllabus the undertaking of religious activities, involved the imposition of religious observance. That was said to flow from the finding of the primary judge that "[t]he school obviously requires religious observance by pupils during their hours of attendance, which is presumably one of the reasons why parents enrol their children there." [55] 2. This argument fails for two fundamental reasons. First, central to the concept of "imposition" is the element of religious observance which is non-consensual. With respect to children, the source of any consent must be found in the beliefs and intentions of the parents. There is no suggestion that any parent is under any threat or improper pressure to send their children to a particular non-secular (or secular) school. No doubt such a choice is strongly influenced by the parents' religious beliefs: in that (relevant) sense the choice is entirely consensual. Further, whatever may have motivated a parent to send a child to a school which provides religious instruction of a particular kind, the Commonwealth is neutral as to that aspect of the child's education. It was not right to say that the Commonwealth required that the school provide religious instruction and hence imposed religious observance on the children. The fact that the school imposed such a requirement, and obtained funding from the Commonwealth, does not mean the Commonwealth imposed any such requirement. The funding criteria were silent as to this aspect of the school's curriculum. 3. Reliance upon the third clause invoked a similar, and possibly more remote, concept. Because, it was said, children at the school were required to undertake religious activities, even had they otherwise been willing participants, they were no longer willing participants because they were required by the school curriculum to undertake such activities. Accordingly they were no longer engaged in the "free exercise" of their religious beliefs. The argument is untenable. By analogy, an employee may be required, pursuant to his or her contract of employment, to undertake work in employment voluntarily entered upon, without the element of voluntariness being overridden or destroyed. Far less is it possible to say that the government, which enacts laws for the enforcement of contractual obligations, removes the employee's element of consensual participation. 4. It is notable that the appellants found no support for these far-fetched submissions in any judgment in the United States. Whether or not any support could be found, the submissions must be rejected. Standing 1. There was a dispute as to the standing of the appellants to seek relief in relation to the provision of funding for periods covered by the 2008-2012 funding arrangements under the Schools Assistance Act, which no longer had any relevant operation for Malek Fahd School. The distinction sought to be drawn between past and current funding arrangements is not determinative of the standing of the appellants. There will be cases in which unconstitutional conduct taken in the past, the effects of which are exhausted, may yet be the subject of complaint by an appropriate plaintiff, as for example in cases where there is a realistic chance that the conduct will be repeated in the future. [56] 2. The appellants' standing was, however, subject to challenge on a different basis. Like many challenges to standing, the success or failure of the challenge turns upon the nature of the case sought to be relied upon and hence cannot readily be evaluated until the court has heard full argument. 3. Although the appellants asserted that their claims were restricted to the invalidity of funding of the Malek Fahd school, there was no rational basis upon which that constraint could be upheld. The legislation did not purport to distinguish between religious institutions as recipients for funding, nor did the appellants suggest a basis on which such discrimination could take place. Absent such discrimination, the consequence of their success must be to invalidate the funding of all schools run by religious institutions. What purported to be a system of grants based on entirely secular educational principles, would then become a system of grants which were only available to secular schools. In that event there would be a real question as to whether the Commonwealth law, by depriving students at sectarian schools of a significant part of their funding would infringe on the injunction against laws prohibiting the free exercise of any religion. (Other questions might also arise.) 4. The individual appellant lived in the vicinity of the Malek Fahd school and relied on evidence that she had been adversely affected as to the amenity of her home in the course of construction of the school and by continuing noise and pollution caused by increased traffic. It appears that the incorporated appellant involved an organisation of individuals affected in similar ways, and which had objected to the development application for the school. 5. It is by no means clear on the evidence that the appellants had any interest, financial, physical or emotional, of a kind which engaged the bases of challenge set out above. They did not have children at secular schools (or if they did that fact does not appear to have been relied upon); they did not suggest that as taxpayers they were opposed to money being made available, indirectly, to faith-based non-government schools; nor did they have any sufficient interest in the control of educational outcomes sought to be achieved as the primary purpose of the legislation. In these circumstances, there is no authority which gives unqualified support for the proposition that they had standing to challenge the validity of the Schools Assistance Act or the Australian Education Act. 6. By contrast, in Davis v The Commonwealth [57] the Aboriginal plaintiffs had standing to challenge the Bicentennial Authority's legislation controlling the use of certain words and symbols in a way which restricted their commercial freedom to use those words and symbols. In Re McBain; Ex parte Australian Catholic Bishops Conference [58] an issue arose, somewhat indirectly, as to whether the interveners would have had a sufficient interest to challenge the operation of a federal anti-discrimination law which overrode a state legislative ban on providing IVF services to unmarried women. The interveners were responsible for hospitals which provided medical services, but there was no evidence that they would have been required to provide such services to unmarried women, assuming the invalidity of the state legislation. They sought to be joined at the trial, but did not pursue the application; their standing would have been doubtful. [59] 7. The authorities are by no means determinative of the present issue and need not be explored in detail. Two points should, however, be noted. First, the mere fact that a decision (or law) may have a physical or economic effect on a particular person does not mean that that person will have standing to challenge the decision or law. That will be so where the interference is in a functional sense unrelated to the matters to be considered by the decision-maker or unrelated to the purpose of the law. Thus, the decision of a government authority, the purpose of which is to maintain the quality and safety of pharmaceutical drugs, cannot be challenged by a competitor, albeit the decision to release a drug may have a significant commercial effect on the competitor. [60] Similarly, an association created to promote the respect and protection of human life from the moment of conception to natural death (and was opposed to abortion) did not have standing to challenge a decision under the Therapeutic Goods Act 1989 (Cth) because its interests did not involve the objects of the Therapeutic Goods Act. [61] The association was therefore not entitled to challenge a decision of the authority to allow a "morning after pill" to be trialled on the grounds that use of the drug might involve a breach of the criminal law. [62] 8. While the issues in this case having significant similarities with those raised in Black, it may be noted that no issue of standing arose in that case. The proceedings being brought by the Attorney-General on relation, the Court was not required to address the standing of the persons represented. Nevertheless Gibbs J, having concluded that the Victorian Attorney-General had standing to compel the Commonwealth to observe the Constitution, in the interests of its citizens, expressed doubt as to whether the individual plaintiffs would have had standing to sue: [63] "I hardly think that the fact that they are taxpayers, and in some cases parents of children at government schools, gives them a special interest in the subject matter of the action …." Nevertheless, he expressed no concluded opinion on the question. [64] 1. In a more recent case involving a challenge to the expenditure of Commonwealth moneys, Pape v Federal Commissioner of Taxation [65] the question of Mr Pape's standing was raised, but dismissed summarily. The parties conceded that he had a sufficient interest to seek a declaration that the tax bonus payable to him was unlawful. As the basis of such a declaration must have resulted in a similar conclusion with respect to the scheme generally, all members of the Court dismissed the proposition that he had no standing to argue the broader question of law. [66] 2. The appellants have no similar interest. It may be doubted that they have standing in the present proceedings. However, given the limited basis on which the challenge to their standing was raised, and the fact that the appeal must in any event be dismissed, it is not necessary to rule on this issue. Conclusion 1. In respect of other issues, I agree with Beazley P. I also agree that the appeal must be dismissed with costs. 2. MACFARLAN JA: I agree with the orders proposed by Beazley P and with her Honour's reasons for judgment. ********** Endnotes 1. Hoxton Park Residents Action Group Inc v Liverpool City Council (No 2) [2011] NSWCA 363; 256 FLR 156. 2. Hoxton Park Residents Action Group Inc v Liverpool City Council [2015] NSWSC 136 (Pembroke J) ("Hoxton Park"). 3. (1981) 146 CLR 559 at 619 (also known as the "DOGS" or "Defence of Government Schools" Case), (hereafter "Black"). 4. (1926) 38 CLR 399. 5. See also at 584-585 (Barwick CJ), 590-592 (Gibbs J), 619-620 and 650 (Wilson J). 6. Hoxton Park at [46] and [48]. 7. ICM Agriculture Pty Ltd v The Commonwealth (2009) 240 CLR 140; [2009] HCA 51. 8. (2010) 241 CLR 118; [2010] HCA 28; [30] (French CJ and Gummow J) and [61] (Heydon J). 9. (2009) 238 CLR 1 at [289] (Hayne and Kiefel JJ) and [606] (Heydon J). 10. J Quick and RR Garran, The Annotated Constitution of the Australian Commonwealth (1901 ed, Legal Books, Sydney, 1976) at par 405 (p 869). 11. (1957) 99 CLR 575 at 604 (Kitto J agreeing at 658). 12. Referring to Quick and Garran and Evatt J in Deputy Federal Commissioner of Taxation (NSW) v WR Moran Pty Ltd (1939) 61 CLR at 803. 13. (2009) 237 CLR 309; [2009] HCA 2. 14. Wurridjal at [75] (French CJ) quoting Dixon CJ in Attorney-General (Cth) v Schmidt (1961) 105 CLR 361 at 373. 15. (1969) 119 CLR 564. 16. Hoxton Park (No 2) at [27] and [28]. 17. Reynolds v United States 98 US 145 (1878) at 164; Everson v Board of Education of Ewing Tp 330 US 1 at 16 (1947). 18. 403 US 602 (1971) at 614. 19. See fn (17) above 20. Everson at 15-16. 21. Everson at 18. 22. 403 US at 612-613 (references omitted). 23. See [262] below. 24. Nadine Strossen, "Religion and the Constitution: A Libertarian Perspective" 2006 Cato Sup Ct Rev 7 at 18-19. 25. Referring to Amendment XV ratified in 1870. 26. US Constitution Amendment XIX, ratified in 1920. 27. 530 US 793 (2000). 28. 530 US at 801. 29. 530 US at 807. 30. 521 US 203 (1997). 31. 530 US at 808, quoting Agostini at 234. 32. 530 US at 809. 33. 530 US at 839-840. 34. 530 US at 868-869. 35. Black at 579. 36. Black at 580-581. 37. Black at 598 and 603. 38. Black at 604. 39. Black at 609. 40. Black at 615-616. 41. Black at 653. 42. See fn (17) above. 43. Black at 645-647. 44. Black at 583. 45. Black at 597. 46. Black at 606. 47. Black at 607. 48. Black at 610. 49. Annotated Constitution, p 951. 50. Black at 612. 51. Australian Education Act, s 71. 52. Australian Education Act, s 75(3). 53. Australian Education Act, s 77 and Australian Education Regulation 2013, ss 41-43. 54. Australian Education Act, s 78 and Australian Education Regulation, s 61. 55. Hoxton Park at [25]. 56. Plaintiff M68-2015 v Minister for Immigration and Border Protection [2016] HCA 1 at [23] (French CJ, Kiefel and Nettle JJ), [64] (Bell J), [112] (Gageler J), [235] (Keane J) and [349]-[350] (Gordon J). 57. (1988) 166 CLR 79. 58. (2002) 209 CLR 372; [2002] HCA 16. 59. Re McBain at [14], [21] and [26] (Gleeson CJ). 60. Alphapharm Pty Ltd v SmithKline Beecham (Aust) Pty Ltd (1994) 49 FCR 250. 61. Right to Life Association (NSW) Inc v Secretary, Department of Human Services and Health (1995) 56 FCR 50. 62. Right to Life at 68-69 (Lockhart J), 84-86 and 90 (Gummow J). 63. Black at 589. 64. Black at 590. 65. See fn (9) above. 66. Pape at [52] (French CJ), [158] (Gummow, Crennan and Bell JJ), [272]-[273] (Hayne and Kiefel JJ), and [400]-[401] Heydon J. Amendments 05 July 2016 - Coversheet - changing citation of "regs" to "ss" of Australian Education Regulations 2013. [42] - amending "Clause 10" to "Section 10". [77] - inserted "in the sense of" between "s 116" and "of ". [137] - deleted "is" between "was" and "no provision". [145] and [147] - changed "Mason CJ to "Brennan CJ". DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 05 July 2016