32.
expressed in that case about the ambit of s 51(xx). In particular, it does not explain the place taken by the distinction drawn by Westlake between the law regulating a corporation or the relations of its members to it and to one another, and the law governing the corporation's entry into relations with outside parties.
75 Griffith CJ pointed out[1] that there is a distinction between "acts which are ultra vires of a corporation and acts which, though otherwise within the powers of a corporation, are prohibited by positive law". Griffith CJ accepted that a law denying capacity to a corporation to enter into certain kinds of contract may fall within Commonwealth legislative power. "But the conditions governing the validity of a contract relating to any subject matter rests with the legislature having control of that subject matter, which, in the case of domestic trade, is the State legislature."[2] It was on this basis that Griffith CJ concluded[3] that:
"I think that they [the words of s 51(xx)] ought not to be construed as authorizing the Commonwealth to invade the field of State law as to domestic trade, the carrying on of which is within the capacity of trading and financial corporations formed under the laws of the State. In other words, I think that pl. xx. empowers the Commonwealth to prohibit a trading or financial corporation formed within the Commonwealth from entering into any field of operation, but does not empower the Commonwealth to control the operations of a corporation which lawfully enters upon a field of operation, the control of which is exclusively reserved to the States."
76 That analysis may be compared with that undertaken by O'Connor J. In the course of argument he had said[4] that "[t]he idea of sec. 51 (xx.) … is that what is generally known as the law as to companies should be put on a general footing all over Australia". But in his reasons O'Connor J expressed a narrower view.
