42.
94 Notions of comity do not have any useful place in considering the questions about ambit of legislative power that arise in the present matters. Comity assumes the legislative competence of each of the jurisdictions concerned and would have one jurisdiction give effect to rules whose content is prescribed by the law of the other jurisdiction. But in a federation, the extent of the legislative power of the several integers of the federation is the very question that must be examined. It is not a question whose answer may be assumed, or resolved by appeal to notions of comity. Moreover, relying on notions of comity is apt to invoke presuppositions about allocation of legislative power between the integers of the federation that are not easily distinguished from a reserved powers doctrine. So, for example, the analysis made by Isaacs J of the consequences of s 51(xx) not authorising a law providing for incorporation depended, in important respects, upon his identifying the consequences for federal legislative power that were thought necessary to preserve the relevant State power. As Isaacs J said[1]:
"Creation and continued existence of a corporation connote full and unalterable capacity; and that necessarily implies internal administration, which, besides, presents as a substantive subject every reason for retention in the same hands as being a subordinate power to that of creation, and none for transference alone to a national legislature". (emphasis added)
To draw the line between what is internal and what is external, as Griffith CJ did[2], between matters of formation and corporate powers and objects on the one hand, and the corporation's operations on the other, necessarily reflects a conclusion about the content of federal legislative power which stems not from the terms in which the power is granted, but from a priori assumptions about division of power.
95 Adopting a distinction which is derived from choice of law rules and distinguishes between matters internal and external to a corporation approaches the question in a way that distracts attention from the issues that must be considered. Those issues focus upon the text of s 51(xx) and the ambit of the power it confers on the federal Parliament, not upon such matters as whether, for example, a corporation's dealings with persons the corporation hopes will become its unsecured note-holders are "internal" or "external" dealings.
