McCloy v New South Wales
High Court of Australia · 2015
McCloy v New South Wales (2015) 257 CLR 178
A law caps political donations and bans them from property developers. It clearly burdens political communication. What sequence of questions decides whether that is allowed?
Structured proportionality has not become a compulsory form of words. Gageler CJ and Jagot J describe "[t]he flexible application of all or any of the steps of structured proportionality" as a "tool of analysis", "express or ritual invocation of which is by no means necessary in every case" ([49]). Gordon J expressly agreed with that paragraph and said at [72] that in that case it was not "necessary (or helpful) to apply the three steps of structured proportionality". So an answer that marches through the stages because the stages exist has misread where the law now stands; the stages are a way of organising reasons, and whether they help depends on the case.
IT IS A TOOL, AND IT NEED NOT BE RECITED. Ravbar v Commonwealth of Australia (2025) 99 ALJR 1000. JAGOT J records that from inception this approach has been described as "an analytical tool rather than as a doctrine", as having "evident utility as a tool", and as not "the only criterion by which legislation that restricts a freedom can be tested" -- and then holds that "no description of the analysis which structured proportionality involves can or should be understood as requiring formulaic recitation of each of its three elements, still less recitation of the labels by which these elements have been described (suitability, necessity, and adequacy in balance)". So an answer is not wrong for failing to march through the three stages by name, and one that recites the labels without doing the work is not thereby right. BEECH-JONES J GOES FURTHER ON WHY HE USED IT AT ALL: "In circumstances where the parties framed their submissions in this case solely by reference to the approach in McCloy, I will apply structured proportionality as a 'tool of analysis' and accordingly address suitability, necessity and adequacy. However, at least in this case an analysis of all those criteria reduces to the same point" -- and he notes that in Babet he agreed with Gageler CJ and Jagot J on structured proportionality. A Justice who applies the test because that is how the case was argued, and finds the three criteria collapse to the same point, is using it as a tool rather than treating it as a required structure. That is not a rejection of it: his Honour applies it and does not say it is wrong.
ONE JUSTICE NOW SAYS THE TEST MAY BE DEAD, AND THE MAJORITY DECIDED WITHOUT IT. Hopper v Victoria [2026] HCA 11, 15 April 2026. EDELMAN J, on the three stages McCloy states: "On any view, the first question in this structure is redundant", because "[s]ince purpose is identified objectively, a purpose that is not rationally connected with the reasonably expected effect of the law cannot be the purpose of the law"; and "[t]he third question also has little role to play". He then puts it at its highest: "[t]he inutility of the first question and little role for the third, together with the antipathy towards any test based upon structured proportionality now expressed by a majority of this Court, may mean that a test based on structured proportionality should now be treated as dead" -- preferring that to "leaving structured proportionality as a mere tool, apparently without even precedential effect, to be deployed in unidentified ways and in unidentified cases". What he would keep is the second question, the transparency of asking whether the burden is reasonably capable of being seen as necessary. The antipathy he refers to is that expressed in Babet v The Commonwealth [2025] HCA 21 at [49], [72] and [242], and Ravbar v The Commonwealth [2025] HCA 25 at [29], [101], [343] and [427], which his footnote 129 collects.
THE MAJORITY DECIDED WITHOUT THE TEST. The reasons of GAGELER CJ, GORDON, JAGOT AND BEECH-JONES JJ at [1]-[69] decide the implied freedom question without using the word "proportion" -- or the word "Lange" -- at all. They frame it as whether the burden is justified in pursuit of a legitimate purpose. WHAT A STUDENT SHOULD DO. McCloy still states what it decided, and it has not been overruled: no majority has said the three stages are wrong, and Ravbar shows a Justice applying them when the parties argue that way. But do not present the three stages as THE test the third Lange question requires. State the question -- whether the law is reasonably appropriate and adapted to advance a legitimate object compatibly with the constitutionally prescribed system of government -- and use the stages as a tool for answering it, saying that is what you are doing.
What happened?
The Election Funding, Expenditure and Disclosures Act 1981 (NSW) capped political donations, prohibited property developers from making them, and restricted indirect campaign contributions. McCloy and others said those provisions impermissibly burdened the implied freedom of political communication and were invalid.
What did the Court decide?
The provisions were valid. The prohibition on political donations by property developers "does not impermissibly burden the implied freedom of communication on governmental and political matters contrary to the Constitution", and the other challenges failed too ([94]).
The reason the case is taught is the framework set out in the joint reasons of French CJ, Kiefel, Bell and Keane JJ. The Lange questions are restated: does the law effectively burden the freedom in its terms, operation or effect; are its purpose and means legitimate, in the sense of being compatible with the constitutionally prescribed system of representative government ("compatibility testing"); and is it reasonably appropriate and adapted to advance that object ("proportionality testing") ([2]).
Their Honours were careful about what they were importing. Proportionality criteria are "a source of analytical tools which, according to the nature of the case, may be applied in the Australian context" ([3]), and accepting their utility "does not involve acceptance of the application of proportionality analysis by other courts as methodologically correct" ([4]).
Proposition
What is the principle?
Where a law burdens the implied freedom of political communication, the third Lange question — whether the law is reasonably appropriate and adapted to advance a legitimate object — is answered by a proportionality test in three stages ([2]). The law must be suitable, "as having a rational connection to the purpose of the provision"; necessary, "in the sense that there is no obvious and compelling alternative, reasonably practicable means of achieving the same purpose which has a less restrictive effect on the freedom"; and adequate in its balance, "a criterion requiring a value judgment, consistently with the limits of the judicial function, describing the balance between the importance of the purpose served by the restrictive measure and the extent of the restriction it imposes on the freedom".
Why does this case matter?
Because of what the framework does to the shape of an argument. Lange never licensed an impressionistic answer. At [23] the joint reasons say validity is “to be determined, not by” a side-by-side comparison with the constitutional text, nor by asking whether the provisions are reasonably necessary for a sufficiently important purpose, “nor by an impressionistic judgment as to whether the impugned provisions are consistent with the freedom”; the test “requires a more structured, and therefore more transparent, approach”. But submissions treated it as one at large, and the criteria were left to be supplied case by case. What the staged inquiry adds is articulation: generally applicable criteria, stated in advance. Once the inquiry is staged, a law must satisfy each requirement to be justified, so failing any one of them is enough to defeat it — and a court that finds a failure early need go no further. That cuts both ways: a plaintiff who puts everything into one stage has narrowed their own case, and a respondent who answers only that stage has not finished. Read a post-McCloy judgment and you can usually see exactly where the disagreement sits; read a pre-McCloy one and you frequently cannot.
The case is also a live example of a court importing a foreign analytical method while refusing the jurisprudence attached to it. The joint reasons take the German-derived stages as tools and say in terms that this is not an endorsement of how other courts use them. Whether that separation holds is one of the things members of the Court have disagreed about ever since.
Exam and application relevance
Do not simply recite the stages, and do not assume you must. Later authority treats structured proportionality as a tool of analysis rather than a required incantation, so say why the structure helps in the case in front of you — or, if it does not, work the Lange question directly. Nor is any one stage compulsory as a ground: adequacy in balance can decide a case by itself.
If you do use the stages, get the necessity threshold right, because this is where answers lose marks. It is not enough to point to an alternative that is equally effective and less burdensome. The alternative must be obvious and compelling, and reasonably practicable. Name it, and show that it was available, that it would achieve the same purpose, and that its effect on the freedom would be less restrictive. An assertion that some less restrictive measure must exist is not an argument.
At the third stage, name both sides of the balance: the importance of the purpose the restriction serves, and the extent of the restriction it imposes on the freedom. Then say what each amounts to on these facts. The Court described this as a value judgment made "consistently with the limits of the judicial function" — that limit is part of the test, not a caveat on it, so do not simply announce which side is heavier.
Check your understanding
Your client's best point is that Parliament could have achieved the same result with a disclosure requirement rather than a ban. What must you establish about that alternative before it defeats the law?