The same way the exam subjects do.
Your internal marks rank you, nothing else, so your final internal mark will correspond with the MW mark that makes that rank in your class. For example:
School Ranks
1.Person A
2.Person B
3.Person C
MW marks
Person B: 50/50
Person C: 42/50
Person A: 40/50
Therefore Person A, will get the top mark as their
internal, though they keep their own external and similarly with Persons B and C their marks will end up like this:
Person A: 50(internal), 40(external) 45(HSC mark)
Person B: 42(internal), 50(external) 46(HSC mark)
Person C: 40(internal), 42(external) 41(HSC mark)
Thats my understanding of the system, though I'm sure someone else could do a better job in explaining.