R v. Connare; ex parte Wawn

61 CLR 596

(Judgment by: Starke J)

Between: Regina
And: Connare
Ex parte: Wawn

High Court of Australia

Judges: Latham CJ
Rich J

Starke J
Dixon J
Evatt J
McTiernan J

Subject References:
Freedom of inter-State trade
Object of State lottery legislation

Legislative References:
Constitution (Cth) - s 92
Lotteries and Art Unions Act 1901 (NSW) No 34 - s 21

Hearing date: 28-29 March 1939
Judgment date: 17 May 1939

Melbourne (heard in Sydney)

Judgment by:
Starke J

Appeal by way of order nisi for prohibition pursuant to appellant rules of this court, s. IV.

The appellant was convicted of an offence under the Lotteries and Art Unions Act 1901-1929 (N.S.W.) for that he did offer for sale a ticket in a foreign lottery known as Tattersall's Consultation, conducted in the State of Tasmania. Tattersall's Consultations, it appears, are lotteries lawfully conducted in Tasmania under the law of that State: See Gaming Act 1935 (Tas.), Part II. Numbered tickets in these lotteries are issued and the holders of winning numbers, which are drawn by chance, become entitled to money prizes.

The appellant is a manufacturing chemist carrying on his business in Sydney, New South Wales. The respondent, Connare, went to his place of business, and some conversation ensued on the subject of lotteries. Ultimately the appellant said to the respondent: "I can let you have a ticket at any time in Tatts." Connare replied: "In that case there is no time like the present. I would like a couple of tickets in Tatts. if I could get them on the spot." The appellant produced two tickets in one of Tattersall's Consultations or lotteries, and gave them to Connare on his payment of the sum of five shillings for each ticket. The appellant added that he could get tickets for Connare at any time.

The Lotteries and Art Unions Act 1901-1929 provides in s. 21: "Whosoever sells or offers for sale or accepts any money in respect of the purchase of any ticket or share in a foreign lottery shall be liable to a penalty." A foreign lottery (s. 19) means a lottery conducted outside the State of New South Wales.

It is now contended that this provision contravenes s. 92 of the Constitution, which enacts that trade, commerce and intercourse among the States shall be absolutely free.

Lotteries are but a form of gambling, but it is claimed that the tickets had a money value and were the subject of trade and commerce and consequently that a sale in one State of tickets in a lottery lawfully established in another State constituted trade or commerce among the States: See Lottery Case , Champion v Ames. [F34] And it is said that the New South Wales Act, s. 21, interferes with trade and commerce among the States because it hinders or restricts the proprietors of Tattersall's from selling or placing their lottery tickets in New South Wales.

But there are observations in Roughley v New South Wales; Ex parte Beavis [F35] which suggest that no element of inter-State trade exists in the present case. Knox C.J. quoted there with approval the following passage from Hopkins v United States, [F36] at p. 295:

"Granting that the cattle themselves, because coming from another State, are articles of inter-State commerce, yet it does not therefore follow that before their sale all persons performing services in any way connected with them are themselves engaged in that commerce, or that their agreements among each other relative to the compensation to be charged for their services are void as agreements made in restraint of inter-State trade. The commission agent in selling the cattle for their owner simply aids him in finding a market; but the facilities thus afforded the owner by the agent are not of such a nature as to thereby make that agent an individual engaged in inter-State commerce, nor is his agreement with others engaged in the same business as to the terms upon which they would provide those facilities, rendered void as a contract in restraint of that commerce":

See per Knox C.J.; [F37] per Higgins J.; [F38] per Gavan Duffy J. [F39] The farm-produce agents did not, in the opinion of Knox C.J., in Roughley's Case, [F40] act as servants of the producers, and the business which each of them carried on was his own business of commission agent and not the business of the grower by whom the produce was consigned.

So in the present case it may be said that the appellant was not the agent of Tattersall's for the sale of lottery tickets and that the sale of lottery tickets was wholly his local or domestic business. But I venture to observe in the present case that the operations of the New South Wales Act may be said to restrict or hinder the proprietors of Tattersall's Consultations from selling their lottery tickets in New South Wales (O. Gilpin Ltd v Commissioner for Road Transport and Tramways (N.S.W.), [F41] at p. 209).

But it is unnecessary in the present case to decide whether the sale in this case was an intra-State or an inter-State transaction because, on the authorities as they stand, the New South Wales Act does not contravene the provisions of s. 92.

The freedom of trade, commerce and intercourse among the States, enacted by s. 92 of the Constitution, means freedom at the frontier or in respect of goods passing into or out of the State (James v The Commonwealth). [F42] But as I understand the authorities the question whether that freedom has been restricted or burdened depends upon the true character and effect of the Act. All the facts and circumstances such as the nature of the Act, its operation, the character of the business involved and its actual effect on the flow of commerce must be examined.

The main purpose of the Lotteries and Art Unions Act 1901-1929 is to prevent or suppress lotteries, and particularly, in ss. 19, 20 and 21, foreign lotteries. It is aimed at preventing illegitimate methods of trading, if sales of lottery tickets be regarded as trading: See James v The Commonwealth. [F43] It is said, however, that the legislation of New South Wales allows State lotteries (1930 No. 51) and discriminates against lotteries established in other States. There is no question that State lotteries are allowed in New South Wales under strict supervision and that the sale of tickets in foreign lotteries is prohibited. Foreign lotteries, over which New South Wales has no control, are regarded as inimical to the welfare of citizens of New South Wales, and an illegitimate method of obtaining their money. It may be that the legislation has also the effect of protecting the State lotteries from competition. But the true character of the Lotteries and Art Unions Act of New South Wales, ss. 19, 20 and 21, is to suppress gambling in foreign lottery tickets, and examined from the historical point of view, from the character of the Act, its function and its effect upon the flow of commerce, the Act does not, according to the criterion already mentioned, restrict or hinder the freedom of any trade across the frontier of the States.

The appeal should be dismissed and the order nisi discharged.