W & A McArthur Ltd v. Queensland
28 CLR 5301920 - 1129A - HCA
(Decision by: Gavan Duffy J)
W & A McArthur Ltd
v Queensland
Judges:
Knox CJ
Isaacs J
Higgins J
Gavan Duffy JRich J
Starke J
Judgment date: 29 November 1920
Sydney.
Decision by:
Gavan Duffy J
Section 51 (I.) of the Constitution enables the Federal Parliament, subject to the Constitution, to make laws with respect to trade and commerce among the States. In my opinion the expression "trade and commerce among the States" means the exchange of commodities by way of sale or barter between the citizens of different States, and embraces every act necessary to accomplish that purpose, including the transport of commodities from one State to another.
Sec. 90 runs as follows:"On the imposition of uniform duties of customs the power of the Parliament to impose duties of customs and of excise, and to grant bounties on the production or export of goods, shall become exclusive. On the imposition of uniform duties of customs all laws of the several States imposing duties of customs or of excise, or offering bounties on the production or export of goods, shall cease to have effect; but any grant of or agreement for any such bounty lawfully made by or under the authority of the Government of any State shall be taken to be good if made before the thirtieth day of June, one thousand eight hundred and ninety-eight, and not otherwise."
If s. 92 did not exist, the result of s. 90 would be that on the imposition of uniform duties of customs existing State tariffs would disappear, but thereafter the Federal Parliament might impose any restriction on inter-State trade and commerce which was permissible under s. 51, and a State Parliament under the powers reserved to it by s. 107 might impose any restriction which it could theretofore have imposed other than a duty of customs or excise provided that such restriction was not inconsistent with a law of the Commonwealth within the meaning of s. 109. What is the effect of s. 92 on this state of things? It runs as follows:"On the imposition of uniform duties of customs, trade, commerce, and intercourse among the States, whether by means of internal carriage or ocean navigation, shall be absolutely free. But notwithstanding anything in this Constitution, goods imported before the imposition of uniform duties of customs into any State, or into any Colony which, whilst the goods remain therein, becomes a State, shall, on thence passing into another State within two years after the imposition of such duties, be liable to any duty chargeable on the importation of such goods into the Commonwealth, less any duty paid in respect of the goods on their importation." The language of the section though in form affirmative is said in fact to prohibit any interference with the freedom which it prescribes, and we are asked to determine two questions:(1) To what Legislature or Legislatures does the prohibition extend? (2) What is the exact nature of the freedom which it vindicates? In answer to the first question I would say that the language of the section clearly controls both the powers conferred on the Federal Parliament and those reserved to State Parliaments. In the circumstances which I have stated, I can imagine no language more appropriate for the purpose of limiting the legislative powers of both classes of Legislature, or less appropriate for the purpose of limiting those of one class only. The freedom which the section confers, it establishes in a sphere beyond all Commonwealth or State powers by making it part of the Constitution. It is said that we should hold that the powers of the Federal Parliament are not affected by s. 92 because, if they were so affected, the power expressly given to that Parliament to legislate with respect to trade and commerce among the States would be gone, and no authority in Australia, Federal or State, could regulate any abuse of inter-State trade. This alarming conclusion is arrived at thus. Section 92 forbids any interference with inter-State trade and commerce, and ex hypothesi applies to State Parliaments. If it also applies to the Federal Parliament, that Parliament cannot exercise any of the legislative powers granted by s. 51 (II.). and the result is that there is no legislative authority. Federal or State, which can control inter-State trade and commerce. It would be deplorable that the suggested consequences should follow from an interpretation which gives their natural meaning to the words of s. 92, but that would not justify us in forgetting that we are Judges and imagining that we are legislators. If the words of s. 92 in their natural meaning were found to be inconsistent with s. 51 we might be forced to seek for some means of avoiding the apparent antinomy. But no such dilemma can arise here, whatever be the meaning of s. 92, if its provisions are part of the Constitution, because the power to legislate under s. 51 is subject to the Constitution. The vice in the suggested argument lies in assuming that s. 92 forbids every interference with inter-State trade and commerce; and this brings me to a consideration of the second question, namely, what is the exact nature of the freedom which the section vindicates? There are few epithets in the English language which extend over a larger area of meaning than the word "free" or vary more with the object qualified. The word "free" is often used to qualify the word "trade," and sometimes, though not so often, to qualify the word "commerce." When used with respect to trade and commerce among Sovereign States it ordinarily means no more than unrestricted by tariff or customs duties; it more rarely means free from all artificial restrictions or restraints conditioned on the international character of the trade or commerce; but freedom of trade and commerce never means freedom from regulation or control, or complete immunity from municipal law with respect to the acts which constitute such trade or commerce. No civilized nation has ever tolerated a trade or commerce, whether foreign or domestic, which was not subject to regulation and control both with respect to the method of carrying it on, and the general conduct of those who carried it on. It could not be contended that a treaty guaranteeing freedom of trade and commerce between two nations would enable the subjects of each, while carrying on such trade and commerce within the territory of the other, to ignore either the municipal laws regulating the general conduct of individuals within the State, or those prescribing the general conditions applicable to trade or commerce within the State. All that could be demanded under such a treaty would be equality of trading rights for the subjects of each nation in the territory of the other. I see no reason for attributing to the word "free" in s. 92 any larger meaning than that which it naturally bears in the collocation in which it is there used. Indeed, to do so would immediately create an inconsistency between s. 92 and s. 51 (I.), for it would leave no room for the operation of the latter. Section 92 does not divide, it consolidates; it does not create two streams flowing through the State side by side, yet distinct and separate like the waters of two newly met rivers; it preserves the even flow of Australian trade throughout the Commonwealth by preventing discrimination against inter-State as compared with intra-State operations just as s. 117 preserves the solidarity of Australian citizenship by preventing injurious discrimination between the residents of different States. Under s. 51 (I.) Parliament has complete dominion over a free inter-State trade and commerce subject to this, that it must not by any law or regulation of trade or commerce give preference to one State or any part thereof over another State or any part thereof (s. 99), nor abridge the right of a State or of the residents therein to the reasonable use of the waters or rivers for conservation or irrigation (s. 100); but because the trade and commerce are to remain free, Parliament must not fetter the acts which constitute such trade or commerce by any restriction or restraint conditioned on the fact that such trade or commerce is carried on between States. Whether a restriction or restraint is so conditioned is in every case a question of fact. A prohibition of or an impost on the import or export of a commodity would clearly be such a restraint, so also would be any injurious discrimination against foreign as compared with domestic products. In the Wheat Case [F31] the New South Wales Legislature had prohibited the export of wheat and by the same statute had expropriated the wheat, and we held that those who no longer owned the wheat could not complain that any restriction was put upon its export. In Duncan's Case [F32] the Queensland Legislature had prohibited the export of stock or meat, and we held that it was justified in doing so because the object of the statute was to expropriate such stock and meat as might be thought necessary and suitable for the needs of the King's army, and meantime to keep the whole mass in statu quo and subject to his accruing needs. In the present case the Parliament of the State of Queensland has not endeavoured to obstruct or burden the passage of any commodity into or out of its territory, nor, in my opinion, has it discriminated against inter-State trade or commerce. The enactment complained of is therefore not forbidden by s. 92, and as it is not inconsistent with any law of the Commonwealth within the meaning of s. 109, no question arises under that section.
It follows from what I have said that the State of Queensland is entitled to our judgment.