W & A McArthur Ltd v. Queensland

28 CLR 530
1920 - 1129A - HCA

(Decision by: Higgins J)

W & A McArthur Ltd
v Queensland

Court:
High Court of Australia

Judges: Knox CJ
Isaacs J

Higgins J
Gavan Duffy J
Rich J
Starke J

Hearing date: Melbourne: 5 October 1920; 6 October 1920; 7 October 1920; 8 October 1920; 11 October 1920; 12 October 1920; 13 October 1920; 14 October 1920;
Judgment date: 29 November 1920

Sydney.


Decision by:
Higgins J

The defence in this case admits in effect all the allegations of the statement of claim, and says that the claim-for declaration and injunction-is "bad in law." This pleading would cover an argument that the statement of claim discloses no cause of action: but such an argument has not been attempted by the defendants. If the Queensland Act and proclamation apply to the travellers of the plaintiff, it is the desire of all parties, as I understand, to have it declared whether the Act is valid or invalid. I confess, however, that I find it hard to see the cause of action. The case of Dyson v Attorney-General [F25] goes a long way, especially in its later phases, but not nearly so far as this case. I know of no cause of action arising out of the mere fact of prosecution, actual or threatened, unless it is alleged to be malicious; and then the person prosecuted must be the plaintiff. On the proceedings for a penalty against a traveller for the plaintiff, the point as to the constitutionality of the Act would be open to the traveller, and every other point that has been here raised. There is no analogy to proceedings in equity to restrain proceedings at law, where the ground used to be that the Court of law was not competent to entertain equitable doctrines. I think that I ought to express this doubt, as the matter will probably have to be some day further considered.

On the construction of the Act and the proclamation, I concur in the opinion that, if they are valid, the travellers of the plaintiff in Queensland are liable to a pecuniary penalty or imprisonment, under s. 12.

What, then, is the effect of the Constitution on the Queensland Act? The meaning of our Constitution must be found in its own words: the Constitution of the United States does not contain our s. 92. or our s. 107. Under s. 107 "every power of the Parliament of a Colony which ... becomes a State, shall, unless it is by this Constitution exclusively vested in the Parliament of the Commonwealth or withdrawn from the Parliament of the State, continue as at the establishment of the Commonwealth." The power to regulate inter-State trade, to make "laws" with respect to it, is vested in the Commonwealth Parliament by s. 51 (I.); but it is not expressed to be "exclusively" vested: contrast s. 52. Yet the power of the State Parliament to make a law restricting inter-State trade is, in my opinion, clearly "withdrawn" from the Parliament of the State by s. 92, as from the time that uniform duties of customs were imposed. The words are "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." Whatever the doubt as to these words applying to restrict the powers of the Federal Parliament under s. 51 (I.), there can be no doubt that they operate as a restraint on the State Parliament. "Free," in the context, means "exempt from restrictions in regard to trade" (Oxford Dictionary, sub "Free"). Already, under s. 90. the States were deprived of power to impose duties of customs or of excise, or to grant certain bounties, and all the State laws imposing such duties or offering such bounties, ceased to have effect; but there still remained other restrictions made by the States as against States, and a power to make such restrictions, and it was to meet such restrictions that s. 92 was inserted. For instance, South Australia absolutely prohibited the introduction of grapes from Victoria. This prohibition was originally owing to the danger of phylloxera, but the Act continued after the danger had ceased. Tasmania had an Act prohibiting the importation of fruit plants or other products packed in grass, straw, etc, if calculated to introduce into Tasmania the Queensland cattle tick (Contagious Diseases (Cattle) Act 1896). Queensland, in its turn, had an Act prohibiting the introduction of any plant, etc, likely to introduce any insect fungus or disease (Diseases in Plants Act of 1896, s. 4). These and other such restrictions were terminated by s. 92, and future restrictions of a similar character on trade, commerce or intercourse were forbidden. Section 91 is really an exception to the provision of s. 90 as to bounties, and, when s. 91 is seen in this aspect, s. 92 appears in its true character, as extending the application of the principle contained in s. 90-no more inter-State imposts (s. 90); no more State restrictions of any kind, present or future, on inter-State trade or intercourse (s. 92). There is not, to my mind, any ground whatever for confining s. 92 to State imposts; for State imposts had been already dealt with in s. 90.

The words of s. 92 have, of course, to be read with s. 112, which recognizes the validity of State inspection laws; and with s. 113, which makes an exception as to intoxicating liquors passing into a State or remaining there for use, etc; but these sections do not affect the position in this case. Nor does s. 92 prevent the application of the State laws as to health, morals, etc, after the goods which have passed into the State have ceased to be the subject of inter-State commerce.

It is not strictly necessary, according to my view, to determine whether s. 92 prohibits the Commonwealth Parliament as well as the State Parliament from restricting inter-State trade. But the point has been argued at much length, and, as our opinion on the subject must have a reaction on the main decision, I think it well to state my view. On the first reading of s. 92, the generality of the words-"trade, commerce, and intercourse among the States ... shall be absolutely free"-might seem to indicate that inter-State trade was to be free from all restrictions, whether State or Federal. Such a conclusion would leave an awkward gap in the Constitution; for it would mean that no authority in Australia, whether State or Commonwealth, could regulate any abuses of inter-State trade: but the fact that such a conclusion would be awkward is not by itself conclusive that there is not such a gap. It is to be noticed, however, that s. 92 follows two sections which impose or deal with prohibitions laid on States-as to customs, excise, bounties; and that the words "absolutely free" can reasonably be referred to a desire to prohibit State restrictions of all other kinds-especially such as I have instanced in the South Australian, Tasmanian and Queensland Acts. "Absolutely" does not mean "universally"; nor, when taken with "free," does it necessarily mean free from both Federal and State law-making powers; it may well mean "completely" as to the State power of restriction, the State power having been already partially taken away (as to border duties) by s. 90. But, finally, it is our duty to give such construction to s. 92 as will reconcile it with the other parts of the Constitution; and, if we are not to treat part of s. 51 (I.) as nugatory, we are forced to treat s. 92 as not denying to the Federal Parliament the power to make laws "with respect to trade and commerce ... among the States." Of course, that power is "subject to this Constitution"; but the question is, does s. 92 forbid the Federal Parliament to make such laws. We must not assume it. The restraints on the Federal Parliament in the exercise of this power are found, not in s. 92, but elsewhere in the Constitution; for that Parliament must not discriminate between States in its taxation (s. 51 (II.)), its bounties must be uniform (s. 51 (III.)), its trade, commerce and revenue laws must not give preference (s. 99); and as to intercourse see s. 117.

I am of opinion that this Act of Queensland is invalid so far as it imposes a penalty on travellers in Queensland of a New South Wales firm, for selling, agreeing to sell or offering for sale goods to be sent from the firm's warehouse in Sydney. The same conclusion has been reached under the United States Constitution in the series of cases known as the Drummer Cases (Robbins v Shelby County [F26] ). It is also clear that in the United States such a State law is invalid even though by its terms it applied equally to commerce within the State; discrimination in favour of State residents or State commerce is not necessary to be shown (State Freight Tax Case [F27] ; Robbins v Shelby County ). This conclusion against the Queensland Act does not strike me as being in the least inconsistent with the Wheat Case [F28] or with Duncan v Queensland [F29] . As one who was not a party to the decision in the former case, I may be allowed to say that, even if I were not bound by the decision, I should regard it as perfectly sound, so far as regards that part of it which establishes the validity of the New South Wales Act impugned in the case. The decision in Duncan's Case is equally binding on us, and is, in my opinion, equally sound, although I cannot personally adopt all the reasons given. Counsel for the plaintiff here urged that it is distinguishable, and it clearly is. The State can make laws with respect to property and its ownership; the Commonwealth can make laws with respect to inter-State commerce; and a State law with respect to property and its ownership is valid except so far as it is inconsistent with-repugnant to-some valid Federal law (s. 109). But in the present case the State Act is directly aimed at commerce, including inter-State commerce, forbidding sales except at certain maximum rates (s. 12); whereas in the former cases the Act transferred ownership in goods, contingently or with qualifications, from A to B-from the stockowner to the Imperial Government. In the former cases the Acts were not with respect to commerce at all, although indirectly they may have affected inter-State commerce, as all changes in property may. In the present case, the Queensland Parliament, as to property which is vendible and persons who are competent to sell, forbids any sale except at certain maximum prices; in the former cases, the wheat or the stock was merely ear-marked and appropriated to the British Government, or as it should desire. The prohibition against sale contained in s. 7 of the Meat Supply for Imperial Uses Act of 1914, discussed in Duncan's Case, was in aid of the ear-marking of the existing stock for the British Government; as if the words were "B is to have a first call on A's stock; therefore A must not sell to anyone else than B. But B can sell as he chooses." In short, s. 7 (1) merely prohibited A from selling property which had passed (or would pass in certain contingencies) to B. It enforced a right of property; it did not prohibit sale on the part of the true owner. The line is fine, as in all these cases; but it is clear. The British Government was to have unrestricted power of sale, and its sub-purchasers would have unrestricted power to sell, inter-State or intra-State. In making this statement I do not rely merely on the principle that the words "all persons" in s. 7 did not affect the King unless expressly named; but on the fact that by the express words of the Act the King was to have full power to dispose of any of the stock at will-for every contract was to be void "which may have the effect of prejudicing His Majesty in the full and unrestricted use, control, and disposal of any stock or meat (whether the same is or is not actually appropriated to His Majesty by an order made under this Act)" (s. 7 (2)).

Much of the difficulty of these cases would, I think, be avoided if we keep steadily in view the fact that we have to determine in each case what is the subject of the legislation-what subject is the Act "with respect to" what it effects-not what things or operations it may indirectly affect. As stated lately by the Chief Justice of the United States, it is an elementary proposition that "the States are without power to directly burden inter-State commerce, and that commodities moving in such commerce only become subject to the control of the States or to the power on their part to directly burden after the termination of the inter-State movement" (Rosenberger v Pacific Express Co [F30] ).