Federated Municipal and Shire Council Employees' Union of Australia v. Melbourne Corporation

26 CLR 508

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(Decision by: GRIFFITH CJ) Court:

Judges: Griffith CJ
Barton J (1)
Barton J (2)
Isaacs J (1)
Isaacs J (2)
Higgins J (1)
Higgins J (2)
Gavan Duffy J (1)
Gavan Duffy (2)
Powers J (1)
Powers J (2)
Rich J (1)
Rich J (2)

Judgment date: 20 June 1919

MELBOURNE

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Decision by:
GRIFFITH CJ

This case raises the question of the existence and extent of the immunity of municipalities as instrumentalities of Government of the States. The matter came before the High Court in Federated Engine-Drivers and Fireman's Association of Australiasia v Broken Hill Proprietary Co [No 1] ( 12 CLR 398 ) in 1911, when the Court intimated that, in its opinion, if a municipal corporation chooses to engage in what has lately been called "municipal trading", and joins the ranks of employers in industries, it is liable to the same Federal laws as other employers engaged in the same industries.

In that case various decisions of the Supreme Court of the United States of America were cited. This Court left undecided, without expressing any opinion upon it, the question whether, and how far, a municipality is subject to the jurisdiction or award of the Arbitration Court.

The principal American cases cited were the following: The Mayor v Ray ( 86 US, 468 , at pp 475-476), in which the Court said:

"A Municipal corporation is a subordinate branch of the domestic government of the State. It is instituted for public purposes only; and has none of the peculiar qualities and characteristics of a trading corporation, instituted for purposes of private gain, except that of acting in a corporate capacity. Its objects, it responsibilities, and its powers are different.... Our system of local and municipal government is copied, it its general features, from that of England.... They are not trading corporations and ought not to become such."

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Meriwether v Garrett, in which the Court said (102 US, at p 511):

"Municipal corporations are mere instumentalities of the State for the more convenient administration of local government. Their powers such as the Legislature may confer... This is common learning, found in all adjudictions on the subject of municipal bodies and repeated text writers."

Stoutenburgh v Hennick, in which Fuller CJ, delivering the judgment of the Court said (129 US, at p 147):

"It is a cardinal principle of our system of government, that local affairs shall be managed by local authorities, and general affairs by the central authority, and hence, while the rule is also fundamental that the power to make laws cannot be delegated, the creation of municipalities exercising local self-government has never been held to trench upon that rule. Such legislation is not regarded as a transfer of general legislative power, but rather as the grant of the authority to prescribe local regulations, according to immemorial practice, subject of course to the interposition of the superior in cases of necessity."

Pollock v Farmers' Loan and Trust Co, in which Fuller CJ said (157 US, at p 584): "A municipal corporation is the representative of the State and one of the instrumentalities of the State government." And the important case of South Carolina v United States ( 199 US, 437 )

The present case was argued at the September sittings of the Court, when argument on the main point was concluded, and the Court reserved judgment on it, leaving for further argument after judgment the application to the different forms of municipal activity of any general rule which it might lay down.

The mater now comes for our determination and I will give my opinion.

I regard these decisions of the Supreme Court of the United States as to the immunities of municipal corporations rather as historical expositions of the unwritten law which the thirteen colonies had brought with them from Mother Country and carried with them into the Union than as interpretations of the Constitution of that Federation. As such, they are entitled to very great weight. In the view of those eminent men, who were after all only stating matters of common knowledge, it was part of the unwritten law and of the system of English government which the colonists brought with them to America, that the functions of government were divided between the central Government and the local or municipal bodies, and the certain powers were allocated to these latter, not as agents or servants of the central Government, but as independant authorities, created by the Legislature, and subject of course to it, but who were entitled as independant organs of the Government of the Colony to equal freedom in the performance of their functions. And they did not find anything in the Federal Constitution which authorized any interference with this freedom. The doctrines of the law of master and servant, and of principal and agent, deal with matters on a lower plane, and are wholly beside the question.

In my opinion, this exposition of the law is historically applicable to the Australian Colonies. And it follows, in my opinion, that a municipal authority, in the discharge of the portion of the general mass of State functions which had been entrusted to it at the date of Federation, is entitled to the same immunity from Commonwealth interference as the State itself would be in the discharge of similar functions.