W & A McArthur Ltd v. Queensland

28 CLR 530
1920 - 1129A - HCA

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(Decision by: Knox CJ, Isaacs J, Starke J)

W & A McArthur Ltd
v Queensland

Court:

Judges:
Knox CJ
Isaacs JHiggins 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.

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Decision by:
Knox CJ
Isaacs J
Starke J

The following written judgments were delivered:

On 11th March 1920 the Parliament of Queensland passed the Profiteering Prevention Act of 1920. Section 12 provides by sub-s. 1 as follows: "It is unlawful for any trader, whether as principal or agent or whether by himself or by an agent, (a) to sell or agree to sell or offer for sale any commodity at a price higher than the declared price." Sub-s. 2 enacts that a wholesale trader offending is liable to a penalty not exceeding PD1,000 or imprisonment not exceeding twelve months, or to both such penalty and imprisonment. Further, sub-s. 3 enacts that in case of conviction the Court adjudicating shall also award compensation to the purchaser for loss and inconvenience. "Trader" is defined by s. 3 as "any person carrying on the business of selling any commodities," and the section declares that the term includes the agent of any such person. In the Government Gazette of 17th July 1920 there was notified by the Commissioner of Prices under the Act his declaration of the maximum prices at which calico, sheeting or sheets of all descriptions might be sold by a wholesale trader.

The plaintiff is a Sydney company carrying on the business of softgoods warehousemen, holding its stocks-which include calico, sheeting and sheets-in Sydney, and having neither warehouse nor any stocks in Queensland. Its business in the latter State is done in the first place by means of travellers who visit traders there and act for the plaintiff in the following ways: (1) they offer for sale goods of the descriptions sold by the plaintiff, to be delivered in Queensland; (2) they obtain offers to purchase goods of the descriptions sold by the plaintiff, and forward the offers to the plaintiff in Sydney, where they are accepted, and the goods are in fact despatched to the purchasers in Queensland; (3) they make agreements to sell goods of that description to be delivered in Queensland; and (4) they make agreements to sell goods of that description, stipulating that the goods are to be despatched from the plaintiff's warehouse in Sydney and delivered by plaintiff to purchasers in Queensland. All the several methods have been pursued since the Act was passed and the Gazette notification published, and at prices for calico, sheeting and sheets higher than the price declared by the Commissioner; and, unless prevented, the plaintiff Company intends to continue its established course of business. In this action the Company claims to restrain the State of Queensland, the Minister administering the Act and the Commissioner of Prices from instituting threatened prosecutions against its travellers and from enforcing the provisions of the Act in respect of the various classes of transactions mentioned.

The plaintiff's case is in protection of its civil rights, and is primarily founded on its rights as a resident in New South Wales, secured, as it claims, by s. 92 of the Australian Constitution, to engage by its agents in inter-State trade and commerce with residents of Queensland, uncontrolled by the provisions of s. 12 of the State Act. The Company contends that all the methods followed by its travellers constitute inter-State trade and commerce, and are protected by s. 92 of the Constitution. It also contends that the Act does not, on its true construction, apply to those transactions, or at all events to some of them. And lastly it contends that the terms of the Commissioner's declaration of prices do not include the case of a trader having no warehouse in Queensland.

It is desirable to consider these contentions in inverse order, because if it were found, plainly and apart from the provisions of the Federal Constitution, that none of the methods pursued by the plaintiff were struck at by the Act together with the gazetted declaration, no occasion would have arisen for considering the constitutional question at all. The defendants have demurred to the statement of claim on the ground that it discloses no cause of action.

The declaration of prices is certainly not artistically worded, but, when read with the Act and its substance considered, it appears on the whole to cover, to the same extent as the Act, the case of a wholesale trader who sells in Queensland whether his warehouse is situate in that State or elsewhere. With respect to the Act, the word "trader" is, as defined, and used in s. 12, sufficient, on recognized principles of interpretation where constitutional prohibitions are not involved, to include the case of a trader resident in another State provided the act complained of is done in Queensland. The cases referred to in Russell on Crimes and Misdemeanours, 7th ed., vol. I., at pp. 52 to 57 illustrate the general principle appropriate to such legislation. The context and general tenor of the Act favour the application of the principle to the plaintiff in this case, as a matter of construction apart from the question arising under the Constitution. So far as to persons affected.

Next, as to transactions affected. The expressions "sell," "agree to sell" and "offer for sale" point respectively to a sale in Queensland, an agreement made in Queensland for a sale, and the offering in Queensland of goods for sale. But, if the persons affected include persons who are residents of other States, then sales, agreements for sale and offers for sale, though taking place in Queensland, must include sales, agreements for sale and offers for sale of goods to citizens of other States, whereby the goods are to be forwarded to other States for the benefit of the people there. Consequently, in that event, the prohibition of the statute extends to penalizing transactions for the supply of commodities from Queensland to other States. The third question in this connection is as to the commodities affected. The Act is not very distinct as to whether it is intended to apply only to commodities which at the time of making the contract of sale, or the offer for sale, are situate in Queensland. If that is so, then of course the plaintiff is clear of the Act. Some of the provisions of the statute certainly look that way. For instance, s. 9, which specifies the circumstances which the Legislature has required the Commissioner of Prices to consider-so far as there are any specified-indicates that the Act is to be worked entirely from the standpoint of Queensland. It is the requirements of Queensland, the demand in Queensland, the market conditions of Queensland, which are to govern the prices at which even merchants in New South Wales, Victoria or any other State are to be compelled to sell or abstain from selling altogether. The cost to them in their respective States, the market conditions there, the fairness of their prices, having regard to their own local conditions, are apparently of no concern in relation to this Act. This certainly operates very much in favour of saying that the Act was not intended to affect merchants in other States selling their goods in Queensland, because one does not assume unfairness on the part of the Legislature. But, on the other hand, there are no words so restricting the Act, and, indeed, if the Act were so intended merely to operate in respect of goods locally situated in Queensland when the particular acts struck at took place, it would exclude all sales and agreements of sale and offers for sale of goods not yet in existence, as coal to be excavated, or butter or clothing or boots to be manufactured. That would be so great a futility that it cannot be reasonably entertained. The ultimate result of these considerations is that the Queensland statute appears to be intended to penalize the sales, agreements of sale and offers for sale in Queensland by merchants in other States of goods for the use of the people of Queensland, unless they sell or offer their goods on terms regulated by Queensland conditions. This policy is carried out in the gazetted declaration, by allowing the cost of transportation from the vendor's warehouse to the purchaser to be added to the otherwise fixed price, only in the case of "sales in all parts of the State, except the Petty Sessions of Brisbane." This is a clear discrimination in favour of sales in Queensland, but its effect, while not overlooked, is passed by as unnecessary to deal with.

This being on the whole the interpretation of the Act apart from constitutional restrictions, it is necessary to consider the effect of s. 92 of the Constitution. That section, therefore, must be interpreted by the Court for one of two purposes. If it be found that that section does not forbid a State Parliament restricting inter-State trade and commerce by such a provision as s. 12 of the Act, then the last mentioned section interpreted by the ordinary relevant rules of construction should be taken to apply, and to apply validly, to the transactions now under consideration. But if, on the other hand, s. 92 of the Constitution does forbid a State Parliament restricting or fettering inter-State trade and commerce by such a provision as s. 12 of the Act, then, assuming the transactions referred to or any one of them to be inter-State trade and commerce, one of two results must follow: either the Court will regard the State Act as excluding any intended breach of the constitutional restriction, or will treat as invalid s. 12 so far at all events as it offends against s. 92 of the Constitution.

In case of alleged conflict between a State Act and s. 92 of the Constitution, the questions for consideration may be thus expressed:(1) Does the State Act, read without reference to any provision of the Federal Constitution, purport to restrict trade and commerce generally, i.e. inter-State as well as intra-State? (2) If yes to (1), does the Constitution prevent the apparent restriction of inter-State trade? (3) If yes to (2), does the State Act nevertheless validly operate on intra-State trade?

Section 92.-Sec. 92 is in these terms: "On the imposition of uniform duties of customs, trade, commerce, and intecourse among the States, whether by means of internal carriage or ocean navigation, shall be absolutely free." It is not, and cannot, be denied by the defendants that s. 92, whatever it means, binds the State of Queensland to leave the plaintiff's inter-State commerce with Queenslanders "absolutely free"; but, say the defendants, that does not prevent the State from passing a law rendering the plaintiff liable to fine and imprisonment merely because it engages in that commerce on terms voluntarily and mutually agreed on, but at a price higher than that dictated by the State. The punishment is incurred, not because incidentally in the course of engaging in inter-State commerce some State law made on an entirely different subject is infringed, but because the State insists on the inter-State commerce itself, unconnected with any other subject, being conducted not according to the free will of the respective citizens of Queensland and New South Wales but according to the limitations imposed on it by the State Queensland. If not so conducted, it must be abstained from altogether, under pain of fine and imprisonment. Nevertheless, say the defendants, they have left that trade "absolutely free" within the meaning of s. 92. Can it be said that a State, when it penalizes persons engaging in inter-State trade and commerce by fine and imprisonment if it is carried on contrary to restrictions directly prescribed, at the same time leaves it "absolutely free"? Such a contention is as untenable as the argument advanced in this case that the State, though it were entirely to forbid the entry of all goods from other States, would nevertheless leave inter-State trade and commerce "absolutely free" within the meaning of s. 92.

The decision of this Court in Duncan's Case ^[F1] was naturally the corner stone of that contention. In that case it was held, for various reasons, that the State of Queensland, without completely divesting the owners of their property in cattle, could validity prohibit them-citizens of Queensland-from supplying the needs of New South Wales by selling the cattle to their fellow Australians there, the statutory prohibition needing no better foundation than the mere will of the Parliament of Queensland, legislating for the peace, order and good government of that State alone. This was held to be perfectly consistent with leaving inter-State trade, commerce and intercourse "absolutely free." By parity of decision, it is urged the same view should be held of the Act of 1920. It is argued that the doctrine applied in that case should be extended to support a statute of Queensland which goes beyond its own citizens, which penalizes with fine and imprisonment merchants of New South Wales, should they ever venture to set foot in Queensland, if they send travellers simply to exhibit goods for sale in Queensland, except on terms dictated by the State of Queensland. It matters not that the purchasers in Queensland send their orders to New South Wales, that the contract is a New South Wales contract, that the goods sold are New South Wales goods, that they are despatched from New South Wales consigned to the Queensland purchaser to become his on arrival in Queensland: if only the New South Wales merchant, in making the contract in his own State, by there accepting a Queensland offer obtained by solicitation of his agent in that State, departs from the restriction imposed by the Queensland Act, whatever the circumstances of his own State may be, he is guilty of an offence under the Act, and he, and his travellers, if caught in Queensland, may be fined PD1,000 and imprisoned for twelve months. This also is urged as quite consistent with the absolute freedom of inter-State trade. If such a contention could be upheld, it would, in our opinion, render s. 92 practically useless. It would be idle in such an event to say that border duties and State bounties are abolished-that would be purely nominal. If the goods themselves can be prohibited, if commercial dealings between the States can be restricted to dealings on the basis of such prices as the State fixes to suit its own special conditions, then there is no practical freedom even from border duties and bounties. It is the old inter-colonial trade war perpetuated in an outwardly different form. Victoria, for instance, might fix prices for cattle which would admirably suit Victorian graziers and place a severe disadvantage on graziers in New South Wales desiring to sell cattle in Victoria; and the prices so fixed could be so arranged as to have the same practical effect as either a customs duty or a bounty, according to the aspect from which it is regarded. In our Constitution, s. 92 was designed to ensure that inter-State trade and commerce should be national and beyond controversy. The arguments, however, which are now advanced to cut down the natural meaning of s. 92 relate to (a) the extent of the subject matter of the section, viz. "trade, commerce, and intercourse"; (b) the nature of the absolute freedom predicated of it: and (c) the authority which is restrained by the section from violating the absolute freedom declared. We shall examine these in order.

(a)

Trade, Commerce, and Intercourse among the States.-This, it will be seen, is the key of the whole position. Once determine what is comprised in "trade, commerce, and intercourse," then, as the "absolute freedom" extends to the whole of it, many of the suggested difficulties vanish on the instant. It stands to reason that if "trade, commerce, and intercourse" embrace not only the act of transporting goods and persons across the border of adjacent States but the whole transaction of exchange and travel between States, the protection of s. 92 is as applicable to the initial and the final steps as to the one single intermediate step which takes place at the very boundary. And further, if that is so, it at once disposes, not only of the notion that inter-State trade and commerce are recognized only at the border, but also of the contention as to the nature of the freedom postulated, because inter-colonial contracts were never subject within State boundaries to pecuniary imposts of the nature of customs duties. One view insisted on by the defendants was, however, that "trade, commerce, and intercourse among the States" was confined to the mere act of transportation of goods across the border, and a grudging assent was given to personal passage from one State to another independent of trade and commerce. This attitude was necessary preparatory to the contention as to the meaning of "absolutely free." We have therefore to examine the matter. The terms "trade, commerce, and intercourse" are not terms of art. They are expressions of fact, they are terms of common knowledge, as well known to laymen as to lawyers, and better understood in detail by traders and commercial men than by Judges. But as Judges we are taken to know and do in fact in this instance know the general import of the words. The particular instances that may fall within the ambit of the expression depend upon the varying phases and development of trade, commerce and intercourse itself. Aviation and wireless telephony have lately added to the list of instances, but the essential character of the class remains the same. "Trade and commerce" between different countries-we leave out for the present the word "intercourse-has never been confined to the mere act of transportation of merchandise over the frontier. That the words include that act is, of course, a truism. But that they go far beyond it is a fact quite as undoubted. All the commercial arrangements of which transportation is the direct and necessary result form part of "trade and commerce." The mutual communings, the negotiations, verbal and by correspondence, the bargain, the transport and the delivery are all, but not exclusively, parts of that class of relations between mankind which the world calls "trade and commerce." We shall confine ourselves to the narrowest references possible in view of the arguments addressed to us. Judicial expositions of the term "trade and commerce" (unless specially defined for the purpose of a particular statute) are naturally founded on the general understanding of the people among whom the Judges live. English jurisprudence has not often called for judicial pronouncements on the subject, but some there are. It will be sufficient for the present purpose to refer to two. The first is Bank of India v Wilson ^[F2] , where some passages occur having considerable bearing on the present discussion from more than one standpoint. Kelly C.B. said ^[F3] :"We are bound to put a large and liberal construction upon any provisions in any Act of Parliament, where the construction proposed to be put upon it is in favour of the trade and commerce of the country. Undoubtedly, if we are to take the terms `for the purposes of trade' as relating only to the business of buying and selling, no one can say that there is any buying or selling in carrying on the business of a telegraph company. It was never the intention of the Legislature so to limit the meaning of the word `trade.' It is not only the literal meaning of the word which is to be regarded. In literature of all descriptions, both in prose and verse, we find that the word `trade' is often used in a much more extensive signification than to indicate merely the operation or occupation of buying and selling. Why are we so to limit it in a case of this nature? I cannot feel any doubt but that really the object of the Legislature was to protect the commercial business of the country." And it was held by a majority of the Court, Kelly C.B. and Pollock B., that a telegraph company was carrying on a trade, not because an Act so defined its business, but in the broader signification of the word. The second case is Commissioners of Taxation v Kirk <sup>[F4]</sup> , at p. 592, where Lord Davey, for the Privy Council, says: "The word `trade' no doubt primarily means traffic by way of sale or exchange or commercial dealing." And then says that it "may have a larger meaning." The addition of the phrase "among the States" excludes purely domestic trade and commerce, but does not alter the nature of the operations which constitute "trade and commerce" wherever it takes place. The argument that "trade and commerce among the States" was limited to mere transportation of goods over the border would, if sound, necessarily limit similarly "trade and commerce with other countries." The views expressed in the cases just cited are, as we have said, merely statements of the accepted meaning of English words, and are fully borne out by the way in which the words "trade and commerce" have been constantly used. For instance, see Reeves's History of the English Law (1814), 3rd ed., vol. II., pp. 392 and following, and the references he gives to English legislation, going back to Magna Charta in its protection under various Kings of foreign merchants. One of the confirmations of the Charta will be presently referred to. In America, where the definition of "trade and commerce" has come more often within the function of the Court, the meaning of the phrase as a fact of life has received repeated attention. We leave aside various collateral doctrines as to how long the incompetency of State legislation to affect the subjects of inter-State commerce lasts. They are beside the present inquiry. We look only to the meaning attached to the words-ordinary English words-meaning the same in point of essentials to an American merchant, lawyer or writer as to an English merchant, lawyer or writer. In Welton v Missouri ^[F5] , at p. 280 Field J., speaking for the Court, said:"Commerce is a term of the largest import. It comprehends intercourse for the purposes of trade in any and all its forms, including the transportation, purchase, sale and exchange of commodities between the citizens of our country and the citizens or subjects of other countries, and between the citizens of different States." In the very recent case of Public Utilities Commission v Landon ^[F6] , at p. 245 the Court said: "Inter-State commerce is a practical conception and what falls within it must be determined upon consideration of established facts and known commercial methods." It is therefore impossible to limit the "trade and commerce" either "among the States" or "with other countries" to the mere act of transportation over the territorial frontier. The notion of a person or a thing, tangible or intangible, moving in some way from one State to another is no doubt a necessary part of the concept of "trade, commerce, and intercourse among the States." But all the commercial dealings and all the accessory methods in fact adopted by Australians to initiate, continue and effectuate the movement of persons and things from State to State are also parts of the concept, because they are essential for accomplishing the acknowledged end. Commercial transactions are multiform, and each transaction that is said to be inter-State must be judged of by its substantial nature in order to ascertain whether and how far it is or is not of the character predicated. A given transaction which taken by itself would be domestic, as, for instance, transport between two points within a State, may in a particular instance be of an inter-State nature by reason of its association as part of a larger integer, having as a whole the distinctive character of commerce between States. On the other hand, a transaction which is inherently of an inter-State character, as passage of goods between two States, is none the less inter-State because a contract out of which it arises is itself a domestic contract. The mode of fulfilment of the contract may be optional, one mode being intra-State and the other (the one assumedly adopted) being by inter-State movement, and in that case the inter-State movement remains inter-State whatever the impelling motive may be. The meaning of the expression "trade and commerce among the States" must be the same, in s. 51 (I.) and s. 92, and in both must embrace all that is ordinarily comprised within the term "trade and commerce" when taking place "among the States." With respect to "intercourse," it is only necessary to add that this word, as in Smithers's Case ^[F7] , includes non-commercial intercourse. We should not omit to notice one argument founded on the words in s. 92 "whether by means of internal carriage or ocean navigation." The point made for the defendants was that these words indicated a limitation to "transportation." But the argument proves too much. It would exclude every person and article not carried. In the first place, the words are not descriptive or limiting; they are to prevent limitation. The word is not "if" but "whether," and the phrase referred to means that however the trade, commerce and intercourse passes among the States, whether wholly within the continent of Australia or by way of the sea, the absolute freedom predicated shall be maintained. Such a provision is only natural in such circumstances. It is like the expression "as well by land as by water" in Magna Charta respecting the freedom of foreign merchants to trade in the Realm, or like the expression "full freedom and intercourse of trade and navigation" in the Act of Union between England and Scotland. To treat those words as words of limitation cutting down the very nature of trade, commerce and intercourse, would not only reverse their office, but would overlook the fact that even transportation of goods inter-State does not begin or cease at the border. Coal sent from New South Wales to Victoria may be destined for merchants in the interior of the latter State, and manufactures of Victoria may be destined for (say) Goulburn. Is the protection as minute as the contention suggests?

(b)

Absolutely free.-The primary meaning of these words used as they are with reference to governmental control, is that the subject matter of which they are predicated is to be "absolutely free" from all governmental control by every governmental authority to whom the command contained in the section is addressed. The expression "absolutely free" naturally means "free" as "trade, commerce, and intercourse," and does not extend beyond the subject matter spoken of. It is not said of "goods" or "persons," but of the acts which constitute "trade, commerce, and intercourse." In the Wheat Case ^[F8] Isaacs J. observed that trade, commerce and intercourse consist of acts not things. "Absolute freedom" in respect of "trade, commerce, and intercourse," does not connote privilege to break all other laws. Liberty is not equivalent to anarchy or licence. Though there is "absolute freedom" in every Victorian to cross into New South Wales and mingle with his fellow Australians there without the least hindrance or condition on the part of the State of New South Wales, it is his "intercourse" only which is unfettered, not the man himself under all circumstances. If the man, while in New South Wales, steals or cheats or begs, or injures persons or property, or disturbs the public peace, or is in such a condition as to constitute a danger to his fellows-matters wholly distinct from "intercourse"-he is as amenable to the laws of the State on those subjects, so far as they are unaffected by s. 109 of the Constitution, as any permanent resident of the State. If he brings goods into the State, he is free to do so, and to pass through the State with them (say) to Queensland, equally without hindrance or condition by State law, so far as regards the passage through. But if, for instance, the goods are dangerous, as gunpowder or wild cattle or a mad dog, or are stolen or offensive, he cannot deny his obligation to submit in respect of them to whatever laws are in force in the State on those subjects. The constitutional freedom predicated begins and ends with respect to the act of "trade, commerce, and intercourse." The position is well illustrated by Story in his work on the Constitution, 5th ed., vol. II., at p. 635, where he deals with the provision in the American Constitution that "Congress shall make no law abridging the freedom of speech or of the press." He points out this was not intended to allow a man to say what he pleased without responsibility. He has no right to injure others or to destroy the rights of the State. That would imperil civil society. It means simply that "every man shall have a right to speak, write, and print his opinions upon any subject whatever, without any prior restraint, so always that he does not injure any other person in his rights, person, property, or reputation; and so always that he does not thereby disturb the public peace, or attempt to subvert the government." Similarly here. The State cannot, in our opinion, either by laws directly and openly applying to trade and commerce, or by laws creating discrimination, which is the same thing (see per White J. in Pullman v Kansas ^[F9] , at p. 65), impose a prior restraint on "trade, commerce, and intercourse among the States." It need hardly be said that a restraint is prior, though the penalty is subsequent, for the fear of punishment or other consequence must deter. And the State cannot enact that prior restraint on inter-State trade, commerce and intercourse, whether it attacks inter-State trade, commerce and intercourse alone, or in company with its own domestic trade and commerce. The subjects are distinct, and the State cannot annul the protection given by s. 92 by mingling the subject matter beyond its control with matter lawfully under its control. If authority were needed for this proposition, it exists in the case of Macleod v Attorney-General for New South Wales ^[F10] , at p. 458. That case has been cited on many occasions, and for several purposes, and the generality of its language in some respects has been discussed. But on the point to which we now refer there can be no doubt whatever. It is as to the effect of including in a general term in a statute some matters which there is no jurisdiction in the Legislature to regulate. The Act unquestionably dealt with New South Wales bigamists, and that was right enough, just as Queensland has here dealt with domestic trade and commerce. But the question in Macleod's Case was whether the Act also dealt with foreign bigamy, which New South Wales had no right to penalize. Lord Halsbury L.C. said (1): "If the wider construction had been applied to the statute, and it was supposed that it was intended thereby to comprehend cases so wide as those insisted on at the Bar, it would have been beyond the jurisdiction of the Colony to enact such a law." The words there were general, as here, and embraced in their literal meaning both New South Wales and foreign bigamy, but it was no answer to say that foreign bigamy was not struck at simply because it was foreign. If included, it was struck at, and that would have been beyond the power of the Legislature. So here, if inter-State commerce is comprehended in the enactment, the State has infringed the restriction declared by s. 92 as to that subject matter, because it would be struck at as trade and commerce. But ordinary domestic laws not directed to trade and commerce are under its own control-though in some cases subject to overriding legislation of the Commonwealth. By those ordinary domestic laws, it is quite competent to the State-apart from some other restriction on its powers-to enact what it pleases as to the consequences of any personal conduct or any condition of property independent of the relation of person or property to trade and commerce, which is in fact inter-State. Much was said as to the law of contract. It was urged with a great deal of earnestness that the State must be permitted to enact laws on contract or else the subject of inter-State trade and commerce must go unregulated. But the Commonwealth Parliament has power under s. 51 (I.), as will be seen, to make laws with respect to inter-State trade and commerce, and this power is wide enough to cover all necessary regulation of that subject matter. Moreover, the law of contract as such does not concern itself with any special subject of contract. It relates to the essential characteristics of contract in general, such as capacity, offer, acceptance, consideration, form, performance, mistake, rescission, discharge, waiver and so on. As to all these and similar things the State is free. But where an enactment says "no matter what the form of the contract, no matter how competent the persons, how desirable the commodity, how honest the transaction, how unchallengeable on any ordinary ground anyone and anything connected with the matter may be, yet the parties shall not be free to arrange their own price for this particular commodity," that is not a branch of the law of civil contract, but a branch of the law of trade. The Supreme Court of America had very much the same question to consider in 1915 in Rosenberger's Case ^[F11] , and the question was similarly dealt with on general principles of reasoning, at p. 52, in the very clear judgment delivered by White C.J., to which we simply refer. The defendants also pressed the point that "absolutely free" meant only free from "pecuniary imposts." To insert by implication into s. 92 after the words "absolutely free" an expression equivalent to "from pecuniary imposts only" would, in our opinion, be an interference with the express provisions of the Constitution and opposed to the decision in Amalgamated Society of Engineers v Adelaide Steamship Co ^[F12] . In Duncan's Case ^[F13] that contention was rejected by five out of seven members of the Court-see per Griffith C.J. (at pp. 572-573), Barton J. (at p. 589), Isaacs J. (at p. 618), Higgins J. (at p. 630) and Powers J. (at p. 644). No opinion on this point was expressed by the other members of the Court. Apart from those expressions of opinion-for they were dicta only, though very distinct and reasoned dicta-the matter appears to us transparently plain even approaching it as res nova. The critical words are "absolutely free" without any immediate verbal limitation. Whatever limitation exists must arise from the nature of the subject matter, and the context. The subject matter we have already dealt with, and have shown that no suggestion of anarchy or licence can properly be used to restrain the force of the words "absolutely free." The context is said to indicate the phrase "from pecuniary imposts only." How? Because it is said that in s. 90 reference is made to "duties of customs and of excise." But one answer is that as s. 92 is intended at all events to include a prohibition to the States, that section was not needed to prevent the imposition of State customs and excise duties because s. 90 had already made them impossible. What other "pecuniary impost" would be possible was asked during the course of the argument, but the only instance suggested was that workers engaged in moving goods at the border might be required to have a licence. Another answer to the argument is that bounties are, equally with customs and excise duties, referred to in s. 90. They must, therefore, if the argument is at all sound, be equally included in s. 92. But they are not "imposts," and so that word would not be suitable in any case. But most of all it must be remembered that laws imposing duties of customs have from time immemorial included provisions for prohibiting imports altogether. And when s. 90 declared that on the imposition of uniform duties of customs, that is, by the Commonwealth Parliament, the States' power of imposing duties of customs should cease, it meant that their power of prohibiting the entry of goods whether from abroad or from another State should cease. The words "absolutely free" in s. 92 cannot, therefore, be confined to pecuniary exactions or customs laws, but in order to have any substantial effect must, unless some better reason be found, have their natural meaning of absolute freedom from every sort of impediment or control by the State with respect to trade, commerce and intercourse between them, considered as trade, commerce and intercourse. This was most definitely stated by Griffith C.J. in the Wheat Case ^[F14] . In Duncan's Case ^[F15] the decision of Griffith C.J., Higgins J. and Powers J. rested in the main, if not wholly, on the proposition that the Act then under consideration effected an expropriation pro tanto, and that consequently the case was governed by the decision in the Wheat Case. If that be taken as the ground of their decision the real question decided was as to the true construction of the Queensland Act, and the decision is therefore no authority as to the effect of the language used in the State Act now under consideration. But in that case the Act contained a provision independent of that which was relied on as amounting to an expropriation, namely, a provision prohibiting any sale of cattle without the consent of the Colonial Secretary, and this provision is in substance indistinguishable from a provision prohibiting any sale above a declared price. Gavan Duffy and Rich JJ. were of opinion that the prohibition was not directed against inter-State trade, commerce or intercourse, but against any dealing that might prejudice the King's option to take what he needed for his army, and that therefore the Act did not restrain inter-State trade, commerce or intercourse as such. This seems to us to make the validity of the Act dependent on the fact that the prohibition against sale was incidental or preparatory to expropriation, and to rest the decision on the authority of the Wheat Case. But in the Wheat Case a complete change of ownership was immediately effected by the Act, and the new owner was left free to deal with the wheat as he pleased. The prohibition by a State Legislature of inter-State sales of commodities either absolutely or subject to conditions imposed by State law is, in our opinion, a direct contravention of s. 92 of the Constitution, and the freedom guaranteed by that section is so fundamental a provision of the Constitution that it is not permissible for a majority of a Full Bench of this Court in full agreement as to constitutional principle and interpretation to follow the decision in Duncan's Case ^[F16] if in their opinion it is wrong in law. Especially is that so in this instance in view of the previous decision of this Court in Foggitt, Jones & Co 's Case ^[F17] . To profess to distinguish it would create a real inconsistency. It would leave standing two decisions that are not really reconcilable. It would embarrass both Commonwealth and States with respect to their constitutional position in relation to inter-State trade, commerce and intercourse. It would make the validity or invalidity of State legislation depend on whether a particular form of words had been used. One case would say it is unlawful for a State to declare that "the owner of goods shall not sell them inter-State," while the other case would say it is lawful for a State to declare that "goods shall not be saleable by the owner" or that "the owner of goods shall be incapable of selling them." The only course open to us is to say that, having regard to the provisions of s. 92 of the Constitution. Duncan's Case ^[F18] was not, in our opinion, rightly decided, and that the Constitution was correctly interpreted in the case of Foggitt Jones & Co ^[F19] .

(c)

Is the Commonwealth bound by section 92?-The present case has involved a closer examination of this question than any previous occasion upon which the Court has considered it. The result has been to convince us, notwithstanding dicta in previous cases, that the true office of s. 92 is to protect inter-State trade against State interference, and not to affect the legislative power of the Commonwealth. Inter-State trade is by other sections guarded against all possible Commonwealth action which could intentionally give an advantage to any State over another. The trade and commerce power in s. 51 (I.) is not there qualified. But the taxation power in s. 51 (II.) is accompanied with a provision against discrimination between States and parts of States. Pl. III., giving legislative power with respect to bounties, requires uniformity. The references in s. 88 and other sections to customs duties indicate that they must be uniform. Section 99 forbids preferences. These provisions ensure that border duties or other pecuniary imposts or encouragements or any legislative contrivances tending to destroy the commercial equality of opportunity between the States are forbidden so far as the Commonwealth Parliament is concerned. Moreover, these provisions would all be largely, and in some instances entirely, unnecessary if s. 92 were directed at the Commonwealth. They are, however, essential because, when s. 92 is attentively read in its setting, it is not difficult to trace the line of thought running through the group of sections of which it forms a part. Chapter IV. is headed "Finance and trade." The earlier sections of that chapter are concerned with the Commonwealth and with transfers from the public service of the State to that of the Commonwealth. Then comes a cluster of provisions designed to place the control of the foreign and inter-State trade and commerce of Australia ultimately in the hands of the Commonwealth as representing the whole nation; and to remove that trade and commerce from the hands of the States, whose jealousies and local policies had occasioned so much antagonism and inconvenience, and whose inability from the nature of the subject to deal severally with inter-State transactions in their entirety was a legal truism (cf. Cohen v South-Eastern Railway Co ^[F20] ). It was recognized that, pending the enactment of uniform Commonwealth customs duties, the State duties had to continue and with these duties the various prohibitions and restrictions which formed part of the same policy and the same laws. The States were left free even to enact any laws on those subjects they pleased, subject to certain restrictions as to bounties, until Commonwealth duties were imposed. Nevertheless, the Constitution (s. 86) placed the interim administration of those laws and of the bounty laws in Commonwealth hands. The Commonwealth was in this domain a mere collector and administrator of State laws, and after paying its own expenses maintained a book-keeping system. Section 90 provided that when the Commonwealth enacted its uniform customs duties the States' power to pass customs, excise and bounties laws ceased. Now, up to that time no Commonwealth restriction on inter-State trade could possibly have been in contemplation. The financial provisions looking to the solvency of the States in the book-keeping period entirely precluded any idea of Commonwealth disturbance of the situation before uniform duties were established. Up to that time the only restrictions on inter-State trade were those of the States. And to those s. 92 was and is directed. Its meaning is that from the moment the Commonwealth assumed legislative control on a national basis of the customs, all State interference with inter-State trade and commerce should for ever cease, and for that purpose Australia should be one country. It would have been idle to say that from that time Commonwealth interference should cease, because, according to the contemplation of the Constitution, it had never begun; and not only would s. 92 be useless for that purpose, but it would be mischievous. Although the provisions quoted are sufficient to guard the States from improper disturbance of natural commerce by Commonwealth legislation, s. 92, if it applied to the Commonwealth, would, in our opinion, practically nullify s. 51 (I.) altogether, and render impossible such measures as the Australian Industries Preservation Act, the Secret Commissions Act, the Sea-Carriage of Goods Act, and exclusive provisions in the Post and Telegraph Act, so far as they relate to inter-State transactions. This result would ensue in the case of the Commonwealth, whether s. 92 were read as a prohibition simpliciter, or as involving the discrimen suggested that the restriction is not to be conditioned upon the "circumstance of passing from one State into another" (per Griffith C.J. in Duncan's Case ^[F21] ). As that is the only condition on which the affirmative power in s. 51 (I.) is exerciseable, it follows that s. 92 would be a simple negation of s. 51 (I.).

One observation made by the Privy Council in the Colonial Sugar Refining Co 's Case ^[F22] , and repeated in John Deere Plow Co v Wharton ^[F23] , at p. 338, is very pertinent to s. 92. Quoting from the latter case, the passage runs thus: "If there is at points obscurity in language, this may be taken to be due, not to uncertainty about general principle, but to that difficulty in obtaining ready agreement about phrases which attends the drafting of legislative measures by large assemblages."

The Effect of including inter-State Regulations in a State Act.-Assuming, as we have decided, that s. 92 prevents any effective restriction being imposed on inter-State trade by a State Legislature, the question remains whether a State Act purporting to place restrictions on trade generally without express words of distinction, can be treated as effectively restricting intra-State trade. This question must depend on the terms of the State Act, and in our opinion the proper rule to apply in determining it is that where the State Act does not by express words or necessary implication make the restriction on intra-State trade dependent or conditional on the effective restriction of both inter-State and intra-State trade, it should be held to operate on intra-State trade.

We then have to consider whether any of the four methods of transacting business above detailed are outside the operation of the Act, because they are of an inter-State character. The first and third of these methods do not necessarily involve any act done outside Queensland or any transaction of an inter-State character. The goods offered for sale or agreed to be sold are not stated to be either by express stipulation or necessary implication supplied from New South Wales, or anywhere outside Queensland. A contract of sale if effected or the delivery of goods agreed to be sold might, at the option of the vendor, for all that appears, be consummated entirely within the State of Queensland. If so, it is impossible to say these transactions are of an inter-State character. A situation having considerable resemblance to this arises in provisions found in England and other parts of the Empire for service of writs out of the jurisdiction where breaches of contract take place within the jurisdiction. In Comber v Leyland ^[F24] a defendant abroad contracted to sell goods sent to him and remit the proceeds to England by bills, and he sold the goods and kept the proceeds. It was held that since his contract could all be performed abroad, no writ could be issued in England for service abroad. The first and third methods, as alleged, are consistent with either domestic or inter-State character. If the vendor elects to supply the goods from New South Wales, the actual movement of the goods from State to State would, of course, be inter-State trade and commerce; and would be protected accordingly. But the "offer for sale" and the "agreement for sale" would not be changed in character, and they are all we are concerned with as to the two methods mentioned. As to the second method, the traveller in Queensland does an act by which he aids or abets or becomes knowingly concerned in the making of a contract in New South Wales which, if done in Queensland, would be an offence under s. 12. By the terms of s. 29 (7) he is deemed to have committed the offence itself, and is punishable accordingly. Now, the thing done outside Queensland which is imputed to the traveller, namely, a contract made according to the second method, is similar to the first and third methods; that is, it is a contract for goods which neither by the expressed terms of the contract nor by its implications are necessarily deliverable from any State but Queensland, and, therefore, is not shown to be an inter-State transaction. The offence, consequently, as far as appears is one relating to purely domestic trade. The fourth method, according to the criterion of inter-State trade, commerce and intercourse above stated, is distinctly an inter-State transaction.

For the reasons stated, the plaintiff fails as to the first three methods and succeeds as to the fourth.