Amalgamated Society of Engineers v Adelaide Steamship Co Ltd

28 CLR 129
1920 - 0831A - HCA

(Judgment by: Higgins J)

Between: Amalgamated Society of Engineers
And: Adelaide Steamship Co Ltd

Court:
High Court of Australia

Judges: Knox CJ
Isaacs J

Higgins J
Gavan Duffy J
Rich J
Starke J

Subject References:
Constitutional law
Interpretation
Rule in D'Emden v Pedder
State instrumentalities
Jurisdiction of President of Commonwealth Court of Conciliation and Arbitration

Legislative References:
Commonwealth of Australia Constitution Act (Cth) - 63 & 64 Vic c 12 s v
The Constitution - ss 51, 106-109
Conciliation and Arbitration Act 1904 (Cth) - s 4
State Trading Concerns Act 1916 (WA) No 12 - Act

Hearing date: SYDNEY 26 July 1920; 27 July 1920; 28 July 1920; 29 July 1920; 30 July 1920; 2 August 1920
Judgment date: 31 August 1920

MELBOURNE


Judgment by:
Higgins J

The Minister for Trading Concerns of Western Australia, and the State Implement and Engineering Works and the State Sawmills (both under his control), are three out of eight hundred and forty-four respondents to a plaint. They carry on operations in which members of the claimant organization are employed; and for profit, in competition with outside employers. The question is, substantially, are they amenable to the jurisdiction of the Commonwealth Court of Conciliation and Arbitration, and should they be included in the finding of the High Court under s. 21AA as being parties to the dispute. They in fact dispute-oppose-the claims in the plaint.

There stands at present a decision of the Full High Court, the unanimous decision of the three original Justices of the Court, to the effect that the railway servants of a State (New South Wales) are outside the jurisdiction of the Conciliation Court (Federated Amalgamated Government Railway and Tramway Service Association v New South Wales Railway Traffic Employees' Association). [F54] But the decision is now directly impugned by the claimant; and it is our duty to reconsider the subject, and to obey the Constitution and the Act rather than any decision of this Court, if the decision be shown to have been mistaken.

So far as the Act is concerned, there can be no doubt that the Federal Parliament intended State undertakings to be subject to the Court's powers of conciliation and arbitration. For, under s. 4 of the Act, the words "industrial dispute" include "any dispute in relation to employment in an industry carried on by or under the control of the Commonwealth or a State, or any public authority constituted under the Commonwealth or a State." The position which this Court took in the Railway Servants' Case [F55] was that the Parliament had by these words exceeded its powers under the Constitution.

Looking now at the Constitution, and interpreting it simply as if we were not under the constraint of any authority, the words used in s. 51 are general and unrestricted as to pl. XXXV., and there is not the slightest indication that the power conferred on the Federal Parliament as to legislation on the subject of the placitum was to stop short at State industries or activities. The Parliament is there given power "subject to this Constitution ... to make laws for the peace, order, and good government of the Commonwealth with respect to ... (XXXV.) Conciliation and arbitration for the prevention and settlement of industrial disputes extending beyond the limits of any one State." Putting on one side any difficulty as to the precise force of the expression "industrial disputes" (for we have here definite industries carried on for profit and in competition), it is clear that the expression means the same thing whoever is the employer-person or firm or company or State. Fitters pass from an engineering firm to the Government railway shops; they do the same kind of work in both places; they claim the same rates in both places; the dispute is the same in both places; the union acts as to both places. It is quite as much to the interests of the community to preserve the continuity of operations in the railway shops as in the works of the firm. The fundamental rule of interpretation, to which all others are subordinate, is that a statute is to be expounded according to the intent of the Parliament that made it; and that intention has to be found by an examination of the language used in the statute as a whole. The question is, what does the language mean; and when we find what the language means, in its ordinary and natural sense, it is our duty to obey that meaning, even if we think the result to be inconvenient or impolitic or improbable. Words limiting the power are not to be read into the statute if it can be construed without a limitation (per Bowen L.J. in R. v Liverpool Justices: [F56] and see King v Burrell). [F57] The Parliament is given a power here to make any law which, as it thinks, may conduce to the peace, order and good government of Australia on the subject of pl. XXXV., "subject to this Constitution." There is no limitation to the power in the words of the placitum; and unless the limitation can be found elsewhere in the Constitution, it does not exist at all.

But there is even more reason in this case than usual for not treating this power as limited. For it is embedded in a series of other powers, as to some of which there is an express limitation with regard to State functions. In pl. XIII. the subject is "Banking other than State banking." In pl. XIV. the subject is "Insurance other than State insurance." Yet even in these cases any Commonwealth legislation may, by the following words of the placita, apply to State banking and State insurance if "extending beyond the limits of the State concerned." These latter words correspond with the words in pl. XXXV., and show the intention of the Constitution to be that the Federal Parliament may regulate banking or insurance or industrial disputes which extend beyond one State, even if the State is banker, or insurer or employer. Moreover, pl. II. gives a power of "taxation" to the Commonwealth; but there is an express exception in s. 114 of "taxation" on property of any kind belonging to a State. These exceptions would not be necessary if the power to legislate on the subjects stated did not include, but for the exception, a power to make legislation binding on the States. The express exception in one case prevents the implication of the exception in the other case: Expressio unius exclusio alterius. The British Parliament, in conferring the Constitution, has said that the Parliament of the Commonwealth may not apply its legislation to State banking or State insurance or (in taxation) to State property: but it has not said that the Parliament may not apply its legislation to industrial disputes between the State and its employees, provided that the dispute extends beyond the limits of any one State. It is only where the meaning is not clear that we are entitled to weigh probabilities or expediency. But even if the meaning were not clear, probabilities and expediency are in favour of the view that the Constitution, in its legislation with the object of securing continuity of operations in industries, would not forbid the extension of the same benefit to the States. Indeed, in a country such as Australia, where the State activities are more numerous than in most countries, and where such a large proportion of the population is in State Government employment, it is extremely unlikely that such a power as that contained in pl. XXXV. would be withheld in its operation from employment in the service of the State. Moreover, unless those employed in the State service are to be subject to regulation under pl. XXXV., as well as outside employees, the object of the placitum must often be defeated. I mentioned in the Wheat Lumpers' Case [F58] the difficulty which arose as to the Victorian coal mines. The State had the principal coal mine undertaking, and the private employers, in competition with the State, could not give to their employees terms which they would have otherwise been willing to give, unless the State were bound to give similar terms. In the Wheat Case itself, some men, employed by the State, were carrying or moving bags of wheat to a stack; and other men, employed by shipowners and others, were carrying or moving the same bags to the ships. Under the doctrine hitherto adopted, the Court of Conciliation was able to conciliate or arbitrate as to one set of men, and unable to do so as to the other set. Contrasts as to the conditions of the respective sets of men were sure to arise, and did arise; but the Court could not prevent the unrest which the contrasts caused. If, as in Western Australia, the State carry on the butchering business, how can a dispute be effectively settled if the State enterprise be not bound? Counsel for the respondents here, and for the States intervening, say, however, that as to some of the subjects mentioned in s. 51, other than banking and insurance, there is an exception implied that State activities are not to be touched; but they have failed to show any discrimen whereby this Court can distinguish the subjects as to which Parliament can apply its legislation to the States, and the subjects as to which it cannot. Certainly, if there were to be a discrimen between the subjects, as to the power to apply Commonwealth laws to State activities, it would be most extraordinary to find industrial disputes in the class of subjects as to which the States are not to have the benefit of the machinery devised by Parliament in aid of continuity in industrial operations.

On ordinary principles of interpretation, therefore, it would seem clear that it is for Parliament to say whether it would include the State industries or activities in its legislation under pl. XXXV. or not. Parliament consists of the King, Senate and House of Representatives (s. 1 of Constitution); and if the King object to be bound by a bill he can refuse his assent thereto, or disallow the Act (s. 59); and there is express provision for reserving a bill for his assent (s. 60). I have already stated that the Federal Parliament has actually expressed its will that State industries should be subject to the powers of the Court of Conciliation.

But it has been urged that because the Constitution does not itself say that the Acts passed under s. 51 (XXXV.) shall bind the Crown, there is no power for Parliament to bind the Crown. The same reasoning would apply, of course, to Acts passed under s. 51 as to immigration and emigration (XXVII.); to bills of exchange and promissory notes (XVI.); to currency, coinage and legal tender (XII.); to patents and copyrights (XVIII); to aliens (XIX.); to bankruptcy and insolvency (XVII.), etc Suppose that under the common law-or under express State legislation-the Crown has priority over all other creditors, it is argued that a Federal law as to bankruptcy, enacting that Crown debts are to be paid pari passu with other debts, would not bind the State! The true position I take to be that the rule as to the Crown's rights not being affected by an Act unless by express words or by necessary implication applies, not to a Constitution, but to the Acts made by the Parliament under the powers of the Constitution. The opening words of s. 51 give to the Parliament power to make laws for the peace, order and good government of the Commonwealth on the subjects mentioned in that section; the power is to be construed as co-extensive with the terms used, to their full purport (Story on the Constitution, ss. 424, 426); and if Parliament think that to apply its laws to the States would conduce to that object, the peace, order and good government of the Commonwealth, it can say so. Parliament has actually said so, as to the Commonwealth Court of Conciliation, by s. 4 of the Commonwealth Conciliation and Arbitration Act. If the Parliament cannot bind the Crown by its Act-the "State Crown," so called-unless the Constitution say that it may bind it, then it would follow that no Act of the Victorian Parliament (for example) can bind the Crown. and the numerous Acts passed by the State Parliament which purport to bind the Crown are invalid. For the words of the Imperial Act conferring on the Victorian Parliament the power to legislate do not mention the Crown: "There shall be established in Victoria ... one Legislative Council and one Legislative Assembly ... and Her Majesty shall have power by and with the advice and consent of the said Council and Assembly to make laws in and for Victoria in all cases whatsoever" (18 & 19 Vict. c. 55, Schedule I., s. 1.). According to O'Connor J. in R. v Sutton. [F59] the doctrine that the King is not to be treated as bound unless named does not apply to a Constitution at all. The rule rests on the presumption that the King, the legislator, is making laws for his subjects and not for himself. It applies to a State Act as between the State Government and the people subject to the State laws: as to a Federal Act as between the Federal Government and the people subject to the Federal laws; it does not apply to a British law (the Constitution) as between the British Crown and the Crown in right of the State. By the Federal Constitution, the King in Parliament (the British Parliament) is, as it were, creating a new agent; and the principle of the rule is inapplicable in such a case, or in determining the powers of one agent in relation to another agent. In Sutton's Case wire-netting belonging to a State was removed from control of the Customs by executive order of a State Minister, and this Court held the removal to be illegal, although the Crown was not named in the Customs Act. So, too, in the very next case reported (Attorney-General for New South Wales v Collector of Customs for New South Wales) [F60] it was held that the State was bound to pay customs duty on steel rails which it owned and was importing for the purposes of the State railways.

Moreover, it is evident, as I have stated, from the form of the placita in s. 51 of the Federal Constitution, that the Federal Parliament was to have power to bind the State Crown except so far as the power to bind it is expressly negatived, as in pl. XIII, and pl. XIV. The power to legislate is plenary, for the peace, order and good government of the Commonwealth, within the limits of the subjects mentioned in s. 51. The Federal Parliament, "when acting within those limits ... is not in any sense an agent or delegate of the Imperial Parliament, but has, and was intended to have, plenary powers of legislation, as large, and of the same nature, as those of Parliament" (i.e., the Imperial Parliament) "itself." This was said by Lord Selborne and the Judicial Committee of the Privy Council as to an Act of the Council of the Governor-General of India; [F61] and-to say the least-no ground has been suggested for denying power of the same nature to the Parliament of Australia. The same principle was applied by the Judicial Committee to legislation of the Province of Ontario under the British North America Act 1867 (Hodge v The Queen; [F62] and see Powell v Apollo Candle Co) [F63] and other cases: it has not yet been suggested that the Imperial Parliament cannot bind the Crown: and it follows from these cases that if the Imperial Parliament can bind the Crown, the Federal Parliament can bind it within the limits of its allotted subjects.

In connection with this subject, much argument has been addressed to s. V. of the Constitution Act-what we call the "covering sections" of the Constitution. It provides that that Act and all laws made under the Constitution "shall be binding on the Courts, Judges, and people of every State ... notwithstanding anything in the laws of any State." I take s. 51 of the Constitution as defining subject matters for legislation, and covering s. V. as defining the persons who are to obey the legislation. Once we find a valid Federal law-say, a law as to trade and commerce with other countries-the Courts and Judges and people of every State must obey it, whatever the State laws may say to the contrary. Organized bodies of persons, such as incorporated companies or municipal corporations or States, are not mentioned: for they always act through "people"-human beings: and these human beings have to obey the valid Federal Act, whatever the State law says. The State law is to have no efficacy for them as against the valid Federal law: they must obey the Federal law as if the State law did not exist, and whether they act for State or for corporation or company. Here, the Minister for Trading Concerns is, by the Trading Concerns Act (W.A.), constituted a corporation. The successive Ministers have the rights and duties conferred by the Act, and must obey the Act except so far as it is inconsistent with a valid Federal Act: but to the extent of the inconsistency the Minister has to obey the Federal Act, not the State Act (s. 109 of Constitution).

The position seems so clear that my only difficulty lies in certain decisions of this Court, particularly the decision in the Railway Serrants' Case. [F64] It was there held by the original Justices of this Court, in 1906, that the Federal Parliament could not, through the Court of Conciliation which it created, "interfere with" the railways of New South Wales. I pass by the dyslogistic connotation of the words "interfere with," in reference to a Federal power and a Federal Act which were designed to aid employers and employees alike, and to secure the continuity of operations; for I have sufficiently referred to this matter in other cases. In a previous case (D'Emden v Pedder) [F65] this Court had held that a Federal officer was not liable to a penalty under a Stamps Act of Tasmania for giving to the paying officer an unstamped receipt for salary, the receipt being given in pursuance of a duty imposed by the Commonwealth Audit Act 1901. But that was a case in which it was said that the State law was interfering with the Commonwealth activities, over which the Commonwealth Parliament had exclusive power (see p. 111). For the Commonwealth officer was employed in the Post Office department, the control of that department had been transferred to the executive government of the Commonwealth, and under s. 52 the Federal Parliament had the exclusive power to make laws with respect to matters relating to the department. The supremacy of the Federal legislation (see s. 109) would be a sufficient ground for the decision, although that was not the only ground stated: and the principle as enunciated by Griffith C.J. was: [F66] "When a State attempts to give to its legislative or executive authority an operation which, if valid, would fetter, control, or interfere with, the free exercise of the legislative or executive power of the Commonwealth, the attempt, unless expressly authorized by the Constitution, is to that extent invalid and inoperative."

But in the Railway Servants' Case [F67] the Full High Court went further. It said that the doctrine laid down in D'Emden v Pedder [F68] was equally applicable to interference on the part of the Commonwealth authority with a State authority. For this ruling the Court relied on a decision of the Supreme Court of the United States in Collector v Day. [F69] There it was said: [F70] "It is admitted that there is no express provision in the Constitution that prohibits the general government from taxing the means and instrumentalities of the States, nor is there any prohibiting the States from taxing the means and instrumentalities of that government. In both cases the exemption rests upon necessary implication, and is upheld by the great law of self-preservation; as any government, whose means" are "employed in conducting its operations, if subject to the control of another and distinct government, can exist only at the mercy of that government." Whatever opinion we may hold as to the sufficiency of this reasoning, as applied to the United States Constitution, is really immaterial: for we have to construe the Australian Constitution; and, as the Australian Constitution actually excludes such implication (s. 109) by giving supremacy to a valid Federal law over State laws otherwise valid, I am free to say, and bound in duty to say, that, in my opinion, it is wrong to apply the principle of Collector v Day to the construction of s. 51 (XXXV.).

This, my conclusion, is of course quite consistent with the famous case of McCulloch v Maryland, [F71] where it was held that a State tax on a Federal bank was unconstitutional and invalid. There is no need for me to comment on that case here (see Baxter v Commissioners of Taxation (N.S.W.)). [F72]

Counsel for the respondents have properly pointed out to us the grave responsibility of overruling a decision of the Full High Court which has stood for thirteen years. No argument has been hitherto entertained by this Court against the Railway Servants' Case. [F73] There was an attempt to impugn it in the Municipalities' Case [F74] last year, but the majority of the Court intimated that in the existing state of their minds it would be useless to attack the case, and counsel therefore refrained from argument. In the case of the Attorney-General for New South Wales v Collector of Customs for New South Wales [F75] I find that I expressed doubts as to the doctrines adopted and the expressions used in D'Emden v Pedder [F76] and the subsequent cases, and as to the doctrine "that the railways are a State governmental function ... in the same sense as the legislature, the executive and the judiciary are governmental functions." I said also: [F77] "I regard the doctrine as to the King not being bound save by express words, as being inapplicable as between the States and the Commonwealth, at all events in the exercise of an exclusive power of the Commonwealth; and I regard State laws and State powers in respect of the railways as subordinated to the Commonwealth powers with regard to trade and commerce, and with regard to customs taxation." In the recent Wheat Lumpers' Case [F78] I treated the Railway Servants' Case as not binding on me for the purpose of my judgment, because that case had been based on a ground which was not applicable to the wheat lumping operations-the ground that at the time of the Constitution the construction and maintenance of railways were to be regarded as governmental functions (see also Federated Engine-Drivers' Case. [F79] It cannot be said, therefore, that the doctrines of D'Emden v Pedder and the Railway Servants' Case have been accepted without protest. But still, respect for our late colleagues necessarily makes us hesitate; and I fully accept the view that it is fitting stare decisis unless the decision, to our minds, is manifestly wrong.

The crux of the Railway Servants' Case [F80] is to be found, I think, at pp. 538-539. It had been held in South Carolina v United States [F81] that the State, having made the liquor trade an absolute monopoly, could not rely on the doctrine of Collector v Day [F82] as a defence against an action for excise duty on its liquor. The reason given was that the doctrine must be confined to "strictly governmental functions" of the State. The High Court said (a) that "the execution or administration of the laws of the State is in the strictest sense a governmental function": (b) that "the construction and maintenance of roads and means of communication is one of the most important ... functions of government": and (c) that "in the year 1900 ... the construction and maintenance of railways was in fact generally regarded as a governmental function in all the Australian colonies, and that they are expressly recognized as such" in the Constitution. But although where a State undertakes to lay and work railways, the construction and maintenance of railways become, of course, a governmental function in one sense, that function is not "strictly governmental" in the sense of being a function essential to all government, a function like the legislative, executive and judicial functions, without which a civilized State cannot be conceived a function with which the State cannot part. Since the South Carolina Case the limit of the exemption has been even more clearly defined in Flint v Stone Tracy Co [F83] and see Vilas v Manila [F84] -cases which had not occurred and, necessarily, were not before our learned colleagues in the Railway Servants' Case. In Flint v Stone Tracy Co -a case of an excise tax on corporations and joint stock companies with respect to the carrying on business-the South Carolina Case was followed, and was treated as deciding that "the exemption of State agencies and instrumentalities from national taxation was limited to those of a strictly governmental character, and did not extend to those used by the State in carrying on business of a private character. ... The cases unite in exempting from Federal taxation the means and instrumentalities employed in carrying on the governmental operations of the State. The exercise of such right as the establishment of a judiciary, the employment of officers to administer and execute the laws, and similar governmental functions, cannot be taxed by the Federal Government."

The position, therefore, is that even in the country of its origin, the United States, the doctrine of the exemption of State activities from Commonwealth legislation is held not to apply to commercial undertakings of the State or created by the State, but to apply to strictly governmental functions only, of the kind which had been stated. Nor can the reasons (b) and (c) of the High Court be applied to the engineering or the sawmilling business or to the business of running railways. But, personally, I desire not to be understood as regarding the case of Collector v Day [F5] as applying to our Constitution, even with the limitations which have been given to it by the subsequent cases. My view is that, on the true construction of s. 51, the State activities which are not distinctly excluded from the Federal powers by the Constitution are subject to the Federal laws, to the full extent of their meaning: and that there is no exemption from Federal Acts unless and until they pass beyond the limits of the Federal powers on their true construction.

I am of opinion that the Railway Servants' Case [F86] should be overruled, and that the question should be answered as proposed by the Chief Justice.