Merchant Service Guild of Australasia v Commonwealth Steamship Owners' Association (No 2) [1920] HCA 55; (1920) 28 CLR 436 (31 August 1920)

HIGH COURT OF AUSTRALIA

The Merchant Service Guild of Australasia Claimant; and The Commonwealth Steamship Owners' Association and Others Respondents[No. 2.]

H C of A

31 August 1920

Knox C.J., Isaacs, Higgins, Gavan Duffy, Rich and Starke JJ.

Bavin and Robert Menzies (with them Hooton), for the claimant.

Leverrier K.C. (with him H. E. Manning), for the Commonwealth, intervening.

Latham, for the Melbourne Harbour Trust Commissioners.

Flannery K.C. (with him Evatt), for the Sydney Harbour Trust, and the Colonial Treasurer and the Minister of Public Works and the Chief Secretary of New South Wales.

Robert Menzies, in reply.

The following written judgments were delivered:—

Aug. 31

Knox C.J.,

Isaacs, Rich and Starke JJ.

In this case the Court has to apply the principles of law enunciated in the Western Australian Trading Concerns Case[1], just decided. In consonance with that decision, we have to examine the position of each respondent in order simply to see whether the dispute which exists in fact is, in its nature, "an industrial dispute" within the meaning of pl. XXXV. of sec. 51 of the Constitution. Up to a certain point that matter is settled. Though the respondents challenged the accuracy of the decision in the Municipalities' Case[2], that decision, like every other decision on the constitutional powers of the Commonwealth, must stand unless and until it is overruled by the requisite statutory majority. That case determined two points. First, it was held by five Justices to two that municipal corporations established under State laws are not, with regard to the making, maintenance, control or lighting of public streets, "instrumentalities"—as that term has been sometimes used—of State Government, and, therefore, are not in respect of such operations exempt from Commonwealth legislation under sec. 51 (XXXV.) of the Constitution—that is, even assuming the Government itself doing such work would be exempt. That part of the decision was arrived at by five of the present members of this Court, four being present in this case; but, in view of the decision in the Western Australian Trading Concerns Case[3], is now immaterial. The second point determined in that case was that, in order to constitute an "industrial dispute" within the meaning of sec. 51 (XXXV.) of the Constitution and within the meaning of the Act, it is not necessary that the undertaking in which the parties to the dispute are engaged should be an industry, a trade, or a business, carried on for profit. This was held by four of the present members of the Court, three being present in this case. On the argument challenging the accuracy of the second point, it became evident that in view of the four opinions so recently expressed, and still held by the three Justices who had formed part of the majority in the Municipalities' Case[4], and the absence of the fourth Justice, it was useless to proceed with the attempt to overrule that second point, and the Court so intimated. That point is maintained without further expression of opinion, not because it is to be taken as the opinion of either the Justice who differed in the Municipalities' Case[5] or the other two Justices composing the present Court (they expressing no opinion), but because it is a standing decision not overruled.

But though the State itself is not exempt where a private individual would not be, and though a private individual or company is not exempt merely because the undertaking is carried on by him or it without the object of profit, and therefore a State cannot escape simply because it should happen, for instance, to conduct an ordinary business enterprise at cost price, there still remains the question of the nature of the dispute itself as to whether it is in its real character "industrial." The Municipalities' Case[6] affords an example of an industrial dispute. The making of roads and the lighting of streets was held to be essentially of an industrial nature. If done by a contractor for profit, no one would dream of questioning it. If by the Constitution "profit" is not a necessary element, the undertaking still remains industrial, even though the persons undertaking it do so without a view of making profit; and each department of it is part of the one industrial undertaking. It remains to consider individually the position of each of the respondents.

(1)

The Sydney Harbour Trust.—It is true the Trust is in very close connection with the Government both in relation to funds and to control. It is true also that ports and harbours were among the matters as to which anciently the King exercised his prerogative. Ports and havens were, as Blackstone (vol. i., p. 264) states, among the regalia, for they are "the inlets and gates of the realm." But, as there appears also, the prerogative was limited, and (inter alia) any person had the right to load or discharge his merchandise in any part of the haven, and legislation had to be resorted to for the purpose of regulating the ports and harbours, altogether beyond the prerogative. Legislation as to harbours and docks, as appears by Merscy Docks and Harbour Board v. Lucas[7], has placed authorities of that character in the position of persons carrying on a "concern" and as liable to income tax on the profits they make. The undertaking of the Sydney Harbour Trust is therefore essentially an industrial concern, and is within the operation of sec. 51 (XXXV.) of the Constitution and of the Commonwealth Conciliation and Arbitration Act.

(2)

The Melbourne Harbour Trust is similarly justiciable, and is, on the terms of the Act, an à fortiori case.

(3)

The Colonial Treasurer of New South Wales.—The facts establish that the boats conveying pilots are employed as an adjunct to the business of piloting ships. The dispute is therefore properly to be regarded as industrial. The steam tug at the Clarence River is also industrial. As to the pleasure-launch at Sydney and the two launches for official business at Newcastle, the facts are not sufficiently stated to enable us to come to a definite conclusion.

(4)

The Minister of Public Works of New South Wales.—The dockyard is a trading concern, and the vessels conveying workmen and material to and from the dockyards are appurtenant to the trading. As to those vessels, the State metal quarries, the ferry at Stockton, and the dredges, the Minister is a justiciable respondent.

(5)

The Chief Secretary of New South Wales is a justiciable respondent with respect to the State trawling industry.

The second question should be answered in the terms to be formally stated by the Chief Justice.

Higgins J.

It has just been decided that, when a State Government carries on an industry for the purposes of profit, it is subject to the powers of the Commonwealth Court of Conciliation and Arbitration created under sec. 51 (XXXV.) of the Constitution as if it were a private employer[8]. Counsel in this case here, with good sense, avoided a repetition of the arguments involved in the previous case, and have applied themselves to the questions (1) whether, when the State Government is in fact in dispute with its employees as to the same matters as other employees, and the dispute has all the indicia of an industrial dispute extending &c., the State Government or any agency or creation of the State is subject to the said powers; and (2) whether, when the undertaking is not carried on for profit but for the good of the community, there can be an "industrial dispute."

It has already been decided in the Municipalities' Case[9] that municipalities can be treated as parties to a dispute within sec. 51 (XXXV.), although they do not carry on the operations for profit; and that decision must be treated as binding, so far as it goes.

I select as a typical concrete case that of the dredging operations carried on under the Minister of Public Works of New South Wales, in the Department of Public Works. "In the Department" of Public Works "there are many dredges dredging the harbours, bays, rivers, bars and anchorages, but not for hire or in any competition with others." The masters, officers and engineers are doing the same kind of work as they would do, and as other masters, officers and engineers are doing, on other steam vessels in private employment; and the dispute is as to the wages, hours and conditions of employment. The object of sec. 51 (XXXV.) being to prevent strikes, to preserve continuity of operations in the interests of the public, the question is, does the constitutional power exclude the State and its employees in the dredging work from the benefit of the machinery devised for attaining that object?

Parliament has made no such exclusion. Under sec. 4 "industrial dispute" means "simply an industrial dispute extending beyond the limits of any one State," and "includes" (1) "any dispute as to industrial matters," and (2) 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. "Industry" includes any business or undertaking of employers, and "any calling, service, employment, ... or industrial occupation or avocation of employees" (Act, sec. 4).

But it is said that Parliament has in these words exceeded its powers. As pointed out in the case of Amalgamated Society of Engineers v. Adelaide Steamship Co.[10], we have no right to import into the Constitution any exception to the power of Parliament which is not expressed in the Constitution or necessarily implied. Where the Constitution means that the powers conferred on Parliament shall not be applied to the State operations, it expressly says so, as in pl. xiii. (banking); pl. xiv. (insurance); pl. ii. and sec. 114 (taxation); pl. i. and secs. 99, 100, 102 (trade and commerce). So that the only possible difficulty is as to the meaning of "industrial disputes" in sec. 51 (XXXV.). Do the words in their natural and ordinary meaning exclude disputes as to wages, &c., when the employer is the State exercising its executive powers for the benefit of the public, with the sanction of the State Parliament as shown by appropriations of revenue or otherwise?

I cannot find any ground for treating such disputes as excluded from the meaning of the words "industrial disputes." The words are not technical, and must be taken in their common acceptation. What would the "man in the street" say, when there is a strike of officers or engineers on a Government dredge, if he were told that there is no "industrial dispute"? The words used in the Constitution are not even "disputes in an industry," but "industrial disputes"; and, according to Webster's Dictionary, "industrial," means "concerning those employed in labour, especially in manual labour, and their wages, duties and rights." So that the Commonwealth Parliament has power to make laws with respect to conciliation and arbitration for the prevention and settlement of disputes concerning those employed in labour and their wages, duties and rights. According to the Amalgamated Society of Engineers' Case[11] the fact that the State is the employer does not affect the power; and according to the Municipalities' Case[12] the fact that the employer does not carry on his undertaking for profit or in competition does not affect the power.

This view is, I admit, inconsistent with the answer to question 3 in the case of the Federated Engine-Drivers' and Firemen's Association of Australasia v. Broken Hill Proprietary Co.[13]—as to the Board of Water Supply and Sewerage, Sydney. But that decision was based expressly on the Railway Servants' Case[14], which has just been overruled: and it was not, according to the views of those who gave it, strictly necessary to be answered. In my opinion, the decision, such as it was, should be overruled on this point. To summarize my view of the matter, I take this Act as being valid as to sec. 4. and as applying to any State activities in which there is a dispute between the State in its capacity as employer and its employees as to their reciprocal rights and duties; and the Act is binding, under sec. V. of the covering sections of the Constitution Act, on the Courts, Judges and people of every State, including under the word "people" those people of a State who legislate or execute the State law. As against a valid law under sec. 51 (XXXV.), or any other valid law made under the powers conferred on the Commonwealth Parliament, any State law or command is not binding—in effect, is not law at all.

Applying this view to the various respondents and operations mentioned in the case, I should say that it is proper for the Justice of the High Court to include the Sydney Harbour Trust in his decision, as being a party to the composite dispute in respect of the terms of employment of masters, officers and engineers who are members of the claimant organization. I should make a similar answer to the question as to the Melbourne Harbour Trust Commissioners; and as to the New South Wales Government in its Department of Navigation, so far as regards the pleasure-launch, the launch used as a tender to the pilot steamer, the two launches used for official business at Newcastle and the steam tug on the Clarence River.

I should make a similar answer to the question as to the New South Wales Government in its Department of Public Works, so far as regards its dredging operations, its Newcastle ferry service, its vessels carrying workers and material to and from the Government dockyards and the State metal quarries.

I should make a similar answer to the question as to the same Government in respect of its trawling industry.

But it is urged that on this broad view of the Commonwealth powers the Commonwealth Parliament may ruin the States; and that the Constitution assumes that the States are to continue and that their powers are to continue (except as provided by the Constitution). It is said that the Commonwealth Parliament through the Court of Conciliation may, on this broad view, entertain disputes as to stokers in the navy, as to type writers in the Premier's office, or as to men digging trenches in manœuvres. It is said that under the taxation power the Commonwealth Parliament could tax State members for every time that they enter the State Parliament; or tax every State voter on voting. But in the first place, as the Chief Justice pointed out during argument, the taxation would have to be on the same lines in all the States (sec. 51 (II.)); and such interferences with the States would be not only improbable but practically impossible. In the next place, the Commonwealth Parliament may admittedly ruin the States by not providing adequate defence, or by mad trade and commerce laws, or by its immigration laws, and so forth. Or the Commonwealth Parliament might tax all private property to its full capacity, and borrow so heavily that the States could not borrow at all. So, too, the States might resume all the property in the State, and leave the Commonwealth Parliament without any property to tax (sec. 114). The true answer is that the powers conferred by the Constitution are not to be construed by us as limited by these considerations. We, as a Court, have to obey the intention of the British Parliament, as expressed in the words of the Constitution, and are not to import into these words limitations based on our opinions of danger or expediency. Finally, Parliament may exclude from the jurisdiction of the Court any industrial disputes that it thinks fit; and under sec. 38 (h) of the Act the Court itself can refrain from determining a dispute if further proceedings are not necessary or desirable in the public interest.

But if this Court feels justified in implying any restriction as to State activities—any restriction on the power of Parliament under sec. 51 (XXXV.)—I concur in the view that the restriction should be limited to strictly Governmental functions—functions such as legislative, executive and judicial functions, without which a constitutional State cannot be conceived, functions which are essential and inalienable. The limitation (if any) should follow the lines of such cases as Coomber v. Justices of Berks[15] and South Carolina v. United States[16].

Gavan Duffy J.

In view of the dissent I have expressed in the last case[17] I do not think advantage would come of my expressing any opinion founded on that dissent, and I have not had an opportunity of considering what answers should be given in view of the decision in that case. Accordingly I do not propose to deliver any judgment.

Question 1 being withdrawn, question 2 answered as follows: The dispute found to exist in fact is an industrial dispute within the meaning of sec. 51 (XXXV.) of the Constitution as to (a) Sydney Harbour Trust; (b) Melbourne Harbour Trust; (c) Colonial Treasurer of New South Wales in respect of pilot steamers and tenders thereto and steam tug at Clarence River; (d) Minister for Public Works of New South Wales in respect of vessels conveying workmen to and from dockyards, State metal quarries, and dredges, ferry service between Newcastle and Stockton; (e) Chief Secretary of New South Wales in respect of trawling industry. As to pleasure-launch at Sydney and two launches used for official business at Newcastle the facts are not sufficiently stated to enable us to determine the question.

Solicitors for the claimant, Loughrey & Douglas.

Solicitor for the Commonwealth, Gordon H. Castle, Crown Solicitor for the Commonwealth.

Solicitors for the Melbourne Harbour Trust Commissioners, Malleson, Stewart, Stawell & Nankivell, Melbourne, by Allen, Allen & Hemsley.

Solicitor for the New South Wales respondents, J. V. Tillett, Crown Solicitor for New South Wales.

[1] Ante, 129.

[2] 26 C.L.R., 508.

[3] Ante, 129.

[4] 26 C.L.R., 508.

[5] Ante, 129.

[6] 26 C.L.R., 508.

[7] 8 App. Cas., 891.

[8] Ante, 129.

[9] 26 C.L.R., 508.

[10] Ante, 129.

[11] Ante, 129.

[12] 26 C.L.R., 508.

[13] [1911] HCA 31; 12 C.L.R., 398.

[14] [1906] HCA 94; 4 C.L.R., 488.

[15] 9 App. Cas., 61, at p. 74.

[16] [1905] USSC 184; 199 U.S., 437.

[17] Ante, at pp. 171 et seqq.