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High Court of Australia |
HUGHES AND VALE PTY. LTD. v. STATE OF NEW SOUTH WALES [1953] HCA 14; (1953) 87 CLR 49
Constitutional Law (Cth.)
High Court of Australia
Dixon C.J.(1), McTiernan(2), Williams(3), Webb(4), Fullagar(5), Kitto(6) and
Taylor(7) JJ.
CATCHWORDS
Constitutional Law (Cth.) - Freedom of inter-State trade commerce and intercourse - State Statute - Validity - Prohibition or regulation - Prohibition of public vehicles operating on State roads without licence - Grant of licence discretionary - Condition imposed for payment of money in respect of each mile of competitive distance of journey wholly or partly competitive with railways or tramways - Differential rates in respect of journeys to or from different States - Discrimination against inter-State trade - Excise duty - The Constitution (63 & 64 Vict. c.12), ss. 90, 92 - State Transport (Co-ordination) Act 1931-1952 (No. 32 of 1931 - No. 24 of 1952)(N.S.W.)ss. 12, 17, 18 (5).
HEARING
Melbourne, 1952, October 15, 16, 17, 20, 21.DECISION
April 16, 1953.2. The plaintiff is a company incorporated in New South Wales. Its business is that of a carrier of general merchandise and it owns certain motor vehicles. With them it operates, that is to say it carries goods, between Sydney and Brisbane. In respect of the vehicles it holds licences from what I shall call the road transport authority of the State of New South Wales. The legislation under which the licences were issued, as well as the conditions of the licences, is impugned by the plaintiff as involving an impairment of the constitutional freedom of inter-State trade, commerce and intercourse. Some description of that legislation will afterwards become necessary, but in the meantime it will be convenient to state what is done without referring, at this point, to the provisions purporting to require such licences and to authorize the conditions. (at p63)
3. The road transport authority of the State imposes upon the plaintiff company in respect of the journeys made by its vehicles between Brisbane and Sydney a tonnage charge or levy per mile. The weight upon which it is calculated consists in an aggregation of the carrying capacity of the vehicle and its actual tare weight. It is not a charge computed on the weight of the goods actually carried but on the weight of the vehicle and the weight the vehicle is capable of carrying. The rate is three pence a ton of this weight for every mile travelled. From June 1951 to 1st July 1952 the tonnage rate of three pence applied only up to one hundred miles of the journey. From one hundred miles to two hundred miles it was two pence a ton and over three hundred miles it was one penny a ton. But from July 1952 it became three pence a ton throughout. An exception was made of vehicles operating between Adelaide or Melbourne and the Sydney or Newcastle districts. To vehicles employed in such journeys the old and more lenient tonnage rate continued to apply. Subject to this qualification, the tonnage rates, old or new, were of general application and were charged in respect of all journeys which for more than fifty miles competed with the State railways, unless the vehicle carried exclusively goods of a description included in a long list of things that were exempt altogether or else the subject of reduced mileage charges or of flat rate charges. (at p63)
4. The means employed by the road transport authority of the State for exacting these charges depends upon a use of his power to grant licences subject to conditions and upon a supposed additional power to grant permits. (at p63)
5. The licences granted to the carriers authorize the carriage of goods on journeys none of which, for a distance exceeding fifty miles, is competitive with the railways or tramways or on journeys of any distance from farm to market if solely for the carriage of fruit vegetables eggs or poultry. The authority is contained in cl. 1 of the licence. (at p64)
6. Then there is a condition, forming cl. 2, that in respect of any journey which is wholly or partly competitive with the railways or tramways the licensee shall pay for the full competitive distance the rate of three pence per ton of the aggregate weight of the vehicle unladen and of the weight of the loading the vehicle is capable of carrying for each and every mile travelled by the vehicle along a public street. (at p64)
7. A further condition, forming cl. 3, provides that if the terms conditions and authorities are complied with the licensee and his driver are to be exempt from the conditions mentioned in the legislative provisions (s. 18(5) of the State Transport (Co-ordination) Act 1931-1952 (N.S.W.)) authorizing the imposition of charges and of certain other obligations. These clauses have been long in use and they were considered in Duncan v. Vizzard [1935] HCA 43; (1935) 53 CLR 493, at pp 506, 507 where Evatt J. explained their effect in the following passage, the first reference in which is to cl. 3: "The verbiage of this clause may be subject to criticism, but its intendment and meaning are not in doubt. Its object is to grant an exemption from the payment authorized to be imposed by sec. 18(5) of the Act, and actually imposed in respect of the full competitive distance by clause 2 of the special conditions. Clause 3, in its last sentence, describes itself as an 'exemption'. The exemption gives relief from the restrictions mentioned, but it is strictly coterminous with the authority to operate the vehicle granted by clause 1 of the special conditions. The vehicle is to be 'exempt . . . in respect of any journey which is not, for a distance exceeding fifty miles, competitive with the railways or tramways'. It is also to be 'exempt . . . in respect . . . of a journey of any distance when the vehicle . . . is used solely for the transport of fresh fruit . . . from farm to market'. It is impossible to imply from these conditions any authority to drive or operate the vehicle on any journey which is, for more than fifty miles, competitive with the railways. On the contrary, the exemption granted by clause 3 may be said to offer an inducement to observe the main condition contained in clause 1 of the licence. The exemption from the money payment imposed by clause 2 of the special conditions is strictly conditioned by the observance of clause 1". (at p65)
8. By a practice which also appears to be by no means recent permits are granted in respect of the licensed vehicles for journeys which are not authorized by the licence because they compete with the railways for more than fifty miles of their length. Of course, the journeys of the plaintiff's vehicles between Sydney and Brisbane so compete with the railways. (at p65)
9. On the occasion of the issue of such a permit the road transport authority of the State exacts payment of the tonnage charge per mile. That permits are so used is a fact which does not appear distinctly in the pleadings, but the course of practice was made clear to us during the argument. What statutory authority there is for issuing permits for the carriage of goods I do not know. As was pointed out in effect in the case of Duncan v. Vizzard (1935) 53 CLR, at p 503 , per Rich J. and per Evatt J. (1935) 53 CLR, at p 508 , the power expressly conferred by the legislation to grant permits is restricted to the carriage of passengers. The relevant statutory provisions have not been changed. However the pleadings do not raise the question what warrant exists for the administrative procedure of issuing permits and making that the occasion of collecting the charges. To show that the permits were invalidly issued would be of little profit to the plaintiff, if the clauses of the licence be valid. For they would expose the licensee to the same charges. That, at all events, is the operation given to the clauses in the passage already cited from the judgment of Evatt J. Even if the clauses of the licence, still assuming them to be constitutionally valid, failed so to operate as to impose the liability, yet there would remain s. 37(1) of the State Transport (Co-ordination) Act, which enables the road transport authority of the State to impose upon a person operating such motor vehicles in contravention of the Act an obligation to pay such sums as the authority determines not exceeding what would be exigible by means of a licence. If this provision be constitutional the same amounts could be imposed as have already been collected. (at p65)
10. The legislation under which all this is done begins with the State Transport (Co-ordination) Act 1931 (No. 32 of 1931) but it has a confused subsequent history, chiefly because of the many changes made in the organization for the control of land and air transport in New South Wales. It is not necessary to trace its course. The writ in this action was issued on 7th July 1952 and it is enough to state briefly the result of the legislation as it now stands so far as it is material to the decision of the case. The source of the powers exercised by the road transport authority of the State is the State Transport (Co-ordination) Act 1931-1952. Its provisions cover the carriage of passengers and of goods but in this case we are concerned with the provisions only as they affect the transportation of goods. It is made an offence to carry or offer to carry goods for hire or for any consideration or in the course of business by a motor vehicle unless the vehicle is licensed under the Act: s. 12(1) and s. 3(1) defining "operate" and "public motor vehicle". The offence is extended to the case of a man carrying his own goods (except goods not intended for sale) or goods which he has sold: s. 12(2). It is also an offence for a person to send his goods by an unlicensed vehicle: s. 13. These provisions cover not only mechanically propelled vehicles on the surface but also aircraft. A licence is annual: s. 16(2). It may authorise the vehicle to operate on specified routes or roads or in specified districts and may contain terms and conditions. By means of such conditions the fares and freights may be fixed and the use of the vehicle restricted. To break a condition is an offence and to go outside the authority of the licence is to break a condition: s. 15(3), s. 17(1) and (2) and (5). A condition may be imposed in a licence that the licensee shall pay sums ascertainable in a manner to be determined. The determination may be according to mileage travelled or otherwise, but so that the amounts payable shall not exceed an amount calculated at three pence a ton per mile of the mileage travelled upon a weight consisting of the aggregate weight of the vehicle unladen and of the loading the vehicle is capable of carrying: s. 18(5). Clause 3 in the licence fixes a rate consisting of the maximum allowed by this provision. (at p66)
11. In dealing with an application for a licence the licensing authority is required to consider all such matters as it may think necessary or desirable and in particular it is to have regard to a number of specified matters. They include the suitability of the route, the extent to which the needs of the locality are served and to which the proposed service is necessary or desirable in the public interest, the elimination of unnecessary services and the co-ordination of all forms of transport including rail and tram, the conditions of the roads and their capacity without unreasonable damage to carry the proposed public vehicular traffic, the fitness of the applicant and the construction, suitability and fitness of his vehicle: s. 17(3). (at p66)
12. In the beginning a board of four commissioners was set up, which, subject to the control of the Minister, was to carry into effect the objects and purposes of the Act and discharge the duties powers and authorities the Act conferred or imposed: s. 4(1). The board was called the State Transport (Co-ordination) Board and it was the licensing authority. But this board was superseded as long ago as 22nd March 1932. Since then not a few statutory changes have taken place and now, after the field of transport administration and control has undergone more than one division, the powers and authorities conferred by the Act with respect to road transport and probably aircraft have come to reside in an officer called the Director of Transport and Highways. He is constituted a corporation sole but in his natural capacity he is the chairman of a commission called the New South Wales Transport and Highways Commission, the functions of which seem to be rather to plan and recommend than to administer. As chairman moreover the director has the privilege of submitting any decision of the commission of which he disapproves to the Minister, who may then determine whether the decision is or is not to be carried into effect: see Act No. 10 of 1950, ss. 3, 4, 6(4) and 8. In his corporate capacity the Director of Transport and Highways is the road transport authority of the State. But in the exercise and performance of the powers duties and functions conferred upon him as a result of the various statutes he is subject to the direction and control of the Minister: Act No. 15 of 1952, s. 3(4). No purpose would be served by recounting the legislative steps by which the director became the road transport authority. It is enough to mention the successive provisions from which the result ensues, which are:- No. 3 of 1932, ss. 9(1) and 12(2); No. 31 of 1932, ss. 5, 14(1) and (2), and 20(1)(b) and (2)(c); No. 10 of 1950, ss. 3, 6 and 8(1)(g) and (2); No. 15 of 1952, s. 2, s. 3 considered with s. 4, ss. 5(1), 11, 17(1)(a) and (2)(a). (at p67)
13. The duties and powers of the Director of Transport and Highways do not extend in any way into the field of railway or tramway administration or transport by sea. Whatever "co-ordinating" he does must be effected by his control of carriage by road. From a practical point of view air transport may be put aside, assuming his authority extends to it. (at p67)
14. The substantial question for decision is whether the inclusion of inter-State transport in the prohibition of the carriage of goods by motor vehicle, unless licensed, and in the levy of the tonnage rate, involves an infringement upon the freedom of trade commerce and intercourse assured by the terms of s. 92. (at p67)
15. My personal opinion has long been that, in the case of provisions of this description prohibiting transport unless licensed and authorizing the imposition of such a levy, the question must be answered that neither the prohibition nor the levy is consistent with s. 92. (at p68)
16. Notwithstanding the failure of this conclusion to gain acceptance, the more immediate considerations which arise upon the very face of the statutory provisions, to say nothing of the levy and the conditions of the licence, still appear to me to make demands upon reason that are too insistent to admit of any other answer to the question whether trade commerce and intercourse is left absolutely free. (at p68)
17. I take it as finally settled that the burdens and restrictions against which s. 92 protects inter-State commerce are not only those which are imposed differentially upon inter-State commerce or affect it in a special manner. Inter-State commerce is protected also from restrictions and burdens which fall alike on commerce confined to a State and commerce crossing its borders. The carriage of merchandise from one State to another is not a thing incidental to inter-State commerce but in the language used by Johnson J. of navigation, in Gibbons v. Ogden [1824] USSC 18; (1824) 9 Wheat 1, at p 229 [1824] USSC 18; (6 Law Ed 23, at p 78) , is "the very thing itself; inseparable from it as vital motion is from vital existence". (at p68)
18. The carriage of goods by road, which forms a most important part of this very thing, is made the subject of heavy imposts and of a definite prohibition except in so far as a branch of the Executive Government of the State thinks fit to permit particular persons to carry goods by specified vehicles. No conditions are laid down by the fulfilment of which a man may become entitled to a licence. It lies entirely within the discretion of the Director of Transport and Highways acting under the direction of the Minister. The refusal of an application for a licence on grounds that are arbitrary or fanciful or that no man could regard as lying within the scope or policy of the legislation would not suffice, but the discretion otherwise is absolute and in no circumstances has anyone an enforceable title to a licence. To me these rather simple considerations appear decisive. In face of them I have not been able to see how it can be said that this branch of inter-State trade is absolutely free. (at p68)
19. It is not my purpose to enter upon an examination of the question either in principle or upon authority, excepting of course the authority of the decision in McCarter v. Brodie [1950] HCA 18; (1950) 80 CLR 432 . But I should perhaps say that to my mind the distinction appears both clear and wide between, on the one hand, such levies and such provisions prohibiting transportation without licence as the foregoing and on the other hand the regulation and registration of motor traffic using the roads and the imposition of registration fees. In the same way the distinction is wide between such provisions and the use of a system of licensing to ensure that motor vehicles used for the conveyance of passengers or goods for reward conform with specified conditions affecting the safety and efficiency of the service offered and do not injure the highways by excessive weight or immoderate use or interfere with the use of the highways by other traffic. The validity of such laws must depend upon the question whether they impose a real burden or restriction upon inter-State traffic. (at p69)
20. For myself I do not know why a uniform law for the organization and the regular conduct of motor traffic or a uniform law prescribing conditions for the business of carrying by road should be regarded as necessarily impairing the freedom of inter-State trade commerce and intercourse. The provision which in Willard v. Rawson [1933] HCA 12; (1933) 48 CLR 316 , all the judges but myself upheld as valid did not appear to me to be of this character. It was a special provision affecting only motor cars registered in other States if used in Victoria for the carriage of goods. Motor cars if registered in another State were exempt from registration in Victoria and from the payment of the registration fee annually payable in that State. But the provision impugned specially withdrew this exemption if the vehicle was used to carry goods. Thus entry into Victoria of a New South Wales lorry carrying goods at once exposed it to the levy of what to a Victorian car would be an annual fee. This appeared to me to be a direct burden upon inter-State trade. I am quite prepared to accept the view that my conclusion as to the character or characterisation of the provision was erroneous, but it has nothing to do either with the present case on the one hand or with a general regulation of transport on the other hand. (at p69)
21. The decisions of this Court that the State Transport (Co-ordination) Act 1931 (N.S.W.) and the legislation of other States in pari materia did not infringe s. 92 were based on grounds which, as it seemed to me, were no longer tenable in face of the reasons of the Privy Council in the Commonwealth of Australia v. Bank of New South Wales (1950) AC 235; (1949) 79 CLR 497 . In McCarter v. Brodie [1950] HCA 18; (1950) 80 CLR 432 , however, a majority of the Court decided that notwithstanding the decision of the Privy Council the Transport Cases should be followed. In the present case the plaintiff asks us to re-consider the question thus decided in McCarter v. Brodie [1950] HCA 18; (1950) 80 CLR 432 . (at p69)
22. The strength of the considerations against refusing to follow that decision is very great. It is a recent decision of the Court dealing with the very question of the authority of the Transport Cases. It was fully considered and, whether many of the reasons and the conclusion of those cases are, as I think, or are not, at variance with the principles expounded in the Banking Case [1949] HCA 47; (1950) AC 235; (1949) 79 CLR 497 nothing has occurred since this Court decided McCarter v. Brodie [1950] HCA 18; (1950) 80 CLR 432 adding to or altering the considerations then before the Court. These circumstances, in my opinion, make it right to decline to enter upon a reconsideration of McCarter v. Brodie [1950] HCA 18; (1950) 80 CLR 432 unless independent reasons exist for overruling it which appear to be imperative. (at p70)
23. I do not waiver at all in my belief that the transport cases cannot be reconciled with principle or in the opinion that the grounds on which they were in fact decided have for the most part been expressly rejected in the judgment of the Privy Council in the Banking Case (1950) AC 235; (1949) 79 CLR 497 , but I do not regard that as enough. I believe, however, that I would regard it as an imperative judicial necessity to overrule McCarter v. Brodie [1950] HCA 18; (1950) 80 CLR 432 if it appeared inevitable that the consequences of the decision would extend beyond the subject of commercial transport by road and would make it necessary to hold that over the whole area of inter-State trade commerce and intercourse a power existed in every legislature to impose a prohibition subject to a licence to be granted or refused at the discretion of the Executive. At first sight it may seem that these consequences ought logically to ensue, if the decision is allowed to stand. Nevertheless, after a full re-examination of the Transport Cases in the light of the reasons of the majority of the Court in McCarter v. Brodie (1950) 80 CLR 432 , I have come to the conclusion that the application of these cases may be confined to the particular conditions or considerations which arise from the fact that the railways and the roads form facilities for the carriage of goods (and presumably of passengers) for the provision and maintenance of which the State is responsible. I do not mean to suggest that in these conditions or considerations a ground can be found which in my opinion would suffice to support the decisions in the Transport Cases as correct or upon which by itself the judges who decided those cases were, or would have been, content to place them. But I have ventured before to describe the conclusion that the transport legislation was valid as a "pragmatical solution which those cases gave to a problem which they approach as a complex" (Australian National Airways Pty. Ltd. v. Commonwealth [1945] HCA 41; (1945) 71 CLR 29, at p 90 ) and I think that these conditions or considerations formed part of the complex and were taken into account by the learned judges, who gave different degrees of emphasis to them. I am fully alive to the very great legal and practical importance of the conclusion in favour of the validity of the transport legislation which the Court has upheld. But that is the very subject matter of McCarter v. Brodie [1950] HCA 18; (1950) 80 CLR 432 and I am not prepared to regard the importance of the subject matter as sufficient to overcome the weight of the circumstances I have enumerated as otherwise making it right to decline to reconsider the decision. If the Transport Cases have no future application except where the conditions or considerations exist that arise from the State providing facilities for the carriage of goods both in the form of railways and in the form of roads, the danger is removed of the decision operating generally over the whole area covered by s. 92 and on that footing I think that we ought not to reconsider it. I have been much encouraged to adopt such a view of the transport cases by the following passage in the reasons of Williams J. in McCarter v. Brodie (1950) 80 CLR, at p 477 . Referring to the Transport Cases his Honour says:- "In my opinion they ought not to be re-opened in this Court without the greatest hesitation. The Acts do regulate competition between land transport by rail and road, both of passengers and goods, but only so far as such competition arises out of competing facilities provided by the States themselves. In this respect the Acts differ fundamentally from the legislation held to be invalid in the Australian National Airways Case [1945] HCA 41; (1945) 71 CLR 29 and the Bank Case (1950) AC 235; (1949) 79 CLR 497 , for there the effect of the legislation was simply to prohibit competition with the government airlines in the one case and the government banks in the other. The Transport Regulation Acts do not prevent individuals carrying on the business of land transport among the States without a licence. But they do prevent individuals plying their vehicles on the public roads of the States without a licence. They proceed on the broad principle that the interests of the State require the regulation of the whole service of land transport wherever it is conducted upon the public roads. I am of opinion that a State must have a wide power to regulate the use of the facilities which it provides for trade and commerce, so that the public funds invested in such facilities, in this case the railways, shall not be jeopardised by undue competition brought about solely by the provision of another facility by the State. It is a question of fact whether such Acts are, as they profess to be, regulatory or something more, and the solution of this question raises social and economic problems. The competition could be destroyed, as Evatt J. pointed out in Vizzard's Case [1933] HCA 62; (1933) 50 CLR 30, at p 82 , by the State adopting the simple if drastic expedient of destroying the roads so as to compel all traders and travellers to use the railways. The same result could be achieved by allowing the roads to fall into a sufficient state of disrepair. Another way would be for a State to stop the roads short of the boundary and sell a strip of land along its frontiers with other States to private individuals. It has not yet been suggested that the freedom guaranteed by s. 92 is violated if a private individual refuses to allow an inter-State trader or traveller to pass over his land. By building and maintaining State Highways States provide means of competition with their own railways, and I can find nothing in the judgment of the Privy Council which leads me to alter the opinion expressed in the Australian National Airways Case (No. 1) (1945) 71 CLR, at p 109 , that 'it is simply an exercise of the sovereign rights of the States to co-ordinate traffic by rail or road, and to confine the use of roads to particular persons and vehicles. If the choice of these persons and vehicles has no relation to their passage across the border, but the legislation operates without discrimination with respect to all persons and vehicles desirous of using the roads, such legislation is not aimed or directed at inter-State commerce but at regulating, maintaining and co-ordinating a number of utilities for trade, commerce, and intercourse, State and inter-State, provided by the State'." (at p72)
24. It must be borne in mind that if his Honour had not acted on this view the Court would have been equally divided and the decision would not have been an effective precedent: cf. Tasmania v. Victoria [1935] HCA 4; (1935) 52 CLR 157, at pp 184, 185 . Moreover there are passages in the judgments of the members forming the majority of the Court in R. v. Vizzard; Ex parte Hill [1933] HCA 62; (1933) 50 CLR 30 , which show the important part this element played in the decision. (at p72)
25. Gavan Duffy C.J. said, "Again, a distinction has been made between interfering with trade, commerce and intercourse and interfering with the methods by which they are carried on. No one would suggest that the State must furnish such roads or other conveniences as the inter-State traveller may desire, nor, I think, would any one suggest that the State must leave unaltered all conveniences for travelling which are already in existence. It has been said that the Legislature is not necessarily controlling or regulating inter-State trade when it prescribes the facilities it will offer for carrying on trade generally, though if, on examination, it appears that the object of the Legislature is really to prejudice inter-State trade, its enactment may be invalid" (1933) 50 CLR, at p 48 . Rich J. said, "It (the case) arises upon a new aspect of the legislation relating to the use of roads, vehicles and railways - an aspect which could scarcely have struck the minds of those who resorted to the emphatic but uncertain terms of sec. 92" (1933) 50 CLR, at p 49 . Then in the course of describing the legislation his Honour said, "It is directed to secure an ordered system of public transportation in which the integers (not the least important of which are State railways) do not engage in mutual slaughter by irrational competition. As part of the means to this end it sets up a licensing system for motor vehicles which act as common carriers or which otherwise engage in the carriage of goods" (1933) 50 CLR, at p 50 . Finally the learned judge propounds the question he regarded as critical as follows: - "The question which I have to ask myself is whether, in a scheme which allows complete freedom to go or to send from one place to another but in the process of co-ordinating the means and of rationalizing the facilities, denies a completely unregulated choice of means, a direct restraint upon or interference with trade, commerce, and intercourse is imposed" (1933) 50 CLR, at p 51 . In the course of the judgment of Evatt J. the following passage occurs:- "On the contrary, I think that a State does not infringe sec. 92 if, having no concern, interest or object in restricting or prohibiting trade between States, it chooses to organize, regulate and co-ordinate those facilities and services which are provided and conducted within the State as instruments essential to all trade, commerce and intercourse, including inter-State trade, commerce and intercourse" (1933) 50 CLR, at pp 81, 82 . Then, after dealing with the financial and other responsibilities of States in relation to the provision and the maintenance of Government Railways Evatt J. said: "Where the States have also expended large sums of money for the purpose of constructing and maintaining roads, the problem of 'co-ordination' of the railway and road services becomes one of direct national concern" (1933) 50 CLR, at p 83 . (at p73)
26. McTiernan J. both in his description of the legislation and in the use his Honour made of citations from decisions of the United States Supreme Court clearly showed that he considered that the provision by the State of both roads and railways was a very important factor. His Honour said: "An examination of the provisions of the Act and the Acts constituting the various public bodies whose activities and services it was passed to coordinate and improve shows that the real object of arming the Board with the powers of granting or refusing licences to persons desiring to operate public motor vehicles on the roads of New South Wales was to protect the utility of the public facilities for transport, to save the publicly owned railways of the State from the destructive effect of the uncontrolled or unrestricted use of the facilities for travelling provided by the State out of public moneys and to protect the public finances and the credit of the State. It is, in my opinion, within the legislative power reserved to the States to enact the provisions which are now in question and such provisions are not affected by sec. 92" (1933) 50 CLR, at p 104 . In the citation made by his Honour from the opinion of the Court delivered by Hughes C.J. in Sproles v. Binford [1932] USSC 121; (1932) 286 US 374, at p 394 [1932] USSC 121; (76 Law Ed 1167, at p 1182) , there occurs the statement "The State provides its highways and pays for their upkeep. Its people make railroad transportation possible by the payment of transportation charges. It cannot be said that the State is powerless to protect its highways from being subjected to excessive burdens when other means of transportation are available" (1933) 50 CLR, at p 105 . McTiernan J. after completing the quotation said: "This statement applies with equal force where the railways as well as the roads are built and maintained out of public funds and are owned and managed and controlled by the State" (1933) 50 CLR, at p 105 . (at p74)
27. On the whole I think that it is now possible to regard the Transport Cases as confined in their application to the control by the States of the use of roads provided and maintained by the States as an alternative to the use of railways also provided and maintained by the States. I hope that I have already said enough to make it unnecessary for me to add that I must not be taken as agreeing that such a view of the use of a highway for inter-State trade justifies an interference which otherwise s. 92 would not allow. In truth my personal opinion is entirely to the contrary. But that is nothing to the point. The point is that once the decisions are confined to such a situation they do not so govern the general operation of s. 92 as to cause an ever recurring difficulty in applying s. 92 according to the principles which otherwise would appear now to be established. On the footing that they are so confined I shall act on the authority of McCarter v. Brodie [1950] HCA 18; (1950) 80 CLR 432 . (at p74)
28. The plaintiff, however, contended that another reason existed for declining to apply the Transport Cases to the legislation as it stands. That reason lies first in the virtual disappearance of the powers which might have enabled the old State Transport (Co-ordination) Board to perform the function, of which so much is said in these cases, of co-ordinating rail and road transport, and second in the vesting in an officer, bound by ministerial direction, of the authority to licence and of the almost uncontrollable discretion that now exists. For the plaintiff it was pointed out, indeed, that in Vizzard's Case [1933] HCA 62; (1933) 50 CLR 30 itself notwithstanding that the date of the offence from which it arose was 30th April 1933, no account was taken of the important changes produced successively by the Ministry of Transport Act 1932 (N.S.W.) as from 22nd March 1932 and by the Transport (Division of Functions) Act 1932 (N.S.W.) as from 29th December 1932. (at p75)
29. I am not prepared to distinguish the Transport Cases on these grounds. To do so would in my opinion involve an unreal refinement. (at p75)
30. A further contention was advanced on behalf of the plaintiff. It was that because the old tonnage rates per mile in New South Wales of one penny over three hundred miles, of two pence between two hundred and one hundred miles and three pence for the first two hundred and one hundred miles and three pence for the first one hundred miles were retained for journeys between the Sydney or Newcastle districts and Melbourne or Adelaide, the rate of three pence for journeys between Sydney and Brisbane became discriminatory. The result may perhaps be a discrimination in favour of trade with Adelaide and Melbourne as against trade with Brisbane, but it does not appear to be a discrimination against inter-State trade as compared with the domestic trade of the State. In my opinion the difference forms no sufficient reason for distinguishing the Transport Cases. (at p75)
31. Finally the point was taken that the levy of the tonnage rates amounted to an excise duty placed beyond the power of the State by s. 90 of the Constitution. In answer to this contention it is, I think, enough to say that the tonnage rate is not a tax directly affecting commodities. It is calculated on the combined weight of the vehicle and weight of the load it is capable of carrying and is payable in respect of the employment of the vehicle upon a journey independently of the weight or quantity of the commodities carried. It is a tax on the carrier because he carries goods by motor vehicle. (at p75)
32. Having decided to treat McCarter v. Brodie [1950] HCA 18; (1950) 80 CLR 432 , for the reasons I have given as not open to review in this proceeding, it follows in my opinion that my conclusion must be against the plaintiff's demurrer to the defence. (at p76)
33. I think the demurrer should be overruled. (at p76)
McTIERNAN J. I agree with the conclusion of the learned Chief Justice that the demurrer should be overruled. Special matters are raised by the pleadings and by the argument regarding the amendments made to the State Transport (Co-ordination) Act 1931 (N.S.W.) I do not wish to add anything about those matters. My observations represent my views on questions raised by the plaintiff's claim for a declaration that the Act is invalid. (at p76)
2. The principle of stare decisis cannot be eliminated from constitutional cases without danger to the stability of law, for important economic and social legislation rests upon the decisions of this Court. The Transport Cases confirm the Transport Acts of all the States. These cases could not be reversed without danger to the good order and government of the States, or without casting doubts upon the validity of Commonwealth Acts regulating inter-State commerce and communications, and State Acts besides the Transport Acts. The principle of stare decisis, of course, is not rigid and decisions upon the Constitution are not irreversible by this Court. If such decisions were not open to review by the Court the Constitution might become obsolete as an instrument of government. Fresh interpretations of grants of legislative power and of constitutional guarantees may be needed to adapt them to new or changed conditions. It is also right for the Court to depart from a decision which is manifestly wrong, whether it involves the interpretation of a grant of power or a guarantee against certain exertions of power. (at p76)
3. I am unable to agree that the decision in R. v. Vizzard; Ex parte Hill [1933] HCA 62; (1933) 50 CLR 30 is wrong. It was affirmed in McCarter v. Brodie [1950] HCA 18; (1950) 80 CLR 432 upon the propositions which the Judicial Committee in the Bank Case [1949] HCA 47; (1950) AC 235; (1949) 79 CLR 497 laid down with respect to s. 92. The Judicial Committee refused a petition for special leave to appeal against the decision in McCarter v. Brodie [1950] HCA 18; (1950) 80 CLR 432 . That was not the first occasion upon which the Privy Council refused to intervene in a case involving the question whether Vizzard's Case [1933] HCA 62; (1933) 50 CLR 30 was correctly decided. The case was in the foreground in James v. Commonwealth (1936) AC 578; 55 CLR 1 . Latham C.J. and Williams J. have said in the course of judgments upon s. 92 that the Judicial Committee in James v. Commonwealth (1936) AC 578; 55 CLR 1 approved of the decision in Vizzard's Case [1933] HCA 62; (1933) 50 CLR 30 . Their Honours were not members of the Court which decided Vizzard's Case [1933] HCA 62; (1933) 50 CLR 30 . I have always been of the same opinion. It seems to me that unless the Judicial Committee in James v. Commonwealth (1936) AC 578; 55 CLR 1 were of the opinion that the State Transport (Co-ordination) Act was in harmony with s. 92 the references to Vizzard's Case (1933) 50 CLR 30 are pointless. In McCarter v. Brodie [1950] HCA 18; (1950) 80 CLR 432 we were asked to overrule the decision in Vizzard's Case [1933] HCA 62; (1933) 50 CLR 30 and the Transport Cases which followed it. Willard v. Rawson [1933] HCA 12; (1933) 48 CLR 316 which preceded Vizzard's Case [1933] HCA 62; (1933) 50 CLR 30 escaped attack. The Court in McCarter v. Brodie [1950] HCA 18; (1950) 80 CLR 432 affirmed the decision in Vizzard's Case [1933] HCA 62; (1933) 50 CLR 30 . Now, we are asked to overrule McCarter v. Brodie [1950] HCA 18; (1950) 80 CLR 432 and Vizzard's Case [1933] HCA 62; (1933) 50 CLR 30 . The Court in the former case reaffirmed that the Transport Regulation Acts of Victoria are in harmony with s. 92. This legislation is akin to the State Transport (Co-ordination) Act 1931-1952 (N.S.W.). I adhere to what I said in McCarter v. Brodie [1950] HCA 18; (1950) 80 CLR 432 about the observations made by the Judicial Committee in the Bank Case (1950) AC 235; (1949) 79 CLR 497 in reference to the decision in Vizzard's Case [1933] HCA 62; (1933) 50 CLR 30 . These observations support the authority of the decision in the latter case. It is argued for the plaintiff that the decision in McCarter v. Brodie [1950] HCA 18; (1950) 80 CLR 432 is repugnant to the reasons and decision upon s. 92 in Commonwealth v. Bank of New South Wales [1949] HCA 47; (1950) AC 235; (1949) 79 CLR 497 . This argument, in my opinion, is wrong. Surely it is a telling reason against reviewing McCarter v. Brodie [1950] HCA 18; (1950) 80 CLR 432 and reversing it, that the Judicial Committee declined to intervene. (at p77)
4. Vizzard's Case [1933] HCA 62; (1933) 50 CLR 30 was decided under a doctrine, laid down in W. & A. McArthur Ltd. v. State of Queensland [1920] HCA 77; (1920) 28 CLR 530 , which extended s. 92 so widely that in effect it contradicted s. 51(i.), but as the doctrine included the theory that only the States were bound by s. 92, it did not render the Constitution unworkable. According to the doctrine, a State legislature was prohibited from regulating inter-State trade or commerce as such; but James v. Commonwealth (1936) AC 578; 55 CLR 1 impinged upon this doctrine and demolished the theory that s. 92 is addressed only to the States. The Bank Case (1950) AC 235; (1949) 79 CLR 497 removed what remained of the doctrine that regulation of trade commerce or intercourse among the States is incompatible with the freedom guaranteed by s. 92. Between McArthur's Case [1920] HCA 77; (1920) 28 CLR 530 and Vizzard's Case [1933] HCA 62; (1933) 50 CLR 30 , notwithstanding the former case, this Court decided that s. 92 did not prohibit a State legislature from passing non-discriminatory laws with a primary object directed to matters, within the legislative powers of the State, affecting its economy or the common good, even though the freedom of inter-State trade commerce or intercourse was incidentally affected by the laws. I endeavoured to decide Vizzard's Case [1933] HCA 62; (1933) 50 CLR 30 upon that basis. I proceeded upon the American view that the transportation of goods by vehicles, which the Act requires to be licensed, is commerce. (at p78)
5. The difficulty that s. 92 prohibited regulation, met with in Vizzard's Case [1933] HCA 62; (1933) 50 CLR 30 , was not so pressing in McCarter v. Brodie [1950] HCA 18; (1950) 80 CLR 432 , because the Bank Case (1950) AC 235; (1949) 79 CLR 497 establishes that the regulation of commerce is compatible with its freedom. The majority in McCarter v. Brodie [1950] HCA 18; (1950) 80 CLR 432 arrived at their conclusion by applying the principles and rules which the Judicial Committee worked out in the Bank Case (1950) AC 235; (1949) 79 CLR 497 to test a law for invalidity under s. 92. (at p78)
6. Rich J. said in Vizzard's Case [1933] HCA 62; (1933) 50 CLR 30 that any restriction which may result from the State Transport (Co-ordination) Act to inter-State trade or commerce would not be sufficiently direct to invalidate the Act. The refusal of a licence would, of course, result in interference with inter-State commerce if the applicant for the licence were an inter-State carrier; for the Act would prohibit him from operating the vehicle, for which the licence was sought, in New South Wales. But it would be a purely accidental circumstance that the carrier's activities were of an inter-State character. The Judicial Committee said in the Bank Case (1950) AC 235; (1949) 79 CLR 497 , that they would not attempt to define the boundary between a restriction which is direct and one which is too remote. My conclusion in McCarter v. Brodie [1950] HCA 18; (1950) 80 CLR 432 , in which I endeavoured to apply the criteria laid down in the Bank Case (1950) AC 235; (1949) 79 CLR 497 , was that the Transport Regulation Acts of Victoria are essentially regulatory of transport within the State, and any restriction upon inter-State commerce that may arise from the operation of the Acts would not be direct and immediate but indirect and consequential. (at p78)
7. I have read a copy of the petition in McCarter v. Brodie [1950] HCA 18; (1950) 80 CLR 432 for special leave to appeal and of the transcript of the argument at the hearing of the petition. The reading of these documents has fortified me in the conclusion that the decision in McCarter v. Brodie [1950] HCA 18; (1950) 80 CLR 432 should not be reviewed. It appears from the documents that the decision of the majority was attacked and the decision of the minority was supported with all the arguments that were addressed to us on behalf of the plaintiff in the present case. The refusal of the petition is not at all helpful to the argument, advanced for the plaintiff in this case, that it is inconsistent with the decisions of the Judicial Committee in the James Cases, and with the decision and reasons of the Judicial Committee in the Bank Case (1950) AC 235; (1949) 79 CLR 497 , to decide that either the transport regulation legislation of Victoria or the State Transport (Co-ordination) Act of New South Wales, is in harmony with s. 92. The argument is founded upon the wide discretion conferred by each Act to grant or refuse licences. Notwithstanding this feature of the latter Act, the Judicial Committee said of the decision in Vizzard's Case [1933] HCA 62; (1933) 50 CLR 30 that it may be reconciled with the decision in James v. Cowan (1932) AC 542; 47 CLR 386 . That observation should be noticed in connection with the contention, made for the plaintiff, that the effect of the State Transport (Co-ordination) Act is to authorise the prohibition of inter-State commerce at the mere will of the Executive and to put direct and immediate restrictions upon such commerce. The contention, in my opinion, is based upon a misunderstanding of the Act. I venture to say that the Judicial Committee could not have thought either in James v. Commonwealth (1936) AC 578; 55 CLR 1 , the Bank Case (1950) AC 235; (1949) 79 CLR 497 , or at the hearing of the petition in McCarter v. Brodie (1950) 80 CLR 432 , that the contention does justice to the legislative scheme of this transport legislation. The discretion conferred to grant or refuse licences is wide but not unlimited. Authority is not granted to refuse a licence merely because the applicant wants to use the vehicle, for which a licence is sought, in inter-State transportation across New South Wales, nor is any authority given to refuse a licence to any applicant out of bias, prejudice or for a reason irrelevant to the purposes of the Act. It is plain from the reasons of the Judicial Committee in the Bank Case (1950) AC 235; (1949) 79 CLR 497 that s. 92 does not strike at every regulatory law under which inter-State commerce is not kept open to all comers. It was argued for the plaintiff that in a licensing scheme truly regulatory of motor transport and consistent with s. 92 the question of the facilities provided by the railways can play no part. This argument was advanced upon the hearing of the petition in McCarter v. Brodie [1950] HCA 18; (1950) 80 CLR 432 for special leave. The reason why that question is out of place, so the argument runs, is that in order to maintain harmony with s. 92 it is necessary to specify the conditions with which an inter-State carrier must comply. It was said that conditions directed to the safety of the public would be permissable, but subject to the proviso that the conditions impose no undue burden upon the commerce. (at p79)
8. The scheme leaves very uncertain room for such burdens as premiums for third party insurance, workers' compensation, awards prescribing minimum wages and maximum hours of work and other burdens like pay-roll tax upon the wages of the inter-State carriers' employees. (at p80)
9. Another instance which was put of the impact of s. 92 upon State law is that an inter-State carrier could complain that a toll on a bridge is an undue burden on inter-State commerce unless it is "reasonable". I agree with the criticism made by Latham C.J. in McCarter v. Brodie [1950] HCA 18; (1950) 80 CLR 432 of the suggestion that an inter-State carrier is entitled under s. 92 to have such a complaint investigated by a Court. If inter-State carriers and passengers are entitled to make such a complaint about a toll, other charges, made by the State and the Commonwealth, in connection with inter-State journeys would be exposed to challenge. In the case of the Sydney Harbour Bridge, in respect of which the suggestion was specifically made, the pursuit of the complaint, might involve an examination of the public finances of the State, and perhaps of the Commonwealth, because of the connection between them, also technical questions of depreciation and obsolescence, and political, social and economic issues. I do not agree that inter-State carriers or passengers are entitled by s. 92 to object to tolls or charges which fall equally upon them and intra-State carriers and passengers and as to which there is no question of discrimination. (at p80)
10. It is perhaps useful to observe that in New South Wales early legislation dealing with the provision of roads authorised the collection of tolls on roads. These tolls were abolished about 1890. In 1907 tolls on road ferries were abolished and local governing bodies took over the control of the ferries from the Government and it undertook to pay subsidies in respect of the running of the ferries. Ordinance No. 33 made under the Local Government Act 1919-1952 (N.S.W.) provides for the payment of charges in respect of certain ferries mentioned in cl. 3 and cl. 20c. Further, certain Acts provided for the charging of tolls on particular bridges. These are the George's River Bridge, the Spit Bridge and the Parramatta River Bridge (Ryde to Concord). The Acts are Nos. 23 of 1923, 24 of 1923 and 9 of 1931. These tolls are only chargeable until the capital cost of the bridge has been repaid. Upon this event, the plan is for the Main Roads Board to take over the bridge as part of the main road to which it is attached. Section 60 of the Main Roads Act 1924-1951 (N.S.W.), inserted in the Act in 1929, made provision for the levying of tolls and charges generally upon any bridge or ferry upon any metropolitan main road or a country State Highway. Local Government Ordinance No. 30 makes provision for charging tolls on the Peat's Ferry Bridge. It appears that this bridge and the Sydney Harbour Bridge are the only toll bridges at present in New South Wales. (at p81)
11. From the complaint made by the plaintiff about the limiting effect of the conditions of the licences and the permits upon its freedom to choose the roads on which to operate its vehicle, it seems to me that the plaintiff is asserting in respect of the roads and bridges of the State a right as general as that which Evatt J. described in the passage quoted by Lord Wright in James v. Commonwealth (1936) AC 578; 55 CLR 1 . (at p81)
12. The Municipal and Shire Councils are empowered under Part IX of the Local Government Act 1919 to provide and construct public roads. The provision of public roads was an original function of local government. Roads which were left in the sub-division of Crown lands were taken over by the councils under the Local Government (Amendment) Act 1908. The Public Roads Act 1902 (N.S.W.) provides for roads to be declared public roads. The construction of roads, of course, was dealt with by earlier Acts. Since the passing of the Main Roads Act 1924, roads may be proclaimed as main roads; the construction of main roads is governed by that Act, ss. 8, 14, 15, 21B, 21C, 25 and 32. A public road is defined under s. 4 of the Local Government Act 1919, and by this Act the fee simple of every public road is vested in the council subject to any express or implied dedication to the public. Section 249 of the Local Government Act 1919 confers the care, control and management of every public road upon the council in whose area it lies and permits the council, among other things, to regulate the use of the road by the public. This section confers other specific powers on the council in relation to public roads. Section 269 empowers councils to regulate traffic in public places and s. 277 permits ordinances to be made in relation to particular matters concerning roads. Ordinances Nos. 30, 30C, 30D, 33 and 34 have been made in relation to road matters generally, including the weight of loads on vehicles on main roads, other roads and ferries. The powers of councils in relation to the care, control and management of main roads are subject to s. 39 of the Main Roads Act 1924. This Act by s. 51 also empowers ordinances to be made under the Local Government Act in relation to main roads. (at p81)
13. It is a matter of public knowledge that roads are constructed for the convenience of all classes of traffic which can be accommodated upon the roads, as feeders for the railways, for the development of the State and often with an eye to defence. Without roads, bridges and ferries the business of motor transport could not exist but it must not be imagined that these facilities are provided under these statutory provisions primarily as aids to the business. Section 92 does not operate as a dedication of the public roads and bridges of the State to inter-State transport. I cannot agree that by reason of the section, the right of the State to control its roads and bridges is so subordinate to the freedom of inter-State transportation, that the State Parliament is unable to regulate motor transport with the object of preventing such conditions as Rich J. described in Vizzard's Case [1933] HCA 62; (1933) 50 CLR 30 or to avoid damage to the economy of the railways and the State itself. (at p82)
WILLIAMS J. So far as the plaintiff relies on s. 92 of the Constitution to invalidate the State Transport (Co-ordination) Act 1931-1952 (N.S.W.), or certain sections thereof, it is common ground that unless McCarter v. Brodie [1950] HCA 18; (1950) 80 CLR 432 is overruled the plaintiff must fail because the essential provisions of this Act are similar to those of the Transport Regulation Act 1933-1947 (Vict.) and the latter Act was held in this Court by a majority of four to two not to infringe s. 92. The present action has been brought in the hope that changes in the constitution of the Court might result in that case being overruled. I think that case was rightly decided and I did not intend to say more than that, in my opinion, it should be followed, with the consequence that the plaintiffs' case so far as it rests on s. 92 should fail. But the views of the majority (particularly my own) in that case are under attack and in particular it has been said that they are inconsistent with the three decisions upon the meaning of s. 92 given by the Privy Council and this moves me to add a few remarks to what I have already said. My brother Kitto has said of the Transport Cases that the judgment in Commonwealth v. Bank of New South Wales [1949] HCA 47; (1950) AC 235; (1949) 79 CLR 497 wrote their epitaph in characters too plain to be missed or to be mistaken. Yet, of R. v. Vizzard; Ex parte Hill [1933] HCA 62; (1933) 50 CLR 30 , the principal case, what the Privy Council actually said in the Banking Case (1950) AC 235; (1949) 79 CLR 497 was that "The decisions in James v. Cowan (1932) AC 542; 47 CLR 386 and in Vizzard's Case [1933] HCA 62; (1933) 50 CLR 30 may be reconciled: it would not be easy to reconcile all that was said by Evatt J. in the one case with all that was said by Isaacs J. in the other" (1950) AC, at p 309; (1949) 79 CLR, at p 638 . This is, with respect, a somewhat obscure epitaph for a long line of cases acted upon in the States which I venture to repeat should not be reopened without the greatest hesitation. Then there is the fact that in McCarter v. Brodie [1950] HCA 18; (1950) 80 CLR 432 , after a very full argument, special leave to appeal was refused by the Privy Council presided over by Lord Porter who also presided in the Banking Case (1950) AC 235; (1949) 79 CLR 497 . Their Lordships gave no reasons and too much significance should not be attached to this refusal. But one of the reasons which their Lordships gave in the Banking Case (1950) AC 235; (1949) 79 CLR 497 for taking the unusual course of stating their views on the meaning of s. 92 in a case in which they held they had no jurisdiction to entertain the appeal was that it appeared to them that a large part of the appellant's argument was based on a misapprehension of the two previous cases decided by the Board. One might therefore have expected that their Lordships would have again intervened, if it appeared to them that this Court in McCarter v. Brodie (1950) [1950] HCA 18; 80 CLR 432 , consistently with what they had said, could not have upheld the Victorian Act. (at p83)
2. Does not the correctness of the decision in McCarter v. Brodie [1950] HCA 18; (1950) 80 CLR 432 really depend on what their Lordships meant when they said that regulation of trade commerce and intercourse among the States is compatible with its absolute freedom? If by regulation they meant regulation that went no further than prescribing rules of conduct reasonably required for the orderly carrying on of some form of trade and commerce with which it should be possible for everyone to comply and subject to which everyone would have the right to engage therein, it may be that the Transport Acts go too far. But is the regulation their Lordships contemplated as narrow as this? The general tenour of their remarks appears to me to be to the contrary. They say: "The problem to be solved will often be not so much legal as political, social, or economic, yet it must be solved by a court of law" (1950) AC, at p 310; (1949) 79 CLR, at p 639 . They contemplate that in certain circumstances, no doubt very exceptional, "it might be maintained that prohibition with a view to State monopoly was the only practical and reasonable manner of regulation and that inter-State trade commerce and intercourse thus prohibited and thus monopolized remained absolutely free" (1950) AC, at p 311; (1949) 79 CLR, at p 641 . They cite a passage from the judgment of Latham C.J. in Milk Board (New South Wales) v. Metropolitan Cream Pty. Ltd. [1939] HCA 28; (1939) 62 CLR 116, at p 127 , reproduced in his judgment in Australian National Airways Pty. Ltd. v. Commonwealth [1945] HCA 41; (1945) 71 CLR 29, at p 61 , which reads as follows: "One proposition which I regard as established is that simple legislative prohibition (Federal or State), as distinct from regulation, of inter-State trade and commerce is invalid. Further, a law which is 'directed against' inter-State trade and commerce is invalid. Such a law does not regulate such trade, it merely prevents it. But a law prescribing rules as to the manner in which trade (including transport) is to be conducted is not a mere prohibition and may be valid in its application to inter-State trade, notwithstanding s. 92" (1). Their Lordships added "With this statement, which both repeats the general proposition and precisely states that simple prohibition is not regulation, their Lordships agree" (1950) AC, at pp 310-311; (1949) 79 CLR, at p 640 . A glance at the Milk Case [1939] HCA 28; (1939) 62 CLR 116 will make it clear that the rules to which Latham C.J. was referring were certainly not confined to rules which left it open to everyone to compete in the industry, because the Act there in question provided for the expropriation of all the owners and the vesting of their milk in a board, the justification being that the expropriation was directed towards fixing the price for the sale of the milk in the metropolitan district of Sydney and its hygienic treatment and distribution so as to safeguard the health of the inhabitants of that district. The Privy Council has twice, at least, referred to the meaning of "regulation". In Attorney-General for Ontario v. Attorney-General for the Dominion (1896) AC 348, at p 363 , their Lordships said that they saw no reason to modify the opinion which was recently expressed on their behalf by Lord Davey in Municipal Corporation of City of Toronto v. Virgo (1896) AC 88, at p 93 in these terms: "Their Lordships think there is marked distinction to be drawn between the prohibition or prevention of a trade and the regulation or governance of it, and indeed a power to regulate and govern seems to imply the continued existence of that which is to be regulated or governed". There is no suggestion in this definition that the regulation of some form of trade and commerce cannot in appropriate circumstances restrict the number of persons authorised to engage in it. The thing which is to continue to exist is the trade itself and not the right of every individual to engage in it. (at p84)
3. I have never doubted that the freedom to engage in trade and commerce among the States guaranteed by s. 92 attaches to the individual and not to the goods. But their Lordships have said in the Banking Case (1950) AC 235; (1949) 79 CLR 497 that regulation of trade and commerce among the States is compatible with its absolute freedom and, if I understand them aright, that there may be instances in which such regulation will not infringe this freedom, although it extends to excluding some individuals from engaging in it. One instance might be where the particular form of trade and commerce, possibly banking or life insurance, involves requirements, such as great financial stability and permanence, which make it proper to provide that only corporations should be authorised to take part therein. This would have the effect of excluding all individuals from directly engaging in these activities and would only allow them to do so indirectly as shareholders in or executives of a corporation. Provided regulation can, where there are exceptional circumstances, go beyond the limited conception of regulation under discussion, there is every reason for upholding the Transport Cases. Australia is a land of great distances inhabited by a comparatively small but growing population. The maintenance and extension of its railways and roads to keep pace with the growth of its population and the development of the country present an acute economic problem. It is obviously for the benefit of the country that it should possess first-class roads, especially main roads, but it is equally obvious that the States by constructing and maintaining such roads can injure their railways, unless they are entitled to control such competition and give carriage by rail priority where carriage by rail and road come into competition. (at p85)
4. Their Lordships have said that the problem to be solved, whether an enactment is regulatory or something more, is one of fact as to which there cannot fail to be differences of opinion. That is exactly what has happened in the Transport Cases. There are now, and have always been, differences of opinion on this Court. But that is not a ground for upsetting a long line of previous decisions, even on a constitutional issue, especially where those decisions are open to review in the Privy Council if special leave is granted without the necessity of obtaining a certificate from this Court under s. 74 of the Constitution. Section 92 does not say that anyone either the Commonwealth or a State or a private individual must provide anyone else with any facilities for carrying on trade and commerce among the States. A person who wishes to carry goods by road inter-State requires the necessary vehicles in which to carry the goods as well as the necessary roads on which to carry them. He may not be able to obtain the vehicles he requires in Australia and may have to import them from overseas. But it has never been contended that import laws which prevent him from doing so are a breach of s. 92. The problem of controlling and co-ordinating modern fast moving transport by rail and road is world-wide. Many of the provisions of s. 17 of the New South Wales Act are taken from s. 72 of the Road Traffic Act 1930 (Imp.) (20 & 21 Geo. 5 c. 43) relating to passenger transport. In this Act the expression occurs "the co-ordination of all forms of passenger transport, including transport by rail". The same problem exists in the United States of America and is discussed in many cases, examples of which are Buck v. Kuykendall [1925] USSC 42; (1924) 267 US 307 (69 Law Ed 623) ; Bush & Sons Co. v. Maloy [1925] USSC 55; (1925) 267 US 317 (69 Law Ed 627) and Lloyd A. Fry Roofing Co. v. Wood (1952) 97 Ad Repts 145 . The power of Congress to make laws under the Constitution of the United States to regulate commerce among the States is, unlike the power to make laws with respect to that subject matter under s. 51(i.) of the Australian Constitution, an exclusive power and it has therefore been held in the United States that laws similar to the Transport Acts are beyond the legislative powers of the States. But it is clear from the judgments in these cases that the power of Congress to regulate commerce is wide enough to authorise laws regulating competition between rail and road. The purpose of the New South Wales Act is to improve and co-ordinate the means of and facilities for locomotion and transport, the official charged with its administration now being a corporation sole, the Director of Road Transport. The principal section is s. 17. The discretion conferred upon him by this section is extremely wide but it is not unlimited. It must be exercised bona fide and so as to carry into effect the purposes of the Act. Otherwise the duty to exercise the discretion according to law could be enforced by mandamus. It is wrong to say that the Act is in no way concerned with roads or the use of roads as such. Section 17 provides that one of the considerations the director must have regard to is the condition of the roads to be traversed with regard to their capacity to carry the proposed vehicular traffic without unreasonable damage to such roads. Apart from the competitive angle, a State must have, I should think, wide powers of regulating the use of its roads in the interests of public safety and their maintenance. It must have the power within reason to decide for what kinds of vehicles the roads are suitable. It must have power to limit their length, width, height and weight. It must have power to prevent overcrowding though this would have the effect of limiting the number of vehicles. (at p86)
5. The problems dealt with in the Transport Cases are altogether different from the problem that arose in the James Cases. Their Lordships have said so in the Banking Case (1950) AC 235; (1949) 79 CLR 497 . They said of these cases and Vizzard's Case [1933] HCA 62; (1933) 50 CLR 30 : "The facts in relation both to subjectmatter and to manner of restriction or interference are so widely different in the two cases that it is difficult to apply to one case all that was said in the other". The effect of the State and the Commonwealth legislation impeached in the James Cases was to prevent growers of dried fruit disposing of their product inter-State unless they could get a licence to do so and, if they got a licence, only to the extent authorised by the licence. The Transport Acts do not prevent anyone carrying on the business of an inter-State carrier. What they do is to compel carriers to rely on such vehicles, whether publicly or privately owned, as the States authorise to use the railways or the roads which the States themselves provide. In this connection it should be noted that the passage from the judgment of Evatt J. which received the approval of the Privy Council in James v. Commonwealth (1936) AC 578; 55 CLR 1 stated that s. 92 does not give to the owner of goods which are to be carried inter-State or to the contractor who carries them the right to choose "how" each of them will transport the commodities. (at p87)
6. It was also contended for the plaintiff that the road charges are an excise duty and therefore beyond the constitutional power of the States. Section 90 of the Constitution. In my opinion this contention fails. On this point I agree with the reasons for judgment of the Chief Justice. (at p87)
7. I would overrule the demurrer. (at p87)
WEBB J. I would overrule the demurrer. (at p87)
2. There has not been any change in this State Transport (Co-ordination) Act 1931-1952 (N.S.W.) which renders inapplicable to the legislation as to how stands the decision of this Court in R. v. Vizzard; Ex parte Hill [1933] HCA 62; (1933) 50 CLR 30 . Sections 17 and 18 are in the same terms as they were when that case was decided: they still empower the licensing authority to grant or refuse a licence, and to amend the conditions of a licence, and to do so in the uncontrolled discretion of the authority as I read them. They could hardly be made more open to attack under s. 92, short of being expressly directed against inter-State transport. (at p87)
3. In McCarter v. Brodie [1950] HCA 18; (1950) 80 CLR 432, at p 478 I was one of the majority of the Court that held that Vizzard's Case [1933] HCA 62; (1933) 50 CLR 30 should be regarded as having been rightly decided. It appeared to me that the reasoning of Evatt J. in that case had received the imprimatur of the Privy Council in James v. Commonwealth (1936) AC 578, at p 622; [1936] HCA 32; 55 CLR 1, at p 51 and that this had not been withdrawn by their Lordships in Commonwealth v. Bank of New South Wales [1949] HCA 47; (1950) AC 235; (1949) 79 CLR 497 . On the contrary their Lordships in suggesting how far regulations might go without infringing s. 92 said in the Banking Case (1950) AC, at p 311; (1949) 79 CLR, at pp 640-641 : "For their Lordships do not intend to lay it down that in no circumstances could the exclusion of competition so as to create a monopoly either in a State or Commonwealth agency or in some other body be justified. Every case must be judged on its own facts and in its own setting of time and circumstance, and it may be that in regard to some economic activities and at some stage of social development it might be maintained that prohibition with a view to State monopoly was the only practical and reasonable manner of regulation, and that inter-State trade, commerce and intercourse thus prohibited and thus monopolised remained absolutely free". (at p88)
4. I have no reason for thinking that in making those observations their Lordships had in mind nothing more than the possibility that Socialism or State Capitalism might some day be adopted in Australia: the stage of social development that they appear to have contemplated was one at which some, but not necessarily all, economic activities might be made the subject of a State monopoly. As regards postal, telegraphic, telephonic and the like services, Australia appears to have long since reached the stage when those services can be made the subject of a State monopoly without infringing s. 92. Yet the power to legislate in respect of those services is subject to the Constitution, including s. 92. See s. 51(v.) of the Commonwealth Constitution. It is not an answer to say that the postal monopoly existed before Federation. So did other things that s. 92 rendered invalid. (at p88)
5. However, their Lordships in the Banking Case (1950) AC 235; (1949) 79 CLR 497 , did not think that a stage had yet been reached when the activities of banking could be made the subject of a State monopoly without a breach of s. 92. But I do not think it follows that they necessarily entertained the same view about road transport. The banking situation and the road transport situation are constituted of entirely different sets of fact, and questions that arise under s. 92 are always questions of fact, as has been pointed out by the Privy Council in James v. Commonwealth (1936) AC 578; 55 CLR 1 in a passage (1936) AC, at p 631; 55 CLR, at p 59 referred to in the Banking Case (1950) AC, at p 309; (1949) 79 CLR, at p 638 . As their Lordships pointed out in the Banking Case (1950) AC, at p 309; (1949) 79 CLR, at p 638 - "The facts in relation both to subject-matter and to manner of restriction or interference are so widely different in the two cases that it is difficult to apply to one case all that was said in the other". Their Lordships had already stated (1950) AC, at p 308; (1949) 79 CLR, at p 638 that every word of every judgment must be read secundum subjectam materiam. (at p89)
6. If their Lordships reviewed the Australian road transport situation as it now exists I do not feel warranted in concluding from their observations in the Banking Case (1950) AC 235; (1949) 79 CLR 497 , that they would necessarily hold invalid this New South Wales transport legislation, or any other State's transport legislation which has come under review in this Court. After all in no case does such legislation go to the length of authorising a State or other monopoly; and it may well be that in no case can it be shown that it is not called for by the factual situation with which it deals, apart from the necessity to obey s. 92. I repeat here what I said in my reasons for judgment in McCarter v. Brodie (1950) 80 CLR, at p 481 : "If economic activities at some stage of social development could justify legislation giving a monopoly as being essentially regulatory, legislation short of that might be essentially regulatory in circumstances not so exceptional, e.g., legislation to co-ordinate and rationalise motor transport to protect State railways against competition". (at p89)
7. Nothing has occurred to cause me to change the opinion I formed in McCarter v. Brodie (1950) 80 CLR, at p 481 , in the light of their Lordships' observations in James v. Commonwealth (1936) AC 578; 55 CLR 1 and the Banking Case [1949] HCA 47; (1950) AC 235; (1949) 79 CLR 497 , although without the guidance afforded by those observations as I understand them I would have come to a different conclusion, as appears plainly enough in what I said in McCarter v. Brodie (1950) 80 CLR, at p 482 , and which is now recalled by Fullagar and Kitto JJ. The Privy Council refused special leave to appeal against the decision in McCarter v. Brodie [1950] HCA 18; (1950) 80 CLR 432 , but it by no means follows that in refusing special leave their Lordships approved of that decision. It may be that their Lordships merely took the view that for the time being at all events they had given sufficient guidance, more particularly in the Banking Case (1950) AC 235; (1949) 79 CLR 497 , for the determination of s. 92 problems, seeing that they had indicated that those problems will often be not so much legal as political, social or economic, and that it is possible that valid solutions might cover a range so wide according to time and circumstance as to comprise even a State monopoly. Here it is to be noted that Evatt J. in Vizzard's Case (1933) 50 CLR, at pp 81, 82 referred to partial and even complete monopolies of land transport as being already within the power of a State. To say the least this has not yet been expressly denied by their Lordships. (at p90)
8. I desire to add my respectful concurrence in the reasons of Williams J. in McCarter v. Brodie (1950) 80 CLR, at p 477 for not re-opening these Transport Cases without the greatest hesitation. (at p90)
9. I should also add that in my opinion charges imposed by this legislation do not infringe s. 90 of the Commonwealth Constitution. O. Gilpin Ltd. v. Commissioner for Road Transport and Tramways (N.S.W.) [1935] HCA 8; (1935) 52 CLR 189, at p 214 . (at p90)
FULLAGAR J. After a careful consideration of this case, I have not been able to see the slightest reason for changing, or modifying in any way, the opinion which I expressed in McCarter v. Brodie [1950] HCA 18; (1950) 80 CLR 432 . But, although I found myself in agreement with the present Chief Justice, and although my brother Webb (1950) 80 CLR, at p 482 found it "difficult to see" how the legislation in question in that case could be regarded otherwise than as "prohibitive or restrictive", the view of the learned Chief Justice and myself did not prevail. The consequence of these two facts is that I seem now to be faced with a choice between two evils - saying that the majority decision in McCarter v. Brodie [1950] HCA 18; (1950) 80 CLR 432 ought not to be followed, or accepting a view which appears to me to strike at the root of inter-State freedom of trade. I do not think that I shall be repeating anything that I said in McCarter v. Brodie [1950] HCA 18; (1950) 80 CLR 432 if I begin by stating, as briefly as I can, the foundation of the position as I see it. (at p90)
2. The difficulties and differences of opinion to which s. 92 has given rise have seemed to me to derive not so much from any supposed ellipsis (the supposition of an ellipsis is indeed apt to be misleading) as from the fact that the section is expressed in abstract terms but has to be applied in relation to concrete facts and situations. One might almost say that we have to deduce a denotation from a loosely expressed connotation. Because of this it was inevitable - and it was by no means unforeseen among those who were responsible for the section - that attempts should be made to apply s. 92 to cases remote from the imagination of those who framed, those who adopted, and those who enacted, the Constitution. It may be that the section, as interpreted, has not only left undone things which it ought to have done but has done things which it ought not to have done. But it has always seemed to me that legislation of the nature of that with which the present case is concerned, and with which McCarter v. Brodie (1950) 80 CLR 432 was concerned, is just the very kind of thing which s. 92 was designed to prevent. (at p91)
3. It has often been observed that inter-State free trade is probably a fundamental necessity of any federal system. In the case of Australia it was a primary object of Federation. When the Constitution was framed, the most prominent consideration which led to the adoption of s. 92 lay doubtless in the existence of customs duties, which were, before Federation, imposed by the States (then called Colonies) upon a great variety of goods not only when imported from overseas but also when imported from another State. But I do not think the idea has ever been seriously entertained that s. 92 was concerned only with these inter-State customs duties as such. One of several answers to any such view is found in the fact that s. 90 has already provided that the power to impose duties of customs and excise, and (subject to the exception prescribed by s. 91) the power to grant bounties on the production or export of goods, shall be exclusive powers of the Commonwealth. At the same time, as was observed in James v. Commonwealth (1936) AC 578; 55 CLR 1 , it cannot be doubted that the fundamental conception behind s. 92 was that of a "free border": every person was to be at liberty to take or send goods from State to State (trade and commerce) and to pass from State to State upon his lawful occasions (intercourse) without let or hindrance. There is a passage in the judgment of Higgins J. in W. & A. McArthur Ltd. v. State of Queensland [1920] HCA 77; (1920) 28 CLR 530, at p 561 , which is worthy of remembrance in this connection. As to the most important point which it decided, McArthur's Case [1920] HCA 77; (1920) 28 CLR 530 has been overruled by James v. Commonwealth (1936) AC 578; 55 CLR 1 , and as to other points its authority is perhaps dubious today: even the examples taken by Higgins J. himself of invalid State legislation must be regarded as open to question. But I know of nothing which better captures the spirit of s. 92 than the short passage which I have in mind. His Honour says: "Sec. 91 is really an exception to the provision of sec. 90 as to bounties, and, when sec. 91 is seen in this aspect, sec. 92 appears in its true character, as extending the application of the principle contained in sec. 90 - no more inter-State imposts (sec. 90); no more State restrictions of any kind, present or future, on inter-State trade or intercourse (sec. 92)" (1920) 28 CLR, at p 562 . It is now settled, of course, that the Commonwealth is bound by s. 92 equally with the States, so that for the words "State restrictions" we should, for general purposes, substitute the words "border restrictions". But, for the purposes of the present case, in which it is State legislation that is involved, the passage may be read as it stands. (at p92)
4. Now, an import or export duty does not necessarily operate to restrict seriously or at all the trade of an importer or exporter. We are accustomed in this country to heavy protective duties, designed to an extent to deter and restrict. But a small duty, imposed for revenue purposes and readily "passed on", may not really restrict the importation or exportation of goods by any individual importer or exporter to any appreciable extent. Nevertheless, one would suppose it quite beyond argument that the imposition of any duty on inter-State imports or exports would infringe s. 92. If it were imposed by a State, the matter would be covered by s. 90: if it were imposed by the Commonwealth, it would be covered by s. 92. There would be a burden imposed, real though light. But there are other familiar methods of controlling the passage of goods across frontiers, which are in their nature necessarily restrictive. At least two of these, be it noted, are quite commonly found in customs legislation: they are to be found in the existing Customs Act 1901-1952 (Cth.) and regulations made under ss. 56 and 112: see Reg. v. McLennan; Ex parte Carr [1952] HCA 39; (1952) 86 CLR 46 . These methods include total prohibitions, prohibitions subject to discretionary licences or exemptions, and the imposition of quotas. Each of these methods is obviously and necessarily restrictive of the trade of every person affected by it. In the first case the restriction affects every person who is capable and desirous of engaging in the trade. In the second case, the restriction affects every such person who cannot obtain a licence. In the third case the restriction affects every such person when once the quota is exhausted. Every such person so affected is simply prohibited from engaging in the trade. No valid distinction for the purposes of s. 92 can be drawn among the three methods. A famous example of a quota system - held to infringe s. 92 because it prohibited inter-State (as well as intra-State) sales in excess of the quota - is James v. South Australia (1927) 40 CLR 1 . The correctness of the decision of this Court in that case was strongly challenged in James v. Cowan (1932) AC 542; 47 CLR 386 and the emphatic approval of the decision (1932) AC, at p 555; 47 CLR, at p 393 is not the least important feature of that vitally important case. It was in relation to this "quota system" that Lord Atkin used the words: "If this leaves inter-state trade 'absolutely free', the constitutional charter might as well be torn up" (at p92)
5. It may be mentioned here that another point strongly argued for the respondents in James v. Cowan (1932) AC 542; 47 CLR 386 was that a law could not infringe s. 92 unless it dealt solely with inter-State trade as distinct from intra-State trade or dealt differentially with inter-State trade and intra-State trade: "discrimination", it was said, was the test. This argument also was unequivocally rejected. The same view had been previously taken in this Court. Since James v. Cowan (1932) AC 542; 47 CLR 386 it has never been doubted that a law which is restrictive or burdensome of trade generally will be struck by s. 92 in so far as (though, of course, only in so far as) it operates on inter-State trade. (at p93)
6. The three examples of restrictions on trade and commerce which I have taken above by no means exhaust the category of what may be held to be restrictive or burdensome for the purposes of s. 92. To illustrate this, it is necessary only to refer to Fox v. Robbins [1908] HCA 98; (1908) 8 CLR 115 and Vacuum Oil Co. Pty. Ltd. v. Queensland [1934] HCA 5; (1934) 51 CLR 108; 677 . I have taken those three examples only because they appear to be particularly clear, to be within the narrowest possible view of the scope and intendment of s. 92, and to be entirely apposite to the present case. Each represents a kind of restriction which is inconsistent with any conception of freedom of trade. (at p93)
7. The Act in question in McCarter v. Brodie [1950] HCA 18; (1950) 80 CLR 432 and the Act in question in this case, impose restrictions of that kind on the trading or commercial activities of persons who transport goods, including those who transport goods from one State to another. It was once disputed that the transportation of goods from State to State constituted inter-State commerce. It was said that such transportation was an instrument whereby commerce was carried on but was not itself commerce. This view undoubtedly played a part in the earlier Transport Cases. One would have thought such a view untenable. In the United States the transportation of goods has been regarded as commerce - one might say commerce par excellence - ever since Gibbons v. Ogden (1824) 9 Wheat1 [1824] USSC 18; (6 Law Ed 23) . So has the transportation of passengers ever since New York v. Miln [1837] USSC 10; (1837) 11 Pet 102 (9 Law Ed 648) . The contrary view was rejected by this Court in Australian National Airways Pty. Ltd. v. Commonwealth [1945] HCA 41; (1945) 71 CLR 29 , and the accepted view is now that expressed by Dixon J. in R. v. Vizzard; Ex parte Hill (1933) 50 CLR 30, at p 59 . His Honour there said: "There is, I think, no act or transaction which better answers the description trade, commerce, and intercourse between the States than the carriage of merchandise from a place in one State across the border to a place in a neighboring State". (at p94)
8. When these things have been said, it should not be necessary to say anything more. The legislation in question stands forth as a conspicuous breach of s. 92 in its plainest and most elementary aspect. Why, then, is it that, whereas the famous Mr. James successfully claimed the protection of s. 92 in three leading cases, persons engaged in inter-State transport by land have claimed that protection in vain? Mr. James wanted to deliver dried fruits grown by him in South Australia to buyers in other States. He was told that, after he had sold a certain proportion of his crop, he could not do this. Mr. McCarter wanted to carry beer manufactured in South Australia to a buyer in New South Wales. He was told that, unless he obtained a licence, he could not do this, and, when he applied for a licence, it was refused. What is the difference between the two cases? Why was the same legal privilege conceded to James but denied to McCarter? The difficulty of answering this question is, of course, enormously increased by the fact (which I pointed out in McCarter v. Brodie [1950] HCA 18; (1950) 80 CLR 432 ) that an Act having precisely the same effect as the transport legislation was held invalid by the Privy Council in James v. Commonwealth (1936) AC 578; 55 CLR 1 . It is not susceptible, in my opinion, of any real answer. (at p94)
9. I do not intend to repeat what I said in McCarter v. Brodie [1950] HCA 18; (1950) 80 CLR 432 , and it would be idle to review the cases again. I wish, however, to refer very briefly to the general development, and to mention particularly one case which I only mentioned in passing in McCarter v. Brodie [1950] HCA 18; (1950) 80 CLR 432 . (at p94)
10. I do not repent of referring to R. v. Vizzard; Ex parte Hill [1933] HCA 62; (1933) 50 CLR 30 as "fons et origo malorum". The Court which heard that case consisted of six justices. Starke J. and Dixon J. dissented. In all later cases in which he sat, Starke J. refused to abandon the view which he had expressed in R. v. Vizzard [1933] HCA 62; (1933) 50 CLR 30 . In O. Gilpin Ltd. v. Commissioners for Road Transport and Tramways (New South Wales) [1935] HCA 8; (1935) 52 CLR 189 the doctrine of R. v. Vizzard [1933] HCA 62; (1933) 50 CLR 30 was very seriously extended, because there the plaintiff company was transporting its own goods in its own vehicle from its business establishment in one State to its business establishment in another State. Yet s. 92 did not protect it from a State enactment which prohibited it from so doing] In this case Dixon J. again dissented in a judgment with the whole of which I would most respectfully agree. Though again refuting the decision in R. v. Vizzard (1933) 50 CLR 30 however, his Honour was of opinion that Gilpin's Case [1935] HCA 8; (1935) 52 CLR 189 was distinguishable from that case. In Bessell v. Dayman [1935] HCA 5; (1935) 52 CLR 215 (in which the judgment was delivered on the same day as that in Gilpin's Case [1935] HCA 8; (1935) 52 CLR 189 ) Dixon J. again dissented. In Duncan v. Vizzard [1935] HCA 43; (1935) 53 CLR 493 , however, he said simply that he regarded the case as "completely covered" by the decisions of the majority in the earlier cases, and he adopted the same attitude under strong protest in Riverina Transport Pty. Ltd. v. Victoria [1937] HCA 33; (1937) 57 CLR 327 . In the Airways Case [1945] HCA 41; (1945) 71 CLR 29 provisions in a Commonwealth Act relating to the transport of goods and passengers by air, which were (to say the least) not readily distinguishable from the provisions of State Acts attacked in earlier cases, were held by a unanimous Court to be invalidated by s. 92. Inter-State carriers by air thus escaped the fate which had befallen inter-State carriers by land. I cannot myself see any sound distinction between transport by land and transport by air or between either of these and transport by sea. I hasten to add, however, that Dixon J. (1945) 71 CLR, at p 90 based a distinction largely - in the last analysis, I think, entirely - on the fact that in the earlier cases the question had been treated as being whether the legislation attacked "obstructed, restricted, retarded or impaired, not some operations of commerce considered separately or in isolation, but the commerce between New South Wales and Victoria considered as a whole". This was, of course, at that time, a legitimate ground of distinction. The point so put had been of the very essence of the argument presented by the counsel who were successful in R. v. Vizzard [1933] HCA 62; (1933) 50 CLR 30 . (at p95)
11. A word should be said at this point about the Riverina Case [1937] HCA 33; (1937) 57 CLR 327 , because it well illustrates the dangerous potentialities of the doctrine of R. v. Vizzard [1933] HCA 62; (1933) 50 CLR 30 . The Victorian Transport Regulation Board, acting on a direction from the Governor-in-Council, had granted licences to carry goods on routes within Victoria to all persons who had been providing satisfactory services before the Act of 1933 came into force. But, apart from an immaterial exception, every application for a licence which would have permitted the carrying of goods across either of Victoria's State borders was refused. The position is explained fully in the judgment of Dixon J. (1937) 57 CLR, at pp 360-362 . I will quote one passage: "The practical result was that up to the borders of New South Wales and South Australia the carriage of goods by motor vehicles, both in competition with the railways and otherwise, was licensed wherever before 29th August 1933 it had been carried on and the service or trade or a succession therein had been maintained. But, apart from carriers licensed for a twenty-mile radius, no through journey was permitted over either border. Thus, for the carriage of goods exclusively within the State a facility is widely allowed which is denied if the border is crossed" (1937) 57 CLR, at pp 361, 362 . The powers given by the Act were thus used to stop an existing class of inter-State commerce while permitting the same class of intra-State commerce to continue in existence. If the Act was valid, the inter-State operator was, of course, without redress. He had no means of compelling the issue of a licence, and, if he operated without a licence, he was guilty of an offence. The case shows that (as I pointed out in McCarter v. Brodie [1950] HCA 18; (1950) 80 CLR 432, at p 499 ) such legislation can be used to implement any kind of Government policy, however at variance with s. 92. One is tempted to say that the Riverina Case [1937] HCA 33; (1937) 57 CLR 327 represents the reductio ad absurdum of s. 92. (at p96)
12. If McCarter v. Brodie [1950] HCA 18; (1950) 80 CLR 432 had come before the Court in this state of authority, I should certainly have recorded a protest, but I might have accepted the Transport Cases which preceded the Airways Case [1945] HCA 41; (1945) 71 CLR 29 , if only as an auto-da-fe. In the meantime, however, the Banking Case (1950) AC 235; (1949) 79 CLR 497 had been decided by the Privy Council. What was said by Lord Porter for their Lordships in that case appeared to me, as I have no doubt it appeared to Dixon J. (as he then still was), to vindicate, completely and indisputably, the view of s. 92 which had been taken throughout by Starke J. and Dixon J. - and, one may add, by many other Australian lawyers. The same view had been clearly implicit in the dissenting judgment of Isaacs J. in James v. Cowan (1930) 43 CLR 386 which received the approval of the Privy Council (1932) AC, at p 561; 47 CLR, at p 398 . A controversy of great importance had at last been settled. I gave my decision in McCarter v. Brodie [1950] HCA 18; (1950) 80 CLR 432 accordingly. (at p96)
13. It is of some importance to remember that the view of s. 92 which formed the basis of the Transport Cases before McCarter v. Brodie [1950] HCA 18; (1950) 80 CLR 432 was of the very essence of the argument against the banks in the Banking Case [1949] HCA 47; (1950) AC 235; (1949) 79 CLR 497 . When once it was held that the banks were engaged in inter-State commerce within the meaning of s. 92, no way of escape from s. 92 appeared except by means of that view. The refutation of the propositions which Lord Porter (1950) AC, at pp 305, 306; 79 CLR, at pp 635, 636 refuted was taken as leading automatically to the conclusion that inter-State banking was protected by s. 92. When once it is held (as it must be held) that those who carry goods from State to State are engaged in inter-State commerce, the same refutation must inevitably lead to the same conclusion. (at p97)
14. In McCarter v. Brodie [1950] HCA 18; (1950) 80 CLR 432 , however, the ground of the Transport Cases was shifted. The idea that the carrying of goods was a means whereby commerce was carried on, but was not itself commerce, was abandoned. The "volume of trade" theory of s. 92, and the theory that s. 92 did not protect individual persons, were abandoned, or perhaps it would be more correct to say that they concealed themselves in a silent background. At the same time, no generally accepted basis on which the legislation could be held valid was arrived at. Practically speaking, two new grounds for so deciding emerged. These were in substance (1) that the legislation in question was merely "regulatory", and (2) that the States, because they provided facilities for transport, must have power to control the use of facilities for transport in any manner thought fit. The second ground had been foreshadowed in the judgment of Williams J. in the Airways Case [1945] HCA 41; (1945) 71 CLR 29 . (at p97)
15. With regard to the first ground, I simply refer to what I said in McCarter v. Brodie (1950) 80 CLR, at pp 495-499 , adding a reference to the important case of Melbourne Corporation v. Barry [1922] HCA 56; (1922) 31 CLR 174 . I gave a number of examples of "regulation". Section 92 protects individuals (like Mr. James), and any individual who finds himself prohibited from crossing a State border is entitled to invoke its protection. (at p97)
16. With regard to the second ground, I speak with all respect, but it is, to my mind, not really a ground at all. In the last resort I can find no real foundation for it except expediency. The question of expediency is itself one of a highly controversial character, and I am not able to regard the reference to political and economic problems in the judgment of their Lordships in the Banking Case (1950) AC 235, at p 310; (1949) 79 CLR, at p 639 as an invitation to treat questions of expediency as decisive or even important in such a case as the present. I would not, of course, deny that a constitution must be interpreted against a political, social and economic, background, but this cannot mean that it is proper to give to a particular provision one meaning where bankers and air-line operators are concerned and another meaning where carriers by land are concerned. The two questions which always arise when s. 92 is invoked are (1) whether the acts for which immunity is claimed possess the character of inter-State trade, commerce or intercourse, and (2) whether the law from which immunity is claimed possesses, so far as it affects those acts, the character of an interference with freedom. The policies or interests of States, considered as separate political units, cannot assist in providing an answer to either question. Section 92 embodies an Australian policy which is paramount. (at p98)
17. When s. 92 spoke in 1900 of commerce and intercourse "by internal carriage", it meant, of course, inter alia, commerce and intercourse by means of public highways. At the same time, nobody has ever doubted that State legislation may, consistently with s. 92, control the use of its highways in a variety of ways, even though those highways are used for inter-State commerce and intercourse. A State Parliament may make a law providing for a maximum width of tyres, for a maximum weight to be carried by any vehicle, and for all sorts of purposes of the kind which I described in McCarter v. Brodie (1950) 80 CLR, at pp 495, 496 . But the Act in question here cannot be justified as an exercise of any such power. It is in no way concerned with roads or the use of roads as such. Its object and character are even clearer than those of the Victorian Act considered in McCarter v. Brodie [1950] HCA 18; (1950) 80 CLR 432 . It is aimed at journeys which are "competitive with the railways". Graduated charges are imposed based on the mileage over which a vehicle is competitive with the railways. The Act deals with transport by air as well as transport by road. The State is conceived as a person having an interest in a large industry, in which it should be able to protect itself against competition, including inter-State competition and competition in inter-State trade. Therein is the whole substance of the legislation. It is no way conditioned by the fact that the State maintains, or has the function of maintaining, public highways. (at p98)
18. I am well aware that the fact that the State is protecting, or trying to protect, its railways against competition is put as an argument in favour of the validity of the legislation. It is said that "it is simply an exercise of the sovereign rights of the States to co-ordinate traffic by rail or road, and to confine the use of the roads to particular persons and vehicles". But it is not a matter of right but of power, and the legislative powers of the States are subject to s. 92. A State may prohibit, wholly or to any extent it pleases, the intra-State carrying of goods or passengers. But it must leave free the carrying of goods or passengers from another State into its own territory and from its own territory into another State. The sentence quoted has no bearing on the question whether s. 92 is being infringed. The use of the word "co-ordinate" is merely a reversion to the discredited volume theory of s. 92. It seems indeed to me to be a most extraordinary thing to say that the fact that the legislation is protective, or intended to be protective, of the railways takes it outside s. 92. To begin with, "the matter depends upon the effect of the legislation, not upon its purpose" (per Lord Sumner in Attorney-General for Manitoba v. Attorney-General for Canada (1929) AC 260, at p 268 , quoted by Isaacs J. in James v. Cowan (1930) 43 CLR 386, at p 421 ). And, when the effect of the legislation is seen to be restrictive of the inter-State commerce of individuals (like Mr. James), to say: "Yes, but we wanted to protect a State industry, and the protection would only be about seventy-five per cent effective if we did not restrict inter-State commerce" is surely not to meet the argument based on s. 92 but to drive it home and clinch it. No legislation could have been more "well-intentioned" than the Dried Fruits Act 1924-1925 (S.A.). (at p99)
19. In the light of this survey (which has been longer than I had hoped) this case must be decided. It is, of course, in general, a very bad thing that decided cases should not be followed. That proposition can hardly be over-emphasised. But the position in this case is very exceptional. One cannot ignore the grave potentialities of the views which prevailed in McCarter v. Brodie [1950] HCA 18; (1950) 80 CLR 432 , and it is difficult to put on one side one's conviction that those views are inconsistent with three decisions of a superior tribunal. (at p99)
20. I have already observed that the ground of the Transport Cases was shifted in McCarter v. Brodie [1950] HCA 18; (1950) 80 CLR 432 . But no true ratio decidendi emerged as the view of the majority. Two views emerged. The first was that the legislation in question was merely "regulatory" and therefore permitted by s. 92. That it was "regulatory" of the volume of commerce I would concede. But it was prohibitive of the commerce of every individual who was not allowed to engage in the commerce. It should not be forgotten that Lord Atkin (1932) AC, at p 558; 47 CLR, at p 396 said: "The Constitution is not to be mocked by substituting executive for legislative interference with freedom". At this point, however, I am not so much concerned with the correctness of the view in question as with its far-reaching character. Absolute prohibition is said to be contrary to s. 92. But, if prohibition subject to discretionary exemption or licensing is "regulation", that seems to me to deprive s. 92 of most of its practical effect. Anything that is desired can be achieved by simply setting up a board with power to grant licences to do something either absolutely or subject to conditions, and making it an offence to do that thing without a licence or in breach of a condition imposed. (at p100)
21. The second view was that the States, because they provided facilities for transport, must have power to control the use of those facilities in any manner thought fit. This view is possibly even more far-reaching. The argument cannot really be made to depend on the fact that the States own the railways. The supposed practical exigencies of the situation might be precisely the same if the railways were owned by a private corporation. If that were so, the argument would not be less open or be more or less cogent. Further, the argument cannot really be made to depend on the fact that it is railways that are in question. If State legislation protective of State-owned railways falls outside s. 92, why should State legislation protective of any other State-owned industry fall within it? Or, for that matter, legislation protective of any other privately owned industry? For it may be just as much in the interests of a State, considered as a separate body politic, to protect a privately owned industry within its borders. The argument can hardly stop short of saying that, wherever a real State interest is involved, there is immunity from s. 92. I find it impossible to foresee where it will lead, and I would repeat what I said in McCarter v. Brodie [1950] HCA 18; (1950) 80 CLR 432, at p 499 . If it all comes back to "co-ordination", well and good. But that depends, as I have said, on the discredited "volume" theory. (at p100)
22. I must weigh in the scale in addition my opinion that the majority decision in McCarter v. Brodie [1950] HCA 18; (1950) 80 CLR 432 is inconsistent with James v. South Australia (1927) 40 CLR 1 (which was approved in James v. Cowan [1932] HCA 21; (1932) AC 542; 47 CLR 386 ), with James v. Cowan itself, with the decision on the Commonwealth Act in James v. Commonwealth (1936) AC 578; 55 CLR 1 and with the conclusion and the reasons for the conclusion in the Banking Case [1949] HCA 47; (1950) AC 235; (1949) 79 CLR 497 . (at p100)
23. Having regard to all these matters, and to what I regard as the altogether exceptional nature of the position with which I am faced, I feel, albeit with reluctance, that my proper course, for better or worse, is to adhere in this case to the view which has seemed, and still seems, to me to be the right and sound view. I find a degree of reassurance in the fact that Starke J. followed throughout the course which I now follow. (at p100)
24. In my opinion, the demurrer should be allowed. (at p100)
KITTO J. In McCarter v. Brodie [1950] HCA 18; (1950) 80 CLR 432 , the Court held, by a majority, that certain provisions of the Transport Regulation Acts 1933-1947 (Vict.) were not in conflict with s. 92 of the Commonwealth Constitution. The present case is concerned with provisions of the State Transport (Co-ordination) Act 1931-1952 (N.S.W.), which so nearly resemble the Victorian provisions considered in McCarter v. Brodie [1950] HCA 18; (1950) 80 CLR 432 that if that case is to be accepted as rightly decided a similar decision must be given now. We have therefore to decide whether we ought to apply McCarter v. Brodie [1950] HCA 18; (1950) 80 CLR 432 , either because we agree with it or because we consider that its authority should be accepted whether we agree with it or not. (at p101)
2. The question which confronted the Court in McCarter v. Brodie [1950] HCA 18; (1950) 80 CLR 432 was, in essence, whether there is a conflict between, on the one hand, the insistence of s. 92 of the Commonwealth Constitution that trade commerce and intercourse among the States shall be absolutely free, and, on the other hand, a statutory denial of the right of a person to operate a commercial goods vehicle on the public highways of a State in the absence of a licence issued by a State authority having power to grant or refuse a licence at discretion. It is a similar question which confronts the Court now. If McCarter v. Brodie [1950] HCA 18; (1950) 80 CLR 432 had not been decided I have no doubt what my opinion would have been. I should have thought that the Privy Council's exposition of s. 92 in Commonwealth v. Bank of New South Wales (1950) AC 235; (1949) 79 CLR 497 made the conclusion logically inevitable that such a statutory denial, to the extent to which it applied in respect of operating a vehicle in the course or for the purposes of inter-State trade commerce or intercourse, was in flat contradiction of s. 92 and for that reason inoperative. I have read and re-read the judgments delivered in McCarter v. Brodie [1950] HCA 18; (1950) 80 CLR 432 , and I am bound to say, with the most sincere respect for the learned judges who formed the majority of the Court in that case, that I cannot see any answer to the reasoning contained in the dissenting judgments of Dixon and Fullagar JJ. To those judgments must now be added the judgment which my brother Fullagar has just delivered in this case, a judgment with which I desire to express my respectful and complete agreement. I shall have to refer in a moment to the views expressed in the majority judgments in McCarter v. Brodie [1950] HCA 18; (1950) 80 CLR 432 but for the present it is enough to say that if I am to follow McCarter v. Brodie [1950] HCA 18; [1950] HCA 18; (1950) 80 CLR 432 , it must be for the reason most strongly pressed upon us in argument, that the case is one for the application of the maxim stare decisis. (at p101)
3. I fully appreciate the wisdom of the view which Latham C.J., speaking for the Court, expressed in Perpetual Executors and Trustees Association of Australia Ltd. v. Federal Commissioner of Taxation (Thomas' Case) [1949] HCA 4; (1949) 77 CLR 493, at p 496 , when he said that continuity and coherence in the law demand that, particularly in this Court, which is the highest court of appeal in Australia, the principle of stare decisis should be applied, save in very exceptional cases. This was said without reference to constitutional cases, the Chief Justice remarking that it may be that considerations are present in those cases, where Parliament is not in a position to change the law, which do not arise in other cases. Even in constitutional cases, however, it is obviously undesirable that a question decided by the Court after full consideration should be re-opened without grave reason. (at p102)
4. I must turn therefore to inquire whether the decision in McCarter v. Brodie [1950] HCA 18; (1950) 80 CLR 432 is one which we should regard as open to review. By the decision I mean the actual decision in the case, that the Victorian statutory provisions there in question did not conflict with s. 92 of the Constitution. Of course, if in reaching that conclusion a majority of the Court had laid down a principle the application of which would produce a reconciliation between s. 92 and the application to inter-State transport of the provisions attacked in the present case, it would be necessary to consider whether there was any justification for re-examining not only the actual decision but also the principle so laid down. However, I do not find that in McCarter v. Brodie (1950) 80 CLR 432 there was a majority of the Court in favour of any such principle. Again, if a majority of the Court in that case had construed the Privy Council's judgment in the Banking Case (1950) AC 235; (1949) 79 CLR 497 as intended to indicate approval either of the reasoning or of the actual decisions in the Transport Cases, it would be necessary to consider whether there was any justification for questioning the reading so given to their Lordships' language; but I do not find that a majority of the Court did understand their Lordships to have intended any such approval. (In my references to the Transport Cases I do not include Willard v. Rawson [1933] HCA 12; (1933) 48 CLR 316 , for I agree with what Fullagar J. said concerning that case in McCarter v. Brodie (1950) 80 CLR, at pp 499, 500 .) It may be as well to elaborate these points a little before going further. (at p102)
5. The judgment of Latham C.J. contains much with which the plaintiffs in the present case would not wish to quarrel, and it demolishes some contentions which they do not need to advance and do not in fact advance. His Honour did not treat the case as one in which the Transport Cases should simply be followed, either because of their inherent authority or because of any approval of them by the Privy Council; on the contrary, he treated the case before the Court as depending upon a consideration of the question, apart from the authority of the Transport Cases, whether the challenged Victorian provisions were regulatory or prohibitive. The answer given, like the question, related to the Acts in their entirety; and the conclusion reached was that the Acts were truly described as regulation Acts. His Honour recognized that the provisions chiefly complained of required a person to hold a licence before he could operate a commercial goods vehicle upon the highways of the State; that they applied to such a person even though he was engaged in inter-State trade and commerce; that no person had a right to obtain a licence; and that a licence could be granted or refused at discretion, though the discretion was not unlimited or arbitrary. But his Honour considered that a licensing system, even one possessing these characteristics, must be regarded as a system of regulation. "Perhaps the most common method of regulating trade", his Honour said (1950) 80 CLR, at p 461 "is by a licensing system, e.g. in the case of intoxicating liquor, drugs, slaughtering of stock, dealing in marine stores, &c. In each case some authority has the duty of determining whether an application for a licence shall be granted or refused. Such licences are generally subject to conditions relating to the manner of carrying on the trade and these conditions frequently involve the payment of a fee. It is such a system which the Transport Regulation Act applies. The Act has all the characteristics of a system of regulation". I understand his Honour's judgment to mean that a prohibition applying to inter-State trade and commerce (or at least to the inter-State transportation of goods), if it is subject to a discretionary power to grant exemption as part of a licensing system, is to be regarded as no more than regulation and as therefore leaving inter-State trade commerce and intercourse absolutely free; and that it is nothing to the point that the discretion to grant or refuse licences is absolute within the ambit provided by the general scope and object of the Act. McTiernan J. concurred, but Williams and Webb JJ. gave no support to this far-reaching doctrine. (at p103)
6. In addition to agreeing with the Chief Justice, McTiernan J. thought that R. v. Vizzard; Ex parte Hill [1933] HCA 62; (1933) 50 CLR 30 , received some support from the Banking Case (1950) AC 235; (1949) 79 CLR 497 , and was right in its result. Webb J., on the other hand, thought that Vizzard's Case [1933] HCA 62; (1933) 50 CLR 30 might have been weakened by the Banking Case (1950) AC 235; (1949) 79 CLR 497 , but he considered that it had not been disposed of as an authority. Although he thought it difficult to see how the legislation under discussion could be regarded as essentially regulatory and not prohibitive or restrictive of inter-State trade, he decided in favour of upholding the legislation because of Vizzard's Case [1933] HCA 62; (1933) 50 CLR 30 , and Riverina Transport Pty. Ltd. v. Victoria (1937) 57 CLR 327 , which followed it. (at p104)
7. Williams J. was not satisfied that the Transport Cases were wrongly decided, and he was not prepared to overrule them. But he did not treat them as authorities to be automatically followed. He considered the legislation in question for himself, and reached the conclusion that it was regulatory because it did not prevent individuals carrying on the business of land transport among the States without a licence, but only prevented individuals plying their vehicles on the public roads of the States without a licence. The fact that the roads are, in a broad sense, State-provided was the crucial factor in his Honour's view. "I am of opinion", he said (1950) 80 CLR, at p 477 , "that a State must have a wide power to regulate the use of the facilities which it provides for trade and commerce, so that the public funds invested in such facilities, in this case the railways, shall not be jeopardised by undue competition brought about solely by the provision of another facility by the State"; and he repeated (1950) 80 CLR, at p 478 what he had said in Australian National Airways Pty. Ltd. v. Commonwealth [1945] HCA 41; (1945) 71 CLR 29, at p 109 : "it is simply an exercise of the sovereign rights of the States to co-ordinate traffic by rail or road, and to confine the use of roads to particular persons and vehicles. If the choice of these persons and vehicles has no relation to their passage across the border, but the legislation operates without discrimination with respect to all persons and vehicles desirous of using the roads, such legislation is not aimed or directed at inter-State commerce but at regulating, maintaining and co-ordinating a number of utilities for trade, commerce, and intercourse, State and inter-State, provided by the State". No other member of the Court espoused this view. Webb J. expressly declined to accept it, and Latham C.J. and McTiernan J. made no comment upon it. (at p104)
8. It will be seen that the four learned Judges who formed the majority of the Court in McCarter v. Brodie [1950] HCA 18; (1950) 80 CLR 432 were not unanimous in the view that Vizzard's Case [1933] HCA 62; (1933) 50 CLR 30 or any other of the Transport Cases had received the approval of the Privy Council; nor were they unanimous in thinking that the transport cases were correctly decided, that is to say that discretionary licensing legislation of the kind in question is in truth only regulatory; and those who considered that such legislation is regulatory were not agreed upon any one reason for that conclusion. Hence it appears to me that there is no proposition which can be regarded as the ratio decidendi of McCarter v. Brodie [1950] HCA 18; (1950) 80 CLR 432 (see Long v. Chubbs Australian Co. Ltd. [1935] HCA 11; (1935) 53 CLR 143 at pp 151, 152 ) and the case stands, as does Vizzard's Case (1933) 50 CLR 327 , and the Riverina Case [1937] HCA 33; (1937) 57 CLR 327 also, as a bare decision that statutory provisions such as were there in question do not infringe s. 92. It will also be noticed that in respect of every reason given for holding the legislation to be consistent with s. 92 there was a majority of the Court consisting of judges who either dissented from that reason or refrained from supporting it. (at p105)
9. It would be difficult, I should think, to find a case in relation to which the cry stare decisis would sound more hollow. But there is a much more serious comment to be made. As I see the matter, the appeal to the maxim in support of McCarter v. Brodie [1950] HCA 18; (1950) 80 CLR 432 is neither more nor less than an invitation to refuse to be bound by repeated pronouncements of the Privy Council. Three times their Lordships have spoken on s. 92, and it seems to me that we are thrice bound to overrule McCarter v. Brodie [1950] HCA 18; (1950) 80 CLR 432 . I accept it as conclusively demonstrated by the judgments of Dixon and Fullagar JJ. in McCarter v. Brodie [1950] HCA 18; (1950) 80 CLR 432 and the judgment of Fullagar J. in this case that it was never possible to reconcile the Transport Cases with James v. Cowan (1932) AC 542; 47 CLR 386 , or with the actual decision in James v. Commonwealth (1936) AC 578; 55 CLR 1 , except upon grounds which, since the Banking Case (1950) AC 235; (1949) 79 CLR 497 , must be admitted to be untenable; and, although the judgment in the Banking Case (1950) AC 235; (1949) 79 CLR 497 did not in terms overrule the Transport Cases, I should have thought, with all respect to those who take a different view, that it wrote their epitaph in characters too plain to be missed or to be mistaken. (at p105)
10. I take it to be self-evident that statutory provisions such as we have here to consider operate directly and immediately to restrict trade and commerce among the States, and that they must be held incompatible with s. 92 unless it is true to say that their character is that of regulation. The sole problem therefore is whether these provisions are in truth no more than regulatory. If the Privy Council had made no pronouncement as to what is not included in the conception expressed by the word regulatory as used in this connection, it might have been possible (though I do not say it should have been done) to treat the actual decision in McCarter v. Brodie [1950] HCA 18; (1950) 80 CLR 432 as a precedent for assigning such legislation to the category of regulation, without embarrassing the whole subject by committing the Court to any particular reason, or even with a protestation that this type of case is anomalous. But since the Banking Case (1950) AC 235; (1949) 79 CLR 497 the proposition that simple prohibition is not regulation, long treated as unquestionable, is binding in law as well as in logic upon the courts of this country in their deliberations upon s. 92. I have looked in vain in the judgments on this matter for any ground upon which an acknowledgment that simple prohibition is not regulation can be reconciled with a decision that a simple prohibition subject to a discretionary power to grant exemptions can be regarded as regulation. And it is surely beyond argument that a prohibition is none the less simple because someone has a power, which he may exercise or refuse to exercise at discretion, to restore the freedom which that prohibition denies. If, as I am convinced, this is not open to judicial doubt, neither is it open to judicial exception. Yet in truth we are asked in this case to do none other than to say that an exception has been made in favour of transport legislation by the decision in McCarter v. Brodie [1950] HCA 18; (1950) 80 CLR 432 . It may be, for all I know, that such an exception would be expedient; but if so it should be made by amendment of s. 92 by constitutional means. The section cannot be amended by the Court, and I am not prepared to hold that it has been amended by McCarter v. Brodie [1950] HCA 18; (1950) 80 CLR 432 . (at p106)
11. In my opinion the only decision we can give in this case consistently with acceptance of the Privy Council's authority is that the licensing provisions of the State Transport (Co-ordination) Act 1931-1952 (N.S.W.), in their application to trade commerce and intercourse among the States, are repugnant to s. 92 of the Constitution and inoperative. (at p106)
12. I should therefore allow the demurrer. (at p106)
TAYLOR J. This suit raises questions concerning the validity of the State Transport (Co-ordination) Act 1931-1952 (N.S.W.) and of certain charges imposed upon the plaintiff as a licensee of public motor vehicles within the meaning of that Act. For the purposes of the demurrer, it is admitted that the plaintiff carries on business as a carrier of general merchandise and operates between Sydney in the State of New South Wales and Brisbane in the State of Queensland, and that it is the owner of a number of motor vehicles in respect of which it holds licences under s. 12 of the Act to operate those vehicles as public motor vehicles within the meaning of the Act. These licences are issued subject to special conditions, and, whilst operations of a limited nature are authorised thereby, the conditions require inter alia that in respect of any journey which is wholly or partly competitive with the railways or tramways the licensee shall pay to the Commissioner for Road Transport and Tramways for the full competitive distance three pence per ton or part thereof of the aggregate of the weight of the vehicle unladen and of the weight of loading the vehicle is capable of carrying for each and every mile or part thereof travelled by the vehicle along a public street. The effect of a licence containing a similar condition with respect to operations extending beyond those primarily authorised by the licence was considered in Duncan v. Vizzard [1935] HCA 43; (1935) 53 CLR 493 . With respect to operations not authorised by the plaintiff's licences it has been the practice of the defendant Director of Transport and Highways and his predecessors to issue permits for particular approved journeys upon payment of charges at the rates referred to above. Some point was made that no authority for the issue of permits for the carriage of goods is conferred by the Act, but it is, I think, unnecessary in this case to deal with this submission. (at p107)
2. The Act in the form in which it has existed from time to time and other comparative legislation has been the subject of consideration many times in this Court. On the most recent occasion in McCarter v. Brodie [1950] HCA 18; (1950) 80 CLR 432 , it was conceded by the appellant, who challenged the validity of the Transport Regulation Act 1933-1947 (Vict.), that the decision in R. v. Vizzard; Ex parte Hill [1933] HCA 62; (1933) 50 CLR 30 and other cases which followed it were decisive against the appeal. But it was argued that since the decision of the Judicial Committee of the Privy Council in Commonwealth v. Bank of New South Wales (1950) AC 235; (1949) 79 CLR 497 those decisions were no longer supportable. In the result the legislation, which in many respects was similar to the legislation in question in this case, was held to be valid. (at p107)
3. In the present case the Court is, in effect, asked to reconsider the decision in McCarter v. Brodie [1950] HCA 18; (1950) 80 CLR 432 and the general effect of the decision of the Judicial Committee upon the decisions in the earlier Transport Cases. This is a course which I am most reluctant to pursue and if the views expressed in McCarter v. Brodie [1950] HCA 18; (1950) 80 CLR 432 had established some common principle, I would hesitatingly regard myself as bound to apply it. But the Court was divided and the reasons of the majority do not appear to me to establish any clear or common principle concerning the proposition which, in this case, has given me the most concern. (at p108)
4. The Act contemplates that the co-ordination of transport, which is its
avowed object, shall be accomplished through the medium
of a licensing system.
Section 17 in its present form is in the following terms:
"17. (1) Every license under this Act shall be subject to the performance
and observance by the licensee of the provisions of this
Act and the
regulations that may relate to the license or to the public motor vehicle in
respect of which it is issued, and of the
provisions contained in or attaching
to the license, and all such provisions shall be conditions of the license.
(2) The regulations may prescribe, or the board may determine in respect of
any particular license, or of any class of licenses
relating to any area,
route, road, or district, or of any other class of licenses whatsoever, or
generally what terms and conditions
shall be applicable to or with respect to
a license, including (but without in any way limiting the generality of the
foregoing)-
(a) the fares, freights, or charges, or the maximum or minimumall such matters as they may think necessary or desirable, and in particular (where applicable) shall have regard to-
fares, freights, or charges to be made in respect of any
services to be provided by means of the public motor
vehicle referred to in the license;
(b) the use of such public motor vehicle as to whether
passengers
only or goods only or goods of a specified class or
description only shall be thereby conveyed, and as to the
circumstances in which such conveyance may be made or
may not be made (including the limiting of the number
of the passengers or the quantity, weight, or bulk of the
goods that may be carried on the vehicle).
(3) In dealing with an application for a license the board shall consider
(a) the suitability of the route or road on which a service mayperson for a license or in respect of any vehicle or of any area, route, road, or district.
be provided under the license;
(b) the extent, if any, to which the needs of the proposed areas
or districts, or any of them, are already adequately served;
(c) the extent to which the proposed service is necessary or
desirable in the public interest;
(d) the needs of the district, area, or locality as a whole in
relation to traffic, the elimination of unnecessary services,
and the co-ordination of all forms of transport, including
transport by rail or tram;
(e) the condition of the roads to be traversed with regard to
their capacity to carry proposed public vehicular traffic
without unreasonable damage to such roads;
(f) the suitability and fitness of applicant to hold the license
applied for;
(g) the construction and equipment of the vehicle and its
fitness and suitability for a license;
Provided that the certificate of registration and the
certificate of airworthiness of an aircraft issued under the
Air Navigation Regulations or a registration of any motor
vehicle other than aircraft under any other Act of the
State may be accepted as sufficient evidence of suitability
and fitness of the vehicle.
(4) The board shall have power to grant or refuse any application of any
5. No person is permitted to operate a motor vehicle unless the vehicle is licensed under the Act (s. 12) unless it is being operated under and in accordance with an exemption from the requirement of being licensed granted under s. 19 or a permit granted under s. 22 of the Act. The power to grant exemptions and the power to issue permits are in the complete discretion of the board. I should add that the powers conferred by these sections upon the board - which is the State Transport (Co-ordination) Board - are now, by statute, exerciseable by the defendant Director of Road Transport and Highways. (at p109)
6. In view of the decision of the Judicial Committee in Commonwealth v. Bank of New South Wales (1950) AC 235; (1949) 79 CLR 497 , these outstanding sections of the Act have caused me considerable concern. I regard the decision in that case as establishing beyond question that any direct, as distinct from remote or merely consequential, interference with or restriction upon inter-State trade, which is not justifiable as regulation of such trade, is a violation of s. 92. It is not to the point that any such interference or restriction may leave unimpaired the total volume of trade from State to State or, that it is not the purpose of the legislation to create interference with or impose restrictions upon inter-State trade as such, or that the legislation is not "directed against" or not "aimed at" inter-State trade. As the Judicial Committee pointed out "in whatever sense the word 'object' or 'intention' may be used in reference to a Minister exercising a statutory power, in relation to an Act of Parliament, it can be ascertained in one way only, which can best be stated in the words of Lord Watson in Saloman v. Saloman & Co. (1897) AC 22, at p 38 'in a Court of Law or equity what the legislature intended to be done or not to be done can only be legitimately ascertained from that which it has chosen to indicate, either in express words or by reasonable and necessary implication'. The same idea is felicitously expressed in an opinion of the English law officers, Sir Roundell Palmer and Sir Robert Collier, cited by Isaacs J. in James v. Cowan [1932] HCA 21; (1932) AC 542; 47 CLR 386 : 'It must be presumed that a legislative body intends that which is the necessary effect of its enactments: the object, the purpose, and the intention of the enactment, is the same'. The same learned judge adds 'by the necessary effect', it need scarcely be said, these learned jurists meant the necessary legal effect, not the ulterior effect, economically or socially. It was because Section 20 of the Dried Fruits Act of South Australia operated according to the natural meaning of its words to authorise a direct restriction upon the manner in which James could dispose of his product by an inter-State transaction that it offended Section 92, not because some other extraneous purpose, object or intention was ascribable to the South Australian legislature". These views of the Judicial Committee led, immediately, to the conclusion that s. 46(1) of the Banking Act 1947, which provided that a private bank should not after the commencement of the Act carry on banking business in Australia, except as thereinafter required by the section, was invalid. Nor can I see that the decision would have been otherwise if the section had in substance provided that a private bank should not carry on banking business in Australia unless it was the holder of a licence which might be granted or withheld at the absolute discretion of a licensing authority. For if the legislature itself may not, without infringing s. 92, assert a right, at its absolute discretion, to permit or prohibit banking, it is, to me, inconceivable that it may, without infringing s. 92, confer such a right upon a subordinate body. This, of course, is very far from saying that trade and commerce may not be made the subject of regulation either through the medium of a licensing system or otherwise; nor does it deny the proposition that regulation may include partial prohibition or prohibition sub modo. (at p111)
7. In the view of the majority in R. v. Vizzard; Ex parte Hill [1933] HCA 62; (1933) 50 CLR 30 the difficulties which have on many occasions arisen with respect to licensing systems did not, in that case, unduly obtrude themselves. The establishment of a licensing authority with arbitrary powers is an irrelevant consideration if the test to determine whether legislation infringes s. 92 is whether the "real intention" (in the sense in which that expression has been used) is to interfere with freedom of trade, commerce and intercourse between the States (per Gavan Duffy C.J. (1933) 50 CLR, at p 47 ); or whether "on the whole" inter-State trade is benefited or burdened; or whether the legislation is "designed for the purpose of preventing, hindering, limiting or obstructing, trade, commerce or intercourse among the States" (per Evatt J. (1933) 50 CLR, at p 77 ); or whether it is "designed for the express purpose of restricting or prohibiting" such trade, commerce or intercourse. These and similar tests make the existence or non-existence of a collateral fact, and not a consideration of the legislation and its legal effect, the criterion for determining questions of validity. (at p111)
8. Dissenting members of the Court in Vizzard's Case [1933] HCA 62; (1933) 50 CLR 30 and like cases, expressed the view that a legislative prohibition against trading, including inter-State trading, except pursuant to a licence which might be arbitrarily refused, constitutes an infringement of s. 92. Upon a consideration of the observations of the Judicial Committee, not only in relation to the legislation under consideration in Commonwealth v. Bank of New South Wales (1950) AC 235; (1949) 79 CLR 497 , but also with respect to the decisions in James v. South Australia (1927) 40 CLR 1 and James v. Commonwealth [1936] HCA 32; (1936) AC 578; 55 CLR 1 this conclusion is, I think, irresistible and should be adopted by this Court. It was, of course, of the very essence of the decision in Gratwick v. Johnston (1945) 70 CLR 1 and appears to me to have been a substantial basis for the decision in Australian National Airways Pty. Ltd. v. Commonwealth [1945] HCA 41; (1945) 71 CLR 29 . Further, it seems to me that this was the opinion entertained by a majority of the Court in McCarter v. Brodie [1950] HCA 18; (1950) 80 CLR 432 . It was clearly the view of the dissenting members of the Court and Latham C.J., with whose reasons McTiernan J. expressed his agreement, took the view that the licensing authority under the Victorian Act did not have an unlimited and arbitrary discretion to grant or refuse licences. His Honour referred to Victorian Railways Commissioners v. McCartney [1935] HCA 28; (1935) 52 CLR 383 and said: "The Court has already expressly held with respect to this Transport Regulation Act that the ambit of the discretion of the board is governed by the general scope and object of the enactment". I understand from these and other relevant observations of his Honour that if the licensing authority had been invested with an unlimited and arbitrary discretion, a conclusion that the legislation infringed s. 92 would have been inevitable, for such legislation could not be regarded as regulatory. If this be so, legislation of this character must infringe s. 92 unless the discretion to refuse a licence is limited to or confined within the ambit constituted by those matters which should properly be regarded as regulatory of the trade or commerce concerned. For, I can see no relevant distinction between an arbitrary discretion and one, which though not capable of being exercised on any grounds at all, authorises the licensing authority to travel outside the field of regulation. This is the very activity which is denied to the legislature itself and that being so, any enactment purporting to authorise a subordinate authority to do so must be invalid. (at p112)
9. In my opinion, s. 17 of the Act under review in this case, even if it does not confer a complete and arbitrary authority to grant or refuse licences, does confer an authority to refuse licences on grounds other than those which may properly be regarded as regulatory of the trade or commerce concerned. The licensing section under review in McCarter v. Brodie [1950] HCA 18; (1950) 80 CLR 432 was, in some minor respects, different and its history had led the High Court in Victorian Railways Commissioners v. McCartney [1935] HCA 28; (1935) 52 CLR 383 to express the view that the Transport Regulation Board had taken into consideration matters which were not proper for it to consider in relation to applications for licences. Though it was held that the board's discretion was not complete and arbitrary, it does not follow that the limits to the discretion, discoverable upon an examination of the general scope and object of the enactment would, of necessity, prevent a collision with s. 92. In this case, however, we are concerned with the State Transport (Co-ordination) Act (N.S.W.) and, for the moment with s. 17 of that Act, and I am unable to see any grounds upon which it could be fairly claimed that the director's discretion under that section to grant or refuse licences is subject to any saving limitation. The direction in sub-s. (3) concerning the particular matters to be considered by the director in no way detracts from the provision in the same sub-section that he shall consider all such matters as he may think necessary or desirable, or from the plain words of sub-s. (4). But even if these latter provisions should be construed subject to the particular matters specified in sub-s. (3) and some limitation of the discretion thereby ascertained, the conclusion could not be otherwise. An examination of these matters suggests to my mind that they were prescribed for consideration, primarily, in relation to the co-ordination of transport within the State and without regard to the provisions of s. 92, and, clearly, they embrace matters which, on my view of the authorities, cannot form any basis for the regulation of inter-State trade. As Fullagar J. said in McCarter v. Brodie [1950] HCA 18; (1950) 80 CLR 432, at pp 498, 499 , when speaking of the legislation then under consideration: "The truth is that it is possible to regard such legislation as regulatory with respect to trade and commerce if, but not unless, we regard s. 92 as referring not to the trading and commercial activities of individuals but to a totality or general volume or flow of trading and commercial activities. A simple prohibition, or a prohibition subject to discretionary exemption, of the trade of an individual may be regarded as regulatory of the general flow or volume of trade. It cannot possibly be regarded as regulatory of the trade of the individual who is simply not allowed to carry on his trade at all. The view that s. 92 does not protect an individual trader but has regard only to a general volume of inter-State trade could hardly have been more emphatically rejected by the Privy Council, and it must now, I would think, plainly be regarded as unsound. And, without it, the view that the Victorian Transport Regulation Act is merely regulatory, so far as it affects inter-State trade and commerce, cannot stand". (at p113)
10. The views which I have expressed do not, of course, mean that the Act or any part of it, is wholly invalid. Section 3(2) of the Act provides that it shall be read and construed so as not to exceed the legislative power of the State to the intent that where any enactment thereof would, but for this section, have been construed as being in excess of that power it shall, nevertheless, be a valid enactment to the extent to which it is not in excess of that power. This is, as Starke J. said in R. v. Vizzard; Ex parte Hill (1933) 50 CLR, at p 56 : "a legislative declaration that the Act shall operate on so much of its subject matter as Parliament might lawfully have dealt with and so as not to exceed the legislative power . . . It excludes, I think, from its operation any interference or control of trade and commerce obnoxious to the provisions of sec. 92 of the Constitution". A similar provision, in not dissimilar circumstance, was considered by the Court in Cam & Sons Pty. Ltd. v. Chief Secretary New South Wales (1951) 84 CLR 442 and the majority of the Court took a similar view with respect to the effect of such a provision. (at p114)
11. In the circumstances, I am of the opinion that the State Transport (Co-ordination) Act has no application to public motor vehicles which are operated, within the meaning of that Act, in the course of and for the purposes of inter-State trade and, accordingly, it is unnecessary to consider the other submissions which were made in the case. Accordingly, I am of the opinion that the demurrer should be allowed. (at p114)
ORDER
Demurrer to the defence overruled.
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