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High Court of Australia |
UEBERGANG v. AUSTRALIAN WHEAT BOARD [1980] HCA 40; (1980) 145 CLR 266
Constitutional Law (Cth)
High Court of Australia
Barwick C.J.(1), Gibbs(2), Stephen(3), Mason(3), Murphy(4), Aickin(5) and
Wilson(2) JJ.
CATCHWORDS
Constitutional Law (Cth) - Freedom of interstate trade and commerce - Wheat - Sale by growers in New South Wales to miller in Queensland - Joint statutory scheme of Commonwealth and States - Acquisition by Board of all wheat grown in Australia - Prohibition of sales - Regulation - Tests for validity of legislation - Whether validity depends on establishment of facts - Whether questions seek an advisory opinion - The Constitution (63 & 64 Vict. c. 12), s. 92 - Wheat Industry Stabilization Act, 1974 (N.S.W.), s. 10 (2) - Wheat Industry Stabilization Act, 1974 (Q.), s. 12 (3).
HEARING
Sydney, 1979, August 20; 1980, February 6, 7, 11.DECISION
1980, October 28.2. A reference in the present case has been before the Court on an earlier occasion when three questions were reserved for its consideration. Two of those questions were answered by the Court's announcement (1) that the Court would allow argument as to the validity of s. 10 (2) of the Wheat Industry Stabilization Act, 1974 (N.S.W.) as amended and s. 12 (3) of the Wheat Industry Stabilization Act, 1974 (Q.) as amended and (2) that the decision in Clark King does not preclude the examination in the instant proceedings of the facts on which either party may claim validity of the relevant statute depends. The further question was not dealt with at that stage. (at p277)
3. Subsequent to that announcement, though prior to the statement of the present case, pursuant to leave given to the parties to amend their pleadings generally, the plaintiffs amended their statement of claim by removing a paragraph therein numbered six, which in relation to the validity of the statutes in question made an allegation of fact. In lieu thereof, the plaintiffs inserted a paragraph which makes a claim for invalidity not rested on any alleged factual situation but upon the terms of the relevant statutes themselves. (at p277)
4. The defendant for its part did not avail itself of the opportunity to amend and made no substantial change in its statement of defence, relying, as it seems to me, upon the decision in Clark King [1978] HCA 34; (1978) 140 CLR 120 as a justification of its assertion of constitutional validity. In particular, the defendant does not allege any matter of fact. Therefore it does not seek to prove nor to rely upon any facts on the existence of which the defendant seeks to base the validity of the statutes. (at p277)
5. Reserved for the consideration of a Full Court on this occasion are the
following questions:
(1) Does the validity of the Wheat Industry Stabilization Act, 1974 (N.S.W.)
as amended and the Wheat Industry Stabilization Act,
1974 (Q.) as amended
depend on the establishment to the satisfaction of the Court of any fact? If
so, what is that fact?
(2) Is that fact to be determined solely upon material which is within
judicial notice?
(3) Does s. 92 prevent the application of the Wheat Industry Stabilization
Act, 1974 (N.S.W.) as amended and the Wheat Industry
Stabilization Act, 1974
(Q.) as amended or either of them to the transaction particularized in par. 7
of the statement of claim?
(at p277)
6. The form and presence of the first two of these questions seem to have been derived from discussions between the parties which took place before the pleadings were put into their present shape. As the pleadings now stand, as I have pointed out, the issue of validity between the parties is not said to depend upon the existence of any particular fact or situation. (at p277)
7. The present reference has been heard by all seven members of the Court. I have no doubt that we should consider for ourselves the questions relating to the validity of the statutes, undeterred by the reasons for judgment expressed in Clark King. (at p278)
8. Before proceeding further, it is convenient to indicate the facts as
revealed in the pleadings out of which the present proceedings
have arisen.
The first plaintiffs carry on, under the name of C. and J. Uebergang, the
business of wheatgrowers at "Copperfield",
Crooble, in the State of New South
Wales. The second plaintiff carries on business as a manufacturer of poultry
feed containing wheat
at Mount Cotton in the State of Queensland. By a
contract in writing dated 6th December 1978, the second plaintiff purchased
from
the first plaintiffs for use in manufacturing such poultry feed at Mount
Cotton certain wheat then growing at "Copperfield". Since
the contract was
entered into, the first plaintiffs have harvested the wheat the subject of the
contract. It is separately stored
by the first plaintiffs at "Copperfield"
pending delivery to the second plaintiff to fulfil the contract between the
parties. Whilst
the plaintiffs desire to complete performance of the contract
and the second plaintiff desires to receive and use the wheat in the
manufacture of poultry feed at Mount Cotton, the wheat is none the less
subject to certain notices which were published by the defendant
in the
Commonwealth of Australia Gazette on 21st November 1978. These notices
apparently were published in reliance upon the statutes
under attack in the
case and presumably also upon comparable legislation of the Commonwealth.
Those statutes purport, inter alia,
to permit the defendant to require the
delivery to it of all wheat in, amongst other States, New South Wales and
Queensland, with
minor presently irrelevant exceptions, including wheat
destined to move interstate. No doubt this power of direction and acquisition
is given to the Board to enable it alone to market wheat in Australia and
overseas. The notices accordingly were published as a means
of enabling the
defendant alone to have dealings in the subject wheat. Their form and purpose,
as indeed of the statutes in question,
were in accordance with Sir Hayden
Starke's language in Peanut Board v. Rockhampton Harbour Board [1933] HCA 11; (1933) 48 CLR
266,
at p 285 :
"The policy of the Act is doubtless to preserve and protect primary
producers in Queensland, but the method adopted for achieving
that policy, as
gathered from the words of the Act itself, is the compulsory regulation and
control of all trade, domestic, inter-State
and foreign. The volume of trade
is not restricted, but the producers are restricted, and are prevented from
engaging in inter-State
and other trade in peanuts. Their peanuts are
compulsorily taken from them for that purpose, pooled, and the disposal
thereof placed
in the hands and under the control of the board. It is a
compulsory marketing scheme, entirely restrictive of any freedom of action
on
the part of the producers. The Act confers the power of acquisition with the
object of placing restrictions on all trade, domestic,
inter-State and
foreign, and, following the decision of His Majesty in Council in James v.
Cowan (1932) 47 CLR 386;
(1932) AC 542
, I think the Act operates in
contravention of sec. 92 of the Constitution, and so far as it does so is
necessarily void."
The form and purpose of the statutes also fall fairly within the scope of the
decision in James v. Cowan. (at p279)
9. It is the defendant's contention that the wheat the subject of the contract between the plaintiffs should be delivered to it and that the performance of the contract by the delivery of the wheat to, and the use of the wheat by, the second plaintiff for the purpose for which it was purchased are precluded by the notices, as undoubtedly they are, if the notices and the legislation which supports them are valid and effective. (at p279)
10. Turning to the statement of claim, par. 6 (b) now asserts that the legislative scheme, that is presumably that of each State Act and of the complementary legislation of the Commonwealth, to which reference had already been made and the notices published thereunder, contravene s. 92 of the Commonwealth of Australia Constitution and, as a corollary of that assertion, seeks various declarations, the general purport of which is that by virtue of s. 92 of the Constitution the notices published by the defendant in the Commonwealth of Australia Gazette on 21st November 1978, are of no effect in relation to the wheat the subject of the contract between the plaintiffs dated 6th December 1978, and that, as a result, the first plaintiffs may lawfully deliver the wheat and the second plaintiff may lawfully receive and use the wheat the subject of the contract. (at p279)
11. For its part, the defendant in its amended defence, as I have said, simply says that the complementary legislation is valid and validly applies to all the wheat that is mentioned in the plaintiffs' amended statement of claim. As I have already indicated, the defendant does not assert the existence of any facts or any situation upon which constitutional validity is claimed to depend. (at p279)
12. It is not alleged in the statement of claim that the contract between the parties referred to therein in terms called for the delivery of the wheat across the State border: the contract itself is not pleaded in terms in the statement of claim. But the statement of claim does allege that the wheat was purchased for use in gristing in Queensland. It is abundantly clear that the wheat, according to the evident intention of the parties, was destined to cross the border. As I pointed out in Smith v. Capewell [1978] HCA 43; (1979) 142 CLR 1 , the presence in a contract of sale of an obligation to transport its subject matter interstate is not indispensable to the establishment of interstate trade in the subject matter of the contract unless the terms of the contract itself are the sole means of proving the existence of such a trade. Here I would suppose that the interstate quality of the trade in the subject wheat could have been established by a course of dealing; or even by the contemplation of the parties, as in Reg. v. Wilkinson; Ex parte Brazell, Garlick & Co. [1952] HCA 6; (1952) 85 CLR 467 . (at p280)
13. However, when the stated case was called on for argument, it was in substance agreed by the parties and announced to the Court that the wheat the subject of the contract was the subject of interstate trade. Thus, any argument based on the absence of a contractual obligation either to deliver or to transport the wheat interstate, if there were such an absence, was, in my opinion, removed from the case. (at p280)
14. At the outset, a few settled principles in relation to the meaning and operation of s. 92 of the Constitution need reiteration. It has long been decided and accepted that s. 92 does not create juristic rights in any individual but that it does afford the citizen the ability to ignore and, if need be, to seek the assistance of the judicial arm to resist, the use of what purports to be a statute or an executive authority which infringes the constitutional guarantee which the section embodies. It has also long been decided and accepted that the freedom of interstate trade, commerce and intercourse of which the section speaks is not limited to, if indeed it is in reality addressed to, freedom of trade, commerce and intercourse in the abstract. It is obvious that in relation to intercourse, also within the scope of the guaranteed freedom, it could not be so limited. The complete collocation, "trade, commerce and intercourse", as a concept, in my opinion, places the individual's participation in these activities at the centre and by no means at the perimeter of the concept. Once decided that it is not enough to satisfy the Constitution that the same volume of interstate trade and commerce would continue notwithstanding the operation of the impugned law or executive act, there can be no escape from the conclusion that the freedom of which the section speaks includes the freedom of the citizen to engage in interstate trade and commerce, just as it is the freedom of the individual to move from State to State which is guaranteed by the section: see per Fullagar J. in McCarter v. Brodie [1950] HCA 18; (1950) 80 CLR 432, at pp 493-494 . Further, passages in their Lordships' advice in the Bank Case such as that found in the Commonwealth Law Reports (1949) 79 CLR, at p 635; (1950) AC, at p 305 make it impossible, in my opinion, to conclude that the ability of the individual to participate in interstate trade, commerce and intercourse is only "incidental to and consequential under the protection which is given to the entire concept of interstate trade". (at p281)
15. The major problem to which the section has given rise is the accommodation of the concept of freedom with restraints in a civilized and ordered society which in themselves do not in truth impair the guaranteed freedom. After a chequered course of judicial expression, it was finally resolved in the Bank Case that that accommodation is to be effected by allowing as valid what can properly be determined as in its nature no more than such regulation of interstate trade, commerce and intercourse as does not impair the guaranteed freedom. (at p281)
16. Two important conclusions flow from this: first, what is said to be regulatory in its nature must be no more than regulatory, in the relevant sense, of interstate trade, commerce and intercourse, including, as I think, such trade, commerce and intercourse as carried on by individuals, including, of course, corporate individuals; secondly, that after the operation of what is said to be no more than regulatory of interstate trade, commerce and intercourse, that trade, commerce and intercourse and the individual's participation therein remain free. This quite obviously involves the use of the words "regulation" and "regulatory" in a very special sense. (at p281)
17. I have pointed out elsewhere, but I would like here to repeat, that to accept the validity of laws truly regulatory in nature is not to qualify the freedom of interstate trade, commerce and intercourse. Indeed, as I remarked in what I wrote in Clark King [1978] HCA 34; (1978) 140 CLR 120 , a regulatory law properly accepted as such is an assertion or demonstration of that freedom rather than a denial or a qualification of it. As has often been said, the idea of free speech offers a very good analogue of what is meant by freedom in relation to interstate trade, commerce and intercourse. A person enjoys freedom of speech though he may not defame his neighbour. He may not defame not because his freedom of speech is qualified but because in the very nature of freedom of speech there resides the limitation against defamation. Defamatory statement is not an exercise of freedom of speech, but rather it is an assertion of or claim to unbridled licence. Another analogy is freedom of passage on a highway. A person has freedom of passage on the highway though some traffic laws which do no more than secure the protection of one traveller, including pedestrians, from damage by another traveller on the road must be observed. Mutual adjustments so that each may safely use the road are not qualifications of freedom of travel or of passage: rather, they are indicative of it. So it is in the case of trade, commerce and intercourse: it is no qualification of or limitation upon the freedom of interstate trade, commerce and intercourse that a trader may not bring a diseased cow into the marketplace from another State: nor is it a qualification of or limitation or impairment of the freedom of interstate intercourse that a person may not come amongst his fellows in another State suffering from a communicable disease. These inhibitions reside in the concept of freedom as opposed to licence. They do not represent qualifications of the relevant freedoms. Thus, laws dealing with diseased items of trade and commerce or diseased persons may not impair freedom of trade or of intercourse. They may not do so if in operation they leave trade, commerce and intercourse free, as such freedom is properly understood in a civilized society. (at p282)
18. To restate the result of the cases in the Privy Council and of those in this Court which have had their Lordships;' approval, valid legislation in the field of interstate trade, commerce and intercourse must be legislation of a "regulatory" nature: if in its nature it is to be "regulatory" of interstate trade, commerce and intercourse including such trade, commerce and intercourse as carried on by individuals, after its full operation interstate trade, commerce and intercourse, including the trade, commerce and intercourse of the individual, remain free. That being so, it seems to me natural and, indeed, inevitable that basically the acceptable "regulation" must be in the nature of an accommodation of the rights of man and man in a society where after the operation of the "regulatory" law, each remains free in the proper sense of that word, free in his trade, commerce or intercourse. It cannot represent an accommodation between the right of the individual freely to trade and travel interstate and some possible public interest to deny the individual that freedom. The individual's trade is not to remain free only so long as some actual or supposed public interest to prohibit or impair or reduce that freedom is not exercised. (at p282)
19. It is far from irrelevant here to remark that the exigencies of war did not warrant a decision that individual interstate movement could be prohibited or subjected to government discretion. One might be pardoned for thinking that public security in time of war might have been regarded as the ultimate public interest. Yet s. 92 prevailed to secure the individual's freedom to move in available transport in wartime from State to State: see Gratwick v. Johnson [1945] HCA 7; (1945) 70 CLR 1 . The unavailability of any capacity for private travel because of the complete absorption of travel capacity by troop movement is a different and quite disparate complication not in any wise bearing on the individual's freedom to use such capacity for movement as may exist. (at p283)
20. I have expressed elsewhere this idea of mutual accommodation as the relevant sense of the description "regulatory". Some seem to think that concept too narrow, but with respect it seems to me a necessary and inevitable corollary of an acceptance of two ideas: first, that the freedom guaranteed by s. 92 includes the freedom of the individual to engage in trade, commerce and intercourse interstate and, secondly, that, after the application of the impugned statute or executive act, the individual's ability to engage in these activities in so far as it is affected by that statute or executive act must remain free. Laws which are valid in the area of public health or in the area of commercial honesty are not, in my opinion, acceptable because of the subject-matter with which they deal or the public interest they purport to serve. Health, commercial honesty, and the like, are not legislative areas excepted from the operation of s. 92. Nor do they represent qualifications of the section. At bottom, the validity vis a vis s. 92 of a statute or executive act relating to health, fraud, trade practices and the like must, in my opinion, be determined by considering whether in operation it does no more than accommodate each man's freedom in the relevant respect to that of his neighbour in a society in which, in the relevant sense, each remains free in his trade, commerce or intercourse after the law has fully operated. They can only be valid if in operation they leave the relevant area of trade, commerce or intercourse and the individual's participation therein, free. (at p283)
21. No doubt these concepts prove at times difficult in application to which circumstance the decided cases bear witness: but, to my mind, they are not only valid as I have expressed them: they represent the only basis for the accommodation with the guaranteed freedom of laws which in their nature do no more than relevantly "regulate" interstate trade, commerce or intercourse. (at p284)
22. It follows that, in my opinion, laws regulatory in nature of interstate trade, commerce and intercourse are not acceptable because of any community interest which overrides or qualifies the guaranteed freedom. Their basis is, in my opinion, as I have stated it. Such laws are but an extrapolation of the guaranteed freedom. There is no warrant, in my opinion, for completely ignoring the presence of the word "absolutely" in s. 92. At the very least it denies that what remains after the operation of the impugned statute may be only qualified freedom. The acceptance of the validity of restraints on licence does not in any sense deny or qualify the guaranteed freedom. These views are, in my opinion, both consistent with and exemplified by the decisions of the Privy Council and by the decisions of this Court which have the approval of the Privy Council. (at p284)
23. It has long been accepted, and rightly in my opinion, that all legislative power in the Commonwealth and all legislative power of the States is subordinated to s. 92. Section 92 is a paramount provision in the fullest sense of that description. Section 51 is prefaced with the words "Subject to this Constitution", as is s. 52. So also s. 106 is subject to the Constitution. The effect of these qualifying words in those sections is that no legislative power, Commonwealth or State, whether solely exercised or exercised in co-operation, can validly produce a situation in which the freedom of interstate trade, commerce or intercourse, including the freedom of the individual to participate therein, is denied or impaired. (at p284)
24. I expressed in what I wrote in Clark King my views as to the cautionary and obviously tentative remarks of their Lordships of the Privy Council in the Bank Case. I have no need to repeat here what I then said. In any case, the reasons of the two Justices in the majority in Clark King are not, in my opinion, in reality founded on these cautionary remarks of the Privy Council, although those Justices seemed to think the remarks consistent with the propositions upon which basically their judgments in that case are founded. (at p284)
25. I made it fairly plain in writing my reasons in Clark King [1978] HCA 34; (1978) 140 CLR 120 that I do not believe that it can ever be established that the only way to "regulate", in the constitutionally acceptable sense, interstate trade, commerce and intercourse, including the individual's participation therein is to deny the individual any participation in such trade, commerce and intercourse. To state such a propostion is, in my opinion, to establish its inherent falsity. It really is a contradiction in terms to say that the only way in which interstate trade, commerce and intercourse could be free is by denying all participation by the citizen in that trade, commerce and intercourse. It is not permissible, surely, to substitute for interstate trade, commerce and intercourse in this connexion some designated industry or activity and then proceed to treat the question to be whether the only reasonable way to regulate that industry or activity is to deny all individual participation therein. That, it seems to me, is quite a different question to the one supposed in their Lordships' remark. Further, to regard that as the question necessarily involves the use of the word "regulate" in a very different sense to that which it must have in the universe of discourse which involves s. 92. It also concedes to the legislature some legislative power which is not subject to s. 92. It is interstate trade, commerce and intercourse which is at the same time to be free though "regulated". (at p285)
26. Though great respect must be given to their Lordships' expressions, it seems to me, because of these inherent features, it would be better now to decide outright and unequivocally that the total prohibition or denial of the participation of the individual in interstate trade, commerce or intercourse necessarily contravenes the constitutional guarantee of the freedom of such trade, commerce and intercourse. In every decided case in which such a prohibition has been involved, including the case of Wilcox Mofflin Ltd. v. New South Wales [1952] HCA 17; (1952) 85 CLR 488 , the statute or executive act in that respect has been held to be invalid. I believe it would be better now at the least to indicate quite clearly the inapplicability of their Lordships' cautionary remarks to cases in which government monopoly in the distribution of a commodity is sought to be justified. Otherwise parties may be lured into expensive and unrewarding litigation for, in the end, surely it cannot be established that the only way in which interstate trade, commerce and intercourse can be carried on consistently with the maintenance of the freedom of that trade, commerce and intercourse is to create a government monopoly in that commodity to the exclusion of all participation of the citizen in that trade, commerce or activity. (at p285)
27. But if the Court is not prepared to accept the logic of the Constitution, at least it should be said that any such occasion must be extremely rare: and one not so far within our experience. It is certain that none of the situations dealt with in the reported cases with which their Lordships became familiar during the argument of the Bank Case (1949) 79 CLR 497; (1950) AC 235 and the later case of Hughes & Vale Pty. Ltd. v. New South Wales (No. 1) (1954) 93 CLR 1; (1955) AC 241 exemplified such a possibility. They could not possibly in their reservation have been referrng to any situation comparable to that in any of those decided cases. They had had before them dried fruits in time of glut, dairy products at risk of out of State competition, peanuts in time of market instability, hides and skins in a period of over-supply, travel in wartime, air transport with its risk of undue density, and banking in time of challenge to government control. In none of these did the possibility to which their Lordships refer reside. None of them were of a kind to which their Lordships could have been making reference. All were cases in which some public interest or community concern other than the maintenance of freedom of interstate trade, commerce and intercourse might be seen. The reservation expressed by their Lordships therefore must be to some situation as yet inexperienced and presumably unlike any that had so far occurred. If the marketing schemes with which the decided cases dealt are reviewed, I think it must be conceded that there are no circumstances attendant on the present scheme which could be regarded as opening up such a rare possibility as apparently their Lordships reserved for future consideration. Whilst I cannot now imagine such an occasion could justify the denial of individual participation, it must at least be said that nothing appears in the circumstances of this case to suggest that it is of that rare nature as to fall within the purview of their Lordships' reservation. (at p286)
28. If, though to my mind inconceivable, it must be accepted that there may come to pass a situation in which monopoly of dealing in a commodity is the only reasonable and practicable way of securing the freedom of interstate trade, commerce and intercourse in or in relation to a commodity, it is of the utmost importance that the question to be answered, and answered by convincing evidence, should be precisely delineated. In that exercise, it must be constantly borne in mind that by no manner of "regulation" may interstate trade, commerce and intercourse be rendered unfree - I do not pause in this context to remark on the extent to which burdens on the trade, commerce or intercourse may amount to an invasion of its freedom. The constitutional requirement that such trade, commerce and intercourse be free is both paramount and unqualified. If the only method of dealing with some situation legislatively or administratively involves an invasion of that freedom, then, in my opinion, that method may not be employed. It is clearly not the case that interstate trade, commerce and intercourse shall be free unless the only reasonable and practicable method of handling some situation or industry otherwise within legislative or executive competence is to diminish or destroy that freedom. (at p287)
29. The question therefore cannot be whether some legislative or executive scheme is the only reasonable and practicable method of controlling some industry or activity, whether it be primary or secondary. The question must relate to interstate trade, commerce and intercourse itself. Thus, in my opinion, that question should be: Is the legislative or executive scheme the only reasonable and practicable way of regulating interstate trade, commerce and intercourse in the particular commodity or activity, so that that trade, commerce and intercourse and the participation therein of individual citizens remain free: it is the only reasonable and practicable way of securing that freedom? (at p287)
30. The onus of maintaining an affirmative answer would lie heavily on those who are supporting the validity of the scheme. (at p287)
31. As the pleadings now stand, such a question does not arise. Although the defendant has already had, and I may say disdained, an opportunity to plead in such a way as to raise that question and to assert the circumstances on which it would rely to establish an affirmative answer, I think it should be given an opportunity to amend its pleading if it wishes to undertake the task of supporting the validity of the legislative scheme by an affirmative answer to the question I have posed. It may be that by pressing for proper particulars the plaintiffs may reach a position where even on the allegations of the defendant an affirmative answer is not possible. (at p287)
32. I now turn to consider the footing on which the two Justices found themselves able in Clark King [1978] HCA 34; (1978) 140 CLR 120 to conclude that an absolute, or to use Sir John Latham's synonym in Milk Board (N.S.W.) v. Metropolitan Cream Pty. Ltd. [1939] HCA 28; (1939) 62 CLR 116, at p 127 , "simple", prohibition of interstate trade and commerce by the citizen in wheat did not offend s. 92. There can be no doubt that the evident intention of the statutes here in question is to effect such a prohibition: further, such a prohibition is what the statutes achieve in operation. Indeed, the defendant's claim in this case is that such a prohibition is valid: that it leaves trade, commerce and intercourse in wheat between the States quite free: it claims to be the only body able to sell or deal in wheat, whether within Australia or abroad. As a means of ensuring that situation, it is given power to acquire all wheat, including wheat which has become the subject of or is intended for interstate trade. The power of acquisition so asserted falls within the scope of decisions such as James v. South Australia (1927) 40 CLR 1 and James v. Cowan [1932] HCA 21; (1932) 47 CLR 386; (1932) AC 542 . (at p288)
33. The basic proposition on which it is said that all trade by individuals in a commodity may lawfully be prohibited is that the ability of the individual to enter interstate trade is only incidental and not central but consequential to or upon a public interest which s. 92 is enacted to secure. Therefore, if "public interest" demands, according to the Court's view of the matter, the individual may be excluded entirely from interstate trade in the commodity in question. Presumably, none the less trade, commerce and intercourse between the States in that commodity will remain absolutely free. (at p288)
34. The course of that reasoning begins with my brother Mason's judgment in
Pilkington v. Frank Hammond Pty. Ltd. (Pilkington's
Case) [1974] HCA 13; (1974) 131 CLR 124,
at p 185-186 . The relevant passage is as follows:
"To elucidate this question it is necessary to turn to s. 92 itself. The
section does not in terms speak of the private right of the individual to
engage in trade, commerce and intercourse among
the States; it refers to
trade, commerce and intercourse among the States as an entire and total
concept and provides that it is
to be 'absolutely free' in the sense in which
this expression has been discussed in the decided cases. In saying so much the
section
protects the right of the individual to engage in inter-State trade,
commerce and intercourse but it needs to be recognized that
this protection is
incidental to, and in a sense consequential upon, the protection which is
given to the entire concept of inter-State
trade, commerce and intercourse,
including the various acts and transactions by which it is constituted.
The emphasis which in my opinion should be given to the public, as
distinct from the private, character of s. 92 has importance in cases where .
. ." (at p288)
35. Before the publication of those reasons, no member of this Court had at
any time suggested that the protection which the individual
obtains in his
trade, commerce and intercourse between the States is but incidental to some
public character of the constitutional
guarantee or that the guaranteed
freedom was only qualified freedom, qualified by the demands of some public
interest. Apart possibly
from the cautionary remarks in the Bank Case (1949)
79 CLR, at p 635 to which I have already referred, nothing in the advice of
the
Privy Council in the Bank Case lends any support to the proposition. The
statement by my brother Mason, which I have quoted, was
not based upon any
authority, nor upon any expression of opinion on the part of any Justice of
the Court, past or present, though
in a later case some comfort was sought to
be derived from the remarks quoted from the Bank Case. Though it is of no
present consequence,
I might mention that the passage which I have quoted from
Pilkington's Case was not, in my opinion, a necessary part of his Honour's
justification of his ultimate conclusion in that case. (at p289)
36. The decision of the Court in Pilkington's Case, which was a unanimous decision so far as the result was concerned, was that where goods were in movement between the States in the course of trade and commerce, those who participated in that movement could not be prevented from effecting their part in that trade and commerce nor could their activity as co-operators in that trade and commerce be burdened by law. They could only be affected by a law truly "regulatory" in its nature of interstate trade and commerce. That conclusion all other members of the Court found quite compatible with all the prior decisions of the Court on s. 92 with the possible exception of Hughes v. Tasmania [1955] HCA 30; (1955) 93 CLR 113 . None of the Justices' views, including the ultimate conclusion of my brother Mason, depended upon a view that the protection afforded the individual in his interstate trade by the constitutional guarantee was but incidental to the promotion of some public interest which it was the purpose of the Constitution to protect or further. (at p289)
37. In truth, in my opinion, as I have said, the protection of the trade, commerce and intercourse of the individual is not incidental but central to the constitutional provision. I have indicated that the word "intercourse" has no relevant meaning if it does not actually, indeed exclusively, include the activities of citizens, natural persons or corporate persons. The same is true, in my opinion, of the word "commerce". Commerce necessarily involves the participation of persons, again natural or corporate - not as a matter of economic policy or theory - but as a matter of language. Commercial activity is the antithesis of governmental or executive activity. Inter-governmental arrangements are not properly described as commercial, however much they have commodities as their subject matter. In my opinion, the same may be said of the word "trade", though we have become, perhaps increasingly, aware of executive participation in activities which bear a close resemblance to the trading activities of persons. But, in my opinion, what the executive or government agencies do in this respect ought not properly to be described as "trading". This, I think, is particularly true of the activities of an agency of the executive which has a monopoly of acquisition and disposal of a commodity. Buy or sell governments and government agencies may, but their buying and selling is not truly a trading activity within the concept of trade, commerce and intercourse as found in s. 92. (at p290)
38. The view so expressed in Pilkington's Case [1974] HCA 13; (1974) 131 CLR 124 received
further development in my brother Mason's
reasons for
judgment in North
Eastern Dairy Co. Ltd. v. Dairy
Industry Authority of N.S.W. It was there
expressed in the following
passage [1975] HCA 45; (1975)
134 CLR 559, at pp 614-615 :
"Nevertheless, some assistance in elucidating this problem is to be
gained by recalling, as I had occasion to point out in
Pilkington v. Frank
Hammond Pty. Ltd., that s. 92 has a predominant public character and that the
protection which it gives to the rights of the individual is incidental to and
consequential
upon the protection which is given to the entire concept of
interstate trade. Once the predominant public character of the provision
is
recognized it is more easily perceived that regulation of interstate trade,
for the benefit of the community may be consistent
with the freedom which is
guaranteed and that it may not necessarily involve any collision with the
derivative protection which the
section gives to individual rights.
The freedom guaranteed by s. 92 is not a concept of freedom to be
ascertained by reference to the doctrines of political economy which prevailed
in 1900; it is a
concept of freedom which should be related to a developing
society and to its needs as they evolve from time to time. Section 92 finds
its place in a Constitution which was intended to operate beyond the limits of
then foreseeable time - it would be a serious mistake to read the guarantee or
immunity which it offers as one which necessarily and rigidly reflects ideas
accepted almost a century ago. Instead, the section
should be seen as a
provision whose operation may fluctuate as the community develops and as the
need for new and different modes
of regulation of trade and commerce become
apparent.
. . .which is to protect the public from the risk of contaminated or impure milk does not contravene s. 92 so long as it appears that the detriment which it works to interstate trade is reasonably necessary to protect the interests of the public. There is, of course, no reason why the class of regulation consistent with the section should be limited to laws the effect of which is to protect public health. There are many other fields in which interstate trade may be regulated in the interests of the public in conformity with s. 92."
As I remarked earlier, regulation of interstate trade the effect of
39. In Clark King [1978] HCA 34; (1978) 140 CLR 120 , his Honour repeated the assertion of Pilkington's Case and sought some support for it in the remarks of the Privy Council in the Bank Case, to which reference has already been made. Those remarks were called in aid as being in accord with the views expressed as to the paramount public interest or concern with which s. 92 is said itself to be concerned. (at p291)
40. In my reasons in Clark King, I mentioned that the public interest - and it is, in my opinion, the only public interest - served by s. 92 was the paramount concern that trade, commerce and intercourse, including such trade, commerce and intercourse as carried on by individuals, should remain absolutely free. I am not sure that I apprehend what is meant when it is said that the constitutional guarantee has a public aspect. If no more is meant than that those who drew the Constitution thought that it was beneficial to the public interest that interstate trade, commerce and intercourse should be absolutely free, then the statement adds nothing to our sum of knowledge. I would agree that, in the preparation of the Constitution, there was intense public concern that trade, commerce and intercourse between the States should be absolutely free. That concern for freedom of trade, commerce and intercourse doubtless prompted the inclusion of s. 92 and the securing of its constitutional paramountcy. Indeed, in any case, as I have elsewhere remarked, a provision such as s. 92 is an obvious concomitant of the introduction of a common external tariff in a federated area: and more particularly so when the resources, both primary and secondary, of the citizens of the States forming the federation are uneven and disparate. (at p291)
41. But, seemingly, what is meant in the judgments to which I have referred is that there is some public interest or that there are public interests which surpass the public interest in the maintenance of the freedom of interstate trade, commerce and intercourse between the States and that such public interest or interests attract legislative power which is paramount over any right of the individual to ignore laws which impair his freedom to trade or move or communicate interstate. If the proposition is true, it is true for each State as well as for the Commonwealth. The public interest so envisaged will include that of the individual States and will not necessarily be the public interest of the Commonwealth or that of other States. To make the point, a State could on this view for the benefit of its wheat farmers, as representing a public interest of the State, prohibit the sale out of the State of locally grown wheat, particularly at a time when foodstuffs in that State are in short supply. Such a result would fly in the face of the decisions of the Privy Council and those of this Court of which the Council approved. (at p292)
42. To say that there is some public interest is in truth, as it seems to me, to reverse the impact of s. 92 on s. 51 and s. 52 and s. 106. I say that because if one accepts the assertion that s. 92 so far from being paramount over all legislative power, State or federal, is itself subject to some legislative power, it would mean that any concern of the public of a State as such or of the Commonwealth or, perhaps, of some section of that public, may justify laws which prohibit the individual to trade in a commodity; which render him absolutely unfree to trade or to travel or communicate over State lines. After all, it must be remembered that the statutes here in question are predominantly based on sectional interest. (at p292)
43. This reversal of the paramountcy of s. 92 is indeed, in my opinion, the effect of the reasons of the majority in Clark King [1978] HCA 34; (1978) 140 CLR 120 . Under the scheme that decision supports, there can be no trade whatever conducted in wheat by citizens. Indeed, there may in fact be no interstate trade even by the Board if for any reason, including the price obtainable internationally for wheat, the Board decides not to dispose of wheat from one State to another. There seems to be nothing, for exmple, to prevent the Board deciding that wheat should not be used for animal food and to that end refusing to sell wheat grown in one State to gristers in another. Such a result, as I have said, is to reverse the impact of s. 92 on s. 51 and s. 52 and s. 106 and to destroy or at the very least to qualify the paramountcy of the constitutional guarantee over all legislative power. (at p292)
44. In my opinion, such a situation does not result from interpreting the Constitution in any manner with which the Court has ever been familiar. Rather, it is an attempt to reconstruct the Constitution and to allow of the exercise of power to render interstate trade, commerce and intercourse unfree. But if the section is to be overturned it cannot be overturned by judicial decision but only by the Parliament and the electors conformably with s. 128. (at p293)
45. As I pointed out in my reasons in Clark King, there is, in my opinion, no accretion of power to the Commonwealth or to the States from combined action by them. The legislative powers are several and whilst complementary legislation may enable uniform treatment of a subject matter and thus avoid the effect of territorial boundaries, where there is a constitutional inhibition on the exercise of all legislative power, the consequence may not be avoided by complementary legislation. (at p293)
46. I have remarked elsewhere upon the restiveness with which no doubt legislators view an inhibition upon legislative power, particularly when, as in the case of the Australian Constitution, the legislative power is denied both to the Commonwealth and to the States. But such a restiveness is no concern of the Court which is saddled with the duty of interpreting the words of the Constitution, giving them their full weight without qualifications which are not inherent in the language of the Constitution itself. (at p293)
47. Clark King [1978] HCA 34; (1978) 140 CLR 120 was decided on demurrer. There was no evidence of any kind produced in that case. The defendant produced some documents explanatory of its own position but they did not constitute evidence. Yet the conclusion of the two Justices was that the scheme of the Acts under challenge represented the only practical or the only reasonable method by which, not, as I read their reasons, interstate trade and commerce in wheat, but the wheat industry could be regulated. That, if I may say so with due respect, apart from the absence of evidence, could never have been the question in the case. Even giving the cautionary remarks of the Privy Council the fullest effect it is possible to attribute to them, the question was whether the impugned statutory scheme was the only practicable method of regulating interstate trade and commerce in wheat. I have already indicated that to assert that a government monopoly is the only method of "regulating" interstate trade and commerce in wheat, using the word "regulating" in its special sense, appears to me to be in terms a proposition which cannot be made out. Little wonder that counsel for the Australian Wheat Board in Clark King disowned the submission that the statutory scheme in question was of that kind. (at p293)
48. Having regard to something which is said in my brother's reasons in Clark King I should add that the views which heretofore have been accepted as to the meaning and operation of s. 92 have not depended upon the acceptance of some particular theory of political economy, just as I would expect that any attempt to qualify the constitutional guarantee would not be made in an attempt to follow some other and perhaps more recent, and, because of its recency, thought to be a more acceptable, theory of political economy. Of course, the Constitution needs to be applied in a changing world. But, in my opinion, whilst the denotation of its language may enlarge and come to embrace new manifestations, the connotation of its language remains constant. What falls for construction are the words of the Constitution: to them, meaning must be attributed and, being attributed, it remains constant. Thereafter, those words, as construed, must be applied. And, of course, they are to be applied in the situation of current times. Doubtless, on occasions, the width of their applicability will increase. The undoubted fact is that the application of the Constitution to new events and in new times can see a widening of the area which the language of the Constitution properly construed can cover or effect. But that undoubted circumstance affords no justification for the Court to alter the Constitution or to alter the connotation of the language in which it is expressed. The Court has no function to attempt to "modernise" the Constitution or its operation, if that is what some may think ought to be done. If there is to be a change, it is to be done, as I have earlier remarked, by the Parliament and the electors through s. 128 and not by decisions of this Court. Further, in ascertaining the meaning of the language of the Constitution, the reasons for its choice can only have relevance if ambiguity exists in the language employed and must be resolved. For my part, there is no ambiguity in the meaning of the words of s. 92, though the application of the accepted meaning may involve difficulty. It is only in this application that the Constitution is to be applied in a changing world. (at p294)
49. It may be, of course, that the presence of s. 92 in the Constitution was supported by those who believed that trade, commerce and intercourse should be carried on by individuals and not by the State. Perhaps there remain many of the same view: but that is of no present consequence any more than the fact that there are some who have an opposite view. (at p294)
50. But, even accepting that the presence of s. 92 in the Constitution is due to the entertainment by our forefathers of some theory of political economy current or favoured at the time the Constitution was devised, that circumstance would have little consequence except in relation to the matter of textual construction in case of ambiguity. Once the section was written out, the only remaining question, putting aside questions of textual ambiguity - a matter which, in my opinion, does not here arise - is to give effect to the language employed by the Constitution itself. Since the decision of Amalgamated Society of Engineers v. Adelaide Steamship Co. Ltd. [1920] HCA 54; (1920) 28 CLR 129 there can be no doubt of that proposition. (at p295)
51. Nothing I have ever written, nor, as far as I am aware, nothing that has been said in the decided cases, on the operation of s. 92 has depended on any other consideration than the words of the Constitution itself. (at p295)
52. In my opinion, the impugned sections on their face and in their intended operation are invalid, as in breach of s. 92, and the notices referred to in clause 7 of the statement of claim are void and ineffective. The majority decision in Clark King [1978] HCA 34; (1978) 140 CLR 120 should, in my opinion, be overruled. The declaration sought by the plaintiffs should be made and consequential relief granted. (at p295)
53. But, if this view is not acceptable to a majority of Justices and the validity of the impugned statutes must depend upon a question of fact, that fact, in my opinion, is whether the statutory scheme they represent is the only reasonable and practicable way in which the freedom of interstate trade and commerce in wheat, including the participation therein of the individual citizen, can be secured. If the defendant desires to support an affirmative answer to that question by evidence, it should be given leave to amend appropriately its statement of defence. (at p295)
GIBBS AND WILSON JJ. Clark King & Co. Pty. Ltd. v. Australian Wheat Board [1978] HCA 34; (1978) 140 CLR 120 is a recent decision of this Court upholding by a majority of three Justices to two the validity of Commonwealth and State legislation embodying a wheat stabilization scheme. That scheme, supported by the Parliaments of the Commonwealth and all the States, had the effect of enabling the Australian Wheat Board to acquire all wheat grown in Australia (with immaterial exceptions) and of establishing the Board as the sole vendor of all wheat. (at p295)
2. The present plaintiffs wish to engage in an act of interstate trade in
wheat, and claim that s. 92 of the Constitution renders inapplicable to them
the provisions of the relevant legislation embodying the stabilization scheme.
In so doing, of course,
they are immediately confronted with the decision of
the Court in Clark King. However, in August 1979, the Court gave directions
to
the parties in the following terms:
"1. That the Court will allow argument as to the validity of s. 10(2) of
the Wheat Industry Stabilization Act, 1974 (N.S.W.),
as amended, and s. 12(3)
of the Wheat Industry Stabilization Act, 1974 (q.), as amended.
2. That the decision in Clark King & Co. Pty. Ltd. v. Australian Wheat
Board does not preclude the examination in the instant
proceedings of the
facts upon which either party may claim the validity of the relevant statute
depends." (at p296)
3. Unfortunately, these directions have proved only of limited assistance to
the parties in their preparations for trial because
of uncertainty as to
whether the validity of the legislation depends upon evidence, and if so as to
the nature and scope of that
evidence. A great deal of material has been
supplied to the Court to indicate the range and complexity of the issues of
fact upon
which the parties are unable to agree, and that may have to be
litigated. The doubtful questions of admissibility and relevance have
now
brought the parties back to the Court in the hope of receiving directions
which will facilitate a clarification of the issues
for trial. The Chief
Justice has reserved for the consideration of the Court three questions as
follows:
"1. Does the validity of the Wheat Industry Stabilization Act, 1974
(N.S.W.), as amended, and the Wheat Industry Stabilization
Act, 1974 (Q.), as
amended, depend on the establishment to the satisfaction of the Court of any
fact? If so, what is that fact?
2. Is that fact to be determined solely upon material which is within
judicial knowledge?
3. Does s. 92 prevent the application of the Wheat Industry Stabilization
Act, 1974 (N.S.W.), as amended, and the Wheat Industry
Stabilization Act, 1974
(Q.), as amended, or either of them to the transaction particularised in par.
7 of the statement of claim?"
It has been recognized throughout that the third question will only be capable
of being answered at this stage if the Court were
to conclude that none of the
disputed questions of fact are relevant to the question of validity. (at p296)
4. When the matter came on for hearing, interventions were announced on behalf of the Attorneys-General of the Commonwealth and each of the States. The Commonwealth and New South Wales and Queensland were joined as parties to the action. The Australian Wheatgrowers' Federation, in the special circumstances of its position as a party to the accord as a result of which the legislation has been enacted, was granted leave to intervene in the argument. (at p296)
5. There are evident difficulties and dangers in the Court undertaking an advisory role such as is required by the first and second questions that have been reserved. For this reason, the Court proceeded to invite argument from the parties and the interveners upon a more general question: What are the principles upon which the Court should decide the validity of the statutes presently in question in their application to interstate trade commerce and intercourse? (at p297)
6. The form of this question enabled the plaintiffs to join issue with the defendants and the interveners on the basic problem that has confounded successive generations of lawyers and judges, namely, the nature and extent of the freedom which s. 92 secures for interstate trade commerce and intercourse. (at p297)
7. For the plaintiffs, the answer in the context of this case is clear: Section 92 protects the interstate trade of the individual, and while one concedes that a measure of regulation may be consistent with absolute freedom, prohibition is not regulation. It is plain that the wheat stabilization legislation is directed to creating a monopoly in favour of the Australian Wheat Board, and that it excludes entirely any freedom of the grower to sell his wheat as he pleases. It is argued that the present condition of Australian society is reasonably stable, that the Court will take judicial notice of such a fact, and that no facts of whatever description could so colour the scheme as to make its purported impact on the interstate trader consistent with s. 92. It then follows as a matter of course, so the plaintiffs say, that the legislation can have no valid application to their transaction of interstate trade, and there is no obstacle to the Court proceeding without further argument to grant them the relief they seek. (at p297)
8. The opposing contention is that neither of the two basic propositions advanced by the plaintiffs is correct. As to the first, it is argued that s. 92 is essentially a declaration of a public right from which the individual trader derives such freedom as is compatible with the public interest. As to the second, prohibition of individual rights may be a form of regulation consistent with s. 92. The test for determining such consistency was put in a number of ways. Mr. Pincus, appearing for the Wheat Board, advanced "essential in the interests of the community" as an appropriate test. Mr. Byers, the Solicitor-General of the Commonwealth, provided us with alternative propositions: in a case in which the prohibition formed part of a larger plan such as a marketing scheme the test of reasonableness was sufficient; in a case of simple prohibition, that is to say, simple in the sense that the individual is totally excluded from the trade, then the question is whether it is the only reasonable and practical solution. (at p297)
9. We appreciate the dilemma in which the parties have found themselves in
this case, confronted as they were with the prospect
of a long and costly
trial of issues of fact the relevance of which was a matter of dispute;
nevertheless we think it is a pity that
the Court is required to embark on a
discussion of abstract principle. In our view, the words which Dixon J. wrote
thirty-five years
ago in the case of Gratwick v. Johnson [1945] HCA 7; (1945) 70 CLR 1, at p
19 remain apt:
"In questions concerning the application of s. 92 of the Constitution, I
think that it has become desirable for the Court to avoid as far as possible
the statement of general propositions and in each
case to decide the matter,
so far as may be, on the specific considerations or features which it
presents. None of the many attempts
that have been made to formulate
principles or to expound the meaning and operation of the text has succeeded
in giving the guidance
in subsequent cases which their authors had hoped. What
has been clear has not found acceptance and what has been accepted has yet
to
be made clear."
Impressed as we are by this advice, we propose to write no more than seems
necessary for the immediate purposes of the present case.
(at p298)
10. The opposing contentions on the question of the "public" as opposed to
the "private" character of s. 92 are sufficiently expressed in the reasons of
Mason and Jacobs JJ. on the one hand, and of Barwick C.J. on the other hand,
in Clark
King (1978) 140 CLR, at pp 188; 150-157 . The joint reasons of Mason
and Jacobs JJ. are an application of the reasoning employed
separately by each
of those Justices in earlier cases: Pilkington v. Frank Hammond Pty. Ltd.
[1974] HCA 13; (1974) 131 CLR 124,
at pp 185-186 per
Mason J. and per Jacobs J. (1974) 131
CLR, at pp 198-199 ; and North Eastern Dairy Co. Ltd.
v. Dairy Industry
Authority
of N.S.W.
[1975] HCA 45; (1975) 134 CLR 559, at pp 614-616 per Mason J. However,
both the competing views are in our respectful
opinion attended with logical
difficulties. On the one hand, if the public character of s. 92 is pressed to
its logical conclusion, leaving individual rights to arise only as a matter of
consequence, and in subordination to
"the interests of the community"
(Permewan Wright Consolidated Pty. Ltd. v. Trewhitt [1979] HCA 58; (1979) 145 CLR 1 per Mason
J.),
by reference
to what criteria will a citizen ever be able to discern a
right to protect his trade
against the enactment of a democratically
elected
legislature? On that approach it would seem that every statute would be
entitled,
at least at the time of its enactment,
to a presumption
that it is
an Act for the peace, order and good government of the community,
and would
therefore be subject to a
conclusion prima
facie that it would not be affected
by s. 92. On the other hand, the Chief Justice,
when espousing the individual
rights doctrine,
readily acknowledges that there are fields of regulation open
to the legislature as
being inherent in the nature
of freedom because
they are
directed to the mutual accommodation of the rights and obligations of
individual
traders (Samuels v.
Readers' Digest Association
Pty. Ltd. [1969] HCA 6; (1969)
120 CLR 1, at p 16 ). But in many cases, with all respect, these examples
of
proper legislative activity may be
characterized
as giving expression to the
public character of s. 92. More recently, his Honour
has made the point in
words which
admit of such
a characterization (Permewan Wright (1979) 145 CLR,
at p 10 ):
"Laws which in terms prohibit dealing in deleterious substances, in
practices injurious to human safety, or restrictive or
fraudulent practice in
trade are not qualifications on or of freedom of trade: they are but
extrapolations of what is inherent in
the concept of freedom in a civilized
society, civilized because freedom is distinguished from licence."
See also the thorough discussion by Stephen J. of such regulatory laws in
Permewan Wright (1979) 145 CLR, at pp 26-32 . (at p299)
11. We are unable to accept the proposition that the public character of s. 92 goes so far as to authorize any law however restrictive it may be of the freedom of the individual trader to trade so long as it is reasonable in the circumstances, and does not constitute a mere prohibition. This was the first of the two propositions advanced by the Commonwealth and supported by the other defendants and interveners. Such a test would virtually write s. 92 out of the Constitution, and is unsupported by any decision either of the Privy Council or of this Court. On the other hand, we accept the reservation of their Lordships in The Commonwealth v. Bank of New South Wales (1949) 79 CLR, at pp 640-641; (1950) AC, at p 311 relating to a monopoly as of present relevance, given circumstances that justify its application. The plaintiffs, represented by Mr. Fitzgerald, argued that the reservation, if it had any positive character at all, could have application only to situations of national emergency as yet unforeseen or to situations in which the very continuance of society depended upon the prohibition or restriction of interstate trade. It is a submission of substance, but with respect we do not think that one can establish rigid categories either of inclusion or exclusion. (at p299)
12. The conclusion to which we have come, doing our best to be sensitive to the collective wisdom of this Court and the Privy Council over the years that have gone, but remembering that our primary loyalty must be to the words of s. 92 itself, is that the section is concerned to protect private rights. Absolute freedom of interstate trade commerce and intercourse requires that the citizens of this Commonwealth shall within the framework of a civilized society be free to engage in these things. The difficulty is that the trend of political theory and practice is to develop and strengthen that framework more and more and often at the cost of individual liberty; but however conservative or reactionary it may seem to some, this Court cannot write s. 92 out of the Constitution. It must therefore do its best to preserve a balance between competing interests, a balance which favours freedom for the individual citizen in the absence of compelling considerations to the contrary. As their Lordships remarked in the Bank Case (1949) 79 CLR, at p 639; (1950) AC, at p 310 : "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." (at p300)
13. In this case we are concerned with legislation which establishes a
monopoly in favour of the Australian Wheat Board in respect
of all wheat grown
in Australia. In the Bank Case, their Lordships, after agreeing with the
proposition that simple legislative prohibition,
as distinct from regulation,
of interstate trade is invalid, went on to say (1949) 79 CLR, at pp 640-641;
(1950) AC, at p 311 :
"Yet about this, as about every other proposition in this field, a
reservation must be made. 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 monopolized remained absolutely free".
In Clark King (1978) 140 CLR, at p 156 , the Chief Justice found that this
possibility strained his credulity. With all respect to
his Honour we do not
find the reservation at all remarkable. As their Lordships said, it was a
reservation which "must be made".
Nor can its application be confined to cases
of monopoly in trade. Gratwick v. Johnson [1945] HCA 7; (1945) 70 CLR 1 is one case
which
must have
been decided differently if the circumstances in which the citizen
was denied the right
to travel interstate had
been such that all
means of
transport were required for troop movements. Their Lordships in a paragraph
immediately following the
passage quoted above
from the Bank Case gave several
other examples of prohibitory laws which they considered
clearly amounted to
no more than regulation
of trade and intercourse (1949) 79 CLR, at p 641;
(1950) AC, at pp 311-312 . Again, in
James v. The Commonwealth
(1936) 55 CLR
1,
at p 54 , the Privy Council found it necessary to defend the postal
services monopoly
as "a limitation
notoriously existing in ordinary
usage in
all modern civilized communities". (at p301)
14. Nor do we think it possible to regard the reservation as one having no
contemporary relevance. If such had been their Lordships'
intention, it is
remarkable that within five years they could speak as they did in Hughes &
Vale Pty. Ltd. v. New South Wales
(No.
1) (1954) 93 CLR, at p 34; (1955) AC,
at p 308 with reference to the passage that has been quoted. Their Lordships
said:
"As to the passage in the judgment of the Board in the Bank Case upon
which counsel for the respondents particularly relied,
their Lordships accept
without qualification everything that was said by the Board in the Bank Case,
but they are not aware of any
circumstances in the present case giving rise to
the situation contemplated in that passage. As the case was decided on
demurrer,
no evidence was given on either side at the hearing, although
certain documents were annexed to the respondents' defence. Consequently
no
facts were proved which might have enabled the respondents to base an argument
on the passage in question."
This passage brings us directly to the present issue. The plaintiffs argue
that none of the facts which the Wheat Board seeks to
prove could establish
the scheme as "the only practical and reasonable manner of regulation". At
this stage, of course, the Court
has not heard any argument directed to the
facts, and that must be borne in mind. However, some confusion, so it seems to
us, centres
on the word "only". It is not that a particular scheme, in all its
details, must be shown to be the only practical and reasonable
method of
regulation. The reservation in the Bank Case was expressly made with respect
to prohibition with a view to monopoly. Therefore
what must first be shown in
order to establish validity is that a monopoly covering both intrastate and
interstate trade is the only
practical and reasonable course open in present
circumstances. The test remains a most stringent one, not likely to be
satisfied
except in exceptional circumstances. If that test is satisfied, it
is still necessary for the Court to consider whether the interstate
trade, so
regulated, is "absolutely free" within the meaning of s. 92. (at p301)
15. The present is clearly a case in which "factual information" (to use the neutral expression found in Breen v. Sneddon [1961] HCA 67; (1961) 106 CLR 406, at p 412 ) is required to enable the Court to decide on the constitutional validity of the legislation in question - at least, in the absence of the necessary information the defendants must fail. In some cases the factual information may be given in the form of agreed statements, and in others it may be possible to take judicial notice of the relevant facts. However, there is no reason why the facts should not be proved by evidence, and it was recognized that evidence may be given for such a purpose in Wilcox Mofflin Ltd. v. New South Wales [1952] HCA 17; (1952) 85 CLR 488, at p 507 , as well as in the passage cited above from Hughes & Vale Pty. Ltd. v. New South Wales (1954) 93 CLR, at p 34; (1955) AC, at p 308 . The following statement of Jacobs J. in the North Eastern Dairy Case (1975) 134 CLR, at p 624 , is in our opinion correct: ". . . in every case it is necessary to examine the nature and quality of the restriction in the light of the known and proved economic social and other circumstances of its imposition and of the community in which it is imposed." There is no escape from the conclusion that the defendants must be allowed, if they wish, to make any necessary amendment to their pleading and to have the opportunity of proving facts which bear on the question of validity. (at p302)
16. This brings us back to the questions which the Court is asked to answer. It is clear enough that the validity of the Acts may depend upon the establishment of facts. However, the second part of the first question really seeks an advisory opinion. The defence does not allege any facts in the light of which the legislation might be held to be valid, and there are differences of opinion within the Court as to the proper principle to be applied. It is therefore particularly inappropriate to answer that part of the question. If this result is unsatisfactory to the parties, as no doubt it is, we can say only that it is the result of embarking on an unusual course of procedure which is attended with precisely this kind of difficulty. (at p302)
17. We would therefore answer the questions that have been reserved as
follows:
1. There may be facts whose existence is relevant to the validity of the
Acts, but the admissibility of evidence to establish any
such facts will be
subject to any amendment of the pleadings.
It is not appropriate to answer the second part of the question.
2. No.
3. Not appropriate to answer. (at p302)
STEPHEN AND MASON JJ. The joint judgment of Gibbs and Wilson JJ. describes the circumstances of the present proceedings and the contentions of the parties; accordingly, to these we need make no further reference. We share their Honours' reluctance to embark upon a discussion of abstract principle. However, in order to aid in the further conduct and final resolution of these proceedings, some discussion of the substance of what is raised by questions 1 and 2, as reserved for the consideration of this Court, is called for. (at p303)
2. In recent cases, in particular in Clark King & Co. Pty. Ltd. v. Australian Wheat Board [1978] HCA 34; (1978) 140 CLR 120 and Permewan Wright Consolidated Pty. Ltd. v. Trewhitt [1979] HCA 58; (1979) 145 CLR 1 , we have each stated our separate views concerning aspects of s. 92 which are relevant to the present case. Clark King is particularly in point since it dealt with the case of a monopolization of trade in wheat, albeit under somewhat different legislation. We share the views now expressed by Gibbs and Wilson JJ. about the need for "factual information" in the determination of this case and about the ways in which that need may be met. Accordingly we agree with the answer "No", which they propose to question 2, and that it is inappropriate to provide any answer to question 3. (at p303)
3. There remains question 1. It asks whether the validity of the legislation
depends upon any and, if so, what fact (meaning no
doubt, an ultimate as
distinct from an evidentiary fact). In Permewan Wright (1979) 145 CLR, at pp
30-31 , Stephen J. said:
"This leads me to the suggestion made in argument that quite precise
rules govern this question of choice between means of
attaining desired
legislative objectives. It was said that where a law prohibited interstate
trade its validity would depend upon
it being the only reasonable method of
regulation, whereas where no outright prohibition was in question the fact
that the law was
one of a number of reasonable alternative methods of
regulation might suffice to uphold validity.
In the Clark King Case it appeared to me to be appropriate, in light of
the legislative and evidentiary context, to apply what
their Lordships had
said in the Banking Case (1949) 79 CLR, at p 641; (1950) AC, at p 311 where
they referred to the valid prohibition
of interstate trade with a view to
State monopoly where that course was 'the only practical and reasonable manner
of regulation'.
However no neat formula, to be used for the resolution of
different cases on quite different facts, can be extracted from their
Lordships'
words. If a law which bears upon interstate trade is nevertheless
to be valid because regulatory the restrictions which it imposes
must be no
greater than are reasonably necessary in all the circumstances. The harsher
the restrictions the more critically will
the necessity be scrutinized and the
greater will be the significance to be attached to the existence of other
means of attaining
the end in view which are, at the same time, less injurious
to interstate trade. To say this is, perhaps, to do no more than to repeat,
in
different words, what I said in Clark King (1947) 140 CLR, at p 172 when I
observed that 'validity will always involve questions
of degree and of the
relative reasonableness of such laws'."
Mason J. commented in Permewan Wright (1979) 145 CLR, at p 37 as follows:
"As I observed in the North Eastern Dairy Case (1975) 134 CLR, at p 614
the answer to the question whether particular legislation
constitutes a
reasonable regulation of interstate trade will depend upon a variety of
factors. They will include the nature of the
regulation sought to be imposed,
the mischief which it is designed to remedy and the goal which it seeks to
achieve, as well as the
effect which the regulation has on the relevant
interstate trade."
Nothing which we have heard in argument in the present case has caused us to
depart from the views we there expressed. We cannot
accept the assumption
which appears to be involved in question 1, that some particular ultimate
fact, if established, will of itself
ensure validity. (at p304)
4. To the extent that such a view has been encouraged by the observations of their Lordships in the Banking Case (1949) 79 CLR, at p 641; (1950) AC, at p 311 , we cannot regard those observations as intended to express or, indeed, as capable of expressing in some definitive formula the circumstances in which interstate economic activity may validly be prohibited with a view to state monopoly. Any such formula would, we think, be inappropriate for use in determining constitutional validity in terms of s. 92. (at p304)
5. To adopt such a formula will be to accept its indiscriminate application, regardless of circumstance; while the prospects of certainty which its adoption may seem to offer in return will, we think, prove illusory. Both the range of its application and its operation when once applied appear to us to bear the seeds of uncertainty. (at p304)
6. The terms of the formula seem to limit its application to only certain prohibitions, those enacted with a view to state monopoly. This may suggest that some other, different test of validity should apply to prohibitions having other aims; for example, the aim of creating duopolies or oligopolies, with or without State participation. If so, there will exist a variety of different tests. Each will apply only to a particular class of restriction upon interstate trade. Each will be distinguished from the others by criteria which may bear little relationship to the words of s. 92. This seems likely to produce a pattern of decisions unlike any which might be expected to emerge from a reasoned reconciliation of the freedom of which s. 92 speaks with the ordered society which enjoyment of that freedom requires. (at p305)
7. If, on the other hand, the formula is to be applied to every case of prohibition its present terms will not do, they will require restatement. Moreover, its application will lead to a quite sharp distinction being drawn between regulation of trade which involves prohibition and that which does not. There seems no warrant for such a distinction; restrictions upon the freedom to trade are infinitely variable in their impact upon the trading community. Arbitrarily to divide them into two different categories, those which involve prohibition and those which do not, ignores the realities of trade and commerce. (at p305)
8. The formula seems likely to be no more satisfactory in its operation than in its range of application. Its reference to the "only" practical and reasonable manner of regulation requires that to be valid a particular prohibiting law must be the sole such manner. We cannot think that the face of a prohibitory law, designed to introduce a regimen of state monopoly and which is in itself both practical and reasonable, should depend upon whether or not there exists an alternative means of regulation which prohibits with a view to the introduction of a different regimen, perhaps one similar to Australia's "two airlines policy". Yet this would seem to be the consequence of converting the observations of their Lordships into a formula for validity. (at p305)
9. The word "practical" appearing in the formula is also not without difficulty. A discussion of its meaning and of the distinction to be drawn between it and the word "practicable" appears in Fowler's Modern English Usage, 2nd ed. With respect to their Lordships, we would understand "practical", as it occurs in their Lordships' phrase, to bear the meaning perhaps more accurately conveyed by the word "practicable", that is, the meaning of "capable of being carried out in action, feasible": Shorter Oxford English Dictionary. What "practical" conveys, the notion of being "adapted to actual conditions", seems unlikely to have been the meaning intended. What follows proceeds upon this assumption. (at p305)
10. The formula couples two concepts, the practical and the reasonable. The quality of being practicable (that being our understanding of what is there meant by "practical") seems to be concerned very largely, if not exclusively, with whether or not a particular statutory scheme is feasible from the viewpoint of those administering it. Reasonableness, on the other hand, we regard as concerned with the adverse effect of the challenged law upon those whose activities in trade are affected by it, that adverse effect being weighed against the need which is felt for regulation in the interests of the public generally. (at p306)
11. Although the formula couples them together, these qualities are not, we think, complementary; indeed, they seem, rather, to operate in opposing senses. Those who seek to uphold a law's validity will be concerned to show that it involves a reasonable manner of regulation. The question of whether it is practicable will only enter into consideration if those who urge its invalidity propose an alternative means of regulation which, while directed to the same object, imposes less restraint upon the freedom of interstate trade. The issue will then be whether those alternatives are as practicable as the law in question. If those urging invalidity propose no alternatives the Court will not be concerned to consider whether the law is practicable: the suggested formula apart, the Court has no concern with whether legislation is practicable. If it lacks practicable operation, so much the worse for the government which seeks to operate and enforce it; it will not, of itself, affect, one way or another, that legislation's constitutional validity. (at p306)
12. All this may suggest that, despite the grammatical construction of their Lordships' phrase, "only" should be regarded as governing "practical" but not "reasonable". Be that as it may, the foregoing, to our minds, at least casts doubt upon the whole process of extracting this phrase from their Lordships' judgment and converting it into a conclusive formula by which validity is to be tested. (at p306)
13. The evidence which we would regard as relevant in determining the validity of the present legislation would be such material as would enable the Court to determine whether or not the restrictions which the legislation imposes upon interstate trade are no greater than are reasonably necessary in all the circumstances. For example, it would be relevant to establish what are the goals sought to be attained by the restrictions; how these may be weighed against those restrictions and whether they can be attained by other means which do not involve such onerous restraints upon traders. (at p306)
14. It will of course be for the parties to determine the particular evidence to be adduced, always bearing in mind that the criterion of permissible regulation of interstate trade is that the legislation should be no more restrictive than is reasonable in all the circumstances, due regard being had to the public interest. The importance of this matter of the public interest must never be lost sight of: as Mason J. has said in Permewan Wright (1979) 145 CLR, at p 36 , s. 92 is to be "understood as presupposing a society in which conduct is regulated in the interests of the community". (at p307)
15. The spirit, if not the letter, of question 1 requires that guidance be given to the parties concerning the evidence which may be relevant to the issue of validity. As will already have emerged, our response is to say that all evidence is relevant which goes to the issue of whether or not the restrictions imposed by the legislation are no greater than are reasonably necessary in all the circumstances of the case. (at p307)
MURPHY J. This is another challenge to legislation implementing the national Wheat Marketing Scheme. An earlier challenge was rejected in Clark King & Co. Pty. Ltd. v. Australian Wheat Board [1978] HCA 34; (1978) 140 CLR 120 which upheld the validity of Commonwealth and State legislation facilitating a comprehensive marketing scheme for the purpose of stabilizing returns to Australian wheat growers and wheat prices in Australia. The plaintiffs challenge the validity of the Wheat Industry Stabilization Acts of New South Wales and Queensland and, as a corollary, the correctness of this Court's decision in Clark King. (at p307)
2. This scheme, which is implemented by co-operation of the Parliaments of the Commonwealth and all States, has the overwhelming support of the wheatgrowing community. The Acts and State Acts, which are in similar form, provide for an Australian Wheat Board with power to acquire compulsorily all wheat grown in Australia and to sell it here and to other countries. The legislation operates to eliminate any economic boundaries between the States in the marketing of the wheat crops. Growers are paid for wheat on the basis of a formula which takes into account receipts from overseas as well as Australian sales, each grower being paid the same price for the same quantity and quality of wheat. (at p307)
3. It is clear from this case that the meaning and application of s. 92 is not settled. I adhere to my statements in Clark King, Buck v. Bavone [1978] HCA 34; (1978) 140 CLR 120; (1976) 135 CLR 110 and other cases. Section 92 is only concerned with customs duties and other discriminatory fiscal imposts and guarantees that trade, commerce and intercourse among the States shall be absolutely free from them. The surrounding sections are concerned with fiscal matters. This view is fortified by the decision in Seamen's Union of Australia v. Utah Development Co. [1978] HCA 46; (1979) 144 CLR 120 in which it was held that s. 91 of the Constitution was confined to fiscal or pecuniary aids and did not extend to non-fiscal or pecuniary assistance. Like the other sections surrounding s. 92 (ss. 86, 87, 88, 89, 90, 93, 94 and 96), s. 91 is concerned with finance. Section 91 does not apply to non-fiscal aids, and s. 92 does not apply to non-fiscal burdens. (at p308)
4. If, apart from discriminatory fiscal imposts forbidden by s. 92, a State were to interfere with interstate trade and commerce in any way considered detrimental by the Parliament of the Commonwealth, the remedy is provided by s. 51 (i.) of the Constitution which empowers the Parliament to make laws with respect to "trade and commerce . . . among the States". The federal law will prevail and the State law will be invalid (see s. 109 of the Constitution). (at p308)
5. The misinterpretation and misapplication of s. 92 has undermined and
destroyed much social legislation. Lord Wright who, as a member of the Privy
Council was one of those largely
responsible for this distortion of the
Constitution, later repented. He said:
"The idea of s. 92 as a power in the air brooding and ready in the name
of freedom to crush and destroy social and industrial or political experiments
in Australian life ought, I think, to be exploded. In truth, as I said, s. 92
is both pedestrian and humble, though very essential from the point of view of
the founders of the Constitution who wished to establish internal inter-State
free trade in fiscal matters for all time." "Section 92 - A Problem Piece",
Sydney Law Review, vol. 1 (1954), 145, at p. 157. (at p308)
6. Other views of s. 92 give it an application beyond fiscal imposts. They
embrace all legislative and administrative acts impinging
on trade, commerce
and
intercourse among the States. If "absolutely" were given its ordinary
meaning, the result of those views would
be economic anarchy.
This has been
avoided by reading the section as if "relatively" were substituted for
"absolutely". By this means,
"regulatory" measures
are regarded as consistent
with s. 92. As the unfolding of these views proceeds, it becomes clearer that
those
who espouse them are being forced to assume a supervisory
role over the
national economy. Courts have traditionally evolved and applied
certain public
policy tests. Thus, in human rights
and other noneconomic areas, courts have
applied tests of due process, natural
justice, reasonableness and fairness. In
economic
areas, courts have exercised such a role only in a very limited way,
for example,
in common law restraint of trade and statutory
antitrust cases.
The adoption by the court of a super-legislative role in relation
to the
national economy is inconsistent with the
separation of powers between the
legislature and the judiciary. If these views prevail,
it will not be enough
for the six State Parliaments
and the Australian Parliament to pass
complementary economic legislation. The
court will have to decide whether
giving power to the
Australian Wheat Board to acquire the whole crop is a
reasonable way of regulating
the marketing of the Australian wheat crop, or
even whether it is the only reasonable and practicable way. For the reasons I
outlined
in Buck v. Bavone [1976] HCA 24; (1976) 135
CLR 110 , I do not think s. 92 gives
this function to the judiciary. (at p309)
7. However, while adhering to my own view of s. 92, I would, as an alternative, support that which seems to be the nearest to mine in order to obtain or increase the vote for that view and to reject a more extreme alternative. The most extreme alternative is that which simply looks to see whether the State Acts prohibit interstate private trade and, if they do the State Acts are invalid. A less extreme formulation is whether the legislative scheme is the only reasonable and practical way of regulating the marketing of wheat. The least undesirable is that which poses the test whether the Act is a reasonable way of regulating the marketing of wheat, no more restrictive than is reasonable in all the circumstances, with due regard having been given to the public interest. As this case may have to be decided by a trial judge (or one may have to determine the admissibility of evidence on the issue of validity), I would, if my own view does not prevail, support the view expressed by Stephen and Mason JJ. (at p309)
8. Although fashioned at the end of the nineteenth century, the Constitution
did not entrench nineteenth century economic ideas. Yet for most of its
history, s. 92 has been construed as if it guaranteed that nineteenth century
notions of laissez-faire would prevail. Regrettably economic and social
ideas
adopted by society in one era are often persisted with by judges long after
they have been discarded by the rest of society.
This was noted by Cardozo who
quoted with approval the words of President Theodore Roosevelt in his Message
to Congress on 20th December
1908:
"The chief lawmakers in our country may be, and often are, the judges,
because they are the final seat of authority. Every
time they interpret
contract, property, vested rights, due process of law, liberty, they
necessarily enact into law parts of a system
of social philosophy; and as such
interpretation is fundamental, they give direction to all law-making. The
decisions of the courts
on economic and social questions depend upon their
economic and social philosophy; and for the peaceful progress of our people
during
the twentieth century we shall owe most to those judges who hold to a
twentieth century economic and social philosophy and not to
a long outgrown
philosophy, which was itself the product of primitive economic conditions."
(The Nature of the Judicial Process,
pp. 170-171.) (at p310)
9. An extreme instance of laissez-faire ideas is the notion that the
Constitution does not permit the Commonwealth Government, even with
parliamentary authority, to engage in what can properly be described as trade
or commerce. Yet the Constitution (s. 63) provided for the transfer to the
Commonwealth of the departments of posts, telegraphs and telephones and
certain other departments
of the public service in each State. The department
of posts, telegraphs and telephones was, as the Post Master General's
Department
for some seventy-five years and now as statutory corporations, the
greatest trading business in the nation. (at p310)
10. Section 92 prevails against the powers of the State Parliament (see s. 106) and on current theory against the exercise of power by the Parliament under s. 51 (by virtue of the words "subject to this Constitution"). If the plaintiffs are right, it is difficult to see why s. 92 would not prevail against any legislation directed to acquisition (compulsorily, if necessary) and distribution of the Australian wheat crop for any purpose. If they are right, the Australian Parliament and all the State Parliaments, even in co-operation, do not have legislative power to acquire wheat which is the subject of interstate trade in order to overcome a national famine or to fulfil an international obligation to give assistance in a world famine, or to advance Australia's defence. (at p310)
11. The possibility that the Australian Parliament may wish (whether because of some international obligation or for humanitarian reasons) to exercise its external affairs power (s. 51 (XX.)) to relieve a famine outside Australia by acquiring part of the Australian food supply including wheat, is not theoretical. Australia is one of the few wheat-exporting countries. Many other countries (particularly those with serious overpopulation problems) are importers of wheat and other grains. The plaintiffs' theory of s. 92, if accepted, would leave Australia unable even through co-operative legislation of all its Parliaments to acquire wheat from those who wished to dispose of it in interstate trade. (at p310)
12. Australia itself has had shortages of wheat, and in the last quarter of a century has had to import wheat (see R v. Commonwealth Conciliation and Arbitration Commission; Ex parte Australian Workers' Union [1957] HCA 97; (1957) 99 CLR 505 ). If there were a famine in Australia, according to the plaintiffs' contention, the Parliaments could not acquire by common action all the wheat or other crops for equitable distribution. If the extreme view is correct, persons would be entitled to trade interstate to make a profit out of the general distress. Similarly, the Commonwealth could not acquire all wheat or other crops for defence purposes; the immunity of interstate trade would prevail over even the most dire military emergency. (at p311)
13. The extraordinary consequences which would follow from adopting the
extreme view of s. 92's scope suggest that this is not what was intended.
Section 92 and Freedom of Travel and Communication. (at p311)
14. One of the arguments for regarding s. 92 as going beyond absolute freedom from custom duties or similar imposts, is that this gives a valuable guarantee of personal freedom of interstate travel and communication. I have stated my views on this subject in several cases (Buck v. Bavone; Ansett Transport Industries (Operations) Pty. Ltd. v. The Commonwealth [1977] HCA 71; (1976) 185 CLR 110; (1977) 139 CLR 54 ; McGraw-Hinds (Aust.) Pty. Ltd. v. Smith [1979] HCA 19; (1979) 144 CLR 633 ) but it may be convenient to mention them briefly. It would be astonishing to find the guarantees of such fundamental personal rights confined to their exercise "among the States" and in a section dealing with the abolition of customs duties in a Chapter headed "Finance and Trade". (at p311)
15. Freedom of travel and communication can be implied from the nature of our society, reinforced by parts of the written Constitution. Implications have always been made in our Constitution (see West v. Commissioner of Taxation (N.S.W.) [1937] HCA 26; (1937) 56 CLR 657, at p 681 ; Australian National Airways Pty. Ltd. v. The Commonwealth [1945] HCA 41; (1945) 71 CLR 29, at p 35 ; Lamshed v. Lake [1958] HCA 14; (1958) 99 CLR 132, at p 144 ; South Australia v. The Commonwealth [1942] HCA 14; (1942) 65 CLR 373, at p 447 ; R. v. Commonwealth Court of Conciliation and Arbitration; Ex parte Victoria [1942] HCA 39; (1942) 66 CLR 488, at p 515 ; Melbourne Corporation v. The Commonwealth (1947) 74 CLR 31, at pp 65, 70 ; Victoria v. The Commonwealth [1971] HCA 16; (1970) 122 CLR 353, at pp 401, 406, 418, 419 ; see also Uther v. Federal Commissioner of Taxation [1947] HCA 45; (1947) 74 CLR 508 ). Our Constitution and government could not function without the implications of federalism and responsible government. In my opinion, there are other constitutional implications which are at least as important as these. Our society is a union of free people joined in one Commonwealth with subsidiary political divisions of State and Territories, participating in elections of representatives who exercise the legislative and executive powers. From these flow implications of freedom of speech and assembly and of other forms of communication and travel, not merely interstate, but in and between all parts of Australia. (at p312)
16. The challenged State Acts do not provide for any direct or indirect
fiscal impost discriminating against trade and commerce
among the States.
Section 92 of the Constitution therefore has no application, and the State
Acts are valid. The questions should be answered:
1. No.
2. Does not arise.
3. No. (at p312)
AICKIN J. In this case the Court has before it three questions which have been referred to it by the Chief Justice at the request of the parties. It is however necessary before turning to the questions to consider the origin and status of the proceedings. (at p312)
2. The plaintiffs in their amended statement of claim alleged that the first plaintiffs carried on the business of wheat growers in New South Wales and that they had entered into a contract in writing with the second plaintiff, Darwalla Milling Co. Pty. Ltd., a company which carried on business at Mt. Cotton in the State of Queensland as a manufacturer of poultry feed containing wheat, to sell certain wheat then growing in a specified area for use in manufacturing poultry feed. The contract which was annexed to the statement of claim contained a clause which was expressed to provide that the property in the wheat passed to the purchaser at the time of the contract, but nothing turns upon that provision since the statement of claim further alleged that the wheat was duly harvested and stored separately by the first plaintiffs pending delivery in accordance with the contract. It was thereby appropriated to the contract from the moment of its coming into existence as separate property. The contract provided that the vendors should harvest and store the wheat and deliver it to the purchaser at its factory at Mt. Cotton at such times and in such quantities as the purchaser shall determine. The statement of claim also alleged that on 21st November 1978 the defendant published in the Gazette certain notices pursuant to the Wheat Industry Stabilization Acts 1974 of each of the States and the Commonwealth which purported to authorize the defendant to require the delivery to it of substantially all the wheat in Australia and to enable it and no one else to market wheat in Australia and overseas. The notice with respect to the State of New South Wales was given pursuant to the Wheat Industry Stabilization Act, 1974 (N.S.W.) and required all wheat in or coming into the possession of any person in New South Wales between 1st November 1978 and 30th September 1979 to be delivered to the Board or a receiver licensed by it. The defence did not admit the nature and location of the second plaintiff's business nor the making of the contract, the harvesting or storage of the wheat or the passing of the property therein to the second plaintiff. (at p313)
3. Attempts were evidently made by the parties to agree upon relevant facts but in the end no agreement was reached. After a number of applications to the Chief Justice had been made the parties agreed on three questions for the Full Court. Thereafter on 20th August 1979 those questions came before the Full Court. Two of those questions were answered by the Court saying that it would allow argument as to the validity of s. 10 (2) of the Wheat Industry Stabilization Act, 1974 (N.S.W.) and of s. 12 (3) of the Wheat Industry Stabilization Act, 1974 (Q.) and further that the decision of the Court in Clark King and Co. Pty. Ltd. v. Australian Wheat Board [1978] HCA 34; (1978) 140 CLR 120 (Clark King) did not preclude the examination of the facts upon which either party might claim that the validity of the relevant statute depended, or argument as to the correctness of that decision. The third question was not dealt with at that stage. (at p313)
4. Certain amendments were made to the pleadings, but it is not necessary to refer to them beyond saying that they included an allegation by the defendant that the legislation was valid. The amended defence admitted certain formal paragraphs of the statement of claim and refused to admit the critical allegations that the first and second plaintiffs were engaged in interstate trade, but did not allege any facts. (at p313)
5. Thereafter certain further questions were reserved by the Chief Justice
for the consideration of a Full Court, and it is those
questions which are now
before the Court. They are:
"1. Does the validity of the Wheat Industry Stabilization Act, 1974
(N.S.W.), as amended, and the Wheat Industry Stabilization
Act, 1974 (Q.), as
amended, depend on the establishment to the satisfaction of the Court of any
fact? If so, what is that fact?
2. Is that fact to be determined solely upon material which is within
judicial knowledge?
3. Does s. 92 prevent the application of the Wheat Industry Stabilization
Act, 1974 (N.S.W.), as amended, and the Wheat Industry
Stabilization Act, 1974
(Q.), as amended, or either of them to the transaction particularised in par.
7 of the statement of claim?"
(at p314)
6. The first of those questions is somewhat curious in that there are no
allegations of fact in the defence. The plaintiffs and
the defendant were at
issue on the question of whether the plaintiffs were engaged in interstate
trade, a fact upon which their locus
standi as plaintiffs depended. However
this latter difficulty was solved when counsel for the Wheat Board stated that
the Board admitted
the relevant paragraphs of the statement of claim. (at
p314)
7. The object of the litigation is to seek a re-consideration of the decision in Clark King [1978] HCA 34; (1978) 140 CLR 120 . That case was heard by a Court of five and by majority (Mason, Jacobs and Murphy JJ., Barwick C.J. and Stephen J. dissenting) the Court upheld the validity of the legislation now in question. However the views of the majority were not identical and their reasons for treating the legislation as valid and not contrary to s. 92 of the Constitution differed significantly. Mason and Jacobs JJ. delivered a joint judgment upholding the legislation substantially upon the ground that the scheme of the relevant legislation of the Commonwealth and the States was "the only practical and reasonable manner of regulation of trade and commerce (including interstate trade and commerce) in wheat produced in Australia". Murphy J. upheld the legislation on the ground that it did not impose any customs duty or similar tax discriminating against trade and commerce amongst the States, thus adhering to what he had said in Buck v. Bavone (1976) 135 CLR 110 and subsequent cases. There was thus no ratio decidendi common to the majority of the Court which upheld the legislation. In those circumstances the majority view should not be regarded as authoritative or "binding" and the matter is open for review without the requirement that there should be the kind of "special circumstances" which I discussed in Queensland v. The Commonwealth [1977] HCA 60; (1977) 139 CLR 585 . (at p314)
8. That this is so appears from the joint judgment of Rich and Dixon JJ. in
Amalgamated Clothing and Allied Trades Union of Australia
v. D. E. Arnall and
Sons; In re American Dry Cleaning Co. [1929] HCA 35; (1929) 43 CLR 29, at pp 51-52 , where
their Honours said:
"The judgment of Knox C.J., Gavan Duffy J. and Starke J. in Alderdice's
Case [1928] HCA 38; (1928) 41 CLR 402 is, therefore,
a direct authority
which completely
covers this case. In that case, however, the Court was composed
of six
Justices and three of
them, Isaacs J., Higgins
J., and Powers J., although
giving the same answer to the question asked by
the special case did so for
other reasons and two of
these Justices, Isaacs J. and Higgins J., expressly
dissented from the reasons
of Knox C.J., Gavan Duffy
J. and Starke J. In these
circumstances these reasons cannot be said to be the ratio decidendi of the
order
made by the Court."
The view so expressed does not appear to have been challenged at any time. A
similar view was expressed by Barwick C.J. in Dickenson's
Arcade Pty. Ltd. v.
Tasmania (1974) 130 CLR 177, at p 188 in his discussion of Dennis Hotels Pty.
Ltd. v. Victoria
[1960] HCA 10; (1960) 104 CLR
529 . This view is also implicit in the
decision on the preliminary questions in this case, to which
I have referred
above, namely
that the Court would hear argument on the validity of the
legislation and the correctness of the decision
in Clark
King [1978] HCA 34; (1978) 140
CLR
120 . (at p315)
9. I proceed therefore upon the basis that the Court is not in the present proceedings in any way inhibited or limited by the reasons expressed by Mason and Jacobs JJ. in Clark King and is free to examine the point there made de novo. (at p315)
10. The general principles which this Court has applied in its decisions on s. 92 since 1950 have been derived primarily from authoritative decisions by the Privy Council as discussed and examined in subsequent cases by this Court. This approach has been based on the decisions in James v. The Commonwealth (1936) 55 CLR 1 and The Commonwealth v. Bank of New South Wales ("the Banks Case") (1949) 79 CLR 497; (1950) AC 235 . Hughes and Vale Pty. Ltd. v. New South Wales (No. 1) (1954) 93 CLR 1; (1955) AC 241 may be added to that list as repeating the principles stated in the Banks Case and explaining their application to transport between the States. Cases decided after 1920 and prior to James v. The Commonwealth proceeded upon the basis that s. 92 did not bind the Commonwealth and are in some respects, but not in others, less authoritative or less helpful than the later cases. In addition the Privy Council decision in James v. Cowan (1932) 47 CLR 386; (1932) AC 542 is of importance because it represents their Lordships' views on what are often called "marketing schemes". These decisions have not been questioned at any stage in this Court except by the adoption by Murphy J. of the view to which I have referred above. As to that view I need say no more than that it is not one which has previously been expressed by any member of this Court since its inception and that it appears to contemplate that a total ban on the movement of goods from one State to another would be consistent with s. 92, a view which I regard as irreconcilable with both the language of the section and its basic function in the Constitution. I would repeat the following sentence from their Lordships in the Banks Case (1949) 79 CLR, at p 629; (1950) AC, at p 299 , "Forty years of controversy upon these words have left one thing at least clear. It is no longer arguable that freedom from Customs or other monetary charges alone is secured by the section." With that observation I respectfully agree. (at p316)
11. It is not necessary to enumerate the many cases in which this Court has accepted and applied the principles expounded by the Privy Council in the cases to which I have referred. That is not to say that differences of opinion have not occurred in the application in individual cases of the principles so laid down. Indeed from the nature of the section and of those principles some differences may be regarded as inevitable. (at p316)
12. The scheme of the legislation now in question is set out in the judgment of the Chief Justice in Clark King (1978) 140 CLR, at pp 129-134 and I do not need to repeat it here. It is however convenient to point out, as that judgment did, that the "wheat stabilization scheme" introduced by the Commonwealth Act and the various State Acts amounted to an Australia-wide scheme in the sense that virtually identical State Acts applied within each State and the Commonwealth Act applied to the Australian Capital Territory and the Northern Territory, thus covering all the wheat-growing areas throughout the Commonwealth. In this respect, though not in others, it resembles the scheme which was dealt with in Wilcox Mofflin Ltd. v. New South Wales [1952] HCA 17; (1952) 85 CLR 488 ("Wilcox Mofflin") to which I refer below. (at p316)
13. As it is now conceded that the wheat in question was the subject of interstate trade, there is therefore no occasion to deal here with the ambit of the conception of interstate trade dealt with in the judgments in Clark King. (at p316)
14. Both the New South Wales Act and the Queensland Act contain sections which provide in effect that, if by reason of the Constitution, a provision of the Act or any notice given under it cannot validly operate in relation to particular wheat then it shall be construed as intended to operate in respect of all wheat to which it can validly apply. Accordingly each Act should be "read down" so as to confine its operation to the extent of the legislative power of each State and in so far as their provisions may offend against s. 92 they will have no operation, if the form of the legislation permits such reading down. The legislation is in a form which, if it is invalid in relation to any particular wheat, is capable of applying effectively to other wheat without altogether destroying the scheme of the legislation. (at p317)
15. My own view as to the scope and operation of s. 92 in the present context is substantially in accord with the views expressed by Barwick C.J. in Clark King (1978) 140 CLR, at pp 145-159 and with the views of Stephen J. in that case (1978) 140 CLR, at pp 167-174 . The remainder of each of those judgments deals with certain material which was "handed up", apparently for the information of the Court notwithstanding that the proceedings were on demurrer. Save for copies of legislation, past and present, and statistical material from Commonwealth Year Books handed up by the Solicitor-General for the Commonwealth, to which no reference was made in argument, no such material was placed before this Court for the purpose of the hearing or during argument. The nature and extent of it does not appear from the report save that it included the interim report on wheat stabilization by the Industries Assistance Commission and some material from a Commonwealth Year Book and a volume of the Australian Encyclopaedia to which Mason and Jacobs JJ. refer in their joint judgment to which I refer below. (at p317)
16. Turning now to the earlier authorities, it is necessary to look at the James Cases (1927) 40 CLR 1; (1930) 43 CLR 386; (1932) 47 CLR 386; (1932) AC 541; (1936) 55 C.L.R. 1 (1936) A.C. 578. but not in detail for they were re-examined and not qualified in any way in the Banks Case (1949) 79 CLR 497; (1950) AC 235 . It is however important to note that in both James v. South Australia (1927) 40 CLR 1 and James v. Cowan (1930) 43 CLR 386; (1932) 47 CLR 386; (1932) AC 542 there was substantially identical legislation in two States, South Australia and Victoria (the only States in which there was any significant production of dried fruits) and a Commonwealth Act so that there was in its operation an Australia-wide scheme, and to look at what their Lordships derived from those cases. (at p317)
17. Their Lordships in the Banks Case concluded their discussion of the
decision in James v. South Australia (1927)
40 CLR 1
and
James v. Cowan by
saying (1949) 79 CLR, at pp 633-635; (1950) AC, at pp 303-305 :
"In the earlier case of James v. South Australia it was in the first
place the validity of s. 20 of the Act and of determinations
made under it
that came in question and it was held by the whole Court (Isaacs A.C.J., Gavan
Duffy, Rich, Starke and Powers JJ.)
that that section, so far as it authorized
a determination by the Board limiting the quantities of dried fruits which
might be marketed
within the Commonwealth, was obnoxious to s. 92. From the
decision of the High Court no appeal was brought to this Board. But, s.
20
failing him, the Minister of Agriculture in South Australia sought to make use
of his powers under s. 28. Once more James invoked
s. 92 of the Constitution
and in the case of James v. Cowan (1932) 47 CLR 386; (1932) AC 542 challenged
the validity of the executive action
taken under s. 28 and it was in this case
when it came before the Board that the decision was given, which, as their
Lordships think, goes far to determine
the present case. For, as part of the
ratio decidendi of the case and by no means obiter or by way of a historical
narrative, the
Board expressly affirmed the decision of the High Court in
James v. South Australia. The primary importance of the decision lies
in this,
that in regard to s. 20, Lord Atkin delivering the opinion of the Board, said
(1932) 47 CLR, at p 397; (1932) AC, at p 559 : 'in the result, therefore, one
returns to the precise situation created by s. 20 with its determination of
where and in what quantities the fruit is to be marketed. Section 20 and the
determinations are invalid, and for precisely the same reasons it appears to
their Lordships inevitable that the exercise
of the powers of the Minister,
crediting him with the precise object and intention found by the High Court,
were also invalid.'
Before further examining what is involved in this decision their
Lordships think it convenient to note what was actually decided
in the other
of the two cases which have come before them. In James v. The Commonwealth
(1936) 55 CLR 1; (1936) AC
578 it was
a similar
Act, but in this case an Act
of the Commonwealth, that was under attack, and the substantial issue was
whether
the Commonwealth,
as well as the States, was bound by s. 92. If it was
bound, then the further question arose whether the Act in
question was
obnoxious
to s. 92. The decision of the Board was that the Commonwealth was
bound by s. 92 and it is significant that
the judgment thus proceeds
(1936) 55
CLR, at p 61; (1936) AC, at p 633 : 'For these reasons their Lordships are of
opinion that s.
92 binds the Commonwealth.
On that footing it seems to follow
necessarily that the Dried Fruits Act 1928-1935 must be held to be
invalid. On
the interpretation
of "free" in s. 92, the Acts and the Regulations either
prohibit entirely, if there is no licence,
or if a licence is granted,
partially
prohibit inter-State trade. Indeed, the contrary was but faintly
contended, if the Commonwealth
was held to be bound by the section.'
There
does not in fact appear to have been any ground for contending that, if the
Act which
was challenged in James v. Cowan was
invalid, that challenged in
James v. The Commonwealth could be valid.
It might well appear that these two decisions were a serious obstacle to
the present appellants' case. Section 20 of the South
Australian Act was
invalid. It was general in its terms: it did not discriminate between
inter-State and intra-State trade in dried
fruits. But because it authorized a
determination at the will of the Board the effect of which would be to
interfere with the freedom
of the grower to dispose of his products to a buyer
in another State, it was invalid. And for the same reason the Commonwealth Act
fell." (at p319)
18. Their Lordships dealt with what was established by the James Cases by
saying (1949) 79 CLR, at p 635; (1950) AC, at p 305 :
"The necessary implications of these decisions are important. First may
be mentioned an argument strenuously maintained on
this appeal that s. 92 of
the Constitution does not guarantee the freedom of individuals. Yet James was
an individual and James vindicated his freedom in hard-won fights. Clearly
there is here a misconception. It is true, as has been said more than once in
the High Court, that s. 92 does not create any new juristic rights, but it
does give the citizen of State or Commonwealth, as the case may be, the right
to
ignore, and if necessary, to call upon the judicial power to help him to
resist, legislative or executive action which offends against
the section. And
this is just what James successfully did." (at p319)
19. Their Lordships there rejected the argument that if the same volume of
trade moved from State to State then freedom of trade
between the States was
not impaired. They regarded it as contrary to the James Cases imposing an
unreal and impracticable criterion
and as not reconcilable with use of the
word "intercourse" in the constitutional prohibition. They then said (1949) 79
CLR, at pp
635-636; (1950) AC, at p 306 :
"Yet it would be a strange anomaly if a grower of fruit could
successfully challenge an unqualified power to interfere with
his liberty to
dispose of his produce at his will by an inter-State or intra-State
transaction, but a banker could be prohibited
altogether from carrying on his
business both inter-State and intra-State and against the prohibition would
invoke s. 92 in vain. In their Lordships' opinion there is no justification
for such an anomaly." (at p319)
20. Their Lordships then quoted (1949) 79 CLR, at p 640; (1950) AC, at pp
310-311 from the judgment of Latham C.J. in Australian
National Airways Pty.
Ltd. v. The Commonwealth [1945] HCA 41; (1945) 71 CLR 29, at p 61 where he repeated what he
said in Milk Board
(N.S.W.) v.
Metropolitan Cream Pty. Ltd. [1939] HCA 28; (1939) 62 CLR 116,
at p 127 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.'"
That passage was again approved in Hughes and Vale (No. 1) (1954) 93 CLR, at
pp 18-19; (1955) AC 241, at pp 291-292 . (at p320)
21. In the immediately following paragraph they made a further statement
concerning the nature of the expression "regulation" as
they had used it. They
said (1949) 79 CLR, at p 641; (1950) AC, at p 312 :
"Their Lordships must therefore add, what, but for this argument so
strenuously urged, they would have thought it unnecessary
to add, that
regulation of trade may clearly take the form of denying certain activities to
persons by age or circumstances unfit
to perform them, or of excluding from
passage across the frontier of a State creatures or things calculated to
injure its citizens."
They also referred to the difficulties of being precise about the application
of the word "regulation" and the application of the
distinction between what
is direct and what is too remote. They said in effect that the distinctions
were nonetheless real although
they might be difficult to apply and might give
rise to differences of opinion in particular cases. (at p320)
22. It is of importance also to note that in the course of the decision in
Hughes and Vale a passage from the dissenting judgment
of Dixon J. in McCarter
v. Brodie [1950] HCA 18; (1950) 80 CLR 432, at pp 465-467 was quoted with approval, where,
after referring
to the judgment
of the Privy Council in the Banks
Case (1949)
79 CLR 497; (1950) AC 235 , he said:
"I do not think that there is any room for doubting that their Lordships
have rejected as erroneous three propositions that
have often been put
forward. The first is 'that sec. 92 of the Constitution does not guarantee the
freedom of individuals.' The second is 'that, if the same volume of trade
flowed from State to State before
as after the interference with the
individual trader . . . then the freedom of trade among the States remained
unimpaired.' The third
relates to the relevance of absence of discrimination.
As I understand it their Lordships have rejected the theory that because a
law
applies alike to inter-State commerce and to the domestic commerce of a State,
it may escape objection notwithstanding that it
prohibits, restricts or
burdens inter-State commerce.
I shall not stop to examine or explain the contraries of these
propositions or to state how they should be understood to apply.
They have
been much canvassed and there ought to be no difficulty in understanding them.
All that is important for present purposes
is that in face of the
pronouncement of the Privy Council the propositions themselves are no longer
tenable.
There are two further matters settled by the decision of their Lordships
that are relevant to the basis upon which the Transport
Cases appear to me to
rest. One is that the object or purpose of an Act challenged as contrary to s.
92 is to be ascertained from
what is enacted and consists in the necessary
legal effect of the law itself and not in its ulterior effect socially or
economically.
The other is that the question what is the pith and substance of
the impugned law, though possibly of help in considering whether
it is nothing
but a regulation of a class of transactions forming part of trade and
commerce, is beside the point when the law amounts
to a prohibition or the
question of regulation cannot fairly arise. Now I think that every one of
these five errors will be found
to have a place in what in the passage I have
quoted I ventured to call the pragmatical solution which the Transport Cases
gave to
a problem they approached as a complex.
Trade and commerce was treated as a sum of activities. The inter-State
commercial activities of the individual and his right
to engage in them were
ignored. Inter-State commerce as a whole was considered and the adverse effect
upon the total flow was treated
as the test or at all events a test. Great
importance was attached to the absence from the Act of discrimination against
inter-State
trade. The purpose imputed to the Act of making a planned
structure of the internal transport of the State was taken into account
as
another element weighing in favour of the valid operation of the Act upon
inter-State carriage. But that purpose was a matter
of supposed policy which
as it was thought it was the design of the Act to carry out: not the legal
effect of the enacted provisions.
The use of the idea expressed by the words
'pith and substance' may not appear so clearly; but I think that underlying
much of what
is said in the judgments in the Transport Cases is a view of the
Act which treated the restriction on the carriage of goods by road
as a means
of effecting a main purpose of distributing the traffic between road and rail
in a 'rationalized' manner.
To these elements one other was added; one not the subject of
consideration by the Privy Council. That element is the distinction
taken
between on the one hand motor vehicles as integers of traffic and on the other
hand the trade of carrying by motor vehicle
as part of commerce. It is a
distinction that I have never understood. The statutes dealt with the
commercial use of motor vehicles
and not with motor vehicles as such or at
rest so to speak. There are tendencies in the Transport Cases to thrust the
carriage of
goods and persons towards the circumference of the conception of
commerce, but in the Airlines Case [1945] HCA 41; (1945) 71 CLR
29 , it was shown
that it
must lie at or near the centre. The combination of ideas upon which, according
to my view,
the Transport
Cases are based,
consists therefore of no element
which can survive. Five of them have been destroyed by the judgment
of the
Privy
Council. The sixth
would not suffice as a separate reason and is
unsustainable. I am therefore of opinion that we should
no longer
regard
ourselves
as bound by the authority of the Transport Cases." (at p322)
23. Those views were approved by their Lordships and they said that the six
conceptions referred to could not be regarded as sound.
Their Lordships quoted
with approval a passage from the dissenting judgment of Fullagar J. in
McCarter v. Brodie (1950) 80 CLR, pp
495-496 . The passage quoted describes
the kind of laws which might govern interstate road transport and yet not
infringe s. 92,
and throws light on what is involved in the conception of
regulation. This view is reflected also in the judgment of Barwick C.J.
as
expressed in Mikasa (N.S.W.) Pty. Ltd. v. Festival Stores [1972] HCA 69; (1972) 127 CLR 617,
at p 629 where he said:
"To my mind, basically, the law to be relevantly regulatory must in its
nature and in the extent of its reach be concerned
with the accommodation of
the activities of members of the Australian community each to other,
particularly in matters of trade and
commerce, so that it can properly be said
that each is free to engage in such trade and commerce." (at p322)
24. In the Banks Case (1949) 79 CLR 497; (1950) AC 235 their Lordships, after
quoting the passage which I have set
out above
from
the judgment of Latham
C.J. in Australian National Airways Pty. Ltd. v. The Commonwealth, said (1949)
79 CLR, at p
640; (1950)
AC,
at p 311 :
"With this statement which both repeats the general proposition and
precisely states that simple prohibition is not regulation
their Lordships
agree. And it is, as they think, a test which must have led the Chief Justice
to a different conclusion in this case
had he decided that the business of
banking was within the ambit of s. 92. They do not doubt that it led him to a
correct decision
in the Airways Case [1945] HCA 41; (1945) 71 CLR 29, at p 61 . There he said
'In the present case the Act is directed against all
competition with
the
inter-State
services of the Commission. The exclusion of other services is
based simply upon the fact that the
competing services
are themselves
inter-State services . . . . The exclusion of competition with the Commission
is not a system of
regulation and is,
in my opinion,
a violation of s. 92 . .
. . ' Mutatis mutandis, these words may be applied to the Act now impugned,
for it is an
irrelevant factor
that the prohibition prohibits inter-State and
intra-State activities at the same time." (at p323)
25. It is immediately after quoting those passages from Latham C.J. that
their Lordships (1949) 79 CLR, at pp 640-641; (1950) AC,
at p 311 set out the
reservation which has been relied upon by the defendant and was relied upon by
Mason and Jacobs JJ. in Clark
King (1978) 140 CLR, at p 186 .
"Yet about this, as about every other proposition in this field, a
reservation must be made. 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 monopolized remained absolutely free."
(at p323)
26. From these quotations from the Banks Case (1949) 79 CLR 497; (1950) AC
235 there emerge two problems in the
application of
those
principles quite
apart from what is meant by the reservation. There is first the distinctions
between direct
and remote and
between
regulation and prohibition. These do not
appear to me to be mutually exclusive but to involve a least some
degree of
overlap.
A prohibition
of some particular kind of trade, commerce or
intercourse can scarcely be other than "direct" but
regulation is not
necessarily remote
and may be "direct". Amongst earlier phrases and synonyms
it may still often be necessary and
useful to ask whether
the relevant
law
imposes a "burden" or a "significant burden" on interstate trade. To do so it
must no doubt
be "direct" but that
which may in
some contexts be described as
"regulatory", as distinct from "prohibitive", may nonetheless constitute
a
very real burden.
Moreover
there are other tests which appear to be concurrent
with those which have been formulated in the Banks
Case and to operate
independently
and in addition to those tests. Thus it remains undoubted that a
law which discriminates against,
in the sense of treating
differently,
intrastate trade and interstate trade, whether it be a federal or a State law,
contravenes
s. 92 and is invalid. If
it does thus
discriminate it matters not
that it is regulatory and not prohibitive and it remains elementary
that the
imposition
of a tax or monetary
impost at the border, whether it be capable of
being classified as prohibition or regulation,
does offend against
s. 92.
Their Lordships
in the Banks Case were not, as it seems to me, intending what
they said to be exclusive,
nor did they intend
to convey that the meaning
of
"regulation", in the context in which they use that expression, is equivalent
to
a law "with respect
to interstate trade". Many
laws which would fall within
the scope of the expression in s. 51 (i) of the Constitution, i.e. laws with
respect to trade and commerce among the States, will nonetheless be contrary
to s. 92 and invalid. That this is so is demonstrated by the judgments of
Fullagar J. and Kitto J. in Hughes and Vale Pty. Ltd. v. New South
Wales
(1955) 93 CLR 127, at pp 205, 218 . Kitto J.'s observation was repeated in
Breen v. Sneddon
[1961] HCA 67; (1961) 106 CLR 406, at p 415 and
was subsequently adopted by
the Privy Council in Freightlines and Construction Holding Ltd. v.
New South
Wales [1967] UKPCHCA 1; (1967) 116 CLR 1,
at p 20; (1968) AC 625, at p 683 , which is referred
to, along with other cases
to the same effect, in the judgment
of Stephen J.
in Clark King [1978] HCA 34; (1978) 140 CLR 120 in the passages with which I have
already
expressed my agreement. (at p324)
27. It is to be remembered that the legislative powers given by s. 51 are expressed to be "subject to this Constitution", i.e. to the balance of the Constitution, including s. 92, and that s. 92 is not so expressed and is therefore to have an overriding effect. (at p324)
28. In my opinion it is not enough to save legislation which operates to prohibit, not absolutely, but sub modo, interstate trade to say that such legislation is reasonable. Hughes and Vale (1954) 93 CLR 1; (1955) AC 241 seems to me to demonstrate beyond doubt that that is so. Regulation or partial prohibition will not contravene s. 92 if it is a necessary or a reasonable mode of enabling all traders or potential traders, private individuals as well as governments and statutory authorities, to conduct their interstate trade without excluding each other, and with due regard to the protection of the general public from danger, deceit or restrictive trading practices. The expression "reasonable" in the abstract seems to me to have no content. It must be measured against some criterion and that which I have stated appears to me to be the criterion established and applied by the cases in the Privy Council. (at p324)
29. The critical questions which have been discussed in this case and in Clark King [1978] HCA 34; (1978) 140 CLR 120 are what is the meaning in this context of the expression "regulation" and what is the significance of the reservation expressed by their Lordships in the passage which I have quoted above. (at p325)
30. The judgments in Wilcox Mofflin [1952] HCA 17; (1952) 85 CLR 488 discuss at some length the operation of s. 92 on "marketing schemes" in the light of the James Cases (1930) 43 CLR 386; (1932) 47 CLR 386; (1932) AC 542 and the Banks Case (1949) 79 CLR 497; (1950) AC 235 . The joint judgment of Dixon, McTiernan and Fullagar JJ. contains a full description of the scheme there in question and of the effect of sections such as s. 15A of the Acts Interpretation Act 1901, (Cth), as amended, which were present in all the legislation there in question, as they are in the Wheat Industry Stabilization Acts in the present case. The passage at pp. 517-520 applies equally to the legislation now in question. (at p325)
31. In Wilcox Mofflin the application of those sections saved from invalidity provisions of a compulsory marketing scheme which would otherwise have been invalid as contrary to s. 92. There was however a further provision which required all hides to be submitted for appraisement by the relevant authority whether or not the subject of trade and commerce between the States. This provision was upheld as not upon its face imposing any burden on interstate trade but their Honours pointed out that no evidence was adduced to indicate the manner in which the system operated, leaving open the possibility that as operated it did impose a burden. A provision prohibiting sale before appraisement was however held not capable of applying to hides the subject of interstate trade. (at p325)
32. The James Cases and Wilcox Mofflin demonstrate that, but for the "reading down sections" the Wheat Industry Stabilization Acts would be invalid as contravening s. 92 in that they prohibit all trade in wheat except by a government agency armed with powers of compulsion by legislation of the Commonwealth or the States. There is in my opinion no basis upon which those cases can be distinguished. The circumstances which saved one of the sections considered in Wilcox Mofflin do not apply in the present case. Accordingly the application of those cases would require the Wheat Industry Stabilization Acts of New South Wales and Queensland to be read as not applying to the wheat in question in this case. (at p325)
33. It is said however that the reservation made by their Lordships in the Banks Case applies or may apply so as to save the legislation without reading it so as to exclude its operation on wheat the subject of interstate trade. (at p325)
34. I find myself unable to agree with the reasons of Mason and Jacobs JJ. in their joint judgment in Clark King [1978] HCA 34; (1978) 140 CLR 120 . It appears to me that their reasons cannot be reconciled with the decisions in the James Cases, the Banks Case (1949) 79 CLR 497; (1950) AC 235 and Wilcox Mofflin. It is true that the James Cases (1927) 40 CLR 1; (1930) 43 CLR 386; (1932) 47 CLR 386; (1932) AC 542; (1936) 55 C.L.R. 1. were prior to the Banks Case and their Lordships' reservation could not have been in the minds of those who decided them. Nevertheless they were expressly approved and relied upon by their Lordships in the Banks Case. (at p326)
35. I cannot accept that the material referred to by Mason and Jacobs JJ., at pp. 189-193, even if it were the only relevant material, would demonstrate that State and Commonwealth 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" however that statement may be understood. I find difficulty in reconciling that part of their Honours' reasoning at p. 187 with the decision of this Court in North Eastern Dairy Co. Ltd. v. Dairy Industry Authority of N.S.W. [1975] HCA 45; (1975) 134 CLR 559 . (at p326)
36. With due respect I am unable to accept the views expressed in the joint judgment of Stephen and Mason JJ. in the present case. Those views appear to me not to be reconcilable with the reasons of their Lordships in the cases to which I have referred, and in particular with their Lordships' approval of Dixon J.'s reference to six misconceptions which had been exposed as erroneous by their Lordships' observations in the Banks Case (1949) 79 CLR 497; (1950) AC 235 . (at p326)
37. I do not think however that one can say in the abstract that there can never be such a situation as their Lordships postulated in their reservation, paradoxical though its expression may be. It is difficult at this stage in Australia's history to visualize circumstances in which it would be possible to say that a government monopoly of a particular trade was consistent with the freedom of those who carried on or formerly had carried on that trade as part of their interstate trade and commerce, particularly as their Lordships have emphasized that s. 92 is concerned with the freedom of the individual trader to engage in interstate commerce. I think it clear that the kind of circumstances which might answer the description must be both rare and exceptional. (at p326)
38. Their Lordships' reservation is not to be read as though it were a statutory provision and the kind of linguistic analysis appropriate to a statute is in my opinion inappropriate and likely to lead to error. Its language does not seek or achieve great precision. I am however satisfied that their Lordships' reservation could not be consistent with s. 92 if it means that the test of compliance is simply whether or not the legislation is "reasonably necessary in all the circumstances". I do not take their Lordships to have said that or to have intended to convey that meaning for to do so would have been in conflict with the carefully expressed reasons in the earlier part of their advice. (at p327)
39. Nor can I agree that there is some aspect of "public interest" which this Court can apply which can rise higher than the Constitution itself and so govern the operation of s. 92 otherwise than by the use of the settled meaning of its terms. To say that its operation is governed by some fundamental public interest which overrides the settled meaning and operation of its words is to change the fundamental place in the Constitution which the words of that instrument plainly give it by subjecting the legislative powers of the Commonwealth Parliament to its operation, and to set at nought the decisions which after so much controversy gave a settled and established operation to the section notwithstanding that such operation left room for differences of opinion in its application to individual cases. (at p327)
40. No doubt wisely their Lordships did not attempt to describe the kind of circumstances which might produce the result to which they refer in their reservation. Moreover they speak in terms of possibilities, not of certainties or probabilities, without expressing any view as to the kind of circumstances in which the possibilities referred to might in fact occur. We are not endowed with the gift of prophecy and, their Lordships having envisaged this possibility, we should not say that it cannot possibly occur. I can however say that nothing has been alleged or said in these proceedings as they presently stand, or in Clark King [1978] HCA 34; (1978) 140 CLR 120 , which has suggested to me that such a possibility has now occurred. (at p327)
41. However I do not think that we can or should prevent the defendant from attempting to prove by evidence that the circumstances which their Lordships postulated existed in the field of the marketing of wheat in 1978 and 1979. Such evidence however would not be admissible on the present pleadings. The mere allegation that the legislation is valid is not sufficient to support the leading of such evidence for it merely states a conclusion of law. If facts are to be relied upon as warranting that conclusion then they must be pleaded in proper form so that both the plaintiff and the Court may know what is alleged, but it will not be enough to allege the ultimate fact that the circumstances of their Lordships' reservation have occurred, which is no more than a conclusion which it may be contended could be drawn from facts proved in evidence. (at p328)
42. As the matter stands at present the legislation has not been shown to be valid in its operation upon wheat the subject of interstate trade and commerce. (at p328)
43. The first question asked appears to assume that some single fact may by itself establish or deny the validity of the legislation in so far as it purports to apply to wheat the subject of interstate trade. I find it impossible to envisage any such fact and none was suggested in the course of argument. However if the defence is amended to allege particular facts evidence directed to the proof of those facts may be admissible. It is not the function of this Court to proffer to litigants advice on evidence or on the facts which they should seek to prove, even if the Court had the necessary information to enable it to do so. Accordingly I am not prepared to answer the second part of the first question. (at p328)
44. My conclusion that some evidence may be admissible demonstrates that I do not take the view that relevant evidence is confined to facts of which the Court may take judicial notice. (at p328)
45. As the defendant may wish to amend its pleading it is not appropriate to answer the third question. (at p328)
ORDER
Question 1: Does the validity of the Wheat Industry Stabilization Act, 1974 (N.S.W.), as amended, and the Wheat Industry Stabilization Act, 1974 (Q.), as amended, depend on the establishment to the satisfaction of the Court of any fact? If so, what is that fact?Answer: There may be facts whose existence is relevant to the validity of the Acts, but the admissibility of evidence to establish any such facts will be subject to any amendment of the pleadings. It is not appropriate to answer the second part of the question.
Question 2: Is that fact to be determined solely upon material which is within judicial knowledge?
Answer: No.
Question 3: Does s. 92 prevent the application of the Wheat Industry Stabilization Act, 1974 (N.S.W.), as amended, and the Wheat Industry Stabilization Act, 1974 (Q.), as amended, or either of them to the transaction particularized in par. 7 of the statement of claim?
Answer: Not appropriate to answer.
Leave to the defendant to amend its defence as it may be advised.
Leave to the plaintiffs to make any consequential amendments to the statement of claim.
No order as to costs.
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