Airlines of NSW Pty Ltd v New South Wales

Airlines of NSW Pty Ltd v New South Wales - [1965] HCA 3 - HCA 1965 case summary — Zoe

[26]

To say this, however, is not to deny that there are occasions - and the safety procedures designed to make inter-State and foreign trade and commerce, as carried on by air transport, secure, are a ready instance - when it can be no objection to the validity of the Commonwealth law that it operates to include in its sweep intra-State activities, occasions when, for example, the particular subject matter of the law and the circumstances surrounding its operation require that if the Commonwealth law is to be effective as to inter-State or foreign trade and commerce that law must operate indifferently over the whole area of the relevant activity, whether it be intra-State or inter-State. But this involves no change in the subject matter of Commonwealth power. The power is not enlarged by circumstance though what may be validly done in its exercise may be more extensive because of the factual situation. Some decisions of the Supreme Court of the United States on close examination really place the matter in relation to the commerce power of the Congress, no higher. The total validity of a law which operates on more than inter-State or foreign trade and commerce and which is sought to be justified by reference to s. 51 (i.) of the Constitution, will be determined by resolving the question whether the law as so operating is in substance a law with respect to inter-State or foreign trade. This is indicated in various decisions of this Court and very clearly by Dixon C.J. in Wragg v. State of New South Wales [1] where his Honour says: "The distinction which is drawn between inter-State trade and the domestic trade of a State for the purpose of the power conferred upon the Parliament by s. 51 (i.) to make laws with respect to trade and commerce with other countries and among the States may well be considered artificial and unsuitable to modern times. But it is a distinction adopted by the Constitution and it must be observed however much inter-dependence may now exist between the two divisions of trade and commerce which the Constitution thus distinguishes. A legislative power, however, with respect to any subject matter contains within itself authority over whatever is incidental to the subject matter of the power and enables the legislature to include within laws made in pursuance of the power provisions which can only be justified as ancillary or incidental. But even in the application of this principle to the grant of legislative power made by s. 51 (i.) the distinction which the Constitution makes between the two branches of trade and commerce must be maintained. Its existence makes impossible any operation of the incidental power which would obliterate the distinction" [1] .

[79]

I now turn to an aspect of the system of licensing which is to my mind of great importance in this case. It may well be that in some situations, authorities having power to secure the safety of the air will be satisfied to endeavour to achieve their purpose by a series of prohibitions, either absolute or qualified. But the view may reasonably be held that because of the high penalties to be paid for unsafe or inefficient flight and of the discouragement to commerce of air accidents and delays, it is not enough to rely upon a series of substantive rules or prohibitions even though severe penalties are provided. Although the safety rules and procedure made and laid down with respect to air navigation may be most detailed and cover as many situations as can be conceived as likely to arise, there must remain a substantial area within which the well-intentioned judgment of the individual airline operator and his capacity as such will be at least important if not at times critical to the safety, efficiency and regularity of the air operations. In Div. 2 of Pt XIII will be found a number of instances in which matters of safety, mostly matters of degree, are left to the judgment of the airline operator. The standard of selection of personnel which carry on, and of the organization which supports, the air operations, the will, as well as the ability to observe the Regulations, are all factors which directly and intimately bear on the safety of the air operations of the operator, and therefore upon all the air operations upon which those operations inevitably have an impact. The marshalling of all those various elements in the interest of the safety of the air is effected by the system of licensing, in which the suitability of the operator as well as that of the aircraft for use by him on the specified routes is considered from the point of view of the safety, efficiency and regularity of air navigation generally. The system of licensing under Pt XIII of the Regulations is thus, in my opinion, itself a substantial safety procedure, and not merely a means of ensuring the observance of the other substantial safety rules and procedures which the Regulations lay down. Because of the inevitable impact of unsafe, inefficient or irregular air operations of an intra-State airline operator upon the safety of the air for inter-State and foreign trade and commerce by air, and upon the development of that trade and commerce, the Commonwealth system of licensing, as itself a safety procedure as well as being a means of ensuring observance of other safety measures, in my opinion, can validly include in its operation intra-State commercial air transport operations and operators. A prohibition coupled with a licensing system in which, except as to inter-State commercial air operations, the Director-General has a discretion to grant or refuse a licence, having in mind only the considerations of the safety, efficiency and regularity of air navigation, is in my opinion clearly within Commonwealth power.

[81]

In my opinion, the Commonwealth has not only power to make the regulations setting up this system of airline licences, but it has the power to make those regulations the only law to operate with respect to the licensing or authorizing of aircraft for use in public air transport operations and in my opinion it has done so. Indeed, it would in my view be a strange conclusion that in setting up this licensing system as itself a safety measure, the Commonwealth merely intended to reserve to itself a veto on the choice by the State of the aircraft to be used by a particular operator in air operations, to make itself merely the final as distinct from the sole and exclusive authority to determine what aircraft should be used in public air transport operations. If the characteristics of aircraft and the identity of the operator and their inter-relationship are themselves safety factors in relation to the use of the air by inter-State and foreign trade and commerce, it would be incongruous in my view that the suitability of the aircraft and the identity of the operator should be established as the result of compromise and accommodation between administrators subject to different ministerial control, one of whom is not necessarily concerned with the safety of the air. It may be thought that the State has matters to be considered in the choice of the airline operator and of the aircraft other than those connected with the safety of the air and that to allow the Commonwealth to be the exclusive authority to determine who shall operate and with what aircraft upon intra-State air routes, upon air safety considerations alone, is to leave a void with no legislative or administrative authority to deal with those other considerations or purposes to which the State may wish to address its legislation. But, as I have pointed out, if the Commonwealth has expressed its intention to be the sole authority in the licensing of the use of aircraft in air operations in Australia, there is no room for any State law on that subject. If the State desires to further its policies it must, in my opinion, find some other legislative field than the licensing of aircraft for use in air operations.

[84]

Those views have been expressed on the footing that only the external affairs power or the inter-State and foreign trade and commerce power could be regarded as supporting such of the said regulations as I think are valid. But the plaintiff seeks to support its submissions by what its counsel called a combination of powers - powers which I earlier enumerated in referring to the plaintiff's submissions. But, in my opinion, the plaintiff's argument obtained no strength or added persuasion by this reliance upon more than one power to support all or any one or more of the said regulations in their operation upon intra-State air navigation. A statute or regulation with but one operation may be supported by several powers because it may at the same time be a law with respect to more than one of the subjects upon which the Commonwealth may legislate. But these powers, the incidental power (xxxix.) apart, may not be combined so as to produce a power to do more than what is authorized by that power which will sustain the most extensive operation of the law. Accordingly, whilst I think there are occasions on which a statute or regulation may be supported alternatively on one or more of the paragraphs of s. 51, I do not think that any such legislative provision, if unsupported by any of those powers, can be supported by some supposed combination or aggregation of those powers. Of course, a statutory provision, be it Act or regulation, may, though in a sense a single law, have an operation in several aspects, e.g. reg. 198 in relation to territorial airlines, inter-State airlines etc. In such a case, it may well be that in relation to the several aspects of its operation each can be supported by a different power: and, regarded as a whole, its validity may be said to be supported by a number of those powers. But that can only be said because the regulation in the various aspects of its operation draws support from the various powers. It does not mean that in any single aspect of the operation or in the total operation of the statute or regulation greater power is derived from a combination of the several powers. In the present case, in my opinion, none of the said regulations obtains any support for its operation in relation to intra-State commercial air navigation in any way relevant to the present questions from a supposed combination of the powers enumerated by the plaintiff or from a combination of any two or more of them, nor from any one of those powers, except the two with which I have dealt.

[94]

I refer to three articles of the Convention which are as follows. Article 12 is in these terms: "Each contracting State undertakes to adopt measures to insure that every aircraft flying over or manoeuvring within its territory and that every aircraft carrying its nationality mark, wherever such aircraft may be, shall comply with the rules and regulations relating to the flight and manoeuvre of aircraft there in force. Each contracting State undertakes to keep its own regulations in these respects uniform, to the greatest possible extent, with those established from time to time under this Convention. Over the high seas, the rules in force shall be those established under this Convention. Each contracting State undertakes to insure the prosecution of all persons violating the regulations applicable." Article 28: "Each contracting State undertakes, so far as it may find practicable to: (a) Provide, in its territory, airports, radio services, meteorological services and other air navigation facilities to facilitate international air navigation, in accordance with the standards and practices recommended or established from time to time, pursuant to this Convention; (b) Adopt and put into operation the appropriate standard systems of communications procedure, codes, markings, signals, lighting and other operational practices and rules which may be recommended or established from time to time, pursuant to this Convention; (c) Collaborate in international measures to secure the publication of aeronautical maps and charts in accordance with standards which may be recommended or established from time to time, pursuant to this Convention." Article 37 relates to the adoption of international standards and procedures. It says: "Each contracting State undertakes to collaborate in securing the highest practicable degree of uniformity in regulations, standards, procedures, and organization in relation to aircraft, personnel, airways and auxiliary services in all matters in which such uniformity will facilitate and improve air navigation. To this end the International Civil Aviation Organization shall adopt and amend from time to time, as may be necessary, international standards and recommended practices and procedures dealing with: (a) Communications systems and air navigation aids, including ground marking; (b) Characteristics of airports and landing areas; (c) Rules of the air and air traffic control practices; (d) Licensing of operating and mechanical personnel; (e) Airworthiness of aircraft; (f) Registration and indentification of aircraft; (g) Collection and exchange of meteorological information; (h) Log books; (i) Aeronautical maps and charts; (j) Customs and immigration procedures; (k) Aircraft in distress and investigation of accident; and such other matters concerned with the safety, regularity, and efficiency of air navigation as may from time to time appear appropriate."

[102]

Regulations 198, 199 and 200B are three of a group of regulations of which reg. 195 is the first. Two regulations concerned with the safety of aircraft used in any of these operations precede reg. 195. This regulation is as follows: "Aircraft engaged in private operations shall comply with the provisions of these Regulations and such additional conditions as the Director-General from time to time directs in the interests of safety." Regulation 196 prohibits the use of an aircraft in aerial work operations without an "aerial work licence". Regulation 197 does the same thing in the case of charter operations. In that case the operator is required to have a "charter licence". Regulation 198 is the same sort of provision as reg. 196 or 197 (1). The words of reg. 198 are: "An aircraft shall not be used in regular public transport operations except under the authority of and in accordance with a licence (in these Regulations referred to as an "airline licence") issued by the Director-General." Regulation 199 (1) provides the procedure for making an application to the Director-General for a licence of one of these three kinds. Sub-regulation (2) applies where the proposed service is inter-State. By reg. 202 this means "a service by way of, or in the course of, trade and commerce among the States" (see Statutory Rules 1964, No. 128, reg. 11). The rest of reg. 199 is of immediate concern: "(3) Subject to the next succeeding sub-regulation, where the proposed service is other than an interstate service, the Director-General may issue an aerial work, charter or airline licence, as the case requires, upon such conditions, in addition to compliance with these Regulations, as the Director-General considers necessary or may refuse to issue a licence. (4) Where the proposed service does not involve air navigation of a kind specified in paragraph (a), (b), (c), (d) or (da) of sub-regulation (1) of regulation 6 of these Regulations, the Director-General shall, on and after the date fixed for the purposes of paragraph (f) of that sub-regulation, in deciding whether or not to grant an aerial work, charter or airline licence, and in determining the conditions upon which the licence is to be granted, have regard to matters concerned with the safety, regularity and efficiency of air navigation and to no other matters." The exclusion of the paragraphs which are mentioned confines the direction given in sub-reg. (4) to applications for licences to use aircraft in services which par. (e) or (f) of reg. 6 (1) cover, and therefore air transport operations within the limits of a single State. Sub-regulation (4) was introduced into reg. 199 by Statutory Rules 1964, No. 128, reg. 6.

[109]

Regulation 200B so far as it applies to an airline licence is not merely a repetition in effect of reg. 198, or for that matter of reg. 196 or 197 (1) so far as it applies to an aerial work or charter licence. In terms reg. 200B purports to give to each of these three kinds of licences the force of an authority to conduct the air service operations to which they respectively apply. It is contended for the plaintiff that reg. 200B validly applies to intra-State air transport because in order to make the licensing of aircraft effective for the purposes of safety, regularity and efficiency, it is necessary to exclude State licensing law. If reg. 200B applies to intra-State air transport it would be the paramount law. This contention is made in view of the amendment of reg. 6 (1) by adding par. (f) which, as said above, brings all intra-State air navigation within the range of the Regulations. The insertion of this paragraph does not, of course, determine the question of the validity of the application of any regulation to intra-State air navigation. But it removes a difficulty in the way of contending that State and Commonwealth laws providing for the licensing of aircraft used in commercial transactions are inconsistent. In my opinion reg. 200B so far as it purports to apply to air transport between terminals in a single State exceeds the legislative power of the Commonwealth. The result which this regulation would accomplish and which it is the intention of the regulation to accomplish is to give the holder of a licence the power and the right to carry on the service within a single State, even though it is not part of or connected with an inter-State service. Regulation 200B is not a law with respect to inter-State trade and commerce. It is a law with respect to intra-State trade and commerce. The regulation cannot be supported in its application to intra-State air transport by s. 51 (i.) of the Constitution. Therefore it is beyond the power conferred by s. 26 (1) (d) of the Air Navigation Act on the Executive to make regulations. Further, reg. 200B is not, in my opinion, within the power conferred by s. 26 (1) (b), the only other provision under which regulations may be made to which this regulation could possibly be referred. No provision appears in the Convention which would support reg. 200B. The pith and substance of this regulation is the setting up or establishment of air transport services. The Commonwealth has no obligation under the Convention to make laws for that purpose. It is within the residuary powers of a State to make laws for that purpose operating within its own territory. I would answer "No" to the question asked about reg. 200B.

[112]

The Court decided in Airlines of New South Wales Pty. Ltd. v. New South Wales [1] that the provisions of the State Transport (Co-ordination) Act, 1931-1956 of New South Wales relating to the licensing of aircraft were not inconsistent with reg. 198 and 199 of the Air Navigation Regulations. The Air Transport Act, 1964 eliminates the licensing of aircraft from that Act and amends the Air Navigation Act, 1938-1947 of New South Wales to make its references to State legislation harmonious with this change. Regulation 198 is in the same terms as it was when the case was decided. Since then amendments were made to the Commonwealth Regulations including the insertion of par. (f) in reg. 6 (1), the insertion of sub-reg. (4) in reg. 199 and the addition of reg. 200B. The Air Transport Act, 1964 was passed after the promulgation of Statutory Rule 1964, No. 128, which effected these and other amendments. The Act supersedes the licensing provisions of the State Transport (Co-ordination) Act. It is sufficient to refer to s. 2 (1) - definition of "carry" - and ss. 6 and 7 to ascertain the operation of the Air Transport Act, 1964. It deals only with the commercial carriage by aircraft of goods and services between terminals in New South Wales. Any such operation is prohibited unless the aircraft engaging in it is licensed under the Act and the carrier operating the service is the holder of the licence. The grant or refusal of a licence is at the discretion of the licensing authority. The exercise of the discretion is controlled by the requirement in s. 6 (3) which requires that in deciding whether to grant or refuse the application for the licence he must confine his attention to the following matters: "(a) the needs, in relation to air transport services, of the public of New South Wales as a whole and of the public of any area or district to be served by the route or routes, or by any of the routes, specified in the application for the license; (b) the extent, if any, to which the needs of the public of New South Wales as a whole or of the public of any area or district to be served by the route or routes, or by any of the routes, specified in the application for the license are already, or are likely to be, served by public air transport services; (c) the allocation of routes for public air transport services between persons holding or applying for licenses under this Act so as to foster as far as possible the existence of more than one airline operating in New South Wales capable of providing adequate and reasonable public air transport services within New South Wales and so as to discourage the development of any monopoly of public air transport services within New South Wales; (d) where the applicant is an individual, his character and suitability and fitness to hold the license applied for and, where the applicant is a corporation, the character of the persons responsible for the management or conduct of the corporation and the suitability and fitness of the corporation to hold the license applied for; (e) the extent to which the area or district to be served by the route or routes, or any of the routes, specified in the application for the license are already, or are likely to be, served by forms of public transport other than public air transport and the effect that the public air transport services proposed to be conducted by the applicant for the license over that route or those routes may have upon those other forms of transport." Section 4 of this State Act eliminates from the State Transport (Co-ordination) Act as amended all references to aircraft and the Air Navigation Regulations. The Act departs completely from the field of safety regulation. Attention should be paid to the discussion of certain provisions of the State Transport (Co-ordination) Act by Menzies J. in Airlines of New South Wales Pty. Ltd. v. New South Wales [1] . Nothing in the Air Transport Act, 1964 even verges towards the subject of that discussion or anything of the kind. I think that reg. 198 and the provisions of reg. 199 applying in relation to intra-State air transport services are more effectively confined within the field of safety than they were before sub-reg. (4) was added to reg. 199. Section 18 of the Air Transport Act, 1964 should be noticed. It says: "Nothing in this Act relieves a person of any obligation to hold or effect any license or registration which he is otherwise by law required to hold or effect." Taking the words of the Air Transport Act, 1964 and of reg. 198, it appears that where the former requires an aircraft to be licensed, the latter does also, and vice versa. With reg. 200B omitted, the question of inconsistency to be decided in the present case is much the same as that decided in Airlines of New South Wales Pty. Ltd. v. New South Wales [1] . The introduction of par. (f) into reg. 6 (1) and of sub-reg. (4) into reg. 199 does not make such a difference that the decision cannot be important in the present case. In my opinion it is a strong authority against the plaintiff on the question whether there is inconsistency between, on the one hand, the Air Transport Act, 1964 and, on the other, regs. 198 and 199, so far as these regulations relate to intra-State air transport services. There is no conflict between s. 3 of the Act and reg. 198 so far as it relates to intra-State services: nor between s. 6 of the Act and reg. 199 (4). The carriage of passengers or goods is the subject of the Act and of reg. 198 and 199. In my view there is this distinction between the Act and the regulations. The former is an economic control of public transport services enforced by licensing of the aircraft used in it on the principles laid down by s. 6: whereas the regulations are concerned only with the safety, regularity and efficiency of the flight of aircraft engaged in those and other transport operations. The licensing of an aircraft as a condition of its being lawfully used in transport operations is a devised method of enforcing regulations and orders pertaining to safety, regularity and efficiency. Having regard to the test of inconsistency laid down in Ex parte McLean [2] , I think that the question of inconsistency should be decided against the plaintiff.

[119]

As the Regulations stood at the time of the Court's earlier decision, regs. 198 and 199 did not apply to regular public transport operations generally within the territorial limits of a State. Their application was restricted by reg. 6 (1) to air navigation of certain specified descriptions, namely (a) international air navigation within Australian territory; (b) air navigation in relation to trade and commerce with other countries and among the States; (c) air navigation within the Territories; (d) air navigation to or from the Territories; and (e) air navigation in controlled air space which directly affected, or which might endanger, the safety of persons or aircraft engaged in a class of air navigation specified in pars. (a), (b) or (d) of this sub-regulation. As thus restricted in their application, regs. 198 and 199 were laws validly made under various heads of Commonwealth legislative power; but reg. 6 (1) has now been amended. Some of the amendments do not concern us in this case. A new par. (da) has been added, comprising air navigation in which a Commonwealth aircraft is engaged, and par. (e) has been extended to cover air navigation in controlled air space which directly affects or may endanger the safety of persons or aircraft engaged in air navigation in which a military aircraft is engaged. It is not in dispute that regs. 198 and 199 are valid in the extended application given to them by these amendments. But there is a further amendment. By the addition of a new par. (f) the Regulations have been made to apply as from 10th October 1964 to and in relation to all air navigation within Australian territory of a kind not specified in pars. (a), (b), (c), (d) or (da). (There are qualifications in respect of State aircraft and military aerodromes, but they need not be further adverted to). By force of reg. 6 (1) (f) the prohibition in reg. 198 must now be read as extending to the use of an aircraft in regular public transport operations which are wholly intra-State in character and, considered apart from any possible relevance its conduct may have to other air navigation, is not within any head of federal legislative power. In relation to such operations there are new provisions in regs. 199 (4), 200 (3), 200A (b), 201 (ab) and 203 (2) by which the Director-General, in deciding whether or not to grant, renew or cancel an airline licence, in determining the conditions upon which it is to be granted or renewed, in approving of a contract or arrangement for a person other than the licensee to operate the service, and in deciding whether to exempt a person from the necessity of obtaining an airline licence, shall have regard to matters concerned with the safety, regularity and efficiency of air navigation and to no other matters. The extension of the airline licensing system by these amendments is the first subject of challenge.

[125]

I pause to make the point that that and nothing else is the question. In The King v. Burgess; Ex parte Henry [1] both Latham C.J. and Dixon J. took their stand against the introduction into Australian constitutional law of some of the vague standards which at times have been accepted in relation to the reach of the commerce power under the Constitution of the United States and have resulted in a greatly diminished importance in that country of the distinction between inter-State and intra-State commerce. The course of American decision since 1936 has been away from some of the indefinite tests of validity (under the commerce power) to which Dixon J. referred in his quotations from American cases: [2] . The distinction is no longer held to be that which Hughes C.J. expressed in Schechter Poultry Corporation v. United States [3] , namely between direct and indirect effects of intra-State transactions upon inter-State commerce. But the principle remains that of the Shreveport Rate Cases [4] namely that federal intervention is constitutionally authorized because of "matters having such a close and substantial relation to interstate traffic that the control is essential or appropriate to the security of that traffic, to the efficiency of the interstate service, and to the maintenance of conditions under which interstate commerce may be conducted upon fair terms and without molestation or hindrance" [5] . Thus it is held, upon consideration of economic effects, that the reach of the commerce power extends to "those intra-State activities which in a substantial way interfere with or obstruct the exercise of the granted power": United States v. Wrightwood Dairy Co. [1] ; Wickard v. Filburn [2] . The doctrine rests on the premise that "in certain fact situations the federal government may find that regulation of purely local or intra-State commerce is "necessary or proper" to prevent injury to inter-State commerce": Polish National Alliance v. National Labour Relations Board [3] . In applying this doctrine the Supreme Court has "required clear findings" and has insisted upon "suitable regard to the principle that whenever the federal power is exerted within what would otherwise be the domain of state power, the justification of the exercise of the federal power must clearly appear": [4] . See also North American Co. v. Securities & Exchange Commission [5] . But this is doubtless because the Court has been alive to the width of the doctrine and the danger of its getting out of hand. As the Court itself said in Mandeville Island Farms v. American Crystal Sugar Co. [6] the Shreveport decision "substituted judgment as to practical impeding effects upon inter-State commerce for rubrics concerning its boundaries as the basic criterion of effective congressional action" [7] .

[131]

We must therefore answer the question before us in the light of the nature of air navigation as it exists as a phenomenon of life in Australia and its Territories at the present time. In respects which hardly need to be emphasized it is sui generis among methods of transport, and indeed among all forms of trade and commerce. The speed at which modern aircraft move through the skies; their constant liability to sudden and wide deviation in flight by reason of mechanical or human deficiencies, the vagaries of the weather, the behaviour of other aircraft and other causes; the multiplicity of flights required to satisfy the demands of modern life; the multiplicity and inter-relation of the routes to be served; all these matters and more combine to make air navigation in this country a complex of activities of such a kind that what happens at any given time and place in the course of an air operation may substantially, even dramatically, affect other air operations close or distant in time or space. The significance of distances, of geographical relationships, is necessarily different for a problem concerning air navigation than for a problem concerning any other form of transport. Moreover it must be kept in mind that while many examples of air navigation are within federal legislative power because they are themselves a form of commerce with other countries or among the States or because they are carried on within or into or out of Territories of the Commonwealth, or because they use as aerodromes places acquired by the Commonwealth for public purposes, many other examples of air navigation may be within federal legislative power because the purposes with which they are carried on are purposes incidental to matters over which such power extends. Purposes incidental to defence, or to postal services, or to the conduct of the public business of the Commonwealth (e.g., the conveyance of the Governor-General or of Ministers in the discharge of their official functions) provide obvious illustrations. It is probably true that there is no head of federal power to which the flying of aircraft may not be incidental, e.g., the use of aircraft by the Commonwealth Banking Corporation may no doubt be made a subject of federal legislation under s. 51 (xiii.) of the Constitution. With all this in mind, it is impossible to assume in advance that any impairment of the safety, regularity or efficiency of intra-State air navigation will leave unimpaired the safety, regularity and efficiency of the other departments into which air navigation may be divided for constitutional purposes. It follows from these considerations, in my opinion, that a federal law which provides a method of controlling regular public transport services by air with regard only to the safety, regularity and efficiency of air navigation is a law which operates to protect against real possibilities of physical interference the actual carrying on of air navigation, and therefore is, in every application that it has, a law "with respect to" such air navigation as is within federal power, and none the less so because it is also legislation with respect to that intra-State air navigation which is not within the power.

[132]

In my opinion regs. 198 and 199 are for these reasons valid laws of the Commonwealth, even in their application to regular public transport operations conducted wholly within the borders of a single State. Their validity was supported in argument by reference to the external affairs power under s. 51 (xxix.) of the Constitution, on the ground that they give effect to, or in some other way are justified by, art. 37 of the Chicago Convention. The draftsman no doubt borrowed from that source the collocation of words "safety, regularity and efficiency of air navigation", and possibly he did so in the hope that if all else failed the external affairs power might sustain the legislation. If so, the hope was misconceived, in my opinion, for the only obligation of the Commonwealth under art. 37 is "to collaborate (with the other contracting States) in securing the highest practicable degree of uniformity in regulations, standards, procedures, and organization in relation to aircraft, personnel, airways and auxiliary services in all matters in which such uniformity will facilitate and improve air navigation". To this end the Civil Aviation Organization is required to adopt international standards and recommended practices and procedures dealing with a number of matters not material for present consideration, together with such other "matters concerned with the safety, regularity and efficiency of air navigation" as may from time to time appear appropriate. In relation to the general topics of "aircraft, personnel, airways" (which plainly means air routes) "and auxiliary services", a number of annexes have been adopted by the Organization; and, while the suggestion made on behalf of the plaintiff that the Convention creates "rights and powers" as well as international obligations cannot be countenanced for a moment, I do not doubt that federal legislation giving effect to any of the annexes in Australia should be upheld under the external affairs power as forming part of the Commonwealth's promised collaboration. But none of the annexes deals with the subject of regular public transport operations as a separate topic. They contain much concerning the airworthiness of aircraft, the manner of their operation, the licensing of personnel and other matters connected with the flying of aircraft; and the Air Navigation Regulations make their own elaborate provisions upon such matters elsewhere than in regs. 198 and 199. These two regulations pass from the topics dealt with in the annexes to a matter as to which no annex sets up a standard of uniformity, and upon which, so far as we have any reason to believe, no international standard exists and no question of attaining uniformity has ever arisen. It is true that in relation to the earlier Convention of Paris the Privy Council said in In re the Regulation and Control of Aeronautics in Canada [1] that the Convention covered almost every conceivable matter relating to aerial navigation; and I should offer no objection to a similar statement of fact, as carefully qualified, concerning the Chicago Convention and the Annexes thereto. But I cannot see that the statement would shed light upon any question of law. Again, it is true that in Airlines of New South Wales Pty. Ltd. v. New South Wales [2] , Dixon C.J. said that a study of the Convention suggests that obligations are placed upon the Commonwealth which extend over the whole territory of Australia, and that in almost all respects the legislative power which arises from the need of carrying out the Convention, given by s. 51 (xxix.) of the Constitution, would suffice "to support laws made with a complete disregard of the distinction between inter-State and intra-State trade" [3] . I agreed in that statement at the time, and I agree in it still. But it is misinterpreted when it is taken to mean that the laws which may be so supported include laws not directed to compliance with the Convention. It means no more than that laws implementing the Convention and applying throughout the Commonwealth may in almost all respects - perhaps one might say in all respects, subject to the restriction arising from s. 92 - be upheld under s. 51 (xxix.) notwithstanding that they apply indifferently to the inter-State and intra-State use of aircraft. But regs. 198 and 199 do not seem to me to carry the Commonwealth any distance at all towards discharging obligations incumbent upon it under the Convention.

[139]

As regards regs. 320A and 320B it seems to me beyond question that the suggested inconsistency does not exist. These regulations are directed, the one to landing at and taking off from aerodromes, airstrips or the like which have been acquired by the Commonwealth for public purposes, and the other to the control of flying in controlled air space, in the interests of the safety of persons and aircraft engaged in air navigation of certain kinds to which federal legislative power extends. The Air Transport Act of the State is not directed to either topic. It provides for a licensing system for the intra-State carrying of passengers or goods by aircraft, the purpose of the system being broadly, as appears from s. 6, to regulate such carrying by reference to public needs, particularly as regards routes, the allocations of routes between licensees so as to foster the existence of competition between airlines and discourage monopoly of public air transport services within the State, the character, suitability and fitness of an applicant to hold the licence applied for, the extent to which areas, districts or routes are or are likely to be served by other forms of public transport, and the effect the air services may have upon other forms of transport. These matters are altogether different from those to which regs. 320A and 320B relate. It is true that as a practical result of the co-existence of these regulations and the State Act a person who desires to operate a regular public air transport service which is wholly intra-State must possess and conform to Commonwealth licences under regs. 320 and 320B in order that he may use Commonwealth aerodromes or airstrips and fly aircraft in controlled air space, and must also possess and conform to a State licence for his aircraft extending to the route he wishes to adopt. If either the federal licences or the State licence be refused him the result may be that a particular intra-State route is without an air service. In the plaintiff's argument this situation was described as one of deadlock, and it is said that thereby the inconsistency of the two sets of provisions is demonstrated. In truth all that is demonstrated is that unless and until the federal and State authorities grant their respective licences to the one operator a degree of public inconvenience will exist. While this may be regretted, it leads to no legal conclusion.

[142]

In recent litigation between the appellant and the respondent (Airlines of New South Wales Pty. Ltd v. New South Wales [1] ) it was held by this Court that the provisions of the State Transport (Co-ordination) Act, 1931-1956, which, at that time, operated, in effect, to prohibit the use of any aircraft for the carriage of passengers or goods for hire between places within New South Wales except in accordance with the terms of a licence issued under the Act, were not in conflict with the provisions of the Air Navigation Act 1920-1961 of the Commonwealth or with the Regulations made thereunder. The relevant provisions of both sets of legislation as they stood at that time are fully referred to in the report of the case and I do not propose to repeat them. But it is of importance to observe that at that time regs. 198 and 199 of the Air Navigation Regulations applied only to and in relation to air navigation falling within the categories specified in reg. 6. These categories did not include intra-State air navigation. Nevertheless, the category specified in par. (e) was "air navigation in controlled air space which directly affects, or which may endanger, the safety of persons or aircraft engaged in a class of air navigation specified in paragraphs (a), (b) or (d) of this sub-regulation". Accordingly the Regulations applied to intra-State air navigation in so far as it constituted air navigation in controlled air space. As a consequence the State and federal legislation under consideration were, for the reasons stated by the members of the Court, seen as provisions complementary to and not in conflict with one another, "the Commonwealth Regulations operating in the various fields denoted by reg. 6 and the State legislation adopting the same rules in relation to aerial navigation not falling within the ambit of that regulation". On this view there was, in particular, no conflict between the relevant State legislation and regs. 198 and 199 which had nothing to say with respect to intra-State air navigation outside controlled air space. I should add that on that occasion no suggestion was made that these regulations were not wholly valid.

[145]

By the later Act it is provided (s. 3) that a person shall not carry by aircraft from a place in New South Wales to another place in New South Wales any passengers or goods unless the aircraft is licensed under the Act, unless that person is the holder of the licence and, where the licence was granted in respect of a route or routes, unless the route over which the passengers or goods are so carried is such a route. Section 5 provides for the manner in which applications for licences may be made and the Commissioner for Motor Transport is authorized to grant or refuse any application for a licence. In deciding whether to grant or refuse a licence and the conditions, if any, subject to which it should be granted, the Commissioner is directed to have regard exclusively to a number of specified matters. These are: (a) the needs, in relation to air transport services, of the public of New South Wales as a whole and of the public of any area or district to be served by the route or routes, or by any of the routes, specified in the application for the licence; (b) the extent, if any, to which the needs of the public of New South Wales as a whole or of the public of any area or district to be served by the route or routes, or by any of the routes, specified in the application for the licence are already, or are likely to be, served by public air transport services; (c) the allocation of routes for public air transport services between persons holding or applying for licences under the Act so as to foster as far as possible the existence of more than one airline operating in New South Wales capable of providing adequate and reasonable public air transport services within New South Wales and so as to discourage the development of any monopoly of public air transport services within New South Wales; (d) where the applicant is an individual, his character and suitability and fitness to hold the licence applied for and, where the applicant is a corporation, the character of the person responsible for the management or conduct of the corporation and the suitability and fitness of the corporation to hold the licence applied for; and (e) the extent to which the area or district to be served by the route or routes, or any of the routes, specified in the application for the licence are already, or are likely to be, served by forms of public transport other than public air transport and the effect that the public air transport services proposed to be conducted by the applicant for the licence over that route or those routes may have upon those other forms of transport (s. 6). It will be seen that the function of the Commissioner in deciding whether to grant or refuse an application is to be exercised having regard to considerations concerned with the rationalization of transport services within the State. Naturally enough, since the form of control adopted is concerned only with these matters and not with the multitudinous matters with which the Air Navigation Regulations deal, the grant of a licence under the Act does not relieve a licensee of any obligation to hold or effect any licence or registration which he is otherwise by law required to hold or effect (s. 18). But if reg. 200B is wholly valid then there is a clear inconsistency between its provisions and those of the State Act. The primary question for our consideration, as I see it, is therefore whether the Commonwealth has legislative power to enact a law having the effect of granting to the Director-General exclusive authority to sanction the initiation of regular transport operations entirely within the limits of any one State.

[147]

The extent of the legislative power conferred upon the Commonwealth Parliament by s. 51 (xxix.) was the subject of considerable discussion in The King v. Burgess; Ex parte Henry [1] , in relation to the Paris Convention of 1919 and that case is clear authority for the proposition that pursuant to that head of power Parliament may make laws to give effect to the international obligations assumed by the Commonwealth by or pursuant to the Convention on International Civil Aviation concluded at Chicago on 7th December 1944. As Starke J. said: "A law providing for the carrying out and giving effect to an international convention of this character concerns Australia's relations and intercourse with other Powers or States and the rights and obligations which result, and is thus a law for the peace, order and good government of the Commonwealth with respect to external affairs" [1] , whilst Dixon J. (as he then was) said: "In my opinion legislation to enforce and carry out the convention falls within the power to make laws with respect to external affairs" [2] . Other members of the Court expressed like views. But the same case is equally clear authority for the proposition that, in relation to legislation for giving effect to an international convention of this character, the legislative power extends no further than to authorize legislation necessary to enable the Commonwealth to fulfil its obligations thereunder or reasonably incidental thereto. In my view reg. 200B, so far as it purports to apply to intra-State airline operations, is not legislation of this character. The provisions of the Convention are referred to in detail by my brother Owen and it is unnecessary that I should undertake this task; it is, I think, sufficient to say that consideration of its many articles and of the various annexes relating to international standards and recommended practices discloses no grounds upon which it can be validly asserted that it is in any way necessary for giving effect to the Convention that the Commonwealth should assume, to the exclusion of the States, authority to sanction the initiation of intra-State airline operations. It may, no doubt, assume control of intra-State air navigation to the extent necessary to enable it to fulfil its obligations under the Convention such as, for example, ensuring that every aircraft flying over or manoeuvring within its territory shall comply with the rules and regulations relating to the flight and manoeuvre of aircraft there in force (art. 12), or for adopting and putting into operation the appropriate standard systems of communications procedure, codes, markings, signals, lighting and other operational practices and rules which may be recommended or established from time to time pursuant to the convention (art. 28). But it is impossible to say that in order to fulfil obligations such as these it is necessary that the Commonwealth should assume the exclusive right to authorize the initiation of intra-State air transport operations and, in my view, reg. 200B, in so far as it relates to such operations, cannot be said to be a law with respect to external affairs.

[150]

These considerations are also relevant to and, in my view, dispose of the plaintiff's contention that reg. 200B is wholly justifiable as a law with respect to trade and commerce with other countries and among the States unless, as we were invited to do we adopt to the fullest extent the United States doctrine based upon what has been somewhat loosely called the "commingling" of inter-State and intra-State trade. But the doctrine was emphatically rejected by this Court in The King v. Burgess; Ex parte Henry [1] . Nevertheless, it is without doubt that as Latham C.J. said in that case that it may be shown "in respect of a particular subject-matter that the intermingling of foreign and inter-State trade and commerce with intra-State trade and commerce was such that it was impossible for the Commonwealth Parliament to regulate the former without also directly regulating the latter" [1] . Much the same thing was said by Evatt and McTiernan JJ. - "there may be occasions when parts of intra-State aviation will be seen to occupy so direct and proximate a relationship to inter-State aviation that the agents and instruments of the former will be drawn within the ambit of the federal power, for otherwise the particular Commonwealth regulation of inter-State commerce would be entirely frustrated and nullified" [2] . These propositions the defendant rightly concedes. But it is asserted, and I think rightly, that they do not provide any justification for reg. 200B in so far as it purports to authorize the Director-General exclusively to sanction the initiation of intra-State airline operations. The assumption of such an authority has no real relationship to the regulation of international and inter-State air operations and it is impossible to say that without the power to do this regulation by the Commonwealth of air navigation within the latter categories would be frustrated or nullified, or, for that matter, in any way adversely affected. That being so reg. 200B, in so far as it extends to intra-State air navigation, cannot be justified as a law with respect to trade and commerce with other countries and among the States. This, however, in no way denies the right of the Commonwealth under this head of power to establish rules to be observed generally and uniformly where, having regard to the safety and efficiency of overseas and inter-State air navigation, it is necessary to do so.

[152]

At this stage it is necessary to notice a subsidiary argument advanced on behalf of the plaintiff. As I understand the argument it asserted, first of all, that it was permissible for the Commonwealth, as a means for securing observance of the general body of the Regulations, to erect a licensing system for airline operators. Consequently, it was said that reg. 198, which provides that an aircraft shall not be used in regular public transport operations except under the authority of and in accordance with a licence issued by the Director-General, is wholly valid. Further it was asserted that reg. 199 (4) which provides for the issue of licences in the case of intra-State airline operations is also valid. But at this stage the argument takes a curious turn. If, it is said, it be permissible to prohibit such operations without a licence and if it be permissible for the Commonwealth to provide for the issue of licences, then the licence, when issued, must constitute authority for the holder to engage in such operations. This being so, it is said that reg. 200B adds nothing to what is implicit in regs. 198 and 199. But in cases where, as in this case, the question is as to the extent of Commonwealth legislative power, the argument is fallacious in the extreme. It is one thing for the Commonwealth, by an appropriate provision, to forbid intra-State operations without a licence as a legitimate method of securing observance of the general body of Regulations and it is another for the Commonwealth to assume exclusive authority to permit the initiation of such operations. The first may, perhaps, appear as a provision incidental to the main body of the Regulations but the latter cannot be so justified. A simple illustration will suffice to make the point. The Beer Excise Act 1901-1950 is a law of the Commonwealth enacted under the power to make laws with respect to taxation. By s. 8 it is provided that no person shall make beer except pursuant to the Act, nor unless he is licensed to do so under the Act. Applicants for licences are required to give security for compliance with the Act and, in terms, the form of licence prescribed by the Act states that the holder "is hereby licensed to make Beer pursuant to the Beer Excise Act " to a specified quantity in a specified brewery and for a certain period. But it cannot be suggested that the Parliament of the Commonwealth can under its power to make laws with respect to taxation assume an exclusive authority to authorize brewing in the various States. Nor, could it be suggested, that there is any conflict between those provisions and s. 99 of the Liquor Act, 1912 N.S.W. which impose penalties upon persons carrying on the trade or business of a brewer "without holding the proper licence under this Act". The truth of the matter is that the conditional prohibition in s. 8 of the Beer Excise Act is justifiable as a means of protecting the revenue and the grant of a licence does no more than take the licensee out of the operation of s. 8. To my mind, likewise, the grant of a licence under reg. 199 to use an aircraft in regular public transport operations exclusively within the limits of any one State cannot, having regard to the boundaries of Commonwealth legislative power, do more than take the licensee out of the operation of reg. 198 and, as I have already said, if the plaintiff's argument that there is implicit in them that which is expressed in reg. 200B, then they must, for the reasons already expressed, be regarded as invalid in so far as they purport to apply to such operations.

[155]

I have adverted to the proposition that the Commonwealth might by an appropriate provision forbid intra-State air transport operations without a licence as a legitimate method of securing observance of the general body of regulations. But the question arises whether regs. 198 and 199 are appropriate and justifiable provisions having regard to the extent of the legislative power to make laws with respect to external affairs and trade and commerce with other countries and among the States. Now what is it that these regulations purport to do in relation to such operations? I repeat what I said in the earlier case - "it should be observed that the only matter with which reg. 198 is concerned is the use of aircraft, which may otherwise be lawfully operated, for regular public transport operations. In other words, all that it purports to do is to prohibit the use of aircraft for the purpose of transporting members of the public or cargo in regular public transport operations". To my mind it is beyond doubt that neither head of power would justify an absolute and unqualified prohibition on the conduct of such operations solely within the limits of any one State. No doubt a prohibition upon the use of any aircraft unless it has been certified as airworthy or unless operated by licensed personnel would be entirely within power. Probably a prohibition such as that contained in reg. 193 - that an aircraft shall not be used in any class of operations unless the particular type of aircraft is authorized and approved for such use by the Director-General - is wholly valid and the requirements of reg. 194 relating to the minimum number of the operating crew of an aircraft are also validly prescribed. But to superimpose upon such provisions as these a prohibition on the use of an aircraft in regular transport operations solely within the limits of any one State relaxable only in the absolute discretion of the Director-General would be to travel outside the limits of constitutional power. Of course, this is not what regs. 198 and 199 do. The discretion of the Director-General in the case of an application for a licence to use an aircraft in such operations is to be exercised having "regard to matters concerned with the safety, regularity and efficiency of air navigation and to no other matters". The expression "safety, regularity and efficiency of air navigation" seems to have been taken directly from the concluding words of art. 37 of the Convention where it operates in conjunction with the preceding eleven specified subject-matters to define the scope within which the International Civil Aviation Organization is to adopt international standards and recommended practices and procedures and its use in reg. 199 may represent a studied, though inept, attempt to produce a provision justified by the terms of the convention. But the obligation imposed upon the contracting parties by art. 37 is "to collaborate in securing the highest practical degree of uniformity in regulations, standards, procedures, and organization in relation to aircraft, personnel, airways and auxiliary services in all matters in which such uniformity will facilitate and improve air navigation" and the article does not impose, or even contemplate, an obligation upon any contracting State, independently, to take such steps as it thinks fit will tend to ensure the safety, regularity and efficiency of its domestic air navigation. The choice of the expression, designed as it is to regulate the exercise of the discretion reposed in the Director-General by reg. 199, was, therefore, unfortunate and it is to my mind clear that it is sufficiently wide to embrace considerations having no relation whatever to the obligations assumed by the Commonwealth under the Convention. In other words the conditional prohibition erected by reg. 198 does not appear as a provision designed merely to secure observance of the general body of the Regulations and, therefore, as ancillary to the fulfilment of the Commonwealth's obligations under the convention but as a prohibition from which there may be no escape because of matters quite unrelated to those obligations.

[161]

The central question now to be decided is whether the Commonwealth Air Navigation Regulations - as amended since the decision of this Court in the earlier case of Airlines of New South Wales Pty. Ltd. v. New South Wales [1] - purporting, as they now do, to extend to intra-State air operations, are valid and leave any room for concurrent State control of such operations. The point of conflict is the licensing of operations to use aircraft in regular intra-State services for the carriage of passengers or goods for reward, and the plaintiff's contention in the action is that, because it holds, what I may call, a Commonwealth licence to use aircraft in such a service upon the route between Sydney and Dubbo, the Air Transport Act, 1964 N.S.W., which was passed after the amendment of the Commonwealth Regulations, does not make unlawful its licensed operations because there is inconsistency between the Act and the Regulations which renders the prohibition now to be mentioned inoperative. The State Act, under the sanction of heavy penalties, prohibits a person from the carriage by aircraft of passengers or goods for reward or in the course of business from one place in New South Wales to another place in New South Wales unless (a) the aircraft is licensed under the Act, (b) the carrier is the holder of a licence, and (c) the carriage was over a route in respect of which the licence was granted. The questions before the Full Court, however, are not confined to the particular conflict about the Sydney-Dubbo route and it would be unduly restrictive to do as Mr. Menhennitt argued in reply that we should and, in answering the general questions of law which arise in the action, to concentrate our attention upon the particular features of that conflict. The first question is "whether the provisions of reg. 6, 198, 199, 200B, 320A and 320B of the Air Navigation Regulations, in so far as they purport to relate to regular public transport operations (as defined by the Regulations) solely within the State of New South Wales, are valid laws of the Commonwealth".

[167]

There was a good deal of argument about the meaning of reg. 198, but it seems to me that its effect, clearly enough, is to forbid the use of an aircraft in regular public transport operations except in accordance with a licence issued by the Director-General to an operator to conduct specified operations upon a specified route by the use of the particular aircraft. The licence is, therefore, to a particular aircraft. The licence is, therefore, to a particular person to use a particular aircraft in a particular service and, without such a licence, the use of the aircraft in regular public transport operations is forbidden. (I have used the convenient word "service", although it does not appear in reg. 198 itself, because the Regulations show that the flying of aircraft to carry passengers or goods for reward upon a particular route is regarded as the provision of a service: see, for instance regs. 197, 199, 199A, 202, 203 and 204). It follows that reg. 198 is not in any true sense an enabling provision; it is a restrictive provision whereby the use of aircraft, except in accordance with a licence, is forbidden. What would have been lawful without the regulation is, to the extent therein described, made unlawful. That this is the sense of reg. 198 is made apparent by contrast with reg. 200B, which is an enabling provision operating to authorize operations subject only to "the Act and these Regulations and to the other laws of the Commonwealth". This latter regulation, upon its face, purports to override any State law which would prohibit the operation which a licence authorizes. Regulation 199 is ancillary to reg. 198 and, if the latter cannot validly apply to intra-State regular public transport operations, the former, to the extent of sub-reg. (4) at least, would also fail. A separate argument, however, was directed against the validity of reg. 199 (4). It provided that, in determining an application for a licence for an intra-State service, the Director-General shall have regard to matters concerned with the safety, regularity and efficiency of air navigation and to no other matters. As a matter of construction, the air navigation here referred to is all air navigation within the scope of reg. 6. It was argued for the State of New South Wales that reg. 199 (4) is, upon this construction, invalid, because the safety, regularity and efficiency of the air-navigation involved in carrying on the intra-State service for which a licence is sought is a matter not excluded from consideration by the Director-General. Regulation 200B is, as I have already said, an enabling regulation and the question of its validity may well depend upon considerations other than those which govern the validity of reg. 198.

[171]

The Convention, as its title and preamble as well as its contents show, is an international agreement concerned with the development of international civil aviation, including the establishment of international air transport services. The "air navigation" dealt with in Pt I thereof is, therefore, a broad conception going far beyond what might be called "aeronautics". It covers, inter alia, the operation of international air services and all that is thereby incidentally involved, including such matters as cabotage, immigration and customs procedures and the prevention of spread of disease. The provisions of the Convention, moreover, are not confined to international civil aviation and international air transport services. A number of illustrations may be given. For instance, by art. 12 each contracting State undertakes "to adopt measures to insure that every aircraft flying over or manoeuvring within its territory shall comply with the rules and regulations relating to the flight and manoeuvre of aircraft there in force" and "to keep its own regulations in these respects uniform, to the greatest possible extent, with those established from time to time under this Convention". By art. 14 each contracting State agrees to take effective measures to prevent the spread of named diseases by means of air navigation. By art. 15 "Every airport in a contracting State which is open to public use by its national aircraft shall likewise be open under uniform conditions to the aircraft of all the other contracting States". By arts. 17 to 21 each contracting State undertakes to maintain a register of its national aircraft. By arts. 25 and 26 provision is made for assistance to aircraft in distress and for the investigation of accidents whether or not the aircraft concerned are engaged in international civil aviation. Among the undertakings in art. 28 is the provision of navigation facilities "to facilitate international air navigation, in accordance with the standards and practices recommended or established from time to time, pursuant to this Convention" and to adopt and enforce recommended practices and rules with regard to "the appropriate standard systems of communications procedure, codes, markings, signals, lighting and other operational practices". Article 37 is an article upon which the plaintiff and the Commonwealth placed a great deal of reliance and it must, I think, be set out in full: - "Each contracting State undertakes to collaborate in securing the highest practicable degree of uniformity in regulations, standards, procedures, and organization in relation to aircraft, personnel, airways and auxiliary services in all matters in which such uniformity will facilitate and improve air navigation. To this end the International Civil Aviation Organization shall adopt and amend from time to time, as may be necessary, international standards and recommended practices and procedures dealing with: (a) Communications systems and air navigation aids, including ground marking; (b) Characteristics of airports and landing areas; (c) Rules of the air and air traffic control practices; (d) Licensing of operating and mechanical personnel; (e) Airworthiness of aircraft; (f) Registration and identification of aircraft; (g) Collection and exchange of meteorological information; (h) Log books; (i) Aeronautical maps and charts; (j) Customs and immigration procedures; (k) Aircraft in distress and investigation of accident; and such other matters concerned with the safety, regularity, and efficiency of air navigation as may from time to time appear appropriate."

[174]

I have come to the conclusion that regs. 198 and 199 (4) are within the external affairs power of the Commonwealth because the licensing system that is thereby imposed is a means of fulfilling the Commonwealth's international obligations. It needs no labouring to make the point that any aircraft in the air may be a danger to neighbouring aircraft. This is more obvious in the approaches to and over a great metropolitan aerodrome than it is in the outback. Nevertheless, in days when aircraft fly great distances at high speeds upon routes which, through weather, interference or mischance they may not be able to keep, no one can fly safely unless all who fly are subjected to a common control. A grazier who flies from station to station; a prospecting company conducting an aerial survey in areas where no other aircraft is likely to be; every charterer who flies an unusual route; every superphosphate spreader in remote and hilly country, can, for instance, put aircraft engaged in international flight at risk. The Commonwealth is not bound to allow international air navigation to accept what, some might think, are but small risks. If, having regard to the Convention, the power under s. 51 (xxix.) would support a law forbidding any flight that may imperil international air navigation, as I think it does; and if any unauthorized intrusion into air space may imperil international air navigation, as I think it could; then all operators may be controlled, and to do something less and merely to forbid unauthorized operations of a particular character must be within power, for the greater includes the less. This is the more apparent when it is remembered that the character of the operations brought under control is such that the operations will normally take place where air traffic is dense - for example, all intra-State regular transport operations in the State of New South Wales use the aerodrome at Mascot, which is also used for overseas flights as well as for other air operations. It is for these reasons, as well as because of the generality of the Commonwealth's obligations with respect to air navigation as a whole, that I consider the Parliament may, under s. 51 (xxix.), make such a law as reg. 198.

[176]

The conclusion I have reached that the external affairs power supports regs. 198 and 199 is, I think, supported by the decision of the Privy Council in In re the Regulation and Control of Aeronautics in Canada, [1] . The Dominion of Canada has power under s. 132 of the British North America Act, 1867 to legislate for the performance by Canada of its obligations to other countries arising under treaties. When the Paris Convention of 1919 was in force, the Parliament of Canada made a law, the Aeronautics Act, which by s. 4 gave power for the regulation of aerial navigation over Canada, including the licensing of commercial services. Their Lordships decided that by virtue of s. 132 "it was competent for the Parliament of Canada to pass the Act and authorize the Regulation in question". The power of the Commonwealth Parliament under s. 51 (xxix.) of the Commonwealth Constitution is broader than the power of the Dominion's Parliament under s. 132 of the Canadian Constitution; the obligations of Australia under the Chicago Convention are more comprehensive than were those of Canada under the Paris Convention; accordingly, the decision of the Privy Council that s. 4 of the Aeronautics Act was valid under s. 132 (see In re the Regulation and Control of Radio Communication in Canada [2] ) supports the conclusion that regs. 198 and 199 are valid under s. 51 (xxix.). That this decision of the Privy Council provides guidance upon the question now before us was recognized by this Court in The King v. Burgess; Ex parte Henry [3] , per Latham C.J. [4] , per Starke J. [5] , and per Evatt and McTiernan JJ. [6] . In that case it was decided that so much of s. 4 of the Air Navigation Act 1920 as empowered the Governor-General to make regulations for carrying out and giving effect to the Paris Convention was a valid exercise of the external affairs power conferred upon the Commonwealth by s. 51 (xxix.) of the Constitution. In the later case of The King v. Poole; Ex parte Henry [No. 2] [1] , Evatt J. conveniently summarized the statements of four of the members of the Court in the earlier case relating to constitutional power. He said [2] : "There was no substantial difference in the tests suggested by the members of this Court for determining whether any particular regulation or series of regulations under the Commonwealth Air Navigation Act should be regarded as having been made for the purpose of carrying out or giving effect to the International Air Convention. According to Latham C.J., the regulation "must in substance be regulations for carrying out and giving effect to the Convention" [3] . There must, according to Dixon J. be "a faithful pursuit of the purpose, namely, a carrying out of the external obligation" [4] . The regulations must be "sufficiently stamped with the purpose of carrying out the terms of the Convention" (Evatt and McTiernan JJ. [5] )". This statement does not include what Starke J. said [6] , which is pertinent, notwithstanding that his Honour did differ from the other members of the Court in the application of the law, as stated, to the particular regulations. His statement of the law is one I would like to repeat for it, like the other statements summarized by Evatt J., indicates the width of the power conferred upon the Parliament of the Commonwealth by s. 51 (xxix.). His Honour said: "The validity of the regulation under which the appellant was charged remains for consideration. It must find its authority in the power to make regulations for the purpose of carrying out and giving effect to the Convention, inasmuch as the more extended power given by the Air Navigation Act cannot be sustained. The power is wide in terms, but its limits cannot be transcended. All means which are appropriate, and are adopted to the enforcement of the Convention and are not prohibited, or are not repugnant to or inconsistent with it, are within the power. The power must be construed liberally, and much must necessarily be left to the discretion of the contracting States in framing legislation, or otherwise giving effect to the Convention" [6] .

[178]

Before considering the further claim that reg. 200B is an exercise of the external affairs power, I want to refer to the other sources of legislative power relied upon to support regs. 198 and 199 with the operation accorded to these regulations by reg. 6 (1) (f). They are Parliament's power to make laws with respect to overseas and inter-State air navigation, s. 51 (i), and ss. 52 and 122 conferring power to make laws with respect to air navigation to, from and within the seat of government and other Commonwealth Territories. (As a convenient means of distinguishing overseas and inter-State air navigation and air navigation to, from and within a Territory from intra-State air navigation, I will refer to all that is comprised in the earlier descriptions as "other air navigation"). The considerations to which I have already adverted in discussing how regs. 198 and 199 affect international air navigation also point to the conclusion that, to the extent to which these regulations directly control intra-State commerce, they are supported by s. 51 (i.) for, as has already been shown, to prohibit intra-State regular public transport operations conditionally, as is done by reg. 198, is a way of safeguarding the international air navigation that falls within Commonwealth power under s. 51 (i.). By parity of reasoning, the operation of reg. 198 upon intra-State operations also affects air navigation between States and to, from or within a Territory. Indeed, once operations in inter-State and territorial air navigation are added to operations in international air navigation - the significance of which I have already discussed - the more apparent it becomes that the control of intra-State air operations, because of the effect of such operations upon other air navigation, is to some extent within Commonwealth power. The more air operations within the full legislative power of the Commonwealth are brought into consideration, the more likely it becomes that some of them will be interfered with by unregulated operations in the course of intra-State trade. I do not, however, accept in its full generality the Commonwealth's submission that s. 51 (i.) now extends to all air navigation in Australia, with the consequence that the Commonwealth may now legislate with respect to intra-State air navigation as fully as it can with respect to air navigation falling directly within the powers conferred by ss. 51 (i.), 52 and 122. For instance, as at present advised I do not think s. 19 of the Australian National Airlines Act could validly be extended to apply to services from one place in a State to another place in the same State. It does appear to me, however, that the Commonwealth's legislative power over other air navigation is ample to control intra-State air operations to the extent necessary for the effectual control of the other air navigation. As Dixon J. said in The King v. Burgess; Ex parte Henry [1] : "In reference to air navigation, as to broadcasting, the suggestion has been made that its control does not admit of the distinction between what is inter-State and what is confined to one State; that to regulate inter-State flying effectively air navigation must be controlled as a whole. The inconvenience and difficulty of maintaining the distinction needs no demonstration. But the legislative power is to make laws with respect to inter-State commerce, and, under the power, the domestic commerce of a State can be affected only to the extent necessary to make effectual its exercise in relation to commerce among the States" [1] . The limitation thus stated cannot, however, be used, as the defendants sought to use it, to limit a Commonwealth power to cases where a State does not effectively control its intra-State trade, or to provide any basis for the suggestion that, because in the past there has been Commonwealth and State co-operation to control the whole of air navigation within Australia, it cannot now be said that control by the Commonwealth is necessary. Commonwealth power cannot be limited by what a State may choose to do, or not to do. If control of intra-State trade is necessary to make effectual the exercise of Commonwealth power, that control may be exercised by the Commonwealth itself regardless of the control exercised by a State and regardless, too, of the fact that at some previous time the Commonwealth, because of the control exercised by a State over its intra-State trade, refrained from the full exercise of its own power. Arguments based upon the extent of State legislative power, or, the extent to which that power has been exercised, to measure or confine the legislative power of the Commonwealth, must, since the Engineers' Case [2] fall upon deaf ears. I conclude, therefore, that regs. 198 and 199 are supported by ss. 51 (i.), 52 and 122, in addition to s. 51 (xxix.).

[180]

I turn now to reg. 200B. It will already have become apparent that I take no narrow view of the power the Commonwealth has to control intra-State air operations in the interests of other air navigation, but I have not been convinced that, except to the extent necessary to carry out some international obligation, the positive authorization of intra-State air operations is a matter within Commonwealth power. This is the critical problem. The evidence submitted to the Court has not shown that the authorizing of inter-State air operations is necessary to make effectual the exercise of Commonwealth control over air navigation directly within its power, nor has there been any attempt to show by evidence that the authorization of intra-State air services attempted by virtue of reg. 200B has been undertaken for any purpose connected with the operation of any other of the air services falling directly within Commonwealth power. It was supported, as I have already shown, by a bolder claim to Commonwealth power which I have not been able to accept. It seems to me that to put aircraft into the air to carry goods or passengers for reward from one place in a State to another place in a State lacks the connexion with Commonwealth control of other air navigation necessary to establish its validity. A complete absence of intra-State air services might contribute to the safety, regularity and efficiency of other air navigation; so, too, might the restriction of intra-State services to those chosen by the Commonwealth to operate such services under Commonwealth control. To go further, however, and seek to add chosen intra-State air services to other air traffic is, it seems to me, a matter outside Commonwealth constitutional power under ss. 51 (i.), 52 and 122 of the Constitution. Each side relied upon American authority to buttress its case upon this point, but I have not found the cases cited to be of any significant persuasive authority upon the question of the Commonwealth's power under s. 51 (i.) to establish or control intra-State air navigation.

[184]

At this point I think it necessary to refer again to authority. I have found nothing in In re the Regulation and Control of Aeronautics in Canada [1] at variance with the measure of legislative power which, with the application of s. 51 (xxix.) to the Convention, the Commonwealth has under s. 51 (xxix.) by virtue of the obligations undertaken in the Chicago Convention. It is true that the Privy Council, after enumerating the principal obligations undertaken by Canada under the Paris Convention and the Annexes thereto, did say: "It is therefore obvious that the Dominion Parliament, in order duly and fully to "perform the obligations of Canada or of any Province thereof" under the Convention, must make provision for a great variety of subjects. Indeed, the terms of the Convention include almost every conceivable matter relating to aerial navigation, and we think that the Dominion Parliament not only has the right, but also the obligation, to provide by statute and by regulation that the terms of the Convention shall be duly carried out" [2] . No doubt a like observation could be made with regard to the Chicago Convention which, as has already been pointed out, is more comprehensive than the Paris Convention. Nevertheless, the final question in a particular case is - what are the terms of the Convention to be carried out? - and it is at this point that I find no assistance from the decision of the Privy Council in relation to reg. 200B. Nor is assistance to be obtained from what was said in the judgments of this Court in The King v. Burgess; Ex parte Henry [3] and The King v. Poole; Ex parte Henry [No. 2] [4] . What was said by the Chief Justice and by Windeyer J. in Airlines of New South Wales Pty. Ltd. v. New South Wales [1] remains to be considered. The Chief Justice did, I think, indicate clearly enough his view that by the Regulations as they then stood, the Commonwealth had not exercised to the full the power which it had and that the exclusion of intra-State air navigation from the operation of the Regulations was not constitutionally necessary. The amendment of reg. 6 (1) to make the other regulations, including reg. 198, apply to intra-State air navigation is, I think, in conformity with the indication his Honour the Chief Justice gave of what would be within Commonwealth power, but I find nothing in the judgment to indicate whether or not a new regulation such as reg. 200B would be within Commonwealth power. Windeyer J. did say: "The proper regulation in the interests of safety of the operations of inter-State and overseas airlines, and the due execution by Australia of the international obligations it has accepted, may well make it desirable that the one authority should exercise sole control of all movement of aircraft in the air and of matters connected with such movement, that is to say of all matters connected with how aircraft may be used" [2] . But his Honour went on to point out that "a State law that said simply that within the State aircraft should not be used at all for some specified purposes, such as the carriage of particular articles or the carriage of persons from one place within the State to another within the State would, in my opinion, be a valid law. It would deal with a subject that it seems to me is, in present circumstances, beyond Commonwealth power" [3] . Accordingly, I have not found in the earlier case any expression of opinion that assists me to determine whether reg. 200B is a regulation within Commonwealth power.

[188]

The argument that there is inconsistency between the State Act and reg. 198 was based upon the decision in O'Sullivan v. Noarlunga Meat Ltd. [2] . In that case inconsistency of two kinds was found - that is, the State law forbade what the Commonwealth law authorized, and the State, by its law, sought to add to the control imposed by Commonwealth laws that were exhaustive and left no room for any addition. The construction which I have put upon reg. 198 excludes the possibility of inconsistency of the first kind; it was contended, however, that the Commonwealth law states exhaustively those persons prohibited from conducting intra-State air transport services. The Commonwealth law under consideration in O'Sullivan v. Noarlunga Meat Ltd. [2] dealt with slaughtering for export, a matter which, it was decided by the High Court, was within Commonwealth power under s. 51 (i.); it followed that the Commonwealth could legislate exhaustively upon it. Here there is a difference. The Commonwealth can control intra-State air navigation only to the extent necessary to render its control over other air navigation effectual; accordingly, it cannot legislate exhaustively upon the subject of intra-State air navigation unless the exercise of complete control of that navigation is necessary for its control of other air navigation. I have already rejected the claim that this is so and have decided that, although the Commonwealth power is ample to forbid the use of aircraft in regular public transport operations intra-State and to control such operations as are permitted, it does not extend to cover the whole scope of intra-State transport operations. It follows, I think, that upon constitutional grounds the Commonwealth law ought not to be regarded as an exhaustive statement of those prohibited from conducting an intra-State air transport service. There is room, therefore, for a State law consistent with the actual provisions of Commonwealth law and the Air Transport Act, 1964 does not contradict reg. 198 upon the construction I have given to that Regulation.

[195]

(i) As to the trade and commerce power, s. 51 (i.): Air navigation is commerce, both because aircraft are the vehicles of commerce and because the carriage of passengers and goods by air is itself commerce. The power with respect to trade and commerce with other countries and among the States is a wide one. Under it the Commonwealth Parliament may, subject of course to ss. 92 and 99, make laws for fostering and promoting such commerce and for ensuring that it is conducted with safety and efficiency. Section 51 (i.) is derived from the commerce clause in the Constitution of the United States; and just as in the United States so here it can mean much in the making of a nation. But the course of our law has not followed that of the United States. There a great many activities, distant from but regarded as incidental to or affecting commerce among the States, have by means of the commerce clause been brought within the exclusive power of Congress. The Australian provision has proved less expansive, because this Court has been carefully insistent that the power under s. 51 (i.), being expressly in respect of overseas and inter-State commerce, cannot be extended to cover purely intra-State activities. "This provision confers no power to legislate with respect to intra-State trade. It gives no power to make laws with respect to trade between different parts of the same State": Morgan v. The Commonwealth and The Rationing Commission [1] . The distinction has been criticized, and perhaps justly in some cases, as a legalistic concept inharmonious to-day with economic realities. And in cases under s. 92 this Court has recognized that commerce cannot be confined in compartments, that inter-State trade may reach far within the borders of a State. Nevertheless as Dixon C.J. said in Wragg v. State of New South Wales [2] , "The economic interdependence of trade and commerce among the States with the domestic trade of a State cannot lead to a weakening of the legal distinction which the Constitution itself makes" [3] . In an attempt to efface this distinction in the instant case much that was said in the argument for the plaintiff, supported in part by the Commonwealth, was based upon phrases such as "commingling" and "integration" derived from the United States - but without any very close analysis of the sense they were to bear in the context of our law. Apparently no more was meant by commingling than that at any given time there are a lot of aircraft in the Australian air, some going to destinations within the State in which they took off, some to other States, some overseas. But this of itself does not mean that all of them are engaged in inter-State or overseas commerce any more than does the mingled traffic by vehicles on the roads or by vessels in coastal waters mean that each vehicle and vessel is engaged in inter-State trade. And as to integration, no doubt if goods were despatched by air from some place outside New South Wales to some place in New South Wales, they would be in inter-State commerce and the carriage of them a transaction of commerce among the States, and not the less so if they were trans-shipped at Sydney airport. As was said in W. & A. McArthur Ltd. v. State of Queensland [4] : "A given transaction which taken by itself would be domestic, as, for instance, transport between two points within a State, may in a particular instance be of an inter-State nature by reason of its association as part of a larger integer" [5] . But I am unable to perceive from the facts before us how the mere carrying of passengers or goods within a State is of itself necessarily integrated with inter-State commerce. If the plaintiff could establish that the distinction between inter-State and intra-State commerce had been thus obliterated, it would establish too that the Commonwealth could, by virtue of its power over inter-State commerce, itself undertake the conduct of air services operating within a State. The plaintiff, however, would not have it that its argument led to that conclusion. Whether on some other ground than the supposed integration of inter-State and intra-State commerce the Commonwealth could directly or by an agent of its creation enter the field of intra-State air navigation is a matter on which I express no opinion.

[196]

The real strength of the case for the plaintiff and the Commonwealth based upon the commerce power lies not in the attempted importation of exotic doctrine embodied in words descriptive of an economic interdependence or inseparability of inter-State and intra-State commerce. It lies in the much simpler proposition that inter-State and overseas air navigation can only be effectively regulated if all aircraft using the air in Australia are subject to the same code of rules. In my opinion the facts showed this to be so. The great increase in recent times in the volume of air traffic, especially of inter-State and overseas air traffic, the invention and development of new and larger types of aircraft flying at great speed, the increasingly complex procedures and organization necessary for the direction and control of air navigation - all these combine to make it necessary for the safety of inter-State and overseas air navigation that all aircraft should obey the same rules of flight and manoeuvre, the same code of signals, the same procedures in landing and take-off, and so forth; and that to this end they all be subject to the control of one authority. I am satisfied that the facts show that, to this extent and for these purposes, a law with respect to airborne trade and commerce with other countries and among the States may lawfully extend to air navigation within any one State. It is interesting to note that a similar conclusion was reached in the United States in the case Rosenhan v. United States [1] . The appellant there contended that his operation of a civil aircraft wholly within the State of Utah was not a part of inter-State or foreign commerce and that therefore he could not be required to have a federal certificate of airworthiness. It was held, however, that, where a federal Act is devoted to the promotion of safety and efficiency in inter-State commerce, if the Act bears some reasonable and rational relationship to the subject over which it has assumed to act, it will be valid although it may include intra-State activities within its scope.

[197]

(ii) As to the power with respect to external affairs, s. 51 (xxix.): By the Chicago Convention the Commonwealth has undertaken obligations to other nations, parties to that Convention. Those obligations are, speaking broadly, to ensure that uniform practices and standards agreed upon for the safe and orderly conduct of international civil air navigation are observed in Australia. The undertakings are basically directed to the advancement of international civil aviation. To that end very many of the standards, procedures and regulations agreed upon are to be made by the contracting nations to apply generally to all aircraft, and to auxiliary matters such as airports and landing areas, within their jurisdictions. Articles 12, 28 (1) and 37 of the Convention provide examples of this. For carrying its obligations under the Convention into effect the Commonwealth Parliament need not, it seems to me, resort to its power with respect to external affairs. The power with respect to inter-State and overseas commerce is ample for the purpose. But the external affairs power is by no means unimportant. If the commerce power did not support a law giving effect to a specific obligation of Australia under the Convention, then such a law could, I do not doubt, be supported as a law with respect to external affairs. The Commonwealth Parliament having ratified the Convention it can legislate in performance of the duties that the Commonwealth has assumed by it. But this does not mean that the Commonwealth Parliament has thereby gained power over all aspects of aviation. A law necessary to give effect to a particular treaty obligation of the Commonwealth is a law with respect to external affairs. But a law that is not necessary to give effect to an international obligation cannot be brought within Commonwealth power by linking it with one that is. It is always worth while recalling the words of Higgins J. in Huddart, Parker & Co. Pty. Ltd. v. Moorehead [1] , that "the thirty-nine articles contained in s. 51 are subjects for legislation, not pegs on which the federal Parliament may hang legislation on any subject that it likes" [2] .

[208]

The position in regard to regs. 198 and 199 is a little more complicated. Regulation 200B being out of the way as invalid, regs. 198 and 199 do not mean that the State must permit the holder of a Commonwealth airline licence to operate an intra-State air transport service merely because he has such a licence. No State law says that an air service can be carried on without a Commonwealth licence. All that the State law says is that an air service may not be carried on without a State licence. Looked at in the abstract, there is no inconsistency there. It was argued however that the Commonwealth law manifested an intention that it should occupy the field. The question thus metaphorically stated arises when one asks of a valid Commonwealth law governing a particular matter whether or not it appears that it is intended that it be the whole law on the matter, intended to deal with a topic within Commonwealth power exhaustively and completely to the entire exclusion of State law. But the metaphor of occupation of a field is of no help in the initial question, what is the extent of the field available for Commonwealth occupation. As the Privy Council said in Forbes v. Attorney-General for Manitoba [1] , speaking of the Constitution of Canada, "The doctrine of the "occupied field" applies only where there is a clash between Dominion legislation and provincial legislation within an area common to both" [2] . Here the area that the Commonwealth Parliament may occupy is the field of inter-State and overseas trade and commerce. It cannot by purporting to extend its law beyond these boundaries make its entry into other fields lawful. The matters on which the grant or refusal of a Commonwealth licence depends, the safety, regularity and efficiency of air navigation, have a direct bearing upon inter-State and overseas trade and commerce. But, however widely they be understood, they are not the same matters as those on which the State law makes the grant or refusal of a State licence to depend.

[213]

The Convention (which superseded the Paris Convention of 1919) recognized the right of every contracting State to complete and exclusive sovereignty over the air space above its territory. By art. 12 each contracting State undertook to ensure that all aircraft flying over or manoeuvring within its territory and every aircraft carrying its nationality mark wherever flying should comply with the rules and regulations relating to the flight and manoeuvre of aircraft there in force and to keep its own regulations in these respects uniform, to the greatest possible extent, with those established from time to time under the Convention. One of the purposes of the Convention as expressed in art. 28 was to impose upon each contracting State obligations (a) to provide, in its territory, airports, radio services, meteorological services and other air navigation facilities to facilitate international air navigation, in accordance with the standards and practices recommended or established from time to time, pursuant to the Convention; (b) to adopt and put into operation appropriate standard systems of communications, procedures, codes, markings, signals, lighting and other operational practices and rules recommended or established from time to time pursuant to the Convention; and (c) to collaborate in international measures to secure the publication of maps and charts in accordance with standards recommended or established from time to time pursuant to the Convention. Article 37 imposed upon each of the contracting States the obligation to collaborate in "securing the highest practicable degree of uniformity in regulations, standards, procedures and organization in relation to aircraft, personnel, airways and auxiliary services in all matters in which such uniformity will facilitate and improve air navigation". To this end the article directed that the International Civil Aviation Organization (which was set up by the Convention) "adopt and amend from time to time, as may be necessary, international standards and recommended practices and procedures" dealing with a wide range of matters, such as communication systems, air navigation aids, airworthiness, licensing of operating and mechanical personnel "and such other matters concerned with the safety, regularity, and efficiency of air navigation as may from time to time appear appropriate". From time to time annexes dealing with international standards and recommended practices have been adopted by the Council of the International Organization and issued to the contracting States. To date fifteen such annexes have been adopted and issued containing detailed standards and recommendations, each annex relating to a particular aspect of air navigation and matters incidental thereto. The titles of the annexes give some indication of the nature of the subjects with which they deal in great detail. Annex 1 is headed "Personnel Licensing", annex 2 "Rules of the Air", annex 3 "Meteorology", annex 4 "Aeronautical Charts", annex 5 "Units of Measurement to be used in Air-Ground Communications", annex 6 "Operation of Aircraft", annex 7 "Aircraft Nationality and Registration Marks", annex 8 "Airworthiness of Aircraft", annex 9 "Facilitation", annex 10 "Aeronautical Telecommunication", annex 11 "Air Traffic Services", annex 12 "Search and Rescue", annex 13 "Accident Inquiry", annex 14 "Aerodromes" and annex 15 "Aeronautical Information Services".

[216]

It is convenient now to give an outline of the Regulations which have been issued under s. 26 of the Commonwealth Air Navigation Act. They cover a wide field, as a reference to the headings of the Parts and Divisions into which they are divided shows. Part I deals with preliminary matters and contains reg. 6 (1) which makes the Regulations applicable to (a) international air navigation within Australian territory; (b) air navigation in relation to trade and commerce with other countries and among the States; (c) air navigation within the Territories of the Commonwealth; (d) air navigation to or from those Territories; (da) air navigation in which a Commonwealth aircraft is engaged; (e) air navigation in "controlled airspace" of a kind not specified in paragraphs (a) to (da) mentioned above but which directly affects, or may endanger, the safety of persons or aircraft engaged in air navigation of a kind specified in pars. (a), (b), (d) or (da) or air navigation in which a military aircraft is engaged. And by reg. 6 (1) (f) the Regulations are declared to apply also to all air navigation within Australian territory of a kind not specified in the earlier pars. (a) to (da), with the result that in general the Regulations are made applicable to intra-State air navigation. "Controlled airspace" is defined to mean airspace designated as a "control area" or "control zone" by the Director-General pursuant to reg. 95 and by that Regulation the Director-General may designate airspace that is within horizontal and vertical limits as a "control area" or "control zone". "Air navigation" is not defined by the Regulations but I agree with what Dixon J. (as he then was) said of the expression in The King v. Burgess; Ex parte Henry [1] . It comprehends the carriage of goods and passengers by air "and all the matters preparatory to flying by air, incidental thereto or consequent thereon". And, " "Air navigation" is an indefinite expression and might be used to describe transport by air. But its association in the Act with the convention for the regulation of aerial navigation shows that it is intended to cover a much wider field" [2] . The Convention to which his Honour was referring was the Paris Convention of 1919, but his words are equally applicable to the Chicago Convention.

[218]

To return to the Regulations, Pt II is headed "Administration and Organization". Part III, "Registration and Marking of Aircraft", deals with the registration and the marking of all Australian aircraft. Part IV is headed "Airworthiness Requirements". It deals with "Certificates of Type Approval" (div. 2), "Certificates of Airworthiness" (div. 3), "International Operators" (div. 4), "Approved Persons and Aircraft Maintenance Engineers" (div. 5), and "Maintenance" (div. 6). Part V deals with the licensing and ratings of operating crews of aircraft, Pt VI with flying schools and training organization, Pt VII with log books and logs, and Pt VIII with the equipment of aircraft with radio apparatus. Part IX is headed "Aerodromes and Facilities and Services". It deals with aerodromes, air routes and airways (div. 1), obstructions to and the clearing and marking of aerodromes (div. 1A), air traffic control (div. 2), meteorological services (div. 3), search and rescue service (div. 4), and fares, freights, time tables and statistical returns (div. 6). Part X is headed "Conditions of Flight". Division 1 deals with many general matters relating to the conditions under which aircraft are permitted to fly. They are prohibited from doing so unless they bear nationality registration marks and are certified as airworthy, to take only two examples. Flight manuals must be kept and various documents carried. Prohibited, restricted and danger areas may be declared over which flight may be prohibited or restricted. The carriage and use of cameras and the carriage of dangerous goods and firearms may be prohibited. Division 2 contains detailed flight rules. Part XI sets out the rules of the air which must be followed and Pt XII deals with signals for the control of air traffic. Part XIII is headed "Air Service Operations" and contains what seem to me to be, when read with reg. 6 (1) (f), the provisions which really bear upon the matters in issue in the present case. Division 1, which contains regs. 191-204, deals with the "Classification and Licensing of Operations". By reg. 191 "air transport" is divided into four classes. The first class consists of "Private operations", which, speaking generally, relates to operations by an individual for his own private purposes - what I may call "private flying". The second class covers "Aerial work operations" of which aerial surveys and flying training are illustrations. The third class comprises "Charter operations", and the fourth "Regular public transport operations, being all air service operations in which aircraft are available for the transport of members of the public, or for use by members of the public for the transport of cargo, for hire or reward and which are conducted in accordance with fixed schedules to and from fixed terminals over specific routes". Regulations 196 and 197 forbid the use of aircraft on charter and aerial work operations except under a licence issued by the Director-General. Regulation 198 prohibits the use of an aircraft in regular public transport operations except under the authority of and in accordance with a licence (called an "airline licence") issued by that officer. Regulation 199 requires an applicant for an airline licence to furnish the Director-General with such information as he requires and, where the proposed service is an intra-State service, the Director-General, in deciding whether or not to grant a licence, is to have regard to "matters concerned with the safety, regularity and efficiency of air navigation and to no other matters" (reg. 199 (4)). Regulation 199A deals with the form of licences and reg. 200 with their duration. By reg. 200A, the Director-General is empowered to cancel or suspend a licence if its holder has contravened or failed to comply with the Act or Regulations or with the terms of the licence or if he is satisfied that it should be cancelled or suspended in the interests of the safety of the aircraft or persons on board it or in the interests of public safety or, in the case of a licence to conduct intra-State operations he is satisfied that it is necessary or desirable, having regard to matters concerned with the safety, regularity and efficiency of air navigation, to cancel or suspend it. Regulation 200B provides that " an airline licence authorizes the conduct of operations in accordance with the provisions of the licence subject to the Act and these Regulations and to the other laws of the Commonwealth". By reg. 203A the Director-General, in the exercise of any power or performance of any function under the Division, is to have regard to the need for co-ordinating, in the interests of safety in air navigation, all operations of the kind referred to in reg. 191. Division 2 of Pt XIII lays down detailed requirements designed to ensure the safety of "commercial operations" and such an operation is defined by reg. 5 (1) to mean "an air operation specified in Regulation 191 of these Regulations, other than a private operation". An operator engaged in commercial operations is required to provide an adequate organization, including trained staff, together with workshop, equipment and facilities to ensure that aircraft and their accessories are maintained in an airworthy condition (reg. 206). Maintenance manuals must be provided for the use and guidance of maintenance personnel (reg. 207) and must be kept up to date (reg. 208). He must make provision for training maintenance personnel (reg. 210) and see to it that maintenance records are kept (reg. 211). He must provide operations manuals for the use and guidance of operating personnel as to the conduct of flight operations (reg. 212). Flight time records must be kept (reg. 213) and a training and checking organization provided to ensure that operating crews maintain their efficiency (reg. 214). An operator may not allow a pilot to command an aircraft engaged in a regular public transport service unless he has certain qualifications relating to the route over which the service is conducted (reg. 215) and route qualifications are also required of co-pilots (reg. 215B). Division 3 deals in detail with the conduct of flying operations before, during and after flight. Part XV is headed "Suspension and Cancellation of, and Refusal to Issue or Renew, Licences and Certificates". Its details do not seem to be of any relevance in the present case but it should perhaps be said that it provides (inter alia) for the setting up of a board of review to which a person aggrieved by a refusal by the Director-General to grant a licence or certificate or by a variation, cancellation or suspension of a licence or certificate may have the Director-General's decision referred for review and, in the alternative, enables such a person to appeal to a court. Part XVI provides for inquiries into accidents in relation to aircraft. Part XVII deals with penalties and prosecutions and Pt XVIII with evidence. Part XIX deals with miscellaneous matters and contains inter alia provisions forbidding an aircraft to land or take off from a Commonwealth aerodrome except under the authority of a permit issued by the Director-General (reg. 320A) and forbidding an aircraft to be flown in controlled airspace in the course of air navigation of a "kind specified" in reg. 6 (1) (e), to which I have referred earlier, except under the authority of a permit issued by the Director-General (reg. 320B). Its effect, so far as the present case is concerned, is to forbid an aircraft to be flown in controlled airspace in the course of intra-State air navigation operations which directly affect or may endanger the safety of persons or aircraft engaged in international air navigation within Australian territory or air navigation in relation to trade and commerce between the States or with other countries or air navigation within or to or from the Territories or air navigation in which a Commonwealth aircraft is engaged unless with the permission of the Director-General.

[219]

The plaintiff conducts regular public transport operations between various points within the boundaries of the State of New South Wales. One of the services which it has been conducting is between the Kingsford Smith aerodrome at Sydney and the Dubbo aerodrome, both being Commonwealth aerodromes. It holds a licence issued by the Director-General under reg. 198, a permit issued under reg. 320A to land and take off its aircraft from both aerodromes and a permit issued under reg. 320B to fly its aircraft in controlled airspace. Flights between Sydney and Dubbo necessitate the use of controlled airspace and of the aerodromes mentioned and it should, perhaps, be added that all intra-State airline services in New South Wales run to and from the Kingsford Smith aerodrome as do all international and inter-State services and services to and from the Territories whose aircraft land in New South Wales. Until recently the plaintiff was also the holder of a licence issued by the New South Wales Commissioner for Motor Transport under the State Transport (Co-ordination) Act of New South Wales authorizing it to conduct that service. On 1st September 1964 the Commissioner for Motor Transport informed the plaintiff by letter that he had decided to re-allocate intra-State air routes by granting East-West Airlines Ltd. a licence to conduct the service between Dubbo and Sydney and cancelling the plaintiff's licence to conduct that service and at the same time to grant to the plaintiff a licence to conduct an intra-State service between other points which East-West Airlines Ltd. had hitherto been conducting. Following this intimation the Commissioner on 12th October 1964 cancelled the plaintiff's licence relating to the Dubbo-Sydney service and shortly afterwards a State Act, the Air Transport Act, No. 36 of 1964, was enacted. By s. 3 it provides that "(1) A person shall not, on or after the appointed day, carry by an aircraft from a place in New South Wales to another place in New South Wales any passengers or goods unless - (a) the aircraft is licensed under this Act; (b) that person is the holder of the license; and (c) where the license was granted in respect of a route or routes, the route over which the passengers or goods are so carried is such a route." And heavy penalties are prescribed for a breach of this provision. Section 6 gives the Commissioner a discretion to grant or refuse to grant a licence and, in exercising that discretion, the section directs him to have regard to such of the matters set out in that section as seem to him to be appropriate and to no other matters. The matters specified relate to the air transport needs of the public; the extent to which they are already being served; the allocation of routes so as to foster more than one airline operating in New South Wales; the character, suitability and fitness of the applicant for the licence; and the effect that the intended service may have on other forms of public transport. By s. 7 the licence, if granted, is to specify the aircraft in respect of which it is issued and the route or routes in respect of which it is granted. Section 8 gives the Commissioner a discretion to revoke, suspend or vary a licence granted by him, having regard to the matters set out in s. 6 and s. 18 provides that nothing in the Act shall relieve a person of any obligation to hold or effect any licence or registration which he is otherwise by law required to hold or effect.

[227]

As I have said, I think the development of air navigation in Australia has reached a stage at which it can properly be said that in order to ensure the safety, regularity and efficiency of inter-State and overseas air navigation it is necessary that the Commonwealth should exercise a wide measure of control over intra-State air navigation. The question is, however, the extent to which that control may lawfully go. I have no doubt that it is within the power of the Commonwealth to insist that no intra-State air transport operations shall be conducted without its permission. Equally I have no doubt that in considering whether it will give permission for the conduct of an intra-State airline service, it must have regard to the suitability of the applicant for permission to conduct that service. The licensing system set up by regs. 198, 199 and 200A and applied to intra-State air navigation by reg. 6 (1) (f) is, I think, within power whether the matter be looked at from the point of view of the external affairs power or the trade and commerce power. It provides a means of ensuring that permitted air transport operations shall be conducted in accordance with the conditions laid down for their conduct and it enables the licensing authority to consider whether an applicant for permission to conduct such a service is qualified to provide and maintain the necessary aircraft, equipment, ancillary services and skilled personnel. So too the Commonwealth may insist, as it has, that no aircraft shall fly in controlled airspace or use its aerodromes without its permission. All this is, I think, really conceded by the States and it is recognized by s. 18 of the State Air Transport Act. But reg. 200B goes a step further. If it be valid to the full extent to which it purports to go, it would entitle a person holding an airline licence from the Commonwealth to conduct the intra-State service to which that licence relates regardless of the law of the State upon the subject and it is at this point that the States take the stand that the Commonwealth law has gone beyond power. Their submissions are, in effect, that a State may lawfully insist that there shall be no intra-State service within its territory unless by its permission. If it refuses to permit such a service the safety, regularity and efficiency of inter-State and overseas services cannot be prejudicially affected. If it grants its permission for the conduct of such a service it may select the person who is to conduct it subject, nevertheless, to the right of the Commonwealth to refuse to allow that service to operate if it bona fide takes the view that its refusal is necessary to ensure the safety, regularity and efficiency of inter-State and overseas services. If it is prepared to allow that service to operate it may for the same reasons select the person whom it will permit to operate it. In so far as reg. 200B purports to enable the Commonwealth to go further than this and provide that notwithstanding anything the State law may have to say there shall be an intra-State service it is beyond power. It is one thing to say that to ensure the safety, regularity and efficiency of inter-State and overseas air services, the Commonwealth may lawfully refuse to allow an intra-State service to operate or may refuse to permit it to do so unless it is conducted by a person or organization of its choice. It is another to say that an intra-State service authorized by it may operate whether the State concerned is agreeable or not.

At a glance

Court

Decision date

Before

Source

Judgment (229 paragraphs)

Parties