Attorney-General (Vic) (At the Relation of the Victorian Chamber of Manufactures) v Commonwealth [1935] HCA 31;

Attorney-General (Vic) (At the Relation of the Victorian Chamber of Manufactures) v Commonwealth [1935] HCA 31; - HCA 1935 case summary — Zoe

[20]

This is a relator's action brought in the original jurisdiction of this Court in the name of the Attorney-General for the State of Victoria against the Commonwealth. The purpose of the proceeding is to obtain a declaration that in carrying on a clothing factory established by the Commonwealth, the making or supplying of uniforms and clothing is beyond the powers of the Executive in so far as persons outside the Commonwealth services are supplied. The clothing factory was established primarily for the purpose of supplying soldiers' and sailors' uniforms, and uniforms required in the civil services of the Commonwealth. The relator's contention is that, in the course of the operations, the factory cannot without an excess of power, supply the requirements of the States or of municipalities, or of other persons or bodies. The relator, the Victorian Chamber of Manufactures, obtained a fiat from the Attorney-General for the State of Victoria for the present proceedings, which arise, no doubt, out of a desire to suppress the competition of the factory, such as it is. An objection is taken on behalf of the Commonwealth that the action is incompetent, because the matters complained of afford no ground of action, even if the operations of the factory were to the extent alleged beyond the powers of the Commonwealth. In considering this objection, the fact that it is a relator's action is immaterial. When the Attorney-General's fiat has been obtained, the action in his name is as competent or incompetent as if it were brought ex officio by him. The question, therefore, is whether, assuming ultra vires, the Attorney-General of a State can maintain an action against the Commonwealth to obtain a declaration and consequential relief against the Commonwealth's ultra vires activity. In my opinion he can. To a great extent the question is settled by Attorney-General (N.S.W.) v. Brewery Employes Union of New South Wales[4] and Tasmania v. Victoria[5]. In my own judgment (ante, p. 171) I said: - "In a matter of public right the Attorney-General sues on behalf of the public. There is no reason why his right to do so should be confined to matters of exclusively domestic concern. On the contrary, there is every reason in a Federal system that this principle should be applied to allow him to maintain proceedings to vindicate the rights conferred upon his public by a provision of the Constitution." If the Commonwealth Executive is engaged in trading operations in competition with the citizens of a State so that the public of the State are affected by acts of the Executive, and it appears that in so trading the Commonwealth is acting without any legal warrant because under the Federal system such activities could only be carried on by the State if the Crown is to pursue them at all, I think these principles apply. In the case supposed the citizens of the State are affected as such because the power exercisable in reference to them only by the State Government is assumed by the Federal Government. The Attorney-General of the State may properly represent them just as he would represent them in a unitary system if a statutory corporation exceeded its powers by a similar course of action. It was next said that even so the facts of the present case presented no matter within the meaning of the word as used in sec. 75 of the Constitution. This argument again assumed, as of course it must do, that the complaint of ultra vires is well founded. It is based upon the notion that the operations of the clothing factory can violate no right, that no one can have a claim of right to prevent them. Even if this were correct the argument would in my opinion involve a confusion, because whether a question amounts to a matter does not depend upon the legal plausibility of a claim of right made, but upon the making of it. When the Attorney-General of a State at the instance of relators claims to restrain the Federal Government from continuing a course of action it has adopted, it seems odd to say that the claim, because misconceived, is not a matter. If the Court did not agree that it was misconceived and acceded to the claim, it could hardly be said that it acted without jurisdiction. The real question in the case is whether the Commonwealth Executive is acting beyond its powers. It cannot be doubted that under the Constitution the legislative power of Parliament enables it to authorize the Executive to establish and conduct a clothing factory to supply all the needs of the Commonwealth Government, whether Naval and Military or Civil. As at present advised I am not prepared to accede to the argument that, without legislative power, the Commonwealth Executive can enter into business operations simply because it is a juristic entity, and in conducting business is not exercising governmental power over the subject. In the present case the factory was established pursuant to legislation of the Parliament, namely, secs. 63 and 64 of the Defence Act. These provisions do not, it need hardly be said, exceed the defence power. But how far does it extend? It must be construed subject to the Constitution (see sec. 15A_Acts Interpretation Act 1901-1933_). So construed, does it extend to the use of the factory for requirements which are not strictly naval, military, civil or otherwise departmental? I have no doubt that to fulfil these requirements must be the primary purpose of the factory. But it must be remembered that they are of a fluctuating character. All things naval and military have the possibility of war in view, and the nature of the factory cannot be determined by peace-time requirements. A doctrine exists in the case of trading corporations that, when for the purpose of their undertakings they must control property, premises or appliances, it is within their incidental powers to utilise them for purposes akin to and not inconsistent with the primary purpose of the corporation, and thus avoid the ill consequences of their being left vacant, idle and unemployed. (See Brice on Ultra Vires, 3rd ed. (1893), p. 135; Simpson v. Westminster Palace Hotel Co.[6].) The question how far this doctrine is to be pushed in relation to corporations is one of degree, and has excited some difference of opinion (Forrest v. Manchester, Sheffield and Lincolnshire Railway Co.[7], and on appeal[8]). It illustrates an application of the general doctrine that things may be done which are fairly incidental or conducive to the purpose for which a power is enjoyed. On the whole I think we may apply it to the peculiar situation in which the Commonwealth Clothing Factory stands. The case was ordered to be argued before us on the pleadings, mutual admissions and exhibits thereto, and on the Commonwealth Statutory Rule No. 210 of 1926. It might, perhaps, have been more satisfactory if, for the purpose of our decision, the facts had been investigated in detail on the trial of the action. In all cases where incidental powers are relied upon there is a danger of the cart being harnessed before the horse. In the present case, however, so far as I can see, there is no inversion of the main and incidental power, and the supply to outsiders is of a minor character, and subsidiary to the main purpose of keeping a factory in going order for naval and military purposes on a scale adequate for actual and potential demand. In my opinion the action should be dismissed upon the ground that in substance the complaint is ill-founded.

[24]

The jurisdiction of this Court to entertain such an action at the suit of a competent plaintiff is, I think, well settled (Constitution, sec. 75 (iii.); The Commonwealth v. New South Wales[9]; compare, in the United States, Monaco v. Missippi[10]). But is the State of Victoria, or the Attorney-General of the State, a competent plaintiff? In my opinion, the answer must be in the affirmative. Acts are alleged which, it is contended, are beyond the powers of the Commonwealth and usurp the functions of the State (Tasmania v. Victoria[11]). It is said that, while the Commonwealth in establishing the clothing factory was clearly authorized by the Defence Act 1903-1932, sec. 63 (1) (da), yet the extension of its operations to the manufacture of clothing and other equipment for various departments and services of the Commonwealth other than naval and military equipment is beyond the powers of the Commonwealth. But I cannot assent to this contention. The supply of uniforms and clothing to the various departments and services of the Commonwealth is incidental to the administration of the various departments of State under the control and management of the Commonwealth, and to services rendered by the Commonwealth under and pursuant to the powers and authorities contained in the Constitution. There is nothing unlawful in the Commonwealth using an organization established under a law of the Commonwealth for any lawful purpose of the Commonwealth. If a factory be established under the Defence Act 1903-1932 for the manufacture of naval and military uniforms, what is there to prevent that factory being used for other legitimate purposes of the Commonwealth? The factory in the present case is not organized as a corporation with limited and defined powers. The occasion for its establishment was the manufacture of naval and military uniforms, but there is nothing in the Constitution, or in any principle of law, that renders the use of that organization for purposes within the limits of the powers and functions of the Commonwealth unlawful or in contravention of the Constitution or any law of the Commonwealth. The distribution of the costs of manufacture to the different departments and services may well be matter of internal management and arrangement, but that involves nothing illegal.

[25]

The Attorney-General for the State of Victoria is on firmer ground, however, when he contends that the Constitution does not warrant the Commonwealth launching out on the general business of manufacturing clothing and other goods for the States, or for public bodies constituted under the laws of the States, or for private individuals. The provisions of sec. 51 of the Constitution contain no such power in express terms. But it is claimed that sec. 63 (f) of the Defence Act 1903-1932 does authorize such an extension of operations. It provides that the Governor-General may, subject to the provisions of the Act, do all matters and things deemed by him to be necessary or desirable for the efficient defence and protection of the Commonwealth or any State. This means the Governor-General acting in a constitutional manner, that is with the advice of the Executive Council (Acts Interpretation Act 1901-1932, sec. 17). It may be inferred from the mutual admissions of the parties that the Governor-General deemed it desirable so to extend the operations of the factory, but it is conceded that no formal Order in Council has been passed sanctioning the extension. The existence of such an order is not, I think, essential, if the operations have in fact been sanctioned by the Governor-General. It must be remembered that the legislative powers of the Commonwealth are enumerated, and their limits cannot be transcended. In the last resort it is for the Courts to determine whether the legislative and executive acts of the Commonwealth are within the powers conferred by the Constitution. The Defence Act doubtless gives the Governor-General the widest discretion. But, while his decisions are entitled to the highest respect, the Act cannot be taken to mean that the Governor-General may do whatever he thinks proper, whether within the constitutional power of the Commonwealth or not. Such a construction would defeat the Act, and could only be adopted in cases where the language compelled that result. (See Acts Interpretation Act 1930, No. 23, sec. 3.) The exercise of the Governor-General's discretion must be confined within the constitutional power of the Commonwealth. But it is not for the Courts to determine whether the matters and things deemed necessary or desirable by the Governor-General are or are not appropriate for the constitutional object: all that the Courts have to consider is whether the means selected have some real and substantial relation to that object, or are calculated in some appreciable degree to advance it (Farey v. Burvett[12]). The legislative powers of the Commonwealth confer upon it no authority whatever to establish and maintain clothing factories for purposes other than those contained in its enumerated or constitutional powers. It may be desirable to do so from the point of view of efficiency and economy, but constitutional warrant is still lacking. There is no relation between establishing and maintaining a clothing factory for Commonwealth purposes, and extending its operations to purposes wholly beyond the constitutional power of the Commonwealth (The Commonwealth v. Australian Commonwealth Shipping Board[13]).

[29]

Lastly, the provisions of sec. 81 of the Constitution are called in aid: "All revenues or moneys raised or received by the Executive Government of the Commonwealth shall form one Consolidated Revenue Fund, to be appropriated for the purposes of the Commonwealth in the manner and subject to the charges and liabilities imposed by this Constitution." This provision is relied upon as an independent source of power. Thus, in the United States of America "it will be found that the public moneys of the United States have been devoted to a great variety of purposes, many of which have no relation to the exercise of the specific powers vested by the Constitution in the National Government; they have been, to mention only a few instances, in aid of road-building, education, agriculture and relief, at home and abroad, of sufferers on account of fires, floods, earthquakes, &c." (Willoughby on The Constitution of the United States, 2nd ed. (1929), vol. i., p. 103). The Constitution of the United States enables Congress "to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defence and general welfare of the United States; but all duties, imposts and excises shall be uniform throughout the United States" (Art. 1, sec. VIII., cl. 1). "Hence it is that, though Congress has not a general legislative power to provide that the Federal Government may do everything, whether by way of regulation or direct control and operation, which may conceivably secure the common defence and promote the general welfare of the United States, it nevertheless has a general power to appropriate the public moneys of the United States for these purposes" (Willoughby, ibid., p. 98). "But this, it may be predicted," he adds (ibid., p. 105), "will be as far as the Courts will permit Congress to go. In other words, they will not admit that, because Congress has the power to lend Federal financial aid to projects which concern the general welfare of the United States, even though these projects have no relation to the matters enumerated in the Constitution as within Federal control, therefore, Congress may authorize the Federal Government, through its own agencies to carry out these non-enumerated projects." The provision in the Constitution of Australia is not identical with that in the Constitution of the United States; indeed, in sec. 96, express provision is made for giving financial assistance to any State on such terms and conditions as the Parliament thinks fit. (See Victoria v. The Commonwealth[15].) Further, it should be observed that sec. 83 provides that no money shall be drawn from the Treasury of the Commonwealth except under appropriation made by law - which I take to mean in accordance with law. The power to appropriate moneys "for the purposes of the Commonwealth" does not, in my opinion, enable the Commonwealth to appropriate such moneys to any purposes it thinks fit, but restricts that power to the subjects assigned to, or departments or matters placed under the control of the Federal Government by the Constitution. No constitutional warrant, therefore, for the extension of the operations of the clothing factory to general business purposes can be found in the appropriation power.

At a glance

Court

Decision date

Before

Source

Judgment (44 paragraphs)

Attorney-General (Vic) (At the Relation of the Victorian Chamber of Manufactures) v Commonwealth [1935] HCA 31; (1935) 52 CLR 533 (23 May 1935)

Parties

Legislation Cited (4)

Cases Cited (1)