Australian Steamships Limited v Malcolm [1914] HCA 73

Australian Steamships Limited v Malcolm [1914] HCA 73 - HCA 1914 case summary — Zoe

[20]

Knox K.C. (with him Brissenden), for the appellants. The Seamen's Compensation Act 1911 is invalid. The only power under which it can be contended that it is valid is the trade and commerce power in sec. 51 (1.) of the Constitution. One of the limits of that power is laid down in Federated Amalgamated Government Railway and Tramway Service Association v. New South Wales Railway Traffic Envployees' Association (1), namely, that it does not extend to matters the effect of which upon inter-State trade and commerce is not direct, substantial and proximate. The provision in sec. 98 of the Constitution that the trade and commerce power extends to navigation and shipping does not enlarge the power. The Seamen's Compensa- tion Act has no effect direct, substantial or proximate upon trade and commerce or upon navigation and shipping. It is not a shipping law but a social law. In the nature of things shipping laws commonly deal with seamen in a way that men engaged in employments on land are not dealt with. But the matters that are dealt with in such laws are matters arising exclusively out of the peculiar conditions of the service of the sea. The provisions in this Act would have as much relation to the building trade as to navigation and shipping. It might be a very different case if the liability were to depend upon the absence or presence of negligence on the part of the seaman, because it might then very well be said that anything which puts a premium on diligence has a direct, substantial and proximate effect upon navigation. But it cannot tend to the effective carrying on of navigation and shipping to provide that a man may be negligent or disobedient with impunity. Patter- son v. Bark Eudora (2) is an authority for saying that in the case of seamen federal legislation may go further than in the case of other employees, but the legislation must always be subject to the limitation that it directly affects trade and commerce. [He referred to The Employers' Liability Cases (3); Baltimore and Ohio Ruilroad Co. v. Inter-State Commerce Commission (4); Southern Railway Co. v. United States (5); The Second Employers' Liability Cases (6).]

[44]

observed by those engaged in the operations of commerce with respect to those operations. In a recent case, Howard v. Illinois Central Railroad Co. (1907) (1) (sometimes called The Employers' Liability Cases), it was defined by Moody J. as including control of the conduct of persons engaged in commerce in respect of anything which directly concerns commerce, and also control of the instruments used in it. In the last-mentioned case, and also in others in which the question of the validity of Employers' Liability Acts was raised, the Supreme Court of the United States has held that the power extends to prescribing rules of conduct as to anything directly tending to promote the efficiency or safety of the operations of commerce. On this ground it has been held that laws abrogating the defence of common employment and the defence commonly expressed by the maxim Volenti non fit injuria are within the power. These laws are, in substance, laws imposing upon employers an absolute obligation to be answerable for, and therefore to prevent, negligence on the part of all their employees. This is, in one sense, to impose a rule of conduct upon employers themselves by identifying them with their agents. But Congress has never attempted to legislate as to any matter not directly concerning rules of conduct, and the American Courts have consequently never been asked to pro- nounce upon the question whether the power extends beyond prescribing such rules. I think, therefore, that no assistance in 4 determining that point can be derived from these decisions, and & fortiori none from any expressions used obiter in the discussion ; of a different question. But before leaving these decisions I may be permitted to observe that the test of promoting the efficiency or safety of the operations of commerce is an unsatisfactory one. It may be that the object, avowed or unavowed, of the legislature ; is not to encourage but to discourage any particular branch of commerce, and that for this purpose they impose rules of con- . duct which, if observed, will render the operations less efficient and less safe than they would otherwise be. I cannot think that this would in any way affect the validity of the legislation. This was pointed out by the Judicial Committee in the case of Grand Trunk Railway of Canada v. Attorney-General of Canada (2).

[87]

anything which, in the exercise by itself of a fair discretion, may be deemed appropriate to save the act of inter-State commerce from prevention or interruption, or to make that act more secure, more reliable or more efficient." The argument adopted by the Court, as I condense it, went on to point out that the men and the things used in the act or operation of inter-State commerce were the agents or instruments of that commerce, and that their destruction during the act would stop, or their interruption would interrupt, that commerce. If they were not of the right kind or quality, inefficiency of some kind would ensue; and wrong or disadvantageous conditions of working would prevent or interrupt the act of commerce, or diminish its expedition, reliability, economy, or security. "Therefore," it was said (1), "Congress may legislate about the agents and instruments of inter-State commerce, and about the conditions under which those agents and instruments perform the work of inter-State commerce, whenever such legislation bears, or in the exercise of a'fair legislative discretion can be deemed to bear, upon the reliability or promptness or economy or security or utility of the inter-State commerce act." The judgment must, of course, be read in relation to the character of the legislation discussed. The Statute there in question was on its face designed to secure greater care on the part of the common carriers and thereby greater safety to the employees in the operations of inter-State trade, and by such regulation of conduct to secure the safer, prompter, and more certain carriage of travellers and goods; and the ambit of the power was, of course, held to cover any such legislation. Had it been the intention of the Statute, in the endeavours of Congress to consult the public welfare, to impose restrictions on inter-State or foreign commerce to any extent which the: legislature thought right in the circumstances, the same principles would have been applied. It is as well to quote two of the propositions of the Court bearing upon "the extent and nature of this power,' which were considered "no longer open to dispute." 'They are as follows (2): - (3) "'To regulate,' in the sense intended " (and regulation is included in the term " to make laws"), "is to foster, protect, control and restrain, with

[149]

if not, then it is not easy to see why any modification of common law or Statute law affecting the relations of employer and employee, while engaged in co-operating in the trade and com- merce, so as to conduce really or substantially to affect the service rendered to passengers or to shippers, is not part of the necessary control of the subject. If, for instance, a physical bar habitually stood on a ship between the sailors and the passengers so as to prevent timely aid in a moment of danger, no one would dispute the right of the Commonwealth Parliament to require its removal. And if the State law - whether common law or Statute law - so restricted a sailor's right to compensation in case of accident as to morally but most effectively act upon human nature by deterring him from rendering prompt and ready aid, it would, as I conceive, be no less an obstacle to the desired con- duct of the trade and commerce placed under federal control. And if a physical obstacle can be removed, an incorporeal obstacle operating at times even more effectually on human nature may also be removed, and facilities may with equal authority be created. Mr. Knox, while not wholly accepting and still not actually disputing the accuracy of the American cases, sought to distinguish them by saying that they drew the line of delimitation at negligence. Of course, since the cases sustain concrete legisla- tion which makes negligence the ground of liability, it could not be disputed that so much was within the power of Congress. But I can find no statement of principle that negligence is the limit of legislative power. The inference I would draw from such cases as Seaboard Air Line v. Horton (1) and Illinois Central Railroad Co. v. Behrens (2) is to the contrary. The power of the Common- wealth Parliament is to regulate a subject, and negligence is not that subject. Navigation and shipping in relation to inter-State and foreign commerce is part of the subject. If so, it is impos- sible to exclude the authority to legislate for compensation merely because it is irrespective of negligence. For negligence full damages are recoverable. For accidental injury the damages are limited - that is, the loss is shared. Whether this is prudential or advisable is a matter of parliamentary discretion, but the root of the matter is now an accepted economic position, and is this:

[169]

was caused by wilful and serious misconduct of the employee, and that could not be done by the Commonwealth Parliament in respect of inter-State commerce or shipping or navigation under | sec. 51 (1) or sec. 98. = The question raised has never been decided by this Court, ee although it was raised in Clarke v. Union Steamship Co. of : New Zealand Ltd. (1), heard at the last sittings of this Court in Pw" " Sydney. It was not necessary in that case to decide the question. Counsel for the appellants, however, relied on words in the judgment of the Court in The Railway Servants' Case (2) in support of his argument that the effect of legislation on inter- State commerce under sec. 51 (I.) or sec. 98, must be direct, sub- stantial and proximate. The case referred to decided "that the Commonwealth Conciliation and Arbitration Act 1904, so far as it purports to affect State railways, is wltra vires and void, and, consequently, that an organization consisting solely of employees on State railways was not entitled to be registered under that Act": See head-note (3). I do not consider it necessary to decide in this case whether the opinion expressed by the Court in that case that "general conditions of employment" are not of such a character as to be included within the power of the Com- monwealth Parliament to regulate inter-State trade and com- merce - the effect of them upon that commerce not being direct, substantial and proximate - is sound. In considering the question of the constitutionality of the Statute in question it is recognized that every authority given by the Constitution to legislate on specified subjects includes matters necessary to make the legislation authorized effective. It includes matters "incidental." See sub-sec. XxXxIx. of sec. 51. In this connection, I adopt the words of Marshall C.J. in M'Culloch y. Maryland (4) : - " Let the end be legitimate, let it be within the scope of the Constitution, and all means which are appro- priate, which are plainly adapted to that end, which are not pro- hibited, but consist with the letter and spirit of the Constitution, are constitutional." The question can only be answered by considering the effect of

At a glance

Court

Decision date

Before

Source

Judgment (195 paragraphs)