The applicant appealed against his conviction to the Supreme Court of New South Wales by way of statutory prohibition upon grounds which were intended to raise the question whether this provision had any valid operation in the case of the applicant inasmuch as his neglect to fulfil his contract would amount to a breach of the Federal award punishable under the Commonwealth Conciliation and Arbitration Act 1904-1928. Upon the return of the order nisi for statutory prohibition the Supreme Court considered that the matter involved a question as to the limits inter se of the constitutional powers of the State and Commonwealth which, by reason of sec. 38A of the Judiciary Act 1903-1927, they had no jurisdiction to entertain or determine, and in pursuance of sec. 40A they proceeded no further in the cause which was treated as removed to this Court.

The question raised is whether a State law is inconsistent with a Commonwealth law and therefore invalid by reason of sec 109 of the Constitution. This is not a question as to the limits inter se of the constitutional powers of the Commonwealth and of the State. But the question turns upon sec. 109 of the Constitution, and for this reason the matter is a cause arising under the Constitution or involving its interpretation, which may be removed into this Court pursuant to sec. 40 of the Judiciary Act 1903-1927. An application was made on the part of the applicant that the cause should be so removed and, in the special circumstances attending this litigation, the application is to be granted. The question of substance was fully argued before us and, the cause having been removed, there is no reason why it should not be determined at once without further argument.

Sec. 44 of the Commonwealth Conciliation and Arbitration Act 1904-1928 penalizes any breach or non-observance of an award, and, inasmuch as the award in this case commanded performance of the applicant's contract, his neglect to fulfil it would constitute an offence under this provision. The same acts or omissions were therefore made subject to the penal sanctions of the Federal enactment and the somewhat different penal sanctions of the State enactment.

When the Parliament of the Commonwealth and the Parliament of a State each legislate upon the same subject and prescribe what the rule of conduct shall be, they make laws which are inconsistent, notwithstanding that the rule of conduct is identical which each prescribes, and sec. 109 applies. That this is so is settled, at least when the sanctions they impose are diverse (Hume v. Palmer[5]). But the reason is that, by prescribing the rule to be observed, the Federal statute shows an intention to cover the subject matter and provide what the law upon it shall be. If it appeared that the Federal law was intended to be supplementary to or cumulative upon State law, then no inconsistency would be exhibited in imposing the same duties or in inflicting different penalties. The inconsistency does not lie in the mere coexistence of two laws which are susceptible of simultaneous obedience. It depends upon the intention of the paramount Legislature to express by its enactment, completely, exhaustively, or exclusively, what shall be the law governing the particular conduct or matter to which its attention is directed. When a Federal statute discloses such an intention, it is inconsistent with it for the law of a State to govern the same conduct or matter. But in the present case, conduct which the State law prescribes, namely, the performance of contracts of service, is a matter with which the Commonwealth Parliament has not itself attempted to deal. Although neglect by a shearer to perform such a contract constitutes an offence against Federal law, this does not arise from any statement by the Federal Legislature of what the law shall be upon that subject. The conduct which the Federal statute penalizes is the breach of industrial awards. There is no collision between an intention to deal exclusively with disobedience of awards and a law for the punishment of breach of contract. The Federal instrument, which prescribes performance of the shearers' contract of service, is the award of the Commonwealth Court of Conciliation and Arbitration. But unlawful as it is to depart from the course which such an instrument describes and requires, the instrument itself is, nevertheless, not "a law of the Commonwealth" within the meaning of those words in sec. 109. Sec. 109 cannot, therefore, operate directly upon it so as to render a State law invalid because it is inconsistent with the intentions which the arbitrator expresses in the award. But these considerations do not end the matter. They do establish that if State law is superseded it must be upon the ground that the State law thereupon becomes inconsistent with the meaning and effect of the Commonwealth Conciliation and Arbitration Act itself. But the provisions of that Act itself, which establish awards made under its authority, may have a meaning and effect consistently with which State law could not further affect a matter for which such an award completely provides. If the Act means not only to give the determinations of the arbitrator binding force between the disputants but to enable him to prescribe completely or exhaustively what upon any subject in dispute shall be their industrial relations, then sec. 109 would operate to give paramountcy to these provisions of the statute, unless they were ultra vires, and they in turn would give to the award an exclusive operation which might appear equivalent almost to paramountcy.

Close consideration of the reasons given by Isaacs, Rich and Starke JJ. in Clyde Engineering Co. Ltd. v. Cowburn[6] shows that the view upon which they acted in that case and applied afterwards in H. V. McKay Pty. Ltd. v. Hunt[7] was substantially that the Constitution empowered the Parliament to give and that Parliament had given the award this exclusive authority. The view there taken, when analyzed, appears to consist of the following steps, namely: (i.) The power of the Parliament to make laws with respect to conciliation and arbitration for the prevention and settlement of industrial disputes extending beyond the limits of any one State enables the Parliament to authorize awards which, in establishing the relations of the disputants, disregard the provisions and the policy of the State law; (ii.) the Commonwealth Conciliation and Arbitration Act confers such a power upon the tribunal, which may therefore settle the rights and duties of the parties to a dispute in disregard of those prescribed by State law, which thereupon are superseded; (iii.) sec. 109 gives paramountcy to the Federal statute so empowering the tribunal, with the result that State law cannot validly operate where the tribunal has exercised its authority to determine a dispute in disregard of the State regulation.

The distinction between this doctrine and one which gives to sec. 109 a direct application to Federal awards is probably not confined to the mode of reasoning by which the conclusion is reached. It may well be that the distinction extends to the results produced. If a Federal statute forbids a particular act or omission and means to state what shall be the law upon that specific matter, any State law which dealt with the same act or omission would become inoperative, and it would probably be of no importance whether each Legislature was directing its attention to the same general topic or had dealt with the same act or omission in the process of legislating upon two entirely different subjects. For instance, sec. 4 of the New South Wales Masters and Servants Act, assuming it otherwise to apply to him, would doubtless be superseded in relation to an officer governed by the Commonwealth Census and Statistics Act 1905-1920 who wilfully neglected to fulfil the duties of his office, because sec. 22 of that Act penalizes such conduct although in the process of dealing with a very different subject. On the other hand, the Commonwealth Conciliation and Arbitration Act in giving force and effect to awards necessarily confines their exclusive authority to the regulation of industrial relations and, moreover, to the regulation of industrial relations which are in dispute. It may perhaps follow from this rule that, while the arbitrator can make his award the exclusive measure of industrial rights and duties between the disputants, the laws of a State which do not regulate industry at all are not inconsistent with the exclusive authority which the Commonwealth statute gives to the award merely because they deal with specific conduct which, as between the disputants, is dealt with by the award. For example, if the award in this case expressly forbad shearers to injure sheep when shearing, it would not be a necessary consequence that a shearer who unlawfully and maliciously wounded a sheep he was shearing could not be prosecuted under the State criminal law for unlawfully and maliciously wounding an animal. It is not, however, necessary to determine whether this distinction in the application of the doctrine is valid. It may be assumed that provisions of State law which prohibit acts or omissions irrespective of the relation of employer and employed, and without regard to any other industrial relation or matter, are not superseded under sec. 109 merely because it happens that in their industrial aspect the same acts or omissions by parties to a dispute are forbidden by Federal award and by this means made punishable under the Federal statute. But, in this case, the State law, sec. 4 of the Masters and Servants Act 1902, deals directly with the relation of employer and employed, and in virtue of that industrial relation makes penal the very default which the Federal law punishes somewhat differently in the regulation of the same relation.

The case, therefore, is not one in which conduct made punishable by State law on grounds which do not affect industrial relations is forbidden by an award as a regulation of industry, and thus brought also within the penalties of the Commonwealth Conciliation and Arbitration Act.

It may be objected that the present case does not fall within the doctrine which ascribes such efficacy to an award because the Federal tribunal has not made an award in disregard of State law but, so far as material, has in effect forbidden the very neglect to perform a contract of service which State law punishes; and that it does not fall within the description of inconsistency illustrated by Hume v. Palmer[8] because there the respective Legislatures had each directed its attention to the same subject and both had themselves prescribed the rule upon it, while here the Commonwealth Parliament directed its attention to disobedience of awards and the State Legislature dealt only with the breach of contracts. But the substance of what the Federal award did in this case was to command performance of the prescribed contract as an industrial duty proper to be imposed and enforced by Federal law according to the sanctions which it provides, while the State law required performance of the same contract as an industrial duty proper to be imposed and enforced by its authority and according to its sanctions. According to the doctrine deduced from the judgments of the majority of the Court in the cases of Clyde Engineering Co. v. Cowburn[9] and H. V. McKay Pty. Ltd. v. Hunt[10], the Commonwealth Conciliation and Arbitration Act gives full and complete efficacy and exclusive authority to this regulation of the Federal tribunal, and sec. 109 makes this statute prevail.

In these conditions, in so far as it affects persons bound by the award, sec. 4 of the Masters and Servants Act 1902 is inconsistent with the provisions of the Federal statute and, by virtue of sec. 109 of the Constitution, the latter must prevail, and the former to the extent of the inconsistency is invalid. Accordingly no offence was committed against State law by the applicant, and the order nisi for prohibition must be made absolute.

Solicitors for the respondents, McLachlan, Westgarth & Co.

[1] (1926) 37 C.L.R., at pp. 489 et seqq., 524.

[5] [1926] HCA 50; (1926) 38 C.L.R. 441.

[6] [1926] HCA 6; (1926) 37 C.L.R. 466.

[7] [1926] HCA 36; (1926) 38 C.L.R. 308.

[8] [1926] HCA 50; (1926) 38 C.L.R. 441.

[9] [1926] HCA 6; (1926) 37 C.L.R. 466.

[10] [1926] HCA 36; (1926) 38 C.L.R. 308.