Nelungaloo Pty Ltd v Commonwealth [1952] HCA 11

Nelungaloo Pty Ltd v Commonwealth [1952] HCA 11 | Case summary | Zoe

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not affect any constitutional power of a State whether by way of annihilation or by way of rendering it subordinate. It was expressly stated in Jones' Case that the inter se question only arises when a Commonwealth law made under a concurrent power obtrudes in operation into the territory of a State, the validity of which falls for decision, but this Court in Bx parte Nelson | No. 2] (1) took that statement to mean that the inter se question arises because the valid Commonwealth power was overshadowing, either annihi- lating or subordinating, the State law. That was not acceptable. Dixon J. explained in Nelson's Case that there is an inter se question under a concurrent power, whenever a Commonwealth law works into the State, the word State so used meaning, apparently, the territorial quality of the State. It is now conceded that an inter se question is involved and use is made of the circumstances that there is here no conflict of power, as a reason for the certificate, though it is said not to be a reason for denying that it is an inter se question. The Privy Council takes a view of an znter se question which extends it beyond the ideas of this Court, and the case falls exactly in the area between what this Court formerly thought was an inter se question and what the Privy Council now says is an inter se question. This case is beyond the considerations which have fundamentally moved the Court to refuse a certificate. There has been some weakening of the operation of s. 40a of the Judiciary Act 1903-1950. The Privy Council has now held that if the question of the validity of a law passed under s. 51 of the Constitution can arise, albeit for the first time before that Council, and whether it is merely involved in the powers of statutory construction or not, the Council loses jurisdiction. On that view of inter se questions it is difficult to comprehend just how such questions can arise between States. Circumstances which afford special reasons for granting a certificate now, bearing in mind the change which has taken place, are (i) that there has not been any decision at all by any Court upon the question ; (ii) that the particular question, although now technically inter se, does not in reality involve any conflict of power between State and Commonwealth; (iii) that the inter se point is not the central point of the case; (iv) that there are large and important questions of general significance in issue between the parties, particularly if the general questions have not been resolved by this Court for reasons acceptable to a majority of its members who participated in the case ; and (v) that this Court has not had an opportunity to decide the point. The Privy Council is the only tribunal which can decide it in the case.

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give judgment in an appeal from this Court if in any conceivable event the consideration and the extent of any Commonwealth concurrent power, whether to assist construction or otherwise may arise on the hearing of the appeal, unless in cases where this Court has decided the matter, the appellant submits to this Court's decision and offers reasons in support of the appeal which, being accepted, may result in its allowance without consideration of the inter se point. On the question of the meaning of an inter se point, the three Privy Council decisions overrule Hx parte Nelson (No. 2] (1) and so much of Australian National Airways Pty. Ltd. v. The Commonwealth | No. 2] (2) as was founded upon it, except in so far as those cases decide that the delimitation of an exclusive Common- wealth power does not give rise to a question inter se. The Privy Council followed the views expressed by it in Jones' Case (3). It is not right that every consideration of the extent of Commonwealth concurrent powers must involve a question inter se. The cases show that the test of whether an inter se question arises is whether a Commonwealth law, passed under a concurrent power, would, if valid, operate in a State, where formerly only State law operated. The first step is to ascertain where the matter now is in relation to broad problems. In the Banks' Case (4) the Privy Council accepted the view that no appeal is permissible without a certificate if the relief sought on appeal cannot be granted without the deter- mination of an inter se question, The Privy Council has now gone much beyond that. In this case their Lordships seem to have thought there is not any inter se point in s. 92 of the Constitution, not because there is no conflict but because the law cannot validly operate anywhere, s. 92 being a prohibition in all States. Equally when one gets to exclusive power there is not any room for a State law at all, so there is not any conflict in a territorial sense. The decision of the Privy Council in this case advances the interpre- tation of s. 74 a stage beyond the decision in the Banks' Case. In that case the formula proffered was that if the appeal necessarily involved the decision of the inter se point it was an appeal which fell within the scope of s. 74. From the Nelwngaloo Case it is clear that the position laid down in the Banks' Case as to the limitation of the jurisdiction of the Privy Council has been extended. It is

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no longer necessary that the point must inevitably be decided in the appeal. It is sufficient if it might be. Jones' Case (1), the Banks' Case (2), Grace Bros. Casé (3) and the Nelwngaloo Case (4) show that the propositions put to this Court as flowing from these cases are correct. The Privy Council has no jurisdiction, even though the High Court has not decided the point and the Privy Council itself may not be called upon to decide the point. Circumstances which, as mentioned above, ought to be regarded as special reasons are present in this case. The precise inter se point which is suggested here is whether reg. 19, as part of the scheme of acquisition, read with reg. 14 offers just terms. The Commonwealth conceded before the Privy Council that reg. 19, if invalid, was severable. There is a stalemate in which there is not any effective decision of this Court. From regs. 14 and 19 of the Wheat Acquisition Regulations it is plain that a grower is not entitled to be paid any sum of money as a right until the Minister makes a recommendation. There was never a right at any stage to get anything out of the pool. The Minister never did make a determination. There have been advances only. The attitude of the Privy Council was that before the applicant got the large amount it had to get rid of reg. 19 in some way or other, or the Privy Council had to adopt the construction in Tonking's Case. If the initial order had not been made in that way, what has happened could not have happened. It would then have been the defendant- respondent and not the applicant-appellant who would have applied for the certificate. All that stems from the form of the order. Before the trial judge this case was conducted, by common consent, on the footing of Tonking's Case (5): see (6). All the facts, except the price, were found in favour of the plaintiff. As a result of a review of the judgments delivered in this Court it emerges: (i) that there is not any view of the case which is acceptable to any majority of this Court ; (ii) that the judgment of the trial judge, in particular for its reasoning and its result,

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does not involve any conflict of powers between State and Com- monwealth, and that is so even if it be an inter se point. Regula- tions 14 and 19 together constitute a law authorizing acquisition and no more. It would not be possible by construction to hold that the Commonwealth was purporting to take the exclusive power to acquire wheat at that time. That could not be construed into the regulations, consequently there is not any limitation of any State power by the mere enactment of the regulations ; it does not pass any shadow upon State power by its mere enactment. Any Commonwealth law which merely authorizes acquisition does not cast any shadow on the constitutional powers of a State. The element which is the reason for this Court refusing certificates in previous cases, namely, a conflict of powers, is not present in this case. It is an odd result that the applicant should be a suppliant for a certificate to enable it to overcome a point, taken by the Crown for the first time in the Privy Council, which point, if the Crown had taken it before the Full Court, or Williams J., would have been decided adversely to it. There is not any satisfactory view of this Court on the real matter in dispute between these parties and the point itself has no great constitutional significance. This is a very apt case for a certificate. There was not any conflict of powers in this case because the question directed to invalidity is merely whether just terms are provided. The presence or absence of just terms does not add to State power or detract from it. It is really a limitation on the Common- wealth power. Certificate applications were dealt with in Murray & Co. v. Collector of Customs (1); Deakin v. Webb (2); Baater v. Commissioners of Taxation (N.S.W.) (3); Colonial Sugar Refining Co. Lid. v. Attorney-General for the Commonwealth (4). In the last-mentioned case an equal division of opinion was regarded as a very substantial reason, and Isaacs J. thought that another substantial reason was that the matter could only be remedied by its being dealt with by the Privy Council. Otber cases were : R. y. Commonwealth Cowt of Conciliation and Arbitration (5) ;

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A. R. Taylor K.C. (with him R. Else-Mitchell), for the respondents. The issue of value has been concluded against the applicant by the views of five members of the Court to two. Four members of the Court, which for that purpose is the final court of appeal, agreed entirely in principle with the reasons of the judge of first instance. The mere fact that at the hearing of the appeal before the Full High Court counsel for the Commonwealth took the view that the question of the validity and the question of the construction of the regulations in this case was governed by Tonking's Case (1), and that it was not competent to argue that reg. 19 was exclusive in view of the decision in that. case, thereby, according to counsel for the applicant herein, depriving this Court of an opportunity of deciding the point, does not warrant the granting to the applicant of a certificate under s. 74 of the Constitution. Such an argument on the part of the applicant seeks to place it in a much better position than it would have been if the point had been taken and determined there and then in its own favour or against it. The applicant should not be put in any better position because the matter was not so raised by counsel, and was not pronounced upon by this Court (Banks' Case (2) ). That is the very type of case to which the Privy Council had regard in the Banking Case (3) when it discussed s. 74. The Privy Council has taken the view that it is not for that Council to determine inter se questions, even though they have not been determined by this Court or arise in any way, and there is not any judicial pronouncement upon them by this Court. If they are involved the matter cannot go to the Privy Council without a certificate. The Privy Council is not the only body at this stage which can determine the question, because, in another suit, involving similar features, this very point could be determined by this Court as it is at present constituted: This Court was intended to be the ultimate court of appeal except in very special circumstances. It is immaterial whether it is the central

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point of the case or a point on the outskirts of the case. Section 74 was intended to prevent those questions from getting to the Privy Council in any shape or form, and, indeed, if that was not the intention the whole purpose of s. 74 would be defeated. In effect the applicant's counsel suggests that the decision of this Court in the instant case is a condition precedent to the application for a certificate, and to him the position is that the iter se point should be decided by the Privy Council because there is another point which ought.to be determined by the Privy Council and a certificate can only be granted if the ix¢er se point involved is one which ought to be decided by the Privy Council. Section 74 was intended to prevent an inter se point in any way getting before the Privy Council unless that point, in the opinion of this Court, should be decided by the Privy Council. If it were otherwise inter se points would come before the Privy Council almost indiscriminately and its judgments would compete with the judgments of this Court. The words " ought to be decided" in s. 74 refer to one circum- stance only, the importance of the point itself. Colonial Sugar Refining Co. Ltd. v. Attorney-General for the Commonwealth (1) was a special case, there being an equal division of opinion between the then only four justices of this Court. In Nelson's Case the suggestion was that one other justice was available whose opinion might be taken. Similarly, a course open to the applicant is that the opinion of this Court, as at present constituted, on this point could be taken. Contrary to' the view expressed on behalf of the applicant there is a principle common to the majority of this Court. The judgments given by the members of this Court on the question of value were satisfactory. The point under s. 74 arose from the necessity for supporting the judgment of this Court before the Privy Council, and it was inevitable that the point had to be argued before the Privy Council upon an analysis of the judgments given in this court of appeal. The fundamental purpose of the Wheat Acquisition Regulations was not that of providing the community with cheap bread. The series of Acts designed to stabilize the wheat industry and provide a payable price for wheat are listed in Nelungaloo Pty. Ltd. v. The Commonwealth (2). The legislation was dealt with by the judge of first instance (3). The main purpose of the scheme was to stabilize the wheat farmers' returns from wheat. After the war commenced there was in exist- ence a general scheme of price fixing. It was a matter of common knowledge that that common system of price fixing was used to

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would not have been some other controls, because other controls were operating with respect to every commodity where Australia had an exportable surplus. That view commended itself to the trial judge and also to four of the members of the Court who sat on the appeal: see (1). It will be seen from those references that five members of the Court have expressly and entirely agreed in principle as to the manner in which this question should be approached, and their findings on the facts are identical because they were all concerned with the question of whether it would be more than £4,295. There was a very small margin between the figures, yet every member of the Court said there was nothing new which satisfied him that the plaintiff should get more than £4,740, certainly not any more than the amount he would get out of the pool. Those five members of the Court were entirely in accord as to the principle to be applied in determining compensa- tion. The common principle among the five judges was simply to say that to ignore the facts which arose and were likely to arise from the war conditions then prevailing was to close one's eyes to reality. The trial judge found that there was not any ordinary market at the date of the acquisition, not merely because the Wheat Board was operating, but because of the disturbed conditions at the time. It is the Court's responsibility to deal with this matter as if special leave to appeal had not been granted. When one considers the certificate application the considerations which were relevant to the leave application in the Privy Council are not material. They do not apply on an application for a certificate. The mere fact that leave has been given does not indicate in any sense that the Privy Council regarded the judgments as unsatisfactory. The figures prepared on behalf of the applicant do not take into account a number of difficulties, e.g., the varying world position with regard to export price. When he makes his contract a person does not know what he will get on the world market. It may be uncertain whether it will rise or fall. When he makes his contract with the grower the merchant does not know what proportion of the crop is going to be exported, and that is a vital consideration in determining what taxes will have to be paid by way of wheat export charge or wheat tax under, inter alia, the Wheat Industry Assistance Act 1938, the Wheat Tax

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Act 1946, and the Wheat Export Charge Act 1946. He cannot know until the season is finished. Regard must also be had to the merchant's profits, and to the delays he is going to experience because of difficulties of transport, shipping, &c. Another factor was that there was a ready-made means for preventing the exporta- tion of wheat under the Customs Act. In a consideration of the problematical question of the value of the plaintiff's wheat, a number of matters must be considered, including, inter alia, that the price per bushel obtained by the Wheat Board for wheat sold overseas was not in any true sense a market price; whether, operating independently and in view of the competition the applicant would not have done nearly as well as the board in the matters of transport, shipping and storage space. The net return to the grower would be affected by those considerations. Further, it was for the applicant to make out its case that its wheat was worth more. That onus is not discharged by merely stating that because in normal times the local price of wheat followed the export price of wheat that was the value of its wheat in the then abnormal times. It was shown by one of the applicant's own witnesses that in time of emergency or wartime the local price did not follow the export price. The pool was never intended to perform the function of keeping prices down. It was used to keep the wheat market in relation to the community in exactly the same position as the general system of price fixing was used to control other commodities. It has long been established by this Court that the control of prices during wartime is a legitimate exercise of the defence power, and in fact it was so used under the machinery of the National Security (Prices) Regulations : see also Prices Regulation Order No. 1015 and s. 112 of the Customs Act 1901-1951. The question of value was very important, it affected many people and involved a great deal of money, but the circum- stance to which regard had to be had for the purpose of determining value was an entirely Australian circumstance which involved the consideration of the whole economic set-up of this community during the war, a problem with which the members of this Court are much more familiar than could be the Lords of the Privy Council. That in itself is one reason why the matter should not go to the Privy Council. Their Lordships are, with respect, quite unfamiliar with marketing problems of this kind which do not arise in England. The claim by the applicant is not the only claim which is involved. To pay other claims would entail a vast sum of money and it would mean scrapping the whole of the pooling arrangements after five members of this Ccurt

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was said concerning the inter se point was by counsel for the respondent, who said that the point was so inextricably mixed up with the appeal itself that it might avoid two hearings if the appeal itself was debated and the argument on the inter se point were taken during the general argument. 'To that counsel for the applicant agreed. The validity of reg. 19 became, in effect, the essential point in the case. The point arose directly upon the analysis of the judgments of this Court in the Nelwngaloo Case. The applicant was not put in the position of being an applicant merely because of a curial error. If a small verdict had been returned for the applicant it still would have been dissatisfied. If it had appealed on the ground that the trial judge had undervalued the wheat then the whole question would have been open to appeal, and it would have been open for the respondent to say that his Honour did that on a wrong basis ; it would have been open to the respondent to cross-appeal on that point. So the present applicant would have been the one to appeal to the Privy Council because of the estimate of value. The question of the definition of an exclusive legislative power in the Commonwealth does involve an inter se point. Their Lordships' attention was drawn to the fact that this Court had held that s. 51 (xxxi.) was the sole power under the Constitution to make laws with respect to acquisition of property, and they did not indicate any disagreement with that. They were referred to Johnston Fear & Kingham & the Offset Printing Co. Pty. Lid. v. The Commonwealth (1) and to Bank of New South Wales v. The Commonwealth (2). The attention of their Lordships also was drawn to the fact that this Court did decide that par. (xxxi.) of s. 51 of the Constitution does not only authorize the making of laws for the acquisition by the Commonwealth of property, but it authorizes laws affecting the transfer of property from one person to another person. They were referred to McClintock v. The Common- wealth (3) and Bank of New South Wales v. The Commonwealth (4). This question was discussed in Collins v. Hunter (5). The first question to be determined in this case is whether the Common- wealth had legislative authority to establish marketing pools or (1) (1943) 67 C.L.R., at pp. 317, (3) (1947) 75 C.L.R. 1, at pp. 23, 35, 318, 325. 36. (2) (1948) 76 CLLR. 1, at pp. 265, (4) (1948) 76 C.LR., at p. 250.

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whether that authority solely resided in the States, or whether, if the Commonwealth had power to make laws with respect to the establishment of marketing pools, this was a valid pool. Two questions really arose: first could the Commonwealth establish marketing pools at all, and, if so, whether this was a valid pool, and that was argued in the Privy Council. That judgment, how- ever, does say that the question whether the power of a State will be impaired or not is not the test of an inter se question. The Privy Council took the view that the delimitation of concurrent Commonwealth legislative power does involve a delimitation of the area of a State exclusive of the concurrent power. Apart from the necessary consequence of the delimitation of Commonwealth power, it is not part of the Privy Council's function to define the ambit. of State legislative power (Nelungaloo Case (1); Jones' Case (2) ). The applicant was not put in its position by an unsatisfactory judgment of the Privy Council, which, in effect, entitled it to a certificate under s. 74. Section 74 was not devised for the purpose of enabling this Court to do what it conceived to be justice to the parties. It was intended to make this Court the final arbiter on s. 74 questions, otherwise there would not be any point in it. It is a stronger case for refusing a certificate where there have not been any pronouncements from this Court than where there have been such pronouncements. The Privy Council obtains some assistance and guidance from pronouncements of this Court, but where there have not been any such pronouncements this Court binds itself for all time on questions on which this Court is supposed to be the final arbiter. The importance of the general questions have to be strong to carry the inter se question. If s. 74, however wide it may be, represents a matter of high policy as the cases have said, there should be reserved for the consideration of this Court all those questions which fall within it. In such cases the Court is the final court of appeal where the inter se point arises directly or is involved with other questions and s. 74 recognizes this is the final court of appeal however that question arises. Allied to that is the idea that some inter se matters may get to the Privy Council by appeals from the Supreme Courts of the various States, but that possibility is not any reason why the gates should be opened, or that this Court should grant certificates. The fact that there have not been any decisions of this Court on this point is a reason why a certificate should not be granted. The iter se point is essentially an Australian problem with an essentially Australian

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inter se point arises directly, or that in cases where the inter se point did not constitute the central point of the case the Privy Council was to be regarded as the ultimate court of appeal. The decision of this Court on all inter se points should be final and conclusive. It is the grave responsibility of this Court to decide those matters, and it is guilty of a breach of trust if it declines to accept that responsibility. All matters arising under s. 74 are of great importance (Deakin v. Webb (1) ; Baater's Case (2); Flint v. Webb (3)). Those cases pro- vide the only illustrations of circumstances in which it has been suggested that it would be proper to give a certificate: where the rights or interests of other parts of the Empire were concerned were rights which incidentally involved or showed signs of serious dis- turbance between the States. In Colonial Sugar Refining Co. Ltd. v. Attorney-General for the Commonwealth (4) it was necessary to certify in order to end a deadlock between the four effective members of the Court. The question involved in that case was not really an inter se point, but the application was made for more abundant caution. An equal division of opinion in this Court is not of itself a ground for the granting of a certificate (Nelson's Case (5)). In the case now before the Court there was not any equal division on matters of principle. On the allied question, the question of value, the decision was five to two against. A certificate was refused in New South Wales v. The Commonwealth [No. 2] (6), which concerned a most important question which arose during the time of the financial emergency. The primary matter was that the responsibility was cast upon this Court. That view was adhered to in the Arrway's Case (7). All questions which fall within s. 74 are matters of considerable gravity and importance. If those are the tests for determining whether a certificate should be granted in relation to inter se points, and if those tests were evolved to cover matters which are thought to be within s. 74, at the times when the principles were evolved there would not be any reason for apprehending a different set of principles, when it is found inter se points can arise in ways that previously were not thought possible, and the importance of the inter se point, the function and responsibility of this Court must remain the same. The only test in all those cases is whether the Court is not prepared to take the

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of an article is a bounty upon the production of goods and so falls within the Federal legislative power conferred by s. 51 (iii.) is. because of s. 90, necessarily to deny that the States possess any power to give that particular class of benefit to manufacturers. There is thus a mutual relation between the two powers consisting of a common boundary. But the existence of Federal legislative power usually does not mean the complete absence upon the same subject matter of State legislative power. Usually it does mean that by virtue of s. 109 State power upon that subject matter is not absolute. Where such a Federal power exists any legislation affecting that subject matter by a State Parliament in the exercise of the residuary legislative power of the States is liable to be defeated by an exercise by the Federal Parliament of its legislative power upon that subject matter. Of this very many examples have come before the Court in consequence of ss. 38a and 404 of the Judiciary Act 1903-1950, but it is perhaps best to illustrate the statement by an imaginary case. Suppose that it was sought to legislate under s. 51 (xvii.), bankruptcy and insolvency, for the winding up of corporations unable to pay their debts. To interpret the power as extending to the winding up of insolvent corporations would not deprive the States of legislative power with respect to that matter. But it would mean that State legislation touching the subject would be liable to invalidation by the adoption by the Federal Parliament of an inconsistent law. In the case of Federal legislative powers made paramount in this way by s. 109, to advance or retract the apparent boundary of the power by judicial decision is not to diminish or to enlarge the area of legislative power possessed by the State. It is but to affect the quality, the absolute quality, of State power. For the legislative power retained by the States may be considered as falling into two parts possessing different qualities. The State legislative power which is concurrent with Federal legislative power may be described as being by virtue of s. 109 subordinate or conditional. But where there is no para- mount concurrent legislative power in the Commonwealth State power is exclusive and absolute. To advance or retract Federal legislative power by interpretation, where by virtue of s. 109 it is a paramount concurrent power, is therefore to diminish or enlarge the area of State absolute or exclusive legislative power. There is a common boundary between Federal legislative power and State absolute power and this has been considered to provide a sufficient mutual relation between the legislative power of the States and that of the Commonwealth to involve the limits inter se of such

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The very general statement has been thought warranted that the interpretation of any paramount concurrent legislative power of the Commonwealth always involves a question of the limits inter se of State and Federal constitutional power. This is not the same thing as saying that all questions whether the Commonwealth has exceeded a power conferred by s. 51 are questions inter se. For it is not all powers conferred by s. 51 that are in every respect paramount. Paragraph (xxxvi.) confers a power by reference to a number of sections of the Constitution concerning matters with respect to which the Parliament may provide : see ss. 3, 7, 10, 22, 24, 29, 30, 31, 34, 39, 46, 47, 48, 65, 66, 87, 96, 97. They are not matters with which the States could have any concern and, if a common boundary between the Federal power over them and State power is conceivable at all, it would, I suppose, be found to be a boundary between a State power and a Federal exclusive power. Then the power with respect to bounties conferred by par. (iii.) is made exclusive by s. 90. The power to impose taxation which forms part of the power to make laws with respect to taxation conferred by par. (ii.) has been regarded as parallel and concurrent with the taxing power of the States, though no doubt par. (ii.) extends to incidental matters over which the Federal power may be paramount. In the same way, except as to incidental matters, it is not easy to see how any exercise of the powers conferred by pars. (x.), (xxvill.), (xxx.), (xxxiii.) and (xxxiv.) could affect State law as a result of the application of s. 109. However s. 51 (xxxi.) confers a concurrent power, but if a conflict of legislation passed in its exercise with State legislation arose s. 109 would undoubtedly apply. Nevertheless there are certain features about a power to make laws with respect to the acquisition of property upon just terms which made it uncertain whether in all respects its interpre- tation did involve an inter se question. The central purpose of the power, the acquisition of property, is not calculated to bring about a collision of Federal and State authority until both the Common- wealth and a State set about acquiring the same property. Legisla- tion upon matters incidental to the acquisition of property might be of a more general character and raise questions about a common

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stated in a' passage from Lord Loreburn's reasons (1), which is set out earlier in their Lordships' judgment in the present case (2). Their Lordships, as I understand, interpret that passage as meaning that the powers of the President of the Court of Conciliation and Arbitration were constitutional: cf. per Isaacs J. in Pirrie vy. McFarlane (3). If so it may be assumed that a decision as to the ambit of their operation within a State would determine the limits of an inconsistent use of State power. But ultimately that would come back to the effect of s. 109 applied to valid Federal legislation con- ferring powers upon the President. Validity involves the interpreta- tion of Commonwealth legislative power. It is not easy to apply Lord Loreburn's observation that the existence of State power was for the High Court to decide. Independently of s. 109 no question of the existence of State power could arise except as to matters outside the territory of the State, and then it is not a matter falling within the original jurisdiction of this Court unless it arises incidentally to some Federal question. There is no trace in the substantive proceedings, R. v. Commonwealth Court of Conciliation and Arbitration (Builders' Labourers' Case) (4) of any question about the positive existence of State power. The words "however much or little the Commonwealth may be required to conform to State laws or State awards " is evidently an echo of the argument, which must have been advanced before the Judicial Committee, but had sometime earlier been rejected in this Court, that a Federal industrial award cannot be made inconsistently with State law because of the connotation of " arbitration". The expression " however much or however little the State may impose laws upon its own subjects " can refer only to territorial limitations and limitations arising from the existence of Federal power. The statement that the question whether the powers of the State would be impaired was not the test must mean that, even though a decision as to the extent of Federal powers might not imply or involve any impairment of State power, there might yet be a question inter se. For it can hardly be doubted that if a decision as to the extent of Federal power would necessarily involve or imply a derogation of State power there is a question inter se. This seems to be clearly contemplated by the passage immediately preceding (5). Referring to the compound conception of acquisition- on-just-terms the judgment of the Privy Council says "So far the Commonwealth is authorized, beyond that it has no authority

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inter se question. It was decided also that, though the appellant might have succeeded in the appeal without obtaining a determina- tion on the inter se question, yet unless he acquiesced in the High Court's determination on it or obtained a certificate from the High Court, the jurisdiction of His Majesty in Council was ex- cluded". Accordingly the appellant has been compelled to apply to this Court for a certificate before it can prosecute an appeal in the Privy Council. It was submitted that the real issue between the parties is the amount of compensation the Commonwealth should pay the applicant for its wheat, whereas the question of the constitutional validity of reg. 19 is a minor and subsidiary issue and not a question upon which the Privy Council would be likely to give a judgment upon the meaning of s. 51 (xxxi.) of the Constitution of general constitutional importance. I cannot agree. It is impossible to forecast how far the argument on the consti- tutional question might travel. I would have no hesitation myself in holding that reg. 19 does not of itself provide just terms. Left to myself I would have preferred the construction of the regula- tions that reg. 19 was invalid but severable, leaving reg. 14 as the sole method of assessing compensation. But I felt that I should apply the decision of the Full Court in Tonking's Case (1) and hold that regs. 14 and 19 provided alternative methods of compensation. The acquisition of the wheat was not to my mind in essence a scheme for the compulsory marketing of the commodity. The purpose was to acquire the wheat as a war measure so that the Commonwealth could supply its own internal needs and send the surplus to its allies. This was the purpose stated in reg. 14. It is such an overriding purpose that s. 46 (b) of the Acts Interpretation Act 1901-1948 would have saved reg. 14 despite the invalidity of reg. 19. On the other hand, Diwon J. said in this Court: "I think that the meaning of the Wheat Acquisition Regulations is that every wheat grower should be compensated for the acquisition of his wheat by payment of his distributive share in a pool and not otherwise" (2). McTiernan J. said : - " The basis of compen- sation is so explicitly stated by reg. 19 (24) that it is, I think, impossible to hold that the remedy provided by reg. 19 is but an alternative remedy to a right of action for compensation. The only remedy which the appellant is entitled to pursue is to forward a claim to the Board in accordance with reg. 19. That conclusion is, I think, required by the express terms of the regulations " (3). It is apparent from these differences of opinion that the argument

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In deciding whether a certificate should be granted this Court has taken into consideration the nature of the particular inter se question, and the " special reason " that has led to the granting of a certificate related to the inter se question itself, or to its proper determination. In no instance, so far as I am aware, was the nature or importance of the other questions arising in the litigation pressed, or suggested, as proper to be taken into account. The opportunity to do so may not have occurred. If the inter se question was merely an Australian question it was considered that this Court should finally determine it (Flint v. Webb (1) ); Australian National Airways Pty. Ltd. v. The Commonwealth (2), although Higgins J. suggested in Flint v. Webb (3) that " signs of dangerous disturbance between States, or between a State and Commonwealth, such as a decision of the High Court would not allay" might render it advisable that the Judicial Committee should determine the question. In the Colonial Sugar Refining Co. Ltd. v. Attorney-General for the Commonwealth (4), where there was an equal division of opinion of this Court on an inter se question, it was unanimously decided that it could be satisfactorily disposed of only by the Judicial Committee, and a certificate was granted. Tf the determination of the inter se question would have affected "the public interests of parts of the Empire external to this Commonwealth " (Deakin v. Webb (5), per Barton J.), or if " extra- Australian rights were incidentally involved " (Flint v. Webb (6), per Higgins J.), this was regarded as a ground for granting a certificate. But from the explanation of the origin of the expres- sion "any special reason" in s. 74 given by Barton J. in Deakin vy. Webb (7) it might seem that a certificate might also properly be granted where extra-Australian rights would be affected by or involved in the determination of another question in the case. The explanation given by his Honour is, I think, consistent only with this view. It could hardly have been intended that the

[287]

se question arises unless a decision that the impugned exercise of a Commonwealth power was valid would result either in the annihilation of a State power or in the subordination of a State power, by virtue of s. 109 of the Constitution, to the impugned enactment. The judgment rejects this argument as being incon- sistent with the ratio decidendi of Jones v. Commonwealth Cowt of Conciliation and Arbitration (1), and it proceeds-to point out that in that case their Lordships had refused to consider what the State power was, for two reasons. The first reason was that that was itself a question for the High Court. Perhaps this indicates a view on the part of their Lordships that the question in Jones' ' Case was one as to the limits inter se of the constitutional powers of two or more States; but, however that may be, it treats the question as outside their Lordships' province and it is not the reason that matters in this case. The second reason was stated to be that the question whether the powers of the State would be impaired was not the test. This, as a proposition which is at once a part of the ratio decidendi of Jones' Case and contrary to the argument their Lordships were rejecting in the present case, can only mean, | think, that the test of an inter se question is not whether the powers of the State would be extinguished or subordin- ated by upholding the validity of the particular enactment under consideration. That is to say, it is not the proper method of approach to commence by defining the ambit of State power in a given field and then to see whether that power would be destroyed or reduced in scope by the impugned Commonwealth enactment if it were held to be valid and therefore to have overriding force by virtue of s. 109.» The method thus rejected had been espoused by the appellants in Jones' Case. They said first, that the State power over industrial disputes was confined to disputes which did not extend beyond the borders of the State, and, secondly, that a power so confined would not be affected by a decision that, contrary to the assertion which provided the ground of attack upon the Commonwealth award in question, the dispute which that award settled was a two-State dispute - in other words, the decision would be only that the particular dispute was outside State power and not that the award overrode State power. A similar approach seems to have been advocated by the appellant before the Privy Council in this case. Apparently the contention was this: the State power of compulsory acquisition never extended to property belonging to the Commonwealth ; the operation of reg. 14 if valid is only to vest certain property in the Commonwealth and thus to take it outside the scope of State power; therefore to uphold (1) (1917) A.C. 528.

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Judgment (295 paragraphs)

Cited By (4)