R. v Sutton,

R. v Sutton, - [1944] HCA 27 - HCA 1944 case summary — Zoe

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stamp duty - The Commonwealth v. New South Wales (1) ; garnishee and charging orders - Ezx parte Patience ; Makinson v. The Minister (2); companies - In re Henley & Co. (3), Re Commonwealth Agricultural Service Engineers Ltd. (4), Federal Commissioner of Taxation v. Official Liquidator of E. O. Farley Ltd. (5), Re Ockerby & Co. Ltd. (6); debtors - Attorney-General v. Edmunds (7); lite assurance - Attorney-General for New South Wales v. Curator of Intestate Estates (8); insurance - Broken Hill Associated Smelters Pty. Ltd. v. Collector of Imposts (Vict.) (9); prescription - Perry v. Eames (10) ; limitation - Public Works Commissioners v. Pontypridd Masonic Hall Co. Lid (11); arbitration - Crown v. Colonial Mutual Insurance Co. (12); common law procedure - Thomas v. The Queen (13); locomotives - Cooper v. Hawkins (14); local government - Hornsey Urban District Council v. Hennell (15) ; and maritime con- ventions - The Loredano (16). Some of the decisions referred to above are in respect of legislation similar to the National Security (Land- lord and Tenant) Regulations. The principle that the Crown is not bound by a statute except by express mention or necessary intend- ment applies in favour of the Crown in right of a State with respect to both State and Commonwealth legislation (Amalgamated Society of Engineers v. Adelaide Steamship Co. Ltd. (17) ; Keith's Dominions as Sovereign States (1938), pp. 147, 447) - and see In re E. O. Farley Ltd. (18). The rule as expressed and applied in R. v. Sutton (19) is in conflict with the proposition that the Crown is one and indivisible. If the contention is to be accepted that all Commonwealth legislation binds the Crown in right of a State, or that by virtue of s. 109 of the Constitution there is a conflict of laws which is automatically decided in favour of the Commonwealth, the unanimous decision in Federal Commissioner of Taxation v. Official Liquidator of E. O. Farley Ltd. (5) could never have been made. It is obvious, there- fore, that these contentions cannot be absolute. The principles enunciated in Roberts v. Ahern (20) were, at least, impliedly approved in Farley's Case (21). Commonwealth legislation therefore does not

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automatically bind the Crown in right of a State. If upon an exam- ination of Commonwealth legislation it appears that the Crown is not expressly mentioned or covered by necessary implication that legislation does not apply to the Crown in right of a State. The statement in the Court below that the defence power is an exclusive power and that in construing laws relating to defence a reference to the Crown, whether express or implied, should be treated as meaning the Crown in right of the Commonwealth, is erroneous and is not in accordance with the judicial expressions in Carter v. Egg and Egg Pulp Marketing Board (Vict.) (1). In any event any judicial pronouncement with respect to the exclusiveness of the defence power in relation to the principle " the Crown is not bound" was not intended to apply to anything but an exercise of the defence power proper, and was not applicable to the whole of the very wide ramifications of what might be termed the incidental or ancillary powers. The National Security (Landlord and Tenant) Regulations do not contain any direct reference to the Crown, nor is there any implication against the Crown. An express provision that the Crown in right of a State and the Commonwealth is bound is con- tained in the under-mentioned Regulations made under the National Security Act : - Evacuated Areas, Maritime Industry, Salvage, War Service Moratorium, and Building Operations, and an implica- tion to that effect arises in Regulations made under the Act as follows : - Blacksmithing Trades Dilution, Boilermaking Trades Dilution, Boot Trades Dilution, Electrical Trades Dilution, Engineer- ing Trades Dilution, Sheet Metal Trades Dilution, Metal Moulding Trades, Debtors' Relief (except as to debts due on recognizance or bond), Holidays and Annual Leave, Hours of Work and Ship- wrights' Trade Dilution. No such provision is inserted in the National Security (Landlord and Tenant) Regulations. Such a pro- vision does occur in the National Security (War Service Moratorium) Regulations : see reg. 6. Reg. 30 of the War Service Moratorium Regulations incorporates certain portions of the Landlord and Tenant Regulations for the benefit of protected persons. It is conceded that in this respect the Crown is bound, but it strengthens the proposition that the Crown is not otherwise bound by the Landlord and Tenant Regulations. The only provisions of the Landlord and Tenant Regulations applicable in Western Australia are those concerning termination of tenancies, the recovery of possession of premises and the ejectment of tenants. In all other respects landlords and tenants in Western Australia are governed by the provisions of the Increase of Rent (War Restrictions) Act

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the case of a tenant of a State from the case of a tenant of a private person or corporation. The Engineers' Case (1) is not an authority for the proposition that the States are not bound by Commonwealth legislation unless express provision therefor is made in the legislation. The principle of that case is that if the Commonwealth legislation be valid, that is, within the legislative power, then no consideration of State or State boundaries necessarily arises. If the States be within the particular legislative power of the Commonwealth, e.g., the defence power, then if the language used in the legislation be general and not inapt to include the States, prima facie they are included. The onus is upon those who contend that the States are not covered by general words in Commonwealth legislation to show some sufficient indication in the legislation itself to free the States from being bound by that legislation. As shown in the Engineers' Case (2), any argument which might be raised on R. v. Sutton (3) that the principle that the Crown is bound applies only in the case of legislation enacted by the Commonwealth Parliament under an exclusive power, cannot be supported because that has no relevance to the matter. There is not any regulation which has expressly bound the Crown in right of a State without also binding the Crown in right of the Commonwealth. There are, however, many regula- tions where on the face of them it is difficult to understand why they should not apply to the Crown in right of a State but in which there is not any mention of the Crown or the States, e.g., Man Power Regulations, Land Transfer Regulations, Land Transport Regulations, Food Control Regulations, Prices Regulations (except in respect of one matter only), Rationing Regulations, and Mobilization of Services and Property Regulations. Where it was intended that the States should be excepted from the operation of particular regulations it has been expressly so provided: See proviso to reg. 22 (2), Prices Regulations ; reg. 19 (1) (6), Coal Control Regulations.

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reference was made to the decision in R. v. Sutton (1). Indeed, the decision in the case was reaffirmed by the reference to it by Knox C.J., Isaacs, Rich and Starke JJ. (2) and by Higgins J. (3). I can find nothing in the Engineers' Case (4) which should be regarded as overruling or disapproving the decision or the principle of the decision in Sutton's Case (1), except that it must be taken that the Court in the Engineers' Case (4) did not approve of the sugges- tion of Griffith C.J. made in Sutton's Case (5), and by Isaacs J. (6), that "the Crown, as the head of the Commonwealth Govern- ment, is for many, if not all, purposes a separate juristic person from the Crown as head of a State Government." In the Engineers' Case (4) the Court said the Crown was one juristic person, and not several juristic persons, but it did not comment upon the rule laid down in Sutton's Case (1), which was expressed by Isaacs J. in that case by saying, with respect to Commonwealth statutes, that "there can be no room for the contention that the Crown, as representing the States, is not bound without express words or necessary implication" (7). Indeed, any comment upon that rule would have been clearly irrelevant in the Lngineers' Case (4). In that case the Court was considering whether a Commonwealth Act (the Arbitration Act) which expressly purported to bind the States could validly do so. In view of the explicit reference to the States in the Act, any consideration of the question whether or not a Commonwealth Act should be presumed not to bind the States unless they were expressly mentioned would have been completely _ irrelevant. No reference whatever to this question was made in the Engineers' Case (4), in which many decisions were reviewed and some were expressly overruled. Sutton's Case (1) was not expressly overruled, but was expressly said to be a correct decision that the Crown in right of a State was bound by a general Common- wealth Act (the Customs Act) which contained no reference to States. After the Engineers' Case (4), in Pirrie v. McFarlane (8), Higgins J. referred to Sutton's Case (1) as a case in which it was held by all the judges of the Court that the rule of construction as to the King not being bound by a statute "in a Commonwealth Act applies to

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the King as head of the Commonwealth Government, not to the King as head of the State Government." In the last-mentioned case Higgins J. emphasized the distinction between the King in - his Federal capacity and the King in his State capacity: "The - King in his State capacity is presumed, prima facie, not to mean - to bind himself ; and it is generally expedient to use express words - in a State Act in order to bind him and his State servants. But in a State Act no such presumption arises as to Federal servants - servants of the King in his Federal capacity ; and where there is no such presumption, there is no need for express words" (1). Accordingly a State Act was interpreted by Higgins J. and the majority of the Court as applying to Commonwealth servants, not by reason of an express provision in the Act stating that servants of the Crown should be bound, but, as explained by Starke J. (2) (with whom Knox C.J. agreed), because the State had power to make the general law in question, and there was no " limitation - upon the States, expressed or implied in the Constitution, with respect to interference with persons who are Federal officers." These arguments appear to me to be applicable e converso in the present case. There is no limitation, expressed or implied in the Constitution, which prevents the Commonwealth Parliament from _ including State officers within the scope of legislation otherwise - within its powers. The Commonwealth law in the present case, made under the defence power, applies to all lessors and all lessees. _ The Commonwealth Parliament has power to bind the States by its - legislation under the defence power - that power indeed expressly relates to " the naval and military defence of the . . . several States" (Constitution, s.51 (vi.)), and defence legislation prima facie - binds the States. Thus there is neither any general rule of construc- tion of Commonwealth statutes nor any limitation expressed or implied in the Constitution which precludes the application of such legislation to the States. What I have said appears to me to provide a reply to the conten- tion that because the Crown is one and indivisible the rule that the - Crown is not bound by a statute expressed in general words applies - so as to create a presumption that a State Government is not bound by any Commonwealth Act (or regulation). The principle that the Crown is one and indivisible is very important and significant from a political point of view. But, when stated as a legal principle, it tends to dissolve into verbally impressive mysticism, It is of little assistance in a practical system of law where a Commonwealth can

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v. Receiver-General of New Brunswick (1) ; In re Silver Brothers Ltd, (2); Federal Commissioner of Taxation v. Official Liquidator of E£.0. Farley Ltd. (3), But it should be observed that in the Oriental Bank Corporation Case (4) what were called two prerogatives of the Crown were in question (as to which see Food Controller v. Cork (5) ) - not only the " prerogative" that the Crown was not bound by a statute in the absence of express words or necessary implica- tion, but also the prerogative based upon the long-established rule of the common law that whenever the right of the Crown and the right of a subject with respect to the payment of a debt of equal degree come into competition, the Crown's right prevails: See Oriental Bank Corporation Case (6); In re Henley & Co. (7). The latter prerogative is based upon what was described in R. v. Wells (8) as "an incontrovertible rule of law, that where the King's and the subject's title concur, the King's shall be preferred "

see Commissioners of Taxation (N.S.W.) v. Palmer (9). In the other cases just mentioned relating to priority of Crown debts (Maritime Bank Case (1), Silver Brothers' Case (2), Farley's Case (3)), no reference was made to the presumption that the Crown is not bound by a statute unless expressly mentioned, no reasoning - was based upon that presumption, and those cases are not authorities with respect to the meaning or the scope of that presumption. In the Oriental Bank Corporation Case (4) the court did not have to - consider any question relating to the application of the presumption - in a federal system of government. These cases are authorities that " the incontrovertible rule of law" as to priority of Crown debts should be applied unless a statute clearly overrides it. But they do not, in my opinion, affect in any way the clear decision of five Justices in R. vy. Sutton (10) that the presumption as to the Crown not being bound by a statute enacted in general terms, with no express or implied reference to the Crown, should not be applied so as to bring about either State exemption from Federal statutes or Federal exemption from State statutes. The question as to whether a Commonwealth statute applies to a State or whether a State statute' applies to the Commonwealth should be determined in each case as a matter of construction by reference to its object and purpose as ascertained by a consideration of the specific provisions of the

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It has been decided by the highest authority that, in constitutional theory, the Crown is one and indivisible (Williams v. Howarth (1) ). It is by the Crown that all legislative and administrative authority is exercised throughout the Empire, although in each constitutional area such authority can be exercised by the Crown only through the agencies of the appropriate parliament and the appropriate group of constitutional ministers, so that, legalistically, it would be more strictly accurate to speak of the State of Western Australia in the right of the Crown than of the Crown in the right of the State of Western Australia (Theodore v. Duncan (2) ). Thus, the preroga- tives of the Crown are the prerogatives of a single, universal Crown, and enure for the benefit of each and every part of the Empire, save to the extent to which in any part any particular prerogative has been abrogated or diminished (In re Bateman's Trust (3) ). The principle was applied by this Court in Federal Commissioner of Taxation v. Official Liquidator of E. O. Farley Ltd. (4) in relation to competing rights of the Crown as creditor to be preferred above other creditors of equal degree, for the benefit of different treasuries. The constitutional principle that the Crown is one and indivisible is not limited to cases in which it is the scope of the prerogative which is in question. This is clear from Williams v. Howarth (1). It applies to the Crown in all its capacities; but it is not inconsistent with this that the Crown should, by appropriate parliamentary action, be shorn, in certain of its fields, of rights or immunities which it retains in others. The theory of the unity of the Crown produces, in relation to the rule now in question for the construction of statutes, the two- fold result that, first, the Crown in all its capacities is prima facie not bound by a statute made in any part of the Empire unless this is provided for expressly or by necessary implication, and second, a provision that a statute binds the Crown binds it prima facie in all its capacities unless a contrary intention appears. The second of these results is established by such cases as Attorney-General for Quebec v. Nipissing Central Railway Co. (5) and Pirrie v. McFarlane (6): the first is a corollary of the second. It is true that a different

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It has been contended, however, that, in the case of Common- wealth legislation, the principle of construction only applies to the Crown as sovereign head of the Commonwealth, and that the Crown as sovereign head of a State is in no better position than a private individual. This contention found favour with the Full Court of Western Australia, and is supported by the view, expressed by this Court in R. v. Sutton (1), that, in the construction of Commonwealth statutes relating to matters within the exclusive control of the Commonwealth Government, the principle only applies to His Majesty as head of the Commonwealth Government and not to His Majesty as head of a State Government. If this is the true position with respect to Commonwealth Acts passed in the exercise of exclusive powers, it is difficult to see why the position should not be the same in the case of statutes passed in the exercise of concur- rent powers, but it is unnecessary to pursue this question further, because I agree with Jordan C.J. in In re EB. O. Farley Ltd. (2), for the reasons there stated, that the decision in R. v. Sutton (1) that the Customs Act there in question was binding on the Sovereign as head of a State can only be supported by the implication of a neces- sary intention to be gathered from the purpose and provisions of the Act to that effect. The view expressed in R. v. Sutton (1) is, in my opinion, inconsistent with two decisions of the Privy Council one given before and the other after that case was decided. In Liquidators of the Maritime Bank of Canada v. Receiver-General of New Brunswick (3), the Privy Council held that under the British North America Act 1867, which confers exclusive powers on both the Dominion and Provincial Governments, the Provincial Government of New Brunswick, being a simple contract creditor of the Maritime Bank of the Dominion of Canada, constituted under a law of the Dominion, in respect of public moneys of the Province deposited in the name of the Receiver-General of the Province, was entitled to payment in full over the other depositors and simple contract creditors of the bank, its claim being for a Crown debt to which the prerogative attached. In that case, therefore, the Privy Council

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