Roche v Kronheimer [1921] HCA 25

High Court of Australia|1921-07-01|Before: Per Higgins J, Hood J, Starke J

ON REFERENCE AND REMOVAL FROM THE SUPREME COURT OF VICTORIA.

Consitutional Law - Leyislative powers of Parliament of Commonicealth - Defence - External affaire - Treaty of Peace - Regulations to give effect to Treaty - Validity of Act and Regulations - Julicial power - The Constitution (63 & 64 Vict. e.1 ses, 5A (vt), (X1%.), (XX1X.), 71 - Treaty of Peace Act 1919 (No. 20 of 1919), see 2 - Treaty of Pence Regulations (Statutory Rules 1920, No. 25), reg. 2

'The Treaty of Peace Act 1919 is within the legislative power of the Parliament of the Commonwealth ; and reg. 20 of the Treaty of Peace Regulations is author- ined by sec. 2 of that Act, both so far as it purports to re-enact the provisions of Part X. of the Treaty of Peace and so far as it purports to provide machinery for enforcing those provisions within the Commonwealth.

Per Higgins J. : The Act can be upheld under the power to make laws as to 'aval and military defence (sec. 51 (vi.)); and, semble, also under the power to make laws as to external affairs (see. 51 (xx1%.)

Farey v. Burvel, 21 CLLR., 438, Pankhurot v. Kiernan, 247C.LR., 120,

Ferrando v. Pearce, 25 CUR. 241, and Sickerdick v. Ashton, 25 C.LR., 506, followed.

Questions referred and removed to the High Court by and from the Supreme Court of Victoria.

Joseph Kronheimer, who died in Victoria on 16th July 1914, by his will dated 12th December 1913 made bequests and gave interests inthe residue of his estate to a number of German nationals, including Max Kronheimer of Hamburg, Germany, who was appointed one

H.C. or A. of the executors. Probate of the will was, on 10th October 19)

granted to the other executors, namely, Joseph Francis Louis Stanley Benjamin, Jacob Englander and the Equity Trustes, Executors and Agency Co. Ltd., leave being reserved to May Kronheimer to come in and prove.

On 7th October 1920 the Minister for Trade and Customs, pur porting to act in pursuance of the Treaty of Peace Regulations (Stata. tory Rules 1920, No, 25), made an order vesting in the Public 'Trustee all the property, rights and interests of Max Kronheimer which he acquired under the will of the testator, and on the same day made similar orders in respect of the other beneficiaries who were nationals.

An originating summons in the Supreme Court of Vietoria was taken out by the executors asking, among other questions, was the duty of the executors in respect of bequests under the wil to persons who were German nationals, and whether such bequests should be paid to the Acting Deputy Comptroller-General the Publie Trustee. 'The defendants to the summons were Max Kronheimer, who was authorized to defend on behalf of himseli and all other beneficiaries who were German nationals, Robet McKeeman Oakley, Acting Deputy Comptroller-General and the Public Trustee under the Trading with the Enemy Act 19141916.

At the hearing of the summons Hood J. ordered that those ques tions (inter alia), s0 far as they might be referred to the High Court under see, 18 of the Judiciary Act, should be so referred, and, so far as they involved any questions within see. 40a of the Judiciary Ad, should be removed to the High Court,

The matter now came on for argument before the High Court.

During the course of the argument the Court intimated that it would do no more than inquire into the validity of reg. 20 of the Treaty of Peace Regulations ; and the arguments on. that point only are reported.

Owen Dizon (with him Martin), for the defendant: Max Kron heimer. The Treaty of Peace Act 1919 is invalid. It is mot within

fence power (pl. v1.) does not authorize it. 'The Treaty of Peace dows not add to that power. 'The power does not inelude a power tomake war or to terminate it by a treaty of peace, nor does it include a power to make laws for securing the observance of such a treaty made by the King acting for the whole Empire, The Treaty of Peace Act is not within the power as to external affairs (pl. xxtx.). "Tht only enables laws to be made relating to affairs extemal to Br ratiiwenteh, and does not enable laws to bends aytomettors "yithin the Commonwealth, Neither the fact that there is property "within the Commonwealth to which an alien, whether an enemy or

not, is entitled, nor the relationship of debtor and creditor between "acitigen of Australia and an alien, is a matter within that power. 'The Act is not within the power as to aliens, It is wholly directed to depriving certain aliens of their property, and is not concemed with their being aliens, A law as to aliens means a law dealing with the status of aliens. 'This is a law relating to deprivation of 'property (see Cunningham v. Tomey Homma (1) ). (Starke J. referred to Lefroy on Canada's Federal System, p. 308] The Act does not relate only to aliens, for under it the Governor- General might make regulations, as he has done in reg. 20 of the Treaty of Peace Regulations, dealing with persons who are not

and their rights and liabilities. [Counsel referred to Huddart, Parker & Co. Proprietary Ltd. v. Moorehead (2).] Sec. 2, which ives power to the Governor-General to make such regulations as appear to him necessary for carrying out Part X. of the Treaty of Peace, is invalid. It is not conditional legislation as was the case 3)

in Baxter v. Ah Way (3), but it bestows on the Executive full legis- lative power upon a particular matter. Just as the Constitution dloes not permit. the judicial power of the Commonwealth to be Vested in any tribunal other than the High Court and other Federal Courts (New South Wales v. The Commonwealth (4); Waterside Workers' Federation of Australia v. J. W. Alexander Ltd. (5)), so the _ Yesting of the legislative power in any other body than Parliamentis 'Pohibited. A law merely authorizing the Executive to make laws () (ms) a.c., 20 CLR, 54.

ay of the powers conferred by sec. 51 of the Constitution, The H.C. or A.

with respect to a particular subject matter is not a law for the p onder and good government of the Commonwealth with resp that subject matter. See. 2 of the Treaty of Peace Adt is not ditional legislation such as was upheld in R, v, Burah (1), H The Queen (2), Powell v. Apollo Candle Co. (3) and by this Cour Baxter v. Ah Way (4), but it is a handing over of the whole of legislation upon a particular matter to the Executive, is not permitted by the Constitution

[Sranke J. referred to Dobie v. Temporalities Board (5),

If the Treaty of Peace Act is valid, reg. 20 of the Treaty of Pa Regulations is invalid because it is not such a regulation as appeat to be necessary to the Governor-General for carrying out provisions of Part X. of the Treaty of Peace, and also because 20 (5) purports to confer judicial power upon the Minister for Tra and Customs, Reg. 20 misconeeives what art. 297 and the annex to it require to be done. 'The charging of the whole of the prop of German nationals irrespective of its present ownership is b what is mecessary to carry out art. 297. The option to ch or not to charge property of German nationals must under art. 2 bbe exercised by the Imperial Government once for all, and be left to the several Dominions, The making of a vesting under reg. 20 (5) is judicial in its nature (Werner v. Boehm (7). [Gavan Durry J. referred to Burkard v. Oakley (8).)

D. Claule Robertson, for the Acting Deputy Comptroller-Gene and Public Trustee. The Treaty out the British Empire without any legislative enactment. is recognized in the Acts which have been passed in Great Brit

49 of 1919 (South Africa) ). [Counsel also referred to Walke

Industrie (2); In re Schiff; Henderson v, Schiff (3).] Rrex J. referred to The Parlement Belge (4).] The Treaty of Peace Act is valid under the defence power. It was 'passed at a time when a state of war existed, and it is within the defence power to legislate with respect to bringing a state of war to

end by a treaty of peace. A law confiscating the property of liens isa law as to aliens, just as is a law excluding aliens of a certain nationality from working in mines (Union Colliery Co. of British vy. Bryden (5)), or prohibiting foreign companies from 'trading (Attorney-General for Canada v. Attorney-General for Alberta (6). It is within the power as to external affairs to enact a law to put into execution the terms of a treaty. 'The Act is also within "the incidental power (sec. 51 (xxx1x.) of the Constitution). The "King is one and indivisible throughout the Empire, and he acts inthe Commonwealth through the Executive of the Commonwealth. "When a treaty of peace is made by the King, his Executive in the Commonwealth has to carry out its terms there. The Common- wealth Parliament may therefore make laws which are incidental to the power of the Executive in that respect. (See Burkard v. Oakley (1); Joseph v. Colonial Treasurer of New South Wales (8).) 'The Treaty of Peace Act should be construed as incorporating Part X. of the Treaty of Peace (Maxwell on Statutes, 6th ed., pp. 615-623). With regard to the giving of power to make regulations the Act is valid on the authority of Bazter v. Ah Way (9).

Sir Robert Garran S.-G., for the Attorney-General of the Common- wealth, intervening. The Commonwealth Parliament has power to make laws to give the force of law to any provision of the Treaty of Peace and to provide for its execution. The Treaty is an act of the King, and has force apart from any legislative Act. It determines questions of cession of territory and status of individuals. A state of Peace flows from it, with all its consequences. It creates some legal

(1) 4892) Ac, 491. (6) (1916) 1 A.C, 588, at p. 597. (2) (191s) A.C. 230, (7) 5 CLR. 7,

Hugh Stevenson & Sons v. Aktiengeselischajt fiir Car- H-©.0r A.

H.C. or A. rights and obligations to which the Courts of the Commonw:

other Dominions for the purpose of enabling the Executives to into effect the provisions of the Treaty are substantially identi the Commonwealth Treaty of Peace Act, and the Commonwealth

Marie Gartz (2); The Marie Garte [No. 2} (3) ; In re Schif derson v. Schiff (4).

to enforce the terms and conditions of the 'Treaty whieh Australia (Farey v. Burvett (6) ). The Treaty of Peace Act is

matter relating to external affairs. PI. xrx. and pl xx, of se. of the Constitution cover everything in the Act. 'The Trealy Peace Act is a declaration of intention to give effect by it to Treaty. 'The Act is not invalidated by giving the Exeeutive power to make regulations to give effect to Part X. of the Treaty of Pe

The Legislature makes the primary rule of conduct, and the Exect tive is left to fill in the details (Butifield v. Stranahan (7); Wik

(R. v. Burak (8) ; Hodge v. The Queen (9)), Where the Parl has vested in it a power of legislation it may exereise that po by assigning portion of the power to a subordinate rilem body. That is a recognized constitutional usage. The qu of vesting the judicial power in a tribunal other than a Fe

(1) 36 T.LR,, 425, (6) 21. C.LR,, 438, at p. 45% (2) 36 TER, 417. (7) 192 US.."$70.

() 36 TLR, ses. (8) 3 App. Gas., at p. 900. () 37 TLR, 31. (8) 9 App. Cas, at p. 132.

'tion of Australia v. J. W. Alexander Ltd, (1) was founded, not on 'the provision in sec. 71 of the Constitution vesting the judicial powerin the Federal Courts alone, but on the whole of Chap. III. of the Constitution. 'There was no question in that case of delegation of power, That the Commonwealth Parliament has power to confer anthority to make regulations upon a subordinate body is affirmed "in Farey v. Burvett (2) and Bazter v. Ah Way (3); and, when this is done, the legislative power still remains in the Parliament but is exercisable by the subordinate body. There is no indication in the Treaty that there should be one election by the whole British Empire to charge or not to charge the property of German nationals, 'The power to charge may be exercised whenever the Governor in Council chooses. 'The Treaty of Peace Regulations do not confer any judicial power on the Executive, The Executive makes no finding of fact as to whether a person is or is not a German national. If it makes an order against any person who turns out not to be a German mational, the order is a nullity. [He referred to Wong Wing v. Vnited States (4).]

Owen Dixon, in reply. The defence power was not so construed in Farey v. Burvett (5) as necessarily to lead to the conclusion that it includes a power to make laws calculated to give force to a treaty of peace, The defence power includes everything reasonably proper to defend the Commonwealth by arms or other defensive measures, to carry on war and assist in it; but it does not extend to ending 'awar bya peace. The Constitution, by dividing the powers of the Commonwealth into the legislative, the executive and the judicial powers and vesting each of those powers in a distinet body, impliedly

prohibits the vesting of each of those powers in any other body 'than that in which it is specifically vested. That applies to the legislative power just as it does to the judicial power. The making of alaw that another body may make laws upon a particular subject: matter is not making a law on that subject. There is no authority for the proposition that a treaty of peace can have the effect of law

isnot analogous. The decision in Waterside Workers' Federa- H.C. 07 A.

A. in any circumstances. If it alters the existing law itis leg

and legislation must be made by Act of Parliament. [Counsl a referred to Cooley's Constitutional Limitations, 7th ed., pp. 1 et seqg.; F. W. Maitland's Constitutional History of England,p.42 Dicey's Constitutional Law, 8th ed., p. 115.]

Kxox J. announced that the Covrr was of opinion that Treaty of Peace Act and the Treaty of Peace Regulations made the Act were valid, and the reasons would be delivered Inter

The following written reasons were subsequently delivered Kwox CJ., Gavan Durry, Ric axp Starke JJ. In this we have already intimated that we shall do no more than into the validity of reg. 20 of the Regulations under the Trey 4 Peace Act 1919 (Statutory Rules 1920, No. 25) ; and we now proc

to give our reasons for declaring that regulation to be valid. Statutory Rules are made under the authority of the Tremly Peace Act 1919, and it is said that that Act is not within the petence of the Federal Parliament, The preamble recites

the Commonwealth of Australia on behalf of His Majesty the Ki and declares that it is expedient that the Government of the Ca monwealth shall have power to do all such things as are ne and expedient for giving effect to the said Treaty on the partel the Commonwealth. Sec. 2 is as follows: "The Governor Get may make such regulations and do such things as appear to him be necessary for carrying out and giving effect to the provisions Part X. (Economic Clauses) of the said Treaty." Itis to be obser that the Act does not in express terms adopt or ratify the Tx and much argument was addressed to us as to whether its effect was to make the provisions of the Treaty, or any of t part of the statute law of the Commonwealth, or merely to the Governor-General to provide machinery for putting certait 'those provisions into operation within the Commonwealth. think that the intention of the Legislature, as expressed im

words we have already cited, was to enable the Governor-General to H.C. oF A. enforce the provisions of Part X. of the Treaty within the Common- wealth, and, if he thought it necessary for that purpose, to make any of such provisions part of the statute law of the Commonwealth, Js such an enactment within the competence of the Federal Parlia- ment? We think it is, A catena of cases commencing with Farey v. Burvett (1) has made it clear that the power of Parliament "under sec. 51 (V1) is not confined to military operations but extends ; to every measure of defence which circumstances may require as "they present themselves. 'The termination of hostilities by the imposition of terms of peace and the enforcement of those terms are, in our opinion, such measures,

Next, it was said that, even if the Federal Parliament had authority to legislate for the purpose of carrying out and giving effect to the

provisions of Part X. of the Treaty, it had no power to confer that authority on the Governor-General. On this topic we were referred by counsel to Hodge v. The Queen (2), and by our brother Rich to B. v. Halliday (3) and In re Initiative and Referendum Aet (4); and much interesting argument was devoted to the real meaning and effect of the finst of those eases, It is enough to say that the validity of legislation in this form has been upheld in Forey v. Burtt (1), Pankhurst v. Kiernan (5), Ferrando v. Pearce (6) and Sickerdick v. Ashton (7), and we do not propose to enter into any inquiry as to the correctness of those decisions.

Lastly, it was said that reg. 20 (5), under which the Minister acted, purported to bestow upon him a judicial power which, because of see. 71 of the Constitution, eauld be vested only in a Federal Court. In our opinion the order which the Minister is empowered to make isnot a judicial order. We see no reason why property should not be vested or divested by a legislative enactment or by an executive act done under the authority of the Legislature as well as by a judicial act.

It follows from what we have said, that sec. 2 of the Treaty of Peace Act 1919 is within the powers of the Federal Parliament, and

) 1 CLR. 433, (s) 240 @ 94.11 (6) 25 C1 {8) (017) A.C; 260, at p. 207 ) 25 CLR, 506

reg. 20 is authorized by that section both so far as it p

re-enact the provisions of Part X. of the Treaty and aso a fra purports to provide machinery for enforci

Hicerss J. Counsel for Max Kronheimer have not, in mp opinion, shown us any clause in Part X. of this Treaty which is within some power conferred on the Commonwealth Patli by the Constitution. 4 By the Treaty of Peace Act 1919, after reciting the signing o the Treaty and that "it is expedient that the Goverment of the Commonwealth should have power to do all such things are necessary and expedient for giving effect. to the said on the part of the Commonwealth," it is enacted (sec. 2) that " Governor-General may make such regulations and do such as appear to him to be necessary for carrying out and giving to the provisions of Part X. (Economie Clauses) of the said Tre 'The form of the enactment was probably adapted from the en ment of the British Parliament (9 & 10 Geo. V. c. 33): " Majesty may make such appointments, establish such offices,

be necessary for carrying out the said Treaty, and for giving to any of the provisions of the said Treaty." Part X. of this Tn clearly involves a grave interference with private rights; and, the question whether a treaty of peace in itself can authorize interference was deliberately left open by the Judicial Commit of the Privy Council in Walker v. Baird (1), Parliament has by. expressly given power to the Governor-General to carry th visions of Part X. into effect. The Act was expedient, if notm sary. But it remains to be seen whether the Commonwealth Parlin has been empowered by the Constitution to pass such an Act. Constitution gives that Parliament power to make laws with resp to (inter alia) (a) external affairs (pl. xxix.), (b) the naval military defence of the Commonwealth (pl. v1), (c) trade 4 commerce with other countries (pl. 1.). It is difficult to ssy (1) (1802) A.C, at p. 497.

affairs, There are none expressed. No doubt, complications may arise should the Commonwealth Parliament exercise the power in such a way as to produce a conflict between the relations of the Commonwealth with foreign Governments and the relations of the British Government with foreign Governments. It may be that the British Parliament preferred to take such a risk rather than curtail the self governing powers of the Commonwealth ; trusting, with a 'wellfounded confidence, in the desire of the Australian people to " adt in co-operation with the British people in regard to foreign Governments.

In this case, we have in Part X. of this Treaty provisions such as "appear in annex 4 to art, 297, which in effect enable any Allied or "Associated Power to deprive German subjects of property which is

theirs, for the satisfaction of obligations of other German subjects or
of Germany to the Allies or to subjects of the Allies. More specifically, ights and interests of German nationals within the y Allied or Associated Power . may be charged by that Allied or Associated Power" (1) "with payment of amounts ue in respect of claims by the nationals of that . . . Power with regard to their property," &e., "in German territory, or debts owing to them by German nationals"; (2) "with payment of claims growing out of acts committed by the German Govern- ment . . . since 3ist July 1914, and before that Allied or Associated Power entered into the War" ; (3) "with payment of the amounts due in respect of claims by the nationals of such . . . Power with regard to their property," &c., "in the territory of other enemy Powers." Australia is enabled to charge the Australian property of any German Schmidt with payment of any debts owing by any German or by Germany to any Australian Smith or to Belgium or to Italy. Apart from the power as to external affairs, such a law can be upheld, in my opinion, under the power as to naval and nilltary defence ; for, though there may be other reasons also, the Weakening of an enemy and enemy subjects may contribute as ectively to defence as the increasing of one's own fighting force ; 4nd to punish an enemy severely may be reasonably regarded as a deterrent against future attacks, on Polonius's principle as to a

its (if any) can be placed on the power to legislate as to external H.C. oF A.

ofA. quarrel - "Bear't that the opposed may beware of thea
not for this Court to consider the wisdom of the Treaty; merely to find whether these provisions are within the Co wealth powers. , If the Treaty of Peace, Part X., is valid, the regulations under the Treaty of Peace Act by the Governor-General are, in opinion, valid also (Powell v. Apollo Candle Co. (1), and the cited by my learned brothers). : Teoncur also in the opinion that reg. 20 (5) of the Treaty of B Regulations and the order of the Minister of Trade and Cu thereunder are not invalid as involving an exercise of the power of the Commonwealth by other than Commonwealth Cour (see. 71). I can hardly understand how the point it arguable for the vesting is not the result of a judicial finding as to rights it is in defiance of admitted rights. To give the property of A toB is not a judicial proceeding.

Declare that the Treaty of Peace Act 191 the Treaty of Peace Regulations made under are valid. Costs as between soli and client of all parties in the High Co other than those of Attorney-General of Commonwealth to be costs in the summons,

Solicitors for the plaintiffs, P. D. Phillips, Fox d: Overend. Solicitors for the defendants and the intervener, Eggleston & Eggleston ; Gordon H. Castle, Crown Solicitor for the Commonweal

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