Vale Bry Lid v few South New Sou" B80CLR 432" LidvVictona Trading Coy PORTA

Vale Bry Lid v few South New Sou" B80CLR 432" LidvVictona Trading Coy PORTA - [1933] HCA 62 - HCA 1933 case summary — Zoe

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Spender (with him Holmes), for the applicant. The evidence disclosed that this particular lorry was used exclusively to transfer goods from Melbourne to Wagga Wagga. The State Transport (Co-ordination) Act 1931 does not apply to anything more than purely intra-State transport. No offence has been disclosed by the appellant (Willard v. Rawson (1) ). The Court should apply the "pith and substance" test and having determined that should refer the Act to the trade and commerce power and if it directly regulates transport should inquire whether it regulates inter-State transport. The Act applies to domestic transport only, but if it applies to inter-State transport it is in conflict with sec. 92 of the Constitution. The Act and the regulations made thereunder do not carry the matter further than this, that the Act deals with trade, intercourse, and commerce, and is a direct regulation of transport and as such is an infringement of sec. 92 of the Constitution. If the Act does not apply to anything more than domestic trade we have not infringed the Act ; if it does, it infringes sec. 92 of the Constitu- tion (New South Wales v. The Commonwealth [No. 3] (2); Australian Railways Union v. Victorian Railways Commissioners (3)). The Act is ultra vires because its subject matter is trade, commerce, and intercourse within the meaning of sec. 92 of the Constitution. The appellant is consequently entitled to succeed under Willard v. Rawson, and Peanut Board v. Rockhampton Harbour Board (4). The test in both those cases is - if you find that a statute deals with trade, commerce, and intercourse and if it deals with inter-State trade, commerce, and intercourse it is invalid, 7.e., if it would interfere with trade, commerce, and intercourse. Applying the test in Willard v. Rawson this Act is one that definitely regulates inter-State trade and commerce. The subject matter of this Act is a direct interference with trade and commerce (Crutcher v. Kentucky (5) ). In Roughley v. New South Wales; Ex parte Beavis (6) the

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with the matter on the basis of inter-State traffic, and the natural method of dealing with the position is for the State to deal with it and for the Commonwealth to watch the freedom of inter-State free trade (Harvard Law Review (1931), vol. 44, p. 530 - Regulation of the Contract Motor Carrier under the Constitution, at p. 562 (note 80) ). The general purpose of the State Transport (Co-ordination) Act 1931 is, as appears from the title, for the improvement and co-ordination of means of and facilities for transport. The only discrimination that appears in the Act is between road and rail transport. If it were attempted to stop inter-State traffic under this Act that would be an interference with inter-State free trade. There is no intention in this Act to discriminate against a State or to impose any sort of barrier. There must be a direct as distinct from an indirect interference with inter-State free trade. The question is - Is the real object of the Act to interfere with inter-State free trade? As to severability, sec. 15a of the Federal Acts Interpretation Act provides for the severance of the good from the bad parts of an Act and the States have adopted that legislation, but the Court cannot be asked to dissect a statute so as to unravel an obnoxious Act. If the Court holds that anything has been done wrongly in this Act it is wholly bad and is not saved by the clause in the Acts Interpretation Act. Willard v. Rawson (1) is indistinguishable from the present case and is in conformity with the above remarks. As to the "pith and substance" rule, it is necessary to find the primary thing which the Act regulates and it is important to consider the real object in any Australian Act under the Constitution, where the mass of powers are retained by the States and some are handed over to the Commonwealth. The question has to be decided by reference to what is the real subject matter of the Act. Where it is a question whether the enactment comes within the special subject matters of sec. 51 the test is what is the real subject matter of the enactment, and where the question is whether under sec. 92 the enactment has a certain effect restraining inter-State trade, then the question is what is the effect of the enactment. The subject matter is the test in the first case, and the result that the Act attains is the test in the second case.

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would be consistent with For v. Robbins (1); Duncan v. State of Queensland (2); James v. South Australia (3); Ex parte Nelson {Wo. 1] (4); James v. Cowan (5); Peanut Board v. Rockhampton Harbour Board (6) and Willard vy. Rawson (7). W. & A. McArthur Lid. v. State of Queensland (8) is in conflict with Fox v. Robbins (9) ; Duncan vy. State of Queensland and Willard v. Rawson. Even if this Court is bound by W. & A. McArthur Ltd. v. State of Queensland, that case must be applied in the light of subsequent modifications. In James v. Cowan, the Privy Council agreed with the judgment of Isaacs J., but this does not mean that the Privy Council agrees with W. & A. McArthur Ltd. v. State of Queens- land, because the Privy Council leaves open the question of the meaning of the words "absolutely free" and also the question whether sec. 92 applies to the Commonwealth. So far as the expressed agreement with the judgment of Isaacs J. is concerned, there is nothing to show that the Privy Council agrees with W. & A. McArthur Ltd. v. State of Queensland in full. The Act in James v. Cowan was directly aimed at restricting inter-State commerce. 'The Privy Council goes no further than the High Court did in James v. South Australia. Alternatively, the Court should follow W. & A. McArthur Lid. v. State of Queensland, as explained in Ex parte Nelson (No. 1]; James v. Cowan; Peanut Board v. Rockhampton Harbour Board and Willard v. Rawson. The prin- ciple of those cases has been variously explained. Sec. 92 is not infringed unless the State Act is in respect of trade and commerce and is designed to fetter inter-State trade and not merely to affect it incidentally (Willard v. Rawson (10) ) or unless pointed directly at the place of entry. If the Court is to be bound by W. & A. McArthur Ltd. v. State of Queensland it should also be bound by Willard v. Rawson. .The Act must aim directly at inter-State trade and commerce to be contrary to sec. 92 (James y. Cowan (11); Roughley v. New South Wales ; Ex parte Beavis (12) ;

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" domestic and inter-State trade in the legislation in question. James y. Cowan (1) decided no more than this - that if State legislation. considered in the ordinary way is directed at inter-State trade and prohibits inter-State trade then it is struck by sec. 92. If you find an Act dealing with domestic and inter-State trade primd facie that Act is not struck by sec. 92, but it is not necessary to bring a case within sec. 92 that there is a distinction drawn between domestic and inter-State trade. Also, if an Act properly construed is directed at inter-State trade and prohibits that trade, actual or potential, it is struck by sec. 92. James v. Cowan decided (a) with respect to enabling or empowering legislation, if the real object of that legislation is to enable interference with inter-State trade it is invalid and carries no legal consequences, () if the power itself is used to interfere with inter-State trade that exercise is invalid and carries no legal consequences. In the former case the legislation is bad, and in the latter the exercise is bad. State of New South Wales v. The Commonwealth (Wheat Case) (2) is still good. It is not affected by James v. Cowan (1), because the Privy Council held that the power conferred by the Act had been used for the purpose of interfering with inter-State trade (James v. Cowan (3) ). An Act which deals equally with domestic and inter-State trade is prima facie valid. James v. Cowan is not inconsistent with W. & A. McArthur Ltd. v. State of Queensland (4). The test is whether trade is rendered unfree. Sec. 10 of the State Transport (Co-ordination) Act 1931 shows that the object and purpose of the Act is not interference with the freedom of trade. It shows that the State is regulating and co-ordinating the traffic facilities available within it. Sec. 102 of the Constitution permits the States to take some powers to protect their railways and to some extent to discriminate in so doing. That view would not be necessary if an extended meaning were given to sec. 92.

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language of sec. 92 of the Constitution. It arises upon a new aspect of the legislation relating to the use of roads, vehicles and railways - an aspect which could scarcely have struck the minds of those who resorted to the emphatic but uncertain terms of sec. 92. In Peanut Board v. Rockhampton Harbour Board (1) and in Willard v. Rawson (2) I stated or restated the interpretation of sec. 92 which I adopted and adhered to. I still consider that what sec. 92 forbids is govern- ment action (State action) in respect of trade, commerce, and inter- course when it operates to restrict, regulate, fetter or control it and to do this immediately and directly as distinct from giving rise to some consequential impediment. In so far as inter-State trade, commerce, and intercourse are included within the operation of such government action that action is rendered ineffectual by sec. 92. The question whether the Commonwealth is governed by sec. 92 does not arise in this case at any rate, directly, but as counsel for the Common- wealth, which intervened by leave, presented an argument which involved a return to the view that sec. 92 does apply to the Common- wealth I think it is right to say that the opposite conclusion has been adopted by this Court both in McArthur's Case (3) and in James v. The Commonwealth (4) and I do not think we ought to depart from those decisions. If they are wrong they can be set right in the Privy Council. In Willard v. Rawson (5) I said at the conclusion of my judgment "T intend in no way to depart from the doctrine of McArthur's Case, which is that, when State legislation attempts to restrain commercial dealings of a description wide enough to embrace inter-State operations, it is void to the extent to which it would affect acts, conduct or transactions, part of trade, commerce and intercourse among the States." I realize that there has been much difference of judicial opinion in the application of that decision and that in cases where State legislation has been upheld Judges who dissented from that conclusion have done so upon the grounds inter alia that it involved an inconsistency with the principle of McArthur's Case. But whether the majority of the Court reasoned well or ill from the major premise stated in McArthur's Case to

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their conclusion they did not, I think, intend to deny the validity of that premise. The difficulty is, I think, to enunciate any general interpretation of sec. 92 which, if precise, does not err in stating that _ which is not expressed in sec. 92, or if general, is not so wide as to admit of varying applications. McArthur's Case (1) denied the correctness of certain contentions as to the meaning of sec. 92, which has been put forward. It denied, for instance, that sec. 92 was limited to emancipating inter-State trade from differential or discriminatory laws. It denied that it was limited to freedom from _ pecuniary imposts and prohibitions of importation. It denied that - trade between the States was limited to mere inter-State movement of persons or things and it explained how wide is the conception of - inter-State trade. But it did not formulate a precise and inflexible : interpretation of the words of the section. It did not profess to substitute a legal formula or legal formule expressed with technical exactness for the language of the section. This serves to explain the differences of opinion which have been experienced by this Court in the attempt to perform the extremely difficult task of deciding - what State statutes have been and what have not been obnoxious to the provision. In the present case the statute is entitled State Transport (Co-ordination) Act. Its long title describes it as an Act to provide for the improvement and for the co-ordination of means and facilities for locomotion and transport, and to constitute a Board of Commissioners for that purpose. It is directed to secure an ordered system of public transportation in which the integers (not the least important of which are State railways) do not engage in mutual slaughter by irrational competition. As part of the means to this end it sets up a licensing system for motor vehicles which act as common carriers or which otherwise engage in the carriage of goods. The grounds upon which a licence may be granted or with- held are concerned with the public need for such transport, the suitability of routes, the mutual relation of the proposed service with other services and other matters which attend the co-ordination of a random system of transport. The appellant complains of a conviction for operating a public motor vehicle without a licence and he has proved that upon the occasion when he offended he wa!

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way depends upon the inter-State character of his journey: it applies uniformly to transport in New South Wales and does not concern itself with the difference between inter-State and intra-State traffic. I should think that a law of this character which did differentiate between the two kinds of traffic might well be held directly to restrain inter-State trade. The fact that it does not so differentiate does not establish that its operation is indirect or consequential. But the question whether it is direct or indirect must be determined by a consideration of the nature of the statute and the character of the act or transaction which it affects. The statute professes to be, and in fact is, an attempt not to suppress but to regulate transportation and to do so in such a way as to help rather than to retard or obstruct the movement of commercial goods throughout New South Wales. It takes a broad view of what does in the long run facilitate and help commercial transportation, and adopts the assumption that a superabundance of means of transport to-day followed by a consequential insufficiency or inappropriateness to-morrow cannot aid but must hamper trade, commerce, and intercourse. The acts or transactions with which the statute is concerned, and upon which it operates, are not actual commercial dealings, the actual transfer of goods from one place to another and the actual movement of individuals. No one is required, not to go here or there, not to send his goods here or there, not to make this or that bargain or not to engage in this or that communication. The material parts of the statute deal with vehicles in a double sense, The motor cars or trucks are the instruments - the vehicles for accomplishing these ends. No one can doubt their importance as means to trade, commerce, and intercourse inter-State or intra-State, but they are aids or implements to effect the thing, they are not the thing itself. The question which I have to ask myself is whether, in a scheme which allows complete freedom to go or to send from one place to another but in the process of co-ordinating the means and of rationalizing the facilities, denies a completely unregulated choice of means, a direct restraint upon or interference with trade, commerce, and intercourse is imposed. In answering this question I do not think one should concentrate on the individual to the

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The State Transport (Co-ordination) Act 1931 is described in its preamble as " An Act to provide for . . . the co-ordination of means of and facilities for locomotion and transport." It provides for the appointment of a Board of Commissioners to carry into effect the objects and purposes of the Act (sec. 4). It prohibits any person operating a public motor vehicle unless the vehicle is licensed by the Board and unless he is the holder of such licence (sec. 12). A public motor vehicle means (sec. 3) a motor vehicle (as defined in the Act) "used or let or intended to be used or let for the conveyance of passengers or of goods for hire or for any consideration or in the course of any trade or business whatsoever," or " plying or travelling or standing in a public street for or in hire or in the course of any trade or business whatsoever." The Act also requires the licensing of any person who acts or carries on or advertises or notifies that he acts or carries on the business of an agent for persons operating a public motor vehicle &c. (sec. 20). It gives the Board wide discretionary powers as to the issue of licences. Routes areas or districts and terms and conditions may be prescribed, as may fares freights and charges'and the use of the vehicle, whether as to passengers only or goods only or goods of a specified class or description only, and as to the circumstances in which conveyance may be made or may not be made, including the limiting of the number of passengers or the quantity weight or bulk of the goods that may be carried on the vehicle (secs. 15-17). . The Board may impose conditions that the licensees make certain payments to it in respect of passengers or goods carried (sec. 18 (4), (5) ). Jt may require any applicant for a licence to give reasonable security for due compliance with the conditions of the licence (sec. 18 (7) ). A fund called the State Transport Co-ordination Fund is created (sec. 26 (1) ), and to the credit of this fund are placed any moneys

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and, therefore, cannot extend to inter-State transactions. Trade, commerce, and intercourse may suffer effects from the regulation or burdening of acts or things which are not in themselves part of trade, commerce, or intercourse. A law which apparently does no more, may, upon a full examination, prove to have an actual operation upon trade, commerce, and intercourse as distinguished from producing consequences of an economic, business, or other character which are prejudicial to it. Similarly, an administrative order may, 'upon a proper understanding of its application to the circumstances, turn out to be an attempt to control or restrain trade, commerce, or intercourse although, upon its surface, it may not appear to do so. Thus, in James v. Cowan (1), the State legislation gave to the Minister a power of compulsorily acquiring dried fruits for the purposes of the statute, but not so as to interfere with the freedom of inter-State trade. In delivering the opinion of the Privy Council, Lord Atkin said (2): "It may be conceded that, even with powers granted in this form, if the Minister exercised them for a primary object which was not directed to trade or commerce, but to such matters as defence against the enemy, prevention of famine, disease and the like, he would not be open to attack because incidentally inter-State trade was affected." But their Lordships thought it was made plain that the direct object of the exercise of the powers was to interfere with inter-State trade. Distinctions in respect of scope, object, purpose, irnmediacy or indirectness of operation, and Temoteness or proximity of effects may be material in such cases. But there appears to me to be no warrant for applying such considerations to statutory provisions which prescribe duties or impose liabilities or burdens by reference to acts or conduct which go to constitute trade, commerce, and intercourse including that of an inter-State character. The present law requires all persons, unless specially licensed by the State Government authority, to refrain from carrying out in New South Wales ap ordinary transaction

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determinations made under it were directed at inter-State comm« as such. They were intended to prevent persons in South Australia from selling more than the fixed quota in any of the Australian States, The quota was fixed by reference to the needs of all the States ; and the prohibition of the sale of the surplus was against selling to am of the States. As the determination said, 'The proportion whid may be marketed in the Commonwealth of Australia shall not be more than' the prescribed proportion. If this leaves inter-State commerce ' absolutely free,' the constitutional charter might as well be torn up. Their Lordships have no hesitation in agreeing with the decision of the High Court on this point." By this passage I understand his Lordship to mean, not that the South Australian provision, or the determinations under it, imposed upon sales for _ export to another State a restraint not applied equally to sale for domestic consumption, for the section plainly forbade both alike, - but that sale for delivery into another State suffered, although in common with sale for delivery or consumption within South Australia, a restriction imposed by reference to the very characteristics which were essential to its existence as inter-State trade. In the same way in Attorney-General for Manitoba v. Attorney-General for Canada (1), quoted by Isaacs J. in James v. Cowan (2), their Lordships entirely rejected absence of discrimination as an answer to the impairment of the status and capacities of Dominion companies which was produced by the Provincial enactment prohibiting the sale of shares issued by any company. Viscount Sumner (3) said : " Neither is the legislation which is in question saved by the fact, that all kinds of companies are aimed at and that there is no special | discrimination against Dominion companies. The matter depends upon the effect of the legislation not upon its purpose." If its _ provisions were not qualified by the requirement that they should be read subject to the Constitution, the State Transport (Co-ordina- tion) Act, in my opinion, would deal with inter-State commerce as such : its suppression or restriction of the commerce by means of inter-State road transportation is accomplished simultaneously with the suppression or restriction of the like domestic commerce, but it

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purpose. But there is nothing in this decision, or in these judgments, opposed to the main grounds upon which McArthur's Case (1) proceeds, namely, that sec. 92 frees inter-State trade from burdens and restrictions although they equally affect intra-State trade, and the expression "absolutely free" involves complete immunity from attempts to hinder or burden trade, commerce, and intercourse as such, if it is in fact inter-State. The expression more often used in the judgment of the Court in McArthur's Case is " control." This expression may be capable of a meaning which would include legislative directions for the proper conduct of trade not amounting to a burden or obstruction. The judgment also insists upon a wide connotation for " inter-State trade and commerce." It appears to me that it is the effect produced by the combination of these two considerations which made relevant the question whether the Commonwealth was bound by sec. 92, and that its relevance did not arise out of the question whether the immunity given by that provision is confined to burdens or restrictions imposed on commerce and intercourse in virtue of its inter-State character. The opinion expressed by the majority of the Court in McArthur's Case that the Commonwealth was not bound, whether necessary for the decision of that case or not, was afterwards translated into a definite decision: (James v. The Commonwealth (2) ), which since has been acted upon in this Court ; Huddart Parker Ltd. v. The Commonwealth (3). So far as we are concerned, we should treat it as settled. But when the view prevailed in this Court that the Commonwealth was bound by sec. 92, neither Barton J. nor Isaacs J., in Duncan's Case (4), found in that circumstance any obstacle to completely rejecting absence of discrimination as a final criterion of the consistency of a law with freedom of inter-State trade, and now, if I have correctly understood the judgment of Lord Atkin (5), the Privy Council has felt able to arrive at the same conclusion, without deciding that the Common- wealth is not bound. To my mind the conclusion that a burden or restraint imposed uniformly on inter-State and domestic trade is obnoxious to sec. 92, in so far as it burdens or restrains inter-State

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The contention was advanced, however, that the statute could be supported by means of the reasoning adopted by the Court in Willard vy. Rawson (1). Inmy opinion that reasoning is absolutely fatal to the provisions of sec. 12 of the New South Wales statute. Both Rich J. and McTiernan J. adhered to and applied the test of consistency with sec. 92, Which Rich J. formulated first in James v. Cowan (2), and, after the decision of the Privy Council in that case, elaborated in Peanut Board v. Rockhampton Harbour Board (3). According to his Honor's test, what is forbidden by sec. 92 is State action in respect of trade and commerce when it operates to restrict, regulate, fetter or control it, and to do this immediately or directly as distinct from giving rise to some consequential impediment. In deciding that the Victorian statute, which dealt with traffic in general, survived this test, his Honor placed some reliance upon the analogy of American decisions upon enactments in pari materia, but the decisive reasons for his conclusion were expressed as follows (4) : - ''In the present case it is important to observe that the statute is not concerned with trade, commerce or intercourse as such. It is concerned with motor vehicles considered as machines, integers of traffic, users of the highway and potential sources of danger and annoyance to the public. From the point of view of the legislation it is an accident that they provide an implement of commerce and a means of conveyance over long distances. It is true that these qualities are inherent in the very purpose and character of many of the vehicles, but it is not in that aspect that they are dealt with. Again, it is important to notice that the licence fee levied upon them, although taken into the revenues of the central Government, is appropriated for expenditure by a body which provides services upon which they may run and repairs to the damage which they do. All these considerations satisfy me that I am justified in treating the burden which may be put upon inter-State commerce and intercourse as the result of the levy of a fee upon

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on inter-State commerce, the tax cannot be sustained unless it appears affirmatively, in some way, that it is levied only as compensa- tion for use of the highways or to defray the expense of regulating motor traffic. This may be indicated by the nature of the imposition, such as a mileage tax directly proportioned to the use . . . or by the express allocation of the proceeds of the tax to highway purposes . . . or otherwise. Where it is shown that the tax is so imposed, it will be sustained unless the taxpayer shows that it bears no reasonable relation to the privilege of using the highways or is discriminatory. . . . But the mere fact that the tax falls upon one who uses the highway is not enough to give it presumptive validity " (Inter-State Transit, Inc., v. Lindsey (1) ). Similarly the State may impose an occupation tax, which includes persons engaged in inter-State as well as intra-State trade. But "the privilege of engaging in such commerce is one which a State cannot deny. . . . A State is equally inhibited from con- ditioning its exercise on the payment of an occupation tax" (Sprout v. South Bend (2)). Therefore, to be valid, it must clearly appear that it has no such purpose or effect. "In order that the fee or tax shall be valid, it must appear that it is imposed solely on account of the intra-State business; that the amount exacted is not increased because of the inter-State business done; that one engaged exclusively in inter-State commerce would not be subject to the imposition; and that the person taxed could discontinue the intra-State business without withdrawing also from the inter- State business " (Sprout v. South Bend (2) ). To my mind, such a doctrine has no place in the interpretation of sec. 92. Indeed, that section may be regarded for the purposes of the doctrine as an express enactment, which, if made by Congress, would invalidate all State legislation interfering with trade and commerce. Further, it will be observed that the doctrine is not based upon any distinction between directness or indirectness of operation. If the required

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But, in my opinion, it is erroneous to say that sec. 92 confers upon every inter-State trader and upon every person co-operating with him for the purpose of such trade, a legal right, available not only to himself but to his servants and agents, to construct and use any and every wharf, whether licensed or not under the State law, and to engage and employ wharf labour irrespective of the State's system of regulating and licensing that portion of its port industries, On the contrary, I think that a State does not infringe sec. 92 if, having no concern, interest or object in restricting or prohibiting trade between States, or commerce between States, or intercourse between States, it chooses to organize, regulate and co-ordinate those facilities and services which are provided and conducted within the State as instruments essential to all trade, commerce - and intercourse, including inter-State trade, commerce and inter course. Any given organization, regulation or co-ordination may infringe sec. 92 if it is proved that the State is really directing its authority against commerce or intercourse between itself and any - other State, or between any two other States. But it is not enough to show that individual traders or travellers are incommoded or "burdened " in the course of their inter-State transactions or journeys" by having to obey general State regulations which, in their particular application to individuals, may control and determine the manner and method of their trading or travelling. For instance, it cannot be said that sec. 92 necessarily prevents the State from monopolizing the service of land transport within its borders. Nor does sec. 92° necessarily prevent a State from ending all road transport within its borders by adopting the simple if drastic expedient of destroying the roads, though the direct result of such action would be to force all traders and travellers, including those trading or travelling inter-State, to use or contract to make use of, the State's own railway services.

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to concrete questions and avoiding general definitions of expressions occurring in the Constitution. We were therefore treated to an elaborate argument by counsel as to the nature of the prohibition implied by sec. 92. The terms of this section are perhaps more characteristic of the platform than the draftsman's desk. The difficulty of measuring its terms exactly, so that nothing is added or subtracted is a perplexing one. The nature of a Constitution, as Chief Justice Marshall said in M'Culloch v. State of Maryland (1), "requires, that only its great outlines should be marked, its important objects designated, and the minor ingredients which compose those objects be deduced from the nature of the objects themselves." Sec. 92 appears to be deficient even according to that standard. The applicant, however, relies mainly on certain propositions enunciated in McArthur's Case (2) and submits that they conclude the constitutional question in his favour. This case further decides that sec. 92 does not bind the Commonwealth. The propositions in McArthur's Case as to the nature of the prohibition which sec. 92 imposes upon the State Legislatures are stated in a number of ways. "Absolutely free - The primary meaning of these words used as they are with reference to governmental control, is that the subject matter of which they are predicated is to be ' absolutely free ' from all governmental control by every governmental authority to whom the command contained in the section is addressed. The expression 'absolutely free' naturally means 'free' as 'trade, commerce, and intercourse,' and does not extend beyond the subject matter spoken of. It is not said of ' goods' or ' persons,' but of the acts which constitute 'trade, commerce, and intercourse' " (3). " The State cannot, in our opinion, either by laws directly and openly applying to trade and commerce, or by laws creating discrimination, which is the same thing (see per White J. in Pullman v. Kansas (4) ), impose a prior restraint on ' trade, commerce, and intercourse among the States'" (5). "The words ' absolutely free' in sec. 92 cannot, therefore, be confined to pecuniary exactions or customs laws, but in order to have any substantial effect must, unless some better reason be found, have their natural meaning of absolute

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resident of the State. If he brings goods into the State, he is free to do so, and to pass through the State with them (say) to Queensland, equally without hindrance or condition by State law, so far as regards the passage through. But if, for instance, the goods are dangerous, as gun-powder, or wild cattle or a mad dog, or are stolen or offensive, he cannot deny his obligation to submit in respect of them to whatever laws are in force in the State on those subjects. The constitutional freedom predicated begins and ends with respect to the act of ' trade, commerce, and intercourse.'"' The principles expressed in this passage were applied by Knox C.J., Gavan Duffy J., as he then was, and Starke J. in Ex parte Nelson [No. 1] (1). In affirming that the Stock Act 1901 of New South Wales did not contravene sec. 92 their Honors said (2) : - ''In a measure it must be conceded that the Stock Act of New South Wales does regulate the free flow of inter-State trade and commerce in stock. . . . The seeming conflict may be resolved, in our opinion, by considering the true nature and character of the legislation in the particular instance under discussion. The grounds and design of the legislation, and the primary matter dealt with, its object and scope, must always be determined in order to ascertain the class of subject to which it really belongs ; and any merely incidental effect it may have over other matters does not alter the character of thelaw. . . . The Stock Act of New South Wales is not in itself a regulation of inter-State commerce, though it controls in some degree the conduct and liability of those engaged in the commerce. . . . In truth, the object and scope of the provisions are to protect the large flocks and herds of New South Wales against contagious and infectious diseases, such as tick and Texas fever : looked at in their true light, they are aids to and not Testrictions upon the freedom of inter-State commerce. They are a lawful exercise of the constitutional power of the State. There are passages in W. & A. McArthur Ltd. v. Queensland (3) which in our opinion support this view." Their Honors cited from the passages at pages 550-551, in which the meaning of " absolute freedom" in respect of inter-State commerce is explained. The decisions since McArthur's Case (4) have explained, perhaps

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which infringes the provision that trade, commerce and intercourse among the States shall be ' absolutely free.' Freedom is really a negative idea: I take it as meaning that there shall be no restraint, no obstruction, no control of trade, &c., between the States. This cannot mean, if we are to give due effect to sec. 107, that State laws which merely affect such trade indirectly are vetoed ; for all legisla- tive action of the State must affect inter-State commerce. State laws for public works, for public order, for police, for roads, for railways, for finance, even education or for morality, must, more or less, have an influence on inter-State commerce." In Willard v. Rawson (1) it was not questioned that the provisions of the Motor Car Act of Victoria there in question did by their operation affect inter-State trade and commerce. But the Court decided that the appellant was not excused by sec. 92 from obedience to them. This case was decided after James v. Cowan (2) and certain principles enunciated by the Judicial Committee were resorted to for the purpose of distinguishing between legislation which sec. 92 was intended to prohibit and legislation which the State Legislatures were left free to enact, although it affected trade and commerce. These principles were stated by Lord Atkin (3). His Lordship said : - '"If the real object of arming the Minister with the power of acquisition is to enable him to place restrictions on inter-State commerce, as opposed to a real object of taking preventive measures against famine or disease and the like, the legislation is as invalid as if the Legislature itself had imposed the commercial restrictions. . . . It may be conceded that, even with powers granted in this form, if the Minister exercised them for a primary object which was not directed to trade or commerce, but to such matters as defence against the enemy, prevention of famine, disease and the like, he would not be open to attack because incidentally inter-State trade was affected."

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purposes connected therewith." Sec. 4 empowers the Governor to appoint a Board to carry out objects and purposes which are substantially those stated in the preamble. The Board is directed by sec. 10 (2) to report to the Minister as to the steps, which they consider desirable to co-ordinate and unify the control of, the facilities and means for locomotion provided by various Governmental bodies namely the Railway Commissioners, constituted under the Government Railways Acts 1912-1930, the authorities constituted under the Transport Act 1930 for the control of tramways and road transport, and the Main Roads Board, constituted under the Main Roads Act 1924-1929. The Government Railways of New South Wales are practically a monopoly and were built out of money borrowed on the public credit. An examination of the Government Railways Acts shows the direct connection between the Government of the State and its railways and how closely interwoven are govern- mental and railway finance. The Transport Act provides for the creation of transport trusts for defined areas. These trusts are concerned with the supervision, regulation and co-ordination of all public transport and omnibus services in their respective areas. The powers of the Railways Commissioners in relation to tramways are transferred to these trusts. Another authority set up by the Act is the Commissioner of Road Transport. Part XV. of the Act vests the administration of the provisions of the Motor Traffic Act of the State relating to the registration of motor vehicles and the control and supervision of them in this authority. The Management Board is constituted to conduct transport services established by the trusts for the carriage of passengers. The Main Roads Board is a road construction authority. The Main Roads Act provides for the classification of the roads of the State. The cost of construc- tion and maintenance is borne by special funds established by the Main Roads Act. These funds are built up by public moneys derived from sources mentioned in the Acts. The real or primary object of the provisions of the State Transport (Co-ordination) Act relating to the licensing of public motor vehicles which the applicant ignored, is not in my opinion, directed to trade and commerce at all. These provisions empower the State through its instrumentality, the State Transport (Co-ordination) Board, to limit, upon the principles

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maintenance of its highways as safe and convenient facilities. The State provides its highways and pays for their upkeep. Its people make railroad transportation possible by the payment of transporta- tion charges. It cannot be said that the State is powerless to protect its highways from being subjected to excessive burdens when other means of transportation are available. The use of highways for truck transportation has its manifest convenience, but we perceive no constitutional ground for denying to the State the right to foster a fair distribution of traffic to the end that all necessary facilities should be maintained and that the public should not be inconvenienced by inordinate uses of its highways for purposes of gain." This state- ment applies with special force where the railways as well as the roads are built and maintained out of public funds and are owned and managed and controlled by the State. In Frost v. Railroad Commission (1) the " effect" of the State Act in question was " to offer a special privilege of using the public highways to the private carrier for compensation upon condition that he shall dedicate his property to the quasi-public use of public transportation." Mr. Justice Sutherland said (2), in delivering the opinion of the Court : - " It is very clear that the Act, as thus applied, is in no real sense a regulation of the use of the public highways. It is a regulation of the business of those who are engaged in using them. Its primary purpose evidently is to protect the business of those who are common carriers in fact by controlling competitive conditions. Protection or conservation of the highways is not involved." In my opinion, in view of the public ownership of the railways in New South Wales the opinion of Mr. Justice Holmes who dissented throws more light on the constitutional question arising in the present case. He said (3) : - " The point before us seems to me well within the legislative power. We all know what serious problems the automobile has introduced. The difficulties of keeping the streets reasonably clear for travel and for traffic are very great. If a State speaking through its Legislature should think that, in order to make its highways most useful, the business traffic upon them must be controlled, I suppose that no one would doubt

At a glance

Court

Decision date

Before

Source

Judgment (430 paragraphs)

Parties