WEALTH v Krec-

WEALTH v Krec- - [1926] HCA 8 - HCA 1926 case summary — Zoe

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Laws Validity Act 1865. Sec. 2 of the Colonial Laws Validity Act is qualified by sec. 5, which was intended to give colonial legislatures the power to confer jurisdiction on Courts and to regulate appeals therefrom both positively and negatively - that is, by giving or by taking away a right of appeal, subject always to the prerogative - right to allow appeals to be brought to the King in Council. Sec, - 39 (2) (a) is an exercise of that power, and is not affected by sec. 2 : of the Colonial Laws Validity Act. Any conflict with regard to sec. 39 (2) (a) is between secs. 77 and 51 (xxxrx.) of the Constitution, under - the authority of which sec. 39 (2) (a) was enacted, and the Privy ; Council Appeal Act 1844, under which the Order in Council of 23rd January 1911 (Victorian Statutes 1915, vol. v., pp. 4527 et seq.) was made - a conflict between two Imperial Acts ; and in that case the later Act must prevail (Commonwealth v. Limerick Steamship Co. (1) ). The question whether sec. 39 (2) (a) is valid is a question as to the limits inter se of the constitutional powers of the Common: wealth and a State, and the case therefore falls within secs. 384 and - 40a of the Judiciary Act. If sec. 39 (2) (a) operates in a case of - Federal jurisdiction, it takes away from the subject a right of appeal _ to the Privy Council which he had under the Victorian Swpreme Court Act. There is thus a collision between the legislative power of the - Commonwealth and that of a State (see Jones v. Commonwealth Court of Conciliation and Arbitration (2) ). There is also a collision between _ the legislative power of the Commonwealth and the judicial powers - of the State, which are constitutional powers; for the validity of sec. 39 (2) (a) depends upon whether there can be ascribed to the - Federal Parliament a legislative power the demarcation of which - affects the power of the State Judicature (see Pirrie v. Macfarlane (3); BR. v. Maryborough Licensing Court; Ex parte Webster & Co. (4)).

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Sir Edward Mitchell K.C. and Gregory (C. Gavan Duffy with them), 1 the respondents. The respondents challenge the correctness of the decision in Commonwealth v. Limerick Steamship Co. (1), on the 'grounds that it is inconsistent with the decision in Union Steamship Co. of New Zealand v. Commonwealth (2) and that it is inconsistent with the decision in Baxter v. Commissioners of Taxation (N.S.W.) (3), and on general grounds (see Amalgamated Society of Engineers Adelaide Steamship Co. (4); Read v. Bishop of Lincoln (5) ). _ [Kxox C.J. The Court thinks that counsel should be allowed to ie that the decision in Commonwealth v. Limerick Steamship Co. (1) is inconsistent with Union Steamship Co of New Zealand v. Commonwealth (2) and with Baxter v. Commissioners of Taxation (W. S.W.) (3). Beyond that, we are not prepared to go. We expect

you to establish that inconsistency by an examination of those ~ cases and not by general argument.] 4 In Bazter's Case (3) it was determined that the effect of the decision of the Privy Council in Webb v. Outrim (6) was that sec. 39 (2) (a) was invalid so far as it purported to prevent an appeal 4 the Supreme Court of a State to the Privy Council as of right ; and the reasoning in the former case was confirmed by Lorenzo v. Care (7). If sec. 39 (2) (a) is otherwise valid and has the effect
of taking away the right of appeal to the Privy Council as of right, _ itis, within the meaning of the Colonial Laws Validity Act, repugnant to the Order in Council of 23rd January 1911, which was made after the decision in Webb v. Outrim, and which gives a right of appeal from any final judgment of the Supreme Court, that is, applying the decision in that case, from every final judgment of that Court. That there is a repugnancy is established by the Union 'Steamship Co.'s Case (2), the facts in that case being indistinguishable ; those in this case. In that case the conflict was between the 'avigation Act, passed under the power conferred by secs. 51 (r.) nd 98 of the Constitution, and the Merchant Shipping Acts. Here e conflict is between sec. 39 (2) (a) of the Judiciary Act, passed under the power conferred by sec. 77 (11.) and (111.) of the Constitution,

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leave to the respondent Bardsley to appeal to the Privy Council from a judgment of the Full Court of the Supreme Court of Victoria dismissing his appeal from the judgment of the trial Judge - Cussen J. - dismissing the action. The action was brought in the Supreme Court to recover a share in certain money alleged to have been received by the Common- wealth or by some or one of the other defendants, upon trust for the persons who had supplied skin wool under the Wool and Sheepskin. Regulations. The action was dismissed mainly on the ground #1 the matter in issue was concluded by the decisions of this Court and of the Judicial Committee in John Cooke & Co. Pty. Ltd. y. Commonwealth (1). The plaintiff - the present respondent - appealed from the judgment of Cussen J. to the Full Court of # Supreme Court of Victoria. The right of appeal from a s Judge of the Supreme Court to the Full Court is given by sec. of the Victorian Supreme Court Act 1915, and depends on statutory provision. On the hearing of the appeal counsel for the present appellants contended that the Full Court had no jurisdiction to entertain the appeal because the jurisdiction exercised by Cussen J. was Feder jurisdiction conferred by sec. 39 of the Commonwealth Judiciary Ac 1903-1920, and sub-sec. 2 (a) of that section provided that the only right of appeal was to the High Court, the decision of the trial Judg being a decision of the Supreme Court within the meaning of that sub-section. It was not denied that Cussen J. in entertaining and deciding the cause was exercising Federal jurisdiction with which the Supreme Court was invested by sec. 39 (2) of the Judiciary Ad | but it was said that sec. 39 (2) (a) did not operate to take away E the right of appeal to the Full Court from his decision for the following reasons, namely: (1) that on its true construction the sub-section did not apply to the judgment pronounced on the tria of the action ; (2) that if the sub-section did so apply it was rendered ineffective by the operation of the Colonial Laws Validity Act, and (3) that the sub-section was beyond the legislative competence 0! the Commonwealth Parliament. The Full Court rejected the first and second of these contentions, and it therefore became necessary, in order to determine whether (1) (1922) 31 C.L.R. 394; (1924) 34 C.L.R. 269. ;

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Ysaacs J. T agree with what is said in the judgment of the Chief tice, Gavan Duffy and Powers JJ., as to these cases falling within . 88a of the Judiciary Act and as to the competency of the Commonwealth Parliament to enact that section. But I defer the statement of my reasons for that opinion until I have dealt with other branch of the cases as argued before us. I refer to the ion of the validity of sub-sec. 2 (a) of sec. 39 of the Judiciary as that sub-section stands. Both branches of these cases 'ighly important to the constitutional power of the Common- ; but precedence in importance must unquestionably be given at concerning sec. 39 (2) (a). It means reviewing the Limerick se (1) at the two most sensitive points of its contact with Imperial control, namely, the effect on local tribunals of a standing decision the Judicial Committee and the control of future appeals to His Majesty in Council. I therefore place it first in order of consideration. question is: Has the Commonwealth Parliament the power under the Constitution so to regulate the exercise of Federal juris- dic tion by a State Supreme Court that appeals from that Court, xe eising that jurisdiction, shall be brought only to the High Court \ustralia ; thus eliminating whatever appeals from the State Court to the Privy Council might otherwise exist ? I should first state e concrete controversy that has arisen.

The Controversy. - The immediate matter before us is whether etwo orders of the Full Court of Victoria, made on 4th December granting leave to appeal to His Majesty in Council under the in Council of 23rd January 1911 should stand or be set aside. however, depends on the proper solution of one or both of problems in debate, constituting the separate branches I have ed to. The first problem is this: Assuming there were in cember judgments of the Full Court of the Supreme Court in two causes, which were valid and operative unless and until ersed or modified on appeal, did sec. 39 (2) (a) of the Judiciary Act 1903-1920 validly operate so as to make an appeal to this Court

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thus: Were there in law in the Supreme Court of Victoria at the time the December orders were made, judgments of the Full Court of 12th November 1925 - that is, judgments of which the law would - take cognizance and which fell within the Order in Council as judgments in and under the control of the Supreme Court? The argument for the respondents on the first problem was nominally limited to two points. Taking the Limerick Case (1) as otherwise governing the matter, the Court permitted reconsideration on two grounds only, namely, - (1) that it was inconsistent with the prior decision in Baster's Case (2), and (2) that it was inconsistent with the later case of Union Steamship Co. of New Zealand v. Commonwealth (3). On this, two observations must be made. Sir Edward Mitchell clearly stated that he wished to contest the accuracy of the Limerick Case generally, and claimed the right to do so. The limitation mentioned was imposed on him contra voluntatem, not becau his general right to raise any point of law was denied, but because the matter having been so recently considered at length and determined, the Court thought it useless to reopen it generally. The two points referred to presenting special features were mad exceptions. That is the first observation. The second is this: that Mr. Gregory, who followed Sir Edward Mitchell for the respondents, did in fact cover very much more ground than wa strictly limited by the two points referred to. In effect his argument ranged over many of the aspects which were dealt with by the Court in the Limerick Case and therefore may properly and, as I think may desirably be again mentioned here as they have appeared o: reconsideration. ' (2) Appeal in Federal Jurisdiction - The Limerick Case (which - did not touch the prerogative right of appeal (4)) admittedly covers the ground of the present cases, however they are regarded. Even if, as was contended, no question arose in December as tome the limits inter se of the constitutional powers of the Common- - wealth and of a State (which I shall for brevity call a question

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with the subject matter and so applying to the Dominion that 4 the power contained in the Constitution must be read as subject to the provisions of the Imperial Act. If that is the case, a local statute which looks only to the affirmative power appearing in the Constitution and disregards the other Imperial Act by transgressing its limitations would be repugnant to the last-mentioned Act, and so fall within the operation of sec. 2 of the Colonial Laws Validity Act. In that case the other Imperial Act would, on the assumption made, _ if anterior, be still in force and, if posterior, be overriding, in relation to the Constitution. This position is clearly stated in McCauley v. The King (1). But that all depends on the result of the necessary preliminary - inquiry whether the other Imperial Act does or does not control the power contained in the Constitution. We must always first find the power relied on as prima facie contained in the Constitution - on its true construction: otherwise the question of repugnancy cannot arise. It would otherwise be at the very threshold simply ultra vires of the local legislature from the standpoint of the Constitution alone. Supposing either by reason of an anterior but still limiting Imperial Act or of a later limiting Imperial Act the prima facie power contained in the Constitution is less than it - appears on its own language taken alone, the local Act which exceeds the limitation is by reason of its repugnancy ultra vires, but only to the extent of the repugnancy. The opinion of Sir Rowndell Palmer and Sir Robert Collier, to which I referred at some considerable length in Attorney-General for Queensland v. Attorney-General for the Commonwealth (2) and McCawley v. The King (3), was that the - effect of repugnancy at common law was that "the subject matter of the invalid part of the legislation is wholly ultra vires." Unless separable, that would bring to naught the whole of the legislation containing the invalid part. To save this total invalidity sec. 2 of - the Colonial Laws Validity Act was-passed. The section is, to my mind, rather a saving than a destructive provision. The effect of sec. 3 in this respect has, perhaps, not been fully recognized, and the two sections must be read together. If the result of comparing two

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'The Act was apparently the outcome of the position as disclosed in such cases as In re Cambridge (1). In 1855, when New South Wales and Victoria obtained their modern constitutions (18 & 19 Vict. chs. 54 and 55), it was novel in Australia. Lord John Russell, in his despatch dated 20th July 1855 to Governor Hotham of Victoria, spoke of " the introduction of responsible government," and referred to the Victorian Constitution as a "grant of self-government in more ample measure than has as yet been established in any colony of Great Britain." We know, and all the world knows, and we cannot in interpreting modern constitutions of the Empire ignore, the tremendous advance in status of the Dominions within the Empire even before 1900. That is only another mode of expressing the advance of local responsible government. Constitutions made, not for a single occasion, but for the continued life and progress of the community may and, indeed, must be affected in their general meaning and effect by what Lord Watson in Cooper v. Stuart (2) calls " the silent operation of constitutional principles." ' Respon- sible government," said Lord Haldane on an occasion referred to 'in the Engineers' Case (3), is " the greatest institution which exists in the Empire, and . . . pertains to every constitution established within the Empire." And it was to this Constitution that Lord Haldane was specially directing his words. It is part of the fabric on which the written words of the Constitution are superimposed. Its influence upon the actual working of the letter of local constitutions has been the acceptance of a doctrine, "amounting almost to a principle in itself, that the great self-governing Dominions are not any longer in tutelage but are constituent units of the British Commonwealth of Nations. The doctrine cannot be 'ignored in construing a recent written instrument of constitutional powers. It is now more than a high-sounding phrase or a statesman's aspiration. It is an acknowledged working thesis of the unwritten constitution of the Empire. Perhaps, since the Act 12 Geo. V. c. 4, the Irish Free State (Agreement) Act, and in view of the terms of the first and fourth articles of the agreement which by Imperial law is given " the force of law," it would be more correct to say that the (1) (1841) 3 Moo. P.C.0. 175. (2) (1889) 14 App. Cas. 286, at p. 293. (3) (1920) 28 C.LLR., at p. 147.

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my opinion, be judicially said to have placed the seal of for legal recognition on the actual character which the separate written constitutions of the great self-governing Dominions by force of general constitutional development already possessed. It is a conscious step in the legal evolution of the Empire. Taking those great and commanding principles in hand and applying them to the interpretation of the Australian Constitution, I cannot doubt that it is well within the power of the Australian Parliament, notwithstanding any existing Imperial legislation prior to the Constitution, when investing a State Supreme Court with Federal jurisdiction so to limit that investiture as to direct the stream judicial power at any given point into the High Court. Whate' subsequent course that stream may take depends in that case secs, 73 and 74 of the Constitution and on any step by certificate or legislation which may follow by authority of those sections. In relation to the present matter the Australian Constitution is not subordinate to, but is pro tanto superior to, the earlier Act, the Judicial Committee Act, passed at an earlier stage of constitution development. The significance of that fact is apprehended when it is remembered that the Order in Council is an Executive act to which statutory force is given by the Act under which it is made, But it is an Executive act on the advice of Imperial Ministers responsible only to the Imperial Parliament and yet controlling the civil rights of Australian citizens in Australia to appeal on (assumedly) Federal questions. Though the Order in Council is, for purposes of repugnancy to colonial Acts and consequent invalidity, placed on - the same footing as the Act under which it is made, yet it is not on the same footing for all purposes. It is not, for instance, in the same position as the direct regulative provisions of Parliament in the Merchant Shipping Act 1894. It needs the intermediate operation of responsible administration ; and when that is a factor, it may | entirely alter the emphasis to be placed on the later instrument of self-government. That instrument in this case must, in my opinion, be read as modifying the earlier enactment, at least to the extent of leaving the will of the Australian national Parliament on the subject of civil rights in Australia, in relation to Federal matters specifically

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America Act 1867 (30 & 31 Vict. c. 3), sec. 64, stating (inter alia)

that " the Constitution of the Executive Authorityin . . . Nova Scotia . . . shall, subject to the provisions of this Act, continue as jt exists at the Union until altered under the authority of this Act." Now, as pointed out in Clement on the Canadian Constitution, Ast ed., at p. 40, the Constitution of Nova Scotia consisted then of 'nothing but Royal Commissions and Instructions (and see 2nd ed., _p.2). The King's power in Victoria of granting by his Supreme urt of Victoria to his Victorian subjects leave to appeal to himself in Privy Council is a power to act judicially in right of his State of Victoria, and is properly called in law a constitutional power of that State. It is part of the law of the land relative to 'the subject matter. If it is not: part of the constitutional power of the State, neither is the King's power by his High Court of Australia to do the same thing by certificate under sec. 74 of the Australian Constitution a constitutional power of the Commonwealth. There 'can be no distinction in this respect between judicial power and legislative power. Therefore the legislative aspect does not exhaust 'the situation, and the matter cannot be disposed of summarily by saying: "It is a contest between the Imperial Act sustaining the Order in Council on the one hand and the Commonwealth Act 'denying the efficacy of the Order in Council on the other; therefore there is no Australian question inter se." There was a distinct question inter se. The objection taken in December was that the Supreme Court, that is, the judicial organ of the State, has no power 'in face of the Commonwealth legislation to make such an order. There was a question of conflict whether one power of the State, namely, its judicial power, or one power of the Commonwealth, "namely, its legislative power, should prevail. The contest was which of these two Australian powers of the Crown - the State judiciary power or the Commonwealth parliamentary power - 'dominated in the case before the Court. This was clearly indicated in the Limerick Case (1) (and see Pirrie v. McFarlane (2) ). It is _ nothing to the point to say an Imperial Act was behind the State

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State as Judge (by virtue, no doubt, of Imperial legislation) as opposed to the power of the Commonwealth as legislator (by virtue ; also of Imperial legislation). Otherwise it is always a conflict between Imperial Acts; for it is not consistent to regard the Commonwealth's legislative capacity as one competitive factor, regardless of the Imperial authority behind it, and to ignore the - State's judicial capacity and look only to the Imperial authority behind it. To do that would form an easy way through sec. 74 of : the Constitution. In my opinion, therefore, the moment there a arose in December the question inter se, the "' matter," that is, the : whole controversy between the parties, took on the character described in sec. 38a, and with the consequences provided by that section and sec. 40a. These sections I shall presently more closely deal with. The cause as it then stood was removed into this Court, not for the purpose of exercising any of the powers of the Supreme Court under the Order in Council, but for the purpose of determining whether sec. 39 (2) (a) was operative or not in insisting that no appeal lay except to this Court. If yes, then the application must be dismissed as incompetent. If no, then " the cause" could be fairly said to be one that should be remitted to the Supreme Court to be dealt with. I have said so much in deference to Mr. Gregory's very earnest argument as to the applicability of sec. 384 to the case, in view of the language of sec. 40. That consideration again suffices to end the matter. There are other reasons for this conclusion; and, so far as I am concerned, they are to be found generally in the judgment of Rich J. and myself in the Limerick Case (1). That brings me to the second branch of the case in which, as stated, I am in entire accord with the Chief : 4 Justice. (3) Secs. 38a and 40a. - The validity of these sections is not - disputed, and is, indeed, indisputable. They are an exercise of the legislative power conferred by sec. 77 (1.) and sec. 51 (xxx1x.) of the © (1) (1924) 35 O.L.R. 69. ¥

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of the Commonwealth under the Imperial Act, or as to the limits of the constitutional powers of the Commonwealth as between it and the Imperial Parliament. 'The Imperial Parliament, through its Act and the Order in Council ereunder, says that there may be an appeal (to the Privy Council ) ; the Federal Parliament says that there may not : can it be reasonably said that a question is involved as to the limits inter se of the constitutional powers of the State and the Commonwealth? Surely we ought not, without very express words, to treat sec. 74 of the Constitution as making the High Court the final exponent of the relations between an Imperial Act and a Commonwealth Act. _ The fact is that on the appeal to the Full Supreme Court from the judgment of Cussen J. there were no rival claims of the State 'and of the Commonwealth as to the possession of any constitutional power (I do not say that for the application of sec. 38a the State bea party to the cause). There was a claim that the Common- wealth Parliament has power to take away a litigant's right to ippeal to the Full Supreme Court or to the Privy Council; and 'this claim was denied: that is all. The fact that the conflict was as to the Commonwealth legislative powers in relation to a State Court does not bring the conflict within the meaning of sec. 74 of the Constitution ; and yet this fact is the cause of the confusion. A proper infer se question arose in the Steel Rail Case (Attorney- (feneral for New South Wales v. Collector of Customs for New South Wales (1) ), where the power of the State to make and execute laws _for railways came into conflict with the power of the Commonwealth _ to impose duties of Customs; and the Judicial Committee of the Privy Council obeyed sec. 74. An inter se question was also found to arise in Jones v. Commonwealth Court of Conciliation and Arbitration (2), where the State had power to legislate as to labour, and the Commonwealth had a power also - indirectly, through the Court of Conciliation; and sec. 74 was obeyed. But in each case _ the relative powers of State and Federation were in question.

Certainly, the learned Judges of the Supreme Court, in deciding the appeal from Cussen J., were not conscious that they were, or (1) (1909) A.C. 345. (2) (1917) A.C. 528; 24 C.L.R. 396.

At a glance

Court

Decision date

Before

Source

Judgment (195 paragraphs)

Parties