Opinion Number. 1334


Trade practices trade practices: profiteering: power of commonwealth to control price of necessaries: limits of trade and commerce power: freedom of interstate trade: power to investigate: constitution of royal commission with compulsive powers

Key Legislation

CONSTITUTION ss 51(xxxix), 92, 128: ROYAL COMMISSIONS ACT 1902 s 1A

The Comptroller-General of Customs

The Comptroller-General of Customs has forwarded me the following memorandum for advice:

In the ‘Age’ of 3/8/23 an article appears, reading in part as follows:

Is it not time that the Commonwealth Government took definite and decisive action to curtail the vicious profiteering which is being practised? Almost every branch of trade concerned with the supply of necessaries of life to the public is under the domination of Combines, which seem to have a direct dispensation to plunder the people at their own sweet will.

I should be glad if the Secretary would please advise me whether the Commonwealth Government can legislate along the lines suggested in the article, and whether a Public Investigator could be appointed by the Commonwealth Government to investigate profiteering and the business transactions of Combines or Trusts.

The matters which the Age article suggests should be dealt with by the Commonwealth Government are profiteering and the control of necessaries by combines.

The Commonwealth Government has not in time of peace, the constitutional power to deal with profiteering by the fixation of prices.

The Commonwealth can, it is thought, under its trade and commerce power, legislate in regard to the control of any commodity but subject to section 92 of the Constitution such legislation would have to be restricted to regulating the interstate or foreign trade in that commodity. The intrastate dealing in that commodity could not be dealt with by legislation under the trade and commerce power.

The Commonwealth could appoint a person to investigate any subject upon which it desires information. The investigator however would not have power to require the attendance of witnesses etc. unless he had been constituted a Royal Commission, or were specially empowered by legislation. A Royal Commission may be appointed to inquire into any matter connected with the peace, order and good government of the Commonwealth or any public purpose or any power of the Commonwealth (Royal Commissions Act 1902–1912 section 1A).

In the case of the Colonial Sugar Refining Co. v. Attorney-General for the Commonwealth,(1) it was held by a majority of the High Court that the Royal Commissions Act might be invoked to compel persons to give evidence on matters as to which the Executive Government of the Commonwealth thinks it desirable to collect information to be made use of in exercising any existing power of the Commonwealth Parliament and that the Act is incidental to the execution of that power within the meaning of section 51(xxxix) of the Constitution.

The Court further decided (Isaacs & Higgins J.J. dissenting) that such an incidental power does not extend to enacting a law compelling persons to give evidence on matters information as to which is relevant only to a possible amendment of the Constitution under section 128 thereof.

Legislation to combat profiteering is not within the present constitutional powers of the Commonwealth Parliament and a Royal Commission could not, in consequence of the above decision be appointed to investigate the matter.

I desire to point out, however, that the High Court has recently reviewed many of its own previous decisions, some of them on questions of vital importance. The most notable of such reviews is that contained in the Engineers case.(2) It is quite possible that the High Court as now constituted would be disposed to review the decision in the Colonial Sugar Company’s case to the extent of holding that it is competent for the Commonwealth to appoint a Royal Commission to investigate a matter not now within the Commonwealth’s legislative power but to include which in such power it is proposed to seek an amendment of the Constitution.

[Vol. 20, p. 181]

(1) (1912) 15 CLR 182.

(2) Amalgamated Society of Engineers v Adelaide Steamship Co Ltd (1920) 28 CLR 129.