The Secretary, Department of Defence, has forwarded to me for advice the
following memorandum:

It is noted that the New South Wales State Transport (Co-ordination) Act 1931 (Act No. 32 of 1931) which gives the State Transport Board wide powers to regulate or prohibit motor transport, includes aircraft in the definition of ‘Motor vehicle’.

The attached copy of cutting from the Melbourne Age of 1st February, 1932, indicates that the Transport Board is now applying the provisions of this legislation to aircraft. I am not aware whether similar action is contemplated by the Board in respect of New England Airways which conducts an air service between Sydney and Brisbane and, in addition to passengers and freights, conveys mails under arrangement with the Postmaster-General’s Department.

You are of course aware that the Commonwealth exercises control of civil aviation within Australia by virtue of Regulations under the Air Navigation Act 1920, and that for defence and other reasons has devoted much effort and money to promote its growth. Consequently action such as that reported in the Age cannot but be viewed with concern.

I am therefore to ask advice whether the New South Wales Transport Act can constitutionally be applied to aircraft engaged on either interstate or intrastate operations. If the legislation is held to be valid your advice would be appreciated as to what (if any) action could be taken by the Commonwealth to protect civil aviation undertakings from such legislation which if applied harshly might well stultify the efforts of the Commonwealth.

The copy cutting from the Melbourne Age of 1 February 1932 is as follows:

Tax on Air Passengers.

Transport Board’s Proposal.

SYDNEY, Sunday —Owing to the decision of the Transport Board to charge a tax of one penny per mile for air passengers between Sydney and Orange, a company which proposed to begin a service has decided not to do so.

It was learned to-night that the decision of the Transport Board to impose the tax may be tested in court. The tax has not been provided for in the Act, and those who wish to run planes purely for service within the State contend that it should not be applied to those working only within the State Boundaries.

An official of Mascot aerodrome to-night stated that the tax could not be levied on any interstate passenger planes.

Section 12 of the State Transport (Co-ordination) Act 1931 provides that any person who operates an unlicensed public motor vehicle is guilty of an offence against the Act. Sub-section (1) of the section reads as follows:

12. (1) Any person who after a date appointed by the Governor and notified by proclamation published in the Gazette operates a public motor vehicle shall, unless such vehicle is licensed under this Act by the Board and unless he is the holder of such licence, be guilty of an offence against this Act: Provided that this subsection shall not apply to a public motor vehicle that is being operated under and in accordance with an exemption from the requirement of being licensed granted under section nineteen or a permit granted under section twenty-two of this Act.

In section 3 of the Act ‘motor vehicle’ and ‘public motor vehicle’ are defined as follows:

‘Motor vehicle’ means any vehicle whatsoever propelled by mechanical means and includes a tractor or trailer and also includes aircraft, but does not include a vehicle used on a railway or tramway.

‘Public motor vehicle’ means a motor vehicle (as hereinbefore defined) –

1. 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
2. plying or travelling or standing in a public street for or in hire or in the course of any trade or business whatsoever.

Section 14 of the Act provides that every person desiring to operate a public motor vehicle of which he is the owner shall apply to the Board appointed under the Act or to the prescribed person or authority for a licence for such vehicle under the Act. By section 18 of the Act the Board appointed under the Act may, in any licence for a public motor vehicle to be issued under the Act that authorises the holder to carry goods or goods and passengers, impose a condition that the licensee shall pay to them such sums as shall be ascertained as the Board may determine.

In my opinion, the provisions of the above Act would not apply to aircraft engaged solely in interstate operations (W. and A. McArthur Ltd. v. State of Queensland and others 28 C.L.R. p. 530; James v. State of South Australia 40.C.L.R. p. 1). I think , however, that aircraft which carry goods or passengers between places within the State of New South Wales and which do not go beyond the limits of the State, are subject to the laws of the State of New South Wales. The owners of such aircraft would, therefore, require to hold licences under the State Transport (Co-ordination) Act.

The Commonwealth of Australia has certain powers as to aviation and in 1920 the Commonwealth Parliament passed an Act known as the Air Navigation Act. By that Act the Governor-General is empowered to make regulations for the purpose of carrying out and giving effect to the Convention for the Regulation of Aerial Navigation signed in Paris in 1919 and for the purpose of providing for the control of Air Navigation in the Commonwealth.

The present relationship of Commonwealth and State powers with respect to aviation is succinctly set out in the following evidence given by the late Solicitor-General,
Sir Robert Garran, before the Royal Commission on the Constitution of the Commonwealth:

The matter of aviation has been discussed at Premiers’ Conferences, and the evidence I am going to give now illustrates the inadequacy of conferences and also the difficulty of applying the power contained in the Constitution to refer matters to the Commonwealth for legislation. In 1920, the Prime Minister brought the question of aviation before the Premiers’ Conference, and the State agreed to hand over to the Commonwealth the control of aerial navigation. The resolution was in this form–‘Resolved that it is desirable that each of the Parliaments of the States should refer to the Parliament of the Commonwealth pursuant to section 51(37) of the Commonwealth of Australia Constitution Act the matter of the control of air navigation, but so as to retain to each State (a) the right to own and or use for the purposes of the Government of the States aircraft operating within the State, and (b) the police powers of the State. (2) That it is desirable that pending the passing of legislation by the Parliament of the Commonwealth pursuant to such reference the States shall each enact regulations similar to the Imperial Act, 90.5 ch.3. to secure uniform legislation and regulations. That the Premier of New South Wales as executive officer be requested to draft and submit to the State Governments (a) a bill to provide for the regulations for the control by the Commonwealth of the necessary powers in accordance with the terms of paragraph 1 of the foregoing resolution, and (b) a bill to provide for uniform action by the States pending the passage of Commonwealth legislation.’ Those resolutions were presented to the Prime Minister later in the sitting and were subsequently arranged to be discussed at the conference between the Prime Minister and the Premiers on the 29th May, but they do not appear to have been dealt with at that meeting. Following on that, the Commonwealth Government passed the Air Navigation Act 1920, which contains a clause postponing the commencement of the Act until a date to be proclaimed, and provides that the Governor-General may make regulations, firstly, for the purpose of carrying out the provisions of the Air Convention and, secondly, for the regulation of aviation. Four States dealt with the matter, Tasmania and Queensland passed acts substantially in accordance with the terms of the resolution–Victoria and South Australia passed acts on quite different lines, referring to the Commonwealth the power to legislate (a) to carry out the Aerial Navigation Convention, and (b) to carry out interstate aerial navigation. That was an incomplete gift to the Parliament as we understand we already had those powers. The two other States did not pass any legislation at all on the matter. The result is that in two States, Tasmania and Queensland, we have the power we asked; in two other States, Victoria and South Australia, we have power to carry out the Navigation Convention; but in the other two States, Western Australia and New South Wales, nothing has been done.

In view of the fact that New South Wales has not referred to the Parliament of the Commonwealth powers relating to aviation, the control of aviation within the State of New South Wales would appear to be regulated by State law. The Commonwealth, therefore, in my opinion, can take no action with respect to civil aviation in New South Wales, except where such is a matter of foreign or interstate trade or commerce.

[Vol. 25, p. 566]