Opinion Number. 1517


Interstate Trade and Commerce freedom of interstate trade and commerce: acquisition of produce by state: Exercise of executive power for purpose of restricting interstate commerce: application of constitutional prohibition to executive action: privy council decision in james v cowan (1932) 47 clr 386

Key Legislation

dried fruits act 1924 (SA): CONSTITUTION s 92

The Minister for Commerce

I have considered the decision of the Privy Council in the case of James v. Cowan(1) arising under the Dried Fruits Act of the State of South Australia.

In that case the Minister purported to acquire compulsorily certain dried fruits, the section under which he acted making his power expressly subject to section 92 of the Constitution.

The essence of the decision of the Privy Council is that any State Act which arms a Minister with the power of acquisition for the purpose of enabling him to place restrictions on interstate commerce (as opposed to the purpose of taking preventive measures against famine or disease and the like) is as invalid as if the legislation itself had imposed the restrictions. The Privy Council lays it down that the Constitution is not to be mocked by substituting executive for legislative interference with freedom.

In the particular case the Privy Council held that the only question arising appeared to be whether the Minister did exercise his powers so as to restrict the absolute freedom of interstate trade. It took the view that if the Minister exercised the powers 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 interstate trade was affected.

It appeared clear to the Privy Council that in that case the direct object of the exercise of the powers was to interfere with interstate trade and the exercise was therefore in conflict with section 92 of the Constitution.

It seems clear, therefore, that any State legislation which has as its direct object the interference with interstate trade would necessarily be invalid.

The Privy Council left undetermined the question whether section 92 of the Constitution applied to the Commonwealth as well as to the States. This is a question upon which the High Court has expressed different opinions, but its final opinion is that section 92 does not restrict the Commonwealth. There is no indication in the Privy Council’s judgment in the case of James v. Cowan as to what the attitude of the Privy Council thereon would be.(2)

[Vol. 25, p. 791]

(1) (1932) 47 CLR 386; [1932] AC 542.

(2) See James v Commonwealth (1936) 55 CLR 1; [1936] AC 578, where the Privy Council held that the Commonwealth was bound by s 92 of the Constitution.