Opinion Number. 1560

Subject

preference : discrimination deeming of certain ships carrying passengers between ports not connected by railway not to be engaged in coasting trade: whether unconstitutional preference or discrimination: whether discrimination based upon States or parts of States

Key Legislation

Navigation Act 1912 ss 7, 286(6): constitution ss 51(i), (ii), 98, 99, 117

Date

It is proposed to amend the Navigation Act by inserting after the first proviso in section 7, the following new proviso:

Provided further that a British ship of not less than ten thousand tons gross tonnage and a sea speed of not less than fourteen knots shall not be deemed to be engaged in the coasting trade, within the meaning of this Act, by reason of the fact that she takes on board, or carries, passengers who are to be, or are being, conveyed from a port in Australia (without break of journey or transhipment at any intermediate port) to another port in Australia with which the first mentioned port is not connected by a railway:

and I am asked to advise whether the proposed new proviso is within the powers of the Parliament of the Commonwealth.

In my opinion, the proposed new proviso is within the powers of the Parliament of the Commonwealth.

If the proposed new proviso is invalid, it must be so because it contravenes the restrictions imposed upon powers conferred upon the Parliament of the Commonwealth by section 51(i) as extended by section 98, which restrictions are contained either in section 99 or section 117 of the Constitution.

The new proviso does not contravene the restriction imposed by section 117, because the application of that section depends upon residence only, and the new proviso does not refer to residents (James v. The Commonwealth 41 C.L.R. 442 at pages 454, 457, 464; Lee Fay v. Vincent 7 C.L.R. 389).

Section 99 of the Constitution has been discussed by the Privy Council in Colonial Sugar v. Irving (1906) Appeal Cases 360, and by the High Court in conjunction with section 51(ii) in The King v. Barger, 6 C.L.R. 41; Cameron v. Deputy Federal Commissioner of Taxation 32 C.L.R. 68; and James v. The Commonwealth 41 C.L.R. 442.

It appears to me to follow from the reasoning of the last two mentioned decisions that the High Court in deciding whether the Act by the Commonwealth Parliament infringes section 99, will apply substantially the same tests as were applied by Isaacs and Higgins J.J. in Barger’s case, by Isaacs J. at pp. 105 and 106, and by Higgins J. at p. 138 and following.

These two Justices decided:

  1. that the words ‘give preference’ in section 99 have the same meaning as the word ‘discriminate’ in section 51(2);
  2. that the Constitution does not require uniformity either in taxation or in laws of trade and commerce, and that the discrimination or preference which the Constitution forbids is a discrimination based upon States or parts of States.

Isaacs J. said at p. 107:

The treatment that is forbidden, discrimination or preference, is in relation to the localities considered as parts of States, and not as mere Australian localities, or parts of the Commonwealth considered as a single country.

and his observations are cited with approval by Knox C.J. in Cameron’s case at p. 72.

Higgins J. said at p. 131 that:

Parliament does not discriminate between States when it applies the same rule to all the States, even if some of the means of exemption are not for the time being applicable in all the States. Parliament may not discriminate between States, but the facts may and often must.

and his observations are cited by himself twenty years later in James v. The Commonwealth.

In the proposed proviso there is the preference given to a certain class of ship and to passengers embarking at certain ports to travel in a certain way to certain other ports. The discrimination in favour of certain ships is clearly free from objection. If the preference given to passengers is a fact, it must be on the ground that the preference is given to a State, or a part of a State, but this preference is given, not because the port of embarkation or destination is in any particular State, but because the two ports are not connected by a railway. In my opinion, therefore, the want of rail connection is the test with which the ports must comply in order that the ship may claim exemption, and therefore the preference does not contravene the restriction imposed by section 99. The ports in question might be situated anywhere on the Australian coast. The voyage for instance, might be between Adelaide and Wyndham or between Melbourne and Twofold Bay as well as between Hobart and Melbourne. As Higgins J. said in James v. The Commonwealth, at p. 461, when answering the objection, that in 1928 there were no dried fruits grown in Tasmania or Queensland ‘We cannot take judicial notice of such a fact; nor can we assume a limit to the possibilities of a State trade or commerce under the changing conditions of science and invention.’

I may also call attention to sub-section 6 of section 286, which was inserted in the Navigation Act by Act No. 8 of 1926. In my opinion the proposed new proviso is of the same validity as that sub-section and I would call attention to the instances of discrimination between ports of the Commonwealth in other Commonwealth Statutes which are to be found collected in the speech of the Attorney-General, reported in Hansard, January 27 1926, at p. 396.

[Vol. 27, p. 359]

(1) Harold Sprent Nicholas. Born 8 January 1877, Hobart Town, Tasmania; died 11 June 1953, Darlinghurst, NSW. Admitted London Bar 1901; NSW Bar 1901. Counsel assisting the Royal Commission on the Constitution 1927–1928. Member, NSW Legislative Council (United Australia Party) 1932–1935. Appointed Justice NSW Supreme Court and Probate Judge 1935; Chief Judge in Equity 1939–1947. Author, The Australian Constitution 1948. First editor, Australian Quarterly 1929–1934.