The Secretary, Postmaster-General’s Department, has forwarded for my advice the following memorandum:

Up to the present stamps which were valid for pre-payment of postage in an Australian Colony previous to Federation have to be accepted in prepayment of postage on articles posted in any State of the Commonwealth. It is considered that a continuance of the concession is not in the best interests of the Department, and it has therefore been decided to regard all pre-Federation State postage stamp issues as obsolete and to refuse to accept them in prepayment of postage in the future.

2. I shall be glad if you will kindly advise me whether any formality is necessary in order to give effect to this decision.

Section 69 of the Constitution provides for the transfer of ‘Posts, telegraphs, and telephones’ from each State to the Commonwealth on a date to be proclaimed. On 12 February 1901 the Governor-General proclaimed 1 March 1901 as the date upon which the Departments of Posts, Telegraphs, and Telephone in each State shall become transferred to the Commonwealth.

Section 85 of the Constitution reads:

When any department of the public service of a State is transferred to the Commonwealth—

1. …
2. …
3. …
4. The Commonwealth shall, at the date of the transfer, assume the current obligations of the State in respect of the Department transferred.

The question then arises whether pre-Federation stamps, sold prior to the date of the transfer, represented an obligation by the State concerned to render services equal to the face value of the stamps, and, if so, what is the exact nature of the obligation and what are its limitations. For this purpose, it is necessary to consider the Acts of the several States relating to postal services.

The provisions of those Acts, so far as is relevant to the present question, are similar in effect. It will, therefore, be sufficient to consider the provisions of the Acts of one State only.

I propose, therefore, to deal with the Victorian Act of 1890.

Section 19 of that Act required prepayment of postage to be effected by means of postage stamps except in certain specified cases, which are immaterial for the present purpose. Section 15 required the Postmaster-General to cause stamps to be made and sold. Section 17 required every postmaster to keep a stock of stamps and to sell them to any person applying for them. The word ‘stamp’ was defined to mean any stamp available for denoting fees or dues under the Act.

There was, I think, nothing in those provisions or in any other provision of the Act, which expressly imposed on the State an obligation to accept, in payment for service, stamps so made and sold. There was, however, in my opinion, an implied obligation in that respect. Support is given to this view by section 16, which authorises the use of perforated stamps, and provides that such stamps ‘shall be received in payment of any postage fees or dues and telegraph fees. The section goes on to provide that such stamps (presumably as distinct from unperforated stamps) shall not be purchased upon commission or exchanged by any officer of the Post Office.

Further, there was no power given by the Act to the Postmaster-General or any other authority to declare any stamp to be not available for the payment of postage, fees and dues under the Act. As the Act stood at the date of the transfer, any stamps sold in pursuance of the Act were, in my opinion, available for the payment of such postage, fees and dues. That position could have been changed only by an Act of the Victorian Parliament; and any such change is now impossible.

The Commonwealth, having taken over from the State the Department controlling posts, is, in my opinion, bound, just as that department was bound, in respect of the services which were transferred, to accept in payment of postage, fees and dues, stamps which were valid for the purpose under the State law.

This obligation being imposed by the Constitution, there is no power in the Commonwealth Parliament or in any Commonwealth authority to limit the obligation.

I am, therefore, of opinion that legal effect cannot be given to the decision to regard all pre-Federation State postage stamp issues as obsolete, and to refuse to accept them in prepayment of postage in the future.

But, whilst it is not possible to carry out the decision and at the same time make the position of the Department unassailable, I think that, provided ample notice were given, the proposed action could be taken without any serious risk of liability being incurred. Such notice should be published in the Commonwealth Gazette and in all the leading newspapers in each State or Territory. The notice should state that, within the period of notice, holders of the stamps would be permitted to use them for all purposes for which they are available under the Post and Telegraph Act and the regulations thereunder, or to tender them to the Department for repurchase.

I would suggest that it might also be announced that such stamps might be exchanged for stamps of current issues of the same face value. If, say, six months notice were given, that should afford sufficient time within which holders might use the stamps. It is, I think, improbable that any person having such stamps would claim compensation from the Department by reason of his being unable to use them after the expiration of the period. If any such claim were made, it could probably be settled by an offer of stamps of current issues in exchange for those held by the claimant.

I may add that there appears to be no express power to withdraw or declare obsolete stamps issued under the Commonwealth Post and Telegraph Act. I would suggest that, when amendment of that Act is next contemplated, consideration be given to the question of inserting in the Act express provision for declaring any particular stamps issued under the Act to be not available for payment of postage, &c., unless used within a specified time.

[Vol. 27, p. 589]