I refer to you memorandum (362/30) dated the 15th May, 1936, forwarding copies of draft Therapeutic Substances (Biological) Bill and requesting advice as to whether it is in a form for presentation to Parliament.⁽¹⁾

I assume that the reference to form includes not only a reference to the arrangement of the clauses and their drafting, but also a reference to the substance of the draft measure. For present purposes it is sufficient to deal with the draft bill from the point of view of the constitutionality of the proposed provisions.

The draft bill is designed primarily to regulate and control the importation, exportation, manufacture, distribution and sale of therapeutic substances.

In my memorandum (34/1292) dated the 10th September, 1934,⁽²⁾ I said that ‘Where such products are the subject of interstate or foreign trade, the Commonwealth power is complete’. That statement must now, however, be qualified by reason of the recent judgment of the Privy Council in James v. The Commonwealth⁽³⁾ in which it was decided that section 92 of the Constitution binds the Commonwealth. In the light of this decision it appears that paragraphs (b) and (c) (first occurring) of clause 7 of the draft bill are not within the powers of the Commonwealth Parliament.

The effect of those paragraphs would, I think, be to prohibit interstate trade and commerce in therapeutic substances other than those specified in the clause. Such a prohibition would, in my opinion, be an attempted interference with the freedom of interstate trade in those products and would, therefore, be invalid.

In paragraph (d) of clause 8 a further reference to the interstate distribution of these products is made. Under this paragraph, power is sought to prescribe precautions to be taken in relation to such distribution. The decision in James’ case makes it clear that there is a wide field of regulation of interstate commerce still open to the Commonwealth and within that field fall matters necessary or convenient to be prescribed for ensuring the safe carriage of goods and persons and the protection of other goods and persons from damage or injury from goods or persons which are the subject of interstate trade or commerce. In substance, therefore, I think that paragraph (d) of clause 8 could be validly enacted.

With regard to clause 10 of the draft bill I am doubtful whether the Commonwealth Parliament has power to regulate or control the manufacture in a State of therapeutic substances. Manufacture is not trade or commerce, and the Commonwealth could not, therefore, rely on its trade and commerce power to support any such legislation. And I do not think that a provision on the lines of clause 10 would be incidental to the quarantine power. The clause purports to prohibit the preparation (except under certain conditions) of therapeutic substances for sale for export etc. The application of the clause would depend, therefore, on the intention of the manufacturer at the time of manufacture. Apart from the question of validity the clause would be difficult if not impossible of enforcement. I think, therefore, that it should be omitted.

In my memorandum of the 10th October, 1934, a passage occurs on page 3 (line 7) which suggests that I then held the view that it was competent for the Commonwealth Parliament to control the manufacture of products intended for interstate or overseas trade. The passage should, however, be read as saying that the Commonwealth Parliament may prescribe the standards which must be complied with by such products in order that they may be the subjects of interstate or overseas trade or commerce. With regard to interstate or overseas trade or commerce, the Commonwealth’s power in this respect is, of course, gone.

With regard to clause 13 the reference to ‘emergency’ is somewhat vague. I assume that the existence of a disease epidemic would constitute such an emergency. I suggest the insertion after the word ‘emergency’ (wherever occurring) of words such as ‘requiring the urgent application of quarantine measure’. I think also that provision should be included for the proclamation of a state of emergency.

It is observed that the power to prescribe standards etc. is proposed to be placed in the hands of the Minister. I suggest that, as reference to the Federal Health Council and the Federal Veterinary Council are now omitted, this power might, as usual, be given to the Governor-General.

To summarize the views expressed above:

1. there is no power to prohibit interstate trade in therapeutic substances other than those prepared by licensed manufacturers etc.;
2. there is power to prescribe the precautions to be taken in the distribution interstate of these products;
3. there is no power to regulate or control the manufacture in a State of these products;
4. there is power to control and regulate the importation and exportation of these products;
5. the nature of the ‘emergency’ referred to in clause 13 of the draft bill should be defined; and
6. the power to prescribe standards etc. should be given to the Governor-General.

[Vol. 29, p. 292]

(1) See Therapeutic Substances Act 1937 (since repealed).

(2) Opinion No. 1565.

(3) (1936) 55 CLR 1.