Opinion Number. 1605

Subject

trade and commerce power of commonwealth to legislate in relation to control of commercial trusts and restrictive trade practices: freedom of interstate trade: examination of new zealand legislation

Key Legislation

Commercial Trusts Act 1910 (NZ) ss 3, 4, 5, 6-8: Board of Trade Act 1919 (NZ) s 32: Australian Industries Preservation Act 1906 ss 7, 7A, 7B: Interstate Commission Act 1912: constitution s 92

Date
Client
The Comptroller-General, Department of Trade and Customs

I refer to your memorandum dated the 2nd June, 1936, asking whether any of the provisions of the Commercial Trusts Act 1910 and the Board of Trade Act 1919 of the Dominion of New Zealand are covered by Commonwealth legislation and, if not, whether any of the provisions of those Acts could be effectively embodied in Commonwealth legislation.

In the first place, if the operations of the Hardware Associations to which you refer in your memorandum are confined to intrastate trade, it is not constitutionally possible for the Commonwealth to legislate with regard thereto.

In so far as the operations of such Associations are interstate, the Commonwealth has legislative powers, but those powers are subject to the limitations imposed by section 92 of the Constitution.

Dealing specifically with your request for advice as to whether any of the provisions of the Commercial Trusts Act 1910 and the Board of Trade Act 1919 of the Dominion of New Zealand could be effectively embodied in Commonwealth legislation, I would point out that sections 7, 7A and 7B of the Australian Industries Preservation Act are directed against the same class of trade abuses as are sections 3, 4 and 5 of the Commercial Trusts Act of New Zealand. There are, however, no provisions in the Commonwealth Act corresponding to sections 6–8 of the New Zealand Act. It would appear possible to amend the Commonwealth Act by the insertion of provisions on the lines of sections 6–8 of the Act of the Dominion but, owing to the provisions of section 92 of the Constitution, it is extremely doubtful as to how far such legislation would be valid.

The Board of Trade Act 1919 of the Dominion confers on the Minister of Industries and Commerce certain powers to make judicial inquiries into any industry and is somewhat on the lines of the Interstate Commission Act 1912 of the Commonwealth. Section 32 of the New Zealand Act makes special provision in prevention of profiteering. It would not be legally possible for the Commonwealth, on account of constitutional limitations, to pass legislation on the lines of section 32. It appears from the case of Christie v. Hastie, Bull & Pickering Ltd (1921 (N.Z.L.R. 1)) that this section was intended to prevent the abnormal conditions following the war from being used by traders for their own aggrandisement, and I have no information as to whether any action has been taken against profiteering under this section during recent years.

[Vol. 29, p. 397]