I am in receipt of your memorandum dated 14th November, 1940, setting out certain proposals which have been put forward for the control of hire purchase agreements and cash orders and requesting me to consider whether the National Security Act is sufficiently wide to enable them to be put into operation.

Section 5 of the National Security Act authorizes the Governor-General to make regulations for securing the public safety and defence of the Commonwealth. That Act is enacted primarily, if not exclusively, in pursuance of the power conferred by placitum (vi.) of section 51 of the Constitution, by which the Parliament is authorized to make laws with respect to ‘the naval and military defence of the Commonwealth and of the several States, and the control of the forces to execute and maintain the laws of the Commonwealth’. The question on which I am asked to advise, therefore, resolves itself into an inquiry as to whether the proposed regulations are authorized by the provisions quoted. It has been held by the High Court in Farey v. Burvett (21 C.L.R. 433) that the subject matter of those provisions includes all kinds of war-like preparations. It includes preparations for war in time of peace and any such action in time of war as may conduce to the successful prosecution of the war and defeat of the enemy. The power to legislate with respect to defence, it was held, extends to any law which may tend to the conservation or development of the resources of the Commonwealth so far as they can be directed to success in war, or may tend to distress the enemy or diminish his resources. One test must always be applied, namely: Can the measure in question conduce to the efficiency of the forces of the Empire or is the connexion of cause and effect between the measure and the desired efficiency so remote that the one cannot reasonably be regarded as affecting the other?

It is, therefore, necessary to inquire whether the proposed regulations can be regarded substantially as laws relating to defence, in other words, whether they can conduce to the more effectual prosecution of the war.

In my view, the proposals relating to hire purchase agreements set out in paragraphs (a), (b) and (c) are clearly justified by the defence power. I have considerable doubt, however, as to whether the proposal in paragraph (d) can, in its entirety, be justified. I think it can be justified in so far as it is necessary to make such provisions by reason of the maximum period for hire purchase agreements being fixed at thirty months. In my view, however, it cannot be justified in other cases.

The proposals relating to case orders set out in paragraphs (a), (b), (c), (d), (f), (i) and possibly (j) can lawfully be given effect to by regulations under the National Security Act. As at present advised, the connexion between the proposals in paragraphs (e), (g) and (h) and the defence of the Commonwealth appears to me, if it exists at all, to be so tenuous that I do not think effect can be given to them by regulations under the National Security Act. A stronger case could, however, be presented for the proposal in paragraph (h) than for those in paragraphs (e) and (g).

The papers forwarded with your memorandum are returned herewith. With further reference to the proposal in paragraph (d) as to hire-purchase agreements I think that it would be in order to provide for the preservation of the equity where goods are returned or re-possessed because of circumstances arising out of the war.

[Vol. 33, p. 403]