Opinion Number. 1713


referral of powers

Key Legislation

CONSTITUTION ss 51(i), (ii), (iii), (xii), (xvi), (xx), (xxix), (xxx), (xxxi), (xxxiii), (xxxiv), (xxxvii), 92, 99, 105A, 114: proposed COMMONWEALTH POWERS BILL cll 2(b), 2(c), 2(e), 2(g), 2(h), 2(j), 3: COLONIAL LAWS VALIDITY ACT 1865 (U.K.) (28 &29 Vict. c. 63) s 5: STATUTE OF WESTMINSTER 1931 (U.K.) (22 & 23 Geo. V c. 4) s 10


When the States refer matters to the Commonwealth Parliament under section 51 (xxxvii) several legal questions arise which are not as yet covered by authority. This memorandum attempts an answer to some of the questions.

1. What is the relation between the matters ‘referred’ under section 51 (xxxvii) and the remainder of the Constitution?

When matters are ‘referred’ by States to the Commonwealth under paragraph (xxxvii), the matters may be imagined as forming a list, inset under paragraph (xxxvii) itself. This list would in one sense be separate altogether from the main list that section 51 itself contains. It is a new grant of power, subject to the very special conditions contained in paragraph (xxxvii). But it is not entirely independent of the rest. It does form part of section 51, and as such it is governed by the general covering words with which the section opens. The power of the Commonwealth Parliament to make laws with respect to the ‘referred’ matters is thus expressly made ‘subject to this Constitution’. What consequences follow?

One governing principle appears to be that a State plainly cannot, by its own independent action in referring a matter to the Commonwealth under section 51 (xxxvii), either impair or limit or enlarge or alter the interpretation of the specific legislative powers already conferred on the Commonwealth by the Constitution itself. The State can indeed confer additional powers, so as to supplement or fill up gaps in those directly conferred. But they are additional powers, and the existing powers remain as they were.

A second governing principle appears to be that under section (xxxvii) a State can only ‘refer’ to the Commonwealth matters that are within its own powers. By ‘referring’ matters to the Commonwealth, it enables the Commonwealth to exercise a legislative power concurrent with its own, with respect to the subject-matter.

A third governing principle is that the subject-matters in the new list must be read alongside those in the existing list, and must be construed if possible so as to avoid repugnancy or contradiction, and so as to resolve clashes where they do arise. In this regard, the relation between a ‘new’ power and an ‘old’ one is thus the same as the relation between one ‘old’ power and another, or between one ‘new’ power and another. Subject to the two principles noted above, the familiar rules apply.

The provisions of the Constitution that are relevant to these principles fall roughly into two groups.

The first group consists of sections or paragraphs that merely specify subject-matters with respect to which the Commonwealth Parliament is empowered to make laws.

Most of the paragraphs of section 51 fall into this group. Illustrations are ‘currency, coinage and legal tender’ (paragraph xii) and ‘bills of exchange and promissory notes’ (paragraph xvi). In this group the only question that usually arises is whether or not a particular subject is included in the power.

The second group of provisions contains those which (in one form or another) impose restrictions or limitations upon the exercise of Commonwealth powers.

Some of these limitations are contained in separate sections like section 92 (no interference with the freedom of interstate trade), 99 (no preference to any State in any law of trade commerce or revenue) and 114 (no taxation of State property).

There are however a good many restrictions or limitations which are embodied in one form or another in the same provision that confers the Commonwealth’s legislative power. An illustration is ‘taxation; but so as not to discriminate between States or parts of States’ (section 51(ii)). See also paragraph (iii) of section 51 (bounties shall be uniform throughout the Commonwealth). In our opinion paragraph (xxxi) of section 51 should also be included in this group ‘acquisition of property on just terms from any State or person for any purpose in respect of which the Parliament has power to make laws’. In effect this prohibits the Commonwealth from acquiring property otherwise than ‘on just terms’. Another restriction is to be found in paragraph (xxxiv) of section 51–‘railway construction and extension in any State with the consent of that State’.

For the purpose of interpretation the provisions of the Constitution must of course be read as a whole. In dealing with the first group of provisions noted above (merely designating the subject-matters of power) a question that frequently arises is whether the scope of one power is to be cut down by reference to the existence of some other power. In a Constitution it is always dangerous to do this. Subject-matters of legislative power are not like algebraic symbols, each standing for mutually exclusive entities. Merely because of the imperfections of language they will necessarily overlap. What is more, in framing a Constitution there are frequently good practical reasons for expressly mentioning matters rather than leaving them to be inferred by implication. A clear example is to be found in paragraphs (xxix) and (xxx) of section 51. It would be absurd to interpret ‘external affairs’ (paragraph xxix) in any sense that would exclude ‘the relations of the Commonwealth with the islands of the Pacific’. (paragraph xxx).

Bearing in mind the first ‘governing principle’ above, it is perfectly clear that the matters ‘referred’ by the States under section 51(xxxvii) cannot be used to cut down or modify the interpretation of anything contained in what we have called the first group of constitutional provisions–those which merely designate the subject-matters of Commonwealth power. If it were otherwise, a State might be able by a dexterous reference of some narrow subject-matter to cut down the scope of an existing Commonwealth power.

One or two obvious examples may be taken from clause 2 of the proposed Commonwealth Powers Bill.(1) Paragraph (e) (trusts, combines and monopolies) will plainly not restrict the Commonwealth’s existing power of interstate and overseas trade and commerce and over foreign corporations (paragraphs i and xx of section 51).

The same thing is true where a State refers a matter to the Commonwealth subject to some specific limitation. Thus in paragraph (g) of clause 2 in the draft Bill the States propose to refer to the Commonwealth the ‘production of goods’. But there is a limitation–that ‘primary production’ is ‘referred’ only with the consent of the Governor-in-Council of the State. In our opinion this limitation could not operate so as to fetter the Commonwealth’s power to deal with primary production under some other head of power in section 51–e.g. bounties (paragraph iii) or defence (paragraph vi) or external affairs (paragraph xxix). Thus, in our opinion, if the Commonwealth is eventually bound to restrict the production of wheat under the proposed International Wheat Agreement, its authority under the ‘external affairs’ power to carry out the Agreement will not be limited by paragraph (g) of section 2 in the Commonwealth Powers Bill.

Conversely, and applying the same principles, the existing trade and commerce power contained in paragraph (i) of section 51 (commerce with other countries and among the States) will not operate so as to restrict the scope of the new power with respect to the organized marketing of commodities. (Clause 2(c) in the draft Bill). The position is just the same as it is with the express powers, already in section 51, with respect to such matters as bills of exchange and banking. Similarly, under the draft Bill, the new powers with respect to trusts, combines and monopolies (paragraph (e)) profiteering and prices (paragraph (b)) and air transport (paragraph (i)) will be exercisable not only in the course of interstate and overseas trade but intrastate as well.

But what effect will the ‘referred’ powers have on what we have called the second group of relevant constitutional provisions–those that impose restrictions on the Commonwealth: section 92 for example? The answer, bearing in mind the second ‘governing principle’ that paragraph (xxxvii) of section 51 is essentially a ‘transfer’ section, is that a State by ‘referring’ a matter to the Commonwealth cannot possibly enable the Commonwealth to escape from a restriction or prohibition or limitation imposed on the Commonwealth by the Constitution. To hold otherwise would not be to treat the Commonwealth’s power over the ‘referred’ matters as ‘subject to the Constitution’ at all.

Accordingly, when a State ‘refers’ to the Commonwealth the matter of ‘organized marketing of commodities’ (paragraph (c) of clause 2 of the draft Bill) the Commonwealth’s power with respect to marketing will still be subject to section 92. So also, in our opinion, the reference of ‘trusts combines and monopolies’ (paragraph (e)) will not enable the Commonwealth to override the safeguard for the States contained in section 99–no ‘preference’ in laws of trade or commerce.

The same principle applies where a definite restriction on the Commonwealth is contained in the same provision (section 51) that confers the power. By paragraph (xxxi) of section 51, for instance, the Commonwealth is in effect forbidden to acquire property otherwise than on just terms. Under paragraphs (c) and (g) in clause 2 of the draft Bill (‘organized marketing of commodities’ and ‘the production of goods’) the Commonwealth would no doubt be able to effect a compulsory acquisition. Indeed a compulsory acquisition has been a central part of most marketing schemes hitherto. But in our opinion the acquisition must be made on ‘just terms’. To hold otherwise would not make the new powers ‘subject to the Constitution’.

In our opinion the limitations expressed in the ‘railways’ paragraphs of section 51 will likewise affect the scope of the Commonwealth’s referred powers under paragraph (j) of clause 2 in the draft Bill (uniformity of railway gauges). Under section 51(xxxiii) the Commonwealth can make laws for the acquisition of State railways, and under paragraph (xxxiv) it can construct and extend railways in any State–but in each case only with the consent of the State. On the principles already discussed, the Commonwealth could not in the exercise of a general power to make laws with respect to uniformity of railway gauges, do what these two paragraphs forbid–acquire a State railway, or construct or extend railways in a State, without the State’s assent.

An analogous question arises under paragraph (h) in clause 2 in the draft Bill. It is proposed to refer to the Commonwealth ‘the regulation of the raising of money in accordance with such plans as are approved by a majority of members of the Australian Loan Council’.

The phrase ‘the raising of money’ would in ordinary usage include both public and private borrowings. The new power of the Commonwealth under this paragraph must however be read ‘subject to the Constitution’. The relevant provision here is section 105A. This section gives the force of law to the financial agreement of 1927, under which the Australian Loan Council is established and its procedure prescribed. Reading the two provisions together therefore, it is plain that the borrowing transactions of the Commonwealth or the States through the Loan Council will not in any way be affected by this paragraph of the Bill. In this view, clause 2(h) of the Bill will apply only to the raising of money by private persons and companies and semi-governmental bodies.

Sub-section (5) of section 105A makes this matter clear beyond possibility of doubt. By that sub-section, the financial agreement is declared to be ‘binding on the Commonwealth and the States notwithstanding anything contained in this Constitution or the Constitution of the several States or in any law of the Parliament of the Commonwealth or of any State’. Nothing a State can do therefore by way of reference under section 51(xxxvii) can modify the provisions of the financial agreement.

Summing up on the whole question therefore, the powers ‘referred’ under section 51(xxxvii) cannot cut down the scope of the Commonwealth’s other powers, or remove the specific restraints which the Constitution imposes upon the exercise of Commonwealth powers. On the other hand the restrictions or limitations contained elsewhere in the Constitution (not excluding section 51 itself) may limit the scope or application of the matters ‘referred’ under section 51(xxxvii).

2. Could the proposed Commonwealth Powers Act validly be repealed or amended by an ordinary Act, notwithstanding the referendum provisions in clause 3?

In our opinion the answer is No. The authority of the Privy Council in Attorney-General for New South Wales v. Trethowan (47 C.L.R. 97) is decisive on this point. Though it was not necessary for the actual decision, the Judicial Committee did in terms decide that a law purporting to repeal the provisions entrenched by a similar referendum clause would have been void, even if it had received the royal assent. This result depended, in the view of the Privy Council, on section 5 of the Colonial Laws Validity Act 1865.

In Trethowan’s case, there was a double entrenching provision, for it was necessary to protect:

  1. the Legislative Council from abolition by a simple Act;
  2. the entrenching provision itself from repeal by a simple Act.

Here, however, only one provision is necessary. For both the provisions to be entrenched are contained in the Act itself.

3. Can a State in making a reference under section 51(xxxvii) validly fix a time limit for the reference?

In our opinion the answer to this question is Yes. The point is not covered by any authority. It has however arisen once before in Australian constitutional history. That was in 1915, when the States agreed to refer certain matters to the Commonwealth for the duration of the war then being waged and for twelve months thereafter. On that occasion there was some doubt whether a State Parliament could refer a matter for a limited time only and it was agreed that if necessary an Act of the Imperial Parliament should be sought, to validate what had been done (see Knowles, The Australian Constitution page 149, Note B). In the result however the States did not refer any of the matters agreed upon, and the question of time limit appears never to have been settled. In our opinion however the matters to be ‘referred’ can validly be defined by reference to any appropriate limitations including limitations of time as well as of subject.

The answer to this question would seem to be the same, no matter what view is taken as to the revocability of State action under section 51(xxxvii). This question is dealt with below.

4. Can a State validly withdraw from the Commonwealth a matter once ‘referred’ under section 51(xxxvii)?

This question is strictly independent of the question of time limit, already considered. Even in the case of a reference made for a fixed time only, it may well be asked whether a State could validly withdraw the relevant power from the Commonwealth by repealing its Act of reference during the prescribed period. In the case of a matter ‘referred’ without time limit, the question may of course arise at any time.

This question is completely uncovered by authoritative decision, and the language of section 51(xxxvii) itself does not deal with the matter, either expressly or by necessary implication. An argument can be put forward both for an affirmative and for a negative view. In our opinion a State can validly repeal an Act referring matters to the Commonwealth, and the effect of repeal will be to terminate the power of the Commonwealth to make laws with respect to that matter. It must be admitted however that no opinion can at present be much more than provisional.

We should perhaps mention first some considerations that point to the opposite conclusion from that which we have formed. In unresolved questions of public law an analogy from private law may often be helpful. In this particular instance, it has been suggested that the true analogy is to be found in the law relating to powers and their revocation. The suggestion is that a power cannot be revoked unless it is expressly so provided in the instrument creating the power–or at any rate that a power once exercised cannot be revoked without express provision. Another indication that points in the same direction is to be found in section 10 of the Statute of Westminster 1931. That section provides that the operative sections of the Statute shall not apply to certain Dominions unless they are adopted by the Parliament of the Dominion, and that the Parliament of any such Dominion may at any time revoke its adoption of any of the sections concerned. The inclusion of this provision is at any rate consistent with the view that, without it the act of adoption would be irrevocable.

Despite these analogies, we have come to the conclusion that, when the powers in question are those of a representative Parliament, the dominant consideration must be drawn from the ordinary law as to the exercise of legislative power. Nothing in modern public law is more familiar than the proposition that a representative Parliament cannot fetter the power of any future Parliament, except by legislation prescribing the manner and form in which laws are to be passed. The power to pass an unrepealable Act is in fact something of a contradiction in terms. Accordingly, the true principle here ought in our view to be that any Act of a State Parliament is repealable unless there is some provision to the contrary, either express or necessarily implied, in some relevant law. There is nothing of the sort in section 51(xxxvii).

This general approach to the question has we think the clear support of the present Chief Justice of Australia, as indicated in a dictum in the Uniform Taxation Case (South Australia v. Commonwealth, 65 C.L.R. page 416).(2)

The view that a reference under paragraph (xxxvii) of section 51 is revocable derives further support from the concluding clause of the paragraph itself. A law made by the Commonwealth Parliament with respect to a matter ‘referred’ under this paragraph is expressed to:

extend only to States by whose Parliaments the matter is referred, or which afterwards adopt the law.

It would be a bold thing to imply that a Parliament which had merely ‘adopted’ a law made by the Commonwealth was not at liberty thereafter to revoke its adoption. Yet paragraph (xxxvii) appears to contemplate no difference in the position on the one hand of a State to which the Commonwealth law applies because it had ‘referred’ the matter concerned, and the position on the other hand of a State in which the same Commonwealth law applied because it had ‘adopted’ the law itself. If anything, therefore, the language of paragraph (xxxvii) taken as a whole supports rather than weakens the contention that a reference under this paragraph can be revoked by the Parliament concerned. In revoking the reference however the Parliament may of course be obliged to proceed (as for instance under clause 3 of the draft Bill) in a specially prescribed manner and form.

[Vol. 35, p. 3]

(1) See Commonwealth Powers Act 1942 (NSW); Commonwealth Powers Act 1943 (NSW); Commonwealth Powers Act 1943 (Vic); Commonwealth Powers Act 1943 (Qld); Commonwealth Powers Act 1943 (SA); Commonwealth Powers Act 1943 (WA); Commonwealth Powers Act 1945 (WA); Commonwealth Powers Act 1943, Amendment Act 1947 (WA); Commonwealth Powers Act 1945, Amendment Act 1947 (WA); Commonwealth Powers Act 1945, Amendment Act (No. 2), 1947 (WA); Commonwealth Powers Act 1945–1947, Amendment (Continuance) Act 1947 (WA). For a contemporary account of the public controversy over the draft Commonwealth Powers Bill, see ‘Senex’, ‘Commonwealth Powers Bill. A Repletion of Opinions’ (1943) 16, Australian Law Journal 323–327. See also Goldsworthy, David, ‘Playford, the LCL and the “Powers” Referendum Issue, 1942–4’ (1966) 12, The Australian Journal of Politics and History 400–416.

(2) (1942) 65 CLR 373.