Opinion Number. 1806



Key Legislation

CONSTITUTION covering cl 5, s 51(xxxv): COAL INDUSTRY ACT 1946 s 12: COAL INDUSTRY ACT 1946 (NSW) ss 11, 25


The question has been raised whether the powers of the Joint Coal Board established under the Coal Industry Act 1946 (Commonwealth) and the Coal Industry Act 1946 (N.S.W.) can be exercised in respect of State owned mines in the State of New South Wales.

The Joint Coal Board derives it powers in part from the Commonwealth Act and in part from the State Act.

The powers of the Board stated generally include the taking of such action as, in its opinion, is necessary or desirable—

(a)  to ensure that coal is produced in the State in such quantities and with such regularity as will meet requirements throughout Australia and in trade with other countries;

(b)  to ensure that the coal resources of the State are conserved, developed, worked and used to the best advantage in the public interest;

(c)  to ensure that coal produced in the State is distributed and used in such manner, quantities, classes and grades and at such prices as are calculated best to serve the public interest and secure the economical use of coal and the maintenance of essential services and industrial activities; and

(d)  to promote the welfare of workers engaged in the coal industry in the State.

This statement of powers and functions appears in both Acts (Commonwealth Act, section 12, State Act, section 11) but it is thought that in the exercise of these powers and functions the Board must rely almost wholly on the authority conferred by the State Act.

It appears that any contention that the powers of the Joint Coal Board cannot be exercised in respect of State owned mines must rest on the principle that the Crown is not bound by statute except by express words or by necessary implication.

The question arises in respect of both Commonwealth and State Acts. For practical purposes however the main question is whether the Crown in right of the State of New South Wales is bound by the State Act.

In Australian courts there was for some time a tendency to narrow down the scope of the rule of construction that the Crown is not bound by a statute except by express mention or necessary implication. Thus the Supreme Court of Victoria held that the Crown in Victoria was bound by the Statute of Frauds: R. v. Hay, (1924) V.L.R 97. The High Court of Australia held that the Crown in New South Wales was bound by the Employers’ Liability Act: Sydney Harbour Trust v. Ryan (1911) 13 C.L.R. 358. Decisions such as these suggested that the rule of construction applied only to statutes which if they did bind the Crown would have the effect of depriving it of some prerogative or other special right. In Minister for Works (W.A.) v. Gulson (1944) 69 C.L.L. 338, however, the High Court rejected this view and applied the rule in general terms so as to exclude a State housing authority from the operation of the National Security (Landlord and Tenant) Regulations. A series of recent English decisions has followed the same broad line. The most recent, which has the authority of the Privy Council, is Province of Bombay v. Municipal Corporation of City of Bombay (1947) A.C. 58. In the present state of the authorities therefore the rule of construction must be given full operation. In particular, Statutes ‘for the public good’ are not per se to be treated as an exception to the rule.

Even applying the rule in the broad sense, however, I am of opinion that the Coal Industry Act 1946 (N.S.W.) does bind the Crown in right of the State: not expressly indeed, but by necessary implication. This implication is, I think, to be drawn from three different sets of considerations, all pointing in the same direction and in their cumulative effect conclusive.

(i)  The first consideration is the general scheme and object of both Acts, as expounded in their terms, including the recitals in the preambles.

In the preamble to each Act it is recited that the Governments of the Commonwealth of Australia and of the State of New South Wales had agreed to take measures for securing and maintaining adequate supplies of coal to meet the need for that commodity throughout Australia and in trade with other countries, and for providing for the regulation and improvement of the coal industry in the State of New South Wales and for other matters relating to the production, supply and distribution of coal. It was also agreed that the two Governments should jointly establish authorities vested with power to take action designed to obtain these objectives.

These Acts, on their face, express an intention to bind the Crown in so far at any rate as concerns the establishment of the joint authorities contemplated in the agreement; in particular, the Joint Coal Board and the Coal Industry Tribunal. Once it is conceded that these fundamental provisions were intended to bind the Crown, there seems to be no room for the contention that express words would be required to bring the Crown within the scope of the powers and functions assigned to the authorities mentioned.

In this regard the situation is closely analogous to that dealt with in the Engineers’ case1—the Coal Industry Acts corresponding to the Constitution, the Joint Coal Board corresponding to the Parliament and exercising powers under the Acts. Holding that, having regard to its history and general objects, the Constitution was plainly intended to bind the Crown, the majority of the High Court further held that no express words were necessary in section 51(xxxv) to enable the Parliament, if it thought fit, to make laws which would operate in respect of the Crown in right of a State; 28 C.L.R., pp. 152–3. (The conclusion in this case was assisted by the presence in the Constitution of covering clause V; but the Court would apparently have reached the same conclusion on the basis of section 51 alone.)

(ii)  The second consideration is that in some cases an express provision has been inserted excluding certain State property from the ambit of certain powers of the Joint Coal Board. See section 11(3)(h), which excludes, from the Board’s acquisition powers, railways, rolling stock, and sidings being the property of the State or the Commissioner for Railways. Unless the powers of the Board normally extend to State property or instrumentalities this provision must be treated as mere surplusage, as a formula inserted merely ex abundanti cautela. The context makes such an explanation impossible. Section 11(3)(h) is only one of a series of paragraphs—(e), (g) and (h)—expressly declaring that the Board is to have power to acquire property of various kinds—e.g. coal, coal mines, plant machinery and equipment. An express exception is inserted, but in paragraph (h) alone, to prohibit the Board from acquiring railways, rolling stock and sidings which are the property of the State or the Commissioner of Railways. The other powers to acquire are, in terms, unqualified ‘any coal’, ‘any coal mine’, and so forth. It would in my opinion be absurd, as a matter of construction, to read those provisions in which there is no express exception as being nevertheless subject to an implied exception in favour of the property of the Crown. It is, in my opinion, a plain case of necessary implication from the express exception (which in any case covers only part of the ground of paragraph (h)), that in the other cases the Board’s powers would extend to the property of the Crown.

The State Act contains one provision which at first sight seems to point in the opposite direction. This is section 25(1)(a), which empowers the Board to acquire land ‘by agreement or arrangement with any person (including the Crown)’. In the view I take of the Act generally, the express reference to the Crown was unnecessary. But in any event it imposes no duty, or even liability, upon the Crown, and therefore cannot be regarded as affecting in any significant way the answer to the question whether the Act binds the Crown.

(iii)  The third consideration is that the effect of excluding the Crown from the functions of the Joint Coal Board and the Coal Industry Tribunal would be so potentially destructive of the efficacy of the machinery established by the Acts for controlling the production and distribution of coal and for regulating industrial relations in the coal mining industry as to make it necessary to imply an intention to bind the Crown in respect of any activities that fall within the scope of the powers and functions of those joint authorities.

In Province of Bombay v.  Municipal Corporation of the City of Bombay and another (1947 A.C. 58) the Privy Council rejected the submission that ‘if it could be shown that legislation cannot operate with reasonable efficiency unless the Crown is bound, that would be a sufficient reason for saying that the Crown is bound by necessary implication’.

In considering in what cases the Crown could be bound by necessary implication their Lordships said ‘that if it could be affirmed that, at the time the Statute was passed and received the Royal sanction, it was apparent from its terms that its beneficent purpose must be wholly frustrated unless the Crown were bound, then it may be inferred that the Crown has agreed to be bound’.

In my opinion the effect of excluding the Crown from the operation of the Board’s powers would be sufficiently far-reaching to satisfy the stringent test thus laid down by the Privy Council.

If the suggestion that State-owned mines are not subject to the jurisdiction of the Board is correct, there may well be such an exclusion from the power of the Board in respect to coal production in the State as would wholly defeat the objects of the Act. The conservation of the coal resources of the State, which is a matter within the Board’s jurisdiction, would also be impaired if it is prevented from taking steps to deal with all the coal resources of the State. Further there can be no adequate regulation of prices if the price of coal won at State mines is to be excluded.

It is pointed out that if State coal mines are not within the jurisdiction of the Board the State could, by acquisition of mines, reduce the scope of the Board’s activities to a negligible quantity, with the result that it would not have, in effect, the powers conferred upon it by the Act—

(a)  to ensure the production of coal in sufficient quantities;

(b)  to ensure the conservation, development, etc. of the coal resources of the States; and

(c)  to control and regulate prices, distribution and the economical use of coal.

Having regard to the three considerations stated above, I am therefore of opinion that—both in principle and upon authority—this legislation must be construed in accordance with its terms, and not in a manner which would enable either Government to exclude Government-owned property from the operation of the Board’s powers. It can be stated with complete confidence that throughout the discussions between the officers of the Commonwealth and the State who were concerned in the drafting of the joint legislation it was clearly understood that the Acts would apply to all coal mines in New South Wales. So far as I am aware, no view to the contrary was stated during the passage of the legislation in either Parliament. The Acts may thus be regarded as sufficiently giving effect to the known intention of their authors.

[Vol. 37, p. 465]

1Amalgamated Society of Engineers v Adelaide Steamship Co Ltd [1920] HCA 54; (1920) 28 CLR 129.