1. The Attorney-General presents his duty, and has the honour to submit the following observations upon the matters to which His Excellency directs the Attorney-General's attention, by memorandum of 10 December in relation to the Conciliation and Arbitration Bill.⁽¹⁾
2. The proposed law is one for conciliation and arbitration in relation to industrial disputes extending beyond the limits of any one State. It contains one provision to which His Excellency specifically calls the Attorney-General's attention, namely, the words inserted in the definition of 'Industrial dispute' in clause 4⁽²⁾, which bring or profess to bring 'disputes'-that is, disputes 'extending beyond the limits of any one State'-'in relation to employment upon State railways, or to employment in industries carried on by a State' under the operation of the Act and therefore within the jurisdiction of the Federal Arbitration Court.

   His Excellency further directs attention to the opinion expressed by the Attorney-General in debate⁽³⁾-a view he still entertains-that the provision referred to will be held to be ineffective as an attempted interference beyond the scope of the legislative power conferred upon the Commonwealth with the self-governing powers of the constituent States. Notwithstanding the presence of that provision and the view which he holds respecting it, the Attorney-General is clearly of opinion the Bill should be assented to.

3. It seems obvious that no question such as this could arise with respect to any enactment by the legislature of a unitary state under the British system. The Parliament of such a state is supreme, and the measure of its constitutional power is, speaking generally, what it chooses to enact.
4. It is otherwise with a true federal system such as that of the Commonwealth. Its basis is that certain powers are surrendered by the States to the central Federal Government, and that everything not so surrendered is retained by the States. Encroachments or attempted encroachments are not only possible but contemplated as likely, by the States upon the Federal domain, and similarly by the Commonwealth upon the domain of the States. It is therefore an essential feature of such a Federal system that there should be another power, co-ordinate with Parliament, to determine upon any conflict between Commonwealth and State, and to preserve the sphere of each from encroachment by the other; to guard the rights of the States on the one hand, whilst maintaining the powers of the Commonwealth on the other. This arbitral power is the High Court.
5. The Attorney-General regards it as perfectly legitimate for the Federal Parliament to enact that the servants of the State engaged upon the State railways or in industrial enterprises undertaken by the State shall come under the operation of the proposed law; and if that provision is not declared by the constitutional tribunal ultra vires of the powers of the Commonwealth the enactment will be effective, but if otherwise it will be ineffective. Those who oppose the particular provision during its passage through Parliament-it may be the Government of the day-may do so on the ground that it is, and will be declared, an encroachment upon the self-governing rights of the States, and in that sense unconstitutional. But if that opposition is unsuccessful, and Parliament insists that the particular provision is within its power and enacts the proposed law, it is for the High Court and the High Court alone to determine the issue. For the Attorney-General or the Ministry to seek to give effect to their view in opposition to that of Parliament as expressed in the enactment, by tendering advice to His Excellency to withhold assent or to suggest the excision of the provision by amendment, would be to usurp the functions of the High Court. Every Bill has to be read as though it contained the words 'subject to the Constitution', and the duty of saying whether it conforms thereto or not rests with the High Court.
6. The use of the expression 'unconstitutional', as applied to a proposed law or one of many provisions in it is, perhaps, scarcely scientific and simply signifies the opinion that it encroaches upon the sphere of the States. Very different considerations might be brought into play if the suggested interference were with Imperial interests.
7. In further elucidation the Attorney-General desires to point out that the same question would arise whether the words or provision referred to were in or out. If State servants within the category referred to are to come under the operation of the Act they will do so without the express words, whose presence or absence, in the opinion of the Attorney-General, gives no greater or less force to the contention. It is not unconstitutional to put the words in the proposed law; that merely signifies the desire or intention of Parliament; what is, or may be, beyond the power of the Commonwealth is the bringing of State employees within that particular law, whether with or without the words, and to accomplish that-it may not inaptly be put-the concurrence of the High Court as well as of Parliament is necessary.
8. The attempt to impose State income tax on Commonwealth servants, or stamp duties oh their receipts, affords an illustration and analogy. That, it has been declared by the High Court⁽⁴⁾, cannot be done-in point of fact it is unconstitutional in the sense in which the expression has been used in the debates on the proposed law. It would have been neither less nor more so if the State laws imposing income tax and stamp duties had contained words purporting expressly to include Commonwealth servants or Commonwealth receipts. If these State laws-passed before the recent High Court decisions-had contained those words no State Governor would have been warranted in withholding assent on the advice of his Ministers, anticipating-even rightly-the determination of the High Court.
9. The Federal constitutional compact between the Commonwealth and the component States provides the method by which the powers of each are to be kept within their respective constitutional limits; and His Excellency the Governor-General would not be justified in withholding his assent from a proposed law because some part of it, or indeed the whole of it, might appear to him to exceed, or be likely to be held by the High Court to exceed, the powers of the Commonwealth Parliament in relation to matters between the Commonwealth and the States, nor would the Attorney-General be justified-however strong an opinion he might entertain-in advising His Excellency to withhold assent.
10. Under the Canadian Constitution, which is less of a true federation than that of the Australian Commonwealth, the right of disallowance of Provincial Bills is confided in the Federal Government; but the principle there acted upon is thus stated by Ramsay J. in Dobie v. The Temporalities Board [3 L.N. 244 at 251], cited in Lefroy's Legislative Power in Canada, p. 206:'. . . where there is room for doubt as to the limits of the powers exercised, and where great public interests are involved, they readily leave the question to the decision of the Courts'. If such a principle is applied as between the Dominion Government and the Provincial or local Legislatures of Canada under their quasi-federal system, it applies, in the Attorney-General's opinion, a fortiori and without qualification as to 'room for doubt' or 'great public interests', to Commonwealth legislation confined in its operation to internal matters between the Commonwealth and the States.⁽⁵⁾

(1) Enacted as the Commonwealth Conciliation and Arbitration Act 1904.

(2) Enacted as section 4 of the Commonwealth Conciliation and Arbitration Act 1904.

(3) See Commonwealth of Australia, Parl. Debates 1904, Vol. XXII, p. $724.

(4) D'Emden v. Pedder 1 C.L.R. 91.

(5) This opinion is not in the Opinion Books but is filed with Governor-General’s papers (Australian Archives, CP78/1, item 828).