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Attorney-General (Vict) v The Commonwealth

Attorney-General (Vict) v The Commonwealth

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Case Copied 19 November 1945 88 min read

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71 CLR 237

ATTORNEY-GENERAL FOR VICTORIA (AT

THE RELATION OF DALE AND OTHERS)

THE COMMONWEALTH AND OTHERS

DEFENDANTS. Constitutional Law (Cth.)-Approxiations of money-Scope of power-Whether

limited or unlimited as to purpose-" Purposes of the Commonwealth -Power of incidental legislation-If power of appropriation unlimited, extent of power to control manner and method of expenditure-Provision for free medicine- Appropriation of moneys to pay chemists-Validity-The Constitution (63 &64 Oct. 5, 8-10; Vict. C. 12), SS. 51 (xxxix.), 75, 81, 3-Pharmaceutical Benefits Act 1944 (No. 11 of 1944). High Court-Action for declaration of invalidity of Commonwealth statute-Power

of Attorney-General for a State to sue.

The Pharmaceuticul Benefits Act 1944 provides for the supply by chemists without charge to the public of certain medicines prescribed by medical practitioners, appropriates money to pay the chemists for the medicines supplied, and imposes duties on medical practitioners and chemists in relation to the prescription and supply of the medicines.

Held, by Latham C.J., Rich, Starke, Dixon and Williams JJ. (McTiernan J. dissenting), that the Act is not authorized under the power of appropriation in S. 81 of the Constitution and the power of incidental legislation in S. 51 (xxxix.), and is invalid.

Held, also, by Latham C.J., Rich, Starke, Dixon and Williams JJ., the Attorney-General of a State has a sufficient title to invoke the provisions of the Constitution for the purpose of challenging the validity of Commonwealth legislation which extends to, and operates within, the State whose interests he represents. DEMURRER.

Ian Macfarlan, Attorney-General for Victoria, at the relation of John Dale, Peter McCallum and Roy Fallowes Watson, brought an action in the High Court against the Commonwealth, Frank

71 CLR 238

McCallum and James Mackintosh Fraser. The statement of claim alleged that the relators were respectively the president, vice- president and honorary secretary of the Medical Society of Victoria that Society was a voluntary and unincorporated association of (VICT.)

legally qualified medical practitioners respectively carrying on their practice of the medical profession in Victoria and associated together for the maintenance of the welfare and status of the profession, and the promotion of all activities and practices calculated to maintain and improve the health of the community and the advance of medical science and practice and its application to the health of the community on 5th April 1944 the Royal assent was signified to an Act of the Parliament of the Commonwealth entitled the Pharma- ceutical Benefits Act 1944; the defendant McCallum was Director- General of Health of the Commonwealth and subject to the direction of the defendant Fraser had the general administration of the Act the defendant Fraser was the Minister of State for Health of the Commonwealth and had the overriding direction of the Director- General of Health in relation to the Act the Act provided, inter alia, for the granting of pharmaceutical benefits to all persons ordinarily resident in the Commonwealth without payment by such persons for such benefits and for the payment to approved pharma- ceutical chemists at rates to be prescribed…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [1945] HCA 30
Decision Date: 19 November 1945

CaseChat Overview and Summary

The Attorney-General for Victoria, acting on the relation of members of the Medical Society of Victoria, brought an action in the High Court against the Commonwealth and its Minister and Director-General of Health. The dispute concerned the validity of the Pharmaceutical Benefits Act 1944, which provided for the free supply of medicines to the public, appropriated moneys to pay chemists, and imposed duties on medical practitioners and chemists. The plaintiff sought a declaration that the Act was invalid and an injunction to restrain its execution. The defendants demurred to the statement of claim, arguing the Act was a valid exercise of Commonwealth legislative power.

The High Court was required to determine two primary legal issues. Firstly, whether the Attorney-General of a State possessed sufficient legal standing (locus standi) to challenge the validity of Commonwealth legislation that allegedly encroached upon State legislative powers. Secondly, the Court had to decide whether the Pharmaceutical Benefits Act 1944 was a valid law of the Commonwealth, specifically whether it was authorised by Section 81 of the Constitution, which deals with the appropriation of revenue, and Section 51(xxxix), which concerns incidental powers.

A majority of the High Court, comprising Latham C.J., Rich, Starke, Dixon, and Williams JJ., held that the Pharmaceutical Benefits Act 1944 was invalid. The Court reasoned that Section 81 of the Constitution, which permits appropriation for "the purposes of the Commonwealth," should not be interpreted as granting an unlimited power to spend money on any purpose. Instead, it was held that the appropriation power is generally linked to the legislative powers conferred upon the Commonwealth Parliament by other sections of the Constitution. The Court found that the Pharmaceutical Benefits Act went beyond a mere appropriation of funds and sought to regulate matters that fell outside the enumerated legislative powers of the Commonwealth, thus trespassing on the domain of State legislative power. The majority also affirmed that the Attorney-General of a State has standing to challenge Commonwealth legislation that invades the legislative sphere of the States, as this affects the public rights of the State's citizens. McTiernan J. dissented.

The Court's final orders were that the demurrer to the statement of claim be overruled, meaning the action could proceed. The Pharmaceutical Benefits Act 1944 was declared invalid.

Orders