Baxter v Commissioners of Taxation (NSW)

[1907] HCA 76

4 CLR 1087

THE COMMISSIONERS OF TAXATION,

NEW SOUTH WALES

RESPONDENTS. PLAINTIFFS,

THE COMMONWEALTH OF AUSTRALIA INTERVENING.

ON APPEAL FROM A DISTRICT COURT OF

NEW SOUTH WALES. Legislative powers of States-Tazation of income of Commonwealth officer-Inter-

ference with free exercise of Commonwealth power-Implied prohibition in Constitution-Weight to be attached to American decisions-Question as to limits inter 8€ of constitutional powers of Commonwealth and State-Conflicting decisions of Privy Council and High Court-Duty of High Court-Appeal from State Court exercising federal jurisdiction to High Court-Powers of Commonwealth Parliament-Juliciary Act 1903 (No. 6 of 1903), sec. 39-

4 CLR 1088

Ultra vires-Appeal to Privy Council - Application for certificate - The Constitution (63 &64 Vict. c. 12), sec. 51, sub-sec. (xxxix.), secs. 73-77.

In an action in a New South Wales District Court to recover income tax under the Land and Income Tax Act of that State from a federal officer in respect of his salary as such officer, the defendant claimed to be exempt from (N.S.W.)

liability on the ground that the taxation of his income was an interference with the free exercise of the powers of the Commonwealth within the meaning of the rule laid down in D'Emden v. Pedder, 1 C.L.R., 91, and therefore impliedly prohibited by the Constitution. The Judge, following the decision of the Privy Council in Webb v. Outtrim, (1907) A.C., 81, gave judgment for the plaintiffs. The defendant appealed direct to the High Court, adopting the procedure prescribed by the State law for appeals to the Supreme Court.

Held, that the question raised by the defence was a question as to the limits inter se of the constitutional powers of the Commonwealth and a State within the meaning of sec. 74 of the Constitution, that the District Court was therefore exercising federal jurisdiction under sec. 39 of the Judiciary Act 1903, and the appeal was competent by virtue of sub-sec. (2) (a) of that section, as well as by sec. 73 of the Constitution.

Held, further (per Griffith C.J., Barton and O'Connor JJ.), that the High Court was, by the Constitution, the ultimate arbiter upon all such questions, unless it was of opinion that the question at issue in any particular case was one upon which it should submit itself to the guidance of the Privy Council, and was therefore not bound to follow the decision in Webb v. Outtrim, (1907) A.C., 81, but should follow its own considered decision in Deakin v. Webb, C.L.R., 585, in which it had refused to grant a certificate under sec. 74, unless upon a reconsideration of the question for whatever reason it should come to a different conclusion and that, assuming the fact that the Privy Council had given a decision in direct conflict with the High Court on the same point to be a sufficient reason for a reconsideration of the whole matter by the High Court, there was nothing in the reasons of the Judicial Committee to throw any new light on the question involved, either with regard to the necessity for the implication of the rule of implied prohibition laid down in M'Culloch v. Maryland, 4 Wheat., 316, and adopted in D'Emden v. Pedder, 1 C.L.R., 91, or as to the applicability of the rule to the particular question.

The rule in D'Emden v. Pedder, 1 C.L.R., 91, reaffirmed. In construing the Constitution regard must be had to the fact that it is an instrument of government calling into existence a new State with sovereign powers, subject only to the British Crown.

The duty of the High Court in regard to questions under sec. 74 is to be determined upon consideration of the whole purview and history of the Con.

Per Isaacs J. Apart from any consideration of its history, the words of sec. 74 are clear and strong enough to lead to the conclusion that on questions coming within the section the decision of the High Court was final, and, therefore, the Court had a right to decline to follow the decision of the Privy

4 CLR 1089

Council upon any such question, but the respect and weight due to the judg- H. ment of the Privy Council made it the duty of the High Court under the circumstances to reconsider the question decided in Deakin Webb, 1 C.L.R., 585. Further consideration, in the light of the decision in Webb V. Outtrim, (1907) A.C., 81, leaves the authority of D'Emden v. Pedder, 1 C.L.R., 585, unimpaired, but the Land and Income Tax Act of New South Wales, considered apart from authority, cannot be regarded as an infringe- ment of the rule of non-interference laid down in the latter case.

Per Higgins J. The only diminution of the prerogative right of the King in Council to entertain appeals from all Courts in the colonies and dependen- cies is that in cases involving such questions as are referred to in sec. 74, when the High Court has given a decision, there is to be no appeal from the High Court except by leave of the High Court; and there is nothing in the Constitution to make the High Court the final authority on any kind of law. The Act should not be extended by implication in the direction of infringing the prerogative rights of the Crown. The King in Council being therefore still the appellate Court from the High Court, and the High Court a Court from which appeal can be brought to the King in Council, it is the duty of the High Court to accept the decision of the King in Council as the final statement of the law. The Land and Income Tax Act of New South Wales is not an interference with federal instrumentalities.

Per totam curiam.-Even if sec. 39, sub-sec. (2) (a) of the Judiciary Act 1903 purports to take away the prerogative right of appeal to the Privy Coun- cil, and the section is to that extent ultra vires and inoperative, its failure in that respect does not affect the validity of the grant of federal jurisdiction to State Courts contained in the rest of the section and the consequent right of appeal to the High Court.

Sed Quare, whether sub-sec. (2) (a) should be construed as affecting the prerogative.

Decision of Murray D.C.J. reversed by a majority, (Isaacs J. and Higgins J. dissenting).

Webb v. Outtrim, (1907) A.C., 81, not followed. Certificate for leave to appeal to the Privy Council refused. The fact that there are conflicting judgments of the High Court and the Privy Council on the same question is not a sufficient reason for granting a

APPEAL from a decision of a Judge of a District Court of New South Wales.

The appellant was an officer in the service of the Common- wealth, residing in New South Wales. He was assessed for purposes of the Land and Income Tax Act 1895 by the Commis- sioners of Taxation of that State, and, having refused to pay, was

4 CLR 1090

sued in the District Court for the amount of the tax as assessed.

At the hearing before Murray D.C.J., the appellant contended that, on the authority of the High Court's decision in Deakin V. Webb 1, he was not liable. The learned Judge, however, follow- (N.S.W.)

ing the decision of the Privy Council in Webb v. Outtrim 2, decided against the appellant's contention, and found a verdict for the Commissioners for the amount claimed.

From that decision the appellant now appealed to the High Court, adopting the procedure prescribed in the District Court Amendment Act 1905 for appeals to the Supreme Court.

The Attorney-General for the Commonwealth was allowed to intervene.

Sir Julian Salomons K.C. (C. B. Stephen K.C., and J. L. Campbell with him), for the respondents on a preliminary objec- tion to the hearing of the appeal by the Court as constituted. Three of the Justices now sitting are pecuniarily interested in the question in dispute, inasmuch as they are residents of New South Wales, and are therefore liable to pay the tax if the appellant is liable. In the absence of express provision, as in the Land and Income Tax Act 1895 with regard to the State Judges, a Court

SO constituted should not sit on the appeal.

[GRIFFITH C.J.-Except where it is a case of necessity.] There is no necessity here, because by the Judiciary Act 1903, sec. 14, the Full Court may consist of two Justices only, and there are two available now who are not pecuniarily interested.

[GRIFFITH .-The question involved is as to the respective powers of the Commonwealth and State Parliaments. No question of that kind can arise in which the Justices are not interested.]

The appellant need not have come here, he might have gone to the Supreme Court.

[GRIFFITH C.J.-By sec. 73 of the Constitution, which is the Statute law of the Empire, the High Court has jurisdiction to entertain appeals from all judgments of Courts exercising federal jurisdiction. We overrule the objection.]

Flannery (J. A. Ferguson with him), for the appellant. This

1I C.L.R., 585. 2(1907) A.C., 81 ; 4 C.L.R., 356. 4 CLR 1091

is an appeal under sec. 39, sub-sec. 2 (b) of the Judiciary Act 1903, instituted by notice of motion under sec. 57 of the District Court Amendment Act 1905 High Court Procedure Act 1903, sec. 37; Appeal Rules, sec. IV., r. 1, as amended August 22nd 1904. The tax is imposed by sec. 15 of the Land and Income Tax Act (59 Vict. No. 15), on income derived from a vocation carried on in New South Wales. The appellant as a federal officer is exempt: Deakin v. Webb 1. Webb v. Outtrim (2), a decision of the Privy Council to the contrary, on appeal from the Supreme Court of Victoria, was wrongly decided. The Judicial Committee should not have entertained the appeal as of right: Judiciary Act 1903, sec. 39 (2) (a); the Constitution, sec. 74.

[GRIFFITH C.J.-Suppose they were technically wrong in doing so, can we interfere with their management of their own business?

I do not think we should be asked to review the propriety of the act of the Privy Council any more than they should be asked to review the propriety of an act of this Court in a matter of procedure.]

Even if the Privy Council rightly entertained the appeal, their decision is not binding on this Court, and should not, under the circumstances, be followed. The decision of this Court in Deakin V. Webb (1) is binding on this Court, and should be followed unless it appears that the Court was misled. That is the practice of the House of Lords in such cases. Sec. 74 of the Constitution makes this Court's decision final on all questions as to the limits inter se of the constitutional powers of the Commonwealth and a State, unless the Court certifies that the question is one which should go to the Privy Council. The question in this case comes within the section, and upon it this Court has given a decision and refused a certificate. That decision stands as the law until altered by a competent authority, and cannot be reversed or over- ruled by the Privy Council either on an appeal under State laws or by an exercise of the prerogative. Assuming that there is still an appeal to the Privy Council on such matters by virtue of the prerogative, a decision of the Privy Council on such a ques- tion is not that of a superior Court, but of a Court of co-ordinate jurisdiction, and should not be accorded any more weight than it

2(1907) A.C., 81 : 4 C.L.R., 356. 11 C.L.R., 585. 4 CLR 1092

would receive from the House of Lords or even the Privy Council

itself. The House of Lords does not hesitate to differ from the Privy Council, and the Privy Council itself does not feel itself bound by previous decisions of its own body Ridsdale V. (N.S.W.)

Clifton 1. If the reasons of the Privy Council in Webb V. Outtrim 2 do not commend themselves to this Court the decision should not be followed: Tooth v. Power 3; Read v. Bishop of Lincoln 4; The City of Chester" 5 Mackonochie v. Lord Penzance 6; Wilkinson v. Downton 7; Dulieu v. White &Sons 8. On questions coming within sec. 74 the Privy Council has no voice unless it is invoked by the High Court itself. The inference is irresistible that on such questions the High Court is to be the ultimate Court of appeal, and its decision the only binding precedent, except in cases where a certificate is granted. The only alternative is to suppose that the restriction on appeals in sec. 74 was intended to prevent trivial matters from being thrust upon the Privy Council. But the nature of the questions involved renders that an impossible inference. The purpose was rather to give the final voice on those highly important questions to the Court most fitted to deal with them. The High Court is entrusted with the duty of maintaining the balance between the powers of the States and the Commonwealth, in the same way as the Supreme Court of the United States of America, whose Con- stitution formed the model for that of the Commonwealth. This inference is strengthened by consideration of sec. 76, which gives Parliament power to confer original jurisdiction on the High Court in such matters, and sec. 77, sub-sec. (II.), which enables Parliament to make that jurisdiction exclusive. The Privy Council, if that were done, could never have cognizance of such questions except by permission of the High Court.

Groom (A-G. for the Commonwealth), and Cullen K.C. (Bavin with them), for the Commonwealth, intervening. Even if the words of sec. 74 do not expressly make the High Court's decision binding on all Courts, they do SO by implication, when the general

12 P.D., 276, at p. 306. 2(1907) A.C., 81 ; 4 C.L.R., 356. 3(1891) A.C., 284. 4(1892) A.C., 644. 59 P.D., 182, at p. 207. 66 App. Cas., 424, at p. 447. 7(1897) 2 Q.B., 57, at p. 60. 8(1901) 2 K.B., 669. 4 CLR 1093

scheme and history of the Constitution are considered. Constitution should not be construed as a mere Act of Parliament, but as an instrument of government drawn up by the States to form the basis of a permanent union between themselves. The Court should consider what were the evils to be remedied, and the method adopted to remedy them. As in the United States of America, the scheme of government necessitated making the High Court the interpreter and protector of the Constitution: Dicey Law of the Constitution, 6th ed., Append., p. 479. Such an arbiter is necessary where the powers of all are distributed between two quasi-sovereign bodies, State and Commonwealth. The experience of Canada suggested the advisability of having questions as to the limits of the respective powers of the two bodies decided finally in a Court familiar with Australian conditions and aspirations. The provision for appeal to the Privy Council by certificate was intended for questions affecting Imperial interests. The section is not a mere prohibition of appeal in the particular case, it was intended to prevent a question, once decided by the High Court, from being re-opened by the Privy Council. The whole purpose of the section is frustrated if that body may entertain an appeal on the same question coming to them through another channel, and decide it regardless of the High Court's previous decision. The respect due to a decision of the Privy Council does not require this Court to give up its opinion on matters as to which its decision is made final by the Constitution. The Privy Council should follow the High Court. [They referred to Quick and Groom, Powers of the Commonwealth, p. 51, and secs. 71-77 of the Constitution.] The question is one arising under the Con- stitution. It could not be decided without interpreting the Constitution. The question whether a power is implied is really one of construction. [They referred to Cohens v. Virginia 1; Starin v. New York 2 Tennessee v. Davis 3; Patton v. Brady 4; Osborn v. United States Bank 5; sec. 76, sub-sec. (1.), and sec. 51, sub-sec. (xxxix.), of the Constitution.] The argument that to refuse to follow the Privy Council would be equivalent to

16 Wheat., 264, at p. 379. 2115 U.S., 248, at p. 257. 3100 U.S., 257, at p. 264. 4184 U.S., 608. 59 Wheat., 738, at p. 823. 4 CLR 1094

holding that there are in existence two Courts of co-ordinate

jurisdiction on these matters giving conflicting decisions, is an argument in favour of legislation, but should not lead this Court to reverse its own decision. The reasoning of the Judicial Committee (N.S.W.)

in Webb v. Outtrim 1 does not throw any new light on the question, or disclose any valid objection to the application of the principle laid down in M'Culloch v. Maryland 2 and adopted by this Court in D'Emden v. Pedder 3, affirmed in Deakin v. Webb (4); Municipal Council of Sydney v. The Commonwealth 5; The Commonwealth v. State of New South Wales 6. It is as neces- sary to the States as to the Commonwealth, and is an illustration of the maxim quando lex aliquid alicui concedit, conceditur et id sine quo res ipsa esse non potest. [They referred to Federated Amalgamated Government Railway and Tramway Service Association v. New South Wales Railway Traffic Employes Association 7.] A similar implication of ancillary powers was made by the Privy Council in construing the Canadian Constitu- tion: Grand Trunk Railway Co. of Canada v. Attorney-General of Canada 8; Citizens Insurance Co. of Canada v. Parsons 9; though they rejected the principle in Bank of Toronto v. Lambe 10.

[BARTON J. referred to Attorney-General for Canada v. Cain &Gilhula 11; Robtelmes v. Brenan 12.]

The principle has been uniformly followed by the Supreme Courts of Canada and the United States with beneficial results. [They referred to Claflin v. Houseman 13; Martin v. Hunter's Lessee 14; The Moses Taylor 15; Railway Co. v. Whitton 16.] The framers of the Constitution, having adopted the same or similar language to that of the United States Constitution, must be taken to have adopted it in the sense in which it had been construed by the American Courts.

[ISAACS J. referred to Trimble v. Hill 17.]

1(1907) A.C., 81 4 C.L.R., 356. 24 Wheat., 316. 31 C.L.R., 91. 5I C.L.R., 208. 63 C.L.R., 807. 74 C.L R., 488. 8(1907) A.C., 65. 97 App. Cas., 96, at p. 108. 1012 App. Cas., 575, at p. 586. 11(1906) A.C., 542. 124 C.L.R., 395. 1393 U.S., 130. 141 Wheat., 304. 154 Wall., 411, at p. 429. 1613 Wall., 270, at p. 288. 175 App. Cas., 342, at p. 345. 4 CLR 1095

There is no express provision in the Commonwealth Constitu- tion SO different from anything in the American Constitution as to exclude the implication. The maxim expressio unius est exclusio ulterius should be applied with great caution: State of Tasmania v. Commonwealth and State of Victoria 1; Broome, Legal Maxims, 7th ed., p. 493.

Sir Julian Salomons K.C. (C. B. Stephen K.C. and J. L. Camp- bell with him), for the respondents. This Court, even if it is a Court of co-ordinate jurisdiction with the Privy Council, should not interfere with a decision of a Judge of the State who has followed the decision of the Privy Council. [He referred to Lavy v. Lon- don County Council 2; Pledge v. Carr 3. Even if the Court is not satisfied by the reasoning of the Privy Council in Webb V. Outtrim 4, that the decision in Deakin v. Webb 5 is wrong, it should reconsider that decision. But this Court is not a Court of co-ordinate jurisdiction. It is an inferior Court and is bound by the decision of the Privy Council. That Court is in all other matters a Court of Appeal from this Court, and matters within sec. 74 may come before it on appeal from the Supreme Courts, or on appeal from this Court by certificate of this Court. While it is thus potentially an appellate Court on all matters that can come before the High Court, in no case does an appeal lie from it to the High Court. Apart from sec. 74, there is nothing in the Constitu- tion to affect the position of the Privy Council as a Court of Appeal from the High Court. Sec. 74, though it makes the decision of the High Court final in the case before it unless a certificate is given, does not make that decision binding on all Courts as a precedent. In many Statutes the decisions of an ad- mittedly inferior Court are made final and an appeal is prohibited except by leave of that Court, but the inferior Court is bound to follow a decision of the superior Court on the same point. That being the relation which the High Court bears to the Privy Coun- cil, the latter must be regarded as the superior Court, and, accord- ing to the constitution of the British judicial system and the whole course of practice and tradition, the decision of the superior

1I C.L.R., 329, at p. 343. 2(1895) 2 Q.B., 577, at p. 581. 3(1895) I Ch., 51. 4(1907) A.C., 81 ; 4 C.L.R., 356. 51 C.L.R., 585. 4 CLR 1096

A. Court must be followed. Even the Privy Council, for the sake of

avoiding diversity of decisions, follows the House of Lords, though not technically bound to do SO. For a similiar reason the King's Bench Division follows the Privy Council. It is of the utmost (N.S.W.)

importance to all subjects of the Empire that in all parts of it, where English law prevails, the interpretation of the law should be as nearly as possible uniform Trimble v. Hill 1. The duty imposed upon the High Court by sec. 74 is to decide the matter by its own judgment, but only in accordance with the law as laid down by the superior Court. That restriction does not impair its dignity or prestige in any way. [He referred also to Reprint of Debates on the Commonwealth of Australia Constitution Bill, pp. 69, 71, 112-116.]

But it is a condition precedent to the jurisdiction defined in sec. 74 that the matter should be one within its meaning. It is not open to the High Court to prevent an appeal from its decision by holding that a matter is within the section, if, as a matter of law, it is not. In this case there is no question as to the limits inter se of the constitutional powers of State and Commonwealth. The Land and Income Tax Act cannot conflict with any executive or legislative power, nor interfere with any instrumentality of the Commonwealth. The mere question whether the fact of a man being a federal officer renders him exempt from State taxation does not raise any question as to the limits of powers. No relevant power of the Commonwealth has been exercised. The mere raising of the contention that there is such a conflict is not sufficient. The Privy Council were of opinion that no such question was involved.

Even if the principle of M'Culloch v. Maryland 2 is applied, there was no interference in this case. The liability of federal officers to the ordinary burdens of citizenship without any dis- crimination against them as compared with others cannot be regarded as impairing the efficiency of a Commonwealth agency. [He referred to Railroad Co. v. Peniston 3; Wollaston's Case 4.] But the principle, however applicable to the United

15 App. Cas., 342. 24 Wheat., 316. 318 Wall., 5, at p. 30. 428 V.L.R., 357, at p. 378; 24 4 CLR 1097

States, cannot be applied in construing the Constitution of the Commonwealth, It was adopted by the Supreme Court in America as necessary for the preservation of the Union, not because it was a necessary implication according to the accepted principles of construction in English law. It was a straining of the law that was perhaps justified because there was no other (N.S. W.). power outside the States to prevent mutual interference. The Privy Council have not held that there is to be no implication in construing the Constitution, but that there is no room for this particular implication. In the United States Constitution the maxim expressio unius est exclusio alterius was excluded by Art. IX., as amended, but here the maxim applies, and when secs. 106-109 provide for the preservation of all rights to the States that are not taken away by the Constitution, and sec. 114 expressly pro- hibits taxation of Commonwealth property, it must be presumed that the States' powers of taxation are otherwise unimpaired, and are not to be cut down by implication. Art. X. of the United States Constitution is not a parallel to these provisions. But even if the Constitution were in identical terms, to read the principle of M'Culloch v. Maryland 1, into this Constitution would be legislation, not construction, and would be unnecessary. [He referred to Bank of Toronto v. Lambe 2.] It is not in accordance with English law to hold that a power not expressly taken away should be taken away by implication because if it existed it might be abused, or that the power to tax is the power to destroy. The Royal assent is necessary for all legislation, and is an effective check upon serious encroachments by State or Commonwealth upon one another. Another check is the power of the Imperial Parliament to legislate. The power of veto, though not commonly used, is a real power, and may be exercised at any time to prevent dangerous legislation in the Colonies Todd, Parliamentary Government in the British Colonies, 1st ed., p. 385; Quick and Garran, Annotated Constitution of the Australian Commonwealth, pp. 694, 695. Sec. 74 itself recog- nizes this power as a check upon legislation affecting the pre- rogative.

An appeal does not lie to this Court from the District Court

14 Wheat., 316. 212 App. Cas., 575. 4 CLR 1098

Judge in this case. Before the Judiciary Act 1903 the District

Court Judge had jurisdiction to entertain this action, and there was an appeal to the Supreme Court. It is not federal jurisdic- tion, but an ordinary action against a citizen under a State law. Apart from sec. 39 of the Judiciary Act 1903, the appeal would (N.S.W.).

lie to the Supreme Court only. But that section is an attempt to take away the appeal from the State Courts to the Supreme Court, and indirectly the appeal to the Privy Council, by the device of taking away their jurisdiction, and giving it back as federal, and then allowing an appeal to the High Court only. The section is therefore ultra vires, and the appeal is wrongly brought.

[GRIFFITH C.J.-This Court decided, in Ah Yick v. Lehmert 1, that the jurisdiction of the Supreme Court to entertain appeals from inferior Courts of the States has not been interfered with by this section.]

Groom A.-G. in reply. The conflict of powers indicated in sec. 74 need not be legislative. Here there is a conflict between the legislative powers of a State and the executive power of the Commonwealth. The question has only to be raised to give this Court jurisdiction under sec. 74.

There is no real distinction between the Constitution of the Commonwealth and that of the United States in regard to the division of powers; and the necessity for the rule of non-interfer- ence is equally great in the two cases. The power of veto is ineffective as a check. Neither that nor power of the Imperial Parliament to legislate is an efficient substitute for a rule of construction which may be applied as the occasion arises. [He referred to Garnsey v. Flood 2 Collector v. Day 3.]

[ISAACS J. referred to Hebbert v. Purchas 4; Read v. Bishop of Lincoln 5 Safford and Wheeler's Privy Council Practice, p. 548.

HIGGINS J. referred to Pollock's Jurisprudence, Bk. I., pp. 322, 324.]

The District Court was exercising federal jurisdiction, as the

12 C.L.R., 593. 2(1898) A.C., 687, at p. 692, 311 Wall., 113. 4L.R. 3 P.C., 605. 5(1892) A.C., 644, at p. 654. 4 CLR 1099

interpretation of the Constitution was involved in its decision. Sec. 39, sub-sec. 2 of the Judiciary Act 1903 is a valid exercise of the powers conferred by sec 76, sub-sec. (I.) and sec. 77, sub-sec. (II.) of the Constitution. No question arises as to the power of the Parliament to exclude an appeal to the Privy Council.

[GRIFFITH C.J.-This Court has jurisdiction under sec. 73 of the Constitution to entertain the appeal even if it has not under sec. 39 (2) of the Judiciary Act 1903.]

Flannery, for the appellant, in reply. The Imperial Parliament, having left the Privy Council and the High Court with co-ordinate jurisdiction in certain matters, their relationship in regard to those matters is not analogous to that which exists between Supreme Courts and the Privy Council, or between the High Court and the Privy Council on matters of general law. The High Court is not an inferior Court promoted to a new jurisdiction, but a new Court with new jurisdiction in matters that never could have arisen before, with an authority in those matters at least equal to that of the Privy Council. The proper guidance for the Court is to be found, not in the tradition of the Empire as regards the practice and procedure of the Supreme Courts, but in the Con- stitution itself, which has no precedent in British legislation, and in the circumstances under which it came into existence.

Cur. adv. vult. The judgment of GRIFFITH C.J., BARTON J. and O'CONNOR J., was read by

GRIFFITH C.J. This is an appeal from a judgment of a District Court in New South Wales in an action by the respondents to recover from the appellant a sum of money for income tax claimed in respect of the emoluments received by him for the discharge of his official duty as an officer of Customs in that State. The learned District Court Judge, following the decision of the Judicial Committee in the case of Webb v. Outtrim 1, in which the decision of this Court in the case of Deakin v. Webb (2) was dis- approved, gave judgment for the plaintiffs. The case was argued at length at the last sittings of the Court in Sydney, but as the

21 C.L.R., 585. 1(1907) A.C., 81. 4 CLR 1100

same questions were said to be raised in the case of Flint v. Welb which was set down for hearing at the present sittings of the Court in Melbourne, the Court determined to hear the arguments in both cases before delivering judgment. All the points arising for determination are common to both cases, and although the (N.S.W.).

arguments for the respective respondents did not proceed upon quite identical lines we propose to deal with them all in this judgment.

Two questions of supreme importance to the future of the Commonwealth are raised for decision; first, whether the High Court or the Judicial Committee of the Privy Council is under the Constitution the ultimate arbiter upon questions as to the limits inter se of the constitutional powers of the Commonwealth and those of any State or States; and, secondly, whether under the Constitution a State can, in the exercise ,of its legislative or executive authority, interfere with the exercise of the legislative or executive authority of the Commonwealth, and, conversely, whether the Commonwealth can in like manner trammel the exercise of the legislative or executive power of the States.

Other questions of comparatively minor importance are also raised-one as to the competency of this Court to hear the appeal, and another as to the extent, if any, to which a tax imposed by State law upon the official emoluments of a federal officer is a violation of the rule asserted by this Court in the case of D'Emden V. Pedder 1. In that case this Court, holding that the doctrine laid down in the celebrated case of M'Culloch v. Maryland 2, was applicable to the Constitution of the Commonwealth of Australia, laid down the rule that " When a State attempts to give to its legislative or executive authority an operation which, if valid, would fetter, control, or interfere with, the free exercise of the legislative or executive power of the Commonwealth, the attempt, unless expressly authorized by the Constitution, is to that extent invalid and inoperative."

In the case of Deakin v. Webb 3 the Court again affirmed that rule, and, adopting the reasoning of the Supreme Court of the United States in the cases of Dobbins v. Commissioners of

11 C.L.R., 91. 24 Wheat., 316. 31 C.L.R., 585. 4 CLR 1101

Erie County 1, and The Collector v. Day 2, applied it to the case of a State income tax upon the emoluments of Federal Ministers and members of Parliament. In The Federated Amal- gamated Government Railway and Tramway Service Association V. New South Wales Railway Traffic Employés Association 3, the Court applied the same principle to an attempted interference by the Commonwealth with the exercise by a State of its sovereign powers.

In Webb v. Outtrim the Supreme Court had followed the decision of this Court in Deakin v. Webb 4, but an appeal to the Privy Council was allowed 5.

The respondents contend that this Court is bound by that decision, and that the decisions already mentioned, and others in which the Court applied the same principles, must be taken to be overruled and no longer law-in other words, that, an interpreta- tion of the Constitution on the points in issue having been given by the Privy Council in a case which they had jurisdiction to decide, this Court must defer to their opinion, whether it does or does not agree with it. On the other hand it is contended by the appellant and by the Commonwealth that by the Constitution this Court was created for the express purpose, amongst others, of interpreting the Constitution, and that as to some questions, of which that now in controversy is one, the Judicial Committee has no authority to give a decision binding on this Court unless in the opinion of this Court the question is one which ought to be determined by the Sovereign in Council, although it is conceded that, if they decide such a question incidentally, their decision is binding on the immediate parties.

The answer to the question thus raised must depend upon the terms of the Constitution itself. Sec. 74 is as follows:-" No appeal shall be permitted to the Queen in Council from a decision of the High Court upon any question, howsoever arising, as to the limits inter se of the constitutional powers of the Common- wealth and those of any State or States, or as to the limits inter se of the constitutional powers of any two or more States,

116 Peters, 435. 211 Wall., 113. 34 C.L.R., 488. 41 C.L.R., 585. 5(1907) A.C., 81. 4 CLR 1102

unless the High Court shall certify that the question is one

which ought to be determined by Her Majesty in Council.

"The High Court may SO certify if satisfied that for any special reason the certificate should be granted, and thereupon an appeal shall lie to Her Majesty in Council on the question without (N.S.

further leave.

"Except as provided in this section, this Constitution shall not impair any right which the Queen may be pleased to exercise by virtue of Her Royal Prerogative to grant special leave of appeal from the High Court to Her Majesty in Council. The Parliament may make laws limiting the matters in which such leave may be asked, but proposed laws containing any such limitation shall be reserved by the Governor-General for Her Majesty's pleasure."

Much argument was addressed to us as to the meaning of this section. It was contended on both sides that the language is plain and unambiguous, though contradictory interpretations were put upon it. There was also a good deal of argument as to the extent to which reference could properly be made to matters of history for the purpose of interpreting the language. In our opinion there is no ambiguity in the language, if it is regarded simply as a prohibition of an appeal to the Sovereign in Council in the pre- scribed cases. The particular task now imposed upon us is not SO much to interpret verbal expressions, as to discover the object of the legislature in making the enactment. No one disputes that in ordinary cases this Court is bound by the decisions of the Privy Council, for the very obvious reason that, if it declined to follow them, the decision of this Court would be reversed on appeal, SO that such a refusal would be both futile and mis- chievous. Apart from this reason, it is a recognized working rule, necessary for establishing consistency and uniformity in the law, that Courts whose decisions are subject to appeal shall follow the decisions of Courts of final appeal. And, if there were no more in the case, the rule might very well be applied to the pre- sent controversy. But there is a great deal more. For the first time in the history of the British Empire a Court has been estab- lished as to which it has been declared that no appeal shall be permitted from its decisions on certain questions unless the Court itself certifies that the question is one which "ought to be deter-

4 CLR 1103

mined' by the Sovereign in Council. These words cast upon the H. Court the duty of determining whether the question is such an one or not, and, if it thinks that it is not, it is its solemn duty to say SO. If the case falls within sec. 74, the Privy Council has no authority to review its opinion on that point, and the fact that the Privy Council may be called upon to deal with the same question in another case is quite irrelevant to the opinion of this Court as to whether it ought to be determined by that tribunal or not.

The question, then, is not one of construction in the narrow sense, for in that view no difficulty arises. The question is whether the conventional duty of one Court, not in all respects the highest, to follow another Court of higher authority is excluded by the implication arising from the purpose for which this Court was established, and the place which it holds under the Constitution. In this respect the question as to the duty of the Court is very analogous to the question as to the duty of the Governor-General to assent to or reserve a bill duly passed by both Houses of the legislature. There is no doubt as to the meaning of the words used, but the circumstances under which the power was intended to be exercised must be discovered from some other source. That source is to be found in a consideration of the whole purview of the Constitution, and the answer to the question cannot be given without having regard to its history.

Under the Constitution of the United States of America the power of veto possessed by the President and State Governors is absolute and uncontrolled, and was intended to be exercised at their absolute discretion, although its effect may in some cases be overcome in the manner prescribed by the respective Constitu- tions. In the Canadian Dominion the power of the Governor- General to disallow Provincial Acts is equally absolute, and was intended to be, and has been, used at his absolute discretion, acting of course with the advice of the Dominion Ministers. But no one familiar with the history of the self-governing Colonies of Australia supposes that the power of the Governor-General to reserve a Bill, or of the Sovereign to disallow a Bill, was intended to be exercised on the same principles.

4 CLR 1104

What then was the purpose for which the Court was estab- lished, and what place does it hold in the Constitution ?

This is quite a different question from a verbal criticism of the 74th section. The answer to it must be found in a consideration of the whole instrument construed in accordance with recognized (N.S.W.).

rules of construction applicable to written instruments. Those rules are especially applicable when the inquiry is directed to ascertaining the object of the legislature.

In Heydon's Case 1, decided in the 29th year of Queen Elizabeth, it was laid down :- That for the sure and true inter- pretation of all Statutes in general (be they penal or beneficial, restrictive or enlarging of the common law), four things are to be discerned and considered. (1). What was the common law before the making of the Act: 2. What was the mischief and de- fect for which the common law did not provide 3. What remedy the Parliament hath resolved and appointed to cure the disease of the Commonwealth (4). The true reason of the remedy; and then the office of all the Judges is always to make such construction as shall suppress the mischief, and advance the remedy, and to suppress subtle inventions and evasions for con- tinuance of the mischief, and pro privato commodo, and to add force and life to the cure and remedy, according to the true intent of the makers of the Act, pro bono publico." This rule, which is of course not limited to alterations of the common law, nor to mere questions of verbal criticism, has never been departed from. (See of late years the opinions of the Earl of Halsbury L.C. in Eastman Photographic Materials Co. v. Comptroller- General of Patents, Designs, and Trade Marks (2), and of Lord Atkinson in Badische Anilin Und Soda Fabrik v. Hickson (3).

How then ought this rule to be applied in construing the Constitution That instrument partakes both of the character of an Act of Parliament and of an international agreement made between the people of the several self-governing Australian Colonies, and also between the people of those Colonies collectively and the United Kingdom, for the Preamble recites that The people of New South Wales, Victoria, South Australia, Queensland,

13 Rep., 7a, at p. 7b. 2(1898) A.C., 571, at p. 573. 3(1906) A.C., 419, at p. 426. 4 CLR 1105

and Tasmania, humbly relying on the blessing of the Almighty God, have agreed to unite in one indissoluble Federal Common- wealth under the Crown of the United Kingdom of Great Britain and Ireland, and under the Constitution hereby established."

Before referring in detail to the historical facts which supply the answers to the inquiry as to the "mischief and defect for which the law did not provide," we think it right to emphasise what we conceive to be a fundamental principle applicable to the construction of instruments which purport to call into existence a new State with independent powers of legislation and govern- ment, and which are important with regard to both the main questions now before us for decision. Such instruments are not, and never have been, drawn on the same lines as, for instance, the Merchant Shipping Acts, which prescribe in every detail the powers and authorities to be exercised by every person dealt with by the Statutes. In this connection I will read a passage from the judgment of Story J., delivering the opinion of the Supreme Court of the United States in the case of Martin V. Hunter's Lessee 1. "The Constitution unavoidably deals in general language. It did not suit the purposes of the people, in framing this great charter of our liberties, to provide for minute specifications of its powers, or to declare the means by which those powers should be carried into execution. It was foreseen that this would be a perilous and difficult, if not an impracticable, task. The instrument was not intended to provide merely for the exigencies of a few years, but was to endure through a long lapse of ages, the events of which were locked up in the inscrut- able purposes of Providence. It could not be foreseen what new changes and modifications of power might be indispensable to effectuate the general objects of the charter and restrictions and specifications, which, at the present, might seem salutory, might, in the end, prove the overthrow of the system itself. Hence its powers are expressed in general terms, leaving to the legislature, from time to time, to adopt its own means to effectuate legitimate objects, and to mould and model the exercise of its powers, as its own wisdom, and the public interests, should require."

Again, in a Constitution establishing a State, whatever its

1I Wheat., 304, at p. 326. 4 CLR 1106

A. degree of dependence or independence, certain things are taken

for granted, just as, to compare small things with great, the mere creation of a corporation implies many incidents which it is not necessary to set forth. The framers of a Constitution at the end TAXATION

of the nineteenth century may be supposed to have known that (N.S.W.).

there have been in this world many forms of Government, that the various incidents and attributes of those several forms had been the subject of intelligent discussion for more than 2,000 years, and that some doctrines were generally accepted as applic- able to them respectively. It is true that what has been called an "astral intelligence," unprejudiced by any historical knowledge, and interpreting a Constitution merely by the aid of a dictionary, might arrive at a very different conclusion as to its meaning from that which a person familiar with history would reach. An excellent illustration of this is afforded by the case referred to the Privy Council in 1885 on a joint address of the Legislative Council and Legislative Assembly of the Colony of Queensland. Under the Constitution of that Colony the Legislative Council is nominated by the Crown. So far as regards the express lan- guage of the instrument both Houses of the legislature have equal powers of legislation, except that money bills must originate in the Legislative Assembly. The Legislative Council amended an Appropriation Bill by omitting an item which the Legislative Assembly had included. The Legislative Assembly returned the Bill to the Legislative Council with a message dated 12th November disagreeing to the amendment for reasons set forth at length, and asserting their claims as follows:-

"The Legislative Assembly maintain, and have always main- tained, that (in the words of the Resolution of the House of Commons of 3rd July 1678), all aids and supplies to Her Majesty in Parliament are the sole gift of this House, and it is their undoubted and sole right to direct, limit and appoint, in Bills of aid and supply, the ends, purposes, considerations, conditions, limitations, and qualifications of such grants, which ought not to be changed or altered by the Legislative Council."

The Legislative Council insisted on their amendment, stating in their message that they neither arrogated to themselves the position of being a reflex of the House of Lords nor recognized

4 CLR 1107

the Legislative Assembly as holding the same relative position as the House of Commons; and further alleging that it did not appear that occasion had arisen to require that the House of Lords should exercise its power of amending Supply Bills, adding that ' the right is admitted though it may not have been exercised."

Finally the Legislative Council did not insist on their amend- ment, but a joint address was presented to Her Majesty embody- ing a case setting out the facts, and praying that the following questions might be submitted for the opinion of the Privy Council :-

1. Whether the Constitution Act of 1867 confers on the Legislative Council powers co-ordinate with those of the Legis- lative Assembly in the amendment of all Bills including Money Bills.?

2. Whether the claims of the Legislative Assembly, as set forth in their message of 12th November, are well founded ?

The case was considered by a Board consisting of the Lord President (Earl Spencer), the Lord Chancellor (Lord Herschell), the Duke of Richmond, Lord Aberdeen, Lord Hobhouse, Lord Blackburn, and Sir Richard Couch, who on 27th March 1886, reported to Her Majesty that the first of the questions should be answered in the negative and the second in the affirmative.

No formal reasons were given for the report, but the ground on which it proceeded is sufficiently apparent. The arguments of the Legislative Assembly were accepted, and it was held that, the legislature of Queensland having been constituted on a basis analogous to that of the United Kingdom, the express limitation of the power to originate supply to the elective House carried with it by implication a limitation of the power of the Legisla- tive Council analogous to that which is recognized as imposed on the House of Lords. If the Queensland Constitution had been technically construed without regard to its subject matter the result must have been different.

What, then, are the relevant historical facts ? For many years before 1900 the question of the federation of the Australian Colonies had been the subject of anxious discussion. Under the existing law, i.e., the several Colonial Constitutions by which the

4 CLR 1108

six several States which now form the Commonwealth had

independent powers of legislation in all matters whatsoever sub- ject to the Royal power of disallowance, the six Colonies were isolated units there were no practicable means by which the united voice of the people of the whole of Australia could be (N.S.W.).

ascertained, or, if ascertained, could be made effective; no efficient measures could be taken for defence; and material inconvenience was caused by the conflict of tariffs, which frustrated the desire for free intercourse among people of one stock, who had come to regard themselves as the inheritors in common of a great con- tinent. There were, no doubt, many persons to whom these matters did not afford evidence of any mischief or defect in the existing law, but the circumstance that a new law does not com- mend itself to all the persons subject to its operation, or even to its interpreters, does not affect the application of the rule which we have quoted. The existence of this mischief and defect must be taken to have been a fact proved to the satisfaction of the legislature who took such action as they thought best fitted to provide a remedy. The object of the advocates of Australian federation, then, was not the establishment of a sort of municipal union, governed by a joint committee, like the union of parishes for the administration of the Poor Laws, say in the Isle of Wight, but the foundation of an Australian Commonwealth embracing the whole continent with Tasmania, having a national character, and exercising the most ample powers of self-government con- sistent with allegiance to the British Crown. In 1891 a Conven- tion had been held in Sydney, the members of which had been nominated by the several Colonial Parliaments. The draft Con- stitution prepared by that Convention had been submitted for the formal consideration of those Parliaments. The principle of national union was generally accepted, although there was much difference of opinion as to details. In 1897 and 1898 another Convention, representing five of the six Colonies, and consisting, in the case of four of the Colonies, of members elected by the people under laws specially passed, and, in the case of the fifth, of members appointed by the Parliament of that Colony, met, and by them a Constitution was framed, which with one alteration is now embodied in the Constitution Act passed by the Parliament

4 CLR 1109

of the United Kingdom in 1900, and the construction of which is now in discussion.

So much for local history. But in regarding the birth of a new State we are not obliged to limit our view to the cradle. In fashion- ing the Constitution of a Federated Commonwealth the framers might assuredly be expected to consider the constitution and his- tory of other federations, old and new. According to the recognized canons of construction they must be taken to have been familiar with them, and the application of this doctrine is not excluded or weakened by its notorious historical truth as to the members of the Convention. Now, at the end of the nineteenth century there were in actual operation three great federal systems of Government- the two great English-speaking federations of the United States of America and Canada, and the Swiss Confederation. We may assume that the relative advantages and disadvantages of these several systems were weighed by the framers of the Constitution. If it is suggested that the Constitution is to be construed merely by the aid of a dictionary, as by an astral intelligence, and as a mere decree of the Imperial Parliament without reference to history, we answer that that argument, if revelant, is negatived by the preamble to the Act itself, which has been already quoted. That is to say, the Imperial legislature expressly declares that the Constitution has been framed and agreed to by the people of the Colonies mentioned, who, as pointed out in the judgment of the Board in Webb v. Outtrim 1, had practically unlimited powers of self-government through their legislatures. How, then, can the facts known by all to have been present to the minds of the parties to the agreement be left out of consideration ?

We may take it, then, that, amongst other things, the Canadian Constitution, which had been in operation for some thirty years, was considered. The scheme of that Constitution was to make a complete distribution of the powers of government, SO that the Dominion was endowed with all powers which were not expressly conferred upon the Provinces, and SO that all powers were assigned to one authority to the exclusion of the other. Under that scheme no question of conflict of powers within the same ambit could arise. But many other questions had arisen under

1(1907) A.C., S1. 4 CLR 1110

that Constitution as to the respective powers of the Dominion and the Provinces-all questions of construction-and had been determined by the Judicial Committee in a series of decisions which had been the subject of much criticism. One eminent English constitutional authority (Bryce) had remarked that if the (N.S.W.).

American Constitution (which is also a written instrument), had been dealt with by the Supreme Court of the United States in the same manner in which the Dominion Constitution was treated by the Judicial Committee the United States would never have grown to their present greatness.

There were, then, two conspieuous points relative to the Dominion Constitution: (1) That it gave the residue of power to the Central Government; and (2) that its interpretation by the Judicial Committee had not given universal satisfaction. As it happens, it is not necessary for present purposes to refer to the Constitution of the Swiss Confederation. We turn to the other great constitutional document, the Constitution of the United States of America. That instrument is based upon a principle fundamentally different from the principle adopted in the case of Canada. Its scheme is to grant or delegate to Congress certain specific powers of government, all other powers being retained by the States, which were sovereign independent States. The authority by which the Constitution was enacted was the people. The 10th amendment of the Constitution, adopted almost imme- diately after the establishment of the United States, was in these words :-

"The powers not delegated to the United States by the Con- stitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people."

Article III. of the Constitution had provided (sec. 1) that the judicial power of the United States should be vested in one Supreme Court and in such inferior Courts as the Congress might from time to time ordain and establish, and (sec. 2) that the judicial power should extend to all cases arising under the Con- stitution, the laws of the United States, and treaties made under their authority, and to certain other matters.

It had been found by the experience of a century that, under the American scheme, where two distinct Governments exercised

4 CLR 1111

authority over the same locality and the same persons, SO that every citizen owed allegiance to, and was bound to obey the laws of, two distinct Governments, conflicts had continually arisen as to what were commonly called the constitutional powers of the General Government and the State Governments. This was a matter of historical fact. It might perhaps have been predicted by anyone with ordinary foresight. But that such conflicts had arisen, and were continually arising, was notorious. The cause of the conflict was, it is quite obvious, the nature of the Constitution. The arising of such conflicts is as much an incident of such a Constitution as the operation of the law of gravitation is an incident of ballooning, or as the possibility of differences arising in the application of a treaty between two States is an incident of the treaty. In the latter case it has not been unusual to make provision for a special tribunal of arbitra- tion to decide such differences. So, in the case of such conflicts between a federal Government and the States some arbiter was necessary. It was well known that in the United States one of the most important functions of the Supreme Court had been to act as such arbiter, and that a large body of law had grown up, founded upon the decisions of most eminent jurists, familiar both with the written Constitution and with its practical opera- tion. It was common knowledge, not only that the decisions of the Judicial Committee in the Canadian cases had not given widespread satisfaction, but also that the Constitution of the United States was a subject entirely unfamiliar to English lawyers, while to Australian publicists it was almost as familiar as the British Constitution. It was known that, even if there should be any members of the Judicial Committee familiar with the subject, it was quite uncertain whether they would form members of a Board that might be called upon to determine a question on appeal from an Australian Court, by which it must necessarily be dealt with in the first instance. It could not be predicted of the Board, which would sit to entertain an appeal, that it would be constituted with any regard to the special familiarity of its members with the subject. And no disrespect is implied in saying that the eminent lawyers who constituted the Judicial Committee were not regarded either as being

4 CLR 1112

familiar with the history or conditions of the remoter portions of

the Empire, or as having any sympathetic understanding of the aspirations of the younger communities which had long enjoyed the privilege of self-government. On the other hand, founders of the Australian Constitution were familiar with the TAXATION (N.S.W.).

part which the Supreme Court of the United States, constituted of Judges imbued with the spirit of American nationality, and knowing that the nation must work out its own destiny under the Constitution as framed, or as amended from time to time, had played in the development of the nation, and the harmonious working of its political institutions.

These then being the facts calling for legislation, or, to use the old formula, "the mischiefs and defects" for which the existing law did not provide, all of which were notorious, and these being the known incidents of different forms of government, what did the "people" agree to ?

(1) They rejected the Canadian scheme (2) They agreed to adopt, SO far as regards the distribution of functions and powers, the scheme of the American Constitution, and in particular :-

(a) To confer upon the Commonwealth Parliament plenary power to make laws for the peace, order, and good government of the Commonwealth with respect to the matters enumerated in sec. 51 of the Constitution, thus adopting the analogy of sec. 8 of Article I. of the United States Constitution, which in like manner confers on Congress plenary power as to specified sub- jects

(b) To allow the States to retain their original authority except SO far as it was taken from them. This was expressed in sec. 107 of the Constitution, which is as follows:

"Every power of the Parliament of a Colony which has become or becomes a State, shall, unless it is by this Constitution ex- clusively vested in the Parliament of the Commonwealth or withdrawn from the Parliament of the State, continue as at the establishment of the Commonwealth, or as at the admission or establishment of the State, as the case may be."

For the purposes of comparison we again quote at length the 10th Amendment of the United States Constitution

4 CLR 1113

"The powers not delegated to the United States by the Consti- H. C. tution, nor prohibited by it to the States, are reserved to the States respectively, or to the people."

In the case of D'Emden v. Pedder 1, this Court referred to these respective provisions as "indistinguishable in substance, though varied in form," and in Deakin v. Webb 2 as "language not verbally identical, but synonymous." To any one familiar with the subject the aptness of both expressions will be apparent.

(c) The "people" agreed (sec. 71) that the judicial power of the Commonwealth should be vested in a Federal Supreme Court to be called the High Court of Australia, and in such other Federal Courts as the Parliament might create, and in such other Courts as it might invest with federal jurisdiction; following in almost identical terms the language of Article III. of the United States Constitution.

They further agreed (sec. 73) that the High Court should have a general appellate jurisdiction from Federal Courts and Courts exercising federal jurisdiction and also, in this respect going further than the American precedent, from the Supreme Courts of the States, and that (sec. 76) the Parliament might confer on it original jurisdiction in any matter arising under the Consti- tution or involving its interpretation.

Sec. 75 provided that in five enumerated classes of matters the High Court should have original jurisdiction. Sec. 76 provided that in four other enumerated classes of cases the Parliament might make laws conferring original jurisdiction on the Court. Two of these were "matters arising under the Constitution or involving its interpretation," and "matters arising under any laws made by the Parliament." The nine classes of matters enumerated in these two sections were, therefore, the matters to which the judicial power of the Commonwealth referred to in sec. 77 as "federal jurisdiction," was to extend: Ah Yick V. Lehmert 3. That section provided that with respect to any of these enumerated classes the Parliament might make laws-

This is a question as to the operation of a New South Wales Income Tax Act. How far do the provisions for the appeal to the King in Council from New South Wales Courts affect the matter ? By the Act 9 Geo. IV. e. 83, sec. 15, His Majesty was empowered to make an order in Council, allowing "any person or persons feeling aggrieved by any judgment, decree, order, or sentence of the Supreme Court (of New South Wales), to appeal therefrom to His Majesty in Council in such manner, within such time, and under and subject to such rules, regulations, and limitations as His Majesty by any such in Council shall appoint and prescribe." Under this Act, an Order in Council was made November 13th 1850 prescribing that it shall be lawful for "any person or persons" to appeal to Her Majesty in Her Privy Council "from any final judg- ment, decree, order, or sentence of any such Court," provided that the matter in dispute is over £500 in value, and provided that security be given for the prosecution of the appeal, and for costs, to the satisfaction of the Supreme Court. It will be observed that the words of this Act, and of the subsequent

1L.R. 1 P.C., 520, at p. 530. 22 App. Cas., 102, at pp. 106, 108. 35 App. Cas., 409, at p. 417. 4 CLR 1176

Act 7 &8 Vict. c. 69, and of the Orders in Council thereunder

are universal - any person aggrieved in the Supreme Court may appeal from any judgment. There is no limit as to subject matters, although there is a limit as to amount or value. These Acts are made by the same authority as the Commonwealth (N.S.W.).

Constitution Act-the King and Houses of Parliament of Great Britain and Ireland-and these Acts and the Constitution Act must be read SO as to give full effect to both, SO far as the Constitution Act does not repeal the prior Acts expressly or by necessary implication. There is certainly no express repeal, no express amendment, of these prior Acts by the Constitution Act. There is nothing in the Constitution Act to show any intention to limit or qualify the right of appeal from the Supreme Court in respect of any judgment, or any point or matter in that judgment, whether it come under federal jurisdiction, or within the limited class of subjects referred to in sec. 74, or within any class of subjects whatsoever. The King in Council is not shorn of his authority to entertain the appeal of his New South Wales subjects from the Supreme Court, or of his right, on that appeal, to form and express his own conclusions on all relevant issues of law and of fact. He is not bound to accept the view of the High Court as expressed in cases which have gone to the High Court. He still retains his pre-eminence as the final interpreter of the law. He cannot, it is true, reverse an actual decision of the High Court unless the cause in which that decision has been given came before him by way of appeal, and it cannot come before him on appeal from the High Court, unless with the High Court's approval. In such a case-as for example in Deakin V. Webb 1-the decision of the High Court is final as between the parties to that cause. But though the King in Council cannot reverse a decision of the High Court in a case which has not come before him, there is nothing, that I can find, to limit his power to review, and, if need be, to overrule, any pronounce- ment of law made by the High Court, or by any other Court of his Dominions beyond the seas; and inasmuch as the King in Council has overruled the decision of this Court in Deakin V. Webb (1), I think it to be the duty of this Court to accept His

11 C.L.R., 585. 4 CLR 1177

Majesty's official opinion as finally stating the law. I am there- H. OF fore of opinion that this appeal should be dismissed.

An application was made for a certificate of the High Court under sec. 74 of the Constitution.

Pigott for the respondents, in support. Ferguson for the appellant. Woinarski for the Commonwealth. The application was refused for the reasons given in Flint V. Webb, post, p. 1178.

Solicitor, for appellant, R. Sullivan, Sydney. Solicitor, for respondents, the Crown Solicitor for New South Wales.

Solicitor, for intervener, Powers, Commonwealth Crown Solicitor.

Appeal allowed. Judgment below reversed.

Judgment for the defendant with costs. Respondents to pay costs of appeal.