Cole v Whitfield - [1988] HCA 18

No judgment structure available for this case.

HIGH COURT OF AUSTRALIA

Mason C.J., Wilson, Brennan, Deane, Dawson, Toohey and Gaudron JJ.

COLE v. WHITFIELD

(1988) 165 CLR 360

2 May 1988

Constitutional Law (Cth)

Constitutional Law (Cth)—Freedom of interstate trade and commerce—Prohibition by State law of sale of undersize crayfish—Application to crayfish brought for sale from another State—The Constitution (63 &64 Vict. c. 12), s. 92—Sea Fisheries Regulations 1962 (Tas.), reg. 31(1) (d).

Decision

MASON C.J., WILSON, BRENNAN, DEANE, DAWSON, TOOHEY AND GAUDRON JJ. This case and Bath v. Alston Holdings Pty Ltd, which were heard successively, turn upon the effect of s.92 of the Constitution. The appellant in this case, the plaintiff in Bath v. Alston Holdings Pty Ltd and the interveners (the Commonwealth and the States) presented arguments which invited the Court to acknowledge that there is now no settled interpretation of s.92 and which supported the adoption of what has been broadly described as the "free trade" approach to the construction of the section. Before we examine these arguments, we shall explain the factual and legislative context of the present case.

2. Section 9 of the Fisheries Act 1959 (Tas.) ("the Act") empowers the Governor of Tasmania to make regulations relating to a number of subjects including:

"(1)...

(m) prohibiting the taking of any undersized, unclean, or unseasonable fish;

(n) prohibiting, either generally or for any rescribed period, the buying, selling, or offering or exposing for sale, or the having possession or control of any fish (whether taken in this State or elsewhere) falling within all or any of the following classes, namely:-

(i) fish, or the female of fish, or fish of less than a prescribed size, of a articular kind or species;

(ii) undersized, unclean, or unseasonable fish;

(iii) fish the taking of which is contrary to the regulations."

The Sea Fisheries Regulations 1962 were made under the Act and reg.31(1)(d) provides, inter alia, as follows:

"31. (1) No person

...

(d) shall take, buy, sell, offer or expose for sale, or have in his possession, or under his control, any fish of any of the kinds or species respectively enumerated in the table to this paragraph that is of less size than the minimum size rescribed therein in respect of that kind or species of fish, whether or not the fish was taken in State fishing waters:

TABLE

------------------------------------------------ Kind or species Minimum size of of fish fish in centimetres

------------------------------------------------

...

(ix) Male Crayfish 11

(x) Female Crayfish 10.5

... "

Sub-regulations (2) and (3) prescribe the manner of measuring fish for the purposes of the regulation. Regulation 44(3) makes it an offence for a person to contravene, or fail to comply with, a provision of the regulations that is applicable to him.

3. The appellant, a senior inspector of the Tasmanian Fisheries Development Authority, laid a complaint against the respondents charging them with a breach of the provisions of the Sea Fisheries Regulations. The matter of the complaint was heard and determined in the Court of Petty Sessions at Hobart in September 1986. The circumstances out of which the prosecution arose were set out in a statement of agreed facts which was before the magistrate. The statement was as follows:

"1.The Complainant was at all relevant times for the purpose of this Complaint a Senior Inspector employed by the Tasmanian Fisheries Development Authority and a public officer for the purposes of the Justices Act 1959 (Tas.).

2.The Tasmanian Fisheries Development Authority was at all relevant times for the purpose of this Complaint the body responsible for the enforcement of the provisions of the Fisheries Act 1959 (Tas.) and the Sea Fisheries Regulations 1962 made thereunder.

3.The First-named Defendant is the Operations Manager of the Boomer Park Crayfish Farm, Dunalley in Tasmania.

4.The business of the Boomer Park Crayfish Farm is to purchase and market live crayfish throughout Tasmania, Australia and internationally.

5.The Second-named Defendant is a Company incorporated pursuant to the provisions of the Companies (Tasmania) Code 1982 and is the Operator of the said Boomer Park Crayfish Farm.

6.In the month of October 1982, the Second-named Defendant purchased a quantity of live crayfish from S.E. Lobster Fisherman - Self Nominees in South Australia for delivery to Boomer Park Crayfish Farm in Tasmania.

7.On the following day to that referred to in paragraph 6 hereof, the said crayfish were delivered to the Boomer Park Crayfish Farm from South Australia.

8.The said crayfish were all of a size greater than the prescribed minimum size in South Australia and were intended for sale to Mainland and overseas markets.

9.On the 5th day of January, 1983, Robert Goyne, a District Fisheries Inspector employed by the Tasmanian Fisheries Development Authority inspected Boomer Park Crayfish Farm and discovered a quantity of cooked crayfish that were under the prescribed minimum size for crayfish in Tasmania.

10.The said undersize crayfish were a part of the aforementioned consignment delivered from South Australia to the Boomer Park Crayfish Farm and referred to in paragraphs 6 and 7 hereof.

11.On the 6th day of January, 1983, the previously discovered crayfish were measured and sixty males together with thirty seven females were found to be under the prescribed minimum size for crayfish in Tasmania.

12.The Defendants were charged with Possession of Undersize Crayfish contrary to the provisions of Regulations 31(1)(d)(ix) and (x) and 44(3) of the Sea Fisheries Regulations 1962 (Tas.).

13.The Defendants have pleaded not guilty to the charge and seek to rely upon the protection of Section 92 of the Constitution of the Commonwealth of Australia."

In addition the magistrate was informed that:

"(a) The crayfish in question were brought to Tasmania chilled but still alive in packages. They were put into saltwater ponds to revive them.

(b) Those sufficiently revived were chilled in brine to minus five degrees centigrade and shipped in bags to the United States of America.

(c) Those that did not revive sufficiently were held by the Respondents pending final determination as to their disposal.

(d) All of the said crayfish the subject of the Complaint were in the category of paragraph (c) crayfish."

4. The magistrate dismissed the complaint. The appellant, claiming to be a person aggrieved by the dismissal, moved the Supreme Court of Tasmania to review the magistrate's order pursuant to s.107 of the Justices Act 1959 (Tas.). The cause pending in the Supreme Court was then removed into this Court pursuant to s.40(1) of the Judiciary Act 1903 (Cth) in order to seek this Court's decision on two questions identified in the order of removal:

"(a) whether the possession in Tasmania by the Respondents of sixty male and thirty-seven female crayfish imported from South Australia is possession that is the subject of a transaction of interstate trade and commerce within the meaning of Section 92 of the Commonwealth of Australia Constitution or,

(b) whether the provisions of Regulations 31(1)(d)(ix) and (x) of the Sea Fisheries Regulations 1962 made under the Fisheries Act 1959 (Tas.), when applied to the possession of the aforesaid crayfish, are compatible with the freedom guaranteed by Section 92 of the Constitution; ..."

5. These questions are intended to raise for consideration the operation of s.92 on the circumstances set out in the agreed statement of facts. If this Court should be of the opinion that s.92 so operates that the respondents are not liable to conviction, the appeal should be dismissed; if the Court is of the opinion that the agreed statement of facts discloses an offence for which the respondents are liable to conviction, the order which the appellant seeks is remittal of the matter to the Supreme Court. It has been commonly understood in Tasmania that a magistrate's order dismissing a complaint for breach of a criminal law may be reviewed under the Justices Act, and the respondents have deliberately refrained from challenging the correctness of that view. However, in the event of the appellant succeeding in this Court, he does not intend to seek a conviction in the Supreme Court.

6. If the view be taken that the guarantee of freedom contained in s.92 is one of substance rather than of legislative form, it may well be that the validity of the relevant provisions of the Sea Fisheries Regulations or their applicability to the respondents' possession of the crayfish referred to in the complaint will depend on the general circumstances in which those provisions would operate. To cover that contingency, the Court has been furnished with an agreed statement of those circumstances. The statement reads:

"1. The conservation of crayfish stocks in Tasmania depends upon effectively enforced legal inimum size regulations. It is common in all States of Australia and throughout the world to protect many species of fish by limiting their taking (and/or possession) according to a minimum size.

2. In Tasmania the breeding stock of crayfish is almost entirely made up of mature fish which are below the legal minimum size. Accordingly, fish may be taken above the minimum legal size without endangering the future of the fishery.

3. In Tasmanian waters it takes approximately four years for a crayfish to reach maturity and be able to reproduce. The female crayfish has then a carapace length of approximately 70 mm, the male, a little greater. Measurement is made in the manner shown on the attached diagram.

4. Studies show that the mortality rate for young crayfish is such that an average of four years of breeding is necessary to maintain the current population level. After that time, the average female carapace length is approximately 105 mm and the male, 110 mm. Those sizes are thus set as the minimum permissible size at which the fish may be taken, with the object of thereby preserving stocks and ensuring the viability of the industry.

5. In South Australia the minimum size at which both male and female crayfish may be taken is 98.55 mm. Principally this reflects the fact that the reproduction of the species in South Australian waters is considered by the South Australian authorities to be protected by this minimum size of take in those waters.

6. Three hundred and thirty five fishing vessels are licensed to use a total of approximately 10,000 pots to fish for crayfish in Tasmanian waters. These vessels operate out of 22 ports around the State. Total sales realise approximately $16 million per annum at current prices in an average year.

7. At all relevant times to date, Tasmania had jurisdiction over fishing in coastal waters only to the three mile limit. However, by virtue of a Commonwealth State agreement to become effective shortly, the jurisdiction will be extended to all waters in the 'Australian Fishing Zone' (i.e. approximately 200 kms offshore) south of lat.39 degrees 12'S.

8. The State does not have the personnel to police the legal minimum size regulation by any means other than random inspection and measurement, both at sea and when the catch is brought ashore. It is not possible on inspection to determine whether a particular crayfish has been caught in Tasmanian waters or elsewhere.

9. At all material times the second respondent's business involved the year-round export of live crayfish and, to maintain its market, it was necessary for the second respondent to purchase live crayfish from inter-state during the month of October because the Tasmanian season is closed during that month.

10. The subject crayfish were purchased pursuant to an oral contract by which the respondents agreed to take an entire catch of one of the vendor's fishing vessels."

It is unnecessary that we reproduce the diagram referred to in par.3 (above). The references in par.7 are, of course, to Tasmanian waters.

7. No provision of the Constitution has been the source of greater judicial concern or the subject of greater judicial effort than s.92. That notwithstanding, judicial exegesis of the section has yielded neither clarity of meaning nor certainty of operation. Over the years the Court has moved uneasily between one interpretation and another in its endeavours to solve the problems thrown up by the necessity to apply the very general language of the section to a wide variety of legislative and factual situations. Indeed, these shifts have been such as to make it difficult to speak of the section as having achieved a settled or accepted interpretation at any time since federation. The interpretation which came closest to achieving that degree of acceptance was that embodying the criterion of operation formula which we shall subsequently examine in some detail. That formula appeared to have the advantage of certainty, but that advantage proved to be illusory. Its disadvantage was that it was concerned only with the formal structure of an impugned law and ignored its real or substantive effect. It was in vogue during the twenty-five years that began with Hospital Provident Fund Pty Ltd v. Victoria (1953) 87 CLR 1 and continued through to Beal v. Marrickville Margarine Pty Ltd (1966) 114 CLR 283 and Bartter's Farms Pty Ltd v. Todd (1978) 139 CLR 499, though the seeds of its decline were clearly visible in Pilkington v. Frank Hammond Pty Ltd (1974) 131 CLR 124 and North Eastern Dairy Co. Ltd v. Dairy Industry Authority of N.S.W. (1975) 134 CLR 559. In more recent years various members of the Court have declined to accept and apply the criterion of operation formula. This process culminated in the two decisions on the Wheat Stabilization Scheme - Clark King &Co. Pty Ltd v. Australian Wheat Board (1978) 140 CLR 120 and Uebergang v. Australian Wheat Board (1980) 145 CLR 266 - in which the members of the Court were unable to agree upon a common or a majority approach to the construction of the section. The divergence of opinion expressed in the judgments in Uebergang led Mason J. in Miller v. TCN Channel Nine Pty Ltd (1986) 161 CLR 556, at p 571 to say that "there is now no interpretation of s.92 that commands the acceptance of a majority of the Court." In the same case, Deane J. observed (at p 616) with reference to the decisions of the Judicial Committee of the Privy Council and of this Court on s.92 that:

"it is as if many voices of authority have been speaking differently at the same time with the result that, putting to one side some basic propositions, it is all but impossible to comprehend precisely what it is that authority has said."

His Honour, after reviewing and analyzing the judgments in Uebergang, went on to say (at p 618):

"Clark King and Uebergang demonstrated that the outcome of all the past cases was that the Court was unable to give authoritative guidance or to express an authoritative view about the process of reasoning which was relevant to determine the constitutional validity of a national scheme which had been adopted by the Commonwealth and all the States for the marketing of one of the nation's most important commodities."

These comments cannot be gainsaid. They identify what we see as a quite unacceptable state of affairs.

8. In these circumstances, it is not surprising that the Court is now pressed to reconsider the approximately 140 decisions of this Court and of the Privy Council which have attempted to illuminate the meaning and operation of the section. Nor is it surprising that the section should have defied judicial attempts to define enduring criteria of its application, for its enigmatic text does not state the area of immunity which it guarantees. Though the text of the section is more than familiar, it is convenient to set out the relevant parts again in order to facilitate the examination of its history to which we shall shortly turn:

"On the imposition of uniform duties of

customs, trade, commerce, and intercourse among the States, whether by means of internal carriage or ocean navigation, shall be absolutely free.

..."

9. Reference to the history of s.92 may be made, not for the purpose of substituting for the meaning of the words used the scope and effect - if such could be established - which the founding fathers subjectively intended the section to have, but for the purpose of identifying the contemporary meaning of language used, the subject to which that language was directed and the nature and objectives of the movement towards federation from which the compact of the Constitution finally emerged.

10. The differences in the external tariffs which were imposed by the several Australian colonies inevitably resulted in the imposition of restrictions on the import and export of goods between them. That was foreseen by a report of the Privy Council Committee for Trade and Plantations in 1849 which recommended that:

"there should be one tariff common to them all, so that goods might be carried from the one into the other with the same absolute freedom as between any two adjacent counties in England." (Report of the Privy Council for Trade and Plantations, British Parliamentary Papers (1849), vol.35, p 33, at p 44.)

However, after the late 1850s, when David Syme, founder of the Melbourne "Age", began his campaign for tariff protection in Victoria, protection became an important issue in Australian politics. In the last three decades of the nineteenth century, parties supporting either free trade or protection dominated the colonial Parliaments. (Samuelson, Hancock and Wallace, Economics, 2nd Aust. ed. (1975), at p 769.)

11. To create a free trade area embracing the Australian colonies it was necessary for agreement to be reached about a uniform external tariff. Differing fiscal policies represented a formidable barrier to such agreement. Until 1873 there was another obstacle to the creation of a free trade area in the form of an Imperial prohibition against the imposition by any colony of duties "upon imports from 'any particular country or place' which were not equally imposed on imports from 'all other countries and places whatsoever.'" (Quick and Garran, The Annotated Constitution of the Australian Commonwealth (1901), at p 104 ("Quick and Garran").) The prohibition, which prevented preference to intercolonial trade, gave effect to the general policy adopted by the Imperial Government that tariffs be non-discriminatory. The policy was not opposed, however, to the creation of an Australian free trade area provided that any tariff upon entry into the area was non-discriminatory. By the Australian Colonies Duties Act 1873 (Imp.), the colonies were empowered to enter into reciprocal free trade arrangements. However, the diversity of their fiscal policies remained a stumbling block. (See Quick and Garran, at pp 104-106.) In particular, the Victorian tariff appeared to have the purpose of protecting local industry, whereas the tariff of New South Wales, which favoured free trade, was fixed for the purpose of satisfying budgetary requirements. (See Patterson, The Tariff in the Australian Colonies 1856-1900 (1968), at pp 164-165.) As the 1891 Report of the South Australian Royal Commission on Intercolonial Free Trade shows (at p vi), "intercolonial free trade, on the basis of a uniform tariff", was a commonly accepted ideal. Subsequently, the first report of a Victorian Board of Inquiry in 1894 expressed the belief "that the people of Victoria are practically unanimously in favour of free-trade between the colonies", though the report described the factors which were then impeding intercolonial trade: border taxes, differential railway freights designed to secure trade for Victorian lines and ports, and stock taxes levied to keep out cattle from inter-State. (First Report of the Victorian Board of Inquiry (1894), at pp 27-29.) The report recommended that each colony be invited to join Victoria in a Customs Union. (Ibid., at p 29.) In its second report the Board noted popular support for both protection of native industries and intercolonial free trade. (Second Report of the Victorian Board of Inquiry (1895), at p x.) Notwithstanding this popular support, concrete proposals for the implementation of free trade between the separate Australian colonies languished outside the growing movement towards federation.

12. In that movement, the problem of intercolonial free trade within a uniform external tariff was, from the outset, a central question and problem: the "lion in the path", as Mr James Service (a former Premier of Victoria) described it in 1890, which federalists must either slay or be slain by. (Quick and Garran, at p 119.) Professor J.A. LaNauze has traced the development of the debate which led to the framing of s.92, the provision which was to slay the lion, in his essay "A Little Bit of Lawyers' Language: The History of 'Absolutely Free' 1890-1900" in Martin ed., Essays in Australian Federation (1969), p 57 ("LaNauze, 'Absolutely Free'"). Before the 1891 Convention assembled, Parkes proposed to a preliminary meeting of New South Wales delegates a number of resolutions, the first of which read:

"That the trade and intercourse between the Federated Colonies, whether by means of land carriage or coastal navigation, shall be free from the payment of Customs duties, and from all restrictions whatsoever, except such regulations as may be necessary for the conduct of business." (Parkes, Fifty Years in the Making of Australian History (1892), vol.II, at p 359.)

When the resolution was formally proposed to the Convention, its wording was changed:

"That the trade and intercourse between the Federated Colonies, whether by means of land carriage or coastal navigation, shall be absolutely free." (LaNauze, "Absolutely Free", at p 64 (quoting Convention Debates (Sydney 1891), at p 11).)

13. Below, we trace the transition of this clause into s.92 of the Constitution. At this stage, we note that "intercourse" appeared in the words of the provision as a distinct and independent concept the freedom of which was guaranteed from the very beginning. It was not, as has sometimes been suggested (see, e.g., per Dixon J., Bank of N.S.W. v. The Commonwealth ("the Banking Case") (1948) 76 CLR 1, at p 381), added as some kind of afterthought to "trade" and "commerce". As will be seen, it was the word "commerce" which was last added to complete the phrase "trade, commerce and intercourse" in the section. The relevance of that for present purposes is that it precludes the approach that the content of the guarantee of freedom of inter-State intercourse must be governed by the pre-existing content of a guarantee of freedom of inter-State trade and commerce into which it was introduced. The notions of absolutely free trade and commerce and absolutely free intercourse are quite distinct and neither the history of the clause nor the ordinary meaning of its words require that the content of the guarantee of freedom of trade and commerce be seen as governing or governed by the content of the guarantee of freedom of intercourse. We shall return to the topic of intercourse and the question of its relationship with trade and commerce later in these reasons.

14. In the debate that followed the introduction of the clause to the 1891 Convention, Barton said that it was:

"a matter of course that at some period, and at an early period, after the federation of the colonies, the trade and intercourse, whether by way of land carriage or coastal navigation, shall be absolutely free." (Convention Debates (Sydney 1891), at p 44.)

Griffith explained to the Constitutional Committee of the Convention that:

"so soon as uniform duties are imposed, the trade of the commonwealth by any means is to be absolutely free. Every member of the Convention knew that a provision of that nature must be in the constitution." (Convention Debates (Sydney 1891), at p 255.)

In the draft Bill adopted by the Convention in April 1891, the clause emerged as cl.8 of Ch.IV:

"So soon as the Parliament of the Commonwealth

has imposed uniform duties of Customs, trade and intercourse throughout the Commonwealth, whether by means of internal carriage or ocean navigation, shall be absolutely free." (Draft Bill to Constitute the Commonwealth of Australia, Ch.IV, cl.8 (quoted in Convention Debates (Sydney 1891), at p clxxxiii).)

Prior to that adoption the delegates had agreed that the federal Parliament should have power to make laws with respect to "The regulation of Trade and Commerce with other Countries, and among the several States (.)" (Ibid., Ch.I, cl.52(1).) Professor F.R. Beasley has commented that:

"It did not occur to any of the delegates that there might be an antinomy between clause 52(1) and clause 8 of Chapter IV, simply because to them clause 8 contained a guarantee of interstate free-trade and nothing more; subject to the observance of that principle the federal parliament was to control interstate trade and commerce." (Beasley, "The Commonwealth Constitution: Section 92 - Its History in the Federal Conventions" (1948-1950) 1 Annual Law Review (W.A.) 97, at p 100 ("Beasley, 'Convention History'").)

Professor LaNauze conjectures that the phrase absolutely free trade was understood in 1891 and for some time thereafter to connote not only freedom from border customs duties to protect local industry but also freedom from border customs duties which were not protectionist in purpose and were thought to be compatible with free trade. (LaNauze, "Absolutely Free", at pp 76-77.) Whether that was so or not, it is clear that all border customs duties were to be abolished. Beyond that, the records of the movement towards federation, to some of which we now refer, do not establish that the notion of absolutely free trade and commerce had any precise settled contemporary content.

15. At the Adelaide meeting of the Federal Convention in early 1897, the 1891 clause was inserted virtually unaltered as cl.89 of a draft Bill. Barton, as Leader of the Convention, expressed the view that the 1891 clause "should be as absolute in its terms as possible. If there is to be any exception to absolute freedom of trade and intercourse from end to end of the Commonwealth it should be expressed by way of exception." (Ibid., at pp 80-81 (quoting Convention Debates (Adelaide 1897), at p 876).) O'Connor had no doubts about the necessity for the clause. But Isaacs said that the clause "goes much further than it is intended, and there are some expressions which, taken in connection with other portions of the Bill, are extremely large and alarming." (Convention Debates (Adelaide 1897), at p 1141.) "Taken literally", he said, "it means 'free of everything, even of a licence'." (Ibid., at p 1142.)

16. Before the 1897 Convention resumed its sitting in September of that year, Griffith, by now Chief Justice of Queensland, prepared some notes on the draft constitution for the Queensland Government. Apparently accepting the misgivings which Isaacs had expressed as to the breadth of the clause, he wrote:

"I venture, before passing from this subject,

to suggest a doubt whether the words of s.89 (which are the same as in the Draft Bill of 1891) are, in their modern sense, quite apt to express the meaning intended to be conveyed." (LaNauze, "Absolutely Free", at p 84 (quoting Griffith, "Notes on the Draft Federal Constitution Framed by the Adelaide Convention of 1897", Queensland Legislative Council Journals (1897), vol.47, pt.1, at p 12 (emphasis added)).)

He went on to explain that "intended" meaning:

"It is, clearly, not proposed to interfere with the internal regulation of trade by means of licenses, nor to prevent the imposition of reasonable rates on State Railways. I apprehend that the real meaning is that the free course of trade and commerce between the different parts of the Commonwealth is not to be restricted or interfered with by any taxes, charges, or imposts. Would it not be better to use these or similar words? If it is also intended to prohibit such interference by the imposition of preferential or differential rates on railways or rivers, suitable words should be added. The following are submitted for consideration ..." (Ibid. (emphasis original).)

17. When the Convention resumed, Isaacs again pointed to the width of cl.89, and Barton and O'Connor accepted that the words of the clause were too general. That seems to have been the view also of Higgins. When one of the delegates expressed a fear that the clause as drafted might prevent laws prohibiting the passing of cattle across State borders or the introduction of diseased vines into South Australia, Barton undertook to redraft the clause to read:

"So soon as uniform duties of customs have

been imposed, trade and intercourse throughout the commonwealth is not to be restricted or interfered with by any taxes, charges, or imposts." (Beasley, "Convention History", at p 105 (quoting Convention Debates (Sydney 1897), at p 1064).)

In the event this amendment was not made, but Isaacs was able to secure the substitution of the words "between the States" for "throughout the Commonwealth". The purpose of the amendment was to ensure that the guarantee to be given by s.92 did not extend beyond inter-State free trade. Thus Dr Cockburn (of the South Australian delegation) supported the insertion of some limitation in the clause:

"not only with the view of seeing that the clause goes no further than is desirable in the restriction of the states, but also in order that it shall not tie the hands of the Commonwealth itself, but shall allow it to impose such restrictions and regulations of trade throughout the Commonwealth as may, from time to time, in the interests of the people, appear to be necessary." (Ibid., at p 107 (quoting Convention Debates (Melbourne 1898), vol.I, at p 1020).)

Dr Quick thought the amendment necessary lest the wider words prohibited local licensing provisions which "are reasonable regulations of trade upon the arrival of goods, wares, and merchandise within the state territories." (Convention Debates (Melbourne 1898), vol.I, at p 1017.) Barton agreed, saying that what was wanted was "Free passage across the frontier and freedom from all preferences." (Ibid.) However, when Isaacs moved to add after the word "free" the words "from taxation or restriction", the amendment was defeated, Reid observing that "the moment we begin to define we have to define what the definition means, and then we involve everything in the necessary amount of confusion." (Convention Debates (Melbourne 1898), vol.II, at p 2367.) Deakin shared the misgivings of Isaacs. Noting that the clause had no counterpart in the United States Constitution, he said:

"So far as (the words of cl.89) imply the removal of everything in the nature of an obstruction placed in the way of intercolonial trade by any state they have our hearty approval. The only question is whether the words in their present connexion and novel combination do not go further than the removal of obstructions, and imply the power to interfere in regard to matters which may be considered to affect absolute freedom of trade and intercourse." (Ibid., at p 2373.)

Deakin secured Barton's agreement to examine the language of cl.89 again, but it seems that the rhetoric of the provision, which Barton acknowledged to be "the language of three lawyers", proved so powerful that it passed virtually unchanged into the Constitution. In the course of making drafting amendments the word "commerce" was inserted after "trade" in cl.89 by a drafting committee, but that amendment was not debated before acceptance. That cl.89 was intended to eliminate all border customs duties is undoubted. That it might create other immunities from government control was foreseen, though there is no suggestion that it was intended to prevent the enactment of what Parkes had described in his original draft as regulations "necessary for the conduct of business." Indeed, before Barton undertook to limit cl.89 to restriction or interference with trade throughout the Commonwealth by "any taxes, charges or imposts", he had expressed concern that the Commonwealth Parliament should not be "denuded of the powers it would otherwise have." (LaNauze, "Absolutely Free", at p 88 (quoting Convention Debates (Sydney 1897), at p 1053).) Higgins was anxious lest the clause should deprive the States of power to prohibit the introduction of diseased animals and plants. (Ibid. (quoting Convention Debates (Sydney 1897), at pp 1063-1064).) But the Conventions did not define what regulations were to be permitted and what regulations were to be forbidden. Subject to an immaterial variation of the introductory words, the amended cl.89 was adopted, without further elucidation or qualification to deal with its acknowledged obscurity and foreseen difficulty of application, as s.92 of the Constitution. The delimitation of the precise scope and effect of the guarantee was left as an unresolved task for the future.

18. The purpose of the section is clear enough: to create a free trade area throughout the Commonwealth and to deny to Commonwealth and States alike a power to prevent or obstruct the free movement of people, goods and communications across State boundaries. Free trade was understood to give "equality of trade", which Mr McMillan (of the New South Wales delegation) asserted to be "one grand principle involved in the whole of our federation". (Convention Debates (Melbourne 1898), vol.II, at p 2345.) The enemies of free trade were border taxes, discrimination, especially in railway freight rates, and preferences. Higgins pointed out: "what will be the use of talking about free-trade between the states, and diminishing the friction upon the borders, if we do not provide against a war of railway rates?" (Ibid., at p 1268.) To complement the s.92 prohibition against discriminatory laws which prevented the free flow of trade, ss.99 and 102 were introduced to prohibit preferences.

19. The difficulties which inhere in s.92 flow from its origin as a rallying call for federationists who wanted to be rid of discriminatory burdens and benefits in trade and who would not suffer that call to be muffled by nice qualifications. By refraining from defining any limitation on the freedom guaranteed by s.92, the Conventions and the Constitution which they framed passed to the courts the task of defining what aspects of inter-State trade, commerce and intercourse were excluded from legislative or executive control or regulation. Rich J. in James v. Cowan (1930) 43 CLR 386, at p 422 lamented:

"Some hint at least might have been dropped, some distant allusion made, from which the nature of the immunity intended could afterwards have been deduced by those whose lot it is to explain the elliptical and expound the unexpressed."

20. The creation of a limitation where none was expressed and where no words of limitation were acceptable was a task which, having regard to the diverse and changing nature of inter-State trade, commerce and intercourse, was likely to produce a variety of propositions. And so it has. Sir Robert Garran contemplated that a student of the first fifty years of case law on s.92 might understandably "close( ) his notebook, sell( )his law books, and resolve( ) to take up some easy study, like nuclear physics or higher mathematics." (LaNauze, "Absolutely Free", at p 58 (quoting Garran, Prosper the Commonwealth (1958), at p 415).) Some thirty years on, the student who is confronted with the heightened confusion arising from the additional case law ending with Miller v. TCN Channel Nine would be even more encouraged to despair of identifying the effect of the constitutional guarantee.

21. Attention to the history which we have outlined may help to reduce the confusion that has surrounded the interpretation of s.92. That history demonstrates that the principal goals of the movement towards the federation of the Australian colonies included the elimination of intercolonial border duties and discriminatory burdens and preferences in intercolonial trade and the achievement of intercolonial free trade. As we have seen, apart from ss.99 and 102, that goal was enshrined in the various draft clauses which preceded s.92 and ultimately in the section itself.

22. The expression "free trade" commonly signified in the nineteenth century, as it does today, an absence of protectionism, that is, the protection of domestic industries against foreign competition. Such protection may be achieved by a variety of different measures - e.g., tariffs that increase the price of foreign goods, non-tariff barriers such as quotas on imports, differential railway rates, subsidies on goods produced and discriminatory burdens on dealings with imports - which, alone or in combination, make importing and dealings with imports difficult or impossible. Sections 92, 99 and 102 were apt to eliminate these measures and thereby to ensure that the Australian States should be a free trade area in which legislative or executive discrimination against inter-State trade and commerce should be prohibited. Section 92 precluded the imposition of protectionist burdens: not only inter-State border customs duties but also burdens, whether fiscal or non-fiscal, which discriminated against inter-State trade and commerce. That was the historical object of s.92 and the emphasis of the text of s.92 ensured that it was appropriate to attain it.

23. The two elements in s.92 which provide an arguable foundation for giving the section a wider operation with respect to trade and commerce than that foreshadowed by its history are the reference to "intercourse" and the emphatic words "absolutely free". A constitutional guarantee of freedom of inter-State intercourse, if it is to have substantial content, extends to a guarantee of personal freedom "to pass to and fro among the States without burden, hindrance or restriction". (Gratwick v. Johnson (1945) 70 CLR 1, at p 17.) If s.92 were to be viewed in isolation from its history, the attachment of the guarantee to trade and commerce along with intercourse might suggest that inter-State trade and commerce must also be left without any restriction or even regulatory burden or hindrance. That is not to suggest that every form of intercourse must be left without any restriction or regulation in order to satisfy the guarantee of freedom. For example, although personal movement across a border cannot, generally speaking, be impeded, it is legitimate to restrict a pedestrian's use of a highway for the purpose of his crossing or to authorize the arrest of a fugitive offender from one State at the moment of his departure into another State. It is not necessary now to consider the content of the guarantee of freedom of various forms of inter-State intercourse. Much will depend on the form and circumstance of the intercourse involved. But it is clear that some forms of intercourse are so immune from legislative or executive interference that, if a like immunity were accorded to trade and commerce, anarchy would result. However, it has always been accepted that s.92 does not guarantee freedom in this sense, that is, in the sense of anarchy. (See, e.g., Duncan v. Queensland (1916) 22 CLR 556, at p 573; Freightlines &Construction Holding Ltd v. New South Wales (1967) 116 CLR 1, at pp 4-5; (1968) AC 625, at p 667.) Once this is accepted, as it must be, there is no reason in logic or commonsense for insisting on a strict correspondence between the freedom guaranteed to inter-State trade and commerce and that guaranteed to inter-State intercourse.

24. What we have just said is likewise an answer to the objection that the words "absolutely free" are inconsistent with any interpretation of the section that concedes to inter-State trade no more than a freedom from burdens of a limited kind, whether discriminatory or otherwise. Implicit in the rejection of the notion that the words "absolutely free" are to be read in the abstract as a guarantee of anarchy is recognition of the need to identify the kinds or classes of legal burdens, restrictions, controls or standards from which the section guarantees the absolute freedom of inter-State trade and commerce. As we have seen, the failure of the section to define expressly what inter-State trade and commerce was to be immune from is to be explained by reference to the dictates of political expediency, not by reference to a purpose of prohibiting all legal burdens, restrictions, controls or standards. In that context, to construe s.92 as requiring that inter-State trade and commerce be immune only from discriminatory burdens of a protectionist kind does not involve inconsistency with the words "absolutely free": it is simply to identify the kinds or classes of burdens, restrictions, controls and standards from which the section guarantees absolute freedom.

25. The task which has confronted the Court is to construe the unexpressed; to formulate in legal propositions, so far as the text of s.92 admits, the criteria for distinguishing between the burdens (including restrictions, controls and standards) to which inter-State trade and commerce may be subjected by the exercise of legislative or executive power and the burdens from which inter-State trade and commerce is immune. The history of s.92 points to the elimination of protection as the object of s.92 in its application to trade and commerce. The means by which that object is achieved is the prohibition of measures which burden inter-State trade and commerce and which also have the effect of conferring protection on intra-State trade and commerce of the same kind. The general hallmark of measures which contravene s.92 in this way is their effect as discriminatory against inter-State trade and commerce in that protectionist sense. There can be no doubt that s.92 guarantees absolute freedom of inter-State trade and commerce from all inter-State border duties and other discriminatory fiscal charges levied on transactions of inter-State trade and commerce. Indeed, the reference in each paragraph of the section to uniform duties of customs creates the impression that the provision is directed to fiscal charges and burdens. This impression is reinforced by the context provided by the surrounding provisions, ss.89-91 and ss.93-95. All these provisions deal with fiscal charges and burdens, appearing, as they do, in Ch.IV of the Constitution which is headed "Finance and Trade". But the section cannot be easily confined to such matters because protection against inter-State trade and commerce can be secured by non-fiscal measures.

26. In relation to both fiscal and non-fiscal measures, history and context alike favour the approach that the freedom guaranteed to inter-State trade and commerce under s.92 is freedom from discriminatory burdens in the protectionist sense already mentioned. That approach accords with the view of the section expressed by Gavan Duffy J. in his dissenting judgment in W. &A. McArthur Ltd v. Queensland (1920) 28 CLR 530. In the course of rejecting the argument that s.92 did not bind the Commonwealth because, if it did, it would negate the legislative power with respect to inter-State trade and commerce conferred by s.51(i), his Honour said (at pp 567-568):

"The vice in the suggested argument lies in assuming that sec.92 forbids every interference with inter-State trade and commerce; and this brings me to a consideration of the second question, namely, what is the exact nature of the freedom which the section vindicates? There are few epithets in the English language which extend over a larger area of meaning than the word 'free' or vary more with the object qualified. The word 'free' is often used to qualify the word 'trade', and sometimes, though not so often, to qualify the word 'commerce'. When used with respect to trade and commerce among Sovereign States it ordinarily means no more than unrestricted by tariff or customs duties; it more rarely means free from all artificial restrictions or restraints conditioned on the international character of the trade or commerce; but freedom of trade and commerce never means freedom from regulation or control, or complete immunity from municipal law with respect to the acts which constitute such trade or commerce. No civilized nation has ever tolerated a trade or commerce, whether foreign or domestic, which was not subject to regulation and control both with respect to the method of carrying it on, and the general conduct of those who carried it on. It could not be contended that a treaty guaranteeing freedom of trade and commerce between two nations would enable the subjects of each, while carrying on such trade and commerce within the territory of the other, to ignore either the municipal laws regulating the general conduct of individuals within the State, or those prescribing the general conditions applicable to trade or commerce within the State. All that could be demanded under such a treaty would be equality of trading rights for the subjects of each nation in the territory of the other. I see no reason for attributing to the word 'free' in sec.92 any larger meaning than that which it naturally bears in the collocation in which it is there used. Indeed, to do so would immediately create an inconsistency between sec.92 and sec.51(i), for it would leave no room for the operation of the latter."

27. Subsequent authority vindicated Gavan Duffy J. in the central point of his dissent - that s.92 binds the Commonwealth. The Privy Council left that question open in James v. Cowan (1932) 47 CLR 386, at pp 397-398; AC 542, at p 560. Then in James v. The Commonwealth (1935) 52 CLR 570, Dixon J. (at pp 591-593) and Evatt and McTiernan JJ. (at pp 596-602) expressed the opinion that previous authority to the effect that the section does not bind the Commonwealth was mistaken but should not, in the circumstances of the particular proceedings, be overruled. The Privy Council, in allowing an appeal from the decision in that case, overruled McArthur and held that s.92 binds the Commonwealth as well as the States. (James v. The Commonwealth (1936) 55 CLR 1, at p 61; AC 578, at p 633.) On this point the decision in James v. The Commonwealth has prevailed to this day.

28. In reaching that conclusion, the Privy Council, in a judgment delivered by Lord Wright M.R., construed the text of s.92 in the light of other provisions of the Constitution. The section does not except the Commonwealth. However, their Lordships were concerned, as Gavan Duffy J. had been in McArthur, to identify the scope and extent of the freedom guaranteed in order to reject the argument that there was an antinomy between s.92 and s.51(i). Much of what their Lordships said on that score is plainly correct. Thus they observed (at p 56; pp 627-628 of AC):

"Free trade means in ordinary parlance freedom from tariffs.

Free in sec.92 cannot be limited to freedom in

the last-mentioned sense. There may at first sight appear to be some plausibility in that idea, because of the starting point in time specified in the section, because of the sections which surround sec.92 and because the proviso to sec.92 relates to customs duties. But it is clear that much more is included in the term; customs duties and other like matters constitute a merely pecuniary burden; there may be different and perhaps more drastic ways of interfering with freedom, as by restriction or partial or complete prohibition of passing into or out of the State.

Nor does 'free' necessarily connote absence of

discrimination between inter-State and intra-State trade. No doubt conditions restrictive of freedom of trade among the States will frequently involve a discrimination; ..."

But their Lordships went on to say that discrimination was not essential or decisive, asserting that an Act may contravene s.92 though it operates in restriction of both intra-State and inter-State trade. They gave the example of a compulsory seizure of goods, including some intended for intra-State trade and others intended for inter-State trade. At a later stage (at p 59; p 630 of AC) they instanced a compulsory acquisition of goods as a prohibited burden, "if in truth the expropriation is directed wholly or partially against inter-State trade in the goods, that is, against selling them out of the State ..." Their Lordships stated that the freedom guaranteed by the section was "freedom as at the frontier" (at p 58; p 630 of AC) and explained this conception of the constitutional guarantee by saying that it prohibited restraints and burdens on, and interference with, the free passage of goods among the States (at pp 58-59; pp 630-631 of AC).

29. On one view of what their Lordships said, there is little difference between the notion of freedom as at the frontier and the notion of freedom from burdens of a discriminatory kind to which, in our view, the history and text of s.92 point. On this footing the reasons given in James v. The Commonwealth for holding that s.92 binds the Commonwealth would seem to have equal force in a context in which s.92 is given the interpretation which reflects its history. However, later cases treated James v. The Commonwealth as authority for the proposition that burdens other than fiscal or discriminatory burdens fell within the constitutional prohibition. So understood, James v. The Commonwealth provided support for the development of the doctrine of criterion of operation. It is now difficult to criticize that treatment of the judgment because Lord Wright M.R. subsequently conceded that James v. The Commonwealth endorsed an interpretation of the section which went beyond a prohibition of fiscal burdens, including indirect means of fiscal protection. See Lord Wright of Durley, "Section 92 - A Problem Piece" (1954) 1 Sydney Law Review 145, at pp 152-155. We say "conceded" for the reason that his Lordship expressed in that essay (at p 155) the view that the judgment in James v. The Commonwealth had been defective in that it required "supplement or correction" so as to limit the freedom to fiscal freedom.

30. The impact that the interpretation favoured by history and context would have on the Commonwealth's legislative power under s.51(i) was not closely explored in argument in the present case. For this reason alone we would be reluctant to attempt to express an exhaustive opinion upon that topic, even if it were possible to do so, or to identify the precise effects of the interaction between ss.51(i), 90, 92, 99 and 102, a matter that has not been examined in the decided cases. It is, however, necessary for present purposes that we make some general reference to the relationship between s.51(i) and s.92 for the reason that the guarantee of the absolute freedom of inter-State trade and commerce contained in s.92 must be read in the context of the express conferral of legislative power with respect to such trade and commerce which is contained in s.51(i).

31. We do not accept the explanation suggested in Grannall v. Marrickville Margarine Pty Ltd (1955) 93 CLR 55, at pp 77-78, that the key to the relationship between s.51(i) and s.92 is to be found in the presence of the words "with respect to" in the opening words of s.51(i). The consequence of reconciling the two constitutional provisions in that way is to treat the legislative power conferred by s.51(i) as essentially peripheral in character. In our view, any acceptable appreciation of the interrelationship between the two sections must recognize that s.51(i) is a plenary power on a topic of fundamental importance. That being so, the express conferral of legislative power with respect to inter-State trade and commerce lends some support for the view that s.92 should not be construed as precluding an exercise of legislative power which would impose any burden or restriction on inter-State trade and commerce or on an essential attribute of that trade and commerce. Obviously, the provision conferring legislative power (s.51(i)) and the provision restricting the exercise of legislative power (s.92) sit more easily together if the latter is construed as being concerned with precluding particular types of burdens, such as discriminatory burdens of a protectionist kind. That is not to suggest that, if s.92 were construed in that more limited sense of being concerned with discriminatory burdens upon inter-State trade and commerce, the relationship between s.51(i) and s.92 would be freed from all difficulty. Upon analysis however, the remaining difficulty would be largely superficial. Certainly it would not be any greater and it might be less than the difficulty of the relationship between s.51(i) and s.92 which is attendant upon other arguable constructions of the constitutional guarantee.

32. The above concept of discrimination commonly involves the notion of a departure from equality of treatment. It does not follow that every departure from equality of treatment imposes a burden or would infringe a constitutional guarantee of the freedom of inter-State trade and commerce from discriminatory burdens. Nor does it follow that to construe s.92 as guaranteeing the freedom of inter-State trade and commerce from discriminatory burdens would mean that inter-State trade and commerce was rendered immune from any regulation which did not affect like intra-State trade. Such regulation might not constitute a burden at all. Even if it did, it might not be discriminatory in the sense to which we have referred. In that regard, experience teaches that Commonwealth legislation is often directed to the regulation of all trade within the Commonwealth's legislative reach (e.g., the Trade Practices Act 1974 (Cth)) or to the regulation of a particular trade to the extent that it is within that reach. There is far less likelihood that such regulatory legislation will properly be characterized as imposing a discriminatory burden on the trade and commerce with which it deals than is the case with State legislation which singles out inter-State trade and commerce for particular treatment. That is not to deny that a Commonwealth law which is regulatory on its face may operate so as to discriminate against inter-State trade and commerce. Even a law which applies indiscriminately to all trade and commerce within the reach of Commonwealth legislative power might, in some circumstances, impose a discriminatory burden upon inter-State trade and commerce. Plainly, however, the construction which treats s.92 as being concerned to guarantee the freedom of inter-State trade and commerce from discriminatory burdens does not involve the consequence that the grant of legislative power with respect to inter-State trade and commerce is deprived of its essential content.

33. The concept of discrimination in its application to inter-State trade and commerce necessarily embraces factual discrimination as well as legal operation. A law will discriminate against inter-State trade or commerce if the law on its face subjects that trade or commerce to a disability or disadvantage or if the factual operation of the law produces such a result. A majority of the Court (Barwick C.J., Stephen, Mason and Jacobs JJ.) so held in North Eastern Dairy, at pp 588-589, 602, 606-607, 622-623. And the more recent decisions proceed upon that footing. The Court looks to the practical operation of the law in order to determine its validity. Once this is recognized, it is difficult, indeed impossible, to deny that a Commonwealth law dealing with inter-State trade could operate in such a way as to work an impermissible discrimination against inter-State trade, in particular the trade across State borders originating in a particular State. For reasons already given, we should not venture into this topic in any depth. However, we would add two comments. The first is that the possibility of factual discrimination by a s.51(i) law applying only in respect of inter-State trade or commerce may well be eliminated in the context of a national scheme constituted by complementary Commonwealth and State law applying, by virtue of their combined operation, to all trade or commerce of the relevant kind. The second is that s.92 will obviously operate to preclude discriminatory burdens being imposed upon inter-State trade or commerce by Commonwealth laws enacted pursuant to other general heads of legislative power (e.g., trading corporations).

34. Despite the strength of the considerations supporting the view that the "trade and commerce" provision of s.92 is directed to inter-State border duties and other burdens of a discriminatory kind, we would be reluctant to embrace it if a competing construction had attained the status of a settled interpretation of the section. In the interests of certainty, even in matters of constitutional interpretation, the Court does not readily discard or depart from settled principle. (Cf. Bartter's Farms, at p 510.) As we have mentioned, the doctrine embodying the criterion of operation formula came closest to achieving that status. However, in the ultimate analysis the doctrine failed to command the acceptance of the Court for reasons which we shall state shortly. The doctrine is important, not merely by reason of the degree of acceptance that it attracted at one time, but also because in some respects it offered inter-State trade more extensive protection than other interpretations of s.92 which have competed strongly for acceptance.

35. The doctrine, which had its origins in the judgment of Dixon J. in O. Gilpin Ltd v. Commissioner for Road Transport and Tramways (N.S.W.) (1935) 52 CLR 189, at pp 205-206, was expressed by Dixon C.J. in Hospital Provident Fund, at pp 17-18, and restated in later decisions such as Grannall v. Marrickville Margarine Pty Ltd, at p 78, and Mansell v. Beck (1956) 95 CLR 550, at pp 564-565. The thrust of the criterion of operation was to make inapplicable to inter-State trade, commerce and intercourse any law which "takes a fact or an event or a thing itself forming part of trade commerce or intercourse, or forming an essential attribute of that conception ... and the law proceeds, by reference thereto or in consequence thereof, to impose a restriction, a burden or a liability" which constitutes "a real prejudice or impediment to inter-State transactions ..." The words quoted are taken from the formulation in Hospital Provident Fund, at p 17.

36. The doctrine is highly artificial. It depends on the formal and obscure distinction between the essential attributes of trade and commerce and those facts, events or things which are inessential, incidental, or, indeed, antecedent or preparatory to that trade and commerce. This distinction mirrors another distinction, equally unsatisfactory, between burdens which are direct and immediate (proscribed) and those that are indirect, consequential and remote (not proscribed). What is more, the first limb of the doctrine as enunciated looks to the legal operation of the law rather than to its practical operation or its economic consequences. The emphasis on the legal operation of the law gave rise to a concern that the way was open to circumvention by means of legislative device. To counter this possibility the doctrine was expressed to extend to circuitous devices but this extension of the doctrine seems itself to have turned on the legal operation of the law. At any rate, no law has been held not to apply to inter-State trade on the ground that it burdened the trade by means of a circuitous device. (See Miller v. TCN Channel Nine, at pp 575-576.)

37. With the advantage of hindsight it is now obvious that such an artificial formula would create problems in the attempt to apply it to a variety of legislative situations. In a context in which the doctrine was seen as supporting a constitutional guarantee of the right of the individual to engage in inter-State trade, it scarcely seemed to make sense to say that production for the purpose of trading inter-State with the product (Grannall v. Marrickville Margarine Pty Ltd; Beal v. Marrickville Margarine Pty Ltd) and importation of aircraft with which to engage in inter-State air transportation (Reg. v. Anderson; Ex parte Ipec-Air Pty Ltd (1965) 113 CLR 177; Ansett Transport Industries (Operations) Pty Ltd v. The Commonwealth (1977) 139 CLR 54) fell outside the constitutional protection on the ground that the relevant activities were not essential attributes of inter-State trade. The same comment may be made about Damjanovic &Sons Pty Ltd v. The Commonwealth (1968) 117 CLR 390 where a tax on the keeping of hens, kept for producing eggs for inter-State trade in eggs, was not seen as a tax on an essential attribute of that trade notwithstanding that the criterion of operation of the law imposing the tax was the purpose of selling the eggs produced in trade which, in the particular case, was inter-State trade. In each of these cases the legislation affected inter-State trade in a substantial way, yet, because the effect was indirect or consequential, s.92 had no application. A similar result ensued in Mansell v. Beck where the legislation prohibited the sale of a ticket in a foreign lottery and the acceptance of money in respect of the purchase of the ticket, again on the ground that the legislation did not select an attribute of inter-State trade, commerce or intercourse as the basis of its operation. (See the examination of these cases in Miller v. TCN Channel Nine, at pp 572-574, 622-625.)

38. Although the examples may be multiplied, there is no point in protracting the discussion except to refer to what Dixon C.J., McTiernan and Webb JJ. had to say in Hughes and Vale Pty Ltd v. New South Wales (No. 2) (1955) 93 CLR 127, at pp 162-163. The passage illustrates the complexities which so frequently arose in the endeavour to identify essential attributes and the difficulties encountered when legislation operating on a so-called incident of trade seriously affects inter-State trade. In truth the history of the doctrine is an indication of the hazards of seeking certainty of operation of a constitutional guarantee through the medium of an artificial formula. Either the formula is consistently applied and subverts the substance of the guarantee; or an attempt is made to achieve uniformly satisfactory outcomes and the formula becomes uncertain in its application.

39. What we have said explains some of the reasons why the criterion of operation ceased to command the acceptance of members of the Court, with the consequence that we do not see ourselves as constrained by authority to accept it. There are other features of the doctrine which compel its rejection as an acceptable interpretation of s.92. First, in some respects the protection which it offers to inter-State trade is too wide. Instead of placing inter-State trade on an equal footing with intra-State trade, the doctrine keeps inter-State trade on a privileged or preferred footing, immune from burdens to which other trade is subject. Finemores Transport Pty Ltd v. New South Wales (1978) 139 CLR 338 is a striking example. There s.84G of the Stamp Duties Act 1920 (N.S.W.) imposed an ad valorem duty on the certification of registration of a motor vehicle calculated upon the value of the vehicle. It was a duty imposed without distinction or discrimination on all those who registered motor vehicles, whether the vehicle was engaged or intended to be engaged in inter-State trade or not. Yet the Court held that the duty could not be levied upon a certification of registration in respect of a vehicle used or intended to be used exclusively in the course of, or for the purpose of, inter-State trade. The doctrine created protectionism in reverse. Both Mason J. and Deane J. have noted that s.92 had become in some circumstances a source of privileged and preferential treatment for that trade to the detriment of the local trade. (Finemores Transport, at p 352; Miller v. TCN Channel Nine, at pp 618-619.)

40. At this point it is convenient to mention the contrast between the result reached in Finemores Transport and that reached in the road tax cases, of which Hughes and Vale (No. 2) may be taken as the leading example. The contrast shows that the doctrine failed when it was applied to fiscal charges. It applied to the fiscal charge in Finemores Transport but it evoked the recognition of an exception for road taxes to which s.92 did not apply when the charge was fixed as reasonable compensation for the use of the highway and a contribution to the wear and tear which the vehicle might be expected to make.

41. The second major reason for rejecting the doctrine as an acceptable interpretation of s.92 is that it fails to make any accommodation for the need for laws genuinely regulating intra-State and inter-State trade. The history of the movement for abolition of colonial protection and for the achievement of intercolonial free trade does not indicate that it was intended to prohibit genuine non-protective regulation of intercolonial or inter-State trade. The criterion of operation makes no concession to this aspect of the section's history. In the result there has been a continuing tension between the general application of the formula and the validity of laws which are purely regulatory in character. Judged by reference to the doctrine, the validity of a regulatory law hinged on whether it imposed a burden on an essential attribute or on a mere incident of trade or commerce. To say the least of it, this was not an appropriate criterion of validity of a regulatory law divorced, as it is, from considerations of the protectionist purpose or effect of the impugned law. It is not surprising that the Court found it necessary to develop a concept of a permissible "burden" which was associated with a somewhat ill-defined notion of what is legitimate regulation in an ordered society. (See Hughes and Vale (No.2), at pp 217-219; Samuels v. Readers' Digest Association Pty Ltd (1969) 120 CLR 1, at pp 19-20; North Eastern Dairy, at pp 614-615, 621-622; Permewan Wright Consolidated Pty Ltd v. Trewhitt (1979) 145 CLR 1, at p 26.) The problems which have arisen in this area culminating in Clark King and Uebergang are the inevitable consequence of any interpretation of s.92 which offers protection to inter-State trade going beyond immunity from discriminatory burdens having a protectionist purpose or effect.

42. We should refer, if only briefly, to the comments made by Dixon J. in the Banking Case when his Honour gave his reasons for not accepting the interpretation of the trade and commerce provision in s.92 which would limit it to measures imposing burdens of a discriminatory kind. He conceded (at p 386) that that interpretation "at one time proved attractive and it had strong support." However, he pointed out that by 1948 it seemed to have lost all support. His Honour then referred to the comment of Barton J. in Duncan v. Queensland, at p 585 that if the restriction of inter-State trade is included in the direct operation of an Act the fact that intra-State trade is also more or less affected does not diminish the restriction and that if the State legislature could make a burden apply alike to all the people of Australia as well as the people of the State, still the considerations of the case would not differ. This comment does not answer, and was not intended to answer, the argument that s.92 was directed to guarantee freedom from measures imposing burdens of a discriminatory kind. Barton J. stated the view he took of the section at a later stage in his judgment (at p 587), concluding that the section could be paraphrased in the terms stated by Griffith C.J. in New South Wales v. The Commonwealth (1915) 20 CLR 54, at p 68: "Every owner of goods shall be at liberty to make such contracts for the transportation of goods from one State to another as he thinks fit without interference by law." The comment of Barton J. (at p 585) is consistent with that view of the section, but it provides no independent answer to the argument in favour of an interpretation which proscribes measures imposing burdens of a discriminatory kind. Dixon J. then referred (the Banking Case, at p 386) to the rejection of that interpretation by the Privy Council in James v. Cowan, at pp 393-394, and stated that Lord Wright rejected it in James v. The Commonwealth, at p 56; p 628 of AC when his Lordship said in a remark, which we have already referred to, that an Act "may contravene sec.92 though it operates in restriction both of intra-State and of inter-State trade." The remark, like that of Barton J. in Duncan, though inconsistent with the interpretation, is not a reason for rejecting it.

43. In the course of the discussion of s.92 in his judgment in the Banking Case (at pp.386-387), Dixon J. drew support from the opinion of Frankfurter J. in Freeman v. Hewit (1946) 329 US 249 where his Honour said of the commerce clause in the United States Constitution:

"This limitation on State power ... does not merely forbid a State to single out interstate commerce for hostile action. A State is also precluded from taking any action which may fairly be deemed to have the effect of impeding the free flow of trade between States. It is immaterial that local commerce is subjected to a similar encumbrance. It may commend itself to a State to encourage a pastoral instead of an industrial society. That is its concern and its privilege. But to compare a State's treatment of its local trade with the exertion of its authority against commerce in the national domain is to compare incomparables." (Freeman v. Hewit, at p 252.)

Dixon J. then made the point:

"It would be surprising if the Australian

express enactment were less effective and narrower than the American implication which it was intended, as a positive provision, to replace." (The Banking Case, at p 387.)

44. We have not made earlier reference to the interpretation of the United States commerce clause because we do not consider that its interpretation provides any assistance in the elucidation of the meaning of s.92. In so far as the context of earlier events and provisions is concerned, that meaning turns very largely on the history of the Australian federal movement and not at all on the commerce clause and its interpretation at the hands of the Supreme Court of the United States. But it should be mentioned, in the light of Dixon J.'s reliance on Freeman v. Hewit, that in two decisions in the last quarter of the nineteenth century, Field J., delivering the opinion of the court in Welton v. Missouri (1875) 91 US 275, at pp 280, 282 and in Mobile v. Kimball (1880) 102 US 691, at p 697, justified the negative commerce clause doctrine by reference to a purpose in the constitution to ensure uniformity against discriminating State legislation. Welton v. Missouri was cited in the first decision on s.92, Fox v. Robbins (1909) 8 CLR 115, at pp 120, 126, 129, 131. Fox v. Robbins was of course a classic instance of discrimination. According to the judgments in that case, the negative commerce clause doctrine, as perceived in Australia in 1900, protected inter-State commerce from adverse discrimination. (See also Isaacs, "Freedom of Interstate Trade" (Opinion 256) in Brazil and Mitchells eds., Opinions of the Attorneys-General of the Commonwealth of Australia (1981), vol.1, at p 306.) And Quick and Garran record that the Australian understanding at that time was that inter-State commerce in the United States was not immune from State taxes of general application. (Quick and Garran, at p 848.) Indeed that is the position today. (See Washington Revenue Department v. Stevedoring Association (1978) 435 US 734.) Rules have been evolved to avoid multiple taxation of the inter-State trader. (See Japan Line, Ltd v. Los Angeles (1979) 441 US 434, at pp 446-447.)

45. It is perhaps more significant that the doctrine enunciated by Frankfurter J. in Freeman v. Hewit has since been discarded by the Supreme Court. In Complete Auto Transit, Inc. v. Brady (1977) 430 US 274 in an opinion by Blackmun J., the court unanimously overruled Freeman v. Hewit, accepting that the rule laid down in that case was open to the comment that it was "a triumph of formalism over substance, providing little guidance even as to formal requirements" and acknowledging that inter-State trade may be made to pay its way (at p 281). According to the current decisions, the negative aspect of the commerce clause has an anti-discriminatory focus. (See Hunt v. Washington State Apple Advertising Commission (1977) 432 US 333; CTS Corp. v. Dynamics Corp. of America (1987) 95 Law Ed 2d 67, at p 84 ("The principal objects of (negative) Commerce Clause scrutiny are statutes that discriminate against interstate commerce.").)

46. In conformity with the general principle that the legislative powers conferred by s.51 are subject to the constitutional guarantee contained in s.92, the Court has held that s.92 secured the citizen's freedom of movement across State borders even in wartime. (Gratwick v. Johnson.) Although that case did not deny power to meet the exigencies of war by regulating the transport of men and materials (see the discussion in Miller v. TCN Channel Nine, at p 603), there is no doubt that the Constitution makes the defence power subject to s.92. That consideration is itself some indication that the freedom guaranteed by the section prevails in a confined area only. If it were not so, the section would create a substantial lacuna in the legislative powers available to the national Parliament in times of war or national crisis arising from actual or threatened international aggression. It would, for example, be a formidable obstacle to legislation authorizing acquisition and organization of essential commodities and materials in times of war or such a crisis. The criterion of operation test did nothing to alleviate this problem. Indeed, of the various interpretations of s.92 which have attracted any support over the years only the fiscal charges theory and the anti-discrimination interpretation which (for the reasons given) we favour reduce the problem to manageable proportions. Similar comments could be made in relation to the competence of the national Parliament to legislate in discharge of international obligations (Constitution, s.51(xxix)).

47. In Buck v. Bavone (1976) 135 CLR 110, at p 137 and in later cases, Murphy J. expressed the opinion that s.92 guarantees freedom from fiscal imposts only. No other member of the Court has taken this view and it has been uniformly rejected by the Court, notably in Miller v. TCN Channel Nine. That this should be so is not surprising. So interpreted, the section would fail to reflect its history which had as its focus the goal of free trade and elimination of protection. It would make no sense at all if the section prohibited tariff duties but allowed other forms of protection of domestic industry (e.g., complete prohibition of imports) as barriers to inter-State trade. And, as Barwick C.J. pointed out in Clark King, at p 151, if s.92 prohibited border duties only, then it was addressed to the Commonwealth alone, because s.90 precluded the States from levying border duties.

48. Departing now from the doctrine which has failed to retain general acceptance, we adopt the interpretation which, as we have shown, is favoured by history and context. In doing so, we must say something about the resolution of cases in which no impermissible purpose appears on the face of the impugned law, but its effect is discriminatory in that it discriminates against inter-State trade and commerce and thereby protects intra-State trade and commerce of the same kind. We mention first Commonwealth laws enacted under s.51(i) which govern the conduct of inter-State trade and commerce. Such laws will commonly not appear to discriminate in a relevant sense if they apply to all transactions of a given kind within the reach of the Parliament. It is, however, possible for a general law enacted under s.51(i) to offend s.92 if its effect is discriminatory and the discrimination is upon protectionist grounds. Whether such a law is discriminatory in effect and whether the discrimination is of a protectionist character are questions raising issues of fact and degree. The answer to those questions may, in the ultimate, depend upon judicial impression. That is, however, merely a reflection of the absence from the text of s.92 of any criterion by reference to which "such regulations as may be necessary for the conduct of business" (to recall Parkes' original phrase) might be distinguished from laws which infringe the guarantee of free trade and the absence of protection. Indeed, the principal reason why so much past judicial effort to elucidate and settle the content of the guarantee given by s.92 was foredoomed to fail was the impossibility of extracting from an intended guarantee of freedom from discriminatory protectionism a formula which was capable of automatic application by reference to the formal operation of a law.

49. In the case of a State law, the resolution of the case must start with a consideration of the nature of the law impugned. If it applies to all trade and commerce, inter-State and intra-State alike, it is less likely to be protectionist than if there is discrimination appearing on the face of the law. But where the law in effect, if not in form, discriminates in favour of intra-State trade, it will nevertheless offend against s.92 if the discrimination is of a protectionist character. A law which has as its real object the prescription of a standard for a product or a service or a norm of commercial conduct will not ordinarily be grounded in protectionism and will not be prohibited by s.92. But if a law, which may be otherwise justified by reference to an object which is not protectionist, discriminates against inter-State trade or commerce in pursuit of that object in a way or to an extent which warrants characterization of the law as protectionist, a court will be justified in concluding that it nonetheless offends s.92.

50. The adoption of an interpretation prohibiting the discriminatory burdening of inter-State trade will not of course resolve all problems. It does, however, permit the identification of the relevant questions and a belated acknowledgment of the implications of the long-accepted perception that "although the decision whether an impugned law infringes s.92 was one for a court of law the problems were likely to be largely political, social or economic." (Freightlines &Construction Holding Ltd, at p 5; p 667 of AC) Inevitably the adoption of a new principle of law, though facilitating the resolution of old problems, brings a new array of questions in its wake. The five traditional examples of protection of domestic industry which we gave earlier are by no means exclusive or comprehensive. The means by which domestic industry or trade can be advantaged or protected are legion. The consequence is that there will always be scope for difficult questions of fact in determining whether particular legislative or executive measures constitute discriminatory interference with inter-State trade. And acquisition of a commodity may still involve the potential for conflict with s.92. That problem does not now arise.

51. The question which we must now determine is whether reg.31(1)(d) of the Sea Fisheries Regulations which reveals no discriminatory purpose on its face is impermissibly discriminatory in effect. In other words, whether the burden which the regulation imposes on inter-State trade in crayfish goes beyond the prescription of a reasonable standard to be observed in all crayfish trading and, if so, whether the substantial effect of that regulation is to impose a burden which so disadvantages inter-State trade in crayfish as to raise a protective barrier around Tasmanian trade in crayfish. The latter questions are questions of fact and degree on which minds might legitimately differ.

52. The regulation neither operates at the border or frontier nor distinguishes between local and inter-State trade or produce. However, the limitation on the size of crayfish that may be sold or possessed in Tasmania is unquestionably a burden on the inter-State trade and commerce in crayfish caught in South Australian waters and sold in Tasmania. But does it bear the character of being discriminatory against that inter-State trade and commerce? The prohibitions against the sale and possession of undersized crayfish apply alike to crayfish caught in Tasmanian waters and to those that are imported. In that respect no discriminatory protectionist purpose appears on the face of the law. Furthermore, the object of the prohibitions, in conjunction with the prohibition against catching undersized crayfish, is to assist in the protection and conservation of an important and valuable natural resource, the stock of Tasmanian crayfish. Although the legislation operates in this way to protect the Tasmanian crayfish industry, it is not a form of protection that gives Tasmanian crayfish production or intra-State trade and commerce a competitive or market advantage over imported crayfish or the trade in such crayfish. And, even if the legislation were to give an advantage to the local trade by improving the competitive qualities of mature Tasmanian crayfish by eliminating undersized imported crayfish from the local market, the agreed facts make it clear that the extension of the prohibitions against sale and possession to imported crayfish is a necessary means of enforcing the prohibition against the catching of undersized crayfish in Tasmanian waters. The State cannot undertake inspections other than random inspections and the local crayfish are indistinguishable from those imported from South Australia. On the materials before the Court, the legislation and the burden which it imposes on inter-State trade and commerce are not properly to be described as relevantly discriminatory and protectionist.

53. It follows that question (b) of the questions identified in the order of removal should be answered: Yes.

54. We would therefore set aside the order of the magistrate dismissing the complaint and remit the matter to the Supreme Court of Tasmania.

Orders

Answer the questions identified in the order of removal

as follows:
A.Question: Whether the possession in Tasmania by the

respondents of sixty male and thirty-seven female crayfish imported from South Australia is possession that is the subject of a transaction of inter-State trade and commerce within the meaning of Section 92 of the Commonwealth of Australia Constitution?

Answer: Not necessary to answer.

B.Question: Whether the provisions of Regulations

31(1)(d)(ix) and (x) of the Sea Fisheries Regulations 1962 made under the Fisheries Act 1959 (Tas.), when applied to the possession of the aforesaid crayfish, are compatible with the freedom guaranteed by Section 92 of the Constitution?

Answer: Yes.

Set aside the order dated 3 November 1986 of the Court of Petty Sessions dismissing the complaint and remit the matter to the Supreme Court of Tasmania.

Citations

Cole v Whitfield [1988] HCA 18

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