Federated Municipal and Shire Council Employees' Union of Australia v Melbourne Corporation

[1919] HCA 73

26 CLR 508

THE FEDERATED MUNICIPAL AND

SHIRE COUNCIL EMPLOYEES' UNION

OF AUSTRALIA

THE LORD MAYOR, ALDERMEN, COUN-

CILLORS AND CITIZENS OF THE

RESPONDENTS.

CITY OF MELBOURNE AND OTHERS Industrial Arbitration--Commonwealth Court of Conciliation and Arbitration-

Jurisdiction-Powers of Commonwealth Parliament--" Industrial dispute"- Parties-Municipal corporation-Government instrumentality-Undertaking not MELBOURNE,

carried on for profit-Organization-Association not composed of manual workers Sept. 23-26,

--Registration--The Constitution (63 &64 Vict. c. 12), sec. 51 (xxxv.)-Com- monwealth Conciliation and Arbitration Act 1904-1915 (No. 13 of 1904-No. May 19, 1919.

35 of 1915), secs. 4, 18, 19, 55.

Held, by Isaacs, Higgins, Gavan Duffy, Powers and Rich JJ. (Griffith C.J. and Barton J. dissenting), that municipal corporations established under State laws are not, with regard to the making, maintenance, control or lighting of public streets, instrumentalities of State government, and, therefore, are May 20-23,

not, in respect of such operations, exempt from Commonwealth legislation June 20,

under sec. 51 (xxxv.) of the Constitution.

Per Isaacs and Rich JJ.: A municipality is not exempted except so far as it represents the Crown by reason that it (I) is legally empowered to perform and does perform some function for the Crown, or (2) is lawfully empowered to perform and does perform some function which constitutionally is inherently a Crown function.

Per Higgins J.: Even if the Crown and its agents are immune from the Act-which is doubtful-municipalities are not agents of the Crown SO as to share in the immunity.

Held, also, by Isaacs, Higgins, Powers and Rich JJ. (Barton and Garan Duffy JJ. dissenting), that, in order to constitute an "industrial dispute" within

26 CLR 509

the meaning of sec. 51 (xxxv.) of the Constitution and of the Commonwealth H. C. OF Conciliation and Arbitration Act 1904-1915, it is not necessary that the under- taking in which the parties to the dispute are engaged should be an industry, a trade, or a business, carried on for profit.

Per Isaacs and Rich JJ.: The position of industrialists has been gradually changing from one of pure contract to one of status.

Held, therefore, by Isaacs, Higgins, Powers and Rich JJ. (Griffith C.J., Barton and Gavan Duffy JJ. dissenting), that the Commonwealth Court of Conciliation and Arbitration had authority to determine by award a dispute between an organization of employees registered in connection with " municipal and shire councils, municipal trusts and similar industries," and municipal corporations constituted under State laws, such dispute relating to the opera- tions of those municipal corporations which consisted of the making, main- tenance, control and lighting of public streets.

Meaning of the expression industrial disputes in sec. 51 (xxxv.) of the Constitution discussed.

Per Barton, Isaacs, Higgins, Gavan Duffy and Rich JJ. Circumstances might arise in which employees would be parties to an industrial dispute notwithstanding that they are not manual workers.

CASE STATED.

On the hearing of a dispute in the Commonwealth Court of Con- ciliation and Arbitration in which the Federated Municipal and Shire Council Employees' Union of Australia was claimant and the Lord Mayor, Aldermen, Councillors and Citizens of the City of Mel- bourne and others were respondents, the Deputy President stated, for the opinion of the High Court, a case which, SO far as is material, was as follows :-

1. The Commonwealth Court of Conciliation and Arbitration has cognizance of the industrial dispute above referred to under sec. 19 (d) of the Commonwealth Conciliation and Arbitration Act 1904- 1915, the dispute having been referred into Court on 17th May 1918.

3. The claimant is an association of employees registered as an organization under the Act on 30th August 1910 " in connection with the municipal industry." Later on, the constitution of the organization was altered to read 'in connection with municipal and shire councils, municipal trusts and similar industries."

4. The respondents include the Lord Mayor, Councillors and Citizens of the City of Melbourne, and one hundred and ninety

26 CLR 510

other municipal, city, town, borough and shire councils in Victoria: the Lord Mayor and Aldermen of the City Council of Sydney, and three hundred and eighteen other municipalities and shire councils in New South Wales the Mayor, Aldermen and Citizens of the City of Hobart, and two other municipal corporations in Tasmania one hundred and thirty-seven contractors to municipal, borough and shire councils in the three States; five trustees and commis- sioners of other public bodies; and two electric supply companies.

5. The city councils, municipal and town councils, borough and shire councils and municipal corporations above mentioned are hereinafter referred to as "municipal corporations."

6. Objection has been taken that the municipal corporations referred to are not subject to the jurisdiction of the Commonwealth Court of Conciliation and Arbitration, on the ground that they are State instrumentalities.

7. All the respondent corporations are constituted under State Acts, and the parties are at libertv to refer to all relevant Acts in argument.

8. The State Acts under which most of the municipal corpora- tions were originally constituted have been repealed, and the muni- cipal corporations respondents in this case with few exceptions (if any) are now constituted corporations, under or subject to the provisions of the following State Acts: In Victoria, Local Govern- ment Act 1915 (No. 2686); in New South Wales, Local Government Act 1906 (No. 56 of 1906); in Tasmania, Local Government Act 1906 (6 Edw. VII. No. 31).

9. Generally speaking, the claims are made by the organization in respect of work done by its members employed by the municipal corporations on municipal works not being works carried on for municipal trading purposes.

The following is a question arising in the proceedings, and is, in my opinion, a question of law, and I submit it for the opinion of the High Court Has the Commonwealth Court of Conciliation and Arbitration power or jurisdiction to determine by an award the dispute between the organization and the municipal corporations, constituted under or subject to the provisions of the three Acts mentioned in par. 8 of this case, SO far as the dispute relates to such

26 CLR 511

operations of the said municipal corporations as do not consist of H. C. OF municipal trading ?

During argument the question was amended by substituting, for the words " as do not consist of municipal trading," the words " as consist of the making, maintenance, control and lighting of public streets or any of them."

The nature of the arguments sufficiently appear in the judgments hereunder.

The case was first argued on 23rd, 24th, 25th, and 26th September 1918, before Griffith C.J. and Barton, Isaacs, Higgins, Gavan Duffy. Powers and Rich JJ., when arguments were confined to the question whether municipal corporations established under State laws were, with regard to the making, maintenance, control and lighting of streets, instrumentalities of State government SO as to be immune from Commonwealth legislation under sec. 51 (xxxv.) of the Con- stitution.

Bryant and Owen Dixon, for the claimant organization. Starke and Stanley Lewis, for the City of Melbourne and certain Victorian municipalities.

Mann and Eager, for the Commonwealth, intervening. Stanley Lewis, for the Municipal Council of Sydney. Sir Edward Mitchell K.C. and Davis, for the State of Victoria, intervening.

J. A. Browne, for the State of New South Wales, intervening, and for the Sydney Harbour Trust, intervening

Cussen. for the State of Tasmania, intervening. During argument reference was made to Federated Amalgam- ated Government Railway and Tramway Service Association V.

26 CLR 512

OF A. New South Wales Railway Traffic Employees' Association 1

Federated Engine-Drivers and Firemen's Association of Australasia V. Broken Hill Proprietary Co. [No. 1] 2; Federated Engine-Drivers and Firemen's Association of Australasia v. Broken Hill Proprietary Co. [No. 2] 3; Collector v. Day 4; Perry v. Eames 5; Veazie Bank V. Fenno 6; United States v. Railroad Co. 7 McCulloch v. Mary- land 8; D'Emden v. Pedder 9; Mersey Docks v. Cameron 10 Coomber v. Justices of Berks 11; Tyne Improvement Commissioners V. Chirton Overseers 12; Gilbert v. Corporation of Trinity House 13; Jumbunna Coal Mine, No Liability, v. Victorian Coal Miners' Association 14; R. v. Sutton 15; Attorney-General of New South Wales v. Collector of Customs for New South Wales 16; Attorney- General of Manitoba v. Manitoba Licence Holders' Association 17; The Commonwealth v. New South Wales 18 R. v. Oakleigh Shire Exparte Wilson 19; Powell v. Apollo Candle Co. 20; Willoughby on the Constitution, vol. II., p. 1317; Cooley's Constitutional Limitations, 7th ed., p. 265 Stoutenburgh v. Hennick 21; Mayor v. Ray 22; Fowles v. Eastern and Australian Steamship Co. 23; Flint v. Stone Tracy Co. 24; Pollock v. Farmers' Loan and Trust Co. 25; Atkin V. Kansas 26; Vilas v. Manila 27; R. v. McCann 28; Baxter V. Commissioners of Taxation (N.S.W.) 29; Carslake v. Caulfield Shire 30; R. v. Barger 31; Meriwether v. Garrett 32; Sydney Municipal Council v. The Commonwealth 33; Van Brocklin V. Tennessee 34; Purcell v. Sowler 35; Heiner v. Scott 36;

14 C.L.R., 488, at pp. 534, 536, 212 C.L.R., 398, at pp. 414, 427, 316 C.L.R., 245, at p. 262. 411 Wall., 113. 5(1891) 1 Ch., 658, at p. 668. 68 Wall., 533, at p. 555. 717 Wall., 322, at p. 329. 84 Wheat., 316. 91 C.L.R., 91. 1011 H.L.C., 443. 119 App. Cas., 61, at p. 74. 121 E. &E., 516, at p. 524. 1317 Q.B.D., 795. 146 C.L.R.. 309, at pp. 332, 366, 155 C.L.R., 789. 165 C.L.R., 818. 17(1902) A.C., 73. 1825 C.L.R. 325. 1910 V.L.R. (L.), 67 ; 5 A.L.T., 195. 2010 App. Cas., 282. 21129 U.S., 141, at p. 147. 2219 Wall., 468, at p. 476. 2317 C.L.R., 149. 24220 U.S., 107. 25157 U.S., 429, at p. 584. 26191 U.S., 207, at p. 220. 27220 U.S., 345, at p. 351. 28L.R. 3 Q.B., 677. 294 C.L.R., 1087, at p. 1157. 3017 V.L.R., 560, at p. 588 ; 13 316 C.L.R., 41, at pp. 82. 102. 32102 U.S., 472, at p. 511. 33I C.L.R., 208, at pp. 230, 233. 34117 U.S., 151. 352 C.P.D., 215. 3619 C.L.R., 381, at p. 400. 26 CLR 513

Middlesex County Council v. St. George's Union Assessment Com- H. mittee 1 Local Government Act 1915 (Vict.) (No. 2686), secs. 8,345 et seqq., 595 Municipal Corporations Act 1835 (5 &6 Will. IV. c. 76), secs. 76, 90, 98; Sydney Corporation Act 1842 (N.S.W.) (6 Vict. No. 3) Sydney Corporation Act 1902 (N.S.W.) (No. 35 of 1902), sec. 75; Sydney Corporation Act 1853 (N.S.W.) (17 Vict. No. 33); Local Government Act 1906 (N.S.W.) (No. 56 of 1906), secs. 23-47, 73-76, 78-83,89-98, 109, 116-119, 130, 179-188; Rural Municipalities Act 1865 (Tas.) (29 Vict. No. 8) Local Government Act 1906 (Tas.) (6 Edw. VII. No. 31); Local Government Amendment Act 1911 (Tas.) (2 Geo. v. No. 65); Police Regulation Act 1865 (Tas.) (29 Vict. No. 9); Police Regulation Act 1898 (Tas.) (62 Vict. No. 48); Factories Act 1910 (Tas.) (1 Geo. v. No. 57), sec. 9; Roads Act 1884 (Tas.) (48 Vict. No. 28).

Cur. adv. vult.

GRIFFITH C.J. read the following judgment -This case raises the question of the existence and extent of the immunity of muni- cipalities as instrumentalities of Government of the States. The matter came before the High Court in Federated Engine-Drivers and Firemen's Association of Australasia v. Broken Hill Proprietary Co. [No. 1] 2 in 1911, when the Court intimated that, in its opinion, if a municipal corporation chooses to engage in what has lately been called "municipal trading," and joins the ranks of employers in industries, it is liable to the same Federal laws as other employers engaged in the same industries.

In that case various decisions of the Supreme Court of the United States of America were cited. This Court left undecided, without expressing any opinion upon it, the question whether, and how far, a municipality is subject to the jurisdiction or award of the Arbitra- tion Court.

The principal American cases cited were the following :-The Mayor v. Ray 3, in which the Court said :- A municipal corpora- tion is a subordinate branch of the domestic government of the

1(1896) 2 Q.B., 143, at p. 146. 212 C.L.R., 398. 386 U.S., 468, at pp. 475-476. 26 CLR 514

State. It is instituted for public purposes only; and has none of

the peculiar qualities and characteristics of a trading corporation, instituted for purposes of private gain, except that of acting in a corporate capacity. Its objects, its responsibilities, and its powers are different.

Our system of local and municipal govern- ment is copied, in its general features, from that of England. They are not trading corporations and ought not to become such." Meriwether v. Garrett, in which the Court said 1 -

' Municipal corporations are mere instrumentalities of the State for the more convenient administration of local government, Their powers are such as the Legislature may confer common learning, found in all adjudications on the subject of municipal bodies and repeated by text writers." Stoutenburgh V. Hennick, in which Fuller C.J., delivering the judgment of the Court, said 2 :- " It is a cardinal principle of our system of govern- ment, that local affairs shall be managed by local authorities, and general affairs by the central authority, and hence, while the rule is also fundamental that the power to make laws cannot be delegated, the creation of municipalities exercising local self-government has never been held to trench upon that rule. Such legislation is not regarded as a transfer of general legislative power, but rather as the grant of the authority to prescribe local regulations, according to immemorial practice, subject of course to the interposition of the superior in cases of necessity." Pollock v. Farmers' Loan and Trust Co., in which Fuller C.J. said 3 "A municipal corporation is the representative of the State and one of the instrumentalities of the State government." And the important case of South Carolina V. United States 4.

The present case was argued at the September sittings of the Court, when argument on the main point was concluded. and the Court reserved judgment on it, leaving for further argument after judgment the application to the different forms of municipal activity of anv general rule which it might lay down.

The matter now comes for our determination. and I will give my opinion.

1102 U.S., at p. 511. 2129 U.S., at p. 147. 3157 U.S., at p. 584. 4199 U.S., 437. 26 CLR 515

I regard these decisions of the Supreme Court of the United States as to the immunities of municipal corporations rather as historical expositions of the unwritten law which the thirteen colonies had brought with them from the Mother Country and carried with them into the Union than as interpretations of the Constitution of that Federation. As such, they are entitled to very great weight. In the view of those eminent men, who were after all only stating matters of common knowledge, it was part of the unwritten law and of the system of English government which the colonists brought with them to America, that the functions of government were divided between the central Government and the local or municipal bodies, and that certain powers were allocated to these latter, not as agents or servants of the central Government, but as independent authorities, created by the Legislature, and subject of course to it, but who were entitled as independent organs of the Government of the Colony to equal freedom in the perfor- mance of their functions. And they did not find anything in the Federal Constitution which authorized any interference with this freedom. The doctrines of the law of master and servant, and of principal and agent, deal with matters on a lower plane, and are wholly beside the question.

In my opinion, this exposition of the law is historically applicable to the Australian Colonies. And it follows, in my opinion, that a municipal authority, in the discharge of that portion of the general mass of State functions which had been entrusted to it at the date of Federation, is entitled to the same immunity from Commonwealth interference as the State itself would be in the discharge of similar functions.

BARTON J. read the following judgment :-My learned brother Powers, as Deputy President of the Commonwealth Court of Con- ciliation and Arbitration, asks the Bench to determine a question of great moment from the aspect of the relations between Com- monwealth and State in the Australian Federation. A dispute between the parties is before him in that Court.

The claimant is a registered organization of employees. There are six hundred and fifty-eight respondents, consisting mainly of city,

26 CLR 516

municipal, borough and shire councils, which, for convenience, are in the case grouped under the name of municipal corporations. Each of them exists under the statutory law of one or other of the States of the Commonwealth. They are now constituted under one or other of the Local Government Acts of Victoria, New South Wales or Tasmania. The claims are in respect of work done by members of the organiza- tion employed by the municipal corporations in municipal works which are not carried on for ' municipal trading" purposes. The organization contended that even in the case of such operations the Arbitration Court had jurisdiction. The respondents denied this contention, their ground being that the municipal corporations are instrumentalities of the States under which they are constituted.

The question originally submitted for the opinion of this Court was this: 'Has the Commonwealth Court of Conciliation and Arbi- tration power or jurisdiction to determine by an award the dispute between the organization and the municipal corporations, con- stituted under or subject to the provisions of the three Acts mentioned, SO far as the dispute relates to such operations of the said municipal corporations as do not consist of municipal trading ? " During the argument, the learned Deputy President, who was one of the Court, altered this question, with the approba- tion of the rest of us, by striking out the final words, as do not consist of municipal trading," and putting in their place these words: "as consist of the making, maintenance, control and lighting of public streets or any of them "-meaning, of course, the public streets of the municipality concerned. The arguments followed in the main the lines of the contentions described in the case stated. Besides the parties to the dispute, we had the advantage of hearing counsel for the Commonwealth and for each of the States concerned, who had all obtained leave to intervene,

Apparently the question as altered, in its inclusion of street lighting, refers to the ordinary lighting for public convenience, supported by municipal taxation, and not to the special lighting of places of business and residences, &., undertaken by contract with individuals and for profit. I mean that the question includes only that lighting which it is contended is part of the governmental work

26 CLR 517

of the municipality, as distinct from that which is a mere com- mercial undertaking for pay or reward. Although the principle at issue was touched in a previous case, as I shall point out, it now comes before us for the first time as matter for decision. In the elaborate argument that we heard, many cases were cited and discussed, but I propose to refer only to a few, comparatively, which may help me in the process of elucidating the real question.

First, it is sufficient merely to mention such cases as D'Emden V. Pedder 1; Baxter v. Commissioners of Taxation (N.S.W.) 2: The Railway Servants' Case 3 (a decision which, as the Court intimated in the course of the present case, it would be a waste of time to attack). Taken together, these cases, and indeed others, com- pletely establish, as a necessary implication from the whole scheme of the Constitution, the immunity of the Commonwealth or a State and the instrumentalities or agencies of its government from inter- ference at the hands of the other authority, whether by way of taxation or otherwise an immunity, as the last-mentioned case establishes, not in any wise affected in the case of the States by the terms of sub-sec. XXXV. of sec. 51 in the Constitution. I have no doubt that municipal corporations are such instrumentalities in respect of the governing functions committed to them, and I propose to make that clear presently.

But it would be going a good deal further to say that municipal corporations are entitled to this immunity from interference by the Commonwealth in respect of all of their operations. If they are not, then it must be ascertained whether the immunity extends to such operations as are the subject of the question raised by the case stated. The contention for the claimant is that municipal corpora- tions stand altogether outside this immunity, which is confined, they urge, to the case of the directly governmental operations of the State itself; that municipal corporations are not in that sense instrumentalities or agencies of the State, but independent bodies created for certain purposes and not subject to the control of the State. Their position was likened to that which arose in Mersey Docks v. Cameron 4, Gilbert v. Corporation of Trinity House 5,

1I C.L.R., 91. 24 C.L.R., 1087. 34 C.L.R., 488. 411 H.L.C., 443 11 Eng. Rep., 517 Q.B.D., 795. 26 CLR 518

OF A. and similar cases, on which much reliance was placed. But these

cases do not apply to such a position as the present one. They to show the liability of certain corporations (not municipal), (1) be taxed by the State to which they belong, (2) to be sued for negligence by subjects of that State-in each case on the ground that the corporation could not be held to share the immunity from liability of the Government of that State. The corporation in the first-named case claimed immunity from taxation on the ground that the Crown does not tax itself. The corporation in the Trinity House Case claimed immunity in an action for negligence on the ground that "The King can do no wrong," since legislation, where the Crown is not expressly mentioned, is held to apply to the subject and not to the Government. In both instances the claim was rejected. But these corporations were not defending themselves from the Government of any sphere extraneous to that of their own State on the ground that they were free from interference from that quarter. The question of liability as between State and State or between Commonwealth and State stands on wholly different grounds. It is not because the State may tax or the citizen of that State may sue that the Commonwealth may tax or its citizens out- side the State may sue. The question has to be determined on different considerations. If, for instance, it were admitted that the State of Victoria could tax its own municipal corporations, it would not follow that the Commonwealth could for that reason tax the municipal corporations of Victoria. If the Commonwealth could impose such taxation, which I am far from saying, it could only be by reason of power given by the Constitution as in sec. 51 (II.). But power to interfere with municipal corporations is not given anywhere by the Constitution. Indeed by the direct implication of sec. 51 (xx.) such corporations are protected from the legislative power of the Commonwealth. There is, above all things, a pro- hibition underlying the whole of the Constitution, which, it is to be remembered, is sedulous in preserving the respective spheres of State and Commonwealth. It is a prohibition of action on the part of either tending to invade or impair, by means not distinctly authorized, the powers of the other in the sphere allotted to the

26 CLR 519

one or preserved to the other. And it is in each case to be deter- mined in which sphere is included the matter over which power is claimed. Is, then, the control of municipal corporations within the sphere of the Commonwealth, or within that of the State which creates them, and under which they subsist in the sense that their granted powers can be increased, or diminished, or abolished at the will of the grantor, the Parliament of the State That question can only be answered in the negative. The cited case of Powell V. Apollo Candle Co. 1 has nothing to do with this question

SO far as the main point decided is concerned; though where the Judicial Committee held that duties levied by the Order in Council there in question were really levied by the authority of the Legis- lature, and not that of the Executive, they may have provided the present respondents with a useful analogy. These municipal bodies are independent only in the sense that they may exercise the powers allotted to them without interference save on the part of the State Legislature. They have power to pass subsidiary legislation such as by-laws (in the case of some shires ordinances), but they are distinctly subordinate to the powers of the State; they move entirely within the sphere of, and are subject to, its laws. But these matters are no doubt of concern to the State, and, in fact, within its ambit, equivalent to national matters. Such are, for instance, the making, maintenance, and control of communications. Of these the State attends to railways, telegraphs, and main roads the municipalities, to roads not main ones, within their boundaries, and to streets. They are all part of one great concern. One may apply to the State the words of Cockburn J. in Purcell v. Sowler 2 "The Court below seems to have distinguished between the general and the local administration of the poor law, holding that the general administration was a matter of national concern, while the administration in a particular district was not. But it seems to me that whatever is a matter of public concern when administered in one of the Government Departments, is matter of public concern when administered by the subordinate authorities of a particular dis- trict. It is one of the characteristie features of the government of this country that, instead of being centralized, many important branches

110 App. Cas., 282. 22 C.P.D., at p. 218. 26 CLR 520

of it are committed to the conduct of local authorities. Thus the business of counties, and that of cities and boroughs, is, to a great extent, conducted by local and municipal government. It is not, therefore, because the matter under consideration is one which in its immediate consequences affects only a particular neighbourhood that it is not a matter of public concern." True, these words were used in deciding a libel case, but they are aptly descriptive of the relation of local authorities to the government of the country con- cerned. And anyone, more especially if he has compared the Federal Constitution with that of the State and considered the legislation of the latter, will admit that the country concerned is in this con- nection the State and not the Commonwealth.

I turn to some American cases in addition to those cited by the learned Chief Justice. I refer to them because the statements seem to me to be accurate and the reasoning cogent. In Ottawa v. Carey 1, in 1883, Waite C.J. said :- " Municipal corporations are created to aid the State Government in the regulation and administration of local affairs. They have only such powers of government as are expressly granted them, or such as are necessary to carry into effect those that are granted. No powers can be implied except such as are essential to the objects and purposes of the corporation as created and established.

To the extent of their authority they can bind the people and the property subject to their regulation and governmental control by what they do, but beyond their corporate powers their acts are of no effect." In other words, the State has granted to the corporation, during the pleasure of the Legislature, some of its powers, and it retains the rest.

In United States v. Railroad Co. 2 it was held that a muni- cipal corporation is a part of the sovereign power of the State, and is not subject to taxation by Congress upon its municipal revenues. Clifford and Miller JJ. dissented, not from this pro- position, but from its application in the particular instance, because they were of opinion 3 that " private property held by a corporation in a proprietary right, and used merely in a commercial sense for the income, gains, and profits," which they thought the subject of

1108 U.S., 110, at p. 121. 217 Wall., 322. 317 Wall., at p. 334. 26 CLR 521

the litigation was in effect, might be taxable just the same as pro- perty used by an individual or by any other corporation. That is, I think, undeniable. But the principle laid down by the judg- ment of the Court stands unimpaired. In delivering it, Hunt J. said 1 :- A municipal corporation like the City of Baltimore, is a representative not only of the State, but is a portion of its govern- mental power. It is one of its creatures, made for a specific purpose, to exercise within a limited sphere the powers of the State. The State may withdraw these local powers of government at pleasure, and may, through its Legislature or other appointed channels, govern the local territory as it governs the State at large. It enlarge or contract its powers or destroy its existence. As a portion of the State in the exercise of a limited portion of the powers of the State, its revenues, like those of the State, are not subject to taxa- tion" (i.e., by the Federal power). And further, speaking of an issue of bonds by the corporation to aid in railway construction, under an Act of the State Legislature, the Court said 2 :-

Was it exercised for the benefit of the municipality, that is, in the course of its municipal business or duties ? In other words, was it acting in its capacity of an agent of the State, delegated to exercise certain powers for the benefit of the municipality called the City of Baltimore ? Did it act as an auxiliary servant and trustee of the supreme legislative power ? " If it were SO acting, the bonds were not taxable by Congress.

In Atkin v. Kansas 3, where the decision was that it was within the power of a State, notwithstanding the 14th amendment of the United States Constitution, to prescribe the conditions on which it would permit public work to be done on behalf of itself or its municipalities, the Statute impeached dealt with hours of labour, rates of wages, &. The precise question decided is not in issue here, nevertheless the case is important on the present question by reason of some passages in the judgment of the Court, delivered by Harlan J., as to the relation existing between a State and its municipal corporations.

"Such corporations," the Court said 4, are the creatures, mere political subdivisions, of the State for the

117 Wall., at p. 329. 217 Wall., at p. 330. 3191 U.S., 207. 4191 U.S., at pp. 220-221. 26 CLR 522

purpose of exercising a part of its powers. They may exert only such powers as are expressly granted to them, or such as may be necessarily implied from those granted. What they lawfully do of a public character is done under the sanction of the State. They are, in every essential sense, only auxiliaries of the State for the purposes of local government. They may be created, or, having been created, their powers may be restricted or enlarged, or altogether withdrawn at the will of the Legislature; the authority of the Legislature, when restricting or withdrawing such powers, being subject only to the fundamental condition that the collective and individual rights of the people of the municipality shall not thereby be destroyed."

The judgment cited a previous case of Williams v. Eggleston 1, in which the Court had said "A municipal corporation is, SO far as its purely municipal relations are concerned, simply an agency of the State for conducting the affairs of government, and as such it is subject to the control of the Legislature." They also quoted from a judgment of the Supreme Court of Iowa the following passage, which is remarkable, in my opinion, for its terse and vivid state- ment of the true position 2 :- " Municipal corporations owe their origin to, and derive their powers and rights wholly from, the Legis- lature. It breathes into them the breath of life, without which they cannot exist. As it creates, SO it may destroy. If it may destroy, it may abridge and control. Unless there is some constitutional limitation on the right, the Legislature might, by a single act, if we can suppose it capable of SO great a folly and SO great a wrong, sweep from existence all of the municipal corporations of the State, and the corporations could not prevent it. We know of no limitation on this right SO far as the corporations themselves are concerned. They are, SO to phrase it, the mere tenants at will of the Legislature." And, as they pointed out 3, " it is one of the functions of government to provide public highways for the convenience and comfort of the people. Instead of undertaking that work directly, the State invested one of its governmental agencies with power to care for it. Whether done by the State directly or by one of its instrumentalities, the work was of a public, not private, character."

I fully adopt that proposition.

1170 U.S., 304, at p. 310. 2191 U.S. at p. 221. 3191 U.S., at p, 222. 26 CLR 523

These strong passages harmonize in reason with the decision in Flint v. Stone Tracy Co. 1, following South Carolina v. United States 2, that the exemption from Federal taxation of the means and instrumentalities employed in carrying on the governmental operations of the States does not extend to State agencies and instrumentalities used for carrying on business of a private character. This limitation of an admitted principle, of course, covers the opera- tions of municipal corporations which are conducted by municipal bodies for commercial or trading purposes: for those of gain or profit and not for those of government.

It has been pointed out more than once from this Bench that when it cites American decisions it is fully conscious that they are not authorities by which it is bound. But it is entitled to adopt the reasoning adduced in support of such decisions when it is con- vinced of the soundness of the reasons and when they are applicable to the facts of the case in hand. And in that conviction I apply to this case the quotations I have made.

My views, as well as those of the learned Chief Justice and the late O'Connor J., as to the limitations mentioned, are expressed, though extra-judicially, in Federated Engine-Drivers and Firemen's Associ- ation of Australasia v. Broken Hill Proprietary Co. [No. 1] 3. adhere as a matter of decision to what, with my colleagues, I then put as an opinion invoked by the parties.

So far, then, as its "municipal trading" " or the carrying on of business commercially for purposes of gain and profit is concerned, a municipal corporation is, in my view, in no better position than a private trading corporation, or indeed an- individual, would occupy, and cannot claim immunity from the exercise of Federal powers to any greater extent than such a company or person. But to the extent that its functions which are exercised under the statutory authority of the State are governmental, in the sense shown by the above observations and quotations, the municipal corporation shares the immunity of the State itself from Federal interference, just as the Commonwealth and its instrumentalities may not be undermined or impaired by the State.

The operations described in the question stated are, in my opinion,

1220 U.S., 107. 2199 U.S., 437. 312 C.L.R., 398, 26 CLR 524

clearly governmental, and I therefore hold that the Arbitration Court can no more interfere with the respondent municipal organiza- tions in these respects than could its creator, the Parliament of the Commonwealth.

I must therefore answer the question stated in the negative, This answer applies to the first branch of the argument. As the majority of the Bench are of a different opinion, argument is to be taken on the second branch-whether there can be an industrial dispute extending &. between the municipal corporations and their employees in respect of the operations mentioned, regard being had to par. XXXV. of sec. 51 of the Constitution and also to the Concilia- tion and Arbitration Act of the Commonwealth.

ISAACS AND RICH JJ. (read by ISAACS J.) :-As the case stands amended, the question of law stated for the opinion of this Court is whether the Commonwealth Court of Conciliation and Arbitration has jurisdiction to settle a dispute as to wages and hours, and other conditions of employment, between municipal corporations and such of their employees as are employed in the construction and maintenance of the public streets of the municipalities.

The argument upon this question has been divided into two branches. The first branch is whether the words "industrial disputes in pl. XXXV. of sec. 51 of the Constitution are limited to disputes in "an industry" in the sense of a specific business or avocation in which both employer and employees are engaged, or whether they extend to cover all disputes of an indus- trial nature-that is, for instance, where the employees are engaged in industry in the broad sense by working in the service of the employers and the dispute is as to the conditions of employment either as between employers and employees or as between different classes of employees, such as demarcation disputes. The second branch is whether, supposing the words industrial disputes " have the wider connotation, municipalities are subject to the jurisdiction of the Commonwealth tribunal, having regard to their relation to the State system of government. The argument SO far-though something was said as to the first branch-was ultimately limited to the second branch, leaving the first to be argued out in the event of

26 CLR 525

the opinion of the Court on the second branch making that course necessary.

If municipalities, on the true construction of the Constitution, are outside the sphere of Commonwealth jurisdiction, in relation to their construction and repair of roads, by reason of their position as an "instrumentality," as it is called, of State government, it matters not whether road construction or maintenance can or cannot be considered an industry " in the narrower sense. The language of pl. XXXV., read as part of sec. 51, is as follows: "The Parliament shall, subject to this Constitution, have power to make laws for the peace, order, and good government of the Commonwealth with respect to

(xxxv.) Conciliation and arbitration for the prevention and settlement of industrial disputes extending beyond the limits of any one State." No express limitation is placed on the class of disputants in the placitum itself or elsewhere in the Constitution.

The laws, therefore, that may be made under that specific power, so far as any express limitation is concerned, extend to all industrial disputes in the Commonwealth extending beyond the limits of any one State. And covering section v. of the Constitution Act makes the Constitution itself, and all laws made under it " binding on the Courts, Judges, and people of every State and of every part of the Commonwealth, notwithstanding anything in the laws of any State." Any constitutional exemption of municipalities from the operation of such laws must, therefore, rest upon some implication of law, which when applied to pl. XXXV. excludes their industrial disputes from the words " industrial disputes " there found.

It has already been decided by this Court (Federated Engine- Drivers and Firemen's Association of Australasia v. Broken Hill Proprietary Co. [No. 2] 1 that a municipal corporation in Victoria SO far as it engages in trading occupation, is subject to the jurisdiction of the Arbitration Court. This shows that the mere fact that a corpora- tion may be created or abolished by the State is no reason for exemp- tion from Commonwealth jurisdiction. A distinction was drawn in that case between trading and non-trading operations, but, although trading operations were held to fall within the jurisdiction of the

116 C.L.R., 245 26 CLR 526

Court, the decision did not lay down "trading" as the discrimen.

It was not necessary to do SO. The question of how far non-trading operations attracted the jurisdiction was left undetermined. In that case, "trading" and "governing" were contrasted; but there are municipal functions which are neither the one nor the other. The care of parks and the establishment of free libraries could not properly be brought under either head. We have now to consider the true line of demarcation, if there is one. The question, then, as to the implied exclusion of non-trading operations from the arbitral jurisdiction of the Commonwealth is this: Where do we find the restrictive implication of law ? It is suggested, using American terminology, that municipalities are "State instrumentalities." Tested by British standards-which are the only legitimate standards --such a term, to have any meaning which would attract a legal implication restricting the meaning of the words "industrial dis- putes," must denote that municipalities are, in relation to the subject matter of disputes, true functionaries of the State Govern- ment, that is, the King's Government.

A clear distinction must be noted and preserved between the expression "the Government of the country" in the sense of the King's representatives or agents in the concrete sense, and the expression the government of the country" in the abstract sense of the process of governing the country in whole or in part. The first denotes the persons who act, and the second denotes acts done. Again, the functions performed by "the Government" in the concrete sense, including in that term those who represent the Govern- ment pro hac vice, are the acts of the General Government, that is, theoretically, the Crown; but there may be functions coming under the second head which are not in any real sense acts of the General Government. For instance, as early as the reign of Queen Anne, the Court of King's Bench said, speaking of a case concerning the City of London, "a corporation is properly an investing the people of the place with the local government thereof, and therefore their law shall bind strangers" (Cuddon v. Eastwick 1 ). A 'by-law '' is a law (Hopkins v. Swansea 2 and London Association of Shipowners

11 Salk., 192. 24 M. &W., 621, at p. 640. 26 CLR 527

and Brokers v. London and India Docks Joint Committee 1 ). In Arnold on Municipal Corporations (1851), at p. 3, there is the following definition "A municipal corporation, therefore, is a civil corporation aggregate, established for the purpose of investing the inhabitants of a particular borough or place with the power of self-government, and with certain other privileges and franchises." Royal Charters creating municipal corporations and investing them with powers were not imposed on the locality, but were offered and might be accepted or rejected and, if accepted, it was taken that every person who chose to be or to come within the area of the powers granted subjected himself to the control conferred. Indeed. municipal corporations were the creation not merely of the Crown, but also of subjects who had jura regalia. (See fully on this subject, Grant on Corporations, particularly pp. 10 et segq.) The Act of 1835 (5 &6 Will. IV. c. 76), which was referred to in argument, did not destroy the old corporations: they remained, but under new governmental powers (Attorney-General v. Corporation of Leicester 2 ). The charters creating new corporations were still issued under the royal prerogative, although, when once created, the new municipality is pro tanto invested with the statutory functions and powers (Grant, p. 16).

By various later English enactments, many municipal corporations were enabled to undertake works some of which may usefully be referred to here; as, for instance, the establishment of museums of art and science, the providing of baths and wash-houses, the removal of nuisances, the appointment of police constables, and the establish- ment of salaried police magistrates. They may, at common law, be liable to repair highways and bridges, and may make rates for the purpose they could in some instances supply water, and impose water rates. All these instances and others, with the appro- priate authorities and references, are to be found in Grant on Cor- porations, passim, and in the article "Municipal Corporations" by Mr. Manson in the Encyclopadia of the Laws of England (2nd ed.), vol. IX., pp. 466 et seqq. The later English legislation does not affect the fundamental character of the system. To borrow Mr. Manson's quotation, the motto is "Spartam nactus es, hanc exorna." The

1(1892) 3 Ch., 242. at p. 252. 29 Beav., 546. 26 CLR 528

duties and functions of the corporation are, at least in the main,

entirely local and for the benefit and advantage of the inhabitants of the locality or persons transiently coming there.

The distinction between the functions of such bodies and those of the General Government has been very clearly marked by the Courts. The fundamental case is Coomber v. Justices of Berks 1. But, before quoting the ruling passage from that case, reference should be made to some other cases. In R. v. Mayor of Sheffield 2 Blackburn J. refers to the reason why the Act of 1835 was passed, namely, to control the corporations, to cut down their ownership of the municipal property, and to check their expenditure by appropri- ating the fund to certain purposes such as debts, police expenses, prosecutions, payment of constables, &., and any surplus " for the public benefit of the inhabitants and improvement of the borough -deficiencies to be made good by rates. This view was adopted by Jessel M.R. in Attorney-General v. Mayor of Brecon 3. The learned Master of the Rolls pointed out that since that Act municipalities were trustees of their property, and no longer simply owners of it. He proceeds to lay down the principle that the powers and privileges of such a corporation go to make up its existence; that if those powers and privileges are attacked, the corporation itself may defend them that, in SO defending them, there is no valid distinction between property strictly SO called and a right of regulation involving the making of tolls, which is in the nature of property, and a power of regulation apart from tolls and consisting of mere government of the town. The right of regulating markets, said the Master of the Rolls 4, " is part of the municipal government of the town," and is vested in the corpora- tion for the benefit of the town as part of the government of the town; and he who seeks to interfere with the privileges and duties connected with the regulations must be resisted, and, of course, resisted at the expense of the corporation."

This all tends to show, both by its affirmative propositions and negatively by the absence of any reference to the Crown or the Attorney-General, that the municipality was regarded in relation

19 App. Cas., 61. 2L.R. 6 Q.B., 652, at p. 661. 310 Ch. D., 204. 410 Ch. D., at p. 219. 26 CLR 529

to its rights and powers as independent of the General Government acting for the whole country. Then the Courts have also had to consider the position of municipalities from the standpoint of their obligation to contribute to rates. Prior to the Act of 1835, munici- palities were liable to the poor rate (R. v. Mayor of York 1 ). In 1839 and 1840 the Court of Queen's Bench held them no longer liable, having regard to the provisions of the Act of 1835, sec. 92, and the public nature of their functions (R. v. Mayor of Liverpool 2 and R. v. Inhabitants of Exminster 3 ). Lord Denman C.J., in the Liverpool Case 4, spoke of the "public" purposes as in "extent and approximation to something like national benefit." Parliament, however, in 1841, by Act 4 &5 Vict. C. 48 promptly rejected the notion of any such intention on its part in passing the Act of 1835. After reciting the decisions, it declared the expediency of the municipal corporations being rateable, and enacted that they should be rated.

There was, of course, always the Crown exemption, because the Crown was not included expressly or by necessary implication. In County Council of Middlesex v. St. George's Union 5 it was expressly argued for the County Council, whose property was sought to be assessed, that it was exempt because "the government of each county is none the less administered by the Sovereign according to the theory of the Constitution because it is administered through local agencies." On the other hand, it was contended for the Assessment Committee that it is not enough that it should be used for purposes of government; it must be used for the purposes of that part of the government of the country which is theoretically administered by the Crown." In delivering judgment Cave J. said 6 that in the authorities "a distinction has been drawn between Crown or Imperial purposes, such as the administration of justice, and purposes of local government." The learned Judge also observed whether a municipal authority be created by charter or by Statute. its purposes must equally be local." Wills J. agreed. In the Court of Appeal 7 the arguments were repeated and the

16 A. &E., 419. 29 A. &E., 435. 312 A. &E., 2. 49 A. &E., at p. 442. 5(1896) 2 Q.B., 143. 6(1896) 1 Q.B., at p. 146. 7(1897) 1 Q.B., 64. 26 CLR 530

judgment affirmed. There is, however, one passage in the judgment of Lopes L.J. 1 which deserves special notice. The Lord Justice first refers to Lord Westbury's judgment in Mersey Docks v. Cameron 2, where that learned Lord uses the phrase 'the Government of the country" in the concrete sense of the King's Government. Then Lopes L.J. states the inclination of his opinion that prior to 1888 the whole of the building would have been exempt " because at that time the administrative business of the county was done by the justices in Quarter Sessions assembled as such, and by virtue of the authority which they derived from the Crown." "But," pro- ceeds the learned Judge, in 1888 a great change took place. The judicial business of the county continued to be performed by the justices in Quarter Sessions, but the administrative business was transferred to the County Council, who in performing their functions do not act by virtue of any judicial office, or as being servants of the Crown." And SO he held that SO much of the building as was occu- pied for Crown purposes was not rateable but SO much as was occupied by the County Council for administrative or municipal purposes was rateable.

These decisions applied the principle of Coomber's Case 3, which is stated most clearly by Lord Watson at p. 74. The learned Lord adopted Lord Chancellor Westbury's view that the exemption of the Crown extends " not only to the immediate and actual servants of the Crown but to all other persons, not being servants of the Crown, whose occupation was ascribable to a bare trust for purposes required and created by the Government of the country." Then Lord Watson proceeded to say: "Seeing that, in my opinion, the administration of justice, the maintenance of order, and the repres- sion of crime, are among the primary and inalienable functions of a constitutional Government, I have no hesitation in holding that Assize Courts and police stations have been erected for proper government purposes and uses, although the duty of providing and maintaining them has been cast upon county or other local authorities." Here we have the discrimen of Crown exemption. If a municipality either (1) is legally empowered to perform and does

1(1897) 1 Q.B., at pp. 70-71. 211 H.L.C., at p. 505. 39 App. Cas., 61. 26 CLR 531

perform any function whatever for the Crown, or 2 is lawfully empowered to perform and does perform any function which con- stitutionally is inalienably a Crown function-as, for instance, the administration of justice-the municipality is in law presumed to represent the Crown, and the exemption applies. Otherwise, it is outside that exemption, and, if impliedly exempted at all, some other principle must be resorted to. The making and maintenance of streets in the municipality is not within either proposition.

It is true, as observed by the Privy Council in Farnell v. Bowman 1, that "the local Governments in the Colonies, as pioneers of improvements, are frequently obliged to embark in undertakings which in other countries are left to private enterprise, such, for instance, as the construction of railways, canals, and other works." In New South Wales and Victoria, as in other Australian States, the railways are governmental undertakings, and the Commissioners, for such a purpose as the present, represent the Crown. But the under- taking of railways is not what Lord Watson calls "an inalienable function of a constitutional government." The Deniliquin and Moama Railway is a private enterprise; the Hobson's Bay Railway in Victoria was a private enterprise the Mount Lvell Railway in Tasmania is a private railway. Government tramways are assumed as governmental functions; while municipal tramways are not, not- withstanding rules and regulations which govern the traffic upon them. In Australia, when settlement began, the Government was obliged to construct roads in the new country; but when municipal institutions arose that function was for local purposes handed over to the municipalities, and where they did not exist the Government retained the function. Where the transfer, however, took place, the municipality, as a matter of principle, stood in relation to that function exactly as a municipality stood in England to the same function-namely, it was simply local government as distinguished from general or Crown government, and the rights, powers and privileges of the municipality depended on Statute. The passage above quoted from the judgment of Lopes L.J. in the County Council of Middlesex Case (2) has close application.

What doctrine of construction, then, can by implication exclude

2(1897) 1 Q.B., at p. 71. 112 App. Cas., 643, at p. 649. 26 CLR 532

municipalities in relation to such a function from the constitutional purview of pl. XXXV, of sec. 51 ? Apart from the doctrine that the Crown is not bound by Statute unless included by express words or clear intendment (Attorney-General for New South Wales v. Curator of Intestate Estates 1 ), ordinary British law offers no canon of construction which would have that effect. This is a doctrine as well recognized in America in both Federal and State Courts as it is in our own jurisprudence. For instance, in Jones v. Tatham 2 Lewis J. says: "The general business of the legislative power is to establish laws for individuals, not for the Sovereign; and when the rights of the Commonwealth are to be transferred or affected, the intention must be plainly expressed or necessarily implied." The Supreme Court of the United States affirmed the principle in Guarantee Co. v. Title Guaranty Co. 3. This con- stitutional doctrine effectively guards the State Governments, and, under that denomination, guards their agents and representatives within the terms of Lord Watson's judgment from coercion by Federal law except where the State Government is expressly named in the Constitution or where its subject matter indicates that the State Government also must be bound. But apart from that, the question is one of conflict between two laws-Federal and State- both assumedly within respective powers, and both in terms opera- ting on the same persons or other subject matter. If power is wanting cadit quastio. But if the power exists in general terms and the law is passed in general terms, then, apart from implied exclusion from the general term, it comes to a question of supremacy.

The constitutional doctrine of the actual decision in D'Emden V. Pedder 4 is founded on the principle of supremacy, and on nothing else (see pp. 110-111). It applied sec. 109 of the Consti- tution: it assumed the power in each Parliament, SO far as its own Constitution was concerned, to pass the respective laws: it further assumed, as is the truth, that all executive power of a self- governing Colony is ultimately referable for its authority to some legislative provision: it then placed the true ultimate legislative authorities in juxtaposition, and declared in case of conflict the

1(1907) A.C., 519, at p. 523. 220 Pa. St. Rep., 398, at p. 411. 3224 U.S., 152. 41 C.L.R., 91. 26 CLR 533

supremacy of the Federal Constitution or Federal Act. That is H. precisely what Marshall C.J. said, in McCulloch v. Maryland 1, in these words: "There is a plain repugnance in conferring on one government a power to control the constitutional measures of another, which other, with respect to those very measures, is declared to be supreme over that which exerts the control." The same point was very distinctly put, with respect to Federal officers' freedom from State control, in Ohio v. Thomas 2.

Stress, it is observed, is here laid on the fact that D'Emden V. Pedder 3 is an application of the constitutional declaration of supremacy in sec. 109 of the Constitution, which itself rests for its binding force on covering section v. of the Act-that section being, after all, the controlling provision of the Imperial Parliament. And the reason stress is laid on that fact is that, although the case itself declared the inability of the State to fetter Commonwealth agencies, it was argued that the principle of the decision in that case must be reciprocal. As soon as it is perceived that the principle of the decision is "supremacy," it is manifest that there can be no reciprocity. D'Emden v. Pedder, therefore, can be laid aside SO far as this case is concerned. Any application of the doctrine of reciprocity must depend on some decision other than D'Emden V. Pedder, applying rightly or wrongly the actual decision in that case. The only possible ground for excluding municipali- ties from arbitral jurisdiction in any given case, is utter want of Federal power, apart from any opposing State enactment. If the power exists, D'Emden v. Pedder annihilates the opposing enactment; if the power does not exist, the case is inapplicable. The position is simply stated. The Constitution connotes the- continued existence unimpaired of both the Commonwealth and the States as governing bodies in their respective spheres of jurisdiction. The King is the same King throughout Australia (Williams V. Howarth 4 ) But his powers are not the same in every sphere of jurisdiction; and they are exercised by different agents, differently constituted and authorized, according to the sphere of jurisdiction in which they are to operate. The Constitution preserves the most

14 Wheat., at p. 431. 2173 U.S., 276, at p. 284. 31 C.L.R., 91. 4(1905) A.C., 551. 26 CLR 534

absolute freedom of action-legislative, executive and judicial-in

every sphere, but subject to this qualification: that, wherever there would otherwise be a conflict if the two agencies met on the same field, there shall be no conflict, because, to the extent of interference with the operation of Commonwealth action, State law shall be invalid-which also invalidates everything dependent upon it. Municipal powers, which are the creation of State law, are not, as such, within the sphere of Commonwealth jurisdiction, and therefore, in the main, conflict is not possible. But the lines of municipal powers and action may at some points intersect Commonwealth powers, and, where they do, Commonwealth law must prevail. This does not interfere with State legislative power, except to the extent expressly stated by the Constitution; it does not interfere with State action at all, because the municipal council is not a part of the State General Government, any more than an individual would be if he were authorized by State law to make roads and charge tolls. On the basis of British precedent, therefore, the jurisdiction is given by general words, which no other part of the Constitution, on ordinary principles of construction, restricts, and which, therefore, according to R. v. Burah 1, no Court is entitled to limit.

Reliance, however, is placed on American authorities to the effect that municipalities are State instrumentalities." Those authorities cannot prevail here, if opposed to the principles underlying our own jurisprudence. But a short reference to them may be desirable. The general principle of State action is well established by the decisions in America. Perhaps, for the present purpose, it is as well stated as anywhere in Ex parte Virginia 2, where it is said :- " A State acts by its legislative, its executive, or its judicial authorities. It can act in no other way." It is also a basic principle in American jurisprudence that the power of the various State organs cannot be delegated. This principle, however, as pointed out in Willoughby on the Constitution (vol. II., sec. 774, p. 1317), is subject to one exception. "The exception," says the learned author, " is with reference to the delegation of powers to local governments." He says the exception is based on the antiquity of the Anglo-Saxon practice of local government antedating the adoption of the Constitution.

13 App. Cas., 889, at p. 905. 2100 U.S., 339, at p. 347. 26 CLR 535

This view may receive support from the judgment of Gray C.J. in H. C. OF Hill v. Boston 1. Cooley on Constitutional Limitations, 6th ed., chap. VIII., pp. 226-227, expresses the matter somewhat differently. There we find expressions which modify the notion that the muni- cipality can be regarded in the same light as the State. It is said,

The Legislature

is not regarded as delegating its authority, because the regulation of such local affairs as are commonly left to local boards and officers is not understood as to belong properly to the State."

Undoubtedly we find various expressions to the effect that " public corporations are but parts of the machinery employed in carrying on the affairs of the State " (Cooley, p. 229, note 2, quoting from the judgment of a State Court). But the judicial opinions we meet with are varied in form. Some are very close to the English view already cited. For instance, in Walla Walla City v. Walla Walla Water Co. 2 Brown J., in delivering the unanimous opinion of the Court (which included the present Chief Justice, the late Chief Justice Fuller and other eminent Judges) said :- It may be conceded as a general proposition that there is a substantial distinction between the acts of a municipality as the agent of the State for the preservation of peace and the protection of persons and property, and its acts as the agent of its citizens for the care and improvement of the public property and the adaptation of the city for the purposes of residence and business."

At p. 10 the learned Justice refers to a case, where it was held that " a contract to put electric wires under ground was

for the private advantage of the city as a legal personality, distinct from considerations connected with the government of the State at large, and that with reference to such contracts the city must be regarded as a private corporation." Another case is referred to as to waterworks. No mention is made of trading in electricity or water. Indeed, the observations on p. 11 show that trading is immaterial, because the Court says, with reference to the case in hand, that the city might furnish the water free of charge to its citizens and raise the necessary funds by a general tax. When other cases which were referred to during the argument such as Vilas v. Manila 3 are considered in conjunction with the Walla

1122 Mass., 344. 2172 U.S., 1. at p. 8. 3220 U.S., at p. 356. 26 CLR 536

Walla Case (1), they are not insusceptible of reduction to the same view as is taken in England. Government control of the conduct of individuals is undoubtedly of a different nature from trading functions, and both are distinct from power to contract for road making.

Sufficient has been said to indicate that American opinion can- not be said to be clearly and decidedly opposed to the English rule: it always professes to follow the English notion of municipal status, and nowhere is it based on any difference of result owing to the Federal system. Perhaps one of the clearest cases illustrating the distinction between the State and the local public is Barree V. City of Cape Girardeau (2), citing Bullmaster v. City of Joseph (3). But that case expressly treats the making and care of streets as private municipal matters, and not as governmental.

In this situation the law as appearing from considerations of British law, as here understood, should prevail, and the question should be SO answered as to affirm the jurisdiction of the Court of Conciliation and Arbitration over municipalities in respect of street construction and maintenance, subject to the other branch of the respondents' argument with reference to the meaning of "industrial dispute."

HIGGINS J. read the following judgment :-The question as amended relates only to persons employed by the municipalities in "the making, maintenance, control and lighting of public streets": Can there be an award as between the Union and the municipalities ?

It has been decided in the Railway Servants' Case (4) that the Court of Conciliation and Arbitration has no powers either of conciliation or of arbitration as to disputes between State railway commissioners and their employees-that a railway servants' union cannot even be registered. Counsel for the Union attempted to impugn the decision in this case; but, as the majority of my learned colleagues intimated that the attempt would be futile, counsel refrained from further argument on the subject. In this judgment

I treat the decision as binding.

(3) 70 Mo. App.. 60. (2) 114 Am. St. Rep., 763, at p. 767.

(4) 4 C.L.R., 488.

26 CLR 537

The American cases cited as to interference with State " instru- mentalities (the term is not familiar in English law) relate, in most cases, to taxation; and taxation is, in very nature, a burden on the person taxed. For my part, I am not satisfied that the essential nature of the power conferred by sec. 51 (xxxv.) of the Constitution, and exercised by the Act made thereunder, has been sufficiently considered. Conciliation is not necessarily a burden; arbitration, even if it end in a compulsory award, is not necessarily a burden. These processes are primarily meant to aid both parties to the dispute-meant as an aid to industrial peace, to the peaceful prosecution of the industries needed by the public. Under the Act, the first duty of the Court, as to an industrial dispute of which it gets cognizance, is to try to reconcile the parties, to get an agree- ment. It has no right to make an award except to the extent that it cannot get an agreement (secs. 23, 24). It is found, indeed, that as the principles of the Court become known the number of agree- ments is increasing, the number of awards decreasing. Such an Act as our Australian Act is not, I think, dealt with in any American cases. Under English law, Acts of Parliament do not bind the Crown unless by express words or by necessary implication; but there is an exception when the Act is made for the public good, the advancement of religion and justice, and to prevent injury and wrong (Bacon's Abridgment, 7th ed., vol. VI., p. 462; per Jessel M.R., Ex parte Postmaster-General 1 ).

But I shall assume that the Act is a burden in the same way that a tax is a burden. Who is exempt from the burden ? I shall first consider the matter on the lines of the English law. Does the Act bind the Crown and, if it does not bind the Crown, are muni- cipalities agents of the Crown within the rule exempting agents of the Crown as well as the Crown itself ? The Crown is not bound by a Statute unless by express words or necessary implication. This is a mere rule of construction-a rule which yields to the clearly expressed intention of Parliament. In the case of this Act there is no doubt as to the intention of Parliament to bind the Crown's undertakings; for, by sec. 4, an "industrial dispute " of which the Court may take cognizance includes "any dispute in

110 Ch. D., 595, at p. 601. 26 CLR 538

relation to employment in an industry carried on by or under the control of the Commonwealth or a State, or any public authority constituted under the Commonwealth or a State." There is no doubt, therefore, that, if there be a two-State dispute in relation to employment in an industry carried on by or under the control of a State or any public authority constituted under the State, the State-or the Crown in right of the State-was not meant to be exempt from the provisions of the Act. But even if the Crown and its agents were immune from the Act, municipalities are not agents of the Crown SO as to share in the immunity. The fact that municipalities exist for public purposes does not make them immune. In England they have always been held liable to church rates, to sewers rates, to poor rates, to income tax, to land tax (see Rawlinson, Municipal Corporation Act 1883, 8th ed., p. 220). The same principle is applied to municipal corporations as to the trustees of the Mersey docks (Mersey Docks v. Cameron 1 ), to the University of Edin- burgh (Greig v. University of Edinburgh 2 ), to Trinity House (Gilbert v. Trinity House 3 ). The distinction between mental purposes and purposes of local government is emphatically shown in the case of the County Council of Middlesex v. Assessment Committee of St. George's Union 4. In that case, the guild-hall of a county council was used for a double purpose-the administra- tion of justice (quarter sessions), and municipal purposes and it was held that the guild-hall was rateable SO far as it was occupied for municipal purposes, not rateable SO far as it was occupied for the administration of justice-a strictly governmental purpose, a function of the Crown. Therefore, SO far as the English authorities are concerned, there seems to be no possible ground for the conten- tion that municipalities are not subject to this Act.

But certain American authorities are invoked which treat muni- cipal corporations as being "agencies" or "instrumentalities of the State, and as being, therefore, immune from the operation of Federal laws. The immunity of the State itself from the operation of Federal laws does not rest on mere construction; it is an immunity

111 H.L.C., 443. 2L.R. 1 H.L. (Sc.), 348. (1897) 1 Q.B., 64. 317 Q.B.D., 795. 4(1896) 2 Q.B., 143 affd. on app., 26 CLR 539

which no Act of the Federal Congress can take away. There is H. C. nothing express in our Constitution in favour of the immunity. On the other hand, there is an express provision that the Common- wealth shall not "impose any tax on property of any kind belong- ing to a State " (sec. 114). At first sight, this express immunity ought to be treated as excluding any implication of immunity from laws as to conciliation and arbitration. Under the covering section V.,

all laws made by the Parliament of the Commonwealth under the Constitution, shall be binding on the Courts, Judges, and people of every State

notwithstanding anything in the laws of any State" and under sec. 109 of the Constitution, when a law of a State is inconsistent with a law of the Commonwealth the latter shall prevail. Under sec. 106, the whole Constitution of the State is subject to the Federal Constitution-subject to the powers con- ferred by the latter Constitution on the Federal Parliament with regard to the subjects specified. But I must treat the Railway Servants' Case 1 as binding, and as involving the immunity of the State Ministers and the managers of State railways from laws as to conciliation and arbitration. The question remains: Does the immunity extend to municipalities ?

Now, the Supreme Court of the United States speaks of such a corporation as being " a political division of the State" (Van Brocklin V. State of Tennessee 2 ). " A municipal corporation is, SO far as its purely municipal relations are concerned, simply an agency of the State for conducting the affairs of government" (Atkin V. Kansas 3 ). A municipal corporation is the representative of the State and one of the instrumentalities of the State Government" and therefore the property and revenues of the municipality have been held to be not subject to Federal taxation (Pollock v. Farmers' Loan and Trust Co. 4 ). Expressions of this sort are very numerous; but I cannot find that they have any basis in our law, or that they are consistent with the history of English municipal corporations. have not had the time to satisfy myself as to the origin of this doctrine but it would seem to have found ready acceptance in a country in which, as de Tocqueville points out, municipal officials

14 C.L.R., 488, 2117 U.S., at p. 178. 3191 U.S., at p. 221. 4157 U.S., at p. 584. 26 CLR 540

OF A. collect the State taxes and carry out most of the State Statutes

(Democracy in America (1862), vol. I., p. 68). According to Ashley (Federal State, chap. XXI.), almost all the laws of the State are carried out by local officials-Judges, sheriffs, health officers. But whatever may be the history of the doctrine, it appears that the tendency of recent decisions is to draw a sharp line between the ordinary activities of a municipality and the activities of a strictly governmental charac- ter-such as the judiciary, the administration, the Legislature of the State. In the case of the United States v. Railroad Co. 1 the Court said: - " The right of the States to administer their own affairs through their legislative, executive, and judicial departments, in their own manner through their own agencies, is conceded by the uniform decisions of this Court and by the practice of the Federal Government from its organization. This carries with it an exemp- tion of those agents and instruments from the taxing power of the Federal Government." In the case of South Carolina v. United States 2, a State having taken up the business of selling intoxicating liquors, and the question being whether its agents were liable to the Federal licence tax, the Court summed up the position by saying that ' the exemption of State agencies and instrumentalities from National taxation is limited to those which are of a strictly govern- mental character." In the case of Flint v. Stone Tracy Co. 3 the Court, after reviewing the cases, said The cases unite in exempting from Federal taxation the means and instrumentalities employed in carrying on the governmental operations of the State. The exercise of such rights as the establishment of a judiciary, the employment of officers to administer and execute the laws and similar governmental functions, cannot be taxed by the Federal Government." It also said 4 :-" It is no part of the essential governmental functions of a State to provide means of transporta- tion, supply artificial light, water and the like. distinction is between the attempted taxation of those operations of the States essential to the execution of its governmental functions, and which the State can only do itself, and those activities which are of a private character." In Vilas v. Manila 5 the Court

117 Wall., at p. 327. 2199 U.S., at p. 461. 3220 U.S., at pp. 157-158. 4220 U.S., at p. 172. 5220 U.S., at p. 356. 26 CLR 541

spoke of "the dual character of municipal corporations. They exercise powers which are governmental and powers which are of a private or business character. In the one character a municipal corporation is a governmental subdivision, and for that purpose exercises by delegation a part of the sovereignty of the State. In the other character it is a mere legal entity or juristic person. In the latter character it stands for the community in the administra- tion of local affairs wholly beyond the sphere of the public purposes for which its governmental powers are conferred." I know of no American case which lays it down that municipalities are exempt, as agents of the State or otherwise, from a Federal Statute which purports to bind them-I mean, of course, a Federal Statute made within the scope of the Federal powers-in matters outside the State's essential functions of legislation, administration and the judiciary. No ground whatever has been adduced for treating the immunity of State agencies as being wider in Australia than in the United States, as extending to the making, maintenance, control and lighting of the public streets. These are not matters of the "strictly governmental character " referred to in the American

I very much doubt, also, whether it is proper, under our law, to call a municipality an agent of the State at all. The municipality is created by the State, no doubt; but not everything created by the State, even for the benefit of the people of a locality, is an agent of the State. There is an oak-tree-a forbidden tree it must not be touched-its fruit, or its leaves, or its wood. But the tree drops an acorn which takes root. The young tree is not within the pro- hibition. To be a product is not to be an agent. In the United States I find that State universities are called "agencies" of the State but under our law they would not be "agents' of the State in any relevant legal sense. The axiom Qui facit per alium facit per se is inapplicable; the acts of such agencies are not the acts of the State as principal. Are we prepared to follow the Courts of the United States in the corollaries of their doctrine that muni- cipalities are "political subdivisions" or "agencies" of the State ? An employee who is injured by the negligence of county asylum authorities (in regard to a steam mangle) has no remedy (Hughes

26 CLR 542

V. Co. of Munroe 1 ). A citizen is injured by the negligence of a municipality in blasting; he has no cause of action (Howard V. Worcester 2 ). A child is injured by the neglect of the city to keep a sound staircase for its school an action will not lie (Hill V. Boston 3 ). Under our law, municipalities are liable in damages for causing nuisances to a highway, or for neglect to repair a sewer grating (Borough of Bathurst v. Macpherson 4; and see Muni- cipal Council of Sydney v. Bourke 5; Municipal Council of Willoughby v. Halstead 6 ). If the King is the principal, and the municipality is his agent, how comes it that no attempts are made to treat municipal debentures as Government debentures, to treat the Government as liable for the wages of street cleaners, or to treat the Government as liable for the torts of municipalities Under the Statutes of most of the Australian States, and of the Commonwealth (Judiciary Act, secs, 56, &.) the King is liable in action of tort as well as of contract. In my opinion, there is nothing in the decided cases, either American or English, to justify the proposition that municipalities are exempt from the operation of Federal laws, or, in particular, from the operation of laws made under sec. 51 (xxxv.) of the Constitution.

GAVAN DUFFY J. I agree in the opinion of the majority of the Court, but I do not propose to deliver any reasoned judgment until we have dealt with the whole matter.

POWERS J. I agree with my learned brothers who hold that municipal corporations established under State laws are not, with regard to the making, maintenance, control or lighting of public streets, instrumentalities of State Government, and, therefore, are not, in respect of such operations, exempt from Commonwealth legislation under sec. 51 (xxxv.) of the Constitution.

The case was further argued on 20th, 21st, 22nd, 23rd, 26th and 27th May before Barton, Isaacs, Higgins, Gavan Duffy, Powers and Rich JJ., when reference was made to Jumbunna Coal Mine,

1147 U.S., 49. 2153 Mass., 426, 3122 Mass., 344. 44 App. Cas., 256. 5(1895) A.C., 433. 622 C.L.R., 352. 26 CLR 543

No Liability, v. Victorian Coal Miners' Association 1; Fatal H. C. Accidents Inquiry (Scotland) Act 1895 (58 &59 Vict. C. 36), sec. 7; Federated Engine-Drivers and Firemen's Association of Australasia V. Broken Hill Proprietary Co. [No. 1] 2; R. v. Deputy Industrial Registrar; Ex parte J. C. Williamson Ltd. 3; R. v. Commonwealth Court of Conciliation and Arbitration Ex parte Allen Taylor &Co. 4; Merchant Service Guild of Australasia v. Newcastle and Hunter River Steamship Co. [No. 2] 5; Australian Tramway Employees' Association v. Prahran and Malvern Tramway Trust 6 Collecting Societies and Industrial Assurance Companies Act 1896 (59 &60 Vict. e. 26); Conciliation Act 1894 (S.A.) (No. 598); Industrial Conciliation and Arbitration Act 1894 (N.Z.) (No. 14 of 1894): Federated Saw Mill &. Employees' Association of Australasia V. James Moore &Sons Proprietary Ltd. 7 Industrial Schools Act 1866 (29 &30 Vict. c. 118), sec. 5; Industrial Conciliation and Arbitration Act Amendment Act 1898 (N.Z.) (No. 40 of 1898); Industrial Conciliation and Arbitration Act 1900 (N.Z.) (No. 51 of 1900) Industrial Conciliation and Arbitration Amendment Act 1901 (N.Z.) (No. 37 of 1901); In re Professional Officers' Association 8 Commonwealth Conciliation and Arbitration Act 1904-1915, secs. 18, 19, 55 Australian Workers' Union v. Pastoralists' Federal Council 9 Combination of Workmen Act 1825 (6 Geo. IV. c. 129); Conspiracy and Protection of Property Act 1875 (38 &39 Vict. c. 86), sec. 3; Trade Union Act 1871 (34 &35 Vict. c. 31), sec. 23 Trade Union Act Amendment Act 1876 (39 &40 Vict. c. 22), sec. 16; Trade Dis- putes Act 1906 (6 Edw. VII. c. 47); Quinn v. Leathem 10; Conway V. Wade 11; Larkin v. Long 12; Clancy v. Butchers' Shop Employees' Union 13; Industrial Conciliation and Arbitration Act 1900 (W.A.) (64 Vict. No. 20); Christchurch United Tramway &. Union of Workers v. Christchurch Tramway Co. 14; Auckland Carters' Industrial Union v. Lovett 15; Tramways Case [No. 2] 16;

16 C.L.R., 309, at pp. 332, 336 352, 358, 364-367. 212 C.L.R., 398, at pp. 413, 420, 315 C.L.R., 576. at p. 578. 415 C.L.R., 586. at p. 607. 516 C.L.R., 705. 617 C.L.R., 680, at pp. 696, 700. 78 C.L.R.. 465, at pp. 488, 490, 815 Arb. Rep. (N.S.W.), 401. 923 C.L.R., 22. 10(1901) A.C., 495. 11(1909) A.C., 506. 12(1915) A.C.. 814. 131 C.L.R., 181. 142 N.Z. Gaz. L.R., 104. 153 N.Z. Gaz. L.R., 31. 1619 C.L.R., 43, at p. 122. 26 CLR 544

Mr. Mann says that an industrial dispute within the meaning of sec. 51 (xxxv.) is a dispute between employers and employees, whatever may be the nature of the work in which such employees are engaged, or of the question on which the parties are disputing. Mr. Dixon says that it is a dispute arising in and in relation to the systematic performance of work done in satisfying human requirements by the supply of services and commodities, and that such a dispute has no necessary relation to the existence of employers or employees. Sir Edward Mitchell says that it is a dispute between manual wage earners and their employer, or among manual wage earners, in an industry, that is to say, in some trade, business, or other similar operation carried on for gain. Mr. Starke says that it is neither more nor less than a trade dispute. Mr. Lewis says that

26 CLR 580

it is a dispute between employers and workmen, or between work-

men and workmen, in or in connection with manufacturing. trans- FEDERATED

port, or other trading or commercial operations carried on by the employers.

Counsel arrived at these discrepant results by considering the meaning of the word "industrial" in such expressions as "indus- trial peace," "industrial turmoil," "industrial unrest," by citing instances of the use of the word "industrial" by publicists and economic writers, and by a copious reference to the demands which Gavan Duffy J. from time to time have been made by or on behalf of the working

classes in Great Britain and elsewhere but we were not furnished with a relevant example of the use of the phrase industrial dispute except in certain legislative enactments in Australia and New Zealand. On 31st March 1892 there came into operation in New South Wales an Act called " An Act to provide for the establishment of Councils of Conciliation and of Arbitration for the settlement of Industrial Disputes." The preamble is as follows: "Whereas it is believed that the establishment of Councils of Conciliation and of Arbitration for the settlement of disputes between employers and employees would conduce to the cultivation and maintenance of better relations, and more active sympathies, between employers and their employees, and would be of great benefit, in the public interest, by providing simple methods for the prevention of strikes, and other disputes, from the effects of which industrial operations may suffer serious and lasting injury, and the welfare and peaceful government of the country be imperilled." Sec. 23 provides that a claim or dispute under this Act shall include any matter as to which there is a dis- agreement between any employer and his employees respecting certain relations set out in the section. These relations cannot be said to arise exclusively in the case of employees doing manual labour, though it is probable that the Legislature had only manual labourers in view. Sec. 28 declares that the Act may be cited for all purposes as the Trade Disputes Conciliation and Arbitration Act 1892. I think that the industrial disputes sought to be settled by conciliation under this Act are disputes between employers and employees (or perhaps only such of these as perform manual labour) which if not settled would, by means of strikes or otherwise, be

26 CLR 581

likely to produce serious and lasting injury to the industrial opera- tions carried on in the community.

The next in point of date is the New Zealand Act, No. 14 of 1894, FEDERATED intituled " An Act to encourage the Formation of Industrial Unions and Associations, and to facilitate the Settlement of Industrial Disputes by Conciliation and Arbitration." Its short title is the Industrial Conciliation and Arbitration Act 1894. The term "industrial dis- pute " is thus defined in sec. 2: " 'Industrial dispute means any dispute arising between one or more employers or industrial unions, trade unions, or associations of employers and one or more Gavan industrial unions, trade unions, or associations of workmen in relation to industrial matters as herein defined," and industrial matters are defined as meaning " all matters or things affecting or relating to work done or to be done, or the privileges, rights, or duties of employers or workmen in any industry, and not involving questions which are or may be the subject of proceedings for an indictable offence." "Industry" means any business, trade, manufacture, undertaking, calling, or employment of an industrial character.

The next use of the term "industrial dispute" is to be found in the South Australian Conciliation Act 1894, which came into force on 1st January 1895, it is intituled " An Act to facilitate the Settlement of Industrial Disputes." The expression "industrial disputes " is defined in sec. 3 as including all disputes relating to industrial matters, and the expression "industrial matters" is defined as including all matters relating to pay, wages, hours, privileges, rights, or duties of employers or employees in any industry, and "industry" means any avocation, business, trade, undertaking, calling, or employment. The machinery of the Act seems to be based on the assumption that industrial disputes can arise only between employers and employees.

On 1st May 1899 an Act came into force in New South Wales intituled 'An Act to make provision for the prevention and settlement of Trade Disputes." It is founded on the British Act 59 &60 Vict. c. 30. It does not contain any reference to industrial disputes, and I need say no more about it.

On 5th December 1900 an Act of Parliament was passed in

26 CLR 582

OF A. Western Australia which is intituled "An Act to facilitate the Settle-

ment of Industrial Disputes by Conciliation and Arbitration." It is founded on the New Zealand Act of 1894, but in the definition of the word "industry" it uses the words "Any business, trade, manufacture, undertaking, calling, or employment in which workers are employed," instead of the words "any business, trade, manufac- ture, undertaking, calling, or employment of an industrial character."

The Constitution Act (63 &64 Vict. c. 12) received the Royal Assent on 9th July 1900.

In my opinion "an industrial dispute" then meant a dispute existing in an industry or industries, and the term 46 an industry," which had once signified the labour and capital employed in the production of a class of marketable commodities, had gradually expanded SO as to include the labour and capital employed in any branch of trade or business carried on for the purpose of profit and wholly or mainly by means of manual labour, and finally, by an easy metonymy, to apply to the aggregate of those who contributed such labour and capital and to the aggregate of the business undertakings in which such labour and capital are used. This was a natural evolution. The earliest manufacturer or maker conceivably col- lected his own materials, made his own tools, and distributed the work of his hands. Then came economic co-ordination and as time went on producers specialized and what had been one industry became many, but within the connotation of the term "industry" there always remained the presence of manual labour. We speak of the mining industry, of the smelting industry, of the metal grinding industry and the transport industry, but not of the insur- ance industry, the broking industry or the banking industry. But, though there cannot be an industry without manual labour, many and perhaps all industries require labour of another kind, and their operations may be impeded or prevented by the with- drawal of such labour. A dispute arising in any industry would be no less an industrial dispute because some or even all of the employees involved in that dispute were not manual labourers. If an indus- trial dispute is a dispute arising in an industry, and an industry is what I have indicated, the question in this case must be answered in the negative, but, as in other cases other questions have arisen

26 CLR 583

which depend for their solution on the meaning of the term indus- H. trial dispute," I propose to further consider the meaning of this term. It has been strongly urged on us that any persons engaged in an industry may dispute with any other persons SO engaged and thus constitute an industrial dispute, but in my opinion the dis- putants must be employers on one side and employees banded or united together on the other. It is true that employers have always competed and disputed with one another in their endeavours to buy cheap and to sell dear, and employees have struggled indivi- dual against individual and class against class, but in the year 1900 Gavan these rivalries and contentions were not known as industrial dis- putes. They may be SO called at the present day; if they are SO called it is mainly because the Commonwealth Parliament has adopted a new nomenclature when exercising what it considered to be the powers conferred on it by sec. 51 (xxxv.) of the Constitu- tion. It was also urged that an industrial dispute is a dispute about industrial matters, and that a disputant may insist on the fulfilment of any condition as a condition precedent to his entering into or continuing in the relation that exists between master and servant, or at all events on the concession of anything which has been demanded by or on behalf of the industrial classes in England and elsewhere during the economic evolution which has been pro- ceeding for some generations. Long before the year 1900 the industrial classes, and more especially those employed in large industries, were seeking for the amelioration of their lot in matters which did not directly affect the performance of their duties- for better education, better housing, the recognition of collective bargaining, and SO on. Some of these concessions were asked from the State, some from employers; and whatever the employer could concede might, of course, be demanded from him as a condition pre- cedent to the establishment or continuance of the relation of master and servant. But such conditions precedent are not the conditions referred to in the familiar phrase which I have just quoted. The phrase means merely that an industrial dispute is a dispute about the conditions under which work is done, that is to say, the circum- stances directly affecting the employee in the performance of his duties. When we look at the language of sec. 51 (xxxv.) of the

26 CLR 584

Constitution and recall the evils which it was designed to remedy, the intention of the Legislature becomes abundantly clear. Dis- putes between employers and employees with respect to wages and conditions directly affecting the performance of the duties of employees, which began in combinations by means of trade unions and ended in strikes and disorder and sometimes in violence, had paralyzed some of the great Australian industries. In the interest of the community it was necessary to put an end to such disputes, and it was impossible for the Legislature of any State to deal Gavan Duffy J. effectually with them by separate action. It was necessary to

have one central control, and that control was entrusted to the Commonwealth Legislature by sec. 51 (xxxv.) of the Constitution. We have already held that the effect of this provision is to enable the Commonwealth Court of Conciliation and Arbitration to settle, not merely disputes which arise in the natural order of events, but those which are created for the express purpose of invoking its jurisdiction and SO establishing standard industrial conditions throughout Australia. We SO held because, whatever may have been the intention of the Legislature, the words of the sub-section are fairly capable of that meaning. I do not think that they are fairly capable of such a meaning as will enable the Court not only to establish standard conditions of labour throughout Australia, but also to impose on all employers and employees in Australian industries such further collateral conditions as it thinks fit, and SO take possession of the whole of the industrial energy throughout the Commonwealth. In my opinion an "industrial dispute within the meaning of sec. 51 (xxxv.) of the Constitution is one in which a number of employees organized or united together are in contest with their employer or employers with respect to the remuneration of the employees, or with respect to any matter directly affecting them in the performance of their duties, in an undertaking or undertakings carried on for the purpose of gain and wholly or mainly by means of manual labour.

For the reasons I have stated I think the question submitted to us should be answered in the negative.

POWERS J. The Court in this case is asked for its opinion on a

26 CLR 585

question of law submitted to it by the Deputy President of the Commonwealth Court of Conciliation and Arbitration. During the hearing of the arguments in the case the question was limited by consent of the parties and the Court. The question now reads: "Has the Commonwealth Court of Conciliation and Arbitration power or jurisdiction to determine by an award the dispute between the organization and the municipal corporations, constituted under or subject to the provisions of the three Acts mentioned in par. 8 of this case, SO far as the dispute relates to such operations of the said municipal corporations as consist of the making, maintenance, control and lighting of public streets or any of them ? "

The only objection to the jurisdiction of the Court raised in the facts stated in the case is that referred to in par. 6, namely, that 'the municipal corporations referred to are not subject to the jurisdiction of the Commonwealth Court of Conciliation and Arbitra- tion, on the ground that they are State instrumentalities." This Court on 19th May last decided by a majority that municipal corporations, SO far as their operations consist of the making, maintenance, control and lighting of public streets, are not State instrumentalities in the sense that they are exempt from the pro- visions of the Commonwealth Conciliation and Arbitration Act 1904- 1915. Municipal corporations, in view of the decision of the Court referred to, must, in considering the question put, be regarded as ordinary corporate bodies employing labour.

Counsel for the respondents then contended that, as the question was whether the Court had jurisdiction to determine by an award the dispute between the organization and the municipal corporations without limiting it to the ground stated in the case, they were entitled to show that the Court had no jurisdiction to make an award on the further ground that, assuming the municipal corpora- tions were not State instrumentalities, the Court could not make an award in respect of the operations referred to, for three reasons -(1) That the operations referred to were not matters about which an "industrial dispute " within the meaning of the Common- wealth Conciliation and Arbitration Act, or the Constitution, could arise, on the ground that "industrial" disputes--cognizable by the Court-could only arise in respect of "trade disputes in, or in

26 CLR 586

connection with, an industry," or trade, or business, carried on for profit. (2) That the term "industrial disputes " at the time the Constitution was passed, both in England and Australia, was gener- ally used in reference to "trade disputes" with manual labourers only, and never to disputes between employers and employees not

OF engaged in manufacture or production, or in the transportation of

goods for profit. That disputes as to wages, or conditions of employ- ment, between employers and employees not engaged in manufac- ture, trade, or business, in the ordinary sense of the terms, would not, at the date of the Constitution, be considered "industrial disputes"; and, therefore, persons SO employed could not now be held to be parties to any industrial dispute within the meaning of the words "industrial dispute" in pl. XXXV. of sec. 51. (3) That, as there is no "industry" properly called the municipal and shire council industry, the organization could not be a party to an "indus- trial dispute" within the meaning of those words in the Act.

It was also contended that the organization was not legally regis- tered as "an organization," and could not, therefore, be a party to an industrial dispute. It was decided by the Court that, as the last question was not raised in the case, it would not, in answering the question submitted, consider the objection to the registration of the organization. I may, however, say that I agree with my brother Higgins, and for the reasons given by him, that the Court has jurisdiction to make an award on a dispute referred to the Court under a reference, where the claimant is an association of persons whether duly registered as an organization or not. The special case refers to the dispute in question as one referred to the Court-not submitted by plaint. It was also pointed out during the argument that the association registered was one of "employees connected with the construction, maintenance or cleaning of any road, street, footpath or channel or other undertaking carried out by any municipal council in Australia." The certificate of regis- tration issued was for an association of employees engaged in con- nection with the " municipal industry." Sec. 4 of the Common- wealth Conciliation and Arbitration Act 1904-1915 includes as "industrial matters" " All matters relating to work, pay, wages, reward, hours, privileges, rights, or duties of employers or employees,

26 CLR 587

or the mode, terms, and conditions of employment or non-employ- H. ment; and in particular, but without limiting the general scope of this definition, includes all matters pertaining to the relations of employers and employees, and the employment, preferential employment, dismissal, or non-employment of any particular persons, or of persons of any particular sex or age, or being or not being members of any organization, association, or body, and any claim arising under an industrial agreement, and includes all questions of what is fair and right in relation to any industrial matter having regard to the interests of the persons immediately concerned and of society as a whole." "Industry" includes: ' (b) any calling, service, employ- ment, handicraft, or industrial occupation or avocation of employees, on land or water." In my judgment, undertakings and operations of municipal corporations-such as street making-are "industrial matters" within the meaning of the words used in sec. 4.

The only question left on this point, in my opinion, is whether the words industrial dispute' in the Constitution can be properly held to include all that the Commonwealth Concitiation and Arbitra- tion Act includes as "industrial matters." The question has been before the Court in other cases, to which I propose to refer; and the majority of the members of the Court (if not all of them) have,

I think, held that the definition of 'industrial matters" in the Act is not wider than the meaning Parliament was authorized-by pl. XXXV. of sec. 51 of the Constitution--to put on them. The first case in which the question was fully dealt with was the Jumbunna Case 1. In that case the learned Chief Justice of this Court said 2: It must, of course, be a dispute relating to an industry,' and, in my judgment, the term 'industry' should be construed as including all forms of employment in which large numbers of persons are employed the sudden cessation of whose work might prejudicially affect the orderly conduct of the ordinary operations of civil life." The late Mr. Justice O'Connor said 3 The words are free from ambiguity, and must be construed with their ordinary grammatical meaning. So construed, the definition includes within the term

industry every kind of employment for pay, hire, advantage, or

16 C.L.R., 309. 26 C.L.R., at p. 332. 36 C.L.R., at p. 365. 26 CLR 588

reward except agricultural, viticultural, horticultural, or dairying pursuits" (which were excepted by the Act). "It meant the two English words in their ordinary meaning conveyed to ordin- ary persons, and the meaning of these words seems to be now much what it was then" (at date of Constitution). After referring to the meaning of the word "industrial" in several dictionaries, the learned Judge pointed out that "the dictionaries apparently agree in recog- nizing both uses of the words 'industry' and 'industrial' as referring to labour in the production and manufacture of goods, and as refer- ring to labour of any kind," and that Acts of Parliament referred to during the argument extended the use of the word to every kind of employment. Referring to the use of the word in the Constitu- tion, O'Connor J. said 1: "And it is certainly fair to assume that the expression 'industrial disputes' was at the time of the passing of the Acts commonly used in Australia" (at the time the Constitution was established) " to cover every kind of dispute between master and workman in relation to any kind of labour." He further said 2 :- After an examination of all these sources of informa- tion as to the sense in which the word 'industrial' in connection with labour disputes was used at the time of the passing of the Constitution, I have come to the conclusion that it was used in two senses-in the narrower sense contended for by the appellants, and in the broader sense contended for by the respondents. There is nothing in the Constitution to show that the word was intended to be used in the narrower sense. On the contrary, the scope and purpose of sub-sec. XXXV. would lead to an opposite conclusion." Isaacs J. said 3 "I do not rest my judgment on the narrower view, as in my opinion the constitutional power is broad enough to include even the larger sense of industry."

My brothers Isaacs, Higgins and Rich have dealt SO fully with the use of the words "industry," industrial matters," " industrial disputes," "trade disputes" and the word "industrial "-and the meanings given to the words mentioned before 1900-that I do not see my way to add anything useful to what they have said on that matter.

16 C.L.R., at p. 366. 26 C.L.R., at p. 367. 36 C.L.R., at p. 371. 26 CLR 589

The only question left to be decided, on the special case submitted, is whether the work of making, maintaining, controlling and lighting public streets by employees employed by municipal corporations is an industrial matter about which an industrial dispute within the meaning of the Commonwealth Conciliation and Arbitration Act and of the Constitution (pl. XXXV. of sec. 51) can arise. Assuming, although not admitting, that the work must be done by " manual labourers," as the respondents contend it must, there can be an industrial dispute between the corporations and the employees, for the claims are made on behalf of manual labourers. The dispute here is one between employers and employees. Assuming that it must, as contended by the respondents, be a dispute by trade unionists recognized as such in England in 1900, there can be an industrial dispute in this case, because, as my brothers Isaacs, Higgins and Rich have shown, municipal employees employed in ordinary municipal works were registered and recognized as trade unionists before 1900. In the case of Cope v. Crossingham 1, in the Court of Appeal, the Master of the Rolls in delivering his judgment said "The Municipal Employees' Association is a registered trade union

with branches," &. It appears from the report of the case that the Association was a trade union constituted with branches, and was a society registered under the Trade Union Acts of 1871 and 1876. In 1901 a branch of the society called the Woolwich Branch was constituted. It is clear, from what has been referred to, that in 1900 municipal employees were recognized as engaged in industrial work and as trade unionists. Trade unionists who are employed by the municipal corporations in connection with the making, maintenance and lighting of streets, and who are shown in the special case as members for whom the association is claiming wages and conditions of labour, include labourers, quarrymen, stone-masons, engine-drivers, car- penters, bridge carpenters, plumbers, carters. It was not seriously contended that the work of making streets (including necessary bridges, culverts, quarrying, &.) would not be "industrial' if carried on by private contractors for profit, or that contractors carrying out contracts for making streets, bridges, &., were not

125 T.L.R., 593. 26 CLR 590

carrying on a trade or business in the ordinary sense of the term. In the special case it is stated that there were at the date of the reference of the dispute into Court one hundred and thirty-seven contractors carrying out works by contract for municipal, borough and shire coun- cils, and that many of the municipal employees-members of the association-were employed by the contractors-respondents in the dispute-on works for the Councils referred to. It was admitted that "quarrying" (a. necessary work in connection with street making) by a private employer would be "industrial," and that an industrial dispute could arise between him and his employees engaged at work in a quarry but it was asserted that if a municipal corporation acquired the quarry and employed the same men no industrial dispute could arise, because the Council was not carrying on an industry" or a trade or business for profit. So far as the question in this case is concerned, as the argument proceeded the ground mostly relied upon (after the Councils were held not to be exempt as State instrumentalities) was that the work was not carried on by the municipal corporations for profit in the ordinary sense of the term, although it would generally speaking be carried on by the Councils themselves to save contractors' profits. If that argument were sufficient, then a philanthropist who acquired a clothing factory and employed the same employees as the previous owner had employed would not be engaged in an occupation about which an industrial dispute could arise, if he distributed the clothes made to the poor free of charge or even if he distributed them to the poor at the bare cost of production. If the contention of the respondents is correct, a private company carrying on a ferry would be engaged in an industrial occupation. If a municipal corporation carried it on, it would not be industrial. The same argument would apply to baths, bridge-building, quarries, sanitary contracts, gas-making for lighting streets and public halls, municipal building of houses or halls, and many other similar industrial under- takings. Even coal-mining for use on municipal railways or tram- ways would not be industrial work if the contention of the respon- dents is correct. If the works in question are carried out by con- tractors or by private individuals it is said to be industrial, but not

26 CLR 591

industrial within the meaning of the Arbitration Act or Constitu- H. C. tion if carried out by municipal corporations. I cannot accept that view.

I agree with those of my learned brothers who hold that the Commonwealth Court of Conciliation and Arbitration has juris- diction to determine by an award a dispute between an organization or association of employees and municipal corporations SO far as the dispute relates to such of the operations of municipal corpora- tions as consist of the making, maintenance, control and lighting of public streets or any of them, and that the answer to the ques- tion should be in the affirmative.

Question answered in the affirmative. Solicitors for the claimant organization, Farlow &Barker. Solicitors for the respondents, Malleson, Stewart, Stawell &Nanki- vell; Maddock, Jamieson &Lonie; T. W. K. Waldron; E. J. D. Guinness, Crown Solicitor for Victoria; J. v. Tillett, Crown Solicitor for New South Wales; A. Banks-Smith, Crown Solicitor for Tas- mania.