R v Clarence

Case [1926] HCA 48


38 CLR 399

THE STATE OF VICTORIA AND OTHERS

THE COMMONWEALTH Constitutional Law-Powers of Commonwealth Parliament-Granting financial

assistance to any State-The Constitution (63 &64 Vict. c. 12), secs. 51, 96, 99- Federal Aid Roads Act 1926 (No. 46 of 1926), secs. 2, 3, Schedule-Surplus Revenue Act 1910 (No 8 of 1910). PracticeParties--Action by State against Commonwealth-Declaration of invalidity

of Commonwealth statute-Joinder of other States as defendants-Rules of the Nov. 29, 30. High Court 1911, Part I., Order II., r. 9.

Held, by the whole Court, that the Federal Aid Roads Act 1926 is a valid Gavan Duffy, exercise of the power conferred upon the Parliament of the Commonwealth by sec. 96 of the Constitution to grant financial assistance to any State on such terms and conditions as the Parliament thinks fit.

In an action brought in the High Court by two States and their respective Attorney-Generals the plaintiffs asked for declarations that the Federal Aid Roads Act 1926 was ultra vires the Parliament of the Commonwealth and void, that any agreement made by the Commonwealth with any State in the form or to the effect set out in the Schedule to that Act was ultra vires the Common- wealth and void, and that all moneys which purported to be appropriated

38 CLR 400

under that Act were part of the surplus revenue of the Commonwealth within the meaning of the Constitution and the Surplus Revenue Act 1910, and also for an injunction restraining the Commonwealth from paying to any State any sum under or in pursuance of such Act or under any agreement with any State in the form or to the effect set out in the Schedule to the

Held, by Knox C.J., Isaacs, Gavan Duffy, Powers, Rich and Starke JJ. (Higgins J. dissenting), that the action was properly constituted whether the decision of the Court were in favour of or against the validity of the Act.

ACTION referred to the Full Court.

An action was brought in the High Court by the State of Victoria and the Attorney-General thereof, and the State of South Australia and the Attorney-General thereof, against the Commonwealth in which the statement of claim was as follows :-

1. On 11th August 1926 an Act intituled " An Act to authorize the execution by the Commonwealth of agreements between the Commonwealth and the States in relation to the Construction and Reconstruction of Federal Aid Roads, and to make provision for the carrying out thereof," the number of such Act being 46 of 1926, and the short title thereof being the Federal Aid Roads Act 1926, was enacted by the Parliament of the Commonwealth, and was assented to by His Excellency the Governor-General of the Common- wealth on 16th August 1926.

2. The said Act purports (inter alia) to authorize the execution by and on behalf of the Commonwealth of agreements, in the form contained in the Schedule thereto, between the Commonwealth and each State of the Commonwealth, and to appropriate the Consolidated Revenue Fund…

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AGLC
R v Clarence [1926] HCA 48
Case
[1926] HCA 48
Decision Date

CaseChat Overview and Summary

The High Court of Australia considered an action brought by the State of Victoria and its Attorney-General, and the State of South Australia and its Attorney-General, against the Commonwealth. The plaintiffs sought declarations that the Federal Aid Roads Act 1926 was invalid and ultra vires the Commonwealth Parliament, that any agreements made under the Act were void, and that moneys appropriated by the Act constituted surplus revenue. They also sought an injunction to restrain the Commonwealth from paying moneys to any State under the Act or related agreements.

The central legal issue before the Court was whether the Federal Aid Roads Act 1926 was a valid exercise of the Commonwealth Parliament's legislative power, specifically under section 96 of the Constitution, which permits the Commonwealth to grant financial assistance to any State on such terms and conditions as Parliament thinks fit. The plaintiffs argued that the Act was not a law for granting financial aid but rather a law relating to road-making, and that the conditions imposed by the Act were beyond the scope of section 96, potentially infringing other constitutional provisions.

The Court, by a majority, held that the Federal Aid Roads Act 1926 was a valid enactment. It found that the Act was plainly warranted by section 96 of the Constitution, which grants the Commonwealth Parliament broad power to provide financial assistance to the States on terms and conditions determined by Parliament. The Court determined that the Act was not affected by section 99 of the Constitution, which prohibits preferences between States, nor by any other constitutional provisions. Consequently, the action was dismissed.

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