R v Gates - [1928] HCA 39

41 CLR 519

GATES AND ANOTHER;

Ex PARTE MALING.

ON REMOVAL FROM THE SUPREME COURT OF

NEW SOUTH WALES TO THE HIGH COURT. Constitutional Law-Inconsistency of laws-Commonwealth and State Acts-Con-

tract-ConstructionTrade and commerce with foreign countries or between States-Secret commission paid to agent-Evidence-Voluntary statements- The Constitution (63 &64 Vict. c. 12), sec. 51 (1.)-Secret Commissions Act 1905 (No. 10 of 1905), sec. 4*-Secret Commissions Prohibition Act 1919 (N.S.W.) Nov. 12, 13, (No. 26 of 1919), sec. 3*-Judiciary Act 1903-1927 (No. 6 of 1903-No. 9 of 1927), sec. 40A.

In a prosecution for an offence under sec. 3 of the Secret Commissions Pro- hibition Act 1919 (N.S.W.) the accused was convicted of and sentenced for corruptly receiving from a certain company a sum of money as a reward for provides, by sec. 4, as follows :-

shown, in relation to the principal's

41 CLR 520

having recommended the Sydney Municipal Council to accept the company's tender for erecting a steam-raising plant in the Council's electric power station in New South Wales. The Council did accept the tender: and from the contract between the Council and the company it was apparent that considerable part of the material to be used would be manufactured in Great Britain and elsewhere and imported into Australia after the date of the agreement.

Held, by the whole Court, (1) that the Council in relation to the contract was not engaged in trade and commerce with other countries, and among the States within the meaning of sec. 51 (I.) of the Constitution (2) that the Commonwealth Act, the Secret Commissions Act 1905, had no application to the case and (3) that the provisions of sec. 3 of the State Act, the Secret Commissions Prohibition Act 1919, were not invalid.

By Knox C.J., Isaacs, Gavan Duffy and Powers JJ.: The contract, on its true construction, was an entire and indivisible contract to do the necessary work and to provide the necessary materials to bring into existence, complete and ready for commercial use, a distinct unit, namely, a steam-raising plant affixed

By Starke J.: The company's offer was made in Australia and was to create a steam-raising plant here that offer being purely local or domestic, the fact that the company would itself engage in an act of foreign trade in bringing to Australia materials necessary for the plant in no wise altered the local or

APPEAL removed from the Supreme Court of New South Wales.

On 31st July 1928 Silas Young Maling was charged before a Stipendiary Magistrate for that between 5th September 1926 and 5th February 1927 he, being an agent within the meaning of the Secret Commissions Prohibition Act 1919 (N.S.W.), of the Municipal Council of Sydney, did at Sydney corruptly receive from Babcock &Wilcox Ltd. (a corporation registered under Part III. of the Companies to influence the agent to do or to leave

person in relation to his principal's undone something contrary to bis duty."

affairs or business; or if any person The Secret Commissions Prohibition

Grounds of appeal

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

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

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

Consideration

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

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

Continue reading R v Gates

Details

AGLC: R v Gates [1928] HCA 39
Case: [1928] HCA 39
Decision Date: 26 November 1928

CaseChat Overview and Summary

The case of *R v Gates* involved a prosecution under the *Secret Commissions Prohibition Act 1919* (NSW). The accused, Silas Young Maling, was an agent for the Municipal Council of Sydney and was charged with corruptly receiving a substantial sum of money from Babcock & Wilcox Ltd. This payment was alleged to be a reward for recommending the Council to accept the company's tender for steam-raising plant for a power station. The contract between the Council and Babcock & Wilcox Ltd. involved the supply and erection of this plant, with a significant portion of the materials to be manufactured overseas and imported into Australia. The matter was removed to the High Court of Australia from the Supreme Court of New South Wales due to a constitutional question concerning the potential inconsistency between Commonwealth and State legislation.

The central legal issues before the High Court were whether the contract for the steam-raising plant constituted "trade and commerce with other countries" within the meaning of section 51(I) of the Australian Constitution, and consequently, whether the Commonwealth's *Secret Commissions Act 1905* applied to the exclusion of the New South Wales Act. The applicant argued that if the State Act purported to apply to transactions involving foreign trade, it was invalid due to inconsistency with the Commonwealth Act. A further issue concerned the admissibility of certain statements made by the applicant to a police inspector, which the applicant contended were improperly admitted as evidence due to being induced by threats.

The High Court, by majority, held that the contract, on its true construction, was an entire and indivisible contract for the provision of work and materials to create a complete steam-raising plant, affixed to the land in New South Wales. This was not considered to be "trade and commerce with other countries" for the purposes of section 51(I) of the Constitution, even though materials were imported. Therefore, the Commonwealth *Secret Commissions Act 1905* did not apply to the transaction. Consequently, the provisions of the New South Wales *Secret Commissions Prohibition Act 1919* were not invalid due to inconsistency with the Commonwealth Act. The Court also found that the statements made by the applicant to the police inspector were voluntary and properly admitted into evidence.

The rule nisi for a writ of prohibition was discharged, and the conviction of Silas Young Maling under the New South Wales Act was affirmed.

Orders