Rothmans of Pall Mall (Aust) v State of Western Australia & Anor

The High Court of Australia considered an appeal by Rothmans of Pall Mall (Australia) Limited against the State of Western Australia and the Tobacco Institute of Australia Limited. The dispute concerned the validity of certain provisions of the Tobacco Control Act 1990 (WA) and the Tobacco Control Regulations 1990 (WA), which imposed restrictions on tobacco advertising and promotion. Rothmans argued that these provisions were invalid to the extent that they purported to regulate the advertising of tobacco products in a manner that conflicted with the Trade Practices Act 1974 (Cth).

The central legal issue before the High Court was whether the State of Western Australia had validly exercised its legislative power in enacting the Tobacco Control Act and Regulations, or whether these laws were rendered invalid by reason of inconsistency with the Commonwealth's Trade Practices Act, specifically concerning the prohibition of certain advertising. The court was required to determine the scope of the corporations power under s 51(xx) of the Constitution and its interaction with state legislative powers in the context of regulating corporations engaged in interstate trade and commerce.

The High Court, by majority, held that the impugned provisions of the Tobacco Control Act and Regulations were invalid. The majority reasoned that the Act, by prohibiting certain forms of advertising, had the effect of preventing corporations, including Rothmans, from engaging in conduct that was permitted, or indeed encouraged, by the Trade Practices Act. This created an inconsistency between the Commonwealth and State laws, with the result that the State laws were rendered inoperative to the extent of the inconsistency, pursuant to s 109 of the Constitution. The court affirmed that the Commonwealth Parliament, in exercising its corporations power, could validly legislate with respect to the conduct of trading corporations, including their advertising practices, and that such legislation would prevail over inconsistent state laws.