W & A McArthur Ltd v Queensland

W. & A. McArthur Ltd. (the plaintiff), a company incorporated and registered in New South Wales, brought an action in the High Court of Australia against the State of Queensland and its relevant officials. The dispute concerned the validity of the Queensland Profiteering Prevention Act 1920, specifically section 12, which prohibited the sale of commodities at prices exceeding those declared by the Commissioner of Prices. The plaintiff, which held no stock in Queensland but employed travellers there to sell goods from its Sydney warehouse for delivery in Queensland, alleged that these sales were being conducted at prices higher than those permitted by the Act and its subsequent notifications, and that the defendants threatened to prosecute its agents and enforce the Act, thereby hindering its inter-State trade.

The central legal issues before the High Court were whether the Queensland Profiteering Prevention Act 1920, as applied to the plaintiff's business operations, was invalid due to its conflict with section 92 of the Australian Constitution, which guarantees freedom of inter-State trade, commerce, and intercourse. The court was required to determine the scope of section 92 and whether the Act's provisions, which regulated the prices of goods sold within Queensland, extended to and unlawfully restricted inter-State transactions involving goods originating from outside the state. Additionally, the court considered whether, as a matter of statutory construction, the Act was intended to apply to such inter-State sales.

A majority of the High Court (Knox C.J., Isaacs, Rich, and Starke JJ., with Higgins J. dissenting on this point) held that the Profiteering Prevention Act 1920, in so far as it applied to sales by the plaintiff's travellers of goods stipulated to come from Sydney for delivery in Queensland, was invalid as being in conflict with section 92 of the Constitution. The majority reasoned that the Act, by imposing price restrictions on these inter-State sales, directly interfered with the freedom of inter-State trade guaranteed by the Constitution. The court also considered previous decisions, with a majority finding that *Duncan v. State of Queensland* was wrongly decided and *Foggitt, Jones & Co. v. State of New South Wales* had been correctly decided, indicating a consistent approach to the interpretation of section 92 in relation to state legislation affecting inter-State commerce.

The court's decision meant that the Queensland Profiteering Prevention Act 1920 could not be enforced against W. & A. McArthur Ltd. in relation to sales of goods originating from New South Wales and destined for delivery in Queensland. The Act was deemed invalid to the extent that it purported to regulate inter-State trade, thereby upholding the constitutional protection afforded to such commerce.