This answer raised the question of the power of the New South Wales Parliament to pass the Act in question, and this was the main matter discussed at the hearing.

A preliminary objection was raised on behalf of the defendant State that the Constitution did not justify Parliament in conferring judicial powers on the Commission to ensure the observance of inter-state free trade. The Commission over-ruled the objection, holding that Part V. of the Act was a valid exercise by Parliament of the power contained in section 101 of the Constitution.

After hearing the evidence and the arguments the majority of the Commission consisting of Commissioners GEORGE SWINBURNE, and N. LOCKYER found that the Wheat Acquisition Act was invalid as being an infringement of section 92 of the Constitution; that the acts complained of were also an infringement of that section; and therefore they granted an injunction in the terms asked for and ordered the defendants to pay the plaintiffs' costs. The Chief Commissioner, PIDDINGTON, K.C., dissented, holding that the Wheat Acquisition Act was a valid exercise of the State legislative powers.

From this decision the defendants appealed to the High Court by way of case stated by the Commission under section 43 of the Inter-state Commission Act. The following question, inter alia, was submitted for decision :- "Had the Commission jurisdiction to hear and determine the petition to grant the injunction or to make the order for costs?" The State of New South Wales and the Inspector-General of Police v. The Commonwealth and others, (1915) 20 C.L. R., 54.

It was held by GRIFFITH, C.J., and ISAACS, POWERS and RICH, JJ. (BARTON and GAVAN DUFFY, JJ. dissenting), that section 101 of the Constitution does not authorize the Parliament of the Commonwealth to constitute the Inter-state Commission a Court, so as to give it judicial powers nor to confer upon it the general power to restrain contraventions of inter-state trading rights, and that, therefore, as the provisions of Part V. of the Inter-State Commission Act 1912 were ultra vires the Parliament of the Commonwealth, the Inter-state Commission had no power to deal with the complaint. The decision of the majority of the High Court was that only such powers of adjudication as were incidental to or in aid of administration could be conferred upon the Commission; that

section 101 of the Constitution did not authorize the Federal Parliament to constitute the Inter-state Commission a Court of record to exercise judicial functions; therefore all the provisions of Part V. of the Inter-state Commission Act 1912, being inseverable, were held to be all ultra vires of the Parliament and void. Consequently the Inter-state Commission had no power to issue an injunction restraining the Government of New South Wales from enforcing the Wheat Acquisition Act 1914.

In my judgment," said the Chief Justice (Sir SAMUEL GRIfFITH), the functions of the Inter-state Commission contemplated by the Constitution are executive or administrative, and the powers of adjudication intended are such powers of determining questions of fact as may be necessary for the performance of its executive or administrative functions, that is, such powers of adjudication as are incidental and ancillary to those functions. For instance. if a Federal law imposed obligations as to structures or appliances to be used in connection with inter-state railway traffic and entrusted the duty of carrying out those provisions to the Inter-state Commission, it might empower the Commission to determine the question whether in any particular case the provisions of the law had been observed in point of fact, and, if they had not to demolish the structures or forbid the use of appliances contravening the law, and for that purpose to use any necessary force or to invoke the aid of a Court of law to ensure obedience to its order" (1915) 20 C.L.R., at p. 64.

..

66 are:

The dominant words in section 101 " said Mr. Justice ISAACS, the execution and maintenance of the provisions of the Constitution relating to trade and commerce, and of all laws made thereunder'; those words denote the purpose and nature of the power to be conferred on the Commission and mark their limit. Courts of record do not execute or maintain laws relating to trade and commerce. Those words imply a duty to actively watch the observance of those laws, to insist on obedience to their mandates. and to take steps to vindicate them if need be. But a Court has no such active duty its essential feature as an impartial tribunal would be gone, and the manifest aim and object of the constitutional separation of judicial from ministerial powers would be frustrated. A result so violently opposed to the fundamental structure and scheme of the Constitution requires extremely plain and unequivocal language to accept. This reading of the section does no violence

to any part of the instrument of Government; on the contrary it harmonizes it. It gives the same effect to the words 'execute and maintain the laws in three places where they or like words are found, viz. section 51 (VI.), section 61 and section 101.” Per ISAACS, J. in the State of New South Wales v. The Commonwealth, (1915) 20 C.L.R., at p. 92.

"On the whole," said Mr. Justice ISAACS, "I reject the notion of the Commission as a Court of justice, and regard its quasi-judicial powers, where given, as incidental and assistant to its main and paramount purpose, as in the making of some executive order. Its order, subject to any appeal to this Court on law, is taken to be lawfully made and binding, if the necessary judicial powers are given and exercised. But the end must be administrative either by way of order or by way of an application made to a recognized Court to deal with the question in the ordinary exercise of judicial power. I do not see any obstacle whatever to investing the Commission with sufficiently and probably equally effective powers, provided they are created in a proper way. There has not been found any difficulty in arming the American Inter-state Commerce Commission with ample quasi-judicial powers, while leaving the body as it may be left an executive organization": Per ISAACS, J., 20 C.L.R., at p. 94.

I

Mr. Justice POWERS said :agree with my learned brothers that Part V. of the Inter-state Commission Act 1912 is invalid, although several of the powers vested in the Commission by Part V. could be vested in them by Parliament as a Commission but not as a Court. All the powers set out in Part V. of the Inter-state Commission Act could be given to a properly constituted Federal Court, and the individual members of the Inter-state Commission could be Judges of that Court, with the tenure provided by section 72 of the Constitution for Justices of Courts created by the Commonwealth Parliament."

This decision of the High Court involved the complete breakdown of the Inter-state Commission Act as originally passed by Parliament and it has reduced the status of the Commission itself to that of an ordinary Royal Commission appointed to inquire and recommend. The usefulness of the Commission as contemplated by the framers of the Constitution has been paralized.

L. P.

56

Two methods of altering the law in order to place the Commission on a proper legal basis have been suggested; one method involving an alteration of the Constitution; the other method not involving any alteration.

The alteration of the Constitution necessary in order to restore to the Commission the powers and functions intended by Parliament would be by amending the Constitution, section 71, giving the Commission a limited right to exercise "judicial power." The other method would be that Parliament should create a Federal Court under the Constitution, section 71, having jurisdiction to maintain the Commerce laws of the Commonwealth, but such Court would have to be composed of members appointed under the good behaviour and life tenure conditions provided by section 72.

Parliament may forbid preferences by State.

102. The Parliament may by any law with respect to trade or commerce forbid, as to railways, any preference173 or discrimination by any State, or by any authority constituted under a State, if such preference or discrimination is undue and unreasonable, or unjust to any State; due regard being had to the financial responsibilities incurred by any State in connexion with the construction and maintenance of its railways. But no preference or discrimination shall, within the meaning of this section, be taken to be undue and unreasonable, or unjust to any State, unless so adjudged by the Inter-State Commission.

§ 173. "PARLIAMENT MAY FORBID PREFERENCES OR DISCRIMINATIONS."

LEGISLATION.

INTER-STATE COMMISSION ACT 1912, Sections 18, 19.

Carrying Rates to be Reasonable.

All rates fixed or made by any common carrier for any service rendered in respect of inter-state commerce or which affect interstate commerce, shall be reasonable and just, and every such rate which is unreasonable or unjust is hereby prohibited.

No undue Preference on State Railways.

It shall not be lawful for any State, or for any State railway authority, to give or make upon any railway the property of the State, in respect of inter-state commerce, or so as to affect such commerce, any preference or discrimination which is undue and unreasonable, or unjust to any State. In deciding whether a lower charge or difference of treatment constitutes, within the meaning of this section, a preference or discrimination which is undue or unreasonable, or unjust to any State, the Commission shall have due regard to the financial responsibilities incurred by any State in connection with the construction and maintenance of its railways.

Nothing in this Act shall render unlawful any rate for the carriage of goods upon a railway, the property of a State, if the rate is deemed by the Commission to be necessary for the development of the territory of the State, and if the rate applies equally to goods within the State and to goods passing into the State from other States.

No undue Preference by Common Carriers.

No common carrier or State authority, other than a State railway authority, shall, in respect of inter-state commerce, or so as to effect such commerce make or give any undue or unreasonable preference or advantage to any particular person, State, locality, or description of traffic; or subject to any particular person, State, locality, or description of traffic to any undue or unreasonable prejudice or disadvantage.

Proof of Undue Preference.

Whenever it is shown that any common carrier or State authority, other than a State railway authority, in respect of inter-state commerce or so as to affect such commerce-charges to any person or class of persons or to the persons in any locality or State, lower rates for the same or similar goods, or for the same or similar services, than the carrier or authority charges to other persons or classes of persons, or to the persons in another locality of State; or makes any difference in treatment in respect of any such persons, the burden of proving that the lower rate or difference in treatment is not an undue or unreasonable preference or advantage shall lie on the common carrier or authority.

In deciding whether a lower rate or difference of treatment constitutes an undue preference, the Commission may, as far as it