CHAPTER V.-THE STATES.

Saving of Constitution.

106. The Constitution176 of each State of the Commonwealth shall, subject to this Constitution, continue as at the establishment of the Commonwealth, or as at the admission or establishment of the State, as the case may be, until altered in accordance with the Constitution of the State.

§ 176. "CONSTITUTION OF EACH STATE.”

State Constitutional Powers.

In the Federal Constitution itself we find section 106 declaring that the State Constitutions are to be subject to the Federal Constitution. State powers are to give way to the requirements of the supreme instrument of Government. If the State powers are repugnant to the Constitution then they pro tanto cease to exist. If there still exists a State power of legislation it may be exerted but, with the consequence expressed in section 109, that wherever it is found to be inconsistent with the laws of the Commonwealth it is pro tanto invalid. The power of legislation controlling the Crown lands of the States remains vested in the States, but the Federal · Parliament can tax Crown leaseholds held by private persons to the extent of their interests in such terms. There is a clear distinction between the proprietory rights of an individual and the property of a State. Per ISAACS, J. in the Attorney-General for the Commonwealth v. The Attorney-General for Queensland, (1915) 20 C.L.R., at pp. 172-175.

The Queensland Constitution provided (see Order in Council of 6th June 1859, clause 15, and Act 18 & 19 Vict. c. 54, Schedule I., section 38), that the commissions of the Judges of the Supreme Court should continue and remain in full force during good behaviour.

In 1867 this provision was repealed, and was re-enacted by section 15 of the Constitution Act of 1867 (Qd.). The Queensland Industrial Arbitration Act, section 6, purported to authorize an appointment of a Judge of the Court of Industrial Arbitration to be a Judge of the Supreme Court so long only as he retained the office of a Judge of the Court of Industrial Arbitration. The Governor-inCouncil by a commission, which recited the power conferred by the Industrial Arbitration Act of 1916, purported to appoint the appellant, Thomas Wm. McCawley, Esq., who had previously been appointed President of the Industrial Arbitration Court, to be a Judge of the Supreme Court of Queensland, " to have, hold, exercise and enjoy the said office during good behaviour." It was held by a majority in the High Court that the commission purported to appoint the appellant to be a Judge of the Supreme Court during good behaviour so long only as he retained the office of President of the Court of Industrial Arbitration. Held, further, that the commission was unauthorized by law, and that the appointment was, therefore, wholly invalid.: Mc Cawley v. The King, (1918) 26 C.L.R., p. 9.

Saving of power of State Parliaments.

107. Every power177 of the Parliament of a Colony which has become or becomes a State, shall, unless it is by this Constitution exclusively vested in the Parliament of the Commonwealth or withdrawn from the Parliament of the State, continue as at the establishment of the Commonwealth, or as at the admission or establishment of the State, as the case may be.

§ 177. "EVERY POWER OF THE PARLIAMENT OF A COLONY CONTINUE."

SHALL

Powers of State Parliaments.

In the case of Deakin v. Webb, (1904) 1 C.L.R., 585, it was held by the High Court that the salaries of a Minister of the Crown for the Commonwealth and of a member of the Commonwealth Parliament, so far as they are earned in Victoria, are not liable to assessment under the Income Tax Acts of Victoria.

In support of the power of the State to tax the incomes of Federal Ministers, members and officers, it was contended that

section 107 of the Constitution is equivalent to an express re-enactment of the provisions of the State Constitutions, and operates expressly to confer upon the States de novo all the powers of legislation which they had, as States, not forming part of the Commonwealth, except those specially mentioned in the Constitution as withdrawn.

The Chief Justice (Sir SAMUEL GRIFFITH) said :- Section 107 of the Constitution does not purport to confer any new powers. What, then, were the existing powers of taxation possessed by the States? They included unlimited powers of taxation of all property within the limits of the States, and of all persons who came within the State by its permission. Such a power is an attribute of sovereignty, and extends to all persons to whom the sovereignty itself extends quoad hoc. But could such a power have been applied to a person who came within the State, not by the State's permission, but under the direction of a paramount sovereign power, and merely for the purpose of performing duties assigned to him by that paramount power? For instance, an Admiral of the British Fleet stationed in State waters for the whole or part of a year. In practice, we know that such a power has never been asserted with respect to Governors or Admirals or officers of the Imperial Fleet, and it has not been necessary to inquire into the legal foundation for the admitted exemption. We can find nothing in section 107, or any other provisions of the Constitution, to suggest the existence of such a power. We think that the power, so far as its exercise would interfere with Federal agencies, is a power withdrawn from the States by the Constitution within the meaning of section 107" 1 C.L.R., at p. 617.

Trade and Commerce reserved to States.

The whole of the trade and commerce which begins and ends entirely within the confines of a State is excluded from Federal control. That class of trade and commerce is reserved to the States respectively by section 107 of the Constitution, for it has not been "exclusively," or at all, vested in the Parliament of the Commonwealth," nor has it been withdrawn from the Parliament of the State." Per BARTON, J. in Huddart Parker & Co. Proprietary Ltd. v. Moorhead, (1909) 8 C. L. R., 361.

Domestic Affairs of a State.

The constitution and regulation of trading corporations are not matters within the area of Federal power, any more than the

private and domestic affairs of individual citizens: Huddart Parker & Co. Proprietary Ltd. v. Moorhead, 8 C.L.R., 330. In that case the High Court held that section 51 (xx.) of the Constitution does not confer upon the Commonwealth Parliament power to control the operations of corporations formed under a State law which are lawfully exercising their corporative functions within the limits. of a State. The Federal power does not extend to interference with the internal or domestic management of the affairs of such a corporation. It is only when it operates in the Federal area that it becomes a subject of Commonwealth control, and, then only to the same extent as an individual carrying on like operations. Per GRIFFITH, C.J. in the Colonial Sugar Refining Co. Ltd. v. AttorneyGeneral for the Commonwealth, (1912) 15 C.L.R., at p. 197.

Police Powers.

Section 107 continues to the States the general power of regula tion of internal affairs which in the United States of America is commonly called the "police power," and which was described in the case of Railroad Co. v. Husen, 95 U.S., 465, at p. 471, right founded in the sacred law of self-defence."

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If there is any apparent conflict between section 92 and section 107 of the Constitution the former must be read in such a sense as will reconcile the conflict. This, it is urged, can be done in accordance with the doctrines laid down in Russell v. The Queen, 7 App. Cas., 829. In that case the law under consideration was the Canada Temperance Act 1878, which, wherever it was put in force, would have prohibited the sale of the intoxicating liquors except under certain conditions, and the question was whether that Act was an invasion of the field of "property and civil rights” which was assigned exclusively to the provinces: The King". Smithers; Ex parte Benson, 16 C.L.R., at p. 106.

The so-called police powers of the Colonies, before the estab lishment of the Commonwealth, extended to the exclusion of any person whom the Colonial Parliament might think an undesirable immigrant. It is held that the continuance of such a power in its full extent after the federation is inconsistent with the elementary notion of a Commonwealth. In my opinion," said the Chief Justice, “the former power of the States to exclude any persons whom they might think undesirable inhabitants is cut down to some extent by the mere fact of Federation, entirely irrespective of

the provisions of sections 92 and 117. The extent to which it is cut down and the line of demarcation which should be held to separate a justifiable from an unjustifiable exclusion, may be hard to determine, and yet it may be possible to say on which side of it a particular case lies. In the present case, the offence committed in Victoria by reason of which the applicant was convicted on his coming into New South Wales was "being a person having insufficient lawful means of support," which offence may by the law of Victoria be punished by twelve months' imprisonment. I do not think that the exclusion of an inhabitant of another State for such a reason can be justified on any such ground of necessity as I have referred to. I think that on this application the Court is entitled to go behind the formal words of the Statute attacked, and inquire as to the real reason of the interference with the applicant's freedom of migration from one State to another." Per GRIFFITH, C.J. in The King v. Smithers; Ex parte Benson, 16 C.L.R., 109.

Control of Waste Lands of the Crown.

The powers of legislation with respect to the waste lands of the Crown in the Australian Colonies, which by their respective Constitutional Acts, of which the New South Wales Act (1855) 18 & 19 Vict. c. 54, may be taken as an instance, were vested in the Legislature of those Colonies, have not been interfered with by the Constitution of the Commonwealth (1900) and have been expressly continued by section 107. The Commonwealth Land Tax Assessment Act 1914 under which leasehold estates in Crown lands are made liable to land tax does not amount to an attempt to control the administration of Crown land belonging to the State: Attorney-General (Queensland) v. Attorney-General (Commonwealth), (1915) 20 C.L.R., 148.

Expropriation of Private Property.

The argument for the Commonwealth in the Wheat Acquisition Case was that the words of the Act authorized the State of New South Wales to acquire the whole of the wheat in the State, and were intended to be used for that purpose, that such an acquisition would have the necessary result of preventing the performance of any existing contracts for the sale of wheat in New South Wales to be exported to another State, and that such a result is a contravention of section 92 of the Constitution, "that trade, commerce and intercourse among the States shall be absolutely free."