1. Commonwealth economic powers
Week 4, Module 2
Trade and Commerce
Limitations – Laws Regarding T and C (s92)

2. Trade and Commerce
. S51(1) Commonwealth has power to pass laws with respect to trade and commerce among the states, or between Australia and overseas
. No express power to pass laws dealing with intrastate trade and commerce
. 2 aspects to the power
(a) does the law deal with T and C
(b) does it relate to T and C that is interstate or overseas
. Heart of power and ‘incidental’ to power

3. Meaning – Trade and Commerce
. Buying and selling is at heart of trade (St George County Council)
. All the commercial arrangements of which transportation is the direct and necessary result, mutual communings, negotiations, verbal and by correspondence, the bargain, transport and delivery are all but not exclusively T and C (W and A McArthur)
. Professions, universities, hospitals, schools?

4. O’Sullivan v Noarlunga Meats
. Cth export regulations dealing with storage and treatment of meat, registration of slaughter houses, State law also regulated
. Issue was validity of Cth law, validity of State law
. Cth possesses no direct power over slaughter houses, but has power over T and C
. Fullagar J broad view of s51(1) expressed: Cth can regulate all matters which may beneficially or adversely affect export trade of Australia or anything manufactured in Australia

5. O’Sullivan v Noarlunga Meats
. Including grade and quality of goods but also packing, getup, description, labelling, handling, anything likely to affect export market
. May be necessary to enter the ‘factory, field or mine’ – broad
. Cf cases saying that production cannot be regulated (Marrickville Margarine)
. Constitution perhaps assumes easy to distinguish between (a) interstate and overseas T and C and (b) intrastate T and C – but sometimes it is not

6. Airlines of NSW Pty Ltd v NSW (No2, 1965)
. Concerned validity of Cth regulations regarding licensing of aircraft involved in international flights, interstate flights, or navigation involving a territory
. Later amended to include all navigation in Australia
. Challenged as being beyond s51(1), NSW also had regs
. Kitto J claiming that Australia must remain a system of ‘dual federalism’, court fails in its task if it moves away from model, however out of touch with practical conceptions or modern conditions it might seem

7. Airlines
. High Court satisfied that the (a) international and interstate T and C and the (b) intrastate T and C was so integrated at airports that it was a necessity for the Cth to be able to regulate all of it
. While HC has accepted physical integration as a valid argument for why Cth needs to regulate all industry, it has not accepted economic integration eg ANAC case – government airline (TAA) proposed flight Perth – Darwin via Port Hedland (to make flight economically viable), competitor challenged, saying Cth didn’t have power as Perth – Port Hedland leg purely intrastate, HC agreed
. Must maintain distinction different types T and C
. Murphy J (diss) court takes into account physical integration, should also take into account economic integration, majority’s interpretation keeps the ‘pre-Engineers ghosts walking’

8. Where Different Types of T and C are Mixed Together
. Eg Redfern v Dunlop Rubber Australia – could Cth anti-competition law apply to range of agreements among competitors, some related to all different types of commerce including intrastate T and C
. Court accepted necessity of Cth regulating all
. Swift v Boyd-Parkinson – regulation of conditions in chicken slaughter houses, no-one knew where the chickens were going at the time

9. Examples of Use of Power
. Licensing system for companies wishing to export (Murphyores v Cth, Cth taking into account environmental factors in assessing applications)
. Regulating working conditions, at least of those working on ships involved in distributing products internationally or interstate (Foster)
. Cth could not regulate payment of health insurance claims to policy holders, although many customers were interstate, policy did not expressly refer to payment going interstate (Hospital Provident Fund v Victoria)

10. Freedom of Interstate Trade and Commerce s92
. Is a limitation, applying to both Commonwealth and State laws, with most application to State laws
. Literally provides that trade and commerce among the states shall be absolutely free
. Key reason for federation
. ‘absolutely free’ from what?
. Section has never been taken literally
. Two periods to consider – pre and post the landmark decision Cole v Whitfield
. Pre-Cole, case law difficult, court distinguished between direct and indirect restrictions, used criterion of operation test, some reasonable regulation okay
. Attempt to nationalise banks in Australia failed due to s92 (Bank Nationalisation Case)

11. Cole v Whitfield
. Tasmanian law prohibiting person from having undersized crayfish in their possession, regardless where they obtained the crayfish
. Whitfield bought crayfish from SA which complied with SA law, but not Tasmanian law
. Charged with breach of Tasmanian law
. He argued s92 in his defence

12. Cole v Whitfield
. Made a new start, based on history and purpose of section
. 2 part test proposed
(a) does the law discriminate against interstate T and C on its face or in effect
(b) was it passed for a protectionist purpose
. Law might have genuine objective eg quality control, public safety
. Here law burdened interstate T and C but didn’t discriminate – same rules applied to all commerce, and no evidence of protectionist purpose, more of an environmental objective

13. Barley Marketing Board v Norman
. All barley grown in NSW transferred to Board, Board would market barley, contracts not involving Board invalid
. Was scheme contrary to s92?
. Court said no, law did not discriminate against interstate T and C, it was concerned with NSW grown barley only, court acknowledged law was protectionist but first limb of s92 test not satisfied

14. Bath v Alston Holdings
. Victorian tobacco legislation required seller to have licence and pay licence fee
. The licence fee (for a wholesaler or retailer) was a flat amount + 25% of tobacco sold in past period
. In making this calculation of 25%, an amount was deducted from the retailer’s licence fee, to the extent of tobacco purchased from a Victorian wholesaler
. Was the regime offensive to s92?

15. Bath v Alston Holdings . Court held 4-3 it was offensive to s92
. Mason CJ Brennan Deane and Gaudron JJ Act was discriminatory – effectively 25% of tobacco purchased elsewhere, protected locals from interstate competition from goods which might be cheaper
. Doesn’t matter that all goods, as some stage, are subject to the fee – look at impact on Victorian retail market
. Dissenters Wilson Dawson Toohey JJ all tobacco in Victoria at some stage subject to the fee, so no discrimination, economic effect is the same

16. Castlemaine Tooheys Ltd v SA
. SA Act provided purchase of beverage must pay to retailer deposit on container – refillable bottles were exempt
. SAB and Coopers in SA and used refillable bottles
. Subject to increased competition from Bond, in three states, used non-refillables
. Carlton based in Victoria, used non-refillables
. SA amended Act to include 15c deposit on non-refillables, 4c on refillables

17. Castlemaine Tooheys Ltd v SA
. Non-refillable suppliers had to accept return of all containers and refund deposits, no obligation on suppliers or refillable bottles
. Price differential made Bond product non-competitive on price
. SA claimed law had a legitimate environmental objective to encourage recycling
. Expert evidence that to achieve this objective, only needed 2c differential, not 11c
. Court invalidated Act, prepared to infer state had illegitimate purpose

18. Betfair PL v State of WA (2008)
. Tasmanian coy has licence to run betting exchange, operated from Tasmania
. Involves punters betting amongst themselves not with state-based companies like TAB
. WA Betting Control Act made it an offence (a) to bet through the use of a betting exchange (b) to publish a WA race field without authority
. High Court invalidated WA Act, dismissed argument that WA law for wellbeing of its people
. Consideration of state’s right to legislate won’t support much state regulatory legislation in the ‘new economy’

19. Betfair (2008)
. Court noted crucial role of trade in Australia’s creation, free commercial enterprise one of the most distinctive aspects of national unity
. States may have pressure to favour locals at expense of interstate trader
. Allowed some regulation of interstate trade as ‘reasonable regulation’
. Effective total ban on betting exchanges not, not reasonably appropriate and adapted to a legitimate objective

20. Subseqent
. Subsequently, schemes which don’t distinguish in their operation between interstate and intrastate betting operators have been validated (Betfair, 2012, Sportsbet, 2012)