R v Foster

103 CLR 256

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(Judgment by: Menzies J)

R
vFoster

Court:

Judges: Dixon CJ
Mctiernan J
Fullagar J
Kitto J
Taylor J

Menzies JWindeyer J

Legislative References:
Conciliation and Arbitration Act 1904-1956 - s 28; s 78(2); Div 2 of Pt III
Conciliation and Arbitration Act 1958 - s 71
Navigation Act 1912-1956 - s 6; s 405D
Snowy Mountains Hydro-electric Power Act 1951 - s 7
Snowy Mountains Hydro-electric Power Act 1949 - Pt IVA
Commonwealth Conciliation and Arbitration Act 1904-1918 - s 21AA
Seamens Compensation Act 1911 - The Act; s 4(2)

Case References:
Merchant Service Guild of Australasia v Archibald Currie & Co Pty Ltd - (1908) 5 CLR 737
Merchant Service Guild of Australasia v Commonwealth Steamship Owners' Assn (No 3) - (1920) 28 CLR 495
Merchant Service Guild of Australasia v Commonwealth Steamship Owners' Assn - (1913) 16 CLR 664
Lauritzen v Larsen - (1952) 345 US 571
Australian Steamships Ltd v Malcolm - (1914) 19 CLR 298
Joyce v Australasian United Steam Navigation Co Ltd - (1939) 62 CLR 160
Morgan v The Commonwealth - (1947) 74 CLR 421; [1947] ALR 161

Hearing date: 13, 14, 15 and 16 October 1958
Judgment date: 12 March 1959

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Judgment by:
Menzies J

This was the return of an order nisi for prohibition obtained by the prosecutor ("the company") requiring the respondents show cause why prohibition should not go to The Honourable Alfred William Foster, a presidential member of the Commonwealth Conciliation and Arbitration Commission, The Merchant Service Guild of Australasia ("the guild") and The Australian Institute of Marine and Power Engineers ("the institute") prohibiting them and each of them from proceeding further against the company upon alleged industrial disputes or matters so far as the same concern the employment of masters, officers, engineers or others forming part of the complement of certain ships of the company. The relevant facts agreed to by the parties were shortly as follows. The company is a shipowner incorporated in the United Kingdom and registered as a company in New South Wales, which owns and operates four vessels registered in London under the Merchant Shipping Act which clear regularly from Adelaide for Kobe and from Kobe for Adelaide and call at intermediate ports, some in Australia, some in Japan and some from Tarakan north to Japan. The vessels carry cargo (and two of them sometimes carry passengers) between Australian ports and ports north of Tarakan. The vessels do not carry passengers or cargo from an Australian port for discharge at another Australian port. Each vessel carries a master, four deck officers, eleven engineer officers, and seventy other crew members. The ship's complement, other than the master and officers, are engaged and discharged at Hong Kong where most of them live. All the masters, deck and engineer officers live in Australia and, to use the language of the statement of agreed facts, "are actually engaged and discharged in Sydney by the company but the articles are opened and signed in Hong Kong". Some elucidation of this was attempted at the hearing and my understanding of its meaning is that all the masters and officers both join and leave the ships in Sydney; when one joins a ship in Sydney he signs articles previously opened in Hong Kong and which cover his service until the ship returns to Hong Kong when new articles are opened and signed which cover a round voyage from and back to Hong Kong. When one leaves a ship in Sydney he is, as of course, permitted to do so notwithstanding that he has signed articles for the round journey from Hong Kong. It could happen at any particular time that the master and all the officers are serving under articles signed in Hong Kong or that some of them are serving under articles opened in Hong Kong but signed in Sydney presumably on the footing that service upon the ship will be continued under fresh articles to be opened and signed in Hong Kong.

Disputes arose between the guild and the institute on the one hand, and the company and other shipowners on the other, covering, as it has been agreed, the terms and conditions of the employment of masters, deck officers and engineers on the aforesaid ships of the company throughout their voyaging as described. Each dispute arose by reason of the service in Australia of a comprehensive log of claims to which the company along with other employers did not accede. When employers, including the company, did not accede to the demands of the guild and the institute the latter, pursuant to s 28 of the Conciliation and Arbitration Act, severally notified the Commonwealth Conciliation and Arbitration Commission of the dispute and the company thereupon applied to the commission to be struck out of the list of respondents to the two disputes then before the commission as a result of the two notifications. The commission rejected the application of the company. It is to stop further proceedings against the company that prohibition is sought.

Both before the commission and before this Court the proceedings, although springing out of the making and rejection of two separate logs of claims, were dealt with together, and I do not find it necessary to differentiate between them. The order nisi for prohibition raises two fundamental questions. The first is whether legislation of the Parliament of the Commonwealth under the Constitution s 51(xxxv) can and does authorize the commission to settle the industrial disputes that have arisen; the second is whether legislation of the Parliament of the Commonwealth under the Constitution s 51(i) can and does authorize the commission to hear and determine the industrial questions that exist between the company and its aforesaid employees. These are separate questions and it is desirable to keep them separate but before dealing with either of them it is possible to dispose of one other matter raised by the order nisi. It is common ground that the facts are not such as to attract the operation of s 5 of the covering clauses of the Constitution because it is not the case that the first port of clearance and the port of destination of the Company's ships are in the Commonwealth. The question of the extent of the operation of Commonwealth legislation has therefore to be decided without resort to covering s 5.

The main aspect of the first question is therefore the extent of the power under the Constitution s 51(xxxv) which subject to the Constitution gives Parliament power "to make laws for the peace order and good government of the Commonwealth with respect to . . . arbitration for the . . . settlement of industrial disputes extending beyond the limits of any one State".

The only reason why it is claimed by the company that this power is not wide enough to settle these disputes is that part of their subject matter is the industrial relationship of the company and the masters and officers of its ships outside Australia. It has been decided that s 51(xxxv) must be understood as referring to industrial disputes confined to Australia in the sense that the whole dispute must be as to terms and conditions of industrial relationships in operations within Australia; this was so decided in Merchant Service Guild of Australasia v Commonwealth Steamship Owners' Assn (No 3) ("The Merchant Service Guild Case No 3") (1920) 28 CLR 495, and if that decision is to be applied the company must succeed on this point because here it is agreed that each dispute is concerned substantially though not exclusively with the terms and conditions of employment in industrial operations outside Australia. For the guild and the institute it was argued that this decision was wrong in 1920 or alternatively that had the point arisen now for the first time it would not have been decided as it was then either because later decisions of authority such as Croft v Dunphy (1933) AC 156 require a different approach to the question of the validity of laws having territorial operation than that which had been taken, or, because of the adoption of the Statute of Westminster 1931 which by s 3 declares and enacts that the Parliament of a Dominion has full power to make laws with extra-territorial operation.

The Merchant Service Guild Case (No 3) (1920) 28 CLR 495 was the third of a series of cases of which Merchant Service Guild of Australasia v Archibald Currie & Co Pty Ltd ("Currie's Case") (1908) 5 CLR 737 was the first and Merchant Service Guild of Australasia v Commonwealth Steamship Owners' Assn ("The Merchant Service Guild Case No 1") (1913) 16 CLR 664 was the second.

In Currie's Case (1908) 5 CLR 737 it was taken for granted rather than decided that the only awards which could be authorized by legislation under s 51(xxxv) were awards applying in an industry carried on in Australia; see Griffith CJ (1908) 5 CLR, at p 743, O'Connor J (1908) 5 CLR, at p 744, Isaacs J (1908) 5 CLR, at p 747 and Higgins J (1908) 5 CLR, at p 747. On this footing the question was whether the facts attracted the operation of s 5 of the covering clauses and it was decided that they did not. In circumstances which do not differ materially from those present in this case it was decided that the Commonwealth Court of Conciliation and Arbitration had no jurisdiction to settle the dispute. The reason why the assumption to which I have referred was made appears from the argument and was that the Commonwealth "could prescribe a rule of duty to be observed within its territory, but not beyond it", per Griffith CJ (1908) 5 CLR, at p 740. I do not think despite what was said by Higgins J later (1920) 28 CLR, at p 503 that the fact that the ships' articles were filled in and signed in Calcutta was treated as in any way decisive; what was regarded as negativing jurisdiction unless s 5 of the covering clauses applied was that an award was sought "in relation to work to be done outside" Australia. The case was, I think, decided as Higgins J himself said (1908) 5 CLR, at p 748, on the footing that "the parties were resident in Australia and the employes were engaged in Australia".

The Merchant Service Guild Case (No 1) (1913) 16 CLR 664 was again a case concerned with s 5 of the covering clauses and it was having regard to that section that it was the opinion of the Court by the requisite statutory majority that: "The dispute is not the less a dispute extending beyond the limits of any one State merely because some of the operations in respect of which the dispute exists are performed beyond the territorial limits of the Commonwealth" (1913) 16 CLR, at p 704. Barton ACJ who dissented expressed himself upon the question that arises here as follows: "I think, then, that a dispute as to the conditions of employment outside the territorial jurisdiction of the Commonwealth is not within subs (xxxv)" (1913) 16 CLR, at p 677. Isaacs J said: "There are no-express words in subs (xxxv) by which its operation is extended beyond Australia and the three-mile limit" (1913) 16 CLR, at p 689, and after referring to the granting by the Imperial Parliament of self-governing powers he said: "But the grant of powers of self-government to a component portion of the Empire connotes, primarily, restriction of their exercise to the limits of the local territory and its adjacent sea limit as recognized universally and by Statute" (1913) 16 CLR, at p 690. Then he used these words to define the element beyond the presence of the disputants in Australia and the likelihood that the dispute would dislocate Australian industry which he considered necessary to bring a dispute within constitutional power: "the dispute must be about the terms on which the Australian industry is conducted; in other words, the subject matter of dispute is territorial, just as the dispute itself is" (1913) 16 CLR, at p 691. He then turned to s 5 of the covering clauses and it was with its aid that he adopted the answer that I have already quoted. Higgins J seems to have taken the same view as Isaacs J and said: "But, assuming that the effect of s v has to be considered under question 1, I concur with my brother Isaacs in his conclusion with respect thereto" (1913) 16 CLR, at p 701 Gavan Duffy and Rich JJ took a different view of what is important here, and said: "Let us assume that the expression 'industrial disputes' in s 51(xxxv) of the Constitution means industrial disputes existing within the Commonwealth. When does such a dispute exist within the Commonwealth? We think it exists within the Commonwealth when the disputants reside, the demands and the refusal are made, and the dissidence, dissatisfaction and unrest prevail, within the Commonwealth, although the dispute itself may have relation, as in this case, to labour to be performed outside the territorial limits by the employes who are parties to the dispute" (1913) 16 CLR, at pp 702, 703. To meet the objection that such a reading of s 51(xxxv) implies what is not expressly conferred, ie extra-territorial power, they said: "In English law it is not a universally true proposition that subordinate legislatures have no extra-territorial jurisdiction. The Imperial Parliament may itself assume the right to bind British subjects, or even foreigners, whether within or without the territorial limits of Great Britain, with respect to acts done in any part of the world; and may in whole or in part confer the same right on any subordinate legislature . . . . The true rule with respect to subordinate legislatures is that they will not be held to possess any extra-territorial jurisdiction unless it is conferred on them expressly or by necessary implication. We are disposed to think that the power to prevent and settle disputes with respect to labour to be perfomed outside the territorial limits, necessarily implies a power to prescribe terms and conditions with respect to such labour, for without such power it would ordinarily be impossible to either prevent or settle such disputes" (1913) 16 CLR, at p 703. It seems to me that there is no difficulty in accepting the implication stated if the power is as it was stated to be, viz a power to settle disputes as to labour to be performed outside Australia. That is, however, the question. The actual decision of Gavan Duffy and Rich JJ, like that of Isaacs and Higgins JJ, rested upon s 5. In so far, then, as this case supports the limiting of power under s 51(xxxv) to the determination of conditions of employment within Australia it does so on the footing that unless express language or necessary implication requires differently, Commonwealth power is confined to Australia.

Both Currie's Case (1908) 5 CLR 737 and The Merchant Service Guild Case (No 1) (1913) 16 CLR 664 were, as I have said, concerned principally with s 5 of the covering clauses and statements are to be found in the judgments which suggest that the operation of that section is to extend in some way the power conferred by s 51(xxxv). That is not my conception of its operation. S 5 is not a grant of legislative power; it is concerned with the operation of Commonwealth legislation under power granted elsewhere, eg s 51, and it provides with the authority of the Imperial Parliament that a valid Commonwealth law shall be in force on British ships whose first port of clearance and whose port of destination are in the Commonwealth. What I regard as a misunderstanding of the operation of s 5 of the covering clauses was, as will be seen, carried forward into The Merchant Service Guild Case (No 3) (1920) 28 CLR 495 as support for the decision that the power conferred by s 51(xxxv) is territorial.

The Merchant Service Guild Case (No 3) (1920) 28 CLR 495 was, unlike the earlier cases, an actual decision that the Arbitration Court had no jurisdiction with regard to a dispute between parties in Australia as to the terms of contracts to be entered into in Australia for employment beyond the territorial limits of Australia. From this Higgins and Gavan Duffy JJ dissented but Rich J, departing from the opinion expressed in The Merchant Service Guild Case (No 1) (1913) 16 CLR 664, was one of the majority. The ratio decidendi is to be gathered from two passages as follows: "One of those principles is that, prima facie, jurisdiction is territorial; and covering s V strengthens the view, in relation to the present case, that the language itself of subs (xxxv) would support. But, being territorial, it means that the 'industrial disputes extending beyond the limits of any one State', so far as they are to be settled or prevented under Commonwealth law, must be confined to the Commonwealth. The expression 'industrial dispute' in subs (xxxv) does not mean simply a dispute as to an agreement to perform work anywhere in the world" (1920) 28 CLR, at p 502 . . . and "We think that subs (xxxv) of s 51, on its proper judicial construction, is intended to secure, so far as is possible by conciliation and arbitration, uninterrupted industrial services to the people of the Commonwealth, and therefore the term 'industrial disputes' in that subsection, unextended by covering s V, means disputes as to the terms and conditions of industrial operations in Australia only. Currie's Case (1908) 5 CLR 737 was decided in conformity with the opinions we have expressed, and in some respects was an a fortiori case" (1920) 28 CLR, at p 50. Again it is clear that the decision stemmed from the principles that prima facie the Commonwealth Parliament lacks power to make laws having extra-territorial operation and such power if it exists must be found in express terms or by necessary implication. The application of these principles to s 51(xxxv) led to the decision.

The principles that were so applied were not, I think, the same as those stated by the Privy Council in Croft v Dunphy (1933) AC 156, at p 163 in words which were used to dispose of an argument that the Parliament of Canada being a subordinate legislature, its power to make laws for the peace, order and good government of Canada, prima facie at least, is restricted territorially. "Once" said their Lordships, "it is found that a particular topic of legislation is among those upon which the Dominion Parliament may competently legislate as being for the peace, order and good government of Canada or as being one of the specific subjects enumerated in s 91 of the British North America Act, their Lordships see no reason to restrict the permitted scope of such legislation by any other consideration than is applicable to the legislation of a fully Sovereign State" (1933) AC, at p 163. This difference would probably of itself warrant the conclusion that the way in which the Court in The Merchant Service Guild Cases approached the problem of the construction of s 514(xxxv) had at least become outmoded by 1931, but whether this be so or not I prefer to examine the reasoning of The Merchant Service Guild Case (No 3) (1920) 28 CLR 495 in the light of the Statute of Westminster 1931 which was adopted in Australia with effect from 3rd September 1939. S 3 both declares and enacts that Parliament has full power to make laws having extra-territorial operation. The section is not an amending section; it is an amplifying section directed to negativing a conception which in the course of time had perhaps come to be regarded as a misconception as to the nature of a power to legislate granted by the Imperial Parliament to a Dominion Parliament without any affirmation that the power granted extended to the making of laws with extra-territorial operation. The old conception was that such a power is at least prima facie territorial: Macleod v Attorney-General for New South Wales (1891) AC 455; the effect of the Statute is that, prima facie at least, the grant authorizes laws with extra-territorial application.

What I have said does not mean that the Statute has extended the legislative powers of Parliament beyond what is conferred by the Commonwealth Constitution. To be within power a law made under s 51 must be "for the peace order and good government of Australia" and must be authorized by one or more of the paragraphs (i) to (xxxix). The Statute of Westminster does not remove any restriction stated expressly in, or to be inferred from, the language of these paragraphs. So for instance, the power under para (x) to legislate with respect to "Fisheries in Australian waters beyond territorial limits" is not extended to mean "Fisheries in waters beyond territorial limits" and the power under s 51(xx) "Immigration and emigration" remains a power to make laws with respect to immigration into and emigration from Australian territory. What the Statute does is to require the validity of legislation with extra-territorial application to be determined in the same way as legislation the application of which is confined to Australia, and in particular, to remove the necessity for finding affirmatively either from express words or necessary implication that the power extends to the making of laws having effect beyond Australian territory. In The Merchant Service Guild Case (No 3) (1920) 28 CLR 495 it was said that because there are no express words authorizing legislation for the settlement of disputes covering operations beyond Australia there is prima facie no power to legislate for the settlement of such disputes. It is my view that this is no longer the correct approach and the question must always be one of the construction of a grant of power without any presumption that because there are no express words conferring extra-territorial power there is no such power. What previously had, it was thought, to be found in express words or from necessary implication in the grant of power is now supplied generally by s 3 of the Statute in all cases except where the subject matter of the grant or the words of grant show that some territorial limitation must be observed. It seems to me, therefore, that a vital element in the reasoning behind The Merchant Service Guild Case (No 3) (1920) 28 CLR 495 is no longer valid and if the decision is to stand it must be on the footing that upon its proper construction s 51(xxxv) is confined not merely to what might be called Australian industrial disputes but to disputes in Australia about industrial operations carried on in Australia exclusively.

The first question is whether the decision should now be reviewed. On the one hand, there is the consideration that the law was settled in 1920 after a lot of controversy and that consistency is a merit that will sometimes outweigh even the correction of error. On the other hand, the decision and the earlier decisions upon which it was in a measure based, were arrived at by a course of reasoning which depended upon the existence of a prima facie limitation of power that had by 1931 been found to be at variance with the autonomy and authority appropriate to Dominion status and was rejected by an Act of the Imperial Parliament requested by Canada, Australia, New Zealand, South Africa, the Irish Free State and Newfoundland. Secondly, the case was decided before the significance of the acceptance of the disagreement of parties in place of industrial dislocation as an element essential for the existence of an industrial dispute was fully appreciated. See Caledonian Collieries Ltd v Australian Coal and Shale Employees' Federation (No 1) (1930) 42 CLR 527, particularly at pp 552, 553. The earlier conception of what was essential for an industrial dispute seems to me to have contributed to the decision in the case. Furthermore, it is a decision of greater importance now than it was because of the increasing extension of Australian industrial activity to places outside Australia. Finally, I have reached the conviction that the decision misconstrues s 51(xxxv) and wrongly imposes a serious limitation upon Commonwealth power. Weighing these considerations I have reached the conclusion that this Court should not treat the question as concluded in favour of the Company by The Merchant Service Guild Case (No 3) (1920) 28 CLR 495.

Once the doctrine of extra-territoriality as a limitation upon the power given by s 51(xxxv) is rejected, as it must be entirely, then all that is requisite for valid legislation thereunder is that it should be "for the peace order and good government of Australia" and "with respect to conciliation and arbitration for the prevention and settlement of industrial disputes extending beyond the limits of any one State". From this language I do not derive any requirement that the conciliation and arbitration which Parliament is authorized to provide can only be for the prevention and settlement of industrial disputes as to the terms and conditions of industrial operations in Australia. The power is to make laws with respect to conciliation and arbitration for the prevention and settlement of certain kinds of disputes, not disputes about certain kinds of industrial activity. If Commonwealth conciliation and arbitration is to be available for their prevention and settlement the disputes must (1) be industrial, and (2) exist in one State and (3) extend beyond the limits of one State. It may be that the third requirement can be satisfied only if the dispute exists elsewhere in Australia than in one State, ie in another State or in a territory, and that a dispute in one State extending to the high seas or to New Zealand, for instance, would not suffice, but be that as it may, the satisfaction of the second requirement does demand the existence of a dispute in Australia. It is not necessary therefore, even if the words "for the peace order and good government of the Commonwealth" do require that valid legislation must have a real connexion with Australia, to find that connexion for the purposes of legislation under s 51(xxxv) in the work with which the dispute is concerned. Indeed, upon the construction of s 51(xxxv) which I have adopted legislation thereunder must always have a territorial connexion with Australia because the disputes to be prevented or settled by conciliation or arbitration must be Australian disputes so that the search for territorial limitations in the industrial operations giving rise to the dispute was always a work of supererogation. The first requirement, ie that the dispute must be industrial, relates to the character of the dispute but not to the place where the industry in or out of which the dispute arises is carried on.

I think the industrial disputes referred to in s 51(xxxv) are properly to be described as Australian industrial disputes but they are not properly described as disputes in Australian industry. I find myself therefore in substantial agreement with the views of Gavan Duffy and Rich JJ stated in the first passage which I have cited from their joint judgment in The Merchant Service Guild Case (No 1) (1913) 16 CLR 664.

For the purposes of this case it is conceded that the company is a party to an Australian industrial dispute extending beyond the limits of one State and in my judgment the circumstance relied upon to found prohibition, namely that the dispute so far as the company is concerned relates to the terms and conditions upon which work is to be done outside Australia for the most part, is not a ground for denying that the commission has been validly empowered by s 72(a) of the Conciliation and Arbitration Act to prevent and settle the industrial dispute by conciliation or arbitration. On this ground the order nisi should be discharged.

Having reached a conclusion against the prosecutor on one ground I refrain from expressing an opinion upon the question whether s 72(b) of the Conciliation and Arbitration Act is valid and would authorize a hearing and determination of the industrial matters in question.