Defunct principle of Australian law
The reserved powers doctrine was a principle used by the inaugural High Court of Australia in the interpretation of the Constitution of Australia, that emphasised the context of the Constitution, drawing on principles of federalism, what the Court saw as the compact between the newly formed Commonwealth and the former colonies, particularly the compromises that informed the text of the constitution. The doctrine involved a restrictive approach to the interpretation of the specific powers of the Federal Parliament to preserve the powers that were intended to be left to the States. The doctrine was challenged by the new appointments to the Court in 1906 and was ultimately abandoned by the High Court in 1920 in the "Engineers' Case", replaced by an approach to interpretation that emphasised the text rather than the context of the Constitution.
Background.
The Constitution sets up the Commonwealth of Australia as a federal polity, with enumerated limited specific powers conferred on the Federal Parliament. The constitutional convention held in Adelaide in 1897, passed a resolution that, as the first condition for the creation of a federal government, "the powers, privileges and territories of the several existing colonies shall remain intact, except in respect of such surrenders as may be agreed upon to secure uniformity of law and administration in matters of common concern." The intention of the framers of the Australian Constitution has been said to be "to create a federal government, albeit of limited jurisdiction, which would be responsive to the popular will in specified matters of national concern and to superimpose it upon existing colonial or state governments which were seen as each adequately responsive to the popular will within their respective territorial constituencies."
One of the tasks facing the inaugural High Court was to establish its reputation and in so doing to win the confidence of the Australian people. Another was to resolve "constitutional loose ends" about the nature of the federal system and the legislative powers of the new Commonwealth that remained unresolved following the debates in the constitutional conventions.
For the first two decades, the High Court stayed reasonably true to the "co-ordinate" vision of the framers in which the Commonwealth and the States were both financially and politically independent within their own spheres of responsibility. The High Court rejected Commonwealth government attempts to extend its authority into what were perceived as areas of State jurisdiction. The court did so by adopting a doctrine of "reserved State powers" combined with "implied inter-governmental immunities", to protect both the Commonwealth and the states from legislative or executive action which "would fetter, control, or interfere with, the free exercise" of the legislative or executive power of the other.
The essence of the first part of the doctrine was that grants of power to the Commonwealth in the Constitution should be read in a restrictive way so as to preserve areas that had been intentionally left as the responsibility of the states, particularly where the Commonwealth power had an interstate element, the trade and commerce power, and the conciliation and arbitration power.
Composition of the High Court.
The three inaugural judges of the High Court, Griffith CJ, Barton and O'Connor JJ, and the two new judges appointed in 1906, Isaacs and Higgins JJ, had been leading participants in the Constitutional Conventions and all are properly seen as among the framers of the Constitution. The Court described the Constitution as "framed in Australia by Australians, and for the use of the Australian people", thus when the Court spoke of what was framers of the Constitution knew, intended or expected, their Honours are referring to their personal experience in that process, and not to the intention or knowledge of the Imperial Parliament in passing the "Commonwealth of Australia Constitution Act" 1900.
Developments of the doctrine.
"Peterswald v Bartley" (1904).
"Peterswald v Bartley" concerned a brewer of beer at Cootamundra in the state of New South Wales. Bartley had a licence under the Commonwealth "Beer Excise Act" 1901, which involved payment of an annual fee together with duty on the quantity of beer. He didn't however have a licence under the NSW "Liquor Act 1898" which required payment of a fixed fee regardless of the brewer's output. Bartley had successfully argued in the Supreme Court of NSW that the NSW licence fee was an excise duty and that the effect of section 90 of the Australian Constitution was that the State Act ceased to have effect once the Commonwealth imposed uniform customs duties.
The High Court held that the NSW licence fee was not an excise as the fee did not depend on the quantity or value of the goods. Instead the NSW Act was for regulating the trade, including ensuring there was no adulteration of the beer. In delivering the opinion of the Court, Griffith CJ set out a principle that would be refined to the reserved state powers doctrine, stating:
In construing a Constitution like this it is necessary to have regard to its general provisions as well as to particular sections, and to ascertain from its whole purview whether the power to deal with such matters was intended to be withdrawn from the States, and conferred upon the Commonwealth. The Constitution contains no provisions for enabling the Commonwealth Parliament to interfere with the private or internal affairs of the States, or to restrict the power of the State to regulate the carrying on of any businesses or trades within their boundaries.
Railway servants case (1906).
Whether State railways employees should be covered by the Commonwealth "Conciliation and Arbitration Bill" was a politically contentious issue. When the Australian Labor Party sought to amend the "Conciliation and Arbitration Bill" to cover State railway employees, a number of radicals in Deakin's government, including Isaacs and Higgins, supported the amendments and helped bring down the government, with Labor forming a minority government under Prime Minister Chris Watson. When finally passed in December 1904, the "Commonwealth Conciliation and Arbitration Act" 1904, purported to cover State railway employees with "Industrial dispute" defined as "including disputes in relation to employment upon State Railways".
The High Court considered the validity of this provision in the Railway servants case. The NSW Rail Traffic Employees Association was, as the name suggests, a union that represented railway employees of the State of NSW and only those employees and sought to be registered under the Commonwealth Act. Another union, the Federated Amalgamated Government Railway and Tramway Service Association, objected to the registration of the NSW union and the issue was referred to the High Court. Higgins who appeared for the respondents, in arguing that the Act was valid, relied not only on the conciliation and arbitration power, but also submitted that railways were vital to interstate trade and commerce and as such was an exercise of the trade and commerce power. Isaacs represented the Commonwealth in his capacity as the then Attorney-General, also arguing for validity based on both the conciliation and arbitration power and the trade and commerce power. NSW and Victoria intervened to argue that the "Conciliation and Arbitration Act" 1904 was invalid in so far as it purported to include State railway servants.
The High Court held that to regulate the terms and conditions of the engagement, employment and remuneration of the State railway servants was to interfere with the control of the State railways. The Court applied the converse of the "implied inter-governmental immunities" to protect the States from legislative or executive action by the Commonwealth which "would fetter, control, or interfere with, the free exercise" of the legislative or executive power of the States. Griffiths CJ again delivered the judgement of the Court, which again emphasised the federal nature of the Constitution, stating that "The Constitution Act is not only an Act of the Imperial legislature, but it embodies a compact entered into between the six Australian Colonies which formed the Commonwealth. ... the Constitution as framed was to be, and was, submitted to the votes of the electors of the States."
Expansion of the Court and the emergence of dissent.
The appointment of Isaacs and Higgins JJ in 1906 disrupted the unanimity of the inaugural members of the Court, with a clash between the three inaugural 'federalists' and the two 'nationalists'. The division in the Court can be seen as a continuation of the debate in the constitutional conventions about the nature of the federal system and the legislative powers of the new Commonwealth.
"R v Barger" (1908).
In "R v Barger" the Court had to consider whether the Commonwealth could use an excise tariff under the taxation power, as a means of protecting manufacturers who paid "fair and reasonable" wages to their employees. The Court was divided 3:2 with the majority, Grifith CJ, Barton &amp; O'Connor JJ, holding that the "Excise Tariff Act" 1906, was invalid. While the doctrine of reserved powers permeated the decision of the majority it is not clear that the decision rested solely on that doctrine. In the course of argument, Griffith CJ stated "The express power given to the Commonwealth Parliament to deal with foreign and inter-state trade and commerce implies a prohibition against interfering with interstate trade and commerce, and that must be remembered in dealing with the other powers given." The majority described the applicable rule in this case as "different, but ... founded upon the same principles", concluding that the power of taxation could not be exercised so as to operate as a direct interference in the internal affairs of the States.
Isaacs &amp; Higgins JJ in dissent.
Isaacs J strongly opposed the reserved powers doctrine, holding "There can be no derogations from the grant expressly made, except those which are expressly stated or which of necessity inhere. It is an inherent consequence of the division of powers between governmental authorities that neither authority is to hamper or impede the other in the exercise of their respective powers, but that doctrine has no relation to the extent of the powers themselves; it assumes the delimitation aliunde. It is contrary to reason to shorten the expressly granted powers by the undefined residuum".
Higgins J similarly rejected the reserved powers doctrine stating "To say that the Federal Parliament cannot make a law because legislation on the subject belongs to the States is rather to invert the true position. The Commonwealth has certain powers, and as to those powers it is supreme; the State has the rest. We must find what the Commonwealth powers are before we can say what the State powers are".
Union Label Case (1908).
The "Union Label case", concerned the use of union labels to indicate that goods were produced by members of a union. Isaac Isaacs, the then Attorney-General, supported the Trade Marks Bill in parliament, describing the union label as a guarantee of wholesomeness, in respect of the wages, hours of labour, and health requirements that applied to the manufacture of the goods. H.B. Higgins, then a member of the House of Representatives, similarly spoke in support of the union label. The Trade Marks Act 1905 provided that an employer could use the union label if there was a closed shop or if the union agreed.
The majority, Griffiths CJ, Barton and O'Connor JJ held that the power with respect to "trade and commerce with other countries, and among the States" does not extend to the internal trade and commerce of a State. The intention of the Constitution was that the power to legislate as to internal trade and commerce was reserved to the States, to the exclusion of the Commonwealth as if section 51(i) contained words prohibiting the exercise of such powers by the Commonwealth. Isaacs and Higgins JJ dissented however their reasons do not specifically address their continued opposition to the reserved powers doctrine.
"Huddart Parker v Moorehead" (1908).
In "Huddart, Parker &amp; Co Pty Ltd v Moorehead", the court was considering the "Australian Industries Preservation Act 1906", commonly referred to as the Anti-trust law, which was an Act that sought to ensure freedom of trade and commerce, protection from unfair competition and preventing price fixing and monopolies. Sections 5 and 8 of the Act were directed to conduct of foreign, trading or financial corporations, relying on the corporations power. The majority, Griffith CJ, Barton &amp; O'Connor JJ, strongly influenced by the doctrine of reserved State powers, held that the corporations power was to be construed narrowly because the trade and commerce power, did not include intrastate trade and