APPENDIX I
ADVICE OF
M.H. McHUGH, Q.C.
COMMISSION OF INQUIRY INTO
THE KYEEMAGH-CHULLORA ROAD
OPINION
I am asked to advise on the constitutional validity of legislation which will direct that container cargo entering or leaving New South Wales from Port Botany and either coming from or destined for, the western suburbs of Sydney be carried by rail between the wharf and the western suburbs?
The scheme will provide for Sydney to be divided into two zones, an eastern and western zone. All fully loaded containers imported into Sydney via Port Botany for the western suburbs would have to be carried by rail to depots at Villawood and Chullora. All fully loaded containers from those suburbs which are exported from Port Botany would have been delivered to the same depots and then taken to the wharves by rail. There would be an absolute prohibition on the use of road transport for carrying fully loaded containers between Port Botany and Chullora and Villawood.
The critical question is whether, consistently with Section 92 of the Commonwealth of Australia Constitution Act 1900, the States of New South Wales can interfere, in the way planned, with the interstate transportation of the containers? Section 92 provides that trade, commerce and intercourse among the States shall be absolutely free. Both the States and the Commonwealth are bound y this Section: James v. the Commonwealth (1936) A.C.578.
In Pilkington v. Frank Hammond Pty Limited 131 C.L.R. 124 goods intended to be exported to London and committed to a contract of sale to buyers in London were carried by road from Rocherlea in Tasmania to Bell Bay, a port in that State. They were then shipped to Melbourne where they were to be transshipped to London. It was held by the High Court of Australia that the total journey from Rocherlea to Melbourne was one of interstate
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trade. Accordingly, a Tasmanian statute could not validly require that the vehicle, carrying the goods, should be registered while on its journey from Rocherlea to Bell Bay.
At p. 135 of the report Barwick, C.J. said:-
"The commencing point for the consideration of this case is the statement, now undoubted in my opinion, that transport for reward is itself trade and commerce, whether persons or goods are carried. It is the transit of the border, actual or in prospect, which gives such transport the quality of interstate trade and commerce. The carrier whose business it is to engage in that transport is himself in respect of it engaged in interstate trade and commerce. This is so, in my opinion, irrespective of the nature, origin or ultimate destination of the goods or persons which are being thus transported...The ultimate destination of what he carries is, in my opinion, irrelevant to the nature of the trade and commerce in which he is thus engaged, vis-a-vis the constitutional immunity. What he carries need not be itself the subject of interstate trade in the hands of its owner or consignor, e.g., the carriage for reward of domestic furniture or personal belongings not intended for sale if effected over State boundaries is an exercise of inter- state trade and commerce."
At p. 176 Gibbs, J. said:-
"Seen from one point of view it was part of the domestic trade of Tasmania and from another as part of overseas trade, but, with equal truth, it also formed part of interstate trade.
It would, in my respectful opinion, be a mistake to think that the present case should be decided by determining what was the dominant purpose of the whole continuous journey of the goods. If that were the correct approach the carriage would no doubt be characterised as effected in the course of, and for the purposes of, overseas trade and if each segment of the journey took its character from the whole it would follow that the carriage by sea across Bass Strait, from the port of one state to the port of another, could not be held to have been in the course of interstate trade. That would clearly not be correct. The relevant question is whether the trade (here the carriage of the goods for reward) was in the course of or for the purposes of interstate trade, and not whether it was in the course of or for the purposes of overseas trade. There is no necessary antinomy
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between the two statements. For the reasons I have given, the carriage from St. Leonards to Melbourne, including that from Rocherlea to Bell Bay, was in the course of, and for the purposes of interstate trade and it did not cease to answer that description because it formed part of a larger carriage ending in London.”
I do not think, however, that Pilkington v. Frank Hammond Pty. Limited (supra) is an authority for the proposition that each and every step in the overseas transportation of goods and that each and every person engaged in the carriage of those goods is protected by Section 92 simply because the ship carrying the goods will stop at an interstate port. In Pilkington v. Frank Hammond Pty. Limited (supra) the goods were transported to Melbourne for the purpose of being transhipped to London. The relevant trade was not that of the owner or consignor of the goods but that of the carrier. The case holds that, where the relevant contract of carriage is one of interstate trade, each and every integer of the interstate journey is protect by Section 92. Hence, if goods are carried from a place in New South Wales to a port in another State for the purpose of transhipment overseas, the total journey from the point of commencement to its termination interstate is protected by Section 92. If, however, goods are sent by ship to an overseas destination, then, in my opinion, the goods do not obtain the protection of Section 92 unless they are to be unloaded at an interstate port: cf. Pioneer Express v. Hotchkiss 101 C.L.R. 536 (where it was held that the carrying of passengers from Sydney to Canberra without a license was prohibited although they were carried on a bus going from Sydney to Melbourne).
The sending of a container from a point in New South Wales to an interstate destination is a transaction which is entitled to the protection of Section 92 of the constitution. But the real question is whether or not a legislative direction that the container cannot be carried by road for part of its interstate journey is consistent with Section 92?
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Suppose an owner of goods at Liverpool wished to send them by container to Melbourne and then arranges a contract whereby a carter undertakes to transport the container from Liverpool to Port Botany. Can the State of New South Wales require the owner and/or the carrier to take the goods to Chullora or Villawood and prohibit them taking the goods to the wharf at Port Botany?
In Commonwealth of Australia v. Bank of New South Wales (1950) A.C. 235 at p.309, Lord Porter said:-
"It is generally recognised that the expression 'free’ in s.92 though emphasised by the accompanying ‘absolutely', yet must receive some qualification. It was, indeed, common ground in the present case that the conception of freedom of trade, commerce and intercourse in a community regulated by law presupposes some degree of restriction on the individual. As long ago as 1916 in Duncan v. State of Queensland 22 C.L.R. 556, 573, Sir Samuel Griffith C.J said: 'But the word ‘free' does not mean extra legem any more than freedom means anarchy. We boast of being an absolutely free people, but that does not mean that we are not subject to law', and through all the subsequent cases in which s.92 has been discussed, the problem has been to define the qualification of that which in the Constitution is left unqualified. In this labyrinth there is no golden thread. But it seems that two general propositions may be accepted:
1) that regulation of trade, commerce and inter- course among the States is compatible with its absolute freedom, and
2) that s.92 is violated only when a legislative or executive act operates to restrict such trade, commerce or intercourse directly and immediately as distinct from creating some indirect or consequential impediment which may fairly be regarded as remote.
In the application of these general propositions, in determining whether an enactment is regulatory or something more or whether a restriction is direct or only remote or incidental, there cannot fail to be differences of opinion. The problem to be solved will often be not so much legal as political, social or economic, yet it must be solved by a court of law. For where the dispute is, as here, not only between Commonwealth and citizen but between Commonwealth and intervening States on the other one hand and citizens and States on the other, it is only the court that can decide the issue. It is vain to invoke the voice of Parliament."
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Lord Porter went on to adopt the statement of Latham, C.J. in the Milk case 62 C.L.R. 116 at p.l27:-
"One proposition which I regard as established is that simple legislative prohibition (Federal or State), as distinct from regulation, of inter- state trade and commerce is invalid.”
This passage, of course, does not mean that prohibition is inconsistent with the regulation. Nor did the Privy Council intend so to say. Thus Lord Porter said (ibid at p.311):-
"It was urged by the appellants that prohibitory measures must be permissible, for otherwise lunatics, infants and bankrupts could without restraint embark on interstate trade, and diseased cattle or noxious drugs could freely be taken across State frontiers. Their Lordships must therefore add, what, but for this argument so strenuously urged, they would have thought it unnecessary to add, that regulation of trade may clearly take the form of denying certain activities to persons by age or circumstances unfit to perform them, or of excluding from passage across the frontier of a state creatures or things calculated to injure its citizens. Here again a question of fact and degree is involved..."
So here the question is whether the prohibition on carrying containers by road transport between Chullora or Villawood and Port Botany is truly regulatory of interstate trade or whether it is a simple prohibition? Now it is clear from the decisions in Hughes & Vale Pty. Limited v. New South Wales 93 C.L.R. 1 and Hughes & Vale Pty. Limited v. The State of New South Wales (No.2) 93 C.L.R. 727 that prohibition for the purposes of co-ordinating transport is not regulation of trade. If the prohibition is to be upheld as regulation, it must be on other grounds. The conception of a regulatory law is one on which the present members of the High court of Australia are very much divided. The narrow view of Barwick, C.J. and Aickin, J. is that a law is regulatory only if it regulates the mutual relationship of people enqaged in trade. Thus in Clarke King & Company Pty. Limited v. Australian Wheat Board 140 C.L.R. 120 at p.153 Barwick, C.J. denied that the regulatory nature of the law could be determined wholly or in part by balancing what might be thought to be of advantage to the community,
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or some part of it, against the loss of the individual trader’s ability to participate in interstate trade. The view of Stephen and Mason JJ. is to the contrary. Thus in Permewan Wright v. Trewhitt 27 A.L.R. 182 at p.198 Stephen J. asserts that the freedom guaranteed by Section 92 can be "qualified in the interests of the community at large, of which community interstate traders form a part". In the same case Mason J. (ibid at p.205) asserted that Section 92 has a predominant public character which is to be understood as "presupposing a society in which conduct is regulated in the interests of the community, rather than a society in which conduct is merely regulated in the interests of those engaged in trade". The views of Stephen and Mason JJ. also had the support of Jacobs J. before his recent retirement on account of ill-health. Thus it will be seen that the approach of Stephen and Mason JJ., if it can command the support of a majority of justices, opens the way for a more extensive control, but not outright prohibition, of interstate trade than that which has hitherto been thought to be consistent with Section 92. At the present time the views of Stephen and Mason JJ. do not prevail. Murphy J., however, has a highly individualistic theory of Section 92 that the section only strikes down laws which impose fiscal burdens. Accordingly, in the great majority of cases his reasons will uphold the validity of legislation. This means that he can be counted with Stephen and Mason JJ. Gibbs J. takes up a position somewhere between those of the extreme Barwick-Aickin and Stephen-Mason views. It would seem likely that he would support legislation fixing standards imposed for the benefit of consumers, but would not go so far as Stephen and Mason JJ: see Permewan Wright v. Trewhitt 27 A.L.R. 182 at p.190. Wilson J. has not written any judgement on Section 92 as yet. He was, however, Solicitor-General for Western Australia and over many years argued for the validity of legislation which was attacked under Section 92 of the Constitution. I doubt that he would favour the extreme Barwick-Aickin view. I think that he would at least go so far as Gibbs J. and might even be an adherent to the Stephen- Mason JJ. view.
The argument that a law prohibiting the road transportation of containers from the western suburbs to
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Port Botany is regulatory depends upon the undeniable fact that the opening of Port Botany will cause considerable environmental problems in the municipalities of Rockdale, Bexley and Campsie. The problem arises because the opening of Port Botany will alter the balance between containers carried by road and containers carried by rail. Each of the Port Botany terminals is primarily directed towards a road delivery system. Fewer containers will be carried by rail than was the case when trade was confined to Port Jackson. There will, in consequence, be many more containers on the road. Further, the move to Port Botany will change the direction of travel of the vehicles carrying containers. Container vehicles will be making their way towards Port Botany rather than Port Jackson and thus using a different road network.
There was overwhelming evidence at the Inquiry that containers detrimentally affect the environment. The matter appears to be put accurately in the Environmental Impact Statement submitted by the Australian National Line:-
"...The movement of container trucks has given considerable cause for concern to people who are affected by them. Some of the environmental impacts of container vehicles, or indeed of any similar large vehicles, can be discussed in objective or even quantitative terms fumes, safety, traffic congestion, pedestrian delays, noise and vibration.
Others are less tangible and possibly emotive. It would seem that these factors are linked with the sheer size of the container on its truck.
A standard I.S.O. container measures 20 ft. by 8ft. by 8ft. and weighs up to 20 ton. Where a 40ft. container or two 20ft. containers are carried on a single vehicle or trailer unit the length is up to 17.4 m. (57ft.)."
The Transport Workers' Union of Australia, N.S.W. Branch, which represents owner/drivers as well as employee- drivers, recognised the environmental impact of the use of container trucks using Port Botany. The submission of the union reads:-
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"Failure to construct this road (the Kyeemagh- Chullora Road) will see Rockdale, Kogarah and surrounding suburbs saturated by heavy truck movement...To overwork the existing road system adds not only to pollution levels and causes inconvenience with traffic density, but indeed the very safety of future generations will be put at risk unless action is taken now to construct a road link...The need for early action to be taken to reduce the environmental and transport costs of trucks filtering through residential streets and disrupting shopping centres and inconveniencing the community in general must be considered in costing the proposed road.”
The Planning and Environment Commission submitted figures to the Inquiry that some 51.2 trucks per day (some of which would be empty) would travel through Rockdale, Bexley and Campsie unless steps were taken to regulate the container traffic. Rockdale could have up to a maximum of 89 container trucks per hour in peak periods.
In the Rockdale Council's submission to the Inquiry, it was pointed out that container trucks would pass through Brighton-Le-Sands, Rockdale, Bexley and Bexley North Shopping Centres and pass schools, churches and hospitals.
There was also a considerable body of evidence before the Inquiry that certain areas through which the container trucks would pass already suffer significantly from the effects of noise and other forms of environmental degradation that follow in the wake of a heavy traffic stream.
Upon this evidence the question which arises is whether the environmental damage caused by the flow of containers will be so great that no further container trucks should be allowed to traverse the Port Botany – Villawood - Chullora route? There is no doubt, and indeed the Privy Council has recognised, that the need for public safety may be such that not all persons desiring of carrying goods interstate may be able to do so. In Hughes & Vale Pty. Limited v. New South Wales 93 C.L.R. 1 at p. 32-33 the Judicial Committee said:-
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"Their Lordships can imagine circumstances in which it might be necessary, e.g. on grounds of public safety, to limit the number of vehicles or the number of vehicles of certain types in certain localities or over certain routes, with the result that some applicants might be unable to obtain licences. Such a system might well be justified as regulatory."
For example, I see no reason why, if the evidence of danger was sufficient, the carrying of nuclear weapons in the Sydney Metropolitan Area should not be prohibited. As Stephen J. pointed out in Clark King & Company Pty. Limited v. Australian Wheat Board 140 C.L.R. 120 at p.172:-
"Laws may also be regulatory, in the sense of not conflicting with Section 92, although they are not concerned simply with the manner in which trade is conducted but rather with the exclusion from all trade of particular classes of persons, things or behaviour because their characteristics are such that the public interest requires such exclusion."
In Greutner v. Everard 103 C.L.R. 177 the High Court upheld the application to interstate traffic of legislation which provided that, without a special permit, a motor vehicle could not be driven on any highway if the height of the vehicle and load was over 12 ft. or, in the case of an articulated vehicle, its length exceeded 45 ft.
At p.187 Dixon, C.J. said:-
"There is of course no doubt that the provisions now in question place interstate transactions under no greater disadvantage than that borne by transactions confined to the State. Nor can there be any doubt that the directions given by S.33 (1)(b) and (d) are relevant to the proper conduct of the carriage of goods on the roads, that is to say the convenience and safety of the traffic generally, including the carrier. What is really impugned is the reasonableness of the provision. If it be correct that no maxima of height and length can be prescribed of general application throughout Victoria without infringing upon the freedom of trade between the States unless the maxima be reasonable for the best road and the safest environment, it is hardly necessary to say that little support might be found for
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the view that the restrictions did conform to such a standard. But the question of regulating heights and lengths of vehicles without infringing the freedom of interstate carriage of goods is not to be solved in that piece-meal fashion. It must be a question to be settled legislatively or under legislative authority. For what is presupposed is a law in the interests of general safety. It must be regarded as something operating over long journeys and over many routes chosen by the drivers of vehicles. So long as the general law is not shown in its operation to be truly prohibitory or restrictive of a description of interstate traffic and at the same time to lack the justification found in the considerations appearing in the foregoing citations then no invasion of s.92 is established."
Kitto J. said (at pp.187-188):-
"The provisions which we have to consider in these cases fall, I think clearly into the class of laws which, though placing restrictions or other burdens upon individuals engaged in interstate trade, commerce or intercourse, yet do not detract from the freedom of the individuals' interstate trade, commerce or intercourse itself. The class is distinguished not by the lightness of the burdens imposed, but by the nature of the laws that impose them. When s.92 speaks, as it does, of trade, commerce and intercourse as activities among organised communities, it quite evidently speaks of them as carried on not amidst anarchy, but in conformity with rules. In whatever terms it may be right to define the class of rules which is postulated, because of the very nature of the communities the definition must at least be wide enough to include a law of general application limiting the permissible dimensions of the units of traffic on the roads and wearing no other aspect than that of a law directed to the obviating of physical damage to persons or property. For the purpose of determining whether a law is of such a description, considerations of the need for it or of its reasonableness may conceivably be relevant in some circumstances. But once the description is found to apply, it cannot matter, in my view, whether the restriction appears necessary or reasonable, large or small, regarded either generally or in relation to the circumstances of a particular case. For in any event the law, because of its character, must be conceded a place as part of the legal framework within which s.92 contemplates inter- state trade, commerce and intercourse as being freely carried on. There is, I think, no room for doubt that the laws here in question belong to this class."
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I think there is no doubt that legislation could varidly prescribe a licensing scheme whose operation might mean that some or even many container trucks could not operate on a particular day. If, for example, the evidence showed that saturation point would be reached if a further 100 container vehicles came through these suburbs, there could be no doubt that legislation could prohibit more than 100 containers traversing, the suburbs each day. Moreover, legislation could validly prescribe a licensing system to determine which vehicles should constitute the 100. A licensing system which provided that licenses should be granted in order of the lodging of applications would he valid.
But the critical question is whether a scheme can prohibit all container vehicles. The Banking case and the Hughes & Vale Pty. Limited case finally established that section 92 gives each trader an individual right to engage in interstate trade. It is his trade, and not the volume of trade which must be regulated. A law prohibiting a carrier from trading at all can be justified only if his carrying is injurious to public safety. It is one thing to say that a carrier cannot carry on a certain day or at certain hours or on certain streets. It is a very different thing to say that he cannot carry at all in any circumstances.
There is much authority for the proposition that a law is not regulatory of interstate trade if there are other less inconvenient ways of achieving the legislative object: see for example North Eastern Dairy Company v. Dairy Industry Authority 134 C.L.R. 559 at p.581 per Barwick, C.J.; at p.601 per Gibbs, J.; at p. 608 per Mason, J.; at p.631 per Jacobs, J.
I have found the question of outright prohibition of container trucks engaged in interstate trade a very difficult one. But in the end I have come to the conclusion that such a prohibition can be justified.
First, if one considers the matter from the point of
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view of the consignor or consignee of the goods, there is no prohibition on his interstate trade. All that is done is that he is directed that a small part of the journey must be by rail and not by road. It appears that the additional cost of this procedure would be $50 - $60 per container. I do not think that either the cost or the direction can be regarded as unreasonable in the case of the consignor or consignee of interstate goods.
The more difficult question is that of the carrier. From his point of view he is prohibited from engaging in interstate trade. Yet there is something artificial about saying that he is engaged in interstate trade. After all he is not carrying across the border. According to the High Court doctrine, which has developed in connection with Section 92, he is engaged in interstate trade because his activities are part of a larger inter- state journey. If, however, one can regulate the consignor or consignee of the goods, it seems extremely artificial to say that you are not, in those circumstances, regulating the carrier.
Quite apart from this aspect, however, I think that the evidence of damage to the environment is such that even the carrier of interstate goods can be prohibited. The evidence shows that the routes from Port Botany to Villawood or Chullora are already saturated with heavy traffic, that they pass through heavily populated residential districts and shopping centres, that the streets are relatively narrow and that each truck itself does physical damage. I think that, in accordance with the principles laid down in Greutner v. Everard (supra), the legislature is entitled in its judgement to exclude all container traffic from the Rockdale, Campsie and Bexley areas.
I think that at least a majority of the High Court judges would approve the application of the legislation to interstate trade. It may well be that Barwick, C.J. and Aickin, J., because of their conception of a
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regulatory law, would hold that Section 92 invalidated the legislation insofar as it applied to interstate trade. But I would expect that Gibbs, Mason, Murphy and Wilson JJ. would uphold the legislation.
The foregoing discussion has dealt with the effect of a prohibitory law on interstate trade. It goes without saying, however, that the constitutional power of the State of New South Wales to make laws for the peace order and good government of the State enables prohibitory laws to be made in respect of all other forms of trade. Thus intrastate, or overseas trade, so far as it operates in New South Wales, is clearly within the power of the New South Wales Parliament. With respect to such subjects, i.e. overseas or intrastate trade, the parliament may make such laws as it pleases. Further, even if contrary to my view the State of New South Wales could not prohibit the carriage by container of interstate goods, it can still prohibit the container carriage of goods moving only intrastate or overseas. Even if Section 92 protects interstate goods, it would not protect purely intrastate or overseas goods even though carried in the same container: see Pioneer Express v. Hotchkiss (supra).
SUMMARY
1. It is beyond argument that the legislature can prohibit container trucks carrying purely overseas or intrastate cargo.
2. It is clear that, if containers carry both interstate and intrastate or overseas cargo, the legislature can prohibit the carrying by container of the intrastate or overseas goods.
3. In my view a licensing scheme limiting the number of container trucks would clearly be valid so far as interstate trade is concerned. But I would go further. I think that the legislature can, if it wishes, prohibit the carrying by road of containers between Port Botany and the western suburbs even when those containers carry goods which are on an interstate journey.
Selborne Chambers
2nd October, 1980
M.H. McHUGH
