HIGH COURT OF AUSTRALIA

                                                          West

                                                           Vs.

                                             Commissioner of Taxation

                        (Latham C.J., Rich, Starke, Dixon, Evatt and McTiernan JJ.)

                                                     3 June 1937

Latham C.J.

The question which arises upon this case stated is whether moneys received by a retired Federal
public servant by way of pension under the Superannuation Act 1922-1934 are subject to taxation
under the Special Income and Wages Tax (Management) Act 1933 of New South Wales.

1.

There is no doubt that the New South Wales Act purports to impose taxation upon the moneys in
question by requiring them to be included in the income of the pensioner for purposes of assessment
under the Act. As this is common ground between the parties it is not necessary to refer to the
particular provisions which bring about this result. The real question is whether the legislation, in so
far as it requires such a pension to be included in assessable income for the purposes of taxation, is
valid. The Superannuation Act 1922-1934 provides, in sec. 5, for the establishment of a fund into
which the contributions of employees and sums provided by the Commonwealth are paid. This fund
is the source of the benefits under the Act. Sec. 5 (3) expressly provides that the income of the fund
shall not be subject to taxation by the Commonwealth or a State. Sec. 23 provides that every
contributor shall be entitled to a pension on his retirement on or after attaining the maximum age for
retirement, and sec. 29 provides for the scale upon which pensions are to be paid. Sec. 80 provides
that pensions under the Act shall not be in any way assigned or charged or passed by operation of
law to any person other than the pensioner or beneficiary, and that any moneys payable out of the
fund on the death of an employee or beneficiary shall not be assets for the payment of his debts or
liabilities, subject to a proviso permitting garnishee orders against instalments of pension.

It therefore appears that the Commonwealth Parliament has in sec. 5 explicitly dealt with the
relation of income tax to the superannuation fund and that in sec. 80 it has expressly excluded
certain State legislation and certain principles of common law and equity from application to
pensions payable under the Act.

The Financial Emergency Acts 1931, No. 10 of 1931 and No. 47 of 1931, contain provisions which
must also be considered. These Acts reduced, inter alia, Commonwealth salaries and pensions. Sec.
19 of the former Act, as amended by sec. 3 of the latter Act, contains provisions relating to the
taxation by a State of salaries paid by the Commonwealth. This section provides that the Governor-
General may by regulation prescribe the maximum amount of tax to which the said salaries, &c.,
may be subject under the general income tax laws of the States or under special laws imposing tax
upon income. The New South Wales Special Income and Wages Tax (Management) Act is a law of
the latter character. Sec. 19 goes on to provide that upon the making of regulations the salaries, &c.,
shall, notwithstanding anything in any other Act, not be subject, under any of the State laws
mentioned, to any higher amount, rate, percentage, or extent of taxation than is prescribed. These
provisions, by virtue of sec. 26 of Act No. 10 of 1931, apply to the pension of the appellant.
Regulations prescribing maximum limits of State taxation were made with respect to salaries but not
with respect to pensions. Accordingly no limit has been prescribed for the taxation of pensions.

2.

It is desirable at this stage to refer to the Commonwealth Salaries Act 1907. This Act was passed at
a time when it had been held by this court that the taxation by a State in common with other salaries
of salaries or allowances paid by the Commonwealth to its officers, members of Parliament and
others was an interference with the exercise of a power by the Commonwealth because it interfered
with an instrumentality of the Commonwealth and was therefore prohibited by the Constitution.
This proposition was laid down in Deakin v. Webb[1]; Baxter v. Commissioners of Taxation
(N.S.W.)[2]; and see also D'Emden v. Pedder[3].

The Commonwealth Salaries Act was evidently passed in accordance with the suggestion made by
Griffith C.J. in Baxter's Case[4] and in Flint v. Webb[5]. This Act permits the taxation of
Commonwealth salaries to the extent provided in the Act. The Act does not apply to
Commonwealth pensions.

3.

In the Engineers' Case[6] the court considered the general principles of interpretation of the
Constitution in relation particularly to sec. 51 (xxxv.) of the Constitution. The Engineers' Case[7]
was not challenged during the argument, and I do not propose to review the general questions which
were discussed in that case. There the court held that the Commonwealth Parliament had power
under sec. 51 (xxxv.) to pass a Conciliation and Arbitration Act under which an award could be
made in an inter-State industrial dispute which would be binding upon a State or State authority
which was a party to the dispute. In reaching its decision the court reconsidered the doctrine of
immunity of instrumentalities which had been laid down in D'Emden v. Pedder[8] and applied in the
other cases mentioned. In D'Emden v. Pedder[9] the doctrine was applied in favour of the
Commonwealth. In the Engineers' Case[10], the court declined to apply it in favour of the States,
and held that the doctrine of implied prohibition could no longer be relied upon in favour of either
the Commonwealth or the States. The decisions in Deakin v. Webb[11] and in Baxter v.
Commissioners of Taxation (N.S.W.)[12] were said in the Engineers' Case[13] to be based upon two
grounds, the first, the doctrine of implied prohibition, the second, the proposition that there was an
inconsistency between a State income tax Act and a Commonwealth law fixing officers' salaries, so
that, by reason of sec. 109 of the Constitution, the State law failed to the extent of the inconsistency.
Reference to the reasons given for those decisions, however, does not support the statement that
they were, in any respect, based upon sec. 109. In the Engineers' Case[14] the first ground is
declared to be erroneous and the second ground (which is approved as a relevant principle) is
declared to depend upon the construction of the Commonwealth and State Acts which are alleged to
be in conflict.

The invalidity of the State Act in such a case is said to depend upon the express words of sec. 109,
and not upon any implication prohibiting the State from interfering with the means employed by the
Commonwealth for the performance of its constitutional functions[15]. Accordingly, if
Commonwealth legislation passed under one of the powers of the Commonwealth Parliament
conflicts with State legislation either expressly or impliedly (such State legislation being legislation
which, apart from sec. 109, would have been valid) the State legislation necessarily fails. The
"actual decision" of the court in Chaplin v. Commissioner of Taxes (S.A.)[16] is stated to be a correct
decision upon this ground. In Chaplin's Case[17] the court upheld the validity of the
Commonwealth Salaries Act 1907. The validity of the Act is stated[18] to be "the question" raised
by the appeal. The "actual decision" was that the salaries of Commonwealth officers were, after the
passing of the 1907 Act, liable to State income taxation provided that the laws imposing such
taxation complied with the provisions of the Act. In the Engineers' Case[19], therefore, the court
must be taken to have rejected the view that there was an implied constitutional prohibition which
prevented the States from taxing the salaries of Federal officers. The court must also be taken to
have approved the actual decision in Chaplin's Case[20] that salaries of Federal officers were
subject to taxation, but only if that taxation were in accordance with the terms of a Commonwealth
statute permitting such taxation. See also The Commonwealth v. Queensland[21]:"Chaplin v.
Commissioner of Taxes (S.A.)1(1911) [1911] HCA 13; 12 C.L.R. 375. established the immunity of
Federal salaries from State income tax. This court has recently, in Amalgamated Society of
Engineers v. Adelaide Steamship Co. Ltd.3(1920) [1920] HCA 54 [1920] HCA 54; ; 28 C.L.R. 129.
expressed its opinion that the decision was correct, by reason of the controlling force of Federal
legislation."

This view of the matter depends upon the acceptance of the proposition that there is an
inconsistency between a Commonwealth Act fixing salaries of Commonwealth officers and a State
Act imposing a tax upon such salaries, but that the Commonwealth Parliament may, by suitably
framed legislation, indicate its intention that such salaries should be taxable to a certain extent, and
that thereupon, the inconsistency disappearing pro tanto, the salaries are so taxable. It remains to be
considered whether, in the light of more recent decisions, the first part of this proposition can be
maintained. It will subsequently be considered whether the Commonwealth Parliament can validly
legislate with respect to the application of State statutes in relation to subjects falling within Federal
legislative power.

4.

Before considering this question, it must be observed that the present case relates to a
Commonwealth pension and not to a Commonwealth salary. In my opinion it is not possible to draw
any effective distinction for the purposes of this case between salaries and pensions. The payment of
pensions to retired officers of the Commonwealth is, as the Federal legislation on the subject of
superannuation shows, regarded by the Commonwealth Parliament as a desirable provision which
should be an incident of the service of a public officer. The fact that he has ceased to perform his
functions does not affect the proposition that his remuneration is essentially associated with the
service which he has rendered. (Pensions to his dependants are, in my opinion, upon the same
footing.) Any taxation of his pension by State action will be inconsistent with a Federal law entitling
him to a pension in exactly the same way and to exactly the same extent (if at all) as State taxation
of his salary would be inconsistent with a Federal law fixing his salary.

The Engineers' Case[24], for the reasons which I have stated, involves the proposition that the
Commonwealth Salaries Act 1907 is the source of the power of the States to tax Federal salaries by
way of income tax. There is no such basis for State taxation in the case of pensions. Accordingly the
conclusion would appear to follow that a State Parliament cannot validly legislate so as to require
such pension to be included in the assessable income of a pensioner for the purpose of imposing any
form of income tax. This proposition, however, depends upon the doctrine that a general income tax
Act, passed by one Parliament, is inconsistent with an Act passed by another Parliament fixing rates
of salaries. It will be seen that this proposition cannot now be maintained.

5.

In the case of Cooper v. Commissioner of Income Tax (Q.)[25] this court held that there was no
inconsistency between the Queensland Constitution Act, prescribing the salaries to be paid to
judges, and a State law imposing a tax generally upon the income of each citizen of the State to the
extent of the general balance of his income. In that case there was no conflict of State power with
Federal power, but there was an alleged conflict between two State Acts, one being the Constitution
of the State. The court held that there was no real conflict. I am unable to reconcile this decision
with the decisions in Deakin v. Webb[26] and Baxter v. Commissioners of Taxation (N.S.W.)[27], or
with the view impliedly taken of those cases in the Engineers' Case[28].

Further, in Caron v. The King[29] the Privy Council held that the Parliament of Canada, having
power to pass an income tax Act, was entitled to impose such a tax in the case of a Provincial
Minister. In the course of the judgment in that case, the decision in Abbott v. City of St. John[30]
was expressly approved. In the latter case the Supreme Court of Canada held that the imposition of
income tax by a Province on a Dominion official was not inconsistent with a provision in the British
North America Act 1867 which conferred upon the Dominion Parliament the exclusive power of
fixing salaries of Dominion officials. Since this appeal was argued, in the case of Forbes v.
Attorney-General for Manitoba[31], the Privy Council has itself decided the same question in the
same way. The Privy Council referred with approval to the distinction between a special tax on
Dominion officials and a general undiscriminatory tax upon the income of residents, holding that it
was within the power of a Provincial Parliament to impose a tax of the latter kind upon the income
of a Dominion official, which included his official salary. Reference was made to the possibility of
the use of provincial taxation so as to paralyse Dominion services, and it was said that this question
could be considered when it actually arose. It is, however, desirable to say something more definite
about such a possibility, because it must not be supposed that the principle upon which these
decisions rest prima facie justifies any State taxation of Federal officers simply because it is State
taxation and because a State Parliament has power to impose taxation.

In the first place, if a State Parliament passed an Act purporting to deal specifically with Federal
salaries or pensions it would be necessary to consider whether, in view of sec. 52 of the
Constitution, such an Act would be valid. Sec. 52 provides that the Commonwealth Parliament shall
have "exclusive power to make laws for the peace, order and good government of the
Commonwealth with respect to ... (ii.) Matters relating to any department of the Public Service the
control of which is by this Constitution transferred to the Executive Government of the
Commonwealth." Thus the Commonwealth Parliament has exclusive power to legislate with respect
to the salaries and pensions of Commonwealth officers. General undiscriminatory State income tax
laws may, for the reasons already given, be not inconsistent with Federal laws relating to such
salaries or pensionsthey are not legislation with respect to that subject matter. But discriminatory
State legislation might well be held to be such legislation and therefore invalid under sec. 52 of the
Constitution. In the second place, a State Act imposing a discriminatory tax upon Commonwealth
officers or pensioners might well be regarded as not being within the power of a State Parliament to
make laws for the peace, welfare and good government of the State. It would be legislation
specifically dealing with matters relating to the government of the Commonwealth, with which the
State Parliament has no concern, and not relating to the government of the State. A corresponding
objection would apply in the case of Commonwealth legislation specifically singling out State
servants for discriminatory taxation.

These two possible objections to State legislation which is specifically directed against Federal
agencies are, it will be understood, based upon specific provisions in the Constitutions of the
Commonwealth and of the States respectively. They do not depend upon any implication in the
Commonwealth Constitution of a general prohibition against State interference with Federal
instrumentalities, and they may be entertained quite independently of any opinion upon the latter
subject. I respectfully venture to suggest that such a line of approach is likely to be more
satisfactory, from a legal point of view, than any consideration of the question whether or not a
particular tax amounts "under the guise of exercising power of taxation" to "confiscation of a
substantial part of official and other salaries"see, per Davies J., Abbott v. City of St. John[32] as
quoted in Caron v. The King[33] and in Forbes v. Attorney-General for Manitoba[34]. The
distinction between, on the one hand, heavy taxation, and on the other hand, confiscation of a
substantial part of a salary, is a test the application of which would inevitably involve differences of
individual opinion which it would be difficult to resolve by reference to any objective standard.

It is true that the decisions in Caron v. The King[35] and Forbes v. Attorney-General for
Manitoba[36] are decisions upon the specific provisions of the Canadian Constitution, but there is
no room for doubt that the decisions assert and rest upon the proposition that a general
undiscriminatory income tax Act passed by one Parliament is not inconsistent with an Act passed by
another Parliament fixing salaries of public officials. This court is bound by any relevant decision of
the Privy Council, and it must therefore be held that a general undiscriminatory State income tax
Act is not inconsistent with Federal Acts fixing or providing means for fixing salaries and pensions.
Thus, in so far as Deakin v. Webb[37] and Baxter v. Commissioners of Taxation (N.S.W.)[38] decide,
in so far as Chaplin's Case[39] assumes, and in so far as the Engineers' Case[40] may by
implication support the view that there is inconsistency in such a case, these cases can no longer be
regarded as good law.

6.

But these considerations do not exhaust the problem. It may be the case that the Commonwealth
Parliament has effectively legislated to exclude the application of State income tax Acts to incomes
of persons so far as such incomes include Federal pensions. It is now necessary to inquire, first,
whether the Commonwealth Parliament has power to pass such legislation and, secondly, whether it
has in fact done so.

7.

The decisions of this court support the view that such Federal legislation would be valid. Chaplin's
Case[41] necessarily assumes that the Commonwealth Parliament has power to enact its laws with
respect to Federal salaries either in such terms that a State Act imposing taxation upon such salaries
is consistent with or in such terms that it is inconsistent with the Federal Act. A State income tax Act
was held to be inconsistent with a Federal law fixing Federal salaries simpliciter, but not to be
inconsistent with the Commonwealth Salaries Act 1907, which, in terms, permitted certain State
taxation of such salaries and impliedly prohibited further State taxation thereof.
The case of R. v. Brisbane Licensing Court; Ex parte Daniell[42] is an example of the application of
the principle that the Commonwealth Parliament can legislate so as to exclude the operation of State
law in relation to a matter controlled by Federal law. The Commonwealth Electoral (War-time) Act
1917, sec. 14, provided that "on the day appointed as polling day for an election of the Senate or a
general election of the House of Representatives, no referendum or vote of the electors of any State
or part of a State shall be taken under the law of a State." Under a Queensland statute a local option
poll was appointed to be held on a day which was appointed under Federal law as a polling day for
an election of Senators for the State of Queensland. It was held by this court that the local option
poll and the vote thereat were illegal and of no effect because the Commonwealth Parliament had, in
a statute passed with respect to a matter within its power, expressed its intention to exclude the
operation of certain State legislation which in fact, and in the opinion of the Commonwealth
Parliament, had a relation to that matter.

In The Commonwealth v. Queensland[43] the court had to deal with a case involving similar
questions. The Commonwealth Inscribed Stock Act 1911-1918 provided that the interest derived
from certain Commonwealth stock or Treasury bonds should not be liable to income tax under the
law of a State. It was held that this provision was valid. Isaacs and Rich JJ. said:"The loan is a
transaction outside the jurisdiction of the States; the interest is an income of the lender created by
the Commonwealth. And, being created by the Commonwealth for its own purpose, it may be
surrounded with such characteristics as to secure to the Commonwealth the full benefit it desires to
obtain. If States could tax Commonwealth bonds in the hands of the holder or the interest he
receives, notwithstanding Commonwealth legislation to the contrary, the financial operations of the
whole nation might be frustrated by the action, and possibly divergent action, of portions of the
nation"[44]. These words can be applied, mutatis mutandis, to Federal salaries or pensions and to
the general subject of the remuneration and terms of employment of members of the
Commonwealth Public Service.

In Pirrie v. McFarlane[45] the majority of the court held that the Victorian Motor Car Act 1915,
sec. 6, prohibiting any person from driving a motor car on a public highway without being licensed
for the purpose, was not inconsistent with Federal legislation requiring and entitling members of the
defence forces to obey the lawful commands of a superior officer. It was pointed out in the reasons
for judgment that the relevant Federal Acts excluded the operation of certain State legislation in
express terms but that they did not so exclude the operation of the Motor Car Act. Knox C.J.
said:"The Commonwealth Parliament has, in my opinion, undoubted power, by legislation with
respect to a subject which is within the ambit of its legislative powers, to override the provisions of
any State law, but in the absence of any such enactment the State law must be given its full
effect"[46]. See also per Higgins J.[47] and per Starke J.[48]. The opinions of the dissenting justices
concur in accepting the principle that it is within the power of the Commonwealth Parliament to
legislate so as to exclude the application of State law in relation to matters which are within the
sphere of Commonwealth legislative power (per Isaacs J.[49]Rich J.[50] agreed with the reasons
for judgment of Isaacs J.).

It may be repeated that secs. 5 and 80 of the Superannuation Act 1922-1934 provide examples of
the application of this principle. Sec. 5 provides that the income of the superannuation fund shall not
be subject to State taxation. Sec. 80 is in the following terms:

Pensions and other benefits under this Act shall not be in any way assigned or charged or passed by
operation of law to any person other than the pensioner or beneficiary, and any moneys payable out
of the fund on the death of an employee or beneficiary shall not be assets for the payment of his
debts or liabilities: Provided that nothing in this section shall prevent the making of an order in the
nature of a garnishee order against any instalment of a pension payable to a person who has been an
employee.

These sections purport to exclude, in relation to the superannuation fund and to pensions and other
benefits under the Act, the application of certain State Statutessuch as income tax Acts,
administration and probate Acts, and other statutes.

The authorities cited show that the Commonwealth Parliament may, if it thinks proper, by apt
legislation exclude the application of State law in relation to a matter entrusted by the Constitution
to the control of the Commonwealth.

8.

There is, as already stated, no doubt that the Commonwealth Parliament has full power to legislate
with respect to the subject of salaries and pensions of Federal officers. The Parliament may, if it
thinks proper, exclude the application of State income tax legislation in relation to such salaries and
pensions. The question which finally arises in this case is whether the Commonwealth Parliament
has done so. In order to establish the immunity of Commonwealth pensioners from State income tax
in respect of their pensions it is necessary to find some clear indication in the legislation of the
Commonwealth Parliament that it is intended that they should not be subject to the general law of
the State in this respect.

In the case of salaries there is such an indication in the Commonwealth Salaries Act 1907. That Act
necessarily involves the propostion that Commonwealth salaries are not to be taxable otherwise than
in accordance with and subject to the limits imposed by the Act. But the Act does not deal with
pensions paid to persons who are no longer officers of the Commonwealth.

As already stated, the Superannuation Act, in sec. 5 and sec. 80, deals expressly with the
applicability of State laws to matters connected with Federal superannuation. It is a fair conclusion
that in those provisions the Commonwealth Parliament dealt completely with the subject of
excluding the application of State laws to pensions and pensioners. The provisions of the Financial
Emergency Acts dealing with State taxation of salaries and pensions assume that they are already
taxable by the States. The Act provides only for regulations prescribing a maximum limit beyond
which they shall not be so taxed. The absence of regulations dealing with pensions merely brings
about the result that, if Commonwealth pensions are taxable by the States, no maximum limit has
been prescribed beyond which such taxation cannot be imposed. The absence of a regulation
imposing a maximum limit cannot be regarded as amounting to a positive provision that they shall
not be taxed at all.

Thus, in my opinion, Commonwealth pensions may validly be taxed under general State taxation
laws unless the Commonwealth Parliament prohibits such taxation in whole or in part. There is no
law of the Commonwealth Parliament which contains any such prohibition and therefore, in my
opinion, such pensions are subject to the laws of the States relating to income tax to the same extent
as other income received by pensioners. The questions asked in the case should be answered
accordingly.

(Since this judgment was written the case of The Judges v. Attorney-General of Saskatchewan[51]
has been decided by the Judicial Committee of the Privy Council. The decision in the present case is
in accord with the principles there stated.)

Rich J.

In Amalgamated Society of Engineers v. Adelaide Steamship Co. Ltd.[52] the following passage
occurs:"Deakin v. Webb and Lyne v. Webb3(1904) 1 C.L.R. 585. were cases in which it was held
that the State Income Tax Act of Victoria did not validly extend to tax moneys which had been
received as Commonwealth salary. The decision was rested on two grounds, both found in the
American case of Dobbins v. Commissioners of Erie County4(1842) [1842] USSC 6; 41 U.S. 435..
The first ground is that taxation of a person who is a Federal officer necessarily, per se, so far as it
reaches money he received as salary, and although it so reaches that money by reason of provisions
which apply generally to the whole community without discrimination, is an interference with the
means employed by the Commonwealth for the performance of its constitutional functions. The
second ground is that the State Income Tax Act was in conflict with the Commonwealth law fixing
the officer's salary. The law, as laid down in those cases, was dissented from by the Privy Council in
Webb v. Outrim5(1907) A.C. 81 [1906] UKPCHCA 4; ; 4 C.L.R. 356., and was disapproved by two
justices as against three in the subsequent case of Baxter v. Commissioners of Taxation
(N.S.W.)6(1907) 4 C.L.R. 1087.. Having regard to the principles we have stated, the first ground is
erroneous. An Act of the State legislature discriminating against Commonwealth officers might well
be held to have the necessary effect of conflicting with the provision made by the Commonwealth
law for its officers relatively to the rest of the community. The second ground depends on the
construction of the Commonwealth Act with which the State Act is alleged to conflict. If, on a
proper construction of both Acts, they conflict, the State Act is, to that extent, invalid. But that is so
by force of the express words of sec. 109, and not by reason of any implied prohibition. The final
result is to be reached, not by a Commonwealth Act permitting the State legislature to exercise a
power it does not possessexcept where the Constitution itself so provides, as in sec. 91 and sec.
114but by valid Commonwealth legislation expressly or impliedly by marking limits conflicting
with State legislation which is valid except for the operation of sec. 109. It is on this ground that the
actual decision in Chaplin v. Commissioner of Taxes (S.A.)1(1911) 12 C.L.R. 375. is to be upheld
as correct. Baxter's Case2(1907) [1907] HCA 76; 4 C.L.R. 1087., of course, is in the same position
as Deakin v. Webb3(1904) 1 C.L.R. 585.." It appears to me quite unnecessary in the present case to
do more than apply this passage to the legislation governing the appellant's position in relation to his
pension. The decisive provisions in that legislation consist in secs. 19 and 26 of the Financial
Emergency Acts 1931, i.e., the Act No. 10 of that year as amended by the Act No. 47 of the same
year. Under those provisions it was open to the Governor-General in Council to make regulations
prescribing the extent to which the pension should be subject to State taxation of the description
now in question. Unfortunately no such regulation was made. It may be that this was accidental and
that it was believed that the regulation actually made under sec. 19 in relation to the remuneration of
officers would be extended by sec. 26 to the pensions of former officers. Much as I should like to
give this construction to sec. 26 I have found it impossible to do so. But whether the omission to
make the regulation was intentional or due to accident or misapprehension, the fact remains that the
legislation specifically provides a method for determining what shall be the liability of the pension
to State tax and that the Federal authority has left the pension fully exposed to State tax. The
decisive statement in the passage I have quoted from the Engineers' Case[60] is contained in the
sentence, "If, on a proper construction of both Acts, they conflict, the State Act is, to that extent,
invalid." Now in the present case sec. 19 as introduced by the amendment shows clearly that, except
to the extent that the Governor-General may otherwise prescribe, the remuneration with which it
deals shall be subject to State tax. Sec. 26 makes this provision applicable to pensions. This
legislation plainly declares the degree of conflict. The conclusion is inevitable that in the absence of
a regulation by the Governor-General in Council relating to pensions there is no conflict between
the Federal statutory provisions and the State taxing Act. I am therefore of opinion that the State
legislative provision under which the tax is levied is neither ultra vires nor inoperative in so far as it
affects the pension. I wish to emphasize the fact that my judgment is based altogether on the effect
of sec. 19 and sec. 26 (as amended) of the Financial Emergency Acts 1931. My dissent in Pirrie v.
McFarlane[61] sufficiently indicates my view that the Commonwealth and its servants and agents
are not liable to an interference for which no justification, authorization or allowance can be
discovered in the Constitution or in legislation validly enacted thereunder. In the course of our
consideration of this case it has come to our notice that the Court of Appeal of Manitoba has
adopted the view that under the British North America Act it is not open to the Provinces to require
a commissioned officer of the military forces of the Dominion to take out a licence or permit to
drive a Dominion motor car although the provincial law was expressed in general terms and did not
discriminate against the Dominion or its forces (R. v. Anderson[62]).

The first question in the case stated should be answered in the affirmative.

Starke J.

The appellant is entitled to and receives a pension under the provisions of the Commonwealth
Superannuation Act 1922-1934. He has been assessed to income tax in respect of the pension
received in the income year which ended on 30th June 1933, pursuant to the Special Income and
Wages Tax (Management) Act 1933 N.S.W.. It was concededrightly, I thinkthat this pension
receipt is caught by, and is assessable to income tax under, the provisions of that Act (See Act, secs.
2, 6). But it is contended that the provisions of the State Act contravene the Constitution, or are
inconsistent with Federal legislation, and to that extent invalid. The general authority, however, of
the State of New South Wales to impose such a tax cannot be questioned (Webb v. Outrim[63]). In
that case the Judicial Committee rejected the elusive doctrine of the immunity of instrumentalities,
an effect of which was that the Constitution by implication rendered immune from State taxation
moneys received by a Federal officer as salary. The doctrine had been adopted in this court, but in
the Engineers' Case[64] the court accepted the view of the Judicial Committee, and abandoned the
doctrine. In so far as the decisions of this court, such as Deakin v. Webb; Lyne v. Webb[65]; Baxter v.
Commissioners of Taxation (N.S.W.)[66], rest upon that doctrine, they can no longer be regarded as
law. No distinction can be drawn between pensions under the Superannuation Act and salaries.
Consequently, there is nothing in the Special Income and Wages Tax (Management) Act of New
South Wales, in so far as the tax reaches money received by a person under the Federal law in the
form of a pension, that is in contravention of the Constitution. The decision in Webb v. Outrim[67]
is in itself decisive, and since the Engineers' Case[68] there is no valid reason for refusing to act
upon it.

It was next argued that the tax imposed by the New South Wales Act was inconsistent with
Commonwealth law, and that, by force of sec. 109 of the Constitution, the Act was invalid to the
extent of the inconsistency. It is established, I think, by authority, and I assume that the
Commonwealth might competently pass legislation protecting its officers, and exempting from State
taxation salaries paid and pensions granted by it (Chaplin v. Commissioner of Taxes (S.A.)[69]; R. v.
Brisbane Licensing Court[70]; The Commonwealth v. Queensland; Ex parte Daniell[71]; Smith v.
Oldham[72]). The Superannuation Act 1922-1934 merely provides that a person contributing under
the Act shall be entitled to a pension on his retirement on or after attaining the maximum age for
retirement. It protects pensions from assignment, garnishee orders, and so forth (sec. 80). But it
nowhere provides that the recipient shall not be liable to taxes which fall on all citizens alike. The
cases are clear that the New South Wales Act is in nowise inconsistent with Federal legislation in
the form of the Superannuation Act (Webb v. Outrim[73]; Abbott v. City of St. John[74]; Caron v.
The King[75]; Pirrie v. McFarlane[76]; Cooper v. Commissioner of Income Tax (Q.)[77]).

The Commonwealth Salaries Act 1907 was referred to, and also the case of Chaplin v.
Commissioner of Taxes (S.A.)[78], decided under it. But that Act does not extend to pensions
granted under the Superannuation Act 1922-1934. In Chaplin's Case[79], Griffith C.J. said that the
Commonwealth Salaries Act in substance enacted that "the grant of a salary to an officer of the
Commonwealth is made on condition that he is subject to a law of the State as to taxation to the
same extent as any other citizen, and is a solemn declaration that such taxation is not an interference
with the exercise of the powers of the Commonwealth." I venture to suggest that it would be more
correct to say that the Act, upon its true construction, protected Federal officers, and exempted them
from State taxation in respect of the salaries received by them except so far as sanctioned by the
Act.

The Financial Emergency Acts 1931, secs. 19 and 26, were also referred to. But it was conceded
that the provisions of sec. 26 have not been implemented by any statutory regulation (See Financial
Emergency (State Taxation) Regulations 1931).

The questions stated should be answered:1. Yes. 2. No.

Dixon J.

An examination of the provisions of the Special Income and Wages Tax (Management) Act 1933 of
New South Wales leaves no doubt of its meaning in relation to pensions payable under the
Superannuation Act 1922-1934 of the Commonwealth. Its intention is that they shall be included in
the assessable income upon the net amount of which the special income tax is to be levied.

The question for decision is whether the State Act can operate in accordance with that intention.

Two important considerations affect the determination of the question. The first is that the special
income tax is imposed without differentiation upon the net assessable income of all persons. It does
not discriminate in any way against the income received from the Commonwealth or against
pensions. The second consideration is that the legislation of the Commonwealth, upon which the
nature and characteristics of the pension necessarily depend, treats it as potentially subject to
taxation by a State for the purposes of general revenue or to meet expenditure for a special purpose.
For the Governor-General is authorized to prescribe the maximum extent of taxation to which
pensions payable under the Superannuation Act 1922-1934 may be subject under the laws of a State
imposing taxes on income both for the purpose of the general revenue of the State and where the
law of the State expressly provides that the revenue received from the tax is to be applied to meet
expenditure incurred by the State for any special purpose, or the regulations of the Governor-
General prescribe that the tax shall be deemed to be of that nature. The Governor-General has not
exercised his authority of setting a limit upon the State taxation of Federal pensions. See sec. 26 of
Act No. 10 of 1931; sec. 3 of Act No. 47 of 1931; S.R. 1931, No. 138, and No. 154, and 1935, No.
28.

In my opinion these two considerations combine to destroy the foundation of the claim that the State
legislation cannot operate to include pensions payable under the Commonwealth Superannuation
Act 1922-1934 among the items of assessable income upon the net amount of which special income
tax is imposed. The one consideration shows that the Commonwealth pensioner is affected by the
State tax, not because his pension comes from the Commonwealth, but because as an ordinary
member of the community he is in receipt of income. The other consideration shows that the
administrative purposes of the Commonwealth are fulfilled by the payment of a pension possessing
no special quality segregating it from the general resources of the recipient or distinguishing it in
point of enjoyment from any other form of income. Thus the persons upon whom the tax is levied
are chosen by the State without regard to any past or present connection with the Commonwealth
and the inclusion of the Federal pension in the subject of the tax involves no inconsistency with the
full effectuation of the purposes of the Commonwealth. Much caution should, I think, be used in
applying decisions upon the British North America Act to questions arising upon the
Commonwealth Constitution. The instruments are very different and few or none of the difficulties
to which secs. 91 and 92 of the Canadian Constitution continue to give rise have any real
counterpart in the Australian Constitution. But, having regard to the manner in which the
Commonwealth legislation deals with the liability of the pension to State taxation, there is not much
danger in applying to the present case the decisions upon the question whether there is an opposition
between, on the one hand, the provision by the Dominion for its servants of a defined amount of
salary, and, on the other hand, the inclusion of that salary in the income taxable under a Provincial
law making no discrimination between Dominion servants and other taxpayers. In Abbott v. City of
St. John[80] the Supreme Court of Canada held that no such opposition exists. The decision was
cited with apparent approval by the Privy Council in Caron v. The King[81], a case depending upon
somewhat different considerations. In the recent case of Forbes v. Attorney-General for
Manitoba[82] the Privy Council reached the same conclusion and[83] adopted the decision in
Abbott v. City of St. John[84]. But in relying upon these cases, it is necessary to notice the exact
point at which they become applicable to the question before us. To the Dominion Parliament the
British North America Act assigns the exclusive power of "fixing and providing for the salaries and
allowances of civil and other officers of the Government of Canada." Upon the Provinces it confers
the power of "direct taxation within the Province in order to the raising of a revenue for Provincial
purpose." The first power was not considered to involve upon the part of the Dominion the
provision of a salary or allowances protected against general Provincial taxation. Duff C.J., as he
now is, said in Abbott's Case[85]:"I am quite unable to perceive that the power thus conferred in
any way restricts the operation of the power of taxation committed to the Province. The fixing and
providing for salaries seems to be, as a subject of legislation, quite distinct from the power to levy
taxes in respect of income. The principle upon which the burden of the fiscal contributions exacted
by a municipality or a Province shall be distributed among those persons subject to its fiscal
jurisdiction seems to be a subject as far removed as possible from that dealt with in sub-section 8 of
sec. 91." The situation is thus analogous to that arising in the present case, but arising not as a result
of any limitation upon the powers of the Federal Parliament or of any general doctrine as to the
qualities attaching to Federal salaries or pensions, but as a result of the provisions of the Federal
legislation which assume to protect the pension from State taxation only to the extent prescribed by
the Executive and thus imply that otherwise its payment is to operate like any other contribution to
the general resources of the pensioner.
It will be seen that the grounds I have given for deciding the present case concede that if a State tax
discriminated against pensions, salaries, or other payments made by the Commonwealth, it could
not be supported. If the right to the payment were conferred by a law of the Commonwealth, prima
facie the scope and intention of that law would be enough to make inoperative any attempt by the
States to impose upon the payee a special burden because of his occupying that character. The State
tax would be inconsistent with the law of the Commonwealth in making enjoyment of the right or
benefit conferred by the latter the special occasion of a burden. The invalidity of the State law
would then be a result of sec. 109 of the Constitution. But I do not think that this is the only ground
upon which a discriminatory State tax on salaries, pensions or other payments received from the
Commonwealth would be invalid. In the ordinary course of administration many obligations not
created or defined by statute are contracted by the Commonwealth and discharged out of moneys
lawfully available for the purpose. This is done in the exercise of the powers conferred by the
Constitution, as for instance, under the operation of secs. 61, 67, 69, 70, 81, 82 and 83, or one or
more of them. Surely it is implicit in the power given to the Executive Government of the
Commonwealth that the incidents and consequences of its exercise shall not be made the subject of
special liabilities or burdens under State law. The principles which have been adopted for
determining for the purposes of sec. 109 whether a State law is consistent with a Federal statute are
no less applicable when the question is whether the State law is consistent with the Federal
Constitution. Since the Engineers' Case[86] a notion seems to have gained currency that in
interpreting the Constitution no implications can be made. Such a method of construction would
defeat the intention of any instrument, but of all instruments a written constitution seems the last to
which it could be applied. I do not think that the judgment of the majority of the court in the
Engineers' Case[87] meant to propound such a doctrine. It is inconsistent with many of the reasons
afterwards advanced by Isaacs J. himself for his dissent in Pirrie v. McFarlane[88]. Indeed, he there
refers to "the natural and fundamental principle that, where by the one Constitution separate and
exclusive governmental powers have been allotted to two distinct organisms, neither is intended, in
the absence of distinct provision to the contrary, to destroy or weaken the capacity or functions
expressly conferred on the other." He adds: "Such attempted destruction or weakening is prima facie
outside the respective grants of power." There is little justification for seeking to find in the
Engineers' Case[89] authority for more than was decided. The importance alike of the principle
there applied and of the application given to it is sufficiently great and far reaching. It is a principle
adopted for the interpretation of the legislative powers of the Parliament. The principle is that
whenever the Constitution confers a power to make laws in respect of a specific subject matter,
prima facie it is to be understood as enabling the Parliament to make laws affecting the operations
of the States and their agencies. The prima facie meaning may be displaced by considerations based
on the nature or the subject matter of the power or the language in which it is conferred or on some
other provision in the Constitution. But, unless the contrary thus appears, then, subject to two
reservations, the power must be construed as extending to the States. The first reservation is that in
the Engineers' Case[90] the question was left open whether the principle would warrant legislation
affecting the exercise of a prerogative of the Crown in right of the States. The second is that the
decision does not appear to deal with or affect the question whether the Parliament is authorized to
enact legislation discriminating against the States or their agencies.

The decision applied the principle of interpretation thus adopted to sec. 51 (xxxv.), which was
accordingly construed as extending to operations notwithstanding that they are carried on by or on
behalf of the States.

In so describing the effect of the decision, I have done little but repeat what I said on a former
occasion (Australian Railways Union v. Victorian Railways Commissioners[91]). But, in spite of its
compendiousness, I believe it to be an accurate enough statement of the law laid down by which we
are to be guided. It is, perhaps, desirable to add that, in applying the general principle to a
legislative power of the Commonwealth, the words at the head of secs. 51 and 52, "Subject to this
Constitution," must not be overlooked and that these words together with sec. 106 and perhaps sec.
107 may be of great importance in a question how far a law of the Commonwealth may affect the
States; and this is well illustrated by the views expressed by Starke J. in Australian Railways Union
v. Victorian Railways Commissioners[92] and New South Wales v. The Commonwealth [No. 1][93].

The majority judgment in the Engineers' Case[94] contains an examination of Deakin v. Webb[95]
and Baxter v. Commissioners of Taxation (N.S.W.)[96] which leaves those cases depending on the
interpretation of "the Commonwealth law fixing the officer's salary." In every case where an
opposition is said to exist between the law which secures remuneration or other payments and a law
which taxes them, the scope and purpose of the law which secures the payments must be
ascertained. The differing opinions delivered in Evans v. Gore[97] supply an example of a case in
which the conceptions of the purpose and extent of the protection given by the law securing the
salary determined the answers given to the question (Cf. Cooper v. Commissioner of Income Tax
(Q.)[98]).

The Commonwealth legislation in the present case clearly means to leave the pension without any
protection unless the Executive Government thought fit to confer it. This circumstance completely
distinguishes the case from Deakin v. Webb[99] as explained in the Engineers' Case[100] and also
from Evans v. Gore[101].

In my opinion the question in the case stated should be answered in favour of the Commissioner of
Taxation for New South Wales.

Evatt J.

The New South Wales Special Income and Wages Tax (Management) Act 1933 made the appellant (a
resident of New South Wales) liable to pay special income tax in respect of the sum of 258,
which, as a superannuated officer of the Commonwealth, he had received during the income year
ending June 30th, 1933, pursuant to the Commonwealth Superannuation Act 1922. The notice of
assessment was issued on October 18th, 1934. The New South Wales Act in question did not
authorize or require deduction of the tax at the source from which the appellant's pension was
received, and it applied indifferently to all pensions, salaries and incomes received.

The question raised by the stated case is whether, by virtue of the Commonwealth Constitution or of
Commonwealth legislation, the New South Wales Act cannot validly apply to income wherever it has
comprised payments under Commonwealth statutes by way of pension or superannuation allowance
to a retired officer of the Commonwealth.

At first glance this claim of immunity from the operation of legislation of a State which imposes
taxes upon all incomes and pensions indifferently, would appear to be extremely novel, not to say
daring. But a number of prior decisions of this court negative such appearance, and some reference
must be made to

Old, unhappy, far-off things And battles long ago.
Before this is done, let us first turn to the terms of the Constitution. By sec. 114, a State is unable to
impose any tax on Commonwealth property, but so is the Commonwealth unable to impose any tax
upon a State's property. Sec. 114 can have no application to legislation taxing beneficiaries in
respect of payments of superannuation which they have previously received, even although the fund
from which the payments were made belong to the Commonwealth or to a State.

The Constitution seems to make it reasonably plain that no power is given to the Commonwealth
Parliament to add to any grant of salaries and pensions to its officers an immunity from the general
or non-discriminatory taxation legislation which a State imposes upon its residents or upon those
deriving income from the State. The power of the Commonwealth to legislate, contained in sec. 52
(ii.) and sec. 51 (xxxix.), enables it to provide for salaries for its present officers and for pensions to
officers who have retired from its service; but it seems equally clear that the Commonwealth
Parliament cannot attach a condition or quality which will attach to its grant of salary or pension
and operate after it has reached the hands of the recipient. It cannot directly provide that the
recipient is immune from State taxation in respect of such receipt; nor can the same thing be done
indirectly by supposing that the Commonwealth Parliament can create a new species of property
(here it would be the old speciescash) with the attractive characteristic that one owner of it (the
Commonwealth salaried officer or pensioner) and one alone, need not subsequently pay State
taxation in respect of its receipt by him from Commonwealth sources. The legislation in relation to
Commonwealth salaries and pensions has not been framed in the indirect method of assigning such
special character to the income received. But the question may be important, because in one case
(The Commonwealth v. Queensland[102]) such method was suggested, so that the "tax-free"
securities would carry with them from hand to hand the same immunity from payment of State
taxation. In the case of Commonwealth salaries and pensions the indirect method of conferring
immunity from State taxation is not feasible, because it would require that a special quality should
be attached to cash received, solely because it represented a payment of Commonwealth salary or
pension, yet such quality would immediately vanish after the cash had been paid over to the
recipient's grocer or milk supplier, who could never set up the same claim of immunity. In the case
of salaries and pensions immunity must be supposed to arise more directly.

There is nothing in the Constitution itself which suggests that, in respect of granting immunity to its
officers or ex-officers from payment of taxation, the Commonwealth is any more powerful than a
tate would be to grant its officers or ex-officers immunity in respect of taxation by the
Commonwealth.

Later, I will analyse the theory that sec. 109 of the Constitution, which has established a general rule
for resolving actual conflicts between valid Commonwealth and valid State legislation, gives the
Commonwealth some general "supremacy" over the States. It will then be seen that, for present
purposes, it is not possible for the Commonwealth to force its salary or pensions legislation into
direct conflict with the income taxation laws of a State without destroying the validity of its own
legislation.

Nor can the power of the Commonwealth Parliament under sec. 51 (ii.) to make laws with respect to
"taxation" assist, because that power relates only to taxation by the Commonwealth for the purpose
of its raising a Commonwealth revenue. The only instance in our constitutional history where this
fact was sought to be concealed was in the Commonwealth Act No. 11 of 1932the Financial
Emergency (State Legislation) Act 1932, which labelled itself an Act with respect to taxation, as
well as with respect to other subject matters specified in sec. 51 of the Constitution. Of the Act as an
exercise of the "taxation" power of the Commonwealth, Sir Robert Garran, in the official "Case"
published on behalf of the Commonwealth in answer to the Case of Western Australia in favour of
its secession from the Commonwealth, said:

The draughtsman was evidently scratching round for a peg on which to hang the Bill; but taxation
was certainly a forlorn hope. The power of the Commonwealth Parliament as to taxation is a power
to make laws "for the peace, order and good government of the Commonwealth" with respect to
"Taxation, but so as not to discriminate between States or parts of States." It can hardly be
questioned that these words refer only to Commonwealth taxation, uniform throughout the
Commonwealth, for Commonwealth purposes and do not cover control of State taxation. Nothing in
any decision of the High Court suggests a doubt of this; and indeed the principles of interpretation
laid down by the court make doubt impossible (The Case for Union, p. 26).

Even in The Commonwealth v. Queensland[103], where, in a quiet and unobtrusive way, the
Commonwealth legislative power seemed to have been stretched at least up to the limits of
constitutional elasticity, the judgments which affirmed the immunity of the holder of certain
Commonwealth securities from the constitutional taxing power of Queensland, all based themselves
on sec. 51 (iv.)the power of "borrowing money on the public credit of the Commonwealth." As
sec. 51 (ii.) was never invoked on behalf of the Commonwealth, we can surely take it as axiomatic
that that sub-section gives the Commonwealth no authority to grant exemptions or immunities from
taxation by the States.

Therefore, it would seem probable that the Commonwealth cannot lawfully add to its grant of
salaries or pensions a further grant, viz., an immunity from State taxation. It is quite consistent with
this that a law of a State which discriminates against the salaries or pensions of Commonwealth
officials or ex-officials should be deemed invalid. Such a law would probably reveal itself as a
poorly disguised attempt to interfere with the normal working of the Commonwealth services, for
the additional State revenue obtainable would be almost negligible, so that the real purpose of the
law could hardly be to obtain revenue. Moreover, if the Commonwealth sought to pass a so-called
taxation law discriminating against State officials, a similar result should follow. The importance of
the fact of discrimination is suggested in several of the judgments delivered in this court in Stuart-
Robertson v. Lloyd[104], and it is fully recognized under the constitutional system of Canada
(Kennedy, Law of the Taxing Power).

In one view, a law of the Commonwealth discriminating against State officials would not be a
"taxation" law within the meaning of sec. 51 (ii.) of the Constitution. As stated in my own judgment
in New South Wales v. The Commonwealth [No. 1][105]:

The Constitution makes no general prohibition against the passing of discriminatory enactments, but
their presence in this, as in other Commonwealth legislation may reveal its real nature and character.

A different angle of approach to the question of discriminatory legislation is this, that it must at least
be implied in the Constitution, as an instrument of Federal Government, that neither the
Commonwealth nor a State legislature is at liberty to direct its legislation toward the destruction of
the normal activities of the Commonwealth or States. Such a principle is not inconsistent with the
rejection by the Engineers' Case[106] of the earlier doctrine of "immunity of instrumentalities,"
though it is inconsistent with the unqualified dogma that the Constitution leaves no room whatever
for implications arising from the co-existence side by side of seven legislatures each of which is,
despite the suggestions in The Commonwealth v. New South Wales[107], sovereign within the limits
fixed by the distribution of constitutional functions (James v. The Commonwealth[108]; New South
Wales v. The Commonwealth [No. 1][109]; see authorities cited in The King and His Dominion
Governors, p. 206).

The above analysis suggests the following provisional conclusions:

(1)

That the Constitution itself does not give Commonwealth officers or pensioners an immunity from
the general undiscriminatory taxation legislation of a State.

(2)

That the Commonwealth Parliament has no legislative power to create the immunity described in
(1), either by direct grant of such immunity, or by attempting to give a special quality to the money
paid to its officers or pensioners.

But it is necessary to examine the cases with some care in order to see whether such conclusions are
sound. If they are, it will be unnecessary to examine the precise terms of the Commonwealth
legislation which are said either to establish or disestablish the immunity which alone can invalidate
the State's assessment against the present appellant.

D'Emden v. Pedder.

In D'Emden v. Pedder[110] it appeared that a Commonwealth officer gave to a paying officer of the
Commonwealth a written receipt for salaries received, but failed to stamp the receipt. A Tasmanian
statute, general in its terms, required payment of a duty of 2d. on all such receipts, a stamp having to
be affixed by every recipient of any amount between 5 and 50. The Commonwealth Audit Act
made it the duty of its salaried officers to give a receipt to the paying officer. The court (Griffith
C.J., Barton and O'Connor JJ.) held:

(A)

That the Tasmanian Act "interfered with" or "exercised control" upon the Commonwealth officer
receiving his salary. Whereas the Audit Act required him to give a receipt for his pay, which receipt
had to be preserved as a record of the department, the Tasmanian Act said that he must "at the same
time" contribute to the State revenue. But, "the attaching by a State law of any condition to the
discharge of a Federal duty is assuredly an act of interference or control"[111].

It may be observed that there was little "interference with" the Commonwealth servant. He merely
had to put a State duty stamp upon the receipt. The stamped receipt could have gone to
Commonwealth records until auditing or final destruction. The main "control" exercised by
Tasmania was upon its citizens, that they should all contribute to its revenues at the point of their
receipt of moneys. The Commonwealth, as one of the class of employers, required a receipt as every
other employer would. The State said: "Of course you must obey your employer, but, at the same
time, affix one 2d. stamp."

(B)

That the Tasmanian enactment, "on the face of it," was attempting to deal with a matter within the
exclusive legislative power of the Commonwealth, and upon which the Commonwealth had
legislated.

It is quite plain from the judgment that the court did not rest any part of its decision upon sec. 109
of the Constitution. The Tasmanian law was pro tanto invalid, not because there was any
inconsistency between it and the Audit Act, for "no question of conflict can arise"[112], but because,
if the former were valid, it would "fetter, control or interfere with the free exercise" of
Commonwealth power. This is the first appearance of the important doctrine of the immunity of
instrumentalities of government. The Commonwealth legislation was regarded as an "exercise" of
exclusive legislative power, because the Commonwealth officer concerned was in the postal
department, which had been transferred to the Commonwealth (See secs. 52 (ii.) and 69 of the
Constitution). But as to transferred departments see, per O'Connor J., Deakin v. Webb[113].

(C)

The actual extent of the State tax was not material[114]. This was stated in answer to Tasmania's
insistence upon the almost nominal amount of its taxation.

It would seem that, in some circumstances, the quantum of a State tax may be of material
significance. For instance, a State Act might apply a higher rate of tax to receipts given by Federal
officials, and so be readily deemed invalid. Even if, without discrimination, the State law became so
onerous a burden upon individuals as to amount to a serious impediment to the conduct of
Commonwealth business within the State, it might also be deemed invalid.

This analysis of D'Emden v. Pedder[115] shows how little historical warrant there is for the
statement in the Engineers' Case[116] that the former decision "rests on the supremacy created by
sec. 109." No part of the Commonwealth's case against Tasmania was based upon sec. 109 of the
Constitution. The question whether there was, in fact, inconsistency between the two enactments is
not so easy to determine. In the first place, it was quite possible for the Commonwealth officer to
obey both Commonwealth and State laws, so that there was no inconsistency between the laws in
the sense of direct repugnancy, conflict or collision. Nor is it so clear that the Commonwealth Audit
Act "covered the field," if I may use that hackneyed expression containing the dangers and
ambiguities which I have elsewhere discussed (Stock Motor Ploughs Ltd. v. Forsyth[117]). The
Audit Act concerned itself only with requiring the authentication of payments of money to officers
by the giving of receipts. It is not easy to see how any "plan or scheme" of the Commonwealth
would be at once "hindered and obstructed" so soon as the subject was "touched upon ... by State
authority"[118].

Even if the Audit Act had expressly provided that no State law requiring a duty stamp to be affixed
to receipts should apply to Commonwealth receipts, another constitutional question would have
arisen. There would be "inconsistency" between the legislation, but could the Commonwealth
Parliament validly pass such an enactment? On the whole it would seem that a Commonwealth Act
in such a form would be warranted, because of possible or probable delay, inconvenience and
embarrassment to the Commonwealth service occasioned by requiring the affixing of a duty stamp
at the time of the signing of the receipt. But, clearly, a Commonwealth law dispensing with the
necessity of observing the requirement of such a State law might have been countered by the State
Parliament's passing supplementary legislation as part of its stamp duties law, requiring all persons
in Tasmania who had given receipts without affixing a State stamp to pay to the State direct a sum
equivalent to the stamp duty which would have been payable but for the Commonwealth legislation.
Such State legislation would (a) remove the sole ground of inconsistency between it and the
suggested Commonwealth legislation, (b) be a valid law with respect to taxation, in no way
discriminating against Commonwealth officers, and (c) not be capable of being rendered void by
Commonwealth legislation aiming at an exemption of Commonwealth servants from the payment of
State duty in respect of their actual receipt of income because, prima facie, such Commonwealth
legislation would not be a valid law in relation to its departments or officers.

Deakin v. Webb.

(1)

Under the Commonwealth Constitution members of Parliament were to receive an "allowance" and
Ministers of State a "salary" (secs. 48 and 66). Salaries received by Commonwealth Ministers of the
Crown and members of the Commonwealth Parliament were subjected to income tax in common
with those of all other persons who resided in, or were otherwise subject to, the laws of the State of
Victoria. The Victorian Income Tax Act 1895 applied to all salaries earned in Victoria. Assessments
were made upon the basis of returns furnished individually by the taxpayers during the year
preceding the year of assessment.

(2)

The court held the assessments to be invalid. The opinion expressed in D'Emden v. Pedder[119] that
the Commonwealth's legislative and executive power could not be "controlled" by a State was now
treated as "the rule" in D'Emden v. Pedder[120]; Deakin v. Webb[121]. It was emphasized that, by
the State legislation, there was a diminution of the net emoluments of the Commonwealth officer.
Yet there was no deduction of the tax "at the source," and the taxpayer was not required to pay the
State tax until long after his income had been received, and, perhaps, spent.

(3)

In the decision it was stated (a) that the income tax of Victoria was "both a tax upon the income of
the appellants, and a diminution of that income"[122]; (b) that the question whether "such an
imposition or diminution" by a State would "control" the free exercise of Commonwealth legislative
or executive power was able to "supply its own answer"[123], the answer being that State taxation
of Federal salaries (1) diminished the recompense allotted by the Commonwealth to its officers, and
so interfered with its agencies, and (2) interfered with the freedom of action of the Commonwealth
in the transfer of its officers from State to State "except at the risk of doing them an injustice by
reducing their effective remuneration"[124].

It is to be noted that nowhere in Deakin v. Webb[125] is it suggested that sec. 109 of the
Constitution has anything to do with the issue. The diminution of the income of the Federal officer
so often referred to is relied upon, not as proving "inconsistency" between the Constitution or
Commonwealth legislation and the Victorian Act, but merely as an additional reason for applying
the doctrine of non-interference, i.e., the rule in D'Emden v. Pedder[126] (See[127]). Even in
argument, only an unimportant reference was made to sec. 109.

That the decision in Deakin v. Webb[128] was not based in any degree upon sec. 109 of the
Constitution is conclusively proved by the subsequent judgment of the court refusing an application
for a certificate under sec. 74 of the Constitution so as to permit an appeal to the Privy Council. In
dealing with such application, the court held that the question they had to decide was "one as to the
limits inter se of the constitutional powers of the Commonwealth and a State"[129]. This was
elaborated at p. 623, where "the only questions in the case" are set out. None of them concern sec.
109 of the Constitution, which necessarily assumes the general validity of the State legislation in
question, and only invalidates such provisions of it as are deemed inconsistent with the
Commonwealth legislation.

Deakin v. Webb[130], like D'Emden v. Pedder[131], rested in no way upon sec. 109 of the
Constitution. In each case, State legislation was deemed invalid because of its attempt to "control
the free exercise" of Commonwealth authority, contrary to the rule of immunity asserted in
D'Emden v. Pedder[132].

Webb v. Outrim[133] was decided by the Privy Council in December 1906. It is now an historical
fact to say that some of the reasons for the decision were quite unsatisfactory, and immediately
regarded as unsound. But the decision itself may be regarded as a rejection of the theory that income
tax legislation of a State cannot validly apply to a Commonwealth salaried official because it "might
interfere with the free exercise of the legislative or executive power of the Commonwealth"[134],
the theory being that such interference is "impliedly forbidden by the Constitution."

Judgment in the Railway Servants' Case[135] was pronounced on December 17th, 1906. The court
held that the question was the converse of that decided in D'Emden v. Pedder[136] but that "the
doctrine is equally applicable"[137]; i.e., the State authority may be protected from attempted
invasions on the part of the Commonwealth, although "whether the alleged invasion is really one or
not is an entirely different question"[138]. The conclusion was that "the doctrine of mutual freedom
from interference as between the Commonwealth and State Governments would be sufficient to
exclude any implication that sec. 51 (xxxv.) was intended to extend to State railways"[139].

Baxter's Case.

Several months after Webb v. Outrim[140] the question of the application to Commonwealth officers
of a general income tax law of a State again arose before the High Court in Baxter v. Commissioners
of Taxation (N.S.W.)[141]. In Baxter's Case[142], Isaacs and Higgins JJ. were members of the
Bench. The majority of the court (Griffith C.J., Barton and O'Connor JJ.) adhered to their views as
expressed in D'Emden v. Pedder[143] and Deakin v. Webb[144]. The essential basis of the majority
view in Baxter's Case[145] was that, the question dealt with in Deakin v. Webb being an inter se
question, the court was "in no way bound" by the decision of the Judicial Committee (at p. 1118).
Further, the possible bearing of sec. 109 upon the questions in D'Emden v. Pedder[146] and Deakin
v. Webb was expressly excluded (See p. 1119). The reasoning of Deakin v. Webb was restated at pp.
1120-1122. None of it is concerned with sec. 109, and, finally, at p. 1129, the majority of the court
said that the provisions of sec. 109 "had no application to the present controversy."
In view of later developments, the judgment of Isaacs J. is of great significance. At p. 1154 he
argued that a question of repugnancy or inconsistency under sec. 109 was involved. But he added
that the question of "obstruction" of the Federal Government's operations raised a broader issue, and
that issue had to be determined (p. 1155).

With regard to the attack on the Income Tax Act based on sec. 109 Isaacs J. said:

The first ground of attack is outside sec. 74, and, if that were the only one, I should, in accordance
with what I have already said, feel compelled to follow without discussion the decision in Webb v.
Outrim[147], by which it has been held that such Acts are not repugnant to the Commonwealth
legislation (at p. 1156).

Upon the broader question of the doctrine of immunity,

(a)

Isaacs J. dissented from the view suggested as following from Webb v. Outrim that

because the Constitution does not expressly say so, a State is not prohibited from interfering with
the operations of the Federal Government, or with the means it employs to effectuate its powers (p.
1156).

(b)

He asserted, agreeing with the majority of the Court, that the Commonwealth Government

"is by necessary implication to be free from any impediment to the full and perfect performance of
the national functions assigned to it" (p. 1158), and that "the mere admission that the effect of any
specified State Act is to impede or impair the public operations of a Federal officer is sufficient to
stamp it as unlawful" (p. 1159).

(c)

He dissented from the majority as to the particular application of the above doctrine (which was the
doctrine applied in D'Emden v. Pedder[148] and Deakin v. Webb[149]), saying of the State Income
Tax Acts:

These statutes do not appear to me to infringe the doctrine of non-interference. They do not on the
face of them, and they do not, I think, in their necessary and reasonable effect transcend the limits
of any Federal power. The income tax is demanded from all citizens alike; it is obviously not
levelled at the Federal authority, and I cannot persuade myself that by reason of the impost there is
actually, or will probably be, any diminution or impairment of service rendered to the
Commonwealth (p. 1159).

In relation to the Commonwealth officer, he concluded that the State Act
merely requires of him his just share of the ordinary burden of his fellow citizens in return for the
protection and benefits the State affords him (at p. 1161).

Higgins J. said:

I concur with my brother Isaacs in the view that it is not an improper interference with a Federal
agent for a State to collect from him a tax upon his income, on the same scale as from other citizens
of the State, even though his salary as a Federal agent has to be included in his return (p. 1165).

Upon the subsequent application for a certificate under sec. 74, Griffith C.J. repeated the suggestion
made by him in Baxter v. Commissioners of Taxation (N.S.W.3(1907) [1907] HCA 76; 4 C.L.R.
1087.), viz., that

the question whether a State tax upon the emoluments of Federal officers is within the prohibition is
a minor question, for the Federal Parliament can make its grants subject to such a tax Quilibet potest
renunciare juri pro se introducto[150].

In Flint v. Webb[151] Higgins J. said of Griffith C.J.'s suggestion "that the Federal Parliament may
make its grants of salary subject to the rights of the State to tax them" that

at present I cannot see how, if an income tax upon the salary of a Federal servant is made invalid by
the Constitution, the Federal Parliament cannot alter the Constitution by making the income tax
payable. However, I do not wish to make any final pronouncement on the suggestion, which, as far
as my memory serves me, has not been mentioned before in this court (p. 1194).

Chaplin's Case.

But the suggestion of Griffith C.J. was adopted in the Commonwealth Salaries Act 1907, with the
result that the Privy Council in Commissioners of Taxation (N.S.W.) v. Baxter[152] was content to
regard the controversy as a closed one. Thus it was not until May 1911 that the interpretation of the
Act of 1907 came before the High Court in Chaplin's Case[153]. The Act merely declared, in
accordance with the above suggestion of Griffith C.J., that "the taxation by a State, in common with
other-salaries earned within the State" of the salaries earned in the State by Commonwealth officers
should not, if the quantum of tax was not higher than that imposed on salaries of the same amount
earned in the State, "be deemed ... an interference with the exercise of any power of the
Commonwealth."

It will be observed that the legislation did not purport to authorize a State to tax Commonwealth
officers' salaries. Accordingly the argument that, under sec. 109 of the Constitution, a
Commonwealth law providing a salary for a Commonwealth officer was inconsistent with a State
law taxing that salary (in common with others) still remained open to the taxpayer. It was not
employed, nor was any reference made to sec. 109 in the judgment. This again shows that the only
ground upon which Griffith C.J., Barton and O'Connor JJ. (Isaacs and Higgins JJ. did not sit in
Chaplin's Case) thought invalidity could attach to the operation of State income tax legislation
against salaries of Commonwealth officers was that of the "implied immunity of Commonwealth
(and State) instrumentalities," and that immunity was not a personal right of the servant, but a right
of the Government, which could waive it by appropriately worded legislation[154].

In Chaplin's Case[155] the court said, in relation to the grant of salaries:

The grant, if no more is said, is free from taxation by the State, but in making the grant the
Commonwealth may say that the grant to the individual is subject to State taxation

This passage also is concerned only with the doctrine of immunity of instrumentalities, and cannot
be used as any justification for the theory that, unless grants of Commonwealth salaries or pensions
are expressly subjected to general income tax legislation of a State, sec. 109 should be deemed to
invalidate the State legislation so far as applicable to such salaries or pensions.

The Engineers' Case.

The general doctrine of immunity of instrumentalities had numerous and startling applications
before it was overthrown in the Engineers' Case[156]. As Higgins J. said in 1925,

it was held also on the same principle that a Federal officer is not liable to State income tax,
although he gets the same benefit from the State's activities as others (Deakin v. Webb[157]; Baxter
v. Commissioners of Taxation (N.S.W.)[158]. It was held that Federal properties are exempt from
municipal rates although they enjoy the benefit of the municipal services (Sydney Municipal Council
v. Commonwealth[159])... It was held that a Commonwealth Act which applied the provisions of
the Conciliation Act to employer and employees in State undertakings was invalid (Railway
Servants' Case[160]). It was held that a night-soil contractor is entitled, if his contract be with the
Commonwealth, to remove night-soil from Commonwealth premises without taking out the licence
required by the municipality (Roberts v. Ahern[161]). Without prejudging these and other similar
cases should the same question arise again, I may say that the questions will have to be considered
now in the light of the Engineers' Case[162][163].

The outstanding feature of the Engineers' Case is that the only question before the court was
thisDid the Parliament of the Commonwealth have power "to make laws binding on the States"
under sec. 51 (xxxv.)the legislative power in relation to arbitration for the settlement of disputes
extending beyond the limits of one State. The question was answered: Yes (p. 177). But, ten years
later, in the case of Australian Railways Union v. Victorian Railways Commissioners[164], the old
answer was added to by the qualification that "binding on the States" must not be interpreted as a
synonym for enforceable against the revenues of the State.

The actual decision in the Engineers' Case was inevitable. Otherwise, in some industries, the
Commonwealth arbitration power under sec. 51 (xxxv.) would have been entirely nullified, because
the leading employers of labour in the industry were State governmental authorities, and, although
they became parties in fact to an industrial dispute of the kind mentioned in sec. 51 (xxxv.), they
could never be governed by an arbitrator's award, made in settlement of one industrial dispute.
Under the contrary view expressed in the Railway Servants' Case, acute disputes in some industries
where State Governments were the sole or main employers could not be settled by arbitration at all;
yet the sole purpose of the power in sec. 51 (xxxv.) was to prevent or settle all such disputes either
by conciliation or arbitration.

Even if the rule in D'Emden v. Pedder[165] had been retained in favourof both States and
Commonwealth, there was little reason for believing that the normal exercise by the Commonwealth
of its legislative power under sec. 51 (xxxv.) would amount to an unjustified "invasion" of State
authority. However, in the Engineers' Case[166] the court rejected and denounced the rule in
D'Emden v. Pedder[167] altogether. The method of denunciation appears at pp. 144 et seq. The
method is perhaps open to the objection that, despite the criticism levelled at Griffith C.J., it is fairly
plain that all Griffith C.J. meant in his remarks as quoted at p. 145 was that the bare words of the
document did not cover the whole field of permissible action by Commonwealth and State, and the
court had the ultimate duty of protecting both Commonwealth and State from hostile attacks on the
part of State or Commonwealth. The method also left itself open to the pungent criticism made upon
it by Mr. T. C. Brennan in his recent work Interpreting the Constitution (1935) (at pp. 152, 153). It
was also misleading to suggest that, after Webb v. Outrim[168], only three of the original justices of
the court accepted the rule of immunity of instrumentalities laid down in D'Emden v. Pedder, for, in
Baxter's Case[169], Isaacs J. accepted the rule, and he also suggested that the rule enured for the
benefit of State as well as Commonwealth.

But, however the result was reached, it must now be accepted that the "rule" of immunity from
mutual interference was too broadly stated in the earlier cases, and as so stated it is now an exploded
doctrine. But it does not follow that discriminatory legislation passed by the Commonwealth or a
State and directed against the other can be properly passed upon by the Court without recourse to
principles of the Constitution which are not immediately discoverable in its words. Something of
what I mean is indicated by Gavan Duffy J. in his dissenting judgment in the Engineers' Case[170]
where he declares that "the existence of the State as a polity is as essential to the Constitution as the
existence of the Commonwealth," the converse proposition, of course, applying equally. The
reminder is admittedly a vague one, because the dangers to be guarded against cannot be precisely
defined, and will seldom, if ever, occur. But I am not prepared to accept all the obiter dicta in the
Engineers' Case[171] as having achieved the impossible task of anticipating every future difficulty
in the working of our Federal constitutional scheme.

Although, therefore, the attempt of Griffith C.J. to enunciate the rule of non-interference ended in
disaster, this was due, perhaps, to over-anxiety as to the dangers which confronted the newly
established Commonwealth. These dangers were greatly, and, as we would now suppose, even
absurdly, exaggerated. For instance, how the Commonwealth itself could possibly be injured
because its officers had to bear the same taxation burdens as their fellow citizens, it is almost
impossible to appreciate.

For present purposes, the most important aspect of the Engineers' Case is its treatment of prior
decisions. D'Emden v. Pedder[172], as a decision only, was regarded as sound as it "rests on the
supremacy created by sec. 109" (p. 156). We have seen that the High Court, which decided
D'Emden v. Pedder, never said that this was so. "Supremacy" was the new euphemism for the less
ambiguous words employed in sec. 109 itself in order to resolve actual conflicts between valid
Commonwealth and valid State legislation. The basis on which D'Emden v. Pedder was decided has
been sufficiently described. One may conceive that the Commonwealth could, by differently framed
legislation, have validly prevented the Tasmanian Stamp Duties Act from operating so as to
incommode the actual performance of duties by a Commonwealth officer. But, whether actual
"inconsistency" was established between the two Acts, as actually framed, is a very different
question.

Of the decision in Deakin v. Webb; Lyne v. Webb[173], the Engineers' Case judgment said it rested
upon (1) the doctrine of immunity of instrumentalities, and (2) sec. 109 of the Constitution[174].
Ground 1 was declared to be erroneous. The second ground was discussed in somewhat vague
language. As I interpret the passage at p. 157 in the leading judgment, it emphasizes that the law as
laid down in Deakin v. Webb and Lyne v. Webb was dissented from by the Privy Council in Webb v.
Outrim,[175] and disapproved by two justices as against three in the subsequent case of
Baxter[176]; and it deliberately refrains from giving approval to the actual decisions in Deakin v.
Webb[177] and Lyne v. Webb[178].

Further, the Engineers' Case[179] declares that the "actual decision" in Chaplin's Case[180] is to be
upheld as correct. But the "actual decision" was merely that the tax assessment upon the
Commonwealth, officer was lawfully made by the State. And such decision might have been
reached by three different methods, viz., by holding (1) that the doctrine of immunity of
instrumentalities could be waived to any extent deemed fit by the Parliament concerned, i.e., in the
particular case, the Commonwealth Parliament, or (2) that there was not and never had been any
inconsistency between the Federal legislation granting Commonwealth salaries and the State income
tax legislation, the 1907 Commonwealth Salaries Act being quite unnecessary and, indeed invalid,
or (3) that whether or not there existed any such inconsistency, the 1907 Act could be interpreted as
a declaration of the Commonwealth Parliament, which, by yielding to the State legislation, could be
regarded as negativing any such "inconsistency."

The learned judges who decided Chaplin's Case decided it upon the first of the three grounds, but
the Engineers' Case makes such ground no longer tenable. I should have supposed that Chaplin's
Case was correctly decided upon the second ground specified above, a ground which would cover
the present case. Upon that footing, (1) the Commonwealth Act of 1907 was void, because the
Commonwealth Parliament cannot add to the grant of its salaries an immunity from general State
income taxation, nor is it of any avail to make such grant subject to the taxing power of the State,
which rests upon the Federal and State Constitutions, and not upon Commonwealth legislation: but
(2) there was no "inconsistency" between the Commonwealth Act granting salaries and the State Act
imposing taxation, so that the State assessments were good.

However, in the case of The Commonwealth v. Queensland[181], subsequently discussed, it was
suggested, in one judgment at least, that the ground upon which the decision in Chaplin's Case is to
be supported is the third of those set out above.

Whether the decision in Chaplin's Case[182] is to be rested upon ground 2 or 3 should here be
determined, and, in my view, the correctness of Chaplin's Case depends upon the correctness of
ground 2 stated above.

The passage in the Engineers' Case[183] commencing with "the final result" is somewhat obscure,
because "the final result" referred to must be the invalidity of State legislation. Yet the next sentence
commences "It is on this ground" etc., suggesting that a similar resultinvalidity of State
legislationwas reached in Chaplin's Case, whereas Chaplin's Case actually determined its validity.
Desirous of overthrowing the troublesome rule in D'Emden v. Pedder[184] the court deciding the
Engineers' Case interpreted D'Emden v. Pedder as declaring Commonwealth "supremacy." But that
was not intended by the first three judges who enunciated the rule. Hence the criticism in the
Engineers' Case "Mutual supremacy is a contradiction of [sic] terms"[185] was hardly valid,
considering that the word "supremacy" had never been used by the judges who propounded the rule,
and that the very point in issue in the Engineers' Case was the correctness of the Railway Servants'
Case[186], where the rule in D'Emden v. Pedder was regarded as one of mutual non-interference,
and not one of mutual "supremacy." Similarily, the supposed "hopeless opposition"[187] between
the Railway Servants' Case and the Steel Rails Case[188] is based upon the assumption that the
insistence by the Commonwealth upon subjecting a State Government, which had imported steel
rails, to the same customs law as bound every other importer, amounted in fact to a "drastic
interference" with the Government of New South Wales.

No doubt, the decision to reject the general rule of "mutual immunity of instrumentalities" was a
wise one, and it must be followed by us. But it is quite erroneous to regard the Engineers' Case as
having established a new and valid constitutional principle, under which, either by direct declaration
as to the termination of specified State legislation, or as to the State's legislative power, or by
indirectly creating conditions or qualities under Commonwealth legislation which will achieve the
same objectives, the Commonwealth Parliament is enabled, by the exercise of its own legislative
power, to rid itself of any State legislative "interference" or "impediment." This constitutional
principle or doctrine is a dangerous feature of the Engineers' Case[189], and any proposed
application of it should be most carefully watched. Already there have been startling consequences,
to which reference will be made. I do not think that it was ever intended by the decision of the
majority in the Engineers' Case to set in operation any such principle as I have stated, because it
was stated, though without emphasis, that there could be no case of State legislation being annulled
except by the operation of "valid Commonwealth legislation expressly or impliedly by marking
limits conflicting with State legislation which is valid except for the operation of sec. 109" (p.
157italics are mine),

The Commonwealth v. Queensland.

In one very important aspect, the principles discussed again arose for consideration in the same year
as the Engineers' Case was decided. The Court upheld the validity of Commonwealth legislation
which provided that the interest from certain Commonwealth securities should not be liable to
income tax under any law of the Commonwealth or a State, unless the interest was declared to be so
liable by the Commonwealth loan prospectus (The Commonwealth v. Queensland[190]). There was,
of course, actual collision between the Commonwealth legislation and any State legislation directly
taxing a bondholder as a State citizen in respect of the annual interest received by him from the
Commonwealth securities. In the interpretation given to sec. 52B of the Commonwealth Inscribed
Stock Act 1911, the Court extended the area of actual collision between Commonwealth and State
legislation, so as to cover a further form of State taxation. That part of the decision is not relevant
for present purposes, for its vital feature was that the Commonwealth, purporting to exercise its
legislative power with respect to "borrowing money on the public credit of the Commonwealth"
(sec. 51 (iv.)), not only provided for the issue of securities, the payment of interest and the
repayment of the loan, not only gave a promise as to future taxation by the Commonwealth itself,
which, though it could not fetter the Commonwealth's legislative power, concerned only the
Commonwealth and not the States, but actually purported to forbid the States from exercising their
ordinary constitutional powers of taxation wherever such exercise would impose a tax upon the
interest received from Commonwealth securities.

In this vital case, the States as a group were not represented. Further, the only argument of principle
advanced by the State of Queensland was to the effect that sec. 51 (iv.) of the Constitution "only
authorizes legislation as to the terms of the contracts between the Commonwealth and the lender,
and confers no powers to impose conditions upon third persons" (p. 6). But the outstanding feature
of the case was not that the Commonwealth was seeking to bind third persons generally, but that it
was making an extremely audacious attempt to set at nought the great constitutional powers of each
State to impose taxation upon all its citizens for the maintenance of its internal peace, order and
good government. In considering so grave a question, it could make no difference whether the
Commonwealth Parliament said directly: "The States shall not tax you, our bondholder, in respect of
any money received by you from us as interest"or whether it preferred to say: "Our securities are
to be given a special quality or attribute, viz., interest payable under them shall be free of any
taxation imposed by a State."

The great point as to the constitutional powers of the States was not dealt with by Knox C.J., who
apparently considered that any condition might be included in the contract between Commonwealth
and bondholder, so that, by parity of reasoning, the Commonwealth could have granted its
bondholder, in respect of his interest, an immunity from execution at the suit of the bondholder's
creditors. Isaacs and Rich JJ. rightly stated that the Commonwealth may "guarantee that the lender
shall have, and may retain to the full ... the remuneration promised him by the Commonwealth" (p.
21) (Italics are mine).

The only question which might arise would be as to whether the phrase "retain to the full" implied
that the lender would not only obtain the interest in full, but might also be put in the position, quoad
State taxation, of never having obtained it at all.

In the same judgment Isaacs and Rich JJ. state (p. 22) that Chaplin's Case[191] "established the
immunity of Federal salaries from State income tax. This court has recently, in Amalgamated
Society of Engineers v. Adelaide Steamship Co.2(1920) [1920] HCA 54; 28 C.L.R. 129., expressed
its opinion that the decision was correct, by reason of the controlling force of Federal legislation"
(The Commonwealth v. Queensland[193]).

It is difficult to apply this reference. As already stressed, the actual decision in Chaplin's Case
merely established the liability of Federal salaries to undiscriminatory State income taxation. If
Chaplin's Case is to be regarded as having been based upon the 1907 Commonwealth Salaries Act,
it is hard to understand how Deakin v. Webb[194], Lyne v. Webb[195] and Baxter's Case[196] were
not also right in their actual result, because they were decided prior to the 1907 Act. Yet the fair
inference from the judgment in the Engineers' Case is that those three decisions were all erroneous,
and that in Baxter's Case, the actual dissent of Isaacs and Higgins JJ. was sound. Further, in the
Engineers' Case[197] the court attacked the device of "a Commonwealth Act permitting the State
legislature to exercise a power it does not possess," and this attack was meaningless unless levelled
at the form of the 1907 legislation. Further, the 1907 legislation never purported to confer power on
the States.

In The Commonwealth v. Queensland[198] Higgins J., referring to the Commonwealth Parliament,
said:

Just as it can, under the defence power, isolate specified ground from the intrusion of the public, so
it can under the borrowing power, isolate its stock from State taxation.

With respect, it is not easy to see any analogy whatever between the protection of defence areas
from actual trespassa necessary and well-recognized military precautionand the direct attempt
of the Commonwealth to grant an immunity to its lender from obedience to the general taxation
laws of the State in which the lender obtains the protection of the laws. It would seem that an
immunity from taxation by a State had no connection with the constitutional power of legislation
with respect to the Commonwealth's borrowing money, except perhaps this, that every loan can be
made more attractive if the borrower is able to offer monetary concessions over and above the
repayment of his principal and interest. But the question was whether such concessions can lawfully
be made at the sacrifice of the powers of the States. Of course, the Commonwealth could pay its
lender an amount of interest which, after deduction of all taxation thereon, including State taxation,
would yield a specified net return. But such a payment would have been expensive to the
Commonwealth, which preferred to be generous to its lenders, not at its own expense, but at that of
the States.

The above analysis of The Commonwealth v. Queensland[199] is of importance because, although
the actual decision is not being called into question, there is an analogy between the attempt by the
Commonwealth Parliament to attach to the grant of its salaries to its own officers a guarantee of
freedom from income taxation of the States in respect of the past receipt of such salaries, and its
attempt to prevent the State from exercising its ordinary constitutional authority to enact an
undiscriminatory tax upon the income of all its residents (not excluding income from
Commonwealth securities). If both of such attempts proved successful, the Commonwealth could
confer upon favoured classes or individuals an unexampled series of special privileges, including a
privilege to ignore the constitutional powers of the States. In order to deny the possibility of such
success, no one need rely upon any doctrine of the "reserve powers" of a State, and it would be
sufficient to invoke the principle which may be expressed in the words of Duff J. (of the Supreme
Court of Canada) in the well-known case of Abbott v. City of St. John[200]. There, Duff J. dealt with
the exclusive power of the Dominion to legislate in reference to the provision of salaries for
Dominion officers, and said:

I am quite unable to perceive that the power thus conferred in any way restricts the operation of the
power of taxation committed to the province. The fixing and providing for salaries seems to be, as a
subject of legislation, quite distinct from the power to levy taxes in respect of income. The principle
upon which the burden of the fiscal contributions exacted by a municipality or a province shall be
distributed among those persons subject to its fiscal jurisdiction seems to be a subject as far
removed as possible from that dealt with in sub-sec. 8 of sec. 91. If one were to speculate upon the
intentions of the framers of the Act, I should suppose nothing further from their intentions than the
exemption of Federal office holders as a class from the fiscal burdens incident to provincial or
municipal citizenship[201].

The decision in Abbott v. City of St. John[202] was approved by the Privy Council in Caron v. The
King[203] and Forbes v. Attorney-General for Manitoba[204].

It is indisputable that the Engineers' Case[205] finally establishes two important points in relation to
sec. 51 of the Constitution. First, a rule of construction according to which the theory that all State
powers or activities must be treated as having been previously reserved from the scope of sec. 51 is
rejected, the true rule being that each subject matter in sec. 51 must be regarded as a separate subject
matter, so that if, upon its fair construction, any State activity is included within the subject, it is for
the Commonwealth Parliament alone to decide upon the desirability of applying its legislation to
such activity. Second, that, under sec. 51 (xxxv.), the activities of a State as employer in industries
are within the scope of the subject matter of that sub-section. But the Engineers' Case is no warrant
for the extreme view that the result reached in relation to sec. 51 (xxxv.) necessarily applies
indifferently to all the placita in sec. 51, still less is it a warrant for the view that the Commonwealth
is at liberty to nullify the ordinary constitutional powers of a State by purporting to exercise one or
other of the powers of legislation set out in sec. 51. For instance, even the Commonwealth's power
to restrict or restrain by legislation under sec. 51 (xxxv.) the proceedings and determinations of State
industrial tribunals is qualified, not absolute (Australian Timber Workers' Union v. Sydney and
Suburban Timber Merchants' Association[206]). Further, it must not be supposed that, in dealing
with "bankruptcy and insolvency," the Commonwealth could make a sequestration order against a
State, though it could bind a State in relation to its position as creditor in a bankruptcy. Outstanding
factors in interpreting the thirty-nine placita in sec. 51 are the separable nature of each of the placita
and the principle that the legislative powers of the States are concurrent with those of the
Commonwealth (James v. The Commonwealth[207]).

Further, as I endeavoured to illustrate in the case of Stock Motor Ploughs Ltd. v. Forsyth[208],
attempts by the Commonwealth Parliament to manufacture "inconsistency" between its own
legislation and that of the States will often be essayed only at the price of making the
Commonwealth legislation ultra vires. Of course, lawful attempts by the Commonwealth may occur,
as in R. v. Brisbane Licensing Court; Ex parte Daniell[209], where State referenda and general
elections were forbidden to be held on the same day as Commonwealth elections. No doubt, the
State's legislation, actual and prospective, was avoided pro tanto. But the Commonwealth's
legislative power over its own electoral system was deemed sufficient to enable it to prevent the
awkwardness and confusion which might well result from a simultaneous Commonwealth and State
election. In fact, the State was not impeded in its constitutional functions, for 364 other days in the
year were left for it to choose from. On the other hand, a Commonwealth electoral law which
forbade the holding of State elections for six months prior to a Commonwealth election would
obviously be invalid.

Pirrie v. McFarlane.

In some respects Pirrie v. McFarlane[210] represents the culminating point of the theory that any
inconvenient State legislation may be invalidated by the Commonwealth's manufacturing
"inconsistency" within the meaning of sec. 109 of the Constitution. There, the Motor Car Act 1915
of the State of Victoria required that all persons driving a motor car upon any public highway should
have a licence for that purpose. In the interpretation of the State Act, the majority of the High Court
held that persons whether in the service of the Commonwealth or of a State were subjected to the
licensing requirements of sec. 6. Then the question arose as to whether, under the State Act, there
could be a valid conviction of a person who was admittedly driving a car upon a public highway
without a licence, but who (i.) was an enlisted member of the Commonwealth Air Force, and (ii.)
acted in accordance with instructions to drive the car through the streets of Melbourne in order to
pick up a passenger, the latter being an officer of the same force.

The majority of the court held that the defendant was rightly convicted, and they rejected the
argument that, under the Constitution or the Defence Act in its existing form, members of the
Defence Force when on duty in time of profound peace were to be regarded as exempt from
obedience to the requirements of motor traffic legislation. The conclusion, however, was
accompanied by certain obiter dicta (Knox C.J., p. 184; Higgins J., p. 218; Starke J., p. 229) to the
effect that the Commonwealth Parliament might, by passing amended defence legislation, exempt its
officers from the obligation of being licensed under State law. This suggestion perhaps overlooks
the fact, stressed by Higgins J. on the question of interpretation, that for traffic regulation "to be
effective, all the traffic must be bound" (p. 218). The same fact is very important in dealing with the
question of legislative power. The Commonwealth Parliament has no general power to regulate
traffic so as to secure the safety of drivers and pedestrians; with that subject the State alone can deal.
It requires a licence from a driver in order to ensure safety, and the charge imposed is small,
practically nominal. Higgins J. rightly referred to the Canadian case of Abbott v. City of St.
John[211] already discussed above, which affirmed the power of a Province to tax Dominion
officials "in like manner as all other residents." He regarded the motor traffic legislation in question
in Pirrie v. McFarlane[212] as illustrative of an analogous principle. A general exemption in favour
of members of the defence force might be destructive of any effective regulation of motor traffic.

Perhaps it might be said that the broad scheme of the Australian Constitution is that of mutual
subjection to law of both Commonwealth and the States so that, generally speaking, all the laws of
the Commonwealth may bind all the people of the Commonwealth (including, of course, State
servants), and that all the laws of a State shall bind all the people of the State (including, of course,
Commonwealth servants in that State). But the point left outstanding in Pirrie v. McFarlane is
whether the Commonwealth Parliament can validly confer upon its servants a special immunity
from the operation of State traffic legislation and regulations. It certainly could not give a general
exemption from obedience to the directions of State officers as to traffic and speed observances. In
time of war or emergency the position might be different, but any such Commonwealth legislation
would have to be conditioned upon the existence of war or emergency. The spectacle conjured up by
Isaacs J. (see p. 211) is not very convincing. In the particular case under investigation, there was no
evidence as to what the officer to be "picked up" was doing. He might not even have been engaged
on the business of the department. According to the reasoning, as expressed at p. 205, the messenger
of a Federal judge, sent to obtain books of reference, may disobey traffic regulations, because
"soldiers perform their official duties necessarily on the highways of the country as well as in
barracks," and "judges and members of Parliament are by the very nature of their duties to be left to
their free exercise, unfettered by State legislation." Some of the reasoning used by Isaacs J. bears a
resemblance to the doctrines propounded in D'Emden v. Pedder[213]. I do not see how the grant of
general exemptions from obedience to the requirements of State traffic legislation could possibly be
regarded as a valid law with respect to defence; although, if the legislation were limited to occasions
of emergency or military necessity, the result might be different. Further, State traffic legislation,
though incidentally affecting Commonwealth (including military) officers, cannot possibly be
regarded as a law with respect to defence, and as intruding upon the exclusive domain of
Commonwealth legislative or executive authority over defence.

The conclusions to which I have come in the present case are:

(1)

That if, upon its proper construction, the Commonwealth legislation here relied upon by the
Commonwealth pensioner purports to establish his immunity from liability to tax under the New
South Wales Special Income and Wages Tax (Management) Act 1933 the Commonwealth
legislation is, to that extent, ultra vires and void.

(2)

That if, upon its proper construction, the same Commonwealth legislation purports to establish the
Commonwealth pensioner's liability to tax under the New South Wales Special Income and Wages
Tax (Management) Act 1933, the Commonwealth legislation is, to that extent, ultra vires and void.

(3)

That there is no "inconsistency" within the meaning of sec. 109 of the Constitution between
Commonwealth legislation which provides for the grant of a pension or salary to its officers, and
State legislation which imposes a general, undiscriminatory tax upon the income of such officers,
who are otherwise subject to the laws of the State. In such a case, to use the words of Davies J. in
Abbott v. City of St. John[214], "the conflict is ... an imaginary one."

(4)

That the present appellant was properly assessed under the New South Wales Special Income and
Wages Tax (Management) Act 1933, although the assessment was in respect of moneys which had
been received by him by way of pension under the (Commonwealth) Superannuation Act 1922-
1934.

The stated case should be answered:1. Yes. 2. No.

McTiernan J.

The appellant upon his retirement from the public service of the Commonwealth became entitled to
a pension under the Commonwealth Superannuation Act 1922-1934. It was paid to him out of the
fund established under that Act to provide superannuation benefits for persons in the
Commonwealth Public Service and other benefits for their families. The fund is maintained by the
contributions which the Act obliges such employees to make out of their salaries and by the
statutory payments made by the Commonwealth out of revenue. The benefits provided from this
fund to employees, although paid upon the termination of their services, are part of the emoluments
attached to their employment. The appellant is resident in New South Wales and the moneys which
he has received from the Commonwealth are required by the Special Income and Wages Tax
(Management) Act 1933 of New South Wales to be included in his income for purposes of
assessment for tax under that Act. The Commonwealth Superannuation Act was passed under the
exclusive powers of the Commonwealth to make laws with respect to matters relating to the public
service of the Commonwealth (Constitution. sec. 52). The State Act is general and non-
discriminatory and was passed under the powers which are reserved to the States by the
Commonwealth Constitution. The question for decision is whether the State Act validly extends to
tax the appellant's Commonwealth pension.

The analogous and equally delicate question, whether a Commonwealth officer is liable to State
taxation in respect of his salary, was settled by the Commonwealth Salaries Act 1907, the legislature
thereby embracing a solution which had judicial recommendation (See Baxter v. Commissioners of
Taxation (N.S.W.)[215]; Flint v. Webb[216]; Chaplin's Case[217]). Before this Act was passed the
Privy Council had decided that a Commonwealth officer was not exempt from State taxation in
respect of his salary (Webb v. Outrim[218]), whereas the High Court reached the opposite
conclusion both before and after the Privy Council had given its decision (Deakin v. Webb[219];
Baxter's Case[220]). The application of the Commonwealth Salaries Act 1907 is limited to the
salaries of Commonwealth employees. It does not assume to remove any obstacle which may exist
to a State levying taxation on the superannuation benefits paid to former employees of the
Commonwealth living within the territorial jurisdiction of a State.

The High Court had, in the early cases above referred to, declared that the taxation by a State of
moneys received as salary by a Commonwealth officer was an illegal interference with the means
employed by the Commonwealth to perform its constitutional functions. But it decided in the
Engineers' Case[221] that the immunity of the salary of a Commonwealth officer from State
taxation could not, consistently with the Constitution, be defended on that ground. That case, in
which four of the justices so decided, was more directly concerned with settling the difficulty which
arose from the conflict of laws where the Commonwealth by an Act passed under sec. 51 of the
Constitution, enters a field already in the lawful legislative occupancy of the States. The court there
decided that this difficulty was resolved by the express rule in sec. 109 of the Constitution which
gives legal supremacy to Commonwealth law, and that the doctrine of "implied prohibition" could
not be invoked in aid of the States. Knox C.J., Isaacs, Rich and Starke JJ., in a joint judgment,
said:"The doctrine of implied prohibition finds no place where the ordinary principles of
construction are applied so as to discover in the actual terms of the instrument their expressed or
necessarily implied meaning. The principle we apply to the Commonwealth we apply also to the
States, leaving their respective acts of legislation full operation within their respective areas and
subject matters, but, in case of conflict, giving to valid Commonwealth legislation the supremacy
expressly declared by the Constitution, measuring that supremacy according to the very words of
sec. 109. That section which says When a law of a State is inconsistent with a law of the
Commonwealth, the latter shall prevail, and the former shall, to the extent of the inconsistency, be
invalid, gives supremacy, not to any particular class of Commonwealth Acts but to every
Commonwealth Act, over not merely State Acts passed under concurrent powers but all State Acts,
though passed under an exclusive power, if any provisions of the two conflict; as they mayif they
do not, then cadit qustio" (Engineers' Case[222]). In expressing the court's opinion that the
doctrine of implied prohibition was not a sound ground upon which to base the immunity of
Commonwealth salaries from State taxation, the justices referred to the character of the State
legislation imposing taxation with which the previous decisions were concerned. Attention was
directed to its non-discriminatory character. It imposed on the Commonwealth officer, whom it
assumed to tax, no different burden from that borne by other persons in the territory of the State
who were affected by it. The justices also dealt with the question whether a State Act discriminating
against persons who were Commonwealth officers would be invalid because of its special character.
They said: "An Act of the State legislature discriminating against Commonwealth officers might
well be held to have the necessary effect of conflicting with the provisions made by the
Commonwealth law for its officers relatively to the rest of the community" (Engineers' Case[223]).

The court had in the previous cases relied on another ground as well, for its conclusion that
Commonwealth salaries were exempt from the operation of State income tax laws. Referring to that
ground, the justices in the Engineers' Case[224] said:"The second ground depends on the
construction of the Commonwealth Act with which the State Act is alleged to conflict. If, on a
proper construction of both Acts, they conflict, the State Act is, to that extent, invalid. But that is so
by force of the express words of sec. 109, and not by reason of any implied prohibition." The
present problem depends for its solution on the same considerations. The authority of the Engineers'
Case was not impugned in argument. It follows that the appellant's liability to State taxation turns
on the question whether it would be consistent with the Commonwealth fixing the measure of the
benefit which that law intends that the appellant should receive by way of pension, for the State Act
to include his pension within the income upon which he is liable to pay income tax to the
Government of New South Wales. In Chaplin's Case[225], Griffith C.J., with whom Barton and
O'Connor JJ. agreed, said that the grant of a salary by the Commonwealth to an employee for the
performance of his duties is the same in principle as the grant of a franchise to an individual or a
company. He added: "The grant, if no more is said, is free from taxation by the State, but in making
the grant the Commonwealth may say that the grant to the individual is subject to State taxation."
(Compare The Commonwealth v. Queensland[226]; Fairbairn v. Comptroller of Stamps
(Vict.)[227].) The reason given by the Chief Justice for this view is not unrelated to the condemned
doctrine of implied prohibition. Nevertheless the conclusion reached in Chaplin's Case[228] that the
salary was taxable within the limits marked out by the Commonwealth Salaries Act 1907 was
approved in the Engineers' Case, on the ground that after the passing of the Commonwealth Salaries
Act there was no inconsistency between Commonwealth law with respect to the remuneration of
Commonwealth employees and State law which included that remuneration within his taxable
income, provided that the taxation was within the limits marked out by the Commonwealth Salaries
Act.

The decision of the present question is not embarrassed by the want of judicial unanimity on the
question whether an Act taxing the recipient of a salary in respect of that income is consistent with a
law fixing the amount of the salary (See Deakin v. Webb[229]; Baxter's Case[230]; Dobbins v.
Commissioners of Erie County[231]; Evans v. Gore[232]; Caron v. The King[233]). The terms of the
relevant Commonwealth legislation show that in the present case there is no inconsistency between
Commonwealth and State law.

The Superannuation Act, which is the Act fixing the amount of the pension, must, for the present
purpose, be read with the provisions of the Financial Emergency Acts of the Commonwealth, which
contain provisions with respect to the same subject matter. These provisions are fully referred to in
the judgment of the Chief Justice and it is unnecessary to quote them again. They show that after the
passing of the Financial Emergency Acts the Commonwealth did not intend to grant superannuation
benefits which would be exempt from all taxation which a State might under its own proper
authority levy in respect of that income. The fact that the Governor-General has not prescribed the
maximum which may be imposed by State law does not negative the intention apparent on the face
of the relevant Commonwealth legislation that the measure of the grant to be enjoyed by
Commonwealth pensioners should be liable to be affected by valid State income tax legislation. The
consequence is that to include the moneys received by the appellant as pension within the income in
respect of which he is liable to taxation under the relevant State Act is not to derogate from the
rights which he derives from Commonwealth law.

In my opinion the questions for decision should be answered in favour of the Commissioner of
Taxation.

Questions in the case stated answered:1. Yes. 2. No.

Solicitor for the appellant, Percy R. Watts.
Solicitor for the respondent, J. E. Clark, Crown Solicitor for New South Wales.
[1] (1904) 1 C.L.R. 585.
[2] [1907] HCA 76; (1907) 4 C.L.R. 1087.
[3] [1904] HCA 1; (1904) 1 C.L.R. 91.
[4] (1907) 4 C.L.R., at p. 1133.
[5] (1907) 4 C.L.R., at p. 1187.
[6] [1920] HCA 54; (1920) 28 C.L.R. 129.
[7] [1920] HCA 54; (1920) 28 C.L.R. 129.
[8] [1904] HCA 1; (1904) 1 C.L.R. 91.
[9] [1904] HCA 1; (1904) 1 C.L.R. 91.
[10] [1920] HCA 54; (1920) 28 C.L.R. 129.
[11] (1904) 1 C.L.R. 585.
[12] [1907] HCA 76; (1907) 4 C.L.R. 1087.
[13] [1920] HCA 54; (1920) 28 C.L.R. 129.
[14] (1920) 28 C.L.R., at p. 157.
[15] (1920) 28 C.L.R., at pp. 156, 157.
[16] [1911] HCA 13; (1911) 12 C.L.R. 375.
[17] [1911] HCA 13; (1911) 12 C.L.R. 375.
[18] (1911) 12 C.L.R., at p. 378.
[19] [1920] HCA 54; (1920) 28 C.L.R. 129.
[20] [1911] HCA 13; (1911) 12 C.L.R. 375.
[21] [1920] HCA 79; (1920) 29 C.L.R. 1, at p. 22.
[22] [1911] HCA 13; (1911) 12 C.L.R. 375.
[23] [1920] HCA 54; (1920) 28 C.L.R. 129.
[24] [1920] HCA 54; (1920) 28 C.L.R. 129.
[25] [1907] HCA 27; (1907) 4 C.L.R. 1304.
[26] (1904) 1 C.L.R. 585.
[27] [1907] HCA 76; (1907) 4 C.L.R. 1087.
[28] [1920] HCA 54; (1920) 28 C.L.R. 129.
[29] (1924) A.C. 999.
[30] (1908) 40 S.C.R. (Can.) 597.
[31] (1937) A.C. 260.
[32] (1908) 40 S.C.R. (Can.), at pp. 606, 607.
[33] (1924) A.C., at p. 1005.
[34] (1937) A.C., at p. 271.
[35] (1924) A.C. 999.
[36] (1937) A.C. 260.
[37] (1904) 1 C.L.R. 585.
[38] [1907] HCA 76; (1907) 4 C.L.R. 1087.
[39] [1911] HCA 13; (1911) 12 C.L.R. 375.
[40] [1920] HCA 54; (1920) 28 C.L.R. 129.
[41] [1911] HCA 13; (1911) 12 C.L.R. 375.
[42] [1920] HCA 24; (1920) 28 C.L.R. 23.
[43] [1920] HCA 79; (1920) 29 C.L.R. 1.
[44] (1920) 29 C.L.R., at p. 21.
[45] [1925] HCA 30; (1925) 36 C.L.R. 170.
[46] (1925) 36 C.L.R., at p. 183.
[47] (1925) 36 C.L.R., at p. 214.
[48] (1925) 36 C.L.R., at p. 229.
[49] (1925) 36 C.L.R., at pp. 210, 211.
[50] (1925) 36 C.L.R., at p. 220.
[51] (1937) 53 T.L.R. 464.
[52] (1920) 28 C.L.R., at pp. 156, 157.
[53] (1904) 1 C.L.R. 585.
[54] [1842] USSC 6; (1842) 41 U.S. 435.
[55] [1906] UKPCHCA 4; (1907) A.C. 81; 4 C.L.R. 356.
[56] [1907] HCA 76; (1907) 4 C.L.R. 1087.
[57] [1911] HCA 13; (1911) 12 C.L.R. 375.
[58] [1907] HCA 76; (1907) 4 C.L.R. 1087.
[59] (1904) 1 C.L.R. 585.
[60] (1920) 28 C.L.R., at pp. 156, 157.
[61] [1925] HCA 30; (1925) 36 C.L.R. 170.
[62] (1930) 54 Can. C.C. 321.
[63] (1907) A.C. 81; 4 C.L.R. 556.
[64] [1920] HCA 54; (1920) 28 C.L.R. 129.
[65] (1904) 1 C.L.R. 585.
[66] [1907] HCA 76; (1907) 4 C.L.R. 1087.
[67] [1906] UKPCHCA 4; (1907) A.C. 81; 4 C.L.R. 356.
[68] [1920] HCA 54; (1920) 28 C.L.R. 129.
[69] [1911] HCA 13; (1911) 12 C.L.R. 375.
[70] [1920] HCA 24; (1920) 28 C.L.R. 23.
[71] [1920] HCA 79; (1920) 29 C.L.R. 1.
[72] [1912] HCA 61; (1912) 15 C.L.R. 355.
[73] [1906] UKPCHCA 4; (1907) A.C. 81; 4 C.L.R. 356.
[74] (1908) 40 S.C.R. (Can.) 597.
[75] (1924) A.C. 999.
[76] [1925] HCA 30; (1925) 36 C.L.R. 170.
[77] [1907] HCA 27; (1907) 4 C.L.R. 1304.
[78] [1911] HCA 13; (1911) 12 C.L.R. 375.
[79] (1911) 12 C.L.R., at p. 381.
[80] (1908) 40 S.C.R. (Can.) 597.
[81] (1924) A.C. 999.
[82] (1937) A.C. 260.
[83] (1937) A.C., at pp. 270, 271.
[84] (1908) 40 S.C.R. (Can.) 597.
[85] (1908) 40 S.C.R. (Can.), at p. 618.
[86] [1920] HCA 54; (1920) 28 C.L.R. 129.
[87] [1920] HCA 54; (1920) 28 C.L.R. 129.
[88] (1925) 36 C.L.R., at p. 191.
[89] [1920] HCA 54; (1920) 28 C.L.R. 129.
[90] [1920] HCA 54; (1920) 28 C.L.R. 129.
[91] [1930] HCA 52; (1930) 44 C.L.R. 319, at p. 390.
[92] (1930) 44 C.L.R., at p. 389.
[93] [1932] HCA 7; (1932) 46 C.L.R. 155, at p. 185.
[94] (1920) 28 C.L.R., at pp. 156, 157.
[95] (1904) 1 C.L.R. 585.
[96] [1907] HCA 76; (1907) 4 C.L.R. 1087.
[97] [1920] USSC 122; (1920) 253 U.S. 245; 64 Law. Ed. 887.
[98] [1907] HCA 27; (1907) 4 C.L.R. 1304.
[99] (1904) 1 C.L.R. 585.
[100] [1920] HCA 54; (1920) 28 C.L.R. 129.
[101] [1920] USSC 122; (1920) 253 U.S. 245; 64 Law. Ed. 887.
[102] [1920] HCA 79; (1920) 29 C.L.R. 1.
[103] [1920] HCA 79; (1920) 29 C.L.R. 1.
[104] [1932] HCA 33; (1932) 47 C.L.R. 482.
[105] (1932) 46 C.L.R., at p. 196.
[106] [1920] HCA 54; (1920) 28 C.L.R. 129.
[107] [1923] HCA 23; (1923) 32 C.L.R. 200, at pp. 210, 218.
[108] [1936] UKPCHCA 4; (1936) A.C. 578, at p. 611; 55 C.L.R. 1, at p. 41.
[109] (1932) 46 C.L.R., at p. 220.
[110] [1904] HCA 1; (1904) 1 C.L.R. 91.
[111] (1904) 1 C.L.R., at pp. 118, 119.
[112] (1904) 1 C.L.R., at p. 111.
[113] (1904) 1 C.L.R., at p. 596.
[114] (1904) 1 C.L.R., at p. 119.
[115] [1904] HCA 1; (1904) 1 C.L.R. 91.
[116] (1920) 28 C.L.R., at p. 156.
[117] [1932] HCA 40; (1932) 48 C.L.R. 128, at p. 147.
[118] [1932] HCA 40; (1932) 48 C.L.R. 128, at p. 147.
[119] [1904] HCA 1; (1904) 1 C.L.R. 91.
[120] [1904] HCA 1; (1904) 1 C.L.R. 91.
[121] (1904) 1 C.L.R., at pp. 602, 603.
[122] (1904) 1 C.L.R., at p. 613.
[123] (1904) 1 C.L.R., at p. 613.
[124] (1904) 1 C.L.R., at p. 616.
[125] (1904) 1 C.L.R. 585.
[126] [1904] HCA 1; (1904) 1 C.L.R. 91.
[127] (1904) 1 C.L.R., at p. 613.
[128] (1904) 1 C.L.R. 585.
[129] (1904) 1 C.L.R., at p. 621.
[130] (1904) 1 C.L.R. 585.
[131] [1904] HCA 1; (1904) 1 C.L.R. 91.
[132] [1904] HCA 1; (1904) 1 C.L.R. 91.
[133] [1906] UKPCHCA 4; (1907) A.C. 81; 4 C.L.R. 356.
[134] (1907) A.C., at p. 88; 4 C.L.R., at p. 358.
[135] [1906] HCA 94; (1906) 4 C.L.R. 488.
[136] [1904] HCA 1; (1904) 1 C.L.R. 91.
[137] (1906) 4 C.L.R., at p. 537.
[138] (1906) 4 C.L.R., at p. 537.
[139] (1906) 4 C.L.R., at p. 539.
[140] [1906] UKPCHCA 4; (1907) A.C. 81; 4 C.L.R. 356.
[141] [1907] HCA 76; (1907) 4 C.L.R. 1087.
[142] [1907] HCA 76; (1907) 4 C.L.R. 1087.
[143] [1904] HCA 1; (1904) 1 C.L.R. 91.
[144] (1904) 1 C.L.R. 585.
[145] [1907] HCA 76; (1907) 4 C.L.R. 1087.
[146] [1904] HCA 1; (1904) 1 C.L.R. 91.
[147] [1906] UKPCHCA 4; (1907) A.C. 81; 4 C.L.R. 356.
[148] [1904] HCA 1; (1904) 1 C.L.R. 91.
[149] (1904) 1 C.L.R. 585.
[150] (1907) 4 C.L.R., at p. 1133.
[151] (1907) 4 C.L.R. at p. 1194.
[152] (1908) A.C. 214; 5 C.L.R. 395.
[153] [1911] HCA 13; (1911) 12 C.L.R. 375.
[154] (1911) 12 C.L.R., at p. 380.
[155] (1911) 12 C.L.R., at p. 380.
[156] [1920] HCA 54; (1920) 28 C.L.R. 129.
[157] (1904) 1 C.L.R. 585.
[158] [1907] HCA 76; (1907) 4 C.L.R. 1087.
[159] [1904] HCA 50; (1904) 1 C.L.R. 208.
[160] [1906] HCA 94; (1906) 4 C.L.R. 488.
[161] [1904] HCA 17; (1904) 1 C.L.R. 406.
[162] [1920] HCA 54; (1920) 28 C.L.R. 129.
[163] (1925) 36 C.L.R., at p. 213.
[164] (1930) 44 C.L.R., at pp. 352, 353, 389-392.
[165] [1904] HCA 1; (1904) 1 C.L.R. 91.
[166] [1920] HCA 54; (1920) 28 C.L.R. 129.
[167] [1904] HCA 1; (1904) 1 C.L.R. 91.
[168] [1906] UKPCHCA 4; (1907) A.C. 81; 4 C.L.R. 356.
[169] (1907) 4 C.L.R., at pp. 1158, 1159, and especially at p. 1160.
[170] (1920) 28 C.L.R., at p. 174.
[171] [1920] HCA 54; (1920) 28 C.L.R. 129.
[172] [1904] HCA 1; (1904) 1 C.L.R. 91.
[173] (1904) 1 C.L.R. 585.
[174] (1920) 28 C.L.R., at pp. 156, 157.
[175] [1906] UKPCHCA 4; (1907) A.C. 81; 4 C.L.R. 356.
[176] [1907] HCA 76; (1907) 4 C.L.R. 1087.
[177] (1904) 1 C.L.R. 585.
[178] (1904) 1 C.L.R. 585.
[179] [1920] HCA 54; (1920) 28 C.L.R. 129.
[180] [1911] HCA 13; (1911) 12 C.L.R. 375.
[181] [1920] HCA 79; (1920) 29 C.L.R. 1.
[182] [1911] HCA 13; (1911) 12 C.L.R. 375.
[183] (1920) 28 C.L.R., at p. 157.
[184] [1904] HCA 1; (1904) 1 C.L.R. 91.
[185] (1920) 28 C.L.R., at p. 157.
[186] [1906] HCA 94; (1906) 4 C.L.R. 488.
[187] (1920) 28 C.L.R., at p. 157.
[188] [1908] HCA 28; (1908) 5 C.L.R. 818.
[189] [1920] HCA 54; (1920) 28 C.L.R. 129.
[190] [1920] HCA 79; (1920) 29 C.L.R. 1.
[191] [1911] HCA 13; (1911) 12 C.L.R. 375.
[192] [1920] HCA 54; (1920) 28 C.L.R. 129.
[193] [1920] HCA 79; (1920) 29 C.L.R. 1.
[194] (1904) 1 C.L.R. 585.
[195] (1904) 1 C.L.R. 585.
[196] [1907] HCA 76; (1907) 4 C.L.R. 1087.
[197] (1920) 28 C.L.R., at p. 157.
[198] [1920] HCA 79; (1920) 29 C.L.R. 1, at p. 27.
[199] [1920] HCA 79; (1920) 29 C.L.R. 1.
[200] (1908) 40 S.C.R. (Can.) 597.
[201] (1908) 40 S.C.R. (Can.), at p. 618.
[202] (1908) 40 S.C.R. (Can.) 597.
[203] (1924) A.C. 999.
[204] (1937) A.C. 260.
[205] [1920] HCA 54; (1920) 28 C.L.R. 129.
[206] [1935] HCA 55; (1935) 53 C.L.R. 665.
[207] (1936) A.C. at pp. 632, 633; 55 C.L.R., at pp. 60, 61.
[208] [1932] HCA 40; (1932) 48 C.L.R. 128.
[209] [1920] HCA 24; (1920) 28 C.L.R. 23.
[210] [1925] HCA 30; (1925) 36 C.L.R. 170.
[211] (1908) 40 S.C.R. (Can.) 597.
[212] [1925] HCA 30; (1925) 36 C.L.R. 170.
[213] [1904] HCA 1; (1904) 1 C.L.R. 91.
[214] (1908) 40 S.C.R. (Can.), at p. 606.
[215] (1907) 4 C.L.R., at p. 1133.
[216] (1907) 4 C.L.R., at p. 1187.
[217] (1911) 12 C.L.R., at p. 378.
[218] [1906] UKPCHCA 4; (1907) A.C. 81; 4 C.L.R. 356.
[219] (1904) 1 C.L.R. 585.
[220] [1907] HCA 76; (1907) 4 C.L.R. 1087.
[221] [1920] HCA 54; (1920) 28 C.L.R. 129.
[222] (1920) 28 C.L.R., at p. 155.
[223] (1920) 28 C.L.R., at p. 157.
[224] (1920) 28 C.L.R., at p. 157.
[225] (1911) 12 C.L.R., at p. 380.
[226] [1920] HCA 79; (1920) 29 C.L.R. 1.
[227] [1935] HCA 57; (1935) 53 C.L.R. 463.
[228] [1911] HCA 13; (1911) 12 C.L.R. 375.
[229] (1904) 1 C.L.R. 585.
[230] [1907] HCA 76; (1907) 4 C.L.R. 1087.
[231] [1842] USSC 6; (1842) 41 U.S. 435.
[232] [1920] USSC 122; (1920) 253 U.S. 245; 64 Law. Ed. 887.
[233] (1924) A.C. 999.
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