HIGH COURT OF AUSTRALIA

                                     Riverina Transport Proprietary Limited

                                                           Vs.

                                                   State of Victoria

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

                                                     28 July 1937

Latham C.J.

This case comes before the Full Court upon a direction made by my brother Evatt under sec. 18 of
the Judiciary Act 1903-1934.

The Victorian Transport Regulation Act 1933, sec. 23, provides that a commercial goods vehicle
shall not operate on any public highway unless such vehicle is licensed in accordance with the Act.
The defendant, the Transport Regulation Board, is empowered by the Act to grant or refuse licences.
The plaintiff, which is engaged in the motor carrying business, particularly between Melbourne and
the Riverina district of New South Wales, applied for licences for its vehicles. The applications were
refused and the Governor in Council approved the decision of the board.

The board is entrusted with powers of organization and co-ordination of motor transport in Victoria
under a licensing system. Sec. 26 of the Act requires the board to take into consideration the matters
there mentioned in dealing with applications for licences. Under the Transport Regulation Act 1935,
sec. 4, it is provided that "no decision of the board granting or refusing to grant any application for a
commercial passenger vehicle licence or a commercial goods vehicle licence or revoking or
suspending any such licence shall have any force or effect until such decision is reviewed by the
Governor in Council." The section also provides that in reviewing any decision the "Governor in
Council may by order within six months of the board giving a decision--(a) approve the decision of
the board; (b) disapprove the decision of the board; or (c) make any determination in the matter
which the board might have made--and every such order shall be given effect to as soon as may be
by the board."

The plaintiff's applications related to some twenty-seven commercial goods vehicles which it had
been using for the purpose of carrying goods between Melbourne and districts in the Riverina in
New South Wales. On 13th June 1935 the board refused the applications. The Act of 1935 came into
operation on 2nd October 1935 and contained the provision giving the Governor in Council the
power of review to which I have already referred. Applicants who had been unsuccessful were given
a further opportunity of applying for licences and on 4th December 1935 several applications were
made by the plaintiff and were again refused by the board. The chairman of the board, Mr. P. D.
Phillips, was called as a witness in this action, and he gave evidence that the board in reaching its
decisions applied the same principles as had been applied to applicants for services within Victoria.
The result of the application of these principles was that in the opinion of the board it was proper to
refuse all the plaintiff's applications.
On 24th January 1936 the Governor in Council approved the refusal of the board to grant the
applications.

The Cabinet considered the policy to be applied in relation to the regulation of motor transport and
an announcement was made by the Premier on 4th March 1936 which included the following
statements:--"Riverina Cases: The decision of the Transport Board in Riverina cases to stand. Road
Hauliers: Operators who were running in August 1933 and who provided reliable, efficient and
regular services will be granted licences to continue operating on the route or routes upon which
they were then operating."

The board, in accordance with the directions contained in this statement, has applied and proposes
to continue to apply the policy adopted by the Cabinet.

The plaintiff complains that applications such as those of the plaintiff for commercial goods vehicle
licences in respect of inter-State services have been uniformly refused by the board, while
applications for licences for routes comparable in length and other relevant characteristics have been
granted in respect of services confined to Victoria. It is said that the policy of the Government and
the decisions of the board in conformity therewith mean in practice that no inter-State licences will
be granted at all. It is further complained that the concession in favour of services operating before
August 1933 has been limited to services operating within Victoria and that therefore applications in
respect of inter-State services are dealt with upon a footing different from, and less favourable than,
that upon which applications relating to services within Victoria are dealt with. It is argued that
there is accordingly a practice of discrimination in the administration of the Act by the board which
entitles the plaintiff to a remedy because such discrimination is forbidden by sec. 92 of the
Constitution of the Commonwealth, which provides that "trade, commerce, and intercourse among
the States, whether by means of internal carriage or ocean navigation, shall be absolutely free." The
plaintiff claims declarations that the Acts are invalid either in toto or in so far as they prevent the
plaintiff from carrying goods inter-State: that the refusal of the board to issue licences and the
approval by the Governor in Council of that refusal are unlawful: that it is lawful for the plaintiff to
operate its motor vehicles in inter-State services without any licence: and consequential injunctions.

It was first contended that the Transport Regulation Act was invalid because its licensing provisions
imposed restrictive conditions upon the inter-State carriage of goods and because they were such as
made possible an illegal discrimination against inter-State trade and commerce. It is impossible to
accept this contention. In James v. The Commonwealth[1] the Privy Council considered the whole
question of the meaning of sec. 92. Their Lordships expressly approved the decision in R. v. Vizzard;
Ex parte Hill[2], which raised the question whether the State Transport (Co-ordination) Act 1931
N.S.W. contravened sec. 92. The court held that the reasoning of the majority of the court holding
that the Act was valid was correct, and expressly approved the judgment of Evatt J. It is not possible
to distinguish this New South Wales Act from the Victorian Act under which the question arises in
the present case. It must, therefore, be accepted as a basis of any judgment in the present case that
the Victorian Act is valid.

My brother Evatt has referred to the court all the evidence in the case and the court is in a position
to determine all the questions which are raised by the evidence in relation to the pleadings of the
parties. There is much to be said for the proposition that it has not been established that any
discrimination has been shown, in relation to the applications of the plaintiff, between inter-State
and intra-State trade and commerce. The evidence of Mr. Phillips shows that the results reached in
relation to the Riverina applications can reasonably be supported upon the basis of the principles
applied by the board in the case of purely Victorian applications. The declaration of policy made by
the Government did not operate in relation to the plaintiff's applications, because they had been
finally dealt with by 24th January, whereas the declaration of policy was not made by the
Government, and necessarily accepted by the board, until 4th March 1936. But, for the purposes of
this case, I am prepared to assume in favour of the plaintiff that all the allegations they make are
true, that is to say, that the board has refused their applications simply because they are applications
for licences in relation to inter-State transport, and further that, if the board were now to consider
the applications, the board would not apply in favour of the plaintiff the concession which is made
to services regularly operating in Victoria before August 1933. I am also prepared to assume in
favour of the plaintiff, though there is but little evidence to support the proposition, that as a result
of the refusals of licences to the plaintiff the trade between Victoria and New South Wales has been
diminished in total volume. I proceed to consider the case upon the basis of these assumptions.

It is necessary to deal with some preliminary questions of principle.

In the first place, the validity of an Act cannot be affected by what a government, board or any
person does or attempts to do in real or pretended reliance upon the provisions of the Act. The same
Act with one set of administrators may be administered in an entirely different way from that in
which it would be administered by another set of administrators.

It is, I think, a serious error to suppose that a statute can begin life as a valid statute and then at
some point of time become invalid because some person takes some action which he unsuccessfully
attempts to justify under the statute. The validity of the Act obviously cannot depend upon what
people do, or think that they are entitled to do, under the Act.

When a person purports to do a particular act under the authority of a statute it may be the case that
what is done is not authorized by the terms of the statute, and therefore that the act done does not by
virtue of the statute either create rights in any person or impose duties upon any person. If the act
which is done is not authorized by the statute and is a breach of duty or an interference with a right
for which the law provides a remedy, the person doing the act is liable in ordinary legal
proceedings. He is liable simply because the ordinary law which makes him liable applies, and he is
unable to claim the protection of the statute because, upon the proper construction of the statute, his
act was not authorized or protected by the statute.

Another case arises where an act which is performed by a person is authorized by the provisions of a
statute but that statute is invalid, so that the act has only apparent and not real legal justification. If
what has been done in real or pretended reliance upon the statute is a breach of duty or an
interference with a right for which the law provides a remedy, then the person doing the act is liable
in ordinary legal proceedings. The position may be simply illustrated by the example of a trespass to
goods, where the plaintiff complains of seizure of his goods by the defendant. Such a seizure gives a
cause of action at common law unless it can be justified or excused. If the defendant justifies under
a statute he must show that his act is authorized by the statute. If this is the only defence and it fails,
there will be judgment for the plaintiff. If his act is authorized by the words of the statute upon
which he relies, but that statute is invalid because it offends against sec. 92 of the Constitution or for
any other reason, then the defence fails. The plaintiff then recovers damages, not for any breach of
the Constitution, but for the common law wrong of trespass. No interference with right can be
justified by an invalid statute, and, the invalid statute being out of the way, the common law applies.

What I have said applies to cases where complaint is made of interference with a right or of breach
of a duty for which the law provides a remedy. There is, however, another class of case which raises
different questions, and the present controversy falls within that class. The plaintiff's complaint is
that the board and the Governor in Council have failed to act properly in relation to the plaintiff's
applications for licences. It is a case of failure to act in the plaintiff's favour by granting a licence.

If a legal duty is imposed upon a person or a public body to act in a particular way, that duty may be
enforced by a court in appropriate proceedings. Thus a body which has the power and the duty of
making decisions affecting the rights of persons, or of issuing licences and conferring rights upon
persons, may, in a proper case, be compelled to perform its duty of duly hearing and determining an
application according to law. Such a remedy, by way of mandamus, is quite distinct from a remedy
by way of appeal. The remedy, however, is inapplicable and inappropriate in such a case as the
present, where the Governor in Council possesses an arbitrary power under the statute to approve or
disapprove the action of the board or to make a new decision. There are no principles according to
which a court could review or control the exercise of such a power.

It is contended, however, by the plaintiff that the board and the Governor in Council have, contrary
to sec. 92 of the Constitution, illegally discriminated against inter-State trade and commerce in
dealing with the plaintiff's applications for licences and that for that reason there must be some form
of remedy available to the plaintiff. I therefore proceed to consider the case upon the basis that there
has been the discrimination against the plaintiff of which the plaintiff complains.

In the first place there is no sign of discrimination in the terms of the statute itself, and, as I have
already said, the statute must be held to be valid. A statute may contain provisions which are invalid
on the ground of an illegal discrimination. A Federal statute with respect to taxation might
discriminate between States or parts of States and so infringe sec. 51 (ii.) of the Constitution. So
also a Federal law or regulation with respect to trade, commerce or revenue might give preference
to one State or a part thereof over another State or a part thereof and so infringe sec. 99 of the
Constitution. Such statutes would be invalid because the discrimination or preference was forbidden
by the Constitution.

Quite different questions arise when the subject of complaint is not discriminatory legislation
(which may make a statute invalid) but discriminatory administration of a valid statute. In such a
case it is contended that an authority acting in pursuance of a valid statute has exercised a prohibited
form of discrimination so that its action is unlawful for that reason. It is here alleged that such
discrimination has been exercised by the board and/or by the Governor in Council. It is necessary to
examine carefully the principles which are relevant in such a case.

Discrimination can exist only where two persons or two subjects are treated in different ways.
Where they are so treated in different decisions of such an authority as the Transport Regulation
Board, questions arise which have not hitherto been the subject of direct decision in relation to the
Commonwealth Constitution. It is plain that the first decision given under the Transport Regulation
Act, whatever its character may be, cannot be a discriminatory decision. Discrimination can be
introduced only when another decision or decisions are given. If sec. 92 forbids discrimination
against inter-State trade and commerce by an administrative authority--so that such discrimination
is a ground for holding a decision or decisions of such authority or authorities to be invalid--each
decision is affected by the invalidating circumstance. The first decision, when given, was obviously
not invalid on the ground of discrimination. Invalidity could only be suggested when a later
decision, say the tenth, was alleged to have the effect of producing forbidden differential treatment
in relation to inter-State trade and commerce. When the tenth decision, which for the first time
reveals the discrimination, is given, is it that decision which is invalid?--or are the other decision or
decisions (by comparison with which the discrimination appears) the decision or decisions which
are invalid? Ex hypothesi every decision would have been valid by itself. Are they all invalidated
because at some time in the history of the activities of the authority a discriminatory decision
appears? If one hundred decisions have been given, ninety-nine of which deal with intra-State trade
and commerce, and then one decision is given dealing with inter-State trade and commerce, and the
last-mentioned decision is alleged to have discriminated against inter-State trade and commerce by
giving less favourable terms in the case of that trade and commerce, which decisions are to be
regarded as invalid on the ground of discrimination--the ninety-nine decisions--or the one
decision--or the whole one hundred decisions? Further, when the discriminatory decision has been
given, does it invalidate other decisions as from the moment when it is given? If this were the case,
an element of the greatest uncertainty would be introduced into governmental administration. It
would seldom be possible to determine without a knowledge of the whole history of the relevant
administrative activities whether any of the decisions were valid. If it is to be held that actions of an
administrative authority can be set aside on the ground of discrimination forbidden by sec. 92 of the
Constitution, it must be remembered that discrimination arises from a comparison of a number of
decisions and not from any single decision. It seems to me to follow that, wherever the
discrimination operates, the decisions which show discrimination must, on the suggested principle,
all be set aside. Thus the fact, if it be a fact, that the Transport Regulation Board has in its decision
discriminated against inter-State trade and commerce must, if it is a ground for interference by a
court, be a ground for setting aside all the decisions which demonstrate the discrimination. All the
decisions would be wrong, those on inter-State trade because they are relatively and wrongly
disadvantageous to such trade and commerce as compared with intra-State trade and commerce, and
those on intra-State trade and commerce because they are relatively and wrongly advantageous to
such trade and commerce as compared with inter-State trade and commerce.

In this case the result would be that no licences would exist under the Act. If that be the result it
must be accepted, but in my opinion there are at least two objections to the view which would result
in such a conclusion. In the first place the Act itself is valid and cannot be made inoperative or in
effect invalid because the board or the Governor in Council has gone wrong (if either has gone
wrong) at some point of time by acting on a discriminatory basis. The contrary view appears to me
to involve a radically unsound view of the nature of an Act of Parliament and of the true
significance of constitutional prohibitions in the Commonwealth Constitution. In the second place,
for reasons which I propose to state, discrimination in relation to inter-State trade and commerce is
not, taken simply by itself, a constitutional objection to any Federal or State law of trade or
commerce. I postpone for the moment the justification of this statement.

I recognize that it may be urged against what I have said that the result of holding that sec. 92
forbids a discriminatory action by an authority and renders it invalid is not that all the decisions of
the authority are of no effect, but that only those which affect inter-State trade and commerce in a
forbidden manner are of no effect. If this be so, the consequence would be that the decision of the
Governor in Council and of the board refusing the plaintiff's applications should at least be set aside.

Then the plaintiff would simply be at liberty to make a fresh application. The court, however, could
not order that a licence should be granted to the plaintiff. Many considerations other than those
which are alleged to be associated with the alleged discrimination must be considered by the board
and the Governor in Council in determining whether to grant or refuse a licence in any particular
case. There is no right of appeal from the decision of the board or of the Governor in Council to any
court, and no court can substitute its judgment for that of the authority or authorities appointed
under the Act to determine questions arising under the Act. A mere rehearing of the application by
the board would be useless unless the Government changed its policy. Courts have no authority or
power to prescribe principles of policy, though they may protect citizens against unlawful acts
which are done by a Government or by any person. It cannot be contended that any person has a
right under the legislation in question to obtain a licence, and, therefore, neither the board nor the
Governor in Council interferes with any right in refusing to grant a licence.

Thus, in my opinion, even if it be fully established that the board and the Governor in Council are,
as a matter of deliberate policy, discriminating against certain inter-State trade and commerce
because it is trade between Victoria and New South Wales, there is, as the law stands, no remedy
available to any person who, in consequence of that policy, fails to obtain a licence.

I now return to the proposition that the Constitution itself does not, simply because it is
discrimination, forbid any form of discrimination, in either Federal or State legislation, against
inter-State trade and commerce. This, however, does not mean that the Constitution does not make it
possible to provide means for obtaining a remedy in such a case. The remedy, if a remedy is desired,
can be provided by aptly framed Federal legislation, which the Constitution permits in all cases, and
for which it makes specific provision, subject to special safeguards, in the case of State railways.

As I have already said, a Federal taxation statute may be invalid because on its face it discriminates
between States, and a Federal law or regulation of trade, commerce or revenue may be held to be
invalid because it gives preference as between States or parts of States. But neither a Federal statute
nor a State statute dealing with trade and commerce can, in my opinion, be held to be invalid on the
sole ground that it discriminates between, or makes it possible for an administrative authority to
discriminate between, inter-State and intra-State trade and commerce.

In the first place, Federal laws as to inter-State trade and commerce passed under the power
conferred by sec. 51 (i.) of the Constitution are necessarily laws which deal only with such trade and
commerce. They cannot validly deal with intra-State trade and commerce. As they cannot deal with
both subjects they cannot discriminate between them--unless, indeed, it is to be said that, as they of
necessity apply only to inter-State trade and commerce, they with equal necessity discriminate
between such trade and commerce and intra-State trade and commerce. Upon this view all Federal
laws dealing with inter-State trade and commerce would necessarily be invalid. The Constitution
does not involve such an absurdity. The view suggested does not give any real meaning to the word
"discrimination." Discrimination at least involves differential treatment of two matters by the same
authority. It cannot be discovered in treatment confined to one matter only--that being the only
matter with which the authority can and does deal. Thus a Federal statute dealing only with inter-
State trade and commerce cannot discriminate against that trade and commerce. If a Commonwealth
law of trade and commerce was a law with respect to both inter-State and intra-State trade and
commerce, and discriminated against the former, no question of discrimination could arise from a
legal point of view, because the provisions dealing with intra-State trade and commerce would
simply be invalid, as the Commonwealth Parliament has no power to legislate upon that subject.
They would disappear from the statute, and the alleged discrimination would necessarily disappear
with them. Thus discrimination against inter-State trade can never be a ground upon which a
Federal statute can be held to be invalid.

In the second place, a State Parliament can legislate with respect to both inter-State and intra-State
trade and commerce (James v. The Commonwealth[3]). It may be that such a law in terms
discriminates between the two subjects, and in terms treats inter-State trade and commerce
disadvantageously as compared with intra-State trade and commerce. In my opinion, such a law
would not be rendered invalid by sec. 92 by reason of any such discriminatory provision. This may
seem to be a surprising statement, particularly because in cases dealing with sec. 92 many references
have been made to discrimination as constituting a possible infringement of sec. 92. But there has
been no decision which necessarily depends upon such a proposition so far as State laws are
concerned. Fox v. Robbins[4] is, I think, the only decision of the court against the validity of a State
statute under sec. 92 which can be said to be based upon discrimination as a principle. But the Privy
Council in James v. The Commonwealth[5] has now expressly explained that what the State statute
did in Fox v. Robbins[6] "was clearly inconsistent with the absolute freedom of the border," and has
approved the decision upon that ground. A similar view has been taken of Fox v. Robbins[7] by
Evatt J. in R. v. Vizzard; Ex parte Hill[8]. Discrimination is not the test. The test is to be found in the
answer to the question whether the freedom of inter-State trade is restricted. The latest authoritative
statement is to be found in the decision of the Privy Council in James v. The Commonwealth[9],
where it is said:--"Nor does free necessarily connote absence of discrimination between inter-State
and intra-State trade. No doubt conditions restrictive of freedom of trade among the States will
frequently involve a discrimination; but that is not essential or decisive." The rule is clear--
restriction of freedom of trade and commerce "as at the frontier"[10] is the invalidating
circumstance under sec. 92--not discrimination, though discrimination may be involved in such a
restriction, just as discrimination may result from a preference which is contrary to sec. 99. But it is
the restriction or the preference, as the case may be, and not the discrimination, which is the
invalidating feature. (To avoid misunderstanding it may be mentioned that sec. 99 forbids trade
preference in relation to States or parts of States, and not in relation to the intra-State or inter-State
character of trade.)

Before referring to certain provisions of the Constitution which, unlike sec. 92, do relate to the
subject of discrimination in trade legislation, I think that it is necessary to say something about the
nature of the problem which is raised by the discriminatory administration of a valid law. An
example will be useful to explain precisely what I mean. Differential freight rates on railways are a
very obvious and common method of discriminating in practice against certain trade or commerce.
Such rates are generally to be found as items in intricate and comprehensive schedules. They are
generally prescribed in Australia by departmental by-laws or by orders made by railway
commissioners. The only way to deal with unfair discrimination against districts or States is to bring
about a revision of the rates so as to establish a new schedule. It is, I think, plain that but little
contribution would be made to the practical solution of such a problem as this if a court were to
declare all the rates invalid because they or some of them were based upon a discriminatory
principle, or if a court were to declare invalid the rates which were regarded as unfair to certain
trade, for example, inter-State trade. The only result of such a declaration by a court would be that
there would be no rates applying to any goods or any routes in the one case, or, in the other case, no
rates provided for the trade of the injured party. The result would certainly not be that either all
persons in the one case, or the injured persons in the other case, could get their goods carried for
nothing. The problem presented by discriminatory legislative provisions or discriminatory
administrative practices in relation to railway rates cannot be dealt with by a court unless the court
has the power to vary the rates as it thinks proper and to prescribe a new schedule of rates. But this
kind of work cannot be done by any court acting upon legal principles. The problem is not one
which can be solved otherwise than by the adoption of some economic, commercial, financial or
other policy. This is the sort of work which the Inter-State Commerce Commission does in the
United States of America and it is almost a necessary incident of a fully developed Federal system. I
have taken railway freight rates as an illustration. Similar observations apply to a transport licensing
system. A consideration of the carefully thought out and reasoned decisions of the Transport
Regulation Board which have been placed before the court will demonstrate the nature of the
functions of such a tribunal. Such a tribunal must adopt a policy, either its own policy or a policy
prescribed by a statute or by a government. Judicial qualities are very desirable in the persons who
perform such functions, but the work is not judicial work in the sense of interpreting and applying
merely legal principles. Such a body must, subject to its statute, provide its own principles or take
them from some other source.

The Commonwealth Constitution recognizes that State laws or administrative decisions are not
made invalid simply because they discriminate against the trade of, or against trade with, another
State. In 1900 motor traffic was negligible and inter-State motor traffic was unknown as an element
in trade and commerce. But it was then recognized that problems of discrimination might arise,
particularly in connection with railways. The Constitution accordingly made special provisions for
the purpose of dealing with discrimination in relation to State railways. Before examining the
sections which contain these provisions and other provisions relevant to the question under
consideration, I wish to make it clear first, that, for the purpose of this case, the important thing is
that these provisions clearly assume that discriminatory State railway legislation is not, because it is
discriminatory in character, therefore invalid as contravening sec. 92 or any other provision of the
Constitution. Secondly, the Constitution actually prevents the invalidation by Federal legislation or
Federal action of certain discriminatory State railway legislation. It does not operate by giving
authority to the Commonwealth to preserve such legislation as if it were prima facie an infringement
of the Constitution requiring some special action to make it valid. On the contrary, the Constitution
operates in relation to this matter by preventing any interference with such legislation by Federal
action. Thirdly, these provisions place a limitation upon Federal legislative power in relation to
inter-State trade and commerce as carried on by means of railways. They leave unimpaired the
possible scope of Federal legislation for or in relation to such trade and commerce carried on by
other means, such as ships, motor vehicles, or aircraft.

The provisions of the Constitution upon which I base the reasoning which leads to the conclusion
stated are the following:--

Sec. 101: "There shall be an Inter-State Commission, with such powers of adjudication and
administration as the Parliament deems necessary for the execution and maintenance, within the
Commonwealth, of the provisions of this Constitution relating to trade and commerce, and of all
laws made thereunder."

Sec. 102:"--The Parliament may by any law with respect to trade or commerce forbid, as to
railways, any preference or discrimination by any State, or by any authority constituted under a
State, if such preference or discrimination is undue and unreasonable, or unjust to any State; due
regard being had to the financial responsibilities incurred by any State in connection with the
construction and maintenance of its railways. But no preference or discrimination shall, within the
meaning of this section, be taken to be undue and unreasonable, or unjust to any State, unless so
adjudged by the Inter-State Commission."

Sec. 103--providing for the appointment and tenure of members of the Inter-State Commission.

Sec. 104: "Nothing in this Constitution shall render unlawful any rate for the carriage of goods upon
a railway, the property of a State, if the rate is deemed by the Inter-State Commission to be
necessary for the development of the territory of the State, and if the rate applies equally to goods
within the State and to goods passing into the State from other States."

I deal with these sections in turn.

Sec. 101.--The Inter-State Commission is not a legislative body. It cannot make laws. It adjudicates
concerning laws and administers those laws. It executes and maintains those laws. Those laws are
the provisions of the Constitution relating to trade and commerce, and all the Federal laws made
under such provisions. The functions of the commission are limited by the words "within the
Commonwealth." Thus the commission cannot deal with foreign trade outside the Commonwealth.
The outstanding provision of the Constitution with reference to trade and commerce is sec. 51 (i.)
which empowers the Commonwealth Parliament to make laws with respect to inter-State trade and
commerce. This provision is limited by sec. 92 (James v. The Commonwealth[11]). Sec. 92 does not
authorize the making of any laws. It prevents the making of any laws which interfere with the
freedom of inter-State trade and commerce. But sec. 92 is, as already explained, not a completely
self-executing provision. It may operate to invalidate Federal or State statutes, but it cannot, of its
own force, deal with cases of, e.g., discrimination in the administration of valid legislation. If sec.
92 is to be fully operative, it needs an administrative organization to deal with and to correct
interferences with the freedom of inter-State trade and commerce which are the result of
administrative action under legislation which is not itself an infringement of sec. 92. The Inter-State
Commission is that administrative organization, but it cannot function unless there are laws for it to
"execute and maintain."

The Commonwealth Parliament can, under sec. 51 (i.), make laws with respect to inter-State trade
and commerce. Under this vitally important power the Commonwealth Parliament may pass laws to
protect the freedom of inter-State trade and commerce and so really to give full effect to sec. 92. If
the Commonwealth Parliament passed such a law and created an Inter-State Commission, the statute
would confer defined powers on the commission. Under a suitable statute the commission could be
given power to adjudge that acts of State administration were inconsistent with the constitutional
freedom of inter-State trade and commerce, and power, as a matter of administration, to substitute
for State decisions its own decisions in accordance with the will of the Commonwealth Parliament
as declared in the Federal law. I refer again to the illustration of discriminatory railway rates. Sec.
101 (subject to the limitations in that case of sec. 102) contemplates legislation enabling the Inter-
State Commission to prescribe fair rates for inter-State rail transport, thus effectively dealing with
the problem with which, as I have already shown, a court cannot deal. A court would not really deal
with such a problem by using the only methods available to a court, such as declaring some statute
or regulation invalid or declaring that some administrative action was ineffective. Curial action
could only "create a blank." It could not substitute other provisions for any provision which it
declared to be invalid. The Constitution therefore does not look to any court to deal with this
particular problem. It looks to Federal legislation, administered by the Inter-State Commission. So
also, in the case of transport regulation, the Commonwealth Parliament can legislate with respect to
inter-State transport. Such legislation would be legislation with respect to inter-State trade and
commerce (James v. The Commonwealth[12]), but would not necessarily be restrictive of the
freedom of inter-State trade and commerce[13]. Indeed, the Commonwealth Parliament could pass a
statute, limited to inter-State transport, on the general lines of the Victorian Transport Regulation
Acts. The Inter-State Commission or some other body could be empowered to grant licences in
respect of inter-State transport. These licences could authorize inter-State carrying notwithstanding
any State statute or any action of a transport regulation board or other authority under a State
statute. Appropriate legislation would be effective by virtue of the Commonwealth Constitution,
secs. 51 (i.), 101 and 109. It is by such means that, when the Commonwealth Parliament is satisfied
that the necessity arises, the freedom of inter-State trade and commerce can be protected against
interference under valid State legislation such as the Transport Regulation Acts.

The practical difficulty in securing the freedom of inter-State trade does not arise mainly from the
risk of invalid legislation. Such legislation, when detected, is of no effect. The real difficulty is to be
found in all kinds of differentiating treatment in the course of the administration of perfectly valid
State statutes. The statutes are valid, but they may be used, as is alleged to be the case here, for the
purpose of making many varieties of discrimination against, and creating disadvantages affecting,
traders associated with other States. Administrative authorities and officers need not, generally
speaking, give any reasons for what they do, and a court cannot possibly deal with an administrative
policy which just happens to lead to the position that "no one from another State need apply." A
court can give a remedy for a legal wrong such as trespass. A court can declare that an act is not
authorized by a statute. It may suspect that a mere refusal to issue a licence is inspired by the fact
that an applicant comes from the wrong side of the Murray River. But, even if this is proved, the
court cannot issue a licence under an Act such as the Transport Regulation Act. A court may believe
that certain railway rates are essentially discriminatory against another State, but the court cannot
construct a new schedule and make it operative. The Inter-State Commission, acting under
appropriate Federal statutes, is expressly designed to deal with just such problems by "executing and
maintaining" Federal statutes.

Sec. 102.--This section is most important in relation to the contention raised in this case that State
legislation is necessarily bad if it discriminates against inter-State trade and commerce. The terms of
the section conclusively show that this is not the case.

The railways of Australia are almost entirely State-owned. At the time of federation they were, with
shipping, the principal means of carrying on inter-State trade and commerce. Inter-State shipping
was placed completely within the power of the Commonwealth Parliament by sec. 98 of the
Constitution. The same section provides that the power of the Parliament to make laws with respect
to trade and commerce (i.e., in the case of inter-State trade and commerce) should extend also to
railways the property of any State. It was plainly considered not to be wise or proper to leave this
latter power without some special limitation for the purpose of fairly protecting State interests--a
limitation which was not necessary in the case of shipping, which was not State owned.
Accordingly, sec. 102 imposes limitations upon Federal correction of discriminatory State railway
legislation or administration. It is true that the section provides that the Parliament may, by any law
with respect to trade and commerce (inter-State trade and commerce), forbid railway preferences or
discriminations by a State or by a State authority. But the object of sec. 102 is not to confer this
power, which exists in relation to all inter-State trade and commerce, whether carried on by railways
or not, under sec. 51 (i.). The object of sec. 102 is to limit that power. The power of forbidding
railway preferences or discriminatïons is limited in three ways:--(1) The preference or
discrimination must be undue and unreasonable, or unjust to some State. (2) Due regard must be had
to the financial responsibilities incurred by the discriminating or preferring State in connection with
the construction and maintenance of its railways. (3) It is for the Inter-State Commission, and not
for the Parliament itself, to determine, in the case of State railways, whether any preference or
discrimination is, within the meaning of the section, undue and reasonable, or unjust to any State.

These three limitations apply only in the case of railways controlled by a State, directly or through a
State authority. They do not apply in the case of other forms of inter-State transport where the
Commonwealth Parliament (so far as the Constitution is concerned) can make up its own mind as to
what ought to be done without concerning itself whether any State regulation of the matter is undue
or unreasonable or unjust to a State; without considering the finances of a State; and, if Parliament
thinks proper, without any action by the Inter-State Commission, though, instead of legislating
directly and in detail upon such matters, the Commonwealth Parliament could, if it thought proper,
give the administration of a general statute to the commission.

The significant feature of sec. 102 for the purposes of this case is that the section clearly shows that
discriminatory State railway legislation or administration is not in itself an infringement of the
Constitution. If it were so the terms of sec. 102 would, as to such discrimination, be completely
inappropriate. The section is not dealing with invalid State legislation or with statutes that do not
exist in law. It is dealing with discriminatory statutes that are valid, and it is dealing with them in a
very special way because they are valid, and because they relate to most important financial
interests of the States. The section deals with both legislative and administrative discriminations
which, unless corrected, will operate unduly, unreasonably or unfairly. The section specifies the
means of correction, namely, (1) a Federal trade and commerce law (passed under sec. 51 (i.) and
sec. 98); (2) an adjudication by the Inter-State Commission that the preference is undue and
unreasonable or unjust to a State.

It is only when this process has been followed that a railway discrimination can be prevented. It can
be prevented on the ground that it is a discrimination of a particular kind, forbidden by the
Commonwealth Parliament (not by the Constitution itself), and adjudged by the Inter-State
Commission to be of that kind. The section provides a special means of dealing with discriminating
railway laws which would be foolish and unnecessary unless such laws are valid. As already
mentioned, this section also makes it possible to deal effectively with administrative discrimination.
I have referred particularly to discrimination because it is discrimination which is important in this
case, but what I have said applies also to undue etc. preference by a State in connection with
railways.

Sec. 103, as before mentioned, provides for the appointment and tenure etc. of members of the
Inter-State Commission.

Sec. 104 is as follows: "Nothing in this Constitution shall render unlawful any rate for the carriage
of goods upon a railway, the property of a State, if the rate is deemed by the Inter-State Commission
to be necessary for the development of the territory of the State, and if the rate applies equally to
goods within the State and to goods passing into the State from other States."

"Goods within the State" may be carried either intra-State or to another State: "goods passing into
the State from other States" is a phrase which describes the rest of inter-State trading transport.

This section introduces a further limitation upon the power of the Commonwealth Parliament. The
Commonwealth Parliament could itself, under sec. 51 (i.) and sec. 98, fix railway rates for inter-
State trade and commerce if it thought proper to do so. (The limitations imposed by sec. 102 relate
only to the forbidding of preferences and discriminations by States and State authorities and not to
the general subject of the fixing of rates by the Commonwealth Parliament.) Sec. 104 operates to
prevent the Commonwealth Parliament from making certain goods rates unlawful either by direct
declaration that they are unlawful or by fixing a different rate as the rate to be applied. The rates
which are so protected are such as the Inter-State Commission deems to be necessary for the
development of the territory of a State. But such rates must be applied equally to inter-State and
intra-State trade and commerce--they must not be discriminatory. If sec. 92 per se invalidated
railway rates which discriminated against inter-State trade and commerce, the final clause of the
section would have been quite unnecessary.

The conclusion which follows from all those considerations is that neither discrimination in the
terms of a State statute against inter-State trade and commerce, nor discrimination against such trade
and commerce in the administration of a valid State statute, in itself constitutes an infringement of
sec. 92 of the Constitution.

For the reasons stated I am of opinion that even if it is clearly established that the decisions of the
Transport Regulation Board have discriminated against the plaintiff because it is a company
engaged in inter-State trade and commerce, or that a different principle has been applied by the
board in dealing with inter-State applications as compared with intra-State applications, the
plaintiffs have no cause of action which is cognizable in a court. In my opinion the plaintiff's action
should be dismissed.

Rich J.

In the state of current decisions I think it is unnecessary to overlay what has there been said and I
shall state very briefly the conclusion I have arrived at.

The Privy Council refused special leave to appeal from O. Gilpin Ltd. v. Commissioner for Road
Transport and Tramways (N.S.W.)[14] and Duncan and Green Star Trading Co. Pty. Ltd. v.
Vizzard[15]. Gilpin's Case[16] and R. v. Vizzard; Ex parte Hill[17] were applied by this court in
Duncan and Green Star Trading Co. Pty. Ltd. v. Vizzard[18]. The reasoning in R. v. Vizzard; Ex
parte Hill[19] appears to have been accepted by the Privy Council in James v. The
Commonwealth[20], which also mentions Willard v. Rawson[21] without disapproval. The statute in
the present case is of the same type as those in the cases referred to and I am unable to see that what
are said to be differences serve to distinguish this case from the decisions I have cited.

The argument on behalf of the plaintiff company rested on the manner in which the board and the
Executive Government had administered the licensing provisions of the Act. Elaborate proof was
attempted of a discrimination in favour of intra-State carriers, or, as they appear to be called, by a
revival of an ancient term, "hauliers." The evidence does not disclose on the part of the authorities
any design to obstruct the flow of goods across the border or to increase the movement of goods
within the State at the expense of traffic across the boundaries. In drawing a line between the kind
of case in which a licence ought on the merits to be granted and a case in which it should be refused
for long-distance haulage, it seems to have been found convenient to take carrying into and from
New South Wales and South Australia as a description. The suit seeks injunctions and declarations
of right on the basis that by a discrimination the authorities have set the plaintiff company at liberty
to operate goods' vehicles, without a licence. I do not say that, if an applicant for a licence could
prove that his licence was refused simply because he was an inter-State carrier, he would be without
remedy by way of mandamus or the like. But before he can carry he must obtain a licence. I cannot
see how this suit can succeed upon the facts proved.

In my opinion the suit should be dismissed.

Dixon J.

The purpose of this action is to obtain relief in some form or other from the application to the
plaintiff's business of the Transport Regulation Acts. The business consists in, or at any rate
includes, carrying goods by motor trucks between Melbourne and places in the Riverina district of
New South Wales.

The legislation expressly says that no one may carry goods for hire or reward or in the course of
trade by a motor vehicle upon a Victorian highway unless the motor vehicle is licensed for the
purpose by the Transport Regulation Board (secs. 5, 23, 24 and 45 of Act No. 4198). The board was
constituted about three years ago and, upon taking up its duties, it granted licences of a temporary
character to allow carrying to go on while the applications for full licences were considered. The
temporary or provisional licences were of two kinds. Some were granted under a discretionary
power; others under a provision conferring upon those whose vehicles had been carrying goods
since a time before 29th August 1933 a right to a licence up to 31st December 1934. Until it was
able finally to dispose of an application for a full licence, the board granted successive renewals of
the provisional or temporary licence in respect of the vehicle. By this means the plaintiff remained
licensed until 29th January 1936 for about twenty-seven vehicles in respect of the Victorian portion
of routes extending into New South Wales. Long before that date, however, the board had given its
decision upon the plaintiff's application for full licences. On 13th June 1935 it announced its
determinations in respect of all applications for licences for carrying goods from Melbourne over
Victorian routes to places in the Riverina. Speaking generally, it decided that none should be
granted. Licences for some eighty-three vehicles, including the plaintiff's twenty-seven, accordingly
were refused. In the course of dealing with applications by carriers whose routes were confined to
Victoria, the board had declared the principles upon which it would act in granting or refusing
licences. The basal principle that it had laid down for its own guidance was that freight should not
be diverted from the railways of the Victorian commissioners by allowing motor vehicles to
compete, unless it appeared that some substantial advantage would be gained by the public or some
section of the public if organized motor transport between two places were continued or established.
The refusal of all licences for carrying into and from the Riverina upon through journeys with
Melbourne as a terminus seems to have been the consequence of applying this principle to the
conditions affecting the Riverina. The chief consideration was the existence in that district of the
railways of the Victorian commissioners which run respectively from Yarrawonga to Oaklands,
Echuca to Deniliquin, Echuca to Balranald, and Murrabit to Stony Crossing. Under a special
provision of the board's Act a licence must be granted for a vehicle carrying goods solely within a
radius of twenty miles from the place of business of its owner. In virtue of licences of this kind,
vehicles could ply into New South Wales from the many Victorian border towns. Moreover, the
board took the view that it ought to grant such or similar licences to vehicles coming from New
South Wales into Victoria for a distance of twenty miles or less. Thus goods might be carried from
New South Wales to Victorian railheads or indeed to the terminals, within twenty miles of the New
South Wales border, of routes in respect of which the board might see fit to grant licences for goods
vehicles. But beyond this the board considered it ought not to go, and it would not sanction the
carriage of freight by motor vehicle on a through journey from the Riverina to Melbourne. Before
the board's decision was given it had made some progress in the work of determining how far the
motor carrying business should be allowed in other parts of Victoria, work which the board
performed according to geographical divisions of the State. At this point, however, the Government
intimated its intention of bringing down an amendment of the statute and requested the board to stay
its hand. The result was that it withheld any further determination of controversial applications and
extended all temporary licences. At length, on 2nd October 1935, Act No. 4298 came into
operation. It contained a provision that no decision of the board granting, refusing, suspending or
revoking a licence should have any force or effect until the decision had been reviewed by the
Governor in Council. Within six months of the board's decision the Governor in Council was
empowered to approve, to disapprove or to make any determination that the board might have
made. The Act also provided that, if approval were given to the board's refusal of a licence to a man
holding a temporary licence in succession to a previous licence for a vehicle in use before 29th
August 1933, then the decision should not take effect for six months after the refusal, and the
temporary licence should be deemed extended for that period. In order to give applicants with
whom it had already dealt the benefit of these amendments, the board took steps to obtain further
applications from them. The plaintiff, among others, applied again, and, on 4th December 1935, its
applications in common with other Riverina applications were again refused by the board. This
time, of course, the board's refusal had no effect until the Governor in Council had dealt with it.
But, on 24th January 1936, his approval was given to the refusal of all Riverina licences. This
meant, substantially, that after 29th July 1936 the plaintiff would be without the protection of a
licence.

The writ was issued on 3rd August 1936. The claim is that to enforce the decision of the Victorian
Government would involve a restriction of the freedom of trade, commerce and intercourse among
the States. The claim is not based solely upon the matters I have briefly stated. Much reliance is
placed by the plaintiff upon the very different steps taken or authorized in reference to carriers of
goods by motor vehicle upon routes confined to Victoria. These steps are further contrasted with the
treatment of carriers plying to South Australia.

It appears that the Government's decision upon the Riverina cases was given before the
determinations of the board upon purely Victorian cases were considered and that, before the
Government dealt with them, an interval elapsed during which the board sought for its guidance
some intimation of the course the Executive would take. On 4th March 1936 the Premier, by a
memorandum, communicated to the board the decision of the Government. The memorandum was
divided into two heads. The first said that the decision of the board in the Riverina cases should
stand. The second was to the effect that carriers of goods by motor who immediately before 29th
August 1933 were providing reliable, efficient and regular services should receive licences for the
routes upon which they were then running. This ruling the board understood as applying only to
routes the terminal points of which lay within Victoria, and a little later the Government confirmed
this view by directing the refusal of all licences for the carriage of goods upon routes extending into
South Australia. Licences for a radius of twenty miles, however, were to be continued on the
borders of both New South Wales and South Australia. The board was required to apply to
particular cases the principles expressed by the memorandum and proceeded to do so, a course
wisely adopted to avoid a divergence between the decisions of the board and of the Governor in
Council.

The plaintiff had made some other applications which I have not thought it necessary to describe.
These were refused and the refusal was confirmed on 27th July 1936.

In applying the Government's principle, the board necessarily granted a very large number of
licences which otherwise it must have refused. For that principle meant the complete desertion of
the view laid down by the board, the view which it had applied to the Riverina cases. The practical
result was that up to the borders of New South Wales and South Australia the carriage of goods by
motor vehicles, both in competition with the railways and otherwise, was licensed wherever before
29th August 1933 it had been carried on and the service or trade or a succession therein had been
maintained. But, apart from carriers licensed for a twenty-mile radius, no through journey was
permitted over either border. Thus, for the carriage of goods exclusively within the State a facility is
widely allowed which is denied if the border is crossed. Why the Government persisted in drawing a
distinction in the treatment of inter-State transport and transport within the State does not appear.
No one supposes that it was for the purpose of hindering the marketing of wool or other
commodities across the border. But the plaintiff relies upon the presence of three elements which are
independent of purpose. There is, first, a consequence to those engaged or concerned in the trade or
business of carrying. If they carried inter-State they cannot continue to do so. If their routes were
confined to Victoria, they are allowed to go on. There is, secondly, the consequence to consignors
and consignees. They may in very many places choose between rail and road and have through
carriage by road but only if the goods are consigned in Victoria to a destination also in Victoria.
There is, thirdly, the fact that, in deciding to licence those carrying goods immediately before 29th
August 1933 and continuing to do so, the Government adopted the administrative principle of
excluding all carrying upon inter-State journeys.

The existence of these features in the present case is said to distinguish it from R. v. Vizzard; Ex
parte Hill[22], O. Gilpin Ltd. v. Commissioner for Road Transport and Tramways (N.S.W.)[23],
Bessell v. Dayman[24] and Duncan and Green Star Trading Co. Pty. Ltd. v. Vizzard[25]. The
decisions in those cases appear to me completely to establish the validity of legislation taking
substantially the same form as the Victorian Transport Regulation Acts. In particular they decide
that the prohibition of carrying goods by motor vehicle, except under licence, involves no
impairment of the freedom of trade, commerce and intercourse among the States, although carriage
of goods upon a journey across the border is included and although there is a full discretion to grant
or withhold a licence. I remain quite unable to agree in that conclusion, but I should have thought
that it covered the present case and that the elements relied upon by the plaintiff could make no
difference. It is better that I should not attempt any restatement for myself of the principles upon
which the decisions rest. Probably my grasp of those principles is imperfect and, as a rule, it is
neither safe nor useful for a mind that denies the correctness of reasoning to proceed to expound its
meaning and implications. But I am called upon to say whether, according to the proper application
of the decisions to the facts, the plaintiff has any title to relief from the operation of the State law or
the consequences of its administration. Simply to adhere to the main conclusion established by the
decisions is hardly enough for the discharge of the task; some recourse to the reasoning behind it is
necessary. It is, however, clear. I think, that one important step in that reasoning is the adoption of
the view that the use of motor vehicles for the carriage of goods from one State to another, though
an incident of trade, commerce and intercourse among the States, is not in itself within the
protection of sec. 92. Something more must be found than a prohibition of, or a restraint upon, the
use of motor vehicles in the carriage of goods before freedom of inter-State trade and intercourse is
infringed upon; consequently a general prohibition subject to a discretion to allow exceptions is
valid.

I have endeavoured to state with as much accuracy as the need for brevity allows the circumstances
of the present case so far as the plaintiff relies upon them, because the question is whether they
provide the something more. I find it difficult to see how they can. What prevents the plaintiff from
carrying goods across the River Murray in the course of trade between Victoria and New South
Wales is the prohibition contained in sec. 23 of Act No. 4198 and the penalty imposed by sec. 45.
These sections, with the definitions in sec. 5, penalize the carrying of goods by motor vehicle upon
a highway for hire or reward or in the course of trade unless it be licensed. It is this prohibition that
prevents all other persons carrying goods over the border on a through journey. It is the same
provision that indirectly operates upon intending consignors of goods and prevents them from
sending their goods by motor vehicle into or out of Victoria. The degree to which motor transport of
goods within the State is allowed or restricted, while across the border it is wholly disallowed, may
have a bearing upon the relative facility with which the two kinds of transaction may be carried
through. But the presence of such a facility for intra-State trade can scarcely operate to increase the
restriction upon inter-State trade, unless it provides an incentive for the diversion of trade. The
principle cannot be that "true freedom is to share all the chains our brothers wear." I find it hard to
believe that the application of sec. 92 depends on the question whether the existence within a State
of a particular facility, the denial of which to inter-State trade is otherwise lawful, does provide an
incentive for increasing domestic trade at the expense of inter-State trade. I feel some uncertainty as
to the extent to which the decisions do authorize an inquiry into matters that for myself I would not
regard as criteria of the application of sec. 92. But, as it must now be conceded that secs. 23 and 45
validly operate upon the carriage of goods in the course of inter-State trade, the facts must supply
some other ground of relief against the consequences. All I can say is that I have been unable to
discover in the facts I have stated any legal basis for granting to the plaintiff in the present action
any form of relief whether by way of injunction, declaration of right, or otherwise.

It follows that the action ought to be dismissed.

Evatt J.

In this action, the plaintiff, a company engaged in the business of carrying goods between New
South Wales and Victoria, seeks two declarations, the substance of which may be thus stated: (1) a
declaration that Part II. of the Transport Regulation Act of the State of Victoria is inconsistent with
sec. 92 of the Constitution of the Commonwealth, at least so far as Part II. operates to prevent the
plaintiff from operating with unlicensed vehicles its business of carrying goods on inter-State
journeys: (2) a declaration that, in relation to licensing of commercial motor vehicles, the
administrative policy of the Victorian Transport Regulation Board and the Governor in Council of
that State, and the enforcement of that policy by prosecution in cases where vehicles have been
operated without licences, involves a discrimination against inter-State trade contrary to sec. 92 of
the Commonwealth Constitution.

The claim to the first declaration is completely answered by binding authorities. In R. v. Vizzard; Ex
parte Hill[26], this court held that the State Transport (Co-ordination) Act of the State of New
South Wales was valid, in spite of the fact that, within that State, it operated adversely upon the
business of a carrier whose motor vehicles were being operated without licence, but were also
engaged exclusively in the carriage of goods between Victoria and New South Wales. The New
South Wales statute established a scheme for the co-ordination of all transport within the State. The
essence of the scheme was to limit uneconomic competition between the instruments of transport, so
as to obtain a more efficient and satisfactory conduct and control of the service of transporting
goods within the State, whether in the course of purely domestic or inter-State journeys. As a
necessary part of the scheme, licences to operate were granted or refused according to the discretion
of an administrative body. Subsequently, in the cases of O. Gilpin Ltd. v. Commissioner for Road
Transport and Tramways (N.S.W.)[27] and Duncan and Green Star Trading Co. Pty. Ltd. v.
Vizzard[28], this court followed and applied the principle of R. v. Vizzard[29], and, in December
1935, the Privy Council refused special leave to appeal from Gilpin's Case[30] and Duncan's
Case[31]. Most recently, in James v. The Commonwealth[32], the Privy Council definitely accepted
the actual decision in R. v. Vizzard[33] as having correctly applied sec. 92 of the Commonwealth
Constitution. In the same case, the Privy Council also approved of important statements of principle
contained in the judgment which I delivered in R. v. Vizzard[34], where I attempted to show, not
only that the Commonwealth was bound by sec. 92, but also that both the Commonwealth and the
States possess a wider sphere of legislative jurisdiction over inter-State trade than would have been
permissible upon the adoption of some of the reasoning used in McArthur's Case[35].
For the purpose of applying sec. 92 of the Constitution, no valid distinction can be drawn between
Part II. of the Transport Regulation Act of the State of Victoria and the New South Wales Act
declared valid in the cases mentioned above. Each Act aims at the co-ordination throughout the
State of all transport facilities, and each carries out the statutory scheme by licensing commercial
motor vehicles. In each case, the Act also aims at the reasonable protection of the railways as
instruments for the carriage of goods both intra-State and inter-State. In each case, moreover, it is a
necessary consequence of the statutory scheme that particular operators must be seriously affected in
their business activities, and also that, in the absence of the necessary State licence, vehicles which
have been engaged solely in journeys from within one State to points in another State will be unable
to proceed in the regulating State without penalties being incurred. But R. v. Vizzard[36] finally
establishes that such restrictions do not constitute an infringement of the freedom of inter-State trade
declared by sec. 92. The first part of the plaintiff's claim must fail.

As already stated, the second part of the plaintiff's claim is based solely upon allegations of
discrimination. Evidence was called by both sides in order to prove the facts relative to the transport
policy adopted by the administrative authorities of the State of Victoria.

It is plain that, if State legislation discriminates against inter-State trade and intercourse so as to
prohibit it, it will be invalidated by sec. 92 (Fox v. Robbins[37]; R. v. Vizzard[38]). And, having
regard to the principles of the judgment delivered by Lord Atkin for the Privy Council in James v.
Cowan[39], I am clearly of opinion that, if the executive or administrative, as distinct from the
legislative, organ of a State sets up hostile discriminations inconsistent with the freedom declared by
sec. 92, the operation of sec. 92 must at once be attracted, for the Constitution cannot be mocked by
substituting executive for legislative interference with freedom[40]. Difficulties may sometimes
arise in moulding a suitable remedy in cases where sec. 92 is applied to executive action which is
challenged upon the ground that it carries out a policy of hostile discrimination against inter-State
trade. I think that such difficulties need not be elaborated and can easily be exaggerated. In some
circumstances, the result of the application of sec. 92 may be to deprive the Government concerned
of a defence to an action of tort (James v. Cowan[41]); in others, it may be merely to annihilate or
avoid a decision or determination of an administrative tribunal. But I am unable to accept the
proposition that discrimination by the executive or administrative authorities of a State can be
remedied only by recourse to sec. 102 of the Constitution or by other legislation proceeding from
the Commonwealth Parliament. Sec. 102 impliedly permits of the practising of certain
discrimination on the part of the States. But I think it is erroneous to infer that, apart from sec. 102,
the executive organs of a State possess a charter to close the inter-State borders so that this court is
powerless to intervene. It would be a strange thing if the Parliament of the Commonwealth, which
for sixteen years has sought to confer upon itself an entire immunity from the declaration of
freedom in sec. 92, were made the sole protector of the citizens against infringement of that section
by hostile discrimination on the part of the executive or administrative organs of a State. It is upon
this court, and not upon the Commonwealth Parliament, that the primary duty devolves of guarding
against all infringement of sec. 92, whether by the States or by the Commonwealth itself.

However, it has to be remembered that, whenever discrimination alone is relied upon in order to
invalidate either legislation or executive action by reason of conflict with the overriding command
of sec. 92, it must be proved that the discrimination is in relation to "freedom as at the frontier" or
"goods passing into or out of the State" (James v. The Commonwealth[42]). These are the phrases
used by Lord Wright M.R., and they indicate that, before there can be discrimination contrary to sec.
92, there must be satisfactory proof that the authority of the State or Commonwealth is being
exerted against inter-State trade, the discrimination imposed being by reference to the fact that
goods or persons have passed or are passing or will pass into or out of a State. Such is the
discrimination which is forbidden by sec. 92. In truth, such discrimination is not so much an
independent ground for the application of sec. 92; rather, it provides conclusive evidence of the fact
that there has been a forbidden interference with "freedom as at the frontier."

In the present case, the particulars of the alleged discrimination are specified under three heads in
par. 10 of the amended statement of claim, and they will be dealt with in that order.

(1)

The first allegation is that the transport board of the State of Victoria refused to grant licences for
vehicles carrying inter-State, while granting a large number of licences for vehicles carrying goods
solely within the State of Victoria. But there is nothing in this allegation to warrant the inference
that the State of Victoria was pursuing any policy of restricting or prohibiting the trade between
itself and its neighbouring States. The board's refusal of licences to carry goods inter-State by motor
may have been due, and in fact the evidence shows that it was due, to the belief that the inter-State
trade would be facilitated, not hindered, by the policy of bringing goods for carriage inter-State into
the railway system at suitable points within and without Victoria, so that the railway and motor
transport would together handle the aggregate haulage of inter-State goods more efficiently. No
doubt, particular individuals would or might be disadvantaged by such a policy, but that is a
necessary feature of any scheme of co-ordination.

(2)

The second allegation is that the board refused to apply to applications for licences for inter-State
vehicles the same principles as were applied by it in the consideration of applications in respect of
vehicles carrying solely within Victoria. This allegation is based upon the fact that the transport
board refused applications for licences made by the plaintiff and other carriers carrying inter-State,
upon the principle that, in the circumstances, the railways and local hauliers could more
conveniently dispose of the traffic; whereas in its subsequent consideration of applications for
vehicles carrying within the State of Victoria the Governor in Council decided that, under stated
conditions, it should have regard to the desirability of recognizing certain rights or claims existing
as at the commencement of the Transport Regulation Act as well as to the general principle of co-
ordinating with railway services. But sec. 92 does not guarantee a continuing or absolute uniformity
at every stage in the administration of a complicated licensing system, which of necessity must be
capable of adaption as new problems and unforeseen difficulties arise. In the present case, the
board's primary decision to reject the applications of the plaintiff and other operators was based
upon principles which were in no way impeached in these proceedings. Next, all the decisions of the
board in respect of inter-State operators were confirmed by the Governor in Council. It was
subsequently, and, so far as appears, independently, that the Governor in Council laid down the
further heads of policy which were applied to applications for intra-Victorian licences. The unreality
of the plaintiff's claim that there was discrimination, even as against vehicles as distinct from the
trade, is illustrated by the fact, which is sufficiently proved, that, if the policy subsequently adopted
by the Governor in Council had been originally applied by the board in its primary decision, the
plaintiff would, at the most, have received licences in respect of two only of its twenty-seven
applications. It is also illustrated by the fact that, on the plaintiff's subsequently renewing its
applications, they were refused, partly at least, upon the ground that, by reason of certain conduct,
the plaintiff was regarded by the board as not a fit and proper person to be granted licences.
(3)

The third allegation of discrimination is that the defendant board refused all licences for vehicles
carrying goods inter-State for the reason that such vehicles were carrying, or intended to carry,
goods inter-State. I consider that this allegation, if true, would alter the legal situation. But the facts
entirely negative the allegation. The applications were refused, not because the vehicles were
carrying, or intended to carry, goods inter-State, but because, in the board's opinion, the carriage of
goods inter-State was being provided for already and in a more efficient manner by co-ordinating
the services of the railway systems of the two States with local motor transport from all points in the
Riverina to appropriate railway terminals. It is of significance that, with the consent of the
Parliament of New South Wales, Victoria has been allowed to extend its railway system to
considerable distances within the State of New South Wales, the gauge of these important border
railways being the Victorian gauge, and the railways, so far as they are within New South Wales,
being entirely controlled and managed by the Victorian railway administration. This important
policy was carried out by arrangement between the two States for the very purpose of encouraging
inter-State trade by facilitating the passage of goods across the State boundaries to the market
deemed most suitable. Certainly, the desirability of ensuring a reasonable use of the border railways
as instruments for the advancement of inter-State trade is a consideration which is not placed outside
the discretionary powers of bodies whose duty it is to co-ordinate all transport facilities within the
State of Victoria, the trade of which with New South Wales is largely dependent upon such railways.

Although I am of opinion that, in an appropriate case, discrimination of an executive, as well as a
legislative character may be relied upon in order to prove an infringement of sec. 92, I am also of
opinion that, on the facts of the present case, the case of the plaintiff has entirely failed.

The action should be dismissed with costs.

McTiernan J.

The first declaration which the plaintiff claims is in substance that Part II. of the Transport
Regulation Acts of Victoria is contrary to sec. 92 of the Constitution and void. The provisions of
these Acts cannot be distinguished in principle from the State Transport (Co-ordination) Act 1931
N.S.W. which has been declared not to contravene sec. 92 (R. v. Vizzard; Ex parte Hill[43]; O.
Gilpin Ltd. v. Commissioner for Road Transport and Tramways (N.S.W.)[44]; and these decisions
were approved of in James v. The Commonwealth[45]).

Alternatively to the first claim, the plaintiff seeks a declaration that, although it might not be lawful
according to the letter of the Transport Regulation Acts for the plaintiff's vehicles to operate in inter-
State carriage of goods without a licence, the administrative and executive acts of the Transport
Regulation Board and the State of Victoria, which have resulted in the refusal of the plaintiff's
application for licences for its vehicles operating in the inter-State carriage of goods, contravene sec.
92.

From the facts proved the definite conclusion can be arrived at that neither the transport board nor
the Executive Government exceeded their powers under the Acts respectively in refusing the
plaintiff's applications for licences for these vehicles and in approving of the refusal of the
applications. The administrative and executive acts complained of are fully authorized by legislation
which does not itself contravene sec. 92. But, notwithstanding that the refusal of the licences has
presumably a legal basis, the plaintiff says that the transport board and the Governor in Council
have, by the exercise of their powers and discretions under the Acts in the case of the plaintiff's
applications, contravened sec. 92 of the Constitution. To prove that case they rely on the fact that
applications for licences for vehicles operating within Victoria were finally granted, whereas the
plaintiff's applications which were for licences for vehicles pursuing inter-State routes were finally
refused. The result of the refusal of the inter-State applications and the approval of the intra-State
applications is that inter-State trade through Victoria has been made more dependent on the railways
than on the roads. But it is not possible to deduce that the action taken by the transport board and
the Governor in Council in dealing with the inter-State and the intra-State applications, if all the
individual applications are placed in these two classes for the purpose of considering the action
taken in relation to them, has placed any burden, hindrance or restriction on the freedom of inter-
State trade as at the border. There is no interference with freedom of inter-State trade in the relevant
sense of freedom as interpreted by the Judicial Committee in James v. The Commonwealth[46]. "If
it" (trade) "involves sea, railway or motor carriage, relevant Acts operate on it; it is subject to
executive or legislative measures of State or Commonwealth dealing with wharves or warehouses or
transport workers. It must be so subject"[47].

As it is not shown that the freedom guaranteed by sec. 92 has been invaded by the acts of the
transport board and the Executive Government of Victoria, of which the plaintiff complains, it is of
course entirely unnecessary to consider the nature of the relief to which the plaintiff would be
entitled if he had made out his claim for relief. In my opinion there is no tenable ground shown for
the declaration which is sought alternatively to the declaration that the Transport Regulation Acts
themselves are void.

The action should be dismissed.

Action dismissed.

Solicitors for the plaintiff, Alexander Grant, Dickson & Pearce.

Solicitor for the defendants, F. G. Menzies, Crown Solicitor for Victoria.

[1] [1936] UKPCHCA 4; (1936) A.C. 578; 55 C.L.R. 1.

[2] [1933] HCA 62; (1933) 50 C.L.R. 30.

[3] [1936] UKPCHCA 4; (1936) A.C. 578; 55 C.L.R. 1.

[4] [1909] HCA 81; (1909) 8 C.L.R. 115.

[5] (1936) A.C., at p. 617; 55 C.L.R., at p. 46.

[6] [1909] HCA 81; (1909) 8 C.L.R. 115.

[7] [1909] HCA 81; (1909) 8 C.L.R. 115.

[8] (1933) 50 C.L.R., at p. 93.

[9] (1936) A.C., at p. 628; 55 C.L.R., at p. 56.
[10] (1936) A.C., at p. 630; 55 C.L.R., at p. 58.
[11] [1936] UKPCHCA 4; (1936) A.C. 578; 55 C.L.R. 1.
[12] (1936) A.C., at p. 627; 55 C.L.R., at p. 55.
[13] (1936) A.C., at p. 629; 55 C.L.R., at p. 57.
[14] [1935] HCA 8; (1935) 52 C.L.R. 189.
[15] [1935] HCA 43; (1935) 53 C.L.R. 493.
[16] [1935] HCA 8; (1935) 52 C.L.R. 189.
[17] [1933] HCA 62; (1933) 50 C.L.R. 30.
[18] [1935] HCA 43; (1935) 53 C.L.R. 493.
[19] [1933] HCA 62; (1933) 50 C.L.R. 30.
[20] [1936] UKPCHCA 4; (1936) A.C. 578; 55 C.L.R. 1.
[21] [1933] HCA 12; (1933) 48 C.L.R. 316.
[22] [1933] HCA 62; (1933) 50 C.L.R. 30.
[23] [1935] HCA 8; (1935) 52 C.L.R. 189.
[24] [1935] HCA 5; (1935) 52 C.L.R. 215.
[25] [1935] HCA 43; (1935) 53 C.L.R. 493.
[26] [1933] HCA 62; (1933) 50 C.L.R. 30.
[27] [1935] HCA 8; (1935) 52 C.L.R. 189.
[28] [1935] HCA 43; (1935) 53 C.L.R. 493.
[29] [1933] HCA 62; (1933) 50 C.L.R. 30.
[30] [1935] HCA 8; (1935) 52 C.L.R. 189.
[31] [1935] HCA 43; (1935) 53 C.L.R. 493.
[32] [1936] UKPCHCA 4; (1936) A.C. 578; 55 C.L.R. 1.
[33] [1933] HCA 62; (1933) 50 C.L.R. 30.
[34] [1933] HCA 62; (1933) 50 C.L.R. 30.
[35] [1920] HCA 77; (1920) 28 C.L.R. 530.
[36] [1933] HCA 62; (1933) 50 C.L.R. 30.
[37] [1909] HCA 81; (1908) 8 C.L.R. 115.
[38] (1933) 50 C.L.R., at p. 93.
[39] (1932) A.C. 542; 47 C.L.R. 386.
[40] (1932) A.C., at p. 558; 47 C.L.R., at p. 396.
[41] (1932) A.C. 542; 47 C.L.R. 386.
[42] (1936) A.C., at p. 630; 55 C.L.R., at p. 58.
[43] [1933] HCA 62; (1933) 50 C.L.R. 30.
[44] [1935] HCA 8; (1935) 52 C.L.R. 189.
[45] [1936] UKPCHCA 4; (1936) A.C. 578; 55 C L.R. 1.
[46] [1936] UKPCHCA 4; (1936) A.C. 578; 55 C.L.R. 1.
[47] (1936) A.C., at p. 629; 55 C.L.R., at p. 57.

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