D'Emden v Pedder
D'Emden v Pedder | |
---|---|
JJ | |
Case opinions | |
(3:0) attempts by the states to exercise legislative or executive power, in a way that would interfere with the legislative or executive power of the federal government, are, unless expressly authorised by the Constitution, invalid (per curiam) |
D'Emden v Pedder
The case was the first of several in which the High Court applied the
The case is also significant as the first case decided by the High Court involving the interpretation of the Constitution of Australia.[4]
Background to the case
As with the allocation of powers to the
The factual circumstances giving rise to this case began on 31 March 1903 when Henry D'Emden, who was employed by the federal government as the Deputy Postmaster-General for
While agreeing that in fact he had not paid the stamp duty, D'Emden argued that at law he was not obliged to pay the state tax, and made the same basic argument in an appeal to the Supreme Court of Tasmania.[7] That appeal was rejected, and D'Emden appealed to the High Court.
Arguments
Arguments were heard on 24 February 1904. D'Emden was represented by the Attorney-General of Australia, Senator James Drake, who put forward four arguments for D'Emden's case:[8]
- That, in its application to D'Emden, the stamp duty was a tax on the agencies or instrumentalities of the federal government, and was "by necessary implication forbidden by the Constitution";
- That the stamp duty legislation, to the extent that it purported to affect the salary of federal agents, was inconsistent with the federal legislation setting the salary, and was thus invalid under section 109 of the Constitution;[5]
- That the stamp duty legislation, to the extent that it purported to apply to salary receipts from the section 52 of the Constitution,[9]which granted power over the department exclusively to the federal parliament;
- That, to the extent that the stamp duty applied to federal salary receipts, it constituted a tax on the property of the Commonwealth, and was thus prohibited by section 114 of the Constitution.[10]
Drake argued that, because of the similarities between the Australian and United States Constitutions in this respect, it was useful to look at decisions of American courts in
With respect to the second argument, regarding inconsistency, Chief Justice Griffith questioned whether the federal legislation setting D'Emden's salary was not simply intended to have effect "with reference to the local conditions prevailing in the particular State, such as local taxation, house-rent, prices of food and clothing" and so on, to which Drake replied that the stamp duty legislation was in conflict with the federal legislation because the effect was to diminish D'Emden's salary before he received it, unlike the examples Griffith CJ mentioned of things which would affect it after he received it.[8]
On the third argument, Drake argued that, like American courts had done in similar cases, the High Court should look to the substantive effect of the Tasmanian legislation in considering whether it interfered with an exclusive power of the federal parliament. Justice O'Connor asked Drake whether his argument applied to D'Emden because he was an officer of the Department, or merely because he had performed services for the Department, and Drake responded that his reasoning was not based on the person but on the fact that the salary receipt was a departmental record.[8]
The respondent Pedder was a Superintendent of Police in Tasmania, and he was represented by the Attorney-General of Tasmania, Sir Herbert Nicholls. Nicholls conceded that it was a necessary consequence of a federal system of government that there were limits on the powers of the state and federal governments with respect to each other, and that the states "have no power by taxation or otherwise to retard or burden or in any other manner control the operation of the constitutional laws of the Commonwealth Parliament", but argued that such a doctrine should not be taken without limitation, and that the degree of interference should be considered.[8]
Nicholls emphasised that the stamp duty applied to D'Emden personally, as a private citizen: that while D'Emden "earns his salary as an officer, [he] receives and enjoys it as a private citizen", and that the legislation did not infringe the federal parliament's exclusive powers over the Postmaster-General's Department since "in giving the receipt, [D'Emden] is not serving the Commonwealth, but only dealing with it." Nicholls also conceded that if the stamp duty was levied only on agents of the federal government then it would be unconstitutional, but stressed that it was a general tax applying to all persons in Tasmania.[8]
Nicholls then engaged with Griffith CJ in an exchange about the relationship between the Australian and United States Constitutions. Griffith CJ challenged Nicholls to identify any differences between the two which would make the principles from American cases such as McCulloch v Maryland,[2] inapplicable, Nicholls pointing out section 107,[11] which preserves or "saves" the powers of the state parliaments (except for powers given exclusively to the federal parliament). Griffith CJ suggested that there was no material difference between this provision and the Tenth Amendment, but Nicholls argued that section 107 was far clearer, and further suggested that "the contention that the implied powers of the Commonwealth can over-ride State laws seems hardly consistent with it."[8]
Griffith CJ then said:
"The framers of the Australian Constitution had before them decided cases in which certain provisions of the United States Constitution had received definite and settled interpretation. With these cases before them they used in many of the sections of our Constitution almost identical language. Does not this raise a strong presumption that they intended the same interpretation to be placed upon similar words in our Constitution?"[8]
Nicholls agreed, but maintained that as far as the provisions for the relationship between the states and the federal government were concerned, the Australian Constitution was quite different from the United States Constitution.[8]
Judgment
A unanimous opinion was handed down by the court, delivered by Chief Justice Griffith.
After laying out the facts the court promptly rejected D'Emden's fourth argument, that the salary receipt was property within the meaning of section 114 of the Constitution,[10] saying that the section was intended to prohibit state taxes on property per se (the stamp duty was effectively a personal tax).[7] It then proceeded to consider the bulk of the case.
The court found that the legislation governing salary receipts for employees of federal departments (then contained within the Audit Act 1901)[12] was clearly to do with "the conduct of the departmental affairs of the Commonwealth Government", an area over which, under section 52 of the Constitution,[9] was within the exclusive authority of the federal government, and thus was immune from state authority.[7] The court expressed the principle in this way:
"In considering the respective powers of the Commonwealth and of the States it is essential to bear in mind that each is, within the ambit of its authority, a sovereign State, subject only to the restrictions imposed by the Imperial connection and to the provisions of the Constitution, either expressed or necessarily implied... a right of sovereignty subject to extrinsic control is a contradiction in terms. It must, therefore, be taken to be of the essence of the Constitution that the Commonwealth is entitled, within the ambit of its authority, to exercise its legislative and executive powers in absolute freedom, and without any interference or control whatever except that prescribed by the Constitution itself... It follows that when a State attempts to give to its legislative or executive authority an operation which, if valid, would fetter, control, or interfere with, the free exercise of the legislative or executive power of the Commonwealth, the attempt, unless expressly authorized by the Constitution, is to that extent invalid and inoperative."[7]
On the use of United States case law, from which the doctrine had largely been drawn, the court acknowledged that decisions of the Supreme Court of the United States were of course not binding in Australia, but given the similarities between the American and Australian Constitutions, such decisions "may well be regarded... not as an infallible guide, but as a most welcome aid and assistance."[7] The court went on to discuss the method by which the Constitution was formed, at the Constitutional Conventions, and said that "we think... we are entitled to assume – what, after all, is a fact of public notoriety – that some, if not all, of the framers of the Constitution were familiar, not only with the Constitution of the United States, but with that of the Canadian Dominion and those of the British colonies", and that when provisions of the Australian Constitution are in substance the same as those in other constitutions, and those other provisions have been interpreted by courts in a certain way, "it is not an unreasonable inference that [the Australian Constitution's] framers intended that like provisions should receive like interpretation."[7] Griffith CJ , Barton and O'Connor JJ were capable of speaking for at least some of the framers of the Constitution, having each "assisted in the actual drafting of the constitutional documents."[13]
The court then quoted extensively and with approval from the judgment of Chief Justice John Marshall in McCulloch v Maryland,[2] specifically from a passage discussing the ideological basis of taxation, the relationship between the various American states and the Union, and the implications of the Supremacy Clause.[7] The court went on to note that the principles enunciated in that case had been met with approval subsequently in United States cases, and also in cases in the Canadian provinces of Ontario and New Brunswick, and thus rebuffed an argument raised by the majority of the Supreme Court of Tasmania that the doctrine did not have support.[7]
The court rejected another argument raised by the majority of the Supreme Court: that it is necessary in every case to consider whether the attempted exercise of power by a state actually inhibited or interfered with the workings of the federal government, instead deciding that any claimed power which has the potential for such interference will be invalid, and consideration of whether there was actual interference would be irrelevant.[7]
In a final point, the court said that, applying the basic principle of
Consequences
The High Court proceeded to apply the implied immunity of instrumentalities doctrine in a range of cases, many of which also involved taxation and were similarly controversial. In the case of
In the Railway Servants' case,[18] the High Court held that the doctrine worked both ways, that is, it held that the states were also immune from Commonwealth laws, in finding that a trade union representing employees of the Government of New South Wales could not be registered under federal industrial relations legislation.[6]
H. B. Higgins, an opponent of the implied immunities doctrine who would be appointed to the High Court himself in 1906, wrote in response to the decisions in this and several other cases that "The man in the street is startled and puzzled. He sees a public official, enjoying a regular salary in the postal department, paying the Victorian income-tax until federation, and then suddenly exempted from the tax because the post-office has passed over to federal control."[19]
The doctrine was challenged by the appointment of Higgins and Isaac Isaacs to the High Court in 1906, and they regularly dissented from Griffith CJ, Barton and O'Connor JJ in implied immunities cases.[6] The doctrine, along with the doctrine of reserved State powers, would ultimately be overturned in the Engineers' case of 1920.[3]
Writing in 1939,
References
- ^ D'Emden v Pedder [1904] HCA 1, (1904) 1 CLR 91.
- ^ a b c d e f McCulloch v. Maryland 17 U.S. 316 (1819)
- ^ a b Amalgamated Society of Engineers v Adelaide Steamship Co Ltd (Engineers' Case) [1920] HCA 54, (1920) 28 CLR 129., High Court (Australia)
- JSTOR 1326992.
- ^ a b c d Constitution (Cth) s 109.
- ^ ISBN 1-86287-586-3.
- ^ a b c d e f g h i j k D'Emden v Pedder (1904) 1 CLR 91, per Griffith CJ.
- ^ a b c d e f g h i D'Emden v Pedder (1904) 1 CLR 91 at p 93-106.
- ^ a b Constitution (Cth) s 52.
- ^ a b Constitution (Cth) s 114.
- ^ Constitution (Cth) s 107.
- ^ "Audit Act 1901". Cth.
- ^ JSTOR 824595.
- ^ Deakin v Webb [1904] HCA 57, (1904) 1 CLR 585, High Court (Australia).
- (on appeal from Vic, Australia).
- ^ "Commonwealth Salaries Act 1907". Cth.
- ^ The Commissioners of Taxation v Baxter [1908] UKPC 1, [1908] AC 214; [1908] UKPCHCA 1, (1908) 5 CLR 398, Privy Council (on appeal from Australia).
- ^ Federated Amalgamated Government Railway & Tramway Service Association v NSW Rail Traffic Employees Association (Railway servants case) [1906] HCA 94, (1906) 1 CLR 488, High Court (Australia).
- JSTOR 1323360.