Reserved powers doctrine

Defunct principle of Australian law

The reserved powers doctrine was a principle used by the inaugural High Court of Australia in the interpretation of the Constitution of Australia, that emphasised the context of the Constitution, drawing on principles of federalism, what the Court saw as the compact between the newly formed Commonwealth and the former colonies, particularly the compromises that informed the text of the constitution. The doctrine involved a restrictive approach to the interpretation of the specific powers of the Federal Parliament to preserve the powers that were intended to be left to the States. The doctrine was challenged by the new appointments to the Court in 1906 and was ultimately abandoned by the High Court in 1920 in the Engineers' Case, replaced by an approach to interpretation that emphasised the text rather than the context of the Constitution. TOC

The Constitution sets up the Commonwealth of Australia as a federal polity, with enumerated limited specific powers conferred on the Federal Parliament. The constitutional convention held in Adelaide in 1897, passed a resolution that, as the first condition for the creation of a federal government, "the powers, privileges and territories of the several existing colonies shall remain intact, except in respect of such surrenders as may be agreed upon to secure uniformity of law and administration in matters of common concern." The intention of the framers of the Australian Constitution has been said to be "to create a federal government, albeit of limited jurisdiction, which would be responsive to the popular will in specified matters of national concern and to superimpose it upon existing colonial or state governments which were seen as each adequately responsive to the popular will within their respective territorial constituencies." One of the tasks facing the inaugural High Court was to establish its reputation and in so doing to win the confidence of the Australian people. Another was to resolve "constitutional loose ends" about the nature of the federal system and the legislative powers of the new Commonwealth that remained unresolved following the debates in the constitutional conventions. For the first two decades, the High Court stayed reasonably true to the "co ordinate" vision of the framers in which the Commonwealth and the States were both financially and politically independent within their own spheres of responsibility. The High Court rejected Commonwealth government attempts to extend its authority into what were perceived as areas of State jurisdiction. The court did so by adopting a doctrine of "reserved State powers" combined with "implied inter governmental immunities", to protect both the Commonwealth and the states from legislative or executive action which "would fetter, control, or interfere with, the free exercise" of the legislative or executive power of the other. The essence of the first part of the doctrine was that grants of power to the Commonwealth in the Constitution should be read in a restrictive way so as to preserve areas that had been intentionally left as the responsibility of the states, particularly where the Commonwealth power had an interstate element, the trade and commerce power, and the conciliation and arbitration power.

The three inaugural judges of the High Court, Griffith CJ, Barton and O'Connor JJ, and the two new judges appointed in 1906, Isaacs and Higgins JJ, had been leading participants in the Constitutional Conventions and all are properly seen as among the framers of the Constitution. The Court described the Constitution as "framed in Australia by Australians, and for the use of the Australian people", their Honours are referring to their personal experience in that process, and not to the intention or knowledge of the Imperial Parliament in passing the Commonwealth of Australia Constitution Act 1900. Griffith CJ, a former Premier of Queensland, wrote most of the text of the Constitution. In 1891 Griffith resisted the idea of a commonwealth tribunal to deal with interstate industrial disputes. His objection was grounded in his notion of the reserve powers of the States. According to Griffith, "property and civil rights are left to the States". The danger of Kingston's proposal, as Griffith saw it, was that a national arbitral tribunal could cut across such rights. Barton J, a former member of the Parliament of NSW and the first Prime Minister of Australia, had been the leader of Australian federation following the death of Sir Henry Parkes and was the political leader who carried the draft constitution through the 1897–1898 Conventions and had intimate knowledge of the compromises that informed the text of the constitution. Barton resisted the proposal for Commonwealth power in relation to interstate industrial disputes. O'Connor J was also a former member of the Parliament of NSW and a close associate of Barton, including in the campaign for Australian Federation and as a member of the first federal ministry under then Prime Minister Barton. O'Connor had joined Barton in resisting proposal the proposal of interstate industrial disputes. Isaacs J had been a member of the Parliament of Victoria and had many reservations about the draft constitution. Alfred Deakin attributed the failure to elect him to the committee drafting the constitution to "a plot discreditable to all engaged in it" and that this antagonizing and humiliating snub sharpened his "tendency to minute technical criticism so as to bring him not infrequently into collision" with the drafting committee. In March 1898 Isaacs pleaded for delay for further consideration. After federation Isaacs was a member of the Australian Parliament and three of the leading cases in relation to the doctrine concerned legislation drafted while he was Attorney General. however Higgins was undeterred and succeeded in 1898. Despite these successes, Higgins J had opposed the draft constitution produced by the convention as too conservative, and campaigned unsuccessfully to have it defeated at the 1899 Australian constitutional referendum. Higgins was also a member of the Australian Parliament. When the Australian Labor Party sought to amend the Conciliation and Arbitration Bill to cover State railway employees, Higgins was one of the radicals who supported the amendments and helped bring down Deakin's government. When Labour formed a minority government under Prime Minister Chris Watson in 1904, Higgins became Attorney General in the Labor ministry, because Labor had no suitably qualified lawyer in Parliament. which involved payment of an annual fee together with duty on the quantity of beer. He didn't however have a licence under the NSW Liquor Act 1898 which required payment of a fixed fee regardless of the brewer's output. Bartley had successfully argued in the Supreme Court of NSW that the NSW licence fee was an excise duty and that the effect of section 90 of the Australian Constitution was that the State Act ceased to have effect once the Commonwealth imposed uniform customs duties. The High Court held that the NSW licence fee was not an excise as the fee did not depend on the quantity or value of the goods. Instead the NSW Act was for regulating the trade, including ensuring there was no adulteration of the beer. In delivering the opinion of the Court, Griffith CJ set out a principle that would be refined to the reserved state powers doctrine, stating:
In construing a Constitution like this it is necessary to have regard to its general provisions as well as to particular sections, and to ascertain from its whole purview whether the power to deal with such matters was intended to be withdrawn from the States, and conferred upon the Commonwealth. The Constitution contains no provisions for enabling the Commonwealth Parliament to interfere with the private or internal affairs of the States, or to restrict the power of the State to regulate the carrying on of any businesses or trades within their boundaries.

Whether State railways employees should be covered by the Commonwealth Conciliation and Arbitration Bill was a politically contentious issue. When the Australian Labor Party sought to amend the Conciliation and Arbitration Bill to cover State railway employees, a number of radicals in Deakin's government, including Isaacs and Higgins, supported the amendments and helped bring down the government, with Labor forming a minority government under Prime Minister Chris Watson. When finally passed in December 1904, the Commonwealth Conciliation and Arbitration Act 1904, purported to cover State railway employees with "Industrial dispute" defined as "including disputes in relation to employment upon State Railways". Higgins who appeared for the respondents, in arguing that the Act was valid, relied not only on the conciliation and arbitration power, as a means of protecting manufacturers who paid "fair and reasonable" wages to their employees. The Court was divided 3:2 with the majority, Grifith CJ, Barton & O'Connor JJ, holding that the Excise Tariff Act 1906, was invalid. While the doctrine of reserved powers permeated the decision of the majority it is not clear that the decision rested solely on that doctrine. In the course of argument, Griffith CJ stated "The express power given to the Commonwealth Parliament to deal with foreign and inter state trade and commerce implies a prohibition against interfering with interstate trade and commerce, and that must be remembered in dealing with the other powers given." The majority described the applicable rule in this case as "different, but founded upon the same principles", concluding that the power of taxation could not be exercised so as to operate as a direct interference in the internal affairs of the States.

Isaacs J strongly opposed the reserved powers doctrine, holding "There can be no derogations from the grant expressly made, except those which are expressly stated or which of necessity inhere. It is an inherent consequence of the division of powers between governmental authorities that neither authority is to hamper or impede the other in the exercise of their respective powers, but that doctrine has no relation to the extent of the powers themselves; it assumes the delimitation aliunde. It is contrary to reason to shorten the expressly granted powers by the undefined residuum". Higgins J similarly rejected the reserved powers doctrine stating "To say that the Federal Parliament cannot make a law because legislation on the subject belongs to the States is rather to invert the true position. The Commonwealth has certain powers, and as to those powers it is supreme; the State has the rest. We must find what the Commonwealth powers are before we can say what the State powers are".

The Union Label case, H. B. Higgins, then a member of the House of Representatives, similarly spoke in support of the union label. The Trade Marks Act 1905 provided that an employer could use the union label if there was a closed shop or if the union agreed. The majority, Griffiths CJ, Barton and O'Connor JJ held that the power with respect to "trade and commerce with other countries, and among the States" does not extend to the internal trade and commerce of a State. The intention of the Constitution was that the power to legislate as to internal trade and commerce was reserved to the States, to the exclusion of the Commonwealth as if section 51(i) contained words prohibiting the exercise of such powers by the Commonwealth. Isaacs and Higgins JJ dissented however their reasons do not specifically address their continued opposition to the reserved powers doctrine.